LPI - Audit Report / Information 2023

Stock Code: 2369

Lingsen Precision Industries, Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

For the Years Ended December 31, 2023 and 2022

Address: No. 5-1, Nan’er Rd., Tanzi Dist., Taichung City 427058, Taiwan (R.O.C.)

TEL: (04)25335120

For the convenience of readers and for information purpose only, the auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

Independent Auditors’ Report

To the Board of Directors and Shareholders of Lingsen Precision Industries, Ltd.

Audit opinions

We have audited the accompanying parent company only financial statements of Lingsen Precision Industries, Ltd. (the “Company”), which comprise the unconsolidated balance sheets as of December 31, 2023 and 2022, and the unconsolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying unconsolidated financial statements present fairly, in all material respects, the unconsolidated financial position of the Company as of December 31, 2023 and 2022, and its unconsolidated financial performance and its unconsolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulation Governing Auditing and Certification of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the R.O.C. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Unconsolidated Financial Statements section of our report. The auditors of the firm, subject to the independence regulations, have maintained independence from the Company in accordance with the Code of Ethics and perform other obligations of such Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

The key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the unconsolidated financial statements of the Company for the year ended December 31, 2023. These matters were addressed in the context of our audit of the unconsolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matters for the Company's unconsolidated financial statements for the year ended December 31, 2023 are stated as follows:

Authenticity of service revenue recognition

The main source of revenue of the Company relies on the service revenue from various wafers and integrated circuit packaging and testing services; therefore, the service revenue is determined to be the main indicator for the management to evaluate the business performance, and its recognition authenticity has a material impact on the overall financial statements. Accordingly, the authenticity of the recognition of specific customer service revenue is listed as the key audit matter. For revenue recognition related accounting policy, please refer to Notes 4 and 20 of the unconsolidated financial statements.

We summarize the main audit procedures executed for the aforementioned matters of the current year as follows:

Understand and assess the internal control design related to the audit and risk in the product sales and payment collection cycle and conduct a test on its effectiveness.
Inspect and obtain samples from the account sales of specific customers, and inspect relevant documents of delivery orders and sales invoices, and also verify whether the payment collection subjects are consistent with the delivery subjects, and also perform letter issuance for customers of service revenue, in order to verify the authenticity of the service revenue.

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

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

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

Those charged with governance, Including the Audit Committee, are responsible for overseeing the Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the unconsolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the unconsolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the R.O.C. will always detect a material misstatement when it exists in the unconsolidated financial statements. Misstatements can arise from fraud or error. Misstatements 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 the unconsolidated financial statements.

As part of an audit in accordance with the auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risk of material misstatement of the unconsolidated financial statements due to fraud or error, design and adopt appropriate countermeasures for the risks assessed, and obtain sufficient and appropriate audit evidence in order to be used as the basis for the 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 the management level.
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 of the Company to continue as a going concern. In case where we consider that such events or circumstances have a material uncertainty, then relevant disclosure of the unconsolidated financial statements are required to be provided in our audit report to allow users of unconsolidated financial statements to be aware of such events or circumstances, 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 Lingsen Precision Industries, Ltd. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the unconsolidated financial statements, including relevant notes, and whether the unconsolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entity of the Company, and express an opinion on unconsolidated financial statements. We are responsible for the direction, supervision and performance of the audit of the Company. 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 the governance units with statements that we have complied with relevant matters that may reasonably be thought to bear on our independence, and we have also communicated with the governance units on all relationships and other matters (including relevant protective measures) that may be considered to affect the independence of auditors.

From the matters communicated with those charged with governance, we determine those matters that were of most significant in the audit of the Company’s 2023 unconsolidated

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.

Deloitte Taiwan CPA Shu-Ching Chiang CPA Ting-Chien Su

Financial Supervisory Commission Approval Document No. Jin-Guan-Zheng-Shen-Zi No. 1000028068

Financial Supervisory Commission Approval Document No. Jin-Guan-Zheng-Shen-Zi No. 1070323246

February 26, 2024

Lingsen Precision Industries, Ltd. Parent Company Only Balance Sheets December 31, 2023 and 2022

Unit: In Thousands of New Taiwan Dollars

				December 31,	2023					December 31,	2022
Code	ASSETS			Amount		%				Amount		%
	Current Assets
1100	Cash and cash equivalents (Notes 4 and 6)		$	905,641		13			$	1,146,420		15
1136	Financial assets at amortized cost- current(Notes 4,8,27
	and28)			161,000			2			263,000			3
1140	Contract assets - current (Notes 4 and 20)			117,146			2			94,677			1
1170	Accounts receivable (Notes 4, 9 and 20)			957,070		14				810,312		10
1200	Other receivables (Notes 4 )			13,761			-			11,881			-
1220	Current tax assets (Notes 4 and 22)			57,540			1			44,854			1
1310	Inventories (Notes 4 and 10)			275,965			4			498,820			6
1470	Other current assets (Notes 14)			221,109			3			267,834			4
11XX	Total current assets			2,709,232		39				3,137,798		40
	Non-current assets
1517	Financial assets at fair value through other comprehensive
	income - non-current
	(Note 4 and 7)			11,763			-			9,048			-
1550	Investment accounted for using the equity method (Notes 4
	and 11)			916,893		13				884,958		11
1600	Property, plant and equipment (Notes 4, 12 and 28)			2,874,164		42				3,179,568		41
1755	Right-of-use assets (Notes 4 and 13)			143,259			2			145,342			2
1840	Deferred tax assets (Notes 4, 5 and 22)			166,386			2			145,168			2
1915	Prepayments for facilities			37,057			1			138,629			2
1920	Refundable deposits (Note 4)			1,232			-			534			-
1975	Net defined benefit assets - non-current (Notes 4 and 18)			70,849			1			136,051			2
1990	Other non-current assets			8,670			-			4,685			-
15XX	Total non-current assets			4,230,273		61				4,643,983		60
1XXX	Total assets		$	6,939,505		100			$	7,781,781		100
Code	Liabilities and Equity
	Current Liabilities
2100	Short-term bank borrowings (Notes 15)		$	56,772			1		$	282,778			4
2170	Accounts payable			216,591			3			186,848			2
2200	Other payables (Notes 16 and 27)			428,359			6			457,912			6
2230	Current tax liabilities (Notes 4 and 22)			3,517			-			-			-
2250	Liability reserve - current (Notes 4 and 17)			5,540			-			5,534			-
2280	Lease liabilities - current (Notes 4 and 13)			4,455			-			3,727			-
2320	Long-term borrowings due in one year (Notes 15 and 28)			310,596			5			237,929			3
2399	Other current liabilities			88,663			1			79,315			1
21XX	Total current liabilities			1,114,493		16				1,254,043		16
	Non-current liabilities
2540	Long-term banks borrowings (Notes 15 and 28)			216,361			3			651,957			9
2570	Deferred tax liabilities (Notes 4 and 22)			18,732			1			18,686			-
2580	Lease liabilities - non-current (Notes 4 and 13)			141,277			2			143,637			2
2645	Deposits received			1,900			-			1,936			-
25XX	Total non-current liabilities			378,270			6			816,216		11
2XXX	Total Liabilities			1,492,763		22				2,070,259		27
	Equity
3110	Ordinary shares			3,801,023		55				3,801,023		49
3200	Capital surplus			1,266,753		18				1,265,021		16
	Retained earnings
3310	Legal reserve			121,394			2			91,283			1
3320	Special reserve			165,598			2			91,034			1
3350	Unappropriated earnings			314,447			5			702,042			9
3400	Other equities	(		46,058 )	(		1 )	(		62,466 )	(		1 )
3500	Treasury shares	(		176,415)	(		3)	(		176,415 )	(		2)
3XXX	Total equity			5,446,742		78				5,711,522		73
	Total liabilities and equities		$	6,939,505		100			$	7,781,781		100

The accompanying notes are an integral part of the unconsolidated financial report

Lingsen Precision Industries, Ltd. Parent Company Only Statements of Comprehensive Income

For the Years from January 1 to December 31, 2023 and 2022

Unit: Expressed in NT$ thousand; except earnings (loss) per share expressed in NT$

	2023			2022
	Amount $ 4,725,754 4,551,092 174,662 47,244 149,326 101,360 545) 297,385 122,723) 11,701 13,127 1,186 25,973 - 2,389 19,662 ) 98,330) 63,616)			Amount $ 5,113,539 4,611,188 502,351 52,575 154,554 131,024 ( 403) 337,750 164,601 6,109 12,537 828 77,632 486 14,749 12,573 ) 100,759) 991)	%
( ( ( ( (		(	( ( (		100 90 10 1 3 3 - 7 3 - - - 2 - - - ( 2) -

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Code 7900 Net profit (loss) before income tax 7950 Income tax benefit (Notes 4 and 22) 8200 Net profit (loss) for the year Other comprehensive income (loss) (Note 4) 8310 Items not reclassified subsequently to profit or loss 8311 Remeasurement of defined benefit plans (Note 18) 8316 Unrealized gain/(loss) on investments in equity instruments at fair value through other comprehensive income 8330 Share of other comprehensive profits/losses of subsidiaries and associated companies accounted for using equity method 8349 Income tax related to items that will not be reclassified subsequently (Note 22) 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of the financial statements of foreign operations 8300 Other comprehensive income of the year (net amount after tax) 8500 Total comprehensive income for the year Earnings(loss)per share (Note 23) 9750 Basic 9850 Diluted		2023		% 4 ) 1 3) - - - - - - - - - 3)		2022
		Amount $ 186,339 ) 29,881 156,458) 730 1,018 5,756 146) 7,358 3,381) 3,977 $ 152,481) $ 0.42) $ 0.42)				Amount $ 163,610 43,681 207,291 117,280 ( 8,227) 7,835 23,456) 93,432 9,298 102,730 $ 310,021 $ 0.56 $ 0.55		%
	( ( ( ( ( ( (		( ( (		(			3 1 4 2 - - - 2 - 2 6

The accompanying notes are an integral part of the unconsolidated financial report

Lingsen Precision Industries, Ltd. Parent Company Only Statement of Changes in Equity For the Years from January 1 to December 31, 2023 and 2022

Unit: In Thousands of New Taiwan Dollars

Retained earnings(Note 19) Unappropriated earnings (accumulated deficit) (Note 4) Legal reserve Special reserve $ - $ 160,419 $ 912,825 91,283 - ( 91,283) - - (490,000) - ( 69,385) 69,385 - - - - - - - - 207,291 - - 93,824 - - 301,115 - - - 91,283 91,034 702,042 30,111 - (30,111) - 74,564 (74,564) - - (114,031) - - - - - - - - ( 156,458) - - 584 - - (155,874) - - (13,015) $ 121,394 $ 165,598 $ 314,447	Retained earnings(Note 19) Unappropriated earnings (accumulated deficit) (Note 4) Legal reserve Special reserve $ - $ 160,419 $ 912,825 91,283 - ( 91,283) - - (490,000) - ( 69,385) 69,385 - - - - - - - - 207,291 - - 93,824 - - 301,115 - - - 91,283 91,034 702,042 30,111 - (30,111) - 74,564 (74,564) - - (114,031) - - - - - - - - ( 156,458) - - 584 - - (155,874) - - (13,015) $ 121,394 $ 165,598 $ 314,447	Retained earnings(Note 19) Unappropriated earnings (accumulated deficit) (Note 4) Legal reserve Special reserve $ - $ 160,419 $ 912,825 91,283 - ( 91,283) - - (490,000) - ( 69,385) 69,385 - - - - - - - - 207,291 - - 93,824 - - 301,115 - - - 91,283 91,034 702,042 30,111 - (30,111) - 74,564 (74,564) - - (114,031) - - - - - - - - ( 156,458) - - 584 - - (155,874) - - (13,015) $ 121,394 $ 165,598 $ 314,447	Other equityitems(Note 4) Exchange differences on translation of the financial statements of foreign operations Unrealized Valuation Gain/(Loss) on Financial Assets at Fair Value Through Other comprehensive income ($ 24,628) ($ 46,744) - - - - - - - - - - - - 9,298 ( 392) 9,298 ( 392) - - (15,330) ( 47,136) - - - - - - - - - - - - ( 3,381) 6,774 ( 3,381) 6,774 - 13,015 ($ 18,711) ($ 27,347)	Other equityitems(Note 4) Exchange differences on translation of the financial statements of foreign operations Unrealized Valuation Gain/(Loss) on Financial Assets at Fair Value Through Other comprehensive income ($ 24,628) ($ 46,744) - - - - - - - - - - - - 9,298 ( 392) 9,298 ( 392) - - (15,330) ( 47,136) - - - - - - - - - - - - ( 3,381) 6,774 ( 3,381) 6,774 - 13,015 ($ 18,711) ($ 27,347)	Other equityitems(Note 4) Exchange differences on translation of the financial statements of foreign operations Unrealized Valuation Gain/(Loss) on Financial Assets at Fair Value Through Other comprehensive income ($ 24,628) ($ 46,744) - - - - - - - - - - - - 9,298 ( 392) 9,298 ( 392) - - (15,330) ( 47,136) - - - - - - - - - - - - ( 3,381) 6,774 ( 3,381) 6,774 - 13,015 ($ 18,711) ($ 27,347)	Treasury shares (Note 19) ($ 199,828) - - - - - - - - 23,413 (176,415) - - - - - - - - - ($ 176,415)		Total equity
			Exchange differences on translation of the financial statements of foreign operations ($ 24,628) - - - - - - 9,298 9,298 - (15,330) - - - - - - ( 3,381) ( 3,381) - ($ 18,711)
Legal reserve $ - 91,283 - - - - - - - - 91,283 30,111 - - - - - - - - $ 121,394	Special reserve $ 160,419 - - ( 69,385) - - - - - - 91,034 - 74,564 - - - - - - - $ 165,598
		( ( ( ( ( ( ( (		( (	( (	( ( (	(	$ 5,853,078 - ( 490,000) - 67 7,295 207,291 102,730 310,021 31,061 5,711,522 - - 114,031) 35 1,697 ( 156,458) 3,977 ( 152,481) - $ 5,446,742


				(




$ 121

The accompanying notes are an integral part of the unconsolidated financial report

Lingsen Precision Industries, Ltd.

