Optimax — Audit Report / Information 2024

Nov 12, 2024

Stock Code: 3051

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Independent Auditors’ Report

December 31, 2024 and 2023

Address: No. 37, Lane 659, Pingdong Rd., Pingzhen District, Taoyuan City, Taiwan , R.O.C Telephone: 886-3-460-6677

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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Table of contents

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Contents Page
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Contents	Page
Cover Page	1
Table of Contents	2
Statement of Declaration	3
Independent Auditors’ Report	4~7
Consolidated Balance Sheets	8
Consolidated Statements of Comprehensive Income	9
Consolidated Statements of Changes in Equity	10
Consolidated Statements of Cash Flow	11
Notes to the Consolidated Financial Statements	12~74
1. Organization and business	12
2. Approval of financial statements	12
3. Application of New and Revised Accounting Standards and	12~13
Interpretations
4. Summary of significant accounting policies	13~23
5. Critical accounting judgments and key sources of estimation and	23~24
assumption uncertainty
6. Description of Significant Accounts	24~59
7. Related-party transactions	60~62
8. Pledged assets	63
9. Significant commitments and contingencies	63
10. Significant loss from disaster	63
11. Significant subsequent events	63
12. Others	64
13. Additional disclosures	64
(1) Information of significant transactions	64
(2) Information of investees	64
(3) Information of investments in mainland China	64
(4) Major shareholders information	64
14. Segment information	65~67
Tables of Significant Accounting Items	68~74

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Statement of Declaration

The entities that are required to be included in the Consolidated Financial Statements of OPTIMAX TECHNOLOGY CORPORATION and subsidiaries as of and for the year ended December 31, 2024 under the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” are the same as those included in the Consolidated Financial Statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed and issued into effect by the Financial Supervisory Commission. In addition, the information required to be disclosed in the Consolidated Financial Statements is included in the Consolidated Financial Statements. Consequently, OPTIMAX TECHNOLOGY CORPORATION and subsidiaries do not prepare a separate set of Consolidated Financial Statements.

Hereby declared,

Company Name: OPTIMAX TECHNOLOGY CORPORATION Chairman: Peter Chao Date: March 13, 2025

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Independent Auditors’ Report

To Optimax Technology Corporation

Opinion

We have audited the consolidated balance sheets of Optimax Technology Corporation and its subsidiaries as of December 31, 2024, and December 31, 2023, along with the consolidated statements of comprehensive income, changes in equity, and cash flows for the periods from January 1, 2024, to December 31, 2024, and from January 1, 2023, to December 31, 2023, as well as the notes to the consolidated financial statements (including a summary of significant accounting policies).

Based on the opinion of our auditor and the audit reports of other auditors (please refer to the Other Matters section), the consolidated financial statements mentioned above have been prepared in all material respects in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. They are sufficient to express the financial position of Optimax Technology Corporation and its subsidiaries as of December 31, 2024, and December 31, 2023, as well as the financial performance and cash flows for the periods from January 1, 2024, to December 31, 2024, and from January 1, 2023, to December 31, 2023.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Financial Statements Audit and Attestation Engagements of Certified Public Accountants and Auditing Standards. Our responsibility under those standards will be further described in the section titled "The Accountants' Responsibilities in Auditing the Consolidated Financial Statements." We have stayed independent from Optimax Technology Corporation and its subsidiaries as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by the Norm. Based on the audit results of our auditor and the audit reports of other auditors, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, are of most significance in our audit of 2024 Consolidated Financial Statements of Optimax Technology Corporation and its subsidiaries. These matters are 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 individually. The accountant's judgment should communicate the key audit matters on the audit report as follows:

1. Inventory Valuation

For the accounting policies of inventories, please refer to Note 4 (6) of the Consolidated Financial Statements; For the accounting estimates of the inventory evaluation and the description of the uncertainty of the assumptions, please refer to Note 5 of the Consolidated Financial Statements; For the description of important accounting items in inventories, please refer to Note 6 (5) of the Consolidated Financial Statements.

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The main business item of Optimax Technology Corporation and its subsidiaries are the manufacture and sales of polarizers. Because the inventory is easily affected by the market demand of the products used and the yield rate of the production process, resulting in sluggish or falling prices, so the inventory evaluation is listed as one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

• (1) Check the inventory age report and analyze the changes of inventory age in each period.

• (2) Evaluate the rationality of accounting policies, such as inventory depreciation or sluggish withdrawal policies.

• (3) Assess whether the valuation of inventories has been in accordance with the company's established accounting policies.

• (4) Obtain the report of the net realizable value of inventories on the end of the financial reporting period, the selling price of goods or the purchase price used to check the net realizable value, and other data sources, and recalculate the accrued inventory allowance to offset the loss in value to confirm such data. The performance of accounting estimates is consistent with its policies.

• (5) Understand the process of inventory management, review its annual inventory plan and participate in annual inventory, and check inventory details to evaluate the effectiveness of management in distinguishing and controlling obsolete inventory.

2. Impairment assessment of Property, plant and equipment

• For the accounting policy of asset impairment, please refer to Note 4 (11) of the Consolidated Financial Statements; For the uncertainty of the accounting estimates and assumptions of the asset impairment assessment, please refer to Note 5 of the Consolidated Financial Statements; For the description of important accounting items in Property, plant and equipment, please refer to Note 6 (7) of the Consolidated Financial Statements.

Optimax Technology Corporation and its subsidiaries are highly capitalized industry and is facing the interference of various factors such as the economic environment and industry competition; due to the assessment of impairment of Property, plant and equipment, it is necessary to estimate and discount the future cash flow to estimate the recoverable amount and other processes, which are inherently highly uncertain, so the assessment of impairment of Property, plant and equipment is one of the key audit matters.

Our audit procedures performed in respect of the above area included the following:

• (1) Understand the relevant policies and procedures for impairment assessment, and assess the rationality of the management to identify the cash-generating units that may be impaired.

• (2) Regarding the recoverable amount of the independent assessment report issued by a third party appointed by Optimax Technology Corporation and its subsidiaries, examine the reasonableness of the relevant assumptions, and assess the qualification and independence of the appraiser.

Other Matters

Incorporated in the consolidated financial statements is the investment in an associated company accounted for using the equity method. The financial statements of this associated company have not been audited by our auditor but by another auditor. Therefore, our auditor's opinion on the consolidated financial statements includes the amounts pertaining to the associated company's financial statements accounted for using the equity method, as per the audit report of the other auditor.

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As of December 31, 2024, and December 31, 2023, the carrying amount of the investment in the associated company, accounted for using the equity method but not audited by our auditor, are NT$36,000 thousand and NT$107,663 thousand, respectively, representing 1% and 3% of total assets, respectively. For the year ended December 31, 2024, and December 31, 2023, our share of the comprehensive loss from the associated company accounted for using the equity method are NT$(71,663) thousand and NT$(12,337) thousand, respectively, representing (21)% and (6)% of total comprehensive income, respectively.

The Management's Responsibility and Governing Body of the Consolidated Financial Statements

It is the management's responsibility to fairly present the Consolidated Financial Statements in conformity with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," and to maintain internal controls which are necessary for the preparation of the Consolidated Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing for the consolidated financial statement, responsibilities of the management also included assessment of the capacity to continue operation, disclosure of related matters and the accounting approaches to be adopted when the Company continues to operate unless the management intends to liquidate or suspend the business of Optimax Technology Corporation and its subsidiaries if there is not any other option except liquidation or suspension of the Company's business.

The governing bodies of Optimax Technology Corporation and its subsidiaries (including the Audit Committee) have the responsibility to oversee the process by which the financial statements are prepared.

The Accountants' Responsibilities in Auditing the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance on whether the Consolidated Financial Statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. "Reasonable assurance" refers to high level of assurance. Nevertheless, our audit, which is carried out in accordance with the generally accepted auditing standards, does not guarantee that a material misstatement(s) will be detected in the Consolidated Financial Statements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements.

We have utilized our professional judgment and maintained professional skepticism when exercising auditing work in accordance with the generally accepted auditing standards. We also:

1. Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Consolidated Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. The risk of not detecting a significant 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.

2. Acquired necessary understanding of internal controls pertaining to the audit in order to develop audit procedures appropriate under the circumstances. Nevertheless, the purpose of such understanding is not to provide any opinion on the effectiveness of the internal controls of Optimax Technology Corporation and its subsidiaries.

3. Assess the appropriateness of the accounting policies adopted by the management level, as well as the reasonableness of their accounting estimates and relevant disclosures.

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4. Concluded, based on the audit evidence acquired, on the appropriateness of the management's use of the going-concern basis of accounting, and determined whether a material uncertainty exists where events or conditions that might cast significant doubt on the ability of Optimax Technology Corporation and its subsidiaries to continue as going concerns. If we believe there are events or conditions indicating the existence of a material uncertainty, we are required to remind the users of the Consolidated Financial Statements in our audit report of the relevant disclosures therein, or to amend our audit opinion when any inappropriate disclosure is found. Our conclusion is based on the audit evidence acquired as of the date of

the audit report. However, future events or conditions may cause Optimax Technology Corporation and its subsidiaries to cease to continue as a going concern. However, future events or conditions may cause Optimax Technology Corporation and its subsidiaries to cease to continue as a going concern.

5. Evaluated the overall presentation, structure, and content of the Consolidated Financial Statements (including the related notes), and determined whether the Consolidated Financial Statements present related transactions and events fairly.

6. Acquire sufficient and appropriate audit evidence for the financial information of the investee company that adopts the equity method to express opinions on Consolidated Financial Statements. We are responsible for the direction, supervision, and performance of the audit. We remain solely responsible for our audit opinion on Optimax Technology Corporation and its subsidiaries.

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 provided governing bodies with a declaration that we had complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that might possibly be deemed to impair our independence (including relevant preventive measures).

From the matters communicated with those charged with governance, we determined the key audit matters of

the Consolidated Financial Statements of Optimax Technology Corporation and its subsidiaries of 2023. 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 communications.

BAKER TILLY CLOCK & CO.

Taiwan (Republic of China)

Accountant: Hsin-Liang Wu / Ying-Lai Chou

Approved audit number: FSC (6) No. 09600000880 / (80) Taiwan Financial Certificate (6) No. 53585

March 13, 2025

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OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

	December 31, 2024 December 31, 2023
	Amount % Amount %
Assets Current assets Cash and cash equivalents Current financial assets at amortized cost Accounts receivable, net Other receivables Current inventories Prepayments Other current financial assets Other current assets	$ 148,275 3 150,608 4 116,959 3 26,171 1 715,379 17 548,234 13 26,242 1 24,077 － 603,022 14 686,954 17 7,157 － 11,730 － 3,521 － 82,932 2 1,312 － 1,422 －
Total current assets	1,621,867 38 1,532,128 37
Noncurrent assets Investments accounted for using equity method Property, plant and equipment Right-of-use assets Investment property, net Deferred tax assets Net defined benefit assets - non-current Other non-current assets	36,000 1 107,663 3 1,495,759 35 1,561,173 38 11,286 － 13,348 － 827,225 19 767,992 19 116,121 3 144,736 3 13,340 1 6,428 － 128,321 3 8,009 －
Total non-current assets	2,628,052 62 2,609,349 63
Total Assets	$ 4,249,919 100 4,141,477 100
Liabilities Current liabilities Short-term loans Accounts payable Other payables Current income tax liability Current provisions Current lease liabilities Current Portion of Long-term Debt Current refund liabilities Other current liabilities	$ 215,075 5 98,097 3 120,743 3 134,327 3 166,689 4 152,426 4 870 － 12,735 － 16,565 － 15,810 － 3,851 － 3,484 － 21,600 1 － － 3,767 － 2,461 － 15,849 － 15,560 －
Total current liabilities	565,009 13 434,900 10
Noncurrent liabilities Long-term borrowings Deferred tax liabilities Non-current lease liabilities Other non-current liabilities	980,000 23 1,210,000 30 8,394 － 1,367 － 8,750 － 10,701 － 98,852 3 38,823 1
Total non-current liabilities	1,095,996 26 1,260,891 31
Total liabilities	1,661,005 39 1,695,791 41
Equity Common stock Retained earnings： Statutory surplus reserve Special surplus reserve Undistributed surplus Other components of equity Treasury Stocks	1,690,000 40 1,700,000 41 101,883 2 81,278 2 29,948 1 35,651 1 811,058 19 700,304 17 (2,376) － (29,948) (1) (41,599) (1) (41,599) (1)
Equity attributable to owners of parent	2,588,914 61 2,445,686 59
Total equity	2,588,914 61 2,445,686 59 $ 4,249,919 100 4,141,477 100
Total liabilities and equity

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OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES Consolidated Statements of Comprehensive Income For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common share)

Total operating revenue Total operating costs	2024 Amount %	2023
		Amount %
	$ 1,887,383 100 (1,193,695) (63)	$ 2,004,664 100 (1,471,481) (73)
Grossprofitfrom operations	693,688 37	533,183 27
Operating expenses Selling expenses Administrative expenses Research and development expenses Expected Credit impairment loss/gain	(145,573) (8) (149,016) (8) (42,308) (2) (4,089) －	(140,858) (7) (157,478) (8) (52,834) (3) 22,120 1
Total operating expenses	(340,986) (18)	(329,050) (17)
Net operating income	352,702 19	204,133 10
Non-operating income and loss Interest income Other income Other gains and losses Finance costs Expected Credit impairment gain/loss Share of profit or loss from associates accounted for using the equity method	3,883 － 71,911 5 44,458 2 (30,554) (2) 513 － (68,843) (4)	3,576 － 68,875 4 (11,266) (1) (42,048) (2) (2,903) － (22,770) (1)
Total non-operating income and expenses	21,368 1	(6,536) －
Income before income tax Income tax expense	374,070 20 (36,800) (2)	197,597 10 (25,065) (1)
Net Income	337,270 18	172,532 9
Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss Remeasurement of defined benefit obligations 5,002 － Unrealized gains (losses) measured at fair value through other comprehensive income － － Unrealized gains (losses) from subsidiaries accounted for using equity method in equity instruments measured at fair value through other comprehensive income － － Components of other comprehensive income that will be reclassified to profit or loss Exchange differences on translating the financial statements of foreign operations 1,349 － Other comprehensive income for the period (net of tax) 6,351 －		(2,433) － 41,443 2 985 － (770) － 39,225 2
Total comprehensive income $ 343,621 18		$ 211,757 11
Profit attributable to: Profit attributable to owners of parent $ 337,270 18		$ 172,532 9
Total comprehensive income attributable to： Profit attributable to owners of parent $ 343,621 18		$ 211,757 11
Earnings per share Basic earnings per share $ 2.01 Diluted earnings per share $ 2.01		$ 1.03 $ 1.03

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OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

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Retained earnings Other components of equity
Unrealized gains(losses)
Accounting Title Common stock Foreign Currency Treasure Stocks Total equity
Statutory Special surplus Undistributed from financial assets at
translation
surplus reserve reserve surplus fair value through other
differences
comprehensive income
Balance as of January 1, 2023 $ 1,700,000 $ 35,500 $ － $ 777,279 $ (2,949) $ (32,702) $ (41,599) $ 2,435,529
Appropriation and distribution of retained
earnings:
－ － － － － －
Statutory surplus reserve 45,778 (45,778)
－ － － － － －
Special surplus reserve 35,651 (35,651)
－ － － － － －
Ordinary cash dividend (201,600) (201,600)
Net Income － － － 172,532 － － － 172,532
Other comprehensive income(loss) － － － (2,433) (770) 42,428 － 39,225
－ － － －
Total comprehensive income (loss) 170,099 (770) 42,428 211,757
Disposal of gains (losses) measured at
－ － － － － －
fair value through other comprehensive 35,955 (35,955)
income
Balance at of December 31, 2023 $ 1,700,000 $ 81,278 $ 35,651 $ 700,304 $ (3,719) $ (26,229) $ (41,599) $ 2,445,686
Balance as of January 1, 2024 $ 1,700,000 $ 81,278 $ 35,651 $ 700,304 $ (3,719) $ (26,229) $ (41,599) $ 2,445,686
Appropriation and distribution of retained
earnings:
－ － － － － －
Statutory surplus reserve 20,605 (20,605)
－ － － － － －
Special surplus reserve (5,703) 5,703
－ － － － － －
Ordinary cash dividend (168,000) (168,000)
Net Income － － － 337,270 － － － 337,270
Other comprehensive income(loss) － － － 5,002 1,349 － － 6,351
－ － － － －
Total comprehensive income (loss) 342,272 1,349 343,621
Disposal of gains (losses) measured at
－ － － － － －
fair value through other comprehensive (26,223) 26,223
income
－ － － － － －
Shares Buyback (Treasure Stocks) (32,393) (32,393)
Cancellation of treasury stocks (10,000) － － (22,393) － － 32,393 －
Balance at of December 31, 2024 $ 1,690,000 $ 101,883 $ 29,948 $ 811,058 $ (2,370) $ (6) $ (41,599) $ 2,588,914
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OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

