SCI - Interim / Quarterly Report 2024

Stock Code:4119

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Review Report For the Six Months Ended June 30, 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 June 30, 2024 and 2023, and the related consolidated statements of comprehensive income for the three months and six months ended June 30, 2024 and 2023, and changes in equity and cash flows for the six months ended June 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 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 $136,985 thousand and $156,150 thousand as of June 30, 2024 and 2023, respectively, and its equity in net earnings (losses) on these investee companies of $(3,705) thousand, $(500) thousand, $(7,823) thousand and $(2,497) thousand for the three months and six months ended June 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 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 June 30, 2024 and 2023, and of its consolidated financial performance for the three months and six months ended June 30, 2024 and 2023, as well as its consolidated cash flows for the six months ended June 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 review resulting in this independent auditors’ report are Hsin, Yu-Ting and Huang, Keng-Chia.

KPMG

Taipei, Taiwan (Republic of China) August 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

June 30, 2024, December 31, 2023, and June 30, 2023

(expressed in thousands of New Taiwan dollars)

June 30, 2024 Amount % $ 846,821 12 64,634 1 368,812 6 7 - 635,271 9 104,014 2 2,019,559 30 89,761 1 136,985 2 3,938,905 58 3,759 - 228,012 3 41,941 1 153,277 2 220,155 3 4,812,795 70 $ 6,832,354 100	June 30, 2023 Amount % 143,703 3 89,283 2 286,091 5 1,000 - 487,442 9 83,192 2 1,090,711 21 241,377 4 156,150 3 3,446,645 64 4,817 - 228,012 4 50,358 1 167,252 3 30,349 - 4,324,960 79 5,415,671 100 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 2216 Dividends payable (note 6(p)) 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 3150 Stock dividend to be distributed 3200 Capital surplus 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings 3400 Other components of equity Total equity Total liabilities and equity	June 30, 2024	June 30, 2024	December 31, 2023	June 30, 2023	June 30, 2023
Amount $ 846,821 64,634 368,812 7 635,271 104,014 2,019,559 89,761 136,985 3,938,905 3,759 228,012 41,941 153,277 220,155 4,812,795 $ 6,832,354	Amount 143,703 89,283 286,091 1,000 487,442 83,192 1,090,711 241,377 156,150 3,446,645 4,817 228,012 50,358 167,252 30,349 4,324,960 5,415,671	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 105,000 36,693 31,460 192,077 86,711 23,846 66,211 34,101 1,518 7,324 - 584,941 589,095 3,309 103,811 5,360 18,928 1,000 721,503 1,306,444 953,824 119,228 1,357,127 462,435 54,727 1,021,785 140,101 4,109,227 5,415,671	%
		$ 129,000 51,905 37,475 168,385 52,387 149,387 22,822 30,483 1,737 7,366 127,326 778,273 868,380 2,065 103,811 7,448 21,162 1,000 1,003,866 1,782,139 1,195,087 - 2,233,590 504,024 - 1,099,110 18,404 5,050,215 $ 6,832,354	2 1 1 2 1 2 - - - - 2			2 1 1 4 2 - 1 - - - -
			11			11
			13 - 2 - - -			11 - 2 - - -
			15			13
			26			24
			18 - 33 7 - 16 -			18 2 24 9 1 19 3
			74			76
			100			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 and six months ended June 30, 2024 and 2023

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

For the three months ended June 30, 2024 2023 Amount % Amount % $ 392,716 100 313,115 100 284,772 73 233,352 75 107,944 27 79,763 25 19,712 5 15,670 5 22,452 5 15,115 5 10,709 3 12,631 4 52,873 13 43,416 14 55,071 14 36,347 11 3,498 1 884 - 2,689 1 213,251 68 2,854 1 (3,881) (1) (1,347) (1) (1,876) (1) (1,338) - (357) - - - (537) - 4,699 1 8,005 3 (3,705) (1) (500) - 7,350 2 214,989 69 62,421 16 251,336 80 228 - 51,818 16 62,193 16 199,518 64 (4,489) (1) 245,074 78 - - - - (4,489) (1) 245,074 78 $ 57,704 15 444,592 142 $ 0.52 1.86 $ 0.52 1.86	For the six months ended June 30,	For the six months ended June 30,
2024 Amount % $ 392,716 100 284,772 73 107,944 27 19,712 5 22,452 5 10,709 3 52,873 13 55,071 14 3,498 1 2,689 1 2,854 1 (1,347) (1) (1,338) - - - 4,699 1 (3,705) (1) 7,350 2 62,421 16 228 - 62,193 16 (4,489) (1) - - (4,489) (1) $ 57,704 15 $ 0.52 $ 0.52	2024	2023
	Amount	Amount
	702,595 502,778	654,894 452,119
	199,817	202,775
	37,089 41,314 21,313	30,470 32,588 24,589
	99,716	87,647
	100,101	115,128

