Scientech — Annual Report 2023

Nov 13, 2023

Stock Code: 3583

SCIENTECH CORPORATION and Subsidiaries

Consolidated Financial Statements and Independent Auditors’ Report 2023 and 2022

Address:11th Floor, No. 208, Ruiguang Road, Neihu

District, Taipei City Tel: (02)8751-2323

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 1

For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.

§Table of Contents§

Item Page 1. Cover 1 2. Table of Contents 2 3. Declaration of Consolidated Financial Statements of Affiliated Companies 3 4. Independent Auditors’ Report 4–7 5. Consolidated Balance Sheets 8 6. Consolidated Statement of Comprehensive Income 9–11 7. Consolidated Statement of Changes in Equity 12 8. Consolidated Statement of Cash Flows 13–14 9. Notes to the Consolidated Financial Statements (I) Company History 15 (II) Date and procedures of approval of the financial statements 15 (III) Application of New Standards, Amendments, and Interpretations 15–17 (IV) Summary of significant accounting policies 17–29 (V) Significant Accounting Judgments, Assumptions, and Major Sources of Estimation Uncertainty 29 (VI) Description of Major Accounts 30–60 (VII) Related Party Transactions 60–62 (VIII) Pledged and Mortgaged Assets 63 (IX) Significant Commitments 63 (X) Significant Disaster Loss - (XI) Significant Subsequent Events 63 (XII) Others 63–65 (XIII) Supplementary Disclosures 1. Information on Major Transactions 65, 67–70 2. Information on Investees 65, 71 3. Information on Investments in Mainland China 65, 72 4. Information on Major Shareholders 65, 73 (XIV) Segment Information 65–66

Notes to the

Financial Statements - - - - - - - - 1 2 3 4 5 6–26 27 28 29 - 30 31 32 32 32 32 33

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 2

Declaration of Consolidated Financial Statements of Affiliated Companies

Considering that the companies to be included into the consolidated financial statements of affiliates under the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises ” were the same as those to be included into the consolidated financial statements of the parent and subsidiaries under IFRS 10 in 2023 (from January 1, 2023 to December 31, 2023) and the related information to be disclosed in the consolidated financial statements of affiliates were already disclosed in said consolidated financial statements of the parent and subsidiaries, no consolidated financial statements of affiliates were prepared separately.

In witness thereof, the Declaration is hereby presented.

Company Name: SCIENTECH CORPORATION

Chairman of the Board: HUNG-LIANG HSIEH

February 29, 2024

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 3

Independent Auditors’ Report

To SCIENTECH CORPORATION:

Audit opinion

We have audited the consolidated balance sheet of SCIENTECH CORPORATION and its subsidiaries (collectively referred to as the “Group” hereinafter) as of December 31, 2023 and 2022, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flow for the period from January 1 through December 31, 2023and 2022, and the notes to the consolidated financial statements (including the summary of significant accounting policies).

In our opinion, the said consolidated financial statements were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC interpretations, and SIC interpretations that were approved and promulgated by the Financial Supervisory Commission (FSC), and thus presented fairly, in all material aspects, the consolidated financial position of The Group as of December 31, 2023 and 2022, and the consolidated financial performance and cash flows for the period from January 1 through December 31, 2023 and 2022.

Basis of Audit Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Consolidated Financial Statements section of our report. We were independent of The Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China and fulfilled all other responsibilities thereunder. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 4

Key Audit Matters

Key audit matters refer to, based on our professional judgment, the most important matters for auditing the Group’s consolidated financial statements of 2023. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these issues.

Key audit matters for the Group's consolidated financial statements for the year ended December 31, 2023 are stated as follows:

Revenue recognition

The Group’s 2023 operating revenue from manufacturing of machinery and from sale of machinery in the capacity of an agent is material to the overall presentation of the consolidated financial statements. Revenue from machinery should be recognized upon the fulfillment of obligations. Since the company might recognize product sale revenue when such revenue does not qualify for the recognition criteria, revenue recognition is thus listed as the key audit matter.

Our main audit procedures to address the said matter included testing the effectiveness of the design and implementation of the internal control system pertaining to the recognition of machinery sale and discussing with the management about whether the accounting policy for revenue recognition is appropriate and consistently adopted; we also sampled customer sales documents to verify the transaction terms on the order or sale contract and check the acceptance certificate signed off by customers, so as to assess the correctness of the recognized revenue.

Other Matters

SCIENTECH CORPORATION has prepared the parent company only financial statements for the years ended December 31, 2023 and 2022, for which we have issued an audit report containing an unqualified opinion for reference.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

The management was responsible for fairly presenting these consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC interpretations, and SIC interpretations that were approved and promulgated by the Financial Supervisory Commission, and for maintaining the necessary internal control related to the preparation of these consolidated financial statements to ensure that these consolidated financial statements were free of material misstatements, whether due to fraud or errors.

During preparation of these consolidated financial statements, the management was also responsible for evaluating The Group’s ability to continue as a going concern, disclosing going

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 5

concern matters, and applying the going concern basis of accounting, unless the management intended either to liquidate The Group or to terminate its operations, or had no feasible alternatives but to do so.

The Group’s governance body (including the Audit Committee) was responsible for supervising the financial reporting procedures.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

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

4. Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 6

consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

2. Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the audit for the Group. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Group's consolidated financial statements for the year ended December 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Deloitte & Touche Taiwan CPA: HUI-MIN HUANG CPA: CHIH-MING SHAO Approval No. from the Financial Approval No. from the Securities and Futures Supervisory Commission Commission Jin-Guan-Zheng-Shen-Zi No.1070323246 Tai-Tsai-Cheng-Liu-Zi No. 0930128050

February 29, 2024

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 7

SCIENTECH CORPORATION and Subsidiaries

Consolidated Balance Sheets

As of December 31, 2023 and 2022

Unit: NT$ thousand

Code 1100 1110 1170 1180 130X 1410 1470 11XX 1517 1550 1600 1755 1785 1840 1915 1975 1990 15XX 1XXX Code 2100 2130 2170 2219 2230 2252 2280 2399 21XX 2570 2580 25XX 2XXX 3110 3200 3310 3320 3350 3300 3410 3420 3400 3500 3XXX	Assets Current Assets Cash and cash equivalents (Notes 4 and 6) Current financial assets at fair value through profit or loss(Notes 4 and 7) Notes receivable and accounts receivable (Notes 4, 9, and 20) Accounts receivable - related parties (Notes 4, 9, 20, and 27) Inventories (Notes 4, 10, and 24) Prepayments Other current assets (Notes 15, 27, and 28) Total current assets Non-current assets Financial assets at fair value through other comprehensive income (Notes 4 and 8) Investments accounted for using equity method (Notes 4 and 12) Property, plant, and equipment (Notes 4, 13, and 24) Right-of-use assets (Notes 4 and 14) Patent right (Note 4) Deferred income tax assets (Notes 4 and 22) Prepayments for equipment (Note 13) Net defined benefit asset, non-current(Notes 4 and 18) Other non-current assets (Note 15) Total non-current assets Total Assets Liabilities and Stockholders’ Equity Current liabilities Short-term borrowings (Note 16) Contract liability (Notes 4, 20 , and 27) Notes payable and accounts payable Other payables (Notes 13 , 17, and 27) Current income tax liabilities (Notes 4 and 22) Short-term warranty provision (Note 4) Lease liability (Notes 4, 14 , and 27) Other current liabilities Total current liabilities Non-current liabilities Deferred income tax liabilities (Notes 4 and 22) Lease liability (Notes 4, 14 , and 27) Total non-current liabilities Total liabilities Equity (Notes 4 and 19) Capital stock Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences arising in the translation of foreign operations Unrealized valuation gains or losses on financial assets at fair value through other comprehensive income Total other equity interests Treasury stock Total stockholders’ equity Total Liabilities and Equity		December31,2023 Amount % $ 4,660,977 25 7,529 - 775,942 4 11,439 - 9,631,247 51 1,158,475 6 161,306 1 16,406,915 87 210,136 1 423,092 2 1,533,603 8 80,680 1 952 - 156,634 1 67,518 - 1,778 - 41,539 - 2,515,932 13 $ 18,922,847 100 $ 296,529 2 11,818,592 62 1,873,273 10 475,050 3 182,388 1 53,119 - 12,223 - 15,931 - 14,727,105 78 134,634 1 71,855 - 206,489 1 14,933,594 79 803,280 4 685,901 4 375,378 2 33,380 - 2,066,113 11 2,474,871 13 10,578 ) - 35,779 - 25,201 - - - 3,989,253 21 $ 18,922,847 100	December31,2023 Amount % $ 4,660,977 25 7,529 - 775,942 4 11,439 - 9,631,247 51 1,158,475 6 161,306 1 16,406,915 87 210,136 1 423,092 2 1,533,603 8 80,680 1 952 - 156,634 1 67,518 - 1,778 - 41,539 - 2,515,932 13 $ 18,922,847 100 $ 296,529 2 11,818,592 62 1,873,273 10 475,050 3 182,388 1 53,119 - 12,223 - 15,931 - 14,727,105 78 134,634 1 71,855 - 206,489 1 14,933,594 79 803,280 4 685,901 4 375,378 2 33,380 - 2,066,113 11 2,474,871 13 10,578 ) - 35,779 - 25,201 - - - 3,989,253 21 $ 18,922,847 100		December31,2022	December31,2022	December31,2022
			Amount $ 4,660,977 7,529 775,942 11,439 9,631,247 1,158,475 161,306 16,406,915 210,136 423,092 1,533,603 80,680 952 156,634 67,518 1,778 41,539 2,515,932 $ 18,922,847 $ 296,529 11,818,592 1,873,273 475,050 182,388 53,119 12,223 15,931 14,727,105 134,634 71,855 206,489 14,933,594 803,280 685,901 375,378 33,380 2,066,113 2,474,871 10,578 ) 35,779 25,201 - 3,989,253 $ 18,922,847			Amount $ 4,081,951 - 854,546 5,152 5,274,300 1,807,348 189,441 12,212,738 138,562 494,738 1,542,982 68,436 1,212 110,147 14,492 1,842 34,720 2,407,131 $ 14,619,869 $ 430,661 7,718,760 2,156,868 348,394 177,324 41,158 7,323 17,116 10,897,604 76,185 63,594 139,779 11,037,383 811,390 728,964 318,368 14,306 1,793,497 2,126,171 2,415 35,795) 33,380) 50,659) 3,582,486 $ 14,619,869		%
		(			( ( (			28 - 6 - 36 13 1 84 1 3 11 - - 1 - - - 16 100 3 53 15 3 1 - - - 75 1 - 1 76 5 5 2 - 12 14 - - - - 24 100