	2024	2023
Cash flows from operating activities：
Income before income tax	$374,070	$197,597
Adjustments to reconcile profit (loss)：
Depreciation expense	76,535	76,930
Amortization expense	49	45
Expected credit impairment loss/gain	3,576	(19,217)
Interest expense	30,554	42,048
Interest income	(3,883)	(3,576)
Share of profit or loss from associates accounted for using the equity method	68,843	22,770
Loss on disposal of property, plant and equipment	12,053	8,700
Loss on disposal of investment properties	20	－
Gain on disposal of non-current assets classified as held for sale	－	(6,368)
Reversal of impairment loss on non-financial assets	(4,332)	(39)
Unrealized foreign exchange gain	(47,033)	(61,518)
Deferred income transferred to income	(2,693)	(2,658)
Others	－	109
Changes in operating assets and liabilities：
Accounts receivable	(133,777)	153,768
Other receivable	3,113	(5,462)
Inventories	83,932	272,749
Prepayments	4,583	(7,361)
Other current assets	110	159
Net defined benefit assets	(1,910)	(5,771)
Accounts payable	(12,365)	51,274
Other payable	11,260	(3,595)
Provisions	755	1,376
Other current liabilities	1,595	(14,368)
Cash generated from operation	465,055	697,592
Interest received	3,760	3,502
Interest paid	(30,947)	(41,072)
Income taxespaid	(13,023)	(16,308)
Net cash inflowsfrom operations	424,845	643,714
Cash flows from investing activities：
Disposal of financial assets at fair value through other comprehensive income	－	52,725
Acquisition of financial assets measured at amortized cost	(89,997)	(22,319)
Disposal of financial assets measured at amortized cost	－	11,837
Acquisition of investments accounted for using the equity method	－	(120,000)
Increase in prepaid investment	(120,000)	－
Disposal of non-current assets as held for sale	－	10,454
Acquisition of property, plant and equipment	(14,066)	(26,105)
Disposal of property, plant and equipment	714	1,889
Acquisition of investment properties	(50,546)	(231)
Increase in other receivable - related parties	－	(8,654)
Decrease (increase) in other financial assets	79,411	(11,352)
Increase in other non-current assets	(1,322)	(461)
Net cash outflowsfrom investing activities	(195,806)	(112,217)
Cash flows from financing activities：
Increase in short-term loans	118,364	66,884
Payments of long-term debt	270,000	2,840,000
Repayments of long-term debt	(478,400)	(3,220,000)
Increase in guarantee deposits received	61,676	245
Payment of cash dividends	(168,000)	(201,600)
Payments of lease liabilities	(3,651)	(3,424)
Shares Buyback(TreasureStocks)	(32,393)	－
Net cash outflowsfromfinancing activities	(232,404)	(517,895)
Effect of change rate changes on cash and cash equivalents	1,032	75,675
Net increase (decrease) in cash and cash equivalents	(2,333)	89,277
Cash and cash equivalents at beginning of year	150,608	61,331
Cash and cash equivalents at end of year	$148,275	$150,608

11

OPTIMAX TECHNOLOGY CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

For the year ended December 31, 2024 and 2023

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

1. Organization and business

• (1) Optimax Technology Corporation (hereinafter referred to as "the Company") is incorporated In March 1998. The Company and its subsidiaries (hereinafter referred to as "the consolidated company") are primarily engaged in the manufacturing and sales of polarizers.

• (2) The Company was approved for listing in August 2002, and its stock has been traded on the Taiwan Stock Exchange since October 2002.

• (3) This consolidated financial report is presented in the Company's functional currency, New Taiwan Dollar (NTD).

2. Approval of financial statements

These consolidated financial statements are approved and authorized for issue by the Board of Directors of Optimax Technology Corporation on March 13, 2025.

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

• (1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS”) as endorsed by the Financial Supervisory Commission (“FSC”) New standards, interpretations and amendments endorsed by the FSC effective from 2024 are as follows:

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Effective date by
International Accounting
New, Amended and Revised Standards, and Interpretations Standards Board
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New, Amended and Revised Standards, and Interpretations	Effective date by International Accounting 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 non- current’	January 1, 2024
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 Company’s financial condition and financial performance based on the Company’s assessment.

• (2) Effect of new issuances of or amendments to IFRSs as endorsed by the FSC but not yet adopted by the Company

New standards, interpretations and amendments endorsed by the FSC effective from 2025 are as follows:

New, Amended and Revised Standards, and Interpretations Amendments to IAS 21, ‘Lack of exchangeability’	Effective date by International Accounting Standards Board
	January 1, 2025

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

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• (3) IFRSs issued by IASB but not yet endorsed by the FSC

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

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Effective date by
International Accounting
New, Amended and Revised Standards, and Interpretations Standards Board
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New, Amended and Revised Standards, and Interpretations	Effective date by International Accounting Standards Board
Amendments to IFRS 9 and IFRS 7, ‘Classification and measurement of financial instruments’	January 1, 2025
Amendments to IFRS 9 and IFRS 7, ‘Contracts involving energy-dependent electricity’	January 1, 2025
Amendments to IFRS 10 and IAS 28,‘Sale or contribution of assets between an investor and its associate or joint venture’	To be determined by International Accounting
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– comparative information’	January 1, 2023
IFRS 18, ‘Presentation and disclosure in financial statements’	January 1, 2027
IFRS 19, ‘Subsidiaries without public accountability: disclosures’	January 1, 2027
Annual improvements to IFRS accounting standards - volume 11	January 1, 2026

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

IFRS 18 'Presentation and Disclosure in Financial Statements' replaces IAS 1 and updates the structure of the statement of profit or loss. It introduces new disclosures on management performance measures and enhances the principles of aggregation and disaggregation applied to the primary financial statements and the notes. The related impacts will be disclosed once the assessment is completed.

4. Summary of Significant Accounting Policies

(1) Compliance statement

The consolidated financial statements of the Company have been prepared in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”

(2) Basis of preparation

Except for financial instruments measured at fair value and net defined benefit assets recognized by deducting the fair value of plan assets from the present value of defined benefit obligations, the financial statements of this entity are prepared on a historical cost basis.

The preparation of the consolidated financial statements requires the use of significant accounting estimates, and the application of the company's accounting policies also involves management's judgment. For details on highly judgmental or complex items, or significant assumptions and estimates related to the consolidated financial statements, please refer to Note 5.

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(3) Basis of consolidation

1. Basis for preparation of consolidated financial statements:

This consolidated financial report includes the company and the entities (subsidiaries) controlled by the company.

The consolidated comprehensive income statement has been included the operating profit and loss from the acquired or executed subsidiary company in the current period since the acquisition date or to the date of disposition.

The financial report of the subsidiary has been adjusted so that its accounting policy is consistent with the consolidated company’s accounting policy.

When preparing the consolidated financial report, the transactions, account balances, income and expenses and losses have been completely eliminated.

Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary are accounted for as equity transactions. The book amount of the consolidated company and non-controlling interests has been adjusted to reflect changes in its relative equity in subsidiaries. Adjustment of non-controlling interests of the difference between the amount and the fair value of the consideration paid or received is directly recognized as a right and the benefits belong to the owners of the company.

When the consolidated company loses control of the subsidiary, the disposition profit and loss is one of the following two difference: (1) the fair value of the consideration received and the remaining investment in the former subsidiary are counted at the fair value at the date of loss of control, and (2) the assets of the former subsidiary (including goodwill), together with liabilities and non-controlling interests, they are counted based on the book amount on the day when control is lost. For all the amounts recognized in other comprehensive income and losses related to the subsidiary, the consolidated company accounting treatment must be followed by the direct disposal of related assets or liabilities with the consolidated company and the basis is the same.

2. Subsidiaries included in the consolidated financial statements:

==> picture [467 x 52] intentionally omitted <==

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

Business activities/ Percentage of Ownership (%)
Name of Place of
investor The name of subsidiaries Establishment and December December Description
31, 2024 31, 2023
Operation
----- End of picture text -----

Name of investor	The name of subsidiaries	Place of Establishment and Operation	December 31, 2024	December 31, 2023	Description
Optimax	ART OPTRONICS CORP..	Trading Business/ Taiwan	100%	100%	-
Optimax	Optimax Optoelectronic (MAURITIUS) CORP. (OOMC)	Investment Company/ Mauritius	100%	100%	-
	Optimax Technology	Polarizers
OOMC	(Suzhou) CO., LTD.	manufacturing and	100%	100%	-
	(OPTIMAX SUZHOU)	selling /Suzhou, China

3. Subsidiaries not included in the consolidated financial statements: None.

4. Adjustments for subsidiaries with different balance sheet dates: None.

5. Significant restrictions: None.

6. Subsidiaries that have non-controlling interests that are material to the Group: None.

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(4) Classification of current and non-current items

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

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

• (2) Assets held mainly for trading purposes.

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

• (4) 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.

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

• (1) Liabilities that are expected to be settled within the normal operating cycle.

• (2) Liabilities arising mainly from trading activities.

• (3) Liabilities expected to be settled within twelve months after the balance sheet date (even if longterm refinancing or repayment arrangements have been completed after the balance sheet date but before the financial report is issued, they are still classified as current liabilities).

• (4) Liabilities for which, as of the balance sheet date, there is no substantial right to defer the settlement period to at least twelve months after the balance sheet date.

(5) Foreign currency

When each entity prepares financial reports, transactions in currencies other than the individual's functional currency (foreign currency) are converted into functional currency records based on the exchange rate on the transaction day.

Monetary items in foreign currencies are translated at the closing exchange rate on each balance sheet date. The exchange difference arising from the currency items of delivery or the conversion of currency items is recognized in the current period profit and loss.

The fair value of foreign currency non-monetary items is used to determine the exchange rate on the day of fair value rate conversion, the resulting exchange difference is listed in the current profit and loss, but if the change in fair value is recognized in other comprehensive gains and losses, the resulting conversion difference is listed in other comprehensive gains and losses.

Non-monetary items in foreign currencies as measured by historical cost are converted at the exchange rate on the transaction date and will not be converted again.

When preparing the consolidated financial report, the assets and liabilities of foreign operating organizations (including subsidiaries in the country where they operate or whose currency is different from that of the company) are converted into New Taiwan dollars at the exchange rate on each balance sheet date. The income and expense items are converted at the average exchange rate of the current period. The resulting exchange difference is listed in other comprehensive profit and loss, and accumulated under the equity of the conversion difference of the foreign operation’s financial statements.

If the consolidated company disposes of all the rights and interests of the foreign operation, the accumulated exchange difference related to the foreign operations will be reclassified to profit or loss. If the partial disposal of the subsidiaries of the foreign operation does not result in the loss of control, the accumulated exchange difference is re-attributed to the subsidiary’s non-controlling interests and is not recognized as a profit or loss.

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(6) Inventories

Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted-average method. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and applicable variable selling expenses.

- (7) Investments accounted for using equity method affiliated companies

Investments using the equity method are investments in affiliated companies.

Affiliate is an enterprise that has significant influence on the consolidated company but is not a subsidiary or a joint venture Industry.

The consolidated company adopts the equity method for investing in affiliated enterprises.

Under the equity method, the investment in affiliated enterprises is initially recognized at cost, and the carrying amount in the future is based on the acquisition. Profits and losses of affiliated companies and other comprehensive profit and loss share and profit share enjoyed by the consolidated company match and increase or decrease. In addition, the changes in the equity of the affiliated company that the consolidated company can enjoy are based on the shareholding ratio is recognized.

When the affiliated company issues new shares, if the consolidated company does not subscribe according to the shareholding ratio, resulting in a change in the shareholding ratio and thus an increase or decrease in the net equity value of the investment, the increase or decrease will adjust the capital reserve - the equity method is used to recognize the related party. Changes in the net equity value of enterprises and investments using the equity method. However, if the shareholding ratio is not subscribed or acquired, resulting in a decrease in the ownership interest of the affiliated company, the amount related to the affiliated company recognized in other comprehensive profit and loss shall be reclassified according to the proportion of decrease, and the accounting treatment shall be based on the affiliated company. If the relevant assets or liabilities are directly disposed of on the same basis; if the adjustment in the preceding paragraph should be debited to the capital reserve, and the capital reserve balance generated by the investment using the equity method is insufficient, the difference is debited to retained earnings.

When the merging company's share of losses in an affiliated company equals or exceeds its equity in the associated company (including the carrying amount of investments in the affiliated company under the equity method and other long-term interests that are substantially part of the merging company's net investment in the affiliated company), that is, stop recognizing further losses. The consolidated company recognizes additional losses and liabilities only to the extent that legal obligations, constructive obligations or payments have been made on behalf of related companies.

When assessing impairment, the consolidated company treats the overall carrying amount of the investment (including goodwill) as a single asset, compares the recoverable amount with the carrying amount, and conducts impairment tests. The recognized impairment losses are not allocated to constitute the component of the carrying amount of the investment any assets, including goodwill. Any reversal of impairment losses is recognized to the extent of a subsequent increase in the recoverable amount of the investment.

The consolidated company ceases to use the equity method from the date when its investment ceases to be an affiliated company, and its retained interest in the original affiliated company is measured at fair value, included in the current year's profit and loss. In addition, all the amounts recognized in other comprehensive profit or loss related to the affiliated enterprise shall be accounted for in the same way as if the affiliated enterprise directly disposes of the relevant assets or liabilities. The basis that must be followed is the same.

Profits and losses arising from countercurrent, downstream and sidestream transactions between the consolidated company and its affiliates are recognized in the consolidated financial report.

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(8) Property, plant and equipment

Real estate, plant and equipment are recognized at cost, and subsequently cost minus accumulated depreciation and the amount after the accumulated impairment loss is measured.

The real property, plant and equipment under construction are the cost minus the accumulated impairment loss and the amount is recognized. Cost includes professional service fees and borrowing costs that meet the capitalization conditions. When these assets are completed and reach the expected state of use, they are classified into real estate, plant and equipment of the appropriate categories of equipment and start depreciation.

Except for self-owned land, which is not depreciated, the rest of the real estate, plant and equipment will be depreciated on a straight-line basis within the service life of each significant part. The consolidated company is at least to review the estimated service life, residual value and depreciation method at the end of each year, and postpone the impact of changes in applicable accounting estimates. When real estate, plant and equipment are delisted, the difference between the net disposal price and the book value of the asset is recognized in profit and loss.

(9) Investment real estate

Investment real estate refers to real estate held for the purpose of earning rent or capital appreciation or both (including right-of-use assets that meet the definition of investment real estate). Investment real estate also includes land that has not yet been determined for future use.

Self-owned investment real estate is initially measured at cost (including transaction costs), and subsequently measured at the amount of cost minus accumulated depreciation and accumulated impairment losses.

The investment real estate acquired by the lease is initially measured at cost (including the original measurement amount of the lease liability and the lease payment paid before the lease start date), and subsequently measured at the amount after the cost minus the accumulated depreciation and accumulated impairment losses, and the lease liability is adjusted again. All investment real estate is depreciated on a straight-line basis. Real estate, plant and equipment are transferred to investment real estate on the book amount at the end of self-use.

When investment real estate is delisted, the difference between the net disposal price and the asset's book value is recognized in profit and loss.

(10) Intangible Assets

1. Acquired separately:

The limited-life intangible asset acquired separately is measured at cost, and subsequently measured at cost less accumulated amortization and accumulated impairment losses. The intangible asset is amortized on a straight-line basis over its estimated useful life. At the end of each fiscal year, the Company reviews its estimated useful life, residual value, and amortization method, and defers the impact of any accounting estimate changes.

2. Derecognition:

When an intangible asset is derecognized, any difference between the net disposal proceeds and the carrying amount of the asset is recognized in the income statement.

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- (11) Impairment of non financial assets

The consolidated company assesses on each balance sheet date whether there are any indications that real property, plant and equipment, right-of-use assets, and intangible assets may have been impaired. If there is any sign of impairment, estimate the recoverable amount of the asset. If the recoverable amount of an individual asset cannot be estimated, the consolidated company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of the fair value less the cost of sale and its use value. If the recoverable amount of an individual asset or cash-generating unit is lower than its book value, the book value of the asset or cash-generating unit is reduced to its recoverable amount, and the impairment loss is recognized in profit and loss.

