KYEC - Annual Report 2024 | FinancialReports.eu

English Translation of a Report and Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 WITH INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

Address: No. 81, Sec. 2, Gongdao 5th Rd., Hsinchu City 300, Taiwan (R.O.C.) Telephone: 886-3-5751888

The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

REPRESENTATION LETTER

The entities included in the consolidated financial statements as of December 31, 2024 and for the year then ended prepared under the International Financial Reporting Standards, No.10 are the same as the entities to be included in the combined financial statements of the Company, if any to be prepared, pursuant to the Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises (referred to as “Combined Financial Statements”). Also, the footnotes disclosed in the Consolidated Financial Statements have fully covered the required information in such Combined Financial Statements. Accordingly, the Company did not prepare any other set of Combined Financial Statements than the Consolidated Financial Statements.

Very truly yours,

King Yuan Electronics Co., Ltd.

Chairman: C. K. Lee February 21, 2025

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安永聯合會計師事務所

30078 新⽵市新⽵科學園區⼒⾏⼀路 1 號 E-3 E-3, No. 1, Lixing 1st Rd., Hsinchu Science Park Hsinchu City, Taiwan, R.O.C.

電話 Tel: 886 3 688 5678 傳真 Fax: 886 3 688 6000 ey.com/zh_tw

Independent Auditors’ Report

English Translation of A Report Originally Issued in Chinese

To King Yuan Electronics Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of King Yuan Electronics Co., Ltd. and its subsidiaries as of December 31, 2024 and 2023, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2024 and 2023, and notes to the consolidated financial statements, including the summary of material accounting policies (together “the consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of King Yuan Electronics Co., Ltd. and its subsidiaries as of December 31, 2024 and 2023, and their consolidated financial performance and cash flows for the years ended December 31, 2024 and 2023, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effectively by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the 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 King Yuan Electronics Co., Ltd. and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

A member firm of Ernst & Young Global Limited

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2024 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, and we do not provide a separate opinion on these matters.

Revenue recognition

King Yuan Electronics Co., Ltd. and its subsidiaries recognized net sales of NT$26,856,031 thousand for the years ended December 31, 2024. Its main activities are providing testing and assembly services and rental of testing machineries that represented 94%, or NT$25,302,775 thousand in the amount, of the net operating revenue.

The primary activities of King Yuan Electronics Co., Ltd. and its subsidiaries are providing testing and assembly services, and the services comprise various wafers/integrated circuits testing and assembly processing and rental of machinery, due to the different customers’ demand and nature of revenue that increase the complexity of the revenue recognition. Therefore, we determined the matter to be a key audit matter.

Our audit procedures include (but are not limited to) assessing the appropriateness of the accounting policy for revenue recognition; evaluating and testing the effectiveness of internal control relating to the timing of revenue recognition, analyzing the reasonableness of gross profit margin by products, performing cutoff testing for a period before and after the balance sheet date on a sampling basis, performing test of details on selected samples, reviewing the significant terms of sales agreements and examining relevant delivery documents, and reviewing the selected samples of the quantity, specification, period and relevant documents of machinery services for the rental of testing machineries.

We also considered the appropriateness of the disclosures of operating revenue. Please refer to Note 4 and Note 6 in notes to the consolidated financial statements.

A member firm of Ernst & Young Global Limited

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Reclassification of the disposal group held for sale and the profit from discontinued operations

On April 26, 2024, the Board of Directors resolved to sell its entire 92.16% ownership interest in King Long Technology (Suzhou) Ltd., with the price of RMB$9.67 per registered capital unit which was previously owned by KYEC Microelectronics Co., Ltd., and the registered capital will transfer to Suzhou Industrial Park Industrial Investment Fund (L.P.) and other companies with the total transaction amount of RMB$ 4,884,582 thousand. The disposal group held for sale and liabilities directly associated with disposal group held for sale of NT$25,387,003 thousand and NT$7,253,301 thousand, constituting 29% and 17% of the consolidated total assets and total liabilities as of December 31, 2024, respectively; and total profit from of discontinued operations of NT$3,334,485 thousand, constituting 39% of the consolidated total comprehensive income for the year ended December 31, 2024. The accuracy and reasonableness of the equity transaction and the reclassification of accounts have a material effect on the financial statements. Therefore, we determined the matter to be a key audit matter.

Our audit procedures include (but are not limited to) obtaining the minutes of the Board of Directors' resolution executing the equity transaction and the share purchase agreement as well as assessing the authenticity of the equity transaction; analyzing the reasonableness of the reclassification of the disposal group held for sale and the profit from of discontinued operations, considering criteria of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations.”, we also performed control and/or substrative audit procedures to test the components of disposal group held for sale and liabilities directly associated with disposal group held for sale, and profit from discontinued operations, including confirmations, tests of details, analytical procedures and cut off testing, to verify the accuracy of the carrying values. Furthermore, we reviewed the share purchase agreement to assess the reasonableness of the transaction amount. Up and through the balance sheet date.

We also considered the appropriateness of the disclosures of reclassification of the disposal group held for sale and income (loss) from discontinued operations. Please refer to Note 4, Note 6, Note 7 and Note 8 in notes to the consolidated financial statements.

A member firm of Ernst & Young Global Limited

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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 requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China and for such internal control as management determines is necessary to enable the preparation of the 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 ability to continue as a going concern of King Yuan Electronics Co., Ltd. and its subsidiaries, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate King Yuan Electronics Co., Ltd. and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee, are responsible for overseeing the financial reporting process of King Yuan Electronics Co., Ltd. and its subsidiaries.

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.
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A member firm of Ernst & Young Global Limited

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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 internal control of King Yuan Electronics Co., Ltd. and its subsidiaries.
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 ability to continue as a going concern of King Yuan Electronics Co., Ltd. and its subsidiaries. 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 King Yuan Electronics Co., Ltd. and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, 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 King Yuan Electronics Co., Ltd. and its subsidiaries 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.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2024 consolidated financial statements 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.

A member firm of Ernst & Young Global Limited

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Others

We have audited and expressed an unqualified opinion on the parent company only financial statements of King Yuan Electronics Co., Ltd. as of and for the years ended December 31, 2024 and 2023.

Chiu, Wan-Ju

Hsu, Hsin-Min

Ernst & Young, Taiwan February 21, 2025

Notice to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.
Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.
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A member firm of Ernst & Young Global Limited

English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31, 2024 and 2023

(Amounts in thousands of New Taiwan Dollars)

ASSETS	Notes		December 31,2024		%		December 31,2023		%
Current assets Cash and cash equivalents Contract assets-current Accounts receivable, net Accounts receivable from related parties, net Other receivables Other receivables from related parties Inventories, net Prepayments Disposal group held for sale Other current assets Other financial assets-current Total current assets Non-current assets Financial assets at fair value through other comprehensive income-non-current Investments accounted for using the equity method Property, plant and equipment Right-of-use asset Intangible assets Deferred tax assets Other financial assets-non-current Other non-current assets Total non-current assets Total assets	4, 6(1) 4, 6(16), 6(17), 7 4, 6(3), 6(17) 4, 6(3), 6(17), 7 4, 7 4, 6(4) 6(5) 4, 6(6), 8 8 4, 6(2) 4, 6(7) 4, 6(8), 7, 8 4, 6(18), 8 4, 6(9) 4, 6(21), 6(22) 8		$10,329,331 90,414 4,050,713 1,980,803 764,228 17,915 848,115 219,398 25,387,003 230,068 - 43,917,988 6,369,337 99,727 34,923,771 1,045,372 7,503 167,443 148,916 30,729 42,792,798 $86,710,786		12 - 5 3 1 - 1 - 29 - - 51 8 - 40 1 - - - - 49 100		$12,262,554 414,883 5,498,025 1,972,960 154,025 100,977 1,072,751 502,046 - 62,831 4 22,041,056 6,541,681 93,982 44,140,466 620,991 13,171 302,946 147,333 9,607 51,870,177 $73,911,233		17 1 7 3 - - 1 1 - - - 30 9 - 60 1 - - - - 70 100

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

(continued)

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 2024 and 2023

(Amounts in thousands of New Taiwan Dollars)

LIABILITIES AND EQUITY	Notes		December 31, 2024		%		December 31, 2023		%
Current liabilities Short-term loans Contract liabilities-current Notes payable Accounts payable Accounts payable to related parties Other payables Other payables to related parties Payables on equipment Current tax liabilities Liabilities directly associated with disposal group held for sale Lease liabilities-current Current portion of long-term loans Other current liabilities Total current liabilities Non-current liabilities Long-term loans Deferred tax liabilities Lease liabilities-non-current Long-term deferred income Net defined benefit liabilities Guarantee deposits Total non-current liabilities Total liabilities Equity attributable to owners of the parent company Share capital Common stock Capital surplus Retained earnings Legal reserve Special reserve Undistributed earnings Total retained earnings Other equity Equity attributable to owners of the parent company Non-controlling interests Total equity Total liabilities and equity	4, 6(10), 9 4, 6(16), 7 7 7 4, 6(22) 4, 6(6), 8 4, 6(18) 4, 6(12), 8, 9 6(11) 4, 6(12), 8, 9 4, 6(21), 6(22) 4, 6(18) 4, 6(13) 4, 6(14) 4, 6(14), 6(15), 6(24) 4, 6(2), 6(14) 4, 6(2), 6(14) 4, 6(14), 6(24)		$- - 8,115 918,828 15,446 4,543,127 110,592 1,749,768 746,284 7,253,301 148,609 - 1,412,558 16,906,628 20,580,713 2,952,476 926,222 - 626,948 6,316 25,092,675 41,999,303 12,227,451 5,077,764 4,763,685 201,416 17,431,161 22,396,262 3,594,796 43,296,273 1,415,210 44,711,483 $86,710,786		- - - 1 - 5 - 2 1 8 - - 2 19 24 3 1 - 1 - 29 48 14 6 6 - 20 26 4 50 2 52 100		$220,133 9,365 858 1,154,413 7,154 3,424,447 69,979 752,648 406,759 - 30,876 574,528 1,096,832 7,747,992 22,601,096 2,345,260 441,190 70,017 645,076 34,052 26,136,691 33,884,683 12,227,451 4,955,581 4,177,574 201,416 14,133,456 18,512,446 3,207,531 38,903,009 1,123,541 40,026,550 $73,911,233		- - - 2 - 5 - 1 - - - 1 1 10 31 3 1 - 1 - 36 46 16 7 6 - 19 25 4 52 2 54 100

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

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2024 and 2023

(Amounts in thousands of New Taiwan Dollars, except for earnings per share)

Description	Notes	2024	%	2023	%
Net sales Operating costs Gross profit Operating expenses Selling expenses Administrative expenses Research and development expenses Expected credit losses Total operating expenses Operating income Non-operating income and expenses Interest income Other income Other gains and losses Finance costs Share of profit of associates accounted for using the equity method Total non-operating income and expenses Net income before income tax Income tax expense Net income from continuing operation Total profit from discontinued operations Net income Other comprehensive income Items that will not be reclassified subsequently to profit or loss: Remeasurements of the defined benefit plan Unrealized gains and losses from equity instrument investments measured at fair value through other comprehensive income Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Items that will be reclassified subsequently to profit or loss: Exchange differences resulting from translating the financial statements of foreign operations Equity directly associated with disposal group held for sale Income tax related to components of other comprehensive income that will be reclassified to profit or loss Other comprehensive income, net of tax Total comprehensive income Net income attributable to : Owners of the parent company Non-controlling interests Total comprehensive income attributable to : Owners of the parent company Non-controlling interests Earnings per share (NT$) From continuing and discontinued operations Basic Earnings Per Share Diluted Earnings Per Share From continuing operations Basic Earnings Per Share Diluted Earnings Per Share	4, 6(16), 6(18), 7 4, 6(4), 6(9), 6(13), 6(18), 6(19), 7 4, 6(9), 6(13), 6(17), 6(18), 6(19), 7 4, 6(2), 6(7), 6(20), 7 4, 6(22) 4, 6(6) 4, 6(13), 6(21), 6(22) 4, 6(23)	$26,856,031 (17,512,212) 9,343,819 (399,149) (1,916,934) (855,470) - (3,171,553) 6,172,266 75,629 238,903 (96,729) (437,967) 19,445 (200,719) 5,971,547 (1,210,746) 4,760,801 3,334,485 8,095,286 17,172 (172,344) 34,470 977,406 (262,947) (131,286) 462,471 $8,557,757 $7,779,428 315,858 $8,095,286 $8,183,865 373,892 $8,557,757 $6.36 $6.32 $3.95 $3.93	100 (65) 35 (2) (7) (3) - (12) 23 - 1 - (2) - (1) 22 (4) 18 12 30 - (1) - 4 (1) - 2 32 29 1 30 31 1 32	$23,991,580 (16,064,707) 7,926,873 (362,633) (1,492,490) (811,514) (8,481) (2,675,118) 5,251,755 65,449 264,065 157,656 (516,155) 17,754 (11,231) 5,240,524 (955,071) 4,285,453 1,730,917 6,016,370 20,738 1,747,230 (346,210) (231,435) - 42,802 1,233,125 $7,249,495 $5,840,365 176,005 $6,016,370 $7,090,917 158,578 $7,249,495 $4.78 $4.74 $3.54 $3.51	100 (67) 33 (2) (6) (3) - (11) 22 - 1 1 (2) - - 22 (4) 18 7 25 - 7 (1) (1) - - 5 30 24 1 25 29 1 30

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

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2024 and 2023

(Amounts in thousands of New Taiwan Dollars)

Description				Equity attributa	ble to owners of the parent company	ble to owners of the parent company				Non-controlling interests	Total Equity
	Common stock	Capital surplus		Retained earnings			Other equity		Equity attributable to owners of the parent company
			Legal reserve	Special reserve	Undistributed earnings	Exchange differences resulting from translating the financial statements of foreign operations	Unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income	Equity directly associated with disposal group held for sale
Balance as of January 1, 2023 Appropriation and distribution of 2022 earnings: Legal reserve Cash dividends Profit for the year ended December 31, 2023 Other comprehensive income for the year ended December 31, 2023 Total comprehensive income Changes in ownership interests in subsidiaries Disposal of equity instruments measured at fair value through other comprehensive income Balance as of December 31, 2023 Balance as of January 1, 2024 Appropriation and distribution of 2023 earnings: Legal reserve Cash dividends Profit for the year ended December 31, 2024 Other comprehensive income for the year ended December 31, 2024 Total comprehensive income Changes in ownership interests in subsidiaries Balance as of December 31, 2024	$12,227,451 - - - - - - - $12,227,451 $12,227,451 - - - - - - $12,227,451	$4,953,859 - - - - - 1,722 - $4,955,581 $4,955,581 - - - - - 122,183 $5,077,764	$3,499,434 678,140 - - - - - - $4,177,574 $4,177,574 586,111 - - - - - $4,763,685	$201,416 - - - - - - - $201,416 $201,416 - - - - - - $201,416	$13,213,921 (678,140) (4,279,608) 5,840,365 20,738 5,861,103 - 16,180 $14,133,456 $14,133,456 (586,111) (3,912,784) 7,779,428 17,172 7,796,600 - $17,431,161	$(284,878) - - - (171,206) (171,206) - - $(456,084) $(456,084) - - - 921,977 921,977 - $465,893	$2,278,775 - - - 1,401,020 1,401,020 - (16,180) $3,663,615 $3,663,615 - - - (137,874) (137,874) - $3,525,741	$- - - - - - - - $- $- - - - (396,838) (396,838) - $(396,838)	$36,089,978 - (4,279,608) 5,840,365 1,250,552 7,090,917 1,722 - $38,903,009 $38,903,009 - (3,912,784) 7,779,428 404,437 8,183,865 122,183 $43,296,273	$855,439 - - 176,005 (17,427) 158,578 109,524 - $1,123,541 $1,123,541 - - 315,858 58,034 373,892 (82,223) $1,415,210	$36,945,417 - (4,279,608) 6,016,370 1,233,125 7,249,495 111,246 - $40,026,550 $40,026,550 - (3,912,784) 8,095,286 462,471 8,557,757 39,960 $44,711,483

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

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2024 and 2023

(Amounts in thousands of New Taiwan Dollars)