Parent Company Only Statement of Cash Flows

For the Years from January 1 to December 31, 2023 and 2022

Unit: In Thousands of New Taiwan Dollars

Code Cash flows from operating activities A10000 Net profit (loss) before tax for the year Income/expenses items A20100 Depreciation expense A20300 Expected credit impairment losses A20900 Interest expenses A21200 Interest income A21300 Dividend income A21900 The cost of remuneration on a share-based basis A22400 Share of loss (profit) from subsidiaries and associated companies using the equity method A22500 Gains on disposal of property, plant and equipment A23800 Reversal of impairment loss on non-financial assets A24100 Unrealized foreign currency exchange net profit A29900 Amortization of prepayments A30000 Net changes in operating assets and liabilities A31125 Contract assets A31150 Accounts receivable A31180 Other receivables A31200 Inventories A31240 Other current assets A31990 Net defined benefit assets A32150 Accounts payable A32180 Other payables A32200 Provision (reversal) for liabilities A32230 Other current liabilities A33000 Cash provided by operating activities A33100 Interest received A33300 Interest paid A33500 Income tax returned AAAA Net cash inflow from operating activities	2023 ( $ 186,339 ) 575,786 ( 545 ) 19,662 ( 11,701 ) ( 1,186 ) - 98,330 - 12,182 2,591 4,331 ( 22,469 ) ( 156,266 ) ( 1,833 ) 217,701 39,697 65,932 34,253 ( 15,408 ) 6 9,348 684,072 11,654 ( 19,892 ) ( 606) 675,228	2022
		$ 163,610 548,266 403 12,573 ( 6,109) ( 828) 7,711 100,759 ( 486 ) 33,520 1,105 2,767 40,982 626,685 8,997 125,284 ( 39,142 ) ( 6,762) ( 291,538) ( 228,111) 1,554 15,425 1,115,859 5,890 ( 12,118 ) ( 155,183) 954,448

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Code Cash flows from investing activities B00050 Disposition of financial assets at amortized cost B02200 Net cash outflow for obtaining subsidiaries B02700 Purchase of property, plant and equipment B02800 Proceeds from disposal of property, plant and equipment B03700 Increase in refundable deposits B06700 Increase in other non-current assets B07100 Increase in prepaid facilities amount B07600 Dividends received BBBB Net cash outflow from investment activities Cash flows from financing activities C00100 Increase in short-term bank borrowings C00200 Decrease in short-term bank borrowings C01600 Proceeds from long-term bank borrowings C01700 Repayments of long-term bank borrowings C03000 Increase in guarantee deposits received C04020 Repaid principal of lease liabilities C04500 Payment of cash dividends C04800 Employees execute stock options C09900 Uncollected overdue dividends CCCC Net cash inflow (outflow) from financing activities EEEE Increase (decrease) of cash and cash equivalents for the year E00100 Beginning cash and cash equivalents of the year E00200 End cash and cash equivalents of the year	2023 $ 102,000 ( 127,890 ) ( 170,573 ) - ( 698 ) ( 8,316 ) ( 6,910 ) 1,186 ( 211,201) 855,011 ( 1,078,438 ) - ( 362,929 ) ( 36 ) ( 4,418 ) ( 114,031 ) - 35 ( 704,806) ( 240,779 ) 1,146,420 $ 905,641	2022
		$ - ($ 29,710 ) ( 464,172 ) 486 ( 210 ) ( 1,613) ( 104,584 ) 828 ( 598,975 ) 749,733 ( 659,781 ) 300,000 ( 290,814 ) ( 49,886) ( 4,420) ( 490,000) 23,350 67 ( 421,751) ( 66,278) 1,212,698 $1,146,420

The accompanying notes are an integral part of the unconsolidated financial report

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Lingsen Precision Industries, Ltd.

Notes to Parent Company Only Financial Statements

For the Years Ended December 31, 2023 and 2022

(Amounts are expressed in thousands of New Taiwan Dollars or foreign currency, unless stated

otherwise)

1. Company History

Lingsen Precision Industries, Ltd. (referred to as the “Company”) was established in Taichung Tanzi Technology Industrial Park in April 1973 and began its operation in July 1973. The main business is IC packaging and testing as well as optoelectronic devices.

In April 1998, the Company's shares were listed on the Taiwan Stock Exchange (TWSE).

The parent company only financial statements were expressed in New Taiwan dollars, which is the Company's functional currency.

2. Approval Date and Procedures of the Financial Statements

These parent company only financial statements were approved by the Board of Directors on February 26, 2024.

3 . Application of New, Amended And Revised Standards and Interpretations

(1) Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRSs”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the amendments to the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the Company’s accounting policies.

(2)The IFRSs endorsed by the FSC for application starting from 2024

New, Revised or Amended Standards and Interpretations Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback” Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” Amendments to IAS 1 “Non-current Liabilities with Covenants” Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”	Effective Date Announced by IASB(Note 1) January 1, 2024(Note 2) January 1, 2024 January 1, 2024 January 1, 2024 (Not3)

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Note 1:Except additional illustrations, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.
Note 3:The amendments provide some transitions relief regarding disclosure requirements.

As of the date the parent company only financial statements were authorized for issuance, the Company is continuously assessing the possible impact of the application of other standards and interpretations on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

(3)New IFRSs issued by International Accounting Standards Board (IASB) but not yet endorsed and issued into effect by the FSC

New, Revised or Amended Standards and Interpretations Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between An Investor and Its Associate or Joint Venture” IFRS 17 “Insurance Contracts” Amendments to IFRS 17 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 21 “Lack of Exchangeability”	Effective Date Announced by IASB (Note 1) To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025 (Note 2)

Note 1: Unless stated otherwise, the above New IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.
Note 2: The Company shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the Group recognizes any effect as an adjustment to the opening balance of retained earnings. When the Group uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

4. Summary of Significant Accounting Policies

(1) Statement of Compliance

These parent company only financial statements were prepared in accordance with

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the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”.

(2) Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments and the present value of the defined benefit obligation deducting the net defined benefit assets of the fair value of any plan assets which are measured at fair value.

The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

1) Level 1 inputs: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
3) Level 3 inputs are unobservable inputs for the asset or liability.

In preparing the parent company only financial statements, the equity method is adopted to the investments in subsidiaries and associates. For the purpose of making the current profit and loss, other comprehensive income and equity in the parent company only financial statements identical to those in the Company's owner, several accounting treatment differences under individual and this basis are adjusted into “Investments Accounted for Using Equity Method”, “Share of the Profit or Loss of Subsidiaries and Associates Accounted for Using the Equity Method”, “Share of Other Comprehensive Income of Subsidiaries and Associates Accounted for Using Equity Method” and related items.

(3) Classification of Current and Non-current Assets and Liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets that are expected to be realized within twelve months from the balance sheet date; and
3) Cash and cash equivalent (unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the date of statement of financial position).

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities expected to be settled within twelve months after the maturity of the debt (even if the liability at the date of statement of financial position to complete the long-term refinancing prior to the financial statements or reschedule payment agreement), and
3) Liabilities for which the repayment date cannot be extended unconditionally to
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more than twelve months after the balance sheet date.

Assets and liabilities that are not classified as current are classified as non-current.

(4) Foreign Currency

In preparing the financial statements, transactions in currencies (foreign currencies) other than the Company’s functional currency are recognized at the exchange rates prevailing at the dates of the transactions.

Foreign currency monetary amount is translated at the closing rate at each date of the balance sheet. Exchange differences arising from settlement or translation are recognized as profit or loss at the period.

Non-monetary foreign currencies held at fair value at the exchange rates prevailing at the date of transaction; however, non-monetary foreign currencies held at fair value through other comprehensive income are recognized in other comprehensive income.

Non-monetary items carried at historical cost are reported using the exchange rate at the date of the transaction and will not calculated again.

In preparing the parent company only financial statements, assets and liabilities from foreign operation, including subsidiaries whose location or currency are different from the Company, are translated into the presentation currency, the New Taiwan dollar, at the exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates at the period. The resulting currency translation differences are recognized in other comprehensive income.

(5) Inventories

Inventories include raw materials, finished goods, and work in process. Inventories are stated at the lower of cost or net realizable value. The lower of cost and net realizable value is based on the individual inventory items. Net realized value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale. The inventory cost is measured by using First In, First Out.

(6) Investment in subsidiaries

The Company’s investments in the subsidiaries are accounted for using the equity method.

Subsidiaries are entities which the Company holds the control of.

Under the equity method, an investment is initially recognized in the statements of financial positional cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiaries as well as the distribution received. In addition, the Company also recognizes its share in the changes in equities of subsidiaries.

Changes in equity in the ownership of subsidiaries which do not result in loss of control are disposed as equity transaction. The difference between carrying amount invested and the fair value paid and payable or received and receivable is directly recognized as equity.

The loss of shares of the subsidiary equals or exceeds the Company's interest in that subsidiary, including the carrying amount of that subsidiary under equity method and

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other long-term equity as the Company's net investment in that subsidiary, is recognized as loss according to proportion of shareholding.

The Company considers cash-generating unit in the entire financial statement as testing for impairment and compares its recoverable amount with its carrying amount. If the recoverable amount of assets increases, the reversal of impairment loss will be recognized as profit. However, the carrying amount of assets after the reversal of impairment loss shall not exceed the carrying amount that would have been determined net of required amortization and have no impairment loss been recognized. Impairment loss of goodwill shall not reverse in the subsequent period.

If the Company loses the control of its subsidiary, it remeasures the retained investments in its former subsidiary as the fair value on initial recognition of a financial asset. The difference between the fair value of the retained investments and any disposal proceeds and the carrying amount of investment at the date is recognized in the current profit or loss. All amount related to that subsidiary is also recognized in other comprehensive income. The accounting treatment is compliance with the basis of rules that Company needs to follow for its direct disposal of assets or liabilities.

Unrealized profit and loss from downstream transactions with a subsidiary is eliminated in the parent company only financial statements. Profit and loss from upstream and side stream transactions between subsidiaries are recognized in the Company’s parent company only financial statements only to the extent that interests in the subsidiary are not related to the Company.

(7) Investment in Associates

The associates are entities which are material to the Company, but not subsidiaries or joint venture companies.

The Company’s investments in the associates are accounted for using the equity method.

Under the equity method, an investment is initially recognized in the statements of financial positional cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the associates as well as the distribution received. The Company also recognizes its share in the changes in equities of associates.

The Company discontinues recognizing its share of further losses if its share of losses of the associate equals or exceeds its interest in the associate. The Company recognizes the additional losses and liabilities which occur in the scope of legal obligation, constructive obligation or payment on behalf of the associates only.

The entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss is not amortized to any assets as part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

(8) Property, plant and equipment

The property, plant and equipment are recognized at costs and subsequently measured at costs of the amount less accumulated depreciation and impairment losses.

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Property, plant and equipment in the course of construction for production are recognized as the cost of the amount less accumulated depreciation and impairment losses. And such cost includes professional service fees and borrowing costs eligible for capitalization. Upon completion and ready for intended use, such assets are classified to the appropriate categories of property, plant and equipment, and depreciation of these assets commences.

Depreciation is recognized using the straight-line method, and each significant part is depreciated separately. The Company reviews the estimated useful lives, residual values and depreciation method at least at the end of each reporting period, and with the effect of any changes in estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

(9) Impairments of related assets including property, plant and equipment, right-of-use assets and contract cost

At the end of each reporting period, the Company reviews whether there is any indication that its property, plant and equipment, right-of-use assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

Inventories recognized in customers' contracts are recognized as impairment loss in accordance with Inventory write off policy and the aforementioned regulations. Subsequently, the excess of carrying amount of assets associated with contract cost over the price received from providing relevant products or service, less direct relevant costs, is recognized as impairment loss. Then the carrying amount of assets associated with contract cost is computed to its cash-generating unit to evaluate the impairment losses on cash-generating unit.

When impairment loss subsequently reverses, the carrying amounts of the asset, cash-generating units or contract cost and related assets are increased to the revised recoverable amounts. However, the increased carrying amounts shall not exceed the carrying amounts of the asset, cash-generating units or contract cost and related assets which were not recognized as impairment loss at the past period (less amortization or depreciation). The reversal of impairment loss is recognized as profit or loss.

(10) Financial instruments

Financial assets and liabilities shall be recognized in the parent company only financial statements when the Company becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial

17 -

assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

1) Classification of measurement

Financial assets held by the Company are classified to financial assets measured at amortized cost and investments in equity instruments measured at fair value through other comprehensive income.

i. Financial assets measured at amortized cost

When the financial assets invested by the Company satisfiy the following two criteria at the same time, it is classified as the amortized cost financial assets:

a. Where the financial assets are held under certain business model, and the purpose of such model is to hold the financial assets in order to collect contract cash flows; and
b. Where contract terms generated cash flow of specific date and such cash flow is completely for the payment of the interest of principle and external circulating principle amount.

