SCI - Interim / Quarterly Report 2024

Stock Code:4119

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Three Months Ended March 31, 2024 and 2023

Address: No.61, LN. 309, HAIHUN.RD., LUZHU DIST., TAOYUAN CITY 33856, TAIWAN (R.O.C) Telephone: (03)354-3133

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

Independent Auditors’ Review Report

To the Board of Directors of SCI Pharmtech, Inc.:

Introduction

We have reviewed the accompanying consolidated balance sheets of SCI Pharmtech, Inc. and its subsidiaries as of March 31, 2024 and 2023, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the three months ended March 31, 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 Interim 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 6(f), the other equity accounted investments of the SCI Pharmtech, Inc. and its subsidiaries in its investee companies of $140,690 thousand and $139,320 thousand as of March 31, 2024 and 2023, respectively, and its equity in net earnings (losses) on these investee companies of $(4,118) thousand and $(1,997) thousand 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 consolidated financial statements of certain 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 SCI Pharmtech, Inc. and its subsidiaries as of March 31, 2024 and 2023, and of its consolidated financial performance and its consolidated cash flows for the three months ended March 31, 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 review resulting in this independent auditors’ report are Hsin, Yu-Ting and Huang, Keng-Chia.

KPMG

Taipei, Taiwan (Republic of China) May 9, 2024

Notes to Readers

The accompanying consolidated financial statements are intended only to present the consolidated 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 Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES Consolidated Balance Sheets

March 31, 2024, December 31, 2023, and March 31, 2023

(expressed in thousands of New Taiwan dollars)

March 31, 2024 Amount % $ 915,963 14 78,399 1 253,031 4 243 - 601,181 9 75,049 1 1,923,866 29 94,250 1 140,690 2 3,916,646 59 4,265 - 228,012 3 44,044 1 153,277 2 193,808 3 4,774,992 71 $ 6,698,858 100	March 31, 2023 Amount % 99,605 2 97,401 2 254,530 5 141 - 521,057 10 60,985 1 1,033,719 20 63,212 1 139,320 3 3,449,235 66 610 - 228,012 4 52,468 1 167,252 3 82,533 2 4,182,642 80 5,216,361 100 Liabilities and Equity Current liabilities: 2100 Total short-term borrowings (note 6(j)) 2170 Notes and accounts payable 2130 Current contract liabilities (note 6(s)) 2200 Other payables 2213 Payables on contractors and equipment 2230 Current tax liabilities 2250 Current provisions (notes 6(m) and 10) 2280 Current lease liabilities (note 6(l)) 2300 Other current liabilities (note 6(d)) 2322 Long-term borrowings, current portion (note 6(k)) Non-Current liabilities: 2541 Long-term borrowings (note 6(k)) 2580 Non-current lease liabilities (note 6(l)) 2570 Deferred tax liabilities 2630 Deferred income (note 6(k)) 2640 Provisions for employee benefits, non-current 2600 Total other non-current liabilities (note 7) Total liabilities Equity attributable to owners of parent (note 6(p)): 3100 Ordinary Share 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other components of equity Total equity Total liabilities and equity	March 31, 2024	March 31, 2024	December 31, 2023	March 31, 2023 Amount % 425,000 8 46,815 1 31,450 1 168,863 3 158,637 3 19,112 - 40,612 1 485 - 5,251 - - - 896,225 17 502,179 10 131 - 103,811 2 4,626 - 19,238 - 1,000 - 630,985 12 1,527,210 29 953,824 18 1,357,127 26 431,874 8 48,929 1 955,635 19 (58,238) (1) 3,689,151 71 5,216,361 100
Amount $ 915,963 78,399 253,031 243 601,181 75,049 1,923,866 94,250 140,690 3,916,646 4,265 228,012 44,044 153,277 193,808 4,774,992 $ 6,698,858	Amount 99,605 97,401 254,530 141 521,057 60,985 1,033,719 63,212 139,320 3,449,235 610 228,012 52,468 167,252 82,533 4,182,642 5,216,361	Amount	%	Amount % 175,000 3 44,251 1 38,367 1 169,538 3 68,840 1 11,536 - 29,058 - 1,946 - 11,351 - 20,000 - 569,887 9 842,670 13 2,858 - 146,000 2 6,837 - 21,536 - 1,000 - 1,020,901 15 1,590,788 24 1,195,087 18 2,233,590 33 462,435 7 54,727 1 1,128,657 17 25,457 - 5,099,953 76 6,690,741 100	Amount 425,000 46,815 31,450 168,863 158,637 19,112 40,612 485 5,251 - 896,225 502,179 131 103,811 4,626 19,238 1,000 630,985 1,527,210 953,824 1,357,127 431,874 48,929 955,635 (58,238) 3,689,151 5,216,361
		$ 66,000 77,385 37,118 148,669 26,550 22,817 23,300 1,890 15,605 46,831 466,165 912,706 2,414 146,000 7,321 21,354 1,000 1,090,795 1,556,960 1,195,087 2,233,590 462,435 54,727 1,173,166 22,893 5,141,898 $ 6,698,858	1 1 1 2 1 - - - - 1
			7
			14 - 2 - - -
			16
			23
			18 33 7 1 18 -
			77
			100

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars, except for earnings per share)

4110 Sales revenue (note 6(s)) 5110 Cost of sales (notes 6(e), 6(n) and 12) 5900 Gross profit Operating expenses (notes 6(n) and 12): 6100 Selling expenses 6200 Administrative expenses 6300 Research and development expenses 6900 Net operating income Non-operating income and expenses: 7101 Interest income 7190 Other income (note 7) 7235 Gains (losses) on financial assets at fair value through profit or loss 7510 Interest expense (note 6(l)) 7590 Miscellaneous disbursements 7630 Foreign exchange gains (losses) 7770 Share of loss of associates and joint ventures accounted for using equity method, net (note 6(f)) 7900 Profit before tax 7950 Less: Income tax expenses (note 6(o)) 8200 Profit 8300 Other comprehensive income: 8310 Items that may not be reclassified subsequently to profit or loss: 8316 Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income 8349 Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss (note 6(o)) 8300 Other comprehensive income, net 8500 Total comprehensive income Earnings per share (note 6(r)): 9750 Basic earnings per share 9850 Diluted earnings per share		For the three months ended March 31,	For the three months ended March 31,
		2024	2023
		Amount	Amount
			341,779 218,767
			123,012
			14,800 17,473 11,958
			44,231
			78,781

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Balance at January 1, 2023

Profit for the three months ended March 31, 2023

Other comprehensive income for the three months ended March 31, 2023 Total comprehensive income for the three months ended March 31, 2023 Balance at March 31, 2023

Balance at January 1, 2024

Profit for the three months ended March 31, 2024 Other comprehensive income for the three months ended March 31, 2024 Total comprehensive income for the three months ended March 31, 2024 Balance at March 31, 2024

Ordinary shares	Capital surplus	Retained earnings	Retained earnings	Retained earnings	Other equity interest Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income

