MERRY — Audit Report / Information 2023

Dec 19, 2023

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2023 AND 2022

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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.

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Merry Electronics Co., Ltd.

Opinion

We have audited the accompanying consolidated balance sheets of Merry Electronics Co., Ltd. and its subsidiaries (the “Group”) as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to the Other matter section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audits and the reports of other auditors, we believe that the

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audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

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

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

Cut-off on sales revenue from distribution warehouse

Description

Refer to Note 4(31) for accounting policy on revenue recognition.

The Group recognizes revenue upon delivery or pick-up of goods (the transfer of control of ownership) by customers at warehouses. Warehouse sales revenue constitutes 30% of total operating revenue for the year ended December 31, 2023. The Group’s revenue recognition is based on inventory movement records of warehouses based on the reports provided by warehouse custodians or bill of lading reports recorded on network platform. As the hubs are located in various locations and there are numerous custodians, the frequency and contents of statements provided by custodians vary, and customers are from different places, the process of revenue recognition contains numerous manual procedures, which would potentially result in inaccurate timing of revenue recognition and the discrepancy between physical inventory quantities in the hubs and quantities per accounting records. Thus, we consider the cut-off on sales revenue from distribution warehouses a key audit matter.

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How our audit addressed the matter

We performed the following audit procedures in relation to the above key audit matter:

• A. Understood, evaluated and verified the Group’s procedures for warehouse sales revenue and internal control, including:

• (a) Interviewing the staff of the sales revenue process from distribution warehouse, and confirming the consistency by comparing interview results with the process of warehouse sales revenue recognition obtained.

• (b) Verifying the internal control of warehouse distribution (checked the terms of transaction / timing of ownership transfer and dates of supporting documents and verifying transactions recognized in the appropriate period by reconciling the quantities of supporting documents with invoices) to confirm the accuracy of the timing of revenue recognition.

• B. Performed cut-off procedures on sales revenue from distribution warehouses recognized during a specific period before and after the period-end, including verifying delivery schedule of distribution warehouses and ensuring the movements of inventories contained in the statements and cost of goods sold had been recognized in the appropriate period;

• C. Performed physical inventory count observation or confirmed the inventory quantities with hub custodian and agreed the results to accounting records.

Valuation of inventories

Description

Refer to Note 4(13) for accounting policies on inventory valuation, Note 5(1) for significant accounting estimates and assumptions related to inventory valuation, and Note 6(6) for details of allowance for inventory valuation losses. As of December 31, 2023, the balances of inventories and allowance for inventory valuation losses were NT$4,065,282 thousand and NT$243,962 thousand, respectively.

The Group has a high risk of incurring inventory valuation loss or obsolescence due to fluctuations in market demand and rapidly evolving technology. Further, the measurement

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of net realizable value of inventories involves subjective judgement resulting in a high degree of estimation uncertainty. Thus, we consider the allowance for inventory valuation loss a key audit matter.

How our audit addressed the matter

We performed the following audit procedures in relation to the above key audit matter:

• A. Understood and assessed the reasonableness of the subsequent inventory valuation and the provision for loss on obsolete and slow-moving inventory.

• B. Inspected the annual plan of the physical inventory count and observed the inventory count; evaluated the effectiveness of the procedures used to identify and control obsolete inventories.

• C. Obtained inventory aging report and verified dates of movements with supporting documents and ensured the accuracy of inventory aging classification and its consistency with the policies.

• D. Obtained the net realizable value of each kind of inventory and checked whether the applied calculation logic was in agreement with all inventories, tested the supporting documents related to the estimation basis for net realizable value of inventories including verifying the supporting documents of sales and purchase prices, as well as recalculating and assessing the reasonableness of allowance for inventory valuation losses.

Other matter - audits of other independent auditors

We did not audit the financial statements of certain investments accounted for under the equity method that are included in the consolidated financial statements and disclosures in Note 13. Those financial statements were audited by other independent auditors, whose reports thereon have been furnished to us, and our opinion expressed herein is based solely on reports of the other independent auditors. The balance of these investments accounted for under equity method amounted to NT$480,811 thousand and NT$39,582 thousand, constituting 1.47% and 0.12% of total assets as of December 31, 2023 and 2022, respectively, and the comprehensive loss of associates accounted for using equity method

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was (NT$5,001) thousand and (NT$3,146) thousand, constituting (0.40%) and (0.19%) of total comprehensive income for the years then ended.

Other matter - parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Merry Electronics Co., Ltd. as at and for the years ended December 31, 2023 and 2022.

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

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

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

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

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Auditor’s responsibilities for the audit of the consolidated financial statements

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

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

• B. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• C. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty

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exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• E. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• F. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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.

Liu, Mei Lan[Hsu, Chien-Yeh ]

For and on behalf of PricewaterhouseCoopers, Taiwan February 22, 2024

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

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

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(2) 6(3) 6(4)(5) 7(2) 6(2) 7(2) 6(6) 6(2) 6(3) 6(7) 6(8) 6(9) 6(10) 6(27)	December 31, 2023 AMOUNT % $ 5,526,722 17 556,580 2 105,206 - 513,218 2 9,224,475 28 155,813 - 169,190 1 173,586 1 3,821,320 12 470,436 1 20,716,546 64 45,828 - 369,523 1 422,748 1 5,602,510 17 4,021,917 12 247,172 1 911,221 3 188,976 1 84,752 - 11,894,647 36 $ 32,611,193 100	December 31, 2022	December 31, 2022
		AMOUNT $ 5,526,722 556,580 105,206 513,218 9,224,475 155,813 169,190 173,586 3,821,320 470,436 20,716,546 45,828 369,523 422,748 5,602,510 4,021,917 247,172 911,221 188,976 84,752 11,894,647 $ 32,611,193	AMOUNT $ 6,923,268 389,181 251,448 185,601 8,709,698 61,771 87,327 118,270 4,910,577 286,170 21,923,311 27,284 526,509 110,200 5,028,458 4,147,903 293,554 1,102,943 160,015 108,454 11,505,320 $ 33,428,631	%
Current assets 1100 Cash and cash equivalents 1110 Financial assets at fair value through profit or loss - current 1120 Current financial assets at fair value through other comprehensive income 1136 Current financial assets at amortised cost 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 1210 Other receivables - related parties 130X Inventories 1470 Other current assets 11XX Current Assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Non-current financial assets at fair value through other comprehensive income 1535 Non-current financial assets at amortised cost 1550 Investments accounted for under equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred income tax assets 1900 Other non-current assets 15XX Non-current assets 1XXX Total assets				21 1 1 1 26 - - - 15 1
				66
				- 2 - 15 12 1 3 1 -
				34
				100

(Continued)

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity

December 31, 2023 December 31, 2022 Notes AMOUNT % AMOUNT % 6(12) $ 1,133,099 4 $ 2,146,851 6 6(2) 1,726 - 10,137 - 6(22) 301,635 1 370,035 1 5,516,301 17 5,015,885 15 7(2) 3,023,117 9 4,198,902 13 6(13) 1,385,934 4 1,194,443 4 7(2) 65,895 - 82,414 - 466,311 1 313,322 1 6(14)(15) 3,428,440 11 451,919 1 529,581 2 340,051 1 15,852,039 49 14,123,959 42 6(22) 590,487 2 650,862 2 6(14) - - 2,953,838 9 6(15) 1,003,177 3 904,528 3 6(27) 1,540,737 5 1,534,222 5 94,413 - 140,904 - 6(16) 36,054 - 37,619 - 11,963 - 26,413 - 3,276,831 10 6,248,386 19 19,128,870 59 20,372,345 61 6(18) 2,193,163 7 2,177,827 7 6(19) 4,872,974 14 4,720,866 14 6(20) 2,412,390 8 2,265,932 7 768,186 3 748,930 2 3,583,885 11 3,355,328 10 6(21) ( 1,209,351) ( 4) ( 996,446) ( 3 ) 12,621,247 39 12,272,437 37 4(3) 861,076 2 783,849 2 13,482,323 41 13,056,286 39 9 $ 32,611,193 100 $ 33,428,631 100

Current liabilities 2100 Short-term borrowings 2120 Financial liabilities at fair value through profit or loss - current 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2220 Other payables - related parties 2230 Current income tax liabilities 2320 Current portion of long-term borrowings 2399 Other current liabilities, others 21XX Current Liabilities Non-current liabilities 2527 Non-current contract liabilities 2530 Corporate bonds payable 2540 Long-term borrowings 2570 Deferred income tax liabilities 2580 Non-current lease liabilities 2640 Accrued pension liabilities 2670 Other non-current liabilities, others 25XX Non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock Capital reserve 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 36XX Non-controlling interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments 3X2X Total liabilities and equity

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

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(22) and 7(2) $ 36,690,383 100 $ 35,398,690 100 6(6) and 7(2) ( 31,948,416) ( 87) ( 30,846,138) ( 87) 4,741,967 13 4,552,552 13 6(25)(26) ( 456,917) ( 1) ( 467,211) ( 1) ( 1,186,242) ( 3) ( 1,224,345) ( 4) ( 1,964,625) ( 6) ( 1,800,730) ( 5) 12(2) 3,740 - 12,854 - ( 3,604,044) ( 10) ( 3,479,432) ( 10) 1,137,923 3 1,073,120 3 136,805 - 66,266 - 6(23) and 7(2) 467,008 1 488,213 1 6(24) ( 40,545) - 318,148 1 ( 100,497) - ( 105,635) - 6(7) 284,801 1 208,914 1 747,572 2 975,906 3 1,885,495 5 2,049,026 6 6(27) ( 467,598) ( 1) ( 427,970) ( 1) $ 1,417,897 4 $ 1,621,056 5

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling expenses 6200 General and administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of profit(loss) of associates and joint ventures accounted for under equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year

(Continued)

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except earnings per share amount)

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(16) ($ 6,348) - $ 11,395 - 6(3)(21) 8,152 - ( 361,602) ( 1) ( 22) - 62 - 6(27) 485 - ( 1,310) - 2,267 - ( 351,455) ( 1) 6(21) ( 118,368) ( 1) 397,730 1 6(3)(21) 2,687 - ( 5,628) - 6(7)(21) ( 94,837) - 83,321 - 6(27) 38,261 - ( 85,747) - ( 172,257) ( 1) 389,676 1 ($ 169,990) ( 1) $ 38,221 - $ 1,247,907 3 $ 1,659,277 5 $ 1,320,318 4 $ 1,455,398 4 97,579 - 165,658 1 $ 1,417,897 4 $ 1,621,056 5 $ 1,170,680 3 $ 1,445,320 4 77,227 - 213,957 1 $ 1,247,907 3 $ 1,659,277 5 6(28) $ 6.16 $ 6.81 6(28) $ 5.49 $ 6.07

Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial gains (losses) on defined benefit plans 8316 Unrealized gains(losses) from investments in equity instruments measured at fair value through other comprehensive income, net 8320 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income (loss) that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8367 Unrealized gains (losses) from investments in debt instruments measured at fair value through other comprehensive income, net 8370 Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss 8399 Income tax relating to the components of other comprehensive income 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Total other comprehensive (loss) income for the year 8500 Total comprehensive income for the year Profit, attributable to: 8610 Owners of parent 8620 Non-controlling interest Total Profit Comprehensive income, attributable to: 8710 Owners of the parent 8720 Non-controlling interest Total Comprehensive Income Basic earnings per share 9750 Total basic earnings per share Diluted earnings per share 9850 Total diluted earnings per share

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

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Year 2022 Balance at January 1, 2022 Profit for the year Other comprehensive income (loss) for the year Total comprehensive income (loss) Appropriation and distribution of 2021 retained earnings Legal reserve Special reserve Cash dividends Share-based payment Recognition of change in equity of associates in proportion to the Company's ownership Acquisition of non-controlling interests in a subsidiary Balance at December 31, 2022 Year 2023 Balance at January 1, 2023 Profit for the year Other comprehensive loss for the year Total comprehensive income (loss) Appropriation and distribution of 2022 retained earnings Legal reserve Special reserve Cash dividends Convertible bonds converted into common shares Share-based payment Equity instruments at fair value through other comprehensive income reclassified to investments accounted for using equity method Recognition of change in equity of associates in proportion to the Company's ownership Balance at December 31, 2023	Notes						Equitya	Equitya	ttributable to owners	of	theparent						Non-controlling interest		Total equity
			Share capital - common stock		Capital surplus, additionalpaid-in capital				Retained Earnings				Financial statements translation differences of foreign operations		Total
							Legal reserve		Special reserve		Total unappropriated retained earnings
	6(20) 6(17) 6(7) 6(20) 6(14) 6(17) 6(7)		$ 2,165,100 - - - - - - 12,727 - - $ 2,177,827 $ 2,177,827 - - - - - - 10 15,326 - - $ 2,193,163		$ 4,646,623 - - - - - - 57,551 16,692 - $ 4,720,866 $ 4,720,866 - - - - - - 90 125,063 - 26,955 $ 4,872,974		$ 2,152,834 - - - 113,098 - - - - - $ 2,265,932 $ 2,265,932 - - - 146,458 - - - - - - $ 2,412,390		$ 269,144 - - - - 479,786 - - - - $ 748,930 $ 748,930 - - - - 19,256 - - - - - $ 768,186		$ 3,349,676 1,455,398 9,178 1,464,576 ( 113,098 ) ( 479,786 ) ( 866,040 ) - - - $ 3,355,328 $ 3,355,328 1,320,318 ( 5,066 ) 1,315,252 ( 146,458 ) ( 19,256 ) ( 981,235 ) - - 60,254 - $ 3,583,885		($ 969,246 ) - ( 19,256 ) ( 19,256 ) - - - ( 7,944 ) - - ($ 996,446 ) ($ 996,446 ) - ( 144,572 ) ( 144,572 ) - - - - ( 8,079 ) ( 60,254 ) - ($ 1,209,351 )		$ 11,614,131 1,455,398 ( 10,078 ) 1,445,320 - - ( 866,040 ) 62,334 16,692 - $ 12,272,437 $ 12,272,437 1,320,318 ( 149,638 ) 1,170,680 - - ( 981,235 ) 100 132,310 - 26,955 $ 12,621,247		$ 540,492 165,658 48,299 213,957 - - - - - 29,400 $ 783,849 $ 783,849 97,579 ( 20,352 ) 77,227 - - - - - - - $ 861,076		$ 12,154,623 1,621,056 38,221 1,659,277 - - ( 866,040 ) 62,334 16,692 29,400 $ 13,056,286 $ 13,056,286 1,417,897 ( 169,990 ) 1,247,907 - - ( 981,235 ) 100 132,310 - 26,955 $ 13,482,323

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

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense-property, plant and equipment Depreciation expense - right-of-use assets Amortization Expected credit impairment (gain) loss Impairment loss - non-financial assets Finance costs Interest expense - lease liability Loss (gain) on financial assets or liabilities at fair value through profit or loss Share of profit of associates and joint ventures accounted for using equity method Compensation cost of share-based payment Loss on disposal of property, plant and equipment Loss on disposal of investments Interest income Dividend income Deferred income of government's compensation Unrealized exchange loss Changes in operating assets and liabilities Changes in operating assets Increase in financial assets/liabilities mandatorily measured at fair value through profit or loss Accounts receivable (including related parties) Other receivables (including related parties) Inventories Other current assets Changes in operating liabilities Accounts payable Accounts payable - related parties Other payables Other payables - related parties Contract liabilities Other current liabilities Net defined benefit liability - non-current Cash inflow generated from operations Interest received Dividend income Interest paid Income taxes paid Net cash flows from operating activities

YearendedDecember 31 Notes 2023 2022 $ 1,885,495 $ 2,049,026 6(8)(25) 560,412 507,804 6(9)(25) 120,710 107,114 6(10)(25) 142,490 148,859 12(2) ( 3,740 ) ( 12,854 ) 6(11)(24) 65,510 161,766 93,232 100,310 6(9) 7,265 5,325 ( 13,435 ) 7,885 6(7) ( 284,801 ) ( 208,914 ) 6(17) 132,310 62,334 6(24) ( 19,291 ) 12,241 6(24) ( 16,500 ) - ( 136,805 ) ( 66,266 ) 6(23) ( 11,763 ) ( 14,341 ) ( 699 ) ( 856 ) 173,473 2,082 ( 8,878 ) ( 1,594 ) ( 811,983 ) 762,143 1,254 751,909 1,059,389 356,438 ( 183,162 ) 74,249 589,619 ( 772,341 ) ( 1,163,003 ) 594,208 270,015 140,400 ( 16,512 ) 15,595 ( 128,317 ) 146,265 181,838 ( 6,254 ) ( 5,407 ) ( 33,528 ) 2,478,716 4,889,005 131,529 68,025 11,763 14,341 ( 98,892 ) ( 93,604 ) ( 299,776 ) ( 194,595 ) 2,223,340 4,683,172

(Continued)

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in financial assets mandatorily measured at fair value through profit or loss Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of financial assets at fair value through other comprehensive income Increase in financial assets at amortised cost - current Decrease in financial assets at amortised cost - current Increase in financial assets at amortised cost - non - current Decrease in financial assets at amortised cost - non - current Acquisition of investments accounted for using equity method Earnings repatriated by investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of intangible assets Decrease in other non-current financial assets Decrease in guarantee deposits paid Net cash flows (used in) from investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decrease in short-term borrowings Repayment of principal portion of lease liabilities Increase in long-term borrowings Decrease in long-term borrowings Decrease in other non-current liabilities Cash dividends paid Change in non-controlling interests Net cash flows used in financing activities Effect of change in foreign currency exchange Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

YearendedDecember 31 Notes 2023 2022 ($ 172,480 ) ($ 51,244 ) - ( 444 ) 161,125 - ( 362,886 ) ( 31,570 ) 30,450 889,421 ( 318,630 ) ( 318,694 ) - 212,077 6(7) ( 409,928 ) ( 19,650 ) 6(7) 213,003 - 6(29) ( 530,445 ) ( 596,303 ) 41,775 7,300 ( 12,630 ) ( 28,855 ) 2,880 2,420 4,412 2,121 ( 1,353,354 ) 66,579 6(30) ( 986,313 ) ( 1,569,848 ) 6(30) ( 134,976 ) ( 106,426 ) 6(30) 539,459 71,965 6(30) ( 440,516 ) ( 370,868 ) 6(30) ( 13,583 ) ( 3,569 ) 6(30) ( 981,235 ) ( 866,040 ) 4(3) - 29,400 ( 2,017,164 ) ( 2,815,386 ) ( 249,368 ) 146,934 ( 1,396,546 ) 2,081,299 6,923,268 4,841,969 $ 5,526,722 $ 6,923,268

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

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MERRY ELECTRONICS CO., LTD AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

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

1. HISTORY AND ORGANISATION

Merry Electronics Co., Ltd. (the “Company”) was incorporated as a company limited by shares under the provisions of the Company Act of the Republic of China (R.O.C.) on December 24, 1975. The Company is primarily engaged in manufacturing, processing, repairing, sales of electric appliance and audiovisual electric products, telecommunication equipment and apparatus, computers and computing peripheral equipment, restrained telecom radio frequency equipment, medical appliances, as well as electronic parts and components; planning, design as well as output of service items’ equipment; production as well as marketing management consultant of service items’ relevant business. The Company’ shares were listed on the Taipei Exchange since August 1998 and transferred to the Taiwan Stock Exchange starting September 2000 with approval. The Company merged with its subsidiaries, Huges Hi-Tech Inc. and Biotest Medical Corporation, on September 1, 2005 and October 29, 2021, respectively. The Company was the surviving company while Huges Hi-Tech Inc. and Biotest Medical Corporation were the dissolved companies.

2. THE DATE OF AUTHORISATION FOR ISSUANCE OF THE CONSOLIDATED FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORISATION

These consolidated financial statements were reported for issuance by the Board of Directors on February 22, 2024.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

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

Supervisory Commission (“FSC”)
New Standards,Interpretations andAmendments	Effective date by International Accounting StandardsBoard
Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’ Amendments to IAS 12, ‘International tax reform - pillar two model rules’	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

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

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

but not yet adopted by the Group

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

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

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

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

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

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

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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements

are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

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

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(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.

