CMC - AGM Information 2024 | FinancialReports.eu

CMC Magnetics Corporation Agendas of 2024 Annual Shareholders' Meeting

Time: 9:00AM, June 14, 2024 (Friday)

Place: 1F, No. 350, Songjiang Road, Taipei City (Importers and Exporters Association of Taipei) Total outstanding CMC share: 1,089,348,328 shares

Total shares represented by shareholders present in person and by proxy: 664,118,970 shares ( including votes casted electronically 131,734,300 shares)

Percentage of shares held by shareholders present in person or by proxy:60.96%

Directors present ： Directors – Wong, Ming-Sen 、 Yang, Ya-Hsiu 、 Tseng, Yi-An

Independent Director – Lee, Ming-Yen

Attend: Wang, Song-Tse accountant of the PricewaterhouseCoopers Taiwan

Chairman: Wong, Ming-Sen Recorder ： Gloria Chiang

The aggregate shareholding of the shareholders present in person or by proxy constituted a quorum. The Chairman called the meeting to order.

Commencement of Meeting ： (The aggregate shareholding of the shareholders present in

person or by proxy constituted a quorum. The Chairman called the meeting to order.)

Chairman’s Statement ： (omitted)
Report Items

Case 1: 2023 Business Operations. Please kindly review it.

Explanation: Please refer to attachment Ⅰ for the 2023 Business Operations.

Case 2: Audit Committee's Review Report on Final Accounts Statement for 2023. Please kindly review it.

Explanation: Please check attachment Ⅱ for the Audit Committee's Review Report.

Case 3: The Company's Distribution of Employee Remuneration and Director Remuneration for 2023. Please kindly review it.

Explaination: (Ι) According to Article 27 of the Company's Articles of Incorporation, if the Company makes a profit at the end of the year, at least 1% of the balance shall be allocated for employee compensation and no more than 1.5% for the remuneration of directors. However, when the company has accumulated losses, it should reserve in advance to offset the amount of losses.

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( Π ) The Company has decided to allocate from the 2023 earnings NT$7,000,000 as remuneration to employees and NT$1,600,000 as remuneration to directors.
( Ⅲ) Both the aforementioned employees' remuneration and directors' remuneration were distributed in cash, and there is no discrepancy with the recognized amount in 2023.

4. Matters for Ratification

Case 1: Approval of 2023 Business Report and Financial Statements. It is hereby submitted for ratification. (Proposed by Board of Directors)

Explanations:

(I) The Company's individual and consolidated financial statements for 2023 have been duly audited by Wang Sung- Tse and Lin Chun-Yao, the CPAs from PwC Taiwan, who have approved the report without reservation, and issued an unqualified opinion plus the others paragraph. The aforesaid financial statements together with the operating report have been adopted by the Board of Directors.
(II) Various statements and vouchers have been reviewed and determined as correct and accurate by the Audit Committee.
(III) We hereby submit the above statements. It is hereby submitted for ratification.
(IV) Attached are
Business Report. (Please refer to attachment Ⅰ.)
Financial statements. (Please refer to attachment Ⅲ 、 Ⅳ)

Resolution: 664,118,970 votes were represented at the time of voting(including votes casted

electronically 131,734,300votes) ； 624,470,629votes were in favor of the ，
proposal(including votes casted electronically 92,538,336votes) 2,450,225votes were cast against the proposal(including votes casted electronically 2,450,225 ，
votes) 0 votes were invalid, 37,198,116 votes were abstention votes/No votes (including votes casted electronically 36,745,739votes) 。 94.02% voted for the
proposal. The proposal was approved as the number of votes supporting the proposal exceeded the number of votes required by law and company policie.
Case 2: Approval of 2023 Profit Distribution Plan. It is hereby submitted for ratification. (Proposed by Board of Directors)

Explanation:

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(I) The net profit after tax of the Company for 2023 was NT$1,750,237,733. After offsetting the losses, deducting the retained earnings adjustment, and making provisions for legal reserves and Reversal special reserves, the distributable profit amounts to NT$751,692,995.
(II) A cash dividend of NT$740,756,863 (NT$0.68 per share) is proposed to be distributed to shareholders, leaving an undistributed profit of NT$10,936,132 at the end of the period.
(III) The cash dividends for this period are calculated up to NT$1 (rounded down), and any remaining fractional amounts less than NT$1 will be aggregated and recorded as other income for the Company.
(IV) The cash dividend for this period, prior to the ex-dividend date, may be adjusted by the Board of Directors with full authority if any changes in the outstanding shares of the Company affect the dividend ratio.
(V) The Company's 2023 profit distribution plan is as follows:

CMC Magnetics Corporation Profit distribution plan Fiscal year 2023

Unit: NT$

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Item AMOUNT
Beginning cumulative deficit before $ (1,051,186,675)
retrospective adjustments
Retrospective adjustments 2,767,156
Beginning cumulative deficit after (1,048,419,519)
retrospective adjustments
Plus (Less):
Net after-tax profit in 2023 1,750,237,733
Adjustment to retained earnings in 2023 (36,960,793)
Subtotal 664,857,421
Subtract:
Accrual 10% of legal surplus reserve (66,485,742)
Reversal of special reserve 153,321,316
Distributable earnings at end of 2023
751,692,995
Appropriation item:
Cash dividends on ordinary shares (740,756,863)
(NT$0.68 per share)
End of period appropriation 10,936,132
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Chairman: Manager: Accounting Controller:

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Summary of the first speech by the shareholder (Account No. 880300) ：

It is suggested to increase the dividend by NTD$0.12, distributing NTD$0.8 per share, thereby increasing the payout ratio of EPS.

2. Please implement a stock repurchase plan, and cancel the repurchased shares after the exdividend date. This will help increase the company's price-to-book ratio to no less than 1

Summary of the Chairman's Statement ：

In consideration of the future development needs of CMC Magnetics Corporation in archival discs and AI products under the Verbatim brand, the company plans to retain part of the funds to support future capital expenditures.

Summary of the second speech by the shareholder (Account No. 880300) ：

Please shorten the dividend distribution schedule, moving towards semi-annual, quarterly, and eventually monthly distributions, to position the company as an ETF in the stock market.

Summary of the Chairman's Statement ：

Monthly dividend distribution is too short-term focused. The company's operations and dividend policy emphasize long-term planning, and we will maintain appropriate cash reserves to maximize overall benefits.

Resolution: 664,118,970 votes were represented at the time of voting(including votes casted

electronically 131,734,300votes) ； 625,431,243 votes were in favor of the ，
proposal(including votes casted electronically 93,498,950votes) 2,500,902votes were cast against the proposal(including votes casted electronically 2,500,902 ，
votes) 0 votes were invalid, 36,186,825 votes were abstention votes/No votes (including votes casted electronically 35,734,448votes) 。 94.17% voted for the proposal. The proposal was approved as the number of votes supporting the proposal exceeded the number of votes required by law and company policie.

5.Election Items

Case 1: Election of Directors. It is submitted for resolution. (Proposed by Board of Directors) Explanation:

(I) The term of office for the 15th Board of Directors of the Company will expire on July 22, 2024. As per the Articles of Incorporation, a comprehensive election will be proposed at this year's annual shareholders' meeting.
(II) According to the Company's Articles of Incorporation, a Board of Directors will be established, consisting of nine to eleven members (at least three independent directors). For the sixteenth term, nine directors will be elected (including three independent directors) for a three-year term, with the option of re-election. Furthermore, an Audit Committee

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will be formed, comprising all independent directors, as specified in Article 21 of the Articles of Incorporation.

(III) According to Article 14-1 of the Company's Articles of Incorporation, the director positions are nominated by candidates whose qualifications have been reviewed and approved by the 16th session of the 15th Board of Directors. These candidates are proposed to be elected at the shareholders' meeting. The profiles of the director and independent director candidates can be found in the attachment (Please refer to attachment Ⅴ ).
(IV) The newly appointed directors will serve a term from June 14, 2024, to June 13, 2027, which is a period of three years. The term of the previous directors will end once the election of the new directors is completed at this shareholders' meeting.

Election results

The elected directors are as follows:

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Name votes received
Wong Ming-Sen 821,418,466 votes
Yang Ya-Hsiu 697,268,987 votes
Tseng Yi An 607,952,525 votes
Tsai Tsung Han 580,779,908 votes
Wong Hsiao-Wei 579,783,893 votes
Tsai Wen feng 579,610,471 votes
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The elected independent directors are as follows:

Name	votes received
Wu ChengHsiu	`632,516,264`votes
ChenChing Chang	`567,203,674`votes
Kuo MingChun	`559,326,660`votes

6.Other Proposals

Case 1: Proposal to release the newly elected directors of the Board of Directors of the Company and their Representatives from non-competition restrictions. It is submitted for resolution.

(Proposed by Board of Directors)

Explaination:

(I) The Company's newly elected directors and their representatives, whether acting on their own behalf or on behalf of others within the scope of business, must not

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harm the Company's interests. Therefore, in accordance with Article 209 of the Company Act, we request the approval of the shareholders' meeting to remove the restrictions on competition for these directors and their representatives.