When the impairment loss is subsequently reversed, the carrying amount of the asset or cashgenerating unit is adjusted to the revised recoverable amount, but the increased carrying amount does not exceed the asset or cash-generating unit if the impairment is not recognized in the previous year which the book value determined at the time of the loss (minus amortization or depreciation). The reversal of the impairment loss is recognized in the profit and loss.

(12) Financial instruments

Financial assets and financial liabilities are recognized on the consolidated balance sheet of the consolidated company which becomes one of the contractual terms of the instrument.

When financial assets and financial liabilities are initially recognized, if financial assets or financial liabilities are not measured at fair value through profit and loss, they are directly attributable to the acquisition or issuance of financial assets or financial liabilities at fair value plus the transaction cost measurement. Directly attributable to the acquisition or issuance of financial assets or financial liabilities measured at fair value through profit and loss is immediately recognized as profit and loss.

1. Financial assets

Conventional transactions of financial assets are recognized and delisted by accounting on the transaction date.

• (1) Type of measurement

The types of financial assets held by the consolidated company are financial assets measured at amortized cost, financial assets measured at fair value through profit or loss and equity instruments measured at fair value through other comprehensive gains and losses.

• A. Financial assets measured at amortized cost

• If the financial assets invested by the consolidated company meet the following two conditions, they are classified as financial assets measured at amortized cost:

• (a) It is held under a certain business model, the purpose of which is to hold financial asset

• (b) The contract terms generate cash flows on a specific date, and these cash flows are completely to collect contractual cash flows; and to pay the principal and interest on the amount of principal in circulation.

Financial assets measured at amortized cost (including cash and cash equivalents, accounts receivable at amortized cost, other receivables and other financial assets) are determined by the effective interest method after initial recognition The total book value is measured after deducting any impairment loss after amortization, and any foreign currency exchange gains and losses are recognized in profit and loss.

Except for the following two cases, interest income is the effective interest rate multiplied by the financial asset of total book amount:

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• (a) For purchased or created credit-impaired financial assets, interest income is calculated by multiplying the effective interest rate after credit adjustment by the amortized cost of the financial asset.

• (b) For financial assets that are not purchased or original credit impairment, but subsequently become credit impairment, you should be confident to calculate interest income by multiplying the effective interest rate by the amortized cost of the financial asset from the next reporting period after the impairment.

  • Equivalent cash includes fixed deposits that are highly liquid and can be converted into fixed cash at any time within 3 months from the date of acquisition, and are used to meet short-term cash commitments.

• B. Financial assets measured at fair value through profit or loss

• Financial assets at fair value through profit or loss are mandatorily measured at fair value through profit or loss. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments not designated at fair value through other comprehensive income and loss and investments in debt instruments that do not qualify for classification as measured at amortized cost or at fair value through other comprehensive income.

Financial assets at fair value through profit or loss are measured at fair value, with dividends, interest and gains or losses arising from remeasurement recognized in profit or loss.

• C. Equity instruments measured at fair value through other comprehensive gains and losses Through other comprehensive profit and loss equity instruments measured at fair value to invest in a consolidated company, at the time of initial recognition, an irrevocable choice may be made, which is not to hold for trading and is not recognized by the purchaser of the business merger or has the consideration. Instrument investment is designated to be measured at fair value through other comprehensive gains and losses. Equity instrument investments measured at fair value through other comprehensive gains and losses are measured at fair value, and subsequent changes in fair value are reported in other comprehensive gains and losses and accumulated in other equity. At the time of investment disposal, the accumulated profits and losses are directly transferred to retained earnings and are not reclassified as profits and losses.

The dividends of equity instrument investments measured at fair value through other comprehensive gains and losses are recognized in the profit and loss when the rights of the consolidated company to receive payments are established, unless the dividend clearly represents the recovery of part of the investment cost.

• (2) Impairment of financial assets

• A. The consolidated company assesses the impairment losses of financial assets (including accounts receivable) measured at amortized cost based on expected credit losses on each balance sheet date.

• B. Accounts receivable shall be recognized as an allowance loss based on the expected credit loss during the duration. For other financial assets, first assess whether the credit risk has increased significantly since the initial recognition. If there is no significant increase, the allowance loss is recognized based on the 12-month expected credit loss, and if it has increased significantly, it is recognized based on the lifetime expected credit loss Allowance for losses.

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• C. Expected credit loss is the weighted average credit loss based on the risk of default. The 12month expected credit loss refers to the expected credit loss caused by the possible default event of the financial instrument within 12 months after the reporting date, and the lifetime expected credit loss represents the expected credit loss caused by all possible default events during the expected lifetime of the financial instrument. The impairment loss of all financial assets is reduced by the allowance account.

• (3) Delisting of financial assets

The consolidated company only lapses in the contractual rights from the cash flow of financial assets. It has transferred the financial assets and almost all risks and reports of the ownership of the assets.

When transferring to other enterprises, the financial assets are only delisted. When the financial assets measured at the amortized cost are delisted as a whole, their book amount is the difference between the consideration received is recognized in profit and loss. When the equity instrument investment measured at fair value through other comprehensive gains and losses is declassified as a whole, the accumulated gains and losses are directly transferred to the retained earnings are not reclassified as profit or loss.

2. Financial liabilities and equity instruments

• (1) Classification of liabilities or equity

The debt and equity instruments issued by the amalgamating company are classified as financial liabilities or equity based on the substance of the contractual agreement and the definition of financial liabilities and equity instruments.

An equity instrument refers to any contract that recognizes the remaining equity of the consolidated company after deducting all its liabilities from its assets. The equity instruments issued are recognized by the consolidated company after the acquired price deducting the cost of direct issuance.

• (2) Financial liabilities

Financial liabilities are not held for trading and are not designated as those measured at fair value through profit or loss (including payables). The initial recognition is based on fair value plus direct attributable transaction cost measurement; follow-up evaluation adopts effective interest rate method to amortize this measure.

• (3) Delisting of financial liabilities

The consolidated company delists financial liabilities when contractual obligations have been fulfilled, cancelled, or expired debt.When excluding financial liabilities, the difference between its book value and the total consideration paid or payable (including any transferred non-cash assets or liabilities assumed) is recognized as profit and loss.

(13) Liability provision

When the consolidated company has current obligations (statutory or constructive obligations) due to past events, and is likely to be required to pay off the obligations, and the amount of the obligations can be reliably estimated, the liability provision shall be recognized. The amount recognized as a liability reserve is based on the risk and uncertainty of the obligation, and is the best estimate of the expenditure required to settle the obligation on the balance sheet date. The liability reserve is measured by discounting the estimated cash flow of the settlement obligation.

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(14) Income recognition

After the consolidated company recognizes the performance obligations in the customer contract, it allocates the transaction price to each performance obligations, and recognizes income when each performance obligation is met.

Commodity sales revenue

1. Commodity sales revenue comes from the manufacture and sale of polarizers. Sales revenue is recognized when the control of the product is transferred to the customer, that is, when the product is delivered to the customer and the combined company has no outstanding performance obligations that may affect the customer's acceptance of the product. Because when the goods arrive at the customer's designated location, the customer has the right to set the price and use of the goods and bears the main responsibility for resale, and bears the risk of obsolescence and obsolescence of the goods, the consolidated company recognizes revenue and receivables at that point in time Accounts. The advance receipts received before the arrival of the goods are recognized as contract liabilities.

2. Commodity sales revenue is measured by the fair value of the consideration received or receivable, and deducted estimated customer returns, discounts and other similar discounts. The combined company estimates possible sales returns and discounts based on historical experience and other known reasons, and recognizes them accordingly refund liabilities and related rights to return products.

(15) Rent

The consolidated company assesses whether the contract belongs to (or contains) a lease on the date of contract establishment.

1. The consolidated company is the lessor

• When the lease term is to transfer almost all the risks and rewards attached to the ownership of the asset to the lessee classifies it as a finance lease. All other leases are classified as operating lease. When the consolidated company subleases the right-of-use asset, the right-of-use asset (not the underlying asset) is used to determine the classification of the sublease. However, if the main lease is a short-term when leasing, the sublease is classified as an operating lease.

• Under operating leases, lease payments after deduction of lease incentives are recognized as income on a straight-line basis during the relevant lease period. The lease negotiation with the lessee is related to lease repair from the effective date of the change, it will be treated as a new lease.

2. The consolidated company is the lessee

• Except for the lease payments of low-value underlying asset leases and short-term leases that are subject to the applicable recognition exemption, the lease payments are recognized as expenses during the lease period on a straight-line basis, and all other leases are opened in the lease. The right-of-use assets and lease liabilities are recognized on the inception date.

• The right-of-use asset is initially measured at cost, which comprises the initial measurement of the lease liabilities, adjusted for any lease payments made at or before the commencement date, less any lease incentives received, plus any initial direct costs incurred and an estimate of costs needed to dismantle, remove and restore the underlying assets and the subsequent measures are measured at the cost after deducting the accumulated depreciation and accumulated impairment losses, and the remeasurement amount of the lease liability is adjusted.

• Except for those that meet the definition of investment real estate, right-of-use assets are separately expressed in the consolidated balance sheet, and the recognition and balance of right-of-use assets that meet the definition of investment real estate, please refer to Note 4 (9) Accounting Policy for Investment Real Estate.

The right-of-use asset adopts a straight-line basis from the lease start date to the end of its useful life or the lease period expires, the earlier of the two shall be depreciated.

The lease liability is originally measured at the present value of the lease payment. If the implicit interest rate of the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, use the lessee to increase the borrowing interest rate.

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Subsequently, the lease liability is measured on the amortized cost basis using the effective interest method, and the interest expense is amortized during the lease period. If the lease period or the index or rate used to determine the lease payment changes resulting in a change in the future lease payment, the consolidated company will continue measure the lease liability and relatively adjust the right-of-use asset. However, if the book value of the right-of-use asset has been reduced to zero, the remaining remeasured amount is recognized in the profit and loss. For lease modifications that are not treated as separate leases, the scope of the lease is reduced The remeasurement of the lease liability is to reduce the right-of-use asset and recognize the profit and loss of the partial or full termination of the lease; the remeasurement of the lease liability for other modifications is to adjust the right-of-use asset, and the lease liability is separately expressed in the consolidated balance sheet.

(16) Employee benefits

1. Short-term employee benefits:

• Short-term employee benefits are measured by the expected non-discounted amount of cash paid, and are recognized as expenses when the relevant services are provided.

2. Retirement fund:

• (1) Definite allocation plan:

  • For the definite allocation plan, the amount of the retirement fund that should be allocated is recognized as the current pension expense on the basis of accrual. The advance payment is recognized as an asset within the scope of refundable cash or reduced future payments.

• (2) Definite benefit plan:

  • The net obligation under the definite benefit plan is calculated by discounting the amount of future benefits earned by the employee for the current or past services, and the current value of the definite benefit obligation on the balance sheet date minus the fair value of the plan assets. The net obligation to determine benefits is calculated by the actuary every year using the projected unit benefit method, and the discount rate is determined by referring to the market yield rate of high-quality corporate bonds that are consistent with the currency and period of the determined benefit plan on the balance sheet date; in high-quality corporate bonds For countries with no deep market, the market yield rate of government bonds (at the balance sheet date) is used. The remeasurement amount generated by the determined benefit plan is recognized in other comprehensive profit and loss in the current period and included in the retained surplus. The related expenses of the previous service cost are immediately recognized as a loss.

3. Retirement fund:

• Resignation benefits are benefits provided when the employee's employment is terminated before the normal retirement date or when the employee decides to accept the company's welfare invitation in exchange for termination of employment. The company recognizes expenses when the offer for resignation benefits can no longer be revoked or when the relevant reorganization costs are recognized earlier, and it is not expected that the benefits that are fully paid off within 12 months after the balance sheet date should be granted discount.

(17) Income taxes

1. Current income tax

The consolidated company determines the current income (loss), based on which to calculate the payable (recoverable) income tax.

The undistributed surplus calculated in accordance with the provisions of the Income Tax Law of the Republic of China is subject to additional income tax, recognized by the resolution of the Shareholders’ annual meeting.

The adjustment of income tax payable in previous years is included in current income tax.

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2. Deferred income tax

• Deferred income tax is calculated based on the temporary difference between the book value of assets and liabilities and the tax basis for calculating taxable income. Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when there is likely to be taxable income for deduction of temporary differences or loss deductions.

Taxable temporary differences related to investment in subsidiaries are recognized as deferred income tax liabilities, but if the consolidated company can control the timing of the reversal of the temporary difference, and the temporary difference is likely to not revert in the foreseeable future except. The deductible temporary differences related to this type of investment are recognized as deferred income tax only if it is likely to have sufficient taxable income to realize the temporary difference, and within the scope of expected return in the foreseeable future assets.

The carrying amount of deferred income tax assets is reviewed on each balance sheet date, and the carrying amount is reduced for those that are no longer likely to have sufficient taxable income to recover all or part of their assets. Those that are not previously recognized as deferred income tax assets are also reviewed on each balance sheet date and are likely to generate taxable income for the recovery of all or part of their assets in the future, increase the carrying amount.

Deferred income tax assets and liabilities are measured by the tax rate for the current period of expected debt settlement or asset realization. The tax rate is based on the tax rate and tax law that has been legislated or substantively legislated on the balance sheet date, and the deferred tax liabilities and assets are measured It reflects the tax consequences arising from the manner in which the consolidated company expects to recover or settle the book value of its assets and liabilities on the balance sheet date.

3. Current and deferred income tax

Current and deferred income taxes are recognized in profit or loss, but current and deferred income taxes related to items recognized in other comprehensive income or directly included in equity are recognized in other comprehensive profit or loss may be directly included in equity.

5. Critical Accounting Judgments and Key Sources of Estimation and Assumption Uncertainty

When the consolidated company adopts the accounting policies described in Note 4, for those who cannot easily obtain information about the carrying amounts of assets and liabilities from other sources, the management must base on historical experience and other relevant factors to make relevant judgments, estimates and assumptions. The estimates and related assumptions are based on historical experience and other factors deemed relevant. Actual results may differ from estimates. Estimates and basic assumptions are continuously reviewed. If the revision of the estimate only affects the current period, it shall be recognized in the current period of the revision of the accounting estimate. If the revision of the accounting estimate affects both the current period and the future period, it shall be recognized in the current period and the future period of the estimate revision.

The main sources of uncertainties in major accounting judgments, estimates and assumptions of the consolidated company are as follows:

(1) Evaluation of inventories

Since inventory must be priced at the lower of cost and net realizable value, the merging company must use judgment and estimation to determine the net realizable value of the inventory at the end of the financial reporting period.

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Due to the rapid changes in the industry, the consolidated company assesses the amount of inventory at the end of the financial reporting period due to normal depletion, obsolescence, or no market sales value, and offsets the inventory cost to the net realizable value. This inventory evaluation is mainly based on the product demand in a specific period in the future, which may cause major changes.

(2) Estimated impairment of financial assets

The estimated impairment of accounts receivable is based on the assumption of default rate and expected loss rate of the consolidated company. The consolidated company considers historical experience, current market conditions and forward-looking information to make assumptions and select input values for impairment assessment. For important assumptions and input values used, please refer to Note 6 (3). If the actual future cash flow is less than expected, it may be incurred significant impairment losses.

- (3) Assessment of impairment of non financial assets

In the process of asset impairment assessment, the consolidated company must rely on subjective judgments and determine the independent cash flow of a specific asset group, the number of years of asset durability, and the possible future income and expenses of a specific asset group based on the use of assets and industrial characteristics. Changes or estimated changes brought about by the company's strategy may cause significant impairment or reversal of recognized impairment losses in the future.

(4) The realizability of deferred income tax assets

Deferred income tax assets are recognized when there is likely to be sufficient taxable income in the future to deduct temporary differences. When assessing the feasibility of deferred income tax assets, significant accounting judgments and estimates of the management must be involved, including the expected future sales revenue growth and profit rate, tax exemption period, applicable income tax deductions and tax regulations and cost-effective assumption. Any changes in the global economic environment, industrial environment and laws and regulations may cause major adjustments to deferred income tax assets.