• (b) Financial assets and liabilities at fair value through other comprehensive income measured at fair value.

• (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

• B. The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• (c) Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the noncontrolling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All

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amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

Name of Name of Main business investor subsidiary activities MEHO MERRY ELECTRONICS (HK) CO., LTD. ("MEST") Sales of the same products as the Company. MEHO MERRY ELECTRONICS (THAILAND) CO., LTD. ("METC") The same main business as the Company. MEHO MERRY ELECTRONICS (U.S.A.) CO., LTD. ("MECA") Providing technology and marketing after-sales services. MEHO DANNY DYNAMICS LIMITED ("DDBV") Equity investments. MEHO MERRY ELECTRONICS (SINGAPORE) PTE. LTD. ("MESG") Manufacturing of other electronic components and circuit board. MEHO MERRY HEALTHCARE CO., LTD. ("MHKY") Sales of medical device. MEHO ASIAN ELITE INTERNATIONAL LTD. ("MSCS") Manufacturing and sales of speaker and amplifier. MEHO Indigo Enterprise Inc. ("INSA") Equity investments.		December31,2023 December31,2022 100.00% 100.00% 99.99% 99.99% 99.90% 99.90% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% Ownership(%)	Description
		December31,2023
		100.00% 99.99% 99.90% 100.00% 100.00% 100.00% 100.00% 100.00%

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Name of Name of Main business Ownership(%)
investor subsidiary activities December 31, 2023 December 31, 2022 Description
----- End of picture text -----

MEHO	MERRY &	Manufacturing of	51.00%	51.00%
	LUXSHARE	speaker system and
	(VIETNAM) CO.,	microphone for
	LTD. (MEVN)	consumer
		electronics used.
MEHO	MUtek Electronics	Manufacturing and	51.00%	51.00%	NOTE 1
	Co., Ltd. (MUTT)	application service
		of electrical
		appliances and
		audiovisual
		electronic products.
MEHO	Merry Capital Inc.	Equity investments.	100.00%	100.00%	NOTE 3
	(MCTT)
MEST	MERRY	The same main	100.00%	100.00%
	ELECTRONICS	business as the
	(SHENZHEN) CO.,	Company.
	LTD. ("MECL")
DDBV	Universal Capital	Equity investments.	-	100.00%	NOTE 5
	Investment
	Limited
	("UCMU")
DDBV	MERRYTECH (HK)	Equity investments.	100.00%	100.00%
	CO.LIMITED
	("MTHK")
INSA	Merry Electronics	Develop-to-order	100.00%	100.00%	NOTE 2
	North America Inc.	and appearance
	(MENA)	design of speaker
		and amplifier.
MENA	Seas Fabrikker	Manufacturing and	100.00%	100.00%
	("SENM")	sales of speaker
		monomer.
MHKY	FULICARE	Sales of medical	96.01%	96.01%
	CO., LTD.	device.
	("FUSA")
FUSA	Fulicare Medical	Manufacturing of	100.00%	100.00%
	Instruments (Suzhou)	medical device.
	Co.,Ltd ("FUSZ")

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Name of Name of Main business Ownership(%)
investor subsidiary activities December 31, 2023 December 31, 2022 Description
----- End of picture text -----

FUSA	Fulicare Medical	Manufacturing of	100.00%	100.00%
	Instruments (Xiamen)	medical device.
	Co.,Ltd
	("FUXM")
FUSA	Xiamen Etimbre	Exclusive stores for	100.00%	100.00%
	Hearing Technology	selling hearing
	Co. LTD	related products
	("ETCX")
FUSZ	Austar Hearing	Research and	99.50%	99.50%
and	Science And	development,
FUSA	Technology（Xiamen)	manufacturing as
	Co. , Ltd	well as sales of
	("ASCX")	hearing aid, hearing
		device and acoustics
		equipment.
ASCX	Xiamen Laiyate	Research and	-	100.00%	NOTE 6
	Medical Devices Co. ,	development as well
	Ltd	as technical sales of
	("LACX")	software functions
		for hearing aid.
MESG	Merry Electronics	Research and	100.00%	100.00%	NOTE 4
	Sdn Bhd	development of
	("MEMP")	microphone,
		receiver and
		speaker.

• Note 1: The Company and Universal Global Scientific Industrial Co., Ltd. invested NTD 30,600 thousand and NTD 29,400 thousand in exchange for 51% and 49% ownership as resolved by the Board of Directors, respectively. It is resolved that the record date of the establishment is dated May 12, 2022. The registration was completed.

• Note 2: On May 25, 2022, the subsidiaries, Sonavox Canada Inc. and Sonavox Canada Holding had a merger, which was resolved by the respective Board of Directors, and Sonavox Canada Inc. became the surviving company, with the record date of merger on May 26, 2022. On December 12, 2022, the Group renamed the subsidiary, Sonavox Canada Inc. (“SOCV”) to Merry Electronics North America Inc. (“MENA”). The registration was completed.

• Note 3: On July 28, 2022, the establishment of Merry Capital Inc. was resolved by the Board of Directors. The investment amounted to NTD 8,000 thousand, with 100% ownership. The registration was completed.

• Note 4: On October 27, 2022, the investment of Merry Electronics Sdn Bhd was resolved. The investment amounted to MYR 2,400 thousand, with 100% ownership. The registration

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was completed.

• Note 5: On September 20, 2023, the Group approved to sell the subsidiary, Universal Capital Investment Limited (“UCMU”), and the settlement was completed on September 30, 2023.

• Note 6: On November 29, 2023, the Group liquidated the subsidiary, XIAMEN LAIYATE MEDICAL DEVICES CO., LTD.( “ LACX ” ), and the registration for the liquidation was completed.

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustments for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions:

None.

• F. Subsidiaries that have non-controlling interests that are material to the Group:

As of December 31, 2023 and 2022, the non-controlling interest amounted to $861,076 thousand and $783,849 thousand, respectively. The information of non-controlling interest and respective subsidiaries is as follows:

Name of subsidiary	Principal place ofbusiness Vietnam	Amount Ownership (%) Amount Ownership (%) $ 808,567 49% $ 726,429 49% December31,2022 December31,2023 Non-controlling interest	Amount Ownership (%) Amount Ownership (%) $ 808,567 49% $ 726,429 49% December31,2022 December31,2023 Non-controlling interest	Amount Ownership (%) Amount Ownership (%) $ 808,567 49% $ 726,429 49% December31,2022 December31,2023 Non-controlling interest
		Amount Ownership (%) $ 808,567 49% December31,2023
		Amount $ 808,567	Amount $ 726,429
MEVN				49%

Summarised financial information of the subsidiaries:

Balance sheets

Balance sheets
			MEVN
		December	31,2023		December	31,2022
Current assets		$	1,755,805		$	1,139,436
Non-current assets			984,139			1,135,700
Current liabilities	(		961,104)	(		596,979)
Non-current liabilities	(		108,603)	(		190,065)
Total net assets		$	1,670,237		$	1,488,092

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Statements of comprehensive income

Statements of comprehensive income
			MEVN
			Years ended	December31,
			2023			2022
Revenue		$	2,814,771		$	3,949,401
Profit before income tax			229,982			358,303
Income tax expense	(		418)	(		35)
Profit for the period from continuing operations			229,564			358,268
Profit for the period			229,564			358,268
Total comprehensive income for the period		$	229,564		$	358,268
Comprehensive income attributable to
non-controlling interest		$	112,486		$	176,759
Statements of cash flows
			MEVN
			Years ended	December31,
			2023			2022
Net cash provided by operating activities		$	197,144		$	211,377
Net cash used in investing activities	(		29,497)	(		287,626)
Net cash (used in) provided by financing activities	(		101,387)			1,605
Effect of exchange rates on cash and cash
equivalents	(		1,235)			10,605
Increase (decrease) in cash and cash equivalents			65,025	(		64,039)
Cash and cash equivalents, beginning of period			77,160			141,199
Cash and cash equivalents, end of period		$	142,185		$	77,160

(4) Foreign currency translation

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

• A. Foreign currency transactions and balances

• (a) Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise,

• (b) Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.

• (c) Non-monetary assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet

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date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

  - (d) All other foreign exchange gains and losses based on the nature of those transactions are presented in the statement of comprehensive income within ‘Other gains and losses’.

• B. Translation of foreign operations

  • (a) The operating results and financial position of all the group entities, associates and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

    • i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

    • ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

    • iii. All resulting exchange differences are recognized in other comprehensive income.

  • (b) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Group retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.

  • (c) Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing exchange rates at the balance sheet date.

• (5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:

  • (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

  • (b) Assets held mainly for trading purposes;

  • (c) Assets that are expected to be realized within twelve months from the balance sheet date;

  • (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

• B. Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:

  • (a) Liabilities that are expected to be settled within the normal operating cycle;

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• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

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

• (6) Cash equivalents

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

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortized cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

• D. The Group recognizes the dividend income when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income and debt instruments which meet all of the following criteria:

  • (a) The objective of the Group’s business model is achieved both by collecting contractual cash flows and selling financial assets; and

  • (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

  • (a) The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will

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flow to the Group and the amount of the dividend can be measured reliably.

• (b) Except for the recognition of impairment loss, interest income and gain or loss on foreign exchange which are recognized in profit or loss, the changes in fair value of debt instruments are taken through other comprehensive income. When the financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

• (9) Financial assets at amortized cost

The Group’s time deposits which do not fall under cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.

• (10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

• For debt instruments measured at fair value through other comprehensive income including accounts receivable at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

• (12) Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is met:

• A. The contractual rights to receive the cash flows from the financial asset expire.

• B. The contractual rights to receive cash flows of the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.

• C. The contractual rights to receive cash flows of the financial asset have been transferred; however, the Group has not retained control of the financial asset.

• (13) Inventories

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

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• (14) Joint operation and investment accounted for using equity method joint ventures

Investment of joint arrangements are classified as joint operations or joint ventures based on its contractual rights and obligations.

• A. Joint operation

For the interest in a joint operation, the Group recognizes direct interest in (and other shares of) the joint operation’s assets, liabilities, revenue and expense which are included in the financial statements.

• B. Investment accounted for using equity method – joint ventures

  • The Group accounts for its interest in a joint venture using equity method. Unrealized profits and losses arising from the transactions between the Group and its joint venture are eliminated to the extent of the Group’s interest in the joint venture. However, when the transaction provides evidence of a reduction in the net realizable value of current assets or an impairment loss, all such losses shall be recognized immediately. When the Group’s share of losses in a joint venture equals or exceeds its interest in the joint venture together with any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the joint venture.

• (15) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

are as follows:
Buildings, structures and equipment		5 ~ 60 years
Machinery and equipment		2 ~ 12 years
Transportation equipment		5 ~ 12 years
Office equipment		3 ~ 10 years
Others	~28~	1 ~ 10 years

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

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of low value assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the fixed payments, less any lease incentives receivable. The Group subsequently measures the lease liability at amortized cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the following: (a) The amount of the initial measurement of lease liability;

  • (b) Any lease payments made at or before the commencement date; and

  • (c) Any initial direct costs incurred by the lessee.

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

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

• (17) Intangible assets

• A. Computer software

  • Computer software is stated at cost and amortized on a straight-line basis over its estimated useful life of 1 to 10 years.

• B. Goodwill

  • Goodwill arises in a business combination accounted for by applying the acquisition method.

• C. Intangible assets, mainly patent rights, trademark rights and business rights, are amortized on a straight-line basis over their estimated useful lives of 3 ~ 10 years.

• (18) Impairment of non-financial assets

• A. The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. Except for goodwill, when the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer

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exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortized historical cost would have been if the impairment had not been recognized.

• B. The recoverable amounts of goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use are evaluated periodically. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Impairment loss of goodwill previously recognized in profit or loss shall not be reversed in the following years.

• C. For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash-generating units, or groups of cash-generating units, that is/are expected to benefit from the synergies of the business combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the operating segment level.

• (19) Borrowings

• Borrowings comprise long-term and short-term bank borrowings. Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

• (20) Notes and accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services and notes payable are those resulting from operating and non-operating activities.

• B. The short-term notes and accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (21) Financial liabilities at fair value through profit or loss

• A. Financial liabilities are classified in this category of held for trading if acquired principally for the purpose of repurchasing in the short-term or financial liabilities at fair value through profit or loss. Financial liabilities that meet one of the following criteria are designated as at fair value through profit or loss at initial recognition:

  • (a) Hybrid (combined) contracts; or

  • (b) They eliminate or significantly reduce a measurement or recognition inconsistency; or

  • (c) They are managed and their performance is evaluated on a fair value basis, in accordance with a documented risk management policy.

• B. At initial recognition, the Group measures the financial liabilities at fair value. All related transaction costs are recognized in profit or loss. The Group subsequently measures these financial liabilities at fair value with any gain or loss recognized in profit or loss.

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(22) Convertible bonds payable

• A. Convertible bonds issued by the Group contain conversion options (that is, the bondholders have the right to convert the bonds into the Group’s common shares by exchanging a fixed amount of cash for a fixed number of common shares), call options and put options. The Group classifies the bonds payable upon issuance as a financial asset, a financial liability or an equity instrument in accordance with the contract terms. They are accounted for as follows:

• (a) The embedded call options and put options are recognized initially at net fair value as ‘financial assets or financial liabilities at fair value through profit or loss’. They are subsequently remeasured and stated at fair value on each balance sheet date; the gain or loss is recognized as ‘gain or loss on valuation of financial assets or financial liabilities at fair value through profit or loss’.

• (b) The host contracts of bonds are initially recognized at fair value. Any difference between the initial recognition and the redemption value is accounted for as the premium or discount on bonds payable and subsequently is amortized in profit or loss as an adjustment to ‘ finance costs ’ over the period of circulation using the effective interest method.

• (c) The embedded conversion options which meet the definition of an equity instrument are initially recognized in ‘capital surplus—share options’ at the residual amount of total issue price less the amount of financial assets or financial liabilities at fair value through profit or loss and bonds payable as stated above. Conversion options are not subsequently remeasured.

• (d) Any transaction costs directly attributable to the issuance are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

• (e) When bondholders exercise conversion options, the liability component of the bonds (including bonds payable and ‘ financial assets or financial liabilities at fair value through profit or loss ’ ) shall be remeasured on the conversion date. The issuance cost of converted common shares is the total book value of the abovementioned liability component and ‘capital surplus—share options’.

(23) Derecognition of financial liabilities

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

• (24) Non-hedging and embedded derivatives

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

(25) Provisions

Provisions (including warranties) are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated.

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Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

• (26) Employee benefits

• A. Short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plans

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

• (b) Defined benefit plans

  • i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.

  • ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• C. Employees’ compensation and directors’ and supervisors’ remuneration

• Employees’ compensation and directors’ and supervisors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates. If employee compensation is paid by shares, the Company calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

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- (27) Employee share based payment

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

• B. Restricted stocks:

  • (a) Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date and are recognized as compensation cost over the vesting period.

  • (b) For restricted stocks where those stocks do not restrict distribution of dividends to employees and employees are not required to return the dividends received if they resign during the vesting period, the Group recognizes the fair value of the dividends received by the employees who are expected to resign during the vesting period as compensation cost at the date of dividends declared.

  • (c) For restricted stocks where employees have to pay to acquire those stocks, if employees resign during the vesting period, they must return the stocks to the Group and the Group must refund their payments on the stocks, the Group recognizes the payments from the employees who are expected to resign during the vesting period as liabilities at the grant date, and recognizes the payments from the employees who are expected to be eventually vested with the stocks in ’capital surplus – others’.

• (28) Income tax

• A. The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.

• B. The current income tax expense is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the

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consolidated balance sheet. However, the deferred tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss and does not give rise to equal taxable and deductible temporary differences. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.

• D. Deferred tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

• E. A deferred tax asset shall be recognized for the carryforward of unused tax credits resulting from acquisitions of equipment or technology, research and development expenditures and equity investments to the extent that it is possible that future taxable profit will be available against which the unused tax credits can be utilized.

• (29) Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• (30) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

(31) Revenue recognition

Sales of goods

• A. The Group manufactures and sells radio apparatus, communication devices, consumer electronics as well as electronic parts and components. Sales are recognized when control of the products has transferred, being when the products are delivered to the wholesaler, the wholesaler has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the wholesaler’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the wholesaler, and either the wholesaler has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• B. The furniture is often sold with volume discounts based on aggregate sales over a 12-month period. Revenue from these sales is recognized based on the price specified in the contract, net

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of the estimated sales discounts. Accumulated experience is used to estimate and provide for the sales discounts and allowances, using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date. A refund liability is recognized for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period. The sales usually are made with a credit term of 30~120 days. As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

• C. A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

(32) Government grants

Government grants are recognized at their fair value only when there is reasonable assurance that the Group will comply with any conditions attached to the grants and the grants will be received. Government grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes expenses for the related costs for which the grants are intended to compensate. Government grants related to property, plant and equipment are recognized as non-current liabilities and are amortized to profit or loss over the estimated useful lives of the related assets using the straight-line method.

(33) Business combinations

• A. The Group uses the acquisition method to account for business combinations. The consideration transferred for an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed and equity instruments issued at the acquisition date, plus the fair value of any assets and liabilities resulting from a contingent consideration arrangement. All acquisitionrelated costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. For each business combination, the Group measures at the acquisition date components of non-controlling interests in the acquiree that are present ownership interests and entitle their holders to the proportionate share of the entity’s net assets in the event of liquidation at either fair value or the present ownership instruments’ proportionate share in the recognised amounts of the acquiree’s identifiable net assets. All other non-controlling interests should be measured at the acquisition-date fair value.

• B. The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the fair value of any previous equity interest in the acquiree over the fair value of the identifiable assets acquired and the liabilities assumed is recorded as goodwill at the acquisition date. If the total of consideration transferred, non-controlling interest in the acquiree recognized and the fair value of previously held equity interest in the acquiree is less than the

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fair value of the identifiable assets acquired and the liabilities assumed, the difference is recognized directly in profit or loss on the acquisition date.

(34) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Group’s chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments.

5. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

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

(1) Critical accounting estimates and assumptions

A. Evaluation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date and writes down the cost of inventories to the net realizable value. Such evaluation of inventories might have material changes.

As of December 31, 2023, the carrying amount of inventories was $3,821,320 thousand.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

TAILS OF SIGNIFICANT ACCOUNTS Cash and cash equivalents
Cash on hand and revolving funds Checking accounts and demand deposits Time deposits	December31,2023 2,694 $ 5,248,233 275,795 5,526,722 $	December31,2022
		2,006 $ 6,794,523 126,739
		6,923,268 $

• A. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• B. As of December 31, 2023 and 2022, time deposits maturing in excess of three months were all classified as current financial assets at amortized cost.

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

Financial assets at fair value through profit or	loss
Items		December	31,2023		December	31,2022
Current items:
Financial assets mandatorily measured
at fair value through profit or loss
- Funds		$	232,000		$	100,000
- Forward exchange contract			13,166			7,076
- Stocks			20,480			-
- Bonds			280,000			280,000
Valuation adjustment			10,934			2,105
		$	556,580		$	389,181
Non-current items:
- Funds		$	47,652		$	29,350
Valuation adjustment	(		1,824)	(		2,066)
		$	45,828		$	27,284
Items		December	31, 2023		December	31, 2022
Current items:
Financial liabilities held for trading
- Forward exchange contract		$	1,726		$	10,137

• A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Net (losses) gains on financial assets (liabilities) at fair value through profit or loss	2023 2022 29,907 $ 9,929) ($ Years ended December 31,

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

==> picture [470 x 225] intentionally omitted <==

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

December 31, 2023
Contract amount
Derivative instruments (Notional principal) Contract period Contract price
Forward foreign exchange 2023/12/27~
contract to sell USD 15,000 thousand 2024/01/30 NTD 30.555~30.846
Forward foreign exchange 2023/01/30~
contract to buy USD 25,000 thousand 2024/05/10 NTD 29.036~30.600
December 31, 2022
Contract amount
Derivative instruments (Notional principal) Contract period Contract price
Forward foreign exchange 2022/12/05~
contract to sell USD 24,000 thousand 2023/01/30 NTD 30.368~30.625
Forward foreign exchange 2022/11/07~
contract to buy USD 31,000 thousand 2023/12/29 NTD 29.488~31.901
----- End of picture text -----

The Group entered into forward foreign exchange contracts to hedge exchange rate risk of import and export proceeds. However, these forward foreign exchange contracts are not accounted for under hedge accounting.

