Optimax — Audit Report / Information 2024

Nov 12, 2024

Stock Code: 3051

OPTIMAX TECHNOLOGY CORPORATION

Parent Company Only 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
Independent Auditors’ Report	3~6
Parent Company Only Balance Sheets	7
Parent Company Only Statements of Comprehensive Income	8
Parent Company Only Statements of Changes in Equity	9
Parent Company Only Statements of Cash Flow	10
Notes to the Parent Company Only Financial Statements	11~71
1. Organization and business	11
2. Approval of financial statements	11
3. Application of New and Revised Accounting Standards and	11~12
Interpretations
4. Summary of significant accounting policies	12~22
5. Critical accounting judgments and key sources of estimation and	22~23
assumption uncertainty
6. Description of Significant Accounts	23~58
7. Related-party transactions	59~62
8. Pledged assets	62
9. Significant commitments and contingencies	63
10. Significant loss from disaster	63
11. Significant subsequent events	63
12. Others	63
13. Additional disclosures	63~64
(1) Information of significant transactions	63
(2) Information of investees	64
(3) Information of investments in mainland China	64
(4) Major shareholders information	64
14. Segment information	64
Tables of Significant Accounting Items	72~84

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Independent Auditors’ Report

To Optimax Technology Corporation

Opinion

We have audited the Parent Company Only balance sheets of Optimax Technology Corporation as of December 31, 2024, and December 31, 2023, along with the Parent Company Only 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 Parent Company Only 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 Parent Company Only 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 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 Parent Company Only Financial Statements." We have stayed independent from Optimax Technology Corporation 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

The key audit matters are those matters that, in the auditor's professional judgment, were of most significance in the audit of the Parent Company Only financial statements of Optimax Technology Corporation for the year ended December 31, 2024. These matters were addressed in the overall audit of the Parent Company Only financial statements and were considered in forming the audit opinion. The auditor does not provide a separate opinion on these matters.

Key Audit Matters for the Parent Company Only financial statements of Optimax Technology Corporation. for the year ended December 31, 2024, are as follows:

1. Inventory Valuation

For the accounting policies of inventories, please refer to Note 4 (5) of the Parent Company Only 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 Parent Company Only Financial Statements; For the description of important accounting items in inventories, please refer to Note 6 (5) of the Parent Company Only Financial Statements.

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The main business item of Optimax Technology Corporation is 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 (10) of the Parent Company Only Financial Statements; For the uncertainty of the accounting estimates and assumptions of the asset impairment assessment, please refer to Note 5 of the Parent Company Only Financial Statements; For the description of important accounting items in Property, plant and equipment, please refer to Note 6 (7) of the Parent Company Only Financial Statements.

Optimax Technology Corporation is a 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, examine the reasonableness of the relevant assumptions, and assess the qualification and independence of the appraiser.

Other Matters

Incorporated in the Parent Company Only 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 Parent Company Only 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 Parent Company Only Financial Statements

It is the management's responsibility to fairly present the Parent Company Only 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 Parent Company Only Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing for the Parent Company Only 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 if there was not any other option except liquidation or suspension of the Company's business.

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

The Accountants' Responsibilities in Auditing the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance on whether the Parent Company Only 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 was carried out in accordance with the generally accepted auditing standards, does not guarantee that a material misstatement(s) will be detected in the Parent Company Only 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 Parent Company Only 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 Parent Company Only 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.

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 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 Parent Company Only Financial Statements in our audit report of the relevant disclosures therein, or to amend our audit opinion when any inappropriate disclosure was 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 to cease to continue as a going concern. However, future events or conditions may cause Optimax Technology Corporation to cease to continue as a going concern.

5. Evaluated the overall presentation, structure, and content of the Parent Company Only Financial Statements (including the related notes), and determined whether the Parent Company Only 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 Parent Company Only 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.

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 Parent Company Only Financial Statements of Optimax Technology Corporation 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

Parent Company Only 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	$ 143,046 4 144,915 4 19,895 － 3,500 － 715,379 17 548,234 13 173,322 4 190,273 4 603,022 15 686,954 17 6,790 － 11,391 － 3,521 － 82,932 2 1,312 － 1,422 －
Total current assets	1,666,287 40 1,669,621 40
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	110,189 3 149,683 4 1,491,235 36 1,556,660 38 11,286 － 13,348 － 622,523 15 557,804 14 116,121 3 144,736 4 13,340 － 6,428 － 128,306 3 7,705 －
Total non-current assets	2,493,000 60 2,436,364 60
Total Assets	$ 4,159,287 100 4,105,985 100
Liabilities Current liabilities Short-term borrowings 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 3 120,744 3 130,842 3 165,082 4 150,810 4 870 － 12,735 － 16,565 1 15,810 － 3,851 － 3,484 － 21,600 1 － － 3,767 － 2,461 － 15,848 － 15,560 －
Total current liabilities	563,402 14 429,799 10
Noncurrent liabilities Long-term borrowings Deferred tax liabilities Non-current lease liabilities Deposits received	980,000 24 1,210,000 30 8,394 － 1,367 － 8,750 － 10,701 － 9,827 － 8,432 －
Total non-current liabilities	1,006,971 24 1,230,500 30
Total liabilities	1,570,373 38 1,660,299 40
Equity Common stock Retained earnings： Statutory surplus reserve Special surplus reserve Undistributed surplus Other components of equity Treasury Stocks	1,690,000 41 1,700,000 42 101,883 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)
Total equity	2,588,914 62 2,445,686 60 $ 4,159,287 100 4,105,985 100
Total liabilities and equity

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OPTIMAX TECHNOLOGY CORPORATION

Parent Company Only 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 $ (1,193,692) (63)		2,004,664 100 (1,471,475) (73)
Grossprofitfrom operations	693,691 37		533,189 27
Operating expenses Selling expenses Administrative expenses Research and development expenses Expected Credit impairment loss/gain	(127,651) (7) (148,216) (8) (42,308) (2) (4,089) －		(127,196) (6) (153,618) (8) (52,834) (3) 22,120 1
Total operating expenses	(322,264) (17)		(311,528) (16)
Net operating income	371,427 20		221,661 11
Non-operating income and loss Interest income 3,257 － Other income 46,922 3 Other gains and losses 50,328 3 Finance costs (30,554) (2) Expected Credit impairment gain/loss 513 － Share of profit or loss from subsidiaries and associates accountedfor using the equity method (67,823) (4)			3,308 － 42,852 2 (8,052) － (42,048) (2) (7,179) － (12,945) (1)
Total non-operating income and expenses 2,643 －			(24,064) (1)
Income before tax 374,070 20 Income tax expense (36,800) (2)			197,597 10 (25,065) (1)
Net Incomefor theperiod 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 －			(2,433) － 41,443 2 985 － (770) －
Other comprehensive income for the period (net of tax) 6,351 －			39,225 2
Total comprehensive income $ 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

Parent Company Only 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 surplus Special surplus Undistributed from financial assets at
translation
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 for the period 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 35,955 (35,955)
comprehensive 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 for the period 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 (26,223) 26,223
comprehensive 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