6. Description of Significant Accounts

(1) Cash and cash equivalents

Cash on hand Demand deposits and checking account Cash equivalents (Investments with original maturity within three months) Bank Time deposit Total	December 31, 2024 $ 933 130,947 16,395 $ 148,275	December 31, 2023
		$ 979 133,819 15,810 $ 150,608

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(2) Financial assets at amortized cost

Current Domestic investment Time deposits with original maturity more than three months Restricted timedeposits Foreign investment Time deposits with original maturity more than three months Total Interest rate range	December 31, 2024 $ 3,500 16,395 97,064 $ 116,959 1.00％～4.55％	December 31, 2023
		$ 3,500 － 22,671
		$ 26,171 1.45％～1.565％

Please refer to Note 8 for information on financial assets measured at amortized cost - current guarantees.

(3) Net notes and accounts receivable

Notes receivable (Listed on other current assets) Occurs due to business Less: loss allowance Accounts receivable Measured at amortized cost Total book amount Less: loss allowance	December 31, 2024 $ 3,718 (3,413) $ 305 $ 786,644 (71,265) $ 715,379	December 31, 2023
		$ 3,709 (3,413)
		$ 296
		$ 553,303 (5,069) $ 548,234

1. In principle, the credit investment period of the company to customers is 30 to 120 days after the invoice date. In order to reduce credit risk, the management of the company assigns a dedicated team to credit limit determination, credit approval and other monitoring procedures to ensure overdue accounts receivable appropriate actions have been taken for the recovery. In addition, the company will gradually review the recoverable amount of accounts receivable to ensure that the accounts receivable that cannot be recovered have been properly deducted.

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2. The company recognizes the allowance loss of accounts receivable based on the expected credit loss during the duration. The expected credit loss during the existence period takes into account the past default records of customers and the current financial situation, industrial economic situation, and also considers the overall economic and industrial outlook. Separate individual customers into different risk groups and recognize allowance losses based on the expected loss rate of each group lost.

3. If there is evidence that the counterparty of the transaction is facing serious financial difficulties and the company cannot reasonably expect the recoverable amount, the company directly writes off the relevant accounts receivable, but will continue to pursue recourse activities. The amount recovered due to recourse is recognized in profit and loss.

4. The allowance loss for accounts receivable (including related parties) of the company is as follows:

Expected credit loss rate Carrying amount Loss allowance for lifetime expected credit losses Amortized cost Expected credit loss rate Carrying amount Loss allowance for lifetime expected credit losses Amortized cost			December 31, 2024	December 31, 2024
	Not past due	Past due 1~30 days	Past due 31~60 days	Past due 61~120 day	Past due over 121 days	Total
	0.18％～ 0.32％ $ 532,443 (1,675) $ 530,768	0.20％～ 0.36％ $ 97,876 (351) $ 97,525			0.30％～ 100％ $ 121,317 (註) (69,088) $ 52,229	$ 786,644 (71,265) $ 715,379
	Not past due	Past due 1~30 days	Past due 31~60 days	Past due 61~120 day	Past due over 121 days	Total
	0.33％～ 0.83％ $ 423,097 (1,544) $ 421,553	0.41％～ 1.02％ $ 82,633 (346) $ 82,287	0.48％～ 1.21％ $ 34,625 (167) $ 34,458	0.56％～ 1.60％ $ 10,877 (1,241) $ 9,636	0.72％～ 100％ $ 66,404 (66,104) $ 300	$ 617,636 (69,402) $ 548,234

Note: The consolidated company holds a security deposit of NT$60,281 thousand for accounts receivable that are overdue for more than 121 days, so no provision for loss is made.

26

5. The information on the changes in allowance for doubtful accounts and notes receivable (including related parties) is as follows:

	(including related parties) is as follows:
(4)	Balance at the beginning of the period Impairment losses recorded in the current period Write-off amount in the current period Balance at the end of the period Balance at the beginning of the period Reversal of impairment losses in the current period Write-off amount in the current period Balance at the end of the period Other accounts receivable Operating lease receivable Refundable business tax Other accounts receivable-other Other accounts receivable- related party Subtotal Less: loss allowance Total	2024
		Notes receivable Accounts receivable $ 3,413 $ 69,402 － 4,089 － (2,226) $ 3,413 $ 71,265 2023	Accounts receivable
		Notes receivable $ 3,413 － － $ 3,413 December 31, 2024 $ 15,539 10,274 24,016 － 49,829 (23,587) $ 26,242	Accounts receivable
			$ 98,393 (22,120) (6,871) $ 69,402 December 31, 2023
			$ 11,339 12,084 601 18,120
			42,144 (18,067) $ 24,077

The information on the changes in allowance for doubtful accounts for other receivables is as follows:

Balance at the beginning of the period Reclassification of the period Impairment Loss in the current period Exchange rate impact Balance at the end of the period	2024 $ 18,067 5,821 (513) 212 $ 23,587	2023
		$ 15,290 － 2,903 (126) $ 18,067

27

(5) Inventories

	December 31, 2024	December 31, 2023
Finished goods	$ 148,640	$ 183,764
Work in process	211,722	239,304
Raw materials	241,211	254,295
Inventory in transit	1,449	9,591
Total	$ 603,022	$ 686,954
The current period recognized inventory-related expenses are as		follows:
	2024	2023
Inventories sold	$ 1,232,853	$ 1,494,787
Gain from price recovery of inventory	(77,263)	(49,981)
Unallocated Manufacturing Overhead	58,661	68,561
Income from Sale of Scrap	(20,784)	(42,037)
Others	228	151
Total	$ 1,193,695	$ 1,471,481

The increase in the net realizable value of inventory in 2024 and 2023 primarily resulted from the sale of inventory for which valuation allowances had been recognized in previous years.

(6) Investments accounted for using equity method

Investment in associated companies

Significant associated company Non-listed company Intelligent Information Security Technology INC. Individually insignificant associated companies Foreign unlisted (cabinet) companies Shenzhen Lihuasheng Technology Co., Ltd.	December 31, 2024 $ 36,000 － $ 36,000	December 31, 2023 $ 107,663 － $ 107,663

28

1. As of the balance sheet date, the ownership interest and voting percentage in subsidiaries and associated companies of the Company are as follows:

==> picture [394 x 72] intentionally omitted <==

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

Company Name December 31, 2024 December 31, 2023
Intelligent Information Security
24.54 ％ 24.54 ％
Technology INC.
Shenzhen Lihuasheng Technology
－
32.00 ％
Co., Ltd.
----- End of picture text -----

Please refer to Table 5 and 6 for information regarding the nature of business, principal business locations, and countries of registration of the invested subsidiaries and associate companies. Table 5 contains details about the invested company names, locations, etc., while Table 6 provides information on investments in mainland China.

2. Significant associated company:

• The management of our company, aiming to capitalize on global IoT cybersecurity opportunities, resolved at the board meeting on March 23, 2023, to invest in Intelligent Information Security Technology INC. (hereinafter referred to as "Intelligent Information Security"). We paid an investment amount of NT$120,000 thousand in April 2023, holding a 24.54% stake in Intelligent Information Security, which grants us significant influence over its operations. We evaluate our investment in Intelligent Information Security using the equity method.

The investment agreement and commitment agreement with the major original shareholders of Intelligent Information Security contain the following key provisions:

• (1) The major original shareholders of Intelligent Information Security are allowed to recruit key talents necessary for the operation and development of Intelligent Information Security, and only then are they permitted to transfer technical shares under their names. However, prior written consent from our company must be obtained before any such transfer.

• Additionally, within two years after our company's investment, the major original shareholders of Intelligent Information Security are prohibited from selling, entrusting, transferring, gifting, pledging, or otherwise encumbering their shares to third parties. Furthermore, within two to five years after our company's investment, they are restricted from selling, entrusting, transferring, gifting, pledging, or otherwise encumbering more than 30% of their shares to third parties. Shares transferred within the 30% limit cannot be sold to competitors of Intelligent Information Security.

Our company has the right of first refusal when the major original shareholders of Intelligent Information Security intend to sell, transfer, or dispose of their shares. When transferring shares within five years after our company's investment, the major original shareholders must ensure that the third-party buyer accepts the same restrictions as outlined in the original commitment agreement and provide a commitment letter consistent with the obligations in the original agreement.

• (2) Apart from the aforementioned restrictions on transfer, once the stipulated transfer restriction period has elapsed, the major original shareholders of Intelligent Information Security must promptly notify our company of any intention to sell, transfer, or dispose of their shares to third parties. Upon receiving such notice, our company has 30 days to notify the major original shareholders of Intelligent Information Security in writing, specifying the decision to jointly sell the shares to the same third party under the same conditions. If the major original shareholders of Intelligent Information Security receive a joint sale notice from our company, they must specify the number of shares they intend to sell within 30 days, and they must sell these shares together to the third party.

However, if the total number of shares proposed for sale by both parties exceeds the number of shares the third party intends to purchase, the number of shares proposed for sale by each party should be reduced in proportion to their respective shareholding until it matches the number of shares the third party intends to purchase.

29

• (3) The major original shareholders of Intelligent Information Security who contributed non-cash investments agree that within two years of our company's investment and the issuance of shares, in the event of bankruptcy, dissolution, liquidation, sale of all or most of the company's assets, merger with another company, or similar events involving Intelligent Information Security, they will not participate in the distribution nor request cash payment for their shares. Furthermore, when distributing surplus assets, our company is entitled to participate in the distribution in proportion to the amount of cash investment made by each shareholder.

• (4) The summarized financial information below is prepared based on the consolidated financial statements of associated enterprises in accordance with IFRSs, and adjustments have been made to reflect investments accounted for using the equity method.

Intelligent Information Security Technology INC.

Current assets Non-current assets Current liabilities Non-current liabilities Equity Company's ownership percentage Equity held by the company Patent rights Investment carrying amount Operating revenue Net loss for the period Total comprehensive income	December 31, 2024 $ 42,126 17,775 (8,000) (537) $ 51,364 24.54％ $ 12,605 23,395 $ 36,000 2024 $ － $ (60,696) $ (60,696)	December 31, 2023
		$ 102,484 13,618 (3,332) (710)
		$ 112,060
		24.54％
		$ 27,499 80,164 $ 107,663 2023
		$ －
		$ (19,823) $ (19,823)

3. The general information of the individual affiliated companies that are not material is as follows:

follows:
Share of the consolidated company Net profit (loss) for the period Other comprehensive gains and losses Total comprehensive profit and loss	2024 $ 2,820 － $ 2,820	2023
		$ (10,433) 985 $ (9,448)

4. On November 7, 2024, the board of directors of Optimax Technology (Suzhou) CO., LTD., a subsidiary of the Company, passed a resolution to sell 13% of the equity of Shenzhen Lihuasheng Technology Co., Ltd. to Shenzhen Hexinchen Investment Development Co., Ltd. in response to changes in the mainland market and to save expenses. The change was completed on December 9, 2024. The shareholding ratio of Shenzhen Lihuasheng Technology Co., Ltd. has been reduced from 32% to 19%, and it no longer has a significant influence. Therefore, it has been transferred to financial assets measured at fair value through profit and loss.

30

(7) Property, plant and equipment

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

2024
Balance at Effect of Balance at
Item January 1, Additions Disposals Reclassification exchange rate December 31,
2024 changes 2024
Cost
－ － － －
Land $ 364,697 $ $ $ $ $ 364,697
－
Buildings 2,493,034 1,228 (65,107) (51,631) 2,377,524
Machinery 3,144,207 14,334 (275,721) 9,280 2,427 2,894,527
Transportation 102,801 － (742) － 35 102,094
equipment
Office equipment 109,642 836 (14,015) － 419 96,882
Other equipment 39,135 314 (6,471) － 47 33,025
－ － －
Work in Progress 21,267 (9,280) 11,987
Sub-total 6,274,783 16,712 (362,056) (51,631) 2,928 5,880,736
Accumulated
depreciation
－
Buildings 1,463,145 36,329 (62,548) (23,136) 1,413,790
－
Machinery 3,004,401 7,897 (266,382) 2,271 2,748,187
Transportation 98,326 352 (729) － 10 97,959
equipment
Office equipment 100,656 281 (13,278) － 375 88,034
Other equipment 31,584 493 (6,352) － 42 25,767
Sub-total 4,698,112 45,352 (349,289) (23,136) 2,698 4,373,737
Accumulated
impairment
Buildings 17 － － － － 17
Machinery 11,589 － (4,316) － 74 7,347
Transportation － － － －
1,157 1,157
equipment
－ － －
Office equipment 2,707 (16) 2,691
Other equipment 28 － － － － 28
Sub-total 15,498 － (4,332) － 74 11,240
Total $ 1,561,173 $ (28,640) $ (8,435) $ (28,495) $ 156 $ 1,495,759
----- End of picture text -----

31

2023

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

Balance at Effect of Balance at
Item January 1, Additions Disposals Reclassification exchange rate December 31,
2023 changes 2023
Cost
－ － － －
Land $ 364,697 $ $ $ $ $ 364,697
Buildings 2,495,494 545 (3,005) － － 2,493,034
－
Machinery 3,645,194 13,790 (513,475) (1,302) 3,144,207
Transportation 104,067 845 (2,093) － (18) 102,801
equipment
－
Office equipment 108,758 1,216 (107) (225) 109,642
－
Other equipment 42,090 5,185 (8,116) (24) 39,135
－ － －
Work in Progress 16,067 5,200 21,267
Sub-total 6,760,300 37,648 (526,796) 5,200 (1,569) 6,274,783
Accumulated
depreciation
－ －
Buildings 1,429,266 36,749 (2,870) 1,463,145
－
Machinery 3,500,521 8,274 (503,175) (1,219) 3,004,401
Transportation 99,971 374 (2,005) － (14) 98,326
equipment
Office equipment 100,578 380 (101) － (201) 100,656
Other equipment 39,200 458 (8,052) － (22) 31,584
－
Sub-total 5,169,536 46,235 (516,203) (1,456) 4,698,112
Accumulated
impairment
Buildings 17 － － － － 17
－ －
Machinery 11,667 (38) (40) 11,589
Transportation － － －
1,158 (1) 1,157
equipment
－ － － －
Office equipment 2,707 2,707
Other equipment 28 － － － － 28
－ －
Sub-total 15,577 (39) (40) 15,498
Total $ 1,575,187 $ (8,587) $ (10,554) $ 5,200 $ (73) $ 1,561,173
----- End of picture text -----

1. The real property, plant and equipment of the company are depreciated based on the following durability years:

Housing and construction Plant main building 9 to 50 years Electro mechanical power equipment 14 to 16 years Other 2 to 18 years Mechanical equipment 1 to 24 years Other equipment 2 to 17 years

2. Details of property, plant and equipment are pledged as collateral of long-term borrowings and loans, please refer to Note 8.

32

(8) Leasing arrangements- lessee

1.Right-of-use assets

• (1) The carrying amount of right-of-use assets and the depreciation charge are as follows:

Carrying amount of right-of-use asset Land Transportation equipment Office equipment Total Depreciation expense of right-of-use assets Land Transportation equipment Office equipment Total	December 31, 2024 $ 7,709 2,310 1,267 $ 11,286 2024 $ 2,570 1,293 266 $ 4,129	December 31, 2023
		$ 10,279 1,536 1,533 $ 13,348 2023
		$ 2,570 1,250 411 $ 4,231

The consolidated company leases the land located in the Southern Science Industrial Park and acquires the land use right contract in the Suzhou High-tech Zone of the People's Republic of China is sub-leased in the form of operating leases, and the relevant use right assets are listed as investment real estate. Please refer to Note 6 (10). The above-mentioned amount of right-of-use assets does not include right-of-use assets that meet the definition of investment real estate.

• (2) The additions of the right-of-use assets of the company in 2024 and 2023 are respectively NT$2,067 thousand and NT$1,600 thousand.

• (3) Except for the addition and recognition of depreciation expenses listed above, there is no significant sublease or depreciation of the right-of-use assets of the company in 2024 and 2023.

2. Leasing liabilities

December 31, 2024 Carrying amount of leasing liabilities Current $ 3,851 Non-current $ 8,750	December 31, 2023
	$ 3,484 $ 10,701

33

The discount rate ranges for lease liabilities are as follows:

Land Transportation Equipment Office Equipment	December 31, 2024 2.5580％ 1.8513％~2.5580％ 2.5580％	December 31, 2023
		2.5580％ 1.8513％~2.5580％ 2.5580％

3. Important rental activities and terms

The assets leased by the company include land, official vehicles and photocopiers. The contract period usually ranges from 3 to 6 years. The lease is based on editors, with various terms and conditions, except that the tribute of the leased goods cannot be used for lending and holding. No other restrictions are imposed.