The accompanying notes are an integral part of the consolidated financial statements.

Chairman of the Board: HUNG-LIANG HSIEH

Manager: MING-CHI HSU

Accounting Manager: SHAO-CHE CHUANG

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 8

SCIENTECH CORPORATION and Subsidiaries

Consolidated Statement of Comprehensive Income

January 1 to December 31, 2023 and 2022

Unit: NT$ thousand; except earnings per share

Code Operating revenue (Notes 4, 20, and 27) 4100 Goods sales revenue 4600 Services revenue 4800 Other operating revenue 4000 Total operating revenue 5000 Operating cost (Notes 10 and 21) 5900 Operating gross profit 5910 Unrealized gains on transactions with associates (Note 4 and 12) 5950 Realized operating gross profit Operating expenses (Notes 9 , 21, and 27) 6100 Marketing expenses 6200 General and administrative expenses 6300 R&D expenses 6000 Total operating expenses 6900 Operating Income Non-operating income and expenses 7010 O t h e r i n c o m e , o t h e r s(Notes 4 , 7, and 27) 7020 Other gains and losses (Continued)		2023		% 97 3 - 100 68 32 - 32 14 3 5 22 10 - -		2022
								%
								96 3 1 100 63 37 - 37 15 3 6 24 13 - -

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 9

Code 7050 Financial cost (Notes 4, 21, and 27) 7060 Share of profit or loss of associates accounted for using equity method (Notes 4 and 12) 7100 Income from interests(Notes 4 ) 7225 Gains on disposals of investments(Notes 12) 7630 Exchange gains or losses (Notes 4 and 31) 7670 Impairment loss 7000 Total non-operating income and expenses 7900 Net profits before tax 7950 Income tax expenses (Notes 4 and 22) 8200 Net profit in the current year Other comprehensive (Note 4) Items that will not be reclassified to profit or loss 8311 Re-measurements of defined benefit plans (Note 18) 8316 Unrealized valuation gains or losses on investment in equity instruments at fair value through other comprehensive income 8349 Income tax related to items that will not be reclassified (Note 22) 8310 (Continued)	2023	% - - 2 1 ( 1 ) - 2 12 3 9 - 1 - 1	2022
	Amount ( $ 4,587 ) ( 30,649 ) 121,266 80,634 ( 54,695 ) ( 916) 142,622 860,344 210,042 650,302 ( 217 ) 71,574 43 71,400		Amount ( $ 3,404 ) ( 65,674 ) 10,217 6,710 77,879 - 25,588 735,886 167,303 568,583 1,896 ( 46,319 ) ( 379) ( 44,802)	%
				- ( 1 ) - - 1 - - 13 3 10 - ( 1 ) - ( 1)

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 10

(Continued)

Code Items that will be reclassified to profit or loss 8361 Exchange differences arising in the translation of foreign operations 8370 Share of other comprehensive income of associates accounted for using the equity method (Note 12) 8399 Income tax related to items that might be reclassified (Note 22) 8360 8300 Other comprehensive income (net after tax) 8500 Total comprehensive income for the year Earnings per share (Note 23) 9710 Basic 9810 Diluted	2023		% - - - - 1 10		2022
	Amount ( $ 7,630 ) ( 8,759 ) 3,283 ( 13,106) 58,294 $ 708,596 $ 8.10 $ 8.05				Amount $ 26,840 7,228 6,823) 27,245 17,557) $ 551,026 $ 7.08 $ 7.00		%
				( (			1 - - 1 - 10

The accompanying notes are an integral part of the consolidated financial statements.

Chairman of the Board: Manager: Accounting Manager: HUNG-LIANG HSIEH MING-CHI HSU SHAO-CHE CHUANG

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 11

SCIENTECH CORPORATION and Subsidiaries Consolidated Statement of Changes in Equity January 1 to December 31, 2023 and 2022

Unit: NT$ thousand

Capital surplus $ 625,640 103,324 - - - - - 728,964 ( 12,761 ) - - - ( 30,302 ) - - $ 685,901	Retained earnings	Retained earnings	Unappropriate d earnings $ 1,468,775 - ( 42,027 ) ( 2,531 ) ( 200,820 ) 568,583 1,517 1,793,497 - ( 57,010 ) ( 19,074 ) ( 289,181 ) ( 12,247 ) 650,302 ( 174) $ 2,066,113	Other	equity Unrealized valuation gains or losses on investment in equity instruments at fair value through other comprehensive income $ 10,524 - - - - - ( 46,319) ( 35,795 ) - - - - - - 71,574 $ 35,779	Treasury stock ( $ 50,659 ) - - - - - - ( 50,659 ) - - - - 50,659 - - $ -	Total stockholders’ equity
				Exchange differences arising in the translation of foreign operations ( $ 24,830 ) - - - - - 27,245 2,415 113 - - - - - ( 13,106) ($ 10,578)
	Legal reserve $ 276,341 - 42,027 - - - - 318,368 - 57,010 - - - - - $ 375,378	Special reserve $ 11,775 - - 2,531 - - - 14,306 - - 19,074 - - - - $ 33,380
							$ 3,128,956 103,324 - - ( 200,820 ) 568,583 ( 17,557) 3,582,486 ( 12,648 ) - - ( 289,181 ) - 650,302 58,294 $ 3,989,253

The accompanying notes are an integral part of the consolidated financial statements.

