CMC — Audit Report / Information 2023

Nov 14, 2023

CMC Magnetics Corporation

Parent Company Only Financial Statements and Independent Auditors' Report Fiscal years 2023 and 2022 (Stock Code: 2323)

Address: 15F, No. 53, Minquan West Road, Zhongshan District, Taipei City Tel.: (02)2598-9890

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

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CMC Magnetics Corporation

Individual Financial Statements and Independent Auditors' Report for the Years Ended

2023 and 2022

Table of Contents

Items I. Cover Page II. Table of Contents III. Independent Auditors' Report IV. Parent Company Only Balance Sheet V. Parent Company Only Statements of Comprehensive Income VI. Parent Company Only Statements of Changes in Equity VII. Parent Company Only Statements of Cash Flows VIII. Notes to Parent Company Only Financial Statements (I) Company History (II) Date and Procedure for Approval of Financial Statements (III) Application of New and Amended Standards and Interpretations (IV) Summary of Significant Accounting Policies (V) Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty (VI) Description of Significant Accounting Titles (VII) Related-Party Transactions (VIII) Pledged Assets (IX) Significant Contingent Liabilities and Unrecognized Contractual Commitments (X) Major Disaster Loss (XI) Material Events After the Balance Sheet Date (XII) Others (XIII) Supplementary Disclosures (XIV) Segment Information IX. Statement of Major Accounting Subjects Cash and cash equivalents Financial assets at FVTPL - current and non-current Accounts receivable Inventories Changes in investments accounted for using the equity method Long-term borrowings Operating revenue Operating costs Production overheads Selling and marketing expenses Administrative expenses Research and development expenses Net Other Income and Expenses Finance costs Statement of employee benefits, depreciation, depletion, and amortization expenses of the year by function

Page/No./Index

1 2 3-6 7-8 9 10 11-12 13 13 13-14 14-25 25-26 26-57 57-60 61 61-61 61 61 61-74 74-75 75 Statement 1 Statement 2 Statement 3 Statement 4 Statement 5 Statement 6 Statement 7 Statement 8 Statement 9 Statement 10 Statement 11 Statement 12 Note 6 (26) Note 6 (27) Note 6 (28)

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Independent Auditors' Report (113) Financial Review Report No. 23004479

To CMC Magnetics Corporation:

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:

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.

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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:

1. 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.

2. 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.

3. 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.

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:

1. 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.

2. 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.

3. 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

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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.

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:

1. 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.

2. 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.

3. Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.

4. 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

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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.

1. Evaluate the overall presentation, structure, and content of the parent company only financial statements (including relevant notes), and whether the parent company only financial statements adequately present the relevant transactions and events.

2. 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

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

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

Liabilities and equity	Notes	December 31,2023 (Adjusted) December 31,2022 Amount % Amount % $ 450,000 2 $ 550,000 3 - - 50,000 - 648 - 1,952 - 56,169 - 84,425 1 28,982 - 45,974 - 300,673 1 285,951 1 96 - 2,201 - 339,846 1 165,995 1 350,430 2 299,535 1 9,232 - 9,118 - 925,000 4 1,525,000 7 3,057 - 597 - 2,464,133 10 3,020,748 14 3,020,000 13 2,385,000 11 25,666 - 23,738 - 54,192 - 62,119 - 47,174 - 53,851 - 3,147,032 13 2,524,708 11 5,611,165 23 5,545,456 25 10,893,483 45 10,893,483 49 6,720,506 28 6,714,779 31 47,735 - 47,735 - 255,790 1 255,790 1 664,857 3 ( 1,048,420 ) ( 5 ) ( 102,468 ) - ( 322,586 ) ( 1 ) 18,479,903 77 16,540,781 75 $ 24,091,068 100 $ 22,086,237 100	Unit: NT$ thousands (Adjusted) January1,2022 Amount % $ 336,958 2 50,000 - - - 136,295 1 69,079 1 469,869 2 3,158 - 288,512 1 37,655 - 3,278 - 725,000 3 2,250 - 2,122,054 10 1,925,000 9 21,397 - - - 108,434 - 2,054,831 9 4,176,885 19 11,588,812 52 6,830,667 30 32,476 - 118,457 1 155,280 1 ( 613,816) ( 3 ) 18,111,876 81 $ 22,288,761 100
		Amount $ 450,000 - 648 56,169 28,982 300,673 96 339,846 350,430 9,232 925,000 3,057 2,464,133 3,020,000 25,666 54,192 47,174 3,147,032 5,611,165 10,893,483 6,720,506 47,735 255,790 664,857 ( 102,468 ) 18,479,903 $ 24,091,068	Amount $ 336,958 50,000 - 136,295 69,079 469,869 3,158 288,512 37,655 3,278 725,000 2,250 2,122,054 1,925,000 21,397 - 108,434 2,054,831 4,176,885 11,588,812 6,830,667 32,476 118,457 155,280 ( 613,816) 18,111,876 $ 22,288,761
Current liabilities 2100 Short-term borrowings 2110 Short-term Notes Payable 2120 Financial liabilities at fair value through profit or loss- current 2130 Contract liabilities – current 2150 Notes payable 2170 Account payables 2180 Account payables - related parties 2200 Other payables 2220 Other payables - related parties 2280 Lease liabilities - current 2320 Long-term liabilities due within one year or one operating cycle 2399 Other current liabilities - others 21XX Total current liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Retained Earnings (Accumulated Deficits) Other equity 3400 Other equity 3XXX Total equity Significant Contingent Liabilities and Unrecognized Contractual Commitments Material Events After the Balance Sheet Date 3X2X Total liabilities and equity	6 (14) 6 (15) 6 (16) 6 (23) 7 7 6 (17) and 8 6 (17) and 8 6 (29) 6 (18) 6 (19) 6 (20) 6 (21) 6 (22) 6 (17), 7, and 9 6 (21) and 11

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

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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$)

Items

Fiscal year 2023 (Adjusted) Fiscal year 2022 Notes Amount % Amount % 6 (23) and 7 $ 3,054,699 100 $ 3,401,673 100 6 (6)(28) and 7 ( 2,523,524 )( 82 )( 2,861,639 )( 84) 531,175 18 540,034 16 ( 140,847 ) ( 5 ) ( 114,343 ) ( 3) 114,343 4 104,992 3 504,671 17 530,683 16 6 (28) and 7 ( 212,360 ) ( 7 ) ( 218,435 ) ( 6) ( 144,288 ) ( 5 ) ( 138,015 ) ( 4) ( 258,248 ) ( 8 ) ( 310,500 ) ( 9) 12 (2) ( 22,589 )( 1 )( 20,566 )( 1) ( 637,485 )( 21 )( 687,516 )( 20) ( 132,814 )( 4 )( 156,833 )( 4) 6 (24) 5,850 - 1,623 - 6 (3)(25) and 7 849,279 28 329,129 10 6 (2)(26) 813,258 27 ( 839,151 ) ( 25) 6 (27) ( 87,270 ) ( 3 ) ( 54,838 ) ( 2) 318,552 10( 342,255 )( 10) 1,899,669 62( 905,492 )( 27) 1,766,855 58 ( 1,062,325 ) ( 31) 6 (29) ( 16,617 )( 1 )( 15,352 )( 1) $ 1,750,238 57($ 1,077,677 )( 32) 6 (18) ( $ 2,903 ) - $ 22,170 1 6 (3)(22) 164,187 5 ( 6,258 ) - ( 9,095 ) - ( 12,563 ) ( 1) 6 (29) 580 - ( 4,434 ) - 152,769 5( 1,085 ) - 6 (22) 29,960 1 317,645 10 6 (22) 428 - 1,239 - 30,388 1 318,884 10 $ 183,157 6 $ 317,799 10 $ 1,933,395 63($ 759,878 )( 22) 6(30) $ 1.61($ 0.95 )

4000 Operating revenue 5000 Operating costs 5900 Gross operating profit 5910 Unrealized sales gains 5920 Realized sales gains 5950 Gross operating profit, net Operating expenses 6100 Selling and marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit loss 6000 Total operating expenses 6900 Operating losses Non-operating income and expenses 7100 Interest revenue 7010 Other income 7020 Other gains and losses 7050 Finance costs 7070 Share of profit (loss) on subsidiaries, associates, and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Net income (loss) before tax 7950 Income tax expense 8200 Net profit (loss) Other comprehensive income (net) Items that will not be reclassified to profit or loss 8311 Remeasurement of defined benefit plans 8316 Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income 8330 Share of other comprehensive income on subsidiaries, associates, and joint ventures accounted for using the equity method – not reclassified to profit or loss 8349 Income tax related to items that will not be reclassified 8310 Sum 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 translating the financial statements of foreign operations 8380 Share of other comprehensive income on subsidiaries, associates, and joint ventures accounted for using the equity method – may be reclassified to profit or loss 8360 Sum of items that may be reclassified subsequently to profit or loss 8300 Other comprehensive income (net) 8500 Total comprehensive income for current period Earnings (Loss) Per Share 9750 Basic and diluted earnings (loss) per share

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

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

Unit: NT$ thousands

Notes 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 6 (22) Total comprehensive income for current period Appropriation of earnings for 2021: 6 (21) Legal reserve Special reserve Cash Reduction 6 (19) Distribution of Capital Surplus in Cash 6 (20)(21) Disposal of equity instruments measured at fair value through other comprehensive income 6 (3)(22) Balance as of December 31, 2022 Fiscal year 2023 Balance as of January 1, 2023 Net profit Other comprehensive income for current period 6 (22) Total comprehensive income for current period Disposal of equity instruments measured at fair value through other comprehensive income 6 (3)(22) Difference between the equity price of subsidiary actually acquired or disposed of and the book value 6 (20) Changes in ownership interests in subsidiaries 6 (20) Balance as of December 31, 2023	Notes		Common stock	Capital surplus				Retained earnings	Retained earnings	Retained earnings	Othe	Othe	r equity 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 foreign operations
		$ 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.

Manager: Sekiyama Takayuki

Chairman: Wong Ming-Sen

Accounting Supervisor: Lee Yung-Chih

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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 )

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

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

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

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CMC Magnetics Corporation Notes to Parent Company Only Financial Statements Fiscal years 2023 and 2022

Unit: NT$ thousands (Unless Specified Otherwise)

1. Company History

CMC Magnetics Corporation (hereinafter referred to as 'the Company') was established in the Republic of China and is primarily engaged in the manufacturing and sales of consumer electronic products such as optical discs. The Company's stock has been listed on the Taiwan Stock Exchange since February 17, 1992.

2. Date and Procedure for Approval of Financial Statements

The parent company only financial statements were approved by the Board of Directors on March 14, 2024 for release.

3. Application of New and Amended Standards and Interpretations

• a. Effect of the adoption of new issuance of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC")

The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2023:

IFRSs endorsed by the FSC that are applicable in 2023:
	Effective Date
New, Revised, and Amended Standards and Interpretations	Announced by IASB
Amendments to IAS 1 "'Disclosure of Accounting Policies"	January 1, 2023
Amendments to IAS 8 "Definition of Accounting Estimates"	January 1, 2023
Amendment to International Accounting Standard No. 12	January 1, 2023
'Deferred Income Taxes Related to Assets and Liabilities
Arising from a Single Exchange'
Amendment to International Accounting Standard No. 12	May 23, 2023
'International Tax Reform - Pillar Two Model Rules'

The Company has assessed that the standards and interpretations above have no significant influence on the Company's financial position and financial performance, except as those indicated below:

Amendment to International Accounting Standard No. 12 'Deferred Income Taxes Related to Assets and Liabilities Arising from a Single Exchange'

This amendment requires companies to recognize deferred income tax assets and liabilities related to specific transactions that generate the same amount of taxable and deductible temporary differences as recognized at the initial recognition.

The subsidiary of our company recognizes deferred income tax assets and liabilities for all deductible and taxable temporary differences arising from the use of assets and lease liabilities and their corresponding recognition as of January 1, 2022. On December 31, 2023, December 31, 2022 and January 1, 2022, the company respectively increased the investment accounted for using the equity method by $1,570, $2,767, and $2,688, and increased retained earnings by $1,570, $2,767, and $2,688. In addition, in the 2023 and 2022, the company respectively adjusted (increased/decreased) the share of subsidiaries, associated enterprises, and joint venture income/loss accounted for using the equity method by ($1,197) and $79, which had no significant impact on earnings per share and losses.

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• b. Effect of the new issuance of or amendments to IFRSs as endorsed by the FSC, but not yet adopted

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

Effective Date New, Revised, and Amended Standards and Interpretations Announced by IASB Amendment to International Financial Reporting Standard No. 16: January 1, 2024 Lease Liabilities in Sale and Leaseback Transactions Amendments to IAS 1 “Classification of Liabilities as Current or January 1, 2024 Non-current” Amendments to IAS 1 "Non-current Liabilities with Covenants" January 1, 2024 Amendment to International Accounting Standard 7 and January 1, 2024 International Financial Reporting Standard 7 - 'Supplier Financing Arrangements'

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

c.

Effects of IFRSs issued by IASB, but not yet endorsed by the FSC

The following table sets out the criteria and explanations for the new releases, amendments and revisions of the IFRSs that have been published by the IASB, but not yet endorsed by the FSC:

Effective Date New, Revised, and Amended Standards and Interpretations Announced by IASB Amendments to IFRS 10 and IAS 28 "Sale or Contribution of To be determined by the Assets between an Investor and its Associate or Joint Venture" IASB Amendments to IFRS 17 "Insurance Contracts" January 1, 2023 Amendments to IFRS 17 “Insurance Contracts” January 1, 2023 Amendment to International Financial Reporting Standard 17 'FirstJanuary 1, 2023 time Application of International Financial Reporting Standard 17 and International Financial Reporting Standard 9 - Comparative Information'

Amendment to International Accounting Standard No. 21 'Lack of January 1, 2025 Convertibility'

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

4. Summary of Significant Accounting Policies

The main accounting policies adopted in the preparation of this individual financial report are described as follows. Unless otherwise stated, these policies are consistently applied throughout the reporting period.

a. Statement of compliance

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

b. Basis of preparation

• 1) Except for the following significant items, the parent company only financial statements have been prepared on the historical cost basis:

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  - a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

  - b) Financial assets at fair value through other comprehensive income.

  - c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• 2) The preparation of financial statements has been in conformity with IFRSs endorsedbythe FSC, requiring the use of certain critical accounting estimates. It also requires the management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• c.

Foreign currency translation

The items listed in our financial report are measured in the currency of the main economic environment in which we operate (i.e., functional currency). Our individual financial report is presented in our functional currency, the NT$.

• 1) Foreign currency transactions and balances

• a) Foreign currency transactions are converted into the functional currency using the spot exchange rate on the transaction date or measurement date. Any exchange differences arising from these transactions are recognized in the current period's income statement.

• b) Balances of monetary assets and liabilities denominated in foreign currencies are adjusted at the spot exchange rates prevailing at the balance sheet date. Exchange gains or losses arising from such adjustments are recognized in profit or loss

• c) Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value through profit or loss, are translated at the exchange rates prevailing at the balance sheet date, where their translation differences are recognized in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities denominated in foreign currencies measured at fair value through other comprehensive income are translated at the exchange rates prevailing at the balance sheet date, where 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 initial transaction dates.

• d) All other foreign exchange gains or losses based on the nature of the transactions are presented in the statement of comprehensive income in the category of "other gains and losses."

• 2) Translation of foreign operations

• a) The operating results and financial positions of all the Company's entities and associates that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of the period; and

  • iii. All resulting exchange differences are recognized in other comprehensive income.

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• b) When a portion of a foreign operating entity is disposed of or sold and it is an affiliated enterprise, the exchange differences under other comprehensive income will be reclassified proportionally under current income as part of the gain or loss from the sale. However, if the Company still retains partial equity in the former affiliated enterprise but has lost significant influence over the foreign operating entity, the entire equity of the foreign operating entity will be treated as disposed of.

• c) When the foreign operation that is partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interests of the foreign operation. However, if the Company still retains partial interests in the former foreign subsidiary after losing control of the former foreign subsidiary, such a transaction shall be accounted for as disposal of all interests in the foreign operation.

d.

Classification of Current and Non-current Assets and Liabilities

• 1) Assets that meet one of the following criteria are classified as current assets:

• a) Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle.

• b) Assets held primarily for the purpose of trading.

• c) Assets that are expected to be realized within twelve months from the balance sheet date.

• d) Cash or cash equivalents, excluding assets restricted from being exchanged or used to settle a liability for at least 12 months after the balance sheet date.

The Company classifies assets not meeting the aforesaid criteria into non-current assets.

• 2) Liabilities that meet one of the following criteria are classified as current liabilities:

• a) Liabilities that are expected to be settled within the normal operating cycle.

• b) Assets held primarily for the purpose of trading.

• c) Liabilities that are expected to be settled within 12 months after the balance sheet date.

• d) The deadline for repayment cannot be unconditionally extended to at least twelve months after the balance sheet date. If the terms of the debt allow the counterparty to choose, the repayment can be made through the issuance of equity instruments without affecting its classification.

The Company classifies liabilities not meeting the aforesaid criteria into non-current liabilities.

e.

Cash equivalents

Cash equivalents refer to investments that are short-term, highly liquid, subject to a low risk of changes in value, and readily convertible to a known amount of cash. Time deposits which satisfy the above definition and for which the objective of holding is to meet the short-term operating cash commitments are classified as cash equivalents.

f.

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

• 1) Financial assets that are not measured at amortized cost or at fair value through other comprehensive income (FVTOCI).

• 2) Regular way purchases and sales of financial assets at FVTPL are accounted for on the account date.

• 3) The Company's initial recognition is on a fair value basis, with relevant transaction costs recognized in profit or loss, and subsequently to fair value, and gains or losses are recognized in profit or loss.

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• 4) When the right to receive dividends is established, the future economic benefits related to dividends may flow to the Company, and when the amount of dividends can be reliably measured, the Company recognizes dividend income in profit or loss.

• g.

Financial assets at FVTOCI

• 1) Refers to the irrevocable election made at initial recognition that allows the Company to present fair value changes of equity investment not held for trading in other comprehensive income; or debt investment that meets all the criteria simultaneously:

  • a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets.

  • b) The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal outstanding.

• 2) The Company's financial assets measured at FVTOCI in accordance with trading conventions, are accounted for on the trade date.

• 3) At initial recognition, the Company measures the financial assets at fair value plus transaction costs, and subsequently measures the financial assets at fair value:

  • a) Fair value changes of equity instruments are recognized in other comprehensive income. Upon derecognition, the accumulated gains or losses previously recognized in other comprehensive income shall not be reclassified to profit or loss, but transferred to retained earnings. When the right to receive dividends is established, and it is probable that the economic benefits related to the dividends will flow in, and the amount of dividends can be reliably measured, the Company recognizes dividend income in profit or loss.

  • b) The changes in fair value of debt instruments are recognized in other comprehensive income. Before derecognition, impairment loss, interest revenue, and gain or loss on foreign exchange are recognized in profit or loss. Upon derecognition, the accumulated gains or losses previously recognized in other comprehensive income are reclassified from equity to profit or loss.

• h. Financial assets at amortized cost

• 1) Financial assets at amortized cost are those that meet all of the following criteria:

  • a) The objective of the Company's business model is achieved by collecting contractual cash flows.

  • b) The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal outstanding.

• 2) The Company accounts for financial assets measured at amortized cost, which are in line with trade practices on the trade day.