Description	2024	2023	Description	2024	2023
Cash flows from operating activities : Profit before tax from continuing operations Profit before tax from discontinued operations Profit before tax Adjustments for : The profit or loss items which did not affect cash flows: Depreciation Amortization Expected credit losses Interest expenses Interest income Dividend income Share-based payment expenses Investment gain accounted for using the equity method Gain on disposal of property, plant and equipment Loss on disposal of other assets Impairment of non-financial assets Unrealized foreign exchange losses (gains) Changes in operating assets and liabilities : Contract assets Notes receivable Accounts receivable Accounts receivable from related parties Other receivables Other receivables from related parties Inventories Prepayments Other current assets Contract liabilities Notes payable Accounts payable Accounts payable to related parties Other payables Other payables to related parties Other current liabilities Accrued pension liabilities Other operating liabilities Cash generated from operating activities Interest received Income tax paid Net cash provided by operating activities	$5,971,547 4,373,140 10,344,687 7,312,965 10,859 173 561,054 (142,542) (98,364) 60,450 (19,445) (156,697) - 123,029 511,024 322,663 - (1,141,129) (88,444) (633,185) 83,062 54,603 (387,697) (167,237) (1,333) 7,257 845,310 8,292 1,658,135 38,847 318,121 (956) (11,860) 19,411,642 130,270 (1,066,452) 18,475,460	$5,240,524 2,243,395 $7,483,919 9,105,051 29,223 9,295 689,750 (134,498) (99,233) 86,529 (17,754) (78,514) 19 - (405,089) (261,130) 7,218 (125,226) (219,812) 260,711 (74,727) 295,875 (386,298) (7,705) (147,274) (10,588) 146,364 939 (285,484) (11,718) (55,017) 7,970 27,197 15,829,993 126,058 (1,695,720) 14,260,331	Cash flows from investing activities : Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Decrease in refundable deposits Acquisition of intangible assets Acquisition of right-of-use assets Increase in other financial assets Dividend received Net cash used in investing activities Cash flows from financing activities : Increase in short-term loans Decrease in short-term loans Borrowing in long-term loans Repayments of long-term loans Increase in deposits received Decrease in deposits received Cash payments for the principal portion of the lease liabilities Cash dividends Interest paid Change in non-controlling interests Net cash used in financing activities Effect of changes in exchange rate on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the period Cash and cash equivalents at the end of the period Reconciliation of the amounts in the consolidated statements of cash flows with cash and cash equivalent items reported : Cash and cash equivalents in the consolidated balance sheets Cash and cash equivalents in disposal group held for sale Cash and cash equivalents in the consolidated statements of cash flows	(14,856,945) 420,431 (24,682) - (4,540) - (1,583) 112,064 (14,355,255) - (231,577) 32,340,303 (30,348,239) - (27,736) (29,576) (3,912,784) (550,856) (20,608) (2,781,073) 935 1,340,067 12,262,554 13,602,621 $10,329,331 3,273,290 $13,602,621	(7,726,307) 345,278 - 252 (3,184) (2,400) (871) 114,053 (7,273,179) 221,830 (1,023,479) 13,974,312 (15,677,089) 962 - (29,663) (4,279,608) (706,544) 24,258 (7,495,021) (45,692) (553,561) 12,816,115 12,262,554 $12,262,554 - $12,262,554

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

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of New Taiwan dollars unless otherwise stated)

1. Organization and Operation

King Yuan Electronics Co., Ltd. ("KYEC") was incorporated under the Company Law of the Republic of China (“R.O.C) on May 28, 1987, and commenced operations on July 23, 1987. The Company primarily engages in the business of design, manufacturing, selling, testing and assembly service of integrated circuits, and also engages in manufacturing and selling of IC Monitoring Burn-In machinery and related components. On May 9, 2001, the shares of KYEC were listed on the Taiwan Stock Exchange. KYEC’s registered office and the main business location is at No. 81, Sec. 2, Gongdaowu Road, Hsinchu City 300, Republic of China (R.O.C.).

2. Date and Procedures of Authorization of Financial Statements for Issue

The accompanying consolidated financial statements of KYEC and its subsidiaries (“the Company”) were approved and authorized for issue by the Board of Directors on February 21, 2025.

3. Newly Issued or Revised Standards and Interpretations

(1) Change in accounting policies resulting from applying for the first time certain standards and amendments

The Company applied for the first time International Financial Reporting Standards (“IFRS”), International Accounting Standards (“IAS”), and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2024. The application of these new standards and amendments had no material effect on the Company.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which are endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below:

Items	New,Revised or Amended Standards and Interpretations	Effective Date Issued byIASB
A	Lack of Exchangeability– Amendments to IAS 21	January1,2025

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(A) Lack of Exchangeability – Amendments to IAS 21

These amendments specify whether a currency is exchangeable into another currency and, when it is not, to determining the exchange rate to use and the disclosures to provide.

The abovementioned amendments are applicable for annual periods beginning on or after January 1, 2025 and have no material impact on the Company.

(3) Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, and not yet adopted by the Company as at the end of the reporting period are listed below:

Items	New,Revised or Amended Standards and Interpretations	Effective Date Issued byIASB
A	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures(Amendment)	To be determined by IASB
B	IFRS 17 “Insurance Contracts”	January1,2023
C	IFRS 18 “Presentation and Disclosure in Financial Statements”	January1,2027
D	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures(IFRS 19)	January 1, 2027
E	Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	January 1, 2026
F	Annual Improvements to IFRS Accounting Standards – Volume 11	January 1, 2026
G	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	January 1, 2026

(A) IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” – Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures (Amendment)
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The amendments address the inconsistency between the requirements in IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint venture. IFRS 10 requires full profit or loss recognition on the loss of control of a subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

IFRS 10 was also amended so that the gain or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

(B) IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after January 1, 2023 (from the original effective date of January 1, 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after January 1, 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as below:

(1) Improved comparability in the statement of profit or loss (income statement)

IFRS 18 requires entities to classify all income and expenses within their statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. The first three categories are new, to improve the structure of the income statement, and requires all entities to provide new defined subtotals, including operating profit or loss. The improved structure and new subtotals will give investors a consistent starting point for analyzing entities’ performance and make it easier to compare entities.

(2) Enhanced transparency of management-defined performance measures

IFRS 18 requires entities to disclose explanations of those entity-specific measures that are related to the income statement, referred to as management-defined performance measures.

(3) Useful grouping of information in the financial statements

IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

(D) Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)

This standard permits subsidiaries without public accountability to provide reduced disclosures when applying IFRS Accounting Standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

(E) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7
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The amendments include:

(1) Clarify that a financial liability is derecognised on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.
(2) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.
(3) Clarify the treatment of non-recourse assets and contractually linked instruments.
(4) Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESGlinked), and equity instruments classified at fair value through other comprehensive income.
(F) Annual Improvements to IFRS Accounting Standards – Volume 11
(1) Amendments to IFRS 1
(2) Amendments to IFRS 7
(3) Amendments to Guidance on implementing IFRS 7
(4) Amendments to IFRS 9
(5) Amendments to IFRS 10
(6) Amendments to IAS 7
(G) Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS
7

The amendments include:

(1) Clarify the application of the ‘own-use’ requirements.
(2) Permit hedge accounting if these contracts are used as hedging instruments.
(3) Add new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.
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The abovementioned standards and interpretations issued by IASB have not yet been endorsed by FSC at the date of issuance of the Company’s financial statements, the local effective dates are to be determined by FSC. As the Company is currently determining the potential impact of the standards and interpretations listed under (C). All other standards and interpretations have no material impact on the Company.

4. Summary of Material Accounting Policies

(1) Statement of Compliance

The accompanying consolidated financial statements as of and for the years ended December 31, 2024 and 2023 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”), IFRSs, IASs, IFRIC and SIC, which are endorsed by FSC.

(2) Basis of Preparation

The accompanying consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The accompanying consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of Consolidation

Preparation principle of consolidated financial statement

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has:

a. power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee);
b. exposure, or rights, to variable returns from its involvement with the investee; and
c. the ability to use its power over the investee to affect its returns.
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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

a. the contractual arrangement with the other vote holders of the investee;
b. rights arising from other contractual arrangements;
c. the Company’s voting rights and potential voting rights.

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Company obtains control, and continue to be consolidated until the date the Company ceases to control the subsidiary. The financial statements of the subsidiaries are prepared for the same reporting period with the parent company, using consistent accounting policies. All intragroup balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Company loses control of a subsidiary, it:

a. derecognizes the assets (including goodwill) and liabilities of the subsidiary;
b. derecognizes the carrying amount of any non-controlling interest;
c. recognizes the fair value of the consideration received;
d. recognizes the fair value of any investment retained;
e. reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss, or transfer directly to retained earnings if required by other IFRSs; and
f. recognizes any resulting difference in profit or loss.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The consolidated entities are listed as follows:

Investor	Subsidiary	Business nature	Percentage of	Ownership(%)
			2024.12.31	2023.12.31
KYEC KYEC KYEC KYEC KYEC KYEC Investment International Co., Ltd. KYEC Technology Management Co., Ltd.	KYEC USA Corp. KYEC Investment International Co., Ltd. KYEC Technology Management Co., Ltd. KYEC Japan K.K. KYEC SINGAPORE PTE. Ltd. KYEC Microelectronics Co., Ltd. KYEC Microelectronics Co., Ltd.	Sales agent and business communication in USA General investing General investing Manufacturing and sales of electronic parts and components, sales agent and business communication in Japan Sales agent and business communication in Southeast Asia and Europe General investing General investing	100.00 100.00 100.00 89.83 100.00 94.02 5.98	100.00 100.00 100.00 89.83 100.00 94.02 5.98

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KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Investor	Subsidiary	Business nature	Percentage of	Ownership(%)
			2024.12.31	2023.12.31
KYEC Microelectronics Co., Ltd. King Long Technology (Suzhou) Ltd.	King Long Technology (Suzhou) Ltd. Suzhou Zhengkuan Technology Ltd.	Research and development, design, manufacture, packaging, testing, processing and maintenance of semiconductor integrated circuits, transistors, electronic components, electronic materials, analog or hybrid automatic data processors, solid-state memory systems, heating ovens and related products and components. Integrated circuit related technology transfer, technical consultation, technical services, sales of self-produced products and provision of related after-sales services R&D, production (package, testing), processing of large- scale integrated circuits for electronic components, electronic materials, analog or hybrid automatic data processors, solid-state memory systems, heating oven controllers, etc., sales of self- produced products, and provision of relevant after-sales service; integrated circuit related technology transfer, technical consultation, technical service	92.16 100.00	91.54 100.00

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(4) Foreign currency transactions

The Company’s consolidated financial statements are presented in NT$, which is also the parent company’s functional currency. Each entity in the Company determines its functional currency upon its primary economic environment and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Company’s entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

A. exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.
B. foreign currency items within the scope of IFRS 9 “Financial Instruments” are accounted for based on the accounting policy for financial instruments.
C. exchange differences arising on a monetary item that forms part of a reporting entity’s net investment in a foreign operation is recognized initially in other comprehensive income and reclassified from equity to profit or loss on disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(5) Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. The following partial disposals are accounted for as disposals:

A. when the partial disposal involves the loss of control of a subsidiary that includes a foreign operation; and
B. when the retained interest after the partial disposal of an interest in a joint arrangement or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation.

On the partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to non-controlling interests in that foreign operation. In partial disposal of an associate or jointly arrangement that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(6) Current and non-current distinction

An asset is classified as current when:

A. the Company expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
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B. the Company holds the asset primarily for the purpose of trading;
C. the Company expects to realize the asset within twelve months after the reporting period; or
D. the asset is cash or cash equivalent unless the asset is restricted from being exchanged or
used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

A. the Company expects to settle the liability in its normal operating cycle;
B. the Company holds the liability primarily for the purpose of trading;
C. the liability is due to be settled within twelve months after the reporting period; or
D. the Company does not have the right at the end of the reporting period to defer settlement of the liability at least twelve months after the reporting period.

All other liabilities are classified as non-current.

(7) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid time deposits (including ones that have maturity within twelve months) or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(8) Financial instruments

Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 “Financial Instruments” are recognized initially at fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial assets or financial liabilities.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A. Financial instruments: Recognition and Measurement

The Company accounts for regular way purchase or sales of financial assets on the trade date.

The Company classifies financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

a. the Company’s business model for managing the financial assets and
b. the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as note receivables, trade receivables, financial assets measured at amortized cost and other receivables, etc., on balance sheet as at the reporting date:

a. the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
b. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

a. purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
b. financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial assets measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

a. the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
b. the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income is described as below:

a. A gain or loss on a financial asset measured at fair value through other comprehensive income is recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
b. When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
c. Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(a) purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Company applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Company made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investments are recognized in profit or loss unless the dividends clearly represent a recovery of part of the cost of investment.

Financial assets measured at fair value through profit or loss

Financial assets are classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets are measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

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B. Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial assets measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and does not reduce the carrying amount in the statement of financial position.

The Company measures expected credit losses of a financial instrument in a way that reflects:

a. an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
b. the time value of money; and
c. reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measured as follows:

a. at an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Company measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.
b. at an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.
c. for trade receivables or contract assets arising from transactions within the scope of IFRS 15, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
d. for lease receivables arising from transactions within the scope of IFRS 16, the Company measures the loss allowance at an amount equal to lifetime expected credit losses.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

At each reporting date, the Company needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

C. Derecognition of financial assets

A financial asset is derecognized when:

a. the rights to receive cash flows from the asset have expired.
b. the Company has transferred the asset and substantially all the risks and rewards of the asset have been transferred.
c. the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Company classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

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Compound instruments

The Company evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Company assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled.

For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 “Financial Instruments”.

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

Financial liabilities within the scope of IFRS 9 “Financial Instruments ” are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

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Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. Gains or losses on the subsequent measurement of liabilities held for trading including interest paid are recognized in profit or loss.

A financial liability is classified as held for trading if:

a. it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
b. on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of shortterm profit-taking; or
c. it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

a. it eliminates or significantly reduces a measurement or recognition inconsistency; or
b. a group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the Company is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

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Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid or payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

E. Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

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(9) Derivative financial instruments

The Company uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as assets or liabilities at fair value through profit or loss except for derivatives that are designated effective hedging instruments which are classified as derivative financial assets or liabilities for hedging.

Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

When the host contracts are either non-financial assets or liabilities, derivatives embedded in host contracts are accounted for as separate derivatives and recorded at fair value if their economic characteristics and risks are not closely related to those of the host contracts and the host contracts are not designated at fair value though profit or loss.

(10) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

a. in the principal market for the asset or liability, or
b. in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Company.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming market participants act in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(11) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Raw materials – Purchase cost on weighted average method

Finished goods and work in progress – Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(12) Non-current assets held for sale and discontinued operations

Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered through a sale transaction that is highly probable within one year from the date of classification and the asset or disposal group is available for immediate sale in its present condition. Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell.

In the consolidated statement of comprehensive income of the reporting period, and of the comparable period of the previous year, income and expenses from discontinued operations are reported separately from income and expenses from continuing operations, down to the level of profit after taxes, even when the Company retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.

Property, plant and equipment and intangible assets once classified as held for sale are not depreciated or amortized.

(13) Investments accounted for using the equity method

The Company’s investment in its associates is accounted for using the equity method other than those that meet the criteria to be classified as held for sale. An associate is an entity over which the Company has significant influence. A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint venture.

Under the equity method, the investment in the associate in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Company’s share of net assets of the associate or joint venture. After the interest in the associate or joint venture is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate or joint venture. Unrealized gains and losses resulting from transactions between the Company and the associate or joint venture are eliminated to the extent of the Company’s related interest in the associate or joint venture.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

When changes in the net assets of an associate or a joint venture occur and not those that are recognized in profit or loss or other comprehensive income and do not affect the Company’s percentage of ownership interests in the associate or joint venture, the Company recognizes such changes in equity based on its percentage of ownership interests. The resulting capital surplus recognized will be reclassified to profit or loss at the time of disposing the associate or joint venture on a pro rata basis.

When the associate or joint venture issues new shares, and the Company’s interest in an associate or a joint venture is reduced or increased as the Company fails to acquire shares newly issued in the associate or joint venture proportionately to its original ownership interest, the increase or decrease in the interest in the associate or joint venture is recognized in capital surplus and investments accounted for using the equity method. When the interest in the associate or joint venture is reduced, the cumulative amounts previously recognized in other comprehensive income are reclassified to profit or loss or other appropriate items. The aforementioned capital surplus recognized is reclassified to profit or loss on a pro rata basis when the Company disposes of the associate or joint venture.

The financial statements of the associate or joint venture are prepared for the same reporting period as the Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Company.

The Company determines at each reporting date whether there is any objective evidence that the investment in the associate or an investment in a joint venture is impaired in accordance with IAS 28 “Investments in Associates and Joint Ventures”. If this is the case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value and recognizes the amount in the ‘share of profit or loss of an associate’ in the statement of comprehensive income in accordance with IAS 36 “Impairment of Assets”. In determining the value in use of the investment, the Company estimates:

A. its share of the present value of the estimated future cash flows expected to be generated by the associate or joint venture, including the cash flows from the operations of the associate and the proceeds on the ultimate disposal of the investment; or
B. the present value of the estimated future cash flows expected to arise from dividends to be received from the investment and from its ultimate disposal.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Because goodwill that forms part of the carrying amount of an investment in an associate or an investment in a joint venture is not separately recognized, it is not tested for impairment separately by applying the requirements for goodwill impairment testing in IAS 36 “Impairment of Assets”.

