Primax — Audit Report / Information 2023

Dec 28, 2023

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Stock Code:4915

PRIMAX ELECTRONICS LTD.

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2023 and 2022

Address: No. 669, Ruey Kuang Road, Neihu, Taipei Telephone: (02)2798-9008

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and parent company only financial statements, the Chinese version shall prevail.

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Table of contents

Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Report 4. Balance Sheets 5. Statements of Comprehensive Income 6. Statements of Changes in Equity 7. Statements of Cash Flows 8. Notes to the Parent Company Only Financial Statements (1) Company history (2) Approval date and procedures of the parent company only financial statements (3) New standards, amendments and interpretations adopted (4) Summary of material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in mainland China (d) Major shareholders (14) Segment information 9. Statement of major accounting items

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KPMG

台北市110615信義路5段7號68樓(台北101大樓) 電 話 Tel + 886 2 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, 傳 真 Fax + 886 2 8101 6667 Xinyi Road, Taipei City 110615, Taiwan (R.O.C.) 網 址 Web kpmg.com/tw

Independent Auditors’ Report

To the board of directors of PRIMAX ELECTRONICS LTD.:

Opinion

We have audited the parent company only financial statements of PRIMAX ELECTRONICS LTD.(“ the Company” ), which comprise the balance sheet as of December 31, 2023, and 2022, the statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the report of other auditors (please refer to Other Matter paragraph), the accompanying parent company only financial statements present fairly, in all material respects, the financial position of PRIMAX ELECTRONICS LTD. as of December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

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 Parent Company Only Financial Statements section of our report. We are independent of PRIMAX ELECTRONICS LTD. 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 requirement. Based on our audits and the report of another auditor, we believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our opinion.

Other Matter

We did not audit the financial statements of certain investments accounted for using equity method. Those financial statements were audited by another auditor, and our opinion, insofar as it relates to the amounts included for those investments, is based solely on the report of another auditor. The Company’s investment in these companies both constituting 14% of the total assets, as of December 31, 2023 and 2022. The related share of profit of subsidiaries and associates accounted for using the equity method amounted constituting 23% and 17% of the profit after tax, for the years ended December 31, 2023 and 2022, respectively.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of PRIMAX ELECTRONICS LTD. only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In our professional judgments, key audit matters to be communicated in the independent auditors’ report are listed below:

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

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1. Evaluation of inventories

Please refer to note 4(g) “Inventories”, note 5 “Significant accounting assumptions and judgments, and major sources of estimation uncertainty”, and note 6(e) “Inventories” of the financial statements.

Description of key audit matter:

Inventories of PRIMAX ELECTRONICS LTD. are measured at the lower of cost and net realizable value. Due to the fast high-tech revolution, as well as the advancement of production technologies that may lead the dramatic change in customers’ demand, the net realizable value of inventories requires subjective judgments of the management, which is the major source of estimation uncertainty. Therefore, the evaluation of inventories is one of the key audit matters for our audit.

How the matter was addressed in our audit:

Our principal audit procedures included: understanding the policies of evaluating the inventories of PRIMAX ELECTRONICS LTD.; inspecting whether existing inventory policies are applied; examining the accuracy of the aging of inventories by sampling and analyzing the changes of the aging of inventories; inspecting the reasonableness of the allowance provided for inventory valuation in the past and comparing it to the current year to ensure that the measurements and assumptions are appropriate.

1. Investments accounted for using equity method

Please refer to note 4(h) “Investments in subsidiaries”, and note 5 “Significant accounting assumptions and judgments, and major sources of estimation uncertainty” of the financial statements.

Description of key audit matter:

Based on the scope and nature of their businesses of PRIMAX ELECTRONICS LTD.’ s subsidiaries accounted for using equity method, the net realizable value of inventories in certain subsidiaries required the managements to make subjective judgments, which is the major source of estimation uncertainty and may influence the outcome of their operations. Therefore, the valuation of inventories of the subsidiaries accounted for using equity method is one of the key audit matters for our audit.

In 2014, PRIMAX ELECTRONICS LTD. acquired Tymphany Worldwide Enterprises Ltd. through its subsidiary, Diamond (Cayman) Holdings Ltd., the transaction resulted in the Company to recognize its goodwill, technologies, and customer relations, as intangible assets. The rapid industrial transformation and the assessment of impairment contained estimation uncertainty. Therefore, the assessment of impairment of intangible assets is one of the key audit matters for our audit.

How the matter was addressed in our audit:

For the principal audit procedures on the valuation of inventories of the investments accounted for using equity method, please refer to key audit matters 1. “Evaluation of inventories”. In addition, the consolidated financial statements of Tymphany Worldwide Enterprises Ltd. and its subsidiaries were audited by other auditors; therefore, we issued audit instructions to their auditors as guidelines to communicate the key audit matters with them and obtained the feedbacks required in the audit instructions.

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The principal audit procedures on the assessment of recoverable amount of the investments accounted for using equity method included: evaluating the identification of cash generating units and any indication of impairment made by management; acquiring impairment assessment reports from external expert engaged by the Company; reviewing the impairment assessment reports and assessing the reasonability of measurements, parameters, and assumptions; evaluating the operation outcomes and comparing them to the past forecasts; making sensitivity analysis for evaluation of impairment losses and evaluating the completeness of disclosure in the financial reports.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

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

In preparing the parent company only financial statements, management is responsible for assessing PRIMAX ELECTRONICS LTD.’ 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 PRIMAX ELECTRONICS LTD. 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 PRIMAX ELECTRONICS LTD.’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only 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 parent company only 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. We also:

1. Identify and assess the risks of material misstatement of the parent company only 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.

2. 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 Company’s internal control.

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

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1. 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 PRIMAX ELECTRONICS LTD.’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause PRIMAX ELECTRONICS LTD. to cease to continue as a going concern.

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

3. Obtain sufficient and appropriate audit evidence regarding the financial information of the investments in other entities accounted for using the equity method to express an opinion on this parent company only financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion of PRIMAX ELECTRONICS LTD.

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

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

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

The engagement partners on the audit resulting in this independent auditors’ report are SHYH-GANG HORNG and HUNG-WEN FU.

KPMG

Taipei, Taiwan (Republic of China) February 26, 2024

Notes to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with the accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

The independent auditors’ audit report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ audit report and parent company only financial statements, the Chinese version shall prevail.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD.

Balance Sheets

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

December 31, 2023 Assets Amount % Current assets: 1100 Cash and cash equivalents (note 6(a)) $ 5,478,685 14 1110 Current financial assets at fair value through profit or loss (note 6(b)) 358,835 1 1170 Accounts receivable, net (notes 6(d) and (s)) 4,142,696 11 1180 Accounts receivable from related parties, net (notes 6(d), (s) and 7) 3,169,112 8 1200 Other receivables (note 7) 150,306 - 1310 Inventories (note 6(e)) 2,701,623 7 1470 Other current assets 148,022 - 16,149,279 41 Non-current assets: 1511 Non-current financial assets at fair value through profit or loss (note 6(b)) 12,048 - 1517 Non-current financial assets at fair value through other comprehensive income (note 6(c)) 290,285 1 1550 Investments accounted for using equity method, net (note 6(f)) 19,000,624 49 1600 Property, plant and equipment (notes 6(g) and 8) 1,567,007 4 1755 Right-of-use assets (note 6(h)) 1,111,300 3 1760 Investment property (note 6(i)) 230,228 1 1780 Intangible assets (note 6(j)) 1,543 - 1840 Deferred tax assets (note 6(o)) 562,802 1 1990 Other non-current assets 134,020 - 22,909,857 59 Total assets $ 39,059,136 100	December 31, 2022 Amount % 2,961,693 8 367,032 1 4,830,467 14 2,980,766 9 90,840 - 2,772,215 8 101,964 - 14,104,977 40 2,662 - 288,671 1 17,830,483 50 983,581 3 1,139,985 3 233,788 1 3,598 - 580,948 2 139,261 - 21,202,977 60 35,307,954 100 December 31, 2023 Liabilities and Equity Amount % Current liabilities: 2170 Notes and accounts payable 500,695 1 2180 Accounts payable to related parties (note 7) 11,072,478 28 2120 Current financial liabilities at fair value through profit or loss (note 6(b)) 989,080 2 2200 Other payables (note 7) 2,276,135 6 2201 Salaries payable 307,335 1 2280 Current lease liabilities (note 6(l)) 92,448 - 2300 Other current liabilities (note 6(s)) 1,036,790 3 2320 Long-term borrowings, current portion (notes 6(k) and 8) 16,667 - 2365 Current refund liabilities 2,193,824 6 18,485,452 47 Non-Current liabilities: 2540 Long-term borrowings (notes 6(k) and 8) 691,312 2 2580 Non-current lease liabilities (note 6(l)) 1,090,896 3 2630 Long-term deferred revenue (note 6(g)) 488,088 1 2600 Other non-current liabilities (notes 6(n) and (o)) 1,289,879 3 3,560,175 9 Total liabilities 22,045,627 56 3110 Ordinary shares (note 6(p)) 4,629,738 12 3200 Capital surplus (notes 6 (f) and (p)) 2,359,753 6 3310 Legal reserve (note 6(p)) 2,274,414 6 3320 Special reserve (note 6(p)) 754,918 2 3350 Unappropriated retained earnings (note 6(p)) 8,311,190 21 3400 Other equity interest (1,316,504) (3) Total equity 17,013,509 44 Total liabilities and equity $ 39,059,136 100		December 31, 2023		December 31, 2022 Amount % 301,600 1 9,050,436 26 1,013,985 3 2,258,638 7 493,350 1 72,294 - 727,384 2 - - 1,851,815 5 15,769,502 45 464,000 1 1,121,079 3 586,567 2 1,019,712 3 3,191,358 9 18,960,860 54 4,582,893 13 2,129,908 6 1,999,217 6 1,217,130 3 7,433,108 21 (1,015,162) (3) 16,347,094 46 35,307,954 100
			Amount %

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD.

Statements of Comprehensive Income

For the years ended December 31, 2023 and 2022

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

4000 Operating revenue (notes 6(s) and 7) 5000 Operating costs (notes 6(e), (l), (n), (t), 7 and 12) Gross profit from operations Operating expenses (notes 6(d), (j), (l), (n), (q), (t), 7 and 12): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit loss (gain on reversal) Total operating expenses Net operating income Non-operating income and expenses: 7100 Interest income 7010 Other income (notes 6 (c), (m), (u) and 7) 7020 Other gains and losses (notes 6(v) and 12) 7070 Share of profit of subsidiaries and associates accounted for using equity method 7050 Finance costs (notes 6(l) and (n)) Total non-operating income and expenses Profit before income tax 7950 Less: Income tax expenses(note 6(o)) Profit 8300 Other comprehensive income (loss): 8310 Items that may not be reclassified subsequently to profit or loss 8311 Losses (gains) on remeasurements of defined benefit plans (note 6(n)) 8316 Unrealized losses from investments in equity instruments measured at fair value through other comprehensive income 8330 Share of other comprehensive income of subsidiaries, associates and joint ventures accounted for using equity method 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss 8360 Items that may be reclassified subsequently to profit or loss 8361 Exchange differences on translation of foreign financial statements 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income Comprehensive income (after tax) Earnings per share (note 6(r)) 9710 Basic earnings per share (NT dollars) 9810 Diluted earnings per share (NT dollars)	2023 Amount % $ 33,459,786 100 29,969,051 90 3,490,735 10 611,924 2 598,281 1 1,273,722 4 (54,245) - 2,429,682 7 1,061,053 3 127,308 - 13,293 - 334,166 1 1,335,440 4 (37,059) - 1,773,148 5 2,834,201 8 348,912 1 2,485,289 7 (2,428) - (25,805) - (47,605) - - - (75,838) - (188,627) - - - (188,627) - (264,465) - $ 2,220,824 7 $ 5.50 $ 5.42	2022
		Amount % 42,694,520 100 38,065,836 89 4,628,684 11 698,879 2 586,822 2 1,411,652 3 52,213 - 2,749,566 7 1,879,118 4 11,347 - 20,344 - 200,516 - 1,118,831 3 (64,321) - 1,286,717 3 3,165,835 7 423,226 1 2,742,609 6 6,971 - 22,345 - (10,371) - - - 18,945 - 452,637 1 - - 452,637 1 471,582 1 3,214,191 7 6.10
		6.02

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD.

Statements of Changes in Equity

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Balance on January 1, 2022 Profit Other comprehensive income Comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends of ordinary share Changes in investment accounted for using equity method Amortization expense of restricted stock Cancellation of restricted stock Issuance of restricted stock Effect of the liquidation of equity instruments at a fair value through other comprehensive income Balance on December 31, 2022 Profit Other comprehensive income Comprehensive income Appropriation and distribution of retained earnings: Legal reserve Special reserve Cash dividends of ordinary share Changes in investment accounted for using equity method Amortization expense of restricted stock Cancellation of restricted stock Issuance of restricted stock Balance on December 31, 2023	Share capital		Capital surplus				Retained earnings					O	ther equity interes	t	Unearned employee compensation	Total equity
											Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets at fair value through other comprehensive income
	Ordinary shares				Legal reserve		Special reserve		Unappropriated retained earnings
	$ 4,552,633 - - - - - - - - (5,290) 35,550 - 4,582,893 - - - - - - - - (2,005) 48,850 $ 4,629,738		1,758,780		1,769,946		1,046,360		6,492,401		(1,265,160) - 452,637 452,637 - - - - - - - - (812,523) - (188,627) (188,627) - - - - - - - (1,001,150)		48,029		(227,477) - - - - - - - 184,883 26,973 (244,623) - (260,244) - - - - - - - 250,220 14,199 (303,724) (299,549)	14,175,512
			- -		- -		- -		2,742,609 6,971				- 11,974			2,742,609 471,582
			-		-		-		2,749,580				11,974			3,214,191
					229,271 - - - - - - -		- 170,770 - - - - - -									- - (1,411,230) 183,738 184,883 - - -
					1,999,217 - -		1,217,130 - -									16,347,094 2,485,289 (264,465)
					-		-									2,220,824
					275,197 - - - - - -											- - (1,791,794) (12,835) 250,220 - -
					2,274,414											17,013,509

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

PRIMAX ELECTRONICS LTD.