• 3) At initial recognition, the Company measures the financial assets at fair value plus transaction costs, and subsequently adopts the effective interest method to recognize said assets as interest revenue and as impairment loss during the outstanding period according to the amortization procedure. During derecognition, the gains or losses are recognized in the profit or loss.

• 4) The Company’s time deposits which do not meet the condition of cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

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i. Accounts receivable and notes receivable

• 1) Account receivable and notes receivable are accounts and notes of which the contractual right to consideration for goods sold or services rendered is unconditional.

• 2) These include interest-free short-term account and notes receivables, where the effect of discounting is not material, and the Company measures the receivable by the original invoice amount.

• 3) The Company’s operating pattern of account receivable that are expected to be factored is for the purpose of selling, and the account receivable are subsequently measured at fair value, with any changes in fair value, recognized in profit or loss.

• j. Impairment of financial assets

The Company, at each balance sheet date, considers all reasonable and corroborative information (including forward- looking one) based on the account receivable that contains significant financial components. For those with no significant increase in credit risk since initial recognition, the loss allowance is measured at 12-month expected credit losses; for those with a significant increase in credit risk since initial recognition, the loss allowance is measured at the lifetime expected credit losses. For account receivable that does not contain significant financial components, the loss allowance is measured at the lifetime expected credit losses.

k. Derecognition of financial assets

The Company derecognizes a financial asset when one of the following conditions is met:

• 1) The contractual rights to receive the cash flows from the financial asset expire.

• 2) The contractual rights to receive cash flows of the financial asset have been transferred, and substantially all risks and rewards of ownership of the financial asset have been transferred.

• 3) The contractual rights to receive cash flows of the financial asset have been transferred; and the control over the financial asset has not been retained.

• l. Lease Transactions of the Lessor - Accounts Receivable from Leases/Operating Leases

• 1) According to the conditions of the lease agreement, when almost all risks and rewards of ownership are assumed by the lessee, it is classified as a finance lease.

  • a) At the commencement of the lease, the total lease investment amount (including the original direct costs) is recognized as 'accounts receivable from leases', and the difference between the total accounts receivable from leases and the present value is recognized as 'unearned financing income from finance leases'.

  • b) Subsequently, the financing income will be allocated over the lease term on a systematic and reasonable basis to reflect the lessor's fixed rate of return on net investment in the lease.

  • c) Lease payments related to the period (excluding service costs) are deducted from the total lease investment to reduce principal and unearned financing income.

• 2) Rental income from operating leases, net of any incentives provided to lessees, is recognized as current period profit or loss on a straight-line basis over the lease term.

m. Inventories

Inventory is measured at the lower of cost and net realizable value, with cost calculated using the weighted average method. The cost of finished goods and work in progress includes raw materials, direct labor, other direct costs, and production-related manufacturing expenses

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(allocated based on normal production capacity), but does not include borrowing costs. When comparing cost and net realizable value, the item-by-item comparison method is used, where net realizable value refers to the estimated selling price during normal business operations minus the estimated costs still to be incurred to complete the product and the estimated costs required to sell the product.

• n.

Investments accounted for using the equity method/subsidiaries and associates

• 1) A subsidiary refers to an entity under the control of the Company. When the Company is exposed to variable returns from the participation in the entity or is entitled to said variable returns, and has the ability to affect such returns through its power over the entity, the Company controls the entity.

• 2) The unrealized gains and losses arising from transactions between the Company and its subsidiaries have been eliminated. The accounting policies of the subsidiaries have been adjusted as necessary to align with the policies adopted by the Company.

• 3) The Company recognizes the profit or loss attributable to the subsidiary as current profit or loss, and recognizes the other comprehensive income attributable to the subsidiary as other comprehensive income. If the Company's recognized loss attributable to the subsidiary equals or exceeds the equity in the subsidiary, the Company continues to recognize the loss based on its ownership percentage.

• 4) If changes in the shareholding of a subsidiary do not result in loss of control (and are not transactions involving non-controlling interests), they are treated as equity transactions, meaning they are considered transactions between the owners. The difference between the adjustment amount of non-controlling interests and the fair value of the consideration paid or received is directly recognized as equity.

• 5) When the Company loses control over a subsidiary, the remaining investment in the former subsidiary is remeasured at fair value and recognized as the fair value of the original recognized financial asset or the cost of the original recognized investment in an associated enterprise or joint venture. The difference between fair value and carrying amount is recognized in the current period's income. For all amounts previously recognized in other comprehensive income related to the subsidiary, the accounting treatment is the same as when the Company directly disposes of the related assets or liabilities, i.e., if the previously recognized benefit or loss was recognized in other comprehensive income, it will be reclassified to income when disposing of the related assets or liabilities. Therefore, when control over a subsidiary is lost, the benefit or loss will be reclassified from equity to income.

• 6) Associated companies refer to entities that have a significant influence on the Company without control, usually through direct or indirect ownership of more than 20% of the voting rights. The Company accounts for investments in associated companies using the equity method, recognizing them at cost upon acquisition.

• 7) The Company recognizes the profit or loss share of the affiliated enterprises acquired as current profit or loss, and the other comprehensive income share acquired as other comprehensive income. If the Company's loss share in any affiliated enterprise equals or exceeds its equity in that affiliated enterprise (including any other unsecured receivables), the Company does not recognize any further losses, unless the Company has incurred legal obligations, presumed obligations, or has made payments on behalf of the affiliated enterprise.

• 8) When changes in an associate's equity do not arise from 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

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interests in the associate in "capital surplus" in proportion to its ownership.

• 9) The unrealized gains and losses arising from transactions between the Company and its affiliated enterprises have been eliminated in proportion to their equity interests in the affiliated enterprises. Unrealized losses are also eliminated unless evidence indicates impairment of the assets transferred in the transactions. The accounting policies of the affiliated enterprises have been adjusted as necessary and are consistent with those adopted by the Company.

• 10) When an associated company issues new shares, if our company does not subscribe or acquire them in proportion, resulting in a significant impact on our investment ratio, the adjustment to the net equity of the shares is made in the 'capital surplus' and 'investment accounted for using the equity method'. If the decrease in the investment ratio leads to a decrease in the ownership equity related to previously recognized gains or losses in other comprehensive income, and those gains or losses need to be reclassified to income when disposing of related assets or liabilities, they should be reclassified to income based on the decrease in the ratio.

• 11) Upon loss of significant influence over an associate, the Company shall remeasure the remaining investment retained in the former associate at its fair value. Any difference between the fair value and the carrying amount is recognized in profit or loss for the period.

• 12) When the company disposes of an associated enterprise and loses significant influence over it, the accounting treatment for all amounts previously recognized in other comprehensive income related to that associated enterprise will be the same as if the company were directly disposing of the related assets or liabilities. In other words, if profits or losses previously recognized in other comprehensive income are reclassified as gains or losses upon disposal of related assets or liabilities, then when significant influence over the associated enterprise is lost, those profits or losses will be reclassified from equity to income. If the company still has significant influence over the associated enterprise, the amounts previously recognized in other comprehensive income will only be proportionately transferred out according to the above method.

• 13) When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, said amounts are transferred to profit or loss in proportion to the percentage of disposal.

• 14) In accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the current profit or loss and other comprehensive income in the parent company only financial statements shall be the same as those attributable to the owners of the parent company in the financial statements prepared on a consolidated basis. The owners’ equity in the parent company only financial statements shall be the same as the equity attributable to owners of the parent company in the financial statements prepared on a consolidated basis.

• o.

Property, plant and equipment

• 1) Property, factories, and equipment are initially recognized in cost. Borrowing costs incurred during the construction period are capitalized.

• 2) Subsequent costs are only included in the book value of assets or recognized as separate assets when they are likely to flow into the company in relation to the project's future economic benefits and when the costs of the project can be reliably measured. The book value of the reset portion should be excluded. All other maintenance expenses are recognized as current expenses when incurred.

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• 3) Real estate, factory buildings, and equipment are measured using the cost model. Depreciation is not recorded for land, but is calculated using the straight-line method based on the estimated useful life for other assets. If the components of real estate, factory buildings, and equipment are significant, depreciation is recorded separately.

• 4) The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. 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:

  • Buildings and structures 2–50 years Machinery and equipment 2–11 years Others 2–5 years

• p. Lease transactions with lessees—right-of-use assets / lease liabilities

• 1) Leased assets are recognized as right-of-use assets and lease liabilities on the date they are available for use by the Company. When a lease contract is classified as a short-term lease or involves assets with low value, lease payments are recognized as expenses over the lease term using the straight-line method.

• 2) Lease liabilities are recognized on the lease commencement date at the present value of lease payments not yet paid, discounted at the incremental borrowing rate of the Company. Lease payments are fixed payments, excluding any lease incentives receivable. Subsequently, the interest method is used to measure the lease liabilities at amortized cost. Interest expense is recognized over the lease term. When changes in lease term or lease payments are not due to contract modifications, the lease liabilities are reassessed, and the right-of-use assets are adjusted for the re-measurement amount.

• 3) The right-of-use asset is recognized at cost at the lease commencement date. The cost comprises:

  • a) The originally measured amount of lease liabilities; and

  • b) Lease payments made at or before the commencement of the lease;

  • c) Any original direct costs incurred; and

  • d) The estimated cost of dismantling, removing an underlying asset, and restoring its location, or restoring the underlying asset to the state required in the terms and conditions of the lease.

Any depreciation expense shall be recognized when the useful life of the right-of-use asset or the lease term expires, whichever is earlier, based on the subsequent cost model. Any re-measurement amount of the lease liability shall adjust the right-of-use asset upon revaluation of the lease liability.

• q.

Investment property

Investment properties are recognized at cost and subsequently measured using the cost model. Depreciation is provided on a straight-line basis over the estimated useful lives, ranging from 2 to 50 years, for all investment properties except land.

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r. Intangible assets

• 1) Trademark and Patent Rights

The cost of separately acquired trademarks and patents is recognized as an acquisition cost. The trademarks and patents acquired through business mergers are recognized at their fair value on the acquisition date. Trademarks and patents are finite-lived assets and are amortized over the remaining useful life of 4 to 10 years using the straight-line method.

• 2) The royalties paid for obtaining the patents are amortized based on the estimated useful years or the contract period.

• 3) Computer software is recognized at the cost of acquisition and amortized by the straightline method based on the estimated useful life of one year.

• s.

Other assets - office ornaments (listed in other non-current assets-others)

Antiques purchased, such as oil paintings and sculptures displayed in the company, are recognized at the cost of acquisition, and is not depreciated; however, the cost will be written off when the actual disposal is carried out.

• t.

Impairment of non-financial assets

• 1) On the balance sheet date, the Company estimates the recoverable amount of assets with impairment indicators. When the recoverable amount is lower than the carrying value, an impairment loss is recognized. The recoverable amount refers to the higher of the fair value less disposal costs or the value in use of an asset. Except for goodwill, when the circumstances that led to the recognition of asset impairment in previous years no longer exist or have decreased, the impairment loss is reversed. However, the increase in the carrying amount of the asset resulting from the reversal of the impairment loss does not exceed the asset's carrying amount after deducting depreciation or amortization if no impairment loss had been recognized.

• 2) Goodwill, indefinite useful life intangible assets, and intangible assets not yet available for use should be periodically assessed for their recoverable amounts. When the recoverable amount is lower than their carrying value, impairment losses are recognized. Impairment losses on goodwill are not reversed in subsequent years.

• 3) For impairment testing purposes, goodwill is allocated to cash-generating units. This allocation is based on the identification by operating segments, distributing goodwill to cash-generating units or groups of cash-generating units expected to benefit from the entity generating the goodwill.

• u.

Borrowings

• 1) When the initial recognition of Company's borrowings is based on its fair value less transaction cost, for any subsequent difference between the price and redemption value after deducting transaction costs, interest expenses are recognized by the effective interest method during the outstanding period in profit or loss.

• 2) Fees paid on the establishment of borrowing facilities are recognized as transaction costs of the borrowing to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. When there is no evidence of the possibility that some or all the facility will be drawn down, the fee is recognized as a prepayment and amortized over the period of the facility to which it relates.

• v.

Accounts and notes payables

• 1) Account and notes payables refer to the debts incurred by purchase of raw materials, goods, or services on credit, and the notes payables incurred from both operating and nonoperating activities.

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• 2) The non-interest-bearing short-term notes and Account payables are measured at initial invoice amount as the effect of discounting is immaterial.

w. Derecognition of financial liabilities

The Company derecognizes a financial liability when the obligation under the contract is performed, canceled, or expires.

x. Offsetting of financial assets and liabilities

The financial assets and liabilities may be offset and the net amount is presented in the balance sheet when there is a legally enforceable right to offset the recognized amounts of the financial assets and liabilities and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

y. Non-hedging derivatives

Non-hedging derivatives are initially measured at the fair value on the date when a contract is signed and recognized as financial assets or liabilities at FVTPL. Subsequently, they are measured at fair value with gains or losses recognized in profit or loss.

• z. Employee benefits

• 1) Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid and shall be recognized as expense in the period when the employees render service.

• 2) Pension

• a) Defined contribution plans

For the determination of the allocation plan, the amount of retirement funds to be allocated shall be recognized as the current retirement cost based on the occurrence of rights and responsibilities. Prepaid contributions shall be recognized as assets within the scope of refundable cash or reduction of future benefits.

• b) Defined benefit plans

• i. Under the defined benefit plan, the net obligation is determined by discounting the future welfare amount earned by employees in the current or past service, and subtracting the fair value of plan assets as of the balance sheet date from the present value of the defined benefit obligation. The net obligation under the defined benefit plan is calculated annually using the projected unit credit method by an actuary, and the discount rate is determined by referencing the market yield of high-quality corporate bonds that have the same currency and term as the balance sheet date and the defined benefit plan; in countries where there is no deep market for high-quality corporate bonds, the market yield of government bonds (as of the balance sheet date) is used.

• ii. The remeasurement amount generated by the defined benefit plan is recognized in other comprehensive income in the current period and presented in retained earnings.

• iii. Expenses related to past service costs are immediately recognized in profit or loss.

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3) Termination benefits

The termination benefits are provided to employees upon the termination of their employment before the normal retirement date or when employees decide to accept the company's offer of benefits in exchange for termination of employment. The Company recognizes the expense when the offer of termination benefits is no longer revocable or when the related restructuring costs are recognized, whichever occurs earlier. Benefits that are expected to be settled within 12 months after the balance sheet date should be discounted.

• 4) Remuneration of employees and directors

Employee compensation and director remuneration are recognized as expenses and liabilities when they are legally or presumptively required and the amounts can be reasonably estimated. Subsequent adjustments are made based on accounting estimates if there are differences between the actual distribution amounts and the estimated amounts. In the case of stock-based employee compensation, the number of shares is calculated based on the closing price of the day before the Board of Directors' resolution.

aa. Income tax

• 1) Income tax expense includes both current and deferred income taxes. Except for income taxes related to items included in other comprehensive income or directly included in equity, income taxes are recognized in profit or loss.

• 2) The Company calculates the current income tax based on the tax rates legislated or substantially legislated by the countries where the Company operates and generates taxable income as of the balance sheet date. The management evaluates the status of income tax filing in accordance with the applicable income tax regulations and, when applicable, estimates the income tax liability by recording the expected tax payments to the tax authorities. The income tax on undistributed earnings, as imposed by the income tax law, is recognized as income tax expense in the year following the year in which the surplus is generated, after the surplus distribution is approved by the shareholders' meeting, reflecting the actual distribution of the surplus.

• 3) Deferred income taxes are recognized using the balance sheet method, based on the tax basis of assets and liabilities and the temporary differences that arise from their book amounts in the individual balance sheet. Deferred income tax liabilities arising from the initial recognition of goodwill are not recognized. If the deferred income tax arises from transactions (excluding individual enterprises) and does not affect accounting profit or taxable income (tax loss) at the time of the transaction, it is not recognized. Temporary differences arising from investments in subsidiaries and associated companies can be controlled as to when they are reversed, and temporary differences that are unlikely to be reversed in the foreseeable future are not recognized. The deferred income tax is based on legislation or substantial legislation in effect on the balance sheet date, and the applicable tax rate (and tax law) expected to be applied when the related deferred income tax assets are realized or the deferred income tax liabilities are settled.

• 4) 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.

• 5) 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

~24~

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.

bb. Share capital

Common stock is classified as equity. The net amount directly attributable to the issuance of new shares or stock options, after deducting income taxes, is recognized in equity as a deduction from the purchase price.

cc. Dividend allocation

Dividends are recognized in the Company’s financial statements in the period in which they are approved to be distributed as resolved by the Company’s shareholders' meeting. Cash dividends are recognized as liabilities. Stock dividends are recognized as stock dividends to be allocated and reclassified to ordinary shares on the record date of issue of new shares.

dd. Revenue recognition

Sales

• 1) The Company primarily manufactures and sells consumer electronics products such as optical discs. Revenue from sales is recognized when control of the products is transferred to the customers, which occurs upon delivery. The customers have discretion over the distribution channels and pricing of the products, and the Company has no remaining performance obligations that could affect customer acceptance of the products. The risks of obsolescence and loss are transferred to the customers when the products are shipped to the designated locations, and the customers accept the products based on the sales contracts or when there is objective evidence that all acceptance criteria have been met. The point of delivery occurs when these conditions are satisfied.

• 2) The sales of the goods are recognized at the contract price, and the amount of sales recognized is limited to the part where it is highly likely that there will not be a major reversal in the future. The payment terms for sales are usually 30 to 180 days after the date of shipment. Because the time interval between the transfer of the promised goods or services to the customer and the customer’s payment did not exceed one year, the Company did not adjust the transaction price to reflect the time value of money.

• 3) Account receivable is recognized when goods are delivered to customers because at which time the Company's right to the consideration for contracts from customers is unconditional, except for the passage of time.

• Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty

During the preparation of the parent company only financial statements, the management has exercised its judgments to adopt the accounting policies to be used, and made accounting estimates and assumptions based on reasonable expectations of future events with reference to the circumstances at the balance sheet date. If there is any difference between any critical accounting estimates and assumption made and actual results, assessment and adjustment will be conducted continuously by taking into account the historical experience and other factors. Such assumptions and estimates have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year. Please refer to the description of the uncertainties of critical accounting judgments, assumptions, and estimation uncertainty below:

~25~

a. Critical judgments for applying the Company's accounting policies

N/A.

• b. Critical accounting estimates and assumptions

• 1) Evaluation of impairment of property, factories and equipment

  • a) The Company assesses impairment based on its subjective judgment and determines the separate cash flows of individual groups of assets, useful lives of assets, and the future possible income and expenses arising from the assets depending on how assets are utilized and industrial characteristics. Any changes in economic position or in the estimates due to the Company's strategy might cause material impairment of assets in the future.

  • b) As of December 31, 2023, the book value of the company's real estate, factory buildings, and equipment is $3,178,005.

• 2) Inventory valuation

  • a) Due to the requirement of valuing inventory at the lower of cost or net realizable value, our company must exercise judgment and estimation to determine the net realizable value of inventory on the balance sheet date. Given the rapid technological changes, we assess the amount of inventory on the balance sheet date that is subject to normal wear and tear, obsolescence, or lack of market sales value, and reduce the inventory cost to the net realizable value. This inventory valuation is primarily influenced by fluctuations in raw material and product market prices, which may result in significant changes.

  • b) As of December 31, 2023, the carrying amount of the Company's inventory valuation was NT$1,029,996.

