CHAINTECH - Annual Report 2023 | FinancialReports.eu

Stock Code: 2425

CHAINTECH Technology Corporation

2023 Annual Report

Publication date: April 30, 2024 Annual Report Website:http://mops.twse.com.tw Company Website:http://www.chaintech.com.tw

I. Company Spokesperson, Acting Spokesperson
Name of Spokesperson: Li, Kai-li

Title: Manager of Marketing and Planning Department Tel: (02)2913-8833

Email:[email protected]

Name of Acting Spokesperson: Chang, Ya-Ling Title: Chief Auditor Tel: (02)2913-8833

Email:[email protected]

II. Company Address: 3F, No. 48-3, Minchuan Rd., Xindian Dist., New Taipei City Tel: (02)2913-8833
III. Stock Transfer Institution

Name: Service Agency Department, Grand Fortune Securities Co., Ltd.

Address: 6F, No. 6, Sec. 1, Zhongxiao W. Rd., Zhongzheng Dist., Taipei City 10041

Tel: (02)2371-1658

Website:http ： //gfortune.com.tw

IV. CPAs for the Financial Report in the Most Recent Fiscal Year Name of Accounting Firm: PwC Taiwan

Name of CPAs: CPA Min-Chuan Feng and CPA Ya-Hui Lin Address: 27F., No. 333, Sec. 1, Keelung Rd., Taipei City Tel: (02)2729-6666

Website:http ： //www.pwc.tw

V. Name of Trading Venues for Overseas Flotation of Marketable Securities and Means of Inquiry into Information Thereof: None.
VI. CHAINTECH's Website:http ： //www.chaintech.com.tw/

Table of Contents

Page

Chapter 1. Letter to Shareholders	Chapter 1. Letter to Shareholders	1
Chapter 2. Company Profile		4
I.	Date of Incorporation	4
II.	Company History	4
Chapter 3. Corporate Governance Report		8
I.	Organization	8
II.	Information of Directors, Supervisors, General Manager, Deputy General
	Manager, Assistant Manager, and Managers of Departments and Branches	11
III.	Status of Corporate Governance	29
IV.	Information on CPAs fees	73
V.	Information About Replacement of CPA	73
VI.	If the Company's Chairman, General Manager, or Managers in Charge of Finance
	and Accounting Operations Held Positions in an Accounting Firm or Its Affiliates
	in the Most Recent Year, their names, positions, and period of working should be
	disclosed. The affiliated enterprises of the accounting firm of CPAs refer to those
	in which the CPAs of the accounting firm hold more than 50% shares or obtain
	more than half seats of directors, or the accounting firm of CPAs is company or
	institution of affiliated enterprises in released or printed materials to the outside	74
VII.	Status of Share Transfer and Changes in Equity Pledge by the Chairman,
	Supervisors, Managers, and Shareholders with Over 10% Shareholdings in the
	Most Recent Year until the Publication Date of the Annual Report	75
VIII.	Information on the related party relationship as defined in the Statements of
	Financial Accounting Standards No. 6 between the Company's top ten
	shareholders by shareholding ratio	77
IX.	Shares of Investment of Equity Method and the Consolidated Shareholdings Held
	by the Company, Its Directors, Supervisors, Managers, and Enterprises under
	Direct or Indirect Control of the Company	78
Chapter 4. Funding Overview		79
I.	Capital and Shares	79
II.	Corporate Bonds	86
III.	Issuance of Preferred Shares: None	86
IV.	Issuance of Overseas Depository Receipts	86
V.	Employee Stock Options	86
VI.	New Restricted Employee Stares	86
VII.	Issuance of New Shares in Connection with the Merger or Acquisition of Other
	Companies	86
VIII.	Capital Utilization Plan and Implementation	86

Chapter 5. Operating Overview	Chapter 5. Operating Overview	87
I.	Business Activities	87
II.	Market, Production, and Sales Overview	99
III.	Number of Employees in the Last Two Years Up to the Printing of this Annual Report
		109
IV.	Information on Environmental Protection Expenditure	110
V.	Labor relations	110
VI.	Information security	114
VII.	Material Contracts	115
Chapter 6. Financial Information		116
I.	Condensed balance sheet and statement of comprehensive income of the most
	recent five years	116
II.	Financial Analysis of the Last Five Years	120
III.	Audit report of the financial report for the most recent year from the audit
	committee	127
IV.	Consolidated Financial Statements for the Most Recent Year, Certified by CPAs	129
V.	Individual financial report for the latest year audited and approved by accountants
		212
VI.	Financial Difficulties of CHAINTECH and Its Affiliates in the Most Recent Year
	to the Publication Date of this Annual Report and their Impact on the Company's
	Financial Conditions	292
Chapter 7. Analysis for Financial Condition and Operating Results and Risk
	Management	292
I.	Comparative Analysis of Financial Conditions	292
II.	Comparative Analysis of Financial Performance	293
III.	Cash Flow Analysis	294
IV.	Impact of Major Capital Expenditures on Corporate Finances and Business for the
	Most Recent Year	294
V.	Policy on Reinvestment in Other Companies, the Main Reasons for Profit/Loss
	Resulting Therefrom, Improvement Plan, and Investment Plans for the Upcoming
	Fiscal Year	295
VI.	Risk Management and Assessment	296
VII.	Other important items	300
Chapter 8. Special Notes		301
I.	Information on Affiliated Companies	301
II.	Private Placement Securities in the Most Recent Year to the Publication Date of
	this Annual Report	306
III.	Holding or Disposal of CHAINTECH's Shares by the Subsidiaries of the Most
	Recent Year to the Date of Publication of this Annual Report	306
IV.	Other Necessary Supplements	306

Chapter 9. For the Most Recent Year and up to the Publication Date of the Annual Report, the Occurrence of Events as Provided for in Subparagraph 2, Paragraph 2, Article 36 of the Securities Exchange Act Which Have a Material Effect on Shareholders' Equity or Securities Prices

307

Chapter 1. Letter to Shareholders

Dear Esteemed Shareholders:

I. 2023 Business Results

CHAINTECH's consolidated operating revenues in 2023 was NT$6,823,399 thousand, a increase of 10.08% from that of NT$6,198,674 thousand in 2022. Net profit after tax was NT$233,205 thousand, net profit attributable to owners of the parent company was NT$161,901 thousand, and net profit after tax per share was NT$1.68.

CHAINTECH's business results for 2023 and business plan for 2024 are summarized below:

(I) Implementation Results of Business Plan:

mplementation Results of Business Plan:	mplementation Results of Business Plan:	mplementation Results of Business Plan:	mplementation Results of Business Plan:	mplementation Results of Business Plan:
Unit: NT$ thousand; %
Item	2023	2022	Increase (decrease) amount	Increase (Decrease) %
Operatingrevenue	6,823,399	6,198,674	624,725	10.08
Grossprofit	682,472	622,860	59,612	9.57
OperatingMargin	225,121	314,086	(88,965)	(28.33)
Netprofit after tax	233,205	363,465	(130,260)	(35.84)
Net profit attributable to owners ofparent company	161,901	320,372	(158,471)	(49.46)
Net profit on non-controlling interest	71,304	43,093	28,211	65.47
Net profit after tax per share(NT$)	1.68	3.32	(1.64)	(49.40)

(III) Financial income and expenditure and profitability analysis:

Item	Year	2023	2022
Financial structure%	Ratio of liabilities to assets	31.15	28.05
	Ratio of long-term capital to property, plant and equipment	136.83	11,259.40
Solvency%	Current ratio	287.04	313.24
	Quick ratio	198.07	252.69
	Interest coverage ratio	27.79	55.97
Profitability%	Return on assets ROA(%)	7.06	11.19
	Return on shareholders' equity (%)	9.66	16.65
	Netprofit margin	3.42	5.86
	Earningsper share after tax(NT$)	1.68	3.32

II. Outline of 2024 Business Plan

In the face of future market changes, CHAINTECH's business policy, expected targets and important production and marketing policies are as follows:

(I) Business Policy
Marketing: Continue to strengthen the close cooperation between distributors and agents, build different types of sales channels, and strengthen partnership relationship with clients with sound financial structure.
Financial policy: Focus on stable operations and strict control over the quality of accounts receivable, make collections according to the terms of sales to ensure the asset preservation, and carry out production by order to maintain low inventories and the effective operation of working capital.
R&D policy: The key point is developing high-end motherboards for extreme overclocking and high-end gaming. Relevant software and hardware tools are actively developed. Therefore, the development schedule is shortened, and key R&D technologies are maximized and applied to each project. On the other hand, it has officially entered into the design of large motherboards and power supplies for workstations and servers, and developed high-power, flat, and ultra-thin models. In addition to providing stable execution performance for AI servers and workstations, remote control software capabilities are also actively deployed.
(II) Estimated sales volume and supporting information

With the start of the first year of AI PC in 2024, Lenovo Group in mainland China and IDC jointly released the "AI PC Industry (China) White Paper" at the first AI PC Industry Innovation Forum. The "White Paper" points out that, in the future, any individual can have his/er own AI PC and run his/er own personal large model. AI PC will become an indispensable personal AI assistant for individuals, families and enterprises, and AI PC has become the most important product of AI terminals.

NVIDIA GeForce RTX 40 SUPER series GPU was released in January 2024. Driven by artificial intelligence technology, the market demand for e-sports and creators is expected to further recover. Matt Wuebbling, vice president of global marketing for NVIDIA GeForce, said that GeForce RTX SUPER GPU now supports more than 500 RTX games and applications, which will prepare users for the wave of generative AI applications that are about to land on PC.

(III) Important Production and Marketing Policies

Multiple suppliers are maintained, and long-term strategic partnerships are established with suppliers to ensure raw material manufacturing capabilities and supply stability. In addition, continue to improve technology R&D and product quality, provide products that meet customer needs, and unremittingly develop new sales channels.

CHAINTECH is committed to maintaining its financial health and stable operations based on its existing core values. In the face of the fiercely changing display card industry market, at the same time, efforts have been made to optimize the product portfolio, and the proportion of mid-to-high-end products and product unit prices have been increased. In addition to investment in the AI industry, the expansion of high-level R&D manpower is also continuing to expand. By organizing a high-end motherboard R&D team, CHAINTECH declares its determination to delve into various industries to maintain sustainable development and stable profits. On behalf of the management team of CHAINTECH Technology Corporation, I would like to take this opportunity to once again express our gratitude for your continued support and encouragement.

Chairman: Shu-Jung Kao

Chapter 2. Company Profile

I. Date of Founding: November 17, 1986
II. Company History:
1986[] Founding of CHAINTECH Technology Corporation with an NT$5 million registered capital.
- Establishment of self-owned brand ELT.

1987

[] Purchase of factories and setting up production lines.
1988[] Introduction of high-end equipment and appliances in the factories.
1989[] Conclusion of technical cooperation contract with IBM in April.
Cash capital increases of NT$55 million and NT$60 million in March and December, respectively, with paid-in capital reaching NT$120 million.
1990[] Cash capital increase of NT$75 million in June, with the paid-in capital reaching NT$195 million.
1991[] Establishment of Chaintech Computer GmbH through investment in Germany in July.
1993[] Ex-Chairman of the Board Ke, Heng-Kuang passed away of illness, and Mr. Su, Ke-Kang, representative of Behavior Tech Computer Corp., appointed as his successor.
1994[] Capital reduction of NT$78 million in April and cash capital increase of NT$82 million in December, with a paid-in capital of NT$199 million.
Purchased factory building on Lian-Cheng Road of Jhonghe City.
Passed ISO-9002 certification.
1995[] Cash capital increase of NT$121 million in July, with paid-in capital reaching NT$320 million.
Increased investment of NT$1.3 million in Chaintech Computer GmbH, with 100% shareholding in November.
1996[] Earnings turned capital increase of NT$32 million in November, with paid-in capital reaching NT$352 million.
Establishment of the American subsidiary Chaintech Computer U.S.A. in December.
1997[] Earnings and employees' bonus turned capital increase of NT$76.6 million in May, with paid-in capital reaching NT$428.6 million.
Mr. Wang, Ching-Yeh, representative of Central Asia Venture Corp., appointed the Chairman of CHAINTECH in July.
1998[] Publicly listed on February 4.
Earnings and employees' bonus turned capital increase of NT$92.617 million and cash capital increase of NT$178.783 million in July, with paid-in capital reaching NT$700 million.
Acquired land in Tucheng in August and officially commenced construction in December.
Established Gold Ring overseas company in October.

Disposal of subsidiary in Germany and established an European subsidiary in October.
Passed ISO 9001 certification in December.
1999
[] Mr. Tung, Chung-Chuan, representative of Central Asia Venture Corp. appointed the Chairman of CHAINTECH on April 30.
Mr. He, Ai-Tang appointed the General Manager of CHAINTECH in October.
The first convertible corporate bonds of NT$300 million raised in December.
Mr. Tung, Chung-Chuan, representative of Hongyun Electronics Co., appointed the Chairman of CHAINTECH on December 18.
2000  Launched marketing posts in China Mainland in January to expand the Chinese market.
The Investment Review Commission passed indirect re-reinvestment in DONGGUAN CHANGAN FORTECH ELECTRONICS CO., LTD in January.
Relocated to the Tucheng plant in Taipei City in March.
The US subsidiary was combined with Chaintech Excel in April.
Shares went from Over-the-Counter to public listing on September 11.
Mr. Tung, Chung-Chuan passed away in December and Vice Chairman of the Board Tung, Ching-Chuan appointed interim Chairman.
2001  Mr. Tung, Ting-He, representative of Hongyun Electronics Co., was reappointed as the Chairman of CHAINTECH on January 4.
Established the Digital Media Business Development department in November, officially engaging in the field of digital multi-media.
2002  Inject of KRW270 million for the establishment of a subsidiary in February.
Mr. He, Ai-Tang appointed the Chairman of CHAINTECH and Ms. Chang, PiLan appointed the Vice Chairman of CHAINTECH on May 2.
Issued 5 million employee stock option certificates in October.
Established the US subsidiary with US$1 million in December.
2003  Remaining bonds of "CHAINTECH I" completed the conversion in August.
2004  Sales of Tucheng plant in June.
The operation headquarters was relocated to the Far East Industrial Zone in Jhonghe City in December.
2005  After the completion of two private placements of convertible bonds in May and June, a total of NT$265 million was funded, with paid-in capital reaching NT$2,056,136,860, and became the subsidiary of Walton Advanced Engineering, Inc.
Changed its name to Walton Chaintech Corp on September 7.
Mr. Yu, Hung-Chi, representative of Walton Advanced Engineering, Inc., appointed the Chairman of CHAINTECH in September.
Treasury stocks capital reduction of NT$16 million, with a paid-in capital of NT$2,040,136,860 in September.
2006  Capital reduction of NT$750,489,950 in January, with a paid-in capital of NT$1,289,646,910.
Set up the EMS Business Development Department in January to increase the OEM business.

Set up the Memory Business Development in January and officially entered the DRAM field.
2007  Passed ISO 14001 certification in June.
Capital increase of NT$11.17 million for employees' executive stock option, with paid-in capital reaching NT$1,300,816,910.
Disposal of South Korean subsidiary in December.
2008  Two private placements were listed on the Stock Exchange on September 5.
Capital reduction of NT$532,294,280, with paid-in capital reaching NT$768,522,630 on September 9.
2009  Mr. Chang, Ta-Rung, representative of Walton Advanced Engineering, Inc., appointed the Chairman of CHAINTECH on January 6.
Jointly held 15% of Info-Tek Corporation’s equity with HannStar Board in July.
Mr. Fan, Po-Kang, representative of Walton Advanced Engineering, Inc., appointed the Chairman of CHAINTECH in August.
2010[] Cash capital increase of NT$207,500,000, with paid-in capital reaching NT$893,522,630 in March.
Acquired 100% equity of PSA through investment to expand the domestic channel market in April.
The operation headquarters was relocated to the 4F, No. 48-3, Minquan Road, Xindian District in April.
Sold out the entire shares of "Info-Tek Corporation" to GBM in July.
2011[] Ended DRAM related businesses in April.  Capital reduction of NT$275,204,970 in November, with paid-in capital reaching NT$618,317,660.
Private placement of common shares totaling NT$385,280,000 in November, with paid-in capital reaching NT$1,178,317,660.
Yeland Investment obtained 35.64% of the Company's equity through private placement in November, and became a major shareholder of CHAINTECH.
Sold out all equity of subsidiary PSA in November.
- Established the 1st Remuneration Committee in December.
2012[] Mr. Li-Cheng Lu, representative of Yeland Investment, appointed the Chairman of CHAINTECH on January 18.
Signed strategic alliance cooperation agreement with Shenzhen Colorful Group Limited in March, establishing strategic partnership incorporating production, sales, and research, for joint marketing of main board, display card, and digital multi-media products in March.
Capital reduction of NT$242,615,600 in August, with paid-in capital reaching NT$935,702,060.
Established Jinghong Digital R&D Service Co., Ltd. in Shenzhen in October.
2013[] Changed its name to Chaintech Technology Corporation on January 10.  The operation headquarters was relocated to 3F, No. 48-3, Minquan Road, Xindian District in January.
The Investment Review Commission approved Colorful Group’s investment in Zhongjie Properties, directly holding 10% equity of CHAINTECH in April.
Established the Wise Providence Limited overseas company in May.

  - Mr. Shu-Jung Kao, representative of Yicheng International, appointed the Chairman of CHAINTECH on June 21.

  - Earnings turned capital increase of NT$9,357,030 in September, with paid-in capital reaching NT$945,059,090.

2014[] The Investment Review Commission re-approved Colorful Group to invest in Yicheng International in March, directly holding up to 46.2% of the equity of CHAINTECH. In July, CHAINTECH officially varied to China Mainland invested enterprise.
- Earnings turned capital increase of NT$147,129,220 in September, with paid-in capital reaching NT$1,092,488,310.
2015[] Issuance of common shares by private placement in 2011 and became listed for transactions on June 10.
- The status of Zhongjie Properties as a major shareholder was revoked on October 2.
2016[] After the re-election of directors and supervisors, two independent directors were elected in addition to implementing corporate governance in June.
2018[] Capital reduction of NT$77,500,000 on May 3, the base date for the capital reduction of treasury stock, with paid-in capital reaching NT$1,014,988,310.
- Established the Application Technology Development Department in May.
- Invested in B2B cloud service company CloudeMile Co. with the main business of in-depth learning and big data analysis in September.
2019[] Acquired 51% of Sitonholy (Tianjin) Technology Co.’s equity through the subsidiary Jinghong Investment in March.
- Closed the Wise Providence Limited overseas company in April.
Sold Bahamas Federal Shanghai Co., Ltd. and Dongguan Kede plant in August.
2020  Invested in uSenlight Corporation in March for the 5G product layout. 2021[] Acquired Baotou Yihui through its subsidiary Tianjin Sitonholy in October to strengthen IDC internet infrastructure platform services.
2022[[]] Established the Motherboard Business Center in May.
[[]] 
- Established the 1st Audit Committee in June.
- A Shenzhen subsidiary was established through a joint effort with the subsidiary Tianjin Sitonholy in November.
- Capital reduction of NT$5 million on December 12, the base date for the capital reduction of treasury stock, with paid-in capital reaching NT$964,988,310.
2024  The Power Research and Development Division was established in January.

Chapter 3. Corporate Governance Report

I. Organization

(I) Organizational Structure

==> picture [591 x 377] intentionally omitted <==

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

Shareholders'
Meeting
Board of
Directors
Audit Committee
Auditing Office
Remuneration
Committee
Chairman of
the Board
General
Manager
Overseas
Management Office VGA Business Division PC Business Center
subsidiaries
----- End of picture text -----

(II) Businesses of Major Departments

Department	Responsible Business
Auditing Office	Assist the Board of Directors and the Manager in checking and reviewing the deficiency of the internal control system and measuring operation effect and efficiency, offering timely improvement suggestions to support the Company in reaching the goal of the internal control system, and ensure sustainable and effective implementation of internal control system that is to be used as the basis forperfectingthe internal control system.
Management Office	1. Responsible for the mid-to-long-term capital planning and short-term funding scheduling of the Company. 2. Preparing and promoting the planning of operations concerning stock affairs, capital, and credit auditing. 3. Performing budget aggregation and preparation, preparing operational financial statements concerning accounting, tax processing, and cost settlement. 4. Managing and planning the Company's general and common affairs including procurement and management. 5. Making and implementing human resource planning, recruitment, appointment, training, and development. 6. Responsible for company information-related business, and establishing mechanisms related to safety control and firewall. 7. Preparing, reviewing and managing contracts, and handling matters involving litigation cases, and collection of bad debts. 8. Responsible for control and management related matters like handling of orders, arranging shipping, import and export declarations, and cargo insurance.
VGA Business Division	1. Responsible for sales and business expansion of the products of display cards. 2. Providing various marketing tools and formulating sales and marketing strategies to assist the business units in selling. 3. Planning and promoting various public relations advertising and marketing activities to enhance the image and reputation of the Company and its products. 4. Responsible for matters related to customer service, DOA, RMA, and technical support.
PC Business Center	1. Responsible for the research and development of new products of motherboard and power and the confirmation of primary samples. 2. Responsible for analysis and countermeasures of product defects for improvement and uplifting quality. 3. Responsible for document control operations to ensure the appropriateness and effectiveness of the documents. 4. Responsible for the matters related to new product verification, transfer of technology, and parts recognition. 5. Collecting industrial information and planning the specifications of products and services as reference forproduct development.

Department	Responsible Business
	6. Providing customer service and resolving customers' problems arising in the use of CHAINTECH's products and transferring customer feedback to the relevant responsible units for handling and follow-up. 7. Responsible for promoting Motherboard and power supply business. 8. Supervising and implementing quality systems. 9. Responsible for the procurement and return of raw materials, personal or production equipment as well as the disposal of abnormalities and claim for compensation thereof. 10. Responsible for supplier management and evaluation as well as raw material price investigation and cost price review and analysis. 11. Keeping abreast of delivery schedules of materials and ensuring their sources to avoid production interruption and thus product delivery as a result of material shortage. 12. Responsible for order production scheduling and progress control management.
Overseas subsidiaries	Responsible for managing the overseas subsidiaries.

Department

Responsible Business

6. Providing customer service and resolving customers' problems arising in the
use of CHAINTECH's products and transferring customer feedback to the
relevant responsible units for handling and follow-up.
7. Responsible for promoting Motherboard and power supply business.
8. Supervising and implementing quality systems.
9. Responsible for the procurement and return of raw materials, personal or
production equipment as well as the disposal of abnormalities and claim for
compensation thereof.
10. Responsible for supplier management and evaluation as well as raw material
price investigation and cost price review and analysis.
11. Keeping abreast of delivery schedules of materials and ensuring their sources
to avoid production interruption and thus product delivery as a result of
material shortage.
12. Responsible for order production scheduling and progress control
management.

Overseas
subsidiaries

Responsible for managing the overseas subsidiaries.

II. Information of Directors, Supervisors, General Manager, Deputy General Manager, Assistant Manager, and Managers of Departments and Branches

(I) Information on Directors

1. Information on Directors

Departments and Branches (I) Information on Directors 1. Information on Directors	Departments and Branches (I) Information on Directors 1. Information on Directors	Departments and Branches (I) Information on Directors 1. Information on Directors	Departments and Branches (I) Information on Directors 1. Information on Directors	Departments and Branches (I) Information on Directors 1. Information on Directors	Departments and Branches (I) Information on Directors 1. Information on Directors
							April 16,2024 Unit: NT$thousands
Title	Nationality or Registration Place	Name	Gender Age	Date of Election	Term	Date First Election	Shares Held Upon Election		Number of Shares Currently Held		Shares Held by Spouse and Underage Children		Shares Held in the Name of Other Persons		Main Education and Experience	Current Positions in CHAINTECH and Other Companies	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:			Remarks
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Sharehold ingratio			Title	Name	Relationship
Chairman of the Board	The Republic of China	Yiland International Ltd. Representative: Shu-Jung Kao	M 60-69	2019.6.14	3	2012.1.18 2013.6.21	28,532,080 －	28.11 －	24,517,000 －	25.40 －	－－	－－	－－	－－	Department of Electronic Engineering, National Chin-Yi University of Technology, General Manager of AI-EN Thailand domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc.	General Manager of CHAINTECH, Supervisor of Yi Chen, Director of JDX Technology, Independent Director of LeRain Technology	－	－	－	Note 1
Directo	The Republic of China	Yiland International Ltd. Representative: Li-Cheng Lu	M 60-69	2019.6.14	3	2012.1.18 2012.1.18	28,532,080 －	28.11 －	24,517,000 －	25.40 －	－－	－－	－－	－－	Computer Research Institute of Bond University, General Manager of Albatron Administrative Management Center, General Manager of LJ Optics, Chairman and General Manager of Chaintech Technology Corporation, Legal person supervisor representative of Fullerton Technology co. ltd	Chairman of the Board, Chun Electronics Co., Ltd. Independent Director, Walton Advanced Engineering, Inc.	－	－	－

Title	Nationality or Registration Place	Name	Gender Age	Date of Election	Term	Date First Election	Shares Held Upon Election	Shares Held Upon Election	Number of Shares Currently Held	Number of Shares Currently Held	Shares Held by Spouse and Underage Children	Shares Held by Spouse and Underage Children	Shares Held in the Name of Other Persons	Shares Held in the Name of Other Persons	Main Education and Experience	Current Positions in CHAINTECH and Other Companies	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Sharehold ingratio			Title	Name	Relationship
Director	The Republic of China	Yiland International Ltd. Representative: Mu-Tien Wang	M 50-59	2019.6.14	3	2012.1.18 2013.6.21	28,532,080 －	28.11 －	24,517,000 －	25.40 －	－－	－－	－－	－－	College of Law in Taiwan University, EMBA of the Chinese University of Hong Kong, Vice President of Credit Card Business Department of Ping An Bank, Assistant Manager of Credit Card Business Division of China CTBC Bank, Credit Card Center Market Director of Bank of Communications, Senior Vice President of YixinGroup	CEO, Shanghai Himalayas Financial Information Services Co., Ltd.	－	－	－
Independent Director	The Republic of China	Kuo-Chin Chen	M 50-59	2019.6.14	3	2016.6.14	－	－	－	－	－	－	－	－	School of Computer Science, Tamkang University IBM Project Manager, HP Senior Deputy General Manager, Professional Consultant and Lecturer of Haoyu, Qunchuang, Yuyi, Chuangxin and Dun & Bradstreet	Professional Consultant and Lecturer of Timing international Group	－	－	－
Independent Director	The Republic of China	Han-Yu Tang	M 50-59	2019.6.14	3	2016.6.14	－	－	－	－	－	－	－	－	MBA of Peking University, General Manager of Gigabyte China Region, Consultant of VIA CPU Technology	VIA Next Tech Deputy General Manager and General Manager of China Region	－	－	－
Independent Director	The Republic of China	Hsin-Ying Yang	F 30-39	2022.6.15	3	2022.6.15	－	－	－	－	－	－	－	－	Bachelor of Finance Management from Ohio State University, MBA from Zicklin School of Business of Baruch College, Assistant Manager of Corporate Finance at Citibank (Taipei).	SOE Electronic Independent Director, Director of Raffles Family Office (HK)	－	－	－

Title	Nationality or Registration Place	Name	Gender Age	Date of Election	Term	Date First Election	Shares Held Upon Election	Shares Held Upon Election	Number of Shares Currently Held	Number of Shares Currently Held	Shares Held by Spouse and Underage Children	Shares Held by Spouse and Underage Children	Shares Held in the Name of Other Persons	Shares Held in the Name of Other Persons	Main Education and Experience	Current Positions in CHAINTECH and Other Companies	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Any Executives, Directors, or Supervisors who are spouses or relatives within the Second Degree of Kinship:	Remarks
							Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Sharehold ingratio			Title	Name	Relationship
Independent Director	The Republic of China	Chi-Feng Wei	M 40-49	2022.6.15	3	2022.6.15	613,000	0.60	558,000	0.58	－	－	－	－	School of Computer Science, Tamkang University Deputy General Manager of HP	Chairman and General Manager of EMPTECH Co., Ltd.	－	－	－

Note 1: Where the Chairman and the general manager is the same person, explain the reason, rationality, necessity, and responding measures: (1) The Chairman is also the general manager of CHAINTECH, which allows the Board of Directors to grasp the operating status of the Company and delayer the management capacity to improve the efficiency and decision-making capacity. (2) To improve the independence of the Board of Directors, the Company actively trains proper candidates and increases the number of independent directors to four seats for realizing corporate governance. (3) Among the members of the Board of Directors, less than half of the Directors are also an employee or managerial personnel.

Major Shareholders of the Corporate Shareholders

April 16, 2024

	April 16,2024
Name of Corporate Shareholders	Major Shareholders of the Corporate Shareholders
Yiland International Ltd.	COLORFUL GROUP LIMITED(100%)

Note 1: Directors and supervisors who are corporate shareholders shall fill in the name of corporate shareholders.
Note 2: Fill in the names of major shareholders with top-10 ownership of the institutional shareholders and their individual holding percentage. If the major shareholders are a judicial person, please proceed to fill in more details in Table 2 below.
Note 3: If the legal person shareholder is not a company organizer, the name of the shareholder and shareholding ratio that should be disclosed at the beginning are the name of the investor or donor (refer to the Judicial Yuan Announcement for inquiries) and the capital contribution or donation ratio. If the donor has passed away, add "deceased".

3. Major Shareholders as Judicial Person

3. Major Shareholders as Judicial Person	3. Major Shareholders as Judicial Person
April 16,2024
Name of Corporate Shareholders	Major Shareholders of the Corporate Shareholders
COLORFUL GROUP LIMITED	Wan Shan(100%)

Note 1: If major shareholders in the above Table 1 are a judicial person, the name of a judicial person shall be filled.
Note 2: Fill in the names of major shareholders with top-10 ownership of the institutional shareholders and their individual holding percentage.
Note 3: If the legal person shareholder is not a company organizer, the name of the shareholder and shareholding ratio that should be disclosed at the beginning are the name of the investor or donor (refer to the Judicial Yuan Announcement for inquiries) and the capital contribution or donation ratio. If the donor has passed away, add "deceased".

4. Disclosure of information on directors’ professional qualifications and independence of independent directors:


Conditions Name	Professional qualifications and experience	Status of independence	Number of Other Taiwanese Public Companies Concurrently Served as an Independent director
Director: Yiland International Ltd. Representative: Shu-Jung Kao	Department of Electronics, National Chin-Yi University of Technology. Served as chairman and general manager of the Company. Currently serving as the legal person supervisor of E Cheng Technology Limited, director of JDX Technology Co., Ltd., and independent director of LeRain Technology Co., Ltd. More than 30 years of experience in computer peripheral related industries. Armed with operational leadership, marketing, industry knowledge and operational management capabilities. Moreover, there are no circumstances falling within Article 30 of the CompanyAct.	None.	1
Director: Yiland International Ltd. Representative: Li-Cheng Lu	Master of Computer Science from Bond University, Australia. Served as the general manager of the Company. Currently serving as the chairman of Chun Electronics Co., Ltd., chairman of Peugeot North Automobile, independent director of Walton Advanced Engineering, Inc., and executive director of Pg Union Corporation. More than 30 years of experience in computer peripheral related industries. Armed with the capabilities of business leadership, marketing, industry knowledge and operations management. Moreover, there are no circumstances fallingwithin Article 30 of the CompanyAct.	None.	1
Director: Yiland International Ltd. Representative: Mu-Tien Wang	Bachelor of Laws from National Taiwan University and EMBA from the Chinese University of Hong Kong. Served as Associate Manager of CTBC Bank Credit Card Business Division, Credit Card Marketing Director of Bank of Communications, and Senior Vice President of CreditEase Group. Currently serving as CEO of Shanghai Himalaya Financial Information Services Co., Ltd. More than five years of required work experience in business, finance and corporate affairs. Armed with operational leadership, marketing, legal and operational management capabilities. Moreover, there are no circumstances falling within Article 30 of the CompanyAct.	None.	0

Conditions Name	Professional qualifications and experience	Status of independence	Number of Other Taiwanese Public Companies Concurrently Served as an Independent director
Independent Director Han-Yu Tang	MBA from Peking University. Served as General Manager of Gigabyte China. Currently serving as consultant of VIA Core Technology. More than 30 years of experience in computer-related industries. Armed with operational leadership, marketing, industry knowledge and operational management capabilities. Moreover, there are no circumstances falling within Article 30 of the Company Act.	Compliant to independence	0
Independent Director Kuo-Chin Chen	Bachelor of Electronics and Computer Science from Tamkang University. Author of Business Weekly's Five Forces Formula for Success in the Workplace. Served as Project Manager of IBM, Senior Vice General Manager of HP. Currently serving as full-time consultant and lecturer of Timing Asia. More than 30 years of experience in computer peripheral related industries. Armed with operational leadership, marketing and operations management capabilities. Moreover, there are no circumstances falling within Article 30 of the Company Act.	Compliant to independence	0
Independent Director Hsin-Ying Yang	Bachelor's degree in financial management from the Ohio State University in the United States, and MBA from Baruch College of the City University of New York. Served as Associate Manager of Citibank Corporate Finance (Taipei) and Manager of JP Morgan Asset Management (Hong Kong). Currently serving as director of RafflesFamilyOffice (Hong Kong) and independent director of Shun on Electronic Co., Ltd. More than five years of required work experience in business, finance and corporate affairs. Armed with finance, accounting and risk management capabilities. Moreover, there are no circumstances falling within Article 30 of the Company Act.	Compliant to independence	1

Conditions Name	Professional qualifications and experience	Status of independence	Number of Other Taiwanese Public Companies Concurrently Served as an Independent director
Independent Director Chi-Feng Wei	Department of Industrial Engineering, Dayeh University. Served as Deputy General Manager of Hewlett-Packard Technologies (HP). Currently serving as Chairman and General Manager of EMPTECH Co., Ltd. More than 20 years of experience in computer peripheral related industries. Armed with information technology, marketing, industry knowledge and operational management capabilities. Moreover, there are no circumstances falling within Article 30 of the Company Act.	Compliant to independence	None.

Diversity and independence of the board of directors:
(1) Diversity of the board of directors:
- The Company advocates and respects its director diversity policy. In order to strengthen corporate governance and promote the sound development of the composition and structure of the board of directors, it is believed that the diversity approach helps improve the Company's overall performance. The selection of board members is based on the principle of "appoint people of the right caliber", who is armed with diverse and complementary capabilities across industries, including basic components (such as: age, gender, nationality, etc.), professional abilities (such as: finance, accounting, law and information technology, etc.), as well as business judgment, business management, leadership decision-making and crisis management capabilities. In order to strengthen the functions of the board of directors and achieve the ideal goal of corporate governance, Article 20 of the Company's "Corporate Governance Code" clearly stipulates that the overall board of directors should possess the following abilities:
- Ability to make operational judgments. 2. Ability in accounting and financial analysis. 3. Ability in management and operation. 4. Ability to handle crises. 5. Knowledge of the industry. 6. International market perspective. 7. Leadership skills. 8. Ability to make decisions.
- The diversity policy and implementation of the current board of directors and supervisors are as follows:

Diversified items Name of Directors		Basic components	Basic components	Basic components	Basic components	Basic components	Basic components	Basic components	Basic components	Basic components	Professional competence	Professional competence	Professional competence	Professional competence	Professional competence	Professional competence	Professional competence	Professional competence
	Nationalit y	Gender	Employee identification	Age				Independent Director Tenure			Finance	Information Technology	Market Marketing	Law	Management and operation	Accounting	Leadership and decision-making	Risk management
				Ages 30 to 39	Ages 40 to 49	Ages 50 to 59	Ages 60 to 69	3 years or less	3 to 9 years	9 years or more
Director: Yiland International Ltd. Representative: Shu-JungKao	The Republic of China	M	V				V					V	V		V		V	V
Director: Yiland International Ltd. Representative: Li-ChengLu	The Republic of China	M					V					V	V		V		V	V
Director: Yiland International Ltd. Representative: Mu-Tien Wang	The Republic of China	M				V					V		V	V	V			V
Independent Director Han-Yu Tang	The Republic of China	M				V			V			V	V		V		V	V
Independent Director Kuo-Chin Chen	The Republic of China	M				V			V			V	V		V			V
Independent Director Hsin-Ying Yang	The Republic of China	F		V				V			V					V		V
Independent Director Chi-Feng Wei	The Republic of China	M			V			V				V	V		V		V

The Company currently has 7 directors (including 4 independent directors). Among them, employees (1 person) account for 14% of all directors, and independent directors (4 people) account for 57% of all directors. Male directors (6 people) account for 86% of all directors, and female directors (1 person) account for 14% of all directors. The number of female directors will be increased by one more in the future to achieve gender equality.

(2) Independence of the board of directors:
A. The Company currently has four independent directors. The number of independent directors accounts for 57% of the total number of directors, which meets the requirement that independent directors should not be less than 1/5 of the number of directors. Currently, independent directors account for 4/7 of the directors’ seats.
B. Among the four independent directors, two are newly elected independent directors this year, and the other two have terms of less than 9 years, which complies with the requirement that the term of office be less than 9 years.
C. Only one director is also an employee, which is consistent with independence.
D. None of the members of the Board of Directors has the circumstances

specified in Paragraph 3 and Paragraph 4 of Article 26-3 of the Securities and Exchange Act. Furthermore, none of the directors are spouses or relatives within the second degree.

In summary, the Company's board of directors' independence goals have been achieved, and its qualifications are in compliance with legal requirements.

(II) Information on General Manager, Deputy General Manager, Assistant Managers, and Managers of Departments and Branches

							April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares	April 16,2024 Unit: Shares
Title	Nationality	Name	Gender	Date of Appointment	Number of Shares Held		Shares Held By Spouse and Minor Children		Shares Held in the Name of Other Persons		Main Education and Experience	Positions Currently Held in Other Companies	Managers who have spousal or second-degree family relationships within the Company			End of Remarks
					Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio			Title	Name	Relations
General Manager	The Republic of China	Shu-Jung Kao	M	2013. 7.31	－	－	－	－	－	－	Department of Electronic Engineering, National Chin-Yi University of Technology General Manager of AIEN Thailand PVT Co., Ltd. domestic businesses, Deputy General Manager of Beijing Kunru Computers, General Manager of Chih-Jung Information, Chief Representative of ELSA TechnologyInc	None.	－	－	－	(Note 1)
Deputy General Manager	The Republic of China	Chih- Kun Feng	M	2023. 6.1	－	－	－	－	－	－	Electronic major, Hwa Hsia Industrial Technical College Senior Deputy General Manager, Elitegroup Computer Systems Co.,Ltd.	None.	－	－	－	(Note 2)
Assistant Manager	The Republic of China	Po-Lin Huang	M	2022. 9.5	－	－	－	－	－	－	Department of Computer Science & Information Engineering of Chung Hua University General Manager, American Megatrends International, LLC Taiwan Branch(USA)	None.	－	－	－

Assistant manager and Informatio n manager	The Republic of China	Shih-Lun Wei	M	2023. 3.1	－	－	－	－	－	－	M.S. in Computer Information Systems, University of Miami Project Manager of E- commerce System Department, Wistron Corporation	None.	－	－	－	(Note 3)
Corporate governance supervisor and Financial/ Accounting Manager	The Republic of China	Yu-Nu Lai	F	2005. 9.7	－	－	－	－	－	－	Department of Business Administration, GLYJ Accountant of Haiji Shipping Forwarding Inc.	None.	－	－	－	－

Note 2: Vice President Chih-Kun Feng was onboard on June 1, 2023.

Note 3: Shih-Lun Wei was promoted to Assistant Manager on March 1, 2023.

(III) Remuneration Paid During the Most Recent Fiscal Year to Directors, Supervisors, General Manager and Deputy General Manager

Remuneration to Directors and Independent Directors (names and remuneration thereof to be disclosed individually)

2023 Unit: NT$1,000/share

Title	Name	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Directors' remuneration	Percentage of net income after taxes and the total of four items A, B, C, and D	Percentage of net income after taxes and the total of four items A, B, C, and D	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Compensations Paid to Concurrent Employees	Percentage of net income after taxes and the total of seven items A, B, C, D, E, F, and G	Percentage of net income after taxes and the total of seven items A, B, C, D, E, F, and G	Whether or not to have received remunerations from an invested company other than the Company’s subsidiary or parent company
		Compensations (A)		Severance pay and pension (B)		Directors' remuneration (C)		Business expenses (D)				Salaries, bonuses and allowances(E)		Severance pay and pension(F)		Employees' compensation(G)
		CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH		All companies listed in this financial report		CHAINTECH	All companies listed in this financial report
																Cash	Stock	Cash	Stock
General Director	Yiland International Ltd.	－	－	－	－	5,951	5,951	－	－	3.68	3.68	－	－	－	－	－	－	－	－	3.68	3.68
	Representative: Shu-Jung Kao	－	－	－	－	－	－	36	36	0.02	0.02	3,180	3,180	－	－	625	－	625	－	2.37	2.37
	Representative: Li-Cheng Lu	－	－	－	－	－	－	36	36	0.02	0.02	－	－	－	－	－	－	－	－	0.02	0.02	450
	Representative: Mu-Tien Wang	－	－	－	－	－	－	36	36	0.02	0.02	－	－	－	－	－	－	－	－	0.02	0.02	300
Independent Director	Han-Yu Tang	－	－	－	－	300	300	51	51	0.22	0.22	－	－	－	－	－	－	－	－	0.22	0.22
	Kuo-Chin Chen	－	－	－	－	300	300	51	51	0.22	0.22	－	－	－	－	－	－	－	－	0.22	0.22
	Hsin-Ying Yang	－	－	－	－	300	300	51	51	0.22	0.22	－	－	－	－	－	－	－	－	0.22	0.22
	Chi-Feng Wei	－	－	－	－	300	300	46	46	0.22	0.22	－	－	－	－	－	－	－	－	0.22	0.22
1. Please describe the remuneration payment policy, system, standard, and structure of Independent Directors, and describe the connectivity with the amount of the remuneration paid according to factors such as duties, risks assumed, and time invested: For the remuneration of Independent Directors, except for referring to Directors' performance evaluation results, the Company also refer to Article 16-1 of CHAINTECH's Articles of Association, where the Board of Directors are authorized to determine the remuneration of Directors and Supervisors according to the level of participation with CHAINTECH's operations and the value of their contribution, with reference to the standard within the industry. 2. Except for information disclosed above, remuneration paid for services rendered by Directors of the Company (e.g., serving as a non-employee consultant of parent company/ all companies/ investee entities in the financial statements) in the most recent fiscal year: None.

Please describe the remuneration payment policy, system, standard, and structure of Independent Directors, and describe the connectivity with the amount of the remuneration paid according to factors such as duties, risks assumed, and time invested: For the remuneration of Independent Directors, except for referring to Directors' performance evaluation results, the Company also refer to Article 16-1 of CHAINTECH's Articles of Association, where the Board of Directors are authorized to determine the remuneration of Directors and Supervisors according to the level of participation with CHAINTECH's operations and the value of their contribution, with reference to the standard within the industry.
Except for information disclosed above, remuneration paid for services rendered by Directors of the Company (e.g., serving as a non-employee consultant of parent company/ all companies/ investee entities in the financial statements) in the most recent fiscal year: None.

2. Remuneration for the General Manager and Deputy General Manager (disclose the name and remuneration individually)

2023 Unit: NT$1,000/share

Title	Name	Salary (A)	Salary (A)	Severance pay and pension (B)	Severance pay and pension (B)	Bonuses and allowances, etc. (C)	Bonuses and allowances, etc. (C)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Percentage of net income after taxes and the total of four items A, B, C, and D（％）	Percentage of net income after taxes and the total of four items A, B, C, and D（％）	Whether or not to have received remunerations from an invested company other than the Company’s subsidiary or parent company
		CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH Cash Stock		All companies listed in this financial report		CHAINTECH	All companies listed in this financial report
									Stock	Cash	Stock
General Manager	Shu-Jung Kao	4,288	4,288	－	－	1,740	1,740	625	－	625	－	4.11	4.11	－
Deputy General Manager	Chih-Kun Feng (Note)

Note: Vice President Chih-Kun Feng was onboard on June 1, 2023.

Table of range of remuneration

Table of range of remuneration
Range of Remuneration Paid to Each General Manager and Deputy General Manager of CHAINTECH	Name of General Manager and Deputy General Manager
	CHAINTECH	All companies listed in this financial report E
Less thanNT$1,000,000
NT$1,000,000 (inclusive) to NT$2,000,000
NT$2,000,000 (inclusive) to NT$3,500,000	Chih-Kun Feng	Same asleft
NT$3,500,000 (inclusive)toNT$5,000,000	Shu-JungKao	Same as left
NT$5,000,000 (inclusive) to NT$10,000,000
NT$10,000,000 (inclusive) to NT$15,000,000
NT$15,000,000 (inclusive)toNT$30,000,000
NT$30,000,000 (inclusive) to NT$50,000,000
NT$50,000,000 (inclusive) to NT$100,000,000
OverNT$100,000,000
Total	2	2

3. Remuneration for the Five Senior Officers with the Highest Remuneration:

2023 Unit: NT$1,000/share

Title	Name	Salary (A)	Salary (A)	Severance pay and pension (B)	Severance pay and pension (B)	Bonuses and allowances, etc. (C)	Bonuses and allowances, etc. (C)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Employees' remuneration (D)	Percentage of net income after taxes and the total of four items A, B, C, and D （％）	Percentage of net income after taxes and the total of four items A, B, C, and D （％）
		CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report	CHAINTECH		All companies listed in this financial report		CHAINTECH	All companies listed in this financial report
								Cash	Stock	Cash	Stock
Director and General Manager	Shu-Jung Kao	2,616	2,616	-	-	600	600	625	-	625	-	2.37	2.37
Deputy General Manager	Chih-Kun Feng (Note 1)	1,672	1,672	-	-	1,140	1,140	-	-	-	-	1.74	1.74
Assistant Manager	Po-Lin Huang	2,400	2,400	-	-	1,500	1,500	-	-	-	-	2.41	2.41
Assistant manager and Information manager	Shih-Lun Wei (Note 2)	1,096	1,096	-	-	200	200	36	-	36	-	0.82	0.82
Corporate governance supervisor and Financial/ Accounting Manager	Yu-Nu Lai	952	952	-	-	478	478	85	-	85	-	0.94	0.94

Note 1: Vice President Chih-Kun Feng was onboard on June 1, 2023.

Note 2: Shih-Lun Wei was promoted to Assistant Manager on March 1, 2023.

Names of Managers and for Distribution of Employees Remunerations and Distribution Status

December 31, 2023

	Title	Name	Stock	Cash	Total	Ratio of total amount to net income％
Manager	General Manager	Shu-JungKao	－	746	746	0.46
	DeputyGeneral Manager	Chih-Kun Feng (Note 1)
	Assistant Manager	Po-Lin Huang
	Assistant Manager and Information Manager	Shih-Lun Wei (Note 2)
	Corporate Governance Supervisor and Financial/ AccountingManager	Yu-Nu Lai

Note 1: Vice President Chih-Kun Feng was onboard on June 1, 2023. Note 2: Shih-Lun Wei was promoted to Assistant Manager on March 1, 2023.

(IV) Compare and analyze the total remunerations paid to each of CHAINTECH's Directors, Supervisors, General Managers, and Deputy General Managers in the 2 most recent years by all companies listed in this Company's individual and consolidated financial statements as a percentage of NIAT listed in the individual financial report and describe the policies, standards, and packages for payment of and the procedures for determining of such compensations and its linkage to business performance and future risk exposure.
Analysis of total remuneration of Directors, Supervisors, General Manager and Deputy General Manager as a percentage of NIAT:

Item Title	Ratio of total remunerations to net profit (loss) after taxes	Ratio of total remunerations to net profit (loss) after taxes	Ratio of total remunerations to net profit (loss) after taxes	Ratio of total remunerations to net profit (loss) after taxes
	2023		2022
	CHAINTECH	All companies listed in this financial report	CHAINTECH	All companies listed in this financial report
Directors (including independent directors)	6.97	6.97	5.03	5.03
Supervisor	-	-	0.02	0.02
General Managers and Deputy General Manager	4.11	4.11	1.18	1.18

Description of policies, standards, and packages for payment of remuneration of CHAINTECH, as well as procedures for determining remuneration, and its linkage to business performance and future risk exposure relevance:
(1) The remuneration of CHAINTECH's Directors comprise of salaries, remuneration, and allowances:
- Allowances: Primarily comprise of traffic allowance for Directors and Supervisors, which is determined according to the payment standards for listed companies or within the industry.
- Salaries: All CHAINTECH's Directors and Supervisors do not get paid salaries.
- Remuneration: The Company's directors' remuneration is handled in accordance with Article 19 of the Company's articles of association. The annual performance evaluation results of individual directors are used as a consideration and reference basis for determining their individual salary and remuneration, based on the evaluation results of the Company's "Board of Directors Performance Evaluation" and "Organizational Rules of the Salary and Remuneration Committee". The Company provides reasonable remuneration with reference to the overall operating performance, future operating risks and development trends of the industry, as well as the directors' individual performance achievement rates and contributions. Relevant performance appraisals and remuneration rationality are reviewed by the Salary and Remuneration Committee proposals and discussed and approved by the Board of Directors.

(2) Managers' remuneration shall be handled in accordance with the provisions of Article 3, Paragraph 2 of the Company's "Manager Remuneration Management Measures", including salary, bonuses and employee remuneration, etc. Compensation is mainly based on the position held and contribution, and is determined by taking into account the Company's "Employee Assessment and Evaluation Management Measures" and the salary level of the position in the peer market. Since the establishment of the Salary and Remuneration Committee on December 1, 2011, managers’ relevant remuneration has been reviewed and approved by the Salary and Remuneration Committee’s proposals and discussed and approved by the Board of Directors.
(3) Relevance of future risk: The remuneration standards, or structure and system of CHAINTECH to pay Directors, Supervisors, General Manager and Deputy General Managers are based on the evaluation according to CHAINTECH's Regulations Governing the Evaluation for Directors and Managers. Except for referring to the overall operating efficiency of the Company, the future operating risks and development trend of the industry, CHAINTECH also refers to the individual performance achievement and the contribution made to CHAINTECH's performance to provide reasonable compensation. Relevant performance audit and rationality of remuneration are reviewed by the Remuneration Committee and the Board of Directors, and they shall review the remuneration system at any time according to the actual operating status and relevant laws and regulations to pursue the balances between the sustainable operations and risk control of the Company.

III. Status of Corporate Governance

(I) Implementation of Board of Directors

The Board of Directors convened 5 meetings in 2023 (A). The attendance of Directors and Supervisors is as follows:

Title	Name	Times of actual attendance (attendance as nonvoting delegate) (B)	Times of Attendance by Proxy	Actual attendance (attendance as nonvoting delegate) % 【B/A】	Remarks
Chairman of the Board	Representative of Yiland International Ltd.: Shu-Jung Kao	5	0	100%	Re-elected (required to attend 5 meetings) Re-election Date: 2013.6.21
Director	Representative of Yiland International Ltd.: Li-Cheng Lu	5	0	100%	Re-elected (required to attend 5 meetings) Re-election Date: 2012.1.18
Director	Representative of Yiland International Ltd.: Mu-Tien Wang	5	0	100%	Re-elected (required to attend 5 meetings) Re-election Date: 2013.6.21
Independent Director	Han-Yu Tang	5	0	100%	Re-elected (required to attend 5 meetings) Re-election Date: 2016.6.14
Independent Director	Kuo-Chin Chen	4	1	80%	Re-elected (required to attend 5 meetings) Re-election Date: 2016.6.14
Independent Director	Hsin-Ying Yang	5	0	100%	Newly elected (required to attend 5 meeting) Re-election Date: 2022.6.15
Independent Director	Chi-Feng Wei	4	1	80%	Newly elected (required to attend 5 meeting) Re-election Date: 2022.6.15

Attendance of Independent Directors at each Board Meeting

◎: Attendance in Person ☆ : Attendance by Proxy. ＊ : On Leave

2023	1/13	3/22	5/5	8/7	11/6
Han-Yu Tang	◎	◎	◎	◎	◎
Kuo-Chin Chen	◎	◎	☆	◎	◎
Hsin-YingYang	◎	◎	◎	◎	◎
Chi-FengWei	◎	☆	◎	◎	◎

Other issues to be recorded:

If operation of the Board of Directors encounters one of the following circumstances, the date, session of the board meeting, content of the proposal, opinions of all Independent Directors, and the Company’s handling of the aforementioned opinions should be clarified:
(1) Matters referred to in Article 14-3 of the Securities and Exchange Act. CHAINTECH has established an Audit Committee, hence not applicable.
(2) Other than the matters mentioned above, other resolutions on which the Independent Directors have dissenting opinions with records or written announcements: None.
The director's implementation of the recusal of the interest-related proposal shall state the director's name, the content of the proposal, the reasons for the conflict of interest that should be recusal due to, and the circumstances of the director's participation in voting:

Items	Date/Term	Recusal of director	Proposal Content	Reasons of recusal	Participation in Voting
1	2023.1.13 The 4th session of the 15th	Shu-Jung Kao	Discussion on the proposal on 2023 managers' remuneration	Conflict of interests	Recusal from law and not participate in voting
		Shu-Jung Kao	Discussion of the 2022 managers' year-end bonus and special leaves bonus	Conflict of interests	Recusal from law and not participate in voting
2	2023.3.22 The 5th session of the 15th	Shu-Jung Kao/Li- Cheng Lu/Mu- Tien Wang/Han- Yu Tang/Kuo- Chin Chen/Hsin- Ying Yang/Chi- FengWei	Discussion of the proposal for CHAINTECH's 2022 remuneration to Directors.	Conflict of interests	Recusal from law and not participate in voting regarding the personal remuneration
		Shu-Jung Kao	Discussion of the proposal for CHAINTECH's 2022 remuneration to managers and employees' compensation	Conflict of interests	Recusal from law and not participate in voting

Disclose the evaluation cycle and period, scope of evaluation, method, and content of evaluation for the Board of Directors' self (or peer) evaluation

Implementation of Board of Directors' Evaluation:

Evaluation cycle	Period of evaluation	Scope of evaluation	Evaluation method	Content of evaluation
Once a year	January 1 to December 31, 2023	Board of Directors, Individual Directors, Remuneration Committee, and Audit Committee	Internal self-evaluation of the Board of Directors, self- evaluation of Directors, internal evaluation of Remuneration Committee, and internal evaluation of Audit Committee	Please see the following explanation s for details

(1) The internal evaluation of annual performance in 2023 aimed to:
A. Performance audit for the Board of Directors: (1) the degree of participation in the Company's operations; (2) enhancement of decision-making quality of the Board of Directors; (3) the composition and structure of the Board of Directors; (4) the election and continuous education of Directors.; (5) internal control
B. Performance audit for the individual Directors: (1) mastery of the Company's objectives and tasks; (2) cognition of Directors’ duties.; (3) the degree of participation in the Company's operations; (4) internal relationship management and communication; (5) professional and continuous education of directors; (6) internal control
C. Performance audit for Remuneration Committee: (1) the degree of participation in the Company's operations; (2) cognition of functional committee's duties; (3) enhancement of decision-making quality of the functional committees; (4) composition of the functional committees and the election of committee members.
D. Performance audit for Audit Committee: (1) the degree of participation in the Company's operations; (2) cognition of functional committee's duties; (3) enhancement of decision-making quality of the functional committees; (4) composition of the functional committees and the election of committee members; (5) internal control
(2) Evaluation results:

The Company has completed the measurement projects for evaluating the self-performance evaluation of the board of directors, functional committees and board members in 2023. The self-evaluation score of the board of directors' performance is 93 points (out of 100 points). The overall average performance self-evaluation score of individual board members was 96.1 points (out of 100 points). The self-evaluation score of the remuneration committee’s performance is 95 points (out of 100 points). The self-evaluation score of the audit committee's performance is 96 points (out of 100 points), indicating that the overall operation of the board of directors, remuneration committee and audit committee is at a good level. However, the board of directors has not yet appointed an external professional organization to perform the evaluation work and has not set up other functional committees, which are the main reasons for the failure to score. It is expected to gradually improve in the future. The results of this evaluation have been submitted to the board of directors for approval on January 25, 2024.

