RECTRON - Annual Report 2023 | FinancialReports.eu

Stock Code：2302

Rectron Ltd.

Consolidated financial statements

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

Address: No. 71, Zhongshan Rd., Tucheng Dist., New Taipei City, Taiwan Telephone:886-2-28801122

The independent auditors’ report and the accompanying parent company only consolidated 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 consolidated financial statements, the Chinese version shall prevail.

Contents 1.Cover Page 2.Table of Contents 3.Representation Letter 4.Independent Auditors’ Report 5.Consolidated Balance Sheets 6.Consolidated Statement of Comprehensive Income 7.Consolidated Statement of Changes in Equity 8.Consolidated Statement of Cash Flows 9.Notes to the Consolidated Financial Statements (1) Company history (2)Approval date and procedures of the Consolidated financial statements (3) New standards, amendments and interpretations adopted (4)Summary of significant accounting policies (5)Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8)Assets pledged as security (9) Commitments and contingencies (10)Losses due to major disasters (11)Subsequent events (12)Other (13)Other disclosures  Information on significant transactions  Information on investees  Information on investment in Mainland China  Major shareholders (14)Segment information	Page
	1 2 3 4 5 6 7 8 9 9 9~10 10~20 20~21 22~46 46~47 48 48 48 48 48 48~51 51 51 51 52~53

Contents
1.Cover Page
2.Table of Contents
3.Representation Letter
4.Independent Auditors’ Report
5.Consolidated Balance Sheets
6.Consolidated Statement of Comprehensive Income
7.Consolidated Statement of Changes in Equity
8.Consolidated Statement of Cash Flows
9.Notes to the Consolidated Financial Statements
(1) Company history
(2)Approval date and procedures of the Consolidated financial statements
(3) New standards, amendments and interpretations adopted
(4)Summary of significant accounting policies
(5)Significant accounting assumptions and judgments, and major sources of
estimation uncertainty
(6) Explanation of significant accounts
(7) Related-party transactions
(8)Assets pledged as security
(9) Commitments and contingencies
(10)Losses due to major disasters
(11)Subsequent events
(12)Other
(13)Other disclosures
 Information on significant transactions
 Information on investees
 Information on investment in Mainland China
 Major shareholders
(14)Segment information

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Representation Letter

The entities that are required to be included in the combined financial statements of Rectron LTD. as of and for the year ended December 31, 2023under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with International Financial Reporting Standards No. 10, "Consolidated Financial Statements. " endorsed by the Financial Supervisory Commission of the Republic of China. In addition, the information required to be disclosed in the combinedfinancialstatementsisincludedintheconsolidatedfinancialstatements.Consequently, Rectron LTD. Subsidiaries do not prepare a separate set of combined financial statements.

Company name: Rectron LTD. Corporation Chairman: Lin I-Chin Date: March15, 2024

Independent Auditors’ Report

To the Board of Directors of RECTRON LTD. Company ：

Opinion

We have audited the consolidated financial statements of RECTRON LTD (“the Group”), which comprise the statement of balance sheets as of December 31,2022 and 2023, the statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2022 and 2023, 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 of Audit Opinion

We, as auditors, have conducted our audit work in accordance with the Regulations Governing the Audit Signatures of Certified Public Accountants and the Auditing Standards. Our CPA s responsibility under these standards will be further explained in the paragraph of responsibility of the accountant for examining the consolidated financial statements. The personnel of our accounting firm, who are subject to independence regulations, have maintained independence in accordance with the Code of Ethics for Professional Accountants and fulfilled other responsibilities prescribed by the regulations. They have maintained a professional and objective stance in relation to Rectron LTD. and its subsidiaries. We believe that we have obtained adequate and appropriate audit evidence to form the basis of our audit opinion.

Key audit matters

The key audit matters refer to those matters that, in the auditor's professional judgment, are of most significance in the audit of the consolidated financial statements of Rectron Ltd. for the year ended 2023. Such items have been taken into consideration in the process of auditing the overall financial reports and forming audit opinions. The accountant does not express opinions on such items separately. Our CPA determined to address the following key auditing matters in the accountant’s report:

Revenue Recognition

Please refer to Note 4 (m) of the consolidated financial statements for details on the accounting policy for revenue recognition. Additionally, refer to Note 6 (n) of the consolidated financial statements for a breakdown of revenue by customer contracts.

Key Audit Matters

Rectron LTD. primarily derives its revenue from the manufacturing and sale of various rectifiers and other semiconductor components. The risk lies in the accuracy of revenue recognition. The Group's viability and ongoing operations depend on a consistent inflow of cash generated from revenue. Therefore, the Group's business strategy and operational management start with revenue. Consequently, testing revenue recognition is one of the key assessment areas for auditors in conducting the financial statement audit of Rectron LTD.

Auditing procedures performed:

The main audit procedures performed by the auditor for the above-mentioned key audit matters include testing the controls and effectiveness of the sales and cash collection cycle, as well as sampling the accuracy of recognizing sales revenue around the balance sheet date, which involves verifying warehouse dispatch records and comparing contractual terms. The auditor also evaluates whether control over the goods has been transferred at the appropriate recognition point.

2. Inventory valuation

Regarding inventory valuation, please refer to Note 4 (h) "Inventory" for the accounting policy. For the accounting estimates and assumptions related to inventory valuation and their uncertainties, please refer to Note 5 (b). Further explanation on the assessment of inventory valuation can be found in Note 6 (d) "Inventory" of the consolidated financial statements. Key Audit Matters

The valuation of inventory for Rectron Ltd. is subject to the risk of cost exceeding its net realizable value due to fluctuations in international raw material prices and market supply and demand conditions, which may result in significant fluctuations in product selling prices and sales volumes. Therefore, the testing of inventory valuation is considered as one of the important assessment matters in the auditor's examination of Rectron Ltd.'s consolidated financial statements.

Auditing procedures performed:

The main audit procedures performed by the auditor for the above-mentioned key audit matters include reviewing the inventory aging report, analyzing the changes in inventory aging over different periods, assessing the reasonableness of Rectron Ltd.'s accounting policies and their implementation, conducting trend analysis on the treatment of obsolete inventory, understanding the basis and methods of inventory valuation, and comparing relevant variances to identify any significant abnormalities.

Other Matters

We did not audit the consolidated financial statements of certain investees, which represented investments in other entities accounted for using the equity method of the Group. Those statements were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those investees, is based solely on there ports of other auditors. The investments in those investees accounted for using the equity method constituting 3% and 4% of total assets at December 31, 2023 and 2022, respectively, and the related share of profit of subsidiaries, associates and joint ventures accounted for using the equity method constituting 11% and 16% of total profit before tax for the years then ended respectively.

Rectron Ltd. has prepared its parent-company-only financial statements as of and for the years ended December 31, 2023 and 2022, on which we have issued an unmodified opinion with other matters paragraph.

Responsibilities of Management and Those Charged with Governance for the consolidated financial statements

The management is responsible for the preparation of the appropriate consolidated financial statements, which are in accordance with the Financial Reporting Standards for Issuers of Securities and approved and issued by the Financial Supervisory Commission, as well as the applicable International Financial Reporting Standards, International Accounting Standards, Interpretations, and Interpretive Bulletins. They are also responsible for maintaining necessary internal controls related to the preparation of the consolidated financial statements to ensure that they are free from material misstatement caused by fraud or error.

In preparing the consolidated financial statements, the management's responsibility also includes assessing the ability of the Rectron Ltd. to continue as a going concern, making relevant disclosures, and adopting the going concern basis of accounting unless there are intentions to liquidate the Rectron Ltd. or cease its operations, or unless there are no other practical alternative courses of action other than liquidation or cessation.

The governance body of Rectron Ltd., including the Audit Committee, has the responsibility to oversee the financial reporting process.

Auditor’s Responsibilities for the Audit of the consolidated financial statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and performed audit procedures responsive to those risks, and obtained 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.
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 Rectron LTD. internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
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 Rectron LTD. ability to continue as a going concern. If we determine that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this consolidated financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other

matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

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

The engagement partners on the audit resulting in this independent auditors’ report are Shih-Chin Chih and Li-Chen Lai.

KPMG

Taipei, Taiwan (Republic of China) March 15, 2024

Notes to Readers

The accompanying Parent Company Only Consolidated financial statements are intended only to present the financial position, financial performance and its 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 review such Parent Company Only Consolidated financial statements are those generally accepted and applied in the Republic of China.

The independent Auditors’ Report and the accompanying Parent Company Only Consolidated 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 Consolidated financial statements, the Chinese version shall prevail.

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron LTD.

Consolidated Balance Sheets

December 31,2023and 2022 (Expressed in Thousands of New Taiwan Dollar)

		December 31,	2023			December 31, 2022	December 31, 2022
		Amount		%		Amount	%
	Assets
	Current assets:
1100	Cash and cash equivalents (note 6(a))	$ 561,703		24		245,962	12
1110	Current financial assets at fair value through profit	34,517			1	25,657	1
	or loss (note 6(b))
1150	Trade notes receivable net (note 6(c) and (n))	417				2,083
1170	Trade receivables net (note 6(c), and (o))	90,374		4		156,377	7
1200	Other receivables	1,622		-		3,178	-
1220	Total current tax assets	307		-		1,679	-
130X	Inventories (note 6(d))	135,578		6		141,704	7
1410	Prepayments(Notes 7)	6,883		-		23,375	1
1479	Other current assets	3,261		-		2,166	-
		834,662		35		602,181	28
	Non-current assets:
1517	Non-current financial assets at fair value through	57,636		2		54,229	3
	other comprehensive income (note 6(b))
1600	Property, plant and equipment (note 6(f) 7,8 and 9)	458,587		20		497,837	23
1755	Right-of-use assets (note 6(g))	15,759		1		15,603	1
1760	Investment property (note 6(h) , 7 and 8)	963,889		42		975,678	45
1840	Deferred tax assets(note 6(k))	-			-	1,321	-
1990	Other non-current assets	3,769		-		7,170	`-`
		1,499,640		65		1,551,838	72
	Total assets	$ 2,334,302	100			2,154,019	100

Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(i)) 2130 Current contract liabilities (note 6(o) and 7) 2170 Trade payables 2200 Other payables(Note 7) 2230 Current tax liabilities 2280 Current lease liabilities(Note 7) 2300 Other current liabilities(Note 9) Non-current liabilities 2580 Non-current lease liabilities(note 7 ) 2640 Net defined benefit liability, non-current (note 6(j)) 2570 Deferred tax liabilities(note 6(k)) 2600 Other non-current liabilities (note 7 ) Total liabilities Equity (notes 6(l)): 3110 Ordinary shares 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3351 Retained earnings 3400 Other equity Total equity Total liabilities and equity	December 31, 2023 Amount % $ 15,000 1 68 - 75,697 3 32,533 1 6,915 - 4,419 - 351,322 15 485,954 20 3,102 - 2,209 - 62,684 3 4,756 - 72,751 3 558,705 23 1,663,029 71 9 - 51,988 2 60,074 3 87,640 4 (87,143) (3) 1,775,597 77 $ 2,334,302 100	December 31, 2023 Amount % $ 15,000 1 68 - 75,697 3 32,533 1 6,915 - 4,419 - 351,322 15 485,954 20 3,102 - 2,209 - 62,684 3 4,756 - 72,751 3 558,705 23 1,663,029 71 9 - 51,988 2 60,074 3 87,640 4 (87,143) (3) 1,775,597 77 $ 2,334,302 100		December 31, 2022	December 31, 2022
	Amount $ 15,000 68 75,697 32,533 6,915 4,419 351,322 485,954 3,102 2,209 62,684 4,756 72,751 558,705 1,663,029 9 51,988 60,074 87,640 (87,143) 1,775,597 $ 2,334,302				Amount % 30,000 1 1,941 - 129,538 6 36,063 2 25,821 1 3,018 - 1,266 - 227,647 10 3,768 - 3,509 - 62,679 3 7,376 - 77,332 3 304,979 13 1,663,029 78 9 - 34,364 2 34,924 2 176,788 8 (60,074) (3) 1,849,040 87 2,154,019 100

	$

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron LTD.