• C. The amounts that have been transacted and yet to be paid on December 31, 2023 and 2022 are $140,019 thousand and $0 thousand respectively (shown as other payables).

• D. The amounts that have been transacted and yet received on December 31, 2023 and 2022 are

• $140,459 thousand and $0 thousand respectively (shown as other receivables).

• E. The Group has no financial assets at fair value through profit or loss pledged to others as collateral.

• F. Information relating to credit risk of financial assets at fair value through profit or loss is providedin Note 12(2).

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

	Items		December	31,2023		December	31,2022
Current items:
Debt instruments
Bonds			$	-		$	144,625
Valuation adjustment
-through profit or loss				-			8,925
-through other comprehensive income				-	(		2,687)
				-			150,863
Equity instruments
Stocks			$	106,080		$	106,080
Valuation adjustment
-through other comprehensive income		(		874)	(		5,495)
				105,206			100,585
Total			$	105,206		$	251,448
Non-current items:
Equity instruments
Listed stocks			$	-		$	99,990
Unlisted stocks				916,650			916,784
				916,650			1,016,774
Valuation adjustment
-through other comprehensive income		(		547,127)	(		490,265)
				369,523			526,509
Total			$	369,523		$	526,509

• A. The Group has elected to classify equity and debt investments that are considered to be strategic investments or steady dividend income as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $474,729 thousand and $777,957 thousand as at December 31, 2023 and 2022, respectively.

• B. On November 7, 2023, as the Company increased its investments in DONPON PRECISION INC., resulting to changes in the shareholding ratio, and the Company obtained influence over changes in its business model. Accordingly, the Company reclassified the investment increase from financial assets at fair value through other comprehensive income to investments accounted for using equity method. Please refer to Note 6(7) for details.

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

		Years ended	December31,	December31,
		2023		2022
Equity instruments at fair value through other
comprehensive income
Fair value change recognised in other
comprehensive income	$	8,152	($	361,602)
Cumulative gains reclassified to
retained earnings due to derecognition	$	60,254	$	-
Dividend income recognised in profit or loss	$	7,775	$	8,850
Debt instruments at fair value through other
comprehensive income
Fair value change recognised in profit or loss	($	8,925)	$	15,150
Fair value change recognised in other
comprehensive income	$	2,687	($	5,628)
Cumulative other comprehensive
income reclassified to profit or loss
Interest income recognised in profit or loss	$	4,754	$	5,831

• D. As of December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the financial assets at fair value through other comprehensive income held by the Group were $474,729 thousand and $777,957 thousand, respectively.

• E. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

• F. Information relating to credit risk of financial assets at fair value through other comprehensive income is provided in Note 12(2).

• G. The counterparties of the Company’s investments in debt instruments have good credit quality; those debt securities are all rated as investment grade.

(4) Accounts receivable

Accounts receivable
		December	31,2023		December	31,2022
Accounts receivable		$	9,241,314		$	8,731,145
Less: Allowance for uncollectible accounts	(		16,839)	(		21,447)
		$	9,224,475		$	8,709,698

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A. The aging analysis of accounts receivable is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December31,2023 December31,2022 9,169,410 $ 8,524,130 $ 58,076 177,174 2,535 15,153 52 4,853 11,241 9,835 9,241,314 $ 8,731,145 $

The above aging analysis was based on past due date.

• B. As of December 31, 2023 and 2022, and January 1, 2022, the balances of receivables (including notes receivable) from contracts with customers amounted to $9,224,475 thousand, $8,709,698 thousand and $9,365,119 thousand, respectively.

• C. The Group took out a credit insurance on the accounts receivable. The insurance company audits the amount and pays 90% of the amount when the default occurred. As of December 31, 2023 and 2022, the insured accounts receivable amounted to $7,614,787 thousand and $8,322,395 thousand, respectively.

• D. The Group does not hold any collateral as security.

• E. The Group entered into a factoring agreement which has no right of recourse with ING BANK N.V., TAIPEI BRANCH and Bank of America on July 19, 2021 and October 2, 2019, respectively. As of December 31, 2023 and 2022, there were no accounts receivable that were outstanding and expected to be transferred (reclassified as financial assets at fair value through other comprehensive income). Please refer to Note 6(5) for information on transfer of financial assets.

• F. Information relating to credit risk of accounts receivable is provided in Note 12(2).

• (5) Transfer of financial assets

• A. Transferred financial assets that are derecognized in their entirety

  • None for December 31, 2023 and 2022.

• B. Transferred financial assets that are not derecognized in their entirety

  • i. On July 19, 2021, the Group entered into a factoring agreement with ING BANK N.V., TAIPEI BRANCH to sell its accounts receivable. In accordance with the agreement, the Group transferred first 90% of accounts receivable and has obligated to provide partial guarantees for the default risk of the transferred accounts receivable. Therefore, the Group has not derecognized the accounts receivable sold in their entirety and may not pledge these accounts receivable to a third party.

  • ii. As of December 31, 2023 and 2022, the related information of the transferred accounts receivable sold that the Group continuously recognized to the extent of continuing involvement were as follows:

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Total carrying amount of the original assets before transferring Carrying amount of the assets continuously recognized	December31,2023 December31,2022 - $ 1,206,473 $ - 120,647

(6) Inventories

Inventories
Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods	Cost Allowance for valuation loss 1,732,946 $ 128,773) ($ 470,522 10,597) ( 1,861,814 104,592) ( 4,065,282 $ 243,962) ($ December 31, 2023 Cost Allowance for valuation loss 1,689,950 $ 137,852) ($ 432,220 13,370) ( 3,112,290 172,661) ( 5,234,460 $ 323,883) ($ December31,2022	Book value
		1,604,173 $ 459,925 1,757,222
		3,821,320 $
		Book value
		1,552,098 $ 418,850 2,939,629
		4,910,577 $

The cost of inventories recognized as expense for the year :

			Years ended	December31,	December31,
			2023		2022
Cost of goods sold		$	31,993,842	$	30,602,914
Loss on scrapping inventory			34,165		144,326
(Gain) loss on slow-moving inventories and decline
in market value	(		79,921)		98,817
Loss on physical inventory			330		81
		$	31,948,416	$	30,846,138

The Group reversed a previous inventory write-down because inventories with decline in market value were partially sold by the Group during the year ended December 31, 2023.

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(7) Investments accounted for using equity method

Investments accounted for using equity method
			Years ended	December31,
			2023		2022
At January 1		$	5,028,458	$	4,699,769
Increase in investments accounted for using
equity method			409,928		19,650
Share of profit or loss of investments accounted
for using the equity method			284,801		208,914
Earnings distribution of investments	(		213,003)		-
Changes in capital surplus			26,955		16,692
Changes in other equity items	(		94,837)		83,321
Changes in retained earnings	(		22)		62
Reclassification of credit balance of investments
accounted for using equity method/ reversal of
non- current liabilities	(		14)		50
Transferred from financial assets at fair value through
other comprehensive income			160,244		-
At December 31		$	5,602,510	$	5,028,458

• A. On July 28, 2022, the Company and the Group’s subsidiary Merry Capital Inc., invested in CDIBMac Limited Partnership as resolved by the Board of Directors, and increased their investments in CDIB-Mac Limited Partnership in the accumulative amount of $104,533 thousand and $2,450 thousand in May 25, 2023 and September 7, 2023, respectively.

• B. On January 31, 2023, the Group ’ s subsidiary, MERRY ELECTRONICS (SHENZHEN) CO., LTD. (“MECL”), invested in DONG GUAN GET PINK ELECTRONICS CO., LTD. in the amount of RMB 3,858 thousand (approximately NTD 16,925 thousand), with 33% ownership, as resolved by the Board of Directors. The registration for the investment was completed.

• C. On October 26, 2023, the Board of Directors resolved to increase its investments in the private placement common shares of DONPON PRECISION INC. amounting to $286,020 thousand, and the Company accumulatively acquired 16.22% equity interests in the company, and further had significant influence over the company. The Company had reclassified the investment which was initially recognised in financial assets at fair value through other comprehensive income amounting to $160,244 thousand, including realised valuation gains in the amount of $60,254 thousand. Please refer to Note 6(3) for details.

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A. Details are as follows ：

Details are as follows：
Associates with significant influence Merry Electronics(Suzhou) Co., Ltd. (MECE) Associates with insignificant influence Merry Electronics (Huizhou)Co., Ltd. (MECH) Guangdong Luxshare & Merry Electronics Co.,Ltd. (MEDG) DONPON PRECISION INC CDIB-Mac Limited Partnership (MAC FUND) Leohab Enterprise Co., Ltd. (LEOHAB) DONG GUAN GET PINK ELECTRONICS CO., LTD(DONG GUAN GET PINK) Merry Electronics (Shanghai)Co., Ltd. (MECS) Subtotal Add: Credit balance of investments accounted for using the equity method transferred to non-current liabilities	December31,2023	December31,2022
	3,279,717 $ 1,286,560 422,596 441,257 116,837 39,554 15,989 1,095) ( 5,601,415 1,095 5,602,510 $	3,251,933 $ 1,311,066 407,293 - 18,584 39,582 - 1,109) ( 5,027,349 1,109 5,028,458 $

B. Share of profit (loss) of associates accounted for using the equity method ：

			Years ended	December31,	December31,
Investee			2023		2022
MECE		$	64,066	$	7,574
MECH			210,554		184,874
MEDG			23,081		24,753
DONPON	(		4,172)		-
MAC FUND	(		8,729)	(	1,066)
LEOHAB			715	(	7,222)
DONG GUAN GET PINK	(		714)		-
MECS			-		1
		$	284,801	$	208,914

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C. Associates

• (a) The basic information of the associates that is material to the Group is as follows:

Shareholding ratio Company Principal place December December Nature of Methods of name of business 31, 2023 31, 2022 relationship measurement MECE Mainland China 49.00% 49.00% Holding more Equity method than 20% of voting right of stockholders

• (b) The summarised financial information of the associates that are material to the Group is as follows:

Balance sheet

follows: Balance sheet
		MERRY ELECTRONICS(SUZHOU)CO.,LTD
			December31,2023	December	31,2022
Current assets		$	5,878,001	$	4,984,442
Non-current assets			4,160,057		5,534,283
Current liabilities	(		3,164,937)	(	3,594,226)
Non-current liabilities	(		61,207)	(	57,220)
Total net assets		$	6,811,914	$	6,867,279
Share in associate's net assets		$	3,337,838	$	3,364,967
Realized (unrealized) loss
from upstream and
sidestream transactions	(		58,121)	(	113,034)
Carrying amount of the associate		$	3,279,717	$	3,251,933
Statement of comprehensive income
		MERRY ELECTRONICS(SUZHOU)CO.,LTD
			Years ended	December31,
			2023	2022
Revenue		$	9,599,575	$	8,914,602
Profit for the period from
continuing operations		$	18,679	$	128,700
Total comprehensive income		$	18,679	$	128,700

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• (c) The carrying amount of the Group’s interests in all individually immaterial associates and the Group’s share of the operating results are summarized below:

			Years ended	December	31,
			2023		2022
Share of profit of associates and joint		$	220,735	$	201,340
ventures accounted for using the
equity method
Other comprehensive income (loss),
net of tax	(		28,414)		22,160
Total comprehensive income		$	192,321	$	223,500

(Remainder of page intentionally left blank)

~46~

(8) Property, plant and equipment

Year ended December 31, 2023

Cost Openingbalance Additions Reductions Transfers Land 792,675 $ - $ - $ - $ Land improvements 599 - - - Buildings and structures 1,774,209 153,183 1,556) ( 129,898 Machinery 3,166,963 180,810 76,510) ( 24,799 Transportation equipment 22,133 72 5,054) ( - Office equipment 302,683 29,366 16,034) ( 22,152 Others 286,053 45,442 7,802) ( 40,651 Unfinished construction 124,368 76,720 3,175) ( 194,657) ( 6,469,683 485,593 $ 110,131) ($ 22,843 $ Accumulated depreciation Land improvements 581) ($ 4) ($ - $ - $ Buildings and structures 584,319) ( 72,039) ( 1,556 1,977 Machinery 1,377,578) ( 400,492) ( 62,483 4,051 Transportation equipment 16,450) ( 1,897) ( 4,652 - Office equipment 202,973) ( 35,555) ( 12,236 - Others 139,879) ( 50,425) ( 6,720 6,028) ( 2,321,780) ( 560,412) ($ 87,647 $ - $ 4,147,903 $

Endingbalance 281 $ 792,956 $ 5 604 27,967) ( 2,027,767 55,771) ( 3,240,291 255) ( 16,896 2,511) ( 335,656 6,274) ( 358,070 10) ( 3,246 92,502) ($ 6,775,486 5) ($ 590) ($ 8,574 644,251) ( 27,133 1,684,403) ( 194 13,501) ( 2,035 224,257) ( 3,045 186,567) ( 40,976 $ 2,753,569) ( 4,021,917 $ Effect of foreign currency exchange differences

~47~

Year ended December 31, 2022

Cost Openingbalance Additions Land 790,477 $ - $ Land improvements 543 17 Buildings and structures 1,484,904 13,609 Machinery 2,785,124 256,438 Transportation equipment 21,063 765 Office equipment 276,950 22,904 Others 241,388 50,139 Unfinished construction 208,125 155,419 5,808,574 499,291 $ Accumulated depreciation Land improvements 543) ($ - $ Buildings and structures 508,737) ( 73,910) ( Machinery 1,031,903) ( 366,058) ( Transportation equipment 14,329) ( 1,915) ( Office equipment 189,640) ( 33,066) ( Others 112,419) ( 32,855) ( 1,857,571) ( 507,804) ($ 3,951,003 $	Reductions Transfers - $ - $ - - 12,763) ( 226,598 62,058) ( 81,033 3) ( - 25,229) ( 21,432 14,802) ( 1,883 1,128) ( 238,564) ( 115,983) ($ 92,382 $ - $ - $ 12,763 - 51,506 - 1 - 24,288 - 7,884 - 96,442 $ - $

A. The Group had no borrowing costs capitalized as part of property, plant and equipment.

B. Information about the property, plant and equipment that were pledged by the Group to others as collateral is provided in Note 8.

~48~

－ (9) Leasing arrangements lessee

• A. The Group leases various assets including land, buildings, machinery and equipment as well as business vehicles. Rental contracts are typically made for periods of 1 to 45 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. The Group’s short-term leases comprise the office, dormitory and apparatus and equipment. Lowvalue assets comprise office equipment.

• C. The carrying amount of right-of-use assets and the depreciation charge are as follows:

Land Buildings Machinery and equipment Transportation equipment Office equipment Other equipment Land Buildings Machinery and equipment Transportation equipment Office equipment Other equipment	December31,2023 December31,2022 Carrying amount Carrying amount 79,399 $ 86,854 $ 165,043 202,878 1,026 2,392 1,577 1,287 127 109 - 34 247,172 $ 293,554 $ Years ended December 31	December31,2022
		Carrying amount
		86,854 $ 202,878 2,392 1,287 109 34
		293,554 $
	2023 Depreciation charge 4,842 $ 113,534 1,251 905 145 33 120,710 $	2022
		Depreciationcharge
		4,904 $ 99,280 1,430 1,261 162 77
		107,114 $

• D. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $93,901 thousand and $196,666 thousand, respectively.

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

Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	Years endedDecember31	Years endedDecember31
	2023 7,265 $ 34,950 260 42,475 $	2022
		5,325 $ 39,322 312
		44,959 $

For the years ended December 31, 2023 and 2022, the Group’s total cash outflow for leases were $177,451 thousand and $151,385 thousand, respectively.

~49~

(10) Intangible assets

Year ended December 31, 2023

==> picture [714 x 360] intentionally omitted <==

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

Effect of foreign
currency
Cost Opening balance Additions Reductions exchange differences Ending balance
Goodwill $ 931,678 $ - $ - $ - $ 931,678
Computer software 622,674 11,681 ( 4,146) ( 452) 629,757
- - -
Customer relationship 326,550 326,550
Technical skills 115,748 - - - 115,748
Trademarks 61,481 - - - 61,481
Others 44,263 4,877 - 63 49,203
Sub-total 2,102,394 $ 16,558 ($ 4,146) ($ 389) 2,114,417
Accumulated amortization
Computer software ($ 478,230) ($ 79,258) $ 4,146 $ 131 ($ 553,211)
- -
Customer relationship ( 197,567) ( 40,458) ( 238,025)
Technical skills ( 104,174) ( 11,574) - - ( 115,748)
Trademarks ( 24,403) ( 5,518) - - ( 29,921)
Others ( 33,311) ( 5,682) - ( 22) ( 39,015)
Sub-total ( 837,685) ($ 142,490) $ 4,146 $ 109 ( 975,920)
Accumulated
Impairment loss
Goodwill ($ 161,766) ($ 65,510) $ - $ - ( 227,276)
Total $ 1,102,943 $ 911,221
----- End of picture text -----

~50~

Year ended December 31, 2022

Cost Openingbalance Additions Goodwill 931,678 $ - $ Computer software 590,844 30,741 Customer relationship 326,550 - Technical skills 115,748 - Trademarks 61,481 - Others 38,093 6,014 Sub-total 2,064,394 36,755 $ Accumulated amortization Computer software 406,530) ($ 71,145) ($ Customer relationship 153,503) ( 44,064) ( Technical skills 81,024) ( 23,150) ( Trademarks 18,885) ( 5,518) ( Others 28,273) ( 4,982) ( Sub-total 688,215) ( 148,859) ($ Accumulated Impairment loss Goodwill - $ 161,766) ($ Total 1,376,179 $		Reductions
		- $ 133 - - - - 133 $ - $ - - - - - $ - $

~51~

A. Details of amortization in intangible assets are as follows:

				Years endedDecember31,	Years endedDecember31,	Years endedDecember31,
				2023		2022
Operating costs		$		15,481 $		9,981
Selling expenses				11,640		12,063
Administrative expenses				72,501		81,663
Research and development expenses				42,868		45,152
		$		142,490 $		148,859
Goodwill allocated to the Group’s cash-generating units				is as follows:
				December31,2023
		Cost	Accumulatedimpairment			Book value
Goodwill:
Asian Elite And Indigo	$	581,644	($	227,276)	$	354,368
Austar Hearing (Xiamen)		210,299		-		210,299
Huges Hi-Tech		139,735		-		139,735
	$	931,678	($	227,276)	$	704,402
				December31,2022
		Cost	Accumulated impairment			Bookvalue
Goodwill:
Asian Elite And Indigo	$	581,644	($	161,766)	$	419,878
Austar Hearing (Xiamen)		210,299		-		210,299
Huges Hi-Tech		139,735		-		139,735
	$	931,678	($	161,766)	$	769,912

B. Goodwill allocated to the Group’s cash-generating units is as follows:

For the years ended December 31, 2023 and 2022, the recoverable amount which was calculated based on use in value was less than carrying amount, the Group recognised impairment loss of goodwill amounting to $65,510 thousand and $161,766 thousand, respectively, and the balance of goodwill after recognising impairment loss amounted to $704,402 thousand and $769,912 thousand, respectively. In addition, value in use adopts pre-tax cash flow projections based on financial budgets approved by the management covering a five-year period. The key assumptions used for value-in-use calculations are as follows:

December31,2023	Huges Hi-Tech	Asian Elite And Indigo	Austar Hearing (Xiamen)
Discount rate Growth rate December31,2022	6.58% 10% Huges Hi-Tech	14% 6.25%~10.07% Asian Elite And Indigo	16.17% 3%~21.38% Austar Hearing (Xiamen)
Discount rate Growth rate	1.49% 10%	17.43% 7.71%~62%	14.98% 3%~20%

C. The Group has no intangible assets pledged as collateral.

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(11) Impairment of non-financial assets

• A. The Group recognized impairment loss for the years ended December 31, 2023 and 2022. Details of such loss are as follows :

Accumulated impairment-Goodwill

	Years ended	December31,
	2023	2022
Recognized through		Recognized through
	profit or loss	profit or loss
$	65,510	161,766 $

B. Please refer to Note 6 (10) for the impairment to intangible assets.

(12) Short-term borrowings

Type of borrowings Bank borrowings Credit loan Secured borrowings Type ofborrowings Bank borrowings Credit loan Secured borrowings	December31,2023 1,089,829 $ 43,270 1,133,099 $ December 31, 2022 2,102,771 $ 44,080 2,146,851 $	Interest rate range Collateral 1.66%~3.80% None 3.70% Patents Interestraterange Collateral 1.60%~5.25% None 3.95% Patents

• A. Interest expense recognized in profit or loss amounted to $22,411 thousand and $47,409 thousand for the years ended December 31, 2023 and 2022, respectively.