Upon loss of significant influence over the associate or joint venture, the Company measures and recognizes any retaining investment at its fair value. Any difference between the carrying amount of the associate or joint venture upon loss of significant influence and the fair value of the retaining investment and proceeds from disposal is recognized in profit or loss. Furthermore, if an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the entity continues to apply the equity method and does not remeasure the retained interest.

(14) Property, plant and equipment

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. 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 is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Company recognizes such parts as individual assets with specific useful lives and depreciation. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 “Property, Plant and Equipment”. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Buildings and facilities	20`〜`35years
Plant equipment	5`〜`20ears
Machinery and equipment	2`〜`8 years
Transportation equipment	3`〜`6 years
Office equipment	3`〜`5 years
Other equipment	3`〜`11 years
Leasehold improvements	10 years

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is recognized in profit or loss.

The residual values, useful lives and methods of depreciation of property, plants, and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

(15) Leases

The Company assesses whether the contract is, or contains, a lease, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Company assesses whether the contract, throughout the period of use, has both of the following:

(a) the right to obtain substantially all of the economic benefits from use of the identified asset; and
(b) the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Company allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate standalone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Company for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Company estimates the stand-alone price, maximizing the use of observable information.

A. The Company as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Company recognizes right-of-use asset and lease liability for all leases which the Company is the lessee of those lease contracts.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

At the commencement date, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

(a) fixed payments (including in-substance fixed payments), less any lease incentives receivable;
(b) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
(c) amounts expected to be payable by the lessee under residual value guarantees;
(d) the exercise price of a purchase option if the Company is reasonably certain to exercise that option; and
(e) payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Company measures the lease liability on an amortized cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Company measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

(a) the amount of the initial measurement of the lease liability;
(b) any lease payments made at or before the commencement date, less any lease incentives received;
(c) any initial direct costs incurred by the lessee; and
(d) an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Company measures the right-ofuse asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Company measures the right-of-use asset applying a cost model.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

If the lease transfers ownership of the underlying asset to the Company by the end of the lease term or if the cost of the right-of-use asset reflects that the Company will exercise a purchase option, the Company depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Company depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Company applies IAS 36 “Impairment of Assets” to determine whether the right-ofuse asset is impaired and to account for any impairment loss identified.

Except for those leases that the Company accounted for as short-term leases or leases of low-value assets, the Company presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statement of consolidated comprehensive income statement.

For short-term leases or leases of low-value assets, the Company elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

B. The Company as a lessor

At inception of a contract, the Company classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Company recognizes assets held under a finance lease in its balance sheet and presents them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Company allocates the consideration in the contract applying IFRS 15.

The Company recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(16) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is reflected in profit or loss for the year in which the expenditure is incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life is reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

A. Research and development costs

Research costs are expensed as incurred. Development expenditures, on an individual project, are recognized as an intangible asset when the Company can demonstrate:

a. the technical feasibility of completing the intangible asset so that it will be available for use or sale;
b. its intention to complete and its ability to use or sell the asset;
c. how the asset will generate future economic benefits;
d. the availability of resources to complete the asset; and
e. the ability to measure reliably the expenditure during development.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Following initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. During the period of development, the asset is tested for impairment annually. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized over the period of expected future benefit.

B. Computer software

The cost of computer software is amortized on a straight-line basis over the estimated useful life (3~5 years).

- (17) Impairment of non financial assets

The Company assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 “Impairment of Assets” may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Company estimates the asset’s or cashgenerating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(18) Treasury shares

Acquisitions of the shares of the Company (treasury shares) are recognized at cost and deducted from equity. Any difference between the carrying amount and the consideration, if reissues, is recognized in capital surplus under equity.

When the retirement of treasury shares, capital surplus – share premiums and share capital are debited proportionately, gains on retirement of treasury shares should be recognized under existing capital surplus arising from similar types of treasury shares; losses on retirement of treasury shares should be offset against existing capital surplus form similar types of treasury shares. If there are insufficient capital reserves to be offset against, then such losses should be accounted for under retained earnings.

(19) Revenue recognition

The Company’s revenue arising from contracts with customers are mainly rendering of processing services and rental of testing machinery. The accounting policies are explained as follows:

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A. Rendering of services

The Company’s primary activity is to conduct testing and assembly services based on customer’s specification demand. According to the customer contract, the ownership of the work in process belongs to the customer. The customer controls the work in process when the Company provides services to create or enhance it. Accordingly, the Company’s performance obligation is satisfied over time and the Company, based on the consideration stated in the customer contract (less estimated volume discount), recognizes service revenue over time. The Company estimates the volume discounts using the expected value method based on historical experiences. However, revenue is only recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. During the period specified in the contract, refund liability is recognized for the expected volume discounts.

The credit period of the Company’s service revenue is from 30 to 120 days. For most of the contracts, when the Company transfers those processed assets to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Company usually collects the payments shortly after transferring those processed assets to customers; therefore, there is no significant financing component to the contract. For some of the contracts, the Company transfers those processed assets to customers but does not have a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Company measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses.

B. Revenue from rental of machinery

The Company provides rental of testing machineries based on customers’ demand. According to the contract, the Company provides tailored machineries to customers for testing purposes for a certain period of time. During the contract period, those machineries are for the contracted customers’ use only, and will not be mixed with other testing machineries. Meanwhile, during the contract period, those machineries are still under control of the Company, the customer does not have the right to control over or to direct the right of use of the rented machineries. Usually, the unit rental price is fixed and is stated in the contract. Accordingly, the Company’s performance obligation is satisfied over time and the Company recognizes revenue from rental of the machinery by rental hours or testing volume multiplied by the fixed unit price, or over the rental period on a straight line basis.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The credit period of the Company’s service revenue is from 30 to 120 days. For most of the contracts, the Company recognizes trade receivables upon the completion of rental period. These trade receivables usually have short period and no significant financial component is arisen.

For some machinery rental contracts, prepayments are received from customers upon signing the contract, the Company then has the obligation to provide the services subsequently. Accordingly, these amounts are recognized as contract liabilities.

C. Sales of machinery

The Company manufactures and sells professional testing machinery. Those machineries must be tested for specifications according to the contract signed by both parties before being delivered to customers. The Company performs the specification test in accordance with the contract and issues a machinery inspection report to the customer. After the customer’s confirmation that the operating data and function of the machineries have met the specification stated in the inspection report, the machinery can be delivered to the customer’s designated location stated in the contract and the control of the machinery can be transferred. At this time, the customer has the right to determine the sales channels and price of those testing machineries, and has the ability to prevent other companies from directing the use and obtaining the benefits of these products; therefore, the Company recognizes the revenue generated from the sales of machineries.

Considering the fact that assisting customers for the machinery installation and providing safety guidance are not significant, the Company issues an invoice with total consideration to the customer and recognizes the amount as trade receivables upon the delivery of the machinery. In addition, the period between the sales of machinery and the actual receipt of the payment is within one year, therefore, there is no significant financing component. The Company provides its customer with a warranty for refund for defectives products. Such warranty is accounted for in accordance with IAS 37 as liability provision.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(20) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period when they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(21) Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

(22) Post-employment benefits

All regular employees of KYEC are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee’s name in the specific bank account and hence not associated with KYEC. Therefore, fund assets are not included in the Company’s consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Remeasurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

A. the date of the plan amendment or curtailment, and

B. the date that the Company recognizes restructuring-related costs or termination benefits.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(23) Share-based payment transactions

The cost of equity-settled transactions between the Company and its employees is recognized based on the fair value of the equity instruments granted. The fair value of the equity instruments is determined by using an appropriate pricing model.

The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

The cost of restricted stocks issued is recognized as salary expense based on the fair value of the equity instruments on the grant date, together with a corresponding increase in other capital reserves in equity, over the vesting period. The Company recognizes unearned employee salary which is a transitional contra equity account; the balance in the account will be recognized as salary expense over the passage of vesting period.

(24) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

A. Current income tax

Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The income tax for unappropriated earnings is recognized as income tax expense in the subsequent year when distribution proposal is approved by the shareholders’ meeting.

B. Deferred tax

Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

a. where the deferred tax liability arises from the initial recognition of goodwill of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.
b. in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carry forward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, the carry forward of unused tax credits and unused tax losses can be utilized, except:

a. where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary difference.
b. in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current income tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

According to the temporary exception in the International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12), information about deferred tax assets and liabilities related to Pillar Two income tax will neither be recognized nor be disclosed.

5. Significant Accounting Judgments, Estimates and Assumptions

The preparation of the Company’s consolidated financial statements require management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities, at the end of the reporting period. However, uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A. Fair value of Level 3 financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flows model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

B. Revenue recognition - sales returns and discounts

The Company estimates sales returns and allowance based on historical experience and other known factors at the time of sale, which reduces the operating revenue. In assessing the aforementioned sales returns and allowance, on the basis of highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Please refer to Note 6. (11) for more details.

6. Contents of Significant Accounts

(1) Cash and cash equivalents

Cash on hand Checking and savings accounts Time deposits Total	December 31, 2024	December 31, 2023
	$1 8,729,330 1,600,000	$1,003 8,588,392 3,673,159
	$10,329,331	$12,262,554

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

Equity instrument investments measured at fair value through other comprehensive income- non-current Listed company’s stocks Unlisted company’s stocks Total	December 31, 2024	December 31, 2023
	$39,369 6,329,968	$50,680 6,491,001
	$6,369,337	$6,541,681

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has equity instrument investments measured at fair value through other comprehensive income, for which dividend income recognized are as follows:

Dividend income related to investments held on the balance sheet date	For the years ended December 31	For the years ended December 31
	2024	2023
	$98,364	$99,233

Due to the shares swap conducted by the investee company, the Company transferred the cumulative gain of NT$16,180 thousand from other equity to retained earnings in 2023. No such transaction occurred in 2024.

Financial assets at fair value through other comprehensive income were not pledged.

(3) Trade receivables and trade receivables from related parties

Trade receivables Less: loss allowance Subtotal Trade receivables from related parties Less: loss allowance Subtotal Total	December 31, 2024	December 31, 2023
	$4,063,820 (13,107)	$5,511,430 (13,405)
	4,050,713	5,498,025
	1,980,803 -	1,972,960 -
	1,980,803	1,972,960
	$6,031,516	$7,470,985

No trade receivables were pledged.

The receivables are generally on 30 to 120 days terms. Please refer to Note 6. (17) for more details on loss allowance of trade receivables for the years ended December 31, 2024 and 2023. Please refer to Note 12 for more details on credit risk.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(4) Inventories

Raw materials Work in progress Finished goods Total	December 31, 2024	December 31, 2023
	$559,046 289,069 -	$790,114 255,218 27,419
	$848,115	$1,072,751

The cost of inventories recognized in operating costs for the year ended December 31, 2024 amounted to NT$17,512,212 thousand, including the write-down of inventories of NT$30,642 thousand, and scrap loss of NT$5,538 thousand, respectively.

The cost of inventories recognized in operating costs for the year ended December 31, 2023 amounted to NT$16,064,707 thousand, including the write-down of inventories of NT$3,432 thousand, and scrap loss of NT$7,470 thousand, respectively.

No inventories were pledged.

(5) Prepayments

Prepaid equipment Prepaid expenses Input tax Total	December 31, 2024	December 31, 2023
	$46,388 58,470 114,540	$121,040 342,275 38,731
	$219,398	$502,046

(6) Disposal group held for sale

A. Discontinued operations

On April 26, 2024, the Board of Directors of the Company resolved to sell its entire 92.16% ownership interest in King Long Technology (Suzhou) Ltd., with the price of RMB$9.67 per registered capital unit, which was previously owned by KYEC Microelectronics Co., Ltd., to Suzhou Industrial Park Industrial Investment Fund (L.P.) and other companies, and the total transaction amount is RMB$ 4,884,582 thousand.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The above transactions met the criteria of IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”. Therefore, the assets and liabilities of King Long Technology (Suzhou) Ltd., was reclassified as a disposal group held for sale, which was presented as income (loss) from discontinued operations. To present the discontinued operations of consolidated income statement for the year ended December 31, 2024, the Company retroactively reclassified the income (loss) of discontinued operations for the year ended December 31, 2023, in order to make the comparative period information of consolidated income statement more relevant.

The details of profit (loss) from discontinued operations and the related cash flow information are as follows:

Net sales Operating costs Gross profit Selling expenses Administrative expenses Research and development expenses Expected credit losses Operating income Interest income Other income Other gains and losses Finance costs Net income before income tax Income tax expense Total profit from discontinued operations	For the years ended December 31	For the years ended December 31
	2024	2023
	$9,936,530 (4,761,691)	$9,033,727 (5,818,808)
	5,174,839 (38,919) (521,666) (468,271) (173)	3,214,919 (35,071) (588,078) (479,182) (814)
	4,145,810 66,913 278,335 5,169 (123,087)	2,111,774 69,049 224,430 11,737 (173,595)
	4,373,140 (1,038,655)	2,243,395 (512,478)
	$3,334,485	$1,730,917

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the years ended December 31 2024 2023 Net cash provided by operating activities $5,418,493 $4,232,923 Net cash used in investing activities (4,397,937) (3,033,145) Net cash used in financing activities (1,032,551) (188,207) Effect of changes in exchange rate on cash and cash equivalents 5,587 (373,052) Net cash (outflow) inflow $(6,408) $638,519 A. Disposal group held for sale December 31, 2024 Assets of disposal group held for sale $25,387,003 Liabilities directly associated with disposal group held for sale $7,250,906 On April 26, 2024, the Board of Directors resolved to sell its entire 92.16% ownership in King Long Technology (Suzhou) Ltd., the details of related assets and liabilities held for sale were as follows:	For the years ended December 31	For the years ended December 31
	2024	2023
	$5,418,493 (4,397,937) (1,032,551) 5,587	$4,232,923 (3,033,145) (188,207) (373,052)
	$(6,408)	$638,519
		December 31, 2024
		$25,387,003
		$7,250,906

Assets of disposal group held for sale Cash and cash equivalents Contract assets Accounts receivable, net Accounts receivable from related parties, net Other receivables Inventories, net Prepayments Other financial assets-current Property, plant and equipment Right-of-use assets Intangible assets Other non-current assets Consolidation write-off Total	December 31, 2024
	$3,273,290 1,806 2,588,249 80,601 35,253 170,033 669,633 4 18,490,121 173,206 1,209 3,591 (99,993)
	$25,387,003

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Liabilities directly associated with disposal group held for sale Contract liabilities Accounts payable Accounts payable to related parties Other payables Other payables to related parties Payables on equipment Current tax liabilities Current portion of long-term loans Other current liabilities Long-term loans Deferred tax liabilities Long-term deferred income Consolidation write-off Total Equity directly associated with disposal group held for sale Exchange differences resulting from translating the financial statements of foreign operations	December 31, 2024
	$8,032 1,080,895 201,863 540,063 75,031 270,549 102,554 1,106,114 2,395 3,989,575 94,967 58,157 (276,894)
	$7,253,301
	December 31, 2024
	$(396,838)

As the sales proceeds of the disposal are expected to exceed the carrying amount of the related net assets, no impairment losses were recognized on the classification of these operations as disposal groups held for sale.

For the amounts of the Company’s disposal group held for sale as loan guarantees, refer to Note 8.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(7) Investments accounted for using the equity method

	December 31,2024	December 31,2024	December 31,2023	December 31,2023
	Carrying amount	Percentage of ownership	Carrying amount	Percentage of ownership
Fixwell Technology Corp. Wei Jiu Industrial Co., Ltd. Total	$65,389 34,338	23.33% 34.00%	$62,966 31,016	23.33% 34.00%
	$99,727		$93,982

The Company’s investments in Fixwell Technology Corp. and Wei Jiu Industrial Co., Ltd. are not individually material. The summarized financial information of the Company’s ownership in those associates is as follows:

Net income Other comprehensive income, net of tax Total comprehensive income	For the years ended December 31	For the years ended December 31
	2024	2023
	$19,445 -	$17,754 -
	$19,445	$17,754

The investments mentioned above were not pledged.