6. Description of Significant Accounting Titles

• a. Cash and cash equivalents

Cash on hand and petty cash Checks and demand deposits Time deposit	December 31, 2023 $ 186 1,122,556 46,014 $ 1,168,756	December 31, 2022 $ 271 1,160,941 30,000 $ 1,191,212

• 1) The Company deals with financial institutions with high credit ratings. The Company also deals with various financial institutions at the same time to diversify credit risks. Therefore, the expected risk of default is rather low.

• 2) The company has classified cash provided for loans and cash equivalents as financial assets measured at amortized cost - current and non-current, please refer to Note 8 for details.

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b. Financial assets at fair value through profit or loss (FVTPL)

	Items	December 31, 2023		December 31, 2022	December 31, 2022
Current items:
	Financial assets mandatorily at fair
	value through profit or loss
	Listed stocks	$ 5,364,716	$ 4,240,912
	Beneficiary certificates	50,000			-
	Derivative instruments	4,923			-
		5,419,639		4,240,912
Adjustment to valuation		285,016	(	531,183)
		$ 5,704,655	$ 3,709,729
Non-current items:
	Financial assets mandatorily at fair
	value through profit or loss
	Listed stocks	$ 2,252,030	$ 2,107,000
	Unlisted stocks and OTC	51,000			-
	companies
		2,303,030		2,107,000
	Adjustment to valuation	170,894	(	77,991)
		$ 2,473,924	$ 2,029,009
1)	The details of financial assets at FVTPL recognized in profit		or loss are as follows:
		Fiscalyear 2023		Fiscalyear 2022
	Financial assets mandatorily at
	fair value through profit or loss
	Equity instruments	$ 1,610,256	($	511,293)
	Derivative instruments	17,015		6,213
		$ 1,627,271	($	505,080)

• 1) The details of financial assets at FVTPL recognized in profit or loss are as follows:

• 2) The Company's transactions of derivative financial assets and contract information with hedging accounting applied are described below:

Derivative financial assets	December 31, 2023	December 31, 2023
	Contract amount (notional principal)	Contract period
Current items: Foreign Exchange Swap Agreement 〃

December 31, 2022: None.

Foreign Exchange Swap Agreement

~27~

The foreign exchange transactions entered into by the company are exchange transactions between two currencies, aimed at efficiently managing the time differences in different currency requirements, and reducing exchange rate and interest rate risks. However, they are not applicable to hedge accounting.

• 3) For the situation in which the Company has pledged financial assets at FVTPL as collateral, please refer to Note 8 for details.

c. Financial assets at FVTOCI

Items Non-current items: Equity instruments Non-listed stocks (OTC), emerging stock market Adjustment to valuation	December 31, 2023 $ 5,880 211,550 $ 217,430	December 31, 2022 $ 5,880 47,363 $ 53,243

• 1) The Company has elected to classify equity instrument investments that are strategic investments as financial assets at FVTOCI. The fair values of these investments as of December 31, 2023 and 2022 were NT$217,430 and NT$53,243, respectively.

• 2) The breakdown of financial assets at FVTOCI recognized in profit or loss and comprehensive income is as follows:

Equity instruments at FVTOCI Changes in fair value recognized in other comprehensive income Accumulated Loss (Profit) Excluding Transfer to Retained Earnings Dividend income recognized in profit or loss	Fiscal year 2023 $ 164,187 $- $ 7,846	Fiscal year 2022 ($ 6,258) ($ 6,746) $-

• 3) The Company did not pledge financial assets at FVOCI as collateral.

d. Notes and Account receivable

Notes receivable Less: Allowance for loss Accounts receivable Less: Allowance for loss	December 31, 2023 $ 138 ( 2) $ 136 $ 248,644 ( 46,126) $ 202,518	December 31, 2022 $ 233 ( 3) $ 230 $ 418,372 ( 22,081) $ 396,291

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1) The aging analysis of accounts receivable and notes is as follows:

Not past due Overdue for less than 30 days Overdue for 31–60 days Overdue for 61–90 days Overdue for 91–180 days Overdue for more than 181 days	December Accounts receivable $ 151,396 16,549 14,889 8,702 9,823 47,285 $ 248,644	31, 2023	December	31, 2022 Notes receivable $ 233 - - - - -
		Notes receivable $ 138 - - - - -	Accounts receivable
			$ 226,459 37,533 28,598 23,387 69,128 33,267 $ 418,372
		$ 138		$ 233

The aging analysis above is based on the number of days overdue.

• 2) The accounts receivable and notes receivable balances as of December 31, 2023 and 2022 were generated from customer contracts. Additionally, as of January 1, 2022, the notes receivable and accounts receivable balances and the allowance for doubtful accounts related to customer contracts were $526,844 and $63,624, respectively.

• 3) As of December 31, 2023 and 2022, regardless of the collateral held and other credit enhancements, the maximum amount of the exposure to the credit risk arising from the Company’s notes and account receivable is the carrying amount.

• 4) The Company did not pledge notes and account receivable as collateral.

• 5) Please refer to Note 12 (2) for details of the information on the credit risk of account and notes receivable.

e.

Financial asset transfer

The Company signed an account receivable factoring contract with Taipei Fubon Bank. According to the contract, the Company does not have to bear the risk of default over the transferred account receivable but only the loss from business disputes. As the Company did not have any continuous involvement in these transferred account receivable, the Company derecognized these transferred account receivable. Information on outstanding receivables is as follows:

Unit: NT$ thousands

December 31, 2023

	Amount of			Amount of
	account		Amount of	remaining	Interest rate
	receivable in	Amount	advance	advance	range of
Factor	factoring	derecognized	received	available	advance
Taipei Fubon Bank	USD 336	USD 336	USD-	USD 302	-

Unit: NT$ thousands

		December 31,	2022
Factor	Amount of account receivable in factoring	Amount derecognized			Interest rate range of advance -

~29~

As of December 31, 2023 and 2022, the Company’s retained amount in the account receivable transferred through factoring was NT$10,330 and NT$26,122, respectively, which have been reclassified to other receivables.

f. Inventories

Raw materials Work-in-progress Finished goods Merchandise inventory Inventory in transit	$	December 31, 2023 374,286 144 217,079 438,487 - 1,029,996	$	December 31, 2022 369,499 489 512,396 456,105 2,201 1,340,690
	$		$

The Company's inventory cost recognized as an expense for the current period:

Cost of inventories sold Unamortized fixed production overheads Price Decline Loss Others		Fiscal year 2023	Fiscal year 2022
		$ 2,455,789 36,414 26,637 4,684 $ 2,523,524	$ 2,785,415 22,208 51,078 2,938 $ 2,861,639

g. Investments accounted for using the equity method

CHC International Investment Corporation (CHC) CMC Movie Corporation (CMC Movie) (Note 1) CMC Entertainment Holding Corporation (CMC Entertainment) Sun Well Solar Corporation (Sun Well Solar) Transtouch Technology Inc. (Transtouch) CMC Entertainment Hub Corporation (CMC Entertainment Hub) EMC Investment Holding Ltd. (EMC H) CIA Holding Corp.(CIA) Deltamac (Taiwan) Co., Ltd. (Deltamac (Taiwan))	December 31, 2023 $ 3,662,453 - 165,986 - 335,612 36,891 3,239,402 433,227 157,811	December 31, 2022 $ 3,037,693 119,790 58,664 21,701 340,853 54,370 3,478,289 446,440 163,365
	$ 8,031,382	$ 7,721,165

Notes 1: Merged with CMC Entertainment in October 2023. Notes 2: The liquidation was completed in December 2023.

For information about the Company's subsidiaries, please refer to Note 4 (3) of the Company's consolidated financial statements for the 2023.

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h. Property, factories and equipment

January 1 Cost Accumulated depreciation and impairment January 1 Disposal Reclassification (Note) Depreciation expenses December 31 December 31 Cost Accumulated depreciation and impairment	Land $ 1,927,785 - $ 1,927,785 $ 1,927,785 - - - $ 1,927,785 $ 1,927,785 - $ 1,927,785		2023
		Buildings and structures $ 1,951,646 ( 985,940) $ 965,706	Machineryand equipment $ 10,395,580 ( 9,866,787) $ 528,793	Others $ 13,376 ( 7,829) $ 5,547	Total $ 14,288,387 ( 10,860,556) $ 3,427,831 $ 3,427,831 ( 8,165) 66,549 ( 308,210) $ 3,178,005 $ 13,731,343 ( 10,553,338) $ 3,178,005
		$ 965,706 - 8,985 ( 48,477) $ 926,214	$ 528,793 ( 8,165) 52,994 ( 255,203) $ 318,419	$ 5,547 - 4,570 ( 4,530) $ 5,587
		$ 1,948,415 ( 1,022,201) $ 926,214	$ 9,840,854 ( 9,522,435) $ 318,419	$ 14,289 ( 8,702) $ 5,587

~31~

2022

			2022	2022	2022
January 1 Cost Accumulated depreciation and impairment January 1 Disposal Reclassification (Note) Depreciation expenses Impairment loss December 31 December 31 Cost Accumulated depreciation and impairment	Land $ 1,927,785 -	Buildings and structures $ 1,948,872 ( 946,088) $ 1,002,784 $ 1,002,784 - 12,469 ( 49,547) -	Machineryand equipment For self-use For leasing Subtotal $ 11,208,218 $ 1,728 $ 11,209,946 ( 10,359,394) ( 1,590) ( 10,360,984) $ 848,824 $ 138 $ 848,962 $ 848,824 $ 138 $ 848,962 ( 941) - ( 941) 73,701 ( 138) 73,563 ( 319,775) - ( 319,775) ( 73,016) - ( 73,016) $ 528,793 $ - $ 528,793 $ 10,395,580 $ - $ 10,395,580 ( 9,866,787) - ( 9,866,787) $ 528,793 $ - $ 528,793			Others $ 14,427 ( 9,168) $ 5,259 $ 5,259 - 5,111 ( 4,823) - $ 5,547 $ 13,376 ( 7,829) $ 5,547	Total $ 15,101,030 ( 11,316,240) $ 3,784,790 $ 3,784,790 ( 941) 91,143 ( 374,145) ( 73,016) $ 3,427,831 $ 14,288,387 ( 10,860,556) $ 3,427,831
				For leasing $ 1,728 ( 1,590) $ 138 $ 138 - ( 138) - - $ - $ - - $ -	Subtotal $ 11,209,946 ( 10,360,984) $ 848,962
	$ 1,927,785 $ 1,927,785 - - - -
			$ 848,824 ( 941) 73,701 ( 319,775) ( 73,016) $ 528,793		$ 848,962 ( 941) 73,563 ( 319,775) ( 73,016) $ 528,793
	$ 1,927,785 $ 1,927,785 -	$ 965,706
		$ 1,951,646 ( 985,940) $ 965,706	$ 10,395,580 ( 9,866,787) $ 528,793		$ 10,395,580 ( 9,866,787) $ 528,793
	$ 1,927,785

Note: It is mainly for the reclassification from prepayments for equipment (listed in other non-current assets) and reclassification to investment property.

~32~

• 1) Capitalized amount of borrowing costs attributable to property, factories and equipment and interest range:

Capitalized amount Range of capitalized interest rate	Fiscalyear 2023 $ 184 2.08%	Fiscalyear 2022 $ 165 1.25%

• 2) For the impairment of property, factories and equipment, please refer to Note 6 (12) for details.

• 3) For information about the Company's pledging of property, factories and equipment as collateral, please refer to Note 8 for details.

• i. Lease transaction - the lessee

• 1) The assets leased by our company include land and buildings, with lease contracts typically ranging from 1 to 9 years. The lease contracts are individually negotiated and include various terms and conditions. There are no additional restrictions imposed, except that the leased assets cannot be used as collateral for borrowing.

• 2) The lease term of part of the land and buildings leased by the Company does not exceed 12 months, and the low-value assets leased are mostly multi-function printers, so they are not included in the right-of-use assets.

• 3) The carrying amount of right-of-use assets and depreciation expenses recognized are shown as follows:

shown as follows:
Land Property	December 31,2023	December 31,2022 Carryingamount $ 1,292 21,182 $ 22,474
	Carryingamount
	$ 1,298 18,614 $ 19,912

Land Property	Fiscalyear 2023 Depreciation expenses For self-use For leasing Total $ 2,590 $ - $ 2,590 2,568 - 2,568 $ 5,158 $- $ 5,158	Fiscalyear 2023 Depreciation expenses For self-use For leasing Total $ 2,590 $ - $ 2,590 2,568 - 2,568 $ 5,158 $- $ 5,158	Fiscalyear 2023 Depreciation expenses For self-use For leasing Total $ 2,590 $ - $ 2,590 2,568 - 2,568 $ 5,158 $- $ 5,158		Fiscalyear 2022	Fiscalyear 2022	Fiscalyear 2022
					Depreciation expenses
		For leasing $ - - $-	Total $ 2,590 2,568 $ 5,158		For self-use	For leasing $ - 4,867 $ 4,867	Total $ 2,589 6,793 $ 9,382
					$ 2,589 1,926 $ 4,515

• 4) In the fiscal year 2023 and 2022, the company's additions to the right-of-use assets were NT$2,596 and NT$78,324, respectively.

~33~

• 5) The profit and loss items related to lease contracts are shown as follows:

Items that affect profit or loss Interest expenses on lease liabilities Short-term lease expenses Revenue from sublease of right- of-use assets	Fiscal year 2023 $ 902 2,365 664	Fiscal year 2022
		$ 746 2,241 7,648

• 6) The total cash outflows for lease payments in the fiscal year 2023 and 2022 of our company were NT$13,676 and NT$13,352, respectively.

• j. Lease transactions - lessor

• 1) The underlying assets leased out by the Company include buildings. The lease term contracted is usually for a period of 8 to 9 years. The lease contracts are negotiated individually and contain various terms and conditions.

• 2) In the fiscal years 2023 and 2022, our company leased houses through financing leases, in accordance with the terms of the lease agreement, covering the major portion of the economic useful life of the leased assets. The information on profit and loss items related to the lease agreement is as follows:

Benefit from Subleasing Right-of- Use Assets (Included in Other Income and Loss) Financing Income from Net Lease Investment (Interest Income)	Fiscal year 2023	Fiscal year 2022
	$ - 642	$ 2,794 172

• 3) The analysis of the maturity dates of the undiscounted lease payments for the financing leases rented by the Company is as follows:

Not exceeding 1 year More than 1 year, but less than 5 years More than 5 years	December 31, 2023 $ 6,348 26,582 14,664 $ 47,594	December 31, 2022 $ 6,348 26,162 21,432 $ 53,942

• 4) The adjustment information for the undiscounted lease payments and net lease investments (listed under other current and non-current assets) from the financing lease rentals of the Company is as follows:

~34~

Unpresented lease payments No financing income earned Net Lease Investment	December 31,2023 Current Non-current $ 6,348 $ 41,246 ( 565) ( 1,649) $ 5,783 $ 39,597	December 31,2023 Current Non-current $ 6,348 $ 41,246 ( 565) ( 1,649) $ 5,783 $ 39,597	December 31,2022 Current Non-current $ 6,348 $ 47,594 ( 642) ( 2,214) $ 5,706 $ 45,380	December 31,2022 Current Non-current $ 6,348 $ 47,594 ( 642) ( 2,214) $ 5,706 $ 45,380
		Non-current $ 41,246 ( 1,649) $ 39,597		Non-current $ 47,594 ( 2,214) $ 45,380
	$ 5,783		$ 5,706

• 5) In the fiscal years 2023 and 2022, the company recognized rental income of NT$51,600 and NT$56,195, respectively, based on operating lease contracts, with no corresponding lease payments.

• 6) The analysis of the maturity date of the lease payments to be paid to the Company under operating lease is as follows:

perating lease is as follows:
Not exceeding 1 year More than 1 year, but less than 5 years More than 5 years	December 31, 2023	December 31, 2022 $ 32,915 102,788 12,259 $ 147,962
	$ 50,229 110,779 - $ 161,008

k. Investment property

January 1 Cost Accumulated depreciation and impairment January 1 Reclassification (Note) Depreciation expenses December 31 December 31 Cost Accumulated depreciation and impairment			2023
		Land	Buildings and structures $ 1,245,268 ( 691,797) $ 553,471 $ 553,471 211 ( 21,692) $ 531,990 $ 1,243,823 ( 711,833) $ 531,990		Total
		$ 63,362 - $ 63,362 $ 63,362 - - $ 63,362 $ 63,362 - $ 63,362
				$ 616,833 211 ( 21,692) $ 595,352
				$ 1,307,185 ( 711,833) $ 595,352

2022

~35~

January 1 Cost Accumulated depreciation and impairment January 1 Reclassification (Note) Depreciation expenses December 31 December 31 Cost Accumulated depreciation and impairment	Land $ 63,362 - $ 63,362 $ 63,362 - - $ 63,362 $ 63,362 - $ 63,362	Buildings and structures $ 1,247,313 ( 671,726) $ 575,587 $ 575,587 180 ( 22,296) $ 553,471 $ 1,245,268 ( 691,797) $ 553,471

Note: Property, factories and equipment and prepayments for equipment (listed in other non-current assets)

• 1) Rental revenue and direct operating expenses of investment property:

Rental revenue of investment property Direct operating expenses incurred by investment property generating rental revenue in the current period Direct operating expenses incurred by investment property not generating rent revenue in current period	Fiscalyear 2023 $ 48,425 $ 17,129 $ 9,420	Fiscalyear 2022 $ 48,416 $ 15,100 $ 9,887

• 2) The fair values of the investment properties held by the Company as of December 31, 2023 and 2022 were NT$4,458,110 and NT$4,446,449, respectively, based on the evaluation results using the nearby comparable transaction prices.

• 3) For information on the investment property pledged as collateral, please refer to Note 8 for details.

l. Impairment of non-financial assets

• 1) The impairment losses recognized by the Company in the 2023 and 2022 fiscal years amounted to NT$0 and NT$73,016, respectively. The details are as follows:

~36~

Impairment Loss - Machinery and Equipment	Fiscal year 2023 Recognized in the current profit or loss Recognized in other comprehensive income $- $-	Fiscal year 2023 Recognized in the current profit or loss Recognized in other comprehensive income $- $-		Fiscal year 2022	Fiscal year 2022
		Recognized in other comprehensive income $-		Recognized in the current profit or loss	Recognized in other comprehensive income $-
				$ 73,016

• 2) The Company adopted the value in use and the net disposal value of existing assets as the recoverable amount in the impairment test on December 31, 2023 and 2022. The discount rate used to estimate the value in use is as follows:

		December 31, 2023	December 31, 2022
	Machinery and equipment	7.60%	6.57%
3)	Accumulated write-off of	impairments
		Fiscal year 2023	Fiscal year 2022
	Machinery and equipment	$ 83,718	$ 1,663

When the Company disposed of machinery and equipment in 2023 and 2022, the relevant accumulated impairments were also written off in order to calculate the gains or losses on the disposal.

