ENNOSTAR — Annual Report 2023

Jun 12, 2024

【 Translation 】

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TWSE: 3714

Ennostar Inc.

2023 Annual Report

Printed on March 15, 2024

Website to inquire annual reports

• MOPS website: https://mops.twse.com.tw

• Ennostar Inc. website: https://www.ennostar.com

Notice to readers

This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

1. Spokesperson & Deputy Spokesperson

Spokesperson : Po-Yi Chang, Vice President, Finance Center Deputy Spokesperson : Jia-Wei Tzeng, Senior Manger, Finance Management & Investor Service Div. Tel : +886 3 567-9000 Email : ir@Ennostar.com

2. Headquarters, Branches, and Plant

Ennostar Inc. Address : 9F. -1, No. 67, Ziyou Rd., East Dist., Hsinchu City, Taiwan (R.O.C.) TEL : +886 3 567-9000 Epistar Corporation Address : No. 21, Li-hsin Rd., Hsinchu Science Park TEL : +886 3 567-8000 Lextar Electronics Corporation. Address 6F. No. 21, Li-hsin Rd., Hsinchu Science Park TEL +886 3 565-8800 Unikorn Semiconductor Corporation Address 1F, No. 5, Li-hsin 5th Rd., Hsinchu Science Park TEL +886 3 563-5666

3. Common Share Transfer Agent and Registrar

Name : Shareholders Service Department, Horizon Securities Address : 3F., No.236, Sec. 4, Xinyi Rd., Xinyi Dist., Taipei City Website : http://srd.honsec.com.tw TEL : +886 2 2326-8818

4. Auditors

Name of auditors : Tien-Yi Li , Chien-Hung Chou Name of Accouting Firm : Pricewaterhouse Coopers, Taiwan Address : 27F., No.333, Sec. 1, Keelung Rd., SongshanDist., Taipei City Website : http://www.pwc.tw/ TEL : +886 2 2729-6666

5. Name of any exchanges where the company's securities are traded offshore, and the method by which to access information on said offshore securities: Not applicable.

6. Corporate Website: http://www.ennostar.com

Table of Contents

	Table of Contents	Table of Contents
	Page No.
1.	Letter to Shareholders………………………………………………………………………………………………………….	1
2.	Company Introduction………………………………………………………………………………………………………….	5
	2.1 Date of Incorporation……………………………………………………………………………………………………..	5
	2.2 Company History.……………………………………………………………………………………………………………	5
3.	Corporate Governance Report………………………………………………………………………………………………	6
	3.1 Organization.………………………………………………………………………………………………………………….	6
	3.2 Information about directors, president, vice presidents, assistant vice presidents, and
	department and branch managers...........................................................	9
	3.3 Implementation of Corporate Governance.........................................................................	29
	3.4 Information of CPA audit fee...............................................................................................	88
	3.5 Replacement of CPAs...........................................................................................................	88
	3.6 Information on the company’s chairman, president, or any managerial officer in charge
	of finance or accounting matters has in the most recent year held a position at the
	accounting firm of its certified public accountant or at an affiliated enterprise of such
	accounting firm..................................................................................................................	88
	3.7 Changes in the transfer or pledge of shares by directors, managers, and shareholders
	holding over 10% of the shares…......................................................................................	89
	3.8 Information on the relationship among the top 10 shareholders.......................................	91
	3.9 The total number of shares and total equity stake held in any single enterprise by the
	Company, its directors and supervisors, managerial officers, and any companies
	controlled either directly or indirectly by the Company.....................................................	93
4.	Capital Overview………………………………………………………………………………………………………………….	94
	4.1 Capital and Shares...............................................................................................................	94
	4.2 Issuance of Corporate Bonds...............................................................................................	98
	4.3 Preferred Shares..................................................................................................................	98
	4.4 Issuance of Overseas Depositary Shares.............................................................................	98
	4.5 Status of Employee Stock Option Plan................................................................................	98
	4.6 Status of New Restricted Employee Shares.........................................................................	98
	4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions...................	98
	4.8 Financing Plans and Implementation..................................................................................	99
5.	Operation Overview……………………………………………………………………………………………………………..	101
	5.1 Business Contents...............................................................................................................	101
	5.2 Market and Production and Sales Overview.......................................................................	125
	5.3 Human Resources...............................................................................................................	136
	5.4 Environmental Protection Expenditure...............................................................................	136
	5.5 Labor Relations....................................................................................................................	137
	5.6 Cyber Security Management………………………………………………………………………………………….	143
	5.7 Material Contract................................................................................................................	145

Table of Contents

	Table of Contents
	Page	No.
6.	Financial Information……………………………………………………………………………………………………………	146
	6.1 Five-Year Financial Summary................................................................................................	146
	6.2 Five-Year Financial Analysis……………………………………………………………………………………………..	150
	6.3 Audit Committee’s Review Report for the Most Recent Year……………………………………………	153
	6.4Financial Statements for the Most Recent Year (including the consolidated financial
	statements of the parent and subsidiaries)……………………………………………………………………..	153
	6.5 The Latest Individual Financial Statements Audited and Certified by CPA……………………….	153
	6.6 The company or its affiliates have experienced financial difficulties in the most recent
	fiscal year or during the current fiscal year up to the date of printing of the annual
	report.……………………………………………………………………………………………………………………………	153
7.	Review, analysis and risk issues regarding financial standing and financial performance………..	154
	7.1 Financial conditions…………………………………………………………………………………………………………	154
	7.2 Financial Performance…………………………………………………………………………………………………….	155
	7.3 Cash Flow………………………………………………………………………………………………………………………..	156
	7.4 The impact of significant capital expenditures on the treasury related business in the
	most recent year…………………………………………………………………………………………………………….	157
	7.5 The outward investment policy, the key causes behind profit or loss in the most recent
	year, the plans for countermeasures and investment plans in the upcoming year…………..	158
	7.6 Risks-related issues………………………………………………………………………………………………………….	158
	7.7 Other important notes…….………………………………………………………………………………………………	167
8.	Special Disclosure…………………………………………………………………………………………………………………	168
	8.1 Summary of Affiliated Companies……………………………………………………………………………………	168
	8.2 Private Placement Securities in the Most Recent Years and up to the date of publication
	of the annual report……………………………………………………………………………………………………….	185
	8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years
	and up to the date of publication of the annual report……………..……………………………………	188
	8.4 Other supplementary explanation as necessary.………………………………………………………………	189
	8.5 Any Events in 2023 the most recent year and up to the Date of publication of thise Annual
	Report that Had Significant Impacts on Shareholders’ Right or Security Prices as Stated
	in Item 3, Paragraph 2 of Article 36 of Securities and Exchange Act of Taiwan…………………	189
Appendix:
	1. Statement of Declaration on Internal Control System............................................................	190
	2. Audit Committee’s Review Report for the Most Recent Year….………………………………………….	191
	3. Affiliates’ Consolidated Financial Statements.......................................................................	192
	4. Financial Statements for the Most Recent Year (including the consolidated financial
	statements of the parent and subsidiaries)...........................................................................	193
	5. The Latest Individual Financial Statements Audited and Certified by CPA..............................	318

1. Letter to Shareholders

In 2023, ENNOSTAR’s operations faced severe challenges due to a variety of factors. The global consumer market demand was affected by inflation, rising interest rates, industrial inventory adjustments, and plummeting customer demand. Additionally, war, geopolitics, and extreme climates also played a role. As a result, the Group’s consolidated revenue in 2023 was about NTD 22.31 billion, a decrease of 22.8% from that in 2022; the net operating loss was NTD 4.00 billion. In addition, the Group made a provision of impairment loss for goodwill and idle assets, and recognized profit or loss on reinvestment. The net loss attributable to the parent company’s owners in 2023 was NTD 6.78 billion, and the basic loss per share was NTD 9.02. Under the unsatisfactory macroeconomic environment and many challenges in overall operations, the Company actively and effectively manages cash flow and capital expenditures to maintain a healthy financial structure. At the same time, through optimization and integration of the Group organization and reorganization of various reinvestment businesses to improve operating efficiency, this will enable the Group to battle with ease and face different challenges in the future.

One Ennostar strengthens resilience and accelerates the development of high value-added markets

In the future, the Group will accelerate the pace of integration and transformation of the Group, enhance the strength of all-dimensional organizational transformation and strategic deployment, and exert the greatest synergy of the Group. In terms of organizational transformation, we have prioritized the integration of human resource units and financial units of all subsidiaries into Ennostar. The Company has also been successively promoting factory integration by reviewing the production performance of each factory. First, we will merge and optimize our three manufacturing bases in northern, central, and southern Taiwan, followed by the optimization of factories in Mainland China, and organizing various reinvestment businesses to achieve asset activation and utilization. We hope to “integrate” the “One Ennostar” spirit into the Group’s culture and create new values for the Group.

In terms of strategic layout, the Group will have two parallel strategies. The first is to create added value and give full play to the group’s advantages. The Group continues to develop products and technologies for automotive, advanced display, and smart sensors based on our expertise in III-V compound semiconductor, such as, gallium arsenide (GaAs), gallium nitride (GaN), indium gallium arsenide (InGaAs) and so on, for optoelectronic products and pursue long-term profits through differentiation. Secondly, in order for the Group’s products and technologies to be competitive and meet the needs of different markets, the Group will

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actively deepen the upstream and downstream integration of the Group, expand the depth of technology, products and services, and provide customers with one-stop solutions from epitaxy, chip, packaging to modules. Effectively exploring new areas and expanding revenue and increasing profits.

1. Automotive use

The Group has been deeply involved in the automotive field for many years, and has combined the upstream and downstream supply chains to develop automotive lighting, automotive displays, and automotive sensors to present a complete automotive modular solution. Many of its products have been successfully adopted by major international OEMs and Tier 1 automotive suppliers for automotive lighting, ambient lighting, and ADB smart headlights. In recent years, the proportion of automotive revenue has continued to increase. With the development of EV new energy vehicles, the smart cockpit has become the focus of market attention. The immersive driving experience has attracted the attention of related technologies, especially Micro LED with high penetration rate, high brightness, and flexible application in a small size space. The automotive display industry has greater potential, and the Group is actively cooperating with several customers in the introduction. In addition, vehicle safety has always been a prerequisite for the development of the Group’s forward-looking automotive technologies. As the intelligentization of vehicles is increasingly day by day, the sensing applications required for vehicles are also increasing, such as: Driving Monitoring System (DMS), Advanced Driving Assistance System (ADAS), gesture recognition, ranging and lidar, among other applications, to improve the humanized riding experience and safe road environment.

1. Advanced display

2. The Group continues to invest in the research and development of advanced display technologies such as Mini LED and Micro LED, and is committed to helping customers improve the visual effect of their products. Currently, we are working closely with customers on a number of advanced display-related projects. Mini LED has now become one of the mainstream high-end display technologies, and new products of various international terminal brands continue to emerge. The Group has been deploying in the development of Micro LED for many years, and has not only mastered advanced key technologies, but has also completed the construction of a trial production line. We constantly promote the development of Micro LED with strategic partners, consolidate industry advantages, and prepare for mass production in the future.

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1. Smart sensing

The Group has the full band solutions and industry-leading technical specifications that can be applied to a variety of scenarios, including biological health sensing, medical applications, 1D/3D ranging for industrial and automotive applications. It has been adopted by many international leading brands. The Group is a leading manufacturer of shortwave infrared SWIR products and technology. SWIR has higher penetration for substances than NIR and is less susceptible to the influence of external light sources. With algorithms, it can achieve more sensing possibilities, such as industrial material analysis. sorting and freshness testing of fruits and vegetables. In addition, based on market trends and needs, the Group will also strengthen the deployment of sensing optical modules, improve the technical and service capabilities of solutions, and provide customers with one-stop procurement services, giving end products diversified possibilities.

1. New areas

In addition to the three major areas, the deployment of new areas is also an important development direction. The Group will start with its own business and combine the profound technical foundation accumulated over the years, the mastery of the optoelectronic product materials of the III-V compound semiconductor, and the advantages of the existing equipment, to actively develop high potential and high valueadded fields, such as: The development of AI optical communication, solar cells for loworbit satellites, and other new applications which are continuing to enhance the tolerance of enterprises in the face of market fluctuations, and make great strides toward high value-added applications.

ESG creates excellence and enriches the Group’s sustainability formula

The world is accelerating its net zero transformation. Since the Group’s establishment in 2021, it has clearly expressed its firm commitment to sustainability and excellence. The Group’s ESG goals, strategies, and implementations are directly supervised by the Ennostar’s Board of Directors, demonstrating the importance and determination of the Group towards ESG. In 2023, Ennostar and its subsidiaries participated in the Taiwan Corporate Sustainability Awards (TCSA). The Group has won five key awards in the three years since its inception. The award is an affirmation and a reminder that the Group’s partners are still working on this arduous and long road of sustainability. It reminds everyone that the road to sustainability is endless and that we must work harder.

In response to the international trends in climate governance and the challenges posed by climate change, the Group has formulated a green power policy, aiming to achieve the goal of

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RE100 in non-production areas by 2030, and RE100 by the whole group by 2050; having signed on to the commitments of the “Task Force on Climate-related Financial Disclosures” (TCFD) and the “Science Based Targets initiative” (SBTi), we are eager to adopt climate actions showing our determination to move towards net zero.

In addition, in order to become an accelerator for customers’ net zero carbon emissions and drive the sustainable growth of related suppliers, the Group also exerted its industry appeal and held annual supplier sustainability meetings for its subsidiaries to guide suppliers to build greenhouse gases inventory capability with its own sustainability experience. We have announced the absolute 20% carbon reduction and sustainability goal by 2030 striving to build a low-carbon supply chain.

The synergy of the Group’s cooperation to become a full-scale optoelectronic integrated solution provider

The global situation is changing rapidly. Only by properly adjusting its internal constitution can the entire organization maintain the agility to respond flexibly. Looking forward to 2024, we will accelerate the pace of group integration and transformation, continue to revitalize our assets, promote R&D technology and investment strategies with the greatest strength, accelerate the development of “three plus one” high value-added areas, and continue to expand into new areas and markets. The Group will bring its strong R&D capabilities and the synergy of its collaboration to become a provider of comprehensive optoelectronic integrated solutions. We will continue to work with all employees to create positive benefits for all stakeholders and jointly embrace the next peak growth for the Group.

Chairman Shuang-Lang Peng

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2. Company Introduction

2.1 Date of Incorporation: January 6, 2021

ENNOSTAR Inc. was established in January 2021 by the two major LED groups in Taiwan, Epistar and Lextar, through a share swap. Ennostar Group develop products and technologies for automotive, advanced display, and smart sensors based on our expertise in III-V compound semiconductor, such as gallium arsenide (GaAs), gallium nitride (GaN), indium gallium arsenide (InGaAs) and so on, for optoelectronic products. The Group’s products cover epitaxy, grains, packaging and modules, which may provide the customer customized services and solutions for supply chain integration.

2.2 Company History

• August 2020 On August 7, 2020, the special shareholders' meeting of EPISTAR Corporation and Lextar Electronics Corp resolved to jointly establish Ennostar Inc. through share conversion, and apply for stock listing and trading pursuant to the related regulations.

• January 2021 Approved by the Taiwan Stock Exchange on September 8, 2020 and September 24, 2020, the shares of EPISTAR and Lextar Electronics were delisted and terminated trading on January 6, 2021. And Ennostar Inc. became public listed on the same day for trading; the listed industry category and stock code are "Optoelectronics" and "3714," respectively.

• September 2022 The capital increase in cash via a private placement was completed and 70,000 thousand common shares issued; the strategic investors are AUO Corporation and Innolux Corporation.

• January 2023 Ennostar passed the information security management system ISO 27001 certification.

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3. Corporate Governance Report

3.1 Organization

3.1.1 Organizational Chart

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• 3.1.2 Operation of Major Department

Name of Department	Major Function
Steering Committee	Analyze the industry evolutions and improve the Group’s operations, and formulate the short, medium and long- term strategic planning and implementation; formulate inter-group strategic collaboration and resource integration plans; supervise the long-term cultivation programs for the successors of the Group management and its implementation; evaluate and propose for the Group’s organizational adjustments.
Sustainability & ERM Committee	Formulate ESG missions, visions, policies, and goals Identify ESG risk and opportunities, to determine the relevant investment strategies. Oversee ESG strategic planning and implementation. Supervise ESG performance and information disclosure. Respond to stakeholders’ assessment of environmental, social, and corporate governance risks and countermeasures to achieve the goal of sustainable operation.

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Name of Department	Major Function
Corporate Governance & Nominating Committee	Formulate the criteria for the nomination of board members and candidates, set up and regularly review the directors’ continuing education plan, conduct performance evaluations on the Board of Directors and functional committee members, and review the succession plan for senior managers, in order to strengthen corporate governance and enhance the performance of theBoard ofDirectors.
Chairman’s Office	In supervision of various business targets, development roadmap, and the relevant matters of holding directors’ meetings.
President’s Office	Responsible for setting up company business strategies to achieve the annual business goals expected by the Board ofDirectors.
Audit Office	Responsible for the inspection of and response to the deficiencies in the internal control system, and provide suggestions for corrections and produce follow-up reports on a regular basis.
Corporate Development Office	Responsible for the strategic positioning of the Group; through industry analysis, seek the development of new areas and the formulation and implementation of the overall investment layout plan, in order to help the Group continue exert its strengths to generated results in the existing fields and applications. Develop on the basis of group III and V compound semiconductor materials, proactively engage in the advancement of automotive, sensor and advanced display, and create applications and opportunities in new fields, secure the leadership in the industry, exert long- term competitive strengths, and create long-term value for the Group.
Finance Center	Responsible for coordinating and supervising the financial accounting, business management, investor relations, corporate governance, and stock services of each group company, and assisting each company in the establishment of risk management mechanisms.
Human Resources Center	Responsible for the Company’s human resources, general affairs and administration related affairs, also responsible for the management and control, policy instruction and supervision to the implementation at the same function in each subsidiary.
Legal & IP Management Office	Responsible for the legal affairs and intellectual property related affairs of the Company, and responsible for the management and control, policy instruction and supervision to the implementation at the same function in each subsidiary.

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Name of Department	Major Function
Information Technology Center	Responsible for formulating the information management strategy of the holding group and planning the information management system, continuously optimizing and integrating the holding information platforms, and formulating and promoting information security policies. Responsible for providing policy guidance to, and supervising the implementation of, various IT units of subordinate companies.
ESG Division	Formulate ESG directions and goals, promote ESG plans, assist in the implementation of ESG plans, track KPI performance, collect and analyze domestic and foreign trend, and regularly disclose the Group’s ESG performance information.

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3.2 Information about Directors, president, vice presidents, assistant vice presidents, and department and branch managers

3.2.1 Information about directors Base date of shareholding February 29, 2024; Unit: shares

Title	Nationality or Place of Registration	Name	Gender/ Age	Date elected (inauguration) Date	Term	Date First Elected	Shareholding When Elected	Shareholding When Elected	Current Shareholding		Shareholding of spouse and minor children	Shareholding of spouse and minor children	Shareholding in others’ name	Shareholding in others’ name	Experience & Education	Current Positions at the Company and Other Companies	Managers, directors or supervisors who are spouses or relatives within the second degree of kinship	Managers, directors or supervisors who are spouses or relatives within the second degree of kinship	Managers, directors or supervisors who are spouses or relatives within the second degree of kinship
							Shares	Shareholding %	Shares	Shareholding %	Shares	Shareholding %	Shares	Shareholding %			Title	Name	Relationship
Chairman	R.O.C.	Shuan-Lang Peng	Male/ 60-70	2023.05.31	3 years	2010.06.18	150,000	0.02%	250,000	0.03%	0	0.11%	0	0.00%	Chairman and CEO, AUO Corporation Director, Qisda Corporation MBA,Heriot-Watt University	Note 1	No	No	No
Vice Chairman	R.O.C.	AUO Corporation	Not applicable	2023.05.31	3 years	2005.05.18	93,568,898	12.43%	93,568,898	12.43%	0	0.00%	0	0.00%	No	Note 2	No	No	No
		Representativ e Yu-Chieh Lin	female/ 41-50	2023.05.31	3 years	2023.05.31	0	0.00%	3,930	0.00%	0	0.00%	0	0.00%	Vice President, AUO Corporation Taiwan Display Union Association supervisor M.A., Institute of Physics, National Central University	Note 3	No	No	No
Director	R.O.C.	Chin-Yung Fan	Male/ 51-60	2023.05.31	3 years	2019.06.20	133,506	0.02%	133,506	0.02%	31,576	0.00%	0	0.00%	President of Epistar Corporation M.A., Institute of Physics, National Central University	Note 4	No	No	No
Director	R.O.C.	Hsiu-Mu Tang	Male/ 51-60	2023.05.31	3 years	2023.05.31	249,230	0.03%	249,230	0.03%	0	0.06%	0	0.00%	President of Lextar Electronics Corp. PhD, Chemical Engineering, National Tsing Hua University	Note 5	No	No	No
Independent Director	R.O.C.	Wei-Min Sheng	Male/ 61-70	2023.05.31	3 years	2003.06.18	0	0.00%	0	0.00%	0	0.00%	0	0.00%	Professor of Department of Public Finance in National Taichung University of Science and Technology. Independent Director, Epistar Corporation PhD in Accounting,Purdue University	Note 6	No	No	No
Independent Director	R.O.C.	Hsien-He Sheng	Male/ 71-80	2023.05.31	3 years	2003.05.29	0	0.00%	0	0.00%	0	0.00%	0	0.00%	Vice President and Plant Chief, United Microelectronics Corporation Vice President, AUO Corporation Independent Director, Lextar Electronics Corp. Bachelor, Department of Electronic Engineering, Chung Yuan Christian University	Note 7	No	No	No
Independent Director	R.O.C.	Wei-Cheng Wang	Male/ 61-70	2023.05.31	3 years	2021.08.11	0	0.00%	0	0.00%	0	0.00%	0	0.00%	CPA and Partner, PwC Department of Accounting, NCCU	Note 8	No	No	No
Independent Director	R.O.C.	En-Te Hsu	Male/ 61-70	2023.05.31	3 years	2014.06.17	0	0.00%	0	0.00%	0	0.00%	0	0.00%	Professor of Accounting in Tunghai University Chief. of Accounting and Industry-Academic Research Center and EMBA in Tunghai University PhD in Accounting, National Taiwan University	Note 9	No	No	No
Independent Director	R.O.C.	Chun-Hsin Tsou	female/ 41-50	2023.05.31	3 years	2014.01.22	0	0.00%	0	0.00%	0	0.00%	0	0.00%	Chief. of AIPT International Law Office Chairman and arbitrator of Chinese Construction Industry Arbitration Association PhD in Law in China University of Political Science and Law	Note 10	No	No	No

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• ⚫ The first appointment date of directors and supervisors of listed companies.

• ⚫ Any relevant information where the chairperson of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto: With the comprehensive considerations of the board members’ independent, and the competency and necessity of managerial officers, and to enhance the operation and management efficiency and execution of decision-making, pursuant to Article 4 of the “Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers,” the seats of independent directors were added to five in 2021, and became the majority of the all board members. it is believed that the governance framework of the board is sufficient to oversee the Company’s key decision-making and protect the shareholders’ value.

Note:

1. Chairman, Shuan-Lang Peng concurrently servea as Chairman and Strategy Chief of AUO Group (TWSE: 2409); Director of Qisda Corporation (TWSE: 2352); Chairman of AUO Foundation. ;; Executive Director of AUO Trading (Shanghai) Co., Ltd; Chairman of AUO Singapore Pte. Ltd.; Chairman of Konly Venture Corp.; Chairman of Ronly Venture Corp..; Director of AUO Digitech (CAYMAN) Limited; Director of AUO Digitech Holding Limited; Director of AUO Digitech Pte. Ltd., and Chairman of AUO Digital Service (Suzhou) Ltd. ; Chairman of AUO Megainsight (Xiamen) Co., Ltd.;Chairman of AUO MegaInsight (Suzhou) Co., Ltd.;Chairman of Edgetech Data Technologies (Suzhou) Corp., Ltd.;Chairman of AUO Digitech Taiwan Inc. ; Chairman of Harvestar Investment Corp.; Chairman of Calystar Investment Corp.; Chairman of Precistar Investment Corp. ; Chairman of Praistar Investment Corp. and Chairman of Manastar Investment Corp.

2. Corporate director AUO Corporation concurrently servea as Director of Konly Venture Corp.; Director of Ronly Venture Corp.; Director of AUO Crystal Corp.; Director of Space Money Inc.; Director of AUO Envirotech Inc.; Director of Star River Energy Corporation ; Director of Star Shining Energy Corporation ; Director of Darwin Precisions Corporation (TWSE: 6120) ; Director of Qisda Corporation (TWSE: 2352) ; Director of Adlink Technology Inc. (TWSE: 6166) ; Director of AUO Care Inc.; Director of SINTRONES Technology Corp. (TWSE: 6680) ; Director of AUO Display Plus Corporation; Director of Da Ping Green Energy Corporation ; Director of AUO Health Corporation. and director of AUO Power Corporation.

3. Director Yu-Chieh Lin concurrently serves as Vice President of AUO Corporation and Director of YTTEK Technology Corp.

4. Director, Chin-Yung Fan, concurrently serves as Chairman and CEO of EPISTAR Corporation; Chairman of Lighting Investment Corp.; Director of Amengine Corporation ; Director of Shenzhen Epikylin Optoelectronics Co.,Ltd.; Director of TE OPTO CORPORATION; Director of FormoLight Technologies, Inc.; Director of Episky(Hong Kong)Ltd.; Chairman of Lighting Investment Ltd.; Chairman of Epistar JV Holding (BVI) Co., Ltd.;Director of LiteStar JV Holding (BVI) Co., Ltd.; Director of Epicrystal (Hong Kong) Co., Ltd.; Director of Luxlite (HK) Corporation Limited; Director of HUGA Holding (Samoa) Limited and Director of Epistar (Hong Kong) Limited. The abovementioned companies are all direct or indirect reinvestees of Ennostar.

5. Director Hsiu-Mu Tang concurrently serves as Chairman and CEO of Lextar Electronics Corp.; Chairman of Liang Li Venture Corp.; Chairman of Wellybond Corporation; Director of Wellypower Optronics Corporation; Director of Apower Optronics Corporation; Chairman of Vogito Innovation Co., Ltd.; Director of Wellyhertz Electronics Corp. ; Director of Lextar Electronics (Suzhou) Corp. Director of Lextar (Singapore) Pte. Ltd.; Director of Wellybond Optronics (H.K.) Corporation.; Director of Lextar Electronics (Chuzhou) Corp. and Chuzhou Director of Bwin Techology Corp. The abovementioned companies are all direct or indirect reinvestees of Ennostar.

6. Independent Director, Wei-Min Sheng concurrently serves as the Independent Director and member of the Remuneration Committee of Episil-Precision Inc. (TWSE: 3016); Independent Director and member of the Remuneration Committee of UPI Semiconductor Corp (TWSE: 6719) and Independent Director and member of the Remuneration Committee of Elite Semiconductor Memory Technology Inc. (TWSE: 3006)

7. Independent Director, Hsien-He Sheng concurrently serves as Director of Anpec Electronics Corporation. (TPEx: 6138); Director of C Sun MFG. Ltd (TWSE: 2467); Director of Taiwan Surface Mounting Technology Corp. (TWSE: 6278), and Director of Chem Tec Corporation Co., Ltd.

8. Independent Director, Wei-Cheng Wang concurrently serves as Independent Director and member of the Remuneration Committee of Taiwan mask corporation (TWSE: 2338); Director and member of the Remuneration Committee of Feature Integration Technology Inc. (TPEx: 4951) and Director of Etron Technology, Inc. (TPEx: 5351).

9. Independent Director, En-Te Hsu concurrently serves as Independent Director and member of the Remuneration Committee of Mobiletron Electronics Co., Ltd. (TWSE: 1533) and Director and member of the Remuneration Committee of Unicon Optical Co., Ltd. (Emerging: 4150).

10. Independent Director, Chun-Hsin Tsou concurrently serves as Independent Director of Chaheng Precision Co., Ltd. (Emerging: 4546) .

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Major shareholders of corporate shareholders

Name of corporate shareholders	Major shareholders of corporate shareholders	Shareholding percentage(%)
AUO Corporation (Note1)	Qisda Corporation	6.90
	Trust Holdingfor Employees for AUO	5.08
	Quanta Computer Inc.	4.61
	Yuanta Taiwan Dividend Plus ETF	2.99
	ADR of AUO	2.44
	New Labor Pension Fund	1.97
	Nan Shan Life Insurance Company,Ltd.	1.62
	HSBC Bank in Custody for Morgan Stanley & Co. International Plc Account	1.35
	JPMorgan Chase Bank N.A.,Taipei Branch in custody for Vanguard Total International Stock Index Fund,a series of Vanguard Star Funds	0.93
	JPMorgan Chase Bank N.A. Taipei Branch in custodyfor JPMorgan Asset Management	0.85

Note1: record on the shareholder roster at the book closure day, August 18, 2023.

The major shareholders of the major shareholder in the table above are corporate

Name of corporate	Major shareholder of corporate	Shareholding percentage(%)
Qisda Corporation (Note 2)	AUO Corporation	17.04
	Acer Incorporated	4.55
	Taishin International Bank entrusted with the Qisda Corporation Employee Stock Ownership Trust Account	3.38
	KonlyVenture Corp.	2.55
	Darfon Electronics Corp.	2.03
	Citibank Taiwan Limited in custody for Norges Bank	1.23
	ESUN COMMERCIAL BANK,LTD.	1.02
	Vanguard Emerging Markets Stock Index Fund, A Series Of Vanguard International Equity Index Funds	0.98
	New Labor Pension Fund	0.97
	Polunin Developing Countries Fund, LLC	0.97
Quanta Computer Incorporated (Note 3)	Chien Yu Investment Co.,Ltd	14.82
	BarryLam	10.76
	Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF(Custodian: TaiShin Bank)	2.38
	C.C. Leung	2.14
	He Sa Trust	2.07
	New Labor Pension Fund	1.99
	Yuanta Taiwan Dividend Plus ETF	1.81

11

Name of corporate	Major shareholder of corporate	Shareholding percentage(%)
	Nan Shan Life Insurance Co.,Ltd.	1.77
	Yi Chia Xin Investment CompanyLtd.	1.60
	CathayLife Insurance Co.,Ltd.	1.56
Nan Shan Life Insurance Company, Ltd. (Note 4)	RunchengInvestment HoldingCo.,Ltd.	89.55
	Runhua DyeingFactoryCo.,Ltd.	1.34
	Du Yingzong	1.16
	RuntaixingCo.,Ltd.	0.97
	Runtai Innovation International Co.,Ltd.	0.23
	Runtai Global Co.,Ltd.	0.21
	Yuanxin Investment Co.,Ltd.	0.16
	Runtai LeasingCo.,Ltd.	0.13
	Jipin Investment Co.,Ltd.	0.11
	PengchengCo.,Ltd.	0.10

Note 2: information recorded in the shareholder roster at the book closure date, March 31, 2023. Note 3: information recorded in the shareholder roster at the book closure date, April 18, 2023. Note 4: information recorded in the shareholder roster at the book closure date, March 31, 2023.

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Professional qualification of directors and independence of independent directors

Title	Condition Name	Gender	Age range	Professional knowledge and skills	Professional knowledge and skills	Major experience	Major experience	Concurrent Managerial officers	Term of Office	Term of Office	Term of Office	Number of Other Taiwanese Public Companies Concurrently Serving as an Independent Director
				Law Accounting Finance	Industry Marketing Technology	Professional Skill	Industry Experience		3 years under	3-9 years years	9 years or more
Chairman	Shuan-Lang Peng	Male	61-70 years old		✓	✓	✓	✓		✓		0
Director	Yu-Chieh Lin	Femal e	41-50 years old		✓	✓	✓		✓			0
Director	Chin-Yung Fan	Male	51-60 years old		✓	✓	✓	✓		✓		0
Director	Hsiu-Mu Tang	Male	51-60 years old		✓	✓	✓	✓	✓			0
Independent Director	Wei-Min Sheng	Male	61-70 years old	✓	✓	✓				✓		3
Independent Director	Hsien-He Sheng	Male	71 years old or more	✓	✓	✓	✓			✓		0
Independent Director	Wei-Cheng Wang	Male	61-70 years old	✓		✓				✓		3
Independent Director	En-Te Hsu	Male	61-70 years old	✓		✓			✓			2
Independent Director	Chun-Hsin Tsou	Femal e	41-50 years old	✓		✓			✓			1

Note: Mark“✓” if the condition is met

• ⚫ The board members are all nationals of the R.O.C., without circumstance specified in Article 30 of the Company Act, nor related to each other as spouse or relatives within 2nd degree kinship.

• ⚫ The average age of directors is about 60 years old. The proportion of directors who are employees is 33%, that of independent directors is 56%, and that of female directors is 22%. For the future nomination of board members, the Board of Directors of Ennostar will introduce female directors.

• ⚫ All the independent directors of the second term do not serve more than three terms in row.

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Information about diversity of the Board of Directors

The Board of Directors prudently evaluates and makes decisions on the business strategies and guidelines of the Group, enhances the Company’s performance, and protects the rights and interests of shareholders. In order to implement the policy program for the promotion of gender equality, 2nd Board of Directors has introduced female members and members with expertise in laws. The Company strictly abides by relevant laws and regulations to judge and evaluate the independence of independent directors. Each year, directors are arranged to attend continuing education courses for 6 hours, and the Company keeps evaluating the contribution of individual directors to ensure that the Board of Directors can maintain new visions and continue to optimize corporate governance.

Ability and experience of the Board of Directors

All members of the Board of Directors have the knowledge, skills, industry knowledge, rich experience and professionalism in financial, commercial and management fields necessary to perform their duties. All independent directors can exercise their powers objectively and meet the independence qualifications stipulated by laws and regulations.

Through the self-assessment, the directors made the following analysis:

Title	Condition Name	Make judgments about operations ability	Accounting and financial analysis ability	Business management ability	Risk Management /Crisis management ability	Knowledge of the industry	An international market perspective.	Leadership ability	Decision- making ability
Chairman	Shuan-LangPeng	✓		✓	✓	✓	✓	✓	✓
Director	Yu-Chieh Lin	✓		✓	✓	✓	✓	✓	✓
Director	Chin-YungFan	✓		✓	✓	✓	✓	✓	✓
Director	Hsiu-Mu Tang	✓		✓	✓	✓	✓	✓	✓
Independent Director	Wei-Min Sheng	✓	✓	✓	✓	✓		✓
Independent Director	Hsien-He Sheng	✓	✓	✓	✓	✓	✓	✓	✓
Independent Director	Wei-Cheng Wang		✓			✓
Independent Director	En-Te Hsu	✓	✓	✓	✓			✓	✓
Independent Director	Chun-Hsin Tsou	✓			✓

Note: Mark“✓” if the condition is met

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I. Directors serving as managerial officers

Shuan-Lang Peng, Chin-Yung Fan, and Hsiu-Mu Tang are all the key managerial officers of the Company, in charge of leading Ennostar’s industrial cooperation strategies from upstream to downstream.

(I) Chairman, Shuan-Lang Peng

Concurrently President of the Company, is also the current Chairman and Chief Strategy Officer of AUO group, and a director of Qisda Corporation. He has engaged in the technology industry for more than three decades and generated rich experience in the display industry. Meanwhile, he promotes cross-region integration and resource sharing in the industry chain proactively. For the time being, he is also a member of the Board of Science and Technology, Executive Yuan, responsible for planning and promoting the national digital technology application and innovation development policy.

(II) Director, Chin-Yung Fan

Worked in the subsidiary, EPISTAR for more than two decades, and has experience in various functions inside EPISTAR, from AlGaINP and Nitride LED manufacturing management, Quality control management, Logistics management, to Sales & Marketing. Currently, he is the chairman and president of EPISTAR, in charge of managing EPISTAR and leading the development of LED, long wave-length laser epitaxy and crystal grain business.

(III) Director, Hsiu-Mu Tang

He is the current Chairman and President of Lextar Electronics Corp. He joined the Company at the beginning of the establishment of Lextar and was responsible for important tasks, such as the promotion of an intelligent supply chain, integration of upstream and downstream resources, development of forward-looking technologies, backlight product business, and construction of factories in China. Already accumulated rich leadership experience in the fields of process R&D, production and supply chain management, sales and operations.

• II. Independent directors with industrial background and fully qualified for independence

The members of 2nd board of independent directors of Ennostar are recommended by the Board of Directors of Ennostar, which have included two females, one of whom has a legal expertise. Therefore, it should be considered meeting the specific management objectives of the diversity policy. The Company reviews if the independent directors continuously conform to the independence requirements set forth by laws and regulations. As of now, all the independent directors of the Company conform to the independence requirements set forth in Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies Including but not limited to the independent directors, their spouse, relatives within the second degree of kinship serving as director, supervisor, or employee of the company or any of its affiliates; not holding the Company’s share, nor their spouse, the person’s spouse, relatives within the second degree of kinship, or held by the person under others’ names; not servicing as director, supervisor, or employee of the company having special relationship with the Company (please refer to subparagraph 5-8, paragraph 1, Article 3 of the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies and subparagraph 5-8, paragraph 1, Article 6 of the Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange; not providing commercial, legal, financial, accounting or related services to the company or any affiliate

15

of the company for which the provider in the past 2 years or receiving corresponding compensation

• (I) Wei-Min Sheng Independent Director

PhD. in Accounting, Purdue University; currently serves as Professor of Department of Public Finance in National Taichung University of Science and Technology for more than 15 years. He has experience in semiconductor, electronic components and electronic industries. He was an independent director of EPISTAR Corporation. He used to serve as an independent director and the Remuneration Committee member of Siliconware Precision Industries Co., Ltd., and participated in the share conversion for investment holding between ASE Semiconductor Engineering Inc. and Siliconware Precision Industries Co., Ltd.

• (II) Hsien-He Sheng Independent Director

• Having the electronic engineering background; served as independent director of Lextar Electronics Corp., as well as VP and Plant Chief of UMC, and VP of AUO Corporation.

• (III) Wei-Cheng Wang Independent Director

Served as the CPA stationed in Hsinchu Science Park of PwC, Taiwan; experienced in finance and accounting, while growing along with the high technology industries in Taiwan, with deep knowledge of the needs of the Company and the industry.

• (IV) En-Te Hsu Independent Director

Doctor of Accounting from National Taiwan University, currently a professor at the Department of Accounting, Tunghai University, with the seniority for 20 years as a teacher and research expertise in game theory and social enterprise.

• (V) Chun-Hsin Tsou Independent Director

Doctor of Law from China University of Political Science and Law, and Master of Law from Soochow University, currently the President of AIPT International Law Office, practicing law for more than 15 years, also a patent attorney serving as the legal advisor of multiple technology companies.

• III. Representative of corporate shareholder who has an industrial background

Vice President of AUO, Yu-Chieh Lin, has been involved in the technology industry. The expertise and knowledge accumulated during this period have established her authoritative position in the display industry. Through the cooperation between the two companies, the next-generation display technology is jointly developed. Ennostar is responsible for the production of epitaxy and crystal grains in the upstream of the Micro LED industry chain, and AUO offers the experience and technologies developed during their long-time engagement of display industry. It is expected to have a deeper understanding to crystal grains and panel design, and further accelerate the pace of realizing the integration of crystal grains and panel in the future, achieving the goal of Micro LED mass production.

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The succession planning and operation of key management personnel

In order to achieve the synergies of the Group’s organizational integration, the succession plan at the management level is used to train the candidates for the three subsidiaries within the Group, namely Epistar, Lextar and Unikorn. This is done in order to exert the Company’s most assets, the employees, and improve the leadership from junior management to senior management, and to complete a diversified and flexible talent pool.

Establish the Talent Development Committee at the end of 2023 to establish a formal communication platform to discuss organizational and talent development. The committee members discuss the organization’s five-year strategic plan at quarterly talent development meetings, aligning organizational development and talent strategy with the Company’s operating strategy and future needs, from inventory taking of the organizational dynamics , talents, and bench depth, to key organizational positions and sound planning of the talent development mechanism to train the management’s sense of responsibility toward the future organizational and talent planning and to help develop the trust and commitment of managers and employees for organizational development, promote continuous activation of the human resources structure, and create robust organizational competition strength.

During the inventory taking, the Company focuses on establishing an elite talent pool, and then uses an evaluation tool to identify talent based on executives with organizational and personnel management responsibilities. The evaluation tool is used to arouse self-awareness in order to generate learning and an individual development plan with diversified development channels and adaptive development. Among them, the Top-talent Development program is set for backup candidates . It is expected that the coach (immediate supervisor) and the talent development committee will jointly research the direction of talent development, formulate the management and development goals for the high-level strategic talents in target positions, and determine the personalized learning and development journey.

Providing actual work or projects and arranging task rotation according to the learning goals not only enables the Company’s talents to exert their personal strengths, but also makes high-potential talents seek comprehensive resources before taking over the positions and, therefore, helps address the pressure from external and organizational transformation and improve talent readiness. A highly effective internal talent cultivation and promotion policy may effectively build the cohesion of employees, help retain outstanding talents, and improve the organizational performance.

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3.2.2 The general manager, assistant general managers, deputy assistant general managers, and the chiefs of all the company's divisions and branch

units Shareholding base date: February 29, 2024; unit: shares

Title	Nationality	Name	Gender	Date of Inauguration	Shareholding	Shareholding	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Shareholding in others’ name	Shareholding in others’ name	Experience & Education	Positions concurrently serving in other companies	Managerial officer who is the spouse of relative within 2nd degree kinship	Managerial officer who is the spouse of relative within 2nd degree kinship	Managerial officer who is the spouse of relative within 2nd degree kinship
					Shares	Shareholding %	Shares	Shareholding %	Shares	Shareholding %			Title	Name	Relation ship
President	R.O.C.	Shuang- Lang Peng	Male	2023.05.31	250,000	0.03%	0	0.00%	0	0.00%	Chairman and CEO, AUO Corporation Director, Qisda Corporation MBA,Heriot-Watt University	Note 1、4	No	No	No
Executive deputy general manager	R.O.C.	Feng- Cheng Su	Male	2023.09.01	1,021,441	0.14%	419,984	0.06%	0	0.00%	Chairman, Lextar Electronics Corp. Senior VP, AUO Corporation Ph.D. , Materials Science and Engineering , State University of New York, StonyBrook	Note 1、2	No	No	No
Vice President	R.O.C.	Po-Yi Chang	Male	2021.01.06	10,450	0.00%	0	0.00%	0	0.00%	Vice President, Lextar Electronics Corp. Assistant VP, Accounting Center, AUO Corporation Master,CEIBS	No	No	No	No
Vice President	R.O.C.	Lin-Tien Yang	Male	2021.11.10	398	0.00%	127	0.00%	0	0.00%	Vice President, EPISTAR Corporation Assistant VP, SOUTH EPITAXY CORP. Master, Institute of Business and Management, NCTU	Note 1	No	No	No
Vice President	R.O.C.	Wei, Shi	Male	2021.01.06	0	0.00%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation Master in EE,University ofSouthCalifornia	Note 1	No	No	No
Vice President	R.O.C.	Cun-Jhong Li	Male	2021.01.06	114,000	0.02%	5,000	0.00%	0	0.00%	Vice President, Lextar Electronics Corp. CSO and COO, NICHE-TECH GROUP LIMITED MBA,UC Berkeley	Note 1、2	No	No	No
Subsidiary President	R.O.C.	Chin-Yung Fan	Male	2021.01.06	133,506	0.02%	31,576	0.00%	0	0.00%	President of Epistar Corporation M.A., Institute of Physics, National Central University	Note 1	No	No	No
Subsidiary President	R.O.C.	Hsiu-Mu Tang	Male	2021.01.06	249,230	0.03%	0	0.00%	0	0.00%	President, Lextar Electronics Corp. Vice President, Technology Integration Center, EPISTAR Corporation PhD, Chemical Engineering, National TsingHua University	Note 1	No	No	No
Subsidiary President	R.O.C.	Jin-Xiang Wen	Male	2022.05.05	0	0.00%	0	0.00%	0	0.00%	President ,HannsTouch Vice President, Nuvoton Technology Corporation M.A.,Engineering Management Universityof TechnologySydney	Note 1	No	No	No

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Title	Nationality	Name	Gender	Date of Inauguration	Shareholding	Shareholding	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Shareholding in others’ name	Shareholding in others’ name	Experience & Education	Positions concurrently serving in other companies	Managerial officer who is the spouse of relative within 2nd degree kinship	Managerial officer who is the spouse of relative within 2nd degree kinship	Managerial officer who is the spouse of relative within 2nd degree kinship
					Shares	Shareholding %	Shares	Shareholding %	Shares	Shareholding %			Title	Name	Relation ship
Subsidiary Vice President	R.O.C.	Chen,Ou	Male	2021.01.06	1,542	0.00%	49	0.00%	0	0.00%	Vice President, EPISTAR Corporation PhD NCTU	Note 3	No	No	No
Subsidiary Vice President	R.O.C.	Ming-Da Jin	Male	2021.01.06	100,000	0.01%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation Master, Institute of Electrophysics	Note 1	No	No	No
Subsidiary Vice President	R.O.C.	Ming-Xun Hsieh	Male	2021.01.06	0	0.00%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation PhD. Power Mechanical Engineering, National TsingHua University.	No	No	No	No
Subsidiary Vice President	R.O.C.	Chih-Jie Lai	Male	2021.01.06	0	0.00%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation Assistant VP, Neo Solar Power Co., Ltd. Bachelor, Department of Applied Mathematics,NCTU	No	No	No	No
Subsidiary Vice President	R.O.C.	Li-Cheng Hung	Female	2021.01.06	0	0.00%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation B.A., Department of Electrical and Electronics Engineering,KunShanCollege	No	No	No	No
Subsidiary Vice President	R.O.C.	Chung- Ming Weng	Male	2021.11.10	50,000	0.01%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation Assistant President, DARWIN PRECISIONS CORPORATION Master,Institute of Photonics,NCTU	No	No	No	No
Subsidiary Vice President	R.O.C.	Chia-Lin Chen	Male	2021.11.10	15,000	0.00%	0	0.00%	0	0.00%	Vice President, EPISTAR Corporation Master, Institute of Management Science, NCTU Master,Institute ofChemical Engineering	No	No	No	No
Subsidiary Vice President	R.O.C.	Meng-Yi Lin	Male	2021.01.06	266,196	0.04%	0	0.00%	0	0.00%	Vice President, Lextar Electronics Corp. Vice President, EPISTAR Corporation PhD. Physics, Purdue University	No	No	No	No
Subsidiary Vice President	R.O.C.	Chao-Nien Huang	Male	2021.01.06	143,001	0.02%	6,500	0.00%	0	0.00%	Vice President, Lextar Electronics Corp. Vice President, EPISTAR Corporation Master, Institute of Mining and Material Engineering,NCKU	Note 1	No	No	No
Subsidiary Vice President	R.O.C.	Wan-Ji Hsu	Male	2021.01.06	323	0.00%	0	0.00%	0	0.00%	Vice President, Lextar Electronics Corp. Assistant VP, AUO Corporation M.A., Institute of Physics, National Central University	Note 1	No	No	No

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Title	Nationality	Name	Gender	Date of Inauguration	Shareholding	Shareholding	Shareholding of spouse and minor children	Shareholding of spouse and minor children	Shareholding in others’ name	Shareholding in others’ name	Experience & Education	Positions concurrently serving in other companies	Managerial officer who is the spouse of relative within 2nd degree kinship	Managerial officer who is the spouse of relative within 2nd degree kinship	Managerial officer who is the spouse of relative within 2nd degree kinship
					Shares	Shareholding %	Shares	Shareholding %	Shares	Shareholding %			Title	Name	Relation ship
Subsidiary Vice President	R.O.C.	Shan-Hua Wu	Male	2023.02.24	0	0.00%	0	0.00%	0	0.00%	Senior Director, Unikorn Semiconductor Corporation Factory director ,United Renewable Energy Co., Ltd. Bachelor, Department of Electrical Engineering ,National Central University	No	No	No	No
Subsidiary Vice President	R.O.C.	Chi-Chung Chao	Male	2024.01.19	0	0.00%	0	0.00%	0	0.00%	Senior Director, Lextar Electronics Corp. M.A., Mechanical Engineering, National TaiwanUniversity	Note 1	No	No	No
Subsidiary Vice President	R.O.C.	Hsiao-Heng Ho	Male	2024.01.19	0	0.00%	0	0.00%	0	0.00%	Senior Director, Lextar Electronics Corp. M.A., Institute of Geological Sciences, National TaiwanUniversity	No	No	No	No
Subsidiary Vice President	R.O.C.	Wen-Chieh Kuo	Male	2024.01.19	2,000	0.00%	0	0.00%	0	0.00%	Senior Director, EPISTAR Corporation M.A., Science in Industrial and Information Management, National Cheng Kung University	Note 1	No	No	No

Note 1: Please refer to the information of directors and supervisors of the affiliates under the section of Special items to be included in the annual report for the positions in the affiliates that the managerial officers concurrently serve.

Note 2: Tyntek Corporation. (TWSE: ： 2426) Director legal representative and Gcs Holdings, Inc. (TPEx: 4991) Director legal representative. Note 3: Play Nitride Inc. (TWSE: ： 6854) Director legal representative 。 Note 4: Where the chairperson of the board of directors and the general manager or person of an equivalent post (the highest level manager) of a company are the same person, spouses, or relatives within the first degree of kinship, an explanation shall be given of the reason for, reasonableness, necessity thereof, and the measures adopted in response thereto.

With the comprehensive considerations of the board members’ independent, and the competency and necessity of managerial officers, and to enhance the operation and management efficiency and execution of decision-making, pursuant to Article 4 of the “Taiwan Stock Exchange Corporation Operation Directions for Compliance with the Establishment of Board of Directors by TWSE Listed Companies and the Board's Exercise of Powers,” the seats of independent directors were added to five in 2021, and became the majority of the all board members. it is believed that the governance framework of the board is sufficient to oversee the Company’s key decision-making and protect the shareholders’ value.

Note 5:Mr. Chi-Chung Chao.Mr. Hsiao-Heng Ho and Mr. Wen-Chieh Kuo are new managers starting from January 19, 2024.

20

3.2.3

1.

21

• Note 1: Please describe the policy, system, standards and structure in place for paying remuneration to directors and describe the relationship of factors such as the duties and risks undertaken and time invested by the directors to the amount of remuneration paid: The remuneration to directors of the Company is distributed by the Board of Directors under the authorization of the Articles of Incorporation based on directors’ degree of participation in the Company’s operation and contribution and with reference to the payment level of its peers. When the Company records a profit, the Board of Directors shall determine the remuneration to directors by a resolution in accordance with the Articles of Incorporation. Independent Directors are the members of functional committees, so, apart from the general remuneration to directors, additional reasonable compensation in various amounts is allotted depending on their duties and risks undertaken and time invested

• Note 2: In addition to what is disclosed in the above table, please specify the amount of remuneration received by directors in the most recent fiscal year for providing services (e.g., for serving as a non-employee consultant to the parent company /any consolidated entities /invested enterprises): None.

• Note 3: Mr. Biing-Jye Lee retired as the Company’s Chairman and President on May 31, 2023, and Mr. Shuang-Lang Peng took over. Mr. Feng Cheng Su retired from Lextar Electronics Corporation, and Mr. Hsiu-Mu Tang took over as the Chairman of Lextar Electronics Corporation.

• Note 4: Resigned from duties after the re-electrion held on May 31, 2023.

• A: Remuneration to directors in 2023 (including director’s salary, duty allowance, severance pay, bonus and reward, et al.)

• B: the provision

• C: Amount of distributed remuneration to directors approved by the board in 2023.

• D: 2023 expense for directors to conduct business (transportation subsidy, allowance, various subsidies, or provision in kind, e.g. dorm and car).

• E: Salaries, allowance, severance pay, bonus, incentives, transportation subsidy, special disbursement, subsidies, or provision in kind, e.g. dorm and car, as well as the compensations expenses recognized based on IFRS 2, “Share-Based Payment received by the directors for their concurrent service as the employee (including concurrently serving as president, vice president, other managerial officers or employee in 2023.

• F: Retirement benefits and payment of severance pay comply with the regulations, and the Company’s “Procedures for Resignation and Retirement of the Appointed Managerial Officers and Directors Serving as Labor.”

• G: For the amount of 2023 distributed employee remuneration resolved by the board, the proposed amount was calculated by referring the historic distribution principles or actual distribution percentage.

Net income after tax: refers to the net income after tax in 2023 parent-only financial statements, NT$6,782,678 thousand

22

Range of Remuneration

Unit: NT$

	Range of Remuneration Unit: NT$	Range of Remuneration Unit: NT$	Range of Remuneration Unit: NT$	Range of Remuneration Unit: NT$
Range of Remuneration Paid to Each Director	Name of Directors
	Total of first four remunerations(A to D)		Total of first seven remunerations(A to G)
	The Company	All consolidated entities	The Company	Parent and all reinvestees
NT$0~ NT$ 999,999	Hsiu-Mu Tang, Representative of AUO Corporation: Yu-Chieh Lin, En-Te Hsu, Chun-Hsin Tsou, Feng-Cheng Su, Ji- Yen Liang, Sheng-Tai Weng	Hsiu-Mu Tang, Representative of AUO Corporation: Yu-Chieh Lin, En-Te Hsu, Chun-Hsin Tsou, Feng-Cheng Su, Ji-Yen Liang, Sheng-Tai Weng	Hsiu-Mu Tang, Representative of AUO Corporation: Yu-Chieh Lin, En-Te Hsu, Chun-Hsin Tsou, Feng-Cheng Su, Ji-Yen Liang, Sheng-Tai Weng	Representative of AUO Corporation: Yu-Chieh Lin, En-Te Hsu, Chun-Hsin Tsou, Ji-Yen Liang, Sheng-Tai Weng
NT$1,000,000 ~ NT$1,999,999	Shuan-Lang Peng, Chin-Yung Fan, AUO Corporation, Wei-Min Sheng, Hsien-He Sheng, Wei-Cheng Wang, Biing-Jye Lee	Shuan-Lang Peng, Chin-Yung Fan, AUO Corporation, Wei-Min Sheng, Hsien-He Sheng, Wei-Cheng Wang, Biing-Jye Lee	Chin-Yung Fan, AUO Corporation, Wei-Min Sheng, Hsien-He Sheng, Wei-Cheng Wang,	AUO Corporation, Wei-Min Sheng, Hsien-He Sheng, Wei-Cheng Wang,
NT$2,000,000 ~ NT$3,499,999	No	No	No	No
NT$3,500,000 ~ NT$4,999,999	No	No	No	No
NT$5,000,000 ~ NT$9,999,999	No	No	Shuan-LangPeng	Shuan-LangPeng,Hsiu-Mu Tang
NT$10,000,000 ~ NT$14,999,999	No	No	Biing-Jye Lee	Chin-YungFan,Biing-Jye Lee
NT$15,000,000 ~ NT$29,999,999	No	No	No	Feng-ChengSu
NT$30,000,000~ NT$49,999,999	No	No	No	No
NT$50,000,000 ~ NT$99,999,999	No	No	No	No
Over NT$100,000,000	No	No	No	No
Total	14	14	14	14

23

2.

Cun-Jhong Li Chao-Nien Huang Shan-Hua Wu

==> picture [599 x 40] intentionally omitted <==

24

A: 2023 salaries, allowance, and severance pay of the president and vice president.

B: the provision

• C: Bonus, incentives, transportation subsidy, special disbursement, subsidies, or provision in kind, e.g. dorm and car, as well as the compensations expenses recognized based on IFRS 2, “ShareBased Payment received by the president and vice presidents in 2023.

• D: For the amount of 2023 distributed employee remuneration resolved by the board, the proposed amount was calculated by referring the historic distribution principles or actual distribution percentage of EPISTAR and Lextar.

Net income after tax: refers to the net income after tax in 2023 parent-only financial statements, NT$6,782,678 thousand

Range of Remuneration

Unit: NT$

Remuneration Range Paid to President and Vice Presidents	Name of President and Vice Presidents	Name of President and Vice Presidents
	The Company	Parent and all reinvestees
NT$0~ NT$999,999	No	No
NT$1,000,000 ~ NT$1,999,999	No	No
NT$2,000,000 ~ NT$3,499,999	Cun-JhongLi,Feng-ChengSu	No
NT$3,500,000 ~ NT$4,999,999	No	Li-Cheng Hung , Chung-Ming Weng ,Chia-Lin Chen , Shan-Hua Wu
NT$5,000,000 ~ NT$9,999,999	Shuang-Lang Peng , Po-Yi Chang , Lin-Tien Yang , Wei Shi	Shuang-Lang Peng , Po-Yi Chang , Lin-Tien Yang , Wei Shi, Cun-Jhong Li, Chen Ou , Ming-Da Jin, Ming-Xun Hsieh , Chih-Jie Lai , Hsiu-Mu Tang , Chao-Nien Huang, Meng-Yi Lin, Wan-Ji Hsu
NT$10,000,000 ~ NT$14,999,999	Biing-Jye Lee	Biing-Jye Lee,Chin-YungFan,Jin-XiangWen
NT$15,000,000 ~ NT$29,999,999	No	Feng-ChengSu
NT$30,000,000~ NT$49,999,999	No	No
NT$50,000,000 ~ NT$99,999,999	No	No
Over NT$100,000,000	No	No
Total	7	21

Note 1: Mr. Biing-Jye Lee retired on May 31, 2023 as the Company’s Chairman and President. Mr. Shuang-Lang Peng succeeded to the positions. Note 2: Mr. Feng-Cheng Su retired from Lextar on May 31, 2023. He was appointed as the new manager of the Company on September 1 of the same year.

• Note 3: Mr. Shan-Hua Wu was officially included in the Company’s permissible managerial officers on February 24, 2023, whose remuneration calculation period began to be calculated from the month of inclusion.

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3. Name of Managerial Officers Received Employee Remunerations and the Distribution

					December 31,2023 Unit: NT$thousand Cash amount Total Total to the net income after tax (%) 0 0 0	December 31,2023 Unit: NT$thousand Cash amount Total Total to the net income after tax (%) 0 0 0	December 31,2023 Unit: NT$thousand Cash amount Total Total to the net income after tax (%) 0 0 0
	Title and Name			Share amount	Cash amount	Total	Total to the net income after tax (%)
Title	Name	Title	Name
President	Shuang-Lang Peng	Vice President of the subsidiary	Chih-Jie Lai	0	0	0	0
Vice President	Po-Yi Chang	Vice President of the subsidiary	Li-Cheng Hung
Vice President	Lin-Tien Yang	Vice President of the subsidiary	Chung-Ming Weng
Vice President	Wei, Shi	Vice President of the subsidiary	Chia-Lin Chen
Executive deputy general manager	Feng-Cheng Su	President of the subsidiary	Hsiu-Mu Tang
Vice President	Cun Jhong Li	Vice President of the subsidiary	Chao-Nien Huang
President of the subsidiary	Chin-Yung Fan	Vice President of the subsidiary	Meng-Yi Lin
President of the subsidiary	Che, Ou	Vice President of the subsidiary	Wan-Ji Hsu
Vice President of the subsidiary	Ming-Da Jin	President of the subsidiary	Jin-Xiang Wen
Vice President of the subsidiary	Ming-Xun Hsieh	Vice President of the subsidiary	Shan-Hua Wu

Note 1: For the amount of 2023 distributed employee remuneration resolved by the board, the proposed amount was calculated by referring the historic distribution principles or actual distribution percentage.

Note 2: Net income after tax: refers to the net income after tax in 2023 parent-only financial statements, NT$6,782,678 thousand.

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• 3.2.4 Total remuneration, as a percentage of net income stated in the parent company only financial reports or individual financial reports, as paid by this company and by each other company included in the consolidated financial statements during the past 2 fiscal years to directors, supervisors, general managers, and assistant general managers, and analyze and describe remuneration policies, standards, and packages, the procedure for determining remuneration, and its linkage to operating performance and future risk exposure.

• (1) Remunerations of directors (independent director include) and supervisors. The remuneration of directors is recommended by the Remuneration Committee, and submitted to the board of directors for resolution:

  • a 、 Variable remuneration (i.e. director's remuneration distributed from earnings) is determined by the board of directors based on the percentage set forth in the Articles of Incorporation, by the resolution adopted by the majority of the attending directors in a meeting attended by two-thirds of the board of directors for distribution, and reported to the shareholders’ meeting; the independent directors are eligible for distribution.

The Company prescribed the relevant measures for the performance evaluation of the board and each functional committee. Every year, the self-evaluation is conducted regularly for the board of directors, individual directors, or members of various functional committees. The results of their performance evaluation are included in the consideration of individual remuneration.

• b 、 Fixed remuneration

By considering that independent directors are required to possess work or industrial experience in professional fields, expertise in corporate governance and ESG, and considerable understanding of the Company for them to offer deep insights for the Company's business strategy, and being obviously helpful when judging and performing duties; Also, by considering the laws and regulations impose independent directors for certain responsibilities and obligations, and based on the degree of participation of directors/independent directors in the Company's operations and the value of their contributions, while referring to industry standards and benchmark companies in other industries, each director/independent director is paid with a fixed annual salary. If a director also serves as the chair of a functional committee, the weight will be multiplied by a certain percentage.

• c 、 Attendance subsidy

The attendance of directors and members of functional committees will be subsidized for attendance allowance/transportation subsidies.

• (2) Remuneration of president and vice presidents

The remuneration of the president and vice presidents includes salary, bonus, employee remuneration and rewards as share-based payment.

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• a 、 Fixed salary

It has to maintain competitiveness with the market standards. The salary adjustment multitude is based on the consideration of personal performance, operational performance of department, business strategy capability and the Company’s operating conditions, for planning budgets while complying with the Company’s HR regulations. The Remuneration Committee provide advice based on the salary level among peers, for the resolution of the board.

• b 、 Employee remuneration

  • Employee remuneration is determined pursuant to the Articles of Incorporation, i.e. within 0.1% to 15% of the profit for the year, and it shall be resolved by the majority of the attending directors in a meeting attended by two-thirds of the board of directors for distribution, and reported to the shareholders’ meeting. Of which, the remunerations of the president and vice presidents will refer to the Company's operating performance, combining the core ability to develop ESG, and internalize ESG into the Group's DNA, while properly linking the ESG management guidelines and implementation effectiveness, as a reference for promotion goals of ESG and the Sustainability Committee.

• (3) Long-term incentive plan

The Long-term Incentive Plan (LTI) is a high-level reward plan that links the Company’s operations, ESG performance indicators and individual performance, while strengthening the reasonable relationship with shareholder returns. Starting from 2024, LTI will be implemented in the form of a three-year contract combined with a shareholding trust to agree on the operational performance indicators of the Company and peers of each year, as well as ESG performance indicators covering the environment, society, and corporate governance and individual performance indicators, and contribute an agreed fund to subscribe for the Company’s shares and put them under trust. On the expiration date, the incentive shares will be settled based on the achievement of each indicator when the relevant conditions are fulfilled.

Title	Remuneration of Directors, Supervisors, Presidents and Vice Presidents to Net Income After Tax in Parent-Only Financial Statements(%)	Remuneration of Directors, Supervisors, Presidents and Vice Presidents to Net Income After Tax in Parent-Only Financial Statements(%)	Remuneration of Directors, Supervisors, Presidents and Vice Presidents to Net Income After Tax in Parent-Only Financial Statements(%)	Remuneration of Directors, Supervisors, Presidents and Vice Presidents to Net Income After Tax in Parent-Only Financial Statements(%)
		2022		2023
	The Company	All consolidated entities	The Company	All consolidated entities
Director	31.09	31.09	-0.45	-1.12
Presidents and Vice Presidents	96.42	426.56	-0.69	-2.67

Note 1: Refers to the net income after tax in 2023 parent-only financial statements, NT$6,782,678 thousand.

Note 2: The remuneration ratio in 2023 is significantly lower than that in 2022 mainly due to the lower-than-expected profit in 2023, the overall economic impact, the decrease in revenue, the increase in idle capacity and the provision of asset impairment.

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3.3 Implementation of Corporate Governance

3.3.1 Board of Directors Meeting Status

Total of five (A) meetings were held by the board of directors in 2023 (meeting dates: 2/23 、 5/4 、 5/31 、 8/3 、 11/3). The attendance of the directors as the following:

Title	Name	Attendance in Person (B)	Attendance By Proxy	Actual attendance rate (B/A)	Remark
Chairman	Shuang-Lang Peng	3	0	100.0%	Newly appointed, should attend three times.
Director	AUO Corporation Representative: Yu-Chieh Lin	3	0	100.0%	Newly appointed, should attend three times.
Director	Chin-Yung Fan	5	0	100.0%	Reelected
Director	Hsiu-Mu Tang	3	0	100.0%	Newly appointed, should attend three times.
Independent Director	Wei-Min Sheng	5	0	100.0%	Reelected
Independent Director	Hsien-He Sheng	5	0	100.0%	Reelected
Independent Director	Wei-Cheng Wang	5	0	100.0%	Reelected
Independent Director	En-Te Hsu	3	0	100.0%	Newly appointed, should attend three times.
Independent Director	Chun-Hsin Tsou	3	0	100.0%	Newly appointed, should attend three times.
Chairman	Biing-Jye Lee	2	0	100.0%	Term expired, should attend two times
Vice Chairman	AUO Corporation Representative: Shuan-Lang Peng	2	0	100.0%	Term expired, should attend two times
Director	Feng-Cheng Su	2	0	100.0%	Term expired, should attend two times
Independent Director	Sheng-Tai Weng	2	0	100.0%	Term expired, should attend two times
Independent Director	Ji-Yen Liang	2	0	100.0%	Term expired, should attend two times

Other matters to be specified

• 1 、 Where the Board of Directors’ operation meets any of the following circumstances, please clearly state the directors’ meeting date, term, contents of motions and resolution thereof, opinions of all independent directors and the Company’s handling of said opinions:

• (1) Securities and Exchange Act §14-3 resolutions: Please refer to Page34.

• (2) Other than the aforesaid matters, other written or otherwise recorded resolutions on which an independent director had a dissenting opinion or qualified opinion: none.

• 2 、 Recusals of Directors due to conflicts of interests

The directors have a clear understanding of the proposals with conflicts of interest. In

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addition to explaining the important content of their conflicts of interest, they also recused themselves from discussions and voting, nor exercised the voting rights on behalf of other directors.

directors.
Term/Meeting Date	Proposal	Recused director	Status
1-20 2023.05.04	Equipment-related transactions between Epistar and Unikorn.	Chairman Bing-Jie Li and Director Chin-Yung Fan	Chairman Bing-Jie Li and Director Chin-Yung Fan, who served as the corporate director’s representatives of Epistar and Unikorn, respectively, recused themselves from the discussion and voting temporarily. The motion was approved by the attendingdirectors as it was.
	Ennostar Group intended to participate in Unikorn’s cash capital increase for 2023, subject to the upper limit for NT$400 million.	Chairman Bing-Jie Li and Director Chin-Yung Fan	Chairman Bing-Jie Li and Director Chin-Yung Fan, who served as the corporate director’s representatives of Epistar and Unikorn, respectively, recused themselves from the discussion and voting temporarily. The motion was approved by the attendingdirectors as it was.
2-1 2023.05.31	Appointment of the President of the Company.	Chairman Shuang-Lang Peng	Chairman Shuang-Lang Peng recused himself from the discussion and voting for the time being. The motion was approved by the attending directors as it was.
2-2 2023.08.03	The Company intends to acquire from the related party, Yenrich Technology Corporation, the whole equity held it in Leadstar Micro- Crystal Display Corporation (Jiangsu) Ltd. in Mainland China.	Director Hsiu-Mu Tang	Director Hsiu-Mu Tang, who served as the corporate director’s representatives of Lextar and Yenrich, respectively, recused himself from the discussion and voting temporarily. The motion was approved by the attending directors as it was.
	Salary proposal for the new President.	Chairman Shuang-Lang Peng	Chairman Shuang-Lang Peng recused himself from the discussion and voting for the time being. The motion was approved by the attending directors as it was.

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3 、 Evaluation period of the board of director

type	evaluation periods	evaluation cycles	evaluation scope	method of evaluation	evaluation content
internal	January 1, 2023~ December 31, 2023	Once a year	Board of Directors	Mutual Evaluation by Directors	A. Participation in the Company’s operations B. Improvement of the Board’s decision- making quality C. Composition and structure of the Board of Directors D. Election and continuing education of directors E. Internal control, supervision by the Board of Directors, and risk management F. The Company’s sustainable operation
	January 1, 2023~ December 31, 2023	Once a year	Individual Board members	Self- evaluation by directors	A. Alignment of the Company’s goals and missions B. Awareness toward Directors’ Duties and Fulfillment C. Participation in the Company’s operations D. Internal relationship management and communication E. Directors’ professionalism, self- discipline and continuing education F. Internal control
	January 1, 2023~ December 31, 2023	Once a year	Audit Committee	Self- evaluation by independe nt directors	A. Participation in the Company’s operations B. Awareness toward functional committees’ duties C. Improvement of functional committees’ decision-making quality D. Composition of the functional committee, and election and continuing education of members E. Internal control
	January 1, 2023~ December 31, 2023	Once a year	Remunerat ion Committee	Self- evaluation by members	A. Participation in the Company’s operations B. Awareness toward functional committees’ duties C. Improvement of functional committees’ decision-making quality D. Composition of the functional committee, and election and continuing education of members

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type	evaluation periods	evaluation cycles	evaluation scope	method of evaluation	evaluation content
	January 1, 2023~ December 31, 2023	Once a year	Sustainabilit y & ERM Committee	Self- evaluation by members	A. Participation in the Company’s operations B. Awareness toward functional committees’ duties C. Improvement of functional committees’ decision-making quality D. Composition of the functional committee, and election and continuing education of members
	August 3, 2023~ December 31, 2023	Once a year	Corporate Governance & Nominating Committee	Self- evaluation by members	A. Participation in the Company’s operations B. Awareness toward functional committees’ duties C. Improvement of functional committees’ decision-making quality D. Composition of the functional committee, and election and continuing education of members

Self-evaluation

The Company has completed the self-evaluation of the board performance for 2023. The evaluation results were submitted to the Board for reporting on February 23, 2024, as a basis for review and improvement.

• (1) The overall average score of the Board’s self-performance evaluation is 4.95 points (out of 5 points), and the overall average score of the self-performance evaluation of individual directors is 4.97 points (out of 5 points), showing that the overall operation of the Board was good;

• (2) For the self-performance evaluation results of the Audit Committee , the Remuneration Committee, Sustainability & ERM Committee and Corporate Governance & Nominating Committee all members are 100% satisfied with each measurement item;

• 4 、 Evaluation of the goals to strengthen the functions of the board of directors and implementation in the current year and the most recent year

• (1) In order to enhance the depth of corporate governance, on August 11, 2021, the special shareholders’ meeting completed the by-election of five independent directors, making independent directors more than half of all directors, and the Audit committee composed of all independent directors.

• (2) The Remuneration Committee is appointed by the Board of Directors with three independent directors.

• (3) The “Steering Committee” is established under the Board of Directors, composing two to four directors and officers as the members. Through the responsibility management of the Committee and related approval authorities, it demonstrates that the chairman concurrently serves as the president is independent.

• (4) To demonstrate the Company’s commitment to corporate sustainability and risk management, the Company has changed the “ESG Committee” to the “Corporate Sustainability and Risk Management Committee” and formulated the “Organization Rules of the Corporate Sustainability and Risk Management Committee,” in order to fulfill the corporate social responsibility, link the international trends, proactively

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• respond to stakeholders’ assessments on environmental, social, and corporate governance risks and countermeasures, and achieve the goal of sustainable operation.

• (5) The chair of each committee regularly reports to the Board on the activities and actions of each committee, and invites the CPAs to participate in the Audit Committee. For the review or audit results of the quarterly financial report, as well as other relevant legal requirements, they are communicated and discussed with the attesting CPAs, with the recommendation furnished as reference. For every six months, the individual communication between the independent directors and CPAs, and Chief Auditor, respectively is conducted. The communication is smooth.

• (6) On February 23, 2023, the candidates recommended for the 2nd Board included two females, one of them with legal expertise. The expected achievements for the specific management objectives of the diversity policy are as follows:

Management objectives	Candidates for the 2ndof Directors
Independent directors more than a majority of the members	Achieved
A majority of the independent directors shall hold office for no more than three consecutive terms	Achieved
The whole independent directors shall hold office for no more than three consecutive terms	Achieved
It is advisable that the directors concurrently serving as the Company’s managerial officers shall be no more than one-third of the whole directors.	Achieved
Includingat least one director of differentgender	Achieved
Each gender accounts for at least one-third of the Board seats	Included into the future planning
Board member(s)with legal expertise	Achieved
Complete the continuing education courses for six hours eachyear(Note)	Achieved

• 3.3.2 Operation of the Audit Committee

Total of four (A) Audit Committee meetings were held in 2023 (meeting dates: 、 、 、 2/23 5/4 8/3 11/2). The independent directors’ attendance is as below.

Title	Name	Attendance in Person (B)	Attendance by Proxy	Actual attendance rate (B/A)	Remarks
Independent Director	Wei-Min Sheng	4	0	100.0%	Convener
Independent Director	Hsien-He Sheng	4	0	100.0%
Independent Director	Wei-Cheng Wang	4	0	100.0%
Independent Director	En-Te Hsu	2	0	100.0%	Newly appointed, should attend two times.
Independent Director	Chun-Hsin Tsou	2	0	100.0%	Newly appointed, should attend two times.
Independent Director	Sheng-Tai Weng	2	0	100.0%	Term expired, should attend two times
Independent Director	Ji-Yen Liang	2	0	100.0%	Term expired, should attend two times

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Other matters to be specified

• 1 、 Matters deliberated by the Audit Committee and key tasks in 2023, mainly include:

• (1) Establish or amend the internal control system pursuant to Article 14-1 of the Securities and Exchange Act

• (2) Assess the effectiveness of the internal control system

• (3) To establish or amend the operational procedures for major financial and business conducts, including acquiring or disposing of assets, engaging in derivative trading, loaning of funds to others, or making endorsement/guarantee for others pursuant to Article 36-1 of the Securities and Exchange Act

• (4) Matters involving the interests of directors

• (5) Material asset transactions or derivative trading

• (6) Material loaning of funds, making endorsement or guarantee

• (7) Offering, issuing or private placing securities in equity nature

• (8) Appointment, dismissal or compensations of attesting accountants

• (9) Appointment and discharge of the head of finance, accounting, or internal audit

• (10) Annual financial report signed or stamped by the chairman, managerial officers, and accounting officer, and the Q2 financial report required to be audited and certified by accountants

• (11) Other material matters set forth by the Company or competent authorities

• 2 、 Where the Audit Committee’s operation meets any of the following circumstances, please specify the meeting date, term, contents of proposal, independent directors’ dissent, qualified opinion, or key recommendation, and resolution of the Audit Committee, as well s the Company’s treatment of the Audit Committee’s opinions:

• (1) Matters set forth Article 14-5 of the Securities and Exchange Act and its implementation:

Term/Meeting Date	Proposal	Independent directors’ opinions and resolution of Audit Committee	The Company’ (the board of directors) treatment of Audit Committee’s opinions
1-12 2023.02.23	2022 Evaluation on the Effectiveness of the Internal Control System, and the Statement of Internal Control System	All independent directors affirmed their approval and approved the proposal as it was by all the independent directors.	The board of directors approved all proposals based on the recommendations of the Audit Committee.
	Distribution of the Company’s 2022 remuneration to employees and directors
	The Company’s 2022 financial statements and business report
1-13 2023.05.04	Equipment-related transactions between Epistar and Unikorn.	All independent directors affirmed their approval and approved the proposal as it was by all the independent directors.	The board of directors approved all proposals based on the recommendations of the Audit Committee.
	Ennostar Group intended to participate in Unikorn’s cash capital increase for 2023, subject to the upper limit for NT$400 million.
2-1 2023.08.03	The Company’s Q2 2023 financial report	All independent directors affirmed their approval and approved the proposal as it was by all the independent directors.	The board of directors approved all proposals based on the recommendations of the Audit Committee.
	Loaning of the fund, NT$500 million, to Unikorn Semiconductor
2-2 2023.11.02	The Company’s 2024 audit plan	All independent directors affirmed their approval and approved the proposal as it was by all the independent directors.	The board of directors approved all proposals based on the recommendations of the Audit Committee.

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• (2) Except for the aforesaid matters, other matters that have not been approved by the Audit Committee but have been approved by more than two-thirds of all directors: None.

• 3 、 Implementation of independent directors’ recusal for proposals involve personal interest: None.

• 4 、 Communications between independent directors and internal audit officers and accountants

• (1) Method of communication

  • A. After the audit report and tracking report are reviewed, they will be delivered to the independent directors for review by the end of the following month. The independent directors offer suggestions on the report, and the audit officer replies the supplementary explanations in writing and via email and telephone contact. The audit officer regularly reports the audit operation to the independent directors in board meetings, and communicates with the independent directors for the results of the audit report and the implementation of the tracking report.

  • B. At the quarterly board meetings, the attesting accountants report to the independent directors on the review or audit results of the financial statements of the Company and its international and domestic subsidiaries as well as the internal control audit status.

  • C. In addition to the two said points, in Audit Committee meetings, all the participants would leave the meeting, to leave the internal audit officer and the accountants, for individually communicating with the independent directors.

• (2) Summary of the communication between independent directors and internal audit officer

The major communications in 2023 are summarized as the follows:

Date	Attendees	Key point of communication	Result of communication
2023.02.23 Audit Committee	Independent Director：Wei- Min Sheng、 Sheng-Tai Weng、 Ji-Yen Liang、 Hsien-He Sheng、 Wei-Cheng Wang	1. 2022 Q4 Internal Audit Implementation Report 2. 2022 Statement of Internal Control System 3. Individual communication between the independent directors and the audit officer: (1) Amendments to the “Regulations Governing Establishment of Internal Control Systems by Public Companies,” and remarks (2) The internal audit officer answered the questions raised by the independent directors at themeeting.	No comments
2023.05.04 Audit Committee	Independent Director：Wei- Min Sheng、 Sheng-Tai Weng、 Ji-Yen Liang、 Hsien-He Sheng、 Wei-ChengWang	1. 2022 Internal Audit Implementation Report 2. 2022 Q1 Internal Audit Implementation Report	No comments
2023.08.03 Audit Committee	Independent Director：Wei- Min Sheng、 Hsien-He Sheng、 Wei-Cheng Wang、En-Te Hsu、Chun-Hsin Tsou	1. 2022 Internal Audit Implementation Report 2. 2022 Q2 Internal Audit Implementation Report 3. Motion for delegation of Internal Audit Office’s administrative affairs 4. Individual communication between the independent directors and the audit officer: (1) The internal audit officer answered the questions raised by theindependent directors at the	No comments Submitted to the Audit Committee and the Board of Directors for approval Director Wei-Min Sheng recommend communication on group integration matters.

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Date	Attendees	Key point of communication	Result of communication
		meeting.	Processing status: The progress has been updated to the independent directors on a monthly basis as recommended.
2023.11.02 Audit Committee	Independent Director：Wei- Min Sheng、 Hsien-He Sheng、 Wei-Cheng Wang、En-Te Hsu、Chun-Hsin Tsou	1. 2023 Q3 Internal Audit Implementation Report 2. 2024 Audit Plan	No comments Submitted to the Audit Committee and the Board of Directors for approval

• (3) Summary of the communication between independent directors and the external auditor

The major communications in 2023 are summarized as the follows:

Date	Attendees	Key point of communication	Result of communication
2023.02.23 Audit Committee	Independent Director：Wei-Min Sheng、Sheng-Tai Weng、Ji-Yen Liang、Hsien-He Sheng、Wei-Cheng Wang Auditor： Tien-Yi Li	1. The report on the audit result of the Company’s consolidated a financial statements and audit on internal control of Q4 in 2022. 2. Explanation of key audit matters 3. Commutation with key governance unit 4. CPAs explained the questions raised by the Audit Committee. 5.Independence ofCPAs	The financial statements were approved by the Audit Committee,submitted to the board of directors of approval, and public announced and reported to the competent authorities on time.
2023.05.04 Audit Committee	Independent Director：Wei-Min Sheng、Sheng-Tai Weng、Ji-Yen Liang、Hsien-He Sheng、Wei-Cheng Wang Auditor： Tien-Yi Li	1. The report on the audit result of the Company’s consolidated a financial statements and audit on internal control of Q1 in 2023. 2. Explanation of key audit matters 3. Commutation with key governance unit 4. CPAs explained the questions raised by the Audit Committee. 5.Independence ofCPAs
2023.08.03 Audit Committee	Independent Director：Wei-Min Sheng、Hsien-He Sheng、Wei-Cheng Wang、En-Te Hsu、 Chun-Hsin Tsou Auditor：Tien-Yi Li、Chien-Hung Chou	1. The report on the audit result of the Company’s consolidated a financial statements and audit on internal control of Q2 in 2023. 2. Explanation of key audit matters 3. Commutation with key governance unit 4. CPAs explained the questions raised by the Audit Committee. 5.Independence ofCPAs
2023.11.02 Audit Committee	Independent Director：Wei-Min Sheng、Hsien-He Sheng、Wei-Cheng Wang、En-Te Hsu、 Chun-Hsin Tsou Auditor：Tien-Yi Li	1. The report on the audit result of the Company’s consolidated a financial statements and audit on internal control of Q3 in 2023. 2. Explanation of key audit matters 3. Commutation with key governance unit 4. CPAs explained the questions raised by the Audit Committee. 5. Referred to Audit Quality Indicators (AQIs),independence and competence of the CPAs

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3.3.3 Implementation of corporate governance, the variances from the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons

anies,and the reasons
Assessment Item			Implementation Status	Variances from the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, and the reasons
	Yes	No	Summary
(1) Does the Company follow “Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies” to establish and disclose its corporate governance principles?	~~✓~~		The Company has established the “Corporate Governance Best Practice Principles” to regulate the aspects of protecting shareholders’ interests, enhancing the functions of the board, respecting the stakeholders’ interests, and improving information transparency. For the Company’s Corporate Governance Best Practice Principles, please check at MOPS and the official website.	No material variance
(2) Shareholding Structure & Shareholders’ Rights
a. Does Company have Internal Operation Procedures for handling shareholders’ suggestions, concerns, disputes and litigation matters. If yes, has these procedures been implemented accordingly?	~~✓~~		The Company has the following channels to ensure timely and fair disclosure of information that may affect shareholders' decision-making. 1. Spokesperson and acting spokesperson. 2. Investor’s mailbox: IR@Ennostar.com. 3. Channels including the Company's website to handle shareholders’ suggestions or disputes.	No material variance
b. Does Company possess a list of major shareholders and beneficial owners of these major shareholders?	~~✓~~		The professional shareholder service agent would be responsible for handling it, and controlling the information about shares held by insiders according to the information about changes of insiders’equity on a monthly basis.	No material variance
c. Has the Company built and executed a risk management system and “firewall” between the Company and its affiliates?	~~✓~~		The powers and responsibilities between the Company and its affiliates are clear. In addition to the “Operating Procedures for Transactions with Related Parties and Group Companies,” the reinvestments and related matters are handled by complying with the “Handling Procedures for the Acquisition or Disposal of Assets,” the internal control system, and relevant laws and regulations, to grasp the financial and operational information all the time. In addition, for the concurrent positions and compete conducts of directors and managerial officers, the shareholders’ meeting and the Board are requested to lift the non-compete restrictions for them.	No material variance
d. Has the Company established internal regulations to prohibit the insiders from trading securities with the information not disclosed to the market?	~~✓~~		The Company established the operating procedure for prevention of insider trading. The subjects referred to therein include but are not limited to insiders, including their related parties, persons who forfeit the identity of insider for less than 6 months, and persons who access the information from said persons. Company personnel are required to exercise due diligence and act in good faith during the performance of their duties. Confidentiality agreements should be signed for major events. They must not divulge any material inside	No material variance

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Assessment Item			Implementation Status	Variances from the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, and the reasons
	Yes	No	Summary
			information to other parties or profit from non-public information. The Company also requires employees to undergo education and training at various times. At the time of publication, the Company has received no complaints relating to the aforementioned matters and there were no incidents of insider trading in violation of Article 157 of the Securities and Exchange Act. The Company establishes the “Corporate Governance Best- Practice Principles” stipulating that the directors are not allowed to trade the Company’s shares during the lock-up period of 30 days prior to the announcement of the annual financial report, and 15 days prior to the announcement of the quarterly financial report. Before such lock-up periods start, the board members are reminded again to prevent them from erroneously violating the requirement. The Board members have been communicated and notified by mail on January 19, April 14, July 14, and October 13, 2023, and all Board members have complied with the Company’s internal control requirements, as they did not trade the Company’s securities during said lock-up period.
(3)Composition and Responsibilities of the Board of Directors
a. Has the Board of Directors formulated and implemented a diversity policy regarding the composition of its members, with concrete management targets?	~~✓~~		Please refer to page 18-20 of the annual report	No material variance
b. Other than the Remuneration Committee and the Audit Committee that are required by law, does the Company plan to set up other Board committees?	~~✓~~		Based on the fact that international investors and the industry chain are paying more attention to issues related to the environment, society and governance, in order to enhance and implement the Company’s strong emphasis on corporate and economically sustainable development, the ESG Corporate Sustainability Committee has been established under the Board of Directors in 2021 as a functional committee, which consists of two independent directors as members. In 2024, the Company demonstrated its decision to value the corporate sustainability and risk management, and changed the ESG Committee into the Corporate Sustainability and Risk Management Committee. In 2023, the Corporate Governance and Nomination Committee was established to continue the pursuit of better corporate governance.	No material variance

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Assessment Item			Implementation Status	Variances from the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, and the reasons
	Yes	No	Summary
c. Has the Company established regulations governing board performance evaluation and the method of evaluation? Are performance evaluations conducted every year with the outcomes of the performance evaluation reported to the Board of Directors and used as a reference in deciding the remuneration of individual directors and their nomination for re- appointment?	~~✓~~		The board performance evaluation was completed before the end of December 2023, and reported to the board of directors in the first quarter of 2024. At the end of 2022, an external independent institution was engaged to conduct the external evaluation on the 1st Board of Directors. The evaluation on the 2nd Board of Directors is scheduled to be conducted in 2025. For relevant contents, please refer to the annual report – Implementation of the Evaluation on the Board of Directors.	No material variance
d. Does the Company regularly evaluate its external auditors’ independence?	~~✓~~		The Company assesses the independence and competency of attesting accountants once a year on its own, and appointed two attesting accountants for their independence and competency, as well as the main contents of services and compensation for 2024; such were resolved by the Audit Committee on November 2, 2023 and the board of directors on November 3, 2023. The evaluation procedure for independence and eligibility is summarized as following: 1、 The CPA has no direct or indirect financial interest relationship with the Company. 2、 The CPA has no financing or guarantee relationship with the Company or the Company’s directors. 3、 The CPA has no close business relationship and potential employment relationship with the Company. 4、 The CPA and its audit team members do not hold, or didn’t hold in the most recent two years, the position as director or managerial officer of the Company or any position that has significant influence on the audit. 5、 The CPA doesn’t provide any non-auditing services that might affect the audit directly. 6、 The CPA doesn’t act as a broker of the stock or other securities issued by the Company. 7、 The CPA doesn’t act as the Company’s advocate, or settle the dispute between the Company and a third party on behalf of the Company. 8、 The CPA has no kinship relationship with any of the Company’s directors or managerial officers, or any persons who hold the position that might affect the audit materially.	No material variance

39

Assessment Item			Implementation Status	Variances from the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, and the reasons
	Yes	No	Summary
			9、 Obtained/ Referred to the Audit Quality Indicators (AQIs)
(4) If a TWSE/TPEx listed company, is there an adequate number of corporate governance personnel, and a chief corporate governance officer appointed in charge of corporate governance affairs (including but not limited to furnishing information required for business execution by directors and supervisors, assisting directors and supervisors with legal compliance, handling matters relating to board meetings and shareholders meetings in accordance with the law, and producing minutes of boarding meetings and shareholders meetings)?	~~✓~~		The Company’s Board approved the appointment of Vice President, Mr. Po-Yi Chang to serve as the Corporate Governance Officer, to take charge of the supervision and planning of corporate governance. His qualification meets the requirements of Section 1 of Article 3-1 of the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies. While the Corporate Governance Officer is concurrently served by the Chief Finance Officer, he can effectively implement and maintain independence when performing his own duties and concurrent duties, and there is no conflict of interest or violation of the internal control system.Handle matters related to the board meetings and shareholders' meetings pursuant to laws, and assist the Company to comply with the relevant laws and regulations relevant to the board of directors and shareholders' meetings. The scope is described as below: 1、 Taking the meeting minutes of board meeting and shareholders meeting. 2、 Assisting the directors in onboarding and continuing education. 3、 Providing the directors with the information relating to perform the duties. 4、 Assisting the directors to comply with the law and regulation. 5、 Report to the Board about the results of the review on whether the qualifications of independent directors comply with relevant laws and regulations at the time of nomination, election and during their office. 6、 Handle matters related to the change of directors. 7、 Report to the Audit Committee and the board of directors on the operation of corporate governance. To assist in reminding directors when they execute the business or approving a formal resolution during Board of Directors meeting, they should comply with the laws and regulations and related suggestions. Responsible for reviewing the important information releasing issues over vital resolutions of the board of directors meeting and ensure the lawfulness and correctness of the published contents in a timely manner after the board of directors meeting to protect investors' right on equivalence of transaction information. He is continuing education and training about corporate governance. For details, please refer to continuing education and trainings on corporate governance for managers and audit officers in the annual report.	No material variance
(5) Has the Company established a means of communicating with its Stakeholders	~~✓~~		The Company’s official website has “Stakeholder Interaction” in place to detail the communication channels and performance for the eight key stakeholders:	No material variance

40

Assessment Item			Implementation Status	Variances from the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, and the reasons
	Yes	No	Summary
(including but not limited to shareholders, employees, customers and suppliers) and created a Stakeholders Section on its Company website? Does the Company respond to stakeholders’ questions on corporate responsibilities?			shareholders/investors, governmental competent authorities, media, employees, insurers, customers, suppliers/contractors, and banks. The Company communicates with stakeholders through various channels, to understand the needs of stakeholders and their expectations for the Company. Other than the immediate responses, these also serve as a reference for the Company to promote sustainable development plans. Meanwhile, the Company reports the communications with various stakeholders at the Board of Directors meeting regularly each year and updates the news on the Company’s official website.
(6) Has the Company appointed a professional registrar for its Shareholders’ Meetings?	~~✓~~		The professional shareholder service agent, Horizon Securities, was appointed to handle the affairs related to shareholders’ meetings on behalf of the Company. Shareholder Service Agency department of Horizon Securities is also commissioned to tally and verify the proxies on behalf of the Company.	No material variance
(7) Information Disclosure
a. Has the Company established a corporate website to disclose information regarding its financials, business and corporate governance status?	~~✓~~		The Company has set up information sections for investors, product introductions and technology R&D at the official websites of the Company and its subsidiaries, to disclose information on consolidated financial statement, business and corporate governance from time to time.	No material variance
b. Does the Company use other information disclosure channels (e.g. maintaining an English-language website, designating staff to handle information collection and disclosure, appointing spokespersons, webcasting investors conference etc.)?	~~✓~~		⚫ The Company has set up the English version of its homepage. ⚫ Contact information including the spokesman system IR@Ennostar.com ⚫ Each quarter, the disclosed information related to finance and business is explained in the investor conference. Search the information about investor conferences Inquiry the official website for inquiries: investor service section/ financial information/ investor conference report	No material variance
c. Did the Company publish and report its annual financial report within two months after the end of a financial year, and publish and report its financial reports for the first, second, and third quarters as well as the operating status for each month before the specified deadline?	~~✓~~		The Company has completed its self-prepared 2023 financial report in February 2024, signed or sealed by the chairman, managerial officer and accounting officer, and submitted to and approved by the Audit Committee and the Board in February 2024. The announcement and report was completed early at the end of February. The financial reports for the first, second, and third quarters and the monthly operations are also uploaded to the MOPS in advance within the prescribed deadlines.	No material variance
(8) Has the Company disclosed other	~~✓~~		⚫ Employee’s interests and rights & employee care: Please see the section	No material variance

41

Assessment Item	Implementation Status	Implementation Status	Implementation Status	Variances from the Corporate Governance Best- Practice Principles for TWSE/TPEx Listed Companies, and the reasons
	Yes	No	Summary
information to 9 facilitate a better understanding of its corporate governance practices (e.g. including but not limited to employee rights, employee wellness, investor relations, supplier relations, rights of stakeholders, directors’ training records, the implementation of risk management policies and risk evaluation measures, the implementation of customer relations policies, and purchasing insurance for directors)?			about management-labor relationship in the annual report. ⚫ The Company has established the Investor Relations department, and disclose the contact information thereof on the Company’s official website. The department is dedicated to processing shareholders’ suggestions and answering investors’ questions, while convening quarterly investor conferences to explain the disclosed financial and business information externally. ⚫ Worked with customers to implement the evaluation of code of conducts under the Responsible Business Alliance (RBA), to ensure that the Company and the plants follow the highest social, environmental and ethical standards, and employees and suppliers’ employees are treated well. ⚫ The professional division of work among the subsidiaries is in place. For the issues of product health and safety, marketing communication, customer satisfaction, regulatory compliance and customer privacy, customers may communicate via questionnaires, customer service emails, customer satisfaction surveys and the Company’s official website, among other communication channels. The personnel in the Group visit customers from time to time, or participate in related product exhibitions, to directly understand customers and market development direction. ⚫ For information on directors’ continuing education, please refer to the section about directors’ continuing education in the annual report and the MOPS. ⚫ The implementation of risk management policies and risk measurement standards for 2023 has been announced in the reports of the Corporate Sustainability and Risk Management Committee dated February 22, 2024 and the Board of Directors dated February 23, 2024. ⚫ Please refer to Page 51 of the annual report for the Company’s purchase of liability insurance for directors.
(9) Explain the the improvement status for the result of Corporate Governance Evaluation announced by Taiwan Stock Exchange, and the priority of enhancement and measures for these not yet improved: The Company was ranked in the top 5% of the 9th “Corporate Governance Evaluation,” which is a high recognition of the excellent corporate governance of the Company. In August 2023, the Company established the functional committee, “Corporate Governance and Nomination Committee,” under the Board of Directors, and formulated the “Organization Rules of Corporate Governance and Nomination Committee” to continue the pursuit of better corporate governance.

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3.3.4 Composition, duties, and operation of the Remuneration Committee

1. Information of member (professional qualifications and experience)

Identity	Condition Name	Professional knowledge and skills	Professional knowledge and skills	Major experience	Major experience	Independence	Number other public companies where a member of the Remuneration Committee served concurrently
		Law Accounting Finance	Industry Marketi ng Technol ogy	Professi onal Skill	Industry Experien ce
Convener and Independent Director	Hsien-He Sheng	✓	✓	✓	✓	Please refer to Page 13	0
Independent Director	Wei-Chen Wang	✓		✓			3
Independent Director	En-Te Hsu	✓		✓			2

Note: The members of the Remuneration Committee are all independent directors. For their “professional qualifications and experience” and “independence,” please refer to pages 13 of the annual report.

2. Duties

The members of the Remuneration Committee shall be appointed after being nominated by the chairman and by the resolution of the board of directors, and the number of members shall not be fewer than three. Please refer to the Company's website for the Remuneration Committee Charter.

In order to establish a remuneration system linked to performance, and faithfully perform the functions and powers entrusted by the board of directors, the Committee regularly proposes remuneration system programs or suggestions to the board of directors for discussion.

• (1) Periodically review the Remuneration Committee and suggest amendments.

• (2) Prescribe and periodically review the performance review and remuneration policy, system, standards, and structure for directors, supervisors and managerial officers.

• A. Periodically evaluate and prescribe the remuneration of directors, supervisors, and managerial officers by the Remuneration Committee

• B. The salaries and remunerations of managerial officers other than the president shall be proposed by the president to the Remuneration Committee every year.

• (3) Regularly evaluate the achievement of performance objectives by the Company’s directors, supervisors and managerial officers, and recommend the content and amount of their individual remunerations. The said salaries and remuneration include cash compensations, share subscription warrants, dividends, retirement benefits or severance pay, various allowances and other measures with substantial incentives.

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1. Implementation Status

2. (1) There are currently three members of the Remuneration Committee of the Company, all of them are independent directors.

3. (2) The term of the current committee members is from May 31, 2023 to May 30, 2026 (the expiry date is same as the expiry date of directors’ term of office), and in 2023, the Remuneration Committee held three 、 、

4. meetings(A).(meeting dates: 2/23 8/3 11/3) The members’ attendance is as following:

Title	Name	Attendance in person (B)	Attendance by Proxy	Actual attendance rate(B/A)	Remarks
Convener	Hsien-He Sheng	3	0
Member	Wei-Chen Wang	2	0
Member	En-Te Hsu	2	0
Convener	Sheng-Tai Weng	1	0		Resigned on 2023/5/31
Member	Wei-Min Sheng	1	0		Resigned on 2023/5/31
Member	Ji-Yen Liang	1	0		Resigned on 2023/5/31

• (3) Important resolutions and implementation

Term/Meeting Date 1-12 2023.02.23 2-1 2023.08.03 2-2 2023.11.03	Proposal	Members' opinions and Remuneration Committee resolutions	The company's handling of the Committee's opinions
	⚫ Recommendations for 2023 budget of raise ⚫ Suggestion for 2023 managerial officers’ raise ⚫ Recommendation regarding the number of shares for the managerial officers of the Company to obtain the employee stock warrants issued by Hexawave.	All members affirmed their approval, and it was approved by the Remuneration Committee.	The board of directors approved to pass the proposal as it was.
	⚫ Recommendations for 2022 distribution of employee remunerations to managerial officers (profit-sharing) ⚫ Salary proposal for the new President. ⚫ Salary proposal for the new managerial officers.
	⚫ Amendment to the Regulations Governing the Distribution of Fixed and Variable Remunerations to Directors ⚫ Recommendations for 2024 incentive measures

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The
Members'
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opinions and
Term/Meeting handling of
Proposal Remuneration
Date the
Committee
Committee's
resolutions
opinions
⚫ Recommendations for
percentage of
appropriating the 2024
employee and director
remunerations
⚫ Recommendations on
long-term incentive
plan (LTI) for
managerial officers
⚫ Recommendations for
distributing 2023
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Other matters to be recorded:

  - ⚫ Where the board of directors does not adopt or amend the recommendations of the Remuneration Committee: None.

  - ⚫ For the resolutions adopted by the Remuneration Committee, where any member has objections or qualified opinion, with records or written statements: None.

  - ⚫ The Company refers to the market salary level and economic trend every year, and adjusts the salary of employees based on the Company's operational performance and personal performance. In the past, the salary adjustment was conducted in a way higher than the market level, aiming to narrow the gap between market and benchmark. Provided the gap is narrowed now, so the annual salary adjustment shall be based on the market level, and variable bonus are accounted, as a tool to motivate and reward; in addition, when employees are promoted, their salaries also adjusted immediately as the encouragement to talents.

• 3.3.5 Composition, duties, and operation of the Corporate Governance & Nominating Committee

• Information of member (professional qualifications and experience)

Identity	Condition Name	Professional knowledge and skills	Professional knowledge and skills	Major experience	Major experience
		Law Accounting Finance	Industry Marketing Technology	Professional Skill	Industry Experience
Convener and Chairman	Shuang-Lang Peng		✓	✓	✓
Member and Independent Director	Wei-Min Sheng	✓	✓	✓
Member and Independent Director	Hsien-He Sheng	✓	✓	✓	✓
Member and Independent Director	Wei-Chen Wang	✓		✓
Member and Independent Director	En-Te Hsu	✓		✓
Member and Independent Director	Chun-Hsin Tsou	✓		✓

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2. Duties

The Corporate Governance and Nomination Committee shall be composed of at least three directors nominated by the Board of Directors, in which more than half of the independent directors shall participate. Please refer to the Company’s website for the Organization Rules of the Corporate Governance and Nomination Committee.

With the authorization from the Board of Directors, the Committee shall perform the following functions and powers with due diligence as a good administrator, and submit the recommendations to the Board of Directors for discussion:

• (1) Formulate the professional knowledge, technology, experience, gender and other diversity and independence standards required for the Board members, and identify, review and nominate director candidates accordingly.

• (2) Construct and develop the organizational structure of the Board of Directors and various committees, conduct performance evaluations on the Board of Directors, committees and directors, and evaluate the independence of independent directors.

• (3) The continuing education programs for directors are established and regularly reviewed.

• (4) Review the succession plan for senior managers as the president (or equivalent) or above.

• (5) Provide new directors with appropriate orientation instructions to enable the new directors to understand their responsibilities and get familiar with the Company’s operation and environment.

• (6) The Company’s Corporate Governance Best-Practice Principles are established.

• (7) Other matters as directed by the Board of Directors.

• Implementation Status

• (1) There are currently six members of the Corporate Governance & Nominating Committee of the Company, all of them are independent directors and Chairman.

• (2) The term of the current committee members is from August 3, 2023 to May 30, 2026 (the expiry date is same as the expiry date of directors’ term of office), and in 2023, the Corporate Governance & Nominating Committee held one meeting (A).(meeting dates: 11/3) The members’ attendance is as following:

Title	Name	Attendance in person (B)	Attendance by Proxy	Actual attendance rate (B/A)	Remarks
Convener and Chairman	Shuang-Lang Peng	1	0	100.0%
Member and Independent Director	Wei-Min Sheng	1	0	100.0%
Member and Independent Director	Hsien-He Sheng	1	0	100.0%
Member and Independent Director	Wei-Chen Wang	1	0	100.0%

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Title	Name	Attendance in person (B)	Attendance by Proxy	Actual attendance rate (B/A)	Remarks
Member and Independent Director	En-Te Hsu	1	0	100.0%
Member and Independent Director	Chun-Hsin Tsou	1	0	100.0%
Convener and Chairman	Shuang-Lang Peng	1	0	100.0%

(3) Important resolutions and implementation

Term/Meeting Date 1-1 2023.11.03	Proposal	Members' opinions and Remuneration Committee resolutions	The company's handling of the Committee's opinions
	⚫ Amendment to the regulations governing performance evaluation on the Board of Directors and various functional committees. ⚫ Questionnaire design for self- evaluation on performance of the Board of Directors and various functional committees.	All members expressed their approval in favor, and the Corporate Governance and Nomination Committee approved the motion.	Approved by the Board of Directors as it was.

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3.3.6 Differences in promoting sustainable development implementation from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor

Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
(1) Does the Company have a governance structure for sustainability development and a dedicated (or ad-hoc) sustainable development unit with Board of Directors authorization for senior management, which is reviewed by the Board of Directors?	✓		Ennostar insists on contributing to society. In 2021, the “ESG Corporate Sustainability Committee” was established as the highest governance body for the Company to promote sustainable development operations. It coordinates and plans the Group’s ESG policy and sustainable development roadmap, responds to the United Nation’s sustainable development goals (SDGs), and identifies the ESG-related risks and opportunities to determine relevant investment strategies. Meanwhile, it supervises the setting and achievement of various ESG performances. At the same time, a dedicated unit, the Sustainable Development Department, is established to take charge of the operation of the committee and the promotion of the matters related to the Group’s sustainable development. To demonstrate the Company’s decision to value the corporate sustainability and risk management, the Company renamed the “ESG Committee” into the “Corporate Sustainability and Risk Management Committee” in February 2024. There are four levels to the ESG Corporate Sustainability Committee. The first level is the Board of Directors, responsible for deciding the Group’s ESG materiality topics and evaluating ESG performance. The second level is the ESG Committee, composed of the Group’s chairperson and 2 independent directors, responsible for identifying ESG risks and opportunities, deciding the Group’s ESG strategic directions and supervise ESGperformance. The next level is the ESG	No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			Committee (task force), composed of the Group’s corporate development office’s VP, Group finance VP, IT Officer, HR Head of major subsidiaries, and ESG vice chair and executive secretary of major subsidiaries, responsible for establishing the Group’s ESG short medium and long term goals and supervising ESG KPI performance. The fourth level is internal ESG committee of major subsidiaries. In driving the Group’s sustainable development, each level of the ESG corporate sustainability committee will hold a meeting once a month with the major subsidiaries and ESG Committee (task force), supervising the state of ESG plans promotion. The ESG committee will hold a meeting once every quarter to compile ESG outcomes reporting to the Board once every half a year. In 2022, the Company established the eight major ESG task forces of the Group, namely, the innovation technology team, sustainable manufacturing team, sustainable energy team, risk governance team, social influence team, stakeholder team, information security team, and sustainable value chain team, to integrate cross-company resources of the Group, and connect to the cooperative value chain, seeking to accelerate the implementation of the Group’s ESG strategic blueprint and expanding its social influence. For more details, please refer to of the ESG report.
(2) Does the Company follow materiality principle to conduct risk assessment for environmental, social and corporate governance topics related to company operation, and establish risk	✓		The Company established related risk management strategies and targets based on the 3 aspects of materiality - economy, environment, and society. It focuses its efforts in fulfilling corporate governance, developsustainable environment,maintain social charity,and enhance	No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
management related policy or strategy?			information disclosure. These are upheld through stakeholders communications, compiling key topics of concern, establish management directions, department representatives participating in the promotion and realizing them, the three key groups reporting on the status to the ESG Committee (task force), the executive secretary to report to the ESG Corporate Sustainability Committee on a regular basis on the operation outcomes of its review. All of these would then be reported to the Board of Directors. The Company emphasizes the ESG expectations of stakeholders for the Company. In 2021, the first Sustainability Report of Ennostar Group was released. The senior executives of the Group and members of the ESG Committee were convened to identify key stakeholders. The evaluation results revealed eight key stakeholders. Before preparing the sustainability report every year, the ESG issue questionnaires are to be distributed to the eight key stakeholders. The scope of distribution covers the important subsidiaries of the Group in Taiwan and China. If any issue is identified as concerned by the stakeholders with great impact on the Company’s operation, it is deemed a major issue. The Company also discloses the information of investor conferences, customer satisfaction surveys, mailboxes, latest news, social media platforms, sustainability reports and other information through the official website from time to time, to maintain smooth communication with stakeholders and continue to disclose the Company’s sustainable performance transparently. Ennostar Groupfocuses on the technologyresearch and development

50

Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			and production of compound semiconductors. The Group deploys the industrial cooperation strategy from upstream to downstream for the entire industry, integrating customized services and solutions from epitaxy, grains, packaging, modules, and customer supply chains. To identify the challenges that may arise for Ennostar Group in the future, early and systematically, and respond appropriately to improve corporate resilience, the enterprise risk management is introduced. Upon the approval and confirmation of the highest risk governance unit, the Board of Directors, on November 3, 2022, the follow-up risk scenario analysis and risk assessment for implementation, response strategies and action plans were conducted. Meanwhile, the construction of Ennostar Risk Knowledge Database was completed in 2023. The measurement standards and methods of risk assessment start from the bottom, and the risk management is incorporated into the business strategies to reduce the risks of these issues to which the Group is exposed. Through the introduction of ERM, the Company’s risk management policies and procedures are adjusted and optimized in a timely manner, and the annual risk management implementation results are reported, to gradually form a corporate governance culture through the guidance and supervision of the Board. For issues concerned by stakeholders in 2023, management strategies formulated by the Company, the risk management policy, objectives and implementation, please refer to the ESG Report of the Company for details.

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
(3)Environmental topic
a. Has the Company set an environmental management system designed to industry characteristics?	✓		Since 2021, the Company has promoted the assessment of corporate climate change risks and opportunities by complying with the climate- related financial disclosure framework, TCFD. The Company has comprehensively conducted the ISO system verification and promoted various internal carbon reduction strategies with systematic and scientific management approaches. In 2023, the three major subsidiaries of Ennostar Group, Epistar, Lextar, and Unikorn, all passed ISO 14064-1. Short-, medium-, and long-term strategies have been established to keep aligned with the international net-zero trend. In the future, we look forward to working with the supply chain to build a low- carbon value chain and move toward the goal of net-zero together to implement corporate sustainability. Regarding the Group’s environmental management system and performance, please refer to the Company’s ESG Report.	No material variance

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Promoting item				State of implementation	State of implementation	State of implementation	State of implementation	State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No		Summary description
				The company and three major entities have obtained EHS system and quality system verification for maintaining: System certification/ verification Ennostar EPISTAR Lextar Unikorn ISO 14001 Environmental management system verification NA V V V ISO 14064-1 Organization quantification and reporting of greenhousegases V V V V ISO 45001 Occupational Health and Safety (OH&S) NA V V V CNS 45001 Taiwan Occupational Safety and Health Management System (TOSHMS) NA V V
				System certification/ verification	Ennostar	EPISTAR	Lextar	Unikorn
				ISO 14001 Environmental management system verification	NA	V	V	V
				ISO 14064-1 Organization quantification and reporting of greenhousegases	V	V	V	V
				ISO 45001 Occupational Health and Safety (OH&S)	NA	V	V	V
				CNS 45001 Taiwan Occupational Safety and Health Management System (TOSHMS)	NA	V		V
b. Is the Company committed to improving resource efficiency and to the use of renewable materials with low environmental impact?	✓			To support the net-zero emissions path planning of the government and exert corporate influence, Ennostar Group will successively purchase green power contracts or related green power certificates, formulate the Group’s green power policy, and plan to achieve the RE100 objective in non-production bases by 2030, and the objective of achieving green power RE100 for the whole Group by 2050. From 2023 to 2027,the focuses are on solar energy/onshore wind					No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			power, and from 2027 to 2050, solar energy/onshore wind power/offshore wind power or other renewable energies will be adopted. Through complete and planned green power procurement planning, Ennostar Group will be led to the goal of green power RE100. The implementation of each year is updated in the ESG report released annuallyto enhance information transparency.
c. Does the Company evaluate current and future climate change potential risks and opportunities and take measures related to climate related topics?	✓		To continuously implement a friendly environment, the Group continues to conduct the energy-saving and carbon-reduction-related management to lower cost risks, and is committed to providing customers with environmentally friendly and energy-saving products by combining the core business capabilities with the introduction and R&D of green technologies, to improve the product competitiveness on sustainability issues. In line with international trends, the Company actively responds to climate change and reduces greenhouse gas emissions; the renewable energies are planned to be built to move towards natural resource management and sustainable management. The implementation of each year is updated in the ESG report released annually to enhance information transparency. In face of climate change and radical changes of ecological environment, the Company as a member of the global village is preparing for actions. Environmental protection is a duty. As reported in the United Nations report, Taiwan belongs to the high risk group in climate change, the impacts of global warming lead to major concerns of the interchange between torrential rain and severe droughts. Even though the totalprecipitation has not been lesser,extreme rains and	No material variance

54

Promoting item				State of implementation	State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No		Summary description
				drought hazards are causing the water scarcity crisis in Taiwan to take place every year. To lower corporate operations risks from climate change, enhancing product competitiveness, the Company’s responses are: Flood prevention To avoid torrential rains from climate change which will affect the plant production, the flood control gates have been set up at the entrance of the lane where it is easy for water to seep through and at important engine rooms to reduce losses from disasters. Established the flood prevention plans and operation standards. Disaster prevention drills are conducted each year on a regular basis, such as flood control gates flood prevention drills, and factory drills to set up flood controlpumps. Increase water recycling volume The pure water that is used to wash the chip during the manufacturing process, part of it can be collected for reuse increasing the rate of reuse. Water utilization plan during water shortage To avoid the restricted water measures of the Taiwan Water Corporation (TWC) from affecting part of or all of the manufacturing plants, the Company will activate the water carts to supplement water when the TWC inform of reducing pressure or suspending water and at the same time the water level of the storage tanks at the factory sites are lower than the safety standard, for non-production water restriction measures. According to the drought restricted water - emergency response plan of EPISTAR, the plan is divided into emergency observations, emergency response, crisis management, operations recovery and so on phases for the implementation of different course ofactiontolowertheimpacts to the customers. Enhancing water shortage crisis drill Implements the water shortage crisis drill on a regular basis each year, and proceeds with the factory area industry water support drill. Energy saving and carbon reduction Implements the electricity saving, water saving plans each year, contributing to protecting the earthand environment.
				Flood prevention	To avoid torrential rains from climate change which will affect the plant production, the flood control gates have been set up at the entrance of the lane where it is easy for water to seep through and at important engine rooms to reduce losses from disasters. Established the flood prevention plans and operation standards. Disaster prevention drills are conducted each year on a regular basis, such as flood control gates flood prevention drills, and factory drills to set up flood controlpumps.
				Increase water recycling volume	The pure water that is used to wash the chip during the manufacturing process, part of it can be collected for reuse increasing the rate of reuse.
				Water utilization plan during water shortage	To avoid the restricted water measures of the Taiwan Water Corporation (TWC) from affecting part of or all of the manufacturing plants, the Company will activate the water carts to supplement water when the TWC inform of reducing pressure or suspending water and at the same time the water level of the storage tanks at the factory sites are lower than the safety standard, for non-production water restriction measures. According to the drought restricted water - emergency response plan of EPISTAR, the plan is divided into emergency observations, emergency response, crisis management, operations recovery and so on phases for the implementation of different course ofactiontolowertheimpacts to the customers.
				Enhancing water shortage crisis drill	Implements the water shortage crisis drill on a regular basis each year, and proceeds with the factory area industry water support drill.
				Energy saving and carbon reduction	Implements the electricity saving, water saving plans each year, contributing to protecting the earthand environment.

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
d. Does the Company collect data for greenhouse gas emissions, water usage and waste quantity in the past two years, and set greenhouse gas emissions reduction, water usage reduction and other waste management policies?	✓		Committed to environmental sustainability, expecting to move towards net zero carbon emissions together with the industrial value chain, and continue to complete the CDP carbon disclosure project every year ⚫ GHG Emissions in Recent Two Years Unit: Metric ton CO₂equivalent year 2022 2023 GHG Emissions 349,804.65 288,009 ＊Including Taiwan factory and mainland China factory. ＊The data in the table are preliminary results calculated by Ennostar and is being verified by a third party. For the verified data , please refer to the ESG report. ⚫ Water Usage in Recent Two Years Unit : Million Liters Year category 2022 2023 Total Water withdrawal 3,965.82 3,561.17 Total recovered and reused water 2,346.08 2,091.90 ＊Including Taiwan factory and mainland China factory.	No material variance

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Promoting item				State of implementation	State of implementation		Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No		Summary description
			⚫	Waste Quantity in Recent Two Years
				Year category	2022	2023
				Total WasteQuantity	7370.17	6,556.27
(4)Social topic
a.Does the Company set policies and procedures in compliance with regulations and internationally recognized human rights principles?	✓		Respecting human rights and creating a dignified working environment are the foundations of corporate sustainable operations. The Company and its subsidiaries are committed to pursuing compliance with the “United Nations Global Compact,” “Universal Declaration of Human Rights,” “United Nations Guiding Principles on Business and Human Rights,” “OECD Guidelines for Multinational Enterprises,” “Social Accountability International (SAI),” “Responsible Business Alliance (RBA),” relevant labor laws and international human rights standards, to formulate human rights management regulations to implement human rights protection in all operating activities, and comply with applicable laws and relevant international labor standards.				No material variance
b.Has the Company established appropriately managed employee welfare measures (include salary and compensation, leave and others), and link operational performance or achievements with employee salaryand	✓		The Company believes that the first step in realizing corporate social responsibility is to respect and take care of employees. Every employee is the most important asset of the Company. The Company values the work environment, career path development, education training and health and wellbeingof its employees. And values employee treatment				No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
compensation?			and benefits. The Company regularly participates in industry salary survey and regularly reviews the linkage of the salary and benefits measures with the market, designing a salary and benefits system that is of competitiveness and motivation. If the Company makes profits for the year, it will distribute 0.1% to 15% as the employee remuneration. The employee salary is based on one’s academic background, professional experiences, and individual performance. There will be no differential treatment based on employee gender. The starting salary of newly employed personnel will not be any different, regardless of race, religion, political position, gender, marital status or union affiliation. For the detailed employee welfare measures of the Group, please refer to the company's official website and ESG report. Education and training of human rights and ethical management are implemented as below: Conduct human rights due diligence in accordance with the Group’s human rights policy and Regulations Governing Integrity and Ethical Conduct; conduct risk assessments through the RBA Self-Assessment Questionnaire (SAQ) in accordance with the RBA Code of Conduct; and monitor and manage the implementation of mitigation or prevention measures based on risk issues; and report the implementation of the human rights policy and ethical management policy of the year to the Board of Directors on November 3, 2023. The implementation of education and training in 2023 is as follows: 1. Theme of the course: Annual retraining on integrity, ethical conduct and human rightprotectionpolicymanagement.

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			2. The total number of trainees was 4,879, and the total number of training hours were 4,879 hours. 3. Upon completion of the course training, trainees shall pass the course test with the full mark, 100 scores. Those who fail the test must retake the exam. The Company also provides an effective and appropriate grievance mechanism for matters that endanger labor rights, and responds to employees’ grievances appropriately to ensure an equal and transparentgrievanceprocess.
c. Does the Company provide employees with a safe and healthy working environment, with regular safety and health training?	✓		Occupational health anagement: There is a health service center in place in each plant of the Company, to maintain th physical health of employees in an all-round way, including regular health checkups, provision of new health knowledge and medical consultation. Meanwhile, the nutrition provided by the staff canteen is in check to protect the health of the employees. Healthcare: The Group has a “Health Center” in place. In addition to the functions of the general medical room, it also actively plans various activities like free health checks, medical consultation seminar, physical fitness, smoking cessation, and weight loss. Hazard identification and risk assessment The safety of employees at work is important to Ennostar. Abnormal incidents are reported immediatelyand an emergencyresponse	No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			mechanism is activated to reduce personnel injuries and operational losses. After an incident, the Company works with the labor representatives to investigate the cause of the incident according to the “Incident Reporting and Investigation Procedures” established by Ennostar. By doing so, the root cause can be discovered with corrective and preventive measures taken. An investigation report is simultaneously reported to the safety committees of each plant. The results of horizontal investigations will be taken as the basis for improvement of each plant area to prevent the recurrence of similar incidents. The “Incident Reporting and Investigation Procedures” apply to all employees and contractors in each plant of the Group. The scope of reporting and investigation is limited to internal accidents and internal traffic accidents. Off-site accidents are only included in reporting and statistics. Companies of three major entities fulfills the Occupational Safety and Health Management System, OSHMS certification: 1. The Company complies with related domestic laws and regulations, and has obtain the OHSAS 18001 Occupational Safety and Health Management System certification, TOSHMS/CNS 15506 Taiwan Occupational Safety and Health Management System certification, providing employees a safe work environment. 2. The Companyhas in accordance with the legal requirements

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			conducted working environment monitoring and adjustments to the labor work venues. 3. The new employee orientation training and regular quarter training of branch factories includes the employee safety and health education unit. This covers occupational hazard prevention, road safety education, factory and residential safety awareness raising, individual case study. It is hoped that employees possess related safety and health knowledge and skills, ensuring a safe and healthy working environment for everyone. 4. The Company has established emergency response task force and response measures. Each year, will implement regular prevention trainings or drills to ensure employees safety knowledge and to lower losses from disaster and hazardous incidents; Various health activities are organized. Through health risk indicators to promote customized and risk control projects, continuing the promotion and expansion of health service and quality; In collaboration with Newmind EAP consultant Co., Ltd., promotes employee assistance service with confidential and diverse professional service to support employees in resolving work and life issues. No fire has occurred to the Group by the date of publication of the annual report. Ennostar has formulated an "Environmental Safety and Health Emergency Response Procedure", applying hierarchical control, and dividing the response organization into the headquarters and the factory organization. If an abnormal accident occurs,after the initial response is carried out on site. While the

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			follow-up response actions are still needed, it will be promptly notificated and activated the emergency mechanism with the goal of reducing personal injuries and operational losses. If the incident was out of control, the headquarters response organization will performe their own duties to deal with various emergency response situations.
d. Has the Company established effective career development training plans for its employees?	✓		For new employees and employees of various categories, the Group has established professional, general education, and management ability training plans, and provided various learning resources to meet the needs of employees’ career development. Meanwhile, quality and sustainability awareness courses are also made available. For other details on employee training, please refer to the section about labor– management relations in Chapter Five. Business Overview of the annual report.	No material variance
e. Does the Company’s product and service comply with related regulations and international rules for customers’ health and safety, privacy, sales, labelling and set policies to protect consumers’ or customers’ rights and consumer appeal procedures?	✓		The products produced and services provided by the Group comply with the relevant laws and regulations. Pursuant to the ISO 9001 quality management system and the internal management review procedures of IATF 16949 (please refer to the table below for the certifications passed by each company), effectiveness evaluations are conducted for the laws and regulations related to hazardous substances and hazardous substances free (HSF) requirements of customers, so that the products comply with relevant laws and regulations related to the prohibited and restricted environmental hazardous substances, and customers’ requirements for HSF control; third-partyverification units are engaged to verify products regularly	No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			to check the compliance of products with laws and regulations and satisfaction to customer requirements. To avoid the leakage of customer information or internal secrets, those who have business dealings with the company and involve the integrity and confidentiality of information assets, should first sign a confidentiality undertaking and non-disclosure agreement of customer data, to make them understand that the information obtained during the service in the Company is all considered as the Company’s property, not allowed to be used for other unauthorized purposes in order to maintain customers’privacy.
f. Does the Company set supplier management policy and request suppliers to comply with related standards on the topics of environmental, occupational safety and health or labor right, and their implementation status?	✓		In addition to regular meetings with customers to communicate needs, the Company also conducts annual customer satisfaction surveys for key customers of various products, collecting customers’ evaluations and recommendations for the Company’s products in five aspects: procurement, quality, research and development, product development, and customer service. Upon the completion of the investigation, the data will be compiled and reviewed, and submitted to the internal management meeting for report review. The senior management will resolve the guidelines for the adjustment to the Company’s operating strategy, and then the various responsible units will promote each improvement plan. The product production and services provided are in compliance with related laws and regulations. According to ISO 9001 Quality Management System and IATF 16949 Internal Management Review Procedure,eachyear the effective assessment is conducted for related	No material variance

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Promoting item			State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			hazardous substances legislations and customers’ hazardous substance free (HSF) to ensure products meets these requirements. Third party verification unit is also engaged on a regular basis for product certification to make sure the products are in compliance. The products produced by each branch factory 100% meets the international standards, RoHS and REACH international environmental protection legislations. The customers are free from worrying about their own health or safety being endangered from these products, and can feel secure that the Company will not bring about any negative influences to society or environment. Regarding the selection of supplier operation service, quality system, R&D capability, manufacturing, environmental management and labor rights (including prohibiting the use of child labor, eliminating all forms of forced labor) and ethical management, the Company conducts review of every aspect and produces an investigation report of the potential supplier (contractor), review of their Guarantee of Non-Use of Hazardous Substances, supplier/contractor Letter of Compliance with Corporate Social Responsibility, Quality Assurance Agreement, Procurement Agreement, Non-disclosure agreement, and so on. When the review results show compliance with the standards, they will be listed as qualified supplier list of the Company. Established supplier management procedures and supplier evaluation procedures. The procurement and quality management and related units will conduct regular (each year and each quarter) appraisal of their products, price, service and technology, delivery and restricted use of hazardous substances and more items. The evaluation results

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Promoting item	State of implementation	State of implementation	State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
			will be the basis of ENNOSTAR’s supplier risk management. Suppliers are divided into four rating levels for the supplier quality system assessment. If the audit assessment results for supplier show poor rating, the supplier management team will need to strengthen guidance and improvements to the supplier. ⚫EHS assessment of suppliers ⚫Assessment management of suppliers/contractors ⚫Health and safety, and construction management of contractors In 2023, a total of 208 suppliers were evaluated and none of them showed poor rating. More information on supplier management and implementation will be updated in the ESG report, please refer to it.
(5) Does the Company refer to international reporting rules or guidelines to publish Sustainability Report to disclose non-financial information of the Company?Has the assurance or opinion from third-party certifying institutions been obtained for the reports of the preceding paragraph?	✓		The Company is established on January 6, 2021. In order to raise the reliability of the report, an independent third party, the TÜV Rheinland, is engaged to verify the report for external guarantee of the information disclosed in the report. TÜV cites the Moderate Assurance of the AA1000 Assurance Standard developed by the global non-profit organization AccountAbility and the Moderate Assurance. The TÜV verification report is attached in the ESG report appendix (expected for release in end of August 2024).	No material variance
(6) If the Company has established ethical corporate governance policies based on Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation: The Company has formulated the “Sustainable Development Best Practice Principles,” regulating on the realization of corporate governance, developing sustainable environment, maintaining social charity. The information can be downloaded from the Company’s official website; Please refer to the Company website for our sustainable development strategies, state of implementation, and the ESG report released in end of August every year.

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	Promoting item	Promoting item	State of implementation	State of implementation	State of implementation	State of implementation	State of implementation	Differences from the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
			Yes	No	Summary description
	Work function
	Unit	Powers and responsibilities				Unit	Powers and responsibilities
	Board of Directors	⚫ Confirm the Group’s ESG Mission and Vision ⚫ Make decisions for significant proposals on ESG ⚫ Evaluate ESG performance				ESG Corporate sustainability Committee	⚫ Establish ESG mission, vision, policies, and targets ⚫ Identify ESG risks and opportunities, decide related investment strategies ⚫ Supervise ESG strategy planning and implementation ⚫ Monitor ESG performance and information disclosure
	ESG Committee (Task force)	⚫ Establish Group targets ⚫ Promote ESG plans ⚫ KPI performance presentation/follow-up ⚫ Convene regular meetings ⚫ Disclose information on the Group’s ESG performance				ESG of every subsidiary Committee	⚫ Set targets ⚫ Implement ESG related plans ⚫ KPI performance presentation/follow-up ⚫ Convene regular meetings ⚫ Compile contents for CSR report chapters of every company ⚫ Response to ESG requirements of customers

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3.3.7 Implementation of climate-related information among TWSE/TPEx listed companies

Implementation of climate-related information amongTWSE/TPEx	listed companies
Item	Status of implementation
1. Describe the monitoring and governance of climate-related risks and opportunities by the Board of Directors and the management.	The Company’s Corporate Sustainability and Risk Management Committee consists of the Chairman, independent directors, and senior officers of key subsidiaries (Epistar, Lextar, and Unikorn). It is a functional committee under the Board of Directors and holds regular meetings to coordinate and plan the Group’s ESG policy and sustainable goal roadmap, and identify ESG-related risks and opportunities to determine relevant investment strategies, while monitoring various ESGperformance settings and achievements.
2. Describe how the identified climate risks and opportunities affect the Company’s business, strategy and finance (short-, medium-, and long- term).	⚫ Raw material prices on suppliers rise due to carbon tax ◼ The strategies are: 1. Development of low-carbon, renewable and low-carbon alternative raw materials; 2. Investment in low-carbon equipment; 3. Change the product design to reduce the demand for specific raw materials; 4. Require suppliers to reduce carbon emissions. ◼ The financial impact refers to the increase in procurement costs of 1–7%. ⚫ In response to the trend of corporate carbon reduction, the Company will gradually promote and participate in SBTi as of 2023 to set scientific carbon reduction goals. ◼ Strategies: Short-term: The entire Group must conduct ISO 14064 greenhouse gas inventory to control the source of carbon emissions. Mid-term: Carbon reduction measures such as planning to install the F-gas reduction equipment. Long-term – Planning for energy management and purchase of green energy. The financial impact refers to the satisfaction with the possible requirements of the market for carbon reduction in the future. To prevent the Company from affectingorders due to insufficient carbon reduction.
3. Financial impacts posed by extreme climate events and transformational actions	⚫ The financial impact refers to the satisfaction with the possible requirements of the market for carbon reduction in the future. To prevent the Companyfrom affectingorders due to insufficient carbon reduction.

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Item	Status of implementation
	⚫ Assuming the carbon fee is fully levied in 2030, it is expected that the price of raw materials will increase by1%–7%.
4. Describe how the process of identifying, evaluating and managing climate risks is integrated into the overall risk management system.	All of the Group's subsidiaries have established management guidelines for climate risk, and have formulated corresponding measures based on each risk/opportunity. They have set short-, medium-, and long-term goals, regularly tracked and checked the compliance status, and continued to adjust and improve in order to increase the Company’s resilience to climate risks and steadily move toward the 2050 net zero emissiongoal.
5. If a scenario analysis is used to evaluate the resilience in the face of climate change risks, the scenarios, parameters, assumptions, analysis factors, and main financial impacts used shall be described.	⚫ Power supply stability – According to the IPCC AR5 RCP8.5 worst-case scenario, it is expected that the proportion of strong typhoons will increase by about 100% between 2040 and 2065. Therefore, it is assumed that the above-ground transmission and distribution network will be damaged by the typhoon, thereby resulting in an increase in the frequency of power interruptions. ⚫ Water supply stability – Based on the IPCC AR6 SSP5-8.5 worst-case scenario, it is expected that the number of days without rainfall will tend to increase in Taiwan. Therefore, it is assumed that there will be a 20% reduction in water supply and continuous 20-day events, and the financial impact will result in the reduction of cost byabout NT$250,000peryear.
6. If there is a transformation plan in response to the management of climate- related risks, describe the contents of the plan, and the indicators and goals used to identify and manage physical risks and transformation risks.	The plan is: 1.Development of low-carbon, renewable and low-carbon alternative raw materials; 2. Investment in low-carbon equipment; 3. Change the product design to reduce the demand for specific raw materials; 4. Require suppliers to reduce carbon emissions.
7. If internal carbon pricing is used as a planning tool, the basis for setting the price shall be explained.	For the pilot project in 2023, the Company applied the shadow price model to evaluate and plan the installation of carbon reduction equipment based on the initial price of NT$300 per metric ton proposed by the Ministry of Environment, Taiwan.
8. If climate-related goals are set, specify the activities covered, the scope of greenhouse gas emissions, the planning period, and the progress of each year. If carbon offsets or renewable energy certificates (RECs) are used to achieve related goals, specify the source and quantity of carbon reduction credits or quantity of RECs for which they are exchanged.	Formulate three major action plans, continue to invest in energy conservation and improvement of GHG Scope 2, improve energy efficiency, and integrate management to reduce operational carbon emissions. Action plan: 1. To reduce power consumption by more than 1% each year, plan a 5-year plan for the update and replacement of major energy-consumingequipment,and

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Item

Status of implementation

review and correct the plan each year based on equipment efficiency/service life/operation risk and operational needs. 2. Implementation of ISO 50001 management system: Implement the ISO 50001 energy management system to the pilot plants to establish the baseline for the use of the plant system and unit energy consumption, and identify energy-conservation opportunities, and extend the same to all of the Company’s plants throughout Taiwan in 2025. 3. Establish the energy e-platform: Implement the electronic platform in the pilot plant in 2023 to establish energy data, and expand the same to all of the Company’s plants throughout Taiwan in 2025. 4. Green electricity (renewable energy) consumption and planning: The plants plan to install solar power generator systems for short-term wholesale. The systems will be provided for own use from 2025, and planned based on the Company’sgreen electricityroadmap.

3.3.8 Operation of the Sustainability & ERM Committee

1. Information of member (professional qualifications and experience)

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Professional knowledge
Major experience
Condition and skills
Identity Law Industry
Name Accounting Marketing Professional Industry
Skill Experience
Finance Technology
Convener and
Shuang-Lang Peng ✓ ✓ ✓
Chairman
Member and
Wei-Chen Wang ✓ ✓
Independent Director
Member and
Chun-Hsin Tsou ✓ ✓
Independent Director
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2. Duties

The Corporate Sustainability and Risk Management Committee shall be composed of at least three directors nominated by the Board of Directors, and more than half of the independent directors shall participate. Please refer to the Company’s website for the Organization Rules of the Corporate Sustainability and Risk Management Committee.

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With the authorization from the Board of Directors, the Committee shall perform the following functions and powers with due diligence as a good administrator, and submit the recommendations to the Board of Directors for discussion:

• (1) Formulation of ESG mission, vision, policies and goals

• (2) Identify ESG risk opportunities and decide related investment strategies

• (3) Supervise ESG strategy planning and implementation

• (4) Monitor ESG performance and information disclosure

• Implementation Status

• (1) There are currently three members of the Sustainability & ERM Committee of the Company, members are independent directors and Chairman.

• (2) The term of the current committee members is from August 3, 2023 to May 30, 2026 (the expiry date is same as the expiry date of 、 、

• directors’ term of office), and in 2023, the Sustainability & ERM Committee held four meetings (A).(meeting dates: 2/23 5/4 、

• 8/3 11/2 ) The members’ attendance is as following:

Title Name Attendance inperson(B) Convener and Chairman Shuang-Lang Peng 4 Member and Independent Director Wei-Chen Wang 4 Member and Independent Director Chun-Hsin Tsou 4 ajor resolutions and implementation thereof	Title	Title	Name	Attendance inperson(B)	Attendance byProxy	Actual attendance rate(B/A)	Actual attendance rate(B/A)	Remarks
	Convener and Chairman		Shuang-Lang Peng	4	0		100.0%
	Member and Independent Director		Wei-Chen Wang	4	0		100.0%
	Member and Independent Director		Chun-Hsin Tsou	4	0		100.0%
Term/Session Date		Motion					Committee members’ opinions and resolutions of the Corporate Sustainability and Risk Management Committee.		The Company’s resolution against the committee’s opinions
I-4 February 23, 2023		⚫ Amendments to the “Sustainable Development Best- Practice Principles of ENNOSTAR Inc.”					All members expressed their approval in favor, and the Corporate Sustainability and Risk Management Committee approved the motion.		Approved by the Board of Directors as it was.

4. Major resolutions and implementation thereof

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Term/Session Date	Motion	Committee members’ opinions and resolutions of the Corporate Sustainability and Risk Management Committee.	The Company’s resolution against the committee’s opinions
I-5 May 4, 2023	⚫ Amendments to certain provisions of the “Risk Management Policy and Procedures.”	All members expressed their approval in favor, and the Corporate Sustainability and Risk Management Committee approved the motion.	Approved by the Board of Directors as it was.
2-2 November 2, 2023	⚫ Proposal for declaration of the Science Based Targets initiative (SBTi) ⚫ Carbon Reduction Solution 1 for Process exhaust gas treatment equipment, local scrubber, construction schedule and budgetproposal.	All members expressed their approval in favor, and the Corporate Sustainability and Risk Management Committee approved the motion.	Approved by the Board of Directors as it was.

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3.3.9 Fulfilling ethical management and differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons thereof

Companies and the reasons thereof
Assessment item	State of operation			Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
(1) Establishment of ethical corporate management policyandplan
a. Does the Company have a clear ethical corporate management policy approved by its Board of Directors, and bylaws and publicly available documents addressing its corporate conduct and ethics policy and measures, and commitment regarding implementation of such policy from the Board of Directors and the top management team?	✓		Ethical conduct is an important core value in our business operations. Persistence in ethical conduct is our responsibility towards our shareholders, customers, suppliers, business partners, and colleagues. We perceive our suppliers as important business partners and hope to create a win-win partner relationship in the pursuit of corporate sustainable management and growth. The Company discloses its "Ethical Conduct" and "Ethical Corporate Management Best Practice Principles" on the Company’s website and also sign the “Ethical transaction and confidentiality obligations terms” with the suppliers. In addition, the “Ethical Corporate Management Best Practice Principles,” is established for all employees to abide with.	No material variance
b. Whether the Company has established an assessment mechanism for the risk of unethical conduct; regularly analyzes and evaluates within a business context, the business activities with a higher risk of unethical conduct; has formulated a program to prevent unethical conduct with a scope no less than the activities prescribed in paragraph 2, Article 7 of the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed	✓		The Company’s “Ethical Conduct” stipulates the conflict of interests, legal compliance, trade secrets and company assets, political activities participation and related behaviors as the guide. The reporting system for ethical conduct violation has been established to provide internal and external stakeholders (such as: suppliers, consumers, customers, employees and shareholders) a complaint channel. A responsible unit responsible for handling the report cases was set up. The cases will be processed according to the level of severity and the employee reward and penalty management procedures.	No material variance

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Assessment item	State of operation	State of operation	State of operation	Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
Companies?
c. Whether the Company has established relevant policies that are duly enforced to prevent unethical conduct, provided implementation procedures, guidelines, consequences of violation and complaint procedures, and periodically reviews and revises such policies?	✓		The “Work Rules,” “Ethical Conduct” and “Employee Reward and Penalty Management Procedures” stipulate related regulations prohibiting accepting meal invitations, gifts or other social activities invitations by suppliers directly or indirectly, and the prevention of unethical conducts. There is the reporting system for violations of ethical conduct established to provide internal and external stakeholders reporting channels to prevent frauds.	No material variance
(2)Ethic Management Practice
a. Whether the Company has assessed the ethics records of whom it has business relationship with and include business conduct and ethics related clauses in the business contracts?	✓		The group treat our customers, suppliers, distributor, competitors and employees in a fair and just manner. Competitive advantages through unethical means are forbidden. The Group’s “Ethical transaction and confidentiality obligations terms” covers abiding to ethical management and operations, confidential responsibility in sales or technology, and if the trading counterparty is involved in any unethical behaviors, all transactions must be terminated immediately, the supplier qualification is removed and compensation for damages is to be requested.	No material variance
b. Whether the Company has set up a unit which is dedicated to promoting the Company’s ethical standards and regularly (at least once a year) reports directly to the Board of Directors on its ethical corporate management policy and relevant matters,andprogram toprevent unethical conduct	✓		The Human Rights Policy and Regulations Governing Integrity and Ethical Conduct have been formulated, and on February 23, 2024, the specific practices and implementation of the ethical management policy for 2023 was reported to the Board of Directors. Major tasks in 2023: Establish the Group’s human rights protection task force,developa human rights management system and conduct human	No material variance

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Assessment item	State of operation	State of operation	State of operation	Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
and monitor its implementation?			rights risk assessment, disclose human rights management in the ESG report, formulate the Group’s “Human Rights Protection Policy,” design human rights protection policy promotion teaching materials, execute the human rights protection education and training, promote the zero-fee policy and free career choice for foreign migrant workers, optimize the employment process and implement the execution of employment contracts, adjust the Grievance Committee as a permanent organization to provide dedicated processing services, amend the recruitment process and personnel profile to have non-discrimination treatment in place, implement promotion and training related to labor–management meetings for new employees and all employees, ensure that everyone is aware that they may participate, formulate the Company’s Regulations Governing Integrity and Ethical Conduct and list various preventive measures in detail, formulate and implement the integrity and ethical conduct management education and training. The implementation of education and training in 2023 is as follows: 1. Theme of the course: Annual retraining on the human right, integrity and ethical conduct policy management. 2. The total number of trainees was 4,880, and the total number of training hours were 4,880 hours. The trainingwas completed 100% in Taiwan.
c. Whether the Company has established policies to prevent conflict of interests, provide appropriate communication and complaint channels and	✓		For employees: The Company has established a policy for preventing conflicts of interest in the “Code of Ethical Conduct” and “Regulations GoverningIntegrityand	No material variance

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Assessment item	State of operation	State of operation	State of operation	Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
implement such policies properly?			Ethical Conduct.” All employees are obligated to avoid possible conflicts of interest between themselves and the Company, and when making decisions or engaging in any behavior, all actions must be in the best interest of the Company. The employees may contact their immediate supervisors and HR units. Meanwhile, the Company has established smooth communication channels, including the President’s mailbox, employee suggestion box, 7885 (please help me) hotline and mailbox, to assist colleagues in feedback and solution of problems. For directors: Article 16 of the Board of Directors Meeting Regulations stipulates the system for recusal of directors due to conflicts of interest - directors shall hold the highest level of discipline. If any director or a juristic person represented by a director is an interested party with respect to any agenda item, the director shall state the important aspects of the interested party relationship at the respective meeting. When the relationship is likely to prejudice the interests of the Company, the director may not participate in discussion or voting on that agenda item, and further, shall enter recusal during discussion and voting on that item and may not act as another director's proxy to exercise voting rights on that matter. The agenda working group shall remind every director to take note if there is any agenda item that requires recusal due to conflicts of interest each time when mailing the agenda information.

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Assessment item	State of operation	State of operation	State of operation	Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
d. To implement relevant policies on ethical conducts, has the Company established effective accounting and internal control systems, audit plans based on the assessment of unethical conduct, and have its ethical conduct program audited by internal auditors or CPA periodically? e. Does the Company provide internal and external ethical conduct training programs on a regular basis?	✓ ✓		The internal audit unit will each year conduct internal control system effective risk assessment based on the transaction manner of every operating location and the possibility of fraud and corruption. The annual audit plan will be established in cooperation with the newly announced related laws and regulations. It will be reported to the board for approval, which implementation will begin thereafter. The audit results will be reported to the board and audit committee members on a regular basis. In November 2023, the Company adopted the internal announcement platform to conduct the online course, “Annual Retraining on Integrity, Ethical Conduct and Human Right Policy Management,” for all employees. 4,879people have been trained,and the completion rate has reached 100%.	No material variance No material variance
(3)Implementation of Complaint Procedures
a. Does the Company establish specific complaint and reward procedures, set up conveniently accessible complaint channels, and designate responsible individuals to handle the complaint received?	✓		The Company has established the “Reporting channel and protection system” and unimpeded communication channels, including: president mailbox, complaint mailbox for unlawful infringement in the performance of duties, sexual harrassment complaint mailbox, ethical report, employee comments mailbox and so on. Externally there is the contact us area on the Company website disclosing the ethical conduct report system and there are dedicated personnel to handle the report matters. Other than as regulated by legislations, there are appropriate protection and confidentiality measures to adopt for the complainant, the information provided, and privacy. If the report is true, the Company will proceed with punishment for the unlawful conduct.	No material variance

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Assessment item	State of operation	State of operation	State of operation	Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
b. Whether the Company has established standard operation procedures for investigating the complaints received, follow-up measures after investigation are completed, and ensuring such complaints are handled in a confidential manner?	✓		The Company’s “Reporting channel and protection system” stipulates related confidentiality mechanism for handling the reported matter.	No material variance
c. Does the Company adopt proper measures to prevent a complainant from retaliation for his/her filing a complaint?	✓		According to the Company’s “Reporting channel and protection system,” other than those regulated under the legislation, there are appropriate protection and confidentiality measures to adopt for the individual complainant and the informationprovided,andprivacy.	No material variance
(4)Information Disclosure
a. Does the Company disclose the content and effectiveness of its Ethical Corporate Management Best Practice Principles on its website and the Market Observation Post System?	✓		The Company has recorded the content of ethical management, with the updated effects of promotion regularly every year, in the “Corporate Sustainability Responsibility” section on the official website and in the “ESG Report.” The Company also discloses the “Ethical Corporate Management Best-Practice Principles” in the Investor section of the official website; for details of the related information details please visit the official website: http://w ww. ennostar.com。	No material variance
(5) If the Company has established ethical corporate governance policies based on Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies, please describe any discrepancy between the policies and their implementation: No material variance.
(6) Other important information to facilitate better understanding of the Company’s implementation of sustainable development ● Build the integrity policy and culture Upholdingthe businessphilosophyof integrity,transparencyand responsibility,the Companyhas established the “Ethical Management Best-Practice Principles”

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Assessment item	State of operation	State of operation	State of operation	Differences from the Ethical Corporate Management Best Practice Principles for TWSE/TPEx Listed Companies and the reasons therefor
	Yes	No	Summary description
and the “Regulations Governing Integrity and Ethical Conduct of the Ennostar Group” to establish good business operations and never allow corruption or any form of fraud. Violations of the Company’s rules and regulations and ethical management requirements that are proven to be true will result in disciplinary actions in accordance with the relevant management regulations, as well as disclosure on the intranet or bulletin boards of the violator’s job title and name, contents of the violation, and resolution thereof. If the circumstances are considered material, necessary legal actions shall be taken, and the violator will be dismissed and never be hired again. Meanwhile, the Company has formulated related preventive programs, including operating procedures, behavior guidelines, and education and training. For the purpose of communication with stakeholders, the Company has clearly stated its ethical management policies in its internal regulations, on the official website and in relevant external documents. Further, before conducting any business transactions, it shall consider the legitimacy of agents, suppliers, customers or other trading counterparts and whether they have any unethical conduct record, and avoid trading with those who have unethical conduct records. ● Complaining and whistleblowing system In order to strengthen corporate governance, implement the ethical management and code of ethical conduct, and provide a channel for whistleblowing any violations of integrity and ethical conduct requirements, the “Whistleblowing Channel and Protection System” is established. The Company has established the “Ethical Management Violation Reporting System” on its official website and intranet for whistle-blowers to report cases anonymously. The whistleblower’s identity and contents of the report are kept confidential and protected. The Chairman shall assign the internal audit unit head to process the reported cases, and if necessary, appoint experts (lawyers and CPAs, etc.) to coordinate in the investigation and report the investigation results to the Chairman. If an investigation reveals any material violation or material damage to the Group, or where a director or senior executive is involved, report the matter to the Audit Committee or supervisors. ● Anti-corruption education and training The Company strictly prohibits any acts of corruption, bribery and extortion. To guide employees to act in line with the ethical standards, the Company requires that employees should be cautious in words and deeds, conduct themselves honestly, and refrain from taking advantage of their positions to seek personal gains or accept gifts from others. The Company also continues to strengthen employee education and training, offer online and physical courses, and release relevant e- newsletters from time to time eachyear.

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Differences
State of operation
from the
Ethical
Corporate
Management
Best Practice
Assessment item Principles for
Yes No Summary description TWSE/TPEx
Listed
Companies
and the
reasons
therefor
The Group and its directors, managers, employees, mandataries, and substantial controllers shall not directly or indirectly offer, promise, request or accept any
improper benefits to/from stakeholders when conducting business. External donations or sponsorships are handled in accordance with relevant laws and regulations
and internal regulations, in order to prevent bribery, acceptance of bribes and illegal political contributions.
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3.3.10 Inquiry method on the Company governance principles and related regulations disclosure

method on the Company governance principles and related regulations disclosure
Important charters		Disclosure inquirymethods
⚫ Company Articles of Incorporation ⚫ Rules of Procedure for Shareholder Meetings ⚫ Procedures for Election of Directors and Supervisors ⚫ Rules of Procedure for Board of Directors Meeting ⚫ Organizational Rules of Audit Committee ⚫ Organizational Rules of Remuneration Committee ⚫ Performance evaluation of the Board of Directors and functional committees ⚫ Rules Governing the Scope of Powers of Independent Directors ⚫ Corporate Governance Best Practice Principles ⚫ Code of Ethical Conduct ⚫ Sustainable Development Best Practice Principles ⚫ Ethical Conduct ⚫ Procedures for Handling Material Inside Information and Management of the Prevention of Insider Trading ⚫ Procedure for Halt and Resumption Applications ⚫ Reporting Channel and Protection System ⚫ Regulations Governing the Management and Protection of Group Trade Secrets ⚫ Risk Management Policies & Procedures		Market Observation Post System website: http://mops.twse.com.tw Search in Basic information section/E- book/Annual report and information about shareholders’ meeting or corporate governance section/Establishment of corporate governance best-practice principles. Company website: https://www.ennostar.com/ Investors/Corporate Governance/Major Internal Policies

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• 3.3.11 Other important information to facilitate better understanding of the Company’s implementation of corporate governance

• Continuing Education/Training of Directors in 2023 Note: The continuing education hours of the directors during tenure meets the requirements of the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies.”

Title	Name	Date of course	Organizer	Course name	Hours of education
Chairman and also President	Shuang- Lang Peng	2023.09.01	Taiwan Corporate Governance Association	Goodwill risk management	3.0
		2023.09.01	Taiwan Corporate Governance Association	Impacts posed by climate change risks on the Company’s financial disclosures	3.0
Director	Yu-Chieh Lin	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
		2023.11.10	Taiwan Corporate Governance Association	Corporate Governance in the U.S.A.: Historical Evolution and Recent Developments	3.0
		2023.12.26	Taiwan Corporate Governance Association	Circular Economic Benefits and Sustainable Finance Opportunities	3.0
Director Appointment of the President of the Company.	Hsiu-Mu Tang	2023.07.04	Taiwan Corporate Governance Association	2023 Cathay Pacific Sustainable Banking and Climate Change Summit	6.0
		2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.09.01	Taiwan Corporate Governance Association	Goodwill risk management	3.0
Director and also the President of Subsidiary	Chin-Yung Fan	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.09.01	Taiwan Corporate Governance Association	Goodwill risk management	3.0
Independent ~~D~~irector	Wei-Min Shen	2023.07.27	Securities and Futures Institute	Corporate Operation and Risk Response Management	3.0
		2023.08.31	Securities and Futures Institute	Internal/short-term case analysis and business judgment rules and case analysis	3.0
		2023.09.04	Securities and Futures Institute	Mastering the global economic situation and technology pulse – a keyissue for enterprises	3.0

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Title	Name	Date of course	Organizer	Course name	Hours of education
Independent Director	Hsien-He Sheng	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
Independent Director	Wei-Chen Wang	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.09.20	Taiwan Investor Relations Institute	How to innovate and break through profitability in the digital economyera	3.0
		2023.10.04	Corporate Operating and Sustainable Development Association	Taiwanese business operations and M&A strategies from the perspective of global political and economic situations	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
Independent Director	En-Te Hsu	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.08.08	Taiwan Corporate Governance Association	What investors are thinking – Discuss the sustainable transformation of enterprises from the prospective of ESG investment and financing	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
Independent Director	Chun-Hsin Tsou	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0

2. 2023 Continuing education and trainings on corporate governance for managers and audit officers

Title	Name	Date of course	Organizer	Course name	Hours of education
Finance and Accounting Officer	Po-Yi Chang	2023.08.21- 2023.08.22	Accounting Research and Development Foundation	Continuing Education Course for Issuers, Securities Firms, and Stock Exchanges	12.0

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Title	Name	Date of course	Organizer	Course name	Hours of education
Chief Corporate Governance Officer	Po-Yi Chang	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.09.01	Taiwan Corporate Governance Association	Goodwill risk management	3.0
		2023.09.01	Taiwan Corporate Governance Association	Impacts posed by climate change risks on the Company’s financial disclosures	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
Vice President	Tsun-Chung Li	2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
President of the Subsidiary	Chin-Hsiang Wen	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
Chief Internal Audit Officer	Wen-Ting Tseng	2023.08.02	Taiwan Corporate Governance Association	The governance strategy of information security of TWSE/TPEx listed companies from theperspective of ESG	3.0
		2023.10.03	The Institute of Internal Auditors	Seminar on “Information Security Protection” and “Cloud-Based Security” Audit Practices	6.0
		2023.11.02	Taiwan Corporate Governance Association	How Directors and Supervisors Supervise Risk Management and Crisis Management and Strengthen Corporate Governance	3.0
		2023.11.09	The Institute of Internal Auditors	Policy Analysis on “Self-Preparation of Financial Statements” and “Sustainability Report” and Seminar on Key Practices of Internal Audit and Control (including “Action Plan for Sustainable Development of TWSE/TPEx Listed Companies (2023)”)	6.0

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1. State of purchasing liability insurance for the directors by the Company

The insured	Insurance company	Insured amount	Period of insurance
All directors and supervisors	Insurance Company Of North America / Cathay Century Insurance Co., Ltd./ Fubon Insurance Co.,Ltd.	USD 30,000,000	January 6, 2023 ~ January 6, 2024
All directors and supervisors	Insurance Company Of North America / Cathay Century Insurance Co., Ltd./ Fubon Insurance Co.,Ltd.	USD 30,000,000	January 6, 2024 ~ January 6, 2025

Note: The insured amount, insured scope, and insurance fees rate for the continued liability insurance of directors and supervisors, have been reported to the board on February 23, 2024.

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3.3.12 Internal Control System Execution Status

• (1) Statement of internal control system: See Appendix 1 (Page 190).

• (2) The Company auditing its internal control system by a CPA shall disclose the CPA audit report: None.

• 3.3.13 Where the Company or its internal personnel have been punished in accordance with the law or the Company has punished its internal personnel for violating the provisions of the internal control system from the most recent year up to the date of publication of the annual report, the major deficiencies and improvements: None.

• 3.3.14 Important resolutions of the shareholder meeting and board meeting and state of implementation review from the most recent year up to the date of publication of the annual report.

1 、 2023 Annual General Meeting

• (1) Pass the re-election of nine directors of 2nd Board of Directors

• Status of implementation:

Name list of the elected : Director Shuang-Lang Peng; Representatives of AUO: Yu-Chieh Lin; Director Chin-Yung Fan; Director Hsiu-Mu Tang; Independent Director Wei-Min Shen; Independent Director Hsien-Ho Shen; Independent Director Wei-Chen Wang; Independent Director En-Te Hsu; Independent Director Chun- Hsin Chou

• (2) Recognition of 2022 business report and financial statements

• Status of implementation:

• Resolved to approve that the consolidated operating revenue for 2022 is NT$28,878,250 thousand, operating loss NT$465,598 thousand, net profit after tax NT$566,383 thousand, and earnings per share NT$0.05.

• (3) Recognition of the 2022 earnings distribution proposal

Status of implementation:

• Resolved to approve that the net profit for the year is NT$38,023,691. After adjustments, the Company is proposed not to distribute the profit, in consideration of the current macroeconomic uncertainties and the fund demand for major capital expenditures in the future.

• (4) Approve lifting of the non-competition restriction imposed on directors

• Status of implementation:

• Approved the lifting of non-competition restrictions imposed on Shuang-Lang Peng, AUO, Yu-Chieh Lin, Chin-Yung Fan, Hsiu-Mu Tang, Wei-Min Shen, Hsien-Ho Shen, Wei-Chen Wang, En-Te Hsu, and Chun-Hsin Chou. For details, please refer to the minutes of the 2023 Annual General Meeting.

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2 、 2023 Board’ Meeting

Date of resolution	Important resolutions	Executive Summary
2023.02.23	1. Recommendations for 2023 budget of salary raise 2. Suggestion for 2023 managerial officers’ salary raise 3. Approval for the managerial officers of the Company to obtain the employee stock warrants issued by the subsidiary. 4. Appointment of Wei Shi as the Company’s Chief Information Security Officer. 5. 2022 Evaluation on the Effectiveness of the Internal Control System, and the Statement of Internal Control System 6. Assessment on overdue accounts receivable and implementation of control measures that do not need to be classified as loans to others. 7. Distribution of the Company’s 2022 remuneration to employees and directors 8. The Company’s 2022 financial statements and business report 9. The Company’s earning distribution proposal 10. Amendments to certain provisions of the “Corporate Governance Best-Practice Principles” and “Sustainable Development Best-Practice Principles.” 11. Time, venue and cause for convening of the 2023 annual general meeting. 12. Election of directors of 2nd Board of Directors and nomination of director candidates by the Board of Directors(includingliftingof the non-competition restrictions imposed on directors).	All matters are implemented in accordance with the resolutions of the meeting.
2023.05.04	1. Assessment on overdue accounts receivable and implementation of control measures that do not need to be classified as loans to others. 2. The Company’s Q2 2023 financial report 3. Equipment-related transactions between Epistar and Unikorn. 4. Ennostar Group intended to participate in Unikorn’s cash capital increase for 2023, subject to the upper limit for NT$400 million. 5. Amendments to certain provisions of the “Risk Management Policy and Procedures.” 6. Proposal to applywith financial institutions for the renewal of financingfacilities.	All matters are implemented in accordance with the resolutions of the meeting.
2023.05.31	1. Election of the 2nd Chairman 2. Appointment of the 2nd Remuneration Committee members 3. Appointment of the members of the 2nd ESG Committee 4. Appointment of the President of the Company. 5. Amendments to certainprovisions of the “Rules of Procedure for SteeringCommittee Meetings”	All matters are implemented in accordance with the resolutions of the meeting.
2023.08.03	1. Assessment on overdue accounts receivable and implementation of control measures that do not need to be classified as loans to others. 2. The Company’s Q2 2023 financial report 3. Change of the Company’s address	All matters are implemented in accordance with the resolutions of the

86

Date of resolution	Important resolutions	Executive Summary
	4. Proposal to establish the “Corporate Governance and Nomination Committee.” 5. The subsidiary with one single legal person shareholder wholly owned by the Company in Taiwan proposed not to establish the board of directors but appoint one director to exercise the board of directors’ functions. 6. Delegation of Internal Audit Office’s administrative affairs 7. The Company intends to acquire from the related party, Yenrich Technology Corporation, the whole equity held it in Leadstar Micro-Crystal Display Corporation (Jiangsu) Ltd. in Mainland China. 8. Additional reduction of capital expenditures. 9. Agreement to change the custodian of the seals exclusively used for endorsements/guarantees. 10. Proposal to set the capital reduction record date for the cancellation of the Company’s shares held by Epistar. 11. Loaning of the fund, NT$500 million, Unikorn Semiconductor 12. Recommendations for 2022 distribution of employee remunerations to managerial officers (profit- sharing) 13. Salary proposal for the new President. 14. Appointment of and salary proposal for the new managerial officers. 15. Recommendation on the signingbonus of Unikorn’s President	meeting.
2023.11.03	1. The Company’s 2024 audit plan 2. The Company’s Q2 2023 financial report 3. Amendments to certain provisions of the “Procedures for Transactions between Affiliated Parties and Group Enterprises” and “Regulations Governing Performance Evaluation on the Board of Directors and Functional Committees.” 4. Additional capital expenditure budget for 2023 by Epistar Sub-Group. 5. Assessment on the independence and competence of external auditors 6. Proposal to apply with financial institutions for the renewal of financing facilities. 7. Amendment to Regulations Governing the Distribution of Fixed and Variable Remunerations to Directors 8. Recommendations for 2024 incentive measures 9. Recommendations for percentage of appropriating the 2024 employee and director remunerations 10. Recommendations on long-term incentive plan (LTI) for managerial officers 11. Recommendations for distributing2023 variableyear-end reward to managerial officers	All matters are implemented in accordance with the resolutions of the meeting.

3.3.15 From the most recent year up to the date of publication of the annual report, if board directors or supervisors had different opinions on important resolutions approved by the Board of Directors with records or written statements, the main content of the opinions: None.

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• 3.3.16 From the most recent year up to the date of publication of the annual report, summary of resignation and dismissal of the Company’s chairperson, president, accounting officer, finance officer, internal audit officer, corporate governance managerial officers and R&D officer: None.

• 3.3.17 Acquisition of certificates and related documents by the Company and personnel with transparent financial information, as requested by the competent authority

requested bythe competent authority
License	number ofpeople
	Audit	Finance
Certified Internal Auditor(CIA)	1
Certified Public Accountant(CPA)		1

3.4 Information of CPA audit fee

				Unit: Thousands of NTD	Unit: Thousands of NTD
CPA Firm	Name of CPA	Audit period	Audit fee	Non-audit fee	Total
PwC Taiwan	Tien-Yi Li Chien-HungChou	2023.01.01~ 2023.12.31	9,700	4,729	14,679

• Note 1: The non-audit service fees are the three-tiered transfer pricing document, industrial and commercial registration, and dissolution and liquidation of a subsidiary.

• Note 2: If the audit fee of the year is less than that of the previous years after changing CPA firm, then the audit fee before and after the change and the reason for change shall be disclosed: Not applicable.

• Note 3: If the audit fee is less than that of the previous year by over 10%, then the less amount of audit fee, its proportion, and the reason shall be disclosed: Not applicable.

3.5 Replacement of CPAs: None.

3.6 Information on the company’s chairman, president, or any managerial officer in charge of finance or accounting matters has in the most recent year held a position at the accounting firm of its certified public accountant or at an affiliated enterprise of such accounting firm: None.

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3.7 Changes in the transfer or pledge of shares by directors, managers, and shareholders holding over 10% of the shares

3.7.1 Changes in the transfer of shares by directors, managers, and major shareholders

				Unit: Shares	Unit: Shares
Title	Name	2023		For theyear 2024 uptill 2/29
		Increase (decrease) in shareholdings	Increase (decrease) in pledged shares	Increase (decrease) in shareholdings	Increase (decrease) in pledged shares
Chairman and President	Shuang-LangPeng	100,000	0	0	0
Director and 10% shareholdinghareholder	AUO CORPORATION.	0	0	0	0
Representative ofjuristicperson director	Yu-Chieh Lin	0	0	0	0
Director and President of subsidiary	Chin-YungFan	0	0	0	0
Director and President of subsidiary	Hsiu-Mu Tang	0	0	0	0
Independent Director	Wei-Min Shen	0	0	0	0
Independent Director	Hsien-Ho Shen	0	0	0	0
Independent Director	Wei-Chen Wang	0	0	0	0
Independent Director	En-Te Hsu	0	0	0	0
Independent Director	Chun-Hsin Tsou	0	0	0	0
Executive deputy general manager	Feng-ChengSu	25,929	0	0	0
Vice President	Po Yi Chang	0	0	0	0
Vice President	Lin-Tien Yang	0	0	0	0
Vice President	Wei-Shih	0	0	0	0
Vice President	Cun-JhongLi	0	0	0	0
President of subsidiary	Jin-XiangWen	0	0	0	0
Vice President of subsidiary	Chen,Ou	0	0	0	0
Vice President of subsidiary	Ming-Da Jin	0	0	0	0
Vice President of subsidiary	Ming-Xun Hsieh	0	0	0	0
Vice President of subsidiary	Chih-Jie Lai	0	0	0	0
Vice President of subsidiary	Li-ChengHung	0	0	0	0
Vice President of subsidiary	Chung-MingWeng	5,000	0	0	0

89

				Unit: Shares	Unit: Shares
Title	Name	2023		For theyear 2024 uptill 2/29
		Increase (decrease) in shareholdings	Increase (decrease) in pledged shares	Increase (decrease) in shareholdings	Increase (decrease) in pledged shares
Vice President of subsidiary	Chia-Lin Chen	0	0	0	0
Vice President of subsidiary	Meng-Yi Lin	13,000	0	0	0
Vice President of subsidiary	Chao-Nien Huang	0	0	0	0
Vice President of subsidiary	Wan-Ji Hsu	0	0	0	0
Vice President of subsidiary	Shan-Hua Wu(Note 2)	0	0	0	0
Vice President of subsidiary	Chi-ChungChao(Note 3)	0	0	0	0
Vice President of subsidiary	Hsiao-HengHo(Note 3)	0	0	0	0
Vice President of subsidiary	Wen-Chieh Kuo(Note 3)	0	0	0	0

Note1 : Those who are in office as of the publication date of the annual report. Note2 : Increase (decrease) in shareholding, calculated from the taking office of new manager on 2023/09/01 Note3 : Increase (decrease) in shareholding, calculated from the taking office of new manager on 2024/01/19

3.7.2 Information of shares transferred: None.

3.7.3 Information of shares pledged: None.

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3.8

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• 3.9 The total number of shares and total equity stake held in any single enterprise by the Company, its directors and supervisors, managerial officers, and any companies controlled either directly or indirectly by the Company.

					December 31,2023	December 31,2023
Non- consolidated affiliates	Ownership by Ennostar		Ownership by directors, supervisors, managers and directly/indirectly owned subsidiaries		Total ownership
	Number of shares	Percentage %	Number of shares	Percentage %	Number of shares	Percentage %
Epistar Corporation	1,116,479,188	100	0	0.00	1,116,479,188	100
Lextar Electronics Corp.	514,916,380	100	0	0.00	514,916,380	100
Harvestar Investment Corp.	115,000,000	100	0	0.00	115,000,000	100
Calystar Investment Corp.	44,000,000	100	0	0.00	44,000,000	100
Precistar Investment Corp.	48,000,000	100	0	0.00	48,000,000	100
Praistar Investment Corp.	27,000,000	100	0	0.00	27,000,000	100
Manastar Investment Corp.	100,000	100	0	0.00	100,000	100
Amengine Corporation	6,922,000	75.96	0	0.00	6,922,000	75.96
Unikorn Semiconductor Corporation	65,700,000	19.53	129,215,020	38.40	194,915,020	57.93
*Tyntek Corporation (TWSE: 2426)	23,799,000	7.92	21,433,000	7.13	45,232,000	15.05
*GCS HOLDINGS, INC.(TPEx 4991)	9,028,000	8.11	15,513,000	13.96	24,541,000	22.07
*LEADSTAR Micro- Crystal Display Corporation （JiangSu）Ltd.	RMB 100,900,000	25.22	RMB 72,433,300	18.11	RMB 173,333,300	43.33

*Note: Long-term investments made by the Company with the equity method.

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4.1

11101055630

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Types of shares
Common shares 752,940,460 747,059,540
1,282,377
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4.1.2 Composition of Shareholders

Composition of shareholders Amount	Government agencies	Financial institutions	Other juridical persons	Foreign institutions and natural persons	Domestic natural persons	Total
Number of shareholders	1	17	379	362	129,381	130,140
Shareholding	1,979,000	11,595,529	181,785,991	112,399,369	447,024,071	754,783,960
Shareholding percentage(%)	0.26	1.54	24.09	14.9	59.21	100.00

Note 1: Before the date of report publication, the stock transfer has not been closed. The above table shows the number of shares owned and total issued shares based on the most recent stock transfer closure date which is April 2, 2023.

4.1.3 Diversification of Shareholdings

(1) Common shares

ommon shares
	Face value		per share,NTD 10
Shareholding Range	Number of shareholders	Shareholding	Shareholding percentage(%)
1～ 999	56,844	12,170,818	1.61
1,000～ 5,000	58,524	118,001,233	15.63
5,001～ 10,000	7,664	58,989,837	7.82
10,001～ 15,000	2,358	30,216,275	4
15,001～20,000	1,433	26,215,700	3.47
20,001～ 30,000	1,227	31,183,055	4.13
30,001～40,000	545	19,370,477	2.57
40,001～ 50,000	333	15,440,951	2.05
50,001～100,000	666	47,797,804	6.33
100,001～200,000	308	42,848,508	5.68
200,001～400,000	119	33,877,202	4.49
400,001～600,000	28	13,545,712	1.79
600,001～800,000	22	14,747,550	1.95
800,001～1,000,000	13	11,978,021	1.59
Over 1,000,001	56	278,400,817	36.89
Total	130,140	754,783,960	100.00 %

Note 1: Before the date of report publication, the stock transfer has not been closed. The above table shows the number of shares owned and total issued shares based on the most recent stock transfer closure date which is April 2, 2023.

(2) Preferred Share: None.

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4.1.4 List of major shareholders

Unit: Shares

List of major shareholders		Unit: Shares
Shares Name of major shareholders	Number of shares held(shares)	Shareholding percentage(%)
AUO CORPORATION.	93,568,898	12.40%
RonlyVenture Corp.	20,686,050	2.74%
KonlyVenture Corp.	16,413,457	2.17%
JPMorgan Chase Bank N.A., Taipei Branch in custody for Vanguard Total International Stock Index Fund, a series of Vanguard Star Funds	9,214,740	1.22%
Vanguard Emerging Markets Stock Index Fund, A Series Of Vanguard International EquityIndex Funds	9,159,726	1.21%
Taiwan Life Insurance Co.,Ltd.	7,618,000	1.01%
Tai Power Enterprise Corporation	7,038,743	0.93%
Polunin DevelopingCountries Fund, LLC	6,702,000	0.89%
Wan-TingTseng	5,451,000	0.72%
United Microelectronics Corporation	5,357,495	0.71%

Note 1: Before the date of report publication, the stock transfer has not been closed. The above table shows the number of shares owned and total issued shares based on the most recent stock transfer closure date which is April 2, 2023.

4.1.5 Information on market price, net worth, earnings, and dividends per share for the most recent two years

Unit: NTD

most	recent two years	recent two years		Unit: NTD
Item	Year		2023	2024 (As of 2/29)
Market price per share	Highest		57.20	52.10
	Lowest		41.20	44.50
	Average		47.85	49.49
Net worth per share	Before distribution		63.03	Note 4
	After distribution		62.12	Note 4
Earnings per share	The weighted average number of shares (shares in thousands)		751,658	Note4
	Earningsper share		(9.02)	Note4
Dividend per share	Capital surplus Cash distribution		0.90	－
	Stock grants	Stock dividends from earnings	0.00	－
		Stock dividends from capital surplus	0.00	－
	Accumulated	unpaid dividends	－	－
Analysis of return on investment	Price-to-Earnings(P/E)Ratio(Note 1)		(5.30)	－
	Price to dividend ratio(Note 2)		53.17	－
	Cash dividendsyield(%)(Note 3)		1.88	－

[Adopt IFRS Standards (Consolidated entities)]

Note 1: Price to Earnings ratio = average closing price per share for the year/earnings per share.

Note 2: Price to dividends ratio = average closing price per share for the year/cash dividend per share.

Note 3: Cash dividends yield = dividend per share/average closing price per share for the year.

Note 4: As of the date of the annual report publication, the 2024 Quarter 1 Financial statements have not yet been completed; Thus, not applicable temporarily.

Note 5: The company's articles of association stipulate that the surplus shall be distributed annually, and if it is done in cash, the board of directors shall be authorized to resolve. On February 23, 2024, the company passed the resolution of the board of directors that cash will be distributed through capital surplus.

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4.1.6 Dividends policy and implementation

(1) Dividends policy

Considering the characteristics of the industry where the Company operates, the earnings are distributed annually. Based on factors such as the Company’s current and future development plans, investment environment, capital demand, and domestic and foreign competition conditions, while taking shareholders’ interests and capital adequacy ratio into account, it is determined by the Board of Directors. The principle is 10% to 80% of the after-tax profit of the concerned year, and the proportion of cash dividend distribution to shareholders shall not be less than 10% of the total dividends distributed.

After the Board considers the Company’s operations, appropriate cash is retained, and 10% of the earnings is provided as the legal reserve and special reserve. The distribution principle is still maintained such that no less than 20% of the after-tax profit of the year will be distributed.

• (2) The stock grants proposed by the Board of Directors

Unit: NTD

				Unit: NTD
Shares Year	Resolution of Board of Directors Approved the dividend distribution date		Shareholders dividend
		Cash dividend	Capital surplus Cash distribution	Stock dividends from earnings
2023	2024.02.23	0 (NTD 0per share)	677,646,414 (NTD 0.9per share)	0 (NTD 0per share)

• (3) Expected dividend policy will have a significant change in circumstances: None.

• 4.1.7 The effect of the stock dividends proposed at the shareholders' meeting on the Company's business results and earnings per share: Not applicable.

4.1.8 Profit sharing remuneration for employees and directors

• (1) The percentage and scope of the employees, directors, and supervisor’s remuneration as stated in the Company’s Articles of Incorporation

Item	Percentage and scope
Employees remuneration	Depending on the profit status for the current fiscal year, the Company will set aside 0.1%~15% for employee remuneration; The employee remuneration can be paid in the form of stock or cash, and the recipient of the payment incincludes employees of subordinate companiesqualifyingthe conditions.
Directors remuneration	Depending on the profit status for the current fiscal year, the Company will set aside 2% as the director’s remuneration; The director’s remuneration can onlybepaid in the form of cash.

Note: The employee and director remuneration shall be approved by majority of the directors in a meeting attended by two-thirds or more of all directors, and the resolution shall be reported to the shareholder’s meeting.

(2) The estimate basis for the estimates of employees’ and directors’ remuneration of the current period (2023) is based on the calculation basis for the number of shares for the distribution of the shares as employees’ remuneration and the appropriation in accounting when there are differences between the actual distributed amount and the estimated amount.

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The basis for the estimate of the employee’s and director’s remuneration and fees is the board will formulate according to the Company’s articles of incorporation and the laws and regulations, and reference standards by industry peers. If the board decides to pay employee remuneration in the form of stock, the number of stocks shall be calculated based on the remuneration amount decided at the board meeting divided by the closing price one day before the board decision. If the Board of Directors subsequently modifies the estimates significantly, the Company will recognize the change as an adjustment in the profit or loss in the subsequent period. The difference between the estimation and the resolution of the shareholders’ meeting will be recognized in profit or loss in the subsequent year.

• (3) 2023 State of the remuneration distribution approved by the Board of Directors

Unit: NTD

Item	Account estimate	Account estimate	Board of Directors resolution(2023.02.23)	Board of Directors resolution(2023.02.23)	difference number
	%	Amount	%	Amount
Directors’ compensation(cash)	0%	0	0%	0	0
Employees’ compensation(cash)	0%	0	0%	0	0
Total		0		0	0

• (4) 2022 State of the actual distribution of directors’ and employee’s remuneration:

Item	Board of Directors resolution(2023.02.23)	difference number	Reason
Directors’ compensation(cash)	0	0	None
Employees’ compensation(cash)	3,952,034	0	None
Total	3,952,034	0	None

• 4.1.9 Status of re-purchase of the Company’s shares: None.

4.2 Issuance of Corporate Bonds: None.

4.3 Preferred Shares: None.

4.4 Issuance of Overseas Depositary Shares: None.

4.5 Status of Employee Stock Option Plan: None.

4.6 Status of New Restricted Employee Shares: None.

• 4.7 Status of New Shares Issuance in Connection with Mergers and Acquisitions: None.

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4.8 Financing Plans and Implementation:

Raising new capital by issuing new common shares offered through private placement in 2022

4.8.1 Content of the plan

The Shareholders Meeting resolved to pass the offering of 70,000,000 common shares in 2022 through private placement in a session dated May 31 2022. Prospective investors are AUO Corporation and Innolux Corporation.The Board resolved to set June 24 2022 as the pricing day in a session dated June 24 2022. The subscription/issuance price was set at Nt$51.82/share at 10% discount of the reference price and July 8 2022 will be the day of capitalization pending on the fully payment of capital investment. The common shares through private placement will be delivered on August 31 2022. The prospective subscribers are AUO Corporation and Innolux Corporation.

• 1 、 Source of capital

• A total of 70,000,000 shares will be offered in this issue of private placement with face value at NT$10/share and the issuing price is NT$51.82 with a total of $3.6274 billion raised. If there is still an amount short, the Company will resort to bank loans or equity capital.

• 2 、 The use of fund

• The capital will be used as capital expenditure for the construction/installation of a foundry exclusively designed for the 6” Micro LED, procurement of epitaxy production process and chip processing related equipment.

• 3 、 The content of previous changes in the plan, the reason for the change, the result before and after the changes, and the date on which the change in the plan was presented to the Shareholders Meeting: not applicable

• 4 、 The date for declaring at the website designated by Securities and Futures Bureau.

• The price is required to be declared on June 24 2022 and the information on the full payment of investment is required to disclose at the website of MOPS on July 8 2022.

4.8.2 Status of execution

Unit: NTD Thousand

Theprojectplan		Theprogress	Theprogress
The construction/installation of a foundry exclusively designed for the 6” Micro LED( procurement of epitaxy production process and chip processing related equipment).	Amount used	Projected	1,023,000,000
		Actual	101,665,401
	Progress (%)	Projected	88.27%
		Actual	26.36%

All the funds raised from the private placement will increase the capital of the

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100%-owned subsidiary, Epistar Corp. (hereinafter referred to as Epistar). The funds raised from the capital increase by Epistar will be used for project expenditures such as the 6-inch fab dedicated to Micro LED, and purchase of equipment related to epitaxy process and grain process.

The global consumer market demand has been affected by war, inflation, lift rate, industrial inventory adjustments, and drastic decline of customer demand. As a result, the development of Micro LED technology and market demand have been slightly delayed. The Company adjusted the speed of capacity construction slightly, but the goal of mass production of Micro LED remains unchanged.

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5. Operation Overview

5.1 Business Contents

5.1.1 Business Scope

1. Main Business Contents

2. The Company is an investment holding company, mainly investing in optoelectronic semiconductors and other related industries, including “epi wafers and chips” and “packaging and modules.” The business scope is as follows:

3. (1) R&D, manufacturing and sales of epiwafers and chips Manufacture of the epi Wafers and chips for high-luminance AlGaInP LED, Indium Gallium Nitride (InGaN) LED and infrared Aluminum Gallium Arsenide (AlGaAs), including epi wafers and chips for optical communication and sensor products.

4. (2) R&D, manufacturing and sales of packaging and modules Packaging components and modules for backlight, lighting, automotive, sensing, invisible light (UV, IR), vertical cavity surface emitting laser (VCSEL), RGB display and other products.

5. Operating Proportion in 2023

Unit: NT$ thousand

perating Proportion in 2023		Unit: NT$ thousand
Item	Sales amount	% of sales
Chip/wafer	14,556,865	65.26
Packagingand Module	6,674,594	29.92
Other	1,074,221	4.82
Total	22,305,680	100.00

Note: IFRS (consolidated entity) is adopted.

3. Current products (services) items

The Company's main products include “epi wafers and chips” and “packaging and modules,” which are described below:

(1) Epi wafers and chips

Subject to the different luminous colors and materials, the product types are classified as follows:

are classified as follows:	are classified as follows:
Glow color		Material	Product type
High brightness	Red	AlGaInP	Epi wafers and chips
	Orange
	Yellow
	Yellow-green
	Green	InGaN
	Blue
	UV
Infrared		AlGaAs

(2) Packaging and Modules

According to different application fields, the product types are classified as follows:

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  - A. Packaged components, modules and finished products for automotive lighting applications.

  - B. Packaged components and modules for automotive backlight applications.

  - C. Professional packaged components, modules and finished products for special lighting applications.

  - D. Packaging and modules for sensing applications.

  - E. Packaged components for VCSEL sensing applications.

  - F. Packaged components and modules for RGB display.

1. New products (services) planned to be developed.

2. (1) Optoelectronic semiconductor epi wafer and chip products: LED Epi Wafers & Chips applied to automotive lighting, automotive backlighting, sensors, RGB displays, and advanced display technologies.

3. (2) Optoelectronic semiconductor packaged components and modules: LED packaged components and modules applied to automotive lighting, automotive backlighting, sensors, RGB displays, and advanced display technologies

5.1.2 Industry Overview and Development

1. Industry Overview and Development Taiwan’s LED industry has a relatively complete industrial chain, and its process technology is able to lead the global market. In recent years, Taiwan’s LED industry has proactively developed high value-added and highend application market technologies (such as Mini LED, Micro LED) to create a new era and seize the opportunity to pursue profit at first.

2. In the LED display application market, based on the comparison between the characteristics of Micro LED and OLED (Organic Light-Emitting Diode), Micro LED has relative advantages in brightness, energy consumption, response speed, and service life. For the time being, the bottleneck of Micro LED technology has been gradually overcome. When the technology, quality, cost and market demand all reach the sweet spot in the future, the Company may have the chance to occupy the mainstream position of the next generation advanced displays.

The overview of development of the main application markets in the LED industry is described as following, primarily in terms of six major aspects:

• (1) Automotive application market

• Primarily consist of three aspects, namely automotive lighting, automotive display and automotive sensor.

• In terms of automotive lighting, it can be divided into exterior lighting and interior lighting.

Exterior lighting: The demand for smart headlights has become the

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market trend. ADB Headlights can expand the driver’s vision at night to increase the response time to obstacles ahead. The glarefree high beams can reduce the unpleasant feeling of the preceding vehicle, oncoming traffic and pedestrians.

Interior lighting: In recent years, major automakers of Europe and the USA have successively implemented the application of ambient lighting in mid-to-high-end cars. They can be adjusted according to different usage scenarios and different user status, thus enhancing the feeling of space for car owners and passengers, and meeting car owners’ personal and characteristics display demand. Ambient lighting is gradually developing from single color to standard 64 colors, standard 7 colors and other multi-color direction, and with the development of driving IC and controller, it provides dynamic atmosphere display function.

• In terms of automotive display, it will develop toward the trend of full-vehicle display, special-shaped or transparent display, and high resolution.

Following the era of new energy vehicles, the traditional dashboard, central control screens, and in-vehicle entertainment systems have been upgraded. This includes large-screen in-vehicle display panels that combine the dashboard with central consoles, as well as emerging in-vehicle display applications such as smart cabin electronic devices, e.g., HUD, transparent A-pillars, and transparent sunroofs. The development of smart cabins and new energy vehicles will also drive the rapid growth of n-vehicle display screens. Automotive displays are also developing in line with large-scale, high-resolution, multi-display, and multi-form trends. The fullcoverage LCD screen design can provide the driver with information in a more intuitive way, and may become the mainstream in the future. The European, US, and Chinese automaker have all started to implement the pass-through large-screen design for vehicles since 2022. Further, HUD products have gradually become the popular vehicle equipment as the advanced assisted driving information is becoming more and more abundant, and have been proactively implemented by major international automakers, including resin lens and glass flat projection in the past, and ARHUD solutions, which may penetrate the market due to their coolness and safety. HUD falls within the scope of application of Micro LED. Leading manufacturers have successively launched Micro LED HUD display products with a transparency of more than 70%. With their high-resolution, flexible and special properties, they have passed the test in a high and low temperature extreme environment for automobiles and, therefore, became one of the HUD solutions step by step.

• In terms of the in-vehicle sensor, it may be divided into in-vehicle and off-vehicle sensor. For the in-vehicle sensor, EU has made it mandatory for new cars to be equipped with a Driver Monitoring

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System (DMS) in July 2022. Meanwhile, it shall be equipped with Occupant Monitoring System (OMS) as of 2022. Governments of the other countries are also proactively promoting the implementation of DMS and OMS, which all drive the rapid rise of the DMS/OMS system market. As vehicles move toward a higher level of autonomous driving, it has become an irreversible trend to be equipped with advanced driver assistance systems (ADAS) that can collect relevant information about the interior and exterior of the vehicle in real time, including static and dynamic object recognition, detection and tracking. For newer LiDAR (Light Detection and Ranging) applications in ADAS, common types of laser beams include ultraviolet, visible, and infrared, and the wavelengths of 600–1,500 nm are the most common. LiDAR has been identified as a necessary sensor for autonomous driving L4L5, which is why OEMs have begun deployment of LiDAR to accumulate databases and improve accuracy.

According to TrendForce’s analysis, the main growth momentum of the automotive market comes from headlamps, ambient lighting, sign lamps, and automotive backlighting. TrendForce forecasts that the automotive LED market will grow from US$3.32 billion in 2023 to US$4.88 billion in 2028, with the CAGR reaching 8.0%. This will make the demand for automotive LED grow at the same time. LED products such as vehicle lights, sensor components, and display panels, covered by electric vehicles, will play the main role in driving the industry’s growth.

==> picture [404 x 167] intentionally omitted <==

Source: TrendForce (March 2024)

• (2) Mini LED market

• The Mini LED application market can be divided into two major areas: LCD backlight and direct display. Among the other things, the backlight products are mainly concentrated in the field of displays no more than 110 inches, which are applied to TVs, e-sports, high-end notebooks, and automotive LCD backlights. The Mini LED backlight solution adopts miniature (75–300 μm) LED chips as the backlight source. Compared with the edge-type backlight solution, this solution delivers the

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advantage residing in adjustable regional brightness, high contrast, high resolution, and HDR display effect. TrendForce forecast that the output value of the global Mini LED backlight market would increase from US$309 million in 2023 to US$502 million in 2028, with the CAGR reaching 10.2%.

==> picture [360 x 155] intentionally omitted <==

Source: TrendForce (March 2024)

In the area of direct view display, the Mini LED direct view monitor is mainly applied to the display market of panel size larger than 110”. Under the constraint of cost, Mini LED is mainly applied to commercial and professional display market for the time being, including traffic control centers, security control center, and indoor and outdoor commercial display. With the increase of players in market, and the declining production cost of Mini LED direct view display, the development of related applications will be accelerated. According to the forecast of TrendForce, the market value of the Mini LED display will grow from USD122 million in 2023 to USD594 million in 2028 at CAGR of 37.3%.

==> picture [380 x 163] intentionally omitted <==

Source: TrendForce (March 2024)

• (3) Micro LED market

The technology of light source for Micro LED display is mainly consisted

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of 2 technological platforms: 1. RGB Mass transfer type 2. Monolithic type

The RGB Mass transfer type is composed by the Micro LED chip of R, G, B through the massive transfer technology to form pixels. The advantage of this direct view display is high quality pixel, high contrast, and energy efficient, and is mainly applied to large video screen or TV wall. The monolithic type is based on the design of different LED epitaxial structure or transfer of substrate in the manufacturing of highresolution micro display featuring R, G, B full color LED light source, and is mainly applied to AR (augmented reality), VR (Virtual Reality), MR (mixed reality) and related wearable display market. In the future, it could be used in automotive display, special area digital display. Yet, Micro LED is still confronted by the challenges of a few critical elements, including the cost, yield rate, wavelength uniformity of LED chips, and the driving lamination technology and the massive transfer production process.

Micro LED is applicable to different sizes of display: from the small size AR/VR, wearables, smart phone, tablet PC, Notebook PC, automotive display, to big screen display (like advertising board, and TV), and the extra small pitch LED display. This type of Micro LED display features high PPI, high gray scale, high contrast to make the screen display fine and flawless. This may replace LCD, PDP, and the DLP technologies and enjoy rapid growth in different types of application, including situation command and control centers, public monitoring and command center, radio and TV broadcast centers, and advertisement in exhibitions. The development is promising. TrendForce forecasts that the Mini LED market scale will increase from US$27 million in 2023 to US$579 million in 2028, with the CAGR reaching 84.0%.

==> picture [355 x 152] intentionally omitted <==

Source: TrendForce (March 2024)

• (4) Invisible LED market

In the invisible LED market, it could be classified into IR and UV markets. ◼ Infrared application market

IR sensor has been extensively used in the 3D sensor function of mobile

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phone and tablet PC, and could be extended to AR/VR, facial recognition, and the application markets of gesture control, or robotic sensor, industrial automation, and unmanned driving. In addition, the extensive infection of the COVID-19 intensified the tightening of control for the prevention of the pandemic that the demand for indoor human traffic control and remote sensor also thrived. In the wake of the increasing popularity of wearables, biological detection application extended to the development of wearables featuring heartbeat, oximetry, and blood sugar measurement. Major brands of terminal sensor products in the USA and Korea also moved from Smart Watch to TWS. TrendForce forecasts that the global Mini LED backlight market scale will increase

==> picture [359 x 154] intentionally omitted <==

from US$255 million in 2023 to US$358 million in 2028, with the CAGR reaching 7%.

Source: TrendForce (March 2024)

◼ UV application market

UV-A LEDs are primarily applied to exposure machines and LCD laminating machines in the light-curing market, 3D printing, offset printing, and printing markets, as well as the yellow light applications of fabs. TrendForce forecasts that the UV LED backlight market scale will increase from US$164 million in 2023 to US$309 million in 2028, with the CAGR reaching 13.4%.

==> picture [372 x 160] intentionally omitted <==

Source: TrendForce (March 2024)

(5) Backlight market

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The backlight market primarily focuses on the application of medium/large-size panels, including large-size TV backlights, and IT application fields of medium size (including notebook and monitor) backlights. In 2023, China’s economic recovery after the lifting of the lockdown was less than what was expected. Besides this, the Russia– Ukraine War and high inflation continued and thereby the demand for TV and IT panels became weak. In 2024, driven by the organization of international events such as the Olympics and the demand for AI PCs, there is an opportunity to drive the demand to become strong in the backlight market.

• (6) LED professional lighting market LED has also been developed positively in the area of special lighting, such as: biometric lighting, plant lighting, industrial lighting, medical lighting, safety warning, smart home lighting, which are thriving. The future is promising.

  • Taking human-based lighting as an example, the system combination of human-based lighting and smart lighting is another niche market for LED lighting. According to research, artificial light source lighting can affect the secretion of melatonin, which in turn interferes with the operation of the human body's biological clock. Different emission spectra have different circadian action factors (CAF), which in turn affects the secretion of melatonin. Under the condition of high CAF, the light source can inhibit the secretion of melatonin, making people feel awake and invigorating, which is suitable for the working environment during daytime. Under the condition of low CAF, the light source can avoid excessive suppression of melatonin secretion, and the circadian rhythm can be adjusted by adjusting the wavelength of the light source with the same color temperature. This technology is applied to various fields in residential areas as well as learning and working environments, and can greatly improve the added value of human-induced lighting products.

• Relationship Between the Up, Mid and Down Streams of the Industry The LED industry in general could be classified as the Substrate, epi wafer, and chip manufacturing at upstream, packing and module manufacturing at mid-stream, and the application industries developed at downstream, which is shown in the diagram below.

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LED industry supply chain structure

Upstream ： Substrate, Epi wafer, Chip

Midstream ： Package, Module

Downstream ： Applications (LCD BLU, Lighting, Signages, Automotive……)

Source: Compiled by Ennostar in March 2024

A brief introduction is as follows:

A brief introduction	is as follows:
Industry	Product	Process Description
Upstream (epitaxy)	Substrate Epi wafer	In the manufacturing process, one or several layers of epitaxy were piled on the substrate for form epi wafer containing different chemical elements through chemical reaction and solidification.
Upstream (chip)	Chip	The metal electrodes at both ends of the LED are fabricated by metal evaporation on the epi wafer, and then the mask etching and heat treatment are carried out on the epi wafer. Subsequently, the substrate is ground thin and polished, and then cut and cracked into a single LED chip.
Midstream (packaging)	Packaging	The midstream is mainly the packaging business, and its manufacturing process includes crystal fixation, wire drawing, cutting or stamping, testing and packaging. According to different packaging technologies, chip packaging has the component types of lamp, digital display, dot matrix and surface mount.
Downstream (module)	Backlight module finished items of lighting Vehicle lighting RGB display Sensor module	The primary application at downstream includes backlight module, finished items of lighting, vehicle lighting, RGB display, and sensor module.

Source: Compiled by Ennostar in March 2024

1. The application and development trend of LED products: Among the LED related products, the Company is committed to developing

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the three main application markets, including “automotive application market,” “advanced display application market” and “smart sensor application market,” in addition to the “new field application market”: (1) Automotive application market

==> picture [343 x 143] intentionally omitted <==

◼ Automotive backlight displays

With the digitization of the car cabin, car displays including dashboard, central console display, passenger seat display, rear-seat entertainment, electronic rear-view mirror, head-up display and other applications have implemented more larger LCD displays. The specifications of automotive displays are developing in line with the trend for high resolution, high brightness, high color rendering, low energy consumption and thinness. Therefore, single-chip LCD backlights need more LEDs, especially for the implementation of direct-lit backlighting solutions and applications. The Company will continue to drive the increase in the demand for LED. In order to meet the needs for high dynamic contrast, regional dimming, wide-color gamut, and high performance, the development of direct-lit Mini LED light sources has become one of the important technologies for the next generation automotive backlight displays. Unlike consumer displays, which are facing the challenge resulting from increasing adoption of OLED displays, automotive LCDs still have obvious advantages residing in reliability and cost. The LCD group continues to develop automotive products that are ultra-thin, high dynamic contrast (HDR), and high color saturation. Meanwhile, due to the increase in consumption of automotive LED, the percentage of cost thereof increases relatively. Therefore, such products play one of the key components in this development trend.

◼ Automotive lighting market

In the development of automotive lighting products, high-luminance LEDs with features such as longevity, power conservation, and instant response have rapidly become popular and are now used in both the interior and exterior of cars. The use of LEDs for automotive lighting has expanded from high-end vehicles to the mid-tier mainstream market, and LEDs have become standard equipment. High-end car makers continue to work with lamp manufacturers to develop projection or fine

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matrix headlamps, which have both the functions of road condition illumination and communication between people and vehicles. This development is driving mid-term and long-term business opportunities for single high-power LEDs or multiple Mini LEDs. As the self-driving function gradually matures, the activities in which the driver’s seat may engage will become more flexible. It is expected that the number of various curved/flat displays in the cockpit will increase accordingly. The business opportunities for Mini LED backlight, etc., are expected to expand step by step. The evolution of the multi-functional smart cockpit will also drive the business opportunities for various mood lights in the car, and the demand for high-quality lighting comparable to sunlight and RGB LED will increase.

The application scope of automotive LED lighting can be mainly divided into headlights, interior lights, exterior indicator lights and other applications.

Headlights ：

==> picture [10 x 9] intentionally omitted <==

Including smart headlights, low beam, high beam and fog lights, primarily functioning to provide the driver with exterior lighting. The development of smart headlights, including matrix LED headlight sets, sensor components and lighting control modules, not only provide exterior lighting, but also detect various environmental conditions outside the vehicle and actively adjust the brightness and angle of the lighting.

Interior lights ：

==> picture [9 x 10] intentionally omitted <==

Including the light sources required for various instruments and control units in the vehicle, such as indoor lighting, mood lights, dashboard lights, reading lights, door lights, and trunk lights. The smart cockpit has been evolved for multiple scenarios, including office, recreation, entertainment and other different scenarios, thereby driving the increase in the penetration rate of various mood lights in the car, and combined with the driver IC to become an Intelligent Ambient light or bring exclusive dynamic scenario effects for users.

Exterior indicator lights ：

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Exterior lighting mainly includes lighting at night or at the time of poor vision (e.g. daytime running lights and license plate lights) and signal indicators (e.g. brake light, turn signal, taillight, third brake light and reversing light), primarily functioning to provide the message of the exterior light signal to the personnel outside the vehicle.

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Development status of LED components in automotive lighting applications

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Source: TrendForce (2023)

◼ Automotive sensor

In automotive applications, in addition to said interior and exterior lighting, automobile intelligence is all the rage. In recent years, various brand car manufacturers have also begun to integrate infrared photography/smart car lighting functions, and new modules such as radar/lidar/ultrasonic comprehensive ranging, and applied the same to the interior/exterior of the vehicle. As a result, the room for growth of optoelectronic components, such as LED/VCSEL, in the automotive application market is upgraded.

A. In-vehicle sensor:

In terms of in-vehicle sensors, in response to the requirements of automotive safety regulations by various countries' governments, some countries have successively required the installation of Driver Monitoring System (DMS) in new cars. The European Parliament and European Council require that new cars shall be equipped with DMS after July 2022. The European New Car Assessment Program (Euro NCAP) has also included DMS and Child Presence Detection (CPD) as a scoring item. Various car makers have begun to implement facial recognition, eye tracking, iris recognition and other technologies. Cameras and infrared LED/VCSELs can be used to detect eyelid closure, blinking, gaze direction, yawning and head movements to detect driver status, find any problem early, and upgrade driving safety.

B. Off-vehicle sensor:

In terms of off-vehicle sensor, with the development of ADAS technology and maturity of laws & regulations, the United Nations Economic Commission for Europe (UNECE) amended the regulations in June 2022 to increase the maximum speed of ADAS for passenger cars and light vehicles from 60 to 130 km/h and allow automatic lane changes. Various car makers have introduced long/short-range LiDAR

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sensors, which are integrated with millimeter wave radar/ultrasonics/camera module technologies, and also various sensor technologies to improve safety. Meanwhile, the Company continues to strengthen the image software recognition function to achieve vehicle intelligence. As the LiDAR technology matures and the price is declining, it will bring new room for growth of optoelectronic components, such as LED/VCSEL/EEL.

(2) Advanced display application market

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Source: Ennostar (April 2024)

• Medium and large-size TFT- LCD display backlight

LCD products are equipped with Mini LED of thin backlights, with thousands of direct-lit structures combined with Full Array Local Dimming (FLAD) technology. The backlight components characterize thin, high brightness, high contrast, and energy conservation. Since Monitor/TV products own COB and POB diversified solutions, their cost structure is more flexible.

Meanwhile, there are still positive demand drivers in the application market, including:

• The average size of LCD TV has increased year by year. The average size of LCD TV has increased by about 5% year over year, e.g. 41.4 inches in 2015, 47 inches in 2019, and 50 inches in 2023. It is expected to exceed 52 inches after 2024, thus driving the demand for more LEDs.

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• For the demand for ultra-high resolution (8K and 4K UHD), upon launch of ultra-high-resolution display products, the size of LCD TVs increased continuously, and the consumption of LEDs in higherresolution TVs also increased by 30%–50% on average compared to the same size TV.

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• Demand for Wide-Color Gamut

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• When the color performance increase from 70%–72% NTSC in 2009 to about 95%–99% NTSC at present, more LEDs will be required to compensate the brightness loss due to the reduction of phosphor

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conversion efficiency in the case of the increase in color gamut. The brightness loss will also increase the number of LEDs used in a single display.

• High Dynamic Range functions

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• The implementation of Mini LED technology to LCD panels not only can achieve the HDR1000 specification, but also present higher brightness and contrast than OLED series products, allowing users to receive better picture quality experience.

◼ LED large-size display board:

LEDs are extensively adopted in the market due to their ultra-high brightness and sharp contrast, especially in outdoor display applications under sunlight conditions, such as road traffic signs, traffic information display boards, and outdoor display advertising boards. In recent years, international events and large-scale exhibitions, including the Olympics, World Cup and others, have extensively applied LED display boards to create various sound and light effects and attract global attention. Products with higher specifications/higher performance continue to be developed, and are provided at more accessible prices, thereby causing the color LED large-scale display board application market to grow continuously.

In terms of product specifications and technology development, the pixels of outdoor full-color displays have changed from 10 mm pixel pitch to 3–5 mm pixel pitch. The surface mount packaging technology and module protection levels are also improving at the same time. Further, the indoor LED display’s pixel pitch keeps shrinking. The mainstream pixel pitch for the general background display applications is concentrated on P2.1, such as P2.3, P2.6, and P2.8. The Virtual Production (VP), which requires more brightness and display effect, and must be used for close-up shooting, adopts P1.2-P1.6 Mini LED display. Corporation & Education, Broadcast and Retail & Exhibition have also become the potential application markets for LED large-scale display boards. High-contrast LED displays using Mini LED or Micro LED have also been introduced in top-end retail and luxury housing markets. It is expected that LED displays will enter the “ultra-fine pitch” ≤P1.0 and become the main momentum to drive the industry growth.

• The indication application market of electronic information products (Smart Display)

In recent years, the packaging technology of LED indicator lights has helped advance the general single-color indicator lights to high-end RGB multi-color, ultra-small, and thin ones. It is applied more extensively, such as network home appliances related products, e-sports keyboard and mouse products, the second display graphics of mobile devices, such as notebooks/mobile phones, smart speakers, and True Wireless Stereo (TWS).

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As the light source for information displays, LED may be applied to diversified products, e.g. LED displays characters, dot matrix graphics, or all information displays that display numbers, images, and indicator lights at the same time. In recent years, household appliances equipped with reminder functions have been emerging, such as the temperature display on the portable mug, the image display on the coffee machine, the humidity display on the dehumidifier, the smart refrigerator panel display, the display application on the smart speaker, and the display on the vehicle. LED indicators have been extensively applied to everyone’s life.

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Source: TrendForce (March 2024)

(3) Smart sensor application market

There are multiple applications of LED to smart sensor. LED light sources of different wavelengths, coupled with light-receiving components, may receive and sense signals. Related application markets include “infrared sensor for wearable devices” and “infrared sensor for smart home and smart door locks.” With the development of end products, in response to the trend of multi-functionality and miniaturization, the package design of sensor products has gradually developed from a single LED consisting of one transmitting IR LED with a light-sensor component to multi-transmitting and multi-receiving System in Package (SiP) packaging technology that can couple with optical sensor IC components. Generally speaking, infrared LEDs have improved the quality of human life in terms of security/recognition/biomedicine.

A. Wearable device infrared sensor

• Because infrared LEDs have the characteristics of low power consumption and customized special wavelengths, they can be used to identify the user’s iris, tissue and other characteristics, and exert the accurate, unique, and portable characteristics of biometrics. The applications of health care and exercise monitoring are booming. Wearable devices, including smart watches, Bluetooth earphones, AR/VR, mobile phones and other end products, have successively adopted LED sensor related technologies. In terms of smart watches, with the prevalence of digital health, LED has

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gradually been implemented to detect heartbeat and blood oxygen, etc. It primarily uses the optical measurement method, photoplethysmography (PPG), and takes advantage of the characteristics of tissue absorption rate differences subject to different wavebands and adopts visible light and infrared light for matching to identify the optimal signal judgment to realize the function of physiological monitoring, allowing users to obtain the physiological information they need in a timely manner. The technology and function have successively become the standard configuration for smart watches. Meanwhile, with the growing popularity of True Wireless Stereo (TWS), this biometric detection function has the opportunity to be implemented as a valueadded product. SWIR (wavelength 1,000–1,700 nm) products can also be applied to biometric sensors. In addition to monitoring heart rhythm, it may also use multi-band infrared LEDs to detect important physiological indicators, such as blood oxygen and blood sugar.

• B. Smart home, smart door locks, and infrared sensor for handheld devices Sensor applications exist in many scenarios. Take smart home-related applications as an example, the user login systems, such as access control, use infrared light sources and cameras with facial feature recognition to replace tedious setup procedures, such as password login. Handheld devices, such as mobile phones and tablets, have application scenarios similar to those for smart car door locks. Infrared LEDs are used to identify the user’s biometrics, such as face and iris, to unlock the device. The accuracy and exclusivity of biometrics is used to protect users’ property safety and personal data security.

Further, in the field of smart home appliances, cleaning robots have changed from being high-priced and having limited functionality to sweeping and vacuuming, to having added smart functions, such as automatic home flight return, scheduled cleaning, and voice mail setting, and even expanded functions, such as carrying and receiving parcels. The market penetration of affordable robot vacuum cleaner is also increasing year over year. A large number of sensors are required by robot vacuum cleaners to perform functions, such as simultaneous positioning, SLAM, detection for avoidance of obstacles, detection for falling, and detection for edge. Among them, cliff sensors, barrier sensors, and drop sensors may apply the IR LED as the signal transmitting end to combine with the receiving end to achieve anti-collision and fall prevention functions by adjusting the light-emitting angle.

C. 3D sensor application

In the application area of 3D sensor, the vertical cavity surface emitting laser (VCSEL) is a critical component. The successful development of 3D sensor structure like the time of flight and structured light, and the rapid development of algorithm motivated many big firms to introduce 3D sensor technology to mobile devices. This provides more business opportunities for 3D sensor and related application in market. After the launch of 3D sensor in the flagship model of Apple in 2017, the shipment volume of VCSEL in consumer electronic products increased perpetually.

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In the future, 3D sensor with VCSEL as a key component will extend to new application area like floor sweeping robots, AR/VR., UAV, unmanned vehicles, and biomedical sensor. In the development of the demand for multiple purposes and compact size of products, sensor product also changed from single LED including 1 transmitter of IR LED matching with 1 sensor component in packing design to multiple transmission. Given the development of the demand for multi-functionality and miniaturization, the package design of sensor products has gradually developed from a single LED consisting of one transmitting IR LED with a light-sensor component to multi-transmitting and multi-receiving System in Package (SiP) packaging technology that adopts infrared laser as the light source, adjusts and improves the algorithm can, and may be couple with optical sensor IC components, to improve the precision and scope of the senor applications.

(4) New application market

◼ Optical communication application

In recent years, the rapid rise of emerging applications, such as Chat GPT and 5G IoT, has driven the rapid increase in the demand for high-speed computing in data centers. According to the forecast of Yole, the global optical transceiver market scale will grow from US$11 billion in 2022 to US$22.2 billion in 2028, with the CAGR reaching 12% from 2022 through 2028.The VSCEL multiple mode fiber optics features high performance, low cost and low power consumption, and could be extensively applied to the optical transmission module application for data centers in the distance of less than 2 km to provide optical communication transmission module of 10Gbps and 25Gbps. The technology of each channel of 25Gbps and 50Gbps is the standard foundation of 100G (4x25Gbps) and 400G (8x50Gbps or PAM4)Ethernet. Single route 25G network could be developed into 100G and 200G switch through multiple port combination. As such, 25Gbps VSCEL is a practical optoelectronic component which entails high potential for development. With the development of the demand for high-speed transmission driven by AI applications, the market penetration rate of optical communication transmission modules in the 400G/800G market will continue to increase, and drive the market to advance to the higher transmission specification of 1.6T, thus driving the growth of the demand for optical communication components, such as the new generation VCSEL.

◼ Solar energy application market for low-orbit satellites

In recent years, as the emerging satellite service providers (e.g. Cosmos/Kuiper/Oneweb) have proactively deployed the satellite communication services, it is expected that more than 1,700 satellites will be launched each year between 2021 and 2030, and they will be replaced every 5 years, thus driving the solar module market to keep

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growing. The solar energy market for low-orbit satellites is expected to grow from US$427 million in 2022 to US$919 million in 2032, with the CAGR reaching 7.95%.

Compared to the commonly used polycrystalline silicon or single crystal silicon solar panels, of which the photoelectric conversion efficiency is between 8–15% and 15–20%, the efficiency of solar panels composed of III-V materials can reach 25–35% and, therefore, makes them ideal for use in the satellite market which lacks energy and seldom provides maintenance services. The solar power system onboard the satellite can directly capture solar energy in space without the restrictions of weather conditions or the earth’s rotation, and also provide an almost unlimited and constant source of solar energy, thereby achieving continuous power generation and reducing the need for onboard fuel or limited energy storage requirements.

◼ LED professional lighting market

In recent years, the global awareness toward energy conservation and carbon reduction has gradually increased. Besides this, given the increasing demand for LED lighting quality and ergonomic lighting, LED lighting products have become increasingly more professional. For example, the EU proactively promotes the ErP new energy label, which greatly improves the high color rendering index and high-performance requirements. North America mainly focuses on whether the light quality, controllability and performance comply with the new standard of DLC V5.1. China focuses on the harm of blue light caused to the retina, and particularly requires the adoption of the highest safety level for the design. The low blue light demand will also become an important development direction of the ergonomic lighting market in the future. With the emerging LED full-spectrum adjustment technology, continuous improvement of LED conversion efficiency, improvement of the reliability of lamp design, and relevant professional certifications of LED lighting products, LEDs can meet the needs of more special application light sources. For example, for industrial lighting (such as clean room yellow light lighting) in specific fields, LED will be able to replace mercury lamps in a clean room, and industrial lighting will bring more energy-conservation benefits to factories (yellow lights in a wafer fab’s clean room). In terms of medical health lighting, the spectrum of LED is adjusted to make it closer to the spectrum of sunlight (natural light), and the brightness and color temperature are adjusted automatically by combining with intelligent control to simulate the circadian rhythm of natural light, in order to avoid interference with melatonin and affect the biological clock, thereby improving sleep quality. In terms of plant lighting, it can shorten the growth cycle and increase the planting density, and can be applied to farm plant lighting for various high value-added crops.

◼ UVA-LED application market

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UVA_LED can be extensively applied in industrial curing related markets. Its products may be applied in the fields including industrial exposure machines in the light-curing market, LCD laminating machines, offset printing, printing markets, medical equipment, beauty care equipment, automotive coating and exposure machines, and the 3D printing emerging in recent years. There is also a demand for modification and replacement of wafer fabs’ yellow lights. Due to the breakthrough of materials and new technologies that improve the price/performance ratio of UVA-LED, the quality certification of reliability, and the improvement of power conservation and environmental protection awareness, more downstream dealers will be attracted to adopt UVALED related technologies and develop related new products.

1. Industry Competition

2. The government subsidy of the LED industry in Mainland China over the years gave rise to keen competition in production capacity and market price. In response, Taiwan firms oriented towards the niche application market of high added-value such as automotive fields, advanced display, and smart sensors.

In the area of automotive application, car makers all over the world tend to upgrade the utilization of LED and sensor products, which in turn gives rise to the high growth of demand for automotive LED. Automotive LED entails high quality and high level of technology that related application products are bound to pass the accreditation of various strict automobile regulations. In general, after the strict evaluation and selection, suppliers will not be easily replaced that suppliers can enjoy higher added-value and sustainable profit. It is expected that related firms can proactively commit their resources for a larger market share.

Invisible LED could be applied to different areas of application. Under the sustainable growth of the market of signal transmission and sensor function application, the terminal application market is developed in diversity including intelligent home application, wearable electronic devices, indoor control of visitor flow, and remote sensor. The launch of these products will drive for further stable growth of the market, and will be further pursued by firms with greater effort.

5.1.3 Technology and R&D Overview

1. R&D expenses invested in the most recent year and up to the date of publication of the annual report

Unit: NT$ thousand

		Unit: NT$thousand
Year	R&D expenses	as apercentage of revenue(%)
2023	2,587,406	11.60

Note: IFRS (consolidated entity) is adopted.

1. Successfully developed technologies or products in the most recent year and up to the date of publication of the annual report

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The product items of the three major business entities of epi wafers and chips", "packaging/modules" are roughly classified as follows:

Epi wafers and Chips:

• (1) Development of high-quality and high-efficiency LED products for automotive backlighting and ambient lighting applications

• (2) Development of flip chip LED products for automotive daytime running lights and headlights.

• (3) Development of flip chip LED products for high-power and highreliability automotive headlight applications.

• (4) Development of LED products for eye protection with low blue light and high-luminance LED backlighting.

• (5) Development of LED products for high-end LED flash.

• (6) Development of red, blue and green Mini LED products for ultra-fine pitch displays.

• (7) Development of high-efficiency/high-uniformity blue and green Micro LED Epi Wafer.

• (8) Development of high-efficiency blue Micro LED Epi Wafer grown on 6/8inch silicon substrates.

• (9) Development of vertical RGB Micro LEDs for micro and high-resolution display applications.

• (10) Development of Micro LED CoW for application in micro and highresolution displays.

• (11) Development of high-performance SWIR LEDs and photodiodes with high signal-to-noise ratio.

• (12) Development of Full-spectrum light-detecting diode components for wearable devices.

• (13) Development of new types of near-infrared light products for the facial recognition function of mobile phones/laptops.

• (14) Development of new automotive near-infrared products required by automotive driver monitoring systems.

• (15) Development of high optical output power SWIR LEDs and sensing diodes. The combination of both can be applied to various bio-sensing applications and proximity switches of mobile devices.

Packaging and Modules:

• (1) In addition to taking the initiative to engage in the mass production of the first-generation large beam angle direct-lit automotive Mini LED in the industry, the Company also launched the second generation automotive large-angle direct-lit Mini LED. Through the optimization of the package structure, the performance will be improved by 30% and, therefore, may meet the demand for new generation energy vehicles’ energy consumption.

• (2) Launch the first-generation thin Mini Lens blue COB light board; reduce the thickness of the backlight module and achieve a wide-color gamut

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display effect.

• (3) Develop a full range of PLCC 2/4/6 LEDs for exterior indicator lights and successfully implement them to Tier 1 customers worldwide.

• (4) Develop the LED package and module products for RGB ambient lighting, combined with smart surface tiles to form a linear or 2D dynamic interactive effect of light sources.

• (5) Launch the off-vehicle interactive display to meet the requirements of grille/Logo high-brightness design, rear Red/Super Red display requirements, as well as the application of off-vehicle RGB color display, which can provide pre-stored images of safety lighting. It may also provide warnings or real-time images of the driving environment to surrounding pedestrians and vehicles behind.

• (6) Develop the micro LED head-up display, which is an actively driven Micro LED transmissive display that effectively improves the flickering phenomenon of passive driving. The high penetrating rate can be applied to vehicles, home appliances and shopping malls, etc.

• (7) Engage in the mass production of the second generation low blue LED to further reduce the proportion of harmful blue light; for business or home NB and MNT computer users for a long time, reduce the damage caused by the blue light further.

• (8) Engage in mass production of low power CSP products, which can be used in keyboard backlight products, improve the uniformity of keyboard light source and reduce energy consumption, increase the standby time of end products, and achieve energy-saving effects.

• (9) Research and develop IR light sources with low human eye response, which can be applied to invisible security systems, car driving monitoring and interior monitoring systems, laptop face unlocking authentication and other applications to improve the user experience.

• (10) Develop the SWIR transmitting and receiving components for use in light-sensor modules to detect more vital signs, such as blood oxygen or skin hydration.

• (11) Research and develop the self-adaptive zone monitoring module, which may be applied to the whole vehicle cabin monitoring and various monitoring applications of individual seat occupants.

• (12) Develop the Micro LED HUD, which is an actively driven Micro LED HUD that uses mass transfer technology to transfer the Micro LED to the TFT glass backplane; the display resolution reaching 640*640 pixel and the dot pitch 0.3 mm, which may effectively improve the flicker phenomenon of passive drive; the overall penetration rate reaching 60% may be applied to automotive, home appliances and shopping malls, etc.

• (13) Develop industry-leading QD LED packages and light bars that can be applied to ultra-thin and wide-color high-end creative notebook products, and meet the high-end application requirements of DCI-P3 and Adobe RGB dual 100.

• Future R&D Plans and Estimated R&D Expenses

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NT$2.47 billion is expected to be invested in R&D in 2024. The R&D projects, including the R&D projects of “epiwafers and chips,” “packaging/modules” and “III-V compound semiconductor optoelectronic products,” are described as follows:

Epiwafers and Chips:

• (1) Applied to high-quality and high-efficiency horizontal chips for automotive backlighting and ambient lighting.

• (2) High-luminance and high-reliability LED chips applied to automobile headlights.

• (3) High-performance polycrystalline high-voltage flip chip LED die for TV backlight applications.

• (4) High-luminance LED backlight applied products with the functions, such as low blue light and eye protection.

• (5) Low current operation LED chips applied to display products.

• (6) Micro LED Epi Wafer and chip technology applied to the development of transparent displays.

• (7) Technology for the development of new high-performance Micro LED Epi Wafer and chip.

• (8) Technology for the development of Micro LED COC1 technology.

• (9) Development of long-wavelength photodetector Epi Water and component development.

• (10) Development of visible light/NIR/SWIR LED thin products.

• (11) Development of high-efficiency III-V solar cells.

Packaging and Modules:

• (1) In response to the popularization of electric vehicles, develop a new generation of high-efficiency off-board indicator light sources to further improve LED efficiency and reduce thermal resistance.

• (2) Develop interactive indicator lights with large/small spacing with different spacings, which can be clearly viewed even in the ambient sunlight during the day and may achieve the optimal optical effect and optimization of cost.

• (3) Develop a new generation of ambient outdoor lighting products that increase heat dissipation and reduce driving power consumption to significantly improve LED efficiency.

• (4) Develop the new generation off-vehicle high-luminance interactive displays that provide seamless splicing of multiple boards and lowglare surface technology to meet the needs for off-vehicle applications.

• (5) Develop high luminous efficiency and low blue light backlight module LED light sources for backlight source applications.

• (6) Develop high luminous efficiency and wide-color backlight module LED light sources for backlight source applications.

• (7) Develop high luminous efficiency and long-life backlight module LED light sources for backlight source applications.

• (8) Develop thin and narrow-bezel backlight module LED light sources for

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backlight source applications.

• (9) Develop multi-partition backlight module panels containing driving components for backlight applications.

• (10) LED components for smart display applications and PPI 10-50 active light source modules with built-in driving components

• (11) Small-pitch RGB display applications and LED packaging and module products for Mini LED display needs.

• (12) Develop RDL and micro package and other miniaturization process technologies.

• (13) Develop QD LED packaging and light bars with wide-color gamut technology.

5.1.4 Long and Short Term Business Development Plans

1. Short Term Plan

2. (1) Focus on the technology development of visible light and infrared light LED epiwafers and chips to improve product performance and increase profit.

3. (2) Provide LED products with high light intensity and cost advantage, and provide cost-effective products with core competitiveness of high lm/$ to satisfy customers.

4. (3) Expand marketing channels in Europe, the United States, Japan and South Korea, increase the proportion of export sales and increase the market share in the international market.

5. (4) Quickly respond to customer needs and adjust product portfolios to meet rapidly changing markets.

6. (5) Closely integrate with end customers in the LCD industry and related supply chains, and accelerate the introduction of high value-added products such as mini LED backlight solutions and micro LED mass production solutions.

7. (6) In terms of lighting, move toward niche markets and develop smart and healthy lighting products. Advance towards the niche lighting market, and develop outdoor and smart and health lighting products.

8. (7) In terms of RGB display applications, continue to develop various packaging sizes and pixel pitch modules to accelerate market layout. Develop ambient signal light technology for increasing the shares of the notebook PC, eSports, smart home appliances, and network communication home appliance indicator light market.

9. (8) RGB display applications continue to develop modules of various package sizes and pixel pitches to accelerate market layout.

10. (9) In terms of sensing business, continue to focus on the fields of vehiclemounted industrial control, wearable devices, face recognition and home security.

11. (10) Deeply cultivate patented technologies and improve industrial competitiveness.

12. (11) Improve production efficiency, actively develop intelligent manufacturing, and increase automation technology to reduce production costs.

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• (12) Improve the management system and continuously cultivate key technical talents.

• (13) Strengthen information security management, comply with group policies, and comprehensively improve software and hardware protection capabilities.

• Medium and Long Term Plans

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• Improve the Company's independent research and development capabilities, carry out technical cooperation with domestic and foreign research institutions and customers, and invest a high proportion of research and development resources to enhance the Company's longterm international competitiveness.

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• Develop long-wavelength infrared light and short-wavelength ultraviolet light technology, and provide a complete full-band series of products.

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• Strive to be the world's leading LED manufacturer, continuously develop new products and improve LED efficiency, so as to realize unlimited possibilities for LED applications.

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• Continue to strengthen technical design capabilities and strengthen the foundation of patent deployment.

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• Continue to optimize production technology, reduce production costs, and establish more efficient production capacity.

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• Optimize production capacity and perfect the quality certification system, continuously improve product quality, shorten product delivery time, and provide customers with the most satisfactory service.

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• Strengthen international marketing and channels, and enhance strategic cooperation with international customers

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• Increase cross-industry collaboration and platform establishment to improve the international competitiveness of the overall LED industry and the added value of products

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• Establish multiple business collaboration with LED upstream and downstream suppliers to expand the growth of technology and production capacity

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• Improve the conversion efficiency of LED products, so as to reduce heat and save energy.

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• Give full play to the Group’s advantages residing in the one-stop production of LED epitaxy (EPI), Chip, Package, SMT and Module, and establish a factory-in-factory production model in the LED supply chain to reduce the production costs and increase profits.

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5.2 Market and Production and Sales Overview

5.2.1 Market Analysis

1. The Company's main sales areas

Unit: NT$ thousand

		Unit: NT$thousand
Area	2022 Sales amount	% of sales
Domestic sales	2,007,077	9.00
China	12,403,340	55.61
HongKong	1,188,906	5.33
South Korea	1,159,552	5.20
Malaysia	2,203,157	9.88
Japan	1,865,326	8.36
Singapore	503,012	2.26
Other	975,310	4.36
Total	22,305,680	100.00

Note: IFRS (consolidated entity) is adopted.

1. Market Share and Future Supply and Demand and Growth Potential of the Market

According to the forecast of TrendForce, the output value of the overall global LED market will increase from US$12.6 billion in 2023 to US$16.9 billion in 2028, with the CAGR reaching 6.0%. Apparently, driven by the demand in various emerging application markets, the output value of the overall LED industry will continue growing.

For the time being, due to the rise of many applications such as automotive, medical, plant lighting, security control, wearable devices, and smart life, and related companies continue to promote the next generation advanced display technology, it is expected that the output value of the overall LED market will keep growing positively. The main driving force of the market between 2023 and 2028 is expected to come from products such as invisible light LED, automotive LED, Mini LED and Micro LED.

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Source: TrendForce (March 2024)

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• (1) Major LED firms in the international market On January 6, 2021, Epistar and Lextar established ENNOSTAR Inc. through a share swap. Epistar’s production capacity is concentrated in LED EPI and chips, while Lextar focuses on LED packaging and modules. Both parties integrate resources and strengthen the vertical integration of the one-stop service throughout the entire industry chain. Based on the existing LED technology, ENNOSTAR continues to expand the layout in various application fields, including Micro LED advanced display, 3D sensors and optical communications, in order to provide customers with more complete solutions. In the area of LED, major international manufacturers are ams OSRAM, Nichia, Samsung LED, Seoul Semiconductor, Lumileds, and San’an Optoelectronics.

• (2) The prospect of the application market in the future The demand in the LED backlight market has been saturated over the years but newly emerged technologies of Mini LED and Micro LED have gained momentum, which unveiled new opportunity of application in the LED display market. Meanwhile, due to the rise of the mobile application market in the 3D sensor market, the facial recognition function has become the official configuration of international renowned brand smartphones. In addition to mobile phone applications, 3D sensors can also be applied to security systems, crowd detection, driver fatigue detection, biometrics and industrial automation, etc.

3. Competitive Niche

The Company is committed to deploying in automotive, advanced display and intelligent sensors, etc., with high technology threshold and high added value.

• (1) Provide production of LED epi wafer, chips, packing, and module products to demonstrate its advantage through vertical integration. The subsidiaries of the Group include the EPISTAR Group and Lextar Group, and Unikorn Semiconductor Corp., a specialist of research and development and manufacturing of compound semiconductor optoelectronic products. Through the vertical integration of group resources, EPISTAR is mainly responsible for the business of epi wafer & Chips while Lextar is mainly responsible for packing and module, and seeking joint venture with third parties in intellectual properties for diversification of the scope of products and intensification of technology in depth to provide full-range services and products for the customers.

• (2) Among the few suppliers of full spectrum epi wafer and chips The A1GaInP products of the Company cover high brightness epi wafer and chips in green, yellow, orange, and red colors, and the InGaN products cover epi wafer and chips in violet, blue, and green colors. In the area of invisible LED, the Company provides UV and IR products from 365 nm to 1550 nm. The advantage in full spectrum and one-stop

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shopping can satisfy the needs of the customers in different applications.

• (3) Adjust product portfolio for rapid response to market demand The Company cared changes in market demand permanently, and has the flexibility to adjust the product portfolio and R&D capabilities, which constitute one of the Group’s competitive niches. For example, in 2023, Epistar has successfully developed the InGaAs PD with the highest Sensitivity in the world. Compared to the industry’s practice which blocks light sources with black plastic, the Epistar solution can improve the S/N Ratio more than 3 times and the ultra-low dark current lower than that in the industry by 50%, thereby greatly improving the Sensitivity of the device. Meanwhile, it may also provide customers with the Best Total Solutions for transmitting and receiving components in the SWIR band sensor application. In the same year, Epistar announced the latest breakthrough in sensor technology. The shortwave infrared (SWIR) product line extended the wavelength to 1650 nm (1300 nm wavelength products mainly used in consumer electronics) and also provided excellent performance far superior to the past. Coupled with the packaging, the rear lighting power reaches 30 mW, leading the mass production level of the industry by more than 15%.

In 2023, Lextar has successfully developed the world’s first LED green packaging product – Bioxtar[TM] , which uses eco-friendly packaging materials extracted from plant materials, containing the biomass reaching 75%, as the world’s first LED packaging product extracted from natural plants, in order to overcome the difficulties residing in the traditional petrochemical materials, such as operability and optical transparency in the packaging process. The Company has successfully developed LED products which can be mass produced with high transparency, and completely overturned the impression that biobased materials are not suitable for LEDs. The Company not only achieves eco-friendly practices but also complies with the LED product specifications and requirements. This is an important milestone in the development of green products of Ennostar Group, and it builds a new era of green sustainability in the industry.

In recent years, the Group has also developed a variety of III-V compound semiconductor optoelectronic products to meet customers’ needs for emerging application markets.

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III-V compound semiconductor optoelectronic products

Item	Product
Micro LED	Next generation display technology
Laser sensing	Face/fingerprint recognition, body sensing,measurement,LiDAR
Optical communication	Optical fiber communication for 4G/ 5G --> high-speed, massive data exchange (cloud, engine room)

(4) Excellent technical ability and skilled management team The R&D function of Ennostar has more than 2,500 professionals and the management team is consisted of members with many years of experience in LED and TFT LCD. The Group is fully capable of integrated manufacturing technology and well-seasoned in supply chain management. Ennostar is indulged in the R&D and manufacturing of LED to allow the products applicable to different LED application areas. As of the end of 2023, Ennostar and its subsidiaries have applied for more than 6,800 patent registration worldwide with approval of more than 6,000 patents. In 2023, Ennostar has acquired 236 patent registration all over the world. With the solid foundation of intellectual property right portfolio, the Group protects the technologies and products of the Company.

Ennostar has established a designated body charged with intellectual property right management to assist its subsidiaries such as EPISTAR and Lextar to continue the improvement of intellectual property management mechanisms. With systematic management and the corporate planning of the Company, the Group adjusted the intellectual property portfolio to maintain reasonable cost of protection and launch for the development of new technologies while giving necessary protection in responding to the risk deriving from intellectual property rights. This not only helps to safeguard the operation freedom but also bolster the competitive advantage of the Company.

1. Favorable and Unfavorable Factors and Countermeasures of the Development Prospect

2. (1) Favorable Factors

   • Wide range of product applications and great market development potential

==> picture [10 x 9] intentionally omitted <==

• High-luminance LED Epi Wafer and Chip have a wide range of applications due to their small size, low power consumption, and long life, such as outdoor large-scale display screens, traffic information billboards, and backlights, such as driver panels used in automobiles. Exterior automotive applications, such as third brake lamp, fog lamp, tail lamp, direction lamp or warning lamp;

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traffic signs, such as traffic lights and pedestrian lights; backlight sources, such as LCD and notebook computer backlight sources.

First of all, Mini LED backlights have high display effects with high brightness, high contrast, and high image quality (local dimming, HDR), so they can compete with OLED displays on the market and, with clarified market specifications, they are entering the stage of mass production. The products primarily aim at the high-end markets, such as TV and professional display products that have higher requirements on visual effects.

Secondly, LED invisible light applications include security monitoring, mobile device biometrics (face, iris and fingerprint recognition), wearable devices (heartbeat, blood oxygen and blood pressure sensing) and optical sensors. Its market is developing rapidly. Besides this, in consideration of Covid-19, biometric detection applications related to human health have also begun to be implemented into the SWIR LED products significantly.

==> picture [9 x 9] intentionally omitted <==

• Complete industrial structure of LED with barrier-free and rapid moving marketing channels.

• The structure of LED industry of Taiwan is perfect with stable and well-developed technologies and high efficiency in production. The production value of the LED industry of Taiwan is second to none in the world. With the effort in developing overseas market, the Company has broad clientele base all over the world. With the large-scale downstream operation as foundation, the Company has strong competitive advantage in marketing. Strategic alliance with LED downstream firms is one of the features of the Company. Through professional division of labor and strategic alliance, the Company can quickly keep abreast of the market trend and quickly adjust the direction of product production in order to bolster the competitive power.

==> picture [10 x 9] intentionally omitted <==

• Future Application of MOVPE Core Technology

• Since the MOCVD epitaxial system has better control over material purity, epitaxial layer thickness and uniformity than LPE and VPE epitaxial technologies, it is used in the production of highbrightness LED and laser diode (LD) wafers, and is also the main epitaxial technology for the manufacturing of various optical fiber components and detectors for optical fiber communications, as well as various emitting components for microwave communications. For example, long-wavelength LDs for optical fiber communications, vertical cavity surface-emitting lasers (VCSELs), solar cells and hetero-bipolar monocrystals (HBTs) for wireless communications all use the MOCVD technology to grow

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epi wafers. Epistar's operation and technical team has many years of rich experience in MOCVD epitaxy growth technology development, and has exclusive experience in MOCVD system design and improvement; it will have considerable competitiveness in the production of optical fiber communication and wireless communication components in the future.

• (2) Unfavorable Factors and Countermeasures

New competitors in LED lighting are actively investing, making the market competition fierce

Competitors in market tend to manufacture high brightness LED as the objective. The competitors in Mainland China can expand their production capacity very quickly with price competition as the mean to secure purchase orders. This makes competition market more acute.

Countermeasures:

The Company adopts a “dual transformation” in its business strategy. One is “Go Premium” (creating added value) to develop differentiated products with higher gross margins, and the other is “Go Vertical” (deepening verticals and exploring new areas), such as the integration of upstream and downstream dealers and software and hardware. The dual transportation plans are implemented at the same time to upgrade the operating scale and value of Ennostar.

“ Go Premium”: As a well-recognized leader in the industry, the Company has implemented the Mini LED crystal grains and modules already mass produced into diversified application fields, such as automobiles and TVs, and developed two different backlight technology applications, Mini LED COB and POB. The Company also focuses on the research and development of ultra-fine-pitch flip chip Mini LED 0404 packaging and special module technology. In the future, it will lead the market by introducing ultra-small flip chip Mini LED 1111 with its own IC packaging technology. In the field of Micro LED, the Company has achieved size breakthroughs that are closer to the mass production target than the industry peers, and developed highuniformity RGB CoW and GaN on Silicon technologies to meet different customers’ needs

“ Go Vertical”: In the future, the Company will be committed to developing the three main application markets, including “automotive application market,” “advanced display application market” and “smart sensor application market,” in addition to the “new field application market.” Meanwhile, with the stable financial structure, solid R&D energy and resource utilization, the Company will integrate the upstream, midstream and downstream value chain and industrial layout, consolidate its “chain” competitive strength, and build a competitive ecosystem.

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• 5.2.2 Important Applications and Production Processes of Main Products

• Important Applications The high-luminance LED products produced by the Company are characterized by small size, low power consumption, low heat generation, and long service life, and are applied extensively:

  • (1) Indoor displays, large-size outdoor displays and traffic signs/traffic information boards.

  • (2) Automotive Industry

    • Interior: backlights of the meter panel, reading lights and indicator lights.

==> picture [10 x 9] intentionally omitted <==

• Exterior: 3rd brake lights, fog lights, taillights, direction lights, warning lights, daytime lights.

==> picture [9 x 9] intentionally omitted <==

• (3) Consumer Electronics All kinds of home appliances, indicator lights and digital channel displays

• (4) Communication Industry Backlights and strobes for mobile phone message display panels.

• (5) Information Industry Indicator lights for PCs and peripheral devices thereof, backlights for small LCD monitors, and scanning light sources for photocopiers.

• (6) LCD TV/monitor backlight application and Projector light source, etc.

• (7) Outdoor landscape and architectural lighting, street lights, indoor home lighting, and industrial and commercial lighting.

• (8) Special function lighting applications for agricultural lighting, medical lighting and UV.

• (9) (IR) LEDs for facial recognition and iris recognition of information products.

• (10) (NIR&SWIR) LED light sources for biosensing of wearable devices.

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2. Production Process

• (1) Epitaxy production process

==> picture [274 x 339] intentionally omitted <==

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

Special gas Organometallic Substrate
Organometallic vapor
phase epitaxy
(MOVPE)
Epiwafer
Epiwafer feature inspection
⚫ Composition
⚫ Wavelength
⚫ Carrier concentration
Photoelectric characteristic
production test
Warehousing
Client
Chip
Production
Process
----- End of picture text -----

Source: Compiled by Ennostar in March 2024

(2) Chip Production Process

==> picture [350 x 209] intentionally omitted <==

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

Non-conforming
products
Epiwafer
Client
3. Etching and cleaning 1. Photoresist coating Warehousing
production test
Lithography process
Cleaning and processing Metal thin film evaporation 2. Exposure and development Chip cutting and cleaning Photoelectric characteristic
----- End of picture text -----

Source: Compiled by Ennostar in March 2024

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• (3) Packaging Process

==> picture [298 x 78] intentionally omitted <==

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

Wire Dispensing / Punching /
Die Bond Test / Sorting
Bonding Molding cutting
Packaged in
Warehousing
rolls
----- End of picture text -----

Source: Compiled by Ennostar in March 2024

• (4) SMT process

==> picture [309 x 80] intentionally omitted <==

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

Solder Paste LED
Baking AOI Test / ESD
printing Mounting
Repair Packaging Warehousing
----- End of picture text -----

Source: Compiled by Ennostar in March 2024

• (5) Assembly process

==> picture [351 x 102] intentionally omitted <==

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

Electrical test Assembly Luminance test Visual inspection
Packaging Stock-in
Source: Compiled by Ennostar in March 2024
----- End of picture text -----

5.2.3 Supply Status of Main Raw Materials

The Company specializes in the production of light-emitting diodes (LEDs). Its products cover Epi Wafer, Chip, packaging, SMD and modules, etc. The main raw materials and components include sapphire substrates, GaAs substrates, special gases, metals, light-emitting diodes, brackets and packaging plastics. The Company has always maintained good cooperative relations with domestic and foreign raw material suppliers to improve the supply stability, and purchased key raw materials and components from more than two suppliers to maintain the purchasing flexibility and mitigate the risk over excessive concentration of raw materials.

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5.2.4 Name list for major procurement and sales customers

1. Major sales customers Unit:Thousands of NTD

	2022	2022			2023	2023
Name	Amount	Percentage in annual net sales amount(%)	Relationship with issuer	Name	Amount	Percentage in annual net sales amount(%)	Relationship with issuer
Customer C	7,001,287	24.24	None	Customer B	2,755,184	12.35	None
Customer B	2,660,661	9.21	None	Customer D	1,977,254	8.86	None
Customer D	1,786,146	6.19	None	Customer C	1,507,573	6.76	None
Others	17,430,156	60.36		Others	16,065,669	72.03
Net sales	28,878,250	100.00		Net sales	22,305,680	100.00

Note: Consolidated entities.

Reasons for the increase/decrease:

Due to the overall economic impact, the Company’s operating revenue has decreased. Therefore, the customer portfolio will change relatively, provided that there is no risk of over concentration of sales.

1. Major procurement suppliers Unit: Thousands of NTD

	2022	2022			2023	2023
Name	Amount	Percentage in annual net procurement amount(%)	Relationship with issuer	Name	Amount	Percentage in annual net procurement amount(%)	Relationship with issuer
Supplier A	1,270,250	9.60	None	Supplier C	1,664,925	14.30	None
Supplier B	1,135,858	8.59	None	Supplier B	1,077,691	9.26	None
Supplier C	1,094,293	8.27	None	Supplier E	868,935	7.46	None
Supplier D	797,821	6.03	None	Supplier A	666,897	5.73	None
Supplier E	598,853	4.53		Supplier D	421,991	3.62
Others	8,331,919	62.98		Others	6,940,703	59.63
Net procurement amount	13,228,994	100.00		Net procurement amount	11,641,142	100.00

Note: Consolidated entities.

Reasons for the increase/decrease:

As the sales portfolio is changed, the supplier ratio is adjusted slightly. Notwithstanding, the Company continuously maintains a close cooperative relationship with suppliers, and there has been no major change.

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5.2.5 Production capacity/output value in the Last Two Years

Unit: Dies; thousand pieces, in the case of packages and modules; NTD thousand

Year		2021			2023
Production capacity/ output value Majorproducts	Production capacity	Production capacity	Production value	Production capacity	Production capacity	Production value
Dies	1,594,402,839	1,280,440,521	17,394,559	1,907,840,678	1,580,467,923	14,107,050
Packages and modules	8,309,448	4,839,383	6,924,459	8,325,342	4,776,906	6,020,077
Total	－	－	24,319,018	－	－	20,127,127

Note: Consolidated entities.

5.2.6 Production capacity/output value in the Last Two Years

Unit: Dies; thousand pieces, in the case of packages and modules; NTD thousand

Year	2022	2022	2022	2022	2023	2023	2023	2023
Sales capacity/ output value Majorproducts	Domestic sales		Overseas sales		Domestic sales		Overseas sales
	Capacity	Value	Capacity	Value	Capacity	Value	Capacity	Value
Chips/dies(Note2)	7,736,565	1,524,294	1,193,483,65 6	19,441,693	7,561,572	1,284,137	1,460,508,752	13,272,728
Packages and modules	212,110	447,973	1,633,974	6,529,786	86,463	406,797	2,026,206	6,267,797
Others	－	286,239	－	648,265	－	316,143	－	758,078
Total	－	2,258,506	－	26,619,744	－	2,007,077	－	20,298,603

Note1: Consolidated entities.

Note2: Chips are not the main sales product, so they are only included in the sales value, and not the sales volume.

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5.3 Human Resources

Human Resources	Human Resources
Year		2022	2023	February29,2024
Number of Employees	Management	1,733	1,422	1,410
	R&D and Technician	2,358	2,567	2,543
	Direct	4,764	4,484	4,592
	Total	8,855	8,473	8,545
Average Age		35.7	35.5	35.5
Average Years of Service		6.6	7.1	7.5
Education (%)	Ph.D.	1%	1%	1%
	Masters	16%	16%	16%
	Bachelor’s Degree	48%	44%	43%
	Senior High School & Below Senior High School	35%	39%	40%

Note: Consolidated entities.

5.4 Environmental Protection Expenditure

• 5.4.1 The loss or penalty caused by environmental pollution during the latest year, estimated current and future possible amount and countermeasures:

• 1 、 Any losses or indemnity from pollution of environment: None.

• 2 、 Matters of violations of environmental protection regulations from the environmental protection audit results

Factory site	Disposal date and disposal ref. no.	Violation of provisions of laws and regulations	Violation of contents of laws and regulations	Disposal contents	Response measures
Unikorn Semicondu ctor Corporatio n	February 20, 2023 Fu-Shou- Huan- Shui-Zi No. 1120032 862	Paragraph 3, Article 24 of the Water Pollution Control Act	The personn el in charge of wastewa ter (sewage) appointe d by the Compan y jointly with Epistar are also appointe d as the Grade A dedicate d waste disposal personn el in	Fined NT$10,000 with one- hour environme ntal course	The Company and Epistar have appointed dedicated personnel responsible for disposal of wastewater (sewage) and supporting personnel qualified with a certificate/lice nse.

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			Epistar Power Plant No. 8.
Epistar Plant N5	Septemb er 6, 2023 Fu-Shou- Huan- Kong-Zi No. 1120133 235	Subparagr aph 1, Paragraph 2, Article 69 of Air Pollution Control Act	The designat ed agent filed the applicati on after more than 15 days upon occurren ce of the fact.	Fined NT$200,00 0 with two- hour environme ntal course	The relevant personnel are requested to apply for related services in the future. It is necessary to confirm whether the application date is consistent with the date of the actual requirement.

5.4.2 Countermeasures and Possible Expenditure

In accordance with the spirit of ESG, the Group is committed to mitigating the impact posed by production activities on the environment, and strives to reduce the consumption of natural resources by following the 3R model, namely Reduce, Reuse, and Recycle, at the factory construction and operation stages. Meanwhile, the Company continues to improve energy efficiency, reduce greenhouse gas emissions and fulfill corporate social responsibilities, in order to achieve the goal of sustainable development.

As a member of the global village, the Group comprehensively considers the overall environmental management performance for managing the pollution prevention and environmental protection management related expenses based on the spirit of continuous improvement of the environmental management system, in order to build a low-pollution production environment. The Company also pays close attention to the progress of amendments to new environmental laws and international conventions, and prepares appropriate countermeasures. It will prepare corresponding budgets in a timely manner.

5.5 Labor Relations

• 5.5.1 Planning and implementation of employee benefit plans, continuing education, training, retirement systems; negotiation of labor relations and various safeguarding measures of employee’s rights and interests.

The Company has emphasized maintenance of fair labor-management relations. We supply generous remuneration packages, a flexible leave system, and a complete insurance system to provide a healthy and friendly work environment to prevent the loss of employees and retain talents.

1. Employee Benefit Plans

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For the purpose of safeguarding employees and their conditions of daily life, the Company not only has provided basic guarantee, but also assisted and sponsored various benefit plans, and help organizing the employee welfare committee for implementing and planning all kinds of matters of employee benefits. Please refer to the current measures below:

• (1) Employee bonus plan;

• (2) Three important Chinese holiday bonus, incentive bonus, employee patent application reward, employee proposal bonus;

• (3) Entitled to labor insurance, health insurance, and group insurance;

• (4) Subsidy of wedding, funeral, birth, hospitalization childcare subsidies, birthday gift money and May Day gift money;

• (5) Year-end party, subsidy of social clubs, traveling subsidy, departmental activity Fee, newspapers & magazines, various sports events and leisure activities;

• (6) New staff members’ wage is higher than the minimum wage under Labor Standards Law no matter the gender.

• (7) For the employee shareholding trust, the Company makes the 100% contribution relatively, to share the performance results of the Company’s operations with employees, and encourages employees to save and add value to their retirement lives, creating a win-win situation.

For the full protection of employees’ health; healthy “body”, satisfaction in “mind” and joyful “spirit”. We’ve introduced three elements of healthy “body”, satisfaction in “mind” and joyful “spirit” into our employee health care project. It’s from healthy body and knowledge, satisfaction in “mind”, and self-mind dialogue, connecting the health activities in our FAB and extending to family to create a complete, good, and healthy workplace to reach a physical, mental, social, spiritual balance. Please refer to below situations how we take care of our staff:

• (1) Physical checkup management

• (2) Health promotion programs

• (3) Operational health risk prevention and management

• (4) Infectious disease management

• (5) Occupational injured employee healthcare

• (6) Maternal protection & healthy workplace

• (7) A great diversity of activities and soft lectures

• Employees’ continuing education and training

• In order to achieve the Company's business objectives, the Company continues to develop employees’ work performance, and develop the training roadmap to launch a series of training programs based on the training structure, including the management series, quality series, technical series, environment, safety and health series, professional series by function courses and orientation training, etc. Meanwhile, in order to assure the Company’s product quality and safety, all new employees shall attend the orientation training, and specific employees shall pass specific qualification

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evaluation and undergo re-evaluation periodically to ensure that the employees hold the competency to satisfy the qualifications required for the specific duty.

The overall training framework is based on the concept of ability development and phased training, including the most basic training for new recruits (12.5 hours in total, including training and promotion of human rights related norms), generic skills, professional skills, management skills, and self-development capacity. The generic skills refer to the training on abilities related to corporate culture, general education courses, human rights, information security, anti-corruption, anti-trust, ethical management, etc. The main purpose is to define the key behavior index based on the corporate culture and values, in order to enable the employees to understand and act in line with the corporate culture. The professional competency courses, such as technical training courses and quality courses, are set as required and elective ones depending on the nature of work, in order to enhance professional competitiveness by rooting in the professional field. Further, the Company also provides talent training courses, such as internal trainer training and production line instructor training; and management skill training courses, including basic, medium and advanced management training, such as performance interview, recruitment interview skills, and practical management of production line leaders/supervisors, in order to establish the language consistency of the management and improve the leadership to drive the team to achieve the highest performance. The Company hopes to take advantage of the internal training mechanism to help employees improve their professional skills, thereby enhancing the Company’s overall competitiveness

In addition, the Company spares no effort to implement the protection of trade secrets, intellectual property rights, and information security, among other things, to secure the fruits of the employees’ hard work and the Company’s competitiveness, while preventing the leakage of important company information. Therefore, the “Management Regulations of Classification and Protection of Data” are established, to cultivate the employees’ habit of document protection in daily jobs, and serves as the basis for relevant regulations of document acquisition, processing, transmission and utilization; the Company has also established an “Information Security Management and Review Committee” to further improve information security goals. Every employee needs to accept information security education and training, to comply with the relevant laws, technologies, and expectations of stakeholders. It is also linked to business strategies. All employees must comply with the “Management Regulations of Classification and Protection of Data” and perform the fiduciary obligations.

To this end, the new staff shall complete the online courses about “Introduction to Intellectual Property Rights,” “Information Security Policy” and online course for “Information Confidentiality Classification” to enable all of the staff to understand the Company’s policy and control requirements,

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in hopes of achieving the educational propagation and strengthening the staff’s awareness toward intellectual property rights and prevention of confidential information disclosure.

In 2023, the Ennostar Group employees’ participation in education and training (including education and training on human rights policy and ethics and morality), as shown in the following table:

Total training cost (NT$thousand)	Total training hours	Total number of trainees
7,894	97,702	48,086

1. Retirement Systems

2. To fulfill social responsibilities and stabilize the lives of employees after retirement, the Company and its domestic subsidiaries have established the “Regulations Governing Employee Retirement” pursuant to the Labor Standards Act and the Labor Pension Act, and make monthly contributions pursuant to laws and regulations. The old and new system of retirement regulations are described generally as below:

Pension system	Old system	New system
Legal source applicable	Labor Standards Act	Labor Pension Act
Contribution approach	2% of the total salary is contributed to the retirement fund every month, to be deposited in the dedicated account in “Bank of Taiwan” under the name of the “Labor Retirement Reserve Fund SupervisoryCommittee.”	6% of the salary is paid monthly to the employee’s personal account with the Labor Insurance Bureau as the labor pension.

The Group’s subsidiaries in the China contribute the pension insurance funds based on a certain percentage of the total salary of local employees every month pursuant to the pension insurance system stipulated by the government of People’s Republic of China. The retirement pension of each employee is managed and arranged by the government, and the Group has no further obligations other than the monthly contributions.

1. Labor-Management Agreements

2. Harmonious labor relations have always been the major management policy of human resources management. We have established a good communication and consultation channel so that employees can work comfortably and maintain high efficiency. Hence, we have established the Employee Relations Department to provide assistance by integrating professional staff and experts both internally and externally to help solve problems or pressures from work or daily life. We also provide confidential and professional external services and consultations with other professional resources.

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Our internal communication channel includes an exclusive suggestion box that enables employees to express their opinions, all of which are kept confidential and listed into labor relations meeting for discussion and followups. We also set up a being harassed while performing duties hot line (7885) and mailbox available to employees, job applicants, and suppliers, which will be responded timely. Further, we communicate and coordinate with employees through formal channels, if there is major business change that may affect the employees’ rights & interests. We hope to provide the best working environment for all employees.

The Group companies hold face-to-face communication meetings with employees from time to time. Through employee communication meetings, employees are provided with the further understanding about the Company’s operating positioning, Group’s vision, mission and strategic blueprint; employees can also provide opinions or suggestions to the Company through communication meetings to enhance the chances of mutual communication.

1. Working Environment and Employee Safety Protection Measures

2. To secure a safe working environment for employees, please refer to the safety protection measures below:

3. (1) To ensure a safe working environment for employees, the Company has set up a professional environmental and safety team to formulate “Decreasing Occupational Accidents program” and give instructions to relevant departments to practice.

4. (2) We conduct safety and health training for new staff members and inservice employees.

5. (3) We conduct annual environmental assessment in working area to ensure the quality of working environment.

6. (4) We conduct annual physical checkup for those who perform special operation and general physical checkup for all active employees for every two years.

7. (5) We have the medical staff and medical room located on each site according to laws for preliminary care and further medical treatment at the time of emergency. We also assign occupational disease specialist/doctor in our factory to supply relevant medical care & consultation services and referral services with other medical organization outside the plant.

8. (6) Explore the reasons for unusual incidents, and take the necessary actions for prevention countermeasures.

9. (7) Each department will establish and implement automatic review management plan according to regulations. Each month, the management personnel will also implement monthly inspections on the onsite environment and safety.

10. (8) Establish emergency response management regulations, and create onsite emergency response organization, set up emergency response equipment, and implement response drills.

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In addition to above protection measures, we also provide friendly working environment as follows:

• (1) Various recreation facilities (ex: treadmill, gymnastic apparatus, table tennis, billiard, yoga room...)

• (2) Various convenient store and café;

• (3) Complete medical room equipped with breast- feeding rooms;

• (4) Spacious and joyful dining environments, diversified dining choices and meal allowances.

6. Procedures for Preventing Insider Trading

The internal material information handling and management to prevent insider trading are included in the internal control system, including systems related to the evaluation procedures for releasing material information, the retention of report and approval records, and the handling of violations. The unit handling the internal material information consists of the members from the Finance, Accounting, and Risk Management Office, Enterprise Development Office; Legal and Administration Office; and Information Management Office. The Finance, Accounting, and Risk Management Office is responsible for disclosing material information on the MOPS. The Enterprise Development Office is responsible for dealing with external news media, and notifying all employees, managerial officers and the Board from time to time to remind them to monitor if there is any material information required to be disclosed pursuant to laws, and inform them of relevant regulations, to prevent their violations or occurrence of insider trading, as the basis for evaluation. The regulations are accessible from the company website or the internal regulations for learning.

Said personnel may access the internal important information due to their identity, occupation, or relation, who shall perform their duties and fulfill their obligation as a good administrator with due diligence and also exercise their authority in a highly self-disciplined and careful manner to ensure strict compliance with the requirements for processing, disclosure and confidentiality of important information defined by the competent authority, or shall be required to sign the non-disclosure agreement case by case, if necessary.

• 5.5.2 Labor/employer dispute loss in 2022 and as of the publication date of the annual report

report
Factory site	Disposal date and disposal ref. no.	Violation of provisions of laws and regulations	Violation of contents of laws and regulations	Disposal contents	Response measures
Epistar Corporation	May 1, 2023 Zhong-Huan-Zi No. 1120006400	Paragraph 2, Article 32 of the Labor Standards Act	Working hours extended beyond those required by laws	Fined NT$50,000	Establish the alert system of working hour to remind officers of the working hour management and application to prevent abnormal workinghours.

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5.6 Cyber Security Management

• 5.6.1 Cyber security management structure, policy, and concrete management plans and resources invested in cyber security management.

Framework of information security management

The Company continues to refine its information security system and strengthen its safeguarding capabilities. The Chief Information Security Officer is appointed, who is the highest responsible officer for information security, and directly reports to the President. He supervises the implementation of the company-wide information security operations, and the effectiveness of the information security risk management mechanism. The cross-function Information Security Committee is established and convened by the Chief Information Security Officer, to establish consistent information security policies and hold information security meetings every week. It is mainly responsible for the planning, approval and supervision of information security policies, achievement of various indicators, and related regulations. The Company also has the information security management department in place, which is responsible for planning, implementing, coordinating and improving the information security management system, to establish relevant management procedures for compliance, while regularly conducting risk assessments, internal audits, and management reviews.

Structure

==> picture [362 x 135] intentionally omitted <==

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

Information Security Audit
Management Audit Committee Committee
Information security execute team
(Team leader, deputy leader, General director)
Sub-team of Accident Sub-team of Sub-team of information
notification processing information security security audit
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The Company (established in January 2021) has continued to successfully obtain the information security certification of “Information Security Management System (ISMS) ISO/IEC 27001:2013” in 2023, to conduct information risk management in accordance with international standards. The subsidiary, Epistar, obtained ISO 27001 information security certification in 2010. The regular review was completed in November 2023, and the certification will continue to be valid. Both Unikorn and Lextar Electronics also obtained the ISO 27001 certification in 2023. For the new version of ISO 27001:2022, the Group companies also plan to complete the verification of the new version by 2024.

Information security policy

Ensure the normal, safe and stable operation of the Company’s core information

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system services and important information infrastructure, regulate the highest guidelines for the information security management system of the Company’s information center, provide safe and reliable information services, ensure the confidentiality, integrity, and availability of the information assets in the information center and compliance with the requirements of relevant laws and regulations, maintain business continuity, reduce information operation risks, and protect the rights and interests of information service users.

Specific management program

• (1) Vertical-depth defense structure is adopted

• (2) Physical security

• (3) Endpoint security

• (4) Administration of accounts with privileges

• (5) Safeguard of classified data

• (6) Management and protection of trade secrets

• (7) Improvement of information security awareness

• (8) Management of supplier

• (9) Third-party risk evaluation

• (10) Talent incubation

• (11) Report and handling of information security incidents

• (12) Resilience of information systems

Sources invested in the information security management

• (1) Establish an information security unit to perform information security audits and monitor abnormal information security activities.

• (2) The military simulation of hacking incidents is conducted every year, with the review meeting held after the drills, to continuously improve the process and enable the colleagues to be familiar with the procedures.

• (3) The employee information security awareness general education training hours and information security personnel training hours are required. 4 employee fishing drills and related information security training are conducted every year.

• (4) In 2023, the information security certification of “Information Security Management System (ISMS) ISO/IEC 27001:2013” was obtained. All important subsidiaries of the Group have obtained certifications in 2023, and completed the certification of the new version of ISO/IEC 27001:2022 in 2024.

• (5) Strengthen the early warning ability of the information security environment and deploy MDR/EDR for monitoring.

• (6) The employees may only apply for Internet access and mail services after passing the test with full marks during the implementation of the regular information security promotion activities and information security awareness training.

• (7) To improve the professional functions and execution efficiency of the Company’s information security manpower, the employees have obtained certifications including iPAS junior engineer awarded by MOEA, ISO/IEC 27001:2022 Information Security Management System Lead Auditor (ISMS

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Lead Auditor), CISSP (Certified Information Systems Security Professional), CISM (Certified Information Security Manager), CRISC (Certified in Risk and Information Systems Control), EC-Council CEH (Certified Ethical Hacker), EC-Council ECSA (Certified Security Analyst), EC-Council CHFI (Computer Hacking Forensic Investigator), CRTP (Certified Red Team Professional) and OSCP (Offsec Certified Professional), and continue to learn technologies in the information security field.

• 5.6.2 In the most recent year and as of the date of annual report publication, the losses, possible impacts from and countermeasures for major cyber security incidents: None.

5.7 Material Contract

Subject	Counterparty	Counterparty	Contract term	Important restrictive clause
Patent licensing	Research unit	Based on the contract regulations	Non-exclusive patent license agreement	Based on the contract regulations
Technology and patent licensing	Research unit	Based on the contract regulations	Exclusive patent license agreement	Based on the contract regulations
Patent licensing	Company G	Based on the contract regulations	III-V compound semiconductor related technologies	Based on the contract regulations
Technology licensing	Company C	As stipulated in the contract	Technology licensing	As stipulated in the contract
Cooperative development	Company N	As stipulated in the contract	Product development	As stipulated in the contract
joint credit	First Bank、 Ennostar and Epistar	Five years after first use	Loaning of funds	Based on the contract regulations
Licensing	Company C	Based on the contract regulations	Brand and patent license	Based on the contract regulations
Licensing	CompanyＴ	Based on the contract regulations	Patent license	Based on the contract regulations

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6. Financial Information

6.1 Five-Year Financial Summary

6.1.1 Condensed balance sheet

(Consolidated entities)	(Consolidated entities)		Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand	Unit: NT$thousand
Year Items		Years 2019	Years 2020	Years 2021	Years 2022	Years 2023
Current assets		Not applicable	17,846,131	34,603,529	32,663,028	30,676,516
Property, plants & equipment			21,085,475	24,299,352	22,037,075	19,464,972
Intangible assets			4,132,191	4,941,663	4,907,583	1,640,602
Other assets			12,465,211	13,044,638	13,435,784	12,320,372
Total assets			55,529,008	76,889,182	73,043,470	64,102,462
Current liabilities	before distribution		9,144,162	15,764,347	10,312,376	10,922,533
	after distribution		9,144,162	17,130,228	10,312,376	11,600,179
Non-current liabilities			6,673,550	6,519,792	6,070,098	4,035,193
Total liabilities	before distribution		15,817,712	22,284,139	16,382,474	14,957,726
	after distribution		15,817,712	23,650,020	16,382,474	15,635,372
Owners’ equity attributable to the parent company			37,607,381	52,322,245	54,404,269	47,374,174
Share capital			10,887,014	6,852,514	7,547,840	7,529,405
Capital reserv	e		36,115,456	43,830,638	46,421,664	46,447,060
Retained earnings	before distribution		(7,908,188)	2,169,446	654,565	(6,442,832)
	after distribution		(7,908,188)	803,565	654,565	(6,442,832)
Other equity			(1,001,764)	(235,543)	75,010	(24,296)
Treasuryshares			(485,137)	(294,810)	(294,810)	(135,163)
Non-control equity			2,103,915	2,282,798	2,256,727	1,770,562
Total ~~s~~hareholders’ equity	before distribution		39,711,296	54,605,043	56,660,996	49,144,736
	after distribution		39,711,296	53,239,162	56,660,996	48,467,090

Note 1: On January 6, 2021, the Company acquired 100% equity of Epistar Corporation through an exchange with 0.5 common share of Ennostar Inc. for one common share of Epistar Corporation. The aforementioned conversion was in fact a sort of reorganization within organizations under the common control and was substantially a continuity of Epistar Corporation. Within the Company's consolidated financial statements, therefore, the Company recognized the relevant assets and liabilities with the consolidated financial statements of Epistar Corporation at the carrying amounts and deemed to have merged Epistar Corporation ab initio and worked out the consolidated financial statements for the comparative period.

Note 2: The aforementioned data as after distribution refers to the facts after being duly resolved by the Board of Directors.

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Unit: NT$ thousand

(Individual entity)

Fiscal year Items	Fiscal year Items	Years 2019~2020	Years 2021	Years 2022	Years 2023
Current assets		Not applicable	105,825	1,106,527	936,499
Property,plants & equipment			10,157	10,978	10,717
Intangible assets			0	0	0
Other assets			52,707,812	53,516,382	46,582,734
Total assets			52,823,794	54,633,887	47,529,950
~~C~~urrent liabilities	before distribution		501,539	229,610	155,768
	after distribution		1,867,420	229,610	833,414
Non-current liabilities			10	8	8
~~T~~otal liabilities	before distribution		501,549	229,618	155,776
	after distribution		1,867,430	229,618	833,422
Equity			52,322,245	54,404,269	47,374,174
Share capital			6,852,514	7,547,840	7,529,405
Capital reserve			43,830,638	46,421,664	46,447,060
~~R~~etained earnings	before distribution		2,169,446	654,565	(6,342,832)
	after distribution		803,565	654,565	(6,442,832)
Other equity			(235,543)	75,010	(24,296)
Treasuryshares			(294,810)	(294,810)	(135,163)
~~T~~otal of equity	before distribution		52,322,245	54,404,269	47,374,174
	after distribution		50,956,364	54,404,269	46,696,528

Note 1: Where the Company was not incorporated until January 6, 2021, the financial data of the preceding term was nonexistent.

• Note 2: The aforementioned data as after distribution refers to the facts after being duly resolved by the Board of Directors.

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6.1.2 Condensed Statement of Comprehensive Income/Statement of Income

(Consolidated entities)

Unit: NT$ thousand (Except EPS: NT$)

Fiscal year Items	Fiscal years 2019	Fiscal years 2020	Fiscal years 2021	Fiscal years 2022	Fiscal years 2023
Net revenues	Not applicable	14,531,823	36,424,760	28,878,250	22,305,680
Grossprofit		(444,985)	7,618,509	4,981,547	1,167,729
Operating profit and/or loss		(4,486,351)	2,110,130	(465,598)	(4,001,278)
Nonoperating income & expenses,net		(3,936,927)	253,178	(17,870)	(3,383,721)
Netprofit(net loss)before tax		(8,423,278)	2,363,308	(483,468)	(7,384,999)
Net profit (net loss) from continuingoperations		(8,499,242)	1,898,474	(566,383)	(7,322,732)
Netprofit(net loss)		(8,499,242)	1,898,474	(566,383)	(7,322,732)
Other comprehensive profit and/or loss (Net amounts after tax)		520,546	(315,531)	206,055	(269,770)
Total comprehensive profit and/or loss		(7,978,696)	1,582,943	(360,328)	(7,592,502)
Net profit attributable to shareholders of the parent company		(8,109,453)	2,178,349	38,024	(6,782,678)
Net profit attributed to non- controllinginterests		(389,789)	(279,875)	(604,407)	(540,054)
Comprehensive profit/loss attributed to shareholders of the parent company		(7,618,601)	1,935,456	207,398	(7,036,568)
Comprehensive profit/loss attributed to non-controlling interests		(360,095)	(352,513)	(567,726)	(555,934)
Earningsper share(EPS) (NT$)		(15.04)	3.21	0.05	(9.02)

Note: On January 6, 2021, the Company acquired 100% equity of Epistar Corporation through exchange with 0.5 common share of Ennostar Inc. for one common share of Epistar Corporation. The aforementioned conversion was in fact a sort of reorganization within organizations under the common control and was substantially a continuity of Epistar Corporation. Within the Company's consolidated financial statements, therefore, the Company recognized the relevant assets and liabilities with the consolidated financial statements of Epistar Corporation at the carrying amounts and deemed to have merged Epistar Corporation ab initio and worked out the consolidated financial statements for the comparative period

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(Individual entity)

Unit: NT$ thousand (Except EPS: NT$)

ear Items	Fiscal years 2019~2020	Fiscal years 2021	Fiscal years 2022	Fiscal years 2023
Net revenues	Not applicable	2,417,618	244,729	336,750
Grossprofit		2,182,405	65,591	(6,773,381)
Operating profit and/or loss		2,182,405	65,591	(6,773,381)
Nonoperatingincome & expenses		(4,056)	8,707	11,665
Netprofit(net loss)before tax		2,178,349	74,298	(6,761,716)
Net profit (net loss) from continuing operations		2,178,349	38,024	(6,782,678)
Netprofit(net loss)		2,178,349	38,024	(6,782,678)
Other comprehensive profit and/or loss(Net amount after tax)		(242,893)	169,374	(253,890)
Total comprehensive profit and/or loss		1,935,456	207,398	(7,036,568)
Earningsper share(EPS) (NT$)		3.21	0.05	(9.02)

Note: Where the Company was not incorporated until January 6, 2021, the financial data of the preceding term was nonexistent.

6.1.3 Auditors’ Opinions from 2019 to 2023

Year	Accounting Firm	CPA	Audit Opinion
2019	Price Waterhouse Coopers	Cheng Ya-Hui, Hsieh Chih-Cheng	unqualified opinions
2019	Price Waterhouse Coopers	Cheng Ya-Hui, Hsieh Chih-Cheng	unqualified opinions
2020	Price Waterhouse Coopers	Dian-Yi Li, Hsieh Chih-Cheng	unqualified opinions
2021	Price Waterhouse Coopers	Dian-Yi Li, Chien-Hung Chou	unqualified opinions
2023	Price Waterhouse Coopers	Dian-Yi Li, Chien-Hung Chou	unqualified opinions

Note: The Company was newly incorporated on January 6, 2021, deemed as a reorganization of the organizations under the common control. As a matter of fact, the Company is a continuity of Epistar Corporation. （ The statements for Fiscal years 2019~ 2020 were issued in the name of Epistar Corporation and the same for Fiscal year 2021~2023 were issued in the name of Ennostar Inc.. ）

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6.2 Five-Year Financial Analysis

(Consolidated entities)

(Consolidated entities)	(Consolidated entities)
Year Items of analyses		Years 2019	Years 2020	Years 2021	Years 2022	Years 2023
Financial Structure (%)	Debts Ratio(%)	Not applicable	28.49	28.98	22.43	23.33
	Long-term Fund to Property, Plant and Equipment(%)		219.98	251.55	284.66	273.21
Solvency (%)	Current Ratio(%)		195.16	219.50	316.74	280.86
	Quick Ratio(%)		149.55	172.81	262.36	235.77
	Times Interest Earned(Times)		(62.31)	20.51	(2.67)	(37.47)
Operating Performance	Average Collection Turnover (Times)		1.65	3.32	2.38	2.37
	Days Sales Outstanding		221.66	109.93	153.36	154.00
	Average Inventory Turnover (Times)		3.63	6.51	4.55	4.68
	Average Payment Turnover (Times)		7.02	7.37	5.24	5.54
	Average Inventory Turnover Days		100.55	56.06	80.21	77.99
	Property, Plant and Equipment Turnover(Times)		0.70	1.61	1.25	1.07
	Total Assets Turnover(Times)		0.25	0.55	0.39	0.33
Profitability	Return on Total Assets(%)		(14.69)	3.01	(0.62)	(10.45)
	Return on Equity (%)		(19.56)	4.03	(1.02)	(13.84)
	Pre-tax Income to Paid-in Capital Ratio(%)		(77.37)	34.49	(6.41)	(98.08)
	Net Margin(%)		(58.49)	5.21	(1.96)	(32.83)
	Earnings Per Share(NT$)		(15.04)	3.21	0.05	(9.02)
Cash flow	Cash Flow Ratio(%)		19.53	27.61	77.18	21.79
	Cash Flow AdequacyRatio(%)		126.38	89.32	81.98	79.35
	Cash Flow Reinvestment Ratio (%)		2.43	4.67	6.88	2.58
Leverage	OperatingLeverage		N/A	3.41	N/A	N/A
	Financial Leverage		N/A	1.06	N/A	N/A

Causes leading to changes in various financial ratios over the past two (2) years are explained as enumerated below:

1. Times interest earned

Mainly due to the overall economic impact in 2023 causing a reduction of operating revenue, increase in idle capacity, and provision of asset impairment, thereby resulting in a decrease in the times interest earned.

2. Profitability

Mainly due to the overall economic impact in 2023 causing a reduction of operating revenue, increase in idle capacity, and provision of asset impairment, thereby resulting in a decrease in profitability.

3. Cash flows

Mainly due to the overall economic impact in 2023 causing a reduction of operating revenue and losses, thereby resulting in the decrease in the cash flow ratio and cash reinvestment ratio.

1. Leverage

The leverage is not applicable as the 2023 operating income is negative.

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(Individual entity)

(Individual entity)	(Individual entity)
Year Items of analyses		Years 2019~2020	Years 2021	Years 2022	Years 2023
Financial Structure (%)	Debts Ratio(%)	Not applicable	0.95	0.42	0.33
	Long-term Fund to Property, Plant, and Equipment(%)		515,134.93	495,575.49	442,047.05
Solvency (%)	Current Ratio(%)		21.10	481.92	601.21
	Quick Ratio(%)		20.60	476.34	591.67
	Times Interest Earned(Count)		1,616.99	104.48	(42,796.67)
Operating Performance	Average Collection Turnover(Count)		N/A	N/A	N/A
	Days Sales Outstanding		N/A	N/A	N/A
	Average InventoryTurnover(Count)		N/A	N/A	N/A
	Average Payment Turnover(Count)		N/A	N/A	N/A
	Average InventoryTurnover Days		N/A	N/A	N/A
	Property, Plant and Equipment Turnover(Count)		238.02	23.16	31.04
	Total Assets Turnover(Count)		0.05	0.00	0.01
Profitability	Return on Total Assets(%)		4.13	0.07	(13.28)
	Return on Equity (%)		4.16	0.07	(13.33)
	Pre-tax Income to Paid-in Capital Ratio(%)		31.79	0.98	(89.80)
	Net Margin(%)		90.10	15.54	(2,014.16)
	Earnings Per Share(NT$)		3.21	0.05	(9.02)
Cash flow	Cash Flow Ratio(%)		451.11	559.55	539.64
	Cash Flow AdequacyRatio(%)		95.53	54.09	60.37
	Cash Flow Reinvestment Ratio(%)		4.32	N/A	1.78
Leverage	OperatingLeverage		1.00	1.01	N/A
	Financial Leverage		1.00	1.01	N/A

Causes leading to changes in various financial ratios over the past two (2) years are explained as enumerated below:

1. Financial structure

Mainly due to the repayment of short-term borrowings in 2023, resulting in a decrease in debt-toasset ratio.

1. Solvency

2. Mainly due to the repayment of short-term borrowings in 2023, resulting in an increase in the current ratio and quick ratio.

Mainly due to the overall economic impact causing the reduction in operating revenue and profitability, thereby resulting in a decrease in the time's interest earned.

1. Operating performance

Mainly due to the increase in the parent company's only operating revenue in 2023, thereby increasing operational ability.

4. Profitability

Mainly due to the overall economic impact in 2023 causing the reduction in profitability, thereby resulting in the decrease in profitability.

1. Leverage

The leverage is not applicable as the 2023 operating income is negative.

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Glossary － Taiwan-IFRSs version:

1. Capital Structure Analysis

2. (1) Debt Ratio = Total Liabilities / Total Assets

3. (2) Long-term Fund to Property, Plant and Equipment Ratio = (Shareholders’ Equity + Noncurrent Liabilities) / Net Property, Plant and Equipment

2. Liquidity Analysis

• (1) Current Ratio = Current Assets / Current Liabilities

• (2) Quick Ratio = (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities

• (3) Times Interest Earned = Earnings before Interest and Taxes / Interest Expenses

• Operating Performance Analysis

• (1) Average Collection Turnover = Net Sales / Average Trade Receivables

• (2) Days Sales Outstanding = 365 / Average Collection Turnover

• (3) Average Inventory Turnover = Cost of Sales / Average Inventory

• (4) Average Payment Turnover = Cost of Sales / Average Trade Payables

• (5) Average Inventory Turnover Days = 365 / Average Inventory Turnover

• (6) Property, Plant, and Equipment Turnover = Net Sales / Average Net Property, Plant, and Equipment

• (7) Total Assets Turnover = Net Sales / Average Total Assets

4. Profitability Analysis

• (1) Return on Total Assets = (Net Income + Interest Expenses * (1 - Effective Tax Rate))/Average Total Assets

• (2) Return on Equity = Net Income / Average Equity

• (3) Net Margin = Net Income / Net Sales

• (4) Earnings Per Share = (Net Income - Preferred Stock Dividend) /Weighted Average Number of Shares Outstanding

5. Cash Flow

• (1) Cash Flow Ratio = Net Cash Provided by Operating Activities / Current Liabilities

• (2) Cash Flow Adequacy Ratio = Five-year Sum of Cash from Operations / Five-year Sum of Capital Expenditures, Inventory Additions, and Cash Dividend

• (3) Cash Flow Reinvestment Ratio = (Cash Provided by Operating Activities - Cash Dividends)/(Gross Property, Plant and Equipment + Long-term Investments + Other Noncurrent Assets + Working Capital)

• Leverage

• (1) Operating Leverage = (Net Sales - Variable Cost) / Operating income

• (2) Financial Leverage = Income from Operations /(Operating income – Interest Expenses)

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• 6.3 Audit Committee’s Review Report for the Most Recent Year: See Appendix II (Pages 191)

• 6.4 Financial Statements for the Most Recent Year (including the consolidated financial statements of the parent and subsidiaries): See Appendix IV (Pages 193~317)

• 6.5 The Latest Individual Auditor’s Report and Financial Statements Audited and Certified by CPA:

• See Appendix V (Pages 318~398)

• 6.6 The Company or its affiliates have experienced financial difficulties in the most recent fiscal year or during the current fiscal year up to the date of printing of the annual report: None.

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7. Review, analysis and risk issues regarding financial standing and financial performance.

7.1 Financial conditions

(entities to be merged)	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars
Year Items	December 31, 2022	December 31, 2023	Amount in discrepancy	rate of change(s) (%)
Current assets	32,663,028	30,676,516	(1,986,512)	(6.08)
Non-current financial assets at fair value throughprofit or loss	90,007	0	(90,007)	(100.00)
Non-current financial assets at fair value through other comprehensive income	8,054,316	7,498,666	(555,650)	(6.90)
Property, plants & equipment	22,037,075	19,464,972	(2,572,103)	(11.67)
Right-of-use assets	1,905,157	1,671,302	(233,855)	(12.27)
Intangible assets	4,907,583	1,640,602	(3,266,981)	(66.57)
Other assets	3,386,304	3,150,404	1,435,402	(6.97)
Total assets	73,043,470	64,102,462	(8,941,008)	(12.24)
Current liabilities	10,312,376	10,922,533	610,157	5.92
Non-current liabilities	6,070,098	4,035,193	(2,034,905)	(33.52)
Total liabilities	16,382,474	14,957,726	(1,424,748)	(8.70)
Share capital	7,547,840	7,529,405	(18,435)	(0.24)
Capital surplus	46,421,664	46,447,060	25,396	0.05
Retained earnings	654,565	(6,442,832)	(7,097,397)	(1,084.29)
Other equity	75,010	(24,296)	(99,306)	(132.39)
Treasury shares	(294,810)	(135,163)	159,647	(54.15)
Non-controlling interests	2,256,727	1,770,562	(486,165)	(21.54)
Total shareholders’ equity	56,660,996	49,144,736	(7,516,260)	(13.27)

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• 7.1.1 Analyses into the major causes behind the rate of change(s) up to over 20% with amount

involved in a change up to NT$10,000,000.

1. Decrease in the current financial assets measured at fair value through profit or loss Mainly due to the disposal of shares in 2023.

2. Decrease in intangible assets

3. Mainly due to the recognition of goodwill impairment in 2023 resulting in the decrease in intangible assets.

4. Decrease in non-current liabilities

5. Mainly due to the decrease in long-term borrowings in 2023.

6. Decrease in retained earnings

7. Mainly due to the overall economic impact in 2023 causing a reduction of operating revenue, increase in idle capacity, and provision of asset impairment, thereby resulting in a decrease in the loss and decrease in retained earnings.

8. Increase in other equities

9. Mainly due to the increase in exchange losses from the translation of foreign financial statements in 2023.

10. Decrease in treasury shares

Mainly due to the cancellation of treasury shares in 2023.

1. Decrease in non-controlling interests

2. Mainly due to the overall economic impact in 2023 causing the decrease in the overall profit, thereby resulting in the decrease in non-controlling interests.

7.1.2 Impact resulting from the change: Without a significant impact on the financial conditions. 7.1.3 Future countermeasures: Not applicable.

7.2 Financial performance

(Consolidated)	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars
Year Items	Fiscal year 2022	Fiscal year 2023	Amount in discrepancy	rate of change(s) (%)
Net sales	28,878,250	22,305,680	(6,572,570)	(22.76)
Operating costs	(23,896,688)	(21,137,938)	2,758,750	(11.54)
Unrealized loss in sales	(15)	(13)	2	(13.33)
Gross profit (loss)	4,981,547	1,167,729	(3,813,818)	(76.56)
Operating expenses	(5,533,845)	(5,199,313)	334,532	(6.05)
Other gains and losses	86,700	30,306	(56,394)	(65.04)
Operating Profit	(465,598)	(4,001,278)	(3,535,680)	759.38
Non-operating income & expenses	(17,870)	(3,383,721)	(3,365,851)	18,835.20
Net income before tax from continued operation	(483,468)	(7,384,999)	(6,901,531)	1,427.51
Income tax expenses	(82,915)	62,267	145,182	(175.10)
Net Profit	(566,383)	(7,322,732)	(6,756,349)	1,192.89
Other comprehensive income(loss)	206,055	(269,770)	(475,825)	(230.92)

7.2.1 Analyses into the leading causes where the rate of change(s) was up to more than 20% with

the amount involved in the change up to NT$10,000,000.

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1. Decrease in sales revenue Mainly due to the overall economic impact in 2023, resulting in a decrease in operating revenue.

2. Decrease in the net amount of gross operating profit and increase in operating losses. Mainly due to the overall economic impact in 2023, resulting in a decrease in operating revenue and an increase in idle capacity.

3. Decrease in other incomes and expenses

4. Mainly due to the decrease in government subsidies for the industry in 2023.

5. Increase in net non-operating expenses

Mainly due to the provision of asset impairment in 2023.

1. Increase in income tax expenses

   • Mainly due to the increase in overall losses in 2023, resulting in income tax benefits.

2. Increase in other comprehensive loss Mainly due to the increase in exchange losses from the translation of foreign financial statements in 2023.

3. 7.2.2 The potential impact of the anticipated sales volumes and the grounds thereof upon the

finance and business of the Company in the future and the countermeasure plans thereof.

The Group’s products cover Epi Water, chips, packaging, and modules, and are applied extensively. Therefore, it is not advised to measure based on the sales volume. For LED products, the Company has been cultivating the market for many years and has strengthened its layout in the automotive, smart sensor, and advanced display markets. This year, the Company will also generate some results from relevant projects successively. In the future, the Group will continuously understand the needs of the end market and proactively develop products in collaboration with customers. Meanwhile, it will also integrate the Group’s resources, maintain leading technology, and strive to provide the best products and services, in order to demonstrate the Group’s corporate value.

7.3 Cash Flow

7.3.1 analysis on changes in cash flow

(Consolidated)	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars
year items	Fiscal year 2022	Fiscal year 2023	increase (decrease) in amount	rate of change(s) (%)
Net cash flow from operatingactivities	7,959,042	2,379,555	(5,579,487)	(70.10)
Net cash flow from investing activities	(4,699,400)	(2,134,017)	2,565,383	(54.59)
Net cash flow from financingactivities	295,875	(765,159)	(1,061,034)	(358.61)

Fiscal year 2023 analysis on changes in cash flow

1. Operating activities

In 2023, due to the weak overall economy that affected the end demand resulting in a decrease in operating revenues and profitability, the net cash inflow from operating activities decreased by NT$5.58 billion from 2022.

2. Investing activities

The Company adjusted its capital expenditure schedule flexibly based on the actual market demand. The property, plant, and equipment acquired in 2023 decreased by NT$ 2.29 billion from 2022.

3. Financing activities

In 2023, in order to reduce interest expenses and repay bank borrowings, the net cash outflow from financing activities was NT$770 million. Despite the repayment of bank loans and distribution of cash dividends in 2022, there was still a net cash inflow from financing activities, NT$300 million, due to the cash capital increase completed in that year.

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Plan to improve cash deficit

The Company’s net cash inflow from operating activities in 2023 reached NT$2.38 billion, and the net cash at the end of the year was NT$11.1 billion. Therefore, there was no cash deficit.

7.3.2 Cash liquidity analysis for the upcoming year

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

Expressed in Thousand New
(Consolidated)
Taiwan Dollars
Anticipated
Anticipated to figures for
come from in investment Anticipated
At the beginning
the entire year and capital- cash surplus Amount of cash deficit
of the term
operating raising (inadequacy) Remedial measures
Balance in cash
activities activities in amount
net cash flow the entire year
net cash flow
wealth
investment
(a) (b) (c) (a)+(b)+(c) management
plans
plans
15,563,488 1,759,448 (2,618,176) 14,704,759 － －
----- End of picture text -----

• Analysis on changes in cash flow in 2024

• 1 、 In the entire year, the major cash inflow primarily came from operating activities. The cash outflow primarily resulted from introduction into new business lines, equipment for the new manufacturing process, and expansion of high-end productivity which caused capital expenditures.

• 2 、 In the very premise to secure stable cash flow, toward the cash flow amidst the cash balance on the book and in the operating activities, investing, and financing activities, the Company launches prudential planning with consideration of the update in the financial market to control all sorts of cash expenditures in a sound manner.

7.4 The impact of significant capital expenditures on the treasury related operation in the most recent year.

7.4.1 Facts of the utilization of major capital expenditures by the Company and

its subsidiaries in 2023 and the capital sources

	Expressed in Thousand New Taiwan Dollars	Expressed in Thousand New Taiwan Dollars
Items of the plan	Source of capital	Total amount of working capital required
procurement of machinery & equipment	Own capital funds ,loans andprivate equity	2,033,835

7.4.2 Impact upon financial and business aspects

The Group invests the relevant capital expenditures in accordance with the needs of strategic deployment, in response to the market demand of customers, and optimizes the Company’s product portfolio and technical specifications. The Group carefully evaluates the capital needed for the purchase plans of machinery equipment, and plans the utilization of working capital properly, without risk of insufficient funds due to capital expenditures. Therefore, there is no major adverse impact on the finance and business of the Company and its subsidiaries.

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7.5 The outward investment policy, the key causes behind profit or loss in the most recent year, the plans for countermeasures and investment plans in the upcoming year.

In the 2023 consolidated statements, the Company recognized the loss on the investment accounted for using the equity method, NT$549 million, mainly due to the slow recovery of the LED industry in 2023, and the gradual destocking of terminal electronic products (such as mobile phones, tablets, and computers). However, the factors, such as continued pressure from international inflation and lift rate, the ongoing Russia–Ukraine War, the slowdown of China’s economy, and geopolitics, still posed impacts. As a result, the sales force of electronic components products was not as good as expected, resulting in the overall loss of the investees’ operations.

Ennostar’s reinvestments focus on medium- and long-term strategic objectives, and the investment targets are mainly strategic investees to cultivate new competitive advantages and growth momentum. The investment pillars are automotive, advanced display, and intelligent sensors, to shift the business positioning to high-tech and high-value-added application markets. Looking to the future, Ennostar will continue to invest based on the Group’s long-term development strategies, to create a leading position in the industry. Starting from the core capabilities, it will gather the resources and strength of the Group and its partners, and continuously invest in innovative research and development to exert the synergy of the Group’s cooperation and become the full optoelectronic integration solution provider.

7.6 Risk-related issues

7.6.1 Policy and organizational structure of risk management

The Board and senior management of Ennostar Group have been committed to strengthening corporate governance and promoting risk management for a long time. In light of the increasingly complex business operations faced by enterprises, Ennostar Group promotes a comprehensive enterprise risk management (ERM) to steadily operate the business and move toward the corporate sustainable development goals. On November 3, 2022, the Board approved the formal establishment of the “Risk Management Committee” under the “ESG Committee” subordinate to the Board. In order to demonstrate its decision to value corporate sustainability and risk management, Ennostar Group renamed the “ESG Committee” into the “Corporate Sustainability and Risk Management Committee” in February 2024, expecting to focus on the following aspects:

• 1 、 The Risk Management Committee is established to assist the risk management team in sub-committees to operate smoothly

• 2 、 Optimize the basic risk management framework, to fully implement the risk management mechanism.

• 3 、 Comprehensively introduce the enterprise risk management mechanism,

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identify the Group’s focused risks through the top-down and bottom-up approaches, and formulate corresponding action plans, to improve the corporate resilience of the Group’s companies when facing operational risks

• 4 、 Elevate the risk management awareness of all employees and establish the Group’s risk management culture

Risk management policy

The risk management procedures, include the five major elements, namely, risk identification, risk analysis, risk assessment, risk response, and supervision & review mechanism. The procedures and methods to be executed physically for each element shall also be specified, in order to establish the risk knowledge base, divided into Level 1 for the category, Level 2 for the sub-category, Level 3 for the item, and Level 4 for the scenario, and items, such as impact and response. Level 1 risks are divided into five major dimensions, namely governance, reporting, strategic planning, compliance, and operation/infrastructure. The scope of risks include but are not limited to, operational, market, environmental, strategic, financial, governance, compliance, and reporting risks.

The risk management personnel conduct the overall enterprise-wide risk identification at least once per year, with respect to the short-term, mid-term, and long-term goals and functions of their units, based on the Group’s strategic goals and risk management policy and procedure authorized by the Board of Directors, and also the Group’s risk knowledge base.

Organizational structure

==> picture [416 x 209] intentionally omitted <==

Operations

To identify the challenges that may arise for Ennostar Group in the future, early and systematically, and respond appropriately to improve corporate resilience, at the initial stage of the enterprise risk management (ERM) introduction, the five common risks to be monitored first were identified through executives, namely technological development, supply chain, talent shortage, geopolitics, and climate change (shortage of water/power). Upon the approval and confirmation

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of the highest risk governance unit, the Board of Directors, on November 3, 2022, the follow-up risk scenario analysis and risk assessment for implementation, response strategies, and action plans were conducted. Meanwhile, the construction of the Ennostar Risk Knowledge Database will be completed in 2023. The measurement standards and methods of risk assessment will start from the bottom, and risk management will be incorporated into the business strategies to reduce the risks of these issues to which the Group is exposed. Through the introduction of ERM, the Company’s risk management policies and procedures are adjusted and optimized in a timely manner, and the annual risk management implementation results are reported, to gradually form a corporate governance culture through the guidance and supervision of the Board.

The Risk Management Committee is composed of the chairmen of four companies including the Company, Epistar, Lextar Electronics, and Unikorn Semiconductor. The Committee meets on a quarterly basis and reports the implementation status to the “Corporate Sustainability and Risk Management Committee” regularly. The members of the executive office and the executive secretaries of the four groups under the Committee are appointed by the Chief Financial Officer to arrange, communicate and coordinate the risk group meetings of the Group companies (the Company, Epistar, Lextar Electronics, and Unikorn Semiconductor), responsible for promoting, implementing and maintaining the risk management mechanism. Members within the risk management organization (including officers and execution staff) also need to receive relevant education and training courses. For their duties and functions, please refer to the “Risk Management Policy and Procedures” published on the official website.

• 7.6.2 The impact upon the Company’s profit and/or loss by the changes in interest rate, exchange rate and inflation and the future countermeasures.

• Interest rate

  • (1) Impact upon the Company’s profit and/or loss As owning net deposit positions, the Company and its subsidiary, on December 31, 2023, conducted sensitivity analyses on exposure to risk by the non-derivative financial instruments. Where the change of interest rates in all sorts of markets is within 0.1%, both the Company and its subsidiaries would increase or decrease consolidated profit before tax by NT$11,093,000 in Fiscal 2023. Accordingly, a change in the interest rate would not cause a too significant impact on the consolidated net profit of the Company and its subsidiaries. Such simulation is carried out on a quarterly basis to ensure that the potential maximum possible loss would fall within the limits fixed by the management level.

  • (2) Future countermeasures

    • A. Sound financial structure: The Group will, in due time in the future, lower the amounts of the financing from banks as the operating status and the need for working capital may justify..

    • B. Both the Company and its subsidiaries would, periodically, evaluate interest rates on loans from banks and have maintained very sound

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ties with banks to acquire very preferential interest rates. As the changes in interest rates may justify, adjust the utilization of working capital to minimize the potential impact resulting from changes in interest rates upon the Company's profit and/or loss.

1. exchange rate

2. (1) impact upon the Company’s profit and/or loss

Expressed in Thousand New Taiwan Dollars; %

Year Items	Fiscal year 2023
Net revenues (1)	22,305,680
Operating profit (loss) (2)	(4,001,278)
Foreign exchangegain(loss), net(3)	(102,079)
(3)/(1)	-0.46%
(3)/(2)	2.55%

• (2) Future countermeasures

Where export-oriented markets account for a very significant ratio to the operating revenues of the Company and its subsidiaries, the exchange rate of U. S. Dollars would, therefore, pose an impact on the profit and/or loss of the Company and its subsidiaries. The Company stays vigilant on the fluctuation of exchange rate and, besides, continually and unceasingly carries out the following countermeasures:

• A. The Company's Department of Finance maintains very close ties with the foreign exchange departments of financial institutions concerned and collects exchange rate fluctuation-related information all the time to adequately dominate exchange rate trends and changes as the referential grounds in forwarding foreign exchange trading and foreign exchange settlement.

• B. The Department of Finance is required to submit an internal appraisal report about the hedging position of assets (liabilities) in foreign currencies to the Company's management which would, in turn, duly carry out adjustments and countermeasures as necessary.

• C. The Business Department would conduct comprehensive consideration and evaluation of the future exchange rate trend and the factors of potential impacts before quoting to customers to resolve appropriate and rational prices to be quoted.

• D. The foreign currencies receivable for assets sold and liabilities in foreign currencies payable shall be in the same currencies. The assets in foreign currencies incurred in the prior transaction shall be taken to offset liabilities in foreign currencies to accomplish the effect of hedging. In case of the net position in foreign currencies or an event with a need for foreign currencies in the future, the Company shall buy or sell forward foreign exchange to adjust the positions of foreign currencies to accomplish the effect of the automatic hedging amidst balance between the assets in foreign currencies and liabilities in foreign currencies.

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1. Inflation

   • The Company and its subsidiaries primarily purchase commodities from Taiwan and Mainland China and primarily export products to European and American markets, Mainland China and other Asian regions. The inflation did not incur a significant impact upon the Company in Fiscal 2023.The Company, nevertheless, does not at all assure that inflation in the future will not incur a significant change in attribute, extent or scope to lead to an adverse impact upon the Company and its subsidiaries. The Group shall, nevertheless, stay closely vigilant on changes in the supply/demand status and prices of raw materials & materiel to adjust inventory in real-time. Through the research & development efforts toward low-cost substitute raw material sources and efforts to boost product brightness level, the Group shall put forth maximum possible efforts to lower operating costs and, in turn, minimize the impact upon the Company’s profit and/or loss.

2. 7.6.3 The facts in engaging high risk, high leverage investment, loan funds to others, policies in endorsement/guarantee and transaction in derivative financial instruments, major causes leading to profit or loss and future countermeasures to deal with the same.

Items of risks	Performance in implementation	Policies and future countermeasures
high risk, high leverage investment	Here at the Company and its subsidiaries we did not at all engage in high-risk, high leverage investment in the most recent year and as of the publication date of the Annual Report	Both the Company and its subsidiaries have focused on the principal business lines and have not engaged in high-risk, high-leverage investment.
Capital funds loaned to others	1. Due to the business turnover needs of Unikorn Semiconductor Corporation, the company has loaned NT$200 million to the company. 2. In response to the needs of by subsidiaries in working capital, the Company loans working capital outwardly.	The Company and its subsidiaries have lent their funds to others exactly in accordance with the “Procedures for Loaning of Funds to Other Parties” of the respective companies and have duly launched announcements and declaration to the public accordingto law.
Endorsement/gu arantee	1. The Company has not rendered in the most recent year as of the publication date of the Annual Report. 2. The endorsements/guarantees related issues carried out among subsidiaries themselves wereprimarily	The Company and its subsidiaries have duly carried out endorsement/guarantee exactly in accordance with their own “Procedures for Endorsements and Guarantees ” and have further carried out announcements and

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Items of risks	Performance in implementation	Policies and future countermeasures
	intended to help raise workingcapital	declaration to the public accordingto law.
Transaction with derivative financial instruments	The Company and its subsidiaries engage in forwarding foreign exchange trading primarily in an attempt to evade the potential risks that are likely to rise amidst fluctuations of exchange rates for the assets and liabilities denominated in foreign currencies.	Both the Company and its subsidiaries duly carry out such transactions based on their own respective “Acquisition or Disposal Procedures of Assets ” and ” Engage in Derivatives Transaction Handlers” with evaluation on a regular basis and further launch announcements and declaration to the public according to laws and ordinances concerned.

Note: For more information on funds loaned to others, please refer to the appendix of financial statements of the respective terms.

• 7.6.4 The future research & development plans and the research & development costs anticipated to be invested.

The main body of the Company’s R&D is situated in Taiwan, and the main R&D projects are led by the subsidiaries (Epistar and Lextar), which will continue to refine processes and R&D technologies, and integrate the Group’s resources to achieve the most efficient R&D plan. It is expected that the R&D expenditure invested in 2024 will maintain a steady growth. For details, please refer to Page 121 of the annual report.

• 7.6.5 The potential impact resulting from changes in major policies and laws at home and abroad upon the Company's business and financial performance and the countermeasures in response.

The Company, as always, faithfully complies with the policies, laws and ordinances concerned of the nation as well as export control, economic activities and environmental protection issues in the international community. The Company stays closely vigilant on the potential impact with firm domination of the changes in policies and laws likely to adversely affect the Company's business operation. In close coordination with the internal systems and operating activities, the Company ensures smooth and unobstructed business operation. As of the publication date of the Annual Report, changes in the relevant policies and laws have not cast any significant impact on the Company in finance and business operations.

• 7.6.6 The impact resulting from changes in technologies (including risks in information (cyber) security) and changes in industries upon the Company in finance and business operation and the countermeasures.

Hacking incidents have increased. In 2022, many TWSE and TPEx listed companies

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in Taiwan announced that they were hacked in their material information release. Information security has been listed as one of the important risk management issues by the Group. The Company and its key subsidiaries (Epistar, Lextar Electronics and Unikorn Semiconductor) have already completed the ISO 27001 information security certification. Meanwhile, in order to master the information security intelligence, the Group participates in TWCERT/CC and become a member of Taiwan Chief Information Security Officer Alliance; the subsidiaries also work with the SP-ISAC of the industries they belong to, to participate in the joint defense program, for grasping information security information, responding to risk threats early, and effectively improving the Group’s information security defense capabilities. Facing the major international system vulnerabilities or information security incidents, the timely contingent fixes are conducted through weekly meetings, and the methods of intrusion cases are studied, to mend the existing deficiencies. The detection mechanism is enhanced as well to detect abnormal behavior immediately to mitigate the risk.

The Company’s cybersecurity risk management framework, cybersecurity policy, specific management programs, and resources invested in cybersecurity management have been disclosed on the Company’s website for reference.

• 7.6.7 The impact resulting from a change in corporate image upon the management over the corporate crisis and the countermeasures thereof.

The Company regards ethical management as an important core value, and constructs the corporate culture and systems accordingly. The “Risk Management Policy and Procedures” are established to assess the operational, market, environmental, strategic, financial and governance, compliance and reporting risks regularly and set forth the response action programs with respect to the high-risk items, so as to protect the rights and interests of stakeholders, strengthen communication channels, and understand their needs and expectations for the reference of sustainable development planning, and enhance the sustainable performance in the Company’s operations. Meanwhile, the Company proactively invests capital in product research and development and innovation management, including the high value-added fields, such as Mini/Micro LED, automotive and smart sensors, to exert integration synergy via the Group. The positioning and maintenance of patents are helpful in strengthening industrial competitiveness. In the future, we will continue to insist on the philosophy of sustainable management to lead the group to grow together. During the most recent year up to the date of publication of the annual report, the Company had nothing to affect the corporate image.

• 7.6.8 The anticipated benefits, potential risks and countermeasures toward the merger/acquisition (M&A).

• Both the Company and its subsidiaries did not launch any merger/acquisition (M&A) programs in the most recent year as of the publication date of the Annual Report

• 7.6.9 The benefit anticipated from the effort of plant expansion, the potential risks and the countermeasures.

Upon integration of the Group’s factory premises in Taiwan, the Group wishes to replace the new plant construction planning with the existing plants, in order to activate assets and improve the efficiency of utilization of the Group’s assets. As

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of the date of publication of the annual report, the Company and its subsidiaries have no plan to expand the plants.

• 7.6.10 Risks in concentrated incoming and outgoing products and the countermeasures thereof.

• 1 、 In terms of incoming products

  • The Group is a company specializing in the production of LED epitaxy, chip grains, package and modules. To ensure the fine and flawless quality of products, the Group upholds a strategy to procure raw materials & materials into sound and comprehensive consideration toward the quality, prices lead time periods and close coordination as well as other factors concerning the suppliers. The Group puts forth the maximum possible efforts to screen/select the right suppliers. Except for some main materials which are available exclusively from a single supplier which has been a long-term partner coordinating with the Group, for the rest of raw materials & materials, we try to develop and maintain two or more supplier sources. All the time, we maintain very friendly and cordial ties with the suppliers. With each single supplier, the Group’s incoming procurement amount does not at all exceed 20% of the aggregate total. The Group is, therefore, free of any sort of centralized procurement related risk.

• 2 、 In the aspect of sales

  • The Group has specialized in the production and manufacture of compound semiconductors, with products covering such epitaxy, chip grains, package to modules. We are capable of providing customers with such services including notably integration of supply chains, customized production and solutions. Our products are applied toward the scope covering displays, professional lighting, automotive sensing, 5G communications, NMOS, and the like within a very extensive range of applications.

  • Other than the continued efforts to maintain sound and close ties with existent customers, we proactively utilize our core technology & know-how to expand the current LED and other III-V compound semiconductors, guiding the entire Group to further extend toward varied aspects. Teaming up with the customers in the relevant application range, we launch technical coordination and strategic coordination in patents, inventions, and the like to accelerate virtual vertical integration to further expand the channels to market products to develop products and markets in concerted teamwork. The sales amount of each of the Group’s customers never exceeds 20% of the total sales amount; therefore, there should be no risk over sales concentration.

• 7.6.11 The impact and risk to be incurred significant transfer or exchange by the directors and supervisors or key shareholders holding in excess of 10% in shareholding ratios upon the Company and the countermeasures.

In the most recent year and up to the date of publication of the annual report, except for those that have been announced and reported in accordance with the law, the Company has no knowledge of any risk of mass transfer or

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replacement of equity by any directors or major shareholders holding more than 10% of the shares.

• 7.6.12 The impact and risk upon the Company resulting from a change in the managerial officer’s power and the countermeasures. None.

7.6.13 Litigation or non-litigation issues

Ennostar Group

Subject	Fa t in the subject dispute	Amount of the target	Commencement of litigation	Key issues involved in the litigation Involved party(ies)	Fact of the current processing
Civil litigation on infringement of patent	An accusation against Lowe's of some LED filament bulb products in infringement of Jing Yuan Optronics Company’s American Patent codes US6,346,771, US8,492,780, Three invention patents in US7,560,738 and the like	Pending for a judgment to be ruled by the court	2017..04.28	Lowe's	Currently being heard in the District Court in California, USA
Civil litigation on infringement of patent	An accusation against Lowe's of some LED filament bulb products in infringement of Jing Yuan Optronics Company’s American Patent codes US9,664,340, US9,065,022, US8,240,881, US7,489,068, Five invention patents in US10,224,455 and the like	Pending for a judgment to be ruled by the court	2020.05.22	Lowe's	Currently being heard in the District Court in Texas, USA
Civil litigation on infringement of patent	An accusation against Lowe's of some LED filament bulb products in infringement of Jing Yuan Optronics Company’s American Patent codes US7,560,738, One invention patents and the like	Pending for a judgment to be ruled by the court	2023.09.01	Lowe's	Currently being heard in the District Court in Texas, USA

The Company's director Director AUO Corporation Co., Ltd. (hereinafter referred to as AUO Corporation Company):

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(Source: AUO Corporation Company’s Consolidated Financial Statements for Fiscal 2023)

In May 2014, LG Electronics Nanjing Display Co., Ltd. and seven of its affiliates (the plaintiff) filed a lawsuit in Seoul Central District Court against certain LCD manufacturers including AUO, alleging overcharging and claiming damages. The trial court in Korea ruled in November 2023 that AUO shall pay the plaintiff KRW 29.099 billion plus interest. The case is a derivative civil lawsuit from the concluded LCD antitrust case in 2006. The plaintiff has filed the lawsuit since 2014 and the case was pending for many years. AUO filed an appeal in December 2023, and deposited said KRW 29.099 billion plus interest with the court in January 2024. For the time being, the final outcome of the case remains uncertain. AUO is still evaluating the merits of this lawsuit.

In October 2023, Phenix Longhorn LLC (Phenix) filed a lawsuit against two companies, including AUO, with the United States District Court for the East District of Texas, alleging infringement upon certain U.S. patents held by Phenix in connection with the manufacture of LCD panels. Meanwhile, it claimed unspecified monetary damages and a preliminary injunction against future infringement in its letter of complaint. AUO intends to defend this lawsuit proactively, but the final outcome of the case remains uncertain. AUO is still evaluating the merits of the lawsuit.

Since 2010, there have been several environmental-related administrative legal proceedings in relation to the development plan of AUO’s 8.5-generation plant located in the Central Taiwan Science Park in Houli District, Taichung City. On November 6, 2018, the Ministry of Environment announced that the same had passed the review on environmental impact assessment. On October 24, 2019, the Appeal Review Board of Executive Yuan rejected the administrative appeal filed by the five local residents to revoke the announcement of the EIA approval. However, on December 24, 2019, the five local residents filed an administrative appeal with the Taipei High Administrative Court. The Taipei High Administrative Court ruled in favor of the residents on July 21, 2022, and revoked the EIA approved by the EPA. EPA has filed an appeal with the Supreme Administrative Court on August 17, 2022. For the time being, the final outcome of the case remains uncertain. AUO is still evaluating the merits of this lawsuit.

• 7.6.14 Other significant risks and countermeasures.

7.7 Other important notes: None

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8. Special Disclosure

8.1 Summary of Affiliated Companies

8.1.1 Organization Chart of Ennostar Inc.'s Affiliated Companies (December 31, 2023)

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==> picture [710 x 352] intentionally omitted <==

169

==> picture [716 x 389] intentionally omitted <==

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8.1.2 Basic Information of Affiliates

Name of enterprise	Date of incorporation	Address	paid-in capital	Major business lines or production items
Epistar Corporation	1996.09.19	21, Li-hsin Rd., Hsinchu Science Park Hsinchu City, Taiwan	NTD 11,164,791,880	Research & development, manufacture and sales of Light Emitting Diode upstream LED epitoxyand chip grains
Lextar Electronics Corp.	2008.05.23	6 F., No. 21, Lixing Rd.,Hsinchu Science Park, Hsinchu City, Taiwan	NTD 5,149,163,800	From photoelectricitic semiconductor packages, SMT to doculeproducts
Lighting Investment Corp.	2007.11.08	9F.-1, No. 67, Ziyou Rd., East Dist., Hsinchu City, Taiwan	NTD 1,914,785,180	professional investment
Episky Corporation (Xiamen) Ltd.	2006.12.13	No. 99 Xiangxing Road, Torch Gaoxin District (Xiangan) Industrial Zone, Xiamen City	USD 68,000,000	Production and sales of Light Emitting Diode grains
Episky(Hong Kong)Ltd.	2008.05.06	Room 2702-03, CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 68,000,000	professional investment
Lighting Investment Ltd.	2008.05.16	Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands	USD 4,564,300	professional investment
Epistar JV Holding (BVI) Co., Ltd.	2010.01.21	Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands	USD 482,780,000	professional investment
LiteStar JV Holding (BVI) Co., Ltd.	2010.02.22	Vistra Corporate Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands	USD 132,050,000	professional investment
Epicrystal (Hong Kong) Co., Ltd.	2010.03.05	Room 2702-03, CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 146,600,000	professional investment
Luxlite (HK) Corporation Limited	2008.12.18	Room 2702-03, CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 3,800,000	professional investment
Epicrystal Corporation (Changzhou) Ltd.	2010.04.07	No. 518 Yancheng S. Road, Wujin National Gaoxin Technology Development Zone, Changzhou City, Jiangsu Province	USD 157,000,000	Production and sales business on Light Emitting Diode epi-wager chips
Yenrich Technology Corporation	2010.12.11	2F, No. 52 Park Zone 2nd Road, Baoshan Township, Hsinchu County, Hsinchu Science Park Zone	NTD 260,000,000	Manufacture and sales of electronic parts & components

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Name of enterprise	Date of incorporation	Address	paid-in capital	Major business lines or production items
United Led Corporation Hong Kong Limited	2010.10.29	Room 2702-03, C.C.Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 89,500,300	professional investment
United Led Shan Dong Corporation	2010.02.25	No. 6688 Chungwen Boulevard, Gaoxin District, Jining City, Shandong Province, China	USD 84,000,000	Production and sales business on Light Emitting Diode epi-wager chips
HUGA Holding (Samoa) Limited	2011.01.13	Vistra Corporate Services Centre, Ground Floor NPF Buildinf, Bach Road, Apia Somoa.	USD 12,551,035	professional investment
Epistar (Hong Kong) Limited	2013.04.25	Room 2702-03, CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 82,850	professional investment
Can Yang Investments Limited	2009.11.24	Room 2702-03, CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 76,000,000	professional investment
Jiangsu Canyang Optoelectronics Ltd.	2009.10.12	No. 9 Zhouzhuanghezhi Road, Yangzhou City Economic Development Zone, Jiangsu Province	USD 192,000,000	Production and sales business on Light Emitting Diode epi-wager chips
Unikorn Semiconductor Corporation	2018.10.11	1F, 5, Li-hsin 5th Rd., Hsinchu Science Park, Hsinchu 300, Taiwan	NTD 1,682,425,000	Professional OEM of 35 compound semiconductors
Prolight Opto Technology Corporation	2004.10.22	No. 89 Hsiyuan Road, Zhongli District, Taoyuan City	NTD 680,620,000	Package, manufacture and sales of Light-Emitting Diode (LED)
Gan Force Corporation	2019.10.07	9F~1, No. 69 Ziyu Road, Hsinchu City	NTD 2,218,000	Research & development, design and sales of electronic components
Amengine Corporation	2020.06.15	2F.-3, No. 6-1, Sec. 2, Shengyi Rd., Zhubei City, Hsinchu County , Taiwan (R.O.C.)	NTD 50,566,250	Research & development, production and sales of optical sensingmodules
Shenzhen Epikylin Optoelectronics Co.,Ltd.	2020.06.09	Room 1501, 15F (Fuguang Commercial Building) Qi- Zhi-Gu Commercial Mansion, No. 1, Tangling Road, Liuxian Boulevard,Nanshan District,Shenshen City	RMB 10,000,000	Sales of Light Emitting Diode grains
Lextar Electronics (Suzhou) Corp.	2010.02.05	West Side, 1F, Building T, No.13, Chun Hui Road, Suzhou Industrial Park, China	USD 125,705,000	Manufacture and sales of light- emitting diode (LED) and the modules thereof
Liang Li Venture Corp.	2006.05.10	3F., No. 1, Keyi St., Zhunan Township, Miaoli County 350, Taiwan (R.O.C.)	NTD 180,000,000	general investment
Lextar (Singapore) Pte. Ltd.	2009.11.23	16 Raffles Quay, #19- 01 Hong Leong Building, Singapore	USD 90,270,000	general investment

172

Name of enterprise	Date of incorporation	Address	paid-in capital	Major business lines or production items
Lextar Electronics Korea Ltd.	2010.12.10	B-No.1726 Geumgang Penterium IT Tower, 282 Hagui -ro Dongan-gu, Anyang-si, Gyeonggi-do, South Korea	USD 100,000	Rendering LED related after- sales services
Wellypower Optronics Corporation	1999..06.08	Vistra Corporate Services Centre, Wickhams Cay ii, Road Town, Tortola, Vg1110, British Virgin Islands	USD 5,153,061	Business in general investment
Apower Optronics Corporation	2003.02.11	VISTRA CORPORATE SERVICES CENTRE, WICKHAMS CAY II, ROAD TOWN, TORTOLA, VG1110,BRITISH VIRGIN ISLANNDS	USD 31,600,000	general investment
Wellybond Corporation	2008.06.10	3F., No. 1, Keyi St., Zhunan Township, Miaoli County 350, Taiwan (R.O.C.)	NTD 750,000,000	general investment
Wellybond Optronics (H.K.) Corporation	2008.10.15	Room 2702-03, CC Wu Building, 302-8 Hennessy Road, Wanchai, Hong Kong	USD 500,000	general investment
Trendylite Corporation	2013.02.05	3F., No. 1, Keyi St., Zhunan Township, Miaoli County 350, Taiwan (R.O.C.)	NTD 31,500,000	Illumination business、Electronic component manufacturing
Lextar Electronics (Chuzhou) Corp.	2017..05.15	No. 2168 Qingliu East Road, Suchu Modern Science Park Zone, Chuzhou City, Anhui Province	RMB 700,000,000	Manufacture and sales of light- emitting diode (LED) and the modules thereof
Vogito Innovation Co., Ltd.	2018.07.25	3F., No. 1, Keyi St., Zhunan Township, Miaoli County 350, Taiwan (R.O.C.)	NTD 2,000,000	Design, research & development and sales of healthcare products
Hexawave, Inc.	1991.02.20	1F, No. 2 Zhanyeh 2nd Road, Hsinchu Science Park ,Hsinchu City,	NTD 403,438,340	Manufacture and sales of compound semiconductor materials and modules
Wellyhertz Electronics Corp.	2020.11.18	3F., No. 1, Keyi St., Zhunan Township, Miaoli County 350, Taiwan (R.O.C.)	NTD 35,100,000	Business in electronic parts & components manufacture
Sh Optotech Co., Ltd.	2010.09.25	9F~1, No. 69 Ziyu Road, Hsinchu City	NTD 64,881,110	Sales of Light-Emitting Diode (LED)
ProLight Opto Holding Corporation	2010.11.11	No.24, Lesperance Industrial Estate, MAHE Seychelles	USD 150,000	Business in general investment
ProLight Opto Technology Corporation	2010.11.15	No.24, Lesperance Industrial Estate, MAHE Seychelles	USD 150,000	Business in general investment
Shanghai Welight Electronic Co., Ltd	2011.12.02	Room 501B, No. 2911 Zhongshan N. Road, Putuo District, Shanghai City	USD 150,000	Wholesales and import business for LED-related electronic products

173

Name of enterprise	Date of incorporation	Address	paid-in capital	Major business lines or production items
Harvestar Investment Corp	2021.07.02	9F.-1, No. 67, Ziyou Rd., East Dist., Hsinchu City , Taiwan (R.O.C.)	NTD 1,150,000,000	Business in general investment
Calystar Investment Corp.	2021.11.11	9F.-1, No. 67, Ziyou Rd., East Dist., Hsinchu City , Taiwan (R.O.C.)	NTD 440,000,000	Business in general investment
Precistar Investment Corp.	2022.10.20	9F.-1, No. 67, Ziyou Rd., East Dist., Hsinchu City , Taiwan (R.O.C.)	NTD 480,000,000	Business in general investment
Praistar Investment Corp.	2022.10.20	9F.-1, No. 67, Ziyou Rd., East Dist., Hsinchu City , Taiwan (R.O.C.)	NTD 270,000,000	Business in general investment
Manastar Investment Corp.	2022.10.20	9F.-1, No. 67, Ziyou Rd., East Dist., Hsinchu City , Taiwan (R.O.C.)	NTD 1,000,000	Business in general investment
Chuzhou Bwin Techology Corp.	2018.12.20	No.11,Weiye Road, Suchu modern industrial park, Chuzhou, Anhui	RMB 1,000,000,000	R&D, production and sale metals and plastics technical product

8.1.3 Shareholders representing both holding companies and subordinates: None.

8.1.4 Industries Covered by all the Affiliates: Including optoelectronic industry and investment industry.

8.1.5 Name of each affiliated company’s Director, Supervisor, and President

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Epistar Corporation	Director	Ennostar Inc. Legal representative：Chin-Yung Fan	Ennostar shareholding 1,116,479	100.00%
Lextar Electronics Corp.	Director	Ennostar Inc. Legal representative：Hsiu-Mu Tang	~~th~~ ~~d h~~ Ennostar shareholding 514,916 thousand shares	100.00%

174

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Lighting Investment Corp.	Director	Epistar Corporation Legal representative：Chin-Yung Fan	Epistar. shareholding 191,479 thousand shares	100.00%
Episky Corporation ~~(~~Xiamen) Ltd.	Director	Episky(Hong Kong)Ltd. Legal representative：Jen-Chau Wu、Chang Bao、Ming-Da Jin、 Wen-Chieh Kuo	Episky(Hong Kong) invested USD 68,000 thousand	100.00%
	Supervisor	Episky(Hong Kong)Ltd. Legal representative：Yung-ShengYu
Episky(Hong Kong)Ltd.	Director	Chin-Yung Fan	Epistar JV invested USD 68,000 thousand	100.00%
Lighting Investment Ltd.	Director	Chin-Yung Fan	Lighting shareholding 46 thousand shares	100.00%
Epistar JV Holding (BVI) Co., Ltd.	Director	Chin-Yung Fan	Epistar shareholding 48 thousand shares	100.00%
LiteStar JV Holding (BVI) Co., Ltd.	Director	Chin-Yung Fan、Jen-Chau Wu、Liao-Shou Yen	Epistar JV shareholding 11 thousand shares	82.41%

175

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Epicrystal (Hong Kong) Co., Ltd.	Director	Chin-Yung Fan、Ming-Da Jin、Liao-Shou Yen	LiteStar JV Shareholding 146,600 thousand shares	100.00%
Luxlite (HK) Corporation Limited	Director	Chin-Yung Fan、Yung-Sheng Yu、Wei-Kuo Su、Jen-Chau Wu、 Ming-Da Jin	Lighting shareholding 3,800 thousand shares	100.00%
Epicrystal Corporation ~~(~~Changzhou) Ltd.	Director	Epicrystal (Hong Kong) Co., Ltd. Legal representative：Jen-Chau Wu、Chang Bao、Liao-Shou Yen Episky Corporation (Xiamen) Ltd. Legal representative：Ming-Da Jin	Epicrystal (Hong Kong) invested USD 146,600 thousand Episky (Xiamen) invested USD 5,200 thousand	96.69%
	Supervisor	Wun-Ting Wang
Yenrich Technology Corporation	Director	Lextar Electronics Corp. Legal representative：Hsiu-Mu Tang、Cun-Jhong Li Wan-Ji Syu、Jhao-Nian Huang	Lextar shareholding 26,000 thousand shares	100.00%
	Supervisor	Lextar Electronics Corp. Legal representative：Shao-Lan Wang
United Led Corporation Hong Kong Limited	Director	Jen-Chau Wu、Lin-Tien Yang、Chau-Shen Yu	Epistar JV shareholding 67,000 thousand shares	74.86%
	Supervisor	Yung-Sheng Yu、Yi-Qi Liu
United Led Shan Dong Corporation	Executive Director	United Led Corporation Hong Kong Limited Legal representative：Jen-Chau Wu	United LED(HK) invested USD 84,000 thousand	100.00%

176

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
	Supervisor	United Led Corporation Hong Kong Limited Legal representative：Yung-Sheng Yu
HUGA Holding (Samoa) Limited	Director	Chin-Yung Fan	Epistar JV shareholding 12,551 thousand shares	100.00%
Epistar (Hong Kong) Limited	Director	Chin-Yung Fan	Lighting shareholding 125 thousand shares	100.00%
Can Yang Investments Limited	Director	Ming-Ta Chin、Jen-Chau Wu、Cheng-Chi Chiang	Epistar shareholding 2,679 thousand shares Epistar JV shareholding 66,439 thousand shares shareholding 5,219 thousand shares	97.81%
Jiangsu Canyang ~~O~~ptoelectronics Ltd.	Director	Can Yang Investments Limited Legal representative：Jen-Chau Wu、Ming-Ta Chin Cheng-Chi Chiang	Can Yang invested USD 192,000 thousand	100.00%
	Supervisor	Can Yang Investments Limited Legal representative：Hui-Nin Chen

177

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Unikorn Semiconductor Corporation	Director	Ennostar Inc. Legal representative：Wei Shih、Feng Cheng (David) Su Jin-Xiang Wen Bau-Hsing Ann Ta-Lun Huang	Ennostar shareholding 65,700 thousand shares Harvestar shareholding 52,000 thousand shares Precistar shareholding 23,815 thousand shares Praistar shareholding 13,400 thousand shares Epistar shareholding 40,000 thousand shares	57.93%
	Supervisor	Harvestar Investment Corp. Legal representative：Wun-Ting Wang GCS Holdings, Inc. Legal representative：Shu-Wei,Lin
Prolight Opto Technology Corporation(R.O.C)	Director	Wellybond Corporation Legal representative：Teng-Huei Huang、Cun-Zhong Li Dinggeng Investment Corp. Legal representative：Shou-Li Tang Chen-Lun Hsing Chen Huei-Shih Long(Independent Director) Huei-Jhong Jiang (Independent Director) Jhih-Da Yan (Independent Director)	Lextar shareholding 6,700 thousand shares Wellybond shareholding 21,417 thousand shares Liang Li shareholding 6,700 thousand shares	51.15%
Amengine Corporation	Director	Ennostar Inc. Legal representative：Chin-Yung Fan、Cun-Jhong Li、Yung-Sheng Yu Chia-Liang Hsu Chang-Po Chao	Ennostar shareholding 6,922 thousand shares	75.96%
	Supervisor	Wun-Ting Wang

178

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Shenzhen Epikylin ~~O~~ptoelectronics Co.,Ltd.	Director	Episky Corporation (Xiamen) Ltd. Legal representative：Chin-Yung Fan、Chang Bao、Chen-Chen Liu、 Jen-Chau Wu、Wen-Chieh Kuo	Episky (Xiamen) invested RMB 10,000 thousand	100.00%
	Supervisor	Episky Corporation (Xiamen) Ltd. Legal representative：Wun-Ting Wang
Lextar Electronics (Suzhou) Corp.	Director	Hsiu-Mu Tang、Chi-Chung Chao、Kuei-Liang Lai	LEXSG invested USD 80,000 thousand Wellypower invested USD 5,436 thousand Apower invested USD 40,269 thousand	100.00%
	Supervisor	Yan-Qin Wong
Liang Li Venture Corp.	Director	Lextar Electronics Corp. Legal representative：Hsiu-Mu Tang	Lextar shareholding 18,000 thousand	100.00%
Lextar (Singapore) Pte. Ltd.	Director	Teng-Huei Huang、Hsiu-Mu Tang、Kai-Lin Hsu	Lextar invested USD 90,270 thousand	100.00%
Lextar Electronics Korea Ltd.	Director	Ming-De Wu	LEXSG shareholding 22 thousand shares	100.00%
Wellypower Optronics Corporation	Director	Lextar Electronics Corp. Legal representative：Hsiu-Mu Tang、Teng-Huei Huang、 Jhao-Nian Huang	Lextar invested USD 5,153 thousand	100.00%

179

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Apower Optronics Corporation	Director	Lextar Electronics Corp. Legal representative：Hsiu-Mu Tang、Teng-Huei Huang、 Jhao-Nian Huang	Lextar invested USD 31,600 thousand	100.00%
Wellybond Optronics Corporation	Director	Lextar Electronics Corp. Legal representative：Hsiu-Mu Tang	Lextar shareholding 75,000 thousand shares	100.00%
Wellybond Optronics (H.K) Limited	Director	Feng-Cheng Su、Teng-Huei Huang、Hsiu-Mu Tang	Lextar invested USD 500 thousand	100.00%
Trendylite Corporation	Director	Lextar Electronics Corp. Legal representative：Hsiu-Mu Tang、Teng-Huei Huang、 Cun-Jhong Li	Lextar shareholding 3,150 thousand shares	100.00%
	Supervisor	Lextar Electronics Corp. Legal representative：Yan-Qin Wong
Lextar Electronics (Chuzhou) Corp.	Director	Hsiu-Mu Tang、Chi-Chung Chao、Kuei-Liang Lai	Lextar (Suzhou) invested RMB 700,000 thousand	100.00%
	Supervisor	Yan-Qin Wong
Vogito Innovation Co., Ltd.	Director	Wellybond Corporation Legal representative：Hsiu-Mu Tang、Jhao-Nian Huang Qi Da Investment Co., Ltd. Legal representative：Teng-Huei Huang	Wellybond shareholding 100 thousand shares	50.00%
	Supervisor	Yan-Qin Wong

180

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Hexawave, Inc.	Director	Lextar Electronics Corp. Legal representative：Feng-Cheng Su、Huang-Chung Cheng Tung Ho Steel Enterprise Corp. Legal representative：Che-Chung Lin	Lextar shareholding 12,716 thousand shares Wellybond shareholding 12,715 thousand shares	63.04%
	Supervisor	Wellybond Corporation Legal representative：Shao-Lan Wang
Wellyhertz Electronics ~~C~~orp.	Director	Wellybond Corporation Legal representative：Teng-Huei Huang、Hsiu-Mu Tang、Jin-Yu Lu	Wellybond shareholding 30,700 thousand shares	87.46%
	Supervisor	Shao-Lan Wang
ProLight Opto Holding Corporation	Director	Chen-Lun Hsing Chen	ProLight(R.O.C) invested USD150 thousand	100.00%
ProLight Opto Technology Corporation	Director	Chen-Lun Hsing Chen	ProLight Opto Holding invested USD150 thousand	100.00%
Shanghai Welight ~~E~~lectronic Co., Ltd	Director	ProLight Opto Technology Corporation Legal representative：Tong Guan	ProLight Opto Technology invested USD150 thousand	100.00%
	Supervisor	ProLight Opto Technology Corporation Legal representative：Ming-Sian Shih
Harvestar Investment Corp.	Director	Ennostar Inc. Legal representative：Shuang-Lang Peng	Ennostar shareholding 115,000 thousand shares	100.00%

181

Company Name	Title	Name or Representative	Number of shares held（Note 1）	Number of shares held（Note 1）
			Number of shares (Amount of capital)	shareholding percentage
Calystar Investment Corp.	Director	Ennostar Inc. Legal representative：Shuang-Lang Peng	Ennostar shareholding 44,000 thousand shares	100.00%
Precistar Investment Corp.	Director	Ennostar Inc. Legal representative：Shuang-Lang Peng	Ennostar shareholding 48,000 thousand	100.00%
Praistar Investment Corp.	Director	Ennostar Inc. Legal representative：Shuang-Lang Peng	Ennostar shareholding 27,000 thousand	100.00%
Manastar Investment Corp.	Director	Ennostar Inc. Legal representative：Shuang-Lang Peng	~~shares~~ Ennostar shareholding 100 thousand shares	100.00%
Chuzhou Bwin Techology Corp.	Director	Teng-Huei Huang、Hsiu-Mu Tang、Zhi-Sheng Hsu、Ji-Kung Wang	Lextar (Suzhou) invested RMB 29,000 Thousand Lextar (Chuzhou) invested RMB 66,400 thousand	95.40%
	Supervisor	Shao-Lan Wang

Note 1: In this company in attribute as a limited company, the number of shares is not applicable/

Note 2: Pursuant to Company Act prevalent in Mainland China, to be jointly appointed by shareholders before being submitted to the Industry &Commercial Bureau for approval.

Note 3: Gan Force Corporation and SH Optotech Co., Ltd. are under liquidation.

182

8.1.6 Affiliates’ Operating Results

8.1.6 Affiliates’ Operating Results
					As of December 31,2023 Unit: NT			in thousands
Name of enterprise	Amount of capital	Total assets	Total liabilities	net worth	operating revenues	Operating profit	Profit and/or loss of the present term (after tax)	earnings per share (EPS) (NT$) (after tax)
Harvestar Investment Corp.	1,150,000	706,483	0	706,483	0	(221,012)	(220,874)	(1.92)
Calystar Investment Corp.	440,000	366,250	0	366,250	0	(57,450)	(57,229)	(1.30)
Precistar Investment Corp.	480,000	49,086	0	49,086	0	(50,048)	(49,998)	(1.31)
Praistar Investment Corp.	270,000	27,542	0	27,542	0	(36,936)	(36,909)	(1.37)
Manastar Investment Corp.	1,000	974	0	974	0	(14)	(7)	(0.07)
Amengine Corporation	50,566	30,145	6,064	24,081	3,663	(15,365)	(13,671)	(1.50)
Unikorn Semiconductor Corporation	1,682,425	1,862,078	1,220,225	641,853	545,686	(886,237)	(891,055)	(2.74)
Epistar Corporation	11,164,792	42,542,923	9,568,418	32,974,505	11,207,231	(2,376,701)	(6,060,593)	(5.53)
GaNrich Semiconductor Corporation	0	0	0	0	2,191	(21,189)	(21,358)	Note 2
LightingInvestment Corp.	1,914,785	1,583,430	190	1,583,240	193,124	9,069	8,947	0.05
LightingInvestment Ltd.	152,701	726,534	16	726,518	0	(3,766)	(9,031)	Note 1
Epistar(HongKong)Limited	2,556	16	0	16	0	0	262	0.00
Epistar JV Holding (BVI)Co.,Ltd.	14,960,129	9,167,137	282,277	8,884,860	0	(568)	(486,603)	Note 1
Lite Star JV Holding (BVI)Co.,Ltd.	4,169,444	4,007,183	34	4,007,149	0	(176)	(238,730)	Note 1
EpiskyCorporation(Xiamen)Ltd.	2,124,096	5,540,772	3,585,886	1,954,886	4,777,888	(268,784)	(288,026)	Note 1
Episky(HongKong)Ltd.	2,124,096	1,954,893	0	1,954,893	0	0	(288,026)	Note 1
United LED Corporation HongKongLimited	2,689,036	373,338	252	373,086	0	(283)	(6,635)	Note 1
United LED Shan DongCorporation	2,404,500	399,069	36,729	362,340	5,993	(18,508)	(6,803)	Note 1
Epicrystal Corporation(ChangZhou)Ltd.	4,494,125	5,749,142	1,458,612	4,290,530	2,167,070	(111,971)	(255,482)	Note 1
Epicrystal(HongKong)Co.,Ltd.	4,403,034	4,006,499	0	4,006,499	0	0	(238,569)	Note 1
Full Star Enterprises Limited	0	0	0	0	0	0	0	Note 3
Jiangsu CanyangOptoelectronics Ltd.	5,902,624	3,015,258	1,279,559	1,735,699	1,696,150	(53,113)	67,667	Note 1
Can YangInvestments Limited	2,324,763	1,668,983	61,095	1,607,888	0	(179)	(6,414)	Note 1
SH Optotech Co.,Ltd.	64,881	4,822	0	4,822	0	(28)	(76)	0.00
HUGA Holding (SAMOA)Limited	334,967	3,318	0	3,318	0	(47)	82	Note 1
Yen-Rich Opto(HongKong)Limited	0	0	0	0	0	0	0	Note 4
Luxlite(Shenzhen)Corporation Limited	0	0	0	0	0	0	0	Note 5

183

					As of December 31,2023 Unit: NT	As of December 31,2023 Unit: NT	As of December 31,2023 Unit: NT	in thousands
Name of enterprise	Amount of capital	Total assets	Total liabilities	net worth	operating revenues	Operating profit	Profit and/or loss of the present term (after tax)	earnings per share (EPS) (NT$) (after tax)
Luxlite(HK)Corporation Limited	133,979	293,370	33	293,337	0	(66)	13,448	Note 1
Gan Force Corporation	2,218	1,714	340	1,374	0	(403)	697	0.40
Shenzhen Epikylin Optoelectronics Co.,Ltd.	43,770	953,917	734,043	219,874	1,861,436	38,004	30,429	Note 1
Lextar Electronics Corp.	5,149,164	11,490,055	1,785,381	9,704,674	4,557,309	(147,254)	(527)	0.00
LiangLi Venture Corp.	180,000	114,547	0	114,547	0	(74)	(11,701)	(0.65)
Wellybond Corporation	750,000	467,381	153	467,228	0	(5,212)	(96,024)	(1.28)
Trendylite Corporation	31,500	52,876	8,417	44,459	66,902	5,893	4,802	1.52
Vogito Innovation Co.,Ltd.	2,000	6,949	642	6,307	12,723	1,776	1,433	7.17
Lextar(Singapore)Pte. Ltd.	2,709,310	2,613,816	0	2,613,816	0	(363)	155,548	Note 1
Apower Optronics Corporation	381,638	1,240,082	0	1,240,082	0	(101)	74,869	Note 1
Wellypower Optronics Corporation	44,898	172,521	0	172,521	0	(101)	10,235	Note 1
Wellybond Optronics HK Limited	17,888	11,864	0	11,864	0	0	18	Note 1
Lextar Electronics Korea Ltd.	3,025	5,759	808	4,951	8,936	515	447	Note 1
Lextar Electronics(Suzhou)Corp.	3,722,205	8,054,650	4,239,735	3,814,915	402,416	(99,428)	231,556	Note 1
Lextar Electronics(Chuzhou)Corp.	3,094,825	8,980,200	5,289,198	3,691,002	4,735,581	294,197	272,807	Note 1
Lextar Electronics(Xiaman)Co.,Ltd	0	0	0	0	0	(6)	155	Note 6
Chuzhou Bwin TechologyCorp.	445,735	479,432	260,385	219,047	434,903	(106,904)	(104,578)	Note 1
Hexawave,Inc.	403,438	180,256	36,546	143,710	52,065	(80,042)	(99,587)	(2.48)
Wellyhertz Electronics Corp.	35,100	31,767	5,598	26,169	4,964	(15,407)	(15,283)	(4.35)
ProLight Opto TechnologyCorporation	680,620	1,009,475	463,132	546,343	495,949	(121,373)	(125,783)	(1.85)
ProLight Opto HoldingCorporation	4,402	(2,237)	59	(2,296)	0	0	(2,617)	Note 1
ProLight Opto TechnologyCorporation	4,403	(2,266)	30	(2,296)	0	0	(2,617)	Note 1
Shanghai Welight Electronic CO.,LTD	4,695	67,229	69,471	(2,242)	129,719	7,059	(2,617)	Note 1
Yenrich TechnologyCorporation	260,000	227,792	77,407	150,385	246,472	(143,143)	(189,264)	(3.38)

Note 1: Not applicable because the Company is attributed as an offshore firm Note 2: Due to the group's disposal of equity interests, GaNrich Semiconductor Corporation has been excluded from the consolidated entity since December 2023. Note 3: Full Star Enterprises Limited. already completed the liquidation process in May 2023. Note 4: Yen-Rich Opto (Hong Kong) Limited. already completed the liquidation process in July 2023.

184

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Item	2022 First private placement of common stock The issue date was August 31, 2022(deliverydate).
Types of Securitiesprivately placed	Common shares
Approval date and number of shares	Approval date: May 31, 2022 Number of shares Within the limit of 70,000 thousand shares
The Pricing Basis and Reasonableness	1. The price for issuing ordinary shares in the Proposed Private Placement was set to be the price determined by the following calculation, whichever is higher. The reference price was NTD 57.57. (1) The simple arithmetical average closing price of the ordinary shares of the Company on any of the first, third or fifth trading days prior to the pricing date, after deducting the value of bonus shares issued as stock dividends and cash dividends, and adding back the value of the shares canceled in connection with capital reduction. These prices were NTD 49.45, NTD 50.38, and NTD 50.51. The average closing price, NTD 50.51, of the fifth trading day prior to the pricing date was considered the basis price. (2) The simple arithmetical average closing price, NTD 57.57, of the ordinary shares of the Company for thirty trading days prior to the pricing date, after deducting the value of bonus shares issued as stock dividends and cash dividends, and adding back the value of shares canceled in connection with capital reduction was considered as the basisprice.

185

	2. The price for issuing ordinary shares in the Proposed Private Placement shall not be lower than 80% of the reference price. The actual private placement price, NTD 51.82, was 90% of the reference price abiding by the resolution of the shareholder's meeting. 3. The subscription price of this private placement should be reasonable based on the company's future prospects, the fact that the timing, counterparties, and quantity of private placement securities are strictly limited, no retrospective public offering within threeyears, poor liquidity,and other factors. It would have no significant influence on the rights and benefits of shareholders.	2. The price for issuing ordinary shares in the Proposed Private Placement shall not be lower than 80% of the reference price. The actual private placement price, NTD 51.82, was 90% of the reference price abiding by the resolution of the shareholder's meeting. 3. The subscription price of this private placement should be reasonable based on the company's future prospects, the fact that the timing, counterparties, and quantity of private placement securities are strictly limited, no retrospective public offering within threeyears, poor liquidity,and other factors. It would have no significant influence on the rights and benefits of shareholders.	2. The price for issuing ordinary shares in the Proposed Private Placement shall not be lower than 80% of the reference price. The actual private placement price, NTD 51.82, was 90% of the reference price abiding by the resolution of the shareholder's meeting. 3. The subscription price of this private placement should be reasonable based on the company's future prospects, the fact that the timing, counterparties, and quantity of private placement securities are strictly limited, no retrospective public offering within threeyears, poor liquidity,and other factors. It would have no significant influence on the rights and benefits of shareholders.	2. The price for issuing ordinary shares in the Proposed Private Placement shall not be lower than 80% of the reference price. The actual private placement price, NTD 51.82, was 90% of the reference price abiding by the resolution of the shareholder's meeting. 3. The subscription price of this private placement should be reasonable based on the company's future prospects, the fact that the timing, counterparties, and quantity of private placement securities are strictly limited, no retrospective public offering within threeyears, poor liquidity,and other factors. It would have no significant influence on the rights and benefits of shareholders.	2. The price for issuing ordinary shares in the Proposed Private Placement shall not be lower than 80% of the reference price. The actual private placement price, NTD 51.82, was 90% of the reference price abiding by the resolution of the shareholder's meeting. 3. The subscription price of this private placement should be reasonable based on the company's future prospects, the fact that the timing, counterparties, and quantity of private placement securities are strictly limited, no retrospective public offering within threeyears, poor liquidity,and other factors. It would have no significant influence on the rights and benefits of shareholders.
The Method for Selecting Investors	The selection method is to have a good understanding of the Company's operation, and industrial development and directly or indirectly to contribute benefit to the future operation of the Company.
Necessity of Private Placement	If the strategic partners purchase the Company’s shares from the market, this action could not ease the Group’s capital needs produced by the CAPEX for factory construction and production equipment. If the Company adopts public placement, the Company should observe shares for employees and public subscription in accordance with Article 267 of the Company Act and Article 28-1 of the Securities and Exchange Act. In addition, if the shares of subscription reach 10% of total issued shares, the Company should lift the amount of cash capital increase to overly exaggerate capital and ask existing shareholders to waive the subscription rights to allow the specific counterparties to subscribe. The uncertainty goes higher. In contrast to public placement, the fact that private placement of common stock has the advantage of quick and easy fundraising and the restriction of non-transferability within three years will further ensure the long-term collaboration between the Company and the counterparties, as well as the confidentiality of technology patents. Therefore,financingthrough thisprivateplacement could increase the flexibilityof fundingsources.
The date of receivingthe fund	The total raised fund w	as NTD 3,627,400 thousand on July8th,2022.
Specific subscribers	Subscriber	Qualification	Subscription amount	Relation	Participation in the Company’s operation
	AUO Corporation	In accordance with the article 43-6, Paragraph 1,subparagraph 3.	67,250 thousand shares	Director of the Company	To integrate the industry chain and to assure long-term cooperation and confidentiality of technology.
	INNOLUX Corporation	In accordance with the article 43-6, Paragraph 1, subparagraph 3.	2,750 thousand shares	None	None

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Actualprivateplacementprice	NTD 51.82
The difference between the actual private placement price and the referenceprice	The actual price was NTD 51.82 equivalent to 90% of the reference price of NTD 57.57 in accordance with the resolution of the shareholders' meeting.
Impact on the rights and interests of the Company’s shareholders	The issuance number of private equity ordinary shares was 70,000 thousand ordinary shares, approximately 9.27% of the equity after the capital increase.
The plan and execution of private placement application	Our company will use all of its privately raised funds to fund the capital increase of EPISTAR Corporation, its 100%-owned subsidiary (henceforth referred to as EPISTAR). The capital increase funds raised will be used by EPISTAR solely for the Micro LED. 6-inch wafer fabrication facility, the purchase of crystallite and epitaxy process equipment, and other project expenditures. Our company had raised NT$1 billion in capital of Epitaxy as of December 31, 2023, with EPISTAR spending NT$956,126 thousand on the abovementioned funds.
Benefits after private placement	War, inflation, rising interest rates, adjustments to industrial inventories, and drastic drops in customer demand have all had an impact on the global consumer market demand. Our company has had to make a minor adjustment to the rate of production capacity construction due to a slight delay in the development of Micro LED technology and the market demand schedule. The ultimate objective of completingmicro LED massproduction will remain unaltered.

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8.3 The Shares in the Company Held or Disposed of by Subsidiaries in the Most Recent Years and up to the date of publication of the annual report

										Unit: NT$;Shares;%	Unit: NT$;Shares;%
Name of subsidiary	paid-in capital	Source of capital	The Company sharehol ding percenta ge	Date of acquisition or disposal	number of shares acquired and the amount	number of shares disposed of and the amount	invest ment Profit and/or loss	Number and amount of shares held as of the publication date of the Annual Report	Facts of pledge established	The amount of the Company to render endorsement/ guarantee for subsidiaries	Amount lent by the Company to subsidiaries
Lighting ~~I~~nvestment Corp. (Note 1)	NT$2,514,785 thousand	NA	100.00%	2012.12.28 (acquired)	1,282,377 shares NT$135,163 thousand	0 share NT$0 thousand	－	1,282,377 shares NT$57,386 Thousand	None	0	0
Epistar ~~C~~orporation (Note 2)	NT$10,887,014 thousand	NA	100.00%	2021.01.06 (acquired)	1,843,500 shares NT$159,647 thousand	0 share NT$0 thousand	－	3,125,877 Shares NT$129,833 Thousand	None	0	0
Epistar ~~C~~orporation (Note 3)	NT$10,887,014 thousand	NA	100.00%	2023.10.29 (withdrawal)	0 shares 0 thousand	1,843,500 shares NT$18,435 thousand	NA	1,282,377 shares NT$57,386 Thousand	None	0	0
~~F~~iscal year 2021 as of the publication date of the Annual Report					3,125,877 shares 294,810 thousand	0 share 0 thousand	－	1,282,377 shares NT$57,386 thousand	None	0	0

Note 1: Bright Point Company used to hold shares of Guang Jia Photoelectricity Co., Ltd. The shares so held were subsequently transferred in accordance with Articles 29, 13 and 19 of the Business Mergers And Acquisitions Act and pursuant to the provision of a simplified merger, Bright Point Company held share certificates of Ennostar, According to law, it is free of the restriction of the duration of the transfer.

Note 2: Jing Yuan Optronics Company and Long Da Electronic Company, as resolved in the special shareholders meeting convened on 2020/8/7, by means of joint share transfer, acquired on 2021/1/6 up to 100% equity of Jing Yuan Optronics Company and Long Da Electronic Company. Where the shareholders of Jing Yuan Optronics Company exercised the right of objection in accordance with Article 187 of the Company Act and Article 12 of the Business Mergers And Acquisitions Act, Jing Yuan Optronics Company should get the Ennostar share certificates sold out not later than 2023/10/29 at the market price. If such share certificates were not sold out by the deadline, such shares shall be deemed as shares unissued by Ennostar Inc. and should receive registration for alteration. Note 3: It had received registration for alteration in October 2023.

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8.4 Other supplementary notes: None

• 8.5 If any of the situations listed in Article 36, paragraph 3, subparagraph 2 of the Securities and Exchange Act, which might materially affect shareholders' equity or the price of the company's securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of publication of the annual report, such situations shall be listed one by one: None

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Appendix 1

Ennostar Inc. Declaration on Internal Control System

Date: February 23, 2024

The Company carried out a self-evaluation of its internal control system for Fiscal 2023. Based on the result of the self-evaluation, it is hereby declared as enumerated below:

• I. The Company confirms full awareness that the efforts to set up and enforce the internal control system is the holy responsibility of the Company's Board of Directors and the Company has duly set up such a system: The very purpose is to provide a rational assurance that the report of the Company regarding the validity and efficiency of business operation (including profitability, performance and safeguarding the safety & security of assets) is reliable timely, transparent satisfactory to the requirements in compliance to, in turn, offer a rational guarantee.

• II. The internal control system is subject to the inherent limitation. Notwithstanding how well the design has been, a valid internal control system could only provide a rational assurance toward the accomplishment of the three aforementioned targets. Besides, amidst the changes in environment and ambiance, the validity of an internal control system is likely to change. Inside our Company, nevertheless, our internal control system is backed up with a sound self-monitoring mechanism. Once a flaw is identified, the Company shall take countermeasures forthwith.

• III. The Company fixes the right items to judge and verify the validity of the internal control system exactly in accordance with “Regulations Governing Handling of Internal Control System by Public Companies” (hereinafter referred to as the Regulations) to check and verify whether the implementation of the internal control system is valid in terms of design and enforcement. The items for judgment adopted based on the “Regulations” represent the process of management and control. The Company classifies the internal control system into five composing elements: 1. The environment of control, 2. Risk evaluation, 3. Control operation, 4. Information and communications and 5 Monitoring operations. Each and every composting element includes a certain item. For the aforementioned items, please refer to the “Regulations” for more details.

• IV. The Company has duly adopted the aforementioned internal control system regarding the items for judgment to check and make sure that the Company's internal control system is valid in terms of design and implementation.

• V. On the grounds of the results of the evaluation conducted in accordance with the preceding Paragraph, the Company hereby confirms the internal control system of the Company, (including supervision and management over subsidiaries) as of December 31, 2023, including our awareness of the effect of business operation, the extent of the validity and efficiency in accomplishment, the reliability, timeliness, transparency and consistency, compliance with laws and ordinances concerned. Overall, our internal control system proves well valid in terms of design and implementation well capable of accomplishing the aforementioned targets.

• VI. The present Declaration forms a key element of the Company's Annual Report and Prospectus and is hereby disclosed to the public. In case of anything misrepresented, concealed, or illegal found amidst the aforementioned contents disclosed to the public, the Company gets involved in and shall assume the legal responsibilities in accordance with Articles 20, 32, 171, and 174 of the Securities and Exchange Act.

• VII. The present Declaration was officially resolved by the Board of Directors on February 23, 2024, where, none among the nine present directors objected. All present directors confirmed consent to the contents of this Declaration as solemnly declared herewith.

Ennostar Inc.

Chairman: Shuang-Lang Peng General Manager:Shuang-Lang Peng

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Appendix 2

Audit Report issued by the Audit Committee

Please find herewith the Business Report, Financial Statements, and Distribution of Earnings for Fiscal 2023. Among them, the Financial Statements had been duly audited and verified by Certified Public Accountant Dian-Yi Li and Certified Public Accountant and ChienHung Chou Price Waterhouse Coopers who, in turn, duly issued the Audit Report. The aforementioned Business Report, Financial Statements, and Distribution of Earnings had been duly audited by the Audit Committee and proved free of a flaw. This Report is hereby officially issued in accordance with Article 14~4 of the Securities and Exchange Act and Article 219 of the Company Act for your verification.

Attn.:

The regular meeting of shareholders of Ennostar Inc.2024

Convener of Audit Committee

Wei-Min Shen

February 22, 2024

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Appendix 4

INDEPENDENT AUDITORS’ REPORT

PWCR23000379

To the Board of Directors and Shareholders of ENNOSTAR Inc.

Opinion

We have audited the accompanying consolidated balance sheets of ENNOSTAR Inc. and subsidiaries (the “Group”) as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other independent auditors, as described in the other matters section of our report, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Auditing and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters in relation to the consolidated financial statements for the year ended December 31, 2023 are outlined as follows:

Evaluation of Inventories

Description

Please refer to Note 4(14) of the consolidated financial statements for the accounting policy on inventory valuation, Note 5(2) for the accounting estimates and assumptions in relation to inventory valuation, Note 6(6) for the explanations regarding inventory valuation. As of December 31, 2023, the balances of inventories and the allowance for valuation loss were NT$4,954,577 thousand and NT$738,085 thousand, respectively.

The Group is primarily engaged in manufacturing and sales of LED wafers, chips, packages and modules. Due to rapid technological developments, short product lifespans and frequent fluctuations of market prices, the risk of decline in market value and obsolescence for inventories is high. The Group evaluates net realized values for inventories which aged over a specific period of time and specific obsolete inventories in order to provide allowance for valuation loss. Since the identification of the above obsolete inventories and their respective net realizable values are subject to management’s judgment, it was identified as one of the key audit matters.

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following: 1. Obtained an understanding of the Group’s operations and the nature of its industry and

194

interviewed with management to understand the probability of future sales for those out-of-date inventories and to evaluate the reasonableness of allowance for valuation loss.

1. Obtained and validated the accuracy of the detailed listings of inventories aged over a specific period of time and specific obsolete inventories. Validated information of historical sales and discounts for those obsolete inventories to assess the reasonableness of policies in providing allowance for inventory valuation loss.

Impairment assessment of property, plant and equipment and goodwill

Description

Please refer to Note 4(21) of the consolidated financial statements for the accounting policy on impairment of non-financial assets, Note 5(2) for the accounting estimates and assumptions in relation to non-financial assets valuation, Note 6(11) for the explanations regarding non-financial assets impairment. The subsidiary of the Company, Epistar Corporation, and its subsidiaries measure the recoverable amounts of idle property, plant, and equipment at fair value less disposal costs; while operating property, plant, and equipment, as well as goodwill, are assessed at their in-use values. Epistar Corporation and its subsidiaries evaluate impairment of property, plant, and equipment, as well as goodwill, based on the aforementioned recoverable amounts. The assessment of the inuse value of property, plant, and equipment, as well as goodwill, involves estimating future cash flows and determining discount rates. The assumptions used in forecasting future cash flows and their estimated results have a significant impact on the assessment of the in-use value of property, plant, and equipment, as well as goodwill. Therefore, we consider this a key audit matter.

How our audit addressed the matter

We obtained an external expert appraisal report provided by the subsidiary, Epistar Corporation, and its subsidiaries, for the idle property, plant, and equipment. We assessed the valuation method used by the expert and the reasonableness of the fair value. Additionally, for the recoverable amounts of operating property, plant, and equipment, as well as goodwill, the main procedures performed are outlined as follows:

195

1. Discussing with management to understand the subsidiary, Epistar Corporation, and its subsidiaries’ process for estimating future cash flows, and comparing future cash flows with the operational plan approved by the board of directors for consistency.

2. Discussing the operational plan with management to understand its product strategy and execution status.

3. Assessing the reasonableness of the assumptions used by management to estimate future cash flows, including expected growth rates and gross profit margins. Also, evaluating the reasonableness of discount rate parameters, including the risk-free rate of return used in calculating the cost of equity capital, industry risk coefficients, and long-term market returns.

Other matter – Audit by Other Independent Auditors

We did not audit the financial statements of certain consolidated subsidiaries. Those financial statements were audited by other independent auditors, whose reports thereon have been furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the financial statements and the information on the consolidated subsidiaries disclosed in Note 13 was based solely on the reports of other independent auditors. Total assets of those consolidated subsidiaries amounted to NT$258,619 thousand and NT$268,634 thousand, constituting 0.40% and 0.37% of the consolidated total assets as at December 31, 2023 and 2022, respectively, and total operating revenues were both NT$0 thousand for the years then ended, constituting 0% of the consolidated total operating revenues as at December 31, 2023 and 2022, respectively. Furthermore, we did not audit the 2023 and 2022 financial statements of certain equity investments accounted for using equity method. Those financial statements were audited by other independent auditors whose reports thereon were furnished to us and our opinion expressed herein, insofar as it relates to the amounts included in the consolidated financial statements and certain information disclosed in Note 13 relative to these investments, is based solely on the reports of the other independent auditors. These equity investments amounted to NT $2,372,148 thousand and NT$1,781,200 thousand, representing 3.70% and 2.44% of the consolidated total assets as of December 31, 2023 and 2022, respectively, and their comprehensive loss (including share of loss of associates and joint ventures

196

accounted for using equity method and share of other comprehensive (loss)/income of associates and joint ventures accounted for using equity method) amounted to NT$280,066 thousand and NT$144,437 thousand, representing 3.69% and 40.08% of the consolidated comprehensive income (loss) for the years then ended.

Other matter – Parent company only financial reports

We have also expressed an unmodified opinion on the parent company only financial statements of ENNOSTAR Inc. as at and for the years ended December 31, 2023 and 2022.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

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

197

Auditor’s responsibilities for the audit of the consolidated financial statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the

198

consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

1. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

2. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

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

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

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

Li, Tien-Yi

Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan February 23, 2024

------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic[of China, and their applications in practice. ]

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(4) and 8 6(5) and 8 7 6(5) 7 7 6(6) 6(12) 6(2) 6(3) 6(4) and 8 6(7) 6(8) and 8 6(9) 6(10) 6(34)	December 31, 2023 AMOUNT % $ 15,563,488 24 202,446 - 914,438 2 758,666 1 - - 7,672,028 12 468,607 1 145,536 - 26,399 - 4,216,492 7 564,590 1 94,800 - 49,026 - 30,676,516 48 - - 4,198,539 6 241,961 - 3,300,127 5 19,464,972 30 1,671,302 3 646,803 1 1,640,602 3 1,827,341 3 434,299 1 33,425,946 52 $ 64,102,462 100	December 31, 2022	December 31, 2022
		AMOUNT $ 15,563,488 202,446 914,438 758,666 - 7,672,028 468,607 145,536 26,399 4,216,492 564,590 94,800 49,026 30,676,516 - 4,198,539 241,961 3,300,127 19,464,972 1,671,302 646,803 1,640,602 1,827,341 434,299 33,425,946 $ 64,102,462	AMOUNT $ 16,127,132 164,066 647,408 1,872,810 10,285 7,544,597 425,969 127,695 135,418 4,825,045 761,976 - 20,627 32,663,028 90,007 4,445,317 180,137 3,608,999 22,037,075 1,905,157 692,498 4,907,583 1,717,418 796,251 40,380,442 $ 73,043,470	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost 1150 Notes receivable, net 1160 Notes receivable due from related parties, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1410 Prepayments 1460 Non-current assets held for sale - net 1470 Other current assets 11XX Current Assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property, net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				22 - 1 3 - 10 1 - - 7 1 - -
				45
				- 6 - 5 30 3 1 7 2 1
				55
				100

(Continued)

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ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	December 31, 2023 December 31, 2022 Notes AMOUNT % AMOUNT % 6(13) and 8 $ 747,136 1 $ 1,203,495 2 6(15) and 8 1,295,140 2 775,294 1 6(14) 2,284 - 2,214 - 1,805 - 243,332 - 2,692,899 4 2,195,394 3 7 162,909 - 266,478 - 6(16) and 7 3,810,923 6 4,619,754 6 27,561 - 30,804 - 93,481 - 108,817 - 6(17) and 8 1,789,423 3 426,518 1 298,972 1 440,276 1 10,922,533 17 10,312,376 14 6(17) and 8 1,934,187 3 3,691,498 5 6(34) 462,941 1 421,272 - 1,409,803 2 1,476,370 2 6(20) 228,262 - 480,958 1 4,035,193 6 6,070,098 8 14,957,726 23 16,382,474 22 6(21) 7,529,405 12 7,547,840 11 6(22) 46,447,060 73 46,421,664 64 6(23) 216,945 - 216,945 - 154,927 - 290,598 - ( 6,814,704) ( 11) 147,022 - 6(24) ( 24,296) - 75,010 - 6(21) ( 135,163) - ( 294,810) - 47,374,174 74 54,404,269 75 1,770,562 3 2,256,727 3 49,144,736 77 56,660,996 78 9 $ 64,102,462 100 $ 73,043,470 100	December 31, 2022	December 31, 2022
			%
Current liabilities 2100 Short-term borrowings 2110 Short-term notes and bills payable 2120 Financial liabilities at fair value through profit or loss - current 2150 Notes payable 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current tax liabilities 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2399 Other current liabilities - others 21XX Current Liabilities Non-current liabilities 2540 Long-term borrowings 2570 Deferred tax liabilities 2580 Non-current lease liabilities 2600 Other non-current liabilities 25XX Non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent company Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings (Accumulated deficit) Other equity interest 3400 Other equity interest 3500 Treasury shares 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments 3X2X Total liabilities and equity			2 1 - - 3 - 6 - - 1 1
			14
			5 - 2 1
			8
			22
			11 64 - - - - -
			75
			3
			78
			100

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

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ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(25) and 7 $ 22,305,680 100 $ 28,878,250 100 6(6) and 7 ( 21,137,938) ( 95) ( 23,896,688) ( 83) 1,167,742 5 4,981,562 17 13 - 26 - ( 26) - ( 41) - 1,167,729 5 4,981,547 17 6(31)(32) ( 903,897) ( 4) ( 883,849) ( 3) ( 1,733,109) ( 8) ( 1,985,724) ( 7) ( 2,587,406) ( 11) ( 2,723,055) ( 9) 25,099 - 58,783 - ( 5,199,313) ( 23) ( 5,533,845) ( 19) 6(26) 30,306 - 86,700 - ( 4,001,278) ( 18) ( 465,598) ( 2) 6(27) 239,579 1 104,600 - 6(28) 527,160 2 515,509 2 6(29) and 7 ( 3,404,294) ( 15) 217,015 1 6(30) ( 191,944) ( 1) ( 131,602) - ( 6,308) - ( 9,807) - 6(7) ( 547,914) ( 2) ( 713,585) ( 3) ( 3,383,721) ( 15) ( 17,870) - ( 7,384,999) ( 33) ( 483,468) ( 2) 6(33) 62,267 - ( 82,915) - ($ 7,322,732) ( 33) ($ 566,383) ( 2)

4000 Sales revenue 5000 Operating costs 5900 Operating margin 5910 Unrealized loss from sales 5920 Realized profit from sales 5950 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit profit 6000 Total operating expenses 6500 Other income and expenses - net 6900 Operating loss Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7055 Expected credit losses 7060 Share of loss of associates and joint ventures accounted for using equity method 7000 Total non-operating income and expenses 7900 Loss before income tax 7950 Income tax benefit (expense) 8200 Loss for the year

(Continued)

203

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % $ 8,810 - $ 19,277 - 6(3) 18,530 - ( 244,257) ( 1) 6(7) 6,998 - ( 6,876) - 6(7)(33) ( 42,586) - ( 39,989) - ( 8,248) - ( 271,845) ( 1) ( 324,342) ( 1) 175,385 1 6(7) 56,558 - 302,943 1 6(7)(33) 6,262 - ( 428) - ( 261,522) ( 1) 477,900 2 ($ 269,770) ( 1) $ 206,055 1 ($ 7,592,502) ( 34) ($ 360,328) ( 1) ($ 6,782,678) ( 31) $ 38,024 - ($ 540,054) ( 2) ($ 604,407) ( 2) ($ 7,036,568) ( 32) $ 207,398 1 ($ 555,934) ( 2) ($ 567,726) ( 2) 6(34) ($ 9.02) $ 0.05 6(34) ($ 9.02) $ 0.05

Other comprehensive income (loss) Components of other comprehensive income that will not be reclassified to profit or loss 8311 Gain on remeasurements of defined benefit plans 8316 Unrealised gain (loss) from investments in equity instruments measured at fair value through other comprehensive income 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income (loss) that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Cumulative translation differences of foreign operations 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income 8500 Total comprehensive loss Profit (loss) attributable to: 8610 Equity holders of the parent company 8620 Non-controlling interest Comprehensive income (loss) attributable to: 8710 Equity holders of the parent company 8720 Non-controlling interest (Loss) earnings per share (NT$) 9750 Total basic (loss) earnings per share 9850 Total diluted (loss) earnings per share

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

204

ENNOSTAR INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

2022 Balance at January 1, 2022 Profit (loss) for the year Other comprehensive income(loss) for the year Total comprehensive income(loss) Appropriation of 2021 earnings Legal reserve Special reserve Cash dividends Proceeds from issuance of share capital Changes in ownership interests in subsidiaries accounted fo using equity method Net change in equity of associates and joint ventures Difference between consideration and carrying amount of subsidiaries acquired and disposed Non-controlling interests Proceeds from disposal of financial assets at fair value through other comprehensive income Expiration of restricted employee stock Balance at December 31, 2022 2023 Balance at January 1, 2023 Loss for the year Other comprehensive income (loss) for the year Total comprehensive loss Appropriation of 2022 earnings Reversal of special reserve Decrease in treasury shares Changes in ownership interests in subsidiaries accounted fo using equity method Net change in equity of associates and joint ventures Difference between consideration and carrying amount of subsidiaries acquired and disposed Employee stock ownership trust cancellation return Non-controlling interests Proceeds from disposal of financial assets at fair value through other comprehensive income Balance at December 31, 2023	Notes								Equityattribu	table to owners of thep	table to owners of thep	are	nt	nt	nt						Non-controlling interest		Total equity
			Share capital - common stock		Capital surplus				Retained earnings				Other equityinterest			Treasuryshares			Total
							Legal reserve		Special reserve	Unappropriated retained earnings (accumulated deficit)			Cumulative translation differences of foreign operations	U	nrealised gain (loss) from financial assets measured at fair value through other comprehensive income
	6(23) r 6(22) 6(22) 6(24) 6(24) 6(22) 6(23) r 6(22) 6(22) 6(22) 6(22) 6(24)		$ 6,852,514 - - - - - - 700,000 - - - - - ( 4,674 ) $ 7,547,840 $ 7,547,840 - - - - ( 18,435 ) - - - - - - $ 7,529,405		$ 43,830,638 - - - - - - 2,927,400 ( 257,645 ) 104,634 ( 188,037 ) - - 4,674 $ 46,421,664 $ 46,421,664 - - - - ( 141,212 ) 87,548 59,445 19,564 51 - - $ 46,447,060		$ - - - - 216,945 - - - - - - - - - $ 216,945 $ 216,945 - - - - - - - - - - - $ 216,945		$ - - - - - 290,598 - - - - - - - - $ 290,598 $ 290,598 - - - ( 135,671 ) - - - - - - - $ 154,927		$ 2,169,446 38,024 19,477 57,501 ( 216,945 ) ( 290,598 ) ( 1,365,881 ) - - - ( 45,848 ) - ( 160,653 ) - $ 147,022 $ 147,022 ( 6,782,678 ) 6,604 ( 6,776,074 ) 135,671 - ( 160,135 ) - - - - ( 161,188 ) ($ 6,814,704 )		($ 406,535 ) - 442,615 442,615 - - - - - - 3 - - - $ 36,083 $ 36,083 - ( 244,829 ) ( 244,829 ) - - - - - - - - ($ 208,746 )		$ 170,992 - ( 292,718 ) ( 292,718 ) - - - - - - - - 160,653 - $ 38,927 $ 38,927 - ( 15,665 ) ( 15,665 ) - - - - - - - 161,188 $ 184,450		( $ 294,810 ) - - - - - - - - - - - - - ( $ 294,810 ) ( $ 294,810 ) - - - - 159,647 - - - - - - ( $ 135,163 )		$ 52,322,245 38,024 169,374 207,398 - - ( 1,365,881 ) 3,627,400 ( 257,645 ) 104,634 ( 233,882 ) - - - $ 54,404,269 $ 54,404,269 ( 6,782,678 ) ( 253,890 ) ( 7,036,568 ) - - ( 72,587 ) 59,445 19,564 51 - - $ 47,374,174		$ 2,282,798 ( 604,407 ) 36,681 ( 567,726 ) - - - - - - - 541,655 - - $ 2,256,727 $ 2,256,727 ( 540,054 ) ( 15,880 ) ( 555,934 ) - - - - - - 69,769 - $ 1,770,562		$ 54,605,043 ( 566,383 ) 206,055 ( 360,328 ) - - ( 1,365,881 ) 3,627,400 ( 257,645 ) 104,634 ( 233,882 ) 541,655 - - $ 56,660,996 $ 56,660,996 ( 7,322,732 ) ( 269,770 ) ( 7,592,502 ) - - ( 72,587 ) 59,445 19,564 51 69,769 - $ 49,144,736

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

205

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Loss before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Amortization Reversal of expected credit profit Gain on disposal of investments Net (gain) loss on financial assets at fair value through profit or loss Interest expense Interest income Dividend revenue Compensation cost of share-based payment Share of loss of associates and joint ventures accounted for using equity method Gain on disposal of property, plant and equipment Impairment loss of financial assets Impairment loss on non-financial assets Gain from lease modification Expenses transferred to intangible assets Property, plant and equipment transferred to expense (Gain) loss on disposal of intangible assets Unrealized profit from sales Realized loss from sales Other income from recognition of long-term deferred revenues Changes in operating assets and liabilities Changes in operating assets Financial assets at fair value through profit or loss Notes receivable Accounts receivable Other receivables Inventories Prepayments Other current assets Other non-current assets Changes in operating liabilities Financial liabilities at fair value through profit or loss - current Accounts payable Notes payable Other payables Other current liabilities Other non-current liabilities Cash inflow generated from operations Interest received Dividend received Interest paid Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2023 2022 ( $ 7,384,999 ) ( $ 483,468 ) 6(8)(9)(31) 4,594,692 4,952,508 6(10)(31) 245,742 257,757 ( 18,791 ) ( 48,976 ) 6(29) ( 31,717 ) ( 72,090 ) 6(29) ( 16,196 ) 285,929 6(30) 191,944 131,602 6(27) ( 239,579 ) ( 104,600 ) 6(28) ( 43,497 ) ( 44,296 ) 3,003 - 6(7) 547,914 713,585 6(29) ( 164,017 ) ( 42,014 ) 2,500 - 6(11)(29) 3,475,708 13,312 ( 915 ) - ( 3,755 ) - ( 30,273 ) 2,827 6(29) ( 74,594 ) 2,932 ( 13 ) ( 26 ) 26 41 6(20) ( 45,825 ) ( 77,630 ) 26,660 ( 146,522 ) 1,237,087 ( 273,957 ) ( 91,011 ) 4,888,612 166,428 ( 4,911 ) 661,953 867,140 66,118 809,993 ( 27,808 ) 16,145 - 43,498 ( 55,707 ) ( 131,956 ) 90,475 ( 2,253,017 ) ( 1,127 ) 55,616 ( 575,309 ) ( 1,180,492 ) ( 127,044 ) ( 257,961 ) ( 28,110 ) ( 30,366 ) 2,349,963 7,889,215 218,663 86,565 38,497 78,641 ( 168,683 ) ( 41,226 ) ( 58,885 ) ( 54,153 ) 2,379,555 7,959,042

(Continued)

206

ENNOSTAR INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Increase in current financial assets at amortised cost Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Proceeds from disposal of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease (increase) in refundable deposits Acquisition of intangible assets Proceeds from disposal of intangible assets Decrease in other financial assets Increase in other non-current assets Increase (decrease) in changes of consolidated entities Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term loans Increase (decrease) in short-term notes and bill payable Proceeds from long-term loans Repayment of long-term loans Decrease in guarantee deposits received Repayment of principal portion of lease liabilities Cash dividends paid Proceeds from issuance of share capital Employee Stock Ownership Trust cancellation return Change in non-controlling interests Net cash flows (used in) from financing activities Effects of foreign currency exchange Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2023 2022 $ - ( $ 188,173 ) 269,948 186,823 ( 343,498 ) ( 433,127 ) 128,383 - ( 297,778 ) ( 365,338 ) 6(35) 90,387 88,100 6(35) ( 2,033,835 ) ( 4,320,230 ) 6(35) 182,775 389,592 23,410 ( 49,462 ) 6(35) ( 174,161 ) ( 130,200 ) - 6,089 17 391,869 ( 5,912 ) - 26,247 ( 275,343 ) ( 2,134,017 ) ( 4,699,400 ) 6(36) ( 527,091 ) ( 2,295,709 ) 6(36) 296,208 ( 112,938 ) 6(36) 593,000 12,760 6(36) ( 987,406 ) ( 33,909 ) 6(36) ( 24,676 ) ( 108,264 ) 6(36) ( 117,879 ) ( 127,584 ) 6(24) - ( 1,365,881 ) - 3,627,400 985 - 1,700 700,000 ( 765,159 ) 295,875 ( 44,023 ) 235,576 ( 563,644 ) 3,791,093 16,127,132 12,336,039 $ 15,563,488 $ 16,127,132

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

207

ENNOSTAR INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

ENNOSTAR Inc. (the “Company”) was incorporated on January 6, 2021. The Company’s shares have been traded on the Taiwan Stock Exchange in the Republic of China since the date of its incorporation. The share exchange transaction, wherein the Company was established by Epistar Corporation (“Epistar”) and acquired all issued and outstanding ordinary shares of Epistar and Lextar Electronics Corporation (“ Lextar”) by way of share exchange, has been approved both at Epistar’s board meeting on June 18, 2020 and special shareholders’ meeting on August 7, 2020. The share exchange was conducted at an exchange ratio of 1 ordinary share of Epistar and Lextar for 0.5 and 0.275 ordinary share of the Company, respectively. As a result, Epistar and Lextar became wholly-owned subsidiaries of the Company on January 6, 2021, and both of Epistar’s and Lextar’s ordinary shares have been delisted while the ordinary shares of the Company were listed starting from the same date under the symbol “3714”.

The Company and its subsidiaries (collectively referred herein as the “Group”) are engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and light-emitting diode packages and modules.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on February 23, 2024.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS[®] ”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC and became effective from 2023 are as follows:

are as follows:
	Effective date
	Announced by
	International Accounting
New Standards,Interpretations and Amendments	Standards Board(IASB)
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’
Amendments to IAS 12, ‘International tax reform - pillar two model rules’	May 23, 2023
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.

208

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC but not yet adopted by the Group

New standards, interpretations and amendments endorsed by FSC and became effective from 2024 are as follows:

are as follows:
	Effective date
	Announced by
New Standards,Interpretations andAmendments	IASB
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
Amendments to IAS 1, ‘Classification of liabilities as current or non-	January 1, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024
Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’	January 1, 2024
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

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

Accounting Standards as endorsed by the FSC are as follows:
	Effective date
	Announced by
New Standards,Interpretations andAmendments	IASB
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined
between an investor and its associate or joint venture’	by IASB
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, 'Insurance contracts'	January 1, 2023
Amendment to IFRS 17, 'Initial application of IFRS 17 and IFRS 9 –	January 1, 2023
comparative information'
Amendments to IAS 21, ‘Lack of exchangeability’	January 1, 2025
The above standards and interpretations have no significant impact to the Group’s financial condition
and financial performance based on the Group’s assessment.

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “ Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:

• (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.

209

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

• B. The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

• (3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

  • (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

  • (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

  • (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

  • (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

  • (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

210

B. Subsidiaries included in the consolidated financial statements:

Name of Investor	Name ofSubsidiary	Main Business Activities		December 31, 2023 December 31, 2022 100% 100% 100% 100% 100% 100% 100% 100% 75.96% 75.96% 19.53% 17.99% 100% 100% 100% 100% 100% 100% 15.45% 16.65% 7.08% 4.29% 3.98% 4.29% 100% 100% 100% 100% 49.00% 49.00% Ownership	Note
				December 31, 2023
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Precistar Investment Corp. Praistar Investment Corp. Epistar Corporation Epistar Corporation Epistar Corporation	Epistar Corporation Lextar Electronics Corp. Harvestar Investment Corp. Calystar Investment Corp. Amengine Corporation Unikorn Semiconductor Corporation Precistar Investment Corp. Praistar Investment Corp. Manastar Investment Corp. Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation Lighting Investment Corporation Epistar JV Holding (BVI) Co., Ltd. SH Co.,Ltd.	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules Professional investment Professional investment Developing and sales of medical optical sensor modules OEM manufacturing of iii-v semiconductors Professional investment Professional investment Professional investment OEM manufacturing of iii-v semiconductors OEM manufacturing of iii-v semiconductors OEM manufacturing of iii-v semiconductors Professional investment Professional investment Sales of LED chips		100% 100% 100% 100% 75.96% 19.53% 100% 100% 100% 15.45% 7.08% 3.98% 100% 100% 49.00%	Note 2 Note 2 Note 2 Note 2 Note 1

211

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Ownership
Name of Main Business December 31, December 31,
Investor Name of Subsidiary Activities 2023 2022 Note
----- End of picture text -----

Name of Investor	Name of Subsidiary	Main Business Activities	December 31, 2023	December 31, 2022	Note
Epistar Corporation	Full Star Enterprises	Professional	-	100%	Note 5
	Limited	investment
Epistar Corporation	Unikorn	OEM manufacturing	11.89%	12.80%	Note 2
	Semiconductor	of iii-v
	Corporation	semiconductors
Epistar Corporation	GaN Force	Design,	64.32%	64.32%
	Corporation	manfacturing and
		sales of
		semiconductor
		materials and
		modules
Epistar Corporation	Can Yang	Professional	3.53%	3.53%
	Investments Limited	investment
Epistar JV	Lite Star JV	Professional	82.41%	82.41%
Holding (BVI)	Holding (BVI)	investment
Co., Ltd.	Co., Ltd.
Epistar JV	United LED	Professional	74.86%	74.86%
Holding (BVI)	Corporation (Hong	investment
Co., Ltd.	Kong) Limited
Epistar JV	Episky (Hong Kong)	Professional	100%	100%
Holding (BVI)	Limited	investment
Co., Ltd.
Epistar JV	HUGA Holding	Professional	100%	100%
Holding (BVI)	(SAMOA) Limited	investment
Co., Ltd.
Epistar JV	Can Yang	Professional	87.41%	85.26%
Holding (BVI)	Investments Limited	investment
Co., Ltd.
Lite Star JV	Epicrystal (Hong	Professional	100%	100%
Holding (BVI)	Kong) Co., Limited	investment
Co., Ltd.
Epicrystal (Hong	Epicrystal	Manufacturing and	93.38%	93.38%
Kong) Co., Limited	Corporation	sales of LED wafers
	(Changzhou) Ltd.	and chips
United LED	United LED Shan	Manufacturing and	100%	100%
Corporation (Hong	Dong Corporation	sales of LED wafers
Kong) Limited		and chips
Episky (Hong	Episky Corporation	Manufacturing and	100%	100%
Kong) Limited	(Xiamen) Ltd.	sales of LED chips

212

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

Ownership
Name of Main Business December 31, December 31,
Investor Name of Subsidiary Activities 2023 2022 Note
----- End of picture text -----

Name of Investor	Name of Subsidiary	Main Business Activities	December 31, 2023	December 31, 2022	Note
Episky Corporation	Epicrystal	Manufacturing and	3.31%	3.31%
(Xiamen) Ltd.	Corporation	sales of LED wafers
	(Changzhou) Ltd.	and chips
Episky Corporation	Shenzhen Epikylin	Sales of LED chips	100%	100%
(Xiamen) Ltd.	Optoelectronics
	Co.,Ltd
Lighting	Lighting Investment	Professional	100%	100%
Investment	Ltd.	investment
Corporation
Lighting	GaNrich	Design and	-	83.39%	Note 9
Investment	Semiconductor	technology service of
Corporation	Corporation	LED lighting
		products
Lighting	Yenrich Opto (Hong	Sales of LED	-	100%	Note 6
Investment	Kong) Limited	lighting products
Corporation
Lighting	Can Yang	Professional	6.87%	6.87%
Investment	Investments Limited	investment
Corporation
Lighting	GaN Force	Design,	35.68%	35.68%
Investment	Corporation	manfacturing and
Corporation		sales of
		semiconductor
		materials and
		modules
Lighting	Luxlite (HK)	Professional	100%	100%
Investment Ltd.	Corporation Limited	investment
Lighting	Epistar (Hong Kong)	Professional	100%	100%	Note 7
Investment Ltd.	Limited	investment
Can Yang	Jiangsu Canyang	Manufacturing and	100%	100%
Investments	Optoelectronics Ltd.	sales of LED wafers
Limited		and chips
Yenrich	ProLight Opto	Manufacturing and	-	2.68%	Note 8
Technology	Technology	sales of LED
Corporation	Corporation	packages
ProLight Opto	ProLight Opto	Professional	100%	100%
Technology	Holding	investment
Corporation	Corporation

213

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

Ownership
Name of Main Business December 31, December 31,
Investor Name of Subsidiary Activities 2023 2022 Note
----- End of picture text -----

Name of Investor	Name of Subsidiary	Main Business Activities	December 31, 2023	December 31, 2022	Note
ProLight Opto	ProLight Opto	Professional	100%	100%
Holding	Technology	investment
Corporation	Corporation
ProLight Opto	Shanghai Welight	Wholesale and export	100%	100%
Technology	Electronic Co., LTD	and import of LED
Corporation		and related products
Lextar Electronics	Lextar (Singapore)	Professional	100%	100%
Corporation	Pte. Ltd.	investment
Lextar Electronics	Liang Li Venture	Professional	100%	100%
Corporation	Corp.	investment
Lextar Electronics	Wellypower	Professional	100%	100%
Corporation	Optronics	investment
	Corporation
Lextar Electronics	Apower Optronics	Professional	100%	100%
Corporation	Corporation	investment
Lextar Electronics	Wellybond	Professional	100%	100%
Corporation	Corporation	investment
Lextar Electronics	Wellybond Optronics	Professional	100%	100%	Note 7
Corporation	(H.K.) Limited	investment
Lextar Electronics	Trendylite	Sales of products	100%	90.50%
Corporation	Corporation
Lextar Electronics	Hexawave, Inc.	Manufacturing and	31.52%	31.81%
Corporation		sales of compound
		semiconductor
		materials and
		modules
Lextar Electronics	Yenrich Technology	Manufacturing and	100%	100%
Corporation	Corporation	sales of LED
		packages
Lextar Electronics	ProLight Opto	Manufacturing and	9.84%	9.55%	Note 8
Corporation	Technology	sales of LED
	Corporation	packages
Lextar (Singapore)	Lextar Electronics	Manufacturing and	100%	100%
Pte. Ltd.,	(Suzhou) Corp.	sales of LED wafers,
Wellypower		chips, packages and
Optronics		modules
Corporation and
Apower Optronics
Corporation
Lextar (Singapore)	Lextar Electronics	Manufacturing and	-	100%	Note 3
Pte. Ltd.	(Xiamen) Co., Ltd.	sales of LED lighting
		and modules

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Ownership
Name of Main Business December 31, December 31,
Investor Name of Subsidiary Activities 2023 2022 Note
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Name of Investor	Name of Subsidiary	Main Business Activities	December 31, 2023	December 31, 2022	Note
Lextar (Singapore)	Lextar Electronics	Sale of LED and	100%	100%
Pte. Ltd.	Korea Ltd.	after-sales service
Liang Li Venture	ProLight Opto	Manufacturing and	9.84%	9.09%	Note 8
Corp.	Technology	sales of LED
	Corporation	packages
Wellybond	VOGITO	Design of lighting	50.00%	50.00%
Corporation	INNOVATION CO.,
	LTD.
Wellybond	ProLight Opto	Manufacturing and	31.47%	29.84%	Note 8
Corporation	Technology	sales of LED
	Corporation	packages
Wellybond	Hexawave, Inc.	Manufacturing and	31.52%	31.81%
Corporation		sales of compound
		semiconductor
		materials and
		modules
Wellybond	WellyHertz	Manufacturing and	87.46%	86.96%
Corporation	Electronics Corp.	sales of switching
		power supply module
Lextar Electronics	Lextar Electronics	Manufacturing and	100%	100%
(Suzhou) Corp.	(Chuzhou) Corp.	sales of LED wafers,
		chips, packages and
		modules
Lextar Electronics	Chuzhou Bwin	Developing,	29.00%	48.33%	Note 4
(Suzhou) Corp.	Technology Corp.	manufacturing, sales
		of metal and plastic
		technical products
Lextar Electronics	Chuzhou Bwin	Developing,	66.40%	-	Note 4
(Chuzhou) Corp.	Technology Corp.	manufacturing, sales
		of metal and plastic
		technical products

• Note 1: Due to the control over the entity’s financial and operational policies, this company is included in the consolidated financial statements.

• Note 2: ENNOSTAR Inc. and Harvestar Investment Corp. had participated in the capital increase of Unikorn in the first quarter of 2022, and acquired part of shares of Unikorn from Epistar due to the reorganization in the second quarter of 2022. ENNOSTAR Inc., Harvestar Investment Corp., Precistar Investment Corp., and Praistar Investment Corp. had participated in the capital increase of Unikorn in the fourth quarter of 2022 and second quarter of 2023, therefore, ENNOSTAR, Harvestar, Precistar, Praistar and Epistar’s shareholding ratios were 19.53%, 15.45%, 7.08%, 3.98% and 11.89% on December 31, 2023, respectively.

Note 3: Lextar Electronics (Xiamen) Co., Ltd. has applied for dissolution in January, 2023 Note 4: Due to changes in equity, it has been included in the consolidated entity since April, 2023. Note 5: Dissolved in May, 2023 because of discontinuance of operations.

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  - Note 6: Dissolved in July, 2023 because of discontinuance of operations.

  - Note 7: Epistar (Hong Kong) Corporation Limited and Wellybond Optronics (H.K) Limited have applied for liquidation in 2023.

  - Note 8: Due to the reorganization, the shares of ProLight Opto Technology Corporation originally held by Yenrich Technology Corporation are held by Epistar, Liang Li Venture Corp. and Wellybond Corporation.

  - Note 9: Due to the disposal of GaNrich Semiconductor Corporation’s shares, it has been excluded from the consolidated entity since December, 2023.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interest that are material to the Group: None.

• (4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within “other gains and losses”.

• B. Translation of foreign operations

• (a) The operating results and financial position of all the group entities that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

  • 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 rate of that period; and

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

• (b) When the foreign operation partially disposed of or sold is an associate or jointly controlled entity, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Group still retains partial interest in the former foreign associate or jointly controlled

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entity after losing significant influence over the former foreign associate, or losing joint control of the former jointly controlled entity, such transactions should be accounted for as disposal of all interest in these foreign operations.

• (c) When the foreign operation 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 interest in this foreign operation. In addition, even when the Group still retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

• (d) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

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

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

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

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

• Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (7) Financial assets at fair value through profit or loss

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, the derivative financial assets are recognised and derecognised using trade date accounting, the beneficiary certificates are recognised and derecognised using settlement date accounting.

• C. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

• D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value: The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

• (9) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows. (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

• For financial assets at amortised at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

• (12) Derecognition of financial assets

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

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

• B. The contractual rights to receive cash flows from the financial assets have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial assets.

• C. The Group neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

• －

• (13) Leasing arrangements (lessor) operating leases

• Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

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(14) Inventories

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

(15) Non-current assets held for sale

• Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

(16) Investments accounted for using equity method - associates

• A. Associates are all entities over which the Group has significant influence but no control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes does not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• F. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.

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

219

associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

• H. When the Group disposes its investment in an associate, if it 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 still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• (17) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

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

The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures	20 ~ 50 years
Plant and construction	2 ~ 15 years
Machinery	2 ~ 20 years
Office equipment	2 ~ 20 years
Leasehold improvements	3 ~ 15 years
Other equipment	2 ~ 20 years

(18) Leasing arrangements (lessee) － right-of-use assets / lease liabilities

• A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable;

• (b) Variable lease payments that depend on an index or a rate; and

• (c) Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract

220

modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

  • (b) Any lease payments made at or before the commencement date;

  • (c) Any initial direct costs incurred by the lessee; and

  • (d) An estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

  • The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

• D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognise the difference in profit or loss.

• (19) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 20 ~ 50 years.

• (20) Intangible assets

• A. Patents

  • Patents are stated at cost and amortized on a straight-line basis over their legal terms or economic service lives, whichever is shorter.

• B. Technology know-how

  • Technology know-how is stated at cost and amortized on a straight-line basis over their economic service lives.

• C. Computer software

  • Computer software is stated at cost and amortized on a straight-line basis over their estimated useful lives of 2 ~ 10 years.

• D. Goodwill

  • Goodwill arising from a business combination is accounted for by applying the acquisition method.

• E. Other intangible assets

  • Other intangible assets, mainly electricity facilities, are stated at cost and amortized using the straight-line method over 3 to 5 years.

• (21) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated

221

to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

• (22) Borrowings

• A. Borrowings comprise of long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan 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 drawn-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

• (23) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (24) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term. Derivatives are also categorised as financial liabilities held for trading unless they are designated as hedges.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognised in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognised in profit or loss.

• C. If the credit risk results in fair value changes in financial liabilities designated as at fair value through profit or loss, they are recognised in other comprehensive income in the circumstances other than avoiding accounting mismatch or recognising in profit or loss for loan commitments or financial guarantee contracts.

(25) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(26) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• (b) Defined benefit plans

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the

222

balance sheet date less the fair value of plan assets. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

     - ii. Remeasurement arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

     - iii. Past service costs are recognized immediately in profit or loss.

• C. Termination benefits

  • Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group’s decision to terminate an employee’s employment before the normal retirement date, or an employee’s decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognises expense as it can no longer withdraw an offer of termination benefits or it recognises relating restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

• D. Employees’ compensation and directors’ remuneration

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

• (27) Employee share based payment

• A. For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.

• B. Treasury shares transferred to employees:

  • (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period.

  • (b) For treasury shares where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must compensate the Group for the difference between the fair value of the equity instruments and their payments on the stocks.

• C. Restricted stocks:

  • (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.

  • (b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Group recognises the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.

  • (c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Group and the Group must refund

223

their payments on the stocks, the Group recognises the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognises the payments from the employees who are expected to be eventually vested with the stocks in ’capital surplus – others’.

(28) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year when the stockholders resolve to retain the earnings.

• C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D. 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.

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realize the asset and settle the liability simultaneously.

• F. A deferred tax asset shall be recognised for the carryforward of unused tax credits resulting from research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilised.

• (29) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects,

224

is included in equity attributable to the Company’s equity holders.

• (30) Dividends

• Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s Board of Directors. Cash dividends are recorded as liabilities.

• (31) Revenue recognition

• A. Sales of goods:

  • (a) The Group is engaged in the research, development and sale of EPI wafers and chips of AlGaInP, AlGaAs and InGaN and light-emitting diode packages and modules. Sales are recognised when control of the products has transferred, being when the products are delivered to the customer, the wholesaler has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

  • (b) Sales revenue is recognised on the net amount of contract price after deduction of sales discounts and allowances. The sales discounts and allowances were offered to customers based on aggregate sales over a 12-month period. Accumulated experience is used to estimate and provide for the sales discounts and allowances, using the expected value method, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales are made with a credit term less than 1 year, which is consistent with market practice.

  • (c) The Group’s obligation to provide a repair refund for faulty products under the standard warranty terms is recognised as a provision.

  • (d) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Revenue from licencing intellectual property

  • (a) The Group entered into a contract with a customer to grant a licence of patents and intellectual property to the customer. Given the licence is distinct from other promised goods or services in the contract, the Group recognises the revenue from licencing when the licence transfer to a customer either at a point in time or over time based on the nature of the licence granted. The nature of the Group’s promise in granting a licence is a promise to provide a right to access the Group’s intellectual property if the Group undertakes activities that significantly affect the patents and intellectual property to which the customer has rights, the customer is affected by the Group’s activities and those activities do not result in the transfer of a good or a service to the customer as they occur. The royalties are recognised as revenue on a straight-line basis throughout the licencing period. In case the abovementioned conditions are not met, the nature of the Group’s promise in granting a licence is a promise to provide a right to use the Group’s intellectual property and therefore the revenue is recognised when transferring the licence to a customer at a point in time.

  • (b) Some contracts require a sales-based royalty in exchange for a licence of intellectual property. The Group recognises revenue when the performance obligation has been satisfied and the subsequent sale occurs.

• C. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Group recognises the incremental

225

costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

(32) Government grants

• Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognized as non-current liabilities and are amortized to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(33) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognised and the fair value of previously held equity interest in the acquiree is less than the fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognised directly in profit or loss on the acquisition date.

(34) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Chief Operating Decision-Maker is responsible for allocating resources and assessing performance of the operating segments.

1. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

(1) Critical judgments in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

1. Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of obsolete inventories or

226

inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation.

As of December 31, 2023, the carrying amount of inventories was $4,216,492.

1. Evaluation of impairment loss of goodwill

The evaluation of impairment loss of goodwill relies on the Group's subjective judgment, including identifying cash-generating units and allocating assets, liabilities and goodwill to relevant cash-generating units, and determining the recoverable amount of the relevant cashgenerating units. For the assessment of goodwill impairment, please refer to Note 6(11).

As of December 31, 2023, the goodwill after the Group recognizes impairment losses is $754,266.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and petty cash Checking accounts and demand deposits Time deposits Bonds sold under repurchase agreement	December 31, 2023 1,303 $ 4,620,140 10,579,045 363,000 15,563,488 $	December31,2022
		1,451 $ 2,838,714 12,415,967 871,000
		16,127,132 $

The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

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

Items		December	31,2023		December	31,2022
Current items:
Financial assets mandatorily measured
at fair value through profit or loss
Beneficiary certificates		$	-		$	45,180
Listed stocks			193,439			193,439
Derivatives			52,303			22,415
			245,742			261,034
Valuation adjustment	(		43,296)	(		96,968)
			202,446			164,066
Non-current items:
Financial assets mandatorily measured
at fair value through profit or loss
Unlisted stocks			212,005			298,308
Valuation adjustments	(		212,005)	(		208,301)
			-			90,007
		$	202,446		$	254,073

227

• A. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

December 31, 2023

Notional principal (in Financial instruments thousands) Currency Maturity date Forward foreign exchange contract - sell USD 60,100 USD to NTD 2024.01.02~2024.05.17 Forward foreign exchange contract - sell USD 42 USD to JPY 2024.01.24~2024.02.22 Forward foreign exchange contract - sell USD 19,000 USD to RMB 2024.01.30~2024.05.17 Forward foreign exchange contract - sell USD 15,000 RMB to NTD 2024.01.02~2024.02.01 December 31, 2022 Notional principal (in Financial instruments thousands) Currency Maturity date Forward foreign exchange contract - sell USD 68,000 USD to NTD 2023.01.05~2023.04.20 Forward foreign exchange contract - sell USD 81 USD to JPY 2023.01.04~2023.03.24 Forward foreign exchange contract - sell USD 8,000 USD to RMB 2023.02.24~2023.04.25

• The Group entered into forward foreign exchange contracts to hedge exchange rate risk of export and import proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• B. The net income (loss) recognized by the Group amounted to $16,196 and ($285,929) for the years ended December 31, 2023 and 2022, respectively.

• C. Information on credit risk of financial assets at fair value through profit or loss is provided in Notes 12(2) and (3).

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

==> picture [487 x 130] intentionally omitted <==

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

Items December 31, 2023 December 31, 2022
Non-current items:
Equity instruments
Listed stocks $ 760,319 $ 1,170,038
Unlisted stocks 3,525,330 3,564,502
4,285,649 4,734,540
Valuation adjustment ( 87,110) ( 289,223)
$ 4,198,539 $ 4,445,317
----- End of picture text -----

• A. The Group has elected to classify investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $4,198,539 and $4,445,317 as at December 31, 2023 and 2022, respectively.

228

• B. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensiveincome Fair value change recognized in other comprehensive income (loss) Dividend income recognized in profit or loss held at end of period	Year ended Year ended December 31, 2023 December 31, 2022 18,530 $ 244,257) ($ 38,497 $ 44,296 $

• C. As of December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $4,198,539 and $4,445,317, respectively.

• D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Notes 12(2) and (3).

• (4) Financial assets at amortised cost

	Items December 31, 2023	December	31,2022
Current items:
Others	914,438 $	$	647,408
Non-current items:
Others	241,961 $	$	180,137

A.	Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed	Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed	Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed
	below:
		Year ended	Year ended
		December31,2023	December31,2022
	Interest income	3,970 $	4,860 $

• B. As of December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group was $1,156,399 and $827,545, respectively.

• C. Details of the Group’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in certificates of deposit are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

(5) Notes and accounts receivable

Notes and accounts receivable
		December31,2023			December31,2022
Notes receivable		$	758,666		$	2,756,798
Less: Allowance for uncollectible accounts			-	(		883,988)
		$	758,666		$	1,872,810
Accounts receivable		$	7,684,183		$	7,597,170
Less: Allowance for uncollectible accounts	(		12,155)	(		52,573)
		$	7,672,028		$	7,544,597

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A. The ageing analysis of accounts receivable and notes receivable is as follows:

		December	31,2023			December	31,2022	31,2022
	Accountsreceivable		Notesreceivable		Accountsreceivable		Notesreceivable
Not past due	$	7,292,122	$	758,666	$	7,168,484	$	1,872,810
Up to 30 days		339,486		-		255,017		-
31 to 90 days		28,106		-		45,268		-
91 to 180 days		12,417		-		26,347		-
Over 180 days		12,052		-		102,054		883,988
	$	7,684,183	$	758,666	$	7,597,170	$	2,756,798

The above ageing analysis was based on past due date.

• B. As of December 31, 2023 and 2022, the Group had outstanding discounted notes receivable amounting to $369,426 and $193,017, respectively. The Group has payment obligations when the drawers of the notes refuse to pay for the notes at maturity. However, the credit rating of the aforesaid acceptance bank is extremely high, and the Group judges that the discounted notes receivable meets the requirements for delisting financial assets and will be deducted from notes receivable directly. The liabilities arising on discounted notes receivable are recognized in shortterm borrowings, please refer to Note 6(13) for details.

• C. Details of the Group’s notes receivable pledged to others as collateral are provided in Note 8.

• D. The Group holds collateral including commercial papers, financial assets, patents as well as machinery and equipment as security for accounts receivable.

• E. As of December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the notes receivable held by the Group was $758,666 and $1,872,810, respectively; the maximum exposure to credit risk in respect of the amount that best represents the accounts receivable held by the Group was $7,672,028 and $7,544,597, respectively.

• F. Information on credit risk of accounts receivable and notes receivable is provided in Note 12(2).

• (6) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		December31,2023
	Allowance for Cost valuation loss 1,490,128 $ 152,258) ($ 1,195,739 245,530) ( 2,268,710 340,297) ( 4,954,577 $ 738,085) ($ December31,2022		Bookvalue
			1,337,870 $ 950,209 1,928,413
			4,216,492 $
	Allowance for Cost valuation loss 1,283,725 $ 116,182) ($ 1,861,632 273,819) ( 2,542,195 472,506) ( 5,687,552 $ 862,507) ($		Bookvalue
			1,167,543 $ 1,587,813 2,069,689
			4,825,045 $

230

The cost of inventories recognised as expense for the years ended December 31, 2023 and 2022:

(7)

Investments accounted for using equity method A. The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below: As of December 31, 2023 and 2022, the carrying amount of the Group’s individually immaterial associates amounted to $3,300,127 and $3,608,999, respectively. B. The fair value of the Group’s material associates with quoted market prices is as follows: Year ended Year ended December31,2023 December31,2022 Cost of goods sold 17,885,912 $ 21,166,872 $ Scrap loss 41,842 39,617 (Recovery benefits in market value) loss on market price decline 6,339) ( 359,310 Loss on idle capacity 3,461,702 2,386,793 Other 245,179) ( 55,904) ( 21,137,938 $ 23,896,688 $ December31,2023 December31,2022 Associates: LEDAZ Co., Ltd. - $ 42,912 $ LEDOLUX Sp. Zo.O. 11,933 11,310 Interelight Optotech (HK) Co., Limited 7,475 10,941 LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. 628,802 441,348 GCS Holdings, Inc. 864,280 1,090,517 Changzhou Chemsemi Co., Ltd. 583,853 791,206 Joint Power Exponent, Ltd. 36,541 54,095 iReach Corporation 53,262 50,413 Chuzhou Bwin Technology Corp. - 76,339 Tyntek Corporation 1,027,919 939,581 WellyWave Semiconductors Inc. 41,771 55,925 TE Opto Corporation 43,980 44,069 Domi-Star Optoelectronics Corporation 311 343 3,300,127 $ 3,608,999 $ Year ended Year ended Attributable to the Group: December 31, 2023 December31,2022 Loss for the period from continuing operations 547,914) ($ 713,585) ($ Other comprehensive income 67,666 296,067 Total comprehensive loss 480,248) ($ 417,518) ($

231

	December31,2023	December31,2023	December31,2022	December31,2022
GCS Holdings, Inc.	$	785,312	$	957,879
Tyntek Corporation		838,525		653,891
	$	1,623,837	$	1,611,770

• C. In the first quarter of 2022, due to changes in control of LEADSTAR Micro-crystal Display Corporation (JiangSu) Ltd., the Group lost control over the company and therefore reclassified it into investments accounted for using equity method at the same period.

• D. In the first quarter of 2022, the Group disposed part of its shares of WellyWave Semiconductors Inc. and lost control over the entities. Therefore, the Group reclassified it into investments accounted for using equity method at the same period.

• E. In the second quarter of 2023, the Group acquired 92.33% shares of Chuzhou Bwin Technology Corp.. Therefore the Group has control over it and merged it into the consolidated entity in this quarter. Please Note 4(3) for details.

(8) Property, plant and equipment

At January 1, 2023 Cost Accumulated depreciation and impairment 2023 Opening net book amount at January 1 Additions Transfer Acquired from business combinations Disposals Reclassified to non- current assets held for sale Reclassifications Reclassified to investment property Depreciation charge Impairment loss Disposals of subsidiary Net exchange differences Closing net book amount at December 31 At December 31, 2023 Cost Accumulated depreciation and impairment	Land 1,558,195 $ - 1,558,195 $ 1,558,195 $ - - - - - - - - - - - 1,558,195 $ 1,558,195 $ - 1,558,195 $	Buildings and structures Machinery 18,091,812 $ 45,433,185 $ 9,539,687) ( 35,440,955) ( 8,552,125 $ 9,992,230 $ 8,552,125 $ 9,992,230 $ 8,446 60,242 240,648 1,235,647 63,797 83,012 8,902) ( 120,534) ( 62,539) ( - 20,106 78,583 10,513 - 899,986) ( 3,353,717) ( 193,665) ( 135,231) ( - - 49,451) ( 38,381) ( 7,681,092 $ 7,801,851 $ 17,837,732 $ 44,842,113 $ 10,156,640) ( 37,040,262) ( 7,681,092 $ 7,801,851 $	Office equipment	Leasehold improvements Others 346,373 $ 1,734,085 $ 258,630) ( 1,361,854) ( 87,743 $ 372,231 $ 87,743 $ 372,231 $ 1,833 47,130 6,418 67,463 - 18,124 - 3,763) ( - - - 1,824 - - 22,658) ( 145,249) ( 3,080) ( 689) ( - - 199) ( 6,608) ( 70,057 $ 350,463 $ 346,879 $ 1,885,365 $ 276,822) ( 1,534,902) ( 70,057 $ 350,463 $	Construction in progress and equipment to be inspected Total 1,383,127 $ 69,088,810 $ - 47,051,735) ( 1,383,127 $ 22,037,075 $ 1,383,127 $ 22,037,075 $ 2,071,849 2,193,240 1,572,196) ( - 3,717 168,650 - 133,791) ( - 62,539) ( 57,774 156,206 - 10,513 - 4,456,068) ( - 333,374) ( - 108) ( 20,025) ( 114,832) ( 1,924,246 $ 19,464,972 $ 1,924,246 $ 68,794,818 $ - 49,329,846) ( 1,924,246 $ 19,464,972 $	Total
			542,033 $ 450,609) ( 91,424 $ 91,424 $ 3,740 22,020 - 592) ( - 2,081) ( - 34,458) ( 709) ( 108) ( 168) ( 79,068 $ 400,288 $ 321,220) ( 79,068 $
						19,464,972 $

232

At January 1, 2022 Cost Accumulated depreciation and impairment 2022 Opening net book amount at January 1 Additions Transfer Disposals Reclassifications Reclassified to investment property Depreciation charge Impairment loss Disposals of subsidiary Net exchange differences Closing net book amount at December 31 At December 31, 2022 Cost Accumulated depreciation and impairment	Land 1,558,195 $ - 1,558,195 $ 1,558,195 $ - - - - - - - - - 1,558,195 $ 1,558,195 $ - 1,558,195 $	Buildings and Office structures Machinery equipment 17,347,652 $ 47,907,326 $ 516,930 $ 9,156,255) ( 35,274,900) ( 409,162) ( 8,191,397 $ 12,632,426 $ 107,768 $ 8,191,397 $ 12,632,426 $ 107,768 $ 8,280 251,877 13,748 1,328,963 1,536,649 40,974 10,380) ( 323,756) ( 193) ( 20,362) ( 15,314 - 4,906 - - 911,507) ( 3,655,684) ( 64,806) ( 9,118) ( 4,194) ( - - 545,435) ( 7,092) ( 30,054) ( 85,033 1,025 8,552,125 $ 9,992,230 $ 91,424 $ 18,091,812 $ 45,433,185 $ 542,033 $ 9,539,687) ( 35,440,955) ( 450,609) ( 8,552,125 $ 9,992,230 $ 91,424 $	Leasehold improvements Others 365,056 $ 1,700,988 $ 259,314) ( 1,285,825) ( 105,742 $ 415,163 $ 105,742 $ 415,163 $ 4,005 44,009 10,234 121,253 5,999) ( 47,299) ( 16 - - - 26,117) ( 132,988) ( - - 412) ( 29,692) ( 274 1,785 87,743 $ 372,231 $ 346,373 $ 1,734,085 $ 258,630) ( 1,361,854) ( 87,743 $ 372,231 $	Construction in progress and equipment to be inspected Total 1,288,661 $ 70,684,808 $ - 46,385,456) ( 1,288,661 $ 24,299,352 $ 1,288,661 $ 24,299,352 $ 3,295,514 3,617,433 3,038,073) ( - - 387,627) ( 6,701 1,669 - 4,906 - 4,791,102) ( - 13,312) ( 173,884) ( 756,515) ( 4,208 62,271 1,383,127 $ 22,037,075 $ 1,383,127 $ 69,088,810 $ - 47,051,735) ( 1,383,127 $ 22,037,075 $	Total
					22,037,075 $

Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

－ (9) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery, transportation equipment and office equipment. Rental contracts are typically made for periods of 2 to 50 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise of buildings, transportation equipment and office equipment. Low-value assets comprise of office equipment.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Machinery Transportation equipment Office equipment	December31,2023 Carryingamount $ 1,518,217 58,593 51,458 10,413 32,621 1,671,302 $	December31,2022 Carryingamount $ 1,670,856 54,399 126,084 16,610 37,208 1,905,157 $

233

Year ended December31,2023 Depreciation charge Land 65,521 $ Buildings 23,296 Machinery 31,736 Transportation equipment 6,198 Office equipment 11,873 138,624 $	Year ended December31,2022 Depreciation charge
	63,166 $ 19,477 57,165 7,707 13,891
	161,406 $

• D. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $66,156 and $338,279, respectively.

• E. The information on profit and loss accounts relating to lease contracts is as follows:

		Year ended		Year ended
	December 31, 2023		December 31, 2022
Items affecting profit or loss
Interest expense on lease liabilities	$	21,156	$	21,409
Expense on short-term lease contracts		41,061		21,235
Expense on leases of low-value assets		5,466		6,668

• F. For the years ended December 31, 2023 and 2022, the Group’s total cash outflow for leases were $164,731 and $172,782, respectively.

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(10) Intangible assets

Intangible assets
		Patents		Goodwill		Software		Others		Total
At January 1, 2023
Cost	$	2,935,957	$	7,087,692	$	560,309	$	131,859	$	10,715,817
Accumulated amortisation
and impairment	(	2,030,294)	(	3,191,092)	(	469,307)	(	117,541)	(	5,808,234)
	$	905,663	$	3,896,600	$	91,002	$	14,318	$	4,907,583
2023
Opening net book amount
as at January 1	$	905,663	$	3,896,600	$	91,002	$	14,318	$	4,907,583
Additions－acquired
separately		3,055		-		74,183		-		77,238
Additions－acquired through
business combinations		-		-		-		56,160		56,160
Disposals	(	14,061)		-		-		-	(	14,061)
Reclassifications		3,755		-		268		-		4,023
Amortisation charge	(	183,723)		-	(	50,447)	(	11,572)	(	245,742)
Impairment loss		-	(	3,142,334)		-		-	(	3,142,334)
Disposals of subsidiary	(	299)		-		-		-	(	299)
Net exchange differences	(	974)		-	(	60)	(	932)	(	1,966)
Closing net book amount as
at December 31	$	713,416	$	754,266	$	114,946	$	57,974	$	1,640,602
At December 31, 2023
Cost	$	2,920,200	$	763,034	$	633,286	$	187,087	$	4,503,607
Accumulated amortisation
and impairment	(	2,206,784)	(	8,768)	(	518,340)	(	129,113)	(	2,863,005)
	$	713,416	$	754,266	$	114,946	$	57,974	$	1,640,602

235

		Patents		Goodwill		Software	Others	Others		Total
At January 1, 2022
Cost	$	2,750,991	$	7,087,692	$	513,660	$	128,843	$	10,481,186
Accumulated amortisation
and impairment	(	1,828,302)	(	3,191,092)	(	410,601)	(	109,528)	(	5,539,523)
	$	922,689	$	3,896,600	$	103,059	$	19,315	$	4,941,663
2022
Opening net book amount
as at January 1	$	922,689	$	3,896,600	$	103,059	$	19,315	$	4,941,663
Additions－acquired
separately		167,091		-		47,614		3,015		217,720
Disposals	(	2,969)		-	(	67)		-	(	3,036)
Reclassifications		8,456		-		2,849		-		11,305
Amortisation charge	(	190,387)		-	(	59,358)	(	8,012)	(	257,757)
Disposals of subsidiary		-		-	(	3,291)		-	(	3,291)
Net exchange differences		783		-		196		-		979
Closing net book amount as
at December 31	$	905,663	$	3,896,600	$	91,002	$	14,318	$	4,907,583
At December 31, 2022
Cost	$	2,935,957	$	7,087,692	$	560,309	$	131,859	$	10,715,817
Accumulated amortisation
and impairment	(	2,030,294)	(	3,191,092)	(	469,307)	(	117,541)	(	5,808,234)
	$	905,663	$	3,896,600	$	91,002	$	14,318	$	4,907,583
Details of amortisation on	intangible assets		are as follows:
						Year ended		Year ended
					December31,		2023	December31,2022
Operating costs					$	88,620		$		88,857
Selling expenses							612			463
Administrative expenses						104,344				111,290
Research and development	expenses					52,165				57,147
					$	245,741		$		257,757

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(11) Impairment of non-financial assets

The Group assessed that production line adjustments and configurations resulted in idling or impairment of certain property, plant and equipment. The Group wrote down the carrying amount of the assets based on the recoverable amount and recognised impairment losses of $ 3,475,707 and $13,312 for the years ended December 31, 2023 and 2022, respectively. The recoverable amount is the assets’ fair value less costs of disposal. The fair value is classified as a level 3 fair value. Details of impairment are as follows:

of impairment are as follows:
		Year ended		Year ended
		December31,2023		December31,2022
		Recognised inprofit or loss
Impairment loss－buildings and structure	$	193,665	$	9,118
Impairment loss－machinery		135,231		4,194
Impairment loss－office equipment		709		-
Impairment loss－leasehold improvements		3,080		-
Impairment loss－others		689		-
Impairment loss－goodwill		3,142,334		-
	$	3,475,708	$	13,312

1. Goodwill is allocated to the Company's cash-generating units identified by operating segments, and the recoverable amount is assessed based on value in use, which is calculated based on pre-tax cash flow forecasts based on financial budgets approved by management.

2. The Company's recoverable amount calculated based on value in use exceeds the book amount, so goodwill is impaired. The main assumptions used to calculate value in use are as follows:

3. (1) Revenue growth rate:Estimated with reference to relevant market information and planned operating sales plan.

4. (2) Gross margin:Estimated based on historical values and taking into account planned operating sales plan.

5. (3) Discount rate:It is a pre-tax ratio and reflects the specific risks of the relevant operating departments. It was 8.97% and 10.64% in 2023 and 2022, respectively.

6. (12) Non-current assets held for sale and discontinued operations

Property, plant and equipment	December31,2023 94,800 $	December31,2022
		- $

The Group plans to sell the Shandong factory and land use rights in 2024, so the amounts of property, plant and equipment were recognized as non-current assets held for sale. The Group experts to sign a contract of the sale and purchases in February,2024.

(13) Short-term borrowings

Short-term borrowings
Bank borrowings Unsecurred borrowings Secured borrowings Liabilities on discounted notes receivable Interest rate range-NTD Interest rate range-foreign currency Interest rate range - discounted notes	December31,2023 565,319 $ - $ 181,817 $ 0% 3.6%~6.13% 3.4%	December31,2022
		1,203,495 $
		- $
		- $
		1.86%
		1.80%~6.08%
		NA

As of December 31, 2023 and 2022, Epistar Corporation has endorsements to Ennostar Inc., Episky

237

Corporation (Xiamen) Ltd., Jiangsu Canyang Optoelectronics Ltd. and Unikorn Semiconductor Corporation totalling $3,250,000 and $3,918,520, respectively.

(14) Financial liabilities at fair value through profit or loss

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Current items:

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The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting, please refer to Note 6(2) for details.

(15) Short-term notes and bills payable

December 31, 2023 Rate (%) Amount Name of bank Collaterals Payables for bankers’ - $ 1,295,140 AGRICULTURAL BANK OF CHINA Note 8 acceptance BANK OF JIANGSU BANK OF COMMUNICATIONS

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

December 31, 2022
Rate (%) Amount Name of bank Collaterals
Payables for bankers’ - $ 775,294 BANK OF COMMUNICATIONS Note 8
----- End of picture text -----

(16)	Other payables acceptance Items Payables on wages, salaries and bonus Payables on insurance expense Payables on personnel expense Compensation due to employees, directors and supervisors Payables on machinery and equipment Payables on processing fees Payables on consumable goods and equipment repair expense Payables on gas expense Payables on intangible assets Payables on reticle expense Others	BANK OF CHINA December31,2023 1,238,554 $ 2,231 251,108 88,537 683,775 386,885 354,704 71,682 51,527 23,614 658,306 3,810,923 $	December31,2022 1,137,583 $ 3,537 275,106 210,682 948,327 612,444 440,272 63,484 51,133 17,952 859,234 4,619,754 $

238

- (17) Long term borrowings

Long-term borrowings
	Borrowing period and
Type of borrowings	repayment term		December31,2023
Bank borrowings
Unsecured borrowings	Before September 15, 2025	$	533,126
Unsecured borrowings	Before May 15, 2026		200,261
Unsecured borrowings	Before September 15, 2025		610,225
Unsecured borrowings	Before November 15, 2025		501,216
Unsecured borrowings	Before September 15, 2025		350,000
Unsecured borrowings	Before September 15, 2025		467,996
Unsecured borrowings	Before February 15, 2026		543,286
Unsecured borrowings	Before April 15, 2027		150,000
Secured borrowings	Before June 30, 2029		200,000
Secured borrowings	Before June 12, 2028		67,500
Secured borrowings	Before March 15, 2028		100,000
			3,723,610
Less: Current portion of	long-term borrowings	(	1,789,423)
		$	1,934,187
Interest rate range			0.8%~1.78%
	Borrowing period and
Type of borrowings	repayment term		December31,2022
Bank borrowings
Unsecured borrowings	Before September 15, 2025	$	658,440
Unsecured borrowings	Before May 15, 2026		135,900
Unsecured borrowings	Before September 15, 2025		592,800
Unsecured borrowings	Before November 15, 2025		544,800
Unsecured borrowings	Before September 15, 2025		400,000
Unsecured borrowings	Before September 15, 2025		507,500
Unsecured borrowings	Before November 5, 2024		173,334
Unsecured borrowings	Before February 15, 2026		455,242
Unsecured borrowings	Before September 15, 2025		200,000
Unsecured borrowings	Before April 15, 2027		150,000
Unsecured borrowings	Before February 15, 2026		50,000
Secured borrowings	Before June 15, 2026		150,000
Secured borrowings	Before March 15, 2028		100,000
			4,118,016
Less: Current portion of	long-term borrowings	(	426,518)
		$	3,691,498
Interest rate range			0.68%~1.91%

Interest rate range

Pursuant to the bank loan agreements with KGI Bank and Mega Bank, the Company and its subsidiaries should meet certain financial covenants which are calculated based on each of their annual audited consolidated financial statements or semi-annual reviewed consolidated financial statements. The Company and its subsidiaries agreed to maintain the current ratio, debt ratio, debt

239

service coverage ratio and net tangible assets as defined in financial covenants.

(18) Pensions

• A. (a) The Company and its domestic subsidiaries have defined benefit pension plans in accordance with the Labor Standards Law, covering all regular employees for services provided prior to July 1, 2005, and employees who choose to remain in the defined benefit pension plan subsequent to the enforcement of the Labor Pension Act on July 1, 2005. Under the defined benefit pension plan, employees are entitled to two base points for every year of service for the first 15 years and one base point for each additional year thereafter, up to a maximum of 45 base points. The pension payment to employees is computed based on years of service and average salaries or wages of the last nine months prior to approved retirement. The Company contributes an amount equal to 2% of salaries and wages paid each month to a pension fund. The pension fund is administered by a pension fund monitoring committee and deposited under the Committee’s name in the Bank of Taiwan.

  • Also, the Company would assess the balance in the aforementioned labor pension reserve account by the end of December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method, to the employees expected to be qualified for retirement next year, the Company will make contributions to cover the deficit by next March.

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

	December 31, 2023	December	31,2022
Present value of defined benefit obligations	372,280) ($	($	380,754)
Fair value of plan assets	412,521		401,674
Net defined benefit liability	40,241 $	$	20,920

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(c) Movements in net defined benefit liabilities are as follows:

Movements in net defined benefit liabilities are as follows:
Present value of defined benefit obligations At January 1 380,754) ($ Current service cost 997) ( Interest (expense) income 5,295) ( Past service cost 2,033 Benefits payments - Settlements payments - 385,013) ( Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in demographic assumptions 73) ( Change in financial assumptions 2,237) ( Experience adjustments 6,903 Liquidation gain 8,140 12,733 Pension fund contribution - Paid pension - Settlement returns to the company - At December 31 372,280) ($	Fair value of plan assets 2023	Net defined benefitliability
	401,674 $ - 5,637 - 2,033) ( 6,143) ( 399,135 2,866 - - - 469) ( 2,397 10,989 - - 412,521 $	20,920 $ 997) ( 342 2,033 2,033) ( 6,143) ( 14,122 2,866 73) ( 2,237) ( 6,903 7,671 15,130 10,989 - - 40,241 $

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Present value of defined benefit obligations At January 1 410,316) ($ Current service cost 841) ( Interest (expense) income 2,991) ( Benefits payments 117 414,031) ( Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in demographic assumptions 151) ( Change in financial assumptions 12,388) ( Experience adjustments 27,112 Liquidation gain 16,527 31,100 Pension fund contribution - Paid pension 2,177 Settlement returns to the company - At December 31 380,754) ($	Fair value of plan assets 2022	Net defined benefit liability
	362,088 $ - 2,745 117) ( 364,716 27,692 - - - 9,349) ( 18,343 19,178 - 563) ( 401,674 $	48,228) ($ 841) ( 246) ( - 49,315) ( 27,692 151) ( 12,388) ( 27,112 7,178 49,443 19,178 2,177 563) ( 20,920 $

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2023 and 2022 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

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(e) The principal actuarial assumptions used were as follows:

	Year ended	Year ended
	December31,2023	December31,2022
Discount rate	1.25%~1.35%	1.35%~1.40%
Future salary increases	2.00%~3.00%	2.00%~4.00%
The assumptions about future mortality experience in 2023 and 2022 are set based on
actuarial advice in sixth empirical	life tables of the life insurance	industry in Taiwan,
respectively.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

==> picture [448 x 125] intentionally omitted <==

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plans of the Company for the year ending December 31, 2024 amount to $10,193.

• (g) As of December 31, 2023, the weighted average duration of the retirement plan is 11 years.

• B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The Group’s mainland China subsidiaries have funded defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage stipulated by the government. Other than the monthly contributions, the Group does not have further obligations.

• (c) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2023 and 2022 were $408,173 and $367,051, respectively.

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(19) Share-based payment

A. Restricted stocks to employees.

• (a) For the year ended December 31, 2023, the Group’s restricted stocks to employees arrangement was as follows:

Quantity granted Contract Vesting Type of arrangement Grant date (thousand shares) period condition Restricted stocks to employees 2019.3.20 8,500 3 years Note 2 (Note 1) (Note 3)

• Note 1: The remaining shares of Lextar in the original plan were converted to the shares of the Company in accordance with the exchange rate on the reference date of the merger.

• Note 2: The employees could vest 30%, 30% and 40% of the restricted stock, respectively, if they continue to provide service to Lextar for the first year, second year and third year. However, the actual granted units should consider the situation of Lextar’s operating results and employees’ performance.

Note 3: All were vested or eliminated in March 2022.

• (b) Details of the share-based payment arrangements are as follows (expressed in thousand of shares):

shares):
		2022
Outstanding at January 1		3,400
Vested in the period	(	1,700)
Expired	(	1,700)
Outstanding at December 31		-
Exercisable at December 31 (Note)		-

Note: Transferred into 935 thousand shares of the Company using the exchange ratio of 0.275. (c) The fair value of stock options relevant information is as follows (expressed in NTD):

Type ofarrangement Grant date Restricted stocks to employees 2019.3.20	Stockprice Exercise price $ 18 - $	Fair value per unit
		18 $

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B. Employee stock options:

• (a) For the year ended December 31, 2023, the share-based payment arrangements are as follows:

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

Quantity granted
Type of arrangement Grant date (thousand shares) Vesting conditions
----- End of picture text -----

Type ofarrangement	Grant date	Quantity granted (thousand shares)	Vesting conditions
Employee stock option-	2010.08.01	1,500	Note 1
United LED Corporation
(Hong Kong) Limited
Employee stock option-	2022.05.06	9,518	Note 2
Unikorn Semiconductor
Corporation
Employee stock option-	2023.04.27	1,482	Note 2
Unikorn Semiconductor
Corporation
Employee stock option-	2022.08.10	3,000	Note 3
Hexawave, Inc.
Employee stock option-	2023.04.25	500	Note 3
Hexawave, Inc.

• Note 1: 30% upon completion of 1 year’s service; 60% upon completion of 2 years’ service; 100% upon completion of 3 years’ service.

• Note 2: For 1 and 2 years from the date of issuance of stock options, the employees could exercise the stock options of 50% and 50% of the shares, respectively, which was based on the employees’ individual performance indicators.

• Note 3: Employees were able to exercise 30%, 30% and 40% of their stock options after 1 year, 2 years and 3 years from the grant date, respectively.

• (b) Details of the share-based payment arrangements are as follows:

Options outstanding from beginning to the end of the period - United LED Corporation (Hong Kong) Limited Options exercisable at end of the period - United LED Corporation (Hong Kong) Limited	No.of shares Weighted-average exercise price (in thousands) (inUSdollars) 1,049 0.0001 $ 1,049 0.0001 2023	No.of shares Weighted-average exercise price (in thousands) (inUSdollars) 1,049 0.0001 $ 1,049 0.0001 2022
	No.of shares (in thousands) 1,049 1,049	No.of shares (in thousands) 1,049 1,049

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(20)

C. Expenses incurred on share-based payment transactions are shown below: Long-term deferred revenue (shown under“Other non-current liabilities”) No.of shares Weighted-average exercise price No.of shares Weighted-average exercise price (in thousands) (in NTD) (in thousands) (in NTD) Options outstanding from beginning of the period - Unikorn Semiconductor Corporation 9,136 5 $ - Options granted - Unikorn Semiconductor Corporation 1,482 5 9,518 5 $ Options exercised - Unikorn Semiconductor Corporation 4,085) ( 5 - Options forfeited - Unikorn Semiconductor Corporation 845) ( 5 382) ( 5 Options outstanding at end of the period - Unikorn Semiconductor Corporation 5,688 5 9,136 5 Options exercisable at end of the period - Unikorn Semiconductor Corporation 358 5 - 2023 2022 No.of shares Weighted-average exercise price No.of shares Weighted-average exercise price (in thousands) (in NTD) (in thousands) (in NTD ) Options outstanding from beginning of the period - Hexawave, Inc. 3,000 10 $ - Options granted - Hexawave, Inc. 500 10 3,000 10 $ Options exercised - Hexawave, Inc. 366) ( 10 - Options outstanding at end of the period - Hexawave, Inc. 3,134 10 3,000 10 Options exercisable at end of the period - Hexawave, Inc. 534 10 - 2023 2022 Year ended Year ended December31,2023 December31,2022 Equity-settled 3,003 $ 24,091) ($ December31,2023 December31,2022 Deferred government grants revenue 162,246 $ 167,229 $ Deferred technical services revenue 6,576 7,926 168,822 $ 175,155 $

Deferred government grants revenue Deferred technical services revenue

The Company and subsidiaries obtained government grants for acquisitions of equipment, technology investments and research projects and recognized such grants as revenue over the

246

economic lives of those assets. Government grants revenue recognized for the years ended December 31, 2023 and 2022 were $90,690 and $151,147 (shown under “Other income and expenses-net” and “Other revenue”), respectively.

• (21) Share capital

• A. As of December 31, 2023, the Company’s authorized capital was $15,000,000, consisting of 1,500,000 thousand shares of ordinary stock (including 50,000 thousand shares reserved for employee stock options), and the paid-in capital was $7,547,840 with a par value of $10 (in dollars) per share.

Movements of the Company’s outstanding ordinary shares are as follows (expressed in thousands of shares):

At January 1 Issuance of ordinary shares - private placement Expiration of restricted employee stock At December 31	2023 2022 751,658 682,125 - 70,000 - 467) ( 751,658 751,658

• B. The stockholders at their annual stockholders’ meeting on May 31, 2022 adopted a resolution to raise additional cash through private placement with the effective date set on July 8, 2022, which will be used for capital expenditure of constructing/building a 6-inch wafer plant for Micro LEDs and purchasing the equipment related to epitaxy and LED chips, etc. The resolution led to the issuance of 70,000 thousand shares of ordinary shares at a price of NT$51.82 per share for a total amount of $3,627,400 through private placement and had been registered. Pursuant to the Securities and Exchange Act of the ROC, the common shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have applied for retroactive handling of public issuance procedures. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued common shares.

• C. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

(Unit: share in thousands/ dollars in thousands) 2023

Reason for reacquisition Held by subsidiaries Redemption of shares held by objecting shareholders Reason for reacquisition Held by subsidiaries Redemption of shares held by objecting shareholders	AtJanuary1 1,282 1,844	Increase - -	Decrease At December31 - 1,282 ( 1,844) - 2022	Bookvalue
				135,163 $ -
	AtJanuary1 1,282 1,844	Increase - -	Decrease At December31 - 1,282 - 1,844	Bookvalue
				135,163 $ 159,647

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

247

• (d) Pursuant to the rules governing share repurchase by the Group, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

• D. Information of the Company’s shares held by subsidiaries is as follows:

	December31,2023	December31,2023	December 31, 2022
Lighting Investment Corporation	1,282thousand shares		1,282 thousand shares
Book value	$	135,163	135,163 $
Fair value	$	59,374	57,386 $
Epistar Corporation		-	1,844thousand shares
Book value	$	-	159,647 $
Fair value	$	-	82,497 $

(22) Capital surplus

Pursuant to the Company Act, capital surplus, including additional paid-in capital in excess of par and donation, shall be exclusively used to cover accumulated deficit or to issue new stock or cash to shareholders in proportion to their ownership when the Company has no accumulated deficit. However, pursuant to the R.O.C. Securities and Exchange Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stock and donations can be capitalized once a year, provided that the Company has no accumulated deficit and the amount to be capitalized does not exceed 10% of the paid-in capital.

							Changes in ownership	Changes in ownership	Change in net equity of	Change in net equity of
							interests in subsidiaries		associates and joint
						Treasury share	accounted for using		ventures accounted for
		Sharepremium				transactions		equitymethod	usingequitymethod
At January 1, 2023		$	45,877,291		$	114,876	$	275,200	$	154,297
Decrease in treasury shares	(		112,052)	(		29,160)		-		-
Change in equity of
associates and joint ventures
accounted for using equity
method			-			-		-		59,445
Difference between
consideration and carrying
amount of subsidiaries
acquired and disposed			-			-		19,564		-
Changes in ownership
interests in subsidiaries
accounted for using
equity method			-			1,037		86,511		-
Employee stock ownership
trust cancellation return			-			51		-		-
At December 31, 2023		$	45,765,239		$	86,804	$	381,275	$	213,742

248

At January 1, 2022 Issuance of new shares -private placement Change in equity of associates and joint ventures accounted for using equity method Difference between consideration and carrying amount of subsidiaries acquired and disposed Changes in ownership interests in subsidiaries accounted for using equity method Expiration of restricted employee stock At December 31, 2022	Treasury share Changes in ownership interests in subsidiaries accounted for using Sharepremium transactions equitymethod 42,894,615 $ 115,823 $ 770,537 $ 2,927,400 - - - - - 7,754 - 195,791) ( 42,848 947) ( 299,546) ( 4,674 - - 45,877,291 $ 114,876 $ 275,200 $	Change in net equity of associates and joint ventures accounted for usingequitymethod
		49,663 $ - 104,634 - - -
		154,297 $

(23) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, 10% of current year’s earnings, after paying all taxes and dues and covering prior years’ losses, shall be appropriated as legal reserve until the total equals the issued share capital. Special reserve shall be appropriated or reversed when needed. The remaining earnings along with the prior years’ accumulated unappropriated earnings are considered as distributable earnings, and shall be distributed by the Board of Directors. When issuing new shares, the distribution shall be submitted through a resolution at the shareholders’ meeting. If the distribution is in cash, it shall be resolved by the Board of Directors. The distribution shall be based on the proportion of shares held by each shareholder.

• B. The Company appropriates earnings based on the factors such as current and future investment environment, capital needs, domestic and overseas competition and capital budget, along with the consideration of shareholders’ interest and capital adequacy. The appropriation of cash dividends shall not be lower than 10% of the total dividend appropriated to shareholders.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. 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 special reserve is reversed accordingly and could be included in the distributable earnings.

• E. The appropriations of 2023 loss and dividends had been proposed by the Board of Directors on February 23, 2024.It was decided to offset the loss with capital surplus and distribute cash dividends of 677,646 (0.9 dollar per share).

249

• F. The appropriations of 2022 earnings had been approved in the shareholders’ meeting on May 31, 2023, and decided not to distribute cash dividends.

• G. The appropriations of 2021 earnings approved in the shareholders’ meeting on May 31, 2022 are as follows:

as follows:
		2021
			Dividends per share
		Amount		(in dollars)
Legal reserve appropriated	$	216,945
Special reserve appropriated	$	290,598
Cash dividends distributed	$	1,365,881	$	2

The abovemetioned distribution of earnings for the year of 2021 was in agreement with those amounts proposed by the Board of Directions on Febraury 24,2022.

(24) Other equity items

(25)

Operating revenue Currencytranslation Unrealizedgain or loss Total At January 1 36,083 $ 38,927 $ 75,010 $ Revaluation - gross - 25,484 25,484 Revaluation - tax - 41,149) ( 41,149) ( Disposal of investments in equity instruments designated at fair value through other comprehensive income - 161,188 161,188 Currency translation –Group 251,091) ( - 251,091) ( –Tax on Group 6,262 - 6,262 At December 31 208,746) ($ 184,450 $ 24,296) ($ 2023 Currencytranslation Unrealizedgain or loss Total At January 1 406,535) ($ 170,992 $ 235,543) ($ Revaluation - gross - 256,584) ( 256,584) ( Revaluation - tax - 36,134) ( 36,134) ( Difference on carrying amounts of subsidiaries acquired and disposed 3 - 3 Disposal of investments in equity instruments designated at fair value through other comprehensive income - 160,653 160,653 Currency translation –Group 443,043 - 443,043 –Tax on Group 428) ( - 428) ( At December 31 36,083 $ 38,927 $ 75,010 $ 2022 Year ended Year ended December31,2023 December31,2022 Revenue from contracts with customers: Sales revenue 22,066,035 $ 28,660,443 $ Services revenue 109,643 95,467 Other operating revenue 130,002 122,340 22,305,680 $ 28,878,250 $

250

Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services at a point in time in the following major product lines and geographical regions:

Other income and expenses–net Interest income Other income Year ended December31,2023 Epi/Chip Sales revenue 14,556,865 $ Services revenue - Other operating revenue - Year ended December 31, 2022 Epi/Chip Sales revenue 20,965,987 $ Services revenue - Other operating revenue - Other income Royalty income Government grants revenue Total Interest income from bank deposits Other interest income Rental income Dividend income Government grant revenues Other income-other	Packages/ Modules Other Total 6,674,594 $ 834,576 $ 22,066,035 $ - 109,643 109,643 - 130,002 130,002 22,305,680 $ Packages/ Modules Other Total 6,977,759 $ 716,697 $ 28,660,443 $ - 95,467 95,467 - 122,340 122,340 28,878,250 $ Year ended Year ended December31,2023 December 31, 2022 7,330) ($ 13,977 $ 37,636 72,723 30,306 $ 86,700 $ Year ended Year ended December31,2023 December31,2022 233,729 $ 97,173 $ 5,850 7,427 239,579 $ 104,600 $ Year ended Year ended December31,2023 December31,2022 206,339 $ 212,932 $ 43,497 44,296 53,054 78,424 224,270 179,857 527,160 $ 515,509 $	Packages/ Modules Other Total 6,674,594 $ 834,576 $ 22,066,035 $ - 109,643 109,643 - 130,002 130,002 22,305,680 $ Packages/ Modules Other Total 6,977,759 $ 716,697 $ 28,660,443 $ - 95,467 95,467 - 122,340 122,340 28,878,250 $ Year ended Year ended December31,2023 December 31, 2022 7,330) ($ 13,977 $ 37,636 72,723 30,306 $ 86,700 $ Year ended Year ended December31,2023 December31,2022 233,729 $ 97,173 $ 5,850 7,427 239,579 $ 104,600 $ Year ended Year ended December31,2023 December31,2022 206,339 $ 212,932 $ 43,497 44,296 53,054 78,424 224,270 179,857 527,160 $ 515,509 $	Total 22,066,035 $ 109,643 130,002
			22,305,680 $
			Total
			28,660,443 $ 95,467 122,340
			28,878,250 $
		13,977 $ 72,723
		86,700 $
		Year ended December31,2022
		97,173 $ 7,427
		104,600 $
		Year ended December31,2022
		212,932 $ 44,296 78,424 179,857
		515,509 $

(26) Other income and expenses– net

(27) Interest income

(28) Other income

251

(29) Other gains and losses

Other gains and losses
			Year ended			Year ended
		December31,2023			December31,2022
Gain on disposal of property, plant and		$	164,017		$	42,014
equipment
Gain (loss) on disposal of intangible assets			74,594	(		2,932)
Gain on disposal of investments			31,717			72,090
Profit from lease modification			915			-
Net currency exchange (loss) gain	(		46,301)			526,415
Net income (loss) on financial assets at fair value
through profit or loss			16,196	(		285,929)
Impairment loss on property, plant and equipment	(		333,374)	(		13,312)
Impairment loss on intangible assets	(		3,142,334)			-
Impairment loss on financial assets	(		2,500)			-
Miscellaneous losses	(		167,224)	(		121,331)
	($		3,404,294)		$	217,015

(30) Finance costs

Finance costs
Expenses by nature Interest expense Other interest expense Employee benefit expenses Depreciation (Note) Amortisation charges on intangible assets	Year ended December31,2023 116,700 $ 75,244 191,944 $ Year ended December31,2023 7,764,975 $ 4,594,692 $ 245,742 $	Year ended December31,2022
		67,037 $ 64,565
		131,602 $
		Year ended December31,2022
		7,808,368 $
		4,952,508 $
		257,757 $

(31) Expenses by nature

Note: Depreciation amounting to $57,403 and $102,232 were recognized as miscellaneous expenses for the years ended December 31, 2023 and 2022, respectively.

(32) Employee benefit expenses

for the years ended December 31, 2023 and 2022, Employee benefit expenses	respectively.
Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses	Year ended December31,2023 6,464,440 $ 489,357 407,979 403,199 7,764,975 $	Year ended December31,2022
		6,540,144 $ 489,163 376,519 402,542
		7,808,368 $

A. According to the Articles of Incorporation of the Company, the Company shall distribute employees’ compensation and directors’ remuneration based on 0.1%~15% and no higher than 2% of the distributable profit of the current year, respectively. If the Company has accumulated deficit, earnings should be reserved to cover losses.

252

• B. For the year ended December 31, 2023, the employees’ compensation and directors’ remuneration was not estimated, because the Company incurred a loss during this period. For the year ended December 31, 2022, the employees’ compensation was accrued at $3,952 and the directors’ remuneration was accrued at $790, respectively.

• C. The company had been approved by the Board of Directors on February 23, 2023, not to distribute directors' remuneration for 2022. The difference of $790 between the director's remuneration account and the proposed distribution amount has been listed as profit and loss for 2023.

• D. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• (33) Income tax

• A. Income tax expense

  • (a) Components of income tax (benefit) expense :

the website of the Taiwan Stock Exchange. ome tax Income tax expense (a) Components of income tax (benefit) expense :
			Year ended			Year ended
		December31,2023			December 31, 2022
Current tax:
Current tax on profits for the year		$	44,446		$	248,706
Tax withheld at source from foreign income			1,382			-
Prior year income tax (overestimation)
underestimation	(		3,708)			17,514
Tax on undistributed surplus earnings			1,626			14,801
Total current tax			43,746			281,021
Deferred tax:
Origination and reversal of temporary
differences	(		106,013)			18,582
Origination and reversal of loss deductible
income tax			-	(		216,688)
Total deferred tax	(		106,013)	(		198,106)
Income tax (benefit) expense	($		62,267)		$	82,915
(b) The income tax relating to components of other	comprehensive loss (income) is as follows:
			Year ended			Year ended
		December31,2023			December31,2022
Change in fair value of financial assets		$	40,722		$	36,629
at fair value through other comprehensive
income
Currency translation differences	(		1,725)			168
Share of other comprehensive income of
associates	(		4,110)	(		235)
Remeasurement of defined benefit obligations			1,437			3,855
Total		$	36,324		$	40,417

253

B. Reconciliation between income tax expense and accounting profit

		Year ended			Year ended
	December31,2023			December31,2022
Tax calculated based on profit before tax	($	2,916,475)		$	74,208
and statutory tax rate
Tax withheld at source from foreign income		1,383			-
Expenses disallowed and tax exempt income by tax		2,039,220			59,227
regulation
Temporary differences not recognised as deferred		300,627	(		19,509)
tax assets
Change in assessment of realisation of deferred	(	99,988)			18,582
tax assets
Effect from taxable loss		615,048	(		81,908)
Prior year income tax (overestimation)	(	3,708)			17,514
underestimation
Tax on undistributed surplus earnings		1,626			14,801
Income tax expense	($	62,267)		$	82,915

254

• C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Deferred tax assets: －Temporary differences: Unrealized loss on inventory Unrealized exchange loss Unrealized sales returns and discounts Allowance overrun Unrealized loss of sales Investment loss under equity method Loss on valuation of financial assets Impairment loss for financial assets Deferred revenue Currency translation differences Unrealized pension Others Tax losses Subtotal Deferred tax liabilities: Property, plant and equipment Unrealized exchange gain Unrealized sales returns and discounts Unrealized gross profit of sales Investment gain under equity method Gain on valuation of financial assets Currency translation differences Others Subtotal Total				2023
		January1	Recognised in profit or loss	Recognised in other comprehensive income	Translation differences		December31
	148,660 $ 18,133 15,465 1,049 2,391 22,894 - 4,099 45,327 - 13,681 79,933 1,365,786 1,717,418 183,329) ( 1,919) ( 1,659) ( 8,343) ( 1,781) ( 175,766) ( 6,036) ( 42,439) ( 421,272) ( 1,296,146 $		7,294 $ 10,150 20,759 6 13 13,600 124) ( - 1,924) ( - 1,732) ( 43,709 2 91,753 14,495 1,951) ( 3,464) ( 2,218 1,184 352 - 1,428 14,262 106,015 $	- $ - - - - - 21,552 - - 142 1,437) ( - - 20,257 - - - - - 62,275) ( 6,036 - 56,239) ( 35,982) ($	325) ($ - - (19) - - - - 613) ( - - (363) (767) 2,087) ( - - - - - - - 308 308 1,779) ($	155,629 $ 28,283 36,224 1,036 2,404 36,494 21,428 4,099 42,790 142 10,512 123,279 1,365,021 1,827,341 168,834) ( 3,870) ( 5,123) ( 6,125) ( 597) ( 237,689) ( - 40,703) ( 462,941) ( 1,364,400 $

255

2022

			2022
Deferred tax assets: －Temporary differences: Unrealized loss on inventory Unrealized exchange loss Unrealized sales returns and discounts Investment loss under equity method Loss on valuation of financial assets Deferred revenue Unrealized pension Others Tax losses Subtotal Deferred tax liabilities: Property, plant and equipment Gain on valuation of financial assets Others Subtotal Total	January1	Recognised in profit or loss	Recognised in other comprehensive income		December31
	111,708 $ 204) ( 17,782 784 20,025 43,221 19,575 135,936 1,436,426 1,785,253 212,321) ( 159,054) ( 57,963) ( 429,338) ( 1,355,915 $	36,952 $ 18,337 2,317) ( 22,110 - 2,106 2,039) ( 48,381) ( 70,640) ( 43,872) ( 28,992 - 2,195) ( 26,797 17,075) ($	- $ - - - 20,025) ( - 3,855) ( 83) ( - 23,963) ( - 16,712) ( 2,019) ( 18,731) ( 42,694) ($	148,660 $ 18,133 15,465 22,894 - 45,327 13,681 87,472 1,365,786 1,717,418 183,329) ( 175,766) ( 62,177) ( 421,272) ( 1,296,146 $

256

• D. Details of the amount the Group is entitled as investment tax credit and unrecognised deferred tax assets are as follows:

Unutilized investment tax credit from the Subsidiary is as follows:

December 31, 2023

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Unrecognised
Unused tax deferred tax
Qualifying items credits assets Expiry year
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Qualifyingitems Unused tax credits December 31,2023	Qualifyingitems Unused tax credits December 31,2023	Unrecognised deferred tax assets	Expiry year
Investment tax credits for industrial innovation (research and development) 727,388 $ Investment tax credits for industrial innovation (research and development) 693,843 Investment tax credits for industrial innovation (intelligent machinery and 5G) 726,601 Investment tax credits for industrial innovation (intelligent machinery and 5G) 561,364 December 31,2022		727,388 $ 693,843 726,601 561,364	2023 2024 2023 2024
Qualifyingitems	Unused tax credits	Unrecognised deferred tax assets	Expiry year
Investment tax credits for industrial innovation (research and development) Investment tax credits for industrial innovation (research and development) Investment tax credits for industrial innovation (intelligent machinery and 5G) Investment tax credits for industrial innovation (intelligent machinery and 5G)	637,989 $ 607,539 1,000,000 727,411	637,989 $ 607,539 1,000,000 727,411	2022 2023 2022 2023

E. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

Unutilized tax loss from the Company is as follows ： None.

257

Unutilized tax loss from the Subsidiary is as follows: December 31, 2023

	December 31,2023
Year incurred	Amount filed/ assessed Unused amount Assessed 8,487 $ Assessed 1,878,146 Assessed 1,059,174 Assessed 3,560,309 Assessed 565,995 Assessed 558,245 Amount filed 406,796 Assessed 4,081,456 Amount filed 386,965 Assessed 4,986,666 Amount filed 53,146 Amount filed 1,227,120 Assessed 1,082,905 Amount filed 2,342,765 Assessed 42 Amount filed 101,579 Amount filed 866,954 December 31,2022	Unrecognised deferred taxassets	Expiry year
2013 2014 2015 2016 2017 2018 2019 2019 2020 2020 2021 2022 2021 2023 2022 2022 2023		8,487 $ 1,878,146 1,059,174 3,560,309 565,995 558,245 406,796 2,734,356 223,129 1,877,602 53,146 1,227,120 1,082,905 - 42 101,579 866,954	2023 2024 2025 2026 2027 2028 2024 2029 2025 2030 2026 2032 2031 2033 2032 2027 2033
Year incurred	Amount filed/ assessed Unused amount Assessed 79,718 $ Assessed 8,487 Assessed 2,035,867 Assessed 1,059,174 Assessed 3,560,309 Assessed 670,675 Assessed 558,507 Amount filed 699,349 Assessed 4,103,745 Amount filed 389,475 Amount filed 5,010 Assessed 4,986,357 Amount filed 74,491 Amount filed 1,117,083	Unrecognised deferred taxassets	Expiry year
2012 2013 2014 2015 2016 2017 2018 2019 2019 2020 2020 2020 2021 2021		79,718 $ 8,487 2,035,867 1,059,174 3,560,309 670,675 347,618 531,925 600,859 389,475 5,010 1,877,293 74,491 1,117,083	2022 2023 2024 2025 2026 2027 2028 2024 2029 2025 2030 2030 2026 2031

• F. As of December 31, 2023 and 2022, the amounts of deductible temporary difference that are not recognised as deferred tax assets were ($1,574,772) and $97,543, respectively.

G. The Company’s income tax returns through 2021 have been assessed and approved by the Tax Authority. Income tax returns of the Company’s significant subsidiaries, Epistar and Lextar through 2021 have been assessed and approved by the Tax Authority, respectively.

258

(34) (Loss) earnings per share

(35)

Supplemental cash flow information A. Investing activities with partial cash payments Weighted average number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) Basic loss and diluted loss per share Loss attributable to ordinary shareholders of the parent 6,782,678) ($ 751,658 9.02) ($ Weighted average number of outstanding ordinary shares Earnings per share Amount after tax (share in thousands) (in dollars) Basic earnings per share Profit attributable to ordinary shareholders of the parent 38,024 $ 715,603 0.05 $ Diluted earnings per share Profit attributable to ordinary shareholders of the parent 38,024 $ 715,603 Assumed conversion of all dilutive potential ordinary shares Employees' compensation - 496 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 38,024 $ 716,099 0.05 $ Year ended December31,2022 Year ended December 31,2023 Year ended Year ended December31,2023 December31,2022 Purchase of property, plant and equipment 2,193,240 $ 3,617,433 $ Add: Opening balance of payable on equipment 948,327 1,210,113 Less: Ending balance of payable on equipment 683,775) ( 948,327) ( Less: Net cash changes of prepayment for equipment 423,957) ( 441,011 Cash paid during the year 2,033,835 $ 4,320,230 $

259

									Year	Year	ended			Year	Year	Year	ended
								December31,2023						December31,2022
Purchase of intangible assets								$			133,270			$			217,720
Add: Opening balance	of	payables
(including non-current portion)											92,418						4,898
Less: Ending balance of payables
(including non-current portion)							(				51,527)		(				92,418)
Cash paid during the year								$			174,161			$			130,200
B. Investing activities with partial cash				received
									Year		ended			Year			ended
								December31,2023						December31,2022
Sale of property, plant	and equipment							$			182,759			$			387,627
Add: Opening balance	of	receivables									48						2,013
Less: Ending balance of receivables							(				32)		(				48)
Cash collected during the		year						$			182,775			$			389,592
C. Cash received from disposal of ownership interests in subsidiaries and associates
									Year		ended			Year			ended
								December31,2023						December31,2022
Disposal proceeds							$				955		$				177,532
Add: Opening balance of receivables											89,432						-
Less: Ending balance of receivables												-	(				89,432)
Net cash provided by disposal of subsidiaries and
associates							$				90,387		$				88,100
Changes in liabilities from financing activities
																	Liabilities
					Short-term							Guarantee				from financing
		Short-term	notes and bills				Long-term				Lease	deposits					activities
		borrowing			payable		borrowing				liabilities	received					gross
At January 1, 2023	1,203,495 $		$		775,294	$	4,118,016			$	1,585,187	$	51,217		$		7,733,209
Changes in cash flow from
financing activities	(	527,091)			296,208	(	394,406)			(	117,879)	(	24,676)		(		767,844)
Effect of interest		-			-				-		21,156			-			21,156
Changes in other non-cash items		84,227			240,400				-		17,008			-			341,635
Impact of changes in
foreign exchange rate	(	13,495)	(		16,762)				-	(	2,188)	(		138)	(		32,583)
At December 31, 2023	747,136 $		$		1,295,140	$	3,723,610			$	1,503,284	$	26,403		$		7,295,573
																	Liabilities
					Short-term							Guarantee				from financing
		Short-term	notes and bills				Long-term				Lease	deposits					activities
		borrowing			payable		borrowing				liabilities	received					gross
At January 1, 2022		3,479,177 $		$	877,011	$	4,139,165			$	1,557,129	$	157,282			$	10,209,764
Changes in cash flow from
financing activities	2,295,709) (		(		112,938)	(		21,149)		(	127,584)	(	108,264)		(		2,665,644)
Effect of interest		-			-				-		21,409			-			21,409
Changes in other non-cash items		-			-				-		136,645			-			136,645
Impact of changes in
foreign exchange rate		20,027			11,221				-	(	2,412)			2,199			31,035
At December 31, 2022		1,203,495 $		$	775,294	$	4,118,016			$	1,585,187	$	51,217			$	7,733,209

(36) Changes in liabilities from financing activities

260

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

LATED PARTY TRANSACTIONS Names of related parties and relationship
Names of relatedparties	Relationship with theGroup
LEDAZ Co., Ltd. LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. WellyWave Semiconductors Inc. Changzhou Chemsemi Co., Ltd. Joint Power Exponent, Ltd. iReach Corporation Chuzhou Bwin Technology Corp. Tyntek Corporation D-Tech Optoelectronics, Inc. Global Communication Semiconductors, LLC Seoul Semiconductor Co., Ltd. AUO (Kunshan) Co., Ltd. AUO Corporation AUO (Xiamen) Co., Ltd. AUO (Suzhou) Co., Ltd. AUO Digitech Taiwan Inc. Anhui Intematix Lighting Co., Ltd. Intermate Co., Ltd. (Suzhou) PlayNitride Inc. D-Tech Optoelectronics (Taiwan) Corp. Bridgelux Optoelectronics (Xiamen) Co., Ltd. FormoLight Technologies, Inc. Darwin Precisions Corporation Darwin Precision (Xiamen) Corporation AUO Display Plus Corporation Fortech Electronics (Suzhou) Co., Ltd. PlayNitride Display Co., Ltd.	Associates Associates Associates Associates Associates Associates Associates (Note 1) Associates Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties (Note 2) Other related parties Other related parties Other related parties Other related parties Other related parties Other related parties

Note1: Since April, 2023, the relationship with this company changed from a related party to a consolidated company through the Company gaining control over it.

Note2: Since December,2023,KAISTAR Lighting (Xiamen) Co., Ltd. has been renamed Bridgelux Optoelectronics (Xiamen) Co., Ltd.

(2) Significant related party transactions and balances

A. Operating revenue:

gnificant related party transactions and balances Operating revenue: Optoelectronics (Xiamen) Co., Ltd.
Other related parties Associates Total	Year ended December31,2023 788,938 $ 637,138 1,426,076 $	Year ended December31,2022
		757,811 $ 594,736
		1,352,547 $

261

All product sales prices and payment term have no significant difference between related parties and third parties.

B. Purchases:

and third parties. Purchases:
		Year ended		Year ended
	December31,2023		December31,2022
Other related parties	$	3,739	$	5,277
Associates		193,949		324,710
Total	$	197,688	$	329,987
All product purchases prices and payment term have no		significant difference		between related
parties and third parties.

C. Receivables from related parties (Notes receivable and accounts receivable):

Other related parties Associates Total	December31,2023 273,003 $ 195,604 468,607 $	December31,2022
		199,761 $ 236,493
		436,254 $

The receivables from related parties arise mainly from sale transactions. The receivables are unsecured in nature and bear no interest.

D. Other receivables from related parties:

D.	unsecured in nature and bear no interest. Other receivables from related parties:
		December31,2023		December	31,2022
	Other related parties	$	22,789	$	24,012
	Associates		3,610		111,406
	Total	$	26,399	$	135,418
	The other receivables from related parties arise mainly from rent and service.
E.	Payables from related parties:
		December 31, 2023		December	31,2022
	Other related parties	$	579	$	1,242
	Associates		162,330		265,236
	Total	$	162,909	$	266,478

The payables to related parties arise mainly from purchase transactions. The payables bear no interest.

F. Property transactions:

(a) Acquisition of property, plant and equipment:

Other related parties Associates		Acquisition proceeds Accrued payable 300,548 $ 2,120 $ - - 300,548 $ 2,120 $ Year ended December31,2023	Acquisition proceeds Accrued payable 300,548 $ 2,120 $ - - 300,548 $ 2,120 $ Year ended December31,2023	Acquisition proceeds Accrued payable 300,548 $ 2,120 $ - - 300,548 $ 2,120 $ Year ended December31,2023		Year ended December31,2022
		Acquisition proceeds				Acquisition proceeds Accrued payable 308,956 $ 4,821 $ 3,602 - 312,558 $ 4,821 $
		300,548 $ - 300,548 $		2,120 $ - 2,120 $

262

(b) Disposal of property, plant and equipment:

	Year ended	Year ended			Year ended	Year ended
	December 31, 2023			December31,2022
	Acquisition	Gain (loss) on		Acquisition		Gain (loss) on
	proceeds	disposal		proceeds		disposal
Associates	2,089 $	690 $	$	4,026		676 $
Key management compensation
		Year	ended			Year ended
		December		31,2023	December31,2022
Salaries and other short-term	employee benefits	$		165,031	$	229,936
Post-employment benefits				22,437		883
Termination benefits				-		1,611
Share-based payment				-	(	13,768)
Total		$		187,468	$	218,662

(3) Key management compensation

8. PLEDGED ASSETS

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

9.

SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS Pledgred assets December31,2023 December31,2022 Purpose Bank deposits (shown in "Current financial assets at amortised cost and non-current financial assets at amortised cost") 624,542 $ 478,405 $ Payables for bankers’ acceptance Time deposits (Shown in "Current financial assets at amortised cost, non-current financial assets at amortised cost and other non-current assets") 435,686 331,816 Lease deposit, performance bond, security for provisional attachment, customer deposit, long-term borrowings, payables for bankers' acceptances Notes receivable 526,390 270,620 Payables for bankers’ Land, building and structures 546,693 549,585 Long-term borrowings Machinery and office equipment 116,739 286,775 Long-term borrowings and short-term borrowings 2,250,050 $ 1,917,201 $ Bookvalue

Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

Property, plant and equipment	December31,2023 539,403 $	December31,2022
		1,305,258 $

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

In order to revitalize assets and improve the efficiency of the group's asset use, after integrating the group's factory space in Taiwan, the group plans to replace the Zhunan Keyan Road factory building planning with the existing Epistar Corporation’s factory area. Therefore, on January 19, 2024, the board of directors decided to sell it based on the negotiation results between the buyer and the seller. The plant

263

on Keyan Road in Zhunan was sold to Polaris Biopharmaceuticals, Inc.

12. OTHERS

(1) Capital risk management

The Group’s capital management policy is established taking into account the industry characteristics, the Group’s future development and changes in external environments. The Group plans the working capital, capital expenditures, investments and dividends required for the future based on the capital management policy, makes financial analysis, and examines its capital structure periodically and makes appropriate adjustments to ensure that every company within the Group may grow and operate indefinitely.

(2) Financial instruments

A. Financial instruments by category

ow and operate indefinitely. nancial instruments Financial instruments by category
Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Notes receivable - due from related parties Accounts receivable Accounts receivable - due from related parties Other receivables Other receivables - due from related parties Guarantee deposits paid	December31,2023 202,446 $ 4,198,539 15,563,488 1,156,399 758,666 - 7,672,028 468,607 145,536 26,399 53,731 30,245,839 $	December31,2022
		254,073 $ 4,445,317 16,127,132 827,545 1,872,810 10,285 7,544,597 425,969 127,695 135,418 79,650
		31,850,491 $

264

December 31, 2023 December 31, 2022

Financial liabilities

Financial liabilities	December31,2023	December31,2022
Financial liabilities at fair value through profit and loss Financial liabilities held for trading Financial liabilities at amortisedcost Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable Accounts payable to related parties Other payables Long-term borrowings (including current portion) Long-term accounts payable Guarantee deposits received Lease liabilities (including current portion)	2,284 $ 747,136 1,295,140 1,805 2,692,899 162,909 3,810,923 3,723,610 - 26,403 12,463,109 $ 1,503,284 $	2,214 $ 1,203,495 775,294 243,332 2,195,394 266,478 4,619,754 4,118,016 41,285 51,217
		13,516,479 $
		1,585,187 $

• B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. The purpose of risk management is to minimise potential adverse effects arising from uncertainty on the Group’s financial performance. The Group hedges foreign exchange rate by undertaking forward exchange contracts and exchange rate options; it also undertakes interest rate exchange contracts to convert future variable cash flows into fixed ones. The derivatives undertaken by the Group are used exclusively for hedging purposes and not as trading or speculative instruments.

• (b) Risk management is carried out by treasury and finance departments of the Group under policies approved by the Board of Directors. Treasury and finance departments of the Group identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD, RMB and JPY. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii. Management has set up a policy to require the Group to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury.

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iii. The Group’s businesses involve some non-functional currency operations (the functional currency of the Company and certain subsidiaries is NTD while that of other subsidiaries are USD and RMB). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

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 RMB:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD RMB:NTD		December31,2023
	Foreign currency amount (inthousands) 222,823 $ 264,844 140,991 65,689 146,380	Book value Exchangerate (inthousands ofNTD) 30.7050 6,841,780 $ 4.3270 1,145,980 30.7050 4,329,129 30.7050 2,016,981 4.3270 633,386 December31,2022	Book value (inthousands ofNTD)
	Foreign currency amount (inthousands) 226,968 $ 380,410 105,940 97,279 184,438	Exchangerate 30.7100 4.4080 30.7100 30.7100 4.4080	Book value (inthousands ofNTD)
			6,970,187 $ 1,676,847 3,253,417 2,987,438 813,003

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iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Group. Year ended December 31, 2023

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

Unrealized exchange gain (loss)
Foreign currency
amount Book value
(in thousands) Exchange rate (in thousands of NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD $ - 30.7050 ($ 142,730)
RMB:NTD - 4.3270 ( 11,969)
Financial liabilities
Monetary items
USD:NTD - 30.7050 40,245
RMB:NTD - 4.3270 9,647
Year ended December 31, 2022
Unrealized exchange gain (loss)
Foreign currency
amount Book value
(in thousands) Exchange rate (in thousands of NTD)
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD $ - 30.7100 ($ 56,987)
RMB:NTD - 4.4080 ( 646)
Financial liabilities
Monetary items
USD:NTD - 30.7100 ( 18,557)
RMB:NTD - 4.4080 ( 904)
JPY:NTD - 0.2324 3,074
----- End of picture text -----

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• v. Analysis of foreign currency market risk arising from significant foreign exchange variation:

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

Year ended December 31, 2023
Sensitivity analysis
Effect on profit Effect on other
Degree of variation or loss comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD 1% $ 68,418 $ -
RMB:NTD 1% 11,460 -
Non-monetary items
USD:NTD 1% - 43,291
Financial liabilities
Monetary items
USD:NTD 1% ( 20,170) -
RMB:NTD 1% ( 6,334) -
Year ended December 31, 2022
Sensitivity analysis
Effect on profit Effect on other
Degree of variation or loss comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD 1% $ 69,702 $ -
RMB:NTD 1% 16,768 -
Non-monetary items
USD:NTD 1% - 32,534
Financial liabilities
Monetary items
USD:NTD 1% ( 29,874) -
RMB:NTD 1% ( 8,130) -
Price risk
----- End of picture text -----

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 10% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $20,016 and

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$25,186, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $419,854 and $444,532, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and interest rate risk

• i. The Group’s interest rate risk arises from bank deposits and long-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash and cash equivalents held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. The Group’s borrowings at variable rate were denominated in the USD, RMB and NTD.

• ii. Based on the simulations performed on sensitivity analysis for interest rate risk, the maximum impact on post-tax profit of a 0.1% shift would be increased/decreased of $11,093 and $10,806 for the years ended December 31, 2023 and 2022, respectively. The simulation is done on a quarterly basis to ensure that the potential maximum loss is within the limit set by the management.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost.

• ii. The Group adopts the assumptions that the default occurs when the contract payments are overdue for 90 days.

• iii. The Group adopts the following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition: If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• iv.The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

• (ii) The disappearance of an active market for that financial asset because of financial difficulties;

• (iii) Default or delinquency in interest or principal repayments;

• (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• v. The Group classifies customers’ accounts receivable in accordance with credit rating of customer. The Group applies the simplified approach using provision matrix, loss rate methodology to estimate expected credit loss under the provision matrix basis.

• vi.The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. As of December 31, 2023 and 2022, the Group’s written-off financial assets that are still under recourse procedures all amounted to $949,859 and $18,623, respectively.

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vii. The Group used the forecastability to adjust historical and timely information to assess the default possibility of accounts receivable and other receivables. As of December 31, 2023 and 2022, the provision matrix, loss rate methodology is as follows:

			Up to 30 days	Up to 30 days	31~90 days	31~90 days	91~180 days	91~180 days	Over 180 days
	Notpast due			past due		past due		past due	past due		Total
December 31, 2023
Expected loss rate		0~5%		0~5%		0~56%		0~100%	0~100%
Total book value	$	8,676,416	$	350,446	$	28,390	$	13,568	89,653 $	$	9,158,473
Loss allowance	$	55	$	189	$	830	$	2,338	83,825 $	$	87,237
			Up to 30 days		31~90 days		91~180 days		Over 180 days
	Not past due			past due		past due		past due	past due		Total
December 31, 2022
Expected loss rate		0%~5%		0%~6%		0%~60%		0%~100%	0%~100%
Total book value	$	9,653,353	$	281,782	$	71,497	$	36,458	1,120,368 $	$	11,163,458
Loss allowance	$	280	$	254	$	2,909	$	6,131	1,037,110 $	$	1,046,684
				Individualprovision				Group provision		Total
December 31, 2023
Expected loss rate					100%			0%~100%
Total book value				$		68,089	$	9,090,384 $			9,158,473
Loss allowance				$		67,978	$		19,259 $		87,237
December 31, 2022
Expected loss rate					100%			0%~100%
Total book value				$		991,358	$	10,172,100 $		11,163,458
Loss allowance				$		991,294	$		55,390 $		1,046,684
vii. Movements in	relation to the			Group applying the simplified approach to provide loss
allowance for accounts receivable, and other receivables are as follows:

			2023	2023
		Accounts receivable
			(including notes
			receivable)		Other receivables
At January 1		$	936,561	$	110,123
Acquired from business combination			12		-
(Reversal of) provision for impairment	(		25,099)		6,308
Write-offs	(		899,067)	(	41,349)
Effect of exchange rate changes	(		252)		-
At December 31		$	12,155	$	75,082

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2022

Accounts receivable

(including notes

	(	including notes
		receivable)		Other receivables
At January 1	$	995,276	$	100,316
(Reversal of) provision for impairment	(	58,783)		9,807
Write-offs	(	206)		-
Effect of exchange rate changes		274		-
At December 31	$	936,561	$	110,123

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and external regulatory or legal requirements.

• ii Surplus cash are invested in interest bearing current accounts, time deposits, money market deposits and marketable securities, with appropriate maturities or sufficient liquidity to provide sufficient headroom and meet the above-mentioned forecasts. As of December 31, 2023 and 2022, the Group held money market position of $15,765,934 and $16,291,198, respectively, and those are expected to readily generate cash inflows for managing liquidity risk.

iii.The Group has the following undrawn borrowing facilities:

isk. The Group has the following undrawn borrowing facilities:
December 31, 2023 Floating rate: Expiring within one year 12,950,154 $ Expiring beyond one year 14,098,784 27,048,938 $	December31,2022
	11,487,018 $ 15,426,259
	26,913,277 $

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• iv. The table below shows analysis of the Group’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Non-derivative financial liabilities:

undiscounted cash flows. Non-derivative financial liabilities:
December 31, 2023 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables Lease liabilities Long-term borrowings (including current portion) Guarantee deposits received Non-derivative financial liabilities: December 31, 2022 Short-term borrowings Short-term notes and bills payable Notes payable Accounts payable (including related parties) Other payables Lease liabilities Long-term borrowings (including current portion) Long-term payables (including current portion) Guarantee deposits received	Less than 1year 747,136 $ 1,295,140 1,805 2,855,808 3,810,923 111,084 1,802,648 19,876 Less than 1year 1,203,495 $ 775,294 243,332 2,461,872 4,619,754 127,845 431,263 - 50,551	Between 1 and5 years - $ - - - - 382,126 1,869,490 1,926 Between 1 and5 years - $ - - - - 364,128 3,778,482 41,285 666	Between5and 7years - $ - - - - 152,899 109,473 - Between5and 7years - $ - - - - 143,926 6,466 - -	Over 7years
				- $ - - - - 1,124,076 - 4,601 Over 7years
				- $ - - - - 1,187,997 - - -

     - v. The Group does not expect the timing of the estimated cash outflows through the maturity date analysis will be significantly earlier, or expect the actual cash flow amount will be significantly different.

• (3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in convertible bonds and most derivative instruments is included in Level 2.

  • Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market is included in Level 3.

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• B. Financial instruments not measured at fair value

• (a) Except for those listed in the table below, the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, refundable deposits, other financial assets, short-term borrowings, short-term notes and bills payable, notes payable, accounts payable, other payables, lease liabilities, long-term accounts payable and guarantee deposits received are approximate to their fair value.

Financial liabilities: Long-term borrowings (including current portion) Financial liabilities: Long-term borrowings (including current portion)	Bookvalue 3,723,610 $ Book value 4,118,016 $	Level 1 - $ Level 1 - $ December December	Level 2 3,736,188 $ Fairvalue 31,2022 31,2023 Fairvalue	Level3 - $
			Level 2 4,117,506 $	Level 3 - $

• (b) The methods and assumptions of fair value estimate are as follows:

  • Long-term borrowings: They are measured at present value, which is calculated based on the cash flow expected to be paid and discounted using a market rate prevailing at balance sheet date.

• C. The related information of financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2023 and 2022 is as follows:

• (a) The related information of natures of the assets and liabilities is as follows:

December 31, 2023 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Derivatives Financial assets at fair value through other comprehensive income Equity securities Total Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives	Level 1 150,143 $ - 1,097,312 1,247,455 $ - $	Level 2 - $ 52,303 - 52,303 $ 2,284 $	Level3 - $ - 3,101,227 3,101,227 $ - $	Total
				150,143 $ 52,303 4,198,539
				4,400,985 $
				2,284 $

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December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Equity securities Beneficiary certificates Derivatives Financial assets at fair value through other comprehensive income Equity securities Total Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss Derivatives	Level 1 96,301 $ 45,350 - 1,186,718 1,328,369 $ - $	Level 2 - $ - 22,415 - 22,415 $ 2,214 $	Level3 90,007 $ - - 3,258,599 3,348,606 $ - $	Total 186,308 $ 45,350 22,415 4,445,317
				4,699,390 $
				2,214 $

• (b) The methods and assumptions the Group used to measure fair value are as follows:

• i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Listed stocks Closed-end fund Open-end fund Market quoted price Closing price Closing price Net asset value

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

• iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market and foreign exchange swap contracts, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.

• iv. For high-complexity financial instruments, the fair value is measured by using selfdeveloped valuation model based on the valuation method and technique widely used within the same industry. The valuation model is normally applied to derivative financial instruments, debt instruments with embedded derivatives or securitised instruments. Certain inputs used in the valuation model are not observable at market, and the Group must make reasonable estimates based on its assumptions. The effect of unobservable inputs to the valuation of financial instruments is provided in Note 12(3)5.

• v. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with additional inputs, for example, model risk or liquidity risk and etc. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and

274

non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• (c) The following chart is the movement of Level 3 for the years ended December 31, 2023 and 2022:

2022:
			2023			2022
		Financial instruments			Financial instruments
At January 1		$	3,348,606		$	4,245,029
(Losses) gains recognised in profit or loss	(		3,706)			774
Losses recognised in other
comprehensive income	(		137,372)	(		321,885)
Additions			-			188,200
Disposals	(		106,301)	(		303,530)
Transfers out from level 3			-	(		464,627)
Effect of exchange rate changes			-			4,645
At December 31		$	3,101,227		$	3,348,606

• D. Treasury department is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value.

• E. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

				Significant
		Fair value at	Valuation	unobservable	Range	Relationship of
		December 31,2023	technique	input	(weighted average)	inputs to fair value
Non-derivative equity instrument:
Unlisted stocks	$	3,057,591	Market	Price to book ratio	NA	The higher the multiple,
			comparable	multiple		the higher the fair value.
			companies
				Discount for lack of	20% ~ 30%	The higher the discount
				marketability		for lack of marketability,
						the lower the fair value.
Unlisted stocks		41,136	Market	Equity value multiple	1.40	The higher the equity
			comparable	(P/B ratio) on		value multiple, the higher
			companies	December 31, 2023		the fair value.
				Liquidity discount	26.69%	The higher the liquidity
				ratio on December 31,		discount ratio, the lower
				2023		the fair value.
Unlisted stocks		2,500	Net asset value	N/A	-	N/A

275

				Significant
		Fair value at	Valuation	unobservable	Range	Relationship of
		December 31,2022	technique	input	(weighted average)	inputs to fair value
Non-derivative equity instrument:
Unlisted stocks	$	3,053,691	Market	Price to book ratio	NA	The higher the multiple,
			comparable	multiple		the higher the fair value.
			companies
				Discount for lack of	20% ~30%	The higher the discount
				marketability		for lack of marketability,
						the lower the fair value.
Unlisted stocks		213,364	Market	Enterprise value to	NA	The higher the multiple,
			comparable	EBITDA ratio		the higher the fair value.
			companies	multiple
				Discount for lack of	25.08%	The higher the discount
				marketability		for lack of marketability,
						the lower the fair value.
Unlisted stocks		36,480	Market	Equity value multiple	1.29	The higher the equity
			comparable	(P/B ratio) on		value multiple, the higher
			companies	December 31, 2022		the fair value.
				Liquidity discount	30.00%	The higher the liquidity
				ratio on December 31,		discount ratio, the lower
				2022		the fair value.
Unlisted stocks		45,071	Net asset value	N/A	-	N/A

• F. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorised within Level 3 if the inputs used to valuation models have changed:

have changed:
Financial assets Equity instrument Financial assets Equity instrument	Input Multiple Input Multiple	Change ±1% Change ±1%	December	Favourable Unfavourable change change 31,012 $ 31,012) ($ Favourable Unfavourable change change 32,586 $ 32,586) ($ 31,2023 Recognised in other comprehensive income 31,2022 Recognised in other comprehensive income
			Favourable Unfavourable change change - $ - $ Recognised in profit or loss December
			Favourable change - $
			Favourable Unfavourable change change 900 $ 900) ($ Recognised in profit or loss

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT $300 million or 20% paid-in capital or more: Please refer to table 4.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 5.

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• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 6.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 7.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 8.

• I. Trading in derivative instruments undertaken during the reporting periods: please refer to Notes 6(2) and 12(3).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 9.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 10.

• (3) Information on investments in Mainland China

• A. Basic information: Please refer to table 11.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 12.

(4) Major shareholders information

Major shareholders information: Please refer to table 13.

14. SEGMENT INFORMATION

• (1) General information:

The Group is engaged in the research and development, design, manufacturing and sales of EPI wafers and chips of A1GaInP, AlGaAs and InGaN and LED packages and modules. The Chief Operating Decision-Maker assesses performance by each operating result of each sub-group within the consolidated report.

(2) Segment information

The accounting policy of operating segments is provided in Note 4. The Chief Operating DecisionMaker assesses the performance of the operating segments based on the financial statements of operating segments. The measurement of profit is based on the income from continuing operations.

(3) Information about segment profit or loss, assets and liabilities:

The segment information provided to the Chief Operating Decision-Maker for the reportable segments and reconciliations is as follows:

277

Year ended December 31, 2023	EpistarGroup	EpistarGroup	LextarGroup	LextarGroup		Others	Consolidated	Consolidated
Revenues from external	$	14,044,396	$	7,713,164	$	548,120	$	22,305,680
customers
Segment income	(	6,114,857)	(	107,120)	(	1,100,755)	(	7,322,732)
Segment income (loss) including :
Interest income		154,671		82,254		2,654		239,579
Interest expense		178,539		9,155		4,250		191,944
Depreciation and
amortisation		3,927,779		534,013		378,642		4,840,434
Investment loss under
equity method		357,775		85,460		104,679		547,914
Income tax expense
(benefit)	(	52,061)	(	10,647)		441	(	62,267)
December 31, 2023
Segment assets		45,419,831		13,273,380		5,409,251		64,102,462
Year ended December 31, 2022	EpistarGroup		LextarGroup			Others	Consolidated
Revenues from external	$	20,656,462	$	7,917,729	$	304,059	$	28,878,250
customers
Segment income		757,527	(	338,290)	(	985,620)	(	566,383)
Segment income (loss) including :
Interest income		60,771		38,350		5,479		104,600
Interest expense		120,871		8,672		2,059		131,602
Depreciation and
amortisation		4,449,790		590,105		170,370		5,210,265
Investment loss under
equity method		268,941		400,822		43,822		713,585
Income tax expense
(benefit)		108,217	(	33,039)		7,737		82,915
December 31, 2022
Segment assets		53,849,830		13,136,814		6,056,826		73,043,470

(4) Information on products and services

Please refer to Note 6 (24) for the related information.

(5) Geographical information

Geographical information for the years ended December 31, 2023 and 2022 is as follows:

278

Revenue Non-current assets Taiwan 2,007,077 $ 18,646,099 $ China 12,403,340 5,199,576 Hong Kong 1,188,906 414 Korea 1,159,552 1,422 Malaysia 2,203,157 - Japan 1,865,326 - Singapore 503,012 - Others 975,310 10,467 22,305,680 $ 23,857,978 $ Year ended December31,2023	Revenue Non-current assets 2,258,507 $ 24,526,710 $ 12,891,953 5,781,725 1,522,528 105,790 680,315 1,464 2,132,841 - 7,403,290 - 680,140 - 1,308,676 12,881 28,878,250 $ 30,428,570 $ Year ended December31,2022

(6) Major customer information

Major customer information of the Group for the years ended December 31, 2023 and 2022 is as follows:

B D C	Year ended Year ended December31,2023 December31,2022 Revenue Revenue 2,755,184 $ 2,660,661 1,977,254 1,786,146 1,507,573 7,001,287

279

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

ENNOSTAR INC. AND SUBSIDIARIES Loans to others

Year ended December 31, 2023

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Dec-23	Balance at 31-Dec-23	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
0 1 1 2 2 3 4 5	ENNOSTAR Inc. Epicrystal (Changzhou) Ltd. Epicrystal (Changzhou) Ltd. EPISTAR JV HOLDING (BVI) CO., LTD. EPISTAR JV HOLDING (BVI) CO., LTD. Lighting Investment Ltd. Luxlite (HK) Corporation Limited United LED Shan Dong Corporation	Unikorn Semiconductor Corporation Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd Episky Corporation (Xiamen) Ltd Epistar Corporation EPISTAR JV HOLDING(BVI ) CO., LTD. EPISTAR JV HOLDING(BVI ) CO., LTD. Episky Corporation (Xiamen) Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y Y Y Y	500,000 $ 355,600 442,200 69,342 551,225 199,875 145,913 133,350	500,000 $ 346,160 432,700 - 521,985 184,230 138,173 129,810	200,000 $ 346,160 86,540 - 521,985 184,230 89,045 129,810	2.15% 3.45%~ 3.55% 3.45% 0.00% 5.95% 5.95% 5.95% 3.65%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital Working capital Working capital	- $ - - - - - - -	Promissory Note Promissory Note Promissory Note None Promissory Note Promissory Note Promissory Note Promissory Note	500,000 $ 346,160 432,700 - 521,985 184,230 138,173 129,810	4,737,417 $ 1,716,213 1,716,213 4,737,417 3,553,944 726,518 293,325 144,935	14,212,252 $ 1,716,213 1,716,213 8,884,860 8,884,860 726,518 293,325 144,935	Note 1 Note 2 Note 2 Note 3 Note 4 Note 3 Note 3 Note 5

Table 1-1

280

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Dec-23	Balance at 31-Dec-23	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
6 6 6 7 8	Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp Lextar Electronics (Chuzhou) Corp.	Yenrich Technology Corporation Unikorn Semiconductor Corporation Trendylite Corporation Chuzhou Bwin Technology Corp. Episky Corporation (Xiamen) Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y	250,000 $ 500,000 25,000 44,220 865,400	250,000 $ 500,000 25,000 43,270 865,400	- $ 500,000 - - -	Markup on short-term cost of capital 2.17% Markup on short-term cost of capital 3.55% Markup on short-term cost of capital	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - -	Working capital Working capital Working capital Working capital Working capital	- $ - - - -	None Promissory Note None None None	- 500,000 - - -	970,467 $ 970,467 970,467 1,525,967 3,691,000	2,911,402 $ 2,911,402 2,911,402 3,814,917 3,691,000	Note 6 Note 6 Note 6 Note 7 Note 3

• Note 1: Limit on loans granted by Ennostar Inc., the ceiling to total loasns granted is 30% of its net asset and to a single party is 10% of its net asset.

• Note 2: Limit on loans granted by the subsidiary of Epistar, Epicrystal (Changzhou), limit on total loans is 40% of the Epicrystal (Changzhou)’s net asset, and 30% of Ennostar Inc.'s net asset ,and to a single party is 10% of the Epicrystal (Changzhou)'s net asset, and 10% of ENNOSTAR Inc’s net asset.

• Note 3: Limit on loans granted by Epistar JV, Lighting,Luxlite (HK) and Lextar Electronics (Chuzhou) Corp. to parent company and a fellow subsidiary that is 100% controlled by the parent company located outside Taiwan, limit on total loans is net asset of the Company and 30% of the net asset based on the latest financial statements of Ennistar Inc.,and to a single party is net asset of the Company and 10% of the net asset based on the latest financial statements of Ennostar Inc..The maximum term of the financing is three years.

• Note 4: Limit on loans granted by the subsidiary of Epistar, Epistar JV, limit on total loans is net asset of Epistar JV and 30% of the net asset based on the latest financial statements of Ennostar Inc., and to a single party is 40% of Epistar JV 's net asset and 10% of the net asset based on the latest financial statements of Ennostar Inc..

Note 5: Limit on loans granted by the subsidiary of Epistar, United LED Shan Dong, limit on total loans is 40% of United LED Shan Dong’s net asset, and 30% of the net asset based on the latest financial statements of Ennostar Inc. , and to a single party is 40% of the United LED Shan Dong's net asset and 10% of the net asset based on the latest financial statements of Ennostar Inc..

• Note 6:In accordance with Lextar Electronics Corporation Procedures for Provision of Loans: the limit on loans granted to a single party is 10% of its net asset, and the ceiling on total loans granted is 30% of its net asset.

Note 7: Limit on loans granted by the subsidiary of Lextar Electronics Corporation, Lextar (Suzhou), limit on total loans is net asset of Lextar (Suzhou) and 30% of the net asset based on the latest financial statements of Ennostar Inc., and to a single party is 40% of its net net asset, and 10% of the net asset based on the latest financial statements of Ennostar Inc..

Table 1-2

281

ENNOSTAR INC. AND SUBSIDIARIES Provision of endorsements and guarantees to others Year ended December 31, 2023

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Party being endorsed/guaranteed

Number （Note 1）	Endorser/ guarantor	Companyname	Relationship with the endorser/ guarantor (Note 2)	Limit on endorsements/ guarantees provided for a single party (Note3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2023	Outstanding endorsement/ guarantee amount at December 31, 2023	Actual amount drawn down	Amount of endorsements /guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note3)	Provision of endorsements /guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in MainlandChina	Footnote
1 1	Epistar Corporation Epistar Corporation	Unikorn Semiconductor Corporation ENNOSTAR Inc.	2 3	3,297,450 $ 3,297,450	300,000 $ 3,250,000	- $ 3,250,000	- $ -	- $ -	- 9.86	6,594,901 $ 6,594,901	N N	N Y	N N

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

• (1) Having business relationship.

• (2) The endorser/guarantor parent company owns directly or indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (3) The endorser/guarantor parent company and its subsidiaries jointly own directly or indirectly more than 50% voting shares of the endorsed/guaranteed company.

• (4) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.

• (5) Mutual guarantee of the trade as required by the construction contract.

• (6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

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

• Note3: In accordance with the Epistar’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 20% of the Company’s net asset, and the limit on endorsements/guarantees to a single party is 10% of its net asset.

Table 2-1

282

ENNOSTAR INC. AND SUBSIDIARIES Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Table 3

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December31,2023	As of December31,2023		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Harvestar Investment Corp. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Amengine Corporation (Preferred stock) E&E Japan Co.Ltd. (Stock) NATEC CORPORATION (Stock) Esleds Co.,Ltd. (Stock) Lynk Labs,Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Dominant Opto Technologies Sdn. Bhd. (Stock) XENIO CORPORATION (Stock)	Controlled by the same entity None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss	500,000 140 120,000 1,000 92,523 1,339,235 35,000,000 7,878	2,500 $ 2,143 1,748 148 - 169,946 784,786 -	- 17.07 7.50 10.00 7.39 13.68 10.00 0.06	2,500 $ 2,143 1,748 148 - 169,946 784,786 -

Table 3-1

283

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Episky Corporation(Xiamen) Ltd. Episky Corporation(Xiamen) Ltd.	PlayNitride Inc. (Stock) OSTENDO TECHNOLOGIES,INC. (Stock) Nan Ya Photonics Incorporation (Stock) PHECDA TECHNOLOGY CO., LTD ELIT FINE CERAMICS CO., LTD. Nanocrystal Technology Inc. Bridgelux Optoelectronics (Xiamen) Co., Ltd.(Stock) China Firstar Optoelectronic Materials Co., Ltd. (Stock) APT Electronics Co., Ltd.(Stock)	None None None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Table 3-2	9,137,338 67,500 9,173,000 600,000 2,200,000 6,000,000 56,316,532 cash RMB7,500,000 4,678,240	631,938 $ - 214,373 - - - 1,691,177 - 44,736	8.53 0.04 19.90 2.11 4.49 11.11 18.77 15.00 0.94	631,938 $ - 214,373 - - - 1,691,177 - 44,736

284

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Episky Corporation(Xiamen) Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	China Crystal Technologies Co.,Ltd.(Stock) Oree Advanced Illumination Solutions, Inc. (Stock) Lustrous Technology Ltd. (Stock) TERA XTAL TECHNOLOGY CORPORATION (Stock) XENIO SYSTEMS, INC (Stock) FormoLight Technologies, Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Edison Opto Corp. (Stock) Rigidtech Microelectronics Cops. (Stock)	None None None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	8,064,516 79,407 266,892 795,000 16,462 2,038,230 562,018 11,257,964 1,550,253	- $ - - - - 10,607 71,319 274,694 9,769	4.08 5.00 8.99 0.42 0.13 10.00 5.74 7.84 2.17	- $ - - - - 10,607 71,319 274,694 9,769

Table 3-3

285

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. HUGA Holding (SAMOA) Ltd.	Ledimond Opto Corporation (Stock) iReach Corporation (Stock) Edison Opto Corp. (Stock) ENNOSTAR Inc. (Stock) Verticle Inc. (Stock) Achrolux Inc. (Stock) PlayNitride Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) China Crystal Technologies Co.,Ltd.(Stock)	None Investments accounted for using equity method of Epistar Corporation None Parent company None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	1,100,000 370,000 6,153,424 1,282,377 582,983 987,500 2,757,082 200,000 17,741,935	7,933 $ 1,891 150,144 59,374 - - 190,680 25,380 -	16.92 - 4.28 0.17 3.00 6.91 2.57 2.04 8.97	7,933 $ 1,891 150,143 59,374 - - 190,680 25,380 -	Note1

Table 3-4

286

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Jiangsu Canyang Optoelectronics Ltd Wellybond Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd	C-Star (Yangzhou) technology Co., Ltd Wellysun Inc.(Stock) LANKE ELECTRONIC CO.,LTD	None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	cash RMB5,000,000 2,400,000 cash RMB1,351,030.69	21,635 $ 41,136 -	5.00 5.22 1.31	21,635 $ 41,136 -

Note 1: Transferred from the Epistar’s stocks held as treasury shares.

Table 3-5

287

ENNOSTAR INC. AND SUBSIDIARIES

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2023

Table 4

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Marketable securities （Note 1）	General ledger account	Counterparty （Note 2）	Relationship with the investor （Note 2）	Balance as at January1,2023	Balance as at January1,2023	Addition （Note 3）	Addition （Note 3）		Disposal （Note 3）	Disposal （Note 3）		Balance as at December 31,2023	Balance as at December 31,2023
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Taishin 1699 Money Market Fund (Beneficiary certificates) Taishin Ta Chong Money Market Fund (Beneficiary certificates) Hua Nan Phoenix Money Market Fund (Beneficiary certificates) Capital Money Market Fund (Beneficiary certificates)	Investments accounted for under using equity method Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss	Yenrich Technology Corporation - - - -	Investments measured by equity method - - - -	- - - - -	$ - - - - -	cash RMB100,900 116,771,473 161,089,653 66,963,644 90,596,815	$ 306,962 1,613,000 2,332,000 1,110,000 1,490,000	- 116,771,473 161,089,653 66,963,644 90,596,815	$ - 1,615,668 2,334,087 1,112,355 1,492,580	$ - 1,613,000 2,332,000 1,110,000 1,490,000	$ - 2,668 2,087 2,355 2,580	cash RMB100,900 - - - -	$ 306,962 - - - -

Table 4-1

288

Investor	Marketable securities （Note 1）	General ledger account	Counterparty （Note 2）	Relationship with the investor （Note 2）	Balance as at January1,2023	Balance as at January1,2023	Addition （Note 3）	Addition （Note 3）		Disposal （Note 3）	Disposal （Note 3）		Balance as at December 31,2023	Balance as at December 31,2023
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Epistar Corporation Yenrich Technology Corporation	CTBC Hwa-win Money Market Fund (Beneficiary certificates) LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd.	Current financial assets at fair value through profit or loss Investments accounted for using equity method	- ENNOSTAR Inc.	- Parent company	- cash RMB100,900	$ - 451,407	43,650,269 -	$ 490,000 -	43,650,269 cash RMB100,900	$ 490,530 306,962	$ 490,000 344,407	$ 530 7,230	- -	$ - -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: Fill in the columns the counterparty and relationship if securities are accounted for using equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.

Table 4-2

289

ENNOSTAR INC. AND SUBSIDIARIES

Aquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2023

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Real estate acquired by	Real estate	Transaction date or date of the event	Transaction amount	Status of payment	Counterparty	Relationship with the seller	information as to the last transfer of data If the counterparty is a related party,	information as to the last transfer of data If the counterparty is a related party,	information as to the last transfer of data If the counterparty is a related party,	information as to the last transfer of data If the counterparty is a related party,	Basis or reference used in settingtheprice	Reason for acquisition of real estate and status of the real estate	Other commitments
							Owner	Relationship between the issuer	Date of the transfer	Amount
Unikorn Semiconductor Corporation	Factory facilities and machinery equipment	2023/06/13 ~6/27	362,001 $	According to the agreement of both parties	Epistar Corporation	Both are subsidiaries of ENNOSTAR Inc.	The original counterparties of Epistar were all equipment suppliers, which were not belong to related parties	-	-	$ -	Experts’ appraisal report	For the transfer of equipment transactions between the Group, Unikorn acquired production-related equipment from Epistar to align ownership and management rights.	None

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate aquisition of should be appraised pursuant to the regulations.

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 5-1

290

ENNOSTAR INC. AND SUBSIDIARIES

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2023

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Table 6
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Table 6 Expressed in thousands of NTD (Except as otherwise indicated) Transaction Status of Basis or Real estate date or date Date of Book Disposal collection Gain (loss) Relationship Reason for reference used in Other disposed by Real estate of the event acquisition value amount of proceeds on disposal Counterparty with the seller disposal setting the price commitments Epistar Factory facilities 2023/06/13 2001~ $ 303,890 $ 362,001 According to the $ 58,111 Unikorn Both are For the transfer of Based on a None Corporation and machinery ~6/27 2022 agreement of both Semiconductor subsidiaries of equipment transactions comprehensive equipment parties Corporation ENNOSTAR between the group, consideration of the Inc. Unikorn obtained carrying amount of production-related Epistar’s assets and equipment from Epistar experts' appraisal to align ownership and reports. management rights.

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate disposed of should be appraised pursuant to the regulations.

• Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

• Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 6-1

291

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

ENNOSTAR INC. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2023

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd.	Lextar Electronics (Chuzhou) Corp. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation LEDAZ Co., Ltd Lextar Electronics Corporation Unikorn Semiconductor Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	($ 257,393) ( 174,839) ( 1,246,231) ( 324,744) ( 248,663) ( 108,738) ( 105,990) ( 495,509) ( 1,130,760) ( 378,115) ( 681,953)	( 7) ( 5) ( 35) ( 9) ( 3) ( 1) ( 1) ( 6) ( 14) ( 26) ( 47)	90 days after monthend closing 60 days after monthend closing 100 days after monthend closing 60 days after monthend closing 90 days after monthend closing and 20 days after next monthly billings 90 days after monthend closing 120 days after monthend closing 180 days after next month-end closing 150 days after next month-end closing 90 days after monthend closing 180 days after next month-end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	$ 72,556 35,116 409,297 64,650 89,620 38,957 24,699 280,403 396,468 166,683 315,726	3 1 16 2 2 1 1 6 9 9 18

Table 7-1

292

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Shenzhen Epikylin Optoelectronics Co.,Ltd Lextar Electronics Corporation Lextar Electronics Corporation	Episky Corporation (Xiamen) Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. Epistar Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	( 1,077,583) ( 163,612) ( 1,146,378) ( 374,473) 1,146,378 1,130,760 1,077,583 163,612 324,744 681,953 374,473 378,115 495,509 1,246,231 2,346,035 108,738	( 74) ( 14) ( 99) ( 32) 27 26 25 3 6 12 31 30 28 72 72 3	180 days after next month-end closing 90 days after monthend closing 120 days after monthend closing 90 days after monthend closing 120 days after monthend closing 150 days after next month-end closing 180 days after next month-end closing 90 days after monthend closing 60 days after monthend closing 180 days after next month-end closing 90 days after monthend closing 90 days after monthend closing 180 days after next month-end closing 100 days after monthend closing 120 days after monthend closing OA 120 days	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	1,238,105 24,923 827,772 271,993 ( 827,772) ( 396,468) ( 1,238,105) ( 24,923) ( 64,650) ( 315,726) ( 271,993) ( 166,683) ( 280,403) ( 409,297) ( 774,205) ( 38,957)	69 2 65 21 ( 36) ( 17) ( 54) ( 2) ( 5) ( 23) ( 81) ( 55) ( 41) ( 59) ( 60) ( 3)

Table 7-2

293

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. Shanghai Welight Electronic Co., LTD. Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Yenrich Technology Corporation ProLight Opto Technology Corporation	Tyntek Corporation Lextar Electronics (Chuzhou) Corp. Episky Corporation (Xiamen) Ltd. ProLight Opto Technology Corporation AUO (Suzhou) Corp Ltd. Fortech Electronics (Suzhou) Co., Ltd. Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics Corporation Shanghai Welight Electronic Co., LTD.	Note 1 Note 1 Note 1 Note 1 Other related parties Other related parties Note 1 Note 1 Note 1 Note 1	Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales	$ 140,168 390,228 257,393 115,820 ( 174,558) ( 374,282) ( 2,346,035) ( 390,228) ( 160,680) ( 115,820)	4 94 8 71 ( 4) ( 8) ( 50) ( 8) ( 65) ( 23)	OA 120 days 90 days after monthend closing OA 90 days 120 days after monthend closing 120 days after monthend closing 120 days after monthend closing 120 days after monthend closing 90 days after monthend closing 120 days after monthend closing 120 days after monthend closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	($ 38,745) ( 11,451) ( 72,556) ( 63,633) 79,380 114,138 774,205 11,451 8,972 63,633	( 3) ( 6) ( 6) ( 154) 7 9 53 1 22 48

Note 1: Investee company accounted for using equity method directly and indirectly.

Table 7-3

294

ENNOSTAR INC. AND SUBSIDIARIES

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2023

Table 8 Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2023	Balance as at December31,2023	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)
			Accounts receivable	Other receivable			Amount	Action taken
ENNOSTAR Inc. Epistar JV Holding (BVI)Co.,Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation United LED Corporation (Hong Kong) Limited Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Lighting Investment Ltd. Lextar Electronics Corporation Lextar Electronics Corporation	Unikorn Semiconductor Corporation Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epistar JV Holding (BVI)Co.,Ltd. Fortech Electronics (Suzhou) Co., Ltd. Unikorn Semiconductor Corporation	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Other related parties Note 2	$ - - 409,297 64,650 280,403 396,468 - 166,683 315,726 1,238,105 827,772 271,993 - 114,138 -	$ 203,504 539,078 - 53,017 2,553 23,533 130,218 347,333 580 86,590 - 349 190,266 - 500,000	$ 203,504 539,078 409,297 117,667 282,956 420,001 130,218 514,016 316,306 1,324,695 827,772 272,342 190,266 114,138 500,000	$ - - 2.76 ( 4.39) 1.71 3.84 - 0.92 1.30 1.28 2.26 2.75 - 5.13 -	$ - - - - - 1,742 - - - 220,528 269,206 - - - -	- - - - - - - - - - - - - - -	$ 207 - 97,551 29,575 38,068 121,436 130,218 - - 70,986 173,312 37,688 - 114,138 -	$ - - - - - - - - - - - - - - -

Table 8-1

295

Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2023	Balance as at December31,2023	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful debts
			Accounts receivable	Other receivable			Amount	Action taken
Lextar Electronics (Chuzhou) Corp.	Lextar Electronics Corporation	Note 2	$ 774,205	$ 2,178	$ 776,383	5.05	-	-	$ 224,610	$ -

Note 1: The amount recovered by Epistar Corporatio from Episky Corporation (Xiamen) Ltd. was $1,633 for overdue amounts.

The amount recovered by Jiangsu Canyang Optoelectronics Ltd. from Episky Corporation (Xiamen) Ltd. was $173,312 for overdue amounts. All the unoverdue amounts are being actively collected. Note 2: Investee company accounted for using equity method directly and indirectly.

Table 8-2

296

ENNOSTAR INC.AND SUBSIDIARIES

Significant inter-company transactions during the reporting periods

Year ended December 31, 2023

Table 9 Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)		Expressed in thousands of NTD (Except as otherwise indicated) Transaction	Expressed in thousands of NTD (Except as otherwise indicated) Transaction	Expressed in thousands of NTD (Except as otherwise indicated) Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
0 0 0 1 1 1 1 1	ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Unikorn Semiconductor Corporation Lextar Electronics Corporation Epistar Corporation Lextar Electronics Corporation Unikorn Semiconductor Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd	1 1 1 1 1 1 1 1	Other receivable Other operating revenue Other operating revenue Sales Sales Sales Sales Accounts receivable	$ 203,304 107,139 218,261 108,738 105,990 495,509 1,130,760 280,403	Based on contract terms Based on contract terms Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.32 0.48 0.98 0.49 0.48 2.22 5.07 0.44

Table 9-1

297

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
1 2 2 2 2 2 3 3 3 3	Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd.	Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd.	1 3 3 3 2 3 3 2 3 3	Accounts receivable Sales Sales Sales Sales Accounts receivable Sales Sales Sales Notes receivable	$ 396,468 257,393 174,839 1,246,231 324,744 409,297 378,115 681,953 1,077,583 341,186	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.62 1.15 0.78 5.59 1.46 0.64 1.70 3.06 4.83 0.53

Table 9-2

298

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
3 3 3 3 4 4 4 4 4 4	Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd.	Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd.	3 2 3 3 2 3 3 3 3 3	Accounts receivable Accounts receivable Accounts receivable Other receivable Sales Sales Sales Notes receivable Accounts receivable Accounts receivable	$ 166,683 315,726 896,919 347,333 163,612 1,146,378 374,473 142,197 827,772 129,796	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.26 0.49 1.40 0.54 0.73 5.14 1.68 0.22 1.29 0.20

Table 9-3

299

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
5 6 7 8 8 9 9 9 9 10	United LED Corporation (Hong Kong) Limited Epistar JV Holding (BVI)Co.,Ltd. Lighting Investment Ltd. Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Yenrich Technology Corporation	Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar JV Holding (BVI)Co.,Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Unikorn Semiconductor Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics Corporation	3 2 3 3 3 3 3 3 3 3	Other receivable Other receivable Other receivable Cost of goods sold Cost of goods sold Other receivable Sales Accounts receivable Sales Sales	$ 130,218 539,078 190,266 108,738 257,393 500,000 2,346,035 774,205 390,228 160,680	Based on contract terms Based on contract terms Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.20 0.84 0.30 0.49 1.15 0.78 10.52 1.21 1.75 0.72

Table 9-4

300

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
11	ProLight Opto Technology Corporation	Shanghai Welight Electronic Co., LTD.	3	Sales	$ 115,820	Conducted in the ordinary course of business with terms similar to those with third parties	0.52

Note 1: Parent company is ‘0’.The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs

• to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice.

For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for

transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

• Note 4: Disclosure of the transactions over 100 million New Taiwan dollars only and the related party transactions for counterparty are not disclosed.

Table 9-5

301

ENNOSTAR INC. AND SUBSIDIARIES

Information on investees

Year ended December 31, 2023

Table 10

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2023	Shares held as at December 31,2023	Shares held as at December 31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
				Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc.	Epistar Corporation Lextar Electronics Corporation Harvestar Investment Corp. Tyntek Corporation Amengine Corporation GCS Holding Inc.	Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules Professional investment Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Developing and sales of medical optical sensor modules OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics	$ 38,607,380 11,724,646 1,150,000 584,583 40,212 431,990	$ 38,607,380 11,724,646 1,150,000 584,583 40,212 431,990 Table 10-1	1,116,479,188 514,916,380 115,000,000 23,799,000 6,922,000 9,028,000	100.00 100.00 100.00 7.92 75.96 8.11	$ 32,871,412 11,015,335 706,482 622,100 14,494 309,374	($ 6,060,593) ( 527) ( 220,874) ( 131,953) ( 13,671) ( 792,236)	($ 6,106,299) ( 53,255) ( 220,874) ( 10,458) ( 10,385) ( 75,156)	Note1 Note1

302

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Harvestar Investment Corp. Harvestar Investment Corp. Precistar Investment Corp.	Calystar Investment Corp. Unikorn Semiconductor Corporation Precistar Investment Corp. Praistar Investment Corp Manastar Investment Corp GCS Holding Inc. Tyntek Corporation Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation	Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan	Professional investment Original equipment manufacturer of III-V semiconductor Professional investment Professional investment Professional investment OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Original equipment manufacturer of III-V semiconductor Original equipment manufacturer of III-V semiconductor	$ 440,000 783,132 480,000 270,000 1,000 433,099 263,864 444,785 476,300	$ 440,000 593,132 270,000 270,000 1,000 433,099 209,551 444,785 268,000	44,000,000 65,700,000 48,000,000 27,000,000 100,000 9,013,000 13,089,000 52,000,000 23,815,020	100.00 19.53 100.00 100.00 100.00 8.10 4.35 15.45 7.08	$ 366,250 107,389 49,086 27,542 974 357,463 257,152 79,037 45,443	($ 57,229) ( 891,055) ( 49,998) ( 36,909) ( 7) ( 792,236) ( 131,953) ( 891,055) ( 891,055)	($ 57,229) ( 164,192) ( 49,998) ( 36,909) ( 7) ( 75,027) ( 5,443) ( 140,510) ( 49,958)	Note1 Note1

Table 10-2 303

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Calystar Investment Corp. Calystar Investment Corp. Praistar Investment Corp Unikorn Semiconductor Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	GCS Holding Inc. Tyntek Corporation Unikorn Semiconductor Corporation GCS Holding Inc. iReach Corporation Epistar JV Holding (BVI) Co.,Ltd. Full Star Enterprises Limited Lighting Investment Corporation Unikorn Semiconductor Corporation	Cayman Islands Taiwan Taiwan Cayman Islands Taiwan British Virgin Islands Hong Kong Taiwan Taiwan	OEM manufacturing of GaAs / InP / GaN / SiC Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Original equipment manufacturer of III-V semiconductor OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Manufacturing, sales, packaging and module design of semiconductor light emitting devices Professional investment Professional investment Professional investment Original equipment manufacturer of III-V semiconductor	$ 265,135 151,238 268,000 1,051 70,000 14,960,129 - 1,561,814 826,083	$ 265,135 97,787 268,000 1,051 70,000 14,960,129 166,785 1,561,814 826,083 Table 10-3	6,500,000 8,094,000 13,400,000 20,000 7,000,000 48,278 - 191,478,518 40,000,000	5.84 2.69 3.98 0.02 34.30 100.00 0.00 100.00 11.89	$ 196,468 143,778 25,546 975 53,262 8,848,099 - 1,570,771 75,597	($ 792,236) ( 131,953) ( 891,055) ( 792,236) ( 22,013) ( 486,603) - 8,947 ( 891,055)	($ 54,125) ( 3,294) ( 36,923) ( 4) ( 8,330) ( 518,609) - 10,251 ( 108,571)	Note1 Note1 Note1

304

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Lighting Investment Ltd.	SH Co., Ltd. TE Opto Corporation GaN Force Corporation Tyntek Corporation Can Yang Investments Limited HUGA Holding (SAMOA) Limited LiteStar JV Holding (BVI) CO., Ltd. United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited Can Yang Investments Limited LEDAZ CO., Ltd.	Taiwan Taiwan Taiwan Taiwan Hong Kong Samoa British Virgin Islands Hong Kong Hong Kong Hong Kong Korea	Sales of LED chips Sales of LED chips Design, manufacturing and sales of semiconductor materoals and modules Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Engineering service of LED	$ 31,792 9,200 77,700 1,243 66,745 334,967 3,408,835 2,029,760 2,124,096 4,385,900 48,166	$ 31,792 9,200 77,700 1,243 66,745 334,967 3,408,835 2,029,760 2,124,096 4,370,156 48,166 Table 10-4	3,179,176 920,000 1,118,600 50,000 2,679,063 12,551,035 10,882 67,000,165 cash USD68,000,000 66,438,929 88,460	49.00 40.00 64.32 0.02 3.53 100.00 82.41 74.86 100.00 87.41 28.13	$ 2,363 43,980 678 1,175 56,679 3,318 3,302,292 258,619 1,954,893 1,405,455 -	($ 76) 3,619 697 ( 131,953) ( 6,414) 82 ( 238,730) ( 6,635) ( 288,026) ( 6,414) 49,914	($ 37) 1,448 448 ( 27) ( 226) 82 ( 196,737) ( 4,967) ( 288,026) ( 5,382) ( 24,455)	Note1

305

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. LiteStar JV Holding (BVI) Co.,Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	Interlight Optotech (HK) Co.,Limited Epistar (Hong Kong) Limited Luxlite (HK) Corporation Limited Epicrystal (Hong Kong) Co. Ltd. LEDAZ CO., Ltd. Lighting Investment Ltd. Yenrich Opto (Hong Kong) Limited Can Yang Investments Limited GaNrich Semiconductor Corporation LEDOLUX Sp.Zo.O. Joint Power Exponent, Ltd.	Hong Kong Hong Kong Hong Kong Hong Kong Korea British Virgin Islands Hong Kong Hong Kong Taiwan Poland Taiwan	Sales of LED packages Professional investment Professional investment Professional investment Engineering service of LED Professional investment Sales of LED lighting products Professional investment Design and technology service of LED lighting product Assembling and sales of LED bulbs Power IC design and module sales	$ 12,806 2,556 133,979 4,403,034 23,993 152,701 - 72,436 - 133,455 11,599	$ 12,806 2,556 133,979 4,403,034 23,993 152,701 133,403 72,436 67,101 133,455 11,599	429,000 82,850 3,800,000 146,600,000 44,065 45,643 - 5,218,605 - 156,994 1,757,000	30.00 100.00 100.00 100.00 14.01 100 - 6.87 - 60.00 11.26	$ 7,475 16 293,337 4,006,499 - 726,518 - 110,462 - 11,933 2,805	($ 11,724) 262 13,448 ( 238,569) 49,914 ( 9,031) - ( 6,414) ( 21,358) ( 1,164) ( 23,969)	($ 3,517) 262 13,448 ( 238,569) ( 16,376) ( 9,031) - ( 441) ( 19,001) ( 698) ( 2,783)	Note1

Table 10-5

306

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Episky Corporation (Xiamen) Ltd Epicrystal (Changzhou) Co., Ltd. Episky Corporation (Xiamen) Ltd Episky Corporation (Xiamen) Ltd Lextar Electronics Corporation Lextar Electronics Corporation	Tyntek Corporation GaN Force Corporation Domi-Star Optoelectronics Corporation Epicrystal (Changzhou) Co., Ltd. Changzhou Chemsemi Co., Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Lextar (Singapore) Pte. Ltd. Wellybond Optronics (H.K) Limited	Taiwan Taiwan Taiwan China China China China Sinapore Hong Kong	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Design, manufacturing and sales of semiconductor materoals and modules Design and sales of LED lighting product Manufacturing and sales of LED wafers and chips OEM manufacturing of compound semiconductor RFID wafers and optoelectronic wafers Developing, manufacturing and sales of LED packages, modules and related applications Sales of LED chips Professional investment Professional investment	$ 1,276 641 490 147,472 469,590 164,862 43,770 2,709,310 17,888	$ 1,276 641 490 147,472 469,590 122,036 43,770 2,709,310 17,888	50,000 620,400 49,000 cash USD5,200,000 cash RMB110,000,000 cash RMB38,800,000 cash RMB10,000,000 90,270,000 63,000,000	0.02 35.68 49.00 3.31 10.44 9.70 100.00 100.00 100.00	$ 767 952 311 145,486 583,853 133,547 219,874 2,613,816 11,864	($ 131,953) 697 ( 64) ( 255,482) ( 1,762,498) ( 56,109) 30,429 155,548 18	($ 27) 249 ( 32) ( 8,456) ( 188,915) ( 5,492) 30,429 155,548 18	Note1

Table 10-6 307

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation	Wellypower Optronics Corporation Apower Optronics Corporation Liang Li Venture Corp. Wellybond Corporation Trendylite Corporation Hexawave, Inc. Yenrich Technology Corporation ProLight Opto Technology Corporation Tyntek Corporation	British Virgin Islands British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Professional investment Professional investment Professional investment Professional investment Sales of products Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade	$ 44,898 381,638 175,374 746,484 20,874 147,506 580,487 99,081 1,304	$ 44,898 381,638 175,374 746,484 18,100 147,506 980,487 97,031 1,304	5,153,061 31,600,000 18,000,000 75,000,000 3,150,000 12,716,000 26,000,000 6,700,000 50,000	100.00 100.00 100.00 100.00 100.00 31.52 100.00 9.84 0.02	$ 172,521 1,240,082 114,547 467,228 44,459 46,034 177,373 76,486 989	$ 10,235 74,869 ( 11,701) ( 96,024) 4,802 ( 99,587) ( 162,276) ( 125,783) ( 131,953)	$ 10,235 74,869 ( 11,701) ( 96,024) 4,473 ( 33,052) ( 162,276) ( 12,129) ( 139)	Note1

Table 10-7

308

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lextar (Singapore) Pte. Ltd. Lextar (Singapore) Pte. Ltd. Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Liang Li Venture Corp.	Lextar Electronics Korea Ltd. Aurora International Lighting Corporation Limited VOGITO INNOVATION CO., LTD. Hexawave, Inc. WellyHertz Electronics Corp. Joint Power Exponent, Ltd. ProLight Opto Technology Corporation Tyntek Corporation ProLight Opto Technology Corporation	Korea Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Sale of LED and aftersales service Sales of lighting Design of lighting Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of switching power supply d l Power IC design and module sales Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Manufacturing and sales of LED packages	$ 3,025 204,136 1,000 147,494 51,400 68,250 313,670 1,288 96,604	$ 3,025 204,136 1,000 147,494 30,000 68,250 303,264 1,288 91,763	22,000 2,000,000 100,000 12,715,000 30,700,000 4,550,000 21,417,000 50,000 6,700,000	100.00 20.00 50.00 31.52 87.46 29.17 31.47 0.02 9.84	$ 4,951 - 3,153 46,030 22,889 33,736 244,491 976 76,486	$ 447 23,848 1,433 ( 99,587) ( 15,283) ( 23,969) ( 125,783) ( 131,953) ( 125,783)	$ 447 - 717 ( 33,050) ( 12,910) ( 14,772) ( 38,283) ( 141) ( 11,787)	Note1 Note1

Table 10-8

309

Initial investment amount Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Liang Li Venture Corp. Hexawave, Inc. Yenrich Technology Corporation Yenrich Technology Corporation ProLight Opto Technology Corporation	Tyntek Corporation WellyWave Semiconductors Inc. ProLight Opto Technology Corporation Tyntek Corporation Prolight Opto Holding Corporation	Taiwan Taiwan Taiwan Taiwan Seychelles	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Professional investment	$ 1,293 49,000 - - 4,402	$ 1,293 49,000 27,366 1,324 4,402	50,000 4,363,065 - - 150,000	0.02 29.27 0.00 0.00 100.00	$ 982 41,771 - - ( 2,296)	($ 131,953) ( 52,839) ( 125,783) ( 131,953) ( 2,617)	($ 137) ( 23,621) ( 2,027) ( 96) ( 2,617)	註1 Note1

Table 10-9

310

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Prolight Opto Holding Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp.	ProLight Opto Technology Corporation Lextar Electronics (Chuzhou) Corp. Chuzhou Bwin Technology Corp. Chuzhou Bwin Technology Corp.	Seychelles China China China	Professional investment Manufacturing and sales of LED wafers, chips, packages, lights, and modules Developing, manufacturing, sales of metal and plastic technical products. Developing, manufacturing, sales of metal and plastic technical products.	$ 4,403 3,094,825 130,726 244,748	$ 4,403 3,094,825 130,726 -	150,000 cash RMB700,000,000 cash RMB29,000,000 cash RMB66,400,000	100.00 100.00 29.00 66.40	($ 2,296) 3,691,002 63,524 194,200	($ 2,617) 272,807 ( 104,578) ( 104,578)	($ 2,617) 272,807 ( 49,694) ( 43,285)

Note1: The group holds two seats on the Board of Directors, which indicates that the Group has significant influence over the investee. Accordingly, the Group listed the investee as an associate.

Table 10-10

311

Table 11

ENNOSTAR INC. AND SUBSIDIARIES

Information on investments in Mainland China

Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the year ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2023	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Episky Corporation (Xiamen) Ltd. United LED Shan Dong Corporation Epicrystal Corporation (Changzhou) Ltd. Luxlite (Shenzhen) Corporation Limited Bridgelux Optelectronice (Xiamen) Co,.Ltd.	Developing, manufacturing and sales of LED packages, modules and related applications Manufacturing and sales of LED chips Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers and chips Sales of LED chips Manufacturing and sales of LED wafers, chips, packages and modules	$ 1,766,000 2,124,096 2,404,500 4,494,125 96,430 7,785,966	1 2 2 2 2 2	$ 525,815 2,124,096 1,824,844 3,423,550 48,687 1,461,593	$ 147,045 - - - - -	$ 89,432 - - - - -	$ 583,428 2,124,096 1,824,844 3,423,550 48,687 1,461,593	($ 56,109) ( 288,026) ( 6,803) ( 255,482) - -	33.63 100.00 74.86 76.95 0.00 18.77	($ 21,300) ( 288,026) ( 5,093) ( 196,605) - -	$ 495,255 1,954,886 271,248 3,301,755 - 1,691,177	$ - - - - 57,480 -	2(3)、7 2(3) 2(3) 2(1) 2(1) 2(3)

Table 11-1

312

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the year ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2023	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
APT Electronics Co., Ltd. China Crystal Technologies Co.,Ltd. Ufeco Technology Inc. Huarui (Huizhou) Co., Ltd. Ningbo Formosa Epitaxy Incorporation Jiangsu Canyang Optoelectronics Ltd.	Developing, manufacturing and sale of LED extension and chip, module and light instrument Developing, manufacturing and sale of gallium arsenide unit crystal and chips Developing, manufacturing and sale of LED application products Research and development, manufacturing and sale of LED packaging; research and development, manufacturing and sale of backlight module, lighting modules and accessories Sales of LED chips Manufacturing and sales of LED wafers and chips	$ 1,854,198 891,131 75,048 479,839 6,754 5,902,624	3 2 2 2 2 2	$ 296,108 96,084 7,818 215,687 56,843 2,576,953	$ - - - - - 15,744	$ - - - - - - Table 11-2	$ 296,108 96,084 7,818 215,687 56,843 2,592,697	$ - - - - - 67,667	11.69 8.97 - - - 97.81	$ - - - - - 66,185	$ - - - - - 1,697,687	$ - - - - - -	2(3) 2(3) 2(3) 2(3) 2(3) 2(3)

313

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the year ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2023	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Lextar Electronics (Suzhou) Corp. Lextar Electronics (Xiamen) Co.,Ltd. Shanghai Welight Electronic Co., LTD.	Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of LED packages and modules Wholesale and export and import of LED and related electronic products	$ 3,722,205 32,759 4,695	2 2 2	$ 3,585,860 32,759 4,695	$ - - -	$ - 32,759 -	$ 3,585,860 - 4,695	$ 231,556 155 ( 2,617)	100.00 - 51.15	$ 231,556 155 ( 2,617)	$ 3,827,342 - ( 2,242)	$ - - -	2(2) 2(3)、6 2(2)

Table 11-3

314

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2023	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
ENNOSTAR Inc. Epistar Corporation Lextar Electronics Corporation	$ 436,383 $ 12,694,097 $ 3,737,600	$ 306,962 $ 13,827,776 $ 4,198,743	$ 47,374,174 $ 17,462,412 $ 9,704,674

Note 1: The investments are classified in three types; they are numbered as follows:

1. Direct investment in Mainland China companies;

2. Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

3. Other ways.

Note 2: Investment income or loss in this period:

The bases for recognition of investment income or loss are classified into four types; they are numbered as follows:

1. The financial statements that are audited by the international accounting firm which has a cooperative relationship with the R.O.C. accounting firm;

2. The financial statements that are audited by the R.O.C. parent company’s independent auditors;

3. The financial statements that are not audited by the independent auditors;

4. Others.

Note 3: The amount disclosed was based on Investment Commission, MOEA Regulation No. 09704604680 announced on August 29, 2008.

Note 4: The numbers in the table shall be expressed in NTD. Foreign currencies shall be translated into NTD at the exchange rate prevailing on the financial reporting date.

Note 5: The ‘amounts’ are expressed in thousands of New Taiwan dollars.

Note 6:Lextar Electronics (Xiamen) Co., Ltd. had applied for deregistration in January 2023 and remitted the residual property amounting to USD 297,928.34 to LEXTAR (SINGAPORE) PTE. LTD. in Singapore, an investee in the third area. Note 7: In September 2023, Yenrich Technology Corporation transferred all the equity interests in LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. to ENNOSTAR Inc. Pursuant to the Jing-Shen-II-Zi Letter No.11200120910 on September 11, 2023, the original approval of the investment of Yenrich Technology Corporation was cancelled as the transfer of LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. was implemented and approved by the Investment Commission. ENNOSTAR Inc. acquired the equity interests in EADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. in the amount of NT$ 306,962 thousand, which was the investment amount of Yenrich Technology Corporation as originally approved by the Investment Commission.

Table 11-4

315

Table 12

ENNOSTAR INC. AND SUBSIDIARIES

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

Year ended December 31, 2023

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	(payable)	(payable)	endorsements/guarantees or	endorsements/guarantees or		Financing	Financing		Others
	Amount	%	Amount	%	Balance at December 31,2023	%	Balance at December 31,2023	Purpose	Maximum balance during the year ended December 31, 2023	Balance at December 31, 2023	Interest rate	Interest during the year ended December 31, 2023
Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics (Chuzhou) Corp.	$ 328,416 925,959 ( 139,305) ( 228,295) ( 538,180) ( 1,807,205)	3.02 8.52 (1.28) (2.10) (4.95) (30.48)	$ - 30,455 - - - -	- 1.91 - - - -	$ 230,861 545,910 ( 35,999) ( 57,876) ( 320,621) ( 968,433)	0.45 1.06 (0.07) (0.11) (0.62) (7.14)	$ - - - - - -	- - - - - -	$ - 69,342 - - - -	$ - - - - - -	- - - - - -	$ - - - - - -	- - - - - -

Note 1: Disclosure of the transactions over 100 million New Taiwan dollars only

Table12-1

316

ENNOSTAR INC. AND SUBSIDIARIES Major Shareholders Information December 31, 2023

Table 13

Shareholding	Shareholding
NumberofSharesHeld	ShareholdingRatio
93,568,898	12.42

Major Shareholders AUO Corporation Table13-1

317

Appendix 5

INDEPENDENT AUDITORS’ REPORT

PWCR23000391

To the Board of Directors and Shareholders of ENNOSTAR Inc.

Opinion

We have audited the accompanying parent company only balance sheets of ENNOSTAR Inc. (the “Company’’)as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other independent auditors, as described in the other matters section of our report, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audit in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the parent company only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with the these requirements. We believe that the audit evidence we have obtained is

318

sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters in relation to the parent company only financial statements for the year ended December 31, 2023 are outlined as follows:

Investments accounted for using equity method-evaluation of inventories

Description

The subsidiaries of the Company is primarily engaged in manufacturing and sales of LED wafers, chips, packages and modules. Due to rapid technological developments, short product lifespans and frequent fluctuations of market prices, the risk of decline in market value and obsolescence for inventories is high. The subsidiaries of the Company evaluates net realized values for inventories which aged over a specific period of time and specific obsolete inventories in order to provide allowance for valuation loss. Since the identification of the above obsolete inventories and their respective net realizable values are subject to management’s judgment, it was identified as one of the key audit matters.

How our audit addressed the matter

Our key audit procedures performed in respect of the above included the following:

1. Obtained an understanding of the Company and subsidiaries’s operations and the nature of its industry and interviewed with management to understand the probability of future sales for those out-of-date inventories and to evaluate the reasonableness of allowance for valuation loss.

319

1. Obtained and validated the accuracy of the detailed listings of inventories aged over a specific period of time and specific obsolete inventories. Validated information of historical sales and discounts for those obsolete inventories to assess the reasonableness of policies in providing allowance for inventory valuation loss.

Investments accounted for using equity method-impairment assessment of property, plant and equipment and goodwill

Description

The subsidiary of the Company, Epistar Corporation, and its subsidiaries measure the recoverable amounts of idle property, plant, and equipment at fair value less disposal costs; while operating property, plant, and equipment, as well as goodwill, are assessed at their in-use values. Epistar Corporation and its subsidiaries evaluate impairment of property, plant, and equipment, as well as goodwill, based on the aforementioned recoverable amounts. The assessment of the in-use value of property, plant, and equipment, as well as goodwill, involves estimating future cash flows and determining discount rates. The assumptions used in forecasting future cash flows and their estimated results have a significant impact on the assessment of the in-use value of property, plant, and equipment, as well as goodwill. Therefore, we consider this a key audit matter.

How our audit addressed the matter

We obtained an external expert appraisal report provided by the subsidiary, Epistar Corporation, and its subsidiaries, for the idle property, plant, and equipment. We assessed the valuation method used by the expert and the reasonableness of the fair value. Additionally, for the recoverable amounts of operating property, plant, and equipment, as well as goodwill, the main procedures performed are outlined as follows:

1. Discussing with management to understand the subsidiary, Epistar Corporation, and its subsidiaries’ process for estimating future cash flows, and comparing future cash flows with the operational plan approved by the board of directors for consistency.

2. Discussing the operational plan with management to understand its product strategy

320

and execution status.

1. Assessing the reasonableness of the assumptions used by management to estimate future cash flows, including expected growth rates and gross profit margins. Also, evaluating the reasonableness of discount rate parameters, including the risk-free rate of return used in calculating the cost of equity capital, industry risk coefficients, and long-term market returns.

Other matter – Audit by Other Independent Auditors

We did not audit the 2023 and 2022 financial statements of certain equity investments accounted for under the equity method. Those financial statements were audited by other independent auditors, whose reports thereon were furnished to us, and our opinion expressed herein, insofar as it relates to the amounts included in the parent company only financial statements and certain information disclosed in Note 13 relative to these investments, was based solely on the reports of the other independent auditors. These equity investments amounted to NT$2,630,767 thousand and NT$2,049,834 thousand, constituting 5.53% and 3.75% of the parent company only total assets as of December 31, 2023 and 2022, and their comprehensive loss (including share of loss of associates and joint ventures accounted for under equity method and share of other comprehensive income/(loss) of associates and joint ventures accounted for under equity method) amounted to NT$270,050 thousand and NT$139,085 thousand, constituting 3.84% and 67.06% of the parent company only comprehensive gain for the years then ended.

Responsibilities of management and those charged with governance for the parent company only financial statements

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

321

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

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

Auditor’s responsibilities for the audit of the parent company only financial statements

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

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

1. Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement

resulting from fraud is higher than for one resulting from error, as fraud may involve

322

collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

1. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

2. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

3. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

4. Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

5. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

323

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

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

Li, Tien-Yi

Chou, Chien-Hung

For and on behalf of PricewaterhouseCoopers, Taiwan February 23, 2024

------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or auditing standards generally[accepted in the Republic of China, and their applications in practice. ]

As the financial statements are the responsibility of the management, PricewaterhouseCoopers, Taiwan cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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ENNOSTAR INC.

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2023 December 31, 2022 Notes AMOUNT % AMOUNT % 6(1) $ 602,547 1 $ 690,933 1 196 - 59 - 7 318,880 1 402,738 1 14,873 - 12,793 - 3 - 4 - 936,499 2 1,106,527 2 6(2) and 8 120,000 - - - 6(3) 46,437,729 98 53,490,974 98 6(4) 10,717 - 10,978 - 25,005 - 25,408 - 46,593,451 98 53,527,360 98 $ 47,529,950 100 $ 54,633,887 100 6(5) $ - - $ 100,000 - 130,036 - 97,222 - 7 4,093 - 3,270 - 18,930 - 27,952 - 2,709 - 1,166 - 155,768 - 229,610 - 8 - 8 - 155,776 - 229,618 - 6(7) 7,529,405 16 7,547,840 14 6(8) 46,447,060 98 46,421,664 85 6(9) 216,945 - 216,945 1 154,927 - 290,598 1 ( 6,814,704) ( 14) 147,022 - 6(10) ( 24,296) - 75,010 - 6(7) ( 135,163) - ( 294,810) ( 1) 47,374,174 100 54,404,269 100 $ 47,529,950 100 $ 54,633,887 100
Current assets 1100 Cash and cash equivalents 1200 Other receivables 1210 Other receivables - related parties 1410 Prepayments 1470 Other current assets 11XX Current Assets Non-current assets 1535 Non-current financial assets at amortised cost 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets Liabilities and Equity
Current liabilities 2100 Short-term borrowings 2200 Other payables 2220 Other payables-related parties 2230 Current tax liabilities 2300 Other current liabilities 21XX Current Liabilities Non-current liabilities 2600 Other non-current liabilities 2XXX Total Liabilities Equity Share capital 3110 Share capital - common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings(Accumulated deficit) Other equity interest 3400 Other equity interest 3500 Treasury shares 3XXX Total equity 3X2X Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

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ENNOSTAR INC.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(3)(11) and 7 $ 336,750 100 $ 244,729 100 ( 7,110,131 ) ( 2111) ( 179,138) ( 73) ( 6,773,381 ) ( 2011) 65,591 27 ( 6,773,381 ) ( 2011) 65,591 27 ( 6,773,381 ) ( 2011) 65,591 27 11,094 3 7,261 3 673 - 1,969 1 56 - 195 - ( 158 ) - ( 718) - 11,665 3 8,707 4 ( 6,761,716 ) ( 2008) 74,298 31 6(14) ( 20,962 ) ( 6) ( 36,274) ( 15) ($ 6,782,678 ) ( 2014) $ 38,024 16 $ 33,525 10 ($ 233,252) ( 95) 6(14) ( 42,586 ) ( 13) ( 39,989) ( 17) ( 9,061 ) ( 3) ( 273,241) ( 112) ( 251,091 ) ( 75) 443,043 181 6(14) 6,262 2 ( 428) - ( 244,829 ) ( 73) 442,615 181 ($ 253,890 ) ( 76) $ 169,374 69 ($ 7,036,568 ) ( 2090) $ 207,398 85 6(15) ($ 9.02) $ 0.05 ($ 9.02) $ 0.05

4000 Sales revenue 5000 Operating costs 5900 Operating margin 5950 Net operating margin 6900 Operating (loss) profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7000 Total non-operating income and expenses 7900 (Loss) profit before income tax 7950 Income tax expense 8200 (Loss) profit for the year Other comprehensive (loss) income Components of other comprehensive income that will not be reclassified to profit or loss 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive loss that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8380 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive (loss) income that will be reclassified to profit or loss 8300 Other comprehensive (loss) income 8500 Total comprehensive (loss) income (Loss) earnings per share (NT$) 9750 Total basic (loss) earnings per share 9850 Total diluted (loss) earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

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ENNOSTAR INC.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

2022 Balance at January 1,2022 Profit for the year Other comprehensive income(loss) for the year Total comprehensive income(loss) Appropriation of 2021 earnings Legal reserve Special reserve Cash dividends Proceeds from issuance of share capital Expiration of restricted employee stock Changes in ownership interests in subsidiaries accounted for using equity method Net change in equity of associates and joint ventures Difference between consideration and carrying amount of subsidiaries acquired and disposed Proceeds from disposal of financial assets at fair value through other comprehensive income Balance at December 31,2022 2023 Balance at January 1,2023 Loss for the year Other comprehensive income (loss) for the year Total comprehensive loss Appropriation of 2022 earnings Reversal of special reserve Decrease in treasury shares Changes in ownership interests in subsidiaries accounted for using equity method Net change in equity of associates and joint ventures Difference between consideration and carrying amount of subsidiaries acquired and disposed Empolyee stock ownership trust cancellation return Proceeds from disposal of financial assets at fair value through other comprehensive income Balance at December 31,2023	Notes		Share capital - common stock		Capital surplus				Retained earnings				Other equityinterest	Other equityinterest	Other equityinterest		Treasuryshares		Total equity
							Legal reserve		Special reserve		Unappropriated retained earnings (accumulated deficit)	d	Cumulative translation ifferences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(9) 6(7) 6(8) 6(8) 6(8) 6(8) 6(9)(10) 6(7) 6(8) 6(8) 6(8) 6(8) 6(9)(10)		$ 6,852,514 - - - - - - 700,000 ( 4,674 ) - - - - $ 7,547,840 $ 7,547,840 - - - - ( 18,435 ) - - - - - $ 7,529,405		$ 43,830,638 - - - - - - 2,927,400 4,674 ( 257,645 ) 104,634 ( 188,037 ) - $ 46,421,664 $ 46,421,664 - - - - ( 141,212 ) 87,548 59,445 19,564 51 - $ 46,447,060		$ - - - - 216,945 - - - - - - - - $ 216,945 $ 216,945 - - - - - - - - - - $ 216,945		$ - - - - - 290,598 - - - - - - - $ 290,598 $ 290,598 - - - ( 135,671 ) - - - - - - $ 154,927		$ 2,169,446 38,024 19,477 57,501 ( 216,945 ) ( 290,598 ) ( 1,365,881 ) - - - - ( 45,848 ) ( 160,653 ) $ 147,022 $ 147,022 ( 6,782,678 ) 6,604 ( 6,776,074 ) 135,671 - ( 160,135 ) - - - ( 161,188 ) ($ 6,814,704 )		($ 406,535 ) - 442,615 442,615 - - - - - - - 3 - $ 36,083 $ 36,083 - ( 244,829 ) ( 244,829 ) - - - - - - - ($ 208,746 )		$ 170,992 - ( 292,718 ) ( 292,718 ) - - - - - - - - 160,653 $ 38,927 $ 38,927 - ( 15,665 ) ( 15,665 ) - - - - - - 161,188 $ 184,450		($ 294,810 ) - - - - - - - - - - - - ($ 294,810 ) ($ 294,810 ) - - - - 159,647 - - - - - ($ 135,163 )		$ 52,322,245 38,024 169,374 207,398 - - ( 1,365,881 ) 3,627,400 - ( 257,645 ) 104,634 ( 233,882 ) - $ 54,404,269 $ 54,404,269 ( 6,782,678 ) ( 253,890 ) ( 7,036,568 ) - - ( 72,587 ) 59,445 19,564 51 - $ 47,374,174

The accompanying notes are an integral part of these parent company only financial statements.

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ENNOSTAR INC.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES (Loss) profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation Interest expense Interest income Share of loss (profit) of associates and joint ventures accounted for using equity method Compensation distributed to subsidiaries’ employees Changes in operating assets and liabilities Changes in operating assets Other receivables-related parties Prepayments Other current assets Changes in operating liabilities Other payables Other payables-related parties Other current liabilities Cash inflow (outflow) generated from operations Dividend received Interest received Interest paid Income tax paid Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Increase in current financial assets at amortised cost Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Decrease (increase) in refundable deposits Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term loans Decrease in guarantee deposits received Proceeds from issuance of share capital Cash dividends paid Employee stock ownship trust cancellation return Net cash flows (used in) from financing activities Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31 Notes 2023 2022 ($ 6,761,716 ) $ 74,298 6(4)(12) 1,395 895 158 718 ( 11,094 ) ( 7,261 ) 6(3) 6,781,735 ( 67,110 ) - ( 1,494 ) 83,858 ( 343,174 ) ( 2,080 ) ( 10,294 ) 1 ( 4 ) 34,137 ( 198,537 ) 823 ( 43,455 ) 1,543 378 128,760 ( 595,040 ) 731,003 1,881,651 10,957 7,202 ( 158 ) ( 718 ) ( 29,983 ) ( 8,312 ) 840,579 1,284,783 ( 120,000 ) - ( 706,962 ) ( 2,814,135 ) 6(16) ( 2,457 ) ( 9,984 ) 403 ( 25,000 ) ( 829,016 ) ( 2,849,119 ) 6(17) ( 100,000 ) ( 50,000 ) 6(17) - ( 2 ) - 3,627,400 - ( 1,365,881 ) 51 - ( 99,949 ) 2,211,517 ( 88,386 ) 647,181 690,933 43,752 $ 602,547 $ 690,933

The accompanying notes are an integral part of these parent company only financial statements.

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ENNOSTAR INC.

NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

Ennostar Inc. (the “Company”) was incorporated on January 6, 2021. The Company’s share have been traded on the Taiwan Stock Exchange in the Republic of China since the date of its incorporation. The share exchange transaction, wherein the Company was established by Epistar Corporation ( “Epistar”) and acquired all issued and outstanding ordinary shares of Epistar and Lextar Electronics Corporation (“ Lextar”) by way of share exchange, has been approved both at Epistar’s board meeting on June 18, 2020 and special shareholders’ meeting on August 7, 2020. The share exchange was conducted at an exchange ratio of 1 ordinary share of Epistar and Lextar for 0.5 and 0.275 ordinary share of the Company respectively. As a result, Epistar and Lextar became wholly-owned subsidiaries of the Company on January 6, 2021, and both of Epistar’s and Lextar’s ordinary shares have been delisted while the ordinary shares of the Company were listed starting from the same date under the symbol “3714”. The Company was mainly engaged in the management of investee business.

1. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These parent company only financial statements were authorized for issuance by the Board of Directors on February 23, 2024.

1. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS[®] ”) Accounting Standards as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by FSC and became effective from 2023 are as follows:

(“FSC”) New standards, interpretations and amendments endorsed by FSC and are as follows:	became effective from 2
New Standards,Interpretations and Amendments	Effective date Announced by International Accounting Standards Board(IASB)
Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’ Amendments to IAS 12, ‘International tax reform - pillar two model rules’	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

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

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(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by FSC effective from 2024 are as follows:

Effective date Announced by New Standards, Interpretations and Amendments IASB Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’ January 1, 2024 Amendments to IAS 1, ‘Classification of liabilities as current or nonJanuary 1, 2024 current’ Amendments to IAS 1, ‘Non-current liabilities with covenants’ January 1, 2024 Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’ January 1, 2024 The above standards and interpretations have no significant impact to the Company’s financial condition and financial performance based on the Company’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

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

Effective date Announced by New Standards, Interpretations and Amendments IASB Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets To be determined by between an investor and its associate or joint venture’ IASB IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendments to IFRS 17, ‘Insurance contracts’ January 1, 2023 Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – January 1, 2023 comparative information’ Amendments to IAS 21, ‘Lack of exchangeability’ January 1, 2025

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

(1) Compliance statement

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

• (2) Basis of preparation

• A. Except for the following items, these parent company only financial statements have been prepared under the historical cost convention:

  • (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.

• B. The preparation of financial statements in compliance with International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations

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as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

• (3) Foreign currency translation

• Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional currency.

Foreign currency transactions and balances

• A. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.

• B. Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• C. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss as part of the fair value gain or loss. Nonmonetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• D. All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within “other gains and losses”.

• (4) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

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

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

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

  • (b) Liabilities arising mainly from trading activities;

  • (c) Liabilities that are to be settled within twelve months from the balance sheet date;

  • (d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known

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amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

• (6) Financial asset at amortised cost

• A. Financial assets at amortised 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 assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

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

• (7) Derecognition of financial assets

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

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

• B. The contractual rights to receive cash flows from the financial assets have been transferred and the Company has transferred substantially all risks and rewards of ownership of the financial assets.

• C. The Company neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

• (8) Investments accounted for using equity method/ subsidiaries and assoaciates

• A. Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

• B. Inter-company transactions, balances and unrealised gains or losses on transactions between companies within the Company are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• C. The Company’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company continues to recognise losses proportionate to its ownership.

• D. Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity.

• E. When the Company loses control of a subsidiary, the Company remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or

332

liabilities were disposed of. That is, when the Company loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• F. Associates are all entities over which the Company has significant influence but no control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using equity method and are initially recognized at cost.

• G. The Company’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• H. When changes in an associate’s equity that are not recognized in profit or loss or other comprehensive income of the associate and such changes does not affect the Company’s ownership percentage of the associate, the Company recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• I. Unrealized gains on transactions between the Company and its associates are eliminated to the extent of the Company’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Company.

• J. In the case that an associate issues new shares and the Company does not subscribe or acquire new shares proportionately, which results in a change in the Company’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for using equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Company’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• K. Upon loss of significant influence over an associate, the Company remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognised in profit or loss.

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

• M. When the Company disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, the amounts previously recognised as capital surplus in relation to the associate are transferred to profit or loss proportionately.

• N. Pursuant to the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” profit (loss) of the current period and other comprehensive income in the parent

333

company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

• (9) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

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

The estimated useful lives of property, plant and equipment are as follows:

Office equipment 2 ~ 20 years Leasehold improvements 3 ~ 15 years

(10) Impairment of non-financial assets

• A. The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

(11) Borrowings

• A. Borrowings comprise of long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

334

• B. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan 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 drawn-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

• (12) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

• (13) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• C. Employees’ compensation and directors’ remuneration

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

• (14) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year when the stockholders resolve to retain the earnings.

• C. Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates and laws that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D. 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.

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(15) Share capital

  - A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

  - B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

• (16) Dividends

  • Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s Board of Directors. Cash dividends are recorded as liabilities.

• CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

• (1) Critical judgments in applying the Company’s accounting policies None.

• (2) Critical accounting estimates and assumptions

• (1)Investments accounted for using equity method-evaluation of inventories

  • As inventories are stated at the lower of cost and net realizable value, the subsidiaries of the Company must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the subsidiaries of the Company evaluates the amounts of obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. Such an evaluation of inventories is principally based on the demand for the products within the specified period in the future. Therefore, there might be material changes to the evaluation. As of December 31, 2023, the carrying amount of inventories of the subsidiaries of the Company was $4,216,492.

• (2)Investments accounted for using equity method-evaluation of impairment loss of goodwill The evaluation of impairment loss of goodwill relies on the subjective judgment of the subsidiaries of the Company, including identifying cash-generating units and allocating assets, liabilities and goodwill to relevant cash-generating units, and determining the recoverable amount of the relevant cash-generating units. For the assessment of goodwill impairment, please refer to the Note 6(11).

6. DETAILS OF SIGNIFICANT ACCOUNTS

• (1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Demand deposits Time deposits Bonds sold under repurchase agreement	December31,2023 299,476 $ 303,071 - 602,547 $	December31,2022
		150,933 $ 500,000 40,000
		690,933 $

The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

336

(2) Financial assets at amortised cost

	Items December31,2023	December 31, 2022	December 31, 2022
Non-current items:
Time despoits	120,000 $	$	-

inancial assets at amortised cost Items December31,2023 December 31, 2022 on-current items: Time despoits 120,000 $ - $	inancial assets at amortised cost Items December31,2023 December 31, 2022 on-current items: Time despoits 120,000 $ - $	inancial assets at amortised cost Items December31,2023 December 31, 2022 on-current items: Time despoits 120,000 $ - $	inancial assets at amortised cost Items December31,2023 December 31, 2022 on-current items: Time despoits 120,000 $ - $
A. Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed
below:
	Year end	Year end
	December31,2023	December31,	2022
Interest income	489 $	$	-

• B. As of December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Company was $120,000 and $0, respectively.

• C. Details of the Company’s financial assets at amortised cost pledged to others as collateral are provided in Note 8.

• D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Company’s investments in certificates of deposit are financial institutions with high credit quality, so the Company expects that the probability of counterparty default is remote.

(3) Investments accounted for using equity method

default is remote. Investments accounted for using equity method
Subsidiaries: Epistar Corporation Lextar Electronics Corporation Amengine Corporation Harvestar Investment Corp. Calystar Investment Corp. Precistar Investment Corp. Praistar Investment Corp. Manastar Investment Corp. Unikorn Semiconductor Corporation Associates: Tyntek Corporation GCS Holdings, Inc. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd.	December31,2023 32,871,412 $ 11,015,335 14,494 706,482 366,250 49,086 27,542 974 107,389 45,158,964 622,100 $ 309,374 347,291 1,278,765 46,437,729 $	December31,2022
		39,769,781 $ 11,152,889 25,747 849,744 409,063 49,004 49,004 981 179,217
		52,485,430
		594,097 $ 411,447 -
		1,005,544
		53,490,974 $

A. Subsidiaries

• Information on subsidiaries is provided in Note 4(3) of the 2023 consolidated financial statements.

• B. Associates

The carrying amount of the Company’s interests in all individually immaterial associates and the

337

Company’s share of the operating results are summarized below:

As of December 31, 2023 and 2022, the carrying amount of the Company’s individually immaterial associates amounted to $1,278,765 and $1,005,544, respectively.

Atrribute to the Company: Loss for the period from continuing operations Other comprehensive income Total comprehensive loss	Year ended December 31,2023	Year ended December 31,2022
	82,588) ($ 7,252 75,336) ($	81,684) ($ 16,565 65,119) ($

• C. The investment (loss) gain from equity method investees for the years ended December 31, 2023 and 2022 amounted to ($6,781,735) and $67,110, respectively.

• D. The other comprehensive gain(loss) from equity method investees for the years ended December 31, 2023 and 2022 amounted to ($253,890) and $169,374, respectively.

• E. The fair value of the Company’s material associates with quoted market prices is as follows:

December31,2023 Tyntek Corporation 442,661 $ GCS Holdings, Inc. 288,896 731,557 $	December31,2022
	395,063 $ 352,092
	747,155 $

(4) Property, plant and equipment

At January 1, 2023 Cost Accumulated depreciation and impairment 2023 Opening net book amount at January 1 Additions Depreciation charge Closing net book amount at December 31 At December 31, 2023 Cost Accumulated depreciation and impairment	Office equipment	Leasehold improvements Total 11,062 $ 11,944 $ 843) ( 966) ( 10,219 $ 10,978 $ 10,219 $ 10,978 $ 637 1,134 1,178) ( 1,395) ( 9,678 $ 10,717 $ 11,699 $ 13,078 $ 2,021) ( 2,361) ( 9,678 $ 10,717 $	Total
	882 $ 123) ( 759 $ 759 $ 497 217) ( 1,039 $ 1,379 $ 340) ( 1,039 $
			10,717 $

338

								Construction in	Construction in
									progress and
			Office			Leasehold			equipment to
			equipment			improvements			be inspected			Total
At January 1, 2022
Cost		$	414			$	4,678	$	5,136		$	10,228
Accumulated depreciation and impairment	(			32)	(		39)		-	(		71)
		$	382			$	4,639	$	5,136		$	10,157
2022
Opening net book amount at January 1		$	382			$	4,639	$	5,136		$	10,157
Additions			468				-		1,248			1,716
Transfer				-			6,384	(	6,384)			-
Depreciation charge	(			91)	(		804)		-	(		895)
Closing net book amount at December 31		$	759			$	10,219	$	-		$	10,978
At December 31, 2022
Cost		$	882			$	11,062	$	-		$	11,944
Accumulated depreciation and impairment	(		123)		(		843)		-	(		966)
		$	759			$	10,219	$	-		$	10,978
Short-term borrowings
December 31, 2023: None.
Type of borrowings			December	31,	2022		Interest rate range Collateral
Bank borrowings
Unsecured borrowings			$	100,000			1.86%			None

(5) Short-term borrowings

(6) Pensions

A. Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• B. The pension costs under the defined contribution pension plans of the Company for the years ended December 31, 2023 and 2022 were $12,066 and $4,001, respectively.

(7) Share capital

A. As of December 31, 2023, the Company’s authorized capital was $15,000,000, consisting of 1,500,000 thousand shares of ordinary stock (including 50,000 thousand shares reserved for employee stock options), and the paid-in capital was $7,547,840 with a par value of $10 (in dollars) per share.

Movements of the Company’s outstanding ordinary shares are as follows (expressed in thousands of shares):

At January 1 Issuance of ordinary shares - private placement Expiration of restricted employee stock At December 31	2023 2022 751,658 682,125 - 70,000 - 467) ( 751,658 751,658

339

• B. The stockholders at their annual stockholders’ meeting on May 31, 2022 adopted a resolution to raise additional cash through private placement with the effective date set on July 8, 2022, which will be used for capital expenditure of constructing/building a 6-inch wafer plant for Micro LEDs and purchasing the equipment related to epitaxy and LED chips, etc. The resolution issue 70,000 thousand shares of ordinary shares at a price of NT$51.82 per share for a total amount of $3,627,400 through private placement and had been registered. Pursuant to the Securities and Exchange Act of the ROC, the common shares raised through the private placement are subject to certain transfer restrictions and cannot be listed on the stock exchange until three years after they have been issued and have applied for retroactive handling of public issuance procedures. Other than these restrictions, the rights and obligations of the ordinary shares raised through the private placement are the same as other issued common shares.

• C. Treasury shares

• (a) Reason for share reacquisition and movements in the number of the Company’s treasury shares are as follows:

re as follows:
Reason for reacquisition	(Unit: share in thousands/ dollars in thousands) At January 1 Issuance of ordinary shares under business combination Increase Decrease At December 31 Bookvalue 1,282 - - 1,282 135,163 $ 1,844 - ( 1,844) - - At January 1 Issuance of ordinary shares under business combination Increase Decrease At December 31 Bookvalue 1,282 - - 1,282 135,163 $ 1,844 - - 1,844 159,647 Year ended December 31, 2022 Year ended December 31, 2023
Held by subsidiaries Redemption shares held by objecting shareholders Reason for reacquisition
Held by subsidiaries Redemption shares held by objecting shareholders

Note ： Effect of conversion under joint share conversion agreement.

• (b) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.

• (c) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.

• (d) Pursuant to the rules governing share repurchase by the Company, treasury shares should be reissued to the employees within three years from the reacquisition date and shares not reissued within the three-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

340

D. Information of the Company’s shares held by subsidiaries as follows:

Lighting Investment Corporation Book value Fair value Epistar Corporation Book value Fair value	December31,2023 1,282 thousand shares 135,163 $ 59,374 $ - - $ - $	December31,2022
		1,282 thousand shares
		135,163 $ 57,386 $ 1,844thousand shares 159,647 $ 82,497 $

(8) Capital surplus

Pursuant to the Company Act, capital surplus, including additional paid-in capital in excess of par and donation, shall be exclusively used to cover accumulated deficit or to issue new stock or cash to shareholders in proportion to their ownership when the Company has no accumulated deficit. However, pursuant to the R.O.C. Securities and Exchange Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stock and donations can be capitalized once a year, provided that the Company has no accumulated deficit and the amount to be capitalized does not exceed 10% of the paid-in capital.

At January 1 Decrease in treasury shares Change in net equity of associates and joint ventures accounted for using equity method Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries accounted for using equity method Employee stock ownership trust cancellation return At December 31			2023
	Treasury share Sharepremium transactions 45,877,291 $ 114,876 $ 112,052) ( 29,160) ( - - - - - 1,037 51 - 45,765,290 $ 86,753 $		Changes in ownership interests in subsidiaries accounted for usingequitymethod 275,200 $ - - 19,564 86,511 - 381,275 $	Change in net equity of associates and joint ventures accounted for using equity method 154,297 $ - 59,445 - - - 213,742 $

341

At January 1 Issuance of ordinary shares - private placement Change in net equity of associates and joint ventures accounted for using equity method Difference between consideration and carrying amount of subsidiaries acquired or disposed Changes in ownership interests in subsidiaries accounted for using equity method Expiration of restricted employee stock At December 31	Treasury share Changes in ownership interests in subsidiaries accounted for Change in net equity of associates and joint ventures accounted for using equity Sharepremium transactions usingequitymethod method 42,894,615 $ 115,823 $ 770,537 $ 49,663 $ 2,927,400 - - - - - - 104,634 7,754 - 195,791) ( - 42,848 947) ( 299,546) ( - 4,674 - - - 45,877,291 $ 114,876 $ 275,200 $ 154,297 $ 2022

(9) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, 10% of current year’s earnings, after paying all taxes and dues and covering prior years’ losses, shall be appropriated as legal reserve until the total equals the issued share capital. Special reserve shall be appropriated or reversed when needed. The remaining earnings along with the prior years’ accumulated unappropriated earnings are considered as distributable earnings, and shall be distributed by the Board of Directors. When issuing new shares, the distribution shall be submitted to the resolution of the Shareholders’ Meeting. If it is in cash, it shall be resolved by the Board of Directors. The distribution shall be based on the proportion of shares held by each shareholder.

• B. The Company appropriates earnings based on the factors such as current and future investment environment, capital needs, domestic and overseas competition and capital budget, along with the consideration of shareholders’ interest and capital adequacy. The appropriation of cash dividends shall not be lower than 10% of the total dividend appropriated to shareholders.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. 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 special reserve is reversed accordingly and could be included in the distributable earnings.

• E. The appropriations of 2023 loss and dividends had been approved in the Board of Directors on February 23, 2024. It was decided to offset the loss with capital surplus and distribute cash dividends of $677,646 (0.9 dollar per share).

• F. The appropriations of 2022 earnings had been approved in the shareholders’ meeting on May 31, 2023, and decided not to distribute cash dividends.

• G. The appropriations of 2021 earnings approved in the shareholders’ meeting on May 31, 2022 are as follows:

342

Legal reserve appropriated Special reserve appropriated Cash dividends distributed	Amount Dividends per share (indollars) 216,945 $ 290,598 $ 1,365,881 $ 2 $ 2021

The abovementioned distribution of earnings for the year of 2021 was in agreement with those amounts proposed by the Board of Directors on February 24, 2022. (10) Other equity items

(10)Other equity items
					2023
			Currencytranslation		Unrealizedgain	or loss		Total
At January 1		$	36,083	$		38,927	$	75,010
Revaluation - gross			-			25,484		25,484
Revaluation - tax			-	(		41,149)	(	41,149)
Disposal of investments in equity
instruments designated at fair value
through other comprehensive income			-			161,188		161,188
Currency translation
–Group	(		251,091)			-	(	251,091)
–Tax on Group			6,262			-		6,262
At December 31	($		208,746)	$		184,450	($	24,296)
					2022
			Currencytranslation		Unrealized gain	or loss		Total
At January 1	($		406,535)	$		170,992	($	235,543)
Revaluation - gross			-	(		256,584)	(	256,584)
Revaluation - tax			-	(		36,134)	(	36,134)
Difference on carrying amounts of
subsidiaries acquired and disposed			3			-		3
Disposal of investments in equity
instruments designated at fair value
through other comprehensive income			-			160,653		160,653
Currency translation
–Group			443,043			-		443,043
–Tax on Group	(		428)			-	(	428)
At December 31		$	36,083	$		38,927	$	75,010
(11)Operating revenue
			Year ended December			Year ended December
				31,2023			31, 2022
Share of gain of associates and	joint		$		-	$		67,110
ventures accounted for using equity		method
Other operating revenue					336,750			177,619
			$		336,750	$		244,729

343

(12) Expenses by nature

Expenses by nature
Employee benefit expenses Employee benefit expenses Depreciation charges on property, plant and equipment Wages and salaries Labor and health insurance expenses Pension costs Other personnel expenses		Year ended December 31,2023 276,800 $ 1,395 $ Year ended December 31,2023		Year ended December 31, 2022
				147,653 $ 895 $ Year ended December 31,2022
		240,020 $ 15,566 12,066 9,148 276,800 $		131,605 $ 8,323 4,001 3,724 147,653 $

(13) Employee benefit expenses

• A. According to the Articles of Incorporation of the Company, the Company shall distribute employees’ compensation and directors’ remuneration based on 0.1%~15% and no higher than 2% of the distributable profit of the current period, respectively. If the Company has accumulated deficit, earnings should be reserved to cover losses.

• B. For the year ended December 31, 2023, the employees’ compensation and directors’ remuneration was not estimated, because the Company incurred a loss during this period. For the year ended December 31, 2022, the employees’ compensation was accrued at $3,952 and the directors’ remuneration was accrued at $790, respectively.

• C. The Company's Board of Directors, on February 23, 2023, resolved not to distribute directors' remuneration for 2022. The difference of $790 between the director's remuneration account and the proposed distribution amount has been listed as profit and loss for 2023.

• D. Information about employees’ compensation and directors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

• (14) Income tax

• A. Income tax expense

  • (a) Components of income tax expense :

website of the Taiwan Stock Exchange. e tax ome tax expense Components of income tax expense :
Current tax on profits for the period Prior year income tax (overestimation) underestimation Tax on undistributed surplus earnings Income tax expense	Year ended December 31,2023	Year ended December 31,2022
	25,849 $ 6,513) ( 1,626 20,962 $	16,394 $ 5,079 14,801 36,274 $

(b) The income tax relating to components of other comprehensive income is as follows:

344

==> picture [483 x 460] intentionally omitted <==

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

Year ended December Year ended December
31, 2023 31, 2022
Change in fair value of financial assets $ 40,722 $ 36,629
at fair value through other
comprehensive income
Currency translation differences ( 1,725) 168
Share of other comprehensive income of ( 235)
( 4,110)
associates
Remeasurement of defined benefit
obligations 1,437 3,855
Total $ 36,324 $ 40,417
B. Reconciliation between income tax expense and accounting profit
Year ended December Year ended December
31, 2023 31, 2022
-
Tax calculated based on profit before tax $ $ 14,860
and statutory tax rate
Expenses disallowed & tax exempt income by 21,859 14,958
tax regulation
Temporary differences not recognised as 3,990 ( 13,424)
deferred tax assets
Prior year income tax (overestimation) ( 6,513)
5,079
underestimation
Tax on undistributed surplus earnings 1,626 14,801
Income tax expense $ 20,962 $ 36,274
C. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as
follows ： None.
D. The amounts of deductible temporary difference that are not recognised as deferred tax assets are
as follows:
December 31, 2023 December 31, 2022
Deductible temporary differences $ 19,963 $ 67,116
----- End of picture text -----

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

345

(15) Earnings (loss) per share

==> picture [505 x 100] intentionally omitted <==

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

Year ended December 31, 2023
Weighted average
number of outstanding
ordinary shares Loss per share
Amount after tax (share in thousands) (in dollars)
Basic loss per share
Loss for the period ($ 6,782,678) 751,658 ($ 9.02)
----- End of picture text -----

	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) Basic loss per share Loss for the period 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($	number of outstanding ordinary shares Loss per share Amount after tax (share in thousands) (in dollars) 6,782,678) ($ 751,658 9.02) ($
(16) (17)	Supplemental cash flow information Investing activities with partial cash payments Changes in liabilities from financing activities Weighted average number of outstanding ordinary shares Earnings per share Amount after tax (share in thousands) (in dollars) Basic earnings per share Profit for the period 38,024 $ 715,603 0.05 $ Diluted earnings per share Profit for the period 38,024 $ 715,603 Assumed conversion of all dilutive potential ordinary shares Employees' compensation - 496 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 38,024 $ 716,099 0.05 $ Year ended December31,2022 Year ended December 31,2023 Year ended December 31,2022 Purchase of property, plant and equipment 1,134 $ 1,716 $ Add: Opening balance of payable on equipment 1,733 10,001 Less: Ending balance of payable on equipment 410) ( 1,733) ( Cash paid during the period 2,457 $ 9,984 $ Short-term borrowings Guarantee deposits received Liabilities from financing activities- gross At January 1 100,000 $ 8 $ 100,008 $ Changes in cash flow from financing activities 100,000) ( - 100,000) ( At December 31 - $ 8 $ 8 $ 2023	Year ended December31,2022
									Earnings per share (in dollars)
									0.05 $
									0.05 $
				$ ( $			1,134 1,733 410) 2,457 2023	1,716 $ 10,001 1,733) ( 9,984 $ Liabilities from financing activities- gross 100,008 $ 100,000) ( 8 $
					$
	At January 1 Changes in cash flow from financing activities At December 31
			Short-term borrowings				Guarantee deposits received
			100,000 $ 100,000) ( - $				8 $ -
							8 $

346

7.

RELATED PARTY TRANSACTIONS (1)Names of related parties and relationship (2)Significant related party transactions and balances A. Operating revenue: Service agreements are all signed with related parties, so there is no comparable object. B. Receivables from related parties: The other receivables from related parties mainly from service. Receivables are not pledged to others and without interest and allowance for uncollectible accounts receivable. C. Payables from related parties: Short-term borrowings Guarantee deposits received Liabilities from financing activities- gross At January 1 150,000 $ 10 $ 150,010 $ Changes in cash flow from financing activities 50,000) ( 2) ( 50,002) ( At December 31 100,000 $ 8 $ 100,008 $ 2022 Names of relatedparties Relationship with theCompany Epistar Corporation Subsidiary of the Company Lextar Electronics Corporation Subsidiary of the Company Amengine Corporation Subsidiary of the Company Unikorn Semiconductor Corporation Subsidiary of the Company Yenrich Technology Corporation Subsidiary of the Company Epistar Corporation 218,261 $ 128,117 $ Lextar Electronics Corporation 107,139 47,515 Other subsidiaries 11,350 1,987 Total 336,750 $ 177,619 $ Year ended December 31,2023 Year ended December 31,2022 December31,2023 December31,2022 Other receivables: Epistar Corporation 79,153 $ 37,474 $ Lextar Electronics Corporation 36,185 13,254 Unikorn Semiconductor Corporation 3,504 1,856 Other subsidiaries 38 154 118,880 $ 52,738 $ December31,2023 December31,2022 Other payables: Epistar Corporation 4,035 $ 3,252 $ Lextar Electronics Corporation 58 18 4,093 $ 3,270 $

(1) (2)

347

D. Prepaid expense

D. Prepaid expense
E. Loans to /from related parties: (a) Loans to related parties: (i) Outstanding balance: (ii) Interest income Epistar Corporation Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation	December31,2023 1,408 $ December31,2023 200,000 $ Year ended December 31,2023	December31,2022 1,495 $ December31,2022 350,000 $ Year ended December 31,2022
	5,945 $	1,705 $

The loans to associates are repayable monthly carry interest at 1.7%~2.15% per annum for the years ended December 31, 2023 and 2022.

(b) Loans from related parties:

Interest expense

Lextar Electronics Corporation	Year ended December 31, 2023 Year ended December 31, 2022 - $ 124 $

There were no outstanding balance of loans from related parties as of December 31, 2023 and 2022, respectively . The loans from associates are repayable monthly carry interest at 1.7% per annum for the years ended December 2022.

(3) Key management compensation

(3)Key management compensation	(3)Key management compensation	(3)Key management compensation
PLEDGED ASSETS Salaries and other short-term employee benefits Termination benefits Total Pledged asset December31,2023 Time deposits (Shown in "Non-current financial assets at amortised cost") 120,000 $ Book			Year ended December 31,2023 Year ended December 31,2022 53,168 $ 83,390 $ 3,896 324 57,064 $ 83,714 $ December31,2022 Purpose - $ Long-term borrowings value	Year ended December 31,2023		Year ended December 31,2022
		December31,2023	December31,2022
Time deposits (Shown in "Non-current financial assets at amortised cost")		120,000 $	- $

8. PLEDGED ASSETS

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT

COMMITMENTS

None.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

In order to revitalize assets and improve the efficiency of the Company's asset use, after integrating the Company's factory space in Taiwan, the Company plans to replace the Zhunan Keyan Road factory building planning with the existing Epistar Corporation’s factory area. Therefore, on January 19, 2024,

348

the Board of Directors decided to sell it based on the negotiation results between the buyer and the seller. The plant on Keyan Road in Zhunan was sold to Polaris Biopharmaceuticals, Inc.

12. OTHERS

(1) Capital risk management

The Company’s capital management policy is established taking into account the industry characteristics, the Company’s future development and changes in external environments. The Company plans the working capital, capital expenditures, investments and dividends required for the future based on the capital management policy, makes financial analysis, and examines its capital structure periodically and makes appropriate adjustments to ensure that every company within the Company may grow and operate indefinitely.

(2) Financial instruments

• A. Financial instruments by category

mpany may grow and operate indefinitely. nancial instruments Financial instruments by category
Financial assets Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Other receivables (including related parties) Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Short-term borrowings Other payables (including related parties) Guarantee deposits received	December31,2023 602,547 $ 120,000 319,076 25,005 1,066,628 $ - $ 134,129 8 134,137 $	December31,2022
		690,933 $ - 402,797 25,408 1,119,138 $
		100,000 $ 100,492 8 200,500 $

• B. Financial risk management policies

• (a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

• (b) The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial position and financial performance.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and RMB. Exchange rate risk arises from future commercial transactions and recognised assets and liabilities.

• ii. The company are required to hedge their entire foreign exchange risk exposure with the Company treasury.

• iii. The Company’s businesses involve some non-functional currency operations (the functional currency of the Company is NTD. The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

349

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Non-monetary items USD:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD RMB:NTD Financial liabilities Non-monetary items USD:NTD	Foreign currency amount (inthousands) 161 $ 19 11 $	Book value Exchangerate (inthousands ofNTD) 30.7050 4,959 $ 4.3270 80 30.7050 335 $ December31,2023 December31,2022
	Foreign currency amount (inthousands) 38 $ 19 15 $	Book value Exchangerate (in thousands of NTD) 30.7100 1,181 $ 4.4080 82 30.7100 471 $

350

iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company. Year ended December 31, 2023

iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company. YearendedDecember31,2023	iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company. YearendedDecember31,2023	iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company. YearendedDecember31,2023	iv. Please refer to the following table for the details of unrealized exchange gain (loss) arising from significant foreign exchange variation on the monetary items held by the Company. YearendedDecember31,2023
v. Analysis of foreign currency market risk arising from significant foreign exchange variation: Foreign currency amount Book value (inthousands) Exchangerate (inthousands ofNTD) (Foreign currency: functional currency) Financial assets Monetary items USD:NTD - $ 30.7050 107 $ RMB:NTD - 4.3270 4) ( Financial liabilities Monetary items USD:NTD - $ 30.7050 8 $ Unrealized exchangegain(loss) Foreign currency amount Book value (in thousands) Exchangerate (in thousands of NTD) (Foreign currency: functional currency) Financial assets Monetary items RMB:NTD - $ 4.4080 2) ($ Financial liabilities Monetary items USD:NTD - $ 30.7100 4) ($ Year ended December 31, 2022 Unrealized exchange gain (loss) Degree ofvariation Effect on profit or loss Effect on other comprehensiveincome (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 1% 50 $ - $ RMB:NTD 1% 1 - Financial liabilities Non-monetary items USD:NTD 1% 3) ($ - $ YearendedDecember31,2023 Sensitivity analysis
	Degree ofvariation 1% 1% 1%	Effect on profit or loss
		50 $ 1 3) ($	- $ - - $

351

==> picture [450 x 211] intentionally omitted <==

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

Year ended December 31, 2022
Sensitivity analysis
Effect on profit Effect on other
Degree of variation or loss comprehensive income
(Foreign currency:
functional currency)
Financial assets
Monetary items
USD:NTD 1% $ 12 $ -
RMB:NTD 1% 1 -
Financial liabilities
Non-monetary items
USD:NTD 1% ($ 5) $ -
Cash flow and interest rate risk
----- End of picture text -----

• i. The Company’s interest rate risk arises from bank deposits and borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk.

• ii. Based on the simulations performed on sensitivity analysis for interest rate risk, the maximum impact on post-tax profit of a 0.1% shift would be increased/decreased of $ 432and $846 for the years ended December 31, 2023 and 2022. The simulation is done on a quarterly basis to ensure that the potential maximum loss is within the limit set by the management.

• (b) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Company and aggregated by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities. Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance, compliance with internal balance sheet ratio targets and external regulatory or legal requirements.

• ii. Surplus cash are invested in interest bearing current accounts, time deposits, money market deposits and marketable securities, with appropriate maturities or sufficient liquidity to provide sufficient headroom and meet the above-mentioned forecasts. As of December 31, 2023 and 2022, the Company held money market position of $ 602,547and $690,933 and those are expected to readily generate cash inflows for managing liquidity risk.

• iii. The Company has the following undrawn borrowing facilities:

Floating rate: Expiring within one year Expiring beyond one year		December31,2023 2,450,000 $ 3,350,000 5,800,000 $	December 31, 2022
			2,500,000 $ 4,140,000 6,640,000 $

• iv. The table below shows analysis of the Company’s non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

352

Non-derivative financial liabilities:

Non-derivative financial liabilities:
December 31, 2023 Other payable (including related parties) Non-derivative financial liabilities: December 31, 2022 Short-term borrowings Other payable (including related parties) Guarantee deposits received	Less than 1year Between 1 and 5years 134,129 $ - $ Less than 1 year Between 1 and 5 years 100,000 $ - $ 100,492 - 8 -	Between 5 and 7years - $ Between 5 and 7years - $ - -	Over 7years - $ Over 7 years
			- $ - -

The Company does not expect the timing of the estimated cash outflows through the maturity date analysis will be significantly earlier, or expect the actual cash flow amount will be significantly different.

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

• Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks and beneficiary certificates is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in convertible bonds and most derivative instruments is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Company’s investment in equity investment without active market is included in Level 3.

13. SUPPLEMENTARY DISCLOSURES

• (1) Significant transactions information

• A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT $300 million or 20% paid-in capital or more: Please refer to table 4.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 5.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: Please refer to table 6.

• G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: Please refer to table 7.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Please refer to table 8.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Please refer to table 9.

(2) Information on investees

• Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 10.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 11.

353

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 12.

(4) Major shareholders information

Major shareholders information: Please refer to table 13.

14. SEGMENT INFORMATION

None.

354

ENNOSTAR INC. Loans to others Year ended December 31, 2023

Table 1

Expressed in thousands of NTD (Except as otherwise indicated)

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Dec-23	Balance at 31-Dec-23	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
0 1 1 2 2 3 4 5	ENNOSTAR Inc. Epicrystal (Changzhou) Ltd. Epicrystal (Changzhou) Ltd. EPISTAR JV HOLDING (BVI) CO., LTD. EPISTAR JV HOLDING (BVI) CO., LTD. Lighting Investment Ltd. Luxlite (HK) Corporation Limited United LED Shan Dong Corporation	Unikorn Semiconductor Corporation Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd Episky Corporation (Xiamen) Ltd Epistar Corporation EPISTAR JV HOLDING(BVI ) CO., LTD. EPISTAR JV HOLDING(BVI ) CO., LTD. Episky Corporation (Xiamen) Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y Y Y Y	500,000 $ 355,600 442,200 69,342 551,225 199,875 145,913 133,350	500,000 $ 346,160 432,700 - 521,985 184,230 138,173 129,810	200,000 $ 346,160 86,540 - 521,985 184,230 89,045 129,810	2.15% 3.45%~ 3.55% 3.45% 0.00% 5.95% 5.95% 5.95% 3.65%	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital Working capital Working capital	- $ - - - - - - -	Promissory Note Promissory Note Promissory Note None Promissory Note Promissory Note Promissory Note Promissory Note	500,000 $ 346,160 432,700 - 521,985 184,230 138,173 129,810	4,737,417 $ 1,716,213 1,716,213 4,737,417 3,553,944 726,518 293,325 144,935	14,212,252 $ 1,716,213 1,716,213 8,884,860 8,884,860 726,518 293,325 144,935	Note 1 Note 2 Note 2 Note 3 Note 4 Note 3 Note 3 Note 5

Table 1-1

355

No.	Creditor	Borrower	General ledger account	Is a related party	Maximum outstanding balance during the year ended 31-Dec-23	Balance at 31-Dec-23	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a singleparty	Ceiling on total loansgranted	Footnote
													Item	Value
6 6 6 7 8	Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp Lextar Electronics (Chuzhou) Corp.	Yenrich Technology Corporation Unikorn Semiconductor Corporation Trendylite Corporation Chuzhou Bwin Technology Corp. Episky Corporation (Xiamen) Ltd.	Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties Other receivables- related parties	Y Y Y Y Y	250,000 $ 500,000 25,000 44,220 865,400	250,000 $ 500,000 25,000 43,270 865,400	- $ 500,000 - - -	Markup on short-term cost of capital 2.17% Markup on short-term cost of capital 3.55% Markup on short-term cost of capital	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- $ - - - -	Working capital Working capital Working capital Working capital Working capital	- $ - - - -	None Promissory Note None None None	- 500,000 - - -	970,467 $ 970,467 970,467 1,525,967 3,691,000	2,911,402 $ 2,911,402 2,911,402 3,814,917 3,691,000	Note 6 Note 6 Note 6 Note 7 Note 3

• Note 1: Limit on loans granted by Ennostar Inc., the ceiling to total loasns granted is 30% of its net asset and to a single party is 10% of its net asset.

• Note 2: Limit on loans granted by the subsidiary of Epistar, Epicrystal (Changzhou), limit on total loans is 40% of the Epicrystal (Changzhou)’s net asset, and 30% of Ennostar Inc.'s net asset ,and to a single party is 10% of the Epicrystal (Changzhou)'s net asset, and 10% of ENNOSTAR Inc’s net asset.

• Note 3: Limit on loans granted by Epistar JV, Lighting,Luxlite (HK) and Lextar Electronics (Chuzhou) Corp. to parent company and a fellow subsidiary that is 100% controlled by the parent company located outside Taiwan, limit on total loans is net asset of the Company and 30% of the net asset based on the latest financial statements of Ennistar Inc.,and to a single party is net asset of the Company and 10% of the net asset based on the latest financial statements of Ennostar Inc..The maximum term of the financing is three years.

• Note 4: Limit on loans granted by the subsidiary of Epistar, Epistar JV, limit on total loans is net asset of Epistar JV and 30% of the net asset based on the latest financial statements of Ennostar Inc., and to a single party is 40% of Epistar JV 's net asset and 10% of the net asset based on the latest financial statements of Ennostar Inc..

• Note 5: Limit on loans granted by the subsidiary of Epistar, United LED Shan Dong, limit on total loans is 40% of United LED Shan Dong’s net asset, and 30% of the net asset based on the latest financial statements of Ennostar Inc. , and to a single party is 40% of the United LED Shan Dong's net asset and 10% of the net asset based on the latest financial statements of Ennostar Inc..

• Note 6: In accordance with Lextar Electronics Corporation Procedures for Provision of Loans: the limit on loans granted to a single party is 10% of its net asset, and the ceiling on total loans granted is 30% of its net asset.

• Note 7: Limit on loans granted by the subsidiary of Lextar Electronics Corporation, Lextar (Suzhou), limit on total loans is net asset of Lextar (Suzhou) and 30% of the net asset based on the latest financial statements of Ennostar Inc., and to a single party is 40% of its net net asset, and 10% of the net asset based on the latest financial statements of Ennostar Inc..

Table 1-2

356

ENNOSTAR INC. Provision of endorsements and guarantees to others Year ended December 31, 2023

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Party being endorsed/guaranteed

Number （Note 1）	Endorser/ guarantor	Companyname	Relationship with the endorser/ guarantor (Note 2)	Limit on endorsements/ guarantees provided for a single party (Note3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2023	Outstanding endorsement/ guarantee amount at December 31, 2023	Actual amount drawn down	Amount of endorsements /guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note3)	Provision of endorsements /guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in MainlandChina	Footnote
1 1	Epistar Corporation Epistar Corporation	Unikorn Semiconductor Corporation ENNOSTAR Inc.	2 3	3,297,450 $ 3,297,450	300,000 $ 3,250,000	- $ 3,250,000	- $ -	- $ -	- 9.86	6,594,901 $ 6,594,901	N N	N Y	N N

• Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (1) The Company is ‘0’.

• (2) The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to: (1) Having business relationship.

• (2) The endorser/guarantor parent company owns directly or indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

• (3) The endorser/guarantor parent company and its subsidiaries jointly own directly or indirectly more than 50% voting shares of the endorsed/guaranteed company.

• (4) The endorsed/guaranteed parent company directly or indirectly owns more than 90% voting shares of the endorser/guarantor subsidiary.

• (5) Mutual guarantee of the trade as required by the construction contract.

• (6) Due to joint venture, each shareholder provides endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

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

• Note3: In accordance with the Epistar’s Procedures for Provision of endorsements and guarantees to others: the ceiling on total endorsements/guarantees is 20% of the Company’s net asset, and the limit on endorsements/guarantees to a single party is 10% of its net asset.

Table 2-1

357

ENNOSTAR INC. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Table 3

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December31,2023	As of December31,2023		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Harvestar Investment Corp. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Amengine Corporation (Preferred stock) E&E Japan Co.Ltd. (Stock) NATEC CORPORATION (Stock) Esleds Co.,Ltd. (Stock) Lynk Labs,Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Dominant Opto Technologies Sdn. Bhd. (Stock) XENIO CORPORATION (Stock)	Controlled by the same entity None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss	500,000 140 120,000 1,000 92,523 1,339,235 35,000,000 7,878	2,500 $ 2,143 1,748 148 - 169,946 784,786 -	- 17.07 7.50 10.00 7.39 13.68 10.00 0.06	2,500 $ 2,143 1,748 148 - 169,946 784,786 -

Table 3-1

358

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Episky Corporation(Xiamen) Ltd. Episky Corporation(Xiamen) Ltd.	PlayNitride Inc. (Stock) OSTENDO TECHNOLOGIES,INC. (Stock) Nan Ya Photonics Incorporation (Stock) PHECDA TECHNOLOGY CO., LTD ELIT FINE CERAMICS CO., LTD. Nanocrystal Technology Inc. Bridgelux Optoelectronics (Xiamen) Co., Ltd.(Stock) China Firstar Optoelectronic Materials Co., Ltd. (Stock) APT Electronics Co., Ltd.(Stock)	None None None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Table 3-2	9,137,338 67,500 9,173,000 600,000 2,200,000 6,000,000 56,316,532 cash RMB7,500,000 4,678,240	631,938 $ - 214,373 - - - 1,691,177 - 44,736	8.53 0.04 19.90 2.11 4.49 11.11 18.77 15.00 0.94	631,938 $ - 214,373 - - - 1,691,177 - 44,736

359

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Episky Corporation(Xiamen) Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	China Crystal Technologies Co.,Ltd.(Stock) Oree Advanced Illumination Solutions, Inc. (Stock) Lustrous Technology Ltd. (Stock) TERA XTAL TECHNOLOGY CORPORATION (Stock) XENIO SYSTEMS, INC (Stock) FormoLight Technologies, Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) Edison Opto Corp. (Stock) Rigidtech Microelectronics Cops. (Stock)	None None None None None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	8,064,516 79,407 266,892 795,000 16,462 2,038,230 562,018 11,257,964 1,550,253	- $ - - - - 10,607 71,319 274,694 9,769	4.08 5.00 8.99 0.42 0.13 10.00 5.74 7.84 2.17	- $ - - - - 10,607 71,319 274,694 9,769

Table 3-3

360

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. HUGA Holding (SAMOA) Ltd.	Ledimond Opto Corporation (Stock) iReach Corporation (Stock) Edison Opto Corp. (Stock) ENNOSTAR Inc. (Stock) Verticle Inc. (Stock) Achrolux Inc. (Stock) PlayNitride Inc. (Stock) Advanced Photoelectronic Technology Limited (Stock) China Crystal Technologies Co.,Ltd.(Stock)	None Investments accounted for using equity method of Epistar Corporation None Parent company None None None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current financial assets at fair value through profit or loss Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	1,100,000 370,000 6,153,424 1,282,377 582,983 987,500 2,757,082 200,000 17,741,935	7,933 $ 1,891 150,144 59,374 - - 190,680 25,380 -	16.92 - 4.28 0.17 3.00 6.91 2.57 2.04 8.97	7,933 $ 1,891 150,143 59,374 - - 190,680 25,380 -	Note1

Table 3-4

361

As of December 31, 2023

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account	Number of shares	Bookvalue	Ownership (%)	Fairvalue	Footnote
Jiangsu Canyang Optoelectronics Ltd Wellybond Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd	C-Star (Yangzhou) technology Co., Ltd Wellysun Inc.(Stock) LANKE ELECTRONIC CO.,LTD	None None None	Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income Non-current investments in equity instruments at fair value through other comprehensive income	cash RMB5,000,000 2,400,000 cash RMB1,351,030.69	21,635 $ 41,136 -	5.00 5.22 1.31	21,635 $ 41,136 -

Note 1: Transferred from the Epistar’s stocks held as treasury shares.

Table 3-5

362

ENNOSTAR INC.

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company's paid-in capital

Year ended December 31, 2023

Table 4

Expressed in thousands of NTD

(Except as otherwise indicated)

Investor	Marketable securities （Note 1）	General ledger account	Counterparty （Note 2）	Relationship with the investor （Note 2）	Balance as at January1,2023	Balance as at January1,2023	Addition （Note 3）	Addition （Note 3）		Disposal （Note 3）	Disposal （Note 3）		Balance as at December 31,2023	Balance as at December 31,2023
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Taishin 1699 Money Market Fund (Beneficiary certificates) Taishin Ta Chong Money Market Fund (Beneficiary certificates) Hua Nan Phoenix Money Market Fund (Beneficiary certificates) Capital Money Market Fund (Beneficiary certificates)	Investments accounted for using equity method Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss Current financial assets at fair value through profit or loss	Yenrich Technology Corporation - - - -	Investments measured by equity method - - - -	- - - - -	$ - - - - -	cash RMB100,900 116,771,473 161,089,653 66,963,644 90,596,815	$ 306,962 1,613,000 2,332,000 1,110,000 1,490,000	- 116,771,473 161,089,653 66,963,644 90,596,815	$ - 1,615,668 2,334,087 1,112,355 1,492,580	$ - 1,613,000 2,332,000 1,110,000 1,490,000	$ - 2,668 2,087 2,355 2,580	cash RMB100,900 - - - -	$ 306,962 - - - -

Table 4-1

363

Investor	Marketable securities （Note 1）	General ledger account	Counterparty （Note 2）	Relationship with the investor （Note 2）	Balance as at January1,2023	Balance as at January1,2023	Addition （Note 3）	Addition （Note 3）		Disposal （Note 3）	Disposal （Note 3）		Balance as at December 31,2023	Balance as at December 31,2023
					Number of shares	Amount	Number of shares	Amount	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Epistar Corporation Yenrich Technology Corporation	CTBC Hwa-win Money Market Fund (Beneficiary certificates) LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd.	Current financial assets at fair value through profit or loss Investments accounted for using equity method	- ENNOSTAR Inc.	- Parent company	- cash RMB100,900	$ - 451,407	43,650,269 -	$ 490,000 -	43,650,269 cash RMB100,900	$ 490,530 306,962	$ 490,000 344,407	$ 530 7,230	- -	$ - -

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities. Note 2: Fill in the columns the counterparty and relationship if securities are accounted for using equity method; otherwise leave the columns blank. Note 3: Aggregate purchases and sales amounts should be calculated separately at their market values to verify whether they individually reach NT$300 million or 20% of paid-in capital or more.

Table 4-2

364

ENNOSTAR INC.

Aquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2023

Table 5

Expressed in thousands of NTD (Except as otherwise indicated)

Real estate acquired by	Real estate	Transaction date or date of the event	Transaction amount	Status of payment	Counterparty	Relationship with the seller	information as to the last transfer of data If the counterparty is a related party,	information as to the last transfer of data If the counterparty is a related party,	information as to the last transfer of data If the counterparty is a related party,	information as to the last transfer of data If the counterparty is a related party,	Basis or reference used in settingtheprice	Reason for acquisition of real estate and status of the real estate	Other commitments
							Owner	Relationship between the issuer	Date of the transfer	Amount
Unikorn Semiconductor Corporation	Factory facilities and machinery equipment	2023/06/13 ~6/27	362,001 $	According to the agreement of both parties	Epistar Corporation	Both are subsidiaries of ENNOSTAR Inc.	The original counterparties of Epistar were all equipment suppliers, which were not belong to related parties	-	-	$ -	Experts’ appraisal report	For the transfer of equipment transactions between the Group, Unikorn acquired production-related equipment from Epistar to align ownership and management rights.	None

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate aquisition of should be appraised pursuant to the regulations.

Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 5-1

365

ENNOSTAR INC.

Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2023

Table 6

Table 6 Expressed in thousands of NTD (Except as otherwise indicated) Transaction Status of Basis or Real estate date or date Date of Book Disposal collection Gain (loss) Relationship Reason for reference used in Other disposed by Real estate of the event acquisition value amount of proceeds on disposal Counterparty with the seller disposal setting the price commitments Epistar Factory facilities 2023/06/13 2001~ $ 303,890 $ 362,001 According to the $ 58,111 Unikorn Both are For the transfer of Based on a None Corporation and machinery ~6/27 2022 agreement of both Semiconductor subsidiaries of equipment transactions comprehensive equipment parties Corporation ENNOSTAR between the group, consideration of the Inc. Unikorn obtained carrying amount of production-related Epistar’s assets and equipment from Epistar experts' appraisal to align ownership and reports. management rights.

Note 1: The appraisal result should be presented in the ‘Basis or reference used in setting the price’ column if the real estate disposed of should be appraised pursuant to the regulations.

• Note 2: Paid-in capital referred to herein is the paid-in capital of parent company. In the case that shares were issued with no par value or a par value other than NT$10 per share, the 20 % of paid-in capital shall be replaced by 10% of equity attributable to owners of the parent in the calculation.

• Note 3: Date of the event referred to herein is the date of contract signing, date of payment, date of execution of a trading order, date of title transfer, date of board resolution, or other date that can confirm the counterparty and the monetary amount of the transaction, whichever is earlier.

Table 6-1

366

Table 7

Expressed in thousands of NTD (Except as otherwise indicated)

ENNOSTAR INC.

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

Year ended December 31, 2023

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Epicrystal (Changzhou) Co., Ltd.	Lextar Electronics (Chuzhou) Corp. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation LEDAZ Co., Ltd Lextar Electronics Corporation Unikorn Semiconductor Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales Sales	($ 257,393) ( 174,839) ( 1,246,231) ( 324,744) ( 248,663) ( 108,738) ( 105,990) ( 495,509) ( 1,130,760) ( 378,115) ( 681,953)	( 7) ( 5) ( 35) ( 9) ( 3) ( 1) ( 1) ( 6) ( 14) ( 26) ( 47)	90 days after monthend closing 60 days after monthend closing 100 days after monthend closing 60 days after monthend closing 90 days after monthend closing and 20 days after next monthly billings 90 days after monthend closing 120 days after monthend closing 180 days after next month-end closing 150 days after next month-end closing 90 days after monthend closing 180 days after next month-end closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	$ 72,556 35,116 409,297 64,650 89,620 38,957 24,699 280,403 396,468 166,683 315,726	3 1 16 2 2 1 1 6 9 9 18

Table 7-1

367

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Shenzhen Epikylin Optoelectronics Co.,Ltd Lextar Electronics Corporation Lextar Electronics Corporation	Episky Corporation (Xiamen) Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Jiangsu Canyang Optoelectronics Ltd. Epicrystal (Changzhou) Co., Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. Epistar Corporation	Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1 Note 1	Sales Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	( 1,077,583) ( 163,612) ( 1,146,378) ( 374,473) 1,146,378 1,130,760 1,077,583 163,612 324,744 681,953 374,473 378,115 495,509 1,246,231 2,346,035 108,738	( 74) ( 14) ( 99) ( 32) 27 26 25 3 6 12 31 30 28 72 72 3	180 days after next month-end closing 90 days after monthend closing 120 days after monthend closing 90 days after monthend closing 120 days after monthend closing 150 days after next month-end closing 180 days after next month-end closing 90 days after monthend closing 60 days after monthend closing 180 days after next month-end closing 90 days after monthend closing 90 days after monthend closing 180 days after next month-end closing 100 days after monthend closing 120 days after monthend closing OA 120 days	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	1,238,105 24,923 827,772 271,993 ( 827,772) ( 396,468) ( 1,238,105) ( 24,923) ( 64,650) ( 315,726) ( 271,993) ( 166,683) ( 280,403) ( 409,297) ( 774,205) ( 38,957)	69 2 65 21 ( 36) ( 17) ( 54) ( 2) ( 5) ( 23) ( 81) ( 55) ( 41) ( 59) ( 60) ( 3)

Table 7-2

368

Purchaser/seller	Counterparty	Relationship with the counterparty			Transaction		Differences in transaction terms	Differences in transaction terms	Notes/accounts receivable (payable)	Notes/accounts receivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp. Shanghai Welight Electronic Co., LTD. Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Yenrich Technology Corporation ProLight Opto Technology Corporation	Tyntek Corporation Lextar Electronics (Chuzhou) Corp. Episky Corporation (Xiamen) Ltd. ProLight Opto Technology Corporation AUO (Suzhou) Corp Ltd. Fortech Electronics (Suzhou) Co., Ltd. Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics Corporation Shanghai Welight Electronic Co., LTD.	Note 1 Note 1 Note 1 Note 1 Other related parties Other related parties Note 1 Note 1 Note 1 Note 1	Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales	$ 140,168 390,228 257,393 115,820 ( 174,558) ( 374,282) ( 2,346,035) ( 390,228) ( 160,680) ( 115,820)	4 94 8 71 ( 4) ( 8) ( 50) ( 8) ( 65) ( 23)	OA 120 days 90 days after monthend closing OA 90 days 120 days after monthend closing 120 days after monthend closing 120 days after monthend closing 120 days after monthend closing 90 days after monthend closing 120 days after monthend closing 120 days after monthend closing	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	Normal Normal Normal Normal Normal Normal Normal Normal Normal Normal	($ 38,745) ( 11,451) ( 72,556) ( 63,633) 79,380 114,138 774,205 11,451 8,972 63,633	( 3) ( 6) ( 6) ( 154) 7 9 53 1 22 48

Note 1: Investee company accounted for using equity method directly and indirectly.

Table 7-3

369

ENNOSTAR INC.

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2023

Table 8 Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2023	Balance as at December31,2023	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful debts Expressed in thousands of NTD (Except as otherwise indicated)
			Accounts receivable	Other receivable			Amount	Action taken
ENNOSTAR Inc. Epistar JV Holding (BVI)Co.,Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar Corporation United LED Corporation (Hong Kong) Limited Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Lighting Investment Ltd. Lextar Electronics Corporation Lextar Electronics Corporation	Unikorn Semiconductor Corporation Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epistar JV Holding (BVI)Co.,Ltd. Fortech Electronics (Suzhou) Co., Ltd. Unikorn Semiconductor Corporation	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Other related parties Note 2	$ - - 409,297 64,650 280,403 396,468 - 166,683 315,726 1,238,105 827,772 271,993 - 114,138 -	$ 203,504 539,078 - 53,017 2,553 23,533 130,218 347,333 580 86,590 - 349 190,266 - 500,000	$ 203,504 539,078 409,297 117,667 282,956 420,001 130,218 514,016 316,306 1,324,695 827,772 272,342 190,266 114,138 500,000	$ - - 2.76 ( 4.39) 1.71 3.84 - 0.92 1.30 1.28 2.26 2.75 - 5.13 -	$ - - - - - 1,742 - - - 220,528 269,206 - - - -	- - - - - - - - - - - - - - -	$ 207 - 97,551 29,575 38,068 121,436 130,218 - - 70,986 173,312 37,688 - 114,138 -	$ - - - - - - - - - - - - - - -

Table 8-1

370

Creditor	Counterparty	Relationship with the counterparty	Balance as at December31,2023	Balance as at December31,2023	Total	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date	Allowance for doubtful debts
			Accounts receivable	Other receivable			Amount	Action taken
Lextar Electronics (Chuzhou) Corp.	Lextar Electronics Corporation	Note 2	$ 774,205	$ 2,178	$ 776,383	5.05	-	-	$ 224,610	$ -

Note 1: The amount recovered by Epistar Corporatio from Episky Corporation (Xiamen) Ltd. was only $1,633 for overdue amounts.

The amount recovered by Jiangsu Canyang Optoelectronics Ltd. from Episky Corporation (Xiamen) Ltd. was $173,312 for overdue amounts. All the unoverdue amounts are being actively collected. Note 2: Investee company accounted for using the equity method directly and indirectly.

Table 8-2

371

ENNOSTAR INC.

Significant inter-company transactions during the reporting periods

Year ended December 31, 2023 Table 9

Table 9 Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)		Expressed in thousands of NTD (Except as otherwise indicated) Transaction	Expressed in thousands of NTD (Except as otherwise indicated) Transaction	Expressed in thousands of NTD (Except as otherwise indicated) Transaction
				General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
0 0 0 1 1 1 1 1	ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	Unikorn Semiconductor Corporation Lextar Electronics Corporation Epistar Corporation Lextar Electronics Corporation Unikorn Semiconductor Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd	1 1 1 1 1 1 1 1	Other receivable Other operating revenue Other operating revenue Sales Sales Sales Sales Accounts receivable	$ 203,304 107,139 218,261 108,738 105,990 495,509 1,130,760 280,403	Based on contract terms Based on contract terms Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.32 0.48 0.98 0.49 0.48 2.22 5.07 0.44

Table 9-1

372

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
1 2 2 2 2 2 3 3 3 3	Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd.	Episky Corporation (Xiamen) Ltd. Lextar Electronics (Chuzhou) Corp. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Epistar Corporation Shenzhen Epikylin Optoelectronics Co.,Ltd Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Episky Corporation (Xiamen) Ltd.	1 3 3 3 2 3 3 2 3 3	Accounts receivable Sales Sales Sales Sales Accounts receivable Sales Sales Sales Notes receivable	$ 396,468 257,393 174,839 1,246,231 324,744 409,297 378,115 681,953 1,077,583 341,186	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.62 1.15 0.78 5.59 1.46 0.64 1.70 3.06 4.83 0.53

Table 9-2

373

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
3 3 3 3 4 4 4 4 4 4	Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd. Jiangsu Canyang Optoelectronics Ltd.	Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd. Epicrystal Corporation (Changzhou) Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal Corporation (Changzhou) Ltd.	3 2 3 3 2 3 3 3 3 3	Accounts receivable Accounts receivable Accounts receivable Other receivable Sales Sales Sales Notes receivable Accounts receivable Accounts receivable	$ 166,683 315,726 896,919 347,333 163,612 1,146,378 374,473 142,197 827,772 129,796	Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.26 0.49 1.40 0.54 0.73 5.14 1.68 0.22 1.29 0.20

Table 9-3

374

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
5 6 7 8 8 9 9 9 9 10	United LED Corporation (Hong Kong) Limited Epistar JV Holding (BVI)Co.,Ltd. Lighting Investment Ltd. Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics Corporation Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Lextar Electronics (Chuzhou) Corp. Yenrich Technology Corporation	Episky Corporation (Xiamen) Ltd. Epistar Corporation Epistar JV Holding (BVI)Co.,Ltd. Epistar Corporation Episky Corporation (Xiamen) Ltd. Unikorn Semiconductor Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics Corporation	3 2 3 3 3 3 3 3 3 3	Other receivable Other receivable Other receivable Cost of goods sold Cost of goods sold Other receivable Sales Accounts receivable Sales Sales	$ 130,218 539,078 190,266 108,738 257,393 500,000 2,346,035 774,205 390,228 160,680	Based on contract terms Based on contract terms Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Based on contract terms Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties Conducted in the ordinary course of business with terms similar to those with third parties	0.20 0.84 0.30 0.49 1.15 0.78 10.52 1.21 1.75 0.72

Table 9-4

375

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note3)
11	ProLight Opto Technology Corporation	Shanghai Welight Electronic Co., LTD.	3	Sales	$ 115,820	Conducted in the ordinary course of business with terms similar to those with third parties	0.52

Note 1: Parent company is ‘0’.The subsidiaries are numbered in order starting from ‘1’.

• Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs

• to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice.

For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for

transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

• (1) Parent company to subsidiary.

• (2) Subsidiary to parent company.

• (3) Subsidiary to subsidiary.

• Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

• Note 4: Disclosure of the transactions over 100 million New Taiwan dollars only and the related party transactions for counterparty are not disclosed.

Table 9-5

376

Information on investees

ENNOSTAR INC.

Year ended December 31, 2023

Table 10

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2023	Shares held as at December 31,2023	Shares held as at December 31,2023	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
				Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc.	Epistar Corporation Lextar Electronics Corporation Harvestar Investment Corp. Tyntek Corporation Amengine Corporation GCS Holding Inc.	Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands	Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers, chips, packages and modules Professional investment Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Developing and sales of medical optical sensor modules OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics	$ 38,607,380 11,724,646 1,150,000 584,583 40,212 431,990	$ 38,607,380 11,724,646 1,150,000 584,583 40,212 431,990	1,116,479,188 514,916,380 115,000,000 23,799,000 6,922,000 9,028,000	100.00 100.00 100.00 7.92 75.96 8.11	$ 32,871,412 11,015,335 706,482 622,100 14,494 309,374	($ 6,060,593) ( 527) ( 220,874) ( 131,953) ( 13,671) ( 792,236)	($ 6,106,299) ( 53,255) ( 220,874) ( 10,458) ( 10,385) ( 75,156)	Note1 Note1

Table 10-1

377

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. ENNOSTAR Inc. Harvestar Investment Corp. Harvestar Investment Corp. Harvestar Investment Corp. Precistar Investment Corp.	Calystar Investment Corp. Unikorn Semiconductor Corporation Precistar Investment Corp. Praistar Investment Corp Manastar Investment Corp GCS Holding Inc. Tyntek Corporation Unikorn Semiconductor Corporation Unikorn Semiconductor Corporation	Taiwan Taiwan Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan	Professional investment Original equipment manufacturer of III-V semiconductor Professional investment Professional investment Professional investment OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Original equipment manufacturer of III-V semiconductor Original equipment manufacturer of III-V semiconductor	$ 440,000 783,132 480,000 270,000 1,000 433,099 263,864 444,785 476,300	$ 440,000 593,132 270,000 270,000 1,000 433,099 209,551 444,785 268,000	44,000,000 65,700,000 48,000,000 27,000,000 100,000 9,013,000 13,089,000 52,000,000 23,815,020	100.00 19.53 100.00 100.00 100.00 8.10 4.35 15.45 7.08	$ 366,250 107,389 49,086 27,542 974 357,463 257,152 79,037 45,443	($ 57,229) ( 891,055) ( 49,998) ( 36,909) ( 7) ( 792,236) ( 131,953) ( 891,055) ( 891,055)	($ 57,229) ( 164,192) ( 49,998) ( 36,909) ( 7) ( 75,027) ( 5,443) ( 140,510) ( 49,958)	Note1 Note1

Table 10-2

378

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Calystar Investment Corp. Calystar Investment Corp. Praistar Investment Corp Unikorn Semiconductor Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation	GCS Holding Inc. Tyntek Corporation Unikorn Semiconductor Corporation GCS Holding Inc. iReach Corporation Epistar JV Holding (BVI) Co.,Ltd. Full Star Enterprises Limited Lighting Investment Corporation Unikorn Semiconductor Corporation	Cayman Islands Taiwan Taiwan Cayman Islands Taiwan British Virgin Islands Hong Kong Taiwan Taiwan	OEM manufacturing of GaAs / InP / GaN / SiC Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Original equipment manufacturer of III-V semiconductor OEM manufacturing of GaAs / InP / GaN / SiC wafers for RF and optoelectronics Manufacturing, sales, packaging and module design of semiconductor light emitting devices Professional investment Professional investment Professional investment Original equipment manufacturer of III-V semiconductor	$ 265,135 151,238 268,000 1,051 70,000 14,960,129 - 1,561,814 826,083	$ 265,135 97,787 268,000 1,051 70,000 14,960,129 166,785 1,561,814 826,083	6,500,000 8,094,000 13,400,000 20,000 7,000,000 48,278 - 191,478,518 40,000,000	5.84 2.69 3.98 0.02 34.30 100.00 0.00 100.00 11.89	$ 196,468 143,778 25,546 975 53,262 8,848,099 - 1,570,771 75,597	($ 792,236) ( 131,953) ( 891,055) ( 792,236) ( 22,013) ( 486,603) - 8,947 ( 891,055)	($ 54,125) ( 3,294) ( 36,923) ( 4) ( 8,330) ( 518,609) - 10,251 ( 108,571)	Note1 Note1 Note1

Table 10-3

379

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar Corporation Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Epistar JV Holding (BVI) Co.,Ltd. Lighting Investment Ltd.	SH Co., Ltd. TE Opto Corporation GaN Force Corporation Tyntek Corporation Can Yang Investments Limited HUGA Holding (SAMOA) Limited LiteStar JV Holding (BVI) CO., Ltd. United LED Corporation (Hong Kong) Limited Episky (Hong Kong) Limited Can Yang Investments Limited LEDAZ CO., Ltd.	Taiwan Taiwan Taiwan Taiwan Hong Kong Samoa British Virgin Islands Hong Kong Hong Kong Hong Kong Korea	Sales of LED chips Sales of LED chips Design, manufacturing and sales of semiconductor materoals and modules Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Professional investment Professional investment Professional investment Professional investment Professional investment Professional investment Engineering service of LED	$ 31,792 9,200 77,700 1,243 66,745 334,967 3,408,835 2,029,760 2,124,096 4,385,900 48,166	$ 31,792 9,200 77,700 1,243 66,745 334,967 3,408,835 2,029,760 2,124,096 4,370,156 48,166	3,179,176 920,000 1,118,600 50,000 2,679,063 12,551,035 10,882 67,000,165 cash USD68,000,000 66,438,929 88,460	49.00 40.00 64.32 0.02 3.53 100.00 82.41 74.86 100.00 87.41 28.13	$ 2,363 43,980 678 1,175 56,679 3,318 3,302,292 258,619 1,954,893 1,405,455 -	($ 76) 3,619 697 ( 131,953) ( 6,414) 82 ( 238,730) ( 6,635) ( 288,026) ( 6,414) 49,914	($ 37) 1,448 448 ( 27) ( 226) 82 ( 196,737) ( 4,967) ( 288,026) ( 5,382) ( 24,455)	Note1

Table 10-4

380

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lighting Investment Ltd. Lighting Investment Ltd. Lighting Investment Ltd. LiteStar JV Holding (BVI) Co.,Ltd. Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation	Interlight Optotech (HK) Co.,Limited Epistar (Hong Kong) Limited Luxlite (HK) Corporation Limited Epicrystal (Hong Kong) Co. Ltd. LEDAZ CO., Ltd. Lighting Investment Ltd. Yenrich Opto (Hong Kong) Limited Can Yang Investments Limited GaNrich Semiconductor Corporation LEDOLUX Sp.Zo.O. Joint Power Exponent, Ltd.	Hong Kong Hong Kong Hong Kong Hong Kong Korea British Virgin Islands Hong Kong Hong Kong Taiwan Poland Taiwan	Sales of LED packages Professional investment Professional investment Professional investment Engineering service of LED Professional investment Sales of LED lighting products Professional investment Design and technology service of LED lighting product Assembling and sales of LED bulbs Power IC design and module sales	$ 12,806 2,556 133,979 4,403,034 23,993 152,701 - 72,436 - 133,455 11,599	$ 12,806 2,556 133,979 4,403,034 23,993 152,701 133,403 72,436 67,101 133,455 11,599	429,000 82,850 3,800,000 146,600,000 44,065 45,643 - 5,218,605 - 156,994 1,757,000	30.00 100.00 100.00 100.00 14.01 100 - 6.87 - 60.00 11.26	$ 7,475 16 293,337 4,006,499 - 726,518 - 110,462 - 11,933 2,805	($ 11,724) 262 13,448 ( 238,569) 49,914 ( 9,031) - ( 6,414) ( 21,358) ( 1,164) ( 23,969)	($ 3,517) 262 13,448 ( 238,569) ( 16,376) ( 9,031) - ( 441) ( 19,001) ( 698) ( 2,783)	Note1

Table 10-5

381

Initial investment amount Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lighting Investment Corporation Lighting Investment Corporation Lighting Investment Corporation Episky Corporation (Xiamen) Ltd Epicrystal (Changzhou) Co., Ltd. Episky Corporation (Xiamen) Ltd Episky Corporation (Xiamen) Ltd Lextar Electronics Corporation Lextar Electronics Corporation	Tyntek Corporation GaN Force Corporation Domi-Star Optoelectronics Corporation Epicrystal (Changzhou) Co., Ltd. Changzhou Chemsemi Co., Ltd. LEADSTAR Micro-Crystal Display Corporation (JiangSu) Ltd. Shenzhen Epikylin Optoelectronics Co.,Ltd Lextar (Singapore) Pte. Ltd. Wellybond Optronics (H.K) Limited	Taiwan Taiwan Taiwan China China China China Sinapore Hong Kong	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Design, manufacturing and sales of semiconductor materoals and modules Design and sales of LED lighting product Manufacturing and sales of LED wafers and chips OEM manufacturing of compound semiconductor RFID wafers and optoelectronic wafers Developing, manufacturing and sales of LED packages, modules and related applications Sales of LED chips Professional investment Professional investment	$ 1,276 641 490 147,472 469,590 164,862 43,770 2,709,310 17,888	$ 1,276 641 490 147,472 469,590 122,036 43,770 2,709,310 17,888	50,000 620,400 49,000 cash USD5,200,000 cash RMB110,000,000 cash RMB38,800,000 cash RMB10,000,000 90,270,000 63,000,000	0.02 35.68 49.00 3.31 10.44 9.70 100.00 100.00 100.00	$ 767 952 311 145,486 583,853 133,547 219,874 2,613,816 11,864	($ 131,953) 697 ( 64) ( 255,482) ( 1,762,498) ( 56,109) 30,429 155,548 18	($ 27) 249 ( 32) ( 8,456) ( 188,915) ( 5,492) 30,429 155,548 18	Note1

Table 10-6 382

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation Lextar Electronics Corporation	Wellypower Optronics Corporation Apower Optronics Corporation Liang Li Venture Corp. Wellybond Corporation Trendylite Corporation Hexawave, Inc. Yenrich Technology Corporation ProLight Opto Technology Corporation Tyntek Corporation	British Virgin Islands British Virgin Islands Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Professional investment Professional investment Professional investment Professional investment Sales of products Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade	$ 44,898 381,638 175,374 746,484 20,874 147,506 580,487 99,081 1,304	$ 44,898 381,638 175,374 746,484 18,100 147,506 980,487 97,031 1,304	5,153,061 31,600,000 18,000,000 75,000,000 3,150,000 12,716,000 26,000,000 6,700,000 50,000	100.00 100.00 100.00 100.00 100.00 31.52 100.00 9.84 0.02	$ 172,521 1,240,082 114,547 467,228 44,459 46,034 177,373 76,486 989	$ 10,235 74,869 ( 11,701) ( 96,024) 4,802 ( 99,587) ( 162,276) ( 125,783) ( 131,953)	$ 10,235 74,869 ( 11,701) ( 96,024) 4,473 ( 33,052) ( 162,276) ( 12,129) ( 139)	Note1

Table 10-7

383

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Lextar (Singapore) Pte. Ltd. Lextar (Singapore) Pte. Ltd. Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Wellybond Corporation Liang Li Venture Corp.	Lextar Electronics Korea Ltd. Aurora International Lighting Corporation Limited VOGITO INNOVATION CO., LTD. Hexawave, Inc. WellyHertz Electronics Corp. Joint Power Exponent, Ltd. ProLight Opto Technology Corporation Tyntek Corporation ProLight Opto Technology Corporation	Korea Hong Kong Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan Taiwan	Sale of LED and aftersales service Sales of lighting Design of lighting Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of switching power supply d l Power IC design and module sales Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Manufacturing and sales of LED packages	$ 3,025 204,136 1,000 147,494 51,400 68,250 313,670 1,288 96,604	$ 3,025 204,136 1,000 147,494 30,000 68,250 303,264 1,288 91,763	22,000 2,000,000 100,000 12,715,000 30,700,000 4,550,000 21,417,000 50,000 6,700,000	100.00 20.00 50.00 31.52 87.46 29.17 31.47 0.02 9.84	$ 4,951 - 3,153 46,030 22,889 33,736 244,491 976 76,486	$ 447 23,848 1,433 ( 99,587) ( 15,283) ( 23,969) ( 125,783) ( 131,953) ( 125,783)	$ 447 - 717 ( 33,050) ( 12,910) ( 14,772) ( 38,283) ( 141) ( 11,787)	Note1 Note1

Table 10-8

384

Initial investment amount Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Liang Li Venture Corp. Hexawave, Inc. Yenrich Technology Corporation Yenrich Technology Corporation ProLight Opto Technology Corporation	Tyntek Corporation WellyWave Semiconductors Inc. ProLight Opto Technology Corporation Tyntek Corporation Prolight Opto Holding Corporation	Taiwan Taiwan Taiwan Taiwan Seychelles	Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Manufacturing and sales of compound semiconductor materials and modules Manufacturing and sales of LED packages Research and development, manufacture, sales of gallium arsenide, infrared, light-emitting diode, laser diode, phototransistor,photodiode, single crystal, epitaxy and chip, and concurrent research and development, manufacture and sales of electro-optical system of export-import trade Professional investment	$ 1,293 49,000 - - 4,402	$ 1,293 49,000 27,366 1,324 4,402	50,000 4,363,065 - - 150,000	0.02 29.27 0.00 0.00 100.00	$ 982 41,771 - - ( 2,296)	($ 131,953) ( 52,839) ( 125,783) ( 131,953) ( 2,617)	($ 137) ( 23,621) ( 2,027) ( 96) ( 2,617)	註1 Note1

Table 10-9

385

Initial investment amount

Shares held as at December 31, 2023

Investor	Investee	Location	Main business activities	Balance as at December 31,2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value	Net profit (loss) of the investeefor the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023	Footnote
Prolight Opto Holding Corporation Lextar Electronics (Suzhou) Corp. Lextar Electronics (Suzhou) Corp. Lextar Electronics (Chuzhou) Corp.	ProLight Opto Technology Corporation Lextar Electronics (Chuzhou) Corp. Chuzhou Bwin Technology Corp. Chuzhou Bwin Technology Corp.	Seychelles China China China	Professional investment Manufacturing and sales of LED wafers, chips, packages, lights, and modules Developing, manufacturing, sales of metal and plastic technical products. Developing, manufacturing, sales of metal and plastic technical products.	$ 4,403 3,094,825 130,726 244,748	$ 4,403 3,094,825 130,726 -	150,000 cash RMB700,000,000 cash RMB29,000,000 cash RMB66,400,000	100.00 100.00 29.00 66.40	($ 2,296) 3,691,002 63,524 194,200	($ 2,617) 272,807 ( 104,578) ( 104,578)	($ 2,617) 272,807 ( 49,694) ( 43,285)

Note1: The group holds two seats on the Board of Directors, which indicates that the Group has significant influence over the investee. Accordingly, the Group listed the investee as an associate.

Table 10-10

386

Table 11

ENNOSTAR INC.

Information on investments in Mainland China

Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the three months ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended December 31,2023	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
LEADSTAR Micro- Crystal Display Corporation (JiangSu) Ltd. Episky Corporation (Xiamen) Ltd. United LED Shan Dong Corporation Epicrystal Corporation (Changzhou) Ltd. Luxlite (Shenzhen) Corporation Limited Bridgelux Optelectronice (Xiamen) Co,.Ltd.	Developing, manufacturing and sales of LED packages, modules and related applications Manufacturing and sales of LED chips Manufacturing and sales of LED wafers and chips Manufacturing and sales of LED wafers and chips Sales of LED chips Manufacturing and sales of LED wafers, chips, packages and modules	$ 1,766,000 2,124,096 2,404,500 4,494,125 96,430 7,785,966	1 2 2 2 2 2	$ 525,815 2,124,096 1,824,844 3,423,550 48,687 1,461,593	$ 147,045 - - - - -	$ 89,432 - - - - -	$ 583,428 2,124,096 1,824,844 3,423,550 48,687 1,461,593	($ 56,109) ( 288,026) ( 6,803) ( 255,482) - -	33.63 100.00 74.86 76.95 0.00 18.77	($ 21,300) ( 288,026) ( 5,093) ( 196,605) - -	$ 495,255 1,954,886 271,248 3,301,755 - 1,691,177	$ - - - - 57,480 -	2(3)、7 2(3) 2(3) 2(1) 2(1) 2(3)

Table 11-1

387

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the three months ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended December 31,2023	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
APT Electronics Co., Ltd. China Crystal Technologies Co.,Ltd. Ufeco Technology Inc. Huarui (Huizhou) Co., Ltd. Ningbo Formosa Epitaxy Incorporation Jiangsu Canyang Optoelectronics Ltd.	Developing, manufacturing and sale of LED extension and chip, module and light instrument Developing, manufacturing and sale of gallium arsenide unit crystal and chips Developing, manufacturing and sale of LED application products Research and development, manufacturing and sale of LED packaging; research and development, manufacturing and sale of backlight module, lighting modules and accessories Sales of LED chips Manufacturing and sales of LED wafers and chips	$ 1,854,198 891,131 75,048 479,839 6,754 5,902,624	3 2 2 2 2 2	$ 296,108 96,084 7,818 215,687 56,843 2,576,953	$ - - - - - 15,744	$ - - - - - -	$ 296,108 96,084 7,818 215,687 56,843 2,592,697	$ - - - - - 67,667	11.69 8.97 - - - 97.81	$ - - - - - 66,185	$ - - - - - 1,697,687	$ - - - - - -	2(3) 2(3) 2(3) 2(3) 2(3) 2(3)

Table 11-2

388

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note 1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the three months ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the three months ended December 31,2023	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Lextar Electronics (Suzhou) Corp. Lextar Electronics (Xiamen) Co.,Ltd. Shanghai Welight Electronic Co., LTD.	Manufacturing and sales of LED wafers, chips, packages and modules Manufacturing and sales of LED packages and modules Wholesale and export and import of LED and related electronic products	$ 3,722,205 32,759 4,695	2 2 2	$ 3,585,860 32,759 4,695	$ - - -	$ - 32,759 -	$ 3,585,860 - 4,695	$ 231,556 155 ( 2,617)	100.00 - 51.15	$ 231,556 155 ( 2,617)	$ 3,827,342 - ( 2,242)	$ - - -	2(2) 2(3)、6 2(2)

Table 11-3

389

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2023	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
ENNOSTAR Inc. Epistar Corporation Lextar Electronics Corporation	$ 436,383 $ 12,694,097 $ 3,737,600	$ 306,962 $ 13,827,776 $ 4,198,743	$ 47,374,174 $ 17,462,412 $ 9,704,674

Note 1: The investments are classified in three types; they are numbered as follows:

1. Direct investment in Mainland China companies;

2. Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

3. Other ways.

Note 2: Investment income or loss in this period:

The bases for recognition of investment income or loss are classified into four types; they are numbered as follows:

1. The financial statements that are audited by the international accounting firm which has a cooperative relationship with the R.O.C. accounting firm;

2. The financial statements that are audited by the R.O.C. parent company’s independent auditors;

3. The financial statements that are not audited by the independent auditors;

4. Others.

Note 3: The amount disclosed was based on Investment Commission, MOEA Regulation No. 09704604680 announced on August 29, 2008.

Note 4: The numbers in the table shall be expressed in NTD. Foreign currencies shall be translated into NTD at the exchange rate prevailing on the financial reporting date.

Note 5: The ‘amounts’ are expressed in thousands of New Taiwan dollars.

Note 6:Lextar Electronics (Xiamen) Co., Ltd. had applied for deregistration in January 2023 and remitted the residual property amounting to USD 297,928.34 to LEXTAR (SINGAPORE) PTE. LTD. in Singapore, an investee in the third area. Note 7: In September 2023, Yenrich Technology Corporation transferred all the equity interests in LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. to ENNOSTAR Inc. Pursuant to the Jing-Shen-II-Zi Letter No.11200120910 on September 11, 2023, the original approval of the investment of Yenrich Technology Corporation was cancelled as the transfer of LEADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. was implemented and approved by the Investment Commission. ENNOSTAR Inc. acquired the equity interests in EADSTAR Micro-Crystal Display Corporation (Jiangsu) Ltd. in the amount of NT$ 306,962 thousand, which was the investment amount of Yenrich Technology Corporation as originally approved by the Investment Commission.

Table 11-4

390

Table 12

ENNOSTAR INC.

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

Year ended December 31, 2023

Expressed in thousands of NTD

(Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	(payable)	(payable)	endorsements/guarantees or	endorsements/guarantees or		Financing	Financing		Others
	Amount	%	Amount	%	Balance at December 31,2023	%	Balance at December 31,2023	Purpose	Maximum balance during the year ended December 31, 2023	Balance at December 31, 2023	Interest rate	Interest during the year ended December 31, 2023
Shenzhen Epikylin Optoelectronics Co.,Ltd Episky Corporation (Xiamen) Ltd. Jiangsu Canyang Optoelectronics Ltd. Episky Corporation (Xiamen) Ltd. Epicrystal (Changzhou) Co., Ltd. Lextar Electronics (Chuzhou) Corp.	$ 328,416 925,959 ( 139,305) ( 228,295) ( 538,180) ( 1,807,205)	3.02 8.52 (1.28) (2.10) (4.95) (30.48)	$ - 30,455 - - - -	- 1.91 - - - -	$ 230,861 545,910 ( 35,999) ( 57,876) ( 320,621) ( 968,433)	0.45 1.06 (0.07) (0.11) (0.62) (7.14)	$ - - - - - -	- - - - - -	$ - 69,342 - - - -	$ - - - - - -	- - - - - -	$ - - - - - -	- - - - - -

Note 1: Disclosure of the transactions over 100 million New Taiwan dollars only

Table12-1

391

ENNOSTAR INC. Major Shareholders Information December 31, 2023 Table 13

MajorShareholders	Shareholding	Shareholding
	NumberofSharesHeld	ShareholdingRatio
AUO Corporation 93,568,898 Table13-1		12.42

392

ENNOSTAR INC. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement1
Item			Description	Amount
Cash
Bank deposits
Demand deposits－NTD			$	297,508
	－USD	USD 61 thousand at exchange rate		1,888
		of 30.7050
	－CNY	CNY 19 thousand at exchange rate		80
		of 4.3270
Time deposits	－NTD			300,000
	－USD	USD 100 thousand at exchange rate
		of 30.7050		3,071
			$	602,547

Statement1,Page1

393

ENNOSTAR INC.

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement2

Statement2
Name	BeginningBalance			Shares Amount (Note1) Gain (loss) on investments - 792,070) ($ 6,106,299) ($ - 84,299) ( 53,255) ( - 868) ( 10,385) ( - 77,612 220,874) ( - 14,416 57,229) ( 21,000,000 50,080 49,998) ( - 15,447 36,909) ( - - 7) ( 9,500,000 92,364 164,192) ( - 38,461 10,458) ( - 26,917) ( 75,156) ( - 344,264 3,027 271,510) ($ 6,781,735) ($ Additions(Reduction)	EndingBalance			Market Value or Net Assets Value		Collateral
	Shares		Amount	Shares	Shares	Percentage of Ownership	Amount	Unit Price (inNTD)	Total Amount
Epistar Corporation 1,116,479,188 Lextar Electronics Corporation 514,916,380 Amengine Corporation 6,922,000 Harvestar Investment Corp. 115,000,000 Calystar Investment Corp. 44,000,000 Precistar Investment Corp. 27,000,000 Praistar Investment Corp. 27,000,000 Manastar Investment Corp. 100,000 Unikorn Semiconductor Corporat 56,200,000 Tyntek Corporation 23,799,000 GCS Holdings, Inc. 9,028,000 Crystal Display Corporation (JiangSu) Ltd. -			39,769,781 $ 11,152,889 25,747 849,744 409,063 49,004 49,004 981 179,217 594,097 411,447 - 53,490,974 $	- - - - - 21,000,000 - - 9,500,000 - - -	1,116,479,188 514,916,380 6,922,000 115,000,000 44,000,000 48,000,000 27,000,000 100,000 65,700,000 23,799,000 9,028,000 -	100% 100% 75.96% 100% 100% 100% 100% 100% 19.53% 7.92% 8.11% 25.23%	32,871,412 $ 11,015,335 14,494 706,482 366,250 49,086 27,542 974 107,389 622,100 309,374 347,291 46,437,729 $	29.53 $ 18.85 2.38 6.14 8.32 1.02 1.02 9.74 1.91 18.60 32.00 3.44	32,974,505 $ 9,704,674 18,292 706,482 366,250 49,086 27,542 974 125,354 442,661 288,896 347,417	None None None None None None None None None None None None

Note1: Including investments of additions, Cumulative translation differences of foreign operations, Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income, cash dividend paid and except Subsidiary holds shares of parent company.

Statement2,Page1

394

ENNOSTAR INC. STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement3

Statement3
Item Office equipment Leasehold improvements	Beginning Balance		Addition		Decrease - $ - - $	Transfer - $ - - $	EndingBalance
	882 $ 11,062 11,944 $		497 $ 637 1,134 $				1,379 $ 11,699 13,078 $

Statement3,Page1

395

ENNOSTAR INC.

STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement4

Item Beginning Balance Accumulated depreciation: Office equipment 123 $ Leasehold improvements 843 966 $	Addition 217 $ 1,178 1,395 $	Decrease Ending Balance - $ 340 $ - 2,021 - $ 2,361 $

Statement4,Page1

396

ENNOSTAR INC.

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement6

Statement6
Nature Function	Year ended December 31, 2023			Year ended December 31, 2022
	Classified as Operating Costs	Classified as Operating Expenses	Total	Classified as Operating Costs	Classified as Operating Expenses	Total
Employee Benefit Expense
Wages and salaries	228,942	-	228,942	118,995	-	118,995
Labour and health insurance fees	15,566	-	15,566	8,323	-	8,323
Pension costs	12,066	-	12,066	4,001	-	4,001
Directors'remuneration	11,078	-	11,078	12,610	-	12,610
Other personnel expenses	9,148	-	9,148	3,724	-	3,724
Depreciation Expense	1,395	-	1,395	895	-	895
Depletion Expense	-	-	-	-	-	-
Amortisation Expense	-	-	-	-	-	-

Note:

1. As at December 31, 2023 and 2022, the Company had 240 and 80 employees, including 6 and 6 non-employee directors.

2. A company whose stock is listed for trading on the stock exchange or over-the-counter securities exchange shall additionally disclose the following information ：

3. (1) Average employee benefit expense in current year $1,136. ((Total employee benefit expense of current year-Total directors’ compensation of current year) / (Number of employees of current year-Number of non-employee directors of current year))

4. Average employee benefit expense in previous year $1,825. ((Total employee benefit expense of previous year-Total directors’ compensation of previous year) /

5. (Number of employees of previous year-Number of non-employee directors of previous year))

6. (2) Average employees salaries in current year $978. (Total wages and salaries of current year/ (Number of employees of current year-Number employee of non- directors of current year))

Average employees salaries in previous year $1,608. (Total wages and salaries of previous year/ (Number of employees of previous year-Number employee of non- directors of previous year))

Statement6,Page1

397

ENNOSTAR INC.

SUMMARY STATEMENT OF CURRENT PERIOD EMPLOYEE BENEFITS, DEPRECIATION, DEPLETION AND AMORTIZATION EXPENSES BY FUNCTION (Cont.)

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Statement6

• (3) Adjustments of average employees salaries -39%. ((Average wages and salaries of current year-Average wages and salaries of prior year)/Average wages and salaries of prior year)

• (4) The supervisors' remuneration for the years ended December 31, 2023 and 2022 were $0 and $0.

Description:

1. The number of employees described in Note to this form should be calculated by using average number of employees and the basis of calculation was the same as the employee benefits expenses and employees’ salaries.

2. According to IAS19, employees may provide services in a full-time, part-time, permanent, irregular or temporary manner, including directors and other management personnel. Therefore, “employees” in this form include directors, managers, general employees and contract hires, etc., but not including supervisors, dispatched manpower, labor contracting or business outsourcing personnel.

3. 3.“Directors’ remuneration” refers to the remuneration received by all directors, retirement pension, director’s remuneration and business execution expenses, etc., but does not include employee directors’ salary, labor and health insurance.

4. 4.“Supervisors’ remuneration” refers to the remuneration received by all supervisors, supervisors’ remuneration and business execution expenses, etc.

Statement6,Page2

398