Consolidated Statement of Comprehensive Income

For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollar, except for Earnings per Common Share)

4000 Operating revenue(notes 6(n)and 7) $ 5000 Operating costs (notes 6(d)and6(j)) Gross profit from operations Operating expenses (notes6(c)`、`6(j)`、`6(o)and 12): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses Total operating expenses Net operating income Non-operating income and expenses(notes 6(p)and 7): 7010 Other income 7020 Other gains and losses 7050 Finance costs Total non-operating income and expenses Profit before tax 7950 Total tax expense (note 6(l)) Profit 8300 Other comprehensive income (loss): 8310 Components of other comprehensive income that will not be reclassified to profit or loss: 8311 Gains (losses) on remeasurements of defined benefit plans 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Income tax related to components of other comprehensive income that will not be reclassified to profit or loss Components of other comprehensive income that will not be reclassified to profit or loss 8360 Components of other comprehensive income (loss) that will be reclassified to profit or loss: 8361 Exchange differences on translation 8367 Unrealized gains (losses) from investments in debt instruments measured at fair value through other comprehensive income 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss Total components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income, net 8500 Comprehensive income Profit, attributable to: 8610 Profit, attributable to owners of parent Comprehensive income attributable to: 8710 Comprehensive income, attributable to owners of parent Earnings per common share (expressed in dollars) (note 6(m)) 9750 Basic earnings per share $ 9810 Diluted earnings per share $		For the three months ended December 2023 % 2022 716,545 100 877,633 459,141 64 533,784 257,404 36 343,849 46,591 6 42,625 127,052 18 119,962 12,463 2 10,522 186,106 26 173,109 71,298 10 170,740 5,539 1 2,208 30,212 4 32,834 (594) - (1,137) 35,157 5 33,905 106,455 15 204,645 19,586 3 28,545 86,869 12 176,100 (201) 144 (454) 440 - - - (655) - 584 (27,951) (4) (14,105) 1,336 - (11,485) - - - (26,615) (4) (25,590) (27,270) (4) (25,006) $ 59,599 8 151,094 $ 86,869 12 176,100 $ 59,599 8 151,094 0.52 0.52	For the three months ended December 2023 % 2022 716,545 100 877,633 459,141 64 533,784 257,404 36 343,849 46,591 6 42,625 127,052 18 119,962 12,463 2 10,522 186,106 26 173,109 71,298 10 170,740 5,539 1 2,208 30,212 4 32,834 (594) - (1,137) 35,157 5 33,905 106,455 15 204,645 19,586 3 28,545 86,869 12 176,100 (201) 144 (454) 440 - - - (655) - 584 (27,951) (4) (14,105) 1,336 - (11,485) - - - (26,615) (4) (25,590) (27,270) (4) (25,006) $ 59,599 8 151,094 $ 86,869 12 176,100 $ 59,599 8 151,094 0.52 0.52	For the three months ended December 2023 % 2022 716,545 100 877,633 459,141 64 533,784 257,404 36 343,849 46,591 6 42,625 127,052 18 119,962 12,463 2 10,522 186,106 26 173,109 71,298 10 170,740 5,539 1 2,208 30,212 4 32,834 (594) - (1,137) 35,157 5 33,905 106,455 15 204,645 19,586 3 28,545 86,869 12 176,100 (201) 144 (454) 440 - - - (655) - 584 (27,951) (4) (14,105) 1,336 - (11,485) - - - (26,615) (4) (25,590) (27,270) (4) (25,006) $ 59,599 8 151,094 $ 86,869 12 176,100 $ 59,599 8 151,094 0.52 0.52	For the three months ended December 2023 % 2022 716,545 100 877,633 459,141 64 533,784 257,404 36 343,849 46,591 6 42,625 127,052 18 119,962 12,463 2 10,522 186,106 26 173,109 71,298 10 170,740 5,539 1 2,208 30,212 4 32,834 (594) - (1,137) 35,157 5 33,905 106,455 15 204,645 19,586 3 28,545 86,869 12 176,100 (201) 144 (454) 440 - - - (655) - 584 (27,951) (4) (14,105) 1,336 - (11,485) - - - (26,615) (4) (25,590) (27,270) (4) (25,006) $ 59,599 8 151,094 $ 86,869 12 176,100 $ 59,599 8 151,094 0.52 0.52	31 % 100 61 39 5 14 1 20 19 - 4 - 4 23 3 20 - - - - (2) (1) - (3) (3) 17















						20
						17
						1.06
						1.06

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron LTD.

Consolidated Statement of Changes in Equity

For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollar)

						Attributable	Attributable	to owners ofparent	to owners ofparent	to owners ofparent		Total Total equity	Total Total equity
Ordinary share		Capital surplus				Retained earnings		Total			Other equity
				Legal reserve		Special reserve			Exchange differences on translation of foreign financial statements		Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income 6,124 - (11,045) (11,045) - - - (4,921) - 882 882 - - - (4,039)
$	1,663,029		9		25,812		58,466 - - - - (23,542) - 34,924 - - - - 25,150 - 60,074	85,554		(41,048)		(34,924) - (25,150) (25,150) - - - (60,074) - (27,069) (27,069) - - - (87,143)	1,797,946
	- -		- -		- -			176,100 144		- (14,105)			176,100 (25,006)
	-		-		-			176,244		(14,105)			151,094
	- - -		- - - 9		8,552 -			(8,552) 23,542 (100,000)		- - - (55,153)			- - (100,000)
$	1,663,029				34,364			176,788					1,849,040
	- -		- -		- -			86,869 (201)		- (27,951)			86,869 (27,270)
	-		-		-			86,668		(27,951)			59,599
	- - -		- - -		17,624 - -			(17,624) (25,150) (133,042)		- - -			- - (133,042)
$	1,663,029		9		51,988			87,640		(83,104)			1,775,597

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron LTD.

Consolidated Statement of Cash Flows

For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

For the Years Ended	For the Years Ended	December 31,	December 31,	December 31,
	2023	2022
$	106,455 50,949 3,708 (3,616) 594 (4,948) (591) (9) (11,828) 2,233 75		204,645 53,040 4,749 (2,165) 1,137 (1,698) (510) 173 5,508 (2,462) -
	36,567		57,772
	1,666 69,619 1,358 6,126 16,492 (1,095)		423 25,233 5,761 34,739 (16,321) 1,421
	94,166 (1,873) (53,841) (3,530) 52 (1,501)			51,256
				(56) 18,244 2,732 165 (1,930)
	(60,693)			19,155
	33,473 70,040 176,495 3,167 591 (594) (36,093)			70,411
			128,183
			332,828 1,537 219 (1,182) (4,446)
	143,566 (3,176) (30,146) 33,114 (6,144) 78 4,888 (307) 356,849 - 355,156 50,000 (65,000) - (2,620) (3,290) (133,042) (153,952)		328,956
			(3,260) (64,690) 34,216 (32,474) 1,072 - (1,287) - 291
			(66,132)
		65,000 (152,000) 345 - (2,701) (100,000)
		(189,356)
$	(29,029) 315,741 245,962 561,703	(14,970) 58,498 187,464
		245,962

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron Ltd.

Notes to the Consolidated financial statements

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar, except for Earnings per Share Information and Unless Otherwise Specified)

1. Company history

Rectron Ltd. (the “Company”) was established and approved by the Ministry of Economic Affairs on January 23, 1976. The registered address is No. 71, Zhongshan Road, Tucheng District, New Taipei City. The Group was originally named "Rectron Precision Electronics Industry Co., Ltd." and changed its name to "Rectron Ltd." on June 29, 2000, as resolved by the shareholders' meeting and approved by the Ministry of Economic Affairs.

The Group and its subsidiaries (together referred to as the “Group”)main business operations include the manufacture and sale of various rectifiers, other semiconductor components, rental and sale of real estate, trading of wines, and manufacture and sale of medical equipment.

2. Approval date and procedures of the Parent Company Only Consolidated financial statements

The accompanying non-consolidated consolidated financial statements were authorized for issue by the Board of Directors on March15, 2024.

3. New standards and interpretations not yet 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 Group has initially adopted the (following) new amendments, which do not have a significant impact on its Parent Company Only Consolidated 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 Group has initially adopted the (following) new amendment, which do not have a significant impact on its consolidated financial statements, from May 23, 2023 ：
Amendments to IAS 12 “International Tax Reform—Pillar Two Model Rules”
(b) The impact of IFRS endorsed by the FSC but not yet effective
The Group 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 consolidated 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 Group does not expect the (following) other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on the Group Consolidated financial statements:
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or

See accompanying notes to consolidated financial statements.

Joint Venture”

IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
Amendments to IAS21“Lack of Exchangeability”

4. Summary of significant accounting policies

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C..

(b) Basis of consolidation

i. Basis of measurement

The non-consolidated consolidated financial statements have been prepared on the historical cost basis except for the following material items in the balance sheets:

1) Financial instruments measured 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;
3) The net defined benefit liability is recognized as the present value of the defined benefit obligation less the fair value of plan assets.

ii. Functional and presentation currency

The functional currency of each Company entities is determined based on the primary economic environment in which the entities operate. The non-consolidated consolidated financial statements are presented in New Taiwan Dollar, which is the Group’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(c) Basis of consolidation

i.Principles of preparation of the consolidated financial statements

The consolidated financial statements comprise The Group and subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances. Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

See accompanying notes to consolidated financial statements.

ii. List of subsidiaries in the consolidated financial statements:

Name of Name of investor subsidiary	Principal activity Sales of rectifiers, etc. Electronic components Sales of rectifiers, etc. Electronic components Wholesale of tobacco and alcohol products and manufacturing and sales of medical equipment. Manufacturing and sales of rectifiers and other electronic components.	Shareholding December 31, 2023 December 31, 2022 Description 100% 100% Subsidiaries with direct ownership of voting rights exceeding 50% of the total shares issued. 100% 100% Subsidiaries with direct ownership of voting rights exceeding 50% of the total shares issued. 100% 100% Subsidiaries with direct ownership of voting rights exceeding 50% of the total shares issued. 100% 100% Subsidiaries with indirect ownership of voting rights exceeding 50% of the total shares issued.
The Group Rectron (China) Limited (Rectron China) The Group RECTRON ELECTRONIC ENTERPRISES,INC (REEI) The Group CHU-TING ENTERPRISE CO., LTD. (Chu-Ting) Rectron (China) Limited Zhejiang Rectron Electronic Co.,LTD. (Zhejiang Rectron)

iii. List of subsidiaries which are not included in the consolidated financial statements: None.

(d) Foreign currency

i. Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group entities 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 currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies 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 those differences relating to the following, which are recognized in other comprehensive income:

(i) an investment in equity securities designated as at fair value through other comprehensive income; (ii) a financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

(iii) qualifying cash flow hedges to the extent that the hedges are effective.

ii. Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange 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 Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is See accompanying notes to consolidated financial statements.

reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes 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, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(e) 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.
It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for the purpose of trading;
It is expected to be realized within twelve months after the reporting period; or
The asset is cash or a cash equivalent (as defined in IAS 7) 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.

An entity shall classify a liability as current when:

It is expected to be settled in the normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within twelve months after the reporting period; or
The Group 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.
(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash 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 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.