(8) Property, plant and equipment

Owner occupied property, plant and equipment Property, plant and equipment leased out under operating leases Total	December 31, 2024	December 31, 2023
	$34,815,074 108,697	$43,993,362 147,104
	$34,923,771	$44,140,466

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A. Owner occupied property, plant and equipment

Land	Buildings and facilities	Plant equipment	Machinery and equipment	Office equipment	Transportation equipment	Other equipment	Leasehold improvements	Construction in progress and equipment awaiting examination	Total
$1,660,897 344,622 - - - -	$7,183,637 89,649 - (21,363) (2,107,816) 99,482	$12,456,030 934,949 (100,207) 1,304,507 (1,513,622) 74,826	$105,279,197 9,471,707 (4,752,703) 2,147,433 (24,117,320) 1,009,972	$894,583 119,636 (139,693) 13,720 (89,011) 4,674	$72,313 4,261 (5,103) - (5,424) 341	$6,668,983 912,998 (126,838) 112,626 (1,847,260) 87,803	$4,425 - - - - -	$2,551,915 4,246,818 (35,101) (3,551,006) (1,549,278) 49,396	$136,771,980 16,124,640 (5,159,645) 5,917 (31,229,731) 1,326,494
$2,005,519	$5,243,589	$13,156,483	$89,038,286	$803,909	$66,388	$5,808,312	$4,425	$1,712,744	$117,839,655
$1,660,897 - - - -	$6,824,639 56,167 - 330,386 (27,555)	$11,550,036 1,093,572 (181,066) 12,559 (19,071)	$103,512,371 3,668,723 (3,213,834) 1,608,189 (296,252)	$868,725 49,201 (21,937) - (1,406)	$62,848 13,026 (3,460) - (101)	$6,557,454 284,311 (202,021) 56,250 (27,011)	$4,425 - - - -	$2,111,019 2,246,077 (69,194) (1,725,647) (10,340)	$133,152,414 7,411,077 (3,691,512) 281,737 (381,736)
$1,660,897	$7,183,637	$12,456,030	$105,279,197	$894,583	$72,313	$6,668,983	$4,425	$2,551,915	$136,771,980

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Land	Buildings and facilities	Plant equipment	Machinery and equipment	Office equipment	Transportation equipment	Other equipment	Leasehold improvements	Construction in progress and equipment awaiting examination	Total
$- - - - - - -	$2,584,945 199,109 - (16,313) - (796,015) 38,325	$8,006,285 656,580 (100,207) - - (672,680) 34,904	$76,559,881 5,936,720 (4,524,070) 20,014 123,029 (10,155,194) 487,206	$683,914 60,350 (139,693) 154 - (50,215) 2,769	$49,405 5,916 (5,103) - - (2,928) 212	$4,890,353 375,476 (126,838) - - (1,164,575) 58,588	$3,835 442 - - - - -	$- - - - - - -	$92,778,618 7,234,593 (4,895,911) 3,855 123,029 (12,841,607) 622,004
$-	$2,010,051	$7,924,882	$68,447,586	$557,279	$47,502	$4,033,004	$4,277	$-	$83,024,581
$- - - - -	$2,321,065 245,847 - 30,599 (12,566)	$7,528,440 670,446 (181,066) - (11,535)	$72,170,508 7,582,188 (3,020,442) (16,481) (155,892)	$642,333 64,320 (21,937) - (802)	$48,226 4,721 (3,460) - (82)	$4,651,300 459,912 (202,017) - (18,842)	$3,393 442 - - -	$- - - - -	$87,365,265 9,027,876 (3,428,922) 14,118 (199,719)
$-	$2,584,945	$8,006,285	$76,559,881	$683,914	$49,405	$4,890,353	$3,835	$-	$92,778,618
$2,005,519	$3,233,538	$5,231,601	$20,590,700	$246,630	$18,886	$1,775,308	$148	$1,712,744	$34,815,074
$1,660,897	$4,598,692	$4,449,745	$28,719,316	$210,669	$22,908	$1,778,630	$590	$2,551,915	$43,993,362

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

B. Property, plant and equipment leased out under operating leases

Buildings and facilities	Machinery and equipment	Total
$276,979 - - 21,363 (9,314) 460	$ 329,681 1,740 - (28,205) - -	$ 606,660 1,740 - (6,842) (9,314) 460
$289,488	$303,216	$592,704
$319,134 - - (42,003) (152)	$318,221 798 - 10,662 -	$637,355 798 - (31,341) (152)
$276,979	$329,681	$606,660
$ 201,112 9,300 - 16,313 (7,310) 360	$ 258,444 25,802 - (20,014) - -	$ 459,556 35,102 - (3,701) (7,310) 360
$219,775	$264,232	$484,007
$222,773 9,053 - (30,599) (115)	$210,286 31,677 - 16,481 -	$433,059 40,730 - (14,118) (115)
$201,112	$258,444	$459,556
$69,713	$38,984	$108,697
$75,867	$71,237	$147,104

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

C. Capitalized borrowing costs of property, plant and equipment are as follows:

Construction in progress Capitalization rate of borrowing costs	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$169,883 2.89~ 3.67%	$92,843 2.86~ 4.42%

D. The investing activities partially influenced the cash flow are as follows:

Acquisition of property, plant and equipment Net (increase) decrease in payables to equipment suppliers Net (increase) decrease in other payables - related parties Total Disposal of property, plant and equipment Net decrease in other receivables Net decrease in other receivables - related parties Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$16,126,380 (1,267,669) (1,766)	$7,411,875 301,422 13,010
	$14,856,945	$7,726,307
	2024	2023
	$420,431 - -	$341,104 1,842 2,332
	$420,431	$345,278

E. As of December 31, 2024, the Company recognized an impairment loss of NT$123,029 thousand, for certain machinery and equipment which were either damaged or idle and could no longer be used. No such transaction occurred in 2023.

F. Please refer to Note 8 for property, plant and equipment under pledges.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(9) Intangible assets

Cost: As of January 1, 2024 Additions from acquisitions Disposals Transfers Reclassification to groups held for sale Exchange differences As ofDecember31, 2024 As of January 1, 2023 Additions from acquisitions Disposals Exchange differences As ofDecember 31,2023 Amortization and impairment: As of January 1, 2024 Amortization Disposals Reclassification to groups held for sale Exchange differences As ofDecember 31,2024 As of January 1, 2023 Amortization Disposals Exchange differences As ofDecember 31,2023 Net carrying amount as of: December 31, 2024 December 31, 2023	Software
	$198,667 4,540 (24,755) 1,792 (61,056) 3,011
	$122,199
	$256,614 3,184 (60,135) (996)
	$198,667
	$185,496 10,859 (24,755) (59,847) 2,943
	$114,696
	$217,379 29,223 (60,135) (971)
	$185,496
	$7,503
	$13,171

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Amortization expenses of intangible assets recognized are as follows:

Continuing operations: Operating costs Selling and administrative expenses Research and development expenses Subtotal Discontinued operations: Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$6,765 3,796 -	$12,298 12,211 2,775
	10,561 298	27,284 1,939
	$10,859	$29,223

(10) Short-term loan

Unsecured bank loans	Interest Rates (%)	December 31, 2024	December 31, 2023
	-	$-	$220,133

The Company’s unused short-term lines of credits amounted to NT$5,936,694 thousand and NT$9,847,801 thousand as of December 31, 2024 and 2023, respectively.

(11) Other current liabilities

Refund liabilities Receipts on behalf of others Others Total	December 31, 2024	December 31, 2023
	$278,768 1,131,287 2,503	$546,968 544,180 5,684
	$1,412,558	$1,096,832

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

- (12) Long term borrowings

As of December 31, 2024

Lenders	Nature	Maturity Date	Balance	Terms of repayment
Shanghai Commercial Bank Bank of China Cathay United Bank HSBC Taiwan Bank Mizuno Bank Land Bank of Taiwan CTBC Bank Taipei Fubon Commercial Bank Bank of Communications Mega Bank Mega Bank Far Eastern Bank Yuanta Commercial Bank Yuanta Commercial Bank	Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans	2027.03.10 2026.10.07 2027.09.24 2027.09.30 2026.01.01 2026.01.25 2026.08.31 2027.10.25 2026.05.08 2026.12.28 2028.03.15 2027.06.20 2027.08.21 2027.10.11	$1,049,120 885,195 991,775 917,980 900,000 98,355 1,900,000 1,000,000 300,000 163,925 1,400,000 1,200,000 1,000,000 980,553	Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit Repay at maturity Repay at maturity Revolving Credit 50% of principal will be repaid on April 11, 2027. The remaining principal will be repaid on maturity day.

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Lenders	Maturity Date	Balance	Terms of repayment
Yuanta Commercial Bank Unsecured bank loans First Bank Unsecured bank loans Taipei Fubon Commercial Bank Unsecured bank loans Cathay United Bank Unsecured bank loans Bank of Taiwan and 15 others (Note) Mortgage bank loans Bank of Taiwan and 15 others (Note) Commercial paper loans Bank of Taiwan and 14 others (Note) Mortgage bank loans Subtotal Less: current portion Less: arrangement fee Less: unamortized discount Total Interest Rates	2028.08.30 2029.08.09 2029.10.31 2027.09.24 2028.04.06 2028.04.06 2029.05.06	807,147 1,000,000 400,000 351,065 200,000 5,000,000 50,000	50% of principal will be repaid on February 29, 2028. The remaining principal will be repaid on maturity day. Repayable in 5 semi-annual instalments from February 9, 2027 after the grace period of 2.5 years. Repayable in 25 monthly instalments from November 1, 2027. 50% of principal will be repaid on March 24, 2027. The remaining principal will be repaid on maturity day. 25% of principal will be repaid on October 6, 2026. The remaining principal will be repaid on maturity day. Revolving credit. Renewable every three months. Credit has not been fully utilized. 25% of principal will be repaid on November 6, 2027. The remaining principal will be repaid on maturity day.
		20,595,115 - (9,600) (4,802)
		$20,580,713
		1.50%~5.61%

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023

Lenders	Nature	Maturity Date	Balance	Terms of repayment
Shanghai Commercial Bank Bank of China Cathay United Bank HSBC Taiwan Bank Mega Bank Mega Bank Mega Bank Far Eastern Bank First Bank Yuanta Commercial Bank	Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans Unsecured bank loans	2025.03.10 2025.10.14 2025.12.25 2026.09.30 2025.04.28 2028.03.15 2028.03.15 2025.06.23 2026.07.01 2027.10.11	$982,560 368,460 460,575 276,345 798,330 45,680 1,400,000 300,000 460,575 553,621	Revolving Credit Revolving Credit Revolving Credit Revolving Credit Revolving Credit 50% of principal will be repaid on September 15, 2025. The remaining principal will be repaid on maturity day. Repay at maturity Repay at maturity 75% of principal will be repaid in 3 annual payments starting from January 1, 2024. The remaining principal will be repaid on maturity day. 50% of principal will be repaid on April 11, 2027. The remaining principal will be repaid on maturity day.

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Lenders	Nature	Maturity Date	Balance	Terms of repayment
Taipei Fubon Commercial Bank Bank of Taiwan Mega Bank and 13 others (Note) Mega Bank and 13 others (Note) Bank of Taiwan and 15 others (Note) Bank of Taiwan and 15 others (Note) Bank of China (King Long) China Construction Bank (King Long) China Construction Bank (King Long)	Unsecured bank loans Unsecured bank loans Mortgage bank loans Commercial paper loans Mortgage bank loans Commercial paper loans Unsecured bank loans Unsecured bank loans Unsecured bank loans	2026.05.12 2026.10.20 2025.10.12 2025.10.11 2028.04.06 2028.04.06 2029.05.30 2027.07.28 2027.09.28	50,000 300,000 5,340,000 3,180,000 200,000 3,000,000 2,047,429 994,246 644,371	50% of principal will be repaid on November 12, 2025. The remaining principal will be repaid on maturity day. 50% of principal will be repaid on April 20, 2025. The remaining principal will be repaid on maturity day. 25% of principal will be repaid on April 12, 2024. The remaining principal will be repaid on maturity day. Revolving credit. Renewable every three months. Credit has not been fully utilized. 25% of principal will be repaid on October 6, 2026. The remaining principal will be repaid on maturity day. Revolving credit. Renewable every three months. Credit has not been fully utilized. Repayable in 10 semi-annual instalments from November 29, 2024. Repayable in 10 semi-annual instalments from December 10, 2022. Repayable in 10 semi-annual instalments from April 10, 2023.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Lenders	Maturity Date	Balance	Terms of repayment
Agricultural Bank of China (King Long) Unsecured bank loans Bank of China (Zhengkuan) Unsecured bank loans Subtotal Less: current portion Less: unamortized discount Total Interest Rates	2028.04.16 2030.07.08	1,700,741 84,683	Repayable in 6 semi-annual instalments from October 16, 2025. Repayable in 12 semi-annual instalments from January 31, 2025.
		23,187,616 (574,528) (11,992)
		$22,601,096
		1.89%~6.58%

Note:

A. Certain property, plant and equipment were pledged. Please refer to Note 8 for more details.

B. Please refer to Note 9 for the financial covenants during the loan period.

(13) Post-employment benefits

Defined contribution plan

The Company adopted a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. The Company has made monthly contribution of 6% of each individual employee’s salaries or wages to employee’s pension accounts.

Subsidiaries located in the People’s Republic of China will contribute social welfare benefits based on a certain percentage of employee’s salaries or wages to the employee’s individual pension accounts.

Pension benefits for employees of overseas subsidiaries and branches are contributed in accordance with the local regulations.

Pension expenses under the defined contribution plan for the years ended December 31, 2024 and 2023 were NT$198,279 thousand and NT$190,683 thousand, respectively.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Defined benefit plan

The Company adopts a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company contributes an amount equivalent to 2% of the employees’ total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company assesses the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the following year, the Company will make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under mandation, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statements shall not be less than the earnings attainable from the amounts accrued from twoyear time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. As of the December 31, 2024, the Company expects to contribute NT$17,924 thousand to its defined benefit plan during 2025.

The maturities of the defined benefits plan as of December 31, 2024 and 2023 are in 2046 and 2042, respectively.

Pension costs recognized in profit or loss for the years ended December 31, 2024 and 2023 are as follows:

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English Translation of Financial Statements Originally Issued in Chinese

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Current period service costs Interest income or expense Overestimate(underestimate) Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$19,052 8,579 (9)	$15,690 9,276 -
	$27,622	$24,966

Changes in the defined benefit obligation and fair value of plan assets are as follows:

Defined benefit obligation Plan assets at fair value Overestimate(underestimate) Other non-current liabilities - accrued pension liabilities recognized on the consolidated balance sheets	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$982,381 (355,433) -	$960,613 (315,547) 10
	$626,948	$645,076

Reconciliation of liability (asset) of the defined benefit plan is as follows:

Defined benefit obligation	Fair value of plan assets	Benefit liability (asset)
$969,496 15,690 13,670	$(311,652) - (4,394)	$657,844 15,690 9,276
998,856 (10,981) 12,278 (21,143) -	(316,046) - - - (892)	682,810 (10,981) 12,278 (21,143) (892)
(19,846)	(892)	(20,738)

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English Translation of Financial Statements Originally Issued in Chinese

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Defined benefit obligation	Fair value of plan assets	Benefit liability (asset)
(18,397) -	18,397 (17,006)	- (17,006)
$960,613 19,052 12,776	$(315,547) - (4,197)	$645,066 19,052 8,579
992,441 401 (55,062) 64,706 -	(319,744) - - - (27,217)	672,697 401 (55,062) 64,706 (27,217)
10,045	(27,217)	(17,172)
(20,105) -	20,105 (28,577)	- (28,577)
$982,381	$(355,433)	$626,948

The following significant actuarial assumptions are used to determine the present value of the defined benefit obligation:

Discount rate Expected rate of salary increases	December 31, 2024	December 31, 2023
	1.67% 3.00%	1.33% 3.00%

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A sensitivity analysis for significant assumption as of December 31, 2024 and 2023 is as follows:

Effect on the defined benefit obligation	Effect on the defined benefit obligation	Effect on the defined benefit obligation	Effect on the defined benefit obligation
2024		2023
Increase in defined benefit obligation	Decrease in defined benefit obligation	Increase in defined benefit obligation	Decrease in defined benefit obligation
$- 82,402 80,870 -	$(74,448) - - (73,875)	$- 80,746 78,968 -	$(73,090) - - (72,295)

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analysis compared to the previous period.

(14) Equity

A. Share capital

As of December 31, 2024 and 2023, KYEC’s authorized share capital was both NT$15,000,000 thousand; issued share capital was both NT$12,227,451 thousand (1,222,745 thousand shares), with par value of NT$10 per share. Each share has one voting right and a right to receive dividends.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

B. Capital surplus

Additional paid-in capital Arising from conversion of bonds Treasury share transactions Arising from the exercise of employee restricted shares Changes in ownership interests in subsidiaries Total	December 31, 2024	December 31, 2023
	$557,934 3,588,848 390,101 30,755 510,126	$502,148 3,588,848 390,101 30,755 443,729
	$5,077,764	$4,955,581

According to the Company Act, the capital surplus shall not be used except for offset the deficit of the company. When a company incurs no loss, it may distribute the capital surplus generated from the excess of the issuance price over the par value of share capital and donations. The distribution could be made in cash to its shareholders in proportion to the number of shares being held by each of them.