		Legal reserve	Special reserve Unappropriated retained earnings
$ 953,824 - - - $ 953,824 $ 1,195,087 - - - $ 1,195,087	1,357,127	431,874 - - - 431,874 462,435 - - - 462,435	48,929 - - - 48,929 54,727 - - - 54,727	892,197	(54,727) - (3,511) (3,511) (58,238) 25,457 - (2,564) (2,564) 22,893
	- -			63,438 -
	-			63,438
	1,357,127			955,635
	2,233,590			1,128,657
	- -			44,509 -
	-			44,509
	2,233,590			1,173,166

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

Cash flows from (used in) operating activities: Profit before tax Adjustments for: Adjustments to reconcile profit (loss): Depreciation expense Amortization expense Net loss (profit) on financial assets or liabilities at fair value through profit or loss Interest expense Interest income Share of loss of associates and joint ventures accounted for using equity method Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Decrease (increase) in notes and accounts receivable Increase in inventories Decrease in other receivables and other current assets Decrease in contract liabilities Increase (decrease) in notes and accounts payable Decrease in other payable Decrease in provisions Increase in other current liabilities Decrease in provision for employee benefits, non-current Total changes in operating assets and liabilities Total adjustments Cash flow from (used in) operations Interest received Interest paid Income taxes paid Net cash flows from (used in) operating activities Cash flows from (used in) investing activities: Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of property, plant and equipment Increase in prepayments of property, plant and equipment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: (Decrease) increase in short-term borrowings Proceeds from long-term borrowings Payment of lease liabilities Net cash flows from (used in) financing activities Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period	For the three months ended March 31 2024 2023 $ 55,843 78,724 49,034 29,732 2,103 2,114 828 (2,294) 1,499 1,706 (534) (397) 4,118 1,997 1,522 - 58,570 32,858 54,338 (80,965) (71,648) (7,627) 9,998 29,904 (1,249) (323) 33,134 (1,821) (20,869) (127,154) (5,758) (70,772) 4,254 27 (182) (292) 2,018 (259,023) 60,588 (226,165) 116,431 (147,441) 534 397 (1,499) (1,706) (61) (36) 115,405 (148,786) 9,771 2,438 (101,102) (222,086) (37,129) (81,302) (128,460) (300,950) (109,000) 313,000 96,461 69,920 (500) (407) (13,039) 382,513 (26,094) (67,223) 942,057 166,828 $ 915,963 99,605
	2024 $ 55,843 49,034 2,103 828 1,499 (534) 4,118 1,522 58,570 54,338 (71,648) 9,998 (1,249) 33,134 (20,869) (5,758) 4,254 (182) 2,018 60,588 116,431 534 (1,499) (61) 115,405 9,771 (101,102) (37,129) (128,460) (109,000) 96,461 (500) (13,039) (26,094) 942,057 $ 915,963

Cash flows from (used in) operating activities:
Profit before tax
Adjustments for:
Adjustments to reconcile profit (loss):
Depreciation expense
Amortization expense
Net loss (profit) on financial assets or liabilities at fair value through profit or loss
Interest expense
Interest income
Share of loss of associates and joint ventures accounted for using equity method
Others
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Decrease (increase) in notes and accounts receivable
Increase in inventories
Decrease in other receivables and other current assets
Decrease in contract liabilities
Increase (decrease) in notes and accounts payable
Decrease in other payable
Decrease in provisions
Increase in other current liabilities
Decrease in provision for employee benefits, non-current
Total changes in operating assets and liabilities
Total adjustments
Cash flow from (used in) operations
Interest received
Interest paid
Income taxes paid
Net cash flows from (used in) operating activities
Cash flows from (used in) investing activities:
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of property, plant and equipment
Increase in prepayments of property, plant and equipment
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
(Decrease) increase in short-term borrowings
Proceeds from long-term borrowings
Payment of lease liabilities
Net cash flows from (used in) financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and cash equivalents at end of period

For the three months
ended March 31
2024
2023
$ 55,843
78,724
49,034
29,732
2,103
2,114
828
(2,294)
1,499
1,706
(534)
(397)
4,118
1,997
1,522
-
58,570
32,858
54,338
(80,965)
(71,648)
(7,627)
9,998
29,904
(1,249)
(323)
33,134
(1,821)
(20,869)
(127,154)
(5,758)
(70,772)
4,254
27
(182)
(292)
2,018
(259,023)
60,588
(226,165)
116,431
(147,441)
534
397
(1,499)
(1,706)
(61)
(36)
115,405
(148,786)
9,771
2,438
(101,102)
(222,086)
(37,129)
(81,302)
(128,460)
(300,950)
(109,000)
313,000
96,461
69,920
(500)
(407)
(13,039)
382,513
(26,094)
(67,223)
942,057
166,828
$
915,963
99,605

2024
$ 55,843
49,034
2,103
828
1,499
(534)
4,118
1,522
58,570
54,338
(71,648)
9,998
(1,249)
33,134
(20,869)
(5,758)
4,254
(182)
2,018
60,588
116,431
534
(1,499)
(61)
115,405
9,771
(101,102)
(37,129)
(128,460)
(109,000)
96,461
(500)
(13,039)
(26,094)
942,057
$
915,963

See accompanying notes to consolidated financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2024 and 2023

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

(1) Company history

SCI Pharmtech, Inc. (the “Company”) was incorporated in September 18, 1987 as a company limited by shares and registered under the Ministry of Economic Affairs, R.O.C. The major business activities of the Company are the research and development, manufacture and sale of Active Pharmaceutical Ingredients (“ API” ), Intermediates, specialty chemicals. The consolidated financial statements of the Company comprise the Company and its subsidiaries (together referred to as the “Group” and individually as the “ Group entities” ). Please refer to note 4(b) for related information of the Group primarily business activities. Mercuries & Associates, Holding Ltd. is the parent company of the Company.

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

These consolidated financial statements were authorized for issuance by the Board of Directors on May 9, 2024.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards 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 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:

Standards or
Interpretations
IFRS 18 “Presentation and
Disclosure in Financial
Statements”

Content of amendment
Effective date per
IASB
The
new
standard
introduces
three
categories of income and expenses, two
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.
January 1, 2027
(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Standards or
Interpretations
IFRS 18 “Presentation and
Disclosure in Financial
Statements”

Content of amendment
Effective date per
IASB
●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.
January 1, 2027

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)

SCI PHARMTECH, INC. 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”
●Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 – Comparative Information”
●Amendments to IAS21 “Lack of Exchangeability”

(4) Summary of material accounting policies:

(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 endorsed by the FSC) for a complete set of the annual consolidated financial statements.

Except the following accounting policies mentioned below, the significant 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.

(b) Basis of Consolidation

Name of investor	Name of subsidiary	Principal activity The research and development, manufacture and sale of API	Shareholding	Shareholding
			March 31, 2024 % 100.00	December 31, 2023 March 31, 2023 % 100.00 % 100.00
The Company	Yushan Pharmaceuticals Inc. (Yushan)

The Group classifies the asset 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

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(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.

(d) 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.

(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 by the effective annual tax rate as forecasted by the management. This should be recognized fully as tax expense for the current period.

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 IFRSs (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.