4. Other rental information

tal information
Short-term rental expenses Low-value asset lease expenses Total cash outflow from lease	2024 $ 108 $ 26 $ 4,109	2023
		$ 61
		$ 24 $ 3,781

The company chooses to pay for transportation equipment that meets short-term leases and low-value asset leases. The recognition exemption is applicable to certain office equipment leases under lease, and the recognition of such leases is not relevant. Related right-of-use assets and lease liabilities.

(9) Leasing arrangements- lessor

1. The assets leased by the consolidated company include land, buildings, machinery and equipment, etc., and the contract period ranges from 1 to 7 years. The lease contract is negotiated individually and contains various terms and conditions. In order to preserve the use of leased assets, the lessor shall not sublet or pledge all or part of the leased object and agreed matters.

2. The benefits recognized by the company based on the operating lease contract are as follows:

Rental income	2024 $ 88,029	2023 $ 84,481

3. The period ranges recognized by the company based on the operating lease contract are as follows:

The 1st year The 2nd year The 3th year The 4th year The 5th year Over 5 years Total	December 31, 2024 $ 89,898 85,225 20,863 14,040 10,470 － $ 220,496	December 31, 2023
		$ 77,845 77,282 82,207 43,594 36,699 104,045 $ 421,672

34

(10) Investment property

==> picture [507 x 522] intentionally omitted <==

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

2024
Balance at Effect of Balance at
Item January 1, Additions Disposals Reclassification exchange rate December 31,
2024 changes 2024
Cost
－ － －
Land $ 133,248 $ 26,662 $ $ $ $ 159,910
Buildings 1,141,027 23,884 (650) 51,631 14,296 1,230,188
Right-of-use assets 19,013 － － － 663 19,676
Sub-total 1,293,288 50,546 (650) 51,631 14,959 1,409,774
Accumulated
depreciation
Buildings 522,724 26,530 (630) 23,136 7,601 579,361
Right-of-use assets 2,546 524 － － 92 3,162
Sub-total 525,270 27,054 (630) 23,136 7,693 582,523
Accumulated
impairment
Buildings 26 － － － － 26
Total $ 767,992 $ 23,492 $ (20) $ 28,495 $ 7,266 $ 827,225
2023
Balance at Effect of Balance at
Item January 1, Additions Disposals Reclassification exchange rate December 31,
2023 changes 2023
Cost
－ － － －
Land $ 133,248 $ $ $ $ $ 133,248
－ － －
Buildings 1,148,696 (7,669) 1,141,027
－ － －
Right-of-use assets 19,369 (356) 19,013
－ － －
Sub-total 1,301,313 (8,025) 1,293,288
Accumulated
depreciation
－ －
Buildings 500,784 25,947 (4,007) 522,724
Right-of-use assets 2,075 517 － － (46) 2,546
－ －
Sub-total 502,859 26,464 (4,053) 525,270
Accumulated
impairment
Buildings 26 － － － － 26
－ －
Total $ 798,428 $ (26,464) $ $ $ (3,972) $ 767,992
----- End of picture text -----

1. The investment real property is depreciated based on the following durability years:

Buildings

Plant main building 9 to 50 years Electro mechanical power equipment 14 to 16 years Other 2 to 18 years Right-of-use assets 37 years

35

2. The fair value of investment real estate held by the company is evaluated by independent experts on the date of each balance sheet using the third-level input value. The aforementioned evaluation of the main building of the plant and the auxiliary facilities of the building are evaluated using the cost method and the fixed rate method (declining balance method). The unobservable input values used include discount rate and depreciation rate, among others.

The fair value of investment real estate of the company on December 31, 2024 and 2023 is as follows:

Fair value	December 31, 2024 $ 1,301,157	December 31, 2023 $ 1,226,282

3. Rental income and direct operating expenses of the investment real estate of the company:

Rental income from investment real estate Direct operating expenses incurred by investment real estate that generates rental income in the current period	2024 $ 86,227 $ 30,947	2023
		$ 82,525 $ 30,614

4. The company acquired a land in 2022, with a value of NT$18,248,000, but due to its designation as agricultural land, the transfer of ownership cannot be registered under the company's name. As a result, the land is registered under the name of the company's chairman, and a contract for registered proxy is signed to clarify the rights and obligations of both parties.

5. Please refer to Note 8 for information on guarantees provided by investment real estate.

(11) Other non-current assets

Intangible assets Prepaid equipment Refundable deposits Long-term receivables - related party Prepayment of investment Total	December 31, 2024 $ 414 932 6,975 － 120,000 $ 128,321	December 31, 2023
		$ 73 672 6,974 290 － $ 8,009

On December 19, 2024, the Company's Board of Directors approved its investment in Jubilee International Biomedical Co., Ltd. The base date for capital increase of Jubilee International Biomedical Co., Ltd. is set on January 2, 2025. The company has paid an investment of NT$120,000 thousand on December 25, 2024, and participated in the subscription of 15,000 thousand shares, with a shareholding ratio of 20.697%.

36

(12) Short-term borrowings

Collateral borrowings Interest rate	December 31, 2024 $ 215,075 1.600％~2.725％	December 31, 2023
		$ 98,097 1.3742％~2.5％

Please refer to Note 8 for the provision of assets as guarantees for short-term loans.

(13) Accounts payable

Account payable	December 31, 2024 $ 120,743	December 31, 2026 $ 134,327

1. The average de-account period of payables is 30 to 180 days. The company has a financial risk management policy to ensure that all payables are repaid within the pre-agreed credit period.

2. The accounts payable and other accounts payable of the company exposed to exchange rate and liquidity risks for disclosure, please refer to Note 6 (28).

(14) Other payables

payables
Payable salary and bonus Payable remuneration to employees and directors Payable insurance premium Pension payable Interest payable Equipment payment payable Commission payable Others Total	December 31, 2024 $ 68,621 7,703 6,258 2,421 1,863 3,067 28,964 47,792 $ 166,689	December 31, 2023
		$ 60,571 7,481 6,121 2,347 2,256 1,093 21,221 51,336 $ 152,426

Other main accounts payable are consist of house tax, rent, service fee, water, electricity and gas, freight, import fees, export fees and repair fees.

(15) Liability reserve-current

Employee benefit liability provision	December 31, 2024 $ 16,565	December 31, 2023 $ 15,810

1. Employee benefit liability provision is an assessment of employees’ vested leave rights. It is reversed at the time of international vacation or cash payment.

2. The aforesaid reserves are not discounted because they are short-term or have little impact on discounting.

37

- (16) Long term borrowings

Medium and long-term bank mortgage loans Less: part due within one year Long-term borrowings Interest rate	December 31, 2024 $ 1,001,600 (21,600) $ 980,000 2.675％～2.72％	December 31, 2023
		$ 1,210,000 －
		$ 1,210,000 2.6％

1. Due to overall operational and financial planning considerations, the Company entered into a five-year loan agreement with Taiwan Cooperative Bank on August 22, 2024. The total credit line is NT$270,000 thousand. The loan is to be repaid over 20 installments, with each installment period being three months. For the 1st to the 10th installments, the Company will repay NT$5,400 thousand of principal per installment; for the 11th to the 19th installments, the Company will repay NT$10,800 thousand of principal per installment. The remaining loan balance will be repaid in full upon maturity on August 22, 2029. As of December 31, 2024, the outstanding loan balance was NT$194,600 thousand.

2. Due to overall operations and financial planning, on September 27, 2023, the Company entered into a 3-year loan agreement with Sunny Bank for a total amount of NT$1,360,000 thousand. Repayments are scheduled every 3 months for a total of 12 installments. Each installment from the 1st to the 11th consists of NT$30,000 thousand principal repayment, with the remaining outstanding balance due in a lump sum at maturity, with the option for early repayment. The maturity date is October 6, 2026. The Company's loan balances were NT$807,000 thousand as of December 31, 2024, and NT$1,210,000 thousand as of December 31, 2023.

3. For details regarding assets pledged as collateral for long-term loans, please refer to Note 8.

(17) Pension

1. Defined contribution plan

Since July 1, 2005, the company has established Retirement method with defined contribution plan which is applicable to employees of this nationality. Our company and domestic Subsidiaries choose to apply the labor pensions stipulated in the "Labor Pensions Ordinance" for employees. In the system, labor pension is paid to employees of the Labor Insurance Bureau at 6% of the salary monthly. The payment of the employee’s pension is based on the employee’s pension account and the amount of accumulated income. The Company recognized retirement benefit expenses related to defined contribution plans amounting to NT$14,630 thousand and NT$14,597 thousand for the years ended in 2024 and 2023, respectively.

38

2. Defined benefit plan

In accordance with the regulation of the Labor Standards Law, the company has established a retirement method that defined benefits plan which is applicable of service years to all regular employees before the implementation of the Labor Pension Regulations on July 1, 2005, and the employees who choice to continue after the implementation of the Labor Pension Regulations. Employees who meet the retirement conditions, the pension payment is calculated based on the years of service and the average salary in the 6 months before retirement. The service years within 15 years (inclusive) will be given 2 bases for every full year, more than 15 years of service will be given 1 base for each full year, but the cumulative maximum is 45 bases limited. The company allocates a retirement fund of 2% of the total salary on a monthly basis, and deposits it in a special account in the Bank of Taiwan in the name of the Labor Retirement Reserve Supervision Committee. In addition, the company estimates the balance of the labor retirement reserve in the preceding paragraph before the end of each year. If the balance is not enough to pay the next year, the estimated amount of retirement pension for the employees who meet the retirement conditions in the next year will be calculated based on the foregoing calculation. This special account is managed by the Labor Fund Utilization Bureau of the Ministry of Labor, and the company has no right to influence investment management strategies.

The confirmed benefit plan amounts recognized in the balance sheet are as follows:

Present value of defined benefit obligation Fair value of planned assets Net defined benefit	December 31, 2024 $ (67,567) 80,907 $ 13,340	December 31, 2023
		$ (65,959) 72,387 $ 6,428

The changes in net defined benefit are as follows:

Balance at January 1, 2024 Service cost Current service cost Interest (expense) income Recognized in profit and loss Remeasurement Return on plan assets (excluded the amount included in interest income or expenses) Impact of changes in demographic assumptions Impact of changes in financial assumptions Experience adjustment Recognized in other comprehensive income Contributed Retirement Fund Pay pension Balance at December 31, 2024	Present value of defined benefit obligation $ (65,959) (48) (825) (873) － － 42 (1,287) (1,245) －	Fair value of planned assets $ 72,387 － 940 940 6,247 － － － 6,247 1,843	Net defined benefit
			$ 6,428
			(48) 115
			67
			6,247 － 42 (1,287)
			5,002
			1,843
	510 $ (67,567)	(510) $ 80,907	－ $ 13,340

39

Balance at January 1, 2023 Service cost Current service cost Interest (expense) income Recognized in profit and loss Remeasurement Return on plan assets (excluded the amount included in interest income or expenses) Impact of changes in demographic assumptions Impact of changes in financial assumptions Experience adjustment Recognized in other comprehensive income Contributed Retirement Fund Pay pension Balance at December 31, 2023	Present value of defined benefit obligation $ (66,200) (90) (985) (1,075) － (679) (1,827) (301)	Fair value of planned assets $ 69,290 － 1,078 1,078 374 － － －	Net defined benefit
			$ 3,090
			(90) 93
			3
			374 (679) (1,827) (301)
	(2,807) － 4,123 $ (65,959)	374 5,768 (4,123) $ 72,387	(2,433)
			5,768
			－ $ 6,428

The company is exposed to the following risks due to the pension system of the Labor Standards Law:

• (1) Investment risk: The Labor Fund Utilization Bureau of the Ministry of Labor invests labor retirement funds in domestic (foreign) equity securities through its own use and entrusted operations. Subject to debt securities and bank deposits, but in accordance with the provisions of the Labor Standards Law, the overall return on assets shall not be lower than the local bank’s 2-year fixed deposit interest rate: if the interest rate is lower than that, the state treasury shall make up for it.

• (2) Interest rate risk: The decline in the interest rate of government bonds will increase the present value of the determined welfare obligation, but the debt investment return of the planned asset will also increase. The two are in conflict and the impact of fixed benefit liabilities has a partial offset effect.

• (3) Salary risk: The calculation of the present value of the defined benefit obligation is based on the future salary of the plan members. Therefore, the increase in the salary of the plan members will increase the present value of the defined benefit obligation.

The main assumptions of actuarial evaluation are listed as follows:

Discount Rate Expected salary increase rate	December 31, 2024 1.500％ 2.2500％	December 31, 2023
		1.250％ 2.0000％

40

The changes in the main actuarial assumptions that are adopted on December 31, 2024 and 2023, will increase (decrease) the present value of defined benefit obligations by the following amounts:

amounts:
December 31, 2024 Discount Rate Expected salary increase rate December 31, 2023 Discount Rate Expected salary increase rate	Actuarial assumptions increased by 0.25% $ (1,739) $ 1,758 Actuarial assumptions increased by 0.25% $ (1,834) $ 1,859	Actuarial assumptions reduced by 0.25%
		$ 1,806 $ (1,702) Actuarial assumptions reduced by 0.25%
		$ 1,908 $ (1,796)

The sensitivity analysis above is based on the analysis of a single hypothesis while other assumptions remain unchanged the impact of changes. In practice, many changes in assumptions may be linked. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities of the balance sheet. The methods and assumptions used in the preparation of the sensitivity analysis in this period are the same as those in the previous period.

As of December 31, 2024 and 2023, the planned provision amount and the weighted average duration of the retirement plan are as follows:

Expected amount to be withdrawn within 1 year Determining the average maturity of benefit obligations period mon stock Rated equity Issued share capital	December 31, 2024 $ － 10.5 years December 31, 2024 $ 10,000,000 $ 1,690,000	December 31, 2023
		$ 5,676 11.3 years December 31, 2023
		$ 10,000,000 $ 1,700,000

(18) Equity

1. Common stock

On December 19, 2024, the Board of Directors resolved to reduce the capital by 1,000 thousand shares and cancel treasury shares for a cancellation amount of NT$32,393 thousand. December 19, 2024 was taken as the base date for the capital reduction, and the relevant statutory registration procedures have been completed.

41

As of December 31, 2024 and December 31, 2023, the Company's nominal number of shares is 1,000,000 thousand shares, each with a par value of NT$10, and the issued shares are 169,000 thousand shares and 170,000 thousand shares, respectively.

2. Retained earnings and Dividend policy

• (1) According to the regulation of the company's articles of incorporation, if there is a surplus in the annual final accounts, tax should be paid first to make up for the accumulated losses, and 10% of the second allocation is the statutory surplus reserve, but the accumulated amount has reached the paid-in capital, it may no longer be listed, and the rest may be approved by shareholders when necessary. The board of directors plans to allocate or revert the special surplus reserve according to the resolution of the meeting or according to the law; if there is a surplus and the undistributed surplus accumulated in the previous year, the board of directors plans to allocate the surplus, the proposal is submitted to the shareholders meeting for resolution to distribute dividends to shareholders.

• (2) The company’s earnings distribution depends on the company’s current and future development plan, investment environment, fund requirements, and domestic and international competition and the interests of shareholders, the dividend policy of the Company is to set aside no less than 30% of distributable earnings as shareholders’ dividends and bonuses. However, in case the accumulated distributable earnings is less than 30% of paid-in capital, the Company may choose not to distribute dividends. The board of directors drafts the surplus based on the operating results and capital planning situation. At the time, dividends to common shareholder may be distributed by way of combination of cash dividend and stock dividend provided that the cash dividends shall not be less than 10% of the total dividends.

• (3) The legal reserve shall not be used except for making up the company’s losses and issuing new shares or cash in proportion to the shareholders’ original shares. The public reserve is limited to 25% of the paid-in capital.

• (4) When the company distributes surplus, it must be based on the balance sheet date of the current year. The debit balance of other equity items is drawn to the special surplus reserve before the distribution is distributed, and thereafter the debit balance of other equity items is reverted, the reverted amount may be included in the distributable surplus.

• (5) On March 13, 2025, our company passed a resolution through the board of directors to propose the profit distribution plan for the year 2024.

The proposed distribution is as follows:

Statutory Surplus Reserve Special Surplus Reserve Cash Dividend	Amount $ 29,366 (27,572) 250,500 $ 252,294	dividend per share (in NT dollars)
		$ － － 1.5

42

The resolution on profit distribution for the year of 2024 is still pending and awaiting approval at the shareholder's meeting scheduled on June 24, 2025. For further information on the profit distribution, please refer to the Market Observation Post System (MOPS) of the Taiwan Stock Exchange or other relevant channels.