C. Retained earnings and dividend policy

According to KYEC’s Articles of Incorporation, net profits for each fiscal year, if any, shall be distributed in following order:

a. reserve for tax payments;
b. offset prior year’s losses;
c. set aside 10% of the remaining amount after deducting items (a) and (b) as legal reserve;
d. set aside or reverse special reserve in accordance with law and regulations; and
e. the distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning, etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders’ meeting. As the Company currently is still in the growth stage, funding may be required in the near future for expansion. Therefore, the current policy is to distribute cash dividends at no less than 20% of total dividends to be distributed.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total authorized capital. The legal reserve can be used to offset the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal reserve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

Pursuant to existing regulations, the Company is required to set aside additional special reserve equivalent to the net debit balance of the other components of shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

Following the adoption of IFRSs, the FSC on April 6, 2012 issued Order No. FinancialSupervisory-Securities-Corporate-1010012865, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded in shareholders’ equity that the Company elects to transfer to retained earnings by application of the exemption under IFRS 1, the Company shall set aside an equal amount of special reserve. Following a company’s adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an amount equal to “other net deductions from shareholders’ equity” for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

As of December 31, 2024 and 2023, special reserve set aside for the first-time adoption of TIFRS amounted to NT$201,416 thousand.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The appropriations for earnings for 2023 were resolved by the shareholders’ meeting on May 31, 2024, while the proposed appropriation of earnings for 2024 were approved by Board of Directors on February 21, 2025. The appropriations and dividends per share were as follows:

Legal reserve Cash dividends-common stock	Appropriation of earnings	Appropriation of earnings	Dividendper share(NT$)	Dividendper share(NT$)
	2024	2023	2024	2023
	$779,600 4,890,980	$586,111 3,912,784	$4.00	$3.20

Please refer to Note 6. (19) for information regarding the employees’ compensations (bonuses) and remunerations to directors.

D. Non-controlling interests

Beginning balance Net gain attributable to non-controlling interests Other comprehensive income, attributable to non- controlling interests, net of tax: Exchange differences resulting from translating the financial statements of foreign operations Changes in ownership interests in subsidiaries Ending balance	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$1,123,541 315,858 58,034 (82,223)	$855,439 176,005 (17,427) 109,524
	$1,415,210	$1,123,541

(15) Share-based payment plans

Certain employees of the Company are entitled to share-based payment awards as part of their remuneration. Services are provided by the employees in return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restricted stocks plan for employees of subsidiaries

A. On September 28, 2022, the Board of Directors of King Long Technology (Suzhou) Ltd., (“King Long”) resolved to issue restricted stocks of 5,461,000 units to qualified employees with exercise price of RMB$1 per unit. Restrictions and vesting conditions of restricted stocks for employees are as follows:
(a)To issue registered capital of King Long with each unit.
(b)After the grant date, employee’s shall remain employed by the Company for at least 5 years and achieve the specified personal performance goals during the vesting period. Restricted stocks will vest by 40%, 70%, 90%, 97%, and 100% on the first, second, third, forth and fifth anniversary after the grant date, respectively. In addition to the shares vested as mentioned above, the unvested portions will be purchased back by King Long when employees have not remained employed by the Company for at least 5 years.
(c)During the vesting period, employees may not sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise dispose of, restricted employee stocks, excluding inheritance.
(d)The voting rights of restricted stocks shall be exercised by a trust or a centralized custodian institution in accordance with the contract.
(e)The fair value information of restricted stocks for employees is as follows:

Grant date	Cut-off date of lock-up period	Total units of restricted stocks issued	Total unit outstanding	Fair value per unit
2022.10.08	2027.10.07	5,461,000	3,826,000(Note)	CNY$10.54

As of December 31, 2023, total outstanding units were 5,461,000 shares, and the cancellation of 1,635,000 shares retrieved back from those employees who resigned was completed in January 2024. Accordingly, total outstanding units as of December 31, 2024 were 3,826,000 shares.

The compensation cost was recognized under the fair value method and the BlackScholes Option Pricing model was used to estimate the fair value of options granted. The estimated compensation expenses amounted to NT$160,921 thousand in total based on the vesting conditions and will be recognized during the vesting period.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Assumptions used in calculating the fair value are disclosed as follows:

Expected volatility (%) Risk free interest rate (%) Expected life (Years)	Restricted stocks for employees
	30.67% 1.78% 5 years

The expected life of the restricted stocks is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the restricted is indicative of future trends, which may also not necessarily be the actual outcome.

B. On May 17, 2021, the Board of Directors of King Long Technology (Suzhou) Ltd., (“King Long”) resolved to issue restricted stocks of 12,502,187 units and 22,282,749 units to qualified employees with exercise price of RMB$4.18 and RMB$7.42 per unit, respectively. Restrictions and vesting conditions of restricted stocks for employees are as follows:
(a)To issue registered capital of King Long with each unit.
(b)During the vesting period, employees may not sell, pledge, transfer, give to another person, create any encumbrance on, or otherwise dispose of, restricted employee stocks, excluding inheritance.
(c)The voting rights of restricted stocks shall be exercised by a trust or a centralized custodian institution in accordance with the contract.
(d)Employee's continuous employment with King Long through the vesting dates, with no violation on any terms of the King Long’s employment agreement, employee polocies, are eligible to receive the vested shares.
(e)The fair value information of restricted stocks for employees is as follows:

Grant date	Cut-off date of lock-up period	Total units of restricted stocks issued	Total unit outstanding	Fair value per share
2021.05.20	2026.05.19	34,784,936	32,723,904(Note)	CNY$7.38

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023, total outstanding units were 34,784,936 shares, and the cancellation of 2,061,032 shares retrieved back from those employees who resigned was completed in January 2024. Accordingly, total outstanding units as of December 31, 2024 were 32,723,904 shares.

The compensation cost was recognized under the fair value method and the BlackScholes Option Pricing model was used to estimate the fair value of options granted. The estimated compensation expenses amounted to NT$118,326 thousand in total based on the vesting conditions and will be recognized during the vesting period.

Assumptions used in calculating the fair value are disclosed as follows:

Expected volatility (%) Risk free interest rate (%) Expected life (Year)	Restricted stocks for employees
	44.88% 0.08% 5 years

The expected life of the restricted stocks is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the restricted stocks is indicative of future trends, which may also not necessarily be the actual outcome.

Share-based compensation expenses recognized for employee services received are shown in the following table:

Restricted stocks for employees	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$60,450	$86,529

The Company did not modify or cancel any share-based payment plans for the years ended December 31, 2024 and 2023.

The Company has issued the restricted stocks plan for employees with grant dates prior to October 10, 2024. According to the Q&A issued by Financial Supervisory Commission, there is no need to retroactively apply the Q&A “Restricted stocks plan for employees” issued by Accounting Research and Development Foundation. Therefore, the original accounting treatment remains applicable.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(16) Operating revenue

The summary of operating revenue from continuing operations are as follows. Please refer to Note 6. (6) for discontinued operations information.

Assembly and testing processing revenue Revenue from rental of machinery Rental income from property Other operating revenue Total revenue	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$22,647,730 2,655,045 83,416 1,469,840	$20,752,854 2,292,278 36,375 910,073
	$26,856,031	$23,991,580

Relevant information of revenue from contracts with customers for the years ended December 31, 2024 and 2023 are as follows:

A. Disaggregation of revenue

Nature of revenue	Timing of revenue recognition	For theyears ended December 31,	For theyears ended December 31,
		2024	2023
Rendering of services Revenue from rental of machinery Rental income from property Other operating revenue Total	Over time Over time On a straight-line basis or on a systematic basis (Note) At a point in time	$22,647,730 2,655,045 83,416 1,469,840	$20,752,854 2,292,278 36,375 910,073
		$26,856,031	$23,991,580

Note: Please refer to Note 6. (18) for information regarding leases.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

B. Contract balances

(a) Contract assets – current

Nature of revenue	December 31, 2024	December 31, 2023	January 1, 2023
Rendering of services	$90,914	$414,883	$153,753

Please refer to Note 6. (17) for more details on effect of impairment. Relevant information of revenue from contracts with customers for the years ended December 31, 2024 and 2023 are as follows:

The opening balance transferred to trade receivables Changes in completion measurement	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$414,883	$153,753
	$90,914	$414,883

(b) Contract liabilities - current

Nature of revenue	December 31, 2024	December 31, 2023	January 1, 2023
	$- -	$9,365 -	$156,639 -

The difference of the beginning and ending balances is the net effect of the various revenue contracts signed before the opening date and the assumption of the new performance obligations for new contracts signed as of the ending date.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(17) Expected credit losses

Operating expenses - expected credit losses

For the years ended December 31,

Continued operations: Contract assets Notes receivable Trade receivables Other receivables Subtotal Discontinued operations: Trade receivables Total	2024	2023
	$- - - -	$- - 8,481 -
	- 173	8,481 814
	$173	$9,295

Please refer to Note 12 for more details on credit risk.

The Company measures the loss allowance of its contract assets and receivables (including notes receivable and trade receivables) at an amount equal to lifetime expected credit losses. The assessment of the Company’s loss allowance as of December 31, 2024 and 2023 are as follows:

A. The gross carrying amount of contract assets is NT$90,414 thousand and NT$414,883 thousand, respectively. Expected credit loss ratio is estimated to be 0%.
B. The Company considers the grouping of trade receivables by counterparties’ credit ratings, geographical regions and industry sectors. Loss allowance is measured by using a provision matrix. Details are as follows:
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2024

Group1	Not yet due (Note)		Overdue	Overdue		Total
		1-90 days	91-180 days	181-365 days	>366 days
Gross carrying amount Loss ratio Lifetime expected credit losses Subtotal Group2	$5,941,211 -%	$58,528 -%	$43,060 1%	$- 2%	$- 5%	$6,042,799 (11,283)
	(10,852)	-	(431)	-	-
	5,930,359	58,528	42,629	-	-	6,031,516
	Not yet due (Note)		Overdue			Total
		1-90 days	91-180 days	181-365 days	>366 days
Gross carrying amount Loss ratio Lifetime expected credit losses Subtotal Total	$985 100%	$- 100%	$- 100%	$- 100%	$839 100%	$1,824 (1,824)
	(985)	-	-	-	(839)
	-	-	-	-	-	-
						$6,031,516

As of December 31, 2023

Group1	Not yet due (Note)		Overdue	Overdue		Total
		1-90 days	91-180 days	181-365 days	>366 days
Gross carrying amount Loss ratio Lifetime expected credit losses Subtotal Group2	$6,948,531 -%	$498,440 -%	$29,612 1%	$47 2%	$3,983 5%	$7,480,613 (9,628)
	(9,132)	-	(296)	(1)	(199)
	6,939,399	498,440	29,316	46	3,784	7,470,985
	Not yet due (Note)		Overdue			Total
		1-90 days	91-180 days	181-365 days	>366 days
Gross carrying amount Loss ratio Lifetime expected credit losses Subtotal Total	$631 100%	$- 100%	$- -%	$- 100%	$3,146 100%	$3,777 (3,777)
	(631)	-	-	-	(3,146)
	-	-	-	-	-	-
						$7,470,985

Note: All of the Company’s notes receivable are not overdue.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The movement in the provision for impairment of contract assets, notes receivable, and trade receivables for the years ended December 31, 2024 and 2023 is as follows:

Contract assets	Notes receivable	Trade receivables	Other receivables
$- - - - -	$- - - - -	$13,405 173 - (490) 19	$444 - - - -
$-	$-	$13,107	$444
Contract assets	Notes receivable	Trade receivables	Other receivables
$- - - -	$- - - -	$14,238 9,295 (10,111) (17)	$444 - - -
$-	$-	$13,405	$444

Note: Although the Company wrote off the financial assets, collection activities are still underway.

(18) Leases

A. The Company as a lessee

The Company leases land and buildings with lease terms ranging from 1 to 20 years. At the end of the lease terms, the Company does not have the purchase option to acquire the leasehold land and buildings.

The Company leases transportation equipment for operational use with lease terms of 1 years. The Company has purchase options to acquire leasehold transportation equipment at the end of the lease terms.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The effect that leases have on the financial position, financial performance and cash flows of the Company are as follows:

a. Amounts recognized in the balance sheet
(a) Right-of-use assets

The carrying amount of right-of-use assets

Land Buildings Transportation equipment Total	December 31, 2024	December 31, 2023
	$411,613 627,725 6,034	$592,953 19,836 8,202
	$1,045,372	$620,991

During the years ended December 31, 2024 and 2023, the Company’s acquisition of right-of-use assets amounted to NT$627,638 thousand and NT$3,768 thousand, respectively.

(b) Lease liabilities

Lease liabilities
Lease liabilities- current Lease liabilities- non-current Total	December 31, 2024	December 31, 2023
	$148,609 926,222	$30,876 441,190
	$1,074,831	$472,066

Please refer to Note 6. (20) C. for the interest on lease liabilities recognized during the years ended December 31, 2024 and 2023, and refer to Note 12. (5) section E Liquidity Risk Management for the maturity analysis for lease liabilities as of December 31, 2024 and 2023.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

b. Amounts recognized in the statement of profit or loss

Depreciation charge for right-of-use assets

Continuing operations: Land Buildings Transportation equipment Subtotal Discontinued operations: Land Total Income and costs relating to leasing activities Continuing operations: The expenses relating to short-term leases The expenses relating to leases of low-value assets (not including the expenses relating to short-term leases of low-value assets) Subtotal Discontinued operations: The expenses relating to short-term leases The expenses relating to leases of low-value assets (not including the expenses relating to short-term leases of low-value assets) Subtotal Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$19,009 20,139 2,543	$18,839 10,417 2,460
	41,691 1,579	31,716 4,729
	$43,270	$36,445
	2024	2023
	$147,139 678	$13,923 642
	147,817 312,581 4,671	14,565 158,432 4,304
	317,252	162,736
	$465,069	$177,301

c. Income and costs relating to leasing activities

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

d. Cash outflows relating to leasing activities

During the years ended December 31, 2024 and 2023, the Company’s total cash outflows for leases amounted to NT$503,311 thousand and NT$215,919 thousand, respectively.

e. Other information relating to leasing activities

Extension and termination options

Some of the Company’s property rental agreements contain extension and termination options. In determining the lease terms, the non-cancellable period for which the Company has the right to use an underlying asset, together with periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option and periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option. These options are used to maximize operational flexibility in terms of managing contracts. The majority of extension and termination options held are exercisable only by the Company.

After the commencement date, the Company reassesses the lease term upon the occurrence of a significant event or a significant change in circumstances that is within the control of the lessee and affects whether the Company is reasonably certain to exercise an option not previously included in its determination of the lease term, or not to exercise an option previously included in its determination of the lease term.

B. The Company as a lessor

The Company entered into commercial property leases with remaining terms between one to five years. All leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

Lease income for operating leases Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$83,415	$36,375

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Please refer to Note 6. (8) for relevant disclosure of property, plant and equipment for operating leases under IFRS 16. For operating leases entered by the Company, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of December 31, 2024 and 2023 are as follow:

Not later than one year Later than one year and not later than five years Later than 5 years Total	December 31, 2024	December 31, 2023
	$54,131 7,697 -	$32,168 7,065 554
	$61,828	$39,787

(19) Summary statement of employee benefits, depreciation and amortization expenses from continuing operations by function:

		For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
		2024			2023
	Operating costs	Operating expenses	Total amount	Operating costs	Operating expenses	Total amount
Employee benefits expense
Salaries	$4,931,756	$1,175,089	$6,106,845	$4,347,076	$1,095,217	$5,442,293
Labor and health insurance	471,683	83,536	555,219	443,040	82,306	525,346
Pension	181,865	44,036	225,901	173,175	42,474	215,649
Remuneration of directors	-	98,034	98,034	-	69,299	69,299
Other employee benefits expense	264,112	38,930	303,042	225,508	35,131	260,639
Total	$5,849,416	$1,439,625	$7,289,041	$5,188,799	$1,324,427	$6,513,226
Depreciation	$5,864,827	$546,563	$6,411,390	$6,092,636	$517,341	$6,609,977
Amortization	$6,765	$3,796	$10,561	$12,298	$14,986	$27,284

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In accordance with the Articles of Incorporation, no higher than 1% of the profit of the current year is distributable as remuneration to directors (including independent directors). However, the Company’s accumulated losses shall have been covered (if any). The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by twothirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. In addition, according to the Company’s Articles of Incorporation, the remuneration paid to directors (including independent directors) is determined based on the Company’s overall operating performance with consideration of the contribution of each director to the Company and reference to industry norm. The remuneration proposal shall be approved by more than half members of the Compensation Committee and submitted to the Board of Directors for further approval.

According to the Company’s Articles of Incorporation and the Company Law, the remuneration of the Company’s executives is determined based on the positions of the executives, contribution to the Company’s operations, individual performance, and consideration of the Company’s future risk and reference to the industry norm. The remuneration is to be reviewed by the Compensation Committee for its plausibility and submitted to the Board of Directors for resolution.

The employee’s compensation policy of the Company takes into account various factors such as individual’s salary, rank, and performance evaluation, the industry norm and the Company’s operating results, etc.