• B. The Group provided endorsements and guarantees for the credit loans as of December 31, 2023 and 2022.

(13) Other payables

and 2022. Other payables
		December	31,2023		December	31,2022
Payroll and bonus payable		$	498,293		$	399,878
Employee compensation payable			191,454			163,655
Payables on equipment			71,416			105,829
Directors’ remuneration payable			36,982			40,299
Others			587,789			484,782
		$	1,385,934		$	1,194,443
Bonds payable
		December	31,2023		December	31,2022
Bonds payable		$	2,999,900		$	3,000,000
Less: Discount on bonds payable	(		17,639)	(		46,162)
Sub-total			2,982,261			2,953,838
Less: Current portion	(		2,982,261)			-
Total		$	-		$	2,953,838

(14) Bonds payable

~53~

• A. The details of the third domestic unsecured convertible bonds issued by the Company on August 11, 2021 are as follows:

• (a) The terms of the third domestic unsecured convertible bonds issued by the Company are as follows:

  • i. The Company issued $3,015,000 thousand, 0% third domestic unsecured convertible bonds, as approved by the regulatory authority. The bonds mature three years from the issue date August 11, 2021 to August 11, 2024 and will be redeemed in cash at face value at the maturity date. The bonds were listed on the Taipei Exchange on August 11, 2021.

  • ii. The bondholders have the right to ask for conversion of the bonds into common shares of the Company at any time during the period from the date after three months of the bonds issued to the maturity date by notifying the Taiwan Depository & Clearing Corporation through the dealer to the Company, except for (i) the stop transfer period as specified in the terms of the bonds or the laws/regulations; (ii) the book closure date of the issuance of bonus shares, and of cash dividends, the period between the date that is 15 business days before the book closure date of a capital increase to the ex-right date; (iii) the period between the record date of a capital reduction and the prior day before the commencement of stock trading after stocks are repurchased; (iv) the period between the start date of stopping conversion due to implementing changes of face value of stocks and the prior day before the trading date that new shares start to be exchanged to stocks, cannot ask conversions. Other than the aforementioned period, the bonds can be converted into common shares at any time after applying request to Taiwan Depository & Clearing Corporation through securities firms. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding common shares.

  • iii. The conversion price of the bonds is set up based on the pricing model specified in the terms of the bonds, and is subject to adjustments if the condition of the anti-dilution provisions occurs subsequently. As of December 31, 2023, the conversion price was $104.9 (in dollars) per share.

  • iv. The Company may repurchase all the bonds outstanding in cash at the bonds’ face value at any time after the following events occur: (i) the closing price of the Company common shares is above the then conversion price by 30% for 30 consecutive trading days during the period from the date after three months of the bonds issue to 40 days before the maturity date, or (ii) the outstanding balance of the bonds is less than 10% of total initial issue amount, the Company has the right to redeem the convertible bonds in accordance with the Article 18 of the terms of issuance and conversion during the period from the date after three months of the bonds issue to 40 days before the maturity date.

  • v. Under the terms of the bonds, all bonds redeemed (including bonds repurchased from the Taipei Exchange), matured and converted are retired and not to be re-issued; all rights and obligations attached to the bonds are also extinguished.

• (b) As of December 31, 2023, the bonds totaling $100 thousand (face value) had been converted into 953 shares of common stock. After the issuance, the applicable conversion price was adjusted to $104.9 (in dollars) per share based on the formula stipulated in the issuance terms when the Company’s outstanding common shares increased.

• B. Regarding the issuance of convertible bonds, the equity conversion options amounting to $96,854 thousand were separated from the liability component and were recognized in ‘capital surplus - share options’ in accordance with IAS 32. The call options embedded in bonds payable were separated from their host contracts and were recognized in ‘financial assets at fair value through profit or loss’ in net amount in accordance with IFRS 9 because the economic characteristics and risks of the embedded derivatives were not closely related to those of the host contracts.

~54~

• (15) Long term borrowings

Type ofborrowings	Borrowing period andrepayment term Interest rate range Collateral Borrowing period is from 2020/2/20 to 2025/2/20; interest is repayable monthly, principal is repayable starting from 2022. (Notes 1 and 2) 0.80%~1.16% None Borrowing period is from 2020/2/20 to 2027/2/19; interest is repayable monthly, principal is repayable starting from 2022. 1.10%~5.60% None Borrowing period is from 2022/9/27 to 2026/6/27; interest is repayable monthly, principal is repayable starting from 2023. 2.00%~3.75% None Borrowing period is from 2023/9/27 to 2033/9/27; interest is repayable monthly, principal is repayable starting from 2023. 3.65% Plant	December 31, 2023
Long-term bank borrowings Credit loan Credit loan Credit loan Secured borrowings Less: Expiring within one year or one operating cycle		143,889 $ 1,165,921 56,121 83,425 1,449,356 446,179) ( 1,003,177 $

~55~

Type ofborrowings	Borrowing period andrepayment term Interest rate range Collateral Borrowing period is from 2020/2/20 to 2025/2/20; interest is repayable monthly, principal is repayable starting from 2022. (Notes 1 and 2) 0.68%~1.03% None Borrowing period is 36 months starting from 2020/7/15 and extended every month ; principal is repayable starting from 2023. 5.89% None Borrowing period is from 2020/2/20 to 2027/2/19; interest is repayable monthly, principal is repayable starting from 2022. 0.98%~2.40% None		December 31, 2022
Long-term bank borrowings Credit loan Credit loan Credit loan Less: Expiring within one year or one operating cycle		258,889 $ 76,100 1,021,458 1,356,447 451,919) ( 904,528 $

Interest expense recognized in profit or loss amounted to $30,353 thousand and $16,678 thousand for the years ended December 31, 2023 and 2022, respectively.

• Note 1: In November 2019, the Company entered into a long-term loan contract with Taipei Fubon Bank. As of December 31, 2023, all available borrowing facilities was used. Aforementioned contract conditions:

• During the credit period, the following financial ratios shall be maintained and the audited/reviewed consolidated financial statements shall be checked semi-annually:

• (a) Current ratio shall not be lower than 100%;

• (b) Debt ratio (total liabilities/total equity)shall not be higher than 200%;

• (c) Interest coverage ratio shall not be lower than 10.

• (d) Net tangible assets shall not be less than 8 billion.

• Note 2: In February 2020, the Company entered into a long-term loan contract with JIHSUN BANK. As of December 31, 2023, all available borrowing facilities was used. Aforementioned contract conditions:

• During the credit period, the following financial ratios shall be maintained and the audited/reviewed consolidated financial statements shall be checked semi-annually:

• (a) Current ratio shall not be lower than 100%;

• (b) Debt ratio (total liabilities/tangible assets) shall not be higher than 250%;

• (c) Tangible assets shall be maintained at least $8 billion.

~56~

(16) Pensions

A. (a) The Company and its domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company and its domestic subsidiaries contribute monthly an amount equal to 5.1% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company and its domestic subsidiaries would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company and its domestic subsidiaries will make contributions for the deficit by next March.

• (b) The amounts recognized in the balance sheet are as follows:

		December	31,	2023	December 31, 2022	December 31, 2022	December 31, 2022
Present value of defined benefit obligations		$	86,576		$		80,364
Fair value of plan assets		(	50,522)		(		42,745)
Net defined benefit liability		$	36,054		$		37,619
Movements in net defined benefit	liabilities are as follows:
	Present value of
	defined benefit		Fair value of			Net defined
		obligations		planassets		benefitliability
Year ended December 31, 2023
Balance at January 1	$	80,364	($	42,745)		$	37,619
Current service cost		230			-		230
Interest (income) expense		992	(		518)		474
		81,586	(	43,263)			38,323
Remeasurements:
Return on plan assets
(excluding amounts
included in interest
income or expense)		-	(		327)	(	327)
Change in financial assumptions		773			-		773
Experience adjustments		5,902			-		5,902
		6,675	(		327)		6,348
Pension fund contribution		-	(	8,617)		(	8,617)
Paid pension	(	1,685)		1,685			-
Balance at December 31	$	86,576	($	50,522)		$	36,054

• (c) Movements in net defined benefit liabilities are as follows:

~57~

Present value of defined benefit obligations Year ended December 31, 2022 Balance at January 1 122,613 $ Current service cost 428 Interest (income) expense 832 Past service cost 1,470) ( 122,403 Remeasurements: Return on plan assets (excluding amounts included in interest income or expense) - Change in financial assumptions 4,990) ( Experience adjustments 3,586) ( 8,576) ( Pension fund contribution - Paid past pension 17,434) ( Paid pension 16,029) ( Balance at December 31 80,364 $	Fair value of planassets	Net defined benefitliability
	42,491) ($ - 281) ( 840 41,932) ( 2,819) ( - - 2,819) ( 14,023) ( - 16,029 42,745) ($	80,122 $ 428 551 630) ( 80,471 2,819) ( 4,990) ( 3,586) ( 11,395) ( 14,023) ( 17,434) ( - 37,619 $

(d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s and domestic subsidiaries’ defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). With regarding to the utilization of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings are less than aforementioned rates, government shall make payment for the deficit after being authorized by the Regulator. The Company and domestic subsidiaries have no right to participate in managing and operating that fund and hence the Company and domestic subsidiaries are unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2023 and 2022 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

(e) The principal actuarial assumptions used were as follows:

	Years endedDecember31,	Years endedDecember31,
	2023	2022
Discount rate	1.20%	1.30%
Future salary increases	3.00%	3.00%
Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience
Mortality Table.

~58~

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

==> picture [450 x 142] intentionally omitted <==

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

Discount rate Future salary increases
Increase Decrease Increase Decrease
0.25% 0.25% 0.25% 0.25%
December 31, 2023
Effect on present value of
defined benefit obligation ($ 1,913) $ 1,983 $ 1,942 ($ 1,884)
December 31, 2022
Effect on present value of
defined benefit obligation ($ 1,897) $ 1,970 $ 1,933 ($ 1,870)
----- End of picture text -----

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) The Company expects to pay contribution for pension plan amounting to $2,311 thousand in 2024.

balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) The Company expects to pay contribution for pension plan amounting to $2,311 thousand in 2024.	balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) The Company expects to pay contribution for pension plan amounting to $2,311 thousand in 2024.	balance sheet are the same. The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period. (f) The Company expects to pay contribution for pension plan amounting to $2,311 thousand in 2024.
(g) As of December 31, 2023, the weighted average duration of the retirement plan is 9 years.
The analysis of timing of the future pension payment was as follows:
Within 1 year	$	6,034
1-2 year(s)		14,783
2-5 years		8,775
Over 5 years		66,671
	$	96,263

• B. (a) Effective July 1, 2005, the Company and its domestic subsidiaries have established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company and its domestic subsidiaries contribute monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) The subsidiaries and second-tier subsidiaries in mainland China have set up a defined contribution plan. Monthly contribution to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Group has no further obligations.

• (c) The subsidiary, METC, in Thailand is required to pay pension of up to 10 months of employee salaries to the employees upon their retirement. The pension liability is estimated annually based on the employees’ total salaries and expected service years in accordance with the regulations of the Thailand government.

• (d) The subsidiary, MEVN, in Vietnam is subject to related local regulation, which is required to contribute a statutory percentage of the employees’ monthly salaries and wages to the employees’ pension funds, and to pay it to the competent authority. Other than the monthly contributions, the Group has no further obligations.

• (e) The subsidiary, MEST, in Hong Kong is subject to related local regulation, which is required

~59~

to enroll in mandatory provident fund schemes for employees and contribute a statutory percentage of the employees’ monthly salaries and wages to the employees’ pension funds, and to pay it to the competent authority. Other than the monthly contributions, the Group has no further obligations.

  - (f) The subsidiary, MESG, in Singapore is subject to related local regulation, which is required to contribute a statutory percentage of the employees’ monthly salaries and wages to the employees’ pension funds, and to pay it to the competent authority. Other than the monthly contributions, the Group has no further obligations.

  - (g) The subsidiary, MEMP, in Malaysia is subject to related local regulation, which is required to contribute a statutory percentage of the employees’ monthly salaries and wages to the employees’ pension funds, and to pay it to the competent authority. Other than the monthly contributions, the Group has no further obligations.

  - (h) The pension costs under defined contribution pension plans of the Group for the years ended December 31, 2023 and 2022 were $151,784 thousand and $149,942 thousand, respectively.

• (17) Share-based payment

• A. For the years ended December 31, 2023 and 2022, the fair value of the Company’s stocks granted on the grant date in accordance with the Company’s share-based payment agreement is measured using the closing price. Related information is as follows:

Type of arrangement	Grant date	Quantity granted	Contract period	Stock price	Exercise price	Fair value per unit	Vesting condition
The first restricted stocks to employees in 2019 The second restricted stocks to employees in 2019 The first restricted stocks to employees in 2020 The second restricted stocks to employees in 2020 The first restricted stocks to employees in 2021 The first restricted stocks to employees in 2022	2019.11.02 2020.08.05 2021.05.31 2021.07.30 2022.07.29 2023.07.28	813 units 387 units 416 units 1,504 units 1,800 units 1,645 units	3 years 3 years 3 years 3 years 3 years 3 years	150.0 169.0 107.5 111.0 80.7 91.9	0 0 0 0 0 0	150.0 169.0 107.5 111.0 80.7 91.9	Note Note Note Note Note Note

• Note: Depending on the employee’s tenure in the Company (1 to 3 years), the employees can vest stocks at the ratio of 30%, 30% and 40% in three years based on the number of stocks written on the notification. The conditions for vesting restricted stocks are as follows:

• (a) For the employees who are currently working in the Company, whose services have reached 1 year and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of vested share ratio is 30%.

• (b) For the employees who are currently working in the Company, whose services have reached 2 years and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of accumulated vested share ratio is 60%.

• (c) For the employees who are currently working in the Company, whose services have reached 3 years and achieved the performance of the most recent year’s consolidated financial statements and the target personal performance, the ceiling of accumulated vested share ratio is 100%.

• (d) The Company will repurchase and retire the stocks that do not meet the conditions of vesting

~60~

for the employees who resign during the vesting period or do not meet the condition of vesting by the issuance price.

The aforementioned restricted stocks issued by the Company cannot be transferred during the vesting period and the commissioned trust custodians execute the shareholders’ rights on behalf of the employees.

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

		2023	2023				2022	2022
				Weighted-					Weighted-
			average exercise					average exercise
		No. of share		price		No. of share			price
		(in thousands)		(indollars)		(in thousands)			(indollars)
At January 1		3,348	$	-			2,417	$	-
Restricted stocks granted		1,645		-			1,800		-
Restricted shares retired	(	809)		-	(		342)		-
stocks retired	(	113)		-	(		527)		-
At December 31		4,071		-			3,348		-
Expenses incurred on share-based payment transactions are shown below:
				Years ended December 31,
				2023					2022
Equity-settled				$		132,310	$		62,334

• C. Expenses incurred on share-based payment transactions are shown below:

• (18) Share capital

• A. As of December 31, 2023, the Company’s authorized capital was $4,000,000 thousand, consisting of 400,000 thousand shares of ordinary stock (including 5,000 thousand shares reserved for employee stock options), and the paid-in capital was $2,193,434 thousand with a par value of $10 (in dollars) per share.

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

thousands):
		Years ended	December 31,
		2023		2022
At January 1		217,783		216,510
Employee restricted shares retired	(	113)	(	527)
Employee restricted shares granted		1,645		1,800
Conversion of convertible bonds		1		-
At December 31		219,316		217,783

• (a) The Company retired 28 thousand employee restricted shares as resolved at the meeting of the Board of Directors on February 22, 2024. The retirement of employee restricted shares was not yet completed as of February 22, 2024.

• (b) The Company retired 44 thousand shares, 8 thousand shares and 33 thousand shares of employee restricted shares as resolved at the meeting of the Board of Directors on October 26, 2023, July 27, 2023 and April 27, 2023 with the capital reduction effective date set on November 6, 2023, July 27, 2023 and May 3, 2023, respectively. The capital reduction through retirement of employee restricted shares was completed, except for the retirement of employee restricted shares resolved by the Board of Directors on October 26, 2023.

• (c) On April 28, 2022, the Board of Directors of the Company resolved to issue employee restricted shares. The issuance was approved by the Competent Authority on September 21,

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1. The Company issued 1,645 thousand common shares with the effective date set on July 28, 2023. The subscription price is $0 per share. The registration for the issuance of employee restricted shares was completed. The employee restricted shares issued are subject to certain transfer restrictions before their vesting conditions are qualified. Other than these restrictions, the rights and obligations of these shares issued are the same as other issued ordinary shares.

   • (d) The Company retired 147 thousand shares, 71 thousand shares and 40 thousand shares of employee restricted shares as resolved at the meeting of the Board of Directors on October 27, 2022, July 28, 2022 and April 28, 2022 with the capital reduction effective date set on October 27, 2022, July 28, 2022 and May 6, 2022, respectively. The capital reduction through retirement of employee restricted shares was completed.

   • (e) On April 29, 2021, the Board of Directors of the Company resolved to issue employee restricted shares. The issuance was approved by the Competent Authority on October 22, 2021. The Company issued 1,800 thousand common shares with the effective date set on July 29, 2022. The subscription price is $0 per share and the registration for the issuance of employee restricted shares was completed on August 19, 2022. The employee restricted shares issued are subject to certain transfer restrictions before their vesting conditions are qualified. Other than these restrictions, the rights and obligations of these shares issued are the same as other issued ordinary shares.

2. (f) The Company issued the third unsecured convertible bonds on August 11, 2021. As of December 31, 2023, the face value of the convertible bonds of $100 thousand had been converted into common shares amounting to 953 shares. Please refer to Note 6(14) for details.

3. (19) Capital surplus

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

2023

reserve is insufficient.				2023
At January 1 Convertible bonds converted into common shares Restricted stocks issued Restricted stocks vested Restricted stocks retired Recognition of change in equity of associates in proportion to the Company’s ownership At December 31		Share premium	Share option	Employee restricted stocks		Others Total 263,128 $ 4,720,866 $ - 90 - 134,725 - - - 9,662) ( 26,955 26,955 290,083 $ 4,872,974 $
		4,070,017 $ 93 - 77,432 - - 4,147,542 $	96,857 $ 3) ( - - - - 96,854 $	290,864 $ - 134,725 77,432) ( 9,662) ( - 338,495 $

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Share premium At January 1 4,035,505 $ Restricted stocks issued - Restricted stocks vested 34,512 Restricted stocks retired - Recognition of change in equity of associates in proportion to the Company’s ownership - At December 31 4,070,017 $		Share option Employee restricted stocks 96,857 $ 267,825 $ - 127,260 - 34,512) ( - 69,709) ( - - 96,857 $ 290,864 $ 2022	Others Total 246,436 $ 4,646,623 $ - 127,260 - - - 69,709) ( 16,692 16,692 263,128 $ 4,720,866 $

(20) Retained earnings

• A. Under the Company’s Articles of Incorporation, the current year’s earnings, after deduction of mandatory income tax, shall first be used to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve until the legal reserve equals the paid-in capital. After the provision or reversal of special reserve, the appropriation of the remaining earnings along with the unappropriated earnings of prior year shall be proposed by the Board of Directors and approved by the shareholders. The Board of Directors may, based on financial, business and operating perspectives, propose a distribution of earnings within an amount at least 30% of the new distributable earnings and not more than 80% of the accumulated distributable earnings for the current period. The dividends shall be preferably distributed in the form of cash, and can be appropriated in the shares. The ratio of cash dividends shall account for at least 30% of the total dividends distributed. All or partial of dividend and bonus that are distributed in the form of cash will be resolved and reported to the shareholders if more than 2/3 of the directors attend the Board of Directors’ meeting and more than 1/2 of the directors present at the meeting have agreed.