Statements of Cash Flows

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Amortization of long-term deferred revenue Expected credit loss (gain on reversal) Interest expense Net loss on financial assets or liabilities at fair value through profit or loss Interest income Dividend income Compensation cost of share-based payment Share of profit of subsidiaries and associates accounted for using equity method Gain on disposal of property, plant and equipment Gain on disposal of right-of-use assets Amortization of unrealized revenue of patents disposed Total adjustments to reconcile profit (loss) Changes in operating assets and liabilities: Financial assets at fair value through profit or loss Accounts receivable, including related parties Other receivable Inventories Other current assets Other operating assets Changes in operating assets Financial liabilities at fair value through profit or loss Notes and accounts payable, including related parties Salaries payable Other payables Refund liabilities Other current liabilities Long-term deferred revenue Other operating liabilities Changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash inflow generated from operations Interest received Interest paid Income taxes paid Net cash flows from operating activities Cash flows from (used in) investing activities: Acquisition of financial assets at fair value through other comprehensive income Proceeds from the liquidation of financial assets at fair value through other comprehensive income Proceeds from capital reduction of financial assets at fair value through profit and loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Acquisition of unamortized expense Increase (decrease) in refundable deposits Dividends received Net cash flows used in investing activities Cash flows from (used in) financing activities: Decrease in short-term borrowings Increase in long-term borrowings Increase in guarantee deposits received Payment of lease liabilities Cash dividends paid Net cash flows used in financing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	2023 $ 2,834,201 136,438 19,396 (172,655) (54,245) 37,059 631,606 (127,308) (690) 181,902 (1,335,440) (1) (2) (15,450) (699,390) 367,032 553,670 (59,466) 70,592 (46,058) 21,914 907,684 (1,013,985) 2,221,137 (186,015) (92,062) 342,009 309,406 74,176 168,761 1,823,427 2,731,111 2,031,721 4,865,922 127,308 (36,979) (213,237) 4,743,014 (27,419) - (10,747) - (552,452) 19 (2,420) (2,401) 690 (594,730) - 243,979 - (83,477) (1,791,794) (1,631,292) 2,516,992 2,961,693 $ 5,478,685	2022 3,165,835 123,267 28,739 (199,573) 52,213 60,992 646,954 (11,347) (8,337) 123,795 (1,118,831) - (5) (15,450)
		(317,583)
		153,675 (149,364) 61,512 1,059,738 (34,715) (5,703)
		1,085,143
		(602,978) (508,888) 52,941 592,809 238,852 147,391 76,541 235,254
		231,922
		1,317,065
		999,482
		4,165,317 11,347 (60,915) (850,773)
		3,264,976
		(44,839) 60 (2,662) (277,000) (149,664) - (7,091) 1,099 8,337
		(471,760)
		(332,000) 34,500 100 (68,544) (1,411,230)
		(1,777,174)
		1,016,042 1,945,651
		2,961,693

See accompanying notes to parent company only financial statements.

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(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

For the years ended December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

PRIMAX ELECTRONICS LTD. (the “Company”), formerly known as Hong Chuan Investments Ltd., was incorporated on March 20, 2006, and registered under the Ministry of Economic Affairs, ROC. The Company changed its name to Hong Chuan Electronics Ltd. and Primax Electronics Ltd. in October 2007 and February 2008, respectively. The address of the Company’s registered office is No. 669, Ruey Kuang Road, Neihu, Taipei.

The major business activities of the Company were the manufacture and sale of multi-function printers, scanners, digital camera modules, computer mice, keyboards, track pads, mobile phone accessories, consumer electronics products and shredders.

The Company’ s common shares were registered with the Financial Supervisory Commission, ROC (“FSC”) on June 22, 2012, and listed on the Taiwan Stock Exchange (“TWSE”) on October 5, 2012.

(2) Approval date and procedures of the parent company only financial statements:

The parent company only financial statements were authorized for issuance by the board of directors on February 26, 2024.

(3) New standards, amendments and interpretations adopted:

• (a) The impact of the International Financial Reporting Standards (“IFRSs”) endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its parent company only financial statements, from January 1, 2023:

• ●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”

The Company has initially adopted the new amendment, which do not have a significant impact on its parent company only financial statements, from May 23, 2023:

• ●Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”

(Continued)

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PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• (b) The impact of IFRS issued by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2024, would not have a significant impact on its parent company only financial statements:

• ●Amendments to IAS 1 “Classification of Liabilities as Current or Non-current”

• ●Amendments to IAS 1 “Non-current Liabilities with Covenants”

• ●Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”

• ●Amendments to IFRS 16 “Lease Liability in a Sale and Leaseback”

• (c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The Company does not expect the following new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its parent company only financial statements:

• ●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”

• ●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”

• ●Amendments to IAS21 “Lack of Exchangeability”

(4) Summary of material accounting policies:

The significant accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the parent company only financial statements.

(a) Statement of compliance

These annual parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“ the Regulations”).

(b) Basis of preparation

• (i) Basis of measurement

Except for the following significant accounts, the parent company only financial statements have been prepared on a historical cost basis:

• 1) Financial instruments at fair value through profit or loss are measured at fair value;

• 2) Financial assets at fair value through other comprehensive income are measured at fair value; and

• 3) The defined benefit liabilities are measured at fair value of the plan assets, less the present value of the defined benefit obligation.

(Continued)

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PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(ii) Functional and presentation currency

The functional currency is determined based on the primary economic environment in which the Company operates. The Company’ s parent company only financial statements are presented in New Taiwan dollars, which is the Company’s functional currency. All financial information presented in New Taiwan dollars has been rounded to the nearest thousand.

(c) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the functional currency of the Company at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currency using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into functional currency using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for the difference relating to an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to the Company’s functional currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated to the Company’ s functional currency at the average rate. Foreign currency differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of any part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to noncontrolling interest. When the Company disposes of only part of its investment in an associate or joint venture, including a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of the net investment in the foreign operation and are recognized in other comprehensive income.

(Continued)

11

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• (d) Classification of current and non-current assets and liabilities

An asset is classified as current under one of the following criteria, and all other assets are classified as non-current.

• (i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is expected to be realized within twelve months after the reporting period; or

• (iv) The asset is cash or a cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as current under one of the following criteria, and all other liabilities are classified as non-current.

• (i) It is expected to be settled in the normal operating cycle;

• (ii) It is held primarily for the purpose of trading;

• (iii) It is due to be settled within twelve months after the reporting period; or

• (iv) It does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by issuing equity instruments do not affect its classification.

• (e) Cash and cash equivalents

Cash and cash equivalents comprise petty cash, cash on hand and demand deposits. Cah equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.

Time deposits with maturities within three months or less which meet the above definition and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

• (f) Financial instruments

Accounts receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value, plus transaction costs that are directly attributable to its acquisition or issue. A accounts receivable without a significant financing component is initially measured at the transaction price.

(Continued)

12

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• (i) Financial assets

All regular way purchases or sales of financial assets classified as the same categories are recognized and derecognized on a trade date basis.

On initial recognition, a financial asset is classified as measured at amortized cost; fair value through other comprehensive income (FVOCI) ; or fair value through profit or loss (FVTPL).

Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

• 1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL：

• it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

• its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

• 2) Fair value through other comprehensive income (FVOCI )

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’ s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

(Continued)

13

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• 3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above are measured at FVTPL, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

• 4) Assessment whether contractual cash flows are solely payments of principal and interest

For the purposes of this assessment, principal is defined as the fair value of the financial assets on initial recognition. Interest is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of time and for other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest, the Company considers the contractual terms of the instrument. This includes assessing whether the financial asset contains a contractual term that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Company considers：

• contingent events that would change the amount or timing of cash flows；

• terms that may adjust the contractual coupon rate, including variable rate features；

• prepayment and extension features；and

• terms that limit the Company’s claim to cash flows from specified assets (e.g. nonrecourse features).

• 5) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, accounts receivables, other receivables, guarantee deposit paid and other financial assets, etc).

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

• Bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for accounts receivables are always measured at an amount equal to lifetime ECL.

(Continued)

14

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Lifetime ECL are the ECL that result from all possible default events over the expected life of a financial instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 month after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Company is exposed to credit risk.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’ s historical experience and informed credit assessment as well as forwardlooking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 61 days past due.

The Company considers a financial asset to be in default when the financial asset is more than 361 days past due or the borrower is unlikely to pay its credit obligations to the Company in full.

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Company assesses whether financial assets carried at amortized cost are credit-impaired. A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial assets is credit-impaired includes the following observable data:

• significant financial difficulty of the borrower or issuer;

• a breach of contract such as a default or being more than 361 days past due;

• the lender of the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;

• it is probable that the borrower will enter bankruptcy or other financial reorganization; or

• the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

(Continued)

15

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering the financial asset in its entirety or a portion thereof. The Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

6) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expired, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

• (ii) Financial liabilities and equity instruments

1) Classification of debt or equity

Debt or equity instruments issued by the Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangement and the definitions of financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences the residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value; and net gains and losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

(Continued)

16

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

4) Derecognition of financial liabilities

The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expired. The Company also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

• 5) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to offset the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

• (iii) Derivative financial instruments

The Company holds derivative financial instruments to hedge its foreign currency and interest rate exposures. Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognized in profit or loss.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on the weighted-average-costing method and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investments in subsidiaries

Investments in subsidiaries are accounted for using the equity method. There is no difference between net income and comprehensive income in the Company’s parent company only financial statements and net income and comprehensive income attributable to stockholders of the parent. The equity in the Company’s parent company only financial statements and the equity attributable to stockholders of the parent in the Company’s consolidated financial statements are also the same.

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. When the Company loses control over its subsidiaries, the Company derecognizes the investment by the book value on the date of loss of control and remeasures the rest of the investments at fair value on the same date.

(Continued)

17

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(i) Investment property

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, for use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value, which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized as other income on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

• (j) Property, plant and equipment

• (i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

• (iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land has an unlimited useful life, and therefore is not depreciated.

The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

• 1) Buildings and additional equipment: 1 ~ 51 years

• 2) Machinery and equipment: 1 ~4 years

• 3) Other equipment: 1 ~5 years

(Continued)

18

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Depreciation methods, useful lives, and residual values are reviewed at each annual reporting date and adjusted if appropriate.

• (iv) Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner occupied to investment property.

(k) Lease

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

• (i) As a lessee

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

• 1) fixed payments, including in-substance fixed payments;

• 2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;

• 3) amounts expected to be payable under a residual value guarantee; and

• 4) payments for purchase or termination options that are reasonably certain to be exercised or penalty should be paid.

(Continued)

19

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

• 1) there is a change in future lease payments arising from the change in an index or rate; or

• 2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or

• 3) there is a change of its assessment on purchase option; or

• 4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or

• 5) there is any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment property and lease liabilities as a separate line item respectively in the statement of financial position.

The Company has elected not to recognize right-of-use assets and lease liabilities for leases of machinery and other equipment that have short-term leases and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

(Continued)

20

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

The Company recognizes lease payments received under operating leases as income on a straight-line basis over the lease term.

• (l) Intangible assets

• (i) Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable and the Company intends to, and has sufficient resources to, complete the development and to use or sell the asset. Otherwise, it is recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost, less accumulated amortization and any accumulated impairment losses.

Other intangible assets, including trademarks, patents and copyrights, that are acquired by the Company and have finite useful lives are measured at cost, less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

• (iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

• 1) Trademarks 10 years

• 2) Patents 2.5~10 years 3) Copyrights 15 years

Amortization methods, useful lives and residual values, are reviewed at each annual reporting date and adjusted if appropriate.

(Continued)

21

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(m) Impairment of non-financial assets

At each annual reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.

The recoverable amount of an asset or CGU is the greater of its value-in-use and its fair value, less costs to sell. Value-in-use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. They are allocated to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

(n) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

(i) Sale of goods

The Company sales computer peripherals and non-computer peripherals to customers. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Company has objective evidence that all criteria for acceptance have been satisfied.

The Company often offers volume discounts to its customers based on aggregate sales of components. Revenue from these sales is recognized based on the price specified in the contract, net of the estimated volume discounts. Accumulated experience is used to estimate the discounts, using the expected value method, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. A contract liability is recognized for expected volume discounts payable to customers in relation to sales made until the end of the reporting period. No element of financing is deemed present as the sales of components are made with a credit term of 45 days to 120 days, which is consistent with the market practice.

A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(Continued)

22

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(ii) Rendering of services

The Company provides services, such as model research, development, and design to customers. Revenue from providing services is recognized in the accounting period in which the services are rendered. For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as a proportion of the total services to be provided.

Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances that give rise to the revision become known by management.

• (iii) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(o) Deferred grant service

Deferred grant revenue with additional conditions shall be recognized if the Company fulfills the conditions and the grant revenue becomes receivable.

Deferred grant revenue shall be recognized in profit or loss on a systematic basis in the periods in which the expenses it is to compensate are recognized. Grant revenue with conditions to compensate for the acquisition cost of an asset shall be deferred and recognized in profit or loss on a systematic basis over the useful life of the asset.

If the deferred grant revenue is to compensate for the Company’s expenses that have been incurred or to supply immediate financial support to the Company and there is no related cost in the future, it shall be recognized in profit or loss when the grant revenue becomes receivable.

(p) Employee benefits

(i) Defined contribution plans

Obligations for contributions to the defined contribution plans are expensed as related services are provided.

(ii) Defined benefit plans

The Company’s net obligation in respect of the defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

(Continued)

23

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability (asset), which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as related services are provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(q) Share-based payment

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and non-market performance conditions at the vesting date.

For share-based payment awards with non-vesting conditions, the grant-date fair value of the sharebased payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Grant date of a share-based payment award is the date which the board of directors authorized the price and the number of shares that employees can subscribe for.

(r) Income taxes

Income taxes expenses include both current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes are recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

(Continued)

24

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities at the reporting date and their respective tax bases. Deferred taxes are recognized except for the following:

• (i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction affects neither accounting nor taxable profits (losses) and does not give raise to equal taxable and deductible temporary differences;

• (ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

• (iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reserve, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

• (i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

• (ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

• 1) the same taxable entity; or

• 2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date, and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future taxable profits improves.

(s)

Earnings per share

The Company discloses the basic and diluted earnings per share attributable to ordinary shareholders of the Company. The calculation of basic earnings per share is the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The calculation of diluted earnings per share is the profit attributable to ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares. Dilutive potential ordinary shares comprise accrued employee remuneration and restricted stock.

(Continued)

25

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(t) Operating segments

Please refer to the Company’s consolidated financial statements for the years ended December 31, 2023 and 2022, for further details.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing the parent company only financial statements, management has made judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management continues to monitor the accounting estimates and assumptions. The management recognizes any changes in accounting estimates during the period and the impact of those changes in accounting estimates in the following period.

Information about assumption and estimation uncertainties that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is as follows.Those assumptions and estimation have been updated to reflect the impact of economic uncertainty.

(a) Valuation of inventories

As inventories are measured at the lower of cost or net realizable value, the Company estimates the amount due to inventories’ obsolescence and unmarketable items at the reporting date and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions as to future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories. Please refer to note 6(e) for valuation of inventories.

• (b) Valuation of inventories and impairment assessment of intangible assets and investments of investments accounted for using equity method

Please refer to above for inventories valuation. The assessment of impairment of intangible assets and investments accounted for using equity method required the Company to make subjective judgments on cash-generating units, allocate the intangible assets to relevant cash-generating units, and estimate the recoverable amount of relevant cash-generating units. Changes in economic conditions or changes in assessment caused by business strategies could result in significant impairment charges or reversal in future years.

The Company’s accounting policies include measuring financial and non-financial assets and liabilities at fair value through profit or loss. The Company has established an internal control framework with respect to the measurement of fair value and regularly reviews significant unobservable inputs and valuation adjustments. If third-party information, such as broker quotes or pricing services, is used to measure fair value, then the Company assessed the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRSs, including the level in the fair value hierarchy in which such valuations should be classified.

(Continued)

26

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

• (a) Level 1: quoted prices (unadjusted) in active markets for identifiable assets or liabilities.

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

• (c) Level 3: inputs for the assets or liability that are not based on observable market data (unobservable inputs).

For any transfer within the fair value hierarchy, the impact of transfer is recognized on the reporting date. Please refer to note 6(w) for assumptions used in measuring fair value.

