OSE — Audit Report / Information 2023

Dec 1, 2023

ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND

INDEPENDENT AUDITORS’ REPORT DECEMBER 31, 2023 AND 2022

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

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ORIENT SEMICONDUCTOR ELECTRONICS LIMITED

Declaration of Consolidated Financial Statements of Affiliated Enterprises

For the year ended December 31, 2023, pursuant to “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises,” the entity that is required to be included in the consolidated financial statements of affiliates, is the same as the entity required to be included in the consolidated financial statements of parent and subsidiary companies under International Financial Reporting Standard No. 10. Also, if relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies, it shall not be required to prepare separate consolidated financial statements of affiliates.

Hereby declare,

ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED

By

Yueh-Ming, Tung Chairman January 31, 2024

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INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

To the Board of Directors and Shareholders of Orient Semiconductor Electronics, Limited.

Opinion

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

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

Basis for opinion

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

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Key audit matters

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

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

Existence and occurrence of sales revenue recognition of top 10 customers

Description

Please refer to Note 4(31) for accounting policies on revenue recognition and Note 6(20) for details of operating revenue account.

The operating revenue of the Group mainly arises from customer contract income. The Group is primarily engaged in package and testing and electronic manufacturing service. Operating revenue is a main index which is used in assessment of the management’s operating performance and is a concern to users of the report. Because the sales revenue of top 10 customers represents a higher proportion of the whole operating revenue, we considered the existence of sales revenue recognition of top 10 customers as a key audit matter in the current year.

How our audit addressed the matter

Our audit procedures performed included the following:

1. Understood, assessed and tested the design and execution of internal control procedures of top 10 customers’ sales revenue recognition.

2. Obtained the details of top 10 customers’ details of sales revenue and sampled customers’ orders, delivery bills, invoices and collection records.

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1. Examined the content and related evidences of sales returns and discounts to top 10 customers after the balance sheet date.

2. Sampled and sent confirmations to inquire on the balance of accounts receivable. Performed reconciliation and alternative audit procedures on the confirmation replies.

Realisability of deferred tax assets

Description

Please refer to Note 4(29) of parent company only financial statements for details of accounting policies on the recognition of deferred income tax assets. As of December 31, 2023, the amount of the Group’s deferred income tax assets was NTD 634,413 thousand, please refer to Note 6(27) of parent company only financial statements for details.

Deferred income tax assets can only be recognised in the scope of being used in possibly offseting the taxable income in the future. The forecasted income statements which was used in the assessment of realisability of deferred income tax assets in the future and potential taxable income involved subjective judgment of management. We considered that the aforementioned judgment involved the forecast of subsequent years, and the assessment result is material to taxable income. Thus, we considered the realisability of deferred income tax assets as a key audit matter.

How our audit addressed the matter

Our audit procedures performed on the realisability of deferred income tax assets included the following:

1. Obtained future operating plan and forecasted income statements which were approved by management.

2. Examined the estimates in the forecasted income statements and compared that with historical result, and assessed the reasonableness of related assumptions which were adopted.

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3. Compared taxable income in the future years with taxable loss in the past years and assessed the realisability of deferred income tax assets.

Other matter – Reference to the audits of other auditors

We did not audit the financial statements of certain subsidiaries and investments accounted for under the equity method which were audited by other auditors. Therefore, our opinion expressed herein, insofar as it relates to the amounts included in respect of these subsidiaries and associates, is based solely on the reports of the other auditors. Total assets of these subsidiaries and the balances of these investments accounted for under the equity method amounted to NT$12,252 thousand, constituting 0.07% of the consolidated total assets as at December 31, 2022, and operating revenue both amounted to NT$0 thousand, constituting 0% of the consolidated total operating revenue for the year then ended.

Other matter – Parent company only financial statements

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

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

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

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

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

Auditors’ responsibilities for the audit of the consolidated financial statements

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

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

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

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

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

3. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current year and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Wang, Kuo-Hua[Chiang, Tsai-Yen ]

For and on behalf of PricewaterhouseCoopers, Taiwan February 7, 2024

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

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

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Assets	Notes 6(1) 6(3) 6(20) 6(4) 6(4) 6(4) and 7 6(5) 6(2) 6(6) 6(7) and 8 6(8) 6(10) 6(27) 8	December 31, 2023 AMOUNT % $ 3,909,728 21 - - 409,186 2 - - 4,462,716 24 270 - 106,713 1 3,194 - 1,604,909 9 93,171 1 30,774 - 10,620,661 58 1,839,213 10 - - 5,081,550 28 146,307 1 80,670 - 634,413 3 25,276 - 36,603 - 2,315 - 7,846,347 42 $ 18,467,008 100	December 31, 2022	December 31, 2022
		AMOUNT $ 3,909,728 - 409,186 - 4,462,716 270 106,713 3,194 1,604,909 93,171 30,774 10,620,661 1,839,213 - 5,081,550 146,307 80,670 634,413 25,276 36,603 2,315 7,846,347 $ 18,467,008	AMOUNT $ 3,945,818 245,600 272,248 155 3,022,087 399 38,894 - 1,818,028 107,990 23,812 9,475,031 1,021,427 1,843 5,220,775 166,755 47,547 973,068 20,581 17,098 2,659 7,471,753 $ 16,946,784	%
Current assets 1100 Cash and cash equivalents 1136 Current financial assets at amortised cost 1140 Current contract assets 1150 Notes receivable, net 1170 Accounts receivable, net 1180 Accounts receivable due from related parties, net 1200 Other receivables 1220 Current tax assets 130X Inventories 1410 Prepayments 1479 Other current assets, others 11XX Current Assets Non-current assets 1517 Non-current financial assets at fair value through other comprehensive income 1550 Investments accounted for using equity method 1600 Property, plant and equipment 1755 Right-of-use assets 1780 Intangible assets 1840 Deferred tax assets 1915 Prepayments for business facilities 1920 Guarantee deposits paid 1990 Other non-current assets, others 15XX Non-current assets 1XXX Total assets				23 1 2 - 18 - - - 11 1 -
				56
				6 - 31 1 - 6 - - -
				44
				100

(Continued)

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Liabilities and Equity	Notes 6(20) 7 6(12) 7 6(13) and 8 6(13) and 8 6(15) 6(14) 6(16)(17) 6(18) 6(19) 9	December 31, 2023 December 31, 2022 AMOUNT % AMOUNT % $ 87,187 - $ 77,879 - 3,966,349 22 3,042,415 18 1,474 - 736 - 1,396,947 8 1,299,565 8 19,781 - 20,000 - 214 - 123,863 1 46,477 - 14,439 - 25,400 - 27,958 - 107,054 1 - - 4,481 - 21,068 - 83,900 - 56,398 - 5,739,264 31 4,684,321 27 1,131,908 6 1,148,962 7 108,460 1 133,352 1 - - 1,003,851 6 178,046 1 185,658 1 35,487 - 39,864 - 1,453,901 8 2,511,687 15 7,193,165 39 7,196,008 42 5,553,083 30 5,553,299 33 1,801,800 10 1,801,800 11 238,387 1 238,171 1 346,070 2 192,241 1 192,793 1 157,357 1 3,007,624 16 2,000,701 12 134,086 1 ( 192,793) ( 1 ) 11,273,843 61 9,750,776 58 11,273,843 61 9,750,776 58 $ 18,467,008 100 $ 16,946,784 100
		AMOUNT $ 87,187 3,966,349 1,474 1,396,947 19,781 214 46,477 25,400 107,054 4,481 83,900 5,739,264 1,131,908 108,460 - 178,046 35,487 1,453,901 7,193,165 5,553,083 1,801,800 238,387 346,070 192,793 3,007,624 134,086 11,273,843 11,273,843 $ 18,467,008
Current liabilities 2130 Current contract liabilities 2170 Accounts payable 2180 Accounts payable to related parties 2200 Other payables 2220 Other payables to related parties 2230 Current tax liabilities 2250 Current provisions 2280 Current lease liabilities 2320 Long-term liabilities, current portion 2365 Current refund liabilities 2399 Other current liabilities, others 21XX Current Liabilities Non-current liabilities 2540 Non-current portion of non-current borrowings 2580 Non-current lease liabilities 2635 Non-current preference share liabilities 2640 Net defined benefit liability, non- current 2645 Guarantee deposits received 25XX Non-current liabilities 2XXX Total Liabilities Equity attributable to owners of parent Share capital 3110 Share capital - common stock 3120 Preference share Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 31XX Equity attributable to owners of the parent 3XXX Total equity Significant contingent liabilities and unrecognised contract commitments 3X2X Total liabilities and equity

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

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

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

Items

Year ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(20) and 7 $ 16,690,436 100 $ 15,531,669 100 6(5)(10)(25)(26) and 7 ( 13,375,136) ( 80) ( 13,008,745) ( 84) 3,315,300 20 2,522,924 16 6(10)(25)(26) ( 860,865) ( 5) ( 742,128) ( 5) ( 386,747) ( 3) ( 340,002) ( 2) 12(2) 6,458 - ( 7,548) - ( 1,241,154) ( 8) ( 1,089,678) ( 7) 6(8) 1 - 54 - 2,074,147 12 1,433,300 9 6(21) 46,135 - 11,102 - 6(22) and 7 175,386 1 166,048 1 6(23) ( 40,685) - 153,180 1 6(24) ( 36,326) - ( 25,909) - 6(6) ( 362) - 30,567 - 144,148 1 334,988 2 2,218,295 13 1,768,288 11 6(27) ( 337,085) ( 2) ( 319,635) ( 2) $ 1,881,210 11 $ 1,448,653 9 6(14) ( $ 74,821) - $ 120,460 1 6(2) 314,187 2 ( 72,236) ( 1) 6(27) 16,282 - ( 24,002) - 255,648 2 24,222 - 811 - 37,794 1 6(27) 10,563 - ( 7,819) - 11,374 - 29,975 1 $ 267,022 2 $ 54,197 1 $ 2,148,232 13 $ 1,502,850 10 $ 1,881,210 11 $ 1,448,653 9 $ 2,148,232 13 $ 1,502,850 10 6(28) $ 2.66 $ 2.02 $ 2.54 $ 1.94

4000 Sales revenue 5000 Operating costs 5900 Net operating margin Operating expenses 6100 Selling and administrative expenses 6300 Research and development expenses 6450 Impairment gain and reversal of impairment loss (Impairment loss) determined in accordance with IFRS 9 6000 Total operating expenses 6500 Net other income (expenses) 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of (loss) profit of associates and joint ventures accounted for using equity method 7000 Total non-operating revenue and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income Components of other comprehensive income that will not be reclassified to profit or loss 8311 Other comprehensive income, before tax, actuarial (losses) gains on defined benefit plans 8316 Unrealised gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8310 Components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8360 Components of other comprehensive income that will be reclassified to profit or loss 8300 Total other comprehensive income for the year 8500 Total comprehensive income for the year Profit, attributable to: 8610 Owners of parent Comprehensive income attributable to: 8710 Owners of parent Basic earnings per share 9750 Basic 9850 Diluted

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

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

Year 2022 Balance at January 1, 2022 Profit for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriation and distribution of 2021 retained earnings: Legal reserve Special reserve Cash idvidends Share-based payment transactions Disposal of investments accounted for under the equity method Disposal of investments in equity instruments designated at fair value through other comprehensive income Balance at December 31, 2022 Year 2023 Balance at January 1, 2023 Profit for the year Other comprehensive income (loss) Total comprehensive income Appropriation and distribution of 2022 retained earnings: Legal reserve Special reserve Cash dividend Share-based payment transactions Balance at December 31, 2023	Notes							Equity at	Equity at	tri	butable to owners	butable to owners	of the parent					Total equity
			Share	capital			Capital surplus				Retained earnings				Other equityinterest
			Ordinary share		Preference share			Legal reserve			Special reserve		Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income	Unearned compensation
	6(19) 6(16)(17) 6(2) 6(19) 6(16)(17)	$ 5,554,319 - - - - - - ( 1,020 ) - - $ 5,553,299 $ 5,553,299 - - - - - - ( 216 ) $ 5,553,083			$ 1,801,800 - - - - - - - - - $ 1,801,800 $ 1,801,800 - - - - - - - $ 1,801,800		$ 234,897 - - - - - - 483 2,791 - $ 238,171 $ 238,171 - - - - - - 216 $ 238,387		$ 53,719 - - - 138,522 - - - - - $ 192,241 $ 192,241 - - - 153,829 - - - $ 346,070		$ 106,988 - - - - 50,369 - - - - $ 157,357 $ 157,357 - - - - 35,436 - - $ 192,793	$ 1,385,221 1,448,653 96,368 1,545,021 ( 138,522 ) ( 50,369 ) ( 733,916 ) - - ( 6,734 ) $ 2,000,701 $ 2,000,701 1,881,210 ( 59,857 ) 1,821,353 ( 153,829 ) ( 35,436 ) ( 625,165 ) - $ 3,007,624		($ 41,911 ) - 29,975 29,975 - - - - - - ($ 11,936 ) ($ 11,936 ) - 11,374 11,374 - - - - ($ 562 )	($ 115,445 ) - ( 72,146 ) ( 72,146 ) - - - - - 6,734 ($ 180,857 ) ($ 180,857 ) - 315,505 315,505 - - - - $ 134,648	($ 7,523 ) - - - - - - 7,523 - - $ - $ - - - - - - - - $ -	$ 8,972,065 1,448,653 54,197 1,502,850 - - ( 733,916 ) 6,986 2,791 - $ 9,750,776 $ 9,750,776 1,881,210 267,022 2,148,232 - - ( 625,165 ) - $ 11,273,843

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

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Depreciation expense Amortization expense (Gain) loss on expected credit impairment Losses on financial assets at fair value through profit or loss Interest expense Interest income Dividend income Stock option compensation cost from subsidiary Share of loss (profit) of associates and ventures accounted for using the equity method Loss (gain) on disposal of property, plant and equipment Property, plant and equipment transferred to expenses Gain on disposal of non-current assets held for sale Impairment loss on non-financial assets Scrapping inventory and loss on decline in market value Gain arising from lease modifications Reclassification of exchange differences on translation of foreign financial statements to foreign exchange losses Other losses Gain on recovery of preference share liabilities Changes in operating assets and liabilities Changes in operating assets (Increase) decrease in contract assets Decrease (increase) in notes receivable Increase in accounts receivable (Increase) decrease in accounts receivable due from related parties (Increase) decrease in other receivable Decrease in other receivables due from related parties Decrease in inventories Decrease in prepayments Increase in other current assets, others Decrease in other non-current assets, others Changes in operating liabilities Increase (decrease) in contract liabilities Increase (decrease) in accounts payable Increase (decrease) in accounts payable to related parties Increase (decrease) in other payalbe Increase in other payables to related parties Increase in current provisions Increase (decrease) in other current liabilities Decrease in net defined benefit liability Cash inflow generated from operations Interest received Income tax received Income tax paid Net cash flows from operating activities

