LELON - Annual Report 2024 | FinancialReports.eu

2472

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023

Address: No. 147, Sec. 1, Guoguang Rd., Dali Dist., Taichung City 412024, Taiwan, R.O.C. Telephone: (+886) 04-2418-1856

The reader is advised that parent company only 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.

Independent Auditors’ Report Translated from Chinese

To Lelon Electronics Corp.

Opinion

We have audited the accompanying parent company only balance sheets of Lelon Electronics Corp. (the “Company”) as of 31 December 2024 and 2023, and the related parent company only statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2024 and 2023, and notes to the parent company only financial statements, including the summary of material accounting policies. (together “the parent company only financial statements”).

In our opinion, the parent company only financial statements referred to above present fairly, in all material respects, the financial position of the Company as of 31 December 2024 and 2023, and its financial performance and cash flows for the years ended 31 December 2024 and 2023, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and 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 Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. Based on our audits and the reports of the other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2024 parent company only financial statements. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impairment of accounts receivable

As of 31 December 2024, the gross accounts receivable and loss allowance by the Company amounted to NT$893,464 thousand and NT$16,658 thousand, respectively. The net accounts receivable accounted for 9% of total assets, which was considered material to the Company. The collection of accounts receivable is a key factor in the working capital management of the Company, the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, the measurement process includes grouping the receivables and determining the use of the related assumptions in the analysis, including appropriate account aging interval and consideration of the loss rate of each account aging interval. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit matter.

Our audit procedures included, but not limited to, understanding and testing the effectiveness of the internal control system for the client risk assessment and collection of accounts receivable established by the management level, understanding and testing the use of provision matrix, including assessing the reasonableness of the determination of various account aging intervals and sampling and examining the accuracy of underlying information through original document inspection. The procedures also involve testing statistical information related to loss rates calculated based on rolling ratios over one year, sampling appropriate transactions to recalculate the accuracy of aging based on transaction conditions, evaluating the reasonableness of collection for individual customers with significant overdue amounts or longer overdue periods, performing group assessment for nonindividually material customers, recalculating the reasonableness of the allowance for doubtful accounts amount based on the impairment loss policy, selecting samples to perform confirmations of accounts receivable and reviewing the collection status after the balance sheet date to assess their recoverability.

We also assessed the adequacy of disclosures related to accounts receivable in Notes 5 and 6 to the parent company only financial statements.

Valuation for inventories (Including inventories of the subsidiaries under the equity method)

The inventories of the Company and its subsidiaries accounted for using the equity method was significant to the financial statements. As the Company’s inventories are distributed in multiple warehouses and has a wide range of items, the difficulty of managing the status of inventory usage has increased. The products have a wide range of applications and they are phased out at different rates, so the slowing-moving and obsolete inventory allowance for impairment involved significant management judgments. We therefore determined this a key audit matter.

Our audit procedures included, but were not limited to, understanding and testing the effectiveness of the internal controls established by management for inventory, assessing the appropriateness of accounting policies regarding obsolete and slow-moving inventory, understanding management's plan for inventory count, selecting material inventory locations for on-site observations during physical inventory counts, testing the accuracy of inventory aging, analyzing changes in inventory aging, testing management's estimated net realizable value for inventory, including price testing and conducting analytical procedures on gross profit margins for each product, verifying the calculation of inventory unit costs, considering the expected demand and market value of inventory, understanding management's analysis and evaluation of obsolete and slow-moving inventory, including the possibility of inventory realization and estimation of net realizable value.

We also assessed the adequacy of disclosures related to inventory in Notes 5 and 6 to the parent company only financial statements.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error

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

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Company.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

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

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

Identify and assess the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
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 the Company.
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 the Company. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the parent company only financial statements, including the accompanying notes, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only 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 parent company only financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Chin-Yuan Tu

Wen-Chen Lo

Ernst & Young, Taiwan

13 March 2025

Notice to Readers

The accompanying parent company only 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 parent company only financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying parent company only financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, 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.

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese LELON ELECTRONICS CORP.

PARENT COMPANY ONLY BALANCE SHEETS

31 December 2024 and 2023

(Expressed in Thousand New Taiwan Dollars)

Assets	Notes	As of 31 December	As of 31 December
		2024	2023
Current assets Cash and cash equivalents Financial assets at fair value through profit or loss, current Notes receivable, net Accounts receivable, net Other receivables Other receivables-related parties Inventories Prepayment Other current assets Total current assets Non-current assets Investments accounted for under the equity method Property, plant and equipment Right-of-use assets Investment property Intangible assets Deferred tax assets Other non-current assets Total non-current assets Total assets	4, 6(1) 4 4,6(10) 4, 5, 6(2), 6(10) 4, 6(10) 4, 7 4, 5, 6(3) 7 4, 6(4) 4, 6(5) 4, 6(11) 4, 5, 8 4 4, 5, 6(15) 4,6(10)	$692,807 54,292 191 876,806 779 176,525 68,771 41,656 2	$663,045 27,751 41 771,862 315 84,327 79,121 33,381 1,314
		1,911,829	1,661,157
		7,962,212 298,471 - 25,563 3,573 18,613 619	6,550,010 309,044 338 25,911 4,555 29,087 625
		8,309,051	6,919,570
		$10,220,880	$8,580,727

(continued)

English Translation of Consolidated Financial Statements Originally Issued in Chinese LELON ELECTRONICS CORP.

PARENT COMPANY ONLY BALANCE SHEETS 31 December 2024 and 2023

(Expressed in Thousand New Taiwan Dollars)

Liabilities and Equity	Notes	As of 31	December
		2024	2023 $1,174,979 7,787 7,587 274 4,997 47,094 121,446 66,166 341 8,482 1,439,153 49,567 28,922 460 78,949 1,518,102 1,647,351 2,013,165 663,989 232,480 2,864,601 3,761,070 (331,627) (27,334) (358,961) 7,062,625 $8,580,727
Current liabilities Short-term loans Contract liabilities, current Notes payable Notes payable-related parties Accounts payable Accounts payable-related parties Other payables Current tax liabilities Lease current liabilities Other current liabilities Total current liabilities Non-current liabilities Deferred tax liabilities Net defined benefit obligation, noncurrent Guarantee deposits received Total non-current liabilities Total liabilities Equity attributable to the parent company Capital Common stock Additional Paid-in Capital Retained earnings Legal reserve Special reserve Unappropriated earnings Subtotal Other components of equity Exchange differences on translation of foreign operations Unrealized gains or losses measured at fair value through other comprehensive income Total other components of equity Total equity Total liabilities and equity	4, 6(6) 6(9) 7 7 7 4, 6(15) 4, 6(11) 4, 5, 6(15) 4, 5, 6(7) 6(8) 4, 6(4)	$1,270,064 14,522 15,936 534 8,353 138,439 604,991 34,126 - 11,651
		2,098,616
		53,986 20,492 460
		74,938
		2,173,554
		1,647,351 2,054,205 756,171 358,961 3,344,609
		4,459,741
		(86,222) (27,749)
		(113,971)
		8,047,326
		$10,220,880

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME For the years ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

Notes	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
4, 6(9), 7 6(3), 7 6(12) 6(10) 4,5, 6(13) 7 6(4) 4,5, 6(15) 4,6(14) 4, 6(16)	$2,853,077 (2,372,834)	$2,748,377 (2,284,942)
	480,243	463,435
	(1,383) 8,646	(5,535) 7,401
	487,506	465,301
	(162,676) (171,659) (54,945) 6,042 (383,238)	(146,231) (145,454) (54,879) 6,697 (339,867)
	104,268	125,434
	24,521 24,743 92,190 (24,279) 1,004,879	27,542 28,532 27,779 (15,757) 796,906
	1,122,054	865,002
	1,226,322 (70,836)	990,436 (68,103)
	1,155,486	922,333
	5,654 (415) (1,211) 245,405	(617) (394) 108 (126,087)
	249,433	(126,990)
	$1,404,919	$795,343
	$7.01	$5.60
	$6.98	$5.58

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Capital	Capital	Additional Paid-in Capital		Retained earnings		Other comp	onents of equity	Treasuryshares	Total Equity
Common Stock	Certificate of entitlement to new shares from convertible bond		Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) on Equity Instruments Measured at Fair Value Through Other Comprehensive Income
$1,635,432	$6,033	$1,994,346	$540,055 123,934	$310,915 (78,435)	$2,563,116 (123,934) (574,840) 78,435 922,333 (509)	$(205,540) (126,087)	$(26,940) (394)	$(343)	$6,817,074 - (574,840) - 922,333 (126,990)
-	-	-	-	-	921,824	(126,087)	(394)	-	795,343
12,019 (100)	(6,033)	18,819 (243) 243						343	24,805 243
$1,647,351	$ -	$2,013,165	$663,989	$232,480	$2,864,601	$(331,627)	$(27,334)	$ -	$7,062,625
$1,647,351	$ -	$2,013,165	$663,989 92,182	$232,480 126,481	$2,864,601 (92,182) (126,481) (461,258) 1,155,486 4,443	($331,627) 245,405	($27,334) (415)	$ -	$7,062,625 - - (461,258) 1,155,486 249,433
-	-	-	-	-	1,159,929	245,405	(415)	-	1,404,919
		41,040							- - 41,040
$1,647,351	$ -	$2,054,205	$756,171	$358,961	$3,344,609	$(86,222)	$(27,749)	$ -	$8,047,326

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

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended 31 December 2024 and 2023

(Expressed in Thousand New Taiwan Dollars)

2024 2023 Cash flows from operating activities: Net income before tax $1,226,322 $990,436 Adjustments to reconcile net income before tax to net cash provided by (used in) operating activities: Income and expense adjustments: Depreciation 12,343 16,631 Amortization 1,260 1,750 Expected credit gains (6,042) (6,697) Gain on financial assets/liabilities at fair value through loss or profit (4,128) (11,024) Interest expense 24,279 15,757 Interest income (24,521) (27,542) Dividend income (1,346) (1,097) Share of profit of subsidiaries, associates and joint ventures (1,004,879) (796,906) Gains on disposal and write-off of property, plant, and equipment - (1,597) Loss on disposal of investments - 2,752 Unrealized intercompany profit 1,383 5,535 Realized intercompany profit (8,646) (7,401) Gain (Loss) on inventory write-down and reversal of obsolescence slow-moving of invento (255) 1,038 Changes in operating assets and liabilities: (Increase) decrease in financial assets at fair value through profit or loss (22,413) 28,606 (Increase) decrease in notes receivable (150) 14,837 (Increase) decrease in accounts receivable (104,944) 205,385 (Increase) decrease in other receivables (92,662) 77,972 Decrease (increase) in inventories 10,605 (3,978) (Increase) decrease in prepayments (8,275) 3,708 Decrease in other current assets 1,312 3,547 Decrease in other non-current assets 6,048 6,930 Increase (decrease) in contract liabilities 6,735 (6,453) Increase (decrease) in notes payable 8,609 (28,186) Increase (decrease) in accounts payable 94,701 (90,972) Increase (decrease) in other payables 33,728 (34,535) Increase (decrease) in other current liabilities 3,169 (2,095) Decrease in net defined benefit liabilities non-current (2,377) (412) Cash generated from operations 149,856 355,989 Interest received 24,521 27,542 Dividends received 1,346 1,097 Interest paid (23,966) (15,443) Income tax paid (89,194) (112,619) Net cash provided by operating activities 62,563 256,566 For theyears ended 31 December	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
		$990,436 16,631 1,750 (6,697) (11,024) 15,757 (27,542) (1,097) (796,906) (1,597) 2,752 5,535 (7,401) 1,038 28,606 14,837 205,385 77,972 (3,978) 3,708 3,547 6,930 (6,453) (28,186) (90,972) (34,535) (2,095) (412)
	149,856	355,989
	24,521 1,346 (23,966) (89,194)	27,542 1,097 (15,443) (112,619)
	62,563	256,566

(Continued)

English Translation of Parent Company Only Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

For the years ended 31 December 2024 and 2023

(Expressed in Thousand New Taiwan Dollars)

Cash flows from investing activities: Acquisition of investment accounted for under equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Dividends received Net cash used in investing activities Cash flows from financing activities: Increase in short-term loans Decrease in short-term loans Increase in short-term notes and bills payable Decrease in short-term notes and bills payable Cash payments for bonds Increase in other payables Cash payments for the principal portion of the lease liability Cash dividends Net cash used in financing activities Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of period Cash and cash equivalents at the end of period	For theyears ended 31 December	For theyears ended 31 December
	2024	2023
	(160,164) (1,084) - (278) 45,735	(195,091) (557) 2,427 (314) 76,530
	(115,791)	(117,005)
	5,986,186 (5,891,101) - - - 449,504 (341) (461,258)	4,720,509 (4,465,128) 199,739 (199,739) (300) - (4,240) (574,840)
	82,990	(323,999)
	29,762 663,045	(184,438) 847,483
	$692,807	$663,045

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

LELON ELECTRONICS CORP.