• m. Other non-current assets

Prepayments for equipment Refundable deposits Net finance lease receivable Overdue receivables Less: Allowance for loss Other non-current assets - others	December 31, 2023 $ 23,954 3,397 39,597 108,200 ( 108,200) 406,604 $ 473,552	December 31, 2022 $ 6,432 4,897 45,380 139,437 ( 139,437) 415,428 $ 472,137

n. Short-term borrowings

Nature of borrowings Borrowings from financial Institutions Credit borrowings Interest rate range	December 31, 2023 $ 450,000 2.10~2.27%	December 31, 2022 $ 550,000 2.03~2.09%

The short-term loan limits for the Republic of China on December 31, 2023 and 2022 have been respectively issued promissory notes in the amounts of NT$2,069,935 and NT$1,820,075 as collateral.

o. Short-term Notes Payable

~37~

Accounts Payable Commercial Draft Interest Rate	December 31, 2023 $- -	December 31, 2022 $ 50,000 2.20%

The above-mentioned short-term commercial papers are guaranteed and accepted by financial institutions such as banks and ticket companies.

p. Financial liabilities at fair value through profit or loss

Items Current items: Financial liabilities held for trade Non-hedging derivative financial instruments -Derivative instruments	December 31, 2023 $ 648	December 31, 2022 $ 1,952

• 1) The net losses recognized for the financial liabilities held for trading by the Company in the fiscal years 2023 and 2022 were NT$20,619 and NT$50,590, respectively.

• 2) The information on the transactions and contracts of non-hedging derivative financial liabilities is as follows:

The information on the transactions liabilities is as follows:	and contracts of non-hedging derivative financial
	December 31, 2023
	Contract amount
Derivative financial liabilities	(notional principal) Contract period
Current items:
Forward exchange agreements	RMB 7,220 thousand 2023.11.08~2024.02.23
〃	RMB 7,057 thousand 2023.12.29~2024.03.28

~38~

	December 31, 2022	December 31, 2022
	Contract amount
Derivative financial liabilities	(notional principal)	Contract period
Current items:
Forward exchange agreements	JPY 100,000 thousand	2022.12.01~2023.03.31
〃	RMB 6,997 thousand	2022.12.01~2023.03.31
〃	RMB 7,189 thousand	2022.11.04~2023.05.08
〃	RMB 7,094 thousand	2022.11.11~2023.05.15
〃	RMB 7,018 thousand	2022.12.01~2023.05.31
〃	US$1,000 thousand	2022.12.23~2023.03.01
〃	US$1,000 thousand	2022.11.18~2023.01.18
〃	US$1,390 thousand	2022.11.25~2023.01.18
〃	US$1,000 thousand	2022.12.05~2023.01.18
〃	US$1,370 thousand	2022.12.06~2023.02.17
Foreign Exchange Swap Agreement	US$1,600 thousand	2022.11.23~2023.02.24
〃	US$1,700 thousand	2022.11.29~2023.03.01
〃	US$1,000 thousand	2022.10.21~2023.01.18
〃	US$1,500 thousand	2022.12.12~2023.03.13

Forward exchange agreements

The foreign exchange forward transactions made by the Company are forward transactions, in which foreign currencies are pre-sold, for the purpose of avoiding the exchange rate risk of import and export prices, without hedging accounting applied.

Foreign Exchange Swap Agreement

The foreign exchange transactions entered into by the company are exchange transactions between two currencies, aimed at efficiently managing the time differences in different currency requirements, and reducing exchange rate and interest rate risks. However, they are not applicable to hedge accounting.

- q. Long term borrowings

Borrowings from financial Institutions Secured borrowings Credit borrowings Long-term notes Less: Long-term loans due within one year Interest rate range	December 31,2023 $ 2,515,000 1,150,000 280,000 3,945,000 ( 925,000) $ 3,020,000 1.995~2.27%	December 31,2022 $ 3,305,000 325,000 280,000 3,910,000 ( 1,525,000) $ 2,385,000 1.87~2.5%

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• 1) The Company signed a new financing commitment contract with O-Bank Co., Ltd. in June 2022. In 24 months from the date of the first drawdown, the total amount of borrowings is NT$300 million. The Company's main commitments are as follows:

The current ratio during the contract period shall be maintained at 100% or above; the debt ratio shall not be higher than 90% (inclusive); the net value of tangible assets shall not be lower than NT$12 billion; the interest coverage ratio (including depreciation and amortization expenses) shall not be less than 250%.

The outstanding balance of the Company’s borrowings as of December 31, 2023 and 2022 were both NT$300,000.

As the Company did not meet the aforesaid agreed terms as of December 31, 2022, the relevant balance amounting to NT$580,000 (including long-term notes borrowed from O- Bank Co., Ltd.) has been reclassified to current liabilities. In addition, on July 11, 2023, the Company obtained a notification document from the bank agreeing to the waiver.

• 2) The Company signed a financing commitment contract with Taipei Fubon Bank in April 2021. In 36 months from the date of the first drawdown, the total amount of borrowing is NT$1 billion. Subsequently, The Company signed a new financing commitment contract with Taipei Fubon Bank in March 2023. In 36 months from the date of the first drawdown, the total amount of borrowing is NT$1.5 billion. The Company's main commitments are as follows:

During the contract period, the following financial ratios should be maintained and the consolidated financial statements should be reviewed quarterly: the current ratio should be maintained at 100% or above (inclusive); the debt ratio should not exceed 90% (inclusive); the tangible net worth should not be less than NT$12 billion; the sum of cash, financial assets measured at fair value through profit or loss (current), and financial assets measured at amortized cost (current) minus financial liabilities should not be less than NT$2 billion (restricted financial assets or current assets should be deducted from the aforementioned items).

The outstanding balance of the Company's borrowings as of December 31, 2023 and December 31, 2022 were NT$800,000 and NT$920,000, respectively.

• 3) The remaining loans will be repaid in installments until the end of 2026.

• 4) Please refer to Note 8 for details of the guarantees for long-term borrowings.

• r. Pension

• 1) a) The Company has established a retirement scheme with definite benefits in accordance with the provisions of the Labor Standards Act. This scheme applies to the years of service of all regular employees prior to the implementation of the Labor Retirement Pension Regulations on July 1, 2005, as well as the subsequent years of service of employees who choose to continue to be governed by the Labor Standards Act after the implementation of the Labor Retirement Pension Regulations. For employees who meet the retirement conditions, the payment of retirement benefits is calculated based on years of service and the average salary of the six months prior to retirement. For years of service within 15 years (inclusive), two units are given for each full year, and for years of service exceeding 15 years, one unit is given for each full year, with a maximum accumulation of 45 units. The Company sets aside 2% of the total salary amount each month as a retirement fund, which is stored in a special account in the name of the Labor Retirement Reserve Supervisory Committee at the Bank of Taiwan. In addition, before the end of each fiscal year, the Company

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estimates the balance of the aforementioned labor retirement reserve account. If the balance is insufficient to pay the estimated retirement benefits for employees who are expected to meet the retirement conditions in the next fiscal year based on the aforementioned calculation, the Company will make a one-time allocation of the difference by the end of March of the following year.

• b) The amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities (listed in other non-current liabilities)	December 31, 2023 $ 176,467 ( 135,636) $ 40,831	December 31, 2022 $ 192,517 ( 144,951) $ 47,566

• c) The changes in net defined benefit liabilities are as follows:

2023 Balance at January 1 Service cost for the current period Interest expense (revenue) Re-measurements: Return on plan assets (not including interest revenue or expenses) Experience adjustments Pension contributed Pension paid Balance at December 31	Present value of defined benefit obligations $ 192,517 354 2,311 195,182 - 4,203 4,203 - ( 22,918) $ 176,467	Fair value of plan assets ($ 144,951) - ( 1,741) ( 146,692) ( 1,300) - ( 1,300) ( 10,562) 22,918 ($ 135,636)	Net defined benefit liabilities $ 47,566 354 570 48,490 ( 1,300) 4,203 2,903 ( 10,562) - $ 40,831

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2022 Balance at January 1 Service cost for the current period Interest expense (revenue) Re-measurements: Return on plan assets (not including interest revenue or expenses) The effect of changes in financial assumptions Experience adjustments Pension contributed Pension paid Balance at December 31	Present value of defined benefit obligations $ 213,753 424 1,496 215,673 - ( 6,786) ( 5,532) ( 12,318) - ( 10,838) $ 192,517	Fair value of plan assets ($ 132,137) - ( 925) ( 133,062) ( 9,852) - - ( 9,852) ( 12,875) 10,838 ($ 144,951)	Net defined benefit liabilities $ 81,616 424 571 82,611 ( 9,852) ( 6,786) ( 5,532) ( 22,170) ( 12,875) - $ 47,566

d) The Company's defined welfare retirement plan fund assets are entrusted for operation by the Bank of Taiwan in accordance with the investment and utilization plan of the fund for the year, within the prescribed ratios and amounts. The entrusted operation is carried out in accordance with Article 6 of the Regulations for the Receipt, Custody, and Utilization of Labor Retirement Funds (i.e. depositing funds in domestic and foreign financial institutions, investing in listed, over-the-counter, or private equity securities, and investing in securitized products of domestic and foreign real estate), and the related utilization is supervised by the Labor Retirement Fund Supervisory Commission. The minimum annual distribution of the fund's utilization shall not be lower than the yield calculated based on the local bank's two-year fixed deposit interest rate. If there is any shortfall, it shall be supplemented by the national treasury after approval by the competent authority. As the company has no authority to participate in the operation and management of the fund, it is unable to disclose the fair value classification of plan assets as required by paragraph 142 of International Accounting Standard No. 19. The fair value of the total assets of the fund as of December 31, 2023 and December 31, 2022 is detailed in the government's annual reports on the utilization of the labor retirement fund.

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e) The actuarial assumptions related to pension are summarized as follows:

Discount rate Rate of future salary increase	Fiscalyear 2023	Fiscalyear 2022
	1.2%	1.2%
	2%	2%

The assumption for future mortality rates is based on the estimation from the 6th experience life table of the life insurance industry in Taiwan.

The present value of the defined benefit obligation affected by the changes in the main actuarial assumptions adopted is as follows:

December 31, 2023 The effects on the present value of defined benefit obligations December 31, 2022 The effects on the present value of defined benefit obligations	Discount rate Increase by 0.25% Decrease by 0.25% ($ 2,796) $ 2,872 ($ 3,252) $ 3,345	Discount rate Increase by 0.25% Decrease by 0.25% ($ 2,796) $ 2,872 ($ 3,252) $ 3,345	Rate of future salary increase Increase by 0.25% Decrease by 0.25% $ 2,403 ($ 2,354) $ 2,831 ($ 2,770)	Rate of future salary increase Increase by 0.25% Decrease by 0.25% $ 2,403 ($ 2,354) $ 2,831 ($ 2,770)
		Decrease by 0.25% $ 2,872 $ 3,345		Decrease by 0.25% ($ 2,354) ($ 2,770)

The sensitivity analysis mentioned above is based on analyzing the impact of a single assumption change while keeping other assumptions constant. In practice, many assumptions may be interrelated and change together. The sensitivity analysis is consistent with the method used to calculate the net pension liability on the balance sheet. The method and assumptions used in preparing the sensitivity analysis for this period are the same as those used in the previous period.

• f) The Company plans to allocate a retirement plan payment of NT$8,294 in 2024.

• g) As of December 31, 2023, the weighted average duration of the retirement plan is 7 years. The analysis of retirement benefit payments at maturity is as follows:

Not exceeding 1 year More than 1 year, but less than 5 years More than 5 years	$ 14,168 83,125 51,949 $ 149,242

• 2) a) For employees who choose the labor pension system stipulated under the Labor Pension Act, the Company makes monthly contributions to employees’ individual pension accounts of the Bureau of Labor Insurance at 6% of their monthly salaries and wages. Based on the employee’s individual pension accounts and the amount of accumulated income from the annual investment and utilization plan, the payment of employee pension is made on a monthly basis or in a lump sum.

• b) In the 2023 and 2022, the Company recognized retirement benefit costs in accordance

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with the above-mentioned retirement benefit regulations, amounting to NT$15,447 and NT$17,032, respectively.

s.

Share capital

• 1) As of December 31, 2023, the authorized capital of our company is NT$45,000,000, divided into 4,500,000,000 shares, with a paid-up capital of NT$10,893,483 and a par value of NT$10 per share. All the share capital issued by our company has been fully collected. The number of outstanding common shares of our company at the beginning and end of the period is adjusted as follows (unit: shares):

January 1 Cash reduction December 31	2023 1,089,348,328 - 1,089,348,328	2022 1,158,881,200 ( 69,532,872) 1,089,348,328

• 2) The company, by resolution of the shareholders' meeting on June 17, 2022, intends to reduce its capital by NT$695,329 in order to enhance shareholder return on equity and optimize its capital structure. The reduction will involve the cancellation of 69,532,872 ordinary shares, representing a cash reduction ratio of 6%. For every one thousand shares cancelled, 940 new shares will be issued (i.e., 60 shares will be cancelled for every one thousand shares). Each share will be refunded NT$0.6. The reduction will be effective as of August 12, 2022, and the capital refund has already been completed on October 28, 2022.

t.

Capital surplus

According to the regulations of the Company Law, the surplus from the issuance of stocks exceeding the face value and the capital surplus received as gifts, apart from being used to offset losses, shall be distributed in the form of new shares or cash in proportion to the original shareholdings of the shareholders when the company has no accumulated losses. Furthermore, in accordance with the relevant provisions of the Securities and Exchange Act, the total amount of capital surplus allocated to capital shall not exceed ten percent of the paid-in capital each year. If the company still has insufficient capital to cover the capital losses after using the retained earnings, the capital surplus shall not be used to supplement it.

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January 1 Changes in ownership interests in subsidiaries Difference between the equity price of subsidiary actually acquired or disposed of and the book value December 31 January 1 Distribution of Capital Surplus in Cash December 31	Sharepremium $ 1,698,443 - -		2023		Total $ 6,714,779 4 5,723 $ 6,720,506 Total $ 6,830,667 ( 115,888) $ 6,714,779
		Treasury share transactions $ 5,014,346 - -	Difference between the equity price of subsidiary actually acquired or disposed of and the book value $ 68 - 5,723 $ 5,791 2022	Others $ 1,922 4 -
	$ 1,698,443	$ 5,014,346		$ 1,926
	Sharepremium $ 1,814,331 ( 115,888) $ 1,698,443
		Treasury share transactions $ 5,014,346 -	Difference between the equity price of subsidiary actually acquired or disposed of and the book value $ 68 - $ 68	Others $ 1,922 -
		$ 5,014,346		$ 1,922

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u. Retained Earnings (Accumulated Deficits)

• 1) According to the company's articles of incorporation, if there is a surplus in the annual final accounts, taxes should be paid first to offset accumulated losses. Next, 10% should be set aside as statutory surplus reserves, but this is not required if the statutory surplus reserves have reached the total capital of the company. After making provisions or reversing special surplus reserves in accordance with the law, if there is still a surplus, it will be combined with the initial accumulated undistributed profits. The Board of Directors will prepare a surplus distribution proposal, which will be distributed after being approved by the shareholders' meeting. The company's dividend policy takes into account the capital expenditure requirements and aligns with the company's long-term financial planning. The total amount of dividends shall not be less than 10% of the distributable profits for the current year. However, if the distributable profits are less than 1% of the paid-in capital, they may not be distributed. When distributing dividends, cash dividends shall not be less than 10% of the total dividend amount.

• 2) The legal reserve shall not be used except for compensation for the Company's losses and issue of new shares or cash in proportion to the shareholders' original shares. However, in the case of issue of new shares or cash, it shall be limited to the portion of the legal reserve in excess of 25% of the paid-in capital.

• 3) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount may be included in the distributable earnings.

• 4) a) The company approved the proposal to allocate the losses of the fiscal year 2022 for compensation at the shareholders' meeting held on June 13, 2023.

• b) The Company passed the proposal for 2021 earnings distribution as resolved by the shareholders' meeting on June 17, 2022 as follows:

Legal reserve appropriation Special surplus reserve appropriation	2021 Amount Earnings per share (NT$) $ 15,259 $ - 137,333 - $ 152,592	2021 Amount Earnings per share (NT$) $ 15,259 $ - 137,333 - $ 152,592
		Earnings per share (NT$)
		$ - -

• c) On June 17, 2022, the Company resolved at the shareholders' meeting to distribute cash dividends of NT$115,888 from the capital surplus generated by the issuance of shares at a premium over the face value, with a distribution of NT$0.1 per share.

• The dividend distribution for the fiscal year 2021 is consistent with the proposal of the Board of Directors of the Company.

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• 5) The Company's Board of Directors passed the proposal for 2023 earnings distribution on March 14, 2024 as follows:

March 14, 2024 as follows:
Legal reserve appropriation Reversal of special reserve Cash dividends	Fiscal year 2023 Amount Earnings per share (NT$) $ 66,486 $ - ( 153,322) - 740,757 0.68 $ 653,921
		Earnings per share (NT$)
		$ - - 0.68

The aforementioned 2023 profit distribution proposal, as of March 14, 2024, has not yet been resolved by the shareholders' meeting.

• 6) Please refer to the 'Public Information Observation Station' of the Taiwan Stock Exchange for details on the distribution of profits approved by the aforementioned Board of Directors and resolved by the shareholders' meeting.

v. Other equity items

January 1 Adjustment to valuation: ‒ Parent company ‒ Subsidiaries and associates Reclassified from valuation adjustment to retained earnings Foreign currency translation difference: ‒ Parent company ‒ Subsidiaries and associates December 31	Foreign currency translation ($ 113,253) - - - 29,960 428 ($ 82,865)		2023
		Foreign currency translation	Unrealized valuation gains and losses ($ 209,333) 164,187 ( 10,140) 35,683 - - ($ 19,603)	Total ($ 322,586) 164,187 ( 10,140) 35,683 29,960 428 ($ 102,468)

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w.	2022 Foreign currency translation Unrealized valuation gains and losses January 1 ($ 432,137) ($ 181,679) ( Adjustment to valuation: ‒ Parent company - ( 6,258) ( ‒ Subsidiaries and associates - ( 14,650) ( Reclassified from valuation adjustment to retained earnings - ( 6,746) ( Foreign currency translation difference: ‒ Parent company 317,645 - ‒ Subsidiaries and associates1,239 - December 31 ($ 113,253) ($ 209,333) ( Operating revenue Fiscalyear 2023 F Revenue from customer contracts $ 3,054,699 $	2022
			Total
			$ 613,816) 6,258) 14,650) 6,746) 317,645 1,239 $ 322,586) iscalyear 2022
			3,401,673

1) Breakdown of revenue from customer contracts

The Company's revenue comes from the provision of goods and services that transferred at a certain point in time. The revenue can be broken down into the following main product lines:

lines:
Timing of revenue recognition Revenue recognized at a specific timing Timing of revenue recognition Revenue recognized at a specific timing	Storage media $ 2,940,051 Storage media $ 3,303,630	Fiscalyear 2023
		Others $ 114,648	Total $ 3,054,699
		Fiscalyear 2022
		Others $ 98,043	Total $ 3,401,673

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• 2) Contract liabilities

• a) Contract liabilities related to revenue from customer contracts recognized by the Company are as follows:

Product sales contracts	December 31, 2023 $ 56,169	December 31, 2022 $ 84,425	January 1, 2022 $ 136,295

• b) Contract liabilities at beginning of period recognized as revenue for the period

x. y. z.	Fiscal year 2023 Fiscal year 2022 Opening balance of contract liabilities recognized as income for the period Product sales contracts $ 77,068 $ 133,485 Interest revenue Fiscal year 2023 Fiscal year 2022 Interests on bank deposits $ 5,130 $ 1,436 Interest revenue from financial assets at amortized cost - interest revenue 78 15 Other (please refer to Note 6 (10)) 642 172 $ 5,850 $ 1,623 Other income Fiscal year 2023 Fiscal year 2022 Rental income $ 51,600 $ 56,195 Dividend income 779,008 265,098 Other income 18,671 7,836 $ 849,279 $ 329,129 Other gains and losses Fiscal year 2023 Fiscal year 2022 Net gains (losses) on financial assets at FVTPL $ 856,109 ($ 770,178) Net losses on financial liabilities at fair value through profit or loss ( 20,619) ( 50,590) Net Foreign Exchange Gains 5,723 90,131 Gains on disposal of property, factories and equipment and other non-current assets 654 386 Non-financial asset impairment losses - ( 73,016)	Fiscal year 2023	Fiscal year 2022

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Depreciation expenses not for self use (Note) Gain on sublease of right-of-use assets Other expenditures	Fiscal year 2023 ( 21,692) - ( 6,917) $ 813,258	Fiscal year 2022 ( 27,163) 2,794 ( 11,515) ($ 839,151)

Note: Depreciation expenses for investment properties, leased rights assets, and leased equipment.

aa. Finance costs

Interest expenses: Bank borrowings Others Borrowing facility management expense Less: Amount qualified for capitalization	Fiscal year 2023 $ 83,458 994 3,002 87,454 ( 184) $ 87,270	Fiscal year 2022 $ 53,780 792 431 55,003 ( 165) $ 54,838

bb. Employee benefit, depreciation, and amortization expenses

In 2023 and 2022, the employee benefit, depreciation, and amortization expenses incurred by the Company are summarized as follows by function:

Functional Category Nature		Fiscalyear 2023
	Operatingcosts	Operatingexpenses	Total
Employee benefit expenses
Salaries and wages	$ 305,927	$ 105,754	$ 411,681
Labor and health insurancepremiums	32,945	10,982	43,927
Pension expenses	11,408	4,963	16,371
Remuneration of directors	-	2,920	2,920
Otherpersonnel expenses	5,938	3,618	9,556
Depreciation expenses	231,379	81,989	313,368
Amortization expenses	3,171	35,626	38,797

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Functional Category Nature		Fiscalyear 2022
	Operatingcosts	Operatingexpenses	Total
Employee benefit expenses
Salaries and wages	$ 347,847	$ 92,830	$ 440,677
Labor and health insurancepremiums	36,621	10,380	47,001
Pension expenses	13,349	4,678	18,027
Remuneration of directors	-	1,330	1,330
Other personnel expenses	6,543	2,846	9,389
Depreciation expenses	288,807	89,853	378,660
Amortization expenses	4,943	35,328	40,271

• 1) According to 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.