(6) Explanation of significant accounts:

• (a) Cash and cash equivalents

December 31, 2023 Cash on hand $ 853 Checking accounts and demand deposits 3,224,255 Time deposits 2,253,577 $ 5,478,685 Current financial assets and liabilities at fair value through profit or loss (i) The derivative financial instruments were as follows: December 31, 2023 Mandatorily measured at FVTPL: Derivative instruments not used for hedging Forward exchange contracts $ 81,452 Foreign exchange swap contracts 277,383 Non-derivative financial assets Equities unlisted in foreign markets－Storm Venture Fund VII, L.P. 5,040 Equities unlisted in foreign markets－Thin Line Capital Fund II, L.P. 7,008 $ 370,883 Current $ 358,835 Non-Current 12,048 $ 370,883

December 31, 2022 1,163 2,806,990 153,540 2,961,693 December 31, 2022 261,258 105,774 2,662 - 369,694 367,032 2,662 369,694 (Continued)

• (b) Current financial assets and liabilities at fair value through profit or loss

27

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Financial liabilities held-for-trading: Derivative instrument not used for hedging Forward exchange contracts Foreign exchange swap contracts	December 31, 2023 $ (981,945) (7,135) $ (989,080)	December 31, 2022 (620,211) (393,774) (1,013,985)

• (ii) The Company invested the amounts of $2,065 and $597 in an unlisted company, Storm Venture Fund VII, L.P. in July and September 2022, respectively. Moreover, Storm Venture Fund VII, L.P increased its capital, wherein the Company participated and invested the amount of $3,097 for the year ended December 31, 2023.

• (iii) The Company invested the amount of $7,650 in an unlisted company, Thin Line Capital Fund II, L.P. in June 2023.

• (iv) The Company held the following derivative instruments, without the application of hedge accounting, were classified as mandatorily measured at fair value through profit or loss and held-for-trading financial liabilities as of December 31, 2023 and 2022:

December 31, 2023

Derivative financial instruments Forward exchange contracts – buy USD / sell TWD Forward exchange contracts －buy TWD / sell USD Forward exchange contracts – buy CNY/ sell USD Forward exchange contracts – buy USD/ sell THB Foreign exchange swap contracts– swap in TWD/ swap out USD	Nominal amount (in thousands) USD 643,000 USD 20,000 USD 222,000 USD 9,000 USD 462,000	Maturity date Predetermined rate January 16, 2024~ June 27, 2024 30.418~31.990 January 16, 2024~ June 20, 2024 30.780~31.315 January 4, 2024~ January 19, 2024 7.1546~7.1756 January 22, 2024 34.835~34.980 January 16, 2024~ June 24, 2024 30.457~31.761

(Continued)

28

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

	December 31, 2022	December 31, 2022
Derivative financial instruments Forward exchange contracts – buy USD / sell TWD Forward exchange contracts – buy CNY / sell USD Foreign exchange contracts – buy USD / sell THB Foreign exchange swap contracts– swap in TWD/ swap out USD	Nominal amount (in thousands) USD 680,000 USD 149,000 USD 8,000 USD 585,000	Maturity date Predetermined rate January 10, 2023~ July 26, 2023 28.788~32.145 January 4, 2023~ July 3, 2023 6.7117~7.2535 January 13, 2023~ February 23, 2023 34.460~35.000 January 10, 2023~ July 26, 2023 29.095~31.935

(c) Financial assets at FVOCI

Equity investments at FVOCI Stocks unlisted in domestic markets–Changing Information Technology Inc. Stocks unlisted in domestic markets–Syntronix Corp. Equities unlisted in foreign markets–Grove Ventures, L.P. Equities unlisted in foreign markets–Grove Ventures II, L.P. Equities unlisted in foreign markets–Grove Ventures III, L.P. Total	December 31, 2023 $ 11,093 250 158,070 97,145 23,727 $ 290,285	December 31, 2022
		7,535 250 183,766 85,267 11,853
		288,671

• (i) The Company designated the investments above as equity securities at FVOCI because these equity securities represent those investments that the Company intends to hold for long-term strategic purposes and not for sale.

• (ii) During the years ended December 31, 2023 and 2022, the dividends of $690 and $8,337, respetively, related to equity investments at FVOCI held were recognized as other income.

• (iii) WK Technology Fund IV Ltd. refunded the amount of $60 to the Company due to its liquidation in May 2022.

• (iv) Grove Venture, L.P executed capital increases, wherein the Company had participated and invested the amounts of $1,377 and $5,340 in the years ended December 31, 2023 and 2022, respectively.

(Continued)

29

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

• (v) Grove Venture II, L.P executed capital increases, wherein the Company had participated and invested the amounts of $10,773 and $26,415 in the years ended December 31, 2023 and 2022, respectively.

• (vi) The Company invested the amount of $7,756 in an unlisted company, Grove Ventures III, L.P. in January 2022. Grove Ventures III, L.P. executed capital increase, where the Company had participated and invested the amount of $15,269 and $5,328 in the years ended December 31, 2023 and 2022, respectively.

• (vii) The Company’ s investments in Grove Ventures, L.P., Grove Ventures II, L.P., and Grove Ventures III, L.P. are investments with duration. The Company’ s investments in the above limited partnership was designated as a financial asset at fair value through other comprehensive income at the time of the initial recognition.

Although, in accordance with the IFRS Q&A released by the Accounting Research and Development Foundation on June 15, 2023, wherein the financial asset cannot be designated at fair value through other comprehensive income, the accounting treatment need not be applied retroactively to investments in limited partnership companies prior to June 30, 2023, according to the Q&A of the FSC. Therefore, the Company continues to measure its investment in these limited partnership companies at fair value through other comprehensive income.

(viii) The Company did not provide any of the aforementioned financial assets as collateral.

• (d) Accounts receivable (including related parties)

Accounts receivable Accounts receivable – related parties Less: allowance for doubtful accounts Total	December 31, 2023 $ 4,153,808 3,169,112 (11,112) $ 7,311,808	December 31, 2022 4,896,691 2,980,766 (66,224) 7,811,233

• (i) The Company did not provide any of the aforementioned accounts receivable (including related parties) as collateral.

(Continued)

30

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• (ii) The Company applies the simplified approach to provide for its ECL, the use of lifetime ECL provision for all accounts receivables. To measure the ECL, accounts receivable have been grouped based on shared credit risk characteristics and customer’ s ability to pay all the amounts due based on the terms of the contract as well as incorporated forward looking information, including macroeconomic and relevant industry information. The ECL allowance provision analysis was as follows:

Current 0 to 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 180 days past due 181 to 360 days past due More than 361 days past due Current 0 to 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 180 days past due 181 to 360 days past due More than 361 days past due	December 31, 2023	December 31, 2023
	Carrying amounts of accounts receivable (including related parties) Lifetime ECL rate $ 6,889,265 0% 409,636 0%~3% 19,421 0%~5% 1,259 0%~10% 3,309 0%~25% 9 0%~80% 21 0%~100% $ 7,322,920 December 31, 2022		Loss allowance provision of lifetime ECL
			- 9,775 971 75 265 5 21
			11,112
		Lifetime ECL rate 0% 0%~3% 0%~5% 0%~10% 0%~25% 0%~80% 0%~100%	Loss allowance provision of lifetime ECL
			- 20,649 9,878 - 35,697 - -
			66,224

(Continued)

31

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(iii) The movement in the allowance for accounts receivable was as follows:

		2023	2022
Balance on January 1, 2023 and 2022	$	66,224	13,136
Impairment losses recognized (reversed)		(54,245)	52,213
Effect of exchange rate changes		(867)	875
Balance on December 31, 2023 and 2022	$	11,112	66,224

• (iv) The Company entered into agreements with banks to sell its accounts receivable without recourse. According to the agreements, within the limit of its credit facilities, the Company does not need to guarantee the capability of its customers to pay for reasons other than commercial disputes when transferring its accounts receivable. The Company receives partial advances upon sales of accounts receivable and pays interest calculated based on the interest rates agreed for the period through the collection of the accounts receivable. The remaining amounts are received upon the collection of the accounts receivable, and are recorded as other receivables. In addition, the Company shall pay handling charges based on a fixed rate. The Company derecognized the above trade receivables because it has transferred substantially all of the risks and rewards of their ownership and it does not have any continuing involvement in them. As of December 31, 2023 and 2022, the details of transferred accounts receivable which conformed to the criteria for derecognition were as follows:

				December 31, 2023	December 31, 2023
Buyer	Amount derecognized			Amount advanced Amount Recognized in Other Unpaid Paid Receivables - - - December 31, 2022		Range of Guarantee (promissory Interest rate note) - US$ 2,500
Mega International Commercial Bank	$ -
Buyer	Amount derecognized			Amount advanced Unpaid Paid - - - - - -	Amount Recognized in Other Range of Guarantee (promissory Receivables Interest rate note) - $ - US$ 3,750 - - NT$ 297,000 -
				Unpaid - - -
Mega International Commercial Bank Bank of Taiwan	$ - - $ -

• (v) Please refer to note 9 for guarantee notes provided by the Company to sell its accounts receivable.

(Continued)

32

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(e) Inventories

Raw materials Semi-finished goods Finished goods and merchandise	December 31, 2023 $ 431,063 57,351 2,213,209 $ 2,701,623	December 31, 2022
		335,485 55,200 2,381,530
		2,772,215

The Company did not provide any of the aforementioned inventories as collateral. Except for cost of inventories sold, the Company recognized the following items as cost of goods sold:

Losses on inventory valuation and disposal of inventories Losses on physical inventories	2023 $ (12,243) (1,422) $ (13,665)	2022
		(13,140 (381
		(13,521

• (f) Investments accounted for using equity method

The Company’s investments accounted for using the equity method at the reporting dates were as follows:

Subsidiaries	December 31, 2023 $ 19,000,624	December 31, 2022 17,830,483

• (i) Please refer to the Company’s consolidated financial statements for the year ended December 31, 2023, for details of subsidiaries.

• (ii) The Company did not provide investments accounted for using the equity method as collateral.

• (iii) In 2022, the Company invested the amounts of US10,000 in Primax Electronics (Singapore) Pte. Ltd.

• (iv) The revenue of ALT International Co., Ltd (Cayman) (“AIC”) held by the Company through its subsidiary, Primax AE (Cayman) Holding Ltd. did not turn out as expected due to intensive industrial competition. Therefore, there is an impairment of the intangible assets and carrying amounts related to this equity investment after the Company’s evaluation in 2022. Please refer to note 6(h) of the Company’s consolidated financial statements for the year ended December 31, 2023.

• (v) Tymphany Huizhou held by the Company through its subsidiary, Diamond (Cayman) Holding Ltd., repurchased shares from the employee stock ownership plan in May 2022. The Company recognized the equity change as capital surplus. Please refer to note 6(i) of the Company’s consolidated financial statements for the year ended December 31, 2023.

(Continued)

33

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(g) Property, plant and equipment

The cost, and depreciation of the property, plant and equipment of the Company for the years ended December 31, 2023 and 2022, were as follows:

Cost or deemed cost: Balance on January 1, 2023 Additions Disposals Reclassifications Balance on December 31, 2023 Balance on January 1, 2022 Additions Disposals Reclassifications Balance on December 31, 2022 Depreciation: Balance on January 1, 2023 Depreciation Disposals Balance on December 31, 2023 Balance on January 1, 2022 Depreciation Disposals Balance on December 31, 2022 Carrying amounts: Balance on December 31, 2023 Balance on December 31, 2022 Balance on January 1, 2022	Land $ 792,459 - - - $ 792,459 $ 792,459 - - - $ 792,459 $ - - - $ - $ - - - $ - $ 792,459 $ 792,459 $ 792,459	Buildings and additional equipment 195,070 - - 12,463 207,533 141,673 - (584) 53,981 195,070 135,572 5,934 - 141,506 133,560 2,596 (584) 135,572 66,027 59,498 8,113	Machinery and equipment 150,658 10,812 (1,129) 1,394 161,735 132,387 9,980 (1,677) 9,968 150,658 114,535 18,408 (1,111) 131,832 95,413 20,799 (1,677) 114,535 29,903 36,123 36,974	Other equipment 72,384 3,820 (2,599) 1,333 74,938 64,221 8,692 (529) - 72,384 58,339 6,401 (2,599) 62,141 53,321 5,547 (529) 58,339 12,797 14,045 10,900	Testing equipment 81,456 628,747 - (44,382) 665,821 15,170 130,992 - (64,706) 81,456 - - - - - - - - 665,821 81,456 15,170	Total
						1,292,027 643,379 (3,728) (29,192)
						1,902,486
						1,145,910 149,664 (2,790) (757)
						1,292,027
						308,446 30,743 (3,710)
						335,479
						282,294 28,942 (2,790)
						308,446
						1,567,007
						983,581
						863,616

• (i) The unamortized deferred revenue of equipment subsidy amounted to $488,088 and $586,567 as of December 31, 2023 and 2022, respectively.

• (ii) As of December 31,2023 and 2022, the Company has started the construction of Jhubei factory in 2022, with the total costs of $662,663 and $58,556, respectively. For the year ended December 31, 2023, the capitalized borrowings cost of $1,039, related with the construction of the said factory, had been calculated using a capitalization rate of 1.1%.

• (iii) The Company provided the aforementioned property, plant and equipment as collateral; please refer to note 8 .

(Continued)

34

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(h) Right-of-use assets

The Company leases many assets including land, buildings and vehicles. Information about leases for which the Company as a lessee is presented below:

Cost: Balance on January 1, 2023 Additions Disposals Balance on December 31, 2023 Balance on January 1, 2022 Additions Disposals Balance on December 31, 2022 Depreciation: Balance on January 1, 2023 Depreciation Disposals Balance on December 31, 2023 Balance on January 1, 2022 Depreciation Disposals Balance on December 31, 2022 Carrying amounts: Balance on December 31, 2023 Balance on December 31, 2022 Balance on January 1, 2022 (i) Investment property	Buildings $ 1,484,029 66,323 - $ 1,550,352 $ 1,482,800 1,229 - $ 1,484,029 $ 348,081 98,452 - $ 446,533 $ 260,119 87,962 - $ 348,081 $ 1,103,819 $ 1,135,948 $ 1,222,681	Vehicles 13,813 7,423 (4,926) 16,310 13,125 2,884 (2,196) 13,813 9,776 3,683 (4,630) 8,829 8,436 2,632 (1,292) 9,776 7,481 4,037 4,689	Other equipments 2,106 - (2,106) - 2,106 - - 2,106 2,106 - (2,106) - 1,935 171 - 2,106 - - 171	Total 1,499,948 73,746 (7,032) 1,566,662 1,498,031 4,113 (2,196) 1,499,948 359,963 102,135 (6,736) 455,362 270,490 90,765 (1,292) 359,963 1,111,300 1,139,985 1,227,541

Cost or deemed cost: Balance on January 1, 2023 (Balance on December 31, 2023) Balance on January 1, 2022 (Balance on December 31, 2022)	Land $ 162,012 $ 162,012	Buildings and other equipments 172,167 172,167	Total
			334,179
			334,179

(Continued)

35

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

Depreciation and impairment losses: Balance on January 1, 2023 Depreciation Balance on December 31, 2023 Balance on January 1, 2022 Depreciation Balance on December 31, 2022 Carrying amounts: Balance on December 31, 2023 Balance on December 31, 2022 Balance on January 1, 2022 Fair value: Balance on December 31, 2023 Balance on December 31, 2022 Balance on January 1, 2022	Land $ 33,941 - $ 33,941 $ 33,941 - $ 33,941 $ 128,071 $ 128,071 $ 128,071	Buildings and other equipments Total 66,450 100,391 3,560 3,560 70,010 103,951 62,890 96,831 3,560 3,560 66,450 100,391 102,157 230,228 105,717 233,788 109,277 237,348 $ 782,771 $ 748,616 $ 711,098	Total
			100,391 3,560
			103,951
			96,831 3,560
			100,391
			230,228
			233,788
			237,348

• (i) The fair value of investment property is based on the quotation from third parties, which is categorized within Level 3.