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 the related information, please refer to note 5 of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

Except for the following disclosures, there is no significant difference as compared with those disclosed in the consolidated financial statements for the year ended December 31, 2023. Please refer to note 6 of the 2023 annual consolidated financial statements.

(a) Cash and cash equivalents

Cash on hand Checking accounts and demand deposits Time deposits Cash and cash equivalents in the consolidated statement of cash flows	March 31, 2024 $ 538 879,277 36,148 $ 915,963	December 31, 2023 499 907,102 34,456 942,057	March 31, 2023
			541 68,657 30,407
			99,605

(i) The Group did not provide cash and cash equivalents as collateral for its loans.

(ii) Please refer to note 6(u) for the interest rate risk and sensitivity analysis of the financial assets and liabilities of the Group.

(b) Financial assets at fair value through profit or loss

Mandatorily measured at fair value through profit or loss: Non-derivative financial assets Beneficiary certificate Stocks listed on domestic markets Total	March 31, 2024 $ 1,055 77,344 $ 78,399	December 31, 2023 1,052 87,946 88,998	March 31, 2023
			1,042 96,359
			97,401

The Group did not provide any aforementioned financial assets as collateral for its loans as of March 31, 2024, December 31 and March 31, 2023, respectively.

Financial assets at fair value through other comprehensive income: Stocks listed on domestic markets Emerging stocks	March 31, 2024 $ 94,250 - $ 94,250	December 31, 2023 96,814 - 96,814	March 31, 2023
			- 63,212
			63,212

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) The Group designated the investments shown above as equity securities as at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long-term for strategic purposes.
(ii) There was no sinificant change for financial assets at fair value through other comprehensive income, non-current for the three months ended March 31, 2024 and 2023. Please refer to note 6(c) of the consolidated financial statements for the year ended December 31, 2023.
(iii) Energenesis Biomedical Co., Ltd., was originally an emerging company and became listed in June 2023.
(iv) Please refer to note 6(u) for market risk of the Group.
(v) As of March 31, 2024, December 31 and March 31, 2023, the Group did not provide any aforementioned financial assets as collateral for its loans.
(d) Notes and accounts receivable

Notes receivable Accounts receivable Less: Loss allowance	March 31, 2024 $ - 253,031 - $ 253,031	December 31, 2023 - 307,369 - 307,369	March 31, 2023
			536 253,994 -
			254,530

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, as well as incorporated forward looking information, including the reasonable prediction of historical credit loss experience and future economic situation (macroeconomic and relevant industry information). The loss allowance provision was determined as follows:

	March 31, 2024
Gross carrying amount $ 224,219 7,126 19,753 1,933 $ 253,031	Rate of loss allowance provision - - - -	Loss allowance provision
		- - - -
		-

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

December 31, 2023	December 31, 2023
Gross carrying amount $ 184,452 28,289 25,539 - 14 69,075 $ 307,369	Rate of loss allowance provision - - - - - - March 31, 2023	Loss allowance provision
		- - - - - -
		-

	Rate of loss allowance provision - - - - - - - -	Loss allowance provision
		- - - - - - - -
		-

Note: The account receivable has already estimated as refund liabilities for short-term sales discounts and allowances. (recorded as other current liabilities)

The movement in the allowance for notes and trade receivable was as follows:

Balance at January 1 (Balance at March 31)	For the three months ended March 31,	For the three months ended March 31,
	2024 $ -	2023
		-

As of March 31, 2024, December 31 and March 31, 2023, the Group did not provide any aforementioned notes and accounts receivable as collaterals for its loans.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

Raw materials Work in progress Finished goods	March 31, 2024 $ 94,209 109,117 397,855 $ 601,181	December 31, 2023	March 31, 2023
		92,404 85,692 351,437 529,533	130,719 62,000 328,338 521,057

Inventory cost recognized as operating costs for the three months ended March 31, 2024 and 2023 were as follows:

Inventory that has been sold Write-down of inventories (Reversal of write downs) Loss on disposal of inventories Unallocated production overheads	For the three months ended March 31,	For the three months ended March 31,
	2024 $ 190,039 (22,506) 18,847 31,626 $ 218,006	2023 190,323 9,634 1,381 17,429 218,767

As of March 31, 2024, December 31 and March 31, 2023, the Group did not provide any inventories as collaterals for its loans.

(f) Investments accounted for using equity method

The components of investments accounted for using equity method at the reporting date were as follows:

Associates	March 31, 2024 $ 140,690	December 31, 2023 144,808	March 31, 2023
			139,320

(i) There was no significant change for investments accounted for using the equity method for the three months ended March 31, 2024 and 2023. For the related information, please refer to note 6(g) of the consolidated financial statements for the year ended December 31, 2023.
(ii) The Group’s financial information on investments accounted for using equity method that are individually insignificant was as follows:

March 31, 2024 Carrying amount of individually insignificant associates' equity $ 140,690	December 31, 2023 144,808	March 31, 2023
		139,320

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Attributable to the Group: Profit (loss) Other comprehensive income (loss) Total comprehensive income (loss)	For the three months ended March 31, 2024 2023 $ (4,118) (1,997) - - $ (4,118) (1,997)
	2024 $ (4,118) - $ (4,118)

(iii) Pledge to secure

The Group did not provide any investment accounted for using equity method as collaterals for its loans.

(iv) The investments were accounted for 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.

(g) Property, plant and equipment

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

Buildings and construction	Machinery and equipment	Office equipment	Other
707,002 - 15,902	1,714,324 18,056 442,225	58,337 - 271	12,968 - -
722,904	2,174,605	58,608	12,968
700,232 - -	1,116,895 9,669 36,237	55,466 - 246	12,968 - -
700,232	1,162,801	55,712	12,968
311,735 6,474	489,788 40,639	28,553 1,154	7,970 260
318,209	530,427	29,707	8,230
287,084 6,138	385,715 21,701	23,635 1,230	6,931 260
293,222	407,416	24,865	7,191

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Land	Buildings and construction 395,267 404,695 413,148 407,010	Machinery and equipment	Office equipment	Other	Total
$ 687,883 $ 687,883 $ 687,883 $ 687,883	395,267	1,224,536	29,784	4,998	3,906,993
	404,695	1,644,178	28,901	4,738	3,916,646
	413,148	731,180	31,831	6,037	3,193,144
	407,010	755,385	30,847	5,777	3,449,235

Except for the following, the information on significant transactions of the Group's property, plant and equipment, please refer to note 6(h) of the consolidated financial statements for the year ended December 31, 2023.