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 six months ended June 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

Equity attributable to owners of parent

Share capital Ordinary shares Stock dividend to be distributed	Share capital Ordinary shares Stock dividend to be distributed	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	- - - - - - - 119,228 - - 119,228 - - - - - - - -	1,357,127 - - - - - - - - - 1,357,127 2,233,590 - - - - - - 2,233,590	431,874 - - - 30,561 - - - - - 462,435 462,435 - - - 41,589 - - 504,024	48,929 - - - - 5,798 - - - - 54,727 54,727 - - - - (54,727) - -	892,197	(54,727) - 241,563 241,563 - - - - - (46,735) 140,101 25,457 - (7,053) (7,053) - - - 18,404
					262,956 -
					262,956

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 six months ended June 30, 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 Reversal of major disasters Others Total adjustments to reconcile profit Changes in operating assets and liabilities: Increase in notes and accounts receivable (Increase) decrease in inventories (Increase) decrease in other receivables and other current assets Decrease in contract liabilities Increase (decrease) in notes and accounts payable Decrease in other payable Increase (decrease) in provisions (Decrease) 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 other comprehensive income Proceeds from disposal of financial assets at fair value through profit or loss Acquisition of investments accounted for using equity method Acquisition of property, plant and equipment Increase in refundable deposits Increase in prepayments of property, plant and equipment Net cash flows from (used in) investing activities Cash flows from (used in) financing activities: Decrease 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 six months ended June 30 2024 2023 $ 118,264 330,060 106,815 60,196 4,206 4,224 (2,026) 1,587 2,846 3,582 (4,032) (1,281) 7,823 2,497 - (373) 3,043 537 118,675 70,969 (61,443) (112,526) (105,738) 25,988 (18,731) 6,799 (892) (313) 7,654 (11,943) (1,153) (103,940) 1,425 (76,910) (3,985) 2,100 (374) (602) (183,237) (271,347) (64,562) (200,378) 53,702 129,682 4,032 1,281 (2,846) (3,582) (42,473) (4,716) 12,415 122,665 - 66,909 26,390 6,675 - (18,000) (155,350) (321,932) (800) (110) (62,676) (28,523) (192,436) (294,981) (46,000) (7,000) 131,787 157,085 (1,002) (894) 84,785 149,191 (95,236) (23,125) 942,057 166,828 $ 846,821 143,703
	2024 $ 118,264 106,815 4,206 (2,026) 2,846 (4,032) 7,823 - 3,043 118,675 (61,443) (105,738) (18,731) (892) 7,654 (1,153) 1,425 (3,985) (374) (183,237) (64,562) 53,702 4,032 (2,846) (42,473) 12,415 - 26,390 - (155,350) (800) (62,676) (192,436) (46,000) 131,787 (1,002) 84,785 (95,236) 942,057 $ 846,821

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
Reversal of major disasters
Others
Total adjustments to reconcile profit
Changes in operating assets and liabilities:
Increase in notes and accounts receivable
(Increase) decrease in inventories
(Increase) decrease in other receivables and other current assets
Decrease in contract liabilities
Increase (decrease) in notes and accounts payable
Decrease in other payable
Increase (decrease) in provisions
(Decrease) 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 other comprehensive income
Proceeds from disposal of financial assets at fair value through profit or loss
Acquisition of investments accounted for using equity method
Acquisition of property, plant and equipment
Increase in refundable deposits
Increase in prepayments of property, plant and equipment
Net cash flows from (used in) investing activities
Cash flows from (used in) financing activities:
Decrease 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 six months
ended June 30
2024
2023
$ 118,264
330,060
106,815
60,196
4,206
4,224
(2,026)
1,587
2,846
3,582
(4,032)
(1,281)
7,823
2,497
-
(373)
3,043
537
118,675
70,969
(61,443)
(112,526)
(105,738)
25,988
(18,731)
6,799
(892)
(313)
7,654
(11,943)
(1,153)
(103,940)
1,425
(76,910)
(3,985)
2,100
(374)
(602)
(183,237)
(271,347)
(64,562)
(200,378)
53,702
129,682
4,032
1,281
(2,846)
(3,582)
(42,473)
(4,716)
12,415
122,665
-
66,909
26,390
6,675
-
(18,000)
(155,350)
(321,932)
(800)
(110)
(62,676)
(28,523)
(192,436)
(294,981)
(46,000)
(7,000)
131,787
157,085
(1,002)
(894)
84,785
149,191
(95,236)
(23,125)
942,057
166,828
$
846,821
143,703

2024
$ 118,264
106,815
4,206
(2,026)
2,846
(4,032)
7,823
-
3,043
118,675
(61,443)
(105,738)
(18,731)
(892)
7,654
(1,153)
1,425
(3,985)
(374)
(183,237)
(64,562)
53,702
4,032
(2,846)
(42,473)
12,415
-
26,390
-
(155,350)
(800)
(62,676)
(192,436)
(46,000)
131,787
(1,002)
84,785
(95,236)
942,057
$
846,821

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

June 30, 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 August 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 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”

(Continued)

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

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

●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.