Chairman of the Board: HUNG-LIANG HSIEH

Manager: MING-CHI HSU Accounting Manager: SHAO-CHE CHUANG

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 12

SCIENTECH CORPORATION and Subsidiaries Consolidated Statement of Cash Flows January 1 to December 31, 2023 and 2022

Unit: NT$ thousand

		Unit: NT$ thousand
Code Cash flow from operating activities A10000 Net profits before tax A20010 Income expenses A20100 Depreciation A20200 Amortization expense A20300 Loss (Gain) on expected credit impairment A20900 Financial cost A21200 Income from interests A21300 Dividend Income A20400 Net loss (gain) on financial assets or liabilities at fair value through profit or loss A22300 Share of profit or loss of associates accounted for using equity method A22500 (Gain) loss on disposal and retirement of property, plant, and equipment A23100 Gain on disposal of investments A23700 Impairment loss on non-financial assets A23900 Unrealized gains on transactions with associates A24100 Unrealized exchange loss (gain) A29900 Defined benefit cost A30000 Net changes in operating assets and liabilities A31150 Notes receivable and accounts receivable A31160 Accounts receivable - related parties A31200 Inventories A31230 Prepayments A31240 Other current assets A32125 Contract liabilities A32150 Notes receivable and accounts receivable A32180 Other accounts payable A32200 Short-term warranty provision A32230 Other current liabilities A32240 Net defined benefit liabilities A33000 Cash flow from operating activities A33100 Interest received A33300 Interest paid A33500 Income taxes paid	2023 $ 860,344 121,304 260 ( 3,806 ) 4,587 ( 121,266 ) ( 3,998 ) 248 30,649 12 ( 80,634 ) 339,097 4,791 ( 48,743 ) ( 22 ) 75,669 ( 7,071 ) ( 4,774,819 ) 642,190 25,688 4,153,305 ( 228,335 ) 76,023 12,290 ( 1,185 ) ( 131) 1,076,447 121,266 ( 4,641 ) ( 188,951)	2022
		$ 735,886 113,603 259 12,597 3,404 ( 10,217 ) ( 800 ) - 65,674 ( 90 ) ( 6,710 ) 50,784 5,965 27,596 - 152,356 52,501 ( 2,951,720 ) ( 1,218,427 ) ( 95,175 ) 4,495,207 1,009,163 ( 2,398 ) 3,482 3,324 ( 100) 2,446,164 10,217 ( 3,368 ) ( 133,726)

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 13

(Continued) Code 2023 2022 AAAA Net cash flows from (used in) operating activities $ 1,004,121 $ 2,319,287 Cash Flow from Investing Activities B00010 Acquisition of financial assets at fair value through other comprehensive income - ( 18,631 ) B00200 Proceeds from disposal of financial assets at fair value through profit or loss 38,716 - B01900 Proceeds from disposal of investments accounted for using equity method 48,940 1,868 B02700 Acquisition of property, plant and equipment ( 59,221 ) ( 401,082 ) B02800 Proceeds from disposal or property, plant and equipment 3 1,058 B06700 Increase in other non-current assets ( 6,825 ) ( 5,646 ) B07600 Dividends received 3,998 800 BBBB Net cash flows from (used in) investing activities 25,611 ( 421,633) Cash Flow from Financing Activities C00100 Increase in short-term borrowings 326,685 248,044 C00200 Decrease in short-term borrowings ( 455,080 ) ( 59,170 ) C01600 Increase in long-term borrowings - 200,000 C01700 Repayment of long-term borrowings - ( 200,000 ) C04020 Repayment of principal of lease liabilities ( 10,203 ) ( 12,714 ) C04500 Cash dividends paid ( 289,181) ( 200,820) CCCC Net cash flows from (used in) financing activities ( 427,779) ( 24,660) DDDD Effects of exchange rate changes on cash and cash equivalents ( 22,927) 55,584 EEEE Increase in cash and cash equivalents 579,026 1,928,578 E00100 Cash and cash equivalents - beginning of year 4,081,951 2,153,373 E00200 Cash and cash equivalents - end of year $ 4,660,977 $ 4,081,951 The accompanying notes are an integral part of the consolidated financial statements. Chairman of the Board: HUNG-LIANG HSIEH Manager: MING-CHI HSU Accounting Manager: SHAO-CHE CHUANG		2023	2022

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 14

SCIENTECH CORPORATION and Subsidiaries

Notes to the Consolidated Financial Statements

January 1 to December 31, 2023 and 2022

(All amounts are in NT$ thousand unless otherwise specified)

1. Company History

SCIENTECH CORPORATION (the “Company” hereinafter) was incorporated in October 1979. Mainly engaged in the research and development, production, sales, and maintenance of process equipment for semiconductors, liquid crystal displays (LCDs), light-emitting diodes (LEDs), and solar power generation; wafer reclaim; and general import and export, the Company was listed on the Taiwan Stock Exchange (TWSE) in March 2013.

The consolidated financial statements are stated in the functional currency of the Company, which is New Taiwan Dollars.

2. Date and procedures of approval of the financial statements

The consolidated financial statements were approved at the Board meeting on February 29, 2024.

3. Application of New Standards, Amendments, and Interpretations

• (I) First-time application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC interpretations (IFRIC), and SIC interpretations (SIC) (hereinafter collectively referred to as “IFRSs”) approved and promulgated by the Financial Supervisory Commission (hereinafter referred to as “FSC”) won’t cause any material changes to the Group’s accounting policies.

(II) Application of the FSC-endorsed IFRS Accounting Standards in 2024 Application of New Standards, Amendments, and Effective Date Announced Interpretations by IASB Amendments to IFRS 16, Lease Liability in a January 1, 2024 (Note 2) Sale and Leaseback Amendments to IAS 1, “Classification of January 1, 2024 Liabilities as Current or Non-current” Amendments to IAS 1, “Non-current Liabilities January 1, 2024 with Covenants” IAS 7 and IFRS 7 Amendments “Supplier January 1, 2024 (Note 3) Finance Arrangements”

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 15

• Note 1: Unless specified, the above-mentioned new/amended/revised standards or interpretation shall become effective in the annual reporting periods beginning on or after each effective date.

• Note 2: A seller-lessee is required to apply the amendments to IFRS 16 to any leaseback transactions arising after the date of initial application of IFRS 16.

• Note 3: Partial exemption from disclosure requirements upon first application of these amendments.

• As of the date when the consolidated financial statements were approved and

• issued, the Group assessed the said amended standards and interpretations and found them to have no significant effects on the Group’s financial position and financial performance.

• (III) IFRS Accounting Standards issued by the IASB but not yet approved and promulgated by the FSC

Application of New Standards, Amendments, and Effective Date Announced Interpretations by IASB (Note 1) Amendments to IFRS 10 and IAS 28, “Sale or To be determined Contribution of Assets between an Investor and its Associate or Joint Venture” IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendment to IFRS 17, “Initial Application of IFRS January 1, 2023 17 and IFRS 9—Comparative Information” Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025(Note 2)

• Note 1: Unless otherwise specified, the above-mentioned new/ amended/ revised standards or interpretation shall become effective in the annual reporting periods beginning on or after each effective date.

• Note 2: The amendments shall apply to the annual reporting period beginning on or after January 1, 2025. When the amendment is applied for the first time, the effect is recognized in the retained earnings on the date of initial application. When the Consolidated Company uses a non-functional currency as the presentation currency, it will affect the exchange differences of foreign operations under equity on the date of initial application.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 16

Up to the release date of the consolidated financial statements, the Group assessed the effects of the said amendments to the standards and interpretations on the financial position and performance on a continuous basis. The relevant effects will be disclosed after the assessment.

4. Summary of significant accounting policies (I) Compliance statement

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS Accounting Standards approved and promulgated by the FSC.

• (II) Basis of preparation

Except for the financial instruments measured at fair value and the net defined benefit asset recognized at the present value of defined benefit obligations less the fair value of the plan assets, the consolidated financial statements were prepared on the basis of historical cost.

Fair value measurements are classified into Level 1, 2, and 3 based on the degree to which an input is observable and the significance of the input:

1. Level 1 inputs: The quoted price in an active market for identical assets or liabilities that is accessible on the measurement date (before adjustment).

2. Level 2 inputs: Other than quoted prices included in Level 1, the inputs that are observable for assets or liabilities directly (i.e. the price) or indirectly (i.e. inferred from the price).

3. Level 3 inputs: The inputs that are not observable for assets or liabilities.

4. (III) Criteria for classification of assets and liabilities as current or non-current Current assets include:

5. Assets that are held mainly for trading purposes;

6. assets expected to be realized within 12 months after the balance sheet date; and

7. cash or cash equivalents (excluding those that are restricted for being used for exchange or settlement of liabilities within 12 months after the balance sheet date).

Current liabilities include:

1. Liabilities that are held mainly for trading purposes;

2. liabilities that will be settled within 12 months after the balance sheet date; and

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 17

1. liabilities whose due date cannot be unconditionally extended to more than 12 months after the balance sheet date.

Assets or liabilities that are not the above-mentioned current assets or current liabilities are classified as non-current assets or non-current liabilities.

