Stock Code:1515

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Nine Months Ended September 30, 2024 and 2023

Address: No.261, Jen Hwa RD, Tali, Taichung City 412,Taiwan (R.O.C.) Telephone: (04)2491-4141

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

Contents
1. Cover Page
2. Table of Contents
3. Independent Auditors’ Review Report
4. Consolidated Balance Sheets
5. Consolidated Statements of Comprehensive Income
6. Consolidated Statements of Changes in Equity
7. Consolidated Statements of Cash Flows
8. 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 material accounting policies
(5)
Significant accounting assumptions and judgments, and major sources
of estimation uncertainty
(6)
Explanation of significant accounts
(7)
Related-party transactions
(8)
Pledged assets
(9)
Significant commitments and contingencies
(10) Losses due to major disasters
(11) Subsequent events
(12) Other
(13) Other disclosures
(a) Information on significant transactions
(b) Information on investees
(c) Information on investment in Mainland China
(d) Major shareholders
(14) Segment information Page

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Contents 1. Cover Page 2. Table of Contents 3. Independent Auditors’ Review Report 4. Consolidated Balance Sheets 5. Consolidated Statements of Comprehensive Income 6. Consolidated Statements of Changes in Equity 7. Consolidated Statements of Cash Flows 8. 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 material accounting policies (5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty (6) Explanation of significant accounts (7) Related-party transactions (8) Pledged assets (9) Significant commitments and contingencies (10) Losses due to major disasters (11) Subsequent events (12) Other (13) Other disclosures (a) Information on significant transactions (b) Information on investees (c) Information on investment in Mainland China (d) Major shareholders (14) Segment information	Page
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KPMG

台中市407544西屯區文心路二段201號7樓電話 Tel +886 4 2415 9168 7F, No.201, Sec.2, Wenxin Road, 傳真 Fax +886 4 2259 0196 Taichung City 407059, Taiwan (R.O.C.) 網址 Web kpmg.com/tw

Independent Auditors’ Review Report

To the Board of Directors Rexon Industrial Corp., Ltd.:

Introduction

We have reviewed the accompanying consolidated balance sheets of Rexon Industrial Corp., Ltd. and its subsidiaries as of September 30, 2024 and 2023, and the related consolidated statements of comprehensive income for the three months and nine months ended September 30, 2024 and 2023, as well as the changes in equity and cash flows for the nine months ended September 30, 2024 and 2023, and notes to the consolidated financial statements, including a summary of significant accounting policies. Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our responsibility is to express a conclusion on the consolidated financial statements based on our reviews.

Scope of Review

Except as explained in the Basis for Qualified Conclusion paragraph, we conducted our reviews in accordance with the Standard on Review Engagements 2410, “ Review of Financial Information Performed by the Independent Auditor of the Entity” of the Republic of China. A review of the consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with the Standards on Auditing of the Republic of China and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Conclusion

As stated in Note 4(b), the consolidated financial statements included the financial statements of certain nonsignificant subsidiaries, which were not reviewed by independent auditors. These financial statements reflect total assets amounting to $207,799 thousand and $196,983 thousand, constituting 3% and 2% of consolidated total assets as of September 30, 2024 and 2023, respectively, total liabilities amounting to $54,142 thousand and $47,489 thousand, both constituting 1% of consolidated total liabilities as of September 30, 2024 and 2023, respectively, and total comprehensive income(loss) amounting to $(30,937) thousand, $(33,305) thousand, $(105,026) thousand and $(61,297) thousand, constituting (57,291)%, (14)%, (28)% and (38)% of consolidated total comprehensive income (loss) for the three months and nine months ended September 30, 2024 and 2023, respectively.

Furthermore, as stated in Note 6(e), the other equity accounted investments of Rexon Industrial Corp., Ltd. and its subsidiaries in its investee companies of $16,164 thousand and $16,452 thousand as of September 30, 2024 and 2023, respectively, and its equity in net earnings on these investee companies of $(3) thousand, $18 thousand, $1 thousand and $32 thousand for the three months and nine months ended September 30, 2024 and 2023, respectively, were recognized solely on the financial statements prepared by these investee companies, but not reviewed by independent auditors.

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

3-1

Qualified Conclusion

Except for the adjustments, if any, as might have been determined to be necessary had the financial statements of certain consolidated subsidiaries and equity accounted investee companies described in the Basis for Qualified Conclusion paragraph above been reviewed by independent auditors, based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated financial statements do not present fairly, in all material respects, the consolidated financial position of Rexon Industrial Corp., Ltd. and its subsidiaries as of September 30, 2024 and 2023, and of its consolidated financial performance for the three months and nine months ended September 30, 2024 and 2023, as well as its consolidated cash flows for the nine months ended September 30, 2024 and 2023 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, “Interim Financial Reporting” endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

The engagement partners on the reviews resulting in this independent auditors’ review report are Chen, ChengHsueh and Chang, Tzu-Hsin.

KPMG

Taipei, Taiwan (Republic of China) November 6, 2024

Notes to Readers

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

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2024, December 31, 2023, and September 30, 2023

(Expressed in thousands of New Taiwan Dollar)

Assets Current assets: 1100 Cash and cash equivalents (note 6(a)) 1110 Current financial assets at fair value through profit o loss 1150 Notes receivable, net (note 6(b)) 1160 Notes receivable due from related parties, net (note 6(b) and 7) 1170 Accounts receivable, net (note 6(b)) 1180 Accounts receivable due from related parties, net (note 6(b) and 7) 1200 Other receivables, net (note 6(c)) 1220 Current tax assets 130X Inventories (note 6(d)) 1479 Other current assets (note 6(i)) Non-current assets: 1550 Investments accounted for using equity method, net (note 6(e)) 1600 Property, plant and equipment (note 6(f) and 8) 1755 Right-of-use assets (note 6(g)) 1780 Intangible assets (note 6(h)) 1840 Deferred tax assets 1920 Guarantee deposits paid 1975 Net defined benefit asset, non-current 1990 Other non-current assets (note 6(i)) Total assets	September 30, 2024 Amount % $ 2,278,217 31 r 96 - 1,761 - 13,975 - 833,118 11 2,327 - 3,137 - 6,351 - 479,895 6 87,888 1 3,706,765 49 16,164 - 3,314,488 44 80,822 1 62,192 1 116,452 2 1,698 - 218,331 3 29,360 - 3,839,507 51 $ 7,546,272 100	December 31, 2023 Amount % 3,283,001 36 96 - 84 - 11,013 - 1,010,074 11 5,934 - 2,662 - 3,004 - 740,957 8 105,276 1 5,162,101 56 16,163 - 3,494,030 38 77,518 1 62,235 1 132,861 1 2,680 - 220,140 3 45,157 - 4,050,784 44 9,212,885 100	September 30, 2023 Amount % 2,671,759 30 96 - 524 - 12,896 - 1,151,430 13 4,157 - 2,325 - 2,928 - 785,728 9 112,449 1 4,744,292 53 16,452 - 3,598,071 40 80,817 1 64,344 1 138,272 2 2,680 - 204,275 2 49,355 1 4,154,266 47 8,898,558 100 Liabilities and Equity Current liabilities: 2100 Short-term borrowings (note 6(j) and 8) 2130 Current contract liabilities (note 6(s)) 2150 Notes payable 2160 Notes payable to related parties (note 7) 2170 Accounts payable 2200 Other payables 2220 Other payables to related parties(note 7) 2230 Current tax liabilities 2365 Current refund liabilities(note 6(n)) 2280 Current lease liabilities (note 6(m)) 2320 Long-term borrowing, current portion (note 6(l) and 8) 2399 Other current liabilities, others (note 6(k)) Non-Current liabilities: 2540 Long-term borrowings (note 6(l) and 8) 2580 Non-current lease liaibilities (note 6(m)) Total liabilities Equity attributable to owners of parent:(note 6(q)) 3100 Ordinary shares 3200 Capital surplus 3300 Retained earnings 3400 Other equity Total equity attributable to owners of parent 36XX Non-controlling interests Total equity Total liabilities and equity	September 30, 2024		December 31, 2023	December 31, 2023		September 30, 2023 Amount % 762,924 9 66,333 1 548,967 6 3 - 1,567,912 18 683,433 8 31 - 13,850 - 208,012 2 7,156 - 539,068 6 518,910 6 4,916,599 56 289,786 3 20,087 - 309,873 3 5,226,472 59 1,814,735 20 586 - 1,956,425 22 (128,330) (1) 3,643,416 41 28,670 - 3,672,086 41 8,898,558 100
						Amount	%
						560,703 57,838 618,709 61 1,846,944 749,246 116 64,476 246,173 6,482 504,255 508012
						, 5163015
						,, 207,925 19,704
						227,629
						5,390,644

See accompanying notes to consolidated financial statements.