(Continued)

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

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.

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”
●Annual Improvements to IFRS Accounting Standards—Volume 11

(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
			June 30, 2024 % 100.00	December 31, 2023 June 30, 2023 % 100.00 % 100.00
The Company	Yushan Pharmaceuticals Inc. (Yushan)

(Continued)

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

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
(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 measured by multiplying together the pre-tax income for the interim reporting period and the management’s best estimate of effective annual tax rate. 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.

(Continued)

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

(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.

(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	June 30, 2024 $ 624 819,075 27,122 $ 846,821	December 31, 2023 499 907,102 34,456 942,057	June 30, 2023
			523 124,173 19,007
			143,703

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

(ii) Please refer to note 6(v) 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	June 30, 2024 $ 1,058 63,576 $ 64,634	December 31, 2023 1,052 87,946 88,998	June 30, 2023
			1,045 88,238
			89,283

The Group did not provide any aforementioned financial assets as collateral for its loans as of June 30, 2024, December 31 and June 30, 2023, respectively.

(Continued)

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

Financial assets at fair value through other comprehensive income: Stocks listed on domestic markets Emerging stocks	June 30, 2024 $ 89,761 - $ 89,761	December 31, 2023 96,814 - 96,814	June 30, 2023
			125,026 116,351
			241,377

(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) In the second quarter of 2023, the Group had sold some part of its shares held in Sunny Pharmtech Inc., which is accounted under equity investments measured at fair value through other comprehensive income, with a fair value of $66,909 at the time of disposal, and the cumulative gain on disposal amounted to $46,735. Therefore, the Group has transferred the aforesaid cumulative gain on disposal from other equity to retained earnings. In addition, the Group had sold all of its shares held in Sunny Pharmtech Inc. in the second half of 2023.
(iii) Energenesis Biomedical Co., Ltd., was originally an emerging company and became listed in June 2023.
(iv) Please refer to note 6(v) for market risk of the Group.
(v) As of June 30, 2024, December 31 and June 30, 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	June 30, 2024 $ - 368,812 - $ 368,812	December 31, 2023 - 307,369 - 307,369	June 30, 2023 831 285,260 - 286,091

(Continued)

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

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:

Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 180 days past due 181 to 270 days past due Current 1 to 30 days past due 31 to 60 days past due 61 to 90 days past due 91 to 180 days past due 181 to 270 days past due 271 to 360 days past due More than 360 days past due		June 30, 2024	Loss allowance provision - - - - - Loss allowance provision - - - - - - - Loss allowance provision - - - - - - - - - (Continued)
	Gross carrying amount Rate of loss allowance provision $ 299,204 - 46,873 - 20,008 - 2,727 - $ 368,812 December 31, 2023
		Rate of loss allowance provision - - - - - - June 30, 2023
		Rate of loss allowance provision - - - - - - - -

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

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 June 30)	For the six months ended June 30,	For the six months ended June 30,
	2024 $ -	2023
		-

As of June 30, 2024, December 31 and June 30, 2023, the Group did not provide any aforementioned notes and accounts receivable as collaterals for its loans.

(e) Inventories

Raw materials Work in progress Finished goods	June 30, 2024 $ 112,909 98,114 424,248 $ 635,271	December 31, 2023	June 30, 2023
		92,404 85,692 351,437 529,533	129,701 50,786 306,955
			487,442

Inventory cost recognized as operating costs for the three months and six months ended June 30, 2024 and 2023 were as follows:

For the three months ended June 30, 2024 2023 $ 241,470 213,119 5,412 1,045 - - 37,890 19,188 $ 284,772 233,352	For the six months ended June 30,	For the six months ended June 30,
2024 $ 241,470 5,412 - 37,890 $ 284,772	2024 431,509 (17,094) 18,847 69,516 502,778	2023
		403,442 10,679 1,381 36,617
		452,119

As of June 30, 2024, December 31 and June 30, 2023, the Group did not provide any inventories as collaterals for its loans.