(i) As of March 31, 2024, December 31 and March 31, 2023, the Group’ s prepayments for equipment purchases amounted to $192,888, $155,759 and $81,723, respectively, which were recorded as other non-current assets.
(ii) As of March 31, 2024, December 31 and March 31, 2023, part of the property, plant and equipment of the Group had been pledged as collateral. Please refer to note 8 for the details.
(h) Right-of-use assets

The Group leases many assets including land, company cars and copy machines. Information about leases for which the Group as a lessee is presented below:

Cost: Balance on January 1, 2024 (same as balance on March 31, 2024) Balance on January 1, 2023 Reductions Balance on March 31, 2023 Accumulated depreciation: Balance on January 1, 2024 Depreciation for the period Balance on March 31, 2024 Balance on January 1, 2023 Depreciation for the period Reductions Balance on March 31, 2023	Land		Others 2,626 4,922 (868) 4,054 945 328 1,273 3,909 403 (868) 3,444	Total 6,192 4,922 (868) 4,054 1,420 507 1,927 3,909 403 (868) 3,444
	$ 3,566 $ - - $ - $ 475 179 $ 654 $ - - - $ -

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Carrying amount: Balance on January 1, 2024 Balance on March 31, 2024 Balance on January 1, 2023 Balance on March 31, 2023	Land		Others 1,681 1,353 1,013 610	Total
	$ 3,091 $ 2,912 $ - $ -			4,772
				4,265
				1,013
				610

(i) Investments property

(i) Investment property, with a carrying amount of $228,012, with lease that has fixed rental income and contains an initial non-cancellable lease term of 50 years (extendable upon maturity) based on the agreement, comprises lands owned by the Group.
(ii) There were no significant additions, disposal, or recognition and reversal of impairment losses of investment property for the three months ended March 31, 2024 and 2023. Please refer to note 6(j) of the consolidated financial statements for the year ended December 31, 2023.
(iii) There were no significant changes in the fair value of the Group’ s investment property as disclosed in note 6(j) of the consolidated financial statements for the year ended December 31, 2023.
(iv) The Group rented out investment property for related parties. Please refer to note 7 for the details of rental income.
(v) The Group did not provide any investment properties as collaterals for its loan.

(j) Short-term borrowings

The details of short-term borrowings were as following:

Unsecured bank loans Secured bank loans Total Unused short-term credit lines Range of interest rates	March 31, 2024 $ 66,000 - $ 66,000 $ 664,000 1.73%~2.225%	December 31, 2023 125,000 50,000 175,000 695,000 1.7%~2.1%	March 31, 2023
			395,000 30,000
			425,000
			365,000
			1.6%~1.975%

(i) For the collateral of the Group's assets for short-term borrowings, please refer to note 8.
(ii) For the information on the Group's exposure to the interest rate risk and liquidity risk, please refer to note 6(u).

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Long-term borrowings

The details of long-term borrowings were as following:

Secured bank loans`－`Maturity year 2025.3~2027.2 Unsecured bank loans`－`Maturity year 2025.11 and 2026.9 Less: current portion Less: Deferred income Unused credit lines Range of interest rates	March 31, 2024 $ 783,033 180,000 (46,831) (3,496) $ 912,706 $ 266,967 1.675%~2.05%	December 31, 2023 686,572 180,000 (20,000) (3,902) 842,670 363,428 1.05%~1.925%	March 31, 2023
			375,687 130,000 - (3,508) 502,179 624,313 0.8%~1.8%

(i) For the three months ended March 31, 2024 and 2023, the Group had the additional long-term borrowings amounting to $96,461 and $69,920, respectively, and the repayment amounted to $0.
(ii) The Group’ s application for a low-interest loan for the construction of plants, purchasing equipment, and support medium-term working capital, had been approved by the National Development Fund, Executive Yuan in 2022, with Mega International Commercial Bank providing the non-revolving loan of $1,000,000, which was recognized and measured by using the market rates, with the margin interests calculated by using the rates between the actual rates and the market rates, recognized as deferred income, based on the Government grants. As of March 31, 2024, the Group had used the credit amount of $783,033.

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

(l) Lease liabilities

The carrying amount of lease liabilities was as follows:

Current Non-current	March 31, 2024 $ 1,890 $ 2,414	December 31, 2023 1,946 2,858	March 31, 2023
			485
			131

Please refer to note 6(u) for maturity analysis.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The amounts recognized in profit or loss were as follows: Interest on lease liabilities Expenses relating to short-term leases Variable lease payments not included in the measurement of lease liabilities Expense relating to leases of low-value assets, excluding short-term leases of low-value assets The amounts recognized in the statement of cash flows for the Group were as follows: Total cash outflow for leases	For the three months ended March 31,	For the three months ended March 31,
	2024 2023 $ 23 3 $ 80 194 $ - 6 $ 194 140 For the three months ended March 31,	2023
		3
		194
		6
		140
	2024 $ 797	2023
		750

(i) The Group leases land, company cars and copy machines: The leases typically run for a period of three to six years.

(ii) Other leases

The Group leases vehicles and office equipment. These leases are short-term or leases of lowvalue items. The Group has elected not to recognize right-of-use assets and lease liabilities for these leases.

(m) Provisions

Except for the following disclosure, there was no significant change for provisions for the three months ended March 31, 2024 and 2023. For the related information, please refer to note 6(o) of the consolidated financial statements for the year ended December 31, 2023.

Balance on January 1, 2024 Provisions made during the year Provisions used during the year Balance on March 31, 2024 Balance on January 1, 2023 Provisions used during the year Balance on March 31, 2023	Environmental protection costs $ 29,058 6,289 (12,047) $ 23,300 $ 43,225 (9,823) $ 33,402	Fire disaster indemnity - - - - 68,159 (60,949) 7,210	Total 29,058 6,289 (12,047)
			23,300
			111,384 (70,772)
			40,612

Please refer to note 10 for the above fire indemnity.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Employee benefits

(i) Defined benefit plans

Management believes that there was no material volatility of the market, no material reimbursement and settlement or other material one-time events since prior fiscal year. As a result, the pension cost in the accompanying interim period was measured and disclosed according to the actuarial report as of December 31, 2023 and 2022.

The expenses recognized in profit or loss for the Group were as follows:

		For	the three months ended	the three months ended
			March 31,
			2024	2023
Operating	cost	$	287	136
Operating	expenses		110	70
Total		$	397	206

(ii) Defined contribution plans

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

follows:
	For	the three months ended
		March 31,
		2024	2023
Operating cost	$	1,620	1,325
Selling expenses		532	474
Total	$	2,152	1,799

(o) Income taxes

(i) The Group’s income tax expense in the interim financial statements is measured and disclosed accordance to paragraph B12 of IAS 34 “Interim Financial Reporting”.
(ii) The Group’s income tax expenses for the three months ended March 31, 2024 and 2023 were calculated as follows:

calculated as follows:
	For	the three months ended
		March 31,
		2024	2023
Current income tax expense	$	11,334	15,286

(iii) For the three months ended March 31, 2024 and 2023, the Group did not recognize income tax expense in equity and other comprehensive income.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Examination and approval

The ROC tax authorities have examined the Company’ s and Yushan’ s income tax returns through 2022.

(p) Capital and other equity

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

(i) Capital surplus

The balances of capital surplus as of March 31, 2024, December 31 and March 31, 2023 were as follows:

Additional paid-in capital Cash capital increase reserved for employees' subscription Gain on disposal of assets Stock options Changes in equity of associates and joint ventures accounted for using equity method Employee stock options	March 31, 2024 $ 2,127,990 18,720 980 71,530 8,788 5,582 $ 2,233,590	December 31, 2023 2,127,990 18,720 980 71,530 8,788 5,582 2,233,590	March 31, 2023
			1,270,247 - 980 71,530 8,788 5,582
			1,357,127

(ii) Retained Earnings

The Company’s article of incorporation stipulates that Company’s net earnings should first be used to offset the prior years’ deficits, if any, after paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and special reserves are supposed to set aside in accordance with the relevant regulations or as required by the government. And then 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.