Goal of enhancing Board of Directors functions (such as establishing an audit committee and uplifting information transparency) and evaluation of its implementation in the current and most recent fiscal year:
(1) In order to enhance the depth of corporate governance, the regular meeting of shareholders completed the election of four independent directors on June 15, 2022. The number of independent directors exceeds one-half of the total number of directors, and the audit committee is composed of all independent directors.
(2) The Salary and Remuneration Committee is composed of all independent directors appointed by the board of directors.
(3) The Company joined the "ROC Corporate Operating and Sustainable Development Association" in early 2023 and became a member. The Association provides various refresher courses every year, and directors are encouraged to participate in various corporate governance courses to strengthen the functions of board members.
(4) The Company insures all directors, supervisors and managers with "Directors and Managers Liability Insurance" every year. Moreover, the policy contents are reviewed regularly to ensure that the insurance compensation amount and coverage meet the needs.
(5) The Company established corporate governance personnel on January 13, 2023 to enhance corporate governance objectives.

(II) Operational Status of the Audit Committee

The Audit Committee convened 4 meetings in 2023 (A). The attendance of Independent Directors is as follows:

Title	Name	Times of Attendance in Person (Ｂ)	Times of Attendance by Proxy	Actual attendance (%)(Ｂ/Ａ)	Remarks
Convener	Hsin-Ying Yang	4	0	100%	Newly elected (required to attend 4 meeting) Date of Appointment: 2022.6.15
Members	Han-Yu Tang	4	0	100%	Newly elected (required to attend 4 meeting) Date of Appointment: 2022.6.15
Members	Kuo-Chin Chen	3	1	75%	Newly elected (required to attend 4 meeting) Date of Appointment: 2022.6.15
Members	Chi-Feng Wei	3	1	75%	Newly elected (required to attend 4 meeting) Date of Appointment: 2022.6.15

Other issues to be recorded:

If the operation of the audit committee falls under any of the following circumstances, the date and period of the audit committee meeting, the content of the proposals, the objections of independent directors, qualified opinions or major suggestions, the results of the audit committee’s resolutions and how the Company handles the opinions of the audit committee should be stated.

(1) Matters referred to in Article 14-5 of the Securities and Exchange Act.

Date/Term of Audit Committee	Proposal Content c	Adverse opinion, qualified opinion or major proposal ontent of independent directors	The Company's actions in response to the opinions of the Audit Committee
2023.3.22 The 3rd session of the 1st	Proposal on CHAINTECH's 2022 Financial Report and Financial Statements.	None.	All directors present agreed to pass and reminded the board of directors of the resolution. The Company handles the matter in accordance with the resolution.
	Proposal on CHAINTECH's "Evaluation of the Effectiveness of Internal Control Systems" and "Statement on Internal Control System" for 2022.
2023.5.5 The 4th session of the 1st	Proposal on CHAINTECH's consolidated financial report for Q1 2023.
	Proposal of CHAINTECH's 2023 earnings distribution plan.
2023.8.7 The 5th session of the 1st	Proposal of CHAINTECH's consolidated financial report for Q2 2023.
	Proposal for the amendment to CHAINTECH's Rules of Procedure for Board Meeting.
2023.11.6 The 6th session of the 1st	Proposal of CHAINTECH's consolidated financial report forQ3 2023.
	Proposal of CHAINTECH's auditplan for 2024.
	The appointment, remuneration and evaluation of the independence status of the Company’s CPAs
	Proposal for the endorsement guarantee of payment for goods for the reinvestment business of "Sitonholy (Tianjin)TechnologyCo.,Ltd." of the Company.
	Proposal for the cancellation of endorsement guarantee for the reinvestment business of "Beijing Sitonholy TechnologyCo.,Ltd." of the Company.
2024.1.25 The 7th session of the 1st	Proposal on providing funding loan to the subsidiary "Sitonholy (Shenzhen) Technology Co., Ltd." from the subsidiary"Sitonholy (Tianjin)TechnologyCo.,Ltd.”
	Proposal on establishing a joint venture company "Ningxia Suanhai Technology Co., Ltd." through the subsidiary "Sitonholy (Tianjin) Technology Co., Ltd." and other companies.
2024.3.13 The 8th session of the 1st	Examined 2023 Business Report and Financial Statements.
	Proposal on CHAINTECH's "Evaluation of the Effectiveness of Internal Control Systems" and "Statement on Internal Control System" for 2023.

(2) In addition to the matters mentioned above, other resolution matters that have not been approved by the audit committee but have been approved by more than two-thirds of all directors: None.
The independent director's implementation of the recusal of the interest-related proposal shall state the independent director's name, the content of the proposal, the reasons for the conflict of interest that should be recusal due to, and the circumstances of the director's participation in voting: None.
Communication policies between the Independent Directors, the internal audit supervisor and the CPAs.
(1) CPAs take the initiative to hold separate meetings with independent directors and audit managers at least twice a year. CPAs report important audit results of the Company and its subsidiaries' financial statements at the meeting. Also, the recent law has been updated to highlight the impact on the Company. CPAs attend the audit committee and the board of directors at least twice a year to provide inquiries, communicate and discuss and exchange opinions.
(2) The internal audit supervisor regularly report to the Independent Directors at the regular Audit Committee meetings regarding the implementation of the Company and its subsidiaries' audit operations and follow-up, and fully communicate during the meeting. The auditors also monthly submit the results of the audit report and follow-up report to Independent Directors.
(3) The internal audit supervisor and the CPAs also directly communicate with the Independent Directors as needed, and the communication between them is good.
Annual focus of the Audit Committee:

The purpose of the Audit Committee is to assist the board of directors in fulfilling its role in overseeing the quality and integrity of the Company's accounting, auditing, financial reporting processes and financial controls.

The main matters considered by the Audit Committee include:

Establishment or revision of the Internal Control System.
Assessment of the effectiveness of the Internal Control System.
To formulate or amend procedures for major financial business activities such as acquiring or disposing of assets, engaging in derivatives transactions, capital loans to others, endorsing or providing guarantees for others.
Matters involving conflicts of interest of directors themselves.
Trading of significant assets or derivative products.
Lending of significant funds, endorsement, or guarantees provided.
Issuance, offering, or private placement of securities with equity characteristics.
Appointment, dismissal, or compensation of the CPAs.
Appointment and dismissal of financial, accounting, or internal audit supervisors.
The annual financial report signed or stamped by the chairman, manager and accounting supervisor and the second quarter financial report that must be audited and certified by CPAs.

Succession planning for the board of directors and key management personnel
(1) Succession planning for board members

The Company has a total of seven directors (including four independent directors), each with expertise in business management, leadership decision-making, financial accounting and industry knowledge required by the Company. The composition and structure of the board of directors is planned for each term based on the Company's development and legal requirements. In the future, the Company will aim to increase talents with environmental protection or information skills based on the Company's development needs to prepare for the director succession plan. The functions of the board of directors have been further improved to enhance the Company's sustainable competitiveness.

(2) Succession planning for senior management positions

Employees above the manager level of the Company are important management members of the Company. The Company has formulated management regulations for job agents. Each colleague has a job agent and is not regularly scheduled to attend training courses. The future management team is strengthened to cultivate multi-faceted management talents. As future reserve cadres, the Company will establish a legacy and achieve the goal of "professional integrity and sustainable management".

(III) Implementation of corporate governance and the Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons

Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and theReasons
	Yes	No	Summary
I. Has the Company formulated and disclosed its corporate governance practice principles in accordance with the "Corporate Governance Practice Principles for TWSE/TPEx Listed Companies"?	V		CHAINTECH has adopted the "Corporate Governance Practice Principles" to promote corporate governance at the Board Meeting since December 19, 2014, and has made disclosures on its Company website and MOPS.	None.
II. Shareholding Structure & Shareholders' Rights (I) Has the Company established internal operating procedures to handle shareholders' suggestions, doubts, disputes and litigation matters, and implemented them in accordance with the procedures? (II) Does the Company keep abreast of the major shareholders of the Company and the ultimate controlling party of the major shareholders? (III) Has the Company established, implemented and established risk control and firewall mechanisms between relatedparties?	V V V		(I) CHAINTECH has appointed a spokesperson and an acting spokesperson to handle related matters in accordance with regulations. Furthermore, CHAINTECH also provides a mailbox exclusive for handling shareholders' recommendations or disputes on CHAINTECH's website. In the event of any dispute, the Company shall entrust the matter to the lawyers of legal consultation of CHAINTECH. (II) CHAINTECH has set up a shareholder stock unit and a stock service agency that can keep abreast of the major shareholders of the Company and the ultimate controlling party of the major shareholders. (III) CHAINTECH and its affiliated enterprises are running independently, and CHAINTECH has formulated the Supervisory Methods for theGroupto supervise the operation of subsidiaries,	None. None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons
	Yes	No	Summary
(IV) Does the Company establish internal regulations and prohibit company insiders from buying and selling securities by using undisclosedinformation inthemarket?	V		so as to implement the risk control and management mechanism over them. The Company also established effective risk management for the Management of Related Party Transaction. (IV) CHAINTECH has established the “Procedures for Internal Important Messages Processing and Prevention of Insider Trading” as internal regulations.	None.
III. Composition and Responsibilities of the Board of Directors (I) Has the Board formulated a diversified policy, specific management goals, and implemented execution for the composition of its members?	V		(I) CHAINTECH has established the "Corporate Governance Practice Principles" and "Regulations for Board of Directors Election" to stipulate the diversity of the composition of the Board. The fundamental conditions and diversity guidelines of professional knowledge have been formulated for CHAINTECH's business operations and development needs. The principle of appointment is based on the merits. The Company conducted a comprehensive re- election of directors at the regular shareholders’ meeting on June 15, 2022. A total of 7 directors were elected, all of whom are of local nationality. It includes 4 independent directors, accounting for more than half of all directors. None of the independent directors has served more than three consecutive terms. Please refer topages 8-13 for information on the diversity policy,	None.

Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons
	Yes	No	Summary
			specific management goals, and implementation status of the board members.
(II) In addition to the Remuneration Committee and Audit Committee established according to law, is the Company willing to set up other functional committees? (III) Has the Company established standards to measure the performance of the Board, and does the Company implement such annually? Does it report the results of the performance evaluation to the BOD and use them as a reference for each Director's remuneration and nomination of term renewal? (IV) Does the Company regularly implement assessments on the independence ofCPA?	V V	V	(II) In addition to setting up a salary and remuneration committee in accordance with the law, the Company elected four independent directors at the 2022 regular meeting of shareholders and established an audit committee. Other functional committees shall be evaluated and set up based on the actual needs of the Company. (III) CHAINTECH has amended the "Regulations Governing the Evaluation of the Performance of the Board of Directors" on January 27, 2021. The scope of evaluation includes the overall operation of the Board, the performance of individual Directors, and the performance evaluation of functional committees' members. The evaluation results for the year 2023 are all above 90 points, indicating an excellent level. It was reported at the board meeting on January 25, 2024. For detailed information, please refer to page 31. CHAINTECH will benefit from the evaluation in helping the Company and the Board of Directors to gain continual improvements and advances, and the evaluation may serve as the reference for nominating Directors in the future. (IV) Starting from 2023, the Company appoints CPAs and audit team to evaluate theprofessionalism,independence, qualitycontrol,	Not yet voluntarily established Currently under planning None. None.

Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons
	Yes	No	Summary
			supervision and innovation capabilities in accordance with the five major structures of ROC Audit Quality Indicators (AQI) released by the Financial Supervisory Commission. The 13 indicators in the report and the AQI report provided by the firm before the audit committee and the board of directors decide to re-appoint the CPAs. Thereof six of the indicators are subdivided into two levels for comprehensive consideration. The firms are compared the average index among the peers, while the individual cases are compared with the relevant annual values in the last two years. The meaning of each indicator is comprehensively considered through analysis and use of other AQI indicators to confirm the independence and competency of the CPAs appointed. According to the evaluation of CHAINTECH Accounting Department in 2023, CPAs from Pricewaterhouse Coopers, Min- Chuan Feng and Ya-Hui Lin conform to the independence evaluation standard, so they are competent enough to act as CPAs for CHAINTECH. Also, they were appointed by the board of directors and audit committee on November 6, 2023. In addition, the independence and competency of the CPAs appointed in 2024 shall be submitted to the board of directors for discussion in November 2024 after the AQI report of the appointed firm is obtained and evaluated. Please refer to page 48 for the content of CHAINTECH's 2023 CPA independence assessment standards.

Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons
	Yes	No	Summary
IV. Does the listed Company have an adequate number of qualified corporate governance personnel and assign a corporate governance executive to handle corporate governance matters (including but not limited to the provision of data to Directors and Supervisors for business execution, assisting Directors and Supervisors in legal compliance, matters related to Board Meeting and Shareholders' Meeting, preparation of minutes for Board Meeting and Shareholders' Meeting)?	V		In accordance with legal regulations, the Company passed the resolution of the board of directors on January 13, 2023, and appointed financial director, Manager Yu-Nu Lai, as a corporate governance director to enhance corporate governance and strengthen the functions of the board of directors. The accounting supervisors, Yu-Nu Lai, have more than three years of experience as financial supervisors in publicly traded companies. The main responsibilities of the corporate governance manager are to handle matters related to the board of directors and shareholders' meetings in accordance with the law, prepare minutes of the board of directors and shareholders' meetings, assist directors in taking office and continuing their education, provide directors with information needed to perform business, and assist directors in complying with laws, etc. The implementation status of business in 2023 is as follows (including but not limited to): 1. The affairs of the board of directors and various committees are conducted in accordance with the law. 2. Directors are arranged to attend continuous education. 3. Purchase and maintenance of directors and officers liability insurance	None.

		State of Operations	State of Operations	State of Operations	State of Operations
Yes	No	Summary
		4. Handling the annual performance evaluation of the board of directors and its members. The status of continuing education in 2023:
		Date of Professional Training	Organizer	Course Name	Training Hours
		2023/8/17~ 2023/8/18	Corporate Governance Association	Strategies for low-carbon transformation in enterprises	9
		2023/10/20	Corporate Operating and Sustainable Development Association	Practical application of Labor Incident Act	3
		2023/11/30	Corporate Operating and Sustainable Development Association	Legal risk management in digital transformation	3
		2023/12/15	Corporate Operating and Sustainable Development Association	Practices of compliance with regulations by the board of directors and discussions on the legal responsibilities of directors and supervisors, as well as case studies.	3

Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons
	Yes	No	Summary
V. Has the company established a channel to communicate with stakeholders (including but not limited to the shareholders, employees, customers and suppliers), and set up a special zone for stakeholders on the Company's website, and appropriately respond to the important corporate social responsibility issues that are essential to stakeholders?	V		CHAINTECH website has established a special zone (including employees, suppliers, customers, investors, community and complaint channels) for stakeholders and has a mailbox and contact number in place. Any stakeholders can exchange views with CHAINTECH at any time, but they are not allowed to go beyond the national laws and regulations as well as the Company internal control system regulations.	None.
VI. Has the Company commissioned a professional stock affair agency to manage shareholders' meetings and other relevant affairs?	V		CHAINTECH has commissioned Grand Fortune Securities to handle matters related to shareholders' meetings.	None.
VII. Information Disclosure (I) Does the Company establish a website to disclose information on financial operations and corporate governance? (II) Does the Company adopt other means of information disclosure (such as establishing an English languagewebsite,delegatinga	V V		(I) CHAINTECH’s Company website (www.chaintech.com.tw) to disclose relevant information at any time and publish and declare its Company profile and various financial and business information on the MOPS according to the requirements of the competent authority. (II) CHAINTECH has launched and maintained the Chinese and English websites. Apart from introducing the technical services and business related to the Company's products, the websites also disclose information on financial operations and corporategovernance aswell	None. None.

Evaluation Items			State of Operations	Deviations from the Practice Principles for TWSE/TPEx Listed Companies, and the Reasons
	Yes	No	Summary
professional to collect and disclose Company information, implement a spokesperson system, and disclosing the process of legal person conferences on the Company website)? (III) Does the Company publish and declare its annual report within two months from the end of a fiscal year and publish and declare its financial reports for the first, second, and third quarters and the operating status of each monthwithinthe prescribed time?	V		as the process of legal person conference regularly and irregularly. Also, company spokesperson contact information is ready to ensure responses to shareholder comments are implemented. (III) CHAINTECH publishes and declares its annual report, its financial reports for the first, second, and third quarters and the operating status of each month within the prescribed time; for details, please see the content of declaration on the MOPS (website: https://mops.twse.com.tw/)	None.
VIII. Has the Company provided other important information that is helpful to understand the implementation of corporate governance (including but not limited to the rights and interests of employees, employee care, investor relations, supplier relations, stakeholder rights, continuous education of directors and supervisors, implementation of the risk management policies and risk measurement standards, customer policies, and purchase of liability insurance for the Directors andSupervisors)?	V		1. Employee rights and interests: CHAINTECH has established an Employee Welfare Committee and developed relevant regulations to regularly provide pensions to employees and ensure their rights and interests in accordance with the law. 2. Employee care: CHAINTECH has joined the group insurance, provides regular health checkups for employees, and organizes employee education and training to safeguard the physical and mental health of employees. 3. Investor relations: CHAINTECH has set up a special zone for stakeholders in accordance with the law to protect the basic rights and interests of the investors. 4. CHAINTECH has established the Procurement Department to	None.

Evaluation Items	State of Operations	State of Operations	State of Operations
	Yes	No	Summary
			manage the affairs related to suppliers and maintain a smooth complaint channel to protect the legitimate rights and interests of both parties. 5. Stakeholder rights: CHAINTECH has developed the rules and regulations to protect the rights of different stakeholders. CHAINTECH has also set up a special zone for different stakeholders on CHAINTECH's website and provided corresponding complaint channels to allow the stakeholders to feedback immediately to CHAINTECH in unequal treatment or right damage. 6. Implementation of Risk Management Policies and Risk Measurement Standards: CHAINTECH has formulated relevant operating guidelines and control measures that are implemented by specially-assigned persons. The audit personnel shall regularly and irregularly audit and track the implementation of the corrective actions. 7. The Company has purchased liability insurance for Directors, and the amount of insurance coverage, coverage and insurance premium and the like are reported to the Board of Directors on a regular basis. 8. Directors’ continuous education: CHAINTECH has irregularly notified directors through letters to participate in professional knowledge education course hosted by the relevant units. Please refer to pages46 and47forthe content.
IX. Preferential enhancement items and measures have to beproposed forwhat is improved andwhat is not for the corporategovernance assessment

Evaluation Items	Evaluation Items	State of Operations	State of Operations	State of Operations
		Yes	No	Summary
resultsreleasedinthemostrecent yearby the corporate governance Centerof TaiwanStock Exchange.
What is improved	1. The corporate governance supervisor has been appointed. 2. The information securitysupervisor has been appointed.
Preferential enhancement items	1. The number of investor conference calls is expected to increase. 2. The policy of diversifying the board of directors is being continuously promoted to increase the proportion of female board members. 3. The corporate governance issues will be fully disclosed on the Company website, which is continuously being updated. CHAINTECH will also continue to strengthen corporate governance in the future and implement transparency and enhance shareholders' interests and rights.

Directors' continuous education in 2023:

Title	Name	Date of participation	Organizer	Course Name	Training Hours
Chairman of the Board	Shu-Jung Kao	2023.04.26	Corporate Operation and Sustainable Development Association of the Republic of China	Local revitalization working together with enterprises to create a new milestone in ESG.	3 hours
Chairman of the Board	Shu-Jung Kao	2023.08.21	Taiwan Corporate Governance Association	How to strengthen the execution power of corporate strategy	3 hours
Independent Director	Han-Yu Tang	2023.12.21	The Institute of Internal Auditors-Chinese Taiwan	How audit personnel detect financial statement fraud	6 hours
Director	Mu-Tien Wang	2023.12.15	Corporate Operating and Sustainable Development Association	Practices of compliance with regulations by the board of directors and discussions on the legal responsibilities of directors and supervisors, as well as case studies.	3 hours
Director	Mu-Tien Wang	2023.12.20	Corporate Operating and Sustainable Development Association	Ethical Corporate Management and Criminal Breach of Trust: Theory and Practice	3 hours
Director	Li-Cheng Lu	2023.05.05	Taiwan Corporate Governance Association	Global Political and Economic Trends and Prospects - The Competition between China and the United States and the Relationship between the Two Sides of the Taiwan Strait	3 hours
Director	Li-Cheng Lu	2023.11.06	Securities & Futures Institute	The Way to Respond to the New Global Situation	1.5 hours
Director	Li-Cheng Lu	2023.11.06	Securities & Futures Institute	The technological development and business opportunities of the chatbot ChatGP.	1.5 hours
Independent Director	Hsin-Ying Yang	2023.12.15	Corporate Operation and Sustainable Development Association of the Republic of China	Practices of compliance with regulations by the board of directors and discussions on the legal responsibilities of directors and supervisors, as well as case studies.	3 hours
Independent Director	Hsin-Ying Yang	2023.12.20	Corporate Operating and Sustainable Development Association	Ethical Corporate Management and Criminal Breach of Trust: Theory and Practice	3 hours

Title	Name	Date of participation	Organizer	Course Name	Training Hours
Independent Director	Kuo-Chin Chen	2023.12.15	Corporate Operation and Sustainable Development Association of the Republic of China	Practices of compliance with regulations by the board of directors and discussions on the legal responsibilities of directors and supervisors, as well as case studies.	3 hours
Independent Director	Kuo-Chin Chen	2023.12.20	Corporate Operating and Sustainable Development Association	Ethical Corporate Management and Criminal Breach of Trust: Theory and Practice	3 hours
Independent Director	Chi-Feng Wei	2023.12.15	Corporate Operation and Sustainable Development Association of the Republic of China	Practices of compliance with regulations by the board of directors and discussions on the legal responsibilities of directors and supervisors, as well as case studies.	3 hours
Independent Director	Chi-Feng Wei	2023.12.20	Corporate Operating and Sustainable Development Association	Ethical Corporate Management and Criminal Breach of Trust: Theory and Practice	3 hours

Evaluation Standards for the Independence of CPAs

valuation Standards for the Independence of CPAs
Evaluation Items	2023 evaluation results (Y/N)	Whether in line with the independence (Y/N)
1. The CPA has not engaged in any financial interest relations, whether directlyor indirectly,with CHAINTECH.	Y	Y
2. There are no financing or guarantee activities between CPAs and CHAINTECH or its Directors and Supervisors?	Y	Y
3. The CPAs have not been influenced in auditing by consideration of thepossibilityof customer loss.	Y	Y
4. There are no close business relationship or potential employment relationshipbetween the CPAs and CHAINTECH.	Y	Y
5. The audit service team members of CPAs have not acted as the Director, Supervisor, or manager of CHAINTECH or held a position of CHAINTECH that have a substantial influence upon audit cases currentlyor in the most recent twoyears.	Y	Y
6. The non-audit service provided by the accounting firm to CHAINTECH has not directly influenced the important audit items.	Y	Y
7. The CPAs have not engaged in publicizing any shares or other securities issued by CHAINTECH or worked as the agency thereof.	Y	Y
8. There are no CPAs who acted as the director, supervisor, manager or positions that have substantial influence over the audit cases of CHAINTECH within oneyear after relief.	Y	Y
9. The CPAs did not receive presents or gifts with the material value from CHAINTECH or its Directors, Supervisors, or managers.	Y	Y
10. No CPAs have been appointed for five consecutiveyears.	Y	Y

(IV) The composition, duties and operations of the Remuneration Committee, if the Company has:
Information on the members of the Remuneration Committee

1. Information on the members of the Remuneration Committee	1. Information on the members of the Remuneration Committee	1. Information on the members of the Remuneration Committee
			April 16, 2024
Conditions Category of identity(Note 1) Name		Professional qualifications and experience independence status	Number of Other Taiwanese Public Companies Concurrently Served as an member of the Remuneration Committee
Independent Director	Han-Yu Tang (Convener)	All members are independent directors. Please refer to pages 11-12 for disclosure of information on directors’ professional qualifications and independence of independent directors.	0
Independent Director	Kuo-Chin Chen		0
Independent Director	Hsin-Ying Yang		1
Independent Director	Chi-Feng Wei		0

Operational Status of the Remuneration Committee
(1) CHAINTECH's Remuneration Committee consists of four members in total.
(2) Main Responsibilities of the members of the Remuneration Committee

This committee meets at least twice a year to faithfully perform the following duties in a professional and objective manner with the attention of good stewards. Also, the recommendations made were presented to the board of directors for discussion.

Establish and regularly review the standards for the performance evaluation, and the policies, systems, standards and structures for salary and remuneration of the directors and managers of the Company.
The content and amount of remuneration for directors and managers are regularly evaluated and determined.
(3) Term of office: From August 4, 2022 to June 14, 2025, there were a total of three meetings held in 2023, with the attendance of committee members as follows:

Title	Title	Name	Times of Attendance in Person (Ｂ)	Times of Attendance by Proxy	Times of Attendance by Proxy	Actual attendance rate (%)(Ｂ/Ａ) (Note)	Actual attendance rate (%)(Ｂ/Ａ) (Note)
Independent Director		Han-Yu Tang (Convener)	3	0		100%
Independent Director		Kuo-Chin Chen	3	0		100%
Independent Director		Hsin-Ying Yang	3	0		100%
Independent Director		Chi-Feng Wei	2	1		67%
Other issues to be recorded: I. In the event that the Board of Directors does not adopt or amend the proposals of the Remuneration Committee, please state the date and number of the Board meeting, the content of the proposals, resolution from the Board of Directors, and disposal of opinion from the Remuneration Committee (if the salaries and compensations approved by the Board were higher than the suggested levels from the Remuneration Committee, please state the differences and reasons): None. II. If a member has a dissenting or qualified opinion, if a member has a dissenting or qualified opinion, that a member has a record or reservation that is recorded or stated in a written statement, the date and session of the Remuneration Committee, the content of the proposal, all members' opinions, and the handling of the opinions of the member of the Remuneration Committee shall be stated. None. Meeting Date /Term Proposal Content Resolution The Company's actions in response to the opinions of the Remuneration Committee 2023.1.13 The 6th term of the 1st meeting I. Passed the proposal on reviewing the policies, systems, standards and structures for the performance evaluation, salary and remuneration of the directors, supervisors and managers of the Company. II. Passed the proposal on the review the "Performance Evaluation Measures of the Board of Directors”. III. Passed the proposal on retrospectively confirmation of CHAINTECH's individual salary and remuneration for managers in 2022. IV. Passed theproposal on CHAINTECH's Passed by all attending committee members Submitted to the Board and passed by all attending directors
Meeting Date /Term	Proposal Content				Resolution		The Company's actions in response to the opinions of the Remuneration Committee
2023.1.13 The 6th term of the 1st meeting	I. Passed the proposal on reviewing the policies, systems, standards and structures for the performance evaluation, salary and remuneration of the directors, supervisors and managers of the Company. II. Passed the proposal on the review the "Performance Evaluation Measures of the Board of Directors”. III. Passed the proposal on retrospectively confirmation of CHAINTECH's individual salary and remuneration for managers in 2022. IV. Passed theproposal on CHAINTECH's				Passed by all attending committee members		Submitted to the Board and passed by all attending directors

		individual salary and remuneration for managers in 2023. V. Passed the proposal on CHAINTECH's year- end bonus and special leave bonus for managers in 2022.
	2023.3.22 The 6th term of the 2nd meeting	I. Passed the proposal on CHAINTECH's 2022 remuneration to Directors. II. Passed the proposal on CHAINTECH's remuneration to managers for 2022. III. Passed the proposal on CHAINTECH's individual salary and remuneration for new managersin 2023.	Passed by all attending committee members	Submitted to the Board and passed by all attending directors
	2023.8.7 The 6th term of the 3rd meeting	I. Passed the proposal on CHAINTECH's individual salary and remuneration for new managers in 2023. II. Passed the proposal on CHAINTECH's bonus distribution for managers in 2023.	Passed by all attending committee members	Submitted to the Board and passed by all attending directors

Note:(1) Where members of the Remuneration Committee resign before the end of the year, the Notes column shall be annotated with the date of resignation. Actual attendance rate (%) shall be calculated using the number of Remuneration Committee meetings convened and actual attendance during the term of service.

(2) Where an election may be held for filling the vacancies of committee member before the end of the fiscal year, please list out both the new and the discharged committee members, and specify if they are former members or newly elected, re-elected, and the date of the reelection. The actual attendance rate (%) shall be calculated based on the number of meetings held by the Remuneration Committee and the number of actual attendance during the term of service.
Member information and Operational Status of the Nominating Committee: CHAINTECH has yet to establish a Nominating Committee, hence not applicable.

(V) Implementation status on promotion of sustainable development and status and reasons of deviations from the Corporate Sustainable Development Best Practice Principles for TWSE/TPEx-Listed Companies (the Company's system and measures for environmental protection, social engagement, social contribution, social services, social welfare, consumer rights, human rights, and other social responsibilities activities and the implementation thereof):

and the implementation thereof):
Evaluation Items	State of Operations			Status and reasons of deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and Reasons
	Yes	No	Summary
I. Has the company established a governance framework to promote sustainable development, and established a dedicated (part-time) unit to promote sustainable development? Has the Board of Directors authorized senior management to handle such matters and supervise the situation of the Board of Directors? (Execution status should bereported,not comply orexplain)		V	CHAINTECH has established "Corporate Social Responsibility Best Practice Principles" to implement corporate governance, promote the development of a sustainable environment, and maintain social welfare. The Management Department is a part-time unit responsible for promoting CSR activities, but has not yet established the Sustainable Development Best Practice Principles or reported handlingstatus to the board of directors.	Still under planning
II. Has the company assessed the environmental, social, and corporate governance risks related to its operations based on the principle of materiality and established related risk management policies or strategies? (Execution status should be reported, not comply or explain)	V		The unit responsible for promoting sustainable development within CHAINTECH is the General Manager Office, which established its Regulations for the Prevention of Insider Trading, Procedures and Code of Conducts for Integrity Management, and Procedures for Self-Evaluation of the Internal Control System wholly to implement its risk management policy. Also, governance of companies is implemented, and risk assessment of environmental, social, and corporate governance issues related to company operations,relevant risk management strategies and	None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Status and reasons of deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and Reasons
	Yes	No	Summary
			measures are being conducted. (Please refer to pages 60 & 135)
III. Environmental Issues (I) Has the Company established a suitable environmental management system based on the characteristics of its industry? (II) Is the Company committed to improving energy efficiency and utilizing renewable resources to reduce environmental impact? (III) Has the Company evaluated the current and future potential risks and opportunitiesforthe Company	V V V		(I) CHAINTECH has established the "Regulations Governing the Occupational and Environmental Safety and Health Management" in accordance with the Labor Safety and Health Act, and its subsidiary Sitonholy (Tianjin) Technology Co. has obtained ISO9001 certification. (II) Due to the energy shortage and the carbonization of the earth in recent years, the Company continued to promote measures for energy conservation and carbon reduction, such as the implementation of garbage separation and paper box recycling. The toner cartridges used by the printing machine are returned to the original supplier for recycling. Encourage employees to bring their own cups and lunch boxes to reduce the use of disposable tableware. Since 2024, online approval has been implemented, allowing paperless operations to minimize the impacts of the Company's operations on the natural environment. (III) As the carbonization of the earth has been worsening, CHAINTECH faces potential risksrelated to aspects	None. None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Status and reasons of deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and Reasons
	Yes	No	Summary
arising from climate change and adopted corresponding measures according to aspects related to climate? (IV) Has the Company calculated the greenhouse gas emissions, water consumption, and total weight of waste for the past two years and established the policies with regard to energy conservation and carbon reduction, greenhouse gas reduction, water consumption reduction, and other waste management?	V		of operation and environment, such as resource shortage and an increase in costs for raw materials, which would cause impacts on CHAINTECH's operations. CHAINTECH will develop green energy technology to create opportunities for CHAINTECH. (IV) The Company’s products are all produced by means of OEM in China Mainland. Taiwan is the operational headquarters, so although the headquarters has no problem of greenhouse gas emission, water consumption and waste, it attaches great importance to and cares for energy conservation and carbon reduction, and has been constantly promoting electronic measures and reduction in use of paper, water and electricity, aiming to conserve energy and reduce carbonemission.	None.
IV. Social Issues (I) Has the Company set up management policy and procedures according to related laws and regulations and the International Human Rights Treaty?	V		(I) The Company abides by the laws and regulations of the places where it operates, respects the guarantees locked in human rights conventions, and adheres to the "International Bill of Human Rights", "International Labor Organization-Declaration of Fundamental Principles and Rights at Work", "The Ten Principles of the United Nations Global Compact" and other	None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Status and reasons of deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and Reasons
	Yes	No	Summary
(II) Has the Company established and implemented reasonable employee's welfare measures (including remuneration, leave, and other benefits) and reflect the operating performance or results in employee's remuneration? (III) Has the company provided employees with a safe andhealthy working environment, androutinely	V V		international Recognized human rights standards. The rights and interests of colleagues are maintained through the promotion of the Company's internal working rules and the provision of channels for grievances. Also, the Company has never employed child labor or forced labor or violated human rights. (II) Employee salary and remuneration policies are determined based on individual abilities and contributions to the Company, performance, and consideration of the Company's future operating risks. Also, a twice-yearly employee appraisal system is implemented. Besides, no less than 0.1% of employee remuneration should be appropriated to be distributed to employees in accordance with the Company's articles of association, if the Company makes a profit during the year. The Company values diversity and equality in the workplace. As of the end of 2023, the proportion of female employees in the Company was 36.36%. The proportion of women above the supervisory level in the Company was 30%. (III) According to relevant occupational safety and health laws and regulations, the Company provides employees withsafety and protectionequipmentforsafety and	None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Status and reasons of deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and Reasons
	Yes	No	Summary
implemented safety and health education for employees? (IV) Has the Company established an effective competency development career training program for employees? (V) Has the Company complied with relevant regulations and international standards regarding issues of customers' health and safety, customer privacy, marketing and labeling for products and services, and establishedrelevant policy and	V V		health, sets up emergency escape routes and exits at workplaces, uses non-toxic products to regularly disinfect the work environment, regularly maintains elevators, prepares fire-fighting facilities, regularly organizes health checkups, and implements various work safety and health education and training. The Company has established the "Occupational and Environmental Safety and Health Management Measures" and implements them in accordance with the regulations. There were no occupational accidents among the Company's employees in 2023. (IV) The Company holds educational training for employees from time to time. It aims to enrich employees' knowledge and abilities, unleash their potential intelligence and improve their professional abilities. The total number of career training in 2023 was 253.5 hours. (V) CHAINTECH complies with intellectual property related laws and regulations and pays great attention to customers' opinions. In addition to maintaining communication with customers at all times, the company also provides product information, contact information, and amailboxon its website, andhas	None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Status and reasons of deviations from the Corporate Social Responsibility Best Practice Principles for TWSE/TPEx-Listed Companies and Reasons
	Yes	No	Summary
appeal procedures to protect consumers’ or clients’ rights? (VI) Has the Company established the management policies for suppliers and required suppliers to comply with relevant requirements in terms of environmental protection, occupational safety and hygiene, or laborers' human rights.	V		established a special area for stakeholders as a channel for customers to make inquiries and provide feedback. (VI) CHAINTECH has established a "Supplier Management Operation Procedure". Before engaging in commercial dealings with the suppliers, it shall evaluate whether the suppliers had negative records of affecting environment and society in the past as the significant references for selecting suppliers, and shall stipulate that the suppliers shall provide qualified products made with environmental-friendly raw materials to duly fulfill its corporate social responsibility. If the Company's suppliers violate the corporate social responsibility policy and the impact upon environment and society is significant, the Company is entitled to terminate or rescind the contract at any time.	None.
V. Does the Company prepare and publish reports such as its Sustainability Responsibility report to disclose non-financial information of the Company with reference to internationally recognized standards or guidelines for the preparation of reports? Has the company received assurance or certification of the aforesaid reports from a third party accreditation institution?		V	Even though CHAINTECH has not prepared its CSR report, CHAINTECH has established the "Corporate Social Responsibility Practice Principles" to fulfill its corporate social responsibility. CHAINTECH considers the interests of its stakeholders and treat its customers and suppliers in fair and reasonable manners, and has complied with the regulations under the agreement on social and environmental responsibility.	Has not prepared the CSR report

Evaluation Items	State of Operations	State of Operations	State of Operations
	Yes	No	Summary
VI. Where the Company has stipulated its own sustainable development best practices according to the "Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies," please describe any differences between the prescribed best practices and the actual activities taken by the Company: CHAINTECH has established the "Corporate Social Responsibility Practice Principles" and implemented the rules and procedures in accordance with the requirements. CHAINTECH plans to prepare the corporate social responsibility report and establish relevant regulations starting from the fiscal year 2024.
VII. Other important information to help drive sustainability implementation: CHAINTECH has established relevant management regulations concerning employees' rights and interests and supplier relations, established Employee Welfare Committee to attach importance to the rights and interests of employees, and put in place communication channels with banks and other creditors, customers and suppliers; (1) Environmental Protection: As CHAINTECH has no plant in Taiwan, it focuses on environment protection in its offices. CHAINTECH actively promotes paper and packaging materials for reuse and waste sorting, so as to reduce the impact of environmental pollution, and strive to promote sustainable development philosophy and fulfill corporate social responsibility. (2) Community engagement, social contribution, social services, social welfare, etc.: Regular assistance for socially disadvantaged groups, fulfilment of social responsibilities, and participation in public welfare in the past two years: In 2022, CHAINTECH donated the "National Chin-Yi University of Technology" AI model development and model management platform with a market price of approximately $9 million and a high-end AI computing server with a market price of approximately $320 thousand to increase practical training courses for students. In addition, local education is supported to cultivate future AI professionals and metaverse experts. In 2023, CHAINTECH donated NT$100,000 each to House of Dreams and Pure Youth Care Foundation. CHAINTECH donated NT100,000 to the Taoyuan Guishan Mountaineering Association to provide equipment updates and emergency relief. The total expenditure is NT$300,000. (3) Consumer rights and interests: Through a comprehensive quality management system, stringent quality management is conducted in various processes to ensure the best services and products to customers. (4) Human Rights: CHAINTECH'slabor-managementrelations are equal.The Companyrespects the workperformance ofevery employee, so

Evaluation Items	State of Operations	State of Operations	State of Operations
	Yes	No	Summary
that there is no labor dispute, fully manifesting CHAINTECH's efforts on human rights issues.
(5) Safety and Health: CHAINTECH provides a safe employment environment for employees, displaying its fulfillment of the responsibility for employees' life safety. Meanwhile, the Company regularly provides straining and work safety education for the employees to avoid occupational accidents,safeguard employees' life safetyand enhance their understandingof health and safetyrelated knowledge.

(5) Safety and Health: CHAINTECH provides a safe employment environment for employees, displaying its fulfillment of the responsibility for employees' life safety. Meanwhile, the Company regularly provides straining and work safety education for the employees to avoid occupational accidents, safeguard employees' life safety and enhance their understanding of health and safety related knowledge.
Note 1: Material issues and risk assessment of sustainable development promoted by the Company:

Material issues	Risk assessment items	Strategies and measures for risk management
Environment	Environmental protection	1. The Company does not produce or manufacture in Taiwan, so there is no generation of related waste. 2. The Company strives to save energy and reduce carbon, and uses recycled paper as much as possible. In addition, online approval has been adopted since 2024 to reduce the use of paper.
Society	Workplace safety	1. Safety and health education and training are regularly conducted, and fire safety seminars and disaster prevention courses on fire, earthquakes, etc. are organized. 2. The safety measures in the workplace are regularly inspected. 3. Regular employee health check-ups are subsidized.
Corporate governance	The functions and legal compliance of the board of directors have been strengthened.	1. Strengthening the functions of the board of directors enhances the sustainable value of the enterprise; and Corporate Governance 3.0 - Sustainable Development Roadmap is being implemented. 2. An internal control mechanism has been implemented to ensure that all employees of the Company can truly comply with laws and regulations.

(VI) Implementation of Ethical Corporate Management and Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons

Companies and the Reasons
Evaluation Items	State of Operations			Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
I. Formulating policies and plans for Ethical Corporate Management (I) Has the Company established the ethical corporate management policies approved by the Board of Directors and specified in its rules and external documents the ethical corporate management policies and practices and the commitment of the Board of Directors and senior management to rigorous and thorough implementation of such policies? (II) Does the company establish a risk assessment mechanism against unethical conduct, analyze and assess on a regular basis business activities within its business scope which are at a higher risk of being involved in unethical conduct, and establish prevention programs accordingly, which shall at least include those specified in Paragraph 2, Article 7 of the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies"?	V V		(I) CHAINTECH has established the "Code of Ethical Conduct" and "Code of Conduct for Directors and Managerial Officers." The Directors, Supervisors and Senior Executives are in compliance with the standards of the implementation of business. Relevant rules and regulations are disclosed on the MOPS and CHAINTECH's website. (II) CHAINTECH stipulates in its "Code of Ethical Conduct" not to request or accept any unjust profits or carry out any other unethical conducts that violate integrity, or are illegal, or breach of fiduciary. When the Company signs a contract with others, the content of the contract will include the provisions that the counterparty shall be in compliance with the integrity management policy and that if the counterparty is involved in bad faith behaviors, the Company is entitled to terminate or rescind the contract. Moreover, the Company avoids carrying on transactions with the parties having records of dishonest conduct.The auditors of	None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
(III) Has the Company provided any solutions to prevent the unethical conducts, stipulate the definite procedures, conduct guidelines, punishment for violation as well as appeals system and put into practice, and review and revise on a regular basis the aforesaid solutions?	V		CHAINTECH shall periodically examine CHAINTECH's compliance with the foregoing systems according to the annual audit plan and prepare audit reports and submit the same to the Board of Directors. (III) CHAINTECH has established and implemented the Code of Conduct for Directors, Supervisors and Managerial Officers and the Code of Ethical Conduct. For any unethical conduct or conducts violating integrity, CHAINTECH would impose punishments according to Rule 8.3 of its Rules for Personnel Management and provide employee's appeal channels to deal with any unreasonable treatments. CHAINTECH shall at all times monitor the development of relevant local and international regulations concerning ethical corporate management and encourage their Directors, Supervisors, managers, and employees to make suggestions, based on which, the adopted ethical corporate management policies will be reviewed and improved with a view to achieving better implementation of ethical management.	None.
II. Implementing integrity operation (I) Has theCompanyassessed the integrityrecords of its	V		(I) CHAINTECH shall considerwhether the	None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
business partners, and specified ethical business policy in contracts with them? (II) Does the Company establish an exclusively (or concurrently) dedicated unit supervised by the Board to be in charge of corporate integrity, and regularly reports (at least once a year) to the Board of Directors the implementation of the ethical corporate management policies and prevention programs against unethical conduct? (III) Does the Company establish policies to prevent conflicts of interest and provide appropriate communication channels, and implement such policy properly?	V	V	counterparty has records of dishonest conduct before transactions and avoid transactions with them. When a contract is signed with others, the content will include the terms of termination or rescission of the contract at any time upon the counterparty involving any dishonest conduct. (II) CHAINTECH's auditors are responsible for the formulation and implementation of ethical corporate management policies, but they are not urged to regularly report to the Board of Directors. (III) CHAINTECH stipulates policies for preventing the conflict of interests in its Code of Conduct for Directors, Supervisors and Managerial Officers and its Code of Ethical Conduct. If the Board of Directors has various proposals, the Director who has a conflict of interest shall abstain from voting. If the employees have a conflict of interest over business execution, supervisors shall be notified to abstain from answering. CHAINTECH has set up a whistle- blowing mailbox for its internal and external systems to provide unobstructed channelsfor	Under planning None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
(IV) Has the Company established an effective accounting system and internal control systems to implement ethical corporate management, and has the internal audit unit prepared relevant audit plans according to the evaluation results for the risk of unethical conduct, and based on which, audited the compliance with the prevention programs for unethical conduct, or has the Company engaged CPAs for performing such audits? (V) Does the Company host routine internal and external training geared towards business integrity practices?	V V		report and appeal. (IV) CHAINTECH has established the accounting system and internal control system according to relevant laws and regulations. Internal auditors regularly review their compliance, perform project audits from time to time according to the requirements, and report the audit results to the Board of Directors. (V) The Company's principles of ethical corporate management (including anti-corruption) are specifically stated during training for new employees. In addition, corporate governance and integrity management courses are held regularly. The Company's procurement department also promotes the Company's principles of honest management to suppliers from time to time to eliminate dishonest business practices. The Company deepens its business philosophy of honest management through public commitments, information dissemination and education and training. On 2023/9/15&11/20, the Company held relevant education and training courses on integrity management issues. A total of 26 people attended the class,totaling	None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
			26hours.
III. Operation of the whistleblowing system (I) Has the company established a specific whistleblowing and reward system, set up convenient whistleblowing channels and designated appropriate personnel? (II) Does the Company establish standard investigation operation and procedure for whistle-blowing matters, follow-up measures to be adopted after the investigation, and relevant confidential mechanisms? (III) Has the Company established protection measures for whistle-blower from mishandling against them?	V V V		(I) CHAINTECH has established the "Report System and Measures" and set up the report mailbox for employees to report the breach of good faith to department supervisors and auditors in any form. Furthermore, the Company has also set up a whistle-blowing mailbox on its website for relevant personnel to report on illegal conduct. (II) CHAINTECH has established standard operating procedures for investigation in accordance with Article 6 of the "Report System and Measures". In accordance with Article 8, the identity of the whistle-blowers and the contents of whistle-blowing will be kept strictly confidential. If any material violation is found in the investigation, CHAINTECH will immediately make a report and notify the independent directors in writing. (III) According to rule 6.7 under the Code of Conduct for Employees, the identity of the whistle-blowers and the content of reported misconduct shall be kept confidential. The whistle-blowers shall not be subject to	None. None. None.

Evaluation Items	State of Operations	State of Operations	State of Operations	Discrepancies with the Ethical Corporate Management of TWSE/TPEx Listed Companies and the Reasons
	Yes	No	Summary
			inappropriate measures out of whistle-blowing.
IV. Strengthening information disclosure (I) Has the Company disclosed the content and effectiveness of its ethical corporate management best practice principles on its website and the Market Observation Post System (MOPS)?	V		CHAINTECH has disclosed the "Ethical Corporate Management Regulations" on CHAINTECH's website "Corporate Governance Regulations" and the Market Observation Post System (MOPS).	None.
V. Where the Company has stipulated its own ethical corporate management best practices according to the "Ethical Corporate Management Best Practice Principles for TWSE/GTSM Listed Companies," please describe any differences between the prescribed best practices and the actual activities taken by the company: No substantial difference.
VI. Other important information that facilitates the understanding of the implementation of ethical corporate management: (such as review and amendment of the Company's Ethical Corporate Management Best Practice Principles) 1. CHAINTECH complies with the relevant laws and regulations of the Company Act and the Securities and Exchange Act, which are taken as the basis for integrity management. 2. CHAINTECH's "Proceeding Rules for Board Meetings" requires the director who or whose representative has interest relationship with the meeting matter to be discussed shall abstain himself/herself from the discussion or voting and cannot exercise the voting right on behalf of other director. 3. In accordance with the provisions of Article 5 of the "Operational Procedures for the Management of Internal Major Information Processing and Prevention of Insider Trading", those shall not buy or sell the Company's stocks or other equity securities by itself or in the name of others. When learning about the Company's news that has a significant impact on the stock price, it must be done before it is made public or within 18 hours after it is made public. Also, thirty days before the announcement of the annual financial report and fifteen days before the announcement of the quarterly financial report, directors are notified in writing (including electronic documents) to prohibit trading in their stocks during the closed period to avoid insider trading. 4. In transactions with the manufacturers, the Company has always followed the principle of good faith and been committed to strengthening internal education.

(VII) If Corporate Governance codes and relevant laws and regulations are formulated, their inquiry methods shall be disclosed:
CHAINTECH has established the Articles of Association, Corporate Governance Practice Principles, Rules of Procedure for Shareholders' Meeting, Rules of Procedure for Shareholders' Meeting for Board Meeting, Director Election Regulations, Handling Procedures for Acquisition or Disposal of Assets, Operation Procedures of Capital Loan to Others, Endorsement/ Guarantee Operating Procedures, Remuneration Committee Organization Charter, Ethical Corporate Management Regulations, and Standards for Practices of Corporate Social Responsibility. The rules and regulations are issued at CHAINTECH's website, and the inquiry path is as follows: Home > Investor Relations > Corporate Governance > Corporate Governance Regulations(http://www.chaintech.com.tw/) for shareholders' reference.
(VIII) Other material information that can enhance the understanding of the state of Corporate Governance at the Company:

Courses involving corporate governance participated in by CHAINTECH's managers (including general manager, deputy general managers, accountant officer, finance supervisor, internal audit supervisor) for professional training in the most recent year:

Title	Name	Date of Professional Training	Organizer	Course Name	Training Hours
General Manager	Shu-Jung Kao	2023/4/26	Corporate Operation and Sustainable Development Association of the Republic of China	Local revitalization working together with enterprises to create a new milestone in ESG.	3
		2023/08/11	Taiwan Corporate Governance Association	How to strengthen the execution power of corporate strategy	3
Associate Manager of Information Technology Department	Shih-Lun Wei	2023/09/19~ 2023/09/20	DNV GL Business Assurance Co.,Ltd.	ISO 14064-1 Greenhouse Gas Internal Verifier Course	14
		2023/10/26~ 2023/10/27	DNV GL Business Assurance Co., Ltd.	ISO14067 Carbon Footprint Internal Verifier Course	14
Financial/ accounting manager concurrently serve as corporate governance manager	Yu-Nu Lai	2023/8/17~ 2023/8/18	Taiwan Corporate Governance Association	Strategies for low-carbon transformation in enterprises	9
		2023/10/20	Corporate Operation and Sustainable Development Association of the Republic of China	Practical application of Labor Incident Act	3
		2023/11/30	Corporate Operation and Sustainable Development Association of the Republic of China	Legal risk management in digital transformation	3
		2023/12/15	Corporate Operation and Sustainable Development Association of the Republic of China	Practices of compliance with regulations by the board of directors and discussions on the legal responsibilities of directors and supervisors, as well as case studies.	3

Title	Name	Date of Professional Training	Organizer	Course Name	Training Hours
		2023/5/31	Accounting Research and Development Foundation	Common Deficiencies in “Financial Statement Review” and Practical Analysis of Important Internal Control Regulations	6
		2023/12/11	The Institute of Internal Auditors	Key Points and Practical Analysis of "Shareholders' Meeting" and "Company Act”	6
Audit Supervisor	Chang, Ya- Ling	2023/5/31	Accounting Research and Development Foundation	Common Deficiencies in “Financial Statement Review” and Practical Analysis of Important Internal Control Regulations	6
		2023/12/11	The Institute of Internal Auditors	Key Points and Practical Analysis of "Shareholders' Meeting" and "Company Act”	6
Spokesperson	Li, Kai-li	2023/4/19	Cathay United Bank	ESG, moving towards NetZero era of sustainability	2
		2023/5/18	Micro-electronics Technology Magazine	Forum on Sustainable Supply Chains in the Electronics Industry	1.5
		2023/6/15	Bank SinoPac	SinoPac Net Zero Vanguard	2.5
		2023/7/25	Bank SinoPac	2023 Sustainability Foresight Forum	2.5
		2023/8/17	Taiwan Corporate Governance Association	Strategies for low-carbon transformation in enterprises	3
		2023/9/13	Tatung Forever Energy Co.	Global Net Zero Carbon Emission Development - The Way for Taiwanese Enterprises to Respond	3
		2023/11/29	Business Weekly	Carbon Market Launching New Chapter of Sustainable Future Summit	3

(IX) Implementation of Internal Control System

1. Internal Control Statement

	Chaintech Technology Corporation
	Statement on Internal Control System
	Date: March 13, 2024
CHAINTECH hereby states the results of the self-evaluation of the internal control system for 2023 as
follows:
I.	CHAINTECH acknowledges that the establishment, implementation and maintenance of the internal
	control system are the responsibilities of the Board of Directors and the managers of the Company.
	CHAINTECH has established such system. The objective of the internal control system lies in
	providing a reasonable guarantee for achieving business benefits and efficiency (including
	profitability, performance, and protection of assets and safety), ensuring the reliability, timeliness,
	transparency, and regulatory compliance with relevant norms and laws and regulations.
II.	The internal control system has inherent limitations. The internal control system is designed, no
	matter how perfect, to provide reasonable guarantee on the achievement of the above three objectives;
	moreover, the effectiveness of the internal control system is subject to changes in environment and
	situations. However, CHAINTECH's internal control system contains self-monitoring mechanisms,
	and CHAINTECH will take corrective actions upon identification of any deficiency thereof.
III.	CHAINTECH has made judgments on the design of internal control systems and effectiveness of
	implementation according to the judgment items in the "Handling Guidelines Governing the
	Establishment of Internal Control Systems by Public Companies" (hereinafter referred to as the
	"Handling Guidelines"). The judgment items for internal control system adopted in the "Handling
	Guidelines" divide the internal control system into five composition elements according to the process
	of management and control: (1) Control Environment; (2) Risk Assessment; (3) Control Activities;
	(4) Information and Communication; and (5) Monitoring Activities. Each composition element
	includes a number of items. For the aforementioned items, please refer to the provisions of "Handling
	Guidelines."
IV.	CHAINTECH has already adopted the aforementioned ICS assessment items to evaluate the
	effectiveness of ICS design and implementation.
V.	Based on the results of the determination in the preceding paragraph, CHAINTECH is of the opinion
	that, as of December 31, 2023, the internal control system (including the supervision and management
	of subsidiaries) of Note 2, including the design and implementation of the internal control system
	relating to the effectiveness and efficiency of the operations, reliability, timeliness, and transparency
	of reporting, and compliance with applicable laws and regulations, is effective and can reasonably
	assure the achievement of the foregoing goals.
VI.	This statement will become the main content of CHAINTECH's annual report and prospectus, and
	shall be made public. Any falsehood, concealment, or other illegality in the content made public will
	entail legal liability under Articles 20, 32, 171, and 174 of the Securities and Exchange Law.
VII.	This statement was approved by the Board of Directors on March 13, 2024, and none of the seven
	Directors in attendance objected to it and all consented to the content expressed in this statement.
	Chaintech Technology Corporation
	Chairman and General Manager: Shu-Jung Kao Signature

Note 1: In the design and implementation of the internal control system of publicly-listed companies, if there

is any material deficiency during the year, it shall be added behind paragraph 4, to list and explain the major deficiency discovered in self-check as well as the improvement actions taken by the Company and improvement status before the balance sheet date.