(Continued)

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

(f) Investments accounted for using equity method

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

Associates	June 30, 2024 $ 136,985	December 31, 2023 144,808	June 30, 2023
			156,150

(i) Except for the following, there was no significant change for investments accounted for using the equity method for the six months ended June 30, 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) In May 2023, the Group subscribed to the newly issued shares of HoneyBear Biosciences, Inc.(HoneyBear) amounting to $18,000, at a percentage disproportionate from its existing ownership percentage, resulting in the ownership of HoneyBear by the Group to increase from 6.09% to 11.54%, and the retained earnings to decrease by $670.
(iii) The Group’s financial information on investments accounted for using equity method that are individually insignificant was as follows:

				June	June	30,	December 31,	December 31,	June 30,
					2024		2023		2023
Carrying amount of individually
insignificant associates' equity			$		136,985		144,808		156,150
	For	the three		months ended			For the	six months ended
			June		30,			June	30,
		2024				2023	2024		2023
Attributable to the Group:
Profit (loss)	$	(3,705)				(500)	(7,823)		(2,497)
Other comprehensive income
(loss)		-				-	-		-
Total comprehensive income
(loss)	$	(3,705)				(500)	(7,823)		(2,497)

(iv) Pledge to secure

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

(v) 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.

(Continued)

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

(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 24,469 (8,375) 585,679 2,316,097 1,116,895 10,934 (765) 60,868 1,187,932 489,788 89,901 (8,375) 571,314 385,715 44,018 (228) 429,505 1,224,536 1,744,783 731,180 758,427	58,337 116 - 271	12,968 - - -
722,904		58,724	12,968
700,232 - - -		55,466 - - 1,962	12,968 - - -
700,232		57,428	12,968
311,735 13,065 -		28,553 2,316 -	7,970 520 -
324,800		30,869	8,490
287,084 12,272 -		23,635 2,492 -	6,931 520 -
299,356		26,127	7,451
395,267		29,784	4,998
398,104		27,855	4,478
413,148		31,831	6,037
400,876		31,301	5,517

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.

(Continued)

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

(i) As of June 30, 2024, December 31 and June 30, 2023, the Group’s prepayments for equipment purchases amounted to $218,435, $155,759 and $29,429, respectively, which were recorded as other non-current assets.
(ii) As of June 30, 2024, December 31 and June 30, 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 June 30, 2024) Balance on January 1, 2023 Additions Reductions Balance on June 30, 2023 Accumulated depreciation: Balance on January 1, 2024 Depreciation for the period Balance on June 30, 2024 Balance on January 1, 2023 Depreciation for the period Reductions Balance on June 30, 2023 Carrying amount: Balance on January 1, 2024 Balance on June 30, 2024 Balance on January 1, 2023 Balance on June 30, 2023	Land		Others 2,626 4,922 1,132 (4,233) 1,821 945 656 1,601 3,909 775 (4,233) 451 1,681 1,025 1,013 1,370	Total 6,192 4,922 4,698 (4,233) 5,387 1,420 1,013 2,433 3,909 894 (4,233) 570 4,772 3,759 1,013 4,817
	$ 3,566 $ - 3,566 - $ 3,566 $ 475 357 $ 832 $ - 119 - $ 119 $ 3,091 $ 2,734 $ - $ 3,447

(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 six months ended June 30, 2024 and 2023. Please refer to note 6(j) of the consolidated financial statements for the year ended December 31, 2023.

(Continued)

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

(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	June 30, 2024 $ 129,000 - $ 129,000 $ 605,185 1.85%~2.225%	December 31, 2023 125,000 50,000 175,000 695,000 1.7%~2.1%	June 30, 2023
			82,000 23,000
			105,000
			685,000
			1.7%~1.925%

(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(v).
(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	June 30, 2024 $ 818,359 180,000 (127,326) (2,653) $ 868,380 $ 10,000 1.675%~2.05%	December 31, 2023 686,572 180,000 (20,000) (3,902) 842,670 363,428 1.05%~1.925%	June 30, 2023 462,852 130,000 - (3,757) 589,095 537,148 1.55%~1.9255%

(i) For the six months ended June 30, 2024 and 2023, the Group had the additional long-term borrowings amounting to $131,787 and $157,085, respectively, and the repayment amounted to $0.

(Continued)

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

(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 June 30, 2024, the Group had used the credit amount of $818,359.