(g) Financial instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group 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, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(1) Financial assets

All regular way purchases or sales of financial assets 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) – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group 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.

(i) 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.

See accompanying notes to consolidated financial statements.

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 recognition is recognized in profit or loss.

(ii) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI 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 achieved by both collecting contractual cash flows and selling financial assets; 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.

On initial recognition of an equity investment that is not held for trading, the Group 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.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On recognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss 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 Group’s right to receive payment is established.

(iii) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, trade receivables and notes receivable, other receivables, leases receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

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

debt securities that are determined to have low credit risk at the reporting date ； and
other debt securities and 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 trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group 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 Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 180 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 365 days past due or the debtor is unlikely to pay its credit obligations to the Group in full.

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or tw A or higher per Taiwan Ratings’.

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

See accompanying notes to consolidated financial statements.

instrument.

12-month ECL are the portion of ECL that result from default events that are possible within the 12 months 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 Group is exposed to credit risk.

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 Group in accordance with the contract and the cash flows that the Group expects to receive). ECL are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost and debt securities at FVOCI 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 asset 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 365 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. For debt securities at FVOCI, the loss allowance is charge to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Group 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 Group 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 Group’s procedures for recovery of amounts due.

(iv) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, 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 Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset. The Group 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.

(2) Financial liabilities
(i) 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.

(ii)Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group 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.

See accompanying notes to consolidated financial statements.

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.

(iii) 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 Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present 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.

(i) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods orservices,orforadministrativepurposes.Investmentpropertyismeasuredatcostoninitialrecognition, 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 revenue 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 Group.

See accompanying notes to consolidated financial statements.

(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 is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

(1) Buildings 5～55years
(2) Machinery 5 ～ 10years
(3) Office equipment 3 ～ 10 years

Depreciation methods, useful lives and residual values are reviewed atand adjusted if appropriate.

(iv) Reclassification of self-used properties in to investment properties

The Groupusedthebookvalueofitsself-usedpropertiestoreclassifythemintoinvestmentproperties.

(k) Leases
(i) Identifying a lease

At inception of a contract, the Group 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. As a leasee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-ofuse 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 Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

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

fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

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

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Group’s estimate of the amount expected to be payable under a residual value

See accompanying notes to consolidated financial statements.

guarantee; or

there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
there is a change of its assessment on whether it will exercise a extension or termination option; or

– there is any lease modification

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

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of Office equipment that have a lease term of 12 months or less and leases of low-value assets, including IT equipment. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

For sale-and-leaseback transactions, the Group applies the requirements for determining when a performance obligation is satisfied in IFRS15 to determine whether the transfer of an asset is accounted for as a sale of the asset. If the transfer of an asset satisfies the requirement of IFRS15 to be accounted for as a sale of the asset, the Group derecognizes the transferred asset, then measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained. Accordingly, the Group recognizes only the amount of any gain or loss that relates to the rights transferred to the buyer-lessor. For leaseback transaction, the Group applies the lessee accounting policy. If the transfer of an asset does not satisfy the requirement of IFRS15 to be accounted for as a sale of the asset, the Group continues to recognize the transferred asset and recognizes the financial liability equal to the transfer proceeds.

(ii)As a lessor

When the Group 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 Group 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 Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group 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. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

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

The Group recognizes a finance lease receivable at an amount equal to its net investment in the lease. Initial direct costs, such as lessors to negotiate and arrange a lease, are included in the measurement of the net investment. The interest income is recognized over the lease term based on a pattern reflecting a constant periodic rate of return on the net investment in the lease. The Group recognizes lease payments received under operating leases as income on a straight-line basis over the lease term as part of ‘other income’.

See accompanying notes to consolidated financial statements.

(l) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets, deferred tax assets and investment properties and biological assets, measured at fair value, less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets thatgenerates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units （ CGUs ） . Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

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 first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(m) Revenue Recognition
(i) Revenue from customer contracts

Revenue is measured by the consideration expected to be received in exchange for the transfer of goods or services. The Group recognizes revenue when control over the goods or services is transferred to the customer, thereby satisfying performance obligations. The Group provides the following explanations based on its primary revenue streams:

(1) Sale of Goods - Electronic Rectifier Diodes and Semiconductor Passive Components The Group manufactures electronic components and sells them to electronic equipment manufacturers. Revenue is recognized when control over the products is transferred. Control over the product is deemed to have been transferred when the product has been delivered to the customer, the customer has the full ability to decide on the sales channel and price of the product, and there are no unfulfilled obligations affecting the customer's acceptance of the product. Delivery occurs when the products are shipped to a specific location, and the Group risks of obsolescence, deterioration, and loss have been transferred to customers. Customers have accepted the products in accordance with the sales contract, the acceptance clauses have expired, or the merging company has objective evidence that all acceptance criteria have been met.

The Group shall recognize accounts receivable at the time of delivery of commodities, since the Group has the right to receive consideration unconditionally at that time.

(2) Rental income
Rental income from investment properties and income from leasing real estate are recognized as lease income in the operating revenue item.
(3) Financial Components
The Group expects that the time between the transfer of goods or services to customers and the customer's payment for those goods or services does not exceed one year. Therefore, the Group does not adjust the transaction price for the time value of money.

See accompanying notes to consolidated financial statements.

(n) Employee benefits
(i) Defined contribution plans

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

(ii) Defined benefit plans

The Group’s net obligation in respect of 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.

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 Group, 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, 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 Group 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.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group 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.

(o) Income taxes

Income taxes comprise 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.

The Group has determined that the global minimum top-up tax – which it is required to pay under Pillar Two legislation – is an income tax in the scope of IAS 12. The Group has applied a temporary mandatory relief from deferred tax accounting for the impacts of the top-up tax and accounts for it as a current tax when it is incurred.

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.

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 rise to equal taxable and deductible temporary differences

See accompanying notes to consolidated financial statements.

(ii)temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group 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 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.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflect uncertainty related to income taxes, if any.

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

(i) the Group 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.

(p) Earnings per share

The Group discloses the Group’s basic and diluted earnings per share attributable to ordinary shareholders of the Group. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Group divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Group divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares,

(q) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

5. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

In preparing these consolidated 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.

The following assumptions and estimates involve significant uncertainties that could result in material adjustments to the carrying amounts of assets and liabilities in the next financial year and have been impacted by the COVID-19

See accompanying notes to consolidated financial statements.

pandemic. Details of these assumptions and estimates are provided below:

(a) Allowance for doubtful accounts for accounts receivable.

The allowance for doubtful accounts is estimated based on assumptions regarding default risk and expected loss rates. The Group considers historical experience, current market conditions, and forward-looking estimates on each reporting date to determine the assumptions and inputs to be used in calculating impairment. For detailed explanation of the related assumptions and input values, please refer to Note 6(d).

(b)Inventory evaluation

Due to the requirement to measure inventory at cost or net realizable value, whichever is lower, the Group assesses the amount of inventory cost to be written down to net realizable value due to normal wear and tear, obsolescence, or lack of market sales value as of the evaluation report date. The inventory valuation is primarily based on estimates of product demand during a specific future period, and may be subject to significant changes due to rapid changes in the industry. Please refer to Note 6(4) for details on the inventory valuation estimate.

The Group's accounting policies and disclosures include the use of fair value measurement for its financial and nonfinancial assets and liabilities. The Group has established internal control systems for fair value measurement. This includes establishing an assessment team responsible for reviewing all significant fair value measurements (including level 3 fair value) and reporting directly to the Chief Financial Officer. The assessment team periodically reviews significant unobservable inputs and adjustments. If third-party information (such as brokers or pricing service organizations) is used as inputs to measure fair value, the assessment team will evaluate the evidence supporting the input values provided by the third party to ensure that the valuation and its fair value classification comply with International Financial Reporting Standards. Investment properties are periodically valued by the Group based on the evaluation methods and parameter assumptions specified by the Financial Supervisory Commission, or by external appraisers commissioned by the Group.

The Group strives to use market observable inputs as much as possible when measuring its assets and liabilities. The fair value level is classified based on the input values used by the valuation technique, as follows:

(1) Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
(2) Level 2: Inputs for the asset or liability that are directly (i.e., prices) or indirectly (i.e., derived from prices) observable, excluding those included in Level 1.
(3) Level 3: Inputs for the asset or liability that are unobservable (i.e., non-market observable inputs).

In the event of transfers between different levels of fair value hierarchy, the Group recognizes the transfer on the reporting date.

Please refer to the following notes for information related to the assumptions used in measuring fair value:

Note 6(g): Investment properties.
Note 6(q): Financial instruments.

See accompanying notes to consolidated financial statements.

6. Explanation of significant accounts

(a) Cash and cash equivalents

December 31, 2023 Cash on hand and petty cash $ 295 Cash in banks 533,774 Time deposits 27,634 Cash and cash equivalents in the statement of cash flows $ 561,703 Please refer to Note 6(q) for the fair value sensitivity analysis and interest rate risk of liabilities.	December 31, 2022 138 227,398 18,426 245,962 the financial assets and

(b) Financial assets

1.Current financial assets at fair value through profit or loss

		December	31, 2023	December	31, 2022
Financial assets
designation as measured at fair
value through profit or loss
Shares of stock of overseas listed companies - Tesla		$ -			5,296
Shares of stock of overseas listed companies - RTX			15,504		-
Shares of stock of overseas listed companies - Amazon			-		14,446
Shares of stock of overseas listed companies - OXY			14,670	-
Shares of stock of listed companies -TSMC			3,558		5,382
Assets mandatorily measured at fair value through
profit or loss:
Beneficiary certificates			785		533
Total		$	34,517		25,657
2. Non-current financial assets at fair value through other comprehensive income
	December 31, 2023		December 31,		2022
Debt investments at fair value through other
comprehensive income
Corporate bonds– Apple	$ 25,735				25,444
Corporate bonds – AT&T		9,144			8,631
Corporate bonds–Pfizer		4,121			4,154
Corporate bonds–SocGen		3,090			-
Equity investments at fair value through other
comprehensive income
Shares of stock of unlisted companies		15,546			16,000
Total	$	57,636			54,229

See accompanying notes to consolidated financial statements.

(1) Debt investments at fair value through other comprehensive income

The Group investments in bonds measured at fair value through other comprehensive income in the consolidated financial statements as of December 31, 2023 December 31, 2022 and December 31, 2022. The effective interest rates range from 2.00% to 4.9%, and the maturity dates range from 2056 to 2065. The Group holds bond investments through the business model of collecting contractual cash flows and selling financial assets, and therefore reports them as financial assets measured at fair value through other comprehensive income.

(2) Equity investments at fair value through other comprehensive income

The Group designated the investments shown above as equity securities at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for the long term for strategic purposes.

(3) For credit risk (including the impairment of debt investments) and market risk; please refer to note 6(q).
(4) As of December 31, 2023, December 31, 2022 and December 31, 2022, the Group’s financial assets were not pledged as collateral.

(c) Trade receivables and notes receivable

) Trade receivables and notes receivab	le
Notes receivable from operating activities $ Trade receivables Trade receivables–Non-current Less: Loss allowance $	December 31, 2023 417 114,752 48,227 (72,605) 90,791	December 31, 2022
			2,083 186,944 48,227 (78,794) 158,460

The Group applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as incorporated forward looking information, including macroeconomic and relevant industry information. The loss allowance provision were determined as follows:

ined as follows:
Current Within 180 days past due. More than 180 days past due		December 31, 2023
	Gross carrying amount $ 66,501 24,424 72,471 $ 163,396	Weighted- average loss rate 0.05%~1.84% 0.05%~8.89% 0%~100%	Loss allowance provision
			19 129 72,457
			72,605

See accompanying notes to consolidated financial statements.