Note 2: The date of the statement is the date of the "end of the fiscal year."

Any CPA commissioned to review the ICS shall disclose the CPA’s audit report: N/A

(X) Punishments against the Company and its internal personnel in accordance with the law in the most recent year and up to the date of the publication of the annual report, punishments imposed by the Company against its internal personnel for violating the provisions of the internal control system, major deficiency and improvement: None.
(XI) Significant resolutions made at Shareholders' Meeting and Board Meeting in the most recent fiscal year up to the publication date of this Annual Report:
Content and implementation of important resolutions of the shareholders' meeting in 2023
- (1) Passed CHAINTECH's 2022 Business Report and Financial Statements. Implementation status: Resolved as passed.
- (2) Passed the proposal of CHAINTECH's 2022 earnings distribution plan. Implementation status: The distribution of cash dividends amounted to NT$77,199,064 (a distribution of cash dividends of NT$0.80 per share) was distributed to the shareholders. The ex-dividend date was July 11, 2023 and the distribution was fully made on July 31, 2023.
Important resolutions of the Board Meeting from January 1, 2023 to April 30, 2024 (publication date)

Date	Meeting Type	Important Resolutions
2023.1.13	The 4th session of the 15th	1. Passed the proposal on CHAINTECH's 2023 operation plan. 2. Passed the proposal on reviewing the policies, systems, standards and structures for the performance evaluation, salary and remuneration of the directors, supervisors and managers of the Company. 3. Passed the proposal on the review the "Performance Evaluation Measures of the Board of Directors”. 4. Passed the proposal on retrospectively confirmation of CHAINTECH's individual salary and remuneration for managers in 2022. 5. Passed the proposal on CHAINTECH's individual salary and remuneration for managers in 2023. 6. Passed the proposal on CHAINTECH's year-end bonus and special leave bonus for managers in 2022. 7. Passed the proposal to establish the first corporate governance supervisor of CHAINTECH.
2023.3.23	The 5th session of the 15th	1. Passed 2022 Business Report and Financial Statements. 2. Passed the proposal on CHAINTECH's 2022 remuneration to Directors. 3. Passed the proposal on CHAINTECH's remuneration to managers for 2022. 4. Passed the proposal on CHAINTECH's individual salary and remuneration for new managers in 2023. 5. Passed the proposal on CHAINTECH's "Evaluation of the Effectiveness of Internal Control Systems" and "Statement on Internal Control System" for 2022.

Date	Meeting Type	Important Resolutions
		6. Passed the schedule and planning for the greenhouse gas inventory and third-party verification of the consolidated subsidiary of CHAINTECH. 7. Approved the matters concerning the convening date, time, place and content of CHAINTECH's 2023 regular shareholders' meeting.
2023.5.5	The 6th session of the 15th	1. Passed & approved the proposal on CHAINTECH's consolidated financial report for Q1 2023. 2. Passed & discussed the proposal of CHAINTECH's 2022 earnings distributionplan.
2023.8.7	The 7th session of the 15th	1. Passed & discussed the proposal of CHAINTECH's consolidated financial report for Q2 2023. 2. Passed & discussed the proposal on CHAINTECH's individual salary and remuneration for new managers in 2023. 3. Passed & discussed the proposal on CHAINTECH's bonus distribution for managers in 2023. 4. Passed & discussed the proposal for the amendment to CHAINTECH's Rules of Procedure for Board Meeting. 5. Passed & discussed the authorization of Chairman of the Board to interact with banks and securities and financial companies in the name of CHAINTECH.
2023.11.6	The 8th session of the 15th	1. Passed & discussed the proposal of CHAINTECH's consolidated financial report for Q3 2023. 2. Passed & discussed the proposal of CHAINTECH's audit plan for 2024. 3. Passed & discussed the proposal on the appointment, remuneration, and evaluation of the independence status of CHAINTECH's CPAs. 4. Passed & discussed the proposal for the endorsement guarantee of payment for goods for the reinvestment business of "Sitonholy (Tianjin) Technology Co., Ltd." of the Company. 5. Passed & discussed the proposal for the cancellation of endorsement guarantee for the reinvestment business of "Beijing Sitonholy Technology Co.,Ltd."ofthe Company.
2024.1.25	The 9th session of the 15th	1. Passed & discussed the proposal of CHAINTECH's 2024 operation plan. 2. Passed & discussed the proposal of amendments to CHAINTECH's Organizational Procedures of the Remuneration Committee. 3. Passed & discussed the proposal to amend the "Director and Supervisor Remuneration Regulations" of CHAINTECH and change its name. 4. Passed & discussed the proposal to delete the "Manager's Salary and Remuneration Regulations" of CHAINTECH. 5. Passed & discussed the proposal on the amendment to the "Performance Evaluation Measures of the Board of Directors” of CHAINTECH. 6. Passed & discussed the proposal on CHAINTECH's individual salary and remuneration for managers in 2024. 7. Passed & discussed the proposal on CHAINTECH's year-end bonus for managers in 2023. 8. Passed & discussed the proposal on providing funding loan to the subsidiary "Sitonholy (Shenzhen) Technology Co., Ltd." from the subsidiary "Sitonholy (Tianjin) Technology Co., Ltd.”. 9. Passed & discussed the proposal on establishing a joint venture company "Ningxia Suanhai Technology Co.,Ltd."throughthe subsidiary"Sitonholy

Date	Meeting Type	Important Resolutions
		(Tianjin)Technology Co.,Ltd."and othercompanies.
2024.3.13	The 10th session of the 15th	1. Passed & discussed the proposal on 2023 Business Report and Financial Statements. 2. Passed & discussed the proposal on CHAINTECH's 2023 remuneration to Directors. 3. Passed & discussed the proposal on CHAINTECH's remuneration to managers for 2023. 4. Passed & discussed the proposal on CHAINTECH's "Evaluation of the Effectiveness of Internal Control Systems" and "Statement on Internal Control System" for 2023. 5. Passed & discussed to plan the matters concerning the convening date, time, place and content of CHAINTECH's 2024 regular shareholders' meeting.

(XII) In the most recent year and as of the publication date of this report, whether there are Directors or Supervisors having different opinions on the important resolutions passed by the Board of Directors with records or written announcements: None.
(XIII) Resignation or Dismissal of the Company's Key Individuals, Including the Chairman, General Manager, and Heads of Accounting, Finance, Internal Audit, Corporate Governance and R&D for the Most Recent Year and up to the Date of Publication of this Annual Report: None.

IV. Information on CPAs fees

(I) CPA fees

					Unit: NT$1,000	Unit: NT$1,000
Accounting Firm	Name of CPA	Audit Period	Audit Fees	Non-Audit Fees (Note)	Total	Remarks
PwC Taiwan	Min-Chuan Feng	2023/01/01~ 2023/12/31	3,504	490	3,994
	Ya-Hui Lin	2023/01/01~ 2023/12/31

Note: Service scope of non-audit fees: Transfer pricing amounted to $240 thousand and group enterprise master file service fee amounted to $250 thousand.

(II) Where the CPA firm was replaced, and the audit fees in the fiscal year, when the replacement was made, were less than that in the previous fiscal year before replacement, the amount of audit fees paid before/after replacement and reasons for paying this amount shall be disclosed: N/A
(III) Where accounting fee paid for the year was more than 10% of the previous year, the sum, proportion, and cause of the reduction shall be disclosed: None.

V. Information About Replacement of CPA `：`

(I) Information on the previous CPA N/A

(II) About the successor CPA N/A
(III) The former CPAs reply to the above-mentioned matters in subparagraph 1 and 2-3 of Article 10-6 of the Guidelines: N/A
VI. If the Company's Chairman, General Manager, or Managers in Charge of Finance and Accounting Operations Held Positions in an Accounting Firm or Its Affiliates in the Most Recent Year, their names, positions, and period of working should be disclosed. The affiliated enterprises of the accounting firm of CPAs refer to those in which the CPAs of the accounting firm hold more than 50% shares or obtain more than half seats of directors, or the accounting firm of CPAs is company or institution of affiliated enterprises in released or printed materials to the outside: None.

VII. Status of Share Transfer and Changes in Equity Pledge by the Chairman, Supervisors, Managers, and Shareholders with Over 10% Shareholdings in the Most Recent Year until the Publication Date of the Annual Report
(I) Change in the equities of the Directors, Supervisors, Managers and substantial shareholders

Unit: Shares

Title	Name	2023	2023	As of April 16, 2023	As of April 16, 2023
		Change in Shares Held	Change in Shares Pledged	Change in Shares Held	Change in Shares Pledged
Director	Yiland International Ltd. Representative: Shu-Jung Kao Representative: Li- Cheng Lu Representative: Mu-Tien Wang	(4,015,000)－－－	－－－－	(80) －－－	－－－－
Independent Director	Kuo-Chin Chen	－	－	－	－
Independent Director	Han-Yu Tang	－	－	－	－
Independent Director	Hsin-Ying Yang	－	－	－	－
Independent Director	Chi-Feng Wei	(55,000)	－	－	－
General Manager	Shu-Jung Kao	－	－	－	－
Vice General Manager of PC Business Center	Chih-Kun Feng (Note 1)	－	－	－	－
Assistant Manager of Motherboard Research and Development Division	Po-Lin Huang	－	－	－	－
Associate Manager of Information Technology Department	Shih-Lun Wei (Note 2)	－	－	－	－
Manager of Finance/Accounting	Yu-Nu Lai	－	－	－	－
Major Shareholder	Yiland International Ltd.	(4,015,000)	－	(80)	－

Note 1: Vice President Chih-Kun Feng was onboard on June 1, 2023. Note 2: Shih-Lun Wei was promoted to Assistant Manager on March 1, 2023.

(II) Equity transfer information:

Equity transfer of CHAINTECH's Directors, Supervisors, managerial officers and major shareholders to related parties.

(III) Information on equity pledge:

There is no equity pledge by the Directors, Supervisors, managers and major shareholders of CHAINTECH.

VIII. Information on the related party relationship as defined in the Statements of Financial Accounting Standards No. 6 between the Company's top ten shareholders by shareholding ratio:

Unit: Shares; % ％

Name	Shares Held by the Person	Shares Held by the Person	Shares Held By Spouse and Minor Children	Shares Held By Spouse and Minor Children	Shares Held in the Name of Other Persons	Shares Held in the Name of Other Persons	The title or name and relations of the top 10 shareholders who are related parties, spouses, or relatives within the second degree of kinship.(Note 3)	The title or name and relations of the top 10 shareholders who are related parties, spouses, or relatives within the second degree of kinship.(Note 3)	Remarks
	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Number of shares	Shareholding ratio	Title or name	Relations
Yiland International Ltd.	24,517,000	25.41	－	－	－	－	－	－	Director/ Major Shareholder
Yiland International Ltd. Representative: Zhang, Qi	－	－	－	－	－	－	－	－	－
Customer Investment Account of Yuanta Securities under custody of Citibank	2,124,000	2.20	－	－	－	－	－	－	－
Lin, Wei-Ling	1,937,468	2.01
Jinghua Mountain International (Hong Kong) Limited Investment Account under custody of HSBC Bank(Taiwan)Limited	1,611,000	1.67
Wu, Ming-Wei	1,476,000	1.53
Yang, Shun-Hsing	1,305,000	1.35	－	－	－	－	－	－	－
Wu, Wen-yuan	878,000	0.91
Chun-Way International Corp.	635,000	0.66
Wu, Chun-Ching	630,000	0.65
Wu, Chun-Hsien	630,000	0.65

Note 1: All the top 10 shareholders shall be listed. For juristic person shareholders, their names and the name of their representatives shall be listed separately.

Note 2: Shareholding ratio is calculated separately based on the ratio of shares held in the name of the person,

his/her spouse, minor children, or others.

Note 3: Relations between the aforementioned shareholders, including juristic person shareholders and natural person shareholders, shall be disclosed based on the financial reporting standards used by the issuer.

IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company

IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company	IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company
December 31,2023 Unit: Shares;%
Re-investment Businesses (Note 1)	Investments of CHAINTECH		Investments of Directors, Supervisors, Managers and directly or indirectly controlled businesses		Total Ownership
	Number of shares	Shareholding ratio	Number of shares	Shareholdin gratio	Number of shares	Shareholding ratio
Shenzhen Jinghong Digital R&D Service Co.,Ltd Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. (Note 3) Baotou Yihui Information Technology Co., Ltd. (Note 3) Sitonholy (Shenzhen) Technology Co., Ltd.(Note 3)	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	100% 51% 100% 100% 100%	－－－－－	－－－－－	(Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	100% 51% 100% 100% 100%

Note 1: Investment by using the equity method

Note 2: The investee company is a limited company with no share issued, so there is no number of shares held. Note 3: The investee company is a 100% reinvestment of Sitonholy (Tianjin) Technology Co., Ltd.

Chapter 4. Funding Overview

I. Capital and Shares

(I) Sources of Share Capital

1. Formation of share capital

Year Month	Issued Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Number of shares	Amount	Number of shares	Amount	Sources of Share Capital	Capital from Non-Cash Assets	Others
1986.11	10	500,000	5,000,000	500,000	5,000,000	Incorporation of the Company	None.	Note
1989.03	10	6,000,000	60,000,000	6,000,000	60,000,000	Cash Capital Increase of NT$55,000,000	None.	Note
1989.12	10	12,000,000	120,000,000	12,000,000	120,000,000	Cash Capital Increase of NT$60,000,000	None.	Note
1990.06	10	19,500,000	195,000,000	19,500,000	195,000,000	Cash Capital Increase of NT$75,000,000	None.	Note
1994.05	10	19,500,000	195,000,000	11,700,000	117,000,000	Capital Reduction of NT$78,000,000	None.	Note
1994.05	10	19,900,000	199,000,000	19,900,000	199,000,000	Cash Capital Increase of NT$82,000,000	None.	Note
1995.07	10	50,000,000	500,000,000	32,000,000	320,000,000	Cash Capital Increase of NT$121,000,000	None.	Note
1996.11	10	50,000,000	500,000,000	35,200,000	352,000,000	Capital Increased by Surplus of NT$32,000,000	None.	Note
1997.05	10	50,000,000	500,000,000	42,860,000	428,600,000	Capital Increased by Surplus of NT$70,400,000 Capital Increased by Employee Bonus of NT$6,200,000	None.	Note
1998.04	10	200,000,000	2,000,000,000	70,000,000	700,000,000	Capital Increased by Surplus of NT$85,720,000 Capital Increased by Employee Bonus of NT$6,897,000 Cash Capital Increase of NT$178,783,000	None.	Note
1999.06	10	200,000,000	2,000,000,000	77,943,000	779,430,000	Capital Increased by Surplus of NT$42,000,000 Capital Increased by Capital Surplus of NT$35,000,000 Capital Increased by Employee Bonus of NT$2,430,000	None.	Note
2000.06	10	200,000,000	2,000,000,000	95,019,900	950,199,000	Capital Increased by Surplus of NT$116,914,500 Capital Increased by Capital Surplus of NT$38,971,500 Capital Increased by Employee Bonus of NT$14,883,000	None.	Note
2000.12	10	200,000,000	2,000,000,000	102,924,423	1,029,244,230	Capital Increased by Corporate Convertible Bonds of NT$79,045,230	None.	February 13, 2001 (90) Business No. 09001037670

Year Month	Issued Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Number of shares	Amount	Number of shares	Amount	Sources of Share Capital	Capital from Non-Cash Assets	Others
2001.06	10	200,000,000	2,000,000,000	117,187,775	1,171,877,750	Capital increase with surplus by NT$56,608,430 Capital Increased by Capital Surplus of NT$46,315,990 Capital Increased by Employee Bonus of NT$13,194,440 Capital Increased by Convertible Bonds of NT$26,514,660	None.	May 23, 2001 (90) TWF (I) No. 132078
2002.05	10	200,000,000	2,000,000,000	135,133,069	1,351,330,690	Capital Increased by Surplus of NT$82,031,440 Capital Increased by Capital Surplus of NT$70,312,660 Capital Increased by Employee Bonus of NT$23,795,240 Capital Increased by Convertible Bonds of NT$3,313,600	None.	May 16, 2002 (91) TWF (I) No. 126710
2003.10	10	200,000,000	2,000,000,000	135,197,020	1,351,970,200	Capital Increased by Convertible Bonds of NT$639,510	None.	October 13, 2003 (92) Business No. 09201288850
2005.7	10	250,000,000	2,500,000,000	149,863,686	1,498,636,860	Capital Increased by Corporate Convertible Bonds under Private Placement of NT$146,666,660	None.	July 8, 2005 (94) Business No. 09401126820
2005.8	10	250,000,000	2,500,000,000	205,613,686	2,056,136,860	Capital Increased by Convertible Bonds under Private Placement of NT$557,500,000	None.	August 16, 2005 (94) Business No. 09401158030
2005.9	10	250,000,000	2,500,000,000	204,013,686	2,040,136,860	Writing Off Repurchased Treasury Stock of NT$16,000,000	None.	September 26, 2005 (94) Business No. 09401190290
2006.2	10	250,000,000	2,500,000,000	128,964,691	1,289,646,910	Capital Reduction of NT$750,489,950	None.	February 6, 2006 (95) S.Z. No. 09501018170
2007.1	10	250,000,000	2,500,000,000	129,813,191	1,298,131,910	Capital Increased by Employee Equity of NT$8,485,000	None.	January 22, 2007 (96) S.Z. No. 09601012070
2007.8	10	250,000,000	2,500,000,000	130,078,691	1,300,786,910	Capital Increased by Employee Equity of NT$2,655,000	None.	August 16, 2007 (96) S.Z. No. 09601197660
2007.10	10	250,000,000	2,500,000,000	130,081,691	1,300,816,910	Capital Increased by Employee Equity of NT$30,000	None.	October 17, 2007 (96) S.Z. No. 09601253600
2008.9	10	250,000,000	2,500,000,000	76,852,263	768,522,630	Capital Reduction of NT$532,294,280	None.	September 22, 2008 (97) S.Z. No. 09701239470
2010.3	10	250,000,000	2,500,000,000	89,352,263	893,522,630	Cash Capital Increase of NT$125,000,000	None.	March 17, 2010 (99) S.Z. No. 09901050980

Year Month	Issued Price	Authorized Share Capital	Authorized Share Capital	Paid-in Capital	Paid-in Capital	Remarks	Remarks	Remarks
		Number of shares	Amount	Number of shares	Amount	Sources of Share Capital	Capital from Non-Cash Assets	Others
2011.11	10	250,000,000	2,500,000,000	117,831,766	1,178,317,660	Capital Reduction of NT$275,204,970 Cash Capital Increase under Private Placement of NT$560,000,000	None.	November 24, 2011 (100) S.Z. No. 10001266040
2012.8	10	250,000,000	2,500,000,000	93,570,206	935,702,060	Capital Reduction of NT$242,615,600	None.	August 14, 2012 (101) Business No. 10101165750
2013.9	10	250,000,000	2,500,000,000	94,505,909	945,059,090	Capital Increased by Surplus of NT$9,357,030	None.	September 9, 2013 (102) Business No. 10201184650
2014.9	10	250,000,000	2,500,000,000	109,248,831	1,092,488,310	Capital Increased by Surplus of NT$147,429,220	None.	September 23, 2014 (103) Business No. 10301199230
2018.5	10	250,000,000	2,500,000,000	101,498,831	1,014,988,310	Treasury Stock Capital Reduction of NT$77,500,000	None.	May 23, 2018 (107) Business No. 10701052620
2023.1	10	250,000,000	2,500,000,000	96,498,831	964,988,310	Treasury Stock Capital Reduction of NT$50,000,000	None.	January 9, 2024 (112) Business No. 11101247660

Note: It is not provided for no value of disclosure due to time.

2. Type of Shares

2.	Type of Shares	Type of Shares	Type of Shares	Type of Shares
	April 16,2024(Share)
Type of Shares	Authorized Share Capital			Remarks
	Outstanding Shares	Unissued shares	Total
Common Shares	96,498,831	153,501,169	250,000,000

(II) Shareholder Structure

(II) Shareholder Structure	(II) Shareholder Structure	(II) Shareholder Structure
			April 16,2024 Other Legal Persons Individual Foreign Institutions and Foreigners Chinese Capital Total 20 18,205 38 1 18,265 962,444 65,576,148 5,256,239 24,517,000 96,498,831 0.99 67.96 5.45 25.41 100.00
Shareholder Structure Quantity	Government Agencies	Financial Institutions	Other Legal Persons	Individual	Foreign Institutions and Foreigners	Chinese Capital	Total
Number of Individuals	0	1	20	18,205	38	1	18,265
Number of shares	0	187,000	962,444	65,576,148	5,256,239	24,517,000	96,498,831
Shareholding ratio(%)	0	0.19	0.99	67.96	5.45	25.41	100.00

Note: The first TPEx-listed company and emerging stock companies shall disclose their own shareholding ratio of Mainland investors. Mainland investor refers to the companies invested by the people, legal persons, groups, other institutions, or companies that are invested in the third region by people from China Mainland, as stipulated in Article 3 of the Regulations Governing the Investment and Licensing in Taiwan by the People from China Mainland.

(III) Distribution of Shares

1. Common Shares

1. Common Shares	1. Common Shares	1. Common Shares	1. Common Shares
April 16,2024
Shareholding Range	Number of Shareholders	Number of shares	Shareholding ratio(%)
1 to 999	4,525	862,895	0.89
1,000 to 5,000	11,702	23,093,467	23.93
5,001 to 10,000	1,243	10,184,722	10.55
10,001 to 15,000	261	3,405,342	3.53
15,001 to 20,000	190	3,611,732	3.74
20,001 to 30,000	142	3,743,269	3.88
30,001 to 40,000	55	1,981,763	2.05
40,001 to 50,000	42	1,972,707	2.05
50,001 to 100,000	60	4,129,858	4.28
100,001 to 200,000	23	3,146,748	3.26
200,001 to 400,000	7	1,983,860	2.06
400,001 to 600,000	5	2,639,000	2.74
600,001 to 800,000	3	1,895,000	1.96
800,001 to 1,000,000	1	878,000	0.91
Create new ranges as needed for 1,000,001andmore	6	32,970,468	34.17
Total	18,265	96,498,831	100.00

2. Preferred Shares: N/A

(IV) List of Major Shareholders

V) List of Major Shareholders	V) List of Major Shareholders	V) List of Major Shareholders
April 16,2024 Shareholding Name of major shareholder Number of shares Shareholding ratio Yeland International Development Ltd. 24,517,000 25.40%
Shareholding Name of major shareholder	Number of shares	Shareholding ratio
Yeland International Development Ltd.	24,517,000	25.40%

(V) Net worth, earnings, dividends, and market price-related information for the last two years up to the publication date of this annual report

up	to the publication date of this annual report	to the publication date of this annual report	to the publication date of this annual report	to the publication date of this annual report	to the publication date of this annual report	to the publication date of this annual report
	Unit: thousand shares
Item	Year			2022	2023	As of March 31, 2024(Note 8)
Market price per share (Note 1)	Highest			32.75	62.00	51.00
	Lowest			21.80	27.75	42.65
	Average			27.63	40.76	46.58
Net value per share (Note 2)	Before distribution			20.95	22.57	23.31
	After distribution			20.95	22.57	－
Earnings per share	Weighted Average Shares			96,499	96,499	96,499
	Earnings per share (Note 3)		Before adjustment	3.32	1.68	0.34
			After adjustment	3.32	1.68	－
Dividends per share	Cash Dividends			0.80	0.45(Note 9)	－
	Stock Grants	Dividend for paid- in capital		－	－	－
		Earnings Grants		－	－	－
	Accumulated dividend not paid out (note 4)			－	－	－
Return on Investments	Price-to-earning ratio (Note 5)			8.32	24.26(Note 9)	－
	Price-to-dividend ratio (Note 6)			34.54	90.58(Note 9)	－
	Cash dividend yield (Note 7)			0.03	0.01(Note 9)	－

If the Company has contributed surplus or capital surplus to the capital increase, the market price and cash dividend
adjustment retrospectively adjusted for the distribution of the number of shares shall be disclosed based on the number of shares released retrospectively.
Note 1: Disclose the annual maximum and minimum market value of the common stock. The annual average market value is calculated based on each year's transaction value and quantity.
Note 2: Fill in the shares based on the number of shares that have been issued by year-end and the distribution through resolution at the shareholders' meeting in the following year.
Note 3: If there is any retrospective adjustment required due to stock grants or capital reduction to offset losses, earnings per share before and after the adjustment shall be disclosed.
Note 4: If the conditions of equity securities issuance allow unpaid dividends to be accumulated to the subsequent years in which there is profit, the Company shall disclose the accumulated unpaid dividends respectively up to that year.
Note 5: P/E Ratio = Average closing price for each share in the year/earnings per share
Note 6: P/D ratio = Average closing price per share of the year/Cash dividends per share
Note 7: Cash dividend yield = cash dividend per share/current year average per share closing price.
Note 8: The net value per share and earnings per share should be filled up to the quarter nearest to the date of the publication of this annual report to be audited by an accountant. The remaining column should be filled with the annual data up to the publication of this annual report.
Note 9: Earnings distribution proposal passed by the Board of Directors for 2023 has not been resolved by the Shareholders' Meeting.

(VI) Explanation of the Company's dividend policy, implementation, and the expected significant changes
Dividend policy

If CHAINTECH has a surplus in the general annual report, the surplus shall be made up for the previous losses, apart from allocating income taxes. And 10% of the balance shall be allocated as a statutory surplus reserve unless the statutory surplus reserve has reached the paid-in capital. After the statutory surplus reserve is retained or rotated in accordance with the rules and regulations by competent agencies, the undistributed earnings at the beginning of the period shall be combined and the Board of Directors shall formulate a specific proposal for distribution of earnings to be submitted to the Shareholders' Meeting for resolution, with consideration given to retaining partial earnings. For the current year, cash dividends shall not be less than 5%. However, if cash dividends are not paid below NT$0.1 per share, the dividend will be distributed in stock dividends.

The status of Shareholders' Meeting on approving the proposal for the distribution of earnings:

CHAINTECH's earnings distribution for 2023 was approved by the Board of Directors on May 3, 2024, to issue NT$0.45 per share. After the resolution of the General Shareholders' Meeting is passed, the Chairman of the Board will be authorized to set the ex-dividend base date.

(VII) Effect of free allotment of shares proposed at this shareholders' meeting on the Company's business performance and earnings per share: No free allotment is proposed at the shareholders' meeting in 2024.
(VIII) Remuneration for Employees, Directors, and Supervisors:
Percentage or scope of remuneration for employees, directors, and supervisors as prescribed under the Articles of Association:
- If CHAINTECH has a profit for the year, it shall appropriate no less than 0.1% as the remuneration for employees, and no more than 6% as remuneration for directors and supervisors. However, in case of the accumulated losses, certain profits shall first be reserved to cover them, and then reserve remuneration to employees, directors and supervisors in accordance with the proportion mentioned in the preceding paragraph.
Accounting treatment for the basis of estimating the amount of remuneration for employees, directors, and supervisors for this fiscal period, the basis of calculating the number of shares to be distributed as employees’ remuneration, and for any discrepancy between the actual amount distributed and the estimated figures.
- (1) The remuneration for employees, directors, and supervisors of CHAINTECH is estimated in accordance with CHAINTECH's Articles of Association.

(2) The remuneration for employees, directors, and supervisors of CHAINTECH shall be based on the explanation letter issued by the Accounting Research and Development Foundation (96) Official Letter No. 052. The amount of remuneration for employees, directors, and supervisors of the Company shall be estimated, and recognized under appropriate accounting items of operation cost or operation expense according to its nature. If there is a discrepancy between the resolution of Shareholders' Meeting and estimated amount in financial statements, it is considered as changes in an estimate and is recognized as profit or loss for the current period.
The Board of Directors approved the amount of remuneration for employees, directors, and supervisors and calculation of earnings per share:
(1) Amount of remuneration for employees, directors and supervisors: As approved by the Board of Directors on March 13, 2024, the proposed distribution of remuneration to employees, directors and supervisors of CHAINTECH for the year of 2023 is as follows:
- A. Employees’ compensation was NT$2,383,904.
- B. Remuneration of directors was NT$7,151,711.
- C. All the above amounts have been paid in cash, which has no difference with the estimated amounts that were found in 2023.
(2) The amount of any employee remuneration distributed in stocks, and the size of that amount as a percentage of the sum of the after-tax net income stated in the parent company only financial reports or individual financial reports for the current period and total employee remuneration: N/A
The actual distribution of remuneration for employees, directors, and supervisors (including the number, sum, and price of shares distributed), and where there were discrepancies with the recognized compensations for employees, directors, and supervisors, the difference, cause, and treatment of the discrepancy shall be described:

Unit: NT$

			Unit: NT$
Item	Actual distribution in 2023	Listed amount in 2022	Discrepancies
Employee's compensation in cash	4,039,470	4,039,470	0
Employee compensation in shares	0	0	0
Directors' remuneration	12,118,410	12,118,410	0

(X) Repurchase of Shares by CHAINTECH: None.
II. Issuance of Corporate Bonds (including overseas corporate bonds): None.
III. Issuance of Preferred Shares: None.
IV. Issuance of Overseas Depository Receipts: None.
V. Employee Stock Options: None.
VI. New Employee Shares with Limited Rights: None.
VII.Issuance of New Shares in Connection with the Merger or Acquisition of Other Companies: None.
VIII. Capital Utilization Plan and Implementation: None.

Chapter 5. Operating Overview

I. Business Activities

(I) Scope of Business:
Business Items
- (1) CC01010 Power Generation, Transmission and Distribution Machinery Manufacturing (limited to the 2810 power generation, transmission and distribution machinery manufacturing according to the Industrial Standard Classification of the Republic of China; 2890 other power equipment manufacturing, limited to wind power generation equipment manufacturing).
- (2) CC01030 Electric Appliances and Audio-visual Electronic Products Manufacturing (limited to 2730 audio-visual electronic products manufacturing, 2851 household AC manufacturing, 2852 household refrigerator manufacturing, 2853 household washing machine manufacturing, 2854 household electric fan manufacturing, and 2859 other household electric appliances manufacturing according to the Industrial Standard Classification of the Republic of China).
- (3) CC01060 Wired Communication Machinery and Equipment Manufacturing (limited to 2721 telephone and mobile phone manufacturing and 2729 other communication and transmission equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
- (4) CC01070 Wireless Communication Equipment Manufacturing (limited to 2721 telephone and mobile phone manufacturing, 2729 other communication and transmission equipment manufacturing and 2751 measurement, navigation and control equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
- (5) CC01080 Electronic Parts and Components Manufacturing (limited to 2630 printed circuit board manufacturing, 2691 printed circuit board parts and components manufacturing and 2699 other electronic parts and components manufacturing according to the Industrial Standard Classification of the Republic of China).
- (6) CC01101 Telecommunications Control RF Equipment Manufacturing (limited to 2721 telephone and mobile phone manufacturing, 2729 other communication and transmission equipment manufacturing and 2760 radiation and electronic medical equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
- (7) CC01110 Computer and Peripheral Devices Manufacturing (limited to 2711 computer manufacturing, 2712 display and terminal manufacturing and 2719 other computer and peripheral devices manufacturing according to the Industrial Standard Classification of the Republic of China).
- (8) CC01120 Data Storage Media Manufacturing and Copying (limited to 2740 data storage media manufacturing according to the Industrial Standard Classification of the Republic of China).

(9) CE01010 General Instruments Manufacturing (limited to 2751 measurement, navigation and control equipment manufacturing and 2760 radiation and electronic medical equipment manufacturing according to the Industrial Standard Classification of the Republic of China).
(10) CH01040 Toys Manufacturing (limited to 3312 toys manufacturing according to the Industrial Standard Classification of the Republic of China).
(11) F102030 Tobacco and Beverage Wholesale (limited to 4546 tobacco and beverage wholesale according to the Industrial Standard Classification of the Republic of China).
(12) F109070 Stationery, Musical Instrument, and Entertainment Products (limited to 4581 books and stationery wholesale, 4582 sports products, and apparatus wholesale and 4583 toys and entertainment products wholesale according to the Industrial Standard Classification of the Republic of China), excluding books, magazines, and newspapers wholesale.
(13) F113010 Machinery Wholesale (limited to 4643 agricultural and industrial machinery and equipment wholesale according to the Industrial Standard Classification of the Republic of China).
(14) F113020 Electrical Appliances Wholesale (limited to 4561 household appliances wholesale according to the Industrial Standard Classification of the Republic of China).
(15) F113030 Precision Instruments Wholesale (limited to 4564 household photographic equipment and optical products wholesale and 4649 other machinery and appliances wholesale according to the Industrial Standard Classification of the Republic of China).
(16) F113050 Computer and Office Machine and Equipment Wholesale (limited to 4641 computer and peripheral equipment and software wholesale and 4644 office machine and equipment wholesale according to the Industrial Standard Classification of the Republic of China).
(17) F113070 Telecommunication Equipment Wholesale (limited to 4642 electronic equipment and parts and components whole according to the Industrial Standard Classification of the Republic of China), excluding telecommunication core network equipment (such as exchange and transmission equipment) wholesale.
(18) F118010 Information Software Wholesale (limited to 4641 computer and peripheral equipment and software wholesale according to the Industrial Standard Classification of the Republic of China).
(19) F119010 Electronic Materials Wholesale (limited to 4642 electronic equipment and parts and components wholesale according to the Industrial Standard Classification of the Republic of China).
(20) F203020 Tobacco and Beverage Retail (limited to 4729 other food and beverage, tobacco retail according to the Industrial Standard Classification of the Republic of

China; excluding the retail of drug stores, pharmacy, cosmeceuticals shop, or live animal shop).

(21) F209060 Stationery, Musical Instrument and Entertainment Products Retail (limited to 4761 books and stationery retail, 4762 sports products and apparatus retail, 4763 toys and entertainment products retail and 4764 music tape and movies retail according to the Industrial Standard Classification of the Republic of China), excluding the retail of books, magazines and newspapers.
(22) F213010 Electric Appliances Retail (limited to 4741 household electric appliances retail and 4833 audio-visual equipment retail according to the Industrial Standard Classification of the Republic of China).
(23) F213030 Computer and Office Machine and Equipment Retail (limited to 4831 computer and peripheral equipment and software retail according to the Industrial Standard Classification of the Republic of China).
(24) F213060 Telecommunication Equipment Retail (limited to 4832 telecommunication equipment retail according to the Industrial Standard Classification of the Republic of China), excluding the retail of telecommunication core network equipment (e.g. exchange and transmission equipment).
(25) F214030 Auto and Motor Vehicle Parts and Components Retail (limited to 4843 auto and motor vehicle parts and components retail according to the Industrial Standard Classification of the Republic of China).
(26) F218010 Information Software Retail (limited to 4831 computer and peripheral equipment and software retail according to the Industrial Standard Classification of the Republic of China).
(27) F219010 Electronic Materials Retail (limited to 4831 computer and peripheral equipment and software retail, 4832 telecommunication equipment retail and 4833 audio-visual equipment retail according to the Industrial Standard Classification of the Republic of China).
(28) I501010 Product Design (limited to 7402 design service for specially manufactured products in industrial design and 7409 design service for specially manufactured products in other professional design service industry according to the Industrial Standard Classification of the Republic of China).
(29) JA02010 Electrical Appliance and Electronic Products Repair (limited to 9521 computer and peripheral equipment repair, 9522 telecommunication and transmission equipment repair and 9523 audio-visual electronic products and household appliances repair according to the Industrial Standard Classification of the Republic of China).

2. Business proportion

Unit: NT$ thousands

Business proportion	Unit: NT$thousands	Unit: NT$thousands
Item	2023 Operatingrevenue
	Amount	Percentage
Computerperipherals	6,742,935	98.82
Others	80,464	1.18
Total	6,823,399	100.00

Current products and services
(1) Display cards
(2) Motherboard
(3) AI server and system integration
(4) High-performance data computing solutions
New products and services that are planned to be developed
(1) Display cards
- A. The GeForce RTX 40 SUPER series of GPUs have been launched in 2024, including GeForce RTX 4080SUPER, GeForce RTX 4070 Ti SUPER and GeForce RTX 4070 SUPER. NVIDIA pointed out that the GeForce RTX 40 SUPER series of GPUs will provide super power for the latest games and become the key core of PCs driven by artificial intelligence (AI).
- B. GeForce RTX 40 SUPER series GPUs are built on the NVIDIA Ada Lovelace architecture. The latest GPU can provide up to 52 shader TFLOPS in shader computing power. The real-time light source computing capability is expected to reach 121 RT-TFLOPS. The AI computing power is expected to reach 836 AI TOPS.
- C. The subsequent development plans will be prepared for the development of NVIDIA Ada Lovelace new high-end chips that cover the series of iGame Lab, Vulcan, Ultra, Advanced, and so on.
- D. Develop display cards heat dissipation solutions in advance for NVIDIA's nextgeneration chips, including product series of Vulcan, Ultra, Advanced., etc.
(2) Motherboard
- A. New Intel series products are actively developed. The 800 series chipset series products are being prepared for upcoming launch, continuing the iGame, CVN, BATTLE-AX and Netchi series of new products, which will be released in the second half of 2024 in line with Intel's plan.
- B. The development of new AMD series products and chipsets supporting the new generation AM5 processor series uses the latest AMD 800 series chipsets. The product series is planned to be released in the second half of 2024, including mid-range DIY motherboards such as CVN, BATTLE-AX and Netchi.

C. Focus on the development of e-commerce, and strengthen the cooperation between online marketing of products and e-commerce.
D. Strengthen the close cooperation with the upstream manufacturers of Intel, AMD, NV, etc.
(3) AI server and system integration
A. The subsidiary, SITONHOLY, develops a variety of self-branded GPU servers. In 2024, the AI open platform and large-model all-in-one machine will be added.
B. The software product AI open platform independently developed by SITONHOLY has 100% independent research and development of the underlying architecture and does not use open source technology. AI workflow and HPC workflow, billing system, computer room asset management, and AI industry applications are integrated into the same platform to build a large-scale computing platform and to meet various application scenarios.
C. Based on SITONHOLY's powerful computing server, Xunsi code generation allin-one machine uses large language model technology to conduct exclusive training. It is a large model all-in-one machine that can be used out of the box for programming scenarios. Users can save time on model deployment and focus on the use of the model itself and their own development tasks, providing customers with a full-stop AI assistant service from demand to delivery. By simplifying the programming and software development process, the programming threshold is lowered and the entire process of product development can be empowered. Development and production efficiency are improved in all aspects.

(II) Industry Overview

Current State and Development of the Industry
(1) Current State and Development of the Display Card Industry

According to preliminary results from the International Data Corporation (IDC) Worldwide Quarterly Personal Computing Device Tracking Report, global traditional PC shipments slightly exceeded expectations in the fourth quarter of 2023 (4Q23). Shipments reached nearly 67.1 million units, a decrease of 2.7% from the previous year. The silver lining in ethical corporate management is that the market contraction seems to have bottomed out, with growth expected to appear in 2024.

Initial estimates of global PC manufacturers' unit shipments in Q4 2023

Unit: One million units

Manufacturer	4Q23	4Q23	4Q22	4Q22	4Q23-
	Shipment	Market share	Shipment	Market share	4Q22Growth
		(%)		(%)	Rate(%)
Lenovo	16.1	24.0%	15.5	22.5%	3.9%
HP	13.9	20.8%	13.2	19.2%	5.4%
Dell	9.9	14.8%	10.8	15.7%	-8.2%
Apple	5.7	8.5%	7.0	10.1%	-18.4%
ASUS	4.2	6.3%	4.8	7.0%	-11.9%
Others	17.2	25.7%	17.7	25.6%	-2.4%
Total	67.1	100.0%	68.9	100.0%	-2.7%

Source:IDC Quarterly Personal Computing Device Tracker, January 10, 2024

Despite some improvement in performance, the shipment volume in the fourth quarter of 2023 decreased year-over-year for the eighth consecutive quarter. The shipment volume for the holiday quarter also hit the lowest level since the fourth quarter of 2006. It highlights the slow recovery of the market in the situation of weak demand and heavy reliance on significant promotions. In terms of the annual perspective, the current market has experienced an unprecedented continuous decline. This is in stark contrast to the historical trend since 1995. In 2022, the shipment volume dropped sharply by 16.5% compared to the previous year. Preliminary results indicate that the shipment volume in 2023 further shrank by 13.9% compared to the previous year. This unprecedented downturn in the industry's history reflects the significant increase in PC purchases driven by the COVID-19 pandemic.

Vice President of the group responsible for IDC mobile and consumer device tracking, Ryan Reith, stated: "In the main technology category, the personal computer market has undoubtedly been like the biggest roller coaster ride in the past four years.” "Although the market shipment volume declined again in 2023, there are still many positive trends for the future of PCs. Although artificial intelligence has clearly captured everyone's attention, it should not be overlooked that 2024 is expected to be a strong year for PCs. The updates of commercial PCs and the advancements of gaming PCs continue to drive excitement in the market.

The top companies in the industry have remained largely unchanged. Like the overall market, they are also experiencing unusual quarterly growth fluctuations. Starting in 2024, brands that are better positioned in the commercial field may feel more confident, while technological advances should create opportunities for commercial and consumer suppliers.

It is worth mentioning that after bottoming out at the end of 2022, Bitcoin has been in a good upward trend. In addition to its own technical correction to the last round of sharp declines, the market has broken through the key psychological resistance of investors, and the macro environment has also improved. For example, the approval of Bitcoin ETFs and the Bitcoin halving in mid-April 2024 have

strengthened market sentiment. Especially since the beginning of 2024, Bitcoin has continued to surge. Thereof from the low point to the breakthrough of 70 thousand, it has completed an increase of more than 400%. Also, it drove the Ethereum, the second largest market value, to rise simultaneously. As cryptocurrency prices rise again, it is worth watching whether it will drive a mining boom.

In order to stimulate sales, card manufacturers have launched new products such as e-sports laptops, e-sports desktops, graphics cards and motherboards in the first quarter to enter the e-sports game market and to boost performance. In addition, the demand for AI servers continues to surge, and companies have expanded shipments of related products, which has also driven up performance.

(2) Current State and Development of the AI Industry

TrendForce said that from 2023 to 2024, North American CSPs such as Microsoft, Google, AWS, etc. have still been the main export destination for high-end AI servers (including those equipped with NVIDIA, AMD or other high-end ASIC chips). The shipment proportions of high-end AI servers in 2024 are estimated to be 24.0%, 18.6% and 16.3%, respectively. However, it is estimated that Chinese CSP players ByteDance, Baidu, Alibaba and Tencent (BBAT) account for approximately 6.3% of high-end AI server shipments in 2023. If the existing ban or subsequent risks are taken into account, the proportion may be less than 4% in 2024.

Due to the potential risk that the ban may expand restrictions, TrendForce believes that Chinese players will continue to purchase off-the-shelf AI chips in the short term. However, NVIDIA GPU AI acceleration chips are still its priority. In addition to using the existing A800 or H800 inventory, special versions of H20, L20 and L2 developed for the Chinese market due to the ban will also be actively introduced. However, in the long term, Chinese CSPs will accelerate their investment in selfdeveloped ASIC chips. It is estimated that in 2024, Alibaba's T-Head and Baidu will be the most actively involved in the development of self-developed AI chips, which will be mainly produced by OEMs such as TSMC and Samsung.

Meanwhile, China's larger local AI technology players, such as Huawei and Biren, will continue to develop general-purpose AI chips to provide AI solutions to local Chinese players. Besides, in addition to the development of AI chips, the abovementioned Chinese companies also aim to build a local AI server ecological chain in China as their primary goal in the future. TrendForce believes that one of the keys to successful development is that the Chinese government must provide policy support, such as regulating that Chinese telecom operators and other relevant bids must use China's own AI chips.

While striving to break through ban restrictions, China considers different aspects of market demand. The U.S. government ban will not fully cover the mid-to-lowend edge AI server market that requires lower AI computing performance, such as enterprise ChatBOT, video streaming or Internet platforms, and automotive assisted driving systems. These have the opportunity to become one of the development directions for Chinese industry players to develop the AI market in the future.

IDC believes that AI deployment in the terminal market is gradually expanding from the cloud to the device side, as terminal computing power increases and AI

acceleration engines are gradually integrated on processors. Wang Jiping, vice president of IDC China, pointed out that AI PC integrates a hybrid AI computing power unit in the hardware. Moreover, it can run the "personal large model" locally, create a personalized local knowledge base, and realize personalized natural interaction. It not only assumes the original functions of productivity tool and content consumption carrier, but also has been upgraded from tool attribute to assistant attribute in function. It becomes a personal second brain and a personal AI assistant that is like a twin to the user.

According to the summary by Wang, Chi-Ping, a truly meaningful AI PC product should have five key features:

⚫ Personal intelligence entity interacting with natural language: A personal intelligent system based on local large models for interacting with multimodal natural language UI.
⚫ Embedded personal large model: A large-scale personalized local knowledge base with a focus on local content and cloud support at the periphery.
⚫ Standard local hybrid AI computing power: A computing architecture that combines CPU with NPU & GPU locally, enabling collaborative computing with personal terminals, home consoles, and enterprise edge servers.
⚫ Open AI application ecosystem: AI native applications and AI empowered applications can be scheduled and adapted by intelligent body tasks for hybrid AI computing platforms, etc.
⚫ Protection of equipment-level personal data and privacy: Cloud-based large models for local privacy inference and non-sensitive task invocation. Protection of personal data through hardware-level security chips and encryption and de-identification of data transmission.

Ablikim Ablimit, Vice President at Lenovo Group and Vice President for Strategy and Business Development China , also expressed at the forum that the hybrid deployment of public large models and personal large models to meet user needs is increasingly becoming an industry consensus. Hybrid artificial intelligence is increasingly becoming a development trend for future AI to better and more personalized services for everyone.

IDC recently released the 2024 V1 edition of "IDC Worldwide AI and Generative AI Spending Guide". According to IDC data, the total global investment in artificial intelligence (AI) in IT in 2022 was USD132.49 billion. It is expected to increase to USD512.42 billion in 2027, with a compound annual growth rate (CAGR) of 31.1%. Regarding Generative AI, it is expected that, by 2027, 45% of enterprises will have mastered and utilized Generative AI to collaboratively develop digital products and services, leading to a doubling of revenue growth compared to competitors. IDC predicts that the compound annual growth rate of the global generative AI market could reach 85.7%. By 2027, the size of the global generative AI market is expected to be close to USD150 billion.

Regarding artificial intelligence spending, China will continue to lead the development of the AI market in the Asia-Pacific region, accounting for 50% of the

total AI spending in the region. It is expected that, by 2027, the total investment in AI in China will exceed USD40 billion, with a compound annual growth rate of 25.6%. China is committed to promoting the progress and development of artificial intelligence, gradually becoming a global powerhouse in artificial intelligence.

Insights into the Generative AI Market at China

IDC data shows that, in 2022, China's generative AI accounts for 4.6% of the total investment in the AI market. With the rapid development of generative AI technology, the investment proportion of generative AI is expected to reach 33.0% in 2027. The investment scale will exceed USD13 billion, with a five-year compound annual growth rate (CAGR) of 86.2%. IDC believes that generative AI will become a key technology for advancing automation. It can have an impact on general productivity, business-specific functions, or industry-specific tasks. For example, employees in a company can use generative AI to summarize reports, generate job descriptions, optimize work tasks, or acquire knowledge about a specific topic. Software developers can use the rich tools of generative AI to accelerate the development workflow and change the development experience.

Insights on Artificial Intelligence Industry

Industry users are also actively exploring and creating application scenarios for generative AI, developing digital products and services, uncovering the value of data elements, and exploring intelligent business models. According to IDC data, the top three industries with the highest investment in artificial intelligence are Software and Information Services, Banking, and Telecommunications, accounting for 23.8%, 9.7%, and 9.4%, respectively. According to an IDC survey, nearly half (43%) of the organizations surveyed are currently exploring potential use cases for generative AI. Thereof 55% of financial institutions and telecommunications companies invested in generative AI technology in 2023. Artificial intelligence and generative AI technologies are helping the financial and telecommunications industries, including enhancing their anti-crime and monitoring capabilities, providing personalized investment advice, and reducing manual operating costs.

Insights into Artificial Intelligence Applications

AI Infrastructure Provisioning is the largest application scenario in the AI market. It includes providing access rights to the infrastructure for users from infrastructure service providers for investment. It means that infrastructure service providers grant users access rights to this infrastructure. It provides the resources needed for AI system development, or provides AI services to end customers.

The second largest application scenario in terms of market size is Augmented Customer Service Agents. It focuses on enhancing customer experience through real-time query resolution, efficient responses, and personalized tailored recommendations.

"Sales Process Recommendation and Augmentation" is the third leading application

scenario. It uses AI-driven algorithms to analyze customer behavior and historical data. The sales team is provided with real-time insights so that they can make datadriven decisions, increase customer engagement, and complete transactions more effectively.

Chinese enterprise analyst at IDC, Qian Jing, stated that in recent years, the hot topic of generative AI has been continuously growing. This technology is accelerating industrialization and specialization. The AI industry is expected to bring about a new round of explosive growth with the development and implementation of more generative AI technologies. In the future, the complexity and quality of generative AI models will continue to improve. The integration of Internet of Things and edge computing may enhance data collection and analysis capabilities. Meanwhile, data security and privacy protection are the core challenges faced by generative AI technology. Promoting the implementation of artificial intelligence in more scenarios, while ensuring the safety and compliance of AI applications, is also an area that requires significant attention.

(3) NVIDIA GTC 2024

The architecture of NVIDIA's new generation AI chip Blackwell will drive the upgrade of data centers and gaming GPU. Blackwell adopts TSMC's 3-nanometer process. The B100AI chip will also be designed with Multi-Chip Module (MCM) based on this. The GPU components are divided into separate chips, providing higher flexibility and significantly increasing computational power. In response to the increased computing power of the B100, the cooling technology will be upgraded from air cooling to liquid cooling. The power consumption of the B200GPU is also expected to reach 1000W by 2025.

In addition to the development of AI chips in data centers, there is also an opportunity for the hardware and software of edge computing to be updated. NVIDIA's Jetson series is an edge AI computing platform, including hardware such as Nano, TX2, Xavier NX, AGX Xavier, and the Isaac software platform. It simplifies the robot development process, accelerates from prototype design to actual deployment, and enables robots to interact with the surrounding environment. Currently, over 1.2 million developers and thousands of customers have chosen NVIDIA's edge computing solutions, such as AWS, Cisco, John Deere, Medtronic, PepsiCo, and Siemens. The development of this field is highly anticipated.