Year ended December 31 Notes 2023 2022 $ 2,218,295 $ 1,768,288 6(7)(8)(25) 947,730 1,112,078 6(10)(25) 48,362 26,739 12(2) ( 6,458 ) 7,548 6(23) - 1,261 6(24) 36,326 25,909 6(21) ( 46,135 ) ( 11,102 ) 6(22) ( 118,745 ) ( 54,660 ) 6(16) - 6,986 6(6) 362 ( 30,567 ) 6(23) 1,123 ( 20,498 ) 4,320 - 6(23) - ( 52,164 ) 6(23) 4,451 - 6(5) 173,894 22,620 6(8) ( 1 ) ( 1,948 ) ( 507 ) ( 5,956 ) - 521 6(15) ( 2,570 ) - ( 136,938 ) 23,842 155 ( 9 ) ( 1,433,953 ) ( 131,822 ) ( 43 ) 458,010 ( 66,151 ) 18,831 - 62,813 40,709 4,761 17,009 1,028 ( 6,939 ) ( 7,655 ) 351 1,355 9,308 ( 11,165 ) 923,071 ( 192,238 ) 306 ( 9 ) 120,772 ( 105,070 ) - 14,491 32,038 4,083 10,906 ( 2,664 ) ( 82,433 ) ( 181,082 ) 2,688,615 2,752,555 45,986 10,642 - 4,982 ( 87,738 ) - 2,646,863 2,768,179

(Continued)

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Increase in non-current financial assets at fair value through other comprehensive income Proceeds from liquidation of financial assets at fair value through other comprehensive income Decrease (increase) in non-current financial assets at amortised cost Acquistion of property, plant and equipment (including prepayment for equipment) Proceeds from disposal of non-current assets held for sale Proceeds from disposal of property, plant and equipment (Increase) decrease in refundable deposits Acquistion of intangible assets Decrease in long-term accounts receivable due from related Dividends received Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings Decrease in short-term borrowings Decrease in short-term notes and bills payable Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of preference share liabilities Decrease in guarantee deposits received Payments of lease liabilities Interest paid Cash dividends paid Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

Year ended December 31 Notes 2023 2022 ( $ 503,599 ) ( $ 801,062 ) 6(2) - 22,082 248,297 ( 229,395 ) 6(29) ( 859,072 ) ( 1,092,284 ) - 964,396 18,199 31,774 ( 19,585 ) 138,851 6(10) ( 79,470 ) ( 41,170 ) - 93,400 6(22) 118,745 54,660 ( 1,076,485 ) ( 858,748 ) 6(30) - 1,621,958 6(30) - ( 1,922,195 ) 6(30) - ( 50,011 ) 6(30) 90,000 863,262 6(30) - ( 362,694 ) 6(15)(30) ( 999,999 ) - 6(30) ( 4,375 ) ( 17,156 ) 6(30) ( 27,950 ) ( 34,306 ) ( 37,667 ) ( 29,779 ) 6(19) ( 625,165 ) ( 733,916 ) ( 1,605,156 ) ( 664,837 ) ( 1,312 ) ( 21,947 ) ( 36,090 ) 1,222,647 3,945,818 2,723,171 $ 3,909,728 $ 3,945,818

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

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ORIENT SEMICONDUCTOR ELECTRONICS, LIMITED AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2023 AND 2022

(EXPRESSED IN THOUSANDS OF NEW TAIWAN DOLLARS, EXCEPT AS OTHERWISE INDICATED)

1. History and Organisation

• (1) Orient Semiconductor Electronics Limited (the “Company”) was incorporated in Kaohsiung City in June 1971 under the provisions of the Company Act of the Republic of China (R.O.C.). The address of the Company’s registered office is at No. 9, Central 3rd Street, Nanzih District, Kaohsiung City. The Company and its subsidiaries (collectively referred herein as the “Group”), were primarily engaged in various types of integrated circuits, semiconductor components, computer motherboards, various types of electronic inventory, manufacturing, combination, processing and export of computer and communication circuit boards.

• (2) The Company was listed on the Taiwan Stock Exchange starting from April 1994.

• The Date of Authorisation for Issuance of the Financial Statements and Procedures for Authorisation

• These financial statements were authorised for issuance by the Board of Directors on January 31, 2024.

• Application of New Standards, Amendments and Interpretations

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

New standards, interpretations and amendments endorsed by FSC and became effective from 2023 are as follows:

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

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

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

but not yet adopted by the Group

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

2024 are as follows:
	Effective date by
	International Accounting
New Standards,Interpretations andAmendments	StandardsBoard
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-	January 1, 2024
current’
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024
Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’	January 1, 2024

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

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

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

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

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

4. Summary of Material Accounting Policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

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(1) Compliance statement

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

(2) Basis of preparation

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

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

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

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

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

(3) Basis of consolidation

• A. Basis for preparation of consolidated financial statements:

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

• (b) Transactions, balances and unrealised gains or losses between the Company and its subsidiaries are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

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

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

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• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognised in profit or loss. All amounts previously recognised in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognised in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

B. Subsidiaries included in the consolidated financial statements:

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Ownership(%)
December December
Investor Name of subsidiary Main business activities 31, 2023 31, 2022 Description
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Investor	Name ofsubsidiary	Mainbusiness activities	December 31,2023	December 31,2022	Description
Orient Semiconductor	OSE Philippines INC.	(a) Integrated circuit and semiconductor components.	-	93.67%	Notes 1 and 2
Electronics Limited	(“OSEP”)
		(b) Research, design, manufacture, assembly, processing,
		test and after-sales service of aforementioned products.
Orient Semiconductor	OSE International Limited	Investments in various production business.	100%	100%	Note 3
Electronics Limited	(“OSE BVI”).
Orient Semiconductor	Coreplus (HK) Limited	Accepted orders, purchased materials and outsourcing	100%	100%	-
Electronics Limited	(“COREPLUS”)	processing of components combination business.
Orient Semiconductor	Hua-Cheng Investment Co.	Reinvestments in various business.	100%	100%	-
Electronics Limited	(“Hua-Cheng”)
OSE International	OSE Philippines INC.	(a) Integrated circuit and semiconductor components.	-	6.33%	Notes 1 and 2
Limited	(“OSEP”)
		(b) Research, design, manufacture, assembly, processing,
		test and after-sales service of aforementioned products.
Corplus (HK)	Value–Plus Technology	Adhesive processing, plug-in welding processing and	100%	100%
Limited	(Suzhou) Co. (Value–Plus	related test, combination processing, technique
	(Suzhou))	maintenance and after-sale service of the surface of base plate
		of electronic components

• Note 1: Since the Company directly held 93.67% of equity interest of OSEP and the equity held by the Company’s subsidiary (OSE BVI) was 6.33% , the equity held in total was 99.99%.

• Note 2: OSEP has stopped operation in the fourth quarter of 2011 and was dissolved and liquidated on July 31, 2023.

• Note 3: On October 25, 2023, the Board of Directors of OSE BVI resolved to discontinue operations and implement the deregistration. The related procedures are in progress.

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

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

• E. Significant restrictions: None.

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

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(4) Foreign currency translation

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

• A. Foreign currency transactions and balances

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

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

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

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

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

  - (a) Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;

  - (b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and

  - (c) All resulting exchange differences are recognised in other comprehensive income.

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

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

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

  - (b) Assets held mainly for trading purposes;

  - (c) Assets that are expected to be realised within twelve months from the balance sheet date; and

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

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

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

  • (b) Liabilities arising mainly from trading activities;

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

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

• (6) Cash equivalents

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

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

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

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

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

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

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognise changes in fair value in other comprehensive income.

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

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

• The changes in fair value of equity investments that were recognised in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment.

• D. Dividends are recognised as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(9) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

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

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognised and derecognised using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognised in profit or loss when the asset is derecognised or impaired.

• (10) Accounts and notes receivable

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

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

(11) Impairment of financial assets

For financial assets at amortised cost, at each reporting date, the Group recognises the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognises the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable that do not contain a significant financing component, the Group recognises the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

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

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

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

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－ (13) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognised in profit or loss on a straight-line basis over the lease term.

(14) Inventories

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

(15) Investments accounted for using equity method / associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognised at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognised in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognises the Group’s share of change in equity of the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

• E. When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognised in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

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(16) Non-current assets held for sale

Non-current assets are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction rather than through continuing use, and a sale is considered highly probable. They are stated at the lower of carrying amount and fair value less costs to sell.

(17) Property, plant and equipment

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

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

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

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

Buildings and structures 3~51 years Machinery and equipment 3~ 7 years Transportation equipment 3 ~ 5 years Office equipment 3 ~ 6 years Other equipment 3 ~ 7 years

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

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

• B. The lease liability is at the present value of the lease payments that are not paid and shall be discounted using the Group’s incremental borrowing rate at commencement date. The lease payments include fixed payments less any lease incentives receivable.

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The lease liability is subsequently measured using an effective interest method on an amortised cost basis and the interest expense is allocated over the lease term. The amount of the remeasurement of the lease liability shall be recognised as an adjustment to the right-of-use asset if there are changes in the lease term or to the lease payments not arising from contract modifications.

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

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

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

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

(19) Intangible assets

Computer software is stated at cost and amortised on a straight-line basis over its estimated useful life of 1 to 3 years.

(20) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognising impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognised.

• (21) Borrowings

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

(22) Accounts payable

• A. Accounts payable are liabilities for purchases of raw materials, goods or services.

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

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(23) Preference share liability

Preference share liabilities issued by the Group contain put options. The Group classifies the bonds payable upon issuance as a financial asset and financial liability in accordance with the contract terms. They are accounted for as follows:

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

• B. The host contracts of preference share liabilities are initially recognised at total issue price less the fair value of call option of preference share liabilities and subsequently is amortised in profit or loss as an adjustment to the ‘finance costs’ over the period of circulation using the effective interest method.

• C. Any transaction costs directly attributable to the issuance of preference share liabilities are allocated to each liability or equity component in proportion to the initial carrying amount of each abovementioned item.

(24) Derecognition of financial liabilities

A financial liability is derecognised when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(25) Offsetting financial instruments

Financial assets and liabilities are offset and reported in the net amount in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously.

(26) Provisions

Provisions (including warranties, etc.) are recognised when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are not recognised for future operating losses.

(27) Employee benefits

• A. Salaries and other short-term employee benefits

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

• B. Pensions

• (a) Defined contribution plan

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

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• (b) Defined benefit plan

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services in current period or prior periods. The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.

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

iii. Past service costs are recognised immediately in profit or loss.

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

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

- (28) Employee share based payment

Employee restricted shares:

• A. Restricted stocks issued to employees are measured at the fair value of the equity instruments granted at the grant date, and are recognised as compensation cost over the vesting period.

• B. Before satisfying the vested condition of restricted stocks which were issued by the Company, there was no right to appropriate earnings. Other options were the same as the issued common stocks of the Company (including but not limited to: capital reduction, dividend distribution from capital surplus), and equity interest from consolidation, split, share transference and other legal events.

• C. For restricted stocks where employees do not need to pay to acquire those stocks, if employees resign during the vesting period, the Company will redeem at no consideration and retire those stocks which were not vested.

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(29) Income taxes

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

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

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

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

• E. Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.

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(30) Share capital

Ordinary shares are classified as equity. The classification of preference shares is determined by assessing the particular rights attached to the preference shares based on the substance of the contract and the definition of financial liabilities and equity instruments. Preference shares are classified as liabilities when they have the fundamental characteristic of financial liabilities (Note 4(23)); otherwise, they are classified as equity. Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.

(31) Revenue recognition

• A. Package and test service

• (a) The Group provides package and test of integrated circuit and related business. When performing a contract, the objective is to create or strengthen assets which were controlled by customers, thus, revenue was recognised over time, recognised as contract assets before the contract has been completed, and was transferred to accounts receivable when issuing bills. If the collected proceeds from sales exceeded the amount of recognised revenue, the difference was recognised as contract liabilities.

• (b) As the time interval between the transfer of committed goods or service and the payment of customer does not exceed one year, the Group does not adjust the transaction price to reflect the time value of money.

• B. Manufacturing service of electronic products

• (a) The Group manufactures, processes and sells electronic products. Sales are recognised when control of the products has transferred, being when the products are delivered to the customers, and there is no unfulfilled obligation that could affect the customers’ acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) Sales revenue was recognised as contract price, a refund liability is recognised for expected sales discounts and allowances payable to customers in relation to sales made until the end of the reporting period.

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

• C. The Group’s obligation to provide a repair for faulty products under the standard warranty terms is recognised as a provision. As of the balance sheet date, the Group estimated probable warranty obligation and recognised liability provisions.

(32) Operating segments

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

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1. Critical Accounting Judgements, Estimates and Key Sources of Assumption Uncertainty

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

(1) Critical judgements in applying the Group’s accounting policies

• Revenue recognition on a net/gross basis

The Group determines whether the nature of its performance obligation is to provide the specified goods or services itself (i.e. the Group is a principal) or to arrange for the other party to provide those goods or services (i.e. the Group is an agent) based on the transaction model and its economic substance. The Group is a principal if it controls a promised good or service before it transfers the good or service to a customer. The Group recognises revenue at gross amount of consideration to which it expects to be entitled in exchange for those goods or services transferred. The Group is an agent if its performance obligation is to arrange for the provision of goods or services by another party. The Group recognises revenue at the amount of any fee or commission to which it expects to be entitled in exchange for arranging for the other party to provide its goods or services. Indicators that the Group controls the good or service before it is provided to a customer include the following:

• A. The Group is primarily responsible for the provision of goods or services;

• B. The Group assumes the inventory risk before transferring the specified goods or services to the customer or after transferring control of the goods or services to the customer.

• C. The Group has discretion in establishing prices for the goods or services.

• (2) Critical accounting estimates and assumptions

• A. Evaluation of inventories

  • As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value. Such an evaluation of inventories is principally based on the products’ market and historical sales experience and other factors. Therefore, there might be material changes to the evaluation.

On December 31, 2023, the carrying amount of the Group’s inventories was $1,604,909.

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B. Realisability of deferred tax assets

Deferred tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, and laws and regulations might cause material adjustments to deferred tax assets. On December 31, 2023, the Group recognised deferred tax assets amounting to $634,413.

6. Details of Significant Accounts

(1) Cash and cash equivalents

tails of Significant Accounts Cash and cash equivalents
December 31, 2023 Cash on hand and petty cash 152 $ Checking accounts and demand deposits 2,826,086 Time deposits 1,083,490 3,909,728 $	December 31, 2022
	189 $ 3,356,169 589,460
	3,945,818 $

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

• －

• B. The Group’s time deposits have been transferred to “financial assets at amortised cost current” as the maturity periods were more than three months, please refer to Note 6(3) for details.

• C. Aforementioned time deposits had maturities not exceeding three months and were not pledged as collateral, and were classified as cash equivalents according to its nature.