Parent Company Only Statements of Cash Flows

For the years ended December 31, 2024 and 2023

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from operating activities： Income before income tax Adjustments to reconcile profit (loss)： Depreciation expense Amortization expense Expected Credit impairment loss/gain Interest expense Interest income Share of profit or loss from subsidiaries and associates accounted for using the equity method Loss on disposal of property, plant and equipment Property, plant and equipment reclassification expense Loss on disposal of investment properties Gain on disposal of non-current assets classified as held for sale Reversal of impairment loss on non-financial assets Unrealized foreign exchange gain Changes in operating assets and liabilities： Accounts receivable Other receivables Inventories Prepayments Other current assets Net defined benefit assets Accounts payable Other payable Provisions Other current liabilities	2024 2023
	$ 374,070 $ 197,597 63,638 64,325 49 45 3,576 (14,941) 30,554 42,048 (3,257) (3,309) 67,823 12,945 12,053 8,865 － 4 20 － － (6,368) (4,332) (39) (56,803) (61,517) (133,777) 153,768 1,259 (6,351) 83,932 272,749 4,601 (7,264) 110 159 (1,910) (5,771) (8,879) 48,436 11,269 (1,296) 755 1,376 1,594 (14,368)
Cash generated from operation Interest received Interest paid Income taxes paid	446,345 681,093 3,134 3,235 (30,947) (41,072) (13,023) (16,308)
Net cash inflows from operations	405,509 626,948
Cash flows from investing activities： Disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets measured at amortized cost Acquisition of investments accounted for using the equity method Increase in prepaid investment Disposal of non-current assets as held for sale Acquisition of property, plant and equipment Disposal of property, plant and equipment Acquisition of investment properties Decrease (Increase) in other financial assets Increase in other non-current assets	－ 52,725 (16,395) － － (120,000) (120,000) － － 7,425 (14,066) (25,352) 714 1,667 (50,546) (231) 79,411 (11,352) (1,322) (462)
Net cash outflows from investing activities	(122,204) (95,580)
Cash flows from financing activities： Increase in short-term loans Payments of long-term debt Repayments of long-term debt Increase in guarantee deposits received Payment of cash dividends Payments of lease liabilities Shares Buyback (Treasure Stocks)	118,364 66,884 270,000 2,840,000 (478,400) (3,220,000) 1,395 245 (168,000) (201,600) (3,651) (3,424) (32,393) －
Net cash outflows from financing activities	(292,685) (517,895)
Effect of change rate changes on cash and cash equivalents	7,511 72,599
Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year	(1,869) 86,072 144,915 58,843 $ 143,046 $ 144,915
Cash and cash equivalents at end of year

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OPTIMAX TECHNOLOGY CORPORATION Notes to Parent Company Only 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 is 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 parent company only financial report is presented in the Company's functional currency, New Taiwan Dollar (NTD).

2. Approval of financial statements

These parent company only financial statements were 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 Parent Company Only 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 Parent Company Only 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 Parent Company Only financial statements, please refer to Note 5.

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In preparing the Parent Company Only financial statements, investments in subsidiaries or associate companies are accounted for using the equity method. To ensure that the current year's profit or loss, other comprehensive income, and equity in the entity's financial statements are consistent with those attributable to the owners of the parent company in the consolidated financial statements, adjustments are made for certain accounting differences between the Parent Company Only and Consolidation basis in "Investments Accounted for Using the Equity Method," "Share of Profit or Loss of Subsidiaries and Associate Companies Accounted for Using the Equity Method," "Share of Other Comprehensive Income of Subsidiaries and Associate Companies Accounted for Using the Equity Method," and related equity items.

(3) 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.

(4) Foreign currency

When each entity prepares financial reports, transactions in currencies other than the 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 Parent Company Only 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.

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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 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.

(5) Inventories

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

(6) Investments accounted for using equity method

1. Investment in subsidiary

A subsidiary refers to an entity controlled by the Company. Under the equity method, the initial investment is recognized at cost, and the carrying amount is adjusted based on the Company's share of the subsidiary's profit or loss, other comprehensive income, and distributions. Additionally, changes in other interests in the subsidiary that the Company enjoys are recognized in proportion to the Company's ownership.

When changes in the Company's ownership interest in the subsidiary do not result in the loss of control, they are treated as equity transactions. The difference between the carrying amount of the investment and the fair value of the consideration paid or received is directly recognized in equity.

When the Company's share of losses in a subsidiary equals or exceeds its equity in that subsidiary (including the carrying amount of the subsidiary under the equity method and other long-term interests that constitute part of the Company's net investment in the subsidiary), losses will continue to be recognized to the extent of the Company's ownership percentage.

The excess of the acquisition cost over the fair value of identifiable assets and liabilities of the subsidiary acquired on the acquisition date, which constitutes a business, is recognized as goodwill. This goodwill is included in the carrying amount of the investment and is not amortized. Any excess of the fair value of identifiable assets and liabilities of the subsidiary over the acquisition cost is recognized as income in the period of acquisition.

When assessing impairment, the Company considers the cash-generating units of the overall financial report and compares their recoverable amount to the carrying amount. If the recoverable amount of the asset increases thereafter, the reversal of impairment loss is recognized as income. However, the carrying amount of the asset after the reversal of impairment loss should not exceed the amount that would have been determined if no impairment loss had been recognized, after deducting any necessary amortization. Impairment losses attributable to goodwill cannot be reversed in subsequent periods.

When the Company loses control over a subsidiary, it measures the remaining investment in the former subsidiary at its fair value as of the date control is lost. The difference between the fair value of the remaining investment and any consideration received, and the carrying amount of the investment at the date control is lost, is recognized in profit or loss for the period. Additionally, all

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amounts recognized in other comprehensive income related to that subsidiary are accounted for on the same basis as if the Company had directly disposed of the relevant assets or liabilities.

Unrealized gains and losses from upstream transactions between the Company and the subsidiary are eliminated in the individual financial statements. Unrealized gains and losses from downstream and lateral transactions between the Company and the subsidiary are recognized in the individual financial statements only to the extent that they do not relate to the Company's ownership interests in the subsidiary.

2. Investment in associate company

An associate company refers to an entity over which the Company has significant influence but is not a subsidiary or a joint venture. The Company accounts for investments in associates using the equity method.

Under the equity method, investments in associates are initially recognized at cost, and subsequent changes in the carrying amount reflect the Company's share of the associate's profit or loss, other comprehensive income, and distributions of profits. Additionally, changes in the Company's equity in the associate are recognized based on the ownership percentage.

If the Company does not subscribe for new shares issued by an associate, resulting in a change in its ownership percentage and consequently impacting the net equity of the investment, the adjustment to the capital surplus accounts for changes in the equity of associates and investments accounted for using the equity method. Any amounts related to the associate recognized in other comprehensive income are reclassified proportionally based on the reduced ownership percentage. This accounting treatment aligns with the basis required when associates directly dispose of relevant assets or liabilities. If the adjustment requires a debit to capital surplus and the balance of the capital surplus generated by investments accounted for using the equity method is insufficient, the difference is debited to retained earnings.