Notes to Financial Statements

For the Years Ended 31 December 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

1. History and organization

LELON ELECTRONICS CORP. (The Company) was incorporated in February 1976. The main activities of the Company are manufacturing, assembling, selling electronic components&parts, and selling production machinery, and acting as an agent for the business operation investment and import and export trade of the preceding paragraph, etc. Place of operation and registration of the company is No. 147, Sec. 1, Guoguang Rd., Dali Dist., Taichung City 412023, Taiwan (R.O.C.)

In response to the diversified needs of future fundraising, and with the consent of the securities authority, the supplementary public offering procedures will be completed in July 1998.

The shares of the Company commenced trading on Taiwan’s Over-the-Counter Market in March 2000 and were listed on the Taiwan Stock Exchange in September 2001.

2. Date and procedures of authorization of financial statements for issue

The parent company only financial statements of the Company were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on 13 March 2025.

3. Newly issued or revised standards and interpretations

(1) Changes 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, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after 1 January 2024. Apart from the nature and impact of the new standard and amendment is described below, the remaining new standards and amendments had no material impact on the Company.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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

Items	Newly issued or revised standards and interpretations	Effective Date issued by IASB
a	Lack of Exchangeability – Amendments to IAS 21	1 January 2025

(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 1 January 2025 and have no material impact on the Company.

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

Items	Newly issued or revised standards and interpretations	Effective Date issued by IASB
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 orJoint Ventures	To be determined by IASB
b	IFRS 17“Insurance Contracts”	1 January 2023
c	IFRS 18 “Presentation and Disclosure in Financial Statements”	1 January 2027
d	Disclosure Initiative – Subsidiaries without Public Accountability:Disclosures (IFRS19)	1 January 2027
e	Amendments to the Classification and Measurement of Financial Instruments– Amendments toIFRS 9 andIFRS 7	1 January 2026
f	Annual Improvements to IFRS Accounting Standards – Volume 11	1 January 2026
g	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	1 January 2026

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(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

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 ventures. IFRS 10 requires full profit or loss recognition on the loss of control of the 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 gains 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.

The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2024 (from the original effective date of 1 January, 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 1 January 2024.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Company’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Company is still currently determining the potential impact of the new or amended standards and interpretations listed under (3), it is not practicable to estimate their impact on the Company at this point in time. The remaining new or amended standards and interpretations have no material impact on the Company.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

4. Summary of material accounting policies

(1) Statement of Compliance

The parent company only financial statements of the Company for the years ended 31 December 2024 and 2023 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”)

(2) Basis of Preparation

The Company prepared the parent company only financial statements in accordance with Article 21 of the Regulations, which provided that the profit or loss and other comprehensive income for the period presented in the parent company only financial statements shall be the same as the profit or loss and other comprehensive income attributable to stockholders of the parent presented in the consolidated financial statements for the period, and the total equity presented in the parent company only financial statements shall be the same as the equity attributable to the parent company presented in the consolidated financial statements. Therefore, the Company accounted for its investments in subsidiaries using equity method and, accordingly, made necessary adjustments.

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

(3) Foreign Currency Transactions

The Company’s parent company only financial statements are presented in its functional currency, New Taiwan Dollars (NT$). Items included in the financial statements 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 transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency closing rate of exchange 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 foreign currency are translated using the exchange rates as of the dates of the initial transactions.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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.

(4) Translation of Foreign Currency Financial Statements

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 exchange 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.

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 the non-controlling interests in that foreign operation. In partial disposal of an associate or joint 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(5) 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
(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
(d) The asset is cash or a 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 a current when:

(a) The Company expects to settle the liability in 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
(d) The Company does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.
(6) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid time deposits or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(7) 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 investments not at fair value through profit or loss, directly attributable transaction costs.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

A. Financial instruments: Recognition and Measurement

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

The Company classified 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
(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, accounts receivable, 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.

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:

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(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 asset 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 are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income 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:
(i) 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(ii) 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 investment are recognized in profit or loss unless the dividends clearly represents a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were 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.

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 asset 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 not reduce the carrying amount in the balance sheet.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

The Company measures expected credit loss 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
(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 accounts receivable 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.

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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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. 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 short-term profit-taking;
(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.

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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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, 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 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.

(8) Derivative 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 financial 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. The changes in 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(9) 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 the Company.

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 that market participants 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.

(10) 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 under weighted average cost method. Finished goods and – Cost of direct materials and labor and a proportion of manufacturing work in progress overheads based on normal operating capacity but excluding borrowing costs.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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.

(11) Investments accounted for under the equity method

According to Article 21 of the Regulation, the Company’s investment in subsidiaries was presented as “Investments accounted for using equity method” and made necessary adjustments. The profit or loss during the period and other comprehensive income presented in the parent company only financial statements shall be the same as the allocations of profit or loss during the period and of other comprehensive income attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis, and the shareholders’ equity presented in the parent company only financial statements shall be the same as the equity attributable to shareholders of the parent presented in the financial statements prepared on a consolidated basis.

The adjustment was considered the difference between investment in subsidiaries in consolidated financial statements according to IFRS 10 Consolidated financial statements and application of IFRS to different reporting entities, debit/credit “Investment accounted for using equity method”, “Share of profit or loss of subsidiaries, associates and joint ventures” or “Share of other comprehensive profit or loss of subsidiaries, associates and joint ventures” etc.

The Company’s investment in its associate 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.

Under the equity method, the investment in the associate or an investment in a joint venture is carried in the balance sheet at cost and adjusted thereafter for the post-acquisition change in the Group’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 Group 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 Group and the associate or joint venture are eliminated to the extent of the Group’s related interest in the associate or joint venture.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 affects 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 issues new stock, 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 additional paid-in capital and investment 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 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 impairment testing goodwill 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.

(12) 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 recognized such parts as individual assets with specific useful lives and depreciation, respectively. 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:

Items Buildings Machinery and equipment Transportation equipment Office equipment Other equipment Leasehold improvements	Useful Lives
	5`〜`51 years 2`〜`9 years 5`〜`6 years 3`〜`15 years 3`〜`20 years 3 years

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 assets’ residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate, and are treated as changes in accounting estimates.

(13) Investment property

The Company’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of dayto-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal Company that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations , investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

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

Item Buildings	Useful lives
	2`〜`45 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Company transfers properties to or from investment properties according to the actual use of the properties.

The Company transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(14) Leases

The Company assesses whether the contract is, or contains, a lease. A 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, 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, maximising the use of observable information.

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.

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:

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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

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-of-use asset is impaired and to account for any impairment loss identified.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Except for those leases that the Company accounted for as short-term leases or leases of lowvalue 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 statements comprehensive income.

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.

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 present 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.

(15) 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 of 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 which fail to meet the recognition criteria are not capitalized and the expenditures are reflected in profit or loss in the period incurred.

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

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each fiscal 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 is 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 summary of the policies applied to the Company’s intangible assets is as follows:

	Software	Other intangible assets
Useful lives	3`〜`5 years	5`〜`15 years
Amortization method used	Amortized on a straight-	Amortized on a straight-line
	line basis over the	basis over the estimated
	estimated useful life	useful life
Internally generated or acquired	Acquired	Acquired

(16) 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 cashgenerating 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 cash-generating 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.

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.

(17) Provisions

Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

(18) Treasury shares

The Company acquires shares, it is recognized at acquisition cost and reduced in equity. The spread of treasury stock trading is recognized under equity.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(19) Revenue recognition

The Company’s revenue arising from contracts with customers are primarily related to sale of goods. The accounting policies are explained as follows:

Sale of goods

The Company manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Company are sewing machines and vacuum cleaners and spare parts and revenue is recognized based on the consideration stated in the contract.

The credit period of the Company’s sale of goods is from 30 to 150 days. For most of the contracts, when the Company transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as accounts receivable. The Company usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Company has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component has arisen

Rendering of services

The rendering of services provided by the company are mainly based on the provision of management services, which is measured according to the estimated percentage of the cost incurred in each individual contract. When the outcome of the contract cannot be reasonably estimated, revenue is recognized only to the extent that the expenses incurred are expected to be recoverable.

(20) Borrowing cost

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 they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(21) Post-employment benefits

All regular employees of the Company 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 the Company. Therefore fund assets are not included in the Company’s financial statements.

For the defined contribution plan, the Company 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.

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

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.

Pension cost for an interim period is calculated on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior financial year, adjusted and disclosed for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

(22) 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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.

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

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.

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

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, and the carry forward of unused tax credits and unused tax losses can be utilized, except:

i. 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 differences.
ii. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interest in joint arrangements, 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 parent company only 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 assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

(1) Judgement

In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements:

(a) Investment properties

The Company has some property are partly held to earn rentals or for capital increase and partly for own use. If each part can be sold separately, it shall be dealt with as investment property and property, plant and equipment respectively.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(b) Operating lease commitment – Company as the lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

The Company does not have majority of the voting rights in certain invested companies. However, after taking into consideration factors such as absolute size of the Company’s holding, relative size of the other shareholdings, how widely spread are the remaining shareholders, contractual arrangements between shareholders, potential voting rights, etc., the Company reached the conclusion that it has de facto control over these invested companies.

(2) 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.

(a) Fair value of 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) Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of the future salary etc. Please refer to Note 6 for more details.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(c) Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group company's domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

(d) Accounts receivable estimation of impairment loss

The Group estimates the impairment loss of accounts receivable at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that expects to receive (evaluate forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Where the actual future cash flows are lower than expected, a material impairment loss may arise. Please refer to Note 6 for more details.

(e) Inventories

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

6. Contents of significant accounts

(1) Cash and cash equivalents

Cash and cash equivalents
Cash on hand Demand deposits Time Deposits (within 3 months) Total	As of 31 December
	2024 $330 321,950 370,527 $692,807	2023
		$217 254,493 408,335
		$663,045

Cash and cash equivalents were not pledged.

(2) Accounts receivable, net

Accounts receivable, net
Accounts receivable - non related parties Less: loss allowance Accounts receivable, net	As of 31 December
	2024 $893,464 (16,658) $876,806	2023
		$788,520 (16,658)
		$771,862

Accounts receivable are generally on 30-150 day terms. The total carrying amount are NT$893,464 thousand and NT788,520 thousand as of 31 December 2024 and 2023. Please refer to Note 6(10) for more details on loss allowance of accounts receivable for the years ended 31 December 2024 and 2023. Please refer to Note 12 for more details on credit risk management.

Accounts receivable, net were not pledged.

(3) Inventories

Work in progress Finished goods Total	As of 31 December	As of 31 December
	2024 $3,287 65,484 $68,771	2023
		$7,568 71,553
		$79,121

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

The inventory cost recognized as operating costs for the years ended 31 December 2024 and 2023 were NT$2,372,834 thousand and NT$2,284,942 thousand, respectively. The gain from price recovery of inventories related to cost of goods sold were NT$255 thousand and the price reduction of inventories related to cost of goods sold were NT$1,038 thousand.

Gain from price recovery of inventories was because the net realizable value of inventories was not lower the cost anymore and the net realized value recovery for the year ended 31 December 2024.

No inventories were pledged.

(4) Investments accounted for under the equity method

The following table lists the investments accounted for using the equity method of the Company:

As of 31 December	As of 31 December	As of 31 December
2024 Carrying amount Percentage of ownership $6,451,493 89.47% 1,137,706 29.30% 373,013 100.00% $7,962,212	2023
Carrying amount $6,451,493 1,137,706 373,013 $7,962,212	Carrying amount $5,387,920 968,723 193,367 $6,550,010	Percentage of ownership
		89.47% 30.81% 100.00%

The Company's investments accounted for using the equity method were not pledged.