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

Items Non-current items: Unlisted stocks Listed stocks	December31,2023 4,022 $ 1,835,191 1,839,213 $	December31,2022
		10,613 $ 1,010,814
		1,021,427 $

• A. The Group has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $1,839,213 and $1,021,427 as at December 31, 2023 and 2022, respectively.

• B. In August 2022, the Group received $22,082 due to the liquidation of the unlisted company which were reinvested by the Group, and the cumulative losses on investment amounting to $6,734, which have been transferred from other equity to retained earnings.

~31~

• C. For the years ended December 31, 2023 and 2022, the Group has financial assets at fair value through other comprehensive income recognised in comprehensive income (loss) due to changes of fair value in the amounts of $314,187 and ($72,236), respectively.

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

(3) Financial assets at amortised cost

Items December 31, 2023 December 31, 2022 Current items: Time deposits with maturity over three months $ - $ 245,600

• A. For the years ended December 31, 2023 and 2022, the interest income from demand and time deposits was recognised under interest income from bank deposits, please refer to Note 6(21).

• B. The Group has no financial assets at amortised cost pledged to others as collateral.

• C. Information relating to credit risk of financial assets at amortised cost is provided in Note 12(2). The counterparties of the Group’s investments in certificates of deposit are financial institutions with high credit quality, so the Group expects that the probability of counterparty default is remote.

(4) Notes and accounts receivable (including related parties)

Notes receivable Less: Loss allowance Accounts receivable Less: Loss allowance Accounts receivable due from related parties Less: Loss allowance	December31,2023 December31,2022 - $ 155 $ - - - $ 155 $ 4,469,325 $ 3,035,158 $ 6,609) ( 13,071) ( 4,462,716 $ 3,022,087 $ 271 $ 399 $ 1) ( - 270 $ 399 $

• A. For details of the aging analysis of notes and accounts receivable which were based on the dates past due and information relating to credit risk, please refer to Note 12(2).

• B. As of December 31, 2023 and 2022, accounts and notes receivable were all from contracts with customers. As of January 1, 2022, the balance of receivables from contracts with customers amounted to $3,356,874.

• C. The Group has no notes and accounts receivable pledged to others as collateral.

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• D. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes receivable was $0 and $155, respectively. As at December 31, 2023 and 2022, the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable was $4,462,986 and $3,022,486, respectively.

(5) Inventories

Inventories
			December31,2023				December31,2022
Raw materials		$		1,359,552		$		1,585,642
Supplies				148,271				157,344
Work in progress				515,059				315,903
Finished goods				37,432				40,867
				2,060,314				2,099,756
Less: Allowance for valuation loss	(			455,405)	(			281,728)
		$		1,604,909		$		1,818,028
A. The cost of inventories recognised as expense for the				period:
				YearendedDecember31
				2023				2022
Cost of goods sold			$	13,226,032			$	13,014,518
Scrapping inventory and loss on decline in market value				173,894				22,620
Others	(			24,790)	(			28,393)
			$	13,375,136			$	13,008,745

• B. As of December 31, 2023 and 2022, the fire insurance amounts of inventories were $14,421,650 and $15,234,807, respectively.

(6) Investments accounted for using equity method

			2023				2022
At January 1		$		1,843		$	467,174
Disposal of investments accounted for using equity method	(			1,527)			-
Share of profit or loss of investments accounted for	(			362)			30,567
using equity method
Transfers to non-current assets held for sale				-	(		503,729)
Changes in other equity interest				46			7,831
At December 31		$		-		$	1,843

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Associates: OSE PROPERTIES, INC. SCS HIGHTECH INC.	Amount - $ - - $ December	Shareholdingratio Amount Shareholdingratio - 1,843 $ 39.99% 18.17% - 18.17% 1,843 $ 31,2023 December 31,2022

• A.The carrying amount of the Group’s investment in SCS HIGHTECH, INC. has been recognised as nil, and there is no further legal or constructive obligation to accrue additional losses. The company has been approved to nullify the registration in 2004 and is still pending liquidation.

• B.The Group’s investee, OSE Properties, Inc. has been dissolved and liquidated on July 31, 2023.

• C. In April 2022, the Board of Directors of the Group resolved to dispose ATP Electronics Taiwan Inc. In June 2022, the Group signed a share transfer agreement to sell 18.31% of ownership for proceeds of $501,962. All proceeds from the sale had been collected in accordance with the agreement and the equity settlement and transfer was completed in September 2022. Additionally, please refer to Note 6(11) for the details of the transfer to non-current assets held for sale.

• D.As of December 31, 2023 and 2022, there were no investments accounted for using equity method pledged as collaterals.

• E. As of December 31, 2023 and 2022, the Group had no significant associate.

• F. The Group’s share of the operating results in all individually immaterial associates is summarized below:

		Year	ended December31	ended December31	ended December31
		2023			2022
(Loss) profit	($		362)	$	30,567
Other comprehensive income, net of tax			-		5,199
Total comprehensive (loss) income for the period	($		362)	$	35,766
Property, plant and equipment
	December31,		2023	December31,2022
Property, plant and equipment
- Owner-occupied	$	5,080,853		$	5,219,945
- Operating leases			697		830
	$	5,081,550		$	5,220,775

(7) Property, plant and equipment

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A.Property, plant and equipment for self-use

		Buildings and	Buildings and		Machinery and	Machinery and	Transportation	Transportation			Office			Other		Construction in progress and	Construction in progress and
			structures			equipment		equipment			equipment			equipment		equipment under installation				Total
Cost and revaluation increment:
January 1, 2023		$	7,083,750		$	15,393,819	$	3,188		$	58,341		$	418,410		$	645,318		$	23,602,826
Additions			-			17,081		-			-			287			798,565			815,933
Disposals	(		7,019)	(		70,735)	(	1,124)	(		761)	(		31,331)			-	(		110,970)
Transfers			273,337			733,332		-			998			9,234	(		1,021,221)	(		4,320)
Impact of changes in foreign exchange rate			-	(		1,989)	(	10)	(		42)	(		222)			-	(		2,263)
December 31, 2023		$	7,350,068		$	16,071,508	$	2,054		$	58,536		$	396,378		$	422,662		$	24,301,206
Depreciation and impairment:
January 1, 2023		$	4,920,862		$	13,051,014	$	2,937		$	58,009		$	350,059		$	-		$	18,382,881
Depreciation expense			152,032			755,278		-			21			19,317			-			926,648
Impairment loss (Note)			127			3,811		2			81			430			-			4,451
Disposals	(		7,019)	(		51,798)	(	1,072)	(		685)	(		30,804)			-	(		91,378)
Impact of changes in foreign exchange rate			-	(		2,010)	(	9)	(		40)	(		190)			-	(		2,249)
December 31, 2023		$	5,066,002		$	13,756,295	$	1,858		$	57,386		$	338,812		$	-		$	19,220,353

Note: Certain property, plant and equipment of the Group’s EMS Group were impaired because the economic benefits will not be as expected. The Group wrote down the carrying amount of the assets based on the recoverable amount and recognised an impairment loss accordingly.

~35~

		Buildings and	Buildings and		Machinery and	Machinery and	Transportation	Transportation			Office			Other		Construction in progress and	Construction in progress and
			structures			equipment		equipment			equipment			equipment		equipment under installation				Total
Cost and revaluation increment:
January 1, 2022		$	7,031,115		$	14,745,469	$	4,187		$	59,325		$	376,097		$	927,623		$	23,143,816
Additions			-			75		-			-			-			908,887			908,962
Disposals	(		28,720)	(		431,708)	(	1,047)	(		1,131)	(		9,731)			-	(		472,337)
Transfers			81,355			1,058,394		-			-			51,842	(		1,191,591)			-
Impact of changes in foreign exchange rate			-			21,589		48			147			202			399			22,385
December 31, 2022		$	7,083,750		$	15,393,819	$	3,188		$	58,341		$	418,410		$	645,318		$	23,602,826
Depreciation and impairment:
January 1, 2022		$	4,809,885		$	12,524,278	$	3,930		$	58,965		$	344,036		$	-		$	17,741,094
Depreciation expense			131,868			936,888		5			22			15,569			-			1,084,352
Disposals	(		20,891)	(		428,474)	(	1,042)	(		1,119)	(		9,710)			-	(		461,236)
Transfers			-	(		28)		-			-			-			-	(		28)
Impact of changes in foreign exchange rate			-			18,350		44			141			164			-			18,699
December 31, 2022		$	4,920,862		$	13,051,014	$	2,937		$	58,009		$	350,059		$	-		$	18,382,881
Carrying amount, net:
December 31, 2023		$	2,284,066		$	2,315,213	$	196		$	1,150		$	57,566		$	422,662		$	5,080,853
December 31, 2022		$	2,162,888		$	2,342,805	$	251		$	332		$	68,351		$	645,318		$	5,219,945

~36~

B. Property, plant and equipment for operating lease

Property, plant and equipment for operating lease
Cost: January 1 and December 31 At January 1 Additions At December 31 Carrying amount, net: Depreciation:	2023 2022 10,721 $ 10,721 $ 9,891 $ 9,758 $ 133 133 10,024 $ 9,891 $ 697 $ 830 $ Buildings and structures
		10,721 $
		9,758 $ 133
		9,891 $
		830 $

• C. Amount of borrowing costs capitalised as part of property, plant and equipment and the range of the interest rates for such capitalisation are as follows:

Amount capitalised Range of the interest rates for capitalisation	2023 2022 133 $ 6,590 $ 1.775% 0.89%～1.28% YearendedDecember31

• D. The significant components of buildings and equipment include main plants and each improvement construction, which are depreciated over 30~51 and 3~21 years, respectively.

• E. As of December 31, 2023 and 2022, the insured amount of fire insurance of property, plant and equipment were $10,547,590 and $10,151,541, respectively.

• F. Refer to Note 8 for further information on property, plant and equipment pledged to others as collateral.

－ (8) Leasing arrangements lessee

• A. The Group leased various assets, including property (land, building and structures), machinery and equipment and transportation equipment. The lease period of each contract was between 3 to 51 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be subleased, sublet, subtenant to others, transfer the lease right to others and pledged as collaterals.

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

Land Machinery and equipment Transportation equipment	December31,2023 Carrying amount 113,820 $ 27,932 4,555 146,307 $	December 31, 2022 Carrying amount 125,250 $ 33,711 7,794 166,755 $

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Land Buildings and structures Machinery and equipment Transportation equipment	2023 2022 Depreciation expense Depreciation expense 11,430 $ 12,309 $ - 5,974 5,779 5,779 3,740 3,501 20,949 $ 27,563 $ YearendedDecember31	2023 2022 Depreciation expense Depreciation expense 11,430 $ 12,309 $ - 5,974 5,779 5,779 3,740 3,501 20,949 $ 27,563 $ YearendedDecember31
		27,563 $

• C. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $796 and $7,176, respectively.

• D. Information on profit or loss in relation to lease contracts is as follows:

==> picture [465 x 32] intentionally omitted <==

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

Year ended December 31
Items affecting profit or loss 2023 2022
----- End of picture text -----

Items affecting profit or loss		2023		2022
Interest expense on lease liabilities	$	2,615	$	3,156
Expense on short-term lease contracts		13,908		6,333
Expense on leases of low-value assets		3,338		2,964
(excluding expense on leases of low-value assets
of short-term lease)
Gains arising from lease modifications		-		1,894
(shown as ‘other gains and losses’)
Gains arising from lease modifications		1		54
(shown as ‘other income and expenses - net’)

• E. For the years ended December 31, 2023 and 2022, the total amounts of the Group’s cash outflow from leasing were $47,811 and $46,759, respectively.

• F. In March 2022, the Company’s subsidiary, OSEP, disposed the plant which had ceased operation in the Philippines and terminated the land lease agreement, where the original plant is located. The related derecognised right-of-use assets and the gain arising from lease modification amounted to $62,306 and $1,894, respectively.

(9) Leasing arrangements - lessor

• A. The Group leases various assets including plant and office. Rental contracts are typically made for periods of 2 and 10 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. To secure the use of the leased assets, the leased assets may not be subleased, transferred or provided to others in other ways.

• B. Gain arising from operating lease agreements are as follows:

Related revenue from fixed lease payments	Year ended December31	Year ended December31
	2023 6,385 $	2022
		7,235 $

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C. The maturity analysis of the lease payments under the operating leases is as follows:

December31,2023 Within 1 year 4,025 $ Later than one year but not later than two years 729 Later than two years but not later than three years 703 Later than three years but not later than four years 703 Later than four years but not later than five years 703 Later than five years 2,226 9,089 $	December31,2022 5,124 $ 3,919 729 703 703 2,929
	14,107 $

D. For disclosures of property, plant and equipment leased under operating lease and within the scope of IAS 16, please refer to Note 6(7).

(10) Intangible assets

Intangible assets
		Computersoftware
		2023			2022
Cost
At January 1	$	481,650		$	440,354
Additions－acquired separately		79,470			41,170
Reclassifications		2,017			126
At December 31	$	563,137		$	481,650
Accumulated amortisation
At January 1	$	434,103		$	407,382
Amortisation charge		48,362			26,739
Net exchange differences		2	(		18)
At December 31	$	482,467		$	434,103
Book value	$	80,670		$	47,547
A. Details of amortisation on intangible assets are as follows:
		Year ended December31
		2023			2022
Operating costs	$	21,144		$	14,729
Selling and administrative expenses	$	19,799		$	5,846
Research and development expenses	$	7,419		$	6,164

• B. There was no intangible asset held by the Group that was pledged to others.

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(11) Non-current assets held for sale

• A. The assets related to certain plants located in Kaohsiung Nanzih Technology Industrial Park have been reclassified as disposal group held for sale following the approval of the Group’s Board of Directors to sell the plants in cooperation with the Land Redevelopment Project of Technology Industrial Park Administration. The transaction and ownership transfer are expected to be completed within a year. As of January 31, 2022, the assets of disposal group held for sale amounted to $136,137, and there were no related liabilities. The Company collected the full amount of the consideration for the sale of the plant in July 2022 and completed the related procedures.

• B. The Board of Directors of the Company resolved to dispose all shares of ATP Electronics Taiwan Inc. held by the Group in April 2022. The transaction was expected to be completed and settled within a year. Therefore, the Group transferred related assets to disposal group held for sale. The assets of the disposal group held for sale as at December 31, 2022 amounted to $500,812 and there were no related liabilities. The Company collected the full amount of the consideration for the shares in September 2022 and completed the related procedures.

• C. No impairment loss was incurred as a result of the remeasurement of the aforementioned disposal group held for sale at the lower of its carrying amount or fair value less costs to sell.