Financial assets measured at amortized cost include cash and cash equivalent, financial assets at amortized cost- current, contract assets, note receivables, account receivables, other receivables, other current assets and refundable deposits. When the recognition commences, effective interest method is used to determine the carrying amount less any amortized cost of depreciation. Any exchange gains and losses are recognized as gains and losses.

Except for the following two circumstances, calculation of interest income is based on effective interest rate multiplied by total financial asset’s carrying amount:

a. Purchase or origination of credit-impaired financial loans, interest income, credit-adjusted effective interest rate plus financial loans, post-calculation.
b. Non-purchased or originated credit-impaired financial loans, provided that subsequent credit-impaired financial loans continue to be credit-impaired;

Credit losses on financial assets are significant financial difficulty of the issuer or borrower, a breach of contract, it becoming probable that the borrower will enter bankruptcy or other financial reorganization, or the disappearance of an active market for the financial asset because of financial difficulties.

Cash equivalents, for the purpose of meeting short-term cash commitments, consist of highly liquid time deposits and investments that

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are readily convertible to known amounts of cash, which are subject to an insignificant risk of changes in value and acquired within three months.

ii) Investments in equity instruments measured at fair value through other comprehensive income

On initial recognition, the Company may irrevocably designate investments in equity instruments that is not held for trading and not recognized as contingent consideration as at FVTOCI.

Investments in equity instruments measured at fair value through other comprehensive income are measured at fair value. Subsequently the changes in fair value are reported in other comprehensive income and accumulated in other equity. On disposal of investments, the accumulated profit or loss is directly transferred to retained earnings and it is not reclassified to profit or loss.

The dividend from investments in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss upon the Company's right to receive payment is established, except for apparently the dividend representing the recovery of the partial investment cost.

2) Impairments of financial assets and contract assets

At the date of each balance sheet, the Company reviews expected credit losses to estimate the impairment loss of financial assets, including notes receivable, and contract assets measured at amortized cost.

The loss allowance for accounts receivable is measured at an amount equal to useful lives expected credit losses. Other financial assets are assessed to determine whether the credit risk has significantly increased since the original recognition. If there is no significant increase, then the allowance loss is recognized according to the 12-month expected credit loss. If it has increased significantly, then allowance loss is recognized according to the lifetime expected credit loss.

Expected credit losses are weighted average credit losses with the probability of default events. The 12-month expected credit losses are expected credit losses that result from default events possible within 12 months after the reporting date. Lifetime expected credit losses result from all possible default events over the expected life of the financial instruments.

For the purpose of internal controls on credit risk, without considering the collaterals it holds, the Company determines the following events as a breach of contract:

i) There is internal or outside information prevails that it is not possible the borrower pays off the debt.
ii) The overdue exceeds the average credit period, unless reasonable and supportable information indicates that a delayed default basis is more appropriate.

All impairment losses on financial assets is decreased its carrying amount through contra accounts.

3) Derecognition of financial assets
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The Company derecognizes the financial assets only when the contractual rights to the cash flows from the financial assets expire, or when it transfers the financial assets and substantially all the risks and rewards of ownership of the financial assets to another entity.

On derecognition of financial assets at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of Investments in equity instruments measured at fair value through other comprehensive income, the cumulative gain or loss that had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

Financial liabilities

1) Follow-up measurement

Financial liabilities are measured at amortized cost using effective interest method.

2) Derecognition of financial liabilities

On the derecognition of financial liabilities, the difference between their carrying amount and the consideration paid and payable, including any transfer of non-cash assets or liabilities, is recognized as profit or loss.

(11) Provision for liabilities

The amount recognized as a provision for liabilities is, taking risk and uncertainty of obligation into consideration, the best estimate of the expenditure required to settle the obligation at the date of balance sheet.

(12) Revenue recognition

The Company allocates the transaction price to each performance obligation and recognizes the revenue when each of the obligations is satisfied after the customer has identified it.

1) Sales revenue

Sales revenue comes from the sale of semiconductor materials. Since the clients are eligible for pricing and using the products as well as responsible for reselling and taking the risk of depreciation upon the delivery of semiconductor materials, the Company shall recognize the revenue and accounts receivable upon the sale.

2) Service income

Service Income comes from packaging and final testing.

When the customer simultaneously receives and consumes the benefits provided by the Company's performance of packaging and final testing service, or the customer controls an asset which the Company's performance has created or enhanced, the related revenue is recognized. Packaging of products counts on involvement of technicians. The Company measures the work in progress by the percentage of completion. The contract with customer states that the customer will be billed after the packaging or the delivery is completed. A contract asset is thus recognized when the Company renders the service and transferred to accounts receivable when the packaging or delivery

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is completed. Final testing counts on the involvement of technicians. The Company measures the work in progress by the percentage of completion. Contract customer will be billed after the completion of service, and the Company will recognize accounts receivable when rendering the service.

(13) Leases

At the inception of a contract, the Company assesses whether the contract is, or contains, a lease.

1) The Company as lessor

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Under the operating lease, lease payments less lease incentives granted are recognized as revenue on a straight-line basis. The initial direct cost which occurs on granting operating leases is the carrying amount accumulated to the underlying assets and is recognized as expense on a straight of line basis.

2) The Company as lessee

Except for payments for low-value asset leases and short-term leases applicable to exemption of recognition are recognized as expenses on a straight-line basis, the Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of the lease.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities, lease payments made before commencement date less lease incentives granted initial direct costs as well as estimated costs to restore the underlying assets. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the parent company only balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments and the default fine arises from lease termination. The lease payments are discounted using the interest rate in a lease if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized as profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

(14) Borrowing costs

Borrowing costs that can be directly attributable to the acquisition, construction or production of a qualifying asset, that necessarily takes a substantial period of time to

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get ready for its intended use or sale, are included in the cost of the asset.

Where funds are borrowed specifically, costs eligible for capitalization are the actual costs incurred less any income earned on the temporary investment of such borrowings.

Other borrowing costs at the period are recognized as profit or loss.

(15) Employee benefits
1) Short-term employee benefits

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

2) Pensions

For defined contribution plans, the amount of contribution payable in respect of service rendered by employees in that period should be recognized as expenses.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the Projected Unit Credit Method. Service cost and net interest on the net defined benefit assets are recognized as employee benefits expense in the period they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which they occur.

Net defined benefit assets represents the actual deficit in the Group’s defined benefit plan. Net defined benefit assets shall not exceed the present value of refunds from the plan or reductions in future contributions to the plan.

(16) Share-Based Payment Agreement - Employee Stock Option

Employee stock options for employees

Employee stock options are recognized as expenses on a straight-line basis during the vesting period based on the fair value of the equity instrument on the date of grant and the best estimated quantity expected to be acquired, and at the same time adjust the capital reserve - employee stock options. If it is immediately vested on the grant date, it shall be fully recognized as an expense on the grant date.

The Company revises the estimated number of employee stock options expected to be acquired on each balance sheet date. If there is a revision to the original estimated quantity, the affected number is recognized as profit or loss, so that the accumulated expenses reflect the revised estimate, and the capital reserve-employee stock option is adjusted accordingly.

(17) Income tax

The provision for income tax recognized in profit or loss comprises current and deferred tax.

1) Current tax

The Company has determined the current losses and calculated receivable taxes

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in accordance with regulations established by the jurisdiction for tax return.

According to Income Tax Act in Republic of China, an additional income tax levied at unappropriated earnings is recognized in shareholders' annual meeting.

Income tax payable for prior period is adjusted to the current income tax.

2) Deferred tax

Deferred tax is accounted for temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax basis used in the computation of taxable profit or loss.

Deferred tax liability is generally recognized for all taxable temporary differences. Deferred tax asset is recognized for deductible temporary differences or loss carryforwards to the extent that taxable profit is probably available.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, except where the Company can control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits to realize the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the date of balance sheet and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered. The deferred tax assets originally not recognized is also reviewed at the date of balance sheet and increased to the extent that it is probable that sufficient taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the year in which the liability is settled or the asset is recovered, based on tax rates and laws that have been enacted or substantively enacted by the date of balanced sheet. The measurement of deferred tax liabilities and assets reflects the tax consequences that arise from the manner in which the Company expects, at the date of balance sheet, to recover or settle the carrying amount of its assets and liabilities.

3) Current and deferred tax for the year

Current and deferred tax are recognized in profit or loss, except the current and deferred tax that relates to items recognized in other comprehensive income or directly in equity are recognized respectively in other comprehensive income or directly in equity.

5. Significant Accounting Assumptions and Judgment, and Major Sources of Estimation Uncertainty

In the application of the Company’s accounting policies, the management is required to make judgments, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated

23 -

assumptions are based on historical experiences and other factors that are considered relevant. Actual results may differ from these estimates.

The Company incorporates the recent development of major accounting estimates such as cash flow estimation, growth rate, discount rate, and profitability. For these considerations, management will continue to review the estimates and underlying assumptions. Revisions to accounting estimates are recognized in the period when the estimates are revised if the revisions affect only that period. If revisions affect both current and future periods, the accounting estimates are recognized in the current and future periods.

Major source of estimates and assumption uncertainty – Income Tax

Upon the date of December 31, 2023, the balance of unused loss carryforwards was NT$138,073,000.The carrying amount of deferred tax assets related to temporary differences for 2023 and 2022 were NT$166,386,000 and NT$145,168,000 respectively. The realizability of deferred tax assets mainly depends on whether there will be sufficient profits or taxable temporary differences in the future. A significant reversal of deferred tax assets will be recognized as gain or loss if the real profits in the future are less than expected. Such reversal is recognized as gain or loss during the occurrence period.

6. Cash and cash equivalents

Cash on hand and petty cash Check and demand deposit Cash equivalents Time deposits Short-term notes and bills Annual interest rate (%) Cash in banks Time deposits Short-term notes and bills	December 31,2023 $ 245 281,658 474,000 149,738 $ 905,641 0.001-1.45 1.09-1.6 0.85	December 31,2022	December 31,2022
			$ 248 511,368 535,000 99,804 $ 1,146,420 0.001-1.05 0.975-1.05 0.65

7. Financial assets at fair value through other comprehensive income- non-current

Listed and OTC stocks ETREND Hightech Corp. Emerging stocks Amtek Semiconductors Co., Ltd. Xpert Semiconductor Inc.	December 31,2023 $ 3,146 8,617 - $ 11,763	December 31,2022	December 31,2022
			$ 1,811 7,237 - $ 9,048

The Company invests the aforementioned common stocks in accordance with long-term strategic objectives and expects to profit from long-term investments. The management of the Company deems if the short-term volatility at fair value of such investments recognized in profit or loss is not consistent with the aforementioned long-term investment plan, it will be determined that such investments are measured through other comprehensive income at fair value.

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8. Financial assets at amortized cost- current

ial assets at amortized cost-current
Time deposits with an initial maturity more than three months Time deposit pledged	December 31,2023 $ 160,000 1,000 $ 161,000	December 31,2022
			$ 160,000 103,000 $ 263,000

As of December 31, 2023 and 2022, annual rate of time deposits with an initial maturity more than three months is 1.1%-1.575% and 0.35%-1.44%, respectively.
Please see Tables 28 for the information of financial assets at amortized cost- current.

9. Accounts receivable

nts receivable
Amortized cost Total carrying amount Less: Allowance for bad debts	December 31,2023 $ 958,236 ( 1,166) $ 957,070	December 31,2022
	(	(	$ 812,023 1,711) $ 810,312

The average collection period for selling products and rendering service of the Company is 60 to 90 days, excluding accounts receivable. Credit of key customers is rated by using other public available financial information and historic transaction records. The Company continues supervising credit risk exposure and credit rating of the counterparty, as well as distributing the total transaction amount into different qualified customers. In addition, the management shall review and approve counterparty's line of credit for the purpose of managing credit risk exposure.

To mitigate credit risk, the management of the Company has designated functional working group responsible for decision on line of credit, credit approval and other supervision to ensure proper action has been taken to collect overdue accounts receivable. In addition, the collectible amount of accounts receivable of the Company shall be reviewed individually at the date of balance sheet to ensure the uncollectible accounts receivable has been listed to appropriate impairment loss. Accordingly, the management of the Company considers the Company's credit risk has significantly decreased.

The loss allowance for accounts receivable of the Company is measured at an amount equal to useful lives expected credit losses. For the useful lives expected credit losses, customers' default on records and present financial position, economic trends, as well as GDP expectation and industry outlook are considered. The experience on the Company's credit losses presents that types of loss on different customer groups do not bring obvious differences. Thus the rate of expected credit losses is set based on accounts receivable aging, without further grouping customers.

If any evidence shows the counterparty faces significant financial difficulty and the collectible amount cannot be reasonably expected, the Company will directly offset the relevant accounts receivable but keep track of the receivables. The recovered amount is recognized in profit or loss.