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income For the nine months ended September 30, 2024 and 2023 (Expressed in thousands of New Taiwan Dollar , except earnings per share)

For the nine months ended September 30	For the nine months ended September 30	For the nine months ended September 30
2024	% 100 84 16 5 3 3 11 5 1 1 2 - - 4 9 2 7 1 - 1 8 7 - 7 8 - 8 1.92 1.90	2023 Amount % 3,946,824 100 3,385,576 86 561,248 14 166,479 4 144,880 4 118,200 3 429,559 11 131,689 3 8,314 - 33,207 1 40,959 1 (24,457) (1) 32 - 58,055 1 189,744 4 42,870 1 146,874 3 19,783 1 (3,898) - 15,885 1 162,759 4 144,166 3 2,708 - 146,874 3 159,759 4 3,000 - 162,759 4 0.79 0.79
Amount 5,103,519 4,279,523 823,996 235,612 164,610 139,443 539,665 284,331 54,844 31,836 80,646 (17,195) 1 150,132 434,463 86,452 348,011 30,207 (6,007) 24,200 372,211 347,532 479 348,011 371,561 650 372,211

See accompanying notes to consolidated financial statements.

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2024 and 2023

(expressed in thousands of New Taiwan Dollar)

			Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent	Equity attributable to owners of parent			Non- controlling interests
Share capital	Capital surplus			Retained earnings					Other equity	Total equity attributable to owners of parent
Ordinary shares			Legal reserve	Special reserve		Unappropriated retained earnings		Total	Exchange differences on translation of foreign financial statements
$ 1,814,735 - - - $ 1,814,735 $ 1,814,735 - - - - - - - $ 1,814,735		586	475,923		163,182		1,173,154	1,812,259	(143,923) - 15,593 15,593 (128,330) (152,298) - - - - - 24,029 24,029 (128,269)	3,483,657	25,670 2,708 292 3,000 28,670 27,936 - - - - 479 171 650 28,586
		- -	- -		- -		144,166 -	144,166 -		144,166 15,593
		-	-		-		144,166	144,166		159,759
		586	475,923		163,182		1,317,320	1,956,425		3,643,416
		586	475,923		143,923		1,511,436	2,131,282		3,794,305
		- - -	31,065 - -		- 8,375 -
		-	31,065		8,375
		- -	- -		- -
		-	-		-
		586	506,988		152,298

See accompanying notes to consolidated financial statements.

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2024 and 2023

(Expressed in thousands of New Taiwan Dollar)

Cash flows from operating activities: Profit (loss) before tax Adjustments: Adjustments to reconcile profit: Depreciation expenses Amortization expenses Interest expenses Interest income Shares of profit of associates accounted for using equity method Losses on disposal of property, plant and equipment Impairment loss of property, plant and equipment Total adjustments to reconcile profit Changes in operating assets and liabilities: Changes in operating assets: Increase in notes receivable (Increase) decrease in notes receivable due from related parties Decrease (increase) in accounts receivable Decrease in accounts receivable due from related parties Increase in other receivables Decrease (increase) in inventories Decrease (increase) in other current assets Decrease in net defined benefit assets Decrease in other operating assets Total changes in operating assets Changes in operating liabilities: Increase in contract liabilities (Decrease) increase in notes payable Increase (decrease) in notes payable to related parties (Decrease) increase in accounts payable Increase in other payable (Decrease) increase in other payable to related parties (Decrease) increase in other current liabilities Total changes in operating liabilities Total changes in operating assets and liabilities Total adjustments Cash outflow generated from operations Interest received Interest paid Income taxes (paid) refund Net cash flows used in operating activities Cash flows from investing activities: Acquisition of property, plant and equipment Proceeds from disposal of property, plant and equipment Increase in refundable deposits Acquisition of intangible assets Increase in prepayments for business facilities Net cash flows used in investing activities Cash flows from financing activities: Increase in short-term borrowings Decrease in short-term borrowings Increase from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Cash dividends paid Net cash flows used in financing activities Effect of exchange rate changes on cash and cash equivalents Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the nine months ended September 30 2024 2023 $ 434,463 189,744 242,787 266,031 15,172 15,893 17,195 24,457 (54,844) (8,314) (1) (32) 12,667 4,772 - 24,574 232,976 327,381 (1,677) (237) (2,962) 18,826 176,956 (413,716) 3,607 4,637 (2,163) (2,048) 261,062 (202,912) 17,388 (23,986) 1,809 1,730 1,178 1,358 455,198 (616,348) 45,747 27,620 (409,522) 112,859 239 (91) (888,402) 959,957 61,546 86,689 (104) 25 (48,825) 47,901 (1,239,321) 1,234,960 (784,123) 618,612 (551,147) 945,993 (116,684) 1,135,737 56,532 8,314 (17,459) (24,501) (98,110) 12,184 (175,721) 1,131,734 (37,899) (124,600) 763 2,093 982 (754) (15,069) (13,304) (5,776) (31,898) (56,999) (168,463) 866,127 1,735,325 (1,066,127) (1,775,065) 67,750 53,935 (427,128) (278,787) (6,456) (8,307) (217,768) - (783,602) (272,899) 11,538 10,628 (1,004,784) 701,000 3,283,001 1,970,759 $ 2,278,217 2,671,759
	2024 $ 434,463 242,787 15,172 17,195 (54,844) (1) 12,667 - 232,976 (1,677) (2,962) 176,956 3,607 (2,163) 261,062 17,388 1,809 1,178 455,198 45,747 (409,522) 239 (888,402) 61,546 (104) (48,825) (1,239,321) (784,123) (551,147) (116,684) 56,532 (17,459) (98,110) (175,721) (37,899) 763 982 (15,069) (5,776) (56,999) 866,127 (1,066,127) 67,750 (427,128) (6,456) (217,768) (783,602) 11,538 (1,004,784) 3,283,001 $ 2,278,217

Cash flows from operating activities:
Profit (loss) before tax
Adjustments:
Adjustments to reconcile profit:
Depreciation expenses
Amortization expenses
Interest expenses
Interest income
Shares of profit of associates accounted for using equity method
Losses on disposal of property, plant and equipment
Impairment loss of property, plant and equipment
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Changes in operating assets:
Increase in notes receivable
(Increase) decrease in notes receivable due from related parties
Decrease (increase) in accounts receivable
Decrease in accounts receivable due from related parties
Increase in other receivables
Decrease (increase) in inventories
Decrease (increase) in other current assets
Decrease in net defined benefit assets
Decrease in other operating assets
Total changes in operating assets
Changes in operating liabilities:
Increase in contract liabilities
(Decrease) increase in notes payable
Increase (decrease) in notes payable to related parties
(Decrease) increase in accounts payable
Increase in other payable
(Decrease) increase in other payable to related parties
(Decrease) increase in other current liabilities
Total changes in operating liabilities
Total changes in operating assets and liabilities
Total adjustments
Cash outflow generated from operations
Interest received
Interest paid
Income taxes (paid) refund
Net cash flows used in operating activities
Cash flows from investing activities:
Acquisition of property, plant and equipment
Proceeds from disposal of property, plant and equipment
Increase in refundable deposits
Acquisition of intangible assets
Increase in prepayments for business facilities
Net cash flows used in investing activities
Cash flows from financing activities:
Increase in short-term borrowings
Decrease in short-term borrowings
Increase from long-term borrowings
Repayments of long-term borrowings
Payment of lease liabilities
Cash dividends paid
Net cash flows used in financing activities
Effect of exchange rate changes on cash and cash equivalents
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the nine months ended September 30
2024
2023
$ 434,463
189,744
242,787
266,031
15,172
15,893
17,195
24,457
(54,844)
(8,314)
(1)
(32)
12,667
4,772
-
24,574
232,976
327,381
(1,677)
(237)
(2,962)
18,826
176,956
(413,716)
3,607
4,637
(2,163)
(2,048)
261,062
(202,912)
17,388
(23,986)
1,809
1,730
1,178
1,358
455,198
(616,348)
45,747
27,620
(409,522)
112,859
239
(91)
(888,402)
959,957
61,546
86,689
(104)
25
(48,825)
47,901
(1,239,321)
1,234,960
(784,123)
618,612
(551,147)
945,993
(116,684)
1,135,737
56,532
8,314
(17,459)
(24,501)
(98,110)
12,184
(175,721)
1,131,734
(37,899)
(124,600)
763
2,093
982
(754)
(15,069)
(13,304)
(5,776)
(31,898)
(56,999)
(168,463)
866,127
1,735,325
(1,066,127)
(1,775,065)
67,750
53,935
(427,128)
(278,787)
(6,456)
(8,307)
(217,768)
-
(783,602)
(272,899)
11,538
10,628
(1,004,784)
701,000
3,283,001
1,970,759
$
2,278,217
2,671,759

2024
$ 434,463
242,787
15,172
17,195
(54,844)
(1)
12,667
-
232,976
(1,677)
(2,962)
176,956
3,607
(2,163)
261,062
17,388
1,809
1,178
455,198
45,747
(409,522)
239
(888,402)
61,546
(104)
(48,825)
(1,239,321)
(784,123)
(551,147)
(116,684)
56,532
(17,459)
(98,110)
(175,721)
(37,899)
763
982
(15,069)
(5,776)
(56,999)
866,127
(1,066,127)
67,750
(427,128)
(6,456)
(217,768)
(783,602)
11,538
(1,004,784)
3,283,001
$
2,278,217

See accompanying notes to consolidated financial statements.

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2024 and 2023

(expressed in thousands of New Taiwan Dollar unless otherwise specified)

(1) Company history

Rexon Industrial Corp., Ltd. (the “Company”). was incorporated on April 30, 1973 and registered under the Ministry of Economic Affairs, R.O.C. The address of the company’ s registered office is No.261, Renhua Rd., Dali Dist., Taichung City 412, and Taiwan (R.O.C.). The Company’s common shares were listed on the Taiwan Stock Exchange (TWSE) on February 4, 1995. The company’s and its subsidiaries (together referred to as the “Group”) is in the business of manufacturing and selling drills, woodworking tools and fitness equipments.