(12) Other payables

Other payables
Salary and bonus payable Pension payable Employees’ compensation and directors’ remuneration payable Payables for machinery and equipment Utilities expense payable Compensation payable Insurance premiums payable Employment Stability Fund payable Other payables	December31,2023 571,001 $ 40,341 277,777 269,709 43,407 2,073 89,165 16,411 87,063 1,396,947 $	December31,2022
		504,618 $ 38,321 221,996 303,918 34,418 17,193 78,454 15,125 85,522
		1,299,565 $

• (13) Long term borrowings

Type of Borrowings	Borrowing period and repayment term	Interest rate range 1.35%~1.775% (Note)	Collateral None	December31,2023
Long-term bank borrowings Unsecured borrowings Less: Current portion	Borrowing period is from August 2021 to September 2030; interest is payable monthly; principal is repayable at maturity.			1,238,962 $ 107,054) (
				1,131,908 $

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Type of Borrowings Borrowing period andrepayment term Long-term bank borrowings Unsecured borrowings Borrowing period is from August 2021 to March 2029; interest is payable monthly; principal is repayable at maturity Less: Current portion	Interestraterange 1.225% (Note)	Collateral None	December31,2022 1,148,962 $ - 1,148,962 $

• Note: Some of the Group’s loans were granted in accordance with the ‘Guidelines of Project Loans for Returning Overseas Taiwanese Businesses’ of National Development Fund, Executive Yuan. The interest rate of the loans for the first 5 years is the floating interest rate on a 2-year time deposit offered by the Directorate General of the Postal Remittances and Savings Bank less 0.245% of annual interest. In the event of failure to meet the requirements of the aforementioned Guidelines of Project Loans during the loan period, the interest rate will be changed to the floating interest rate on a 2-year time deposit offered by the Directorate General of the Postal Remittances and Savings Bank plus 0.255% of annual interest.

• A. For the years ended December 31, 2023 and 2022, the amounts of interest expense recognised in profit or loss were $15,331 and $6,834, respectively.

• B. Under the credit contract with certain banks, the Group is required to review financial ratios or values such as current ratio, net tangible assets, interest coverage ratio, and debt ratio in the latest consolidated financial statements at certain times during the credit period. As of the reporting date, the Group did not violate any of the related financial conditions.

• C. Information about the assets that were pledged for long-term borrowings as collateral is provided in Note 8.

(14) Pensions

• A.(a) The Company has a defined benefit pension plan in accordance with the Labor Standards Law, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. Under the defined benefit pension plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. For the Company’s domestic employees who are applicable to the Labor Pension Act, the Company and its domestic subsidiaries contribute monthly an amount equal to 10% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

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

		December	31,2023		December	31,2022
Present value of defined benefit obligations		$	958,189		$	956,158
Fair value of plan assets	(		780,143)	(		770,500)
Net defined benefit liability		$	178,046		$	185,658

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

Movements in net defined benefit liabilities are as follows:	lities are as follows:
Present value of Fair value of Net defined defined benefit obligations plan assets benefit liability At January 1 956,158 $ 770,500) ($ 185,658 $ Current service cost 4,937 - 4,937 Interest expense (income) 10,900 8,783) ( 2,117 971,995 779,283) ( 192,712 Remeasurements: Return on plan assets (excluding amounts - 4,392) ( 4,392) ( included in interest income or expense) Change in financial assumptions - - - Experience adjustments 79,213 - 79,213 79,213 4,392) ( 74,821 Pension fund contribution - 89,487) ( 89,487) ( Paid pension 93,019) ( 93,019 - At December 31 958,189 $ 780,143) ($ 178,046 $ Present value of Fair value of Net defined defined benefit obligations plan assets benefit liability At January 1 1,102,913 $ 615,713) ($ 487,200 $ Current service cost 6,244 - 6,244 Interest expense (income) 6,948 3,879) ( 3,069 1,116,105 619,592) ( 496,513 Remeasurements: Return on plan assets (excluding amounts - 45,981) ( 45,981) ( included in interest income or expense) Change in financial assumptions 89,668) ( - 89,668) ( Experience adjustments 15,189 - 15,189 74,479) ( 45,981) ( 120,460) ( Pension fund contribution - 190,395) ( 190,395) ( Paid pension 85,468) ( 85,468 - At December 31 956,158 $ 770,500) ($ 185,658 $ 2023 2022	2023
		Net defined benefit liability
		185,658 $ 4,937 2,117
		192,712
		185,658 $

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

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

Discount rate Future salary increases	YearendedDecember31	YearendedDecember31
	2023 1.14% 1.00%	2022
		1.14%
		1.00%

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience Mortality Table.

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

obligation is affected. The analysis was as follows:
Increase0.5% Decrease0.5% December 31, 2023 Effect on present value of defined benefit obligation 19,835) ($ 21,945 $ December 31, 2022 Effect on present value of defined benefit obligation 20,390) ($ 22,439 $ Discount rate	Future salaryincreases
	Increase0.5% Decrease0.5% 21,863 $ 19,955) ($ 22,355 $ 20,513) ($	Decrease0.5%

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

~43~

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

• (f) The Company expects to pay contributions for the pension plan in the amount of $45,529 in the succeeding one year.

• (g) As of December 31, 2023, the weighted average duration of the retirement plan is 4 years. The analysis of timing of the future pension payment was as follows:

Within 1 year 1-2 year(s) 2-5 years Over 5 years	828,613 $ 100,753 13,158 93,204 1,035,728 $

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

• (b)The Company’s mainland China subsidiary, Value–Plus Technology (Suzhou) Co. (Value– Plus (Suzhou)), has a defined contribution plan. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on certain percentage of employees’ monthly salaries and wages. Other than the monthly contributions, the Company has no further obligations. Other foreign subsidiaries contributed to related pension management plans according to local regulations.

• (c)The pension costs under the defined contribution pension plan of the Company for the years ended December 31, 2023 and 2022 were $126,803 and $129,884, respectively.

(15) Preference share liability

On December 31, 2023: There were no such transactions.

Class B preferred shares Less: Maturity within one year	December31,2022
	1,003,851 $ -
	1,003,851 $

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• A. On December 3, 2020, the Company’s shareholders held an extraordinary general meeting and approved the private placement of class B preferred shares in the amount of 90,090 thousand shares. The subscriber, Chipbond Technology Corporation (Chipbond) has completed the payment on December 16, 2020, with a total amount of $999,999 at $11.1 per share. The effectived date was set on December 21, 2020. According to the issuance condition of class B preferred shares, the issuance period was 5 years and there was an obligation to pay cash or transfer another financial asset to the counterparty (holder). Thus, the value of the preference share was split into preference share liabilities and call options (shown as financial assets at fair value through profit or loss) in the amounts of $1,006,485 and $6,486, respectively. For the years ended December 31, 2022, the amount of interest expense which was estimated by annual rate and amortised based on interest method was $18,498 and $18,703, respectively.

• B. As of December 31, 2022, the value of preference share returned all amounted to $0. Refer to Note 6(23) for details of net gains (losses) recognised in profit or loss in relation to financial assets at fair value through profit or loss. Additionally, the Group has no financial assets at fair value through profit or loss pledged to others as collateral.

• C. The issuance conditions were as follows:

• (a) The distribution of earnings was based on the Company’s Articles of Incorporation, current year or current quarter and accumulated undistributable dividend shall be appropriated to class B preferred shares in the first priority. If there was no earning or earnings were not sufficient to be appropriated to class B preferred shares, the distributable earnings shall be appropriated to class B preferred shares. The insufficient dividend shall first then be appropriated in a profitable year or quarter afterward.

• (b) The annual dividend rate of class B preferred shares was 2% which were calculated at the issuance price per share and paid in cash, the ex-dividend date of preferred dividend was authorised to be determined by the Board of Directors. The issuance number in issuance year or quarter and recovered year or quarter were calculated at the actual issuance number of days.

• (c) If the expected dividend distribution amount of common share exceeds the dividend amount of class B preferred shares in the current year or quarter, the shareholders of class B preferred shares cannot participate in the distribution.

• (d) Except for aforementioned dividend, the shareholders of class B preferred shares cannot participate in the appropriation of earnings and reserves to shareholders of common share and other types of preference shares.

• (e) Class B preferred shares were not promised to be transferred to common share.

• (f) The shareholders of class B preferred shares have no voting right in the common shareholders’ meeting and cannot be elected as directors (including independent directors). However, the shareholders of class B preferred shares has voting right in preferred shareholders’ meeting and matters of preferred shareholders’ right.

~45~

• (g) When it comes to appropriate residual assets of company, class B preferred shares have priority over common shares and class C preferred shares. However, the amount was limited to the issuance price plus total amount of unpaid dividend.

• (h) The issuance period of class B preferred shares was 5 years, shareholders of class B preferred shares did not have right to demand the Company call back class B preferred shares. However, on the date after 3 years of the issuance date, the Company can call back all or some of class B preferred shares at actual issuance price in cash or other ways which were permitted by regulations. The rights and obligations of class B preferred shares which have not been called will continue until the Company calls back. In the current year of calling back the class B preferred shares, if the Company’s shareholders resolve to appropriate dividends, the amount of dividends which have to be distributed as of the date of call back will be calculated according to the number of actual issuance days in the current year. Please refer to Note 11(1) for the information of class B preferred shares which have been called back as resolved by the Company’s Board of Directors.

• (i) The preemptive rights for stockholders of class B preferred shares are the same as of common stocks when the Company increases its capital by issuing shares.

• (j) When class B preferred shares meet the condition of called back or mature in the issuance period, if the Company cannot call back all or some class B preferred shares due to force majeure or inscrutable fault of the Company, the rights of class B preferred shares which have not been called back will continue according to aforementioned issuance conditions until the Company calls back all the class B preferred shares. The dividends will be calculated according to original annual rate and actual extension period, the rights of class B preferred shares shall not be diminished according to the Company’s Articles of Incorporation.

• (k) Class B preferred shares will not be listed in the issuance period.

• D. On October 25, 2023, the Board of Directors resolved that the Company’s class B preferred shares, which was issued on December 21, 2023, on the day after 3 years of the issuance date, may be withdrawn at the actual issuance price in cash at any time in accordance with the Company’s Articles of Incorporation. On December 27, 2023, the Company repurchased shares at a repurchase price of $11.1 per share and decreased capital by cancelling 90,090 thousand, and the total amount was $999,999. Accordingly, the Company recognised a gain on recovery of preference share liabilities amounting to $2,570, which was shown as other income. The record date for the capital reduction was set on December 27, 2023, and the registration was completed on January 11, 2024.

~46~

(16) Share-based payment

• A. For the year ended December 31, 2023: There were no such transactions.

• B. For the year ended December 31, 2022, the Group’s share-based payment arrangements were as follows:

Type of arrangement Grant date Quantity granted Contract period Vesting conditions Restricted stocks to employees 2019.11.25 5,000 thousand shares 3 years Note Note: The service time limit and performance conditions were as follows:

• (a) After employees obtain employee restricted shares, starting from the effective date of capital increase, if employees are on-the-job when the vested period has expired, also, meet certain standard of annual individual performance assessment and comply with regulation, did not violate service contract of the Company, working rules and be penalized, the employees can achieve vested conditions.

• (b) The Group can use the earnings per share and profit growth of parent company only financial statements in the latest year of vesting period expires as a basis of performance conditions: The first year: Earnings per share was above $0.3 (including $0.3);

• The second year: Earnings per share was above $0.8 (including $0.8); and

• The third year: Earnings per share was above $1.0 (including $1.0).

• (c) After achieving individual performance conditions and company performance conditions in the same time, employees’ proportion of shares under vested condition in the current year based on the service conditions were as follows:

Service for one year after distribution, 30% of the distributed shares;

Service for two years after distribution, 30% of the distributed shares;

• Service for three years after distribution, 40% of the distributed shares;

• Restrictions on the rights and vesting conditions of restricted shares for employees were as follows:

• (a) The restricted shares which the employees will obtain were kept by the designated trust institution as trustee, which the employee cannot request to return the restricted shares for any reasons or ways.

• (b) Before accomplishing the vesting conditions, the employee cannot sell, pledge, transfer, gift, set or dispose in other ways, and they have no right to be allotted or obtaining dividends. Other rights are similar with the capital that has been issued.

• (c) Before the employee accomplishes the vesting conditions, the attendance, proposal, speaking, right of voting, and other matters associated with shareholders' meeting were executed based on the trust custody contracts.

• (d) From the book closure date of issuance of bonus shares, cash dividends, issuance of common stock for cash and shareholders' meeting are regulated by Article 165-3 of the Company Law, or other facts that has occurred to the date of rights allocation. The unrestricted shares of the employees that have achieved the vesting conditions during the aforementioned period still have no rights to obtain dividends or allotment.

~47~

• C. Details of the share-based payment arrangements are as follows: (unit: thousand shares)

		2022
At January 1		1,681
Called back in the period (Note)	(	108)
Options vested	(	1,573)
At December 31		-

Note: For the restricted shares which were called back by the Group during the year ended December 31, 2022, 22 thousand shares have not yet completed the registration of cancellation as of December 31, 2022.

• D. On November 25, 2019, the fair value of share-based payments transaction which was given by the Group was $15.8 per share.

• E. For the year ended December 31, 2022, the Group recognised expenses due to share-based payment transactions in the amount of $6,986.

• (17) Share capital

• A. On December 31, 2023, the Company’s authorised capital was $20,000,000, consisting of 2,000,000 thousand shares (including the number of option certificates which can be purchased), and will be issued in several times. The shares which were not issued can be issued in common shares and preference shares in several times based on the Company’s business requirement, 90,000 thousand shares will be retained for option certificates. As of December 31, 2023, the Company’s paid-in capital was $7,354,883, consisting of 555,308 thousand common shares and 180,180 thousand class C preferred shares in private placement, with a par value of NT$10 (in dollars) per share. All proceeds from shares issued have been collected. The Company’s outstanding number of preference shares in the beginning and ending of the period were the same.

  • Note: Details of the registration of changes in the Company’s paid-in capital due to the recovery of class B preferred shares are provided in Note 6(15) D.

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

thousand shares)
		2023		2022
Shares outstanding at January 1		555,308		553,736
Restricted shares called back but not yet		22		15
cancelled at the beginning of the period
Restricted shares not yet vested at the
beginning of the period		-		1,681
Shares issued at January 1		555,330		555,432
Cancellation of employee restricted shares	(	22)	(	102)
Restricted shares called back but not yet		-	(	22)
cancelled at the end of the period
At December 31		555,308		555,308

~48~

• B. The Company had increased capital by cash by $1,800,000 thousand, consisting of 180,000 thousand shares with a par value of $10 per share and issued at discounted price of $9.2 on May 30, 2007. The rights and obligations of new shares by private placement are the same as those of common shares. The number of the Company’s private placement common shares outstanding was 70,785 thousand shares due to the reduction of ordinary share capital conducted by the Company in the past. The registration for the retroactive handling of public issuance procedures for the private placement common shares was filed in September 2022 and the registration became effective on October 3, 2022 in accordance with the Order No. Tai-ZhengShang-Yi-Zi-1111804957. The shares have been traded and listed on the Taiwan Stock Exchange since October 18, 2022.

• C. On June 29, 2018, the Company’s shareholders approved to issue restricted shares in the amount of 50,000 thousand, which was common share with a par value of $10, has been applied for effectiveness through FSC on June 10, 2019. The effective date was November 25, 2019 and the registration of changes has been completed on December 10, 2019.