• (IV) Basis of consolidation

Entities covered by the consolidated financial statements include the Company and the entities controlled by the Company (i.e., subsidiaries). The financial statements of the subsidiaries are adjusted to have their accounting policies be consistent with those of Group. All the transactions, account balances, profits, and expenses/losses between entities are eliminated during preparation of the consolidated financial statements.

For details of subsidiaries, shareholding percentage in them, and their business activities, refer to Note 11 and Appendix Tables 5 and 6.

• (V)

• Foreign currency

Entities preparing their own financial statements translated the transactions denominated in currencies other than their functional currency (i.e., foreign currencies) into their functional currency by applying the exchange rate prevailing on the transaction date.

Monetary items in foreign currencies are translated at the closing exchange rate on each balance sheet date. Exchange differences arising from settlement or translation of the monetary items are recognized in the profit or loss of the period.

Non-monetary items in foreign currencies measured at fair value are translated at the exchange rate prevailing on the date the fair value was determined. The exchange differences resulting therefrom are recognized in profit or loss of the period, or in other comprehensive income when changes in fair value of such items were designated to be recognized in other comprehensive income.

Non-monetary items in foreign currencies measured at historical cost are translated at the exchange rate on the date of transaction and are not retranslated.

During preparation of the consolidated financial statements, the assets and liabilities of foreign operations (including the subsidiaries, associates, or branch companies of which the countries they operate or the currencies they use are different from those of the Group) are translated into NTD at the exchange rate prevailing on each balance sheet date. The income and expense items are translated at the average

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 18

exchange rate of the period, and the exchange differences resulting therefrom are recognized in other comprehensive income.

• (VI) Inventories

Inventories include raw materials, work-in-progress, finished goods, and products. Inventories are measured at the lower of cost and net realizable value. Cost and net realizable values are compared on an item by item basis, except inventories of the same category. Net realizable value refers to the estimated selling price in a normal situation less the estimated cost needed to complete the work and the estimated cost needed to complete the sale. The weighted average method is used to calculate the inventory cost.

• (VII) Investment in associates

An associate refers to a company over which the Group has a significant influence, but it is not a subsidiary or joint venture.

The Group accounts for its equity in an associate using the equity method.

Under the equity method, the investment in associates is initially recognized at its costs and the amount of increase or decrease in the carrying amount of such investment after the date of acquisition depends on the Group’s shares of profit/loss and other comprehensive income in the associates and joint ventures and the distributed profits. In addition, changes to the Group’s equity in the associates are recognized based on our shareholding ratio.

When the Group does not subscribe to new shares issued by associates based on its shareholding ratio, resulting in changes in the shareholding ratio and consequently to the net equity value of investment, the Group accounts for such changes by adjusting capital reserve - changes in the net equity of associates recognized under the equity method and investments under equity method. However, if subscription or acquisition of the shares is not based on the shareholding ratio, leading to a decrease in the Group’s ownership equity in the associates, the amounts related to the associate in other comprehensive income are reclassified according to the percentage of such decrease and treated with the same accounting treatment basis as the one which the associates' direct disposal of relevant assets or liabilities shall be in accordance with. If the said adjustment shall be debited to capital reserves, and the balance of capital reserves arising from investment under equity method is insufficient to be offset, the difference is debited to retained earnings.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 19

When the Group’s shares of losses in the associates are equal to or exceeded our equity in the associates (including the carrying amount of investment in the associate under the equity method and other long-term equities that in nature are part of the net investment portfolio made by the consolidated company in the associate concerned), the Group does not recognize further losses. The Group recognizes additional losses and liabilities only when any legal obligation or constructive obligation is incurred or the Group made payment on behalf of the associates.

For impairment evaluation, the Group tests the entire investment book value for impairment as a single asset by comparing the recoverable amount and book value of the investment. Any recognized impairment loss is also part of the investment book value. Any reversal of the impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increased.

The Consolidated Company ceases to adopt the equity method from the date its investment ceases to be an affiliate, and its retained interest in the former affiliate is measured at fair value. The difference between the fair value and the price of disposal and the carrying amount of the investment on the date of cessation of the equity method is stated as included in the current year's profit or loss. In addition, all amounts recognized in other comprehensive income related to the affiliated enterprise shall be accounted for on the same basis as the basis for the direct disposal of the relevant assets or liabilities by the affiliated enterprise.

The profit or loss generated from the upstream, downstream, and side stream transactions between the Group and the associates is recognized in the consolidated financial statements only when such profit or loss is irrelevant to the Group’s equity in the associates.

(VIII) Property, plant and equipment

Property, plant, and equipment are initially recognized at cost and subsequently at cost net of accumulated depreciation and accumulated impairment.

Except for the self-owned land, which is not depreciated, each significant part of the property, plants, and equipment is separately depreciated on the straight-line basis over their useful life. The Consolidated Company reviews the estimated useful life, residual value, and method of depreciation at least once before the end of each year and prospectively recognizes the effect from changes in accounting estimates.

When property, plant, and equipment is disposed of, the difference between the net disposal proceeds and the asset book value is recognized in profit or loss.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 20

(IX) Patent right

Patent rights acquired separately are initially measured in accordance with the cost and subsequently based on the cost net of accumulated amortization and impairment losses. Patent rights are amortized on the straight-line basis over their useful life. The Group reviews the estimated useful life, residual value, and method of amortization at least once before the end of each year and prospectively recognizes the effects of changes in accounting estimates.

(X) Impairments of property, plant, and equipment, right-of-use assets, and intangible assets

The Group assesses whether there are any signs indicating that any property, plant, and equipment, right-of-use assets, or intangible assets might be impaired on each balance sheet date. If any such indication exists, then the asset’s recoverable amount is estimated. When the recoverable amount of individual assets cannot be estimated, the Group estimates the recoverable amount of the cash-generating unit to which the assets belong. Corporate assets are allocated on a reasonable and consistent basis to the smallest group of cash-generating units

The recoverable amount is the higher of the fair value less costs of sale and the value in use. When the recoverable amount of any individual assets or cash-generating units is less than the book value, the book value of the individual assets or cash-generating units is adjusted down to the recoverable amount, and the impairment loss is recognized in profit or loss.

When the impairment loss is reversed subsequently, the book value of the asset or cash-generating unit is adjusted up to the revised recoverable amount. However, the increased book value shall not exceed the book value that would have been determined (net of amortization or depreciation) had no impairment loss been recognized in prior years. The reversal of the impairment loss is recognized in profit or loss.

(XI) Financial instruments

Financial assets and financial liabilities are initially recognized in the balance sheet when the Group becomes a party to the financial instrument contract.

Financial assets or financial liabilities other than those measured at fair value through profit or loss are initially recognized at the fair value plus the transaction costs that can be directly attributed to acquisition or issuance of such financial assets or liabilities. Any transaction cost directly attributable to the acquisition or issuance

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 21

of the financial assets or financial liabilities measured at fair value through profit or loss is immediately recognized in profit or loss.

1. Financial assets

The arms-length transactions of financial assets are recognized and derecognized using the transaction date accounting method.

• (1) Type of measurement

The Group’s financial assets include financial assets measured at fair value through profit or loss, financial assets measured at amortized cost, and investment in equity instrument measured at fair value through other comprehensive income.

• A. Financial assets at fair value through profit or loss

Financial assets measured at fair value through profit or loss refer to those mandatorily measured at fair value through profit and loss. Financial assets mandatorily measured at fair value through profit or loss include investments in equity instruments not designated to be measured at fair value through other comprehensive profit or loss, and investments in debt instruments not qualified for classification as measured at amortized cost or at fair value through other comprehensive income.

Financial assets measured at fair value through profit or loss are measured at fair value; the dividends and interest derived therefrom are recognized in other income and interest income, respectively. Gains or losses from re-measurement are recognized in other gains and losses.

• B. Financial assets at amortized cost

When the Group's invested financial assets meet both of the following two conditions, they are classified as financial assets measured at amortized cost:

• a. The financial assets are held within a business model whose objective is collecting contractual cash flows; and

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

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After the initial recognition, the financial assets measured at amortized cost (including cash and cash equivalents and receivables [including those due from related party]) are measured at the amortized cost equal to the total book value determined under the effective interest method less any impairment losses, and any gain or loss from foreign currency translation is recognized in profit or loss.