(2) Approval date and procedures of the consolidated financial statements

The consolidated financial statements for the nine Months ended September 30, 2024 and 2023 were authorized for issuance by the board of directors on November 6, 2024.

(3) New standards, amendments and interpretations adopted

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

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2024:

●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”
(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, 2025, would not have a significant impact on its consolidated financial statements:

●Amendments to IAS21 “Lack of Exchangeability”
(c) The impact of IFRS issued by IASB but not yet endorsed by the FSC

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Standards or Effective date per Interpretations Content of amendment IASB IFRS 18 “Presentation and The new standard introduces three January 1, 2027 Disclosure in Financial categories of income and expenses, two Statements” income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

●A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’ s main business activities.
●Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.
●Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes.

The Group is evaluating the impact on its consolidated financial position and consolidated financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Group completes its evaluation.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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 its consolidated financial statements:

●Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
●IFRS 17 “ Insurance Contracts” and amendments to IFRS 17 “ Insurance Contracts”
●IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
●Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”

(4) Summary of material accounting policies

Except the following accounting policies mentioned below, the material accounting policies adopted in the consolidated financial statements are the same as those in the consolidated financial statement for the year ended December 31, 2023. For the related information, please refer to note 4 of the consolidated financial statements for the year ended December 31, 2023.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the preparation and guidelines of IAS 34 “Interim Financial Reporting” which are endorsed and issued into effect by FSC, and do not include all of the information required by the Regulations and International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations and SIC Interpretations endorsed and issued into effect by the FSC (hereinafter referred to IFRS Accounting Standards endorsed by the FSC) for a complete set of the annual consolidated financial statements.

(b) Basis of consolidation

(i) List of subsidiaries in the consolidated financial statements

Name of investor	Name of subsidiary	Pricipal activity Merchandise trading Investing and holding Manufacture and sale of electric components Investing and holding Manufacture of drills, woodworking tools and fitness equipment	Shareholding	Shareholding	September 30, 2023 Note % 96 Note 1 % 100 % 82.87 Note 1 % 100 % 100
			September 30, 2024 % 96 % 100 % 82.87 % 100 % 100	December 31, 2023 % 96 % 100 % 82.87 % 100 % 100
The Company The Company The Company Gold Item Gold Tech Group Ltd.	Power Tool Specialists Inc. (P.T.S.) Gold Item Group Ltd.(Gold Item) Rexon Technology Corp., Ltd. (Rexon Tech) Gold Tech Group Ltd. (Gold Tech) Tongxiang Rexon Industrial Co.,Ltd.(Tongxiang Rexon)

Note 1:Which is non-significant subsidiaries, its financial statements have not been reviewed.

(ii) List of subsidiaries which are not included in the consolidated financial statements: None.

(c) Employee benefits

The pension cost in the interim period was calculated and disclosed on a year-to-date basis by using the actuarially determined pension cost rate at the end of the prior fiscal year, adjusted for significant market fluctuations since that time and for significant curtailments, settlements, or other significant one-off events.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Group classified as current under one of the following criteria, and all other assets are classified as non-current.

(i) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
(ii) It holds the asset primarily for the purpose of trading;
(iii) It expects to realize the asset within twelve months after the reporting period; or
(iv) 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.

The Group classifies the liability as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It expects to settle the liability in its normal operating cycle;
(ii) It holds the liability primarily for the purpose of trading;
(iii) The liability is due to be settled within twelve months after the reporting period; or
(iv) It does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(e) Income taxes

The income tax expenses have been prepared and disclosed in accordance with paragraph B12 of International Financial Reporting Standards 34, Interim Reporting.

Income tax expenses for the period are best estimated by multiplying pre-tax income for the interim reporting period using the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period and allocated to current and deferred taxes based on its proportionate size.

Temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases shall be measured based on the tax rates that have been enacted or substantively enacted at the time of the asset or liability is recovered or settled, and be recognized directly in equity or other comprehensive income as tax expense.

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

The preparation of the consolidated financial statements in conformity with the Regulations and IFRS Accounting Standards (in accordance with IAS 34 “Interim Financial Reporting” and endorsed by the FSC) requires management to make 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.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Except for the following, the preparation of the consolidated interim financial statements, estimates and underlying assumptions are reviewed on an ongoing basis which are in conformity with the consolidated financial statements for the year ended December 31, 2023. For related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2023.

The accounting policies involved significant judgments and the information that have significant effect on the amounts recognized in the consolidated financial statements are as follows:

(a) Judgment of whether the Group has substantive control over its investees

The Group holds 16% of the outstanding voting shares of Fine Clear Corp., Ltd. and is the single largest shareholder of the investee. Although the remaining 84% of Fine Clear Corp., Ltd.’s shares are not concentrated within specific shareholders, the Group still cannot obtain more than half of the total number of Fine Clear Corp., Ltd.’s directors, and it also cannot obtain more than half of the voting rights at a shareholders’ meeting. Therefore, it is determined that the Group has significant influence on Fine Clear Corp., Ltd.

(6) Explanation of significant accounts

Except for the following disclosures, there were no material differences in the disclosures of significant accounts between the interim consolidated financial statements for the current period and the 2023 consolidated financial statements. Please refer to Note 6 of the 2023 annual consolidated financial statements.

(a) Cash and cash equivalents

September 30, 2024 Petty cash and cash on hand $ 1,512 Checking and demand deposits 1,281,313 Time deposits 995,392 Cash and cash equivalents in the consolidated statement of cash flows $ 2,278,217	December 31, 2023 1,413 2,348,006 933,582 3,283,001	September 30, 2023
		1,545 2,661,340 8,874
		2,671,759

(b) Notes and accounts receivables (include related party)

September 30, 2024 Notes receivable from operating activities $ 1,761 Notes receivable from operating activities -related parties 13,975 Less: Loss allowance - $ 15,736 Accounts receivable-measured at amortized cost $ 834,721 Accounts receivable from related parties-measured at amortized cost 2,327 Less: Loss allowance (1,603) $ 835,445	December 31, 2023 84 11,013 - 11,097 1,011,677 5,934 (1,603) 1,016,008	September 30, 2023 524 12,896 - 13,420 1,153,033 4,157 (1,603) 1,155,587

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) 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, accounts 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 provisions were determined as follows:

September 30, 2024 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 692,769 0.03% 197 1 to 90 days past due 160,012 0.88% 1,403 91 to 180 days past due - 17.71% - 181 to 360 days past due 3 100% 3 Over 360 days past due - - Total $ 852,784 1,603 December 31, 2023 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 932,443 0.06% 588 1 to 90 days past due 96,265 1.05% 1,015 91 to 180 days past due - - - 181 to 360 days past due - - - Over 360 days past due - - - Total $ 1,028,708 1,603 September 30, 2023 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 935,937 0.06% 591 1 to 90 days past due 234,540 0.41% 960 91 to 180 days past due 133 39.1% 52 181 to 360 days past due - - - Over 360 days past due - - - Total $ 1,170,610 1,603	September 30, 2024 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 692,769 0.03% 197 1 to 90 days past due 160,012 0.88% 1,403 91 to 180 days past due - 17.71% - 181 to 360 days past due 3 100% 3 Over 360 days past due - - Total $ 852,784 1,603 December 31, 2023 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 932,443 0.06% 588 1 to 90 days past due 96,265 1.05% 1,015 91 to 180 days past due - - - 181 to 360 days past due - - - Over 360 days past due - - - Total $ 1,028,708 1,603 September 30, 2023 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 935,937 0.06% 591 1 to 90 days past due 234,540 0.41% 960 91 to 180 days past due 133 39.1% 52 181 to 360 days past due - - - Over 360 days past due - - - Total $ 1,170,610 1,603	September 30, 2024 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 692,769 0.03% 197 1 to 90 days past due 160,012 0.88% 1,403 91 to 180 days past due - 17.71% - 181 to 360 days past due 3 100% 3 Over 360 days past due - - Total $ 852,784 1,603 December 31, 2023 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 932,443 0.06% 588 1 to 90 days past due 96,265 1.05% 1,015 91 to 180 days past due - - - 181 to 360 days past due - - - Over 360 days past due - - - Total $ 1,028,708 1,603 September 30, 2023 Gross carrying amount Weighted- average loss rate Loss allowance provision Current $ 935,937 0.06% 591 1 to 90 days past due 234,540 0.41% 960 91 to 180 days past due 133 39.1% 52 181 to 360 days past due - - - Over 360 days past due - - - Total $ 1,170,610 1,603
	Weighted- average loss rate 0.06% 0.41% 39.1% - -	Loss allowance provision 591 960 52 - - 1,603

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) The movement in the allowance for notes and accounts receivables were as follows:

Balance at January 1 (which is balance at September 30)	2024 $ 1,603	2023
		1,603

(iii) None of the receivables was pledged as collateral as of September 30, 2024, December 31, 2023 and September 30, 2023.