According to the Company’s dividend policy, the type of dividends should be determined after considering the Company’ s capital and financial structure, operating conditions, operating surplus, industrial characteristics and cycle. The distribution of net earnings should not be lower than 50% of the current profit before tax. Cash dividends to stockholders should not be lower than 10% of the total dividends.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Earnings distribution

Based on the resolution of Board of Directer held on March 12, 2024, the appropriation of earnings for the year 2023 was approved (Pending resolution of the shareholders' meeting). Moreover, based on the resolution of stockholders’ meeting held on June 19, 2023, the appropriated of earnings for the year 2022 was approved. The above dividends per share were appropriated as follows:

Dividends distributed to ordinary shareholders: Cash Stock Total	2023 Amount per share (dollars) Total amount $ 1.25 149,386 - - $ 149,386	2022	2022
		Amount per share (dollars) 0.25 1.25	Total amount
			23,846 119,228
			143,074

(iv) Other equity (net of tax)

Other equity (net of tax)
		Unrealized gains
		(losses) from
		financial assets
		measured at fair
		value through
		other
		comprehensive
		income
Balance at January 1, 2024	$	25,457
Unrealized gains (losses) from financial assets measured at fair value through
other comprehensive income		(2,564)
Balance at March 31, 2024	$	22,893
Balance at January 1, 2023	$	(54,727)
Unrealized gains (losses) from financial assets measured at fair value through other
comprehensive income		(3,511)
Balance at March 31, 2023	$	(58,238)

(q) Share-based payment

Based on the resolution of the Board of Directors held on August 10, 2023, the Company decided to conduct a cash capital increase, information related to the share-based payment resulting from the reserved employees' subscription,. Please refer to note 6(s) of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Earnings per share

The Company’s earnings per share was calculated as follows:

The Company’s earnings per share was calculated as follows:
	For	the three months ended
		March 31,
		2024	2023
Basic earnings per share
Profit attributable to ordinary shareholders of the Company	$	44,509	63,438
Weighted-average number of ordinary shares (thousand shares)		119,509	107,305
	$	0.37	0.59
Diluted earnings per share
Profit attributable to ordinary shareholders of the Company	$	44,509	63,438
Weighted-average number of ordinary shares (thousand shares)		119,509	107,305
Effect of potentially dilutive ordinary shares:
Effect of employee compensation		282	258
Weighted-average number of ordinary shares (thousand shares)
(diluted)		119,791	107,563
	$	0.37	0.59

The above mentioned weighted average number of ordinary shares has been retroactively adjusted for the shares obtained as stock dividends, with August 2, 2023 as the date of capital increase.

(s) Revenue from contracts with customers

(i) Disaggregation of revenue

	For	the three months ended	the three months ended
		March 31,
		2024	2023
Primary geographical markets:
Italy	$	60,174	78,383
Switzerland		45,575	23,330
Germany		34,737	61,312
Spain		28,417	14,574
Japan		24,505	10,618
Netherlands		24,250	27,025
Taiwan		21,332	13,267
United States		20,439	23,389
Australia		11,051	20,641
Others		39,399	69,240
	$	309,879	341,779
			(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

Major products: Active Pharmaceutical Ingredients Intermediates Specialty Chemical Contract balances Notes and accounts receivable Less: Loss allowance Total Contract liabilities (sales received in advance)	March 31, 2024 $ 253,031 - $ 253,031 $ 37,118	For the three months ended March 31, 2024 2023 $ 226,748 208,711 80,567 130,830 2,564 2,238 $ 309,879 341,779 December 31, 2023 March 31, 2023 307,369 254,530 - - 307,369 254,530 38,367 31,450	For the three months ended March 31,	For the three months ended March 31,	For the three months ended March 31,
					2023
					208,711 130,830 2,238
					341,779
					March 31, 2023 254,530 - 254,530 31,450

(ii) Contract balances

Please refer to note 6(d) for the information of accounts receivable and the impairment.

The amount of revenue recognized for the three months ended March 31, 2024 and 2023, that was included in the contract liability balance at the beginning of the period was $1,249 and $323, respectively.

The changes of contract liabilities are arising from the difference of time point, which the Group transfers the ownership of goods and which customers do the payment.

(t) Remuneration to employees and directors

In accordance with the Articles of incorporation, the Company should contribute no less than 3% of the profit as employee remuneration and less than 2% as directors’ remuneration when there is profit for the year. However, if the Company has accumulated deficits, the profit should be reserved to offset the deficit. The aforementioned employees’ compensation will be distributed in shares or cash. The recipients may include the employees of the subordinate of the Company who meet certain specific requirements.

For the three months ended March 31, 2024 and 2023, the remunerations to employees amounted to $5,720 and $7,622, respectively, and the remunerations to directors amounted to $630 and $1,250, respectively. These amounts were calculated using the Company’s net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. Shares distributed to employees as employees’ remuneration are calculated based on the closing price of the Company’s shares on the day before the approval by the Board of Directors.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the years ended December 31, 2023 and 2022, the remunerations to employees amounted to $24,407 and $26,091, respectively, and the remunerations to directors amounted to $3,936 and $4,250, respectively. The remunerations to employees in 2022 amounting to $22,178, are calculated with the closing market prices of ordinary shares on the day before the resolution of the board of directors to distribute the remuneration to employee on March 14, 2023, and 203 thousand shares were distributed. The remunerations above are identical to those of the actual distributions. The information is available on the Market Observation Post System website.

(u) Financial Instruments

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 the related information, please refer to note 6(x) of the consolidated financial statements for the year ended December 31, 2023.

(i) Credit risk

1) Credit risk exposure

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

2) Concentration of credit risk

As of March 31, 2024, December 31 and March 31, 2023, there were three, five and five major customers, respectively, that accounted for 64%, 76% and 61%, respectively, of notes and accounts receivable. Thus, credit risk is significantly centralized. In order to minimize credit risk, the Group periodically evaluates the major clients’ financial positions and the possibility of collecting notes and accounts receivables to ensure the uncollectible amount is recognized appropriately as loss allowance.