When the Company's share of losses in an associate equals or exceeds its equity in that associate (including the carrying amount of the investment under the equity method and the company's share of other comprehensive income), further losses are no longer recognized. The Company only recognizes additional losses and liabilities within the scope of statutory obligations, presumed obligations, or payments already made on behalf of the associate.

Impairment assessments involve comparing the total carrying amount of the investment (including goodwill) to its recoverable amount and recognizing impairment losses without allocating them to any specific asset, including goodwill. Any reversal of impairment losses is recognized only to the extent that the recoverable amount of the investment increases subsequently.

When the Company ceases to apply the equity method for an investment, the remaining equity interest in the former associate is measured at fair value, and any difference between the fair value and the carrying amount of the investment at the cessation date is recognized in profit or loss for the period. Additionally, all amounts related to the former associate recognized in other comprehensive income are accounted for on the same basis required when associates directly dispose of relevant assets or liabilities.

Gains or losses arising from transactions with associates are recognized in the financial statements only to the extent that they do not relate to the Company's equity interest in the associate company.

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(7) 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 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.

(8) 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.

(9) 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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- (10) Impairment of non financial assets

The company assesses on each balance sheet date whether there are any indications that real property, plant and equipment, right-of-use assets, investment real estate 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 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.

(11) Financial instruments

Financial assets and financial liabilities are recognized on the Parent Company Only balance sheet of the 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 company are financial assets

measured at amortized cost 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 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 assets

• (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:

• (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.

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• (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. 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 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 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.

• 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 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.

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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 company after deducting all its liabilities from its assets. The equity instruments issued are recognized by the 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 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.

(12) Liability provision

When the 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.

(13) Income recognition

After the company recognizes the performance obligations in the customer contract, it allocates the transaction price to each performance

obligations, and recognize 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.

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(14) Rent

The 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 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 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 Parent Company Only 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 (8) 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 was 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.

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 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 Parent Company Only balance sheet.

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(15) 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.

(16) Income taxes

1. Current income tax:

The 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.

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.

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Taxable temporary differences related to investment in subsidiaries are recognized as deferred income tax liabilities, but if the 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 were 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 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 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 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. Due to the rapid changes in the industry, the 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

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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 company. The 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 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 realized 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 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 $ 921 125,730 16,395 $ 143,046	December 31, 2023
		$ 948 128,157 15,810 $ 144,915

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(2) Financial assets at amortized cost

Financial assets at amortized cost
Current Domestic investment Time deposits with original maturity more than three months Restricted time deposits Total Interest rate range	December 31, 2024 $ 3,500 16,395 $ 19,895 1.69%~4.55%	December 31, 2023
		$ 3,500 －
		$ 3,500 1.565%

Financial assets at amortized cost for information on current guarantees, please refer to Note 8.

(3) Net notes and accounts receivable

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.

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.

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

follows:
Expected credit loss rate Carrying amount Loss allowance for lifetime expected credit losses Amortized cost			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	0.22％～ 0.41％ $ 23,931 (99) $ 23,832	0.25％～ 0.49％ $ 11,077 (52) $ 11,025	0.30％～ 100％ $ 121,317 (Note) (69,088) $ 52,229	$ 786,644 (71,265) $ 715,379

Expected credit loss rate Carrying amount Loss allowance for lifetime expected credit losses Amortized cost			December 31, 2023	December 31, 2023	December 31, 2023
	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 company holds collateral for accounts receivable overdue by more than 121 days in the amount of NT$60,281 thousand as a guarantee, therefore no provision for impairment loss has been made.

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

Balance at the beginning of the period Impairment loss recognized for the current period Write-off amount in the current period Balance at the end of the period	2024 Notes receivable Accounts receivable $ 3,413 $ 69,402 － 4,089 － (2,226) $ 3,413 $ 71,265	2024 Notes receivable Accounts receivable $ 3,413 $ 69,402 － 4,089 － (2,226) $ 3,413 $ 71,265
		Accounts receivable
		$ 69,402 4,089 (2,226) $ 71,265

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2023

(4) _(5) _	Notes receivable Balance at the beginning of the period $ 3,413 Reversal of impairment loss for the current period － Write-off amount in the current period － Balance at the end of the period $ 3,413 Other accounts receivable The information on the changes in allowance for doubtful accounts is as follows: 2024 Balance at the beginning of the period $ 12,009 Reversal of impairment loss for the current period (513) Balance at the end of the period $ 11,496 Inventories December 31, 2024 Finished goods $ 148,640 Work in process 211,722 Raw materials 241,211 Inventory in transit 1,449 Total $ 603,022 December 31, 2024 Operating lease receivable $ 13 Refundable business tax 10,274 Other accounts receivable-other 11,925 Other accounts receivable- related party 162,606 Sub-total 184,181 Less: loss allowance (11,496) Total $ 173,322	Accounts receivable
		$ 98,393 (22,120) (6,871) $ 69,402 December 31, 2023
		$ － 12,084 601 189,597
		for other receivables 2023 $ 4,830 7,179 $ 12,009 December 31, 2023 $ 183,764 239,304 254,295 9,591 $ 686,954 202,282 (12,009) $ 190,273

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The current period recognized inventory-related expenses are as follows:

Inventories sold Gain from price recovery of inventory Reversal of inventory write-down Income from Sale of Scrap and Wastes Others Total	2024 $ 1,232,850 (77,263) 58,661 (20,784) 228 $ 1,193,692	2023 $ 1,494,781 (49,981) 68,561 (42,037) 151 $ 1,471,475

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 subsidiaries Non-listed company OPTIMAX OPTOELECTRONIC (MAURITIUS) CORP. ART OPTRONICS CORP. Significant associated company Non-listed company Intelligent Information Security Technology INC.	December 31, 2024 $ 73,345 844 36,000 $ 110,189	December 31, 2023
		$ 41,186 834 107,663 $ 149,683

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 [391 x 99] intentionally omitted <==

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

Company Name December 31, 2024 December 31, 2023
OPTIMAX OPTOELECTRONIC
100 ％ 100 ％
(MAURITIUS) CORP.
ART OPTRONICS CORP. 100 ％ 100 ％
Intelligent Information Security
24.54 ％ 24.54 ％
Technology INC.
----- End of picture text -----

For information regarding the business nature, principal place of business, and country of registration of the aforementioned subsidiaries and associates, please refer to Table 5, 'Information on Investee Companies, Including Name, Location, etc.' and Table 6, 'Information on Investments in Mainland China.

27

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.