(c) Other receivables

September 30, 2024 Other receivables $ 14,384 Less: Loss allowance (11,247) $ 3,137	December 31, 2023 13,909 (11,247) 2,662	September 30, 2023
		13,572 (11,247)
		2,325

(i) As of September 30, 2024, December 31, 2023 and September 30, 2023, there are no other receivables which are past due but not impaired.
(ii) The movement in the allowance for other receivables was as follows:

2024 Balance on January 1 (which is balance at September 30) $ 11,247	2023
	11,247

(d) Inventories

September 30, 2024 Finished goods $ 164,881 Work in progress 102,473 Materials 94,373 Parts 112,491 Merchandise 5,677 $ 479,895	December 31, 2023 292,924 97,753 111,889 232,764 5,627 740,957	September 30, 2023 350,391 117,336 191,776 120,439 5,786 785,728

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Details of inventory related losses (profit) were as follows:

For the three months ended September 30 2024 2023 Inventory scrap loss $ 532 5,172 Inventory shortage - - Revenue from sale of scraps (748) (3,549) $ (216) 1,623	For the nine months ended September 30, 2024 2023 4,317 7,722 7 15 (3,448) (16,757) 876 (9,020)
	2024 4,317 7 (3,448) 876

As of September 30, 2024, December 31, 2023 and September 30, 2023 inventories were not pledged as collateral.

(e) Investments accounted for using equity method

A summary of the Group’s financial information for investments accounted for using equity method at the reporting date is as follows:

Associates	September 30, 2024 $ 16,164	December 31, 2023 16,163	September 30, 2023
			16,452

(i) Associates

Affiliated company’s information:

Name of Associates Fine Clear Corp., Ltd.	Main operating location/ Nature of relationship with the Group Registered Country of the Company Sale of pneumatic nail gun and accessories, which is the Group’s investment Taiwan	Main operating location/ Nature of relationship with the Group Registered Country of the Company Sale of pneumatic nail gun and accessories, which is the Group’s investment Taiwan	Proportion of shareholding and voting rights
			September 30, 2024 December 31, 2023 September 30, 2023 % 16 % 16 % 16
		Taiwan

The Group’s financial information for investments accounted for using the equity method that are individually insignificant was as follows:

Carrying amount of individually insignificant associates’ equity	September 30, 2024 $ 16,164	December 31, 2023 16,163	September 30, 2023
			16,452

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended September 30 2024 2023 Attributable to the Group: Profit from continuing operations $ (3) 18 Other comprehensive income - - Comprehensive income $ (3) 18	For the nine months ended September 30,	For the nine months ended September 30,
	2024 1 - 1	2023
		32 -
		32

(ii) Investments pledge

As of September 30, 2024, December 31, 2023 and September 30, 2023 the Group did not provide any investments accounted for using the equity method as collateral for its loans.

(iii) The unreviewed financial statements of investment accounted for using equity method

Investments were accounted for by using the equity method and the share of profit or loss and other comprehensive income of those investments were calculated based on the financial statements that have not been reviewed.

(f) Property, plant and equipment

The cost, depreciation, and impairment loss of the property, plant and equipment of the Group were as follows:

Cost or deemed cost: Balance on January 1, 2024 Additions Disposal Reclassification Effect of movements in exchange rates Balance on September 30, 2024 Balance on January 1, 2023 Additions Disposal Reclassification Effect of movements in exchange rates Balance on September 30, 2023	Land $ 1,178,255 - - - 150 $ 1,178,405 $ 1,141,147 50,384 - - 148 $ 1,191,679	Buildiings 2,855,488 7,892 - - 30,292 2,893,672 2,236,235 42,352 - 597,027 15,652 2,891,266	Machinery and equipment 867,518 4,307 (2,340) 15,686 5,873 891,044 845,703 5,414 (4,382) 23,462 2,812 873,009	Mold and tooling equipment 844,702 9,300 (48,632) 4,439 4,688 814,497 857,009 23,467 (21,439) 8,210 2,143 869,390	Office equipment and other facilities 167,287 3,392 (15,815) 270 919 156,053 166,666 4,234 (2,317) 35 714 169,332	Total 5,913,250 24,891 (66,787) 20,395 41,922
						5,933,671
						5,246,760 125,851 (28,138) 628,734 21,469
						5,994,676

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Depreciation : Balance on January 1, 2024 Depreciation Disposal Impairment loss Effect of movements in exchange rates Balance on September 30, 2024 Balance on January 1, 2023 Depreciation Disposal Impairment loss Effect of movements in exchange rates Balance on September 30, 2023 Carrying amounts`：` Balance on January 1, 2024 Balance on September 30, 2024 Balance on January 1, 2023 Balance on September 30, 2023	Land $ - - - - - $ - $ - - - - - $ - $ 1,178,255 $ 1,178,405 $ 1,141,147 $ 1,191,679	Buildiings 1,095,568 88,947 - - 10,451 1,194,966 980,446 99,352 - - 5,262 1,085,060 1,759,920 1,698,706 1,255,789 1,806,206	Machinery and equipment 496,648 76,472 (2,104) - 3,876 574,892 400,913 75,944 (2,778) - 1,788 475,867 370,870 316,152 444,790 397,142	Mold and tooling equipment 698,145 61,112 (38,029) - 2,959 724,187 626,023 71,054 (16,388) 24,574 1,295 706,558 146,557 90,310 230,986 162,832	Office equipment and other facilities 128,859 8,712 (13,224) - 791 125,138 120,251 10,322 (2,107) - 654 129,120 38,428 30,915 46,415 40,212	Total 2,419,220 235,243 (53,357) - 18,077
						2,619,183
						2,127,633 256,672 (21,273) 24,574 8,999
						2,396,605
						3,494,030
						3,314,488
						3,119,127
						3,598,071

(i) In response to the need for expansion in the future, the Group bought the farmland near to its factory, costing $316,060 thousand, but the ownership of the land is temporarily not allowed to be transerred to the Group because the farmland is legally for agricultural purpose. Therefore, the farmland now is registered in the name of a shareholder who has the identity of natural person and has pledged to the Group for security concerns.
(ii) As of September 30, 2023, the Group recognized an impairment loss of $24,574 thousand on the book value of some mold equipment that had exceeded its useful life and been expected to be disposaled.
(iii) Gain or losses of disposal, please refer to Note 6(u).
(iv) As of September 30, 2024, December 31, 2023 and September 30, 2023, property, plant and equipment of the Group were pledged as collateral for long-term loans; please refer to note 8.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Right-of-use assets

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

Cost: Balance on January 1, 2024 Additions Reductions Effect of movement in exchange rates Balance on September 30, 2024 Balance on January 1, 2023 Additions Reductions Effect of movement in exchange rates Balance on September 30, 2023 Accumulated depreciation : Balance on January 1, 2024 Depreciation Reductions Effect of movement in exchange rates Balance on September 30, 2024 Balance on January 1, 2023 Depreciation Reductions Effect of movement in exchange rates Balance on September 30, 2023 Carrying amount: Balance on January 1,2024 Balance on September 30, 2024 Balance on January 1, 2023 Balance on September 30, 2023	Land $ 86,255 - - 2,430 $ 88,685 $ 87,243 - - 1,145 $ 88,388 $ 14,084 3,132 - 277 $ 17,493 $ 10,284 3,111 - 123 $ 13,518 $ 72,171 $ 71,192 $ 76,959 $ 74,870	Buildings - - - - - 14,799 - (14,799) - - - - - - - 13,566 1,233 (14,799) - - - - 1,233 -	Vehicles 20,393 8,695 (11,129) - 17,959 20,078 358 (328) - 20,108 15,046 4,412 (11,129) - 8,329 9,474 5,015 (328) - 14,161 5,347 9,630 10,604 5,947	Total 106,648 8,695 (11,129) 2,430 106,644 122,120 358 (15,127) 1,145 108,496 29,130 7,544 (11,129) 277 25,822 33,324 9,359 (15,127) 123 27,679 77,518 80,822 88,796 80,817

As of September 30, 2024, December 31, 2023 and September 30, 2023, the right-of-use assets of the Group were not pledged as collateral.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Intangible assets

The costs, amortization and impairment loss of the intangible assets of the Group , were as follows:

Goodwill Costs: Balance at January 1, 2024 $ 43,293 Additions - Reductions - Effect of movement in exchange rates - Balance at September 30, 2024 $ 43,293 Balance at January 1, 2023 $ 43,293 Additions - Reductions - Effect of movement in exchange rates - Balance at September 30, 2023 $ 43,293 Amortization: Balance at January 1, 2024 $ - Amortization - Reductions - Effect of movement in exchange rates - Balance at September 30, 2024 $ - Balance at January 1, 2023 $ - Amortization - Reductions - Effect of movement in exchange rates - Balance at September 30, 2023 $ - Carrying value: Balance at January 1, 2024 $ 43,293 Balance at September 30, 2024 $ 43,293 Balance at January 1, 2023 $ 43,293 Balance at September 30, 2023 $ 43,293	Computer Software 176,565 15,069 (1,539) 346 190,441 162,276 13,304 (2,077) 157 173,660 157,623 15,172 (1,539) 286 171,542 138,665 15,893 (2,077) 128 152,609 18,942 18,899 23,611 21,051	Total 219,858 15,069 (1,539) 346 233,734 205,569 13,304 (2,077) 157 216,953 157,623 15,172 (1,539) 286 171,542 138,665 15,893 (2,077) 128 152,609 62,235 62,192 66,904 64,344