• 2) The estimated amounts for employee and director remuneration in the fiscal year 2023 of our company are $7,000 and $1,600, respectively. The aforementioned amounts are recorded under the salary expense account.

In 2023, based on the profitability of that year, it is estimated at 1.01% and 0.23% respectively. The Board of Directors has decided to distribute the actual amounts of $7,000 and $1,600 respectively, in the form of cash.

• 3) Due to accumulated losses in the fiscal year 2022 of the Company, there is no need to estimate employee and director remuneration.

• 4) The information on employee compensation and the remuneration of directors approved by the Board of Directors of the Company is available on the MOPS.

• 5) As of 2023 and 2022, the number of employees was 627 and 705, respectively. Among them, the number of non-executive directors who were not concurrently employed in 2023 and 2022 fiscal years was 6 and 6, respectively.

• 6) The Company's stock has been listed on the Taiwan Stock Exchange, so the following information is additionally disclosed:

• a) The average employee welfare expenses for the 2023 and 2022 fiscal years were NT$775 and NT$737, respectively.

• b) The average employee welfare expenses for the 2023 and 2022 fiscal years were NT$663 and NT$630, respectively.

• c) The average employee salary adjustment is 5.2%.

• d) The company has set up an audit committee in 2023 and 2022, so there was no remuneration for supervisors.

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• e) The Company's salary and remuneration policy:

Directors and Managers:

• i. A remuneration committee is set up to effectively measure the overall salary and remuneration of the Company’s directors and managers.

• ii. Managerial compensation includes fixed salary and employee rewards, with salary being based on industry standards as well as job title, position level, education, professional skills, and responsibilities.

Employee:

• i. The overall salary and remuneration level of employees is based on external competitiveness and internal fairness with the aim of effectively attracting and retaining talents.

• ii. Employee salary and remuneration is linked with the performance management system to motivate employees to develop, and drive the Company's positive development.

• iii. The Company's long-term and short-term goals, individual dedication time, positions held, and overall work performance are connected to motivate employees.

cc. Income tax

• 1) Income tax expense

• a) Components of income tax expense:

Deferred income tax: Initial recognition and reversal of temporary differences Income tax expense	Fiscal year 2023	Fiscal year 2022
	16,617 $ 16,617	15,352 $ 15,352

b)	The amount of income tax related to other comprehensive	The amount of income tax related to other comprehensive	income:
		Fiscal year 2023	Fiscal year 2022
	Remeasurement of defined benefit obligations	($ 580)	$ 4,434

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2) Reconciliation between income tax expense and accounting profit

Income tax calculated based on income before tax and statutory tax rate Items to be adjusted as required by tax regulations Items exempt from taxation according to the tax law Unrealized gains or losses on financial assets that are not taxable Temporary differences not recognized in deferred income tax assets Taxable loss not recognized in deferred income tax assets Change in realizability evaluation of deferred income tax liabilities Income tax expense	Fiscal year 2023 $ 353,371 748 ( 109,032) ( 214,262) - 536,819 ( 551,027) $ 16,617	Fiscal year 2023	Fiscal year 2022 ($ 212,481) 6,943 ( 8,110) 107,100 68,467 29,162 24,271 $ 15,352

3) The amount of deferred income tax assets or liabilities that arise from temporary differences and tax losses are set out below:

Deferred in come tax assets: ‒ Temporary differences: Over-limit of allowance for loss Inventory valuation loss Compensation for unused annual leave Unrealized exchange loss Remeasurement of defined benefit obligations Unrealized sales gains ‒ Tax losses Subtotal Deferred income tax liabilities: ‒ Temporary differences: Provision for land value increment tax Others Subtotal Total	January 1	2023	2023
		Recognized in profit or loss	Recognized in other comprehensive income	December 31 $ 28,836 31,655 4,038 10,464 8,505 28,170 36,331 $ 147,999 ($ 21,379) ( 4,287) ($ 25,666) $ 122,333
	$ 29,818 26,328 4,071 6,816 7,925 22,869 64,281	($ 982) 5,327 ( 33) 3,648 - 5,301 ( 27,950) ($ 14,689) $ - ( 1,928) ($ 1,928) ($ 16,617)	$ - - - - 580 - -
	$ 162,108		$ 580
	($ 21,379) ( 2,359) ($ 23,738) $ 138,370		$ - -
			$-
			$ 580

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Deferred in come tax assets: ‒ Temporary differences: Over-limit of allowance for loss Inventory valuation loss Compensation for unused annual leave Unrealized exchange loss Remeasurement of defined benefit obligations Unrealized sales gains ‒ Tax losses Subtotal Deferred income tax liabilities: ‒ Temporary differences: Provision for land value increment tax Others Subtotal Total	January1	2022	2022
		Recognized in profit or loss	Recognized in other comprehensive income	December 31 $ 29,818 26,328 4,071 6,816 7,925 22,869 64,281 $ 162,108 ($ 21,379) ( 2,359) ($ 23,738) $ 138,370
	$ 31,858 16,112 4,249 5,326 12,359 20,999 88,650	($ 2,040) 10,216 ( 178) 1,490 - 1,870 ( 24,369) ($ 13,011) $ - ( 2,341) ($ 2,341) ($ 15,352)	$ - - - - ( 4,434) - -
	$ 179,553		($ 4,434) $ - -
	($ 21,379) ( 18) ($ 21,397) $ 158,156
			$-
			($ 4,434)

4) The validity period of the Company's unused tax loss carryforwards and the relevant amounts of unrecognized deferred income tax assets are as follows:

December 31, 2023

Year of occurrence	Declared/ Approved amount	Amount of unused tax loss carryforwards $ 792,870 1,242,438 2,413,223 570,239 542,996 95,706 570,212 1,912,933	Amount of unrecognized deferred income tax assets Final year the carryforwards are due $ 792,870 Fiscal year 2024 1,239,773 Fiscal year 2025 2,368,741 Fiscal year 2026 506,234 Fiscal year 2027 472,491 Fiscal year 2028 95,706 Fiscal year 2031 570,212 Fiscal year 2032 1,912,933 Fiscal year 2033 $ 7,958,960	Final year the carryforwards are due
		$ 8,140,617

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December 31, 2022

Year of occurrence Declared/ Approved amount Fiscal year 2013 Approved amount Fiscal year 2014 " Fiscal year 2015 " Fiscal year 2016 " Fiscal year 2017 " Fiscal year 2018 " Fiscal year 2021 Declared amount Fiscal year 2022 "	Declared/ Approved amount	Amount of unused tax loss carryforwards $ 1,396,315 792,870 1,242,438 2,413,223 570,239 542,996 650,803 145,810	Amount of unrecognized deferred income tax assets Final year the carryforwards are due $ 1,326,765 Fiscal year 2023 680,464 Fiscal year 2024 1,102,989 Fiscal year 2025 2,413,223 Fiscal year 2026 570,239 Fiscal year 2027 542,996 Fiscal year 2028 650,803 Fiscal year 2031 145,810 Fiscal year 2032 $ 7,433,289	Final year the carryforwards are due
		$ 7,754,694

• 5) Deductible temporary differences that are not recognized in deferred income tax assets:

Deductible temporary differences	December 31,2023 $ 8,431,354		December 31,2022
			$ 11,365,592

• 6) The profit-seeking enterprise income tax returns filed by the Company up to 2021 have been approved by the tax collection authorities.

dd. Earnings (Loss) Per Share

Basic and diluted earnings per share Net profit Diluted earnings per share Net profit Potential effect of dilutive ordinary shares Employee compensation Current net profit plus potential effect of ordinary shares	Amount after tax $ 1,750,238 1,750,238 -	Fiscalyear 2023
		Weighted average number of outstanding shares(thousand shares) 1,089,348 1,089,348 609 1,089,957	Earnings per share(NT$) $ 1.61 $ 1.61
	$ 1,750,238

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Basic and diluted loss per share Net loss		Fiscal year 2022
	Amount after tax	Weighted average number of outstanding shares (thousand shares)	Loss per share (NT$)
	($ 1,077,677)	1,131,830	($ 0.95)

• ee. Additional information on cash flows

Investing activities with only partial cash payments:

• 1) Property, factories and equipment and prepayments for equipment (listed in other noncurrent assets)

current assets)
Prepayments for purchase of equipment Add: Payable, beginning of period Less: Payable, end of period Cash paid for current period Intangible assets: Acquisition of intangible assets Add: Payable, beginning of period Less: Payable, end of period Cash paid for current period	Fiscal year 2023 $ 84,071 34,313 ( 40,781) $ 77,603	Fiscal year 2022 $ 88,314 34,936 ( 34,313) $ 88,937
	Fiscal year 2023 $ 5,200 320 ( 668)	Fiscal year 2022 $ 3,646 662 ( 320)
	$ 4,852	$ 3,988

• 2) Intangible assets:

ff. Changes in liabilities from financing activities

January 1 Changes in cash flow from financing activities Other non-cash changes December 31	Short-term borrowings $ 550,000 ( 100,000) - $ 450,000				2023
		Short-term borrowings	Short-term Notes Payable $ 50,000 ( 50,000) - $-		Long-term borrowings (including due within one year or one operating cycle)	Lease liabilities $ 71,237 ( 10,409) 2,596 $ 63,424	Total liabilities from financing activities $ 4,581,237 ( 125,409) 2,596 $ 4,458,424
					$ 3,910,000 35,000 - $ 3,945,000

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January 1 Changes in cash flow from financing activities Other non-cash changes December 31	Short-term borrowings $ 336,958 213,042 -		2022
		To deal with Short-term notes $ 50,000 - -	Long-term borrowings (including due within one year or one operating cycle) $ 2,650,000 1,260,000 - $ 3,910,000	Lease liabilities $ 3,278 ( 10,365) 78,324 $ 71,237	Total liabilities from financing activities $ 3,040,236 1,462,677 78,324 $ 4,581,237
	$ 550,000	$ 50,000

1. Related-Party Transactions

2. a. Name and relationship of related parties

Relationship with the Names of related party Company Transtouch Technology Inc. (Transtouch) Subsidiaries Deltamac (Taiwan) Co., Ltd. (Deltamac (Taiwan)) 〃 Sun Well Solar Corporation (Sun Well Solar) (Note 1) 〃 CMC Movie Corporation (CMC Movie) (Note 2) 〃 CHC International Investment Corporation (CHC) 〃 CMC Entertainment Holding Corporation (CMC Entertainment) 〃 CMC Entertainment Hub Corporation (CMC Entertainment Hub) [〃] Fortune (Jiangsu) Multimedia Co., Ltd.. (Fortune (Jiangsu) Sub-subsidiary Multimedia) Com In Dim Corporation (Com In Dim) (Note 3) 〃 TAIWANET.COM Corporation (TAIWANET.COM ) 〃 Jet-Thai Hi-Tech Co. Ltd. （ Jet-Thai ） 〃 EMC Investment Holding Ltd. （ EMC H ） Subsidiaries Subsidiary of subVerbatim Americas LLC. （ VUS ） subsidiary Verbatim Australia Pty. Ltd. （ VAU ） Sub-subsidiary Verbatim GmbH （ VGmbH ） 〃 Verbatim (Hong Kong) Limited （ VHK ） 〃 Verbatim Japan (VJP) 〃 Super Net Holding Ltd.(Super Net) 〃 Vie Show Cinemas Co., Ltd. (Vie Show Cinemas) Associates

Notes 1: The liquidation was completed in December 2023.

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• Notes 2: Merged with CMC Entertainment in October 2023. Notes 3: Merged with CMC Entertainment Hub in September 2023.

b. Significant transactions with related parties

1) Operating revenue

Sale of goods: Subsidiary - VJP - VUS - VGmbH - Others	Fiscal year 2023 $ 767,529 482,053 297,031 212,300 $ 1,758,913	Fiscal year 2022 $ 697,635 323,427 401,959 310,298 $ 1,733,319

The company considers the transaction prices with related parties to be comparable to those with unrelated parties. The payment terms for foreign subsidiaries are 60 to 120 days after delivery. For general foreign customers, the payment terms are 30 to 120 days after delivery, while for general domestic customers, the terms are net O/A 90 to 120 days.

2) Purchases

urchases
Purchases of goods: Subsidiaries		Fiscal year 2023 $ 1,282	Fiscal year 2022
			$ 4,986

The goods are purchased from subsidiaries in accordance with general business terms and conditions.

3) Accounts receivable

onditions. ccounts receivable
Subsidiary - VJP - VUS - VGmbH - Fortune (Jiangsu) Multimedia - Others Loss allowance	December 31, 2023 $ 349,221 182,400 101,328 67,776 13,798 -	December 31, 2022 $ 315,387 170,123 143,143 147,887 8,933 ( 1,003) $ 784,470
	$ 714,523

The receivables from related parties mainly come from the sale of goods, and the payment terms are not significantly different from regular transactions, ranging from 60 to 120 days after delivery. These receivables are not secured or interest-bearing.

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4) Account payables

Subsidiaries	December 31,2023 $ 96	December 31,2022 $ 2,201

Account payable to related parties mainly come from purchase transactions and are due 90 days after the date of purchase.

5) Asset transactions:

5) Asset transactions:
Subsidiary - TAIWANET.COM - Others	Financial statement account	Fiscal year 2023 Acquisition price 293 - $ 293	Fiscal year 2022 Acquisition price 696 239 $ 935
	Other non-current assets 〃

6) Operating expenses

Subsidiaries Associates	Fiscal year 2023 $ 107,378 - $ 107,378	Fiscal year 2022 $ 65,610 36 $ 65,646

The main operating expense of the subsidiary is advertising expenses.

• 7) Other income a) Rental income

Subsidiary - Transtouch - Others	Fiscalyear 2023 $ 20,578 3,350 $ 23,928	Fiscalyear 2022 $ 20,694 3,383 $ 24,077

b) Other income

Subsidiaries	Fiscalyear 2023 $ 6,644	Fiscalyear 2022 $ 5,222

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- 8) Lending of funds related parties

• a) Loans to Related Parties

• i. The year-end balance (listed under other receivables - related parties)

Subsidiary - Sun Well Less: Allowance for loss	December 31, 2023 December 31, 2022 $ - $ 1,055,300 - ( 1,055,300) $- $-

• b) Borrowing from related parties

The year-end balance (listed under other payables - related parties)

Subsidiary - SuperNet - EMC H		Fiscal year 2023	Fiscal year 2022 $ 30,725 245,800 $ 276,525
		$ 27,635 300,909 $ 328,544

The loan from the subsidiary has not accrued interest.

9) Other receivables

Subsidiaries Less: Allowance for loss	December 31, 2023 $ 5,576 - $ 5,576	December 31, 2022 $ 52,073 ( 40,495) $ 11,578

For other receivables from subsidiaries, they are mainly for the income from receivables for outsourced processing services.

10) Other payable items

Subsidiary - VJP - Others	Fiscal year 2023 $ 13,507 8,379 $ 21,886	Fiscal year 2022 $ 20,378 2,632 $ 23,010

The other payables to the subsidiary mainly consist of advertising expenses and payable hardware parts.

c. Information on the remunerations of the key management:

Salaries and other short-term employee benefits Post-employment benefits	Fiscal year 2023 $ 15,627 350 $ 15,977	Fiscal year 2022
		$ 17,928 424 $ 18,352

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8. Pledged Assets

Details on the Company's assets pledged as collateral are as follows:

Details on the Company's assets pledged	as collateral are as follows:	as collateral are as follows:
Asset items	Carrying amount value December 31, 2023 December 31, 2022 $ 10,111 $ 2,400 2,386,710 1,974,795 2,527,620 2,550,848 2,202 2,421 $ 4,926,643 $ 4,530,464		Purpose of collateral
		December 31, 2022 $ 2,400 1,974,795 2,550,848 2,421 $ 4,530,464
Restricted demand and time deposit (listed in financial assets at amortized cost - current and non-current) Listed stocks (listed in financial assets at FVTPL- non-current) Property, factories and equipment Investment property			Bank borrowings 〃 〃 〃

9. Significant contingent liabilities and unrecognized contractual commitments

• a. Contingencies: N/A.

• b. Commitments:

• 1) Capital expenditure for contracts signed but not effective is as follows

Property, factories and equipment	December 31,2023 $ 16,065	December 31,2022
		$ 4,985

• 2) The company has signed a licensing agreement for optical disc products with HP Inc. and One-Blue LLC, and will pay royalties to the company based on the sales volume of the relevant products or in installments based on the total amount.

• 3) Amount of Letter of Credit Opened but Not Utilized

levant products or in installments mount of Letter of Credit Opened	based on the total amount. but Not Utilized
USD NTD	December 31,2023	Unit: NT$ thousands December 31,2022 $ 3,483 -
	$ 780 94,191

10. Major Disaster Loss

None.

11. Material Events After the Balance Sheet Date

Please refer to Note 6 (21)5 for the earnings distribution proposal for 2023 proposed by the Board of Directors on March 14, 2024.

