Stock ID: 3049

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HannsTouch Holdings Company (Formerly HannsTouch Solution Inc.) HannsTouch Holdings Company

2023 Annual Report

------Disclaimer----

This is a translation of the 2023 Annual Report of HannsTouch Holdings Company..

The translation is for Reference only. If there is any discrepancy between the english version and chinese version, The chinese version shall prevail.

Publication Date: April 2, 2024

Annual report available at:

Market Observation Post System of Taiwan Stock Exchange Corporation: http://mops.twse.com.tw
Company website: http://www.hannstouch.com

I. Name, title, contact number, and e-mail of spokesperson and acting spokesperson:

Spokesperson: Division Chief Chang Yuan-Jie

Acting Spokesperson: Division Chief Chun-Jie Yeh

TEL: (02)5555-3377

E-mail: [email protected]

II. Address and contact number of the headquarter, branches and plant sites:

Headquarter: No. 7, Beiyuan 1st Road, Shanhua District, Tainan City 74149

TEL: (06)505-3959

Taipei Office: 5F, No. 21, Lane 168, Xingshan Road, Neihu District, Taipei City 11469 TEL: (02)5555-3377

III. Name, address, website, and contact number of stock transfer agency:

Name: Share Administration Office, HannsTouch Holdings Company

Address: 8F, No. 398, Xingshan Road, Neihu District, Taipei City 11469

Website: http://stock.walsin.com

TEL: (02)2790-5885

IV. Name of CPA and the name, address, website and contact number of the accounting firm for the latest financial

report:

Auditors: CPA ChingChang Chen, CPA Fu-Ming Liao

Name of accounting firm: PwC Taiwan

Address: 27F, No. 333, Section 1, Keelung Road, Taipei City

Website: http://www.pwc.tw

TEL: (02)2729-6666

V. Name of overseas exchange where securities are listed, and method of inquiry: Not applicable

VI. Company website: http://www.hannstouch.com

HannsTouch Holdings Company

Table of Content

	HannsTouch Holdings Company Table of Content	HannsTouch Holdings Company Table of Content
One.	Report to Shareholders ................................................................................................................................		1
Two.	Company Profile ...........................................................................................................................................		9
Three. Corporate Governance Report
	I.	Organization.......................................................................................................................................... .	13
	II.	Background information of directors, supervisors, the President, vice presidents, assistant vice presidents, and heads of various departments and branches ................................................................. .	16
	III.	Compensation paid to directors, supervisors, the President, and vice presidents in the last year ......... .	31
	IV.	Corporate governance ............................................................................................................................	38
	V.	Disclosure of audit fees ..........................................................................................................................	102
	VI.	Change of CPA ......................................................................................................................................	102
	VII.	Any of the Company’s Chairperson, President, or any manager involved in financial or accounting
		affairs being employed by the accounting firm or any of its affiliated company within the most recent	102
		year ........................................................................................................................................................
	VIII.	Details of shares transferred or pledged by directors, supervisors, managers, and shareholders with more than 10% ownership interest in the last year, up to the publication date of this annual report .....	103
	IX.	Relationships characterized as spouse or second-degree relatives or closer among top-ten shareholders ...............................................................................................................................................................	104
	X.	Investments jointly held by the Company, the Company's directors, supervisors, managers, and
		enterprises directly or indirectly controlled by the Company; disclose shareholding in aggregate of the	105
		above parties ...........................................................................................................................
Four.	Capital Overview ..........................................................................................................................................
	I.	Capital and outstanding shares ...............................................................................................................	106
	II.	Disclosure relating to corporate bonds (including offshore corporate bonds) .......................................	113
	III.	Preferred shares......................................................................................................................................	114
	IV.	Depository receipts ................................................................................................................................	114
	V.	Employee warrants ................................................................................................................................	114
	VI.	Issuance of new shares for business acquisitions or share exchange .....................................................	114
	VII.	Progress on planned use of capital .........................................................................................................	114
Five.	Operational Overview ..................................................................................................................................
	I.	Business activities ..................................................................................................................................	115
	II.	Market, production and sales overview .................................................................................................	125
	III.	Employee information in the last 2 years up to the publication date of this annual report ....................	129
	IV.	Contribution to environmental protection ..............................................................................................	130
	V.	Labor-management relations..................................................................................................................	131
	VI.	Information security management .........................................................................................................	134
	VII.	Major contracts ......................................................................................................................................	135
Six.	Financial Overview ......................................................................................................................................
	I.	Summary balance sheet and statement of comprehensive income for the last 5 years ..........................	136
	II.	Financial analysis for the last 5 years ....................................................................................................	143

	III.	Audit Committee's review report on the latest financial statements ......................................................	147
	IV.	Latest consolidated financial statements ................................................................................................	148
	V.	Latest standalone financial statements ...................................................................................................	149
	VI.	Financial distress encountered by the Company and affiliated enterprises in the last year, up to the publication date of this annual report .....................................................................................................	148
Seven.	Review and Analysis of Financial Position and Business Performance, and Risk Management Issues
	I.	Financial position ...................................................................................................................................	149
	II.	Financial performance ...........................................................................................................................	150
	III.	Cash flow ...............................................................................................................................................	152
	IV.	Material capital expenditures in the last year and impact on business performance ..............................	152
	V.	Investment policy in the most recent year, causes of profit or loss incurred, and any improvements or investments planned for the next year ....................................................................................................	152
	VI.	Analysis and assessment of risk issues ..................................................................................................	152
	VII.	Other material issues ..............................................................................................................................	156
Eight.	Special Disclosure .........................................................................................................................................
	I.	Information of affiliated companies .......................................................................................................	157
	II.	Private placement of securities in the last year up to the publication date of this annual report ............	162
	III.	Holding or disposal of the Company's shares by subsidiaries in the last financial year, up to the publication date of this annual report .....................................................................................................	162
	IV.	Other supplementary information ..........................................................................................................	162
Nine.	Occurrences of Significant Impact on Shareholders' Equity or Security Prices ....................................
	Occurrences significant to shareholders' interests or securities price, as defined in Subparagraph 2,
	Paragraph 2, Article 36 of the Securities and Exchange Act, in the last year up to the publication date of		163
	annual report ...................................................................................................................................................
	Appendix I.Consolidated Financial Statements and Independent Auditor's Report of the Most Recent Year ................................................................................................................................................................		164
	Appendix II.Standalone Financial Statements and Independent Auditor's Report of the Most Recent
	Year	................................................................................................................................................................

One. Report to Shareholders

Ladies and gentlemen:

In 2023, the world faced rapid and dramatic changes, marking a year of self-refinement, transformation, and metamorphosis for HannsTouch Holdings Company. The outbreak of regional wars, heightened geopolitical tensions, persistent inflation concerns, and major power struggles presented multifaceted challenges to international trade. In response, we devoted more resources to technological innovation and diversified transformation, recruited talent extensively, and expanded our electronic paper product line, solidifying HannsTouch Holdings Company's core competitiveness for the next five to ten years.

Since it was first established, with becoming “the best partner of smart living and a world-class outstanding company” as its vision, HannsTouch has placed its focus on touch application and TFT backplane solutions. It is a professional manufacturer of AMOLED high-end touch panel sensors and has taken becoming “a long-term trust-worthy business partner in the touch and e-paper industry” as an important mission.

Thanks to the concerted efforts of all our colleagues, HannsTouch Holdings Company was honored with the Bronze Award in the 4th Annual Enterprises Environmental Protection Award (AEEPA) of the Republic of China by the Environmental Protection Administration (EPA) of the Executive Yuan in 2022 and was nominated for the Energy Conservation Benchmark Award by the Ministry of Economic Affairs in 2023. With the goal of achieving optimal operational performance, we continue to strive for a sustainable coexistence and prosperity between corporate growth and the ecological environment.

Looking back at 2023, the global consumer electronics market continued to decline, with sluggish mobile phone sales performance causing inventory pressure for major brands. However, the mobile phone market is generally expected to grow in 2024, with companies in the 5G sector also poised to benefit.

HannsTouch Holdings Company focuses on enhancing the value of its core business, continuously developing advanced Hole-in-Active-Area (HIAA) technology and high screen-to-body ratio full-screen technology. In addition to meeting the demands of different generations of AMOLED factories for high-end smartphones and wearable products, we are also committed to developing higher-level technology applications for IT products, striving to serve a more diverse customer base.

Currently, our G5.5 generation production line, in line with the company's long-term development strategy, is continuously expanding the proportion of electronic paper backplane production. We have successively developed under-display optical fingerprint sensor TFT backplanes, new flexible TFT component process technologies, and more. We are working hard to increase our market share in electronic paper, industrial control, automotive, and other specialized display touch applications, enhancing the company's operational flexibility and risk resistance.

In terms of new technology development, through cooperation with applied research institutions, we have developed transparent projection film products, which will be exhibited at the National Museum of Marine Science and Technology in Keelung at the beginning of 2024. Additionally, we have developed physiological signal coupling sensor products and 5G microstrip antenna products with our partners, continuing to layout cross-domain cooperation plans.

In response to the global trend towards paperless operations, we have deeply cultivated electronic paper

backplane-related technologies for several years. In the first quarter of 2022, we completed an expansion plan that doubled our production capacity. We aspire in 2024 to continue pursuing diversified transformation and development, expanding the application scenarios of our products, and striving for development in high-valueadded areas to create the maximum operational efficiency.

Moreover, we pay close attention to issues of environmental sustainability, hoping to internalize ESG and GRI standards along with the United Nations SDGs into our corporate culture and core values. Through investments in clean energy, we remain committed to energy saving and carbon reduction, focusing on labor rights, environmental care, and health to initiate positive momentum. In May 2023, we completed the ESG collaborator certification, continuing to enhance information transparency and fully disclose our sustainability initiatives to promote sustainable management.

Our subsidiary, GloryStone Inc., after establishing its first hotel, Hanns House, in the Xinyi Planning District in 2020, opened its second hotel, Hanns Summer, on Tingzhou Road at the end of 2023. In the coming year, besides focusing on the hospitality business, GloryStone Inc. will also continue to expand in the dining, new retail, and other sectors, striving to create a distinguished all-day living circle in Taipei for our guests.

Looking ahead to 2024, with many challenges and uncertainties in international situations, HannsTouch Holdings Company will continue to offer diverse services, wholeheartedly creating greater value for our shareholders. We will, as always, consider our employees, customers, and business partners as the most important people, committed to sound corporate governance and fulfilling our social responsibilities as a corporate citizen. We thank all shareholders for their trust and support in HannsTouch Holdings Company and look forward to moving forward together in 2024 to create a long-term and prosperous future.

Finally, I would like to wish each of you good health and the best in all of your endeavors and prosperous business.

Chairperson

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I. 2023 Business Report

(I) Outcome of the business plan:

HannsTouch is a manufacturer of high-end AMOLED touch sensors and E-paper drive backplane dedicated to the development of new production technology, strengthening of cost control capability, enhancement of production efficiency and management of delivery, product quality and yield, thus providing customers with the best technology and services.

In 2023, the global smartphone market was impacted by inflation and high prices, with the overall economy not yet recovering, leading to continued weak market demand. Consequently, supply chains became more conservative regarding market prospects. The total annual demand for smartphones dropped to below 1.2 billion units, with a growth rate of -1%. The rigid AMOLED panel market faced challenges from low-cost competition from LCD display technology and, from the second quarter of 2022, aggressive market capture by Chinese flexible AMOLED manufacturers, leading to a significant introduction of flexible AMOLED panels by Chinese brand clients and a rapid decrease in demand for rigid AMOLED panels. Although these factors eased after the fourth quarter, market demand decreased by 21.4% compared to the previous year. The company ~~will~~ continue to improve process yield and production line operation rates, having completed the development of higher-level technologies for IT products to meet future new application demands of clients.

In 2023, the electronic shelf label (ESL) market reached 380 million units, with a growth rate of over 20%. As major retailers progressively introduce electronic labels, the market's compound annual growth rate is expected to remain above 10% for the next three years. Besides continuously developing public version products to effectively reduce overall project costs for clients, the company began strategic cooperation with system solution clients in the fourth quarter of 2023, fully implementing four-color film application solutions, with mass production expected in the first quarter of 2024, which will further increase market share and company revenue.

Beyond electronic labels, the company also continues to refine design and process capabilities for thin-film transistor (TFT) driven backplanes, having developed higher-resolution products in 2023, offering clients application solutions for e-readers.

In ensuring sound operational systems and moving towards sustainable management, HannsTouch Holdings Company solemnly remembers its corporate and environmental responsibilities, dedicating efforts to promote green products, green manufacturing, responsible supply chains, and a diverse and inclusive workplace culture. The company has committed in its 2021 Corporate Social Responsibility Report to continually improve on significant environmental risk issues such as water resource management, waste management, energy consumption, and greenhouse gas management by 2050, aiming ultimately to achieve carbon neutrality. During this period, we were honored with the Bronze Award of the 4th Annual Enterprises Environment Protection Award (AEEPA) of the Republic of China in 2022 and were recognized with an entry award by the Ministry of Economic Affairs for energy conservation benchmarks in 2023.

Looking forward to 2024, HannsTouch aims to continue enhancing operational performance, creating excellent results with clients on the foundation of stability and integrity, and sharing operational achievements with shareholders.

(II) Revenues, expenses, and profitability analysis:

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Assessment \ Year 2022 2023
Debt to assets ratio 30.96 32.77
Financial structure
(%) Long-term capital to property, plants and 139.18 136.18
equipment
Current ratio 453.63 358.10
Solvency (%)
Quick ratio 429.50 339.88
Return on assets 0.41 -5.85
Return on shareholders’ equity 0.23 -9.08
Profitability (%)
Net profit margin 1.03 -67.56
Earnings per share (NT$) 0.03 -1.12
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In 2023, the company primarily engaged in the development, research, manufacturing, and sales of touch sensors and related products. The annual revenue was NT$1,331,826 thousand, with the cost of goods sold at NT$2,151,502 thousand, resulting in a gross loss of NT$819,676 thousand and a gross profit margin of -62%. The operating loss was NT$1,065,640 thousand, with an operating loss rate of -80%, and the total comprehensive loss amounted to NT$917,225 thousand, attributing a net loss of NT$889,775 thousand to the parent company.

(III) Research and development:

Manufacturing Excellence and Diverse Applications: HannsTouch's 5.5-generation (1300x1500mm) OCTA touch sensor manufacturing facility can meet various product size requirements, including smartwatches, smartphones, and tablets. Our products, compatible with Active Matrix Organic Light Emitting Diode (AMOLED) displays used in high-end smartphones and wearable devices, feature fine line width, narrow bezels, and high transparency. Simultaneously, we are continually developing advanced technology applications, such as HIAA, all-screen displays, and large sized screens, to meet market demands.
Technological Innovation and Market Expansion: HannsTouch Holdings Company excels not only in the OCTA touch sensor domain but has also successfully penetrated the electronic label Thin-Film Transistor (TFT) backplane market, developing Electronic Shelf Label (ESL) products ranging from 1.6 to 10.2 inches. We introduced high electron mobility and low leakage current technologies to enhance the TFT performance, providing an advantage for high-resolution and fast scanning products in energy saving. Additionally, we have ventured into touch products for industrial computers and aviation applications, enhancing our market competitiveness.
Forward-Looking Product Outlook: Since 2021, HannsTouch has been developing flexible TFT component process technology, electronic label backplanes, and under-display optical fingerprint sensor TFT backplanes. Moving forward, we will focus on other flexible biosensors, flexible coupled sensors, and 5G application antenna products through industry-academic collaborations, establishing design and manufacturing process capabilities.

II. Summary of the 2024 business plan

Looking ahead to 2024, as the impacts of inflation and war factors gradually ease, the speed at which international brands launch 5G phones is also accelerating. Display panels continue to shift slowly from LCD to AMOLED panels, and the trend of price undercutting in Flexible AMOLED panels is slowing down. It is estimated that the demand for Rigid AMOLED phones will also grow in 2024. In addition to continuing to defend the mid-range smartphone application

market, the company is actively moving towards the development of IT products such as tablets and laptops, aiming to increase the penetration rate of AMOLED in IT products and further expand the application range of AMOLED products, with a growth rate of more than 10% expected in 2024.

In the ESL market, due to the accelerated demand for four-color displays boosting the willingness of end customers to adopt, continuing to expand the product line and breaking production bottlenecks will also be a focus for HannsTouch in 2024.

HannsTouch's E-paper drive backplane products, cultivated over many years, have been introduced to major customers worldwide, thereby reducing the impact of seasonal demand on the utilization rate of OCTA products. It is anticipated that in 2024, the sales ratio of ESL will continue to increase, optimizing capacity allocation.

Additionally, in professional display markets such as industrial control and automotive, HannsTouch will continue to strive and progress towards diversified transformation.

(I) Business policy:
The main product line of HannsTouch comprises high-end AMOLED touch sensors. The Company shall continue to upgrade its product and technical specifications in order to actively secure new market share. Further, via its advantage in high precision equipment, the Company shall develop new production and product technologies to increase the overall operating performance and the return on equity.
In response to international trends, HannsTouch actively ventures into the market for e-paper display driving backplanes, expanding it as the second main product line.
We continue to cultivate the touch sensor and display market in specialized domains, enhancing the company's technological value and diversifying its business reach.
Adhering to the business philosophy of continuously improving customer satisfaction, we offer a complete service from the development and design of touch products to product assembly. With flexible production, stable supply, and more competitive costs, we comprehensively enhance corporate competitiveness.
Using thin-film transistor (TFT) drive backplane technology as a new technology platform, we develop related new products, such as optical fingerprint recognition backplanes, providing customers with more integrated solutions.
Our goal is to establish a sustainable and robust development operation for our shareholders.
(II) Key production/sales policies:

The G5.5 production line, in addition to supplying OCTA products to existing AMOLED customers, aligns with the company's long-term development strategy by selectively expanding the production of thin-film transistor (TFT) drive backplane products to meet the demands of new customers. In 2024, we aim to diversify our customer base, broaden product application areas, mitigate risks, stabilize revenue, and continue to increase market share across various clients.

In 2023, the company enhanced its capacity to 15,000 units per month and successfully introduced new applications for drive backplanes (e-reader displays). In 2024, we will persist in providing new applications in technology, products, and services, developing professional market demands and meeting customer needs.

III. Future strategies, impacts of the competitive environment, regulatory environment, and the overall business environment

(I) HannsTouch Competitive Advantages:

High quality automated professional production lines

The Company is one of the few businesses globally that has fully automated production plants for manufacturing touch sensors. The building design of the production plants took into consideration accommodating the equipment capacity for fabricating high-end TFT and automated production lines so as to satisfy customer needs for high yield and quality in AMOLED touch sensors and TFT backplane, thus guaranteeing a reliable and steady supply to customers.

To cater to rapid demand change of technology and market, the Company adopts AI to coordinate production scheduling and quality enhancement system so as to increase the management capability of production line. The Company also seeks to consistently improve the business information systems (BIS). From value-adding decision making system for new products to the e-commercialization of procurement, logistics and business management platform systems, and from full automation of production lines to smart monitoring system, the Company consistently take on intellectualization challenges at all frontiers, in hopes of utilizing minimally diversified, rapid and stable production model to increase the customer capability in responding to market changes.

Competitive advantage in cost reduction

Manufacturing high-quality products and constantly improving yield are fundamental commitments of HannsTouch to its customers. Apart from consistently optimizing the parameters of production allocation and materials, the Company also expands its production capacity, and automates and intellectualizes production lines and procedures to further optimize the production efficiency and increase the overall competitive advantage.

In addition to the touch-control technology, the Company also seeks to develop the fabrication technology of TFT components that are superior to other foundries, allowing platforms of new generation flexible products and technology to gain more competitive advantage and secure new business opportunities in the application market.

The Company shall develop relationships with suppliers of new materials and implement certification standard for Authorized Economic Operator (AEO) to ensure diversification in high quality and steady supplies, reduce production cost and create better profitability. With more experience and better capabilities in maintaining its own production facilities, the Company is able to achieve proper cost control.

High value-adding technology platform

Apart from generation 5.5 glass backplane with a thickness of 0.25mm, the Company has also managed to make use of narrow linewidth, narrow bezel, high transmittance technology for mass-producing OCTA, realizing the application of OCTA for high-end products. Currently, the Company is also providing customers with various verification platforms for new product technologies, assisting the technology development of verification to satisfy the need for product diversification, and product specifications of different customers. So far, we have successfully developed OCTA products in sizes from 1 inch to 12.2 inches, to provide customers with further production technology services.

Meanwhile, under the foundation of highly automated and precise equipment, in 2021, with the fabrication technology of TFT components and backplane for ESL display, the Company shall continue to develop the related flexible product technology platform, widening the product application. In 2022, the Company worked

with customers to develop under-display fingerprint recognition products, and the Company first adopted glass substrates for verification and customer promotion, and then changed them to flexible substrates for testing verification in 2023.

High-efficiency operation management

The Company has gained years of experience working with many international mega brands and possesses the most professional fabrication technology and manufacturing management capabilities. The Company has been consistently engaging in quality improvement. Apart from complying with ISO 9001 regulations, the factory has implemented a fully automated functional testing in a scrupulous manner and shall continue to add in more testing equipment with functions strengthened, so as to ensure the utmost quality for the fabrication of products. In the future, the Company shall continue to strengthen smart management and preventive management. Via a consistent effort in optimization of production efficiency and cost reduction, the Company seeks to further improve the overall operation efficiency, and constantly pursue energy conservation along with carbon reduction as the Company works to achieve operating growth whilst contributing to environmental sustainability.

(II) Future business development strategy:
Operating model

With a steady customer group and demand, HannsTouch Solution is able to put in place equipment capacity that can cater to product lines of generation 4.5, 5.5 and 6, striving to become a manufacturer of OCTA touch sensors that caters to professional sectors and the sole business that provides AMOLED production lines of multiple generations to customers, thus securing a key role in the supply chain of OCTA market.

To lower the cyclical effect in seasonal demand fluctuation of the consumer smartphone market, increase operating performance and build a steady long-term profitability profile, under the foundation of highly automated and precise equipment, the Company shall develop new TFT components and their fabrication technology and build various new product platforms to add new value to customers.

Additionally, by leveraging both internal and external resources and collaborations, we aim to expand the breadth of product applications, develop markets for electronic shelf labels (ESL), industrial control, and automotive applications, and pioneer new professional display applications. We strive to provide a diverse range of technologies, products, and services, working towards delivering comprehensive solutions and aiming to become a professional provider of sensor and display solutions. This approach is intended to enhance our internal production value and offer significant value to our customers. Meanwhile, the Company invested in Glorystone Inc. to enter the hospitality industry. Through the new business model developed closer to consumers, it answers to each of the other sectors that the Group is in for defining a more valuable ecology.

Technology development

In terms of technological research and development, HannsTouch maintains a leading position in the mass production of 0.25mm thin glass and is dedicated to improving production processes for fine line widths, producing narrow bezel products, and continually innovating. We have successfully developed GOA technology, advanced HIAA technology, and high screen-to-body ratio full-screen displays. Through the full-scale production of these mobile technologies, we have passed stringent customer validations, becoming a leading technology supplier for touch products, and serving major smartphone brands globally. In the e-paper drive

backplane market, we utilize a process with fewer photomasks, continually passing major customer validations, which we expect will gradually increase our market share and solidify our market position.

With a foundation of high automation and precision equipment, HannsTouch has successfully developed high electron mobility thin-film transistor (TFT) process technology and flexible substrate process technology. These technologies are further applied to flexible thin-film transistor (TFT) component substrates and optical fingerprint recognition sensors, enhancing the added value of our products. Moving forward, HannsTouch will collaborate with academia and research institutions to co-develop technologies such as flexible coupled sensors, transparent projection films, and 5G antennas, expanding our product line. Additionally, we will integrate various technological achievements, focusing on the development of new and medical sensor technologies to meet the diverse needs of our clients. In response to the diversification of products, we will adjust our customer service system and deepen client relationships.

3. Service model

Besides actively shortening delivery times and improving yield quality, we will also focus on marketing strategies and clarify product development directions to identify new niche markets that align with our business strategy. Furthermore, we will continue to expand the scope of our technical services and formulate directions for technological development to enhance new value-added product platforms for our customers, establish more stable customer trust relationships, and thereby enhance the company's long-term operational stability and performance.

By consistently improving BIS, the Company continues to optimize and intellectualize the product development process to cater to the needs for the diversification of product platforms, shorten the time for product development and delivery, satisfy the needs of customers in shortening the time for a fast-paced cyclical product launch and the design verification of end product brands, provide a comprehensive production profile and secure key parameters of production and products for quick retrospective tracing and feedback.

The Company shall seek to strengthen the professional product management and professionalism of customer service. From improving product design development, mass production and after-sales service, to expediting the response to customers and execution of solutions to problems, and establishing timely reporting mechanism, the Company aims to build a trusting and interactive rapport, understand the production problem facing customers and provide timely and necessary services. Meanwhile, via the collaborative processes, the Company can consistently improve its own capabilities and play key roles in the supply chain, and implement certification standard for AEO, in hopes of becoming a trusting business partner that can gain customers’ approval.

Two. Company Profile

I. Publication Date: September 18, 1999

II. Company history:

pany history:
September 1999	:	The Company was founded at 9F, No. 108, Chenggong Road, Hukou Township, Hsinchu
		County, with an initial capital of NT$200 million.
October 1999	:	Signed a technology transfer contract with IBM Japan for generation 3.0 color filter.
December 1999	:	Obtained approval letter from the Industrial Development Bureau, Ministry of Economic
		Affairs, to postpone public offering.
		Obtained approval letter from Hsinchu Government for plant construction.
March 2000	:	Raised additional share capital to a total of NT$798,800 thousand.
April 2000	:	Raised additional share capital to a total of NT$1.6 billion.
		Signed ISO counseling contract with Kind Consulting Company.
May 2000	:	Obtained approval letter from the Industrial Development Bureau, Ministry of Economic
		Affairs, for conformity with standards as a key technology business.
October 2000	:	Raised additional share capital to a total of NT$3.6 billion.
November 2000	:	Mass production ceremony for generation 3.0 production line.
		Passed certification for ISO9002.
December 2000	:	Received investment from HannStar Display Corporation.
January 2001	:	Obtained Facility Registration Certificate from the Ministry of Economic Affairs.
March 2001	:	Received investment from Dai Nippon Printing (DNP).
April 2001	:	Received approval from Securities and Futures Institute for public offering on April 6,
		2001.
August 2001	:	Generation 3.5 CF commenced mass production.
November 2001	:	“Advanced Color Filter Photo Spacer Development Project for 17-inch TFT-LCD and
		Above” received NT$17.65 million of Dominant New Product Development Subsidy from
		the Industrial Development Bureau, Ministry of Economic Affairs.
December 2001	:	Raised additional share capital to a total of NT$4 billion.
		DNP made additional investments and held more than 10% of the Company's shares.
		Passed certification for ISO14000.
January 2002	:	The Company was listed on the Emerging Stock Market on January 2, 2002.
March 2002	:	Passed preliminary review of the Industrial Development Bureau, Ministry of Economic
		Affairs, for eligibility as a technology business.
May 2002	:	Applied for listing with Taiwan Stock Exchange Corporation.
September 2002	:	The Company's shares were listed for trading on September 27, 2002.
December 2002	:	Generation 4.0 commenced mass production.
February 2003	:	Founded Sintek Photronic Corp.
March 2003	:	Issued US$50 million of offshore convertible bonds.
July 2003	:	Named outstanding importer/exporter for 2002.
		Capitalized earnings and capital reserves, increasing paid-up capital to NT$5,068,966
		thousand.
March 2004	:	Issued new shares for the exercising of convertible bonds, increasing paid-up capital to
		NT$6,151,943 thousand.

April 2004	:	Issued US$120 million of offshore convertible bonds.
June 2004	:	Signed an NT$2-billion syndicated loan agreement lead-arranged by Taishin Bank.
April 2005	:	Issued new shares for the exercising of convertible bonds, increasing paid-up capital to
		NT$7,176,638 thousand.
May 2005	:	Subscribed to a 36% shareholding in Helix Technology Inc. through private placement.
September 2005	:	Acquired and re-organized Sintek Photronic Corp. into the Company's Tainan Branch.
		Paid-up capital increased to NT$8,449,295 thousand.
October 2005	:	Invested into a Mainland-based backlight module through a third location.
November 2005	:	Capitalized earnings and capital reserves, increasing paid-up capital to NT$9,276,939
		thousand.
June 2006	:	Elected new board members, during which Hua Li Investment acquired 4 director seats, Li
		Yi Investment acquired 1 director seat and 2 independent director seats, and HannStar
		Display acquired 1 supervisor seat.
		DNP (a 10% major shareholder) reported share transfer.
September 2006	:	Ho Tung transferred shares of HannsTouch to Hua Li Investment, and sold Hua Li
		Investment to FAE Holdings (B.V.I.) Limited.
November 2006	:	Hua Li Investment reappointed representative at the Company's board of directors.
December 2007	:	HannStar Display acquired 100% ownership in Hua Li Investment and reappointed
		representative at the Company's board of directors, making HannStar Display the largest
		shareholder of the Company.
		Passed certifications for ISO14000, ISO 9001, and OHSAS 18001.
April 2008	:	Sold Hukou Plant buildings and machinery to Chunghwa Picture Tubes Ltd.
June 2008	:	Reduced capital against cumulative losses NT$3,154,159 thousand.
January 2009	:	Invested into the production of solar cell modules and touch panels.
June 2009	:	After re-election of directors and supervisors on June 16, 2009, HannStar Display gained
		control over the Company.
July 2009	:	Obtained certification for Windows 7.
October 2009	:	Capitalized earnings and capital reserves, increasing paid-up capital to NT$6,635,897
		thousand.
December 2009	:	Issued new shares for cash, increasing paid-up capital to NT$8,435,897 thousand.
January ~	:	Employee warrants were exercised for new shares, increasing paid-up capital to
October 2010		NT$8,785,878 thousand.
January ~ July	:	Employee warrants were exercised for new shares, increasing paid-up capital to
2011		NT$8,839,508 thousand.
February 2011	:	Signed technology cooperation and supply agreement for LTPS production line with
		Samsung Mobile Display.
June 2013	:	Re-election of directors on June 18, 2012 resulted in a change of Chairperson and more
		than one-third of board members, causing HannStar Display Corporation to lose control
		over the Company.
August 2013	:	Signed cooperative agreement with WINTEK Corporation.
February 2014	:	Sold HannsTouch Solution's first touch sensor plant in Southern Taiwan Science Park,
		along with equipment and other touch control facilities, to HannStar Display Corporation.
August 2014	:	Issued 281,690 thousand common shares for cash through private placement, increasing
		paid-up capital to NT$11,656,408 thousand.

August 2015	:	Reduced capital against cumulative losses for NT$4,286,923 thousand, decreasing paid-
		up capital to NT$7,369,485 thousand.
September 2015	:	Carried out 2015 first domestic private placement of unsecured ordinary corporate bonds
		for NT$1.8 billion.
November 2016	:	Carried out 2016 first domestic private placement of unsecured ordinary corporate bonds
		for NT$1.8 billion.
		Carried out early recall and retired NT$1.8 billion of outstanding unsecured corporate
		bonds (2015-1).
January 2017	:	Completed a short-form merger with Prancing Horse One Investment Co., Ltd., in which
		the Company was the surviving entity and Prancing Horse One Investment Co., Ltd. was
		the dissolving entity.
November 2017	:	Carried out 2017 first domestic private placement of unsecured ordinary corporate bonds
		for NT$1.8 billion.
		Carried out early recall and retired NT$1.8 billion of outstanding domestic privately placed
		unsecured corporate bonds (2016-1).
November 2018	:	The Company signed a real estate leasing agreement with Glorystone Inc. for operational
		use for a tenor of 15 years.
April 2019	:	Subsidiary - Golden Apple Investment Corporation announced its acquisition of 100%
		share ownership in Chaiin Hotel Co., Ltd.
		The Company signed a real estate leasing agreement with JustCo (Taiwan Onshore) Ltd.
October 2019	:	Carried out early recall and retired NT$300 million of outstanding domestic privately
		placed unsecured corporate bonds (2017-Tranche A).
October 2019	:	Issued 70,000 thousand common shares for cash through public offering, and received
		acknowledgment from Financial Supervisory Commission on July 8, 2019 followed by its
		approval on August 26, 2019 to extend the payment deadline. Paid-up capital was
		increased to NT$8,069,485 thousand.
November 2019	:	Board of directors of subsidiary - Chaiin Hotel Co., Ltd. resolved a short-form merger with
		Chaiin Finders Hotel Co., Ltd. and Chaiin Goodmore Hotel Co., Ltd.
May 2020	:	Subsidiary - Golden Apple Investment Corporation sold 8,950,500 common shares of
		Chaiin Hotel Co., Ltd. (representing an 81% ownership interest) to Chu Yi Investment Co.,
		Ltd., and retained a 19% ownership interest.
July 2020	:	Subsidiary - Glorystone Inc. sold 100% of common shares held in Main Lu Catering Co.,
		Ltd. to HUALI Investment Corp.
August 2020	:	The 178,091,770 common shares privately placed in 2014 were offered publicly and made
		available for trading on August 11, 2020.
August 2020	:	Carried out early recall and retired NT$600 million of outstanding domestic privately
		placed unsecured corporate bonds (2017-Tranche B).
November 2020	:	Sold 1F-3F of HannsTouch Solution's plant in Southern Taiwan Science Park to HannStar
		Display Corporation.
April 2021	:	Carried out early recall and retired NT$900 million of outstanding domestic privately
		placed unsecured corporate bonds (2017-Tranche C).
July 2021	:	Carried out 2021 first domestic private placement of unsecured ordinary corporate bonds
		for NT$900 million.
August 2021	:	Subsidiary, Glorystone Inc. issued 26 million shares for cash capital increase at NT$18 per

share. The Company subscribed the shares for NT$198 million according to its original shareholding ratio.
October 2021 : Subsidiary, Glorystone Inc. established a joint venture, STAND Cafebar, with 10.20 million and acquired a shareholding of 51%.
November 2021 : Carried out 2021 first domestic private placement of unsecured ordinary corporate bonds for NT$1.8 billion. The Company established wholly-owned subsidiary, Silver Net Investment Co., Ltd. NT$150 million.
February 2022 : The Company established wholly-owned subsidiary, Hanns Blegrain Ltd., in Cayman Islands for US$7 million.
February 2022 : Subsidiaries, Glorystone Inc. and Silver Net Investment Co., Ltd. planned to establish a joint venture, Hann Yu Kitchen Co., Ltd. with affiliated company. The capital of Hann Yu Kitchen totals NT$150 million, with Glorystone Inc. acquired 51% shareholding for NT$76.5 million, whilst Silver Net Investment Co., Ltd. acquired 30% shareholding for NT$45 million.
September 2022 : The investee_Han Yu Kitchen Co., Ltd. was renamed “Pottery Inc.” December 2022 : The Company established the wholly-owned investee Hexin Commercial Technology Service (Shenzhen) Co., Ltd. for USD950,000 through Hanns Blegrain Ltd.
March 2023 : The Company repurchased treasury shares in September 2022, transferred part of such shares to employees in February 2023, and canceled the remaining part of such shares in the number of 1,901,000 shares, with the capital reduction record date set for March 30, 2023. The paid-in capital after the capital reduction was NTD 8,050,475,290.
June 2023 : The Company changed its name to “HannsTouch Holdings Company” (formerly known as HannsTouch Solution Incorporated) on June 12, 2023. Ordinary corporate bonds were reissued on September 1, 2023; ordinary shares were reissued on September 18, 2023.
October 2023 : Guangdong Shekel Technology Co., Ltd. (Original Name: Hexin Commercial Technology Service (Shenzhen) Co., Ltd. )
November 2023 : The Company repurchased treasury shares in February to April of 2023, transferred part of such shares to employees in September 2023, and canceled the remaining part of such shares in the number of 3,037,000 shares, with the capital reduction record date set for October 31, 2023. After the capital reduction and share cancellation, the total paid-in capital amounted to NT$8,020,105,290.

Three. Corporate Governance Report

I. Organization

(I) Organization structure:

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(II) Responsibilities of main departments:

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Department Responsibilities
 Annual audit planning.
Audit Office  Establishment and amendment of the internal control system and
implementation rules thereof.
 Analysis and management of financial risks, capital planning, funding, and
investment management.
Finance & Accounting  Bookkeeping, tax-related affairs, and financial statement analysis.
Center  Establishment and planning of accounting system, and supervision of
accounting affairs.
 Management of share-related affairs and investor relations.
 Support for legal issues and negotiation/resolution of disputes.
Legal Center
 Matters concerning trademarks.
 Planning and execution of human resource strategies and systems.
 Organizational Development and Talent Management
Human Resources Center  Planning and execution of various administrative and general service
systems.
 General service management and employee service.
 A sustainable development project team was convened and established, and
Sustainability Office relevant business operations were carried out in accordance with the
authority of each unit.
 Evaluation, design, and proof of concept for new products.
 Evaluation and introduction of new technologies, production procedures,
and materials.
 Introduction of new products and yield improvement.
 Quality testing of products and certification of dependability testing.
 Establishment and management of logistics system.
 Management of procurement, logistics, sale, warehousing, and
transportation related processes.
Operations Management
 Development, planning, and integration of computer systems within the
Center
Company.
 Digitalized operations and systems management.
 Management of development of automation production systems.
 Network and information security management.
 Responsibilities include formulating the company's quality
policy/objectives and managing quality assurance-related operations.
 Establishment and maintenance of a quality system, and confirmation and
creation of quality documents.
 Production management and yield/capacity enhancement.
 Production efficiency improvement and tracking, and standardization and
Manufacturing center
rationalization of production procedures.
 Production and sales management, production scheduling.
 Sales target forecast and proposal of business plans.
 Product price negotiation, quotation, confirmation of delivery time, and
Marketing and Sales customer development.
Division  Management of customer basic profile platform for operations and
management
 Analysis of customer service and failure analysis to provide feedback
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	internally for improvement measures and final confirmation of effectiveness.
Industrial Safety Office	 Planning and execution of environment, health, and safety tasks, and execution of work safety precautions.  Planning and execution of worker health checkups and health management.  Execution of occupational hazard prevention, environmental protection, and pollutionpreventionplans.
Strategy management center	 Planning and execution of various administrative and general service systems in the North District.  Property management of Dian Shih Building  Management of operation of factory systems.  Planning and maintenance of factory area construction.  Continuous promotion of factory automation and various viable energy conservationprograms.

II. Background information of directors, supervisors, the President, vice presidents, assistant vice presidents, and heads of various departments and branches

(I) Directors' background:

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April 2, 2024 Unit: thousand shares; %
Shares held by Spouse or relatives of second
Shareholding in
Shareholding Current spouse and degree or closer acting as
the name of a
when elected shareholding underage manager, director or
Nationality Date Term of Date third party Concurrent duties in
Gender children Main career (academic) supervisor
Title or place of Name elected/ office first the Company and in Remarks
and age Share- Share- Share- Share- backgrounds
registration appointed /year elected other companies
No. of holding No. of holding No. of holding No. of holding Relation-
Title Name
shares percen- shares percen- shares percen- shares percen- ship
tage tage tage tage
Ph.D., National Tsing Hua Chief Executive
University College of Officer of the
Humanities and Social Company
Sciences; EMBA, Peking Chairperson of the
University; Department of Company; Chairperson
East Asian Languages and of Golden Apple
Cultures, University of Investment
California, Berkeley Corporation, Silver
Chairperson of Yuanta Net Investment Co.,
Securities Investment Trust Ltd., and Torch
The
Chair- WeiHsin Female July 26, June 3, Co., Ltd. and HannStar Investment Co., Ltd.; YuChi
Republic of 3 4,699 0.58 6,755 0.84 10,741 1.34 0 0.00 Director Spouse Note 1
person Ma 55 2021 2015 Display Corporation Representative of Chiao
China
Institutional Director
of Hanns Blegrain
Ltd.; Director of
GloryStone Inc.,
Hannstar Display
Corp., Winbond
Electronics
Corporation, and
United Integrated
Services Co., Ltd.
Hua Li Not applicable Chairperson of Yueh
The Investme Ma First Investment
July 26, July 1,
Director Republic of nt 3 59,440 7.37 59,440 7.41 0 0.00 0 0.00 Corporation Nil Nil Nil Nil
2021 2006
China Corporati
on
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Shares held by Spouse or relatives of second
Shareholding in
Shareholding Current spouse and degree or closer acting as
the name of a
when elected shareholding underage manager, director or
Nationality Date Term of Date third party Concurrent duties in
Gender children Main career (academic) supervisor
Title or place of Name elected/ office first the Company and in Remarks
and age Share- Share- Share- Share- backgrounds
registration appointed /year elected other companies
No. of holding No. of holding No. of holding No. of holding Relation-
Title Name
shares percen- shares percen- shares percen- shares percen- ship
tage tage tage tage
----- End of picture text -----

	p registration		and age	appointed	/year	elected	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	backgrounds	py other companies	Title	Name	Relation- ship

	The Republic of China	Represent ative YuChi Chiao	Male 60	July 26, 2021	3	June 18, 2012	10,741	1.33	10,741	1.34	6,755	0.84	0	0.00	Ph.D. in Business Administration, City University of Hong Kong; and Ph.D.in Business Administration, Fudan University Director and President of Walsin Lihwa Corporation Director of HannStar Board Co., Ltd. Supervisor of Winbond Electronics Corporation	Chairperson and President of HannStar Display Corporation Chairperson of Hua Li Investment Corporation Representative of chairperson of Hanns Prosper Investment Corporation, and Hannshine Investment Corporation; supervisor of Torch Investment Co., Ltd.; corporate director representative of Coretronic Corporation, Bradford Ltd., Hannspirit (BVI) Holding Ltd., Guangbo Resources Co., Ltd., and Hannspree International Holding Ltd; chairperson of WALSIN LIHWA CORPORATION.	Chairpers on	WeiHsi n Ma	Spouse	Nil

Title	Nationality or place of registration	Name	Gender and age Date elected/ appointed	Gender and age Date elected/ appointed	Term of office /year Date first elected	Term of office /year Date first elected	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic) backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage	Concurrent duties in the Company and in other companies	Spouse or relatives of second degree or closer acting as manager, director or supervisor	Spouse or relatives of second degree or closer acting as manager, director or supervisor	Spouse or relatives of second degree or closer acting as manager, director or supervisor	Remarks
																	Title	Name	Relation- ship
Director	The Republic of China	TsuKang Yu	Male 71	July 26, 2021	3	June 3, 2015	0 0.00 0 0.00 0 0.00 0 0.00 Department of Business Administration, Chinese Culture University General Manager of USA International Co Ltd. President of (USA) and Rowin Inc (USA); Vice President of Union Group Corp. Vice President of Union Group Corporation Independent Director of TECO Image Systems Incorporation									Chairperson of Union Group Corporation, Union Electric Corporation and Tzu Feng Cultural and Educational Foundation Director of Lunghwa University of Science and Technology, Director of Feng Yuan Foundation and Sinox Lock Co., Ltd., Independent Director of CATHAY REAL ESTATE DEVELOPMENT CO.,LTD.	Nil	Nil	Nil	Nil
Director	The Republic of China	ChihChu ng Chou	Male 55	July 26, 2021	3	July 26, 2021	0	0.00	0	0.00	0	0.00	0	0.00	Master in Chemical Engineering, National Taiwan University of Science and Technology and EMBA, National Chengchi University Chief of Supplies Department and Finance Department of Winbond Electronics Corporation, and Director of The Allied Association for Science Park Industries	CFO and Corporate Governance Officer of Winbond Electronics Corporation; President of Winbond Integrated Circuit (Suzhou) Co., Ltd., Representative of Institutional Director of Hannstar Board Co., Ltd., and Representative of Institutional Director of GloryStone Inc.	Nil	Nil	Nil	Nil

	Nationality		Gender Date	Gender Date	Term of Date	Term of Date	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Shareholding when elected Current shareholding Shares held by spouse and underage children Shareholding in the name of a third party Main career (academic)	Concurrent duties in	Spouse or relatives of second degree or closer acting as manager, director or supervisor	Spouse or relatives of second degree or closer acting as manager, director or supervisor	Spouse or relatives of second degree or closer acting as manager, director or supervisor
Title	or place of registration	Name	and age elected/ appointed		office /year	first elected	backgrounds No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage No. of shares Share- holding percen- tage									the Company and in other companies	Title	Name	Relation- ship	Remarks
Independ ent Director	The Republic of China	TienShan g Chang	Male 72	July 26, 2021	3	June 14, 2018	0 0.00 0 0.00 0 0.00 0 0.00 MBA, University of Pennsylvania Wharton School; Bachelor, Harvard University Director of CR Yuanta Fund Management Co., Ltd. Supervisor of Lytone Enterprise, Inc. Representative of Institutional Supervisor of MICROTIPS TECHNOLOGY INC.									Representative of Corporate Chairperson of Fu Burg Industrial Co., Ltd. Supervisor, Broalux Taiwan Ltd. Independent Director of Transtouch Technology Incorporation	Nil	Nil	Nil	Nil
Independ ent Director	The Republic of China	TingWon g Cheng	Male 82	July 26, 2021	3	July 26, 2021	0	0.00	0	0.00	0	0.00	0	0.00	Bachelor of Statistics and Master in Finance Studies, National Chengchi University Master and PhD in Accountancy, University of Missouri Professor and Dean of Statistics Department, Dean of College of Commerce, Dean of Academic Affairs, President and chair professor of National Chengchi University, and Director of Central Bank of the Republic of China (Taiwan) President of Chinese Association of Business and Intangible Assets Valuation and Independent Director of TECO Electric & MachineryCo.,Ltd.	Chair Professor of National Chengchi University, Chairman of Sustainability Standards Committee of the Accounting Research and Development Foundation (charitable nature) SuperAlloy Industrial Co., Ltd. and Independent Director, Acepodia Biotechnologies, Ltd.	Nil	Nil	Nil	Nil

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	p registration		and age	appointed	/year	elected	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	backgrounds	py other companies	Title	Name	Relation- ship

Independ ent Director	The Republic of China	JinFu Chang	Male 76	July 26, 2021	3	July 26, 2021	0	0.00	0	0.00	0	0.00	0	0.00	Bachelor in Electrical Engineering, National Taiwan University, and PhD in Electrical Engineering and Information Science, University of California, Berkeley Chairperson of Institute for Information Industry, President of National Chi Nan University, President of Yuan Ze University, and Acting Chairperson of Industrial Technology Research Institute Minister of State for Executive Yuan, Deputy Minister of National Science Council, Independent Director of Taiwan Secom Co., Ltd. and TECO Electric & Machinery Co., Ltd., Chairperson of An-Hui Information Technology Co.,Ltd.	Emeritus professor of National Chi Nan University IEEE Fellow	Nil	Nil	Nil	Nil

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	p registration		and age	appointed	/year	elected	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	No. of shares	Share- holding percen- tage	backgrounds	py other companies	Title	Name	Relation- ship

Independ ent Director	The Republic of China	TsungHa n Tsai	Male 49	May 29, 2023	3	May 29, 2023	0	0.00	0	0.00	0	0.00	0	0.00	Ph.D., Institute of Information Engineering, National Taiwan University Research fellow, Center for Geographic Information Science, RCHSS, Academia Sinica (from February 2021 to Present) Professor at the Department of Information Engineering, National Central University (August 2016 to January 2021) Vice chairman, Artificial Intelligence in Medicine and Healthcare (February 2023 to Present) Executive director, ACLCLP(2022 to Present)	Research fellow, Center for Geographic Information Science, RCHSS, Academia Sinica (from February 2021 to Present) Vice chairman, Artificial Intelligence in Medicine and Healthcare (February 2023 to Present) Director of the ACLCLP (2022- present), Director of the Taiwan Association for Digital Humanities	Nil	Nil	Nil	Nil

Note 1: The Chairman also serves as the CEO due to his extensive industry leadership and relevant background. Over half of the directors do not hold any staff or managerial positions within the company. To adhere to corporate governance principles, one additional independent director seat was introduced at the 2023 Annual General Meeting of Shareholders (increasing the total from three to four seats).

Where the director or supervisor is a representative of corporate director, the name of the corporate shareholder, its top-10 shareholders and shareholding percentages are listed:

(1) Corporate shareholder's major shareholders

		March 26,2024 Shareholding percentage % 100
Name of corporate shareholder	Corporate shareholder's major shareholders	Shareholding percentage %
HUALI Investment Corp.	HannStar Display Corporation	100

(2) Key shareholders of major corporate shareholders listed in Table (1)

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March 26, 2024
Name of corporate Shareholding
Corporate entity's major shareholders
entity percentage %
Chin-Xin Investment Co., Ltd. 10.5448
Walsin Lihwa Corporation 10.1904
Winbond Electronics Corporation 5.1015
YuChi Chiao 2.3211
HannsTouch Holdings Company 1.7680
Advanced Composite International Stock Index Investment Account for 1.0360
a series of funds of Advanced Star Fund Manager in the trusteeship of
HannStar Display JPMorgan Chase Bank, N. A., Taipei Branch
Corporation Vanguard Emerging Markets Emerging Markets Stock Index Fund 0.8781
Investment Account managed by the Vanguard Group in the trusteeship
of JPMorgan Chase Bank, N. A., Taipei Branch
Standard Chartered International Commercial Bank, Tunbei Branch 0.5794
entrusted with the custody of iShares Core MSCI Emerging Market ETF
Investment Account
Norges Bank Investment Account under custody of Citibank (Taiwan) 0.5490
JPMorgan Chase Bank N.A., Taipei Branch in custody for Complete 0.5057
Equity Index Trust II Investment Account of Advanced Trust Corp.
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(3) Directors' expertise and independence

I. Disclosure on professional qualification of Directors and independence of Independent Directors:

sclosure onprofessionalqualification of Directors and independence of Independent Directors:	sclosure onprofessionalqualification of Directors and independence of Independent Directors:	sclosure onprofessionalqualification of Directors and independence of Independent Directors:	sclosure onprofessionalqualification of Directors and independence of Independent Directors:
Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies
Director WeiHsin Ma	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: Chairperson of Yuanta Securities Investment Trust Co., Ltd. and HannStar Display Corporation Spousal relation with director of Hua Li Investment Corporation, YuChi Chiao -
Director Representative of Hua Li Investment Corporation: YuChi Chiao	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: director and president of Walsin Lihwa Corporation, director of HannStar Board Co., Ltd. and supervisor of Winbond Electronics Corporation Elected representing Hua Li Investment Corporation; spousal relation with Chairperson, WeiHsin Ma. -
Director TsuKang Yu	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: General Manager of USA International Co Ltd. (USA) and President of Rowin Inc (USA); Vice President of Union Group Co., Ltd.; Independent Director of TECO Image Systems Co., Ltd.; Director of Lunghwa University of Science and Technology; Director of Feng Yuan Foundation and Sinox Lock Co., Ltd., Independent Director of CATHAY REAL ESTATE DEVELOPMENT CO.,LTD. Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises. 1
Director ChihChung Chou	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: Chief of Supplies Department and Finance Department of Winbond Electronics Corporation, and Director of The Allied Association for Science Park Industries	Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises.	-

Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies
Independent Director TienShang Chang	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: Director and President of Credit Suisse First Boston Investment Bank (Taiwan), Director of CR Yuanta Fund Management Co.,Ltd, Independent Director of Transtouch Technology Inc., Supervisor of Lytone Enterprise, Inc., Representative of Supervisor of Microtips Technology Inc., Representative of Corporate Chairperson of Fu Burg Industrial Co., Ltd., Supervisor of Broalux Taiwan Ltd. Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises. 1
Independent Director TingWong Cheng	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in commerce, law, finance, accounting, or corporate operations: Professor, Dean, President, Chair Professor of the Accounting Department of National Chengchi University, Chairman of the Accounting Research and Development Foundation Sustainability Standards Committee (non-profit), Chairman of the CABIAV Organisation, Independent Director of TECO Electric & Machinery Co., Ltd., Independent Director of SuperAlloy Industrial Co., Ltd. 3. Professional expertise or technical personnel with certifications for national examinations required to engage in a profession: First place in 1965 national financial examination. 4. Instructor or higher position in a public or private junior college, college or university department related to the business needs of the company: Professor and chair professor of Department of Accounting, National ChengchiUniversity	Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises.	2

Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Name Professional qualification and experience Independence status Number of positions as independent director in other public companies
Independent Director JinFu Chang	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: Chairperson of Institute for Information Industry, President of National Chi Nan University, President of Yuan Ze University, and Acting Chairperson of Industrial Technology Research Institute, Deputy Minister of National Science Council, Independent Director of Taiwan Secom Co., Ltd. and TECO Electric & Machinery Co., Ltd. 3. Instructor or higher position in a public or private junior college, college or university department related to the business needs of the company: Instructor, professor, head and director of Department of Electrical Engineering of National Taiwan University; professor and Vice President for Academic Affairs of NationalCentralUniversity. Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises. -
Independent Director TsungHan Tsai	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience required for business, legal, financial, accounting or corporate operations: Researcher of the Center for Geographic Information Science, RCHSS, Academia Sinica; Professor, Department of Information Engineering, National Central University (August 2016 - January 2021); Vice Chairman of Artificial Intelligence in Medicine and Healthcare (February 2023 to date), Director of the ACLCLP (2022 to date), Researcher of the Center for Geographic Information Science, RCHSS, Academia Sinica (February 2021 to date), Chairman of Taiwan Association for Digital Humanities 3. Lecturer or above in public or private colleges and universities with relevant disciplines required for the Company's business: Professor at the Department of Computer Science and Information Engineering, National Central University.	Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises.	-

II. Diversity and independence of the Board of Directors:
(I) Diversity of the Board of Directors: Describe the diversity policy of the Board of Directors, goals and implementation status. The diversity policy of the Board includes, but does not limit to, standard for director election, professional qualification and experience, gender, age, nationality and cultural composition or ratio of directors. The concrete goals and implementation status of policy shall also be described.
- Board diversity policy:

According to Article 20 (Capabilities of the board of directors) of Corporate Governance Best Practice Principles for TWSE/TPEx Listed Companies:

The board of directors of a TWSE/TPEX listed company shall exercise guidance over corporate strategies, supervise the management, and be held responsible to the company and its shareholders. The company shall adopt various processes and arrangements as part of its corporate governance system to ensure that the board of directors performs duties in accordance with laws, the Articles of Incorporation, and shareholders' resolutions. Board of directors of a TWSE/TPEX listed company shall be structured based on the company's size and major shareholders' holding position. There should be five director seats or more, adjustable depending on the company's practical requirements.

Board members should be diversified in a manner that supports the Company's operations, business activities, and growth requirements, provided that the number of directors who concurrently hold managerial positions do not exceed one-third of the board. The diversification policy should include, but is not limited to, the following two principles:

I. Background and value: Gender, age, nationality, culture etc.
II. Knowledge and skills: Career background (e.g. law, accounting, industry, finance, marketing, or technology), professional skill, and industry experience.

All board members shall possess the knowledge, skills, and characters needed to exercise their duties. In order to fulfill the ideal goals for corporate governance, the Board of Directors as a whole shall be capable of the following: making judgment about operations, accounting and financial analyses, operational management, crisis management, industrial knowledge, international market views, leadership, and decision-making.

Management goals and implementation status of diversity of the current (Ninth) Board of Directors:
A. Increase the proportion of non-employee Directors: Targeted and actual number of Board seats are both 7 seats. The completion rate is 100%.
B. Increase the proportion of Directors with financial and accounting background: Targeted number of Board seats is four, but the actual number is three. The completion rate is 75%.
C. B. Increase the proportion of Directors with industry background: Targeted number of Board seats is four, but the actual number is three. The completion rate is 75%.

In addition, female directors accounted for 12.5%; non-employee directors accounted for 87.5%; independent directors who served for two terms or more, 25%, and one term or less, accounted for 75%. The details are as follows:

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Item Basic information Professional expertise Industry experience
Terms
Lead
Concu and Oper Engi Crisis
Busin ershi Secur
rrent years Com ation neeri and Indus
ess p and ities Manu
Nation emplo as merc al ng risk try
Name Gender Age mana decisi and factur
ality yment indepe e and mana and mana techn
geme on- finan ing
positio ndent law geme techn geme ology
nt maki ce
n direct nt ology nt
ng
or
WeiHsin 
Female 55 TW  N/A      
Ma
YuChi 
Male 60 TW N/A     
Chiao
TsuKang 
Male 71 TW N/A    
Yu
ChihChung 
Male 55 TW N/A       
Chou
TienShang 5 
Male 72 TW      
Chang years
JinFu 2 
Male 76 TW      
Chang years
TsungHan
Male 49 TW 1 year      
Tsai
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(II) Independence of the board: Describe the number and proportion of independent directors, as well as the independence of the board. Furthermore, describe whether circumstances listed in Securities and Exchange Act, Article 26-3, Paragraph 3 and 4 exist, including whether spousal relationship or familial relationship within the second degree of kinship exist between directors or between supervisors, or between director(s) and supervisor(s):

The current Board has four Independent Directors, and the independence of the Board is as follows: (Note 1)

Code Name	1	2	3	4	5	6	7	8	9	10	11	12	Remarks
TienShang Chang													Independent
TingWong Cheng													Independent
JinFu Chang													Independent
TsungHan Tsai													Independent

Note 1: Check “  ” in the box if the director with code _ has met the following conditions during active duty and two years prior to

the date elected.

(1)	Not employed by the Company or any of its affiliated companies.
(2)	Not a director or supervisor of the Company or any of its affiliated companies (this restriction does not apply to concurrent
	independent director positions in the Company, its parent company, subsidiary, or another subsidiary of the parent that is
	compliant with the Act or local laws).
(3)	Does not hold more than 1% of the Company's outstanding shares in their own names or under the name of spouse, underage
	children, or proxy shareholder; nor is a top-10 natural-person shareholder of the Company.
(4)	Not a manager listed in (1), or a spouse, 2nd-degree relative or closer or 3rd-degree direct relative or closer to any personnel
	listed in (2) or (3).
(5)	Not a director, supervisor or employee of any corporate shareholder that: 1. holds 5% or more of the Company's outstanding
	shares; 2. is a top-5 shareholder; or 3. appoints director/supervisor representative in the Company according to Paragraph 1
	or 2, Article 27 of The Company Act. (This excludes concurrent independent director positions held within the Company
	and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local laws).
(6)	Not a director, supervisor or employee of any other company that controls directorship in the Company or where more than
	half of total voting rights are controlled by a single party (this excludes concurrent independent director positions held within
	the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local
	laws).
(7)	Does not assume concurrent duty as Chairperson, president or equivalent role, and is not a director, supervisor, or employee
	of another company or institution owned by spouse. (This excludes concurrent independent director positions held within
	the Company and its parent/subsidiary, or in other subsidiary of the parent company that are compliant with the Act or local
	laws.)
(8)	Not a director, supervisor, manager, or shareholder with more than 5% ownership interest in any company or institution that
	has financial or business relationship with the Company (however, this excludes concurrent independent director positions
	held within companies or institutions that hold more than 20% but less than 50% outstanding shares of the Company, or in
	the Company's parent or subsidiary, or in another subsidiary of the parent that is compliant with the Act or local laws).
(9)	Not a professional who provides audit service, or commercial, legal, financial, accounting or related services for an
	accumulated sum of less than NT$500 thousand in the last 2 years, to the Company or its affiliate, nor is an owner, partner,
	director, supervisor, or manager, or the spouse of any of the above, of a sole proprietorship, partnership, company, or
	organization that provides such services to the Company or its affiliated companies. This excludes roles as Remuneration
	Committee, Public Acquisition Review Committee or M&A Special Committee member appointed in accordance with the
	Securities and Exchange Act or Business Mergers And Acquisitions Act.
(10)	(Securities and Exchange Act, Article 26-3, Paragraph 3 and 4) Not a spouse or relative of second degree or closer to any
	other directors.

(11) Does not meet any of the conditions stated in Article 30 of The Company Act.
(12) Not elected as a government or corporate representative according to Article 27 of The Company Act.