As of September 30, 2024, December 31, 2023 and September 30, 2023, the intangible assets of the Group were not pledged as collateral.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Other current assets and other non-current assets

The details of other current assets and other non-current assets were as follows:

Other current assets: Prepayments Bussiness tax receivables Others Other non-current assets: Prepayments for equipment Others (j) Short-term borrowings Unsecured bank loans Secured bank loans Unused short-term credit lines Range of interest rate	September 30, 2024 $ 48,918 24,127 14,843 $ 87,888 September 30, 2024 $ 27,687 1,673 $ 29,360 September 30, 2024 $ 300,000 63,233 $ 363,233 $ 3,703,733 1.725%~4.3%	September 30, 2024 $ 48,918 24,127 14,843 $ 87,888 September 30, 2024 $ 27,687 1,673 $ 29,360 September 30, 2024 $ 300,000 63,233 $ 363,233 $ 3,703,733 1.725%~4.3%	December 31, 2023 28,306 64,623 12,347 105,276 December 31, 2023 42,306 2,851 45,157 December 31, 2023 200,000 360,703 560,703 3,360,703 1.725%~4.3%	September 30, 2023 37,419 62,160 12,870 112,449 September 30, 2023 46,074 3,281 49,355 September 30, 2023 400,000 362,924 762,924 3,239,940 1.66%~4.785%
		1.725%~4.3%

(i) Additional short-term borrowings and repayments

For the nine months ended September 30, 2024 and 2023, the Group had the additional shortterm borrowings amounting to $866,127 thousand and $1,735,325 thousand, with a range of interest rate 1.66%~3.5% and 1.66%~4.785%, maturing in a range from October, 2024 to September, 2025 and October, 2023 to September, 2024.

For the nine months ended September 30, 2024 and 2023,the Group had the repayments were $1,066,127 thousand and $1,775,065 thousand, respectively.

(ii) Collateral for short-term borrowings

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

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Other current liabilities

The details of other current liabilities were summarized as follows:

September 30, 2024 Temporary receipt $ 513,470 Advance receipts 3,566 Others 5,970 $ 523,006	December 31, 2023 498,452 3,566 5,994 508,012	September 30, 2023
		510,056 3,566 5,288
		518,910

Temporary receipt is mainly received from cancellation payment and mold sharing payment.

(l) Long-term borrowings

The details of long-term borrowings were as follows:

September 30, 2024 Secured bank loans $ 357,661 Unsecured bank loans Less : current portion (258,394) Total $ 99,267 Unused long-term credit lines $ 158,083 Range of interest rate 1.325%~6.532%	December 31, 2023 529,927 182,253 (504,255) 207,925 190,780 1.7%~6.66%	September 30, 2023 764,314 64,540 (539,068) 289,786 1,419,912 1.075%~5.24%

(i) Additional long-term borrowings and repayments

For the nine months ended September 30, 2024 and 2023 the Group had the additional longterm borrowings amounting to $67,750 thousand and $53,935 thousand, with a range of interest rate 4% and 4.35%, maturing in range from June, 2026 and April, 2024 to March, 2026.

For the nine months ended September 30, 2024 and 2023,the Group had the repayments were $427,128 thousand and $278,787 thousand, respectively.

(ii) Collateral for long-term borrowings

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

(m) Lease liabilities

September 30, 2024 Current $ 7,607 Non-current $ 20,818	December 31, 2023 6,482 19,704	September 30, 2023
		7,156
		20,087

For the maturity analysis, please refer to note 6(v).

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts recognized in profit or loss were as follows:

Interest expense on lease liabilities	For the nine months ended September 30	For the nine months ended September 30
	2024 $ 256	2023 242

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

Total cash outflow for leases		For the nine months ended September 30	For the nine months ended September 30
			2023
			8,549

The lease period for the Group’s lease of land, buildings and vehicles is two to ten years.

(n) Current refund liabilities

September 30, 2024 Current refund liabilities $ 182,354	September 30, 2024	December 31, 2023 246,173	September 30, 2023
			208,012

Refund liabilities are the amount expected to be paid to the customer due to sales defective rate of automatic facilities and fitness equipment.

(o) Employee benefits

(i) Defined benefit plans

In prior fiscal year, there was no material volatility of the market, reimbursement and settlement or other material one-time events. As a result, pension cost in the accompanying interim financial statements is measured and disclosed as of December 31, 2023 and 2022.

The details of the Group's expenses were as follows:

For the three months ended September 30 2024 2023 Operating costs $ 539 541 Selling expenses 35 32 Adminstrative expenses 119 95 Research and development expenses 131 121 Total $ 824 789	For the nine months ended September 30	For the nine months ended September 30
	2024 1,629 105 358 391 2,483	2023
		1,607 95 286 395
		2,383

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

The Group's pension expenses under the pension plan cost to the Bureau of Labor Insurance were as follows:

For the three months ended September 30 2024 2023 Operating costs $ 3,194 3,478 Selling expenses 302 253 Adminstrative expenses 866 627 Research and development expenses 792 840 Total $ 5,154 5,198	For the nine months ended September 30 2024 2023 10,067 9,127 878 738 2,538 1,873 2,376 2,486 15,859 14,224	For the nine months ended September 30 2024 2023 10,067 9,127 878 738 2,538 1,873 2,376 2,486 15,859 14,224
		2023 9,127 738 1,873 2,486 14,224

Except for the Company and Rexon Technology Corp., Ltd., other subsidiaries adopted the defined contribution method under their local law, and accordingly, the pension costs were $1,443 thousand, $1,240 thousand, $4,610 thousand and $3,773 thousand for the three months ended September 30, 2024 and 2023, and for the nine months ended September 30, 2024 and 2023.

(p) Income taxes

The details of the Group's income tax expenses were as follows:

For the three months ended September 30	For the nine months ended September 30 2024 2023 76,533 14,317 (483) 2,753 76,050 17,070 10,402 25,800 86,452 42,870	For the nine months ended September 30 2024 2023 76,533 14,317 (483) 2,753 76,050 17,070 10,402 25,800 86,452 42,870
2023	2024 76,533 (483) 76,050 10,402 86,452
29,298 500
29,798		17,070
25,916		25,800
55,714		42,870

The amounts of income tax recognized directly in other comprehemsive income for the nine months ended September 30, 2024 and 2023 were as follows:

For the three months ended September 30	For the nine months ended September 30	For the nine months ended September 30
2023	2024 (6,007)	2023
		(3,898)
		(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The income tax returns of the Company and Rexon Tech. for the years through 2022 were assesed and approved by the tax authorities.

(q) Capital and other equity

Except for the following disclosure, there was no significant change in capital and other equity for the periods from January 1 to September 30, 2024 and 2023. For the related information, please refer to note 6 (q) of the consolidated financial statements for the year ended December 31, 2023.

(i) Retained earnings

The Company's article of incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval.

The Company shall first take into consideration its current and future development plan, investment environment, capital requirement, the domestic and global competition, as well as the long-term interests of stockholders in determining the stock or cash dividends to be paid. The dividends appropriated for distribution shall not be less than 20% of the current and priorperiod earnings that remain undistributed. The cash dividends shall not be less than 20% of total dividends.

1) Special reserve

In accordance with the requirement of Financial Supervisory Commission, a portion of earnings shall be allocated as special earnings reserve during earnings distribution. The special earnings reserve was distributed from the current undistributed earnings, which was income after income tax plus other items, and undistributed earnings of prior period. A portion of undistributed prior-period earnings shall be reclassified as special earnings reserve and does not qualify for earnings distribution to account for cumulative changes to other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

As of September 30, 2024, December 31, 2023 and September 30, 2023 the amounts of such special reserves were $152,298 thousand, $143,923 thousand and $163,182 thousand, respectively.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Earnings distribution

The amount of cash dividends on appropriations of earnings for 2023 and 2022 had been approved during the board meeting on February 27, 2024 and February 23, 2023, as follows:

follows:
			2023			2022
		Amount		Total	Amount		Total
		per share		amount	per share		amount
Dividends distributed to
ordinary shareholders
Cash	$		1.2	217,768			-

(ii) OCI accumulated in reserves, net of tax

Balance at January 1, 2024 Exchange differences on foreign operations Balance at September 30, 2024 Balance at January 1, 2023 Exchange differences on foreign operations Balance at September 30, 2023	Exchange differences on translation of foreign financial statements $ (152,298) 24,029 $ (128,269) $ (143,923) 15,593 $ (128,330)

(r) Earings per share

Earings per share
For the three months ended September 30 2024 2023 Basic earings per share Net profit attributable to ordinary shareholders of the Company $ 7,585 210,961 Weighted-average number of ordinary shares 181,473 181,473 $ 0.05 1.16 Diluted earings per share Net profit attributable to ordinary shaleholders of the Company $ 7,585 210,961 Weighted-average number of ordinary shares 181,473 181,473 Effect of employee share bonus 1,048 375 Weighted average number of ordinary shares (diluted) 182,521 181,848 $ 0.04 1.16	For the three months ended September 30		For the nine months ended September 30
		2023	2024 347,532 181,473 1.92 347,532 181,473 1,204 182,677 1.90	2023
		210,961		144,166
		181,473		181,473
		1.16		0.79
		210,961		144,166
		181,473 375		181,473 375
		181,848		181,848
		1.16		0.79