	December 31, 2022
Gross carrying amount $ 121,502 37,246 78,506 $ 237,254	Weighted- average loss rate 0%~0.3% 0.3%~3.58% 100%	Loss allowance provision
		- 288 78,506
		78,794

The movements in the allowance for trade receivables and notes receivable were as follows:

For the Years Ended December

	31,
	2023 78,794 (2,852) (2,746) (764) 173 72,605	2022 78,677 - (931) (2,165) 3,213 78,794
$
$

As of December 31, 2023 and 2022, the Group’s the aforementioned trade receivables and notes receivable were not pledged as collateral.

(d) Inventories

December 31, 2023 Raw materials and consumables 24,914 Work in progress 19,707 Finished goods 76,590 Merchandise 28,176 Goods and materials in transit 2,614 Subtotal 152,001 Less: Allowance for inventory market decline and obsolescence (16,423) 135,578	December 31, 2023	December 31, 2022
	24,914 19,707 76,590 28,176 2,614 152,001	30,189 27,206 68,078 28,262 4,312 158,047
		(16,343)
	135,578	141,704

See accompanying notes to consolidated financial statements.

As of December 31, 2023 and 2022, the details of the cost of sales were as follows:

	For the Years Ended December 31, 2023 2022 447,017 518,105 80 2,832 2,426 445 (1,121) (294) $ 448,402 521,088	For the Years Ended December 31, 2023 2022 447,017 518,105 80 2,832 2,426 445 (1,121) (294) $ 448,402 521,088
	2023 447,017 80 2,426 (1,121)
$
	$ 448,402	521,088

As of December 31, 2023 and 2022, the Group’s the aforementioned trade receivables and notes receivable were not pledged as collateral.

(e) Property, plant and equipment

The cost and accumulated depreciation of the property, plant and equipment of the Group For the Years Ended December 31, 2023 and 2022 were as follows:

Cost: Balance at January 1, 2023 Additions Reduction Reclassification Effect of movement in exchange rates Balance at December 31, 2023 Balance at January 1, 2022 Additions Reduction Reclassification Effect of movement in exchange rates Balance at December 31, 2022 Accumulated depreciation: Balance at January 1, 2023 Depreciation Reduction Effect of movement in exchange rates Balance as of December 31, 2023 Balance as of January 1, 2022 Depreciation Reduction Effect of movement in exchange rates Balance at December 31, 2022 Carrying value: Balance at December 31, 2023 Balance at January1, 2022 Balance at December 31, 2022		Land		Buildings and structures 253,393 - - - (4,512) 248,881 249,527 - - - 3,866 253,393 128,104 10,249 (2,610) 135,743 115,638 10,469 1,997 128,104 113,138 133,889 125,289	Machinery and equipment 686,790 635 (691) 1,358 (10,996) 677,096 664,281 16,704 (5,898) 10,614 1,089 686,790 518,023 23,918 (622) (9,364) 531,955 488,073 25,299 (3,903) 8,554 518,023 145,141 176,208 168,767	Office equipment 56,420 408 (51) - (383) 56,394 54,395 1,528 (24) - 521 56,420 47,985 3,266 (51) (383) 50,817 43,873 3,674 (24) 462 47,985 5,577 10,522 8,435	Construction in progress 13,952 5,735 - (6,321) (29) 13,337 12,690 11,704 - (10,614) 172 13,952 - - - - - - - - 13,337 12,690 13,952	Total 1,191,949 6,778 (742) (4,963) (15,920) 1,177,102 1,162,287 29,936 (5,922) - 5,648 1,191,949 694,112 37,433 (673) (12,357) 718,515 647,584 39,442 (3,927) 11,013 694,112 458,587 514,703 497,837
	$ $ $ $ $ $ $ $ $ $ $	181,394 - - - -
		181,394
		181,394 - - - -
		181,394
		- - -
		-
		- - -
		- 181,394
		181,394
		181,394

December 31, 2023 and 2022, the Property, plant and equipment of the Group had been pledged as collateral for long-term borrowings; please refer to note 8.

See accompanying notes to consolidated financial statements.

(f) Right-of-use assets

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

Land Cost: Balance at January 1, 2023 $ 10,196 Additions - Reduction Effect of movement in exchange rates (290) Balance at December 31, 2023 $9,906 Balance at January 1, 2022 $ 9,948 Additions Reduction Effect of movement in exchange rates 248 Balance at December 31, 2022$ 10,196 Accumulated depreciation and impairment losses: Balance at January 1, 2023 $ 1,252 Depreciation for the year 310 Reduction Effect of movement in exchange rates (42) Balance at December 31, 2023$ 1,520 Balance at January 1, 2022 $915 Depreciation for the year 312 Reduction Effect of movement in exchange rates 25 Balance at December 31, 2022$ 1,252 Carrying amount: Balance at December 31, 2023$ 8,386 Balance at January 1, 2022 $ 9,033 Balance at December 31, 2022$ 8,944	Buildings 12,827 3,682 (3,676) (7) 12,826 6,506 5,307 1,014 12,827 6,408 2,880 (3,676) 112 5,724 3,250 2,706 452 6,408 7,102 3,256 6,419	Machinery and equipment 1,442 - (1,442) - - 4,505 (3,063) - 1,442 1,202 240 (1,442) - - 3,789 476 (3,063) - 1,202 - 716 240	Machinery and equipment 1,442 - (1,442) - - 4,505 (3,063) - 1,442 1,202 240 (1,442) - - 3,789 476 (3,063) - 1,202 - 716 240	Other equipment - 343 - 343 280 (280) - - - 72 - 72 214 66 (280) - - 271 66 -		Total
						24,465 4,025 (5,118) (297)
						23,075
						21,239 5,307 (3,343) 1,262
						24,465
						8,862 3,502 (5,118) 70
						7,316
						8,168 3,560 (3,343) 477
						8,862
						15 ,759 13,071 15,603

See accompanying notes to consolidated financial statements.

(g) Investment property

Land and

	Land and
Cost: Balance at January 1, 2023 Effect of movement in exchange rates Balance at December 31, 2023 Balance at January 1, 2022 Effect of movement in exchange rates Balance at December 31, 2022 Accumulated depreciation and impairment losses: Balance at January 1, 2023 Depreciation for the year Effect of movement in exchange rates Balance at December 31, 2023 Balance at January 1, 2022 Depreciation for the year Effect of movement in exchange rates Balance at December 31, 2022 Carrying amount: Balance at December 31, 2023 Balance at January 1, 2022 Balance at December 31, 2022 Fair value: Balance at December31, 2023 Balance at January 1, 2022 Balance at December 31, 2022	improvements $ 663,510 - $ 663,510 $663,510 - $ 663,510 $ - - - $ - $- - - $- $ 663,510 $ 663,510 $ 663,510	Buildings 376,331 (2,452) 373,879 374,230 2,101 376,331 64,163 10,014 (677) 73,500 53,694 10,038 431 64,163 300,379 320,536 312,168	Total
			1,039,841 (2,452)
			1,037,389
			1,037,740 2,101
			1,039,841
			64,163 10,014 (677)
			73,500
			53,694 10,038 431
			64,163
			963,889 984,046 975,678 $ 1,909,407 $ 1,818,136 $ 1,873,841

Investment properties are the self-owned assets held by the consolidated company. The initial non-cancellable period for the leased investment properties ranges from 1 to 6 years. Due to the need for organic renewal and industrial transformation and upgrading in the Jiashan Economic and Technological Development Industrial Park, which is under the subsidiary Zhejiang Rectron, an agreement was reached with Jiashan Economic Development

See accompanying notes to consolidated financial statements.

Asset Management Co., Ltd. on September 22, 2023, to vacate the premises. Consequently, the lease contract was terminated at the end of August 2023. Please refer to Note 9(b) for detailed information.

Due to the restriction in the law at that time, private entities were not allowed to acquire agricultural land. Therefore, the Companies appointed Mr. Lin Wen-Teng, one of the directors, to register the real estate investment under his personal name. To ensure the preservation of the Companies' assets, the property has been pledged back to the Companies.
The fair value of investment properties is based on the valuation by independent appraisers who possess recognized professional qualifications and have recent experience in valuing properties in similar locations and of similar types. The valuation is conducted based on market value. In the absence of an active market price, the valuation considers the aggregate estimated cash flows expected to be received from leasing the property, discounted using a yield that reflects the specific risks inherent to those net cash flows, to determine the value of the property.
As of December 31, 2023 and 2022, the Property, plant and equipment of the Group had been pledged as collateral for long-term borrowings; please refer to note 8.

(h) Short-term borrowings

m borrowings
Secured bank loans Unused short-term credit lines Range of interest rates	December 31, 2023	December 31, 2022 30,000 370,000 1.29%~1.79%
	$ 15,000
	$ 385,000
	1.89%~2.20%

For the collateral for short-term borrowings, please refer to note 8.

(i) Operating Lease

Lease as Lessor

The Group leases its investment properties under operating leases. Please refer to Note 6(g) for details. The future minimum lease payments receivable under non-cancelable operating leases are as follows:

Less than one year One to two years Two to three years Three to four years Four to five years Total undiscounted lease payments	December 31, 2023	December 31, 2022 32,391 26,239 12,930 4,952 4,355 80,867
	$ 23,650 15,319 5,947 1,248 -
	$ 46,164

See accompanying notes to consolidated financial statements.

(j)Provisions

1. Defined benefit plans

The reconciliation of fair value of the defined benefit plans and plan assets is as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liabilities	For the Ended December 31	For the Ended December 31
	2023 $ 7,419 (5,210) $ 2,209	2022 9,523 (6,014) 3,509

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

1) Composition of plan assets

The Group sets aside pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. Such funds are managed by the Bureau of Labor Funds, Ministry of Labor. Under these regulations, the minimum earnings from these pension funds shall not be less than the earnings from two-year time deposits with the interest rates offered by local banks.

The Group’s contributions to the pension funds were deposited with Bank of Taiwanamountingto$5,210thousandasofthereportingdate.Forinformationontheutilizationofthelaborpen sionfundassets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in the present value of the defined benefit obligations for the years endedDecember31, 2023 and 2022 were as follows:

Defined benefit obligations on January 1 Current service costs and interest Remeasurements of the net defined benefit liability (asset) `－`Actuarial losses from changes in financial assumption Benefits paid by the plan Defined benefit obligation on December 31	FortheYearsEndedDecember31 2023 2022 $ 9,523 11,642 124 163 299 314 (2,457) (2,596) $ 7,419 9,523	FortheYearsEndedDecember31 2023 2022 $ 9,523 11,642 124 163 299 314 (2,457) (2,596) $ 7,419 9,523	FortheYearsEndedDecember31 2023 2022 $ 9,523 11,642 124 163 299 314 (2,457) (2,596) $ 7,419 9,523
		2023 $ 9,523 124 299 (2,457) $ 7,419

3) Movements on the defined benefit plan assets

ThemovementsinthefairvalueofthedefinedbenefitplanassetsfortheyearsendedDecember31, 2023 and 2022 were as follows:

See accompanying notes to consolidated financial statements.