• (ii) Investment property comprises a number of commercial properties which are leased to third parties. Each of the leases contains an initial non-cancellable period between 1 and 15 years. Subsequent renewals are negotiated with the lessee, and no contingent rents are charged. Please refer to note 6(m) for further information.

(iii) The Company did not provide any of the aforementioned investment property as collateral.

(j)

Intangible assets

The cost and amortization of the intangible assets of the Company for the years ended December 31, 2023 and 2022, were as follows:

Cost: Balance on January 1, 2023 (Balance on December 31, 2023) Balance on January 1, 2022 (Balance on December 31, 2022)	Trademarks $ 25,584 $ 25,584	Patents 64,271 64,271	Copyrights 30,832 30,832	Total
				120,687
				120,687

(Continued)

36

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Amortization: Balance on January 1, 2023 Amortization Balance on December 31, 2023 Balance on January 1, 2022 Amortization Balance on December 31, 2022 Carrying amount: Balance on December 31, 2023 Balance on December 31, 2022 Balance on January 1, 2022	Trademarks $ 25,584 - $ 25,584 $ 25,584 - $ 25,584 $ - $ - $ -	Patents 64,271 - 64,271 64,271 - 64,271 - - -	Copyrights 27,234 2,055 29,289 25,179 2,055 27,234 1,543 3,598 5,653	Total
				117,089 2,055
				119,144
				115,034 2,055
				117,089
				1,543
				3,598
				5,653

(i) The Company did not provide any of the aforementioned intangible assets as collateral.

(k) Long-term borrowings

Secured bank loans Less: current portion Unused credit lines Secured bank loans Less: current portion Unused credit lines		December 31, 2023 Annual interest rate Maturity year Amount 1.1%~1.65% 2026~2028 $ 707,979 (16,667) $ 691,312 $ 1,092,021 December 31, 2022 Annual interest rate Maturity year Amount 1.03%~1.40% 2026 $ 464,000 - $ 464,000 $ 1,336,000
	Currency	Annual interest rate
	TWD
	Currency	Annual interest rate
	TWD	1.03%~1.40%

(i) Please refer to note 8 for futher information on assets provided as collateral.

• (ii) Please refer to note 9 for the details of the outstanding guarantee notes.

(Continued)

37

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(l) Lease liabilities

Current Non-current	December 31, 2023 $ 92,448 $ 1,090,896	December 31, 2022 72,294 1,121,079

Non-current	$ 1,090,896	1,121,079
For the maturity analysis, please refer to note 6(w). The amounts recognized in profit or loss were as follows: Interest on lease liabilities Expenses relating to short-term leases and leases of low- value assets	2023 $ 25,785 $ 6,978	2022
		25,908
		4,338

The amounts recognized in the statement of cash flows for the Company were as follows:

Rental paid in operating activities Interest on lease liabilities paid in operating activities Payment made on lease liabilities in financing activities Total cash outflow for leases	2023 $ (6,978) (25,785) (83,477) $ (116,240)	2022
		(4,338 (25,908 (68,544
		(98,790

(i) Real estate leases

The Company leases buildings for its office and staff dormitory. The leases typically run for a period of one to fifteen years. Some leases require additional rental payments depending on the changes in fair value of the lease assets.

(ii) Other leases

The Company leases vehicles and other equipments with lease terms of one to four years.

The Company also leases vehicles with lease terms of one to two years. These leases are shortterm or leases of low-value items. The Company decided to apply recognition exemptions, and had elected not to recognize its right-of-use assets and lease liabilities for these leases.

(m) Operating lease

The Company leases out its investment property. The Company has classified these leases as operating leases, because it does not transfer substantially all of the risks and rewards incidental to the ownership of the assets. Please refer to note 6(i).

(Continued)

38

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date was as follows:

the reporting date was as follows:
Less than one year Between two and five years More than five years Total undiscounted lease payments	December 31, 2023 $ 11,615 39,931 21,444 $ 72,990	December 31, 2022
		11,395 40,006 31,341 82,742

Rental income from investment properties amounted to $11,295 and $11,290 in 2023 and 2022, respectively.

(n) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

Present value of defined benefit obligations Fair value of plan assets Net defined benefit liability (classified as other non- current liabilities)	December 31, 2023 $ 119,828 64,056 $ 55,772	December 31, 2022
		125,391 70,037
		55,354

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’ s Bank of Taiwan labor pension reserve account balance amounted to $64,056 at the end of the reporting period. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

39

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

• 2) Movements in present value of defined benefit obligations

The movements in present value of defined benefit obligations for the Company for the years ended December 31, 2023 and 2022, were as follows:

2023 Defined benefit obligation on January 1 $ 125,391 Benefits paid (10,208) Current service costs and interest cost 1,692 Remeasurement of net defined benefit liabilities 2,953 Defined benefit obligation on December 31 $ 119,828	2022 134,375 (9,099) 1,195 (1,080)
	125,391

• 3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company for the years ended December 31, 2023 and 2022, were as follows:

Fair value of plan assets on January 1 Interest income Remeasurement of net defined liabilities Contributions paid Benefits paid Fair value of plan assets on December 31	2023 $ 70,037 936 525 2,766 (10,208) $ 64,056	2022 69,942 530 5,891 2,773 (9,099)
		70,037

• 4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company for the years ended December 31, 2023 and 2022, were as follows:

Current service costs Net interest of net liabilities for defined benefit Expenses	2023 $ - 756 $ 756	2022 192 473
		665

(Continued)

40

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

• 5) Remeasurement of net defined liability (asset) recognized in other comprehensive income

The Company’s remeasurement of net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2023 and 2022, was as follows:

Balance on January 1 Recognized during the period Balance on December 31	2023 $ 16,085 2,428 $ 18,513	2022 23,056 (6,971) 16,085

• 6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

Discount rate Future salary increase rate	2023 2022 % 1.300 % 1.400 % 2.750 % 2.750

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date was $2,742.

The weighted-average lifetime of the defined benefit plans is 8 years.

• 7) Sensitivity analysis

When computing the present value of the defined benefit obligations, the Company uses judgments and estimations to determine the actuarial assumptions, including discount rates and future salary changes, as of the financial statement date. Any changes in the actuarial assumptions may significantly impact the amount of the defined benefit obligations.

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation shall be as follows:

December 31, 2023 Discount rate Future salary increase rate December 31, 2022 Discount rate Future salary increase rate	Influences of defined benefit obligations
	Increased 0.25% Decreased 0.25% $ (2,033) 2,089 $ 2,007 (1,963) $ (2,198) 2,261 $ 2,169 (2,119)

(Continued)

41

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. Many assumption changes may affect each other in practice. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There were no change in the method and assumptions used in the preparation of the sensitivity analysis for 2023 and 2022.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under this defined contribution plan, the Company contributes a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The Company recognized pension costs under the defined contribution method amounting to $59,513 and $56,922 for the years ended December 31, 2023 and 2022, respectively, recorded as operating expenses and operating cost in the statement of comprehensive income.

(o) Income taxes

• (i) The components of income tax expenses for the years ended December 31, 2023 and 2022, were as follows:

Current tax expense Deferred tax expense (benefit) Income tax expense	2023 $ 231,868 117,044 $ 348,912	2022 473,516 (50,290) 423,226

• (ii) The Company had no income tax recognized directly in equity or other comprehensive income for the years ended December 31, 2023 and 2022.

• (iii) Reconciliation of income tax expenses and profit before tax for the years ended December 31, 2023 and 2022, were as follows:

Profit before tax Income tax calculated based on the Company’s domestic tax rate Overseas investment gains recognized under the equity method Investment tax credits accrued Prior year’s income tax adjustment Surtax on unappropriated earnings Others Income taxes expense	2023 $ 2,834,201 566,840 (168,190) (85,925) (14,957) 32,360 18,784 $ 348,912	2022 3,165,835 633,167 (192,515) (90,614) 25,674 20,572 26,942 423,226

(Continued)

42

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(iv) Deferred tax assets and liabilities

• 1) Unrecognized deferred tax liabilities

The Company is able to control the timing of the reversal of the temporary differences associated with subsidiaries’ earnings. Also, the management considered it probable that the temporary differences will not be reversed in the foreseeable future. Hence, such temporary differences were not recognized under deferred tax liabilities. Details were as follows:

December 31, 2023 Aggregate amount of temporary differences related to investments in subsidiaries $ 1,475,850	December 31, 2022
	1,339,438

• 2) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

Deductible temporary differences	December 31, 2023 $ 243,900	December 31, 2022
		207,558

The deductible temporary differences cannot be realized. Therefore, they were not recognized as deferred tax assets.

• 3) Changes in the amount of deferred tax assets and liabilities for the years ended December 31, 2023 and 2022, were as follows:

Deferred tax liabilities: Balance on January 1, 2023 Recognized in profit or loss Balance on December 31, 2023 Balance on January 1, 2022 Recognized in profit or loss Balance on December 31, 2022	Investment income recognized under the equity method (overseas)	Unrealized foreign exchange gains	Unrealized foreign exchange gains		Others	Total
	$ 253,637 98,898 $ 352,535 $ 222,385 31,252 $ 253,637		- -		1,247 - 1,247 1,247 - 1,247	254,884 98,898
			-			353,782
						271,499 (16,615)
						254,884

(Continued)

43

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Deferred tax assets: Balance on January 1, 2023 Recognized in profit or loss Balance on December 31, 2023 Balance on January 1, 2022 Recognized in profit or loss Balance on December 31, 2022		Bad debt in excess of tax limit $ - -	Unfunded pension fund contribution 12,814 (402)	Refund liabilities 243,832 32,981 276,813 227,235 16,597 243,832	Loss on inventory valuation 9,475 (1,239) 8,236 11,527 (2,052) 9,475	Deferred granted revenue 117,313 (19,695)	Unrealized revenue from disposal of assets 18,026 (3,090) 14,936 21,116 (3,090) 18,026	Unrealized foreign exchange loss 41,559 (21,034) 20,525 - 41,559 41,559	Gain on valuation of financial assets / liabilities	Others 8,538 (2,325) 6,213 2,422 6,116 8,538	Total 580,948 (18,146)
									129,391 (3,342)
		$ -	12,412			97,618			126,049		562,802
		$ 39,958 (39,958)	13,235 (421)			141,920 (24,607)			89,860 39,531		547,273 33,675
		$ -	12,814			117,313			129,391		580,948

(v) The Company’s income tax returns have been examined by the tax authority through the years to 2020.

(p) Capital and other equity

(i) Ordinary Shares

As of December 31, 2023 and 2022, the nominal ordinary shares both amounted to $5,500,000. Par value of each share is $10 (dollars), which means in total there were 550,000 thousand authorized ordinary shares, of which 462,974 thousand and 458,289 thousand shares, respectively, were issued. All issued shares were paid up upon issuance.

Reconciliation of shares outstanding for the years ended December 31, 2023 and 2022, were as follows:

Balance on January 1 Issuance of restricted stock Cancellation of restricted stock Balance on December 31	Ordinary shares (in thousands of shares) 2023 2022 458,289 455,263 4,885 3,555 (200) (529) 462,974 458,289
	2023 458,289 4,885 (200) 462,974

(ii) Capital surplus

The balances of capital surplus were as follows:

Additional paid-in capital Employee stock options Restricted employee stock options Long-term stock investment	December 31, 2023 $ 1,076,639 259,401 463,007 560,706 $ 2,359,753	December 31, 2022
		945,508 259,401 351,458 573,541
		2,129,908

(Continued)

44

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

According to the ROC Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the capital increase via transferring of the paid-in capital, in excess of par value, should not exceed 10% of the total common stock outstanding.

Tymphany Huizhou, a subsidiary of Company, repurchased shares from employee stock ownership plan in cash and cancelled such shares for a capital reduction in May 2022, resulting in an increase of the shareholding of the Company from 71.43% to 77.01%. The Company recognized the change in its ownership interest in the subsidiary as capital surpluslong-term equity investments. Please refer to note 6(t) of the Company’s consolidated financial statements for the year ended December 31, 2023.

(iii) Retained earnings

According to the articles of the Company, when allocating the earnings for each year, the Company shall first offset its losses in previous year and set aside a legal capital reserve at 10% of the earing left over, until the accumulated legal capital reserve has equaled the total capital of the Company; then set aside a special capital reserve in accordance with relevant laws, the balance of the earnings shall combined into an aggregate amount of undistributed earnings, which shall become the aggregate distributable earnings to be distributed according to the distribution plan proposed by the board of directors and submitted to the stockholders’ meeting for resolution.

The Company is at the growth stage and considers its future cash demand, long-term financial plans, benefits to stockholders, and balanced dividends. Earnings distribution is made by stock dividend and cash dividend. The cash dividend shall not be less than 10 percent of the total dividends and could be adjusted depending on the Company’s operating condition.

1) Legal reserve

If the Company experiences profit for the year, the distribution of the statutory earnings reserve, either by new shares or by cash, shall be decided at the shareholders’ meeting, and the distribution amount is limited to the portion of legal reserve which exceeds 25 percent of the paid-in capital.

2) Special reserve

By choosing to apply exemptions granted under IFRS 1 “ First-time Adoption of International Financial Reporting Standards” during the Company’s first-time adoption of IFRS Accounting Standards endorsed by the FSC, retained earnings increased by $97,300 by recognizing the cumulative translation adjustments (gains) on the adoption date as deemed cost. In accordance with the FSC, the increase in retained earnings due to the first-time adoption of IFRSs shall be reclassified as special reserve, and when the relevant asset is used, disposed of, or reclassified, this special reserve shall be reversed as distributable earnings proportionately. As of December 31, 2023 and 2022, the carrying amount of special reserve both amounted to $97,300.

(Continued)

45

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

In accordance with the FSC, a portion of earnings shall be allocated as special earnings reserve during earnings distribution. If the Company has already reclassified a portion of earnings to special reserve under the preceding subparagraph, it shall make supplemental allocation of special reserve for any difference between the amount it has already allocated and the amount of the current-period total net reduction of other shareholders’ equity. An equivalent amount of special reserve shall be allocated from the after-tax net profit in the period, plus items other than after-tax net profit in the period, that are included in the undistributed current-period earnings and the undistributed prior-period earnings. Similarly, a portion of undistributed prior-period earnings shall be reclassified as special earnings reserve (which does not qualify for earnings distribution) to account for cumulative changes to other stockholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other stockholders’ equity shall qualify for additional distributions.

3) Earnings distribution

On May 25,2023 and May 26, 2022, the shareholders’ meeting resolved to distribute the 2022 and 2021 earnings, respectively. The distributions for 2022 and 2021 were NT$3.9(dollars) and NT$3.1(dollars) per share, which amounted to $1,791,794 and $1,411,230, respectively.

The earnings distributions for 2023 were proposed to be NT$4(dollars) per share which amounted to $1,851,727 during the board of directors meeting held on February 26, 2024.