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The loss allowance for accounts receivable is measured as follows:

December 31, 2023 Expected credit loss (%) Total carrying amount Allowance for loss Amortized cost December 31, 2022 Expected credit loss (%) Total carrying amount Allowance for loss Amortized cost		0~90 days	Aging 91~180 days	Aging 91~180 days	Aging 181~365 days	Aging 181~365 days	Aging over 365 days	Aging over 365 days		Total
	(	0.1 $ 947,931 958) $ 946,973 0~90 days	2 $ 10,289 ( 206) $ 10,083 Aging 91~180 days		10 $ 16 ( 2) $ 14 Aging 181~365 days		100 $ - - $ - Aging over 365 days		(	$ 958,236 1,166) $ 957,070 Total
	(	0.1 $ 800,230 803) $ 799,427	(	2 $ 9,971 200) $ 9,771	(	10 $ 1,238 124) $ 1,114	(	100 $ 584 584) $ -	(	$ 812,023 1,711) $ 810,312

Changes on allowance for accounts receivable loss are as follows:

Balance at the beginning of the year Reversal Balance at the end of the year		2023 $ 1,711 ( 545) $ 1,166		2022
				$ 2,114 ( 403) $ 1,711

10. Inventories

ntories
Raw materials Finished goods Work in process	December 31,2023 $ 275,965 - - $ 275,965	December 31,2022
			$ 498,820 - - $ 498,820

nventory-related operating costs as of 2023 and 2022 are NT$4,551,092,000 and NT$4,611,188,000 respectively.

Operating costs include the following items:

Revenue from sale of scraps Inventory valuation losses Supply inventory valuation losses	2023 ( $ 43,406 ) 5,154 7,028	2022
		( $ 48,625 ) 33,520 1,170

Investments accounted for using the equity method

Investment in subsidiaries Investment in Associates	December 31,2023 $ 916,893 -	December 31,2022	December 31,2022
			$ 884,958 -

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(1) Investment in subsidiaries

Investment in subsidiaries
Investees Private entity Lingsen Holding (Samoa) Inc. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Lee Shin Investment Co., Ltd. Lingsen America Inc. Nexus Material Corporation Less: Transferred treasury shares Accumulated impairment loss		December 31,	2023 Equity% 100 64 99 100 100 78		December 31,2022
		Amount $ 128,390 408,399 220,165 249,741 65,773 27,154 1,099,622 176,415 ) 6,314) $ 916,893			Amount $ 97,576 414,837 220,169 243,633 64,380 27,092	Equity%
						100 64 99 100 100 78
	( (			( (	1,067,687 176,415 ) 6,314) $ 884,958

The Company has been approved by Investment Commission, MOEA to invest in Lingsen Holding (Samoa) Inc. at NT$29,710,000 (US$1,000,000), NT$31,260,000 (US$1,000,000), NT$96,630,000 (US$3,000,000)respectively in June 2022 and July 2023, October 2023. In the meantime, Lingsen Holding (Samoa) Inc. indirectly reinvested in Ningbo Liyuan Technology Co., Ltd. through the investment company Li Yuan Investments Co., Ltd.

Sooner Power Semiconductor Co., Ltd. handled 392,402,000 in November 2022 to reduction in capital for the previous year cumulative losses, the real-shares after paying capital are 216,988,000, which was all subscribed by the Company to maintain its share at 99%.

Please see Tables 3 and 4 for detailed investments in subsidiaries indirectly held by the Company.

The share of profit or loss and other comprehensive income of subsidiaries accounted for using the equity method in 2023 and 2022 are in accordance with auditors' reports of each subsidiary as of the same period.

(2) Investment in Associates

Investment in Associates
Investees Private entity Qi Feng Technology Co., Ltd. Less: Accumulated impairment loss		December 31,2023 Amount Sharehol ding $ 11,417 30% 11,417) $ -		December 31,2022
		Amount $ 11,417 11,417) $ -		Amount $ 11,417 11,417) $ -	Sharehol ding
	(		(		30%

Investments accounted for using the equity method as well as the Company's share of profit or loss and other comprehensive income are not calculated in accordance with auditors' reports. However, the management of the Company determines that it shall have little influence if financial statements of Qi Feng Technology Co., Ltd. are not audited.

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12. Property, Plant and Equipment

erty, Plant and Equipment
Assets used by the Company Assets subject to operating leases	December 31,2023 $ 2,692,402 181,762 $ 2,874,164	December 31,2022
			$ 2,992,935 186,633 $ 3,179,568

(1)	Assets used 2023 Cost Balance at the beginning of the year Increase Decrease Reclassification Balance at the end of the year Accumulated depreciation Balance at the beginning of the year Increase Decrease Reclassification Balance at the end of the year Carrying amounts at December 31,2023 2022 Cost Balance at the beginning of the year Increase Decrease Reclassification Balance at the end of the year Accumulated depreciation Balance at the beginning of the year Increase Decrease Balance at the end of the year Carrying amounts at December 31,2022	by the Company Buildings Machinery and equipment $2,380,470 $3,303,314 7,660 87,340 ( 33,275 ) ( 246,142 ) 45,877 108,482 $2,400,732 $3,252,994 $ 964,661 $1,903,010 109,847 375,215 ( 33,275 ) ( 246,142 ) 42,362 $1,083,595 $2,032,083 $1,317,137 $1,220,911 Buildings Machinery and equipment $2,272,481 $3,170,351 14,925 302,715 ( 39,536 ) ( 486,425 ) 132,600 316,673 $2,380,470 $3,303,314 $ 899,381 $2,026,171 104,816 363,264 ( 39,536) (486,425) $ 964,661 $1,903,010 $1,415,809 $1,400,304	Transportati on Equipment $ 18,827 - - - $ 18,827 $ 11,853 1,171 - - $ 13,024 $ 5,803 Transportati on Equipment $ 19,385 5,933 ( 6,491 ) - $ 18,827 $ 17,621 723 ( 6,491) $ 11,853 $ 6,974	Office equipment $ 32,745 ( 2,591 ) - $ 30,154 $ 18,899 3,224 ( 2,591 ) - $ 19,532 $ 10,622 Office equipment $ 25,896 9,359 ( 2,510 ) - $ 32,745 $ 18,701 2,708 ( 2,510) $ 18,899 $ 13,846	Other equipment $ 313,773 49,120 ( 44,346 ) 1,000 $ 319,547 $ 163,002 76,589 ( 44,346 ) - $ 195,245 $ 124,302 Other equipment $ 256,466 91,249 ( 39,572 ) 5,630 $ 313,773 $ 135,501 67,073 ( 39,572) $ 163,002 $ 150,771	Unfinished construction $ 5,231 12,911 - ( 4,515) $ 13,627 $ - - - - $ - $ 13,627 Unfinished construction $ 111,680 31,781 - (138,230) $ 5,231 $ - - - $ - $ 5,231	Total cost
		( (					$6,054,360 157,031 ( 326,354 ) 150,844 $6,035,881 $3,061,425 566,046 ( 326,354 ) 42,362 $3,343,479 $2,692,402 Total cost
		( (	( (	( (	( (	(	$5,856,259 455,962 ( 574,534 ) 316,673 $6,054,360 $3,097,375 538,584 (574,534) $3,061,425 $2,992,935

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Depreciation is computed on a straight-line basis over the following estimated useful life:

Buildings
Plant building	45 ~ 50 years
Hydropower air-conditioning engineering	3 ~ 20 years
Machinery and equipment	3 ~ 7 years
Transportation Equipment	5 ~ 7 years
Office equipment	3 ~ 7 years
Other equipment	3 ~ 7 years

Please see note 28 for the amount of property, plant, and equipment used by the Company pledged as collaterals.

(2) Assets subject to operating leases

2023 Cost Balance at the beginning of the year Reclassification Balance at the end of the year Accumulated depreciation Balance at the beginning of the year Increase Reclassification Balance at the end of the year Carrying amounts at December 31,2023 2022 Cost Balance at the beginning of the year Increase Balance at the end of the year Accumulated depreciation Balance at the beginning of the year Increase Balance at the end of the year Carrying amounts at December 31,2022			Buildings
		( (	$ 280,189 42,362) $ 237,827 $ 93,556 4,871 42,362) $ 56,065 $ 181,762 $ 279,629 560 $ 280,189 $ 88,752 4,804 $ 93,556 $ 186,633

The Company has used buildings based on operating leases with a lease term of 1 to 18 years. All operating lease contracts include the clause where the lessee shall adjust the lease payment according to market rent when a right of renewal is exercised. The lessee has no bargain purchase option on such asset after the end of the lease period.

The operating lease payments receivable for the buildings is as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Over 5 years	December31,2023 $ 7,879 4,144 4,144 4,144 4,144 20,719 $ 45,174	December31,2022	December31,2022
			$ 11,854 4,920 4,920 4,920 4,920 20,922 $ 52,456

29 -

Depreciation is computed on a straight-line basis over the following estimated useful life:

Buildings 45 ~ 50 years

13. Lease agreements

(1) Right-of-use assets

Right-of-use assets
Carrying amount of right-of-use assets Land Buildings Addition of right-of-use assets Depreciation expense of right-of-use assets Land Buildings	December31,2023		December31,2022
		$ 141,977 1,282 $ 143,259 2023		$ 145,342 - $ 145,342 2022
		$ 2,786 $ 4,227 642 $ 4,869		$ - $ 4,232 646 $ 4,878

Except for the depreciation expenses recognized above, there were no major sublease and impairment loss of the right-of-use assets of the Company in 2023 and 2022.

(2) Lease liabilities

Lease liabilities
December 31,2023 Carrying amount of lease liabilities Current $ 4,455 Non-current $ 141,277 Ranges of discount rates for lease liabilities are as follow December 31,2023 Land 0.67%-1.64% Buildings 0.67%-1.50%	December 31,2022 $ 3,727 $ 143,637 December 31,2022 0.67%-0.91% 0.67%-0.91%

		0.67%-0.91% 0.67%-0.91%

(3) Material leases and terms

The Company leases several lands and buildings for the use of plants, office buildings and employee dormitories with a lease term of 1 to 10 years. Upon the termination of the lease period, the Company has no bargain purchase option for leased lands and buildings.

(4) Information on other lease

Please see Note 12 for agreements that the Company sells property, plant and equipment used by the Company under operating leases.

Expenses relating to short-term leases Total cash outflow for leases		2023 $ 1,428 ($ 6,942)		2022
			(	$ 1,663 $ 7,177)

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The Company leases certain machinery and equipment, buildings and building leases which qualify as short-term leases. The Company has elected to apply the recognition exemption and thus did not recognize right-of-use assets and lease liabilities for these leases.

14. Other current assets

		December 31,2023	December 31,2023	December 31,2023	December 31,2022	December 31,2022
	Current
	Supply inventory	$	186,926		$	223,832
	Prepayments			25,147		11,128
	Payments on behalf of others			6,626		28,102
	Input tax			2,130		4,537
	Others			280		235
		$	221,109		$	267,834
15.Borrowings
(1)	Short-term bank borrowings
		December 31,2023			December 31,2022
	Credit loans	$		-	$	250,000
	Import/export financing loans			56,772		32,778
		$		56,772	$	282,778
	Annual interest rate (%)
	Credit loans		-			1.72-2.02
	Import/export financing loans		6.31-6.41			5.50
(2)	Long-term bank borrowings
		December 31,2023			December 31,2022
	Mortgage loan(Note 28)			$ 150,000	$ 300,000
	Credit loans			376,957		589,886
				526,957		889,886
	Less: Amount falling due in one year		(	310,596)	(	237,929)
	Amount falling due after one year			$ 216,361	$ 651,957
	Annual interest rate (%)
	Mortgage loan			1.78	1.38-1.65
	Credit loans		1.37-1.53		0.58-1.91
	Maturity date
	Mortgage loan		2025.06		2025.06
	Credit loans	2026.03-2026.05			2024.04-2026.05
16.Other payables
		December		31,2023	December 31,2022
	Payables for Wages and bonuses	$	186,644		$	193,641
	Payables for factory supplies			88,676		84,708
	Payables for annual leave			52,999		49,493
	Payables for purchases of equipment			8,496		22,060

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Payables for remuneration of employees and remuneration of directors Others	December 31,2023 - 91,544 $ 428,359	December 31,2023 - 91,544 $ 428,359	December 31,2022	December 31,2022
				22,310 85,700 $ 457,912

17. Provisions - Current

Provisions for sales returns and allowances are, estimated under experiences, judgment of the management and other known reasons for the probable sales returns and allowances, and recognized as the subtraction of operating revenue upon the related service is provided and products are sold at the current year.

Changes on provisions are as below:

Changes on provisions are as below:
Balance at the beginning of the year Current recognition Balance at the end of the year		2023 $ 5,534 6 $ 5,540		2022
				$ 3,980 1,554 $ 5,534

18. Retirement benefits plan

(1) Defined contribution plans

The pension system of the “Labor Pension Act” is applicable to the Company, belonging to the affirmed appropriation of pension plan under the management of the government, and pension is appropriated at the rate of 6% of the monthly salary of employees into the personal dedicated account of the Bureau of Labor Insurance.

(2) Defined benefit plans

The Company has labor pension system as defined benefit plans under the Labor Standards Act of R.O.C... The payment of the employee pension is made based on an employee’s length of service and average monthly salary for the six-month period prior to retirement approved. The Company contributes an amount equal to 3 percent of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee’s name in the Bank of Taiwan. Before the end of each year, the balance in the Funds is assessed. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees qualified with retirement requirements in the next year, the Company is required to make up the difference all at once with one appropriation, which is required to be made before the end of March of next year. The Funds are operated and managed by the government’s designated authorities. Accordingly, the Company does not have any right to intervene in the investments of the Funds.