28

• (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)

29

(7) Property, plant and equipment

==> picture [456 x 594] intentionally omitted <==

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

2024
Balance at
Balance at
Item Additions Disposals Reclassification December 31,
January 1, 2024
2024
Cost
－ － －
Land $ 364,697 $ $ $ $ 364,697
Buildings 2,493,034 1,228 (65,107) (51,631) 2,377,524
Machinery 3,074,656 14,334 (275,721) 9,280 2,822,549
Transportation － －
101,787 (742) 101,045
equipment
－
Office equipment 97,634 836 (14,015) 84,455
－
Other equipment 37,794 314 (6,471) 31,637
－ －
Work in Progress 21,267 (9,280) 11,987
Sub-total 6,190,869 16,712 (362,056) (51,631) 5,793,894
Accumulated
depreciation
Buildings 1,463,145 36,329 (62,548) (23,136) 1,413,790
－
Machinery 2,939,271 7,897 (266,382) 2,680,786
Transportation －
98,066 215 (729) 97,552
equipment
－
Office equipment 89,918 281 (13,278) 76,921
－
Other equipment 30,396 485 (6,352) 24,529
Sub-total 4,620,796 45,207 (349,289) (23,136) 4,293,578
Accumulated
impairment
－ － －
Buildings 17 17
－ －
Machinery 9,504 (4,316) 5,188
Transportation － － －
1,157 1,157
equipment
－ －
Office equipment 2,707 (16) 2,691
－ － －
Other equipment 28 28
－ －
Sub-total 13,413 (4,332) 9,081
Total $ 1,556,660 $ (28,495) $ (8,435) $ (28,495) $ 1,491,235
----- End of picture text -----

30

==> picture [456 x 629] intentionally omitted <==

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

2023
Balance at
Balance at
Item Additions Disposals Reclassification December 31,
January 1, 2023
2023
Cost
－ － －
Land $ 364,697 $ $ $ $ 364,697
－
Buildings 2,495,494 545 (3,005) 2,493,034
－
Machinery 3,574,341 13,790 (513,475) 3,074,656
Transportation －
103,182 108 (1,503) 101,787
equipment
－
Office equipment 96,525 1,216 (107) 97,634
－
Other equipment 40,741 5,169 (8,116) 37,794
－ －
Work in Progress 16,067 5,200 21,267
Sub-total 6,674,980 36,895 (526,206) 5,200 6,190,869
Accumulated
depreciation
－
Buildings 1,429,266 36,749 (2,870) 1,463,145
－
Machinery 3,434,172 8,274 (503,175) 2,939,271
Transportation －
99,175 363 (1,472) 98,066
equipment
－
Office equipment 89,642 377 (101) 89,918
－
Other equipment 37,998 450 (8,052) 30,396
－
Sub-total 5,090,253 46,213 (515,670) 4,620,796
Accumulated
impairment
－ － －
Buildings 17 17
－ －
Machinery 9,542 (38) 9,504
Transportation － －
1,158 (1) 1,157
equipment
－ － －
Office equipment 2,707 2,707
－ － －
Other equipment 28 28
－ －
Sub-total 13,452 (39) 13,413
Total $ 1,571,275 $ (9,318) $ (10,497) $ 5,200 $ 1,556,660
----- End of picture text -----

31

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 were pledged as collateral of long-term borrowings and loans, please refer to Note 8.

(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:

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

• (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.

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2. Leasing liabilities

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

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

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 lowvalue 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 company include land, buildings, machinery and equipment, etc., and the contract period ranges from 1 to 5 years. The lease contract is negotiated separately 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.

33

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

		2024	2023
Rental income	$	53,077	$ 48,752
es recognized by the company		based on the operating lease contract
	December 31,2024		December 31, 2023
The 1st year	$	58,183	$ 47,546
The 2nd year		57,034	46,636
The 3th year		20,863	45,886
The 4th year		14,040	7,273
The 5th year		10,470	－
Total	$	160,590	$ 147,341

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

(10) Investment property

Investment property
			2024
Item	Balance at January 1, 2024	Additions	Disposals	Reclassification	Balance at December 31, 2024
Cost Land Buildings Sub-total Accumulated depreciation Buildings Sub-total Accumulated impairment Buildings Total	$ 133,248 731,378	$ 26,662 23,884	$ － (650)	$ － 51,631	$ 159,910 806,243
	864,626	50,546	(650)	51,631	966,153
	306,796	14,302	(630)	23,136	343,604
	306,796	14,302	(630)	23,136	343,604
	26 $ 557,804	－ $ 36,244	－ $ (20)	－ $ 28,495	26 $ 622,523

			2023
Item	Balance at January 1, 2023	Additions	Disposals	Reclassification	Balance at December 31, 2023
Cost Land Buildings Sub-total Accumulated depreciation Buildings Sub-total Accumulated impairment Buildings Total	$ 133,248 731,378	$ － －	$ － －	$ － －	$ 133,248 731,378
	864,626	－	－	－	864,626
	292,915	13,881	－	－	306,796
	292,915	13,881	－	－	306,796
	26 $ 571,685	－ $ (13,881)	－ $ －	－ $ －	26 $ 557,804

34

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

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 were 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 was as follows:

Fair value	December 31, 2024 $ 1,040,732	December 31, 2023 $ 970,169

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 $ 51,301 $ 18,195	2023
		$ 46,796 $ 18,031

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 was registered under the name of the company's chairman, and a contract for registered proxy was 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 Prepayment of investment Total	December 31, 2024 $ 414 932 6,960 120,000 $ 128,306	December 31, 2023
		$ 73 672 6,960 － $ 7,705

35

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%.

(12) Short-term borrowings

Collateral borrowings Interest rate	December 31, 2024 $ 215,075 1.6％~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 $ 120,744	December 31, 2023 $ 130,842

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

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 $ 67,650 7,703 6,258 2,421 1,863 3,067 28,964 47,156 $ 165,082	December 31, 2023
		$ 59,574 7,481 6,121 2,347 2,256 1,093 21,221 20,717 $ 150,810

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

36

(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.

- (16) Long term borrowings

erm borrowings
December 31, 2024 Medium and long-term bank mortgage loans $ 1,001,600 Less: part due within one year (21,600) Long-term borrowings $ 980,000 Interest rate 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.

37

(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 and2023, respectively.

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 were 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

38

The changes in net defined benefit were 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 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	Fair value of planned assets	Net defined benefit
	$ (65,959)	$ 72,387	$ 6,428
	(48) (825)	－ 940	(48) 115
	(873)	940	67
	－ － 42 (1,287)	6,247 － － －	6,247 － 42 (1,287)
	(1,245)	6,247	5,002
	－	1,843	1,843
	510 $ (67,567) Present value of defined benefit obligation	(510) $ 80,907 Fair value of planned assets	－ $ 13,340 Net defined benefit
	$ (66,200)	$ 69,290	$ 3,090
	(90) (985)	－ 1,078	(90) 93
	(1,075)	1,078	3
	－ (679) (1,827) (301)	374 － － －	374 (679) (1,827) (301)
	(2,807)	374	(2,433)
	－	5,768	5,768
	4,123 $ (65,959)	(4,123) $ 72,387	－ $ 6,428

39

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％

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

following 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.