(II) Profiles of the President, vice presidents, assistant vice presidents, and managers:

April 2, 2024 Unit: thousand shares; %

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Shares held by
Shareholding Spouse or relatives of
Current spouse and
in the name of second degree or closer
shareholding underage
Date a third party Concurrent acting as managers
children Main career (academic)
Title Nationality Name Gender elected/ positions in other Remarks
Share- Share- Share- backgrounds
appointed No. No. companies
of holding No. of holding of holding Title Name [Relation-]
percent shares percent percent ship
shares shares
age age age
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CEO President	The Republic of China	WeiHsin Ma (Note 1)	Female	April 30, 2019	6,755	0.84	10,741	1.34	-	-	Ph.D., National Tsing Hua University College of Humanities and Social Sciences; EMBA, Peking University; Department of East Asian Languages and Cultures, University of California, Berkeley Chairman of Yuanta Securities Investment Trust Co., Ltd. and HannStar Display Corporation	Chairman of the Company Chairperson of the Company; Chairperson of Golden Apple Investment Corporation, Silver Net Investment Co., Ltd., and Torch Investment Co., Ltd.; Representative of Institutional Director of Hanns Blegrain Ltd.; Director of GloryStone Inc., Hannstar Display Corp., Winbond Electronics Corporation, and United Integrated	Nil	Nil	Nil	Note 1

											Services Co., Ltd.	Services Co., Ltd.
Head of Finance Head of corporate governance The Republic of China		ChunJie Yeh (Note 2)	Male	November 1, 2023 December 21, 2023	-	-	-	-	-	-	PhD, Department of Finance, Tamkang University Department of Finance, National Taiwan University Director of Investment Division, Hannstar Display Corp. Vice President, Taishin Bank Senior Manager of Jih Sun Bank Manager, China Bills Finance Corporation Senior Manager, Entie Commercial Bank Representative of Juristic Person Director of Innovision Technology Co., Ltd.		Nil	Nil	Nil	Note 2
Head of accounting	The Republic of China	ChuXia Weng (Note 2)	Female	2023.11.01	-	-	-	-	-	-	Department of Accounting, Shih Chien University Accounting specialist of Nexia Trans-Asia Accounting Firm Accounting Manager, AMIT Wireless Co.,Ltd.	Nil	Nil	Nil	Nil	Note 2

Note 1. Chairman, WeiHsin Ma, concurrently serves as the CEO and the President since October 31, 2023.

Note 2. Mr. YingJie Chang, Head of Corporate Governance, served a term of office from May 2, 2013 to November 30, 2023 and was succeeded by Mr. Yeh Chun-Jie on December 21,2023. Mr. Chun-Jie Yeh, Head of Finance, concurrently served as Corporate Governance Officer and Ms. ChuXia Weng, Head of Accounting, took over on November 1, 2023.

III. Compensation to directors, supervisors, the President, and vice presidents in the latest year

(I) Compensation to non-independent and independent directors:

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March 31, 2024; Unit: NT$ thousands
Directors' compensation Compensation received as employee
Severan
Sum of A, B, C, and Sum of A, B, C, D,
Benefits (A) Pension remuneration Director Fees for services D as a percentage of profit or loss after Salaries, bonuses, special payment ce remuneration to Proposed 2023 percentage of profit E, F, and G as a Compensation
(B) rendered (D) allowances etc. (E) and
(C) tax (%) employees (G) or loss after tax (%) from
pension
parent
(F)
company
All All
All All or
Title Name All compa companies business
compan compan
All compani All nies The included All investme
ies ies All
companies The The es companies The includ Company in the companies nts other
include The include companies
The included in Co Co included The included in Co ed in financial The included in than
d in the Compa d in the The Company included in
Company the mpa mpa in the Company the mpa the statements Company the subsidiari
financial ny financia ny financial ny financia financial the financial ny financ Amou Amou financial es
l l statements Amou Amount
statements statemen statements ial nt paid nt paid statements
stateme stateme nt paid paid in
ts statem in in
nts nts in cash cash
ents shares shares
Chairperson WeiHsin Ma 240 240 - - - - 50 50 -0.03 -0.03 11,745 11,745 - - - - - - -1.34 -1.34 240
Hua Li
240 240 - - - - - - -0.03 -0.03 - - - - - - - - -0.03 -0.03 -
Investment
Director
Representative:
- - - - - - 40 40 -0.004 -0.004 - - - - - - - - -0.004 -0.004 14,757
YuChi Chiao
Director TsuKang Yu 240 240 - - - - 40 40 -0.03 -0.03 - - - - - - - - -0.03 -0.03 -
Director ChihChung Chou 240 240 - - - - 50 50 -0.03 -0.03 - - - - - - - - -0.03 -0.03 -
Independent
TienShang Chang 360 360 - - - - 50 50 -0.05 -0.05 - - - - - - - - -0.05 -0.05 -
Director
Independent
TingWong Cheng 360 360 - - - - 50 50 -0.05 -0.05 - - - - - - - - -0.05 -0.05 -
Director
Independent
JinFu Chang 360 360 - - - - 50 50 -0.05 -0.05 - - - - - - - - -0.05 -0.05 -
Director
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	Independent Director TsungHan Tsai 213 213 30 30 -0.03 -0.03 - - - - - - - - -0.03 -0.03	-
	Total 2,253 2,253 - - - - 360 360 -0.30 -0.30 11,745 11,745 - - - - - - -1.61 -1.61	14,997
1.	Please explain the policy, system, standards and structure by which independent director compensation is paid, and association between the amount paid and independent directors' responsibilities, risks, and time committed:
2.	The Company has developed its director (including independent director) compensation policy according to The Company Act and Articles of Incorporation. Compensation package is proposed by the Remuneration Committee
	after taking into consideration the Company's operating strategies, profitability, future prospects, the industry environment, and performance of individual directors, and is executed with the approval of the board of directors.
3.	Compensation received by director for providing services (e.g. assuming consultant positions of non-employee nature in the parent company/any company included in the financial statements/investment companies) in the last year,
	except those disclosed in the above table: Nil.
The remuneration information disclosed in the table differs from the informationproduced for taxationpurposes. Thus,the table serves disclosurepurposes,and not taxation use.

Compensation range

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Name of director
Sum of first 4 compensations (A+B+C+D) Sum of first 7 compensations (A+B+C+D+E+F+G)
Range of compensation paid to directors All companies included All companies included
The Company in the financial The Company in the financial
statements statements
WeiHsin Ma, Huali WeiHsin Ma, Huali
Hua Li Investment; Hua Li Investment;
Investment Inc. Investment Inc.
YuChi Chiao YuChi Chiao
YuChi Chiao; TsuKang YuChi Chiao; TsuKang
TsuKang Yu, ChihChung TsuKang Yu, ChihChung
Yu Yu
Chou Chou
Below NT$1,000,000 ChihChung Chou; ChihChung Chou;
TienShang Chang, TienShang Chang,
TienShang Chang TienShang Chang
TingWong Cheng TingWong Cheng
TingWong Cheng; JinFu TingWong Cheng; JinFu
ChinFu Chang, ChinFu Chang,
Chang Chang
TsungHan Tsai TsungHan Tsai
TsungHan Tsai TsungHan Tsai
NT$1,000,000 (inclusive) ~ NT$2,000,000 (non-
- - - -
inclusive)
NT$2,000,000 (inclusive) ~ NT$3,500,000 (non-
- - - -
inclusive)
NT$3,500,000 (inclusive) ~ NT$5,000,000 (non-
- - - -
inclusive)
NT$5,000,000 (inclusive) ~ NT$10,000,000 (non-
- - - -
inclusive)
NT$10,000,000 (inclusive) ~ NT$15,000,000 (non-
- - WeiHsin Ma WeiHsin Ma
inclusive)
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NT$15,000,000 (inclusive) ~ NT$30,000,000 (non-
- - - -
inclusive)
NT$30,000,000 (inclusive) ~ NT$50,000,000 (non-
- - - -
inclusive)
NT$50,000,000 (inclusive) - NT$100,000,000 (non-
- - - -
inclusive)
NT$100,000,000 and above - - - -
Total 9 9 9 9
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(II) Supervisors' remuneration: not applicable since no supervisor was appointed for the Company.

(III) Compensation to the President and vice presidents:

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March 31, 2024; Unit: NT$ thousands
Sum of A, B, C, and
Bonus and special Proposed 2023 remuneration to
Salary (A) Pension (B) D as a percentage of
allowances (C) employees (D) net income (%) Compensation
from parent
All companies
All All All All
included in the company or
Title Name companies companies companies The Company companies business
financial
The included in The included in The included in The included in
investments
statements
Company the Company the Company the Company the other than
Amount Amount Amount Amount
financial financial financial financial
subsidiaries
paid in paid in paid in paid in
statements statements statements statements
cash shares cash shares
CEO
WeiHsin Ma 7,154 7,154 - - 4,590 4,590 - - - - -1.31 -1.31 240
President
Total 7,154 7,154 - - 4,590 4,590 - - - - -1.31 -1.31 240
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Note 1. Chairman Ma Wei-Xin also serves as CEO and was appointed as the President on October 31, 2023.

Note 2. The remuneration information disclosed in the table differs from the information produced for taxation purposes. Thus, the table serves disclosure purposes, and not taxation use.

Compensation range

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Names of President and vice presidents
Range of compensation to the President and vice presidents All companies included in the
The Company
financial statements
Below NT$1,000,000 - -
NT$1,000,000 (inclusive) ~ NT$2,000,000 (non-inclusive) - -
NT$2,000,000 (inclusive) ~ NT$3,500,000 (non-inclusive) - -
NT$3,500,000 (inclusive) ~ NT$5,000,000 (non-inclusive) - -
NT$5,000,000 (inclusive) ~ NT$10,000,000 (non-inclusive) - -
NT$10,000,000 (inclusive) ~ NT$15,000,000 (non-inclusive) WeiHsin Ma WeiHsin Ma
NT$15,000,000 (inclusive) ~ NT$30,000,000 (non-inclusive) - -
NT$30,000,000 (inclusive) ~ NT$50,000,000 (non-inclusive) - -
NT$50,000,000 (inclusive) - NT$100,000,000 (non-inclusive) - -
NT$100,000,000 and above - -
Total 1 1
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(IV) Names of managers entitled to employee remuneration and amount entitled:

			March 31,2024;Unit: NT$ thousands
	Title	Name	Amount paid in shares Amount paid in cash Total Total as a percentage of net income (%)
M	Chairperson CEO President	WeiHsin Ma
anagers	Head of corporate governance Head of Finance	ChunJie Yeh	No profits were recorded for the year 2023, and it was resolved not to distribute dividends.
	Head of accounting	ChuXia Weng

Note 1: This entry records the distribution of remuneration for managers as approved by the board for the most recent fiscal year. Net profit after tax refers to the net income attributable to the parent company for the year 2023 as reported in the standalone financial statements.

(V) Amount of compensation paid in the last 2 years by the Company and all companies included in the consolidated financial statements to the Company's directors, supervisors, President, and vice presidents, and their respective proportions to standalone net income, as well as the policies, standards, and packages by which they were paid, the procedures through which compensations were determined, and their association with business performance and future risks:

Title	2022	2022	2023	2023
	The Company	All companies included in consolidated statements	The Company	All companies included in consolidated statements
Director	9.49%	9.49%	-0.30%	-0.30%
President and vice presidents(includingCEO)	60.75%	66.41%	-1.56%	-1.56%

Note 1: The Company does not have supervisor in place.

Note 2: Net income (loss) refers to the amount of after-tax profit shown in the Company's standalone financial statements that is attributable to the parent company.

The Director remuneration policy complies with the Company Act and Articles of Incorporation, takes into account the results of yearly performance evaluation (including the Director’s performance in the comprehension of the Company’s targets, missions and duties, participation level of the management, fostering and communication of internal working relationship, professionalism and continuing education, internal control and other factors). The Remuneration Committee shall make the proposal pertaining the director remuneration, which shall be executed after resolution passed by the board of directors.

Managers' compensations are proposed by the Remuneration Committee after taking into consideration the Company's operating strategies, profitability, individual performance (including problem solving capabilities, planning and organization capabilities, active participation, dedication and engagement, continuous improvements, building successful team, cross departmental communication and talent development capabilities, and ESG implementation

etc.), and the market standard, and executed with the approval of the Board of Directors.

The above principles may be adjusted as needed at appropriate times depending on changes in the economy and the industry after taking into consideration the Company's future prospects and profitability.

IV. Corporate governance

(I) Functionality of board of directors:

A total of 7 Board meetings (A) were held in 2023; Directors' attendance records are summarized below:

Title Name Number of in- person attendance(B) Number of proxy attendance In-person attendance rate (%) `【`B /A`】` Remarks
Chairman WeiHsin Ma 7 0 100%
Chairman Hua Li Investment Corporation Representative: YuChi Chiao 5 1 71%
Director TsuKang Yu 6 0 86%
Director ChihChung Chou 7 0 100%
Independent Director TienShang Chang 7 0 100%
Independent Director TingWong Cheng 7 0 100%
Independent Director JinFu Chang 7 0 100%
Independent Director TsungHan Tsai 5 0 100% Newly elected on May 29, 2023
Other mandatory disclosures:
I. Board meeting-related disclosures required by Article 14-3 of the Securities and Exchange Act and any documented
objection or reservation made by independent directors against board of directors' resolutions; state the date and
details of the resolution, the meeting session, the independent directors’ opinions and how the Company has
responded:
(I) Conditions described in Article 14-3 of the Securities and Exchange Act: Please refer to “Major Board of
Directors resolutions and execution” in page 62 of this annual report.
(II) Any other documented objections or reservations raised by independent director against board resolution in
relation to matters other than those described above: Nil.
II. Disclosure regarding avoidance of interest-conflicting motions, including the names of directors concerned, the
motions, the nature of conflicting interests, and the voting process:
(1) Discussion of the Board of Directors on February 20, 2023 - Proposal to lend capital to Glorystone Inc.: As the
Chairperson, WeiHsin Ma is also the director of Glorystone Inc. and spouse of Director, YuChi
Chiao, whilst Director, ChihChung Chou is the director of Glorystone Inc. ; they recused
themselves as required by law due to conflicting interests and TienShang Chang was assigned to
be the acting chairperson. The proposal was approved unanimously by attending Directors after
the acting chairperson solicited opinion from the rest of the Board.
(2) Discussion of the Board of Directors on February 20, 2023- the board discussed the continued acquisition of
ordinary shares in HannStar Display Corporation. Since Director Chiao serves as the Chairman of
HannStar and Chairman Ma, his spouse, is also a director at HannStar, a conflict of interest arises.
The chair appointed TienShangChangas the actingchair to consult the attendingdirectors,who

approved the motion without objections.

(3) On July 31, 2023, the board discussed the appointment of the General Manager. Since Chairman Ma was proposed for the role and Director Chiao is his spouse, they are required to avoid conflict of interest. TienShang Chang, the designated independent director, acted as chair and, after consulting with the present directors, the motion was passed without objections.
(4) On October 31, 2023, the board discussed a change in the internal audit report signing officers in response to Chairman Ma's new role as General Manager. The board proposed to appoint Director ChihChung Chou as the new signer of the internal audit reports. With Chairman Ma and Director Chiao having a spousal relationship and required to avoid conflicts of interest, TienShang Chang, the designated independent director, acted as chair and consulted the attending directors, who approved the change without objections.
(5) On October 31, 2023, during the board discussion, it was proposed to change the internal audit report signatory in response to Chairman WeiHsin Ma serving concurrently as the General Manager. It was proposed to appoint Director ChihChung Chou as the new signatory. With Chairman Ma and Director Chiao serving as his spouse, a conflict of interest necessitated their recusal, and TienShang Chang, the designated independent director, acted as the interim chair. The proposal was approved without objections from the present directors.
(6) On January 22, 2024, the board discussed the repair of the south wall of the company’s Nanke plant. Since Chairman Ma is a director of United Integrated Services Co., Ltd. and Director Chiao is his spouse, they were required to recuse themselves due to a conflict of interest. TienShang Chang, the designated independent director, served as the acting chair, and the motion was approved without objections from the attending directors.
(7) On the same day, January 22, 2024, the board discussed the performance evaluation and year-end bonuses for managers for the year 2023. Chairman Ma, serving as both CEO and General Manager, and Director Chiao, his spouse, recused themselves from the discussion. TienShang Chang, the designated independent director, served as acting chair, and the motion was passed without objections from the attending directors.
(8) On February 27, 2024, the board discussed the ongoing acquisition of ordinary shares in HannStar Display Corporation. As Director Chiao serves as Chairman of HannStar and Chairman Ma is his spouse and also a director at HannStar, they had to recuse themselves due to a legal conflict of interest. TienShang Chang was appointed by the chair as the acting chair, and after consulting with the present directors, the motion was approved without objections.
III. Enhancements to the functionality of board of directors in the current and most recent year, and progress of such enhancements:
(1) The Company assembled an Audit Committee on June 3, 2015 in an attempt to improve corporate governance and board function. The committee convenes meetings at least once per quarter, and operates primarily to oversee the following matters:
1. Fair presentation of the Company's financial statements.
2. Appointment and dismissal of financial statement auditors, and evaluation of their independence and performance.
3. Implementation of the Company's internal control system.
4. The Company's compliance with relevant regulations and rules.
5. Control over the Company's existing or potential risks.
(2) The Company has “Director and Manager Ethics Guidelines”, “Procedures for Director Salary and Remuneration Determination and Director Performance Assessment”, “Manager Compensation Policy” and

“Corporate Governance Best Practice Principles” in place to enhance board functions.

(3) Aside from Audit Committee, the Company also has a Remuneration Committee available to assist the board of directors with compensation management. Please refer to the Corporate Governance chapter of this annual report for performance information of the committee.
(4) The Company encourages the Board members to take part in continuing education as a way to develop professional knowledge and legal awareness, and thereby improve corporate governance practices. The Company also provides directors and supervisors with timely updates on training courses and regulatory amendments.

In 2023, as of the publication date of annual report, the attendance of Independent Directors is as follows:

 In person ◎By proxy ＊ On leave

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2023 2024
Name/Date February May 2, July 31, October 31, December January 22, February
20, 2023 2023 2023 2023 21, 2023 2024 27, 2024
TienShang Chang       
TingWong Cheng       
JinFu Chang       
TsungHan Tsai N/A N/A     
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Note: Independent Director TsungHan Tsai was inaugurated after co-election at the annual general shareholders' meeting on May 29, 2023.

2023 performance evaluations of the Board of Directors and the functional committees:

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Execution status of performance evaluations of the Board of Directors and the functional committees
 Self-assessment: is performed once a year, including the Board of Directors self-assessment, the
Functional Committee self-assessment, and the self-assessment among the Board members, and
Evaluation
peer assessment
Cycle
 External assessment: shall be performed once every three years by an external independent
professional institution or a group of external experts and scholars.
Evaluated
From January 1, 2023 to December 31, 2023
period
Scope of
Performance assessment of Board members, Board of Directors and functional committees
evaluation
 Self-assessment (Board members, Board of Directors and Functional Committees)
Evaluation  External evaluation (the evaluation was entrusted to the Taiwan Corporate Governance
method Association)
 2023 assessment results were reported to the Board of Directors on February 27, 2024.
 Highlights of evaluation:
I. Board members:
Keeping track of the Company’s goals and missions, awareness of the duties of directors,
involvement in the Company’s operation, internal relations management and communication,
professional and continuing education for directors, internal control, other items.
II. Board of Directors and functional committees (Remuneration Committee, Audit Committee,
and Technology Committee)
Involvement in the Company’s operation, awareness of duties, improvement of decision-making
quality, composition and structure, election and continuing education, internal control, other
Self-
items.
assessment
 Assessment results:
Content and
results In accordance with the “Procedures for Director Salary and Remuneration Determination and
Director Performance Assessment”, the Company shall review the policy, system and standard of
Director performance assessment by referring to the principles of corporate governance.
The Company's 2023 Board of Directors performance evaluation results were presented in
accordance with the above measures in a 5-bracket format.
Description of each bracket: 1 very poor (strongly disagree); 2 poor (disagree); 3 medium
(common); 4 good (agree); 5 excellent (strongly agree).
All assessment results fell between the 4.74 and 5.0 bracket. In 2024, the Company will continue
to strengthen based on the evaluation results of the Board of Directors in 2023 to improve the
effectiveness of corporate governance.
External  Highlights of evaluation:
evaluation The Board Performance Evaluation Panel of our association is composed of independent and
experienced executive members and specialists. Guided by the spirit of eight key aspects, the
Content and
panel reviews open-ended questionnaires filled out by your company, various provided
results
documents (such as minutes from board and functional committee meetings during the evaluation
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Execution status of performance evaluations of the Board of Directors and the functional committees

period), and publicly available information, and conducts onsite interviews with relevant members.

After examining the documents, conducting onsite interviews, and observing interactions, the evaluation panel compiles and presents a comprehensive review and recommendations for internal use by your company. These findings are intended to assist in future planning, establishment, and enhancement of the board's functions.

Key points and overall observations on the eight aspects include: 1. Composition of the Board, 2. Guidance provided by the Board, 3. Powers delegated by the Board, 4. Supervision by the Board, 5. Communication within the Board, 6. Internal control and risk management, 7. Self-regulation of the Board, 8. Other aspects such as board meetings and support systems.
Overall observations from the site visits:

Assessment results: 1. The board has been focused on sustainability issues, producing sustainability reports since 2017 and obtaining AFNOR certification to implement the concept of sustainable corporate governance.

The board places high importance on the transparency of information, as evidenced by the disclosure of individual director compensation in the annual report, demonstrating a proactive and responsible approach to shareholders and stakeholders.
Independent directors are actively engaged and fulfill their duties diligently. The Audit Committee regularly communicates with external CPAs independently, including the audit and review of the Company's financial statements, the annual audit plan and key audit matters, taxation or laws and regulations, etc. The Audit Committee regularly communicates directly with the head of internal audit to discuss the execution of audit activities.
From 2019 to 2022, the company's ranking in corporate governance evaluations has progressively improved; the company has proactively engaged a third-party professional independent entity to perform the Board performance evaluation, aiming to gain objective insights from an external perspective, which reflects the company’s ambition to actively implement good governance and strengthen the effectiveness of the Board.

Suggestions: 1. It is recommended that the company establish an orientation system for new directors, coordinated by the corporate governance officer, to enable new directors to quickly grasp the current operational status and industry information, facilitating their ability to fulfill their directorial duties.

It is also advised that the company establish a reporting channel that independent directors (or the Audit Committee) can access directly to further strengthen the whistleblower mechanism.
The company might consider integrating ESG implementation into the performance indicators (KPIs) of management and linking it with compensation to promote the implementation of sustainable development policies.
Currently, the company has not established a procedure for notifying significant incidental events. It is recommended that the company create a notification system for such events, specifying the type of information to be reported, reporting deadlines, and methods of reporting. This will enable board members (especially independent directors) to immediately access critical information and fulfill their responsibilities.

(II) Involvement of Audit Committee members or supervisors in board of directors’ meetings:
(1) Functionality of the Audit Committee:

A total of 7 Audit Committee meetings (A) were held in 2023; independent directors' attendance records are summarized below:

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In-person Number of In-person
Title Name attendance proxy attendance rate Remarks
times (B) attendance (%)(B/A)
TienShang
Convener 7 0 100%
Chang
Committee TingWong
7 0 100%
member Cheng
Committee
JinFu Chang 7 0 100%
member
Committee Newly elected on
TsungHan Tsai 5 0 100%
member May 29, 2023
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Duties of the Audit Committee:
Defining or revision of the internal control system in compliance with Article 14-1 of the Securities and Exchange Act.
Evaluation of the effectiveness of the internal control system 3. Revision or amendment of the procedures for acquiring or disposing of assets, lending funds, and endorsements/guarantees as required by Article 36-1 of the Securities and Exchange Act
Matters involving the interests of the Board directors 5. Transaction of major assets or lending of funds, and endorsements/guarantees 6. Raising, release, or private placement of equity securities
Evaluation of the assignment, dismissal, compensation, and independence and suitability of certified public accountants
Appointment or dismissal of the heads of finance, accounting, or internal audit 9. Annual Financial Statements signed or sealed by the Chairperson, managers, and head of accounting
Other important matters as specified by the Company or the competent authority
Highlights of Tasks throughout the Year: 1. Review the quarterly financial statements. 2. Assess the effectiveness of the internal control system and review the amendments to internal control system.
1. Review major asset transactions and funds lending. 4. Review public offering or issuance of securities. 5. Oversee legal compliance. 6. Oversee transactions of employees, managers, and directors with related parties, and any potential conflicts of interest.
1. Devise fraud prevention plan and prepare fraud investigation report. 8. Review the qualification, independence and performance of independent auditors. 9. Review the engagement, discharge or fees of independent auditors. 10. Review the appointment or discharge of the heads of finance, accounting, or internal audit. 11. Review the internal self-assessment and external assessment questionnaires pertaining to the performance of the Audit Committee.
1. Maintain regular communication with head of internal audit and independent auditors.

Other matters and implementation status:
I. In event that one of the following circumstances pertaining to the operation of Audit Committee is present, the date(s) and session of meeting(s) convened by the Audit Committee, content of resolutions, objection or reservation or content of major recommendation of Independent Director(s), resolution results of Audit Committee meeting and response of the Company toward the opinions of the Audit Committee shall be described.
(1) Conditions described in the Securities and Exchange Act, Article 14-5:

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Opinions of
independent
directors
Term Decisions Made
Resolution Result
Handling of
Opinions
1. 2022 Business Report and Financial Statements
2. The Company’s 2022 earnings distribution table
3. Statement of Internal Control based on findings of 2022
internal control self assessment
4. Proposal for amendments to the “Internal Control System”
and “Regulations for Internal Audit Implementation”.
5. Intended revision of some of the articles in the Internal
Control System regarding “criteria and regulations of the
internal control system of the service unit”
6. Proposal to revise some of the articles in the Internal Control
System regarding “Procedures for Audit Work for Internal
Control Purpose”.
February 20,
7. Intended capital increase in cash for issuance of common
2023
stock through private placement or public offering or the
The 9th meeting
combination of the two
of the Third
8. Proposal to lend capital to Glorystone Inc.
Audit Committee No objection
9. 2023 CPA assignment and independence assessment
from Independent
10. Proposal to give pre-approval to the non-assurance services
Directors. The
provided by attesting CPAs, their accounting firm, and the
resolution was
firm’s affiliates to the Company and its subsidiaries.
passed and
11. Proposal for continuing to acquire common stock of
submitted to the
HannStar Display Corporation
Board of
12. Proposal to allow the Company to retire the common shares
Directors for
which were repurchased for the first time in 2022 but not
resolution.
transferred to employees.
13. Proposal to carry out the first instance of repurchase of the
Company’s common shares in 2023.
14. Proposal on the amendments to the Articles of Incorporation
1. The Company's financial statement for the first quarter of
May 1, 2023
2023
The 10th meeting
2. Intended revision of some of the articles in the Internal
of the Third
Control System regarding “criteria and regulations of the
Audit Committee
internal control system of the service unit”
1. The Company's financial statement for Q2 2023
July 31, 2023 2. Appropriation of the Company's profit or loss for the first
The 11th meeting half of 2023
of the Third 3. Proposal to transfer the common shares repurchased for the
Audit Committee first time in 2023 by the Company to employees.
4. Appointment of the head of audit
October 31, 2023 1. Proposal on 2024 internal audit plan
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The 12th meeting 2. The Company's financial statement for the third quarter of
of the Third 2023
Audit Committee 3. Proposal to allow the Company to retire the common shares
which were repurchased for the first time in 2023 but not
transferred to employees.
4. Appointment of the head of finance
5. Appointment of the head of accounting
December 21, 1. Proposal to developed the 2024 budget under the 2023
2023 business plan
The 13th meeting
of the Third
Audit Committee
1. Subsidiary GUANGDONG SHEKEL TECHNOLOGY CO.,
January 22, 2024
LTD. Handling of Purchase and Sales Cases: Action Plan for
The 14th meeting
Addressing Deficiencies Identified During Audit
of the Third
2. Real estate renovation of the south wall of the Company's
Audit Committee
Nanke Factory
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The 12th meeting of the Third Audit Committee 2. The Company's financial statement for the third quarter of 2023 3. Proposal to allow the Company to retire the common shares which were repurchased for the first time in 2023 but not transferred to employees. 4. Appointment of the head of finance 5. Appointment of the head of accounting
December 21, 2023 The 13th meeting of the Third AuditCommittee 1. Proposal to developed the 2024 budget under the 2023 business plan
January 22, 2024 The 14th meeting of the Third Audit Committee 1. Subsidiary GUANGDONG SHEKEL TECHNOLOGY CO., LTD. Handling of Purchase and Sales Cases: Action Plan for Addressing Deficiencies Identified During Audit 2. Real estate renovation of the south wall of the Company's Nanke Factory
3. 2023 Business Report and Financial Statements
4. Table on 2023 Profit Distribution and Loss Compensation of
the Company.
5. 2024 CPA assignment and independence assessment
February 27, 6. The Company's internal control statement - 2023
2024 7. Proposal to amend the Company's “Internal Control System”
The 15th meeting 8. Proposal of the Company to carry out a cash capital increase
of the Third by issuing common shares through private placement, public
Audit Committee offering, or a combination of both.
9. Proposal for continuing to acquire common stock of
HannStar Display Corporation
10. Amendments to the Company's “Regulations Governing the
Acquisition and Disposal of Assets”
(2) Other than those described above, any resolutions unapproved by the Audit Committee but passed by
more than two-thirds of directors: Nil.
II. Avoidance of conflicting-interest motions by independent directors: Nil.
III. Communication between independent directors and internal/external auditors:
(I). Communication between independent directors and internal/external auditors
1. The Company not only has an internal audit team that presents audit reports and audit findings
tracking reports to independent directors on a monthly basis, the chief internal auditor also
updates independent directors on the audit tasks performed, the findings discovered, and follow-
up actions during Audit Committee meetings, which are convened at least once per quarter.
2. Financial statement auditors report to independent directors during quarterly Audit Committee
meetings on various issues, including: review/audit findings on quarterly financial statements	of
the Company and subsidiaries, internal audit results, IFRSs amendments and their effects, and
other matters required by law. The auditors also communicate with independent directors on the
use of adjusting entries and whether changes in law would affect the ways accounts are presented.
3. The chief internal auditor, CPA, and independent directors are able to contact each other directly
at any time using open communication channels.
(II) Summary of previous communications between independent directors and internal auditors
Independent Directors' opinions on audit execution and performance: Issues were adequately
communicated; the following is a summary of key issues communicated for 2023 as of the
publication date of the annual report:
Date Highlights of the meeting/communication Advice and Results

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The 9th meeting of the Third Audit Committee
1. Internal Audit Implementation Report for the period between
December 2022 - January 2023.
2. Statement of Internal Control based on findings of 2022
internal control self assessment
3. Proposal for amendments to the “Internal Control System” and
February 20,
“Regulations for Internal Audit Implementation”.
2023
4. Intended revision of some of the articles in the Internal Control
System regarding “criteria and regulations of the internal
control system of the service unit”
5. Proposal to revise some of the articles in the Internal Control
System regarding “Procedures for Audit Work for Internal
Control Purpose”.
10th meeting of the 3rd Audit Committee
1. Internal Audit Implementation Report for the period between
February 2023 - April 2023. No objections.
2. Improvement Progress and Tracking Report for Deficiencies
May 2, 2023
Found during the Audit. Approved by
3. Intended revision of some of the articles in the Internal Control the Audit
System regarding “criteria and regulations of the internal Committee and
control system of the service unit” submitted to the
11th meeting of the 3rd Audit Committee Board of
1. Internal Audit Implementation Report for the period between Directors for a
July 31,
May 2023 - June 2023. decision and
2023
2. Improvement Progress and Tracking Report for Deficiencies approval and
Found during the Audit. was announced
12th meeting of the 3rd Audit Committee and declared as
1. Internal Audit Implementation Report for the period between scheduled.
October 31, July 2023 to September 2023.
2023 2. Improvement Progress and Tracking Report for Deficiencies
Found during the Audit.
3. Proposal on 2023 internal audit plan
14th meeting of the 3rd term of Audit Committee
1. Internal audit project audit report: Audit of the purchasing and
January 22,
payment cycle at the subsidiary, Guangdong Shekel
2024
Technology Co., Ltd., from December 15, 2023 to December
28, 2023.
15th meeting of the 3rd term of Audit Committee
1. Internal Audit Implementation Report for the period between
February 27, December 2023 - January 2024.
2024 2. Statement of Internal Control based on findings of 2023
internal control self assessment
3. Proposal to amend the Company's “Internal Control System”
(III). Summary of previous communications between independent directors and financial statement
auditors
Independent Directors had made progressive communication with the financial statement
auditors; the following is a summary of key issues communicated for 2023 as of the publication
date of the annual report:
Management of
Date Highlights of the meeting/communication implementation
results
Audit Committee Submitted to the
Discussed and communicated about the audit findings of the Board of
February 20,
Consolidated and Individual Financial Statements and the Internal Directors after
2023
Audit Report of 2022 as well as applicability of some accounting review and
principles and impacts of newly revised laws and regulations. approval
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	May 2, 2023	Audit Committee Discussed and communicated about the review findings of the Consolidated Financial Statement and the Internal Audit Report for 2023Q1 as well as the impacts of some newly revised laws and regulations.
	July 31, 2023	Audit Committee Discussed and communicated about the approval findings of the Consolidated Financial Statement and the Internal Audit Report for 2023Q2 as well as applicability of some accounting principles and impacts of newlyrevised laws and regulations.
	October 31, 2023	Audit Committee Discussed and communicated about the approval findings of the Consolidated Financial Statement and the Internal Audit Report for 2023Q3 as well as applicability of some accounting principles and impacts of newlyrevised laws and regulations.
	January 22, 2024	Audit Committee Audit of the purchasing and payment cycle at the subsidiary, Guangdong Shekel Technology Co., Ltd. from December 15, 2023 to December 28,2023.
	February 27, 2024	Audit Committee Discussed and communicated about the audit findings of the Consolidated and Individual Financial Statements and the Internal Audit Report of 2023 as well as applicability of some accounting principles and impacts of newlyrevised laws and regulations.

Note: The in-person attendance rate is calculated based on the number of Audit Committee meetings held and the number of in-person attendances made during active duty.

(2) Supervisors' involvement in board of directors’ meetings: The Company does not have supervisors, hence not applicable.

(III) Deviation and causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed

Companies:

Companies:
			Actualgovernance Deviation and
Assessment criteria	Yes No		causes of deviation from Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies Summary
I. Has the Company established and disclosed its corporate governance principles based on “Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies”?			The Company has established procedures for corporate governance practices based on “Corporate Governance Best-Practice Principles for TWSE/TPEX Listed Companies”. No material deviation is found
II. Shareholding structure and shareholders' interests (I) Has the Company implemented a set of internal procedures to handle shareholders' suggestions, queries, disputes and litigations? (II) Is the Company constantly informed of the identities of its major shareholders and the ultimate controller? (III) Has the Company established and implemented risk management practices and firewalls for companies it is affiliated with? (IV) Has the Company established internal policies that prevent insiders from trading securities against non-public information?	  		(I) The Company has a Share Service Department that handles shareholders' recommendations, queries, and disputes in accordance with “Regulations Governing the Administration of Shareholder Services of Public Companies” and Internal Control System, Standards, and Rules for Share Service Department. (II) The Company discloses the identities of its major shareholders and the ultimate controller in a manner that complies with laws. (III) Management responsibility and authority between the Company and affiliated enterprises are clearly distinguished; dealings between affiliated enterprises are carried out in compliance with the Internal Control System and relevant rules. (IV) The Company has “Regulations for Processing Material Inside Information and Preventing Insider Trading” in place to serve as guidance for compliance. Any amendments are disclosed internally, and the procedures have been published on the Company's Documents Center and made accessible to employees. Prior to executing treasury shares the Company electronically disseminated such information at each quarterly Board of Directors meeting dated January 18, 2023, April 13, July 11, October 12, January 25, 2024, and August 1, 2022,and February20,2023.	No material deviation is found

III. Composition and responsibilities of the board of directors (I) Has the board devised and implemented  (I) Board diversity has been essential to the No material policies, concrete management goals to Company as it improves board performance deviation is ensure diversity of its members? and ensures sustainable growth. Members of found the board are chosen using objective standards that emphasize solely on candidates' skills and capacity without limitation on gender, age, culture, education, ethnicity, religion, or philosophical belief. Diversity of the current (Ninth) Board of Directors: Non-employee Directors accounted for 87.5% of the Board, whilst female Directors accounted for 12.5% of the Board. The Company has 4 Independent Directors, representing 50% of the Board. All Independent Directors have served less than three terms on the Board. For the Board diversity policy, concrete management goals, and implementation status, please see p.19 of this annual report. (II) Apart from the Remuneration Committee  (II) To strengthen and accelerate the sustainable and Audit Committee, has the Company development growth of the Company and the assembled other functional committees group, as well as to bolster the operation and at its own discretion? decision making efficiency, on November 5, 2021, the Board established the Technology Committee. On December 28, 2021, the first Technology Committee convened the first meeting. Up until 2022, the committee has met three times in total. The committee currently consists of two independent directors and the general manager. Its duties comprise assisting Directors in implementing and evaluating company technology, and overseeing the execution of relevant operational strategies, including but not limiting to major technology investment, technology strategy that potentially affecting investment combination, operational performance and technological trend. In addition, 6 outside experts and academics were asked to join in the discussion and offer their advice on June 28, 2022.

(III) Has the Company established standards  and method for evaluating the performance of the Board of Directors, and does the Company implement the performance evaluation periodically and submit results of the performance

(III) The Company has formulated the “Procedures for Director Salary and Remuneration Determination and Director Performance Assessment” and the external and internal performance assessment of the Board of Directors was completed in early February

evaluation to the Board of Directors, and use them for reference while deciding compensation and rewards for individual directors and nominating them for a second term in office??

(IV) Are external auditors' independence  assessed on a regular basis?

2024 (for the evaluation findings, refer to page 28 of this Annual Report) and submitted the same to the Board of Directors on February 27, 2024. For remuneration appropriation and consideration for nomination of re-election, the Company has taken into account the performance assessment results of the Board. (IV) The Company assesses the independence and competency of its financial statement auditors once a year. Indicators such as: existence of financial stake/business interest between the accounting firm and the Company, term and competency of the financial statement auditors, audit team members' shareholding interest in the Company, and existence of borrowing/lending relationship are taken into consideration during assessment. Furthermore, the Company further factors in the performance of the CPA firm in terms of audit quality indicators (AQIs), including professionalism, quality control, independence, and the CPA firm’s quality control, supervision, and innovation capabilities. Meanwhile, the CPAs have complied with CPA code of ethics of the Republic of China, maintained independence from the Company, and issued their declaration of independence.

The 2023 evaluation result was passed in the Audit Committee meeting held on February 27, 2024 and reported to the board of director on the same date, during which the board reached the conclusion that: CPA ChingChang Chen and CPA Fu-Ming Liao of PwC Taiwan were found to have met the independence requirements to serve as the Company's financial statement auditors.

IV. Has the TWSE/TPEX listed company allocated adequate number of competent corporate governance staff and appointed a corporate governance officer to oversee corporate governance affairs (including but not limited to providing directors/supervisors with the  information needed to perform their duties, assisting directors/supervisors with compliance issues, convention of board meetings and shareholder meetings, and preparation of board/shareholder meeting minutes)?

The Company has established a designated (concurrent) corporate governance unit, with one No material supervisor and one concurrent personnel to take deviation is charge of matters pertinent to corporate governance. found The establishment is undertaken in accordance with the relevant law and regulations. Please refer to page 39 of the annual report.

V. Has the Company provided proper communication channels and created dedicated sections on its website to address corporate social responsibility issues that are of significant concern to stakeholders (including but not limited to shareholders, employees, customers and suppliers)? 	V. Has the Company provided proper communication channels and created dedicated sections on its website to address corporate social responsibility issues that are of significant concern to stakeholders (including but not limited to shareholders, employees, customers and suppliers)? 	The Company maintains open communication channel with stakeholders including suppliers, customers, employees, and investors. The Company also has a stakeholder section created on its website, with contact information disclosed to serve as communication channel with the Company. No material deviation is found	The Company maintains open communication channel with stakeholders including suppliers, customers, employees, and investors. The Company also has a stakeholder section created on its website, with contact information disclosed to serve as communication channel with the Company. No material deviation is found
VI. Does the Company engage a share service agency to handle shareholder meetingaffairs? 		The Company handles its own stock affairs in a way that resembles the service quality provided by a professional stock agent. No material deviation is found
VII. Information disclosure (I) Has the Company established a website that discloses financial, business, and corporate governance-related information? (II) Has the Company adopted other means to disclose information (e.g. English website, assignment of dedicated personnel to collect and disclose corporate information, implementation of a spokesperson system, and broadcasting of investor conferences via the Company website)? (III) Does the Company publish and make official filing of annual financial report within two months after the end of an accounting period, and publish/file Q1, Q2 and Q3 financial reports along with monthly business performance before the required due dates?   		(I) The Company has an investor section created on its website (www.hannstouch.com) to disclose financial, business, and corporate governance information. (II) The Company maintains an English website, assigns dedicated personnel to collect and disclose relevant information, and enforces a spokesperson system. Details of any investor conference held are also disclosed on the Company's website and on “Market Observation Post System.” (III) Starting from 2022, the Company publishes and makes official filing of its annual financial statements within two months after the end of an accounting period, and submits quarterly financial statements to the Audit Committee and Board of Directors for approval at least one week before the mandatorily specified date. The Company also discloses its financial statements on the Market Observation Post System. The Company also fully discloses its monthly operating performance on its website and the Market Observation Post System within the mandatorilyspecified time frame. No material deviation is found
VIII. Does the Company have other information that enables a better understanding of the Company's corporate governance practices (including but not limited to employee rights, employee care, investor relations, supplier relations, stakeholders' interests, continuing education of directors/supervisors, implementation of risk management policies and risk measurements, implementation of customerpolicy,and		(1) Employee rights and employee care: The Company values and enforces employees' rights. In addition to providing mandatory benefits such as group insurance and pension fund contributions, the Company also arranges annual employee health checkups and maintains open communication channels to create a harmonic work environment that supports various work activities. (2) Investor relations: The Company has an investor section created on its website to disclose financial and business-related	No material deviation is found

liability insurance for directors and information. supervisors)? (3) Supplier relations and stakeholders' interest: The Company maintains productive relationship with suppliers and stakeholders, and engages them in financial and business dealings out of fairness to the best interest of both parties.
(4) Purchase of director liability insurance: The Company has purchased liability insurance for directors, managers, and key staff for the protection of shareholders' interest.
(5) Execution of customer policy: The Company respects and protects customers' technologies, documents, and information, and has measures in place to ensure confidentiality of customers' information.
(6) As a principle, directors of the Company attend board meetings in-person except under special circumstances.
(7) The Company has an environmental safety unit that supports government agencies and the industrial park administration in promoting proper awareness, and executing tasks relating to public safety, environmental protection, and beautification in the local area.
(8) The Company has implemented a set of customer complaint procedures to help identify issues and areas of responsibility. Customers' claims are responded quickly and proactively with effective measures, and followed up with preventive and improvement actions where appropriate. Senior managers would visit customers personally to communicate on issues concerning production capacity, yield, delivery etc., and aim toward zero customer complaints.
(9) For details on Directors’ continuing education, please see page 37 of the annual report.
(10) For the risk management policy, please see page 107 of the annual report.

IX. Please explain the improvements made, based on the latest Corporate Governance Evaluation results published by TWSE Corporate Governance Center, and propose enhancement measures for any issues that are yet to be rectified. As of the publication of the annual report, the 10th corporate governance assessment results have not been published. Therefore, items with higher score in the 9th company-wide scoring and the continuous improvement measures undertaken by the Company are summarized as follows:

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Company-
Quest
wide
ion Indicator Improvements
score/perce
No.
ntage
Yes, it is published,
but since it was not
Does the company report the compensation received by directors at the
reported as a separate
1.1 annual shareholders' meeting, including the compensation policy, individual 5%
case, no points were
compensation details, and amounts?
awarded. Improved in
2024
An additional
Are the Chairperson and the general manager, or the equivalent position independent director
2.3 holder (the highest management position) the same person or spouses, or 54% was elected in the
first-degree relatives? 2023 shareholders'
meeting.
Does the company formulate succession planning for board members and
2.9 key management personnel, and disclose its operation on the company's 45% Under development
website or in the annual report?
3.12 Is the dividend policy disclosed in the annual reports? 70% Improved in 2022
Has the Sustainability Report prepared by the Company been verified by a
4.5 26% Improved in 2023
third party?
Does the Company follow the framework of the Climate-related Financial
Disclosures (TCFD) to disclose information about corporate governance,
4.18 22% Improved in 2023
strategies, risk management, indicators and goals for climate-related risks
and opportunities?
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Attached Table 1: Directors' continuing education in the last 2 years:

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Total
hours
Course
Title Name Course date Organizer Course name trained
hours
during
the year
Global Political and Economic Trends and
WeiHsin Taiwan Corporate Governance
May 5, 2023 Prospects - Competition between China and 3
Ma Association
the US and Cross-Strait Relations 6.00
WeiHsin November 15, Taiwan Stock Exchange Legal Compliance Seminar on Insider Stock
3
Ma 2023 Corporation Transactions for 2023
WeiHsin July 27, 2022 [Taiwan Stock Exchange ] Sustainable Development Roadmap Topic- 2
Ma Corporation specific Awareness Session for Industries
Director WeiHsin May 12, 2022 [Taiwan Stock Exchange ] Twin-Summit Forum Online Session 2
Ma Corporation
WeiHsin September 2, Taiwan Corporate Governance From Deep Learning to practical AI
3 10.00
Ma 2022 Association application
China’s Political and Economic
WeiHsin October 25, Taiwan Corporate Governance Development after the 20th National
3
Ma 2022 Association Congress and Cross-Strait Peace and War
Indicators Observation
YuChi October 30, Taiwan Corporate Governance New Sustainability Trends and Board
Director 3 18.00
Chiao 2023 Association Governance
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----- Start of picture text -----

Total
hours
Course
Title Name Course date Organizer Course name trained
hours
during
the year
YuChi October 30, Taiwan Corporate Governance
ESG Practice Analysis 3
Chiao 2023 Association
YuChi September 4, Financial Supervisory
14th Taipei Corporate Governance Forum 6
Chiao 2023 Commission
Corporate Governance - ESG Sustainability
YuChi June 17, 2023 [Taipei Foundation of Financial ] Project Workshop - Supply Chain 6
Chiao Research
Engagement
China’s Political and Economic
YuChi October 25, Taiwan Corporate Governance Development after the 20th National
3
Chiao 2022 Association Congress and Cross-Strait Peace and War
6.00
Indicators Observation
YuChi October 5, Taiwan Corporate Governance The Only Route to Corporate Sustainable
3
Chiao 2022 Association Operations - External Innovation
TsuKang April 28, 2023 [Taiwan Corporate Governance ] Board Members' Practical Response to the 3
Yu Association Wave of Information Technology
Discussions on Global Tax Reform and
TsuKang May 12, 2023 [Taiwan Corporate Governance ] Corporate Tax Governance in Light of ESG 3
Yu Association
Trends and the Pandemic 12.00
TsuKang June 30, 2023 [Taiwan Corporate Governance ] Global Future Risks and Opportunities for 3
Yu Association Sustainable Transformation
Director TsuKang July 21, 2023 [Taiwan Corporate Governance ] How Startups Can Plan Shareholding and 3
Yu Association Organizational Structure Design
TsuKang Taiwan Stock Exchange Sustainable Development Roadmap Industry
July 7, 2022 2
Yu Corporation Conference _Iron and steel industry topics
Accounting Research and
TsuKang ESG Information Disclosure Trends and
July 15, 2022 Development Foundation of the 3 8.00
Yu Related Regulations
R.O.C.
TsuKang November 15, Taiwan Corporate Governance Analyzing Management Right Struggles and
3
Yu 2022 Association Protective Measures
ChihChung November 6, Technical Development and Application
Securities and Futures Institute 1.5
Chou 2023 Opportunities of ChatGPT
ChihChung November 6,
Securities and Futures Institute Responding to new trends in the world 1.5
Chou 2023
Directors' and senior management's
ChihChung November 6,
Securities and Futures Institute knowledge of supervision by the competent 3
Chou 2023
authorities
Cultural Integration and Social Innovation in
ChihChung October 26, Taiwan Corporate Governance Contemporary Architecture; Development
3
Director Chou 2023 Association and Implications of the International Carbon 28.50
Border Adjustment Mechanism
The Rise of Southeast Asia and the
ChihChung October 26, Taiwan Corporate Governance Changing Indo-Pacific: Geopolitical Risks,
1.5
Chou 2023 Association Regional Economic Resilience, and the
Struggle of Various Strategic Policies
ChihChung September 4, Financial Supervisory
14th Taipei Corporate Governance Forum 6
Chou 2023 Commission
ChihChung July 13, 2023 [Taiwan Corporate Governance ] Utilizing Policy Resources with Diverse 3
Chou Association Strategies and Connecting with Local
----- End of picture text -----

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Total
hours
Course
Title Name Course date Organizer Course name trained
hours
during
the year
Communities in Taiwan to Achieve
Corporate CSR Objectives; Development
and Challenges of International Net-Zero
Technologies
(2050 Carbon Neutrality) Starting from the
2007 “Hsinchu Baoshan Native Plant
ChihChung July 13, 2023 [Taiwan Corporate Governance ] Conservation and Environmental Education 3
Chou Association Park” Project; Geopolitical and Financial
Outlook under Global Multipolar
Development
Global Political and Economic Trends and
ChihChung Taiwan Corporate Governance
May 5, 2023 Prospects - Competition between China and 3
Chou Association
the US and Cross-Strait Relations
Lessons Learned in Amazon; AI in Smart
ChihChung February 23, Taiwan Corporate Governance
Operations Management and Its 3
Chou 2023 Association
Applications
Examining Worldwide Political-economical
Landscape in 2023; Resolutions for
ChihChung December 27, Taiwan Corporate Governance
Companies to Progress towards Net Zero: 4
Chou 2022 Association
Natural Carbon Sinks and Carbon Credits
Trading
China’s Political and Economic
ChihChung October 25, Taiwan Corporate Governance Development after the 20th National
3
Chou 2022 Association Congress and Cross-Strait Peace and War
Indicators Observation
15.00
Investigating the Board of Directors' Role in
ChihChung October 7, Thwarting Corporate Fraud & Compliance
Securities and Futures Institute 3
Chou 2022 with the Cyber Security Management Act
under the Threat from Ransomware
ChihChung October 6, Global Risk Perception - Opportunities and
Securities and Futures Institute 3
Chou 2022 Challenges in the Next Decade
The Effects of Climate Change and
ChihChung September 16, Taiwan Corporate Governance
International Carbon Risk Management 3
Chou 2022 Association
Developments
TienShang August 10, Taiwan Corporate Governance Legal Issues Related to ESG that the Board
3
Chang 2023 Association Should Consider
6.00
TienShang April 13, 2023 [Taiwan Academy of Banking ] Corporate Governance Lecture 3
Chang and Finance
Independent China’s Political and Economic
Director TienShang October 25, Taiwan Corporate Governance Development after the 20th National
3
Chang 2022 Association Congress and Cross-Strait Peace and War
6.00
Indicators Observation
TienShang June 22, 2022 [Taiwan Academy of Banking ] Corporate Governance and Sustainable 3
Chang and Finance Management Workshop
TingWong August 12, Taiwan Corporate Governance Practical Operations of the Audit Committee
3
Independent Cheng 2023 Association and Remuneration Committee
12.00
Director TingWong November 19, Taiwan Corporate Governance Corporate Governance and Securities
3
Cheng 2023 Association Regulations
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Total
hours
Course
Title Name Course date Organizer Course name trained
hours
during
the year
TingWong June 15, 2023 [Taiwan Corporate Governance ] Prevention and Response Strategies for 3
Cheng Association Insider Trading
Global Political and Economic Trends and
TingWong Taiwan Corporate Governance
May 5, 2023 Prospects - Competition between China and 3
Cheng Association
the US and Cross-Strait Relations
TingWong July 19, 2022 [Taiwan Academy of Banking ] Corporate Sustainable Development and 3
Cheng and Finance Disclosure of Non-Financial Information
TingWong August 30, Taiwan Academy of Banking Evaluation of Financial Reports of Difficult
3
Cheng 2022 and Finance Businesses and Business Diagnostics
9.00
China’s Political and Economic
TingWong October 25, Taiwan Corporate Governance Development after the 20th National
3
Cheng 2022 Association Congress and Cross-Strait Peace and War
Indicators Observation
JinFu May 19, 2023 [Taiwan Corporate Governance ] Protection of Trade Secrets and Non- 3
Chang Association Compete Agreements
6.00
JinFu October 27, Taiwan Corporate Governance
Family Charter and Family Office 3
Chang 2023 Association
JinFu September 16, Taiwan Corporate Governance Forum on Misleading Financial Statements
3
Independent Chang 2022 Association and Directors' Accountability
Director JinFu The 2022 Annual Awareness Session to
June 10, 2022 Securities and Futures Institute 3
Chang Advance the Prevention of Insider Trading
9.00
China’s Political and Economic
JinFu October 25, Taiwan Corporate Governance Development after the 20th National
3
Chang 2022 Association Congress and Cross-Strait Peace and War
Indicators Observation
Practical Analysis of the Latest “Sustainable
Accounting Research and
TsungHan December 27, Development Action Plan” and the Impact
Development Foundation of the 6
Tsai 2023 of Net Zero Carbon Emission on Financial
R.O.C.
Statements
Independent
Linking Carbon to Carbon: Carbon Fees,
Director TsungHan December 22, Taiwan Corporate Governance 12.00
Carbon Taxes, Carbon Rights and Carbon 3
(Note 1) Tsai 2023 Association
Trading
Accounting Research and
TsungHan December 22, Corporate ethics and sustainable
Development Foundation of the 3
Tsai 2023 development
R.O.C.
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Note 1: Independent Director, Mr. TsungHan Tsai, was co-elected on May 29, 2023 and completed 12 hours of continued education in 2023.

Attached Table 2: Duty execution status and continuing education of the chief corporate governance officer

I. Establishment of the position of the chief corporate governance officer : The establishment of the position in the Company was approved by the Board of Directors on May 5, 2021.
II. Appointment of the chief corporate governance officer:

Ms. ShunChen Chiu meets the criterion that “a chief corporate governance officer shall be a qualified, practice-eligible lawyer or CPA or have served in a managerial position for at least 3 years in a securities, financial, or futures related institution or a public company in a unit handling legal affairs, legal compliance, internal auditing, financial affairs, stock affairs, or corporate governance affairs specified in Article 21.” (Term of office: May 5, 2021 ~ February 22, 2022)

Mr. LienHsiang Chiang meets the criterion that “a chief corporate governance officer shall be a qualified, practice-eligible lawyer or CPA or have served in a managerial position for at least 3 years in a securities, financial, or futures related institution or a public company in a unit handling legal affairs, legal compliance, internal auditing, financial affairs, stock affairs, or corporate governance affairs specified in Article 21.” (Term of office: February 22, 2022 ~ August 1, 2022)

Mr. ChengChia Chiang meets the criterion that “a chief corporate governance officer shall be a qualified, practice-eligible lawyer or CPA or have served in a managerial position for at least 3 years in a securities, financial, or futures related institution or a public company in a unit handling legal affairs, legal compliance, internal auditing, financial affairs, stock affairs, or corporate governance affairs specified in Article 21.” (Term of office: August 1, 2022 to April 15, 2023)

Mr. Ying-Jie Chang meets the criterion that “a chief corporate governance officer shall be a qualified, practice-eligible lawyer or CPA or have served in a managerial position for at least 3 years in a securities, financial, or futures related institution or a public company in a unit handling legal affairs, legal compliance, internal auditing, financial affairs, stock affairs, or corporate governance affairs specified in Article 21.” (Term of office: May 2, 2023 to November 30, 2023)

Mr. ChunJie Yeh meets the criterion that “a chief corporate governance officer shall be a qualified, practice-eligible lawyer or CPA or have served in a managerial position for at least 3 years in a securities, financial, or futures related institution or a public company in a unit handling legal affairs, legal compliance, internal auditing, financial affairs, stock affairs, or corporate governance affairs specified in Article 21.” (Term of office: December 21, 2023 to present)

III. Duty execution status:

(1) Undertake the Board matters.
(2) Assist Directors and Independent Directors and general directors in perform their function, provide the required materials and arrange continuing education for them.
(3) Assist in performing the relevant matters pertaining to the procedures of Shareholders’ Meeting.
(4) Assist the Board in legal compliance.

(5) Briefing the Board of Directors on the results of its review of whether the qualifications of independent directors during nomination, election, and term of office comply with legal requirements.
(6) Handling matters relating to any change with respect to directors.
(7) Other matters required by the Company's Articles of Incorporation, the Company's Corporate Governance Best Practice Principles, and the competent authority's corporate governance-related laws and regulations.

IV. Continuing education of head of corporate governance:

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Course
Name Course date Organizer Course name
hours
July 29, Securities and Futures Institute [Value of Cyber Security in Post-Pandemic Era ] 3
2021 and US-China Trade War
July 30, Securities and Futures Institute [Key Technologies and Business Opportunities ] 3
2021 of Quantum Technology
September 1, Financial Supervisory
13th Taipei Corporate Governance Forum 3
2021 Commission
Forum for Directors and Supervisors and Head
of Corporate Governance (Advanced Level):
November
Securities and Futures Institute Influence of the Latest Tax Law Change on 3
18, 2021
Corporates and Corresponding
ShunChen Countermeasures
Chiu Forum for Directors and Supervisors and Head
of Corporate Governance (Advanced Level):
December
Securities and Futures Institute Discussion on Consolidation of Human 3
15, 2021
Resources in the process of Merger and
Acquisition and Other Issues
Forum for Directors and Supervisors and Head
of Corporate Governance (Advanced Level):
December Discussion on Corporate Taxation
Securities and Futures Institute 3
23, 2021 Management and Technological Solution for
Taxation Matters from the Perspective of ESG
Trends and Epidemic Environment
Total number of training hours for 2021 18
LienHsiang
First assumed office on February 22, 2022 and less than one year in office; not applicable. NA
Chiang
Corporate Operating and Discussions on Global Tax Reform and
August 18,
Sustainable Development Corporate Tax Governance in Light of ESG 3
2022
Association Trends and the Pandemic
Corporate Operating and Recent Progressions and Techniques of
September 1,
ChengChia Sustainable Development Avoidance of Money Laundering and 3
2022
Chiang Association Terrorism Financing
September Taiwan Corporate Governance Examination of Digital Investigation of
3
16, 2022 Association Significant Financial Crimes
October 12, Taiwan Stock Exchange 2022 Compliance Seminar on Share Transfers
3
2022 Corporation by Insiders
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Course
Name Course date Organizer Course name
hours
October 13, Taiwan Academy of Banking Legal Risks Collateral to Mergers and
3
2022 and Finance Acquisitions
November Taiwan Corporate Governance Safeguarding Corporate Secrets and Detecting
3
11, 2022 Association and Avoiding Fraudulent Activity
Total number of training hours for 2022 18
Corporate Operating and
July 26, M&A transaction due diligence and financial
Sustainable Development 3
2023 evaluation
Association
Corporate Operating and
August 18, Management Risk Management and
Ying-Jie Sustainable Development 3
2023 Discussion of Independent Director System
Chang Association
September 8, Taiwan Corporate Governance Initiation of succession plan - employee
3
2023 Association remuneration plan and inheritance of equity
October 20, Taiwan Corporate Governance
The distance between climate change and us 3
2023 Association
Total hours of continuing education in 2023 (less than one year in the first appointment) 12
ChunJie Inaugurated on December 21, 2023 and has been in office for less than one year; not
NA
Yeh applicable.
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(IV) Composition, responsibilities, and functionality of the Remuneration Committee:

(1) Information of Remuneration Committee members:

Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies
Convener	TienShan g Chang	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: Director and President of Credit Suisse First Boston Investment Bank (Taiwan), Director of CR Yuanta Fund Management Co.,Ltd, Independent Director of Transtouch Technology Inc., Supervisor of Lytone Enterprise, Inc., Representative of Supervisor of Microtips Technology Inc., Representative of Corporate Chairperson of Fu Burg Industrial Co., Ltd., Supervisor of Broalux Taiwan Ltd. Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises. 1
Committee member	TingWon g Cheng	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in commerce, law, finance, accounting, or corporate operations: Professor, Dean, President, Chair Professor of the Accounting Department of National Chengchi University, Chairman of the Accounting Research and Development Foundation Sustainability Standards Committee (non-profit), Chairman of the CABIAV Organisation, Independent Director of TECO Electric & Machinery Co., Ltd., Independent Director of SuperAlloy Industrial Co., Ltd. 3. Professional expertise or technical personnel with certifications for national examinations required to engage in a profession: First place in 1965 national financial examination. 4. Instructor or higher position in a public or private junior college, college or university department related to the business needs of the company: Professor and chair professor of Department of Accounting, National ChengchiUniversity	Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises.	2

Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies	Criteria Position/Name Professional qualification and experience Independence status Number of positions as independent director in other public companies
Committee member	JinFu Chang	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience in the areas of commerce, law, finance, or accounting, or otherwise necessary for the business of the Company: Chairperson of Institute for Information Industry, President of National Chi Nan University, President of Yuan Ze University, and Acting Chairperson of Industrial Technology Research Institute, Deputy Minister of National Science Council, Independent Director of Taiwan Secom Co., Ltd. and TECO Electric & Machinery Co., Ltd. 3. Instructor or higher position in a public or private junior college, college or university department related to the business needs of the company: Instructor, professor, head and director of Department of Electrical Engineering of National Taiwan University; professor and Vice President for Academic Affairs of National Central University. Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises. 0
Committee member	TsungHa n Tsai	1. Never committed any offences stated in the Company Act, Article 30. 2. Work experience required for business, legal, financial, accounting or corporate operations: Researcher of the Center for Geographic Information Science, RCHSS, Academia Sinica; Professor, Department of Information Engineering, National Central University (August 2016 - January 2021); Vice Chairman of Artificial Intelligence in Medicine and Healthcare (2023/2 to date), Director of the ACLCLP (2022 to date), Researcher of the Center for Geographic Information Science, RCHSS, Academia Sinica (2021/2 to date), Chairman of Taiwan Association for Digital Humanities 3. Lecturer or above in public or private colleges and universities with relevant disciplines required for the Company's business: Professor at the Department of Computer Science and Information Engineering, National CentralUniversity.	Circumstances prescribed in the Securities and Exchange Act, Article 26-3, Paragraphs 3 and 4 not found; Circumstances prescribed in the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies, Article 3 not found; No compensation has been received in the most recent two years for providing commercial, law, finance, or accounting and other services to the Company or other affiliated enterprises.	0

(2) Functionality of the Remuneration Committee:
The Company's Remuneration Committee consists of 4 members.
Duration of service: from July 26, 2021 to July 25, 2024. The Remuneration Committee held 7 meetings
- (A) in 2023; details of members’ eligibility and attendance are as follows:

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Number of in- Number of
In-person
person proxy
Title Name attendance Remarks
attendance attendance
rate (%) [B/A]
(B)
TienShang
Convener 7 0 100%
Chang
Committee TingWong
7 0 100%
member Cheng
Committee
JinFu Chang 7 0 100%
member
Committee Newly elected on
TsungHan Tsai 5 0 100%
member May 29, 2023
Other mandatory disclosures:
I. In the event where the Remuneration Committee's proposal is rejected or amended in a board of directors
meeting, please describe the date and session of the meeting, details of the motion, the board's resolution,
and how the Company had handled the Remuneration Committee's proposals (describe the differences and
reasons, if any, should the board of directors approve a solution that was more favorable than the one
proposed by the Remuneration Committee):
Date and session
How decisions
number of
and opinions of
Remuneration Contents of the proposal
the members
Committee
are addressed
meetings
February 20, 2023
1. Discussion of 2022 Managerial Performance Appraisal and Year-end
The 8 [th] meeting of
Bonus The proposal
the Fifth
2. Discussion of remuneration for Directors and compensation for was approved
Remuneration
employees for 2022 as is by all
Committee
attending
May 2, 2023
members and
The 9 [th] meeting of 1. Proposal on the appointment of the Company’s President.
was approved
the Fifth 2. Remuneration of the Company's Governance Officer and Acting
by the Board
Remuneration Spokesperson
of Directors.
Committee
July 31, 2023
Member
The 10 [th] meeting 1. Discussion of the proposal to allow the Company to distribute
Comment:
of the Fifth repurchased shares to managers.
Nil.
Remuneration 2. Discussion of the remuneration of the Company's audit supervisors
Committee
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	October 31, 2023 The 11thmeeting of the Fifth Remuneration Committee	October 31, 2023 The 11thmeeting of the Fifth Remuneration Committee
	December 21, 2023 The 12thmeeting of the Fifth Remuneration Committee
	January 22, 2024 The 13thmeeting of the Fifth Remuneration Committee
	February 27, 2024 The 14thmeeting of the Fifth Remuneration Committee	1. The results of the performance evaluation of the Board of Directors and directors for 2023 2. Discussion of remuneration for Directors and compensation for employees for 2023. 3. Fixed monthly remuneration and transportation allowance for directors (including independent directors) 4. Monthlyfixed salaryof Remuneration Committee members.