• (6) On June 20, 2024, the Company passed a resolution at the shareholder's meeting to allocate profits and losses in 2023.

ofits and losses in 2023.
Statutory Surplus Reserve Special Surplus Reserve Cash Dividend	Amount $ 20,605 (5,703) 168,000 $ 182,902	dividend per share (in NT dollars)
		$ － － 1

For further information on the profit distribution, please refer to the Market Observation Post System (MOPS) of the Taiwan Stock Exchange or other relevant channels.

• (7) On June 20, 2023, the Company passed a resolution at the shareholder's meeting to allocate profits and losses in 2022.

ofits and losses in 2022.
Statutory Surplus Reserve Special Surplus Reserve Cash Dividend	Amount $ 45,778 35,651 201,600 $ 283,029	dividend per share (in NT dollars)
		$ － － 1.2

For further information on the profit distribution, please refer to the Market Observation Post System (MOPS) of the Taiwan Stock Exchange or other relevant channels.

3. Other equity

her equity
Balance at January 1, 2024 Generated in the period Exchange Differences on Translation of Foreign Financial Statements Accumulated gains or losses from disposal of equity instruments are transferred to retained earnings Balance at December 31, 2024	Exchange Differences on Translation of Foreign Financial Statements $ (3,719) 1,349 － $ (2,370)	Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income $ (26,229) － 26,223 $ (6)	Total
			$ (29,948) 1,349 26,223 $ (2,376)

43

Balance at January 1, 2023 Generated in the period Exchange Differences on Translation of Foreign Financial Statements Evaluation adjustment Accumulated gains or losses from disposal of equity instruments are transferred to retained earnings Balance at December 31, 2023	Exchange Differences on Translation of Foreign Financial Statements $ (2,949) (770) － － $ (3,719)	Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income $ (32,702) － 42,428 (35,955) $ (26,229)	Total
			$ (35,651) (770) 42,428 (35,955) $ (29,948)

4. Treasury Stock

• (1) Reasons for Share Repurchase and Changes in the Number of Shares Repurchased:

(Unit ： 1,000 shares)

January 1~ December 31, 2024

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

Shares
Beginning Shares Ending
Reasons for Share repurchased
balance of cancelled in balance of
Repurchase in current
shares current period shares
period
Transfer shares to － －
2,000 2,000
employees
Maintain the
－ －
company's credit and 1,000 (1,000)
shareholders' rights
2,000 1,000 (1,000) 2,000
January 1~ December 31, 2023
Shares
Beginning Shares Ending
Reasons for Share repurchased
balance of cancelled in balance of
Repurchase in current
shares current period shares
period
Transfer shares to － －
2,000 2,000
employees
----- End of picture text -----

44

• (2) The Securities and Exchange Act stipulates that a company's repurchase of outstanding shares shall not exceed 10% of the total number of shares issued by the company. The total amount of shares repurchased shall not exceed the sum of retained earnings, the premium received from the issuance of shares, and the realized capital surplus.

• (3) According to the Securities and Exchange Act, our company's treasury stocks may not be pledged, and they may not enjoy shareholder rights until they are transferred.

• (4) According to the Securities and Exchange Act, shares bought back for the purpose of transfer to employees must be transferred within five years from the repurchase date. Failure to transfer within the stipulated timeframe will result in the shares being deemed as unissued shares, and the company must process a change in registration to cancel the shares. Shares bought back to protect the company's credit and shareholder interests must be processed for a change in registration to cancel the shares within six months from the repurchase date.

• (5) In order to maintain the company's credit and shareholders' rights, the Company, on October 17, 2024, resolved at the board meeting to repurchase 1,000 thousand shares of treasury stock. The repurchase period is scheduled from October 18, 2024 to November 17, 2024, at a repurchase price ranging from NT$21.46 to NT$45.23 per share. The Company executed the repurchase on November 4, 2024, acquiring 1,000 thousand shares for a total amount of NT$32,393 thousand. The repurchased treasury shares were approved by the board of directors on December 19, 2024 to reduce the capital by 1,000,000 shares, and the base date for the capital reduction is December 19, 2024.

(19) Earnings per share

Basic earnings per share (NT$) Diluted earnings per share (NT$)	2024 $ 2.01 $ 2.01	2023
		$ 1.03 $ 1.03

The basic and diluted earnings per share of the Company are as follows:

1. Basic earnings per share

The calculation for basic earnings per share and the weighted average number of common shares is as follows:

shares is as follows:
Net profit for the current period (thousand NT$) The weighted average number of ordinary shares to calculate the basic earnings per share (thousand shares) Basic earnings per share (NT$)	2024 $ 337,270 167,841 $ 2.01	2023
		$ 172,532
		168,000 $ 1.03

45

2. Diluted earnings per share

The earnings and weighted average number of common shares used in the calculation of diluted earnings per share are as follows:

Net profit for the current period (thousand NT$) The weighted average number of ordinary shares to calculate the basic earnings per share (thousand shares) Employee bonus expense (thousand shares) The weighted average number of ordinary shares to calculate the diluted earnings per share (thousand shares) Diluted earnings per share (NT$)	2024 $ 337,270 167,841 209 168,050 $ 2.01	2023
		$ 172,532
		168,000 161
		168,161 $ 1.03

If the Company chooses to distribute employee bonuses in the form of stock or cash, the weighted average outstanding shares should be calculated by taking into account the dilutive effect of potential common stock when calculating diluted earnings per share. The dilutive effect of such potential common stock should also be considered when calculating diluted earnings per share before the distribution of employee bonuses is approved at the following year's shareholders' meeting

(20) Operating income

ating income
Customer contract revenue Commodity sales revenue	2024 $ 1,887,383	2023
		$ 2,004,664

1. Please refer to Note 4(14) for the explanation of the income of the consolidated company.

2. Please refer to Note 14 for the explanation of the income of the company.

3. Contract balance

Accounts receivable (Note 6 (3)) Contract liabilities-current (list other current liabilities) Commodity sales	December 31, 2024 $ 715,379 $ 7,791	December 31, 2023
		$ 548,234
		$ 3,374

Funds from contract liabilities at the beginning of the period recognized as operating income are NT$2,762 thousand and NT$1,406 thousand in 2024 and 2023.

46

4. Refund liabilities

The consolidated company is based on historical experience and other known reasons, it is estimated that the possible refund liabilities for sales returns and discounts are NT$15,868 thousand and NT$25,979 thousand in 2024 and 2023, respectively. The balance of refund liabilities is NT$3,767 thousand and NT$2,461 thousand on December 31, 2024 and 2023, respectively.

(21) Other income

Rental income Less: depreciation Other Total	2024 $ 88,029 (27,003) 10,885 $ 71,911	2023
		$ 84,481 (26,186) 10,580 $ 68,875

(22) Other gains and losses

Losses on disposal of real estate, plant and equipment Losses on disposal of investment real estate Gains on disposal of interest in non- current assets held for sell Foreign exchange profit Reversal of Impairment profit -real estate, plant and equipment Depreciation expense Miscellaneous Disbursements Total	2024 $ (12,053) (20) － 54,875 4,332 (599) (2,077) $ 44,458	2023
		$ (8,700) － 6,368 1,231 39 (1,045) (9,159) $ (11,266)

(23) Financial costs

Interest expense Bank loan Lease liability Others Total	2024 $ 30,150 324 80 $ 30,554	2023
		$ 41,625 362 61 $ 42,048

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(24) Income Tax

1. The income tax expenses of the consolidated company in 2024 and 2023 are as follows:

Tax calculated based on profit before tax and statutory tax rate (20%) Expenses disallowed by tax regulation Sale of land profit exempt from income tax Income tax impact of loss deduction Temporary differences in the current period Additional tax on undistributed earnings Difference in tax payable based on the basic tax amount Income tax adjustment for prior years Income tax expense	2024 $ 73,091 (12,716) － (60,375) 35,642 1,158 － － $ 36,800	2023
		$ 40,424 (19,576) (7,191) (13,657) 12,933 8,737 4,243 (848) $ 25,065

The main components of income tax expense recognized in profit and loss are as follows:

Current tax: Current tax on profit in current period Deferred tax: Origination and reversal of temporary differences Income tax expense recognized in the income statement	2024 $ 1,158 35,642 $ 36,800	2023
		$ 12,132 12,933 $ 25,065

2. The consolidated company did not directly recognize any income tax in equity or other comprehensive income for the years ended in 2024 and 2023.

3. Current income tax liabilities

Current income tax liabilities	December 31, 2024 December 31, 2023 $ 870 $ 12,735

48

4. Deferred income tax liabilities

• (1) The analysis of deferred income tax assets is as follows:

Temporary differences Unrealized exchange loss Unrealized inventory decline loss Allowance for excess of bad debts Unrealized Impairment of assets Investment using the equity method Sales in transit Unrealized employees paid Unallocated manufacturing expenses Unrealized sales discount Loss deduction Total Temporary differences Unrealized exchange loss Unrealized inventory decline loss Allowance for excess of bad debts Unrealized Impairment of assets Investment using the equity method Unrealized employees paid Unallocated manufacturing expenses Unrealized sales discount Total		2024	2024
	Balance at January 1, 2024	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2024
	$ 4,689 34,258 15,729 5,437 78,743 － 3,162 2,204 514 － $ 144,736			$ － 18,805 15,662 4,570 66,207 170 3,313 862 739 5,793 $ 116,121
	Balance at January 1, 2023	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2023
	$ 16,992 44,254 19,744 5,445 60,513 2,887 3,010 3,695 $ 156,540	$ (12,303) (9,996) (4,015) (8) 18,230 275 (806) (3,181) $ (11,804)	$ － － － － － － － － $ －	$ 4,689 34,258 15,729 5,437 78,743 3,162 2,204 514 $ 144,736

49

(2) The analysis of deferred income tax liabilities is as follows:

Temporary differences Unrealized exchange benefits Sales in transit Pension listed excess of pension contributed Total		2024	2024
	Balance at January 1, 2024	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2024
	$ － 27 1,340 $ 1,367	$ 6,672 (27) 382 $ 7,027	$ － － － $ －	$ 6,672 － 1,722 $ 8,394

Temporary differences Sales in transit Pension listed excess of pension contributed Total		2023	2023
	Balance at January 1, 2023	Recognized in profit and loss	Recognized in other comprehensive profit and loss	Balance at December 31, 2023
	$ 52 186 $ 238	$ (25) 1,154 $ 1,129	$ － － $ －	$ 27 1,340 $ 1,367

5. Items not recognized as deferred income tax assets

Loss deduction amount Temporary difference amount	December 31, 2024 $ 94,384 $ 301,470	December 31, 2023
		$ 394,653 $ 236,537

The loss of the company is deducted, and the final deduction year is 2030.

6. As of December 31, 2024, the consolidated company's undeducted loss and the deduction exclusion period are as follows:

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

Year Declared amount/
Expiry year Loss deduction
incurred Assessed amount
2020 Assessed amount 2030 $ 57,931
2021 Declared amount 2026 950
2022 Declared amount 2027 23,842
2023 Declared amount 2028 3,056
2024 Declared amount 2029 37,570
Total $ 123,349
----- End of picture text -----

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7. The Company's and domestic subsidiaries' profit-making business income tax assessment status is as follows:

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

Company name Assessed year
----- End of picture text -----

Company name	Assessed year
Optimax Technology Corporation	2022
ART Optronics Corporation	2022

(25) Expense by nature

1. Functional aggregation of employee benefits, depreciation, depletion and amortization:

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

2024
Function Recognized in
Recognized Recognized in
Nature in cost of operating non- Total
operating
sales expenses
expenses
Employee benefits expenses:
－
Salaries and wages $ 252,137 $ 125,048 $ $ 377,185
Labor and health insurances 27,670 11,726 － 39,396
Pension 10,779 3,784 － 14,563
－
Other employee benefits 21,713 4,313 26,026
Depreciation 39,072 9,861 27,602 76,535
Amortization － 49 － 49
----- End of picture text -----

Function Nature		2023	2023	2023
	Recognized in cost of sales	Recognized in operating expenses Recognized in non- operating expenses Total
Employee benefits expenses:
Salaries and wages Labor and health insurances Pension Other employee benefits	$ 246,767 27,328 13,729 21,254	$ 129,585 11,371 865 4,446	$ － － － －	$ 376,352 38,699 14,594 25,700
Depreciation Amortization	39,303	10,396	27,231	76,930
	－	45	－	45

51

2. Employee benefits expenses

• (1) The Company allocates 1% to 10% of the pre-tax profits before deducting the distribution of employee remuneration and director's remuneration for the fiscal year as employee remuneration, which may be distributed in the form of stocks or cash as determined by the board of directors. The recipients of such distribution may include employees of subsidiary companies who meet certain conditions. Additionally, up to 1% is allocated for director's remuneration. The distribution of employee remuneration and director's remuneration shall be resolved by the board of directors with the attendance of at least two-thirds of the directors and the affirmative vote of more than half of the attending directors, and shall be reported to the shareholders' meeting.

• (2) The estimated employee remuneration and director's remuneration for the years 2024 and 2023 are respectively resolved by the board of directors on March 13, 2025 and March 14, 2024 as follows:

Estimated provision ratio

Employee remuneration Director's remuneration Amount Employee remuneration Director's remuneration	2024 1% 0.5% 2024 $ 3,798 $ 1,899		2023 1% 0.5% 2023
			$ 2,013 $ 1,006

After the annual consolidated financial statements of the Company are approved for issuance, any subsequent changes in amounts are adjusted based on accounting estimates and recorded in the following fiscal year.

The distribution amounts for employees’ and directors’ remuneration for the year 2023, as resolved, are consistent with the amounts recognized in the 2023 financial statements.

The distribution amounts for employees’ and directors' remuneration for the year 2022, as resolved, are consistent with the amounts recognized in the 2022 financial statements.

• (3) Information regarding employee remuneration and director's remuneration approved by the Company's board of directors can be found on the Taiwan Stock Exchange's "Market Observation Post System" (MOPS).

52

(26) Cash flow information

1. Investing activities with cash and non-cash flow effects

• (1) Non-current assets held for sell

(1) Non-current assets held for sell
Current Disposal Plus: Beginning balance of accounts receivable for equipment Less: The year-end accounts receivable for equipment payments Exchange influence Cash payback in this period (2) Property, plant and equipment Current increase Plus: Equipment payment due at the beginning of the period Less: Equipment payment due at the end of the period Less: the number of prepaid equipment transfers Cash paid in this period Current Disposal Plus: Beginning balance of accounts receivable for equipment Less: The year-end accounts receivable for equipment payments Exchange influence Cash paid in this period (3) Investment real estate Current increase Plus: Equipment payment due at the beginning of the period Less: Equipment payment due at the end of the period Cash paid in this period	2024 $ － 8,885 (9,288) 403 $ － 2024 $ 16,712 1,093 (3,067) (672) $ 14,066 2024 $ 714 5,600 (5,830) 230 $ 714 2024 $ 50,546 － － $ 50,546	2023
		$ 7,425 11,960 (8,885) (46) $ 10,454 2023
		$ 37,648 178 (1,093) (10,628) $ 26,105 2023
		$ 1,889 5,600 (5,600) － $ 1,889 2023
		$ － 231 － $ 231

53

2. Changes in liabilities from financing activities

At January 1, 2024 Changes in cash flow from financing activities Changes in lease liabilities Exchange influence At December 31, 2024	Short-term borrowings $ 98,097 118,364 － (1,386) $ 215,075	Long-term borrowings $ 1,210,000 (208,400) － － $ 1,001,600	Guarantee deposits received $ 13,624 61,676 － 181 $ 75,481	Lease liabilities $ 14,185 (3,651) 2,067 － $ 12,601	Liabilities from financing activities-gross
					$ 1,335,906 (32,011) 2,067 (1,205) $ 1,304,757

At January 1, 2023 Changes in cash flow from financing activities Changes in lease liabilities Exchange influence At December 31, 2023	Short-term borrowings $ 31,499 66,884 － (286) $ 98,097	Long-term borrowings $ 1,590,000 (380,000) － － $ 1,210,000	Guarantee deposits received $ 13,477 245 － (98) $ 13,624	Lease liabilities $ 16,009 (3,424) 1,600 － $ 14,185	Liabilities from financing activities-gross
					$ 1,650,985 (316,295) 1,600 (384) $ 1,335,906

(27) Capital management

Based on the characteristics of the current operating industry and the future development of the consolidated company, the company plans the need for working capital (including research and development expenses and debt repayment, etc.) required by the company in the future, taking into account changes in the external environment, to ensure the sustainability of the company operation can give back to shareholders while taking into account the interests of other stakeholders, and maintain the best capital structure to enhance shareholder value. On the whole, the Company adopts a prudent risk management strategy.