(a) The Company’s investment in “LIRO ELECTRONICS CO., LTD” on 1 January 2023 was NT$818,824 thousand (US$ 26,465,137), with a shareholding ratio of 89.47%. As of 31 December 2024 and 2023, the investment amount was both NT$818,824 thousand (US$ 26,465,137), and the shareholding ratio was 89.47%, and the equity method was adopted for subsequent evaluations.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(b) The Company’s investment in “LITON TECHNOLOGY CORP.” on 1 January 2023 was NT$468,471 thousand, holding 43,731,598 shares, and the shareholding ratio was 30.82%. LITON TECHNOLOGY CORP. purchased treasury shares and transferred to employees upon approval by the Board of Directors on 22 March 2023 and the shareholding ratio was changed to 30.81%.

During the year ended 31 December 2024, LITON TECHNOLOGY CORP. converted its corporate bonds, resulting in a decrease in the Company’s shareholding percentage from 30.81% to 29.30%.

(c) On 18 August 2023, the Company, resolved by the Board of Directors to approve an investment in Thailand, established the subsidiary LELON ELECTRONICS (Thailand) CO., LTD., with an investment in the amount of NT$195,091 thousand (THB 215,509 thousand), holding a 100% shareholding ratio.

During the year ended 31 December 2024, the Company increased its investment by NT$160,164 thousand (THB176,450 thousand). As of 31 December 2024 and 2023, the carrying amounts of the investments were NT$355,255 thousand (THB391,950 thousand) and NT$195,091 thousand (THB215,509 thousand), respectively. The Company held 100% ownership interest in both investments. The investments are subsequently measured using the equity method.

(d) For the years ended 31 December 2024 and 2023, the Company recognized share of profit or loss of associates and joint ventures and exchange differences on translation of foreign operations with report of independent accountants, the details as follows:

For the year ended 31 December

	2024		2023	2023
		Exchange
	Share of profit or	differences on		Exchange
	loss of associates	translation of	Share of profit or	differences on
	and joint	foreign	loss of associates	translation of
Investee companies	ventures	operations	and joint ventures	foreign operations
LIRO ELECTRONICS CO., LTD.	$865,663	$191,062	$706,131	$(105,864)
LITON TECHNOLOGY CORP.	141,000	33,077	90,870	(18,594)
LELON ELECTRONICS (Thailand)
CO., LTD.	(1,784)	21,266	(95)	(1,629)
Total	$1,004,879	$245,405	$796,906	$(126,087)

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(5) Property, plant and equipment

Owner occupied property, plant and equipment

As of 31 December	As of 31 December
2024 $298,471	2023
	$309,044

(a) Owner occupied property, plant and equipment

Transportation equipment	Lease assets	Total
$2,372 800 -	$544 - -	$439,858 1,084 (720)
$3,172	$544	$440,222
$1,807 320 -	$544 - -	$130,814 11,657 (720)
$2,127	$544	$141,751
$2,372 - -	$544 - -	$444,052 557 (4,751)
$2,372	$544	$439,858
$1,543 264 -	$544 - -	$122,748 11,987 (3,921)
$1,807	$544	$130,814
$1,045	$-	$298,471
$565	$-	$309,044

(b) Property, plant and equipment was not pledged.

(c) There was no capitalization of interest arising from the purchase of property, plant and equipment by the Company in 2024 and 2023.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(d) Components of building that have different useful lives are main building structure, factory decoration, hydroelectric engineering and central air-condition wiring engineering, which are depreciated over 51 years, 21 years, 16 years and 9 years, respectively.
(6) Short-term borrowings

Unsecured bank loans Interest rates applied	As of 31 December	As of 31 December
	2024 2023 $1,270,064 $1,174,979 For theyears ended 31 December	2023
		$1,174,979
	2024 0.73%~1.85%	2023
		0.50%~1.82%

The Company’s unused short-term lines of credits amounted to $1,634,814 thousand and $1,506,887 thousand as of 31 December 2024 and 2023, respectively.

(7) Post-employment benefits

Defined contribution plan

The Company adopts a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the company will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The company have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Pension expenses under the defined contribution plan for the years ended 31 December 2024 and 2023 were NT$4,685 thousand and NT$4,589 thousand, respectively.

Defined benefits 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 assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions calculated for workers retiring in the same year, the company and its domestic subsidiaries will make up the difference in one appropriation before the end of March the following year.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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 discretionary accounts, 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 to risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year 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. The Company expects to contribute $905 thousand to its defined benefit plan during the 12 months as of 31 December 2024.

The weighted average durations of the Company’s defined benefit plan obligation as of 31 December 2024 and 31 December 2023 were 6 years and 10 years, respectively.

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

Current period service costs Net interest on the net defined benefit liabilities Total	For the years ended 31 December	For the years ended 31 December
	2024	2023
	$35 353	$98 383
	$388	$481

Reconciliations of liabilities (assets) of the defined benefit obligation and plan assets at fair value are as follows:

are as follows:
Defined benefit obligation Plan assets at fair value Other non-current liabilities - accrued pension liabilities recognized on the balance sheets		As of
	31 December 2024	31 December 2023	1 January 2023
	$84,722 (64,230)	$90,225 (61,303)	$90,302 (61,506)
	$20,492	$28,922	$28,796

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

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

Defined benefit obligation	Plan assets at fairvalue	Net defined benefit liability (asset)
$90,302 98 1,201	$(61,506) - (818)	$28,796 98 383
91,601 1,023 (262) -	(62,324) - - (222)	29,277 1,023 (262) (222)
92,362	(62,546)	29,816
- (2,137)	(894) 2,137	(894) -
$90,225 35 1,101	$(61,303) - (748)	$28,922 35 353
91,361 (2,606) 2,062 -	(62,051) - - (5,509)	29,310 (2,606) 2,062 (5,509)
90,817 - (6,095)	(67,560) (2,765) 6,095	23,257 (2,765) -
$84,722	$(64,230)	$20,492

The principal assumptions used in determining the Company’s defined benefit plan are shown below:

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Discount rate Expected rate of salary increases	As of 31 December	As of 31 December
	2024 1.55% 2.00%	2023
		1.22% 2.00%

Sensitivity analysis for significant assumption is shown below:

Effect onthe defined benefit obligation	Effect onthe defined benefit obligation	Effect onthe defined benefit obligation	Effect onthe defined benefit obligation
2024		2023
Increase $- 3,997 3,959 -	Decrease	Increase	Decrease
	$(1,034) - - (1,034)	$- 4,843 4,781 -	$(4,020) - - (4,018)

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 analyses compared to the previous period.

(8) Equities

(a) Common stock

The Company’s authorized capital was NT$3,600,000 thousand as of 1 January 2023. The issued capital was NT$1,635,432 thousand in a total of 163,543 thousand shares. Each share has one voting right and a right to receive dividends.

The investors have requested to convert the Company’s convertible bonds into common stocks in the amount of NT$12,455 thousand in a total of 1,246 thousand shares since 31 December 2022 and 643 thousand shares had completed the registration process as of 31 December 2022 and 603 thousand shares did not complete the registration process. As the registration process has not been completed, the accumulated book value of certificate of entitlement to new shares from convertible bond amounted to NT$6,033 thousand in a total of 603 thousand shares as of 31 January 2023.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

On 10 May 2023, the Board of Directors resolved to adopt the same date as the capital reduction base date to cancel 10 thousand treasury shares. The capital reduction and amendment registration were approved by the competent authority and completed on 13 June 2023.

The convertible bonds issued by the Company requested for conversion into ordinary shares of the Company in 2023, totaling NT$5,986 thousand. The number of shares converted amounted to 599 thousand shares, with the change in registration completed on 31 December 2023.

The Company’s authorized capital was both NT$3,600,000 thousand as of 31 December 2024 and 2023. The issued capital was both NT$1,647,351 thousand in a total of 164,735 thousand shares. Each share has one voting right and a right to receive dividends.

(b) Capital surplus

Additional paid - in capital Treasury share transactions Difference between consideration received and carrying amount of interests in subsidiaries acquired Increase through changes in ownership interests in subsidiaries Expired Share options Total	As of 31 December	As of 31 December
	2024 $1,793,730 20,704 10,540 217,453 11,778 $2,054,205	2023
		$1,793,730 20,704 10,540 176,413 11,778
		$2,013,165

According to the Company Act, the capital reserve shall not be used except for making good the deficit of the Company. When a company incurs no loss, it may distribute the capital reserves related to the income derived from the issuance of new shares at a premium or income from endowments received by the company. The distribution could be made either in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

LELON ELECTRONICS CORP. Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(c) Treasury shares

As of 31 December 2024: None.

Units: thousand/share As of 31 December 2023

Financial Statement Account	Beginning	Increase	Decrease	Ending
Treasury shares	10	-	(10)	-

(d) Retained earnings and dividend policy

According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

a. Payment of all taxes and dues;
b. Offset prior years’ operation losses;
c. Set aside 10% as legal reserve;
d. Set aside or reverse special reserve in accordance with law and regulations;
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 longterm financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders’ meeting. For the payment of dividend. The cash dividend ratio is not less than 10% of the total dividend. If the cash dividend per share is less than NT$0.5, the board of directors is authorized to draft a proposal, and the shareholders' meeting decides to pay cash dividends or stock dividends

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve 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.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

When the Company distributing distributable earnings, it shall set aside to special reserve, 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 for the adoption of IFRS, 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 from the special reserve.

The FSC on 31 March 2021 issued Order No. Financial-Supervisory- Securities-Corporate1090150022, 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 to shareholders’ equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

The Company did not reverse any special reserve as a result of use, disposal or reclassification of related assets during the periods ended 31 December 2024 and 2023.

Details of the 2024 and 2023 earnings distribution and dividends per share as approved and resolved by the Board of Directors’ meeting and shareholders’ meeting on 13 March 2025 and 26 June 2024, respectively, are as follows:

Legal reserve Special reserve (reversal)/addition Common stock`－`cash dividend	Appropriation of earnings	Appropriation of earnings	Dividendper share(in NT$)	Dividendper share(in NT$)
	2024	2023	2024	2023 $2.80
	$115,993 (245,000) 510,679	$92,182 126,481 461,258	$3.10

Please refer to Note 6(12) for details on employees’ compensation and remuneration to directors and supervisors.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(9) Operating revenues

erating revenues
Revenue from customer contracts Sale of goods Other income Total	For theyears ended 31 December
	2024 $2,793,733 59,344 $2,853,077	2023
		$2,714,842 33,535
		$2,748,377

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

(1) Contract balances

Contract liabilities – current

Contract liabilities – current
Sales of goods		As of
	31 December 2024 $14,522	31 December 2023 $7,787	1 January 2023 $14,240

The significant changes in the balance of contract liabilities of the company during the years ended 31 December 2024 and 2023 are as follows:

The Opening balance transferred to revenue Increase in receipts in advance during the period (excluding the amount incurred and transferred to revenue during the period) Changes in this period	For the years ended 31 December	For the years ended 31 December
	2024	2023
	$(940) 7,675	$(7,424) 971
	$6,735	$(6,453)

(2) Transaction price allocated to unsatisfied performance obligations

None.

(3) Assets recognized from costs to fulfil a contract

None.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(10) Expected credit losses (gains)

Operating expenses – Expected credit (gains) losses Long-terms receivables	For the years ended 31 December	For the years ended 31 December
	2024 $(6,042)	2023
		$(6,697)

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

The Company measures the loss allowance of accounts receivable (including note receivables, accounts receivable, other receivables and long-term receivables (which was recognized as other non-current assets)) at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as of 31 December 2024 and 2023 are as follows:

As of 31 December 2024

Group 1: Some counterparties were assessed individually. The amount of long-term receivables was NT$36,080 thousand recognized as other non-current assets, which was all overdue, and the loss allowance was NT$36,080 thousand. As of the financial reporting date, the contracted amount of long-term receivables that have been write-off and with recourse amounted to NT$36,080 thousand.

Group 2: The loss allowance is measured using expected credit losses as follows:

		Overdue	Overdue
31-90 days	91-180 days	181-270 days $49 60-70% (34) $15	271-365 days $- 100% - $-	>=366 days $18,563 100% (18,563) $-	Total
$6,611 1-5% (266) $6,345	$620 10-20% (103) $517				$1,073,267 (18,966)
					$1,054,301

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

As of 31 December 2023

Group 1: Some counterparties were assessed individually. The amount of long-term receivables was NT$42,122 thousand recognized as other non-current assets, which was all overdue, and the loss allowance was NT$42,122 thousand. As of the financial reporting date, the contracted amount of long-term receivables that have been write-off and with recourse amounted to NT$42,122 thousand.