(II) The proposed request to release the restrictions on director non-compete is as

follows:

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Position Name Current Concurrent Positions
Chairman of Transtouch Technology Inc.
Director of Legal Representative of EMC Investment Holding Ltd.
Director of Legal Representative of Super Net Holding Ltd.
Director of Legal Representative of F5 Holdings Ltd.
Director of Legal Representative of Media Factory LLC
Director of Legal Representative of CIA Holding Corp.
Director Wong Ming-Sen Director of Legal Representative of Fortune (Jiangsu) Multimedia
Co., Ltd.
Director of Legal Representative of Kinease Investment Ltd.
Director of Legal Representative of Chung-Hsing Electric &
Machinery MFG. Corp.
Director of Legal Representative of Chateau International
Development Co., Ltd.
Director of Transtouch Technology Inc.
Director of Legal Representative of EMC Investment Holding Ltd.
Director of Legal Representative of F5 Holdings Ltd.
Director Yang Ya-Hsiu Director of Legal Representative of Media Factory LLC
Director of Legal Representative of Fortune (Jiangsu) Multimedia
Co., Ltd.
Director Wong Hsiao-Wei Director of Legal Representative of Tainan Enterprises Co., Ltd.
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Resolution: 664,118,970 votes were represented at the time of voting(including votes casted

electronically 131,734,300votes) ； 624,298,964 votes were in favor of the ， proposal(including votes casted electronically 92,369,671votes) 3,314,965 votes were cast against the proposal(including votes casted electronically 3,314,965 ， votes) 0 votes were invalid, 36,505,041 votes were abstention votes/No votes (including votes casted electronically 36,049,664 votes) 。 94.00% voted for the proposal. The proposal was approved as the number of votes supporting the proposal exceeded the number of votes required by law and company policie.

7.Motions:No

8.Adjournment: 9:52AM, June 14, 2024

( The minutes of this shareholders' meeting only outline the key points of the proceedings. For detailed content, please refer to the audio and video recordings of the meeting. )

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Appendix I

CMC Magnetics Corporation 2023 Business Report

Looking back at 2023, the impact of high-interest rates and high inflation on the global economy. With resolute determination and collective effort, we successfully overcame all challenges. For the fiscal year 2023, our consolidated revenue reached approximately NT$7.38 billion, and the consolidated gross profit margin increased to 23%, up by about 4% from the previous year, indicating gradual benefits from operational optimization and value transformation. Additionally, our consolidated current ratio stood at 441%, quick ratio at 353%, and debt ratio at 26%. With an excellent financial structure, abundant working capital, and highly liquid current assets provide ample growth momentum for business development.

In terms of Group business performance, aside from maintaining the global market leadership in disc manufacturing, our brand business, the Verbatim brand business has seen a growing share of revenue year by year, with the business landscape diversifying and developing steadily. Last year, the Verbatim brand achieved significant sales success in SSD products, which led to a substantial increase in revenue. Additionally, it continued to launch a variety of innovative new products, including Bluetooth trackers and GaN chargers, as well as other mobile and computer peripheral accessories.

Looking ahead, with the expansion of our product lines and the enhancement of our global sales channels, the Group's operations are expected to continue to grow and develop positively.

The reports on the operation in 2023 and the future planning direction are made in the following:

I. Business Performance and Achievements in 2023
(I) Implementation results of the business plan:

The Company's 2023 individual net operating income is NT$3,054,699 thousand, showing a 10% decrease on a year-on-year basis. Operating margin has decreased by 2% on a year-on-year basis with net income of NT$1,750,238 thousand.

(II) Income and expenditure:

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The Company's individual net cash inflow from operating activities in 2023 is NT$165,774 thousand; net cash flow outflow from investing activities is NT$115,077 thousand, and net cash outflow from financing activities is NT$73,153 thousand. The overall financial income and expenditure shows a net decrease of NT$22,456 thousand in cash and cash equivalents.

(III) Profitability analysis:

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Item 2023 2022
Return on Assets (ROA) (%) 7.88 (4.66)
Return on Equity (ROE) (%) 10.00 (6.22)
Ratio of Operating Income to
(1.22) (1.44)
Paid-in Capital (%)
Ratio of Pretax Net Income to
16.22 (9.75)
Paid-in Capital (%)
Net Profit Margin (%) 57.30 (31.68)
Earnings Per Share (NT$) 1.61 (0.95)
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( `Ⅳ` ) Research and development status:

I In terms of the Company's R&D, besides continuing to develop advanced, high-capacity optical products, the Company also used its professional technical competences in the optical disk industry to expand into other fields. These R&D projects were being completed in 2023 oneby-one.

Completed product output of 200GB high-capacity optical product
Stable production of various printed optical products with high margin designed for high-end B2B market
Achieved customer verification of various archival disc (AD) products and started production and output
Completed the development of professional data lossless discs with an internationally renowned disc drive manufacturer and commenced shipping.
Certification for antibacterial discs and antibacterial packaging boxes, and commenced shipping.

Expected to commence

Development and trial production of 300GB, 500GB and even higher

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capacity double-sided multi-layer optical disk

Development of archival disk with even higher capacity
Development of high-capacity professional data lossless optical discs
Development of a disc backup system
Development of biomedical and chemical technologies

II. Summary of 2024 Business Plan and Future Development Strategies are as follows:

(I) Strengthening brand image and marketing channels

By integrating Verbatim's global marketing resources and strategies, standardizing packaging designs to create a consistent brand visual identity. In 2024, a new brand logo will be launched, aiming to enhance the brand's appeal and emotional connection with younger demographics through a friendly and humanized brand image.

Furthermore, in addition to solidifying our existing physical retail channels, we are continuously strengthening our online sales channels to increase brand exposure and market penetration. By employing a comprehensive sales strategy, we aim to expand our brand influence and further increase our global market share.

(II) Accelerating product development and enhancing product competitiveness

CMC has integrated global research and development and procurement resources to promptly bring the latest products to market. Among these, the application of AI server and AI storage technologies is considered a key area. Through collaboration with renowned European manufacturers, we not only enhance the artificial intelligence capabilities of new products but also meet the growing market demand. Additionally, by leveraging the Group's unified procurement, we not only reduce procurement costs but also ensure product quality, further enhancing our product competitiveness.

(III) Strategic diversified investment

CMC Group is committed to pursuing long-term development.

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Through multiple strategic investments, not only in industries like the Internet of Things and advanced biotechnology but also incorporating AI servers and AI storage technologies into its investment plans, CMC aims to develop more innovative and high-value-added products. These investments not only demonstrate CMC's ambition for future growth but also reflect a keen insight into market trends.

(IV) Environmental sustainability action

In pursuit of sustainable development, CMC has fulfilled its responsibility to protect the environment by reducing the impact of greenhouse gas emissions on the environment and climate. CMC has completed the greenhouse gas inventory for the year 2022 based on the ISO 14064-1:2018 standard. We will continue to promote energy conservation and carbon reduction policies to fulfill CMC's corporate responsibility.

Thanks to our shareholders for their support and trust that enable us to move forward and innovate in this highly competitive market. Our management team will continue to work hard to bring better performance to the company.

Chairman: Manager: Accounting Supervisor:

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Appendix II

CMC Magnetics Corporation Audit Committee's Review Report

It is to certify that

The CMC's 2023 Business Report, Financial Statements, and the profit distribution plan submitted by the Board of Directors have been reviewed by us, the Audit Committee of the Company. We have not found any inconsistencies with applicable laws in our review of the aforementioned documents. Therefore, we are hereby issuing this report in compliance with Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act. Please review.

It is hereby presented to

2024 Annual General Meeting of CMC Magnetics Corporation

Convener of the Audit Committee Shiau, Fung-Shyung

March 14, 2024

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Appendix Ⅲ

Independent Auditors' Report (2024) Financial Review Report No. 23004479

Opinion

We have reviewed the accompanying parent company alone balance sheets of CMC Magnetics Corporation (the “Company”) for the years ended December 31, 2023 and 2022 and the relevant parent company alone statements of comprehensive income, changes in equity and cash flows for the period from January 1 to December 31, 2023, and relevant notes, including a summary of significant accounting policies “(collectively referred to as the parent company only financial statements)”.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and its standalone financial performance and its standalone cash flows from January 1 to December 31, 2023 in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers based on our audit results and the audit reports of other certified public accountants (CPAs)(refer to the section of “Other matters”).

Basis for Audit Opinion

The auditor has conducted the audit work in accordance with the Rules for Auditing Certified Financial Statements and the Auditing Standards of the Republic of China. The auditor's responsibilities under these standards will be further explained in the section on the auditor's responsibility for auditing the individual financial statements. The personnel of the firm to which the auditor belongs, in accordance with the Code of Professional Ethics for Certified Public Accountants of the Republic of China, maintain independence from CMC Magnetics Corporation and fulfill other responsibilities under that code. Based on the auditor's audit findings and the audit reports of other auditors, the auditor believes that sufficient and appropriate audit evidence has been obtained to serve as a basis for expressing the audit opinion.