• D. For details of the issuance and recovery of class B preferred shares, please refer to Note 6(15).

• E. On December 3, 2020, the Company’s shareholders in the extraordinary meeting approved to issue 180,180 thousand class C preferred shares in private placement with a par value of $10 and issued at $11.1 per share. The paid-in capital was $1,801,800 thousand. The effective date of capital increase was set on December 21, 2020 in accordance with the Securities and Exchange Act Article 43-6.

• According to the Company’s Articles of Incorporation, the rights and obligations of preferred share were as follows:

• (a) The distribution of earnings was based on the Company’s Articles of Incorporation, current year or current quarter and accumulated undistributable dividend shall be appropriated to class B preferred shares in the first priority, then, appropriated to class C preferred shares in the second priority.

• (b) The annual dividend rate of class C preferred shares was 2% which was calculated at the issuance price per share and paid in cash, the ex-dividend date of preferred dividend was authorised to be determined by the Board of Directors. The issuance number in issuance year or quarter and recovered year or quarter were calculated at the actual issuance number of days.

• (c) If the expected dividend distribution amount of common share exceeds the dividend amount of class C preferred shares in the current year or quarter, the shareholders of class C preferred shares can participate in the distribution until the dividend amount of class C preferred shares are the same as common share per share.

• (d) The Company has discretion in dividend distribution of Class C preferred shares. If the Company has no or has insufficient current year’s earnings for distribution or has other necessary considerations, the Company can resolve not to distribute dividend to class C preferred shares and it will not default, and the shareholders of class C preferred shares cannot object. Class C preferred shares are non-cumulative, and the amount of dividends which were not distributed or insufficient will not be made up in the profitable year or quarter thereafter.

~49~

• (e) Starting from the next day of five years after issuance, the shareholders of class C preferred shares can transfer the preferred share to common share at a transfer ratio of 1:1. After the transfer of preferred share to common share, the rights and obligations (excluding the transfer restriction by regulation and not listed) were the same as other outstanding common share of the Company. For class C preferred shares which have been transferred into common shares before the ex-right (ex-dividend) date in the current year or quarter can participate in the common share distribution of earnings or reserves in the current year or quarter and cannot participate in the dividend distribution of preferred shares in the current year or quarter. For class C preferred shares which have been transferred into common shares after the ex-right (ex-dividend) date in the current year or quarter can participate in the dividend distribution of preferred share in the current year or quarter and cannot participate in the dividend distribution of earnings or capital reserves in the current year or quarter. Preferred dividends will not be repeatedly appropriated if it is distributed in the same year or quarter with common stock dividends.

• (f) The shareholders of class C preferred shares have no voting right in the common shareholders’ meeting and cannot be elected as directors (including independent directors). However, the shareholders of class C preferred shares have voting right in preferred shareholders’ meeting and matters of preferred shareholders’ right.

• (g) When it comes to appropriating residual assets of Company, class C preferred shares have priority over common shares and next to class B preferred shares. However, the amount was limited to the issuance price plus total amount of unpaid dividend.

• (h) Class C preferred shares have no expiry date, and the shareholders of class C preferred shares have no right to require the Company to call back class C preferred shares or transfer the class C preferred share into common share in advance. However, the Company can call back in cash at actual issuance price, mandatorily transfer by issuing new shares or call back all or some class C preferred shares in other ways permitted by regulations on the next day after three years. The rights and obligations of class C preferred shares which have not been called will continue until the Company calls back. In the current year of calling back the class C preferred shares, if the Company’s shareholders resolve to appropriate dividends, the amount of dividends which have to be distributed as of the date of call back will be calculated according to the actual days of issuance in the current year.

• (i) The preemptive rights for stockholders of class C preferred shares are the same as of common shares when the Company increases its capital by issuing shares.

• (j) Class C preferred shares were not listed and traded in the issuance period, however, if all or some were transferred into common shares, the Board of Directors was authorised to apply for public offering and listing to the authorisation according to the current situation and related regulations.

• F. On June 9, 2023, the shareholders of the Company resolved to issue employee restricted shares of 5,000 thousand shares with a par value of NT$10 per share, total amounting to $50,000 thousand, has been applied for effectiveness through FSC on August 25, 2023. The related processes are still ongoing.

~50~

(18) Capital surplus

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

the legal reserve is insufficient.
		December 31, 2023		December 31, 2022
Premium on issuance of common shares	$	17,417	$	17,417
Premium on issuance of preferred shares		198,198		198,198
Changes in ownership interests in subsidiaries		5,832		5,832
Difference between consideration and carrying		16,940		16,940
amount of subsidiaries acquired or disposed
Employee restricted shares		-	(	216)
	$	238,387	$	238,171

(19) Retained earnings

• A. According to the Company’s Articles of Incorporation, after every end of quarter, the Company can appropriate earnings or offset deficits, and for earnings which were appropriated in the form of cash, it shall be resolved by the Board of Directors and reported to shareholders in accordance with the Company Act, Article 228-1 and paragraph 5 of Article 240. The aforementioned regulation had been revoked by the shareholders at their meeting on June 9, 2023.

• B. Under the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. For setting aside or reversal for special reserve in accordance with related laws or Competent Authority’s regulations, if any, the Board of Directors should propose the distribution of the remaining earnings along with prior accumulated undistributed earnings for the approval of the shareholders. On June 9, 2023, the shareholders resolved for earnings which were appropriated in the form of cash, it shall be resolved by the Board of Directors and reported to shareholders in accordance with the Company Act, Article 228-1 and paragraph 5 of Article 240.

• C. The industry environment of the Company is constantly changing and the enterprise is in the growth stage of its life cycle. Considering the Company’s capital requirement in the future and long-term financial plan and satisfying shareholders’ demand of cash inflow, the expected appropriation amount in the current year shall not be lower than 10% of accumulated distributable amount. However, if the accumulated distributable earnings is lower than 1% of paid-in capital, the earnings cannot be appropriated, and the cash dividend shall not be lower than 10% of total dividend.

~51~

• D. According to Company Act, the distribution to legal reserve shall continue until the total amount equals to total capital. Legal reserve is used to offset accumulated deficits. If the Company has no deficits, 25% of the part of legal reserve exceeding the paid-in capital can be used to issue new stocks or cash to shareholders in proportion to their share ownership.

• E. Following the adoption of TIFRS, the FSC on April 6, 2012 issued Order No. FinancialSupervisory- Securities-Corporate-1010012865, which sets out the following provisions for compliance: On a public company’s first-time adoption of the TIFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders’ equity that a company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside an equal amount of special reserve. Following a company’s adoption of the TIFRS for the preparation of its financial reports, when distributing distributable earnings, it shall set aside to special reserve, from the profit/loss of the current period and the undistributed earnings from the previous period, an amount equal to other net deductions from shareholders’ equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements in the preceding point, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed.

• F. On June 9, 2023, the shareholders resolved the earnings appropriation for the year ended December 31, 2022 with a common share dividend of $0.85 per share and the total amount was $472,012; and with class C preferred share dividend of $0.85 per share. The total dividends amounted to $153,153.

• G. On June 10, 2022, the shareholders resolved the earnings appropriation for the year ended December 31, 2021 with a common share dividend of 1 per share and the total amount was $553,736; and with Class C preferred stock dividend of 1 per share. The total dividends amounted to $180,180.

(20) Operating revenue

amounted to $180,180. Operating revenue
Revenue from contracts with customers IC packaging and testing service revenue Electronics manufacturing service revenue Other operating revenue	YearendedDecember31
	2023 11,016,833 $ 5,508,538 165,065 16,690,436 $	2022
		9,901,937 $ 5,480,184 149,548
		15,531,669 $

~52~

A. Disaggregation of revenue from contracts with customers

==> picture [454 x 365] intentionally omitted <==

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

Semiconductor
Year ended December 31, 2023 Group EMS Group Total
-
IC packaging and testing service revenue $ 11,016,833 $ $ 11,016,833
Manufacture of e lectronic products - 5,508,538 5,508,538
Others 44,859 120,206 165,065
$ 11,061,692 $ 5,628,744 $ 16,690,436
Timing of revenue recognition:
Over time $ 11,016,833 $ - $ 11,016,833
At a point in time 44,859 5,628,744 5,673,603
$ 11,061,692 $ 5,628,744 $ 16,690,436
Semiconductor
Year ended December 31, 2022 Group EMS Group Total
-
IC packaging and testing service revenue $ 9,901,937 $ $ 9,901,937
Manufacture of e lectronic products - 5,480,184 5,480,184
Others 70,358 79,190 149,548
$ 9,972,295 $ 5,559,374 $ 15,531,669
Timing of revenue recognition:
Over time $ 9,901,937 $ - $ 9,901,937
At a point in time 70,358 5,559,374 5,629,732
$ 9,972,295 $ 5,559,374 $ 15,531,669
----- End of picture text -----

B. Contract assets and liabilities

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

Current contract assets IC packaging and testing service Current contract liabilities IC packaging and testing service Manufacture of electronic products	December31,2023 409,186 $ 65,329 $ 21,858 87,187 $	December31,2022
		272,248 $
		68,026 $ 9,853
		77,879 $

Note: As of January 1, 2022, the Group recognised current contract liabilities in the amount of $88,971.

(b) Information relating to credit risk of contract assets is provided in Note 12(2).

~53~

• (c) For the years ended December 31, 2023 and 2022, revenue recognised that was included in the contract liability balance at the beginning of the period amounted to $5,281 and $13,178, respectively.

(21) Interest income

Interest income from bank deposits Interest income from loans to others Interest income from financial assets measured at amortised cost	2023 2022 41,107 $ 10,576 $ - 525 5,028 1 46,135 $ 11,102 $ Year ended December 31

(22) Other income

Other income
Service revenue Rental revenue Dividend income Other income	Year ended December 31
	2023 9,996 $ 6,385 118,745 40,260 175,386 $	2022
		26,815 $ 7,235 54,660 77,338
		166,048 $

(23) Other gains and losses

Other gains and losses
		YearendedDecember31
		2023		2022
(Losses) gains on disposals of property, plant and	($	1,123)	$	20,498
equipment
Impairment loss on property, plant and equipment	(	4,451)		-
Gains on disposals of non-current assets held		-		52,164
for sale
Net currency exchange (losses) gains	(	43,505)		101,628
Gains on lease modification		1		1,894
Losses on financial assets at fair value through		-	(	1,261)
profit or loss
Others		8,393	(	21,743)
	($	40,685)	$	153,180

~54~

(24) Finance costs

Finance costs
			YearendedDecember31
			2023			2022
Interest expense on borrowings from financial		$	15,339		$	10,636
institutions
Interest expense on lease liability			2,615			3,156
Dividends on preference share liabilities			18,498			18,703
Others			7			4
			36,459			32,499
Less: Capitalisation of qualifying assets	(		133)	(		6,590)
		$	36,326		$	25,909

	Less: Capitalisation of qualifying assets 133) ( 6,590) ( 36,326 $ 25,909 $	Less: Capitalisation of qualifying assets 133) ( 6,590) ( 36,326 $ 25,909 $
(25)	Expenses by nature 2023 2022 Employee benefit expense 4,283,191 $ 4,164,179 $ Depreciation charges on property, plant 926,781 1,084,515 and equipment (Note) Depreciation expense on right-of-use assets 20,949 27,563 Amortisation charges on intangible assets 48,362 26,739 Year ended December 31
		2022
		4,164,179 $ 1,084,515 27,563 26,739

Note: Including the amortisation of losses on sale and leaseback transactions to depreciation charges amounting to $0 and $30 for the years ended December 31, 2023 and 2022, respectively. (26) Employee benefit expense

Employee benefit expense
Salary expenses Labour and health insurance fees Pension costs Directors’ remuneration Compensation cost of employee restricted shares Other personnel expenses	YearendedDecember31
	2023 3,516,858 $ 356,809 133,857 27,790 - 247,877 4,283,191 $	2022
		3,407,333 $ 337,433 139,197 22,926 6,986 250,304
		4,164,179 $

Under the Company’s Articles of Incorporation, the current year's pre-tax profit, net of employees’ compensation and directors’ remuneration, shall be first used to offset accumulated deficits, than appropriate over 10%~15% for employees’ compensation and under 1% for remuneration to directors.

~55~

A company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, has the determination of distribution ratios of employees’ compensation and directors’ remuneration and the abovementioned employees’ compensation distributed in the form of shares or in cash; and in addition thereto a report of such distribution shall be submitted to the shareholders during their meeting. The profit distributable as employees’ compensation distributed can be in the form of shares or in cash. Qualification requirements of employees, including the employees of subsidiaries of the company meeting certain specific requirements, entitled to receive aforementioned stock or cash may be specified in the Articles of Incorporation.

For the years ended December 31, 2023 and 2022, the employees’ compensation and directors’ remuneration were estimated and accrued based on certain proportion of distributable profit of current year amounting to $249,200 and $197,500; as well as $24,910 and 19,740, respectively.

Employees’ compensation of $197,500 and directors’ remuneration of $19,740 for 2022 as resolved by the Board of Directors were in agreement with those amounts recognised in the 2022 financial statements. The compensation and remuneration had been distributed as of the reporting date.