(3) Functionality of the Remuneration Committee:

According to the Company's “Remuneration Committee Charter,” the Remuneration Committee is required to convene meetings at least twice a year. The committee reports to the board of directors, proposes recommendation

for discussion in board meetings, and holds the following responsibilities:

I. Regular review of performance evaluation standards, performance targets, and salary/compensation policy, system, standard, and structure for directors and managers.
II. Regular assessment of directors' and managers' performance targets and accomplishment, and setting performance indicators and targets based on assessment outcome.
III. Other responsibilities authorized by the board of directors.
IV. While performing the functions mentioned in the preceding article, the following principles shall be followed:
V. The director and managerial performance evaluation and compensation and remuneration shall take reference of the general criteria for the payment in the industry and take into consideration the legitimate correlation with personal performance, operational performance of the Company, and risks in the future.
VI. Directors and managers shall not be misled to engage in behavior that exceeds the risk appetite of the Company for the pursuit of their compensation and remuneration.
VII. The ratio of the bonus issued to directors and senior managers for their short-term performance and the payment schedule of some of the variable compensation and remuneration shall take into consideration the characteristics of the industry and the nature of operation of the Company before a decision is made.
VIII. Members of the Committee may not take part in the discussion and voting of a decision on their personal

compensation and remuneration.

The so-called compensation and remuneration in the preceding two paragraphs include compensation in cash, stock option, stock bonus, pension benefits or severance pay, a variety of allowances, and other measures with substantial rewards. The scope shall be consistent with the remuneration stated for directors and managers in the Guidelines for Matters to be Included in the Annual Reports of Public Companies.

While discussing suggestions provided by the Compensation and Remuneration Committee, the Board of Directors shall comprehensively take into consideration the value of the compensation and remuneration, the payment method, and risks for the Company in the future, etc.

To not adopt or revise the suggestions provided by the Compensation and Remuneration Committee, it shall be supported by approval of a majority of the attending directors that account for two-thirds or more of all directors and comprehensively take into consideration as indicated in the preceding paragraph in its decision and provide substantial information on whether or not the approved compensation or remuneration is superior to that advised by the Compensation and Remuneration Committee.

If the compensation or remuneration approved by the Board of Directors is superior to that advised by the Compensation and Remuneration Committee, besides specifying the difference and cause in the minutes of the Board of Directors’ meeting, such information shall be announced and declared on the information disclosure website designated by the competent authority within two days from the date of approval by the Board of Directors. For the compensation and remuneration for directors and managers of the subsidiaries of the Company, if approval by the Board of Directors of the Company is required before decisions are made hierarchically, suggestions shall be provided to the Committee first before they are turned into the Board of Directors for discussion.

(V) Status of promoting sustainable development and deviation and causes of deviation from Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies

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				Principles for TWSE/TPE X Listed Companies

I. Does the company promote sustainable development governance framework and have a unit that specializes (or is involved) in sustainable development? Is the sustainable development unit run by senior management authorized by the board of directors? How is the supervisory status of the board?			In order to comply with the world trend and the government's policy, the Board of Directors amended the Corporate Social Responsibility Best Practice Principles on December 28, 2021 as the Sustainable Development Best Practice Principles, and changed the corporate social responsibility report into the Sustainability Report, in order to Connecting with the Company's internal system and communicating with the corresponding stakeholders. To this end, the CSR project organization has been adjusted into a sustainable development project team. Under the chairmanship, the President is in charge of the project, and an “Environmental Sustainability Team,” “Social Sustainability Team,” and “Corporate Governance Team” have been set up. Each functional unit within the Company is responsible for ESG topics, compiling ESG sustainable development management indicators such as economic (E), environment (E), society (S), and corporate governance (G), and links them to daily operations and integrates them into routine Work in progress. The Sustainable Development Team follows the “Plan-Do-Check-Act” (PDCA) operation to identify stakeholders on a regular basis, collect and review issues of concern to stakeholders and escalate them to annual meetings to ensure that all material aspects are covered. Action plans, results, and future strategies are initiated upon confirmation by the Committee, and reported to the Chairman to the Board of Directors. In 2022, the sustainability task force held a total of 5 meetings,discussing	No material deviation is found.

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Actual governance (Note 1) Deviation
and causes
of deviation
from
Corporate
Social
Responsibili
Assessment criteria
Yes No Summary (Note 2) ty Best
Practice
Principles
for
TWSE/TPE
X Listed
Companies
the completion of the 2023 Ecovadis (global
supply chain continuous assessment
platform) project and ESG promotion
related matters (preparation project of the
2022 sustainability report) and reports at
least once annually to the Board of
Directors.
The organizational chart of the sustainable
development group:
Chairpers
on
Sustainable
Development Task
Environmental Social Sustainability Corporate governance
Sustainability
Functional Human resource Financial accounting,
departments such as administration and auditing and other
industrial safety and other functional functional
 The chairman leads the sustainable development task force for
sustainable development.
 The President is responsible for organizing a sustainable development
project team and formulating strategies.
ESG Advocate  Vertical integration of relevant majors in each functional department
Members to implement ESG-related indicators, while horizontal integration of
 Implementation Outcome Review
 Target strategy formulation
 Communication with stakeholders
 Establish the ESG brand image of
HannsTouch
 Non-scheduled working group
ESG goals and tasks meetings
 Annual Report of the Board of
Directors
I. Has the company conducted risk  The Board of Directors meeting dated
November 5, 2021 formulated the “Risk No material
assessment on environmental, social, and
Management Policy and Procedures”, which
deviation is
corporate governance issues that are covers the identification, measurement,
found.
relevant to its operations, and monitoring, execution, and disclosure of the
risks pertaining to material environmental,
implemented risk management policies or
social, and corporate governance issues of
strategies based on principles of the Company and its entities consolidated in
its consolidated financial statements. For the
materiality?
management policy, strategy, and
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				Principles for TWSE/TPE X Listed Companies

			assessment method, the operation of risk management in the past years, etc.. The implementation of risk management shall be reported to the Board of Directors at least once a year. The Company’s “Sustainable Development Best Practice Principles” amended at the Board of Directors meeting dated December 28, 2021 is based on materiality principle. Pertaining to the environmental, social and corporate governance of the business, the Company conducts investigation amongst stakeholders, which shall serve as the basis of the core goals of sustainable development and risk management. The Company can thus formulate the relevant policies of sustainable development and risk management. We identify sustainability issues based on the four principles of inclusivity, materiality, responsiveness, and impact in accordance with the AA1000 AccountAbility Principle (2018). GRI Principles 2021 were followed in order of importance, and the impacts, management strategies, and practices of each material topic were disclosed one by one; the Company's sustainable development goals and strategies were also calibrated based on the results to enhance the effectiveness of external communication. After completing stakeholder consultations, we enter the phases of assessing operational impacts and identifying, examining, and establishing significant topics. We conduct standardized and quantified internal assessments through the “Stakeholder Concerns Questionnaire,” identifying and prioritizing nine significant topics for disclosure in this report, including two environmental topics, four social topics, and three economic topics. These topics are discussed and reviewed forprocess and

			Actual governance (Note 1)	Deviation
Assessment criteria	Yes	No	Summary (Note 2)	and causes of deviation from Corporate Social Responsibili ty Best Practice Principles for TWSE/TPE X Listed Companies
			standard appropriateness with various departments and external expert consultants, ensuring no significant topics are overlooked before submitting for approval by the General Manager, followed by the continuation of the report preparation process. Additionally, to ensure effective communication with a broad range of stakeholders through the sustainability report, we have established a “Stakeholder Section” on our official website, providing a dedicated contact channel for stakeholders. For any inquiries, suggestions, or complaints related to significant topics or other report content, stakeholders can maintain open and positive interaction through this email channel. (For detailed content, please refer to the official website or the Market Observation Post System under Corporate Governance/Corporate ESG Information/Sustainability Report: Sustainability Report for the Fiscal Year 2022, pages 9-14).
III. Environmental issues (I) Has the company developed an appropriate environmental management system, given its distinctive characteristics? (II) Is the company committed to enhancing efficient use of energy resources, and using renewable materials that produce less impact on the environment? (III) Does the company assess potential risks and opportunities associated with climate change, and undertake measures in response to climate issues? (IV)Does the companymaintain statistics on	   		 Environmental Policy and Management The Company has formulated relevant strategies and short-, medium-, and long- term plans. First, we have obtained the relevant environmental management labels and third-party certification, such as the ISO 14001 certification in 2001, and the conversion of the ISO 45001 Occupational Health and Safety Management System in 2020. The Company upholds the spirit of PDCA, abides by the government's relevant laws and regulations on environmental protection, labor safety and health, and promotes various environmental safety and health measures to achieve the goal of	No material deviation is found.

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				Principles for TWSE/TPE X Listed Companies

greenhouse gas emission, water usage, and total waste volume in the last two years, and implement policies aimed at reducing energy, carbon, greenhouse gas, water and waste?			environmental protection and sustainable development of the enterprise. In addition, the Company has also extended its ESG spirit to our business partners and actively promoted a green supply chain. All of our purchased raw materials comply with the EU RoHS 2.0 directive and the EU REACH SVHC highly concerned substances control requirements. Risk management to ensure that the selection of product materials conforms to environmental protection specifications; a complete supply chain management specification is also formulated, and supplier evaluation is conducted regularly, with a pass rate of 100%. In addition, we have also conducted conflict mineral due diligence on metal material suppliers, and the use rate of compliant minerals has reached 100%.  Contribution to energy conservation In terms of water resource conservation, the Company actively promotes water resource conservation measures. In 2021, the Company has launched two programs, “OWW-RO CIP Automatic Cleaning” and “A/A General Acid and Alkali Wastewater Recycling”, to effectively reduce the amount of water scale buildup, increase the organic water recovery rate, and greatly reduce the consumption of tap water. In terms of energy conservation, the Company has promoted a number of energy-saving measures, including improvement of utility equipment, energy-saving production lines, energy- saving lamps, office and other energy-saving measures, including: air compressor room ventilation and temperature improvement, MAU operating parameter adjustment, pure water Raw Water Pump Add inverters to effectively reduce Scope 1 greenhouse gas emissions. In addition, the Company has alsopromoted measures to reduce or recycle

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				Principles for TWSE/TPE X Listed Companies

			raw materials in the process. For example, adding an acid control instrument to set process parameters for the adjustment of etching solution concentration, and then extend the etching solution replacement cycle to reduce etching solution consumption, not only reduce the use of etching stock solution , which also reduced the discharge of waste liquids.  Pollution Prevention and Reduction Effectiveness The Company actively promotes pollution prevention and reduction measures to ensure that production is environmentally friendly. In terms of air pollutants, our factory has set up its own continuous monitoring equipment (CEMS) when it was built to monitor volatile organic gas (VOCs) emissions and unit product emissions. rate of at least 96.5%, which is higher than the legal standard. In terms of waste water reduction, a series of systematic improvements and revisions were made due to the charging and standard inspection water pollution standards of the Nanke management unit; in terms of waste reduction, HannsTouch actively promoted the recycling and reuse of raw materials, To implement source reduction of waste, we also advocate the importance of resource sorting, improve resource recycling rates, and create a circular economy. We have also comprehensively inventoried and evaluated the generation and distribution of waste. Using 2019 as the base year, we expect to reduce total waste output by 50%, increase total resource recovery by 10%, and recycle and use packaging materials by 2025 rate of 90%, and implemented cleaning of packaging materials to extend the frequency of use and reduce waste generation. Our facilityis a major handler of hazardous

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				Principles for TWSE/TPE X Listed Companies

			substances, and in addition to joining regional cooperative defense organizations for toxic disaster drills and supporting related equipment, we also regularly conduct emergency response drills involving hazardous substances on-site to enhance our personnel's incident response capabilities.  Environmental Engagement We prioritize environmental protection, starting with creating a friendly environment. We implement beautification and purification measures in offices, optimize facility environments, and have established amenities such as a fitness center, badminton courts, and basketball courts for our employees. We encourage employees to embrace green living by setting up food-sharing areas, implementing clear waste segregation to reduce environmental impact, At the same time, employees are encouraged to use public transportation to decrease the use of personal vehicles, thus reducing Scope 3 greenhouse gas emissions. Additionally, the company has implemented energy-saving measures for air conditioning, installing timers that automatically shut off certain air conditioners from 7:30 PM to 7:30 AM to conserve energy. We encourage employees to use stairs instead of elevators, saving approximately 87,600 kilowatt-hours per year and reducing CO2 emissions by 44 tons. To further enhance our employees' awareness of environmental issues, we offer eLearning courses focused on environmental education and advocacy. Also, during the mandatory six-hour safety, health, and environmental training for new hires, we promote our environmental, safety, and healthpolicies,includinginformation

			Actual governance (Note 1)	Actual governance (Note 1)	Actual governance (Note 1)	Deviation
Assessment criteria	Yes	No	Summary (Note 2)			and causes of deviation from Corporate Social Responsibili ty Best Practice Principles for TWSE/TPE X Listed Companies
			on waste disposal and recycling practices within the facility, helping new employees understand the company's environmental and safety regulations and policy directions. In addition, the Company uses the quarterly time of each department to promote the Company's latest environmental measures and regulations to colleagues, and encourages colleagues to ask questions for two-way communication.  Greenhouse gases: The Company is committed to reducing the carbon emissions from operations to achieve the long-term goal of energy conservation and carbon reduction. We conducted greenhouse gas inventory in accordance with the methodology of the international standard ISO 14064-1. In the future, qualified third-party verifiers will be commissioned to conduct Scope 1, Scope 2 and Scope 3 greenhouse gas emission verification, and will obtain ISO 14064- 1:2018 greenhouse gas verification declaration from 2023. Unit: metric tonnes of carbon equivalent (MTCE)
			Year	2021	2022
			Scope 1	39,831.0688	10,595.9361
			Scope 2	44,300.7365	45,655.8379
			Total	84,131.805	56,251.7740
			The Company's greenhouse gas emission was reduced by 33.1% year-over-year in 2022. In addition, compared with the base year of 2017 (80,606.640 tCO2e), it has reduced by 30.2%.  Energy conservation management: In 2022, the Company's plants introduced two energy and carbon reduction solutions, namely, CVD exhaust static pressure reduction and FAB 5F DCC PUMP load reduction, resulting in a total of 163.5 metric tons ofCO2e reduction. In the future,we

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Actual governance (Note 1) Deviation
and causes
of deviation
from
Corporate
Social
Responsibili
Assessment criteria
Yes No Summary (Note 2) ty Best
Practice
Principles
for
TWSE/TPE
X Listed
Companies
will plan the ALK exhaust static pressure
adjustment scheme, continue to reduce the
carbon emissions generated by the
manufacturing and operation processes, and
implement the Company's sustainable
strategy and goals for green manufacturing.
In addition, we have also actively promoted
energy-saving and carbon-reduction
measures in general office areas, including
the replacement of more energy-efficient
office supplies and electronic forms. In
2022, 3 old photocopiers will be replaced by
models with the environmental protection
label amount.
Energy conservation and carbon reduction
(electricity) action plan implementation
performance:
 Reduced energy consumption by
4.19×10 [11] joules in 2021, and reduced
carbon emissions by 59.3 tons of CO 2 e)
 Reduce energy consumption by 7.36 ×
10 [11] Joules and carbon emissions by
104.2 tons of CO 2 e) in 2022.
 Water resource management:
100% of the plant area water use comes from
tap water. The Company does not extract
underground water or well water. As such,
its water use has no negative impact on the
surrounding water resources. The main
water conservation measures are as follows:
(1) Monitoring and management of cooling
towers.
(2) Monitoring and management of
conductivity of cooling towers.
(3) Recovery of production water.
The management effectiveness of the
Company's total tap water consumption and
recycled water volume from 2020 to 2022:
Tap water Recovered
water/recovery rate
2020 719.417 628,682/87.38%
2021 1,015.312 625,682/61.62%
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			Actual governance (Note 1)	Actual governance (Note 1)	Actual governance (Note 1)	Actual governance (Note 1)	Actual governance (Note 1)	Deviation
Assessment criteria	Yes	No		Summary (Note 2)				and causes of deviation from Corporate Social Responsibili ty Best Practice Principles for TWSE/TPE X Listed Companies
			2022	944.001		671,203/71.10%
			 Waste management: The core strategy of waste management lies in total waste volume reduction and resource recovery of waste. In 2020 and 2022, the overall waste generation volume of the Nankeplant area has been:
			Unit: Tonnes	Total volume of general operation waste	Total volume of hazardous operation waste		Recycli ng rate
			2020	1,009.68	517.39		99.8%
			2021	1,212.96	355.76		99.8%
			2022	1,310.85	289.58		99.7%
			The Company is committed to sustainable development. Not only is the plant area implementing energy conservation and carbon reduction, the office area also implements the relevant management measures, e.g. going paperless (replacing paper documents with e-mails and electronic document signature system, and e-learning); water resource management (faucet water conservation facility); reduction management in petrol consumption (replacing business trips with tele- conferencing and encouraging company car commute for trips); electricity and energy conservation measures (using air conditioning and lighting control according to shifts, areas and segments, procuring lighting equipment in line with energy conservation standard, using elevators in segments or halting the use of certain elevators). (The Company conducted the 2023 inventory and verification for 2022. For details, please refer to the official website or the Market Observation Post System/Corporate Governance/Corporate ESG Related Information/Sustainability

			Actual governance (Note 1)	Deviation
Assessment criteria	Yes	No	Summary (Note 2)	and causes of deviation from Corporate Social Responsibili ty Best Practice Principles for TWSE/TPE X Listed Companies
			Report: 2022 Sustainability Report, Chapter 4- environmental protection).
IV. Social issues (I) Has the company developed its policies and procedures in accordance with laws and International Bill of Human Rights? (II) Has the company developed and	 		On November 5, 2021, the Board of Directors approved the human rights policy to conform and support the internationally recognized human rights standards and principles, including Universal Declaration of Human Rights (UDHR), United Nations Guiding Principles on Business and Human Rights (UNGPs), Declaration of Fundamental Principles and Rights at Work prescribed by International Labor Organization. The Company also seeks to comply with the local labor law and regulations in countries of operation, and adopt code of conducts prescribed by Responsible Business Alliance (RBA) to foster a safe and discrimination-free working environment, protecting the human rights of personnel including formal employees, contract staff, temps, interns. The protective measures that the Company seeks to promote are as follows: 1. Comply with the local labor law and regulations in countries of operation. 2. Foster a safe, health and humane working environment. 3. Assist employees in maintaining physical and mental health, and work-life balance. 4. Provide fair and reasonable salary and working conditions. 5. Prohibit discrimination and guarantee equal work opportunities. 6. Protect individual privacy and prevent harassment. 7. Ban child and forced labor. 8. Provide complaint mechanism and avenues. 9. Review and evaluate the relevant system and measures on a regular basis. The Companyhas conformed to the local	No material deviation is found.

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				Principles for TWSE/TPE X Listed Companies

implemented reasonable employee welfare measures (including compensation, leave of absence, and other benefits), and appropriately reflected business performance or outcome in employees' compensations? (III) Does the company provide employees with a safe and healthy work environment? Are employees trained regularly on safety and health issues?			labor law and regulations in countries of operation in formulating labor rights and welfare measures ; it also has policies in place to protect employee interests with respect to job assignment, dismissal, compensation, and performance evaluation, e.g. Regulations Governing Recruitment and Appointment, Regulations Governing Salary, Regulations Governing Promotion, Procedures for Employee Performance Appraisal, Regulations Governing Attendance, Regulations Governing Leave Application, Regulations Governing Retirement, etc., implementing the management of employee salaries, leave and welfare. The Company offers reasonable compensation, leave of absence, and welfare at levels that are comparable to peers and compliant with laws. Employee performance is evaluated on a regular basis, and additional bonuses are paid depending on the Company's business performance and employee individual performance. To prevent occupational hazards, the Company has adopted occupational health and safety (OH&S) management system, ISO 45001 to formulate various occupational emergency response operating procedures, implement work place environment inspection on a regular basis, plant-wide chemical management and work analysis and machinery inspection so as to implement self- checking on equipment and strengthen safety, health and fire drill training fro employees, thus preventing occurrence of occupational hazards. To facilitate the operating environment complying with the safety and health standards, the Company undertakes regular checks on the drinking water, noise, temperature and humidity, and lighting. Meanwhile, the Company engages

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				Principles for TWSE/TPE X Listed Companies

(IV) Has the company implemented an effective training program that helps employees develop skills over their career?			professional inspection company to perform a check on the carbon dioxide level of the building central ventilation every half a year to ensure the quality of the operating environment and protect the health of employees, thus preventing the occurrence of occupational hazards. To provide employees with a safe and healthy work environment and personal safety, the Company has undertaken protective measures, including preventive program for workplace violence, access control, visitor log book, regular health checks for employees and factory clinics to provide healthcare for employees, office cleaning services and regular disinfection for office and plant areas. In accordance with Procedures for Education and Training, the Company appropriates a budget for training every year to establish the employee training system. This is to create a diverse range of learning avenues, enhance professional competency of employees and cultivate professional talents. 1. Internal training: 2. The Company makes yearly plans to bring employees a variety of training courses that are suitable for their career development. Instructors from within or outside the organization are invited to assist employees with skill and career development. Courses can be classified into general categories including orientation, specialist, administration, and compliance. 3. External training: 4. Employees are given opportunities, subject to line managers' recommendation, to participate in training courses organized by external institutions, where they are able to enhance theirprofessional capabilities

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Actual governance (Note 1) Deviation
and causes
of deviation
from
Corporate
Social
Responsibili
Assessment criteria
Yes No Summary (Note 2) ty Best
Practice
Principles
for
TWSE/TPE
X Listed
Companies
and expand other professional
competence.
(V) Has the company complied with laws and The Company markets and labels its products

and services duly in compliance with laws
international standards with respect to
and international standards. Furthermore, as
customers' health, safety, and privacy,
respect and regard for customers, the
marketing and labeling in all products and Company puts in place measures to protect
services offered, and implemented customer privacy and intellectual property
rights. Via information security measures and
consumer protection policies and compliance with the latest regulatory
complaint procedures? standards, the Company has established
customer privacy protection policy to
maintain fair transaction market and create
customer value.
The Company expands its CSR philosophy
and practices to the supply chain, and works
with suppliers to protect the environment and
improve the safety and health of employees.
 The Company has established Standard for
(VI) Has the company implemented a supplier
Supplier Evaluation and Audit Operation to
management policy that regulates
require suppliers in focusing on and
suppliers' conducts with respect to promoting sustainable development. The
evaluations on suppliers include ISO 9001,
environmental protection, occupational
RoHS (HSF), ISO 14001, ISO 45001 and
safety and health, or work rights/human
RBA, obligating suppliers in banning forced
rights issues, and tracked suppliers' and child labor, and use of conflict minerals,
as well as guaranteeing their products do not
performance on a regular basis?
contain hazardous substance banned by the
Company. These measures are aimed to
protect basic human rights, the environment
and consumers.
The 2022 Sustainability Report of the No material
V. Does the company prepare sustainable
development report or any report of non-  Company was compiled in accordance with deviation is
the GRI Sustainability Reporting Standards
found.
financial information based on (GRI Standards) 2021 Edition, of which
international reporting standards or GRI 303 and GRI 403 are compared with the
2018 edition, GRI 207 is compared with the
guidelines? Are the abovementioned
2019 edition, and GRI 306 Compared to the
reports supported by assurance or opinion 2020 version; the GRI Content Index is
of a third-party certifier? provided in the appendix.
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Actual governance (Note 1) Deviation
and causes
of deviation
from
Corporate
Social
Responsibili
Assessment criteria
Yes No Summary (Note 2) ty Best
Practice
Principles
for
TWSE/TPE
X Listed
Companies
To enhance the accuracy and credibility of
the information in this report, our company
has engaged AFNOR Asia Ltd, an
independent third-party verification agency,
to assure the report according to the
AA1000AS v3 Assurance Standard. The
verification was conducted using Type 1 and
Moderate Assurance levels as the basis,
ensuring that the content of this report
complies with the GRI Standards and the
AA1000AP (2018) Accountability
Principles.
Financial data has been audited and certified
by PricewaterhouseCoopers Taiwan in
accordance with the International Financial
Reporting Standards (IFRS), and all
financial data is calculated in NTD.
VI. If the Company has established CSR principles in accordance with “Sustainable Development Best Practice Principles
for TWSE/TPEx Listed Companies,” please describe its current practices and any deviations from the Best Practice
Principles:
Pursuant to the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies, on December 28,
2021, the Company approved Sustainable Development Best Practice Principles by resolution to fulfil its CSR. The
Company shall pay attention to the interests of stakeholders. Between pursuing sustainable development and
profitability, the Company shall focus on ESG factors and incorporate them into its management policies and operating
activities. The Company has established specific regulations governing CSR system. The actual operation and the system
establish have no deviation.
VII. Other information useful to the understanding of sustainable development promotion:
 The Company conducted the inventory and verification in 2023 for 2022. Please refer to the “Sustainability Report”
of the Company: Please visit the Company's official website or the Market Observation Post System/Corporate
Governance/Corporate ESG-related information/Sustainability Report Check.
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Note 1: If the implementation item is checked, please describe the major policies, strategies, measures and implementation status. If the implementation item is unchecked, please describe the deviation and the reason of deviation at the Sustainable Development Best Practice Principles for TWSE/TPEx Listed Companies column, as well as the relevant policies, strategies and measures to be adopted in the future. However, for Items 1 and 2, the TWSE/TPEx listed company shall describe its governance and supervisory framework for sustainable development, including but not limited to management policy, strategy and goal formulation, review measures, etc. It additionally shall describe the company's risk management policies or strategies for operationsrelated environmental, social, and corporate governance issues, and their assessment status.

Note 2: Major principle refers to ESG issues that may give rise to major influence to the Company’s investors and other stakeholders.

(VI) Climate-related information

1 `、` Implementation of climate-related information

This chapter is based on the inventory and verification conducted by the Company in 2023 for 2022. For the relevant

disclosure information, please visit the Market Observation Post System/Corporate Governance/Corporate ESG

Related Information/Sustainability Report.

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Item Implementation status
1. Describe the In line with the world trend and the government's policy, the Company revised its Corporate Social
monitoring and Responsibility Best Practice Principles as the Sustainability Best Practice Principles in 2021, and
governance of changed the corporate social responsibility report to the Sustainability Report to facilitate the
climate-related connection of ESG philosophy to the Company's internal systems and communicated with the
risks and appropriate stakeholders.
opportunities by To this end, the CSR project organization has been adjusted into a sustainable development project
the Board of team. Under the leadership of the Chairman, the President is in charge of the project, and an
Directors and the “Environmental Sustainability Team,” “Social Sustainability Team,” and “Corporate Governance
management. Team” has been set up. Each functional unit within the Company is responsible for ESG topics,
compiling ESG sustainable development management indicators such as economic (E),
environment (E), society (S), and corporate governance (G), and integrating them into daily
operations and routine work. Medium
The Sustainable Development Team follows the “Plan-Do-Check-Act” (PDCA) operation to
identify stakeholders on a regular basis, collect and review issues of concern to stakeholders and
escalate them to annual meetings to ensure that all material aspects are covered. Action plans,
results, and future strategies are initiated upon confirmation by the Committee, and reported to the
Chairman to the Board of Directors. In 2022, the sustainable development task force held a total of
5 meetings, and the discussions included the project completion of the 2023 Ecovadis (global
supply chain continuous assessment platform) project and ESG promotion related matters (the
preparation project of the 2022 sustainability report).
2. Describe how the Conduct risk assessments for climate risks and opportunities, analyze and rank climate risks and
identified climate opportunities, and divide the severity of impacts as low, medium, high, and opportunities as
risks and unlikely, likely, and very likely. For medium- and high-risk items, appropriate countermeasures
opportunities will be formulated in the follow-up to improve the Company's resilience in responding to the risks
affect the and opportunities of climate change.
Company's (I) List of climate-related risks and opportunities:
business , strategy ① The government has introduced energy and carbon reduction related regulations, resulting in
and finance. an increase in additional operating costs.
② Abnormal climate (such as rainstorm, typhoon, etc.) caused the production line to shut down.
③ The abnormal climate (rise of average temperature) causes the abnormality of in-factory
equipment and thus affects the production line; or increases the power consumption of office
air conditioning
(II) Climate Opportunity Items:
① Improve the efficiency of energy resource utilization, reduce power and water consumption,
and reduce operating costs.
② Expand low-carbon products and services to meet the needs and expectations of customers and
consumers.
③ Improve the risk tolerance of climate change, avoid various natural disasters and market
pressure, and increase the overall corporate value.
After examining the risks, the Company analyzed the impact of climate change on the Company's
financial position, and the responsive actions taken in the year. The “Climate-Related Risks and
Financial Impacts” and “Climate-Related Opportunities and Financial Impacts” were disclosed as
follows:
(III) Climate-related risks and financial impacts
Climate- Period of
Type related influence Description of risk Potential financial impact
risks
According to the Large  Increased energy costs
Transformation Policies and Long-
Power Consumers  The pressure drop
risks regulations term
Clause of the caused the entire plant
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				Renewable Energy Act to be implemented in 2021, power consumers with contracted capacities of 5,000 kW and above must prepare 10% of their green power within fiveyears.	Renewable Energy Act to be implemented in 2021, power consumers with contracted capacities of 5,000 kW and above must prepare 10% of their green power within fiveyears.	to shut down for 30.15 hours. Approximately 3,263 boards were able to be lost and progressed. 147 boards were reworked and 205 boards were scrapped, resulting in a total loss of NTD 15,793,000.
			Mid- term	 Taiwan's “Climate Change Response Act”		 Increase in operating costs (carbon charge)
Physical risk		Extreme weather events such as typhoons and floods	Short- term	 May cause the production line to stop  Employee attendance rate is affected  Transportation interruption, cargo loss		 Duration of work affected  Loss of equipment and personnel  The salary cost of personnel working overtime after shift suspension or downtime is estimated to be about NTD 260,160
		Changes in rainfall patterns	Mid- term	 Flooding  Drought		 Purchase of water in advance increases the manufacturing cost. The unit cost of water- carrying water is about NTD 1,000 per ton of water, which is roughly an additional NTD 36 million for half a year (200 tons per day * 30 days * 6 months)
		Annual mean temperature rise	Long- term	The enthalpy of outside air increases due to the increase in temperature, which in turn causes the power consumption of the ice machine to increase.		 Increased spending on equipment procurement  Increase in electricity bill
(IV) Climate-related opportunities and financial impacts
Type	Climate-RelatedOpportunities				Potential financial impact
Resource efficiency	 Paper and waste recycling  Switch to higher-efficiency electrical equipment  Reduce water consumption				 Reduce the amount of consumables purchased  Reduction of electricity consumption and carbon emission  Reduce water costs  Subsidies for the purchase of energy-efficient appliances
Source of energy	 Adoption of energy-saving measures  Low-carbon energy				 Reduce carbon emissions and save on carbon reduction costs  Saving energy and reducing operatingcosts
Resilience	 Integrate climate change risks and treatment measures to improve the Company's adaptability				 Strengthen corporate resilience and reduce the losses caused by climate change,while reducing

customer loss

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3. Describe the 1. The financial impact of extreme weather is as described in Item 2 above.
financial impact 2. Short-term: Effective response to the impact of climate change on transportation delivery
of extreme (shipping schedule), and coordinating logistics providers to unload containers at other ports in
climate events advance to avoid subsequent shipping delays due to sea weather conditions.
and 3. Mid-to-long term: Relevant measures are implemented to reduce the impact of water shortage
transformation on business operations:
actions. Voluntary water conservation: (1) Stop water use in the irrigation system (2) Increase the
4. Describe how conductivity of cooling towers and reduce drainage (3) Extend the regeneration time of UPW
climate risk (MMF.ACF) (4) A/AWW waste water recycling in the process (5) Replace UPW consumables
identification, (6) Recycling of UPW instrument water (7) Reducing the discharge of waste gas scrubber (8)
assessment, and Increasing the amount of water recovered from other sources (9) Recycled water
management
processes are
integrated into the
overall risk
management
system.
5. If a scenario Physical climate risk scenario: Based on the RCP climate scenario selected by the Company, the
analysis is used to ESG promotion team evaluates the possible impacts of climate disasters at temperatures between
assess the 2.4°C and 4.4°C using the “3D Disaster Potential Map” database. Under the simulated climate
resilience to scenarios ranging from RCP2.6 to RCP8.5, it is estimated that the increase in average maximum
climate change daily rainfall by the end of the 20th century does not exceed the hazard standard of the “3D Disaster
risks, the Potential Map”: 24 There was 650mm of rainfall per hour, so there is no immediate risk of flooding
scenarios, for the Company. However, natural disasters such as typhoons may cause work closures,
parameters, transportation difficulties, supply chain interruptions, and personnel absences.
assumptions, Transitional climate risk scenarios: The Company uses the Nationally Determined Contributions
analysis factors, (NDCs) of the Paris Agreement and relevant domestic regulations (such as the Greenhouse Gas
and main Reduction and Management Act and the Renewable Energy Development Act), to assess the
financial impacts financial impact of future electricity costs. Under the 2030 target of reducing BAU by 50%, if the
used shall be proportion of renewable energy in Taiwan is increased from 5.6% in 2019 to 40% by 2030 as
described. planned by the national energy policy, due to the high cost of renewable energy in Taiwan,
Therefore, the unit price of Taipower's electricity is expected to rise from NTD 2.63/kWh in 2019
to NTD 3.88/kWh in 2030, and the cost of externally purchased electricity will increase.
If the purchased electricity is 8,963,740,277 KWH in 2022, the energy cost may increase to NTD
34,779,312,274 in 2030. Based on the results of the scenario analysis, the Company will continue
to implement various energy-saving measures to reduce the impact of external power purchases.
In order to reduce the risks and impacts caused by climate change and achieve the goal of carbon
reduction and energy saving, we use indicators to manage the risks and opportunities related to
6. If there is a climate change:
transformation Energy conservation and carbon reduction: The medium- and long-term plan is to reduce carbon
plan in place to emissions by 30% by 2030 (based on 2017). The main measures are as follows:
----- End of picture text -----

manage climate- related risks, specify the content of the plan, and the indicators and targets used to identify and manage physical risks and transformation risks.	① Electricity Usage: Energy-efficient lighting products with eco-labels have been selected. Air conditioning and lighting are turned off in unoccupied meeting rooms. During lunch breaks, only essential lighting is left on in offices and common areas. The company aims to reduce electricity consumption by 10% by 2030 (using 2020 as the base year). ② Water resources: Promote water conservation, control the water volume from sinks in public toilets, and give priority to faucets and toilets with “Water-Saving Label” for the replacement of outdated equipment. The annual water consumption is expected to be reduced to 300-400 cubic meters by 2030 /day. ③ Waste: Promote the waste reduction policy, use double-sided printing for official documents and paper, or reuse the reverse side as much as possible. The brand used for photocopy paper bears the Pulp Green Label; the reduction of raw materials in the process is promoted, and the SRS system is established to achieve a mid-term and long-term plan for waste reduction by 50% by 2030 (based on 2020) ④ Process gas: The exhaust gas of NF3 and N2O used in the process is treated by the combustion treatment equipment and then discharged to the CVD exhaust equipment for treatment. The 2022 process gas emission is compared with that of 2021, using the IPCC 2019 emission reduction calculation. Annual reduction of 29,377.8522 tons of CO2e. ⑤ Greenhouse gas: The greenhouse gas emission in 2022 is 10,595.9361 tons CO2e for scope 1
7. If internal carbon pricing is used as a planning tool, the basis for setting the price shall be stated.
8. If climate-related targets are set, the description should include the activities covered, the scopes of greenhouse gas emissions, the planning period, and annual progress towards these targets. Additionally, if carbon offsets or Renewable Energy Certificates (RECs) are used to achieve these goals, it should be explained, detailing the source and amount of the carbon reduction or the quantity of RECs used.	and 45,655.8379 tons CO2e for scope 2. Carbon emissions were reduced as a result of the energy-saving policies compared to the base year, 2017. The Company will continue to regularly test and manage its greenhouse gas emissions, and will continue to obtain third-party certification for ISO 14064-1 every year. Establish and plan energy- saving strategies and actions, and advocate international issues of greenhouse gas and global warming. Internal carbon pricing not used as a planning tool. By regularly reviewing and assessing climate risks, and investing resources in addressing climate risk issues, we can effectively respond to the risks brought about by climate change and improve the organization's operational resilience. Short-term goal: The Company will continue to monitor the possible impact of climate risks on business operations through the framework of Climate-related Financial Disclosures (TCFD). Mid-term and long-term goals: To increase resource investment on climate change issues to effectively reduce the financial losses caused by climate risks, and increase the financial growth caused by climate opportunities. The Company effectively manages climate risks through the four major elements of Climate-related Financial Disclosures (TCFD), including governance, strategy, risk management, and indicators and goals. Greenhouse gas reduction target (base year 2017, greenhouse gas emission 80,606.640 tCO2e) Reduce greenhouse gas emissions by 30% by 2030; reduce greenhouse gas emissions by 50% by 2040; and reduce greenhouse gas emissions by 80% by 2050; continue to obtain ISO 14064-1 third-party certification every year since 2023. Continue to implement energy conservation and carbon reduction projects to reduce energy consumption and greenhouse gas emissions. Increase the solar power generation and expand the spontaneous use of renewable energy to achieve the energy transition.

manage climate-
related
risks,
specify
the
content
of
the
plan,
and
the
indicators
and
targets used to
identify
and
manage physical
risks
and
transformation
risks.

①
Electricity Usage: Energy-efficient lighting products with eco-labels have been selected. Air
conditioning and lighting are turned off in unoccupied meeting rooms. During lunch breaks,
only essential lighting is left on in offices and common areas. The company aims to reduce
electricity consumption by 10% by 2030 (using 2020 as the base year).
②
Water resources: Promote water conservation, control the water volume from sinks in public
toilets, and give priority to faucets and toilets with “Water-Saving Label” for the replacement
of outdated equipment. The annual water consumption is expected to be reduced to 300-400
cubic meters by 2030 /day.
③
Waste: Promote the waste reduction policy, use double-sided printing for official documents
and paper, or reuse the reverse side as much as possible. The brand used for photocopy paper
bears the Pulp Green Label; the reduction of raw materials in the process is promoted, and the
SRS system is established to achieve a mid-term and long-term plan for waste reduction by
50% by 2030 (based on 2020)
④
Process gas: The exhaust gas of NF3 and N2O used in the process is treated by the combustion
treatment equipment and then discharged to the CVD exhaust equipment for treatment. The
2022 process gas emission is compared with that of 2021, using the IPCC 2019 emission
reduction calculation. Annual reduction of 29,377.8522 tons of CO2e.
⑤
Greenhouse gas: The greenhouse gas emission in 2022 is 10,595.9361 tons CO2e for scope 1

7. If internal carbon
pricing is used as
a planning tool,
the
basis
for
setting the price
shall be stated.

8. If climate-related
targets are set, the
description
should include the
activities covered,
the
scopes
of
greenhouse
gas
emissions,
the
planning period,
and
annual
progress towards
these
targets.
Additionally,
if
carbon offsets or
Renewable
Energy
Certificates
(RECs) are used
to achieve these
goals, it should be
explained,
detailing
the
source
and
amount
of
the
carbon reduction
or the quantity of
RECs used.

and 45,655.8379 tons CO2e for scope 2. Carbon emissions were reduced as a result of the
energy-saving policies compared to the base year, 2017.
The Company will continue to regularly test and manage its greenhouse gas emissions, and will
continue to obtain third-party certification for ISO 14064-1 every year. Establish and plan energy-
saving strategies and actions, and advocate international issues of greenhouse gas and global
warming.
Internal carbon pricing not used as a planning tool.
By regularly reviewing and assessing climate risks, and investing resources in addressing climate
risk issues, we can effectively respond to the risks brought about by climate change and improve
the organization's operational resilience.
Short-term goal: The Company will continue to monitor the possible impact of climate risks on
business operations through the framework of Climate-related Financial Disclosures (TCFD).
Mid-term and long-term goals: To increase resource investment on climate change issues to
effectively reduce the financial losses caused by climate risks, and increase the financial growth
caused by climate opportunities.
The Company effectively manages climate risks through the four major elements of Climate-related
Financial Disclosures (TCFD), including governance, strategy, risk management, and indicators
and goals.
Greenhouse gas reduction target (base year 2017, greenhouse gas emission 80,606.640 tCO2e)
Reduce greenhouse gas emissions by 30% by 2030; reduce greenhouse gas emissions by 50% by
2040; and reduce greenhouse gas emissions by 80% by 2050; continue to obtain ISO 14064-1
third-party certification every year since 2023.
Continue to implement energy conservation and carbon reduction projects to reduce energy
consumption and greenhouse gas emissions.
Increase the solar power generation and expand the spontaneous use of renewable energy to achieve
the energy transition.

(VII) Enforcement of business integrity, deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies

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			y	Best Practice Principles for TWSE/TPEX Listed Companies

I. Establishment of integrity policies and solutions (I) Has the Company established a set of board- approved business integrity policy, and stated in its Memorandum or external correspondence about the polices and practices it implements to maintain business integrity? Are the board of directors and the senior management committed to fulfilling this commitment? (II) Has the Company developed systematic practices for assessing integrity risks? Does the Company perform regular analyses and assessments on business activities that are prone to higher risk of dishonesty,and implementpreventions			(I) On November 5, 2021, the Board of Directors approved Ethical Corporate Management Best Practice Principles and Procedures for Ethical Management and Guidelines for Conduct by resolutions to foster a corporate culture for ethical corporate management and promote its robust development, implementing good corporate governance and risk control mechanism, as well as creating a management environment of sustainable development. The Company not only publishes these regulations and procedures internally, but also makes them available on the Company website. Moreover, the Company also organizes training courses to obligate employees, Managers and Board members to comply with ethical management principle when conducting business. Meanwhile, Managers and Board members are required to sign the Director and Manager Ethics Guidelines when they first join the Company to proclaim their commitment in complying with the guidelines. (II) The Rules and Procedures for Board of Directors Meetings prescribe that in event of conflict of interests, Directors shall recuse themselves. Furthermore,the Material Insider	No material deviation is found.

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			y	Best Practice Principles for TWSE/TPEX Listed Companies

against dishonest conducts that include at least the measures mentioned in Paragraph 2, Article 7 of “Ethical Corporate Management Best Practice Principles for TWSE/TPEX Listed Companies”? (III) Has the Company defined and enforced operating procedures, behavioral guidelines, penalties, and grievance systems as part of its preventive measures against dishonest conducts? Are the above measures reviewed and revised on a regular basis?			Information Handling and Insider Transaction Prevention Procedures prescribe for non-disclosure duty, fairness in information disclosure and measures for violations, whilst the Director and Manager Ethics Guidelines prescribe the prohibition of conflict of interests, non- disclosure duty and encouragement for reporting any illegal conduct or violation of code of conduct so as to implement the provision of Ethical Corporate Management Best Practice Principles, Article 7, Paragraph 2. Every year, the Company shall also remind the Board members and management of the relevant regulations via electronic means. (III) To ensure the implementation of ethical corporate management, the Company has established effective and rigorous accounting system, and independent internal control system. Whistleblowing system and complaint avenue are also provided, in which internal audit personnel, who are independent and objective, shall conduct inspection of the aforementioned systems and their compliance status on a regular basis. In the event of a report on violation of ethical corporate management, the personnel shall conduct thorough investigation. If the evidence of the offense is found to be true, the internal audit personnel shall liaise with personnel from human resource and legal departments. Penalties

Assessment criteria			Actualgovernance(Note) Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX Listed Companies Summary	Actualgovernance(Note) Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX Listed Companies Summary
	Yes	No
			shall be imposed in accordance with the disciplinary actions prescribed, or official report to the competent authorityshall be made.
II. Enforcement of business integrity (I) Does the Company evaluate the integrity of all counterparties it has business relationships with? Are there any integrity clauses in the agreements it signs with business partners? (II) Does the Company have a unit that enforces business integrity directly under the board of directors? Does this unit report its progress (regarding implementation of business integrity policy and prevention against dishonest conducts) to the board of directors on a regular basis (at least once a year)?	 		(I) In accordance with the Ethical Corporate Management Best Practice Principles and Procedures for Ethical Management and Guidelines for Conduct, the Company shall conduct business activities in a fair and honest manner. Prior to any business undertaking, the Company shall take into consideration the legality and reputation of business counterparties and avoid dealings with parties who have a record of unethical conduct. Furthermore, business contracts shall incorporate integrity clause. As such, most contracts signed between the Company and vendors contain integrity and anti-commission clauses, which the counterparties are instructed to comply. (II) The Company designates the sustainable development project team to be the unit exclusively (or concurrently) responsible for promoting ethical corporate management; the team is responsible for assisting the Board of Directors and the management to formulate, and supervise the implementation of, ethical corporate management policy and preventive projects in order to ensure the fulfillment of the ethical corporate management principles;in addition,it also reports	No material deviation is found.

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			y	Best Practice Principles for TWSE/TPEX Listed Companies

			the implementation status to the Board of Directors once a year. On November 5, 2021, the Board had established the charter of the unit by resolution and disclosed the operational status of the unit in 2023 on the Company website.  Supplier:  94% of major suppliers passed ISO14001 certification.  74% of major suppliers passed ISO45001 certification.  100% of major suppliers passed ISO9001/ RBA certification.  Education and training:  New employee orientation training: 42 general staff and 14 managerial officers.  Awareness session on the legal aspect of ethical conduct: 100% of trainees completed the training.  Commitment:  New recruits signing the Employees’ Statement of Undertaking: 100%  Representation Letter signed by directors and executives upon taking office, stating that no matter specified in Article 30 of the Company Act applies to them and that they are fully aware of the regulations of the Securities and Exchange Act that pertain to insiders: 100%  Undertaking of Confidentiality signed by directors upon taking office: 100%.  Awareness sessions:

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			y	Best Practice Principles for TWSE/TPEX Listed Companies

(III) Does the Company have any policy that prevents conflict of interest, and channels that facilitate the report of conflicting interests?			 Awareness session on prevention of insider trading and improper benefits:  An awareness session publicizing the period of non-disclosure of financial statements and business performance information, and reminder of laws and regulations, at least 15 days before a quarterly (i.e., 2023 Q1, Q2, and Q3) financial statements are reported to the Board of Directors: 4 sessions.  An awareness session publicizing the period of non-disclosure of financial statements and business performance information, and reminder of laws and regulations, at least 30 days before the annual (2023) financial statements are reported to the Board of Directors: 1 session.  An awareness session held by the Company after the proposal to repurchase treasury shares was approved by the Board of Directors to communicate information on insider trading prevention and legal reminders to insiders: 1 session.  Awareness session on the legal aspect of ethical conduct: 100% of trainees completed the training. (III) The Company has established “Whistleblowing System, Complaint Avenue and Precautions for MakingA Report” and disclosed

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			y	Best Practice Principles for TWSE/TPEX Listed Companies

(IV) Has the Company implemented effective accounting policy and internal control system to maintain business integrity? Has an internal or external audit unit been assigned to devise audit plans based on the outcome of integrity risk assessment, and to audit employees' compliance with various preventions against dishonest conduct? (V) Does the Company organize internal or external training on a regular basis to maintain business integrity?	 		the relevant information on the Company website/Investor/Corporate Governance/Stakeholder Engagement. The Company encourages internal personnel and external parties to blow the whistle on unethical conduct or misconduct. The Company has thus provided information on the procedures for processing a whistleblowing report and a response e-mail for the use of internal personnel in submitting their opinions and other matters that should be reflected regarding the Company or the management. The whistleblower may opt to make the report anonymously or otherwise. (IV) The Company has robust accounting policies and internal control system in place, and assigns internal auditors to design and execute comprehensive audits over internal systems on a yearly basis, thereby ensure that policy design and execution remain effective over time. The internal audit results are reported to the Board of Directors. (V) New recruits are required to sign “Letter of Commitment for Compliance with Code of Conduct and Integrity Principles” when they first report to work.The human resource department shall promote the awareness on the importance of ethical corporate management and the disciplinary actions in the event of a violation. Furthermore, for at least once ayear,the Companyshall

Assessment criteria			Actualgovernance(Note) Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX Listed Companies Summary	Actualgovernance(Note) Deviation and causes of deviation from Ethical Corporate Management Best Practice Principles for TWSE/TPEX Listed Companies Summary
	Yes	No
			provide training to employees on prohibition of offering or receiving improper benefits and obligate them in complying with the relevant regulations. The latest training was conducted online, and an awareness session wasgiven on November 24.
III. Whistleblowing system (I) Does the Company provide incentives and means for employees to report misconducts? Does the Company assign dedicated personnel to investigate the reported misconducts? (II) Has the Company implemented any standard procedures for handling reported misconducts, and subsequent actions and confidentiality measures to be undertaken upon completion of an investigation?			(I) The Company has introduced a reward/disciplinary system as part of its “Work Rules,” and details of which have been conveyed to employees. Furthermore, all employees shall sign the “Letter of Commitment for Compliance with Code of Conduct and Integrity Principles”. Apart from declaring the commitment to comply with ethical corporate management regulations, in accordance with “Whistleblowing System, Complaint Avenue and Precautions for Making A Report”, the Company has designated a whistleblowing e-mail ([email protected]) for internal personnel and external parties to blow the whistle on any unethical conduct. (II) In accordance with “Whistleblowing System, Complaint Avenue and Precautions for Making A Report”, the Company shall treat the whistle- blowing report received and investigation process as top-secret matters. The Company shall process the report by upholding the principle of impartiality. If the	No material deviation is found.

==> picture [502 x 158] intentionally omitted <==

report concerns a Director or top management, it shall be forwarded to Independent Directors. If necessary, the legal compliance and other departments shall provide assistance. If a person being informed on have indeed violated the applicable law and regulations or the Company's ethical management policy and regulations after verification, the Company shall immediately require the violator to cease the misconduct and shall make an appropriate disposition. If necessary, the Company shall file an official report to the competent authority and transfer the case to a legal government agency for further investigation. Documentation of case acceptance, investigation processes and investigation results shall be retained for five years. In the event of a suit in respect of the whistleblowing case before the retention period expires, the relevant information shall continue to be retained until the conclusion of the litigation. With respect to confirmed information, the Company shall charge relevant units with the task of reviewing the internal control system and relevant procedures and proposing corrective measures to prevent recurrence. The designated unit of the Company shall report the event referred to in the preceding paragraph, actions taken, and subsequent reviews and

==> picture [503 x 605] intentionally omitted <==

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

Actual governance (Note) Deviation and
causes of
deviation
from Ethical
Corporate
Assessment criteria Management
Yes No Summary
Best Practice
Principles for
TWSE/TPEX
Listed
Companies
corrective measures taken to the
Board of Directors.
(III) Does the Company have appropriate measures in (III) By upholding the principle of
place to protect whistleblowers from impartiality and the spirit of
retaliation? integrity, in accordance with the
provision of “Whistleblowing
System, Complaint Avenue and
Precautions for Making A Report”,
the personnel who process the
whistle-blowing report shall provide
a written declaration on protecting
the identity of the reporter and the
content of the report, and as well as
committing to protecting the
reporter from retaliation due to
blowing the whistle.
IV. Enhanced information disclosure
Has the Company disclosed its integrity principles For the Ethical Corporate Management No material
and progress onto its website and MOPS? Best Practice Principles, Procedures for deviation is
Ethical Management and Guidelines for found.
Conduct and the relevant regulations and

current practice of ethical corporate
management, the Company has made
disclosure on the Company
website/Investor/Corporate Governance
and MOPS.
V. If the company has established business integrity policies in accordance with “Ethical Corporate Management Best Practice
Principles for TWSE/TPEX-Listed Companies,” please describe its current practices and any deviations from the Best
Practice Principles: On November 5, 2021, in accordance with Ethical Corporate Management Best Practice Principles
for TWSE/TPEX-Listed Companies, the Board of Directors approved the establishment of Ethical Corporate
Management Best Practice Principles and Procedures for Ethical Management and Guidelines for Conduct by resolution
to serve as the basis of compliance for all employees. No material deviation is found. pliance for all employees. No material deviation is found. liance for all employees. No material deviation is found. ployees. No material deviation is found. loyees. No material deviation is found. yees. No material deviation is found. ees. No material deviation is found.
----- End of picture text -----

V. If the company has established business integrity policies in accordance with “Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies,” please describe its current practices and any deviations from the Best Practice Principles: On November 5, 2021, in accordance with Ethical Corporate Management Best Practice Principles for TWSE/TPEX-Listed Companies, the Board of Directors approved the establishment of Ethical Corporate Management Best Practice Principles and Procedures for Ethical Management and Guidelines for Conduct by resolution to serve as the basis of compliance for all employees. No material deviation is found. pliance for all employees. No material deviation is found. liance for all employees. No material deviation is found. ployees. No material deviation is found. loyees. No material deviation is found. yees. No material deviation is found. ees. No material deviation is found. VI. Other information relevant to understanding the Company's business integrity: (e.g. review of business integrity principles) Nil

(VIII) If the Company has established corporate governance principles or other relevant guidelines, references to such principles must be disclosed:

The Company has not established its own Corporate Governance Code of Conduct, but does have other similar policies in place. Furthermore, the Company prepares corporate social responsibility reports and places them on website where shareholders may access at any time: http://www.hannstouch.com.

(IX) Other important information material to the understanding of corporate governance within the Company:
The Company has established a set of “Material Insider Information Handling and Insider Transaction Prevention Procedures” to serve as guidance over how material insider information should be handled and disclosed, thereby preventing improper leakage of information while ensuring consistency and accuracy of information disclosed to the public. These procedures have been posted onto intranet and internet websites, where employees may access for their own compliance.
With regard to the diversification policy of Board members and its implementation status”, please see page 19 of the annual report. For the continuing education of the Board members in the past two years, and scope of function of the chief corporate governance officer, highlights of operations for the year and continuing education, please see page 39 of the annual report.
Market Observation Post System: http://mops.twse.com.tw
Website of the Company: http://www.hannstouch.com

(IX) Internal control:

Declaration of Internal Control System:

HannsTouch Holdings Company Declaration of Internal Control System

Date: February 27, 2024

The following declaration has been made based on the 2023 self-assessment of the Company’s internal control

system:

I. The Company acknowledges and understands that establishment, implementation, and maintenance of the internal control system are the responsibility of the board of directors and managers, and that such a system has been implemented within the Company. The purpose of this system is to provide reasonable assurance in terms of business performance and efficiency (including profitability, performance, asset security etc), reliable, timely, and transparent financial reporting, and regulatory compliance.
II. There are inherent limitations to even the most well-designed internal control system. As such, an effective internal control system can only reasonably assure achievement of the three goals mentioned above. Furthermore, changes in the environment and circumstances may all affect the effectiveness of the internal control system. However, internal control system of the Company features a self-monitoring mechanism that enables immediate rectification of deficiencies upon discovery.
III. The Company evaluates the design and execution of its internal control system based on the criteria specified in “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter referred to as “The Governing Principles”) to determine whether the existing system continues to be effective. Assessment criteria introduced by “The Governing Principles” consisted of five main elements, each representing a different stage of internal control: 1. Control environment; 2. Risk evaluation and response; 3. Procedural control; 4. Information and communication; and 5. Supervision. Each element further encompasses several sub-elements. Please refer to “The Governing Principles” for details.
IV. The Company has adopted the abovementioned criteria to validate the effectiveness of its internal control system design and execution.
V. Based on the evaluation results of the preceding paragraph, the Company believed that the design and implementation of its internal control system was effective as of December 31, 2023 (including the supervision and management of subsidiaries), with a understanding of the extent to which the objectives of effectiveness and efficiency of operations were achieved, whether the reporting was reliable, timely, transparent, and if the compliance with relevant rulings, laws and regulations is met, and a reasonable assurance of the achievement of these objectives.
VI. This declaration constitutes part of the Company's annual report and prospectus, and shall be disclosed to the public. Any illegal misrepresentation or omission in the public statement above are subject to the legal consequences described in Articles 20, 32, 171, and 174 of the Securities and Exchange Act.
VII. This declaration was approved unanimously without objection by all 8 directors present at the board meeting dated February 27, 2024, and is hereby presented.

HannsTouch Holdings Company

Chairperson: Wei Hsin Ma (signature/seal)

President: WeiHsin Ma Signature & Seal

If the internal control system was reviewed by an external CPA, the result of such review must be disclosed: Nil.
(X) Penalties imposed against the Company for regulatory violation, or penalties against employees for violation of internal control system, in the most recent year up to the publication date of annual report that may significantly impact shareholders' interest or security price; describe details of the penalty, areas of weakness and any corrective actions taken: Nil.
(11) Major resolutions passed in shareholder meetings and board of directors’ meetings held in the last year up to the publication date of this annual report:

Major resolutions passed in General Shareholders’ Meeting and the execution progress:

Date

Major resolutions and execution

May 24, 2023
General
Shareholders’
Meeting

Acknowledgments:
1. Ratification for Business Report and Financial Statements for 2022.
Shareholders' Questions and the Company's Response: No shareholders' questions.
Resolution and execution: acknowledged. Announced on MOPS.
2. Ratification of earnings distribution for 2022.
Shareholders' Questions and the Company's Response: No shareholders' questions.
Resolution and execution: acknowledged. As there is no balance after deducting the
Legal reserve and the special reserve provided for in accordance with the law from the
net profit after tax this year, it is retained without distribution.
Announced on MOPS.