FortheYearsEndedDecember31 2023 2022 $ 6,014 6,059 78 43 28 458 124 151 (1,034) (697) $ 5,210 6,014	FortheYearsEndedDecember31 2023 2022 $ 6,014 6,059 78 43 28 458 124 151 (1,034) (697) $ 5,210 6,014	FortheYearsEndedDecember31 2023 2022 $ 6,014 6,059 78 43 28 458 124 151 (1,034) (697) $ 5,210 6,014
	2023 6,014 78 28 124 (1,034) 5,210
$ $
		6,014

4) Expenses recognized in profit and loss

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

2022 were as follows:
Current service costs Net interests on net defined benefit liability(asset) Operating costs Operating expenses General and administrative expenses
	$ $

5) Re-measurement of net defined benefit liability (asset) recognized in other comprehensive income

The Group’s net defined benefit liability (asset) recognized not her comprehensive income for the years ended December31, 2023 and2022 were as follows:

Cumulative amount on January 1 Recognized during the year Cumulative amount on December 31			FortheYearsEndedDecember31 2023 2022 (1,232) (1,376) 201 144 (1,031) (1,232)
	$ $

6) Actuarial assumptions

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

Discount rate Future salary increase rate	2023.12.31 2022.12.31
	1.20% 1.25% 1.30% 1.25%

See accompanying notes to consolidated financial statements.

Based on the actuarial report, The Group is expected to make a contribution payment of $144 thousand to the defined benefit plans for the one year period after the reporting date of 2023.

The weighted-average duration of the defined benefit plans is between 9 years.

7) Sensitivity analysis

As of December 31, 2023 and 2022, the changes in the principal actuarial assumptions that will have an impact on the present value of the defined benefit obligation were as follows:

December 31,2023 Discount rate Future salary increase rate December 31,2024 Discount rate Future salary increase rate		Impact on the present value of defined benefit obligation	Impact on the present value of defined benefit obligation
		Increase by 0.25% $ (127) 115 (154) 142	Decrease by 0.25% 131 (113) 159 (139)

The sensitivity analysis assumed all other variables remain constant during the measurement. This may not be representative of the actual change in the defined benefit obligation as some of the variables may be correlated in the actual situation. The model used in the sensitivity analysis is the same as that of the defined benefit obligation liability.

The analysis is performed on the same basis for prior year.

2. Defined contribute on plans

The Group’s employee benefits retirement expenses respectively.

Operating cost Selling expenses Administration expenses Research and development expenses Total	For theYears Ended December31	For theYears Ended December31
	2023 $ 514 196 752 43 $1,505	2022 520 201 683 56 1,460

The details of pension expenses recognized by each foreign subsidiary in accordance with the relevant local laws are as follows:

al laws are as follows:
Operating cost	For theYears Ended December31
	2023 2022 $ 3,435 3,320

(k) Income tax
The components of income tax For the Years Ended December 31, 2023 and 2022 were as follows:

(Continued)

Current income tax expense Current period incurred Undistributed earnings additional tax Prior years income tax adjustment Current tax expenses Deferred tax expense The origination of temporary differences Income tax expense	For the Years Ended December 31,	For the Years Ended December 31,
	2023 $16,359 21 1,880 18,260 1,326 19,586	2022
		29,978 (112)
		29,866
		(1,321)
		28,545

The income tax on pre-tax financial income was reconciled with the income tax expense for the years ended December 31, 2023 and 2022 as follows:

Profit excluding income tax Income tax using the group's domestic tax rate Foreign tax rate differences Non-deductible expenses Domestic financial asset valuation losses Recognition of previously unrecognized taxable losses Changes in unrecognized temporary differences Adjustment of prior period's current income tax Additional tax on undistributed earnings Tax incentives Others Total		For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
		2023 $106,455 21,291 (1,557) 33 (335) (372) (263) 1,880 21 (2,868) 1,756 $ 19,586		2022
				204,645
				40,929 (379) 11 253 (10,096) (1,438) (112) (623)
				28,545

3. Deferred tax assets

1) Unrecognized deferred tax assets

Tax effect of deductible Temporary Differences Tax losses	December 31,2023 $ 68,648 357 $ 69,005	December31,2022
		65,770 9,852
		75,622

The Income Tax Act allows the carry forward of net losses, as assessed by the tax authorities, to offset against taxable income. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilize the benefits therefrom.

As of December 31, 2023, the Group had not recognized the prior years’ loss carry- forwards as deferred tax assets, and the expiry years thereof were as follows:

Year of occurrence 2020	(Continued) Unused balance Mainland China subsidiary Expiry year $ 1,428 2025

2) Recognized deferred tax assets and liabilities

The movements in deferred tax assets and liabilities for the years ended December 31, 2023 and 2022 were as follows:

Deferred Tax Assets: Balance at January 1, 2023 Recognized in profit (loss) Balance at December 31, 2023 Balance at January 1, 2022 Recognized in profit (loss) Balance at December 31, 2022	Other
	$ 1,321 (1,321)
	$ -
	$ - 1,321
	$ 1,321

Deferred tax liabilities:

Deferred tax liabilities:
Balance at January 1, 2023 Recognized in profit (loss) Balance at December 31, 2023 Balance at January 1, 2022 Balance at December 31, 2022	Provision for Land Value Tax $ 62,679 - $ 62,679 $ 62,679 $ 62,679	Other - 5 5 - -	Total
			62,679 5
			62,684
			62,679
			62,679

Status of approval of income tax
- 1) The group's corporate income tax returns have been assessed and approved by the tax authorities up to the year 2021.
- 2) The corporate income tax returns of the group's domestic subsidiaries have been assessed and approved by the tax authorities up to the year 2021.
(l)Capital and other equity

1. Ordinary shares

As of December 31, 2023 and 2022 the authorized capital of the Group consisted of 400,000 thousand shares, respectively, at a par value of $10 per share, amounting to $4,000,000 thousand, respectively, and its outstanding capital were consisted of 166,303 thousand shares. All share proceeds from outstanding capital have been collected.

Capital surplus

plus
Treasury share transactions	December 31, 2023	December 31, 2022
	$ 9 9

According to the R.O.C. 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

(Continued)

Issuers, capital increases by transferring capital surplus in excess of the par value should not exceed 10% of the total common stock outstanding.

Retained earnings

If the Group has surplus in the annual final accounts, it shall pay taxes and donations in accordance with the law, offset cumulative losses, and then appropriate 10% as statutory surplus reserve. However, when the statutory surplus reserve has reached the Group's paid-in capital, no further appropriation is required. The remaining surplus shall be appropriated or reversed as required by laws and regulations, or transferred to the special surplus reserve. If there is still surplus, together with undistributed surplus at the beginning of the period, it will be classified as distributable surplus. The Board of Directors shall propose a surplus distribution plan for approval by the shareholders' meeting, and distribute dividends to the shareholders.

Taking into account financial, operational, and business factors, the Group may distribute dividends to shareholders, which shall not be less than 10% of the distributable surplus for the current fiscal year. However, if the accumulated distributable surplus is less than 3% of the paid-in capital, no distribution shall be made. Dividends may be distributed in the form of cash dividends or stock dividends. Cash dividends shall be given priority in the distribution of earnings, but stock dividends may also be distributed. The proportion of cash dividends shall not be less than 10% of the total dividend amount.

For the distribution of dividends to shareholders in the form of cash, the Board of Directors is authorized to carry out such distribution with the approval of two-thirds or more of the attending directors and a majority of the attending directors, and to report it to the shareholders' meeting.

(i) Legal reserve

When a company incurs profit, the shareholders shall decide on the distribution of the statutory earnings reserve either by issuing new shares or by paying cash of up to 25% of the actual share capital.

(ii) Special reserve

The Group chose to apply the exemption under IFRS 1 at its initial adoption of IFRSs. Any unrealized revaluation surplus, accumulated translation adjustment, and increasing amount incurred from adopting the fair value as cost for the assets classified as investment property at the transition date. According to the Financial Supervisory Commission's Order No. 1010012865 issued on April 6, 2012, an equal amount shall be appropriated to the special surplus reserve. When using, disposing of, or reclassifying related assets, a proportionate reversal of the originally appropriated special surplus reserve may be distributed as earnings.

According to the regulations of the Financial Supervisory Commission, when the Group distributes distributable earnings, the difference between the net amount of reductions in other shareholders' equity items recorded in the current year and the balance of the special surplus reserve mentioned above shall be considered. When distributing earnings for the fiscal year 2022, the Group will allocate the current year's income and the undistributed earnings from previous periods to the special surplus reserve. When distributing earnings for the fiscal year 2023, the Group will allocate the current year's after-tax net profit, along with items other than the current year's after-tax net profit, to the undistributed earnings and the special surplus reserve from previous periods. The Group is not allowed to distribute the amounts related to reductions in other shareholders' equity from previous periods, except for the allocation to the special surplus reserve. In the event of reversals in the amounts of reductions in other shareholders' equity in the future, earnings may be

(Continued)

distributed based on the reversed portion. As of December 31, 2023 and 2022, the balance of the special surplus reserve is $60,074 thousand and $34,924 thousand respectively.

(iii) Earnings distribution

The amounts of cash dividends and share dividends for the 2022 and 2021 earnings distribution had been approved, the board meeting held on March 24, 2023 and March 30, 2022; while the earnings distribution for2022 and 2021 had been approved during the shareholders’ meeting on June 26, 2023 and June 23, 2022 as follows:

Cash dividends distributed to ordinary shareholders	2022 Amount per share Total amount $ 0.80 133,042	2022 Amount per share Total amount $ 0.80 133,042	2021
	Amount per share $ 0.80		Amount per share Total amount 0.60 100,000
		133,042

The group's Board of Directors resolved on March 15, 2024, to distribute cash dividends for the fiscal year 2023. Details regarding the distribution can be found on the Taiwan Stock Exchange's website. The dividend amounts for the shareholders are as follows:

Cash dividends distributed to ordinary shareholders	2023 Amount per share Total amount $ 0.31 51,554

(iv) OCI accumulated in reserves

Balance at January 1, 2023 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at December 31, 2023 Balance at January 1, 2022 Exchange differences on foreign operations Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Balance at December 31, 2022	Exchange differences on translation of foreign consolidated financial statements $ (55,153) (27,951) - $ (83,104) $ (41,048) (14,105) $ (55,153)	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income Total (4,921) (60,074) (27,951) 882 882
		(4,039) (87,143)
		6,124 (34,924) (14,105) (11,045) (11,045)
		(4,921) (60,074)

(Continued)

(m) Earnings per share

For the Years Ended December 31, 2023 and 2022, the Group’s earnings per share were calculated as follows:

Basic earnings per share
(i) Profit attributable to ordinary shareholders of the Group

Profit/(loss) of the Group for the year	For the three months ended December 31	For the three months ended December 31
	2023 $ 86,869	2022
		176,100

(ii) Weighted-average number of ordinary shares

Weighted-average number of ordinary shares(thousand shares) Earnings per share	For the three months ended December 31	For the three months ended December 31
	2023 166,303 $ 0.52	2022
		166,303
		1.06

2. Diluted earnings per share

The diluted earnings per share of the Group for the fiscal year 2023 and the period from January 1, 2022, to December 31, 2022, are calculated based on the net income attributable to the equity holders of the Group and the adjusted weighted average number of ordinary shares outstanding, considering the dilutive effects of all potential ordinary shares. The calculations are as follows:

(i) Profit attributable to ordinary shareholders of the Group

Profit/(loss) attributable to ordinary shareholders of the Group (basic) ii) Weighted-average number of ordinary shares Weighted-average number of ordinary shares(thousand shares) (basic) Effect of employee share bonus Weighted-average number of ordinary shares (thousand shares)(diluted) Earnings per share	For the three months ended December 31 2023 2022 $ 86,869 176,100 For the three months ended December 31 2023 2022 166,303 166,303 85 164 166,388 166,467 $ 0.52 1.06	For the three months ended December 31 2023 2022 $ 86,869 176,100 For the three months ended December 31 2023 2022 166,303 166,303 85 164 166,388 166,467 $ 0.52 1.06
		166,467
		1.06

(Continued)

(n) Revenue from contracts with customers

i. Disaggregation of revenue

For the Years Ended December 31, 2023

Wine Trading Department 4,606 - - -	Wine Trading Department 4,606 - - -	Total
- - -		629,211 76,180 10,196 958
	4,606	716,545
- - -	4,606 4,606	666,531 28,935 16,473 4,606
		716,545

For the Years Ended December 31, 2022

Electronics Division Primary geographical markets Asia $ 632,925 America 132,672 Europe 13,188 Others 1,204 $ 779,989	Property Management Division 26,873 - - - 26,873	Medical Equipment Division 62,515 2,885 - - 65,400	Wine Trading Department 5,371 - - - 5,371	Total
				727,684 135,557 13,188 1,204
				877,633

(Continued)

For the Years Ended December 31, 2022

Property Management Division	Medical Equipment Division Wine Trading Department Total - - 779,989 - - 26,873 65,400 - 65,400 - 5,371 5,371 65,400 5,371 877,633 December 31, 2022 January1, 2022 189,027 212,401 (30,567) (30,450) 158,460 181,951 1,941 1,997	Total
- 26,873 - -		779,989 26,873 65,400 5,371
26,873		877,633

	158,460
	1,941

For details on trade receivables and allowance for impairment, please refer to note 6(c).