3) Receivables and debt securities
a) For credit risk exposure of notes and trade receivables, please refer to note 6(d).
b) Other financial assets at amortized cost include other receivables and time deposits. The counterparties of the time deposits held by the Group are the financial institutions with investment grade credit ratings. Therefore, the credit risk is considered to be low.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Liquidity Risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments:

March 31, 2024 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Lease liabilities (including current and non-current) Other payables Payables on contractors and equipment Long-term borrowings (including current portion) Guarantee deposits received December 31, 2023 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Lease liabilities (including current and non-current) Other payables Payables on contractors and equipment Long-term borrowings Guarantee deposits received	Carrying Amount $ 66,000 77,385 4,304 148,669 26,550 959,537 1,000 $ 1,283,445 $ 175,000 44,251 4,804 169,538 68,840 862,670 1,000 $ 1,326,103	Contractual cash flows (66,179) (77,385) (4,448) (148,669) (26,550) (1,001,061) (1,000) (1,325,292) (175,404) (44,251) (4,971) (169,538) (68,840) (898,412) (1,000) (1,362,416)	Within a year (66,179) (77,385) (1,960) (148,669) (26,550) (61,345) - (382,088) (175,404) (44,251) (2,026) (169,538) (68,840) (32,789) - (492,848)	1 ~ 2 years - - (924) - - (449,087) - (450,011) - - (1,193) - - (409,607) - (410,800)	Over 2 years - - (1,564) - - (490,629) (1,000) (493,193) - - (1,752) - - (456,016) (1,000) (458,768)

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

March 31, 2023 Non-derivative financial liabilities: Short-term borrowings Notes and accounts payable Lease liabilities (including current and non-current) Other payables Payables on contractors and equipment Long-term borrowings Guarantee deposits received	Carrying Amount $ 425,000 46,815 616 168,863 158,637 502,179 1,000 $ 1,303,110	Contractual cash flows (426,185) (46,815) (621) (168,863) (158,637) (527,436) (1,000) (1,329,557)	Within a year (426,185) (46,815) (490) (168,863) (158,637) (6,699) - (807,689)	1 ~ 2 years - - (131) - - (6,672) - (6,803)	Over 2 years - - - - - (514,065) (1,000) (515,065)

The Group is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amount.

(iii) Currency risk
1) Exposure to foreign currency risk

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

Foreign currency: in thousands of dollars

Financial assets Monetary items USD to TWD EUR to TWD Financial liabilities Monetary items USD to TWD	M	arch 31, 2024	TWD 304,643 49,608 26,902	De Foreign currency	cember 31, 2	023	Foreign currency	March 31, 2023
	Foreign currency	Exchange rate			Exchange rate	TWD 347,076 10,235 19,405		Exchange rate TWD 30.4 262,200 32.95 46,097 30.4 29,610
	$ 9,535 1,448 842	31.95 34.26 31.95		11,322 303 633	30.655 33.78 30.655		8,625 1,399 974

2) Sensitivity analysis

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 receivable, loans and borrowings, accounts payable, accrued expenses and other payables that are denominated in foreign currency.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

The analysis assumes that all other variables remain constant. A strengthening (weakening) 1% of the functional currency against each foreign currency for the three months ended March 31, 2024 and 2023, would have affected the net profit before tax increased or decreased $3,273 and $2,787, respectively. The analysis is performed on the same basis for both periods.

3) Foreign exchange gain and loss on monetary items

The exchange gains and losses of monetary items, including realized and unrealized, are changed into functional currency, which is the Group’s presentation currency. For the three months ended March 31, 2024 and 2023, the exchange gains (losses), including realized and unrealized, are $14,040 and $(776), respectively.

(iv) Interest rate analysis

For the details of financial assets and liabilities exposed to interest rate risk, please refer to financial risk management.

The details of financial assets and liabilities exposed to interest rate risk were as follows:

Variable rate instruments: Financial assets Financial liabilities	Carrying amount
	March 31, 2024 March 31, 2023 $ 879,080 68,243 1,029,033 930,687

The following sensitivity analysis is based on the exposure to the interest rate risk of nonderivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% 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 0.25%, the Group's net profit before tax would have decreased by $ 94 and $539, respectively, for the three months ended March 31, 2024 and 2023, with all other variable factors remaining constant. This is mainly due to the Group’s bank savings and borrowings with variable interest rates.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Other market price risks

For the years ended March 31, 2024 and 2023, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for both analysis, and assuming that the other variables were unchanged, the effects on the comprehensive income were as follows:

Price of securities at the reporting date Increasing 5% Decreasing 5%	For the three months ended March 31,	For the three months ended March 31,
	2024 Other comprehensive income after tax Profit or loss before tax $ 4,713 3,920 $ (4,713) (3,920)	2023 Other comprehensive income after tax Profit or loss before tax 3,161 4,870 (3,161) (4,870)
	Other comprehensive income after tax $ 4,713 $ (4,713)	Other comprehensive income after tax 3,161 (3,161)

(vi) Fair value

1) Fair value hierarchy

The fair value of financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income are 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, disclosure of fair value information is not required:

	March 31, 2024	March 31, 2024	March 31, 2024
Book value		Fair Value
	Level 1 78,399 94,250 - - - -	Level 2 - - - - - -	Level 3 Total - 78,399 - 94,250 - - - - - - - -
$ 78,399 94,250 915,963 253,031 243 920 1,170,157 $ 1,342,806

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		March 31, 2024	March 31, 2024	March 31, 2024
Book value			Fair Value
		Level 1 Level 2 Level 3 Total - - - - - - - - - - - - - - - - - - - - - - - - - - - - December 31, 2023
$ 66,000 77,385 4,304 148,669 26,550 959,537 1,000 $ 1,283,445

	Book value		Fair Value
		Level 1 88,998 96,814 - - - -	Level 2 - - - - - -	Level 3 Total - 88,998 - 96,814 - - - - - - - -
$ 88,998 96,814 942,057 307,369 151 920 1,250,497 $ 1,436,309

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

		December 31, 2023	December 31, 2023	December 31, 2023
Book value			Fair Value
		Level 1 Level 2 - - - - - - - - - - - - - - March 31, 2023		Level 3 Total - - - - - - - - - - - - - -
$ 175,000 44,251 4,804 169,538 68,840 862,670 1,000 $ 1,326,103

	Book value		Fair Value
		Level 1 97,401 - - - - -	Level 2 Level 3 Total - - 97,401 - 63,212 63,212 - - - - - - - - - - - -
$ 97,401 63,212 99,605 254,530 141 810 355,086 $ 515,699

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

	March 31, 2023	March 31, 2023
Book value		Fair Value
	Level 1 - - - - - - -	Level 2 Level 3 Total - - - - - - - - - - - - - - - - - - - - -
$ 425,000 46,815 616 168,863 158,637 502,179 1,000 $ 1,303,110

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

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

a) Financial assets and 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
a) Non-derivative financial instruments

Financial instruments trade in active markets is based on quoted market prices. The quoted price of a financial instrument obtained from main exchanges and on-therun bonds from Taipei Exchange can be used as a base to determine the fair value of the listed companies’ equity instrument and debt instrument of the quoted price in an active market.

If a quoted price of a financial instrument can be obtained in time and often from exchanges, brokers, underwriters, industrial union, pricing institute, or authorities and such price can reflect those actual trading and frequently happen in the market, then the financial instrument is considered to have a quoted price in an active market. If a financial instrument is not in accord with the definition mentioned above, then it is considered to be without a quoted price in an active market. In general, market with low trading volume or high bid-ask spreads is an indication of a non-active market.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

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

The measurement of fair value of a non-active market financial instruments held by the Group which do not have quoted market prices are based on the comparable market approach, with the use of price-book ratio multiple or earnings multiple of comparable companies as its basic measurement. These assumptions have been adjusted for the effect of discount without the marketability of the equity securities.