Discussions:
1. The Company's reply to shareholders' questions regarding the proposal to carry out
a cash capital increase by issuing common shares through private placement, public
offering, or a combination of both: No questions from shareholders.
Resolution and execution: Passed cash issue at NT$800 million. Currently, the
application has yet to be submitted to the competent authority and hence it is reported
in the Board of Directors’ meeting on February 27, 2024 that the Company shall not
pursue further in the remaining period. It shall be brought forth as a new case for
discussion.
2. Discussion of amendments to the Articles of Incorporation.
Shareholders' Questions and the Company's Response: No shareholders' questions.
Resolution and execution: passed. Promulgated in accordance with the amended
Articles of Incorporation, and the change of registration was
completed on June 12, 2023.
3. Discussion of revision to the Company’s “Rules and Procedures of Shareholders’
Meeting”.
Shareholders' Questions and the Company's Response: No shareholders' questions.
Resolution and execution: passed. The amended regulations are disclosed and
executed.
4. Proposal on election of one additional independent director of the Company.
Shareholders' Questions and the Company's Response: No shareholders' questions.
Resolution and implementation: Mr. TsungHan Tsai, an independent director, won
510,944,395 of the votes cast, and the change was registered on
June 12,2023.

Discussion of lift of non-competition restrictions for Directors. Shareholders' Questions and the Company's Response: No shareholders' questions. Resolution and execution: passed. Agreed to release the non-compete restriction on Mr. YuChi Chiao, representative of HUALI Investment Corp.

Major board of directors resolutions and execution:

==> picture [455 x 100] intentionally omitted <==

Major board of directors resolutions and execution:	Major board of directors resolutions and execution:	Major board of directors resolutions and execution:	Major board of directors resolutions and execution:
Date/session Major resolutions and execution Objections or reservations from independent directors Conditions described in Article 14-3 of the Securities and Exchange Act

February 20, 2023 The 10thmeeting of the Ninth Board of Directors	1. 2022 Business Report and Financial Statements 2. The Company’s 2022 earnings distribution table 3. Statement of Internal Control based on findings of 2022 internal control self assessment 4. Proposal for amendments to the “Internal Control System” and “Regulations for Internal Audit Implementation”. 5. Intended revision of some of the articles in the Internal Control System regarding “criteria and regulations of the internal control system of the service unit” 6. Proposal to revise some of the articles in the Internal Control System regarding “Procedures for Audit Work for Internal Control Purpose”. 7. Intended capital increase in cash for issuance of common stock through private placement or public offering or the combination of the two 8. 2023 CPA assignment and independence assessment 9. Proposal to give pre-approval to the non-assurance services provided by attesting CPAs, their accounting firm, and the firm’s affiliates to the Company and its subsidiaries. 10. Intended acquisition of marketable securities from the open market to serve as short-term investments 11. Proposal for continuing to acquire common stock of HannStar Display Corporation 12. Proposal to lend capital to Glorystone Inc. 13. Proposal to allow the Company to retire the common shares which were repurchased for the first time in 2022 but not transferred to employees. 14. Proposal to carry out the first instance of repurchase of the Company’s common shares in 2023. 15. Intended application for the limits of loans with financial institutions 16. Proposal to amend the Company's “Corporate Governance Best Practice Principles”. 17. Proposal on the amendments to the Articles of Incorporation 18. Proposal to elect an additional independent director of the Company. 19. Proposal to nominate a candidate for the additional seat of independent director of the Company.	Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil Nil	             

==> picture [455 x 724] intentionally omitted <==

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

Conditions
described in
Objections or
Article 14-3
reservations
of the
Date/session Major resolutions and execution from
Securities
independent
and
directors
Exchange
Act
20. Proposal for lifting the non-competition restrictions on the Nil
newly elected Directors.
21. Related matters concerning the convening of the 2023 Nil
General Shareholders’ Meeting.
22. Distribution of the remuneration for employees and that for Nil
directors of 2022.
23. Discussion of the proposal on the 2022 performance Nil
evaluation of Managers, and on year-end bonus therefor.
Execution: Resolutions 1 to 23 were unanimously passed by the
attending Directors and executed. (Resolutions 11 and 12
involved the interest of some directors, who recused themselves
accordingly, and were passed after the chair designated
independent director TienShang Chang to be the acting chair.)
1. The Company's financial statement for the first quarter of Nil 
2023 
2. Intended revision of some of the articles in the Internal Nil
Control System regarding “criteria and regulations of the
internal control system of the service unit”
3. Intended acquisition of marketable securities from the open Nil
market to serve as short-term investments
May 2, 2023 4. The Company's investment in Strong-Wave Radio Nil
The 11 [th] meeting of Technology Inc.
the Ninth Board of 5. Intended application for the limits of loans with financial Nil
Directors institutions
6. Amendment to the Company's “Related Party Transaction Nil
Procedures”
7. Proposal on the appointment of the Company’s President. Nil
8. Appointment of Corporate Governance Officer and Deputy Nil
Spokesperson
Execution: Resolutions 1 to 8 was unanimously passed by the
attending Directors and executed.
1. The Company's financial statement for Q2 2023 Nil 
2. Appropriation of the Company's profit or loss for the first half Nil 
July 31, 2023 of 2023
The 12 [th] meeting of 3. Intended acquisition of marketable securities from the open Nil
the Ninth Board of market to serve as short-term investments
Directors 4. Operational plan for re-issuance of securities by the Company Nil
5. Intended application for the limits of loans with financial Nil
institutions
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Conditions
described in
Objections or
Article 14-3
reservations
of the
Date/session Major resolutions and execution from
Securities
independent
and
directors
Exchange
Act
6. Proposal for the renewal of director liability insurance. Nil 
7. The Company hired one more member of the Remuneration Nil
Committee. 
8. The Company intends to sign an industry-research Nil
cooperation contract with Academia Sinica and pay the
academic feedback
9. Proposal to transfer the common shares repurchased for the Nil
first time in 2023 by the Company to employees.
10. Proposal to allow the Company to distribute repurchased Nil
shares to managers.
11. Appointment of the head of audit Nil
Execution: Resolutions 1 to 11 was unanimously passed by the
attending Directors and executed. (Resolutions 9 and 10 involved
the interest of some directors, who recused themselves
accordingly, and were passed after the chair designated
independent director TienShang Chang to be the acting chair.)
1. The Company's financial statement for the third quarter of Nil 
2023 
2. Proposal on 2024 internal audit plan Nil
3. Amendments to “Hierarchical Responsibility Principles” Nil
4. Intended trading of shares and equity funds on the open Nil
market to serve as short-term investments 
5. Proposal to apply for credit facilities with financial Nil
institutions
October 31, 2023 6. Proposal to allow the Company to retire the common shares Nil
The 13 [th] meeting of which were repurchased for the first time in 2023 but not 
the Ninth Board of transferred to employees. 
Directors 7. Proposal on the appointment of the Company’s President. Nil
8. Personnel to sign the audit report will be changed Nil
9. Appointment of the head of finance Nil
10. Appointment of the head of accounting Nil
Execution: Resolutions 1 to 10 was unanimously passed by the
attending Directors and executed. (Resolutions 7 and 8 involved
the interest of some directors, who recused themselves
accordingly, and were passed after the chair designated
independent director TienShang Chang to be the acting chair.)
December 21, 2023 1. Proposal to developed the 2023 budget under the 2023 Nil 
The 14 [th] meeting of business plan
the Ninth Board of 2. Appointment of the Company's Corporate Governance Nil
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Date/session	Major resolutions and execution	Objections or reservations from independent directors	Conditions described in Article 14-3 of the Securities and Exchange Act
Directors	Officer and Deputy Spokesperson Execution: Resolutions 1 to 2 was unanimously passed by the attendingDirectors and executed.
January 22, 2024 The 15thmeeting of the Ninth Board of Directors	1. Subsidiary GUANGDONG SHEKEL TECHNOLOGY CO., LTD. Handling of Purchase and Sales Cases: Action Plan for Addressing Deficiencies Identified During Audit 2. Real estate renovation of the south wall of the Company's Nanke Factory 3. Discussion of the proposal on the 2023 performance evaluation of Managers, and on year-end bonus therefor. Execution: Resolutions 1 to 3 was unanimously passed by the attending Directors and executed. (Resolutions 2 and 3 involved the interest of some directors, who recused themselves accordingly, and were passed after the chair designated independent director TienShangChangto be the actingchair.)	Nil Nil Nil	 
February 27, 2024 The 16thmeeting of the Ninth Board of Directors	1. 2023 Business Report and Financial Statements 2. Table on 2023 Profit Distribution and Loss Compensation of the Company. 3. 2024 CPA assignment and independence assessment 4. The Company's internal control statement - 2023 5. Proposal to amend the Company's “Internal Control System” 6. Proposal of the Company to carry out a cash capital increase by issuing common shares through private placement, public offering, or a combination of both. 7. Proposal for continuing to acquire common stock of HannStar Display Corporation 8. Amendments to the Company's “Regulations Governing the Acquisition and Disposal of Assets” 9. Intended acquisition of marketable securities from the open market to serve as short-term investments 10. Intended application for the limits of loans with financial institutions 11. Comprehensive re-election of board directors 12. Nomination of candidates for the 10th term of directors and independent directors 13. Proposal for lifting the non-competition restriction on the new directors of the 10th term 14. Convening of 2024 General Shareholders' Meeting and related matters		         

100

Date/session	Major resolutions and execution	Objections or reservations from independent directors	Conditions described in Article 14-3 of the Securities and Exchange Act
	15. Monthly fixed salary of Directors (including Independent Directors) and honorarium of attending Board meetings. 16. Monthly fixed salary of Remuneration Committee members. 17. 2023 distribution of remuneration to employees and directors Implementation status: Motion 1 - 17 were passed unanimously by attending directors and executed as resolved. (Resolution of Motion 7 after directors recused themselves for conflict of interest, and independent director TienShang Chang was appointed bythe chairperson.)

(12) Documented opinions or declarations made by directors or supervisors against board resolutions in the most recent year, up to the publication date of this annual report: Nil.
(13) Resignation or dismissal of the Chairperson, President, head of accounting, head of finance, chief internal

auditor, corporate governance officer, or head of R&D in the most recent year up to the publication date of annual report:

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Reasons for
Title Name Date onboard Date departed resignation or
departure
Vice President LiZhi Lei March 1, 2021 March 31, 2023 Resigned
Head of corporate ChengChia
August 1, 2022 April 15, 2023 Job rotation
governance Chiang
Head of corporate
KuiYi Liu April 17, 2023 May 2, 2023 Job rotation
governance
Head of corporate Ying-Jie November 30,
May 2, 2023 Resigned
governance Chang 2023
President Teansen Jen August 1, 2022 May 2, 2023 Group transferred
ChienChung
President May 2, 2023 August 29, 2023 Resigned
Huang
Audit officer JianXin Hsiao March 19, 2021 July 31, 2023 Job rotation
October 31,
Head of Finance August 1, 2022 Job rotation
AMON 2023
CHIEN October 31,
Head of accounting May 4, 2022 Job rotation
2023
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101

V. Disclosure of audit fees

Unit: NT$ thousand

						Unit: NT$ thousand
Name of accountingfirm	Name of CPA	Period of audit service	Auditing fee	Non- auditingfee	Total	Remarks
PwC Taiwan	ChingChang Chen	January 1, 2023 - December 31, 2023	2,610	31	2,641	The non-audit fee of $31 was for business registration service.
	Fu-Ming Liao

(II) Change of accounting firm that resulted in the reduction of audit fee from the previous year; disclose audit fee before and after the change and the cause of such change: Nil.
(III) Any reduction in audit fee by more than 10% compared to the previous year; state the amount, the percentage and reason of such variation: Nil.

VI. Information on replacement of CPAs: the Company had no replacement of CPAs in 2023. In addition, due

to the internal organizational adjustment of the CPA firm, the attesting CPAs for audit (review) from 2024 onward will be changed from ChinChang Chen and FuMing Liao to FuMing Liao and YungChi Lin Certified Public Accountant

VII. Disclosure of any of the Company’s Chairperson, President, or managers responsible for financial or accounting affairs being employed by the CPA’s firm or any of its affiliated company in the last year, including their names, job titles, and the periods during which they were employed by the CPA’s firm or any of its affiliated company: Nil.

102

VIII. Details of shares transferred or pledged by directors, supervisors, managers, and shareholders with more than 10% ownership interest in the last year, up to the publication date of this annual report:

(I) Change of shareholding of directors, supervisors, managers and major shareholders:

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Unit: shares
Year-to-date through March
2023
31, 2024
Increase Increase
Title Name Increase Increase
(decrease) (decrease) in
(decrease) in (decrease) in
in shares shares
shares held shares held
pledged pledged
Chairperson
WeiHsin Ma 700,000 0 0 0
CEO/President
Hua Li Investment
0 0 0 0
Corporation
Director
Representative: YuChi
0 0 0 0
Chiao
Director TsuKang Yu 0 0 0 0
Director ChihChung Chou 0 0 0 0
Independent
TienShang Chang 0 0 0 0
Director
Independent
TingWong Cheng 0 0 0 0
Director
Independent
JinFu Chang 0 0 0 0
Director
Independent
TsungHan Tsai (Note) 0 0 0 0
Director
Head of Finance
AMON CHIEN (Note) 10,000 0 NA NA
Head of accounting
Head of accounting ChuXia Weng (Note) 0 0 0 0
Head of corporate
YingJie Chang (Note) 0 0 NA NA
governance
Head of Finance
Head of corporate ChunJie Yeh (Note) 0 0 0 0
governance
HannStar Display
Major shareholder 0 0 0 0
Corporation
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Note: Independent Director TsungHan Tsai was co-elected on May 29, 2023.

ChihWei Chien, Head of Finance and Accounting, was relieved on October 31, 2023 and succeeded by Division Director Yeh Chun-Jie and Manager ChuXia Weng.

Chang Ying-Jie, Head of Corporate Governance, was dismissed on November 30, 2023 and was succeeded by Division Director Yeh Chun-Jie.

(II) Transfer of shares by directors, supervisors, managers, and major shareholders to related parties: Nil.

(III) Pledge of shares by directors, supervisors, managers and major shareholders to related parties: Nil.

103

IX. Relationships characterized as spouse or second-degree relatives or closer among top-ten shareholders:

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April 2, 2024; unit: thousand shares; %
Names and relationships of
Shares held by top-10 shareholders
Shares held in Shares held in the
spouse and characterized as spouse or
own name names of others
underage children relative of second degree or
Name closer Remarks
Share- Share- Share-
No. of holding No. of holding No. of holding
Name Relationship
shares percen- shares percen- shares percen-
tage % tage % tage %
Parent company
HannStar
Hua Li of HUALI
Display 214,639 26.76 - - - - Nil
Investment Investment
Corporation
Corp.
Subsidiary of
Hua Li HannStar
HannStar
Investment 59,440 7.41 - - - - Display Nil
Display
Corporation Corporation
Corporation
Tengda
Investment 18,004 2.24 - - - - Nil Nil Nil
Corporation
Chairperson of
Hua Li Hua Li
Investment Investment
HannStar Chairperson of
YuChi Chiao 10,741 1.34 6,755 0.84 - - Nil
Display HannStar
Corporation Display
WeiHsin Ma Corporation
Spouse
JPMorgan
Chase Bank
N.A., Taipei
Branch in
custody for
Vanguard
6,761 0.84 - - - - Nil Nil Nil
Total
International
Stock Index
Fund, a series
of Vanguard
Star Funds
HannStar
Director of
Display
WeiHsin Ma 6,755 0.84 10,741 1.34 - - HannStar Nil
Corporation
Spouse
YuChi Chiao
Vanguard
Emerging
Markets 6,036 0.75 - - - - Nil Nil Nil
Emerging
Markets
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104

Stock Index Fund Account in the trusteeship of Chase Bank
ChingNan Weng	4,658	0.58 -		-	-	-	Nil	Nil	Nil
HUANG Gaolin	4,500	0.56 -		-	-	-	Nil	Nil	Nil
JPMorgan Chase Bank Advanced Trust Stock Index II Investment Account in Custody	3,259	0.41	-	-	-	-	Nil	Nil	Nil

X. Investments jointly held by the Company, the Company's directors, supervisors, managers, and enterprises directly or indirectly controlled by the Company; disclose shareholding in aggregate of the above parties:

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December 31, 2023 unit: thousand shares: %
Held by the Company and
Held by the Company directly or indirectly Aggregate ownership
Business investments
controlled enterprises
(Note 1)
No. of Shareholding No. of Shareholding No. of Shareholding
shares percentage shares percentage shares percentage
Richest Investment Ltd. 4,500 100.00% 0 0% 4,500 100.00%
Golden Apple Investment
15,000 100.00% 0 0% 15,000 100.00%
Corporation
Silver Net Investment Co., Ltd. 15,000 100.00% 0 0% 15,000 100.00%
Glorystone Inc. 33,000 42.31% 0 0% 33,000 42.31%
Pony Dream Co., Ltd. 0 0% 1,720 86.00% 1,720 86.00%
Hanns Blegrain Ltd. 1,000 100.00% 0 0% 1,000 100.00%
Pottery Inc. 0 0 12,150 81.00% 12,150 81.00%
Guangdong Shekel Technology Co.,
0 100% 0 100.00%
Ltd. (Note 2)
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Note 1: Long-term investment accounted by the Company using the equity method.

Note 2: Hexin Trading Technology Service (Shenzhen) Co., Ltd. changed its name to “Guangdong Shekele Co., Ltd.” in October 2023.

105

Four. Capital Overview

I. Capital and outstanding shares

(I) Source of capital:

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

Authorized capital Paid-up capital Remarks
No. of
Issued No. of Paid in
Year / shares Amount Amount
month price (in (in NT$1 shares (NT$ Sources of share capital propertie Others
(NT$) (thousand s other
millions million) thousand)
shares) than cash
of shares)
Jing-(088)-Shang-
1999.09 10 80 800 20,000 200,000 Initial share capital Nil 088135069 dated
September 18, 1999
Technolo Jing-(089)-Shang-
Cash issue 5,880 thousand
1999.11 10.2 800 800 79,880 798,800 gy in lieu 089106477 dated
shares
of capital March 3, 2000
Jing-(089)-Shang-
2000.03 12 400 4,000 160,000 1,600,000 Cash issue 801,200 Nil 089110824 dated April
13, 2000
Jing-(089)-Shang-
2000.10 15 400 4,000 360,000 3,600,000 Cash issue 2,000,000 Nil 089140240 dated
October 31, 2000
(90)-Tai-Cai-Zheng-(I)-
2001.12 20 600 6,000 400,000 4,000,000 Cash issue 400,000 Nil 160107 dated
September 26, 2001
Capitalization of retained
earnings NT$668,965
thousand
Jing-Shou-Shang-
(includes employee profit
2003.07 10 800 8,000 506,896 5,068,965 Nil 09201206040 dated
sharing of NT$68,965,520)
July 10, 2003
Capitalization of capital
reserves NT$400,000
thousand
Jing-Shou-Shang-
Corporate bond conversion
2003.07 15.3 800 8,000 520,009 5,200,098 Nil 09201222990 dated
131,133 thousand
July 24, 2003
Jing-Shou-Shang-
Corporate bond conversion
2003.10 15.3 800 8,000 610,672 6,106,724 Nil 09201303500 dated
906,626 thousand
October 29, 2003
Jing-Shou-Shang-
Corporate bond conversion
2004.01 15.3 800 8,000 612,933 6,129,333 Nil 09301000850 dated
22,609 thousand
January 8, 2004
Jing-Shou-Shang-
Corporate bond conversion
2004.05 15.3 800 8,000 615,194 6,151,942 Nil 09301077870 dated
22,609 thousand
May 3, 2004
Jing-Shou-Shang-
Corporate bond conversion
2004.07 15.3 1,500 15,000 617,455 6,174,552 Nil 09301135650 dated
22,610 thousand
July 29, 2004
Capitalization of retained
earnings NT$514,500
thousand
(includes employee profit Tai-Cai-Zheng-I-
2004.07 10 1,500 15,000 715,045 7,150,452 sharing of NT$53,100 Nil 0930119916 dated May
thousand) 12, 2004
Capitalization of capital
reserves NT$461,400
thousand
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106

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Authorized capital Paid-up capital Remarks
No. of
Issued No. of Paid in
Year / shares Amount Amount
month price (in (in NT$1 shares (NT$ Sources of share capital propertie Others
(NT$) (thousand s other
millions million) thousand)
shares) than cash
of shares)
Jing-Shou-Shang-
Corporate bond conversion
2005.04 13.21 1,500 15,000 717,664 7,176,634 Nil 09401072470 dated
26,182 thousand
April 27, 2005
Merger-
Share exchange for merger Jing-Shou-Shang-
related
2005.09 10 1,500 15,000 844,930 8,449,295 with Sintek Photronic 09401184100 dated
share
1,272,661 thousand September 26, 2005
exchange
Capitalization of retained
earnings NT$470,122
thousand
(includes employee profit Jing-Shou-Shang-
2005.11 10 1,500 15,000 927,694 9,276,939 sharing of NT$41,095 Nil 09401220820 dated
thousand) November 3, 2005
Capitalization of capital
reserves NT$357,522
thousand
Approved under Letter
Capital reduction against
No. Nan-Shang-
2008.08 10 1,500 15,000 612,277 6,122,780 previous losses NT$3,154,159 Nil
0970019225 dated
thousand
August 15, 2008
Nan-Shang-
Retirement of treasury stock
2008.12 10 1,500 15,000 603,574 6,035,739 Nil 0970029660 dated
NT$87,041 thousand
December 9, 2008
Capitalization of retained
earnings NT$403,366
Nan-Shang-
thousand
2009.10 10 1,500 15,000 663,589 6,635,897 Nil 0980024351 dated
Capitalization of capital
October 26, 2009
reserves NT$196,792
thousand
Nan-Shang-
Cash issue NT$1,800,000
2009.12 16 1,500 15,000 843,589 8,435,897 Nil 0980028141 dated
thousand
December 23, 2009
Nan-Shang-
Exercise of employee warrant
2010.01 10 1,500 15,000 860,694 8,606,948 Nil 0990001179 dated
NT$171,051 thousand
January 26, 2010
Nan-Shang-
Exercise of employee warrant
2010.04 10 1,500 15,000 871,068 8,710,688 Nil 0990006712 dated
NT$103,740 thousand
April 13, 2010
Nan-Shang-
Exercise of employee warrant
2010.07 10 1,500 15,000 878,513 8,785,138 Nil 0990015501 dated July
NT$74,450 thousand
15, 2010
Nan-Shang-
Exercise of employee warrant
2010.10 10 1,500 15,000 878,587 8,785,878 Nil 0990022844 dated
NT$740 thousand
October 15, 2010
Nan-Shang-
Exercise of employee warrant
2011.01 10 1,500 15,000 878,757 8,787,578 Nil 1000000582 dated
NT$1,700 thousand
January 11, 2011
Nan-Shang-
Exercise of employee warrant
2011.04 10 1,500 15,000 881,270 8,812,708 Nil 1000007718 dated
NT$25,130 thousand
April 7, 2011
Nan-Shang-
Exercise of employee warrant
2011.07 10 1,500 15,000 883,951 8,839,508 Nil 1000017076 dated July
NT$26,800 thousand
8, 2011
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107

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A total of 4,938,000 treasury shares were cancelled in 2023. As of the date of publication of this annual report, the outstanding treasury shares were 802,010,529 shares.

Information relevant to the aggregate reporting policy: Not applicable.

(II) Shareholders structure:

(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:	(II) Shareholders structure:
April 2,2024
Share- holders Count Government institutions Financial institutions Other juridical persons Individuals Foreign institutions and foreigners Mainland China investment Treasur y stock Total
Persons	4 7 278 82,048 113 2 0 82,452
Shares held (shares)	721,960 381,168		294,995,469 474,993,886 30,817,045 101,001 0 802,010,529
Shareholding percentage %	0.09	0.05	36.78	59.23	3.84	0.01	0	100.00

(III) Diversity of ownership:

Common shares:

Common shares:
	Face value NT$10per share;April 2,2024
Shareholdingrange	Shareholder count	Number of shares	Shareholding
1 to 999 shares	39,757	5,341,931	0.67
1,000 to 5,000 shares	27,812	65,174,598	8.13
5,001 to 10,000 shares	7,443	59,260,260	7.39

108

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10,001 to 15,000 shares 2,181 27,917,645 3.48
15,001 to 20,000 shares 1,626 30,514,932 3.80
20,001 to 30,000 shares 1,250 32,395,948 4.04
30,001 to 40,000 shares 636 22,898,988 2.86
40,001 to 50,000 shares 446 20,953,300 2.61
50,001 to 100,000 shares 750 54,838,131 6.84
100,001 to 200,000 shares 313 44,006,910 5.49
200,001 to 400,000 shares 143 39,450,661 4.92
400,001 to 600,000 shares 43 20,640,752 2.57
600,001 to 800,000 shares 18 12,539,359 1.56
800,001 to 1,000,000 shares 8 7,081,530 0.88
1,000,001 shares and above 26 358,995,584 44.76
Total 82,452 802,010,529 100.00
----- End of picture text -----

Preferred shares: None

(IV) List of major shareholders:

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April 2, 2024 ; Unit: Share
Shares Number of shares Shareholding
Name of major shareholder held percentage %
HannStar Display Corporation 214,639,413 27.76
Hua Li Investment Corporation 59,439,784 7.41
Tengda Investment Corporation 18,004,000 2.24
YuChi Chiao 10,741,374 1.34
Vanguard Emerging Markets Emerging Markets Stock Index Fund
6,761,304 0.84
Account in the trusteeship of Chase Bank
JPMorgan Chase Bank Hosting Starlight International Stock Index
6,754,825 0.84
Fund
WeiHsin Ma 6,036,115 0.75
Norges Bank Investment Account in the trusteeship of Citibank 4,658,000 0.58
ChingNan Weng 4,500,000 0.56
HUANG Gaolin 3,259,000 0.41
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109

(V) Information relating to market price, net worth, earnings, and dividends per share for the last 2 years:

Unit: NT$

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

Year As of the end of the
Item current year
2022 2023
March 31, 2024 (Note
8)
Market price per High 17.95 11.5 9.70
share Low 9.00 8.86 8.12
(Note 1) Average 11.28 9.79 8.91
Net worth per Before dividend 12.10 11.06 －
share
After dividend 12.10 11.06 －
(Note 2)
Weighted average
outstanding shares (in 806,460 802,377 －
EPS
thousands)
Earnings per share (Note 3) 0.03 -1.12 －
Cash dividends －－－
－－－
Bonus From earnings
Dividends per share stock dividend From capital reserves －－－
Cumulative unpaid dividends (Note 4) －－－
P/E ratio (Note 5) 376.00 -8.74 －
investment returns Analysis of Price to dividend ratio (Note 6) －－－
Cash dividend yield (Note 7) －－－
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Note 1: List the highest and lowest stock prices of each year. Compute the average stock price according to turnover in value and trading volume.

Note 2: Indicate based on the number of stocks issued as at year-end, and compute according to the distribution per the

Board of Directors or the resolution of the Shareholders’ Meeting in the following year.

Note 3: If retrospective adjustment is needed due to bonus shares, EPS prior to and after adjustments should be presented.

Note 4: If the terms of issuance of equity securities stipulate the unpaid dividend of the year can only be cumulated and disbursed in the year where the Company is profitable, respective disclosure on the cumulative unpaid dividend for the period should be made.

Note 5: PE Ratio = Average closing price for the period / Earnings per share

Note 6: Price to dividend ratio = Average closing price for the period / Cash dividend per share

Note 7: Dividend Yield = Cash dividend per share / Average closing price for the period

Note 8: Net value per share and EPS should be presented using the latest audited quarterly report as of the publication of

the annual reports; the rest of the information should be presented using the latest yearly report as of the publication of the annual reports.

(VI) Dividend policy and execution:

Dividend policy stated in the Company's Articles of Incorporation: According to the Company's Articles of Incorporation:
Article 30 Earnings concluded in a year are first subject to taxation and reimbursement of previous losses, followed by a 10% provision for legal reserve. However, no further provision of legal

110

reserve is required if the Company has accumulated legal reserve to an amount equal to the paid-up capital. Moreover, provision or reversal for special reserve shall be made in accordance with the regulations. Any earnings remaining shall be added to undistributed earnings carried from previous years and distributed as shareholder dividends or retained at the Board of Directors' proposal, subject to resolution in a Shareholders’ Meeting.

Where the Company makes provision for special reserve, for provisions of “net accumulated other equity interest for previous periods” and “net increase in fair value of investment properties” not met, prior to earnings distribution, the Company shall transfer an amount equivalent to special reserve from undistributed earnings of previous periods. If the amount still falls short, the Company shall make provisions from the total amount of after-tax net income for the period and other profit items adjusted to the current year’s undistributed earnings other than after-tax net income for the period.

The Company may distribute all or part of its dividends, profits, capital reserves or legal reserves in cash, provided that such decision is resolved in a board meeting with at least twothirds of directors present, supported by more than half of attending directors, and reported during a shareholders’ meeting afterwards. These decisions do not require the shareholders’ meeting resolution mentioned in the preceding Paragraph.

The Company may distribute earnings or reimburse losses at the end of each half-year, subject to compliance with The Company Act. Before interim earnings distribution, the Company shall estimate and retain the amount of taxes payable, reimburse previous losses, and make provisions for legal reserve as required by law. However, this excludes circumstances where legal reserves have accumulated to an amount equal to paid-up capital. Earnings distribution in cash is subject to board of directors' approval; distribution through issuance of new shares is subject to shareholders' resolution.

Article 31 The Company shall adopt a stable earnings distribution principle after taking into account financial, business, and operational factors. Subsequent to reimbursement of previous accumulated losses, and provision of legal reserve and special reserve, from the remaining amount of the after-tax net income for the period, not less than 10% shall be allocated as dividends, which may be distributed in cash or stock. Of which, cash dividend shall not be lower than 50% of the total dividends. However, if the dividend per share is less than NT$1, the Company may elect not to distribute dividends.

The Company may capitalize all or part of its capital reserves into share capital, subject to compliance with the law and the authority's instructions, in situations where the Company has no earnings to distribute in the current year, or if the amount of earnings is far less than the amount distributed in the previous year, or for whatever financial, business, and operational concerns the Company may have.

Distribution of dividends resolved by the Board of Directors and reported to the Shareholders' Meeting: On February 27, 2024, the Board of Directors resolved that the dividends should not be distributed as there was no earnings for 2023, and will be reported to the Shareholders' Meeting in 2024 for recognition.
Expected change in dividend policy: Nil.
(VII) Impacts of proposed stock dividends on the Company’s business performance and earnings per share: Not

applicable as no stock dividend was proposed

111

(VIII) Employee/director/supervisor remuneration:

Percentage and range of employee/director/supervisor remuneration stated in the Articles of Incorporation: Pursuant to the Articles of Incorporation, profits concluded by the Company are subject to employee remuneration of 0.001% to 15%, and director remuneration of no more than 2%. However, profits must first be taken to offset against cumulative losses if any.
- The board of directors may resolve to distribute the abovementioned employee remuneration in cash or in shares. Payments may also be made to employees of subordinate companies that satisfy the eligibility criteria set forth by the board of directors or authorized parties thereof. The above director's remuneration can only be paid in cash.
Basis of calculation for employee/director/supervisor remuneration and share-based compensations; and accounting treatments for any discrepancies between the amounts estimated and the amounts paid:

Employee and director remuneration have been estimated according to the Articles of Incorporation, at 0.001% to 15% for employee remuneration and no more than 2% for director remuneration. These amounts were distinguished between operating costs and operating expenses, and presented in appropriate accounts depending on their nature. If an amount different from the figure presented on financial statements is resolved in a subsequent shareholder meeting, the difference shall be treated as a change in accounting estimates and recognized as gain or loss in the year the resolution is made.

Remuneration passed by the board of directors:
- (1) Amounts of employees' and directors' remunerations distributed in cash or shares: As the Company settled 2023 with no earnings, there is no plan to distribute employees' and directors' remunerations.
- (2) Ratio of the value of remuneration for employees distributed in stock and the sum of after-tax income and total value of remuneration for employees in the entity or individual financial statement of the current term: not applicable.
Actual payment of employees'/directors' remuneration in the previous year (including the number of shares allocated, the sum of cash paid, and the price at which shares were issued), and any differences from the figures estimated (explain the amount, the cause, and treatment of such discrepancies):

The Company intended to distribute NTD 400 as remuneration to employees and NTD 0 to directors for 2022, which did not differ from the recognized amount.

(IX) Buyback of the Company's shares: None had occurred in the last year up to the publication date of annual report.

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II. Corporate bonds (including offshore corporate bonds):

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

Corporate bond category 2021 first secured ordinary corporate bonds
110-1, tranches A, B and C: July 5, 2021
Issuance date
110-2 tranche: November 26, 2021
Face value Face value per paper: NT$1 million
Place of issuance and trade The Republic of China
Issued price Issued at 100% of face value
NT$150 million
110-1, tranches A, B and C, issuance amount for each tranche totaled
Total value
NT$300 million
110-2 tranche, issuance amount totaled NT$600 million.
110-1, tranches A, B and C: Fixed rate of 0.51% per annum
Interest rate
110-2 tranche: Fixed rate of 0.57% per annum
Term of issuance of 110-1, tranches A, B and C: Five-year term, July 5,
Tenor 2026
Term of issuance of 110-2 tranche: Five-year term, November 26, 2026
110-1, tranches A: Guaranteed by Mega International Commercial Bank
110-1, tranches B: Guaranteed by Hua Nan Commercial Bank, Ltd.
Guarantor 110-1, tranches C: Guaranteed by Taishin International Bank Co. Ltd.
110-2 tranche: Guaranteed by Taiwan Shin Kong Commercial Bank Co.,
Ltd.
110-1, tranches A, B and C: Bank SinoPac
Trustee
110-2 tranche: Taishin International Bank Co. Ltd.
110-1, tranches A, B and C: Engaged Capital Securities Corporation as the
lead underwriter
Underwriter
110-2 tranche: Engaged MasterLink Securities Corporation as the lead
underwriter
Certifying lawyer Handsome Attorney-At-Law/Yawen Chiu
Certifying accountant PriceWaterhouseCoopers Taiwan, ChingChang Chen, Fu-Ming Liao
Method of repayment Bullet payment at maturity
Outstanding principal NT$150 million
Terms and conditions for early
Nil
redemption or repayment
Restrictive clauses Nil
Rating agency, date of rating, and
Nil
rating awarded
Amount of common shares,
global depository receipts,
or other securities
converted (exchanged or Not applicable
Other subscribed) up to the
Rights publication date of this
annual report
Issuance and conversion
Regulations (for exchange Not applicable
or subscription)
----- End of picture text -----

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

Possible dilution of equity and
impact on equity of existing
shareholders due to issuance or Not applicable
conversion, or due to subscription or
issuance terms
Custodian of exchanged assets Nil
----- End of picture text -----

III. Preferred shares: Nil.

IV. Depository receipts: Nil.

V. Employee warrants: Nil.

VI. Issuance of new shares for business acquisition or share exchange: Nil.

VII. Progress on planned uses of capital: Nil.

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Five. Operational Overview

I. Business activities

(I) Business activities:

Principal business activities:

The Company is primarily involved in the research, development, production, manufacturing, and sale of AMOLED projected capacitive touch sensors and TFT (thin-film transistor) drive backplanes, and general investment.

2023 product revenue percentage:

2023 product revenue percentage:
Product category	Amount(NT$thousands)	Percentage
Touch control solutions	1,080,347	81.12%
Others	251,479	18.88%
Total	1,331,826	100.00%

3. The Company's current products (services): Primary products of the Company include touch sensor products and thin film transistor drive backplane products.

Touch sensor products include providing professional OEM touch sensors or modules, and providing touch sensor design and production. For thin film transistor backplane products, we provide professional OEM production of thin film transistor component glass, as well as design and production of thin film transistor glass.

4. New products (services) development plans:

The touch products produced by HannsTouch are mainly used with AMOLED displays in high-end smart phones and wearable products. They are characterized by thin line width, narrow border, and high transmittance. HannsTouch continues to develop medium and large size AMOLED touch sensors for tablets and notebooks. By leveraging existing basis of high-automation and high-precision equipment, the Company further develops optical fingerprint recognition sensor-equipped TFT drive backplane, which can be used as in-display sensors and biometric security control components. Furthermore, the Company launches flexible TFT components and Electronic shelf label (ESL) drive backplane products on its nextgeneration flexible process and technology platform, to diversify its product portfolio, eager to serve a wider range of customers.

(II) Industry overview:

Current and future industry prospects:
(1) Touch sensors:

HannsTouch focuses on AMOLED-mounted touch sensor application products. AMOLED's main application market is concentrated in smart phones and wearable consumer products, and it will also be introduced into IT product applications in the future. In 2023, international brands were turning to set 5G smartphones as their signature products, thus fortifying the 5G smartphone era. Looking at the global smart phone market in 2023, due to the unrelieved impact of inflation and high prices, and the overall economy has not yet recovered, the market demand remained weak, and the total demand for the mobile phone market for the whole year fell by -1%. In the Rigid AMOLED panel market, in addition to the low-price competition of LCD display technology, the demand for the Rigid AMOLED panel was greatly reduced after the second quarter of 2023, due to Chinese manufacturers seizing the market share with low-priced Flexible OLED and the excess Rigid AMOLED inventory. Although these two factors gradually eased after the fourth quarter, the annual growth rate of the market demand for the whole year was -21.4%. Looking forward to 2024, as the

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influence of inflation and the war factor gradually eased, the mobile phone market began to reverse upward. International brands have launched 5G mobile phones, which has confirmed the arrival of the 5G mobile phone era, and the panel technology has gradually shifted from the LCD panel technology to the AMOLED panel technology. As the flexible AMOLED price cut competition slows down, the demand for Rigid AMOLED mobile phones in 2024 is estimated The annual growth rate is over 20%; in addition, the introduction of AMOLED panels into tablet applications is also expected to exceed 13 million units, with an annual growth rate of over 150%, further expanding the application scope of AMOLED panels.

Purchase orders are gradually coming in for ESL products that HannsTouch has been working on for years. In 2021, NT$800 million was invested in production expansion in the year before the last, and production line expansion was completed in the first quarter of 2022, doubling the monthly production capacity to 10,000 pieces. With the backing of its clients, the Company was able to progressively gain market share, to accordingly reduce the impact of the throughput subject to seasonable variation on the uptime. It is expected that the ratio of sales on the new product platform will be increased later to optimize the allocation of throughput, make the best of the equipment throughput, optimize the sales and operational performance of the Company, and contribute to the revenue. In addition, for industrial control, automotive and other professional display and touch control markets, with continuous customer and technology cultivation, the revenue contribution in 2022 also shows a growing trend. To increase the company's development diversity, Jinn continues to move towards technology rooted Advance with diversified transformation and development.

(2) TFT drive backplane products:

The Thin Film Transistor (TFT) drive backplane has found a range of applications, from e-paper displays and medical treatment, to the most popular panel drive application in the industry - TFTLCD. Thanks to many years of development, TFT technology can provide alternative support to the rising e-paper industry, thus greatly increasing the application of traditional displays. Apart from display drivers, major panel makers have also ventured into the realms of sensing panels and array antennas. To enable multiple applications, pliable, thin, and irregular-shaped technologies of flexible panels are essential.

For the ESL, the electronic paper display technique is utilized. It is known for low power consumption, wide viewing angle, and readability, among other strengths, plus the radio control system, retailers can update contents of the labels on the shelf in real time; it makes commercial operation easy. As the ESL gets popular, the demand for the contents has been reached from a simple display of the price to also include specifications, traceability, and promotional information, etc. of the product. Therefore, it needs to become larger and larger in size. In the future, for the electronic paper display, except for e-books and ESLs, credits cards, smart cards, logistics labels, smart forms, smart medical care, sports devices, large display boards, and electronic white-boards will be where additional potential is on the market.

In 2023, the electronic label market has reached 380 million pieces, with an annual growth rate of more than 20%. As major distributors have successively introduced electronic label applications, the compound annual growth rate of the market is expected to be 10%. Therefore, the Company

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continues to develop public versions of products that can be promoted and introduced by multiple customers, and reduce customers' overall case initiation costs. In the fourth quarter of 2023, the Company will simultaneously engage in strategic joint development with system solution customers, and launch the development of multiple more competitive integrated products. In response to the market demand for three-color to four-color display, the Company will also gradually introduce fourcolor film applications to enhance market presence and increase market share and revenue.

Association between upstream, midstream, and downstream industry participants:
(1) Touch control solutions:
1- 1 Touch product structure:

The modular illustration of a touch panel is provided below. The primary materials are:

A: Cover lens
B: Sensor Glass or Sensor Film.
C: Flexible printed circuit (FPC) and IC.
D: Display unit (TFT-LCD or AMOLED)

==> picture [311 x 193] intentionally omitted <==

1- 2 Association among Upstream, Mid-stream, and Downstream of Touch Products:

==> picture [384 x 153] intentionally omitted <==

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

Glass substrate
Reinforced glass Conducting material Cover lens Flexible panel IC controller
Sensor glass TFT-LCD / AMOLED Control module
TFT-LCD / AMOLED
----- End of picture text -----

(2) TFT drive backplane:

They may combine the color filter to become TFT-LCDs or the FPL to become EPDs. The structure of the product is given below:

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

TFT drive backplane
TFT display Electronic paper display
----- End of picture text -----

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2-1 Structure of the TFT display:

The modular illustration of a TFT display is provided below. The primary materials are:

A: Color filter
B: Liquid crystal
C: TFT drive backplane
D: Drive IC
E: Flexible printed circuit (FPC)
F: Back light module

TFF-LCD Module Structure

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

Drive IC
FPC
Color filter
Liquid crystal
TFT back panel
Back light module
----- End of picture text -----

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2-2 Association among upstream, mid-stream, and downstream of the TFT display:

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

Glass substrate 玻璃基板 Electronic paper 電子紙驅動ICDrive IC FPC Protective film保護膜
薄膜電晶體製程TFT process
薄膜電晶體背板TFT back panel
Electronic paper display
電子紙顯示器模組module
----- End of picture text -----

2-3 Structure of the TFT display:
The modular illustration of a TFT display is provided below. The primary materials are:
A: Protective film
B: Electronic paper
C: TFT drive backplane
D: Drive IC
E: Flexible printed circuit (FPC)

==> picture [95 x 8] intentionally omitted <==

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

EPD Module Structure
----- End of picture text -----

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

Protective film 保護膜
FPC 驅動IC Drive IC Electronic paper 電子紙膠
薄膜電晶體背板 TFT back panel
EPD Module Structure
----- End of picture text -----

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2-4 Association among upstream, mid-stream, and downstream of the electronic paper:

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3. Product trend:

(1) Glass touch sensor for Rigid AMOLED:

Not only does it meet the market's demand for lighter, thinner, and narrower bezels, it is also committed to the development of the next-generation HIAA screen opening process technology, and has realized the full screen design with the largest screen ratio. In addition to meeting the ID design requirements for new mobile phones, the Company has also introduced corrosion-resistant special alloy lead materials to improve the reliability of next-generation mobile phone products and meet the use in a wider range of environments. At the same time, HannsTouch has deployed low-resistance process technology to successfully enter the application field of IT products to meet the needs of future end products.

(2) TFT driven backplane combined with e-paper display products:

In this area, the Company continues to expand its application to foldable products, digital whiteboards, and large display billboards, and successfully utilizes the static electricity-free characteristics of e-paper to reduce infrastructure works. With the advantage of high environmental adaptability, we lead the trend of the transformation of the display industry, and at the same time open up the application fields that the display technology has not touched before.

(3) Matured products:

With the growth of the emerging industry and the growth of new retail opportunities, the demand for e-tags of all sizes has increased tremendously. Electronic labels are not only used in logistics and distribution, but have also been successfully applied to enhance promotional effects, and are developing toward large sizes. After the pandemic, the popularity of distance learning has greatly increased the demand for educational tablets. E-paper has successfully entered the educational market due to its power-saving advantages and its suitability for long-term reading.

(4) Growing products:

HannsTouch's e-book extension products such as electronic smart office notebooks, bus signboards and advertising billboards, store merchandise billboards and other applications, as well as future POC products, such as airline suitcases hang tags, credit cards, smart education electronic whiteboards, are also showing strong growth momentum.

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Market competition:

The built-in projected capacitive input sensor developed by the Company primarily goes with the AMOLED panel and is a mainstream nowadays and in the future in the industry. HannsTouch, ranking among the two largest rigid touch sensor suppliers in the world, will continue to improve product reliability and price/performance ratio in the future.

The following are the competitive advantages of the Company in AMOLED touch sensors:

(1) High-precision exposure and other production process equipment realize the ultra narrow frame design superior to the process capability of ordinary glass touch manufacturers.
(2) Glass of 0.25t may be utilized directly to realize ultra-thinness, reduce the production cost, scale down the slimming process, thus making a friendly living environment and enhancing value-adding.
(3) The most advanced HIAA (Hole in Active Area) technology and special anti-corrosion alloy conductor material technology satisfy customers’ demand for high-end process technologies and highly reliable capabilities.

Through years of toil, HannsTouch has expanded the application of electronic paper display technology products from the traditional e-book reader to electronic shelf label (ESL) products and large-size application products. By successfully introducing e-paper-related TFT technologies, HannsTouch has been able to mass produce a variety of products of various sizes, from 1.6” to 10.2”,gaining itself a firm foothold in the e-paper supply chain.

The following are the competitive advantages of the Company in TFT drive backplanes:

  - (1) The G5.5 lines are advantageous in developing small products through cost-effective cutting.

  - (2) Design In capability outstripping that of industry peers.

  - (3) Low leakage and high charging rate to support the need for quick scan.

(III) Technological research and development:
Research and development expenditure for the most recent two years:

		Unit: NT$ thousand
Item	2022	2023
R&D expenses	32,765	27,916
Net sales revenue	2,405,963	1,331,826
R&D expenses as a percentage of net sales (%)	1.4%	2.1%

Technology and R&D overview:
(1) Technology and research and development

HannsTouch has always utilized the two major technical platforms, namely Touch sensor and Array TFT BP, which go with rigid and flexible substrates, to build technologies. Different product application technologies are developed as such, including those for smart watches, mobile phones, and tablets that vary in size ranges. At present, the main OCTA touch technology is applied to AMOLED displays used in high-end smartphones and wearable devices, feature fine line width, narrow bezels, and high

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transparency. At the same time, we continue to introduce new technologies to develop high-end HIAA (Hole in Active Area) and high screen-to-body ratio full screen technologies for use in mobile phone products to meet the needs of our main customers.

In addition, Jingjin also develops medium and large size touch products with low resistance, which are mainly used in medium and large size IT products such as notebook computers and tablets, and the sizes range from 9" to 14.6" high-end 3C AMOLED electronic products.

With the continuous improvement of technology, Jingjin has become the world's largest supplier of touch sensors for smart bracelets/watches, with a market share close to 90%.. We are also the only onestop touch integration and solution provider in Taiwan to develop, design, produce and sell glass touch sensors for AMOLED.

In terms of industrial product development, HannsTouch has successfully developed 15.6-inch and 21.5-inch touch products for industrial computer applications. This series of products has been put into mass production. At the same time, the high-end 20.1-inch and 24-inch aviation application touch products have also been verified by end customers and put into mass production. Based on the existing high-automation and high-precision equipment, HannsTouch has successfully further developed this technology platform in 2022, including flexible thin film transistor substrates and optical fingerprint identification sensors, to enhance the added value of products. In the future, we will also integrate the above technologies, develop new optoelectronic and medical sensor technologies, continue to deepen the technology field, and achieve diversified development to serve more diverse customers.

(2) Patent application

The patent layout is divided into three aspects: touch panel design patents (TP related patents), touch application patents (appliance), and display related patents. The patents held cover Taiwan, China, and

==> picture [419 x 93] intentionally omitted <==

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

Certification status Total
TW CN US Total
New model
14 12 N/A 26
2018
TW CN US Total
Invention
19 24 38 81
----- End of picture text -----

the United States. This will help HannsTouch maintain its leading position in technological innovation and market competition. Relevant information is shown in the table below.

The Company regularly submits intellectual property-related matters to the Board of Directors for report every year, and proposes improvement measures in response to the directors' suggestions. For more details on intellectual property management program and operation, please see the Company website/Investor/Corporate Governance/Corporate Social Responsibility.

(3) Future R&D plans and expected expenses

The Company will continue supporting its touch control solutions with the following research and development projects:

projects:
Project	R&D approach
Large-scale versus AMOLED product development	Joint research and development with customers

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==> picture [421 x 258] intentionally omitted <==

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

Project R&D approach
Joint research and development with
Development of optical fingerprint identification sensor products
customers
Joint research and development with
OLED a-Si driving backplane
customers
Joint research and development
Development of flexible charge-coupled device
with customers
Joint research and development
Development of transparent projection molds
with customers
Development of flexible electronic paper TFT driving back panel Spontaneous research and
technologies development
Development of energy efficient electronic paper TFT driving back Spontaneous research and
panel technologies development
5G Antenna Industry-academia collaboration
----- End of picture text -----

The expected investment in R&D expenses for 2024 is no less than about 3% of the annual revenue. The main factors affecting the R&D plan in the future are the R&D capabilities of the R&D team, customer needs and market trends. The Company will continue to develop outstanding R&D talent and proactively put in R&D resources in the future in order to cope with the constantly changing market and technological dynamics and to improve the competitive advantages of the Company.

(4) Financial impacts and response measures in the event of changes in local and foreign regulations

The Company has a Legal & IPR Center, whose responsibility is to collect and analyze domestic and foreign market information and legal changes, in order to propose corresponding measures in a timely manner to respond to important domestic and foreign policies and legal changes. So far, these changes have not yet had a significant impact on the Company's financial operations.

(5) Financial impacts and response measures in the event of technological or industrial changes

As the application of AMOLED in smart phones continues to expand, the application also extends from flagship phones to mid- and high-end models. The touch technology used by Rigid AMOLED is almost 100% based on the On Cell structure. However, due to the surplus in the throughput of LTPS TFT-LCD and the improvement of flexible AMOLED capacity and yield, Rigid AMOLED will AMOLED price competition has slowed the growth rate of the company. For this part we have taken the following measures:

A. Actively conduct R&D on the Rigid AMOLED On Cell touch technology to occupy a favorable position in the future market development and demand in advance. At the same time, we will continue to develop non-mobile applications and optimize cost competitiveness.
B. Besides capacitive touch products, through new technologies and processes that are developed, the Company has established the TFT back panel product utilization platform that may be widely applied to TFT-LCDs or electronic paper displays, etc.
C. Constantly build new technologies and process platforms and continue to provide new technologies and products to be utilized in order to meet the demand on the market and become a world-class partner.

Through these proactive measures, HannsTouch is committed to responding to the challenges posed by

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changes in technology and industry changes to ensure the continuous and stable development of the Company's finance and business.

(IV) Long and short-term business plans:
Short-term business plans:
- (1) HannsTouch is primarily a professional manufacturer of touch sensors meant primarily to go with the AMOLED and G5.5 OCTA touch sensors. The customers it sells to are international big brands whose products range from smart watches, mobile phones, tablets, and notebook computers that vary in size.
- (2) For rigid AMOLED OCTA touch sensors, besides production corresponding to G5.5, the scope of sales to the corresponding generation has been expanded and enhanced to a corresponding capability that matches G4.5 and G6.
- (3) The Company is committed to gain share of the market for display products incorporating TFT drive backplanes and electronic paper. Aside from continuously improve the yield of multiple mass produced 1.6” ～ 10.2” products, the Company is keen to innovate technologies and optimize process capability, to provide one stop service tailored to customers’ needs.
Long-term business plans:
- For the development of emerging industries such as the Internet of Things and Industry 4.0 in the future, HannsTouch keeps track of the trends, too, by developing new technologies and processes and creating new product platforms. The Company develops multiple technologies at the same time:
- (1) For the deployment of products, besides steadily maintaining the existing AMOLED OCTA high-end touch sensors, market development is focused also on professional fields such as industrial control and car-borne. The high-generation production technique makes the best of the cost competitive advantages and win recognition on the market. The company is also committed to the provision of Total Solutions, aspiring to aid customers in the professional application domain.
- (2) By creating new product lines, the scope of utilization for non-touch sensors is expanded. The TFT drive backplane technology has been successfully developed and may be applied to TFTLCDs and go with the TFT drive backplane of the electronic paper. The international e-paper industry is flourishing in light of the surge of digitalization and ESG sustainable development. By being power-efficient and having a lower carbon-footprint, e-paper has enabled items like e- paper tablets, electronic shelf labels, and electronic notebooks to rapidly gain traction in consumer and commercial markets. Sectors such as retail, logistics, and warehousing have shown a marked eagerness in embracing ESLs. Additionally, the fast-paced progress of color e- ink screen technology has enabled e-paper products to transition from black and white to colorful, providing a major impetus for the e-paper market. HannsTouch is committed to fulfilling customers' innovation requirements by offering total solutions for e-paper drive backplanes.
- (3) Develop the flexible TFT drive backplane technology to maximize the scope of utilization in the said field.
- (4) Apply the successfully developed TFT drive backplane technology to the optical fingerprint

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sensor in order to replace the existing fingerprint identification technology that cannot be applied to a large area. Current screen fingerprint identification technology primarily includes the optical fingerprint identification solution and the ultrasound fingerprint identification solution. The ultrasound solution, in particular, is known for its limited penetration distance and the relatively non-competitive price because of the full screen that is used. Optical fingerprint identification is not only compatible with the rigid/flexible OLED screen but also more competitive given the larger area utilizing the TFT technology.

(5) The Company will partner with various clients and participate in different programs to further develop other bio-sensing components and optical structure applications.

II. Market, production and sales overview

(I) Market analysis:
Locations where products are mainly sold:

			Unit: NT$ thousand	Unit: NT$ thousand
Year Sales destination	2022		2023
	Amount(Note 1)	%	Amount(Note 2)	%
Domestic sale	334,527	13.90%	351,525	26.39%
Export sale	2,071,436	86.10%	980,301	73.61%
Total	2,405,963	100.00%	1,331,826	100.00%

Note 1: This amount includes the sales income from the continuing operating department amounted to NT$2,405,963 thousand whilst from the discontinued department amounted to NT$0.00.

Note 2: This amount includes the sales income from the continuing operating department amounted to NT$1,331,826

thousand whilst from the discontinued department amounted to NT$0.00.

Market share and future supply, demand growth:

Primary products of the Company are touch sensors that go with G5.5 glass AMOLED. A major customer in this field is located in Korea. HannsTouch is its second largest supplier. With a robust customer base and demand, HannsTouch built its equipment that is capable of supporting G4.5, G5.5, and G6 production lines and is devoted to building a manufacturing facility meant exclusively for the production of AMOLED OCTA professional touch sensors to become the only of its kind in the world that can supply AMOLED production lines of different generations at the same time and secure a key role in the supply chain on the AMOLED OCTA market.

In order to reduce the highs and lows in the seasonal demand for consumer mobile phones on the market, to improve the operational performance, and to secure steady profitability over the long term, on the basis of existing highly automated and highly precise equipment, new IT products and process technologies are developed; competitive and cost-effective TFT drive backplane technology is provided; various related product platforms are created; and new additional value is provided for the customers.

In addition, through resources and collaboration inside and outside the Group, the width of product application is enhanced; flexible touch sensors, industrial control and car-borne products and technologies are developed; new professional display application fields are explored; and more diversified technologies,

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products, and services are provided. The goal is to provide overall solutions and to become a professional sensor and display solution provider that provide new product portfolios and improve profitability.

3. Competitive advantage:

(1) High-quality automated professional touch production line:
- One of the few fully automated professional touch-related producers in the world that adopts the equipment equivalent to that adopted at a TFT plant and automated production line design throughout the plant to ensure that the high precision requirement of touch sensors with AMOLED is fulfilled and to accordingly provide customers with reliability and steady supply assurance. The Company concentrates on complex innovative glass touch sensor technology. In response to the rapidly changing demand on the market, production line management continues to be reinforced. The small-

quantity diversified production model improves the responsiveness of customers on the market.

(2) Technical and cost-competitive advantages:

Direct mass production and devotion of G5.5 0.25T glass, fine line width technology, mass production of 0.6 mm narrow-frame products, 92% high-penetration technology, and realization of the utilization of high-end AMOLED OCTA. The Company is capable of integrating design and development of TFT sensors without bearing the additional burden of CF/Cell/Module factories, thus providing cost benefits and avoiding any competitive ties with our customers, allowing us to easily form long-term partnerships with our customers. Manufacturing high-quality products and constantly improving yield are fundamental commitments of HannsTouch to its customers. Besides constant optimization of the production configuration and production process parameters, the throughput is expanded, too, to better optimize the production efficacy and to enhance the overall competitive advantages. Besides the existing touch technology, process technologies that are superior to those of other panel manufacturers are being developed so that the new product platform is competitive and advantageous to secure new business opportunities for it to be applied on the market. The Company shall develop relationships with suppliers of new materials to ensure diversification in high quality and steady supplies, reduce production cost and create better profitability. With more experience and capabilities

in maintaining its own production facilities, the Company is able to achieve proper cost control.

(3) Different technologies and product platforms, increased product portfolios, and enhanced additional value:

On the basis of existing highly automated and highly precise equipment, the TFT process technology and product platform have been successfully developed and such a technical platform was further developed with the flexible TFT drive backplanes and optical fingerprint detection sensors for enhanced additional value of products. Going forward, we will combine the technologies already developed, create new medical sensor technologies, stay at the forefront of the technical field, focus on product design that gives us an edge, and ensure efficient after-sale service, with the aim of serving a wider range of customers.

4. Opportunities, threats, and response measures:

(1) Affected by the market, AMOLED will focus on improving product value and competitiveness: HannsTouch is the second largest rigid AMOLED touch supplier in the world. Growths will continue with the increased yield rate of the AMOLED plant, throughput, and demand for IT products. Rigid AMOLEDs, however, are faced with low-price competition due to surplus in the throughput of LTPS TFT-LCDs. In addition, rigid OLEDs are being increasingly replaced by low-cost flexible OLEDs.

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HannsTouch will expand its advanced collaboration with AMOLED customers, continue to develop technologies that combine other features, and venture into the market for medium and large size OLED panels, to improve the value and competitive advantages of products.

(2) Roll out multiple product lines and become a provider of sensor and TFT drive backplane solutions. In order to reduce the highs and lows in the seasonal demand for consumer mobile phones on the market, to improve the operational performance, and to secure steady profitability over the long term, on the basis of existing highly automated and highly precise equipment, the Company will concentrate on enhancing high-end glass touch sensor technology, innovating new process and product technology, taking advantage of the promising e-paper supply chain, building a unique product platform, and diversifying its business reach, in addition to fulfilling the idea of manufacturing service to aggressively diversify its transformation.
(II) Main product applications and production processes: 1. Glass Sensor

2. TFT back panel

==> picture [192 x 244] intentionally omitted <==

(III) Supply of main materials:

The main products of HannsTouch are touch sensors and TFT backplanes. There are more than 22 kinds of materials directly and indirectly used by the Company, such as glass substrates, positive and negative photoresists, and various chemicals. The material suppliers we cooperate with are all those with long-term cooperation, with stable long-term supply capacity, and most of them are local manufacturers in Taiwan. The material dispatching can be responded immediately. The overall material supply situation is normal at present. At the same time, to cooperate with the introduction of new products and technologies, apart from grasping the key materials, Jing-Jin continues to develop new materials with material suppliers to ensure that the supply of new materials can be matched with the increase in production capacity when new technologies are put into mass production.

(IV) List of main suppliers (buyers):

Names of customers with 10% or more purchases (sales) and the current value and ratio of the purchases (sales)

127

in any of the past two years. Please also describe the reason for the increase or decrease. ：

Main suppliers in the last two years

Unit: NT$ thousands; %

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2022 2023
As a As a
percentage Relationship percentage Relationship
Name Name
Item Amount of annual net with the Amount of annual net with the
(Note) (Note)
purchases issuer purchases issuer
(%) (%)
Company 141,086 Company 113,161
1 22.36% Nil 27.49% Nil
A B
Company 124,384 Company 39,532
2 19.71% Nil 9.60% Nil
B D
4 Others 365,492 57.93% - Others 298,449 72.51% -
Total Total 630,962 100.00% - Total 411,610 100% -
----- End of picture text -----

Note: List the names of customers accounting for at least 10% of the total purchases over the past two years and the value and ratio of their purchases. When the names of suppliers or counterparts may not be disclosed as agreed in contracts are individuals and non-related parties, however, they may be replaced with a code.

Main suppliers in the last two years

Unit: NT$ thousands; %

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

2022 2023
As a As a
Relations Relations
Name percentage of Name percentage of
Item Amount hip with Amount hip with
(Note) annual net (Note) annual net
the issuer the issuer
sales (%) sales (%)
1 Company A 1,128,983 46.93% Nil Company B 372,605 27.98% Nil
2 Company B 620,062 25.77% Nil Company A 347,446 26.09% Nil
3 Others 656,918 27.30% - Others 611,775 45.93% -
Total Net sales 2,405,963 100.00% - Net sales 1,331,826 100.00% -
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Note: List the names of customers accounting for at least 10% of the total sales over the past two years and the value and ratio of their sales. When the names of customers or counterparts may not be disclosed as agreed in contracts are individuals and non-related parties, however, they may be replaced with a code.