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(s) Revenue from contracts with customers

(i) Details of revenue

For the three months ended September 30 For the nine months ended September 30 2024 2023 2024 2023 Primary geographical markets America $ 1,352,472 2,078,977 4,716,247 3,478,160 Europe 37,445 218,758 191,009 349,779 Asia 60,479 27,799 192,940 72,667 Other 1,189 10,446 3,323 46,218 $ 1,451,585 2,335,980 5,103,519 3,946,824 Major products Woodworking tools $ 344,317 292,488 741,838 519,164 Fitness equipment 1,004,951 1,537,181 3,919,791 2,626,452 Other 102,317 506,311 441,890 801,208 $ 1,451,585 2,335,980 5,103,519 3,946,824 Contract balances September 30, 2024 December 31, 2023 September 30, 2023 Contract liabilities $ 103,585 57,838 66,333	For the three months ended September 30	For the three months ended September 30		For the nine months ended September 30	For the nine months ended September 30
		2023			2023
		2,078,977 218,758 27,799 10,446			3,478,160 349,779 72,667 46,218
		2,335,980			3,946,824
		292,488 1,537,181 506,311			519,164 2,626,452 801,208
		2,335,980			3,946,824

(ii) Contract balances

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

The amount of revenue recognized for the three months and nine months ended September 30, 2024 and 2023, that were included in the contract liability balance at the beginning of the period were $256 thousand, $338 thousand, $8,699 thousand and $11,353 thousand, respectively.

(t) Remunerations to employees and directors

According to the Articles of Association, once the Company has annual profit, it should at least appropriate 5% of the profit to its employees and 5% or less to its directors as remuneration. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The pervading target given via cash or shares includes those dependent employees of the Company’s subsidiaries under certain requirements.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months and nine months ended September 30, 2024 and 2023 the Company estimated its employee remuneration amounting to $11,467 thousand, $16,124 thousand, $48,853 thousand and $16,124 thousand, and directors' remuneration amounting to $254 thousand, $2,419 thousand, $5,862 thousand and $2,419 thousand.The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees and directors of each period, multiplied by the percentage of remuneration of employees. If there are any subsequent adjustments to the actual remuneration amounts , the adjustments will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year.

For the years ended December 31, 2023 and 2022, the remunerations to employees amounted to $36,189 thousand and $0 and the remunerations to directors amounted to $6,400 thousand and $0, respectively. There were no differences between the estimated amounts and the actual remuneration paid, and the information is available on the Market Observation Post System website.

(u) Non-operating income and expenses

(i) Interest income

The details of interest income were as follows:

The details of interest income were as follows:	lows:	lows:
For the three months ended September 30 2024 2023 Interest income`－`bank deposits $ 14,176 723	For the three months ended September 30		For the nine months ended September 30
		2023	2024 54,844	2023
		723		8,314

(ii) Other income

The details of other income were as follows:

The details of other income were as follows:	ws:	ws:
For the three months ended September 30 2024 2023 Rent income $ 1,397 1,397 Other 8,709 6,609 $ 10,106 8,006	For the three months ended September 30		For the nine months ended September 30
		2023	2024 4,191 27,645 31,836	2023
		1,397 6,609		4,191 29,016
		8,006		33,207

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Other income and losses

The details of other income and losses were as follows:

For the three months ended September 30 2024 2023 Net foreign exchange (losses) gains $ (36,445) 68,962 Net losses on disposal of property, plant and equipment (1,244) (2,336) Impairment loss on property, plant and equipment - (24,574) Other (33) (96) Net other income and losses $ (37,722) 41,956	For the nine months ended September 30 2024 2023 93,402 70,726 (12,667) (4,772) - (24,574) (89) (421) 80,646 40,959	For the nine months ended September 30 2024 2023 93,402 70,726 (12,667) (4,772) - (24,574) (89) (421) 80,646 40,959
		2023 70,726 (4,772) (24,574) (421) 40,959

(iv) Finance expenses

The details of finance expenses were as follows:

For the three months ended September 30 2024 2023 Interest expenses $ (4,600) (8,567) Less: capitalization of interest - 200 $ (4,600) (8,367)	For the nine months ended September 30 2024 2023 (17,195) (26,127) - 1,670 (17,195) (24,457)
	2024 (17,195) - (17,195)

(v) Financial Instruments

(i) Credit risk

Except for the contention mentioned below, there was no significant change in the fair value of the Group’ s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For related information, please refer to note 6(v) of the consolidated financial statements for the year ended December 31, 2023.

1) Concentration of credit risk

As of September 30, 2024, December 31, 2023 and September 30, 2023, the Group reviewed the concentrations of credit risk arising from major customer at percentages below 32%, 59% and 61%, respectively, of the total trade receivables. The other top three clients contributed no more than 44%, 34% and 28%, respectively, of the total receivables.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Receivables

For credit risk exposure of notes and accounts receivable, please refer to note 6(b). Other financial assets at amortized cost inlcudes other receivables. For the details and loss allowance, please refer to note 6(c).

(ii) Liquidity risk

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

September 30, 2024 Non-derivative financial liabilities Secured bank loans Unsecured loans Leased liabilities (current and non-current) Payables December 31, 2023 Non-derivative financial liabilities Secured bank loans Unsecured loans Lease liabilities (current and non-current) Payables September 30, 2023 Non-derivative financial liabilities Secured bank loans Unsecured loans Lease liabilities (current and non-current) Payables	Carrying amount $ 420,894 300,000 28,425 1,965,561 $ 2,714,880 $ 890,630 382,253 26,186 3,215,076 $ 4,514,145 $ 1,127,238 464,540 27,243 2,800,346 $ 4,419,367	Contractual cash flows 428,768 300,449 29,251 1,965,561 2,724,029 1,008,449 254,025 27,013 3,215,076 4,504,563 1,143,945 472,703 28,107 2,800,346 4,445,101	1-12 months 326,163 300,449 7,917 1,965,561 2,600,090 820,940 228,814 6,726 3,215,076 4,271,556 876,259 469,137 7,399 2,800,346 4,153,141	1-2 years 102,605 - 6,442 - 109,047 166,595 1,113 4,479 - 172,187 233,596 3,380 4,477 - 241,453	2-5 years - - 10,482 - 10,482 20,914 24,098 9,193 - 54,205 34,090 186 8,881 - 43,157	more than 5 years - - 4,410 -
						4,410
						- - 6,615 -
						6,615
						- - 7,350 -
						7,350

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

(iii) Currency risk

1) Exposure to foreign currency risk

The Group’ s significant exposure to foreign currency risk of financial assets and liabilities were as follows:

September 30, 2024	September 30, 2024	September 30, 2024	December 31, 2023 Foreign Currency Exchange Rates NTD 131,928 30.71 4,051,509 26 33.98 883	December 31, 2023 Foreign Currency Exchange Rates NTD 131,928 30.71 4,051,509 26 33.98 883	September 30, 2023	September 30, 2023
Foreign Currency $ 53,161 28	Exchange Rates 31.65 35.38	NTD	Foreign Currency	Exchange Rates 30.71 33.98	Foreign Currency 88,780 23	Exchange Rates NTD 32.27 2,864,931 33.91 780 (Continued)
		1,682,546 991	131,928 26

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

September 30, 2024	September 30, 2024	September 30, 2024	December 31, 2023 Foreign Currency Exchange Rates NTD 210,412 0.2172 45,701 5 39.15 196 10,463 30.71 321,319 224 33.98 7,612	December 31, 2023 Foreign Currency Exchange Rates NTD 210,412 0.2172 45,701 5 39.15 196 10,463 30.71 321,319 224 33.98 7,612	September 30, 2023	September 30, 2023
Foreign Currency 5,493 5 2,307 223	Exchange Rates 0.2223 42.43 31.65 35.38	NTD	Foreign Currency 210,412 5 10,463 224	Exchange Rates 0.2172 39.15 30.71 33.98	Foreign Currency 210,621 5 1,626 224	Exchange Rates NTD 0.2162 45,536 39.23 196 32.27 52,471 33.91 7,596
		1,221 212 73,017 7,890

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, accounts and other receivables, borrowings, and accounts and other payables that are denominated in foreign currency. A strengthening (weakening) of 1% of the TWD against the USD, EUR, JPY, and GBP as of September 30, 2024 and 2023 would have increased (decreased) the net profit after tax by $12,832 thousand and $22,811 thousand, respectively. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for perior year.

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 nine months ended September 30, 2024 and 2023, the foreign exchange gain (loss) (including realized and unrealized portions) amounted to $93,402 thousand and $70,726 thousand, respectively.

(iv) Interest rate analysis

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 liabilities with variable interest rates, the analysis is based on the assumption that the amount of liabilities at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate which increases or decreases by 1% 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 or decreased by 1%, with all other variable factors remaining constant, the Group’ s net income would have increasd/decreased by $5,767 thousand and $9,551 thousand for the nine months ended September 30, 2024 and 2023, respectively. This is mainly due to the Group’s borrowings in variable rates.