(o) Remunerations to employees, directors and supervisors

The group’ s Articles of Incorporation require that earnings shall first be offset against any deficit, then, a minimum of 1% will be distributed as employee remuneration, and a maximum of 2% will be allocated as remuneration to directors. Employees who are entitled to receive the above- mentioned employee remuneration, in share or cash, include the employees of the group’s subsidiaries who meet certain specific requirements.

For the Years Ended December 31, 2023 and 2022, remuneration of employees of $1,100 thousand and $2,012 thousand, respectively, and remuneration of directors of $1,500 thousand and $1,500 thousand, respectively, were estimated on the basis of the group’s net profit before tax, excluding the remuneration of employees and directors of each period, multiplied by the percentage of remuneration of employees and directors as specified in the group’s articles of incorporation. Such amounts were recognized as operating expenses For the Years Ended December 31, 2023 and 2022, Management is expecting that the differences, if any, between the actual distributed amounts and estimated amounts will be treated as changes in accounting estimates and will be charged to profit or loss. The number of shares to be distributed was calculated based on the closing price of the group’s ordinary shares, one day prior to Board of Directors meeting.

(Continued)

In the fiscal year 2022, there was a difference of $488thousand and $500 thousand between the amount of remuneration approved by the Board of Directors for employees, directors, and supervisors and the estimated amount accrued for the fiscal year 2022. This difference primarily arises from accounting estimates made by the group and has been recognized in the income statement for the fiscal year 2023.The amount of employee compensation approved by the Board of Directors for the fiscal year 2023 is consistent with the accrual amount in the individual financial statements for the fiscal year 2023. However, there is a difference of $600 thousand between the amount approved by the Board of Directors for director and supervisor remuneration and the accrual amount in the individual financial statements for the fiscal year 2023. This difference is primarily due to accounting estimates made by the group and has been recognized in the profit or loss for the fiscal year 2024. Relevant information can be found on the Taiwan Stock Exchange's website.

(p) Non-operating income and expenses
Other income

Interest income Dividend income	For the Years Ended December 31,	For the Years Ended December 31,
	2023 $4,948 591 $ 5,539	2022
		1,698 510
		2,208

Other gains and losses

Foreign exchange gains (losses) Gains (losses)on financial assets at fair value through profit or loss Profit on Disposal of Real Estate, Plant, and Equipment Other 3. Finance costs Interest expense	For the Years Ended December 31,	For the Years Ended December 31,
	2023 2022 $ 17,988 37,987 11,828 (5,508) 9 (173) 387 528 $30,212 32,834 For the Years Ended December 31,	2022
		37,987 (5,508) (173) 528
		32,834
	2023 $(594)	2022
		(1,137)

(q) Financial instruments
Credit risk
(i) Credit risk exposure

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

(ii) Concentration of credit risk

(Continued)

The Group has a broad customer base and does not engage in significant transactions with any single customer. Additionally, its sales are geographically diversified. Therefore, there is no significant concentration of credit risk.

(iii) Receivables and debt securities

For credit risk exposure of trade receivables and notes receivable, please refer to note 6(c). Other financial assets at amortized cost include other receivables. All of these financial assets are considered to have low risk, and thus, the impairment provision recognized during the period was limited to 12-month expected credit losses. The fixed deposits held by the Group are transacted with and settled by financial institutions that have investmentgrade ratings or above. Therefore, they are considered to have low risk. The loss allowances were determined as follows:

Balance at January 1, 2023 Balance at December 31, 2023 Balance at January 1, 2022 Balance at December 31, 2022	Other receivables
	$ 36,992
	$ 36,992
	$ 36,992
	$ 36,992

2. Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

Carrying amount Contractual cash flows Within 6 months 6-12 m	onths	1-2 years	2-5 years Over 5 years
$ 15,000 15,143 5,095 108,230 108,230 108,230 7,521 7,864 1,186	10,048 - 1,213	- - 4,766	- - - - 699 -
$ 130,751 131,237 114,511	11,261	4,766	699
$ 30,000 30,020 30,020 165,601 165,601 165,601 6,786 7,218 1,753 $ 202,387 202,839 197,374	- - 1,337 1,337	- - 2,277 2,277	- - - - 1,851 -
			1,851

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(Continued)

3. Market risk

(i) Currency risk

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

Financial assets Monetary items USD : NTD USD : CNY Non-monetary items USD Financial liabilities Monetary items USD : NTD		December 31, 2023		December 31, 2022 Foreign currency Exchange rate NTD 6,965 30.710 213,895 21,688 6.697 666,038 1,245 30.710 38,229 2,785 30.710 85,527
				Foreign currency 6,965 21,688 1,245 2,785

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade and other receivables, financial assets at fair value through other comprehensive income, and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 0.5%of the NTD against the USD, and CNY as at 2023 and 2022 would have increased (decreased) the net profit after tax by $997 thousand and $3,178 thousand, and equity by $168 thousand and $153 thousand. The analysis is performed on the same basis.

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the Years Ended December 31, 2023 and 2022, the foreign exchange gain (loss) (including realized and unrealized portions) amounted to $17,988 thousand and $37,987 thousand, respectively.

(ii) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Group's financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.5% when reporting to management internally, which also represents the Group management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.5% basis points, the Group’s net income would have increased / decreased by $60 thousand and$120 thousand For the Years Ended December 31, 2023 and 2022, respectively, with all other variable factors remaining constant. This is mainly due to the Group’s borrowing at variable rates.

(iii) Other market price risk

For the Years Ended December 31, 2023 and 2022, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for profit or loss as illustrated below:

(Continued)

For the Years Ended December 31, 2023 2022 Prices of securities at the reporting date Other comprehensive income after tax Net income Other comprehensive income after tax Net income	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
	2023 2022
			Net income Other comprehensive income after tax		Net income
0.5% increase $ 0.5% decrease $		78 (78)	135 (135)	80 (80)	100 (100)

Fair value of financial instruments
(i) Fair value hierarchy

The carrying amount and fair value of the Group’s financial assets and liabilities, including the information on fair value hierarchy, were as follows; however, except as described in the following paragraphs, 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:

	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023
Book Value			Fair Value		Total 30,174 3,558 785
	Level 1		Level 2 - - -	Level 3 - - -
$ 30,174 3,558 785		30,174 3,558 785
34,517		34,517	-	-	34,517
42,090 15,546		- -	42,090 15,546	- -	42,090 15,546
57,636		-	57,636	-	57,636
516,703 90,791 1,662 310		- - -	- - -	- - -	- - -
609,466
$ 701,619		34,517	57,636		92,153
$15,000 75,697 32,533 7,521		- - - -	- - - -	- - - -	- - - -
$ 130,751

(Continued)

		December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	December 31, 2022	Total 19,742 5,382 533
Book Value $19,742 5,382 533 25,657 38,229 16,000 54,229 245,962 158,460 3,178 888				Fair Value
		Level 1 19,742 5,382 533 25,657 - - - - -		Level 2 - - - - 38,229 16,000 54,229 - - - - -		Level 3 - - - - - - - - -

	25,657 38,229 16,000		25,657 - - - - -				25,657
							38,229 16,000
	54,229				54,229		54,229
	245,962 158,460 3,178 888				- - - - -		- - -
	408,488		-		-	-
$	488,374		25,657		54,229		79,886
	$30,000 129,538 36,063 6,786		- - - -		- - - - -	- - - -	- - -
$	202,387

(ii) Valuation techniques for financial instruments measured at fair value

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. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date.

(Continued)

(iii) Transfers between Level 1 and Level 2

There were no transfers from level 2 to level 1 For the Years Ended December 31, 2023 and 2022.

(r)Financial risk management

1. Overview

The Group has exposure to the following risks from its financial instruments:

(i) Credit risk
(ii) Liquidity risk

(iii) Market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks’ exposures, please refer to the respective notes in the accompanying consolidated financial statements.

2. Structure of risk management

The Group 's Financial Management Department provides services to various business units, coordinating access to domestic and international financial markets. It supervises and manages the financial risks related to the group's operations by analyzing internal risk reports according to the level and breadth of risk. Internal auditors continuously review compliance with policies and exposure limits. The group does not engage in trading financial instruments (including derivative financial instruments) for speculative purposes.

3. Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from customers and investments in debt securities.
(i) Accounts receivable and other receivables The Group 's policy is to transact only with reputable counterparties and, where necessary, to obtain collateral to mitigate the risk of financial loss due to defaults. The Group transacts only with entities rated equivalent to investment grade. This information is provided by independent rating agencies. In cases where such information is not available, the group uses other publicly available financial information and transaction records to assess the creditworthiness of major customers. The group continuously monitors credit exposures and the credit ratings of counterparties. It diversifies total transaction amounts among counterparties with qualifying credit ratings and controls credit exposures through annual review and approval of counterparties' credit limits.

As the group has a broad customer base, does not significantly concentrate transactions with any single customer, and operates in diversified sales regions, the credit risk associated with accounts receivable is not significantly concentrated. To further mitigate credit risk, the group regularly assesses the financial condition of its customers but typically does not require collateral.

(ii) Investment

The credit risk exposure for the bank deposits, fixed income investments and other financial instruments are measured and monitored by the group’s finance department. As the group deals with the banks and other external parties with good credit standing and

(Continued)

financial institutions, corporate organization and government agencies which are graded above investment level, management believes that the group do not have compliance issues and no significant credit risk.

(iii) Guarantee

The group's policy dictates that financial guarantees can only be provided to wholly-owned subsidiaries. As of December 31, 2023, and December 31, 2022, the group has not provided any endorsements or guarantees.

4. Liquidity risk

The group manages and maintains sufficient cash and cash equivalents to support its operations and mitigate the impact of fluctuations in cash flows. Management oversees the utilization of bank financing facilities and ensures compliance with loan agreement terms.

Bank borrowings are an important source of liquidity for the group. As of December 31, 2023, and December 31, 2022, the unused portion of the short-term bank borrowing facilities amounted to $385,000 thousand and $370,000 thousand, respectively.

Market risk

Market risk is a risk that arises from changes in market prices, such as foreign exchange rates, interest rates and equity prices that affect the group’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.

(i) Currency risk

The group is exposed to exchange rate risk arising from sales and purchases denominated in currencies other than the functional currency of each respective group entity. The primary currencies involved in these transactions are TWD and USD.

(ii) Interest rate risk

The group is exposed to cash flow risk due to its borrowings at floating interest rates. To manage this interest rate risk, the group maintains an appropriate portfolio of floating-rate instruments.

(s) Capital management

The group's capital management objective is to safeguard its ability to continue operations, thereby ensuring the provision of returns to shareholders and other stakeholders, while maintaining an optimal capital structure to minimize the cost of capital.