Key Audit Matters

The key audit matters refer to the matters that, in the professional judgment of the auditor, are of most significance in the audit of the individual financial statements of CMC Magnetics Corporation for the year 2023. These matters have been addressed in the overall audit of the individual financial statements and in the process of forming the audit opinion. The auditor does not express a separate opinion on these matters.

Key audit matters of the parent company only financial statements of the Company for the year ended 2023 are stated as follows:

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Accounting estimation of inventory valuation

Description

Refer to Note 4 (13) to the parent company only financial statements for accounting policies regarding inventory valuation; Note 5 (2) for uncertainty of accounting estimates and assumptions regarding inventory valuation; and Note 6 (6) for details of inventory accounting titles.

CMC Magnetics Corporation mainly manufactures and sells optical discs. Due to frequent market price fluctuations in such inventories, there is a higher risk of inventory valuation losses. CMC Magnetics Corporation's inventory holds a significant monetary value and includes many items that require manual judgment for determining obsolescence. Therefore, we have listed the estimate of CMC Magnetics Corporation's allowance for inventory valuation losses as one of the key audit matters for the current year.

Corresponding audit procedures

This matter covers the Company and some of its subsidiaries (investments accounted for using the equity method). Our major audit procedures executed are as follows:

Assess the policy adopted for its allowance for valuation loss on its inventories based on the understanding of the Company's operations and the nature of the industry.
Test whether the basis for the net realizable value is consistent with the policies set by the Company, and randomly inspect the correctness of the selling prices of individual inventory part numbers and the way the net realized value is calculated.
Acquire obsolete inventory details that have been identified and approved by the management, inspect the relevant information and verify it based on the records in the account.

Evaluation of impairment of property, factories and equipment

Description

For the accounting policies for impairment of property, factories and equipment and non-financial assets, please refer to Notes 4 (15) and 4 (20) of the parent company only financial statements; for the uncertainty of accounting estimates and assumptions for impairment of property, factories and equipment, please refer to Note 5 (2) of the parent company only financial statements; for the description of impairment accounting items of property, factories and equipment and non-financial assets, please refer to Notes 6 (8) and 6 (12) of the parent company only financial statements.

CMC Magnetics Corporation evaluates the recoverable amount of its real estate, factories, and equipment based on their utility value, which serves as the basis for impairment assessment. Since the evaluation of utility value involves judgment by management, any changes in estimates due to changes in economic conditions or company strategies may result in impairment in the future. Therefore, the auditor has identified the impairment assessment of CMC Magnetics Corporation's real estate, factories, and equipment as one of the key audit matters for the current year.

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Corresponding audit procedures

This matter covers the Company and some of its subsidiaries (investments accounted for using the equity method). Our major audit procedures executed are as follows:

Recalculate relevant amounts to check the correctness of the management's relevant calculations of the recoverable amount of assets with signs of impairment at the balance sheet date.
Understand and evaluate whether the Company’s asset impairment assessment procedures and accounting policies are consistent with accounting principles and adopted consistently, including methods used by management to determine the recoverable amount of individual assets.
Obtain the evaluation information used by the management to determine the recoverable amount based on the asset usage model and industry characteristics, evaluate and determine the reasonableness of the independent cash flow of the asset group, the useful life of the asset, and the possible future income and expenses.

Other Matters – Audits by other CPAs

The financial statements of the investee companies accounted for using the equity method in the individual financial statements of the Company have not been audited by our auditors, but rather by other auditors. Therefore, in our opinion on the aforementioned individual financial statements, the amounts presented in the financial statements of those companies are based on the audit reports of the other auditors. The investment amounts in the aforementioned companies accounted for using the equity method as of December 31, 2023 and 2022 were NT$1,876,364 thousand and NT$2,130,931 thousand, respectively, representing 7.79% and 9.65% of the total assets. The comprehensive losses recognized for the aforementioned companies from January 1, 2023 to December 31, 2023 and from January 1, 2022 to December 31, 2022 were NT$233,161 thousand and NT$387,858 thousand, respectively, representing (12.06%) and 51.04% of the total comprehensive income.

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

The responsibilities of the management are to prepare the parent company only financial statements with fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and to maintain necessary internal control associated with the preparation in order to ensure that the financial statements are free from material misstatement arising from fraud or error.

In preparing the parent company only financial statements, the management is responsible for assessing the ability of the Company in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Company or cease the operations without other viable alternatives.

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The governance bodies of the Company (including the Audit Committee) are responsible for supervising the financial reporting process.

Auditor's Responsibilities for the Audit of the Parent Company Only Financial Statements

The purpose of the auditor's examination of the individual financial statements is to obtain reasonable assurance about whether the individual financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report. Reasonable assurance is a high level of assurance, but it is not absolute assurance, since the audit work performed in accordance with the auditing standards of the Republic of China cannot guarantee that all material misstatements caused by fraud or error will be detected. Material misstatements may arise from fraud or error. If the individual amounts or total amounts of misstatements are reasonably expected to influence the economic decisions of the users of the individual financial statements, they are considered to be material.

The auditor conducted the audit in accordance with the auditing standards of the Republic of China, using professional judgment and skepticism. The auditor also performed the following tasks:

Identify and evaluate the significant risks of material misstatement in the individual financial statements arising from fraud or error; design and implement appropriate responses to the assessed risks; and obtain sufficient and appropriate audit evidence to serve as a basis for the audit opinion. Due to the possibility of fraud involving collusion, forgery, intentional omission, false representations, or override of internal controls, the risk of material misstatement arising from fraud is higher than that arising from error.
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.
Based on the audit evidence obtained, conclusions are drawn regarding the appropriateness of management's use of the going concern accounting basis and the existence of significant uncertainties that may cast doubt on the ability of the Company to continue operating. If the auditor determines that such uncertainties exist, they must alert users of the individual financial statements in the audit report to the relevant disclosures or modify the audit opinion if the disclosures are deemed inappropriate. The auditor's conclusions are based on the audit evidence obtained up to the date of the audit report. However, future events or circumstances may lead to the Company no longer having the ability to continue operating.
Evaluate the overall presentation, structure, and content of the parent company only financial statements (including relevant notes), and whether the parent company only financial

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statements adequately present the relevant transactions and events.

Sufficient and appropriate audit evidence has been obtained regarding the financial information of the individual components within the Company to express an opinion on the individual financial statements. The accountant is responsible for guiding, supervising, and executing the individual audit cases, and is responsible for forming the audit opinion on the individual financial statements.

The matters communicated between us and the governance bodies include the planned scope and times of the audit and significant audit findings (including any significant deficiencies in internal control identified during the audit).

We also provided governance bodies with a declaration that we have complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that may possibly be regarded as detrimental to our independence (including relevant protective measures).

Based on the matters communicated with the governance unit, the auditor has determined the key audit matters for the audit of the individual financial statements of the Company for the 2023 year. The auditor shall disclose such matters in the audit report, unless prohibited by law or in extremely rare circumstances where the auditor determines that communicating specific matters in the audit report would be expected to outweigh the public interest.

PricewaterhouseCoopers Taiwan

Wang Song-Tse

CPA

Lin Chun-Yao

Financial Supervisory Commission Approved Visa No.: Financial Supervisory Commission Review Letter No. 1110349013.

Former Securities and Exchange Commission of the Ministry of Finance

Approved Visa No.: (85) Taiwan Finance Visa (6) No. 68702

March 14, 2024

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CMC Magnetics Corporation Parent Company Only Balance Sheet December 31, 2023 and January 1 and December 31, 2022

Unit: NT$ thousands

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(Adjusted) (Adjusted)
December 31, 2022 January 1, 2022
December 31, 2023
Assets Notes Amount % Amount % Amount %
Current assets
1100 Cash and cash equivalents 6 (1) $ 1,168,756 5 $ 1,191,212 5 $ 1,087,921 5
1110 Financial assets at fair value 6 (2)
through profit or loss -
current 5,704,655 24 3,709,729 17 3,956,560 18
1136 Financial assets at amortized 8
cost - current - - 2,400 - 2,400 -
1150 Notes receivable, net 6 (4) 136 - 230 - 2,049 -
1170 Net account receivables 6 (4)(5) 202,518 1 396,291 2 461,171 2
1180 Account receivables - related 7
parties, net 714,523 3 784,470 4 704,314 3
1200 Other receivables 6 (5) 38,933 - 38,349 - 133,400 1
1210 Other receivables from related 7
- - -
parties 5,576 11,578 6,318
130X Inventories 6 (6) 1,029,996 4 1,340,690 6 1,162,903 5
1470 Other current assets 6 (10) - - -
67,956 68,896 39,502
11XX Total current assets
8,933,049 37 7,543,845 34 7,556,538 34
Non-current assets
1510 Financial assets at fair value 6 (2) and 8
through profit or loss - non-
current 2,473,924 10 2,029,009 9 1,778,245 8
1517 Financial assets at fair value 6 (3)
through other comprehensive
income - non-current 217,430 1 53,243 - 59,826 -
1535 Financial assets at amortized 8
cost - non-current 10,111 - - - - -
1550 Investments accounted for 6 (7)
using the equity method 8,031,382 33 7,721,165 35 7,788,816 35
1600 Property, factories and 6 (8)(12), 7,
equipment and 8 3,178,005 13 3,427,831 16 3,784,790 17
1755 Right-of-use assets 6 (9) - - -
19,912 22,474 3,240
1760 Investment properties, net 6 (11) and 8 595,352 3 616,833 3 638,949 3
1780 Intangible assets - - -
10,352 37,592 66,593
1840 Deferred income tax assets 6 (29) 147,999 1 162,108 1 179,553 1
1900 Other non-current assets 6 (10) (13) and
7 473,552 2 472,137 2 432,211 2
15XX Total non-current assets
15,158,019 63 14,542,392 66 14,732,223 66
1XXX Total assets
$ 24,091,068 100 $ 22,086,237 100 $ 22,288,761 100
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CMC Magnetics Corporation Parent Company Only Balance Sheet December 31, 2023 and January 1 and December 31, 2022