• B. The Company’s dividend policy is summarized below: as the Company operates in a volatile business environment and is in the stable growth stage, the residual dividend policy is adopted taking into consideration the Company’s financial structure, operating results and future expansion plans. In order to encourage employees and operation team, if the Company has any profit for the current year, the Company shall set aside 5% to 10% as employees’ compensation and no more than 2% as directors’ and supervisors’ remuneration. The employees’ compensation shall be distributed in the form of stock and cash by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors and report it in the shareholders’ meeting. Employees entitled to receive stock or cash as compensation include employees of subsidiaries of the company meeting certain specific requirements.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. (a) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings. In Accordance with Ruling No.1010051600 issued by

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Securities and Futures Bureau of the FSC on November 21, 2012, “unearned employee compensation” under employee restricted stock is not an unrealized item, and therefore is not required to set aside the special reserve. As of December 31, 2023, the special reserve set aside based on the above regulation amounted to $499,042 thousand.

• (b) The amounts previously set aside by the Company as special reserve on initial application of IFRSs in accordance with Order No. Financial-Supervisory-Securities-Corporate1010012865, dated April 6, 2012, shall be reversed proportionately when the relevant assets are used, disposed or reclassified subsequently. Such amounts are reversed upon disposal or reclassified if the assets are investment property of land and reversed over the use period if the assets are investment property other than land. As of December 31, 2023, the balance of capital surplus as aforementioned was $269,144 thousand.

• (c) As of December 31, 2023 and 2022, the balance of special reserve was $768,186 thousand and $748,930 thousand, respectively.

• E. The Company distributed earnings for the years ended December 31, 2022 and 2021 as resolved at the shareholders’ meeting on June 14, 2023 and June 15, 2022, respectively, are as follows:

Years ended December 31,

	Years ended December 31,	Years ended December 31,
Legal reserve Special reserve Cash dividends	Amount Dividends pershare Amount Dividends pershare 146,458 $ 113,098 $ 19,256 479,786 981,235 4.5 $ 866,040 4.0 $ 1,146,949 $ 1,458,924 $ 2022 2021
	Amount 146,458 $ 19,256 981,235 1,146,949 $	Dividends pershare
		4.0 $

The abovementioned distribution of earnings for the years ended December 31, 2022 and 2021 was in agreement with those amounts proposed by the Board of Directors on February 23, 2023 and February 24, 2022, respectively.

• F. The Company distributed earnings for the year ended December 31, 2023 as resolved at the Board of Directors on February 22, 2024 is as follows:

Year ended December 31, 2023

Legal reserve Special reserve Cash dividends	Amount 137,551 $ 204,826 1,030,914 1,373,291 $	Dividends pershare
		4.7 $

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(21) Other equity items

2023

			2023
At January 1 Issuance of restricted shares to employees Amortisation of employee restricted stocks Employee restricted shares retired Revaluation - gross Revaluation - tax Revaluation – associates Revaluation transferred to retained earnings – gross Currency translation differences: - Group - Tax on Group - Associates - Tax on associates At December 31	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from investments in debt instruments measured at fair value through other comprehensiveincome	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensiveincome	Cost of unearned employee compensation Total 228,260) ($ 996,446) ($ 151,176) ( 151,176) ( 132,310 132,310 10,787 10,787 - 10,839 - 784) ( - 60,254) ( - 35) ( - 98,016) ( - 19,648 - 94,837) ( - 18,613 236,339) ($ 1,209,351) ($
	258,567) ($ - - - - - - - 98,016) ( 19,648 94,837) ( 18,613 413,159) ($	2,687) ($ - - - 2,687 - - - - - - - - $	506,932) ($ - - - 8,152 784) ( 60,254) ( 35) ( - - - - 559,853) ($

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2022

		2022
Exchange differences on translation of foreign financial statements At January 1 605,572) ($ Issuance of restricted shares to employees - Amortisation of employee restricted stocks - Employee restricted shares retired - Revaluation - gross - Revaluation - tax - - Group 349,431 - Tax on Group 69,886) ( - Associates 83,321 - Tax on associates 15,861) ( At December 31 258,567) ($	Unrealized gains (losses) from investments in debt instruments measured at fair value through other comprehensiveincome	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensiveincome Cost of unearned employee compensation Total 146,299) ($ 220,316) ($ 969,246) ($ - 145,260) ( 145,260) ( - 62,334 62,334 - 74,982 74,982 361,602) ( - 367,230) ( 969 - 969 - - 349,431 - - 69,886) ( - - 83,321 - - 15,861) ( 506,932) ($ 228,260) ($ 996,446) ($
	2,941 $ - - - 5,628) ( - - - - - 2,687) ($

(22) Operating revenue

Operating revenue ecember 31 258,567) ($ 2,687 ($	) 506,932) ($ 228,260) ($ 996,44 ($	) 506,932) ($ 228,260) ($ 996,44 ($
Revenue from contracts with customers	Years endedDecember31,
	2023 36,690,383 $	2022
		35,398,690 $

• A. Disaggregation of revenue from contracts with customers

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

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Total segment revenue Revenue from internal segment transactions Revenue from external customer contracts Main region Europe US Mainland China Taiwan Others Total segment revenue Revenue from internal segment transactions Revenue from external customer contracts Main region Europe US Mainland China Taiwan Others	Taiwan Shenzhen Singapore Vietnam Others Total 26,701,755 $ 10,064,276 $ 8,364,498 $ 2,814,771 $ 6,183,465 $ 54,128,765 $ 38,069) ( 9,740,409) ( - 2,498,732) ( 5,161,172) ( 17,438,382) ( 26,663,686 323,867 8,364,498 316,039 1,022,293 36,690,383 11,241,138 90,143 5,822,461 - 195,965 17,349,707 14,452,774 - 2,534,316 - 327,439 17,314,529 131,134 233,724 - - 433,181 798,039 575,871 - - - - 575,871 262,769 - 7,721 316,039 65,708 652,237 26,663,686 $ 323,867 $ 8,364,498 $ 316,039 $ 1,022,293 $ 36,690,383 $ Year ended December31,2023 Electronic devices Taiwan Shenzhen Singapore Vietnam Others Total 25,903,833 $ 11,342,312 $ 7,707,271 $ 3,949,401 $ 4,971,623 $ 53,874,440 $ 15,146) ( 10,971,711) ( - 3,668,273) ( 3,820,620) ( 18,475,750) ( 25,888,687 370,601 7,707,271 281,128 1,151,003 35,398,690 11,598,015 113,216 5,755,073 - 242,687 17,708,991 12,400,282 - 1,951,609 - 534,890 14,886,781 245,985 257,383 - - 337,224 840,592 1,428,321 2 - - 302 1,428,625 216,084 - 589 281,128 35,900 533,701 25,888,687 $ 370,601 $ 7,707,271 $ 281,128 $ 1,151,003 $ 35,398,690 $ Year ended December31,2022 Electronic devices	Taiwan Shenzhen Singapore Vietnam Others Total 26,701,755 $ 10,064,276 $ 8,364,498 $ 2,814,771 $ 6,183,465 $ 54,128,765 $ 38,069) ( 9,740,409) ( - 2,498,732) ( 5,161,172) ( 17,438,382) ( 26,663,686 323,867 8,364,498 316,039 1,022,293 36,690,383 11,241,138 90,143 5,822,461 - 195,965 17,349,707 14,452,774 - 2,534,316 - 327,439 17,314,529 131,134 233,724 - - 433,181 798,039 575,871 - - - - 575,871 262,769 - 7,721 316,039 65,708 652,237 26,663,686 $ 323,867 $ 8,364,498 $ 316,039 $ 1,022,293 $ 36,690,383 $ Year ended December31,2023 Electronic devices Taiwan Shenzhen Singapore Vietnam Others Total 25,903,833 $ 11,342,312 $ 7,707,271 $ 3,949,401 $ 4,971,623 $ 53,874,440 $ 15,146) ( 10,971,711) ( - 3,668,273) ( 3,820,620) ( 18,475,750) ( 25,888,687 370,601 7,707,271 281,128 1,151,003 35,398,690 11,598,015 113,216 5,755,073 - 242,687 17,708,991 12,400,282 - 1,951,609 - 534,890 14,886,781 245,985 257,383 - - 337,224 840,592 1,428,321 2 - - 302 1,428,625 216,084 - 589 281,128 35,900 533,701 25,888,687 $ 370,601 $ 7,707,271 $ 281,128 $ 1,151,003 $ 35,398,690 $ Year ended December31,2022 Electronic devices	Taiwan Shenzhen Singapore Vietnam Others Total 26,701,755 $ 10,064,276 $ 8,364,498 $ 2,814,771 $ 6,183,465 $ 54,128,765 $ 38,069) ( 9,740,409) ( - 2,498,732) ( 5,161,172) ( 17,438,382) ( 26,663,686 323,867 8,364,498 316,039 1,022,293 36,690,383 11,241,138 90,143 5,822,461 - 195,965 17,349,707 14,452,774 - 2,534,316 - 327,439 17,314,529 131,134 233,724 - - 433,181 798,039 575,871 - - - - 575,871 262,769 - 7,721 316,039 65,708 652,237 26,663,686 $ 323,867 $ 8,364,498 $ 316,039 $ 1,022,293 $ 36,690,383 $ Year ended December31,2023 Electronic devices Taiwan Shenzhen Singapore Vietnam Others Total 25,903,833 $ 11,342,312 $ 7,707,271 $ 3,949,401 $ 4,971,623 $ 53,874,440 $ 15,146) ( 10,971,711) ( - 3,668,273) ( 3,820,620) ( 18,475,750) ( 25,888,687 370,601 7,707,271 281,128 1,151,003 35,398,690 11,598,015 113,216 5,755,073 - 242,687 17,708,991 12,400,282 - 1,951,609 - 534,890 14,886,781 245,985 257,383 - - 337,224 840,592 1,428,321 2 - - 302 1,428,625 216,084 - 589 281,128 35,900 533,701 25,888,687 $ 370,601 $ 7,707,271 $ 281,128 $ 1,151,003 $ 35,398,690 $ Year ended December31,2022 Electronic devices
			Electronic devices
	Taiwan Shenzhen 25,903,833 $ 11,342,312 $ 15,146) ( 10,971,711) ( 25,888,687 370,601 11,598,015 113,216 12,400,282 - 245,985 257,383 1,428,321 2 216,084 - 25,888,687 $ 370,601 $

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• B. Contract assets and liabilities ：

• (a) The Group has recognized the following revenue-related contract assets and liabilities:

December 31, 2023 December 31, 2022 January 1, 2022 Contract liabilities $ 892,122 $ 1,020,897 $ 874,000

• (b) Revenue recognized that was included in the contract liability balance at the beginning of the period ：

Years ended December 31, 2023 2022 Revenue recognized that was included in the contract liability balance at the beginning of the period $ 375,730 $ 236,156

(23) Other income

Other income Revenue recognized that was included in the contract liability balance at the beginning of the period	2023 2022 375,730 $ 236,156 $	2023 2022 375,730 $ 236,156 $
Compensation income (Note) Government grants Sample income Dividend income Rent income Other income	Years ended December 31,
	2023 157,006 $ 96,430 82,625 11,763 27,661 91,523 467,008 $	2022
		226,939 $ 171,173 42,597 14,341 9,029 24,134
		488,213 $

Notes: The Group had compensation agreement with Luxshare Limited. (24) Other gains and losses

Other gains and losses
		Years ended	December31,
		2023		2022
Foreign exchange (loss) gain	($	25,335)	$	507,858
Net gains (losses) on financial assets/liabilities
at fair value through loss or profit		29,907	(	9,929)
Impairment loss on goodwill	(	65,510)	(	161,766)
Gains (losses) on disposals of property, plant and
equipment		19,291	(	12,241)
Gains on disposals of investments		16,500		-
Other losses	(	15,398)	(	5,774)
	($	40,545)	$	318,148

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(25) Expenses by nature

Employee benefit expense Depreciation charge - property, plant and equipment Depreciation charge - right-of-use assets Amortization charge	2023 2022 3,527,116 $ 3,342,556 $ 560,412 507,804 120,710 107,114 142,490 148,859 4,350,728 $ 4,106,333 $ Years endedDecember31,

(26) Employee benefit expense

Employee benefit expense Depreciation charge - property, plant and equipment Depreciation charge - right-of-use assets Amortization charge	560,412 507,804 120,710 107,114 142,490 148,859 4,350,728 $ 4,106,333 $	560,412 507,804 120,710 107,114 142,490 148,859 4,350,728 $ 4,106,333 $
Wages and salaries Share-based payments Labor and health insurance fees Pension costs Directors’ remuneration Other personnel expenses Total	2023 2022 2,949,565 $ 2,852,446 $ 132,310 62,334 73,783 69,251 152,488 150,291 37,942 41,439 181,028 166,795 3,527,116 $ 3,342,556 $ Years endedDecember31,
		2,852,446 $ 62,334 69,251 150,291 41,439 166,795
		3,342,556 $

• A. To encourage employees and management team, in accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 5 to 10% for employees’ compensation and shall not be higher than 2% for directors’ remuneration. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation distributed in the form shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders at the shareholders' meeting. Employees’ compensation can be distributed in cash or shares and shall be distributed to the employees of subsidiaries of the Company who meet certain specific requirements.

• B. The details of employees’ compensation and directors’ and supervisors’ remuneration of the Company are as follows:

Company are as follows:
Employees’ compensation Directors’ and supervisors’ remuneration	Years ended December31,
	2023 184,910 $ 36,982 221,892 $	2022
		161,197 $ 40,299
		201,496 $

The abovementioned amounts were recognized in wages and salaries and were accrued at 10% and 8% for employees’ compensation and 2% and 2% for directors’ remuneration for the years ended December 31, 2023 and 2022, respectively, based on the distributable profit of the year. Employees’ compensation and directors’ and supervisors’ remuneration of 2022 as resolved at

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the Board of Directors’ meeting were in agreement with those amounts recognized in the profit or loss of 2022.

Information about employees’ compensation and directors’ and supervisors’ remuneration of the Company as resolved by the Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(27) Income tax

A. Income tax expense

(a) Components of income tax expense:

e tax ome tax expense Components of income tax expense:
			Years ended	December31,
			2023			2022
Current tax:
Current tax on profits for the year		$	459,772		$	307,300
Tax on undistributed surplus earnings			10,810			-
Prior year income tax overestimation	(		19,284)	(		27,180)
Total current tax			451,298			280,120
Deferred tax:
Origination and reversal of temporary
differences			16,300			147,850
Income tax expense		$	467,598		$	427,970

(b) The income tax (charge)/credit relating to components of other comprehensive income is as follows:

follows:
			Years ended	December31,
			2023	2022
Exchange differences changes on translation
of foreign financial statements - the Group		$	19,648	($	69,886)
Exchange differences changes on translation
of foreign financial statements - associates			18,613	(	15,861)
Changes in fair value of financial assets at fair
value through other comprehensive income	(		784)		969
Remeasurement of defined benefit obligations			1,269	(	2,279)
		$	38,746	($	87,057)

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B. Reconciliation between income tax expense and accounting profit

			Years ended	December31,	December31,	December31,
			2023			2022
Current tax:
Tax calculated based on profit		$	584,879		$	580,844
before tax and statutory tax rate
Expenses disallowed by tax regulation			4,434			2,470
Tax exempt income by tax regulation	(		76,835)	(		93,532)
Temporary differences not recognised
as deferred tax assets			13,098			32,065
Effect from investment tax credits	(		45,548)	(		66,568)
Income tax of controlled foreign corporation			4,243			-
Tax on undistributed surplus earnings			10,810			-
Prior year income tax overestimation	(		19,284)	(		27,180)
Others	(		8,199)	(		129)
Income tax expense		$	467,598		$	427,970

(Remainder of page intentionally left blank)

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• C. Amounts of deferred tax assets or liabilities as a result of temporary differences, tax losses and investment tax credits are as follows:

Deferred tax assets: - Temporary differences: Unrealized exchange loss Income tax expense Remeasurement of defined benefit obligations Allowance for bad debts Accumulated unused compensated absences Allowance for inventory valuation losses and loss for obsolete and slow- moving inventories Unrealized gain on valuation of financial instruments Amortisation of discounts on corporate bonds Cumulative translation adjustment of long-term equity investments Investment tax credits Others Total - Deferred tax liabilities Unrealized exchange gain Gain on overseas long-term investment Cumulative translation adjustment of long-term equity investments Adjustment of land value increment tax Unrealized gain on valuation of financial instruments Others Total			2023	2023	2023
		January 1, 2023	Recognized in profit or loss		Recognized in other comprehensive income		December 31, 2023
	614 $ 9,849 15,162 7,036 7,979 43,168 172 25,725 - 50,310 160,015 $ 2,800) ($ 1,476,469) ( 10,814) ( 800) ( 14,798) ( 28,541) ( 1,534,222) ($		13,914 $ 1,314 - 2,928) ( 555 18,912) ( 172) ( 5,417 - 1,057 245 $ 495 $ 24,733) ( - - 1,642) ( 9,335 16,545) ($	- $ - 1,269 - - - - - 27,447 - 28,716 $ - $ - 10,814 - 784) ( - 10,030 $		14,528 $ 11,163 16,431 4,108 8,534 24,256 - 31,142 27,447 51,367 188,976 $ 2,305) ($ 1,501,202) ( - 800) ( 17,224) ( 19,206) ( 1,540,737) ($

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2022

Deferred tax assets: - Temporary differences: Unrealized exchange loss Income tax expense Remeasurement of defined benefit obligations Allowance for bad debts Accumulated unused compensated absences Allowance for inventory valuation losses and loss for obsolete and slow- moving inventories Unrealized gain on valuation of financial instruments Amortisation of discounts on corporate bonds Cumulative translation adjustment of long-term equity investments Investment tax credits Others Total - Deferred tax liabilities Unrealized exchange gain Gain on overseas long-term investment Cumulative translation adjustment of long-term equity investments Adjustment of land value increment tax Unrealized gain on valuation of financial instruments Others Total		January 1, 2022	Recognized in profit or loss	Recognized in other comprehensive income		December 31, 2022
	4,927 $ - 17,441 7,513 7,801 28,551 - 20,523 74,933 49,000 210,689 $ - $ 1,288,219) ( - 800) ( 16,091) ( 44,879) ( 1,349,989) ($		4,313) ($ 9,849 - 477) ( 178 14,617 172 5,202 - 1,310 26,538 $ 2,800) ($ 188,250) ( - - 324 16,338 174,388) ($	- $ - 2,279) ( - - - - - 74,933) ( - 77,212) ($ - $ - 10,814) ( - 969 - 9,845) ($	614 $ 9,849 15,162 7,036 7,979 43,168 172 25,725 - 50,310 160,015 $ 2,800) ($ 1,476,469) ( 10,814) ( 800) ( 14,798) ( 28,541) ( 1,534,222) ($

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• D. Expiration dates of unused tax losses and amounts of unrecognized deferred tax assets are as follows:

==> picture [461 x 163] intentionally omitted <==

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

December 31, 2023
Amount filed/ Unrecognized
Year incurred assessed Unused amount deferred tax assets Expiry year
2022 Amount filed $ 63,274 $ - 2032
2023 Amount filed 31,648 22,885 2033
$ 94,922 $ 22,885
December 31, 2022
Amount filed/ Unrecognized
Year incurred assessed Unused amount deferred tax assets Expiry year
2022 Amount filed $ 63,274 $ - 2032
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• E. The amounts of deductible temporary difference that are not recognized as deferred tax assets are as follows:

Deductible temporary differences	December31,2023 225,815 $	December31,2022 160,325 $

• F. The Group has applied the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.