The amount of defined benefit plans recognized in the consolidated balance sheets is as follows:

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Present value of defined benefit obligation Fair value of plan assets Net defined benefit assets	December 31,2023 $ 608,362 ( 679,211) ($ 70,849)	December 31,2022
	( (	$ 618,521 ( 754,572) ($ 136,051 )

Movements the net defined benefit assets are as follows:

Balance at January 1, 2023 Service cost Current service cost Interest expense (income) Defined benefit costs recognized in profit or loss Remeasurement of the net defined benefit liability/asset Return on plan assets (excluding amounts included in net interest expense) Actuarial loss (gain) - changes in demographic assumptions - changes in financial assumptions - experience adjustments Defined benefit costs recognized in other comprehensive income Contributions from employer Get it back after expiration Benefits paid Balance as of December 31, 2023 Balance as of January 1, 2022 Service cost Current service cost Interest expense (income) Defined benefit costs recognized in profit or loss Return on plan assets (excluding amounts included in net interest expense) Actuarial loss (gain) - changes in demographic assumptions - changes in financial assumptions - experience adjustments Defined benefit costs recognized in other comprehensive income Contributions from employer Benefits paid Balance as of December 31, 2022		Present value of defined benefit obligation $ 618,521 5,120 7,911 13,031 - 1 2,726 6,951 9,678 - - ( 32,868) ( 32,868) $ 608,362 $ 730,046 6,879 5,021 11,900 - 3 ( 36,848 ) ( 24,174 ) ( 61,019) - ( 62,406) ( 62,406) $ 618,521	Fair value of plan assets ($ 754,572) - ( 9,758) ( 9,758) ( 10,408 ) - - - ( 10,408) ( 6,500 ) 69,638 32,389 95,527 ($ 679,211) ($ 742,055) - ( 5,168) ( 5,168) ( 56,261) - - - ( 56,261) ( 12,500 ) 61,412 48,912 ($ 754,572)	Net defined benefit liabilities(assets)	Net defined benefit liabilities(assets)
			( ( ( ( ( ( ( ( ( ( ( ( ( (	( ( ( ( ( ( ( ( ( ( ( ( ( (
		( ( (

33 -

Due to the defined benefit plans under the Labor Standards Act of R.O.C. the Company is exposed to the following risks:

1) Investment risk: The pension funds are invested in domestic and foreign equity securities, debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau of Labor Funds’ designated authorities or under the mandated management. However, the distributable amount of plan assets of the Company shall not be less than the return calculated by the average interest rate on a two-year time deposit published by the local banks.
2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation. However, the return on the debt investments of the plan assets will increase as well. The two will be partially offset on net defined benefit liabilities
3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation of the Company are carried out by qualified actuaries. The principal assumptions are as follows:

follows:
Discount rate Expected salary increase rate	December 31,2023 1.25% 2.00%	December 31,2022
		1.30% 2.00%

If reasonably likely changes respectively occur in the principal assumptions and all other assumptions are held constant, the amount of present value of the defined benefit obligation is increased or decreased as follows:

Discount rate Increase by 0.25% Decrease by 0.25% Expected salary increase rate Increase by 0.25% Decrease by 0.25%	December 31,2023 ($ 13,454) $ 13,903 $ 13,765 ($ 13,389)	December 31,2022	December 31,2022
	( (	( (	$ 14,474) $ 14,981 $ 14,839 $ 14,411)

The sensitivity analysis presented above may not reflect the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

Contributions expected in one year Average maturity of defined benefit obligation	December 31,2023 $ 6,000 9 years	December 31,2022	December 31,2022
			$ 12,000 9 years

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19. Equity

(1) Ordinary shares

Ordinary shares
Authorized shares (in thousands) Authorized capital Issued and paid shares (in thousands) Issued capital	December 31,2023 500,000 $ 5,000,000 380,102 $ 3,801,023	December 31,2022
			500,000 $ 5,000,000 380,102 $ 3,801,023

A holder of issued common shares with par value of NT$10 per share is entitled to vote and to receive dividends.

(2) Capital surplus

Capital surplus
Additional paid-in capital From convertible bonds Treasury stock transaction s Donations	December 31,2023 $ 1,123,151 126,434 16,640 528 $ 1,266,753	December 31,2022
			$ 1,123,151 126,434 14,943 493 $ 1,265,021

The capital surplus generated from donations and the excess of the issuance price over the par value of capital stock (including the stock issued for new capital, convertible bonds, treasury stocks and difference between the price of acquisition or disposal of subsidiaries' equity and the book value) may be used to offset a deficit. In addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or stock dividends to the paid-in capital. However, stock dividends may not exceed a certain percent of the paid-in capital.

(3) Retained earnings and dividend policy

Surplus earning distribution policy under the Company's Articles of Incorporation states that when allocating earnings, the Company shall pay the tax, offset its losses, set aside its legal capital reserve at 10% of the retained earnings, and then set aside or reverse special capital reserve in accordance with relevant laws or regulations; if here are earnings left, along with accumulated unappropriated earnings, the Board of Directors shall propose the surplus earning distribution for shareholders' meeting to determine the allocation of dividends and bonus. Please see Note 21 for distribution policy for employees’ compensation, and remuneration of directors under the Company's Articles of Incorporation.

Legal capital reserve shall be set aside until its balance equals to full amount of the paid-in capital. The reserve may be used to offset a deficit. When the Group has no deficit, the portion in excess of 25% of the paid-in capital may be used to distribute as dividends in stocks or cash.

The Company held regular shareholders' meetings in May 2023 and June 2022 respectively and passed the 2022 and 2021 earnings distribution proposals as follows:

follows:
Legal reserve	2022 $ 30,111		2021
			$ 91,283

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Provision(reversal) of special reserve Cash dividends Cash dividend per share (NT$)	2022 $ 74,564 $ 114,031 $ 0.30			2021
			($ 69,385) $ 490,000 $ 1.29

The Company approved loss make-up proposal of 2023 in the Company's board of directors on February 26, 2024. Due to the loss in 2023, after the deficit was compensated with the reversal of special reserve of NT$72,715,000, the Company proposed a capital reserve distribution of 114,031,000 in cash (NT$0.3 per share).

The distribution of loss for 2023 is subject to the resolution of the shareholders’ meeting to be held in May 2024.

(4) Treasury stocks

The treasury stocks held by the Company, in accordance with Securities and Exchange Act, shall not be pledged and is not entitle to distribute dividends and to vote.

vote.
January 1, 2023 to December 31, 2023 January 1, 2022 Decrease in 2022 December 31, 2022		Eransferred shares to Employee (shares) - 2,000,000 2,000,000) -		Shares held by a subsidiary (shares) 5,658,911 5,658,911 - 5,658,911	Total(shares)
	(				(	5,658,911 7,658,911 2,000,000) 5,658,911

The relevant information on the Company's shares held by Lee Shin Investment Co., Ltd. is as follows:

December 31, 2023 December 31, 2022	Total shares held(shares) 5,658,911 5,658,911		Carrying amount $ 129,589 $ 73,283	Market value	Market value
					$ 129,589 $ 73,283

The shares of the Company held by a subsidiary shall be regarded as treasury stocks. It is given the same rights as the common shareholders, except for capital increase from the Company and voting right.

20. Revenue

evenue
Revenue from contracts with custome Service income Sales revenue		2023 $ 4,688,469 37,285 $ 4,725,754		2022
				$ 5,080,398 33,141 $ 5,113,539

36 -

(1) Contract balance

Contract balance
Contract assets - current Accounts receivable	December 31, 2023 $ 117,146 957,070 $ 1,074,216	December 31, 2022 $ 94,677 810,312 $ 904,989		January 1, 2022
				$ 135,659 1,439,848 $ 1,575,507

(2) Timing of revenue recognition

Timing of revenue recognition
Performance obligation satisfied over time Performance obligation satisfied at a point in time		2023 $ 4,688,469 37,285 $ 4,725,754		2022
				$ 5,080,398 33,141 $ 5,113,539

21. Employee benefits and depreciation expenses

Classified as 2023 Employee benefit expense Short-term employee benefits Labor and health insurance expense Pensions Defined contribution plans Defined benefit plans Remuneration of Directors Other employee benefits Depreciation expenses 2022 Employee benefit expense Short-term employee benefits Labor and health insurance expense Pensions Defined contribution plans Defined benefit plans Remuneration of Directors Other employee benefits Depreciation expenses	operatingcosts $ 1,102,201 131,008 44,342 2,853 - 85,411 561,841 $ 1,102,300 131,374 42,643 5,844 - 89,415 511,173	operatingexpenses $ 167,433 16,823 6,736 420 1,800 10,148 13,945 $ 185,495 16,942 6,687 888 5,518 10,122 37,093	Total
			$ 1,269,634 147,831 51,078 3,273 1,800 95,559 575,786 $ 1,287,795 148,316 49,330 6,732 5,518 99,537 548,266

For the years of 2023 and 2022, the Company had average 2,294 and 2,409 employees respectively, which included 5 non-employee directors for both years.

Average labor cost for the years 2023 and 2022 were NT$685,000 and 662,000 respectively. Average salary and bonus were NT$555,000 and 536,000 respectively. The average salary and bonus increase by 4% year over year.

37 -

The Company's remuneration policy

Except for independent directors receive a certain amount of remuneration, the remuneration of directors is reasonably provided according to the result of corporate operation and the director's performance and participation. For remunerations of managerial officers and employees, remunerations are paid according to their respective job positions, responsibilities, future risk and contribution level to the business objectives and according to the remuneration management regulations of the Company.

Under the Company's Articles of Incorporation, the Company shall accrue employees’ compensation and remuneration of directors at the rates of no less than 10% and no higher than 2% respectively, of net profit before income tax, of remuneration of employees and remuneration of directors. Due to a deficit in 2023, the remuneration of employees and remuneration of directors have not been estimated yet.The remuneration of employees and directors in 2022 was resolved by the board of directors in February 2023 respectively as follows:

2023 respectively as follows:
Remuneration of employees Remuneration of directors	2022
		Amount
	Accrual Rate	(cash)
	10% 2%	$ 18,592 $ 3,718

If there is a change in the amounts after the annual parent company only financial statements are authorized for issuance, the differences are recorded as a change in the accounting estimate.

There is no difference between the actual distribution amount of employee and director remuneration in 2022 and the recognized amount in the individual report of 2022.

Please see “Market Observation Post System” (MOPS) under the Taiwan Stock Exchange for the information on the remuneration of employees and remuneration of directors determined by the board of directors.

22. Income tax

(1) Main components of income tax expense recognized in profit or loss

		2023		2022
Current tax
Income tax expense generated in the
current year	$	-	$	-
Taxation on Undistributed Earnings		4,120		20,046
Adjustment on prior years	(	12,683)		-
	(	8,563)		20,046
Deferred tax
Income tax expense generated in the
current year	(	4,635)	(	26,453 )
Adjustment on prior years	(	16,683)	(	37,274 )
	(	21,318)	(	63,727)
Income tax
profit recognized in profit or loss	($	29,881)	($	43,681 )

38 -

A reconciliation of accounting income and income tax expense is as follows:

Income tax expense (benefit) calculated at the statutory rate Permanent differences Temporary differences Current period loss carryforward Taxation on Undistributed Earnings Deferred tax Adjustment on prior years Income tax profit recognized in profit or loss		2023 ($ 37,268) 32,633 3,642 993 4,120 ( 21,318) ( 12,683) ( $ 29,881 )	2022
			$ 32,720 ( 59,173 ) 7,083 19,370 20,046 ( 63,727) - ( $ 43,681 )

(2) Deferred tax assets and liabilities

Defined benefit costs recognized inprofit or loss $ 1,031 1,406 701 1 403 3,542 993 $ 4,535 ( $ 100 ) $ - ($ 100) $ - 6,704 ( 650 ) 311 138 6,503 19,370 $ 25,873 ( $ 79 ) ( 501 ) $ - ($ 580)	Defined benefit costs recognized in other comprehensive income $ - - - - - - - $ - $ - 146 $ 146 ( $ 4,974 ) - - - - ( 4,974 ) - ($ 4,974) $ - - 18,482 $ 18,482	Balance at the end of theyear
		$ 14,424 1,640 10,600 1,108 541 28,313 138,073 $ 166,386 $ 104 $ 18,628 $ 18,732


	(	$ - 13,393 9,899 1,107 138 24,537 120,631 $ 145,168 $ 204 - $ 18,482 $ 18,686
	( (
(

(3) The total amount of deductible temporary differences for which is relevant to invested subsidiaries and no deferred tax assets have been recognized is as follows:

December 31, 2023 December 31, 2022 $ 2,624,283 $ 2,525,953

39 -

(4) Income tax examination

The tax authorities have examined the income tax returns of the Company through 2021.

23. Earnings (loss) per share

2021. ings (loss) per share
2023 Basic loss per share Net loss attributed to the owners of the Company Effect of potentially dilutive ordinary shares Remuneration of employees Diluted loss per share Effect of net loss attributed to the owners of the Company plus potential ordinary shares 2022 Basic earnings per share Net profit attributed to the owners of the Company Effect of potentially dilutive ordinary shares Remuneration of employees Diluted earnings per share Effect of net profit attributed to the owners of the Company plus potential ordinary shares		Net profit (loss) attributable to owners of the Company ($ 156,458) - ($ 156,458) $ 207,291 - $ 207,291	Number of shares (denominator) (in thousand) 374,443 - 374,443 373,457 2,442 375,899	Earnings (loss) per share(NT$)
					($ 0.42) ($ 0.42) $ 0.56 $ 0.55

Since the Company offered to settle compensation paid to employees in cash or shares, the Company assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares was included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year. Due to the Company's net loss in 2023, the calculation of diluted net loss per share without including the impact of employee compensation's anti-dilutive potential ordinary shares.