Group 2: The loss allowance is measured using expected credit losses as follows:

Not yet due (Note) $855,117 -%			Overdue	Overdue
	31-90 days $1,452 10-20% (181) $1,271	91-180 days $190 10-20% (33) $157	181-270 days $- -% - $-	271-365 days $25 100% (25) $-	>=366 days $18,727 100% (18,727) $-	Total
						$875,511 (18,966)
- $855,117
						$856,545

Note: The Company’s note receivables are not overdue.

The movement in the provision for impairment of note receivables, accounts receivable, other receivables and long-term receivables during the 31 December 2024 and 2023 are as follows:

Accounts receivable	Other receivables	Long-terms receivables	Total
$16,658 -	$2,308 -	$42,122 (6,042)	$61,088 (6,042)
$16,658	$2,308	$36,080	$55,046
$16,658 -	$2,308 -	$48,819 (6,697)	$67,785 (6,697)
$16,658	$2,308	$42,122	$61,088

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(11) Lease

(1) The Company as a lessee

The Company leases land and buildings terms range from 2 to 3 years.

The Company’s leases effect on the financial position, financial performance and cash flows are as follows:

A. Amounts recognized in the balance sheet

(a) Right-of-use assets

The carrying amount of right-of-use assets

Buildings	As of 31 December	As of 31 December
	2024	2023
	$-	$338

During the year ended 31 December 2024 and 2023, the Company’s no additions to right-of-use assets.

(b)Lease liabilities

Lease liabilities Current Non-current Total	As of 31 December	As of 31 December
	2024	2023 $341 - $341
	$- -
	$-

Please refer to Note 6, 13(3) for the interest on lease liabilities recognized during the years ended 31 December 2024 and refer to Note 12(5) liquidity risk management for the maturity analysis for lease liabilities as of 31 December 2024.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

B. Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

Buildings	Forthe years ended 31 December	Forthe years ended 31 December
	2024 $338	2023
		$4,215

C. Income and costs relating to leasing activities

The expenses relating to short-term leases	For the years ended 31 December	For the years ended 31 December
	2024 $4,072	2023 $273

D. Cash outflow related to lessee and lease activity

During the year ended 31 December 2024 and 2023, the Company’s total cash outflows for leases amounting to NT$4,413 thousand and NT$4,530 thousand.

(2) The Company as a lessor

Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

Lease income recognized under operating leases Income relating to fixed lease payments	For theyears ended 31 December 2024 2023 $2,750 $2,636
	2024
	$2,750

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(12) Summary statement of employee benefits, depreciation and amortization expenses by function for the years ended 31 December 2024 and 2023:

Function Nature		Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December	Forthe years ended 31 December
		2024			2023
	Operating costs	Operating expenses	Total	Operating costs	Operating expenses	Total
Employee benefits
Salaries & wages	$-	$186,476	$186,476	$-	$158,237	$158,237
Laborandhealth insurance	-	11,088	11,088	-	11,867	11,867
Pension	-	5,073	5,073	-	5,070	5,070
Directors’remuneration	-	23,573	23,573	-	17,508	17,508
Other	-	8,357	8,357	-	7,682	7,682
Depreciation	-	12,343	12,343	-	16,631	16,631
Amortization	-	1,260	1,260	-	1,750	1,750

For the years ended 31 December 2024 and 2023, the number of employees of the Company were 118 and 125; the number of directors who were not concurrently employees were both 8.

For the years ended 31 December 2024 and 2023, the average of employees benefits expense of the company were NT$1,918 thousand and NT$1,563 thousand, respectively.

For the years ended 31 December 2024 and 2023, the average of employees salaries of the company were NT$1,695 thousand and NT$1,352 thousand, respectively. The company’s average salary expense adjustment for the year ended 31 December 2024 increased by 25%.

The Company’s policy for compensation of directors, managers and employees is as follows:

The Company set the policy for directors and employees’ compensation in the company’s Articles of Incorporation and established the Remuneration Committee to evaluate and monitor the company’s remuneration system for its directors and executive officers. The Company shall assess the performance of directors and executive officers according to the Rules for Performance Assessment of the Board of Directors and the Performance Appraisal for employees of the company, in order to determine their compensation. An adequate compensation scheme will be calculated by referencing the company’s operation results, future risks, corporate strategies, industry trends and also individual contribution.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

The Company developed a comprehensive employee welfare system in accordance with laws, government regulations and regional needs to provide employees with competitive salary and welfare conditions. Employees’ compensation includes monthly salary, bonus based on operation performance, and the compensation based on the company’s earnings performance as provided in the Articles of Incorporation. The Company conducts a performance evaluation of all employees every year to understand their job performance and uses such information as a reference for promotions, training and compensation distribution.

According to the Articles of Incorporation, no lower than 2% of profit of the current year is distributable as employees’ compensation and no higher than 4% of profit of the current year is distributable as remuneration to directors and supervisors. However, the company's accumulated losses shall have been covered. The company 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 and supervisors can be obtained from the “Market Observation Post System” on the website of the TWSE.

Based on profit of current year, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors recognized as employee benefits expense. If the Board of Directors resolved to distribute employees’ compensation in the form of stocks, the number of stocks distributed was calculated based on the closing price one day earlier than the date of resolution. The difference between the estimates and the figures resolved at shareholders’ meeting will be recognized in profit or loss of the subsequent year. The details of employees’ compensation and remuneration to directors and supervisors for the years ended 31 December 2024 and 2023 are as follows:

Employees’ compensation Remuneration to directors and supervisors	For the years ended 31 December	For the years ended 31 December
	2024	2023 $35,014 17,253
	$47,505 23,363

Based on the profit for the year ended 31 December 2024, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended 31 December 2024 to be 3.66% and 1.80% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended 31 December 2024 amount to NT$47,505 thousand and NT$23,363 thousand respectively, recognized as employee benefits expense. Based on the profit for the year ended 31 December 2023, the Company estimated the amounts of the employees’ compensation and remuneration to directors and supervisors for the year ended 31 December 2023 to be 3.45% and 1.70% of profit, respectively. The employees’ compensation and remuneration to directors and supervisors for the year ended 31 December 2023 amount to NT$35,014 thousand and NT$17,253 thousand respectively, recognized as employee benefits expense.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

A resolution was passed at the Board of Directors meeting held on 13 March 2025 to distribute NT$49,293 thousand and NT$23,349 thousand in cash as employee compensation and directors’ remuneration, respectively. The difference between the estimated and actual amounts approved by the Board of Directors was NT$1,788 thousand and NT$14 thousand, respectively, are recognized in profit or loss of the subsequent year in 2025.

A resolution was passed at the Board of Directors meeting held on 14 March 2024 to distribute NT$38,163 thousand and NT$18,769 thousand in cash as employees’ compensation and remuneration to directors and supervisors of 2024, respectively. The differences between the estimated amount and the actual distribution of the employee compensation and remuneration to directors and supervisors for the year ended 31 December 2024 amount to NT$3,149 thousand and NT$1,516 thousand respectively, are recognized in profit or loss of the subsequent year in 2024.

(13) Non-operating income and expenses

(a)Other income

Rental revenue Dividend income Others Total	For the years ended 31 December 2024 2023 $2,750 $2,636 1,346 1,097 20,647 24,799 $24,743 $28,532	For the years ended 31 December 2024 2023 $2,750 $2,636 1,346 1,097 20,647 24,799 $24,743 $28,532
		$2,636 1,097 24,799 $28,532
	$24,743

(b)Other gains and losses

Foreign exchange gains, net Gains on financial assets at fair value through loss or profit Losses on disposal of investments Disposals Property, plant and equipment Others Total	For the years ended 31 December 2024 2023	For the years ended 31 December 2024 2023
	2024
	$88,070 4,128 - - (8)	$17,917 11,024 (2,752) 1,597 (7)
	$92,190	$27,779

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(c)Financial costs

Interest on borrowings from bank Interests on bonds payable Interest on lease liabilities Total	For theyears ended 31 December 2024 2023 $(24,279) $(15,636) - (104) - (17) $(24,279) $(15,757)	For theyears ended 31 December 2024 2023 $(24,279) $(15,636) - (104) - (17) $(24,279) $(15,757)
		$(15,636) (104) (17)
	$(24,279)	$(15,757)

(14) Components of other comprehensive income

A. For the year ended 31 December 2024

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instruments 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 a foreign operation Total of other comprehensive income	Arising during theperiod $5,654 (415) 245,405 $250,644	Current reclassificati on adjustment $- - - $-	Other comprehensive income, net of tax $5,654 (415) 245,405 $250,644	Income tax effect	Other comprehensive income, net of tax $4,443 (415) 245,405
				$(1,211) - - $(1,211)
					$249,433

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

B. For the year ended 31 December 2023

Not to be reclassified to profit or loss in subsequent periods: Remeasurements of defined benefit plans Unrealized gains (losses) from equity instruments 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 a foreign operation Total of other comprehensive income	Arising during theperiod $(617) (394) (126,087) $(127,098)	Current reclassificati on adjustment $- - - $-	Other comprehensive income, net of tax $(617) (394) (126,087) $(127,098)	Income tax effect	Other comprehensive income, net of tax $(509) (394) (126,087)
				$108 - -
				$108	$(126,990)

(15) Income tax

The major components of income tax expenses for the years ended 31 December 2024 and 2023 are as follows:

A. Income tax expense recorded in profit or loss

Current income tax expense: Current income tax charge Adjustments in respect of current income tax of prior periods Deferred tax expense: Deferred tax income (expense) related to origination and reversal of temporary differences Total income tax expense	For the years ended 31 December	For the years ended 31 December
	2024	2023
	$40,154 17,000 13,682	$72,143 1,413 (5,453)
	$70,836	$68,103

B. Income tax relating to components of other comprehensive income

Deferred tax income (expense): Remeasurements of defined benefit plans	For the years ended 31 December	For the years ended 31 December
	2024	2023
	$(1,211)	$108

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

C.A reconciliation between tax expense and the product of accounting profit multiplied by the applicable tax rate is as follows:

pplicable tax rate is as follows:
Accounting income before tax from continuing operations Tax effect of different tax rates for entities in other tax regions Corporate income surtax on undistributed retained earnings Adjustments in respect of current income tax of prior periods Tax effect of expenses not deductible for tax purposes Total income tax expense recognized in profit or loss	For the years ended 31 December
	2024	2023
	$1,226,322	$990,436
	$245,264 12,095 17,000 (203,523)	$198,087 30,950 1,413 (162,347)
	$70,836	$68,103

D. Significant components of deferred income tax assets and liabilities are as follows:
For the year ended 31 December 2024

Temporary differences Unrealized foreign currency exchange gain or loss Loss from price reduction of inventories Loss allowance Investments accounted for using the equity method-LIRO Difference between consideration received and carrying amount of interests in subsidiaries disposed of Defined benefit Liability Remeasurements of defined benefit plans Reserve for land appreciation tax Exchange differences resulting from translating the financial statements of a foreign operation Deferred tax benefit Net deferred tax liabilities Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $7,760 370 14,872 (27,147) (2,230) 129 5,956 (11,470) (8,720) $(20,480) $29,087 $(49,567)	Recognized in profit or loss $(11,832) (51) (1,323) - - (476) - - - $(13,682)	Recognized in other comprehensiv e income	Balance as of 31 December
			$- - - - - - (1,211) - - $(1,211)	$(4,072) 319 13,549 (27,147) (2,230) (347) 4,745 (11,470) (8,720)
				$(35,373)
				$18,613
				$(53,986)

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

2. For the year ended 31 December 2023

Temporary differences Unrealized foreign currency exchange gain or loss Loss from price reduction of inventories Loss allowance Investments accounted for using the equity method-LIRO Difference between consideration received and carrying amount of interests in subsidiaries disposed of Defined benefit Liability Remeasurements of defined benefit plans Reserve for land appreciation tax Exchange differences resulting from translating the financial statements of a foreign operation Deferred tax benefit Net deferred tax liabilities Reflected in balance sheet as follows: Deferred tax assets Deferred tax liabilities	Balance as of 1 January $1,512 163 15,792 (27,147) (2,230) 211 5,848 (11,470) (8,720) $(26,041) $23,526 $(49,567)	Recognized in profit or loss $6,248 207 (920) - - (82) - - - $5,453	Recognized in other comprehensiv e income	Balance as of 31 December
			$- - - - - - 108 - - $108	$7,760 370 14,872 (27,147) (2,230) 129 5,956 (11,470) (8,720)
				$(20,480) $29,087
				$(49,567)

E. Unrecognized deferred tax assets

As of 31 December 2024 and 2023, the Company is not probable to has taxable income in the future so did not recognized deferred tax assets amounted to NT$17,811 thousand and NT$62,641 thousand, respectively.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

F. Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Company did not recognize the relevant deferred income tax liabilities for the income tax payable that may arise when the undistributed surplus of a foreign subsidiary is remitted back. The Group has decided not to distribute the undistributed earnings of its subsidiaries in the foreseeable future. As of 31 December 2024 and 2023, the amount not recognized as deferred income tax liabilities were NT$733,284 thousand and NT$559,788 thousand, respectively.