• G. The Group’s exposure to Pillar Two income taxes arising from the Pillar Two legislation is as follows:

The Group is within the scope of the Pillar Two model rules published by the Organisation for Economic Co-operation and Development (OECD). Since Pillar Two legislation was enacted in Vietnam, the jurisdiction in which the Group’s subsidiaries are incorporated, and will come into effect from January 1, 2024, the Group has no related current tax exposure as of December 31, 2023.

Under the Pillar Two legislation, the Group is liable to pay a top-up tax for the difference between its GloBE effective tax rate per jurisdiction and the 15% minimum rate. The Group’s subsidiaries are incorporated in Vietnam. The average effective tax rate is lower than 15%, and the Group is exposure to Pillar Two income taxes under the Group’s assessment. And, the Group is in the process of assessing its exposure to the Pillar Two legislation for when it comes into effect. For jurisdiction Vietnam, due to the complexities in applying the legislation and calculating GloBE income, the average effective tax rate based on accounting profit is 0%, the income tax expense is $418 and accounting profit is $229,982, constituting 12% of the Group’s accounting profit, for the year ended December 31, 2023. The Group is in the process of assessing its exposure to the Pillar Two legislation for when it comes into effect. This assessment indicates for jurisdiction Vietnam that the average effective tax rate based on accounting profit is 0% for the year ended December 31, 2023. However, due to the complexities in applying the legislation and calculating GloBE income as well as the impact of specific adjustments envisaged in the Pillar Two legislation which give rise to different effective tax rates compared to those calculated in accordance with IAS 12, the quantitative impact of the enacted or substantively enacted legislation is not yet reasonably estimable. The Group is currently engaged with tax specialists to assist it with applying the legislation.

• H. The Company’s income tax returns through 2020 have been assessed and approved by the Tax Authority

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• I. Merry Healthcare Co., Ltd. Taiwan Branch’s (CAYMAN) income tax returns through 2020 have been assessed and approved by the Tax Authority.

• J. Fulicare Co., Ltd., TAIWAN BRANCH income tax returns through 2020 have been assessed and approved by the Tax Authority.

• (28) Earnings per share

approved by the Tax Authority. Earnings per share
Basic earnings pershare Profit attributable to ordinary shareholders of the parent Diluted earnings pershare Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Convertible bonds Employee restricted shares Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Amount aftertax Weighted average number of ordinary shares outstanding (shareinthousands) Earnings per share (indollars) 1,320,318 $ 214,371 6.16 $ 1,320,318 $ 214,371 - 1,967 22,818 27,125 - 1,364 1,343,136 $ 244,827 5.49 $ YearendedDecember31,2023
		6.16 $ 5.49 $

(Remainder of page intentionally left blank)

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			Year	Year	endedDecember31,	2022	2022
					Weighted average
					number of ordinary
					shares outstanding			Earnings per
		Amount aftertax			(shareinthousands)		share (indollars)
	Basic earnings pershare
	Profit attributable to
	ordinary shareholders
	of the parent	$	1,455,398		213,834		$	6.81
	Diluted earnings pershare
	Profit attributable to
	ordinary shareholders
	of the parent	$	1,455,398		213,834
	Assumed conversion of
	all dilutive potential
	ordinary shares
	Employees’ compensation		-		2,188
	Convertible bonds		23,079		27,125
	Employee restricted shares		-		432
	Profit attributable to ordinary
	shareholders of the parent
	plus assumed conversion
	of all dilutive potential
	ordinary shares	$	1,478,477		243,579		$	6.07
	The number of weighted-average outstanding shares is included for assumed						conversion of all
	dilutive potential ordinary shares at the calculation			of	diluted earnings per share, based on the
	assumption that employees’ compensation		will be all	distributed in the form of shares.
(29)	Supplemental cash flow information
	A. Investing activities with partial cash flow effects
					Years endedDecember31
					2023			2022
	Purchase of property, plant and equipment			$	508,436	$		591,673
	Add:
	Beginning balance of payable on equipment				105,829			199,508
	Ending balance of prepayments for
	equipment				2,571			14,975
	Less:
	Beginning balance of prepayments for
	equipment			(	14,975)	(		104,024)
	Ending balance of payable on equipment			(	71,416)	(		105,829)
	Cash paid during the year			$	530,445	$		596,303

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(30) Changes in liabilities from financing activities

At January 1, 2023 Changes in cash flow from financing activities Additions Impact of changes in foreign exchange rate Amortisation of discounts on corporate bonds Changes in other non-cash items At December 31, 2023 At January 1, 2022 Changes in cash flow from financing activities Additions Impact of changes in foreign exchange rate Amortisation of discounts on corporate bonds Changes in other non-cash items At December 31, 2022	Short-term borrowings	Lease liability	Convertible bond 2,953,838 $ - - - 28,523 100) ( 2,982,261 $ Convertible bond	Long-term borrowings (including those matured within one year)	Dividends payable	Other non- current liabilities	Liabilities from financing activities-gross
	2,146,851 $ 986,313) ( - 27,439) ( - - 1,133,099 $ Short-term borrowings	208,436 $ 134,976) ( 93,901 4,004 - 1,655 173,020 $ Lease liability		1,356,447 $ 98,943 - 6,034) ( - - 1,449,356 $ Long-term borrowings (including those matured within one year)	- $ 981,235) ( 981,235 - - - - $ Dividends payable	26,413 $ 13,583) ( - 154) ( - 713) ( 11,963 $ Other non- current liabilities	6,691,985 $ 2,017,164) ( 1,075,136 29,623) ( 28,523 842 5,749,699 $ Liabilities from financing activities-gross
	3,738,289 $ 1,569,848) ( - 56,423 - 78,013) ( 2,146,851 $	112,601 $ 106,426) ( 196,666 1,257 - 4,338 208,436 $	2,925,589 $ - - - 28,249 - 2,953,838 $	1,558,655 $ 298,903) ( - 18,682 - 78,013 1,356,447 $	- $ 866,040) ( 866,040 - - - - $	29,309 $ 3,569) ( - 1,478 - 805) ( 26,413 $	8,364,443 $ 2,844,786) ( 1,062,706 77,840 28,249 3,533 6,691,985 $

(31) Government grants

)Government grants At December 31, 2022 2,146,851 $ 208,436 $ 2,9 $	53,838 1,356,447 $ - $ 26,413 $ 6, $	53,838 1,356,447 $ - $ 26,413 $ 6, $
MECL MEHO ASCX Others	Years ended December 31
	2023 73,080 $ 8,135 9,431 5,784 96,430 $	2022
		135,853 $ 6,683 12,651 15,986
		171,173 $

This refers to the subsidies granted by local governments, such as the Industry and Information Technology Bureau of Shenzhen Municipality, the Longhua District Industry and Information Technology Bureau, the Culture, Radio, Television, Tourism and Sports Bureau of Shenzhen Municipality and Commerce Bureau of Shenzhen Municipality. Other subsidies are lower than 5% of total government grants, therefore, they are not disclosed individually.

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7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Name Relationship MERRY ELECTRONICS(SUZHOU)CO.,LTD Affiliated company (MECE) MERRY ELECTRONICS (HUIZHOU)CO.,LTD. Affiliated company (MECH) DONPON PRECISION INC. Affiliated company Donyun plastic Manufactory Co., Ltd. Affiliated company Merry Fuling Co., Ltd. Other related party Taiwab Branch (MHNCTW) Luxshare Co., Ltd. Other related party (Note) Luxshare Precision Limited Other related party (Note) Luxshare Precision Industry Co., Ltd Other related party (Note) Luxshare Electronic Technology (Kunshan) Co., Ltd. Other related party (Note) Dongguan Luxshare Precision Industry Co., Ltd. Other related party (Note) Luxshare Precision Industry (Chuzhou), Ltd. Other related party (Note) LUXSHARE PRECISION SINGAPORE PTE. LT Other related party (Note)

Note : A corporate director of the Group’s subsidiary, MEVN, and the entity both belong to Luxshare group.

(2) Significant related party transactions

A. Operating revenue

group. gnificant related party transactions Operating revenue
Sales of goods: Luxshare Precision Limited Luxshare Precision Singapore PTE.LT Affiliated company Other related party Total	Years ended December 31,
	2023 279,638 $ 36,401 9,622 3,055 328,716 $	2022
		281,050 $ - 26,138 6,955
		314,143 $

The prices of goods sold to related parties are based on the different product’s profitability and adjusted annually as there is no comparable transaction for the goods sold to the third parties, and the prices of purchases on behalf of related parties are based on the cost plus mark-ups of 2 to 3%. The credit terms to related parties are 60 to 120 days end of month and 30 to 120 days end of month to the third parties.

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B. Purchases

Purchases
		Years ended	December31,
		2023		2022
Purchases of goods
MECE	$	9,439,736	$	8,369,958
MECH		4,479,454		5,320,670
Affiliated company		121,965		-
Other related party		100,759		63,132
Total	$	14,141,914	$	13,753,760

Associates and other related parties are the Group’s manufacturers of producing products, and the price is made individually based on the profitability of different products. The price will be adjusted once a year. Because the Group do not purchase similar products from non-related parties, no similar transaction can be comparable. The credit terms to associates and other related parties is 60 days to 65 days after monthly billings; and the credit terms to non-related parties is 30 days to 120 days after monthly billings.

C. Receivables from related parties

to 120 days after monthly billings. Receivables from related parties	to 120 days after monthly billings. Receivables from related parties
December31,2023		December31,2022
Accounts receivable
Other related party $	154,646	$	61,692
Affiliated company	1,167		79
Total $	155,813	$	61,771
Other receivables
MECH $	173,392	$	118,270
Affiliated company	194		-
Total $	173,586	$	118,270
Other receivables pertained to purchase materials on behalf of MECH and		MECE, respectively.
Payables to related parties
December31,2023		December31,2022
Accounts payable
MECE $	2,000,045	$	3,182,757
MECH	551,324		1,003,565
Affiliated company	420,685		-
Other related party	51,063		12,580
Total $	3,023,117	$	4,198,902
Other payables
Affiliated company $	65,660	$	82,414
Other related party	235		-
Total $	65,895	$	82,414

Other receivables pertained to purchase materials on behalf of MECH and MECE, respectively. D. Payables to related parties

Other payables pertained to the payment that the parent company expect to be paid to MECE for mold developing expense collected on behalf of others.

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E. Property transactions

(a) Acquisition of property, plant and equipment:

		Years ended	December31,	December31,
		2023		2022
MECH	$	7,847	$	60,458
Affiliated company		-		16,993
Other related party		441		-
Total	$	8,288	$	77,451

• (b) Disposal of property, plant and equipment:

Year ended December 31,2023: None.

b) Disposal of property, plant and equipment: Year ended December 31,2023: None. Affiliated company Other related party Total	- 16,993 441 - 8,288 $ 77,451 $	- 16,993 441 - 8,288 77,451 $	- 16,993 441 - 8,288 77,451 $
Other income MECH Luxshare CO., Ltd	Disposal proceeds Gain (loss) on disposal 1,681 $ 235) ($ 2022 Year ended December 31, Years ended December31,	Year ended December 31,
	2023 157,006 $		2022
			226,939 $

F. Other income

Other revenue is the billing to Luxshare CO., Ltd. For the compensation, it was fully collected. (3) Key management compensation

Key management compensation
Salaries and other short-term employee benefits Post-employment benefits Share-based payments	Years ended December 31,
	2023 98,379 $ 199 31,997 130,575 $	2022
		88,471 $ 343 30,234
		119,048 $

8. PLEDGED ASSETS

PLEDGED ASSETS	130,575 $	119,048 $
Pledged asset Property, plant and equipment	December31,2023 December31,2022 141,272 $ - $ Bookvalue	Purpose
	December31,2023 141,272 $
		Long-term borrowings

1. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNISED CONTRACT

COMMITMENTS

Capital expenditures contracted for at the balance sheet date but not yet incurred is as follows:

Property, plant and equipment Intangible assets	December31,2023 20,752 $ 3,056 23,808 $	December31,2022
		39,774 $ -
		39,774 $

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10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Refer to Note 6(22)F. for details of the appropriation of 2023 retained earnings.

12. OTHERS

(1) Capital management

The Company’s capital management is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditure, research and development expense, obligation repayment and dividend distribution within the next year.

The Company monitors capital by reassessing debt ratios periodically. The debt ratios as at December 31, 2023 and 2022 were as follows:

The Company’s capital management is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditure, research and development expense, obligation repayment and dividend distribution within the next year. The Company monitors capital by reassessing debt ratios periodically. The debt ratios as at December 31, 2023 and 2022 were as follows:	The Company’s capital management is to ensure it has sufficient financial resource and operating plans to meet operational capital for future needs, capital expenditure, research and development expense, obligation repayment and dividend distribution within the next year. The Company monitors capital by reassessing debt ratios periodically. The debt ratios as at December 31, 2023 and 2022 were as follows:
Financial instruments A. Financial instruments by category December 31, 2023 December 31, 2022 Total debt 19,128,870 $ 20,372,345 $ Total assets 32,611,193 33,428,631 Debt ratio 59% 61% December31,2023 December31,2022 Financial assets Financial assets at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss 602,408 $ 416,465 $ Financial assets at fair value through other comprehensive income Designation of equity instrument 474,729 $ 627,094 $ Qualifying equity instrument - 150,863 474,729 $ 777,957 $ Financial assets at amortized cost/Loans and receivables Cash and cash equivalents 5,526,722 $ 6,923,268 $ Financial assets at amortized cost 935,966 295,801 Accounts receivable (including due from related parties) 9,380,288 8,771,469 Other receivables (including due from related parties) 342,776 205,597 Guarantee deposits paid 54,496 59,608 16,240,248 $ 16,255,743 $
A.
	416,465 $
	627,094 $ 150,863
	777,957 $
	6,923,268 $ 295,801 8,771,469 205,597 59,608
	16,255,743 $

(2) Financial instruments

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==> picture [467 x 254] intentionally omitted <==

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

December 31, 2023 December 31, 2022
Financial liabilities
Financial liabilities at fair value
through profit or loss
Financial liabilities held for trading $ 1,726 $ 10,137
Short-term borrowings 1,133,099 2,146,851
Accounts payable (including
payable to related parties) 8,539,418 9,214,787
Other accounts payable (including
payable to related parties) 1,451,829 1,276,857
Lease liabilities 173,020 208,436
Corporate bonds payable 2,982,261 2,953,838
Long-term borrowings (including those
maturing within one year) 1,449,356 1,356,447
Gurantee deposits received 7,643 4,725
$ 15,738,352 $ 17,172,078
----- End of picture text -----

B. Financial risk management policies

• (a) The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk.

• (b) Group treasury identifies, evaluates and hedges financial risks in close co-operation with the Group’s operating units. Such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

• (c) Information about derivative financial instruments that are used to hedge certain exchange rate risk are provided in Note 6(2).

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to foreign exchange risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD, RMB and HKD. Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities.

• ii. Management has set up a policy to require group companies to manage their foreign exchange risk against their functional currency. The companies are required to hedge their entire foreign exchange risk exposure with the Group treasury. Exchange rate risk is measured through a forecast of highly probable USD expenditures. Forward foreign exchange contracts are adopted to minimize the volatility of the exchange rate affecting cost of forecast inventory purchases.

• iii. The Group hedges foreign exchange rate by using forward exchange contracts. However, the Group does not adopt hedging accounting. Details of financial assets or liabilities at

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fair value through profit or loss are provided in Note 6(2).

• iv. The Group’s businesses involve some non-functional currency operations (the Company’s and certain subsidiaries’ functional currency: NTD; other certain subsidiaries’ functional currency: USD, RMB, HKD, THB, CAD and MYR). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

• (Remainder of page intentionally left blank)

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Foreign currency: functional currency) inancial assets Monetary items Cash in banks USD : NTD RMB : NTD USD : HKD USD : RMB USD : THB Receivables USD : HKD USD : NTD USD：RMB USD：THB Non-monetary items USD：NTD Investments Accounted for Using Equity Method USD：NTD HKD：NTD RMB：NTD inancial liabilities Non-monetary items Bank loan USD：NTD USD：RMB USD：CAD RMB：NTD Payables RMB：NTD USD：NTD USD：RMB Current financial investments at fair value through other comprehensive income		December31,2023			December31,2022
		Bookvalue			Bookvalue
	Foreign currency amount(In thousands) 43,711 $ 93,720 939 8,831 13,868 2,247 $ 310,381 106,964 29,547 - $ 106,814 $ 327,174 101,360 - $ - - 61,620 255,054 $ 245,114 43,357	Exchange rate 30.71 4.33 7.81 7.10 34.05 7.81 30.71 7.10 34.05 - 30.71 3.93 4.33 - - - 4.33 4.33 30.71 7.10	(NTD)	Foreign currency amount(In thousands) 107,122 $ 54,641 8,229 6,924 32,957 1,228 $ 241,758 111,650 21,302 5,000 $ 105,892 $ 332,646 92,399 16,000 $ 10,000 2,600 42,950 235,688 $ 272,072 49,601	Exchange rate 30.71 4.41 7.80 6.97 34.35 7.80 30.71 6.97 34.35 30.71 30.71 3.94 4.41 30.71 6.97 0.74 4.41 4.41 30.71 6.97	(NTD)
			1,342,146 $ 405,526 28,832 271,156 425,817 68,994 $ 9,530,242 3,284,330 907,241 - $ 3,279,717 $ 1,285,465 438,585 - $ - - 266,630 1,103,619 $ 7,526,225 1,331,277			3,289,717 $ 240,858 252,713 212,636 1,012,109 37,712 $ 7,424,389 3,428,772 654,184 153,550 $ 3,251,933 $ 1,309,957 407,293 491,360 $ 307,100 79,846 189,324 1,038,913 $ 8,355,331 1,523,247

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Foreign currency: functional currency) inancial assets Monetary items Cash in banks USD : NTD RMB : NTD USD : HKD USD : RMB USD : THB Receivables USD : HKD USD：NTD USD：RMB USD：THB Non-monetary items USD：NTD Investments Accounted for Using Equity Method USD：NTD HKD：NTD RMB：NTD inancial liabilities Non-monetary items Bank loan USD：NTD USD：RMB USD：CAD RMB：NTD Payables RMB：NTD USD：NTD USD：RMB Current financial investments at fair value through other comprehensive income		December31,2023			December31,2022
		Sensitivityanalysis			Sensitivityanalysis
	Degree ofvariation	Effects on profit or loss	Effect on other comprehensive income	Degree ofvariation	Effects on profit or loss	Effect on other comprehensive income
	3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%	40,264 $ 12,166 865 8,135 12,775 2,070 $ 285,907 98,530 27,217 - $ - $ - - - $ - - 7,999 33,109 $ 225,787 39,938	- $ - - - - - $ - - - - $ 98,392 $ 38,564 13,158 - $ - - - - $ - -	3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3% 3%	98,691 $ 7,226 7,581 6,379 30,363 - $ 222,732 102,863 19,626 - $ - $ - - 14,741 $ 9,213 2,395 5,680 31,167 $ 250,660 45,697	- $ - - - - - $ - - - 4,607 $ 97,558 $ 39,299 12,219 - $ - - - - $ - -

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Total exchange gain (loss), including realized and unrealized arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2023 and 2022, amounted to a loss of $25,335 thousand and a gain of $507,858 thousand, respectively.

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through profit or loss, financial assets at fair value through other comprehensive income and available-for-sale financial assets. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group.

• ii. The Group’s investments in equity securities comprise shares and open-end funds issued by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 3% with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $1,375 thousand and $819 thousand, respectively, as a result of gains/losses on equity securities classified as at fair value through profit or loss. Other components of equity would have increased/decreased by $14,242 thousand and $18,813 thousand, respectively, as a result of other comprehensive income classified as available-for-sale equity investment and equity investment at fair value through other comprehensive income.