In accordance with the Articles of Incorporation, 8% to 10% of profit of the current year is distributable as employees’ compensation and no higher than 1% of profit of the current year is distributable as remuneration to directors. However, KYEC’s accumulated losses shall have been covered (if any). KYEC may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees’ compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders’ meeting. Information on the Board of Directors’ resolution regarding the employees’ compensation and remuneration to directors can be obtained from the “Market Observation Post System” on the website of the TWSE.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Based on profit of current period, KYEC estimated the amounts of the employees’ compensation and remuneration to directors for the year ended December 31, 2024 to be 8% of profit of current period (or NT$850,211 thousand) and 0.8% of profit of current period (or NT$85,021 thousand), respectively, which were recognized as salary expense. If the Board of Directors resolved to distribute employees’ compensation in the form of stocks, then the number of stocks distributed is calculated based on the closing price one day prior to the date of resolution. If the estimated amounts differ from the actual distribution resolved by the Board of Directors, the difference will be recognized in the profit or loss in the subsequent year. A resolution was passed at a Board of Directors meeting held on February 21, 2025 to distribute NT$850,211 thousand and NT$85,021 thousand in cash as employees’ compensation and remuneration to directors, respectively, which were consistent with the estimated amounts recognized for the year ended December 31, 2024.

Actual distribution of employees’ compensation and remuneration to directors of 2023 amounted to NT$626,838 thousand and NT$62,684 thousand, respectively. No material differences exist between the estimated amount and the actual distribution of the employee compensation and remuneration to directors for the year ended 31 December 2023.

(20) Income and expenses from continuing operations

A. Other income

Dividend income Others Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$98,364 140,539	$99,233 164,832
	$238,903	$264,065

B. Other gains and losses

Gain on disposal of property, plant and equipment Foreign exchange gain, net Impairment loss – property, plant and equipment Others Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$147,094 141,321 (123,029) (262,115)	$75,319 84,624 - (2,287)
	$(96,729)	$157,656

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

C. Finance costs

For the years ended December 31,

Interest expenses on borrowings from bank Interest expenses on lease liabilities Total	2024	2023
	$429,301 8,666	$507,200 8,955
	$437,967	$516,155

(21) Components of other comprehensive income

For the year ended December 31, 2024

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations Equity directly associated with disposal group held for sale Total of other comprehensive income	Arising during the period	Reclassification adjustments during the period	Other comprehensive income	Income tax expenses	Other comprehensive income, net of tax
	$17,172 (172,344) 977,406 (262,947)	$- - - -	$17,172 (172,344) 977,406 (262,947)	$- 34,470 (131,286) -	$17,172 (137,874) 846,120 (262,947)
	$559,287	$-	$559,287	$(96,816)	$462,471

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2023

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income To be reclassified to profit or loss in subsequent periods: Exchange differences resulting from translating the financial statements of foreign operations Total of other comprehensive income	Arising during the period	Reclassification adjustments during the period	Other comprehensive income	Income tax expenses	Other comprehensive income, net of tax
	$20,738 1,747,230 (231,435)	$- - -	$20,738 1,747,230 (231,435)	$- (346,210) 42,802	$20,738 1,401,020 (188,633)
	$1,536,533	$-	$1,536,533	$(303,408)	$1,233,125

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(22) Income tax

The major components of income tax expense from continuing operations are as follows:

Income tax expense recognized in profit or loss

For theyears ended December 31, 2024 2023 Current income tax expense: Current income tax charge $1,245,450 $1,020,670 Adjustments in respect of current income tax of prior periods (57,259) (104,675) Deferred tax expense (income): Deferred tax expense (income) relating to origination and reversal of temporary differences 22,555 39,076 Income tax expense recognized in profit or loss $1,210,746 $955,071 Income tax relating to components of other comprehensive income For theyears ended December 31, 2024 2023 Deferred tax expense (income): Unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income $(34,470) $346,210 Exchange differences resulting from translating the financial statements of foreign operations 131,286 (42,802) Income tax relating to components of other comprehensive income $96,816 $303,408	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$1,245,450 (57,259) 22,555	$1,020,670 (104,675) 39,076
	$1,210,746	$955,071
Deferred tax expense (income): Unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income Exchange differences resulting from translating the financial statements of foreign operations Income tax relating to components of other comprehensive income
	2024	2023
	$(34,470) 131,286	$346,210 (42,802)
	$96,816	$303,408

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

Accounting profit before tax from continuing operations Tax at the domestic rates applicable to profits in the country concerned Tax effect of expenses not deductible for tax purposes Tax effect of deferred income tax assets/liabilities from continuing operations Tax effect of reclassification of deferred income tax assets/liabilities to discontinued operations Different tax rates between the parent company and subsidiaries Adjustments in respect of current income tax of prior periods Investment tax credits Others Total income tax expense recognized in profit or loss	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$5,971,547	$5,240,524
	$1,194,309 (688,419) 22,555 736,332 16,398 (57,259) (25,000) 11,830	$1,048,105 (418,999) 39,075 378,457 13,108 (104,675) - -
	$1,210,746	$955,071

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Deferred tax assets (liabilities) relate to the following:

For the year ended December 31, 2024

Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Recognized in discontinued operations	Exchange differences	Ending balance
$22,939 12,650 438 (87,908) 109,394 (1,312,978) 114,022 (919,309) 18,438	$1,270 - 16,501 6,129 (53,640) (1,063) - - 8,248	$- - - - - - (131,286) 34,470 -	$- - - 23,802 - (736,332) - - -	$- - - (5,796) - - - - 11	$24,209 12,650 16,939 (63,773) 55,754 (2,050,373) (17,264) (884,839) 26,697
$(2,042,314)	$(22,555)	$(96,816)	$(712,530)	$(5,785)	$(2,880,000)

$302,946 -					$167,443 -
$302,946					$167,443
$2,345,260 -					$2,952,476 94,967
$2,345,260					$3,047,443

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2023

Beginning balance	Recognized in profit or loss	Recognized in other comprehensive income	Recognized in discontinued operations	Exchange differences	Ending balance
$72,318 12,650 982 31,027 90,164 (931,714) 71,220 (572,943) 17,895	$(49,379) - (544) (5,962) 19,230 (2,807) - (156) 543	$- - - - - - 42,802 (346,210) -	$- - - (112,301) - (378,457) - - -	$- - - (672) - - - - -	$22,939 12,650 438 (87,908) 109,394 (1,312,978) 114,022 (919,309) 18,438
$(1,208,401)	$(39,075)	$(303,408)	$(490,758)	$(672)	$(2,042,314)

$296,256					$302,946
$1,504,657					$2,345,260

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table contains information of the unused tax losses of the Company:

Entities	Year	Tax losses for theperiod	Unused tax losses as of(Note)	Unused tax losses as of(Note)	Expiration year
			December 31, 2024	December 31, 2023
Foreign Subsidiaries	2018 2022	$79,286 1,493	$75,405 1,493	$69,936 1,420	2028 2032
			$76,898	$71,356

Note: Amounts are converted using the exchange rate at the balance sheet date for each year.

Unrecognized deferred tax assets

As of December 31, 2024 and 2023, deferred tax assets that have not been recognized amounted to NT$19,225 thousand and NT$17,839 thousand, respectively.

The assessment of income tax returns

As of December 31, 2024, the assessment of the income tax returns of the Company and its subsidiaries is as follows:

Entities	The assessment of income tax returns
KYEC Subsidiaries: King Long Technology (Suzhou) Ltd. Suzhou Zhengkuan Technology Ltd. KYEC USA Corp. KYEC Japan K.K. KYEC SINGAPORE PTE. Ltd.	Assessed and approved up to 2022 Filed up to 2023 Filed up to 2023 Filed up to 2023 Filed up to 2023 Filed up to 2023

(23) Earnings per share

Basic earnings per share is calculated by dividing net profit for the year attributable to ordinary equity owners of the Company by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share is calculated by dividing the net profit attributable to ordinary equity owners of the Company by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

A. Basic earnings per share Profit attributable to ordinary equity owners of the parent Profit from discontinued operations Profit from continuing operations Weighted average number of ordinary shares outstanding for basic earnings per share (thousand share) Basic earnings per share (NT$) From continuing and discontinued operations From continuing operations B. Diluted earnings per share Profit attributable to ordinary equity owners of the parent Profit from discontinued operations Profit from continuing operations Weighted average number of ordinary shares outstanding for basic earnings per share (in thousands) Effect of dilution: Employee compensation－stock (in thousands) Weighted average number of ordinary shares outstanding after dilution (in thousands) Diluted earnings per share (NT$) From continuing and discontinued operations From continuing operations	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$7,779,428 2,945,327	$5,840,365 1,513,827
	$4,834,101	$4,326,538
	1,222,745	1,222,745
	$6.36	$4.78
	$3.95	$3.54
	2024	2023
	$7,779,428 2,945,327	$5,840,365 1,513,827
	$4,834,101	$4,326,538
	1,222,745 8,578	1,222,745 10,228
	1,231,323	1,232,973
	$6.32	$4.74
	$3.93	$3.51

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date the financial statements were issued.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(24) Changes in the ownership interest of subsidiaries

A. Capital reduction of certain shareholders

King Long Technology (Suzhou) Ltd. completed a capital reduction for certain employees’ restricted stocks plan on January 18, 2024 and the Company did not participate the capital reduction that resulted its ownership increased to 92.16%. Cash decrease due to the capital reduction amounted to NT$20,608 thousand. Related information of the change in capital surplus is shown below:

Cash decrease due to capital reduction Decrease in non-controlling interest Differences in equity-capital surplus	For the year ended December 31,2024
	$(20,608) 87,005
	$66,397

No such transaction occurred in 2023.

B. Subscription of new shares disproportionate to its original ownership interest

King Long Technology (Suzhou) Ltd. completed capital increase of restricted stocks plan for employees in January 2023 and the Company did not subscribe the new shares issued. Accordingly, its ownership was reduced to 91.54%. Cash acquired from the capital increase amounted to NT$24,258 thousand. Related information of the change in capital surplus is shown below:

Cash from capital increase Increase in non-controlling interest Differences in equity-capital surplus	For the year ended December 31,2023
	$24,258 (102,692)
	$(78,434)

No such transaction occurred in 2024.

C. Share-based payment plans

On September 28, 2022, and May 17, 2021, Board of Directors of King Long Technology (Suzhou) Ltd. approved an employee share-based payment compensation plan. The compensation cost was recognized during the vesting period. Please refer to Note 6. (15) for relevant disclosures. The abovementioned transaction also changed the ownership interest of subsidiaries.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Related Party Transactions

Information of the related parties that had transactions with the Company during the financial reporting period is as follows:

A. Name and nature of relationship of the related parties

Name of the relatedparties	Nature of relationshipof the relatedparties
MediaTek Inc. MediaTek Singapore Pte. Ltd. Airoha Technology Corp. Other related parties (Note) Hsieh, Chi-Chun LC Architecture Realization Company, Inc Fixwell Technology Corp. Wei Jiu Industrial Co., Ltd.	The chairman of the Company and the chairman of MediaTek Inc. are close relatives Subsidiary of MediaTek Inc. Subsidiary of MediaTek Inc. Subsidiary of MediaTek Inc. The vice-chairman of the Company A director of the Company also serves as the chairman of LC Architecture Realization Company, Inc Associates Associates

Note: The Company's transactions with these companies are not material.

B. Significant transactions with related parties

a. Sales revenue

Continuing operations: MediaTek Inc. MediaTek Singapore Pte. Ltd. Airoha Technology Corp. Other related parties Associates Subtotal Discontinued operations: MediaTek Inc. MediaTek Singapore Pte. Ltd. Other related parties Subtotal Total	For the years ended December 31,	For the years ended December 31,
	2024	2023
	$3,462,686 3,330,155 801,581 82,124 10,502	$2,993,768 2,829,345 383,668 80,840 10,806
	7,687,048	6,298,427
	355,312 149,480 2,042	303,338 115,458 3,220
	506,834	422,016
	$8,193,882	$6,720,443

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Tading price with related parties was determined through mutual agreement based on the market demands. The trade credit terms with related parties were 45 to 90 days, while the terms with non-related parties were 30 to 120 days. The outstanding balance due from related parties as of December 31, 2024 and 2023 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

b. The Company purchased inventories from associates. For the years ended December 31, 2024 and 2023, the purchase amounts were NT$57,822 thousand and NT$17,509 thousand, respectively. The purchase price was based on the market demands. The payment terms with associates were 30 days, while the terms with non-related parties were 30 to 120 days.
c. The Company engaged associates to perform machinery repairs. For the years ended December 31, 2024 and 2023, the operating costs recognized amounted to NT$239,817 thousand and NT$305,182 thousand, respectively.
d. The Company paid rental expenses for renting machines from associates. For the years ended December 2024 and 2023, the rental expenses amounted to NT$9,072 thousand and NT$0 thousand, respectively. The rental price was based on the similar machine’s rental price in the market. The payment terms with associates were 30 to 90 days, while terms with non-related parties were 0 to 30 days.
e. The Company engaged Hsieh, Chi-Chun as the physician at the factory. For the years ended December 31, 2024, the operating expenses amounted to NT$500 thousand. No such transaction occurred in 2023.
f. Significant property transactions with related parties:
(a) Disposal of property, plant and equipment

Relatedparty	For the year ended December 31,2024	For the year ended December 31,2024	For the year ended December 31,2023	For the year ended December 31,2023
	Salesprice	Disposalgain	Salesprice	Disposalgain
MediaTek Inc.	$1,029	$83	$214,121	$10,500

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(b) Acquisition of property, plant and equipment

Relatedparty	For theyear ended December 31,	For theyear ended December 31,
	2024	2023
	Purchaseprice	Purchaseprice
Associates	$154,348	$159,719

The purchase price was determined through mutual agreement based on the market demand.

g. Trade receivables from related parties

Continuing operations: MediaTek Inc. MediaTek Singapore Pte. Ltd. Airoha Technology Corp. Other related parties Associates Less: loss allowance Subtotal Discontinued operations: MediaTek Inc. MediaTek Singapore Pte. Ltd. Other related parties Subtotal Net	December 31, 2024	December 31, 2023
	$1,013,690 721,583 223,956 20,711 863 -	$1,047,532 806,836 101,357 16,446 789 -
	$1,980,803	$1,972,960
	46,274 33,784 543	- - -
	80,601	-
	$2,061,404	$1,972,960

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

h. Other receivables from related parties

MediaTek Inc. Other related parties Associates Total	December 31, 2024	December 31, 2023
	$17,621 279 15	$100,752 225 -
	$17,915	$100,977

i. Account payables to related parties

Wei Jiu Industrial Co., Ltd. Associates Total Other payables to related parties Fixwell Technology Corp. Wei Jiu Industrial Co., Ltd. Other related parties Other Total	December 31, 2024	December 31, 2023
	$15,299 147	$7,112 42
	$15,446	$7,154
	December 31, 2024	December 31, 2023
	$60,010 49,396 1,141 45	$47,027 21,805 1,147 -
	$110,592	$69,979

j. Other payables to related parties
k. Other income

Associates	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$250	$1,500

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

l. Key management personnel compensation

Short-term employee benefits Post-employment benefits Share-based payment (Note) Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$237,571 1,206 15,693	$190,153 1,170 (1,154)
	$254,470	$190,169

Note: Due to changes in the turnover rate.

8. Assets Pledged as Security

The following table lists assets of the Company pledged as security:

Items	Carryingamount	Carryingamount	Purpose ofpledge
	December 31, 2024	December 31, 2023
Continuing operations: Other non-current financial assets Land Building and facility Machinery and equipment Subtotal Disposal groups held for sale: Other current financial assets Total	$148,916 914,594 963,150 4,795,725	$147,333 914,594 1,040,838 3,650,636	Customs clearance Long-term borrowings Long-term borrowings Long-term borrowings L/C guarantee deposits
	6,822,385 4	5,753,401 4
	$6,822,389	$5,753,405

9. Significant Contingent Liabilities and Unrecognized Commitments

As of December 31, 2024, the following contingencies and material commitments were not included in the Company’s consolidated financial statements:

A. The Company's issued and outstanding letters of credit totaled approximately NT$806,479 thousand.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

B. To construct the plant and factory premises, the Company had entered into several construction contracts in an aggregate amount of NT$4,520,193 thousand with NT$3,416,584 thousand already paid and NT$1,103,609 thousand remaining unpaid (promissory notes have been issued).
C. The promissory notes issued for secured bank loans amounted to NT$50,837,536 thousand.
D. The Company entered into a loan agreement with Mega International Commercial Bank, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2022 to 2028:
(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.

The Company entered into a loan agreement with Taipei Fubon Commercial Bank, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2024 to 2027:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.

The Company entered into loan agreements with Yuanta Commercial Bank, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2023 to 2027:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.

The Company entered into a loan agreement with Yuanta Commercial Bank , the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2024 to 2028:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company entered into a loan agreement with Far Eastern International Bank, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2024 to 2027:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.

The Company entered into a loan agreement with First Commercial Bank, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2024 to 2029:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.

The Company entered into loan agreements with CTBC Financial Holding Co., Ltd, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2024 to 2026:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.

The Company entered into a loan agreement with Cathay United Bank, the following financial covenants shall be maintained on semi-annual and annual basis during the period from 2024 to 2027:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio no less than 300%.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company entered into a syndicated loan agreement with 15 banks, led by Bank of Taiwan, and the Company shall maintain the following financial covenants on semi-annual and annual basis during the period from 2023 to 2028:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio not less than 300%.