40

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 1year Determining the average maturity of benefit obligations period	December 31, 2024 $ － 10.5 years	December 31, 2023
		$ 5,676 11.3 years

(18) Equity

1. Common stock

Rated equity Issued share capital	December 31, 2024 $ 10,000,000 $ 1,690,000	December 31, 2023
		$ 10,000,000 $ 1,700,000

On December 19, 2024, the Board of Directors of the Company resolved to reduce capital by canceling 1,000 thousand shares of treasury stock, with a cancellation amount of NT$32,393 thousand. The capital reduction base date was set as December 19, 2024, and the relevant statutory registration procedures have been duly completed. As of December 31, 2024 and 2023, the Company's authorized capital was 1,000,000 thousand shares, with a par value of NT$10 per share. The issued shares amounted to 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 a resolution to distribute dividends to shareholders.

41

• (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

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.

locate profits 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.

42

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

locate profits 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 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 $ (3,719) 1,349 － $ (2,370) 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 $ (26,229) － 26,223 $ (6) Unrealized Gain or Loss on Financial Assets Measured at fair value through other comprehensive income $ (32,702) － 42,428 (35,955) $ (26,229)	Total
			$ (29,948) 1,349 26,223 $ (2,376) Total
			$ (35,651) (770) 42,428 (35,955) $ (29,948)

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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

Reasons for Share Repurchase Transfer shares to employees Protect the company's credit and shareholders' equity Total	Beginning balance of shares 2,000 － 2,000	Shares repurchased in current period － 1,000 1,000	Shares cancelled in current period － (1,000) (1,000)	Ending balance of shares
				2,000 － 2,000

Reasons for Share Repurchase Transfer shares to employees		January 1~ December 31, 2023	January 1~ December 31, 2023
	Beginning balance of shares 2,000	Shares repurchased in current period －	Shares cancelled in current period －	Ending balance of shares 2,000

• (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) To protect the company's credit and shareholders' equity, the Company, on October 17, 2024, resolved at the board meeting to repurchase 1,000 thousand shares of treasury stock. The repurchase period was 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 thousand shares.

44

(19) Earnings per share

Basic earnings per share(NTD) Diluted earnings per share(NTD)	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:

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

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 NTD) 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 (NTD)	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

45

(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(13) for the explanation of the income of the company.

2. Contract balance

ntract balance
Accounts receivable (Note 6 (3)) Contract liabilities-current (list other current liabilities) Commodity sales	December 31, 2024 $ 715,379 $ 2,791	December 31, 2023
		$ 548,234
		$ 3,374

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

3. Refund liabilities

The 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

r income
Rental income Less: depreciation Other Total	2024 $ 53,077 (14,251) 8,096 $ 46,922	2023
		$ 48,752 (13,603) 7,703 $ 42,852

(22) Other gains and losses

r 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) － 60,591 4,332 (454) (2,068) $ 50,328	2023
		$ (8,865) － 6,368 4,579 39 (1,023) (9,150) $ (8,052)

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(23) Financial costs

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

(24) Income Tax

1. The income tax expenses of the Company in 2024 and 2023 were as follows:

Tax calculated based on profit before tax and statutory tax rate 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 $ 74,814 (12,714) － (62,100) 35,642 1,158 － － $ 36,800	2023
		$ 39,520 (19,583) (7,191) (12,746) 12,933 8,737 4,243 (848) $ 25,065

The main components of income tax expense recognized in profit and loss were 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 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

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4. Deferred income tax assets and liabilities

• (1) The analysis of deferred income tax assets was 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		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	$ (4,689) (15,453) (67) (867) (12,536) 170 151 (1,342) 225 5,793 $ (28,615)	$ － － － － － － － － － － $ －	$ － 18,805 15,662 4,570 66,207 170 3,313 862 739 5,793 $ 116,121

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		2023	2023
	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

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(2) The analysis of deferred income tax liabilities was 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 $ 28,965 $ 301,470	December 31, 2023
		$ 370,697 $ 236,537

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

6. The final settlement and declaration of our company's profit-seeking enterprise income tax has been approved by the tax collection authority up to 2022. According to the Income Tax Act, the losses from the previous ten years that have been approved by the tax collection authority can be deducted from the current year's net income, and the remaining taxable income will be assessed for income tax. As of December 31, 2024, the company's undeducted loss and the deduction exclusion period was as follows:

Year Declared amount/ Expiry year Loss deduction incurred Assessed amount 2020 Assessed amount 2030 $ 57,930

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(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 $ 114,704 $ $ 366,841
－
Labor and health insurances 27,670 10,404 38,074
－
Pension 10,779 3,784 14,563
－ －
Director’s Remuneration 2,127 2,127
－
Other employee benefits 21,713 3,975 25,688
Depreciation 39,072 9,861 14,705 63,638
－ －
Amortization 49 49
----- End of picture text -----

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

2023
Function Recognized in
Recognized Recognized in
Nature in cost of operating non- Total
operating
sales expenses
expenses
Employee benefits expenses:
－
Salaries and wages $ 246,767 $ 120,310 $ $ 367,077
－
Labor and health insurances 27,328 10,413 37,741
－
Pension 13,729 865 14,594
－ －
Director’s Remuneration 1,214 1,214
－
Other employee benefits 21,254 4,162 25,416
Depreciation 39,303 10,396 14,626 64,325
－ －
Amortization 45 45
----- End of picture text -----

• (1) The average number of employees of the company in 2024 and 2023 are 590 and 594 respectively, of which the number of directors who are not employees are 10.

• (2) The company's average employee benefits in 2024 and 2023 were NT$768 thousand and NT$762 thousand, respectively, and the average employee salaries were NT$632 thousand and NT$629 thousand, respectively, and the average employee salary cost adjustment change situation is 0.48%.

• (3) The company adopted an audit committee to replace the supervisory system in 2024 and 2023. Therefore, there is no supervisor's remuneration.

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• (4) The salary and remuneration policies of the company's directors, managers and employees are as follows:

  • A. Directors: The remuneration of the directors of the company is handled in accordance With the company's articles of association, and the board of directors is authorized to be based on the degree of participation and contribution of the directors to the company's operations. The value is determined after the domestic and foreign industry standards.

  • B. Managers: The amount of remuneration assigned to the managers of the company is determined by the remuneration committee and submitted to the board of directors based on their positions, contributions, and the company's operating performance for the year.

  • C. Employees: The company's employee salary and remuneration policy is to provide employees with average salary and benefits. It is determined based on the company's operating performance and each employee's position, contribution, and performance to determine the year-end bonus and related remuneration. The amount and distribution method are recommended by the remuneration committee to the board of directors for approval.

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 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.

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

The distribution amounts for employees’ and directors’ remuneration for the year 2022, as resolved, were 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).