Interest income is calculated as the effective interest rate times the total book value of financial assets, except under the following two circumstances:

• a. For purchased or originated credit-impaired financial assets, the interest income is calculated as the credit-adjusted effective interest rate times the amortized cost of the financial assets.

• b. For financial assets that are not purchased or originated credit-impaired but subsequently become credit-impaired, the interest income is calculated as the effective interest rate times the amortized cost of the financial assets, in all subsequent periods following the period in which the impairment occurred.

Financial assets are deemed to be credit-impaired upon the occurrence of significant financial difficulties confronting the issuer or debtor; default; or the circumstance that the debtor is likely to file for bankruptcy or other financial reorganization.

Cash equivalents include time deposits that are highly liquid, readily convertible to known amounts of cash, and subject to an insignificant risk of changes in value, and that mature within three months after the acquisition date; cash equivalents are used to meet short-term cash commitments.

• C. Investment in equity instruments at fair value through other comprehensive income

At initial recognition, the Group may make an irrevocable election to measure the investment in equity instruments that are held not for trading, that are not recognized by the acquirer in a business merger, and that have no consideration, at fair value through other comprehensive income.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 23

Investment in equity instruments measured at fair value through other comprehensive income is measured at fair value. Subsequent changes in the fair value are recognized in other comprehensive income and accumulated in other equity.

The dividends derived investment in equity instruments measured at fair value through other comprehensive income are recognized in profit or loss when the Group’s right to receive dividends is determined, except under the circumstance that such dividends apparently represent a partial return of the investment cost. (2) Impairment of financial assets

The Group assesses impairment losses on the financial assets (including accounts receivable [including those due from related parties]) measured at amortized cost based on the expected credit losses on each balance sheet date.

Loss allowance for accounts receivable is recognized based on the lifetime expected credit losses. The Group first assess whether the credit risk on other financial assets significantly has increased after the initial recognition. When the increase is not significant, the loss allowance for the financial assets is recognized at the 12-month expected credit losses; when the increase is significant, the loss allowance is recognized at the lifetime expected credit losses.

Expected credit losses are the weighted average credit losses with the probability of default ('PD') as the weight. 12-month expected credit losses represent the expected credit losses on financial instruments from any potential default within 12 months after the reporting date. Lifetime expected credit losses represent the expected credit losses on financial instruments from any potential default during the expected lifetime.

For the purpose of internal credit risk management, financial assets are deemed to be defaulted when any of the following circumstance occurs, without consideration of the collaterals held:

A. Any internal or external information indicates that a debtor is impossible to pay off the debts.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 24

• B. Any contractual payment is overdue, unless any reasonable and supportable information demonstrates that a more lagging default criterion is more appropriate.

The impairment loss on all financial assets is deducted from the book value of the financial assets through their allowance account.

• (3) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred to other entities.

For derecognition of the entire financial assets measured at amortized cost, the differences between the book value and the received consideration are recognized in profit or loss. For derecognition of the entire investments in equity instruments measured at fair value through other comprehensive income, the cumulative gain or loss is directly transferred to retained earnings and not reclassified as profit or loss.

1. Equity instruments

Equity instruments issued by the Group are recognized as the amount of consideration received, less the direct cost of issuance.

When a reacquired equity instrument is originally owned by the Company, the re-acquisition is recognized as a deduction to equity. Purchase, sale, issuance, or cancellation of the equity instruments owned by the Company are not recognized in profit or loss.

1. Financial liabilities

2. (1) Subsequent measurement

All financial liabilities are subsequently measured at amortized cost using the effective interest method.

• (2) Derecognition of financial liabilities

For derecognition of financial liabilities, the differences between the book value and the consideration paid are recognized in profit or loss.

• (XII) Short-term warranty provision

The warranty obligation that ensures agreement between products and agreed

specifications is management’s best estimate of the expenditure to settle the Group’s

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 25

obligations, and is recognized at the time when revenue is recognized for underlying products.

(XIII) Revenue recognition

After identifying the performance obligations under a contract with customers, the Group allocates the transaction price to each performance obligation and recognizes the allocated amount as revenue after each performance obligation is fulfilled. The Group’s revenue comes from equipment trading and wafer reclamation, and is recognized when products are accepted by customers; or when they are shipped or delivered to the place designated by customers, depending on the contractual terms. Before being recognized as revenue, advance receipts are recognized as contract liability.

(XIV) Lease

At inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1. The Consolidated Company as the lessor

It is classified as operating lease. Lease payments from an operating lease are recognized as revenue on a straight line basis over the lease term.

1. The Consolidated Company is a lessee

When the Company is a lessee, the lease payment from the leases of low-value underlying assets to which the exemption of recognition is applied and short-term lease is recognized in expenses on the straight-line basis over the lease term, while right-of-use assets and lease liabilities with respect to other leases are recognized on the lease commencement date.

The right-of-use assets are initially measured at cost(including the initial recognized amount of lease liabilities), and subsequently measured at the cost net of accumulated depreciation and accumulated impairment losses, adjusted for remeasurements of lease liabilities. Right-of-use assets are separately presented in the consolidated balance sheet.

Right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term.

Lease liabilities is initially measured at the present value of lease payment (fixed payments). If the interest rate implicit in a lease can be readily determined, the

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 26

lease payments are discounted at the interest rate. When such interest rate cannot be readily determined, the lessee's incremental borrowing rate of interest is used.

Subsequently, the lease liabilities are measured at amortized cost under the effective interest method, and the interest expenses are amortized over the lease term. When future lease payments change as a result of a change in the lease term, the Group re-measures the lease liabilities and adjust the right-of-use assets accordingly. However, the residual remeasurements are recognized in profit or loss when the book value of right-of-use assets is reduced to zero. Lease liabilities are separately presented in the consolidated balance sheet.

(XV) Government grants

Government grants may be recognized only when it is reasonable to ensure that the Group will comply with the conditions incidental to the government grants and the subsidies may be received affirmatively.

Government grants related to any gains are recognized in other income on a systematic basis within the period when the costs to be subsidized by the government are recognized in expenses by the Group. Government grants with a condition by which the Group is required to acquire non-current assets through acquisition, construction, or by other means are initially recognized as deferred revenue and subsequently transferred to profit or loss on a reasonable and systematic basis over the useful live of the underlying assets.

If the government grants are intended to make up the expenses or losses that have occurred, or immediately finance the Group without incurring any future cost, such subsidies are recognized in profit or loss during the period when they can be received.

(XVI) Employee benefits

1. Short-term employee benefits

Short-term employee benefits are measured at non-discounted amount expected to be paid in exchange for the services to be provided by the employees.

1. Post-employment benefit

The pension contributed under the Defined Contribution Pension Plan is recognized in expenses during the period when employees provide services.

Defined benefit cost under the Defined Benefit Pension Plan is calculated actuarially using the projected unit credit method. Service costs and net interest

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 27

on net defined benefit liabilities are recognized as employee benefit expenses when they are incurred. Remeasurements are recognized in other comprehensive income and presented in retained earnings when they occurred, and are not reclassified to profit or loss in subsequent periods.

The net defined benefit assets represent the appropriation surplus of the defined benefit pension plan. The net defined benefit assets shall not exceed the present value of the refundable contributions from the plan or the reduced future contributions.

(XVII) Income tax

Tax expenses are the total of current income tax and deferred income tax.

1. Current income tax

The Group determines the income (loss) for the current period in accordance with the laws and regulations prevailing in each taxation jurisdiction and, based this, calculates the income tax payable (recoverable).

The additional income tax on undistributed earnings that is calculated according to the Income Tax Act of the Republic of China is recognized in the year when the related resolution is made at the shareholders’ meeting.

The adjustments to the income tax payable in the previous year are recognized in the current income tax.

1. Deferred income tax

Deferred income tax is calculated based on the temporary difference between the book value of assets and liabilities and the tax basis for calculation of taxable income.

Deferred income tax liabilities are generally recognized based on all taxable temporary differences; deferred income tax assets are recognized when taxable income sufficiently enough to offset the deductible temporary differences and loss carryforwards is highly likely in the future.

Taxable temporary differences related to investment in subsidiaries and associates are recognized in deferred income tax liabilities except that the Group can control the timing of reversal of the taxable temporary differences and that such differences are not likely to be reversed in the foreseeable future. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilized in the foreseeable future.