In the case of failure to adhere to the aforementioned financial covenants during the period from 2023 to 2028, Bank of Taiwan may assemble a meeting among the banks to govern the matter to decide on a course of action or request for each bank’s written approval for such course of action, when necessary.

The Company entered into a syndicated loan agreement with 14 banks, led by Bank of Taiwan, and the Company shall maintain the following financial covenants on semi-annual and annual basis during the period from 2024 to 2029:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 150%;
(c) Interest coverage ratio not less than 300%.

In the case of failure to adhere to the aforementioned financial covenants during the period from 2024 to 2029, Bank of Taiwan may assemble a meeting among the banks to govern the matter to decide on a course of action or request for each bank’s written approval for such course of action, when necessary.

The subsidiary of King Long Technology (Suzhou) Ltd. entered into a loan agreement with China Construction Bank, the following financial covenants shall be maintained during the loan period:

(a) Current ratio not less than 100%;
(b) Debt ratio not more than 65%;

As of December 31, 2024, the Company did not violate any financial covenants.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

E. The Company has issued a notice of fulfillment of the settlement conditions in accordance with the requirements of the share purchase agreement refer to Note 11, and the share purchase settlement was completed on February 13, 2025. In the event of any violation of the representations, warranties, commitments, or agreements under the share purchase agreement, if any illegal actions existed within King Long Technology (Suzhou) Ltd. before or on the settlement date, or if any third party raises claims or asserts rights regarding actions taken by King Long Technology (Suzhou) Ltd. before or on the settlement date, resulting in losses to the buyers after the settlement date, the company shall assume liability for indemnification. The aforementioned indemnification obligation is not limited to commercial activities but also include tax, housing provident fund, and other statutory obligations. However, the resolution of statutory obligations such as taxes and housing provident fund depends on the future development of approval practices, and the profit from selling King Long Technology (Suzhou) Ltd. recognized by the company have not considered the impact of these uncertainties.

10. Losses due to Major Disasters

None.

11. Significant Subsequent Events

In order to meet the needs of future operational development and the long-term effective utilization of financial resources, the Board of Directors resolved to sell its entire 92.16% ownership interest in King Long Technology (Suzhou) Ltd., on April 26, 2024 with the price of RMB$9.67 per registered capital unit which was previously owned by KYEC Microelectronics Co., Ltd., and the registered capital will transfer to Suzhou Industrial Park Industrial Investment Fund (L.P.) and other companies, and complete the signing of the share purchase agreement. As the settlement conditions were fulfilled, the settlement date was set on February 13, 2025, and the preliminary estimate of the carrying amount was USD521,431 thousand, the net disposal price was USD673,651 thousand, and the foreign exchange difference loss was USD(10,632) thousand. Accordingly, preliminary estimate of the disposal gain was USD141,589 thousand.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Others

(1) Categories of financial instruments (including disposal groups held for sale)
A. Categories of financial instruments

Financial assets Financial assets at fair value through other comprehensive income Financial assets measured at amortized cost (Note) Total Financial liabilities Financial liabilities at amortized cost: Short-term borrowings Payables (including related parties) Other payables (including related parties) Long-term loans (including current portion) Lease liabilities Guarantee deposits Total	December 31, 2024	December 31, 2023
	$6,369,337 23,302,075	$6,541,681 20,144,018
	$29,671,412	$26,685,699
	$- 2,023,284 7,214,099 25,676,402 1,074,831 6,316	$220,133 1,162,425 4,247,074 23,175,624 472,066 34,052
	$35,994,932	$29,311,374

Note: Includes cash and cash equivalents, notes receivable, trade receivables (including related parties), other receivables (including related parties), other financial assets and refundable deposits.

(2) Financial risk management objectives

The objective of the Company’s financial risk management is mainly to manage the market risk, credit risk and liquidity risk derived from its operating activities. The Company identified, measured and managed the aforementioned risks based on the Company’s policy and risk tendency.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Company has established appropriate policies, procedures and internal controls for financial risk management. The plans for material treasury activities are reviewed by Board of Directors and Audit committee in accordance with relevant regulations and internal controls. The Company complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market prices comprise foreign currency risk, interest rate risk and other price risk (such as equity risk).

In practice, it is rarely the case that a single risk variable will change independently from other risk variables, there are usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

A. Foreign currency risk

The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense are denominated in a different currency from the Company’s functional currency) and the Company’s net investments in foreign operations.

Some receivables and payables are denominated in the same foreign currency, and it will result in economic hedging effect. Further, net investments in foreign operations are primarily for strategic purposes, and they are not hedged by the Company.

The Company's sensitivity analysis to foreign currency risk mainly focuses on foreign currency monetary items at the end of the reporting period. The Company’s foreign currency risk is mainly from the volatility in the exchange rates of US$ and CNY. The sensitivity analysis is as follows:

When NT$ appreciates or depreciates against US$ by 1%, the profit for the years ended December 31, 2024 and 2023 including disposal group held for sale would have increased/decreased by NT$491 thousand and NT$8,220 thousand, respectively.

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

When NT$ appreciates or depreciates against CNY by 1%, the profit for the years ended December 31, 2024 and 2023 including disposal group held for sale would have increased/decreased by NT$17,930 thousand and NT$20,115 thousand, respectively.

B. Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates to the Company’s loans and receivables at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The Company manages its risk by having a balanced portfolio of financial instruments with fixed and floating interest rates. The Company did not apply hedging accounting since such hedging activities did not qualify for criteria of hedge accounting.

The Company’s sensitivity analysis to interest rate risk mainly focuses on items exposed to interest rate risk at the end of the reporting period, including investments with floating interest rates and bank borrowings with floating rates. Assuming investments and bank borrowings had been outstanding for the entire period and all other variables were constant, a hypothetical increase/decrease of 10 basis points of interest rate in a reporting period including disposal group held for sale would have resulted in a decrease/increase in profit by NT$25,691 thousand and NT$23,408 thousand for the years ended December 31, 2024 and 2023, respectively.

C. Equity price risk

The Company’s equity investments, including listed and unlisted equity securities, are exposed to market price risk arising from uncertainties of future values of equity securities. The Company’s investments in listed and unlisted equity securities are classified under financial assets at fair value through other comprehensive income. The Company manages the equity price risk through diversification and placing limits on individual and total equity investments. Reports on the equity portfolio are submitted to the Company’s senior management on a regular basis. The Company’s Board of Directors reviews and approves certain significant equity investments according to level of authority.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

At the reporting date ended December 31, 2024 and 2023, a change of 20% in the price of the listed equity securities classified under equity instrument investments measured at fair value through other comprehensive income would have impact of NT$7,874 thousand and NT$10,136 thousand on the equity attributable to the Company.

Please refer to Note 12. (8) section H for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

D. Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract, leading to a financial loss. The Company is exposed to credit risk from operating activities (primarily for trade receivables and notes receivable) and from its financing activities (including bank deposits and other financial instruments).

Customer credit risk is managed by each business unit subject to the Company’s established policy, procedures and controls relating to customer credit risk management. Credit limits are established for all customers based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Company’s internal rating criteria, etc. Certain customer’s credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment and insurance.

As of December 31, 2024 and 2023, receivables from top ten customers represented 58% and 49% of the total trade receivables of the Company, respectively. The credit concentration risk of other accounts receivable was insignificant.

The Company manages its exposure to credit risk arising from bank deposits, fixed income securities and other financial instruments in accordance with established group policies. Since the counter-parties are selected reputable financial institutions and companies, the Company believes it exposure to credit risk is not significant.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

E. Liquidity risk management

The Company maintained financial flexibility through the holding of cash and cash equivalents, investments in securities with high liquidity, and facilities of bank borrowings. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity, and the payment amount also includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial instruments

December 31, 2024 Payables Borrowings Lease liabilities (Note) December 31, 2023 Payables Borrowings Lease liabilities (Note)	Less than 1year	1 to 2years	2 to 3years	3 to 4years	Longer than 4years	Total
	$9,237,383 1,741,921 148,609 $5,409,499 1,403,781 30,876	$- 7,579,736 141,403 $- 13,002,723 23,541	$- 9,574,654 143,705 $- 2,829,818 17,877	$- 7,670,784 146,161 $- 2,163,866 17,742	$- 1,032,322 494,953 $- 5,797,486 382,030	$9,237,383 27,599,417 1,074,831 $5,409,499 25,197,674 472,066

Notes: Information about the maturities of lease liabilities is provided in the table below:

Lease liabilities December 31, 2024 December 31, 2023		Maturities Period	Maturities Period	Maturities Period
	Less than 1year	1 to 5years	6 to 10years	>10years	Total
	$148,609 $30,876	$576,449 $77,240	$91,888 $89,369	$257,885 $274,581	$1,074,831 $472,066

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

F. Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for year ended December 31, 2024:

As of January 1, 2024 Cash flows Non-cash changes Syndicated loan issuance costs Amortization on discount of commercial papers Acquisition of right-of-use assets Remeasurement of lease liabilities Foreign exchange movement Disposal group held for sale As of December 31, 2024	Short-term borrowings	Long-term loans	Lease liabilities	Total liabilities from financing activities
	$220,133 (231,577) - - - - 11,444 -	$23,175,624 1,992,064 2,400 7,190 - - 499,124 (5,095,689)	$472,066 (29,576) - - 627,638 4,247 456 -	$23,867,823 1,730,911 2,400 7,190 627,638 4,247 511,024 (5,095,689)
	$-	$20,580,713	$1,074,831	$21,655,544

Reconciliation of liabilities for year ended December 31, 2023:

As of January 1, 2023 Cash flows Non-cash changes Syndicated loan issuance costs Amortization on discount of commercial papers Acquisition of right-of-use assets Remeasurement of lease liabilities Decrease of lease liabilities Foreign exchange movement As of December 31, 2023	Short-term borrowings	Long-term loans	Lease liabilities	Total liabilities from financing activities
	$1,023,149 (801,649) - - - - - (1,367)	$25,270,336 (1,702,777) 13,965 (2,568) - - - (403,332)	$495,138 (29,663) - - 1,368 6,674 (1,061) (390)	$26,788,623 (2,534,089) 13,965 (2,568) 1,368 6,674 (1,061) (405,089)
	$220,133	$23,175,624	$472,066	$23,867,823

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

G. Fair values of financial instruments

a. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Company to measure or disclose the fair values of financial assets and financial liabilities:

(a) The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and other payables approximate their fair value due to their short maturities.
(b) For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price at the reporting date.
(c) Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).
(d) Fair value of debt instruments without market quotations, bank loans and other noncurrent liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instruments.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

b. Fair value of financial instruments measured at amortized cost

The carrying amounts of the Company’s financial assets and financial liabilities measured at amortized cost approximate their fair value.

c. Fair value measurement hierarchy for financial instruments

Please refer to Note 12. (8) section H for fair value measurement hierarchy for financial instruments of the Company.

H. Fair value measurement hierarchy

a. Fair value measurement hierarchy

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date.
Level 2: Input other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.
Level 3: Unobservable inputs for the assets or liabilities.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

b. Fair value measurement hierarchy of the Company’s assets and liabilities

The Company does not have assets measured at fair value on a non-recurring basis; the following table presents the fair value measurement hierarchy of the Company’s assets and liabilities on a recurring basis:

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, 2024

Level 1 Level 2 Level 3 Total Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income $39,369 $- $6,329,968 $6,369,337 December 31, 2023 Level 1 Level 2 Level 3 Total Financial assets at fair value through other comprehensive income Equity instruments measured at fair value through other comprehensive income $50,680 $- $6,491,001 $6,541,681

Transfers between Level 1 and Level 2 during the period

During the years ended December 31, 2024 and 2023, there were no transfers between Level 1 and Level 2 fair value measurements.

Reconciliation for fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

For the year ended December 31, 2024：

Beginning balances as of January 1, 2024 Total gains and losses recognized for the year ended December 31, 2024: Amount recognized in OCI (presented in “unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income”) Ending balances as of December 31, 2024	Assets
	At fair value through other comprehensive income
	Stocks
	$6,491,001 (161,033)
	$6,329,968

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English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For the year ended December 31, 2023：

Assets

	Assets
Beginning balances as of January 1, 2023 Total gains and losses recognized for the year ended December 31, 2023: Amount recognized in OCI (presented in “unrealized gains (losses) from equity instrument investments measured at fair value through other comprehensive income”) Ending balances as of December 31, 2023	At fair value through other comprehensive income
	Stocks
	$4,755,092 1,735,909
	$6,491,001

Information on significant unobservable inputs to valuation

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of December 31, 2024

Financial assets: Financial assets at fair value through other comprehensive income Stocks Stocks	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Assets approach Markets approach	Discount for lack of marketability P/E, P/B, EV/EBITDA, EV/EBIT and EV/Sales	10% 30%	The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the proportion of similar quantified information, the higher the fair value of the stocks	10% increase/decrease in the discount for lack of marketability would result in decrease/increase in the Company’s equity by NT$698,450 thousand. 10% increase/decrease in the discount for lack of marketability would result in decrease/increase in the Company’s equity by NT$6,273 thousand.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2023

Financial assets: Financial assets at fair value through other comprehensive income Stocks Stocks	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
	Assets approach Markets approach	Discount for lack of marketability P/E, P/B, EV/EBITDA, EV/EBIT and EV/Sales	10% 30%	The higher the discount for lack of marketability, the lower the fair value of the stocks The higher the proportion of similar quantified information, the higher the fair value of the stocks	10% increase/decrease in the discount for lack of marketability would result in decrease/increase in the Company’s equity by NT$712,690 thousand. 10% increase/decrease in the discount for lack of marketability would result in decrease/increase in the Company’s equity by NT$10,971 thousand.

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Company’s Finance Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Company’s accounting policies at each reporting date.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

I. Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies (include discontinued operations) is listed below:

Monetaryfinancial assets	December 31,2024	December 31,2024	December 31,2024
	Foreign Currency (thousand)	Exchange rate	NT$ (thousand)
US$ CNY Monetaryfinancial liabilities
US$ CNY Monetaryfinancial assets
	Foreign Currency (thousand)	Exchange rate	NT$ (thousand)
	$183,113 1,055,461 156,341 1,520,327	30.705 4.327 30.705 4.327	$5,622,487 4,566,980 4,800,455 6,578,457
US$ CNY Monetaryfinancial liabilities
US$ CNY

Functional currencies of entities of the Company are varied. Accordingly, the Company is not able to disclose the information of exchange gains and losses of monetary financial assets and liabilities by each significant assets and liabilities denominated in foreign currencies. The foreign exchange gains were NT$141,321 thousand and NT$84,624 thousand for the years ended December 31, 2024 and 2023, respectively.

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

J. Capital management

The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

13. Additional Disclosures

(1) The following are additional disclosures for the Company and its affiliates as required by the R.O.C. Securities and Futures Bureau for the year ended December 31, 2024:
A. Financing provided to others: Please refer to Attachment 1.
B. Endorsement/Guarantee provided to others: None.
C. Securities held as of December 31, 2024: Please refer to Attachment 2.
D. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock: None.
E. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock: Please refer to Attachment 3.
F. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock: None.
G. Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock: Please refer to Attachment 4.
H. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock: Please refer to Attachment 5.
I. Financial instruments and derivative transactions: None.
J. Parent-subsidiary relationship between business dealings and important circumstance: Please refer to Attachment 6.
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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(2) Information on investees
A. Information regarding investee companies over which the Company can exercise significant influence or control: Please refer to Attachment 7.
B. The following are additional disclosures for investee companies KYEC has control:
- a. Financing provided to others: Please refer to Attachment 1.
- b. Endorsement/Guarantee provided to others: None.
- c. Securities held as of December 31, 2024: None.
- d. Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock: None.
- e. Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock: Please refer to Attachment 3.
- f. Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock: None.
- g. Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock: Please refer to Attachment 4.
- h. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of December 31, 2024: Please refer to Attachment 5.
- i. Financial instruments and derivative transactions: None.
(3) Investment in Mainland China: Please refer to Attachment 6 and 8.
(4) Major shareholders information: The shareholder who owns above 5% securities of the Company as of December 31, 2024, is listed below:

Major shareholders	Shares held as of December 31	OwnershipPercentage(%)
Yuanta Taiwan Dividend Plus ETF	62,081,836	5.07%

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Segment Information

A. General information

The main revenue stream of the Company comes from testing and assembly services. The chief operating decision maker reviews the overall operating results to make decisions about resources to be allocated to and evaluates the overall performance. Therefore, the Company is aggregated into a single segment.