(q) Share-based payment

(i) As of December 31, 2023, the outstanding restricted stock of the Company was as follows:

Grant date Fair value on grant date (per share) Exercise price Granted units (thousand shares) Vesting period	Plan 5 (note 1) November 21, 2019 February 20, 2020 64.30 53.20 Free grants Free grants 1,820 180 1~3 years (notes 2 and 4) 1~3 years (note 2)	Plan 6 (note 1)	Plan 7 (note 1)	Plan 8 (note 1) Plan 9 (note 1)
		July 30, 2020 January 25, 2021 41.75 55.80 Free grants Free grants 2,260 740 1~5 years (notes 2, 3, 4 and 5) 1~3 years (notes 2, 3 and 4)	October 18, 2021 February 9, 2022 50.40 53.90 Free grants Free grants 3,800 200 1~3 years (note 2) 1~3 years (note 2)	August 9, 2022 February 8, 2023 August 4, 2023 69.70 58.50 63.30 Free grants Free grants Free grants 3,355 1,145 3,740 1~3 years (note 2) 1~3 years (note 2) 1~3 years (note 2)

Note 1: Plan 5 was resolved by the stockholders’ meeting held on June 18, 2019, and has been registered with and approved by the Securities and Futures Bureau of the FSC. The board of directors’ meeting resolved to issue 1,820 thousand shares and 180 thousand shares on November 12, 2019 and February 18, 2020, respectively.

Plan 6 was resolved by the stockholders’ meeting held on June 23, 2020, and has been registered with and approved by the Securities and Futures Bureau of the FSC. The board of directors’ meeting resolved to issue 2,260 thousand shares and 740 thousand shares on July 30, 2020 and January 22, 2021, respectively.

(Continued)

46

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

Plan 7 was resolved by the stockholders’ meeting held on July 13, 2021, and has been registered with and approved by the Securities and Futures Bureau of the FSC. The board of directors’ meeting resolved to issue 3,800 thousand and 200 thousand shares on August 24, 2021 and January 21, 2022, respectively.

Plan 8 was resolved by the stockholders’meeting held on May 26, 2022, and has been registered with and approved by the Securities and Futures Bureau of the FSC. The board of directors’meeting resolved to issue 3,355 thousand and 1,145 thousand shares on August, 2022 and January, 2023, respectively.

Plan 9 was resolved by the stockholders’ meeting held on May 25, 2023, and has been registered with and approved by the Securities and Futures Bureau of the FSC. The board of directors’ meeting resolved to issue 3,740 thousand shares on August, 2023.

• Note 2: If the employees continue to provide service to the employer company and meet the prior year’ s performance indicator, 30%, 30% and 40% shall be vested in the first year, second year and third year, respectively, after the grant date.

• Note 3: If the employees continue to provide service to the employer company and meet the prior year’s performance indicator, 50% of the restricted stock shall be vested in the first year after the grant date, and the remaining 50% shall be vested in second year after the grant date.

• Note 4: If the employees continue to provide service to the employer company and meet the prior year’s performance indicator, the restricted stock shall be vested in the first year after the grant date.

• Note 5: If the employees continue to provide service to the employer company and meet the prior year’s performance indicator, 15%, 15%, 20%, 20% and 30% shall be vested in the first year, second year, third year, fourth year and fifth year, respectively, after the grant date.

The restricted stock is kept by a trust, which is appointed by the Company, before it is vested. These shares shall not be sold, pledged, transferred, gifted, or, by any other means, disposed of to third parties during the custody period. The voting rights of these shares are executed by the custodian, and the custodian will act based on law and regulations. If the shares remain unvested after the vesting period, the Company will cancel the unvested shares thereafter.

• 1) The related information on restricted stock of the Company was as follows:

(Thousand shares) Outstanding on January 1 Granted during the year Vesting during the year Expired during the year Outstanding on December 31	2023 7,148 4,885 (2,793) (243) 8,997	2022 6,487 3,555 (2,365) (529) 7,148

(Continued)

47

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• (ii) Expenses attributable to share-based payment were as follows:

Restricted stock	2023 $ 181,902	2022
		123,795

(r) Earnings per share

• (i) Basic earnings per share

The calculation of basic earnings per share for the years ended December 31, 2023 and 2022 was based on the profit and the weighted-average number of ordinary shares outstanding was as follows:

Profit of the Company for the year Weighted-average number of ordinary shares (thousand shares) Basic earnings per share (NT dollars)	2023 $ 2,485,289 452,268 $ 5.50	2022
		2,742,609 449,522 6.10

Weighted-average number of ordinary shares (thousand shares)

Ordinary shares on January 1 Vesting of restricted stock Ordinary shares on December 31	2023 451,142 1,126 452,268	2022
		448,777 745
		449,522

(ii) Diluted earnings per share

The calculation of diluted earnings per share for the years ended December 31, 2023 and 2022 was based on the profit and the weighted-average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares was as follows:

Profit of the Company for the year $ Weighted-average number of ordinary shares (diluted / thousand shares) Diluted earnings per share (NT dollars) $	2023 2,485,289 458,794 5.42	2022
		2,742,609
		455,337
		6.02

(Continued)

48

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

Weighted-average number of ordinary shares (diluted) (thousand shares)

Weighted-average number of ordinary shares on December 31 (basic) Estimated effect of employee stock bonuses Effect of restricted stock Weighted-average number of ordinary shares on December 31 (diluted)	2023 452,268 1,605 4,921 458,794	2022
		449,522 2,074 3,741
		455,337

• (s) Revenue from contracts with customers

• (i) Disaggregation of revenue

Goods sold Service rendered Goods sold Service rendered Mainland China Europe America Other		2023	2023
	Computer Peripherals $ 20,081,784 117,659 $ 20,199,443	Non-computer Peripherals 12,557,280 703,063 13,260,343 2022		Total
				32,639,064 820,722
				33,459,786
				Total
				42,028,492 666,028
				42,694,520
				2022
				22,671,715 4,625,836 9,307,917 6,089,052
				42,694,520

(ii) Contract balances

Accounts receivable (including related parties) Less: allowance for impairment Contract liabilities (recorded as other current liabilities)	December 31, 2023 $ 7,322,920 (11,112) $ 7,311,808 $ 160,241	December 31, 2022 7,877,457 (66,224) 7,811,233 123,253	January 1, 2022
			7,727,218 (13,136
			7,714,082
			118,882

(Continued)

49

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

For details on accounts receivable and allowance for impairment, please refer to note 6(d).

The amount of revenue recognized for the years ended December 31, 2023 and 2022 that were included in the contract liability balance at the beginning of the period were $52,766 and $118,882, respectively.

The contract liabilities primarily relate to the advance consideration received from contracts with goods sold, for which revenue is recognized when products are delivered to customers.

(t) Employee’s and directors’ remuneration

In accordance with the Articles of incorporation, the Company should contribute 2 to 10 percent of the profit as employee remuneration and less than 2 percent as directors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The recipients of shares and cash may include the employees of the Company’s affiliated companies who meet certain conditions.

Details of remuneration to employees and directors were as follows:

Employee remuneration Directors’ remuneration	2023 $ 89,330 44,665 $ 133,995	2022
		99,830 49,915
		149,745

The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees, directors and supervisors of each period, multiplied by the percentage of remuneration to employees, directors and supervisors as specified in the Company’s articles. These remunerations were expensed under operating costs or operating expenses during each period. The differences between the amounts distributed and those accrued in the financial statements, if any, are accounted for as changes in accounting estimates and recognized as profit or loss in the distribution year.

The differences between the amounts approved in the directors’ meeting and those recognized in the financial statements for the distributions of earnings were as follows:

Employee remuneration – Cash Directors’ remuneration		2022
	Actual earnings distributed $ 99,830 49,915	Accrued in the financial statements Difference 99,830 - 49,915 -

(Continued)

50

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Employee remuneration – Cash Directors’ remuneration		2021
	Actual earnings distributed $ 85,798 42,899	Accrued in the financial statements Difference 85,799 1 42,899 -

The difference in 2021 was accounted for as changes in accounting estimates and recognized as profit or loss in 2022. Information on the remuneration to employees and directors, approved in the Board of Directors’ meetings, can be accessed in the Market Observation Post System website.

(u) Other income

The details of other income were as follows:

Rent income Cash dividend income Government grants	2023 $ 11,999 690 604 $ 13,293	2022
		12,007 8,337 -
		20,344

(v) Other gains and losses

The details of other gains and losses were as follows:

Net losses on financial assets/liabilities measured at FVTPL Foreign currency exchange gains, net Other	2023 $ (631,606) 847,574 118,198 $ 334,166	2022
		(646,954) 741,692 105,778
		200,516

(w) Financial instruments

• (i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

For information on the Company’s concentration of credit risk, please refer to note 6(x).

(Continued)

51

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities:

December 31, 2023 Non-derivative financial liabilities: Notes and accounts payable Accounts payable to related parties Other payables Salaries payable Lease liabilities Refund liabilities Long-term borrowings Guarantee deposits Derivative financial liabilities: Outflow Inflow December 31, 2022 Non-derivative financial liabilities: Notes and accounts payable Accounts payable to related parties Other payables Salaries payable Lease liabilities Refund liabilities Long-term borrowings Guarantee deposits Derivative financial liabilities: Outflow Inflow	Carrying amount $ 500,695 11,072,478 1,906,564 307,335 1,183,344 2,193,824 707,979 2,091 989,080 - - $ 18,863,390 $ 301,600 9,050,436 1,903,296 493,350 1,193,373 1,851,815 464,000 2,091 1,013,985 - - $ 16,273,946	Contractual cash flows 500,695 11,072,478 1,906,564 307,335 1,339,066 2,193,824 732,135 2,091 - 2,044,771 (1,055,691) 19,043,268 301,600 9,050,436 1,903,296 493,350 1,370,316 1,851,815 482,562 2,091 - 16,277,841 (15,263,856) 16,469,451	Within 1 year 500,695 11,072,478 1,906,564 307,335 116,672 2,193,824 26,686 - - 2,044,771 (1,055,691) 17,113,334 301,600 9,050,436 1,903,296 493,350 96,733 1,851,815 6,256 - - 16,277,841 (15,263,856) 14,717,471	1~2 years - - - - 115,732 - 240,064 - - - - 355,796 - - - - 99,521 - 22,923 - - - - 122,444	2~5 years - - - - 336,698 - 465,385 - - - - 802,083 - - - - 300,852 - 453,383 - - - - 754,235	Over 5 years
						- - - - 769,964 - - 2,091 - - -
						772,055
						- - - - 873,210 - - 2,091 - - -
						875,301

The Company does not expect that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

(Continued)

52

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

• (iii) Currency risk

• 1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk was as follows:

Financial assets Monetary items USD:TWD Financial liabilities Monetary items USD:TWD	December 31, 2023 Foreign currency Exchange rate TWD $ 393,330 30.735 12,089,006 508,499 30.735 15,628,715	December 31, 2023 Foreign currency Exchange rate TWD $ 393,330 30.735 12,089,006 508,499 30.735 15,628,715	December 31, 2022	December 31, 2022
	Foreign currency $ 393,330 508,499	Exchange rate 30.735 30.735	Foreign currency 339,559 420,929	Exchange rate TWD 30.708 10,427,172 30.708 12,925,887

• 2) Sensitivity analysis

The Company’ s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts and other receivables (including related parties), notes and accounts payable (including related parties), and other payables (including related parties) that are denominated in foreign currency. A weakening (strengthening) of 5% of the TWD against the USD as of December 31, 2023 and 2022, would have decreased or increased the net profit before tax by $176,985 and $124,936, respectively. The analysis is performed on the same basis for both periods.

• 3) Exchange gains and losses on monetary items

The Company’s exchange gains and losses on monetary items (including realized and unrealized) translated to functional currency were as follows:

TWD	2023 Exchange gains and losses Average exchange rate $ 847,574 1	2022
	Exchange gains and losses $ 847,574	Exchange gains and losses Average exchange rate 741,692 1

• (iv) Interest rate analysis

Please refer to the paragraph of liquidity risk management for the interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of nonderivative financial instruments on the reporting date. Regarding liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Company management’ s assessment of the reasonably possible interest rate change.

(Continued)

53

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

If the interest rate had increased or decreased by 0.25%, and assumed all other variables remain constant, the net profit before tax would have increased or decreased by $6,294 and by $5,928 for the years ended December 31, 2023 and 2022, respectively. This is mainly due to borrowings and bank savings with variable interest rates.

(v) Other price risk

If the market price of the equity securities had changed on the reporting date, the influence on other comprehensive income is as follows (The analysis is performed on the same basis for both periods and assumes all other variable remain constant):

Prices of securities at the reporting date	2023	2023
	Other comprehensive income before tax	Income before tax
Increasing 10% Decreasing 10%

(vi) Fair value

1) Kinds of financial instruments and fair value

The carrying amount and fair value of the Company’ s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

Financial assets at FVTPL Financial assets at FVOCI – non current Financial assets measured at amortized cost Cash and cash equivalents Accounts receivable (including related parties) Other receivables Refundable deposits Total Financial liabilities at FVTPL – current		December 31, 2023	December 31, 2023	December 31, 2023
	Carrying amounts $ 370,883 $ 290,285 $ 5,478,685 7,311,808 150,306 29,780 $ 12,970,579 $ 989,080		Fair Value
		Level 1 - - -	Level 2 - - -	Level 3 Total 370,883 370,883 290,285 290,285 989,080 989,080

(Continued)

54

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Financial liabilities measured at amortized cost Borrowings Notes and accounts payable (including related parties) Other payables Salaries payable Lease liabilities Refund liabilities Guarantee deposits Total Financial assets at FVTPL Financial assets at FVOCI – non current Financial assets measured at amortized cost Cash and cash equivalents Accounts receivable (including related parties) Other receivables Refundable deposits Total Financial liabilities at FVTPL – current Financial liabilities measured at amortized cost Borrowings Notes and accounts payable (including related parties) Other payables Salaries payable Lease liabilities Refund liabilities Guarantee deposits Total		December 31, 2023	December 31, 2023	December 31, 2023
	Carrying amounts $ 707,979 11,573,173 1,906,564 307,335 1,183,344 2,193,824 2,091 $ 17,874,310		Fair Value
		Level 1 Level 2 Level 3 Total December 31, 2022
			Fair Value
		Level 1 - - -	Level 2 - - -	Level 3 Total 369,694 369,694 288,671 288,671 1,013,985 1,013,985

(Continued)

55

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• 2) Fair value valuation techniques for financial instruments measured at fair value

If a financial instrument has a quoted price in an active market, the quoted price is used as fair value. The quoted price of a financial instrument obtained from major exchanges and over-the counter markets are the basis used to determine the fair value of a listed company’s stock and the quoted prices in an active market.

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. If these conditions can not be reached, then the market is non-active. In general, a market with low trading volume or high bid-ask spreads is an indication of a non-active market.

The Company uses the following methods in determining the fair value of its financial instruments without a quoted price in an active market:

• a) The fair value of derivative instruments is based on quoted prices. When quoted prices are unavailable, the fair value is estimated on the basis of the contract’s spot exchange rate and swap point.

• b) Financial assets at FVOCI – non-current are investments in domestic or foreign non-listed stock. The estimated fair value is based on the market approach of comparable business and lack of liquidity. When prices are available, the fair value is estimated on the basis of unadjusted prior trade prices.

• 3) In 2023 and 2022, there were no transfers between Levels.