(26) Cash flow information

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

• (1) Non-current assets held for sell

) 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	2024 $ － 2,827 (3,019) 192 $ －	2023
		$ 7,425 2,703 (2,827) 124 $ 7,425

(2) Property, plant and equipment

) 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	2024 $ 16,712 1,093 (3,067) (672) $ 14,066 2024 $ 714 5,600 (5,830) 230 $ 714	2023
		$ 36,895 178 (1,093) (10,628) $ 25,352 2023
		$ 1,667 5,600 (5,600) － $ 1,667

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(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 $ nges in liabilities from financing activities Short-term borrowings At January 1, 2024 $ 98,097 Changes in cash flow from financing activities 118,364 Changes in lease liabilities － Exchange influence (1,386) At December 31, 2024 $ 215,075 Short-term borrowings At January 1, 2023 $ 31,499 Changes in cash flow from financing activities 66,884 Changes in lease liabilities － Exchange influence (286) At December 31, 2023 $ 98,097		2024 50,546 $ － － 50,546 $ Long-term borrowings Guarantee deposits received $ 1,210,000 $ 8,432 (208,400) 1,395 － － － － $ 1,001,600 $ 9,827 Long-term borrowings Guarantee deposits received $ 1,590,000 $ 8,187 (380,000) 245 － － － － $ 1,210,000 $ 8,432		2023	Total Liabilities from Financing Activities
				－ 231 － 231 Lease liabilities $ 14,185 (3,651) 2,067 － $ 12,601 Lease liabilities $ 16,009 (3,424) 1,600 － $ 14,185
					$ 1,330,714 (92,292) 2,067 (1,386) $ 1,239,103 Total Liabilities from Financing Activities
					$ 1,645,695 (316,295) 1,600 (286) $ 1,330,714

2. Changes in liabilities from financing activities

(27) Capital management

Based on the characteristics of the current operating industry and the future development of the 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.

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(28) Financial instruments

1. Categories of financial instruments

ncial instruments tegories of financial instruments
Financial assets Cash and Equivalent Cash Financial assets measured at amortized cost-current Notes receivable Accounts receivable Other receivable Other financial assets- non-current Guarantee Deposits Paid Financial liabilities Short-term borrowings Notes payable Accounts payable Other payable Long-term debt (including current portion) Guarantee deposit received	December 31, 2024 $ 143,046 19,895 305 715,379 173,322 3,521 6,960 215,075 178 120,744 78,374 1,001,600 9,827	December 31, 2023
		$ 144,915 3,500 296 548,234 190,273 82,932 6,960 $ 98,097 200 130,842 150,810 1,210,000 8,432

2. Financial risk management

The financial risk management objective of the 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 company is mainly exposed to market risks such as changes in foreign currency exchangerates and changes in interest rates.

(1) Foreign currency exchange rate risk

The operating activities of the 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.

54

A. Information about the 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 Financial assets Monetary items JPY USD EUR KRW CNY Non-Monetary items JPY 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
	65,993,990 32,130,586 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				1,108 84,285 4 － 1,388 (11,977) (3,168)
	Foreign currency	Exchange rate	NTD		Sensitivity analysis
				Degree of variation	Effect on profit or loss (before tax)	Effect on profit or loss
	415,835,943 29,214,927 1,307 40,000 3,051,610 50,134,185 892,752,651 1,025,767 173,684 113,850	0.2172 30.73 33.98 0.0239 4.327 0.2159 0.2172 30.71 30.74 4.391	90,320 897,645 44 1 13,204 10,822 193,906 31,501 5,340 500	+10％ +10％ +10％ +10％ +10％ +10％ +10％	9,032 89,764 4 － 1,320 (19,391) (3,150)	7,226 71,812 4 － 1,056 (15,512) (2,520)

55

• B. Monetary items of the company have a significant impact due to exchange rate fluctuations and all exchange loss recognized was NT$60,591 thousand and NT$4,579 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 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 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 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 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 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 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 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 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 Company’s financial liabilities based on contractual undiscounted payments.

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Non-derivative financial liabilities Notes and accounts payable Other payables Lease liabilities Loan Guarantee deposit received Total		December 31, 2024	December 31, 2024	December 31, 2024
	Within 1 year	2~3 years	4~5 years	More than 5 years	Total
	$ 120,922 78,374 4,121 239,813 277 $ 443,507	$ － － 8,493 908,540 7,187 $ 924,220	$ － － 504 126,188 2,363 $ 129,055	$ － － － － － $ －	$ 120,922 78,374 13,118 1,274,541 9,827 $ 1,496,782

Non-derivative financial liabilities Notes and accounts payable Other payables Lease liabilities Loan Guarantee deposit received Total		December 31, 2023	December 31, 2023	December 31, 2023
	Within 1 year	2~3 years	4~5 years	More than 5 years	Total
	$ 131,042 72,599 3,795 98,460 245 $ 306,141	$ － － 6,785 1,296,968 1,000 $ 1,304,753	$ － － 4,147 － 7,187 $ 11,334	$ － － 216 － － $ 216	$ 131,042 72,599 14,943 1,395,428 8,432 $ 1,622,444

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:

• 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).

57

• (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 was no change in the fair value of financial assets in 2024 and 2023.

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

Financial assets measured at fair value through other comprehensive gains and losses Financial assets measured at fair value through other comprehensive gains and losses		January	1 ~ December	31, 2024
	At January 1 $ －	Additions in the period $ － January	Recognized in other comprehensi ve income $ － 1 ~ December	Disposals in the period $ － 31, 2023	At December 31 $ －
	At January 1 $ 11,282	Additions in the period $ －	Recognized in other comprehensi ve income $ 41,443	Disposals in the period $ (52,725)	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 It can be compared to the listed OTC company law	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		Weighted average P/B multiplier	The higher the multiplier, the higher the fair value

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7. Related-party Transactions

(1) Name and relationship of related parties

Name of related party Relationship with the Company ART OPTRONICS CORP. Subsidiary Optimax Technology (Suzhou) Co., Ltd. Subsidiary Peter Chao Main management 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)

• 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 [352 x 84] 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 were 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. Purchases

Name of related party ART OPTRONICS CORP.	2024 $ 21,358	2023 $ 16,274

The purchase transactions with the above-mentioned related parties are handled on the terms of general customers.

3. Manufacturing cost - processing cost

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

59

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

Name of related party Lihuasheng Hong Kong	2024 $ 420	2023 $ 9,869

5. Operating expenses

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

Name of related party 2024 2023
Optimax Technology
$ 7,563 $ 7,463
(Suzhou) Co., Ltd
Lihuasheng Hong Kong 98 3,473
－
Lihuasheng Technology 5,123
$ 12,784 $ 10,936
----- End of picture text -----

6. Net Accounts receivable

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

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 -----

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

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

2024 2023
Beginning balance $ 64,333 $ 88,560
Reclassification for the －
(64,333)
Current Period
Reversal of Impairment －
(24,227)
Loss for the Current Period
－
Ending balance $ $ 64,333
----- End of picture text -----

60

7.Other receivables (excluding advances to suppliers)

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

Name of related party December 31, 2024 December 31, 2023
－
Lihuasheng Hong Kong $ $ 12,062
－
Less: Allowance for losses (12,009)
－
$ $ 53
----- End of picture text -----

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

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

2024 2023
Beginning balance $ 12,009 $ 4,830
Reclassification for the
－
(12,009)
Current Period
Reversal of Impairment
－
7,179
Loss for the Current Period
－
Ending balance $ $ 12,009
8.Accounts payable
Name of related party December 31, 2024 December 31, 2023
－
ART OPTRONICS CORP. $ 2,888 $
－
Lihuasheng Hong Kong 133
$ 2,888 $ 133
9.Loan to related party
Other receivables
Name of related party December 31, 2024 December 31, 2023
Optimax Technology
$ 162,606 $ 177,535
(Suzhou) Co., Ltd
Interest income
Name of related party 2024 2023
Optimax Technology
－ －
$ $
(Suzhou) Co., Ltd
----- End of picture text -----

61

(3) Rewards for the main management

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

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

8. Pledged assets

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

Carry amount
December 31, December 31,
Item Content
2024 2023
Financial assets
Time deposits pledged to financial
measured at
－
institutions as collateral for short-term $ 16,395 $
amortized cost -
loans
current
Demand deposits provided to financial
Other financial
institutions as collateral for short-term 3,521 82,932
assets-current
loans
Provided to financial institutions as
Real estate, plant and
collateral for long- term and short-term 1,295,083 1,221,081
equipment
loans
Provided to financial institutions as
－
Investment Property collateral for long- term and short-term 550,753
loans
Guarantee Deposit Customs Guarantee Deposits and Lease
6,960 6,960
Paid Deposits, etc.
Total $ 1,872,712 $ 1,310,973
----- End of picture text -----

62

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:

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----- 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.

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.

63

• 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.

14. Segment information

Please refer to the Consolidated Financial Statements of the year in 2024.

64

【 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)
		Amounts of											Collateral Limit on Ceiling
No. (Note 1)	Creditor	Borrower Related Party Transaction (Note 2) Is a related party Maximum balance for 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.	Other 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.

65

【 Attached Table 2 】

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

					(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)
Investing company	Marketable securities type and name Relation with the securities issuer		Financial statement account		As of December 31, 2024			Footnote
				Shares	Carrying amount	Ownership (%)	Fair value
OPTIMAX	Common Stock: (Hong Kong) 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％	－

66

【 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.

67

【 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.

68

【 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	(IC) Design Industry	120,000	120,000	24,000,000	24.54％	36,000	(14,896)	(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.

69

【 Attached Table 6 】

Information on investments in Mainland China

Investee in Mainland	Main business	Paid-in capital Investment	Paid-in capital Investment	Accumulated amount of remittance from Taiwan	Amount remitted from Taiwan or amount remitted back to Taiwan for the current period Accumulated amount of remittance from Taiwan Ownership held by Optimax	Amount remitted from Taiwan or amount remitted back to Taiwan for the current period Accumulated amount of remittance from Taiwan Ownership held by Optimax	Amount remitted from Taiwan or amount remitted back to Taiwan for the current period Accumulated amount of remittance from Taiwan Ownership held by Optimax	Amount remitted from Taiwan or amount remitted back to Taiwan for the current period Accumulated amount of remittance from Taiwan Ownership held by Optimax	Investment Income (loss) recognized	Carrying amount of investments	Investment returns have been repatriated
China	activities	(Note 5) method		as of January 1, 2024 (Note 5)	Remitted to mainland China	Remitted back to Taiwan	as of December 31, 2024 (Note 5) (direct or indirect)		for the current period (Note 2)	as of December 31, 2024	as of the end of this period
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.

70

【 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).

71

OPTIMAX TECHNOLOGY CORPORATION

STATEMENT OF CASH AND CASH EQUIVALENTS

DECEMBER 31, 2024

	Expressed in thousands of NTD	Expressed in thousands of NTD
Item	Description	Amount
Cash on hand	Foreign currency (included USD & JPY…etc.)	$ 921
Cash in banks Checking Account Current Account Deposit Foreign currency Deposit Cash Equivalents Bank Time Deposit	JPY 41,006,615 USD 2,472,470 CNY 2,074,577 Maturity date：February 19, 2025 Interest rate：4.55% USD 500,000	44 26,717 8,607 81,072 9,290 16,395
Total		$ 143,046
Exchange rate： JPY 0.2099 USD 32.79 CNY 4.478

72

STATEMENT OF ACCOUNTS RECEIVABLE

DECEMBER 31, 2024

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

Expressed in thousands of NTD
Client Name Description Amount Note
Non-related parties:
Company A $ 148,873
Company B 120,617
Company C 97,835
Company D 79,666
Company E 65,968
Company F 62,559
Company G 62,257
Others (Amounts less than 148,869
5%)
Total 786,644
Less ： Allowance for losses (71,265)
Total (Net) $ 715,379
----- End of picture text -----

73

STATEMENT OF INVENTORIES

DECEMBER 31, 2024

Expressed in thousands of NTD

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

Amount
Item Description Note
Cost Net realizable value
Finished goods $ 166,105 $ 164,873
Work in process 243,182 214,820
Raw materials 286,312 264,750
In-transit inventory 1,449 1,449
Subtotal 697,048 $ 645,892
Allowance for (94,026)
Inventory Write-
down
Total $ 603,022
STATEMENT OF PREPAYMENTS
DECEMBER 31, 2024
Expressed in thousands of NTD
Item Description Amount
Prepaid insurance
Property insurance $ 52
premiums
Other prepaid expenses Others 136
Prepaid Purchases 5,658
Input Tax 944
Total
$ 6,790
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74

STATEMENT OF OTHER CURRENT FINANCIAL ASSETS

DECEMBER 31, 2024

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

Expressed in thousands of NTD
Item Description Amount Note
Notes Receivable $ 305
Advance payment 1,007
Demand deposits
provided to financial
Other current financial assets 3,521
institutions as collateral
for short-term loans
Total $ 4,833
----- End of picture text -----

75

STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD

FOR THE YEAR ENDED DECEMBER 31, 2024

Expressed in thousands of NTD

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

Market Value or
Balance, January 1, 2024 Additions in Investment Investment Conversion Balance, December 31, 2024
Net Assets Value
gains and difference
losses recognized Others
Name Collateral Note
recognized using the (Note) Unit Price
Shares Amounts Shares Amounts Shares % Amounts Total Amount
using the equity (NT$)
equity method method
OPTIMAX
OPTOELECTRONIC 19,000,000 $ 41,186 － $ － $ 3,830 $ 1,349 $ 26,980 19,000,000 100 ％ $ 73,345 － $ 73,345 None
(MAURITIUS) CORP.
ART OPTRONICS CORP. 225,000 834 － － 10 － － 225,000 100 ％ 844 － 844 None
Intelligent Information
24,000,000 107,663 － － (71,663) － － 24,000,000 24.54 ％ 36,000 － 36,000 None
Security Technology INC.
Total $ 149,683 － $ － $ (67,823) $ 1,349 $ 26,980 $ 110,189 － $ 110,189
----- End of picture text -----

Note : Other equity method investments recognize an unrealized loss of NT$26,980 thousand through other comprehensive income on equity instruments measured at fair value.

76

STATEMENT OF CHANGES IN RIGHT-OF-USE ASSETS

FOR THE YEAR ENDED DECEMBER 31, 2024

Expressed in thousands of NTD

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

Balance, Balance,
Item Additions Disposals Reclassification
January 1, 2024 December 31, 2024
Cost ：
－ － －
Land $ 12,849 $ $ $ $ 12,849
－
Transportation equipment 3,751 2,067 (1,560) 4,258
－ － －
Office equipment 1,600 1,600
Subtotal 18,200 2,067 (1,560) － 18,707
Accumulated depreciation ：
Land 2,570 2,570 － － 5,140
－
Transportation equipment 2,215 1,293 (1,560) 1,948
－ －
Office equipment 67 266 333
Subtotal 4,852 4,129 (1,560) － 7,421
－ －
Total (Net) $ 13,348 $ (2,062) $ $ $ 11,286
----- End of picture text -----

77

STATEMENT OF SHORT-TERM BORROWINGS

DECEMBER 31, 2024

Expressed in thousands of NTD

Creditor	Type of loan	Balance, December 31, 2024	Repayment period of the amount moved	Interest rate range	Loan Commitments Collateral	Loan Commitments Collateral	Note
SUNNY Bank	Secured loan	$ 121,000	114.10.18～114.10.18	2.6200％	$ 200,000 Note 8
Taiwan Cooperative Bank First Bank	Secured loan Secured loan	57,528 36,547	114.01.03～114.05.21 114.02.03～114.04.28	1.6％～1.6913％ 1.8298％～2.725％	230,000 Note 8 230,000 Note 8
Total		$ 215,075

78

STATEMENT OF ACCOUNTS PAYABLE

DECEMBER 31, 2024

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

Expressed in thousands of NT
Vendor Name Description Amount Note
Non-related parties:
Company A $ 25,293
Company B 20,940
Company C 11,311
Company D 7,109
Company E 6,693
Company F 6,140
Accounts Payable (Amounts
Others 43,258
less than 5%)
Total $ 120,744
----- End of picture text -----

STATEMENT OF OTHER LIABILITIES

DECEMBER 31, 2024

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

Expressed in thousands of NT
Item Description Amount
Current
Contract liabilities $ 2,791
Notes payable 178
Advances from Customers 420
Temporary Receipts 3,497
Collection on behalf of others 8,962
Total $ 15,848
Non-current
Deposits received $ 9,827
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79

STATEMENT OF LONG-TERM BORROWINGS

DECEMBER 31, 2024

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

Expressed in thousands of NT
Creditor Loan Amount Contract Period Interest rate Collateral Note
Mid-term mortgage loan $ 807,000 Every 3 months is one term, with a total of 12 terms for repaying 2.72 ％ Real Estate
the loan. From the 1st to the 11th term, a principal repayment of
SUNNY Bank
NT$30,000 thousand is made each term. The remaining unpaid
loan balance is repaid in full at the end. The borrower may repay
the loan in advance, and such repayment shall be included in the
subsequent repayment amounts. The due date is October 6, 2026 .
Taiwan Cooperative Bank 194,600 Every 3 months is one term, with a total of 20 terms for repaying 2.675% Real Estate
the loan. From the 1st to the 10th term, a principal repayment of
NT$5,400 thousand is made each term. From the 11th to the 19th
term, a principal repayment of NT$10,800 thousand is made each
term. The remaining unpaid loan balance is repaid in full at the
end. The due date is August 22, 2029.
Subtotal 1,001,600
Less: Long-term borrowings
(21,600)
due within one year
Total $ 980,000
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STATEMENT OF LEASE LIABILITIES

DECEMBER 31, 2024

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Expressed in thousands of NT
Item Rental period Discount Rate Amount
Land 5 years 2.5580 ％ $ 8,988
Transportation
3 years 1.8513 ％ ~2.5580 ％ 2,326
equipment
Office equipment 6 years 2.5580 ％ 1,287
Total 12,601
Less ： current (3,851)
Lease liabilities-non-
$ 8,750
current
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STATEMENT OF OPERATING REVENUE

FOR THE YEAR ENDED DECEMBER 31, 2024

		Expressed in thousands of NT	Expressed in thousands of NT
Item	Description	Amount	Note
Commodity sales revenue	Polarizers for TFT LCD	$ 1,401,229
	Polarizers for TN/STN LCD Other	420,684 65,470
Total		$ 1,887,383

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STATEMENT OF COST OF GOODS SOLD

FOR THE YEAR ENDED DECEMBER 31, 2024

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Expressed in thousands of NT
Item Amount Note
Direct Material Consumption
Beginning Raw Materials $ 326,965
Add: Net Purchases for the Period 602,207
Less: Ending Inventory of Raw Materials (286,834)
Inventory Shrinkage (116)
Reclassified to Expenses (67,946)
574,276
Indirect Material Consumption
Beginning Raw Materials 1,300
Add: Net Purchases for the Period 19,848
Less: Ending Inventory of Raw Materials (927)
Reclassified to Expenses (20,221)
－
Direct Labor 246,210
Manufacturing expenses 275,484
Manufacturing cost 1,095,970
Add: Beginning Work in Process 306,951
Purchases for the Period 15,363
Less: Ending Work in Process (243,182)
Inventory Shrinkage (112)
Reclassified to Expenses 3,560
Cost of finished goods 1,178,550
Add: Beginning Finished Goods Inventory 223,026
Less: Ending Finished Goods Inventory (166,105)
Reclassified to Expenses (2,621)
Cost of Goods Sold for Self-Manufactured
1,232,850
Products
Scrap Sales Income (20,784)
Recovery of Net Realizable Value of
(77,263)
Inventory
Unallocated Fixed Manufacturing Costs 58,661
Inventory Shrinkage 228
Cost of Goods Sold $ 1,193,692
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STATEMENT OF MANUFACTURING EXPENSES

FOR THE YEAR ENDED DECEMBER 31, 2024

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Expressed in thousands of NT
Selling and Research and
Administrative Expected credit
Item Description marketing development Note
expenses impairment loss
expenses expenses
－
Wages and salaries $ 24,908 $ 69,412 $ 25,352 $
－ －
Maintenance fee 9,547 250
－
Insurance premium 2,958 6,131 2,939
－
Depreciation 28 6,317 3,516
－ － －
Research expense 6,182
－ － －
Commission expense 57,815
Import /Export － －
27,168 1,220
expenses
Reversal of Expected Accounts － － －
4,089
Credit Loss receivable
Individual
amounts
－
Others 14,774 56,809 2,849
less than
5%
Total $ 127,651 $ 148,216 $ 42,308 $ 4,089
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83

STATEMENT OF INTEREST INCOME

DECEMBER 31, 2024

	DECEMBER 31, 2024	DECEMBER 31, 2024
	Expressed in thousands of NT
Item	Description	Amount
Bank deposit interest Other interest income		$ 3,253 4
Total		$ 3,257

84