The increase or decrease in purchases and sales is mainly due to the decrease in customer demand, resulting in a relative decrease in purchases.

(V) Production volume and value in the last two years:

Unit: pieces; NTD thousands

128

==> picture [462 x 147] intentionally omitted <==

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

Annual 2022 2023
production
volume/value Production Production Production Production
Production value Production value
Primary capacity volume capacity volume
product
Touch control 1,242,950 1,633,086 621,532 1,107,424
- -
solutions
Total - 1,242,950 1,633,086 - 621,532 1,107,424
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(VI) Sales volumes/values in the past two years

Unit: pieces/sets; NTD thousands

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

Annual sales 2022 2023
volume/value Domestic sale Export sale Domestic sale Export sale
Primary product Volume Value Volume Value Volume Value Volume Value
Touch control
20,738 27,091 1,193,400 2,071,436 66,078 100,046 622,710 980,301
solutions
Others - 307,436 - - 0 251,479 0 0
Total 334,527 2,071,436 66,078 351,525 622,710 980,301
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Note: This table shows the continuing operating departments and the discontinued departments.

III. Employee information in the last 2 years up to the publication date of this annual report

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Year-to-date through
Year 2022 2023
2024.02.29
Manager and 30
32 30
above
Employee Production line 92
2018 95
count workers
General staff 176 153 147
Total 315 278 269
Average age 36.5 37.1 37.2
Average years of service 5.05 5.61 5.66
Doctoral Degree 1.90% 1.80% 1.86%
Masters Degree 33.02% 32.37% 32.71%
Bachelors Degree 53.33% 54.32% 53.53%
Academic
Senior high
background 10.79% 10.79% 11.15%
school
Below senior high
0.95% 0.72% 0.74%
school
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129

IV. Contribution to environmental protection

Air pollution control and water treatment equipment have been functioning consistently ever since the Company constructed its plant facilities in Southern Taiwan Science Park (STSP) in 2003. The Company continues to implement environmental protection and green product management practices to this date for compliance with environmental regulations and customers' requirements, and is actively involved in environmental protection initiatives. Below is a description of various accomplishments the Company has achieved in this regard:

Enforcement of environmental management and enhancement of environmental performance: The Company completed the ISO 14001:2015 environmental management system revision and renewal in September 2018, and continued to obtain the ISO 14001:2015 validity certificate in 2023. In order to improve the environmental performance management, we obtained the ISO 14064:2018 Greenhouse Gas Verification Statement and ISO 50001:2018 certificate successively in 2023. Upholding the spirit of improving the environmental performance management, we regularly perform environmental audits and follow-up management.
Waste management:
The Company has been enforcing waste recycling practices in response to the government's green and environmental protection initiatives. Currently more than 95% of waste produced from plant is systematically recycled and reused, which will effectively reduce environmental burden and depletion of resources associated with the production process.
Capacity enhancement for pollution control equipment:
As part of the Company's corporate responsibilities, all existing air pollution control and water treatment equipment are serviced and tested regularly to ensure that they operate at optimal efficiency. The Company also makes ongoing improvements to the environment policy, including pro-active enhancements to wastewater recycling and air pollution control equipment, for the sustainability of its business.
Compliance records:

For the SRS recovery system construction project in 2023, the runoff wastewater pollution reduction plan was not checked for approval before construction, which violated Article 18 of the Water Pollution Control Act and Article 10, Paragraph 1 of the Water Pollution Prevention and Control Measures and Testing and Declaration Management Regulations and was fined by the competent authority.

HannsTouch is dedicated to controlling pollution and reducing industrial waste, and strives to promote sound corporate image and raise competitiveness in the field of environmental protection. The Company has adopted relevant measures to support green product management in response to EU's and customers' green product requirements, and will address the global warming phenomenon through introduction of greenhouse gas reduction/control systems in the future.

Payment of pollution prevention expenses in 2023:

Unit: NT$

				Unit: NT$
Category of pollution prevention expense	Q1	Q2	Q3	Q4
Air pollution prevention expense
	287,035	346,452	197,098	110,007

Soil pollution prevention expense
	9,277	8,388	7,283	3,081

130

Water pollution prevention expense	1,656,558
		1,327,146	1,733,839	1,846,349

Investment in pollution prevention equipment, the purpose of equipment, and possible benefits:

Unit: NT$ thousand

==> picture [450 x 73] intentionally omitted <==

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

Expected
Cost of
Name of equipment Count date of Purpose and expected benefits
investment
acquisition
Improve the efficiency of CVD dust collectors to
CVD dust collector October 12,
1 3,057 reduce the emission of dust particles from CVD
filter replacement 2023
exhaust gas into the atmosphere.
----- End of picture text -----

Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand	Unit: NT$ thousand
Name of equipment Count Expected date of acquisition Cost of investment Purpose and expected benefits
CVD dust collector filter replacement 1 October 12, 2023 3,057 Improve the efficiency of CVD dust collectors to reduce the emission of dust particles from CVD exhaustgas into the atmosphere.

Process exhaust gas treatment equipment	6	November 15, 2023	8,000	1. Replacement of high-efficiency process exhaust ga treatment equipment to treat the CF4 proces exhaust gas generated by in-house production t reduce greenhouse gas emissions, reduce futur environmental risks and costs, and at the same tim comply with the Company's ESG manageme policy. 2. The process exhaust gas treated by this scrubb equipment can reduce carbon emissions b 2,352.86 (tons/year).	n e

V. Labor-management relations

(I) Availability and execution of employee welfare, education, training, and retirement policies. Elaborate on the

agreements made between employers and employees, and the protection of employees’ rights:

Employee welfare measures:

Employee welfare measures are arranged by both the Company and the Employee Welfare Committee. Together, they provide employees with substantive and diverse benefits as well as the work environment needed to inspire morale and promote harmonic labor-management relations:

(1) Welfare offered by the Company:

Birthday cash, Labor Insurance, National Health Insurance, group insurance, regular health checkup, meal subsidy etc.

(2) Employee Welfare Committee:

Festive cash/voucher, wedding/funeral/celebration/childbirth/hospitalization subsidy, emergency

allowances, annual employee travel subsidy, store discount, employee relations activity subsidy etc.

Employee Education:

The Company has implemented “Training Management Procedures” to support the creation of an employee

training system and diverse learning channels that help improve employees' skills and develop the talents needed by the Company. Employees are trained and certified according to legal requirements.

Employee training:
(1) Orientation:

Includes basic training, E-Learning courses, and orientation to help new recruits adapt to the company

culture and work content as soon as possible. New employee training in 2023 (completed): 42

131

employees and 14 supervisors.

(2) Internal training:

The Company makes yearly plans to bring employees a variety of training courses that are suitable

for their career development. Instructors from within or outside the organization are invited to assist

employees with skill and career development. Professional, managerial, and regulatory courses are designed.

(3) External training:

Employees are given opportunities, subject to line managers' recommendation, to participate in training courses organized by external institutions, where they are able to further expand their career vision and improve professional skills to the next level.

(4) All new hires of the Company sign the “Employee Code of Ethics and Integrity Commitment” upon

arrival, and the staff of the Human Resources Department will immediately promote the importance

of ethical management and relevant discipline for violations; and on the e-Learning platform, promote

“Prohibition of Offering or Acceptance of Improper Benefits.”

Retirement system and execution:

The Company's employee retirement system is based on the “Labor Standards Act” and the “Labor Pension

Act”. The “Employee Retirement Management Regulations” of the Company are formulated to regulate

the appropriation and payment of employee pension in detail.

(1) As of the end of 2023, the number of employees eligible for the retirement system of the Labor Standards Act but not yet settled: 5, and the company's monthly contribution ratio is 2%. Number of employees eligible for the Labor Pension Act: 278, with employer's monthly contribution

at 6%, for a cumulative total of NTD 11,087 thousand.

(2) Procedures and conditions for employees to apply for retirement:
Voluntary retirement: Employees who meet the qualifications for voluntary retirement under the “Labor Standards Act” or the “Labor Pension Act” may apply for voluntary retirement in accordance with the Company's “Employee Retirement Management Regulations” one month prior to retirement. They may formally retire upon the completion of their work transfer.

Compulsory retirement: Those who meet the conditions for compulsory retirement under the “Labor Standards Act” or the “Labor Pension Act” may be officially retired by the employer after one month prior to the retirement date, the employer may complete the application form, complete the application according to the approved authority and the work is handed over.

(3) The Company currently does not have a pension management committee.
Enforcement of labor agreements and employee rights:

The Company continues to listen to what their employees have to say and respond to their concerns and communicate with them in real time through a variety of employee opinion reflection channels for the promotion of labor-management harmony and for accomplishing the win-win goal for both the enterprise and its employees. The bilateral communications that are available include:

(1) The meeting between supervisors at all levels and their colleagues, such as the monthly Board of Directors’ meeting, the quarterly presidential meeting, and the care meeting for new hires.
(2) Quarterly labor-management meetings where the general corporate operational status is explained to employees; Welfare Committee routine meetings where employees are invited to take part in the discussions about employee benefits.
Establishment of employee behavioral and moral principles:

132

The Company has “Work Rules” and “Employee Reward and Disciplinary Policy” that provide employees

with a clear understanding of their rights and behavioral guidelines that they are bound to obey.

Material insider information procedures:

The Company's “Material Insider Information Handling and Insider Transaction Prevention Procedures”

have been published on the internal documentation database; key points are being conveyed to all employees, for which they are required to comply to avoid insider trading.

Work environment and implementation of employee safety and protection measures:
(1) Safety and health organization and its functions

The Company has a Work Safety Office created directly under the President's Office. Heads of plant divisions, offices, accountable departments, and workers' representatives are invited to participate in quarterly “Safety, Health, and Environmental Protection Committee Meetings,” where they discussed various issues concerning performance goals, project progress, internal/external communication, environment/safety/health management plan, health promotion, and prevention of occupational illness.

(2) Occupational safety and health management system

The plant was certified by OHSAS 18001(Occupational Safety and Health International Management System) and CNS 15506 (Taiwan Occupational Safety and Health Management System, the original TOSHMS) with its occupational safety and health management system and was ISO 45001 Occupational Safety and Health Management System certified in 2020 instead of the original OHSAS 18001 management system (expiration date: October 14, 2024). Practices such as goal-oriented management, risk identification and assessment, monitoring, testing, consultation, and communication have been adopted to prevent accident, minimize risk of hazard, and ultimately improve safety of the work environment and employees.

(3) Implementation of emergency response system and environment, safety, and health training
The Company has developed a comprehensive emergency response plan that covers a broad range of risks including fire, chemical and gas leakage, earthquake, flood, and malfunction of pollution control equipment. Drills are organized to familiarize employees with procedures of the emergency response plan and thereby minimize injuries and property damage in case of emergency. Meanwhile, seminars on topics such as use of protective gear, risk identification/assessment, chemical/gas hazard and protection, use of fire safety equipment, prevention of occupational illness, and health promotion are being organized on an ongoing basis to promote general safety and health knowledge as well as professional skills.
(4) Promotion of employee health

In order to effectively prevent against disorders triggered by abnormal work loads, the Company ensures safety and physical and mental health of employees while at work and plans a complete health management solution that covers annual period health checkup and various health promoting dynamic activities, risk case identification and management, abnormality tracking and management, mental health management, maternal health protection, assignment of tasks, and adaptive adjustment, etc. In addition, maternal health protection and management are provided to working moms.

(5) Ongoing monitoring and audit

For the safety of the plant, the Company not only performs thorough tests at various environments including workers' operating environment as required by law, but has also adopted robust audit

133

procedures to support routine inspection, inspection of high-risk operations, and management inspection. The Company is also audited by third parties or customers from time to time.

(II) Actual or estimated losses arising as a result of employment dispute in the last year up to the publication date of this annual report, and any response measures taken:
The Company has maintained good labor-management relations since it was incorporated on September 18, 1999, which owed largely to the presence of open communication channels including labor-management meetings and policy seminars. The management has very high respect for workers' opinions, needs, and issues, and strives to provide the best solution and assistance possible. For these reasons, the Company has never encountered any major employment dispute since it was founded, and expects extremely low likelihood of suffering losses from employment dispute in the future, given its productive labor-management interactions.

VI. Information security management

(I) Information security risk management framework, information security policies, concrete management plans and resources invested into information security management:

In order to implement information security management, the Company has formulated an “Information Security Policy” and related operating rules to implement information work plans, and strictly manage the use and security maintenance of data. Establish a complete network and computer security protection system, such as firewall, email cloud ATM protection, anti-virus software, electronic file management, etc., to control personnel access rights and records, and reduce the company's information security risks. The IT Division will also regularly organize information security training and promotion. The actions are as follows:

Information security control for computer terminals: Controls have been applied to processes such as system development, acquisition, maintenance, and processing as well as equipment including computer terminals, software, and network systems. Care has been taken to ensure that all operations conform with information security and legal requirements.
Management of confidential information: Protection of core technology and operational information is essential to strengthening the Company's competitive advantage. The Company requires all sensitive files to be encrypted. Every year, from Q1 to Q4, information security digital courses include giving employees examination regularly to test their comprehension on the topic so as to facilitate their understanding of external threat of information security. These measures can further promote employee awareness on information security, and implement information security and personal information protection, thus reducing information security risks of the Company.
IT system planning, hardware/software implementation and maintenance, database backup and recovery, and system security/protection/control: The Company adopts the use of virtual servers to reduce the number of physical servers. Doing so not only provides benefits in terms of environmental protection, energy conservation, and low maintenance cost, it also complements and enhances the Company's disaster prevention, information security, monitoring, reporting and exceptions management. The log server will be launched in 2023 and continue to seal the logs of key equipment to strengthen audit capabilities.
Remote backup mechanism: To strengthen the physical information security structure, the Company has established remote backup equipment in the Neihu office. Data from Tainan plant is copied and sent to the remote backup system in the Neihu office daily at a regular time. If a major disaster occurs, the Company is able to complete the reconstruction program of information system within 12 hours.

134

(II) In the most recent year up to the publication date of the annual report, the total losses incurred by the company due to major information security incident, potential influences and countermeasures. If an estimation cannot be made, the reason should also be disclosed: Nil.

VII. Major contracts

List the parties, main details, restrictive clauses, and duration of any material contractual arrangement (that are relevant to shareholders' interest), such as supply/sale agreement, technological collaboration contract, construction contract, long-term borrowing contract etc., that is currently effective or had expired in the last year:

==> picture [493 x 329] intentionally omitted <==

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

Nature of Contract Restrictive
Parties involved Main details
contract duration clauses
May 21, 2018 ~ To pay off early real estate mortgage loans with the Mega
Land Bank of
Financing February 21, Bank and MEGA BILLS from 2016 and to reduce interest Nil
Taiwan
2033 expenditure.
October 28, To support the purchase of equipment, machinery and
Financing Bank of Taiwan 2021 to October peripheral equipment for the expansion of new Nil
28, 2026 production capacity, totaling NT$567.77 million.
Some of the floors and the portion of land they are
15 years from
Lease Glorystone Inc. assigned of the building on Keelung Road are sublet to Nil
the start date
the tenant for running general hotels.
10 years from
JustCo (Taiwan Some of the floors of the building on Keelung Road are
Lease the delivery Nil
Onshore) Ltd. sublet to tenants to be used as offices.
date
JustCo (Taiwan 8 years from the Some of the floors of the building on Keelung Road are
Lease Nil
Onshore) Ltd. delivery date sublet to tenants to be used as offices.
Chang Hwa May 3, 2023 - The limit of disbursement was NTD 50 million, in order
Financing Nil
Commercial Bank May 2, 2028 to comply with the credit contract.
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135

Six. Financial Overview

I. Summary balance sheet and statement of comprehensive income for the last 5 years

(I) Summary consolidated balance sheet and consolidated statement of comprehensive income - IFRS-compliant

Summary consolidated balance sheet - IFRS-compliant

Unit: NT$ thousand

==> picture [443 x 595] intentionally omitted <==

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

Year Financial information for the last 5 years (Note 1)
2019 2020 2021 2022 2023
Item
Current assets 1,306,420 5,683,930 4,786,097 3,293,955 2,829,158
Property, plant and 10,862,154 10,549,981
14,132,137 10,281,968 9,719,302
equipment
Investment property - - -
- - -
net
Intangible asset 71,105 17,377 15,189 23,416 19,294
Other assets 1,532,273 866,012 1,267,007 1,437,640 1,458,496
Total assets 17,041,935 17,429,473 16,618,274 15,036,979 14,026,250
Before 1,932,241 896,743
Current 1,371,489 726,128 790,041
dividend
liabilities
After 2,246,951 1,179,175
(Note 2) 1,653,921 726,128 790,041
dividend
Non-current 5,786,544 4,773,595
6,030,615 3,929,633 3,806,457
liabilities
Before 7,718,785 5,670,338
Total 7,402,104 4,655,761 4,596,498
dividend
liabilities
After 8,033,495 5,952,770
(Note 2) 7,684,536 4,655,761 4,596,498
dividend
Equity attributable to
owners of the 9,379,979 9,441,094 10,350,995 9,766,854 8,870,720
Company
Share capital 8,069,485 8,069,485 8,069,485 8,069,485 8,020,105
Capital reserves 312,925 312,925 312,925 312,925 313,740
Before 1,065,141 1,750,829
Retained 997,569 1,493,169 593,394
dividend
earnings
After 750,431 1,468,397
(Note 2) 715,137 1,493,169 593,394
dividend
Other equity items - (6,457) 217,756 (90,461) (56,519)
Treasury stock - - - (18,264) -
Non-controlling 259,852 269,594 596,941 614,364 559,032
----- End of picture text -----

136

equity	equity
Total shareholders' equity (Note 2)	Before dividend	9,639,831	9,710,688	10,947,936	10,381,218	9,429,752
	After dividend	9,357,399	9,395,978	10,665,504	10,381,218	9,429,752

Note 1: All financial information from 2019 to 2023 has been audited by CPAs.

Note 2: The proposed amount was approved and resolved by the Board of Directors on February 27, 2024.

137

Summary consolidated statement of comprehensive income - IFRS-compliant

Unit: NT$ thousand

==> picture [441 x 605] intentionally omitted <==

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

Year
Financial information for the last 5 years (Note 1)
Item 2019 2020 2021 2022 2023
Operating revenues 4,403,816 3,086,399 3,775,822 2,405,963 1,331,826
Gross profit 1,661,900 711,375 1,298,769 133,193 (819,676)
Operating profit 1,260,940 418,842 1,003,305 (96,744) (1,065,640)
Non-operating
(83,896) 43,778 278,680 110,982 118,074
income and expenses
Pre-tax profit 1,177,044 462,620 1,281,985 14,238 (947,566)
Current net income
from continuing 984,518 359,746 1,047,945 29,265 (951,167)
operations
Loss from
discontinued - - - - -
operations
Current net income
984,518 359,746 1,047,945 29,265 (951,167)
(loss)
Other comprehensive
income 1,442 (6,457) 224,213 (308,217) 33,942
(net, after-tax)
Total comprehensive
income for the 985,960 353,289 1,272,158 (278,952) (917,225)
current period
Net income
attributable to owners 1,018,057 350,004 1,000,398 24,772 (899,775)
of the Company
Net income
attributable to non-
(33,539) 9,742 47,547 4,493 (51,392)
controlling
shareholders
Comprehensive
income attributable to
1,019,499 343,547 1,224,611 (283,445) (865,833)
owners of the
Company
Comprehensive
income attributable to
(33,539) 9,742 47,547 4,493 (51,392)
non-controlling
shareholders
Earnings per share
1.35 0.43 1.24 0.03 (1.12)
(NT$)
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Note 1: All financial information from 2019 to 2023 has been audited by CPAs.

138

(II) Summary standalone balance sheet and standalone statement of comprehensive income - IFRS-compliant

Summary standalone balance sheet - IFRS-compliant

Unit: NT$ thousand

==> picture [448 x 655] intentionally omitted <==

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

Year Financial information for the last 5 years (Note 1)
Item 2019 2020 2021 2022 2023
Current assets 1,075,795 5,477,964 3,837,818 2,327,209 1,947,696
Property, plant and
7,986,314 4,615,811 4,383,563 4,182,984 3,652,294
equipment
Investment property -
5,729,096 5,810,132 5,762,387 5,727,331 5,690,258
net
Intangible asset 22,985 17,128 14,229 22,954 18,952
Other assets 1,186,003 1,203,193 1,986,803 1,974,111 1,972,685
Total assets 16,000,193 17,124,228 15,984,800 14,234,589 13,281,885
Before
Current 1,196,734 1,896,591 867,339 693,091 742,130
dividend
liabilities
After
(Note 2) 1,479,166 2,211,301 1,149,771 693,091 742,130
dividend
Non-current
5,423,480 5,786,543 4,766,466 3,774,644 3,669,035
liabilities
Before
6,620,214 7,683,134 5,633,805 4,467,735 4,411,165
Total dividend
liabilities After
6,902,646 7,997,844 5,916,237 4,467,735 4,411,165
dividend
Equity attributable to
owners of the 9,379,979 9,441,094 10,350,995 9,766,854 8,870,720
Company
Share capital 8,069,485 8,069,485 8,069,485 8,069,485 8,020,105
Capital reserves 312,925 312,925 312,925 312,925 313,740
Before
Retained 997,569 1,065,141 1,750,829 1,493,169 593,394
dividend
earnings
After
(Note 2) 715,137 750,431 1,468,397 1,493,169 593,394
dividend
Other equity items - (6,457) 217,756 (90,461) (56,519)
Treasury stock - - - (18,264) -
Non-controlling
- - - - -
equity
Total Before
9,379,979 9,441,094 10,350,995 9,766,854 8,870,720
sharehol dividend
ders' After 9,097,547 9,126,384 10,068,563 9,766,854 8,870,720
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139

equity	dividend
(Note 2)

Note 1: All financial information from 2019 to 2023 has been audited by CPAs. Note 2: The proposed amount was approved and resolved by the Board of Directors on February 27, 2024.

140

Summary standalone statement of comprehensive income - IFRS-compliant

Unit: NT$ thousand

==> picture [434 x 398] intentionally omitted <==

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

Year
Financial information for the last 5 years (Note 1)
Item 2019 2020 2021 2022 2023
Operating revenues 4,248,959 2,929,250 3,556,043 2,255,129 1,253,509
Gross profit 1,567,451 634,945 1,169,610 75,409 (807,682)
Operating profit 1,310,962 422,504 932,450 (95,279) (973,303)
Non-operating
(93,589) 35,530 294,442 103,088 73,527
income and expenses
Pre-tax profit from
1,217,373 458,034 1,226,892 7,809 (899,776)
continuing operations
Current net income
from continuing 1,018,057 350,004 1,000,398 24,772 (899,775)
operations
Loss from
discontinued - - - - -
operations
Current net income
1,018,057 350,004 1,000,398 24,772 (899,775)
(loss)
Other comprehensive
income 1,442 (6,457) 224,213 (308,217) 33,942
(net, after-tax)
Total comprehensive
income for the 1,019,499 343,547 1,224,611 (283,445) (865,833)
current period
Earnings per share
1.35 0.43 1.24 0.03 -1.12
(NT$)
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Note 1: All financial information from 2019 to 2023 has been audited by CPAs.

(III) Names of financial statement auditors in the last 5 years and audit opinions

Names of financial statement auditors in the most recent five years and their audit opinions:

==> picture [427 x 191] intentionally omitted <==

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

Year Name of accounting firm Name of CPA Audit opinion
CPA ChingChang Chen, CPA Kevin
2019 PwC Taiwan Unqualified opinion
Lin
CPA ChingChang Chen, CPA Kevin
2020 PwC Taiwan Unqualified opinion
Lin
CPA ChingChang Chen, CPA Kevin
110 PwC Taiwan Unqualified opinion
Lin
CPA ChingChang Chen, CPA Kevin
111 PwC Taiwan Unqualified opinion
Lin
CPA ChingChang Chen, CPA Kevin
2023 PwC Taiwan Unqualified opinion
Lin
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2. Reason for change of CPA in the last 5 years:

The change of financial statement auditor in 2017 and 2021 was mainly due to organizational adjustment within the accounting firm.

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II. Financial analysis for the last 5 years

(I) Consolidated financial analysis - IFRS-compliant

Analysis	Year	Financial analysis for the last 5 years (Note 1)
		2019 2020 2021 2022 2023
Financial position (%)	Debt to assets ratio	43.43 44.29 34.12 30.96 32.77
	Long-term capital to property, plants and equipment	104.02 142.67 149.02 139.18 136.18
Solvency (%)	Current ratio	95.26 294.16 533.72 453.63 358.10
	Quick ratio	81.64 283.52 510.92 429.50 339.88
	Interest coverage ratio	8.92 5.76 19.17 1.28 -14.26
Operating efficiency	Accounts receivable turnover(times)	13.86 9.41 12.64 7.74 6.37
	Average cash collection days	26.33 38.79 28.88 47.16 57.30
	Inventoryturnover(times)	16.98 11.34 11.24 10.61 11.19
	Accountspayable turnover(times)	21.99 15.60 16.46 14.36 18.91
	Average inventoryturnover days	21.49 32.19 32.47 34.40 32.62
	Property, plant, and equipment turnover(times)	0.38 0.25 0.35 0.23 0.13
	Total asset turnover(times)	0.26 0.18 0.22 0.15 0.09
Profitability	Return on assets(%)	6.79 2.48 6.21 0.41 -5.85
	Return on equity (%)	11.74 3.62 9.69 0.23 -9.08
	Pre-taxprofit topaid-upcapital(%)	14.59 5.73 15.89 0.18 -11.81
	Netprofit margin(%)	23.12 11.34 26.49 1.03 -67.56
	Earningsper share(NT$)	1.35 0.43 1.24 0.03 -1.12
Cash flow	Cash flow ratio(%)	164.21 80.53 207.8 107.07 -4.10
	Cash flow adequacyratio(%)	84.27 80.01 187.33 196.01 200.16
	Cash reinvestment ratio(%)	7.78 5.23 6.28 2.05 -0.14
Degree of leverage	Operatingleverage	1.81 3.37 1.82 -8.23 0.09
	Financial leverage	1.13 1.30 1.08 0.66 0.94
Description	Note 2: Information on the reason for the changes in respective financial ratios in the past two years: (the analysis may be waived if the increase/decrease falls short of 20%.) 1. The interest coverage ratio decreased mainly due to the decrease in after-tax pure profit for the current period. 2. The receivable turnover ratio decreased and the receivable collection days increased mainly because of the reduction in the operating income for the current term. 3. The increase in the turnover rate of payables is mainly due to the decrease in payables in the current period. 4. The turnover ratio of real estate, plants, and equipment and that of total assets decreased mainly due to decrease in the operating income for the current term. 5. The return on assets, the return on equity, the ratio of pre-tax net profit to paid-in capital size, the profit margin, and the earnings per share decreased mainly due to decrease in pre-tax profit for the current period. 6. The cash flow ratio and the cash reinvestment ratio decreased mainly due to decrease in the net cash flows of operating activities for the current period. 7. The increase in operating leverage and financial leverage is mainly due to a decrease in operatingrevenues and operatinglosses in the currentperiod.

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Note 1: All financial information from 2019 to 2023 has been audited by CPAs.

Note 2: Formulas for calculation of various analyses:

Financial position
(1) Debt to asset ratio = total liabilities/ total assets.
(2) Long-term capital to property, plant, and equipment = (total equity + non-current liabilities) / net property, plant, and equipment.
Solvency
(1) Current ratio = current assets/current liabilities.
(2) Quick ratio = (current assets - inventory - prepayment) / current liabilities.
(3) Interest coverage ratio = earnings before income tax and interest expense/interest expense for the current period.
Operating efficiency
(1) Receivables turnover (including accounts receivable and notes receivable from business activities) = net sales / average receivables balance (including accounts receivable and notes receivable from business activities).
(2) Average cash collection days = 365 / receivables turnover.
(3) Inventory turnover = sales cost/average inventory balance.
(4) Payables turnover (including accounts payable and notes payable for business activities) = cost of sales / average payables balance (including accounts payable and notes payable for business activities).
(5) Average inventory turnover days = 365 / inventory turnover.
(6) Property, plant and equipment turnover = net sales / average net property, plant and equipment balance.
(7) Total asset turnover = net sales / average total assets.
Profitability
(1) Return on assets = (net income + interest expenses x (1- tax rate)) / average asset balance.
(2) Return on equity = net income / average shareholders' equity.
(3) Net profit margin = net income / net sales.
(4) Earnings per share = (net income attributable to parent company shareholders - preferred share dividends) / weighted average outstanding shares.
Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Cash flow adequacy ratio = net cash flow from operating activities for the previous 5 years / (capital

expenditure + increase in inventory + cash dividends) for the previous 5 years.

(3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (gross property, plant,

and equipment + long-term investments + other non-current assets + working capital).

6. Degree of leverage

(1) Degree of operating leverage = (net operating revenues - variable operating costs and expenses) / operating profit
(2) Degree of financial leverage = operating profit / (operating profit - interest expense).

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(II) Standalone financial analysis - IFRS-compliant

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Year Financial analysis for the last 5 years
Analysis 2019 2020 2021 2022 2023
Financial
Debt to assets ratio 41.38 44.87 35.24 31.39 33.21
position
(%) Long-term capital to property, plant and equipmen 180.81 329.90 344.87 323.73 343.34
Current ratio 89.89 288.83 442.48 335.77 262.45
Solvency
Quick ratio 74.29 278.02 419.05 310.60 243.17
(%)
Interest coverage ratio 9.75 5.89 18.4 1.16 -14.21
Accounts receivable turnover 12.87 8.02 10.27 6.29 4.84
(times)
Average cash collection days 28.36 45.51 35.54 58.03 75.41
Inventory turnover (times) 16.61 10.97 10.87 10.22 10.77
Operating
efficiency Accounts payable turnover (times) 21.69 15.28 16.07 13.96 18.58
Average inventory turnover days 21.97 33.27 33.58 35.71 33.89
Property, plant, and equipment 0.51 0.46 0.79 0.53 0.32
turnover (times)
Total asset turnover (times) 0.26 0.18 0.21 0.15 0.09
Return on assets (%) 7.02 2.57 6.38 0.43 -6.20
Return on equity (%) 12.13 3.72 10.11 0.25 -9.66
Profitability Pre-tax profit to paid-up capital (%) 15.09 5.68 15.20 0.10 -11.22
Net profit margin (%) 23.96 11.95 28.13 1.10 -71.78
Earnings per share (NT$) 1.35 0.43 1.24 0.03 -1.12
Cash flow ratio (%) 184.48 74.06 198.75 105.31 0.73
Cash flow Cash flow adequacy ratio (%) 248.35 241.14 227.53 240.90 224.07
Cash reinvestment ratio (%) 10.42 6.12 7.42 2.46 0.03
Degree of Operating leverage 1.74 3.22 1.84 -7.86 0.06
leverage Financial leverage 1.12 1.28 1.08 0.66 0.94
----- End of picture text -----

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Description:

Note 2: Information on the reason for the changes in respective financial ratios in the past two years: (the analysis may be waived if the increase/decrease falls short of 20%.)

(1) The decrease in current ratio and quick ratio is mainly due to the decrease in repayment of long-term borrowings and accounts receivable in the current period.
(2) The interest coverage ratio decreased mainly due to the decrease in after-tax pure profit for the current period.
(3) The receivable turnover ratio decreased and the receivable collection days increased mainly because of the reduction in the operating income for the current term.
(4) The increase in the turnover rate of payables is mainly due to the decrease in payables at the end of the period.
(5) The turnover ratio of real estate, plants, and equipment and that of total assets decreased mainly due to decrease in the operating income for the current term.
(6) The return on assets, the return on equity, the ratio of pre-tax net profit to paid-in capital size, the profit margin, and the earnings per share decreased mainly due to decrease in pre-tax profit for the current period.
(7) The cash flow ratio and the cash reinvestment ratio decreased mainly due to decrease in the net cash flows of operating activities for the current period.
(8) The decrease in operating leverage and financial leverage is mainly due to a decrease in operating revenues and operating losses in the current period.

Note 1: All financial information from 2019 to 2023 has been audited by CPAs.

Note 2: Formulas for calculation of various analyses:

1 、 Financial position
(1) Debt to asset ratio = total liabilities/ total assets.
(2) Long-term capital to property, plant, and equipment = (total equity + non-current liabilities) / net property, plant, and equipment.
2 、 Solvency
(1) Current ratio = current assets/current liabilities.
(2) Quick ratio = (current assets - inventory - prepayment) / current liabilities.
(3) Interest coverage ratio = earnings before income tax and interest expense/interest expense for the current period.
3 、 Operating efficiency
(1) Receivables turnover (including accounts receivable and notes receivable from business activities) = net sales / average receivables balance (including accounts receivable and notes receivable from business activities).
(2) Average cash collection days = 365 / receivables turnover.
(3) Inventory turnover = sales cost/average inventory balance.
(4) Payables turnover (including accounts payable and notes payable for business activities) = cost of sales / average payables balance (including accounts payable and notes payable for business activities).
(5) Average inventory turnover days = 365 / inventory turnover.
(6) Property, plant and equipment turnover = net sales / average net property, plant and equipment balance.
(7) Total asset turnover = net sales / average total assets.
4 、 Profitability
(1) Return on assets = (net income + interest expenses x (1- tax rate)) / average asset balance.
(2) Return on equity = net income / average shareholders' equity.
(3) Net profit margin = net income / net sales.
(4) Earnings per share = (net income attributable to parent company shareholders - preferred share dividends) / weighted average outstanding shares.
5 、 Cash flow
(1) Cash flow ratio = net cash flow from operating activities / current liabilities.
(2) Cash flow adequacy ratio = net cash flow from operating activities for the previous 5 years / (capital expenditure + increase in inventory + cash dividends) for the previous 5 years.
(3) Cash reinvestment ratio = (net cash flow from operating activities - cash dividends) / (gross property, plant, and equipment + long-term investments + other non-current assets + working capital).
6 、 Degree of leverage
(1) Degree of operating leverage = (net operating revenues - variable operating costs and expenses) / operating profit
(2) Degree of financial leverage = operating profit / (operating profit - interest expense).

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III. Audit Committee's review report on the latest financial statements

HannsTouch Holdings Company

Audit Committee’s Review Report

The Board of Directors has prepared the Company's 2023 business report, financial statements and the supplementary statement of profit and loss, in which the financial statements have been audited by CPA ChinChang Chen and Liao Fu-ming, CPAs of PwC Taiwan, who have issued an independent auditor's report. The Audit Committee found no misstatement in the above business report, financial statements or schedule of profit distribution and loss compensation and hereby issues its report as presented above in accordance with the Securities and Exchange Act and the Company Act.

For

2024 General Shareholders’ Meeting

Audit Committee convener:

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February 27, 2024

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IV. Consolidated Financial Statements and Independent Auditor's Report of the Most Recent Year:

Please refer to Appendix 1 (page 117)

V. Standalone Financial Statements and Independent Auditor's Report of the Most Recent Year:

Please refer to Appendix 2 (page 179)

VI. Financial distress encountered by the Company and affiliated enterprises in the last year, up to the publication date of this annual report: Nil.

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Seven. Review and Analysis of Financial Position and Business Performance, and Risk Management

Issues

I. Financial position

Unit: NT$ thousand

	Unit: NT$ thousand
Year Item 2022 2023	Variation
	Amount increase (decrease) Variation (%)
Current assets 3,293,955 2,829,158	(464,797) -14.11%
Property, plant, and equipment 10,281,968 9,719,302	(562,666) -5.47%
Investmentproperty- net 0 0	0 0.00%
Intangible and other assets 1,461,056 1,477,790	16,734 1.15%
Total assets 15,036,979 14,026,250	(1,010,729) -6.72%
Current liabilities 726,128 790,041	63,913 8.80%
Non-current liabilities 3,929,633 3,806,457	(123,176) -3.13%
Total liabilities 4,655,761 4,596,498	(59,263) -1.27%
Share capital 8,069,485 8,020,105	(49,380) -0.61%
Capital reserves 312,925 313,740	815 0.26%
Retained earnings 1,493,169 593,394	(899,775) -60.26%
Other equityinterest (90,461) (56,519)	33,942 -37.52%
Treasuryshares (18,264) 0	18,264 -100%
Non-controllingequity 614,364 559,032	(55,332) -9.01%
Total shareholders' equity 10,381,218 9,429,752	(951,466) -9.17%
For those with a difference of 20% and above and the amount involved in the variation having reached NT$10,000 thousand in the past two years, the explanations are provided below: 1. The decrease in retained earnings is mainly due to the decrease in net profits after tax in the current period. 2. Increase in other equity was mainly due to gain on valuation of equity instruments measured at fair value through other comprehensive income for the current period. 3. The decrease in treasury shares is mainly due to the cancellation of treasury shares in the current period.

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II. Financial performance

Unit: NT$ thousand

	Unit: NT$ thousand
Year Item 2022 2023	Variation
	Amount increase (decrease) Variation (%)
Operatingrevenues 2,405,963 1,331,826	(1,074,137) -44.64%
Operatingcosts (2,272,770) (2,151,502)	121,268 -5.34%
Grossprofit 133,193 (819,676)	(952,869) -715.40%
Operatingexpenses (229,937) (245,964)	-16,027 6.97%
Operating profit (96,744) (1,065,640)	(968,896) 1,001.51%
Non-operating income and expenses 110,982 118,074	7,092 6.39%
Pre-tax profit from continuing operations 14,238 (947,566)	(961,804) -6,755.19%
Income tax expense 15,027 (3,601)	(18,628) -123.96%
Loss from discontinued operations 0 0	0 0.00%
Other comprehensive income (308,217) 33,942	342,159 -111.01%
Total comprehensive income for the currentperiod (278,952) (917,225)	(638,273) 228.81%
Information on the analysis of increases/decreases: 1. The decrease in customer demand, combined with the variation of product portfolio sold, caused a noticeable divergence in the profit and loss between the two periods. 2. Due to gain on valuation of equity instruments measured at fair value through other comprehensive income for the current period, other comprehensive profits or losses between the two periods underwent large fluctuation.

III. Cash flow

(I) Analysis of cash flow variations in the last 2 years:

Item Year	2022	2023	Variation (%)
Cash flow ratio	107.07	-4.10	-103.8%
Cash flow adequacyratio	196.01	200.16	2.12%
Cash reinvestment ratio	2.05	-0.14	-106.8%
Reasons/explanations:
The cash flow ratio and the cash reinvestment ratio decreased mainly due to decrease in the net cash flows
of operatingactivities for the currentperiod.

(II) Improvement plans for inadequate liquidity: Nil.

(III) Liquidity analysis for the next year:

				Unit: NT$ thousand
Opening cash balance	Projected yearly net cash flow	Expected cash outflow for the	Expected cash surplus(deficit)	Financing of expected cash deficits

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	from operating activities	year	+-	Investment and financing plans
1,831,199	(28,002)	60,058	1,743,139	Not applicable

IV. Material capital expenditures in the last year and impact on business performance

(I) Major capital spending and sources of capital:

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

Unit: NT$ thousand
Actual or expected source of Actual payments in Projected payment in
Project
capital 2023 2024
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I) Major capital spending and sources of capital: Unit: NT$ thousand	I) Major capital spending and sources of capital: Unit: NT$ thousand	I) Major capital spending and sources of capital: Unit: NT$ thousand	I) Major capital spending and sources of capital: Unit: NT$ thousand
Project Actual or expected source of capital Actual payments in 2023 Projected payment in 2024

1. Purchase and improvement of workshops and machinery/equipment of the plant in Tainan Science Park (Note 1) 2. Remodeling of the building on KeelungRoad(Note 2)	Operating capital and long- term borrowings	415,801	472,621

(II) Expected benefits:
Note 1: The Company improved its existing equipment and enhanced its R&D skills in 2023 in response to the throughput demand of the Company.
Note 2: The Company applied the capital expenditure budget approved by the Board of Directors to the remodeling of the building on Keelung Road in order to cope with the demand for the growth in operation in the future of the Company.

V. Investment policy in the most recent year, causes of profit or loss incurred, and any improvements or investments planned for the next year

(I) Re-investment Policy: Without affecting shareholder equity, it helps integrate overall resources throughout the Company and bring down the operating cost. The Company’s investment policy is defined for the sake of making the best of diversified operational benefits through effective integration and planning of resources to cope with the rapidly changing industrial developments in the future and to enhance the competitive advantages of the Company.
(II) Profit or loss: For the profits or losses of the reinvested company, refer to “Eight. Special Notes” of this Annual Report.
(III) Cause of the loss: GloryStone Inc. and Pottery Inc. incur the loss due to the preparation for the establishment of the new hotel and restaurant business in 2023, and thus the personnel and operating expenses incurred during the preparation period.
(IV) Improvement plan: It is intended to strengthen the operation and marketing strategies of hotels and restaurants, and precisely define the market positioning and customer attributes of each store in order to increase the occupancy rate and number of guests, and increase operating revenue.
(V) Investment plans for the coming year: There are no other investment plans so far. If there are new investment plans, laws and regulations will be followed while such reinvestment plans are being

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carefully evaluated.

VI. Analysis and assessment of risk issues

(I) Impact of interest rate, exchange rate, and inflation on the Company’s earnings, and response measures: The Company gathers information regularly to identify all risks that are likely to affect its operations and profitability, including market risk, credit risk, liquidity risk, and cash flow risk. These risks are assessed on a regular basis with response measures planned for effective follow-up. For this reason, the management has been able to respond with effective risk management strategies.

The Company adopts the following control strategies to achieve its risk management targets:

Interest rate risk:

The group is exposed to interest rate risks arising from long-term and short-term borrowings. Loans borrowed at floating rate give rise to interest rate risks from cash flow changes; these risks are partially but not wholly mitigated by floating rate cash and cash equivalents held on hand. The Group reduces possible impact of interest rate variation by: closely monitoring market interest rate movements, adjusting short/medium/long term loans, negotiating for the most preferential borrowing rates with banks, exercising control over accounts receivable, inventory, and fixed asset turnover rates, and anticipating the timing of cash flow changes.

Exchange rate risk:

The Company adopts the following strategies for exchange rate risk control:

(1) More than 90% of the Company's revenues are denominated in USD, whereas payments are made primarily in NTD, followed by USD and JPY. NTD represents the Company's functional currency, and any significant change of exchange rate against HannsTouch's favor may have adverse impact on the Company's financial position. This is why the Company pays close attention to changes in the global economy, makes capital forecasts, and adjusts USD and JPY positions accordingly. Exchange rate changes are constantly monitored in conjunction with analysis reports from banks to facilitate responses such as borrowing, undertaking of currency forwards or swaps, or outright sale of foreign currency position. Stop-loss thresholds have been established to minimize impact of currency exchange, and therefore reduce exchange rate risks.
(2) The Company has established its own “Asset Acquisition and Disposal Procedures” in accordance with “Regulations Governing the Acquisition and Disposal of Assets by Public Companies” stipulated by the Securities and Futures Bureau, Financial Supervisory Commission, to govern the trading of financial derivatives as well as risk management, supervision, and auditing related to the use of such instruments. These procedures provide the Company with additional risk control when using financial instruments for the mitigation of exchange rate risk.
Inflation:

Most of the Company's products are exported, therefore domestic inflation has insignificant impact on profitability. Only when inflation rises on a global scale will it affect consumers' purchasing power and confidence, and impact overall revenues and profitability of the Company. However, inflation on a global scale would have a worldwide effect and not just the Company, which governments should have the capacity to respond. The Company will focus on the research, development, and sale of competitive products while at the same time explore ways to reduce production cost and mitigate the possible impacts of inflation on profitability.

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(II) Policies on high-risk and highly leveraged investments, loans to external parties, endorsements / guarantees, and trading of derivatives; describe the main causes of profit or loss incurred and future response measures:
The Company does not engage in high-risk or highly leveraged investment. All investments are executed after thorough assessment.
The Company has “Lending, Guarantee and Endorsement Procedures” and “Regulations Governing the Acquisition and Disposal of Assets” in place. All matters concerning loans to others, endorsements, guarantees, and asset acquisition/disposal are executed according to relevant policies.
The Company transacts derivatives strictly in compliance with its “Regulations Governing the Acquisition and Disposal of Assets.” When purchasing raw materials, commodity, and machinery from foreign suppliers, the Company hedges the amount of foreign currency it needs in order to prevent any material change in purchase price due to exchange rate. The Company also tries to anticipate exchange rate movement and increase foreign currency positions where possible for natural hedge and more effective control of risk.
(III) Future research and development plans and projected expenses:

The Company will continue supporting its touch control solutions with the following research and development

projects:

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

Project R&D approach
Joint research and development
Large-scale versus AMOLED product development
with customers
Joint research and development
Development of highly trustworthy touch sensor technologies
with customers
Joint research and development
Development of new TDDI structure of touch sensor technologies
with customers
Joint research and development
Development of industrial control Touch MDL products
with customers
Development of flexible touch sensor process technologies and Spontaneous research and
modularized products development
Development of integrated technologies combining the touch Joint development with material
feature and the circular polarizer manufacturers
Development of high-specification electronic paper TFT driving Spontaneous research and
back panel technologies development
Development of flexible electronic paper TFT driving back panel Spontaneous research and
technologies development
Joint research and development
Development of optical fingerprint identification sensor products
with customers
Development of AOI- AI smart detection automatic feedback Joint development with AI
systems manufacturers
Joint research and development
Flexible charge-coupled device
with customers
----- End of picture text -----

Note: TDDI -Touch and Display Driver Integration

For 2023, it is expected that around NT$53,668 thousand will be invested in research and development. Primary factors affecting R&D programs in the future include the R&D capabilities of the R&D team, customer demand,

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and market trends. The Company will continue to develop outstanding R&D talent and proactively put in R&D resources in the future in order to cope with the constantly changing market and technological dynamics and to improve the competitive advantages of the Company.

(IV) Financial impacts and response measures in the event of changes in local and foreign regulations:

The Company has a Legal Affairs and IP Center that is responsible for gathering and analyzing major changes in market, policies, and regulations local and abroad, as well as proposing solutions in response. For this reason, the Company expects no material impact on financial or business performance from the above changes.

(V) Financial impacts and response measures in the event of technological (including cyber security risk) or industrial changes:

The ratio of AMOLEDs in smart phones is increasing and the application has reached out from flagship devices to medium-to-high-end devices. For the matching touch technology, in rigid AMOLEDs, it is nearly 100% OnCell framework. Due to the surplus in the throughput of LTPS TFT-LCDs, however, rigid AMOLEDs will be facing the low-price competition from LTPS TFT-LCDs to slow down in growth rate. In this regard, the countermeasures are provided below:

With the rigid AMOLED on Cell touch, the Company is already in a favorable position in terms of developments and demand on the market in the future. Subsequently, non-mobile-phone application and optimization of cost competitiveness will continue to be developed.
The high value-added external PI flexible touch sensor satisfies the needs of manufacturers that are unable to produce flexible AMOLED touch sensors on their own or helps diversify the options available for AMOLED manufacturers to choose from.
Besides capacitive touch products, through new technologies and processes that are developed, the Company has established the TFT drive backplane product utilization platform that may be widely applied to TFT-LCDs or electronic paper displays, etc.
Constantly build new technologies and process platforms and continue to provide new technologies and products to be utilized in order to meet the demand on the market and become a world-class partner.

To cope with technological advancements, minimize the impact of cyber security risk on customers and the Company, and facilitate digital transformation and network security, the Company has taken the following initiatives:

Digital transformation: To progress towards digital transformation, the Company deployed some digital technologies and solutions, e.g., the AOI devices, an optical recognition system based on machine learning and deep learning, that are deployed in production lines can effectively reduce the defect rate resulting from visual inspection by personnel. In addition, the automated guided vehicle (AGV) system is used to effectively reduce the manpower arrangement for manufacturing and storage.
Cyber security: Cyber security is now a necessity for all businesses. The company has implemented effective protective measures, including an open source endpoint protection system, to bolster the security of work computers. Furthermore, an in-house email archiving system is available for auditors to inspect both internal and external emails, proving to be a reliable defence against any unlawful activities. An effective firewall is installed between the factory network and the office network to ensure the secure transmission of data between the factory and the office.
(VI) Crisis management, impacts, and response measures in the event of a change in corporate image:

The Company has always upheld professionalism and integrity at the core of its business philosophy. For many

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years, the Company has made extensive efforts into maintaining corporate image and risk control, therefore no major crisis has occurred to date.

(VII) Expected benefits, risks, and response measures in relation to mergers and acquisitions: The Company currently has no merger or acquisition plan.
(VIII) Expected benefits, risks, and response measures associated with plant expansions: Nil.
(IX) Risks and response measures associated with concentrated sales or purchases:

On the sales aspect, the Company will strive to increase the weight of touch sensors in its product portfolio and diversify customers in ways that make the best use of existing production lines. As for input of key raw materials, the Company is actively exploring secondary suppliers for more diverse and stable sources of material supply, and therefore minimize concentration risks.

(X) Impacts, risks, and response measures following a major transfer of shareholding by directors, supervisors, or shareholders with more than 10% ownership interest: Nil.
(XI) Impacts, risks, and response measures associated with a change of management: There has been no change of management within the Company.
(XII) Major litigations, non-contentious cases, or administrative litigations involving the Company or any director, supervisor, President, person-in-charge or major shareholder with more than 10% ownership interest, whether concluded or pending judgment, that are likely to pose significant impact to shareholders or security prices of the Company. Disclose the nature of dispute, the amount involved, the date the litigation first started, the key parties involved, and progress as of the publication date of this annual report:
Major litigations, non-contentious cases, or administrative litigations involving the Company:

Since November 2013, the Tainan District Prosecutors Office charged our company, the former chairman, and the financial manager with allegations of embezzling group assets through practices such as inflating construction payments, purchasing scrapped equipment, misappropriating deposits, and accepting kickbacks. These actions allegedly violated the Securities and Exchange Act, Criminal Code, Business Entity Accounting Act, and Tax Collection Act, concerning breach of trust. In December 2016, the Tainan District Court criminal division acquitted our company. The appellate court upheld the guilty verdicts of other defendants in March 2019, and the Supreme Court sent back part of the appellate decision for retrial in November 2020. The Taiwan High Court's Tainan branch maintained the guilty verdicts upon retrial in November 2023. The criminal case is currently pending before the Supreme Court. In related civil litigation, the court of first instance and the appellate court issued mixed verdicts of partial victory and partial defeat for our company in January 2019 and August 2022, respectively. Our company legally appealed to the Supreme Court in September 2022, where the civil case is currently under review. Projects and equipment involved in this case have all been written off in prior annual financial statements under depreciation, impairment, and recognized disposal losses. Therefore, they do not have impacts on the current financial standing of the Company.

Litigations, non-contentious cases, and administrative litigations involving HannStar Display Corporation (referred to as “HannStar Display” below), a major shareholder of the Company with more than 10% ownership interest, in the last two years up to the publication date of annual report, are summarized as follows:

155

On November 11, 2020, the Securities and Futures Investors Protection Center (SFIPC) filed a lawsuit with Taiwan New Taipei District Court to claim for damages on behalf of the investors of Unity Opto Technology, Ltd. due to tortious misrepresentation of Unity Opto’s financial report. The value of the claim amounted to NT$569,202,145. The defendants were directors, supervisors, managers and independent auditors of Unity Opto between 2014 to 2019. The SFIPC also filed a claim against the Company’s Director, Ms. WeiHsin Ma who served as the supervisor of the financial reports of Unity Opto for 2015Q3 and 2016Q3. On December 28, 2022, Ms. WeiHsin Ma entered into a settlement agreement, according to which the SFIPC retracted the lawsuit from Taiwan New Taipei District Court on December 30.

For the antitrust and patent infringement civil lawsuits that are currently in progress, except for the cases where the final result cannot be reliably estimated, the Company has recognized the relevant losses and liabilities based on the actual and evaluation results.

Litigations, non-contentious cases, or administrative litigations involving other directors, supervisors, President, person-in-charge, major shareholders with more than 10% ownership interest, or subsidiaries of the Company, whether concluded or pending judgment, in the last 2 years up to the publication date of this annual report: Nil.

(XIII) Other significant risks and response measures: Nil.

VII. Other important disclosures: Nil.

156

Eight. Special Disclosure

I. Information of affiliated companies

(I) Consolidated business report of affiliated companies:
Organizational chart of affiliated companies:

==> picture [79 x 10] intentionally omitted <==

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

December 31, 2023
----- End of picture text -----

==> picture [464 x 210] intentionally omitted <==

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

HannsTouch Holdings
Company
Golden Apple Investment Glorystone Inc. Silver Net Investment Co.,
Corporation Ltd.
Pottery Inc. Guangdong Shekel NanJing GuanXin Co., Ltd.
Technology Co., Ltd.
STAND Cafebar
----- End of picture text -----

Note 1: The Company is the controller of the above companies, while the above companies are subordinates of the Company.

Note 2: Affiliated enterprises, as mentioned above, are defined according to Article 369-1 of The Company Act.

157

2. Profile of affiliated companies:

Name of entity	Date of incorporation Address	Date of incorporation Address	Paid-up capital	Main business activities or products
Richest Investments Ltd.	March 3, 2006 Floor 4,Willow House,Cricket Square,P O Box 2804,Grand Cayman,KY1-1112, Cayman Islands		USD 4,500,000	Investment
Golden Apple Investment Corporation	January 29, 2016 16F, No. 206, Section 1, Keelung Road, Xinyi District,Taipei City		NT$150,000 thousand	Investment
Glorystone Inc.	March 4, 2016 13F, No. 206, Section 1, Keelung Road, Xinyi District,Taipei City		NT$780,000 thousand	Hospitality
Pony Dream Co., Ltd.	November 9, 2021 16F, No. 206, Section 1, Keelung Road, Xinyi District,Taipei City		NT$20,000 thousand	Catering service
Silver Net Investment Co.,Ltd.	November 22, 2021 16F, No. 206, Section 1, Keelung Road, Xinyi District,Taipei City		NT$150,000 thousand	Investment
Hanns Blegrain Ltd.	December 20, 2021 The Grand Pavilion Commercial Centre, Oleander Way, 802 West Bay Road, P.O. Box 32052, Grand Cayman KY1-1208,Cayman Islands		US$1,000 thousand	Investment
Pottery Inc. (formerly known as Hann Yu Kitchen Co., Ltd.)	April 8, 2022 16F, No. 206, Section 1, Keelung Road, Xinyi District, Taipei City		NT$150,000 thousand	Catering service
GUANGDONG SHEKEL TECHNOLOGY CO., LTD. (Original name: Hexin Trading Technology Service (Shenzhen)Co.,Ltd.)	September 19, 2022	A2201, Zhuoyue Plaza, Southern Meilin Center Plaza at, No. 126, Zhongkang Road, Meidu Community, Meilin Street, Futian District, Shenzhen City	Note	Technological service

Note: The company is a new investee of Hanns Blegrain, was registered for incorporation in September 2022, and was injected the capital in full in January 2023.

Common shareholders in controlling and controlled companies: Nil.
Industries covered by affiliated companies and job specialization: Industries: electronics, investment, hospitality, and restaurant. Job specialization: Nil.
Directors, supervisors, and managers of affiliated companies:

158

December 31, 2023

==> picture [462 x 559] intentionally omitted <==

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

Current shareholding
Name and the entity
Name of entity Title Shareholding
represented No. of shares
percentage
Richest Investment Chung-Han Lin
Director 4,500,000 100%
Ltd.(Richest Investment) (HannsTouch)
Golden Apple Investment
Chairperson WeiHsin Ma (HannsTouch) 15,000,000 100%
Corporation
YongChin Chen
Chairperson (HannsTouch) 33,000,000 42.31%
Director WeiHsin Ma (HannsTouch) 33,000,000 42.31%
Director LiZhi Lei (HannsTouch) 33,000,000 42.31%
Glorystone Inc.
Director YunShan Li (HannsTouch) 33,000,000 42.31%
Director Chin Hsing Investment Co., 15,000,000 19.23%
Supervisor Ltd. 30,000,000 38.46%
HannStar Display Corporation
Silver Net Investment Co.,
Chairperson WeiHsin Ma (HannsTouch) 15,000,000 100%
Ltd.
YungChin Chen (Pottery Inc.)
Chairperson Min-Jen, Cheng (Pottery 1,720,000 86%
Director Inc. ) 1,720,000 86%
Pony Dream Co., Ltd.
Director Yichen Yeh (Taiwan Head 280,000 14%
Supervisor Brewers Brewing Company) 0 0%
LiZhi Lei
Hanns Blegrain Ltd. Director WeiHsin Ma (HannsTouch) 7,000,000 100%
YungChin Chen (Glorystone
Chairperson 7,650,000 51%
Pottery Inc. Inc. )
Director 7,650,000 51%
(formerly known as Hann Yu Jen-Yuan Chang (Glorystone)
Director 2,850,000 19%
Kitchen Co., Ltd.) ChunWei Lin (HUALI)
Supervisor 4,500,000 30%
WeiHsin Ma (Silver Net)
GUANGDONG SHEKEL
TECHNOLOGY CO., LTD.
Person-in-
(Original name: Hexin Meng-Man Chao USD950,000 100%
charge
Trading Technology Service
(Shenzhen) Co., Ltd.)
----- End of picture text -----

159

6. Performance of affiliated enterprises:

					December 31,2023;Unit: NT$ thousands	December 31,2023;Unit: NT$ thousands	December 31,2023;Unit: NT$ thousands	December 31,2023;Unit: NT$ thousands
Name of entity Currency		Share capital	Total assets	Total liabilities	Net worth	Operating revenues	Operating profit	Current period profit/loss (after tax)
Richest Investment Ltd. USD		4,500	0	0	0	0	0	0
Golden Apple Investment Corporation NT$		150,000	126,312	0	126,312	0	(274)	4,867
Glorystone Inc.	NT$	780,000	1,923,865	984,116	939,749	164,534	(52,919)	(78,889)
Silver Net Investment Co.,Ltd.	NT$	150,000	144,071	191	143,880	(5,968)	(6,056)	(5,203)
STAND Cafebar	NT$	20,000	17,380	7,320	10,060	7,045	(4,438)	(4,917)
Pottery Inc.	NT$	150,000	201,908	75,405	126,503	1,973	(14,865)	(19,894)
Hanns Blegrain Ltd.	USD	1,000	809.43	0	809.43	0	(4.53)	(162)
GUANGDONG SHEKEL TECHNOLOGY CO., LTD. (Original name: Hexin Trading Technology Service (Shenzhen)Co.,Ltd.)	RMB	6,538.20	5,567.66	147.07	5,420.59	1,270.47	(1,374.17)	(1,117.60)

160

(II) Consolidated financial statements of affiliated companies:

HannsTouch Holdings Company and subsidiaries

Declaration concerning consolidated financial statements of affiliated companies

Affiliated enterprises subject to the preparation of consolidated financial statements of affiliated enterprises under “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” were identical to the affiliated companies subject to the preparation of consolidated financial statements under International Financial Reporting Standards No. 10 (IFRS 10) for financial year 2023 (from January 1 to December 31, 2023). All mandatory disclosures of the consolidated financial statements of affiliated enterprises have been disclosed in the consolidated financial statements, therefore no separate consolidated financial statements of affiliated enterprises were prepared.

This declaration is solemnly made by

Company name: HannsTouch Holdings Company and

subsidiaries

Person-in-charge: WeiHsin Ma

February 27, 2024

(III) Affiliation report: Nil.

161

II. Private placement of securities in the last year up to the publication date of annual report: Nil.

III. Holding or disposal of the Company's shares by subsidiaries in the last financial year, up to the publication date of this annual report: Not applicable

IV. Other supplementary information: Nil.

162

Nine. Occurrences of Significant Impact on Shareholders' Equity or Security Prices

Occurrences significant to shareholders' interests or securities price, as defined in Subparagraph 2, Paragraph 2, Article 36 of the Securities and Exchange Act, in the last year up to the publication date of annual report: Nil.

163

Appendix I. Consolidated Financial Statements and Independent Auditor's Report of the Most Recent Year Appendix II. Standalone Financial Statements and Independent Auditor's Report of the Most Recent Year

164

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of HannsTouch Holdings Company

Opinion

We have audited the accompanying consolidated balance sheets as of HannsTouch Holdings Company (formerly known as HannsTouch Solution Incorporated) and subsidiaries (the “Group”) as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the Group’s 2023 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

~2~

Key audit matters for the Group’s 2023 consolidated financial statements are stated as follows:

Key audit matters - Impairment assessment on property, plant and equipment

Description

Refer to Notes 4(15), 5(2) and 6(8) for accounting policy applied on impairment of property, plant and equipment, accounting estimates and assumptions applied on the impairment assessment of tangible assets and details of impairment.

The Group has appointed appraisers to appraise the property, plant and equipment in Taipei and to determine the recoverable amount as the basis for assessing the impairment of property, plant and equipment.