(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	June 30, 2024 $ 1,737 $ 2,065	December 31, 2023 1,946 2,858	June 30, 2023
			1,518
			3,309

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

		For the three months ended	For the three months ended	For the three months ended		For the	six months ended	six months ended
			June 30,				June 30,
			2024	2023		2024		2023
The amounts recognized in profit or
loss were as follows:
Interest on lease liabilities		$	22	18			45	21
Expenses relating to short-term
leases		$	55	129			135	323
Variable lease payments not
included in the measurement
of lease liabilities		$	-	(3)		-		3
Expense relating to leases of
low-value assets,
excluding short-term leases of
low-value assets		$	236	187			430	327
						For the six months ended
							June 30,
						2024		2023
The amounts recognized in the statement of cash flows for				the
Group	were as follows:
Total cash outflow for leases					$	1,612		1,568

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

(Continued)

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

(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 six months ended June 30, 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 June 30, 2024 Balance on January 1, 2023 Provisions made (reversed) during the year Provisions used during the year Balance on June 30, 2023	Environmental protection costs		Fire disaster indemnity - - - - 68,159 (373) (61,346) 6,440	Total 29,058 13,472 (12,047) 30,483 111,384 5,007 (82,290) 34,101

Please refer to note 10 for the above fire indemnity.

(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 June 30, 2024 2023 $ 290 138 107 70 $ 397 208	For the six months ended June 30,	For the six months ended June 30,
2024 $ 290 107 $ 397	2024 577 217 794	2023
		274 140
		414

(Continued)

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

(ii) Defined contribution plans

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

For the three months ended June 30, 2024 2023 $ 1,687 1,338 546 482 $ 2,233 1,820	For the six months ended June 30,	For the six months ended June 30,
2024 $ 1,687 546 $ 2,233	2024 3,307 1,078 4,385	2023
		2,663 956
		3,619

(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 and six months ended June 30, 2024 and 2023 were calculated as follows:

Current income tax expense Recognized during the year Income tax estimated under tax incentives Deferred income tax expense Income tax underestimate (overestimate) for prior years Current income tax expense	For the three months ended June 30, 2024 2023 $ 11,885 51,818 30,532 - 42,417 51,818 (42,189) - $ 228 51,818	For the six months ended June 30,	For the six months ended June 30,
		2024 23,219 30,532 53,751 (42,189) 11,562	2023
			67,104 -
			67,104
			-
			67,104

(iii) For the three months and six months ended June 30, 2024 and 2023, the Group did not recognize income tax expense in equity and other comprehensive income.

(iv) Examination and approval

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

(Continued)

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

(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 June 30, 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 June 30, 2024, December 31 and June 30, 2023 were as follows:

June 30, 2024 Additional paid-in capital $ 2,127,990 Cash capital increase reserved for employees' subscription 18,720 Gain on disposal of assets 980 Stock options 71,530 Changes in equity of associates and joint ventures accounted for using equity method 8,788 Employee stock options 5,582 $ 2,233,590	December 31, 2023 2,127,990 18,720 980 71,530 8,788 5,582 2,233,590	June 30, 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 stockholders’ meeting held on May 30, 2024 and June 19, 2023, the appropriation of earnings for the year 2023 and 2022 was approved. The above dividends per share were appropriated as follows:

2023
Amount
per share
(dollars)
Total
amount
Dividends distributed to
ordinary shareholders:
Cash
$ 1.25
149,387
Stock
-
-
Total
$
149,387
Other equity (net of tax)
Balance at January 1, 2024
Unrealized gains (losses) from financial assets measured at fair
value through other comprehensive income
Balance at June 30, 2024
Balance at January 1, 2023
Unrealized gains (losses) from financial assets measured at fair
value through other comprehensive income
Disposal of investments in equity instruments designated at fair
value through other comprehensive income
Balance at June 30, 2023

2022
Amount
per share
(dollars)
Total
amount
0.25
23,846
1.25
119,228
143,074
Unrealized gains
(losses) from
financial assets
measured at fair
value through
other
comprehensive
income
$ 25,457
(7,053)
$
18,404
$ (54,727)
241,563
(46,735)
$
140,101

(iv) Other equity (net of tax)

(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:

For the three months ended June 30, 2024 2023 $ 62,193 199,518 119,509 107,305 $ 0.52 1.86 $ 62,193 199,518 119,509 107,305 133 116 119,642 107,421 $ 0.52 1.86	For the six months ended June 30,	For the six months ended June 30,
2024 $ 62,193 119,509 $ 0.52 $ 62,193 119,509 133 119,642 $ 0.52	2024 106,702 119,509 0.89 106,702 119,509 241 119,750 0.89	2023
		262,956
		107,305
		2.45
		262,956
		107,305 212
		107,517
		2.45

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.