24. Share-Based Payment Agreement

Treasury stock grants to employees

In June 2022, the board of directors resolve to allocate a total of 2,000,000 shares of treasury stocks, which was bought back during from June to August 2020, to employees for subscription. The value of subscription rights per share calculated according to the Black-Scholes valuation model is $3.8556, and the recognized remuneration cost is $7,711,000. The parameters used in the valuation model are as follows:

Grant-date share price $15.56 Exercise price $11.71 Expected volatility 28.85%

40 -

Expected duration period	0.0301 years
Expected dividend yield	0%
Risk-free interest rate	0.59%

25. Capital risk management

The Company manages its capital to ensure that it is able to maximize shareholders return as a going concern through the optimization of the debt and equity balance. The overall strategy has not changed.

The Company's capital structure is consisting of net debt (leases less cash and cash equivalent) and equity (common stocks, capital surplus, retained earnings and other equity).

The Company is allowed not to follow other external laws or regulations on capital.

The key management of the Company reviews its capital structure for each season, including the consideration on costs of every type of capital and relevant risks. Based on the key management's advice, the Company balances its overall capital structure by paying dividend payments, new shares issuance, share repurchase and new debt issuance or debt repayment, etc.

26. Financial instruments

(1) Information on fair value
1) Financial instruments that are not measured at fair value

The management of the Company considers that the carrying amounts of financial assets and liabilities that are not measured at fair value approximate its fair value or its fair value cannot be reliably measured.

2) Financial instruments that are measured at fair value on a recurring basis
i. Fair value hierarchy

December 31,2023 Financial assets at fair value through other comprehensive income Emerging stocks Listed and OTC stocks December 31,2022 Financial assets at fair value through other comprehensive income Emerging stocks Listed and OTC stocks		Level 1 $ - 3,146 $ 3,146 $ - 1,811 $ 1,811		Level 2 $ - - $ - $ - - $ -		Level 3 $ 8,617 - $ 8,617 $ 7,237 - $ 7,237		Total
								$ 8,617 3,146 $ 11,763 $ 7,237 1,811 $ 9,048

There was no transfer of fair value measurements between Level 1 and Level 2 for 2023 and 2022.

ii) Reconciliation of Level 3 fair value measurements on financial instruments
41 -

Financial assets Balance at the beginning of the year Unrealized gains (loss) from financial assets measured at fair value through other comprehensive income Balance at the end of the year	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income	Financial assets at fair value through other comprehensive income
		Equityinstruments
		2023 $ 7,237 1,380 $ 8,617		2022
				$ 7,105 132 $ 7,237

iii) Valuation techniques and input value used in Level 3 fair value measurement

The securities of emerging stocks held by the Company have no market price reference and thus are evaluated under the cost approach. Its fair value is computed in reference to investment assets.

(2)

Categories of financial instruments

Categories of financial instruments
Financial assets Financial assets measured at amortized cost Financial assets at fair value through other comprehensive income Financial liabilities Amortized cost	December 31,2023 $ 2,155,850 11,763 990,936	December 31,2022
		$ 2,326,824 9,048 1,553,916

Balance of financial assets measured at amortized cost includes cash and cash equivalent, financial assets at amortized cost- current, contract assets, accounts receivable, other receivables and refundable deposits, and other financial assets measured at amortized cost.

Balance of financial liabilities measured at amortized cost includes short-term bank borrowings, accounts payable, other payables, long-term bank borrowings (including amount falling due in one year) and guarantee deposits received and other financial liabilities measured at amortized cost.

(3) Financial risk management objectives and policies

The majority of financial instruments include equity instrument investments, accounts receivable, accounts payable, borrowings and lease liabilities, etc. The financial management department provides service for each unit by organizing and coordinating the market operation nationally and internationally, supervising and reporting the internal risks by analyzing risk exposure according to the extent and breadth of risk, and managing financial risks associated with the Company's operation. Such risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

42 -

1) Market risk

The Company is exposed to the financial market risks, primarily changes in foreign currency exchange rates and interest rates, due to its operation.

The Company is exposed to market risk associated with financial instruments and the management and measurement of such exposure have not changed.

i) Foreign currency risk

The Company's sales and purchase transactions are denominated in foreign currency, which exposes the Company to foreign currency risk. Approximately 26%~30% of sales revenue is not denominated in functional currency and approximately 43%~47% of the cost is not denominated in functional currency.

Please see Note 30 for the carrying amount of monetary assets and liabilities denominated in non-functional currency at the date of balance sheet.

Sensitivity analysis

The Company is mainly affected by fluctuations in USD and JPY.

The following table details the Company’s sensitivity analysis to a 1% increase and decrease in NTD against the relevant foreign currency. The rate of 1% is the sensitivity rate used when reporting foreign currency risk internally to the key management and represents the management’s assessment of the reasonably likely change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and the end-of-year exchange rate is adjusted to 1% increase and decrease. The following table details the amount resulting in changes in net loss before tax to a 1% increase and decrease in NTD against the relevant foreign currency.

Impact of fluctuations in exchange rate on profit or loss

Categories of currency USD Japanese yen	2023 $ 1,296 30	2022
		$ 2,839 161

ii) Interest rate risk

The Company is exposed to interest rate risk for the reason that it has borrowed money at both fixed and variable rate. The Company maintains an appropriate fixed and floating rate for portfolio to manage interest rate risk. The hedge is evaluated on a regular basis, which makes its point of view and the established risk preference identical, to ensure the most efficient hedging strategy is adopted.

The carrying accounts of financial assets and liabilities exposed to

43 -

interest rate risk at the date of balance sheet are as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities	December 31,2023 $ 439,738 145,732 624,037 583,729	December 31,2022
		$ 460,804 347,364 945,767 972,664

Sensitivity analysis

The following sensitivity analysis is determined in accordance with interest rate risk of non-derivative instruments at the date of balance sheet. For the floating rate liabilities, the analysis is to assume that the amount of liabilities outstanding at the date of balance sheet is all outstanding at the reporting period. The rate of change is expressed as the increment or decrement by 1% when reporting to the management personnel internally of the Company, which also represents the management's assessment of the reasonable interest rate change.

For floating-rate financial assets and liabilities, when interest rate is increase by 1% and other conditions remain unchanged, the net profit (loss) before tax of the Company in 2023 and 2022 are NT$403,000 and NT$269,000 respectively.

iii) Other price risk

The Company is exposed to price risk due to investments in equity secures. The management of the Company manages the risk by investing in portfolio with different risks.

Sensitivity analysis

The following sensitivity is analyzed according to the exposure to equity price risk at the date of balance sheet.

If the equity price changes by 1%, the other comprehensive income in 2023 and 2022 will increase and decrease NT$31,000 and NT$18,000 respectively due to changes in fair value of financial assets measured at fair value through profit or loss.

2) Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. The maximum credit risk exposure due to the financial loss arising from the counterparty not performing its obligation and the Company's financial guarantee primarily results from:

i) The carrying amount of financial assets recognized in the parent
44 -

company only balance sheet.

ii) The Company has given financial guarantee and not taken the maximum amount to be paid into consideration.

The Company's credit risk is mainly resulted from its five largest customers. As of December 31, 2023 and 2022, the aforementioned customers are accounted for 45% and 48% of accounts receivable and contract assets, respectively.

3) Liquidity risk

The Company manages and maintains a level of cash and cash equivalents adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, the management of the Company monitors the utilization of borrowings and ensures compliance with loan conditions.

The bank borrowing is a material source of liquidity to the Company. As of December 31, 2023 and 2022, the undrawn loan amounts are as follows:

Undrawn loan amounts	December 31,2023 $ 1,151,841	December 31,2022	December 31,2022
			$ 1,126,408

Liquidity and interest risks of non-derivative financial liabilities

The funds are adequate to the Company's operations and thus the Company is not exposed to liquidity risk and financing to meet the contractual obligations.

The maturity of the Company’s non-derivative financial liabilities which the repayment period has been committed is as follows:

December 31,2023 Non-interest bearing liabilities Lease liabilities Floating-rate liabilities December 31,2022 Non-interest bearing liabilities Lease liabilities Floating-rate liabilities Fixed-rate liabilities		Within 1year $ 405,307 5,514 367,368 $ 778,189 $ 379,316 4,789 320,707 200,000 $ 904,812		1 to 3years $ - 15,088 216,361 $ 231,449 $ - 9,531 608,191 - $ 617,722	More than 3years	More than 3years
						$ - 147,516 - $ 147,516 $ - 156,413 43,766 - $ 200,179

The further information on a maturity analysis of lease liability is below:

December 31, 2023 Lease liabilities December 31, 2022 Lease liabilities		Within 1 year		1-5years		5~10 years
		$ 5,514 $ 4,789		$ 24,291 $ 18,918		$138,313
						$147,026

45 -

The amount of the aforementioned floating rate instrument of non-derivative liabilities will change resulting from the floating rate is different from the interest rate estimated at the date of balance sheet.

27. Related-party transactions

The transactions between the Company and other related parties, excluding those disclosed in other notes, are as follows:

(1) Related party name and categories

(1)	Related party name and categories
(2)	Related PartyName Lingsen America Inc. Ningbo Liyuan Technology Co., Ltd. Lee Shin Investment Co., Ltd. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Operating income Relatedpartycategory Third-tier subsidiary		Relationshipwith the Company
			Subsidiary Third-tier subsidiary Subsidiary Subsidiary Subsidiary 2023 1,015	2022
		$		$ -

The operating income is from the sale of raw materials to subsidiaries and no other similar non-related party transaction can be compared. The payment will be collected at 60 days T/T following the date the goods are sold.

(3) Purchase

Purchase
Relatedpartycategory Third-tier subsidiary		2023 $ 1,898		2022
				$ -

Raw materials are purchased form subsidiary, and no other similar non-related party transaction can be compared. The payment is collected at 30 days T/T following the date the goods are sold in principle.

(4) Operating expense - commission expense

The Company has signed a commission agreement with Lingsen America Inc. states that the Company shall pay a 2% commission on monthly sales revenue of particular exports in the U.S.A. (in USD). The commission expenses in 2023 and 2022 are NT$2,503,000 and NT$2,043,000, respectively. The commissions payable as of December 31 2023 and 2022 are NT$513,000 and NT$393,000, respectively.

(5) Non-operating income - rent income

Non-operating income - rent income
Related PartyCategory/Name Subsidiary	2023 36 $ 36	2022
			36
			$ 36

The majority of non-operating income is rent income of machinery and equipment and office.

46 -

(6)
(7)
(8)

Non-operating income - other revenue
Related party category
2023
2022
Third-tier subsidiary
$ 95
$ 229
Endorsements/guarantees
Company
Guarantees
December 31,
2023
December 31,
2022
Third-tier
subsidiary
Bank loans
$USD5,000 $USD5,000
The following assets are pledged by the Company as collaterals for subsidiaries'
loans:
December 31,2023
December 31,2022
Pledged time deposits
(Financial assets at
amortized cost- current)
$ -
$ 103,000
Remuneration of key management personnel
2023
2022
Short-term employee benefits
$ 28,889
$ 40,406
Pensions

400

400
$ 29,289
$ 40,806

The remuneration of directors and other key management personnel were determined by the Remuneration Committee in accordance with the individual performance and the market trends.

28. Pledged assets

(1) The Company provides the following assets (Financial assets at amortized cost - current) as a deposit out for customs duties accounting:

current) as a deposit out for customs duties accounting:
December31,2023 December31,2022 Pledged time deposits (Financial assets at amortized cost- current) $ 1,000 $ - (2) The following assets are pledged as collaterals for bank loan limit: December 31,2023 December 31,2022 Property, plant and equipment $777,571 $ 817,981 Pledged time deposits (Financial assets at amortized cost- current) - 103,000 $ 777,571 $ 920,981	December31,2022
		$ 817,981 103,000 $ 920,981

29. Significant Contingent Liabilities and Unrecognized Commitments

Significant contingent commitments of the Company at the end of balance sheet, excluding those disclosed in other notes, are as follows:

(1) For customs duties guarantee and other objectives, the financial institution has provided guarantee details as follows:
47 -

December 31,2023 $ 28,000 (2) Unrecognized commitments are as follows: December 31,2023 Purchase of property, plant and equipment $ 32,954	December 31,2022	December 31,2022
	$ 28,000 December 31,2022
		$ 127,388

(3) As of December 31, 2023, the Company had opened unused letters of credit for the purchase of raw materials and machinery and equipment, amounting to NT$508,000.

30. Significant subsecuent events

On February 17, 2024, the Board of Directors passed the resolution of position of Ningbo Liyuan Technology Co., Ltd., Ningbo Liyuan Technology Co., Ltd. owned by Li Yuan Investments Co., Ltd., The Group will sell its shares to Zhejiang Yin'an Enterprise Management Co., Ltd. After the completion of the equity transfer, the Group will lose control of the Ningbo Liyuan Technology Co., Ltd.

As of passing the financial report, the above-mentioned subsidiary company's plans are currently in progress.