To maintain or adjust its capital structure, the group may adjust dividend payments to shareholders, reduce capital and return it to shareholders, issue new shares, or sell assets to repay liabilities.

Similar to its peers, the group manages its capital based on the debt-to-capital ratio. This ratio is calculated by dividing net debt by total capital. Net debt is calculated as total liabilities reported in the balance sheet minus cash and cash equivalents. Total capital includes all components of equity (i.e., share capital, capital surplus, retained earnings, and other equity) plus net debt.

The group's capital management policy in 2023 remained consistent with that of 2022, maintaining a debt-to-capital ratio between 0% and 3%, ensuring the ability to finance at reasonable costs. The debt-to-capital ratios as of December 31, 2023, and December 31, 2022, are as follows:

(Continued)

Total liabilities Less: cash and cash equivalents Net debt Total equity Adjusted equity Debt-to-equity ratio	December 31, 2023 $ 558,705 (561,703) (2,998) 1,775,597 $ 1,772,599 0%	December 31, 2022
		304,979 (245,962)
		59,017 1,849,040
		1,908,057
		3%

As of December 31, 2023, the company's capital management approach remained unchanged from the previous year.

(t) Non-cash Investing and Financing Activities

Acquisition of right-of-use assets through leasing. Please refer to Note 6(f) for details.

7. Related-party transactions

(a) Names and relationships with related parties

The followings are entities that have had transactions with related party during the periods covered

Name of related party	Relationship with the Group
CHU-TING CORP Lin, I-Chin LIN, WEN-TENG Sunrise On The Bund Hotel(Sunrise) PU HWUA ENTERPRISE CO., LTD.(Pu Hwua) JuyangXingye Industrial Co., Ltd. ( JuyangXingye) Juiye Enterprise Co., Ltd.(Juiye Enterprise)	Chairman of this company is the same as the Chairman of the other company. Chairman of this company Director of this company The chairman of the subsidiary is the same as the chairman of the Group. The chairman of the subsidiary is the same as the chairman of the Group. The chairman of the Group is also a director of the subsidiary. The chairman of the Group is a director of the Group.

(b) Significant transactions with related parties
Sales

The amounts of significant sales by the Group to related parties were as follows:

The amounts of significant sales by the Group to related	parties were as follows:
Other related parties	For the Years Ended December 31, 2023 2022 $ 4,742 7,424
	2023 $ 4,742

The sales price of the Group to the related party is not significantly different from the general selling price. The average credit period for related parties as of December 31, 2023, and

(Continued)

January 1 to December 31, 2022, is approximately 120 days, while for general customers, it ranges from 30 to 90 days.

Receivables from related parties

The receivables from related parties were as follows:

Account Trade receivables	Relationship Other related parties	December 31, 2023 $ 955	December 31, 2022 2,558

Payables to related parties

The payables to related parties were as follows:

Account Other payables	Relationship Others	December 31, 2023 $ 108	December 31, 2022 62

4. Leases

The Group collected rental income from other related parties and affiliated companies, reporting lease income of $1,719 thousand and $225 thousand for the year ended December 31, 2023 and 2022, respectively. As of December 31, 2023 and 2022, related rental deposits amounted to $405 thousand, $16 thousand, and $18 thousand, respectively.

In November 2022, the Group rented an office building from the Key management person to be used as its headquarter. A five-year lease contract was signed, in which the rental fee is determined based on nearby office rental rates. The total value of the contract was $5,309 thousand. For the Years Ended December 31, 2023 and 2022, the Group recognized the amounts of $237 thousand and $88 thousand as interest expenses. As of December 31, 2023 and 2022, the balance of lease liabilities amounted to $4,127 thousand and $4,808 thousand, respectively.

Others

The Group 's operating expenses to other related parties for the years 2023 and 2022 were $2,608 thousand and $740 thousand, respectively.

(c) Others

In case of registering real estate under the name of other related parties, please refer to Note 6(7) for details.

(d) Key management personnel compensation

Key management personnel compensation comprised:

Short-term employee benefits Post-employment benefits	For the Years Ended December 31,	For the Years Ended December 31,
	2023 12,438 95 $12,533	2022
		11,769 124
		11,893

(Continued)

8. Assets pledged as security

The carrying amounts of assets pledged as security were as follows:

Assets pledged as security Property, plant and equipment Investment property	Liabilities secured by pledge Long-term borrowings Long-term borrowings	December 31, 2023 $ 232,298 50,605 $282,903	December 31, 2022
			235,480 51,703
			287,183

9. Significant Commitments and Contingencies

(a) Unrecognized contractual commitments

As of December 31, 2023, December 31, 2022, and December 31, 2022, the detailed amounts of the contract prices for equipment and construction projects entered into by the Group with suppliers are as follows:

Signed-contract Paid-price	December 31, 2023 $ 13,764 $ 9,038	December 31, 2022
		25,234
		11,971

(b) Zhejiang Rectron, a subsidiary, is actively participating in the organic renovation and industrial transformation and upgrading of the Zhejiang Economic and Technological Development Industrial Park to which it belongs. On September 22, 2023, Zhejiang Rectron signed a relocation compensation agreement with Zhejiang Economic Development Asset Operation Management Co., Ltd. The total compensation amount is approximately 691,875 thousand (RMB 161,653 thousand). It was agreed that Zhejiang Rectron should complete equipment relocation and vacate the factory by June 30, 2024. As of October 2023, Zhejiang Rectron has received partial compensation of approximately 356,849 thousand (RMB 80,827 thousand).

10. Losses due to major disasters: none

11. Subsequent events: none

12. Others

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

By function By item		For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,	For the Years Ended December 31,
		2023			2022
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Others Depreciation Amortization	19,298 1,366 527 1,231 39,009 1,067	84,543 7,240 4,459 4,925 11,940 2,641	103,841 8,606 4,986 6,156 50,949 3,708	21,580 1,448 562 897 40,878 1,765	81,397 7,049 4,338 4,983 12,162 2,984	102,977 8,497 4,900 5,880 53,040 4,749

13. Other disclosure items

(a) Information on significant transaction:

The followings were the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group For the Years Ended December 31, 2023:

(Continued)

==> picture [439 x 97] intentionally omitted <==

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

1. Lending to other parties:
Highest
balance Collateral
of Actual Transaction
financing usage Range of Purposes amount for Reasons for Allowance
to other amount interest of fund business short-term for bad Individual Maximum
Number Name of lender borrower Name of Account name Related party parties during the balance Ending during period the during the period rates financing borrower for the two parties between financing debt Item Value loan limits funding financing limit of fund
period
0 The Company CHU-TING Other Yes 100,000 - - - 2 - Operation - - - 177,560 710,239
receivables (note 3) (note 4) Requirements
1 Rectron China CHU-TING Other Yes 53,442 13,817 13,817 - 2 - Operation - - - 155,260 194,075
receivables (note 3) (note 4) Requirements
----- End of picture text -----

Note 1: For business transactions with counterparties, the business transaction amount is determined based on the cumulative sales (or purchases) amount between the two parties over the preceding twelve months.

Note2: According tour policy, the calculation for the maximum total amount of loans granted are as follows:

(1) The Company Individual counterparty funding limit = Shareholders' equity x 10% = $1,775,597thousand x 10% = $177,560 thousand.

The maximum funding limit for an individual counterparty = Shareholders' equity x 40% = $1,775,597thousand x 40% = $710,239 thousand.

(2) Rectron Electronics (China)

Individual counterparty funding limit = Shareholders' equity x 40% = $388,149thousand x 40% = $155,260 thousand.

The maximum funding limit for an individual counterparty = Shareholders' equity x 50% = $388,149thousand x 50% = $194,075 thousand.

Note3: Already eliminated during the preparation of the Parent Company Only Consolidated

financial statements.

Note 4: (1) Business transaction with counterparts exists.

(2) Short-term funding is necessary.
Guarantees and endorsements for other parties: None.
Information regarding securities held at the reporting date (subsidiaries, associates and joint ventures not included):

				(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)
Company holding securities	Security type and name	Relationship with the Group	Account		December	31, 2023		Remark
				Shares	Carrying value	Percentage of ownership (%)	Market value ( or net value)
The Company	Stock - Sunny Bank	-	Non-current financial assets at fair value through other comprehensive income	1,515,198	15,546	0.05%	15,546
The Company	Corporate bonds – Apple	-	Non-current financial assets at fair value through other comprehensive income	-	25,735	-%	25,735
The Company	Corporate bonds – AT&T	-	Non-current financial assets at fair value through other comprehensive income	-	9,144	-%	9,144
The Company	Corporate bonds – Pfizer	-	Non-current financial assets at fair value through other comprehensive income	-	4,121	- %	4,121
The Company	Corporate bonds – SocGen	-	Non-current financial assets at fair value through other comprehensive income	-	3,090	- %	3,090
CHU-TING	Fund - Yuanta High Dividend 0056	-	Current financial assets at fair value through profit or loss	21,000	785	-%	785
CHU-TING	Stock - OXY	-	Current financial assets at fair value through profit or loss	8,000	14,670	-%	14,670
CHU-TING	Stock - TSMC	-	Current financial assets at fair value through profit or loss	6,000	3,558	- %	3,558
CHU-TING	Stock - RTX	-	Current financial assets at fair value through profit or loss	6,000	15,504	- %	15,504

Information regarding purchase or sale of securities for the period exceeding 300 million or 20% of the Group’s paid-in capital: None.

(Continued)

Information regarding acquisition of real estate exceeding 300 million or 20% of the Group’s paid-in capital: None.
Information regarding receivables from disposal of real estate exceeding 300 million or 20% of the Group’s paid-in capital:

(Amounts in Thousands of New Taiwan Dollar)

Name of company	Type of property	Transacti on date	Acquisition date	Book value	Transacti on amount	Amount actually received	Gain from disposal	Counter- party	Nature of relatio nship	Purpose of disposal	Price reference	Other terms
Zhejiang Rectron	Land, Buildings, and Structures	2023.9.22	90.08	177,168 (Note 1)	691,875 (Note 2)	356,849 (Note 3)	(Note 4)	Jiashan Economic Development Assets Management Co., Ltd.	None	To align with organic renewal and industry transformati on and upgrading	Appraisal Report	(Note 5)

Note 1:RMB40,925 thousand Note 2:RMB161,653 thousand Note 3:RMB80,827 thousand

Note 4: Profit and loss shall be confirmed after all relocation procedures are completed.

Note 5: According to the agreed terms, after signing the relocation compensation agreement with Zhejiang Rectron, 50% of the total compensation will be received. Additionally, within 20 days after the completion of equipment relocation and factory vacating by June 30, 2024, 30% of the total compensation will be received. The remaining 20% of the total compensation will be received within 20 days after the cancellation of land and property certificates.