Due to the continuous development of generative AI applications, NVIDIA will release digital advertising WPP/NVIDIA engine, RTX Chat, SyncTwin support for industrial metaverse, OpenAI as Blender animation creation code, etc. The application ecosystem of generative AI will bring about many changes. Therefore, NVIDIA has also invested in many AI ecosystem startups to solidify its market position in generative AI.

Furthermore, regarding the sharing speeches on the applications of various industries at the conference, Kimberly Powell, Vice President of Healthcare and Life Sciences at NVIDIA, named the speech with "Under the Empowerment of Generative AI, the Healthcare Industry Will Become One of the Largest Technology

Industries," which explores the new era of healthcare driven by generative AI and accelerated computing.

Correlation among upstream, midstream, and downstream of the industry Motherboard and display cards:

Semicon	Special application IC	Motherboard	System integrators
	CPU Static memory	Monitor
	Logic clip Programmable read	Interface Cards
	only memory
	Diode	Power supply	End users


	Printed circuit	Case
Metal and	board
plastic component	Stand Connector	Keyboard	Distributor
		Soft and hard
		drives
Software	Drive program basic output and	Other input devices	Franchiser

Product development trends and competition status
(1) In 2023, the global shipment volume of gaming PCs encountered the same fate as the overall PC market. The annual shipment volume of gaming PCs decreased by 13.2% to 44 million units. However, according to the latest “Worldwide Quarterly Gaming Tracker" research by IDC, gaming monitors have been able to defy the trend and increase in sales. The lower prices have helped drive sales, leading to a 20.3% growth in gaming monitor sales in 2023. IDC predicts that the eSports PC market will experience a slight growth of 1% in 2024, with laptops being the main driving force. The gaming monitor market will continue to grow, reaching 22.2 million units by 2024, with a growth rate of 13.6%. IDC research manager, Jitesh Ubrani, said: "Although the global economy is still struggling, the shipment volume of gaming PCs has been relatively active due to the continuous increase in demand. The key point is that the high-end market has remained strong due to the influence of highend buyers who are less affected by the economy. Furthermore, it is expected to continue growing in the coming years, leading to a rising trend in prices.” IDC research manager, Jay Chou, stated: "After experiencing a decline in 2022, the

shipment of gaming monitors has shown a significant recovery. An essential and cost-effective part of the PC gaming experience is a gaming monitor priced at around USD300. The continuously decreasing prices and ongoing innovations have led to widespread adoption of specifications, including refresh rates exceeding 165Hz, response times of 1 millisecond or shorter, and higher resolutions (1440P or higher), etc. Given these improvements, it is expected that gaming monitors will continue to outpace the growth of gaming PCs.”

(2) In 2023, GPU revenue is expected to be double that of CPU revenue. Looking ahead to 2024, suppliers are increasing inventory in anticipation of a healthier demand for servers. The market for various categories including CPU, DDR5, HBM, and NIC will fully recover, with strong double-digit growth in revenue from AI accelerators.
(3) NVIDIA's recent overall revenue source is mainly from its data center business. Among them, the share of PU servers in the overall AI market reaches as high as 60% to 70%. However, three major situations need to be noted in the future, which may limit NVIDIA's development.
A. Due to the restrictions imposed by the United States, the Chinese government will further focus on the localization of AI chips. Furthermore, Huawei is still regarded as a respected competitor by NVIDIA. However, in response to the ban, NVIDIA's launch of special Chinese regulations such as H20 may not offer as good value for money as existing models like A800 or H800. Chinese customers have been more conservative in their adoption, further impacting NVIDIA's market share.
B. In consideration of scale and cost, in addition to Google and AWS, major American CSP companies such as Microsoft and Meta are also increasingly expanding the use of their self-developed ASICs each year.
C. Competition in the same industry comes from AMD due to AMD's high costperformance strategy. Compared to similar products from NVIDIA, AMD offers prices that are only sixty to seventy percent of the price, allowing even representative or large customers to enter the market with a lower price strategy. It is expected that, in 2024, Microsoft will be the most active adopter of AMD's high-end GPU MI300 solution.

(III) Technology and Research Overview

R&D expenses input and successfully developed technologies or products from the most recent year up to the publication date of the annual report:

Unit: NT$ thousands

Year	Research Project	Results	Expenditure
2023	Display cards Motherboard AI servers and System integration	Development of NVIDIA Ada Lovelace high-end chipset Develop graphics card heat dissipation solution in advance for NVIDIA's next-generation chips Develop iGame series high-end game motherboard, using the latest Intel 700 series high-end chipset. Implementation of Edge Server Applications Landing	135,101
Q1 2024	Display cards Motherboard AI servers and System integration	The NVIDIA third-generation RTX architecture Ada Lovelace is adopted, and the RTX 40 SUPER series is officially launched. Products of Intel W790 series high-end chips release completed. For customers with computer vision AI core technology AI server with drone inspection system	40,139

(IV) Short-/long-term business development plans
Short-term development plans
- (1) Continue to work closely with major customers to expand the economic scale, maintain market share and reduce production costs with the economic scale.
- (2) Maintain a sound financial structure and a good corporate profile.
- (3) Continue to expand customer base and maintain and develop sales channels.
Long-term development plans
- (1) Continuously maintain the release of the latest original chip products and develop products matching new chips of manufacturers
- (2) Continue to improve product quality, reduce costs, and strengthen competitiveness.
- (3) Look forward into the intelligent technology wave and build a completely autonomous the AI industry ecology to become a key resource integrator and service provider.

II. Market, Production, and Sales Overview

(I) Main Products and Sales Regions
Main Products
- (1) Display cards
- (2) Motherboard
- (3) AI server and system integration
- (4) High-performance data computing solutions

2. Sales regions

Unit: NT$ thousands

					Unit: NT$thousands	Unit: NT$thousands
Item	2021		2022		2023
	Sub-total	Total	Sub-total	Total	Sub-total	Total
Domestic sales revenue	13,991	13,991	9,260	9,260	1,593	1,593
Foreign sales revenue	-	6,504,073	-	6,189,414	-	6,821,806
Mega	-	-	-	-	-	-
Asia Pacific Region	6,504,073	-	6,189,414	-	6,821,806	-
Europe	-	-	-	-	-	-
Total		6,518,064		6,198,674	-	6,823,399

Market share

As the motherboard and display cards fall into professional OEM businesses, there is no independent brand, so it is not applicable to the calculation of the market share.

Future supply and demand of the market and its growth
(1) Preliminary statistics from the international consulting firm Gartner show that the global shipment of personal computers (PCs) in the fourth quarter of 2023 is 63.3 million units, a 0.3% increase from the fourth quarter of 2022. This growth marks the first increase after eight consecutive quarters of decline. In 2023, the annual PC shipment volume was 241.8 million units, a decrease of 14.8% compared to 2022. This is the first time the market has fallen below 250 million units since 2006 (230 million units). Gartner's research director Mikako Kitagawastated: “The PC market has hit bottom after a significant adjustment. The inventory issue that has plagued the industry for two years has returned to normal in the fourth quarter of 2023. The slight increase shown this time indicates that supply and demand have finally reached a balance. However, this situation is likely to change due to the expected increase in component prices in 2024, as well as geopolitical and economic uncertainties. In view of this, Gartner predicts that the PC market will resume annual growth in 2024.” In the fourth quarter of 2023, the Asia-Pacific region continued to decline due to the impact of China's poor performance; while Europe, the Middle East, Africa, and North America achieved year-on-year growth and led globally. The PC market in Europe, the Middle East, and Africa saw the largest growth, reaching 8.7%. This is also the first time in the region to achieve growth compared to the same period since the fourth quarter of 2021. Kitagawa said: "European, Middle Eastern, and African markets reflect that the inventory levels of the entire market have finally been brought under control. However, channel partners still maintain a cautious attitude towards the increase in new inventory, especially with the significant rise in holding costs for current inventory. The Asia-Pacific region has decreased by 8% and has seen a continuous decline for seven consecutive quarters. Both laptops and

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desktop computers in that area are experiencing a decline, with desktop computers being more affected than laptops. The significant decline in the Greater China region has impacted the entire Asia-Pacific market, showing a double-digit decrease compared to the same period last year. The mature Asia-Pacific region has experienced a slight decline, while the emerging Asia-Pacific region has achieved single-digit growth.

(2) Due to factors such as supply chain and politics, the computing power gap faced by the Chinese market has brought new opportunities for the development of domestic chips. Domestic AI chip manufacturers in China are currently experiencing rapid growth and have achieved significant accomplishments, attracting a large amount of investment and attention. These enterprises have certain strength and competitive advantages in AI chip design, algorithm optimization, production manufacturing, and other aspects. In addition, the policy support from the Chinese government has played an important role in driving forward. In 2024, the Chinese government is committed to the digital transformation of industries. Artificial intelligence will be widely applied in complex scenarios to provide better solutions, such as the metaverse, urban governance, industrial manufacturing, and agricultural production. These large models have attracted widespread attention, while also demanding greater computational power for training AI servers. Chinese enterprises especially recognize the value brought by generative artificial intelligence in various dimensions, including accelerating decision-making, improving efficiency, optimizing user and employee experiences, etc., and will continue to increase investment in this area over the next three years.
(3) According to the "China Semi-Annual Accelerated Computing Market (2023 Full Year) Tracking" report released by IDC, the size of the accelerated server market in China reached USD9.4 billion in 2023, a 104% increase compared to 2022. Thereof, GPU servers still dominate the market with a market share of up to 92%, reaching USD8.7 billion. Meanwhile, non-GPU accelerated servers such as NPU, ASIC, and FPGA also showed strong growth momentum. With a year-on-year growth of 49%, their market share is close to 8%, exceeding UDS700 million. IDC China AI infrastructure analyst, Du Yunlong, believes that the current technical level of China's local chip manufacturers is still relatively lagging behind the international advanced level, and the ecological construction is also not perfect. However, the supply and demand relationship in the chip field is also gradually changing. Many companies have shifted from "international procurement" to "local procurement" or "self-development and self-use", creating favorable conditions for the development of China's local chip companies. Therefore, the development environment of the chip industry should continue to be optimized to continuously promote the development of design, packaging and other links, and build a sound and complete industrial chain. The barriers between industry applications, chip R&D, system development, and university research should be broken through to form crossenterprise, cross-field, and cross-industry cooperation. Furthermore, the alldimensional development of the chip industry is promoted.

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Competition Niches
(1) The R&D team that is in closer contact with the market

In response to the national information innovation strategy and accelerating the localization process, subsidiary Sitonholy launched the Huasi series of products to expand the product ecology. It provides domestic computing power, domestic GPU servers, system integration, product customization and overall solutions. Through systematic products and services, a localized information technology ecosystem is helped to be built. As an ecological partner such as Shengteng APN, Haiguang, and Feiteng, Sitonholy will give full play to its own technology and industrial chain advantages and break through upstream and downstream information barriers. Efficient collaboration of industrial chain resources is realized, promoting the development of new technologies, new industries, and new business formats. The localized information technology system can be produced, available, controllable and secure.

==> picture [434 x 475] intentionally omitted <==

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In addition, given that motherboards are the technical core of various solutions, CHAINTECH established a high-end motherboard R&D center in 2022. In addition, a new power supply design team has been added in 2024 to provide stable performance for power supply designs such as servers and workstations. The power supply plays a key role in the supply and conversion of power to terminal equipment. The development of products and technologies has attracted much attention. Verification setup also has extremely high requirements. By establishing a professional team, we can maintain our leading position in technology.

(2) Professional management team

CHAINTECH's operating team has accumulated rich technologies and experience for many years. The management belongs to the seniors in the industry who have armed with the relevant knowledge of key technologies of the product, so the changes in the overall market can be fully mastered. For professional talents, the elite system has been adopted to reduce the management, sales, and research fees to maintain a sound operation structure.

(3) Competitive business mode

CHAINTECH has conducted marketing of products developed and produced by Chaintech in many countries through the business sales platforms of major customers. In the market of China Mainland, it has cooperated with operation platforms and image centers in Shenyang, Beijing, Nanjing, Xi’an, Chengdu, Wuhan, Guangzhou, Shenzhen. At the same time, it has also opened up the international business: South Korea marketing center in Seoul is mainly responsible for the South Korean market; the sales center in Hamburg of Germany is mainly responsible for the entire European market. It also has offices in Jakarta, Indonesia, Mumbai, India, and Phnom Penh, Cambodia. With the changing global market, the Company has created many channels and modes to enhance the visibility of products in different markets and expand the product sales regions through the marketing channels of cooperation partners.

Favorable and Unfavorable Factors of Development Prospect and Countermeasures
(1) Advantages:

E-sports laptops are becoming more casual and become key entertainment items for the public. During the PC recession in the past two years, e-sports sales were relatively supportive, with shipments remaining flat to slightly growing year-onyear. The current penetration rate of e-sports laptops is still low at 15%. However, AIGC can provide game developers with more choices and references by generating diversified game content and gameplay. Improve the quality and appeal of the game, and you can expect future shipments. 2024 is the time for NVIDIA to undergo a major refresh every two years. It is estimated that the launch of the RTX50 series will fall in the fourth quarter. With the new architecture, new technology, and increased memory capacity, the performance will be 50% to 100% higher than that of the 40 series. Price increases of 0% to 10% will help stimulate consumer demand.

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CHAINTECH has expanded its cooperation from product aspects to channel management strategies through the cooperation with strategic partner COLORFUL GROUP LIMITED. The "COLORFUL" platform strategic system has developed in China Mainland for many years. At present, it has been ranked the first for 20 consecutive years in the Chinese market of display cards, with a market share of more than 27%, 300 core distribution channels, 3,000 direct and indirect channel partners, covering 660 cities, and over 5,000 retail stores. The great advantage of product sales network makes CHAINTECH's products keep grow steadily in the main consumer market - China Mainland.

In terms of new businesses, it has cooperated with Sitonholy (Tienjin) to develop high-performance data computing software and hardware solutions and integrate services, thus carrying out the layout in the 100 billion-level AI infrastructure service market in China. Sitonholy (Tienjin) devotes itself to provision of software and hardware solutions to in-depth learning, GPU high-performance computing, virtualization and storage in the AI area. In recent years, it has provided highperformance computing and in-depth learning products and solutions for thousands of education and research institutions and AI customers, with the service points covering East, South, Central, Northwest, and Southwest China. Meanwhile, its possesses rich experience in channel operation and international resources integration, hence contributing to the Company's entry into the AI industrial ecology and market channel of CHAINTECH's key market, China Mainland market.

(2) Disadvantages

The panel industry has been maturing and stabilizing, and with matured design and manufacturing comes intensive competition. The biggest challenge currently facing board card manufacturers is whether they can focus on enterprise application needs such as networking, industry, medical care, finance and commercial transportation in response to the business cycle of weakening end market demand.

In terms of the new businesses, the AI hardware producers and distributors in the key market China Mainland have actively transformed to enter into the AI software and hardware solutions and products market, hence making the competition more intensive, so continuous input of R&D resources must be maintained to raise the competition threshold.

Countermeasures:

A. CHAINTECH's product manufacturing adopts the outsourcing method, so there is no need to solicit more orders by cutting down price for the purpose of maintaining the capacity utilization rate.
B. Strengthen inventory cost management to lower operation risk.
C. Set clear product orientation to conform to the niche market.
D. Expand the product channel share, including sales channels for ecommerce platforms and online franchises.
E. Product design in closer contact with the market
F. Actively obtain stable supply of chips and key components, sign long-term contracts with suppliers to lock in production capacity, to maintain stable sales

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and profit.

  - G. Continue to invest in high-performance computing solutions and services with high added value.

(II) Major applications and production process of the primary products
Major uses of the primary products

The main products of CHAINTECH in 2023 can be classified into three categories: graphics card, motherboard and AI server. The three important applications are described as follows.

(1) The panel and display cards are one of the main components for the following computer systems:
A. PC, usage: Clerical processing, briefing system, graphic design and drawing, spreadsheet, multi-media
B. Computer workstation, use: Engineering design, financial information, image processing and editing, desk top publishing
C. Server, use: Video servers, internet servers, file servers, database servers
D. Multi-user and multi-tasking computer system mainframe
E. Computer-aided design CAD system and computer auxiliary manufacturing CAM system
(2) AI servers

AI server mainly refers to the server that adopts the heterogeneous form, mainly in rack type. In the heterogeneous mode, it can be CPU+GPU, CPU+FPGA, CPU+TPU, CPU+ASIC or CPU+ multiple acceleration cards. Although AI server can adopt a variety of heterogeneous forms, CPU+GPU is widely used at present. Therefore, when the industry talks about AI server, it is often regarded as GPU server. With the extensive technical applications of cloud computing, big data, AI, and IoT, the relevant data has grown exponentially in recent years. IDC data statistics show that 90% of data all over the world are produced in recent years, which imposes challenges to the processing power of CPUs. On the other hand, the physical technology and the number of cores of CPUs are approaching the limit, but the amount of data will not stop increasing, so the processing capacity of servers must be improved. Therefore, in the era of AI, traditional servers with only CPU serving as the computing power provider can no longer meet the demand.

Different from CPUs, GPUs adopt parallel computing mode and have thousands of cores on a single card. They are good at processing intensive computing applications, such as graphics rendering, computational vision and machine learning.

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2. Production processes of the main products

SMT FLOW CHART

==> picture [433 x 187] intentionally omitted <==

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

Solder paste High speed Multifunction
Solder side Loader Printing mounting mounting
Pass Pass
Sampling Visual
PQC sampling Visual ICTTe Hot air reflow inspection
inspection inspectio st
n
Fail
Reject
Rework Touch-up Repair
PTH assembly
----- End of picture text -----

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

DIP FLOW CHART
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----- Start of picture text -----

Components Manual Visual Wave Visual inspection
Pre-forming insertion inspection Soldering & Touch-up
Pass Pass
Functional CPU ICT Additional
test /Battery voltage Test Components
Fail Fail Fail
Memory
Pass Memory Repair
PQC Packing Stock
Sampling spection
PTH assembly
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(III) Supply of Major Raw Materials

Title	Suppliers	State of supply
Chip	NVIDIA	Stable
Electronic parts and components	HKLINK、Superway、GloryRich	Stable

(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:

(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:	(IV) The name, amount and ratio of customers accounting for more than 10% of the total sales for any of the last two years, and the reasons for changes in such figures:
Information on major suppliers in thepast twoyears Unit: NT$thousands
	2022				2023				As of Q1 2024
Item	Title	Amount	Percentage in the annual net purchases 〔%〕	Relations with the issuer	Title	Amount	Percentage in the annual net purchases 〔%〕	Relations with the issuer	Title	Amount	Percentage of net purchases as of the last quarter of the current year 〔%〕	Relations with the issuer
1	005505	1,399,310	25	－	005505	1,698,999	26	－	005505	332,657	30	－
2	005507	759,978	13	－	005507	791,377	12	－	005507	140,301	13	－
3	002886	265,164	5	－	002886	326,799	5	－	002886	70,712	6	－
4	Others	3,222,865	57	－	Others	3,708,973	57	－	Others	576,012	51	－
	Net purchases	5,647,317	100		Net purchases	6,526,148	100		Net purchases	1,119,682	100

Explanation of changes: Not applicable

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Major sales customers for the most recent two fiscal years

Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years	Major sales customers for the most recent two fiscal years
Materials unit: NT$thousands
Year	2022				2023				As of Q1 2024
Item	Title	Amount	Percentage of net sales in the year 〔%〕	Relations with the issuer	Title	Amount	Percentage of net sales in the year 〔%〕	Relations with the issuer	Title	Amount	Percentage of net sales as of the last quarter of the currentyear〔%〕	Relations with the issuer
1	COLORFUL	2,092,517	34	Related parties	COLORFUL	1,933,079	28	Related parties	COLORFUL	329,251	28	Related parties
	Others	4,106,157	66	－	Others	4,890,320	72	－	Others	846,681	72	－
	Net sales	6,198,674	100		Net sales	6,823,399	100		Net sales	1,175,932	100%

Explanation of changes: Not applicable

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(V) Production volume and value in the most recent two fiscal years

Unit: Pcs, NT$ thousands

				Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands
Year	2022			2023
Production volume and value Main Products	Production Capacity	Production Volume	Production Value	Production Capacity	Production Volume	Production Value
Computerperipherals	880,000	433,165	1,871,415	880,000	431,350	2,118,385
Total	880,000	433,165	1,871,415	880,000	431,350	2,118,385

(VI) Sales volume and value in the most recent two fiscal years

Unit: Pcs, NT$ thousands

					Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands	Unit: Pcs,NT$thousands
Year	2022				2023
Sales volume Main Products	Domestic Sales		Foreign Sales		Domestic Sales		Foreign Sales
	Volume	Value	Volume	Value	Volume	Value	Volume	Value
Computer peripherals	-	9,260	884,006	6,180,028	-	1,593	770,340	6,809,988
Others	-	-	-	9,386	-	-	-	11,818
Total	-	9,260	884,006	6,189,414	-	1,593	770,340	6,823,399

III. Number of Employees in the Last Two Years Up to the Printing of this Annual Report

Year	Year	2022	2023	As of March 31, 2024
Number of employees	Direct employees	0	0	0
	Indirect employees	19	44	59
	Total	19	44	59
Average Age		51.11	47.61	46.56
Average Year of Services		9.10	5.08	4.00
Education distribution ratio (%)	PhD	0	0	0
	Master	11	9	19
	University/Coll ege	79	86	78
	Senior High School	10	5	3
	Below Senior High School	0	0	0

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IV. Information on Environmental Protection Expenditure

(I) Loss and disposal caused by environmental pollution in the most recent year and as of the date of the annual report: None.
(II) Future countermeasures (including improvement measures) and possible expenditures (including the estimated amount of losses that may be incurred for the failure of adopting countermeasures, estimated amount for penalty and compensation; where there is no reasonable estimation, the facts thereof shall be explained): CHAINTECH outsources the production of its products and there had been no pollution to the environment. However, CHAINTECH still stringently requests the processing plants shall comply with relevant environmental laws and regulations to join hands in solving the environmental issues of scarcer energy on earth.

V. Labor relations

CHAINTECH always adheres to the belief of improving the care for employees, so that they can strive to make progress without any worries. It has formulated multiple welfare measures concerning vocation and retirement system, so employees have maintained high centripetal force and the labor relations have remained harmonious, without any disputes therefrom.

(I) Employee Benefit Plans, Continuing Education, Training, and Retirement Systems and the Status of Their Implementation, and the Status of Labor-management Agreements and Measures for Preserving Employees' Rights and Interests:
Employees' welfare measures
- (1) CHAINTECH has purchased national health insurance, labor insurance and group insurance for all the employees, and handles the payment for employees' childbirth, injury, health care, retirement, and death pursuant to Labor Insurance Act, National Health Care, Group Insurance and relevant rules and regulations in the Labor Standard Act.
- (2) CHAINTECH rewards employees for stock subscription to enhance employees' participation enthusiasm.
- (3) CHAINTECH has established an Employee Welfare Committee to promote employee welfare work, such as gifts at Spring Festival and holidays, allowance for weddings and funerals, celebration of employees' birthday, regular domestic and international travel activities.
- (4) Employees' health check-ups are conducted regularly.
CHAINTECH's system concerning advanced studies, educational training, and its implementation:

CHAINTECH's human resources department formulates education and training plans annually based on business development and employee needs.

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(1) Induction training: The HR Department is in charge of introducing the Company's organizational structure and system, work rules, and responsibilities; each staffing department shall explain the operating rules and procedures, and regularly assess and supervise new employees.
(2) External training: Participation in the professional courses offered by the corporate management consulting companies, education, and training institutions, and government agencies.
(3) Internal training: Senior or learned employees or professional lecturers are invited to impart their experience and professional knowledge.
(4) Departmental training: The professional training courses organized by each department.

In 2023, CHAINTECH held internal and external education and training related to ethical management (including ESG, ethical management related law compliance, food fire safety and hygiene management, accounting system, corporate governance and internal control and other related courses) for 76 person-times with total 132 hours.

Implementation of retirement system

CHAINTECH has established retirement regulations for the employees with formal employment. The retirement conditions, pension benefits and calculation methods are handled in accordance with the Labor Standard Act, Labor Pension Act, and relevant laws and regulations.

The new pension system in the "Labor Pension Act" is a defined contribution plan. As for the pension payment, CHAINTECH allocates no less than 6% of the monthly salary of employees as pension to be deposited into the individual retirement fund account managed by Labor Insurance Bureau.

The old pension system in the Labor Standard Act is a defined benefit plan. Upon approval of the retirement, two bases for the annual salary shall be paid every one year; however, if the job tenure is over fifteen years, one base shall be paid every one year, but the total shall not exceed 45 bases. The payment of pension is calculated through multiplying the above base standard with the average monthly salary six months before retirement.

Labor relations

The realization of corporate business objectives is dependent upon the committed devotion and hard work of the employees. Therefore, labor relations have always been the focus of CHAINTECH's efforts. CHAINTECH has always adhered to the philosophy of respect for humanity and care for employees and adopts an open, candid, and honest attitude towards employees in terms of various salary and welfare policies. Since its establishment, CHAINTECH has established harmonious labor relations, without any disputes arising therefrom.

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Code of ethical conducts for employees

CHAINTECH has established the Code of Ethical Management and the Code of Ethical Conducts for Employees. All Chaintech employees, whether inside or outside the Company, are required to maintain a high level of personal behavior and professional ethics. CHAINTECH's employees shall clearly understand and abide by the following principles:

(1) Avoid any possible conflict between personal interests and the interests of the Company or possible impact.
(2) Do not use the properties, information or position of the Company for personal gain.
(3) The confidential and commercially sensitive information obtained in the course of business shall be kept confidential.
(4) Do not engage in business dealings with dishonest suppliers, customers or businesses.
(5) Suppliers, contractors, customers, and other persons related to the business of the Company must maintain the highest standards of professional ethics. It is prohibited to offer or accept improper benefits or give any gift, money or entertainment that may affect the normal business relationship and judgment. Bribery of any form shall be strictly prohibited.
Protective measures for work environment and employees' personal safety

The software and hardware facilities of CHAINTECH's office environment are designed with protecting the safety of employees as the first consideration, so as to ensure that employees can get the maximum protection at work. The Company has set up access card devices at each entrance to protect the personal safety of employees. Perform fire equipment maintenance at least once a year to ensure that all alarm systems, smoke exhaust, and fire suppression facilities are functioning properly. for electromechanical or fire equipment (such as fire alarms or fire extinguishers) to ensure that they can function well at all times. In addition, CHAINTECH annually organizes health check-ups and carries out fire drills as scheduled by the building management committee so that employees are well informed about their physical conditions and know the correct responses at the time of emergencies. CHAINTECH also provides employees with group insurance to increase their protection at work.

Gender Equality and Diversity Friendly Workplace

The Company is committed to providing employees with a dignified and safe working environment. We implement employment diversity, fairness in remuneration and promotion opportunities, and ensure that employees will not suffer discrimination, harassment or unequal treatment based on race, gender, religious beliefs, age, political affiliation and any other status protected by applicable laws and regulations. For grassroot employees of the same position, all employees will receive the same treatment. In

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addition, for personnel with relevant majors and work experience, their treatment shall be determined based on the academic experience, expertise, certificates, etc. of the admitted candidates, without any distinction based on gender or ethnic group.

Under the concept of diversity and equality in the workplace, the Company's female employees account for 36.36%, and female supervisors account for 30% of all supervisors in 2023. In terms of taking care of female employees and allowing them to develop their fullest potential, the Company looks forward to creating a "gender-friendly workplace" where female employees can truly feel comfortable and healthy in the workplace.

(II) Explain the losses incurred to CHAINTECH for labor disputes in the most recent two years as of the published date of the statements, and the current and future possible estimated amounts and the countermeasures:
Since its establishment on November 17, 1986, CHAINTECH has developed harmonious labor relations and communication channels. The Company attaches great importance to the opinions of employees and their demands and is committed to offering the best assistance for them. Therefore, there has been no major labor disputes since establishment. Looking forward to the future, with favorable labor interaction, the possibility of losses incurred by labor disputes is extremely low.

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VI. Information security

(I) The framework for managing information security risks: information security policies, specific management plans and resources allocated to Information security, etc.:
Framework for managing information security risks:

The Information Security Committee was established to supervise the operation of the Company's information security management system and maintenance operations. The general manager serves as the chairman of the committee, as the Company's commitment to promoting information security. The Information Security Specific Department) was established, and the information security supervisor was assigned as the SecretaryGeneral to coordinate information security matters. The "Information Security Policy" is established as a management basis to protect the Company's employees, customers, suppliers and operations-related information security, and ensure the sustainable operation of the Company. The organizational structure of the Company Information Security Committee is as follows:

==> picture [331 x 175] intentionally omitted <==

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

Information
security Committee
Information
security Committee
Information Internal Audit
Security Team Team
----- End of picture text -----

Policy of Information security: In consideration of the company operation objectives, perform information security risk assessment, formulate information security policies, determine the information security requirements, and implement appropriate and adequate information security measures accordingly, so as to be followed by all employees to ensure the security of the Company's information collection, processing, transmission, storage and distribution. the Company is committed to information security management to ensure the confidentiality, integrity and availability of the company's important information assets. In addition, the requirements of relevant laws and regulations are met, thereby gaining the trust of customers, achieving the commitment to shareholders, and ensuring the continued operation of the Company's important businesses.

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Specific management plans: Completely standardized and clear operating procedures have been formulated to institutionalize information security management. Risk assessments are performed regularly to identify high-risk items and invest appropriate resources to reduce or transfer risks. The use of various tools and technologies is utilized to achieve timely and effective identification, protection, detection, response and recovery of information system data. An information security abnormal incident response and recovery operation process has been established to quickly isolate information security incidents, eliminate threats, and reduce the scope and degree of impact. Internal and external audits are performed regularly every year to review the entire IT system to ensure compliance with IT security policies. The latest information security information and technologies are constantly being paid attention to enhance defense or management techniques in order to effectively block new types of information security threats and reduce operational risks.
Resources allocated to Information security: In order to implement information security, the Company continues to increase information security-related manpower deployment and investment in software and hardware related to the information security protection structure. At present, the Company has established the Information Security Specific Department), equipped with an information security director and an information security engineer. In addition, the software and hardware expenses related to investment information security in 2023 was approximately NT$3.85 million. These show that the Company attaches great importance to information security.
(II) Audit and review of information security:
The information security audit business shall be handled by the specialized unit according to the Company’s information security management regulations and information security audit plan, and the audit report shall be made to report the implementation effect.
As of the date of the annual report, there have been no major security incidents affecting CHAINTECH's operations in the most recent year.

VII. Material Contracts:

Nature	Related Parties	Main Content	Restrictive Provisions	Contract Start/ End Date
Property Leases	Prosperity Dielectrics Co., Ltd.	Office Leases	None.	2024.01.01~2028.12.31
Property Leases	Sun Plaza International Co., Ltd.	Office Leases	None.	2022.03.01-2025.02.28

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Chapter 6. Financial Information

I. Condensed balance sheet and statement of comprehensive income of the most recent five years
(I) Condensed Consolidated and Parent Company Only Balance Sheets
1. Consolidated Condensed Balance Sheet

						Unit: NT$thousands	Unit: NT$thousands
Year Item		2019	2020	2021	2022	2023	As of March 31,2023
Current assets		1,970,057	2,320,135	2,902,127	2,743,209	3,125,777	3,166,247
Property, Plant, and Equipment(Note 2)		62,003	34,723	23,158	20,490	18,423	18,425
Funds and Investment		137,045	319,723	200,485	142,383	227,325	253,250
Intangible assets		188,971	180,171	168,525	181,275	177,239	179,616
Other assets		23,539	56,794	107,045	118,965	112,367	126,233
Total assets		2,381,615	2,911,546	3,401,340	3,206,322	3,661,131	3,725,346
Current liabilities	Before distribution	650,766	960,411	1,315,737	875,750	1,088,984	1,089,427
	After distribution	680,122	1,008,661	1,373,636	961,005	(Note 1)	(Note 1)
Non-current liabilities		10,606	17,467	28,542	23,521	51,330	3,725,346
Total Liabilities	Before distribution	661,372	977,878	1,344,279	899,271	1,140,314	1,140,090
	After distribution	690,322	1,026,128	1,402,078	984,526	(Note 1)	(Note 1)
Equity attributable to owners of theparent		1,552,047	1,724,317	1,808,744	2,021,193	2,178,452	2,249,174
Share capital		1,014,988	1,014,988	1,014,988	964,988	964,988	964,988
Capital surplus		-	100	100	100	100	100
Retained earnings	Before distribution	786,346	900,677	974,651	1,135,378	1,220,080	1,252,418
	After distribution	757,396	852,427	916,752	1,058,179	(Note 1)	(Note 1)
Other equity interest		(97,541)	(39,702)	(29,249)	(79,273)	(6,716)	31,668
Treasury shares		(151,746)	(151,746)	(151,746)	-	-	-
Non-controlling interests		168,196	209,351	248,317	285,858	342,365	336,082
Total shareholder equity	Before distribution	1,720,243	1,933,668	2,057,061	2,307,051	3,661,131	2,585,256
	After distribution	1,691,293	1,885,418	1,999,162	2,229,852	(Note 1)	(Note 1)

Note 1: The proposal of 2023 earnings distribution plan has not been resolved by the shareholders' meeting. Note 2: Asset revaluation has not been performed for each year.

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2. Parent Company Only Condensed Balance Sheet

Unit: NT$ thousands

Year Item	Year Item	2019	2020	2021	2022	2023	As of March 31, 2024
Current assets		1,412,661	1,537,656	1,682,849	1,445,132	1,598,886	Since the first quarter is the time to issue the consolidated review report, it is not applicable.
Property, Plant, and Equipment(Note 2)		55,272	32,489	9,590	8,995	8,216
Funds and Investment		609,394	838,275	758,325	752,940	900,440
Intangible assets		-	-	-	2,222	4,208
Other assets		9,413	39,854	54,085	75,568	79,839
Total assets		2,086,740	2,448,274	2,504,849	2,284,857	2,591,589
Current liabilities	Before distribution	534,693	720,822	694,514	254,348	370,251
	After distribution	563,643	769,072	752,413	339,573	(Note 1)
Non-current liabilities		-	3,135	1,591	9,316	42,886
Total Liabilities	Before distribution	534,693	723,957	696,105	263,664	413,137
	After distribution	563,643	772,207	754,004	348,889	(Note 1)
Equity attributable to owners of theparent		1,552,047	1,724,317	1,808,744	2,021,193	2,178,452
Share capital		1,014,988	1,014,988	1,014,988	964,988	964,988
Capital surplus		-	100	100	100	100
Retained earnings	Before distribution	786,346	900,677	974,651	1,135,378	1,220,080
	After distribution	757,396	852,427	916,752	1,058,179	(Note 1)
Other equity interest		(97,541)	(39,702)	(29,249)	(79,273)	(6,716)
Treasury shares		(151,746)	(151,746)	(151,746)	-	-
Non-controlling interests		-		-	-	-
Total shareholde r equity	Before distribution	1,552,047	1,724,317	1,808,744	2,021,193	2,591,589
	After distribution	1,523,097	1,676,067	1,750,845	1,943,994	(Note 1)

Note 1: The proposal of 2023 earnings distribution plan has not been resolved by the shareholders' meeting. Note 2: Asset revaluation has not been performed for each year.

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(II) Condensed Consolidated and Parent Company Only Statements of Comprehensive Income

Consolidated Condensed Statements of Comprehensive Income

				Unit: NT$thousands	Unit: NT$thousands	Unit: NT$thousands
Year Item	2019	2020	2021	2022	2023	As of March 31, 2024
Operatingrevenue	4,738,182	4,672,310	6,518,064	6,198,674	6,823,399	1,175,932
Operating margin including (unrealized) realized profits of affiliated companies	332,636	437,005	676,397	622,860	682,472	103,644
Operating (loss) profit	132,133	226,211	355,346	314,086	225,121	38,993
Non-operating income and expenses	19,772	(36,587)	(147,157)	116,798	78,397	66,511
Pretax net profit (loss)	151,905	189,624	208,189	430,884	303,518	27,518
Profit from continuing operations	137,224	183,413	162,744	363,465	233,205	19,768
Loss from discontinued operations	(8,545)	-	-	-	-	-
Net profit (loss) for current period	128,679	183,413	162,744	363,465	233,205	19,768
Other comprehensive income (loss) (net amount after tax)	14,973	61,488	8,899	(46,473)	66,225	44,671
Total comprehensive income (loss)	143,652	244,901	171,643	316,992	299,430	64,439
Net profit attributable to owners of parent company	106,942	145,907	122,224	320,372	161,901	32,338
Net profit attributable to non-controlling equity	21,737	37,506	40,520	43,093	71,304	(12,570)
Total comprehensive income or loss attributable to the owner	121,915	203,746	132,677	270,348	234,458	70,722
of the parent company
Total comprehensive income (loss) attributable to non- controlling interests	21,737	41,155	38,966	46,644	64,972	(6,283)
Earnings (loss) per share	1.06	1.51	1.27	3.32	1.68	0.34

Note 1: The proposal of 2023 earnings distribution plan has not been resolved by the shareholders' meeting. Note 2: Asset revaluation has not been performed for each year.

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2. Parent Company Only Condensed Statements of Comprehensive Income

Unit: NT$ thousands

Year Item	2019	2020	2021	2022	2023	As of March 31, 2024
Operatingrevenue	3,591,114	3,515,850	4,173,178	3,900,444	3,286,618	Since the first quarter is the time to issue the consolidated review report, it is not applicable.
Operating margin including (unrealized) realized profits of affiliated companies	158,267	228,826	350,104	335,120	263,821
Operating (loss) profit	79.694	154,155	270,833	241,301	132,037
Non-operating income and expenses	26,054	(5,381)	(111,194)	146,488	96,818
Profit before tax	105,748	148,774	159,639	387,789	228,855
Profit from continuing operations	-	-	-	-	-
Loss from discontinued operations	-	-	-	-	-
Net profit (loss) for current period	106,942	145,907	122,224	320,372	161,901
Other comprehensive income (loss) (net amount after tax)	14,973	57,839	10,453	(50,024)	72,557
Total comprehensive income (loss)	121,915	203,746	132,677	270,348	234,458
Net profit attributable to owners of parent company	-	-	-	-	-
Net profit attributable to non-controlling equity	-	-	-	-	-
Total comprehensive income or loss attributable to the owner of the parent company	-	-	-	-	-
Total comprehensive income (loss) attributable to non-controlling interests	-	-	-	-	-
Earnings (loss) per share	1.06	1.51	1.27	3.32	1.68

Note 1: The proposal of 2023 earnings distribution plan has not been resolved by the shareholders' meeting. Note 2: Asset revaluation has not been performed for each year.

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(III) Name of the CPAs and their opinions for the most recent five years

Audit Year	Name of accounting firm	Name of CPAs	Audit Opinions
2019	PwC Taiwan	Wu, Han-Chi, Hsu, Sheng-Chung	No retained opinions
2020	PwC Taiwan	Min-Chuan Feng and Ya-Hui Lin	No retained opinions
2021	PwC Taiwan	Min-Chuan Feng and Ya-Hui Lin	No retained opinions
2022	PwC Taiwan	Min-Chuan Feng and Ya-Hui Lin	No retained opinions
2023	PwC Taiwan	Min-Chuan Feng and Ya-Hui Lin	No retained opinions

II. Financial Analysis of the Last Five Years

Consolidated financial analysis

Analysis Items Year	Analysis Items Year	2019	2020	2021	2022	2023	As of March 31, 2024
Financial structure%	Ratio of liabilities to assets	27.77	33.59	39.52	28.05	31.15	30.60
	Ratio of long-term capital to property, plant and equipment	2774.45	5568.84	8882.72	11,259.40	13,682.90	14,031.24
Solvency%	Current ratio	302.73	241.58	220.57	313.24	287.04	290.63
	Quick ratio	240.02	204.28	165.71	252.62	198.07	217.50
	Interest coverage ratio	26.82	30.16	37.37	55.97	27.79	32.01
Operating ability	Accounts receivable turnover rate(times)	5.04	4.12	4.76	5.05	6.68	5.00
	Average Collection Days	72.42	88.59	76.68	72.27	54.64	73.00
	Inventory Turnover Rate(times)	19.42	13.28	14.58	12.00	10.95	6.08
	Accounts payable turnover rate(times)	16.74	11.43	10.20	9.14	12.07	6.31
	Average days of sales	18.79	27.48	25.03	30.41	33.33	60.03
	Property, Plant and Equipment Turnover Rate(Times)	51.48	96.61	225.22	284.03	350.70	255.30
	Total assets turnover rate(times)	1.99	1.60	1.92	1.93	1.86	1.26

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Analysis Items Year	Analysis Items Year	2019	2020	2021	2022	2023	As of March 31, 2024
Profitability	Return on assets ROA（％）	6.07	7.13	5.30	11.19	7.06	0.62
	Return on shareholders' equity （％）	7.45	10.04	8.16	16.66	9.66	0.77
	Ratio of net income before tax in paid-in capital(%)	14.97	18.68	20.51	44.65	31.45	2.85
	Net profit margin （％）	2.72	3.93	2.50	5.86	3.42	1.68
	Earnings per share (NT$)	1.06	1.51	1.27	3.32	1.68	0.34
Cash flow	Cash flow ratio （％）	(10.93)	(7.72)	45.11	66.90	8.93	48.10
	Cash flow adequacy ratio	107.13	214.87	166.84	185.77	96.40	96.58
	Cash reinvestment ratio （％）	註1	(4.38)	27.00	22.88	0.47	20.88
Degree of leverage	Degree of operating leverage	4.24	3.00	1.10	1.11	1.12	(0.79)
	Degree of financial leverage	1.05	1.03	1.02	1.03	1.05	1.11
Please explain the reasons for changes in various financial ratios in the most recent two years. (If the change is within 20%, the explanation is not required). 1. Solvency: The increase in the current ratio and quick ratio is mainly due to the decrease in current assets and current liabilities in the current year. The decrease in the interest coverage ratio is mainly due to the decrease in net profit before tax. 2. Operating ability: The changes in accounts receivable turnover ratio and inventory turnover ratio for the current period is mainly due to the increase in accounts receivable and sales revenue for the current period. 3. Decrease in various ratio of profitability: It is mainly due to the decrease in net income for the current period resulting in a decrease in all ratios. 4. Cash Flow: The changes in cash flow ratio mainly due to the increase in current inventory and current liabilities in the currentperiod.

Note 1: Cash flow from operating activities refers to cash inflow, so for net cash outflow, it is not applicable.

＊ If the Company has formulated a standalone financial report, it shall also offer an explanation of the Company's individual financial ratios.

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2. Parent Company Only financial analysis

Year	Analysis Items	2019	2020	2021	2022	2023	As of March 31,2024
Financial structure%	Ratio of liabilities to assets	25.62	29.57	27.79	11.54	15.94	Since the first quarter is the time to issue the consolidated review report, it is not applicable.
	Ratio of long-term capital toproperty, plant and equipment	2,808.02	5,307.39	18,860.73	22,470.18	26,514.75
Solvency%	Current ratio	264.20	213.63	242.31	568.17	431.84
	Quick ratio	208.26	189.07	210.18	520.48	375.44
	Interest coverage ratio	19.61	24.59	33.03	74.43	38.77
Operating ability	Accounts receivable turnover rate(times)	4.07	3.56	3.77	4.32	4.30
	Average Collection Days	89.68	102.52	96.81	84.49	84.88
	Inventory Turnover Rate (times)	17.35	13.72	19.00	20.69	18.61
	Payables Turnover Rate(Times)	14.42	11.46	12.57	15.70	18.29
	Average days of sales	21.03	26.60	19.21	17.64	19.61
	Property, Plant and Equipment Turnover Rate(Times)	129.94	80.12	198.35	419.74	381.92
	Total Asset Turnover Rate (Times)	1.72	1.44	1.67	1.71	1.27
Profitability	Return on assets ROA（％）	5.45	6.66	5.10	13.55	6.84
	Return on shareholders' equity (%)	6.51	8.91	6.92	16.73	7.71
	Ratio of net income before tax in paid-in capital (%) (Note 7)	10.42	14.66	15.73	40.19	23.72
	Net profit margin （％）	2.98	4.15	2.93	8.21	4.93
	Earnings per share (NT$)	1.06	1.51	1.27	3.32	1.68
Cash flow	Cash flow ratio(％)	6.45	(10.69)	58.52	204.79	5.26
	Cash flow adequacyratio	124.48	244.03	205.07	222.97	120.68
	Cash reinvestment ratio(％)	(8.22)	(4.88)	19.11	22.01	(2.59)

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Year	Analysis Items	2019	2020	2021	2022	2023	As of March 31,2024
Degree of	Degree of operatingleverage	1.19	2.13	1.68	1.06	1.07
leverage	Degree of financial leverage	1.08	1.04	1.02	1.02	1.05

Please explain the reasons for changes in various financial ratios in the most recent two years. (If the change is within 20%, the explanation is not required).

Solvency: The decrease in the current ratio and quick ratio is mainly due to the increase in current assets and current liabilities. The decrease in the interest coverage ratio is mainly due to the decrease in net profit before tax.
Operating ability: The changes in accounts receivable turnover ratio and inventory turnover ratio for the current period is mainly due to the decrease in accounts receivable and sales revenue for the current period.
Decrease in various ratio of profitability: It is mainly due to the decrease in net income for the current period resulting in a decrease in all ratios.
Cash Flow: The changes in cash flow ratio mainly due to the increase in current inventory and current liabilities in the current period.

Note 1: Cash flow from operating activities refers to cash inflow, so for net cash outflow, it is not applicable.

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Note 1: The year that has not been audited and attested by CPAs should be noted.
Note 2: The companies who are listed or whose shares are traded at securities exchange shall include the financial data for the year one quarter before the printing date of the annual report into the financial statements of the year for analysis.
Note 3: Calculation formulas shall be disclosed at the end of the annual report:
Financial structure
- (1) Debt-asset Ratio = Total Liabilities/Total Assets.
- (2) Long-term funds to property, plant and equipment = (Stockholders' equity ＋ Noncurrent Liabilities) / Net Property, Plant and Equipment
Solvency
- (1) Current Ratio = Current Assets/Current Liabilities.
- (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses)/Current Liabilities.
- (3) Interest Coverage Ratio = Net Profit before Tax and Interest/Interest Expenses.
Operating ability
- (1) Accounts receivable (including accounts receivable and notes receivable generated from operations) turnover rate = Net sales/Average balance of accounts receivable (including accounts receivable and notes receivable generated from operations) for each period.
- (2) Average Collection Days = 365/Receivables Turnover Rate.
- (3) Inventory Turnover Rate = Cost of Sales/Average Inventory.
- (4) Accounts payable (including accounts payable and notes payable generated from operations) turnover rate = Cost of goods sold/Average balance of accounts payable (including accounts payable and notes payable generated from operations) for each period.
- (5) Average Days for Sale = 365/Inventory Turnover Rate.
- (6) Property, plant, and equipment turnover rate = Net sales/Average net property, plant, and equipment.
- (7) Total Asset Turnover Rate = Net Sales/Average Total Assets.
Profitability
- (1) Return on assets = [Income after tax + Interest expenses x (1 - tax rate)]/Average total assets.
- (2) Return on equity = net income after tax/average equity
- (3) Net margin = net income/net sales.
- (4) Earnings per share = (net income – dividends on preferred shares)/weighted average number of issued shares. (Note 4)
Cash flow
- (1) ) Cash flow ratio = net operating cash flow/current liabilities.
- (2) Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years/(capital expenditures + inventory increase + cash dividend) for the most recent five years.
- (3) Cash reinvestment ratio = (Net cash flow from operating activities – cash dividend)/(gross fixed assets value + long-term investment + other assets + working capital). (Note 5)
Degree of Leverage:
- (1) Operating leverage = (Net operating revenue - Variable operating costs & expenses)/Operating income (Note 6).
- (2) Financial leverage = Operating income/(Operating income - Interest expenses).

Note 4: Special attention shall be paid to the following matters when using the calculation formula to earning per share above:

Based on the weighted average number of shares of common stock, rather than the number of issued shares at the end of the year.
If the company conducted cash capital increase or transaction of treasury stock, the circulation period should be considered and the weighted average number of shares calculated.
If the Company conducted capital increase by retained earnings or capital surplus, it shall retrospectively adjust the earnings per share for the past fiscal year and the semi-annual earnings ratio, without considering the issuance period of the capital increase.
If the preferred stocks are nonconvertible cumulative preferred stocks, its dividend of the year (whether it is being distributed or not) shall add or subtract the net loss from the net income after tax. If the

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preferred stock is non-cumulative, the dividend of the preferred stock should be deducted from the net profit after tax, if any; if there is a loss, it shall not be adjusted.

Note 5: Special attention should be paid to the following matters when measuring cash flow analysis:

Net cash flow from operating activities refers to the net cash inflow from operating activities in the statement of cash flows.
Capital expenditure is the annual cash outflow of capital investment.
The increase in inventory is included only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.
Cash dividends include cash dividends from common stock and preferred stocks.
The gross property, plant, and equipment refer to the total value of property, plant, and equipment minus accumulated depreciation.
Note 6: The issuer shall classify the operating costs and operating expenses as fixed or variable in accordance with their nature. If it involves estimation or subjective judgment, attention shall be paid to its reasonableness and consistency.
Note 7: If the Company's shares have no par value or a par value other than NT$10, any calculation that involves the paid-in capital ratio shall be replaced with the equity ratio attributable to the owner of the parent company, as shown in the balance sheet.

Calculation formulas:

Financial structure
(1) Debt-asset Ratio = Total Liabilities/Total Assets.
(2) Ratio of Long-Term Funds to Fixed Assets = (Net Shareholders' Equity + Long-term Liabilities)/Net Fixed Assets.
Solvency
(1) Current Ratio = Current Assets/Current Liabilities.
(2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses)/Current Liabilities.
(3) Interest Coverage Ratio = Net Profit before Tax and Interest/Interest Expenses.
Operating ability
(1) Accounts receivable (including accounts receivable and notes receivable generated from operations) turnover rate = Net sales/Average balance of accounts receivable (including accounts receivable and notes receivable generated from operations) for each period.
(2) Average Collection Days = 365/Receivables Turnover Rate.
(3) Inventory Turnover Rate = Cost of Sales/Average Inventory.
(4) Accounts payable (including accounts payable and notes payable generated from operations) turnover rate = Cost of goods sold/Average balance of accounts payable (including accounts payable and notes payable generated from operations) for each period.
(5) Average Days for Sale = 365/Inventory Turnover Rate.
(6) Fixed Asset Turnover Ratio = Net Sales/Average Net Fixed Asset
(7) Total Asset Turnover Rate = Net Sales/Average Total Assets.
Profitability
(1) Return on assets = [Income after tax + Interest expenses x (1 - tax rate)]/Average total assets.
(2) Return on Equity (ROE) = Gain (loss) after tax/Average net equity.
(3) Net margin = net income/net sales.
(4) Earnings per share = (net income – dividends on preferred shares)/weighted average number of issued shares. (Note 4)
Cash flow
(1) Cash flow ratio = net operating cash flow/current liabilities.
(2) Net cash flow adequacy ratio = Net cash flow from operating activities for the most recent five years/(capital expenditures + inventory increase + cash dividend) for the most recent five years.
(3) Cash reinvestment ratio = (Net cash flow from operating activities – cash dividend) / (gross fixed assets value + long-term investment + other assets + working capital). (Note 5)

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Degree of Leverage:
- Note 1: Operating leverage = (Net operating revenue - Variable operating costs & expenses)/Operating income (Note 6).
- Note 2: Financial leverage = Operating income/(Operating income - Interest expenses).
Note 3: Special attention shall be paid to the following matters when using the calculation formula to earning per share above:
1. Based on the weighted average number of shares of common stock, rather than the number of issued shares at the end of the year.
2. If the company conducted cash capital increase or transaction of treasury stock, the circulation period should be considered and the weighted average number of shares calculated.
3. If the Company conducted capital increase by retained earnings or capital surplus, it shall retrospectively adjust the earnings per share for the past fiscal year and the semi-annual earnings ratio, without considering the issuance period of the capital increase.
4. If the preferred stocks are nonconvertible cumulative preferred stocks, its dividend of the year (whether it is being distributed or not) shall add or subtract the net loss from the net income after tax. If the preferred stock is non-cumulative, the dividend of the preferred stock should be deducted from the net profit after tax, if any; if there is a loss, it shall not be adjusted.
Note 4: Special attention should be paid to the following matters when measuring cash flow analysis:
1. Net cash flow from operating activities refers to the net cash inflow from operating activities in the statement of cash flows.
2. Capital expenditure is the annual cash outflow of capital investment.
3. The increase in inventory is included only when the balance at the end of the period is greater than the balance at the beginning of the period. If the inventory decreases at the end of the year, it is counted as zero.
4. Cash dividends include cash dividends from common stock and preferred stocks.
5. Gross fixed assets refer to the total fixed assets before deduction of accumulated depreciation.
Note 5: The issuer shall classify the operating costs and operating expenses as fixed or variable in accordance with their nature. If it involves estimation or subjective judgment, attention shall be paid to its reasonableness and consistency.

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III. Audit report of the financial report for the most recent year from the audit committee.

Chaintech Technology Corporation

Audit report of Audit Committee

Whereas

The Financial Report and Consolidated Financial Report issued by the Board of Directors of CHAINTECH for the year 2023 have been audited by CPA Min-Chuan Feng and CPA Ya-Hui Lin of Pricewaterhouse Coopers (PwC) Taiwan, which, together with the proposal of the Business Report, have been reviewed by the Audit Committee and are considered to be consistent. Therefore, the review report has been prepared in accordance with Article 144 of the Securities Exchange Act and Article 219 of the Company Act.

Please review.