(Continued)

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

(s) Revenue from contracts with customers

(i) Disaggregation of revenue

For the three months ended June 30, For the six months ended June 30, 2024 2023 2024 2023 Primary geographical markets: Italy $ 76,183 100,887 136,357 179,270 Switzerland 38,015 16,759 83,590 40,089 Germany 14,210 12,860 48,947 74,172 Spain 28,368 2,092 56,785 16,666 Japan 11,235 44,093 35,740 54,711 Netherlands 57,552 - 81,802 27,025 Taiwan 43,908 28,064 65,240 41,331 United States 33,830 48,427 54,269 71,816 Australia 6,831 2,323 17,882 22,964 Others 82,584 57,610 121,983 126,850 $ 392,716 313,115 702,595 654,894 Major products: Active Pharmaceutical Ingredients $ 273,539 178,233 500,287 386,944 Intermediates 112,136 134,219 192,703 265,049 Specialty Chemical 7,041 663 9,605 2,901 $ 392,716 313,115 702,595 654,894 Contract balances June 30, 2024 December 31, 2023 June 30, 2023 Notes and accounts receivable $ 368,812 307,369 286,091 Less: Loss allowance - - - Total $ 368,812 307,369 286,091 Contract liabilities (sales received in advance) $ 37,475 38,367 31,460	For the six months ended June 30,	For the six months ended June 30,	For the six months ended June 30,
			2023
			179,270 40,089 74,172 16,666 54,711 27,025 41,331 71,816 22,964 126,850
			654,894
			386,944 265,049 2,901
			654,894
			June 30, 2023 286,091 - 286,091 31,460

(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 six months ended June 30, 2024 and 2023, that was included in the contract liability balance at the beginning of the period was $2,823 and $323, respectively.

(Continued)

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

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 and six months ended June 30, 2024 and 2023, the remunerations to employees amounted to $6,322, $6,121, $12,042 and $13,743, respectively, and the remunerations to directors amounted to $720, $2,950, $1,350 and $4,200, 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.

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) Other Income

Other Income
Provisions reversal of fire indemnity Insurance claim income, net Rental income and others	For the three months ended June 30,		For the six months ended June 30,
	2024 $ - - 2,689 $ 2,689	2023	2024 - - 5,484 5,484	2023
		373 210,943 1,935		373 210,943 3,751
		213,251		215,067

(v) 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.

(Continued)

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

(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 June 30, 2024, December 31 and June 30, 2023, there were eight, five and six major customers, respectively, that accounted for 72%, 76% and 63%, 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.

(ii) Liquidity Risk

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

June 30, 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 Dividends payable Long-term borrowings (including current portion) Guarantee deposits received	Carrying Amount $ 129,000 51,905 3,802 168,385 52,387 149,387 995,706 1,000 $ 1,551,572	Contractual cash flows (129,501) (51,905) (3,926) (168,385) (52,387) (149,387) (1,035,746) (1,000) (1,592,237)	Within a year (129,501) (51,905) (1,798) (168,385) (52,387) (149,387) (144,305) - (697,668)	1 ~ 2 years - - (751) - - - (448,001) - (448,752)	Over 2 years - - (1,377) - - - (443,440) (1,000) (445,817)

(Continued)

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

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 (including current portion) Guarantee deposits received June 30, 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 Dividends payable Long-term borrowings Guarantee deposits received	Carrying Amount $ 175,000 44,251 4,804 169,538 68,840 862,670 1,000 $ 1,326,103 $ 105,000 36,693 4,827 192,077 86,711 23,846 589,095 1,000 $ 1,039,249	Contractual cash flows (175,404) (44,251) (4,971) (169,538) (68,840) (898,412) (1,000) (1,362,416) (105,429) (36,693) (5,029) (192,077) (86,711) (23,846) (618,184) (1,000) (1,068,969)	Within a year (175,404) (44,251) (2,026) (169,538) (68,840) (32,789) - (492,848) (105,429) (36,693) (1,602) (192,077) (86,711) (23,846) (8,376) - (454,734)	1 ~ 2 years - - (1,193) - - (409,607) - (410,800) - - (1,299) - - - (86,137) - (87,436)	Over 2 years - - (1,752) - - (456,016) (1,000) (458,768) - - (2,128) - - - (523,671) (1,000) (526,799)

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

(Continued)

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

(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		June 30, 2024	TWD 302,389 109,569 15,390	De Foreign currency	cember 31, 20	23	Foreign currency	June 30, 2023
	Foreign currency	Exchange rate			Exchange rate 30.655 33.78 30.655	TWD		Exchange rate TWD 31.09 312,672 33.61 42,248 31.09 18,312
	$ 9,333 3,175 475	32.4 34.51 32.4		11,322 303 633		347,076 10,235 19,405	10,057 1,257 589

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.