4) Transfers between Levels

For the three months ended March 31, 2024 and 2023, the Group has no any transfer between fair value.

Furthermore, the degree of the stock trading activity of Energenesis, an emerging company, and Sunny Pharmtech Inc., please refer to note 6(x) of the consolidated financial statements for the year ended December 31, 2023.

5)

Reconciliation of Level 3 fair values

For the three months end March 31, 2024, the Group has no financial assets and liabilities of Level 3 fair values.

January 1, 2023 Total gains and losses recognized: In profit or loss In other comprehensive income March 31, 2023	Fair value through other comprehensive income Unquoted equity instruments $ 66,723 - (3,511) $ 63,212

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

For the three months ended March 31, 2023, total gains and losses that were included in unrealized gains and losses from financial assets at fair value through other comprehensive income were as follows:

		For the
		three
		months
		ended
		March 31,
		2023
Total gains and losses recognized:
In other comprehensive income, and presented in “unrealized gains
and losses from financial assets at fair value through other
comprehensive income”	$	(3,511)

6) 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 other comprehensive income – equity investments”. Financial assets at fair value through other comprehensive income – equity investments without an active market have more than one significant unobservable inputs. The significant unobservable inputs of financial assets at fair value through other comprehensive income – equity investments without an active market are individually independent, and there is no correlation between them.

Quantified information of significant unobservable inputs was as follows:

Item Fair value through other comprehensive income– equity investments without an active market `〃`	Valuation technique Price-Book ratio method `〃`	Significant unobservable inputs Inter-relationship between significant unobservable inputs and fair value measurement
		‧ The multiplier of Price- Book Ratio (As of March 31, 2023 was 1.46~2.84) The higher the fair value is, the higher the fair value will be. ‧ Lack-of-Marketability discount rate (As of March 31, 2023 was 23%) The higher the Lack-of- Marketability discount rate is, the lower the fair value will be.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

7) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The Group’ s measurement on the fair value of financial instruments is deemed reasonable despite different valuation models or assumptions that may lead to various results. For fair value measurements in Level 3, changing one or more of the assumptions would have the following effects on profit or loss and other comprehensive income:

March 31, 2023 Financial assets at fair value through other comprehensive income Financial assets at fair value through other comprehensive income	Inputs Price-Book ratio multiples Lack-of Marketability discount rate	Move up or Other comprehensive income downs Favorable Unfavorable 5% $ 3,197 3,152 5% $ 972 928	Other comprehensive income	Other comprehensive income
				Unfavorable
				3,152
				928

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(v) Financial risk management

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

(w) 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(z) of the consolidated financial statements for the year ended December 31, 2023.

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

The Group’s investing and financing activities which did not affect the current cash flow for the three months ended March 31, 2024 and 2023, were as follows:

(i) For the acquisition of right-of-use assets by lease for the three months ended March 31, 2024 and 2023, please refer to note 6(h).

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Reconciliation of liabilities arising from financing activities for the three months ended March 31, 2024 and 2023, were as follows:

Short-term borrowings Long-term borrowings (including current portion) Lease liabilities Short-term borrowings Long-term borrowings Lease liabilities	January 1, 2024 $ 175,000 862,670 4,804 $ 1,042,474 January 1, 2023 $ 112,000 432,356 1,023 $ 545,379	Cash flows (109,000) 96,461 (500) (13,039) Cash flows 313,000 69,920 (407) 382,513	Non-cash	changes Others - 406 - 406 changes Others - (97) - (97)	March 31, 2024 66,000 959,537 4,304
			Acquisition - - - - Non-cash
					1,029,841
					March 31, 2023 425,000 502,179 616
			Acquisition - - - -
					927,795

(7) Related-party transactions:

(a) Names and relationship with related parties:

Name of related party

Weichyun Wong Framosa Co., Ltd. (Framosa)

Relationship with the Group

The chairman of the Company The associate of the Company

(b) Significant transaction with related parties:
(i) Lease

The Group rented out land and laboratory for related party, the details of the above lease transactions were as follows:

Rental income (recorded as other income) For the three months ended March 31, 2024 2023 Associates-Framosa $ 1,635 1,557 Associates-Framosa	Other receivables from related parties March 31, December 31, March 31, 2024 2023 2023 - - - Guarantee deposits received (recorded as other non-current liability)	Other receivables from related parties March 31, December 31, March 31, 2024 2023 2023 - - - Guarantee deposits received (recorded as other non-current liability)	Other receivables from related parties March 31, December 31, March 31, 2024 2023 2023 - - - Guarantee deposits received (recorded as other non-current liability)
	March 31, 2024 $ 1,000	December 31, 2023 1,000	March 31, 2023
			1,000

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Property transactions

The Group entrusted Framosa with the construction of its wastewater treatment equipment, the total contract price is $248,818 (before tax), as of March 31, 2024, December 31 and March 31, 2023, the amount of $90,238, $90,238 and 0, respectively, was recorded as construction in progress. As of March 31, 2024, the above transaction price of construction in progress has been paid.

(iii) Guarantee

March 31, 2024 Associates-Framosa $ 400,000	December 31, 2023 400,000	March 31, 2023
		-

Please refer to note 13(a)ii for the detail.

(iv) Others

The title deed of a certain portion of the land was registered in the name of Mr. Weichyun Wong due to certain legal requirements for the three months ended March 31, 2024 and 2023. Please refer to note 6(h).

			For the three months ended	For the three months ended
			March 31,
			2024	2023
Salary	and short-term employee benefits	$	5,385	5,717

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Assets Land Building	Subject Pledged as collaterals `〃`	March 31, 2024 $ 42,736 2,242 $ 44,978	December 31, 2023 42,736 2,315 45,051	March 31, 2023
				42,736 2,729
				45,465

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(9) Commitments and contingencies:

(a) As of March 31, 2024, December 31 and March 31, 2023, the unused balance of the Group’ s outstanding standby letters of credit amounted to $80,503, $35,813 and $2,432, respectively.
(b) The significant outstanding purchase commitments for property, plant and equipment were as follows:

Acquisitions of property, plant and equipment	March 31, 2024 $ 695,244	December 31, 2023 614,765	March 31, 2023
			526,969

(10) Losses Due to Major Disasters:

A major fire occurred on December 20, 2020, and caused damage to some of the Company's buildings, equipment, construction in progress and inventories, and spread to several nearby plants, resulting in damage to their property and interruption of their operations. In 2020, the Company derecognized damaged assets, including buildings, equipment and construction in progress and inventories and estimated the amount of fire indemnity for the nearby companies.

The Company is currently in the process of negotiating with the above-mentioned damaged companies for fire indemnity payments. For the indemnity payment, please refer to note 6(m) for the details. As of December 31, 2023, the indemnity payment had been fully completed.

The Company has already entered into related property insurance and public liability insurance contracts, and received insurance claims progressively from 2021. As of March 31, 2024, the above-mentioned insurance claims have not been settled yet. The Company expects to complete the application in 2024.

(11) Subsequent Events: None.