The recoverable amount is calculated through income approach and market method. The determination of the recoverable amount is subject to management judgement and involves uncertainty, which could have a significant impact in assessing whether there is any impairment indicator that existed as at year end. Thus, we considered the impairment assessment of property, plant and equipment as a key audit matter.

How our audit addressed the matter:

We understood the basis and process of management’s assessment and performed the following audit procedures in respect of the above key audit matter:

Assessed the appointed appraisers and appraisals firms in conformity with the rules of qualification and independence.
Assessed the expected future income used in the experts’ appraisal report and compared with local market price and forecast documents for the industry.
Assessed the discount rate used in the experts’ appraisal report and inspected the assumptions of cost of capital with return on similar assets in the market.
Examined the parameters of valuation model in the experts’ appraisal report and setting of formulas.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of HannsTouch Holdings Company as at and for the years ended December 31, 2023 and 2022.

~3~

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

~4~

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

~5~

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

Chen, Ching Chang[Liao, Fu-Ming ] For and on Behalf of PricewaterhouseCoopers, Taiwan February 27, 2024

The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice.

As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~6~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2023 AMOUNT % `$` `1,831,199` `13` `297,953` `2` `337,438` `3` `124,264` `1` `760` `-` `12,576` `-` `143` `-` `131,205` `1` `46,637` `-` `46,983` `-` `2,829,158` `20` `219,290` `2` `590,367` `4` `137,461` `1` `9,719,302` `69` `410,858` `3` `19,294` `-` `87,639` `1` `12,881` `-` `11,197,092` `80` `$` `14,026,250` `100`	December 31, 2022	December 31, 2022
	AMOUNT `$` `1,831,199` `297,953` `337,438` `124,264` `760` `12,576` `143` `131,205` `46,637` `46,983` `2,829,158` `219,290` `590,367` `137,461` `9,719,302` `410,858` `19,294` `87,639` `12,881` `11,197,092` `$` `14,026,250`	AMOUNT `$` `1,814,501` `141,401` `781,000` `292,954` `117` `15,615` `-` `172,132` `45,031` `31,204` `3,293,955` `177,958` `553,821` `136,934` `10,281,968` `445,986` `23,416` `111,351` `11,590` `11,743,024` `$` `15,036,979`	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1136 Current financial assets at amortised cost, net 1170 Accounts receivable, net 1180 Accounts receivable - related parties 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1476 Other current financial assets 1479 Other current assets 11XX Total current assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			`12` `1` `5` `2` `-` `-` `-` `1` `1` `-`
			`22`
			`1` `4` `1` `68` `3` `-` `1` `-`
			`78`
			`100`

(Continued)

~7~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December 31, 2023
December 31, 2022
Notes
AMOUNT
%
AMOUNT
%
$
424
- $
502
-
67,143
1
141,369
1
7
5,011
-
13,058
-
6(11)
301,793
2
361,641
3
7
23
-
40
-
191
-
103
-
30,044
-
30,009
-
6(13)
372,010
3
172,754
1
13,402
-
6,652
-
790,041
6
726,128
5
6(12)
1,500,000
11
1,500,000
10
6(13)
1,884,419
13
1,977,789
13
1,131
-
-
-
402,214
3
433,151
3
18,693
-
18,693
-
3,806,457
27
3,929,633
26
4,596,498
33
4,655,761
31
6(16)
8,020,105
57
8,069,485
54
6(17)
313,740
2
312,925
2
6(18)
246,879
2
244,402
2
90,461
1
-
-
256,054
2
1,248,767
8
(
56,519) (
1 ) (
90,461 ) (
1)
6(16)
-
- (
18,264 )
-
8,870,720
63
9,766,854
65
4(3)
559,032
4
614,364
4
9,429,752
67
10,381,218
69
9
11
$
14,026,250
100 $
15,036,979
100

Current liabilities
2150
Notes payable
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
2220
Other payables - related parties
2230
Current income tax liabilities
2280
Current lease liabilities
2320
Long-term liabilities, current portion
2399
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2530
Corporate bonds payable
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Non-current lease liabilities
2670
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Equity attributable to owners of
parent
Share capital
3110
Common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3500
Treasury stock
31XX
Equity attributable to owners of
the parent
36XX
Non-controlling interest
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

The accompanying notes are an integral part of these consolidated financial statements.

~8~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts)

Items Year ended December 31
2023
2022
Notes
AMOUNT
%
AMOUNT
%
6(19) and 7
$
1,331,826
100
$
2,405,963
100
6(6)(23) and 7
(
2,151,502) (
162) (
2,272,770) (
94)
(
819,676) (
62)
133,193
6
6(23) and 7
(
42,631) (
3) (
30,223) (
1)
(
175,474) (
13) (
166,959) (
7)
(
27,916) (
2) (
32,765) (
2)
12(2)
57
-
10
-
(
245,964) (
18) (
229,937) (
10)
(
1,065,640) (
80) (
96,744) (
4)
6(20)
32,905
3
16,808
-
6(21)
44,144
3
124,737
5
6(22)
103,129
8
20,290
1
(
62,104) (
5) (
50,853) (
2)
118,074
9
110,982
4
(
947,566) (
71)
14,238
-
6(24)
(
3,601)
-
15,027
1
($
951,167) (
71) $
29,265
1
6(3)
$
34,754
2 ($
308,237) (
13)
(
812)
-
20
-
$
33,942
2 ($
308,217) (
13)
($
917,225) (
69) ($
278,952) (
12)
($
899,775) (
67) $
24,772
1
4(3)
($
51,392) (
4) $
4,493
-
($
865,833) (
65) ($
283,445) (
12)
4(3)
($
51,392) (
4) $
4,493
-
6(25)
($
1.12) $
0.03
($
1.12) $
0.03

4000
Sales revenue
5000
Operating costs
5950
Gross (loss) profit from operations
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Impairment gain and reversal of
impairment determined in
accordance with IFRS 9
6000
Total operating expenses
6900
Operating loss
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7000
Total non-operating income and
expenses
7900
(Loss) profit before income tax
7950
Income tax (expense) benefit
8200
(Loss) profit for the year
Components of other comprehensive
income that will not be reclassified to
profit or loss
8316
Unrealised gains (losses) from
investments in equity instruments
measured at fair value through other
comprehensive income
Components of other comprehensive
income that will be reclassified to
profit or loss
8361
Financial statements translation
differences of foreign operations
8300
Other comprehensive income (loss)
for the year
8500
Total comprehensive loss for the year
(Loss) profit attributable to:
8610
Owners of the parent
8620
Non-controlling interest
Comprehensive (loss) income
attributable to:
8710
Owners of the parent
8720
Non-controlling interest
(Loss) earnings per share (in dollars)
9750
Basic (loss) earnings per share
9850
Diluted (loss) earnings per share

The accompanying notes are an integral part of these consolidated financial statements.

~9~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

				Equityattr	butable to owners of	theparent				Total equity
Common stock		Capital Reserves	Capital surplus others		Retained Earnings	Unappropriated retained earnings	Other EquityInterest Exchange differences on translation of foreign financial statements Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income `$` `-` `$` `217,756` `-` `-` `20` `(` `308,237)` `20` `(` `308,237)` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `20` `(` `$` `90,481)` `$` `20` `(` `$` `90,481)` `-` `-` `(` `812)` `34,754` `(` `812)` `34,754` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `($` `792) (` `$` `55,727)`	Treasurystock	Total
	Total capital surplus, additional paid-in capital	Capital surplus, difference between consideration and carrying amount of subsidiaries acquired or disposed `$` `919` `-` `-` `-` `-` `-` `-` `-` `-` `$` `919` `$` `919` `-` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `919`		Legal reserve	Special reserve `$` `6,457` `-` `-` `-` `-` `(` `6,457)` `-` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `90,461` `-` `-` `-` `-` `-` `$` `90,461`		Exchange differences on translation of foreign financial statements
`$ 8,069,485` `-` `-` `-` `-` `-` `-` `-` `-` `$ 8,069,485` `$ 8,069,485` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `49,380` `)` `$ 8,020,105`	`$` `309,035` `-` `-` `-` `-` `-` `-` `-` `-` `$` `309,035` `$` `309,035` `-` `-` `-` `-` `-` `-` `-` `-` `-` `(` `1,891)` `$` `307,144`		`$` `2,971` `-` `-` `-` `-` `-` `-` `-` `-` `$` `2,971` `$` `2,971` `-` `-` `-` `-` `-` `-` `-` `207` `(` `1)` `2,500` `$` `5,677`	`$` `144,361` `-` `-` `-` `100,041` `-` `-` `-` `-` `$` `244,402` `$` `244,402` `-` `-` `-` `2,477` `-` `-` `-` `-` `-` `-` `$` `246,879`		`$ 1,600,011` `24,772` `-` `24,772` `(` `100,041)` `6,457` `(` `282,432)` `-` `-` `$ 1,248,767` `$ 1,248,767` `(` `899,775)` `-` `(` `899,775)` `(` `2,477)` `(` `90,461)` `-` `-` `-` `-` `-` `$` `256,054`	`$` `-` `-` `20` `20` `-` `-` `-` `-` `-` `$` `20` `$` `20` `-` `(` `812)` `(` `812)` `-` `-` `-` `-` `-` `-` `-` `($` `792)`	`$` `-` `-` `-` `-` `-` `-` `-` `-` `(` `18,264)` `($` `18,264)` `($` `18,264)` `-` `-` `-` `-` `-` `-` `(` `37,738)` `-` `7,231` `48,771` `$` `-`	`$ 10,350,995` `24,772` `(` `308,217)` `(` `283,445)` `-` `-` `(` `282,432)` `-` `(` `18,264)` `$ 9,766,854` `$ 9,766,854` `(` `899,775)` `33,942` `(` `865,833)` `-` `-` `-` `(` `37,738)` `207` `7,230` `-` `$ 8,870,720`	`$ 10,947,936` `29,265` `(` `308,217)` `(` `278,952)` `-` `-` `(` `282,432)` `12,930` `(` `18,264)` `$ 10,381,218` `$ 10,381,218` `(` `951,167)` `33,942` `(` `917,225)` `-` `-` `(` `3,940)` `(` `37,738)` `207` `7,230` `-` `$ 9,429,752`

The accompanying notes are an integral part of these consolidated financial statements.

~10~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Expected credit gain on doubtful accounts

Depreciation

Amortisation

Interest expense
Share-based payments cost

Interest income

Loss on lease modification

Dividend income

(Gain) loss on disposals of property, plant and
equipment

(Gain) loss on financial assets at fair value
through profit or loss

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or
loss - current
Accounts receivable
Accounts receivable - related parties
Other receivables
Other receivables - related parties
Inventory
Other current assets
Changes in operating liabilities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash (outflow) inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes refund received (paid)
Net cash flows (used in) from operating activities Year ended December 31
Notes
2023
2022
($
947,566 ) $
14,238
12(2)
(
57 ) (
10 )
6(23)
958,501
881,677
6(23)
10,533
11,400
62,104
50,853
6(15)
229
-
6(20)
(
32,905 ) (
16,808 )
6(9)(22)
76
-
6(21)
(
9,242 ) (
52,972 )
6(22)
(
1,970 )
1,681
6(2)(22)
(
99,582 )
17,831
(
88,302 ) (
94,384 )
168,747
35,381
(
643 )
67
7,021 (
4,482 )
(
143 )
1,074
40,927
32,320
(
14,194 ) (
4,429 )
(
78 ) (
1,201 )
(
74,226 ) (
18,621 )
(
8,047 )
13,058
(
15,509 ) (
55,622 )
(
17 ) (
1,154 )
6,750 (
34,979 )
-
2,364
(
37,593 )
777,282
32,487
16,010
9,242
52,972
(
52,741 ) (
43,253 )
16,181 (
25,515 )
(
32,424 )
777,496

(Continued)

~11~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of non-current financial assets at fair
value through profit or loss
Increase in financial assets at fair value through
other comprehensive income
Decrease in current financial assets at amortised
cost
Increase in non-current financial assets at amortised
cost
Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Increase in other non-current assets
Increase in other current financial assets
Net cash flows from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt

Repayment of long-term debt

Repayment of lease liabilities

Payments to acquire treasury shares

(Decrease) increase in non-controlling interests

Treasury shares sold to employees
Cash dividends paid

Net cash flows from (used in) financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year Year ended December 31
Notes
2023
2022
($
10,000 ) ($
75,598 )
(
1,792 ) (
83,921 )
443,562
1,474,907
(
527 ) (
136,934 )
6(26)
(
415,801 ) (
574,285 )
11,415
-
(
5,930 ) (
17,935 )
(
1,683 ) (
8,640 )
(
1,606 ) (
74 )
17,638
577,520
6(27)
281,140
-
6(27)
(
175,254 ) (
1,072,754 )
6(27)
(
39,120 ) (
23,668 )
6(16)
(
37,738 ) (
18,264 )
4(3) and 6(28)
(
3,940 )
12,930
7,208
-
6(18)
- (
282,432 )

32,296 (
1,384,188 )
(
812 )
20
16,698 (
29,152 )
6(1)
1,814,501
1,843,653
6(1)
$
1,831,199 $
1,814,501

The accompanying notes are an integral part of these consolidated financial statements.

~12~

HANNSTOUCH HOLDINGS COMPANY AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organisation

The Company (formerly known as HannsTouch Solution Incorporated) was incorporated in September 1999 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). On June 12, 2023, the Ministry of Economic Affairs approved the change of company name to HannsTouch Holdings Company (the ‘Company’). The Company and its subsidiaries (collectively referred herein as the “Group”) are primarily engaged in the manufacture and sales of touch products, lease of property and hotel business. The common shares of the Company have been listed on the Taiwan Stock Exchange since September 27, 2002.

The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These financial statements were authorised for issuance by the Board of Directors on February 27, 2024.

3. Application of New Standards, Amendments and Interpretations

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS[®] ”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

New standards, interpretations and amendments endorsed by the FSC and became effective from 2023 are as follows:

Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC 2023 are as follows:	and became effective fr
	Effective date by
	International
	Accounting
New Standards,InterpretationsandAmendments	StandardsBoard
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’
Amendments to IAS 12, ‘International tax reform - pillar two model	May 23, 2023
rules’

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

~13~

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC

but not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC and will become effective from 2024 are as follows:

New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’ Amendments to IAS 1, ‘Classification of liabilities as current or non-current’ Amendments to IAS 1, ‘Non-current liabilities with covenants’ Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

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

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

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

	Effective date by
	International Accounting
New Standards,InterpretationsandAmendments	StandardsBoard
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets	To be determined by
between an investor and its associate or joint venture’	International Accounting
	Standards Board
IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendments to IFRS 17, ‘Insurance contracts’	January 1, 2023
Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 -	January 1, 2023
comparative information’
Amendments to IAS 21, ‘Lack of exchangeability’	January 1, 2025

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

4. Summary of Material Accounting Policies

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

~14~

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:
(a) Financial assets (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the group classified’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial Consolidated statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:
(a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
(b) Inter-company transactions, balances and unrealised gains or losses are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
(c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.
(d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Difference of adjustment of non-controlling interest and fair value of consideration paid or received is recognised in equity.

~15~

(e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.
B. Subsidiaries included in the consolidated financial statements:

Investor	Name ofsubsidiary	Main business activities	December 31, December 31, 2023 2022 Description 100.00 100.00 - 100.00 100.00 - 42.31 42.31 - 100.00 100.00 - 100.00 100.00 - - 51.00 Note 3 51.00 51.00 Note 1 Note 2 86.00 - Note 4 30.00 30.00 Note 1 Note 2 100.00 100.00 Note 5 Ownership (%)
The Company The Company The Company The Company The Company GloryStone GloryStone Pottery Yin Wang Investment Hanns Blegrain	Richest Investment Ltd. Golden Apple Investment Corporation (Golden Apple) GloryStone Inc. (GloryStone) Yinwang Investment Co., Ltd. (Yinwang Investment) Hanns Blegrain Ltd. (Hanns Blegrain) Flying horse on Maryland Inc. (Flying horse on Maryland) Pottery Inc. (formerly known as Han Yu Chu Co., Ltd. (Han Yu Chu)) Flying horse on Maryland Inc. (Flying horse on Maryland) Pottery Inc. (formerly known as Han Yu Chu Co., Ltd. (Han Yu Chu)) Guangdong Shekel Technology Co., Ltd. (Shekel) (formerly known as HeXin Shang Mao Technology Service (Shenzen) Ltd. (HeXin Shang Mao))	Investment Investment Hotel business Investment Investment Food service Food service Food service Food service Provision of technical services

Note 1: GloryStone, Yinwang Investment and the Group’s associate jointly established Han Yu Chu, and the registration was completed in April 2022. The paid-in capital for establishment was $150,000 and the investment amount of non-controlling equity shareholders was $28,500.
Note 2: Han Yu Chu has changed its name to "Pottery Inc.", and the registration was completed in October 2022.

~16~

Note 3: GloryStone acquired 35% equity interest in Flying horse on Maryland from noncontrolling interest shareholders in August 2023 at a price of $3,940.
Note 4: Pottery acquired 86% equity interest in Flying horse on Maryland from GloryStone in September 2023 at a price of $9,411.
Note 5: HeXin Shang Mao completed the registration of its name change in October 2023 and is now named as Guangdong Shekel Technology Co., Ltd.
C. Subsidiaries not included in the consolidated financial statements: None.
D. Adjustments for subsidiaries with different balance sheet dates: None.
E. Significant restrictions: None.
F. Subsidiaries that have non-controlling interests that are material to the Group: None.

As of December 31, 2023 and 2022, the non-controlling interest amounted to $559,032 and $614,364, respectively. The information on non-controlling interest and respective subsidiaries is as follows:

as follows:
Name of Principal place subsidiary business GloryStone Taiwan	Non-controllinginterest
	Ownership Amount (%) 559,032 $ 0.00% December31,2023	December31,2022
		Ownership Amount (%) 614,364 $ 57.69%

Summarised financial information of the subsidiaries:

Balance sheets

Balance sheets
			GloryStone
		December	31,2023	December	31,2022
Current assets		$	681,465	$	773,473
Non-current assets			1,374,957		1,454,252
Current liabilities	(		119,793)	(	110,710)
Non-current liabilities	(		933,595)	(	1,019,303)
Total net assets		$	1,003,034	$	1,097,712

~17~

Statements of comprehensive income

GloryStone

			Years ended	December31	December31
			2023		2022
Revenue		$	169,849	$	236,692
(Loss) profit before income tax	(		87,326)		25,458
Income tax expense	(		3,412)	(	1,896)
Net (loss) profit	($		90,738)	$	23,562
Total comprehensive (loss) income	($		90,738)	$	23,562
Comprehensive income attributable to
non-controlling interest		$	51,392	$	4,493

Statements of cash flows

Net cash flows from operating activities Net cash flows from (used in) investing Net cash flows used in financing activities Increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year	2023 2022 42,481 $ 141,115 $ 307,425 163,094) ( 103,622) ( 31,531) ( 246,284 53,510) ( 78,870 132,380 325,154 $ 78,870 $ GloryStone Years endedDecember31

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in NTD, which is the Group’s functional and presentation currency.

A. Foreign currency transactions and balances
(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.

~18~

(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.
B. Translation of foreign operations
The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
(a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
(c) All resulting exchange differences are recognised in other comprehensive income.

(5) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;

~19~

(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.
D. The Group recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

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

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income:
(a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the

~20~

derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(9) Financial assets at amortised cost

A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Group’s business model is achieved by collecting contractual cash flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.
D. The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

(10) Accounts receivable

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

(11) Impairment of financial assets

For financial assets at amortised cost including accounts receivable or contract assets that have a significant financing component, lease receivables, loan commitments and financial guarantee contracts, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

~21~

－ (13) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(14) Inventories

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

(15) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 2~35 years Machinery equipments 2~15 years Furniture and fixtures 1~9 years Other equipments 2~9 years

~22~

(16) Leasing arrangements (lessee) － right-of-use assets / lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the following:
(a) The amount of the initial measurement of lease liability;
(b) Any lease payments made at or before the commencement date; and
(c) Any initial direct costs incurred by the lessee.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognised as an adjustment to the right-of-use asset.

D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognise the difference between remeasured lease liability in profit or loss.

(17) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 2 to 6 years.

(18) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

~23~

(19) Borrowings

A. Borrowings comprise long-term and short-term bank borrowings and other long-term and shortterm loans. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(20) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Bonds payable

Ordinary corporate bonds issued by the Group are initially recognised at fair value, net of transaction costs incurred. Ordinary corporate bonds are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is accounted for as the premium or discount on bonds payable and presented as an addition to or deduction from bonds payable, which is amortized in profit or loss as an adjustment to the ‘financial cost’ over the period of bond circulation using the effective interest method.

(22) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

(23) Non-hedging derivatives

Non-hedging derivatives are initially recognised at fair value on the date a derivative contract is entered into and recorded as financial assets or financial liabilities at fair value through profit or loss. They are subsequently remeasured at fair value and the gains or losses are recognised in profit or loss.

~24~

(24) Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, as a deduction of sales revenue in the period when related products are sold.

(25) Employee benefits

A. Short-term employee benefits

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

B. Pensions
(a) Defined contribution plan

For the defined contribution plan, the contributions are recognised as pension expense when they are due on an accrual basis. Prepaid contributions are recognised as an asset to the extent of a cash refund or a reduction in the future payments.

(b) Defined benefit plan

i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).
ii. Remeasurements arising on defined benefit plan is recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.

iii. Past service costs are recognised immediately in profit or loss.

C. Employees’ compensation and directors’ remuneration

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

~25~

- (26) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

(27) Income taxes

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

(28) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are

~26~

subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(29) Dividends

Dividends are recorded in the Group’s financial statements in the period in which they are approved by the Group’s shareholders. Cash dividends are recorded as liabilities.

(30) Revenue recognition

A. Sales of goods

(a) The Group manufactures and sells touch panel and related products. Sales are recognised when control of the products has transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the buyer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the buyer, and either the buyer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.
(b) Sales revenue of products was recognised based on the contract price net of sales returns and discount. The sales returns and discounts are estimated based on the anticipated annual sales quantities. Accumulated experience is used to estimate and provide for the sales returns and discounts, using the anticipated annual sales quantities, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales returns and discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the control was transferred with a credit term of 60 days, which is consistent with market practice.
(c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

B. Leases

The Group is engaged in the leasing of certain property classified as operating leases based on the lease condition. The lease payments received during the leasing period on a straight line basis are recognised as property lease income.

~27~

C. Food services, sale of hotel products, accommodation and related services
(a) Revenue from food services and sale of hotel products are recognised upon transfer of the items to customers. Payment of the transaction price is due immediately when the customer purchases products.
(b) Revenue from accommodation is recognised in the accounting period in which the services are rendered. The customer pays at the time specified in the payment schedule.
(c) As the time interval between the transfer of committed goods or services and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

(31) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises expenses for the related costs for which the grants are intended to compensate.

(32) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Group’s chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

(1) Critical judgements in applying the Group’s accounting policies

None.

(2) Critical accounting estimates and assumptions

A. Impairment assessment of tangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics.

~28~

Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.

B. Realisability of deferred tax assets
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets.

As of December 31, 2023, the Group recognised deferred tax assets amounting to $87,639.

6. Details of Significant Accounts

(1) Cash and cash equivalents

Cash on hand and revolving funds Checking accounts and demand deposits Time deposits Cash equipment Bills with repurchase agreement	December31,2023 December31,2022 264 $ 443 $ 465,935 384,058 1,250,000 1,400,000 115,000 30,000 1,831,199 $ 1,814,501 $

A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Certain cash and cash equivalents which were pledged as collaterals and restricted have been transferred to other financial assets. Refer to Notes 6(7) and 8 for details.
C. As of December 31, 2023 and 2022, time deposits with maturity over three months amounting to $337,438 and $781,000, respectively, were reclassified as financial assets at amortised cost due to its lack of high liquidity in nature. Refer to Note 6(4) for details.

~29~

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

Financial assets at fair value through profit or loss
Items Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Non-hedging derivatives Valuation adjustment Items Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Beneficiary certificates Valuation adjustment	December31,2023 242,689 $ 48,877 707 292,273 5,680 297,953 $ December31,2023 72,100 $ 100,592 172,692 46,598 219,290 $	December31,2022
		124,962 $ 48,877 48
		173,887 32,486) (
		141,401 $
		December31,2022
		62,100 $ 103,498
		165,598 12,360
		177,958 $

A. The nature of financial assets at fair value through profit or loss are as follows:
(a) Equity instruments: including listed and unlisted stocks.
(b) Beneficiary certificates: including foreign and domestic limited partnership.
(c) Derivative instruments: including forward foreign exchange contracts.
B. Amounts recognised in profit or loss in relation to financial assets / liabilities at fair value through profit or loss are listed below:

Financial assets / liabilitites mandatorily measured at fair value through profit or loss Equity instruments Beneficiary certificates Derivative instruments (	2023 2022 71,462 $ 11,218 $ 30,670 3,809) ( 2,550) 25,240) ( 99,582 $ 17,831) ($ Years endedDecember31

~30~

C. The Group entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD	December31,2023	December31,2023
	(Notionalprincipal) (In thousands) Contractperiod USD 1,300 $ 2023/12/20-2024/2/6 Contract amount December31,2022	Contractperiod
	(Notionalprincipal) (In thousands) USD 1,500 $ Contract amount	Contractperiod
	(Notionalprincipal) USD
		2022/12/29-2023/1/31

The Group entered into forward foreign exchange contracts to sell to hedge exchange rate risk. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

D. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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

Items Non-current items: Equity instruments Listed stocks Valuation adjustment (	December31,2023 December31,2022 646,094 $ 644,302 $ 55,727) 90,481) ( 590,367 $ 553,821 $

A. The Group has elected to classify equity investments that are considered to have stable dividend as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $590,367 and $553,821 as at December 31, 2023 and 2022, respectively.

~31~

B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Dividend income recognised in profit or loss Held at end of year	Years endedDecember31	Years endedDecember31
	2023 2022 34,754 $ 308,237) ($ - $ 46,760 $	2022

C. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group was $590,367 and $553,821, respectively.
D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Financial assets at amortised cost

Items Current items: Time deposits with maturity over three months Non-current items: Corporate bonds	December31,2023 December31,2022 337,438 $ 781,000 $ 137,461 $ $136,934

A. The Group recognised interest income in profit or loss in relation to financial assets at amortised cost in the amount of $14,375 and $5,783 for the years ended December 31, 2023 and 2022, respectively.
B. No financial assets at amortised cost of the Group were pledged to others.
C. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Group was $474,899 and $917,934, respectively.
D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in certificates of deposits are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

~32~

(5) Accounts receivable

Accounts receivable Less: Loss allowance (	December31,2023 124,297 $ 33) 124,264 $	December31,2022 293,044 $ 90) ( 292,954 $

A. As of December 31, 2023 and 2022, the estimated sales discounts and allowances were $533 and $9,142, respectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.
B. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Not past due Up to 30 days	December31,2023 Accountsreceivable 117,407 $ 6,890 124,297 $	December31,2022
		Accountsreceivable
		272,665 $ 20,379
		293,044 $

The above ageing analysis was based on past due date.

C. As of December 31, 2023 and 2022, accounts receivable were all from contracts with customers. As of January 1, 2022, the balance of accounts receivable from contracts with customers amounted to $328,425.
D. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable was $124,297 and $293,044, respectively.
E. Information relating to credit risk of accounts receivable is provided in Note 12(2).

(6) Inventories

Inventories
Raw materials Work in progress Finished goods Room supplies (Note)		December31,2023
	Allowance for Cost valuation loss 86,862 $ 27,260) ($ 36,293 - 45,672 11,207) ( 845 - 169,672 $ 38,467) ($		Bookvalue
			59,602 $ 36,293 34,465 845
			131,205 $

~33~

Raw materials Work in progress Finished goods Room supplies (Note)		December31,2022
	Allowance for Cost valuation loss Bookvalue 87,758 $ 12,323) ($ 75,435 $ 1,725 - 1,725 124,601 30,413) ( 94,188 784 - 784 214,868 $ 42,736) ($ 172,132 $

Note: Including food, beverage and merchandise inventory.

The cost of inventories recognised as expense for the year:

			Years ended	December	31
			2023	2022
Cost of goods sold		$	1,347,075	$	1,803,052
Unallocated overhead expense			789,840		429,857
(Gain on reversal of) loss on decline in market
value	(		4,269)		33,524
Scrapped inventory			18,856		6,337
		$	2,151,502	$	2,272,770

The gain on reversal of market price decline of inventory in 2023 was due to the Company’s active monitoring on obsolete and slow-moving inventories.

(7) Other current financial assets

Time deposits pledged Restricted bank deposits	December31,2023 December31,2022 30,005 $ 28,919 $ 16,632 16,112 46,637 $ 45,031 $

Refer to Note 8 for further information on other current financial assets pledged to others as collateral.

~34~

(8) Property, plant and equipment

January 1, 2023
Cost
Accumulated depreciation
and impairment
2023
At January 1
Additions
Disposals
Reclassifications
Depreciation
At December 31
December 31, 2023
Cost
Accumulated depreciation
and impairment

Buildings and
Machinery and
Furniture and
Unfinished
construction and
equipment under
Land
structures
equipment
fixtures
Otherequipment
acceptance
Total
4,974,140
$ 6,893,885
$ 8,785,603
$ 78,591
$ 70,583
$ 167,474
$ 20,970,276
$ -
3,021,608)
(
7,567,153)
(
35,006)
(
64,541)
(
-
10,688,308)
(
4,974,140
$ 3,872,277
$ 1,218,450
$ 43,585
$ 6,042
$ 167,474
$ 10,281,968
$ 4,974,140
$ 3,872,277
$ 1,218,450
$ 43,585
$ 6,042
$ 167,474
$ 10,281,968
$ -
5,149
-
5,351
2,200
358,478
371,178
-
304)
(
-

9,141)
(
-
-
9,445)
(
-
61,374
76,474
41,516
7,972
187,336)
(
-
-
371,962)
(
527,418)
(
21,236)
(
3,783)
(
-
924,399)
(
4,974,140
$ 3,566,534
$ 767,506
$ 60,075
$ 12,431
$ 338,616
$ 9,719,302
$ 4,974,140
$ 6,954,436
$ 8,288,475
$ 115,330
$ 75,445
$ 338,616
$ 20,746,442
$ -
3,387,902)
(
7,520,969)
(
55,255)
(
63,014)
(
-
11,027,140)
(
4,974,140
$ 3,566,534
$ 767,506
$ 60,075
$ 12,431
$ 338,616
$ 9,719,302
$

~35~

January 1, 2022
Cost
Accumulated depreciation
and impairment
2022
At January 1
Additions
Disposals
Reclassifications
Depreciation
At December 31
December 31, 2022
Cost
Accumulated depreciation
and impairment

Buildings and
Machinery and
Furniture and
Unfinished
construction and
equipment under
Land
structures
equipment
fixtures
Otherequipment
acceptance
Total
4,974,140
$ 6,740,526
$ 8,113,460
$ 53,956
$ 69,419
$ 431,371
$ 20,382,872
$ -
2,660,153)
(
7,091,233)
(
19,822)
(
61,683)
(
-
9,832,891)
(
4,974,140
$ 4,080,373
$ 1,022,227
$ 34,134
$ 7,736
$ 431,371
$ 10,549,981
$ 4,974,140
$ 4,080,373
$ 1,022,227
$ 34,134
$ 7,736
$ 431,371
$ 10,549,981
$ -

1,967

-

4,105
-
583,013
589,085
-
1,275)
(
-
406)
(
-
-
1,681)
(
-
152,667
672,143
20,936
1,164
846,910)
(
-
-
361,455)
(
475,920)
(
15,184)
(
2,858)
(
-
855,417)
(
4,974,140
$ 3,872,277
$ 1,218,450
$ 43,585
$ 6,042
$ 167,474
$ 10,281,968
$ 4,974,140
$ 6,893,885
$ 8,785,603
$ 78,591
$ 70,583
$ 167,474
$ 20,970,276
$ -
3,021,608)
(
7,567,153)
(
35,006)
(
64,541)
(
-
10,688,308)
(
4,974,140
$ 3,872,277
$ 1,218,450
$ 43,585
$ 6,042
$ 167,474
$ 10,281,968
$

Note 1: Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral. Note 2: There is no capitalization of interests incurred on property, plant and equipment in 2023 and 2022.

~36~

－ (9) Lease transactions lessee

A. The Group leases various assets including land, buildings, machinery and business vehicles. Rental contracts are typically made for periods of 3 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. Short-term leases with a lease term of 12 months or less comprise offices and parking lots. Lowvalue assets comprise foreign warehouse and dormitory.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings and structures Transportation equipment (Business vehicles) Other equipment Land Buildings and structures Transportation equipment (Business vehicles) Other equipment	December31,2023 December31,2022 Bookvalue Bookvalue 261,429 $ 276,732 $ 144,033 161,715 66 480 5,330 7,059 410,858 $ 445,986 $ Years endedDecember31	December31,2022
		Bookvalue
		276,732 $ 161,715 480 7,059
		445,986 $
	2023 Depreciationcharge 15,303 $ 16,781 289 1,729 34,102 $	2022
		Depreciationcharge
		15,303 $ 8,908 321 1,728
		26,260 $

D. The movements of right-of-use assets of the Group during 2023 and 2022 are as follows:

At January 1 Modification Depreciation At December 31	2023
	Buildings and Transportation equipment Other equipment Land structures (Business vehicles ) (Tank) Total 276,732 $ 161,715 $ 480 $ 7,059 $ 445,986 $ - 901) ( 125) ( - 1,026) ( 15,303) ( 16,781) ( 289) ( 1,729) ( 34,102) ( 261,429 $ 144,033 $ 66 $ 5,330 $ 410,858 $

At January 1 Additions Depreciation At December 31	2022
	Buildings and Transportation equipment Land structures (Business vehicles ) 275,939 $ 8,007 $ 801 $ 16,096 162,616 - 15,303) ( 8,908) ( 321) ( 276,732 $ 161,715 $ 480 $	Other equipment (Tank) Total 8,787 $ 293,534 $ - 178,712 1,728) ( 26,260) ( 7,059 $ 445,986 $

~37~

E. The information on profit and loss accounts relating to lease contracts is as follows:

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets Expense on variable lease payments Loss on lease modification	Years endedDecember31	Years endedDecember31
	2023 9,268 $ 2,529 8,295 87 76	2022
		8,008 $ 2,465 10,664 - -

F. For the years ended December 31, 2023 and 2022, the Group’s total cash outflow for leases were $50,031 and $36,797, respectively.

(10) Leasing arrangements - lessor

A. The Group leases various assets including buildings. Rental contracts are typically made for periods of 1 and 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. For the years ended December 31, 2023 and 2022, the Group recognised rent income, based on the operating lease agreement, which does not include variable lease payments, as follows:

(11) (12)	Other payables Bonds payable Rent income Payables for machinery and equipment Repairs and maintenance expense payable Salary and bonus payable Utility expenses payable Processing charge payable Import / export (customs) expense payable Others Bonds payable Less: Maturity within one year	2023 2022 2,180 $ 2,020 $ Years endedDecember31 December31,2023 December31,2022 70,064 $ 114,687 69,174 68,923 62,253 85,662 16,847 20,448 5,621 - 933 4,333 76,901 67,588 301,793 $ 361,641 $ December31,2023 December31,2022 1,500,000 $ 1,500,000 $ - - 1,500,000 $ 1,500,000 $	2023 2022 2,180 $ 2,020 $ Years endedDecember31 December31,2023 December31,2022 70,064 $ 114,687 69,174 68,923 62,253 85,662 16,847 20,448 5,621 - 933 4,333 76,901 67,588 301,793 $ 361,641 $ December31,2023 December31,2022 1,500,000 $ 1,500,000 $ - - 1,500,000 $ 1,500,000 $
			2022 2,020 $ December31,2022
			114,687 68,923 85,662 20,448 - 4,333 67,588
			361,641 $
			December31,2022
			1,500,000 $ -
			1,500,000 $

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A. In order to fulfill working capital, the Board of Directors resolved to issue the first domestic secured ordinary bonds on May 5, 2021. The terms and conditions of the ordinary bonds were as follows:
(a) Issuance amount: The total issuance amount was NT$900 million. The bonds were divided into A, B and C bonds amounting to NT$300 million each.
(b) Face value: NT$1 million
(c) Issuance price: Issued at full amount of face value on the issuance date.
(d) The time limit of issuance: The issuance period for each bond is 5 years from July 5, 2021 to July 5, 2026.
(e) The interest rate of bond and payments of interest: The interest rate of each bond is 0.51% fixed per annum. The simple interest is calculated and paid per year starting from the issuance date.
(f) The repayment date and method: repayable at once on the maturity date.
(g) Guarantee: A, B and C bonds are secured by a bank guarantee issued by Mega International Commercial Bank Co., Ltd., Hua Nan Bank Co., Ltd. and Taishin International Bank Co., Ltd., respectively, in accordance with the commissioned guarantee agreement and bondfulfilling guarantee obligation agreement individually signed by the three banks.
(h) Guarantee bank: Bank SinoPac Co., Ltd.
B. In order to fulfill working capital, the Board of Directors resolved to issue the second domestic secured ordinary bonds on November 5, 2021. The terms and conditions of the ordinary bonds were as follows:
(a) Issuance amount: NT$600 million
(b) Face value: NT$1 million
(c) Issuance price: Issued at full amount of face value on the issuance date.
(d) The time limit of issuance: The issuance period is 5 years from November 26, 2021 to November 26, 2026.
(e) The interest rate of bond and payments of interest: The interest rate is 0.57% fixed per annum. The simple interest is calculated and paid per year starting from the issuance date.
(f) The repayment date and method: repayable at once on the maturity date.
(g) Guarantee: The bonds are guaranteed by a bank guarantee issued by Taiwan Shin Kong Commercial Bank Co., Ltd. in accordance with the commissioned guarantee agreement and bond-fulfilling guarantee obligation agreement.
(h) Guarantee bank: Taishin International Bank Co., Ltd.
C. The Group reclassified current portion of long-term debt based on liquidity, categorizing them as long-term liabilities due within one year or one operating cycle. The amount as of December 31, 2023 and 2022 was $0.

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- (13) Long term borrowings

Borrowingnature, periodandrepayment term
Coupon Rate
Land and buildings on Yixian Road, Sec. 2 pledged as
collateral for borrowings
NTD borrowings from Land Bank: the borrowing
period is 15 years and interest is payable monthly for
the first 3 years, principal is payable quarterly starting
from the 4th year until May 2033 (Note).
1.95%
Machinery and equipment pledged as collateral for
borrowings
NTD borrowings from Bank of Taiwan: the borrowing
period is 5 years and interest is payable monthly for
the first 2 years, principal is payable quarterly starting
from the 3rd year until October 2026.
1.92%
NTD borrowings from Chang Hwa Commercial Bank:
the borrowing period is 5 years and interest is payable
quarterly, principal is payable quarterly starting from
the inception date until September 2028.
2.00%
Less: Current portion (including unamortised long-term
(
borrowing cost)
Borrowingnature, periodandrepayment term
Coupon Rate
Land and buildings on Yixian Road, Sec. 2 pledged as
collateral for borrowings
NTD borrowings from Land Bank: the borrowing
period is 15 years and interest is payable monthly for
the first 3 years, principal is payable quarterly starting
from the 4th year until May 2033 (Note).
1.70%
Machinery and equipment pledged as collateral for
borrowings
NTD borrowings from Bank of Taiwan: the borrowing
period is 5 years and interest is payable monthly for
the first 2 years, principal is payable quarterly starting
from the 3rd year until October 2026.
1.79%
Less: Current portion (including unamortised long-term
(
borrowing cost)

December 31, 2023
1,641,159
$ 567,770
47,500
2,256,429
372,010)

1,884,419
$ December31,2022
1,813,913
$ 336,630
2,150,543
172,754)

1,977,789
$

Note: The Group has pledged certain property, plant and equipment as collateral for the above borrowing. On May 8, 2018, the Group entered into a loan for 15 years with Land Bank, for

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a facility of $4,160,000 and has repaid $1,100,000 and $900,000 in advance in December 2021 and January 2022, respectively.

(14) Pensions

A. Effective July 1, 2005, the Group has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Group contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
B. The pension costs under the defined contribution pension plan of the Group for the years ended December 31, 2023 and 2022 were $14,163 and $13,508, respectively.

(15) Share-based payment

A. For the year ended December 31, 2023, the Group’s share-based payment arrangements were as follows:

follows:
Type of arrangement	Grantdate Quantity granted 2023/1/12 1,907 thousand shares (note) 2023/8/14 3,750 thousand shares (note)	Vesting conditions
First share repurchase and employee incentive plan in 2022 First share repurchase and employee incentive plan in 2023		Vested immediately Vested immediately

The above share-based payment arrangements are settled by equity.

Note: The chairman was authorised to determine the distribution of remaining shares if repurchased shares were not fully purchased by employees.

For the year ended December 31, 2022, there was no share-based payment arrangement.

B. Details of the share-based payment arrangements are as follows:

Options outstanding at January 1 Options granted Options exercised Options expired Options outstanding at December 31	2023
	No. ofoptions (in thousands)
	- 5,657 719) ( 4,938) ( -

For the year ended December 31, 2022, there was no share-based payment arrangement.

C. The weighted-average stock price of stock options at exercise dates for the year ended December
31, 2023 was $10.06. There was no share-based payment arrangement for the year ended

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December 31, 2022.

D. The fair value of stock options granted on grant date is measured using the Black-Scholes optionpricing model. Relevant information is as follows:

Type of arrangement Grantdate First share repurchase and employee incentive plan in 2022 2023/1/12 First share repurchase and employee incentive plan in 2023 2023/8/14	Stock price Exercise price Expected price volatility Expected option life Expected dividends Risk- free interest rate Fair value perunit $9.59 (in dollars) $9.19 (in dollars) 28.27% 24 days - 28.27% $0.12 (in dollars) $9.51 (in dollars) $10.06 (in dollars) 27.23% 11 days - 0.96% $0 (in dollars)

Note 1: Expected price volatility of first share repurchase and employee incentive plan in 2022 adopted the average annualized standard deviation of return rate for the period from July 13, 2022 to January 12, 2023 of HannsTouch Holdings Company as a hypothetical value.
Note 2: Expected price volatility of first share repurchase and employee incentive plan in 2023 adopted the average annualized standard deviation of return rate for the period from August 4, 2023 to August 14, 2023 of HannsTouch Holdings Company as a hypothetical value.
E. Expenses incurred on share-based payment transactions are shown below:

Equity-settled		2023	2022
		229 $	- $

(16) Share capital

A. As of December 31, 2023, the Company’s authorized capital was $20,000,000, consisting of 2 billion shares, and the paid-in capital was $8,020,105 with a par value of $10 (in dollars) per share.

Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:

At January 1 Employee share options exercised Purchase of treasury shares ( At December 31	2023 805,042 719 3,750) ( 802,011	2022 806,949 - 1,907) 805,042

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B. In order to promote the development of strategy alliance, improve financial structure and fulfill working capital, the Company's shareholders, on May 29, 2023, resolved to increase capital in cash and issue common shares up to 80 million shares or increase capital through the issuance of global depository receipts. The Company will choose one or both methods, at a par value of NT$10 per share.
C. Treasury shares
(a) On February 20, 2023, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares to transfer to employees. The expected number of shares to be repurchased was 5,000 thousand shares. The repurchase period was from February 21, 2023 to April 20, 2023, and the price range was between $7.18 (in dollars) and $13.00 (in dollars). The details are as follows:

Name of company holdingthe shares	Reason for reacquisition	December	31,2023
		Number of shares (in thousands)	Carryingamount
The Company	To be reissued to employees	3,750	$ 37,738

Note 1: The Company has executed the expiration of the repurchase period on April 20, 2023, with accumulated buyback shares and total amount of shares being 3,750 thousand shares and $37,738, respectively.
Note 2: On October 31, 2023, the Board of Directors resolved the implementation of cancellation and reduction of capital by repurchasing treasury stocks. The reduction of capital base date was October 31, 2023, and the changes have been completed on November 13, 2023.
(b) On August 1, 2022, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares to transfer to employees. The expected number of shares to be repurchased was 20,000 thousand shares. The repurchase period was from August 2, 2022 to September 30, 2022, and the price range was between $6.59 (in dollars) and $14.57 (in dollars). The details are as follows:

Name of company holdingthe shares	Reason for reacquisition	December	31,2022
		Number of shares (in thousands)	Carrying amount (Note)
		1,907	$ 18,264

On February 20, 2023, the Board of Directors resolved the retirement of treasury stocks. The base date of retirement was set on March 30, 2023, and the related procedure was completed on April 13, 2023.

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(c) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(e) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(17) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalised mentioned above should not exceed 10% of the paidin capital each year. However, capital surplus should not be used to cover accumulated deficit unless the legal reserve is insufficient.

(18) Retained earnings / Events after the balance sheet date

A. Under the Company’s Articles of Incorporation, the annual earnings, if any, shall first be used to pay all taxes and offset accumulated deficit and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. Except for the distribution of cash dividends and bonus which the Board of Directors are authorised to resolve and then report to shareholders, others will be proposed by the Board of Directors and approved by the shareholders.
B. According to the Articles of Incorporation, the Company shall consider to appropriate all of current undistributed earnings based on finance, business, operation and other factors. The appropriation of earnings can be in the form of cash dividend or stock dividend separately or both. The ratio of cash dividend shall not be lower than 20% of the total dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

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D. On February 27, 2024, due to the post-tax loss for the year ended December 31, 2023, the Board of Directors of the Company resolved not to distribute profits but only resolved the reversal of special reserve of $33,942.
E. The appropriations of 2022 and 2021 earnings as resolved by the shareholders on May 29, 2023 and May 24, 2022, respectively, are as follows:

Years endedDecember31	Years endedDecember31	Years endedDecember31
Dividends per share Dividends per share Amount (indollars) Amount (indollars) 2,477 $ 100,041 $ 90,461 6,457) ( - - $ 282,432 0.35 $ 92,938 $ 376,016 $ 2022 2021	2021
Amount 2,477 $ 90,461 - 92,938 $		Dividends per share (indollars)
		0.35 $

(19) Operating revenue

Operating revenue
Revenue from contracts with customers Touch sensors and related products Revenue from hotel business Rental revenue from property	Years endedDecember31
	2023 2022 1,080,347 $ 2,098,527 $ 168,780 235,439 82,699 71,997 1,331,826 $ 2,405,963 $

Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services at a point in time in the following major geographical regions:

p g major geographical regions:	p	p
Revenue from external customer contracts China South Korea Taiwan Europe	Years endedDecember31
	2023 627,717 $ 347,446 351,525 5,138 1,331,826 $	2022
		939,013 $ 1,130,362 334,527 2,061
		2,405,963 $

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(20) Interest income

Interest income
Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Years endedDecember31
	2023 18,141 $ 14,375 389 32,905 $	2022
		10,867 $ 5,783 158
		16,808 $

(21) Other income

Other income
Revenue from purchasing masks on behalf of others Dividend income Rent income (Note 1) Government grant revenues (Note 2) Research and development income (Note 3) Other income	Years endedDecember31
	2023 16,253 9,242 2,180 477 - 15,992 44,144 $	2022
		10,859 52,972 2,020 10,566 33,506 14,814
		124,737 $

Note 1: Refer to Note 6(10) for details.

Note 2: Government subsidy due to the impact of Covid-19 and recognized revenue of $22 in 2023. Note 3: From the design and process development entrusted by the Group’s associate, Hannstar Display Corp.

(22) Other gains and losses

Other gains and losses
			Years ended	December31
			2023		2022
Gains (losses) on financial instruments at fair
value through profit or loss		$	99,582	($		17,831)
Foreign exchange gains			8,210			40,227
Gains (losses) on disposals of property, plant and
equipment			1,970	(		1,681)
Losses on lease modifications	(		76)			-
Other losses	(		6,557)	(		425)
		$	103,129		$	20,290

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(23) Employee benefit expense and expenses by nature / Events after the balance sheet date

YearendedDecember31,2023	YearendedDecember31,2023	YearendedDecember31,2023
Operating costs Operating expenses Total 167,625 $ 91,404 $ 259,029 $ 20,621 8,840 29,461 9,335 4,828 14,163 21,898 10,676 32,574 942,398 16,103 958,501 7,058 3,475 10,533 YearendedDecember31,2022		Total
Operating costs 161,175 $ 20,913 9,235 23,246 871,921 7,183	Operating expenses 85,872 $ 8,329 4,273 10,165 9,756 4,217	Total
		247,047 $ 29,242 13,508 33,411 881,677 11,400

A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall be 0.001% for employees’ compensation and shall not be higher than 2% for directors’ remuneration.
B. For the years ended December 31, 2023 and 2022, employees’ compensation was accrued at $0 and $1, respectively; while no directors’ remuneration was accrued. The aforementioned amounts were recognised in salary expenses.

For the year ended December 31, 2023, the employees’ compensation and directors’ remuneration were estimated and accrued based on profit of current year distributable as of the end of reporting period as prescribed by the Company’s Articles of Incorporation. On February 27, 2024, the Board of Directors during its meeting resolved not to distribute employees’ compensation and directors’ and supervisors’ remuneration.

Employees’ compensation and directors’ remuneration for 2022 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2022 financial statements.

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C. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(24) Income taxes

A. Income tax expense (benefit)

Components of income tax expense (benefit):

mponents of income tax expense (benefit):
Current tax: Current tax on profits for the year Prior year income tax overestimation ( Total current tax ( Deferred tax: Origination and reversal of temporary differences Total deferred tax	Years endedDecember31
	2023 2022 191 $ 102 $ 21,433) - 21,242) 102 24,843 15,129) ( 24,843 15,129) ( 3,601 $ 15,027) ($

B. Reconciliation between income tax expense (benefit) and accounting profit

			Years ended	December31	December31
			2023		2022
Income tax calculated by applying statutory	($		189,513)		$	2,848
rate to the profit before tax
Expenses disallowed by tax regulation			3,764			132
Tax exempt income by tax regulation	(		19,838)	(		14,459)
Temporary differences not recognised as
deferred tax assets			58	(		6,193)
Taxable loss not recognised as deferred tax
assets			212,988			2,645
Use of prior year taxable loss not recognised
as deferred tax assets	(		169)			-
Change in assessment of realisation of deferred
tax assets			17,744			-
Prior year income tax overestimation	(		21,433)			-
		$	3,601	($		15,027)

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C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

are as follows:
Temporary differences: －Deferred tax assets: Provisions Impairment loss Inventory valuation loss Unrealised loss on valuation of financial instruments Unrealised exchange gains and losses Bonus payable Unused annual leave allowance payable Loss carryforward －Deferred tax liabilities: Unrealised gain on valuation of financial instruments Temporary differences: －Deferred tax assets: Provisions Impairment loss Inventory valuation loss Loss carryforward Others －Deferred tax liabilities: Unrealised exchange gain (		Recognised in profitor loss Recognised in other comprehensive income At December31 1,721) ($ - $ 107 $ 2) ( - 11,175 855) ( - 7,693 833) ( - - 244 - 492 6,428 - 6,428 1,250 - 1,250 28,223) ( - 60,494 23,712) ($ - $ 87,639 $ 1,131) ($ - $ 1,131) ($ Recognised in profitor loss Recognised in other comprehensive income At December31 369) ($ - $ 1,828 $ - - 11,177 6,705 - 8,548 12,463 - 88,717 3,725) ( - 1,081 15,074 - 111,351 55 - - 15,129 $ - $ 111,351 $ 2023 2022
	AtJanuary1 1,828 $ 11,177 8,548 833 248 - - 88,717 111,351 $ - $
	AtJanuary1 2,197 $ 11,177 1,843 76,254 4,806 96,277 55) 96,222 $		Recognised in profitor loss
		369) ($ - 6,705 12,463 3,725) ( 15,074 55 15,129 $

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D. Expiration dates of unused tax losses and amounts of unrecognised deferred tax assets are as follows:

follows:
	December31,2023
Year incurred 2014 2016 2020 2021 2022 2023	Amount filed/ assessed Unusedamount 994,010 $ 88,720 $ 278,062 278,062 536 353 8,808 8,808 37,583 37,583 1,059,891 1,059,891	Unrecognised deferredtax assets Expiry year 88,720 $ 2024 - 2026 353 2030 8,808 2031 13,174 2032 1,059,891 2033

	December31,2022	December31,2022
Year incurred 2014 2016 2017 2018 2019 2020 2021 2022	Amount filed/ assessed Unusedamount 994,010 $ 88,720 $ 278,110 278,086 36 15 10,972 15 67,311 608 3,148 536 8,824 8,824 37,583 37,583	Unrecognised deferredtax assets Expiry year - $ 2024 24 2026 15 2027 15 2028 608 2029 536 2030 8,824 2031 13,174 2032

E. The status of the Company’s and its subsidiaries’ income tax returns which were assessed by the tax authority are as follows:

tax authority are as follows:
The Company GloryStone Golden Apple Investment Yin Wang Investment Flying horse on Maryland Pottery	Assessment
	2021 2021 2021 2021 2021 2022 established, not yet assessed

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(25) (Loss) earnings per share

(Loss) earnings per share
Basic loss per share Loss attributable to ordinary shareholders of the parent ( Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Employees’ bonus Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted average number of ordinary shares outstanding Loss per share Amount after tax (sharesin thousands) (indollars) 899,775) $ 802,377 1.12) ($ Weighted average number of ordinary shares outstanding Earnings per share Amount after tax (sharesin thousands) (indollars) 24,772 $ 806,460 0.03 $ 24,772 $ 806,460 - 532 24,772 $ 806,992 0.03 $ YearendedDecember31,2023 YearendedDecember31,2022
	Amount after tax ( 24,772 $ 24,772 $ - 24,772 $	Weighted average number of ordinary shares outstanding sharesin thousands) 806,460 806,460 532 806,992

(26) Supplemental cash flow information

A. Investing activities with partial cash payments

Investing activities with partial cash payments
Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment ( Cash paid during the year	2023 2022 371,178 $ 589,085 $ 114,687 99,887 70,064) 114,687) ( 415,801 $ 574,285 $ Years endedDecember31
	2023 371,178 $ 114,687 70,064) ( 415,801 $

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(27) Changes in liabilities from financing activities

For the years ended December 31, 2023 and 2022, the Group’s liabilities from financing activities included short-term borrowings, dividends payable, bonds payable, long-term borrowings and lease liabilities. The changes all pertain to changes in the financing cash flow and other non-cash changes, the aggregate amounts were as follows. Refer to statements of cash flows for other information.

	2023
Bonds payable 1,500,000 $ - - 1,500,000 $	Long-term borrowings Lease liability (Note) (Note) 2,150,543 $ 463,160 $ 105,886 39,120) ( - 8,218 2,256,429 $ 432,258 $	Liabilities from financing activities-gross
		4,113,703 $ 66,766 8,218
		4,188,687 $

At January 1 Changes in cash flow from financing activities Changes in other non-cash items At December 31	2022
	Bonds Long-term borrowings Lease liability Liabilities from financing payable (Note) (Note) activities-gross 1,500,000 $ 3,223,297 $ 300,108 $ 5,023,405 $ - 1,072,754) ( 23,668) ( 1,096,422) ( - - 186,720 186,720 1,500,000 $ 2,150,543 $ 463,160 $ 4,113,703 $

Note: Including current portion.

(28) Transactions with non-controlling interest

A. The Group and non-controlling shareholders established a subsidiary, Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.) in April 2022, and non-controlling equity shareholders’ investment amount was $28,500. In addition, the Group’s subsidiary, GloryStone, paid cash dividends to non-controlling interest amounting to $15,570 in June 2022.
B. The Group’s subsidiary, GloryStone Inc., acquired 35% equity interest in Flying horse on Maryland from non-controlling interest shareholders in August 2023 at a price of $3,940.

7. Related Party Transactions

(1) Names of related parties and relationship with the Group

Names of related parties	Relationship with the Group
HannStar Display Corporation (Hannstar) Hannstar Technology Services (Shenzhen) Inc. (Hannstar Technology) Hannstar Foundation Winbond Electronics Corp. (Winbond Electronics)	Entities with significant influence to the Group Other related party Other related party Other related party

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(2) Significant related party transactions

A. Operating revenue

Operating revenue
Revenue from sales and rooms Entities with significant influence to the Group Other related party	Years endedDecember31
	2023 3,706 $ 11 3,717 $	2022
		5,085 $ 275
		5,360 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

B. Purchases

Purchases
Purchases of goods: Entities with significant influence to the Group	Years endedDecember31
	2023 39,533 $	2022
		21,425 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

C. Operating expenses

Operating expenses
Rent expense Other related party Hannstar Other related party	Years endedDecember31
	2023 2022 5,904 $ 2,389 $ Years endedDecember31	2022
		2,389 $
	2023 2022 9,950 $ 9,758 $ 68 - 10,018 $ 9,758 $

D. Rent expense

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

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E. Receivables from related parties

Payables to related parties Accounts receivable: Entities with significant influence to the Group Other related party Other receivables: Entities with significant influence to the Group Accounts payable: Entities with significant influence to the Group Other payables: Entities with significant influence to the Group	December31,2023 December31,2022 760 $ 109 $ - 8 760 $ 117 $ 143 $ - $ December31,2023 December31,2022 5,011 $ 13,058 $ 23 $ 40 $

F. Payables to related parties

G. Property transactions:

(a) Acquisition of financial assets:

Year ended December 31, 2023 No. of shares Accounts (in thousands) Objects Consideration Financial assets Windbond at fair value 1,500 Common Stock $ 33,000 Electronics through profit or loss - current

(b)Disposal of property, plant and equipment

Entities with significant influence to the Group	Years endedDecember31	Years endedDecember31
	Disposal proceeds Gain 10 $ 9 $ 2023	2022
		Disposal proceeds Gain - $ - $

H. Maintenance and proxy management fees for public areas from Hannstar for the years ended December 31, 2023 and 2022 amounted to $7,620 and $5,864, respectively.
I. The design and process development income from Hannstar for the years ended December 31, 2023 and 2022 amounted to $0 and $33,506, respectively.

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(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits	Years endedDecember31
	2023 13,063 $	2022
		27,022 $

8. Pledged Assets

The Group’s assets pledged for the purpose of long-term borrowings, notes, customs duty on raw material imports and performance bond are as follows:

ports and performance bond are as follows:
Pledgedasset Pledged time deposits (shown as other financial assets) Demand deposits (shown as other financial assets) Property, plant and equipment	Bookvalue
	December31,2023 30,005 $ 16,632 5,397,496 5,444,133 $	December31,2022
		28,919 $ 16,112 5,488,679
		5,533,710 $

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

As of December 31, 2023, significant commitments and contingencies are outlined as follows:

(1) Contingencies

In November 2013, the Tainan District Prosecutors Office initiated the prosecution proceedings against the Company and the Company’s former Directors and financial managers suspected of false reporting, increasing the contract prices of construction projects, purchasing scrapped equipment, misappropriating deposits, receiving kickbacks, hollowing out the Company's assets and breach of trust under the Securities and Exchange Act, Criminal Code, Business Entity Accounting Act and Tax Collection Act and other crimes. In December 2016, the Criminal court of Tainan District Court has rendered its decision that the Company is innocent. In March 2019, the second instance court has found the other defendants guilty. However, in November 2020, the third instance court remanded certain part of the cases back to the second instance court. After a retrial by the Tainan Branch of the Taiwan High Court, the guilty verdict against the defendant was upheld in November 2023. Currently, the criminal case is pending before the Supreme Court for review. Further, the Company filed incidental civil lawsuits against other defendants suspected of the criminal case. The first instance court and the second instance court have rendered its judgment whereby the Company partly won in some of the cases. In September 2022, the Company filed appeals to the third instance, and the former incidental civil lawsuits are pending with the Supreme Court. As the construction and equipment had been derecognised from past financial statements through depreciation, impairment and loss from disposal, the above cases have no significant effect on the Company’s financial situation.

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(2) Commitments

As of December 31, 2023, the Group’s capital expenditure contracted for at the balance sheet date but not incurred amounted to $89,058.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

(1) Refer to Notes 6(18) and 6(23) for details.
(2) On February 27, 2024, the Company’s board of directors resolved not to proceed with the capital increase by cash through the issuance of up to 80 million shares of stock either through private placement or public offering, as resolved by the shareholders during their meeting last May 29, 2023, for the purpose of developing strategic alliances, increasing working capital, etc. However, in order for the Company to have the flexibility to respond to changes in the industry and the economy, and in line with the practice of the competent authority to review the plans of companies to raise capital, the Company’s board of directors proposed another resolution for the capital increase.
(3) For the purpose of developing strategic alliances and increasing working capital, the Company’s board of directors during its meeting on February 27, 2024 resolved to increase capital through the issuance of up to 80 million shares of stock or depository receipts with a proposed denomination of NT$10 per share through private placement or public offering.
(4) On February 27, 2024, the Board of Directors resolved the continuance of purchasing common shares of HannStar Display Corporation from the open market in batches up to a maximum of $1,200,000.