(v) Fair value of financial instruments
1) Categories and fair value of financial instruments

The fair value of financial assets at fair value through profit or loss and financial assets measured at fair value through other comprehensive income is measured on a recurring basis. 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,

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

disclosure of fair value information is not required:

September 30, 2024	September 30, 2024	September 30, 2024
	Fair Value
Level 1 Level 2 Level 3 - - 96 - - - - - - - - - - - 96 - - - - - - - - - - - - - - - - - - December 31, 2023			Total 96 - - -
			96
			- - - - -
			-

	Fair Value
Level 1 - - - - - - - - - - -	Level 2 - - - - - - - - - - -	Level 3 96 - - - 96 - - - - - -	Total 96 - - -
			96
			- - - - -
			-

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	September 30, 2023	September 30, 2023	September 30, 2023
Carrying amount $ 96 2,671,759 1,171,332 2,680 $ 3,845,867 $ 762,924 2,800,346 539,068 289,786 27,243 $ 4,419,367	Level 1 - - - - - - - - - - -	Fair Value
		Level 2 - - - - - - - - - - -	Level 3 96 - - - 96 - - - - - -	Total 96 - - -
				96
				- - - - -
				-

2) Valuation techniques for financial instruments not measured at fair value

The Group’ s valuation techniques and assumption used for financial instruments not measured at fair value are as follows:

For financial liabilities measured at amortized cost, if there is quoted price generated by transactions, the recent transaction price and quoted price data is used as the basis for fair value measurement. However, if no quoted prices are available, the discounted cash flows are used to estimate fair values.

3)
Valuation techniques for financial instruments measured at fair value

The fair value of financial instruments is quoted prices if quoted prices are from an active market. Published prices from the main exchange and central government bonds regarded as usually-traded securities are both basis of fair values of listed equity instruments and debt instruments with quoted prices from an active market.

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

4) Transfer between Level 1 and Level 2

There were no transfers in the nine months ended September 30, 2024 and 2023.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The Group’s financial instruments that use Level 3 inputs to measure fair value include “financial assets measured at fair value through profit or loss – equity investments”.

Most of the Group’s fair values are Level 3 “only with single significant unobservable inputs” , and only equity instruments without active market have plural significant unobservable inputs. Since significant unobservable inputs of equity instruments without an active market are independent, they are not correlated.

(w) Financial risk management

There were no significant changes in the Group' s financial risk management and policies as those disclosed in Note 6(w) of the consolidated financial statements for the year ended December 31, 2023.

(x) Capital management

Management believes that the objectives, policies and processes of capital management of the Group has been applied consistently with those described in the consolidated financial statements for the year ended December 31, 2023. Also, management believes that there were no significant changes in the Group's capital management information as disclosed for the year ended December 31, 2023. Please refer to note 6 (x) to the consolidated financial statements for the year ended December 31, 2023 for further details.

(y) Investing and financing activities not affecting current cash flow

The Group’s investing and financing activities, which did not affect the current cash flow in the nine months ended September 30, 2024 and 2023, were as follows:

(i) For acquisition of right-of-use assets through lease, please refer to note 6(g).

Reconciliation of liabilities arising from financing activities were as follows:

Long-term borrowings (including due within 1 year) Short-term borrowings Lease liabilities Total liabilities from financing	January 1, 2024 $ 712,180 560,703 26,186 $ 1,299,069	Cash flows (359,378) (200,000) (6,456) (565,834)	Non-cash changes Acquistion Foreign exchange movement - 4,859 - 2,530 8,695 - 8,695 7,389	September 30, 2024
				357,661 363,233 28,425
				749,319

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

January 1, 2023 Long-term borrowings (including due within 1 year) $ 1,050,587 Short-term borrowings 801,417 Lease liabilities 35,192 Total liabilities from financing $ 1,887,196	Cash flows (224,852) (39,740) (8,307) (272,899)	Non-cash changes Acquistion Foreign exchange movement - 3,119 - 1,247 358 - 358 4,366	September 30, 2023
			828,854 762,924 27,243
			1,619,021

(7) Related-party transactions

(a) Names and relationship with the Group

The followings is the entities that have had transactions with the Group during the periods covered in the consolidated financial statements.

in the consolidated financial statements.
Name of related party	Relationship with the Group
Fine Clear Co., Ltd	An associate

(b) Significant transactions with related parties
(i) Sales of goods to related parties

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

Associates`－`Fine Clear Co., Ltd		For the three months ended September 30	For the three months ended September 30	For the three months ended September 30		For the nine months ended September 30	For the nine months ended September 30
		2024		2023		2024 35,706	2023 27,073
	$ 10,395			9,355

The price changed to related party is incomparable to normal price because there were no similar items sold to both related and non-related parties. The credit term was ranged from 30 days to 120 days, while the credit term for routine sales transactions was 150 days. Amounts receivable from related parties were uncollateralized, and no expected credit loss were required after the assessment by the management.

(ii) Receivables from related parties

Account	Related-party type		September 30, 2024 13,975 2,327	December 31, 2023 11,013 5,934	September 30, 2023
Notes receivable Accounts receivable	Associates`－`Fine Clear Co., Ltd Associates`－`Fine Clear Co., Ltd	$ $			12,896
					4,157

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Payables to related parties

Account	Related-party type Associates`－`Fine Clear Co., Ltd $ Associates`－`Fine Clear Co., Ltd $	September 30, 2024 300 12	December 31, 2023 61 116	September 30, 2023
Notes payable Other payables				3
				31

Key management personnel compensation comprised:

		For the three	months	For the nine	months
		ended September 30		ended September 30
		2024	2023	2024	2023
Short-term employee benefits	$	6,395	7,641	19,078	18,192
Post-employment benefits		278	358	833	799
Other long-term benefits		-	-	-	-
Termination benefits		-	-	-	-
Share-based payments		-	-	-	-
	$	6,673	7,999	19,911	18,991

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets Land Buildings	Object September 30, 2024 Guarantee for bank loans $ 296,916 Guarantee for bank loans 918,136 $ 1,215,052	December 31, 2023 296,916 952,398 1,249,314	September 30, 2023
			296,916 802,430
			1,099,346

(9) Significant commitments and contingencies:

(i) The Group's unrecognized contractual commitments were as follows:

September 30, 2024 Acquisition of property, plant and equipment $ 13,394	December 31, 2023 15,371	September 30, 2023
		16,068

(ii) The Group received civil complaint of trade price and notice trial which Yi-Zong Hardware Co., Ltd. claim that the Group should pay $37,154 thousands for purchase. The complaint is on trial in Taiwan Taichung District Court, therefore, the Group does not expect material impact in the Group's operation and business.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(10) Losses due to major disasters:None

(11) Subsequent events:None

(12) Other:

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

	For the three months ended September 30	For the three months ended September 30	For the three months ended September 30	For the three months ended September 30	For the three months ended September 30	For the three months ended September 30
By funtion By item	2024			2023
	Operating Cost	Operating Expense	Total	Operating Cost	Operating Expense	Total
Employee benefits
Salary	99,928	61,392	161,320	102,988	43,437	146,425
Labor and health insurance	10,157	5,507	15,664	10,751	5,046	15,797
Pension	4,995	2,426	7,421	5,117	2,110	7,227
Others	2,876	874	3,750	2,393	682	3,075
Depreciation	68,009	10,649	78,658	77,705	11,522	89,227
Amortization	1,369	3,489	4,858	1,137	4,156	5,293

	For the nine months ended September 30
By function By item	2024			2023
	Operating Cost	Operating expenses	Total	Operating Cost	Operating expenses	Total
Employee benefits
Salary	294,883	207,181	502,064	254,575	130,975	385,550
Labor and health insurance	32,153	16,410	48,563	28,383	15,410	43,793
Pension	15,731	7,221	22,952	13,964	6,416	20,380
Others	7,820	2,447	10,267	5,474	1,866	7,340
Depreciation	210,554	32,233	242,787	230,923	35,108	266,031
Amortization	3,770	11,402	15,172	3,416	12,477	15,893

(b) Seasonlity of operation

The Group's operations were not affected by seasonality or cyclicanty factor.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the nine months ended September 30, 2024:

(i) Lending other parties:None

(ii) Guarantees and endorsements for other parties:

(Amounts in Thousands of New Taiwan Dollars)

No.	Name of guarantor	Counter-party of guarantee and endorsement	Counter-party of guarantee and endorsement	Limitation on amount of guarantees and endorsements for a specific enterprise	Highest balance for guarantees and endorsements during the period	Balance of guarantees and endorsements as of reporting date	Actual usage amount during the period	Property pledged for guarantees and endorsements (Amount)	Ratio of accumulated amounts of guarantees and endorsements to net worth of the latest financial statements	Maximum amount for guarantees and end orsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	REXON INDUSTRIAL CORP., LTD	Tongxiang Rexon	2	1,579,239	(USD2,000) 63,300	-	-	-	% -	1,579,239	Y	N	Y

Note1 ： The total amount and the limited amount of the guarantee provided by the company to any individual subsidiary shall not exceed forty percent (40%) of the Company’s net worth.

Note2 ： No.0 represents the parent company.