Cash flow and fair value Interest rate risk

• i. The Group’s borrowings and investment in debt instruments are measured at amortized cost, fair value through profit or loss and fair value through other comprehensive income. The borrowings are periodically contractually repriced and to that extent are also exposed to the risk of future changes in market interest rates.

• ii. If the borrowing interest rate had increased/decreased by 0.25% with all other variables held constant, profit (loss), net of tax for the years ended December 31, 2023 and 2022 would have increased/decreased by $5,165 thousand and $7,007 thousand, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

• iii. If the debt instruments interest rate had increased/decreased by 0.25% with all other variables held constant, profit (loss), net of tax for the years ended December 31, 2023 and 2022 would have increased/decreased by $787 thousand and $1,066 thousand, respectively. The main factor is that changes in interest expense result in floating-rate debt instruments.

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(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the accounts receivable based on the agreed terms, and the contract cash flows of debt instruments stated at amortized cost, at fair value through profit or loss and at fair value through other comprehensive income.

• ii. In accordance with the internal and explicit credit policy, each operating entities within the Group shall conduct management and credit risk analysis for each new customer before setting the terms and conditions for payment and delivery. The internal risk control system assesses the credit quality of the customer by taking into account its financial position, past experience and other factors. The limits of individual risks are set by the Board of Directors according to internal or external ratings, and the use of credit limits is regularly monitored. The main credit risk comes from cash and cash equivalents and deposits with banks and financial institutions. It also comes from customers' credit risks and includes outstanding receivables. For banks and financial institutions, only good credit rating agencies will be accepted as trading counterparts.

• iii. For banks and financial institutions, the Group transacts with a variety of banks and financial institutions, mainly domestic and overseas well-known financial institutions, to avoid concentration in any single counterparty and to minimize credit risk. The Group can only enter into the financial services and loan agreement provided by banks and financial institutions after being approved by the Board of Directors or authorized management according to the Company’s delegation of authorization policy. To prevent legal risks, all the Group signs with banks and financial institutions after all documents are examined by counsel or legal advisor profession. The Group periodically checks the credit rating, conditions and quality of service as well as transactions. According to the Group’s operating condition, the credit limits and utilization of credit limits are monitored on a regular basis and maintained within a reasonable range to ensure it meets the needs of the operation.

• iv. The Group adopts the assumptions under IFRS 9, the default occurs when the contract payments are past due over 90 days.

• v. The Group adopts following assumptions under IFRS 9 to assess whether there has been a significant increase in credit risk on that instrument since initial recognition:

• (i) If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• (ii) For investments in bonds that are traded over the counter, if any external credit rating agency rates these bonds as investment grade, the credit risk of these financial assets is low.

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• vi. The following indicators are used to determine whether the credit impairment of debt instruments has occurred:

• (i) It becomes probable that the issuer will enter bankruptcy or other financial reorganization due to their financial difficulties;

• (ii) The disappearance of an active market for that financial asset because of financial difficulties;

• (iii) Default or delinquency in interest or principal repayments;

• (iv) Adverse changes in national or regional economic conditions that are expected to cause a default.

• vii. The Group classifies customers’ accounts receivable, contract assets in accordance with credit rating of customer. The Group applies the modified approach using provision matrix to estimate expected credit loss under the provision matrix basis.

• viii. The Group wrote-off the financial assets, which cannot be reasonably expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights.

• ix. The Group used the forecastability of adjust historical and timely information to assess the default possibility of accounts receivable. As of December 31, 2023 and 2022, the provision matrix is as follows:

December 31, 2023 Not past due Up to 30 days 31~90 days 91~180 days Over 180 days December 31, 2022 Not past due Up to 30 days 31~90 days 91~180 days Over 180 days	Expectedlossrate 0.03% 3.32% 30.57% 100.00% 100.00% Expectedlossrate 0.03% 0.29% 22.35% 100.00% 100.00%	Totalbookvalue 9,169,410 $ 58,076 2,535 52 11,241 9,241,314 $ Totalbookvalue 8,524,130 $ 177,174 15,153 4,853 9,835 8,731,145 $	Loss allowance
			2,843 $ 1,928 775 52 11,241
			16,839 $
			Loss allowance
			2,851 $ 522 3,386 4,853 9,835
			21,447 $

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• x. Movements in relation to the Group applying the modified approach to provide loss allowance for accounts receivable are as follows:

			2023			2022
	Accounts receivable			Accounts receivable
At January 1		$	21,447		$	35,425
Reversal of impairment loss	(		3,740)	(		12,854)
Effect of foreign exchange	(		868)	(		1,124)
At December 31		$	16,839		$	21,447

• xi. For the years ended December 31, 2023 and 2022, there was no loss allowance for investments in debt instruments at fair value through other comprehensive income.

• xii. For investments in debt instruments at amortized cost and at fair value through other comprehensive income, the credit rating levels are presented below:

Financial assets measured at amortized cost Group 1 Financial assets at fair value through other comprehensive income Group 2	December31,2023 Lifetime 12 months 935,966 $ - $	December31,2022
		Lifetime
		12 months
		295,801 $
		150,863 $

Group 1: Time deposits designated as investment grade.

Group 2: Debt instruments designated as investment grade

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• ii Group treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

• iii. The table below analyses the Group’s non-derivative financial liabilities and net-settled or gross-settled derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for nonderivative financial liabilities and to the expected maturity date for derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

• iv. The Group has $15,214,533 thousand and $15,421,095 thousand in undrawn borrowing facilities as of December 31, 2023 and 2022, respectively.

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December31,2023 Non-derivative financial liabilities Short-term borrowings Accounts payable Accounts payable -related parties Other payables (including related parties) Lease liabilities Bonds payable Long-term borrowings Derivative financial liabilities Forward exchange contracts December31,2022	Less than 3 months	Between 3 months and 1 year 335,431 $ 1,095,596 508,904 106,420 59,943 2,999,900 371,473 - Between 3 months and 1 year	Between 1 and 2years	Between 2 and5 years - $ - - - 40,457 - 546,398 - Between 2 and5 years	Over 5 years	Total 1,142,430 $ 5,516,301 3,023,117 1,451,829 186,328 2,999,900 1,530,780 1,726 Total
	806,999 $ 4,420,705 2,514,213 1,345,409 22,026 - 109,542 1,726 Less than 3 months		- $ - - - 50,440 - 405,080 - Between 1 and 2years - $ - - - 15,699 3,000,000 458,559 -		- $ - - - 13,462 - 98,287 - Over 5 years
Non-derivative financial liabilities Short-term borrowings Accounts payable Accounts payable -related parties Other payables (including related parties) Lease liabilities Bonds payable Long-term borrowings Derivative financial liabilities Forward exchange contracts	1,907,179 $ 4,087,608 3,412,184 1,239,866 22,586 - 68,553 10,137	260,524 $ 928,277 786,718 36,991 141,550 - 405,820 -		- $ - - - 21,991 - 469,645 -	- $ - - - 22,612 - - -	2,167,703 $ 5,015,885 4,198,902 1,276,857 224,438 3,000,000 1,402,577 10,137

(3) Fair value information

• A. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and

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volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks, and derivative instruments with quoted market prices is included in Level 1.

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in certain derivative instruments and equity instruments is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in certain derivative instruments, equity investment without active market and is included in Level 3.

• B. Financial instruments not measured at fair value

• Except for those listed in the table below, financial instruments not measured at fair value include the carrying amounts of cash and cash equivalents, notes receivable, accounts receivable, other receivables, long-term and short-term bank borrowings, notes payable, accounts payable and other payables are approximate to their fair values.

Financial liabilities: Bonds payable Financial liabilities: Bonds payable	Bookvalue 2,982,261 $ Bookvalue 2,953,838 $	December	31,2023 Fair value
		Level 1 - $ Level 1 - $ December	Level 2 2,972,536 $ Level 2 2,879,204 $ 31,2022 Fairvalue	Level3
				- $
				Level3
				- $

• C. The related information of financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities as at December 31, 2023 and 2022 is as follows:

2023 and 2022 is as follows:
December31,2023 Assets Recurring fair value measurements Financial assets at fair value through profit or loss -Equity securities -Bonds investments -Forward exchange contracts -Fund -Stock Financial assets at fair value through other comprehensive income -Equity securities Total	Level 1 - $ - - 245,574 17,840 105,206 368,620 $	Level 2 - $ - 13,166 - - - 13,166 $	Level3 45,828 $ 280,000 - - - 369,523 695,351 $	Total
				45,828 $ 280,000 13,166 245,574 17,840 474,729
				1,077,137 $

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December31,2023 Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss -Forward exchange contracts December31,2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss -Equity securities -Bonds investments -Forward exchange contracts -Fund Financial assets at fair value through other comprehensive income -Equity securities -Debt securities Total Liabilities Recurring fair value measurements Financial liabilities at fair value through profit or loss -Forward exchange contracts	Level 1 - $ Level 1 - $ - - 102,105 230,211 - 332,316 $ - $	Level 2 1,726 $ Level 2 - $ - 7,076 - - 150,863 157,939 $ 10,137 $	Level3 - $ Level3 27,284 $ 280,000 - - 396,883 - 704,167 $ - $	Total 1,726 $
				Total
				27,284 $ 280,000 7,076 102,105 627,094 150,863
				1,194,422 $
				10,137 $

• D. The methods and assumptions the Group used to measure fair value are as follows:

• i. The instruments the Group used market quoted prices as their fair values (that is, Level 1) are listed below by characteristics:

Market quoted price

Listed shares Open-end fund Closing price at Net asset value at evaluation date evaluation date

• ii. Except for financial instruments with active markets, the fair value of other financial instruments is measured by using valuation techniques or by reference to counterparty quotes. The fair value of financial instruments measured by using valuation techniques can be referred to current fair value of instruments with similar terms and characteristics in substance, discounted cash flow method or other valuation methods.

• iii. Forward exchange contracts are usually valued based on the current forward exchange rate.

• vi. The output of valuation model is an estimated value and the valuation technique may not be able to capture all relevant factors of the Group’s financial and non-financial instruments. Therefore, the estimated value derived using valuation model is adjusted accordingly with

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additional inputs. In accordance with the Group’s management policies and relevant control procedures relating to the valuation models used for fair value measurement, management believes adjustment to valuation is necessary in order to reasonably represent the fair value of financial and non-financial instruments at the consolidated balance sheet. The inputs and pricing information used during valuation are carefully assessed and adjusted based on current market conditions.

• E. For the years ended December 31, 2023 and 2022, there was no transfer between Level 1 and Level 2

• F. The following chart is the movement of Level 3 for the years ended December 31, 2023 and 2022:

			Years ended	December31,	December31,	December31,
			2023			2022
At January 1		$	704,167		$	1,026,433
Added in the year			20,000			1,487
Losses recognised in profit or loss	(		1,456)	(		198)
Losses recognised in
other comprehensive income	(		27,360)	(		323,555)
At December 31		$	695,351		$	704,167

• G. The following is the qualitative information of significant unobservable inputs and sensitivity analysis of changes in significant unobservable inputs to valuation model used in Level 3 fair value measurement:

Nonderivative equity instrument: Equity securities Private equity funds in venture capital Private placement shares (listed companies) Nonderivative debt instrument: Convertible bonds	Fair value at December 31, 2023 136,887 $ 45,828 232,636 280,000 $	Valuationtechnique Market comparable companies Net asset value Market price method Discounted cash flow method	Significant unobservable input Range (weighted average) Price to book ration multiple 1 N/A N/A Discount for lack of marketability 15.57%~41.45% Discount rate -	Relationship of inputs tofairvalue
				The higher the multiplier, the higher the fair value N/A The higher the discount for marketability, the lower the fair value The higher the discount rate, the lower the fair value

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Nonderivative equity instrument: Equity securities Private equity funds in venture capital Private placement shares (listed companies) Nonderivative debt instrument: Convertible bonds	Fair value at December 31, 2022 Valuationtechnique 127,692 $ Market comparable companies 27,284 Net asset value 269,191 Market price method 280,000 $ Discounted cash flow method	Significant unobservable input Range (weighted average) Relationship of inputs tofairvalue Price to book ration multiple 1 The higher the multiplier, the higher the fair value N/A N/A N/A Discount for lack of marketability 20.5%~26.6% The higher the discount for marketability, the lower the fair value Discount rate - The higher the discount rate, the lower the fair value

• H. The Group has carefully assessed the valuation models and assumptions used to measure fair value. However, use of different valuation models or assumptions may result in different measurement. The following is the effect of profit or loss or of other comprehensive income from financial assets and liabilities categorized within Level 3 if the inputs used to valuation models have changed:

have changed:
Financial assets Equity securities Financial assets Equity securities	Input	Change
				Recognised in profit or loss
			Favourable change		Unfavourable change			Favourable change	Unfavourable change
	Price to book ratio multiple Input	±10% Change		- $
				Recognised in profit or loss
			Favourable change		Unfavourable change			Favourable change	Unfavourable change
	Price to book ratio multiple	±10%		- $		- $		12,769 $	12,769) ($

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

A. Loans to others: Please refer to table 1.

• B. Provision of endorsements and guarantees to others: Please refer to table 2.

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• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Please refer to table 3.

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching $300 million or 20% of paid-in capital or more: None.

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 4.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 5.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 6(2).

• J. Significant inter-company transactions during the reporting periods: Purchases or sales of goods from or to related parties reaching $100 million or more: Please refer to table 6.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) ： Please refer to table 7.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 8.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 9.

(4) Major shareholders information

Major shareholders information: None.

14. SEGMENT INFORMATION

(1) General information

Management has determined the reportable operating segments based on the reports reviewed by the chief operating decision-maker that are used to make strategic decisions. Business organization is divided into Taiwan, Shenzhen, Singapore, Vietnam and other segments based on the operating regions. The Company’s revenue is mainly from manufacturing and sales of microphones, receivers, speakers and other electronic components.

(2) Measurement of segment information

The Group evaluates the performance of the operating segments based on post-tax profit or loss.

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(3) Information about segment profit or loss, assets and liabilities

• A. The segment information provided to the chief operating decision-maker for the reportable segments for the year ended December 31, 2023 is as follows:

			Taiwan			Shenzhen			Singapore			Vietnam			Others			Total
Revenue
Revenue from external customers		$	26,663,686		$	323,867		$	8,364,498		$	316,039		$	1,022,293		$	36,690,383
Inter-segment revenue			38,069			9,740,409			-			2,498,732			5,161,172			17,438,382
Revenue total		$	26,701,755		$	10,064,276		$	8,364,498		$	2,814,771		$	6,183,465		$	54,128,765
Segment profit (loss) before tax		$	523,392		$	205,676		$	853,467		$	229,982		$	53,831		$	1,866,348
Segment profit (loss) contains：
Interest revenue		$	74,498		$	33,513		$	21,931		$	2,201		$	4,662		$	136,805
Interest expense	(		60,738)	(		13,399)	(		582)	(		13,347)	(		12,431)	(		100,497)
Depreciation & amortization	(		98,501)	(		458,920)	(		6,876)	(		161,635)	(		97,680)	(		823,612)
Income tax (expense) benefit	(		306,894)	(		30,987)	(		132,093)	(		418)			2,794	(		467,598)
Recognized investment profit
which is adopting equity method			1,389,335	(		714)	(		7,630)			-	(		1,096,190)			284,801

Note: The Group does not use segment information relating to assets and liabilities to evaluate segment performance. As a result, such information is not disclosed.

• B. The segment information provided to the chief operating decision-maker for the reportable segments for the year ended December 31, 2022 is as follows:

			Taiwan			Shenzhen			Singapore			Vietnam			Others			Total
Revenue
Revenue from external customers		$	25,888,687		$	370,601		$	7,707,271		$	281,128		$	1,151,003		$	35,398,690
Inter-segment revenue			15,146			10,971,711			-			3,668,273			3,820,620			18,475,750
Revenue total		$	25,903,833		$	11,342,312		$	7,707,271		$	3,949,401		$	4,971,623		$	53,874,440
Segment profit (loss) before tax		$	1,092,087		$	114,661		$	718,313		$	358,303	($		38,474)		$	2,244,890
Segment profit (loss) contains：
Interest revenue		$	38,955		$	23,859		$	1,199		$	191		$	2,062		$	66,266
Interest expense	(		51,772)	(		36,241)	(		397)	(		7,079)	(		10,146)	(		105,635)
Depreciation & amortization	(		77,630)	(		410,206)	(		7,736)	(		142,124)	(		126,081)	(		763,777)
Income tax (expense) benefit	(		358,074)			10,890	(		110,254)	(		35)			29,503	(		427,970)
Recognized investment profit
which is adopting equity method			930,299			-	(		259)			-	(		721,126)			208,914

Note: The Group does not use segment information relating to assets and liabilities to evaluate segment performance. As a result, such information is not disclosed.

• C. The Group’s reportable operating segments are classified based on the operating regions.

• D. The accounting policies of the operating segments are in agreement with the significant accounting policies summarized in Note 4. The Group’s segment profit (loss) is measured with the current profit (loss) before tax, which is used as a basis for the Group in assessing the performance of the operating segments.

(4) Reconciliation for segment income (loss)

• Sales between segments are carried out at arm’s length. The revenue from external customers reported to the chief operating decision-maker is measured in a manner consistent with that in the statement of comprehensive income.

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• A. A reconciliation of revenue after adjustment and total segment revenue from continuing operations is provided as follows:

operations is provided as follows:
			Years ended	December 31,
			2023			2022
Adjusted revenue from reportable segments		$	54,128,765		$	53,874,440
Elimination of inter-segment revenue	(		17,438,382)	(		18,475,750)
Total consolidated operating revenue		$	36,690,383		$	35,398,690

• B. A reconciliation of adjusted current income before tax and the income before tax from continuing operations is provided as follows:

Adjusted income from reportable segments after income tax Elimination of inter-segment income Income from continuing operations after income tax	2023 2022 1,866,348 $ 2,244,890 $ 19,147 195,864) ( 1,885,495 $ 2,049,026 $ Years endedDecember31,

(5) Information on products and services

Revenues from external customers are mainly manufacturing, processing, repairing and sales of radio apparatus, communication devices, consumer electronics, automatic control system, electronic security systems and fire protection system as well as electronic components; planning, design as well as output of service items’ equipment; production as well as marketing management consultant of service items’ relevant business. Details of revenue are as follows:

Finished goods sales revenue Technical service revenue	Years ended December 31,	Years ended December 31,
	2023 36,680,126 $ 10,257 36,690,383 $	2022
		35,380,239 $ 18,451
		35,398,690 $

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(6) Geographical information

Geographical information for the years ended December 31, 2023 and 2022 is as follows:

Geographical information Geographical information for	the years ended December 31, 2023 and 2022 is as follows:	the years ended December 31, 2023 and 2022 is as follows:
US Netherlands Switzerland Denmark China Taiwan Others	Revenue Non-current assets Revenue Non-current assets 17,314,529 $ 707 $ 14,886,782 $ 601 $ 8,706,365 - 9,308,873 - 3,704,526 - 3,984,938 - 2,816,056 - 3,481,839 - 798,039 1,503,483 840,592 1,603,173 575,871 1,563,840 1,428,625 1,567,975 2,774,997 2,197,032 1,467,041 2,421,497 36,690,383 $ 5,265,062 $ 35,398,690 $ 5,593,246 $ YearendedDecember31,2023 YearendedDecember31,2022
		601 $ - - - 1,603,173 1,567,975 2,421,497 5,593,246 $

(7) Major customer information

Major customer information of the Group for the years ended December 31, 2023 and 2022 is as follows:

A B C	Revenue % Segment 13,300,819 $ 36 Taiwan A 10,343,958 28 Taiwan B 3,707,467 10 Taiwan C 27,352,244 $ Year ended December 31, 2023	Revenue % Segment 13,300,819 $ 36 Taiwan A 10,343,958 28 Taiwan B 3,707,467 10 Taiwan C 27,352,244 $ Year ended December 31, 2023	Year ended December	Year ended December	31, 2022
	Revenue 13,300,819 $ 10,343,958 3,707,467 27,352,244 $	% 36 28 10	Revenue 11,807,867 $ 8,278,897 3,987,686 24,074,450 $	% 33 23 11	Segment
					Taiwan Taiwan Taiwan

(Remainder of page intentionally left blank)

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Table 1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Loans to others

Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Interest rate Nature of loan (Note 3) Amount of transactions with the borrower Reason for short-term financing Allowance for doubtful accounts Maximum outstanding balance for the year ended December 31,2023 Balance at December 31, 2023 Actual amount drawn down No. Creditor Borrower General ledger account Is a related party	Collateral	Limit on loans granted to a single party (Note 2)	Ceiling on total loans granted (Note 1)	Note
	Item Value
0 MEHO FUXM Other receivables Y 60,000 $ 60,000 $ 56,251 $ 1.83 2 - $ Purchasing plant - $ 1 MESG MENA Other receivables Y 122,820 122,820 39,917 1.13 2 - Business operation - 1 MESG MENA Other receivables Y 61,410 61,410 61,410 4.31 2 - Business operation - 1 MESG SENM Other receivables Y 46,058 46,058 15,353 3.52 2 - Business operation - 2 MECL ASCX Other receivables Y 34,616 34,616 28,126 3.45 2 - Business operation -	- - $ - - - - - - - -	5,048,499 $ 1,871,860 1,871,860 1,871,860 1,344,718	12,621,247 $ 1,871,860 1,871,860 1,871,860 3,361,795

Note 1: (1) The ceiling on MESG total loans to others is MESG’s net assets; for short-term financing, the limit to a single party is 40% of MESG’s net assets.