The analysis assumes that all other variables remain constant. A strengthening (weakening) 1% of the functional currency against each foreign currency for the six months ended June 30, 2024 and 2023, would have affected the net profit before tax increased or decreased $3,966 and $3,366, 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 and six months ended June 30, 2024 and 2023, the exchange gains (losses), including realized and unrealized, are $4,699, $8,005, $18,739 and $7,229, 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
	June 30, 2024 June 30, 2023 $ 814,513 120,896 1,127,359 697,852

(Continued)

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

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 $391 and $721, respectively, for the six months ended June 30, 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.

(v) Other market price risks

For the years ended June 30, 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:

income were as follows:
Price of securities at the reporting date Increasing 5% Decreasing 5%	For the six months ended June 30,
	2024 Other comprehensive income after tax Profit or loss before tax $ 4,488 3,232 $ (4,488) (3,232)	2023 Other comprehensive income after tax Profit or loss before tax 12,069 4,464 (12,069) (4,464)
	Other comprehensive income after tax $ 4,488 $ (4,488)	Other comprehensive income after tax 12,069 (12,069)

(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:

(Continued)

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

	June 30, 2024	June 30, 2024	June 30, 2024
Book value		Fair Value
	Level 1 64,634 89,761 - - - - - - - - - - - -	Level 2 - - - - - - - - - - - - - -	Level 3 Total - 64,634 - 89,761 - - - - - - - - - - - - - - - - - - - - - - - -
$ 64,634 89,761 846,821 368,812 7 1,720 1,217,360 $ 1,371,755 $ 129,000 51,905 3,802 168,385 52,387 149,387 995,706 1,000 $ 1,551,572

(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 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 $ 175,000 44,251 4,804 169,538 68,840 862,670 1,000 $ 1,326,103

(Continued)

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

	June 30, 2023	June 30, 2023
Book value		Fair Value
	Level 1 89,283 241,377 - - - - - - - - - - - -	Level 2 Level 3 Total - - 89,283 - - 241,377 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
$ 89,283 241,377 143,703 286,091 1,000 920 431,714 $ 762,374 $ 105,000 36,693 4,827 192,077 86,711 23,846 589,095 1,000 $ 1,039,249

(Continued)

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

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.

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.

(Continued)

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

4) Transfers between Levels

The Group holds investment in equity shares, which are classified as financial assets at fair value through other comprehensive income, with the fair value of $89,761, $96,814 and $241,377 as of June 30, 2024, December 31 and June 30, 2023, respectively.

During the six months ended June 30, 2023, one of the above financial assets, Sunny Pharmtech Inc., listed its equity shares on an exchange and became publicly quoted on an active market. Furthermore, the degree of the stock trading activity of Energenesis, an emerging company, meets the definition of an active market. Therefore, the fair value measurement was transferred from Level 3 to Level 1 of the fair value hierarchy as of June 30, 2023. For the six months ended June 30, 2024, the Group has no any transfer between fair value.

5) Reconciliation of Level 3 fair values

For the six months ended June 30, 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 Reclassifications Disposal June 30, 2023	Fair value through other comprehensive income Unquoted equity instruments $ 66,723 - 241,563 (241,377) (66,909) $ -

For the three months and six months ended June 30, 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:

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”	For the three months ended June 30, 2023 For the six months ended June 30, 2023 $ 3,511 -

(Continued)

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

(w) 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.

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

(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 for the six months ended June 30, 2024 and 2023, were as follows:

(i) For the acquisition of right-of-use assets by lease for the six months ended June 30, 2024 and 2023, please refer to note 6(h).
(ii) Reconciliation of liabilities arising from financing activities for the six months ended June 30, 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 (46,000) 131,787 (1,002) 84,785 Cash flows (7,000) 157,085 (894) 149,191	Non-cash	changes Others - 1,249 - 1,249 changes Others - (346) - (346)	June 30, 2024
			Acquisition - - - - Non-cash
					129,000 995,706 3,802
					1,128,508
					June 30, 2023
			Acquisition - - 4,698 4,698
					105,000 589,095 4,827
					698,922

(Continued)

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

(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) Other receivables from related parties For the three months ended June 30, For the six months ended June 30, June 30, December 31, June 30, 2024 2023 2024 2023 2024 2023 2023 Associates- Framosa $ 1,635 1,524 3,270 3,081 - - - Guarantee deposits received (recorded as other non-current liability) June 30, 2024 December 31, 2023 June 30, 2023 Associates-Framosa $ 1,000 1,000 1,000	Rental income (recorded as other income) Other receivables from related parties For the three months ended June 30, For the six months ended June 30, June 30, December 31, June 30, 2024 2023 2024 2023 2024 2023 2023 Associates- Framosa $ 1,635 1,524 3,270 3,081 - - - Guarantee deposits received (recorded as other non-current liability) June 30, 2024 December 31, 2023 June 30, 2023 Associates-Framosa $ 1,000 1,000 1,000	Other receivables from related parties	Other receivables from related parties	Other receivables from related parties
				June 30, 2023
2024 3,270
				-

	June 30, 2024 $ 1,000	December 31, 2023 1,000	June 30, 2023
			1,000

(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 June 30, 2024, December 31 and June 30, 2023, the amount of $90,238, $90,238 and $0, respectively, was recorded as construction in progress. As of June 30, 2024, the above transaction price of construction in progress has been paid.