G. The assessment of income tax returns: The tax authorities have assessed income tax returns of the Company through 2022.

(16) Earnings per share

Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year

Diluted earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting for interest on the convertible preference shares) 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.

(a) Basic earnings per share

Basic earnings per share
Profit attributable to ordinary equity holders of the Company (in thousand NT$) Weighted average number of ordinary shares outstanding for basic earnings per share (in thousand shares) Basic earnings per share (in NT$)	For the years ended 31 December
	2024 $1,155,486 164,735 $7.01	2023
		$922,333
		164,584
		$5.60

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(b) Diluted earnings per share

Diluted earnings per share
Profit attributable to ordinary equity holders of the Company (in thousand NT$) Interest expense from convertible bonds Profit attributable to ordinary equity holders of the Company after dilution Weighted average number of ordinary shares outstanding for basic earnings per share (in thousand shares) Effect of dilution: Employee bonus－stock (in thousand shares) Weighted average number of ordinary shares outstanding after dilution (in thousand shares) Diluted earnings per share (NT$)	For the years ended 31 December
	2024	2023
	$1,155,486 - $1,155,486 164,735 899 165,634 $6.98	$922,333 83
		$922,416
		164,584 655
		165,239
		$5.58

There were no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the date of completion of the financial statements.

7. Related party transactions

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

(1) Name and nature of relationship of the related parties

Name of the related parties Nature of relationship of the related parties LIRO ELECTRONICS CO., LTD. Subsidiary Lelon Electronics (HUIZHOU) Corp. Sub-Subsidiary Lelon Electronics (SUZHOU) Corp. Sub-Subsidiary Lelon Electronics (SUZHOU) Corp. Sub-Subsidiary Lelon International Industrial Limited Sub-Subsidiary Lifu Machinery Industrial Co., Ltd The chairman of the company is a second-degree relative to the chairman of the Company C.M Wu and 10 others Directors and Deputy General Manager of the Company

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(2) Significant transactions with related parties

(a) Sales

Sales
Lelon Electronics Technology (SUZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (SUZHOU) Corp. Total	For theyears ended 31 December
	2024 $19,526 9,323 - $28,849	2023
		$640 8,745 14,331
		$23,716

The sales price to the above related parties was determined through mutual agreement based on the market rates. The collection period to related parties was next month-end 90~180 days. The outstanding balance at 31 December 2024 and 2023 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

(b) Purchase

Purchase
For theyears ended 31 December 2024 2023 Lelon International Industrial Limited $2,340,882 $2,272,596 Lelon Electronics (HUIZHOU) Corp. 28 - Total $2,340,910 $2,272,596 Transaction Lelon International Industrial Limited Prepayment of one month's payment for goods or mutual offset of creditor's rights and debts Lelon Electronics (HUIZHOU) Corp. Prepayment of one month's payment for goods or mutual offset of creditor's rights and debts	For theyears ended 31 December
	2024 $2,340,882 28 $2,340,910 Transaction	2023
		$2,272,596 -
		$2,272,596

(c) Other receivables

Other receivables
Name of Related Parties Lelon Electronics Technology (SUZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (SUZHOU) Corp. Add (less): Allowance exchange gains or losses Total	As of 31 December
	2024 $133,356 43,113 - 56 $176,525	2023
		$44,830 26,273 14,367 (1,143)
		$84,327

Note: The Company's other accounts receivable refer to the creditor's right arising from the procurement for the subsidiary.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(d) Prepayments

Prepayments
Lifu Machinery Industrial Co., Ltd Lelon International Industrial Limited LIRO ELECTRONICS CO., LTD. Total	As of 31 December
	2024 $12,096 1,014 217 $13,327	022
		$12,096 1,103 113
		$13,312

(e) Note payable-related parties

Note payable-related parties
Lifu Machinery Industrial Co., Ltd	As of 31 December
	2024	2023
	$534	$274

(f) Account payable-relared parties

Account payable-relared parties
Lelon International Industrial Limited Lelon Electronics (HUIZHOU) Corp. Lifu Machinery Industrial Co., Ltd Add (less): Allowance exchange gains or losses Total	As of 31 December
	2024 $136,877 28 26 1,508 $138,439	2023
		$47,543 - 395 (844)
		$47,094

(g) Other payable-related parties

Lelon Electronics (HUIZHOU) Corp. Add: Allowance exchange gains or losses Total	As of 31 December	As of 31 December
	2024	2023
	$449,504 3,023	$- -
	$452,527	$-

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(h) Others

Others
Lelon Electronics (HUIZHOU) Corp. Lelon Electronics Technology (SUZHOU) Corp. Lelon Electronics (SUZHOU) Corp. Dongguan Lehong Trading Co, Ltd. Total	For the years ended 31 December
	2024 $12,048 5,704 7 - $17,759	2023
		$7,532 1,629 2,387 3,580
		$15,128

(i) Royalty income Lelon Electronics Technology (SUZHOU) Corp. Lelon Electronics (SUZHOU) Corp. Lifu Machinery Industrial Co., Ltd Total	For the years ended 31 December	For the years ended 31 December
	2024 $59,344 - - $59,344	2023
		$- 33,059 476
		$33,535

(j) Key management personnel compensation

Key management personnel compensation
Short-term employee benefit Post-employment benefit Total	For the years ended 31 December 2024 2023 $41,330 $35,617 87 83 $41,417 $35,700
		2023 $35,617 83 $35,700

The key management personnel of the company are including directors and deputy general managers.

About the payment of key management above, please refer Contents of the annual report of the shareholders meeting.

8. Assets pledged as security

None.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

9. Significant contingencies and unrecognized contractual commitments

Amounts available under unused letters of credit as of 31 December 2024 are US$306 thousand and JPY$197,681 thousand.

10. Losses due to major disasters

None.

11. Significant subsequent events

None.

12. Others

(1) Categories of financial instruments

Financial assets

Financial assets
Financial assets at fair value through profit or loss: Mandatorily measured at fair value through profit or loss Financial assets measured at amortized cost Cash and cash equivalents (excluded cash on hand) Notes and accounts receivable Other receivables (excluded sales tax refund receivables) Financial liabilities Financial liabilities at amortized cost: Short-term loans Notes and accounts payable Lease liabilities	As of 31 December
	2024	2023
	2024	2023
	$1,270,064 163,262 -	$1,174,979 59,952 341

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(2) Financial risk management objectives and policies

The Company’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activates. The Company identifies, measures, and manages the aforementioned risks based on its policy and risk appetite.

The Company has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on related protocols and internal control procedures. The Company complies with its financial risk management policies at all times.

(3) Market risk

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

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

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 subsidiaries.

The Company has certain foreign currency receivables to be denominated in the same foreign currency as certain foreign currency payables, therefore natural hedge is achieved. Therefore, hedge accounting is not adopted.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Company’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Company’s foreign currency risk is mainly related to the volatility in the exchange rates for USD, HKD, JPY and EUR. The information of the sensitivity analysis is as follows:

A. When NTD strengthens/weakens against USD by 1%, the profit for the years ended 31 December 2024 and 2023 is decreased/increased by $14,405 and $12,854 respectively; and no impact on the equity.
B. When NTD strengthens/weakens against HKD by 1%, the profit for the years ended 31 December 2024 and 2023 is decreased/increased by $51 and $126 respectively; and no impact on the equity.
C. When NTD strengthens/weakens against JPY by 1%, the profit for the years ended 31 December 2024 and 2023 is decreased/increased by $(682) and decreased by $146 respectively; and no impact on the equity.
D. When NTD strengthens/weakens against EUR by 1%, the profit for the years ended 31 December 2024 and 2023 is decreased/increased by $579 and $382 respectively; and no impact on the equity.

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 primarily to the Company’s loans and receivables at variable interest rates, bank borrowings with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as at the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for years ended 31 December 2024 and 2023 to decrease/increase by NT$1,270 thousand and NT$1,175 thousand, respectively.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Equity price risk

The fair value of the Company’s listed and unlisted equity securities and conversion rights of the Euro-convertible bonds issued are susceptible to market price risk arising from uncertainties about future values of the investment securities. The Company’s listed and unlisted equity securities are classified under financial assets measured at fair value through profit or loss and financial assets measured at fair value through other comprehensive income, while conversion rights of the Euro-convertible bonds issued are classified as financial liabilities at fair value through profit or loss as it does not satisfy the definition of an equity component. The Company manages the equity price risk through diversification and placing limits on individual and total equity instruments. 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 all equity investment decisions.

At the reporting date, a change of 10% in the price measured at fair value through profit or loss could increase/decrease The Company’s profit for the years ended 31 December 2024 and 2023 by NT$5,429 thousand and NT$2,775 thousand, respectively.

Please refer to Note 12(9) 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.

(4) Credit risk management

Credit risk is the risk that a 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 accounts receivable and notes receivables) and from its financing activities, including bank deposits and other financial instruments.

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

As of 31 December 2024 and 2023, amounts receivables from top ten customers represented 31.52% and 33.64% of the total accounts receivable of the Company. The credit concentration risk of other accounts receivable is insignificant.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Credit risk from balances with banks, fixed income securities and other financial instruments is managed by the Company’s treasury in accordance with the Company’s policy. The Company only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings, convertible bonds and finance leases. The table below summarizes the maturity profile of the Company’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount 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

As of 31 December 2024 Short-term loans Notes and accounts payable As at 31 December 2023 Short-term loans Notes and accounts payable Lease liabilities	< 1year $1,271,097 163,262 < 1year $1,175,699 59,952 341	2 ~ 3years $- - 2 ~ 3years $- - -	4 ~ 5years $- - 4 ~ 5years $- - -	> 5years $- - > 5years $- - -	Total
					$1,271,097 163,262 Total
					$1,175,699 59,952 341

Derivative financial liabilities

None.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(6) Reconciliation of liabilities from financing activities

Reconciliation of liabilities for the year ended 31 December 2024:

As of 1 January 2024 Cash flows Non-cash changes As of 31 December 2024	Short-term loans $1,174,979 95,085 - $1,270,064	Bonds payable (including maturity within ayear) $- - - $-	Lease liabilities $341 (341) - $-	Total liabilities from financing activities
				$1,175,320 94,744 -
				$1,270,064

Reconciliation of liabilities for the year ended 31 December 2023:

As of 1 January 2023 Cash flows Non-cash changes As of 31 December 2023	Short-term loans $919,598 255,381 - $1,174,979	Bonds payable (including maturity within ayear) $25,001 (300) (24,701) $-	Lease liabilities $4,581 (4,240) - $341	Total liabilities from financing activities
				$949,180 250,841 (24,701)
				$1,175,320

(7) Fair value 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 current liabilities 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 (including listed equity securities, beneficiary certificates etc.) at the reporting date.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(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 PriceBook ratio of similar entities)
(D)Fair value of debt instruments without market quotations, bank loans, bonds payable and other non-current 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 instrument (such as yield curves published by the GreTai Securities Market, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)
(E) The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation)
B. Fair value of financial instruments measured at amortized cost

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

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(9) for fair value measurement hierarchy for financial instruments of the Company.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(8) Derivative financial instruments

The Company’s derivative financial instruments include a foreign exchange swap and a crosscurrency swap. The related information for derivative instruments not qualified for hedge accounting and not yet settled as of 31 December 2024 and 2023 is as follows:

Embedded derivative

The embedded derivatives arising from issuing convertible bonds have been separated from the host contract and carried at fair value through profit or loss. Please refer to Note 6(7) for further information on this transaction.