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

(27) Income tax

A. Income tax expense

Taiwan Stock Exchange. ome tax Income tax expense
			Year ended December 31
			2023		2022
Current tax:
Current tax on profits for the period		$	414	$	26,799
Prior year income tax (over) underestimation	(		28,797)		91,874
Total current tax	(		28,383)		118,673
Deferred tax:
Origination and reversal of temporary			365,468		38,370
differences
Origination and reversal of tax loss			-		162,592
Total deferred tax			365,468		200,962
Income tax expense		$	337,085	$	319,635

~56~

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

		YearendedDecember31	YearendedDecember31	YearendedDecember31
		2023		2022
Remeasurement of defined benefit obligations	($	14,964)	$	24,092
Changes in fair value of financial assets at fair
value through other comprehensive income	(	1,318)	(	90)
Currency translation differences	(	10,563)		7,819
	($	26,845)	$	31,821

B. Reconciliation between income tax expense and accounting profit

Reconciliation between income tax expense and accounting profit	Reconciliation between income tax expense and accounting profit	Reconciliation between income tax expense and accounting profit	Reconciliation between income tax expense and accounting profit
Amounts of deferred tax assets or liabilities as a result of temporary differences and tax losses are as follows: 2023 2022 Tax calculated based on profit before tax and statutory tax rate 467,519 $ 372,629 $ Items adjusted in accordance with tax regulation 43,689) ( 20,548) ( Temporary difference not recognised as deferred tax assets 6,247 5,903) ( Change in assessment of realisation of deferred tax assets 64,195) ( 40,936) ( Prior year taxable loss not recognised as deferred tax assets - 71,532) ( Effect from investment tax credits - 5,949) ( Prior year income tax (over) underestimation 28,797) ( 91,874 Income tax expense 337,085 $ 319,635 $ YearendedDecember31 Recognised in Recognised in other Translation January1 profit or loss comprehensive income differences December 31 Deferred tax assets: - Temporary differences: Unrealised foreign exchange loss 3,282 $ 8,144 $ - $ - $ 11,426 $ Allowance for inventory valuation losses 54,134 30,896 - - 85,030 Investments accounted for using equity method 849,281 861,701) ( 10,563 - 1,857) ( Impairment of assets 1,600 - - - 1,600 Net defined benefit liability - non-current 38,790 16,487) ( 14,964 - 37,267 Reserve for unused compensated absence 7,622 314 - - 7,936 Others 16,438 7,346) ( 1,318 - 10,410 Unused tax losses 1,921 480,712 - 32) ( 482,601 973,068 $ 365,468) ($ 26,845 $ 32) ($ 634,413 $ 2023
	Recognised in January1 profit or loss 3,282 $ 8,144 $ 54,134 30,896 849,281 861,701) ( 1,600 - 38,790 16,487) ( 7,622 314 16,438 7,346) ( 1,921 480,712 973,068 $ 365,468) ($	Recognised in other Translation comprehensive income differences December 31 - $ - $ 11,426 $ - - 85,030 10,563 - 1,857) ( - - 1,600 14,964 - 37,267 - - 7,936 1,318 - 10,410 - 32) ( 482,601 26,845 $ 32) ($ 634,413 $	December 31
			634,413 $

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

~57~

Deferred tax assets: - Temporary differences: Unrealised foreign exchange loss Allowance for inventory valuation losses Investments accounted for using equity method Impairment of assets Net defined benefit liability - non-current Reserve for unused compensated absence Others Unused tax losses	Recognised in Recognised in other January1 profit or loss comprehensive income 750 $ 2,532 $ - $ 59,257 5,123) ( - 859,100 2,000) ( 7,819) ( 2,100 500) ( - 99,098 36,216) ( 24,092) ( 6,634 988 - 14,399 1,949 90 164,483 162,592) ( - 1,205,821 $ 200,962) ($ 31,821) ($ 2022	Translation differences - $ - - - - - - 30 30 $	December 31 3,282 $ 54,134 849,281 1,600 38,790 7,622 16,438 1,921 973,068 $

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

(1) The Company:

Year incurred 2017 2018 2020 2023 Year incurred 2017 2018 2020	Amount filed/ assessed 1,155,026 $ 530,448 203,866 1,872,353 Amount filed/ assessed 1,155,026 $ 530,448 203,866	Unrecognised Unused amount deferred tax assets - $ - $ 327,339 - 203,866 - 1,872,353 - December31,2023 Unrecognised Unused amount deferred tax assets - $ - $ - - 162,513 162,513 December 31, 2022	Expiry year
			2027 2028 2030 2033 Expiry year
			2027 2028 2030

(2) Foreign subsidiaries:

December 31, 2023

		December31,2023	December31,2023
Year incurred 2019 2020 2021 2022 2023	Amount filed/ assessed 6,296 $ 25,865 28,343 13,456 32,460	Unrecognised Unused amount deferred tax assets 6,296 $ 4,407 $ 25,865 25,865 28,343 28,343 13,456 13,456 32,460 32,460 December31,2022		Expiry year
				2024 2025 2026 2027 2028
Year incurred 2019 2020 2021 2022	Amount filed/ assessed 6,401 $ 26,295 28,814 13,679	Unused amount 6,401 $ 26,295 28,814 13,679	Unrecognised deferred tax assets 4,480 $ 26,295 28,814 13,679	Expiry year
				2024 2025 2026 2027

~58~

• E. The amounts of deductible temporary differences that were not recognised as deferred tax assets are as follows:

December 31, 2023 December 31, 2022 Deductible temporary difference $ - $ 1,261

• G. The Company’s income tax returns through 2021 have been assessed and approved by the Tax Authority.

(28) Earnings per share

Authority. Earnings per share	Authority. Earnings per share	Authority. Earnings per share
Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (share in thousands) (in dollars) Basic earnings per share Profit attributable to the parent 1,881,210 $ Less: Dividends on class C preferred shares 401,576) ( Profit attributable to ordinary shareholders of the parent (Note) 1,479,634 $ 555,308 2.66 $ Diluted earnings per share Profit attributable to the parent 1,881,210 $ 555,308 Less: Dividends on class C preferred shares 401,576) ( Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 6,012 Convertible preferred stock 401,576 180,180 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 1,881,210 $ 741,500 2.54 $ Year ended December 31,2023 Amount Weighted average number of ordinary shares outstanding Earnings per share after tax (share in thousands) (in dollars) Basic earnings per share Profit attributable to the parent 1,448,653 $ Less: Dividends on class C preferred shares 330,484) ( Profit attributable to ordinary shareholders of the parent (Note) 1,118,169 $ 553,895 2.02 $ Diluted earnings per share Profit attributable to the parent 1,448,653 $ 553,895 Less: Dividends on class C preferred shares 330,484) ( Assumed conversion of all dilutive potential ordinary shares Employees’ compensation - 12,636 Employee restricted stock - 1,474 Convertible preferred stock 330,484 180,180 Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares 1,448,653 $ 748,185 1.94 $ Year ended December 31,2022
	Weighted average number of ordinary shares outstanding (share in thousands) 553,895 553,895 12,636 1,474 180,180 748,185	Earnings per share (in dollars)
		2.02 $
		1.94 $

~59~

Note: The Company issued three classes of equity instruments, including ordinary shares, class B preferred shares and class C preferred shares. Since class C preferred shares are noncumulative and participating equity instruments (refer to Note 6(17)E. (c) for the related terms of issuance), the Company assumed that ordinary shares and participating equity instruments would share in earnings until all of the profit or loss for the period had been distributed when calculating the profit or loss attributable to ordinary shareholders of the parent.

(29) Supplemental cash flow information

• A. Investing activities with partial cash payments:

			YearendedDecember31	YearendedDecember31	YearendedDecember31	YearendedDecember31
			2023			2022
Purchase of property, plant and equipment		$	815,933		$	908,962
Increase (decrease) in prepayments for
business facilities			8,930	(		146,574)
Add: Opening balance of payable on
equipment (Note)			303,918			633,814
Less: Ending balance of payable on
equipment (Note)	(		269,709)	(		303,918)
Cash paid during the period		$	859,072		$	1,092,284
Note : Shown as ‘other payables’.

B. Investing and financing activities with no cash flow effects ：

Changes in liabilities from financing activities 2023 2022 Prepayments for business facilities transferred to prepayments 2,200 $ 195 $ Prepayments for business facilities transferred to property, plant and equipment 525,104 $ 792,559 $ Prepayments for business facilities transferred to intangible assets 2,035 $ 140 $ Long-term borrowings, current portion 107,054 $ - $ YearendedDecember31 Changes in foreign January1,2023 Cash flows exchange rate Others December 31,2023 Long-term borrowings 1,148,962 $ 90,000 $ - $ - $ 1,238,962 $ Lease liabilities 161,310 27,950) ( - 500 133,860 Guarantee deposits received 39,864 4,375) ( 2) ( - 35,487 Preference share liabilities 1,003,851 999,999) ( - 3,852) ( -		YearendedDecember31	YearendedDecember31	YearendedDecember31
				2022
	$		$	195
	$		$	792,559
	$		$	140
	$		$	-
				December 31,2023 1,238,962 $ 133,860 35,487 -
Long-term borrowings Lease liabilities Guarantee deposits received Preference share liabilities

(30) Changes in liabilities from financing activities

~60~

Short-term borrowings Short-term note and bills payables Long-term borrowings Lease liabilities Guarantee deposits received Preference share liabilities	January1,2022 Cash flows 299,408 $ 300,237) ($ 49,986 50,011) ( 648,394 500,568 249,042 34,306) ( 57,018 17,156) ( 1,005,149 -	Changes in foreign exchange rate Others 829 $ - $ - 25 - - 4,644 58,070) ( 2 - - 1,298) (	December 31,2022 - $ - 1,148,962 161,310 39,864 1,003,851

7. Related Party Transactions

(1) Names of related parties and relationship

Names of related parties Relationship with the Company ATP Electronics Taiwan Inc. (ATP) Associate (Note 1) OSE Properties, Inc. (Properties) Associate (Note 2) Chipbond Technology Corporation (Chipbond) Entities with significant influence to the Group Phison Electronics Corp. (Phison) Key management personnel (Note 3)

Note 1: In April 2022, the Company’s Board of Directors resolved to dispose ATP Electronics Taiwan Inc. which was transferred to non-current assets held for sale, please refer to Note 6(11) for details. The Company sold all its equity interests in ATP in August to September 2022; therefore, it was no longer the Company’s associate.

Note 2: The Group’s investee, OSE PROPERTIES, INC., has dissolved and liquidated on July 31, 2023.

• Note 3: This person was no longer the Group’s related party after resigning from being the Group’s director since November 7, 2022.

(2) Significant related party transactions

A. Sales

Phison Associates Entities with significant influence to the Group	YearendedDecember31	YearendedDecember31
	2023 - $ - 400 400 $	2022
		2,017,268 $ 142,197 953
		2,160,418 $

The sales price to the above related parties was determined through mutual agreement based on the market rates. The collection term is available to third parties.

~61~

B. Purchases

Purchases
		Year ended	December31
		2023		2022
Key management personnel of the Group	$	-	$	1,054
Entities with significant influence to the Group		2,942		1,853
Associates		-		654
	$	2,942	$	3,561

The purchase price to the above related parties was determined through mutual agreement based on the market rates. The payment term is available to third parties.

C. Receivables from related parties

Receivables from related parties
		December 31, 2023		December 31, 2022
Accounts receivable:
Entities with significant influence to the Group		$	271	$	399
Less: Loss allowance	(		1)		-
		$	270	$	399

Receivables from related parties mainly arose from sales. The terms for receivables from sales are 30 days after monthly billings. The receivables are unsecured in nature and bear no interest.

D. Payables to related parties

Payables to related parties
Accounts payable: Entities with significant influence to the Group Other payables: Entities with significant influence to the Group	December31,2023 1,474 $ 19,781 $	December31,2022
		736 $
		20,000 $

Payables to related parties pertain to purchase of materials and dividends on preference share liabilities. The payment terms are 30 days after monthly billings. The payables bear no interest.

E. Property transactions

(a)Acquisition of property, plant and equipment:

Property transactions (a)Acquisition of property, plant and equipment:
(b)Disposal of property, plant and equipment: Key management personnel of the Group	Year ended December31
	2023 - $	2022
		360 $

Entities with significant influence to the Group	Year ended December31	Year ended December31	Year ended December31
	Disposalproceeds Gain on disposal - $ - $ 2023	2022
	Disposalproceeds - $	Disposalproceeds 6,180 $	Gain on disposal
			6,149 $

~62~

－ F. Lease transactions lessee

The Group leased land from OSE Properties, Inc. Rental contracts are made for periods from 1999 to 2049 and the rental is payable monthly based on mutual agreements. The contract was terminated since January 1, 2022 due to the sale of land by OSE Properties, Inc. Please refer to Note 6(23) for the related gain on lease modification.

－ G. Lease transactions lessor

Lease transactions－lessor
		Year ended	December31
		2023		2022
Rental income:
ATP	$	-	$	2,838
Entities with significant influence to the Group		1,255		826
	$	1,255	$	3,664

Plant, office and equipment were leased under mutual agreement, and the collection term is available to third parties.

H. Loans to/from related parties

Loans to PROPERTIES:

• (a) The Group’s subsidiary, OSE Philippines, Inc. lent US$4,387 thousand to the associate, Properties, on July 31, 1996, principal and interest are paid after disposal of properties, and the Group has first mortgage right under mutual agreement. In the first quarter of 2015, PROPERTIES repaid US$1,285 thousand due to disposal of certain land. As of December 31, 2022, PROPERTIES has fully paid the borrowings.

• (b) Interest income for the year ended December 31, 2022 amounted to $525. For the year ended December 31, 2022, interest income was collected at 2.5% per annum.

• I. Others

• (a) The dividends from the entities with significant influence to the Group that the Group recognised for the years ended December 31, 2023 and 2022 were $118,745 and $54,660, respectively. In addition, details of the Company’s class B preferred shares held by the entities with significant influence to the Group are provided in Notes 6(15) and (24).

• (b) The Group disposed all shares of ATP Electronics Taiwan Inc. in September 2022, and some equity was repurchased as treasury stock by ATP Electronics Taiwan Inc. The transaction amount was $137,067, and the gain on disposal was $2,302. Information about the disposal is provided in Note 6(6).

~63~

(3) Key management compensation

==> picture [496 x 234] intentionally omitted <==

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

Year ended December 31
2023 2022
Short-term employee benefits $ 92,304 $ 86,278
Post-employment benefits 594 617
Share-based payment - 705
$ 92,898 $ 87,600
Pledged Assets
Book value
Pledged asset December 31, 2023 December 31, 2022 Purpose
Property, plant and equipment
- Buildings and structures $ 724,158 $ 771,674 Credit line for long-term-borrowings
- Machinery and equipment 76,917 330,803 Credit line for long-term-borrowings
Guarantee deposits paid - time deposits 14,077 14,000 Customs guarantee or others
$ 815,152 $ 1,116,477
----- End of picture text -----

8. Pledged Assets

9. Significant Contingent Liabilities and Unrecognised Contract Commitments

(1) Contingencies

None.

(2) Commitments

• A. As of December 31, 2023 and 2022, guarantee given by the bank for the payment of input tax imposed for sales from a tax free zone to non-tax free zone notes of $0 and $400,000, respectively.

• B. As of December 31, 2023 and 2022, the Company issued promissory notes of $7,618,276 and $8,017,920, respectively, as guarantees for bank loans.

• C. As of December 31, 2023 and 2022, the Company issued promissory notes of $14,242 and $13,738, respectively, as guarantees for payments of raw materials and machineries purchased.

• D. As of December 31, 2023 and 2022, the Group had letters of credit issued but not used amounting to US$0 thousand and US$112 thousand, respectively.

• E. Capital expenditure contracted for at the balance sheet date but not yet incurred is as follows:

Property, plant and equipment	December31,2023 389,110 $	December31,2022
		201,515 $

• F. Details of the commitments on financial terms under credit contracts with certain banks are provided in Note 6(13) B.

10. Significant Disaster Loss

None.

~64~

11. Significant Events after the Balance Sheet Date

None .