(iii) Guarantee

June 30, 2024 Associates-Framosa $ 400,000	December 31, 2023 400,000	June 30, 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 six months ended June 30, 2024 and 2023. Please refer to note 6(h).

(Continued)

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

Salary and short-term employee benefits	For the three months ended June 30, 2024 2023 $ 5,803 5,605	For the six months ended June 30,	For the six months ended June 30,
	2024 $ 5,803	2024 11,188	2023
			11,322

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Assets Land Building	Subject Pledged as collaterals `〃`	June 30, 2024 $ 42,736 2,169 $ 44,905	December 31, 2023 42,736 2,315 45,051	June 30, 2023
				42,736 2,570
				45,306

(9) Commitments and contingencies:

(a) As of June 30, 2024, December 31 and June 30, 2023, the unused balance of the Group’ s outstanding standby letters of credit amounted to $115,815, $35,813 and $2,480, respectively.
(b) The significant outstanding purchase commitments for property, plant and equipment were as follows:

Acquisitions of property, plant and equipment	June 30, 2024 $ 888,505	December 31, 2023 614,765	June 30, 2023 410,047

(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 June 30, 2024, the above-mentioned insurance claims have not been settled yet. The Company expects to complete the application in 2024.

(Continued)

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

For the three months and six months ended June 30, 2024 and 2023, the Company received insurance claim income amounting to $0, $210,943, $0 and $210,943, respectively, which was recorded under other income.

(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 June 30, 2024	For the three months ended June 30, 2024	For the three months ended June 30, 2024	For the three months ended June 30, 2023	For the three months ended June 30, 2023	For the three months ended June 30, 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	47,721 4,071 1,977 - 1,012 51,330 1,038	19,026 1,176 653 720 2,416 6,451 1,065	66,747 5,247 2,630 720 3,428 57,781 2,103	40,596 3,129 1,476 - 863 23,779 1,038	15,487 1,079 552 2,950 1,874 6,685 1,072	56,083 4,208 2,028 2,950 2,737 30,464 2,110

By function By item	For the six months ended June 30, 2024			For the six months ended June 30, 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	91,792 8,582 3,884 - 2,139 93,914 2,076	36,550 2,668 1,295 1,350 4,713 12,901 2,130	128,342 11,250 5,179 1,350 6,852 106,815 4,206	79,215 6,499 2,937 - 1,761 46,498 2,080	36,212 2,349 1,096 4,200 3,579 13,698 2,144	115,427 8,848 4,033 4,200 5,340 60,196 4,224

(b) Seasonality of operations

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

(Continued)

SCI PHARMTECH, INC. 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 six months ended June 30, 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	505,021	400,000	400,000	83,108	-	% 7.92	2,020,086	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 June 30, 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	61 376 0.023 483 380 1,603	1,058 22,974 1 29,125 11,476 89,761	- - - - - 2.10 %	1,058 22,974 1 29,125 11,476 89,761	- - - - - -

(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	$ 535,500	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 six months ended June 30, 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
				June 30, 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	350,896 112,041 24,944	(2,130) (17,774) (20,384)	(1,851) (4,775) (3,048)	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

(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_aad178b6-e079-49e5-b47c-75fa3509c1ec.pdf

SCI PHARMTECH, INC. 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 Consolidated Financial Statements Originally Issued in Chinese)

SCI PHARMTECH, INC. AND SUBSIDIARIES Consolidated Balance Sheets

June 30, 2024, December 31, 2023, and June 30, 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 and six months ended June 30, 2024 and 2023

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

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

Equity attributable to owners of parent

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

SCI PHARMTECH, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the six months ended June 30, 2024 and 2023

(expressed in Thousands of New Taiwan Dollars)

SCI PHARMTECH, INC. AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

June 30, 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

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

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

(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

(f) Investments accounted for using equity method

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

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

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

(ii) Other leases

(m) Provisions

(n) Employee benefits

(i) Defined benefit plans

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

(ii) Defined contribution plans

(o) Income taxes

(iv) Examination and approval

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

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

(s) Revenue from contracts with customers

(i) Disaggregation of revenue

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

(t) Remuneration to employees and directors

(u) Other Income

SCI Interim / Quarterly Report 2024