(9) Fair value measurement hierarchy
A. Fair value measurement hierarchy

All asset 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 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

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 that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Company’s assets and liabilities measured at fair value on a recurring basis is as follows:

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

As of December 31 2024 Financial assets: Financial assets at fair value through profit or loss Stock As of 31 December 2023 Financial assets: Financial assets at fair value through profit or loss Stock	Level 1 $54,292 Level 1 $27,751	Level 2 $- Level 2 $-	Level 3 $- Level 3 $-	Total
				$54,292 Total
				$27,751

Transfers between Level 1 and Level 2 during the period

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

C. Fair value measurement hierarchy of the Company’s assets and liabilities not measured at fair value but for which the fair value is disclosed

As of 31 December 2024 Level 1 Level 2 Level 3 Total Financial assets not measured at fair value but for which the fair value is disclosed: Investment properties $- $- $148,775 $148,775 As of 31 December 2023 Level 1 Level 2 Level 3 Total Financial assets not measured at fair value but for which the fair value is disclosed: Investment properties $- $- $129,512 $129,512

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies is listed below:

Unit: Thousands

Financial assets			As of 31 December	As of 31 December
		2024			2023
	Foreign Currency $43,932 1,207 8,693 1,697 $336,084	Exchange rate 32.7900 4.2240 0.2099 34.1300 0.2099	NTD	Foreign Currency	Exchange rate	NTD
			$1,440,530 5,098 1,825 57,919 $70,544	$41,835 3,196 127,982 1,122 $60,727	30.7250 3.9300 0.2172 34.0200 0.2172	$1,285,380 12,560 27,798 38,170 $13,190
Monetaryitem:
USD HKD JPY EUR Financial liabilities
Monetaryitem:
JPY

The Company has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Company recognized NT$88,070 thousand and NT$17,917 thousand foreign exchange gains for the years ended 31 December 2024 and 2023, respectively.

(11) 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 payments to shareholders, return capital to shareholders or issue new shares.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

13.Other disclosure

Information on significant transactions
(1) Financing provided to others for the year ended 31 December 2024: None.
(2) Endorsement/Guarantee provided to others for the year ended 31 December 2024: None.

(3) Securities held at the end of the period (excluding investment subsidiaries, affiliates and jointventure controlling interests):

Company held	Securities name	Relationship with the Securities issuer	Financial Statement Account		31 December 2024	31 December 2024
				Shares/Units	Carrying Value	Ownership Percentage	Market Value or Net Asset Value
Lelon Electronics Corp.	Stock China Development Financial Holding Corp. Nanoplus Ltd. Chian Hsing Forging Industrial Co.,Ltd. Taiwan Hon Chuan Enterprise Co., Ltd. Mega Financial Holding Company Ltd. CTBC Capital Ltd. The Shanghai Commercial & Savings Bank, Ltd. Cathay US Treasury 20+ YR ETF Shin Kong TIP Taiwan Semiconductor 30 ETF TAIWAN SEMICONDUCTOR MANUFACTURING CO.,LTD. NICHIDENBO CORPORATION CHICONY ELECTRONICS CO., LTD. Nippon Chemi-Con Corporation	- - - - - - - - - - - - -	Financial asset measured at fair value through profit or loss– current 〃〃〃〃〃〃〃〃〃〃〃〃 Add: Valuation adjustment of financial assets at fair value through profit or loss Total	189,266 12,572 113,300 74,623 91,252 60,000 96,597 94,000 250,000 10,000 50,000 12,000 20,000	$1,347 1,466 5,330 5,249 3,473 1,656 4,713 3,220 3,821 7,791 3,456 1,864 5,206 5,701	- - - - - - - -	$3,255 78 2,680 11,007 3,531 2,346 3,825 2,800 4,623 10,750 3,485 1,824 4,089 -
					$54,293		$54,293

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Company held	Securities name	Relationship with the Securities issuer	Financial Statement Account		31 December 2024	31 December 2024
				Shares/Units	Carrying Value	Ownership Percentage	Market Value or Net Asset Value
Lelon Electronics Corp.	Stock ELNA PCB(M) SDN. BHD.	-	Financial assets at fair value through other comprehensive income- Non-current Less: Financial assets measured at fair value through other comprehensive income- noncurrent - Non- Current Evaluation Adjustment Total	1,824,000	$18,148 (18,148)	10%	$- -
					$-		$-

(4) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2024: None.
(5) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2024: None.
(6) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2024: None.
(7) Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024:

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Company Name	Counter-party	Nature of Relationship		Transactions	Transactions		Details of non-arm's length transaction	Details of non-arm's length transaction	Notes and receivable	accounts (payable)	Note
			Purchases (Sales)	Amount	% to Total	Term	Unit price	Term	Balance	% to Total
Lelon International Industrial Limited	LELON ELECTRONI CS CORP.	sub-subsidiary	Sales	$(2,340,882)	98.65%	Write-off of debts	Regular	Regular	$135,369	15.43%

(8) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024: None.
(9) Financial instruments and derivative transactions: Please refer to Note 12(8).

2. Information on investees

A. Names, locations, main businesses and products, original investment amount, investment as of 31 December 2024 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2024: (Excluding investment in Mainland China):

Investor Company	Investee companies	Address	Main Business and Product	Initial I	nvestment	Balance as of 31 Dece	Balance as of 31 Dece	mber 2024	Net income (loss) of investee company	Investment income (loss) recognized	Note
				Ending balance	Beginning balance	Number of shares	Percentage of Ownership (%)	Carrying Value
LELON ELECTRONI CS CORP.	LITON TECHNOLOGY CORP.	No. 9, Zhonglong 2nd Rd., Tongluo Township, Miaoli County 36643, Taiwan (R.O.C.)	Processing and trading of etched aluminum foils, manufacture and trading of aluminum formed foils	$468,471	$468,471	43,731,598	29.30%	$1,137,729	$469,250	$141,000	Subsidiaries (Note2,3)
LELON ELECTRONI CS CORP.	LIRO ELECTRONICS CO., LTD.	P.O. BOX 3340, Dawson BLdg. ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS	Equity investment	818,824	818,824	26,005,137	89.47%	6,451,470	968,421	865,663	Subsidiaries (Note2,3)

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

LELON ELECTRONI CS CORP.	SURGE-LELON LLC	1056 Grand Boulevard Deer Park,NY 11729	Trade business	2,213 (USD 67,500)	2,213 (USD 67,500)	-	45.00%	- (Note1)	-	-	Investee under the equity method
LELON ELECTRONI CS CORP.	Lelon Electronics(Thail and) Co.,Ltd.	58/117 Soi Ramkhamhaeng 3,Suanluang,Bang kok,Thailand	Manufacture and sales of capacitors	355,255 (THB 391,959 thousand)	195,091 (THB 215,509 thousand)	-	100.00%	373,014	(1,784)	(1,784)	Subsidiaries
LIRO ELECTRONI CS CO., LTD	Lelon International Industrial Limited	140-142 Shichun Road, Tsim Sha Tsui, Kowloon, HongKong	Equity Investment and Trade	12,692 (USD 387,059)	12,692 (USD 387,059)	-	100.00%	28,852	972	It has been processed by a subsidiary company	Sub-subsidiary
LITON TECHNOLO GY CORP.	LITON(BVI) CO., LTD.	P.O. BOX 3340, Road Town, Tortola, British Virgin Islands	Equity investment	138,013 (USD 4,209 thousand)	231,432 (USD 7,058 thousand)	4,208,862	100.00%	899,218	140,751	It has been processed by a subsidiary company
LITON TECHNOLO GY CORP.	V-TECH CO., LTD.	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Sales of aluminum foil materials, aluminum electrolytic capacitors and related materials for the above products and equityinvestment	1,431,185 (USD 43,647 thousand)	1,431,185 (USD 43,647 thousand)	43,647,362	100.00%	1,614,974	131,503	It has been processed by a subsidiary company
LITON TECHNOLO GY CORP.	EVERTECH CAPA CO., LTD.	Jipfa Buiding,3rd Floor, Road Town, Tortola, British Virgin Islands.	Trade business	328 (USD 10 thousand)	328 (USD 10 thousand)	10,000	100.00%	-	-	It has been processed by a subsidiary company
V-TECH CO., LTD.	FOREVER CO., LTD.	Vistra Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apia, Samoa	Equity investment	1,257,595 (USD 38,353 thousand)	1,257,595 (USD 38,353 thousand)	38,353,012	100.00%	1,692,021	120,421	It has been processed by V-TECH CO.,LTD

Note1: The recognition of the investment loss of the investee company based on the shareholding ratio has exceeded the

actual investment amount, and the recognition of investment losses is limited to reducing the book balance of the company's investment and advances to zero in accordance with regulations.

Note2: Current investment income from investees recognized by the Company included investment gain/loss recognized by their reinvested companies.

Note3: Current investment income from investees recognized by the Company included investment gain/loss recognized by these investees from upstream/downstream transactions

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

B. Information about major transactions of investee companies with controlling power:

(A) Financing provided to others for the year ended 31 December 2024:

No.	Lender	Counterpart y	Financial statement account	Related party	Maxi- mum balance for the period	Ending balance	Amount actually provided	Interest Rate	Nature for fi- nancing (Note1)	Amount of sales to counter- party	Reason for fi- ancing	Al- Low- ance for bad debt	Collateral	Collateral	Limit of fi- nancing a mount for individual counter-party (Note4)	Limit of total financing amount (Note4)
													Item	Value
1	Lelon Electronics (HUIZHOU) Corp.	Lelon Electronics Corp.	Other receivables	Yes	$447,600	$447,600	$447,600	2.5%	2	$-	working capital turnover	$ -	$-	$ -	$3,324,971	$3,324,971
2	Lelon Electronics (SUZHOU) Corp.	Lelon Electronics Technology (SUZHOU) Corp.	Other receivables	Yes	447,600	447,600	-	1.1%	2	-	working capital turnover	-	-	-	1,725,780	1,725,780

Note1: "1" is for business dealing, "2" is for the short-term financing.

Note2: The total amount for lending to a individual company shall not exceed 10% of Lelon Electronics Corp.’s net worth. Note3: The total amount available for lending purposes shall not exceed 40% of Lelon Electronics Corp.’s net worth.

Note4: In the event that the financing is between foreign company whose voting shares are 100% owned, directly or indirectly, by Lelon Electronics Corp.and LITON TECHNOLOGY Corp., the aggregate amount available for lending to such borrowers and total amount lendable to a company both shall not exceed the net worth of the lending company.

(B) Endorsement/Guarantee provided to others as of 31 December 2024: None.
(C) Securities held at the end of the period (excluding investment subsidiaries, affiliates and joint-venture controlling interests):

Investee Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	Balance as of31 December 2024	Balance as of31 December 2024	Balance as of31 December 2024	Balance as of31 December 2024	Note
				Shares	Carrying Value	Percentage of Ownership	Fair Value
Lelon Electronics (SUZHOU) Corp. Lelon Electronics (SUZHOU) Corp.	Shenzhen Capchem Technology Co.,Ltd. Nantong Jianghai Capacitor Co.,Ltd.	- -	Financial asset measured at fair value through profit or loss– current 〃	85,600 12,000	$22,040 920	- -	$14,345 944

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Investee Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	Balance as of31 December 2024	Balance as of31 December 2024	Balance as of31 December 2024	Balance as of31 December 2024	Note
				Shares	Carrying Value	Percentage of Ownership	Fair Value
Lelon Electronics (SUZHOU) Corp. Lelon Electronics (SUZHOU) Corp. Suzhou Liding Automotive Technology Co., Ltd. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (HUIZHOU) Corp.	Ri Ying Xiang Tian Tian Li NO.5 U Cash management Products An Ying Xiang Fixed Income Stable Daily Open 25-A CTBC RMB Yield Enhancement Products Fubon (China) Bank RMB Structured Deposit “Fuiying” No. SDCNYC20244031 Fubon (China) Bank RMB Structured Deposit “Fuiying” No. SDCNYC20244121 China Guangfa Bank wu hua tian bao"W" 2024 No. 218 RMB Structured Deposit WHTBCB02356 China Guangfa Bank wu hua tian bao"W" 2024 No. 238 RMB Structured Deposit WHTBCB02416 China Guangfa Bank wu hua tian bao"W" 2024 No. 247 RMB Structured Deposit WHTBCB02450 Fubon (China) Bank RMB Structured Deposit “Fuiying” No. SDCNYC20244315	- - - - - - - - -	〃〃〃〃〃〃〃〃〃	- - - - - - - - -	671 1,751 67,140 89,520 67,140 67,140 67,140 71,616 143,232	- - - - - - - - -	671 1,751 67,140 89,520 67,140 67,140 67,140 71,616 143,232