• (2) The ceiling on MECL total loans to others is MESG’s net assets; for short-term financing, the limit to a single party is 40% of MECL’s net assets.

• (3) For short-term financing between the Company’s wholly-owned subsidiaries, limit on loans is not restricted. Limit on total loans granted to a single party is the net value of MESG.

• (4) For the companies having business relationship with MESG and MECL, financial limit on loans granted to a single party shall not exceed the amount of business transactions occurred between the creditor and borrower.

(5) Limit on loans to FuliCare (Xiamen) Co., Ltd. (“FUXM”) is 40% of the Company’s net value for the needs of short-term financing.

Note 2: (1) Having business relationship with the Company, MESG and MECL.

• (2) The needs for short-term financing.

Table 1, Page1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Provision of endorsements and guarantees to others

Year ended December 31, 2023

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount for the year ended December 31, 2023	Outstanding endorsement/ guarantee amount at December 31, 2023	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 4)	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
	Companyname Relationship with the endorser/ guarantor (Note 2)
0 MEHO	MENA 2	10,096,998 $	187,301 $	79,833 $	- $	- $	0.63%	12,621,247 $	Y	N	N

Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

(1)The Company is ‘0’.

• (2)The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following four categories; fill in the number of category each case belongs to: (1)Having business relationship.

• (2)The Company holds over 50% of the voting rights directly or indirectly.

• (3)This company holds over 50% of the voting rights of the Company directly or indirectly.

• (4)The Company holds over 90% of the voting rights directly or indirectly.

Note 3: The guarantees and endorsements for a single party should not exceed 80% of the Company’s net assets.

Note 4: The ceiling on total amount of endorsements/guarantees provided to others by the Company is 100% of the Company's net assets.

Table 2, Page 1

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures) December 31, 2023

Table 3

Expressed in thousands of NTD

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

(Except as otherwise indicated)

Securities held by	Marketable securities(Note 1)	Relationship with the securities issuer	General ledger account		As of December 31,2023	Fair value(in thousands) Note
				Number of shares	Book value(in thousands) Ownership (%)
The Company The Company The Company The Company The Company MUTT The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company MEST MEST ASCX ASCX	Fund - 76324296A KGI Taiwan Multi-Asset Income Fund A TWD - Fund - UPAMC Wealthy Fund Fund - Hua Nan Phoenix Money Market Fund Bond - SYNergy Private Placement (YDB8AA) - Stock-Foxtron Vehicle Technologies Fund - Taishin 1699 Money Market Fund Fund - JAFCO - Fund-WK Technology Stock - 2881B.TW - Stock - 2882B.TW - Stock - 5871A Stock - 4943.TW Stock - FUJITER Semiconductor CO.,LTD. - Stock - NETVOX TECHNOLOGY CO., LTD - Stock - EVER THAI AGRI-PRODUCT CO.,LTD. - Stock - SUNSINO SME Development Co., Ltd. - Stock - LINSATION Intelligent Technology Limited - Stock - MERRY FULING CO., LTD., TAIWAN BRANCH (SAMOA) - Stock - 6558.TW - Stock - Perfect Fortune Inc. - Stock - LOYAL WIRE& CABLE COMPANY LTD. - Stock - DeTing (Xiamen) Health Technology Co., Lt - Stock - Beijing Wanling Hearing Aids -		Financial assets mandatorily measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Financial assets mandatorily measured at fair value through profit or loss Valuation adjustment Non-current financial assets mandatorily measured at fair value through profit or loss Non-current financial assets mandatorily measured at fair value through profit or loss Valuation adjustment Equity instruments measured at fair value through other comprehensive income - current Equity instruments measured at fair value through other comprehensive income - current Valuation adjustment Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Equity instruments measured at fair value through other comprehensive income - non-current Valuation adjustment Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Measured at fair value through other comprehensive income - non-current Valuation adjustment	5,015 50,000 $ - 5,000 50,000 - 5,981 100,000 - - 280,000 - 400 20,480 - 2,300 32,000 - 532,480 10,934 543,414 $ 919 27,652 $ 0.71% 2,000 20,000 1.78% 47,652 1,824) ( 45,828 $ 683 40,980 $ - 585 35,100 - 300 30,000 - 106,080 874) ( 105,206 $ 7,712 648,164 $ 7.61% 2,126 27,811 9.79% 324 2,976 1.32% 683 6,425 4.64% 169 2,123 0.36% 75 8,772 6.19% 356 10,437 19.00% 7,300 188,340 7.79% 895,048 625,027) ( 270,021 $ 2,126 8,355 $ 18.33% 1,159 8,054 18.33% - 433 10.00% - 4,760 19.64% 21,602 77,900 99,502 $		58,325 $ 55,249 100,000 280,000 17,840 32,000 543,414 $ 25,869 $ 19,959 45,828 $ 40,912 $ 34,924 29,370 105,206 $ 65,919 $ 18,749 - 2,392 2,418 2,826 11,000 166,717 270,021 $ 75,068 $ 19,241 433 4,760 99,502 $

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9.

Table 3, Page1

Table 4

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more

Year ended December 31, 2023

Expressed in thousands of NTD

(Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationshipwith the counterparty			~~g~~ Transaction	~~g~~ Transaction	Differences in transaction terms compared to thirdpartytransactions(Note 1)	Differences in transaction terms compared to thirdpartytransactions(Note 1)	~~g~~ Notes/accounts receivable(payable)	~~g~~ Notes/accounts receivable(payable)	Note
			Purchases (sales)	Amount	total purchases (sales)	Credit term	Unit price	Credit term	Balance (Note2)	notes/accounts receivable (payable)
The Company The Company The Company The Company METC MESG MESG MESG	MECL MEVN MECH MECE The Company MECL METC MECH	A subsidiary of the Company A subsidiary of the Company Investment accounted for using the equity method Investment accounted for using the equity method Parent Company A subsidiary of the Company A subsidiary of the Company Investment accounted for using the equity method	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases	8,942,206 $ 2,510,464 2,707,870 9,439,736 3,210,332 840,924 4,737,777 1,767,080	24% 7% 7% 26% 9% 2% 13% 5%	60~65 days end of month after offsetting with accounts receivable 60~65 days end of month after offsetting with accounts receivable 60~65 days end of month after offsetting with accounts receivable 60~65 days end of month after offsetting with accounts receivable 60~120 days end of month after offsetting with accounts receivable 60~65 days end of month after offsetting with accounts receivable 60~65 days end of month after offsetting with accounts receivable 60~65 days end of month after offsetting with accounts receivable	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 1)	30~120 days end of month for the third parties 30~120 days end of month for the third parties 30~120 days end of month for the third parties 30~120 days end of month for the third parties 30~120 days end of month for the third parties 30~120 days end of month for the third parties 30~120 days end of month for the third parties 30~120 days end of month for the third parties	3,353,058) ($ 1,040,713) ( 495,467) ( 2,000,045) ( 1,428,565) ( 354,596) ( 903,012) ( 55,346) (	39% 12% 6% 23% 17% 4% 11% 1%	(Note 3) (Note 3) (Note 3) (Note 3) (Note 3)

Note 1: For purchase transactions with related parties, the price is based on the profitability of the product and will be adjusted annually. Note 2: The balance is the net amount after offsetting accounts receivable and payable due from/ to related parties. Note 3: Inter-company transactions between companies within the Group are eliminated.

Table 4, Page1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Receivables from related parties reaching $100 million or 20% of paid-in capital or more

December 31, 2023

Table 5

Expressed in thousands of NTD

(Except as otherwise indicated)

Creditor	Counterparty	Relationshipwith the counterparty	Balance of accounts receivable due from relatedparty	Balance of accounts receivable due from relatedparty	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date (Note 2)	Allowance for doubtful accounts	Note
			General ledger account	Amount		Amount	Action taken
The Company MECL MECL METC MEVN MECE MECH MESG	METC The Company MESG MESG The Company The Company The Company MENA	A subsidiary of the Company Parent Company A subsidiary of the Company A subsidiary of the Company Parent Company Parent Company Parent Company A subsidiary of the Company	Accounts Receivable Accounts Receivable Accounts Receivable Accounts Receivable Accounts Receivable Accounts Receivable Accounts Receivable Other Receivable	1,428,565 $ 3,353,058 354,596 903,012 1,040,713 2,000,045 495,467 101,327	2.49 2.66 2.60 6.09 2.84 3.65 5.29 -	- $ - - - - - - -	- - - - - - - -	320,044 $ 1,659,305 172,553 903,012 190,853 1,071,534 224,278 -	- $ - - - - - - -	(Note 1) (Note 1) (Note 1) (Note 1) (Note 1) (Note 3)

Note 1: Inter-company transactions between companies within the Group are eliminated.

Note 2: The balance was as at February 22, 2024.

Note 3: The amount comprises other receivables and thus, the turnover rate is not calculated.

Table 5, Page1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Table 6

Significant inter-company transactions during the reporting periods

Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Transaction

						Transaction
Number (Note 1)	Companyname	Counterparty	Relationship (Note2)	General ledgeraccount	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets (Note 3)
0 0 0 0 1 1 2 2 2 2	MEHO MEHO MEHO MEHO METC METC MESG MESG MESG MESG	MECL MECL MEVN MEVN MEHO MEHO MECL MECL METC METC	1 1 1 1 2 2 3 3 3 3	Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable Purchases Accounts payable	8,942,206 $ 3,353,058 2,510,464 1,040,713 3,210,332 1,428,565 840,924 354,596 4,737,777 903,012	The price is based on the profitability of the product 60~65 days end of month after offsetting with accounts receivable The price is based on the profitability of the product 60~65 days end of month after offsetting with accounts receivable The price is based on the profitability of the product 60~120 days end of month after offsetting with accounts receivable The price is based on the profitability of the product 60~65 days end of month after offsetting with accounts receivable The price is based on the profitability of the product 60~65 days end of month after offsetting with accounts receivable	24% 10% 7% 3% 9% 4% 2% 1% 13% 3%

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

1. Parent company is ‘0’.

2. The subsidiaries are numbered in order starting from ‘1’.

3. Note 2: Relationship between transaction company and counter party is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

4. Parent company to subsidiary.

5. Subsidiary to parent company.

6. Subsidiary to subsidiary.

7. Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 6, Page1

Information on investees Year ended December 31, 2023

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Investor Table 7	Investee	Location	Main business activities	Initial investment amount	Shares held as at December 31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment income (loss) recognised by the Company for the year ended December 31,2023 Note Expressed in thousands of NTD (Except as otherwise indicated)
				Balance as at December 31,2023 Balance as at December 31,2022	Number of shares (in thousand shares) Ownership (%) Book value
The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company The Company MESG MCTT DDBV DDBV MHKY INSA MENA	MEST DDBV LEOHAB ENTERPRISE CO.,LTD. DONPON PRECISION INC. MECA MESG METC MHKY INSA MEVN MUTT MCTT MAC FUND MEMP MAC FUND UCMU MTHK FUSA MENA SENM	HONG KONG British Virgin IS. Taichung City Taoyuan City U.S.A SINGAPORE THAILAND CAYMAN SAMOA VIETNAM New Taipei City Taichung City Taipei City Malaysia Taipei City MAURITIUS HONG KONG SAMOA CANADA NORWAY	Sales of microphone, receiver and speaker General investment business Plastic injection molding and metal stamping Various plastic products, mold manufacturing and processing and trading business Technique, marketing and after service Sales of microphone, receiver and speaker Microphone, components and product and sale of other electric products Sales of medical device General investment business Manufacture of microphone and speaker Electrical appliances and audiovisual electronic products General investment business General investment business Research and development of microphone, receiver and speaker General investment business General investment business General investment business General investment business Sale and development of speaker and power amplifier Manufacture and sales of speaker monomer	733,733 $ 981,113 $ 1,479,925 1,479,925 96,666 96,666 386,010 99,990 28,887 28,887 92,132 92,132 484,358 484,358 857,946 857,946 1,293,008 1,199,977 366,710 366,710 30,600 30,600 8,000 8,000 123,733 19,200 15,969 15,969 2,900 450 - 151 1,392,956 1,392,956 795,943 795,943 92,445 30 23 23	19,658 100.00% 4,803,954 $ 48,005 100.00% 3,279,912 4,986 21.00% 39,554 19,723 16.09% 441,257 999 99.90% 35,217 800 100.00% 1,871,860 5,060 99.99% 866,204 27,992 100.00% 284,579 302 100.00% 535,120 - 51.00% 841,570 3,060 51.00% 16,005 800 100.00% 9,886 - 42.67% 114,161 2,400 100.00% 8,344 - 1.00% 2,676 - - - 48,000 100.00% 3,279,717 27,160 96.01% 285,674 56,954 100.00% 50,448 - 100.00% 56,653	392,361 $ 9,155 3,410 121,355 145 721,374 175,545 97,627) ( 45,083) ( 229,564 22,885) ( 1,647 19,990) ( 7,630) ( 19,990) ( - 9,155 97,443) ( 64,335) ( 1,128) (	468,780 $ (Note 1) 64,066 (Note 1) 715 4,172) ( (Note 1) 145 721,374 172,949 (Note 1) 97,627) ( 45,083) ( 109,675 (Note 1) 11,671) ( 1,647 8,529) ( - (Note 2) 200) ( - (Note 2) - (Note 2) - (Note 2) - (Note 2) - (Note 2)

Note 1: The investment income included unrealised gains or losses and realised gains arising from upstream transactions. Note 2: The investee is second subsidiary and investment income (loss) is not shown. Note 3: Please refer to Note 4 (3).

Table 7, Page1

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Table 8

Expressed in thousands of NTD (Except as otherwise indicated)

Information on investees in Mainland China

Year ended December 31, 2023

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2023	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the year ended December 31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the year ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2023	Book value of investments in Mainland China as of December 31, 2023 (Note 4)	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023 Note
					Remitted to Mainland China Remitted back to Taiwan
MEDG MSCS MECL MECE MECS MECH FUSZ ETCX ASCX LACX	Research and development of sound equipment, earphones, mobile power supply, charging box, cable, connector, electronic components, plastic hardware, Manufacture of speaker and amplifier Microphone, receiver, speaker, security system, induction cooker and other electronic component Manufacture and sales of microphone, receiver and speaker International trade, transit trade and trading consulting; trading amongst companies in bonded area and trading agency in the area Manufacture and sales of microphone, receiver, speaker and mobile phone Manufacture of medical device Retail sales of hearing products Manufacture and sales of hearing aid, hearing device and acoustics equipment Research and development and technical sales of software for hearing aid use	865,400 $ 149,595 412,553 2,707,573 7,181 432,700 277,721 19,472 74,688 21,635	(Note 1) (Note 1) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2) (Note 2)	452,564 $ 110,497 453,191 1,369,285 6,055 420,687 310,763 19,009 293,281 22,180	- $ - $ - - - - - - - - - - - - - - - - - -	452,564 $ 110,497 453,191 1,369,285 6,055 420,687 310,763 19,009 293,281 22,180	47,105 $ 6,015) ( 174,688 18,679 - 400,938 2,447) ( 7,144) ( 4,965) ( 859) (	49.00% 100.00% 100.00% 49.00% 49.00% 49.00% 96.01% 96.01% 95.53% 95.53%	23,081 $ 6,015) ( 174,688 64,066 - 210,554 2,350) ( 6,859) ( 4,743) ( 821) (	422,596 $ 128,810 3,361,795 3,279,717 1,095) ( 1,286,560 236,750 30,512) ( 20,884 810) (	- $ (Note 3) - (Note 3) 2,282,120 (Note 3) 295,185 (Note 3) 40,321 (Note 3) 213,003 (Note 3) - (Note 3) - (Note 3) - (Note 3) - (Note 3)

Table 8, Page1

Table 8

Expressed in thousands of NTD

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Information on investees in Mainland China

Year ended December 31, 2023

(Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method	Accumulated amount of remittance from Taiwan to Mainland China as of January1,2023	Amount remitted from Taiwan to Mainland China / Amount remitted back to Taiwan for the year ended December 31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	Net income of investee for the year ended December 31,2023	Ownership held by the Company (direct or indirect)	Investment income (loss) recognised by the Company for the year ended December 31,2023	Book value of investments in Mainland China as of December 31, 2023 (Note 4)	Accumulated amount of investment income remitted back to Taiwan as of December 31,2023 Note
					Remitted to Mainland China Remitted back to Taiwan
FUXM DONG GUAN GET PINK	Sales of medical device Manufacture and sales of earphones and speaker	301,302 $ 68,150	(Note 2) (Note 2)	302,995 $ -	- $ - $ - -	302,995 $ -	57,456) ($ 2,163) (	96.01% 33.00%	55,163) ($ 714) (	23,748 $ 15,989	- $ (Note 3) - (Note 3)

Note 1: Reinvesting in the investee in Mainland China through the parent company.

Note 2: Through investing in an existing company in the third area, which then invested in the investee in Mainland China.

Note 3: The financial statements that are audited and attested by R.O.C. parent company’s CPA.

Note 4: The amount in the table is translated into New Taiwan dollars at the closing exchange rates prevailing at the balance sheet date.

Companyname Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA
Merry Electronics Co., Ltd. 3,760,507 $ 4,178,588 $	7,572,748 $

Note 1: (2001) Tai-Cai-Zheng (1) Letter No. 006130 of Securities and Futures Commission, Ministry of Finance, R.O.C

Table 8, Page2

Table 9

MERRY ELECTRONICS CO., LTD. AND SUBSIDIARIES

Significant transactions conducted with investees in Mainland China directly or indirectly through other companies in the third areas

Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Counterparty	Sale(purchase)	Sale(purchase)	Propertytransaction	Propertytransaction	Accounts receivable(payable)	Accounts receivable(payable)	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing	Financing		Others
		Amount	%	Amount	%	Balance at December 31,2023	%	Balance at December 31,2023	Purpose	Maximum balance during the year ended December 31,2023	Balance at December 31,2023	Interest rate	Interest during the year ended December 31,2023
MECL MECL MECE MECH MECH	MEHO MESG MEHO MEHO MESG	8,942,206) ($ 840,924) ( 9,439,736) ( 2,707,870) ( 1,767,080) (	24% 2% 26% 7% 5%	- $ - - - -	- - - - -	3,353,058) ($ 354,596) ( 2,000,045) ( 495,467) ( 55,346) (	39% 4% 23% 6% 1%	- $ - - - -	- - - - -	- $ - - - -	- $ - - - -	- - - - -	- $ - - - -	- - - - -

Table 9, page1