Unit: NT$ thousands

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(Adjusted) (Adjusted)
December 31, 2023 December 31, 2022 January 1, 2022
Liabilities and equity Notes Amount % Amount % Amount %
Current liabilities
2100 Short-term borrowings 6 (14) $ 450,000 2 $ 550,000 3 $ 336,958 2
2110 Short-term Notes Payable 6 (15) - - 50,000 - 50,000 -
2120 Financial liabilities at fair value 6 (16)
through profit or loss- current 648 - 1,952 - - -
2130 Contract liabilities – current 6 (23) 56,169 - 84,425 1 136,295 1
2150 Notes payable 28,982 - 45,974 - 69,079 1
2170 Account payables 300,673 1 285,951 1 469,869 2
2180 Account payables - related 7
parties 96 - 2,201 - 3,158 -
2200 Other payables 339,846 1 165,995 1 288,512 1
2220 Other payables - related parties 7 350,430 2 299,535 1 37,655 -
2280 Lease liabilities - current 9,232 - 9,118 - 3,278 -
2320 Long-term liabilities due 6 (17) and 8
within one year or one
operating cycle 925,000 4 1,525,000 7 725,000 3
2399 Other current liabilities - others 3,057 - 597 - 2,250 -
21XX Total current liabilities 2,464,133 10 3,020,748 14 2,122,054 10
Non-current liabilities
2540 Long-term borrowings 6 (17) and 8 3,020,000 13 2,385,000 11 1,925,000 9
2570 Deferred income tax liabilities 6 (29) 25,666 - 23,738 - 21,397 -
2580 Lease liabilities - non-current 54,192 - 62,119 - - -
2600 Other non-current liabilities 6 (18) 47,174 - 53,851 - 108,434 -
25XX Total non-current
liabilities 3,147,032 13 2,524,708 11 2,054,831 9
2XXX Total liabilities 5,611,165 23 5,545,456 25 4,176,885 19
Equity
Share capital 6 (19)
3110 Common stock 10,893,483 45 10,893,483 49 11,588,812 52
Capital surplus 6 (20)
3200 Capital surplus 6,720,506 28 6,714,779 31 6,830,667 30
Retained earnings 6 (21)
3310 Legal reserve 47,735 - 47,735 - 32,476 -
3320 Special reserve 255,790 1 255,790 1 118,457 1
3350 Retained Earnings
(Accumulated Deficits) 664,857 3 ( 1,048,420) ( 5) 155,280 1
Other equity
3400 Other equity 6 (22) ( 102,468) - ( 322,586) ( 1) ( 613,816) ( 3)
3XXX Total equity 18,479,903 77 16,540,781 75 18,111,876 81
Significant Contingent Liabilities 6 (17), 7, and 9
and Unrecognized Contractual
Commitments
Material Events After the Balance 6 (21) and 11
Sheet Date
3X2X Total liabilities and equity $ 24,091,068 100 $ 22,086,237 100 $ 22,288,761 100
----- End of picture text -----

The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong Ming-Sen

Manager: Sekiyama Takayuki

Accounting Supervisor: Lee Yung-Chih

~18~

CMC Magnetics Corporation

Parent Company Only Statements of Comprehensive Income From January 1st to December 31st of 2023 and 2022

Unit: NT$ thousands (excluding earnings (loss) per share of NT$)

==> picture [521 x 545] intentionally omitted <==

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

(Adjusted)
Fiscal year 2023 Fiscal year 2022
Items Notes Amount % Amount %
4000 Operating revenue 6 (23) and 7 $ 3,054,699 100 $ 3,401,673 100
5000 Operating costs 6 (6)(28) and 7 ( 2,523,524) ( 82) ( 2,861,639) ( 84)
5900 Gross operating profit 531,175 18 540,034 16
5910 Unrealized sales gains ( 140,847) ( 5) ( 114,343) ( 3)
5920 Realized sales gains 114,343 4 104,992 3
5950 Gross operating profit, net 504,671 17 530,683 16
Operating expenses 6 (28) and 7
6100 Selling and marketing expenses ( 212,360) ( 7) ( 218,435) ( 6)
6200 Administrative expenses ( 144,288) ( 5) ( 138,015) ( 4)
6300 Research and development expenses ( 258,248) ( 8) ( 310,500) ( 9)
6450 Expected credit loss 12 (2) ( 22,589) ( 1) ( 20,566) ( 1)
6000 Total operating expenses ( 637,485) ( 21) ( 687,516) ( 20)
6900 Operating losses ( 132,814) ( 4) ( 156,833) ( 4)
Non-operating income and expenses
7100 Interest revenue 6 (24) 5,850 - 1,623 -
7010 Other income 6 (3)(25) and 7 849,279 28 329,129 10
7020 Other gains and losses 6 (2)(26) 813,258 27 ( 839,151) ( 25)
7050 Finance costs 6 (27) ( 87,270) ( 3) ( 54,838) ( 2)
7070 Share of profit (loss) on subsidiaries,
associates, and joint ventures accounted for
using equity method 318,552 10 ( 342,255) ( 10)
7000 Total non-operating income and expenses 1,899,669 62 ( 905,492) ( 27)
7900 Net income (loss) before tax 1,766,855 58 ( 1,062,325) ( 31)
7950 Income tax expense 6 (29) ( 16,617) ( 1) ( 15,352) ( 1)
8200 Net profit (loss) $ 1,750,238 57 ($ 1,077,677) ( 32)
Other comprehensive income (net)
Items that will not be reclassified to profit or
loss
8311 Remeasurement of defined benefit plans 6 (18) ($ 2,903) - $ 22,170 1
8316 Unrealized gains (losses) on investments in 6 (3)(22)
equity instruments at fair value through
other comprehensive income 164,187 5 ( 6,258) -
8330 Share of other comprehensive income on
subsidiaries, associates, and joint ventures
accounted for using the equity method –
-
not reclassified to profit or loss ( 9,095) ( 12,563) ( 1)
8349 Income tax related to items that will not be 6 (29)
reclassified 580 - ( 4,434) -
8310 Sum of items that will not be reclassified to
profit or loss 152,769 5 ( 1,085) -
Items that may be reclassified subsequently to
profit or loss
8361 Exchange differences on translating the 6 (22)
financial statements of foreign operations 29,960 1 317,645 10
8380 Share of other comprehensive income on 6 (22)
subsidiaries, associates, and joint ventures
accounted for using the equity method –
may be reclassified to profit or loss 428 - 1,239 -
8360 Sum of items that may be reclassified
subsequently to profit or loss 30,388 1 318,884 10
8300 Other comprehensive income (net) $ 183,157 6 $ 317,799 10
8500 Total comprehensive income for current
period $ 1,933,395 63 ($ 759,878) ( 22)
Earnings (Loss) Per Share 6(30)
9750 Basic and diluted earnings (loss) per share $ 1.61 ($ 0.95)
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The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen Manager: Sekiyama Takayuki

Accounting Supervisor: Lee Yung-Chih

~19~

CMC Magnetics Corporation Parent Company Only Statements of Changes in Equity From January 1st to December 31st of 2023 and 2022