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The book value of deferred income tax assets is reviewed at each balance sheet date. When any of the deferred income tax assets is not likely to have adequate taxable income necessary for the recovery of all or part of the assets anymore, the book value thereof is reduced. Those that are not originally recognized in deferred income tax assets are reviewed at each balance sheet date. When any of those is likely to generate taxable income necessary for the recovery of all or part of the assets in the future, the book value thereof is increased.

Deferred income tax assets and liabilities are measured at the tax rate of the period in which the liabilities or assets are expected to be settled or realized. The tax rate is subject to the tax rate and tax law legislated or substantively legislated on the balance sheet date. The deferred income tax liabilities and assets are measured to reflect the tax consequence on the balance sheet date arising from the method that the Group expects to use to recover or settle the book value of the liabilities and assets.

3.

• Current and deferred income taxes

Current and deferred income taxes are recognized in profit or loss, or in other comprehensive income if they are related to the current and deferred income taxes designated to be recognized in other comprehensive income.

5. Significant Accounting Judgments, Assumptions, and Major Sources of Estimation Uncertainty

For adoption of the accounting policies, the management, based on historical experience and other relevant factors, must make judgments, estimates and assumptions related to the information that cannot be readily acquired from other sources. The actual results may differ from those estimates.

When the Consolidated Company develops significant accounting estimates, it takes the development of the COVID-19 pandemic and its effect on the Taiwan economy into account when making significant accounting estimates for cash flows, growth rate, discount rate, and profitability. The management will continue to review the estimates and basic assumptions.

Through an assessment, the management of the Group does not think an uncertainty exists in material accounting judgments, estimates, or assumptions.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 29

6. Cash and cash equivalents

December 31, 2023 December 31, 2022 Cash on hand and working capital $ 372 $ 570 Bank check and demand deposit 2,969,110 3,638,016 Cash equivalents Time deposit whose initial maturity date will be due within 3 months 1,691,495 443,365 $ 4,660,977 $ 4,081,951

The annual interest rate for Time deposit whose initial maturity date will be due within 3 months was 2.00% ~ 5.35% and 3.55% ~ 4.80% on December 31, 2023 and 2022, respectively.

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

December 31, 2023 December 31, 2022

Current financial assets at fair value through profit or loss Domestic investments Emerging stock market FORWARD SCIENCE CORPORATION $ 7,529 $ -

The Consolidated Company resigned as the representative of directors of FORWARD SCIENCE CORP. in July 2023 and lost significant influence. Therefore, the investment originally under the equity method was reclassified as financial assets at FVTPL. Please refer to Note 12 for relevant information.

8. Financial assets at fair value through other comprehensive income

December 31, 2023 December 31, 2022

Investment in equity instruments measured at fair value through other comprehensive income

Domestic investments

Shares of TWSE-listed companies through private placement SPIROX CORP. $ 157,011 $ 89,205 Overseas investments Shares not traded on an exchange or OTC INFINITESIMA LIMITED 53,125 49,357 $ 210,136 $ 138,562

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 30

The Group invested in the common shares of the aforementioned companies according to its medium-term and long-term strategies, and expected to gain profits through long-term investment. Since the Group's management deemed that the recognition of short-term changes in the investment’s fair value in profit or loss was not consistent with the said long-term investment plan, they opted to have the investment measured at fair value through other comprehensive income.

The dividend income of NT$3,998 and NT$ 800 thousand (recognized under other income) by the Group in 2023 and 2022,had to do with the shares held as of December 31, 2023 and 2022.

9. Notes receivable and accounts receivable (including those due from related parties)

Notes receivable Accounts receivable (including those due from related parties) Less: Allowance for doubtful accounts	December 31,2023 $ 11,102 826,543 837,645 50,264 $ 787,381	December 31,2022	December 31,2022
			$ 1,904 912,410 914,314 54,616 $ 859,698

The Group’s average credit period for sales of goods is 120 days on average. Accounts receivable paid within 60 days after the invoice date or the sale date won’t be charged any interest. If accounts receivable are not paid within 60 days, the Group will assess the credit status of each individual transaction party on a business month to measure possible gains or losses and reduce possible losses.

The Group recognizes the loss allowance for notes receivable and accounts receivable (including those due from related parties) based on the lifetime expected credit losses. The lifetime expected credit losses are calculated by considering the customer’s default record and current financial position, and the industrial and economic conditions. When there is any evidence showing that the trading counterparty is facing serious financial difficulties and the Group cannot estimate a reasonable recoverable amount, the Group directly writes off related notes receivable and accounts receivable, but will continue recourse activities. Any recovered amount through the recourse activities is recognized in profit or loss.

The Group recognizes the loss allowance for notes receivable and accounts receivable (including those due from related parties) as follows:

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 31

December 31, 2023

0–180 days Total book value $ 678,668 Loss allowance (lifetime ECL) - Amortized cost $ 678,668 December 31, 2022 0–180 days Total book value $ 755,004 Loss allowance (lifetime ECL) - Amortized cost $ 755,004		0–180 days	1	81–273 days	2	74–365 days	3	66–540 days	5	41–730 days		More than 731 days		Total
			( 1	$ 47,029 2,351) $ 44,678 81–273 days	( 2	$ 47,774 4,777) $ 42,997 74–365 days	( 3	$ 31,170 14,027) $ 17,143 66–540 days	( 5	$ 12,983 9,088) $ 3,895 41–730 days	(	$ 20,021 20,021) $ - More than 731 days	(	$ 837,645 50,264) $ 787,381 Total
Total book value Loss allowance (lifetime ECL) Amortized cost
		$ 755,004 - $ 755,004	(	$ 31,767 1,588) $ 30,179	(	$ 39,241 3,924) $ 35,317	(	$ 66,726 30,027) $ 36,699	(	$ 8,330 5,831) $ 2,499	(	$ 13,246 13,246) $ -	(	$ 914,314 54,616) $ 859,698

Changes in the loss allowance for notes receivable and accounts receivable (including those due from related parties) are as follows:

Balance - beginning of period Less: Impairment loss (reversed) in the year Less: Actual amount written off in the year Differences from translation of foreign currencies Balance - end of year	2023 $ 54,616 ( 3,806 ) - ( 546) $ 50,264	2022
		$ 41,830 12,597 ( 110 ) 299 $ 54,616

The Group did not hold any collateral against the balance of notes receivables and accounts receivables (including those due from related parties).

Customers who individually account for 10% of the Group’s total accounts receivable (including those due from related parties) are as follows:

10.Inventories Products Finished-goods Work-in-process Raw materials Cost of sales related to inventories Loss on inventory devaluation	December 31,2023 Company A - December 31,2023 $ 8,189,969 286,228 697,637 457,413 $ 9,631,247 2023 $ 4,705,858 $ 339,097	December 31,2022	December 31,2022
		Company A December 31,2022
			$ 4,199,165 162,397 305,647 607,091 $ 5,274,300 2022
			$ 3,559,735 $ 50,784

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 32

11. Subsidiary

Entities in the consolidated financial statements are as follows:

Entities in the	Entities in the	Entities in the	Entities in the	Entities in the	Entities in the	consolidated financial statements are as f
						SCIENTECH CORPORATION
SCIENTECH MATERIALS CORPORATION (SCIENTECH MATERIALS)			NATGEM INC. (NATGEM)		ACROMASS TECHNOLOGIES, INC. (ACROMASS)
	Name of investor SCIENTECH CORPORATION SCIENTECH CORPORATION SCIENTECH CORPORATION SCIENTECH CORPORATION SCIENTECH CORPORATION SCIENTECH CORPORATION SCI SCI SII SCIENTECH ENGINEERING SHANGHAI

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 33

Note 1: SCIENTECH MATERIALS was dissolved through a resolution reached at the Board of Directors meeting dated August 30, 2021. As of December 31, 2023, the liquidation process was not yet completed.

• Note 2: The profit or loss of SCIENTECH MATERIALS for 2023 and 2022 was computed based on the financial statements for the same period that were not audited by CPAs. The management of the Group didn’t think that not having SCIENTECH MATERIALS’ financial statements audited by CPAs would cause any material impact.