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12. Others

a. Capital management

The Company's capital management objectives are to ensure that the Company can continue as a going concern, maintain the best capital structure to reduce capital cost, and provide dividends to shareholders.

b. Financial instruments

• 1) Type of financial instruments

Type of financial instruments
Financial assets Financial assets at fair value through profit or loss (FVTPL) Financial assets mandatorily at fair value through profit or loss Financial assets at FVTOCI Investment in designated equity instruments selected Financial assets measured at amortized cost/loans and receivables Cash and cash equivalents Financial assets at amortized cost - current and non- current Notes receivable Notes receivable and account receivable (including related parties) Finance lease receivables (listed in other current and non- current assets) Other receivables (including related parties) Refundable deposits (listed in other non-current assets)	December 31, 2023 $ 8,178,579 $ 217,430	December 31, 2022 $ 5,738,738 $ 53,243 $ 1,191,212 2,400 230 1,180,761 51,086 49,927 4,897 $ 2,480,513
	$ 1,168,756 10,111 136 917,041 45,380 44,509 3,397
	$ 2,189,330

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Financial liabilities Financial liabilities at fair value through profit or loss Financial liabilities held for trade Financial liabilities measured at amortized cost Short-term borrowings Short-term Notes Payable Notes payable Account payables (related parties) Other receivables (including related parties) Long-term borrowing (including due within one year or one operating cycle) Guarantee deposits received (listed in other current and non-current liabilities) Lease liabilities	December 31, 2023 $ 648 $ 450,000 - 28,982 300,769 690,276 3,945,000 6,522 $ 5,421,549 $ 63,424	December 31, 2022 $ 1,952 $ 550,000 50,000 45,974 288,152 465,530 3,910,000 6,285 $ 5,315,941 $ 71,237

• 2) Risk management policy

• a) Our company's daily operations are subject to various financial risks, including market risks (including exchange rate risks, interest rate risks, and price risks), credit risks, and liquidity risks. To mitigate the adverse impact of uncertainty on our financial performance, our company engages in forward foreign exchange contracts to hedge against exchange rate risks. The derivative instruments entered into by our company are for hedging purposes and not for trading or speculation.

• b) Risk management work is carried out by the Finance Department of our company in accordance with policies approved by the Board of Directors. The Finance Department closely collaborates with various operational units within the company to be responsible for identifying, assessing, and mitigating financial risks. 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, the use of derivative and non-derivative financial instruments, and the investment of surplus working capital.

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• 3) The nature and level of material financial risks

• a) Market risk

Exchange rate risk

• i. The company operates internationally, and therefore is exposed to exchange rate risks arising from transactions in currencies other than the functional currency of the company, primarily the US dollar, Japanese yen, euro, and Chinese yuan. These exchange rate risks are associated with future business transactions and recognized assets and liabilities.

• ii. The management of our company has established policies to manage the exchange rate risk relative to its functional currencies. The finance department hedges against the overall exchange rate risk. The measurement of exchange rate risk is done through expected transactions involving significant USD and RMB expenses, using forward foreign exchange contracts to reduce the impact of exchange rate fluctuations on expected inventory purchase costs.

• iii. The Company uses forward foreign exchange contracts to hedge against exchange rate risk while hedging accounting is not applied.

• iv. The Company's business involves a number of non-functional currencies (the functional currencies of the Company and some subsidiaries are NTD, while the functional currencies of other subsidiaries are USD and RMB). Therefore, it is affected by exchange rate fluctuations. Information on foreign currency assets and liabilities influenced by significant exchange rate fluctuations is as follows:

(Foreign currency: Functional currency) Financial assets Monetary items USD: NTD RMB: NTD Non-monetary items USD: NTD Financial liabilities Monetary items USD: NTD	December 31, 2023	December 31, 2023	December 31, 2023
	Foreign currencies (thousand)	Exchange rate	Carrying Amount (NTD)
	$ 36,582 21,724 $ 126,067 $ 14,979	30.705 4.328 30.705 30.705	$ 1,123,250 94,021 $ 3,870,887 $ 459,930

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(Foreign currency: Functional currency) Financial assets Monetary items USD: NTD EUR: NTD RMB: NTD Non-monetary items USD: NTD Financial liabilities Monetary items USD: NTD	December 31, 2022	December 31, 2022	December 31, 2022
	Foreign currencies (thousand)	Exchange rate	Carrying Amount (NTD)
	$ 37,368 535 50,431 $ 133,907 $ 16,485	30.725 32.76 4.411 30.725 30.725	$ 1,148,132 17,527 222,451 $ 4,114,293 $ 506,502

• v. The total exchange gains (realized and unrealized) of our company's monetary items, which are significantly affected by exchange rate fluctuations, amounted to NT$5,723 and NT$90,131 in the fiscal years 2023 and 2022, respectively.

• vi. The Company's foreign currency market risk analysis due to significant influence of exchange rate fluctuations is as follows:

(Foreign currency: Functional currency) Financial assets Monetary items USD: NTD RMB: NTD Non-monetary items USD: NTD Financial liabilities Monetary items USD: NTD		Fiscalyear 2023	Fiscalyear 2023
		Sensitivityanalysis
	Exchange rate band	Effect on profit and loss	Effect on other comprehensive income
	1% 1% 1% 1%	$ 11,233 940 $ 38,709 $ 4,599	$ - - $ - $ -

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(Foreign currency: Functional currency) Financial assets Monetary items USD: NTD EUR: NTD RMB: NTD Non-monetary items USD: NTD Financial liabilities Monetary items USD: NTD		Fiscalyear 2022	Fiscalyear 2022
		Sensitivityanalysis
	Exchange rate band	Effect on profit and loss	Effect on other comprehensive income
	1% 1% 1% 1% 1%	$ 11,481 175 2,225 $ 41,143 $ 5,065	$ - - - $ - $ -

Price risk

• i. The Company is exposed to price risk through equity instruments, which are recognized as financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income. To manage the price risk of equity instrument investments, the Company diversifies its investment portfolio in accordance with the limits set by the Company.

• ii. The Company primarily invests in equity instruments and open-ended funds issued by domestic companies. The prices of these equity instruments are affected by the uncertainty of the future value of the underlying investments. If the prices of these equity instruments increase or decrease by 1%, while all other factors remain unchanged, the tax-adjusted net (loss) income for the years 2023 and 2022 of the Republic of China will increase or decrease by $81,786 and $57,387, respectively, due to the gains or losses from equity instruments measured at fair value through profit or loss. The other comprehensive income will increase or decrease by $2,174 and $532, respectively, due to the gains or losses from equity investments classified as fair value through other comprehensive income.

Interest rate risk of cash flow and fair value

• i. The company's interest rate risk primarily arises from long-term borrowings issued at floating interest rates, exposing the Company to cash flow interest rate risk. In the fiscal years 2023 and 2022, the company's borrowings issued at floating interest rates were mainly denominated in NTD.

• ii. The Company's loans are measured at amortized cost and the annual interest rate will be repriced every year according to the contracts. Therefore, the Company is exposed to the risk of future market interest rate changes.

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• iii. When the NTD borrowing interest rate rose or fell by 0.25%, while all other factors remained unchanged, the net income (loss) after tax would have decreased or increased by NT$7,890 and NT$7,820 in 2023 and 2022, respectively, as the interest expenses would change with the floating interest rates for the borrowings.

• b)

Credit risk

• i. The credit risk of the Company is the risk of financial loss suffered by the Company arising from the failure of customers or counterparties of financial instruments to fulfill contractual obligations. It mainly comes from counterparties' inability to settle the contractual cash flow of account receivable in accordance with the payment terms.

• ii. The company establishes credit risk management from a corporate perspective. Only institutions with good credit ratings are accepted as trading partners for banks and financial institutions. According to the internal credit policy, each new customer must be managed and analyzed for credit risk before setting payment and delivery terms and conditions. Internal risk control is based on considering their financial condition, past experience, and other factors to evaluate the credit quality of customers. The individual risk limits are formulated by the Board of Directors based on internal or external ratings and the use of credit limits is regularly monitored.

• iii. In accordance with our credit risk management procedures, when contract payments exceed 360 days beyond the agreed payment terms, it is considered a default.

• iv. The Company adopts IFRS 9 to set the following assumptions as the basis for judging whether the credit risk of financial instruments has increased significantly since initial recognition:

When a contract payment is overdue for more than 30 days in accordance with the agreed payment terms, it is deemed that the credit risk of a financial asset has increased significantly since the initial recognition.

• v. The Company groups customers' account receivable according to the customers' characteristics, and adopts a simplified approach to estimate expected credit losses based on a provision matrix and the loss rate method.

• vi. After the company's recovery process, the amount of financial assets that cannot be reasonably expected to be recovered is written off. However, the company will continue to pursue legal proceedings to protect its rights to the debt. In both fiscal year 2023 and 2022, the company has outstanding debts that have not been written off and are still subject to recovery activities.

• vii. i) The Company adjusts the loss rate for accounts receivable and accounts payable (including related parties) of customers with general credit conditions based on historical and current information, taking into account the forward-looking considerations of global economic information. The reserve matrix as of December 31, 2023 and December 31, 2022 of the Republic of China is as follows:

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Expected loss rate December 31, 2023 Not past due 4.0% Overdue for 1–30 days 10.0% Overdue for 31–60 days 11.0% Overdue for 61–90 days 12.2% Overdue for 91–180 days 13.92~18.12% Overdue for more than 181 days 24.75~100% Total Expected loss rate December 31, 2022 Not past due 0.5% Overdue for 1–30 days 2.7% Overdue for 31–60 days 4.4% Overdue for 61–90 days 8.5% Overdue for 91–180 days 10.6%~22.4% Overdue for more than 181 days 26.7%~100% Total	Expected loss rate	Total carrying amount $ 20,599 7,303 13,013 4,032 7,767 45,590 $ 98,304 Total carrying amount $ 11,673 8,973 21,187 11,030 37,775 30,068 $ 120,706	Loss allowance ($ 830) ( 727) ( 1,430) ( 491) ( 1,246) ( 41,101) ($ 45,825) Loss allowance ($ 58) ( 242) ( 932) ( 938) ( 5,340) ( 13,976) ($ 21,486)	Total $ 19,769 6,576 11,583 3,541 6,521 4,489 $ 52,479 Total $ 11,615 8,731 20,255 10,092 32,435 16,092 $ 99,220

ii) For customers in the excellent credit group, this Company does not consider expected credit loss to be significant, and thus, calculates expected credit loss using the loss rate method. The expected loss rate is 0.2%. As of December 31, 2023 and 2022, the total value of accounts receivable is NT$865,001 and NT$1,083,372, respectively, with allowances for losses of NT$303 and NT$1,601 respectively.

• iii) The total book value of receivable financing lease payments as of December 31, 2023 and 2022 was NT$45,380 and NT$51,086, respectively. Due to good credit risk, it is expected that there will be no significant credit losses, so the provision for losses is NT$0.

viii. The table of the changes in the Company's simplified loss allowance for notes and account receivable (including related parties), other account receivable (including related parties), and overdue receivables is as follows:

2023

January 1 Impairment loss provision Reversal of impairment loss Write-off of unrecoverable accounts Sun Well Solar Liquidation Others December 31	Notes receivable andaccount receivable (including related parties) $ 23,087 23,041 - - - - $ 46,128		Other receivables (including related parties)	Overdue receivables $ 139,437 - ( 452) ( 30,785) - - $ 108,200	Total $ 1,266,739 23,041 ( 452) ( 30,785) ( 1,095,178) ( 617) $ 162,748

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2022

January 1 Impairment loss provision Reversal of impairment loss Write-off of unrecoverable accounts Reclassify as collections December 31	Notes receivable andaccount receivable (including related parties) $ 63,715 20,987 - ( 45) ( 61,570) $ 23,087		Other receivables (including related parties)	Overdue receivables $ 109,031 - ( 379) ( 30,785) 61,570 $ 139,437	Total $ 1,279,523 20,987 ( 421) ( 33,350) - $ 1,266,739

In the losses recognized in 2023 and 2022, the impairment (losses) gains arising from receivables from customer contracts were NT$22,589 and NT$20,608, respectively.

• c) Liquidity risk

• i. Cash flow forecasting is carried out by various operational units within the company and consolidated by the finance department. The finance department monitors the forecast of the company's working capital requirements to ensure that there is sufficient funding to support operational needs.

• ii. The following table shows the Company’s non-derivative financial liabilities and derivative financial liabilities that are settled on a net or total basis, grouped according to the relevant maturity dates. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contract maturity date. Derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the expected maturity date.

December 31, 2023 Non-derivative financial liabilities:	Within 1 year	1-2 years	2-5 years	Over 5 years
Short-term Loans (including Estimated Interest) Notes payable Account payables Other payables Lease liabilities Long-term borrowings (including due within one year or one operating cycle and estimated interest) Guarantee deposits received (listed in other current and non- current liabilities) Derivative financial liabilities Forward exchange agreements	$ 450,630 28,982 300,769 690,276 10,011 999,018 180 $ 648	$ - - - - 8,700 1,276,291 - $ -	$ - - - - 36,375 1,815,595 4,650 $ -	$ - - - - 11,400 - 1,692 $ -

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December 31, 2022 Non-derivative financial liabilities: Short-term Loans (including Estimated Interest) Short-term Notes Payable Notes payable Account payables Other payables Lease liabilities Long-term borrowings (including due within one year or one operating cycle and estimated interest) Guarantee deposits received (listed in other non-current liabilities) Derivative financial liabilities Forward exchange agreements	Within 1 year	1-2 years	2-5 years	Over 5 years
	$ 551,577 50,000 45,974 288,152 465,530 10,000 1,590,332 - $ 1,952	$ - - - - - 8,700 1,612,275 1,635 $ -	$ - - - - - 26,835 810,671 916 $ -	$ - - - - - 29,640 - 3,734 $ -

• iii. The details of the unused loan limits of this group are as follows:

Floating interest rate Expires within one year Expires after more than one year		December 31,2023		December 31,2022
		$ 1,779,935 1,970,000 $ 3,749,935		$ 1,475,075 135,000 $ 1,610,075

• c. Fair value information:

• 1) The fair value levels of the financial instruments and non-financial instruments measured using the valuation technique are defined as follows:

  • Level 1: Companies measure the unadjusted market quotations of identical assets or liabilities that can be obtained on a liquid market. A liquid market refers to a market where there is a sufficient frequency and volume of transactions for pricing information to be continuously available. The fair value of the company's investments in listed stocks and beneficial certificates, among others, falls under this category.

  • Level 2: Observable input values for assets or liabilities, directly or indirectly, excluding those included in Level 1 quotes. This applies to the fair value of most derivative instruments invested by the Company.

  • Level 3: Unobservable inputs for assets or liabilities. The equity instruments without active markets invested by the Company belong to this level.

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• 2) Financial instruments not measured at fair value

The carrying amounts of the Company's financial instruments not measured at fair value, including cash and cash equivalents, notes receivable, account receivable, other receivables, financial assets at amortized cost, refundable deposits (listed in other current and non-current assets), overdue receivables (listed in other non-current assets), short-term borrowings, notes payables, Account payables, other payables, lease liabilities, long-term borrowings (including due within one year or one operating cycle), guarantee deposits received (listed in other non-current liabilities), and long-term notes and account payable (listed in other non-current liabilities), are reasonable approximations of the fair values.

• 3) Financial and non-financial instruments measured at fair value are classified by the Company based on the nature, characteristics, risk, and the level of fair value of assets and liabilities. The relevant information is as follows:

• a) The Company's classification is based on the nature of assets and liabilities. The relevant information is as follows:

December 31, 2023 Assets Fair value on a recurring basis Financial assets at fair value through profit or loss (FVTPL) Equity securities Beneficiary certificates Derivative instruments Financial assets at FVTOCI Equity securities Total Liabilities Fair value on a recurring basis Financial liabilities at fair value through profit or loss Derivative instruments	Level 1 $ 8,072,656 $ 50,000 - -	Level 2 $ - $ - 4,923 - $ 4,923 $ 648		Level 3	Total $ 8,123,656 $ 50,000 4,923 217,430 $ 8,396,009 $ 648
				$ 51,000 $ - - 217,430 $ 268,430 $-
	$ 8,122,656
	$-

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December 31, 2022 Assets Fair value on a recurring basis Financial assets at fair value through profit or loss (FVTPL) Equity securities Financial assets at FVTOCI Equity securities Total Liabilities Fair value on a recurring basis Financial liabilities at fair value through profit or loss Derivative instruments	Level 1 $ 5,738,738 -	Level 2		Level 3	Total $ 5,738,738 53,243 $ 5,791,981 $ 1,952
		$ - - $- $ 1,952		$ - 53,243 $ 53,243 $-
	$ 5,738,738
	$-

• b) The methods and assumptions used by the Company to measure fair value are explained as follows:

• i. The market quoted prices adopted by the Company as fair value inputs (i.e. Level 1) are listed below by characteristics:

Listed Stocks Market quoted prices Closing price

• ii. Except for the above-mentioned financial instruments with active markets, the fair value of other financial instruments is obtained through valuation techniques or with reference to the quoted prices of counterparties.

• iii. When evaluating non-standardized and relatively low complexity financial instruments, the Company adopts widely used valuation techniques in the market. The parameters used in the valuation models for such financial instruments are typically based on market observable information.

• iv. The evaluation of derivative financial instruments is based on widely accepted valuation models in the market, such as discounted cash flow method and option pricing models. Forward foreign exchange contracts are typically evaluated based on the current forward exchange rate.

• v. The output of the valuation model is an estimated approximate value, and the valuation technique may not reflect all relevant factors related to the company's financial and non-financial instruments. Therefore, the estimated value of the valuation model will be adjusted appropriately based on additional parameters.

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• 4) There were no transfers between Level 1 and Level 2 fair value in 2023 and 2022.

• 5) The table below shows the changes in Level 3 fair value in 2023 and 2022:

January 1 Acquisition of equity instruments measured at fair value through profit or loss Proceeds from the disposal of equity instruments measured at fair value through other comprehensive income Listed in unrealized gain/loss on investments in equity instruments at FVTOCI December 31	2023 Equity instruments $ 53,243 51,000 - 164,187 $ 268,430	2022 Equity instruments $ 59,826 - ( 325) ( 6,258) $ 53,243	2022
			Equity instruments

• 6) There were no transfers into or out of Level 3 fair value in 2023 and 2022.

• 7) In the Company's valuation process for fair value classified as Level 3, the strategic investment department is responsible for independent fair value verification for financial instruments, uses data from independent sources to make the valuation results close to the market level, and confirms that the source of the data is independent, reliable, consistent with other resources, and representative of the executable price, while regularly calibrating the valuation model, updating the inputs and data required by the valuation model, and making any other necessary fair value adjustments to ensure that the valuation results are reasonable.

• 8) The quantitative information on the significant unobservable inputs of the valuation model used in the Level 3 fair value measurement and the sensitivity analysis of the significant unobservable input change are explained as follows:

Fair value on			Interval	Relationship
December 31,	Valuation	Significant unobservable	(weighted	between input and
2023	techniques	inputs	average)	fair value
Non-derivative equity instruments:
Unlisted stocks $ 268,430	Comparable	Price-to-earnings ratio,	N/A	The higher the
	public	price-to-book ratio,		multiple, the
	company	enterprise value-to-		higher the fair
	approach	operating income ratio,		value;
		enterprise value-to-
		earnings before interest,		The higher the
		taxes, depreciation, and		discount for
		amortization ratio, and		market liquidity,
		lack of market liquidity		the lower the fair
		discount		value.