Unit: NT$ thousands

Fiscal year 2022 Balance as of January 1, 2022 The Impact of Retroactive Application and Retroactive Revision Balance after restatement on January 1, 2022 Net loss Other comprehensive income for current period Total comprehensive income for current period Appropriation of earnings for 2021: Legal reserve Special reserve Cash Reduction Distribution of Capital Surplus in Cash Disposal of equity instruments measured at fair value through other comprehensive income Balance as of December 31, 2022 Fiscal year 2023 Balance as of January 1, 2023 Net profit Other comprehensive income for current period Total comprehensive income for current period Disposal of equity instruments measured at fair value through other comprehensive income Difference between the equity price of subsidiary actually acquired or disposed of and the book value Changes in ownership interests in subsidiaries Balance as of December 31, 2023	Notes		Commonstock		Capitalsurplus				Retained earnings	Retained earnings	Retained earnings	Othe	Othe	requity Unrealized gains or losses on financial assets at fair value through other comprehensive income ($ 181,679 ) - ( 181,679 ) - ( 20,908 ) ( 20,908 ) - - - - ( 6,746 ) ($ 209,333 ) ($ 209,333 ) - 154,047 154,047 35,683 - - ($ 19,603 )		Total
							Legal reserve		Special reserve	Unappropriated earnings (losses to be compensated)		Exchange differences on translating the financial statements of foreignoperations
	6 (22) 6 (21) 6 (19) 6 (20)(21) 6 (3)(22) 6 (22) 6 (3)(22) 6 (20) 6 (20)		$ 11,588,812 - 11,588,812 - - - - - ( 695,329 ) - - $ 10,893,483 $ 10,893,483 - - - - - - $ 10,893,483		$ 6,830,667 - 6,830,667 - - - - - - ( 115,888 ) - $ 6,714,779 $ 6,714,779 - - - - 5,723 4 $ 6,720,506		$ 32,476 - 32,476 - - - 15,259 - - - - $ 47,735 $ 47,735 - - - - - - $ 47,735		$ 118,457 - 118,457 - - - - 137,333 - - - $ 255,790 $ 255,790 - - - - - - $ 255,790		$ 152,592 2,688 155,280 ( 1,077,677 ) 19,823 ( 1,057,854 ) ( 15,259 ) ( 137,333 ) - - 6,746 ($ 1,048,420 ) ($ 1,048,420 ) 1,750,238 ( 1,278 ) 1,748,960 ( 35,683 ) - - $ 664,857		($ 432,137 ) - ( 432,137 ) - 318,884 318,884 - - - - - ($ 113,253 ) ($ 113,253 ) - 30,388 30,388 - - - ($ 82,865 )		$ 18,109,188 2,688 18,111,876 ( 1,077,677 ) 317,799 ( 759,878 ) - - ( 695,329 ) ( 115,888 ) - $ 16,540,781 $ 16,540,781 1,750,238 183,157 1,933,395 - 5,723 4 $ 18,479,903

The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen

Manager: Sekiyama Takayuki

Accounting Supervisor: Lee Yung-Chih

~20~

CMC Magnetics Corporation

Parent Company Only Statements of Cash Flows From January 1st to December 31st of 2023 and 2022

Unit: NT$ thousands

Cash flows from operating activities
Net profit (loss) for this period
Adjustments
Adjustments for
Depreciation expenses
Amortization expenses
Depreciation expenses not for self-use (listed in other
gains and losses)
Expected credit loss
Net losses (gains) on financial assets and liabilities at
fair value through profit and loss
Interest expenses
Interest revenue
Dividend income
Share of profit (loss) on subsidiaries, associates, and
joint ventures accounted for using equity method
Gains on disposal of property, factories and equipment
and other non-current assets
Gain on sublease of right-of-use assets
Non-financial asset impairment losses
Inter-affiliate companies have realized benefits.
Unrealized gains (losses) between associates
Changes in assets/liabilities related to operating activities
Net changes in operating assets
Financial assets mandatorily at fair value through
profit or loss
Notes receivable (including related and non-related
parties)
Account receivable (including related and non-
related parties)
Other receivables (including related and non-related
parties)
Inventories
Other current assets
Net changes in operating liabilities
Financial liabilities at fair value through profit or
loss
Contract liabilities
Notes and account payable (including related and
non-related parties)
Other payables (including related and non-related
parties)
Other current liabilities
Net defined benefit liabilities
Cash outflow from operating activities
Interest received
Dividends received
Interest paid
Income tax paid
Net cash inflow (outflow) from operating
activities

Notes
January 1 to
December 31,2023
January 1 to
December 31,2022
$ 1,766,855
( $ 1,062,325 )
6 (8)(9)(28)
313,368
378,660
6 (28)
38,797
40,271
6 (8)(9)(11)(26)
21,692
27,163
12 (2)
22,589
20,566
6 (2)(16)(26)
(
835,490 )
820,768
6 (27)
87,270
54,407
6 (24)
(
5,850 )
(
1,623 )
6 (25)
(
779,008 )
(
265,098 )
(
318,552 )
342,255
6 (26)
(
654 )
(
386 )
6 (10)(26)
-
(
2,794 )
6 (8)(12)(26)
-
73,016
(
114,343 )
(
104,992 )
140,847
114,343
(
1,389,462 )
(
770,207 )
95
1,837
253,421
(
22,087 )
(
8,148 )
72,986
310,694
(
177,787 )
3,989
(
26,679 )
(
19,315 )
(
52,542 )
(
28,256 )
(
51,870 )
(
4,375 )
(
207,980 )
19,830
(
105,924 )
2,279
(
1,653 )
(
9,638 )
(
11,882 )
(
531,365 )
(
919,557 )
5,829
1,593
778,768
265,208
(
87,067 )
(
54,633 )
(
391 )
(
84 )
165,774
(
707,473 )

(Continued on the next page)

~21~

CMC Magnetics Corporation

Parent Company Only Statements of Cash Flows From January 1st to December 31st of 2023 and 2022

Unit: NT$ thousands

Cash flows from investing activities
Decrease in receivable financing lease payments
(listed under other current assets)
Price of acquisition of financial assets mandatorily
at fair value through profit or loss
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Increase in financial assets at amortized cost
Proceeds from disposal of investments accounted
for using the equity method
Price of acquisition of property, factories and
equipment
Proceeds from disposal of property, factories and
equipment and other non-current assets
Acquisition of intangible assets
Reduction in Deposited Security Deposit
Decrease in other non-current assets
Increase in prepayments for equipment (listed in
other non-current assets)
Net cash outflow from investing
activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Decrease in short-term notes payable
Increase in funds payable to related parties
Long-term borrowings taking place for current
period
Repayment of long-term borrowings for current
period
Repayment of principal of lease liabilities
Increase in guarantee deposits received
Distribution of Capital Surplus in Cash
Cash Reduction
Net cash outflow from financing
activities
Increase (decrease) in cash and cash equivalents for
current period
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

Notes
January 1, 2023
Till December 31
January 1, 2022
Till December 31
$ 5,706
$ 1,588
6 (2)
(
51,000 )
-
-
325
(
7,711 )
-
8,047
-
6 (31)
-
(
514 )
8,502
1,210
6 (31)
(
4,852 )
(
3,988 )
1,500
74
2,334
283
6 (31)
(
77,603 )
(
88,423 )
(
115,077 )
(
89,445 )
6 (32)
(
100,000 )
213,042
6 (32)
(
50,000 )
-
7
52,019
248,870
6 (32)
3,600,000
3,600,000
6 (32)
(
3,565,000 )
(
2,340,000 )
6 (9)(32)
(
10,409 )
(
10,365 )
237
(
121 )
6 (21)
-
(
115,888 )
6 (19)
-
(
695,329 )
(
73,153 )
900,209
(
22,456 )
103,291
1,191,212
1,087,921
$ 1,168,756
$ 1,191,212

The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen

Manager: Sekiyama Takayuki

Accounting Manager: Lee Yung-Chih

~22~

Appendix IV

Independent Auditors' Report (2024) Order Cai-Shen-Pao No. 23004935

To CMC Magnetics Corporation,

Opinions

We have reviewed the accompanying consolidated balance sheets of CMC Magnetics Corporation, (the Company) and its subsidiaries (collectively, the Group) for the years ended December 31, 2023 and 2022 and the relevant consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and relevant notes, including a summary of significant accounting policies (collectively referred to as the consolidated financial statements).

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023 and 2022 and for the years then ended, and its consolidated financial performance and its consolidated cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China, based on our audit results and the audit reports of other certified public accountants (CPAs)(refer to the section of “Other Matters”).

Basis for Audit Opinions

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Generally Accepted Auditing Standards (GAAS) in ROC. The accountant's responsibilities under these standards will be further explained in the accountant's responsibilities for reviewing 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, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our auditing results and other independent auditors' reports, we believe that we have obtained sufficient and appropriate audit evidence to serve as the basis for our opinion.

~23~

Key Audit Matters

Key audit matters refer to the most vital matters in our audit of the consolidated financial statements of the Group for the year ended December 31, 2023 based on our professional judgment. Such matters have been dealt with in the course of auditing and compiling the consolidated financial statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually.

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

Accounting estimation of inventory valuation

Description

Refer to Note 4(14) to the consolidated financial statements for accounting policies regarding inventory valuation; Note 5(2) for the uncertainty of accounting estimates and assumptions regarding inventory valuation; and Note 6(7) for details of inventory accounting titles.

The Group mainly manufactures and sells optical discs. Due to frequent market price fluctuations in such inventories, there is a higher risk of inventory valuation losses. The Group's inventory holds a significant monetary value and includes many items that require manual judgment for determining obsolescence. Therefore, we have listed the estimate of the Group's allowance for inventory valuation losses as one of the key audit matters for the current year.

Corresponding audit procedures

Our major audit procedures executed in response to this key audit matter are as follows.

Assess the policy adopted for its allowance for valuation loss on its inventories based on the understanding of the Group's operations and the nature of the industry.
Test whether the basis for the net realizable value is consistent with the policies set by the Group, and randomly inspect the correctness of the selling prices of individual inventory part numbers and the way the net realized value is calculated.
Acquire obsolete inventory details that have been identified and approved by the management, inspect the relevant information and verify it based on the records in the account.