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. To maintain or adjust the capital structure, the Company adjusted the capital structure through the issuance of new shares to borrow or repay loans.

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(2) Financial instruments

A. Financial instruments by category

December 31, 2023 December 31, 2022

Financial assets

Financial assets	December31,2023	December31,2022
Financial assets at fair value through profit or loss (current and non-current) Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost (current and non-current) Accounts receivable (including related parties) Other receivables (including related parties) Other financial assets Financial liabilities Financial liabilities at amortised cost Notes payable Accounts payable (including related parties) Other payables (including related parties) Bonds payable Long-term borrowings (Note) Lease liability (Note)	517,243 $ 590,367 $ 1,831,199 $ 474,899 125,024 12,719 46,637 2,490,478 $ 424 $ 72,154 301,816 1,500,000 2,256,429 4,130,823 $ 432,258 $	319,359 $
		553,821 $
		1,814,501 $ 917,934 293,071 15,615 45,031
		3,086,152 $
		502 $ 154,427 361,681 1,500,000 2,150,543
		4,167,153 $
		463,160 $

Note: Including current portion.

B. Financial risk management policies
(a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Group, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk.
(b) Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides

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written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

C. Significant financial risks and degrees of financial risks
(a) Market risk

Exchange rate risk

i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD and JPY. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD and JPY expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.
iii. The Group’s businesses involve some non-functional currency operations (the Group’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December 31,2023	December 31,2023	December 31,2023
Bookvalue (NTD) 145,143 $ 2,582 33,223 22,568	Sensitivityanalysis
	Degree of variation 1% 1% 1% 1%	Effect on profit Effect on other comprehensive or loss income 1,451 $ - $ 26 - 332 - 226 -

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December 31,2022	December 31,2022	December 31,2022
Bookvalue (NTD) 341,582 $ 18,480 32,957 48,257	Sensitivityanalysis
	Degree of Effect on profit variation or loss 1% 3,416 $ 1% 185 1% 330 1% 483	Effect on other comprehensive income
		- $ - - -

iv. Total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2023 and 2022, amounted to $8,210 and $40,227, respectively.

Price risk

i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.
ii. The Group’s investments in equity securities and funds comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased / decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased / decreased by $5,165 and $3,194, respectively. Other components of equity would have increased / decreased by $5,904 and $5,538, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

The Group’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Group to cash flow interest rate risk. Group policy is to maintain at least 1~3% of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During 2023 and 2022, the Group’s borrowings at variable rate were mainly denominated in New Taiwan dollars.

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(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortised cost, at fair value through profit or loss.
ii. The Group adopts the assumption that the default occurs when the contract payments are past due over 120 days.
iii. The Group adopts the following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;

(iii) Default or delinquency in interest or principal repayments.

v. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. On December 31, 2023 and 2022, the Group had no written-off financial assets that are still under recourse procedures.
vi. The methods used by the Group in assessing the expected credit risk of accounts receivable were as follows:
(i) Individually estimated expected credit loss according to individual significant accounts receivable which are considered on default;
(ii) Other customers’ accounts receivable were classified based on the Group's credit rating standards. The Group applies different loss rate methodology and provision matrix to estimate the expected credit loss of different groups.
(iii) Loss rates are calculated based on past and current information, taking into account forward-looking information provided by the Basel Committee on Banking Supervision.

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(iv) On December 31, 2023 and 2022, the provision loss for accounts receivable which were individually estimated by loss rate methodology and provision matrix were as follows:

follows:
December31,2023 Expected loss rate Total book value December31,2022 Expected loss rate Total book value	Group1 0.03%~100% - $ Group1 0.03%~100% - $	Group2 0.03% 124,297 $ Group2 0.03% 293,044 $	Total
			124,297 $
			Total
			293,044 $

Group 1: For customers with impairment indications, individual expected credit loss is determined through considering the claim order of insurance and debts.

Group 2: Long-term customers with good credit history.

vii. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:

At January 1 Reversal of impairment loss ( At December 31	2023 2022 Accountsreceivable Accountsreceivable 90 $ 100 $ 57) 10) ( 33 $ 90 $

(c) Liquidity risk

i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.

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ii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities were as follows:

Non-derivative financial liabilities:

December 31, 2023 Notes payable Accounts payable (including related parties) Other payables (including related parties) Current tax liabilities Lease liability Other current liabilities Bonds payable Long-term borrowings December 31, 2022 Notes payable Accounts payable (including related parties) Other payables (including related parties) Current tax liabilities Lease liability Other current liabilities Bonds payable Long-term borrowings	Less than 1year 424 $ 72,154 301,816 191 30,044 13,402 8,010 412,290 Less than 1year 502 $ 154,427 361,681 103 30,009 6,652 8,010 208,271	Between 2 and3years - $ - - - 63,842 - 1,516,020 802,946 Between 2 and3years - $ - - - 63,039 - 16,020 628,004	Between 3 and4years - $ - - - 64,471 - - 398,188 Between 3 and4years - $ - - - 63,915 - 1,508,010 497,005	Over 5years
				- $ - - - 273,901 - - 812,089 Over 5years
				- $ - - - 306,197 - - 995,193

iii. In order to repay the borrowings, the Group plans to issue share of stocks through public offering or private placement. Refer to Note 6(16)C for details.

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks is included in Level 1.

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Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in forward foreign exchange contracts is included in Level 2.
Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market and beneficiary certificates is included in Level 3.
B. Financial instruments not measured at fair value

Except for those listed in the table below, the carrying amounts of cash and cash equivalents, financial assets at amortised cost, accounts receivable (including related parties), other receivables (including related parties), other financial assets - current, notes payable, accounts payable (including related parties), other payables (including related parties) and lease liabilities are approximate to their fair values.

	December	31,2023
Bookvalue 1,500,000 $ 2,256,429 3,756,429 $		Fairvalue
	Level 1 - $ - - $ December	Level 2 Level3 1,307,923 $ - $ - 2,003,251 1,307,923 $ 2,003,251 $ 31,2022
Bookvalue 1,500,000 $ 2,150,543 3,650,543 $		Fairvalue
	Level 1 - $ - - $	Level 2 Level3 1,262,123 $ - $ - 1,858,726 1,262,123 $ 1,858,726 $

Note: Including current portion.

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C. Financial and non-financial instruments measured at fair value
(a) The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities at December 31, 2023 and 2022 are as follows:

December 31, 2023 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks Beneficiary certificates Unlisted stocks Non-hedging derivatives Financial assets at fair value through other comprehensive income Listed and emerging stocks December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Listed stocks Beneficiary certificates Unlisted stocks Non-hedging derivatives Financial assets at fair value through other comprehensive income Listed and emerging stocks	Level 1 Level 2 274,352 $ - $ - - - - - 707 590,367 - 864,719 $ 707 $ 123,121 $ - $ - - - - - 48 553,821 - 676,942 $ 48 $	Level3 Total - $ 274,352 $ 132,937 132,937 109,247 109,247 - 707 - 590,367 242,184 $ 1,107,610 $ - $ 123,121 $ 105,171 105,171 91,019 91,019 - 48 - 553,821 196,190 $ 873,180 $

(b) The methods and assumptions the Group used to measure fair value are as follows:

i. For the instruments the Group used market quoted prices as their fair values (that is, Level 1), the Group uses the closing price of the listed shares as fair value.
ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the consolidated balance sheet date.

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iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Group adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
D. On December 31, 2023 and 2022, there was no transfer between Level 1 and Level 2.
E. For the years ended December 31, 2023 and 2022, there was no transfer into or out from Level 3.
F. Finance and accounting segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the fair value. The Group’s finance and accounting department use valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer to assess non-current assets held for sale.
H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

	December 31, 2023	December 31, 2023	Valuation	Significant	Range (weighted	Relationship of
		Fair value	technique	unobservable input	average)	inputs to fair value
Non-derivative equity	instrument:
Unlisted shares	$	109,247	Market	Price book ratio	0.17~5.12	The higher the multiple
			comparable	multiplier, discount		and control premium, the
			companies	for lack of		higher the fair value;
				marketability		the higher the discount for
						lack of marketability, the
						lower the fair value
Private equity		132,937	Net asset value	Not applicable	Not applicable	Not applicable
fund investment
	December 31, 2022		Valuation	Significant	Range (weighted	Relationship of
		Fair value	technique	unobservable input	average)	inputs to fair value
Non-derivative equity	instrument:
Unlisted shares	$	91,019	Market	Price book ratio	0.17~5.02	The higher the multiple
			comparable	multiplier, discount		and control premium, the
			companies	for lack of		higher the fair value;
				marketability		the higher the discount for
						lack of marketability, the
						lower the fair value
Private equity		105,171	Net asset value	Not applicable	Not applicable	Not applicable
fund investment

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13. Supplementary Disclosures

(1) Significant transactions information

A. Loans to others: Refer to table 1.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company's paid-in capital: None..
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: None.
H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting period: Refer to Notes 6(2).
J. Significant inter-company transactions during the reporting periods: None.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to table 3.

(3) Information on investments in Mainland China

A. Basic information: Refer to table 4.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

Major shareholders information: Refer to Table 5.

14. Segment Information

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the Board of Directors that are used to make strategic decisions.

(2) Measurement of segment information

The Group measures operating segment revenue and net operating profit or loss, and the Company has eliminated the impact of inter-segment transactions.

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(3) Measurement of segment information

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

Year ended December 31, 2023

	YearendedDecember31,2023	YearendedDecember31,2023
Manufacturing of touch production Revenue from external customers 1,080,347 $ Inter-segment revenue - Total segment revenue 1,080,347 $ Segment operating income (loss) 1,070,081) ($ ( Segment operating income (loss), including: Depreciation and amortisation 874,336 $ Manufacturing of touch production Revenue from external customers 2,098,527 $ Inter-segment revenue - Total segment revenue 2,098,527 $ Segment operating income (loss) 174,484) ($ Segment operating income (loss), including: Depreciation and amortisation 806,684 $	Adjustment and Hotelbusiness Others write-offs Total 168,780 $ 82,699 $ - $ 1,331,826 $ 1,069 96,050 97,119) ( - 169,849 $ 178,749 $ 97,119) ($ 1,331,826 $ 72,289) $ 90,231 $ 13,501) ($ 1,065,640) ($ 125,166 $ 38,763 $ 69,231) ($ 969,034 $ Adjustment and Hotelbusiness Others write-offs Total 235,439 $ 71,997 $ - $ 2,405,963 $ 1,253 89,330 90,583) ( - 236,692 $ 161,327 $ 90,583) ($ 2,405,963 $ 12,605 $ 73,584 $ 8,449) ($ 96,744) ($ 116,840 $ 38,027 $ 68,474) ($ 893,077 $ YearendedDecember31,2022
	Hotelbusiness 235,439 $ 1,253 236,692 $ 12,605 $ 116,840 $	Others 71,997 $ 89,330 ( 161,327 $ ( 73,584 $ ( 38,027 $ (

(4) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.

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A reconciliation of reportable segment income or loss to the income / (loss) before tax from continuing operations for the years ended December 31, 2023 and 2022 is provided as follows:

continuing operations for the years ended December 31, 2023 and 2022 is provided as follows:	continuing operations for the years ended December 31, 2023 and 2022 is provided as follows:	ber 31, 2023 and 2022 is provided as follows:	ber 31, 2023 and 2022 is provided as follows:	ber 31, 2023 and 2022 is provided as follows:
Geographical information 2023 2022 Reportable segments income / (loss) 1,142,370) ($ 161,879) ($ Other segments income / (loss) 76,730 65,135 Total segments 1,065,640) ( 96,744) ( Non-operating income and expenses 118,074 110,982 (Loss) income before tax from continuing operations 947,566) ($ 14,238 $ Years endedDecember31 Non-current Non-current Revenue assets Revenue assets China 627,717 $ - $ 939,013 $ - $ South Korea 347,446 - 1,130,362 - Taiwan 351,525 10,162,334 334,527 10,762,960 Europe 5,138 - 2,061 - 1,331,826 $ 10,162,334 $ 2,405,963 $ 10,762,960 $ Years endedDecember31 2023 2022		Years endedDecember31
				2022
				14,238 $

China South Korea Taiwan Europe
	Non-current Revenue assets 627,717 $ - $ 347,446 - 351,525 10,162,334 5,138 - 1,331,826 $ 10,162,334 $ 2023			2022
			Revenue

(5) Geographical information

(6) Major customer information

A B	Years endedDecember31	Years endedDecember31
	Revenue Location 372,605 $ China 347,446 South Korea 2023	2022
		Revenue Location 620,062 $ China 1,128,983 South Korea

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HannsTouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Loans to others

Year ended December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 1

No. （Note 1）	Creditor	Borrower	General ledger account （Note 2）	Is a related party	Maximum outstanding balance during the year ended December 31, 2023 （Note 3）	Balance at December 31, 2023 （Note 4）	Actual amount drawn down	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 5,6）	Ceiling on total loans granted （Note 7）	Note
													Item	Value
0 1 1	HannsTouch Holdings Company Guangdong Shekel Technology Co., Ltd. (formerly known as: HeXin Shang Mao) Guangdong Shekel Technology Co., Ltd. (formerly known as: HeXin Shang Mao)	GloryStone Inc. Shanghai Yesun Electronic Science& Technology Co., Ltd. Guangzhou Zeya Technology Co., Ltd.	Other receivables due from related parties Other receivables Other receivables	Yes No No	200,000 $ 6,906 2,530	200,000 $ - -	$ - 6,906 2,530	Undetermined 10.40%~11.89% 11.52%~12.09%	Necessary for short- term financing Business transaction Business transaction	$ - 7,206 2,673	Increase working capital - -	$ - - -	None None None	$ - - -	1,774,144 $ 7,206 2,673	2,661,216 $ 7,036 7,036	Note 6 Note 5, 7, 8, 9, 11 Note 5, 7, 8, 10, 11

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.
(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc.

Note 3: The upper limit of capital loan and balance of capital loans in the end of the year are the amount approved by the Board of Directors.

Note 4: The year-end balance is the remaining valid quota/amount of fund loans to others as of the end of the period.

Note 5: For HannsTouch Holdings Company and its subsidiaries, the limit of fund loans to individual entities with business transactions shall not exceed the business transaction amount of the previous six months, with the higher of the purchase or sales amount being the criterion for "business transaction amount".

Note 7: The total loans amount of HannsTouch Holdings Company or its subsidiaries shall not exceed 30% of net asset value.

Note 8: HeXin Shang Mao completed the registration of its name change in October 2023 and is now named as "Guangdong Shekel Technology Co., Ltd.".

Note 9: The fund loans from Shanghai Yesun Electronic Science& Technology Co., Ltd. have been fully repaid by its related party, Keeten Technology Co., Ltd., from September, 2023 to November, 2023, so the year-end balance is 0.

Note 10: The fund loans from Guangzhou ZeYa Electronic Technology Co., Ltd. have been fully repaid by its related party, Guangxi Guancheng Electronic Co., Ltd., in November 2023, so the year-end balance is 0.

Note 11: HannsTouch Holdings Company has approved, through the board of directors, the fund loan case for business transactions retrospectively by its subsidiary, Guangdong Shekel Technology Co., Ltd. on January 22, 2024.

Table 1

Table 2

HannsTouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		Ending	Balance
				Number of shares (in thousands)	Book value	Ownership (%)	Fair value (Note)
HannsTouch Holdings Company Golden Apple Investment Corporation GloryStone Inc.	Stock HIM International Music Inc. Union Bank of Taiwan Preferred Stock A Banyan Tree Holding Limited Fullerton Technology Co., Ltd. Farglory Land Development Co., Ltd. Winstek Semiconductor Technology Co., Ltd. Materials Analysis Technology Inc. Super Micro Computer, Inc. Winbond Electronics Corp. YH Bio Co., Ltd. Touch Cloud Inc Nfore Technology Co., Ltd. BORETECH Resource Recovery Engineering Co., Ltd. Strong-Wave Radio Technology Inc. Hannstar Display Corp. Bonds NISSAN MOTOR Co., Ltd. FINA FINANCE & TRADING Co., Ltd. Benefit certificate Lian Ding Capital Co., Ltd. Grandfull Convergence Innovation Growth Fund, L.P..C. Cypress Venture Capital III Ltd. Stock Chaiin Hotel Co., Ltd. Stock Farglory Land Development Co., Ltd. Materials Analysis Technology Inc. Bonds FINA FINANCE & TRADING Co., Ltd.	None `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Other related parties None `〞` None `〞` `〞` None None `〞` None	Financial assets at fair value through profit or loss - current `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Financial assets at fair value through profit or loss - non-current `〞` `〞` Financial assets at fair value through other comprehensive income- non-current Financial assets at amortised cost – non-current `〞` Financial assets at fair value through profit or loss - non-current `〞` `〞` Financial assets at fair value through profit or loss - current Financial assets at fair value through profit or loss - current Financial assets at amortised cost – non-current	211 141 3,614 4,000 165 276 112 2 1,500 6,973 250 1,000 425 3,333 49,820 Not applicable Not applicable Not applicable Not applicable Not applicable 2,100 58 6 Not applicable	22,472 $ 7,229 29,038 89,800 9,372 25,199 26,040 14,838 45,675 7,904 1,531	0.40% Not applicable 0.42% 3.46% 0.02% 0.20% 0.01% 3.21% 0.04% 3.40% 1.88% 2.86% 0.65% 10.38% 1.69% Not applicable Not applicable Not applicable Not applicable Not applicable 19.00% 0.007% 0.009% Not applicable	22,472 $ 7,229 29,038 89,800 9,372 25,199 26,040 14,838 45,675 7,904 1,531 51,138 $ 26,175 9,040 590,367 $ 37,461 $ 50,000 70,936 $ 41,001 21,000 13,459 $ 3,294 $ 1,395 50,000 $
					279,098 $
					51,138 $ 26,175 9,040
					86,353 $
					590,367 $
					37,461 $ 50,000
					86,934 $
					70,936 $ 41,001 21,000
					132,937 $
					13,459 $
					3,294 $ 1,395
					4,689 $
					50,000 $

Note: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Table 2

Table 3

HannsTouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Information on investees

Year ended December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Investor	Investee `（`Notes 1 and 2`）`	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December31,2023	Shares held as at December31,2023	Shares held as at December31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December31,2023	Note
				Balance as at December31,2023	Balance as at December31,2022	Number of shares	Ownership (%)	Bookvalue
HannsTouch Holdings Company `〞` `〞` `〞` `〞` GloryStone Inc. `〞` Yin Wang Investment Corporation Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.)	Richest Investment Ltd. Golden Apple Investment Corporation GloryStone Inc. Yin Wang Investment Corporation Hanns Blegrain Ltd. Flying horse on Maryland Inc. Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.) Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.) Flying horse on Maryland Inc.	Cayman Islands Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan Taiwan	Investment Investment Hotel business Investment Investment Food service Food service Food service Food service	148,434 $ 150,000 406,582 150,000 30,695 - 76,500 45,000 9,411	148,434 $ 150,000 406,582 150,000 30,695 10,200 76,500 45,000 -	4,500 15,000 33,000 15,000 1,000 - 7,650 4,500 1,720	100.00 100.00 42.31 100.00 100.00 - 51.00 30.00 86.00	- $ 126,312 424,828 144,268 24,854 101 64,517 37,951 8,834	- $ 4,867 78,889) ( 5,203) ( 5,048) ( 4,917) ( 19,894) ( 19,894) ( 4,917) (	- $ 4,867 32,906) ( 4,914) ( 5,048) ( 2,186) ( 10,146) ( 5,968) ( 577) (	Note 1 `〞` `〞` `〞` `〞` Note 2 `〞` `〞`

Note 1: The Company’s subsidiary. Note 2: The Company’s second tier subsidiary.

Table 3

HannsTouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Table 4

Accumulated Amount remitted from Taiwan Accumulated Accumulated amount of to Mainland China/ amount Ownership Investment income amount remittance from Amount remitted back of remittance held by (loss) recognised Book value of of investment Taiwan to to Taiwan for the year from Taiwan to Net income of the by the Company investments in income Mainland China ended December 31, 2023 Mainland China investee for Company for the year Mainland China remitted back to Investee in Main business Paid-in capital Investment as of January 1, Remitted to Remitted back as of December 31, the year ended (direct or ended December as of December 31, Taiwan as of Mainland China activities （ Note 1 ） method 2023 Mainland China to Taiwan 2023 December 31, 2023 indirect) 31, 2023 2023(Note 3) December 31, 2023 Note NanJin GuanXin Co. Development and $ 469,950 Note 2 $ 148,434 $ - $ - $ 148,434 $ - 31.12 $ - $ - $ - Note 4 Ltd. production of PMMA, light guide plate and related components Guangdong Shekel Provision of 29,160 Note 3 29,160 - - 29,160 (4,915) 100.00 (4,915) 23,451 - Note 6 Technology Co., Ltd. technical services (formerly known as: HeXin Shang Mao)

Accumulated amount of Investment amount approved by the remittance from Taiwan to Investment Commission of the Ministry of Ceiling on investments in Mainland China Company name Mainland China (Note 5) Economic Affairs (MOEA) imposed by the Investment Commission of MOEA HannsTouch Solution Incorporated $ 1,819,109 $ 1,819,109 $ 5,657,851

Note 1: Translated from historical exchange rate. Note 2: Reinvested through Richest Investment Ltd.

Note 3: Reinvested through Hanns Blegrain Ltd.

Note 4: In 2013, the Company’s investment in NanJin GuanXin Co. Ltd. has been reduced to $0. The cancellation of registration was completed in 2023. Additionally, it was submitted for review by the Investment Commision of the Ministry of Economic Affairs in January, 2024.

Note 5: NTD amount was translated from historical exchange rate of actual remittance.

Note 6: HeXin Shang Mao completed the registration of its name change in October 2023 and is now named as "Guangdong Shekel Technology Co., Ltd.".

Table 4

HannsTouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Major shareholders information December 31, 2023

Table 5

Name of major shareholders	Shares	Shares
	Number of shares held(shares in thousands)	Ownership (%)
Hannstar Display Corp. Huali Investment Corp.	214,639 59,440	26.76% 7.41%

Table 5

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of HannsTouch Holdings Company

Opinion

We have audited the accompanying parent company only balance sheets as of HannsTouch Holdings Company (formerly known as HannsTouch Solution Incorporated) as at December 31, 2023 and 2022, and the related parent company only statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of material accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of HannsTouch Holdings Company as at December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the audit of the parent company only financial statements section of our report. We are independent of HannsTouch Holdings Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of HannsTouch Holdings Company’s 2023 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

~2~

Key audit matter for HannsTouch Holdings Company’s 2023 parent company only financial statements are stated as follows:

Key audit matters - Impairment assessment on investment property

Description

Refer to Notes 4(17), 5(2) and 6(12) for accounting policy applied on impairment of investment property, accounting estimates and assumptions applied on the impairment assessment of tangible assets and details of impairment.

HannsTouch Holdings Company has appointed appraisers to appraise the investment property in Taipei and to determine the recoverable amount as the basis for assessing the impairment of investment property.

How our audit addressed the matter:

We understood the basis and process of management’s assessment and performed the following audit procedures in respect of the above key audit matter:

Assessed the appointed appraisers and appraisals office in conformity with the rules of qualification and independence.
Assessed the expected future income used in the experts’ appraisal report and compared with local market price and forecast documents for the industry.
Assessed the discount rate used in the experts’ appraisal report and inspected the assumptions of cost of capital with return on similar assets in the market.
Examined the parameters of valuation model in the experts’ appraisal report and setting of formulas.

~3~

Responsibilities of management and those charged with governance for the parent company only financial statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing HannsTouch Holdings Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate HannsTouch Holdings Company or to cease operations, or has no realistic alternative but to do so.

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

Auditors’ responsibilities for the audit of the parent company only financial statements

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

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

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

~4~

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of HannsTouch Holdings Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on HannsTouch Holdings Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause HannsTouch Holdings Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within HannsTouch Holdings Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

~5~

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

Chen, Ching Chang For and on Behalf of PricewaterhouseCoopers, Taiwan February 27, 2024

[Liao, Fu-Ming ]

------------------------------------------------------------------------------------------------------------------------------The accompanying parent company only financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying parent company only financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice.

As the financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~6~

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	December 31, 2023 AMOUNT % `$` `1,263,828` `10` `279,805` `2` `119,333` `1` `55,427` `1` `11,432` `-` `1,310` `-` `130,360` `1` `46,146` `-` `40,055` `-` `1,947,696` `15` `219,290` `2` `590,367` `4` `87,461` `1` `720,262` `5` `3,652,294` `27` `266,825` `2` `5,690,258` `43` `18,952` `-` `87,639` `1` `841` `-` `11,334,189` `85` `$` `13,281,885` `100`	December 31, 2022	December 31, 2022
	AMOUNT `$` `1,263,828` `279,805` `119,333` `55,427` `11,432` `1,310` `130,360` `46,146` `40,055` `1,947,696` `219,290` `590,367` `87,461` `720,262` `3,652,294` `266,825` `5,690,258` `18,952` `87,639` `841` `11,334,189` `$` `13,281,885`	AMOUNT `$` `1,592,078` `131,964` `289,569` `54,018` `11,258` `443` `171,348` `44,981` `31,550` `2,327,209` `177,958` `553,821` `86,934` `759,075` `4,182,984` `284,271` `5,727,331` `22,954` `111,351` `701` `11,907,380` `$` `14,234,589`	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventory 1476 Other current financial assets 1479 Other current assets 11XX Total current assets Non-current assets 1510 Non-current financial assets at fair value through profit or loss 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1760 Investment property - net 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets			`11` `1` `2` `1` `-` `-` `1` `-` `-`
			`16`
			`1` `4` `1` `5` `30` `2` `40` `-` `1` `-`
			`84`
			`100`

(Continued)

~7~

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity December 31, 2023
December 31, 2022
Notes
AMOUNT
%
AMOUNT
%
$
424
- $
502
-
63,843
-
139,010
1
7
5,011
-
13,058
-
6(13)
276,225
2
348,736
3
7
464
-
247
-
15,122
-
15,049
-
6(15)
372,010
3
172,754
1
9,031
-
3,735
-
742,130
5
693,091
5
6(14)
1,500,000
12
1,500,000
10
6(15) and 8
1,884,419
14
1,977,789
14
6(26)
1,131
-
-
-
262,944
2
278,162
2
20,541
-
18,693
-
3,669,035
28
3,774,644
26
4,411,165
33
4,467,735
31
6(18)
8,020,105
60
8,069,485
57
6(19)
313,740
2
312,925
2
6(20)
246,879
2
244,402
2
90,461
1
-
-
256,054
2
1,248,767
9
(
56,519)
- (
90,461 ) (
1)
6(18)
-
- (
18,264 )
-
8,870,720
67
9,766,854
69
9
11
$
13,281,885
100 $
14,234,589
100

Current liabilities
2150
Notes payable
2170
Accounts payable
2180
Accounts payable - related parties
2200
Other payables
2220
Other payables - related parties
2280
Current lease liabilities
2320
Long-term liabilities, current portion
2399
Other current liabilities
21XX
Total current liabilities
Non-current liabilities
2530
Corporate bonds payable
2540
Long-term borrowings
2570
Deferred income tax liabilities
2580
Non-current lease liabilities
2670
Other non-current liabilities
25XX
Total non-current liabilities
2XXX
Total liabilities
Equity
Share capital
3110
Common stock
Capital surplus
3200
Capital surplus
Retained earnings
3310
Legal reserve
3320
Special reserve
3350
Unappropriated retained earnings
Other equity interest
3400
Other equity interest
3500
Treasury stock
3XXX
Total equity
Significant contingent liabilities and
unrecognised contract commitments
Significant events after the balance
sheet date
3X2X
Total liabilities and equity

The accompanying notes are an integral part of these parent company only financial statements.

~8~

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except for (loss) earnings per share amounts)

Items Year ended December 31
2023
2022
Notes
AMOUNT
%
AMOUNT
%
6(21) and 7
$
1,253,509
100
$
2,255,129
100
6(6)(25) and 7
(
2,061,191) (
165) (
2,179,720) (
97)
(
807,682) (
65)
75,409
3
6(25) and 7
(
25,535) (
2) (
25,323) (
1)
(
112,227) (
9) (
112,610) (
5)
(
27,916) (
2) (
32,765) (
1)
12(2)
57
-
10
-
(
165,621) (
13) (
170,688) (
7)
(
973,303) (
78) (
95,279) (
4)
6(22)
21,039
2
11,570
-
6(23)
43,593
4
114,056
5
6(24) and 7
106,054
8
19,204
1
7
(
59,158) (
5) (
49,502) (
2)
6(8)
(
38,001) (
3)
7,760
-
73,527
6
103,088
4
(
899,776) (
72)
7,809
-
6(26)
1
-
16,963
1
($
899,775) (
72) $
24,772
1
6(3)
$
34,754
3 ($
308,237) (
14)
6(8)
(
812)
-
20
-
$
33,942
3 ($
308,217) (
14)
($
865,833) (
69) ($
283,445) (
13)
6(27)
($
1.12) $
0.03
($
1.12) $
0.03

4000
Sales revenue
5000
Operating costs
5950
Gross (loss) profit from operations
Operating expenses
6100
Selling expenses
6200
General and administrative expenses
6300
Research and development expenses
6450
Impairment gain and reversal of
impairment loss determined in
accordance with IFRS 9
6000
Total operating expenses
6900
Operating loss
Non-operating income and expenses
7100
Interest income
7010
Other income
7020
Other gains and losses
7050
Finance costs
7070
Share of profit or loss of associates
and joint ventures accounted for
using equity method, net
7000
Total non-operating income and
expenses
7900
(Loss) profit before income tax
7950
Income tax benefit
8200
(Loss) profit for the year
Other comprehensive income
Components of other comprehensive
income that will not be reclassified to
profit or loss
8316
Unrealised gains (losses) from
investments in equity instruments
measured at fair value through other
comprehensive income
Components of other comprehensive
income that will be reclassified to
profit or loss
8361
Financial statements translation
differences of foreign operations
8300
Other comprehensive income (loss)
for the year
8500
Total comprehensive loss for the year
(Loss) earnings per share (in dollars)
9750
Basic (loss) earnings per share
9850
Diluted (loss) earnings per share

The accompanying notes are an integral part of these parent company only financial statements.

~9~

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Year ended December 31, 2022 Balance at January 1, 2022 Profit for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations of 2021 earnings: Legal reserve Special reserve Cash dividends Purchase of treasury stock Balance at December 31, 2022 Year ended December 31, 2023 Balance at January 1, 2023 Loss for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations of 2022 earnings: Legal reserve Special reserve Purchase of treasury stock Share-based payments Employee share purchase plan Cancellation of treasury stock Balance at December 31, 2023	Notes		Share capital - common stock			Capital Reserves						Retained Earnings			Other EquityInterest	Other EquityInterest	Other EquityInterest		Treasury stock		Total equity
				Total capital surplus, additional paid-in capital		Capital Surplus, changes in ownership interests in subsidiaries		Capital surplus, others		Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(20) 6(18) 6(20) 6(18) 6(18)	`$ 8,069,485` `-` `-` `-` `-` `-` `-` `-` `$ 8,069,485` `$ 8,069,485` `-` `-` `-` `-` `-` `-` `-` `-` `(` `49,380` `)` `$ 8,020,105`		`$` `309,035` `-` `-` `-` `-` `-` `-` `-` `$` `309,035` `$` `309,035` `-` `-` `-` `-` `-` `-` `-` `-` `(` `1,891 )` `$` `307,144`		`$` `919` `-` `-` `-` `-` `-` `-` `-` `$` `919` `$` `919` `-` `-` `-` `-` `-` `-` `-` `-` `-` `$` `919`	`$` `2,971` `-` `-` `-` `-` `-` `-` `-` `$` `2,971` `$` `2,971` `-` `-` `-` `-` `-` `-` `207` `(` `1 )` `2,500` `$` `5,677`			`$` `144,361` `-` `-` `-` `100,041` `-` `-` `-` `$` `244,402` `$` `244,402` `-` `-` `-` `2,477` `-` `-` `-` `-` `-` `$` `246,879`	`$` `6,457` `-` `-` `-` `-` `(` `6,457 )` `-` `-` `$` `-` `$` `-` `-` `-` `-` `-` `90,461` `-` `-` `-` `-` `$` `90,461`		`$ 1,600,011` `24,772` `-` `24,772` `(` `100,041 )` `6,457` `(` `282,432 )` `-` `$ 1,248,767` `$ 1,248,767` `(` `899,775 )` `-` `(` `899,775 )` `(` `2,477 )` `(` `90,461 )` `-` `-` `-` `-` `$` `256,054`		`$` `-` `-` `20` `20` `-` `-` `-` `-` `$` `20` `$` `20` `-` `(` `812 )` `(` `812 )` `-` `-` `-` `-` `-` `-` `($` `792 )`	`$` `217,756` `-` `(` `308,237 )` `(` `308,237 )` `-` `-` `-` `-` `($` `90,481 )` `($` `90,481 )` `-` `34,754` `34,754` `-` `-` `-` `-` `-` `-` `($` `55,727 )`		`$` `-` `-` `-` `-` `-` `-` `-` `(` `18,264 )` `($` `18,264 )` `($` `18,264 )` `-` `-` `-` `-` `-` `(` `37,738 )` `-` `7,231` `48,771` `$` `-`		`$ 10,350,995` `24,772` `(` `308,217 )` `(` `283,445 )` `-` `-` `(` `282,432 )` `(` `18,264 )` `$ 9,766,854` `$ 9,766,854` `(` `899,775 )` `33,942` `(` `865,833 )` `-` `-` `(` `37,738 )` `207` `7,230` `-` `$ 8,870,720`

The accompanying notes are an integral part of these parent company only financial statements.

~10~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES
(Loss) profit before tax
Adjustments
Adjustments to reconcile profit (loss)
Depreciation

Expected credit gain on doubtful accounts

Amortisation

Interest expense
Interest income

Dividend income

Share-based payments cost

(Gain) loss on financial assets at fair value
through profit or loss

Share of profit or loss of associates and joint
ventures accounted for under equity method

Gain on disposals of property, plant and
equipment

Gain on lease modification

Changes in operating assets and liabilities
Changes in operating assets
Financial assets at fair value through profit or
loss
Accounts receivable
Accounts receivable - related parties
Other receivables
Other receivables - related parties
Inventory
Other current assets
Changes in operating liabilities
Notes payable
Accounts payable
Accounts payable - related parties
Other payables
Other payables - related parties
Other current liabilities
Other non-current liabilities
Cash inflow generated from operations
Interest received
Dividends received
Interest paid
Income taxes refund received (paid)
Net cash flows from operating activities Year ended December 31
Notes
2023
2022
($
899,776 ) $
7,809
6(25)
903,188
834,830
12(2)
(
57 ) (
10 )
6(25)
9,778
9,786
59,158
49,502
6(22)
(
21,039 ) (
11,570 )
6(23)
(
9,094 ) (
52,972 )
6(17)
229
-
6(2)(24)
(
96,174 )
21,048
6(8)
38,001 (
7,760 )
6(24)
(
2,282 )
-
6(24)
(
3 )
-
(
85,904 ) (
94,384 )
170,293
30,719
(
1,409 ) (
1,170 )
3,796 (
8,957 )
(
867 )
1,842
40,988
31,900
(
7,144 ) (
1,388 )
(
78 ) (
1,201 )
(
75,167 ) (
19,042 )
(
8,047 )
13,058
(
17,253 ) (
46,359 )
217 (
903 )
5,296 (
34,337 )
1,848
2,365
8,498
722,806
20,633
11,442
9,094
64,390
(
52,734 ) (
43,253 )
19,920 (
25,503 )
5,411
729,882

(Continued)

~11~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial instruments at fair value
through profit or loss
Acquisition of non-current financial assets at fair
value through other comprehensive income
Decrease in current financial assets at amortised
cost
Increase in non-current financial assets at
amortised cost
Acquisition of investments accounted for under
equity method

Acquisition of property, plant and equipment

Proceeds from disposal of property, plant and
equipment
Acquisition of intangible assets
Acquisition of investment property

Increase in other current financial assets
Increase in other non-current assets
Net cash flows (used in) from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt

Repayment of long-term debt

Repayment of lease liabilities

Exercise of employee stock options
Cash dividends paid

Payments to acquire treasury shares

Net cash flows from (used in) financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year

Cash and cash equivalents at end of year Year ended December 31
Notes
2023
2022
($
7,095 ) ($
75,598 )
(
1,792 ) (
83,921 )
-
1,571,000
(
527 ) (
86,934 )
6(8)
- (
30,695 )
6(28)
(
381,101 ) (
561,883 )
11,416
-
(
5,776 ) (
17,815 )
6(28)
(
1,491 ) (
3,613 )
(
1,165 ) (
24 )
(
140 ) (
132 )
(
387,671 )
710,385
6(29)
281,140
-
6(29)
(
175,254 ) (
1,072,754 )
6(29)
(
21,346 ) (
21,378 )
7,208
-
6(20)
- (
282,432 )
6(18)
(
37,738 ) (
18,264 )
54,010 (
1,394,828 )
(
328,250 )
45,439
6(1)
1,592,078
1,546,639
6(1)
$
1,263,828 $
1,592,078

The accompanying notes are an integral part of these parent company only financial statements.

~12~

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) NOTES TO THE PARENT COMPANY ONLY FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. History and Organisation

The Company (formerly known as HannsTouch Solution Incorporated) was incorporated in September 1999 as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.). On June 12, 2023, the Ministry of Economic Affairs approved the change of company name to HannsTouch Holdings Company (the ‘Company’). The Company is primarily engaged in the manufacture and sales of touch products and lease of property. The common shares of the Company have been listed on the Taiwan Stock Exchange since September 27, 2002.

The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

These financial statements were authorised for issuance by the Board of Directors on February 27, 2024.

3. Application of New Standards, Amendments and Interpretations

New standards, interpretations and amendments endorsed by the FSC and became effective from 2023 are as follows:

New standards, interpretations and amendments endorsed by the FSC 2023 are as follows:	and became effective fr
	Effective date by
	International
	Accounting
New Standards,InterpretationsandAmendments	StandardsBoard
Amendments to IAS 1, ‘Disclosure of accounting policies’	January 1, 2023
Amendments to IAS 8, ‘Definition of accounting estimates’	January 1, 2023
Amendments to IAS 12, ‘Deferred tax related to assets and liabilities	January 1, 2023
arising from a single transaction’
Amendments to IAS 12, ‘International tax reform - pillar two model	May 23, 2023
rules’

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

~13~

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC

but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC and will become effective from 2024 are as follows:

2024 are as follows:
New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’ Amendments to IAS 1, ‘Classification of liabilities as current or non- current’ Amendments to IAS 1, ‘Non-current liabilities with covenants’ Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’	January 1, 2024 January 1, 2024 January 1, 2024 January 1, 2024

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

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

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

Accounting Standards as endorsed by the FSC are as follows:
New Standards,InterpretationsandAmendments	Effective date by International Accounting StandardsBoard
Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’ Amendments to IAS 21, ‘Lack of exchangeability’	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025

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

4. Summary of Material Accounting Policies

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

(1) Compliance statement

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

~14~

(2) Basis of preparation

A. Except for the following items, the parent company only financial statements have been prepared under the historical cost convention:
(a) Financial assets (including derivative instruments) at fair value through profit or loss.
(b) Financial assets at fair value through other comprehensive income.
B. The preparation of financial statements in conformity with the International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations as endorsed by the FSC (collectively referred herein as the “IFRSs”) requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Company classified’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial parent company only statements are disclosed in Note 5.

(3) Foreign currency translation

Items included in the financial statements of each of the Company’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The parent company only financial statements are presented in NTD, which is the Company’s functional and presentation currency.

Foreign currency transactions and balances

(a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognised in profit or loss in the period in which they arise.
(b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognised in profit or loss.
(c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognised in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.
(d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘other gains and losses’.

~15~

(4) Classification of current and non-current items

A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
(a) Assets arising from operating activities that are expected to be realised, or are intended to be sold or consumed within the normal operating cycle;
(b) Assets held mainly for trading purposes;
(c) Assets that are expected to be realised within twelve months from the balance sheet date;
(d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.
B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
(a) Liabilities that are expected to be settled within the normal operating cycle;
(b) Liabilities arising mainly from trading activities;
(c) Liabilities that are to be settled within twelve months from the balance sheet date;
(d) Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

(5) Cash equivalents

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

A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.
B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Company measures the financial assets at fair value and recognises the transaction costs in profit or loss. The Company subsequently measures the financial assets at fair value, and recognises the gain or loss in profit or loss.

~16~

D. The Company recognises the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

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

A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Company has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income:
(a) The objective of the Company’s business model is achieved both by collecting contractual cash flows and selling financial assets; and
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. The Company subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Company and the amount of the dividend can be measured reliably.

(8) Financial assets at amortised cost

A. Financial assets at amortised cost are those that meet all of the following criteria:
(a) The objective of the Company’s business model is achieved by collecting contractual cash flows.
(b) The assets’ contractual cash flows represent solely payments of principal and interest.
B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using settlement date accounting.
C. At initial recognition, the Company measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.
D. The Company’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

~17~

(9) Accounts receivable

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

(10) Impairment of financial assets

For financial assets at amortised cost including accounts receivable, at each reporting date, the Company recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Company recognises the impairment provision for lifetime ECLs.

(11) Derecognition of financial assets

The Company derecognises a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

－ (12) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(13) Inventories

(14) Investments accounted for using equity method

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

~18~

B. Unrealised gains on transactions between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Company.
C. The Company’s share of its subsidiaries’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Company’s share of losses in a subsidiary equals or exceeds its interest in the subsidiary, the Company recognise loss continuously in proportion to its ownership.
D. Pursuant to the Regulations Governing the Preparation of Financial Reports by Securities Issuers, profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the financial statements prepared with basis for consolidation. Owners’ equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the financial statements prepared with basis for consolidation.

(15) Property, plant and equipment

A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalised.
B. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
C. Property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 2~35 years Machinery equipments 2~10 years Furniture and fixtures 2~6 years Other equipments 2~6 years

~19~

(16) Leasing arrangements (lessee) － right-of-use assets / lease liabilities

A. Leases are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Company. For short-term leases or leases of low-value assets, lease payments are recognised as an expense on a straight-line basis over the lease term.
B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of fixed payments, less any lease incentives receivable.

The Company subsequently measures the lease liability at amortised cost using the interest method and recognises interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognised as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

C. At the commencement date, the right-of-use asset is stated at cost comprising the following:
(a) The amount of the initial measurement of lease liability;
(b) Any lease payments made at or before the commencement date; and
(c) Any initial direct costs incurred by the lessee.

D. For lease modifications that decrease the scope of the lease, the lessee shall decrease the carrying amount of the right-of-use asset and remeasure the lease liability to reflect the partial or full termination of the lease, and recognise the difference in profit or loss.

(17) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 25 years.

(18) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 2 to 6 years.

~20~

(19) Impairment of non-financial assets

The Company assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

(20) Borrowings

A. Borrowings comprise long-term bank borrowings. Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in profit or loss over the period of the borrowings using the effective interest method.
B. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

(21) Notes and accounts payable

A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.
B. The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(22) Bonds payable

Ordinary corporate bonds issued by the Company are initially recognised at fair value less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is presented as an addition to or deduction from bonds payable, which is amortised to profit or loss over the period of bond circulation using the effective interest method as an adjustment to ‘finance costs’.

(23) Derecognition of financial liabilities

A financial liability is derecognised when the obligation specified in the contract is either discharged or cancelled or expires.

~21~

(24) Non-hedging derivatives

(25) Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, as a deduction of sales revenue in the period when related products are sold.

(26) Employee benefits

A. Short-term employee benefits

B. Pensions
(a) Defined contribution plan

(b) Defined benefit plan

i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plan is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date).
ii. Remeasurements arising on defined benefit plan is recognised in other comprehensive income in the period in which they arise and are recorded as retained earnings.
iii. Past service costs are recognised immediately in profit or loss.

~22~

C. Employees’ compensation and directors’ remuneration

- (27) Employee share based payment

For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. Ultimately, the amount of compensation cost recognised is based on the number of equity instruments that eventually vest.

(28) Income taxes

A. The tax expense for the period comprises current and deferred tax. Tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or items recognised directly in equity, in which cases the tax is recognised in other comprehensive income or equity.
B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
C. Deferred tax is recognised, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only balance sheet. Deferred tax is determined using tax rates that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled.
D. Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognised and recognised deferred tax assets are reassessed.

~23~

(29) Share capital

A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.
B. Where the Company repurchases the Company’s equity share capital that has been issued, the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders. Where such shares are subsequently reissued, the difference between their book value and any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the Company’s equity holders.

(30) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are approved by the Company’s shareholders. Cash dividends are recorded as liabilities.

(31) Revenue recognition

A. Sales of goods
(a) The Company manufactures and sells touch panel and related products. Sales are recognised when control of the products has transferred, being when the products are delivered to the buyer, the buyer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the buyer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the buyer, and either the buyer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied.
(b) Sales revenue of products was recognised based on the contract price net of sales returns and discount. The sales returns and discounts are estimated based on the anticipated annual sales quantities. Accumulated experience is used to estimate and provide for the sales returns and discounts, using the anticipated annual sales quantities, and revenue is only recognised to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognised for expected sales returns and discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the control was transferred with a credit term of 60 days, which is consistent with market practice.
(c) A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

~24~

B. Leases

The Company is engaged in the leasing of certain property classified as operating leases based on the lease condition. The lease payments received during the leasing period on a straight line basis are recognised as property lease income.

(32) Government grants

Government grants are recognised at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Company recognises expenses for the related costs for which the grants are intended to compensate.

5. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

The preparation of these parent company only financial statements requires management to make critical judgements in applying the Company’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is addressed below:

(1) Critical judgements in applying the Company’s accounting policies

Investment property

The Company uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own-use portion accounts for the immaterial property.

(2) Critical accounting estimates and assumptions

A. Impairment assessment of tangible assets
The Company assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of company strategy might cause material impairment on assets in the future.
B. Realisability of deferred tax assets
Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and

~25~

profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets.

As at December 31, 2023, the Company recognised deferred tax assets amounting to $ 87,639.

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits Cash equivalents Bills with repurchase agreement	December31,2023 22 $ 113,806 1,050,000 100,000 1,263,828 $	December31,2022
		22 $ 292,056 1,300,000 -
		1,592,078 $

A. The Company transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.
B. Certain cash and cash equivalents which were pledged as collaterals and restricted have been transferred to other financial assets. Refer to Notes 6(7) and 8 for details.

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

Items Current items: Financial assets mandatorily measured at fair value through profit or loss Listed stocks Unlisted stocks Non-hedging derivatives Valuation adjustment Items Non-current items: Financial assets mandatorily measured at fair value through profit or loss Unlisted stocks Beneficiary certificates Valuation adjustment	December31,2023 237,385 $ 39,052 707 277,144 2,661 ( 279,805 $ December31,2023 72,100 $ 100,592 172,692 46,598 219,290 $	December31,2022 124,962 $ 39,052 48 164,062 32,098) 131,964 $ December31,2022 62,100 $ 103,498 165,598 12,360 177,958 $

~26~

A. The nature of financial assets and liabilities at fair value through profit or loss are as follows:
(a) Equity instruments: including listed and unlisted stocks.
(b) Beneficiary certificates: including foreign and domestic limited partnership.
(c) Derivative instruments: including forward foreign exchange contracts.
B. Amounts recognised in profit or loss in relation to financial assets / liabilities at fair value through profit or loss are listed below:

Financial assets mandatorily measured at fair value through profit or loss Equity instruments Beneficiary certificates Derivative instruments (	2023 2022 68,054 $ 8,001 $ 30,670 3,809) ( 2,550) 25,240) ( 96,174 $ 21,048) ($ Years endedDecember31

C. The Company entered into contracts relating to derivative financial assets which were not accounted for under hedge accounting. The information is listed below:

Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD Derivative financial instruments Presale forward exchange contracts -Sell USD and buy NTD	December31,2023	December31,2023
	(Notionalprincipal) (In thousands) Contractperiod USD 1,300 $ 2023/12/20-2024/2/6 Contract amount December31,2022	Contractperiod
	(Notionalprincipal) USD
	(Notionalprincipal) (In thousands) USD 1,500 $ Contract amount	Contractperiod
	(Notionalprincipal) USD
		2022/12/29-2023/1/31

The Company entered into forward foreign exchange contracts to sell to hedge exchange rate risk. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

~27~

D. No financial assets at fair value through profit or loss of the Company were pledged to others.
E. Information relating to credit risk of financial assets at fair value through profit or loss is provided in Note 12(2).

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

Items Non-current items: Equity instruments Listed stocks Valuation adjustment (	December31,2023 646,094 $ 55,727) ( 590,367 $	December31,2022 644,302 $ 90,481) 553,821 $

A. The Company has selected to classify the equity investments that are considered to be steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $590,367 and $553,821 as of December 31, 2023 and 2022, respectively.
B. Amounts recognised in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognised in other comprehensive income Dividend income recognised in profit or loss Held at end of year	Years endedDecember31	Years endedDecember31
	2023 34,754 $ - $	2022
		308,237 $
		46,760 $

C. No financial assets at fair value through other comprehensive income of the Company were pledged to others.
D. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

(4) Financial assets at amortised cost

Items Non-current items: Corporate bonds	December31,2023 December31,2022 87,461 $ 86,934 $

A. For the years ended December 31, 2023 and 2022, interest income arising from financial assets at amortised cost amounted to $3,442 and $4,878, respectively.
B. No financial assets at amortised cost of the Company were pledged to others.

~28~

C. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at amortised cost held by the Company was $87,461 and $86,934, respectively.
D. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2).

(5) Accounts receivable

Accounts receivable Less: Allowance for uncollectible accounts (	December31,2023 119,366 $ 33) ( 119,333 $	December31,2022 289,659 $ 90) 289,569 $

A. As of December 31, 2023 and 2022, the estimated sales discounts and allowances were $533 and $9,142, respectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.
B. The ageing analysis of accounts receivable that were past due but not impaired is as follows:

Not past due Up to 30 days	December31,2023 December31,2022 112,476 $ 269,280 $ 6,890 20,379 119,366 $ 289,659 $

The above ageing analysis was based on past due date.

C. As of December 31, 2023 and 2022, accounts receivable were all from contracts with customers. As of January 1, 2022, the balance of accounts receivable from contracts with customers amounted to $320,278.
D. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Company’s accounts receivable was $119,366 and $289,659, respectively.
E. Information relating to credit risk of accounts receivable is provided in Note 12(2).

~29~

(6) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods	December31,2023
	Allowance for Cost valuation loss 86,862 $ 27,260) ($ 36,293 - 45,672 11,207) ( 168,827 $ 38,467) ($ December31,2023	Bookvalue
		59,602 $ 36,293 34,465
		130,360 $

	Allowance for Cost valuation loss 87,758 $ 12,323) ($ 1,725 - 124,601 30,413) ( 214,084 $ 42,736) ($	Bookvalue
		75,435 $ 1,725 94,188
		171,348 $

The cost of inventories recognised as expense for the year:

			Years ended	December	31
			2023		2022
Cost of goods sold		$	1,247,764	$	1,710,002
Unallocated overhead expense			798,840		429,857
(Gain on reversal of) loss on decline in market	(		4,269)		33,524
value
Scrapped inventory			18,856		6,337
		$	2,061,191	$	2,179,720

The gain on reversal of market price decline of inventory in 2023 was due to the Company’s active monitoring on obsolete and slow-moving inventories.

(7) Other current financial assets

Other current financial assets
Time deposits pledged Restricted bank deposits	December31,2023 30,005 $ 16,141 46,146 $	December31,2022
		28,919 $ 16,062
		44,981 $

Refer to Note 8 for further information on other current financial assets pledged to others as collateral.

~30~

(8) Investments accounted for using equity method

2023
At January 1
759,075
$ Addition of investments accounted for using
equity method
-
Share of profit or loss of investments accounted
for using equity method
38,001)
(
Cumulative translation adjustment for using
equity method
812)
(
Earnings distribution of investments accounted
for using equity method
-
(
At December 31
720,262
$ Subsidiaries
December31,2023
GloryStone Inc. (GloryStone)
424,828
$ Golden Apple Investment Corporation (Golden
Apple Investment)
126,312
Yinwang Investment Co., Ltd. (Yinwang
Investment)
144,268
Guangdong Shekel Technology Co., Ltd. (Hanns
Blegrain Ltd.)
24,854
720,262
$

2022
732,018
$ 30,695
7,760
20
11,418)

759,075
$ December31,2022
457,734
$ 121,445
149,182
30,714
759,075
$

Refer to Note 4(3) in the consolidated financial statements for the year ended December 31, 2023 for the information regarding the Company’s subsidiaries.

~31~

(9) Property, plant and equipment

															Unfinished
														construction and
			Buildings and			Machinery and			Furniture and					equipment under
			structures			equipment			fixtures		Other	equipment			acceptance			Total
January 1, 2023
Cost		$	5,531,947		$	8,785,603		$	39,251		$	65,978		$	166,303		$	14,589,082
Accumulated depreciation
and impairment	(		2,762,475)	(		7,567,153)	(		14,115)	(		62,355)			-	(		10,406,098)
		$	2,769,472		$	1,218,450		$	25,136		$	3,623		$	166,303		$	4,182,984
2023
At January 1		$	2,769,472		$	1,218,450		$	25,136		$	3,623		$	166,303		$	4,182,984
Additions			-			-			-			-			325,890			325,890
Disposals	(		1)			-	(		9,133)			-			-	(		9,134)
Reclassifications			39,638			76,474			30,804			7,325	(		154,241)			-
Depreciation	(		303,911)	(		527,418)	(		13,247)	(		2,870)			-	(		847,446)
At December 31		$	2,505,198		$	767,506		$	33,560		$	8,078		$	337,952		$	3,652,294
December 31, 2023
Cost		$	5,566,275		$	8,288,475		$	60,387		$	67,993		$	337,952		$	14,321,082
Accumulated depreciation
and impairment	(		3,061,077)	(		7,520,969)	(		26,827)	(		59,915)			-	(		10,668,788)
		$	2,505,198		$	767,506		$	33,560		$	8,078		$	337,952		$	3,652,294

~32~

January 1, 2022 Cost Accumulated depreciation and impairment ( 2022 At January 1 Additions Reclassifications Depreciation ( At December 31 December 31, 2022 Cost Accumulated depreciation and impairment (	Buildings and structures 5,382,280 $ 2,467,895) ( 2,914,385 $ 2,914,385 $ - 149,667 294,580) ( 2,769,472 $ 5,531,947 $ 2,762,475) ( 2,769,472 $	Machinery and equipment 8,113,460 $ 7,091,234) ( 1,022,226 $ 1,022,226 $ - 672,143 475,919) ( 1,218,450 $ 8,785,603 $ 7,567,153) ( 1,218,450 $	Furniture and fixtures 18,315 $ 6,842) ( 11,473 $ 11,473 $ - 20,936 7,273) ( 25,136 $ 39,251 $ 14,115) ( 25,136 $	Unfinished construction and equipment under Otherequipment acceptance 64,814 $ 431,150 $ 60,485) - ( 4,329 $ 431,150 $ 4,329 $ 431,150 $ - 579,063 1,164 843,910) ( 1,870) - ( 3,623 $ 166,303 $ 65,978 $ 166,303 $ 62,355) - ( 3,623 $ 166,303 $	Total 14,010,019 $ 9,626,456) 4,383,563 $ 4,383,563 $ 579,063 - 779,642) 4,182,984 $ 14,589,082 $ 10,406,098) 4,182,984 $

Note 1: Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral.

Note 2: There is no capitalization of interests incurred on property, plant and equipment in 2023 and 2022.

~33~

－ (10) Lease transactions lessee

A. The Company leases various assets including land, machinery and business vehicles. Rental contracts are typically made for periods of 3 to 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.
B. Short-term leases with a lease term of 12 months or less comprise office and parking lot. Lowvalue assets comprise foreign warehouse and dormitory.
C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Transportation equipment (Business vehicles) Other equipment Land Transportation equipment (Business vehicles) Other equipment	December31,2023 December31,2022 Bookvalue Bookvalue 261,429 $ 276,732 $ 66 480 5,330 7,059 266,825 $ 284,271 $ 2023 2022 Depreciationcharge Depreciationcharge 15,303 $ 15,303 $ 289 321 1,729 1,728 17,321 $ 17,352 $ Years endedDecember31	December31,2023 December31,2022 Bookvalue Bookvalue 261,429 $ 276,732 $ 66 480 5,330 7,059 266,825 $ 284,271 $ 2023 2022 Depreciationcharge Depreciationcharge 15,303 $ 15,303 $ 289 321 1,729 1,728 17,321 $ 17,352 $ Years endedDecember31

		2023 2022 Depreciationcharge Depreciationcharge 15,303 $ 15,303 $ 289 321 1,729 1,728 17,321 $ 17,352 $

D. The movements of right-of-use assets of the Company during 2023 and 2022 are as follows:

2023

	2023	2023	2023
At January 1 Modification Depreciation ( At December 31 At January 1 Additions Depreciation ( At December 31	Transportation equipment Other equipment Land (Business vehicles) (Tank) Total 276,732 $ 480 $ 7,059 $ 284,271 $ - 125) ( - 125) ( 15,303) 289) ( 1,729) ( 17,321) ( 261,429 $ 66 $ 5,330 $ 266,825 $ Transportation equipment Other equipment Land (Business vehicles) (Tank) Total 275,939 $ 801 $ 8,787 $ 285,527 $ 16,096 - - 16,096 15,303) 321) ( 1,728) ( 17,352) ( 276,732 $ 480 $ 7,059 $ 284,271 $ 2022
	Land ( 275,939 $ 16,096 15,303) ( 276,732 $	Transportation equipment Business vehicles) 801 $ - 321) ( 480 $	Other equipment (Tank) 8,787 $ - 1,728) ( 7,059 $

~34~

E. The information on profit and loss accounts relating to lease contracts is as follows:

			Years ended	December31
			2023	2022
Items affecting profit or loss
Interest expense on lease liabilities		$	6,329	$	6,658
Expense on short-term lease contracts			2,461		2,453
Expense on leases of low-value assets			7,913		9,138
Gain on lease modification	(		3)		-

F. For the years ended December 31, 2023 and 2022, the Company’s total cash outflow for leases were $31,720 and $32,969, respectively.

(11) Leasing arrangements - lessor

A. The Company leases various assets including buildings. Rental contracts are typically made for periods of 1 and 20 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
B. For the years ended December 31, 2023 and 2022, the Company recognised rent income based on the operating lease agreement, which does not include variable lease payments, as follows:

(12)	Investment property Rent income	Years endedDecember31	Years endedDecember31
		2023 2,180 $	2022
			2,020 $

January 1, 2023
Cost
Accumulated depreciation
and impairment
2023
At January 1
Additions
Reclassifications
Depreciation
At December 31
December 31, 2023
Cost
Accumulated depreciation
and impairment

Buildings and
Unfinished
construction
and equipment
Land
structures
acceptance
Total
4,974,140
$ 934,144
$ -
$ 5,908,284
$ -
180,953)
(
-
180,953)
(
4,974,140
$ 753,191
$ -
$ 5,727,331
$ 4,974,140
$ 753,191
$ -
$ 5,727,331
$ -
-
1,348
1,348
-
1,348
1,348)
(
-
-
38,421)
(
-
38,421)
(
4,974,140
$ 716,118
$ -
$ 5,690,258
$ 4,974,140
$ 935,492
$ -
$ 5,909,632
$ -
219,374)
(
-
219,374)
(
4,974,140
$ 716,118
$ -
$ 5,690,258
$

~35~

January 1, 2022

Cost Accumulated depreciation and impairment 2022 At January 1 Additions Reclassifications Depreciation At December 31 December 31, 2022 Cost Accumulated depreciation and impairment	4,974,140 $ - ( 4,974,140 $ 4,974,140 $ - - - ( 4,974,140 $ 4,974,140 $ - ( 4,974,140 $	931,364 $ - $ 143,117) - ( 788,247 $ - $ 788,247 $ - $ - 2,780 2,780 2,780) ( 37,836) - ( 753,191 $ - $ 934,144 $ - $ 180,953) - ( 753,191 $ - $	5,905,504 $ 143,117) 5,762,387 $ 5,762,387 $ 2,780 - 37,836) 5,727,331 $ 5,908,284 $ 180,953) 5,727,331 $

A. Rental income from investment property and direct operating expenses arising from investment property are shown below:

property are shown below:
Rental income from investment property Direct operating expenses arising from the investment property that generate rental income during the year	Years endedDecember31
	2023 173,161 $ 68,223 $	2022 156,602 $ 66,342 $

B. The fair value of the investment property held by the Company as at December 31, 2023 and 2022 was $8,520,100 and $6,947,888, respectively, which was valued using the actual price registration. In addition, there was no significance difference between the fair value on December 31, 2023 and the assessment result of the fair value on February 27, 2024 under management’s assessment.
C. Information about the investment property that was pledged to others as collateral is provided in Note 8.