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Fair value on December 31, 2022 Valuation techniques Significant unobservable inputs Interval (weighted average) Relationship between input and fair value Non-derivative equity instruments: Unlisted stocks $ 53,243 Comparable public company approach Price-to-earnings ratio, price-to-book ratio, enterprise value-to- operating income ratio, enterprise value-to- earnings before interest, taxes, depreciation, and amortization ratio, and lack of market liquidity discount N/A The higher the multiple, the higher the fair value; The higher the discount for market liquidity, the lower the fair value.	Fair value on December 31, 2022	Valuation techniques	Significant unobservable inputs	Interval (weighted average)	Relationship between input and fair value

• 9) The Company has selected valuation model and valuation parameters after careful evaluation, but different valuation results may occur due to the use of different valuation models or valuation parameters.

13. Supplementary Disclosures

• a. Information on significant transactions

• 1) Loans to others: Table 1.

• 2) Endorsements/Guarantees provided to others: Table 2.

• 3) Marketable securities held at the end of the period (disclosing those amounting to at least NT$100 million while excluding investment in subsidiaries, associates, and joint ventures): Table 3.

• 4) Marketable securities acquired or sold amounting to at least NT$300 million or 20% of the paid-in capital: Table 4.

• 5) Acquisition of real estate amounting to at least NT$300 million or 20% of the paid-in capital: N/A.

• 6) Disposal of real estate amounting to at least NT$300 million or 20% of the paid-in capital: N/A.

• 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5.

• 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paidin capital: Table 6.

• 9) Trading in derivative instruments: Notes 6(2) and 6(16).

• 10) Business relations and important transactions between parent company and subsidiaries and among subsidiaries and amounts: Table 7.

• b. Information on investees

Information on name and location of investees (disclosing those with original investment amounting to at least NT$200 million at the end of the period while excluding investees in mainland China): Table 8.

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c. Information on investments in mainland China

• 1) Basic information: Table 9.

• 2) Significant transactions with investees in mainland China, either directly or indirectly, through a business in a third region, the prices, payment terms, and unrealized gains or losses: Note 7: Related-party transactions and Note 13 (1)10.

• d. Information on Major Shareholders

Information on major shareholders: Table 10.

14. Segment Information

N/A.

~75~

Table 1

CMC Magnetics Corporation Loans to Others January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

No. (Note 1)	Lender	Borrower	General ledger account (Note)	Related party status	Highest amount of the period (Note 3)	Closing balance (Note11)	Actual amount drawn down	Interest rate range (%)	Nature of loan (Note 4)	Amount of transactions (Note 5)	Reason for Short-term Financing (Note 6)	Loss Allowance Provided	Collateral	Collateral	Limit for Individual Borrower	Total Limit	Remarks
													Name	Value
0 1 1 1 2 3	CMC EMC Investment Holding EMC Investment Holding EMC Investment Holding SuperNet Fortune Electronic			Y Y Y Y Y Y	$ 1,055,300 213,408 23,210 317,863 30,725 16,917	$ - 207,744 21,710 300,909 27,635 16,468	$ - 207,744 21,710 300,909 27,635 16,468	- - - - - 3.45~4.35	2 2 2 2 2 2	$ - - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital	$ - - - - - -	- - - - - -	$ - - - - - -	$ 2,771,986 507,038 507,038 1,690,126 206,355 45,509	$ 7,391,962 1,352,100 1,352,100 1,352,100 165,084 45,509	Note 7, Note 12, Note 13 Note 9, Note 11 Note 9, Note 11 Note 9, Note 11 Note 10, Note 11 Note 8, Note 11

Notes 1: The information on such transactions between the Company and its subsidiaries shall be indicated in the No. column as follows:

• (1) The Company is coded “0”.

• (2) The subsidiaries are coded sequentially beginning from “1” by each individual company.

• Notes 2: For any transaction recognized in amount receivable from associates, amount receivable from related parties, shareholders' transactions, advance payments, temporary debits, etc., in the case of a fund lent to others, this field shall be entered.

• Notes 3: The highest balance of funds loaned to others in the current year.

• Notes 4: The nature of lending of funds shall be listed as business transactions or necessary for short-term financing.

• (1) In the case of business transactions, please enter 1.

• (2) If there is a need for short-term financing, please enter 2.

• Notes 5: If the nature of lending of funds belongs to business transactions, the amount of business transactions shall be entered. The amount of business transactions refers to the amounts of business transactions between the lender and the borrower in the most recent year.

• Notes 8: The upper limit on the funds lent is 40% of the current net worth of the lender.

• The limit on the funds lent to each entity is 40% of the net worth of the lender.

The upper limit on the funds lent is 40% of the current net worth of the lender. The limit on the funds lent to each entity shall not exceed US$10,000,000. For subsidiaries in which the Company holds 50% of the shares directly and indirectly without business conducted between both parties, the limit on the funds lent to each of said subsidiaries is 15% of the Company's net worth. For foreign companies in which the parent company holds 100% of the shares directly and indirectly, the upper limit on the funds lent shall not exceed 50% of the Company’s current net worth.

Notes 9:

• Notes 10: The total limit for fund loans is capped at 40% of the current net worth of the lending company. For foreign companies that hold 100% of the voting shares, directly or indirectly, of the parent company and ultimate parent company of our company, the limit is set at no more than 50% of our company's net worth.

• Notes 11: The translation is based on the original currency multiplied by the exchange rate at the end of the period.

• Notes 12: Relevant processing procedures have been reported to the Board of Directors in accordance with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees.

• Notes 13: The company has been dissolved and liquidated as resolved by the shareholders' meeting in 2023.

• Notes 6: If the nature of lending of funds belongs to a need for short-term financing, the reasons for the necessity of the lending and the purpose of borrowing, such as repayment of loans, purchase of equipment, or working capital shall be specified.

• Notes 7: The total limit for fund loans is capped at 40% of the current net worth of the lending company. For subsidiaries that have business transactions with our company and are directly or indirectly held by our company with a 50% ownership, the individual loan amount is limited to 15% of our company's net worth or the higher of the two business transaction amounts between the two parties. For subsidiaries that have no business transactions with our company and are directly or indirectly held by our company with a 50% ownership, the individual loan amount is limited to 15% of our company's net worth.

Table 1 Page1

Table 2

CMC Magnetics Corporation Endorsements/Guarantees Provided to Others January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

No. (Note 1)	Company Name (Endorsement/ Guarantee Provider)	Party Endorsed/Guaranteed	Party Endorsed/Guaranteed	Limit of Endorsement/ Guarantee for a Single Entity	Maximum Balance of Endorsement/ Guarantee For the Current Period (Note 4)	Balance of Endorsement/ Guarantee, End of Period (Note 5)	Actual Amount Drawn Down (Note 6)	Endorsement /Guarantee Secured with Collateral $ -	Cumulative Endorsements/ Guarantees to the Net Equity in the Latest Financial Statements (%)	Upper Limit of Endorsements/ Guarantees	Parent to subsidiary (Note 7)	Subsidiary to parent (Note 7)	To Entity in Mainland China (Note 7)	Remarks
		Company Name	Relationship (Note 2)
1			4	$ 49,795	$ 1,632	$ 1,632	$ -		0.98	$ 49,795	N	N	N	Note 3

• Notes 1: The description of no. column is as follows:

• Notes 4: The maximum balance of endorsements/guarantees provided to others in the current year.

• (1) The issuer is coded “0”.

  • Notes 5: As of the balance sheet date, when the amount of an endorsement/guarantee contract or bill signed by the Company with a bank is approved, the Company shall assume the endorsement/ guarantee responsibility; other relevant endorsements/guarantees shall be included in the endorsement/guarantee balance.

• (2) The investees are coded sequentially beginning from “1” by each individual company.

• Notes 2: There are seven types of relationships between the endorsement/guarantee provider and the endorsed/guaranteed party. Just enter the code:

  • Notes 6: The actual amount drawn down by the endorsed/guaranteed company within the endorsement/guarantee balance shall be entered.

• (1) A company with which it conducts business.

• (2) A subsidiary in which the Company holds at least 50% of the voting shares directly and indirectly.

• Notes 7: "Y" shall be entered only for the endorsement/guarantee provided by the publicly listed parent company to subsidiary, by subsidiary to the publicly listed parent company, and to entities in mainland China.

• (3) A company that holds at least 50% of the Company's voting shares directly and indirectly.

  • Notes 8: The customs bureau of CMC Magnetics Corporation had a balance of $3,000 in deferred tax guarantees as of December 31, 2023. Transtouch had a balance of $1,806 in deferred tax guarantees as of December 31, 2023.

• (4) Between companies in which the Company holds at least 90% of the voting shares directly and indirectly.

• (5) Between companies in the same industry or joint applicants to undertake projects who are required to provide mutual endorsements/guarantees to the other company in accordance with the contractual terms.

• (6) Companies that are endorsed and guaranteed by all shareholders based on their shareholding ratios because of a joint investment relationship.

• (7) The joint guarantee for the performance of a pre-sale property sales contract between entities in the same industry in accordance with the Consumer Protection Act.

• Notes 3: The upper limit of CMC Entertainment endorsements/guarantees to external entities shall not exceed 30% of its net worth of the current period, and the limit of endorsement/guarantee to a single enterprise shall not exceed 30% of its net worth of the current period.

Table 2, Page 1

Table 3

CMC Magnetics Corporation Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures) January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Securities held by	Type and Name of Securities (Note 1)	Relationship with Securities Issuer	General Ledger Account		End of Period	End of Period		Remarks
				Number of Shares	Carrying Amount (Note 2) $ 1,635,942 1,314,030 826,644 782,171 492,161 345,384 115,135 188,265	Shareholding Percentage (%)	Fair Value $ 1,635,942 1,314,030 826,644 782,171 492,161 345,384 115,135 188,265
				53,288,000 9,157,000 13,121,326 15,247,000 10,793,000 11,808,000 3,299,000 63,700,000 3,800,000 5,000,000		0.95 0.43 11.10 0.44 1.44 8.08 3.14 1.13 3.21 4.76 11.14		Note 3 Note 3 Note 3 Note 3
					$ 5,699,732 1,955,590 239,400 174,500 104,434		$ 5,699,732
							1,955,590 239,400 174,500 104,434
					$ 2,473,924 $ 217,430		$ 2,473,924
							$ 217,430

Notes 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the item s above that fall within the scope of IFRS 9 "Financial Instruments". Notes 2: For those measured at fair value, please fill in the carrying amount after fair value valuation adjustment. Notes 3: As of December 31, 2023, our company has provided 72,620 thousand shares of marketable securities (with a book value of $2,38 6,710) as collateral for pledge.

Table 3 Page 1

Table 3

CMC Magnetics Corporation Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures) January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Securities held by	Type and Name of Securities (Note 1)	Relationship with Securities Issuer	General Ledger Account		End of Period	End of Period		Remarks
				Number of Shares	Carrying Amount (Note 2) $ 519,628 164,220 117,508 161,068	Shareholding Percentage (%)	Fair Value $ 519,628 164,220 117,508 161,068
				16,926,000 16,340,332 3,367,000 22,500,000 6,210,965 9,522,000 2,256,730 5,800,000		0.30 3.21 0.40 5.25 6.52 0.45 5.52		Note 3 Note 3 Note 3 Note 3 Note 3
					$ 962,424		$ 962,424
					$ 690,750 391,291 278,519 262,909 202,420 100,999		$ 690,750 391,291 278,519 262,909 202,420 100,999
					$ 1,926,888		$ 1,926,888
					$ 111,011		$ 111,011

Notes 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the item s above that fall within the scope of IFRS 9 "Financial Instruments". Notes 2: For those measured at fair value, please fill in the carrying amount after fair value valuation adjustment. Notes 3: As of December 31, 2023, CHC provided 36,600 shares of marketable securities (Carrying amount: NT$1,317,695) as pledge guaran tee.

Table 3 Page 2

Table 3

CMC Magnetics Corporation Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures) January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Securities held by	Type and Name of Securities (Note 1)	Relationship with Securities Issuer	General Ledger Account		End of Period	End of Period	End of Period			Remarks
				Number of Shares	Carrying Amount (Note 2)		Shareholding Percentage (%)	Fair Value $ 12,374 $ 69,043 788 56,149 $ 125,980 $ 35,345 $ 27,710 $ 2,178
						$ 12,374	3.36
						$ 69,043 788 56,149			$ 69,043 788 56,149
						$ 125,980			$ 125,980
						$ 35,345			$ 35,345
						$ 27,710			$ 27,710
						$ 2,178			$ 2,178

Notes 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the items above that fall within the scope of IFRS 9 "Financial Instruments". Notes 2: For those measured at fair value, please fill in the carrying amount after fair value valuation adjustment.

Table 3 Page 3

Table 3

CMC Magnetics Corporation Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures) January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Securities held by	Type and Name of Securities (Note 1)	Relationship with Securities Issuer	General Ledger Account		End of Period	End of Period			Remarks
				Number of Shares 500,000	Carrying Amount (Note 2)	Shareholding Percentage (%)		Fair Value
			Financial assets at FVTOCI - non-current Financial assets at FVTPL - current " Financial assets at FVTPL -non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current Financial assets at FVTOCI - non-current		$ 575	6.25		$ 575
					$ 38,453 19,320			$ 38,453 19,320
					$ 57,773			$ 57,773
					$ 9,693			$ 9,693
					$ 90,042			$ 90,042
					$ 36,321			$ 36,321
					$ 49,903			$ 49,903

Notes 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the item s above that fall within the scope of IFRS 9 "Financial Instruments". Notes 2: For those measured at fair value, please fill in the carrying amount after fair value valuation adjustment.

Table 3 Page 4

Table 4

CMC Magnetics Corporation Marketable Securities Acquired or Sold Amounting to at Least NT$300 Million or 20% of the Paid-in Capital January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Trading Company	Types of securities Name (Note 1)	General Ledger Account	Counterparty (Note 2)	Relationship (Note 2)	Beginning of the period (Note 3)	Beginning of the period (Note 3)	Acquired (Note 4)	Acquired (Note 4)		Sold	(Note 4)	Gains or Losses on Disposal	End of term (Note 6)	End of term (Note 6)	Remarks
					Number of Shares (Thousand Shares)	Amount	Number of Shares (Thousand Shares)	Amount	Number of Shares (Thousand Shares) 18,002 5,097 14,235 12,598 5,204 3,473 980 972 15,032 13,139 8,042 12,843	Selling Price	Book Cost		Number of Shares (Thousand Shares)	Amount
			- - - - - - - - - - - -	- - - - - - - - - - - -						$ 538,748 635,577 699,912 546,752 479,276 102,523 503,708 667,005 2,158,228 737,047 335,740 1,349,771			116,988 9,277 15,247 10,793 - 39,426 - - 427 - 1,090 768

Notes 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the item s above.

Notes 2: For securities recognized as investments accounted for using the equity method, these two columns must be entered, with the remaining column s left blank. Notes 3: The initial amount is the original investment cost.

Notes 4: Accumulated amounts of marketable securities acquired or disposed of shall be calculated separately based on market prices to determine whether they amount to $300 million or 20% of the paid-in capital.

Notes 5: If the issuer’s stock has no par value or the par value per share is not NT$10, the transaction amount of 20% of the paid-in capital shall be calculated based on the 10% of the equity attributable to owners of the parent company on the balance sheet.

Notes 6: The year-end amount includes unrealized gains or losses on valuation.

Notes 7: This is the exchange rate evaluation as of the end of December 31, 2023.

Table 4 Page 1

CMC Magnetics Corporation Total Purchases from or Sales to Related Parties Amounting to at least NT$100 Million or 20% of the Paid-in Capital January 1 to December 31, 2023

Table 5

Unit: NT$ thousands (Unless Specified Otherwise)

Companies engaged in the purchase (sale) of goods	Counterparty	Relationship			Transaction		Situation and Reason that Transaction Conditions are Different from General Ones (Note 1)	Situation and Reason that Transaction Conditions are Different from General Ones (Note 1)	Notes/Account Receivable (Payable) Balance Proportion to Total Notes/Account Receivable (Payable) $ 67,776 7% 349,221 38% 182,400 20% 101,328 11%	Notes/Account Receivable (Payable) Balance Proportion to Total Notes/Account Receivable (Payable) $ 67,776 7% 349,221 38% 182,400 20% 101,328 11%	Remarks (Note 2)
			Purchase (Sale)	Amount	Proportion to Total Purchases (Sales)	Credit Period	Unit Price	Credit Period	Balance
CMC 〞 〞 〞	Fortune (Jiangsu) Multimedia VJP VUS VGmbH	Subsidiary of sub- subsidiary Sub-subsidiary Subsidiary of sub- subsidiary Sub-subsidiary	Sale Sale Sale Sale	$ 169,337 767,529 482,053 297,031					$ 67,776 349,221 182,400 101,328	7% 38% 20% 11%

Notes 1: If related-party transaction terms are different from general transaction terms, situations and reasons for the differences shall be specified in the unit price and the credit period columns. Notes 2: In case of advance receipts (prepayments), reasons, the terms of the agreement, the amount and differences from the general transactions shall be specified in the Remarks column.

Table 5, Page 1

Table 6

CMC Magnetics Corporation Receivables from Related Parties Amounting to at Least NT$100 Million or 20% of the Paid-in Capital December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Company under Account Receivable	Counterparty	Relationship	Balance of Account Receivable from Related Parties (Note 1)	Turnover Rate (Times)	Overdue Receivables from Related Parties	Overdue Receivables from Related Parties	Recovered Amount from Related Party After Balance Sheet Date	Loss allowance provided
					Amount	Response Method
			$ 349,221 182,400 101,328 1,095,178 207,744 300,909	2.31 2.73 2.43 Note 2 Note 2 Note 2	$ 154,119 2,616 - - - -	Strengthening Collection Strengthening Collection - - - -	$ 106,577 59,775 29,954 - - -	$ - - - 1,095,178 - -

Notes 1: Please enter respectively according to account receivable from related parties, notes receivables, other receivables, etc. Notes 2: It is other receivables arising from funds lent, so it is not applicable. Notes 3: The company has been dissolved and liquidated as resolved by the shareholders' meeting in 2023.

Table 6, Page 1

CMC Magnetics Corporation

Business Relations and Important Transactions Between Parent Company and Subsidiaries and Among Subsidiaries and Amounts January 1 to December 31, 2023

Table 7

Unit: NT$ thousands (Unless Specified Otherwise)

No.(Note 1)	Company	Counterparty	Nature of Relationship (Note 2)		Transaction Details	Transaction Details
				General Ledger	Amount(Note 6) $ 169,337 67,776 767,529 349,221 482,053 182,400 297,031 101,328 207,744 300,909	Transaction Conditions	Account for total revenue or total assets Ratio(Note 3)
0 〞 〞 〞 〞 〞 〞 〞 1 〞	CMC 〞 〞 〞 〞 〞 〞 〞 EMC H 〞	Fortune (Jiangsu) Multimedia 〞 VJP 〞 VUS 〞 VGmbH 〞 Fortune (Jiangsu) Multimedia CMC				Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 4 Note 5 Note 5	2.29% 0.27% 10.39% 1.37% 6.53% 0.72% 4.02% 0.40% 0.81% 1.18%

• Notes 1: The information on transactions between the parent company and its subsidiaries shall be indicated in the no. column as follows: (1) The parent company is coded “0”

• (2) The subsidiaries are coded sequentially beginning from “1” by each individual company.

• Notes 2: There are three types of relationships with the company. Just enter the code:

• (1) Parent to subsidiary

• (2) Subsidiary to parent

• (3) Between subsidiaries

• Notes 3: Regarding the proportion of transaction amount to the total consolidated revenue or assets, if it is recognized in the balanc e sheet account, it is shown with the ending balance as a percentage of the total consolidated assets; if it is in the profit or loss account, it is shown with the cumulative amount throughout the period as a percentage of the total consolidated revenue.