31. Significant information on exchange rate of foreign currency financial assets and liabilities

The following information is summarized according to the foreign currencies other than the functional currency of the Company. The exchange rates disclosed are used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies are as follows:

Foreign currency assets Monetary items USD Japanese yen Non-monetary items Investment accounted for using the equity method USD Foreign currency liabilities Monetary items USD Japanese yen	December31,2023 Foreign Currency Exchange rate NTD $ 10,384 30.705 $ 318,841 68,123 0.2172 14,796 6,323 30.705 194,147 $ 6,163 30.705 $ 189,235 54,338 0.2172 11,802	December31,2023 Foreign Currency Exchange rate NTD $ 10,384 30.705 $ 318,841 68,123 0.2172 14,796 6,323 30.705 194,147 $ 6,163 30.705 $ 189,235 54,338 0.2172 11,802	December31,2022	December31,2022	December31,2022
	Foreign Currency $ 10,384 68,123 6,323 $ 6,163 54,338	Exchange rate 30.705 0.2172 30.705 30.705 0.2172	Foreign Currency $ 14,063 123,574 5,274 $ 4,818 54,126	Exchange rate 30.71 0.2324 30.71 30.71 0.2324	NTD
					$ 431,875 28,719 161,965 147,961 12,579

Significant unrealized exchange gains (losses) are as follows:

48 -

2023	2022
Exchange rate 30.705(USD : NTD) 0.2172(JPY: NTD)	Exchange rate 30.71 (USD : NTD) 0.2324 (JPY: NTD)	Net exchange gains (losses)
			($ 1,113) 424 ($ 689)

32. Other disclosures

(1) Information on significant transactions:
1) Financing provided to others: None.
2) Endorsements/guarantees provided: Table 1.
3) Marketable securities held (excluding investment in subsidiaries, associates): Table 2.
4) Marketable securities acquired and disposed at costs or prices at least NT$300 million or 20% of the paid-in capital: None.
5) Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None.
6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None.
7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
9) Trading in derivative instruments: None.
10) Other: None.
(2) Information on investees: Table 3.
(3) Information on Investment in Mainland China
1) 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, income (losses) of the investee, share of profits/losses of investee, ending balance, amount received as dividends from the investee, and the limitation on investee: Table 4.
2) Significant direct or indirect transactions through a third area with the investee in the Mainland Area, and its prices and terms of payment, unrealized gain or loss are as follows:
49 -
The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: None.
ii) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: None.
iii) The amount of property transactions and the amount of the resultant gains or losses: None.
iv) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 1.
v) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: None.
vi) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services: Note 27.
(4) Information of major shareholders: names, numbers of shares held, and shareholding percentages of shareholders who hold 5% or more of the equity: Table 5.
50 -

Lingsen Precision Industries, Ltd. and Subsidiaries

Endorsements/guarantees provided

For the year ended December 31, 2023

Table 1

Unit: Amounts expressed in New Taiwan Dollars and in thousands of foreign currency

No.	Endorsement/ guarantee provider	Guaranteed party	Guaranteed party	Limits on endorsement/g uarantee amount provided to each guaranteed party (Note)	Maximum balance for the period	Ending balance	Amount actually drawn	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of accumulated endorsement/g uarantee to net equity per latest financial statements(%)	Maximum amount of endorsement/g uarantee allowance (Note)	Guarantee provided by parent company	Guarantee provided by subsidiary	Guarantee provided to subsidiaries in Mainland China
		Company Name	Relationship
0	Parent Company	Ningbo Liyuan Technology Co., Ltd.	Third-tier subsidiary	$ 817,011	$ 153,525 (USD5,000)	$ 153,525 (USD 5,000)	$ 61,410 (USD 2,000)	$ -	3	$ 1,634,022	Y	-	Y

Note: Limits on endorsement/guarantee amount provided to each guaranteed party shall not exceed 15% of the net worth and maximum amount allowance shall not exceed 30% of the net worth.

51 -

Lingsen Precision Industries, Ltd. and its subsidiaries

Marketable securities held

December 31, 2023

Table 2

Unit: Amounts expressed in thousands of New Taiwan Dollars/ shares

Holding company name	Marketable securities types and name	Relationship with the issuers	Financial statement account		End ofyear	End ofyear
				Shares/Units	Carrying amount	Shareholding %	Fair value (Note 3)
Parent Company Lee Shin Investment Co., Ltd.	Stock Amtek Semiconductors Co., Ltd. ETREND Hightech Corp. Xpert Semiconductor Inc. Stock The Company Enrich Tech CO., Ltd. ETREND Hightech Corp.	None None None Parent company None None	Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current Financial assets at fair value through other comprehensive income- non-current	685,464 75,000 44,891 5,658,911 2,467,186 150,000	$ 8,617 3,146 - 129,589 22,663 6,293	2 - - 1 19 -	$ 8,617 3,146 - 129,589 22,663 6,293

Note 1: Please see Tables 3 and 4 for related information on investment in subsidiaries.

Note 2: Fair value of investment in emerging stocks is computed in reference to investment assets under the cost approach.

52 -

Lingsen Precision Industries, Ltd. and its subsidiaries

Information on investees

For the year ended December 31, 2023

Table 3						Unit: Amounts expressed in	Unit: Amounts expressed in	Unit: Amounts expressed in	thousands of New Taiwan Dollars/ shares	thousands of New Taiwan Dollars/ shares
Investor	Investee	Location	Main business	Initial investment amount		Balance	at December 31,2022		Current income (losses) of the investee	Share of income (losses) recognized
				End of current year	End of last year	Number of shares	Ratio %	Carrying amount
Parent Company Lee Shin Investment Co., Ltd. Lingsen Holding (Samoa) Inc.	Lingsen Holding (Samoa) Inc. Panther Technology Co., Ltd. Sooner Power Semiconductor Co., Ltd. Lee Shin Investment Co., Ltd. (Notes`１`) Nexus Material Corporation (Notes 2) Lingsen America Inc. Qi Feng Technology Co., Ltd. (Note 2) Sooner Power Semiconductor Co., Ltd. Nexus Material Corporation Li Yuan Investments Co., Ltd.	Samoan Islands Hsinchu County, Taiwan Hsinchu County, Taiwan Taichung City Hsinchu County, Taiwan California, U.S.A. Taichung City Hsinchu County, Taiwan Hsinchu County, Taiwan Cayman Islands	General investments IC testing Electronic parts and components manufacturing General investments Wholesale of electronic materials and electronic parts and components manufacturing Intermediary Electronic parts and components production and processing Electronic parts and components manufacturing Wholesale of electronic materials and electronic parts and components manufacturing General investments	$ 1,846,348 230,146 215,148 300,000 53,483 32,311 24,000 912 14,192 1,846,348	$ 1,718,458 230,146 215,148 300,000 53,483 32,311 24,000 912 14,192 1,718,458	58,000,000 22,922,899 21,514,797 30,000,000 5,348,315 1,000,000 2,400,000 98,660 1,419,214 58,000,000	100 64 99 100 78 100 30 1 21 100	$ 128,390 408,399 220,165 73,326 20,840 65,773 - 1,010 5,530 128,390	( $ 93,726 ) ( 10,111 ) ( 4 ) 352 78 1,424 - ( 4 ) 78 ( 93,726 )	( $ 93,726 ) ( 6,438 ) ( 4) 352 62 1,424 - - 16 ( 93,726 )

Note 1: Treasury stocks have been deducted from the carrying amount of Lee Shin Investment Co., Ltd.

Note 2: Accumulated impairment loss has been deducted from the carrying amount of Nexus Material Corporation and Qi Feng Technology Co., Ltd. Note 3: See Table 4 for related information on investee in Mainland China.

53 -

Lingsen Precision Industries, Ltd. and Subsidiaries

Information on Investment in Mainland China

For the year ended December 31, 2023

Table 4

Unit: Amounts expressed in New Taiwan Dollars and in thousands of foreign currency

Name of Investee in Mainland China	Main business	Paid-in capital	Investment method	Accumulated investment amount of outflow from Taiwan at the beginning of theyear	Outward remittance or repatriation of investment amount at beginningof theyear	Outward remittance or repatriation of investment amount at beginningof theyear	Accumulated investment amount of outflow from Taiwan at the end of the year	Current income (losses) of the investee	Ownership percentage of direct or indirect investment	Investment gain (loss) recognized for the year (Note 2)	Book value of investment at the end of year	Inflow of investment revenue to Taiwan upon the end of the year
					Outward remittance	Repatriation
Ningbo Liyuan Technology Co., Ltd.	IC packing and testing as well as optoelectronic devices	USD 58,000	(Note 1)	$ 1,718,458 ( USD 54,000 )	$ 127,890 ( USD 4,000 )	$ -	$ 1,846,348 ( USD 58,000 )	( $ 93,726 )	100%	( $ 93,726 )	$ 128,390	$ -

					limitation on investee regulated under Investment Commission, MOEA (Note 3) $ 3,268,045
Accumulated investment amount of outflow in China mainland from Taiwan at the end of theyear		Investment amount approved by Investment Commission, MOEA			limitation on investee regulated under Investment Commission, MOEA (Note 3)
$ 1,846,348 ( USD 58,000 )		USD 63,000			$ 3,268,045

Note 1: Investment in Mainland China companies through a company invested and established in a third region. Note 2: Investment in profit or loss in accordance with reports audited by the CPA from the parent company. Note 3: Limitation is calculated under 'Regulations Governing the Examination of Investment or Technical Cooperation in Mainland China'.

54 -

Lingsen Precision Industries, Ltd.

Information of Major Shareholders December 31, 2023

Table 5

Name of major shareholder	Shares	Shares
	Total shares held (shares)	Shareholding percentage
Trust account in CTBC Bank for ESOP committee of Lingsen Precision Industries, ltd.	23,996,906	6.31%

Note 1: This table is based on the information provided by the Taiwan Depository & Clearing Corporation for shareholders holding greater than five percent of the shares completed the process of registration and book-entry delivery in dematerialized form, including treasury stocks, at the last business date of current quarter. There may be a discrepancy in the number of shares recorded on the parent company only financial statements and its dematerialized securities arising from the difference in basis of preparation.
Note 2: As table above, the shareholder who delivers the shares to the trust is disclosed by the individual trustee who opened the trust account. In accordance with the Security Exchange Act, the shareholders have to disclose the insider equity more than 10% of the shares, including their own shares and their delivery to the trust, and have the right to make decisions on the trust property. Information on insider equity is available on the Market Observation Post System (MOPS) website.
55 -

§Statements of Major Accounting Items

Item
Statements of assets, liabilities, and equity items
Statement of cash and cash equivalents
Statement of accounts receivable
Statement of inventories
Statement of other current assets
Statement of changes in financial assets measured at fair value
throughother comprehensive income- non-current
Statement of changes in investments accounted for using the
equity method
Statement of changes in property, plant and equipment
Statement of changes in right-of-use assets
Statement of deferred tax assets
Statement of short-term borrowings
Statement of accounts payable
Statement of other payables
Statement of provisions - current
Statement of lease liabilities
Statement of long-term borrowings
Statement of deferred tax liabilities
Statements of profit or loss items
Statement of operating revenue
Statement of operating costs
Statement of operating expenses
Summary statement of current period employee benefits and
depreciation expenses by function

No./Index
Table 1
Table 2
Table 3
Note 14
Table 4
Table 5
Note 12
Table 6
Note 22
Table 7
Table 8
Note 16
Note 17
Table 9
Table 10
Note 22
Table 11
Table 12
Table 13
Note 21

56 -

Lingsen Precision Industries, Ltd.

Statement of cash and cash equivalents

December 31, 2023

Table 1

Unit In Thousands of New Taiwan Dollars,

Unless Stated Otherwise

Item Cash Cash on hand and petty cash Cash in banks Checking accounts Demand deposits Foreign currency demand deposit (Note 1) Time deposits Cash equivalents Time deposits with an initial maturity of less than three months Short-term notes and bills Less: Time deposits with an initial maturity in three months Time deposit pledge (Note 2)		Amount
	$ 245 2,621 235,526 43,511 161,000 442,903 474,000 149,738 1,066,641 ( 160,000 ) ( 1,000) $ 905,641

Note 1: It includes US$935,000 and JPY 68,123,000, converted at the exchange rate of ＝＝
US$1 NT$30.705 and JPY$1 NT$0.2172.
Note 2: The due period is May 2025, at an annual percentage rate of 1.575%. It has been provided to the bank as collateral, transferred to financial assets at amortized costcurrent, to make endorsement and guarantee for Taipei Customs, CA, MOF.
57 -

Lingsen Precision Industries, Ltd. Statement of accounts receivable December 31, 2023 Table 2 Unit: Amounts expressed in thousands of New Taiwan Dollars Customer name Amount Company A $ 157,622 Company B 150,301 Company C 134,601 Company D 83,518 Company E 67,693 Company F 51,332 Others (Note) 313,169 958,236 Less: Allowance for bad debts ( 1,166) $ 957,070	Lingsen Precision Industries, Ltd. Statement of accounts receivable December 31, 2023 Table 2 Unit: Amounts expressed in thousands of New Taiwan Dollars Customer name Amount Company A $ 157,622 Company B 150,301 Company C 134,601 Company D 83,518 Company E 67,693 Company F 51,332 Others (Note) 313,169 958,236 Less: Allowance for bad debts ( 1,166) $ 957,070	Lingsen Precision Industries, Ltd. Statement of accounts receivable December 31, 2023 Table 2 Unit: Amounts expressed in thousands of New Taiwan Dollars Customer name Amount Company A $ 157,622 Company B 150,301 Company C 134,601 Company D 83,518 Company E 67,693 Company F 51,332 Others (Note) 313,169 958,236 Less: Allowance for bad debts ( 1,166) $ 957,070
	(	$ 157,622 150,301 134,601 83,518 67,693 51,332 313,169 958,236 1,166) $ 957,070

Note: The amount of individual customer does not exceed 5% of the account balance.