~24~

Evaluation of impairment of property, plant and equipment

Description

For the accounting policies for impairment of property, plant and equipment and nonfinancial assets, please refer to Notes 4(16) and 4(21) of the consolidated financial statements; for the uncertainty of accounting estimates and assumptions for impairment of property, plant and equipment, please refer to Note 5(2) of the consolidated financial statements; for the description of impairment accounting items of property, plant and equipment and non-financial assets, please refer to Notes 6(9) and 6(13) of the consolidated financial statements.

The Group estimates the recoverable amount of property, plant and equipment based on value in use, which serves as the basis for impairment assessment. Since the value-in-use evaluation process involves the judgment of the management, any changes in economic conditions or changes in the Group’s strategy may cause impairment in the future. Therefore, we have listed the impairment assessment of the Group’s property, plant and equipment as one of the key audit items for the current year.

Corresponding audit procedures

Our major audit procedures executed in response to this key audit matter are as follows.

Recalculate relevant amounts to check the correctness of the management's relevant calculations of the recoverable amount of assets with signs of impairment at the balance sheet date.
Understand and evaluate whether the Company’s asset impairment assessment procedures and accounting policies are consistent with accounting principles and adopted consistently, including methods used by management to determine the recoverable amount of individual assets.
Obtain the evaluation information used by the management to determine the recoverable amount based on the asset usage model and industry characteristics, evaluate and determine the reasonableness of the independent cash flow of the asset group, the useful life of the asset, and the possible future income and expenses.

Other Matters – Audits by other CPAs

The financial statements of some of the subsidiaries and investees that are included in the consolidated financial statements of the Group were not audited by us but by other CPAs. Therefore, the opinions issued by us regarding the amounts listed in such subsidiary financial reports from the consolidated financial statements mentioned above are based on the audit report from other CPAs. The total assets of the aforementioned company as of December 31, 2023 and 2022 were NT $2,209,357 thousand and NT $2,521,568 thousand, respectively, accounting for 8.67% and 10.77% of the total consolidated assets; the operating income in 2023 and 2022 was NT $2,096,295 thousand and NT $2,415,901 thousand, respectively, accounting for 28.39% and 31.41% of the consolidated operating income. In

~25~

addition, part of the Group’s investments using the equity method in 2023 and 2022 and part of the information on investees disclosed in Note 13 are based on their evaluation and disclosures of the financial statements made by other CPAs appointed by the investees. We did not audit said financial statements. The balance of said investment using the equity method disclosed as of December 31, 2023 and 2022 was NT$221,576 thousand and NT$185,166 thousand, respectively, accounting for 0.87% and 0.79% of the total consolidated assets; the comprehensive income (including the share of profit and loss and other comprehensive income on associates and joint ventures recognized under the equity method) are NT$35,796 thousand and NT$(51,341) thousand, accounting for 1.84% and 6.69% of the total comprehensive income.

Other Matters - Parent Company Only Financial Reports

The Company has also prepared the parent company only financial statements for the years ended December 31, 2023 and 2022, for which we have issued an unqualified opinion, plus the audit report as in the section of other matters

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

The responsibility of the management is to prepare consolidated financial statements that are reasonably expressed in accordance with the Financial Reporting Standards for Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, Interpretations and Interpretations approved and issued by the Financial Supervisory Commission, and to maintain and consolidate financial statements. Necessary internal control related to the preparation of statements is undertaken to ensure that there is no material misrepresentation in the consolidated financial statements due to fraud or error.

In preparing the consolidated financial statements, the management is responsible for assessing the ability of the Group in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Group or cease the operations without other viable alternatives.

The governance bodies of the Group (including the Audit Committee) are responsible for supervising the financial reporting process.

~26~

CPAs' Responsibilities for the Audit of Consolidated Financial Statements

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

We applied professional judgment and skepticism in our audit in accordance with the auditing standards of the Republic of China. We have also performed the following tasks:

Identify and evaluate the risk of material misstatements due to fraud or error in the Consolidated Financial Statements; design and carry out appropriate countermeasures for the evaluated risk; and obtain sufficient and appropriate evidence as the basis for their audit opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.
Conclude on the appropriateness of the management's adoption of the going concern basis of accounting based on the audit evidence obtained and whether a material uncertainty exists for events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the Consolidated Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to 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 fairly presented relevant transactions and events.
Obtain sufficient and appropriate audit evidence concerning the financial information of entities within the Group, to express an opinion on the consolidated financial statements. We are responsible for the guiding, supervising, and performing the audit and forming an audit opinion on the Group.

~27~

The matters that we communicate with the governance unit, including the planned scope and timing of the audit and significant audit findings (including any significant deficiencies in internal control identified during the audit).

We have determined, based on our communications with the governance bodies, the key audit matters for the audit of the Group's consolidated financial statements for the year ended December 31, 2023. 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.

PricewaterhouseCoopers Taiwan

Wang Song-Tse

CPA

Lin Chun-Yao

Financial Supervisory Commission Approval No.: Jin-Guan-Zheng-Shen No. 1110349013 Former Securities and Futures Commission, Ministry of Finance Approval No.: (1996) Tai-Cai-Zeng (6) No. 68702

March 14, 2024

~28~

CMC Magnetics Corporation and Its Subsidiaries Consolidated Balance Sheets

December 31, 2023 and 2022, January 1, 2022

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

Unit: NT$ thousands
(Adjusted) (Adjusted)
December 31, 2023 December 31, 2022 January 1, 2022
Assets Notes Amount % Amount % Amount %
Current assets
1100 Cash and cash equivalents 6(1) $ 2,943,293 12 $ 2,763,663 12 $ 2,613,653 11
1110 Financial assets at fair value 6(2)
through profit or loss -
current 6,850,832 27 5,088,550 22 4,705,065 19
1136 Financial assets at amortized 6(4) and 8
cost - current 274,530 1 175,900 1 262,901 1
1150 Notes receivable, net 6(5) 6,555 - 12,577 - 7,322 -
1170 Net account receivables 6(5)(6) and
7 1,348,398 5 1,368,468 6 1,678,413 7
1200 Other receivables 6(6) 134,987 - 326,681 1 329,998 1
130X Inventories 6(7) 2,734,354 11 3,355,340 14 3,330,559 14
1470 Other current assets 6(11) 159,270 1 188,886 1 195,548 1
11XX Total current assets 14,452,219 57 13,280,065 57 13,123,459 54
Non-current assets
1510 Financial assets at fair value 6(2) and 8
through profit or loss - non-
current 4,467,270 18 3,129,055 13 3,667,527 15
1517 Financial assets at fair value 6(3)
through other comprehensive
income - non-current 547,544 2 511,207 2 390,459 2
1535 Financial assets at amortized 6(4) and 8
cost - non-current 28,739 - 15,743 - 15,331 -
1550 Investments accounted for 6(8) and 7
using the equity method 221,576 1 185,166 1 173,761 1
1600 Property, plant and equipment 6(9)(13)
and 8 3,917,081 15 4,332,671 19 4,799,706 20
1755 Right-of-use assets 6(10) 207,708 1 258,552 1 202,047 1
1760 Investment properties, net 6(12) and 8 613,947 2 616,843 3 549,585 2
1780 Intangible assets 6(13) 46,940 - 61,038 - 110,758 -
1840 Deferred income tax assets 6(31) 289,085 1 319,711 1 501,791 2
1900 Other non-current assets 6(3)(11)
(14)(20) 702,321 3 705,278 3 661,535 3
15XX Total non-current assets 11,042,211 43 10,135,264 43 11,072,500 46
1XXX Total assets $ 25,494,430 100 $ 23,415,329 100 $ 24,195,959 100
----- End of picture text -----