~36~

(13) Other payables

Repairs and maintenance expense payable Payables for machinery and equipment Salary and bonus payable Utility expenses payable Processing charge payable Import / export (customs) expense payable Others	December31,2023 December31,2022 69,174 $ 68,923 $ 57,241 112,595 54,438 79,290 16,847 20,448 5,621 - 933 4,333 71,971 63,147 276,225 $ 348,736 $

(14) Bonds payable

Bonds payable
Bonds payable Less: Maturity within one year	December31,2023 1,500,000 $ - 1,500,000 $	December31,2022
		1,500,000 $ -
		1,500,000 $

A. In order to fulfill working capital, the Board of Directors resolved to issue the first domestic secured ordinary bonds on May 5, 2021. The terms and conditions of the ordinary bonds were as follows:
(a) Issuance amount: The total issuance amount was NT$900 million. The bonds were divided into A, B and C bonds amounting to NT$300 million each.
(b) Face value: NT$1 million
(c) Issuance price: Issued at full amount of face value on the issuance date.
(d) The time limit of issuance: The issuance period for each bond is 5 years from July 5, 2021 to July 5, 2026.
(e) The interest rate of bond and payments of interest: The interest rate of each bond is 0.51% fixed per annum. The simple interest is calculated and paid per year starting from the issuance date.
(f) The repayment date and method: repayable at once on the maturity date.
(g) Guarantee: A, B and C bonds are secured by a bank guarantee issued by Mega International Commercial Bank Co., Ltd., Hua Nan Bank Co., Ltd. and Taishin International Bank Co., Ltd., respectively, in accordance with the commissioned guarantee agreement and bondfulfilling guarantee obligation agreement individually signed by the three banks.
(h) Guarantee bank: Bank SinoPac Co., Ltd.
B. In order to fulfill working capital, the Board of Directors resolved to issue the second domestic secured ordinary bonds on November 5, 2021. The terms and conditions of the ordinary bonds were as follows:
(a) Issuance amount: NT$600 million

~37~

(b) Face value: NT$1 million
(c) Issuance price: Issued at full amount of face value on the issuance date.
(d) The time limit of issuance: The issuance period is 5 years from November 26, 2021 to November 26, 2026.
(e) The interest rate of bond and payments of interest: The interest rate is 0.57% fixed per annum. The simple interest is calculated and paid per year starting from the issuance date.
(f) The repayment date and method: repayable at once on the maturity date.
(g) Guarantee: The bonds are secured by a bank guarantee issued by Taiwan Shin Kong Commercial Bank Co., Ltd. in accordance with the commissioned guarantee agreement and bond-fulfilling guarantee obligation agreement.
(h) Guarantee bank: Taishin International Bank Co., Ltd.
C. The Company reclassified current portion of long-term debt based on liquidity, categorizing them as long-term liabilities due within one year or one operating cycle. The amount as of December 31, 2023 and 2022 was $0.

- (15) Long term borrowings

Borrowing periodandrepayment term
Coupon Rate
Land and buildings on Yixian Road, Sec. 2 pledged as
collateral for borrowings
NTD borrowings from Land Bank: the borrowing
1.95%
period is 15 years and interest is payable monthly for
the first 3 years, principal is payable quarterly starting
from the 4th year until May 2033 (Note)
Machinery and equipment pledged as collateral for
borrowings
NTD borrowings from Bank of Taiwan: the borrowing
period is 5 years and interest is payable monthly for
1.92%
the first 2 years, principal is payable quarterly starting
from the 3rd year until October 2026
NTD borrowings from Chang Hwa Commercial Bank:
the borrowing period is 5 years and interest is payable
quarterly, principal is payable quarterly starting from
the inception date until September 2028.
2.00%
Less: Current portion (including unamortised long-term
(
borrowing cost)

December31,2023
1,641,159
$ 567,770
47,500
2,256,429
372,010)

1,884,419
$

~38~

Borrowing periodandrepayment term Land and buildings on Yixian Road, Sec. 2 pledged as collateral for borrowings NTD borrowings from Land Bank: the borrowing period is 15 years and interest is payable monthly for the first 3 years, principal is payable quarterly starting from the 4th year until May 2033 (Note) Machinery and equipment pledged as collateral for borrowings NTD borrowings from Bank of Taiwan: the borrowing period is 5 years and interest is payable monthly for the first 2 years, principal is payable quarterly starting from the 3rd year until October 2026 Less: Current portion (including unamortised long-term borrowing cost)	Coupon Rate 1.70% 1.79% (	December31,2022 1,813,913 $ 336,630 2,150,543 172,754) 1,977,789 $

Note: The pledged assets are property, plant and equipment. On May 8, 2018, the Company entered a long-term borrowing contract for 15 years with Land Bank, for a facility of $4,160,000 and has repaid $1,100,000 and $900,000 in advance in December 2021 and January 2022, respectively.

(16) Pensions

A. Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.
B. The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2023 and 2022 were $11,090 and $11,156, respectively.

(17) Share-based payment

A. For the year ended December 31, 2023, the Group’s share-based payment arrangements were as follows:

follows:
Type of arrangement	Grantdate Quantity granted 2023/1/12 1,907 thousand shares (note) 2023/8/14 3,750 thousand shares (note)	Vesting conditions
First share repurchase and employee incentive plan in 2022 First share repurchase and employee incentive plan in 2023		Vested immediately Vested immediately

~39~

The above share-based payment arrangements are settled by equity.

Note: The chairman was authorized to determine the distribution of remaining shares if repurchased shares were not fully purchased by employees.

For the year ended December 31, 2022, there was no share-based payment arrangement.

B. Details of the share-based payment arrangements are as follows:

Details of the share-based payment arrangements are as	follows:
Options outstanding at January 1 Options granted Options exercised Options expired Options outstanding at December 31	2023
	No. ofoptions (in thousands)
	- 5,657 719) ( 4,938) ( -

For the year ended December 31, 2022, there was no share-based payment arrangement.

C. The weighted-average stock price of stock options at exercise dates for the year ended December 31, 2023 was $10.06. There was no share-based payment arrangement for the year ended December 31, 2022.
D. The fair value of stock options granted on grant date is measured using the Black-Scholes optionpricing model. Relevant information is as follows:

Type of arrangement	Grantdate	Stock price	Exercise price	Expected price volatility Expected option life 28.27% 24 days 27.23% 11 days	Expected dividends Risk- free interest rate - 28.27% - 0.96%	Fair value perunit
First share repurchase and employee incentive plan in 2022 First share repurchase and employee incentive plan in 2023	2023/1/12 2023/8/14	$9.59 (in dollars) $9.51 (in dollars)	$9.19 (in dollars) $10.06 (in dollars)			$0.12 (in dollars) $0 (in dollars)

Note 1: Expected price volatility of first share repurchase and employee incentive plan in 2022 adopted the average annualized standard deviation of return rate for the period from July 13, 2022 to January 12, 2023 of HannsTouch Holdings Company as a hypothetical value.
Note 2: Expected price volatility of first share repurchase and employee incentive plan in 2023 adopted the average annualized standard deviation of return rate for the period from August 4, 2023 to August 14, 2023 of HannsTouch Holdings Company as a hypothetical value.

~40~

E. Expenses incurred on share-based payment transactions are shown below:

Equity-settled		Year ended December31,2023	Year ended December31,2022
		229 $	- $

(18) Share capital

A. As of December 31, 2023, the Company’s authorized capital was $20,000,000, consisting of 2 billion shares, and the paid-in capital was $8,020,105 with a par value of $10 (in dollars) per share.

Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:

Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:	Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:	Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:	Movements in the number of the Company’s ordinary shares outstanding (in thousands) are as follows:
In order to promote the development of strategy alliance, improve financial structure, fulfill working capital, and repay liabilities, the Company's shareholders, on May 29, 2023, resolved to increase capital in cash and issue common shares up to 80 million shares or increase capital through the issuance of global depository receipts. The Company will choose one or both methods, at a par value of NT$10 per share. Treasury shares (a) On February 20, 2023, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares to transfer to employees. The expected number of shares to be repurchased was 5,000 thousand shares. The repurchase period was from February 21, 2023 to April 20, 2023, and the price range was between $7.18 (in dollars) and $13.00 (in dollars). The details are as follows: 2023 2022 At January 1 805,042 806,949 Employee share options exercised 719 - Purchase of treasury shares 3,750) ( 1,907) ( At December 31 802,011 805,042 Name of company holdingthe shares Reason for reacquisition Number of shares (in thousands) Carryingamount The Company To be reissued to employees 3,750 $ 37,738 December31,2023
			Number of shares (in thousands) Carryingamount 3,750 $ 37,738
	The Company	To be reissued to employees

B. In order to promote the development of strategy alliance, improve financial structure, fulfill working capital, and repay liabilities, the Company's shareholders, on May 29, 2023, resolved to increase capital in cash and issue common shares up to 80 million shares or increase capital through the issuance of global depository receipts. The Company will choose one or both methods, at a par value of NT$10 per share.

C. Treasury shares

(a) On February 20, 2023, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares to transfer to employees. The expected number of shares to be repurchased was 5,000 thousand shares. The repurchase period was from February 21, 2023 to April 20, 2023, and the price range was between $7.18 (in dollars) and $13.00 (in dollars). The details are as follows:
Note 1: The Company has executed the expiration of the repurchase period on April 20, 2023, with accumulated buyback shares and total amount of shares being 3,750 thousand shares and $37,738, respectively.

~41~

Note 2: On October 31, 2023, the Board of Directors resolved the implementation of cancellation and reduction of capital by repurchasing treasury stocks. The reduction of capital base date was October 31, 2023, and the changes have been completed on November 13, 2023.
(b) On August 1, 2022, the Board of Directors of the Company resolved to repurchase the Company’s ordinary shares to transfer to employees. The expected number of shares to be repurchased was 20,000 thousand shares. The repurchase period was from August 2, 2022 to September 30, 2022, and the price range was between $6.59 (in dollars) and $14.57 (in dollars). The details are as follows:

December 31, 2022 Name of company Number of shares Carrying amount holding the shares Reason for reacquisition (in thousands) (Note) The Company To be reissued to employees 1,907 $ 18,264

Note: Excluding transaction cost.

On February 20, 2023, the Board of Directors resolved the retirement of treasury stocks. The base date of retirement was set on March 30, 2023 and the related procedure was completed on April 13, 2023.

(c) Pursuant to the R.O.C. Securities and Exchange Act, the number of shares bought back as treasury share should not exceed 10% of the number of the Company’s issued and outstanding shares and the amount bought back should not exceed the sum of retained earnings, paid-in capital in excess of par value and realised capital surplus.
(d) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should not be pledged as collateral and is not entitled to dividends before it is reissued.
(e) Pursuant to the R.O.C. Securities and Exchange Act, treasury shares should be reissued to the employees within five years from the reacquisition date and shares not reissued within the five-year period are to be retired. Treasury shares to enhance the Company’s credit rating and the stockholders’ equity should be retired within six months of acquisition.

(19) Capital surplus

~42~

(20) Retained earnings / Events after the balance sheet date

A. Under the Company’s Articles of Incorporation, the annual earnings, if any, shall first be used to pay all taxes and offset accumulated deficit and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. Except for the distribution of cash dividends and bonus which the Board of Directors are authorised to resolve and then report to shareholders, others will be proposed by the Board of Directors and approved by the shareholders.
B. According to the Articles of Incorporation, the Company shall consider to appropriate all of current undistributed earnings based on finance, business, operation and other factors. The appropriation of earnings can be in the form of cash dividend or stock dividend separately or both. The ratio of cash dividend shall not be lower than 20% of the total dividends distributed.
C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.
D. On February 27, 2024, due to the post-tax loss for the year ended December 31, 2023, the Board of Directors of the Company resolved not to distribute profits, but only resolved the reversal of special reserve of $33,942.
E. The appropriations of 2022 and 2021 earnings as resolved by the shareholders On May 29, 2023 and May 24, 2022, respectively, are as follows:

Legal reserve Reversal of special reserve Cash dividends	Years endedDecember31	Years endedDecember31
	Dividends per share Dividends per share Amount (indollars) Amount (indollars) 2,477 $ 100,041 $ 90,461 6,457) ( - - $ 282,432 0.35 $ 92,938 $ 376,016 $ 2022 2021	2021

~43~

(21) Operating revenue

Operating revenue
Revenue from contracts with customers Touch sensors and related products Rental revenue from property	Years endedDecember31
	2023 1,080,347 $ 173,162 1,253,509 $	2022
		2,098,527 $ 156,602
		2,255,129 $

Disaggregation of revenue from contracts with customers

The Company derives revenue from the transfer of goods and services at a point in time in the following major geographical regions:

py following major geographical regions:	g p	g p
Revenue from external customer contracts China South Korea Taiwan Europe	Years endedDecember31
	2023 627,717 $ 347,446 273,208 5,138 1,253,509 $	2022
		939,013 $ 1,130,362 183,693 2,061
		2,255,129 $

(22) Interest income

Interest income
Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Years endedDecember31
	2023 17,577 $ 3,442 20 21,039 $	2022
		6,536 $ 4,878 156
		11,570 $

(23) Other income

Other income
Revenue from purchasing masks on behalf of others Dividend income Rent income (Note 1) Government grant revenues (Note 2) Research and development income (Note 3) Other income	Years endedDecember31
	2023 16,253 $ 9,094 2,180 95 - 15,971 43,593 $	2022
		10,859 $ 52,972 2,020 - 33,506 14,699
		114,056 $

Note 1: Refer to Note 6(11) for details.

~44~

Note 2:Government subsidy due to the impact of Covid-19 and recognized revenue of $22 in 2023.

Note 3:From the design and process development entrusted by the Company’s associate, Hannstar Display Corp.

(24) Other gains and losses

Gain (loss) on financial instruments at fair value through profit or loss Net foreign exchange gain Gain on disposals of property, plant and equipment Gain on lease modifications	2023 2022 96,174 $ 21,048) ($ 7,595 40,252 2,282 - 3 - 106,054 $ 19,204 $ Years endedDecember31

(25) Employee benefit expense and expenses by nature / Events after the balance sheet date

YearendedDecember31,2023	YearendedDecember31,2023	YearendedDecember31,2023
Operating costs Operating expenses Total 147,962 $ 59,860 $ 207,822 $ 18,420 5,267 23,687 8,289 2,801 11,090 - 2,613 2,613 20,125 6,491 26,616 900,829 2,359 903,188 6,666 3,112 9,778 YearendedDecember31,2022
Operating costs 142,783 $ 19,033 8,344 - 20,686 832,846 6,435	Operating expenses 57,156 $ 5,381 2,812 2,350 7,775 1,984 3,351	Total
		199,939 $ 24,414 11,156 2,350 28,461 834,830 9,786

As of December 31, 2023 and 2022, the Company had 285 and 321 employees, including 7 and 6 non-employee directors, respectively.

~45~

For the years ended December 31, 2023 and 2022, the average employee benefits were $968 and $838, respectively, the average salary expenses were $748 and $635, respectively, and the average change in adjustments on salary expenses was (17.80%).

The Company’s salary and remuneration policy for directors, managers and employees is as follows:

a. Directors’ remuneration policies: In accordance with the Company’s Articles of Incorporation, directors’ remuneration of the Company shall refer to the Company’s overall operating performance, operating risk and trend of the industry in the future and individual director’s contribution to the Company which shall be authorised by the Board of Directors to be determined based on the estimates of remuneration committee.
b. Managers’ compensation policies: The Company’s managers’ compensation is based on the individual performance and contribution to the Company’s overall operations and considers the Company’s future operating risk and the compensation level within the same industry. It will be proposed by the remuneration committee and discussed by the Board of Directors.
c. Employees’ salary policies: The Company follows Labor Standards Act and related regulations to determine employees’ salaries and benefits, employees’ salary including salaries, bonus and compensation.
(a) Employees’ salary standard is determined based on job responsibility, education and experience, professional knowledge and skill and their professional seniority. Salary and remuneration shall not be based on the employees’ age, gender, race, religion, political affiliation and civil status.
(b) Bonus will be distributed based on the Company’s operating performance and employees’ individual performance.
(c) Employees’ compensation is determined based on the job grade, performance and years of service.
(d) Salary increase is determined based on the Company’s operating condition, taking into consideration domestic economic growth rate, price index, salary increases within the same industry and the individual performance.
A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ and supervisors’ remuneration. The ratio shall be between 0.001% and 15% for employees’ compensation and shall not be higher than 2% for directors’ remuneration.
B. For the years ended December 31, 2023 and 2022, employees’ compensation was accrued at $0 and $1, respectively; while no directors’ remuneration was accrued. The aforementioned amounts were recognised in salary expenses.

~46~

Employees’ compensation and directors’ remuneration for 2022 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2022 financial statements.

C. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(26) Income taxes

A. Income tax benefit
(a) Components of income tax benefit:

(a) Components of income tax benefit:
		Years ended	December31
		2023			2022
Current tax:
Prior year income tax overestimation	($	24,844)			$	-
Total current tax	(	24,844)				-
Deferred tax:
Origination and reversal of temporary
differences		24,843	(			16,963)
Total deferred tax		24,843	(			16,963)
	($	1)	($			16,963)
Reconciliation between income tax benefit and accounting		profit
		Years endedDecember31
		2023			2022
Income tax calculated by applying statutory rate to the profit before tax	($	179,955)		$		1,561
Expenses disallowed by tax regulation		12,597				347
Tax exempt income by tax regulation	(	20,120)	(			12,678)
Temporary differences not recognised as deferred tax assets		-	(			6,193)
Taxable loss not recognised as deferred tax assets		194,577				-
Change in assessment of realisation of deferred tax assets		17,744				-
Prior year income tax overestimation	(	24,844)				-
	($	1)	($			16,963)

B. Reconciliation between income tax benefit and accounting profit

~47~

C. Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows:

are as follows:

－Deferred tax assets:
Provisions
Impairment loss
Inventory valuation loss
Unrealised loss on valuation of
financial instruments
Unrealised exchange gains
and losses
Bonus payable
Unused annual leave
allowance payable
Loss carryforward
－Deferred tax liabilities:
Unrealised gain on valuation of
financial instruments
－Deferred tax assets:
Provisions
Impairment loss
Inventory valuation loss
Loss carryforward
Others
－Deferred tax liabilities:
Unrealised exchange gain

Temporary differences:
Temporary differences:

2023

Recognised in
Recognised in
other
comprehensive
AtJanuary1
profitor loss
income

2,197
$ 369)
($ -
$ 11,177
-
-
1,843
6,705

-
74,420
14,297
-
4,806
3,725)
(
-
94,443
16,908
-
55)
(
55
-
94,388
$ 16,963
$ -
$

~48~

D. Expiration dates of unused tax losses and amounts of unrecognized deferred tax assets are as follows:

follows:
	December31,2023
Year incurred 2014 2016 2022 2023	Amount filed/ Unrecognised assessed Unusedamount deferredtax assets Expiry year 994,010 $ 88,720 $ 88,720 $ 2024 278,062 278,062 - 2026 24,409 24,409 - 2032 972,887 972,887 972,887 2033 December31,2022
Year incurred 2014 2016 2022	Amount filed/ assessed Unusedamount 994,010 $ 88,720 $ 278,062 278,062 76,803 76,803	Unrecognised deferredtax assets Expiry year - $ 2024 - 2026 - 2032

D. The Company’s income tax returns through 2021 have been assessed and approved by the Tax Authority.

(27) (Loss) earnings per share

. py
Authority.
(Loss) earnings per share

g pp y

Basic loss per share
Loss attributable to ordinary
shareholders of the parent
(
Basic earnings per share
Profit attributable to ordinary
shareholders of the parent
Diluted earnings per share
Profit attributable to ordinary
shareholders of the parent
Assumed conversion of all
dilutive potential ordinary
shares Employees’ bonus
Profit attributable to ordinary
shareholders of the parent
plus assumed conversion of
all dilutive potential ordinary shares

Weighted average
number of ordinary
shares outstanding
Loss per share
Amount after tax
(sharesin thousands)
(indollars)
899,775)
$ 802,377
1.12)
($ Weighted average
number of ordinary
shares outstanding
Earnings per share
Amount after tax
(sharesin thousands)
(indollars)
24,772
$ 806,460
0.03
$ 24,772
$ 806,460
-
532
24,772
$ 806,992
0.03
$ YearendedDecember31,2023
YearendedDecember31,2022

Amount after tax
(
24,772
$ 24,772
$ -
24,772
$

~49~

(28) Supplemental cash flow information

Investing activities with partial cash payments

Purchase of property, plant and equipment Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the year

Purchase of investment property Add: Opening balance of payable on equipment Less: Ending balance of payable on equipment Cash paid during the year

		Years ended	December31	December31	December31
		2023			2022
	$	325,890		$	579,063
		112,452			95,272
(		57,241)	(		112,452)
	$	381,101		$	561,883
		Years ended	December31
		2023			2022
	$	1,348		$	2,780
		143			976
		-	(		143)
	$	1,491		$	3,613

(29) Changes in liabilities from financing activities

For the years ended December 31, 2023 and 2022, the Company’s liabilities from financing activities included bonds payable, long-term borrowings and lease liabilities. The changes all pertain to changes in the financing cash flow and other non-cash changes, the aggregate amounts were as follows. Refer to statements of cash flows for other information.

At January 1 Changes in cash flow from financing activities Changes in other non-cash items At December 31 At January 1 Changes in cash flow from financing activities Changes in other non-cash items At December 31		2023
	Bonds payable 1,500,000 $ - - 1,500,000 $	Long-term borrowings Lease liability (Note) (Note) 2,150,543 $ 293,211 $ 105,886 21,346) ( - 6,201 2,256,429 $ 278,066 $ 2022

Note: Including current portion.

~50~

7. Related Party Transactions

(1) Names of related parties and relationship with the Company

Names of related parties	Relationship with the Company
HannStar Display Corporation (Hannstar) Hannstar Technology Services (Shenzhen) Inc. (Hannstar Technology) Winbond Electronics Corp. (Winbond Electronics) GloryStone Inc. (GloryStone) Golden Apple Investment Corporation (Golden Apple) Guangdong Shekel Technology Co., Ltd. (Guangdong Shekel) Flying horse on Maryland Inc. (Flying horse on Maryland) Pottery Inc. (Pottery)	Entities with significant influence to the Company Other related party Other related party Subsidiary Subsidiary Second tier subsidiary. Second tier subsidiary. Second tier subsidiary.

(2) Significant related party transactions

A. Operating revenue

Operating revenue
Subsidiaries Second tier subsidiary.	Years endedDecember31
	2023 2022 83,793 $ 83,488 $ 6,666 2,242 90,459 $ 85,730 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

B. Purchases

based on the mutual agreement. Purchases
Purchases of goods: Entities with significant influence to the Company	Years endedDecember31
	2023 39,533 $	2022
		21,425 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

~51~

C. Rent expense

Rent expense
Hannstar Subsidiary	Years endedDecember31
	2023 9,746 $ 158 9,904 $	2022
		9,743 $ 869
		10,612 $

There were no similar transactions that can be compared with. The transaction conditions were based on the mutual agreement.

D. Interest expenses

Interest expenses
Other related party Subsidiary	Years endedDecember31
	2023 2022 5,904 $ 295 $ 3,973 2,714 9,877 $ 3,009 $

E. Accounts receivable

Accounts receivable: GloryStone Second tier subsidiary. Other receivables: Subsidiaries Second tier subsidiary. Entities with significant influence to the Company	December31,2023 December31,2022 51,827 $ 51,963 $ 3,600 2,055 55,427 $ 54,018 $ 1,006 $ 374 $ 161 69 143 - 1,310 $ 443 $

It pertains to rent receivable and office expenses.

F. Accounts payable

Accounts payable
Accounts payable: Entities with significant influence to the Company Other payables: Second tier subsidiary. Entities with significant influence to the Company Subsidiaries	December31,2023 5,011 $ 428 $ 23 13 464 $	December31,2022
		13,058 $
		167 $ 23 57
		247 $

~52~

G. Prepayments (shown as other current assets)

GloryStone

Years endedDecember31	Years endedDecember31
2023 - $	2022
	5,724 $

It pertains to prepayments for an accommodation project between the Company and a subsidiary.

H. Property transactions
(a) Acquisition of financial assets:

Year ended December 31, 2023

No. of shares Accounts (in thousands) Objects Consideration

Financial assets Winbond at fair value 1,500 Common Stock $ 33,000 Electronics through profit or loss - current

(b) Disposal of property, plant and equipment

Years endedDecember31	Years endedDecember31	Years endedDecember31
Disposal proceeds Gain 10 $ 9 $ 2023	2022
Disposal proceeds 10 $	Disposal proceeds - $	Gain
		- $

I. Maintenance and proxy management fees for public areas from Hannstar for the years ended December 31, 2023 and 2022 amounted to $7,620 and $5,864, respectively.
J. The design and process development income from Hannstar for the years ended December 31, 2023 and 2022 amounted to $0 and $33,506, respectively.

(3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits	Years endedDecember31
	2023 2022 13,063 $ 27,022 $

~53~

8. Pledged Assets

The Company’s assets pledged for the purpose of long-term borrowings, customs duty on raw material imports and performance bond are as follows:

imports and performance bond are as follows:
Pledgedasset Pledged time deposits (shown as other financial assets) Demand deposits (shown as other financial assets) Property, plant and equipment and investment property	Bookvalue December31,2023 30,005 $ 16,141 5,397,496 5,443,642 $	Bookvalue
		December31,2022
		28,919 $ 16,062 5,488,679
		5,533,660 $

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

As of December 31, 2023, significant commitments and contingencies are outlined as follows:

(1) Contingencies

~54~

(2) Commitments

As of December 31, 2023, the Company’s capital expenditure contracted for at the balance sheet date but not incurred amounted to $89,058.

10. Significant Disaster Loss

None.

11. Significant Events after the Balance Sheet Date

(1) Refer to Notes 6(20) and 6(25) for details.
(2) On February 27, 2024, the Company’s board of directors resolved not to proceed with the capital increase by cash through the issuance of up to 80 million shares of stock either through private placement or public offering, as resolved by the shareholders during their meeting last May 29, 2023, for the purpose of developing strategic alliances, increasing working capital, etc. However, in order for the Company to have the flexibility to respond to changes in the industry and the economy, and in line with the practice of the competent authority to review the plans of companies to raise capital, the Company’s board of directors proposed another resolution for the capital increase.
(3) For the purpose of developing strategic alliances and increasing working capital, the Company’s board of directors during its meeting on February 27, 2024 resolved to increase capital through the issuance of up to 80 million shares of stock or depository receipts with a proposed denomination of NT$10 per share through private placement or public offering.
(4) On February 27, 2024, the Board of Directors resolved the continuance of purchasing common shares of HannStar Display Corporation from the open market in batches up to a maximum of $1,200,000.

12. Others

(1) Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. To maintain or adjust the capital structure, the Company adjusted the capital structure through the issuance of new shares to borrow or repay loans.

~55~

(2) Financial instruments

A. Financial instruments by category

Financial instruments by category
Note: Including current portion. Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Accounts receivable (including related parties) Other receivables (including related parties) Other financial assets Financial liabilities Financial liabilities at amortised cost Notes payable Accounts payable (including related parties) Other payables (including related parties) Bonds payable (Note) Long-term borrowings (Note) Lease liability (Note)	December31,2023 499,095 $ 590,367 $ 1,263,828 $ 87,461 174,760 12,742 46,146 1,584,937 $ 424 $ 68,854 276,689 1,500,000 2,256,429 4,102,396 $ 278,066 $	December31,2022
		309,922 $
		553,821 $
		1,592,078 $ 86,934 343,587 11,701 44,981
		2,079,281 $
		502 $ 152,068 348,983 1,500,000 2,150,543
		4,152,096 $
		293,211 $

B. Financial risk management policies

(a) The Company’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To minimise any adverse effects on the financial performance of the Company, derivative financial instruments, such as foreign exchange forward contracts and foreign currency option contracts are used to hedge certain exchange rate risk.

~56~

(b) Risk management is carried out by a central treasury department (Company treasury) under policies approved by the Board of Directors. Company treasury identifies, evaluates and hedges financial risks in close cooperation with the Company’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
C. Significant financial risks and degrees of financial risks
(a) Market risk

Exchange rate risk

i. The Company operates internationally and is exposed to exchange rate risk arising from the transactions of the Company used in various functional currency, primarily with respect to the USD and JPY. Foreign exchange rate risk arises from future commercial transactions and recognised assets and liabilities.
ii. Management has set up a policy to require the Company to manage its foreign exchange risk against the functional currency. The Company is required to hedge the entire foreign exchange risk exposure with the Company treasury. Exchange rate risk is measured through a forecast of highly probable USD and JPY expenditures. Forward foreign exchange contracts are adopted to minimise the volatility of the exchange rate affecting cost of forecast inventory purchases.
iii. The Company’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

December	31,2023	31,2023	31,2023
Bookvalue (NTD) 120,701 $ 2,582 33,223 22,568	Sensitivityanalysis
	Degree of variation 1% 1% 1% 1%	Effect on profit or loss 1,207 $ 26 332 226	Effect on other comprehensive income
			- $ - - -

~57~

Foreign currency Exchange (In thousands) rate (Foreign currency: functional currency) Financial assets Monetary items USD:NTD 10,121 $ 30.715 JPY:NTD 79,482 0.2325 Financial liabilities Monetary items USD:NTD 1,073 30.715 JPY:NTD 207,559 0.2325				December	31,2022
				Bookvalue (NTD) 310,867 $ 18,480 32,957 48,257	Sensitivityanalysis
					Degree of Effect on profit Effect on other comprehensive variation or loss income 1% 3,109 $ - $ 1% 185 - 1% 330 - 1% 483 -

iv. Total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Company for the years ended December 31, 2023 and 2022, amounted to $7,594 and $40,252, respectively.

Price risk

i. The Company’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss. To manage its price risk arising from investments in equity securities, the Company diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Company.
ii. The Company’s investments in equity securities and funds comprise shares issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased / decreased by 1% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased / decreased by $4,984 and $3,099, respectively. Other components of equity would have increased / decreased by $5,904 and $5,538, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

The Company’s main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. Company policy is to maintain at least 1~3% of its borrowings at fixed rate using interest rate swaps to achieve this when necessary. During the years ended December 31, 2023 and 2022, the Company’s borrowings at variable rate were mainly denominated in New Taiwan dollars.

~58~

(b) Credit risk

i. Credit risk refers to the risk of financial loss to the Company arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms.
ii. The Company adopts the assumption that the default occurs when the contract payments are past due over 120 days.
iii. The Company adopts the following assumption under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:
If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.
iv. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:
(i) It becomes probable that the issuer will enter bankruptcy or other financial reorganisation due to their financial difficulties;
(ii) The disappearance of an active market for that financial asset because of financial difficulties;

(iii) Default or delinquency in interest or principal repayments.

v. The Company wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Company will continue executing the recourse procedures to secure their rights. On December 31, 2023 and 2022, the Company had no written-off financial assets that are still under recourse procedures.
vi. The methods used by the Company in assessing the expected credit risk of accounts receivable were as follows:
(i) Individually estimated expected credit loss according to individual significant accounts receivable which are considered on default;
(ii) Other customers’ accounts receivable were classified based on the Company's credit rating standards. The Company applies different loss rate methodology and provision matrix to estimate the expected credit loss of different groups.
(ii) Loss rates are calculated based on past and current information, taking into account forward-looking information provided by the Basel Committee on Banking Supervision.

~59~

(iv) On December 31, 2023 and 2022, the provision loss for accounts receivable which were individually estimated by loss rate methodology and provision matrix were as follows:

follows:
December 31, 2023 Expected loss rate Total book value December 31, 2022 Expected loss rate Total book value	Group1 0.03%~100% - $ Group1 0.03%~100% - $	Group2 100% 119,366 $ Group2 100% 289,659 $	Total
			119,366 $
			Total
			289,659 $

Group 1: For customers with impairment indications, individual expected credit loss is determined through considering the claim order of insurance and debts.

Group 2: Long-term customers with good credit history.

vii. Movements in relation to the Company applying the modified approach to provide loss allowance for accounts receivable are as follows:

At January 1 Reversal of impairment ( At December 31	2023 2022 Accountsreceivable Accountsreceivable 90 $ 100 $ 57) 10) ( 33 $ 90 $

(c) Liquidity risk

i. Cash flow forecasting is performed by Company treasury. Company treasury monitors rolling forecasts of the Company’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Company’s financing plans, covenant compliance, compliance with internal balance sheet ratio targets and, if applicable external regulatory or legal requirements.
ii. The table below analyses the Company’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities were as follows:

~60~

Non-derivative financial liabilities:

Non-derivative financial liabilities :
December 31, 2023 Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liability Other current liabilities Bonds payable Long-term borrowings Non-derivative financial liabilities : December 31, 2022 Notes payable Accounts payable (including related parties) Other payables (including related parties) Lease liability Other current liabilities Bonds payable Long-term borrowings	Less than 1year 424 $ 68,854 276,689 15,122 9,031 8,010 412,290 Less than 1year 502 $ 152,068 348,983 15,049 3,735 8,010 208,271	Between 2 and3years - $ - - 31,124 - 1,516,020 802,946 Between 2 and3years - $ - - 30,608 - 16,020 628,004	Between 3 and4years - $ - - 28,833 - - 398,188 Between 3 and4years - $ - - 30,071 - 1,508,010 497,005	Over 5years
				- $ - - 202,987 - - 812,089 Over 5years
				- $ - - 217,483 - - 995,193

iii. In order to repay the borrowings, the Company plans to issue shares of stock through public offering or private placement. Refer to Note 6(18)C for details.

(3) Fair value information

A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. An active market refers to a market in which transactions for an asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Company’s investment in listed stocks is included in Level 1.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Company’s investment in forward foreign exchange contracts is included in Level 2.
Level 3: Unobservable inputs for the asset or liability.
B. Fair value information of investment property at cost is provided in Note 6(12).
C. Financial instruments not measured at fair value

~61~

are approximate to their fair values.
Financial liabilities: Bonds payable Long-term borrowings (Note) Financial liabilities: Bonds payable Long-term borrowings (Note)		December	31,2023
	Bookvalue 1,500,000 $ 2,256,429 3,756,429 $		Fairvalue
		Level 1 - $ - - $ December	Level 2 1,307,923 $ - 1,307,923 $ 31,2022	Level3
				- $ 2,003,251
				2,003,251 $

	Bookvalue 1,500,000 $ 2,150,543 3,650,543 $		Fairvalue
		Level 1 - $ - - $	Level 2 1,262,123 $ - 1,262,123 $	Level3
				- $ 1,858,726
				1,858,726 $

Note: Including current portion.

D. Financial and non-financial instruments measured at fair value

(a) The related information on financial and non-financial instruments measured at
level on the basis of the nature, characteristics and risks of the assets and
December 31, 2023 and 2022 are as follows:
December 31, 2023
Level 1
Level 2
Level3
Assets
Recurring fair value
Financial assets at fair value
through profit or loss
Listed stocks
269,663
$ -
$ -
$ Unlisted stocks
-
-
95,788
Beneficiary certificates
-
-
132,937
Non-hedging derivatives
-
707
-
Financial assets at fair value
through other comprehensive
income
Listed and emerging stocks
590,367
-
-
860,030
$ 707
$ 228,725
$

fair value by
liabilities at
:
Total
269,663
$ 95,788
132,937
707
590,367
1,089,462
$

~62~

December 31, 2022 Assets Recurring fair value Financial assets at fair value through profit or loss Listed stocks Unlisted stocks Beneficiary certificates Non-hedging derivatives Financial assets at fair value through other comprehensive income Listed and emerging stocks	123,121 $ - - - 553,821 676,942 $	- $ - - 48 - 48 $	- $ 81,582 105,171 - - 186,753 $	123,121 $ 81,582 105,171 48 553,821
				863,743 $

(b) The methods and assumptions the Company used to measure fair value are as follows:
- i. For the instruments the Company used market quoted prices as their fair values (that is, Level 1), the Company uses the closing price of the listed shares as fair value.
- ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods, including calculated by applying model using market information available at the parent company only balance sheet date.
- iii. When assessing non-standard and low-complexity financial instruments, for example, debt instruments without active market, interest rate swap contracts, foreign exchange swap contracts and options, the Company adopts valuation technique that is widely used by market participants. The inputs used in the valuation method to measure these financial instruments are normally observable in the market.
E. On December 31, 2023 and 2022, there was no transfer between Level 1 and Level 2.
F. On December 31, 2023 and 2022, there was no transfer into or out from Level 3.
G. Finance and accounting segment is in charge of valuation procedures for fair value measurements being categorized within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions, confirming the resource of information is independent, reliable and in line with other resources and represented as the exercisable price, and frequently calibrating valuation model, performing back-testing, updating inputs used to the valuation model and making any other necessary adjustments to the

~63~

fair value. The Company’s finance and accounting department use the valuation methods and assumptions announced by the Financial Supervisory Commission, Securities and Futures Bureau or through outsourced appraisal performed by the external valuer.

H. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

	December 31, 2023	December 31, 2023	Valuation	Significant	Range (weighted	Relationship of
		Fair value	technique	unobservable input	average)	inputs to fair value
Non-derivative equity	instrument:
Unlisted shares	$	95,788	Market	Price book ratio	0.17~5.12	The higher the multiple
			comparable	multiplier, discount		and control premium, the
			companies	for lack of		higher the fair value; the
				marketability		higher the discount for lack
						of marketability, the lower
						the fair value
Private equity fund		132,937	Net asset value	Not applicable	Not applicable	Not applicable
investment
	December 31, 2022		Valuation	Significant	Range (weighted	Relationship of
		Fair value	technique	unobservable input	average)	inputs to fair value
Non-derivative equity	instrument:
Unlisted shares	$	81,582	Market	Price book ratio	0.17~5.02	The higher the multiple
			comparable	multiplier, discount		and control premium, the
			companies	for lack of		higher the fair value; the
				marketability		higher the discount for lack
						of marketability, the lower
						the fair value
Private equity fund		105,171	Net asset value	Not applicable	Not applicable	Not applicable
investment

13. Supplementary Disclosures

(1) Significant transactions information

A. Loans to others: Refer to table 1.
B. Provision of endorsements and guarantees to others: None.
C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 2.
D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company's paid-in capital: None.
E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None
F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.
G. Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paidin capital or more: None.

~64~

H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: None.
I. Trading in derivative instruments undertaken during the reporting period: Refer to Notes 6(2).
J. Significant inter-company transactions during the reporting periods: None.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China): Refer to table 3.

(3) Information on investments in Mainland China

A. Basic information: Refer to table 4.
B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: None.

(4) Major shareholders information

Major shareholders information: Refer to Table 5.

14. Segment Information

Not applicable

~65~

Hannstouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Loans to others

Year ended December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS)

Table 1

No. （Note1）	Creditor	Borrower	General ledger account （Note2）	Is a related party	Maximum outstanding balance during the year ended December 31, 2023 （Note 3）	Balance at December 31, 2023 （Note4）	Actual amount drawndown	Interest rate	Nature of loan	Amount of transactions with the borrower	Reason for short-term financing	Allowance for doubtful accounts	Collateral	Collateral	Limit on loans granted to a single party （Note 5,6）	Ceiling on total loans granted （Note 7）	Note
													Item	Value
0 1 1	HannsTouch Holdings Company Guangdong Shekel Technology Co., Ltd. (formerly known as: HeXin Shang Mao) Guangdong Shekel Technology Co., Ltd. (formerly known as: HeXin Shang Mao)	GloryStone Inc. Shanghai Yesun Electronic Science& Technology Co., Ltd. Guangzhou Zeya Technology Co., Ltd.	Other receivables due from related parties Other receivables Other receivables	Yes No No	200,000 $ 6,906 2,530	200,000 $ - -	$ - 6,906 2,530	Undetermined 10.40%~11.89% 11.52%~12.09%	Necessary for short- term financing Business transaction Business transaction	$ - 7,206 2,673	Increase working capital - -	$ - - -	None None None	$ - - -	1,774,144 $ 7,206 2,673	2,661,216 $ 7,036 7,036	Note 6 Note 5, 7, 8, 9, 11 Note 5, 7, 8, 10, 11

Note 1: The numbers filled in for the loans provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

(2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Fill in the name of account in which the loans are recognised, such as receivables–related parties, current account with stockholders, prepayments, temporary payments, etc.

Note 3: The upper limit of capital loan and balance of capital loans in the end of the year are the amount approved by the Board of Directors.

Note 4: The year-end balance is the remaining valid quota/amount of fund loans to others as of the end of the period.

Note 6: The limit of HannsTouch Holdings Company and its subsidiaries loans to individual who has the needs of short-term financing shall not exceed 20% of the net asset value of latest financial statements. Note 7: The total loans amount of HannsTouch Holdings Company or its subsidiaries shall not exceed 30% of net asset value.

Note 8: HeXin Shang Mao completed the registration of its name change in October 2023 and is now named as "Guangdong Shekel Technology Co., Ltd.".

Table 1

Table 2

Hannstouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Securitiesheld by	Marketable securities	Relationship with the securitiesissuer	General ledgeraccount		Ending	Balance
				Number of shares (inthousands)	Bookvalue	Ownership (%)	Fair value (Note)
HannsTouch Holdings Company Golden Apple Investment Corporation GloryStone Inc.	Stock HIM International Music Inc. Union Bank of Taiwan Preferred Stock A Banyan Tree Holding Limited Fullerton Technology Co., Ltd. Farglory Land Development Co., Ltd. Winstek Semiconductor Technology Co., Ltd. Materials Analysis Technology Inc. Super Micro Computer, Inc. Winbond Electronics Corp. YH Bio Co., Ltd. Touch Cloud Inc Nfore Technology Co., Ltd. BORETECH Resource Recovery Engineering Co., Ltd. Strong-Wave Radio Technology Inc. Hannstar Display Corp. Bonds NISSAN MOTOR Co., Ltd FINA FINANCE & TRADING Co., Ltd. Benefit certificate Lian Ding Capital Co., Ltd. Grandfull Convergence Innovation Growth Fund, L.P..C. Cypress Venture Capital III Ltd. Stock Chaiin Hotel Co., Ltd. Stock Farglory Land Development Co., Ltd. Materials Analysis Technology Inc. Bonds FINA FINANCE & TRADING Co., Ltd.	None `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Other related parties None `〞` None `〞` `〞` None None `〞` None	Financial assets at fair value through profit or loss - current `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` `〞` Financial assets at fair value through profit or loss - non-current `〞` `〞` Financial assets at fair value through other comprehensive income- non-current Financial assets at amortised cost – non-current `〞` Financial assets at fair value through profit or loss - non-current `〞` `〞` Financial assets at fair value through other comprehensive income- current Financial assets at fair value through profit or loss - current Financial assets at amortised cost – non-current	211 141 3,614 4,000 165 276 112 2 1,500 6,973 250 1,000 425 3,333 49,820 Not applicable Not applicable Not applicable Not applicable Not applicable 2,100 58 6 50,000 units	22,472 $ 7,229 29,038 89,800 9,372 25,199 26,040 14,838 45,675 7,904 1,531	0.40% Not applicable 0.42% 3.46% 0.02% 0.20% 0.01% 3.21% 0.04% 3.40% 1.88% 2.86% 0.65% 10.38% 1.69% Not applicable Not applicable Not applicable Not applicable Not applicable 19.00% 0.007% 0.009% Not applicable	22,472 $ 7,229 29,038 89,800 9,372 25,199 26,040 14,838 45,675 7,904 1,531 51,138 $ 26,175 9,040 590,367 $ 37,461 $ 50,000 70,936 $ 41,001 21,000 13,459 $ 3,294 1,395 50,000 $
					279,098 $
					51,138 $ 26,175 9,040
					86,353 $
					590,367 $
					37,461 $ 50,000
					87,461 $
					70,936 $ 41,001 21,000
					132,937 $
					13,459 $
					3,294 $ 1,395
					4,689 $
					50,000 $

Table 2

Table 3

Hannstouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Information on investees

Year ended December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Investor	Investee `（`Notes 1 and 2`）`	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December31,2023	Shares held as at December31,2023	Shares held as at December31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December31,2023	Note
				Balance as at December31,2023	Balance as at December31,2022	Number of shares	Ownership (%)	Bookvalue
HannsTouch Holdings Company `〞` `〞` `〞` `〞` GloryStone Inc. `〞` Yin Wang Investment Corporation Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.)	Richest Investment Ltd. Golden Apple Investment Corporation GloryStone Inc. Yin Wang Investment Corporation Hanns Blegrain Ltd. Flying horse on Maryland Inc. Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.) Pottery Inc. (formerly known as Han Yu Chu Co., Ltd.) Flying horse on Maryland Inc.	Cayman Islands Taiwan Taiwan Taiwan Cayman Islands Taiwan Taiwan Taiwan Taiwan	Investment Investment Hotel business Investment Investment Food service Food service Food service Food service	148,434 $ 150,000 406,582 150,000 30,695 - 76,500 45,000 9,411	148,434 $ 150,000 406,582 150,000 30,695 10,200 76,500 45,000 -	4,500 15,000 33,000 15,000 1,000 - 7,650 4,500 1,720	100.00 100.00 42.31 100.00 100.00 - 51.00 30.00 86.00	- $ 126,312 424,828 144,268 24,854 101 64,517 37,951 8,834	- $ 4,867 78,889) ( 5,203) ( 5,048) ( 4,917) ( 19,894 19,894) ( 4,917) (	- $ 4,867 32,906) ( 4,914) ( 5,048) ( 2,186) ( 10,146) ( 5,968) ( 577) (	Note 1 `〞` `〞` `〞` `〞` Note 2 `〞` `〞` `〞`

Note 1: The Company’s subsidiary. Note 2: The Company’s second tier subsidiary.

Table 3

Hannstouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Information on investments in Mainland China

Year ended December 31, 2023

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

Table 4

Investee in Mainland China	Main business activities	Paid-in capital `（`Note1`）`	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	endedDecember31,2023 Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year	endedDecember31,2023 Amount remitted from Taiwan to Mainland China/ Amount remitted back to Taiwan for the year	Accumulated amount of remittance from Taiwan to Mainland China as of December 31, 2023	Net income of investee for the year ended December31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2023	Book value of investments in Mainland China as of December 31, 2023(Note 3)	Accumulated amount of investment income remitted back to Taiwan as of December31,2023	Note
					Remitted to Mainland China	Remitted back toTaiwan
NanJin GuanXin Co. Ltd. Guangdong Shekel Technology Co., Ltd. (formerly known as: HeXin Shang Mao)	Development and production of PMMA, light guide plate and related components Provision of technical services	$ 469,950 29,160	Note 2 Note 3	$ 148,434 29,160	$ - -	$ - -	$ 148,434 29,160	$ - (4,915)	31.12 100.00	$ - $ (4,915)	$ - $ 23,451	$ - $ -	Note 4 Note 6

Accumulated amount of Investment amount approved by the Ceiling on investments in Mainland remittance from Taiwan to Investment Commission of the China imposed by the Investment Company name Mainland China (Note 5) Ministry of Economic Affairs (MOEA) Commission of MOEA HannsTouch Solution Incorporated $ 1,819,109 $ 1,819,109 $ 5,657,851

Note 1: Translated from historical exchange rate.

Note 2: Reinvested through Richest Investment Ltd.

Note 3: Reinvested through Hanns Blegrain Ltd.

Note 5: NTD amount was translated from historical exchange rate of actual remittance.

Note 6: HeXin Shang Mao completed the registration of its name change in October 2023 and is now named as "Guangdong Shekel Technology Co., Ltd.".

Table 4

Hannstouch Holdings Company

(Formerly HannsTouch Solution Incorporated) and Subsidiaries

Major shareholders information

December 31, 2023

Table 5

Name of major shareholders	Shares	Shares
	Number of shares held(shares in thousands)	Ownership (%)
Hannstar Display Corp. Huali Investment Corp.	214,639 59,440	26.76% 7.41%

Table 5

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED CASH AND CASH EQUIVALENTS DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 1

tatement 1
Items Summary Petty cash and revolvimg funds Bank deposit Checking account deposits NTD Demand deposits NTD JPY 11,884 thousand, exchange rate: $0.2173 USD 1,234 thousand, exchange rate: $30.705 Cash equivalents Time deposits Bills with repurchase agreement	Amount
	22 $ 639 72,694 2,582 37,891 1,050,000 100,000
	1,263,828 $

Statement 1

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED

CHANGE IN CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 2

Statement 2
Investee	Valuation adjustment Balance as at January1,2023 Increase Decrease Balance as at December 31,2023					Collateral orpledge Description
	No. of shares (in thousands)	Fairvalue No. of shares (in thousands)	Amount No. of shares (in thousands)	Amount Amount No. of shares (in thousands)	Fairvalue
HIM International Music Inc. Union Bank of Taiwan Preferred Stock Banyan Tree Holdings Limited Fullerton Technology Co., Ltd. Aten International Co., Ltd. Wistron Corporation Farglory Land Development co., Ltd. Winstek Semiconductor Technology Materials Analysis Technology Inc. Super Micro Computer, Inc. Winbond Electronics Corp. YH Bio Co., Ltd. Touch Cloud Inc. Non-hedging derivatives	191 466 2,990 3,209 44 - - - - - - 6,973 250 Not applicable	15,490 $ 20 24,092 14 21,885 775 58,244 791 3,410 - - 900 - 240 - 276 - 112 - 2 - 1,500 7,917 - 878 - 48 Not applicable 131,964 $	1,963 $ - 733 339) ( 6,177 151) ( 14,883 - - 44) ( 30,679 900) ( 14,768 75) ( 23,427 - 30,173 - 14,265 - 33,000 - - - - - - Not applicable 170,068 $	- $ 5,019 $ 211 17,862) ( 266 141 1,058) ( 2,034 3,614 - 16,673 4,000 3,432) ( 22 - 30,679) ( - - 4,615) ( 781) ( 165 - 1,772 276 - 4,133) ( 112 - 573 2 - 12,675 1,500 - 13) ( 6,973 - 653 250 - 659 Not applicable 57,646) ($ 35,419 $	22,472 $ 7,229 29,038 89,800 - - 9,372 25,199 26,040 14,838 45,675 7,904 1,531 707 279,805 $	None 〃〃〃〃〃〃〃〃〃〃〃〃〃 Note
		$

Note: The amount pertains to fair value of non-hedging derivatives as at December 31, 2023, please refer to Note 6(2) for details.

Statement 2

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED)

CHANGE IN NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 3

Statement 3
Investee	Balance as at January1,2023		Increase		Decrease	Valuation adjustment	No. of shares (in thousands) Fairvalue Collateral orpledge Description Balance as at December 31,2023
	No. of shares (in thousands)	Fairvalue	No. of shares (in thousands)	Amount	No. of shares (in thousands) Amount	Amount	No. of shares (in thousands)
NFORE TECHNOLOGY Co., Ltd. Boretech Resource Recovery Engineering Co., Ltd. Strong-Wave Radio Technology Inc. Lian Ding Capital Co., Ltd. Grandfull Convergence Innovation Growth Fund, L.P..C. Cypress Venture Captial III Ltd.	1,000 425 - Not applicable Not applicable Not applicable	47,573 $ 25,214 - 57,095 29,553 18,523 177,958 $	- - 3,333 Not applicable Not applicable Not applicable	- $ - 10,000 - - - 10,000 $	- - $ - - - - Not applicable - Not applicable 2,905) ( Not applicable - 2,905) ($	3,565 $ 961 960) ( 13,841 14,353 2,477 34,237 $	1,000 425 3,333 Not applicable Not applicable Not applicable	51,138 $ None 26,175 〃 9,040 〃 70,936 〃 41,001 〃 21,000 〃 219,290 $

Statement 3

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED)

CHANGE IN NON-CURRENT FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 4

Statement 4
Investee	Balance as at January1,2023 Increase Decrease				Valuation adjustment Amount No. of shares (in thousands) Acquisitioncost Fairvalue Collateral orpledge Description Balance as at December 31,2023
	No. of shares (in thousands)	Fairvalue No. of shares (in thousands)	Amount No. of shares (in thousands)	Amount	Amount No. of shares (in thousands)
Hannstar Display Corp.	49,670	553,821 $ 150	1,792 $ -	- $	34,754 $ 49,820	646,094 $ 590,367 $ None None

Statement 4

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED CHANGE IN INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 5

Statement 5
Name (	Cash dividends paid duringthe year Number of shares Number of shares in thousands ofshares) Amount (in thousands ofshares) Amount Amount 4,500 - $ - - $ - $ 15,000 121,445 - - - 33,000 457,734 - - - 15,000 149,182 - - - 1,000 30,714 - - - 759,075 $ - $ - $ Opening balance Addition	Investment income (loss)	Cumulative translation adjustment	Ending balance	Market price or netequity
	Number of shares in thousands ofshares) 4,500 15,000 33,000 15,000 1,000	Amount - $ 4,867 32,906) ( 4,914) ( 5,048) ( 38,001) ($			Total amount - $ 126,312 424,828 144,268 24,854 720,262 $
Richest Investment Ltd. Golden Apple Investment Corporation GloryStone Inc. Yin Wang Investment Corporation Hanns Blegrain Ltd.

Statement 5

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED DETAILS OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 6

CustomerName A customer B customer C customer D customer Others Less: Allowance for doubtful accounts	Amount Note 37,480 $ 27,921 21,808 21,356 10,801 The balance of individual client account is less than 5% of the accounts receivable balance 119,366 33) ( 119,333 $	Note

Statement 6

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF INVENTORIES

DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 7

Amount

Items Materials and supplies Work in progress Finished goods Less: Allowance for inventory valuation losses and loss for obsolete and slow-moving inventories (	Cost 86,862 $ 36,293 45,672 168,827 38,467) 130,360 $	Net realisable value 84,632 $ 36,293 37,047 157,972 $	Note
			Inventories calculated based on lower of cost and the net realisable value.

Statement 7

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF ACCOUNTS PAYABLE

DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 8 Vendor name A Vendor Others	Amount Note 26,092 $ 37,751 The balance of individual vendor account is less than 5% of the accounts payable balance 63,843 $	Note

Statement 8

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF LONG-TERM BORROWINGS DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 9 Creditor	Summary Secured borrowings for land and buildings located in Yixian Rd., Sec. 2, with a contract period of 15 years. Interest is payable monthly for the first 3 years, and the principal is payable quartely starting from the fourth year until May 2033. The borrowing period is 5 years, interest is payable monthly for the first 2 years, and the principal is payable quarterly starting from the third year until October 2026. The borrowing period is 5 years, interest is payable quarterly and the principal is payable quarterly starting from the inception date until September 2028. Current portion (including unamortized cost of long-term borrowings) (	Amount 1,641,159 $ 567,770 47,500 2,256,429 372,010) 1,884,419 $	Contractperiod 2018/5~2033/5 2021/10~2026/10 2023/9~2028/9	Interest 1.95% 1.92% 2.00%	Pledged orguarantee
Land Bank Bank of Taiwan Chang Hwa Commercial Bank Less:					Investment property Machinery and equipment -

Statement 9

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 10

Items Sales revenue Touch products Rental revenue from property Total operating revenue Less: Sales returns and discounts and allowances Operating revenue, net	Numbers (in thousand pcs) 689 (	Amount 1,124,774 $ 173,162 1,297,936 44,427) 1,253,509 $

Statement 10

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF OPERATING COST

FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 11
Items			Amount
Direct materials
Add: Raw materials at beginning		$	87,758
Material purchased during the year			789,753
Less: Raw materials at the end	(		86,862)
Others	(		340,737)
Cost of material			449,912
Direct labor			55,653
Overhead			1,689,852
Unallocated overhead expense	(		798,840)
Manufacturing cost			1,396,577
Add: Beginning work in progress			1,725
Less: Ending work in progress	(		36,293)
Cost of finished goods			1,362,009
Add: Beginning finished goods			124,600
Purchases during the year			2,418
Less: Ending finished goods	(		45,672)
Expenses order settlement	(		2,752)
Others	(		192,839)
Cost of finished goods sold			1,247,764
Unallocated fixed overhead expense			798,840
Gain on reversal of decline in market value	(		4,269)
Scrapped inventories			18,856
Total operating cost		$	2,061,191

Statement 11

HANNSTOUCH HOLDINGS COMPANY (FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF MANUFACTURING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023 (Expressed in thousands of New Taiwan dollars)

Statement 12

Items Depreciation Repairs and maintenance expense Utilities expense Salary expenses Amortisation charge Others	Amount Note 900,829 $ 215,326 235,014 110,735 6,666 221,282 The balance of individual item account is less than 5% of the manufacturing expense. 1,689,852 $

Statement 12

HANNSTOUCH HOLDINGS COMPANY

(FORMERLY HANNSTOUCH SOLUTION INCORPORATED) DETAILS OF OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

(Expressed in thousands of New Taiwan dollars)

Statement 13

Employee benefit expense
Salary expenses
Labour and health insurance fees
Pension costs
Directors’ remuneration
Other employee benefit expenses
Depreciation
Amortisation charge
Import / export (customs) expenses
Testing fee
Others

Selling
General and
administrative
Research and
development
expenses
expenses
expenses
Total
Note
9,082
$ 38,507
$ 12,271
$ 59,860
$ 902

3,150

1,215
5,267
506

1,586

709

2,801
-

2,613

-
2,613
650

5,271

570

6,491
121

1,064
1,174
2,359

-

-
3,112

3,112
7,479

-

-

7,479
501

23,804
720
25,025

6,294
36,232
8,145
50,671
The balance of individual
item account is less than
5% of the operating
expense.
25,535
$ 112,227
$ 27,916
$ 165,678
$

Statement 13

AI assistant

HannsTouch — Annual Report 2023

52281_rns_2024-08-21_feaf82a4-82d6-4273-b8d6-60c36a4ac3ea.pdf

HannsTouch Holdings Company (Formerly HannsTouch Solution Inc.) HannsTouch Holdings Company

2023 Annual Report

Publication Date: April 2, 2024

I. Name, title, contact number, and e-mail of spokesperson and acting spokesperson:

II. Address and contact number of the headquarter, branches and plant sites:

III. Name, address, website, and contact number of stock transfer agency:

IV. Name of CPA and the name, address, website and contact number of the accounting firm for the latest financial

report:

HannsTouch Holdings Company

Table of Content

One. Report to Shareholders

I. 2023 Business Report

II. Summary of the 2024 business plan

III. Future strategies, impacts of the competitive environment, regulatory environment, and the overall business environment

3. Service model

Two. Company Profile

I. Publication Date: September 18, 1999

II. Company history:

Three. Corporate Governance Report

I. Organization

II. Background information of directors, supervisors, the President, vice presidents, assistant vice presidents, and heads of various departments and branches

(3) Directors' expertise and independence

the date elected.

(II) Profiles of the President, vice presidents, assistant vice presidents, and managers:

III. Compensation to directors, supervisors, the President, and vice presidents in the latest year

(III) Compensation to the President and vice presidents:

Compensation range

IV. Corporate governance

(I) Functionality of board of directors:

III. Duty execution status:

IV. Continuing education of head of corporate governance:

(VI) Climate-related information

1 、 Implementation of climate-related information

HannsTouch Holdings Company Declaration of Internal Control System

V. Disclosure of audit fees

VIII. Details of shares transferred or pledged by directors, supervisors, managers, and shareholders with more than 10% ownership interest in the last year, up to the publication date of this annual report:

IX. Relationships characterized as spouse or second-degree relatives or closer among top-ten shareholders:

X. Investments jointly held by the Company, the Company's directors, supervisors, managers, and enterprises directly or indirectly controlled by the Company; disclose shareholding in aggregate of the above parties:

Four. Capital Overview

I. Capital and outstanding shares

(VI) Dividend policy and execution:

II. Corporate bonds (including offshore corporate bonds):

III. Preferred shares: Nil.

IV. Depository receipts: Nil.

Five. Operational Overview

I. Business activities

(I) Business activities:

(II) Industry overview:

2-1 Structure of the TFT display:

TFF-LCD Module Structure

2-4 Association among upstream, mid-stream, and downstream of the electronic paper:

3. Product trend:

(2) Patent application

(3) Future R&D plans and expected expenses

II. Market, production and sales overview

2. TFT back panel

(III) Supply of main materials:

III. Employee information in the last 2 years up to the publication date of this annual report

IV. Contribution to environmental protection

V. Labor-management relations

VI. Information security management

VII. Major contracts

Six. Financial Overview

I. Summary balance sheet and statement of comprehensive income for the last 5 years

II. Financial analysis for the last 5 years

6. Degree of leverage

III. Audit Committee's review report on the latest financial statements

Audit Committee’s Review Report

IV. Consolidated Financial Statements and Independent Auditor's Report of the Most Recent Year:

V. Standalone Financial Statements and Independent Auditor's Report of the Most Recent Year:

Seven. Review and Analysis of Financial Position and Business Performance, and Risk Management

Issues

I. Financial position

II. Financial performance

III. Cash flow

IV. Material capital expenditures in the last year and impact on business performance

V. Investment policy in the most recent year, causes of profit or loss incurred, and any improvements or investments planned for the next year

HannsTouch Annual Report 2023

1 `、` Implementation of climate-related information