58 -

==> picture [445 x 274] intentionally omitted <==

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

Lingsen Precision Industries, Ltd.
Statement of inventories
December 31, 2023
Table 3 Unit: Amounts expressed in thousands of
New Taiwan Dollars
Item Cost Net realizable value
Raw materials $275,965 $275,965
Finished goods - -
- -
Work in process
$275,965 $275,965
----- End of picture text -----

59 -

Lingsen Precision Industries, Ltd.

Statement of changes in financial assets measured at fair value through other comprehensive income - non-current

For the year ended December 31, 2023

Table 4

Unit: Amounts expressed in thousands of New Taiwan Dollars and thousands of shares

Financial instrument name Listed domestic company ETREND Hightech Corp. Emerging stocks Amtek Semiconductors Co., Ltd. Xpert Semiconductor Inc.	Balance at the beginning	Balance at the beginning	of theyear Fair value $ 1,811 7,237 - 7,237 $ 9,048	Unrealized gains or losses of Financial assets $ 1,335 1,380 - 1,380 $ 2,715	Balance at the end of theyear Number of shares Fair value 75 $ 3,146 685 8,617 45 - 8,617 $ 11,763	Balance at the end of theyear Number of shares Fair value 75 $ 3,146 685 8,617 45 - 8,617 $ 11,763	Guarantee or pledge status
	Number of shares 75 685 45				Number of shares 75 685 45
							None None None

60 -

Lingsen Precision Industries, Ltd.

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2023

Table 5

Unit: Amounts expressed in thousands of New Taiwan Dollars and thousands of shares

Balance at the beginning of theyear Number of shares Amount 54,000 $ 97,576 22,923 414,837 21,515 220,169 30,000 243,633 1,000 64,380 5,348 27,092 2,400 11,417 1,079,104 ( 176,415 ) ( 17,731) $ 884,958	Increase (Decrease) Number of shares Amount 4,000 $ 127,890 - - - - - - - - - - - - $ 127,890	Balance at the end of the year Number of shares Shareholding % Amount 58,000 100 $ 128,390 22,923 64 408,399 21,515 99 220,165 30,000 100 249,741 1,000 100 65,773 5,348 78 27,154 2,400 30 11,417 1,111,039 ( 176,415 ) ( 17,731) $ 916,893	Balance at the end of the year Number of shares Shareholding % Amount 58,000 100 $ 128,390 22,923 64 408,399 21,515 99 220,165 30,000 100 249,741 1,000 100 65,773 5,348 78 27,154 2,400 30 11,417 1,111,039 ( 176,415 ) ( 17,731) $ 916,893	Market value or equity net value
Number of shares 54,000 22,923 21,515 30,000 1,000 5,348 2,400	Number of shares 4,000 - - - - - -	Number of shares 58,000 22,923 21,515 30,000 1,000 5,348 2,400	Shareholding % 100 64 99 100 100 78 30	(Note)
				$ 128,390 408,399 220,165 73,326 65,773 20,840 - $ 916,893

Note: Net income or loss is primarily computed according to investee's financial statement and the percentage of the Company's share.

61 -

Lingsen Precision Industries, Ltd.

Statement of Changes in Right-of-use Assets and Accumulated Depreciation For the year ended December 31, 2023

Unit: Amounts expressed in thousands of New Taiwan Dollars

Table 6 Unit: Amounts expressed

in thousands of New Taiwan Dollars

Cost Land Buildings Accumulated depreciation Land Buildings	Balance at the beginning of the year $ 162,849 2,586 165,435 17,508 2,585 20,093 $ 145,342		Increase $ 863 1,923 $ 2,786 $ 4,227 642 $ 4,869	Balance at the end of theyear	Balance at the end of theyear
					$ 163,712 4,509 168,221 21,735 3,227 24,962 $ 143,259

62 -

Lingsen Precision Industries, Ltd.

Statement of short-term borrowings

December 31, 2023

Table 7 Loan type and bank Import/export financing loans Taipei Fubon Bank (Zhonggang Branch) The Hongkong and Shanghai Banking Corporation Limited (Taichung Branch)	Unit: Amounts expressed in thousands of New Taiwan Dollars Maturity date (Note) Annual interest rate(%) Amount 2024.01.26 6.31 19,660 2024.03.27 6.41 37,112 $ 56,772	Unit: Amounts expressed in thousands of New Taiwan Dollars Maturity date (Note) Annual interest rate(%) Amount 2024.01.26 6.31 19,660 2024.03.27 6.41 37,112 $ 56,772	Unit: Amounts expressed in thousands of New Taiwan Dollars Maturity date (Note) Annual interest rate(%) Amount 2024.01.26 6.31 19,660 2024.03.27 6.41 37,112 $ 56,772
			19,660 37,112 $ 56,772

Note: The maturity date refers to the last maturity date among several loans.

63 -

Lingsen Precision Industries, Ltd. Statement of accounts payable

December 31, 2023

December 31, 2023	December 31, 2023	December 31, 2023
Table 8 Unit: Amounts expressed in thousands of New Taiwan Dollars Companyname Amount Company A $35,068 Company B 33,814 Company C 33,524 Company D 33,349 Company E 20,687 Others (Note) 60,149 $ 216,591
	$	$35,068 33,814 33,524 33,349 20,687 60,149 216,591

Unit: Amounts expressed in thousands of New Taiwan Dollars

Note: The amount of individual customer does not exceed 5% of the account balance.

64 -

Lingsen Precision Industries, Ltd.

Statement of lease liabilities

December 31, 2023

Table 9 Item Land Buildings Less: Amount falling due in one year	Description Plant and office Plant and office	Unit: Amounts expressed in thousands of New Taiwan Dollars Lease term Discount rate (%) Balance at the end of theyear 2011.10.22-2033.11.30 0.67-1.64 $ 144,441 2023.01.01-2025.12.31 0.67-1.50 1,291 145,732 ( 4,455) $ 141,277	Unit: Amounts expressed in thousands of New Taiwan Dollars Lease term Discount rate (%) Balance at the end of theyear 2011.10.22-2033.11.30 0.67-1.64 $ 144,441 2023.01.01-2025.12.31 0.67-1.50 1,291 145,732 ( 4,455) $ 141,277	Unit: Amounts expressed in thousands of New Taiwan Dollars Lease term Discount rate (%) Balance at the end of theyear 2011.10.22-2033.11.30 0.67-1.64 $ 144,441 2023.01.01-2025.12.31 0.67-1.50 1,291 145,732 ( 4,455) $ 141,277
			(	$ 144,441 1,291 145,732 4,455) $ 141,277

65 -

Lingsen Precision Industries, Ltd.

Statement of long-term borrowings

December 31, 2023

Table 10

Unit: Amounts expressed in thousands of New Taiwan Dollars

Loan type and bank Mortgage loan Mega International Commercial Bank (Tan Zi Branch) Credit loans CTBC Bank (Taichung Regional Center) Taipei Fubon Bank (Zhonggang Branch) O-Bank (Taichung Branch)	Loan period 2022.08.11-2025.06.26 2021.03.05-2026.03.05 2021.05.20-2026.05.20 2021.04.26-2026.04.15	Repayment method The maximum repayment period for each transaction shall not exceed the expiry date of the utilization period, and the principal shall be repaid once due. Grace period refers to 18 months from the first drawdown date. Starting from October 15, 2022, the equal principle shall be paid on the 15th day of each month, and the remaining amount shall be repaid at a lump sum upon maturity, and interest is collected on a monthly basis. Grace period refers to the first 2 years of the 60 months from the first drawdown date. Starting from the 3rd year, the equal principle shall be paid on the 15th day of each month. Grace period refers to 36 months from the first drawdown date. The equal principle shall be paid on the 15th day of each month, and divided into 25 periods for payment.	Annual interest rate 1.78% 1.45% 1.37% 1.53%	Amount falling due in oneyear $ 150,000 96,596 28,000 36,000 $ 310,596	Amount falling due in oneyear $ 150,000 96,596 28,000 36,000 $ 310,596	Amount falling due after oneyear $ - 112,694 39,667 64,000 $ 216,361		Total
								$ 150,000 209,290 67,667 100,000 $ 526,957

66 -

Lingsen Precision Industries, Ltd. Statement of operating revenue

For the year ended December 31, 2023

Table 11

Unit: Amounts expressed in thousands of New Taiwan Dollars

Item Packaging and final testing of IC Revenue from contracts with customers Other operating income Less: Sales allowance Operating income	Quantity (thousand PCS) Around 3,610,119		Amount
		(	$ 4,586,868 117,146 37,285 4,741,299 15,545) $ 4,725,754

67 -

Lingsen Precision Industries, Ltd.

Statement of operating costs

For the year ended December 31, 2023

Table 12	Unit: Amounts expressed	in thousands of
	New	Taiwan Dollars
Item		Amount
Raw material at the beginning of year	$	560,976
Current net purchase		1,408,170
Raw material at the end of year	(	343,276 )
Sales of raw materials	(	35,949 )
Other expenses	(	27,773)
Raw material consumption		1,562,148
Direct labor		730,551
Production overheads		2,253,668
Production cost		4,546,367
Work in process at the beginning of the year		2,554
Work in process at the end of the year	(	2,554)
Cost of finished goods inventory		4,546,367
Finished goods inventory at the beginning of the		2,253
year
Finished goods inventory at the end of the year	(	2,253)
Cost of sales		4,546,367
Income from sale of scrap	(	43,406 )
Inventory valuation losses		5,154
Supply inventory valuation losses		7,028
Cost of sales of raw materials		35,949
Operating costs	$	4,551,092

68 -

Lingsen Precision Industries, Ltd. Statement of operating expenses

For the year ended December 31, 2023

Table 13

Unit: Amounts expressed in thousands of New Taiwan Dollars

Item Salary expense Depreciation Insurance expense Commissions expense Others		Selling expenses $ 26,884 324 2,969 4,620 12,447 $ 47,244	Administrativ e expenses $ 72,327 10,836 8,479 - 57,684 $ 149,326	Research and development expenses $ 77,178 2,785 7,801 - 13,596 $ 101,360		Total
						$ 176,389 13,945 19,249 4,620 83,727 $ 297,930

69 -

AI assistant

LPI — Audit Report / Information 2023

52036_rns_2023-11-09_0ea3f897-9d8b-4e4a-a176-1c9a85de6a50.pdf

Lingsen Precision Industries, Ltd.

Parent Company Only Financial Statements and Independent Auditors’ Report

Independent Auditors’ Report

Audit opinions

Basis for Opinion

Key Audit Matters

Authenticity of service revenue recognition

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

Auditor’s Responsibilities for the Audit of the unconsolidated Financial Statements

Lingsen Precision Industries, Ltd. Parent Company Only Balance Sheets December 31, 2023 and 2022

Lingsen Precision Industries, Ltd. Parent Company Only Statements of Comprehensive Income

(Continued from previous page)

Lingsen Precision Industries, Ltd. Parent Company Only Statement of Changes in Equity For the Years from January 1 to December 31, 2023 and 2022

Lingsen Precision Industries, Ltd.

(Continued from previous page)

1. Company History

2. Approval Date and Procedures of the Financial Statements

3 . Application of New, Amended And Revised Standards and Interpretations

4. Summary of Significant Accounting Policies

(4) Foreign Currency

(5) Inventories

(6) Investment in subsidiaries

(10) Financial instruments

Financial assets

Financial liabilities

(11) Provision for liabilities

(12) Revenue recognition

(13) Leases

Employee stock options for employees

(17) Income tax

5. Significant Accounting Assumptions and Judgment, and Major Sources of Estimation Uncertainty

Major source of estimates and assumption uncertainty – Income Tax

6. Cash and cash equivalents

7. Financial assets at fair value through other comprehensive income- non-current

8. Financial assets at amortized cost- current

9. Accounts receivable

10. Inventories

(1) Investment in subsidiaries

(2) Investment in Associates

12. Property, Plant and Equipment

13. Lease agreements

14. Other current assets

17. Provisions - Current

18. Retirement benefits plan

Movements the net defined benefit assets are as follows:

19. Equity

(4) Treasury stocks

20. Revenue

21. Employee benefits and depreciation expenses

The Company's remuneration policy

22. Income tax

(2) Deferred tax assets and liabilities

(4) Income tax examination

23. Earnings (loss) per share

24. Share-Based Payment Agreement

Treasury stock grants to employees

25. Capital risk management

26. Financial instruments

(2)

1) Market risk

Sensitivity analysis

Sensitivity analysis

iii) Other price risk

Sensitivity analysis

2) Credit risk

Liquidity and interest risks of non-derivative financial liabilities

27. Related-party transactions

28. Pledged assets

29. Significant Contingent Liabilities and Unrecognized Commitments

30. Significant subsecuent events

31. Significant information on exchange rate of foreign currency financial assets and liabilities

32. Other disclosures

Lingsen Precision Industries, Ltd. and Subsidiaries

Endorsements/guarantees provided

Table 1

Lingsen Precision Industries, Ltd. and its subsidiaries

Marketable securities held

LPI Audit Report / Information 2023