12. Others

(1) Capital management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

During the year ended December 31, 2023, the Group’s strategy, which was unchanged from 2022, was to balance overall capital structure. As of December 31, 2023 and 2022, the Group’s gearing ratio is as follows:

Total liabilities Total assets Gearing ratio	December 31, 2023 7,193,165 $ 18,467,008 $ 39%	December31,2022
		7,196,008 $
		16,946,784 $
		42%

(2) Financial instruments

A. Financial instruments by category

nancial instruments Financial instruments by category
Financial assets Financial assets measured at fair value through other comprehensive income Designation of equity instrument Financial assets at amortised cost Cash and cash equivalents (excluding cash on hand) Financial assets at amortised cost Notes receivable Accounts receivable (including related parties) Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings (including current portion) Preference share liability Lease liability (including current and non-current)	December31,2023 1,839,213 $ 3,909,576 $ - - 4,462,986 106,713 36,603 8,515,878 $ 3,967,823 $ 1,416,728 1,238,962 - 6,623,513 $ 133,860 $	December31,2022
		1,021,427 $
		3,945,629 $ 245,600 155 3,022,486 38,894 17,098
		7,269,862 $
		3,043,151 $ 1,319,565 1,148,962 1,003,851
		6,515,529 $
		161,310 $

~65~

• B. Financial risk management policies

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

• (b) The Group has established appropriate policies, procedures and internal controls in accordance with the relevant regulations to manage the aforementioned financial risks. Before entering into significant transactions, due approval process by the Board of Directors and Audit Committee must be carried out based on the relevant regulations and internal control procedures. The Group complies with its financial risk management policies at all times.

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

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

• ii. The Group’s management hedges foreign exchange risk through natural hedges or derivative financial instruments (including forward foreign exchange contracts) to prevent decreases in value of assets denominated in foreign currencies and fluctuations in future cash flows. The use of these derivative financial instruments assists in decreasing the effect of foreign currency fluctuations but cannot eliminate the impact entirely. The Group’s purpose to hold certain investments in foreign operations is for strategic investments; thus, the Group does not hedge those investments.

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

~66~

(Foreign currency: functional currency) Financial assets Monetary items USD:NTD JPY:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD JPY:NTD (Foreign currency: functional currency) Financial assets Monetary items USD:NTD JPY:NTD Non-monetary items USD:NTD Financial liabilities Monetary items USD:NTD JPY:NTD			December31,2023	December31,2023
	Foreign currency amount (In thousands) 163,387 $ 734,289 19,539 87,670 483,077	Exchange rate 30.71 0.2174 30.71 30.71 0.2174	Book value Degree of (NTD) variation 5,017,615 $ 1% 159,634 1% 600,028 1% 2,692,346 1% 105,021 1% December 31,2022		Sensitivityanalysis
					Effect on profit or loss 50,176 $ 1,596 - 26,923 1,050	Effect on other comprehensive income
						- $ - 6,000 - -
	Foreign currency amount (In thousands) 119,925 $ 805,561 20,714 71,953 580,962	Exchange rate 30.7 0.2325 30.7 30.7 0.2325	Book value (NTD) 3,681,698 $ 187,293 635,907 2,208,957 135,074		Sensitivityanalysis
				Degree of variation 1% 1% 1% 1% 1%	Effect on profit or loss 36,817 $ 1,873 - 22,090 1,351	Effect on other comprehensive income
						- $ - 6,359 - -

~67~

• iv. The total exchange gain, including realised and unrealised, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2023 and 2022 amounted to ($43,505) and $101,628, respectively.

Price risk

• i. The Group’s equity securities, which are exposed to price risk, are the held financial assets at fair value through other comprehensive income. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.

• ii. The Group’s investments in equity securities comprise shares issued by the domestic and foreign companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, other components of equity for the years ended December 31, 2023 and 2022 would have increased/decreased by $18,392 and $10,214, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

The Group’s long-term borrowings are floating-rate debts; therefore, the effective interest rate of its long-term borrowings will vary according to changes in market interest rates. If the market interest rate had increased/decreased by 25 basis points with all other variables held constant, post-tax profit for the years ended December 31, 2023 and 2022 would have increased/decreased by $2,478 and $2,298, respectively. The main factor is that changes in interest expense result in floating-rate borrowings.

(b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the counterparties of financial instruments on the contract obligations. The Group is exposed to credit risk from its operating activities (mainly accounts receivable and notes receivable) and from its financing activities (mainly bank deposits and various financial instruments). The maximum exposure to aforementioned credit risk was the carrying amount of financial assets recognised in the consolidated balance sheet.

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

~68~

• iii. As of December 31, 2023 and 2022, the amounts of accounts and notes receivable from top ten customers constitute 84% and 81%, respectively, of the Group’s total accounts and notes receivable. The credit concentration risk of the remaining accounts and notes receivable is immaterial.

• iv. The Group’s treasury manages the credit risks of bank deposits and other financial instruments based on the Group’s credit policy. Because the Group’s counterparties are determined based on the Group’s internal control, only banks and companies with good credit rating and with no significant default risk are accepted. Consequently, there is no significant credit risk.

• v. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition. The default occurs when the contract payments are past due over 90 days.

• vi. The Group classifies customer’s contract assets and notes and accounts receivable in accordance with credit rating of customer, geographic area and industry sector. The Group applies the simplified approach using a provision matrix to estimate the expected credit loss.

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

December 31, 2023 IC semiconductor group Gross carrying amount (Note) Lifetime expected credit losses Carrying amount Loss ratio Electronics manufacturing services group Gross carrying amount Lifetime expected credit losses Carrying amount Loss ratio December 31, 2022 IC semiconductor group Gross carrying amount (Note) Lifetime expected credit losses Carrying amount Loss ratio Electronics manufacturing services group Gross carrying amount Lifetime expected credit losses Carrying amount Loss ratio				Overdue
	Not past due 2,554,784 $ 2,695) ( 2,552,089 $ 0.11%	Up to 30 days 264,292 $ 582) ( 263,710 $ 0.22%	31to 60 days 140,192 $ 463) ( 139,729 $ 0.33%	61to 90 days 2,426 $ 125) ( 2,301 $ 0.44%～5.15% Overdue	91to180 days 8,991 $ 461) ( 8,530 $ 0.66%～5.15%	Over 180 days - $ - - $ 100%	Total
							2,970,685 $ 4,326) (
							2,966,359 $
	Notpast due $ 1,782,381 2,006) ( 1,780,375 $ 0.11%	Upto30days $ 99,429 196) ( 99,233 $ 0.22%	31 to60days $ 26,208 82) ( 26,126 $ 0.33%	61 to90days $ 79 - 79 $ 0.44% Overdue	91 to 180days $ - - - $ 0.66%～8.33%	Over 180days $ - - - $ 100%	Total
							$ 1,908,097 2,284) (
							1,905,813 $
	Not past due 1,846,741 $ 4,270) ( 1,842,471 $ 0%～0.36%	Up to 30 days 136,782 $ 4,402) ( 132,380 $ 0%～3.73%	31to 60 days 47,621 $ 4,500) ( 43,121 $ 0%～9.45%	61to 90 days 182 $ 17) ( 165 $ 0%～9.55% Overdue	91to180 days 604 $ 84) ( 520 $ 0%～13.89%	Over 180 days - $ - - $ 100%	Total
							2,031,930 $ 13,273) (
							2,018,657 $
	Not past due $ 1,184,157 - 1,184,157 $ 0%	Up to 30 days $ 61,291 - 61,291 $ 0%	31to 60 days $ 29,805 50 29,855 $ 0%	61to 90 days 91to180 days $ 1,462 ($ 817) 78 206 1,540 $ 611) ($ 0% 0%～25.27%		Over 180 days $ 132 132) ( - $ 100%	Total
							$ 1,276,030 202
							1,276,232 $

~69~

Note: Including the total amount of current contract assets, notes and accounts receivable.

• viii. Movements in relation to the Group applying the modified approach to provide loss allowance for contract assets, accounts receivable and other receivables are as follows:

At January 1 Provision for impairment Reversal of impairment loss Effect of foreign exchange At December 31	2023 2022 Accounts receivable Accounts receivable 13,071 $ 5,521 $ - 7,548 6,458) ( - 3) ( 2 6,610 $ 13,071 $

For provisioned loss for the years ended December 31, 2023 and 2022, there were no impairment losses arising from the contract assets and notes receivable.

(c) Liquidity risk

• i. The Group’s objective on liquidity risk management is to ensure the sufficiency of financial flexibility by maintaining cash and bank deposits for operations and adequate bank financing quota.

• ii. As of December 31, 2023 and 2022, the Group’s total unused amounts of short-term borrowings was $3,557,550 and $4,274,122, respectively. The Group’s total unused amounts of long-term borrowings was $4,850,000 and $3,459,038, respectively.

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

undiscounted cash flows.
December 31, 2023 Non-derivative financial liabilities: Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings (including current portion) Lease liabilities December 31, 2022 Non-derivative financial liabilities: Accounts payable (including related parties) Other payables (including related parties) Long-term borrowings (including current portion) Preference share liabilities Lease liabilities	Less than 1year 3,967,823 $ 1,416,728 120,919 27,623 Less than 1year 3,043,151 $ 1,319,565 13,866 20,000 30,568	Between 2 and 3years - $ - 904,909 26,709 Between 2 and 3years - $ - 503,928 1,039,396 45,071	Between 4 and 5years - $ - 243,722 23,374 Between 4 and 5years - $ - 617,973 - 23,955	Over 5years - $ - 5,824 76,214 Over 5years - $ - 60,182 - 87,804	Total
					3,967,823 $ 1,416,728 1,275,374 153,920 Total
					3,043,151 $ 1,319,565 1,195,949 1,059,396 187,398

~70~

(3) Fair value information

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

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

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

• Level 3: Unobservable inputs for the asset or liability.

• B. Financial instruments not measured at fair value The carrying amounts of the Group’s financial instruments not measured at fair value, including cash and cash equivalents, current financial assets at amortised cost, accounts receivable (including related parties), other receivables (including related parties), guarantee deposits paid, accounts payable (including related parties), other payables (including related parties), lease liabilities, preference share liabilities, long-term borrowings (including current portion) and guarantee deposits received, are approximate to their fair values.

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

• (a)The related information of nature of the asset and liabilities is as follows:

December 31, 2023 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through other comprehensive income Equity securities	Level 1 1,835,191 $ Level 1 1,010,814 $	Level 2 - $ Level 2 - $	Level3 4,022 $ Level3 10,613 $	Total
				1,839,213 $
				Total
				1,021,427 $

~71~

• (b) The methods and assumptions the Group used to measure fair value are as follows:

  • i. The fair value of equity instruments without active market (such as unlisted shares) was measured by applying a market approach based on the prices and other relevant information (such as the discount for lack of marketability and inputs like price to earnings ratio or price to book ratio) arising from the market transactions of the Company’s same or comparable equity instruments. Additionally, for equity instruments that lack sufficient or appropriate observable market information and comparable counterparties, net asset value is used to measure the profitability of underlying investments.

  • ii. The fair value of derivative financial instrument options that do not have a quoted market price in an active market was measured by applying a binary tree valuation model.

  • iii. The effect of unobservable inputs to the valuation of financial instruments is provided in Note 12(3)I.

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

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

At January 1 and December 31 Losses recognised in profit or loss Losses recognised in other comprehensive income At December 31 At January 1 Losses recognised in profit or loss Losses recognised in other comprehensive income At December 31

• F. For the years ended December 31, 2023 and 2022, there was no transfer into or out from Level 3.

• G. Treasury segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to frequently evaluate and measure fair value of financial instruments.

~72~

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

Fair value at December 31, 2023 Non-derivative equity instrument: Unlisted shares 4,022 $ Fair value at December 31, 2022 Derivative instrument: Preference share liabilities returned - $ Non-derivative equity instrument: Unlisted shares 10,613 $	Significant Valuationtechnique unobservable input Net assets value N/A Significant Valuationtechnique unobservable input Binary tree convertible Discount rate valuation model Net assets value N/A	Range Relationship of (weighted average) inputs to fair value N/A N/A Range Relationship of (weighted average) inputs to fair value 2.5806% The higher the discount rate, the lower the fair value N/A N/A

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

On December 31, 2023: There were no such transactions.

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13. Supplementary Disclosures

(1) Significant transactions information

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

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

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

• D. Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital: Please refer to table 4.

• E. Acquisition of real estate reaching $300 million or 20% of paid-in capital or more: Please refer to table 5.

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

• G. Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to table 6.

• H. Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.

• I. Trading in derivative instruments undertaken during the reporting periods: Please refer to Note 12(2).

• J. Significant inter-company transactions during the reporting periods: Please refer to table 7.

~73~

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China):Please refer to table 8.

(3) Information on investments in Mainland China

• A. Basic information: Please refer to table 9.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Please refer to table 10.

(4) Major shareholders information

Names, number of shares and ownership of the Company’s shareholders who hold more than 5% of equity share: Please refer to Note 11.

14. Segment Information

(1) General information

For management purpose, the Group separated operating units based on business which operates individually from the main business in each region. The Group was divided into the following two reportable segments:

• A. IC semiconductor group: This segment mainly provides IC packaging and testing services.

• B. Electronics manufacturing services group: This segment provides professional electronics manufacturing services.

(2) Segment information

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured consistently with operating profit or loss in the consolidated financial statements. However, finance costs, finance income and income taxes in the consolidated financial statements are managed on a group basis and are not allocated to operating segments.

The segment information provided to the chief operating decision-maker for the reportable segments is as follows:

s as follows:
Revenue Revenue from external customers Inter-segment revenue Total revenue Segment income		Year ended December 31,2023
	IC semiconductor group 11,061,692 $ - 11,061,692 $ 1,866,423 $	Electronics manufacturing servicesgroup 5,628,744 $ 98,253 5,726,997 $ 219,030 $	Reconciliation and All other write-offs segments (Notes 1 and 2) - $ - $ - 98,253) ( - $ 98,253) ($ 132,842 $ - $	Total
				16,690,436 $ -
				16,690,436 $
				2,218,295 $

~74~

Revenue Revenue from external customers Inter-segment revenue Total revenue Segment income	Reconciliation and IC semiconductor Electronics manufacturing All other write-offs group servicesgroup segments (Notes 1 and 2) 9,972,295 $ 5,559,374 $ - $ - $ - 182,226 - 182,226) ( 9,972,295 $ 5,741,600 $ - $ 182,226) ($ 1,323,337 $ 388,929 $ 56,022 $ - $ Year ended December 31,2022	Total 15,531,669 $ -
		15,531,669 $
		1,768,288 $

Note 1: Inter-segment revenue has been written-off when preparing the consolidated financial statements. Note 2: Income or loss for each operating segment does not include income tax expense.

(3) Reconciliation for segment income (loss)

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

(4) Information on products and services

Please refer to Note 6 (20) for the related information.