• Investments accounted for using equity method

Significant associate XTEK SEMICONDUCTOR (HUANGSHI) CO., LTD. Individually insignificant associate	December 31,2023 $ 416,578 6,514 $ 423,092	December 31,2022	December 31,2022
			$ 457,968 36,770 $ 494,738

(I) Significant associate

Companyname XTEK SEMICONDUCT OR (HUANGSHI) CO., LTD.	Main business activities Manufacturing and sale of semiconductor equipment and peripherals	Main business premises China	Proportion of Shareholding and VotingRight	Proportion of Shareholding and VotingRight
			December 31, 2023 17.21%	December 31, 2022
				17.21%

The Group’s share of profits/ losses and other comprehensive income in associates under the equity method were recognized based on the financial statements for the same period that were audited by CPAs.

The following financial information summary is prepared based on the associates’ IFRS Accounting Standards of individual financial statements, and has reflected the adjustments required for adoption of the equity method.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 34

XTEK SEMICONDUCTOR (HUANGSHI) CO., LTD.

Current assets Non-current assets Current liabilities Non-current liabilities Equity The Group’s shareholding ratio The Group’s equity Unrealized gains on downstream transactions Others Investment book value Net loss in the current year Other comprehensive income Total comprehensive income	December 31,2023 $ 737,318 2,978,861 ( 170,722 ) ( 841,694) $ 2,703,763 17.21% $ 465,440 ( 50,943 ) 2,081 $ 416,578 2023 ( $ 161,568 ) - ($ 161,568)	December 31,2022	December 31,2022
		$ 1,630,138 2,800,076 ( 265,517 ) (1,248,321) $ 2,916,376 17.21% $ 502,039 ( 46,152 ) 2,081 $ 457,968 2022
			( $ 318,577 ) - ($ 318,577)

Although the Group’s shareholding in the significant associate did not reach 50%, the Group was individually the largest shareholder. After considering the number and dispersion of voting shares held by other shareholders, the Group found the shareholdings are not diffuse. As a result, the Group is not yet able to direct the company’s relevant activities and thus does not have control over it. The Group thinks that it has only significant influence over the company and thus regards the company as an associate accounted for using the equity method.

XTEK SEMICONDUCTOR (HUANGSHI) CO., LTD. launched a series follow-on offerings during March and June 2022. Failing to subscribe to the follow-on offering in proportion to its shareholding percentage, the Group saw its consolidated shareholding in XTEK SEMICONDUCTOR (HUANGSHI) CO., LTD. dropped from 22.36% to 17.21%. Therefore, the Group reclassified the amount already recognized in other comprehensive income proportionally, and recognized gains on disposal of investments in the amount of NT$5,426 thousand. In addition, since the net equity value of the investee increased, capital reserves - associates accounted for using equity method were adjusted by NT$103,324 thousand. Hence, although the Group held less than 20% stake in XTEK SEMICONDUCTOR

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 35

(HUANGSHI) CO., LTD. the Group still wielded significant influence over it because the Group had a representative on its board of directors. Therefor, XTEK SEMICONDUCTOR (HUANGSHI) CO., LTD. was accounted for using the equity method.

For the main business activities, main business premises, and company registration information of the said associates, refer to Appendix Table 6 Investment in Mainland China.

(II) Summary information on individually insignificant associates

Although holding less than 20% of the shares of some individually insignificant associates, the Group has a representative in their board of directors and thus has significant influence over them.

The Consolidated Company disposed of 936,000 shares and 40,000 shares of FORWARD SCIENCE CORP. in January to July 2023 and the fiscal year of 2022, respectively. The disposal proceeds were NT$48,940 thousand and NT$1,868 thousand, respectively, and recognized disposal investment gains of NT$ 35,276 thousand and NT$1,284 thousand, respectively. In addition, the Consolidated Company resigned as the representative director of FORWARD SCIENCE CORP. in July 2023 and lost significant influence. The Group held the remaining 3.25% of equity, the fair value of which was NT$52,736 thousand on the disposal date, transferred to the account of the fair value through profit and loss. and a gain on disposal of NT$51,600 thousand was recognized.

The Group’s share of some individually insignificant associates of profit or loss and other comprehensive income in them were computed based on the financial statements not audited by CPAs. However, the management of the Group did not think that not having the financial statements audited by CPAs would cause any material impact.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 36

13. Property, plant and equipment

Cost Balance as of January 1, 2023 Increase Decrease Reclassification Net exchange differences Balance as of December 31, 2023 Accumulated depreciation Balance as of January 1, 2023 Impairment loss recognized Depreciation Decrease Net exchange differences Balance as of December 31, 2023 Net amount on December 31, 2023 Cost Balance January 1, 2022 Increase Decrease Reclassification Net exchange differences Balance December 31, 2022 Accumulated depreciation and impairment Balance as of January 1, 2022 Depreciation Decrease Reclassification Net exchange differences Net exchange differences Balance as of December 31, 2022 Net amonut on December 31, 2022	L a n d $ 582,262 - - - - $ 582,262 $ 582,262 L a n d $ 280,062 302,200 - - - $ 582,262 $ 582,262	B u il di n gs a n d structures $ 1,016,711 22,058 ( 15,031 ) - ( 1,179) $ 1,022,559 $ 385,751 - 35,197 ( 15,031 ) ( 487) $ 405,430 $ 617,129 B u il di n gs a n d structures $ 997,978 39,719 ( 21,918 ) - 932 $ 1,016,711 $ 374,026 33,345 ( 21,918 ) - 298 $ 385,751 $ 630,960	Machinery a n d equipment $ 483,089 16,825 ( 46,528 ) 45,394 - $ 498,780 $ 206,702 916 62,167 ( 46,528 ) - $ 223,257 $ 275,523 Machinery a n d equipment $ 442,300 46,972 ( 12,520 ) 6,337 - $ 483,089 $ 163,350 57,610 ( 12,517 ) ( 1,741 ) - $ 206,702 $ 276,387	O t h e r f a c i l i t i e s $ 56,854 17,790 ( 1,331 ) 394 ( 180) $ 73,527 $ 23,217 - 12,814 ( 1,316 ) ( 141) $ 34,574 $ 38,953 O t h e r f a c i l i t i e s $ 47,212 15,315 ( 6,146 ) 250 223 $ 56,854 $ 18,956 9,459 ( 5,181 ) ( 28 ) 11 $ 23,217 $ 33,637	Unfinished construction $ 19,736 - - - - $ 19,736 $ - - - - - $ - $ 19,736 Unfinished construction $ - 19,736 - - - $ 19,736 $ - - - - - $ - $ 19,736	T o t a l
						$ 2,158,652 56,673 ( 62,890 ) 45,788 ( 1,359) $ 2,196,864 $ 615,670 916 110,178 ( 62,875 ) ( 628) $ 663,261 $ 1,533,603 T o t a l
						$ 1,767,552 423,942 ( 40,584 ) 6,587 1,115 $ 2,158,652 $ 556,332 100,414 ( 39,616 ) ( 1,769 ) 309 $ 615,670 $ 1,542,982

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 37

The Group’s property, plant, and equipment is solely for own use.

In 2023, the Consolidated Company assessed that some of the equipment has no future use demand, so the recoverable amount was assessed as zero. Based on the future recoverable amount of the property, plant and equipment, the Consolidated Company recognized impairment loss of NT$916 thousand in 2023.

Depreciation is provided on a straight line basis over the following useful lives:

Buildings and structures
Plant and main structures	20–50 years
Electrical, plumbing & air
conditioning equipment	3–10 years
Machinery and equipment	5–10 years
Other facilities	3–5 years

The Group assessed the useful life of each significant component of property, plant , and equipment, and depreciated them individually.

Proceeds for acquisition of property, plant, and equipment include prepayments for equipment and equipment payables; Below is the reconciliation:

				2023		2022
		Increase in property, plant and
		equipment	$	56,673	$	423,942
		Increase (decrease) in
		prepayments for equipment		53,026	(	31,292 )
		Decrease (increase) in equipment
		payables (presented under other
		payables)	(	50,478)		8,432
			$	59,221	$	401,082
14.		Lease agreement
	(I)	Right-of-use assets
			December 31,2023		December 31,2022
		Right-of-use assets, net
		Land	$	60,006	$	64,584
		Buildings and structures		19,733		2,951
		Other facilities		941		901
			$	80,680	$	68,436
				2023		2022
		Increase in right-of-use assets	$	23,476	$	2,291
		Depreciation expenses -
		Right-of-use assets
		Land	$	4,578	$	3,942
		Buildings and structures		4,707		7,208
		Other facilities		1,841		2,039
			$	11,126	$	13,189

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 38

Except for the additions and depreciation expenses recognized listed above, there was no significant sublease or impairment of the Consolidated Company's right-of-use assets in 2023 and 2022.