In addition

2024 Regular Shareholders' Meeting of CHAINTECH

Chaintech Technology Corporation

Convener of Audit Committee: Hsin-Ying Yang

March 13, 2024

127

Chaintech Technology Corporation

Audit report of Audit Committee

Whereas

The earnings distribution plan issued by the Board of Directors of CHAINTECH for the year 2023 has been reviewed by the Audit Committee and are considered to be consistent. Therefore, the review report has been prepared in accordance with Article 14-4 of the Securities Exchange Act and Article 219 of the Company Act.

Please review.

In addition

2024 Regular Shareholders' Meeting of CHAINTECH

Chaintech Technology Corporation

Convener of Audit Committee: Hsin-Ying Yang

May 3, 2024

128

IV. Consolidated Financial Statements for the Most Recent Year, Certified by CPAs. I p A ' R p

(113) Cai-Shen-Bao-Zi No. 23005068

To Chaintech Technology Corporation:

A Op

The independent auditors have audited the accompanying consolidated balance sheets of Chaintech Technology Corporation and subsidiaries (hereinafter referred to as "the Group") as of December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, and the notes to the consolidated financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying consolidated financial statements, in all material respects, give a true and fair view of the consolidated financial position of the Group as of December 31, 2023 and 2022, and of 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 the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed and issued by the Financial Supervisory Commission of the Republic of China (the "FSC").

B f A Op

We conduct the audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the GAAS of Republic of China. Our responsibilities under those standards are further described in the section of Responsibilities of Certified Public Accountants for Auditing the Consolidated Financial Statements. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to serve as the foundation of our audit opinion.

K A M

Key audit matters refer to matters that, in our professional judgment, are of most significance in our audit of the consolidated financial statement of the Group for the year ended December 31, 2023. These matters are addressed in the context of our audit of the consolidated financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate opinion on these matters.

129

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

- ff

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Notes 4 (bb) to the consolidated financial statements. For the description of sales revenue, please refer to Note 6 (q). to the consolidated financial statements.

The Group has engaged in the trading and manufacturing of computer peripherals. Sales revenue will not be recognized until customers take the delivery of goods from the warehouse and the transfer control has passed. The Group mainly relies on the statements or other information provided by the depositary of the delivery warehouse, then uses the actual shipment made by the warehouse to the customer as the basis for recognizing the income.

The recognition of the turnover from the warehouse is based on the information and report provided by the depositary as the basis for recognizing the sales revenue. Such revenue recognition generally involves a large number of manual operations. Considering that the volume of the shipments of the Group is large, and the amount of transaction before and after the financial date has a significant impact on the financial statements, the independent auditors have thus listed the sales revenue as the most important matter for this year's audit.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

Understand revenue recognition and adjustment procedures for revenue cut-off for shipment from the depository of warehouse of the Group. Then, inspect the appropriateness of the revenue's recognition from the warehouse, including understanding of the relevant internal control procedures, obtaining information and the statements provided by the depository.
Carry out an internal control test for the sales revenue from the warehouse in order to make sure that the Group determine the sales recognition when the customer receives the delivery of goods and the right of control is transferred.
Perform a closing test for sales revenue from delivery of warehouses for a certain period before and after the balance sheet date, including the verification of shipment certificates and that revenue recognition is recorded in the appropriate period.
Make an written inquiry into the stock quantity in the warehouse and check if the inventory quantity on the record is correct.

130

I g - G w p

Description

As of December 31, 2023, the balance of intangible assets -goodwill was $157,524. Please refer to Note IV(XIX) for the accounting policy on impairment assessment of non-financial assets; Please refer to Note V(II) for the estimation and assumption uncertainty in assessment of impairment of non-financial assets; Please refer to Note VI(XI) for the explanation of the assessment of impairment of non-financial assets. To assess whether intangible assets-goodwill are impaired, the Group estimates the future cash flows based on the cash-generating units to which the intangible assets-goodwill belong, and measures the recoverable amount of such cash-generating units at an appropriate discount rate. As the estimation of future cash flow involves many assumptions that may greatly affect the recoverable amount, we identify the Group's assessment of the goodwill impairment of intangible assets as one of the key audit matters for the year.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

We have carried out the following audit procedures based on the goodwill impairment test report issued by a third-party valuation expert appointed by management:

Assess the expertise, competence, and objectivity of the independent valuation experts appointed by management and verify their qualifications, and discuss with management the scope of work of the valuation experts and review the appointment conditions to verify that no conditions that may affect their objectivity or inhibit their work scope exist, and that the methods used by them are consistent with the IFRSs and industry regulations.
Understand and evaluate the process and the basis where management has made its projections of the growth rate of the future operations in terms of sales and profit margin.
Adopt the evaluation models and important assumptions (including discount rate, etc.) provided by financial experts of our firm, compare the data in assumptions made by management to market and historical data, and check the calculation to ensure the appropriateness of management's judgment.

O M – P p O F

We have also audited the parent company only financial statements of Chaintech Technology Corporation for the years ended December 31, 2023 and 2022, for which we have issued the audit report with an unqualified opinion for reference.

131

R p f M g T g w G f F

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 the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), International Financial Reporting Interpretations Committee (IFRIC) Interpretations, and Standing Interpretations Committee (SIC) Interpretations as endorsed and issued by the FSC, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the responsibility of management includes assessing the Group's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless management intends to liquidate the Group or terminate the business, or has no realistic alternative but to do so.

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

R p f f P A f A g F

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Auditing Standards of Republic of China will always detect a material misstatement when it exists. Misstatements may arise from fraud and error. If it could be reasonably anticipated that the misstated individual amounts or aggregated sum could have influence on the economic decisions made by the users of the consolidated financial statements, it will be deemed as material.

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

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 that 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.

132

Evaluate the appropriateness of accounting policies adopted by the management and the reasonableness of the accounting estimates and related disclosures made accordingly.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, determine 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 auditor's report to the related disclosures in the consolidated financial statements; or, if such disclosures are inadequate, we are required 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 circumstances may cause the Group to no longer continue as a going concern.
Evaluate the overall expression, structure, and contents of the consolidated financial statements (including related notes) and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence with regard to the financial information of the entities within the Group to express an opinion about the consolidated 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 the Norm 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 are 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.

PwC Taiwan Certified Public Accountants: Min-Chuan Feng Ya-Hui Lin

Former Securities and Futures Bureau, Financial Supervisory Commission Approved Certification Number: Jin-Guan-Zheng-Liu-Zi No. 0960038033 Financial Supervisory Commission

Approved Certification Number: Jin-Guan-Zheng-Shen-Zi No. 1070323061

March 13, 2024

133

Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets December 31, 2023 and 2022

Assets	Notes VI(I) VI(II) VI(I) and VIII VI(IV) VI(IV) VI(IV) and VII VI(V) VI(VI) VI(III) VI(VII) VI(VIII) VI(IX) VI(X) VI(XXIII) VI(XII) and VIII VI(XVII) VIII VII VI(XIII) and VII VI(XXIII)	December 31, 2023 Amount % $ 1,089,206 30 34,616 1 36,540 1 865 - 369,210 10 613,845 17 2,696 - 6,231 - 706,082 19 266,486 7 - - 3,125,777 85 227,325 6 - - 18,423 1 33,008 1 177,239 5 34,841 1 44,518 1 535,354 15 $ 3,661,131 100 $ 196,735 5 137,588 4 198,287 5 372,795 10 - - 128,530 4 36,904 1 17,766 1 379 - 1,088,984 30 34,920 1 16,028 - 382 - 51,330 1 1,140,314 31	Unit: NT$ thousands December 31, 2022 Amount % $ 1,061,262 33 115,490 4 31,239 1 11,831 - 455,441 14 525,568 17 3,532 - 5,636 - 401,229 13 129,049 4 2,932 - 2,743,209 86 142,383 4 - - 20,490 1 39,528 1 181,275 6 32,561 1 46,876 1 463,113 14 $ 3,206,322 100 $ 145,464 4 68,618 2 115,737 4 324,143 10 6,397 - 120,380 4 73,462 2 21,326 1 223 - 875,750 27 3,722 - 19,181 1 618 - 23,521 1 899,271 28
		Amount $ 1,089,206 34,616 36,540 865 369,210 613,845 2,696 6,231 706,082 266,486 - 3,125,777 227,325 - 18,423 33,008 177,239 34,841 44,518 535,354 $ 3,661,131 $ 196,735 137,588 198,287 372,795 - 128,530 36,904 17,766 379 1,088,984 34,920 16,028 382 51,330 1,140,314	Amount $ 1,061,262 115,490 31,239 11,831 455,441 525,568 3,532 5,636 401,229 129,049 2,932 2,743,209 142,383 - 20,490 39,528 181,275 32,561 46,876 463,113 $ 3,206,322 $ 145,464 68,618 115,737 324,143 6,397 120,380 73,462 21,326 223 875,750 3,722 19,181 618 23,521 899,271
Current assets 1100 Cash and cash equivalents 1110 Financial asset at fair value through profit and loss - current 1136 Financial assets measured at amortized cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments using equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets Current liabilities 2100 Short-term borrowings 2130 Current contract liabilities 2150 Notes payable 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities

(Continued)

134

Chaintech Technology Corporation and Subsidiaries Consolidated Balance Sheets December 31, 2023 and 2022

Unit: NT$ thousands

Liabilities and equity

December 31, 2023

December 31, 2022
Notes
Amount

%
Amount

%
VI(XV)
964,988
27
964,988
30
100
-
100
-
VI(XVI)
191,571
5
159,534
5
79,273
2
29,249
1
949,236
26
946,595
29
(
6,716)
- (
79,273) (
2)
VI(XV)
-
-
-
-
2,178,452
60
2,021,193
63
342,365
9
285,858
9
2,520,817
69
2,307,051
72
IX
$ 3,661,131
100
$ 3,206,322
100

Equity
Equity attributable to owners of the
parent
Share capital
3110
Ordinary shares
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity
3400
Other equity
3500
Treasury shares
31XX
Total equity attributable to
owners of the parent
36XX
Non-controlling interests
3XXX
Total equity
Significant Contingent Liabilities and
Unrecognized Contract Commitments
3X2X
Total liabilities and equity

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Chairman: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

Manager: Shu-Jung Kao

135

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (EPS in NT$)

Item

2023
2022
Notes
Amount
%
Amount
%
VI(XVII) and
VII
$ 6,823,399
100
$ 6,198,674
100
VI(V)(XXI)
(XXII) and VII
(
6,140,927 ) (
90)(
5,575,814 )(
90)
682,472
10
622,860
10
VI(XXI)
(XXII) and VII
(
168,150 ) (
3) (
131,223 ) (
2)
(
162,286 ) (
2) (
148,139 ) (
2)
(
135,101 ) (
2) (
33,798 ) (
1)
XII(II)
8,186
-
4,386
-
(
457,351 ) (
7)(
308,774 )(
5)
225,121
3
314,086
5
18,510
-
3,817
-
VI(XVIII)
73,990
1
17,166
-
VI(XIX)
(
2,773 )
-
103,653
2
VI(XX)
(
11,330 )
- (
7,838 )
-
VI(VII)
-
-
-
-
78,397
1
116,798
2
303,518
4
430,884
7
VI(XXIII)
(
70,313 ) (
1)(
67,419 )(
1)
$ 233,205
3
$ 363,465
6
VI(III)
$ 84,942
1
($ 58,102 )(
1)
84,942
1
(
58,102 )(
1)
(
18,717 )
-
11,629
-
(
18,717 )
-
11,629
-
(Continued)

4000
Operating revenue
5000
Operating costs
5950
Gross profit from operations
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6300
Research and development
expenses
6450
Gain on expected credit losses
6000
Total operating expenses
6900
Operating income
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Financial costs
7060
Share of profit or loss of
associates and joint ventures
accounted for using equity
method
7000
Total non-operating income
and expenses
7900
Profit before tax
7950
Tax expense
8200
Profit
Other comprehensive income,
net
Items that will not be
reclassified to profit or loss
8316
Unrealized valuation gain (loss)
on equity instruments measured
at fair value through other
comprehensive income
8310
Total amount of items that will
not be reclassified to profit or
loss
Items that may be reclassified
subsequently to profit or loss
8361
Exchange differences on
translation of financial
statements of foreign operation
8360
Total amount of items that may
be reclassified subsequently to
profit or loss

136

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (EPS in NT$)

Item	2023	2022
	Amount $ 66,225 $ 299,430 $ 161,901 71,304 $ 233,205 $ 234,458 64,972 $ 299,430 $	Amount ($ 46,473 ) $ 316,992 $ 320,372 43,093 $ 363,465 $ 270,348 46,644 $ 316,992 $
8300 Other comprehensive income, net 8500 Total comprehensive income (loss) Net income attributable to: 8610 Owners of the parent 8620 Non-controlling interests Total comprehensive income attributable to: 8710 Owners of the parent 8720 Non-controlling interests Earnings per share 9750 Basic earnings per share 9850 Diluted earnings per share
	$	$

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Chairman: Shu-Jung Kao Manager: Shu-Jung Kao Accounting Supervisor: Yu-Nu Lai

137

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Changes in Equity For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands

Notes				Equityatt	ributableto owners of th	e parent			Non-controlling interests	Totalequity
	Ordinary shares	Capital surplus - changes in the net value of the equity of associates and joint venture accounted for using equity method		Retained earnings	Unappropriated retained earnings	Othere	quity Unrealized gains (losses) on financial assets at fair value through other comprehensiveincome	Treasury shares
			Legal reserve	Special reserve		Exchange differences on the translation of the financial statements of foreign operations
VI(XVI) VI(XVI)	$ 1,014,988 - - - - - - ( 50,000 ) - $ 964,988 $ 964,988 - - - - - - - $ 964,988	$ 100 - - - - - - - - $ 100 $ 100 - - - - - - - $ 100	$ 147,312 - - - 12,222 - - - - $ 159,534 $ 159,534 - - - 32,037 - - - $ 191,571	$ 39,701 - - - - ( 10,452 ) - - - $ 29,249 $ 29,249 - - - - 50,024 - - $ 79,273	$ 787,638 320,372 - 320,372 ( 12,222 ) 10,452 ( 57,899 ) ( 101,746 ) - $ 946,595 $ 946,595 161,901 - 161,901 ( 32,037 ) ( 50,024 ) ( 77,199 ) - $ 949,236	($ 44,750 ) - 8,078 8,078 - - - - - ($ 36,672 ) ($ 36,672 ) - ( 12,385 ) ( 12,385 ) - - - - ($ 49,057 )	$ 15,501 - ( 58,102 ) ( 58,102 ) - - - - - ($ 42,601 ) ($ 42,601 ) - 84,942 84,942 - - - - $ 42,341	($ 151,746 ) - - - - - - 151,746 - $ - $ - - - - - - - - $ -	$ 248,317 43,093 3,551 46,644 - - - - ( 9,103 ) $ 285,858 $ 285,858 71,304 ( 6,332 ) 64,972 - - - ( 8,465 ) $ 342,365	$ 2,057,061 363,465 ( 46,473 ) 316,992 - - ( 57,899 ) - ( 9,103 ) $ 2,307,051 $ 2,307,051 233,205 66,225 299,430 - - ( 77,199 ) ( 8,465 ) $ 2,520,817

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well.

Chairman: Shu-Jung Kao

Manager: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

138

Chaintech Technology Corporation and Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

					Unit: NT$ thousands
					(EPS in NT$)
Cash flows from operating activities
Profit before tax			$	303,518 $	430,884
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expenses	VI(VIII)(XXI)			5,592	16,078
Depreciation expenses of right-of-use assets	VI(IX)(XXI)			21,361	19,444
Amortization expenses	VI(X)(XXI)			6,502	3,687
Loss (gain) on expected credit losses	XII(II)	(		8,186 ) (	4,386 )
Net gain on financial assets at fair value through	VI(II)(XIX)
profit or loss		(		1,996 ) (	2,248 )
Interest expenses	VI(XX)			11,330	7,838
Interest income		(		18,510 ) (	3,817 )
Dividend income	VI(XVIII)	(		7,015 ) (	6,100 )
Loss on disposal of property, plant, and equipment	VI(XIX)			19	3
Changes in operating assets and liabilities
Net changes in operating assets
Financial assets at fair value through profit or
loss				78,751 (	50,339 )
Notes receivable				10,748 (	11,831 )
Accounts receivable (including related parties)		(		8,426 )	448,019
Other receivables				836	3,325
Inventories		(		310,056 )	103,366
Prepayments		(		137,437 )	80,554
Other current assets				2,932 (	2,932 )
Other non-current assets				2,358	2,084
Net changes in operating liabilities
Contract liabilities				68,970 (	43,059 )
Notes payable				84,675	115,737
Accounts payable (including related parties)				46,478 (	449,144 )
Other payables				8,897	1,104
Other current liabilities				156 (	8,407 )
Other non-current liabilities				- (	3,803 )
Cash flows generated from operations				161,497	646,057
Interest received				18,510	3,817
Dividends received				7,015	6,100
Interest paid		(		11,251 ) (	8,088 )
Income tax paid		(		78,548 ) (	61,977 )
Net cash flows generated from operating
activities				97,223	585,909
Cash flows from investing activities
Acquisition of property, plant and equipment	VI(VIII)	(		3,988 ) (	13,221 )
(Increase) decrease in current financial assets measured
at amortized cost		(		5,301 )	2,608
Acquisition of Intangible assets	VI(X)	(		5,693 ) (	10,844 )
Net cash flows used in investing activities		(		14,982 ) (	21,457 )
Cash flows from financing activities
Increase (decrease) in short-term borrowings	VI(XXVI)			53,944 (	81,376 )
Decrease in guarantee deposits received	VI(XXVI)	(		225 ) (	657 )
Repayments of lease liabilities	VI(XXVI)	(		21,516 ) (	20,343 )
Cash dividends paid	VI(XVI)	(		77,199 ) (	57,899 )
Cash dividends paid of consolidated subsidiaries		(		8,465 ) (	9,103 )
Net cash flows used in financing activities		(		53,461 ) (	169,378 )
Effect of exchange rate changes		(		836 ) (	26,810 )
Net decrease in cash and cash equivalents				27,944	368,264
Cash and cash equivalents at beginning of period				1,061,262	692,998
Cash and cash equivalents at end of period			$	1,089,206 $	1,061,262

The accompanying notes are an integral part of the consolidated financial statements. Please refer to them as well. Chairman: Shu-Jung Kao Manager: Shu-Jung Kao Accounting Supervisor: Yu-Nu Lai

139

Chaintech Technology Corporation and Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

(I) The original East Chaintech Technology Co., Ltd. was established in November 1986 and was renamed as Chaintech Technology Corporation (hereinafter referred to as the "Company") in January 2013. Approved by the Securities and Futures Bureau as an OTClisted company in December 1997, the Company was transferred to be a listed company and was listed at the stock exchange market on August 17, 2000. The Company and its subsidiaries (hereinafter referred to as the "Group") are principally engaged in the business of buying and selling and manufacturing of motherboards, display cards, and computer peripherals.
(II) Colorful Group Ltd. (hereinafter referred to as "the Colorful Group") acquired 10% equity in the Company indirectly through Zhongjie Xingye Co., Ltd., and acquired 100% equity in Yicheng International Development Co., Ltd. (which held 36.2% equity of the Company) in June 2014. Therefore, Colorful Group held 46.2% equity in the Company indirectly, and obtained more than half of the seats in the Company's Board of Directors. In June 2017, Zhongjie Xingye Co., Ltd. sold all the equity of the Company it held. In July 2016, Yicheng International Development Co., Ltd. sold the equity of the Company to 26.11%. As of December 31, 2023, the Colorful Group indirectly held 25.40% of the equity in the Company through Yicheng International Development Co., Ltd. As of December 31, 2023, the Group had 240 employees.

II. Approval Date and Procedures of the Consolidated Financial Statements

The consolidated financial statements were approved by the Board of Directors on March 13, 2024.

III. Application of New and Amended Standards and Interpretations

(I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed and issued by the Financial Supervisory Commission, R.O.C ("FSC")
The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed and issued by the FSC that are applicable in 2023:

140

New/Revised/Amended Standards and Interpretations Amendments to IAS 1 "Disclosure of Accounting Policies" Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 "Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction" Amendments to IAS 12 “International Tax Reform - Pillar Two Model Rules”	Effective date issued by the International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

(II) Effect of new issuance of or amendments to the IFRSs endorsed by the FSC but not yet adopted by the Group

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2024:

New/Revised/Amended Standards and Interpretations Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” Amendments to IAS 1 "Classify Liabilities as Current or Non-current" Amendments to IAS 1 “Non-current Liabilities with Covenants”`」` Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”	Effective date issued by the International Accounting Standards Board
	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

(III) Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by the IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

141

New/Revised/Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution
of Assets between an Investor and its Associate or Joint
Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17 “Insurance Contracts”
Amendments to IFRS 17 “ the initial application of IFRS
17 and IFRS 9 - Comparative Information”
Amendments to IAS 21 "Lack of Exchangeability"

Effective date issued by the
International Accounting
Standards Board

Pending decision by the
International Accounting
Standards Board”
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2025

The above standards and interpretations have no significant impact to the Group's financial condition and financial performance based on the Group's assessment.

IV. Summary of Significant Accounting Policies

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

(I) Statement of compliance

The consolidated financial statements are prepared by the Group in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC Interpretations as endorsed and issued by the FSC (the "IFRSs").

(II) Basis of preparation

Except for the following significant items, these consolidated financial statements have been prepared under the historical cost convention:
(1) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
(2) Financial assets measured at fair value through other comprehensive income.
The preparation of financial statements requires the use of certain critical accounting estimates in accordance with IFRSs. It also requires the management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note V.

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(III) Basis of consolidation

Principles for preparation of consolidated financial statements
(1) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries refer to all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(2) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group have been eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(3) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.
(4) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(5) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. For all amounts previously recognized in other comprehensive income, they shall be reclassified from equity to profit or loss.

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2. Subsidiaries included in the consolidated financial statements:

Investor Name The Company Shenzhen Jinghong Sitonholy (Tianjin) Sitonholy (Tianjin) Sitonholy (Tianjin)	Subsidiary Shareholding ratio Name Nature of Business December 31, 2023 December 31, 2022 Shenzhen Jinghong Digital R&D Service Co., Ltd. (Shenzhen Jinghong) Technology research and development and trading of electronic products, computer hardware, and peripheral devices 100% 100% Sitonholy (Tianjin) Technology Co., Ltd. (Sitonholy (Tianjin)) Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts 51% 51% Beijing Sitonholy Technology Co., Ltd. (Beijing Sitonholy) Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts 100% 100% Baotou Yihui Information Technology Co., Ltd. (Baotou Yihui) Electronic products, communication products, computer software and hardware, data processing, storage and support services 100% 100% Sitonholy (Shenzhen)Technology Co., Ltd. (Sitonholy (Shenzhen)) Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts 100% 100%	Explanation
		- - - - -

Subsidiaries not included in the consolidated financial statements: None.
Adjustments for subsidiaries with different balance sheet dates: None.
Significant restrictions: None.
Subsidiaries with significant non-controlling interests to the Group:

As of December 31, 2023 and 2022, the Group’s non-controlling interests totaled NT$342,365 and NT$285,858, respectively. What stated below is the information in respect of the Group’s significant non-controlling interests and the corresponding subsidiaries:

Subsidiary	Principal place of business	Non-controlling interests	Non-controlling interests	Non-controlling interests	Non-controlling interests
		December 31, 2023		December 31, 2022
		Amount	Shareholding percentage	Amount	Shareholding percentage
Tianjin Siton	Mainland Chin	$342,365	49	$285,858	49

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Summarized financial information of the subsidiaries:

Balance sheet

Current assets Non-current assets Current liabilities Non-current liabilities Total net assets	Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries December 31, 2023 December 31, 2022 $ 1,419,325 $ 1,198,379 51,409 64,738 ( 766,635) ( 670,554) ( 5,394) ( 9,180) $ 698,705 $ 583,383
	December 31, 2023 $ 1,419,325 51,409 ( 766,635) ( 5,394) $ 698,705

Statement of comprehensive income

Revenue Profit before tax Tax expense Profit Other comprehensive income (net amount after tax) Total comprehensive income (loss) Total comprehensive income attributable to Non-controlling interests Dividends paid to non-controlling interests	Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries	Sitonholy (Tianjin) Technology Co., Ltd. and its subsidiaries
	2023 $ 3,468,396 148,782 ( 3,265) 145,517 ( 12,921) $ 132,596 $ 64,972 $ 8,465	2022 $ 2,238,756 87,946 ( 3) 87,943 7,249 $ 95,192 $ 46,644 $ 9,103

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Statement of cash flows

	Sitonholy (Tianjin) Technology Co., Ltd. and	Sitonholy (Tianjin) Technology Co., Ltd. and
		its subsidiaries
	2023	2022
Net cash flows generated from	$ 70,106	$ 13,942
operating activities
Net cash flows used in investing	( 15,129)	( 20,430)
activities
Net cash flows generated from	( 8,558)	193,214
financing activities
Effects of changes in foreign exchange
rates on cash and cash equivalents
	( 9,376)	2,895
Increase in cash and cash equivalents
	37,043	189,621
Cash and cash equivalents at beginning
of period	370,802	181,181
Cash and cash equivalents at end of
period	$ 407,845	$ 370,802

(IV) Foreign currency translation

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (i.e., functional currency). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional currency.

Foreign currency transactions and balances
(1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(2) Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Exchange differences arising upon the re-transaction at the balance sheet date are recognized in profit or loss.

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(3) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(4) All exchange gains and losses are presented in the earnings statement of profit or loss within "other gains and losses."
Translation of foreign operations The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(1) Assets and liabilities for each balance sheet presented are re-translated at the closing exchange rates prevailing at the balance sheet date;
(2) Income and expenses for each composite income sheet are re-translated at the average exchange rates for the period; and
(3) All resulting exchange differences are recognized in other comprehensive income.
(4) When a foreign operation is partially disposed of or sold, the cumulative exchange differences that were recognized in other comprehensive income are reclassified to the non-controlling interests in the foreign operation. However, if the Group still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.
(5) Goodwill and fair value adjustments arising from the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at balance sheet date.

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(V) Standard of assets and liabilities being classified as current and non-current

Assets that meet one of the following criteria are classified as current assets:
(1) Assets arising from operating activities that are expected to be realized or are intended to be sold or consumed within the normal operating cycle.
(2) Assets held mainly for trading purposes.
(3) Assets that are expected to be realized within twelve months from the balance sheet date.
(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Assets that do not meet the aforementioned conditions are classified as non-current.

Liabilities that meet one of the following conditions are classified as current liabilities:
(1) Liabilities that are expected to be paid off within the normal operating cycle.
(2) Liabilities held mainly for trading purposes.
(3) Liabilities that are to be paid off within twelve months from the balance sheet date.
(4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that do not meet the aforementioned conditions are classified as noncurrent.

(VI) Cash equivalents

Cash equivalents refer to short-term investments with high liquidity, which can be easily converted into a fixed amount of cash at any time with minimal risk of value fluctuation. Time deposits that meet the aforementioned definition and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(VII) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss refer to financial assets not measured at amortized cost nor measured at fair value through other comprehensive income.

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Financial assets at fair value through profit or loss that follow regular way purchase or sale are recognized by the Group using trade date accounting.
At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.
Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of dividends can be measured reliably.

(VIII) Financial assets at fair value through other comprehensive income

Changes in fair value of investments in equity instruments that are not held for trading purpose at initial recognition presented in other comprehensive income; or, financial assets meeting the criteria listed below are classified as debt instrument:
- (1) The financial asset is held for the purpose of obtaining the contractual cash flows and the sales of the contract.
- (2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Group adopts trade date accounting for financial assets measured at fair value through other comprehensive income.
At initial recognition, the Group measures the financial assets at fair value plus transaction costs; the Group subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following derecognition of the investment. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Group and the amount of dividends can be measured reliably.
(IX) Financial assets measured at amortized cost
refers to an asset that meets all of the following conditions:
- (1) The financial asset is held within a business model whose objective is achieved by collecting contractual cash flows.

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(2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Group adopts trade date accounting for financial assets that follow regular way purchase or sale measured at amortized cost.
The Group measures financial assets at fair value plus transaction cost at initial recognition, and subsequently recognizes interest income and impairment loss during the circulation period using the effective interest method according to the amortization procedure, and recognizes any gains or losses upon derecognition in profit or loss.

(X) Accounts and notes receivable

Accounts receivables and notes receivables are accounts and notes of which the contractual right to consideration for goods sold or services rendered is unconditional.
Short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.
(XI) Impairment of financial assets

Considering all reasonable and provable information (including forward-looking information), the Group measures the credit risk that increases insignificantly since original recognition via the 12-month expected credit loss amount through financial debt instrument at fair value through other comprehensive income and accounts receivable containing significant financial components. For those credit risk increasing significantly since original recognition, the allowance loss is measured by the expected amount of credit loss during the existence period; for accounts receivable that do not contain significant financial components, the allowance loss is measured by the amount of expected credit losses during the duration of the period.

(XII) De-recognition of financial assets

Financial assets are derecognized when the Group's contractual rights to receive cash flows from financial assets are lapsed.

(XIII) Operating leases - lessor

Lease income from operating leases less any incentives given to lessees is recognized in profit or loss on a straight-line basis over the term of the lease.

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(XIV) Inventories

Inventories are measured at the lower of cost and net realizable value, and cost is determined using the weighted average method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production burden (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in comparing the cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of the completion and applicable variable selling expenses.

(XV) Investments accounted for using equity method - associates

Associates are all entities over which the Group has significant influence but has no control. Investments in associates are accounted for using the equity method and are initially recognized at cost.
The Group's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
When an associate’s equity changes are not recognized in profit or loss or other comprehensive income of the associate, and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of related enterprises have been adjusted as necessary, and are consistent with the policies adopted by the Group.
Where an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for using equity method" shall be adjusted for the increase or decrease of its share of equity interest. Where its investment proportion decreases, in addition to the above adjustments, the profit or loss previously recognized in other comprehensive income due to decrease in its

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ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.

When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

(XVI) Property, plant and equipment

Property, plant and equipment are recorded as the foundation of acquisition cost.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replacement is de-recognized. All other repairs and maintenance are recognized as current gain or loss when incurred.
Property, plant and equipment apply the cost model. Except for land, other property, plant and equipment are depreciated using the straight-line method to allocate their cost over their estimated useful lives. If each component of property, plant and equipment is material, it is depreciated separately.
The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

(XVII)	Machinery and equipment 3 ~ 5 years Transportation equipment 5 years Derivative instruments 3 ~ 10 years Other equipment 2 ~ 10 years Lease transaction in the capacity of a lessee-right-of-use assets/lease liabilities

A right-of-use asset and a lease liability are recognized for a leased asset on the date

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when it becomes readily available for the Group's use. When a lease contract is a short-term lease or when it is a lease of which the underlying asset is of low value, lease payments are recognized as an expense on a straight-line basis over the lease term.

On the commencement date, the Group measures lease liabilities by the present value of outstanding lease payments, using the Group's incremental borrowing rate. Lease payments include fixed payments less any lease incentives receivable. In subsequent periods, the Group measures lease liabilities at amortized cost using the effective interest method and recognizes interest expenses during the lease term. When a change in the lease term or lease payments occurs due to reasons other than lease modifications, lease liabilities are reassessed and the remeasurements are adjusted to the right-of-use assets.
Right-of-use assets are recognized at cost on the lease commencement date. The cost includes: The originally measured amount of lease liabilities. In subsequent periods, the Group measures right-of-use assets at cost and recognizes depreciation expenses at the earlier of the end of useful life of right-of-use assets or the end of the lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.
When a lease modification decreases the scope of a lease, the carrying value of the right-of-use asset is decreased to reflect partial of full termination of the lease liability, and any difference resulting therefrom is immediately recognized in profit or loss.

(XVIII) Intangible assets

Acquired in a business combination, customer relationship is recognized at fair value on the acquisition date. Customer relationship is an asset of limited and durable years as amortized over an estimated useful life of 2.7 years on a straightline basis.
Goodwill arises from the difference between the purchase price set in the equity purchase contract and the net identifiable assets.
The computer software is amortized using the straight-line method over an estimated useful life of 2 ~ 3 years to recognize its cost.

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(XIX) Impairment of non-financial assets

The Group assesses on each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Except for goodwill, When circumstances contributed to the recognition of impairment loss of an asset in the previous period do not exist or are decreased, the recognized impairment loss is reversed to the carrying amount of an asset to the extent that it does not exceed the carrying amount (net of depreciation and amortization) if the impairment loss had not been recognized.
The recoverable amount of goodwill shall be evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss should not be reversed in the future.
For the purpose of impairment testing, goodwill acquired in a business merger is allocated to each of the cash-generating units. This allocation is based on the judgment of the operating units and the goodwill is allocated among cash-generating units or groups that are expected to benefit from goodwill generated in corporate mergers.
(XX) Borrowings
Borrowings refer to short-term loans from banks. The initial recognition of loans measured at fair value less transaction cost. Any subsequent difference between the price and the redemption value after deducting the transaction cost shall be recognized as interest expense in gain and loss by applying amortization procedure of effective interest method during the circulation period.

(XXI) Accounts and notes payable

Accounts and notes payable refers to the debts incurred by purchase of materials, goods, or services on credit, and the notes payable incurred by both operating and non-operating activities.
Short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXII) De-recognition of financial liabilities

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

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(XXIII) Offset of financial assets and liabilities

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXIV) Employee benefits

Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.
Pension

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual foundation.

Employees' compensation and directors' remuneration Employees' compensation and directors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(XXV) Income tax

Income tax expense comprises current and deferred income tax. Income tax is recognized in gain or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country domicile where the Group operates and generates taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities are recorded in tax liability. Undistributed earnings are subject to income tax credit. After the distribution of earnings is approved by the shareholders' meeting in the following year, the Group shall recognize the distribution of earnings and expenses, and recognize the earnings and expenses for the actual earnings.
Deferred income tax adopts the balance sheet approach, and is recognized on

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temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred income tax is not recognized, if the temporary difference arises from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable income (loss) and arises no equal taxable and deductible temporary differences. Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and tax laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXVI) Share capital

Ordinary shares are classified as equity. The incremental cost directly attributable to the issue of new shares or options is deducted from the equity in equity after deducting the income tax.
When the Company bought back the issued stocks, the consideration paid includes any incremental costs that are directly attributable to the incremental costs, net of any directly attributable incremental costs. When the shares are subsequently reissued, the difference between the consideration received net of any directly attributable incremental costs and the carrying amount is recorded in the adjustment of stockholder's equity.

(XXVII) Dividend distribution

Dividends are recognized in the Company's financial statements in the period in

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which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities. Stock dividends are recognized as stock dividends to be distributed and transferred to ordinary shares on the base date of issuance of new shares.

(XXVIII) Revenue recognition

Sales of goods
(1) The Group manufactures and sells products related to motherboards, display cards, and computer peripherals. The sales revenue is recognized when the control of the products is transferred to customers. That is, when the product is delivered to the customer, the customer has discretion in the access and price of the product, and the Group has no outstanding performance obligations that may affect the customer's acceptance of the product. When the product is shipped to a designated location, the risk of obsolete and lost risks has been transferred to the customer, and the customer is required to obtain the products in accordance with the sales contract, or when there is objective evidence that all acceptance criteria have been met, the goods are delivered.
(2) Sales revenue is recognized the net amount of contract price minus estimated sales allowance. The amount of revenue recognition is limited to the extent that it is very unlikely to see a significant reversal in the future, and is updated on the balance sheet date. The terms of sales transactions are mainly due to the expiry of 30 to 90 days after the transfer date. It is consistent with the market practice. Therefore, it is judged that the contact does not contain significant financial component.
(3) Accounts receivable are recognized when the control right of commodities is transferred to the customs; that is because the Group has unconditional rights to the contract price since that point in time, and the Group can collect the consideration from the customer once upon the contractual time is expired.
Labor revenue

The Group provides services related to research and development. Labor revenue is recognized as revenue at a certain point in time in which the services are rendered to customers.

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Service revenue
The Group provides management services for internet data. Service revenue is recognized as revenue in the reporting period in which the services are rendered to customers.
Financial composition
The duration of commitment to transfer commodities or services to customer and the payment period in the contracts between the Group and customers are all less than one year. Therefore, the Group has not adjusted the transaction price to reflect the time value of money.
Costs to acquire contracts from customers

The Group recognizes the incremental costs incurred in the contracts with the customers and that are expected to be recoverable. However, such costs are recognized in expense as incurred since the contracts are less than one year.

(XXIX) Business combinations

The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business acquisition case, the Group measures the components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either acquisition-date fair value or the ratio of noncontrolling interests to the acquiree’s net identifiable assets. All other components of non-controlling interests shall be measured at acquisition-date fair value.
If the aggregate of (i) the value of consideration transferred, (ii) the amount of noncontrolling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree exceeds the fair value of identifiable assets acquired and liabilities assumed, the difference is recognized as goodwill on the acquisition date. If the fair value of identifiable assets acquired and liabilities assumed exceeds the aggregate of (i) the value of consideration transferred, (ii) the amount of noncontrolling interests, and (iii) the fair value of the acquirer's previously-held equity interest in the acquiree, the difference is recognized as profit or loss on the acquisition date.

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(XXX) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants to compensate the Group’s expense are recognized as profit or loss on a systematic basis when the expense occurs.

(XXXI) Operating segments

The Group's operating segments are reported in a manner consistent with the internal management reporting provided to the chief operating decision makers. The chief operating decision makers, who are responsible for allocating resources to the operating segments and assessing the performance of the Group, has been identified as the members of the Board of Directors.

V. Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty

The preparation of the Group's financial statements requires management to make critical judgments in applying the Group's accounting policies and make critical assumptions and estimates concerning future events according to the conditions on balance sheet date. Material accounting assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such estimates and assumptions possess a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Uncertainties in material accounting judgments, estimates, and assumptions are addressed below:

(I) Significant judgments adopted by accounting policies

None.

(II) Significant accounting estimates and assumptions

Assessment of goodwill impairment

The assessment of goodwill impairment relies on the Group’s subjective judgment, including identifying cash-generating units and the allocation of assets and liabilities and intangible assets to the relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units. For more information on the assessment of goodwill impairment, please refer to Note VI(XI).

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VI. Descriptions of Significant Accounting Items

(I) Cash and cash equivalents

Cash on hand and revolving funds Cheque deposits and demand deposits Time deposits Transferred to financial assets measured at amortized cost - current	December 31, 2023	December 31, 2022 $ 62 1,092,439 - 1,092,501 ( 31,239) $ 1,061,262
	$ 77 1,064,259 61,410 1,125,746 ( 36,540) $ 1,089,206

The Group associates with a variety of financial institutions, all with high credit quality to disperse credit risk, so it is expected that the probability of counterparty default is extremely low.
The demand deposits as of December 31, 2023 and 2022 provided as security, have been transferred to the "current financial assets measured at amortized cost“ title according to their nature.
For more information on the Group's cash and cash equivalents are provided as collateral, please refer to Note VIII.

(II) Financial assets at fair value through profit or loss

Item Financial assets at fair value through profit or loss on a mandatory basis Beneficiary certificates Adjustment Total	December 31, 2023 $ 34,616 - $ 34,616	December 31, 2022 $ 115,490 - $ 115,490

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The breakdown of profit or loss for current financial assets at fair value through profit or loss is as follows:

Item Beneficiary certificates	2023 $ 1,996	2022 $ 2,248

The Group's financial assets at fair value through profit or loss - current have never been provided as pledged assets or guarantees.
For information on the price risk and fair value of financial assets at fair value through profit or loss, please refer to Note XII(II)(III).

(III) Financial assets at fair value through other comprehensive income

Item Equity Instruments Stocks of publicly quoted entity Shares of non-publicly quoted entity, non-emerging shares Adjustment Total	December 31, 2023 $ 169,634 15,350 184,984 42,341 $ 227,325	December 31, 2022 $ 169,634 15,350 184,984 ( 42,601) $ 142,383

The Group elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income.
The breakdown in profit or loss and other comprehensive income of financial assets at fair value through other comprehensive income is as follows:

Equity instruments at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income Dividend income recognized in profit or loss Held at end of period	2023 $ 84,942 $ 7,015	2022 ($ 58,102) $ 6,100

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For information on the price risk and fair value of financial assets at fair value through other comprehensive income, please refer to Note XII(II) and (III).

(IV) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance Accounts receivable (related parties) Less: Loss allowance	December 31, 2023	December 31, 2022 $ 11,831 $ 492,968 ( 37,527) $ 455,441 $ 525,778 ( 210) $ 525,568 $ 992,840
	$ 865 $ 398,652 ( 29,442) $ 369,210 $ 614,091 ( 246) $ 613,845 $ 983,920

The aging analysis of accounts receivable and notes receivable are as follows:

Not overdue Overdue for 1-90 days Overdue for 91 days Total			December	31, 2023	31, 2023		December	31, 2022	31, 2022
			Accounts receivable	Notes receivable			Accounts receivable		Notes receivable
		$ 973,093 33,518 6,132 $ 1,012,743			$ 865 - - $ 865		$ 1,009,631 7,436 1,679 $ 1,018,746		$ 11,831 - - $ 11,831

The aging analysis above is based on past due date.

The balance of receivables on contracts with customers as of December 31, 2023, December 31, 2022, and January 1, 2022 was NT$1,013,608, NT$1,030,577, and NT$1,423,979, respectively.
The Group had discounted NT$0 and NT$69,426 of notes receivable on December 31, 2023 and 2022. If the drawer refuses to make payment upon maturity, the Group is obligated to settle the debt. However, in general, the Group does not expect the drawer to refuse to make payment. The Group's liabilities arising from discounting notes receivable are recorded under notes payable.

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Without consideration of the collateral held or other credit enhancements, the maximum credit risk that best represent the Group's notes receivable as of December 31, 2023 and 2022 amounted to NT$865 and NT$11,831, respectively, and the maximum credit risk that best represent the Group's accounts receivable as of December 31, 2023 and 2022 amounted to NT$983,055 and NT$981,009, respectively.
For more information on the credit risk of accounts receivable, please refer to Note XII(II).

(V) Inventories

December 31, 2023

		December 31, 2023
Raw materials Finished good Goods Inventories in transit	Costs $ 74,128 81,744 509,855 45,939 $ 711,666	Allowance for price decline ($ 1,968) ( 140) ( 3,476) - ($ 5,584)	Carrying amount $ 72,160 81,604 506,379 45,939 $ 706,082

Raw materials Work in progress Finished good Goods Inventories in transit	Costs $ 9,792 107,801 5,535 237,806 49,197 $ 410,131	December 31, 2023 Allowance for price decline ($ 604) ( 167) ( 4,149) ( 3,982) - ($ 8,902)	Carrying amount $ 9,188 107,634 1,386 233,824 49,197 $ 401,229

Cost of inventories is recognized by the Group as expenses in the current period:

Costs of inventories sold (Gain from price recovery) loss on price decline of inventory (Note)	2023 $ 6,144,178 ( 3,251) $ 6,140,927	2022 $ 5,574,091 1,723 $ 5,575,814

Note: The Group's reported the gain from price recovery of inventories in 2023 as a result of de-stocking.

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(VI) Prepayments

Prepayment for purchases Tax overpaid retained for offsetting the future tax payable Others Investments using equity method January 1 (i.e. December 31) Associates	December 31, 2023 $ 251,281 3,710 11,495 $ 266,486 2023 $- December 31, 2023 $-	December 31, 2022 $ 119,219 - 9,830 $ 129,049 2022 $- December 31, 2022 $-

(VII) Investments using equity method

On January 21, 2020, the Board of Directors resolved to pass the investment in uSenlight Corporation, and acquire a 13.70% equity interest in uSenlight Corporation at the amount of NT$150,000 in April 2020. As the Group has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2023, the Group held a 6.13% equity interest in uSenlight Corporation, making the Group its single largest shareholder. As the other two largest shareholders (not the Group's related parties) held more than the Group’s shares, the Group had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Group had significant influence but had no control over uSenlight Corporation.
The basic information of the associates that are material to the Group is as follows:

Company name	Principal place of business	Shareholding ratio	Shareholding ratio	Nature of relations	Measurement method
		December 31, 2023	December 31, 2022
uSenlight Corporation	Republic of China	6.13%	6.13%	Significant influence	Equity method

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(1) uSenlight Corporation compensated for losses due to capital reduction and issued new shares for capital increase in 2022. However, the Company did not subscribe according to the shareholding ratio, resulting in our shareholding ratio decreasing from 13.05% to 6.13%. Additionally, the Company has made a full reduction on the loss of $97,765 to the book amount of $0 for the investment target in 2021, and we do not intend to continue supporting uSenlight Corporation in the future.
(2) uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The assets were publicly auctioned on November 16, 2022, as notified by the court. The Company is currently undergoing dissolution procedures.

(VIII) Property, plant and equipment

January 1, 2023 Costs Accumulated depreciation 2023 January 1 Addition Disposition Reclassification Depreciation expenses Net exchange differences December 31 December 31, 2023 Costs Accumulated depreciation	Machinery and equipment $ 36,995 ( 29,792) $ 7,203 $ 7,203 1,550 - 127 ( 1,846) ( 44) $ 6,990 $ 36,195 ( 29,205) $ 6,990	Transportation equipment $ 13,121 ( 10,052) $ 3,069 $ 3,069 - - - ( 628) ( 46) $ 2,395 $ 12,881 ( 10,486) $ 2,395	Derivative instruments $ 7,082 ( 4,439) $ 2,643 $ 2,643 - ( 14) - ( 771) 21 $ 1,879 $ 6,312 ( 4,433) $ 1,879	Others $ 82,121 ( 74,546) $ 7,575 $ 7,575 2,438 ( 5) ( 127) ( 2,347) ( 375) $ 7,159 $ 14,156 ( 6,997) $ 7,159	Total
					$ 139,319 ( 118,829) $ 20,490 $ 20,490 3,988 ( 19) - ( 5,592) ( 444) $ 18,423 $ 69,544 ( 51,121) $ 18,423

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January 1, 2022 Costs Accumulated depreciation 2022 January 1 Addition Disposition Depreciation expenses Net exchange differences December 31 December 31, 2022 Costs Accumulated depreciation	Machinery and equipment $ 34,130 ( 25,538) $ 8,592 $ 8,592 2,420 ( 19) ( 3,927) 137 $ 7,203 $ 36,995 ( 29,792) $ 7,203	Transportation equipment $ 12,931 ( 9,285) $ 3,646 $ 3,646 - - ( 632) 55 $ 3,069 $ 13,121 ( 10,052) $ 3,069	Derivative instruments $ 4,089 ( 4,015) $ 74 $ 74 2,985 - ( 417) 1 $ 2,643 $ 7,082 ( 4,439) $ 2,643	Others	Total
				$ 74,287 ( 63,441) $ 10,846 $ 10,846 7,816 ( 6) ( 11,102) 21 $ 7,575 $ 82,121 ( 74,546) $ 7,575	$ 125,437 ( 102,279) $ 23,158 $ 23,158 13,221 ( 25) ( 16,078) 214 $ 20,490 $ 139,319 ( 118,829) $ 20,490

The Group had no property, plant, and equipment pledged to others.

(IX) Lease transaction - lessee

The Group's leased underlying assets refer to buildings, of which the lease term is usually between 3 ~ 5 years. Lease contracts are individually negotiated and include various terms and conditions. Except for the term where the leased assets cannot be used as collateral for loans, there are no other restrictions.
Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

Buildings	December 31, 2023 Carrying amount $ 33,008	December 31, 2022 Carrying amount $ 39,528

2023 2022 Depreciation expenses Depreciation expenses Buildings $ 21,361 $ 19,444

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For the years ended December 31, 2023 and 2022, the Group's additions of rightof-use assets amounted to NT$15,198 and NT$21,764, respectively.
Profit or loss items in connection with lease contracts are stated as follows:

Items affecting profit or loss for the period Interest expenses of lease liabilities Expenses under short-term lease contracts	2023 $ 850 245	2022 $ 1,360 645

For the years ended December 31, 2023 and 2022, the Group's cash flows used in leases amounted to NT$22,611 and NT$22,348, respectively.
(X) Intangible assets

January 1, 2023 Costs Accumulated amortization and impairment 2023 January 1 Addition - sourced from separate acquisition Amortization expenses Net exchange differences December 31 December 31, 2023 Costs Accumulated amortization and impairment	Goodwill	Customer relationship $ 32,050 ( 32,050) $- $ - - - - $- $ - - $-	Computer software $ 24,477 ( 3,675) $ 20,802 $ 20,802 5,693 ( 6,502) ( 278) $ 19,715 $ 29,742 ( 10,027) $ 19,715	Total
	$ 160,473 - $ 160,473 $ 160,473 - - ( 2,949) $ 157,524 $ 157,524 - $ 157,524			$ 217,000 ( 35,725) $ 181,275 $ 181,275 5,693 ( 6,502) ( 3,227) $ 177,239 $ 187,266 ( 10,027) $ 177,239

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January 1, 2022 Costs Accumulated amortization and impairment 2022 January 1 Addition - sourced from separate acquisition Reclassification (Note 1) Amortization expenses Adjustment for the period (Note 2) Net exchange differences December 31 December 31, 2022 Costs Accumulated amortization and impairment	Goodwill	Customer relationship $ 32,050 ( 32,050) $- $ - - - - - - $- $ 32,050 ( 32,050) $-	Computer software $ - - $- $ - 10,844 12,003 ( 3,687) - 1,642 $ 20,802 $ 24,477 ( 3,675) $ 20,802	Total
	$ 168,525 - $ 168,525 $ 168,525 - - - ( 6,827) ( 1,225) $ 160,473 $ 160,473 - $ 160,473			$ 200,575 ( 32,050) $ 168,525 $ 168,525 10,844 12,003 ( 3,687) ( 6,827) 417 $ 181,275 $ 217,000 ( 35,725) $ 181,275

Note 1: Transferred from inventories

Note 2: Income received from compensation, please refer to VI(XXV) 6 for information. Goodwill is allocated to the Group’s cash-generating units by operating segments:

Sitonholy (Tianjin) Technology Co., Ltd.	December 31, 2023 $ 157,524	December 31, 2022
		$ 160,473

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(XI) Impairment of non-financial assets

Goodwill is allocated to the Group’s cash-generating units by operating segments. The recoverable amount is determined based on the value in use, and the value in use is calculated using the pre-tax cash flow forecast of the five-year financial budget approved by management. Cash flows beyond the five-year period were estimated using the estimated growth rates stated below.

The Group’s recoverable amount calculated based on the value in use exceeded the carrying amount, so no impairment loss on goodwill was generated. Main assumptions used to calculate the value in use are as follows:

Gross profit margin Growth Rate Discount rate	Sitonholy (Tianjin) Technology Co., Ltd . 2023 2022 11%~12% 14.00% 2.00% 2.00% 19.10% 17.80%
	2023 11%~12% 2.00% 19.10%

Management determined the budgeted gross margin based on the past performance and its expectation for market development. The weighted average growth rates used are consistent with the forecasts included in industry reports. The discount rates used are pretax and reflect the risks specific to relevant operating segments.

(XII) Short-term borrowings

Nature of borrowings Borrowings Secured loans Credit loans Nature of borrowings Borrowings Credit loans	December 31, 2023 $ 45,290 151,445 $ 196,735 December 31, 2023 $ 145,464	Interest range 6.72% 2.50% Interest range 2.50%	Collateral Financial assets measured at amortized cost - current None. Collateral None.

Interest expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were NT$10,480 and NT$6,478, respectively.

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(XIII) Other payables

Salaries payable Royalty payable Others	December 31, 2023 $ 86,593 14,154 27,783 $ 128,530	December 31, 2022
		$ 51,685 33,558 35,137 $ 120,380

(XIV) Pension

The Company has established a defined contribution retirement plan ("the New Plan") in accordance with the Labor Pension Act, which is applicable to employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
The Company's subsidiaries in Mainland China have a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People's Republic of China are based on certain percentage of employees' monthly salaries and wages. The pension funds of each employee are managed and arranged by the government, and the Group has no further obligations except the monthly contributions.
The pension costs recognized by the Group in accordance with the aforesaid pension regulations for the years ended December 31, 2023 and 2022 were NT$13,893 and NT$10,465, respectively.

(XV) Share capital

As of December 31, 2023, the Company's authorized capital was NT$2,500,000 (of which NT$100,000 was for the issuance of stock options, preferred shares or corporate bonds with warrants), with paid-in capital of NT$964,988 and the face value of NT$10 per share, and the number of outstanding shares was 96,499 thousand.
Treasury shares
(1) The reason for repurchase and movements in the number of treasury shares are as follows:

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Company name of holding securities	Reason for repurchase	December 31,	2023
		Number of shares (thousand shares) - December 31,	Carrying amount
The Company Company name of holding securities	For the transfer of shares to employees Reason for repurchase		$- 2022
		Number of shares (thousand shares) -	Carrying amount
The Company	For the transfer of shares to employees		$-

(2) The Securities Exchange Act stipulates that the proportion of the Company's purchase of shares outstanding shall not exceed 10% of the total number of shares issued by the Company, and the total monetary amount of share purchased shall not exceed the retained earnings plus the share premium and the realized capital reserve amount.
(3) Treasury shares held by the Company may be neither pledged nor assigned shareholder rights in accordance with the Securities and Exchange Act.
(4) According to the Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the repurchase date and shares not reissued within the five-year period are to be retired. To maintain the Company's credit and shareholders' rights to buy back shares, the registration change and elimination shall be handled within 6 months after the buy back. The Company passed a resolution by the board of directors to cancel its treasury shares on November 4, 2022, with a benchmark date of December 12, 2022. The Company completed the registration of the cancellation of 5,000 thousand shares of treasury shares and the change in actual paid-in capital on January 9, 2023.