(5) Geographical information

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

Taiwan America China Others	Year ended December 31	Year ended December 31	Year ended December 31
	Non-current Revenue assets 6,511,979 $ 7,142,574 $ 3,145,890 - 4,183,478 32,757 2,849,089 - 16,690,436 $ 7,175,331 $ 2023	2022
	Revenue 6,511,979 $ 3,145,890 4,183,478 2,849,089 16,690,436 $	Revenue 7,165,815 $ 2,777,381 2,994,265 2,594,208 15,531,669 $	Non-current assets
			6,433,188 $ - 47,241 1,158
			6,481,587 $

(6) Major customer information

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

Year ended December 31

Company A Company B Company C		Segment Semiconductor and electronic manufacturing services group Electronic manufacturing services group Semiconductor and electronic manufacturing services group 2023		Segment Semiconductor and electronic manufacturing services group Electronic manufacturing services group Semiconductor and electronic manufacturing services group 2022
	Revenue 3,100,340 $ 3,050,510 2,088,048 8,238,898 $		Revenue 2,746,441 $ 3,027,400 2,334,387 8,108,228 $

~75~

Expressed in thousands of NTD (Except as otherwise indicated)

Orient Semiconductor Electronics, Limited and Subsidiaries Loans to others Year ended December 31, 2023

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Table 1
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Maximum outstanding Collateral Is a balance during the Balance at Amount of Reason for Allowance Ceiling on total General ledger related year ended December 31, Actual amount Interest transactions with shortfor doubtful Limit on loans granted to loans granted No. Creditor Borrower account party December 31, 2023 2023 drawn down rate range Nature of loan the borrower term financing accounts Item Value a single party (Note 1) (Note 1) Footnote 2 COREPLUS (HK) Value-Plus Technology Other Y 61,420 61,420 30,710 - Short-term - Short-term - - - 522,100 522,100 - LIMITED (Suzhou) Co. receivables due (USD 2,000) (USD 2,000) (USD 1,000) financing capital (USD 17,001) (USD 17,001) from related requirements parties for operating and business purposes

Note 1: In accordance with the Company’s “Procedures for Provision of Loans”, limit on loans to others is 40% of the Company’s net asset based on the latest audited or reviewed consolidated financial statements.

However, limit on loans to direct or indirect wholly-owned foreign subsidiaries of the Company is 200% of the Company’s net asset. Limit on endorsements to a single party is 30% of the Company’s net asset based on the latest audited or reviewed financial statements.

Table 1, Page 1

Table 2

Orient Semiconductor Electronics, Limited and Subsidiaries

Provision of endorsements and guarantees to others

Year ended December 31, 2023

Expressed in thousands of NTD

(Except as otherwise indicated)

No. (Note 1)	Endorser/guarantor	Partybeingendorsed/guaranteed	Partybeingendorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2023	Outstanding endorsement/ guarantee amount at December 31, 2023	Actual amount drawn down	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/guarantor	Ceiling on total amount of endorsements/ guarantees provided(Note 3)	Provision of endorsements/ guarantees by parent company to subsidiary	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
		Companyname	Relationship with the endorser/ guarantor
0	Orient Semiconductor Electronics, Limited	COREPLUS (HK) LIMITED	Note 2	3,382,152 $	$ 76,775 (USD 2,500)	$ 76,775 (USD 2,500)	$ 10,749 (USD 350)	$ -	0.68%	11,273,843 $	Y	N	N	-

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

• (1)The Company is ‘0’.

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

Note 2: The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

Note 3: Limit on total endorsements is the Company’s net asset based on the latest audited or reviewed financial statements, and limit on endorsements to a single party is 30% of the Company’s net asset based on the latest audited or reviewed financial statements.

Table 2, Page 1

Orient Semiconductor Electronics, Limited and Subsidiaries

Table 3

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

December 31, 2023

Expressed in thousands of NTD

(Except as otherwise indicated)

Securities held by	Marketable securities	Relationship with the securities issuer	General ledger account		As of December31,2023	As of December31,2023		Footnote
				Number of shares	Bookvalue	Ownership (%)	Fairvalue
Orient Semiconductor Electronics,Limited Orient Semiconductor Electronics,Limited Orient Semiconductor Electronics,Limited Orient Semiconductor Electronics,Limited Orient Semiconductor Electronics,Limited Hua-Cheng Investment Co.	STRATEDGE’s stocks - common shares SPINERGY’s stocks - common shares Golfware’s stocks - common shares SCREENBEAM’s stocks - common shares SCREENBEAM’s stocks - preference share Chipbond Technology Corporation	None None None None None Entity with significant influence	Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current	5,135 999,641 4,687 2,141,176 2,352,941 25,383,000	- $ - - 557 3,465 1,835,191	- - - - - 3.41%	- $ - - 557 3,465 1,835,191	- - - - - -

Table 3, Page 1

Table 4

Orient Semiconductor Electronics, Limited and Subsidiaries

Acquisition or sale of the same security with the accumulated cost exceeding $300 million or 20% of the Company’s paid-in capital

Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Marketable securities	General ledger account	Counterparty	Relationship with the investor	Balance as at January1,2023	Balance as at January1,2023	Addition	Addition		Disposal	Disposal		Balance as at December 31,2023	Balance as at December 31,2023
					Number of shares	Amount	Number of shares	Amount (Note)	Number of shares	Selling price	Book value	Gain (loss) on disposal	Number of shares	Amount
Orient Semiconductor Electronics, Limited Hua-Cheng Investment Co., Ltd.	Hua-Cheng Investment Co., Ltd. Stocks - Chipbond Technology C i	Investments accountd for using equity method Financial assets at fair value through other comprehensive income - non-current	- -	Subsidiary -	138,993,437 17,610,000	$ 1,489,232 1,010,814	44,757,400 7,773,000	$ 940,075 (Note 1) 824,377 (Note 2)	$ - -	$ - -	$ - -	$ - -	183,750,837 25,383,000	$ 2,429,307 1,835,191

Note 1: In 2023, the Company newly invested $500,000 in Hua-Cheng Investment Co. and the additional investment included the investment income (loss) and other comprehensive income recognised in the period. Note2: Addition for the period included the unrealised valuation adjustment at the balance sheet date amounting to $320,778.

Table 4, Page 1

Orient Semiconductor Electronics, Limited and Subsidiaries

Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more

Year ended December 31, 2023

Real estate acquired by Table 5	Real estate acquired	Date of the event	Transaction amount	Status of payment	Counterparty	Relationship with the counterparty	Original owner who sold the real estate to the counterparty	Relationship between the original owner and the acquirer	Date of the original transaction	Amount	Basis or reference used in settingtheprice	Reason for acquisition of real estate and status Other of the real estate commitments Expressed in thousands of NTD (Except as otherwise indicated)	Reason for acquisition of real estate and status Other of the real estate commitments Expressed in thousands of NTD (Except as otherwise indicated)
Orient Semiconductor Electronics, Limited	Buildings and structures	October 27, 2022	Note	Note	Note	None	N/A	N/A	N/A	N/A	Price comparison and negotiation	For production use	-

Note: On October 27, 2022, the Board of Director resolved to invest in the Diamond Area Renew Program of Nanzih Technology Industrial Park, with the expected investment amount of $2,793,000. The actual investment amount was accounted by the actual contract amount. As of December 31, 2023, the contractor of some contracted work items is Verizon Construction & Engineering Limited Company, and the accumulated payments amounted to $148,800.

Table 5, Page 1

Table 6

Orient Semiconductor Electronics, Limited and Subsidiaries

Purchases or sales of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction	Transaction		Compared to third party transactions	Compared to third party transactions	Notes/accountsreceivable (payable)	Notes/accountsreceivable (payable)	Footnote
			Purchases (sales)	Amount	Percentage of total purchases (sales)	Credit term	Unit price	Credit term	Balance	Percentage of total notes/accounts receivable (payable)
Orient Semiconductor Electronics,Limited	COREPLUS (HK) LIMITED	Subsidiary	Purchases	103,319 $	1.42%	60 days after monthly billings	-	-	1,084 $	0.02%	Note 1

Note 1: The amount of purchases (sales) pertains to the amount after offsetting sales of raw materials by the Company to the subsidiary and purchases of processed finished goods by the Company from the subsidiary. In addition, accounts payable at the end of the period pertain to the balance after offsetting accounts receivable and payable. These amounts were eliminated in the consolidated financial statements.

Table 6, Page 1

Orient Semiconductor Electronics, Limited and Subsidiaries

Table 7

Significant inter-company transactions during the reporting periods

Year ended December 31, 2023

Expressed in thousands of NTD

Transactions amount between the parent company and subsidiaries or between subsidiaries reaching $10 million is provided below:

(Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operatingrevenues or total assets
0 1 1 2 2	Orient Semiconductor Electronics,Limited COREPLUS (HK) LIMITED COREPLUS (HK) LIMITED Value-Plus Technology (Suzhou) Co. Value-Plus Technology (Suzhou) Co.	OSE INTERNATIONAL LTD. Orient Semiconductor Electronics,Limited Value-Plus Technology (Suzhou) Co. COREPLUS (HK) LIMITED COREPLUS (HK) LIMITED	1 2 3 3 3	Other payables Sales revenue Other receivables Sales revenue Accounts receivable	77,923 $ 103,319 30,710 84,068 11,401	- Same with general transaction terms - Same with general transaction terms -	0.42% 0.62% 0.17% 0.50% 0.06%

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

• (1) Parent company is ‘0’.

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

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries

or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction;

for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.):

(1) Parent company to subsidiary.

(2) Subsidiary to parent company.

(3) Subsidiary to subsidiary.

Table 7, Page 1

Orient Semiconductor Electronics, Limited and Subsidiaries

Expressed in thousands of NTD (Except as otherwise indicated)

Information on investees Year ended December 31, 2023 Table 8

Investor	Investee	Location	Main business activities	Initial invest	ment amount	Sharesheld	as atDecember31,2023	as atDecember31,2023	Net profit (loss) of the investee for the year ended December31,2023	Investment income (loss) recognised by the Company for the year ended December31,2023	Footnote
				Balance as at December31,2023	Balance as at December31,2022	Number of shares	Ownership (%)	Bookvalue
Orient Semiconductor Electronics, Limited Orient Semiconductor Electronics, Limited Orient Semiconductor Electronics, Limited Orient Semiconductor Electronics, Limited Orient Semiconductor Electronics, Limited Orient Semiconductor Electronics, Limited OSE INTERNATIONAL LTD.	OSE PHILIPPINES, INC. OSE PROPERTIES, INC. OSE INTERNATIONAL LTD. SCS HIGHTECH INC. COREPLUS (HK) LIMITED HUA-CHENG INVESTMENT CO. OSE PHILIPPINES, INC.	Philippines Philippines British Virgin IS. Taiwan Hong Kong Taiwan Philippines	(1) Integrated circuits and various semiconductor components (2) Research, design, manufacture, assembly, processing and test of abovementioned products and after-sales service (1) Sales of properties (2) Lease of properties (3) Other property-related business Investments of various manufacturing businesses Manufacture of data storage and processing equipment and providing information software and data processing services Procure to order and components assembly outsourcing Reinvestments in various business (1) Integrated circuits and various semiconductor components (2) Research, design, manufacture, assembly, processing and test of abovemetioned products and after-sales service	- $ - 491,360 (USD 16,000,000) 256,000 230,325 (USD 7,500,000) 2,055,828 -	$ 3,971,119 (USD 129,375,408) 9,384 (USD 305,559) 491,360 (USD 16,000,000) 256,000 230,325 (USD 7,500,000) 1,508,254 153,500 (USD 5,000,000)	- - 16,000,000 25,600,000 7,500,000 183,750,837 -	- - 100% 18.17% 100% 100% -	- $ - 339,007 - 261,021 2,429,307 -	28,848 $ 904) ( 13,131 - 61,559) ( 119,297 28,848	27,022 $ 362) ( 13,131 - 61,559) ( 119,297 1,826	Note 1,2,4 Note 2, 4 Note 1, 4 Note 3 Note 1, 4 Note 1 Note 1,2,4

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

Note 2: The investee was dissolved and liquidated on July 31, 2023.

Note 3: The investee was abolished on March 8, 2007.

Note 4: Initial investment amount of the reinvestee which use foreign currencies to prepare financial statements is translated to NTD at the spot rate at the period end.

Table 8, Page 1

Table 9

Orient Semiconductor Electronics, Limited and Subsidiaries Information on investments in Mainland China Year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method(Note 1)	Accumulated amount of remittance from Taiwan to Mainland China as of January 1,2023	Amoun Taiwan to Amount remitted b endedDe	t remitted from Mainland China/ ack to Taiwan for the year cember31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2023	Net loss of investee for the year ended December 31, 2023	Ownership held by the Company (direct or indirect)	Investment loss recognised by the Company for the year ended December 31, 2023	Book value of investments in Mainland China as of December 31, 2023	Accumulated amount of investment income remitted back to Taiwan as of December 31, 2023	Footnote
					Remitted to MainlandChina	Remitted back to Taiwan
Value-Plus Technology (Suzhou) Co.	Researching, developing and undertaking the substrate surface adhesion processing of various electronic product components, plug-in welding processing of components, related testing, combination processing, sales of self-produced products, and providing technique maintenance and after-sale service accordingly	165,482 (USD 5,388,522)	Investment and establishment in COREPLUS, and then reinvestment (2)	158,328 $	$ -	$ -	158,328 $	42,331) ($	100%	42,331) ($	14,381 $	$ -	Note 3

Companyname	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2023	Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	Footnote
Orient Semiconductor Electronics, Limited	$ 158,328	$ 175,495	$ 6,764,305	Note 3

Note 1: Investment methods are classified into the following three categories;

(1) Directly invest in a company in Mainland China.

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

Note 2: Limit amount prescribed by the Jing-Shen-Zi Letter No. 09704604680 of Ministry of Economic Affairs, dated August 29, 2008, and is calculated based on 60% of the Company’s consolidated net assets.

Note 3: Paid-in capital was translated to NTD at the spot rate at the period end.

Table 9, Page 1

Orient Semiconductor Electronics, Limited and Subsidiaries

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

Year ended December 31, 2023

Table 10

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Sale(purchase)	Sale(purchase)	Service re	venue	Accounts receivable (payable)	Accounts receivable (payable)	Other receivables	Other receivables	Provision of endorsements/guarantees or collaterals	Provision of endorsements/guarantees or collaterals		Financing	Financing		Other
	Amount	%	Amount	%	Balance at December 31, 2023	%	Balance at December 31,2023	%	Balance at December 31, 2023	Purpose	Maximum balance during the year ended December 31,2023	Balance at December 31, 2023	Interest rate	Interest during the year ended December 31,2023
Value-Plus Technology (Suzhou) Co.	$ -	-	$ 84,068	100%	$ 11,401	100%	$ 554	96%	$ -	-	$ 61,420	61,420 $	-	- $

Table 10, Page 1

Orient Semiconductor Electronics, Limited and Subsidiaries

Table 11

Major shareholders information

December 31, 2023

Name of majorshareholders	Shares	Shares
	Numberofsharesheld	Ownership (%)
Chipbond Technology Corporation	163,995,498	29.53%

Note 1: Chipbond Technology Corporation held the Company’s common shares and class C preferred shares without voting rights amounting to 163,995,498 shares and 180,180,000 shares, respectively, and totally held 344,175,498 shares. Note 2: As of December 31, 2023, the issuance period of Class C preferred shares has not been fulfilled for 5 years, therefore, the shareholders of preferred shares have not implemented the conversion right. Information relating to issuance terms of the conversion right is provided in Note 6(17) E(e).

Table 11, Page 1