54

(28) Financial instruments

1. Categories of financial instruments

ncial instruments egories of financial instruments
Financial assets Cash and Equivalent Cash Financial assets measured at amortized cost-current Notes receivable Accounts receivable Other receivables (including non-current) Other financial assets- non-current Refundable Deposits Financial liabilities Short-term borrowings Notes payable Accounts payable Other payable Long-term debt (including current portion) Guarantee deposit received	December 31, 2024 $ 148,275 116,959 305 715,379 26,242 3,521 6,975 215,075 179 120,743 78,379 1,001,600 75,481	December 31, 2023
		$ 150,608 26,171 296 548,234 24,367 82,932 6,974 98,097 200 134,327 152,426 1,210,000 13,624

2. Financial risk management

The financial risk management objective of the consolidated company is to manage exchange rates related to operating activities risk, interest rate risk, credit risk and liquidity risk. In order to reduce related financial risks, the company is committed to identifying, evaluating and avoiding market uncertainty in order to reduce market potential adverse impact on the company’s financial performance. Important financial matters of the company are reviewed by the board of directors in accordance with relevant regulations and internal control systems. During the execution of the financial plan, the company must strictly comply with the overall financial risk management and related financial operation procedures for the division of authority and responsibilities.

3. Market risk

The consolidated company is mainly exposed to market risks such as changes in foreign currency exchange rates and changes in interest rates.

• (1) Foreign currency exchange rate risk

The operating activities of the consolidated company and the net investment of foreign operating institutions are mainly in foreign currencies transaction, therefore, foreign currency exchange rate risk arises. To avoid foreign currency caused by exchange rate changes as asset value decreases and future cash flows fluctuate, the company uses currency conversion of short-term borrowings to avoid exchange rate risk. Since the net investment of foreign operating organizations is a strategic investment, it has not been hedged.

55

A. Information about the consolidated company's significant foreign currency financial assets and liabilities is as follows:

Unit: Foreign currency yuan /NT$ thousand

December 31, 2024

Financial assets Monetary items JPY USD EUR KRW CNY Non-Monetary items JPY USD Financial liabilities Monetary items JPY USD Non-Monetary items USD CNY	Foreign currency	Exchange rate	NTD		Sensitivity analysis	Sensitivity analysis
				Degree of variation	Effect on profit or loss (before tax)	Effect on profit or loss
	68,570,821 27,178,990 1,300 40,000 3,875,172 22,734,058 19,837 713,265,909 1,207,768 192,598 111,412	0.2099 32.79 34.14 0.0225 4.478 0.2099 32.47 0.2099 32.79 32.74 4.443	14,393 891,201 44 1 17,353 4,773 644 149,715 39,603 6,305 495	+10％ +10％ +10％ +10％ +10％ +10％ +10％	1,439 89,120 4 － 1,735 (14,971) (3,960)	1,151 71,296 4 － 1,388 (11,977) (3,168)

December 31, 2023

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

Sensitivity analysis
Effect on profit
Foreign Exchange Degree of Effect on profit
NTD or loss
currency rate variation or loss
(before tax)
----- End of picture text -----

	oregn currency	xcange rate	NTD	egree of variation	or loss (before tax)	ffect on proft or loss
Financial assets
Monetary items
JPY	418,412,736	0.2172	90,879	+10％	9,088	7,270
USD	23,441,231	30.73	720,335	+10％	72,033	57,627
EUR	1,307	33.98	44	+10％	4	4
KRW	40,000	0.0239	1	+10％	－	－
CNY	3,051,610	4.327	13,204	+10％	1,320	1,056
Non-Monetary items
JPY	50,134,185	0.2159	10,822
Financial liabilities
Monetary items
JPY	892,752,651	0.2172	193,906	+10％	(19,391)	(15,512)
USD	1,025,767	30.71	31,501	+10％	(3,150)	(2,520)
Non-Monetary items
USD	173,684	30.74	5,340
CNY	113,850	4.391	500

56

• B. Monetary items of the consolidated company have a significant impact due to exchange rate fluctuations and all exchange loss recognized is NT$54,875 thousand and NT$1,231 thousand (including realized and unrealized) in 2024 and 2023, respectively.

(2) Interest rate risk

Interest rate risk refers to the risk of changes in the fair value of financial instruments due to changes in market interest rates. The interest rate risk of the consolidated company is mainly income investment and fixed and floating interest rate of borrowings, and the current market interest rate is low, it is expected that there is no major interest rate change risk, so the company did not hedge against it.

The sensitivity analysis of interest rate risk is fixed based on the end of the financial reporting period and changes in the fair value of floating-rate borrowings are the calculation basis. If the interest rate rises by ten basis points, the net profit after tax of the consolidated company will decrease by NT$1,140 thousand and NT$1,432 thousand in 2024 and 2023, respectively.

4. Credit risk management

Credit risk refers to the risk of a counterparty breaching contractual obligations and causing financial loss to the consolidated company. The credit risk of the company mainly comes from the accounts receivable of operating activities. Operation-related credit risks and financial credit risks are managed separately.

• (1) Credit risk related to operations

• In order to maintain the quality of accounts receivable, the consolidated company has established operating-related credit risks management procedures.

The risk assessment of any customer is based on the consideration of the customer’s financial status, credit rating factors that may affect customers’ ability to make payments, such as structural ratings, internal credit ratings of the company, historical transaction records and current economic conditions. The consolidated company will also use certain credit enhancement tools at the right time, such as advance payment and credit insurance, etc., to reduce the credit risk of specific customers.

As of December 31, 2024 and 2023, the balance of accounts receivable of the top ten customers accounted for the balance of accounts receivable of the consolidated company, the percentages are 72% and 77%, respectively. The credit risk of the remaining accounts receivable is insignificant.

• (2) Financial credit risk

The credit risks of bank deposits, fixed income investments and other financial instruments are measured and monitored by the financial department of the consolidated company. The performing parties are all creditworthy banks and financial institutions with investment grade and above Institutions, company organizations and government agencies, there are no major performance concerns, so there is no major credit risk.

5. Liquidity risk management

The objective of the liquidity risk management of the consolidated company is to maintain the cash and equivalent cash and ensure that the company has sufficient and flexible financial resources.

The table below summarizes the maturity profile of the consolidated company’s financial liabilities based on contractual undiscounted payments:

57

December 31, 2024

Non-derivative financial liabilities	Within 1 year	2~3 years	4~5 years	More than 5 years	Total
	$ 120,922 78,379 4,121 239,813 60,558 $ 503,793				$ 120,922 78,379 13,118 1,274,541 75,481 $ 1,562,441
Notes and accounts payable Other payables Lease liabilities Loan Guarantee deposit received Total Non-derivative financial liabilities
	Within 1 year	2~3 years	4~5 years	More than 5 years	Total
	$ 134,527 72,606 3,795 98,460 245 $ 309,633	$ － － 6,785 1,296,968 1,000 $ 1,304,753	$ － － 4,147 － 7,187 $ 11,334	$ － － 216 － 5,192 $ 5,408	$ 134,527 72,606 14,943 1,395,428 13,624 $ 1,631,128
Notes and accounts payable Other payables Lease liabilities Loan Guarantee deposit received Total

6. Fair value of financial instruments

• (1) Financial instruments measured by amortized cost (including cash and cash equivalents, financial assets measured by amortized cost, notes receivable, accounts receivable, other accounts receivable, other financial assets, guarantee deposit receivable, short-term loans, notes payable, accounts payable, other payables, long-term loans and deposit deposits) is a reasonable approximation of the fair value.

• (2) When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

58

• a. Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets.

• b. Level 2 inputs: Other than quoted prices included within Level 1, inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

• c. Level 3 inputs: Derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

• (3) Valuation techniques and assumptions applied in fair value measurement

The fair value of financial assets is determined in the following way:

• Since the investee company’s original investment date, the performance and operation of the investee company has not undergone any major changes, so the consolidated company uses the investment cost as the fair value estimated value.

• (4) There is no change in the fair value of financial assets in 2024 and 2023.

• (5) The following chart is the movement of Level 3:

January 1 ~ December 31, 2024

		January 1 ~ December 31, 2024	January 1 ~ December 31, 2024	January 1 ~ December 31, 2024	January 1 ~ December 31, 2024
Financial assets measured at fair value through other comprehensive gains and losses Financial assets measured at fair value through other comprehensive gains and losses	At January 1 $ －	Additions in the period Recognized in other comprehen sive income Disposals in the period Effect of exchange rate changes $ － $ － $ － $ － January 1 ~ December 31, 2023				At December 31 $ －
	At January 1 $ 11,282	Additions in the period $ －	Recognized in other comprehen sive income $ 41,443	Disposals in the period $ (52,725)	Effect of exchange rate changes $ －	At December 31 $ －

• (6) Quantitative information of fair value measurement of significant unobservable input value (level 3). The fair value measurement of the consolidated company is classified as level 3 mainly including financial assets measured at fair value through other comprehensive profit and loss - equity securities investment.

The list of quantitative information with significant unobservable inputs is as follows:

Item	Evaluation technology	Significant unobservable input value	Significant unobservable input value and fair value relationship
Measured at fair value through other comprehensive profit and loss－ Investments accounted for using equity method with No Active Market	It can be compared to the listed OTC company law	Weighted average P/B multiplier	The higher the multiplier, the higher the fair value

59

7. Related-party Transactions

The transactions amounts and balances between the Company and its subsidiaries (being related parties of the Company) have been eliminated in the preparation of the consolidated financial statements and are not disclosed in these notes.

(1) Name and relationship of related parties

Name of related party Relationship with the Company Shenzhen Lihuasheng Technology Co., Ltd. Associate Company (Note) (Lihuasheng Technology) Lihuasheng (Hong Kong) Photoelectric Other related party (The representative Technology Co., Ltd. person and the representative of the (Lihuasheng Hong Kong) associate company are the same) (Note) Lihuasheng (Shenzhen) Optoelectronics Other related party (The representative Technology Co., Ltd. person and the representative of the (Lihuasheng Optoelectronics) associate company are the same) (Note)

• Note: Subsidiary - Optimax Technology (Suzhou) Co., Ltd., sold 13% of the equity of Shenzhen Lihuasheng Technology Co., Ltd. in November 2024, and the change was completed on December 9, 2024, with the shareholding ratio reduced to 19%, which no longer has significant influence. Shenzhen Lihuasheng Technology Co., Ltd. and Lihuasheng (Hong Kong) Photoelectric Technology Co., Ltd. were no longer related party from December 2024.

(2) The Company’s significant related party transactions

• 1.Operating revenue

==> picture [360 x 93] intentionally omitted <==

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

Name of related party 2024 2023
Lihuasheng Hong Kong $ 7,584 $ 15,871
－
Lihuasheng Technology 11,249
$ 18,833 $ 15,871
----- End of picture text -----

The prices of transactions between the company and its related parties are not comparable in other transactions under the same circumstances in 2024 and 2023. The credit period for related parties is approximately 90~120 days for monthly settlement, and approximately 30~120 days for general customers.

2. Manufacturing cost - processing cost

Name of related party Lihuasheng Hong Kong	2024 $ 495	2023 $ 20,518

60

3. Deduction of operating costs - income from sale of scraps

==> picture [360 x 309] intentionally omitted <==

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

Name of related party 2024 2023
Lihuasheng Hong Kong $ 420 $ 9,869
4. Operating expenses
Name of related party 2024 2023
Lihuasheng Hong Kong $ 98 $ 3,473
－
Lihuasheng Technology 5,123
$ 5,221 $ 3,473
5. Net Accounts receivable
Name of related party December 31, 2024 December 31, 2023
－
Lihuasheng Hong Kong $ $ 64,333
－
Less: Allowance for losses (64,333)
－ －
$ $
----- End of picture text -----

4. Operating expenses

5. Net Accounts receivable

Information on changes in allowance losses is as follows:

Beginning balance Reclassification for the current period Provision for impairment loss in the current period Ending balance	2024 $ 64,333 (64,333) － $ －	2023
		$ 88,560 － (24,227) $ 64,333

6. Other receivables

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

Name of related party December 31, 2024 December 31, 2023
－
Lihuasheng Hong Kong $ $ 12,062
－
Lihuasheng Optoelectronics 6,058
－
Sub-total 18,120
－
Less: Allowance for losses (18,067)
－
$ $ 53
----- End of picture text -----

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The information on changes in provision for losses is as follows:

==> picture [368 x 312] intentionally omitted <==

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

2024 2023
Beginning balance $ 18,067 $ 15,290
Reclassification for the current －
(18,067)
period
Provision for impairment loss －
2,903
in the current period
－
Exchange Influence (126)
－
Ending balance $ $ 18,067
7. Accounts payable
Name of related party December 31, 2024 December 31, 2023
－
Lihuasheng Hong Kong $ $ 133
8. Loan to related party
Name of related party December 31, 2024 December 31, 2023
－
Lihuasheng Technology $ $ 8,654
－
Less: Allowance for losses (8,364)
－
Net amount $ $ 290
----- End of picture text -----

The information on changes in provision for losses is as follows:

==> picture [359 x 124] intentionally omitted <==

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

Name of related party 2024 2023
－
Beginning balance $ 8,364 $
Reclassification for the current －
(8,364)
period
Provision for impairment loss －
8,364
in the current period
－ －
Exchange Influence
－
Ending balance $ $ 8,364
----- End of picture text -----

The consolidated company provided unsecured loans to Lihuasheng Technology at an interest rate of 1%.

(3) Rewards for the main management

The remuneration information for directors and other key management members is as follows:

Salary and other short-term benefits Resignation benefits Total	December 31, 2024 $ 17,659 108 $ 17,767	December 31, 2023
		$ 22,223 108 $ 22,331

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8. Pledged assets

==> picture [470 x 246] intentionally omitted <==

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

Carry amount
December 31, December 31,
Item Content
2024 2023
Financial assets Time deposits, provided to financial
－
measured at amortized institutions as collateral for short-term $ 16,395 $
cost - current loans
Current deposit , provided to financial
Other financial assets-
institutions as collateral for short-term 3,521 82,932
current
loans
Real estate, plant and Provided to financial institutions as
1,295,083 1,221,081
equipment collateral for long- and short-term loans
Provided to financial institutions as －
Investment real estate 550,753
collateral for long- and short-term loans
Deposits for customs and lease
Deposit for guarantee 6,975 6,974
guarantees, etc.
Total $ 1,872,727 $ 1,310,987
----- End of picture text -----

9. Significant commitments and contingencies

Except as mentioned in other notes, the major commitments of the company at the balance sheet date and contingencies are as follows:

• (1) The balance of the unused letter of credit for imported raw materials from the company is listed below:

==> picture [374 x 83] intentionally omitted <==

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

Currency December 31, 2024 December 31, 2023
JPY $ 548,129 $ 557,800
USD $ 109 $ 194
NTD $ 6,504 $ 9,760
----- End of picture text -----

• (2) List of the amount of deposit guarantee notes issued by the consolidated company as a result of applying for a loan line from the bank as follows:

December 31, 2024 $ 1,172,367	December 31, 2023 $ 653,000

10. Significant loss from disaster: None.

11. Significant subsequent events

On March 13, 2025, the Board of Directors of the Company approved a resolution to implement the fourth repurchase of common stock in order to maintain the company's credit and protect shareholders' interests. It is expected that 1,000 thousand shares will be repurchased between March 14, 2025 and April 13, 2025.

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12. Others: None.

13. Additional disclosures

When preparing the consolidated financial report, all major transactions between parent and subsidiary companies and their balances have been eliminated.

• (1) Information on significant transactions:

1. Financing provided to other parties: Attached Table 1.

• 2.Provision of endorsements and guarantees to others: None.

• 3.Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 2.

• 4.Acquisition or sale of the same security with the accumulated cost reaching NT$300 million or 20% of paid-in capital or more: None.

• 5.Acquisition of property reaching NT$300 million or 20% of paid-in capital or more: None.

• 6.Disposal of property reaching NT$300 million or 20% of paid-in capital or more: Attached None.

• 7.Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more: None.

• 8.Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Attached Table 3.

• 9.Provision of endorsements and guarantees to others: None.

10. Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates): Attached Table 4.

• (2) Information on investees:

Names, locations and other information of investee companies ： Attached Table 5.