• 4) Reconciliation of Level 3 fair values

Balance on January 1 Recognized in profit or loss Recognized in other comprehensive income Acquisition / disposal Balance on December 31		2023	Total (355,620) (631,606) (25,805) 685,119 (327,912)		2022	Total (227,755) (646,953) 22,345 496,743 (355,620)
	FVTPL $ (644,291) (631,606) - 657,700 $ (618,197)	FVOCI 288,671 - (25,805) 27,419 290,285		FVTPL (449,302) (646,953) - 451,964 (644,291)	FVOCI 221,547 - 22,345 44,779 288,671

(Continued)

56

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

• 5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The fair value measurements of the Company which are categorized within level 3 are classified as financial assets and liabilities at FVTPL – non-derivative financial assets and derivative instruments not used for hedging and financial assets at FVOCI – equity investment without an active market. The quantitative information about significant unobservable inputs was as follows:

Item Financial assets at FVOCI – equity investment without an active market Financial assets and liabilities at FVTPL – non-derivative financial assets Financial assets and liabilities at FVTPL – derivative instruments not used for hedging	Valuation technique (note 1) (note 1) (note 2)	Significant unobservable inputs Inter-relationships between significant unobservable inputs and fair value (note 1) (note 1) (note 1) (note 1) (note 2) (note 2)

  - note 1: The fair value is based on the market value, and it has considered the recent financing activities, comparable business, market and other economic conditions etc., to determine the assumptions. Also, the significant unobservable inputs are marketability discount, but any changes of marketability discount would not result in significant potential financial impact, therefore there is no need to show the quantified information on it.

  - note 2: The fair value is based on the quotation of a third party, therefore there is no need to show the sensitivity analysis of unobservable inputs.

• (x) Financial risk management

• (i) Overview

The Company has exposure to the following risks from financial instruments:

• 1) Credit risk

• 2) Liquidity risk

• 3) Market risk

This note presents information on exposure to each of the above risks and on the objectives, policies, and processes for measuring and managing risk. For detailed information, please refer to the related notes on each risk.

(Continued)

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PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(ii) Structure of risk management

The Company’ s risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Company’s board of directors oversees the management’s monitoring of the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The board of directors is assisted in its oversight role by an internal auditor. The internal auditor undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the board of directors.

(iii) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or a counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Company’ s cash and cash equivalents, accounts receivables (including related parties), and derivative instruments.

1) Cash and cash equivalents

The Company had deposited $5,214,211 (including restricted deposits) in O-Bank and 10 other financial institutions, and $2,697,679 (including restricted deposits) in HSBC Bank and 7 other financial institutions, representing 13% and 8% of total assets, as of December 31, 2023 and 2022, respectively. The Company believes that there is no significant credit risk from the above-mentioned financial institutions.

2) Accounts receivable

Sales to individual customers (including related parties) constituting over 10% of total revenue for the years ended December 31, 2023 and 2022, totaled 48% and 42%, respectively; also 47% and 49%, respectively, of the ending balance of accounts receivable (including related parties) were accounted for by those customers. In order to reduce credit risk, the Company assesses the financial status of each customer and the possibility of collection of receivables on a regular basis. The above-mentioned customers are profitable and have a good credit record; hence, and the Company did not suffer any significant credit loss from those customers during the financial reporting period.

3) Derivative instruments

The Company entered into derivative instrument contracts with reputable and creditworthy financial institutions. The Company believes that the risk that these financial institutions may default on these contracts is relatively low and anticipates no significant credit loss.

(Continued)

58

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’ s reputation.

The Company manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Company had unused credit line of $13,458,671 and $13,379,228 as of December 31, 2023 and 2022, respectively.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Company’ s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the functional currency. These transactions are denominated in USD.

The Company uses forward exchange contracts and foreign exchange swap contracts to hedge its currency risk. The Company makes performance reports and reviews operating strategy regularly, and believes that there is no significant risk because the gains or losses from exchange rate fluctuation will mostly be offset by the hedged item.

2) Interest rate risk

The Company’s main assets and liabilities with a floating-interest-rate basis are deposits and long-term borrowings. The Company believes that cash flow risk arising from interest rate fluctuation is insignificant.

(y) Capital management

The board’ s policy is to maintain a strong capital base so as to maintain investor, creditor, and market confidence, and to sustain future development of the business. Capital consists of ordinary shares, capital surplus, retained earnings, other equity, and non-controlling interests.

The Company sets its objectives for managing capital to safeguard the capacity to continue to operate, to continue to provide a return to stockholders, to safeguard the interest of related parties, and to maintain an optimal capital structure to reduce the cost of capital.

The Company’s debt ratio as of December 31, 2023 and 2022, were 56% and 54%, respectively.

(Continued)

59

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(z) Changes of liabilities from financing activities

Reconciliation of liabilities arising from financing activities was as follows:

Long-term borrowings Lease liabilities Guarantee deposits Total liabilities from financing activities	January 1, 2023 $ 464,000 1,193,373 2,091 $ 1,659,464	Cash flows 243,979 (83,477) - 160,502	Effect of changes in exchange rate - - - -	Change in lease payments - 73,448 - 73,448	December 31, 2023
					707,979 1,183,344 2,091
					1,893,414

Short-term borrowings Long-term borrowings Lease liabilities Guarantee deposits Total liabilities from financing activities	January 1, 2022 $ 332,000 429,500 1,258,713 1,991 $ 2,022,204	Cash flows (332,000) 34,500 (68,544) 100 (365,944)	Effect of changes in exchange rate - - - - -	Change in lease payments - - 3,204 - 3,204	December 31, 2022
					- 464,000 1,193,373 2,091
					1,659,464

• (aa) Supplementary information of cash flow

• (i) The Company acquired property, plant and equipment amounting to $643,379 and $149,664 respectively, and the payables on equipment increased $90,927 and $0 respectively, generating cash outflow of $552,452 and $149,664 for the years ended December 31, 2023 and 2022, respectively.

(7) Related-party transactions:

• (a) Names and relationship with related parties

Name of related party Primax Industries (Cayman Holding) Ltd. (Primax Cayman) Primax Technology (Cayman Holding) Ltd. (Primax Tech.) Destiny Technology Holding Co., Ltd. (Destiny BVI.) Primax Destiny Co., Ltd. (Destiny Japan) Diamond (Cayman) Holdings Ltd. (Diamond) Gratus Technology Corp. (Gratus Tech.) Primax AE (Cayman) Holdings Ltd. (Primax AE)	Relationship with the Group
	A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary

(Continued)

60

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Name of related party Primax Electronics (Singapore) Pte. Ltd. (Primax Singapore) Primax Industries (Hong Kong) Ltd. (Primax HK) Polaris Electronics Inc.(Polaris) Destiny Electronic Corp. (Destiny Beijing) Dongguan Primax Electronic & Telecommunication Products Ltd. (PCH2) Primax Electronics (Chongqing) Corp., Ltd. (PCQ1) Primax Electronics (Kun Shan) Corp., Ltd. (PKS1) Primax Electronics (Thailand) Pte. Ltd. (Primax Thailand) Tymphany Worldwide Enterprises Ltd. (TWEL) Tymphany Acoustic Technology (Huizhou) Co., Ltd. (Tymphany Huizhou) Tymphany Acoustic Technology HK Ltd. (TYM Acoustic HK) Dongguan Tymphany Acoustic Technology Co., Ltd. (Tymphany Dongguan) TYMPHANY ACOUSTIC TECHNOLOGY (UK) LIMITED (TYM UK) Tymphany Acoustic Technology Europe, s.r.o. (TYM Acoustic Europe) Tymphany HK Ltd.(TYM HK) TYP Enterprises, Inc.(TYP) Tymphany Acoustic Technology Limited (TYM Acoustic) Tymphany Acoustic Technology (Thailand) Co., Ltd. (TYTH) Dong Guan Dong Cheng Tymphany Acoustic Technology Co., Ltd. (TYDC) TYMPHANY LOGISTICS, INC (TYML) Tymphany Acoustic Technology (Singapore) PTE. Ltd. (TYM Singapore) ALT International Co., Ltd. (Cayman) (AIC) De Amertek Technology Inc. (US) (DAT) Advanced Micro Electronics Co.,LTD. (AME) Advanced Leading Technology (Shanghai) Co. (ALT (Shanghai)) Advanced Leading Technology Co. (ALT)

Relationship with the Group

A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary A subsidiary An associate An associate An associate An associate An associate

(Continued)

61

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(b) Significant transactions with related-party

(i) Sales

The amounts of sales by the Company to related parties and the outstanding balances were as follows:

Primax Singapore Polaris Others (note)	Sales 2023 2022 $ 10,935,549 12,661,309 3,450,949 3,915,475 68,911 218,173 $ 14,455,409 16,794,957	Accounts receivable – related parties	Accounts receivable – related parties
	2023 $ 10,935,549 3,450,949 68,911 $ 14,455,409	December 31, 2023 1,823,757 806,440 538,915 3,169,112	December 31, 2022
			2,354,802 309,736 316,228
			2,980,766

Note: Individual amount not exceeding 10%.

• 1) The Company sells semi-finished products to its subsidiaries for processing and production. The finished products are then repurchased back by the Company through triangular trade and sold to the customers. The amount of semi-finished products sold in 2023 and 2022 were $1,695,973 and $1,289,967, respectively, which were written off against the related cost of goods sold; therefore, the Company did not recognized the above transaction as sales in the parent company only financial statements. As of December 31, 2023 and 2022, the accounts receivable arising from the sales of semifinished products to subsidiaries amounted to $528,969 and $299,571, respectively.

• 2) There were no significant differences in the selling prices offered to related parties and those of other customers. The trading terms to other customers are 45 days to 120 days, can be lengthened for related parties.

(ii) Purchases

The amounts of purchases by the Company from related parties and the outstanding balances were as follows:

PCH2 PCQ1 Primax Thailand PKS1	Purchases 2023 2022 $ 18,148,657 25,430,611 6,194,057 7,499,967 2,369,368 1,218,267 1,423,450 1,814,952 $ 28,135,532 35,963,797	Accounts payable	– related parties
	2023 $ 18,148,657 6,194,057 2,369,368 1,423,450 $ 28,135,532	December 31, 2023 7,032,690 3,057,622 309,592 989,771 11,389,675	December 31, 2022
			5,972,525 2,488,994 63,738 852,654
			9,377,911

• 1) As of December 31, 2023 and 2022, the amount of accounts payable arising from the transactions mentioned in note 7(b)(i) amounted to $1,501,233 and $945,146, respectively.

• 2) The prices of purchases from related parties were determined based on the cost, plus a reasonable profit margin. The payment terms of related parties and other vendors are 60 days and 30 days to 120 days, respectively.

(Continued)

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PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

• 3) The accounts payable to subsidiaries which exceeded the normal payment terms and agreed by both parties were reclassified to other payables. As of December 31, 2023 and 2022, other payables to related parties were$317,197 and $327,475, respectively.

(iii) Purchase of service

The amounts of purchase of service by the Company from its related parties and the outstanding balances were as follows:

Subsidiaries	Purchase of service 2023 2022 $ 76,848 57,587	Other payables	Other payables
	2023 $ 76,848	December 31, 2023 9,513	December 31, 2022
			9,477

• (iv) Receivable and payable on behalf of related parties

The other receivables arising from the materials purchased and shipping fee paid on behalf of the subsidiaries amounted to $110,308 and $64,559 on December 31, 2023 and 2022, respectively.

The other payables arising from the shipping fee paid by subsidiaries on behalf of the Company amounted to $6,712 and $9,016 on December 31, 2023 and 2022, respectively.

(v) Guarantees and endorsements

The amounts of guarantee the Company provided to PCH2 and Primax Singapore were as follows:

Purchasing of raw materials Shipping Guarantee	December 31, 2023 $ 307,350 2,700,000 $ 3,007,350	December 31, 2022
		307,080 2,700,000
		3,007,080

(vi) Lease

The Company leased out its investment properties to its subsidiaries as office buildings and entered into 15-years lease contract by reference of the rental price of the nearby offices. The rental income in 2023 and 2022 amounted to $9,924 and $9,919, respectively, and there were no outstanding receivables on December 31, 2023 and 2022. Please refer to note 6(m) for lease receivable in the future.

(Continued)

63

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

(c) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits Share-based payments	2023 $ 129,193 1,407 101,390 $ 231,990	2022
		136,986 1,315 65,799
		204,100

Please refer to note 6(q) for information related to share-based payments.

(8) Pledged assets:

The carrying amounts of pledged assets were as follows:

Pledged assets Property, plant and equipment	Pledged to secure	December 31, 2023 $ 769,580	December 31, 2022
	Loan collateral		769,580

(9) Significant commitments and contingencies:

• (a) For the detail of the Company’s guarantees provided to subsidiaries, please refer to notes 7 and 13.

• (b) The following are guarantee letters issued by the banks to customs and business partner as guarantee deposits.

Guarantee letters	December 31, 2023 $ 37,835	December 31, 2022
		38,108

• (c) Guarantee notes provided as part of agreements with banks to sell its accounts receivable and to acquire long-term borrowings were as follows:

Sales of accounts receivable Long-term borrowings	December 31, 2023 $ 76,838 $ 1,800,400	December 31, 2022
		412,155
		1,800,400

• (d) The aggregate unpaid amounts of contracts pertaining to the purchase of equipment were as follows:

Property, plant and equipment	December 31, 2023 $ 1,213,214	December 31, 2022 445,355

(Continued)

64

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(10) Losses due to major disasters: None

(11) Subsequent events:None

(12) Other:

A summary of employee benefits, depreciation, and amortization, by function, is as follows:

By function By item	2023	2023		2022	2022	2022
	Operating cost	Operating expenses	Total	Operating cost	Operating expenses	Total
Employee benefits Salaries Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	187,423 6,811 3,379 - 2,197 1,609 20	1,529,325 107,874 56,890 59,401 53,544 131,269 19,376	1,716,748 114,685 60,269 59,401 55,741 132,878 19,396	157,468 7,140 3,517 - 2,516 1,426 10	1,670,946 102,784 54,070 76,892 64,419 118,281 28,729	1,828,414 109,924 57,587 76,892 66,935 119,707 28,739

Excluding the depreciation of the investment property-buildings (classified as other gains and losses) both amounted to $3,560 thousand for the years ended December 31, 2023 and 2022.

The following were the additional information on the Company’s employees and employee benefits for the years ended December 31, 2023 and 2022:

Numbers of employees Numbers of directors, but not employees concurrently The average employee benefits The average salaries and wages Adjustment of the average salaries and wages Remunerationto supervisors

The Company’s remuneration policy to directors, supervisors, managers and employees are as follows:

The Company’s remuneration to directors includes directors’ remuneration and bonuses. According to the policy stipulated in the Articles of incorporation, wherein no more than 2% of the profit, if applicable, shall be allocated as remuneration to directors. The remuneration distributed to directors shall be resolved by a majority vote at the Board of Directors attended by directors representing two-thirds or more of the voting rights, and be reported during the shareholders’ meeting. The bonuses to directors are proposed by the Human Resource Department based on the considerations for the competitive environment and operational risks and in line with the corporate management policy and bonus plan, which are then sent to the Board of Directors for resolution after the Remuneration Committee evaluates the performance results and approves the proposal.

(Continued)

65

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

The remuneration to employees and managers consists of fixed salary and variable rewards. The fixed salary is the basic salary of the employees, and the variable rewards are mainly linked to the Company’s (or various business units’ ) operational performance and strategic goal achieving status. The rewards policy is proposed by the Human Resource Department based on the corporate salary policy and bonus plan. The bonus plan for the mangers has to be evaluated and approved by the Remuneration Committee, and thereafter, proposed to the Board of Directors for resolution.

(13) Other disclosures:

• (a) Information on significant transactions:

The followings were the information on significant transactions required by the Regulations for the Company:

(i) Loans to other parties:

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period	Ending balance	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral	Collateral	Individual funding loan limits	Maximum limit of fund financing
													Item	Value
1	PKS1	The Company	Other receivables	Y	327,475	317,197	317,197	0	Short-term loan to other parties	-	Operating capital	-	-	-	797,141	797,141

Note 1: After the approval from the Board of directors, the loan provided to an individual entity shall not exceed the net worth of PKS1 in the latest financial statements to its parent company, and also to subsidiaries wherein its parent owns 100%, directly and indirectly, of its voting shares. Also, the criterion for the amount available for financing is the same as that offered to an individual entity mentioned above.

• (ii) Guarantees and endorsements for other parties:

											(In Thou	sands of New Taiwan Dollars)	sands of New Taiwan Dollars)
No.	Name of guarantor	Counter-party of guarantee and endorsement		Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0 � 1	The Company � Tymphany Huizhou	PCH2 Primax Singapore TYM Acoustic HK	The subsidiary of Primax HK and Primax Tech. Subsidiary �	5,104,053 5,104,053 2,162,341	324,190 2,700,000 4,863	307,350 2,700,000 4,610	- 307,919 -	- - -	% 1.81 % 15.87 % 0.06	13,610,807 13,610,807 3,603,901	Y Y N	N N N	Y N N

Note 1: The amount of the guarantee to a company shall not exceed 30% of the Company’s net worth in the latest financial statements. The total amount of the guarantee to total company shall not exceed 80% of the Company’s net worth in the latest financial statements.

Note 2: The amount of the guarantee to a company shall not exceed 30% of the Tymphany Huizhou’s net worth in the latest financial statements. The total amount of the guarantee to total company shall not exceed 50% of the Tymphany Huizhou’s net worth in the latest financial statements.

(Continued)

66

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(iii) Securities held as of December 31, 2023 (excluding investment in subsidiaries, associates and joint ventures):

Company Ending balance holding securities	Security type and name	Relationship with company	Account		Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company Primax Tech. Tymphany Huizhou	Stocks (equities): Green Rich Technology Co., Ltd. Changing Information Technology Inc. Formosoft International Inc. Syntronix Corp. Ricavision International Inc. Grove Ventures L.P. Grove Ventures II, L.P. Grove Ventures III, L.P. Storm Ventures Fund VII, L.P. ThinLine Capital Fund II, L.P. Stocks: Echo. Bahn. Stocks: Shenzhen Mees Hi- Tech Co., Ltd.	- - - - - - - - - - - -	Financial assets at FVOCI � � � � � � � Other non-current asset � Financial assets at FVOCI Financial assets at FVOCI	359 223 11 7 917 - - - - - 400 556	- 11,093 - 250 - 158,070 97,145 23,727 5,040 7,008 302,333 - -	3.59 1.29 0.41 0.02 2.04 2.73 3.29 2.21 0.44 7.10 11.90 10.00	- 11,093 - 250 - 158,070 97,145 23,727 5,040 7,008 -

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of TW 300 million or 20% of the Company’s paid-in capital:None

• (v) Acquisition of individual real estate with amount exceeding the lower of TW 300 million or 20% of the Company’s issued capital: None

• (vi) Disposal of individual real estate with amount exceeding the lower of TW 300 million or 20% of the Company’s issued capital: None

• (vii) Related-party transactions for purchases and sales with amounts exceeding the lower of TW 100 million or 20% of the Company’s issued capital:

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company � � �	Primax Singapore PCH2 PKS1 PCQ1	Subsidiary The subsidiary of Primax HK � �	(Sale) Purchase Purchase Purchase	(10,935,549) 18,148,657 1,423,450 6,194,057	% (33) % 61 % 5 % 21	60 days � � �	Price agreed by both sides � � �	The same as general selling The same as general purchasing � �	1,823,757 (7,032,690) (672,574) (3,057,622)	25% (61)% (6)% (26)%

(Continued)

67

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
The Company � Primax Singapore � PCH2 � PKS1 PCQ1 Primax Thailand Polaris Tymphany Huizhou � � � � � Tymphany Dongguan � � � � � TYDC � � �	Polaris Primax Thailand The Company PCH2 The Company Primax Singapore The Company � � � TYM Acoustic HK TYM HK � TYM Acoustic Europe Tymphany Dongguan TYTH TYM HK � Tymphany Huizhou TYM Acoustic Europe TYM Acoustic HK TYDC TYM HK � Tymphany Dongguan TYM Acoustic HK	The subsidiary of Primax Tech. The subsidiary of Primax Singapore Parent The subsidiary of Primax HK The parent of Primax Cayman The subsidiary of the Company The parent of Primax Cayman � The parent of Primax Singapore The parent of Primax Tech. Subsidiary The subsidiary of TYM Acoustic HK � � Subsidiary The subsidiary of TYM Acoustic HK � � Parent The subsidiary of TYM Acoustic HK The subsidiary of Tymphany Huizhou Subsidiary The subsidiary of TYM Acoustic HK � Parent The subsidiary of Tymphany Huizhou	(Sale) Purchase Purchase Purchase (Sale) (Sale) (Sale) (Sale) (Sale) Purchase (Sale) (Sale) Purchase (Sale) Purchase (Sale) Purchase (Sale) (Sale) (Sale) (Sale) (Sale) (Sale) Purchase Purchase (Sale)	(3,450,949) 2,369,368 10,935,549 151,474 (18,148,657) (151,474) (1,423,450) (6,194,057) (2,369,368) 3,450,949 (2,902,735) (2,755,372) 107,004 (247,151) 147,433 (148,907) 318,190 (4,170,008) (147,433) (458,859) (1,094,421) (401,058) (1,211,762) 203,179 401,058 (2,538,905)	% (10) % 8 % 99 % 1 % (78) % (1) % (100) % (73) % (87) % 100 % (47) % (44) % 2 % (4) % 3 % (2) % 6 % (61) % (2) % (7) % (16) % (6) % (30) % 6 % 12 % (63)	90 days 60 days � � � � � � � 90 days 60 days � � � � � � � � � � � � � � �	Price agreed by both sides � � � � � � � � � � � � � � � � � � � � � � � � �	The same as general selling The same as general purchasing � � The same as general selling � � � � The same as general purchasing The same as general selling � The same as general purchasing The same as general selling The same as general purchasing The same as general selling The same as general purchasing The same as general selling � � � � � The same as general purchasing � The same as general selling	806,440 (309,592) (1,823,757) (33,986) 7,032,690 33,986 672,574 3,057,622 309,592 (806,440) 898,112 828,359 (42,943) 58,316 (36,950) 131,551 (99,430) 1,136,082 36,950 188,239 291,991 48,990 (931) (3,502) (48,990) 691,017	11% (3)% (84)% (2)% 89% -% 68% 79% 91% (100)% 46% 43% (4)% 3% (3)% 7% (7)% 65% 2% 11% 17% 3% -% (1)% (13)% 97%

(Continued)

68

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Name of company	Related party	Nature of relationship		Transaction details	Transaction details	Transaction details	Transactions wit from	h terms different others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/ Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
TYM Acoustic HK � � � � TYM Acoustic Europe � � TYM HK � � � � � � TYTH �	TYM Acoustic Europe Tymphany Huizhou Tymphany Dongguan TYDC Specialty TYM Acoustic HK Tymphany Huizhou Tymphany Dongguan Tymphany Huizhou � Tymphany Dongguan � TYDC � TYTH TYM HK Tymphany Huizhou	Subsidiary Parent The subsidiary of Tymphany Huizhou The subsidiary of Tymphany Dongguan The other related party Parent The parent of TYM Acoustic HK The subsidiary of Tymphany Huizhou The parent of TYM Acoustic HK � The subsidiary of Tymphany Huizhou � The subsidiary of Tymphany Dongguan � The subsidiary of TYM Acoustic HK � The parent of TYM Acoustic HK	Purchase Purchase Purchase Purchase (Sale) (Sale) Purchase Purchase Purchase (Sale) Purchase (Sale) Purchase (Sale) Purchase (Sale) Purchase	2,246,710 2,902,735 1,094,421 2,538,905 (570,633) (2,246,710) 247,151 458,859 2,755,372 (107,004) 4,170,008 (318,190) 1,211,762 (203,179) 3,838,067 (3,838,067) 148,907	% 26 % 33 % 13 % 29 % (6) % (100) % 14 % 27 % 23 % (1) % 35 % (3) % 10 % (2) % 32 % (98) % 4	60 days � � � � � � � � � � � � � � � �	Price agreed by both sides � � � � � � � � � � � � � � � �	The same as general purchasing � � � The same as general selling � The same as general purchasing � � The same as general selling The same as general purchasing The same as general selling The same as general purchasing The same as general selling The same as general purchasing The same as general selling The same as general purchasing	(608,020) (898,112) (291,991) (691,017) 70,606 608,020 (58,316) (188,239) (828,359) 42,943 (1,136,082) 99,430 931 3,502 (635,356) 635,356 (131,551)	(21)% (32)% (10)% (24)% 4% 100% (12)% (39)% (28)% 2% (38)% 5% -% -% (21)% 91% (12)%

(Continued)

69

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of TWD$100 million or 20% of the Company’s paid-in capital:

Name of company	Counter-party	Nature of relationship	Ending balance	Turnover rate		Overdue	Amounts received in subsequent period (note 1)	Allowance for bad debts
					Amount	Action taken
The Company � � � PCH2 � PKS1 � PCQ1 Primax Thailand Tymphany Huizhou � � Tymphany Dongguan � � TYDC TYM Acoustic HK TYM Acoustic Europe TYM HK � � TYAT TYTH	Primax Singapore Polaris PCH2 � The Company Primax Thailand The Company � � � TYM Acoustic HK TYM HK TYTH TYM HK TYM Acoustic Europe TYM Acoustic HK � Tymphany Huizhou TYM Acoustic HK Tymphany Dongguan � TYM Acoustic HK TYM HK �	Subsidiary The subsidiary of Primax Tech. The subsidiary of Primax HK � The parent of Primax Cayman The subsidiary of Primax Singapore The parent of Primax Cayman � � The parent of Primax Singapore Subsidiary The subsidiary of TYM Acoustic HK � � � The subsidiary of Tymphany Huizhou � Parent � The subsidiary of Tymphany Huizhou � � The subsidiary of TYM Acoustic HK �	1,823,757 806,440 452,242 (note 2) 73,234 7,032,690 241,682 672,574 317,197 3,057,622 309,592 898,112 828,359 131,551 1,136,082 188,239 291,991 691,017 242,498 608,020 99,430 1,157,861 279,433 335,490 635,356	5.23 6.18 3.74 (note 3) 2.79 (note 3) 2.38 (note 4) 2.23 12.69 3.09 2.89 2.15 3.82 2.24 5.75 3.19 (note 3) 3.92 2.15 (note 3) (note 3) (note 3) 6.96	- - - - - - - - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - - - - - - - -	1,322,353 806,440 130,966 29,791 2,916,857 53,522 132,787 - 443,626 - 458,410 213,616 18,774 342,413 34,471 235,544 125,517 242,156 439,898 99,430 305,753 257,207 150,245 -	- - - - - - - - - - - - - - - - - - - - - - - -

Note 1: Amounts collected as of February 6, 2024.

Note 2: The Company sells semi-finished products to its subsidiaries for processing and production. The finished products are then repurchased back by the Company and sold to the customers. The amount of semi-finished products sold in the year ended December 31, 2023 was $1,695,973, which was written off with related cost of goods sold, and not regarded as sales for the Company. Note 3: The receivables arise from service rendering for intercompany or material purchasing on behalf of intercompany or related parties. Note 4: The other receivables arise from intercompany loans.

(ix) Trading in derivative instruments: Please refer to note 6(b) in the consolidated financial statements for the year ended December 31, 2023.

(Continued)

70

PRIMAX ELECTRONICS LTD.

Notes to the Parent Company Only Financial Statements

(b) Information on investees:

The following is the information on investees for the year ended December 31, 2023 (excluding information on investees in Mainland China):

Name of investor	Name of investee	Location	Main businesses and products	Original i amo	nvestment unt	Balance as o December 31, 2	Balance as o December 31, 2	f 023	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2023	December 31, 2022	Shares (thousands)	Percentage of ownership	Carrying value
The Company � � � � � � �	Primax Cayman Primax Tech. Destiny BVI. Destiny Japan Diamond Gratus Tech. Primax AE Primax Singapore Total	Cayman Islands Cayman Islands Virgin Island Japan Cayman Islands USA Cayman Islands Singapore	Holding company Holding company Holding company Market development of and customer service for computer peripherals, mobile device components, and business devices Holding company Market development of and customer service for computer peripherals, mobile device components, and business devices Holding company Sale of computer peripherals and mobile device components	2,540,588 897,421 30,939 7,032 3,889,798 9,330 1,431,540 1,181,150 9,987,798	2,540,588 897,421 30,939 7,032 3,889,798 9,330 1,431,540 1,181,150 9,987,798	8,147,636 285,067 1,050 0.50 129,050 300 48,200 40,100	100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00	8,221,648 3,007,677 3,634 15,281 6,943,949 17,784 64,336 726,315 19,000,624	601,890 191,367 5,895 364 489,841 2,225 2,528 (10,672) 1,283,438	655,774 192,001 5,895 364 485,956 2,225 2,528 (9,303) 1,335,440	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2 Note 2
Primax Singapore	Primax Thailand	Thailand	Manufacturing and sale of computer peripherals, mobile device components, and business devices	1,162,928	1,162,928	1,244	99.99	730,196	(18,971)	(18,971)	Note 2
Primax Cayman	Primax HK	Hong Kong	Holding company and customer service	2,375,164	2,375,164	602,817	100.00	8,232,363	602,133	602,133	Note 2
Primax Tech.	Polaris	USA	Sale and purchase of computer peripherals, mobile device components, and business devices	52,680	52,680	1,600	100.00	445,691	13,087	13,087	Note 2
Diamond	TWEL	Cayman Islands	Holding company	4,083,950	4,083,950	192,251	100.00	7,004,331	569,336	489,764	Note 2
Primax AE	AIC	Cayman Islands	Holding company	1,356,995	1,356,995	30	37.00	-	(108,401)	-	Note 3
TWEL	TYM Singapore	Singapore	R&D, design, and sales of various speaker accessories, speakers, and their components, as well as holding business	-	-		100.00	-	-	-	Note 2 Note 4
Tymphany Huizhou	TYM Acoustic HK	Hong Kong	R&D, design, and sales of various speaker accessories, speakers, and their components, as well as holding business	1,592,954	1,592,954	418,090	100.00	3,015,340	170,294	170,294	Note 2

(Continued)

71

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of December 31, 2023	Balance as of December 31, 2023	Balance as of December 31, 2023	Net income (losses) of investee	Share of profits/losses of investee	Note
				December 31, 2023	December 31, 2022	Shares (thousands)	Percentage of ownership	Carrying value
TYM Acoustic HK � � � � �	TYM HK TYP TYM UK TYM Acoustic Europe Tymphany Acoustic TYTH	Hong Kong f a a USA a f c United Kingdom a s c Czech i s a Taiwan a s c Thailand s a a	Holding company; sales of, market development of and customer service or various speaker ccessories, speakers nd their components Market development of nd customer service or speakers and their omponents R&D and design of various speaker ccessories as well as peakers and their omponents Manufacturing, nstallation, and maintenance of various peaker accessories nd their components R&D and design of various speaker ccessories as well as peakers and their omponents Manufacturing and ales of various speaker ccessories, speakers, nd their components	76,280 (note 1) 15 (note 1) 15,631 653,796 48,318 725,091	76,280 (note 1) 15 (note 1) 15,631 653,796 48,318 725,091	144,395 0.50 400 187,800 5,000 7,789	100.00 100.00 100.00 100.00 100.00 99.99	865,131 50,869 39,749 975,943 353,858 672,676	(364,720) 5,534 1,418 44,454 21,989 63,101	(364,720) 5,534 1,418 44,454 21,989 63,101	Note 2 Note 2 Note 2 Note 2 Note 2 Note 2
TYM HK	TYML	USA s s c	Sales of various peaker accessories, peakers, and their omponents	6,628	6,628	200	100.00	7,995	(1,345)	(1,345)	Note 2

Note 1: The amount is the initial investment costs from the original stockholders prior to the acquisition of the Company through Diamond. Note 2: The subsidiary of the Company.

Note 3: The associate of the Company.

Note 4: As of December 31, 2023, there was no capital injection from the Company.

(c) Information on investment in mainland China:

(i) The names of investees in Mainland China, the main businesses and products, and other information:

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2023 (note 2)	Investmen	t flows	Accumulated outflow of investment from Taiwan as of December 31, 2023 (note 2)	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
PCH2 Destiny Beijing PKS1	Manufacturing and sale of computer peripherals, mobile device components, and business devices R&D of computer peripheral and business devices Production of computer peripheral products	1,935,108 38,333 847,319	Indirect investment through Primax Cayman and Primax Tech. Indirect investment through Destiny BVI. Indirect investment through Primax Cayman	1,685,001 32,243 675,576	- - -	- - -	1,685,321 32,272 676,170	527,890 5,895 13,947	100% 100% 100%	527,890 5,895 13,947	7,503,102 3,630 797,141	- - -

(Continued)

72

PRIMAX ELECTRONICS LTD. Notes to the Parent Company Only Financial Statements

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2023 (note 2)	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of December 31, 2023 (note 2)	Net income (losses) of the investee	Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
PCQ1 Tymphany Huizhou Tymphany Dongguan TYDC	Production of computer peripheral products Manufacturing, R&D, design and sale of various speaker accessories, speakers, and their components � �	828,084 1,642,541 153,675 86,788	Indirect investment through Primax Cayman Indirect investment through Diamond � �	614,160 3,961,332 15,354 -	- - - -	- - - -	614,700 3,964,815 15,368 -	233,597 747,956 285,824 157,901	100% 77.01% 77.01% 77.01%	233,597 575,996 220,113 121,600	2,351,492 5,550,780 845,933 283,323	- - - -

Note 1: The above information on the exchange rate is as follows: HKD:TWD3.9325 ; USD:TWD 30.7350; CNY:TWD 4.3394.

Note 2: The differences between the accumulated out flow of investments and paid in capital was derived from the currency exchange on translation, capital increase from retained earning and working capital.

• (ii) Limitation on investment in Mainland China:

Name of Company	Accumulated Investment in Mainland China as of December 31, 2023	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
The Company	7,442,764	8,712,498	None(note)

Note: The Company has received the Certificate issued by the Industrial Development Bureau, Ministry of Economic Affairs, allowing it to start the operating of its headquarters.

The above investment income (losses) in mainland China, except for PCH2, Destiny Beijing, PKS1 and PCQ1 which were based on financial statements audited by the Company’s auditors, others were based on the audited results of other auditors.

• (iii) Significant transactions:

The significant inter-company transactions with the subsidiaries in Mainland China, which were eliminated in the preparation of the consolidated financial statements for the year ended December 31, 2023, are disclosed in “ Information on significant transactions”.

• (d) Major shareholders:

Shareholding Shareholder’s Name	Shares	Percentage
Capital TIP Customized Taiwan Select High Divided Exchange Traded Fund	31,599,000	% 6.82

(14) Segment information:

Please refer to the Company’s consolidated financial statements for the year ended December 31, 2023, for details.

(Continued)

73

PRIMAX ELECTRONICS LTD.

Statement of cash and cash equivalents

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item Cash on hand Demand deposits and checking accounts Time deposits

Description Amount USD 15 ; Exchange rate 30.735 $ 453 CNY 37 ; Exchange rate 4.3394 160 HKD 5 ; Exchange rate 3.9325 21 JPY 110 ; Exchange rate 0.2179 24 EUR 4 ; Exchange rate 34.1040 145 TWD 50 50 USD 101,491 ; Exchange rate 30.735 3,119,334 CNY 2,093 ; Exchange rate 4.3394 9,082 HKD 1,333 ; Exchange rate 3.9325 5,243 JPY 8,233 ; Exchange rate 0.2179 1,794 EUR 12 ; Exchange rate 34.1040 426 TWD 88,376 88,376 USD 50,000 ; Exchange rate 30.735 (2023.01.15~2023.02.20, interest rate 5.53%~5.93%) 1,536,750 CNY 15,400 ; Exchange rate4.3394 (due on 2023.01.10, interest rate 2.35%) 66,827 TWD 650,000 (2023.01.15~2023.01.29, interest rate 1.25%~1.39%) 650,000 $ 5,478,685

74

PRIMAX ELECTRONICS LTD.

Statement of accounts receivable

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item Accounts receivable: Corporation P Corporation B Corporation C Other (individual amount not exceeding 5%) Total Less: Allowance for doubtful accounts Net accounts receivable	Description Amount Operating revenue $ 1,622,446 � 268,732 � 253,548 � 2,009,082 4,153,808 (11,112) $ 4,142,696

Statement of accounts receivable from related parties

Item Accounts receivable from related parties: Primax Singapore Polaris PCH2 Other (individual amount not exceeding 5%) Total Net accounts receivable	Description Amount $ 1,823,757 806,440 452,242 86,673 3,169,112 $ 3,169,112

75

PRIMAX ELECTRONICS LTD.

Statement of other receivables

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item Other receivables－related parties Business tax refund receivables Other (individual amount not exceeding 5%) Total	Description Amount Payable on behalf of related parties $ 110,308 29,028 10,970 $ 150,306

Statement of inventories

Item		Cost	Net realizable value	Net realizable value
Finished goods and merchandises	$	2,264,887		2,592,579
Less: Provision for finished goods and merchandises		(51,678)
Subtotal		2,213,209
Semi-finished products		57,889		57,403
Less: Provision for semi-finished products		(538)
Subtotal		57,351
Raw material		437,525		433,106
Less: Provision for raw material		(6,462)	$	3,083,088
Subtotal		431,063
Net amount	$	2,701,623

76

PRIMAX ELECTRONICS LTD.

－ Statement of changes in financial assets measure at fair value through profit and loss non-current

From January 1 to December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Name of investee Storm Venture Fund VII, L.P. Thin Line Capital Fund II, L.P.	Beginning Balance Number of shares Amount - $ 2,662 - - $ 2,662	Additions Number of shares Amount - 3,097 - 7,650 10,747	Disposal Number of shares Amount - - - - -	Other adjustments (note 1) Number of shares Amount - (719) - (642) (1,361)	Ending Balance Pledged Number of shares Amount or guaranteed - 5,040 None - 7,008 � 12,048
		Number of shares - -	Number of shares - -	Number of shares - -

Note 1:Other adjustments comprise unrealized gains or losses of financial assets at fair value through profit and loss.

77

PRIMAX ELECTRONICS LTD.

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

From January 1 to December 31, 2023

(Expressed in thousands of New Taiwan Dollars and Shares)

Name of investee Green Rich Technology Co., Ltd. Changing Information Technology Inc. Formosoft International Inc. Syntronix Corp. Ricavision International Inc. Grove Ventures, L.P Grove Ventures II, L.P Grove Ventures III, L.P	Beginning Balance Number of shares Amount 359 $ - 223 7,535 11 - 7 250 917 - - 183,766 - 85,267 - 11,853 $ 288,671	Additions Number of shares Amount - - - - - - - - - - - 1,377 - 10,773 - 15,269 27,419	Disposal Number of shares Amount - - - - - - - - - - - - - - - - -	Other adjustments (note 1) Number of shares Amount - - - 3,558 - - - - - - - (27,073) - 1,105 - (3,395) (25,805)	Ending Balance Pledged Number of shares Amount or guaranteed 359 - None 223 11,093 � 11 - � 7 250 � 917 - � - 158,070 � - 97,145 � - 23,727 � 290,285
		Number of shares - - - - - - - -	Number of shares - - - - - - - -	Number of shares - - - - - - - -

Note 1:Other adjustments comprise unrealized gains or losses of financial assets at fair value through other comprehensive income.

78

PRIMAX ELECTRONICS LTD.

Statement of changes in investment accounted for using equity method

From January 1 to December 31, 2023

(Expressed in thousands of New Taiwan Dollars and Shares)

Name of investee Primax Industries (Cayman Holding) Ltd. Primax Technology (Cayman Holding) Ltd. Destiny Technology Holding Co., Ltd Primax Destiny Co., Ltd. Diamond (Cayman) Holdings Ltd. Gratus Technology Corp. Primax AE (Cayman) Holdings Ltd. Primax Electronics (Singapore) Pte. Ltd	Beginning Balance Number of shares Amount 8,147,636 $ 7,688,347 285,067 2,850,752 1,050 (2,169) 0.5 15,816 129,050 6,477,691 300 15,564 48,200 61,809 40,100 722,673 $ 17,830,483	Additions Number of shares Amount - - - - - - - - - - - - - - - - -	Disposal Number of shares Amount - - - - - - - - - - - - - - - - -	Other adjustments Number of shares Amount (note1) - 533,301 - 156,925 - 5,803 - (535) - 466,258 - 2,220 - 2,527 - 3,642 1,170,141	Ending Balance Number of shares Percentage of holding shares Amount 8,147,636 % 100.00 8,221,648 285,067 % 100.00 3,007,677 1,050 % 100.00 3,634 0.5 % 100.00 15,281 129,050 % 100.00 6,943,949 300 % 100.00 17,784 48,200 % 100.00 64,336 40,100 % 100.00 726,315 19,000,624	Ending Balance Number of shares Percentage of holding shares Amount 8,147,636 % 100.00 8,221,648 285,067 % 100.00 3,007,677 1,050 % 100.00 3,634 0.5 % 100.00 15,281 129,050 % 100.00 6,943,949 300 % 100.00 17,784 48,200 % 100.00 64,336 40,100 % 100.00 726,315 19,000,624	Market value or book value Pledged of guaranteed 8,241,194 None 3,029,311 � 3,634 � 15,281 � 7,013,093 � 17,784 � 64,336 � 735,728 � 19,120,361
		Number of shares - - - - - - - -	Number of shares - - - - - - - -	Number of shares - - - - - - - -	Number of shares 8,147,636 285,067 1,050 0.5 129,050 300 48,200 40,100	Percentage of holding shares % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00

Note 1: Adjustments under equity method valuation.

79

PRIMAX ELECTRONICS LTD.

Statement of changes in property, plant and equipment

From January 1 to December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Please refer to note 6(g) for property, plant and equipment.

Statement of changes in right-of-use assets

Please refer to note 6(h) for right-of-use assets.

Statement of changes in investment property

Please refer to note 6(i) for investment property.

Statement of changes in intangible assets

Please refer to note 6(j) for intangible assets.

80

PRIMAX ELECTRONICS LTD.

Statement of notes and accounts payables

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item Accounts payable Supplier A Supplier B Supplier C Supplier D Other (individual amount not exceeding 5%) Total	Description Amount Purchase $ 64,396 � 57,265 � 43,895 � 25,588 � 309,551 $ 500,695

Statement of accounts payables from related parties

Item Accounts payable PCH PCQ PKS Other (individual amount not exceeding 5%) Total	Description Amount $ 7,032,690 3,057,622 672,574 309,592 $ 11,072,478

81

PRIMAX ELECTRONICS LTD.

Statement of long-term borrowings

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Bank E.SUN Bank	Description Secured bank loans	Ending Balance Contract Period Range of interest rate $ 707,979 2021.11.22~ 2028.07.15 1.1%~1.65% Statement of other payables	Credit Line Pledged on guaranteed 1,800,000 Yes

Item Expense payables Others (note) Total

Description Amount Research and development expense for projects and inspection $ 1,092,611 Taxes related to income and tariff 357,675 Intercompany loans 317,197 Employee and director remuneration 217,708 Accounts payable for pensions, labor and health insurance and employee benefits 108,380 Accounts payable for construction projet, service, lawyer, travel expense and freight expense 182,564 $ 2,276,135

Note : individual amount not exceeding 5%

82

PRIMAX ELECTRONICS LTD.

Statement of other current liabilities

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item	Description		Amount
Remedy received in advance		$	750,775
Contract liabilities	Advance sales receipts－non-related parties		160,241
Advance receipts for purchasing inventory			62,188
Other (note)			63,586
Total		$	1,036,790
Note : individual amount not exceeding 5%

Statement of other non-current liabilities

Item		Amount
Advance receipts on behalf of non-related	$	875,134
parties
Deferred tax liabilities－non-current		353,782
Accrued pension liabilities		55,772
Other (note)		5,191
	$	1,289,879

Note : individual amount not exceeding 5%

83

PRIMAX ELECTRONICS LTD.

Statement of lease liabilities

December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item	Description Buildings Vehicles Buildings Vehicles	Lease Term 2024.06~2035.12 2024.06~2026.06 2028.02~2035.12 2025.02~2026.06	Discount rate	Ending Balance Note $ 89,013 3,435 $ 92,448 $ 1,086,787 4,109 $ 1,090,896
Lease liabilities－ current Lease liabilities－ Non-current			2.13%~2.73% 1.53%~2.33% 2.13%~2.67% 2.2%~2.33%

Statement of operating revenue

From January 1 to December 31, 2023

Item Operating revenue: Computer peripherals Non-Computer peripherals Less: Sales returns Sales discounts Net service revenue Net operating revenue	Quantity (in thousands) Amount 60,744 $ 21,382,347 26,665 12,903,430 34,285,777 (328,121) (1,318,592) 32,639,064 820,722 $ 33,459,786

84

PRIMAX ELECTRONICS LTD.

Statement of operating costs

From January 1 to December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item Raw material On January 1, 2023 Add: Purchases of raw materials Gain on physical inventories Less: Raw materials on December 31, 2023 Sales of raw material Losses on disposal of raw materials Raw materials used Manufacturing overhead Manufacturing cost Add: Semi-finished products on January 1, 2023 Purchases of semi-finished products Less: Semi-finished products on December 31, 2023 Sales of semi-finished products Losses on disposal of semi-finished products Cost of finished goods Add: Finished goods and merchandises on January 1, 2023 Purchases of finished goods and merchandises Less: Finished goods and merchandises on December 31, 2023 Losses on physical finished goods and merchandises Losses on disposal of finished goods Cost of finished goods and merchandises Service costs Sales of raw material and semi-finished products Gain on inventory valuation, obsolescence and loss on physical inventories Loss on disposal of inventories Operating Costs

Amount $ 337,566 1,812,380 152 (437,525) (33,756) (2,371) 1,676,446 230,762 1,907,208 56,097 477,855 (57,889) (211,709) (2,906) 2,168,656 2,445,928 27,504,686 (2,264,887) (1,574) (15,664) 29,837,145 (127,224) 245,465 (7,276) 20,941 $ 29,969,051

85

PRIMAX ELECTRONICS LTD.

Statement of selling, administrative, research and development expenses

From January 1 to December 31, 2023

(Expressed in thousands of New Taiwan Dollars)

Item Salaries Depreciation and amortization expense Service expense Insurance expense Storage expense Other expense (note) Total	Selling expenses $ 280,707 20,472 70,405 46,909 58,604 134,827 $ 611,924	Administrative expenses 397,590 35,960 56,471 21,045 - 87,215 598,281	Research and development expenses
			910,429 94,213 19,447 68,713 - 180,920
			1,273,722

Note : individual amount not exceeding 5%