(12) Other:

(a) The followings are the summary statement of current period employee benefits, depreciation and amortization expenses by function:

By function By item	For the three months ended March 31, 2024	For the three months ended March 31, 2024	For the three months ended March 31, 2024	For the three months ended March 31, 2023	For the three months ended March 31, 2023	For the three months ended March 31, 2023
	Cost of sales	Operating expenses	Total	Cost of sales	Operating expenses	Total
Employee benefits Salary Labor and health insurance Pension Remuneration of directors Others Depreciation Amortization	44,071 4,511 1,907 - 1,127 42,584 1,038	17,524 1,492 642 630 2,297 6,450 1,065	61,595 6,003 2,549 630 3,424 49,034 2,103	38,619 3,370 1,461 - 898 22,719 1,042	20,725 1,270 544 1,250 1,705 7,013 1,072	59,344 4,640 2,005 1,250 2,603 29,732 2,114

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(b) Seasonality of operations

The Group’s operations were not affected by seasonality or cyclicality factors.

(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 three months ended March 31, 2024:

(i) Loans to other parties: None.

(ii) Guarantees and endorsements for other parties:

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 endorsements	Parent company endorsements/ guarantees to third parties on behalf of subsidiary	Subsidiary endorsements/ guarantees to third parties on behalf of parent company	Endorsements/ guarantees to third parties on behalf of companies in Mainland China
		Name	Relationship with the Company
0	The Company	Framosa Co., Ltd T o C	he associate f the ompany	514,189	400,000	400,000	78,749	-	% 7.78	2,056,759	N	N	N

Note 1: The total amount of endorsements and guarantees provided by the Company to third parties shall not exceed 40% of the latest net worth as reported in the financial statements. The maximum limit for endorsements and guarantees provided to a single enterprise shall not exceed 10% of the Company's net worth. In addition the total amount of endorsements and guarantees provided by the Company and subsidiaries to third parties shall not exceed 40% of the latest net worth as reported in the financial statements. The maximum limit for endorsements and guarantees provided to a single enterprise shall not exceed 10% of the Company's net worth.
(iii) Securities held as of March 31, 2024 (excluding investment in subsidiaries, associates and joint ventures):

Unit: thousand shares

Name of holder	Category and name of security	Relationship with company	Account title		Ending	balance		Note
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
The Company `〃` `〃` `〃` `〃` `〃`	Beneficiary Certificate (UPAMC James Bond Money Market Fund) Stock (Cathay Financial Holding Co., Ltd. Preferred Stock A) Stock (Cathay Financial Holding Co., Ltd. Preferred Stock B) Stock (CTBC Financial Holding Co., Ltd. Preferred Shares B) Stock (Shin Kong Financial Holding Co., Ltd. Preferred Shares A) Stock (Energenesis Biomedical Co., Ltd.)	- - - - - -	Current Financial asset at fair value through profit or loss `〃` `〃` `〃` `〃` Financial assets at fair value through other comprehensive income	61 553 0.023 484 577 1,603	1,055 33,291 1 29,137 14,915 94,250	- - - - - 2.10 %	1,055 33,291 1 29,137 14,915 94,250	- - - - - -

(iv) Individual securities acquired or disposed of with accumulated amount exceeding the lower of $300 million or 20% of the capital stock: None.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(v) Acquisition of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock:

Name of company	Name of property	Transaction date	Transaction amount	Status of payment	Counter- party	Relationship with the Company	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	If the counter-party is a related party, disclose the previous transfer information	References for determining price	Purpose of acquisition and current condition	Others
							Owner	Relationship with the Company	Date of transfer	Amount
The Company	Buildings	2021.10.19	$ 630,000	$ 472,500	ECO Technical Services Co., Ltd.	None	Not applicable	Not applicable	Not applicable	-	Price negotiation	to expand production

(vi) Disposal of individual real estate with amount exceeding the lower of $300 million or 20% of the capital stock: None.
(vii) Related-party transactions for purchases and sales with amounts exceeding the lower of $100 million or 20% of the capital stock: None.
(viii) Receivables from related parties with amounts exceeding the lower of $100 million or 20% of the capital stock: None.
(ix) Trading in derivative instruments: None.
(x) Business relationships and significant intercompany transactions: None.
(b) Information on investees:

The following is the information on investees for the three months ended March 31, 2024 (excluding information on investees in Mainland China):

								Unit:	thousand dollars/ thousand shares	thousand dollars/ thousand shares	thousand dollars/ thousand shares
Name of investor	Name of investee	Location	Main businesses and products	Original invest	ment amount	Ending balance			Net income (losses) of investee	Share of profits/losses of investee	Note
				March 31, 2024	December 31, 2023	Shares (thousands)	Percentage of ownership	Carrying value
The Company The Company Yushan Pharmaceuticals Inc.	Yushan Pharmaceuticals Inc. Framosa Co., Ltd. HoneyBear Biosciences, Inc.	R.O.C. R.O.C. R.O.C	The research and development, manufacture and sale of API Circular economy by purifying and utilizing used solvents Biotechnology services	351,761 143,750 33,000	351,761 143,750 33,000	35,190 14,375 3,300	% 100 % 25 % 11.54	352,073 114,528 26,162	(224) (7,823) (9,830)	(1,218) (2,287) (1,831)	Note 1

Note 1 ： The transactions had been eliminated in the consolidated financial statements.

(Continued)

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Major shareholders:

Unit: shares

		Unit: shares
Shareholding Shareholders' Name	Shares	Percentage
Mercuries & Associates Holding Ltd.	35,590,777	% 29.78
Zhan Liwei	6,738,000	% 5.63

(14) Segment information:

The Group only uses one segment to assess its performance and allocate resources. Hence, there is no need to disclose the information.

AI assistant

SCI — Interim / Quarterly Report 2024

52383_rns_2024-11-08_2ea98477-0d39-4fe0-b791-d0c50c9f7d08.pdf

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Financial Statements

Table of contents

Independent Auditors’ Review Report

Introduction

Scope of Review

Basis for Qualified Conclusion

Qualified Conclusion

KPMG

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES Consolidated Balance Sheets

March 31, 2024, December 31, 2023, and March 31, 2023

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three months ended March 31, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars, except for earnings per share)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the three months ended March 31, 2024 and 2023

Equity attributable to owners of parent

Balance at January 1, 2023

Balance at January 1, 2024

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the three months ended March 31, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

March 31, 2024 and 2023

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

(1) Company history

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

(3) New standards, amendments and interpretations adopted:

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(d) Employee benefits

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

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts:

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(e) Inventories

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(g) Property, plant and equipment

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(i) Investments property

(j) Short-term borrowings

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(k) Long-term borrowings

(l) Lease liabilities

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(ii) Other leases

(m) Provisions

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(n) Employee benefits

(i) Defined benefit plans

(ii) Defined contribution plans

(o) Income taxes

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iv) Examination and approval

(p) Capital and other equity

(i) Capital surplus

(ii) Retained Earnings

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(iii) Earnings distribution

(q) Share-based payment

SCI PHARMTECH, INC. AND SUBSIDIARIES Notes to the Consolidated Financial Statements

(r) Earnings per share

SCI Interim / Quarterly Report 2024