(XVI) Retained earnings

Under the Company's Articles of Incorporation, if there is a surplus in the annual final accounts, in addition to the income tax payable according to law, the Company shall first offset its losses in previous years and set aside a legal capital reserve at 10% of the earnings left over. However, when the accumulated legal capital surplus has equaled the total paid-up-capital of the Company, the said restriction does not apply. After the Company has set aside or reversed the special capital reserve in accordance with relevant laws or the competent authority, along with the earnings not distributed at the beginning of the period, and after retaining part of the surplus depending on the situation, the Board of Directors may propose a surplus

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distribution proposal and submit it to the shareholders' meeting to distribute bonus to the shareholders.

The Company is in stable growth and expands in line with sales development in the future. The future capital expenditures and capital requirement are necessary to be considered first when the Company distribute the earnings. The Board of Directors proposes the distribution plan and distributes the earnings after being approved at the shareholders' meeting. In the annual distribution of shareholder dividends, cash dividend shall not be less than 5%, but if the cash dividend is less than NT$0.1 per share, it may not be issued, and the stock dividend will be distributed instead.
The legal reserve shall not be used except for offsetting the loss of the Company and issuing new shares or cash in proportion to the original number of shares held by the shareholders. However, if it is issued to issue new shares or cash, the said legal reserve shall only exceed 25% at most of the paid-up capital.
(1) When the Company distributes the surplus, it is required by law to provide a special surplus reserve for the debit balance of other equity items on the balance sheet date of the current year. After that, when the debit balance of other equity projects is reversed, the amount of revolving will be included in the surplus available for distribution.
(2) When the Company adopted the IFRSs at first time, for the special reserve listed in the Official Letter of the Financial Management Certificate No. 1010012865 issued on April 6, 2012, the Company reversed the original portion of the said special reserve, and when the Company subsequently uses, disposes of, or reclassifies related assets, they are reversed according to the ratio of the recognized special reserve.
By a resolution in the shareholders' meetings on June 16, 2023 and June 15, 2022, respectively, the Company adopted the earnings distribution plan for the years ended December 31, 2022 and 2021 as follows:

Legal reserve Special reserve Provision (Reversal) Cash dividends	2022	2022	2021	2021
	Amount (NT$ thousand)	Dividends Per Share (NT$)	Amount (NT$ thousand)	Dividends Per Share (NT$)
	$ 32,037 50,024 77,199	$ 0.80	$ 12,222 ( 10,452) 57,899	$ 0.60

Please refer to Note VI(XX) for information on employees' compensation and directors' remuneration.

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As of March 13, 2024, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2023.

(XVII) Operating revenue

Revenue from Contracts with Customers`：` Sales revenue - consumer goods Sales revenue - AI servers and related products Labor revenue Service revenue	Revenue Recognition Timing	2023	2022
	Recognized at a certain point in time Recognized at a certain point in time Recognized at a certain point in time Recognized gradually over time	$ 3,343,185 3,399,750 11,818 68,646 $ 6,823,399	$ 3,343,185 3,399,750 11,818 68,646 $ 6,823,399

The Group derives revenue from providing gradual transfer over time and the transfer of goods and services over time and at a point in time.
The contract liabilities in relation to revenue from contracts with customers recognized by the Group are as follows:

December 31, 2023 Contract liabilities: Unearned sales revenue $ 137,588 Revenue recognized that was included in the contract liability balance at the beginning of the period:		December 31, 2023
				$ 68,618 2023 64,179
			$

(XVIII) Other income

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Government subsidy income Rental income Dividend income Liquidated damages income Other income - others	2023 $ 45,334 158 7,015 9,596 11,887 $ 73,990	2022 $ 7,011 158 6,100 - 3,897 $ 17,166

(XIX) Other gains and losses

Loss on disposal of property, plant, and equipment Net foreign exchange gains (losses) Gain on financial assets at fair value through profit or loss Other losses	2023 ($ 19) ( 3,303) 1,996 ( 1,447) ($ 2,773)	2022 ($ 3) 101,506 2,248 ( 98) $ 103,653

(XX) Financial costs

Interest expenses Lease liabilities	2023 $ 10,480 850 $ 11,330	2022 $ 6,478 1,360 $ 7,838

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(XXI) Additional information on expenses by nature

Employee benefit expenses Depreciation expenses of property, plant and equipment Depreciation expenses of right-of-use assets Amortization expenses of intangible assets	2023 $ 259,263 5,592 21,361 6,502 $ 292,718	2022 $ 182,080 16,078 19,444 3,687 $ 221,289

(XXII) Employee benefit expenses

Payroll expenses Labor/health insurance expenses Pension expenses Other employment expenses	2023 $ 221,561 14,802 13,893 9,007 $ 259,263	2022 $ 155,602 11,126 10,465 4,887 $ 182,080

According to the Company's Articles of Incorporation, after deducting the accumulated losses based on the profitability of the current year, if there are still some earnings left, the employee shall be granted no less than 0.1% as compensation, and the directors shall not be paid more than 6% as remuneration.
For the years ended December 31, 2023 and 2022, the accrued amount of employees' compensation was NT$2,384 and NT$4,039, respectively, and the accrued amount of directors' remuneration was NT$7,151 and NT$12,118, respectively; the aforesaid amounts were recognized as payroll expenses.

For the year ended December 31, 2023, 1% and 3% were estimated according to the profitability of the year. The resolved amounts as approved by the Board of Directors were NT$2,384 and $7,151, respectively. The employees' compensation will be distributed in the form of cash.

The employees' compensation, NT$4,039, and directors' remuneration, NT$12,118, for the year ended December 31, 2022 that had been resolved by the Board of Directors were the same as the amounts recognized in the financial statements for the year then ended.

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Information regarding employees' compensation and directors' remuneration approved by the Board of Directors is available on the Market Observation Post System (MOPS).

(XXIII) Income tax

Tax expense

Components of tax expense:

Current income tax`：` Income tax generated in the current period Surtax on undistributed earnings Under(over)estimate provision of previous year’s income tax Total current income tax liabilities Deferred income tax: The origination and reversal of temporary differences Tax expense	2023 $ 33,470 8,056 ( 132) 41,394 28,919 $ 70,313	2022 $ 70,458 3,128 1,899 75,485 ( 8,066) $ 67,419

Tax expense and accounting profit

Net profit before tax is calculated as income tax at the statutory tax rate Expenses that should be excluded according to tax laws Income exempt from taxation according to tax laws Temporary differences of assets that have not been recognized as deferred tax assets Surtax on undistributed earnings Under(over)estimate provision of previous year’s income tax Tax expense	2023 $ 49,130 ( 1,548) ( 1,403) 16,210 8,056 ( 132) $ 70,313	2022 $ 77,560 806 ( 1,220) ( 14,754) 3,128 1,899 $ 67,419

The amount of deferred tax assets that arise from temporary differences from the taxable financial assets are set out below:

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Temporary differences: Deferred tax assets Allowance for inventory valuation and obsolescence losses Impairment loss Unrealized foreign exchange loss Investment loss Deferred tax liabilities Investment income		2023	2023	2023
	January 1 $ 664 19,948 2,402 9,547 32,561 ( 3,721) $ 28,840	Recognized in profit or loss		Recognized in other comprehensive income	December 31
		($ 562) - 2,842 - 2,280 ( 31,199) ($ 28,919)		$ - - - - - - $-	$ 102 19,948 5,244 9,547 34,841 ( 34,920) ($ 79)

Temporary differences: Deferred tax assets Allowance for inventory valuation and obsolescence losses Impairment loss Unrealized foreign exchange loss Investment loss Others Deferred tax liabilities Investment income		2022	2022	2022
	January 1 $ 169 19,948 653 - 3 20,773 - $ 20,773	Recognized in profit or loss		Recognized in other comprehensive income	December 31
		$ 495 - 1,749 9,547 ( 3) 11,788 ( 3,721) $ 8,067		$ - - - - - - - $-	$ 664 19,948 2,402 9,547 - 32,561 ( 3,721) $ 28,840

Deductible temporary differences of assets that have not been recognized as

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deferred tax assets:

Deductible temporary differences	December 31, 2023 $ 33,795	December 31, 2022 $ 35,394

The revenue service authority has assessed the profit-seeking enterprise income tax of the Company through 2021.

(XXIV) Earnings per share

Basic earnings per share Current net income attributable to ordinary shareholders of parent company Diluted earnings per share Current net income attributable to ordinary shareholders of parent company Impact of potential ordinary shares with dilutive effect Employees' compensation Current net profit attributable to ordinary shareholders of parent company plus the impact of potential ordinary shares		2023
	After-tax amount $ 161,901 $ 161,901 - $ 161,901	Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
		96,499 96,499 77 96,576	$ 1.68 $ 1.68

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Basic earnings per share Current net income attributable to ordinary shareholders of parent company Diluted earnings per share Current net income attributable to continuing operations of parent company Impact of potential ordinary shares with dilutive effect Employees' compensation Current net profit attributable to ordinary shareholders of parent company plus the impact of potential ordinary shares		2022
	After-tax amount	Weighted average shares outstanding (thousand shares)	Earnings per share (NT$)
	$ 320,372 $ 320,372 - $ 320,372	96,499 96,499 149 $ 96,648	$ 3.32 $ 3.31

(XXV) Business combinations

In December 2018, the Group invested in Sitonholy (Tianjin) Technology Co., Ltd. through its subsidiary, Shenzhen Jinghong, and made a prepayment of RMB 10 million. On March 1, 2019, the Group acquired a 51% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. The investment totaled RMB 86.36 million (including contingent consideration of RMB 44.36 million). The equity interest was acquired as follows:
(1) The Group purchased a 26% equity interest from Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) at the amount of RMB 35.36 million.
(2) The Group acquired a 25% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through capital increase at the amount of RMB 51 million.
Sitonholy (Tianjin) Technology Co., Ltd. retails electronic products and communication products in China. After the acquisition, the Group expects to strengthen its presence in the retail market of electronic products and communication products in China.
Information on the consideration for acquiring Sitonholy (Tianjin) Technology Co., Ltd., acquisition-date fair value of assets acquired and liabilities assumed, and portion of non-controlling interests to the acquiree's net identifiable assets is stated as follows:

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Acquisition consideration
Cash (Note 1)
Payments for equity transfer
Payments for purchase of shares
Contingent consideration (Note 2)
Share of non controlling interests in the identifiable net assets
of the acquired party
Fair value for identifiable assets acquired and liabilities and
contingent liabilities
Cash
Accounts receivable
Inventories
Other current assets
Intangible assets (customer relationship)
Property, plant and equipment
Right-of-use assets
Other non-current assets (Note 3)
Accounts payable
Other current liabilities (Note 4)
Lease liabilities
Deferred tax liabilities
Total identifiable assets
Goodwill

$ 119,678
73,648
149,140
342,466
157,465
$ 499,931
$ 20,266
182,945
90,866
113,415
33,961
797
3,744
201,522
( 129,566)
( 184,300)
( 3,802)
( 8,490)
321,358
$ 178,573

Note 1: Acquisition consideration - cash includes payments for equity transfer and payments for purchase of shares.
(1) Payments for equity transfer include prepayments of NT$44,720 (RMB 10 million) made in December 2018 and NT$74,958 (RMB 16 million) paid in March 2019.
(2) Payments for purchase of shares amounted to RMB 16 million. The capital increase was completed in March 2019.
Note 2: Contingent consideration is the present value of investment after taking into account performance compensation set forth in the investment agreement.

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Note 3: Other non-current assets include payments for purchase of shares receivable, RMB 16 million, in March 2019 and payments for purchase of shares, RMB 35 million, to be received when conditions of contingent consideration are established.
Note 4: Other current liabilities include payments for equity transfer, RMB 18.1326 million payable by Sitonholy (Tianjin) Technology Co., Ltd. due to its acquisition of a 100% equity interest in Beijing Sitonholy.
On December 17, 2018, both parties reached an agreement on contingent consideration as follows:
(1) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 15 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 20 million within 15 working days, and should pay RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively (recognized in other non-current liabilities).
(2) If the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2019 (subject to the net profit attributable to parent after deduction of non-recurring profit or loss) reaches RMB 22 million, Shenzhen Jinghong should increase capital of Sitonholy (Tianjin) Technology Co., Ltd. by RMB 15 million within 15 working days.
(3) If Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy fail to meet the performance target for the year within the period of performance commitment, Shenzhen Jinghong has the right to defer the aforesaid contingent consideration to the next period and, based on the realization of the accumulated net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy, determine whether to pay.
As of December 31, 2019, the audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy for the year ended December 31, 2018 reached the agreement on contingent consideration. According to the agreement, Shenzhen Jinghong paid RMB 20 million to Sitonholy (Tianjin) Technology Co., Ltd. for capital increase and paid RMB 7.488 million and RMB 1.872 million to Tianjin Daweisi Technology Center (Limited Partnership) and Tianjin Qunchuang Enterprise Management Consulting Center (Limited Partnership) respectively. The audited net profit of Sitonholy (Tianjin) Technology Co., Ltd. and Beijing Sitonholy

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for the year ended December 31, 2019 was not met. According to the agreement, Shenzhen Jinghong deferred the contingent consideration to the next period.

On December 28, 2020, both parties entered into a supplemental agreement to extend the original terms of the contract for two years (to the end of 2022). Both parties also agreed that compensation should be collected from the original shareholders for the portion belonging to Shenzhen Jinghong (51%) in case of failure to meet the performance target.
The amount of compensation is calculated below:
(1) If the performance target is met by the end of 2021: Unmet net profit target for 2018 to 2020 x 51% x 15%
(2) If the performance target is met before June 2022: Unmet net profit target for 2018 to 2020 x 51% x (15%+10%)
(3) If the performance target is met before the end of 2022:
(4) Unmet net profit target for 2018 to 2020 x 51% x (15%+20%)
The Group has received the above compensation amounted to $15,353 (RMB 3.53 million) in March 2021, and recognized compensation income amounted to $6,827 (RMB 1.51 million) and recognized a decrease in goodwill in in March 2022.
The agreement of the net profits for contingent consideration has been reached by Sitonholy(Tianjin) technology Co., Ltd and Beijing Sitonholy technology Co., Ltd in 2021. According to the agreement, Shenzhen Jinghong has made the payment for contingent consideration and refund of compensation in the first half of the year of 2022.

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(XXVI) Changes in liabilities from financing activities

January 1 Changes in cash flows from financing Impact on changes in exchange rates Impact on changes in other non-cash December 31		2023	2023
	Short-term borrowings	Guarantee deposits received	Lease liabilities	Changes in liabilities from financing activities
	$ 145,464 53,944 ( 2,673) - $ 196,735	$ 618 ( 225) ( 11) - $ 382	$ 40,507 ( 21,516) ( 395) 15,198 $ 33,794		$ 186,589 32,203 ( 3,079) 15,198 $ 230,911

January 1 Changes in cash flows from financing Impact on changes in exchange rates Impact on changes in other non-cash December 31		2022	2022
	Short-term borrowings	Guarantee deposits received	Lease liabilities	Changes in liabilities from financing activities
	$ 226,840 ( 81,376) - - $ 145,464	$ 1,275 ( 657) - - $ 618	$ 37,885 ( 20,343) 1,201 21,764 $ 40,507		$ 266,000 ( 102,376) 1,201 21,764 $ 186,589

VII.Related Party Transactions

(I) Parent company and the ultimate controller

The Company is controlled by Yicheng International Development Co., Ltd. (incorporated in the Republic of China), which owns 25.40% of the shares of the Company. The rest is held by the public. The ultimate controller of the Company is the Colorful Group.

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(II) Name of related party and relationship with the Group

Name of related parties The relationship with the Group 100% reinvestment business by Colorful Colorful Technology Co., Ltd. (Colorful) Group Shenzhen Colorful Yugong Technology and The same person in charge as the Colorful Development Co., Ltd. (Yugong) Group uSenlight Corporation (uSen) Associates The chairman of the Company serves as JDX Technology Co.,Ltd. this company's supervisor.

(III) Significant transactions with related parties

1. Operating revenue

Sales of goods: Colorful	2023 $ 1,933,079	2022 $ 2,092,517

The Group's transaction prices to related parties are not significantly different from those of the unrelated parties. The payment terms are OA 45~125 days depending on the different products.

2. Purchase

Product purchase: Yugong Colorful	2023 $ 28,195 - $ 28,195	2022 $ 24,940 3,776 $ 28,716

Goods are purchased from related parties according to general commercial terms and conditions. Purchases from related parties refer to purchases of display cards.

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3. Receivables from related parties

Accounts receivable: Colorful Less: Loss allowance Total	December 31, 2023 $ 614,091 ( 246) $ 613,845	December 31, 2022 $ 525,778 ( 210) $ 525,568

Receivables from related parties mainly arise from sales transactions. Payment for sales transactions is made in accordance with the payment terms after the date of sale. The receivables are unsecured and not interest-bearing.

4. Payables to related parties

Accounts payable: Yugong	December 31, 2023 $-	December 31, 2022
		$ 6,397

The payables to related parties mainly arise from purchases, which are due one month after the purchase date. The payables are non-interest bearing. Prepayments

Other related party	December 31, 2023 $ 5,808	December 31, 2022
		$-

5. Advertising expense

After the launch of the products jointly developed by the Group and Colorful, both sides have agreed to pay no more than US$60,000 per month as advertising expenses for the related parties. The amounts of advertising expense incurred in 2023 and 2022 were NT$9,024 and NT$10,333, respectively; the amounts not yet paid as of December 31, 2023 and 2022 were NT$5,001 and NT$5,899, respectively, and recognized as "other payables."

6. Endorsements and guarantees made by related parties

Yugong	December 31, 2023 $-	December 31, 2022 $ 22,040

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(IV) Key management compensation information

Wages and short-term employee benefits	2023 $ 19,044	2022 $ 17,174

VIII. Pledged Assets

The Group's assets pledged as collateral are as follows:

Assets title	Book value	Book value	Purpose of collateral
	December 31, 2023	December 31, 2022
Financial assets measured at amortized cost - current Financial assets measured at amortized cost - current	$ 9,252 27,288 $ 36,540	$ 4,621 26,618 $ 31239	Balance of short-term borrowings Guarantee for acceptance of bills

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments
As of December 31, 2023, the Group's guaranteed letter of credit for the purchase was US$1,500 thousand.
As of December 31, 2023, the Company issued a promissory note totaling NT$100,000 thousand for the purchase of goods as a guarantee for the purchase of loan claims.

X. Significant Disaster Loss

None.

XI. Significant Events after the End of the Financial Reporting Period

None.

XII.Others

(I) Capital management

The Group's objectives in capital management are to safeguard the Group's ability to continue as a going concern in order to maintain optimal capital structure in order to minimize the cost of funding and to provide remuneration for its shareholders. In order

186

to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

(II) Financial instruments

1. Category of financial instruments

Financial assets Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost Cash Financial assets measured at amortized cost Notes receivable Accounts receivable (including related parties) Other receivables Refundable deposits (other non- current assets) Financial liabilities Short-term borrowings Notes payable Accounts payable (including related parties) Other payables Guarantee deposits received (other non-current liabilities) Lease liabilities	December 31, 2023 $ 34,616 $ 227,325 $ 1,089,206 36,540 865 983,055 2,696 9,264 $ 2,121,626 $ 196,735 198,287 372,795 128,530 382 $ 896,729 $ 33,794	December 31, 2022 $ 115,490 $ 142,383 $ 1,061,262 31,239 11,831 981,009 3,532 9,971 $ 2,098,844 $ 145,464 115,737 330,540 120,380 618 $ 712,739 $ 40,507

Risk management policies
(1) The Group's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk.

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(2) The risk management is carried out by the Group's finance department according to the policies approved by the Board of Directors. The finance department of the Group is responsible for identifying, evaluating, and avoiding financial risks in close co-operation with the Group's operating units. The Board of Directors has established written principles for overall risk management, and provides written policies for specific areas and matters such as exchange rate risk, interest rate risk, credit risk, and investment of the remaining current capital.
The nature and degrees of significant financial risks
(1) Market risk

Exchange rate risk

A. The Group is a multinational operation and is exposed to exchange rate risk arising from transactions with the Company and its subsidiaries, which is mainly denominated in USD and RMB. The related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.
B. Business of the Group is involved in a number of non-functional currency (the functional currency of the Company is NTD; for subsidiaries, the functional currency is RMB) and deeply affected by the exchange rate fluctuation. The information of significant impact affected by exchange rate fluctuation for foreign assets and liabilities is as follow:

(Foreign currency: functional currency)	December 31, 2023	December 31, 2023
	Foreign currency($ thousands)	Exchange Rate	Carrying amount (NTD)
Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD Financial liabilities Monetary items USD: NTD	$ 45,045 $ 7,487 $ 7,487	30.705 30.705 30.705	$ 1,383,107 $ 673,115 $ 229,888

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(Foreign currency: functional currency)	December 31, 2022	December 31, 2022
	Foreign currency($ thousands)	Exchange Rate	Carrying amount (NTD)
Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD	$ 42,892 $ 3,197	30.71 30.71	$ 1,383,107 $ 229,888

C. The Group's material monetary items affected by the exchange rate fluctuations were recognized as net exchange (losses) gains (including realized and unrealized), which amounted to NT($3,303) and NT$101,506, respectively, for the years ended December 31, 2023 and 2022.
D. The Group's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows:

	2023	2023
	Sensitivity analysis
Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
1% 1%	$ 13,831 $ 2,299	$ - $ -

189

2022

		2022	2022
(Foreign currency: functional currency) Financial assets Monetary items USD: NTD Financial liabilities Monetary items USD: NTD		Sensitivity analysis
	Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
	1% 1%	$ 13,172 $ 982	$ - $ -

Price risk

A. The Group's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risk of investments in equity instruments, the Group diversifies its portfolio with its diversification method based on limits set by the Group.
B. The Group primarily invests in equity instruments and beneficiary certificates issued by domestic companies, and the price of such equity instruments is affected by the uncertainty of the future value of the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, profit after tax for the years ended December 31, 2023 and 2022 will increase or decrease by NT$346 and NT$1,155, respectively due to the gain or loss on equity instruments at fair value through profit or loss, and other comprehensive income for the years then ended will increase or decrease by NT$2,273 and NT$1,424, respectively due to the gain or loss on equity instruments at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

A. The Group's interest rate risk arises primarily from short-term borrowings issued at variable rates, which expose the Group to cash flow interest rate risk. For the years ended December 31, 2023 and 2022, the Group's borrowings issued at variable rates were mainly denominated in NTD, USD and RMB.
B. The Group's borrowings are measured at amortized cost and are re-priced at the contract annual rate every year. Therefore, the Group is exposed to the risk of changes in future market interest rates.
C. If the NTD, USD and RMB borrowing interest rate increases/decreases

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by 1%, with all other variables held constant, profit before tax for the years ended December 31, 2023 and 2022 will decrease or increase by NT$1,574 and NT$1,164, respectively. Changes in interest expense mainly result from floating-rate borrowings.

(2) Credit risk
A. The Group's credit risk is primarily attributable to the risk of financial loss from customers or the counterparty of financial instruments who are unable to fulfill the contract obligation. That credit risk is mainly from the fact that the counterparty is unable to pay off the accounts receivable payable on the terms of the payment and debt instruments classified as amortized cost being measured based on contract cash flows.
B. The Group has established credit risk management in the Group's corporate policy. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. In accordance with the internal defined credit policy, the Group's operating entities and each new customer shall be subject to the management and credit risk analysis before making payment and delivery of the agreed payment and delivery. Internal risk control is evaluated by considering its financial position, historical experience and other factors to assess the credit quality of customers. Limits on individual risks are formulated by the Board of Directors based on internal or external ratings and regularly monitored by the Board of Directors.
C. The Group adopts credit risk management procedures to make assumptions except that the contract amount is overdue for more than 90120 days in accordance with the agreed payment terms, it is regarded that a default has taken place.
D. The Group adopts credit risk management procedures to make the following assumptions as to whether the credit risk on financial instruments since initial recognition has increased by the following:
- (A) When the contract amount is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk has been significantly increased since the original recognition of the financial assets.
- (B) There are actual or expected significant changes in external credit ratings of financial instruments.
E. The Group will group the customer's accounts receivable based on the characteristics of the customer's rating and customer type, and use the

191

simplified method to estimate the expected credit loss based on the preparation matrix.

F. The Group conducts individual assessments for accounts receivable that have already defaulted, taking into account the collection status after the reporting period, and recognizes a provision for loss allowance of 0% to 30%. The remainder is estimated based on our credit conditions and forward-looking considerations to adjust the loss rate established by historical and current information for a specific period so as to estimate the allowance loss for accounts receivable by the said loss rate. The provision matrix as of December 31, 2023 and 2022 is as follows:

December 31, 2023 Expected loss rate Total book value Loss allowance December 31, 2022 Expected loss rate Total book value Loss allowance	Individual 0%~30% $ 10,794 $ 1,144 Individual 30% $ 22,316 $ 6,695	Not overdue 0.02%~11.90% $ 963,164 $ 19,618 Not overdue 0.04%~10.48% $ 999,146 $ 28,757	Overdue for 1-90 days 9.50% $ 33,518 $ 3,185 Overdue for 1-90 days 11.22% $ 7,436 $ 834	Overdue for 91 days 9.50%~100%
			$	$ 1,679 $ 1,451
			$

G. The statement of allowance loss for accounts receivable of the Group using simplified approach is as follows:

January 1 Reversal of impairment loss Effect of exchange rate changes December 31	2023 Accounts Receivable $ 37,737 ( 8,186) 137 $ 29,688	2022 Accounts Receivable $ 41,638 ( 4,386) 485 $ 37,737

(3) Liquidity risk

A. Cash flow prediction is performed by individual operating entities within the Group and are aggregated by the Group's finance department. The Group's finance department monitors the Group's liquidity requirements

192

predict to ensure that it has sufficient funds to support its operational needs and maintains sufficient unencumbered borrowing commitments at all times so that the Group does not violate the relevant borrowing limits or terms.

B. The surplus cash held by each operating entity will be transferred back to the Group's finance department when it exceeds the management needs of the working capital. The Group's finance department invests the surplus funds in interest-bearing demand deposits and fixed deposits, and the selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecasts and provide sufficient water and effluents.
C. The following tables detail the Group's non-derivative financial liabilities grouped by the maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contractual maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.
- Less than 1 year Within 1 2 years Within 2 5 years

December 31, 2023 Non-derivative financial liabilities: Lease liabilities $ 18,594 $ 8,876 $ 7,833

- Less than 1 year Within 1 2 years Within 2 5 years

December 31, 2022 Non-derivative financial liabilities: Lease liabilities $ 22,289 $ 14,615 $ 5,009

Except as stated above, the Group's non-derivative financial liabilities are due within one year.

(III) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is

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regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks is of Level 1.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investment in equity investment without active markets is of Level 3.
For financial instruments not measured at fair value, including cash and cash equivalents, financial assets measured at amortized cost, notes receivable, accounts receivable (including related parties), other receivables, short-term borrowings, notes payable, accounts payable (including related parties), and other payables, their carrying amounts are a reasonable approximation of their fair value.
The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(1) The Group classifies its assets and liabilities according to their nature; the information is as follows:

December 31, 2023 A Recurring Fair value Financial assets at fair value through profit or loss Beneficiary certificates Equity securities Total	Level 1 $ 34,616 211,975 $246,591	Level 2 $ - - $-	Level 3 $ - 15,350 $ 15,350	Total $ 34,616 227,325 $261,941

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December 31, 2022 A Recurring Fair value Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities Total	Level 1 $115,490 127,033 $242,523	Level 2 $ - - $-	Level 3 $ - 15,350 $ 15,350	Total $115,490 142,383 $257,873

(2) Methods and assumptions used by the Group to measure the fair value are as follows:
A. The instruments that the Group uses market-quoted prices as their fair values (i.e. Level 1) are listed below by characteristics:

Stocks of publicly Beneficiary quoted entity certificates Quoted market price Closing market prices Net Value

Beneficiary Stocks of publicly quoted entity certificates

Quoted market price Closing market prices Net Value

B. In addition to the aforementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by means of evaluation techniques or reference to counterparty quotes. The fair value obtained through evaluation techniques can refer to the current fair value of other substantial financial instruments with similar conditions and characteristics, discounted cash flow method or other evaluation techniques, including calculations based on the market information utilization model available on the date of the consolidated balance sheets (e.g., the reference yield curve offered by Taipei Exchange or the average offer price of Reuters commercial paper interest rate).

195

C. The valuation of derivative instruments is based on the valuation model that is widely accepted by market users, such as the discount method. Structured interest rate derivatives are valued by the estimation of future cash flows at contractual interest rates.
D. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group's financial and non-financial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the Group's fair value evaluation model management policy and related control procedures, the management believes that the adjustment is appropriate and necessary to recognize the fair value of financial instruments and non-financial instruments in the consolidated balance sheet. The price information and parameter used in the valuation process are carefully evaluated and adjusted appropriately based on current market conditions.
E. The Group takes into account adjustments for credit risks to measure the fair value of financial and non-financial instruments to reflect credit risk of the counterparty and the Group's credit quality.
For the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2.
The following chart indicates the movement of Level 3 for the years ended December 31, 2023 and 2022:

January 1 (i.e. December 31)	2023 Equity Instruments $ 15,350	2022 Equity Instruments $ 15,350

For the years ended December 31, 2023 and 2022, there were no transfers into or out of Level 3.
The finance department of the Group is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable, and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing backtesting, updating inputs used to the valuation model, and making any other

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necessary adjustments to the fair value.

Quantitative information and sensitivity analysis of significant unobservable inputs to the valuation models used in the valuation models for Level 3 fair value measurement and the sensitivity analysis of changes in significant unobservable inputs are as follows:

Fair value as of December 31, 2023	Fair value as of December 31, 2023	Valuation technique	Significant unobservable input values	Relationship between input value and fair value
		Market price method Valuation technique	Lack of market liquidity discount and expected volatility of equity value Significant unobservable input values	The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values. Relationship between input value and fair value
December 31, 2022
	: 15,350	Market price method	Lack of market liquidity discount and expected volatility of equity value	The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values.

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The Group carefully evaluates the valuation models and inputs used in selecting the valuation models and inputs that the valuation models may result in different valuation models. For financial assets classified as Level 3, if there are changes in evaluation parameters, the impact on other comprehensive gains and losses is as follows:

December 31, 2023 Recognized in other comprehensive income Input value Changes Favorable changes Adverse changes Financial assets Lack of market liquidity discount Equity Instruments and expected ±1% $ 154 $ 154 volatility of equity value

December 31, 2022 Recognized in other comprehensive income Input value Changes Favorable changes Adverse changes Financial assets Lack of market liquidity discount Equity Instruments and expected ±1% $ 154 $ 154 volatility of equity value

XIII. Supplementary Disclosures

(I) Information on significant transactions
Capital loans to others: None.
Endorsements and guarantees: Please refer to Table 1.
Marketable securities held at the end of the period (excluding investment in subsidiaries): Please refer to Table 2.
Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital: None.
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

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Purchases and sales with related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to Table 3.
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 4.
Derivative transactions: None.
Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 5.
(II) Information on investees Information on investees (not including investees in Mainland China): Please refer to Table 6.

(III) Information on investments in Mainland China

Basic information: Please refer to Table 7.
Significant transactions between the Group and investees in Mainland China directly or indirectly through entities in a third area: Please refer to Table 8.
(IV) Information on major shareholders

Information on major shareholders: Please refer to Table 9.

XIV. Segment Information

(I) General information

The Board of Directors of the Group operates business and makes decisions by product types, which are divided into consumer electronic products and AI servers (namely, reportable segments).

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(II) Segment Information

The information for departments that should issue a report to the chief operating decision maker is as follows:

2023 External revenue Internal department revenue Segment revenue Segment profit or loss	Consumer goods $ 3,355,003 9,230 $ 3,364,233 $ 171,131	AI servers and related products $ 3,468,396 165,324 $ 3,633,720 $ 145,517	Adjust and write off	Total $ 6,823,399 - $ 6,823,399 $ 233,205
			$ - ( 174,554) ($ 174,554) ($ 83,443)

2022 External revenue Internal department revenue Segment revenue Segment profit or loss	Consumer goods $ 3,959,918 9,089 $ 3,969,007 $ 329,461	AI servers and related products $ 2,238,756 270,250 $ 2,509,006 $ 87,943	Adjust and write off $ - ( 279,339) ($ 279,339) ($ 53,939)	Total $ 6,198,674 - $ 6,198,674 $ 363,465

(III) Information on the adjustment of segment profit or loss

No reconciliation is necessary as the Group’s chief operating decision maker assesses segment performance and decide on the allocation of resources based on profit after tax.
The measurement method used for total amount of assets reported to the chief operating decision maker is the same as that used for the total amount of assets stated in the financial statements.
(IV) Information on products and services

Please refer to Note 6 (q).

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(V) Geographical information

China Taiwan	2023 Revenue $ 6,821,806 1,593 $ 6,823,399	Non-current assets $ 215,766 57,422 $ 273,188	2022 Revenue $ 6,189,415 9,259 $ 6,198,674	Non-current assets $ 233,945 54,224 $ 288,169

(VI) Key accounts information

10C001 16L002	2023 $ 1,993,079 505,060	202 $ 2,092,517 491,629

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Chaintech Technology Corporation

Endorsements and Guarantees January 1 to December 31, 2023

Table 1

Unit: NT$ thousands (Unless specified otherwise)

Subject of endorsements and

		Subject of endorsements and	Subject of endorsements and
No. (Note1)	Endorser/Guarantor	guarantees		Ceiling limit on endorsements and guarantees for a single entity (Note 3)	Maximum balance of endorsements and guarantees for the period (Note4)	Balance of endorsements and guarantees at end ofperiod	Endorsements and guarantees used	Endorsements and guarantees secured with collateral	Ratio of aggregated endorsements and guarantees to net value in the most recent financial statements	Ceiling limit on endorsements and guarantees (Note 3)	Parent providing endorsements and guarantees for subsidiary (Note 5)	Subsidiary providing endorsements and guarantees for parent (Note 5)	Endorsements and guarantees involving Mainland China (Note 5)	Remark
		Companyname	Relationship (Note2)
0 0	Chaintech Technology Corporation Chaintech Technology Corporation	Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	2 2	$ 1,089,226 1,089,226	$ 80,010 35,560	$ 21,635 -	$ 21,635 -	$ - -	0.99% 0.00%	$ 1,089,226 1,089,226	Y Y	N N	Y Y

Note 1: Explanations are as follows:

(1) The issuer shall fills in 0.
(2) The investees are numbered in alphabetical order beginning with the Arabic numeral 1.
Note 2: The relationships between endorsers/guarantors and endorsees/guarantees are categorized into the following 6 types. Please specify the type.
(1) Companies with which the Group conducts business;
(2) Subsidiaries in which the Group directly holds more than 50% of their common shares;
(3) Investee companies in which the Company and its subsidiaries collectively hold more than 50% of their common shares;
(4) The parent company which holds, directly or indirectly through a subsidiary, more than 50% of its outstanding common shares;
(5) Companies in same type of business and providing mutual endorsements/guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project; or
(6) Shareholders making endorsements/guarantees for their mutually invested company in proportion to their shareholding ratio.
Note 3: The ceiling limit on endorsements and guarantees provided by the Company, on endorsements and guarantees for a single enterprise, and on endorsements and guarantees provided by the Company and its subsidiaries should be 50% of the net value in the most recent financial statements respectively.
Note 4: The maximum balance of endorsement/guarantee provided to others in the current year.
Note 5: Fill in Y if a listed parent company provides endorsements/guarantees for its subsidiary or if a subsidiary provides endorsements/guarantees for its listed parent company or if endorsements/guarantees involve Mainland China.

202

Chaintech Technology Corporation

Marketable Securities Held at the End of the Period (excluding Subsidiaries, Associates, and Joint Ventures)

December 31, 2023

Table 2

Unit: NT$ thousands (Unless specified otherwise)

Company holding securities	Type and name of securities	Relationship with the issuer of securities	Accounting item		End of period	End of period		Remark
				Number of shares	Carrying amount	Shareholding ratio	Fair value
Chaintech Technology Corporation Chaintech Technology Corporation Baotou Yihui Information Technology Co., Ltd.	Stocks_APAQ Technology Co., Ltd. Stocks_CloudMile Co., Ltd. (Cayman Islands) Beneficiary certificates_Industrial Bank jinxueqiu tianli express net- value wealth management product	- - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial asset at fair value through profit and loss - current	3,050,000 510,204 -	$ 211,975 15,350 34,616	3.43% 1.81% -	$ 211,975 15,350 34,616	- - -

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Chaintech Technology Corporation

Purchases and Sales with Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

January 1 to December 31, 2023

Table 3 Company	Counterparty	Relationship		Transaction	Transaction		Unusual trade conditions and its reasons	Unusual trade conditions and its reasons	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	Percentage of total notes and accounts receivable (payable)
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Sales	$ 1,933,079	28.33%	OA 45～125天	不適用	不適用	$ 614,091	60.56%	-

204

Chaintech Technology Corporation

Receivables from Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

December 31, 2023

Table 4 Company	Counterparty	Relationship	Balance of receivables from related parties	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Unit: NT$ thousands (Unless specified otherwise) Receivables from related parties recoverable after period Allowances for losses $ 321,184 ($ 246)	Unit: NT$ thousands (Unless specified otherwise) Receivables from related parties recoverable after period Allowances for losses $ 321,184 ($ 246)
					Amount	Handling method
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Accounts receivable $ 614,091	3.39	$ -	-	$ 321,184	($ 246)

205

Chaintech Technology Corporation

Parent-subsidiary and Subsidiary-subsidiary Business Relations and Significant Transactions and Amounts Thereof

January 1 to December 31, 2023

Table 5

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Company	Counterparty	Relationship with counterparty (Note 2)			Transaction status
				Accounting item	Amount	Transaction terms	Percentage of consolidated total revenue or total assets
0 0	Chaintech Technology Corporation Chaintech Technology Corporation	Shenzhen Jinghong Digital R&D Service Co., Ltd. Shenzhen Jinghong Digital R&D Service Co., Ltd.	Parent company to a subsidiary Parent company to a subsidiary	Operating expenses Other payables	$ 9,821 1,513	Agreed by both parties Agreed by both parties	0.14% 0.04%

Note 1: Information of business contacts between the parent company and subsidiaries shall be specified in No. column. Please fill in the No. column following the instruction:

(1) The parent company is coded 0.
(2) The subsidiaries are coded from "1" in the order presented in the table above.

Note 2: Regarding the percentage of transaction amount to consolidated total revenue or total assets, it is calculated based on the ending balance to consolidated total assets for balance sheet items; it is calculated based on interim accumulated amount to consolidated net revenue for profit or loss items.

206

Chaintech Technology Corporation

Information on Investees (Not Including Investees in Mainland China)

January 1 to December 31, 2023

Table 6

Unit: NT$ thousands (Unless specified otherwise)

Investee Initial amount of investment Shareholding at end of period company Main Gain (loss) on businesses and Current Profit investment for the Investor Investee company Location products December 31, 2023 December 31, 2022 Number of shares Percentage Carrying amount and Loss period Remark Chaintech Technology uSenlight Corporation Republic Electronics, $ 150,000 $ 150,000 1,250,000 6.13% $ - $ - $ - Note 1 Corporation of China computers, and peripherals

Note 1: uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The company is currently undergoing dissolution procedures.

207

Chaintech Technology Corporation

Information on Investments in Mainland China - Basic Information

January 1 to December 31, 2023

Table 7

Unit: NT$ thousands (Unless specified otherwise)

Investee in Mainland China	Main businesses and products	Actual paid-in capital	Method of investment (Note 1)	Accumulated investment amount remitted from Taiwan at beginning of period	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted from Taiwan at end of period	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Carrying amount of investments at end of period	Gain (loss) on investment recovered as of the period	Remark
					Remittance	Recovery
Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd. Sitonholy (Shenzhen) Technology Co., Ltd.	Technology research and development and trading of electronic products, computer hardware, and peripheral devices Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Electronic products, communication products, computer software and hardware, data processing, storage and support services Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts	$ 499,065 110,630 36,824 50,643 13,160	1 3 3 3 3	$ 499,065 - - - -	$ - - - - -	$ - - - - -	$ 499,065 - - - -	$ 74,944 145,517 ( 11,393) 29,964 ( 1,652)	100 51 51 51 51	$ 74,944 74,214 ( 5,810) 15,281 ( 843)	$ 673,115 750,452 39,121 49,375 11,355	$ - - - - -	- - - - -

Note 1: The method of investment in Mainland China includes the following three types:

(1) Direct investment;

(2) Investment in Mainland China through a company set up in a third area; or

(3) Others: Investment in Mainland China through an reinvestment in Mainland China.

Note 2: The valuation is recognized in the financial statements audited by the CPAs of the parent company in Taiwan.

Accumulated investment amount remitted from Taiwan to Mainland China at Investment amount authorized by Investment Ceiling on investment in Mainland China regulated by Investment Company name end of period Commission, M.O.E.A. Commission, M.O.E.A. Chaintech Technology Corporation $ 499,065 $ 544,794 $ 1,512,491

Note 3: The Group's investment in Shenzhen Jinghong Digital R&D Service Co., Ltd., which was approved by the Investment Commission, Ministry of Economic Affairs on November 26, 2015, at a total amount of US$5 million, was remitted in full.

Note 4: The Group's increase in capital of Shenzhen Jinghong Digital R&D Service Co., Ltd. by US$6.4 million, which was approved by the Investment Commission, Ministry of Economic Affairs on February 1, 2019, was remitted in full.

208

Chaintech Technology Corporation Information on Investments in Mainland China - Significant Transactions between the Group and Investees in Mainland China Directly or Indirectly through Entities in a Third Area

January 1 to December 31, 2023

Table 8

Unit: NT$ thousands (Unless specified otherwise)

Investee in Mainland China Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd.	Sales (purchases)	Property transactions	Accounts receivable (payable)	Endorsements and guarantees or collateral provided	Endorsements and guarantees or collateral provided		Financing	Financing		Others
	Amount % $ - - - -	Amount % $ - - - -	Balance % ($ 1,513) - - -	Balance at end of period	Purpose	Highest balance for the period	Balance at end of period	Interest range	Interest for the period
				$ - 21,635	- Supplier credit limit utilization	$ - -	$ - -	- -	$ - -	Operating expenses $9,821 -

209

Chaintech Technology Corporation Information on major shareholders December 31, 2023

Table 9

Name of major shareholder	Shareholding	Shareholding
	Number of shares	Shareholding ratio
Yeland International Development Ltd.	24,517,080	25.40%

Note 1: Information on major shareholders listed above is based on the information on shareholders holding more than 5% of the ordinary shares and preferred shares that have completed non-physical registration and delivery on the last business day of each quarter as calculated by the Taiwan Depository & Clearing Corporation. In addition, share capital stated in the financial statements may vary from the actual number of traded shares with the completion of non-physical registration due to different calculation bases.
Note 2: If a shareholder delivers its shareholding information to the trust, the aforesaid information should be disclosed by the individual trustee who opened the trust account. For the shareholders' declaration of insiders holding more than 10% of the shares in accordance with the Securities and Exchange Act, the number of share held includes the shares held by the shareholders plus the shares delivered to the trust and having the right to decide on the use of trust property. For information on the declaration of insider equity, please refer to the Market Observation Post System.

210

Appendix I: Consolidated Financial Report for the Most Recent Year

Chaintech Technology Corporation and Subsidiaries

Declaration of Consolidated Financial Statements of Affiliated Enterprises

The companies required to be included in the consolidated financial statements of affiliated enterprises under the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are all the same as enterprises required to be included in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries for the year ended December 31, 2023 as provided in the IFRS 10 Consolidated Financial Statements. In addition, relevant information that should be disclosed in the consolidated financial statements of affiliated enterprises has all been disclosed in the consolidated financial statements of Chaintech Technology Corporation and subsidiaries. Consequently, no consolidated financial statements of affiliated enterprises are prepared separately.

Hereby declared by

Company Name: Chaintech Technology Corporation

Person in Charge: Shu-Jung Kao

March 13, 2024

211

V. Individual financial report for the latest year audited and approved by accountants.

Independent Auditors' Report

(113) Cai-Shen-Bao-Zi No. 23005068

To Chaintech Technology Corporation:

A Op

The independent auditors have audited the accompanying parent company only balance sheets of Chaintech Technology Corporation (hereinafter referred to as "the Company") as of December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, parent company only statements of changes in equity, and parent company only statements of cash flows for the years then ended, and the notes to the parent company only financial statements (including the summary of significant accounting policies).

In our opinions, the accompanying parent company only financial statements, in all material respects, give a true and fair view of the parent company only financial position of the Company as of December 31, 2023 and 2022, and of its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers."

B f A Op

We conduct the audit work in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the GAAS of Republic of China. Our responsibilities under those standards are further described in the section of Responsibilities of Certified Public Accountants for Auditing the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to serve as the foundation of our audit opinion.

K A M

Key audit matters refer to matters that, in our professional judgment, are of most significance in our audit of the parent company only financial statement of the Company for the year ended December 31, 2023. These matters are addressed in the context of our audit of the parent company only financial statements as a whole, and in forming out opinion thereon, and we do not provide a separate opinion on these matters.

212

Key audit matters for the parent company only financial statement of the Company for the year ended December 31, 2023 are stated as follows:

- ff

Description

Regarding the accounting policy for recognition of sales revenues, please refer to Note IV(XXVII) to the parent company only financial statements. For the description of sales revenue, please refer to Note VI(XIII) to the parent company only financial statements.

The Company has engaged in the trading and manufacturing of computer peripherals. Sales revenue will not be recognized until customers take the delivery of goods from the warehouse and the transfer control has passed. The Company mainly relies on the statements or other information provided by the depositary of the delivery warehouse, then uses the actual shipment made by the warehouse to the customer as the basis for recognizing the income.

The recognition of the turnover from the warehouse is based on the information and report provided by the depositary as the basis for recognizing the sales revenue. These revenue recognitions generally involve a large number of manual operations. Considering that the volume of the shipments of the Company is large, and the amount of transaction before and after the financial statement date has a significant impact on the financial statements, the independent auditors have thus listed the sales revenue as the most important matter for this year's audit.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

Understand revenue recognition and adjustment procedures for revenue cut-off for shipment from the depository of warehouse of the Company. Then, inspect the appropriateness of the revenue's recognition from the warehouse, including understanding of the relevant internal control procedures, obtaining information and the statements provided by the depository.
Carry out an internal control test for the sales revenue from the warehouse in order to make sure that the Company determines the sales recognition when the customer receives the delivery of goods and the right of control is transferred.
Perform a closing test for sales revenue from delivery of warehouses for a certain period before and after the balance sheet date, including the verification of shipment certificates and that revenue recognition is recorded in the appropriate period.
Make an written inquiry into the stock quantity in the warehouse and check if the inventory quantity on the record is correct.

213

A f p f g z J g g D g R&D , L - f g q

Description

Regarding the accounting policy for assessment of impairment of investments accounted for using the equity method, please refer to Note IV(XVIII) to the parent company only financial statements. For the estimation and assumption uncertainty in assessment of impairment of investments accounted for using the equity method, please refer to Note V(II) to the parent company only financial statements.

In 2019, the Company had a 51% equity interest in Sitonholy (Tianjin) Technology Co., Ltd. through Shenzhen Jinghong Digital R&D Service Co., Ltd. Goodwill and customer relationships were recognized in investments accounted for using the equity method according to the equity purchase contract. This has a significant impact on the parent company only financial statements of the Company.

To assess whether intangible assets are impaired, Shenzhen Jinghong Digital R&D Service Co., Ltd. estimates the future cash flows based on the cash-generating units to which the intangible assets belong, and measures the recoverable amount of such cash-generating units at an appropriate discount rate. As the estimation of future cash flow involves many assumptions that may greatly affect the recoverable amount, we identify the assessment of the impairment of intangible assets by Shenzhen Jinghong Digital R&D Service Co., Ltd. as one of the key audit matters for the year.

Corresponding audit procedures

We have performed the following key audit procedures for the matter mentioned above:

We have carried out the following audit procedures based on the goodwill impairment test report issued by a third-party valuation expert appointed by management:

Assess the expertise, competence, and objectivity of the independent valuation experts appointed by management and verify their qualifications, and discuss with management the scope of work of the valuation experts and review the appointment conditions to verify that no conditions that may affect their objectivity or inhibit their work scope exist, and that the methods used by them are consistent with the IFRSs and industry regulations.
Understand and evaluate the process and the basis where management has made its projections of the growth rate of the future operations in terms of sales and profit margin.
Adopt the evaluation models and important assumptions (including discount rate, etc.) provided by financial experts of our firm, compare the data in assumptions made by management to market and historical data, and check the calculation to ensure the appropriateness of management's judgment.

214

R p f M g T g w G f P p O F

Management is responsible for the preparation and fair presentation of the parent company only 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 parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, the responsibility of management includes assessing the Company's ability to continue as a going concern, disclosing going concern related matters, as well as adopting going concern basis of accounting unless the management intends to liquidate the Company or terminate the business, or has no realistic alternative but to do so.

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

R p f f P A f A g P p O F

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 Auditing Standards of Republic of China will always detect a material misstatement when it exists. Misstatements may arise from fraud or error. If it could be reasonably anticipated that the misstated individual amounts or aggregated sum could have influence on the economic decisions made by the users of the parent company only financial statements, it will be deemed as material.

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than that 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 Company's internal control.
Evaluate the appropriateness of accounting policies adopted by the management and the reasonableness of the accounting estimates and related disclosures made accordingly.

215

Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, determine whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the parent company only financial statements; or, if such disclosures are inadequate, we are required 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 circumstances may cause the Company to no longer continue as a going concern.
Evaluate the overall expression, structure, and contents of the parent company only financial statements (including related notes) and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence with regard to the financial information of the entities within the Company to express an opinion about the parent company only financial statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion.