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~29~

CMC Magnetics Corporation and Its Subsidiaries Consolidated Balance Sheets

December 31, 2023 and 2022, January 1, 2022

Unit: NT$ thousands

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(Adjusted) (Adjusted)
December 31, 2023 December 31, 2022 January 1, 2022
Liabilities and equity Notes Amount % Amount % Amount %
Current liabilities
2100 Short-term borrowings 6(15) and 8 $ 450,000 2 $ 700,000 3 $ 546,958 2
2110 Short-term notes and bills 6(16)
- - -
payable 99,687 50,000 50,000
2120 Financial liabilities at fair value 6(17)
through profit or loss- current 648 - 1,952 - - -
2130 Contract liabilities – current 6(25) 78,163 - 94,740 - 161,741 1
2150 Notes payable 30,336 - 49,975 - 70,641 -
2170 Account payables 860,811 3 653,767 3 969,157 4
2200 Other payables 6(18) 631,657 3 431,382 2 644,934 3
2230 Current tax liabilities 350 - 2,323 - 6,726 -
2280 Lease liabilities - current 63,882 - 65,842 - 62,110 -
2320 Long-term liabilities due within 6(19) and 8
one year or one operating
cycle 925,000 4 1,525,000 7 725,000 3
2399 Other current liabilities - others 139,806 1 140,735 1 158,042 1
21XX Total current liabilities 3,280,340 13 3,715,716 16 3,395,309 14
Non-current liabilities
2540 Long-term borrowings 6(19) and 8 3,020,000 12 2,385,000 10 1,925,000 8
2570 Deferred income tax liabilities 6(31) 79,136 - 79,136 - 134,904 -
2580 Lease liabilities - non-current 182,741 1 237,661 1 135,564 1
2600 Other non-current liabilities 6(8)(20) 112,699 - 131,374 1 160,072 1
25XX Total non-current liabilities 3,394,576 13 2,833,171 12 2,355,540 10
2XXX Total liabilities 6,674,916 26 6,548,887 28 5,750,849 24
Equity
Equity attributable to the owners
of parent company
Share capital 6(21)
3110 Common stock 10,893,483 43 10,893,483 47 11,588,812 48
Capital surplus 6(22)
3200 Capital surplus 6,720,506 27 6,714,779 28 6,830,667 29
Retained earnings 6(23)
3310 Legal reserve 47,735 - 47,735 - 32,476 -
3320 Special reserve 255,790 1 255,790 1 118,457 -
3350 Retained earnings (loss to be
recovered) 664,857 2 ( 1,048,420 ) ( 4 ) 155,280 1
Other equity 6(24)
3400 Other equity ( 102,468 ) - ( 322,586 ) ( 1 ) ( 613,816 ) ( 3)
31XX Total equity attributable to
the owners of parent
company 18,479,903 73 16,540,781 71 18,111,876 75
36XX Non-controlling interests 4(3) 339,611 1 325,661 1 333,234 1
3XXX Total equity 18,819,514 74 16,866,442 72 18,445,110 76
Significant Contingent Liabilities 6(19) and 9
and Unrecognized Contractual
Commitments
Material Events After the Balance 6(23) and
Sheet Date 11
3X2X Total liabilities and equity $ 25,494,430 100 $ 23,415,329 100 $ 24,195,959 100
----- End of picture text -----

The notes attached are part of the Consolidated Financial Statements and shall be read together.

Chairman: Wong, Ming-Sen

Manager: Sekyama Takayuki

Accounting Manager: Lee Yung-Chih

~30~

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands except for earnings per share (loss)

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(Adjusted)
2023 2022
Items Notes Amount % Amount %
4000 Operating revenue 6(25) and 7 $ 7,384,447 100 $ 7,692,376 100
5000 Operating costs 6(7)(30) ( 5,724,229) ( 77) ( 6,227,115) ( 81)
5900 Gross operating profit 1,660,218 23 1,465,261 19
Operating expenses 6(30) and 7
6100 Selling and marketing expenses ( 937,204) ( 13) ( 937,921) ( 12)
6200 Administrative expenses ( 740,944) ( 10) ( 746,243) ( 10)
6300 Research and development
expenses ( 288,422) ( 4 ) ( 335,369) ( 4)
6450 Expected credit impairment 12(2)
- -
(losses) gains ( 39,398) 24,427
6000 Total operating expenses ( 2,005,968) ( 27) ( 1,995,106) ( 26)
6900 Operating losses ( 345,750) ( 4 ) ( 529,845) ( 7)
Non-operating income and
expenses
7100 Interest revenue 6(4)(11)
- -
(26) 32,194 10,881
7010 Other income 6(27) 1,083,783 15 503,576 7
7020 Other gains and losses 6(2)(13)
(17)(28) 1,095,596 15 ( 805,030) ( 10)
7050 Finance costs 6(29) ( 97,194) ( 1 ) ( 63,474) ( 1)
7060 Share of profit (loss) on 6(8)
associates and joint ventures
accounted for using equity
method 35,341 - ( 52,580) ( 1)
7000 Total non-operating income and
expenses 2,149,720 29 ( 406,627) ( 5)
7900 Net income (loss) before tax 1,803,970 25 ( 936,472) ( 12)
7950 Income tax expense 6(31) ( 44,733) ( 1 ) ( 146,424) ( 2)
8200 Net profit (loss) $ 1,759,237 24 ($ 1,082,896) ( 14)
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(Continued on the next page)

~31~

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands except for earnings per share (loss)

==> picture [520 x 585] intentionally omitted <==

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(Adjusted)
2023 2022
Items Notes Amount % Amount %
Other comprehensive income,
net
Items that will not be reclassified
to profit or loss
8311 Remeasurement of defined 6(20)
benefit plans ($ 1,093) - $ 26,338 -
8316 Unrealized gains (losses) on 6(3)(24)
investments in equity and 12(3)
instruments at fair value
through other comprehensive
income 156,304 2 ( 24,438) -
8349 Income tax related to items that 6(31)
will not be reclassified 584 - ( 4,835) -
8310 Sum of items that will not be
reclassified to profit or loss 155,795 2 ( 2,935) -
Items that may be reclassified
subsequently to profit or loss
8361 Exchange differences on 6(24)
translating the financial
statements of foreign
operations 29,569 - 317,141 4
8370 Share of other comprehensive 6(8)(24)
income (loss) of associates
and joint ventures accounted
for using the equity method 428 - 1,239 -
8360 Sum of items that may be
reclassified subsequently to
profit or loss 29,997 - 318,380 4
8300 Other comprehensive income,
net $ 185,792 2 $ 315,445 4
8500 Total comprehensive income for
current period $ 1,945,029 26 ($ 767,451) ( 10)
Net income (loss) attributable to:
8610 Owners of parent company $ 1,750,238 24 ($ 1,077,677) ( 14)
8620 Non-controlling interests 8,999 - ( 5,219) -
Total $ 1,759,237 24 ($ 1,082,896) ( 14)
Total comprehensive income/(loss)
attributable to:
8710 Owners of parent company $ 1,933,395 26 ($ 759,878) ( 10)
8720 Non-controlling interests 11,634 - ( 7,573) -
Total $ 1,945,029 26 ($ 767,451) ( 10)
Earnings (loss) per share 6(32)
9750 Basic and diluted earnings (loss)
per share $ 1.61 ($ 0.95 )
----- End of picture text -----

The notes attached are part of the Consolidated Financial Statements and shall be read together.

Chairman: Wong, Ming-Sen

Manager: Sekyama Takayuki

Accounting Manager: Lee Yung-Chih

~32~

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

Unit: NT$ thousands

				Equityattributable to the owne	Equityattributable to the owne	Equityattributable to the owne	rs ofparent comp	ny
Common stock Capital surplus Legal r $ 11,588,812 $ 6,830,667 - - 11,588,812 6,830,667 - - - - - - - - - - ( 695,329 ) - - ( 115,888 ) - - $ 10,893,483 $ 6,714,779 $ 10,893,483 $ 6,714,779 - - - - - - - 5,723 - - - 4 - - $ 10,893,483 $ 6,720,506	Capital surplus			Retained earnings				Other equity		Total
		Legal r	eserve	Special res	erve	Unappropriate d earnings (losses to be compensated)	Exchange differences on translating the financial statements of foreign operations	Unrealized gains or losses on financial assets at fair value through other comprehensive income	Equity directly associated with non-current assets held for sale
			$	32,476 - 32,476 - - - 15,259 - - - - 47,735 47,735 - - - - - - - 47,735	$	118,457 - 118,457 - - - - 137,333 - - - 255,790 255,790 - - - - - - - 255,790




			$		$
			$		$


			$		$

The notes attached are part of the Consolidated Financial Statements and shall be read together.

Chairman: Wong, Ming-Sen

Manager: Sekyama Takayuki

Accounting Manager: Lee, Yung-Chih

~33~

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands

Cash flows from operating activities
Net income (loss) before tax for the period
Adjustments
Adjustments for
Depreciation expenses (including property,
plant and equipment, right-of-use assets, and
investment properties)
Amortization expenses
Expected credit loss (reversal of gains)
Net losses (gains) on financial assets and
liabilities at fair value through profit and loss
Interest expenses
Interest revenue
Dividend income
Share of loss (profit) of associates accounted
for using equity method
Gains on disposal of property, plant and
equipment
Gain on sublease of right-of-use assets
Non-financial asset impairment losses
Gains on lease modification
Changes in assets/liabilities related to operating
activities
Net changes in operating assets
Financial assets mandatorily at fair value
through profit or loss
Notes receivable (including related and non-
related parties)
Account receivable (including related and
non-related parties)
Other receivables
Inventories
Other current assets
Net changes in operating liabilities
Financial liabilities at fair value through
profit or loss
Contract liabilities
Notes and account payable
Other payables
Other current liabilities
Net defined benefit liabilities
Cash outflow from operating activities
Interest received
Dividends received
Interest paid
Income tax paid
Net cash inflow (outflow) from
operating activities