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Investee Company	Marketable Securities Type and Name	Relationship with the Company	Financial Statement Account	Balance as of31 December 2024	Balance as of31 December 2024	Balance as of31 December 2024
				Shares	Carrying Value	Percentage of Ownership	Fair Value
Lelon Electronics (HUIZHOU) Corp. Lelon Electronics (HUIZHOU) Corp. Liton Technology Corp. Lelon Electronics (HUIZHOU) Corp. Liton Electronics Technology (Hui Zhou) Co., Ltd. Lelon Electronics (SUZHOU) Corp. Liton Technology Corp.	China Guangfa Bank wu hua tian bao"W" 2024 No. 274 RMB Structured Deposit WHTBCB02551 China Guangfa Bank wu hua tian bao"W" 2024 No. 281 RMB Structured Deposit WHTBCB02591 Securities - KGI Financial Holdings Co., Ltd. (Note 1) Lijing Real Estate Development (Huizhou) Co., Ltd. Lijing Real Estate Development (Huizhou) Co., Ltd. Changchun Trarrii Corp. PAN WIN BIOTECHNOLOGY INC.	- - - - - - -	〃〃〃 Subtotal Less: Financial asset valuation adjustment Total Financial assets at fair value through other comprehensive income- Non-current 〃〃〃 Subtotal Less: Financial asset valuation adjustment Total	- - 90,411 4,719,710 1,303,537 1,000,000 100,000	58,188 89,520 983	- - - 16.27% 4.49% 16.67% 5.00%	58,188 89,520 1,555
					747,001		747,001
					(7,099)		-
					$739,902		$739,902
					$21,356 6,697 11,190 550		$21,887 5,744 - -
					39,793		27,631
					(12,162)		-
					$27,631		$27,631

Note 1: Starting from 11 October 2024, China Development Financial Holding Corp. was renamed as KGI Financial Holdings Co., Ltd. and is listed for trading.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(D) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2024: None
(E) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2024: None.
(F) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20 percent of the capital stock for the year ended 31 December 2024: None.
(G) Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024:

Company Name	Counterparty Item	Nature of Relationship	Transactions	Transactions	Transactions	Transactions	Details of non-arm's lengthtransaction	Details of non-arm's lengthtransaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	% to Total	Term	Unit price	Term	Balance	Percentage of total consolidated receivables (payable)
Lelon International Industrial Limited	Lelon Electronics Corp.	The Company’s sub-subsidiary	Sales	$(2,340,882)	(22.32)%	Write-off of debts	Regular	Regular	$135,369	3.81%
Lelon International Industrial Limited	Lelon Electronics (HUIZHOU) Corp.	The Company’s sub-subsidiary	Purchases	1,564,124	21.57%	Write-off of debts	Regular	Regular	(257,313)	(38.58)%
Lelon International Industrial Limited	Lelon Electronics (SUZHOU) Corp.	The Company’s sub-subsidiary	Purchases	644,064	8.88%	Write-off of debts	Regular	Regular	18,364	2.75%
Lelon International Industrial Limited	Lelon Electronics Technology (SUZHOU) Corp.	The Company’s sub-subsidiary	Purchases	124,895	(1.72)%	Write-off of debts	Regular	Regular	121,159	18.16%

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Company Name	Counterparty Item	Nature of Relationship	Transactions	Transactions	Transactions	Transactions	Details of non-arm's lengthtransaction	Details of non-arm's lengthtransaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	% to Total	Term	Unit price	Term	Balance	Percentage of total consolidated receivables (payable)
Lelon Electronics Technology (SUZHOU) Corp.	Lelon Electronics (SUZHOU) Corp.	The Company’s sub-subsidiary	Sales	(945,696)	(9.02)%	Write-off of debts	Regular	Regular	143,051	4.03%
LITON TECHNOLO GY CORP.	V-TECH CO., LTD	Liton Technology Corp.’s subsidiary	Purchases	720,898	9.94%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Mutual offset of creditor's rights and debts	-	-%
LITON TECHNOLO GY CORP.	V-TECH CO., LTD	Liton Technology Corp.’s subsidiary	Sales	(117,200)	(1.12)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Mutual offset of creditor's rights and debts	173,536	4.88%
LITON TECHNOLO GY CORP.	Liton Electronics Technology (Abazhou) Co., Ltd.	V-TECH CO., LTD.’s subsidiary	Sales	(205,004)	(1.95)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Mutual offset of creditor's rights and debts	106,953	-%
LITON TECHNOLO GY CORP.	Ruyuan Lidong Electronic Technology Co., Ltd.	Liton Technology Corp.’s subsidiary	Purchases	110,727	1.53%	Net 60 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Mutual offset of creditor's rights and debts	(21,199)	(3.15)%

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Company Name	Counterparty Item	Nature of Relationship	Transactions	Transactions	Transactions	Transactions	Details of non-arm's lengthtransaction	Details of non-arm's lengthtransaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	% to Total	Term	Unit price	Term	Balance	Percentage of total consolidated receivables (payable)
V-TECH CO., LTD	Liton Electronics Technology (Abazhou) Co., Ltd.	V-TECH CO., LTD’s subsidiary	Purchases	340,703	4.70%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	-	-%
V-TECH CO., LTD	Liton Electronics Technology (Hui Zhou) Co., Ltd.	Liton Technology Corp.’s sub- subsidiary	Sales	(109,480)	(1.04)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Mutual offset of creditor's rights and debts	156,251	4.40%
V-TECH CO., LTD	Liton Electronics Technology (Hui Zhou) Co., Ltd.	Liton Technology Corp.’s sub- subsidiary	Sales	369,434	5.09%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Mutual offset of creditor's rights and debts	-	-%
Liton Electronics Technology (Abazhou) Co., Ltd.	Ruyuan Lidong Electronic Technology Co., Ltd.	Liton Technology Corp.’s sub- subsidiary	Purchases	657,275	9.06%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(61,188)	(9.17)%
Liton Electronics Technology (Abazhou) Co., Ltd.	Lelon Electronics Technology (SUZHOU) Corp.	Associate of Liton Electronics Technology (Abazhou) Co., Ltd.	Sales	(141,058)	1.35%	Net 135 days from the end of next month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	55,546	(1.56)%

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Company Name	Counterparty Item	Nature of Relationship	Transactions	Transactions	Transactions	Transactions	Details of non-arm's lengthtransaction	Details of non-arm's lengthtransaction	Notes and accounts receivable (payable)	Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	% to Total	Term	Unit price	Term	Balance	Percentage of total consolidated receivables (payable)
Liton Electronics Technology (Hui Zhou) Co., Ltd.	Ruyuan Lidong Electronic Technology Co., Ltd.	Liton Technology Corp.’s sub- subsidiary	Purchases	292,754	4.04%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(17,976)	(2.69)%
Ruyuan Lidong Electronic Technology Co., Ltd.	Dongyang, Ruyuan Yao Autonomous County Actinic Foil Co., Ltd	Lidon Technology Corp.’s substantial related party	Sales	(671,140)	(6.40)%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	94,551	2.66%
Ruyuan Lidong Electronic Technology Co., Ltd.	Youai Xi Jiedong Sunshine (Shaoguan) Aluminum Sales Co., Ltd	Lidon Technology Corp.’s substantial related party	Purchases	1,141,722	15.74%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(65,981)	(9.89)%

Note: The Company complies with the provisions of Letter No. 00747 of the Securities and Futures Commission dated 18 March 1998 (87) Taiwan Financial Securities (6)., When outsourced processing,if the parties have agreed to be shipped back for processing or sold on behalf of the party,title and risk of processed products have not passed, when the material is outsourced, it will be treated according to the accounting of outsourcing processing, it will not be treated as sales

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

(H) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of capital stock as of year ended 31 December 2024:

please refer to Note 13(1) for details regarding financing provided to others.

					Overduereceivables	Overduereceivables	Amounts
Company Name	Related Party	Nature of Relationship	Ending Balance	Turnover		Actions	Received in	Loss
				Rate	Amount	taken	Subsequent Period	allowance
Lelon International Industrial Limited	Lelon Electronics Corp.	The Company’s sub- subsidiary	Accounts receivable $135,369	$-	$-	$-	Write-off of debts	$-
Liton Electronics Technology (Hui Zhou) Co.,Ltd.	Lelon International Industrial Limited	The Company’s sub- subsidiary	Accounts receivable 257,313	-	-	-	Write-off of debts	-
Lelon Electronics Technology (SUZHOU) Corp.	Lelon Electronics (SUZHOU) Corp.	The Company’s sub- subsidiary	Accounts receivable 143,051	-	-	-	Write-off of debts	-
LITON TECHNOLOGY CORP.	V-TECH CO., LTD.	Liton Technology Corp’s subsidiary	Accounts receivable 173,536	-	-	-	Write-off of debts	-
LITON TECHNOLOGY CORP.	Liton Electronics Technology (Abazhou) Co.,Ltd.	V-TECH CO., LTD’s subsidiary	Accounts receivable 106,953	-	-	-	Write-off of debts	-
V-TECH CO., LTD.	Liton Electronics Technology (Hui Zhou) Co.,Ltd.	Liton Technology Corp’s sub-subsidiary	Accounts receivable 156,251	-	-	-	Write-off of debts	-

(I) Financial instruments and derivative transactions: None.

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

3. Information on investment in Mainland China

A. The name of the investee in Mainland China, the main businesses and products, its issued capital, method of investment, information on inflow or outflow of capital, percentage of ownership, equity in the net gain or net loss, ending balance, amount received as dividends from the investee, and the limitation on investee:

Investee Company	Main Business and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1Jan. 2024	Investment Flows	Investment Flows	Accumulated Outflow of Investment from Taiwan as of 31 Dec. 2024	Net income(loss) of investee company	Percentage of Ownership	Equity in Earnings (Losses) Note 1	Carrying Value as of 31 December 2024 (Note1)	Accumulat ed Inward Remittance of Earnings as of 31 December 2024
					Outflow	Inflow
Lelon Electronics (HUIZHOU) Corp.	Manufacture and sales of capacitors	$378,793 (RMB 84,627,532)	Indirect investments in Mainland China through companies registered in a third region	$252,057 (USD 7,687 thousand)	$-	$-	$252,057 (USD 7,687 thousand)	$667,558	89.47%	$597,264	$2,974,851	$-
Lelon Electronics (SUZHOU) Corp.	Manufacture and sales of capacitors	353,733 (RMB 79,028,807)	Indirect investments in Mainland China through companies registered in a third region	194,477 (USD 5,931 thousand)	-	-	194,477 (USD 5,931 thousand)	(21,225)	89.47%	(18,990)	1,544,055	-
Lelon Electronics (SUZHOU) Corp.	Manufacture and sales of capacitors	1,997,378 (RMB 446,241,785)	Indirect investments in Mainland China through companies registered in a third region	327,900 (USD 10,000 thousand)	-	-	327,900 (USD 10,000 thousand)	321,117	89.47%	287,303	1,983,442	-
Dongguan Lehong Trading Co, Ltd.	Trading of Electronic Components	11,830 (RMB 2,643,003)	Indirect investments in Mainland China through companies registered in a third region	12,690 (USD 387 thousand)	-	-	12,690 (USD 387 thousand)	855	89.47%	765	25,699	-

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

Investee Company	Main Business and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of 1Jan. 2024	Investm	ent Flows	Accumulated Outflow of Investment from Taiwan as of 31 Dec. 2024	Net income(loss) of investee company	Percentage of Ownership	Equity in Earnings (Losses) Note 1	Carrying Value as of 31 December 2024 (Note1)	Accumulat ed Inward Remittance of Earnings as of 31 December 2024
					Outflow	Inflow
Lelon Electronics Technology (SUZHOU) Corp.	Manufacture and sales of capacitors	134,280 (RMB 30,000,000)	Indirect investments in Mainland China through companies registered in a third region and others	-	-	-	-	15,579	89.47%	13,939	107,546	-
Liton Electronics Technology (Hui Zhou) Co., Ltd.	Manufacture and sale of aluminum foil materials, aluminum electrolytic capacitors and related materials for the above products	409,875 (USD 12,500 thousand)	Indirect investments in Mainland China through companies registered in a third region	379,675 (USD 11,579 thousand)	-	93,419 (USD 2,849 thousand)	286,256 (USD8,730 thousand)	132,874	100.00%	132,874	901,430	64,313
Liton Electronics Technology (Abazhou) Co., Ltd.	Manufacture of aluminum foil materials, aluminum electrolytic capacitors and related materials for the above products	1,396,854 (USD 42,600 thousand)	Indirect investments in Mainland China through companies registered in a third region	1,232,904 (USD 37,600 thousand)	-	-	1,232,904 (USD 37,600 thousand)	120,421	89.47%	120,421	1,692,021	-
Ruyuan Lidong Electronic Technology Co., Ltd.	Manufacture and trade of electroeroded foil and chemically formed aluminum foil	716,160 (RMB 160,000 thousand)	Direct investment in the Mainland China	286,464 (RMB 64,000 thousand)	-	-	286,464 (RMB 64,000 thousand)	326,425	60.00%	195,026	1,186,038	42,416

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(Expressed in Thousands of New Taiwan Dollars Unless Otherwise Specified)

	Accumulated investment in Mainland China as of 31 December 2024	Investment Amounts Authorized by Investment Commission,MOEA	Upper Limit on Investment
The Company	$954,354 (USD 29,105 thousand)	$1,154,584 (USD 34,825 thousand) (HKD3,000 thousand)	$4,828,396
Liton Technology Corp.	$1,805,624 (USD 46,330 thousand) (RMB 64,000 thousand)	$2,133,524 (USD 56,330 thousand) (RMB 64,000 thousand)	Not applicable (Note 6)

Note 1: Amount was recognized based on the audited financial statements.