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

PwC Taiwan

Certified Public Accountants: Min-Chuan Feng

Ya-Hui Lin

Former Securities and Futures Bureau, Financial Supervisory Commission Approved Certification Number: Jin-Guan-Zheng-Liu-Zi No. 0960038033 Financial Supervisory Commission

Approved Certification Number: Jin-Guan-Zheng-Shen-Zi No. 1070323061

March 13, 2024

216

Chaintech Technology Corporation Parent Company Only Balance Sheets December 31, 2023 and 2022

Unit: NT$ thousands

Assets	December31,2023 Amount % $ 573,792 22 9,252 - 192,910 8 613,845 24 199,703 8 9,384 - 1,598,886 62 227,325 9 673,115 26 8,216 - 13,485 1 4,208 - 34,841 1 31,513 1 992,703 38 $ 2,591,589 100	December31,2022	December31,2022
	Amount $ 573,792 9,252 192,910 613,845 199,703 9,384 1,598,886 227,325 673,115 8,216 13,485 4,208 34,841 31,513 992,703 $ 2,591,589	Amount $ 601,127 4,621 190,514 525,568 118,208 5,094 1,445,132 142,383 610,557 8,995 11,033 2,222 32,561 31,974 839,725 $ 2,284,857	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets measured at amortized cost - current 1170 Accounts receivable, net 1180 Accounts receivable from related parties, net 130X Inventories 1470 Other current assets 11XX Total current assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments using equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			26 - 9 23 5 -
			63
			6 27 - 1 - 2 1
			37
			100

(Continued)

217

Chaintech Technology Corporation Parent Company Only Balance Sheets December 31, 2023 and 2022

Liabilities and equity

Unit: NT$ thousands
December31,2023

December31,2022
Notes
Amount

%
Amount

%
VI(IX)
$ 45,290
2
$ -
-
VI(XIII)
100
-
118
-
229,877
9
100,675
5
VII
52,047
2
74,227
3
36,902
1
73,462
3
5,656
-
5,643
-
379
-
223
-
370,251
14
254,348
11
VI(XIX)
34,920
2
3,721
-
7,966
-
5,595
1
42,886
2
9,316
1
413,137
16
263,664
12
VI(X)
VI(XI)
964,988
37
964,988
42
100
-
100
-
VI(XII)
191,571
7
159,534
7
79,273
3
29,249
1
949,236
37
946,595
42
(
6,716)
- (
79,273) (
4)
VI(XI)
-
-
-
-
2,178,452
84
2,021,193
88
IX
$ 2,591,589
100
$ 2,284,857
100

Current liabilities
2100
Short-term borrowings
2130
Current contract liabilities
2170
Accounts payable
2200
Other payables
2230
Current tax liabilities
2280
Current lease liabilities
2300
Other current liabilities
21XX
Total current liabilities
2570
Deferred tax liabilities
2580
Non-current lease liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Ordinary shares
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity
3400
Other equity
3500
Treasury shares
3XXX
Total equity
Significant Contingent Liabilities and
Unrecognized Contract Commitments
3X2X
Total liabilities and equity

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

Manager: Shu-Jung Kao

218

Chaintech Technology Corporation Parent Company Only Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

Item

Unit: NT$ thousands
(EPS in NT$)
2023
2022
Notes
Amount
%
Amount
%
VI(XIII) and VII $ 3,286,618
100
$ 3,900,444
100
VI(IV)(XVII)
(XVIII) and VII (
3,022,797) (
92)(
3,565,324)(
92)
263,821
8
335,120
8
VI(XVII)(XVIII)
and VII
(
39,316 ) (
1) (
48,732 ) (
1)
(
31,327 ) (
1) (
32,155 ) (
1)
(
67,796 ) (
2) (
15,084 )
-
XII(II)
6,655
-
2,152
-
(
131,784) (
4)(
93,819)(
2)
132,037
4
241,301
6
13,218
-
1,650
-
VI(XIV)
18,765
1
6,295
-
VI(XV)
(
4,049 )
-
99,185
3
VI(XVI)
(
6,059 )
- (
5,281 )
-

VI(V)
74,943
2
44,639
1
96,818
3
146,488
4
228,855
7
387,789
10
VI(XIX)
(
66,954) (
2)(
67,417)(
2)
$ 161,901
5
$ 320,372
8
VI(II)
$ 84,942
2
($ 58,102)(
1)
84,942
2
(
58,102)(
1)
(Continued)

4000
Operating revenue
5000
Operating costs
5950
Gross profit from operations
Operating expenses
6100
Selling expenses
6200
Administrative expenses
6300
Research and development
expenses
6450
Gain on expected credit losses
6000
Total operating expenses
6900
Operating income
Non-operating income and
expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Financial costs
7070
Share of profit or loss of
subsidiaries, associates, and joint
ventures accounted for using
equity method
7000
Total non-operating income
and expenses
7900
Profit before tax
7950
Tax expense
8200
Profit
Other comprehensive income,
net
Items that will not be reclassified
to profit or loss
8316
Unrealized valuation gain (loss)
on equity instruments measured
at fair value through other
comprehensive income
8310
Total amount of items that will
not be reclassified to profit or
loss
Items that may be reclassified
subsequently to profit or loss

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman: Shu-Jung Kao

Manager: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

219

Chaintech Technology Corporation Parent Company Only Statements of Comprehensive Income January 1 to December 31, 2023 and 2022

	January 1 to December 31, 2023 and 2022	mber 31, 2023 and 2022
Item	2023 Notes Amount VI(V) ( 12,385) ( 12,385) $ 72,557 $ 234,458 VI(XX) $ VI(XX) $	2023	Unit: NT$ thousands (EPS in NT$) 2022 % Amount % - 8,078 - - 8,078 - 2 ($ 50,024)( 1) 7 $ 270,348 7 1.68 $ 3.32 1.68 $ 3.31
8361 Exchange differences on translation of financial statements of foreign operation 8360 Total amount of items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income, net 8500 Total comprehensive income (loss) Basic earnings per share 9750 Profit Diluted earnings per share 9850 Profit
		$

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Chairman: Shu-Jung Kao

Manager: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

220

Chaintech Technology Corporation Parent Company Only Statements of Changes in Equity January 1 to December 31, 2023 and 2022

Unit: NT$ thousands

2022 Balance as of January 1, 2022 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2021: Legal reserve appropriated Special reserve reversed Cash dividends paid Retirement of treasury shares Balance as of December 31, 2022 2023 Balance as of January 1, 2023 Profit Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of earnings for 2022: Legal reserve appropriated Special reserve appropriated Cash dividends paid Balance as of December 31, 2023	Notes		Ordinary shares	Capital surplus - changes in the net value of the equity of associates and joint venture accounted for using equity method	Capital surplus - changes in the net value of the equity of associates and joint venture accounted for using equity method				Retained earnings				Otherequity	Otherequity	Otherequity	Treasury shares	Treasury shares		Totalequity
							Legal reserve		Special reserve		Unappropriated retained earnings		Exchange differences on the translation of the financial statements of foreign operations		Unrealized gains (losses) on financial assets at fair value through other comprehensive income
	VI(XII) VI(XII)		$ 1,014,988 - - - - - - ( 50,000 ) $ 964,988 $ 964,988 - - - - - - $ 964,988		$ 100 - - - - - - - $ 100 $ 100 - - - - - - $ 100		$ 147,312 - - - 12,222 - - - $ 159,534 $ 159,534 - - - 32,037 - - $ 191,571		$ 39,701 - - - - ( 10,452 ) - - $ 29,249 $ 29,249 - - - - 50,024 - $ 79,273		$ 787,638 320,372 - 320,372 ( 12,222 ) 10,452 ( 57,899 ) ( 101,746 ) $ 946,595 $ 946,595 161,901 - 161,901 ( 32,037 ) ( 50,024 ) ( 77,199 ) $ 949,236		($ 44,750 ) - 8,078 8,078 - - - - ($ 36,672 ) ($ 36,672 ) - ( 12,385 ) ( 12,385 ) - - - ($ 49,057 )		$ 15,501 - ( 58,102 ) ( 58,102 ) - - - - ($ 42,601 ) ($ 42,601 ) - 84,942 84,942 - - - $ 42,341		($ 151,746 ) - - - - - - 151,746 $ - $ - - - - - - - $ -	$ 1,808,744 320,372 ( 50,024 ) 270,348 - - ( 57,899 ) - $ 2,021,193 $ 2,021,193 161,901 72,557 234,458 - - ( 77,199 ) $ 2,178,452

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Manager: Shu-Jung Kao

Chairman: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

221

Chaintech Technology Corporation Parent Company Only Statements of Cash Flows January 1 to December 31, 2023 and 2022

Cash flows from operating activities
Profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation expenses

Depreciation expenses of right-of-use assets
Gain from reversal of expected credit losses
Amortization expenses

Interest income
Interest expenses

Dividend income

Share of profit of subsidiaries accounted for
using equity method

Changes in operating assets and liabilities
Net changes in operating assets
Accounts receivable (including related
parties)
Inventories
Other current assets
Other non-current assets
Net changes in operating liabilities
Accounts payable (including related
parties)
Contract liabilities
Other payables
Other current liabilities
Cash flows generated from operations
Interest received
Dividends received
Interest paid
Income tax paid
Net cash flows generated from operating
activities
Cash flows from investing activities
Acquisition of property, plant and equipment

(Increase) decrease in current financial assets
measured at amortized cost
Acquisition of Intangible assets

Decrease (increase) in prepayments for business
facilities
Increase in refundable deposits
Net cash flows (used in) generated from
investing activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings

Repayments of lease liabilities

Cash dividends paid

Net cash flows used in financing
activities
(Decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

Unit: NT$ thousands
Notes
January 1 to
December 31, 2023
January 1 to
December 31, 2022
$ 228,855 $ 387,789
VI(VI)(XVII)
3,032
10,831
VI(VII)(XVII)
5,575
4,210
XII(II)
(
6,655 ) (
2,152 )
VI(VIII)(XVII)
1,016
129
(
13,218 ) (
1,650 )
VI(XVI)
6,059
5,281
VI(XIV)
(
7,015 ) (
6,100 )
VI(V)
(
74,943 ) (
44,639 )
(
84,018 )
358,069
(
81,495 )
100,906
(
4,290 ) (
1,117 )
(
163 ) (
247 )
129,202 (
252,781 )
(
18 ) (
522 )
(
22,272 )
16,705
156
120
79,808
574,832
13,218
1,650
7,015
6,100
(
5,967 ) (
5,530 )
(
74,595 ) (
56,184 )
19,479
520,868
VI(VI)
(
2,253 ) (
10,236 )
(
4,631 )
29,226
VI(VIII)
(
3,002 ) (
2,351 )
624 (
624 )
- (
750 )
(
9,262 )
15,265
VI(XXI)
45,290 (
226,840 )
VI(XXI)
(
5,643 ) (
4,178 )
VI(XII)
(
77,199 ) (
57,899 )
(
37,552 ) (
288,917 )
(
27,335 )
247,216
601,127
353,911
$ 573,792$ 601,127

The accompanying notes are an integral part of the parent company only financial statements. Please refer to them as well.

Manager: Shu-Jung Kao

Chairman: Shu-Jung Kao

Accounting Supervisor: Yu-Nu Lai

222

Chaintech Technology Corporation Notes to Parent Company Only Financial Statements For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands (Unless specified otherwise)

I. Company History

(I) The original East Chaintech Technology Co., Ltd. was established in November 1986 and was renamed as Chaintech Technology Corporation (hereinafter referred to as the "Company") in January 2013. Approved by the Securities and Futures Bureau as an OTC-listed company in December 1997, the Company was transferred to be a listed company and was listed at the stock exchange market on August 17, 2000. The Company is principally engaged in the business of buying and selling and manufacturing of motherboards, display cards, and computer peripherals.
(II) Colorful Group Ltd. (hereinafter referred to as "the Colorful Group") acquired 10% equity in the Company indirectly through Zhongjie Xingye Co., Ltd., and acquired 100% equity in Yicheng International Development Co., Ltd. (which held 36.2% equity of the Company) in June 2014. Therefore, Colorful Group held 46.2% equity in the Company indirectly, and obtained more than half of the seats in the Company's Board of Directors. In June 2017, Zhongjie Xingye Co., Ltd. sold all the equity of the Company it held. In July 2016, Yicheng International Development Co., Ltd. sold the equity of the Company to 26.11%. As of December 31, 2023, the Colorful Group indirectly held 25.40% of the equity in the Company through Yicheng International Development Co., Ltd.
II. Approval Date and Procedures of the Financial Statements
The parent company only financial statements were approved by the Board of Directors on March 13, 2024.

III. Application of New and Amended Standards and Interpretations

(I) Effect of adopting new and amended International Financial Reporting Standards ("IFRSs") endorsed and issued by the Financial Supervisory Commission, R.O.C ("FSC")
The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed and issued by the FSC that are applicable in 2023:

223

New/Revised/Amended Standards and Interpretations Amendments to IAS 1 "Disclosure of Accounting Policies" Amendments to IAS 8 “Definition of Accounting Estimates” Amendments to IAS 12 "Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction" Amendments to IAS 12 “International Tax Reform - Pillar Two Model Rules”	Effective date issued by the International Accounting Standards Board
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(II) Effect of new issuance of or amendments to the IFRSs endorsed by the FSC but not yet adopted by the Group

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2024:

New/Revised/Amended Standards and Interpretations Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback” Amendments to IAS 1 "Classify Liabilities as Current or Non-current" Amendments to IAS 1 “Non-current Liabilities with Covenants”`」` Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”	Effective date issued by the International Accounting Standards Board
	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

(III) Effect of the IFRSs issued by the IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by the IASB but not yet included in the IFRSs as endorsed by the FSC are as follows:

224

New/Revised/Amended Standards and Interpretations
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of
Assets between an Investor and its Associate or Joint
Venture”
IFRS 17 “Insurance Contracts”
Amendments to IFRS 17 “Insurance Contracts”
Amendments to IFRS 17 “ the initial application of IFRS 17
and IFRS 9 - Comparative Information”
Amendments to IAS 21 "Lack of Exchangeability"

Effective date issued by the
International Accounting
Standards Board

Pending decision by the
International Accounting
Standards Board”
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2025

The above standards and interpretations have no significant impact to the Company's financial condition and financial performance based on the Company's assessment.

IV. Summary of Significant Accounting Policies

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

(I) Statement of compliance

The parent company only financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(II) Basis of preparation

The parent company only financial statements have been prepared based on historical cost convention.
The financial statements prepared in accordance with IFRSs, international accounting standards, interpretations and interpretations (hereinafter referred to as the IFRSs) as endorsed and issued by the FSC are required to be used for the preparation of financial statements. The financial statements of the Company shall also require the use of certain critical accounting estimates. Management requires the use of judgment in applying the Company’s accounting policies. For items involving a higher degree of judgment or complexity, or items where assumptions and estimates are significant to the parent company only financial statements, please refer to Note V for details.

(III) Foreign currency translation

The Company's items listed in the parent company only financial statements are measured and presented in the currency of the primary economic environment in which the Company operates (i.e., functional currency).

Foreign currency transactions and balances

225

(1) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
(2) Foreign currency monetary assets and liabilities are translated at the exchange rate prevailing at the balance sheet date. Exchange differences arising upon the retransaction at the balance sheet date are recognized in profit or loss.
(3) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are retranslated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(4) All exchange gains and losses are presented in the earnings statement of profit or loss within "other gains and losses."
Translation of foreign operations The results and financial position of all the Group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(1) Assets and liabilities for each balance sheet presented are re-translated at the closing exchange rates prevailing at the balance sheet date;
(2) Income and expenses for each composite income sheet are re-translated at the average exchange rates for the period;
(3) All resulting exchange differences are recognized in other comprehensive income.
(4) When a foreign operation is partially disposed of or sold, the cumulative exchange differences that were recognized in other comprehensive income are reclassified to the non-controlling interests in the foreign operation. However, if the Company still retains partial interests in the former foreign associate after losing significant influence over the former foreign associate, such transactions should be accounted for as disposal of all interest in these foreign operations.

226

(IV) Standard of assets and liabilities being classified as current and non-current

Assets that meet one of the following criteria are classified as current assets:
(1) Assets arising from operating activities that are expected to be realized or are intended to be sold or consumed within the normal operating cycle.
(2) Assets held mainly for trading purposes.
(3) Assets that are expected to be realized within twelve months from the balance sheet date.
(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

Assets that do not meet the aforementioned conditions are classified as non-current.

Liabilities that meet one of the following conditions are classified as current liabilities:
(1) Liabilities that are expected to be paid off within the normal operating cycle.
(2) Assets held mainly for trading purposes.
(3) Liabilities that are to be paid off within twelve months from the balance sheet date.
(4) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Liabilities that do not meet the aforementioned conditions are classified as non-current.

(V) Cash equivalents

(VI) Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss refer to financial assets not measured at amortized cost nor measured at fair value through other comprehensive income.
Financial assets at fair value through profit or loss that follow regular way purchase or sale are recognized by the Company using trade date accounting.
At initial recognition, the Company measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

227

Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividends can be measured reliably.

(VII) Financial assets at fair value through other comprehensive income

Changes in fair value of investments in equity instruments that are not held for trading purpose at initial recognition presented in other comprehensive income; or, financial assets meeting the criteria listed below are classified as debt instrument:
(1) The financial asset is held for the purpose of obtaining the contractual cash flows and the sales of the contract.
(2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Company adopts trade date accounting for financial assets measured at fair value through other comprehensive income.
At initial recognition, the Company measures the financial assets at fair value plus transaction costs; the Company subsequently measures the financial assets at fair value. The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following derecognition of the investment. Dividend income is recognized in profit or loss when the right to receive payment is established, and it is probable that the economic benefits associated with the dividend will flow to the Company and the amount of dividends can be measured reliably.

(VIII) Financial assets measured at amortized cost

refers to an asset that meets all of the following conditions:
(1) The financial asset is held within a business model whose objective is achieved by collecting contractual cash flows.
(2) Cash flow generated form the said contractual terms of the financial asset at specific date are solely payments of principal and interest on the principal amount outstanding.
The Company adopts trade date accounting for financial assets that follow regular way purchase or sale measured at amortized cost.
The Company measures financial assets at fair value plus transaction cost at initial recognition, and subsequently recognizes interest income and impairment loss during the circulation period using the effective interest method according to the amortization procedure, and recognizes any gains or losses upon derecognition in profit or loss.

228

(IX) Accounts receivable

Accounts receivable entitle the Company a legal right to receive consideration in exchange for transferred goods or rendered services.
Short-term accounts receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(X) Impairment of financial assets

Considering all reasonable and provable information (including forward-looking information), the Company measured the credit risk that increased insignificantly since original recognition vie the 12-month expected credit loss amount through financial debt instrument at fair value through other comprehensive income, financial asset at amortized cost and accounts receivable significant financial components. For those credit risk increased significantly since original recognition, the allowance loss is measured by the expected amount of credit loss during the existence period; for accounts receivable that do not contain significant financial components, the allowance loss is measured by the amount of expected credit losses during the duration of the period.
(XI) De-recognition of financial assets
Financial assets are de-recognized when the Company's contractual rights to receive cash flows from financial assets are lapsed.

(XII) Operating leases - lessor

Lease income from operating leases less any incentives given to lessees is recognized in profit or loss on a straight-line basis over the term of the lease.

(XIII) Inventories

Inventories are measured at the lower of cost and net realizable value, and cost is determined using the weighted average method. The cost of finished goods and work in process comprises raw materials, direct labor, other direct costs and related production burden. It excludes borrowing costs. The item by item approach is used in comparing the cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of the completion and applicable variable selling expenses.

(XIV) Investments accounted for using equity method - subsidiaries/associates

Subsidiaries refer to all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Unrealized gains and losses resulting from transactions between the Company and its

229

subsidiaries are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Company.

The share of gain or loss and other comprehensive income generated from the subsidiary was recognized as profit or loss of the period and other comprehensive income (loss), respectively. If the Company's share of loss recognized on the subsidiary is equal to or exceeds the equity interest in the subsidiary, the Company will not recognize further losses unless the Company has statutory obligations or deferred obligations or has paid for the subsidiary.
When the Company disposes its investment in an subsidiary and loses significant influence over the subsidiary, the amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over the subsidiary, the amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
Associates are all entities over which the Company has significant influence but does not control. In general, it is presumed that the investor has significant influence if an investor holds directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.
The Company's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company's share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
When an associate’s equity changes are not recognized in profit or loss or other comprehensive income of the associate, and such changes do not affect the Company’s ownership percentage of the associate, the Company recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.
Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates are adjusted, when necessary, to remain consistent with those of the Company.
Where an associate issues new shares and the Company does not subscribe or acquire

230

new shares proportionately, which results in a change in the Company's ownership percentage of the associate but maintains significant influence on the associate, the "capital surplus" and "investments accounted for under the equity method" shall be adjusted for the increase or decrease of its share of equity interest. Where its investment proportion decreases, in addition to the above adjustments, the profit or loss previously recognized in other comprehensive income due to decrease in its ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.

When the Company disposes of any related enterprise, and the significant impact on the related enterprise is thereby lost, the accounting treatment provides that the Company directly dispose of the relevant assets or liabilities for all the amounts previously recognized in other comprehensive income related to the related enterprise, on the same basis, that is, if the interests or losses previously recognized as other comprehensive income are reclassified as profit or loss when the relevant assets or liabilities are disposed, then when the significant impact on the related enterprise is lost, the benefit or loss in equity is concomitantly reclassified as profit or loss. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
According to the "Rules Governing the Preparations of Financial Statements by Securities Issuers," profit for the current period and other comprehensive income for the current period reported in an entity's parent company only statement of comprehensive income shall be equal to profit for the current period and other comprehensive income attributable to owners of the parent reported in that entity's consolidated statement of comprehensive income. Total equity reported in an entity's parent company only financial statements shall be equal to equity attributable to owners of parent reported in that entity's consolidated financial statements.

(XV) Property, plant and equipment

Property, plant and equipment are recorded as the foundation of acquisition cost.
Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replacement is de-recognized. All other repairs and maintenance are recognized as current gain or loss when incurred.
Property, plant and equipment apply the cost model. Except for land, other property, plant and equipment are depreciated using the straight-line method to allocate their cost

231

over their estimated useful lives. If each component of property, plant and equipment is material, it is depreciated separately.

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors," from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Derivative instruments	3 ~ 5 years
Tooling equipment	2 ~ 3 years
Other equipment	3 years

(XVI) Lease transaction in the capacity of a lessee - right-of-use assets/lease liabilities

A right-of-use asset and a lease liability are recognized for a leased asset on the date when it becomes readily available for the Company's use. When a lease contract is a short-term lease or when it is a lease of which the underlying asset is of low value, lease payments are recognized as an expense on a straight-line basis over the lease term.
On the commencement date, the Company measures lease liabilities by the present value of outstanding lease payments, using the Group's incremental borrowing rate. Lease payments include fixed payments less any lease incentives receivable. In subsequent periods, the Group measures lease liabilities at amortized cost using the effective interest method and recognizes interest expenses during the lease term. When a change in the lease term or lease payments occurs due to reasons other than lease modifications, lease liabilities are reassessed and the remeasurements are adjusted to the right-of-use assets.
Right-of-use assets are recognized at cost on the lease commencement date. The cost includes: The originally measured amount of lease liabilities. In subsequent periods, the Group measures right-of-use assets at cost and recognizes depreciation expenses at the earlier of the end of useful life of right-of-use assets or the end of the lease term. When a lease liability is reassessed, the right-of-use asset is adjusted for any remeasurements of the lease liability.
When a lease modification decreases the scope of a lease, the carrying value of the rightof-use asset is decreased to reflect partial of full termination of the lease liability, and any difference resulting therefrom is immediately recognized in profit or loss.

232

(XVII) Intangible assets

The computer software is amortized using the straight-line method over an estimated useful life of 3 years to recognize its cost.

(XVIII) Impairment of non-financial assets

The Company estimates the recoverable amount of assets with signs of impairment on the balance sheet date. When the recoverable amount is lower than its book value, the impairment loss is recognized. The recoverable amount is the higher of an asset's fair value less costs of disposal and its value in use. Where an impairment loss of assets recognized in previous years does not exist or decrease, the impairment loss is reversed. However, the carrying amount of the asset increased by the impairment loss shall not exceed the book value of the asset after abatement the depreciation or amortization if the impairment loss is unrecognized.

(XIX) Borrowings

Borrowings refer to short-term loans from banks. The initial recognition of loans measured at fair value less transaction cost. Any subsequent difference between the price and the redemption value after deducting the transaction cost shall be recognized as interest expense in gain and loss by applying amortization procedure of effective interest method during the circulation period.

(XX) Accounts payable

Accounts payable refer to the debts incurred by purchase of materials, goods, or services on credit, and the notes payable incurred by both operating and non-operating activities.
Short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(XXI) De-recognition of financial liabilities

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

(XXII) Offset of financial assets and liabilities

(XXIII) Employee benefits

Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should

233

be recognized as expenses in that period when the employees render service.

Pension

For the defined contribution plan, the contributions are recognized as pension expenses when they are due on an accrual foundation.

Employees' compensation and directors' remuneration

Employees' compensation and directors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(XXIV) Income tax

Income tax expense comprises current and deferred income tax. Income tax is recognized in gain or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the country domicile where the Company operates and generates taxable income. The management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation and establishes provisions where appropriate, on the basis of amounts expected to be paid to the tax authorities are recorded in tax liability. Undistributed earnings are subject to income tax credit. After the distribution of earnings is approved by the shareholders' meeting in the following year, the Group shall recognize the distribution of earnings and expenses, and recognize the earnings and expenses for the actual earnings.
Deferred income tax adopts the balance sheet approach, and is recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheets. Deferred income tax is not recognized, if the temporary difference arises from initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable income (loss). Deferred income tax is provided on temporary differences arising on investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Company, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and tax laws) that

234

have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

(XXV) Share capital

Ordinary shares are classified as equity. The incremental cost directly attributable to the issue of new shares or options is deducted from the equity in equity after deducting the income tax.
When the Company bought back the issued stocks, the consideration paid includes any incremental costs that are directly attributable to the incremental costs, net of any directly attributable incremental costs. When the shares are subsequently reissued, the difference between the consideration received net of any directly attributable incremental costs and the carrying amount is recorded in the adjustment of stockholder's equity.

(XXVI) Dividend distribution

Dividends are recognized in the Company's financial statements in the period in which they are approved by the Company's shareholders. Cash dividends are recorded as liabilities. Stock dividends are recognized as stock dividends to be distributed and transferred to ordinary shares on the base date of issuance of new shares.

(XXVII) Revenue recognition

Sales of goods
(1) The Company manufactures and sells products related to motherboards, display cards, and computer peripherals. The sales revenue is recognized when the control of the products is transferred to customers. That is, when the product is delivered to the customer, the customer has discretion in the access and price of the product,

235

and the Company has no outstanding performance obligations that may affect the customer's acceptance of the product. When the product is shipped to a designated location, the risk of obsolete and lost risks has been transferred to the customer, and the customer is required to obtain the products in accordance with the sales contract, or when there is objective evidence that all acceptance criteria have been met, the goods are delivered.

(2) Sales revenue is recognized the net amount of contract price minus estimated sales allowance. The amount of revenue recognition is limited to the extent that it is very unlikely to see a significant reversal in the future, and is updated on the balance sheet date. The terms of sales transactions are mainly due to the expiry of 30 to 90 days after the transfer date. It is consistent with the market practice. Therefore, it is judged that the contact does not contain significant financial component.
(3) Accounts receivable are recognized when the control right of commodities is transferred to the customs; that is because the Company has unconditional rights to the contract price since that point in time, and the Company can collect the consideration from the customer once upon the contractual time is expired.
Financial composition

The duration of commitment to transfer commodities or services to customer and the payment period in the contracts between the Company and customers are all less than one year. Therefore, the Company has not adjusted the transaction price to reflect the time value of money.

Costs to acquire contracts from customers

The Company recognizes the incremental costs incurred in the contracts with the customers and that are expected to be recoverable. However, such costs are recognized in expense as incurred since the contracts are less than one year.

V. Significant Accounting Judgments and Sources of Estimation and Assumption Uncertainty

The preparation of the Company's parent company only financial statements requires management to make critical judgments in applying the Company's accounting policies and make critical assumptions and estimates concerning future events according to the conditions on balance sheet date. Material accounting assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such estimates and assumptions possess a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Uncertainties in material accounting judgments, estimates, and assumptions are addressed below:

(III) Significant judgments adopted by accounting policies

None.

236

(IV) Significant accounting estimates and assumptions

Assessment of impairment of goodwill by Shenzhen Jinghong Digital R&D Service Co., Ltd. - investments accounted for using the equity method

The assessment of goodwill impairment relies on the Company’s subjective judgment, including identifying cash-generating units and the allocation of assets and liabilities and intangible assets to the relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units.

VI. Descriptions of Significant Accounting Items

(I) Cash and cash equivalents

Cash on hand and revolving funds Cheque deposits and demand deposits Time deposits Transferred to financial assets measured at amortized cost - current	December 31, 2023 $ 77 521,557 61,410 583,044 ( 9,252) $ 573,792	December 31, 2022 $ 62 605,686 - 605,748 ( 4,621) $ 601,127

The Company associates with a variety of financial institutions, all with high credit quality to disperse credit risk, so it is expected that the probability of counterparty default is extremely low.
The demand deposits as of December 31, 2023 and 2022 provided as security, have been transferred to the "current financial assets measured at amortized cost“ title according to their nature.
For more information on the Company's cash and cash equivalents are provided as collateral, please refer to Note VIII.

(II) Financial assets at fair value through other comprehensive income

Item Non-current Items: Equity Instruments Stocks of publicly quoted entity Shares of non-publicly quoted entity, non- emerging shares Adjustment	December 31, 2023 $ 169,634 15,350 184,984 42,341	December 31, 2022 $ 169,634 15,350 184,984 ( 42,601)

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$ 227,325

$ 142,383

Total

The Company elects to classify the strategic investments in equity as financial assets at fair value through other comprehensive income. The fair value of such investments was NT$227,325 and NT$142,383, respectively, for the years ended December 31, 2023 and 2022.
The breakdown in profit or loss and other comprehensive income of financial assets at fair value through other comprehensive income is as follows:

Equity instruments at fair value through other comprehensive income Changes in fair value recognized in other comprehensive income Dividend income recognized in profit or loss Held at end of period	2023 $ 84,942 $ 7,015	2022 ($ 58,102)
		$ 6,100

For information on the price risk and fair value of financial assets at fair value through other comprehensive income, please refer to Note XII(II) and (III).

(III) Accounts receivable

Accounts receivable Accounts receivable (related parties) Accounts receivable Accounts receivable (related parties)		Tota l $ 192,984 614,091 $ 807,075 Tota l $ 197,279 525,778 $ 723,057	December 31, 2023 Loss allowance Net amount ($ 74) $ 192,910 ( 246) 613,845 ($ 320) $ 806,755 December 31, 2022 Loss allowance Net amount ($ 6,765) $ 190,514 ( 210) 525,568 ($ 6,975) $ 716,082

Aging analysis of accounts receivable is stated as follows:

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Not Past Due Overdue for 1-90 days	December 31, 2023 $ 800,097 6,978 $ 807,075	December 31, 2022 $ 700,741 22,316 $ 723,057

The aging analysis above is based on past due date.

The balance of receivables on contracts with customers as of December 31, 2023, December 31, 2022, and January 1, 2022 was NT$807,075 NT$723,057, and NT$1,081,126, respectively.
Without consideration of the collateral held or other credit enhancements, the maximum credit risk that best represent the Company's accounts receivable as of December 31, 2023 and 2022 amounted to NT$806,755 and NT$716,082, respectively.
For more information on the credit risk of accounts receivable, please refer to Note XII(II).

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(IV) Inventories

December 31, 2023

		December 31, 2023
Raw materials Finished good Inventories in transit	Costs $ 74,129 81,743 45,939 $ 201,811	Allowance for price decline ($ 1,968) ( 140) - ($ 2,108)	Carrying amount $ 72,161 81,603 45,939 $ 199,703

Raw materials Work in progress Finished good	Costs $ 9,792 107,801 5,535 $ 123,128	December 31, 2022 Allowance for price decline ($ 604) ( 167) ( 4,149) ($ 4,920)	Carrying amount $ 9,188 107,634 1,386 $ 118,208

Cost of inventories is recognized by the Company as expenses in the current period:

Costs of inventories sold (Gain from price recovery) loss on price decline of inventory	2023 $ 3,025,609 ( 2,812) $ 3,022,797	2022 $ 3,562,848 2,476 $ 3,565,324

Note: The Company's reported the gain on inventories in 2023 as a result of de-stocking.

(V) Investments using equity method

January 1 Share of profit or loss of investments using equity method Change in other equity December 31	2023 $ 610,557 74,943 ( 12,385) $ 673,115	2022 $ 557,840 44,639 8,078 $ 610,557

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December 31, 2023 Shareholding ratio (%) Listed amount Subsidiary Shenzhen Jinghong Digital R&D Service Co., Ltd. $ 673,115 100 Associates uSenlight Corporation - 6.13 $ 673,115	December 31, 2023	December 31, 2023	December 31, 2022	December 31, 2022
		Shareholding ratio (%)	Listed amount $ 610,557 - $ 610,557	Shareholding ratio (%)
		100 6.13		100 6.13

The share of profit and loss of subsidiaries (losses) recognized by the Company using the equity method is derived from the evaluation of the financial report data from the audited financial statement for the same period. The breakdown is as follows:

Shenzhen Jinghong Digital R&D Service Co., Ltd. uSenlight Corporation	2023 $ 74,943 - $ 74,943	2022 $ 44,639 - $ 44,639

For information on the Company's subsidiaries, please refer to Note IV(III) to the consolidated financial statements for the year ended December 31, 2023.
On January 21, 2020, the Board of Directors resolved to pass the investment in uSenlight Corporation, and acquire a 13.70% equity interest in uSenlight Corporation at the amount of NT$150,000 in April 2020. As the Company has significant influence on uSenlight Corporation in terms of business decision-making, such investment is accounted for using equity method. As of December 31, 2023, the Company held a 6.13% equity interest in uSenlight Corporation, making the Company its single largest shareholder. As the other two largest shareholders (not the Company's related parties) held more than the Company’s shares, the Company had no ability to direct the relevant business activities of uSenlight Corporation. Accordingly, the Company had significant influence but had no control over uSenlight Corporation.

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The basic information of the associates that are material to the Company is as follows:

Company name	Principal place of business	Shareholding ratio December 31, 2023 December 31, 2022 6.13% 6.13%	Measurement method
		December 31, 2023 6.13%
uSenlight Corporation	Republic of China		Equity method

(1) uSenlight Corporation compensated for losses due to capital reduction and issued new shares for capital increase in 2022. However, the Company did not subscribe according to the shareholding ratio, resulting in our shareholding ratio decreasing from 13.05% to 6.13%. Additionally, the Company has made a full reduction on the loss of $97,765 to the book amount of $0 for the investment target in 2021, and we do not intend to continue supporting uSenlight Corporation in the future.
(2) uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The company is currently undergoing dissolution procedures.

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(VI) Property, plant and equipment

January 1, 2023 Costs Accumulated depreciation 2023 January 1 Addition Depreciation expenses December 31 December 31, 2023 Costs Accumulated depreciation January 1, 2022 Costs Accumulated depreciation 2022 January 1 Addition Depreciation expenses December 31 December 31, 2022 Costs Accumulated depreciation	Derivative instruments	Tooling equipment	Others	Total
	$ 6,525 ( 3,913) $ 2,612 $ 2,612 - ( 746) $ 1,866 $ 6,041 ( 4,175) $ 1,866 Derivative instruments	$ 68,769 ( 68,626) $ 143 $ 143 2,253 ( 507) $ 1,889 $ 2,409 ( 520) $ 1,889 Tooling equipment	$ 8,592 ( 2,352) $ 6,240 $ 6,240 - ( 1,779) $ 4,461 $ 7,205 ( 2,744) $ 4,461 Others	$ 83,886 ( 74,891) $ 8,995 $ 8,995 2,253 ( 3,032) $ 8,216 $ 15,655 ( 7,439) $ 8,216 Total
	$ 3,540 ( 3,540) $- $ - 2,985 ( 373) $ 2,612 $ 6,525 ( 3,913) $ 2,612	$ 68,613 ( 59,083) $ 9,530 $ 9,530 156 ( 9,543) $ 143 $ 68,769 ( 68,626) $ 143	$ 1,497 ( 1,437) $ 60 $ 60 7,095 ( 915) $ 6,240 $ 8,592 ( 2,352) $ 6,240	$ 73,650 ( 64,060) $ 9,590 $ 9,590 10,236 ( 10,831) $ 8,995 $ 83,886 ( 74,891) $ 8,995

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(VII) Lease transaction - lessee

The Company's leased underlying assets are buildings, of which the lease term is usually 3 ~ 5 years. Lease contracts are individually negotiated and include various terms and conditions. Except for the term where the leased assets cannot be used as collateral for loans, there are no other restrictions.
Below is the carrying amounts of right-of-use assets and their recognized depreciation expenses:

		December 31, 2023	December 31, 2022
		Carrying amount	Carrying amount
Buildings		$ 13,485	$ 11,033
		2023	2022
	Depreciation expenses		Depreciation expenses
Buildings	$	5,575	$ 4,210

For the years ended December 31, 2023 and 2022, the Company's additions of right-ofuse assets amounted to NT$8,027 and NT$12,281, respectively.
Profit or loss items in connection with lease contracts are stated as follows:

Items affecting profit or loss for the period Interest expenses of lease liabilities Expenses under short-term lease contracts	2023 $ 260 146	2022 $ 296 -

For the years ended December 31, 2023 and 2022, the Company's cash flows used in leases amounted to NT$6,049 and NT$4,474, respectively.

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(VIII) Intangible assets

January 1 Costs Accumulated amortization and impairment January 1 Addition Amortization expenses December 31 December 31 Costs Accumulated amortization and impairment January 1 Costs Accumulated amortization and impairment January 1 Addition Amortization expenses December 31 December 31 Costs Accumulated amortization and impairment		2023
		Computer software
	$ 2,351 129 $ 2,222 $ 2,222 3,002 ( 1,016) $ 4,208 $ 5,353 ( 1,145) $ 4,208 2022
		Computer software
	$ - - $- $ - 2,351 ( 129) $ 2,222 $ 2,351 ( 129) $ 2,222

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(IX) Short-term borrowings

Nature of borrowings December 31, 2023 Interest range Collateral Borrowings

Financial assets measured at Secured loans $ 45,290 6.72% amortized cost - current

No Current borrowings as of December 31, 2023.
Interest expenses recognized in profit or loss for the years ended December 31, 2023 and 2022 were NT$5,799 and NT$4,985, respectively.

(X) Pension

The Company has established a defined contribution retirement plan ("the New Plan") in accordance with the Labor Pension Act, which is applicable to employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees' monthly salaries and wages to the employees' individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
The pension costs recognized by the Company in accordance with the aforesaid pension regulations for the years ended December 31, 2023 and 2022 were NT$2,150 and NT$932, respectively.

(XI) Share capital

As of December 31, 2023, the Company's authorized capital was NT$2,500,000 (of which NT$100,000 was for the issuance of stock options, preferred shares or corporate bonds with warrants), with paid-in capital of NT$964,988 and the face value of NT$10 per share, and the number of outstanding shares was 96,499 thousand.
Treasury shares
(1) The reason for share re-acquisition and movements in the number of treasury stock are as follows:

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Company name of holding securities	Reason for repurchase	December 31, 2023	December 31, 2023	December 31, 2023
		Number of shares (thousand shares) Carrying amount - $- December 31, 2022		Carrying amount
The Company Company name of holding securities	For the transfer of shares to employees Reason for repurchase
			Number of shares (thousand shares) -	Carrying amount
The Company	For the transfer of shares to employees			$-

(2) The Securities Exchange Act stipulates that the proportion of the Company's purchase of shares outstanding shall not exceed 10% of the total number of shares issued by the Company, and the total monetary amount of share purchased shall not exceed the retained earnings plus the share premium and the realized capital reserve amount.
(3) Treasury shares held by the Company may be neither pledged nor assigned shareholder rights in accordance with the Securities and Exchange Act.
(4) According to the Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the repurchase date and shares not reissued within the five-year period are to be retired. To maintain the Company's credit and shareholders' rights to buy back shares, the registration change and elimination shall be handled within 6 months after the buy back. The Company passed a resolution by the board of directors to cancel its treasury shares on November 4, 2022, with a benchmark date of December 12, 2022. The Company completed the registration of the cancellation of 5,000 thousand shares of treasury shares and the change in actual paid-in capital on January 9, 2023.

(XII) Retained earnings

Under the Company's Articles of Incorporation, if there is a surplus in the annual final accounts, in addition to the income tax payable according to law, the Company shall first offset its losses in previous years and set aside a legal capital reserve at 10% of the earnings left over. However, when the accumulated legal capital surplus has equaled the total paid-up-capital of the Company, the said restriction does not apply. After the Company has set aside or reversed the special capital reserve in accordance with relevant laws or the competent authority, along with the earnings not distributed at the beginning of the period, and after retaining part of the surplus depending on the situation, the Board of Directors may propose a surplus distribution proposal and submit it to the

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shareholders' meeting to distribute bonus to the shareholders.

The Company is in stable growth and expands in line with sales development in the future. The future capital expenditures and capital requirement are necessary to be considered first when the Company distribute the earnings. The Board of Directors proposes the distribution plan and distributes the earnings after being approved at the shareholders' meeting. In the annual distribution of shareholder dividends, cash dividend shall not be less than 5%, but if the cash dividend is less than NT$0.1 per share, it may not be issued, and the stock dividend will be distributed instead.
The legal reserve shall not be used except for offsetting the loss of the Company and issuing new shares or cash in proportion to the original number of shares held by the shareholders. However, if it is issued to issue new shares or cash, the said legal reserve shall only exceed 25% at most of the paid-up capital.
(1) When the Company distributes the surplus, it is required by law to provide a special surplus reserve for the debit balance of other equity items on the balance sheet date of the current year. After that, when the debit balance of other equity projects is reversed, the amount of revolving will be included in the surplus available for distribution.
(2) When the Company adopted the IFRSs at first time, for the special reserve listed in the Official Letter of the Financial Management Certificate No. 1010012865 issued on April 6, 2012, the Company reversed the original portion of the said special reserve, and when the Company subsequently uses, disposes of, or reclassifies related assets, they are reversed according to the ratio of the recognized special reserve.
By a resolution in the shareholders' meetings on June 16, 2023 and June 15, 2022, respectively, the Company adopted the earnings distribution plan for the years ended December 31, 2022 and 2021 as follows:

Legal reserve Special reserve (reversal) Cash dividends	2022	2022	2021	2021
	Amount (NT$ thousand)	Dividends Per Share (NT$)	Amount (NT$ thousand)	Dividends Per Share (NT$)
	$ 32,037 50,024 77,199	$ 0.80	$ 12,222 ( 10,452) 57,899	$ 0.60

Please refer to Note VI(XVIII) for information on employees' compensation and directors' remuneration.

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As of March 13, 2024, the Company’s Board of Directors was yet to propose the earnings distribution plan for the year ended December 31, 2023.

(XIII) Operating revenue

Revenue from Contracts with Customers	2023 $ 3,286,618	2022 $ 3,900,444

Breakdown of revenue from contracts with customers

The Company derives revenue from the transfer of goods over time and at a point in time as follows:

Sales revenue: Computer peripherals	2023 $ 3,286,618	2022 $ 3,900,444

Contract liabilities

The contract liabilities in relation to revenue from contracts with customers recognized by the Company are as follows:

Contract liabilities: Unearned sales revenue	December 31, 2023 $ 100	December 31, 2022 $ 118	January 1, 2022 $ 640

(XIV) Other income

Dividend income Other income	2023 $ 7,015 11,750 $ 18,765	2022 $ 6,100 195 $ 6,295

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(XV) Other gains and losses

Net foreign exchange gains (losses) Other losses	2023 ($ 4,047) ( 2) ($ 4,049)	2022 $ 99,185 - $ 99,185

(XVI) Financial costs

Interest expenses: Borrowings Lease liabilities	2023 $ 5,799 260 $ 6,059	2022 $ 4,985 296 $ 5,281

(XVII) Additional information on expenses by nature

Employee benefit expenses Depreciation expenses of property, plant and equipment Depreciation expenses of leased assets Amortization expenses of intangible assets	2023 $ 68,097 3,032 5,575 1,016 $ 77,720	2022 $ 44,121 10,831 4,210 129 $ 59,291

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(XVIII) Employee benefit expenses

Payroll expenses Labor/health insurance expenses Pension expenses Other employment expenses	2023 $ 59,537 3,463 2,150 2,947 $ 68,097	2022 $ 38,585 1,793 932 2,811 $ 44,121

According to the Company's Articles of Incorporation, after deducting the accumulated losses based on the profitability of the current year, if there are still some earnings left, the employee shall be granted no less than 0.1% as compensation, and the directors shall not be paid more than 6% as remuneration.
For the years ended December 31, 2023 and 2022, the accrued amount of employees' compensation was NT$2,384 and NT$4,039, respectively, and the accrued amount of directors' remuneration was NT$7,151 and NT$12,118, respectively; the aforesaid amounts were recognized as payroll expenses.

Information regarding employees' compensation and directors' remuneration approved by the Board of Directors is available on the Market Observation Post System (MOPS).

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(XIX) Income tax

1. Tax expense

Components of tax expense:

.
2023
Current income tax：
Income tax generated in the current period
$ 30,111
Surtax on undistributed earnings
8,056
Under(over)estimate provision of previous year’s
income tax
( 132)
Total current income tax liabilities
38,035
Deferred income tax:
The origination and reversal of temporary
differences
28,919
Tax expense
$ 66,954
Tax expense and accounting profit
2023
Net profit before tax is calculated as income tax at
the statutory tax rate
$ 45,771
Expenses that should be excluded according to tax
laws
( 1,548)
Income exempt from taxation according to tax laws( 1,402)
Tax effects of temporary differences
16,209
Surtax on undistributed earnings
8,056
Under(over)estimate provision of previous year’s
income tax
( 132)
Tax expense
$ 66,954 2022
$ 70,460
3,128
1,899
75,487
( 8,070)
$ 67,417
2022
$ 77,558
806
( 1,220)
( 14,754)
3,128
1,899
$ 67,417

2. Tax expense and accounting profit

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The amount of deferred tax assets that arise from temporary differences from the taxable financial assets are set out below:

	2023	2023
January 1	Recognized in profit or loss	Recognized in other comprehensive income	December 31
$ 664 2,402 9,547 19,948 32,561 ( 3,721) $ 28,840			$ 102 5,244 9,547 19,948 34,841 ( 34,920) ($ 79)
January 1	Recognized in profit or loss	Recognized in other comprehensive income	December 31
$ 169 653 - 19,948 20,770 - $ 20,770	$ 495 1,749 9,547 - 11,791 ( 3,721) $ 8,070	$ - - - - - - $-	$ 664 2,402 9,547 19,948 32,561 ( 3,721) $ 28,840

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The amounts of deductible temporary differences not recognized as deferred tax assets are as follows:

Deductible temporary differences	December 31, 2023 $ 35,903	December 31, 2022 $ 35,394

The revenue service authority has assessed the profit-seeking enterprise income tax of the Company through 2021.

(XX) Earnings per share

	2023
After-tax amount	Weighted average shares outstanding (thousand shares) 96,499 77 96,576 2022	Earnings per share (NT$) $ 1.68 $ 1.68 Earnings per share (NT$) $ 3.32 $ 3.31
$ 161,901 - $ 161,901
After-tax amount $ 320,372 - $ 320,372	Weighted average shares outstanding (thousand shares) 96,499 149 96,648

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(XXI) Changes in liabilities from financing activities

January 1 Changes in cash flows from financing Impact on changes in other non-cash December 31		2023	2023	2023
	Short-term borrowings	Lease liabilities	Changes in liabilities from financing activities
	$ - 45,290 - $ 45,290	$ 11,238 ( 5,643) 8,027 $ 13,622		$ 11,238 39,647 8,027 $ 58,912

January 1 Changes in cash flows from financing Impact on changes in other non-cash December 31		2022	2022
	Short-term borrowings	Lease liabilities	Changes in liabilities from financing activities
	$ 226,840 ( 226,840) - $-	$ 3,135 ( 4,178) 12,281 $ 11,238	$ 229,975 ( 231,018) 12,281 $ 11,238

VII. Related Party Transactions

(XXII) Parent company and the ultimate controller

The Company is controlled by Yicheng International Development Co., Ltd. (incorporated in the Republic of China), which owns 25.4% of the shares of the Company. The rest is held by the public. The ultimate controller of the Company is the Colorful Group.

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(XXIII) Name of related party and relationship with the Group

Name of related parties Relationship with the Company Colorful Technology Co, Ltd (Colorful) 100% reinvestment business by Colorful Group Shenzhen Colorful Yugong Technology and The same person in charge as the Colorful Development Co., Ltd. (Yugong) Group Shenzhen Jinghong Digital R&D Service Co., Subsidiary of the Company Ltd. (Jinghong) Sitonholy (Tianjin) Technology Co., Ltd.(Tianjin Subsidiary of the Company Siton) uSenlight Corporation (uSen) Associates JDX Technology Co.,Ltd. The chairman of the Company serves as this company's supervisor.

(XXIV) Significant transactions with related parties

1. Operating revenue

Sales of goods: Colorful	2023 $ 1,933,079	2022 $ 2,092,517

The Company's transaction prices to related parties are not significantly different from those of the unrelated parties. The payment terms are OA 45~125 days depending on the different transaction object.

Purchase

Product purchase: Colorful	2023 $-	2022 $ 3,776

The Company's transaction prices of purchases to related parties are not significantly different from those of the general manufacturers.

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3. Accounts receivable

Colorful Less: Loss allowance	December 31, 2023 $ 614,091 ( 246) $ 613,845	December 31, 2022 $ 525,778 ( 210) $ 525,568

4. Prepayments

Other related party	December 31, 2023 $ 5,808	December 31, 2022 $-

5. Operating expenses

Subsidiary Jinghong	2023 $ 9,821	2022 $ 9,845

The Company has commissioned a subsidiary to assist the Company in providing technical assistance such as market research and after-sales services and testing and business expansion. Expenses incurred in the aforementioned transactions shall be recorded in the operating expenses. The amounts not yet paid as of December 31, 2023 and 2022 were NT$1,513 and NT$1,595, respectively, and recognized as "other payables."

6. Advertising expense

After the launch of the products jointly developed by the Company and Colorful, both sides have agreed to pay no more than US$60,000 per month as advertising expenses for the related parties. The amounts of advertising expense incurred in 2023 and 2022 were NT$9,024 and NT$10,333, respectively; the amounts not yet paid as of December 31, 2023 and 2022 were NT$5,001 and NT$5,899, respectively, and recognized as "other payables."

7. Endorsements and guarantees made by related parties

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December 31, 2023 December 31, 2022 Subsidiary Tianjin Siton $ 21,635 $ 79,344 - Beijing Siton 35,264 $ 21,635 $ 114,608

(XXV) Key management compensation information

2023 2022 Wages and short-term employee benefits $ 19,044 $ 17,174

VIII. Pledged Assets

The Company's assets pledged as collateral are as follows:

Assets title		Book value	Book value	Book value	Purpose of collateral
		December 31, 2023		December 31, 2022
Financial assets measured at amortized cost - current		$ 9,252		$ 4,621	Balance of short-term borrowings

IX. Significant Contingent Liabilities and Unrecognized Contract Commitments

(I) Contingencies

None.

(II) Commitments
As of December 31, 2023, the Company's guaranteed letter of credit for the purchase was US$1,500 thousand.
As of December 31, 2023, the Company issued a promissory note totaling NT$100,000 for the purchase of goods as a guarantee for the purchase of loan claims.

X. Significant Disaster Loss

None.

XI. Significant Events after the End of the Financial Reporting Period

None.

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XII. Others

(I) Capital management

The Company's objectives in capital management are to safeguard its ability to continue as a going concern in order to maintain optimal capital structure in order to minimize the cost of funding and to provide remuneration for its shareholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares, or sell assets to reduce debt.

(II) Financial instruments

December 31, 2022
$ 142,383
$ 601,127
716,082
4,621
756
$ 1,322,586
$ -
100,675
74,227
$ 174,902
$ 11,238

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Risk management policies
(1) The Company's daily operations are affected by a number of financial risks, including market risk (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk.
(2) The risk management is carried out by the Company's finance department according to the policies approved by the Board of Directors. The Company's finance department identifies, evaluates and hedges financial risks in close cooperation with the Company's internal operating units. The Board of Directors has established written principles for overall risk management, and provides written policies for specific areas and matters such as exchange rate risk, interest rate risk, credit risk, and investment of the remaining current capital.
The nature and degrees of significant financial risks
(1) Market risk

Exchange rate risk

A. The Company is a multinational operation and is exposed to exchange rate risk, which is mainly denominated in USD and RMB. The related exchange rate risk arises from future commercial transactions and recognized assets and liabilities.
B. Business of the Company is involved in a number of non-functional currency (the functional currency of the Company is NTD) and deeply affected by the exchange rate fluctuation. The information of significant impact affected by exchange rate fluctuation for foreign assets and liabilities is as follow:

(Foreign currency: functional currency)	December 31, 2023	December 31, 2023
	Foreign currency($ thousands)	Exchange Rate	Carrying amount (NTD)
Financial assets Monetary items USD: NTD Non-monetary items Investments using equity method RMB: NTD Financial liabilities Monetary items USD: NTD	$ 45,045 $ 155,562 $ 7,487	30.705 4.327 30.705	$ 1,383,107 $ 673,115 $ 229,888

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December 31, 2022

(Foreign currency: functional currency)	Foreign currency($ thousands)	Exchange Rate	Carrying amount (NTD)
Financial assets Monetary items USD: NTD Non-monetary items Investments using equity method RMB: NTD Financial liabilities Monetary items USD: NTD	$ 42,892 $ 138,511 $ 3,197	30.710 4.408 30.710	$ 1,317,213 $ 610,557 $ 98,180

C. The Company's material monetary items affected by the exchange rate fluctuations were recognized as net exchange (losses) gains (including realized and unrealized), which amounted to NT($4,047) and NT$99,185, respectively, for the years ended December 31, 2023 and 2022.
D. The Company's foreign currency market risk analysis due to significant exchange rate fluctuations is as follows:

	2023	2023
	Sensitivity analysis
Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
1% 1% 1%	$ 13,831 $ - $ 2,299	$ - $ 6,731 $ -

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	2022	2022
	Sensitivity analysis
Degree of fluctuation	Impact on profit and loss	Impact on other comprehensive income (loss)
1% 1% 1%	$ 13,172 $ - $ 982	$ - $ 6,106 $ -

Price risk

A. The Company's equity instruments exposed to price risk are financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. To manage the price risk of investments in equity instruments, the Company diversifies its portfolio with its diversification method based on limits set by the Company.
B. The Company's equity instruments issued by the Company are mainly invested in equity instruments issued by the domestic companies, which are affected by the uncertainty of the future value of the investment underlying the investment target. If the prices of these equity instruments increase or decrease by 1%, with all other factors remaining unchanged, other comprehensive income for the years ended December 31, 2023 and 2022 will increase or decrease by NT$2,273 and NT$1,424, respectively due to the gain or loss on equity instruments at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

A. The Company's interest rate risk arises primarily from short-term borrowings issued at variable rates, which expose the Company to cash flow interest rate risk. For the years ended December 31, 2023 and 2022, the Company's borrowings issued at variable rates were mainly denominated in USD.
B. The Company's borrowings are measured at amortized cost and are re-priced at the contract annual rate every year. Therefore, the Company is exposed to the risk of changes in future market interest rates.
C. If the USD borrowing interest rate increases/decreases by 1%, with all other

262

variables held constant, profit before tax for the years ended December 31, 2023 and 2022 will decrease or increase by NT$362 and NT$0, respectively. Changes in interest expense mainly result from floating-rate borrowings.

(2) Credit risk
A. The Company's credit risk is primarily attributable to the risk of financial loss from customers or the counterparty of financial instruments who are unable to fulfill the contract obligation. That credit risk is mainly from the fact that the counterparty is unable to pay off the accounts receivable payable on the terms of the payment and debt instruments classified as amortized cost being measured based on contract cash flows.
B. The Company manages their credit risk taking into consideration the Company's concern. For banks and financial institutions, only those with good credit rating can be accepted as our transaction counterparties. For credit policies established internally, the individual operating entities within the Company shall undergo management and credit risk analysis before setting the terms and proposing the shipment terms and conditions for each new customer. Internal risk control is evaluated by considering its financial position, historical experience and other factors to assess the credit quality of customers. Limits on individual risks are formulated by the Board of Directors based on internal or external ratings and regularly monitored by the Board of Directors.
C. The Company adopts IFRS 9 to make the following assumptions as to whether the credit risk on financial instruments since initial recognition has increased by the following:
- (A) When the contract amount is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk has been significantly increased since the original recognition of the financial assets.
- (B) There are actual or expected significant changes in external credit ratings of financial instruments.
D. The Company adopts IFRS 9 to make assumptions that if the contract amount is overdue for more than 90 days in accordance with the agreed payment terms, it is regarded that a default has taken place.
E. The Company will group the customer's accounts receivable based on the characteristics of the customer's rating and customer type, and use the simplified method to estimate the expected credit loss based on the preparation matrix.
F. The Company conducts individual assessments for accounts receivable that have already defaulted, taking into account the collection status after the reporting period, and recognizes a provision for loss allowance of 0% to 30%.

263

The remainder is estimated based on our credit conditions and forwardlooking considerations to adjust the loss rate established by historical and current information for a specific period so as to estimate the allowance loss for accounts receivable by the said loss rate. The provision matrix as of December 31, 2023 and 2022 is as follows:

December 31, 2023 Expected loss rate Total book value Loss allowance	Individual	Not overdue	Total
	- $ 6,978 $-	0.04% $ 800,097 $ 320	$ 807,075 $ 320

December 31, 2022 Expected loss rate Total book value Loss allowance	Individual	Not overdue	Total
	0%~30% $ 22,316 $ 6,695	0.04% $ 700,741 $ 280	$ 723,057 $ 6,975

G. The statement of allowance loss for accounts receivable of the Company using simplified approach is as follows:

January 1 Reversal of impairment loss December 31	2023 Accounts receivable $ 6,975 ( 6,655) $ 320	2022 Accounts receivable $ 9,127 ( 2,152) $ 6,975

(3) Liquidity risk

A. Cash flow prediction is performed by individual operating entities within the Group and are aggregated by the Group's finance department. The Group's finance department monitors the Group's liquidity requirements predict to ensure that it has sufficient funds to support its operational needs and maintains sufficient unencumbered borrowing commitments at all times so that the Group does not violate the relevant borrowing limits or terms.
B. The surplus cash held by each operating entity will be transferred back to the Group's finance department when it exceeds the management needs of the working capital. The Group's finance department invests the surplus funds in

264

interest-bearing demand deposits and fixed deposits, and the selected instruments have appropriate maturity dates or sufficient liquidity to meet the above forecasts and provide sufficient water and effluents.

C. The following tables detail the Company's non-derivative financial liabilities grouped by the maturity date. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contractual maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.
- Less than 1 year Within 1 2 years Within 2 5 years

December 31, 2023
Non-derivative
financial liabilities:
Lease liabilities	$ 5,987	$ 3,130	$ 5,256

- Less than 1 year Within 1 2 years Within 2 5 years

December 31, 2022
Non-derivative
financial liabilities:
Lease liabilities	$ 5,902	$ 5,714	$ -

Except as stated above, the Company's non-derivative financial liabilities are due within one year.

(III) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks is included in level 1.

265

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

Level 3: Unobservable inputs for the asset or liability. The Company's investment in equity instruments without active market is included.
For financial instruments not measured at fair value, including cash, accounts receivable (including related parties), short-term borrowings, accounts payable, and other payables, their carrying amounts are a reasonable approximation of their fair value.
The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:
(1) The Company classifies its assets and liabilities according to the nature of assets and liabilities as follows:

December 31, 2023 Level 1 A Recurring Fair value Financial assets at fair value through other comprehensive income Equity securities $ 211,975 Total $ 211,975 December 31, 2022 Level 1 A Recurring Fair value Financial assets at fair value through other comprehensive income Equity securities $ 127,033 Total $ 127,033	Level 2 $- $- Level 2 $- $-	Level 3 $ 15,350 $ 15,350 Level 3 $ 15,350 $ 15,350	Total $ 227,325 $ 227,325 Total $ 142,383 $ 142,383

(2) Methods and assumptions the Company used to measure the fair value are as follow:
A. The instruments that the Company uses market-quoted prices as their fair values (i.e., Level 1) are listed below by characteristics:

Stocks of publicly quoted entity

266

Quoted market price

Closing market prices

B. In addition to the aforementioned financial instruments with active markets, the fair value of the remaining financial instruments is obtained by means of evaluation techniques or reference to counterparty quotes. The fair value obtained through evaluation techniques can refer to the current fair value of other substantial financial instruments with similar conditions and characteristics, discounted cash flow method or other evaluation techniques, including calculations based on the market information utilization model available on the date of the consolidated balance sheets (e.g., the reference yield curve offered by Taipei Exchange or the average offer price of Reuters commercial paper interest rate).
C. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Company's financial and non-financial instruments. Therefore, the estimated value of the evaluation model will be adjusted according to additional parameters, such as model risk or liquidity risk. According to the Company's fair value evaluation model management policy and related control procedures, the management believes that the adjustment is appropriate and necessary to recognize the fair value of financial instruments and non-financial instruments in the consolidated balance sheet. The price information and parameter used in the valuation process are carefully evaluated and adjusted appropriately based on current market conditions.
D. The Company absorbs the adjustment of credit risk assessment into the fair value measurement of financial and non-financial instruments to reflect the credit risk of counterparties and the credit quality of the Company.
For the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2.
The following chart indicates the movement of Level 3 for the years ended December 31, 2023 and 2022:

January 1 (i.e. December 31)	2023 Equity Instruments $ 15,350	2022 Equity Instruments $ 15,350

For the years ended December 31, 2023 and 2022, there were no transfers into or out of

267

Level 3.

The finance department of the Company is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable, and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model, and making any other necessary adjustments to the fair value.
Quantitative information and sensitivity analysis of significant unobservable inputs to the valuation models used in the valuation models for Level 3 fair value measurement and the sensitivity analysis of changes in significant unobservable inputs are as follows:

December 31, 2023 Fair value Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350 December 31, 2022 Fair value Non-derivative equity instruments : Shares of non-publicly quoted entity $ 15,350	December 31, 2023 Fair value		Valuation technique	Valuation technique	Significant unobservable input values	Relationship between input value and fair value The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values. Relationship between input value and fair value
					Lack of market liquidity discount and expected volatility of equity value Significant unobservable input values
		Market price method		Lack of market liquidity discount and expected volatility of equity value		The lack of market liquidity discount and higher expected volatility of equity value leads to lower fair values.

The Company carefully evaluates the valuation models and inputs used in selecting the valuation models and inputs that the valuation models may result in different valuation models. For financial assets classified as Level 3, if there are changes in evaluation parameters, the impact on other comprehensive gains and losses is as follows:

268

Input value	Changes	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022
		Recognizedinothercomprehensiveincome
		Favorable changes			Adverse changes
Lack of market liquidity discount and expected volatility of equity value	±1%	$	154	$	154

XIII. Supplementary Disclosures

(I) Information on significant transactions

Capital loans to others: None.
Endorsements and guarantees: Please refer to Table 1.
Marketable securities held at the end of the period (excluding investment in subsidiaries): Please refer to Table 2.
Accumulated purchase or disposal of the same securities amount reaching NT$300 million or 20% of the paid-in capital: None.
Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
Purchases and sales with related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 3.
Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to Table 4.
Derivative transactions: None.

269

Parent-subsidiary and subsidiary-subsidiary business relations and significant transactions and amounts thereof: Please refer to Table 5.
(II) Information on investees
Information on investees (not including investees in Mainland China): Please refer to Table 6.

(III) Information on investments in Mainland China

Basic information: Please refer to Table 7.
Significant transactions between the Group and investees in Mainland China directly or indirectly through entities in a third area: Please refer to Table 8.
(IV) Information on major shareholders

Information on major shareholders: Please refer to Table 9.

XIV.Segment Information

Exempt from disclosure.

270

Chaintech Technology Corporation

Endorsements and Guarantees January 1 to December 31, 2023

Table 1

Unit: NT$ thousands (Unless specified otherwise)

Subject of endorsements and

		Subject of endorsements and	Subject of endorsements and
No. (Note1)	Endorser/Guarantor	guarantees		Ceiling limit on endorsements and guarantees for a single entity (Note 3)	Maximum balance of endorsements and guarantees for the period (Note4)	Balance of endorsements and guarantees at end ofperiod	Endorsements and guarantees used	Endorsements and guarantees secured with collateral	Ratio of aggregated endorsements and guarantees to net value in the most recent financial statements	Ceiling limit on endorsements and guarantees (Note 3)	Parent providing endorsements and guarantees for subsidiary (Note 5)	Subsidiary providing endorsements and guarantees for parent (Note 5)	Endorsements and guarantees involving Mainland China (Note 5)	Remark
		Companyname	Relationship (Note2)
0 0	Chaintech Technology Corporation Chaintech Technology Corporation	Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd.	2 2	$ 1,089,226 1,089,226	$ 80,010 35,560	$ 21,635 -	$ 21,635 -	$ - -	0.99% 0.00%	$ 1,089,226 1,089,226	Y Y	N N	Y Y

Note 6: Explanations are as follows:

(3) The issuer shall fills in 0.
(4) The investees are numbered in alphabetical order beginning with the Arabic numeral 1.
Note 7: The relationships between endorsers/guarantors and endorsees/guarantees are categorized into the following 6 types. Please specify the type.
(7) Companies with which the Group conducts business;
(8) Subsidiaries in which the Group directly holds more than 50% of their common shares;
(9) Investee companies in which the Company and its subsidiaries collectively hold more than 50% of their common shares;
(10) The parent company which holds, directly or indirectly through a subsidiary, more than 50% of its outstanding common shares;
(11) Companies in same type of business and providing mutual endorsements/guarantees in favor of each other in accordance with the contractual obligations in order to fulfill the needs of the construction project; or
(12) Shareholders making endorsements/guarantees for their mutually invested company in proportion to their shareholding ratio.
Note 8: The ceiling limit on endorsements and guarantees provided by the Company, on endorsements and guarantees for a single enterprise, and on endorsements and guarantees provided by the Company and its subsidiaries should be 50% of the net value in the most recent financial statements respectively.
Note 9: The maximum balance of endorsement/guarantee provided to others in the current year.
Note 10: Fill in Y if a listed parent company provides endorsements/guarantees for its subsidiary or if a subsidiary provides endorsements/guarantees for its listed parent company or if endorsements/guarantees involve Mainland China.

271

Chaintech Technology Corporation

Marketable Securities Held at the End of the Period (excluding Subsidiaries, Associates, and Joint Ventures)

December 31, 2023

Table 2


Table 2 Company holding securities	Type and name of securities	Relationship with the issuer of securities	Accounting item		End of period		Unit: NT$ thousands (Unless specified otherwise) Fair value Remark $ 211,975 - 15,350 - 34,616 -
				Number of shares	Carrying amount	Shareholding ratio
Chaintech Technology Corporation Chaintech Technology Corporation Baotou Yihui Information Technology Co., Ltd.	Stocks_APAQ Technology Co., Ltd. Stocks_CloudMile Co., Ltd. (Cayman Islands) Beneficiary certificates_Industrial Bank jinxueqiu tianli express net- value wealth management product	- - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Financial asset at fair value through profit and loss - current	3,050,000 510,204 -	$ 211,975 15,350 34,616	3.43% 1.81% -		- - -

272

Chaintech Technology Corporation

Purchases and Sales with Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

January 1 to December 31, 2023

Table 3 Company	Counterparty	Relationship		Transaction	Transaction		Unusual trade conditions and its reasons	Unusual trade conditions and its reasons	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -	Unit: NT$ thousands (Unless specified otherwise) Ratio of notes and accounts receivable (payable) Balance Percentage of total notes and accounts receivable (payable) Remark $ 614,091 60.56% -
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit period	Unit price	Credit period	Balance	Percentage of total notes and accounts receivable (payable)
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Sales	$ 1,933,079	28.33%	OA 45～125天	不適用	不適用	$ 614,091	60.56%	-

273

Chaintech Technology Corporation

Receivables from Related Parties Reaching NT$100 Million or 20% of Paid-in Capital or More

December 31, 2023

Table 4 Company	Counterparty	Relationship	Balance of receivables from related parties	Turnover rate	Overdue receivables from related parties	Overdue receivables from related parties	Unit: NT$ thousands (Unless specified otherwise) Receivables from related parties recoverable after period Allowances for losses $ 321,184 ($ 246)	Unit: NT$ thousands (Unless specified otherwise) Receivables from related parties recoverable after period Allowances for losses $ 321,184 ($ 246)
					Amount	Handling method
Chaintech Technology Corporation	Colorful Technology Co.,Ltd.	100% reinvestment business by Colorful Group	Accounts receivable $ 614,091	3.39	$ -	-	$ 321,184	($ 246)

274

Chaintech Technology Corporation

Parent-subsidiary and Subsidiary-subsidiary Business Relations and Significant Transactions and Amounts Thereof

January 1 to December 31, 2023

Table 5

Unit: NT$ thousands (Unless specified otherwise)

No. (Note 1)	Company	Counterparty	Relationship with counterparty (Note 2)			Transaction status
				Accounting item	Amount	Transaction terms	Percentage of consolidated total revenue or total assets
0 0	Chaintech Technology Corporation Chaintech Technology Corporation	Shenzhen Jinghong Digital R&D Service Co., Ltd. Shenzhen Jinghong Digital R&D Service Co., Ltd.	Parent company to a subsidiary Parent company to a subsidiary	Operating expenses Other payables	$ 9,821 1,513	Agreed by both parties Agreed by both parties	0.14% 0.04%

Note 3: Information of business contacts between the parent company and subsidiaries shall be specified in No. column. Please fill in the No. column following the instruction:

(3) The parent company is coded 0.
(4) The subsidiaries are coded from "1" in the order presented in the table above.

Note 4: Regarding the percentage of transaction amount to consolidated total revenue or total assets, it is calculated based on the ending balance to consolidated total assets for balance sheet items; it is calculated based on interim accumulated amount to consolidated net revenue for profit or loss items.

275

Chaintech Technology Corporation

Information on Investees (Not Including Investees in Mainland China)

January 1 to December 31, 2023

Table 6

Unit: NT$ thousands

(Unless specified otherwise)

Note 2: uSenlight Corporation held a board resolution on April 7, 2022 and passed a dissolution proposal for the company. It was established that April 26, 2022 would be the dissolution date, and the dissolution registration was made on May 20, 2022. The company is currently undergoing dissolution procedures.

276

Chaintech Technology Corporation

Information on Investments in Mainland China - Basic Information

January 1 to December 31, 2023

Table 7

Unit: NT$ thousands (Unless specified otherwise)

Investee in Mainland China	Main businesses and products	Actual paid-in capital	Method of investment (Note 1)	Accumulated investment amount remitted from Taiwan at beginning of period	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted or recovered	Accumulated investment amount remitted from Taiwan at end of period	Profit or loss of investee for the period	Percentage of ownership (direct or indirect)	Gain (loss) on investment for the period (Note 2)	Carrying amount of investments at end of period	Gain (loss) on investment recovered as of the period	Remark
					Remittance	Recovery
Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd. Beijing Sitonholy Technology Co., Ltd. Baotou Yihui Information Technology Co., Ltd. Sitonholy (Shenzhen) Technology Co., Ltd.	Technology research and development and trading of electronic products, computer hardware, and peripheral devices Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts Electronic products, communication products, computer software and hardware, data processing, storage and support services Wholesale of electronic products, communication products, household appliances, office supplies, computer hardware and software and related spare parts	$ 499,065 110,630 36,824 50,643 13,160	1 3 3 3 3	$ 499,065 - - - -	$ - - - - -	$ - - - - -	$ 499,065 - - - -	$ 74,944 145,517 ( 11,393) 29,964 ( 1,652)	100 51 51 51 51	$ 74,944 74,214 ( 5,810) 15,281 ( 843)	$ 673,115 750,452 39,121 49,375 11,355	$ - - - - -	- - - - -

Note 5: The method of investment in Mainland China includes the following three types:

(4) Direct investment;

(5) Investment in Mainland China through a company set up in a third area; or

(6) Others: Investment in Mainland China through an reinvestment in Mainland China. Note 6: The valuation is recognized in the financial statements audited by the CPAs of the parent company in Taiwan.

Company name	Accumulated investment amount remitted from Taiwan to Mainland China at end of period	Investment amount authorized by Investment Commission, M.O.E.A.	Ceiling on investment in Mainland China regulated by Investment Commission, M.O.E.A.
Chaintech Technology Corporation	$ 499,065	$ 544,794	$ 1,512,491

Note 7: The Group's investment in Shenzhen Jinghong Digital R&D Service Co., Ltd., which was approved by the Investment Commission, Ministry of Economic Affairs on November 26, 2015, at a total amount of US$5 million, was remitted in full.

Note 8: The Group's increase in capital of Shenzhen Jinghong Digital R&D Service Co., Ltd. by US$6.4 million, which was approved by the Investment Commission, Ministry of Economic Affairs on February 1, 2019, was remitted in full.

277

Chaintech Technology Corporation

Information on Investments in Mainland China - Significant Transactions between the Group and Investees in Mainland China Directly or Indirectly through Entities in a Third Area

January 1 to December 31, 2023

Table 8

Unit: NT$ thousands (Unless specified otherwise)

Investee in Mainland China Shenzhen Jinghong Digital R&D Service Co., Ltd. Sitonholy (Tianjin) Technology Co., Ltd.	Sales (purchases)	Property transactions	Accounts receivable (payable)	Endorsements and guarantees or collateral provided	Endorsements and guarantees or collateral provided		Financing	Financing		Others
	Amount % $ - - - -	Amount % $ - - - -	Balance % ($ 1,513) - - -	Balance at end of period	Purpose	Highest balance for the period	Balance at end of period	Interest range	Interest for the period
				$ - 21,635	- Supplier credit limit utilization	$ - -	$ - -	- -	$ - -	Operating expenses $9,821 -

278

Chaintech Technology Corporation Information on major shareholders December 31, 2023

Table 9

Name of major shareholder Yeland International Development Ltd.

Shareholding Number of shares Shareholding ratio 24,517,080 25.40%

Note 3: Information on major shareholders listed above is based on the information on shareholders holding more than 5% of the ordinary shares and preferred shares that have completed non-physical registration and delivery on the last business day of each quarter as calculated by the Taiwan Depository & Clearing Corporation. In addition, share capital stated in the financial statements may vary from the actual number of traded shares with the completion of non-physical registration due to different calculation bases.
Note 4: If a shareholder delivers its shareholding information to the trust, the aforesaid information should be disclosed by the individual trustee who opened the trust account. For the shareholders' declaration of insiders holding more than 10% of the shares in accordance with the Securities and Exchange Act, the number of share held includes the shares held by the shareholders plus the shares delivered to the trust and having the right to decide on the use of trust property. For information on the declaration of insider equity,

please refer to the Market Observation Post System.

279

Chaintech Technology Corporation
Statement of Cash
December 31, 2023
Statement 1
Item
Summary
Cash on hand and petty cash
Cheque deposits and demand deposits
- NTD deposit
- Foreign currency deposit
USD16,760,245.87, exchange rate 30.705
HKD170,303.28, exchange rate 3.929
RMB12,581.25, exchange rate 4.3270
Time deposits
- Foreign currency time deposit
USD2,000,000, exchange rate 30.705
Transferred to financial assets measured at amortized cost - current

Amount
$ 77
6,210
514,623
669
55
61,410
583,044
( 9,252)
$ 573,792

Unit: NT$ thousands

The abovementioned time deposit matures within one year, with an interest rate of 5.30% to 5.35%.

280

Chaintech Technology Corporation - Statement of Changes in Non current Financial Assets at Fair Value through Other Comprehensive Income January 1 to December 31, 2023 Statement 2

Statement 2 Name	Beginning of Period	Beginning of Period	Beginning of Period	Increase for the current period	Increase for the current period	Decrease for the current period	Decrease for the current period	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value 3,050,000 $ 169,634 None. 510,204 15,350 None. 184,984 42,341 $ 227,325	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value 3,050,000 $ 169,634 None. 510,204 15,350 None. 184,984 42,341 $ 227,325	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value 3,050,000 $ 169,634 None. 510,204 15,350 None. 184,984 42,341 $ 227,325	Unit: NT$ thousands End of period Situation of collateral or pledge provided Number of shares Fair value 3,050,000 $ 169,634 None. 510,204 15,350 None. 184,984 42,341 $ 227,325
	Number of shares		Fair value	Number of shares	Amount	Number of shares	Amount	Number of shares		Fair value
Stocks of APAQ Technology Co., Ltd. Stocks of CloudMile Co., Ltd. (Cayman Islands) Adjustment	3,050,000 510,204	$	169,634 15,350 184,984 ( 42,601) $ 142,383	- -	$ - - - 84,942	- -	$ - - - - $-	3,050,000 510,204		$ 169,634 15,350 184,984 42,341 $ 227,325	None. None.

Explanation:

List separately by name and type of financial instrument.
For financial assets invested in debt instruments measured at fair value through other comprehensive income, the column of cumulative impairment shall be filled in. If there is no cumulative impairment, please fill in 0.
For financial assets invested in equity instruments measured at fair value through other comprehensive income, please fill in the column of cumulative impairment, which is not applicable.

281

Chaintech Technology Corporation Statement of Accounts Receivable (Including Related Parties) December 31, 2023

Statement 3 Customer name Non-related party 16L002 16C002 Others Less: Loss allowance Related party Colorful Technology Co.,Ltd Less: Loss allowance	Summary	Amount $ 93,276 92,731 6,977 192,984 ( 74) 192,910 614,091 ( 246) 613,845 $ 806,755	Unit: NT$ thousands Remark The balance of each individual customer does not exceed 5% of the balance of this account

282

Chaintech Technology Corporation Statement of Inventories

December 31, 2023

Statement 4

Unit: NT$ thousands

Item		Amount	Amount	Amount	Remark
		Costs	Market price (Note)
Raw materials Finished good Raw materials in transit Less: Allowance for inventory price decline		$ 74,129 81,743 45,939 201,811 ( 2,108) $ 199,703		$ 72,160 85,450 45,939 $ 203,549	Measured at replacement cost Measured at net realisable value Measured at replacement cost

Note: The above mentioned net realisable value refers to the amount after deducting the allowance for slow-moving inventory of $2,108.

283

Chaintech Technology Corporation Statement of Changes in Investments Accounted for Using Equity Method January 1 to December 31, 2023

Statement 5

Unit: NT$ thousands

Name	Balance at beginning of the period	Balance at beginning of the period	Increase for	the period	Decrease for	the period	Gain (loss) on investment for the period	Others (Note 1)	Balance at end of	Balance at end of	period	period	Market price or net equity	Market price or net equity	Situation of collateral or pledge provided
	Number of shares	Book value	Number of shares	Amount	Number of shares	Amount			Number of shares	Equity %	Book value		Unit price (NT$)	Total
Shenzhen Jinghong Digital R&D Service Co., Ltd. uSenlight Corporation (Note 2)	- 5,000,000	$ 610,557 - $ 610,557	- -	$ - - $-	- -	$ - - $-	$ 74,943 - $ 74,943	($ 12,385) - ($ 12,385)	- -	100% 6.13%		$ 673,115 - $ 673,115	$ - -	$ 673,115 - $ 673,115	None. None.

Note 1: The components are as follows

(1) Share of other comprehensive income of subsidiaries accounted for using equity method

Note 2: The company was dissolved and registered on May 20, 2022, and is currently undergoing dissolution procedures.

284

Statement 6 Creditor	Type of Loans	Chaintech Technology Corporation Statement of Short-term Loans December 31, 2023 Balance at end of period Contract Period (YYYY/MM/DD) $ 45,290 112.12.20~113.04.18	Chaintech Technology Corporation Statement of Short-term Loans December 31, 2023 Balance at end of period Contract Period (YYYY/MM/DD) $ 45,290 112.12.20~113.04.18	Chaintech Technology Corporation Statement of Short-term Loans December 31, 2023 Balance at end of period Contract Period (YYYY/MM/DD) $ 45,290 112.12.20~113.04.18	Chaintech Technology Corporation Statement of Short-term Loans December 31, 2023 Balance at end of period Contract Period (YYYY/MM/DD) $ 45,290 112.12.20~113.04.18	Line of credit	Unit: NT$ thousands Pledge or Guarantee Remark None.	Unit: NT$ thousands Pledge or Guarantee Remark None.
				period
Taipei Fubon Bank Note: Interest range is	Credit loans 6.72%.		$ 45,290		112.12.20~113.04.18	$ 122,820	None.

285

Chaintech Technology Corporation Statement of Accounts Payable December 31, 2023

Unit: NT$ thousands

Statement 7 Customer name Non-related party 005505 005507 002886 Others	Summary	Amount $ 153,044 45,384 29,745 1,704 $ 229,877	Unit: NT$ thousands Remark The balance of each individual customer does not exceed 5% of the balance of this account

286

Chaintech Technology Corporation Statement of Operating Revenue January 1 to December 31, 2023

Statement 8

Unit: NT$ thousands

Item Operating revenue: Computer peripherals Less: Sales returns and allowances Net operating revenue	Quantity 766,000 pcs	Amount $ 3,418,395 ( 131,777) $ 3,286,618	Remark

287

Chaintech Technology Corporation Statement of Operating Costs January 1 to December 31, 2023

Statement 9

Unit: NT$ thousands

Item
Raw materials and materials at beginning of period
Add: Net amount of materials purchased in the current period
Less: Raw materials sold
Raw materials and materials at end of period
Raw materials consumed in this period (1)
Manufacturing cost - processing cost (2)
Manufacturing expenses - depreciation (3)
Total manufacturing costs (1)+(2)+(3)
Add: Work in progress at beginning of period
Less: Work in progress at end of period
Finished good cost
Add: Finished good at beginning of period
Purchases in this period
Less: Finished good at end of period
Reclassified as operating expenses
Sales cost of finished good
Gain from price recovery of inventory falling price
Raw materials sold
Total operating costs

Amount
$ 9,792
2,262,271
( 343,012)
( 120,068)
1,808,983
50,708
-
1,859,691
107,801
-
1,967,492
5,535
791,377
( 81,743)
( 64)
2,682,597
( 2,812)
343,012
$ 3,022,797

288

Chaintech Technology Corporation Statement of Operating Expenses January 1 to December 31, 2023

Statement 10

Unit: NT$ thousands

Item Salary expenses Advertising expense Services expenses Royalty Shipping expenses Depreciation Entertainment expenses Miscellaneous purchases Other expenses (Note)	Selling expenses	Administrative expenses	Research and development expenses	Total
	$ 2,651 14,245 12,298 3,618 3,863 548 729 - 1,364 $ 39,316	$ 17,495 - 5,272 - 11 494 2,472 13 5,570 $ 31,327	$ 41,541 106 5,028 1,163 14 7,565 378 2,199 9,802 $ 67,796	$ 61,687 14,351 22,598 4,781 3,888 8,607 3,579 2,212 16,736 $ 138,439

Note: The amount of each individual item does not exceed 5% of the total amount of this account.

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Chaintech Technology Corporation

Summary Statement of Current Period Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function January 1 to December 31, 2023

Statement 11 Unit: NT$ thousands

Function category Nature	2023	2023	2023	2022	2022	2022
	Operation Costs	Operation Expenses	Total	Operation Costs	Operation Expenses	Total
Employee benefit expenses
Payroll expenses	$ -	$ 52,078	$ 52,078	$ -	$ 26,179	$ 26,179
Labor/health insurance expenses	-	3,463	3,463	-	1,793	1,793
Pension expenses	-	2,150	2,150	-	932	932
Remuneration Paid to Directors	-	7,459	7,459	-	12,406	12,406
Other employment expenses	-	2,947	2,947	-	2,811	2,811
Depreciation expenses	-	8,607	8,607	9,530	5,511	15,041
Amortization expenses	-	1,016	1,016	-	129	129

Notes:

The number of employees for the current and previous years is 50 and 25, respectively, with 6 and 6 directors who are not employees.
Companies whose stocks have been listed on the stock exchange or traded on the OTC market shall disclose the following information:
(1) The average employee benefit expenses for the current year is $1,378 (the total employee benefits minus directors' remuneration for the current year, divided by “ the number of employees excluding the number of directors who are not employees for the current year ). The average employee benefit expenses for the previous year is $1,669 (the total employee benefits minus directors' remuneration for the previous year, divided by “ the number of employees excluding the number of directors who are not employees for the previous year).
(2) The average employee payroll expenses for the current year is $1,184 (the total employee payroll expenses for the current year, divided by “ the number of employees excluding the number of directors who are not employees for the current year ).
- The average employee payroll expenses for the previous year is $1,378 (the total employee payroll expenses for the previous year, divided by “ the number of employees excluding the number of directors who are not employees for the previous year ).
(3) The average adjusted change of employee payroll expenses is (14.08%) ( average employee payroll expenses for the current year minus average employee payroll expenses for the previous year, divided by average employee payroll expenses for the previous year).

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Chaintech Technology Corporation

Summary Statement of Current Period Employee Benefits, Depreciation, Depletion and Amortization Expenses by Function January 1 to December 31, 2023

Statement 11

Unit: NT$ thousands

(4) The remuneration policy of the Company:

The remuneration policy for directors and managers of the Company is submitted to the Remuneration Committee for review in accordance with the provisions of the " Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange". The remuneration policy for managers mainly takes into account personal experience, performance, level of participation in company operations, value of contributions, and company performance; The remuneration policy for employees, directors, and supervisors shall be implemented in accordance with the company's articles of association for the year in which the company has earnings. Employee remuneration includes basic salary, various allowances, job bonuses, and other bonuses. The basic salary is determined based on their academic experience, professional skills, and job value, taking into account the salary level of their peers; The distribution of bonuses depends on the company's annual operating earnings and the achievement of departmental and individual performance.

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VI. Financial Difficulties of CHAINTECH and Its Affiliates in the Most Recent Year to the Publication Date of this Annual Report and their Impact on the Company's Financial Conditions: None.

Chapter 7. Analysis for Financial Condition and Operating Results and Risk Management

I. Financial Condition: The main reason for the significant changes in assets, liabilities, and shareholders' equity in the past two years, and the impact of such changes; if such changes are significant, future countermeasures should be stated.

Year Item	2023	2022	Difference	Difference
			Amount	%
Current assets	3,125,777	2,743,209	382,568	13.95
Investment using equity method	-	-	-	-
Property, plant, and equipment	18,423	20,490	(2,067)	(10.09)
Intangible assets	177,239	181,275	(4,036)	(2.23)
Other assets	339,692	118,965	220,727	185.54
Total assets	3,661,131	3,206,322	454,809	14.18
Current liabilities	1,088,984	875,750	213,234	24.35
Non-current liabilities	51,330	23,521	27,809	118.23
Total Liabilities	1,140,314	899,271	241,043	26.80
Share capital	964,988	964,988	-	-
Capital surplus	100	100	-	-
Retained earnings	1,228,080	1,135,378	92,702	8.16
Other equity	(6,716)	(79,273)	72,557	(91.53)
Treasury shares	-	-	-	-
Total equity attributable to owners ofthe parent company	2,178,452	2,021,193	157,259	7.78
Non-controlling interests	342,365	285,858	56,507	19.77
Total equity	2,520,817	2,307,051	213,766	9.27

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Analysis of changes in the percentage of increase and decrease: (more than 20% and the amount of change reaching NT$10 million)

The increase in current assets: Mainly due to the increase in inventory and prepayments during the year.
Decrease in property, plant and equipment: It is mainly due to the apportionment of depreciation expense in the current year.
Increase in other assets: It is mainly due to the increase in valuation of the financial assets at fair value through other comprehensive income.
Increase in total liabilities: It is mainly due to the increase in accounts/notes payable and contract liabilities in the current year.
Increase in other equities: Mainly due to the unrealized valuation of non-current financial assets measured at fair value through other comprehensive gains and losses and the difference in the conversion and exchange of subsidiaries.
Increase in uncontrolled interests: Mainly due to the increase in the income from the reinvested company.
II. Financial Performance: The main reasons for the significant changes in operating revenue, operating profit, and net profit before tax in the most recent two years, and the expected sales volume and its basis, as well as the possible impact on the Company's financial condition and countermeasures.

Unit: NT$ thousands

Year Item	2023	2022	Increase (decrease) amount	Change ratio ％
Net operatingrevenue	6,823,399	6,198,674	624,725	10.08
Operatingcosts	6,140,927	5,575,814	565,113	10.14
Grossprofit	682,472	622,860	59,612	9.57
Operatingexpenses	457,351	308,774	148,577	48.12
Operatingincome	225,121	314,086	(88,965)	(28.33)
Non-operating income and expenses	78,397	116,798	(38,401)	(32.88)
Profit before tax	303,518	430,884	(127,366)	(29.56)
Tax expense	(70,313)	(67,419)	(2,894)	4.29
Profit	233,205	363,465	(130,260)	(35.84)
Analysis of changes in the percentage of increase and decrease: 1. Increase in operating revenue, operating costs, and operating operating margin: Mainly due to the increase in operating revenue compared to the same period of the current year. 2. Increase in operating profits: Mainly due to the decrease in operating expenses for the current period. 3. Increase in operating expenses: Mainly due to the increase in operating revenue and research and development expenses for the current year resulting in an increase in operating expenses for the currentperiod.

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Decrease in non-operating incomes: Mainly due to the exchange loss for the current period resulting in an decrease in the non-operating income for the current year.
Decrease in net profit for the period: Mainly due to the impact of exchange losses resulting in an decrease in the net profit for the current period of this year.
III. Cash Flow: Analysis of changes in cash flow in the most recent year, improvement plans for liquidity shortage, and cash liquidity analysis for the upcoming fiscal year.
(I) Liquidity analysis in the most recent two years

Year Item	2023	2022	Increases (decreases)ratio %
Cash flow ratio	8.93	66.9	(86.65)
Cash flow adequacyratio	96.4	185.77	(48.11)
Cash reinvestment ratio	0.47	22.88	(97.95)
Analysis of changes in the percentage of increase and decrease: Increase/decrease in various cash flow ratios compared to the previous year: Due to the decrease in net cash inflow duringtheyear as compared with the currentperiod.

(II) Cash liquidity analysis for the following year.

Cash Flow Analysis

Unit: NT$ thousands

				Unit: NT$thousands	Unit: NT$thousands
Cash balance at beginning of the period	Net cash flow from operating activities for the year	Cash outflow for the year	Cash surplus (inadequacy) +-	Remedial measures for cash inadequacy
				Investment plans	Financial plan
1,089,206	(62,331)	51,000	975,875	0	0
Analysis of the changes in cash flow: 1. Business activities: Mainly due to the estimated increase in revenue resulting in cash outflows.

IV. Impact of Major Capital Expenditures on Corporate Finances and Business for the Most Recent Year
CHAINTECH had no significant capital expenditure in the most recent year.
Expected benefits: N/A

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V. Policy on Reinvestment in Other Companies, the Main Reasons for Profit/Loss Resulting Therefrom, Improvement Plan, and Investment Plans for the Upcoming Fiscal Year
Newly added investment businesses in the most recent year: None.
Reasons for the profit or loss from reinvestment and improvement plans:

easons for the profit or loss from reinvestment and improvement plans:	easons for the profit or loss from reinvestment and improvement plans:	easons for the profit or loss from reinvestment and improvement plans:	easons for the profit or loss from reinvestment and improvement plans:	easons for the profit or loss from reinvestment and improvement plans:
Unit: NT$thousand
Name of reinvestment companies	Initial amount of investment at the end ofperiod	Profit or loss of investee for theperiod	Reason	Improvement Plan
Shenzhen Jinghong Digital R&D Service Co.,Ltd	499,065	74,944	`－`	`－`

Investment Plans for the Next 12 Months: None.

295

VI. Risk Management and Assessment

(I) The Organizational Structure of Risk Management

The implementation and responsible units of CHAINTECH's risk management are as below:

Risk Items	Responsible Department	Risk Business Items
Operational Strategy Risk	General Manager Office	Construct corporate value and principles, formulate annual operating strategies, mid-to-long-term operational objectives, and evaluate investment returns in combination with the Group’s core competitiveness, industrial trends, and international economy.
Financial Risk	Financial Division	Provide transparent and credible financial information, operational analysis and improvement plans, and make appropriate financial planning, interest rate risk hedging, customer credit risk control, account collection, and financial crisis forecasts to reduce corporate risks.
Legal risks	Financial Division	Responsible for the preparation and management of contracts, disposal of litigation and mediation cases, collection of laws and regulations, intellectual property and business secrets protection, bad debt collection and the like, to reduce the overall legal risks of theCompany.
Information Risk	Financial Division	Plan and construct information management system, be in charge of network and system information security control, protection measures and system recovery mechanism, and provide real-time, accurate and suitable management information to the management, so as to reduce the Company's operations and information securityrisks.
Inventory risk	Material Division	Procure raw materials and finished products, and undertake OEMcontracting businesses andinventorymanagement.
Internal Risk	Auditing Office	Draft and implement the annual audit plan based on the results of risk evaluation, evaluate the effectiveness of the design and implementation of the Company's internal control system, and assist the risk management organization and operational unit in designingrisk management-based control operations.

(II) Impact of interest rates and exchange rate fluctuations, as well as inflation on the Company’s profit and loss, as well as future response measures:
Changes in interest rates

Apart from share capital and operation profit, CHAINTECH's working capital mainly depends on the bank loan. A bank loan is a kind of liability with a floating interest rate, so market interest rate changes will also change the effective interest rate and interest costs, thus influencing the profit or loss of CHAINTECH.

As of December 31, 2023, the balance of CHAINTECH's bank loan was NT$196,735 thousand, and if the market interest rate increased or reduced by 1%, the Company's net loss before tax would decrease or increase by NT$1,967 thousand on the condition that other factors remain unchanged, which accounted for 0.029% of our consolidated net revenue, having no significant effect on the overall net income after tax.

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CHAINTECH's countermeasures for changes in interest rates are as below:

A. Maintain close contact with banks to obtain a preferential interest rate and actively reduce interest expenses.
B. Refer to the interest rate volatility in domestic and overseas index markets to grasp the future trend of the interest rate.
Changes in exchange rates

CHAINTECH is mainly engaged in foreign sales in the US dollar. Therefore, CHAINTECH will also take US$ as the payment currency in procurement as much as possible to reduce the amount of foreign currency held. In addition, the financial department of CHAINTECH maintains close contact with banks' foreign exchange department to keep abreast of the trend of the exchange rate as the basis for exchange settlement, thus reducing the risks arising out of exchange rates. The future countermeasures are as below:

(1) Effects on CHAINTECH's profit or loss: CHAINTECH's consolidated loss from the exchange in 2023 was NT$3,303 thousand, accounting for 0.048% of the consolidated net income of the year; there overall exchange profit or loss would not result in any significant effect.
(2) Future Remedial Measures:
- A. Pay close attention to the development of domestic and foreign political and economic conditions and maintain contact with financial institutions to keep abreast of the changes in the exchange rate.
- B. Make judgment upon the trend of the future exchange rate, and adjust the USD holding when appropriate, so as to create the most optimal exchange gain.
- C. Hedge possible risks of foreign currency with forwarding exchange contracts and select credit-worthy financial institutions to enter into contracts.
- D. Engage in transactions with steady hedging means instead of speculative ones as the principle for responding to exchange rate risks.
Inflation

CHAINTECH always pays attention to the price fluctuation of raw materials, maintains good interaction with suppliers, and preset the procurement quantity by judging the price trend of raw materials, so as to lower the impact of price increases.

(III) Policy regarding High-risk Investments, Highly Leveraged Investments, Loans to Other Parties, Endorsements/Guarantees, and Derivatives Transactions, Main Reasons for the Profit (Loss) Generated Thereby, and Response Measures to Be Taken in the Future:
High-risk and highly leveraged investment policies: The Company's policy is to engage in non-high risk and non-high leveraged investments.
Derivative products transaction policy: CHAINTECH follows the principle of hedging against risks in substantial positions, and disposes of related matters according to the

297

provisions of "Procedures for Acquisition and Disposal of Assets." CHAINTECH didn't get engaged in derivative financial product transaction in 2023.

Loan to other parties: CHAINTECH's capital loan is only limited to parent company and subsidiaries, to the exclusion of shareholders or any other parties. In the fiscal year 2023, the Company did not engage in capital loans to others.
Endorsements and Guarantees for other parties: CHAINTECH may conduct endorsement/guarantee for the companies in which it directly or indirectly holds more than 90% of the voting shares. The endorsement and guarantee provided by CHAINTECH during 2023 were made according to the "Endorsement/ Guarantee Operating Procedures" formulated by CHAINTECH.
(IV) Research and development work to be carried out in the future, and further expenditures expected for research and development work
Future research and development plan
- (1) Display cards

Develop high, medium and low end gaming graphics cards by using the latest NVIDIA Ada Lovelace series chipset to ensure that products in each price range are allocated in a reasonable proportion. Plus, for advanced gamers, we will develop e- sports graphics cards with core overclocking, high power consumption and outstanding heat dissipation performance.

(2) Motherboard
A. Develop iGame series gaming motherboard, including Vulcan, Ultra, and Gaming MINI iTX series by using the latest Intel 800 series high-end chipset.
B. Develop the AMD AM5 800 series medium-end motherboard, including the plan for CVN, BATTLE-AX, and Netscape series product line.
C. Development of UEFI multi-language graphical BIOS enhanced version.
D. Development of industrial control mainboards is mainly targeted at industries such as: Tax control finance, digital signage, retail cash register, cloud storage, commercial gaming, multi-screen output, mini computer, customized brand whole machine and other fields of use.
(3) High-performance data computing solutions
A. The next generation of artificial intelligence deep learning, machine learning, big data analysis, and high-performance scientific computing applications are included.
B. Explore marginal computing and AI solutions in the industrial field; Explore automated machine learning and business AI solutions; Explore opportunities for cloud computing services.

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Estimated R&D spendings:

In order to maintain CHAINTECH's competitiveness, CHAINTECH has diversified product research and development and attached great importance to resource input for R&D. The estimated research and development expenses to be invested in 2024 are expected to increase by approximately 25% compared to 2023.

(V) Changes in domestic and overseas policies and laws that impact the company’s financial operations and countermeasures:

There have been no matters arising out of changes in domestic and overseas laws that have influenced CHAINTECH's finance and business in the most recent year. The operating team of the Company will continuously pay close attention to the changes in policies and laws that may affect CHAINTECH's operation, and make quick response thereof.

(VI) Impact of changes in technology and industry on the Company’s financial operations, and related countermeasures:

In recent years, the biggest change in technology lies in electronization, and CHAINTECH has also been electronized as well. Whether in internal procedures or external connections, it has applied the newest technologies, hence lowering the cost.

(VII) Effect on the Crisis Management of Changes in the Corporate Image, and Measures to Be Taken in Response:

CHAINTECH has always valued corporate image and risk management. Currently, there is no foreseeable crisis. If there are matters occurring that influence CHAINTECH's corporate image or lead to enterprise crisis, CHAINTECH will set up a project team that is in full charge of formulating the countermeasures.

(VIII) Expected Benefits and Possible Risks Associated with Any Mergers and Acquisitions, and Measures to Be Taken in Response: None.
(IX) Expected Benefits and Possible Risks Associated with Any Plant Expansion, and Measures to Be Taken in Response: None.
(X) Risks Associated with Any Consolidation of Sales or Purchasing Operations:
In terms of the procurement: CHAINTECH follows the raw material procurement policy of maintaining two or more suppliers and diversifying raw material sources while keeping longterm close partnership with suppliers to ensure the sufficient supply of raw materials. In terms of sales: Although CHAINTECH's sales are concentrated in some regions, the Company has established long-term cooperative relationships with its existing customers. On the other hand, CHAINTECH will also strive to develop new customers to expand and diversify the distribution channels and strive to reduce the risks concerning sales concentration.
(XI) Impact and risk of the mass transfer or change of shares of the directors, supervisors or major shareholders holding more than 10% of the shares of the Company, and measures to be taken in response:

299

The Company's major shareholder, "Colorful Group," holds 29.57% of the Company's stocks indirectly through "Yiland International." Due to financial planning considerations, they plan to sell a portion of their shares in 2023, reducing their ownership to 25.40%. As of the printing date of the annual report, "Yiland International" remains the largest shareholder of the Company and holds three director seats in the Company, therefore the transfer of shares has no impact or risk on the Company.

(XII) Impact and risk associated with changes in management rights, and countermeasures: None.
(XIII) For litigation or non-litigation events, the major litigation, non-litigation or administrative dispute cases that have been judged or are pending of the Company and its directors, President, substantial responsible persons, major shareholders holding more than 10% of the shares and its affiliates shall be listed; if the results of which are likely to have a material impact on shareholders' equity or the price of securities, the facts in dispute, the amount of the subject matter, the commencement date of the proceeding, the principal parties involved and the disposition as of the date of publication of the annual report shall be disclosed: None.
(XIV) Other important risks and countermeasures: None.

VII. Other important items: None.

300

Chapter 8. Special Notes

I. Information on Affiliated Companies

(I) Consolidated Business Report of Affiliated Companies
Organization chart of affiliated companies

==> picture [406 x 375] intentionally omitted <==

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

Chaintech Technology Corporation
Shenzhen Jinghong Digital R&D
Service Co., Ltd.
100%
Sitonholy (Tianjin) Technology Co.,
Ltd.
51%
Baotou Yihui Sitonholy
Beijing
(Shenzhen)
Information
Sitonholy
Technology Co.,
Technology Co.,
Technology Co., Ltd. 100%
Ltd.
Ltd.
100%
100%
----- End of picture text -----

301

2. Basic information of affiliated companies

Unit: NT$ thousands

				Unit: NT$thousands
Name of business	Date of Incorporation	Address	Actual paid-in capital	Main business or production items
Shenzhen Jinghong Digital R&D Service Co.,Ltd	Aug. 2012	Room 305B, 3rd floor, Building 3, Meilin Duoli Industrial Zone, North Ring Road, Meifeng Community, Meilin Street, Futian District, Shenzhen City.	NT$499,065	Technology research and development and trading of electronic products, computer hardware, and peripheral devices
Sitonholy (Tianjin) Technology Co., Ltd.	July 2018	No. 1 Cui Pu Road, Yixianyuan Science Industrial Park, Wuqing District, Tianjin City, PRC	NT$110,630	Wholesale of electronic products, communication products, computer hardware and software and related spare parts
Beijing Sitonholy Technology Co., Ltd.	May 2012	Room 317, 3F, Building 29, Court 9, Anningzhuang West Road, Haidian District. Beijing City, PRC	NT$36,824	Wholesale of electronic products, communication products, computer hardware and software and related spare parts
Baotou Yihui Information Technology Co., Ltd.	2012.09	A308 Software Park Building, Rare Earth Development Zone, Baotou City, Inner Mongolia Autonomous Region	NT$50,643	Electronic products, communication products, computer software and hardware, data processing, storage and support services
Sitonholy (Shenzhen) Technology Co., Ltd.	2022.12	Room 1102A, 11th Floor, Technology Building, Dolly Industrial Zone, No. 105 Meihua Road, Meifeng Community, Meilin Street, Futian District, Shenzhen City	NT13,160	Wholesale of electronic products, communication products, computer hardware and software and related spare parts

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For those who are concluded as the existence of the controlling and subordinate relations, the information of the same shareholders: None.
Industry and interactive division of labor of overall affiliated companies:
(1) Industry: Electronics and R&D Centers.
(2) Interactive division of labor situation:
- a. CHAINTECH is responsible for the order receiving, procurement and sales.
- b. Shenzhen Jinghong Digital R&D Service Co., Ltd. is responsible for product research and development and trading of electronic peripherals.
- c. The Company invested in Sitonholy (Tianjin) technology Co., Ltd, responsible for the production & manufacturing and sales of server products, through Jinghong.
- d. The Company invested in Beijing Sitonholy technology Co., Ltd, responsible for the production & manufacturing and sales of server products, through Sitonholy (Tianjin) technology Co., Ltd.
- e. The Company invested in Baotou Yihui Information Technology Co., Ltd. through Sitonholy (Tianjin) Technology Co., Ltd., responsible for computer hardware and software, data processing, storage, and support services.
- f. The Company invested in Sitonholy (Shenzhen) Technology Co., Ltd., responsible for the production & manufacturing and sales of server products, through Sitonholy (Tianjin) technology Co., Ltd.

303

5. Information of directors, supervisors, and general managers in all affiliated companies:

Unit: Shares; %

			Unit: Shares;%	Unit: Shares;%
Name of business	Title	Name or representative	Number of Shares Held
			Number of shares	Shareholdingratio
Shenzhen Jinghong Digital R&D Service Co.,Ltd	Chairman of the Board	Chaintech Technology Corporation Representative: Chu,Ping	Note	100%
Sitonholy (Tianjin) Technology Co., Ltd.	Chairman of the Board Director Supervisor Supervisor	Tianjin Daweisi Technology Center Representative: Wang, Wei Shenzhen Jinghong Digital R&D Service Co.,Ltd Representative: Chu, Ping Representative: Yang, Li-ping Tianjin Daweisi Technology Center Representative: Guo, Rui-Ling Shenzhen Jinghong Digital R&D Service Co.,Ltd Representative: He, Bo	Note	51%
Beijing Sitonholy Technology Co., Ltd.	Chairman of the Board Supervisor	Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Wei Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Shou-Zheng	Note	100%
Baotou Yihui Information Technology Co., Ltd.	Chairman of the Board Supervisor	Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Wei Sitonholy (Tianjin) technology Co., Ltd Representative: Cheng, Wei	Note	100%
Sitonholy (Shenzhen) Technology Co., Ltd.	Chairman of the Board Supervisor	Sitonholy (Tianjin) technology Co., Ltd Representative: Wang, Wei Sitonholy (Tianjin) technology Co., Ltd Representative: He,Bo and Guo,Rui-Ling	Note	100%

Note: A company with limited liability; therefore, no number of shares.

304

6. Operation Overview of Affiliated Companies

Unit: NT$ thousands

Name of business	Capital	Total Assets	Total Liabilities	Net Value	Operating revenue	Operating income	Profit or Loss (after tax)	Earnings per share (NT$) (after tax)
Shenzhen Jinghong Digital R&D Service Co.,Ltd	499,065	705,022	31,907	673,115	68,384	62	74,944	-
Sitonholy (Tianjin) Technology Co., Ltd.	110,630	1,349,134	598,682	750,452	3,3131,757	76,383	145,517	-
Beijing Sitonholy Technology Co., Ltd.	36,824	122,588	83,467	39,121	264,113	(11,695)	(11,393)	-
Baotou Yihui Information Technology Co., Ltd.	50,643	76,779	27,404	49,375	68,646	30,210	29,964	-
Sitonholy (Shenzhen) Technology Co., Ltd.	13,160	32,437	21,082	11,355	3,882	1,607	(1,652)

(II) Consolidated financial statements of affiliated companies: Due to the Consistency of compilation subject between the consolidated financial statements of the consolidated financial statement for parent company and subsidiaries, the financial statements are consolidated.

(III) Relations report: None.

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II. Private Placement Securities in the Most Recent Year to the Publication Date of this Annual Report: None.
III. Holding or Disposal of CHAINTECH's Shares by the Subsidiaries of the Most Recent Year to the Date of Publication of this Annual Report: None.
IV. Other Necessary Supplements: None.

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Chapter 9. The Most Recent Year and up to the Publication Date of the Annual Report, the Occurrence of Events as Provided for in Subparagraph 2, Paragraph 2, Article 36 of the Securities Exchange Act Which Have a Material Effect on Shareholders' Equity or Securities Prices: None.

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AI assistant

CHAINTECH — Annual Report 2023

52073_rns_2024-07-23_cabfe9b8-4c43-4ebe-8a9f-d68e5ef48729.pdf

CHAINTECH Technology Corporation

2023 Annual Report

Chapter 1. Letter to Shareholders

I. 2023 Business Results

(III) Financial income and expenditure and profitability analysis:

II. Outline of 2024 Business Plan

Chapter 2. Company Profile

Chapter 3. Corporate Governance Report

I. Organization

(I) Organizational Structure

(II) Businesses of Major Departments

(I) Information on Directors

1. Information on Directors

3. Major Shareholders as Judicial Person

4. Disclosure of information on directors’ professional qualifications and independence of independent directors:

(III) Remuneration Paid During the Most Recent Fiscal Year to Directors, Supervisors, General Manager and Deputy General Manager

2. Remuneration for the General Manager and Deputy General Manager (disclose the name and remuneration individually)

Table of range of remuneration

3. Remuneration for the Five Senior Officers with the Highest Remuneration:

III. Status of Corporate Governance

(I) Implementation of Board of Directors

Other issues to be recorded:

Implementation of Board of Directors' Evaluation:

(II) Operational Status of the Audit Committee

Other issues to be recorded:

(1) Matters referred to in Article 14-5 of the Securities and Exchange Act.

Directors' continuous education in 2023:

Evaluation Standards for the Independence of CPAs

(IX) Implementation of Internal Control System

1. Internal Control Statement

IV. Information on CPAs fees

V. Information About Replacement of CPA ：

(III) Information on equity pledge:

IX. Shares of Investment of Equity Method and the Consolidated Shareholdings Held by the Company, Its Directors, Supervisors, Managers, and Enterprises under Direct or Indirect Control of the Company

Chapter 4. Funding Overview

I. Capital and Shares

(I) Sources of Share Capital

1. Formation of share capital

2. Type of Shares

(II) Shareholder Structure

(III) Distribution of Shares

1. Common Shares

2. Preferred Shares: N/A

Chapter 5. Operating Overview

I. Business Activities

2. Business proportion

(II) Industry Overview

(2) Current State and Development of the AI Industry

Insights into the Generative AI Market at China

Insights on Artificial Intelligence Industry

Insights into Artificial Intelligence Applications

(3) NVIDIA GTC 2024

(III) Technology and Research Overview

II. Market, Production, and Sales Overview

2. Sales regions

2. Production processes of the main products

SMT FLOW CHART

(III) Supply of Major Raw Materials

Major sales customers for the most recent two fiscal years

(V) Production volume and value in the most recent two fiscal years

(VI) Sales volume and value in the most recent two fiscal years

III. Number of Employees in the Last Two Years Up to the Printing of this Annual Report

IV. Information on Environmental Protection Expenditure

V. Labor relations

VI. Information security

VII. Material Contracts:

Chapter 6. Financial Information

2. Parent Company Only Condensed Balance Sheet

2. Parent Company Only Condensed Statements of Comprehensive Income

II. Financial Analysis of the Last Five Years

2. Parent Company Only financial analysis

Calculation formulas:

Chaintech Technology Corporation

Audit report of Audit Committee

Whereas

In addition

2024 Regular Shareholders' Meeting of CHAINTECH

CHAINTECH Annual Report 2023

V. Information About Replacement of CPA `：`