Information regarding related-party purchases and/or sales exceeding 100 million or 20% of the Group’s paid-in capital:

					(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)
Company name	Related party	Nature of relationship		Transa	ction details		Abn trans	ormal action	Trade receivables (payables) and notes receivable (payable)		Remark
			Item	Amount	Percentage of the purchases (sales) (%)	Payment term	Unit price	Payment terms	Ending balance	Percentage of total receivables (payables)
The Company Rectron China Rectron China Zhejiang Rectron	Rectron China The Company Zhejiang Rectron Rectron China	Parent-subsidiary relationship Parent-subsidiary relationship Investee companies that are also evaluated using the equity method by the Company Investee companies that are also evaluated using the equity method bythe Company	Purchase Sales Purchase Sales	281,071 (281,071) 245,492 (245,492)	67% (100))% 100% (82)%	Normal Normal Normal Normal	Normal Normal Normal Normal	90-120 Days 90-120 Days 120 Days 120 Days	(77,716) 77,716 (15,647) 15,647	(79)% 100% (100)% 71%

Information regarding receivables from related parties exceeding 100 million or 20% of the Group’s paid-in capital: None.
Information regarding trading in derivative financial instruments: None.
Significant transactions and business relationship between the parent company and its subsidiaries For the Years Ended December 31, 2023:

(Amounts in Thousands of New Taiwan Dollar)

No. (Note 1)	Company name	Counterparty	Relationship (Note 2)		Intercompany transactions	Intercompany transactions
				Account	Amount	Terms	Percentage of total net sales or assets
0	Rectron Ltd.	Rectron China	1	Operating cost	281,071	Calculated with finished product cost plus agreedprofit.	39%
0	Rectron Ltd.	Rectron China	1	Trade payables	77,716	Adjusted according to the overall funding situation between the parent and subsidiary companies, with a term of 120 days as stipulated in the agreement.	3%
0	Rectron Ltd.	REEI	1	Operating revenue	24,118	Calculated with finished product cost plus agreedprofit.	3%
0	Rectron Ltd.	REEI	1	Trade receivable	4,658	Adjusted according to the overall funding situation between the parent and subsidiary companies, with a term of 120 days as stipulated in the agreement.
1	Rectron China	Zhejiang Rectron	3	Operating cost	245,492	Calculated with finished product cost plus agreedprofit.	34%
1	Rectron China	Zhejiang Rectron	3	Trade payables	15,647	Adjusted according to the overall funding situation between the parent and subsidiary companies, with a term of 120 days as stipulated in the agreement.	1%

Note 1: Companies are numbered as follows: Parent company － 0

(Continued)

Subsidiary － starting from 1

Note 2: The relationships between transaction parties are numbered as follows: Parent company and subsidiary － 1 Subsidiary and parent company － 2 Subsidiary and subsidiary － 3

(b) Information on investments:

The followings are the information on investees For the Years Ended December 31, 2023:

							(Amounts in Thousands of	(Amounts in Thousands of	(Amounts in Thousands of	New Taiwan Dollar)	New Taiwan Dollar)
Name of investor	Name of investee	Location	Main businesses	Original i am December 31, 2023	nvestment ount	Balance a	s of December 31, 2023		Net income (loss) of the investee	Investment income (loss) recognised by the Group	Remark
					December 31, 2022	Shares	Percentage	Carrying value
The Group	REEI	USA	Sales of rectifiers, etc. Electronic components	142,264	142,264	205,000	100.00%	16,604	(5,818)	(5,818)
The Group	Rectron China	Hong Kong	Sales of rectifiers, etc. Electronic components	607,273	607,273	20,000	100.00%	388,149	20,831	20,831
The Group	CHU-TING	Taiwan	Wholesale of tobacco and alcohol products and manufacturing and sale of medical equipment.	s 109,987	109,987	14,500,000	100.00%	156,875	5,950	5,950

Note: The amount had been offset in the Parent Company Only Consolidated financial statements.

(c) Information on investment in Mainland China:

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

									(Amounts	in Thousands of New Taiwan Dollar)	in Thousands of New Taiwan Dollar)	in Thousands of New Taiwan Dollar)
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	Inves	tment	Accumulated outflow of investment from Taiwan as of December 31, 2023	Net income (losses) of the investee	Percentage of ownership	Investment income (loss) recognized	Carrying value as of December 31, 2023	Accumulated inward remittance of earnings as of December 31, 2023
					Outflow	Inflow
Zhejiang Rectron	Manufacturing and sales of rectifiers and other electronic components.	409,029 USD12,000	NOTE 1(3)	409,029 USD12,000	-	-	409,029 USD12,000	21,144	100.00%	21,144	267,052	-

(ii) Upper limit on investment in Mainland China:

	(Amounts in Thousands of New Taiwan Dollar)	(Amounts in Thousands of New Taiwan Dollar)
Accumulated investment in Mainland China as of December 31, 2023	Investment amount authorized by Investment Commission, MOEA	Upper limit on investment
368,460 USD 12,000	490,359 USD 15,970	1,065,358

Note 1: Investment methods are categorized into the following three types, simply indicated by their types:

(1)Direct investment in mainland China.

(2)Investment in Mainland China through a third-party company in another region (please specify the investment company in that third region).
(3)Others method.

Note 2: In the investment gains/losses recognized in this period column:

(1)If it is under preparation and there are no investment gains/losses yet, it should be noted.

(2)The basis for recognizing investment gains/losses is the consolidated financial statements audited and certified by the certified public accountant of the Taiwan parent company.

Note 3: According to the "Principles for Reviewing Investment or Technical Cooperation in Mainland China," there are limits to the amount of investment.

Equity net worth × 60% = $1,775,597 thousand × 60% = $1,065,358thousand.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of Parent Company Only Consolidated financial statements, are disclosed in “Information on significant transactions”.

(d) Major shareholders

		Unit: Share Percentage 25.72% 22,93%
Shareholding Shareholder’s Name	Shares	Percentage
Juiye EnterpriseCo.,Ltd.	42,788,288	25.72%
Bigwig Perfect International Co., Ltd.	38,141,792	22,93%

(Continued)

Note: The shareholder information in this table is provided by the Taiwan Depository & Clearing Corporation (TDCC) and is based on the calculation of the total number of common shares and preferred shares held by shareholders, excluding treasury shares, as of the last business day of each quarter. The data includes shareholders whose holdings account for more than 5% of the total shares outstanding. Please note that there may be differences between the reported share capital in the Group's consolidated financial statements and the actual number of shares held by shareholders, due to different calculation methods or other factors.

14. Segment information

(a) General information

The Group has four reporting segments: Electronics, Real Estate Investment, Medical Equipment, and Wine Trading. The Diode segment is engaged in the manufacturing and sales of various rectifiers and other semiconductor components. The Real Estate Investment segment is engaged in the business of leasing office buildings and factories. The Medical Equipment segment is engaged in the business of buying and selling and manufacturing masks. The Wine Trading segment is engaged in the business of trading red and white wines.

The reporting segments of the Group are strategic business units that provide different products and services. As each strategic business unit requires different technology and marketing strategies, they need to be managed separately.

(b) Information of profit or loss, assets, liabilities, basis and adjustments of which of departments to be reported.

The Group uses the departmental pre-tax profit (excluding non-recurring gains and losses and exchange gains and losses) reviewed by the chief operating decision-maker in the internal management report as the basis for resource allocation and performance evaluation by the management. Since income tax, non-recurring gains and losses, and exchange gains and losses are managed on a group basis, the Group does not allocate income tax expenses (benefits), nonrecurring gains and losses, and exchange gains and losses to the reporting segments. In addition, not all significant non-cash items, other than depreciation and amortization, are included in the income statement of all reporting segments. The amounts reported are consistent with the reports used by the operating decision-makers.

The information and adjustments for the operating segments of the Group are as follows: The Group’s operating segment information and reconciliation are as follows:

For the Years Ended December 31, 2023 Revenue Revenue from external customers Intersegment revenues Total revenue Interest Expense Depreciation and Amortization Reportable segment profit or loss Assets Investments Accounted for Using the Equity Method Reportable Segment Assets	Electronics Department $ 666,531 549,430 $ 1,215,961 $ 594 36,023 $ 104,423 $ 561,628 $ 1,870,572	Property Management Division 28,935 - 28,935 10,014 17,505 963,889	Medical Devices Division 16,473 667 17,140 8,620 4,963 135,978	Wine Trading Department 4,606 - 4,606 2,346 36,540	Reconciliation and elimination - (550,097) (550,097) (22,782) (561.628) (672,677)	Total
						716,545 -
						716,545
						594 54,657
						106,455

						2,334,302

(Continued)

For the Years

For the Years
Ended December 31, 2022 Electronics Department Property Management Division Revenue Revenue from external customers $ 779,989 26,873 Intersegment revenues 596,452 - Total revenue $1,376,441 26,873 Interest Expense $ 1,137 Depreciation and Amortization 38,736 10,038 Reportable segment profit or loss $ 237,165 14,096 Assets Investments Accounted for Using the Equity Method $ 569,100 Reportable Segment Assets $ 1,665,911 975,678 (c) Geographic information The regional information of the group geographical location of the customers. Region Revenue from external customers: Taiwan China Americas Europe Others Total	Medical Devices Division Wine Trading Department Reconciliation and elimination Total 65,400 5,371 - 877,633 585 - (597,037) - 65,985 5,371 (597,037) 877,633 1,137 9,015 57,789 32,270 950 (79,836) 204,645 (569,100) 161,863 25,734 675,167 2,154,019 is as follows, with revenue classified based on the December 31, 2023 December 31, 2022 $ 40,097 88,082 581,114 639,602 76,180 135,557 10,196 13,188 958 1,204 $ 716,545 877,633	Total
		877,633 -
		877,633
		1,137 57,789
		204,645

		2,154,019

(Continued)

AI assistant

RECTRON — Annual Report 2023

51998_rns_2023-11-14_2574da91-d661-4034-8015-74776fb99e11.pdf

Rectron Ltd.

Consolidated financial statements

Table of contents

Representation Letter

Independent Auditors’ Report

Opinion

Basis of Audit Opinion

Key audit matters

2. Inventory valuation

Other Matters

Responsibilities of Management and Those Charged with Governance for the consolidated financial statements

Auditor’s Responsibilities for the Audit of the consolidated financial statements

KPMG

Notes to Readers

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron LTD.

Consolidated Balance Sheets

December 31,2023and 2022 (Expressed in Thousands of New Taiwan Dollar)

Rectron LTD.

Consolidated Statement of Comprehensive Income

For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollar, except for Earnings per Common Share)

(English Translation of Consolidated financial statements Originally Issued in Chinese.)

Rectron LTD.

Consolidated Statement of Changes in Equity

Rectron LTD.

Consolidated Statement of Cash Flows

For the Years Ended December 31, 2023 and 2022 (Expressed in Thousands of New Taiwan Dollars)

Rectron Ltd.

Notes to the Consolidated financial statements

December 31, 2023 and 2022

(Expressed in Thousands of New Taiwan Dollar, except for Earnings per Share Information and Unless Otherwise Specified)

1. Company history

2. Approval date and procedures of the Parent Company Only Consolidated financial statements

3. New standards and interpretations not yet adopted

Joint Venture”

4. Summary of significant accounting policies

(a) Statement of compliance

(b) Basis of consolidation

i. Basis of measurement

ii. Functional and presentation currency

(c) Basis of consolidation

(d) Foreign currency

ii. Foreign operations

(iii) Offsetting of financial assets and liabilities

(h) Inventories

(i) Investment property

(ii)Subsequent expenditure

(iii) Depreciation

– there is any lease modification

(ii)As a lessor

(iii) Short-term employee benefits

(p) Earnings per share

(q) Operating segments

5. Significant accounting assumptions and judgments, and major sources of estimation uncertainty

(b)Inventory evaluation

6. Explanation of significant accounts

(b) Financial assets

(c) Trade receivables and notes receivable

For the Years Ended December

(d) Inventories

(e) Property, plant and equipment

(f) Right-of-use assets

(g) Investment property

Land and

(h) Short-term borrowings

(i) Operating Lease

Lease as Lessor

(j)Provisions

1. Defined benefit plans

1) Composition of plan assets

2) Movements in present value of the defined benefit obligations

3) Movements on the defined benefit plan assets

4) Expenses recognized in profit and loss

5) Re-measurement of net defined benefit liability (asset) recognized in other comprehensive income

6) Actuarial assumptions

7) Sensitivity analysis

2. Defined contribute on plans

RECTRON Annual Report 2023