Note 2: The investment income of the investee company recognized in this period has included the investment gains and losses of these companies due to downstream and upstream transactions.

Note 3: According to Letter No.11230425300 issued by Ministry of Economic Affairs, R.O.C., because of LITON TECHNOLOGY Corp. has already get the operation headquarters certification documents issued by Industrial Development Bureau. Therefore, the amount to invest in Mainland China will not be limited to 60 percent of net or consolidated net worth by Investment Commission.

Note 4: The figures in this table should be presented in New Taiwan Dollars. Where foreign currencies are involved, they should be converted into New Taiwan Dollars using the exchange rates at the balance sheet date.

Note5：The investment information of Mainland China is excluding investment information of disposed Mainland subsidiaries.

B. As of 31 December 2024, for information on significant transactions and prices, payments, etc. between the parent company and subsidiaries, please refer to Note 13(2)(B)⑦ and ⑧. The unrealized profit arising from the aforementioned material transaction amounted to NT$1,383 thousand.
Information of major shareholders

As of 31 December 2024

As of31 December 2024
Shares Name	Total Shares Owned	Ownership Percentage
ChiFa EnterpriseCo.,Ltd.	25,619,291	15.55%

LELON ELECTRONICS CORP.

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS FOR THE YEAR ENDED 31 DECEMBER 2024

Items	STATEMENT INDEX
STATEMENT OF CASH AND CASH EQUIVALENTS	1
STATEMENT OF RECEIVABLES FROM RELATED PARTIES	2
STATEMENT OF INVENTORIES	3
STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD	4
STATEMENT OF CHANGES IN PROPERTY, PLANT AND EQUIPMENT	Note 6 (5)
STATEMENT OF CHANGES IN ACCUMULATED DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT	Note 6 (5)
STATEMENT OF CHANGES IN NET SHORT-TERM LOANS	5
STATEMENT OF NET OPERATING REVENUES	6
STATEMENT OF OPERATING COSTS	7
STATEMENT OF OPERATING EXPENSES	8
SUMMARY STATEMENT OF EMPLOYEE BENEFITS, DEPRECIATION AND AMORTIZATION EXPENSES BY FUNCTION	Note 6 (13)
STATEMENT OF NON-OPERATING INCOME AND EXPENSES	Note 6 (14)

LELON ELECTRONICS CORP.

1. STATEMENT OF CASH AND CASH EQUIVALENTS

31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Item	Description	Amount	Note
Petty cash Cash Bank savings Total	Demand deposits- foreign currency Demand deposits- NTD Time deposits- foreign currency	$60 270 287,414 34,536 370,527 $692,807	USD 7,699 thousand HKD 1,033 thousand JPY 8,668 thousand EUR 843 thousand USD 11,300 thousand

LELON ELECTRONICS CORP.

2. STATEMENT OF RECEIVABLES FROM RELATED PARTIES

31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Client Name	Description	Amount	Note
Client A Client B Others (Note) Total Less: Loss allowance Subtotal		$45,044 50,561 797,859 893,464 (16,658) $876,806

Note: The amount of individual client in others does not exceed 5% of the account balance.

LELON ELECTRONICS CORP.

3. STATEMENT OF INVENTORIES

31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Item	Cost	Net realizable value	Note
Work in process Merchandise Subtotal Less: Allowance for inventory valuation and obsolescence losses Total	$3,287 66,569 69,856 (1,085) $68,771	$3,287 66,470 $69,757

100

LELON ELECTRONICS CORP.

4. STATEMENT OF CHANGES IN LONG-TERM EQUITY INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED 31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Investees	Balance,1 January2024	Balance,1 January2024	Additions	Additions	Decrease	Decrease	Receive cash dividends (Note1)	Increase (Decrease) in Using the Equity Method Amount	Exchange differences from the translation of financial statements	Obtain the difference between the equity price and book value of subsidiaries	Others (Note2)	Balance,31 December 2024	Balance,31 December 2024	Balance,31 December 2024	Collateral	Note
	Shares	Amount	Shares	Amount	Shares	Amount						Shares	%	Amount
LIRO ELECTORNICS CO., LTD. Liton Technology Corp. LELON ELECTRONICS (Thailand) CO., LTD. SURGE-LELON LLC Total	26,005,137 43,731,598 - 5,160,000	$5,387,920 968,723 193,367 -	- - - -	$- - 160,164 -	- - - -	$- - - -	$- (45,735) - - $(45,735)	$865,663 141,000 (1,784) -	$191,062 33,077 21,266 -	$- 41,040 - -	$6,848 (399) -	26,005,137 43,731,598 - 5,160,000	89.47% 29.30% 100.00% 45.00%	$6,451,493 1,137,706 373,013 -	Nil Nil Nil Nil	OTC stocks
		$6,550,010		$160,164		$-		$1,004,879	$245,405	$41,040	$6,449			$7,962,212

Note 1 ： The main subsidiary Liton Technology Corp announced the distribution of cash dividends in this period, the Company recognized $45,735 according to the shareholding percentage. Note 2 ： Other components are as follows ：

(1) FVTOCI-Non-current $- Defined benefit plan actuarial gains and losses (399) Total $(399) (2) Unrealized gross margin $(1,383) Realized gross margin 8,646 Financial assets measured at fair value through other comprehensive income- noncurrent (415) Total $6,848

101

LELON ELECTRONICS CORP.

5. STATEMENT OF SHORT-TERM BORROWINGS

31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Loan Type	Description	Ending balance	Contract Period	Interest Rates (%)	Amount	Collateral
First Bank - Taichung Branch	Short-term Revolving Funds	$480,000	2024/3/21-2025/3/21	0.73%-1.85%	$600,000	-
CTBC Bank	Short-term Revolving Funds	300,000	2024/7/31-2025/7/31		$300,000	-
Citibank - Chungkang Branch	Short-term Revolving Funds	200,000	2024/5/31-2025/5/31		$276,934	-
HSBC Bank (Taiwan) Limited - TaichungBranch	Short-term Revolving Funds	120,000	2024/6/26-2025/6/26		$200,000	-
YUANTA Commercial Bank	Short-term Revolving Funds	100,000	2024/5/10-2025/5/10		$200,000	-
Taiwan Cooperative Bank- North TaichungBranch	Usance L/C Borrowing	69,540	2024/5/29-2025/5/31		$300,000	-
Chang Hwa Commercial Bank – Dali Branch	Usance L/C Borrowing	2,234	2024/4/22-2025/4/30		$10,000	-
Mega International Commercial Bank –Central TaichungBranch	Usance L/C Borrowing	346	2024/1/16-2025/1/15		$180,000	-
Subtotal Add: Allowance for exchange benefit Total		1,272,120 (2,056) $1,270,064

102

LELON ELECTRONICS CORP.

6. STATEMENT OF NET REVENUE

FOR THE YEAR ENDED 31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Item	Description	Amount	Note
Capacitor Sale of machinery and equipment Royalty income Total net revenue Less: Sales return Sales discounts and allowance Net revenues	1,426,008 KPCS Trademark royalty expense	$2,783,388 28,849 59,344 2,871,581 (2,833) (15,671) $2,853,077

103

LELON ELECTRONICS CORP.

7. STATEMENT OF COST OF REVENUE

FOR THE YEAR ENDED 31 DECEMBER 2024

In Thousands of New Taiwan Dollars

	Item		Amount
A. Cost of goods sold of manufacturing products Work in process, beginning of year Add: Current production Less: Work in process, end of year Transfer to goods Cost of finished goods B. Sales of goods sold Inventories, beginning of year Add: Net purchases in this period Work in process transfer in Less: Inventories, end of year Transferred to research and development expenses Cost of sales of goods purchased C. Other costs Reversal of inventory write-downs and obsolescence Other cost Total			$7,568 3,287 (3,287) (7,568) - 72,893 2,359,281 7,568 (66,569) (84) 2,373,089 (255) (255) $2,372,834

104

LELON ELECTRONICS CORP.

8. STATEMENT OF OPERATING EXPENSES

FOR THE YEAR ENDED 31 DECEMBER 2024

In Thousands of New Taiwan Dollars

Item	Selling Expenses	General and Administrative Expenses	Research and Development Expenses	Impairment gain for expected credit	Total	Note
Payroll expense Commission Import and export expense Insurance expense Depreciation Impairment gain for expected credit Others Total	$42,414 59,616 34,275 3,260 510 - 22,601 $162,676	$141,868 - - 5,423 3,921 - 20,447 $171,659	$31,832 - - 3,104 7,912 - 12,097 $54,945	$- - - - - (6,042) - $(6,042)	$216,114 59,616 34,275 11,787 12,343 (6,042) 55,145 $383,238	(Note)

Note: The amount of each item in others does not exceed 5% of the account balance.

105

AI assistant

LELON — Annual Report 2024

52108_rns_2024-11-14_f93a93ff-e086-4630-9a4d-39638b6b6848.pdf

2472

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY FINANCIAL STATEMENTS WITH REPORT OF INDEPENDENT ACCOUNTANTS FOR THE YEARS ENDED 31 DECEMBER 2024 AND 2023

Independent Auditors’ Report Translated from Chinese

Opinion

Basis for Opinion

Key Audit Matters

Impairment of accounts receivable

Valuation for inventories (Including inventories of the subsidiaries under the equity method)

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

13 March 2025

Notice to Readers

PARENT COMPANY ONLY BALANCE SHEETS

English Translation of Consolidated Financial Statements Originally Issued in Chinese LELON ELECTRONICS CORP.

English Translation of Consolidated Financial Statements Originally Issued in Chinese LELON ELECTRONICS CORP.

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

LELON ELECTRONICS CORP.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

LELON ELECTRONICS CORP.

Notes to Financial Statements

1. History and organization

2. Date and procedures of authorization of financial statements for issue

3. Newly issued or revised standards and interpretations

Notes to Financial Statements (Continued)

Notes to Financial Statements (Continued)

Notes to Financial Statements (Continued)

4. Summary of material accounting policies

(1) Statement of Compliance

(2) Basis of Preparation

(3) Foreign Currency Transactions

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(4) Translation of Foreign Currency Financial Statements

Notes to Financial Statements (Continued)

Financial assets measured at amortized cost

Notes to Financial Statements (Continued)

Financial asset measured at fair value through other comprehensive income

Notes to Financial Statements (Continued)

Financial asset measured at fair value through profit or loss

B. Impairment of financial assets

Notes to Financial Statements (Continued)

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

(8) Derivative instruments

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(9) Fair value measurement

(10) Inventories

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(11) Investments accounted for under the equity method

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(12) Property, plant and equipment

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

(13) Investment property

(14) Leases

Company as a lessee

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

LELON ELECTRONICS CORP.

Notes to Financial Statements (Continued)

Company as a lessor

LELON Annual Report 2024