Notes
For the Year Ended
December31,2023
For the Year Ended
December31,2022
$ 1,803,970
( $ 936,472 )
6(9)(10)
(12)(28)
(30)
463,151
580,607
6(30)
59,365
84,902
12(2)
39,398
(
24,427 )
6(2)(17)
(28)
(
1,213,931 )
700,093
6(29)
97,194
63,043
6(26)
(
32,194 )
(
10,881 )
6(27)
(
1,006,234 )
(
319,727 )
6(8)
(
35,341 )
52,580
6(28)
(
3,584 )
(
3,195 )
6(11)
-
(
2,794 )
6(13)
(28)
105,920
88,286
6(10)(28)
(
62 )
(
8 )
(
1,543,906 )
(
530,103 )
6,022
(
5,255 )
(
26,609 )
363,209
100,627
833
642,631
(
24,781 )
22,845
(
16,397 )
(
19,315 )
(
52,542 )
(
16,577 )
(
67,001 )
187,405
(
336,056 )
31,751
(
244,399 )
(
929 )
(
17,307 )
(
381 )
(
93)
(
338,784 )
(
657,885 )
31,944
10,837
1,106,445
319,672
(
96,533 )
(
63,629 )
(
11,712 )
(
51,343)
691,360
(
442,348 )

(Continued on the next page)

~34~

C CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022

Unit: NT$ thousands

Cash flows from investing activities
Price of acquisition of financial assets mandatorily
at fair value through profit or loss
Price of disposal of financial assets mandatorily
measured at fair value through profit or loss
Price of acquisition of financial assets at fair value
through other comprehensive income
Proceeds from disposal of financial assets at fair
value through other comprehensive income
Refund from capital liquidation related to
financial assets at fair value through other
comprehensive income
Refund from capital reduction related to financial
assets at fair value through other comprehensive
income
Acquisition of financial assets at amortized cost
Disposal of financial assets at amortized cost
Acquisition of investments accounted for using
equity method
Price of acquisition of property, plant and
equipment
Proceeds from disposal of property, plant and
equipment
Price of acquisition of intangible assets
Increase in other non-current assets
Increase in prepayments for equipment (listed in
other non-current assets)
Net cash outflow from investing
activities
Cash flows from financing activities
Increase (decrease) in short-term borrowings
Increase in short-term notes and bills payable
Long-term borrowings taking place for current
period
Repayment of long-term borrowings for current
period
Decrease in other non-current liabilities
Repayment of principal of lease liabilities
Cash distribution from additional paid-in capital
Cash reduction
Changes in non-controlling interests
Net cash inflow (outflow) from
financing activities
Effects of exchange rate changes on the balance of
cash held in foreign currencies
Increase in cash and cash equivalents for current
period
Cash and cash equivalents, beginning of period
Cash and cash equivalents, end of period

Notes
For the Year Ended
December 31, 2023
For the Year Ended
December 31, 2022
12(3)
( $ 183,622 )
( $ 2,518 )
12(3)
4,700
47,651
12(3)
(
22,128 )
(
139,530 )
12(3)
135,342
325
12(3)
434
-
12(3)
5,784
16,072
(
190,104 )
(
10,360 )
77,950
97,141
6(8) and 7
-
(
60,000 )
6(33)
(
42,527 )
(
64,140 )
26,222
4,420
(
29,959 )
(
25,572 )
(
10,036 )
(
7,945 )
6(33)
(
79,081 )
(
85,523)
(
307,025)
(
229,979)
6(34)
(
250,000 )
153,042
6(34)
50,000
-
6(34)
3,600,000
3,600,000
6(34)
(
3,565,000 )
(
2,340,000 )
(
12,284 )
(
11,528 )
6(10)(34)
(
72,139 )
(
70,662 )
6(22)
-
(
115,888 )
6(21)
-
(
695,329 )
8,047
-
(
241,376)
519,635
36,671
302,702
179,630
150,010
2,763,663
2,613,653
$ 2,943,293
$ 2,763,663

The notes attached are part of the Consolidated Financial Statements and shall be read together.

Chairman: Wong, Ming-Sen Manager: Sekyama Takayuki

Accounting Manager: Lee Yung-Chih

~35~

Appendix V

CMC Magnetics Corporation

Introduction of Directors and Independent Director Candidates

==> picture [512 x 602] intentionally omitted <==

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

Name of Academic Shareholding
Category Gender Experiences Position
Candidate Background (Unit: Share)
Chairman of CMC
Magnetics Corporation
Chairmen/Directors of
some subsidiaries of
CMC Magnetics
Agricultural Corporation
Engineering Chairman of CMC Director of Legal
Director Male Wong Ming-Sen Department of Magnetics Representative of 86,459,355
National Taiwan Corporation Chung-Hsing Electric
University & Machinery MFG.
Corp.
Director of Legal
Representative of
Chateau International
Development Co., Ltd.
Executive Vice General
Manager of CMC
Commercial Executive Vice Magnetics Corporation
Department of General Manager of Director of CMC
Director Female Yang Ya-Hsiu 9,317,996
National Taiwan CMC Magnetics Magnetic Co., Ltd.
University Corporation Directors of some
subsidiaries of CMC
Magnetics Corporation
Department of
Information
Director of CMC Director of CMC
Director Male Tseng Yi-An Engineering, Chun 1,064,273
Magnetic Co., Ltd. Magnetic Co., Ltd.
Yuan Christian
University
Department of
Chemistry,
University of
Director of CMC Director of CMC
Director Male Tsai Tsung-Han California, Berkeley 1,439,328
Magnetic Co., Ltd. Magnetic Co., Ltd.
School of Dental
Medicine
, TUFTS University
Department of
Molecular and Cell Vice General
Biology, University Manager of Sales,
Director Male Tsai Wen-feng None 642,076
of California, CMC Magnetic Co.,
Berkeley School of Ltd.
Dental Medicine
Financial Manager of
Tainan Enterprises Director of Legal
Wong Hsiao- IE Business School Director of Legal Representative of
Director Female 5,495,238
Wei IMBA Representative of Tainan Enterprises Co.,
Tainan Enterprises Ltd.
Co., Ltd.
----- End of picture text -----

~36~

AI assistant

CMC — AGM Information 2024

52006_rns_2024-06-27_50f9ba94-8d17-4021-bc9c-dcc819d20379.pdf

CMC Magnetics Corporation Agendas of 2024 Annual Shareholders' Meeting

4. Matters for Ratification

Summary of the first speech by the shareholder (Account No. 880300) ：

Summary of the Chairman's Statement ：

Summary of the second speech by the shareholder (Account No. 880300) ：

Summary of the Chairman's Statement ：

5.Election Items

Election results

6.Other Proposals

7.Motions:No

8.Adjournment: 9:52AM, June 14, 2024

Appendix I

CMC Magnetics Corporation 2023 Business Report

(III) Profitability analysis:

( Ⅳ ) Research and development status:

Expected to commence

(I) Strengthening brand image and marketing channels

(II) Accelerating product development and enhancing product competitiveness

(III) Strategic diversified investment

(IV) Environmental sustainability action

Appendix II

CMC Magnetics Corporation Audit Committee's Review Report

Appendix Ⅲ

Opinion

Basis for Audit Opinion

Key Audit Matters

Accounting estimation of inventory valuation

Description

Corresponding audit procedures

Evaluation of impairment of property, factories and equipment

Description

Corresponding audit procedures

Other Matters – Audits by other CPAs

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

Auditor's Responsibilities for the Audit of the Parent Company Only Financial Statements

PricewaterhouseCoopers Taiwan

CMC Magnetics Corporation Parent Company Only Balance Sheet December 31, 2023 and January 1 and December 31, 2022

CMC Magnetics Corporation Parent Company Only Balance Sheet December 31, 2023 and January 1 and December 31, 2022

CMC Magnetics Corporation

Parent Company Only Statements of Comprehensive Income From January 1st to December 31st of 2023 and 2022

CMC Magnetics Corporation Parent Company Only Statements of Changes in Equity From January 1st to December 31st of 2023 and 2022

CMC Magnetics Corporation

Parent Company Only Statements of Cash Flows From January 1st to December 31st of 2023 and 2022

CMC Magnetics Corporation

Parent Company Only Statements of Cash Flows From January 1st to December 31st of 2023 and 2022

Appendix IV

Independent Auditors' Report (2024) Order Cai-Shen-Pao No. 23004935

Opinions

Basis for Audit Opinions

Key Audit Matters

Accounting estimation of inventory valuation

Description

Corresponding audit procedures

Evaluation of impairment of property, plant and equipment

Description

Corresponding audit procedures

Other Matters – Audits by other CPAs

Other Matters - Parent Company Only Financial Reports

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

CPAs' Responsibilities for the Audit of Consolidated Financial Statements

PricewaterhouseCoopers Taiwan

CMC Magnetics Corporation and Its Subsidiaries Consolidated Balance Sheets

December 31, 2023 and 2022, January 1, 2022

CMC Magnetics Corporation and Its Subsidiaries Consolidated Balance Sheets

December 31, 2023 and 2022, January 1, 2022

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2023 and 2022

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Changes in Equity For the Years Ended December 31, 2022 and 2021

CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022

C CMC Magnetics Corporation and Its Subsidiaries Consolidated Statements of Cash Flows For the Years Ended December 31, 2023 and 2022

Appendix V

CMC Magnetics Corporation

Introduction of Directors and Independent Director Candidates

More from CMC

CMC AGM Information 2024

( `Ⅳ` ) Research and development status: