GS - AGM Information 2024 | FinancialReports.eu

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G-SHANK ENTERPRISE CO., LTD.

2024 Annual Shareholder’ Meeting

Meeting Agenda

(Translation)

June 14, 2024

Agenda of the 2024 Annual Shareholders’ Meetings ............................................................... 1 Report Matters ........................................................................................................................... 2 Adoption of Proposals ............................................................................................................. 12 Discussion Items ...................................................................................................................... 13 Extemporary Motions .............................................................................................................. 13 2023 Earnings Distribution Statement .................................................................................... 14 2023 Financial Statement ........................................................................................................ 15 Appendices: Articles of Incorporation .................................................................................................. 35 Rules of Procedure for Shareholders’ Meetings .............................................................. 40 Shareholdings of Directors ............................................................................................... 44

G-SHANK ENTERPRISE CO., LTD.

Agenda of the 2024 Annual Shareholders’ Meetings

I. Time: 9:00 a.m., June 14 (Friday), 2024
II. Place: The Company (No. 1, Jiuzhou Road, Jiudouli, Hsinwu District, Taoyuan City)
III. Meeting convention: Physical shareholders’ meeting
IV. Agenda of the Annual Shareholders’ Meetings:
i. Calling the meeting to order
ii. Chairman’s address

iii. Report matters

The 2023 Business Report
Audit Committee’s report on the 2023 Financial Statements
Report on the 2023 employees’ compensation and directors’ remuneration
Report on the investment in mainland China
Report on the Execution Status of the Second Unsecured Convertible Corporate

Bonds Conversion in the Domestic Market by the Company

iv. Adoption of proposals
Adoption of the 2023 Business Report, Individual and Consolidated Financial Statements
Adoption of the proposal of 2023 Dividend Distribution
v. Discussion items
The company plans to distribute cash from the capital surplus.
vi. Extemporary motions

vii. Adjournment

G-SHANK ENTERPRISE CO., LTD. The 2024 Annual Shareholders’ Meetings

i. Calling the meeting to order

ii. Chairman’s address

iii. Report matters

The 2023 Business Report
(1) Operating income overview

The Company’s consolidated operating income was NT$5,746,318 thousand in 2023, an decrease of 15.26% from the NT$6,781,030 thousand in 2022, mainly due to the decrease of sales in parts from an amount of NT$5,372,505 thousand in 2023 to NT$6,331,276 thousand in 2022, representing an increase of 15.14%. The company's decreased revenue was mainly attributed to the slow destocking of inventory by customers and the continued impact of the US-China trade war. The relevant statistics of the product sales of the Company are illustrated as follows:

Product sales statistics

Unit: NT$ Thousand

			Unit: NT$ Thousand
Year Item	Sales in 2023	Sales in 2022	Growth rate
Parts	5,372,505	6,331,276	-15.14%
Die	205,190	252,747	-18.82%
Toolings	63,727	82,089	-22.37%
Merchandise	104,896	114,918	-8.72%
Total	5,746,318	6,781,030	-15.26%

(2) Profit and loss overview

The Company’s net income before tax was NT$1,053,592 thousand in 2023, representing an decrease of 19.86% from the NT$1,314,741 thousand in 2022. The net income after tax in the 2023 was NT$761,997 thousand, representing a 22.55% decrease compared to NT$983,915 thousand in the 2022. Although costs and operating expenses remained stable, the decline in revenue by 15.14%, resulting in a decrease of NTD1.034 billion in profit. The profit and loss overview, budget execution, financial income and expenditure overview, and profitability analysis are detailed as follows:

Profit and Loss Overview

Unit: NT$ Thousand

Item	Actual amount in 2023	Actual amount in 2022	Increase / Decrease ratio
Operating income	5,746,318	6,781,030	-15.26%
Operating cost	4,081,875	4,821,562	-15.34%
Gross profit	1,664,443	1,959,468	-15.06%
Operating expense	906,861	919,787	-1.41%
Other income, expense, and loss - net	383	383	0.00%
Operating profit	757,965	1,040,064	-27.12%
Non-operating income and expense	295,627	274,677	7.63%
Net income before tax	1,053,592	1,314,741	-19.86%
Income tax expense	291,595	330,826	-11.86%
Net income	761,997	983,915	-22.55%
Net income attributable to
Parent company’s shareholders	675,040	867,603	-22.19%
Non-controlling interests	86,957	116,312	-25.24%
Earnings per share	3.54	4.58	-22.71%

(3) Budget execution

The Group did not disclose the financial forecast to the public in 2023

(4) Financial income and expense overview

Unit: NT$ Thousand

	Item	2023	2022	Increase (Decrease) ratio
Non-operating income and expense	Interest income	166,687	106,766	56.12%
	Other income	41,095	53,172	-22.71%
	Other profit and loss	54,854	(20,249)	-370.90%
	Financial cost	21,249	17,318	22.70%
	Percentage of profit from the associates under the equity method	9,987	11,233	-11.09%
	Foreign currency exchange loss – net	44,253	141,073	-68.63%
	Subtotal	295,627	274,677	7.63%

(5) Profitability analysis

	Item	Item	2023	2022
Financial structure	Ratio of Liability to Assets (%)		31.26	32.92
	Ratio of long term fund to fixed assets (%)		607.14	576.85
Profitability	Ratio of Return on Total assets (%)		7.98	10.58
	Ratio of Return on Shareholders’ Equity (%)		12.82	17.83
	Ratio to issued capital stock (%)	Operating income	39.72	54.55
		Net income before tax	55.21	68.96
	Profit Ratio (%)		13.26	14.51
	Earnings per share (NTD)		3.54	4.58

(6) Research and development status
(A) Industry analysis

The Company has been engaging in the tooling development and production for computer/ information/ home appliance-related components for a long time, and is committed to industrial dispersion with the hope of increasing the sales ratio in automotive/industrial equipment/ medical-related products. The Company had gradually achieved the set goal since the year of 2023 including 48% in 3C products, 30% in industrial equipment (including medical), and 22% in automotive products; also, the Company’s ultimate goal is to achieve one third of sales from each category.

(a) 3C electronics industry:

The emerging of 5G communication has driven the development of three major trends, broadband/big link/low latency that not only help breakthrough the bottleneck of data transmission speed, but also further activate the unman vehicles real-time networking, efficient smart factory, telemedicine, virtual education, etc., as well as B2B and B2C application revolution, which then further drive the development of next-generation component technologies, such as, motion tracking, environmental ranging, tactile feedback, etc., added with the further integration of AI/edge computing and sensors that will enable future perception solutions to have excellent capability in awareness and judgment. Naturally, such development trend is not out of nothing, instead, it must be based on the improvement of the existing software and hardware. Therefore, it is an inevitable trend for the key components to be lighter, higher precision, and more functional.

(b) Vehicle related:

The traditional automotive industry supply chain originally relied heavily on the mass production of various types of molds to reduce costs. In recent years, due to the rapid advancement of intelligent technology, all types of vehicles are equipped with a large number of electronic intelligent devices, which are closely linked to the traditional electronics industry. In addition, with the rise of environmental awareness, the electric vehicle industry with its clean characteristics has attracted major car manufacturers to invest, with a predicted penetration rate of 18% by 2025 and 35% by 2030. The future development is worth looking forward to.

All manufacturers have made automatic assembly and production the first choice in reducing cost while facing the challenge of soaring labor costs; also, it helps eliminate the trouble of personnel management. Under the circumstance, the demand for components that are indispensable to automation equipment, such as, relays/PLCs/fuse-free switches/breakers will grow constantly.

The Company is at the upstream position of the aforementioned three major industrial supply chains. In terms of the Company’s manufacturing process, in addition to the supply of electronic components, the electrical equipment/vehicle electronics/medical related...etc. can be transformed and supplied with the use of the existing technologies or equipment quickly, which is the Company’s core competence.

(B) Responsive strategies

(a) If the existing electronic component industry maintains the traditional processing

mode with customer-supplied materials, there is no possibility of responding to the global massive/rapid changes. Therefore, the Company will focus on ODM operation and participating in customer design in the future.

(b) The Company is mainly engaged in stamping and metal/plastic injection business with Stage-I one-step manufacturing process completed and has the manufacturing process extended to finished product assembly, an electromechanical department established for the design and production of automatic assembly machines so to achieve the goal of becoming a one-stop full-process supplier.
(c) The inheritance of craftsmanship in a technology-intensive industry is the key to success. In addition to continuing the operation of the education and training center and the industry-university cooperation with three universities, the Company has introduced a mentor-disciple system and one-on-one in-depth teaching program to have the Company’s core technology integrated and inherited effectively.
(d) Based on the existing 3C electronic components business to expand and enter the market of automotive-related and industrial equipment. The Company had achieved the set goal in sales since the year 2023, including 48% in 3C products, 22% in automotive products, and 30% in industrial equipment; also, the Company’s mid-term and long-term goal is to achieve one-third of sales from each category in 2025.
(e) The Company has implement TPS Toyota-style production management to improve corporate management per se, reduce mold-changing time, and enhance process linkage capabilities in response to the expansion of the automotive market. Also, the Company has initiated continuous, uninterrupted, and lean improvement of manpower, materials, and manufacturing processes to meet the high-standard requirements of the automotive market through visualized management, including purchasing, feeding, manufacturing, processing, quality assurance, shipping, etc.
(f) By strengthening customer relationship management, G-Shank's core value lies in manufacturing. We integrate the best process configuration based on customer needs, providing professional expertise to shorten customers' product development timelines and ensure customer satisfaction as their optimal partner in product development.

(C). Research & Development achievements

(a) Development of High-Speed Connector Mold for Micro Board-to-Board Applications

As electronic products pursue miniaturization, lightweight, and high performance, the development of micro board-to-board connectors is continuously evolving and applicable to different product types, with a wide range of applications and increasing customer demand. Therefore, our company has invested in high-speed terminal stamping mold technology through collaboration with Japanese technology. We have successfully developed nearly 10 related molds by learning and applying design, part processing, and mold assembly techniques, continuously accumulating technical experience to pursue more related projects.

(b) Development of Precision Spot Plating Technology

In conjunction with the micro board-to-board high-speed terminal stamping parts, our company has also invested in the development of precision spot plating technology. This technology can improve plating accuracy, reduce costs, and minimize waste by precisely plating small areas, enhancing coating uniformity,

strengthening product performance, and widely applied in electronics, medical, automotive, and other fields. Our company has successfully implemented this technology, with in-house design, processing, testing, and mass production of electroplating fixtures to ensure competitiveness.

Continuously improving existing stamping, electroplating, injection molding, and assembly processes, we have cooperated with European customers to develop and introduce contact parts for industrial equipment, which are crucial components to prevent equipment damage caused by power overload. We have developed an integrated production process from metal stamping, diode riveting, embedded injection molding, laser marking to electronic control testing, with a fully automated human-machine separation production mode, receiving high recognition from customers.

(d) Multiple invention patents

GUI detection software AI Master new (invention) patent, AIOT common gateway interface APIs platform technology new (invention) patent, and flat image precision dimension measurement new (invention) patent help reinforce the information technology and services of G-SHANK ENTERPRISE CO., LTD.

(7) The 2024 business plan outline
Operating strategy:

Uphold the corporate culture of kindness, integrity, courage, and responsibility. Extend and adjust the Company’s internal physique with “energy,” “action,” “movement,” “discipline,” “art,” “goodness,” “ability,” “integrity,” “truth,” “positiveness,” “harmony,” “sincerity,” “diligence” and “win.” Form an attitude of practical, courageous execution, and uplifting team morale. Also, provide customers with professional, fast, ample, and massive service with a stable, healthy, simple, and practical business policy. Finally, achieve the management indicators of self-interest, altruism, and the greater good of the society taking as a whole; enhance management in the three aspects of quality, cost, and benefit.

(a) Decentralized markets, diversified operations, and generated income.
(b) Enhance product quality control.
(c) Reduce costs and increase profitability.
(d) Internal management requires fair and reasonable rewards for merits and good deeds.
(e) 6S continuous pursuit of excellence
(f) Introduce TPS lean production system.
Expected sales volume and the reference: The Group does not have to disclose the financial forecast for 2024.
Important production and marketing policies:
(a) Substantiate ISO system, introduce IATF 16949, and improve product quality.
(b) Production and sales/production planning is responsible for internal and external production management to meet customer delivery requirements.
(c) The sales team is divided into 8 teams by function to exercise individually and

support mutually.

(d) Exercise the advantages of the Group and actively expand global deployment.
(e) Refine technology research and development and set up a “Technology Committee” to promote innovation and enhance competitiveness.
(f) Design of a brand new globally applicable website of the Group for international marketing.
(g) Substantiate education and training; actively train independent and internationalized talents.
(h) Quality objectives:
(01) Customer complaints are less than 8 cases per month.
(02) Sales return rate due to quality issue is PPM 2500 per month or less.
(03) Manufacturing process loss rate is below 1.15% per month.

Automotive Products Business Division:

(01) Number of customer complaints per month≦1 complaint
(02) Delivery completion rate≧91%
(8) Future development strategy of the Company

The Company focuses on the principle of “developing the main business,” that is, the development and production of precision molds. That’s how it is and will be for the Company. However, market information is constantly changing and technology is working progress; therefore, the Company’s development strategy will be implemented in multiple aspects:

(A) Continue to develop international market and fulfill market demand, we will be at where we are needed.
(B) Vertical integration of upper and lower manufacturing processes and one-stop solution to meet customer needs;
(C) Diversify market risks and aim to reach one-third of revenues from 3C/vehicle/industrial equipment by 2025.
(D) Cooperate with Japanese industry and create a win-win situation with technology/market mutual-supplementation.
(E) Participate in customer research and development, provide key mold technology, and work jointly to shorten the development schedule.

In addition, the Company continues to promote innovation and enhance quality control internally. The delivery management platform and the price management platform have been established currently. A control and management of raw material, price, manufacturing process, and delivery is systemized so to make the real-time and visible information available to the management. G-SHANK ENTERPRISE CO., LTD. basing on the various needs of customers plans to build a manufacturing process integration platform and to continuously improve and optimize the operation process for the satisfaction of customers and for a better operation per se in response to future challenges.

(9) The impact of external competitive environment, regulatory environment, and overall business environment

(A) Impact of external competitive environment

Stamping industry is with a low entry threshold. More than 80% of the domestic operations are by small-scale business entities (less than 30 employees) according to the statistics of Taiwan Mold & Die Association. While facing the demand for a low manufacturing cost, price competition is severe that is to the disadvantage of the Company.

Chinese government has forcefully supported the fundamental industries, including tooling industry, in recent years with various preferential measures offered continuously (tax relief / low-interest loans, etc.); also, Japan, South Korea, and Taiwan have invested in the tooling industry in China with many talents cultivated. The scale, technology, management, and other aspects of the current tooling industry in China have approached or even surpassed the tooling industry in Taiwan. The rise of tooling industry in mainland China is of disadvantage to the business operation of the Company.

Therefore, the Company expects to face more severe competitions externally and exchange rate risks continuously. Especially, electronic products are the most important exports of Taiwan. The Company will continue to rely on the profound mold technology capabilities, the continuous betterment of various manufacturing processes, and the integration of upstream and downstream processes to enhance quality control. The Company bases on the advanced automation production and peripheral equipment, integrated information management system, and self-developed visual inspection system (AI CCD vision system) to gradually realize unmanned and automation production. The Company has comprehensive mold design, processing, and assembly capabilities with more than 95% mold parts made in-house, and can quickly cooperate with customers to develop precision parts and to prepare samples. There are 15 factories and 2 offices globally with the mold R&D centers set up in Taiwan and Shanghai. The R&D budget accounts for 3% of the Company’s annual revenue. Facing the post-pandemic period, customers reducing inventory levels, multiple international conflicts, the ongoing US-China trade war, and rising raw material costs have led to a decline in the group's revenue and profitability.

In prospect, the Company is to work centralized on the mid-term and long-term transformation plan, and to focus on the development in the industrial machinery and smart automotives continuously with a hope to keep competitors in distance and to secure a long-term stable growth.

(B) Regulatory environment

Since the United Nations' adoption of the Paris Agreement in 2015, which sets the global target of limiting the rise in global temperatures to within 2°C above pre-industrial levels and striving to limit it within 1.5°C, countries and businesses around the world have proposed their own carbon reduction targets. For instance, the Taiwanese government plans to revise the "Greenhouse Gas Reduction and Management Act" to the "Climate Change Adaptation Act" and include a net-zero emissions target by 2050 in the regulation. Therefore, the global shift towards a low-carbon transformation is an irreversible trend.

Our company actively promotes carbon reduction in line with United Nations and national policies. Prior to embarking on carbon reduction initiatives, it is essential to understand our own greenhouse gas emissions in order to identify effective carbon reduction projects and maximize their benefits. To achieve this, G-Shank has adopted the international standard ISO 14064-1:2018 and systematically conducted greenhouse gas emission inventories and list establishment for our facilities in Taiwan (including the Xinwu and Bade plants). We have documented internal procedures and completed verification processes to provide reference for implementing cost-effective reduction measures in the

future. Our efforts are directed towards advancing towards a low-carbon economy.

We while facing the aforementioned external competition and domestic production cost increase base on the business philosophy of sustainable management, continuous technology innovation, manufacturing process integration from top to bottom, new project introduction, creation of an environment complying with regulations, etc. to be differentiated from the competitors in the sense of technology/delivery time/quality/environmental protection so to exercise our greatest advantage to give customers a peace of mind. We must secure an irreplaceable dominant position in the supply chain, adhere to a prudent and rigorous management attitude and concept, and continue to cultivate talents and develop specialized technologies at the 17 operation bases worldwide with a global supply network and sales system formed. The Company shall face up to the uncertain factors in the global economy calmly and respond to the challenges with a rigorous and responsible attitude for the pursuit of an optimized cost structure and the creation of better and finer quality products that are recognized by customers and will help generate more profits for the good of the shareholders and employees taking as a whole.

Audit Committee’s Report on the 2023 Financial Statements

G-SHANK ENTERPRISE CO., LTD.

Audit Report of the Audit Committee

The Board of Directors had prepared the 2023 Business Report, Financial Report (including the Consolidated Financial Report), and Earnings Distribution Proposal, of which, the Financial Report (including the Consolidated Financial Report) was audited by CPA Tseng, Chon-Hui and CPA Li, Pin-Chueh of Diwan

& Company with an audit report issued. The Audit Committee found no nonconformity in the aforementioned reports. This report is thus presented to the Company for review and approval pursuant to the provisions of the Securities and Exchange Act and the Company Act.

Sincerely yours,

The 2024 Annual Shareholders’ Meeting of G-SHANK ENTERPRISE CO., LTD.

Convener of the Audit Committee

March 8, 2024

Please review and approve the report on the 2023 compensation to employees and remuneration to directors.

Note:

(1) It is to be handled in accordance with Article 17 of the Company’s Articles of Incorporation.
(2) The Company’s net income before tax and before deducting compensation to employees and remuneration to directors was NT$879,280,638 in 2023. An appropriation for an amount equivalent to 2.62% of the net income, that was NT$23,000,000, was distributed as compensation to employees in cash. There is no appropriation for the remuneration to directors currently.
Please review and approve the report on the investment in mainland China.
Note:
(1) G-BAO (SHENZHEN) PRECISION MOLD COMPANY, a subsidiary of the Company, has reinvested in G-BAO (HUIZHOU) PRECISION MOLD COMPANY. As of March 2024, a total of RMB 55 million has been invested.
(2) Due to continuous heavy rainfall from April to June in 2023, the impact of three typhoons in August and September 2023, and changes in local building regulations, the construction progress of the plant has been delayed. We are currently working diligently to catch up and aiming to complete the construction of the plant by the end of 2024.
Please review and approve the report on the implementation of the second unsecured convertible corporate bonds issuance in the domestic market by the company.

Note:

(1) Our company issued domestic convertible corporate bonds to fund the purchase of production facilities, machinery, and plant assets, which was approved by the Financial Supervisory Commission on December 28, 112, under letter No. 11203651021.
(2) The total issuance amount of convertible corporate bonds is NT$1 billion, with each bond having a face value of NT$100,000. The bonds were issued at 113.8% of their face value on January 26, 113, with a three-year maturity period from the issuance date, a 0% coupon rate, and a conversion price of NT$72.2 at the time of issuance, the current conversion price is NT$71.3.

iv. Adoption of proposals

Proposal 1: (Proposed by the Board of Directors)

Cause of action: Please approve the Company’s 2023 Business Report, Individual and Consolidated Financial Reports.

Note:

(1) The Company’s 2023 Individual and Consolidated Financial Reports have been audited by the CPAs.
(2) The 2023 Business Report (Please refer to Page 2-10 of the Agenda Handbooks for details)
(3) The 2023 Financial Reports (Please refer to Page 15-34 of the Agenda Handbooks for details).

Resolutions:

Proposal 2: (Proposed by the Board of Directors)

Cause of action: The approve the Company’s 2023 Profit Distribution Proposal. Note:

(1) In the fiscal year 2023, the company's net profit after tax amounted to NT$675,040,170. After adjusting for the actuarial loss of the confirmed welfare plan in fiscal year 2023 and the share of other comprehensive income recognized in associated enterprises under the equity method but not reclassified to profit or loss, amounting to NT$633,553, and further provision of NT$67,440,662 for legal reserve, together with the available for distribution from previous years of NT$1,838,158,343, the total distributable profit for the year amounts to NT$2,445,124,298. It is proposed to distribute a cash dividend of NT$1.5 per share to shareholders (based on the total number of issued shares of 205,844,298 as of March 8, 2024), totaling NT$308,766,447. After distribution, the remaining undistributed earnings at the end of the period amount to NT$2,136,357,851. For details of profit distribution, please refer to page 14 of this manual.
(2) Cash dividends are calculated to the dollar (rounded up to dollar). The total amount of fractional shares is included in the Company’s other income. The Chairman will be authorized to determine the ex-dividend date, dividend distribution date, and other relevant matters after the resolutions of the general shareholders’ meeting.
(3) If there is change in the Company’s outstanding shares due to the repurchase of the Company’s stock shares, the employee’s executing stock warrant, etc., it is advisable for the shareholders’ meeting to authorize the Chairman to have dividend rate adjusted discretionarily.

Resolutions:

v. Discussion items

Proposal 1: (Proposed by the Board of Directors)

The company plans to distribute cash from the capital surplus.

Explanation:

(1) The company proposes to allocate a total of NT$205,844,298 in cash from the capital surplus generated by the issuance of shares above par value, in accordance with Article 241 of the Company Law. The cash distribution will be made to shareholders based on the shareholding recorded on the record date, with an amount of NT$1 per share. The calculation will be rounded down to the nearest integer, with any remaining fractions cumulatively recorded as other income of the company.
(2) Following approval at the shareholders' meeting, the Chairman is authorized to set the distribution record date, payment date, and other related matters.
(3) If there are subsequent changes in the number of outstanding shares due to share repurchases, conversion of convertible bonds into common shares, or the exercise of employee stock options, the Chairman is proposed to be granted full authority by the shareholders' meeting to adjust the dividend distribution rate accordingly.

Resolutions:

vi. Extemporary motions vii. Adjournment

G-SHANK ENTERPRISE CO., LTD. The 2023 Earnings Distribution Statement

Unit: NTD

	Unit: NTD	Unit: NTD	Unit: NTD	Unit: NTD
Item	Amount
Unappropriated earnings - beginning		$1,838,158,343
Add: The 2023 net profit after tax				675,040,170
Minus: Actuarial loss from the 2023 defined benefit plan				(596,108)
Minus: The percentage of other comprehensive profit and loss from the associates under the equity method - items not reclassified to profit or loss with an adjustment made to the unappropriated earnings				(37,445)
Minus: Legal reserve appropriated				(67,440,662)
Distributable earnings			2,445,124,298
Minus: Distribution items Shareholders’ dividend – cash (NT$1.5/share)			(308,766,447)
Unappropriated earnings - ending		$	2,136,357,851

Note: The aforementioned shareholder dividends are based on the 205,844,298 common stock shares issued by the Company as of March 8, 2024.

INDEPENDENT AUDITOR’S REPORT

To: G-SHANK ENTERPRISE CO., LTD.

INDEPENDENT AUDITOR’S OPINION

We have audited the accompanying consolidated balance sheets of G-SHANK ENTERPRISE CO., LTD. (hereinafter referred to as “G-SHANK GROUP”) and its subsidiaries as of December 31, 2023, and 2022, and the related consolidated statements of comprehensive income, retained earnings, and cash flows for the years then ended.

In our opinion, based on our audit and the audit reports of other independent auditors (please refer to the relevant paragraphs for details), the consolidated financial statements referred to above present fairly, in all material respects, the financial position of G-SHANK GROUP as of December 31, 2023, and 2022, and the results of its operations and its cash flows for the years then ended in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firm” and International Financial Reporting Standards (IFRSs) that was recognized by the Financial Supervisory Commission, International Accounting Standards, Interpretations, and Notices (IFRSs), Interpretation (IFRIC) and Interpretative Announcement (SIC).

BASIS OF AN AUDIT OPINION

We conducted our audit in accordance with the “Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountings” and generally accepted auditing standards. The responsibilities of the independent auditors under these standards will be further explained in the audit performed on the consolidated financial statements. The personnel of the CPA Firm subject to the independence requirement has acted independently from the business operations of G-SHANK GROUP in accordance with the Code of Ethics and have performed other responsibilities of the Code of Ethics. We believe that our audit and other CPA’s audit reports provide a reasonable basis for our opinion.

KEY AUDIT MATTERS

The key audit matters refer to the most important matters in auditing the 2023 consolidated financial statements of G-SHANK GROUP in accordance with the professional judgment of the independent auditors. These matters have been handled during the process of reviewing the consolidated financial statements as a whole with audit opinions formed. The independent auditor does not express an independent opinion on these matters. The independent auditor determines that the key audit matters to be communicated in the audit report are as follows:

I. Income recognition

Please refer to Note IV.17 to the consolidated financial statements for the accounting policy on income recognition. Also, please refer to Note VI.24 for the operating income in detail.

The operating income of G-SHANK GROUP is mainly generated from the production and sales of molds and stamping parts. The timing of income recognition is based on the transaction conditions agreed with each individual customer. An inappropriate timing for income recognition and unreasonable estimation of the refund liabilities for sales returns and sales discounts are key matters for income recognition, which will have an impact on the financial performance of G-SHANK GROUP. The independent auditor has the income recognition classified as a key audit matter in auditing the consolidated financial statements of G-SHANK GROUP.

The auditing procedures implemented by the independent auditors for the aforementioned key audit matters include: Understanding the sales process of G-SHANK GROUP, testing the internal control related to income recognition, reviewing the terms of the sales with the major customers, performing income cut-off tests, and checking the book-entry of sales returns and discounts, the measurement of the estimated refund liabilities for sales returns and sales discounts, and the implementation of analytical procedures.

II. Inventory evaluation

Please refer to Note IV.11 of the consolidated financial statements for the accounting policy of inventory evaluation. please refer to Note V.2(4) of the consolidated financial statements for the major sources of uncertainty of significant estimates and assumptions. Please refer to Note VI.5 of the consolidated financial statements for inventory details.

G-SHANK GROUP is mainly engaged in the production and sale of molds and stamping parts with the production and sales policies formed that are indirectly affected by the needs of end-user. The cost of inventory could be un-recoverable due to the occurrence of inventory damaged, outdated, or price dropped entirely or partially; also, when the estimated cost to be invested to completion and the estimated sale expenses increased. The use and value of inventories rely on the management’s inventory policy and sale forecast. However, a forecast comes with uncertainties. Therefore, the independent director has the inventory evaluation classified as one of the key audit matters in auditing the consolidated financial statements of G-SHANK GROUP.

A decisive factor in the value of inventories is the estimated net realizable value, which is based on the most reliable evidence of the expected realizable amount of inventories available at the time of estimation. Therefore, the relevant audit procedures of the independent auditor include reviewing and assessing whether the policy of G-SHANK GROUP in determining the net realizable value of inventories can reasonably reflect the forecast of future inventory sales, historical experience and other specific circumstances, inventory aging analysis and testing so to identify whether an allowance for inventory loss in valuation is appropriated reasonably according to historical experience for a specific obsolete inventory, the correlation between the assessment of past events and the yearend situation, and the impact of the price or cost fluctuation related to the said post events on the net realizable value of inventory.

OTHER MATTERS

Regarding the subsidiaries included in the consolidated financial report of G-SHANK GROUP and the relevant information of the subsidiaries disclosed in Note XIII of the consolidated financial report, the financial statements as of December 31, 2023 and 2022 of G-SHANK, INC. are prepared in conformity with the generally accepted principles of the USA, the financial statements as of December 31, 2023, and 2022 of G-S G-SHANK (Thai) Co., Ltd. are prepared in conformity with the generally accepted principles of Thailand, and the financial statements as of December 31, 2023, and 2022 of G-SHANK ENTERPRISE (M) SDN are prepared in conformity with the generally accepted principles of Malaysia, which were audited by other certified public accountants instead of the independent auditor. The financial statements of G-SHANK, INC., G-SHANK (Thai) Co., Ltd., and G-SHANK ENTERPRISE (M) SDN are translated in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and International Financial Reporting Standards (IFRS) that was recognized by the Financial Supervisory Commission, International Accounting Standards, Interpretations, and Notices (IFRS), Interpretation (IFRIC) and Interpretative Announcement (SIC). The independent auditor has completed all necessary auditing procedures. Therefore, the opinions of the independent auditor on the unadjusted amounts in the aforementioned financial statements of the subsidiaries are based on the audit reports of other certified public accountants and the results of additional audit procedures performed by them in compliance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and generally auditing principles of the ROC. The

total assets of the aforementioned subsidiaries were NT$1,056,787 thousand and NT$1,077,162 thousand on December 31, 2023, and December 31, 2022, accounting for 10.76% and 11.14% of the total consolidated assets, respectively. The net operating income from January 1 to December 31, 2023 and 2022 were NT$787,250 thousand and NT$794,679 thousand, accounting for 13.70% and 11.72% of the consolidated net operating income, respectively.

Please refer to the independent auditor’s report issued with additional sections added by the independent auditor for the 2023 and 2022 parent alone financial reports prepared by G-SHANK GROUP.

THE RESPONSIBILITY OF THE MANAGEMENT AND GOVERNANCE UNIT FOR THE CONSOLIDATED FINANCIAL STATEMENTS

The responsibility of the management is to have the consolidated financial statements presented fairly, in all material respects, in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms,” International Financial Reporting Standards (IFRSs) that were recognized by the Financial Supervisory Commission, International Accounting Standards, Interpretations, and Notices (IFRSs), Interpretation (IFRIC) and Interpretative Announcement (SIC). Also, maintain the necessary internal controls related to the consolidated financial statements to ensure that the consolidated financial statements are free of any material misstatement arising from frauds or errors.

In the preparation of the consolidated financial statements, the management’s responsibility also includes assessing the continuing operation of G-SHANK GROUP, the disclosure of the relevant matters, and the adoption of the continuing operation accounting base, unless the management intends to liquidate G-SHANK GROUP or cease the business operation, or there is lack of any option except for liquidation or suspension.

The governance unit (including the Audit Committee or supervisors) of G-SHANK GROUP is responsible for supervising the financial reporting process.

CPA’S RESPONSIBILITY FOR AUDITING THE CONSOLIDATED FINANCIAL STATEMENTS

The purpose of the independent auditor’s auditing of the consolidated financial statements is to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement arising from frauds or errors and with an audit report issued. Reasonable assurance means high assurance. However, the audit conducted in accordance with generally accepted auditing standards does not guarantee to have any material misstatement in the consolidated financial statements detected. Material misstatement could be arising from frauds or errors. If the misstated amount or aggregated amount is reasonably expected to affect the economic decisions made by the readers of the consolidated financial statements, it is considered significant.

The independent auditors when conducting the audit in accordance with generally accepted auditing standards shall exercise professional judgment and maintain professional suspicion. The independent auditors also perform the following auditing tasks:

I. Identify and evaluate the risk of material misstatement arising from frauds or errors of the consolidated financial statements; design and implement proper responsive measures for the assessed risks; also, obtain sufficient and adequate audit evidence for forming an audit opinion. Frauds may involve conspiracy, forgery, deliberate omission, false declaration, or violation of internal control; therefore, the risk of material misstatement arising from fraud is higher than that caused by errors.
II. Obtain the necessary understanding of the internal control related to the audit in order to design appropriate audit procedures under the circumstance, but the purpose is not to express an opinion on

the effectiveness of the internal control of G-SHANK GROUP.

III. Assess the appropriateness of the accounting policies adopted by the management; also, the reasonableness of the accounting estimates and related disclosures made.
IV. Based on the audit evidence obtained, make conclusions on the suitability of the continuing operation accounting base adopted by the management and whether or not the events or circumstances causing significant doubts to the continuing operation ability of G-SHANK GROUP are with significant uncertainties. If the independent auditors believe that such events or circumstances are with significant uncertainties, it is necessary to remind the readers of the consolidated financial statements in the audit report to pay attention to the relevant disclosure or to revise the audit opinion when such disclosures are inappropriate. The conclusion of the independent auditors is based on the audit evidence obtained as of the audit report date. However, future events or circumstances may result in the inability of G-SHANK GROUP to continue operating.
V. Assess the overall presentation, structure, and content of the consolidated financial statements (including the relevant notes) and whether or not the relevant transactions and events in the consolidated financial statements are presented fairly.
VI. Obtain sufficient and appropriate audit evidence on the financial information of the individual business entity within the GROUP in order to express an opinion on the consolidated financial statements. The independent auditors are responsible for guiding, supervising, and implementing the auditing process of the GROUP; also, are responsible for forming an opinion on the audit of the GROUP.

The matters communicated by the independent auditors to the governing unit include the scope and timing of the planned audit, and the significant findings (including the major nonconformities of internal controls identified in the auditing process).

The independent auditors have provided to the governing unit the declaration of independence of the CPA Firm personnel subject to the Code of Ethics; also, have communicated with the governing unit regarding the relationship and other matters (including the relevant protection measures) that may affect the independence of the independent auditors.

The independent auditors have based on the communications with the governing unit to determine the key audit matters to be performed on the 2021 consolidated financial statements of G-SHANK GROUP. The independent auditors shall state the key audit matters in the audit report except for the specific matters prohibited from being disclosed, or, in rare cases; the independent auditors decide not to have specific matters communicated in the audit report since the negative effect of such disclosure can be reasonably expected to be greater than the increase of public interest.

Diwan & Company Financial Supervisory Commission Certificate No.: FSC-Shen-Tzi No. 1070312218 FSC-Shen-Tzi No. 1100149341

Tseng, Chiung-Hui

CPAs:

Li, Pin-Chueh

March 8, 2024

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(December 31, 2023 & 2022 have been audited)

(In Thousands of New Taiwan Dollars)

ASSETS	ASSETS	Notes	December 31,2023	December 31,2023	December 31,2022	December 31,2022
Code	Accounts		Amount	%	Amount	%
11xx 1100 1110 1150 1170 1180 1200 1220 130x 1470 1476 15xx 1517 1550 1600 1755 1780 1840 1915 1920 1990 1xxx	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Notes receivable, net Accounts receivable, net Accounts receivable- related parties Other receivables Current tax assets Inventory Prepayments and Other current assets Other financial assets-current Total current assets Noncurrent Asset Financial assets at fair value through other comprehensive income - noncurrent Investments accounted for using equity method Property, Plant and Equipment Right-of-use asset Intangible assets Deferred tax assets Prepayments for business facilities Refundable deposits Other noncurrent assets, others Total noncurrent Asset Total Assets	4 & 6.(1) 4 & 6.(2) 4,5,6.(3) & 6.(4) 4,5 & 6.(4) 4,5 & 7 4,5 & 6.(4) 4 & 6.(29) 4,5 & 6.(5) 4,6.(6) & 8 4,5,6.(7) & 6.(22) 4 & 6.(8) 4,5,6.(9) & 9 4,6.(10) & 6.(14) 4 & 6.(11) 4 & 6.(29) 4 & 9 8	3,707,859 $ 1,446,978 41,327 1,336,211 3 59,001 7,176 798,495 48,080 30,163 7,475,293 320,903 168,248 1,239,275 257,954 661 15,205 328,695 3,787 11,426 2,346,154 9,821,447 $	38 15 - 14 - 1 - 8 - - 76 3 2 13 3 - - 3 - - 24 100	4,006,405 $ 866,063 42,518 1,584,250 15 50,086 - 1,022,566 40,416 31,741 7,644,060 262,023 161,170 1,253,826 255,416 1,037 29,112 46,394 4,553 11,722 2,025,253 9,669,313 $	41 9 - 16 - 1 - 11 - 1 79 3 2 13 3 - - - - - 21 100

(CONTINUING)

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(December 31, 2023 & 2022 have been audited)

			(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Liabilities and Equity			December 31,2023		December 31,2022
Code	Accounts	Notes	Amount	%	Amount	%
21xx 2100 2130 2170 2180 2200 2220 2230 2280 2322 2300 25xx 2540 2570 2580 2640 2645 2xxx 31xx 3100 3110 3140 3200 3300 3310 3320 3350 3400 3410 3420 36xx 3xxx	Current liabilities Short-term loans Contract liabilities - current Accounts payable Accounts payable-related parties Other payables Other payables-related parties Current tax liabilities Lease liabilities-current Current portion of long-term loans payable Other current liabilities Total current liabilities Non-current liabilities Long-term loans Deferred tax liabilities Lease liabilities - noncurrent Net defined benefit liabilities- noncurrent Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to owners of parent Share capital Ordinary shares Advance Receipts for Capital Stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on translation of foreign financial statements Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income Total equity attributable to owners of parent Non-controlling interests Total Equity Total liabilities and equity	4,6.(12) & 6.(31) 4 & 6.(24) 4 4 & 7 4,6.(9),6.(15) & 6.(25) 4 & 7 4 & 6.(29) 4,6.(14) & 6.(31) 4,6.(13) & 6.(31) 4,6.(13) & 6.(31) 4 & 6.(29) 4,6.(14) & 6.(31) 4,5 & 6.(15) 4,6.(16),6.(24) & 11 4,6.(17),6.(20),6.(23) & 11 6.(18) & 6.(20) 6.(19) 4,6.(20) & 11 4, 6.(21), 6.(22) & 6.(28) 4, 6.(7), 6.(8), 6.(21) & 6.(28) 4 & 6.(22)	1,210,000 $ 19,431 435,314 1,277 488,841 2,574 60,532 58,922 - 20,367 2,297,258 - 674,593 57,461 29,956 10,669 772,679 3,069,937 1,906,543 1,900 489,905 981,760 284,690 2,512,565 (409,638) 300,180 6,067,905 683,605 6,751,510 9,821,447 $	12 - 4 - 5 - 1 1 - - 23 - 7 1 - - 8 31 19 - 5 10 3 26 (4) 3 62 7 69 100	1,070,000 $ 39,036 545,261 11,289 544,084 5,155 97,513 58,142 38,735 27,409 2,436,624 40,297 616,485 53,530 31,929 4,704 746,945 3,183,569 1,897,843 8,700 472,021 892,927 284,690 2,365,496 (338,584) 237,702 5,820,795 664,949 6,485,744 9,669,313 $	11 - 6 - 6 - 1 1 - - 25 1 6 1 - - 8 33 20 - 5 9 3 24 (3) 2 60 7 67 100

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (2023 & 2022)

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

Code	Accounts	Notes	2023	2023	2022	2022
			Amount	%	Amount	%
4000 5000 5900 6000 6100 6200 6300 6450 6500 6900 7000 7100 7010 7020 7050 7060 7630 7900 7950 8200 8300 8310 8311 8316 8320 8349 8360 8361 8399 8500 8600 8610 8620 8700 8710 8720 9750 9850	Sales revenue Operating costs Gross profit from operations Operating expense Selling and marketing expenses General and administrative expenses Research and development expenses Loss (reversal) of expected credit loss Total operating expense Net other income (expenses) Net operating income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of the profit (loss) of associates Foreign exchange gains (loss) Total non-operating income and expenses Profit (loss) from continuing operations before tax Income Tax Expense Profit (loss) for the period Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss： Remeasurements of the defined benefit plan Unrealised gain (loss) on financial assets measured at fair through other comprehensive income Share of the other comprehensive (loss) income of associates Income tax benefit (expense) relating to items that will not be reclassified subsequently to profit or loss Other comprehensive income (loss) that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss： Exchange differences on translating foreign operations Income tax expense relating to items that may be reclassified subsequently to profit or loss Total items that may be reclassified subsequently to profit or loss Total other comprehensive income (loss) for the period Total comprehensive income for the period Net profit (loss) attributable to： Owners of the Corporation Non-controlling interests Net income Total comprehensive income attributable to： Owners of the Corporation Non-controlling interests Total comprehensive income Earnings per share (dollar) Basic Diluted	4,6.(24) & 7 4,6.(5),6.(15),6.(25) & 7 4,6.(14),6.(15) & 6.(25) 4,5 & 6.(4) 4,6.(9),6.(25) & 6.(26) 6.(27) 6.(7) & 6.(27) 6.(2),6.(9) & 6.(27) 4,6(14) & 6.(27) 4,6(8) & 6.(27) 4 & 6.(27) 4 & 6.(29) 4,6(7),6.(8),6.(15),6.(21) & 6.(28) 4 & 6.(30)	5,746,318 $ (4,081,875)	100 (71) 29 (5) (8) (3) - (16) - 13 3 - 1 - - 1 5 18 (5) 13 - 1 - - 1 (1) - (1) - 13 12 1 13 12 1 13	6,781,030 $ (4,821,562)	100 (71) 29 (4) (7) (3) - (14) - 15 1 1 - - - 2 4 19 (4) 15 - (1) - - (1) - 2 - 2 1 16 - 13 2 15 - - 14 2 16
			1,664,443 (255,336) (482,032) (171,853) 2,360 (906,861) 383 757,965 166,687 41,095 54,854 (21,249) 9,987 44,253 295,627 1,053,592 (291,595) 761,997 (596) 58,880 3,561 - 61,845 (82,836) - (82,836) (20,991) 741,006 $ 675,040 $ 86,957 761,997 $ 665,831 $ 75,175 741,006 $ 3.54 $ 3.49 $		1,959,468 (270,700) (457,437) (194,023) 2,373 (919,787) 383 1,040,064 106,766 53,172 (20,249) (17,318) 11,233 141,073 274,677 1,314,741 (330,826) 983,915 20,496 (37,315) (4,046) - (20,865) 114,643 - 114,643 93,778 1,077,693 $ 867,603 $ 116,312 983,915 $ 950,006 $ 127,687 1,077,693 $ 4.58 $ 4.49 $

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(2023 & 2022)

(In Thousands of New Taiwan Dollars)

Accounts				Equity A	ttributable to Owners o	f the Corporation				Non-controlling Interests	Total Equity
	Share Capital		Advance Receipts for Capital Stock		Retained Earnings		Other	Equity	Total
	Ordinary Shares	Advance Receipts for Capital Stock		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gains and Losses on Financial Assets at Fair Value Through Other Cpmprehensive Income
BALANCE AT JANUARY 1, 2022 Appropriation of 2021 earnings (Note 6.(20)) Legal reserve Cash dividends to ordinary shareholders Share of the other comprehensive income of associates disposal equity instruments designated as at fair value hrough other comprehensive income Received donation from shareholders Net profit for 2022 Other comprehensive income for 2022 Total comprehensive income for 2022 Share-based payment expenses Cash dividends paid by subsidiaries to non-controlling interests BALANCE AT DECEMBER 31, 2022 Appropriation of 2022 earnings (Note 6.(20)) Legal reserve Cash dividends to ordinary shareholders Share of the other comprehensive income of associates disposal equity instruments designated as at fair value hrough other comprehensive income Received donation from shareholders Net profit for 2023 Other comprehensive income for 2023 Total comprehensive income for 2023 Share-based payment transaction Cash dividends paid by subsidiaries to non-controlling interests BALANCE AT DECEMBER 31, 2023	1,878,323 $ - - - - - - - 19,520 - 1,897,843 $ - - - - - - - 8,700 - 1,906,543 $	$ - - - - - - - - 8,700 - 8,700 $ - - - - - - - (6,800) - 1,900 $	452,744 $ - - 15 27 - - - 19,235 - 472,021 $ - - 296 55 - - - 17,533 - 489,905 $	827,106 $ 65,821 - - - - - - - - 892,927 $ 88,833 - - - - - - - - 981,760 $	284,690 $ - - - - - - - - - 284,690 $ - - - - - - - - - 284,690 $	1,937,433 $ (65,821) (394,447) - - 867,603 20,728 888,331 - - 2,365,496 $ (88,833) (438,505) - - 675,040 (633) 674,407 - - 2,512,565 $	(441,852) $ - - - - - 103,268 103,268 - - (338,584) $ - - - - - (71,054) (71,054) - - (409,638) $	279,295 $ - - - - - (41,593) (41,593) - - 237,702 $ - - - - - 62,478 62,478 - - 300,180 $	5,217,739 $ - (394,447) 15 27 867,603 82,403 950,006 47,455 - 5,820,795 $ - (438,505) 296 55 675,040 (9,209)	601,439 $ - - - - 116,312 11,375 127,687 - (64,177) 664,949 $ - - - - 86,957 (11,782) 75,175 - (56,519) 683,605 $	5,819,178 $ - (394,447) 15 27 983,915 93,778
											1,077,693
											47,455 (64,177)
											6,485,744 $ - (438,505) 296 55 761,997 (20,991)
									665,831 19,433 - 6,067,905 $		741,006
											19,433 (56,519)
											6,751,510 $

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

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(2023 & 2022)

(2023 & 2022)
	(In Thousands of New Taiwan Dollars)
Description	2023	2022
CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax from continuing operations Adjustments for The profit or loss items which did not affect cash flows: Depreciation Amortization Expected credit (gains) loss Net (gains) losses on financial assets and liabilities at fair value through profit or loss Interest expenses Interest income Dividends income Share-based payment expenses Share of profit of associates ventures accounted for using the equity method Loss on disposal of property, plant and equipment Unrealized foreign exchange gains Other item Changes in operating assets and liabilities： Financial assets at fair value through profit or loss Notes receivables Accounts receivable Accounts receivable-related parties Other receivables Inventories Prepayments and Other current assets Current contract Accounts payable Accounts payable-related parties Other payables Other payables-related parties Other current liabilities Net defined benefit liabilities Cash generated from operating activities: Interest received Dividends received Interest paid Income tax paid Net cash flows from operating activities	1,053,592 $ 177,932 15,352 (2,360) (63,064) 21,249 (166,687) (9,500) 15,766 (9,987) 8,115 (23,533) (1,585) (517,225) 1,191 243,753 12 4,769 219,521 (7,664) (19,605) (109,747) (10,012) (51,607) (2,581) (7,042) (2,569) 756,484 152,986 9,500 (20,934) (263,737) 634,299	1,314,741 $ 178,256 27,341 (2,373) 18,383 17,318 (106,766) (13,571) 5,595 (11,233) 1,824 (10,306) - 261,804 13,330 (102,216) 97 (11,024) 64,625 12,278 24,288 (3,688) 7,376 (6,258) 1,548 (16,667) (9,589) 1,655,113 99,646 13,571 (17,041) (273,264) 1,478,025

(Continuing)

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(2023 & 2022)

(2023 & 2022)
	(In Thousands of New Taiwan Dollars)
Description	2023	2022
CASH FLOWS FROM INVESTING ACTIVITIES Dividends received from investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Decrease in refundable deposits Acquisition of intangible assets Acquisition of right-of-use assets Decrease in other current financial assets Increase in other noncurrent assets Increase in prepayments for business facilities Net cash (used in) provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (Decrease) in Short-term loans Issuance of Long-term loans Repayment of long-term loans Decrease in guarantee doposits received Cash payment for the principal portion of the lease liabilities Payment of cash dividends Employee exercise of stock warrant Cash dividends paid by subsidiaries to non-controlling interests Other financing activities Net cash used in financing activities Effect of changes in exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	6,766 $ (129,552) 4,107 766 (456) (2,539) 1,697 (14,394) (322,466) (456,071) 140,000 - (79,032) 7,550 (15,345) (438,505) 3,667 (56,519) 55 (438,129) (38,645) (298,546) 4,006,405 3,707,859 $	3,782 $ (155,561) 1,986 304 (600) - 13,862 (19,945) (29,023) (185,195) (190,000) 2,708 - - (19,088) (394,447) 41,860 (64,177) 27 (623,117) 104,439 774,152 3,232,253 4,006,405 $

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

INDEPENDENT AUDITOR’S REPORT

To: G-SHANK ENTERPRISE CO., LTD.

INDEPENDENT AUDITOR’S OPINION

We have audited the accompanying parent company only balance sheets of G-SHANK ENTERPRISE CO., LTD. as of December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, retained earnings, and cash flows for the years then ended.

In our opinion, based on our audit and the audit reports of other independent auditors (please refer to the relevant paragraphs for details), the parent company only financial statements referred to above present fairly, in all material respects, the financial position of G-SHANK as of December 31, 2023 and 2022, and the results of its operations and its cash flows for the years then ended in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firm”.

BASIS OF AN AUDIT OPINION

We conducted our audit in accordance with the “Rules Governing Auditing and Certification of Financial Statements by Certified Public Accountings” and generally accepted auditing standards. The responsibilities of the independent auditors under these standards will be further explained in the audit performed on the consolidated financial statements. The personnel of the CPA Firm subject to the independence requirement has acted independently from the business operations of G-SHANK in accordance with the Code of Ethics and have performed other responsibilities of the Code of Ethics. We believe that our audit and other CPA’s audit reports provide a reasonable basis for our opinion.

KEY AUDIT MATTERS

The key audit matters refer to the most important matters in auditing the 2023 parent company only financial statements of G-SHANK in accordance with the professional judgment of the independent auditors. These matters have been handled during the process of reviewing the parent company only financial statements as a whole with audit opinions formed. The independent auditor does not express an independent opinion on these matters. The independent auditor determines that the key audit matters to be communicated in the audit report are as follows:

III. Income recognition

Please refer to Note 4.(15) to the parent company only financial statements for the accounting policy on income recognition. Also, please refer to Note 6.(21) for the operating income in detail.

The operating income of G-SHANK is mainly generated from the production and sales of molds and stamping parts. The timing of income recognition is based on the transaction conditions agreed with each individual customer. An inappropriate timing for income recognition and unreasonable estimation of the refund liabilities for sales returns and sales discounts are key matters for income recognition, which will have an impact on the financial performance of G-SHANK. The independent auditor has the income recognition classified as a key audit matter in auditing the parent company only financial statements of G-SHANK.

The auditing procedures implemented by the independent auditors for the aforementioned key audit

matters include: Understanding the sales process of G-SHANK, testing the internal control related to income recognition, reviewing the terms of the sales with the major customers, performing income cut-off tests, and checking the book-entry of sales returns and discounts, the measurement of the estimated refund liabilities for sales returns and sales discounts, and the implementation of analytical procedures.

IV. Inventory evaluation

Please refer to Note 4.(9) of the parent company only financial statements for the accounting policy of inventory evaluation. please refer to Note 5.(2)(C) of the parent company only financial statements for the major sources of uncertainty of significant estimates and assumptions. Please refer to Note 6.(5) of the parent company only financial statements for inventory details.

G-SHANK is mainly engaged in the production and sale of molds and stamping parts with the production and sales policies formed that are indirectly affected by the needs of end-user. The cost of inventory could be un-recoverable due to the occurrence of inventory damaged, outdated, or price dropped entirely or partially; also, when the estimated cost to be invested to completion and the estimated sale expenses increased. The use and value of inventories rely on the management’s inventory policy and sale forecast. However, a forecast comes with uncertainties. Therefore, the independent director has the inventory evaluation classified as one of the key audit matters in auditing the parent company only financial statements of G-SHANK.

A decisive factor in the value of inventories is the estimated net realizable value, which is based on the most reliable evidence of the expected realizable amount of inventories available at the time of estimation. Therefore, the relevant audit procedures of the independent auditor include reviewing and assessing whether the policy of G-SHANK in determining the net realizable value of inventories can reasonably reflect the forecast of future inventory sales, historical experience and other specific circumstances, inventory aging analysis and testing so to identify whether an allowance for inventory loss in valuation is appropriated reasonably according to historical experience for a specific obsolete inventory, the correlation between the assessment of past events and the yearend situation, and the impact of the price or cost fluctuation related to the said post events on the net realizable value of inventory.

OTHER MATTERS

Regarding the parent company only financial report of G-SHANK and the relevant information of the investee company disclosed in Note 13. of the parent company only financial report, the financial statements as of December 31, 2023 and 2022 of G-SHANK, INC. are prepared in conformity with the generally accepted principles of the USA, the financial statements as of December 31, 2023 and 2022 of G-S G-SHANK (Thai) Co., Ltd. are prepared in conformity with the generally accepted principles of Thailand, and the financial statements as of December 31, 2023 and 2022 of G-SHANK ENTERPRISE (M) SDN are prepared in conformity with the generally accepted principles of Malaysia, which were audited by other certified public accountants instead of the independent auditor. The financial statements of G-SHANK, INC., G-SHANK (Thai) Co., Ltd., and G-SHANK ENTERPRISE (M) SDN are translated in conformity with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and International Financial Reporting Standards (IFRS) that was recognized by the Financial Supervisory Commission, International Accounting Standards, Interpretations, and Notices (IFRS), Interpretation (IFRIC) and Interpretative Announcement (SIC). The independent auditor has completed all necessary auditing procedures. Therefore, the opinions of the independent auditor on the unadjusted amounts in the aforementioned financial statements of the subsidiaries are based on the audit reports of other certified public accountants and the results of additional audit procedures performed by them in compliance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and generally auditing principles of the ROC. The total assets of the aforementioned subsidiaries

were NT$916,473 thousand and NT$909,365 thousand on December 31, 2023 and December 31, 2022 accounting for 10.86% and 11.06% of the total parent company only assets, respectively. The net operating income for 2023 and 2022 were NT$115,485 thousand and NT$73,822 thousand, accounting for 13.49% and 6.82% of the parent company only net operating income, respectively. Recognized the other comprehensive profit and loss of the subsidiaries and affiliated companies for an amount of NT$(53,971) thousand and NT$59,367 thousand, accounting for (0.82)% and 6.25% of the total comprehensive profit and loss, respectively.

THE RESPONSIBILITY OF THE MANAGEMENT AND GOVERNANCE UNIT FOR THE CONSOLIDATED FINANCIAL STATEMENTS

The responsibility of the management is to have the parent alone financial report prepared fairly in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Firms” and maintain the necessary internal control related to the preparation of the parent alone financial report so to assure that the financial report is free of material misstatement.

In the preparation of the parent company only financial statements, the management’s responsibility also includes assessing the continuing operation of G-SHANK, the disclosure of the relevant matters, and the adoption of the continuing operation accounting base, unless the management intends to liquidate G-SHANK or cease the business operation, or there is lack of any option except for liquidation or suspension.

The governance unit (including the Audit Committee or supervisors) of G-SHANK is responsible for supervising the financial reporting process.

CPA’S RESPONSIBILITY FOR AUDITING THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

The purpose of the independent auditor’s auditing of the parent company only financial statements is to obtain reasonable assurance about whether the parent company only financial statements are free of material misstatement arising from frauds or errors and with an audit report issued. Reasonable assurance means high assurance. However, the audit conducted in accordance with generally accepted auditing standards does not guarantee to have any material misstatement in the parent company only financial statements detected. Material misstatement could be arising from frauds or errors. If the misstated amount or aggregated amount is reasonably expected to affect the economic decisions made by the readers of the consolidated financial statements, it is considered significant.

VII. Identify and evaluate the risk of material misstatement arising from frauds or errors of the parent company only financial statements; design and implement proper responsive measures for the assessed risks; also, obtain sufficient and adequate audit evidence for forming an audit opinion. Frauds may involve conspiracy, forgery, deliberate omission, false declaration, or violation of internal control; therefore, the risk of material misstatement arising from fraud is higher than that caused by errors.
VIII.Obtain the necessary understanding of the internal control related to the audit in order to design appropriate audit procedures under the circumstance, but the purpose is not to express an opinion on the effectiveness of the internal control of G-SHANK.
IX. Assess the appropriateness of the accounting policies adopted by the management; also, the reasonableness of the accounting estimates and related disclosures made.

X. Based on the audit evidence obtained, make conclusions on the suitability of the continuing operation accounting base adopted by the management and whether or not the events or circumstances causing significant doubts to the continuing operation ability of G-SHANK are with significant uncertainties. If the independent auditors believe that such events or circumstances are with significant uncertainties, it is necessary to remind the readers of the parent company only financial statements in the audit report to pay attention to the relevant disclosure or to revise the audit opinion when such disclosures are inappropriate. The conclusion of the independent auditors is based on the audit evidence obtained as of the audit report date. However, future events or circumstances may result in the inability of G-SHANK to continue operating.
XI. Assess the overall presentation, structure, and content of the parent company only financial statements (including the relevant notes) and whether or not the relevant transactions and events in the consolidated financial statements are presented fairly.
XII. Obtain sufficient and appropriate audit evidence on the financial information of the individual business entity within the G-SHANK in order to express an opinion on the parent company only financial statements. The independent auditors are responsible for guiding, supervising, and implementing the auditing process of the G-SHANK; also, are responsible for forming an opinion on the audit of the G-SHANK.

The independent auditors have based on the communications with the governing unit to determine the key audit matters to be performed on the 2021 parent company only financial statements of G-SHANK. The independent auditors shall state the key audit matters in the audit report except for the specific matters prohibited from being disclosed, or, in rare cases; the independent auditors decide not to have specific matters communicated in the audit report since the negative effect of such disclosure can be reasonably expected to be greater than the increase of public interest.

Diwan & Company Financial Supervisory Commission Certificate No.: FSC-Shen-Tzi No. 1070312218 FSC-Shen-Tzi No. 1100149341

Tseng, Chiung-Hui

CPAs:

Li, Pin-Chueh

March 8, 2024

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY BALANCE SHEET

(December 31, 2023 & 2022 have been audited)

			(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
ASSETS		Notes	December 31,2023		December 31,2022
Code	Accounts		AMOUNT	%	AMOUNT	%
11xx 1100 1110 1150 1170 1180 1200 1210 130x 1470 1476 15xx 1517 1550 1600 1780 1840 1915 1920 1990 1xxx	Current assets Cash and cash equivalents Financial assets at fair value through profit or loss - current Notes receivable, net Accounts receivable, net Accounts receivable- related parties Other receivables Other receivables - related parties Inventory Prepayments and Other current assets Other financial assets-current Total current assets Noncurrent Asset Financial assets at fair value through other comprehensive income - noncurrent Investments accounted for using equity method Property, Plant and Equipment Intangible assets Deferred tax assets Prepayments for business facilities Refundable deposits Other noncurrent assets, others Total noncurrent Asset Total Assets	4 & 6.(1) 4 & 6.(2) 4, 5, 6.(3) & 6.(4) 4, 5 & 6.(4) 4, 5 & 7 4, 5 & 6.(4) 4, 5 & 7 4, 5 & 6.(5) 4 & 6.(6) 4, 5, 6.(7) & 6.(19) 4 & 6.(8) 4,5,6.(9) & 9 4 & 6.(10) 4 & 6.(26) 4 & 9.	619,238 $ 1,320,131 4,095 430,952 2,026 30,111 950 188,278 9,613 7,637 2,613,031 320,903 4,699,117 477,830 492 13,194 311,081 499 4,978 5,828,094 8,441,125 $	7 16 - 5 - 1 - 2 - - 31 4 56 5 - - 4 - - 69 100	1,324,890 $ 762,585 2,897 562,036 4,111 24,990 2,419 260,132 5,893 7,383 2,957,336 262,023 4,470,257 484,726 956 25,865 13,135 635 5,178 5,262,775 8,220,111 $	16 9 - 7 - - - 3 - - 36 3 54 6 - - - - - 64 100

(CONTINUING)

(The accompanying notes are an integral part of the parent company only financial statements.)

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY BALANCE SHEET

(December 31, 2023 & 2022 have been audited)

			(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Liabilities and Equity			December 31,2023		December 31,2022
Code	Accounts	Notes	AMOUNT	%	AMOUNT	%
21xx 2100 2130 2170 2180 2200 2220 2230 2322 2300 25xx 2540 2570 2640 2645 2xxx 31xx 3100 3110 3140 3200 3300 3310 3320 3350 3400 3410 3420 3xxx	Current liabilities Short-term loans Contract liabilities - current Accounts payable Accounts payable-related parties Other payables Other payables-related parties Current tax liabilities Current portion of long-term loans payable Other current liabilities Total current liabilities Non-current liabilities Long-term loans Deferred tax liabilities Net defined benefit liabilities- noncurrent Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to owners of parent Share capital Ordinary shares Advance Receipts for Capital Stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Other equity Exchange differences on translation of foreign financial statements Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income Total Equity Total liabilities and equity	4, 6.(11) & 6.(28) 4 & 6.(21) 4 4 & 7 4, 6.(9), 6.(13) & 6.(22) 4 & 7 4 & 6.(26) 4,6.(12) & 6.(28) 4, 6.(12) & 6.(28) 4 & 6.(26) 4, 5 & 6.(13) 4, 6(14),6.(20) & 11 4, 6.(15), 6(18), 6(20) & 11 6.(16) & 6.(18) 6.(17) 4, 6.(18) & 11 4, 6.(8), 6.(19) & 6.(25) 4, 6.(7), 6.(8), 6.(19) & 6.(25)	1,210,000 $ 6,497 149,351 2,041 275,060 2,706 13,166 - 6,789 1,665,610 - 674,593 29,956 3,061 707,610 2,373,220 1,906,543 1,900 489,905 981,760 284,690 2,512,565 (409,638) 300,180 6,067,905 8,441,125 $	15 - 2 - 3 - - - - 20 - 8 - - 8 28 23 - 6 12 3 30 (5) 3 72 100	1,070,000 $ 9,033 209,214 11,528 299,216 3,667 53,630 38,735 10,985 1,706,008 40,297 616,436 31,929 4,646 693,308 2,399,316 1,897,843 8,700 472,021 892,927 284,690 2,365,496 (338,584) 237,702 5,820,795 8,220,111 $	13 - 3 - 4 - 1 - - 21 - 8 - - 8 29 23 - 6 11 3 29 (4) 3 71 100

(The accompanying notes are an integral part of the parent company only financial statements.)

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENT OF COMPREHENSIVE INCOME

( 2023& 2022 )

( 2023& 2022 )	( 2023& 2022 )	( 2023& 2022 )
(In Thousan			ds of New Taiwan Dollars, except for earnings per share amounts)
Code	Accounts	Notes	For the years end		ed December 31,
			2023	%	2022	%
4000 5000 5900 6000 6100 6200 6300 6450 6500 6900 7000 7100 7010 7020 7050 7070 7630 7900 7950 8200 8300 8310 8311 8316 8330 8349 8360 8380 8399 8500 9750 9850	Sales revenue Operating costs Gross profit from operations Operating expense Selling and marketing expenses General and administrative expenses Research and development expenses Loss (reversal) of expected credit loss Total operating expense Other operating income and expenses, net Net operating income (loss) Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of the profit (loss) of associates and subsidiaries for using equity method Foreign exchange gains (loss) Total non-operating income and expenses Profit (loss) from continuing operations before tax Income Tax Expense Profit (loss) for the period Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss： Remeasurements of the defined benefit plan Unrealised gain (loss) on financial assets measured at fair through other comprehensive income Share of the other comprehensive (loss) income of associates for using equity method-will not be reclassified to profit or loss Income tax benefit (expense) relating to items that will not be reclassified subsequently to profit or loss Other comprehensive income (loss) that will not be reclassified to profit or loss Items that may be reclassified subsequently to profit or loss： Share of the other comprehensive income of subsidiaries and associates for using equity method-will may be reclassified subsequently to profit or loss Income tax expense relating to items that may be reclassified subsequently to profit or loss Total items that may be reclassified subsequently to profit or loss Total other comprehensive income (loss) for the period Total comprehensive income for the period Earnings per share (dollar) Basic Diluted	4, 6.(21) & 7 4, 6.(5), 6.(13), 6.(22),6.(29) & 7 4, 6.(13), 6.(22), 6.(29) & 7 4, 5 & 6.(4) 4, 6.(9), 6.(22) & 6.(23) 6.(24) & 7 6.(7), 6.(24) & 7 6.(2) & 6.(24) 4 & 6.(24) 4, 6.(8) & 6.(24) 4 & 6.(24) 4 & 6.(26) 4, 6.(7),6.(8), 6.(13), 6.(19) & 6.(25) 4 & 6.(27)	1,942,821 $ (1,583,842)	100 (82) 18 (5) (8) (3) - (16) - 2 6 4 3 (1) 29 1 42 44 (9) 35 - 3 - - 3 (4) - (4) (1) 34	2,395,398 $ (1,837,583)	100 (77) 23 (4) (7) (2) - (13) - 10 3 4 - - 26 2 35 45 (9) 36 1 (1) - - - 4 - 4 4 40
			358,979 (96,846) (166,323) (50,597) (192) (313,958) 383 45,404 116,788 79,588 62,976 (18,304) 558,304 11,525 810,877 856,281 (181,241) 675,040 (596) 58,880 3,561 - 61,845 (71,054) - (71,054) (9,209) 665,831 $ 3.54 $ 3.49 $		557,815 (103,916) (158,288) (49,114) 639 (310,679) 383 247,519 76,961 104,905 (13,650) (13,906) 621,399 59,020 834,729 1,082,248 (214,645) 867,603 20,496 (37,315) (4,046) - (20,865) 103,268 - 103,268 82,403 950,006 $ 4.58 $ 4.49 $

(The accompanying notes are an integral part of the parent company only financial statements.)

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

(2023 & 2022)

(In Thousands of New Taiwan Dollars)

								(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Accounts	Equity Attributable to Owners of the Corporation
	Share Capital			Retained Earnings			Othe	r Equity	Total
	Ordinary Shares	Advance Receipts for Capital Stock	Capital Surplus	Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translating Foreign Operations	Unrealized Gains and Losses on Financial Assets at Fair Value Through Other Cpmprehensive Income
BALANCE AT JANUARY 1, 2022 Appropriation of 2021 earnings (Note 6.(18)) Legal reserve Cash dividends to ordinary shareholders Share of the other comprehensive income of associates disposal equity instruments designated as at fair value hrough other comprehensive income Received donation from shareholders Net profit for 2022 Other comprehensive income for 2022 Total comprehensive income for 2022 Share-based payment expenses BALANCE AT DECEMBER 31, 2022 Appropriation of 2022 earnings (Note 6.(18)) Legal reserve Cash dividends to ordinary shareholders Share of the other comprehensive income of associates disposal equity instruments designated as at fair value hrough other comprehensive income Received donation from shareholders Net profit for 2023 Other comprehensive income for 2023 Total comprehensive income for 2023 Share-based payment transaction BALANCE AT DECEMBER 31, 2023	1,878,323 $ - - - - - -	$ - - - - - - - - 8,700 8,700 $ - - - - - - - (6,800) 1,900 $	452,744 $ - - 15 27 - - - 19,235 472,021 $ - - 296 55 - - - 17,533 489,905 $	827,106 $ 65,821 - - - - - - - 892,927 $ 88,833 - - - - - - - 981,760 $	284,690 $ - - - - - - - - 284,690 $ - - - - - - - - 284,690 $	1,937,433 $ (65,821) (394,447) - - 867,603 20,728 888,331 - 2,365,496 $ (88,833) (438,505) - - 675,040 (633) 674,407 - 2,512,565 $	(441,852) $ - - - - - 103,268 103,268 - (338,584) $ - - - - - (71,054) (71,054) - (409,638) $	279,295 $ - - - - - (41,593)	5,217,739 $ - (394,447) 15 27 867,603 82,403 950,006 47,455 5,820,795 $ - (438,505) 296 55 675,040 (9,209) 665,831 19,433 6,067,905 $
	-							(41,593)
	19,520							-
	1,897,843 $ - - - - - -							237,702 $ - - - - - 62,478
	-							62,478
	8,700							-
	1,906,543 $							300,180 $

(The accompanying notes are an integral part of the parent company only financial statements.)

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(2023 & 2022)

	(In Thousands ofNewTaiwan Dollars)	(In Thousands ofNewTaiwan Dollars)
Description	2023	2022
CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax from continuing operations Adjustments for The profit or loss items which did not affect cash flows: Depreciation Amortization Expected credit (profit) loss Net loss on financial assets and liabilities at fair value through profit or loss Interest expenses Interest income Dividends income Share-based payment expenses Share of profit of subsidiaries and associates ventures accounted for using the equity method Profit on disposal of property, plant and equipment Unrealized foreign exchange losses Other item Changes in operating assets and liabilities： Financial assets at fair value through profit or loss Notes receivables Accounts receivable Accounts receivable-related parties Other receivables Other receivables -related parties Inventories Prepayments and Other current assets Current contract Accounts payable Accounts payable-related parties Other payables Other payables-related parties Other current liabilities Net defined benefit liabilities Cash inflows and outflows generated from operating activities: Interest received Dividends received Interest paid Income tax paid Net cash inflows and outflows from operating activities	856,281 $ 65,911 4,492 192 (62,757) 18,304 (116,788) (9,500) 15,766 (558,304) (219) 6,929 (1,585) (494,789) (1,198) 126,163 2,016 (6,515) 1,447 67,304 (3,720) (2,536) (59,862) (9,455) (20,632) (960) (4,196) (2,569) (190,780) 118,182 9,500 (17,989) (150,877) (231,964)	1,082,248 $ 56,410 12,051 (639) 14,403 13,906 (76,961) (13,571) 5,595 (621,399) (753) 4,020 - 169,812 967 (2,430) 4,220 (89) (700) (4,190) 1,775 9,033 4,787 6,761 (25,657) (358) (5,376) (9,589) 624,276 73,425 13,571 (13,629) (148,605) 549,038

(Continuing)

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

(2023 & 2022)

	(In Thousands of New Taiwan Dollars)	(In Thousands of New Taiwan Dollars)
Description	2023	2022
CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of investments accounted for using equity method Cash dividends issued by investee companies using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Other receivables -related parties -decrease in funds loan Acquisition of intangible assets Decrease in other current financial assets Increase in other noncurrent assets Increase in prepayments for business facilities Net cash provided by investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase (Decrease) in Short-term borrowings Increase in long-term borrowings Repayment of long-term borrowings Payment of cash dividends Employee exercise of stock warrant Other financing activities Net cash (used in) provided by financing activities Effect of changes in exchange rate on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period	- $ 262,247 (45,192) 242 136 - (281) (135) (3,547) (311,081) (97,611) 140,000 - (79,032) (438,505) 3,667 55 (373,815) (2,262) (705,652) 1,324,890 619,238 $	(2,809) $ 351,183 (96,779) 753 (155) 19,390 (600) 18,328 (8,900) (366) 280,045 (190,000) 2,708 - (394,447) 41,860 27 (539,852) (2,730) 286,501 1,038,389 1,324,890 $

(The accompanying notes are an integral part of the parent company only financial statements.)

G-SHANK ENTERPRISE CO., LTD. Articles of Incorporation

Chapter I. General Provisions

Article 1.

The Company is organized in accordance with the Company Act and named “G-SHANK ENTERPRISE CO., LTD.”

Article 2.

The business operation of the Company:

(1) Manufacturing and trading of molds and stampings;
(2) Manufacturing and trading of tools and automation machines;
(3) Assembly and processing of electrical components and finished products;
(4) Assembly and processing of mechanical components and finished products
(5) The operation of import and export business and the agency business of domestic and foreign manufacturers;
(6) Except for the business operations subject to special approval, all business not prohibited or restricted by law and regulations;

Article 3.

The Company has the head office setup in Taoyuan City, and may set up branches or offices, when necessary, according to the resolution of the board of directors.

Chapter II. Shares

Article 4.

The total authorized capital stock of the Company is NT$3.5 billion with 350 million shares issued at NT$10 par and with the board of directors authorized to make multiple issuances and handle all relevant matters.

In terms of the total capital stock referred to in Paragraph I, an amount for NT$200 million is reserved for the issuance of stock warrants for a total of 20 million shares at NT$10 par with multiple issuances arranged in accordance with the resolution of the board of directors.

Article 5.

The Company’s stock shares are ordered and signed or stamped by the representing directors, and are issued after being certified by the competent authority or its authorized issuance agency.

The Company is exempted from printing certificates for the shares issued, provided that the centralized securities depository institution should be contacted for registration or custody.

Article 6

The entries to the shareholders’ register shall be ceased within 60 days prior to the convening date of a general shareholders’ meeting, or within 30 days prior to the convening date of an extraordinary shareholders’ meeting, or within 5 days prior to the target date fixed by the Company for distribution of dividends, bonus, or other benefits.

Article 7.

Shareholders should fill in the specimen card when opening an account for the record of the Company. The receipt of dividends and exercise of equity in writing in the future must be with the proof of the specimen card on file. Unless otherwise provided by the Company Act or the securities regulations, it is to be handled in accordance with the “Regulations Governing the Administration of Shareholder Services of Public Companies” of the Financial Supervisory Commission.

Chapter III. Shareholders’ Meeting

Article 8.

The shareholders’ meeting includes both general shareholders’ meeting that is to be held at least once a year and convened by the board of directors within 6 months at the end of the fiscal year and extraordinary shareholders’ meeting that is to be held when necessary.

Article 8-1.

The Company’s shareholders’ meeting may be convened by virtual communication network or other methods announced by the central competent authority. A virtual shareholders’ meeting shall be convened in compliance with the relevant regulations on the conditions, operating procedures, and other mandatory matters; also, the regulations otherwise imposed by the competent authorities shall prevail.

Article 9.

The shareholder who cannot attend the shareholders’ meeting for reasons may appoint a proxy to attend the meeting by providing the proxy form issued by the Company with the scope of the proxy’s authorization detailed, then signed and sealed. The use of the proxy form, unless otherwise provided by the Company Act, shall be handled in accordance with the “Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies.”

Article 10.

The Company’s shareholders are entitled to one voting power in respect of each share in their possession, unless otherwise provided by law and regulations.

Article 11.

Resolutions reached in the Company’s shareholders’ meeting shall, unless otherwise provided by the Company Act, be adopted by a majority vote of the shareholders present, who represent more than one-half of the total number of voting shares.

Chapter IV. Directors

Article 12.

The Company has a quorum of 7~11 directors set. The candidate nomination system is adopted for the shareholders to elect the directors from among the nominees listed in the register of director candidates. The directors are elected for a 3-year term and eligible for re-election.

According to the quorum of board directors set in the preceding paragraph, there shall be not less than 3 independent directors in number and not less than one-fifth of the total number of directors. Independent directors shall possess professional knowledge and there shall be restrictions on their shareholdings, restriction on holding employment concurrently, nomination and election method, and other requirements on compliance that are to be handled in accordance with the Company Act, and relevant requirements of the competent securities authorities.

The Company shall acquire liability insurance for the directors during the term of office according to their indemnity responsibilities within the scope of business execution lawfully.

Article 12-1.

The Company’s board of directors has the Audit Committee, Remuneration Committee, and other functional committees formed, of which, the Audit Committee is formed by all independent directors.

The duties, organizational charters, exercise of powers, and other matters to be complied with by the Audit Committee referred to in the preceding paragraph shall be handled in accordance with the relevant regulations of the competent securities authority and the Company.

Article 13.

The board of directors is organized by all directors. The Chairman is elected with the consent of more than half of the directors present at the meeting that is attended by more than two-thirds of the directors. The Chairman is to chair the shareholders’ meeting internally and to represent the Company externally.

Article 14.

When the Chairman requests leave or is unable to exercise his/her powers for any reason, the representative of the Chairman shall be processed in accordance with Article 208 of the Company Act. If a director is unable to attend the board meeting for some reasons, he/she may entrust another director to attend the meeting as his/her proxy in accordance with Article 205 of the Company Act. The aforementioned proxy is limited to one person only.

Article 14-1.

The reasons for convening the board meeting shall be detailed in the written meeting notice and sent to each director 7 days in advance. However, a board meeting can be convened at any time in case of emergency.

The aforementioned meeting notice can be sent to each director by correspondence, fax, or e-mail.

Article 14-2.

The board of directors is authorized to determine the remuneration and allowance for travel expenses to the Company’s board directors based on the degree of their participation in the Company’s business

operation and the value of their contributions, and with reference to the standards of the industry.

Chapter V Management

Article 15.

The Company may have one President and several Vice Presidents appointed to serve; also, their appointment, dismissal, and remuneration is to be handled in accordance with Article 29 of the Company Act.

Chapter VI Accounting

Article 16.

The Company’s board of directors shall have the following reports prepared at the end of each fiscal year, and then presented in the shareholders’ meeting for resolutions in accordance with the statutory procedures: (I) The business report; (II) The financial statements; and (III) The earning distribution or loss off-setting proposals.

Article 17.

If there is net income before tax and before deducting compensation to employees and remuneration to directors, an amount equivalent to 1%~10% of the net income shall be appropriated to pay compensation to employees and an amount not more than 3% of the net income shall be appropriated to pay remuneration to directors. However, if there remains cumulative loss, the Company shall have the equivalent amount reserved to make up for the said cumulative loss .

The compensation to employees stated in the preceding paragraph shall be paid with stock shares or in cash. The recipients of such compensation may include employees of subordinate companies who meet the conditions set by the board of directors. The remuneration to directors can be paid only in cash.

The earnings distribution stated in the preceding paragraph shall be implemented according to the resolution of the board of directors and the presentation in the shareholders’ meeting.

Article 17-1.

The Company shall apply the earnings, if any, to pay income tax and make up for the losses of previous years, then appropriate 10% of the balance amount as legal reserve thereafter. In addition, a certain amount of special reserve shall be retained or reversed in accordance with the regulations of the competent authority. Then, for the remaining amount thereafter plus the unappropriated earnings of previous years, after having a certain amount reserved, it is to be distributed according to the distribution plan proposed by the board of directors after being resolved by the shareholders’ meeting.

Chapter VII Supplementary Provisions

Article 18.

The Company is currently engaging in a growing industry; therefore, the Company will develop and expand along with business development in the future. The earnings distribution will be handled in accordance with the Articles of Incorporation. However, for the distribution of dividends to shareholders in the current year, the maximum proportion of stock dividends shall not exceed 50% of the total dividends distributed; that is, the remaining dividends must be in the form of cash dividends.

Article 19.

The board of directors is authorized to handle the Company’s investment that may exceed 40% of the paid-in capital.

Article 20.

The Company may grant guarantees externally due to business needs.

Article 21.

The matters not fully addressed in the Articles of Incorporation shall be handled in accordance with the Company Act.

Article 22.

The Articles of Incorporation was formulated on October 2, 1973. The 1[st] amendment was made on January 31, 1975. The 2[nd] amendment was made on July 1, 1977. The 3[rd] amendment was made on August 6, 1979. The 4[th] amendment was made on June 22, 1984. The 5[th] amendment was made on December 28, 1985. The 6[th] amendment was made on October 30, 1987. The 7[th] amendment was made on March 26, 1989. The 8[th] amendment was made on May 31, 1992. The 9[th] amendment was made on June 27, 1993. The 10[th] amendment was made on July 25, 1994. The 11[th] amendment was made on June 21, 1995. The 12[th] amendment was made on August 1, 1995. The 13[th] amendment was made on May 22, 1996. The 14[th] amendment was made on April 30, 1997. The 15[th] amendment was made on May 21, 1999. The 16[th] amendment was made on April 29, 2000. The 17[th] amendment was made on April 29, 2000. The 18[th] amendment was made on April 19, 2001. The 19[th] amendment was made on April 19, 2001. The 20[th] amendment was made on May 30, 2002. The 21[st] amendment was made on June 15, 2004. The 22[nd] amendment was made on June 14, 2005. The 23[rd] amendment was made on June 15, 2007. The 24[th] amendment was made on June 25, 2008. The 25[th] amendment was made on June 16, 2009. The 26[th] amendment was made on June 14, 2010. The 27[th] amendment was made on June 22, 2012. The 28[th] amendment was made on June 16, 2016. The 29[th] amendment was made on June 13, 2019. The 30[th] amendment was made on June 15, 2020. The 31[th] amendment was made on June 10, 2022.

G-SHANK ENTERPRISE CO., LTD. Chairman: LIN, YU-HUANG

G-SHANK ENTERPRISE CO., LTD. Rules of Procedure for Shareholders’ Meetings

Article 1.

The Company’s shareholders’ meetings are to be processed in accordance with the “Rules of Procedure for Shareholders’ Meetings.”

Article 2.

The Company furnishes the attending shareholders with an attendance book to sign, or attending shareholders (or the representatives) may hand in a sign-in card in lieu of signing in.

The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in, and the number of shares whose voting rights are exercised by electronic means.

Article 3.

Attendance at shareholders’ meetings and voting shall be calculated based on numbers of shares.

Article 4.

The venue for a shareholders’ meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

Article 5.

If a shareholders’ meeting is convened by the board of directors, the meeting shall be chaired by the chairman of the board. When the chairman of the board is on leave or for any reason unable to exercise the powers of the chairman, the vice chairman shall act in place of the chairman. If there is no vice chairman or the vice chairman also is on leave or for any reason unable to exercise the powers of the vice chairman, the chairman shall appoint one of the directors to act as chair. Where the chairman does not make such a designation, the directors shall select from among themselves one person to serve as chair. If a shareholders’ meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

Article 6.

The Company may appoint its attorneys, certified public accountants, or related persons retained by the Company to attend the shareholders’ meeting in a non-voting capacity.

Staff handling administrative affairs of a shareholders’ meeting shall wear identification cards or arm bands.

Article 7.

The Company shall make an uninterrupted audio and video recording the entire proceedings of the shareholders’ meeting, and the recorded materials of the preceding paragraph shall be retained for at least one year.

Article 8.

The Chairman shall call the meeting to order at the scheduled meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than one hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to Article 175, paragraph 1 of the Company Act. When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the Chairman may resubmit the tentative resolution for a vote by the shareholders’ meeting pursuant to Article 174 of the Company Act.

Article 9.

If a shareholders’ meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. Votes shall be cast on each separate proposal in the agenda (including extraordinary motions and amendments to the original proposals set out in the agenda). The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party with the power to convene that is not the board of directors.

The Chairman may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders’ meeting. If the Chairman declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new Chairman in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

After the meeting is adjourned by resolution, shareholders shall not elect another Chairman to continue the meeting at the original venues or at another venue.

Article 10.

Before speaking, an attending shareholder (or a representative) must specify on a speaker’s slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the Chairman.

A shareholder (or a representative) in attendance who has submitted a speaker’s slip but does not actually speak shall be deemed to have not spoken.

When the content of the speech does not correspond to the subject given on the speaker’s slip, the spoken content shall prevail.

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the Chairman and the shareholder that has the floor; the Chairman shall stop any violation.

Article 11.

Except with the consent of the Chairman, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes.

If the shareholder’s speech violates the aforementioned rules or exceeds the scope of the agenda item, the Chairman may terminate the speech.

Article 12.

The juristic person attending the shareholders’ meeting by proxy can only assign one representative to attend the meeting.

When a juristic person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same proposal.

Article 13.

After an attending shareholder has spoken, the Chairman may respond in person or direct relevant personnel to respond.

Article 14.

The Chairman shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chairman is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chairman may announce the discussion closed, call for a vote, and schedule sufficient time for voting.

Article 15.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the Chairman, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders’ meeting proposals or elections shall be conducted in public at the place of the shareholders’ meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

Article 16.

When a meeting is in progress, the Chairman may announce a break based on time considerations.

Article 17.

Except as otherwise provided in the Company Act and in the Company’s Articles of Incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders.

At the time of a vote, for each proposal, the Chairman or a person designated by the Chairman shall first announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders.

Article 18.

When there is an amendment or an alternative to a proposal, the Chairman shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

Article 19.

The Chairman may direct the proctors (or security personnel) to help maintain order at the meeting place.

When proctors (or security personnel) help maintain order at the meeting place, they shall wear an or armband bearing the word “Proctor.”

Article 20.

Matters not stipulated in the “Rules” shall be handled in accordance with the provisions of the Company Act and relevant laws and regulations.

Article 21.

The “Rules” shall take effect after having been submitted to and approved by a shareholders’ meeting. Subsequent amendments thereto shall take effect in the same manner.

G-SHANK ENTERPRISE CO., LTD. Shareholdings of Directors

The minimum number of shares to be held by all directors and the number of shares recorded in the shareholder register

Title	Shares to be held	Shares recorded in the shareholders register
Directors	12,000,000	20,209,980

2. Shareholdings of directors

April 16, 2024

Title	Name	Shares recorded in the shareholders register
Chairman	LIN, YU-HUANG	8,612,089
Director	LIN, SHEAN-KUO	3,793,106
Director	TSENG, CHAI-JUNG	2,362,703
Director	LIN, YING-SHUO	1,913,643
Director	LIN, YING-ZHI	3,528,439
Independent Director	MA, SHU-CHIN	31,768
Independent Director	LIAO, YA-LING	144,490
Independent Director	CHEN, HUNG-YI	0
Independent Director	LIU SSU-MIN	0

AI assistant

GS — AGM Information 2024

52110_rns_2024-06-21_55e2e3f4-58af-4f8f-8c7f-039c73010036.pdf

G-SHANK ENTERPRISE CO., LTD.

2024 Annual Shareholder’ Meeting

Meeting Agenda

Table of Contents

G-SHANK ENTERPRISE CO., LTD.

Agenda of the 2024 Annual Shareholders’ Meetings

iii. Report matters

vii. Adjournment

G-SHANK ENTERPRISE CO., LTD. The 2024 Annual Shareholders’ Meetings

i. Calling the meeting to order

ii. Chairman’s address

iii. Report matters

Product sales statistics

(2) Profit and loss overview

Profit and Loss Overview

(3) Budget execution

(4) Financial income and expense overview

(5) Profitability analysis

(a) 3C electronics industry:

(B) Responsive strategies

(C). Research & Development achievements

(b) Development of Precision Spot Plating Technology

Audit Report of the Audit Committee

Convener of the Audit Committee

iv. Adoption of proposals

v. Discussion items

vi. Extemporary motions vii. Adjournment

G-SHANK ENTERPRISE CO., LTD. The 2023 Earnings Distribution Statement

INDEPENDENT AUDITOR’S REPORT

INDEPENDENT AUDITOR’S OPINION

BASIS OF AN AUDIT OPINION

KEY AUDIT MATTERS

I. Income recognition

II. Inventory evaluation

OTHER MATTERS

THE RESPONSIBILITY OF THE MANAGEMENT AND GOVERNANCE UNIT FOR THE CONSOLIDATED FINANCIAL STATEMENTS

CPA’S RESPONSIBILITY FOR AUDITING THE CONSOLIDATED FINANCIAL STATEMENTS

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (2023 & 2022)

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

INDEPENDENT AUDITOR’S REPORT

INDEPENDENT AUDITOR’S OPINION

BASIS OF AN AUDIT OPINION

KEY AUDIT MATTERS

III. Income recognition

IV. Inventory evaluation

OTHER MATTERS

THE RESPONSIBILITY OF THE MANAGEMENT AND GOVERNANCE UNIT FOR THE CONSOLIDATED FINANCIAL STATEMENTS

CPA’S RESPONSIBILITY FOR AUDITING THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY BALANCE SHEET

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY BALANCE SHEET

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENT OF COMPREHENSIVE INCOME

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

G-SHANK ENTERPRISE CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

G-SHANK ENTERPRISE CO., LTD. AND SUBSIDIARIES

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

G-SHANK ENTERPRISE CO., LTD. Articles of Incorporation

Chapter I. General Provisions

Article 1.

Article 2.

Article 3.

Chapter II. Shares

Article 4.

Article 5.

GS AGM Information 2024