• Notes 4: The Company's transaction price for related parties is equivalent to that for non-related parties; the payment term for overseas subsidiaries and sub-subsidiaries is 60 to 120 days after the arrival of goods. The payment term for general overseas customers is 30 to 120 days after the arrival of goods, and for general domestic customers, it is open account (O/A) with net 90 to 120 days.

• Notes 5: Accounts receivable loans and payments.

• Notes 6: Individual amounts less than NT$50,000 will not be disclosed, and the transactions between both parties will no longer be disclosed.

Table 7, Page 1

Table 8

CMC Magnetics Corporation Information on Name and Location of Investees (Excluding Investees in Mainland China) January 1 to December 31, 2023

Unit: NT$ thousands (Unless Specified Otherwise)

Investor	Name of Investee (Notes 1 and 2)	Location	Principal Business	Original Investment Cost	Original Investment Cost	Shares Held at the End of Period	Shares Held at the End of Period	Shares Held at the End of Period	Profit or Loss on Investee (Note 2 (2))	Investment Gains or Losses Recognized for Current Period (Note 2 (3))
				End of Current Period	End of Last Year	Number of Shares	Percentag e (%)	Carrying amount
				$ 10,453,855 872,018 180,421 714,888 509,721 377,635 260,000 3,591,096 1,283,980 3,695,664 16,368 411,105 731,912 154,050 -	$ 10,453,855 872,018 180,421 714,888 515,768 377,635 260,000 3,591,096 1,283,980 3,695,664 16,368 411,105 731,912 144,364 -	61,527 29,688,245 261,595,273 18,956,000 15,173,223 14,892,015 13,300,000 23,064 - 43,500,400 5,900 100,000 - 4,045,500 -	100.00 86.35 100.00 100.00 51.99 38.91 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 -

Table 8, Page 1

CMC Magnetics Corporation Information on Name and Location of Investees (Excluding Investees in Mainland China) January 1 to December 31, 2023

Table 8

Unit: NT$ thousands (Unless Specified Otherwise)

Investor	Name of Investee (Notes 1, 2)	Location	Principal Business	Original Investment Cost	Original Investment Cost	Shares Held	at the End of Period	at the End of Period	Profit or Loss on Investee (Note 2 (2))	Investment Gains or Losses Recognized for Current Period (Note 2 (3))	Remarks
				End of Current Period	End of Last Year	Number of Shares	Percentage (%)	Carrying amount
				$ 1,418,407 3 577,337 - 111,185 74,015 -	$ 1,418,407 3 577,337 - 111,185 74,015 -	- - 5,720,085 - 4,692,049 29,962,500 -

• Notes 1: If a public company has a foreign holding company and the consolidated financial report is the main financial report according to local laws and regulations, the disclosure of information about the foreign investee may only include the relevant information of the holding company.

Notes 2: In cases other than those described in Note 1, the following information shall be provided:

• (1) "Name of Investee", "Location", "Principal Business", "Original Investment Cost", and "Holdings, End of Period" shall be entered in order according to the investment situation of the (public) Company and the status of investment by each investee directly or indirectly controlled, and the relationship between each investee and the (public) Company shall be indicated in the Remarks column (e.g., a subsidiary or a sub-subsidiary).

• (2) In the column "Profit or Loss on Investee", the current profit and loss on each investee shall be entered.

• (3) In the column "Investment Gains or Losses Recognized for Current Period", only the profit and loss on each investee directly invested by the (public) Company and each investee measured under the equity method recognized by the Company shall be entered, and the rest of the investees are exempted from disclosed in this regard. Where the "gains and losses on subsidiaries that are invested directly are recognized for the current period," it shall be confirmed that the gains and losses on the subsidiaries have included their investment gains and losses that shall be recognized in accordance with the regulations.

• Notes 3: The Company did not directly recognize investment gains and losses.

Table 8, Page 2

CMC Magnetics Corporation Information on Investments in Mainland China - Basic Information January 1 to December 31, 2023

Table 9

Unit: NT$ thousands (Unless Specified Otherwise)

							Accumulated Amount of Investment	Accumulated Amount of Investment			The
							Investment Remitted or Recovered		Accumulated		Company's	Investment Gains	Carrying	Accumulated
							Remitted from	in Current Period	Investment	Current	Direct or	(Losses)	Amount of	Repatriation of
						Investment	Taiwan, Remitted to Remitted		Remitted from	Profit or	Indirect	Recognized for	Investment,	Investment
Name of Investee in	China (Note					Method	Beginning of	Mainland back to	Taiwan, End	Loss on	Ownership	Current Period	End of	Income as of
4)			Principal Business	Paid-in Capital		(Note 1)	Period	China Taiwan	of Period	Investee	(%)	(Note 2)	Period	End of Period	Remarks
Fortune (Jiangsu) Multimedia		Co.,	Production and sales of	$ 1,345,476		2	$ 1,345,476 $ - $ -		$1,345,476 $ 7,799		97.00	$ 7,565	$ 295,909	$ -	Note 2 (2)B
Ltd.			optical discs
Fortune (Jiangsu) Electronic			Production and sales of	531,053		2	531,053	- -	531,053	1,254	100.00	1,254	113,776	-	〞
Materials Co., Ltd.			plastic boxes, boxes,
			baskets, and similar
			products
Nantong Zhongxing	Multimedia		Production and sales of	35,678		2	35,678	- -	35,678 (	51)	49.00 ( 25)		7,858	-	〞
Co., Ltd.			optical discs
Sun Biotech Limited	(Nantong)		R&D and wholesale of	14,786		2	14,786	- -	14,786 (	2,017)	50.00 ( 1,009)		-	-	〞
			biological probiotics
	Accumulated Outward Remittance for Investment				Investment Amount Authorized by			Limit on Investment Amount Stipulated		by
Company Name		in	Mainland China, End of	Period	Investment Commission, MOEA			Investment Commission, MOEA
CMC Magnetics Corporation	$			2,722,590	$		4,052,335 $		11,291,708

Notes 1: There are three types of methods for investment in mainland China. Just enter the code:

• (1) Direct investment in mainland China

• (2) Indirect investment in mainland China through third-region companies: Investment in companies in mainland China through EMC H.

• (3) Other methods

Notes 2: Investment gains (losses) recognized for the current period:

(1) If there is no investment gains (losses) recognized due to the investment still being in the development stage, it shall be indicated.

• (2) The investment gains (losses) are recognized based on the three following methods, which shall be indicated:

A. The financial statements certified by international accounting firms that has partnership with CPAs of Republic of Chin

• B. The financial statements that have been audited by the parent company's CPAs in Taiwan.

• C. Others.

Notes 3: The numbers related to this table shall be presented in NTD.

Notes 4: Individual companies that have been liquidated will not be disclosed.

Table 9, Page 1

CMC Magnetics Corporation Information on Major Shareholders December 31, 2023

Table 10

Name of Major Shareholder		Shares
	Number of Shares Held	Shareholding Percentage (%)
Wong Ming-Sen	86,459,355	7.93

• Notes 1: The information on major shareholders in this table is calculated by the Taiwan Depository & Clearing Corporation based on the last business day of each quarter, and includes the total number of common shares and preferred shares held by shareholders that have completed non-physical registration and delivery (including treasury shares), which accounts for more than 5% of the total shares. However, there may be differences between the recorded share capital in the company's financial reports and the actual number of shares that have completed non-physical registration and delivery, due to different calculation bases or other factors.

• Notes 2: The above information, if it belongs to a shareholder, will be delivered to the trust through the transfer of shares. The details of the trust accounts opened by the trustee for the individual shareholders are disclosed. As for shareholders who declare their shareholding rights as insiders exceeding 10% in accordance with securities trading regulations, their shareholding includes their own shares as well as the shares held in trust and the voting rights over the trust assets. For information on the declaration of insider shareholding rights, please refer to the Public Information Observation Station.

Table 10, Page 1

CMC Magnetics Corporation Cash and cash equivalents December 31, 2023

Unit: NT$ thousands

Statement 1 Items	Unit Summary	: NT$ thousands Amount $ 66 120 448 826,754 233,853 11,076 7,134 23,690 4,558 15,043 46,014 $ 1,168,756

The above fixed-term deposits will all mature within three months. The interest rate for TWD fixed deposits is 1.13%, and the interest rate for RMB fixed deposits is 2.25%.

Statement 1 Page 11

CMC Magnetics Corporation

Financial assets at FVTPL - current and non-current December 31, 2023

Statement 2 Name of Securities Summary Listed and OTC company stocks - current – Taiwan High Speed Rail Listed stocks (Taiwan Stock Exchange) – Yang Ming Marine Transport Corp. 〞 – Chateau International Development Co., Ltd. 〞 – Tainan Enterprises Co., Ltd. 〞 – Silicon System 〞 – Evergreen Marine 〞 – Farglory Hotel Co., Ltd. 〞 – Others Beneficiary certificates – UniTaiwan High-Yield Select Fund Fund Derivative financial products – Forward exchange agreements Adjustment to valuation Listed and OTC company stocks - non-current – Taiwan High Speed Rail Listed stocks (Taiwan Stock Exchange) – Farglory Hotel Co., Ltd. 〞 – Chateau International Development Co., Ltd. 〞 – Evergreen Marine 〞 – Others Non-listed and OTC company stocks - non- current – Pai Er Life Sciences Adjustment to valuation	Number of Shares/Units 53,288,000 15,247,000 13,121,326 11,808,000 10,793,000 9,157,000 3,299,000 - 5,000,000 63,700,000 5,000,000 3,800,000 120,000 - 600,000	Face value (NT$) $ 10 10 10 10 10 10 10 - 10 $ 10 10 10 10 - 85	Total Amount $ 532,880 152,470 131,213 118,080 107,930 91,570 32,990 - 50,000 $ 637,000 50,000 38,000 1,200 - 51,000	Interest Rate - - - - - - - - - - - - - -	Cost of Acquisition $ 1,640,125 866,097 386,251 300,779 514,950 1,428,544 101,777 126,193 5,364,716 50,000 4,923 5,419,639 285,016 $ 5,704,655 $ 1,960,591 154,254 111,860 18,721 6,604 2,252,030 51,000 2,303,030 170,894 $ 2,473,924	Unit: NT$ thousands Market price Guarantee or Pledge Unit Price (NT$) Total Amount $ 30.70 $ 1,635,942 N/A 51.30 782,171 〞 63.00 826,644 〞 29.25 345,384 〞 45.60 492,161 〞 143.50 1,314,030 〞 34.90 115,135 〞 - 133,365 〞 5,644,832 10.98 54,900 〞 4,923 〞 $ 5,704,655 $ 30.70 $ 1,955,590 Note 34.90 174,500 〞 63.00 239,400 〞 143.50 17,220 〞 - 36,214 N/A 2,422,924 51,000 〞 $ 2,473,924
						Unit Price (NT$)
						$ 30.70 51.30 63.00 29.25 45.60 143.50 34.90 - 10.98 $ 30.70 34.90 63.00 143.50 -

Note: As of December 31, 2023, our company has provided 72,620 thousand shares of marketable securities (with a book value of $2,386,710) as collateral for pledge.

Statement 2 Page 1

CMC Magnetics Corporation Accounts receivable December 31, 2023 Statement 3 Unit: NT$ thousands

Customer Name Non-related Parties Customer A Customer B Customer C Customer D Customer E Customer F Others Related Parties Customer G Customer H Customer I Customer J Others Subtotal Less: Allowance for loss	Summary	Amount Remarks $ 28,681 26,659 19,711 18,908 17,951 16,313 120,421 The balance of each customer in this category did not exceed 5% of the balance of this account 248,644 349,221 182,400 101,328 67,776 13,798 The balance of each customer in this category did not exceed 5% of the balance of this account 714,523 963,167 ( 46,126) $ 917,041	Remarks

Statement 3 Page 1

CMC Magnetics Corporation Inventories

December 31, 2023

Statement 4 Unit: NT$ thousands

Items Raw materials Work-in-progress Finished goods Merchandise inventory Less: Allowance for inventory valuation losses	Summary	Amount Cost Net realizable value Remarks $ 402,715 $ 395,242The allowance for inventory valuation losses is based on cost or net realizable value, whichever is lower. 144 144 346,928 304,176 438,487 595,383 $ 1,188,274 $ 1,294,945 ( 158,278) $ 1,029,996	Remarks

Statement 4 Page 1

CMC Magnetics Corporation

Changes in investments accounted for using the equity method

January 1 to December 31, 2023

Statement 5

Unit: NT$ thousands

Name of Investee	Opening Balance	Opening Balance	Opening Balance	Increase in the current period (Note 1)	Increase in the current period (Note 1)	Decrease in the current period (Note 2)	Decrease in the current period (Note 2)	Closing Balance	Closing Balance		Market Value or Net Equity	Market Value or Net Equity	Security or Pledge	Remarks
	Number of Shares	Shareholding Percentage (%)	Amount	Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Shareholding Percentage (%)	Amount $3,662,453 - 165,986 - 335,612 36,891 3,239,402 433,227 157,811 $8,031,382	Unit Price (NT$)	Total Price
				- - 13,056,000 - - - - - -			($95,152) (124,082) (10,493) (21,701) (7,790) (17,479) (272,141) (76,904) (6,266) ($632,008)	261,595,273 - 18,956,000 - 15,173,223 13,300,000 61,527 29,688,245 14,892,015	100.00 100.00 100.00 98.82 51.99 100.00 100.00 86.35 38.91		$15.01 - 8.70 - 32.20 2.77 54,939.31 16.53 13.55	$3,923,135 - 165,985 - 233,668 36,891 3,380,251 490,649 225,614	N/A 〞 〞 〞 〞 〞 〞 〞 〞

Notes 1: The increase for the period includes the share of profits or losses from subsidiaries, associates, and joint ventures recognized using the equity method, the other comprehensive income share from subsidiaries, associates, and joint ventures recognized using the equity method, exchange differences from the translation of financial statements of foreign operations, and the increase from newly capitalized sub sidiaries for the period. Notes 2: The decrease for the period includes the share of profits or losses from subsidiaries, associates, and joint ventures recognized using the equity method, the other comprehensive income share from subsidiaries, associates, and joint ventures recognized using the equity method, exchange differences from the translation of financial statements of foreign operations, and the decrease from disposed subsidiaries for the period.

Statement 5 Page 1

CMC Magnetics Corporation

• Long term borrowings

December 31, 2023

Statement 6

Unit: NT$ thousands

Lender Summary Entie Commercial Bank, Ltd. Mid-term loan Entie Commercial Bank, Ltd. Mid-term loan (secured) Taipei Fubon Bank Mid-term loan (secured) Bank of Taiwan Mid-term loan (secured) Shanghai Commercial & Savings Bank, Ltd. Mid-term loan (secured) KGI Commercial Bank Co., Ltd. Mid-term loan (secured) Yangxin Bank Mid-term loan (secured) Taishin International Bank Mid-term loan (secured) Bank SinoPac. Mid-term loan (secured) Bank SinoPac. Securities Mid-term loan (secured) Hua Nan Bank Mid-term loan (secured) O-Bank Co., Ltd. Mid-term loan O-Bank Co., Ltd. Commercial Draft	Due Within One Year $ - - - - - - - 150,000 195,000 300,000 280,000 $ 925,000	Due Beyond One Year $ 850,000 50,000 800,000 150,000 400,000 300,000 170,000 - 200,000 100,000 - - - $ 3,020,000		Total Loan Period Interest Rate Security or Collateral 850,000 Oct. 2023～Oct. 2025 Note 1 Credit 50,000 June 2023～June 2026 〞 Property, factories and equipment 800,000 Apr. 2023～Apr. 2026 〞 〞 150,000 Nov. 2023～Nov. 2025 〞 〞 400,000 Nov. 2023～Nov. 2026 〞 〞 300,000 Oct. 2023～Oct. 2025〞 〞 170,000 Feb. 2023～Feb. 2025 〞 Securities 150,000 Apr. 2022～Apr. 2024 〞 〞 200,000 July 2023～July 2025〞 〞 100,000 Nov. 2023～Nov. 2026 〞 〞 195,000 Mar. 2021～Mar. 2024 〞 〞 300,000 June 2022～June 2024 〞 Credit 280,000 June 2022～June 2024 〞 Securities $ 3,945,000	Remark s

Note: The interest rate range is 1.995% to 2.27%.

Statement 6 Page 1

CMC Magnetics Corporation

Operating revenue

January 1 to December 31, 2023

Statement 7 Items Summary Sales revenue Storage media products Less: Sales return and discount	Summary

Statement 7 Page 1

CMC Magnetics Corporation Operating costs

January 1 to December 31, 2023

Statement 8

Unit: NT$ thousands

Items	Summary	Amount $ 403,487 1,035,467 ( 19,069) ( 402,715) ( 628) 1,016,542 226,092 671,129 ( 36,414) 1,877,349 489 ( 144) ( 365) 1,877,329 612,249 ( 346,928) ( 7,996) 2,134,654 456,105 284,448 ( 438,487) 302,066 19,069 2,455,789 4,986 26,637 ( 302) 36,414 $ 2,523,524	Remarks
Raw materials, end of period (inventory in transit) Add: Purchase of raw materials Less: Sale of raw materials End-of-period raw materials Others Direct raw materials consumed Direct labor Production overheads Less: Unamortized fixed production overheads Production overheads in current period Beginning-of-period work in progress Less: Work-in-process, end of period Less: Others Cost of finished goods Finished goods, beginning of period Less: Finished products, end of period Others Cost of self-made products sold Merchandise inventory, beginning of period Add: Purchases in current period Less: Merchandise inventory, end of period Cost of merchandise inventory and goods sold Cost of raw materials sold Cost of inventories sold Other operating costs Inventory impairment loss Revenue from sale of tailings and scraps Unamortized fixed production overheads Cost of goods sold

Statement 8 Page 1

CMC Magnetics Corporation Production overheads

		CMC Magnetics Corporation Production overheads
Statement 9 Items Depreciation Water, electricity, and gas fee Indirect labor Insurance premium Other production overheads		January 1 to December 31, 2023 Unit: NT$ thousands Summary Amount Remarks $ 231,379 233,508 80,133 35,296 90,813 The balance of each item did not exceed 5% of the amount of this account $ 671,129
		Summary

Statement 9 Page 1

CMC Magnetics Corporation Selling and marketing expenses January 1 to December 31, 2023

Statement 10

Unit: NT$ thousands

Items	Summary		Amount	Remarks
Advertising expenses Royalties and export fees Freight charge Amortization expenses Salaries and wages Other expenses

Statement 10 Page 1

CMC Magnetics Corporation Administrative expenses

January 1 to December 31, 2023

Statement 11 Items Salaries and wages Entertainment fee Tax expense Service fees Utility fees Other expenses	Summary	Unit: NT$ thousands Amount Remarks $ 51,413 26,559 15,419 14,754 9,041 27,102 The balance of each item did not exceed 5% of the amount of this account $ 144,288	Unit: NT$ thousands Remarks

Statement 11 Page 1

CMC Magnetics Corporation Research and development expenses January 1 to December 31, 2023

Statement 12 Items Depreciation Testing expense Salaries and wages Utility fees R&D material expense Other expenses	Summary	Unit: NT$ thousands Amount Remarks $ 79,123 51,527 41,707 20,267 14,483 51,141 The balance of each item did not exceed 5% of the amount of this account $ 258,248	Unit: NT$ thousands Remarks

Statement 12 Page 1