Note3 ： The relationship between guarantee provider and guarantee party were as follows :

1) Companies which were in business relationship.
2) Subsidiaries which the company directly or indirectly held more than fifty percent (50%).
3) Companies with substantial control.
(iii) Securities held as of September 30, 2024 (excluding investment in subsidiaries, associates and joint ventures):

(Amounts in Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance	Ending balance	Ending balance	Ending balance	Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
REXON INDUSTRIAL CORP., LTD	Stock-Hwa Chung Venture Capital Corp	-	Financial assets at fair value though profit or loss-current	10	96	-	96

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(v) Acquisition of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vi) Disposal of individual real estate with amount exceeding the lower of NT$300 million or 20% of the capital stock:None
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(Amounts in Thousands of New Taiwan Dollars)

Name of company	Related party	Nature of relationship	Transaction details	Transaction details	Transaction details	Transaction details	Transactions with terms different from others	Transactions with terms different from others	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Note
			Purchase/Sale	Amount	Percentage of total purchases/sales	Payment terms	Unit price	Payment terms	Ending balance	Percentage of total notes/accounts receivable (payable)
REXON INDUSTRIAL CORP., LTD.	Tongxiang Rexon	The subsidiary	Purchase	588,606	17 %	90~150Days	(Note1)	(Note2)	(298,650)	(26) %

Note1 ： The price charged to related party is incomparable to normal price because there were no similar iterms purchased from both related and non-related parties.

Note2 ： The payment term for the related party is 90-150 days. Apart from according to the established payment policy, the related working capital, industry characteristics, and industrial prosperity are also considered.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(viii) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

(Amounts in Thousands of New Taiwan Dollars)

Name of company	Name of Counter-party	Name of relationship	Ending balance	Turnover rate	Overdue	Overdue	Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
Tongxiang Rexon	REXON INDUSTRIAL CORP., LTD.	Parent company	Account receivable 298,650	2.95 %	-	-	The recovery amount as of October 22, 2024 : 73,718	-

(ix) Trading in derivative instruments:None.

(x) Business relationships and significant intercompany transactions:

(Amounts in Thousands of New Taiwan Dollars)

				(Amounts in Thousands of New Taiwan Dollars)	(Amounts in Thousands of New Taiwan Dollars)	(Amounts in Thousands of New Taiwan Dollars)	(Amounts in Thousands of New Taiwan Dollars)
No.	Name of company	Name of counter-party	Nature of relationship (Note2)	Intercompany transactions
				Account name	Amount	Tradingterms	Percentage of the consolidated net revenue or total assets
0	REXON INDUSTRIAL CORP., LTD.	Tongxiang Rexon	1	Purchases	588,606	The prices were agreed upon by the two parties to the transaction.	11.53 %
0	REXON INDUSTRIAL CORP., LTD.	Tongxiang Rexon	1	Account payable	298,650	The payment terms were agreed upon by the two parties to the transaction.	3.96 %
0	REXON INDUSTRIAL CORP., LTD.	Rexon Technology	1	Purchases	78,573	The prices were agreed upon by the two parties to the transaction	1.54 %
0	REXON INDUSTRIAL CORP., LTD.	Rexon Technology	1	Account payable	14,247	The payment terms were agreed upon by the two parties to the transaction.	0.19 %
0	REXON INDUSTRIAL CORP., LTD.	P.T.S.	1	Service fee	36,088	The prices were agreed upon by the two parties to the transaction.	0.71 %
0	REXON INDUSTRIAL CORP., LTD.	P.T.S.	1	Other payable	129,992	The payment terms were agreed upon by the two parties to the transaction..	1.72 %

Note1 ： Representations of No. were as follows:

1) No.0 represents the parent company.
2) Subsidiaries were numbered in sequence from No.1.

Note2 ： Type of intra-group transactions were as follows:

1) represents the transactions form parent company to subsidiary.
2) represents the transactions from subsidiary to parent company.
3) represents the transactions between subsidiaries.

(b) Information on investees (excluding information on investees in Mainland China):

The following is the information on investees for the nine months ended September 30, 2024 (excluding information on investees in Mainland China):

(Amounts in Thousands of New Taiwan Dollars)

Name of investor	Name of investee	Location	Main businesses and products	Original investment amount	Original investment amount	Balance as of September 30, 2024	Balance as of September 30, 2024	Balance as of September 30, 2024	Net income (losses) of investee	Share of profits/losses of investee	Note
				September 30, 2024	December 31, 2023	Shares (thousands)	Percentage of ownership	Carrying value
REXON INDUSTRIAL CORP., LTD.	Fine Clear Co.,Ltd	R.O.C	Buying and selling accessories	14,197	14,197	1,600	% 16	16,164	10	2	Investment Using Equity Method
REXON INDUSTRIAL CORP., LTD.	Rexon Technology Corp., Ltd. (Rexon Tech)	R.O.C	Manufacture and sale of electric components	293,741	293,741	7,851	% 82.87	107,967	713	591	Direct subsidiaries of the Company
REXON INDUSTRIAL CORP., LTD.	Power Tool Specialists Inc.	U.S.A	Merchandise trading	196,465	196,465	0.1	% 96	174,829	8,920	8,563	Direct subsidiaries of the Company
REXON INDUSTRIAL CORP., LTD.	Gold Item Group Ltd.	British Virgin Islands	Investing and holding	747,858	747,858	US$25,000 (Note 1)	% 100	653,188	(14,574)	(14,574)	Direct subsidiaries of the Company
Gold Item	Gold Tech Group Ltd.	Hong Kong	Investing and holding	US$25,000	US$25,000	US$25,000 (Note 1)	% 100	632,600	(14,585)	(14,585)	Direct subsidiaries of Gold Item

Note1 ： Company Limited without issuing Shares. The amount of capital invested is disclosed.

(Continued)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the 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 Dollars)

Investee company	Main businesses and products	Total amount of paid-in capital	Method of investment	Accumulated outflow of investment from Taiwan as of January 1, 2024	Investment flows	Investment flows	Accumulated outflow of investment from Taiwan as of September 30, 2024	Net income (losses) of the investee	Percentage of ownership	Net income (losses) recognized	Carrying value as of September 30, 2024	Accumulated remittance of earnings as of September 30, 2024
					Outflow	Inflow
Tongxiang Rexon	Manufacture of drills, woodworking tools and fitness equipment	CNY154,465 (USD 25,000)	(Note 1)	USD 25,000 (NTD 745,565)	-	-	USD 25,000 (NTD 745,565)	(14,585)	100 %	(14,585)	632,600	-

Note 1 ： The Group invested companies in Mainland China through investees in Third Region, and investees in Third Region invested companies in Mainland China through their investees in Hong Kong.

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of September 30, 2024	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
US$ 25,000 (NT$745,565)	US$ 25,000 (NT$745,565)	2,386,010

(iii) Significant transactions:

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

(d) Major shareholders:

r shareholders:
Shareholding Shareholder’s Name	Shares	Percentage
Kun-Ju Co., Ltd.	26,369,472	% 14.53
Trust Account entrusted by Shu-Qi Chen in Li-Tai Investing Corp., Ltd.	12,275,599	% 6.76
Li-Tai Investing Corp., Ltd.	9,870,800	% 5.43

Note:(l) The information of major shareholders in this table is calculated by Taiwan Depository & Clearing Corporation based on the last business day at the end of each quarter, disclosing shareholders with more than 5% of the Company's ordinary shares and preferred shares that have been delivered without physical registration (including treasury shares). As for the share capital reported in the Company's financial statements and the Company's actual number of shares delivered without physical registration, there may be differences due to different calculation bases.
(2) In a situation where a shareholder entrusted the holdings, the individual account of the settlor opened by the trustee was disclosed. As for the shareholder's declaration of insider's equity holding more than 10% of the shares in accordance with the Securities and Exchange Act, his shareholding includes his own shareholding plus the shares delivered to the trust and the right to use the trust property, etc. For information on insider equity declaration, please refer to Market Observation Post System.

(14) Segment information

The reportable information of segment's profit and assets is in accordance with the consolidated financial statements. Please refer to Consolidted Statements of Financial Position and Consolidated Statements of Comprehensive Income .

(Continued)

AI assistant

REXON — Interim / Quarterly Report 2024

51841_rns_2024-11-26_93145dc3-bbe6-493e-b188-f7098555fb7c.pdf

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

KPMG

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

KPMG

Notes to Readers

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Balance Sheets

September 30, 2024, December 31, 2023, and September 30, 2023

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income For the nine months ended September 30, 2024 and 2023 (Expressed in thousands of New Taiwan Dollar , except earnings per share)

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2024 and 2023

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30, 2024 and 2023

(Expressed in thousands of New Taiwan Dollar)

(English Translation of Originally Issued in Chinese) REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

September 30, 2024 and 2023

(expressed in thousands of New Taiwan Dollar unless otherwise specified)

(1) Company history

(2) Approval date and procedures of the consolidated financial statements

(3) New standards, amendments and interpretations adopted

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies

(a) Statement of compliance

(b) Basis of consolidation

(c) Employee benefits

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

(e) Income taxes

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

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts

(a) Cash and cash equivalents

(b) Notes and accounts receivables (include related party)

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(c) Other receivables

(d) Inventories

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Investments accounted for using equity method

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(f) Property, plant and equipment

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Right-of-use assets

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(h) Intangible assets

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Other current assets and other non-current assets

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Other current liabilities

(l) Long-term borrowings

(ii) Collateral for long-term borrowings

(m) Lease liabilities

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Current refund liabilities

(o) Employee benefits

(i) Defined benefit plans

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Defined contribution plans

(p) Income taxes

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(q) Capital and other equity

(i) Retained earnings

1) Special reserve

REXON INDUSTRIAL CORP., LTD. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

2) Earnings distribution

REXON Interim / Quarterly Report 2024