• (3) Information on investments in mainland China:

• 1.The name of the investee company in mainland China, main business items, paid-in capital, investment method, capital remittance, shareholding ratio, investment profit and loss, book value of investment at the end of the period, repatriated investment income and investment quota for mainland China: Attached Table 6.

• 2.Significant transactions with mainland investee companies directly or indirectly via a third region transactions, including their prices, payment terms, unrealized gains and losses, and other relevant information that helps to understand the impact of mainland investment on financial reporting: Attached Table 1~6.

• (4) Major shareholders information:

The names, shareholdings, and ownership percentages of shareholders holding 5% or more of the shares: Attached Table 7.

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14. Segment information

Information provided to main operating decision makers for allocating resources and evaluating department performance, focusing on the types of products or services delivered or provided. The accounting policies between the operating department of the consolidated company and a summary of the important accounting policies described in Note 4 have no major difference. The reporting departments of the consolidated company were as follows:

TFT department:

Mainly responsible for the production and sales polarizers of digital cameras, digital photo frames, mobile phones, LCD projectors, notebook computers, LCD monitors, color TVs (Full HD) and car navigation systems, etc.

TN/STN department:

Mainly responsible for the production and sales of polarizres of electronic watches, computers, handheld game consoles, electronic dictionaries, mobile phones, stock cameras, etc. Other departments:

Mainly responsible for the production and sales of polarizres of touch panel, sunglasses, precision coating and related optical materials.

• (1) Department revenue and operating results

The income and operating results of the consolidated company’s continuing operations were based on the analysis of the reporting department, such as under:

Revenue from external customers Segment income (loss) Revenue from external customers Segment income (loss)			Unit: Thousand New Taiwan Dollars 2024	Unit: Thousand New Taiwan Dollars 2024	Unit: Thousand New Taiwan Dollars 2024
	TFT	TN/STN	Others	Adjustments and Eliminations	Consolidation
	$ 1,401,229 443,142	$ 420,684 138,820	$ 65,470 (52,896) 2023	$ － －	$ 1,887,383 529,066
	TFT	TN/STN	Others	Adjustments and Eliminations	Consolidation
	$ 1,567,725 256,197	$ 381,182 163,909	$ 55,757 (31,729)	$ － －	$ 2,004,664 388,377

• (2) Adjustment information of departmental profit and loss

1. Revenue from external customers provided by the consolidated company to the main operating decision maker. The accounting policy was consistent with the operating income in the consolidated income statement.

65

2. The adjustment of the profit and loss of the operating department and the net profit before tax should be reported as follows:

Reportable department's departmental profit and loss Uncategorized related profit and loss Non-operating income and expenses Net profit before tax	2024 $ 529,066 (176,364) 21,368 $ 374,070	2023
		$ 388,377 (184,244) (6,536) $ 197,597

3. Departmental profit and loss refers to the gross profit earned by each department and minus the allocated operating expenses. It does not include headquarters management costs and some operating expenses, interest income, and disposal fixed assets gains and losses, exchange gains and losses, depreciation of idle assets, interest expenses, other non-industry profit and loss and income tax, etc. This measurement amount is provided to the main operating decision. It is used to allocate resources to the department and evaluate its performance.

• (3) Departmental assets and liabilities

The measurement of the assets and liabilities of the consolidated company is not the measurement index of the operating decision maker, so the measured amount of assets and liabilities that should be disclosed was zero.

(4) Geographical information

Geographical information of the consolidated company in 2024 and 2023 are as follows:

Taiwan Mainland China Korean Japan Others Total	2024 Revenue Non-current assets $ 127,888 $ 2,126,390 1,728,021 209,226 1,843 － 11,022 － 18,609 － $ 1,887,383 $ 2,335,616	2023	2023
	Revenue $ 127,888 1,728,021 1,843 11,022 18,609 $ 1,887,383	Revenue $ 164,306 1,797,713 3,530 5,210 33,905 $ 2,004,664	Non-current assets
			$ 2,128,558 214,990 － － － $ 2,343,548

Non-current assets do not include items classified as financial instruments, cash deposits as collateral, deferred tax assets, and net defined benefit assets.

66

(5) Major customer information

Major customers which sales amount reached 10% of the total operating income of the consolidated company in 2024 and 2023 are as follows:

A Customer B Customer C Customer D Customer E Customer	2024 $ 225,840 399,173 182,079 287,880 223,159 $ 1,318,131	2023
		$ 425,180 350,748 227,009 217,746 197,327 $ 1,418,010

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【 Attached Table 1 】

Financing provided to other parties

		(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)	(Expressed in thousands of New Taiwan dollars)
		Maximum Amounts of											Collateral Limit on Ceiling
No. (Note 1)	Creditor	Borrower General ledger account (Note 2) Is a related party outstanding balance during the period (Note 3) Ending balance (Note 8) Actual amount drawn down Interes t rate Nature of loan (Note 4) transaction with the borrower (Note 5) Reason for short- term financing (Note 6) Amounts of allowance loans granted to a single party (Note 7/9/10) on total loans granted (Note 7/9/10) Item Value
0	OPTIMAX	Optimax Technology (Suzhou) Co., Ltd Other receivables Yes $ 189,849 $ 162,606 $ 162,606 － Short-term financing purpose $ － Business operation $ －None None $1,035,566 $1,035,566
1	Optimax Technology (Suzhou) Co., Ltd	Shenzhen Lihuasheng Technology Co., Ltd.	Long-term receivables	Yes	8,956	5,821	5,821	1％	Short-term financing purpose	$ －	Business operation	_$ 5,821 _	_None _	None	29,338	29,338

Note 1 : The explanations for the item numbers are as follows:

• A. The issuer shall enter 0.

• B. The invested company shall number the items sequentially starting from 1, according to the company name, using Arabic numerals.

• Note 2 : Accounts receivable from related parties, receivables from related entities, shareholder transactions, advances, temporary payments, and other similar items, if they are of a loan nature, must be included in this section.

Note 3 : The highest balance of loans to others during the current year.

Note 4 : The nature of the loan should be listed as either business transactions or for the necessity of short-term financing.

• Note 5 : If the loan nature is related to business transactions, the amount of business transactions should be listed. The business transaction amount refers to the total business transactions between the lending company and the borrower, from the start of the transaction up to the end of the previous fiscal year.

• Note 6 : If the loan nature is related to short-term financing necessity, the specific reasons for the loan and the intended use of the funds by the recipient should be explained, such as repayment of loans, purchase of equipment, business working capital, etc.

• Note 7 : The company should list the individual loan limits and total loan limits for each borrower, according to its internal procedures for lending funds, and explain the calculation method of the individual and total loan limits in the notes section.

• Note 8 : If a publicly listed company, in accordance with Article 14, Paragraph 1 of the Regulations on Handling Loans and Endorsements/Guarantees by Publicly Listed Companies, has board resolutions for individual loans, even if the funds have not been disbursed yet, the board resolution amount should still be included in the disclosed balance to reflect the risk undertaken. If the loan is repaid later, the remaining balance after repayment should be disclosed to reflect the adjustment of the risk. If a publicly listed company, in accordance with Article 14, Paragraph 2 of the Regulations, has a board resolution authorizing the chairman to lend funds in installments or on a revolving basis within a certain limit and over one year, the amount approved by the board should be used as the disclosed balance, even if the funds have been repaid, as future loans may still occur, and the approved loan amount should still be disclosed as the reported balance.

Note 9 : The company’s procedures for lending funds to others are as follows:

• A. Due to business transactions, the amount lent to an individual borrower should not exceed the amount of business transactions between the company and that borrower and should not exceed 40% of the company’s most recent audited net worth. The total amount lent should not exceed 40% of the company’s most recent audited net worth. The business transaction amount refers to the higher of the purchase or sales amount between the two parties.

• B. Due to the necessity of short-term financing, the amount lent to an individual borrower should not exceed 40% of the company’s most recent audited net worth.

• C. The total amount lent, due to business transactions and short-term financing necessity, should not exceed 40% of the company’s most recent audited net worth.

• Note 10 : The procedures for lending funds to others by Lite-On Optoelectronics Technology (Suzhou) Co., Ltd. are as follows:

• A. Due to business transactions, the amount lent to an individual borrower should not exceed the amount of business transactions between the company and that borrower and should not exceed 40% of the company’s most recent audited net worth. The total amount lent should not exceed 40% of the company’s most recent audited net worth. The business transaction amount refers to the higher of the purchase or sales amount between the two parties.

• B. Due to the necessity of short-term financing, the amount lent to an individual borrower should not exceed 40% of the company’s most recent audited net worth.

• C. Due to business transactions or the necessity of short-term financing for a company with a 20% (or more) stake, the total amount lent should not exceed 40% of the company’s most recent audited net worth.

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【 Attached Table 2 】

Holding of marketable securities at the end of the period (excluding subsidiaries, joint ventures and associates)

Investing company	Marketable securities type and name	Relation with the securities issuer	Financial statement account		As of December 31, 2024	As of December 31, 2024		Footnote
				Shares	Carrying amount	Ownership (%)	Fair value
OPTIMAX	Common Stock: (HongKong) Yute Optimax Technology Co., Ltd	－	Financial assets at fair value through other comprehensive profit or loss ─ non-current	1,700	$ －	17％	$－
Optimax Technology (Suzhou) Co., Ltd	Shenzhen Lihuasheng Technology Co., Ltd.	－	Financial assets at fair value through profit or loss - non- current	－	－	19％	－

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【 Attached Table 3 】

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

Company name	Counter party	Relationship with the counter party	Receivable- Related Parties Balance as at December 31, 2024 (Note 1)	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts
					Amount	Action taken
OPTIMAX	Optimax Technology (Suzhou) Co., Ltd	Subsidiary	Other Receivable $ 162,606	－	$ －	－	$ －	$－

Note 1: Please list separately accounts receivable from related parties, bills receivable, other receivables, etc.

• Note 2: Paid-in capital refers to the paid-in capital of the parent company. For issuers with no par value or a par value per share not equal to ten New Taiwan dollars, the transaction amount requirement for 20% of paid-in capital is calculated based on 10% of the equity attributable to owners of the parent company on the balance sheet.

70

【 Attached Table 4 】

- Significant inter company transactions

For the year ended December 31, 2024

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Company name	Counter party	Relationship (Note 2)			Transaction
				Account	Amount	Transaction term	Percentage of Consolidated total operating revenues or total assets(Note 3,4)
0	OPTIMAX	Optimax Technology (Suzhou) Co., Ltd	1	_Other receivable _	_$ 162,606 _		4%
1	ART OPTRONICS CORP.	OPTIMAX	2	Sales Revenue	21,358	The credit period is 7 days after delivery with telegraphic transfer	1%

【 Attached Table 4-1 】

- Significant inter company transactions

For the year ended December 31, 2023

(Expressed in thousands of New Taiwan dollars)

No. (Note 1)	Company name	Counter party	Relationship (Note 2)			Transaction
				Account	Amount	Transaction term	Percentage of Consolidated total operating revenues or total assets(Note 3,4)
0	OPTIMAX	Optimax Technology (Suzhou) Co., Ltd	1	Other receivables	_$ 177,535 _		4％
1	ART OPTRONICS CORP.	OPTIMAX	2	Sales Revenue	16,274	The credit period is 7 days after delivery with telegraphic transfer	1%

Note 1: The number is filled in as follows:

• (1) Number 0 represents the parent. (2) Subsidiaries are numbered in order from number 1.

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

• (1) The parent to the subsidiary. (2) The subsidiary to the parent. (3) The subsidiary to another subsidiary.

• Note 3: The calculation of the ratio of the transaction amount to the consolidated total revenue or total assets, if it is an asset-liability account, it is calculated as the ending balance in the consolidated total assets: if it is a profit and loss account, the cumulative amount is calculated by the method of consolidated

• management.

• Note 4: Individual transaction amounts that are less than 1% of the consolidated total revenue or total assets will not be disclosed; disclosure will be made based on asset and revenue information.

asset and revenue information.

71

【 Attached Table 5 】

Names, locations and other information of investee companies (excluding mainland China)

Investor	Investee (Note 1)	Location	Main business activities	Initial investment amount Shares held as at December 31, 2024	Initial investment amount Shares held as at December 31, 2024	Initial investment amount Shares held as at December 31, 2024	Initial investment amount Shares held as at December 31, 2024		Net profit (loss) of the investee for the current period	Investment income (loss) recognized for the period	Footnote
				Balance as at December 31, 2024 Balance as at December 31, 2023 Number of shares			Owner ship (%)	Carrying amount
_OPTIMAX _	ART OPTRONICS CORP. OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. (OOMC)	Taiwan MAURITIUS	Manufacture and sales Investment	2,011 2,011 225,000 614,524 (USD 19,000,000) 614,524 (USD 19,000,000) 19,000,000			100％ 100％	844 73,345	$ 10 3,830	$ 10 3,830	Subsidiary Subsidiary
	Information Security Technology INC.	Taiwan	Integrated Circuit (IC) Design Industry	120,000	120,000	24,000,000	24.54％	36,000	(60,696)	(71,663)	Associate company

Note 1: If a public issuing company has a foreign holding company and uses Consolidated statements as the main financial report in accordance with local laws and regulations, the disclosure of information about the foreign investment company may only disclose the relevant assets of the holding company.

72

【 Attached Table 6 】

Information on investments in mainland China

Investee in	Main	Paid-in capital	Investment	Accumulated amount of remittance	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod Accumulated amount of remittance Ownership held by	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod Accumulated amount of remittance Ownership held by	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod Accumulated amount of remittance Ownership held by	Amount remitted from Taiwan or amount remitted back to Taiwan for the currentperiod Accumulated amount of remittance Ownership held by	Investment Income (loss) recognized	Carrying amount of Investment returns have been	Carrying amount of Investment returns have been
Mainland China	business activities	(Note 5)	method	from Taiwan as of January 1, 2024 (Note 5)	Remitted to mainland China	Remitted back to Taiwan	from Taiwan as of December 31, 2024 (Note 5) Optimax (direct or indirect)		for the current period (Note 2)
Optimax Technology (Suzhou) Co., Ltd	Manufacturing and selling of polarizers	$ 614,524 (USD19,000,000)	(Note 1)	$ 614,524 _(USD19,000,000) _	$－	$－	$ 614,524 (USD19,000,000)	100%	$ 3,830	$ _73,345 _	$ －

Accumulated amount of remittance from Taiwan to mainland China as of December 31, 2024 (Note 5)	Investment amounts authorized by Investment Commission, MOEA (Note 4)	Upper limit on investment by Investment Commission, MOEA (Note 3)
$ 614,524 (USD19,000,000)	$ 724,659 (USD22,100,000)	$ 1,553,348

Note 1 : Investment in Mainland China is made through OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP.

Note 2 : Based on the unaudited financial statements of the investee company for the same period.

Note 3 : According to the "Regulations Governing the Review Principles for Investment or Technical Cooperation in Mainland China" issued by the Investment Commission, Ministry of Economic Affairs, the upper limit for cumulative investments in Mainland China is NT$80 million, or 60% of the company's net worth or consolidated net worth, whichever is higher.

Note 4 : For amounts involving foreign currencies, the New Taiwan Dollar equivalent is converted based on the spot exchange rate and average exchange rate as of the financial reporting date.

Note 5 : For amounts involving foreign currencies, the New Taiwan Dollar equivalent is converted based on the exchange rate on the actual remittance date from Taiwan.

73

【 Attached Table 7 】

Major shareholders information

Major shareholders Name	Shareholding	Shareholding ratio
Peter Chao	16,450,416	9.67%
Long-Shi Lin	9,614,782	5.65%

• Note 1 : The information in this table regarding major shareholders is provided by the Taiwan Depository & Clearing Corporation (TDCC) based on data as of the last business day of each quarter. It includes shareholders whose combined holdings of common and preferred shares (including treasury shares) that have been fully registered in book-entry form amount to 5% or more of the company’s outstanding shares. The share capital recorded in the company’s financial statements may differ from the number of shares that have been registered in book-entry form due to differences in calculation methods or timing.

• Note 2 : If a shareholder has entrusted shares to a trust, the information is disclosed under the trust account opened by the trustee, with each trustor shown separately. For shareholders subject to insider shareholding declaration under the Securities and Exchange Act—those holding more than 10% of the company’s shares—the declared holdings include personal shares as well as shares entrusted to a trust over which they retain decision-making power regarding the trust property. For details on insider shareholding declarations, please refer to the Market Observation Post System (MOPS).

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