B. Regional information

(a) From external customer revenue:

Taiwan Asia North America Others Total	For theyears ended December 31,	For theyears ended December 31,
	2024	2023
	$8,502,700 8,690,558 8,745,891 916,882	$7,689,782 9,449,831 6,242,678 609,289
	$26,856,031	$23,991,580

(b) Non-current assets information is as follows:

Taiwan Asia Others Total	December 31, 2024	December 31, 2023
	$35,965,034 6,066 5,546	$30,693,212 14,071,473 9,943
	$35,976,646	$44,774,628

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English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(c) Major customer information

For the years ended December 31, 2024 and 2023, the information of external customer's revenue exceeding 10% of the Company’s consolidated revenue is as follows:

For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,	For theyears ended December 31,
2024		2023
$4,722,236 3,462,686	18% 13%	$- 2,993,768	(Note) 12%
$8,184,922	31%	$2,993,768	12%

Note: The revenue from Customer A in 2023 did not exceeding 10% of the Company’s consolidated revenue.

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Attachment 1

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

As of December 31, 2024

(Amounts in New Taiwan Thousand Dollars, Unless Specified otherwise)

Number	Financing Company Name	Counter Party	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 2)	Ending Balance	Amount Actually Drawn	Interest Rate	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debts	Collateral	Collateral	Financing Limits for Each Borrowing Company (Note 1)	Financing Company's Total Financing Amount Limits (Note 1)
													Item	Value
0	KYEC	KYEC Microelectronics Co., Ltd.	Other receivables from related party	Yes	$329,489	$329,489	$329,489	6%	Short-term financing	-	Operating Capital	-	-	-	$4,329,627	$8,659,254

Note 1: The numbers filled in for the financings provided by the group or subsidiaries are as follows: (1) The Company is "0".

(2) The subsidiaries are numbered in order starting from "1".

Note 2: The total amount for lending and the maximum amount lendable to a single company shall not exceed 40% of the Company's net worth in KYEC'S "Procedures for Loaning Funds to Others", and this can also be divided into the following two scenarios: (1) The maximum amount of financing to trading partners is 20% of the Company's net worth, and shall not exceed the transaction amount arising from business dealings during the most recent 1 year which is the higher amount of total sales or purchase transactions.

(2) The maximum amount of short-term financing to trading partners is 20% of the Company's net worth, and the maximum amount of short-term financing to a single company is 10% of the Company's net worth.

Note 3: Maximum accumulated balance of financing amount as of the declaration month for the period.

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Attachment 2

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

MARKTEABLE SECURITIES HELD

As of December 31, 2024

(Amounts in New Taiwan Thousand Dollars, Unless Specified otherwise)

Held Company Name	Securities Type	Securities Name	Relationship with the Company	Financial Statement Account	Balances as of December 31,2024	Balances as of December 31,2024	Balances as of December 31,2024	Balances as of December 31,2024	Note
					Shares/Units	Carrying Value	Percentage of Ownership (%)	Fair Value
The Company	Stock Stock Stock Stock Stock Stock Stock Stock	Shieh Yong Investment Co., Ltd. APM Communication, Inc. Greenliant Systems, Ltd. YANN YUAN Investment Co., Ltd. Movella Holdings Inc. Baas Innovation Co., Ltd. Unimicron Technology Corp. CAL-COMP INDÚSTRIA DE SEMICONDUTORES S.A.	- - - - - - - -	Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income Non-current financial assets at fair value through other comprehensive income	158,011,334 10,456 2,333,333 127,500,000 258,419 315,999 203,045 11,965,500	1,361,867 - - 4,924,187 170 10,570 28,629 43,914	7.58% 0.11% 3.74% 14.55% 0.51% 1.05% 0.01% 17.16%	1,361,867 - - 4,924,187 170 10,570 28,629 43,914

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Attachment 3

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

ACQUISITION OF INDIVIDUAL REAL ESTATE AT COSTS OF AT LEAST NT$300 MILLION OR 20% OF THE CAPITAL PAID-IN

As of December 31, 2024

(Amounts in New Taiwan Thousand Dollars, Unless Specified otherwise)

Held Company Name	Type of Properties	Transaction Date	Transaction Amount	Payment Status	Counter-party	Relationship	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Prior Transaction of Related Counter-party	Price Reference	Purpose and Usage of Acquisition	Other Commitments
							Owner	Relationship with the Issuer	Transfer Date	Amount
KYEC	Land	2024.08.30 (Note)	$340,000	The Company has paid off the total consideration as of December 31, 2024.	Natural person	None	Not applicable				Reference of valuation report issued by the real estate appraiser.	Purpose: to meet the needs of future operation and development Using status: ownership has been transferred	None
King Long Technology (Suzhou) Ltd.	Building and Facilities	2022.11.18 (Note)	$1,199,074	According to the trading term of purchase order, the Company has paid $1,073,171 thousand as of December 31, 2024.	Jiangsu Jianyuan Construction Co., Ltd.	None	Not applicable				Price comparison and bargaining	Purpose: to meet the needs of future operation and development Using status: ownership has not transferred	None

Note: Board of Directors approval date.

127 -

Attachment 4

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

For the year ended December 31, 2024

(Amounts in New Taiwan Thousand Dollars, Unless Specified otherwise)

Company Name	Related Party	Nature of Relationships	Transaction Details	Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable or Receivable (Included Contract Assets)	Notes/Accounts Payable or Receivable (Included Contract Assets)
			Purchase/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
KYEC	MediaTek Inc.	The chairman of the Company and the chairman of Mediatek Inc. are close relatives	Sales	$3,462,686	12.87%	Month-end 75 days	-	-	$1,013,690	16.46 %
	Mediatek Singapore Pte. Ltd.	Subsidiaryof MediaTek Inc.	Sales	$3,330,155	12.38%	Month-end 60 days	-	-	$721,583	11.72 %
	Airoha TechnologyCorp.	Subsidiaryof MediaTek Inc.	Sales	$801,581	2.98%	Month-end 60 days	-	-	$223,956	3.64 %
King Long Technology (Suzhou) Ltd.	MediaTek Inc.	The chairman of the Company and the chairman of Mediatek Inc. are close relatives	Sales	$355,312	4.09%	Month-end 75 days	-	-	$46,274	1.89 %
	Mediatek Singapore Pte. Ltd.	Subsidiary of MediaTek Inc.	Sales	$149,480	1.72%	Month-end 75 days	-	-	$33,784	1.38 %
	Suzhou Zhengkuan Technology Ltd.	Subsidiary	Sales	$168,991	1.95%	Month-end 180 days	-	-	$90,348	3.70 %

128 -

Attachment 5

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

As of December 31, 2024

(Amounts in New Taiwan Thousand Dollars, Unless Specified otherwise)

Company Name	Related Party	Nature of Relationships	Ending Balance	Turnover Rates	Overdue	Overdue	Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Action Taken
KYEC	MediaTek Inc.	The chairman of the Company and the chairman of Mediatek Inc. are close relatives	$1,031,311 (Note 1)	3.47	$-	-	$616,609	-
	Mediatek Singapore Pte. Ltd.	Subsidiary of MediaTek Inc.	$721,862 (Note 2)	4.41	$-	-	$419,707	-
	Airoha Technology Corp.	Subsidiary of MediaTek Inc.	$223,956	4.93	$-	-	$146,827	-
	King Long Technology (Suzhou) Ltd.	Subsidiary	$294,959 (Note 3)	1,96	$-	-	$39,342	-
	KYEC Microelectronics Co., Ltd.	Subsidiary	$336,299 (Note 4)	-	$-	-	$338,715	-
King Long Technology (Suzhou) Ltd.	Suzhou Zhengkuan Technology Ltd.	Subsidiary	$142,076 (Note 5)	1.85	$-	-	$23,550	-

Note 1 : Includes other receivables - related party amounting to NT$17,621 thousand arising from handling charges, freights and tax fees. Note 2 : Includes other receivables - related party amounting to NT$279 thousand arising from customs clearance charges and freights. Note 3 : Includes other receivables - related party amounting to NT$259,325 thousand arising from disposal of equipments. Note 4 : Financing amount and interest receivable.

Note 5 : Includes other receivables - related party amounting to NT$51,728 thousand arising from utility fees.

129 -

Attachment 6

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIP AND SIGNIFICANT INTERCOMPANY TRANSACTIONS DURING THE REPORTING PERIOD For the year ended December 31, 2024

(Amounts in New Taiwan Thousand Dollars, Unless Specified otherwise)

Number	Company name	Counterparty	Relationship	IntercompanyTransaction	IntercompanyTransaction	IntercompanyTransaction
				Finacial Statement Account	Amount	Transaction terms	% of Net revenues or total assets
0	KYEC	KYEC USA Corp.	1	Commission expense Accrued expenses	12,425 $72,752	according to contract	0.20% 0.01%
		King Long Technology (Suzhou) Ltd.		Sales of equipment Accounts receivable Other receivables Sales revenue Deferred credits	40,450 35,634 259,325 148,128 150,478		0.17% 0.04% 0.30% 0.11% 0.17%
		KYEC Japan. K.K.		Accrued expenses Commission expense	3,565 29,350		0.00% 0.08%
		KYEC Singapore PTE. LTD.		Commission expense	35,257		0.10%
		Suzhou Zhengkuan Technology Ltd.		Deferred credits	6,938		0.01%
		KYEC Microelectronics Co., Ltd.		Other receivables Interest revenue	336,299		0.39%
					6,695		0.02%
1	King Long Technology (Suzhou) Ltd.	Suzhou Zhengkuan Technology Ltd.	3	Sales revenue Accounts receivable Other receivables	51,728 90,348 168,991		0.46% 0.10% 0.06%

Note 1: The information of transactions between the Company and the conlidated subsidiaries should be noted in "Number" column.

(1) Number 0 represents the Company.

(2) The consolidated subsidiaries are numbered in order from number 1.

Note 2: The transaction relationships with the counterparties are as follows:

(1) The Company to the consolidated subsidiary.
(2) The consolidated subsidiary to the Company.
(3) The consolidated subsidiary to another consolidated subsidiary.

Note 3: In calculating the ratio, the transaction amount is divided by consolidated total assets for balance sheet accounts and is divided by consolidated total revenues for income statement accounts.

130 -

Attachment 7

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES OVER WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE (EXCLUDING INFORMATION ON INVESTMENT IN MAINLAND CHINA) For the year ended December 31, 2024

(Amounts in New Taiwan Thousand Dollars and United States Thousand Dollars, Unless Specified otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	Balance as of December 31, 2024	Balance as of December 31, 2024	Balance as of December 31, 2024	Net Income (Loss) of the Investee	Investment income (loss) recognised by the Company for the year ended of December 31, 2024.
				December 31,2024	December 31,2023	Shares	Percentage of Ownership	Carrying Value
KYEC	KYEC USA Corp.	Note 1	Sales agent and business communication in USA	$4,973	$4,973	160,000	100.00 %	$16,529	$1,404	$1,404
	KYEC Investment International Co., Ltd.	Note 2	Investing activities	5,292,315	5,292,315	164,923,636	100.00 %	15,260,076	3,167,785	3,167,785
	KYEC Technology Management Co., Ltd.	Note 3	Investing activities	251,579	251,579	7,500,000	100.00 %	971,202	201,483	201,483
	KYEC Japan. K.K.	Note 4	Manufacturing and sales of electronic parts and components, sales agent and business communication in Japan	102,735	102,735	1,899	89.83 %	74,264	8,170	7,339
	KYEC SINGAPORE PTE. LTD.	Note 5	Sales agent and business communication in Southeast Asia and Europe	1,830	1,830	78,000	100.00 %	13,525	1,444	1,444
	Fixwell Technology Corp.	Note 6	Manufacturing, selling and wholesale of electronics parts and components and repairing of electronics related products	28,000	28,000	2,800,000	23.33 %	65,389	57,497	13,063
	Wei Jiu Industrial Co., Ltd.	Note 7	CNC center processing machine, lathe machining processing design and various precision mechanical components manufacturing	10,200	10,200	1,020,000	34.00 %	34,338	18,768	6,382
KYEC Investment International Co., Ltd.	KYEC Microelectronics Co., Ltd.	Note 8	Investing activities	USD 116,155	USD 116,155	118,000,000	94.02 %	USD 465,459	USD 104,892	-
KYEC Technology Management Co., Ltd.	KYEC Microelectronics Co., Ltd.	Note 8	Investing activities	USD 7,500	USD 7,500	7,500,000	5.98 %	USD 29,623	USD 104,892	-

Note 1：101 Meto Drive., #540 San Jose, CA 95110 USA.
Note 2：Wickhams Cay II Road Town, Tortola, VG1110, British Virgin Islands.
Note 3：Portcullis TrustNet Chambers, P.O. Box 1225, Apia, Samoa.
Note 4：5F 2-3-8 Momochihama, Sawara-ku, Fukuoka 814-0001 Japan.
Note 5：750A Chai Chee Road, ESR BizPark @ Chai Chee Singapore (469001).
Note 6 ： No.380, Huashan Rd., Dadu Dist., Taichung City 432, Taiwan (R.O.C.)
Note 7 : No.8, Aly. 8, Ln. 48, Sec. 2, Nan’ai Rd., Xiangshan Dist., Hsinchu City 300, Taiwan (R.O.C.)

Note 8：P.O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KY1-1205 Cayman Islands.

131 -

Attachment 8

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA

For the year ended December 31, 2024

(Amounts in New Taiwan Thousand Dollars and United States Thousand Dollars, Unless Specified otherwise)

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2024	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of December 31, 2024	Net Income (Loss) of the Investee Company	Percentage of Ownership	Share of Profits/Losses (Note 5)	Carrying Amount as of December 31, 2024	Accumulated Inward Remittance of Earnings as of December 31, 2024
					Outflow	Inflow
King Long Technology (Suzhou) Ltd.	Note 1	$2,498,825 (CNY 547,941)	Indirectly investment in Mainland China through companies registered in a third region (Note 2)	$4,054,029 (USD 123,655)	$-	$-	$4,054,029 (USD 123,655)	$3,996,685 (USD 124,265)	92.16%	$3,681,657 (USD 114,468)	$16,551,522 (USD 504,850)	$-
Suzhou Zhengkuan Technology Ltd.	Note 3	$2,432,277 (CNY 533,348)	Indirectly investment in Mainland China through companies registered in a third region (Note 4)	$1,598,880 (USD 48,769)	$-	$-	$1,598,880 (USD 48,769)	$229,377 (USD 7,145)	92.16%	$211,262 (USD 6,580)	$1,278,790 (USD 39,005)	$-

Accumulated Investment in Mainland China as of December 31, 2024	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
(USD 172,424) $5,652,909	$5,652,909 (USD 172,424)	$25,977,763

Note 1: Sales and manufacturing of components of automotive data processing machinery, solid memory parts, monitoring burn-in machinery, and testing and assembly service of integarted circuits.

Note 2: The Company obtained the approval from the Investment Commission, MOEA, to invest indirectly in King Long Technology (Suzhou) via KYEC Microelectronics Co., Ltd. which is registered in Cayman Island. KYEC Microelectronics Co., Ltd. is invested by KYEC Investment International Co., Ltd. which is registered in BVI.

Note 3: Testing and assembly service of integrated circuits, sales and after service of processing of electronic components and materials, components of automotive data processing machinery, solid memory parts, and monitoring burn-in machinery. Note 4: Investment was through King Long Technology (Suzhou) Ltd.

Note 5: Recognition of investment gains (losses) was calculated based on the investee's audited financial statements.

132 -

AI assistant

KYEC — Annual Report 2024

52090_rns_2024-12-02_bf342aea-eae5-4f83-885f-f2b5ba626f82.pdf

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

REPRESENTATION LETTER

安永聯合會計師事務所

Independent Auditors’ Report

English Translation of A Report Originally Issued in Chinese

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Others

Notice to Readers

English Translation of Financial Statements Originally Issued in Chinese

KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of December 31, 2024 and 2023

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of December 31, 2024 and 2023

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2024 and 2023

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended December 31, 2024 and 2023

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the years ended December 31, 2024 and 2023

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Operation

2. Date and Procedures of Authorization of Financial Statements for Issue

3. Newly Issued or Revised Standards and Interpretations

(B) IFRS 17 “Insurance Contracts”

4. Summary of Material Accounting Policies

(1) Statement of Compliance

(2) Basis of Preparation

(3) Basis of Consolidation

Preparation principle of consolidated financial statement

English Translation of Financial Statements Originally Issued in Chinese

(4) Foreign currency transactions

(5) Translation of financial statements in foreign currency

(6) Current and non-current distinction

(7) Cash and cash equivalents

Financial assets measured at amortized cost

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Financial assets measured at fair value through other comprehensive income

Financial assets measured at fair value through profit or loss

B. Impairment of financial assets

C. Derecognition of financial assets

Classification between liabilities or equity

Equity instruments

Compound instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

E. Offsetting of financial instruments

(9) Derivative financial instruments

(10) Fair value measurement

(11) Inventories

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(12) Non-current assets held for sale and discontinued operations

(13) Investments accounted for using the equity method

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(14) Property, plant and equipment

(15) Leases

A. The Company as a lessee

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

B. The Company as a lessor

(16) Intangible assets

A. Research and development costs

B. Computer software

- (17) Impairment of non financial assets

English Translation of Financial Statements Originally Issued in Chinese KING YUAN ELECTRONICS CO., LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(18) Treasury shares

KYEC Annual Report 2024