(II) Lease liabilities

Lease liabilities
Book value of lease liabilities Current Non-current	December 31,2023 $ 12,223 $ 71,855	December 31,2022
			$ 7,323 $ 63,594

The range of discount rates for lease liabilities is as follows:

Land Buildings and structures Other facilities	December 31,2023 2.00%~3.00% 0.78%~3.00% 0.78%~0.92%	December 31,2022
		2.00%~3.00% 0.78%~3.00% 0.92%

(III) Material lease activities and terms

The Group leased land from Chairman HUNG-LIANG HSIEH to construct buildings as offices under a lease contract that has a lease term of 5 years, will automatically renew upon expiration of a lease term, and gives the Company the option right to rent and buy the buildings. The Group may not sublease or consign the underlying assets of the lease, in whole or in part, unless otherwise agreed by the Lessor.

(IV) Other lease information

Other lease information
Short-term lease expense Total cash outflow from leases		2023 $ 16,046 $ 27,929		2022
				$ 11,576 $ 25,828

For property, plant, and equipment leases which qualify as a short-term lease, the Group elected to apply the recognition exemption to them and thus did not recognize right-of-use assets and lease liabilities for them.

15. Other assets

Other assets
Restricted assets Long-term prepayments Other receivables	December 31,2023 $ 146,910 36,481 3,707	December 31,2022
		$ 171,926 28,208 7,835

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 39

16.	Guarantee deposits paid Others Current Non-current Short-term borrowings Unsecured loans Loans against letter of credits Credit loans Annual interest rate	December 31,2023 3,225 12,522 $ 202,845 $ 161,306 41,539 $ 202,845 December 31,2023 $ 196,529 100,000 $ 296,529 1.38%	December 31,2022
			4,659 11,533 $ 224,161 $ 189,441 34,720 $ 224,161 December 31,2022
			$ 230,661 200,000 $ 430,661 0.50%~1.40%

The terms pertaining to the credit limits of some of the Group’s bank borrowings mentioned above stipulate financial restrictions, with which the Group fully complied.

17. Other accounts payable

Other accounts payable
Salary and bonus payable Remuneration payable to employees and directors Equipment payable Others	December 31,2023 $ 167,226 79,000 66,533 162,291 $ 475,050	December 31,2022
			$ 123,321 66,000 16,055 143,018 $ 348,394

18. Post-employment benefit plan

(I) Defined contribution plan

The retirement scheme under the “Labor Pension Act” to which the Company and all subsidiaries in the territory of the Republic of China apply are the defined contribution pension plan managed by the government. A

pension equal to 6% of employee’s monthly wage shall be contributed to the personal labor pension account with the Bureau of Labor Insurance.

Employees of subsidiaries in China are members of the retirement benefit plan managed by the Chinese local government. Such subsidiaries are required to fund the retirement benefit plan by contributing a certain percentage of salary cost to the plan.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 40

The Group’s obligation under such a government-run retirement benefit plan is limited to contributing a certain monetary amount.

(II) Defined benefit plan

The pension system adopted by the Company according to the “Labor Standards Act” is the defined benefit pension plan managed by the government. The years of service rendered and the average wage of six months prior to the approved retirement date shall be the reference for calculation of the pension to be paid to the employee. The Company appropriates 3% of the total monthly wage of an employee as the pension and remits the amount to the Labor Pension Fund Supervisory Committee, which will deposit the amount in a dedicated account under its name with the Bank of Taiwan. Before the end of each year, if the assessed balance in the account is inadequate to make a full payment of pensions to the employees who may meet the retirement conditions in the next year, the Company will make up the difference in one appropriation before the end of March in the following year. The account is managed by the Bureau of Labor Funds, Ministry of Labor, so the Company does not have the right to influence the investment management strategies.

The amounts of the defined benefit plan included in the consolidated balance sheet are listed as follows:

sheet are listed as follows:
Present value of defined benefit obligations Fair value of plan assets Net defined benefit liabilities (assets)	December 31,2023 $ 5,444 ( 7,222) ($ 1,778)	December 31,2022
		( (	$ 5,103 6,945) $ 1,842)

Changes in net defined benefit liabilities (assets) are as follows:

Balance January 1, 2023 Financial cost Recognized in profit or loss - interest expense (income) Remeasurements Return on plan assets (excluding the amount included in net interest)	Present value of defined benefit obligations $ 5,103 58 -	Fair value of plan assets ($ 6,945) ( 80) ( 66 )	Net defined benefit liabilities(asset s)
			($ 1,842) ( 22) ( 66 )

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 41

Actuarial gain - change in financial assumption Actuarial loss - experience adjustment Recognized in other comprehensive income Contribution by employer Balance December 31, 2023 Balance January 1, 2022 Previous service cost and settlement gains Recognized in profit or loss - interest expense (income) Remeasurements Return on plan assets (excluding the amount included in net interest) Actuarial loss - change in financial assumption Actuarial gain - change in financial assumption Actuarial gain - experience adjustment Recognized in other comprehensive income Contribution by employer Balance December 31, 2022	Present value of defined benefit obligations ( 25 ) 308 283 - $ 5,444 $ 5,333 31 - - ( 141 ) ( 120) ( 261) - $ 5,103	Fair value of plan assets - - ( 66) ( 131) ($ 7,222) ($ 5,179) ( 31) ( 1,635 ) - - ( 1,635) ( 100) ($ 6,945)	Net defined benefit liabilities(asset s)
			( 25 ) 308 217 ( 131) ($ 1,778) $ 154 - ( 1,635 ) ( 141 ) ( 120) ( 1,896) ( 100) ($ 1,842)

The Company is exposed to the following risks due to the pension system under

the “Labor Standards Act”:

1. Investment risk: The Bureau of Labor Funds, Ministry of Labor separately has invested the labor pension fund in domestic (foreign) equity and debt securities, and bank deposits. The investment is conducted at the discretion of the Bureau or under the mandated management. However, the profit generated from the Group’s plan assets shall be calculated with an interest rate not below the interest rate for a 2-year time deposit with local banks.

2. Interest rate risk: A decrease in the interest rates of government bonds leads to an increase in the present value of the defined benefit obligation, and the return

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 42

on debt investment of the plan assets will be increased accordingly. The net defined benefit liabilities may be partially offset by both increases.

1. Salary risk: The present value of the defined benefit obligation is calculated with reference to the future salary of the plan participants. Therefore, the present value of the defined benefit obligation would be increased by an increase in the plan participants’ salary.

The Company’s present value of the defined benefit obligation was calculated actuarially by a qualified actuary. The major assumptions on the date of measurement are as follows:

measurement are as follows:
Discount rate Rate of expected salary increase	December 31,2023 1.15% 3.00%	December 31,2022
		1.15% 3.00%

If there was any reasonably possible change to the major actuarial assumptions separately, the resulting increase (decrease) in the present value of the defined benefit obligation in the situation where all the other assumptions remained the same is as follows:

is as follows:
Discount rate Increase by 0.25% Decrease by 0.25% Rate of expected salary increase Increase by 0.25% Decrease by 0.25%	December 31,2023 ($ 77) $ 80 $ 73 ($ 71)	December 31,2022
	( (	( (	$ 62) $ 63 $ 56 $ 55)

Since the actuarial assumptions might be correlated to each other and it is unlikely that a single assumption changes alone, the aforesaid sensitivity analysis might not reflect the actual changes in the present value of the defined benefit obligation.

obligation.
Expected contribution within 1 year Average maturity of defined benefit obligations	December 31,2023 $ 176 5 years	December 31,2022
			$ 101 4 years

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 43

19. Equity

• (I) Common shares

Common shares
Number of authorized shares (thousand shares) Authorized capital Number of issued shares fully paid (thousand shares) Issued capital	December 31,2023 100,000 $ 1,000,000 80,328 $ 803,280	December 31,2022
			100,000 $ 1,000,000 81,139 $ 811,390

A share of issued common stock had a par value of NTD 10 and was entitled to one voting right and dividends.

• (II) Capital surplus

1. 2.	Available for makeup of loss, distribution of cash dividends, or transfer into capital Additional paid-in capital Consolidation excess Treasury stock transactions Only available for makeup of loss Changes in equity of associates recognized under equity method	December 31,2023 $ 464,029 29,831 - 493,860 192,041 $ 685,901	December 31,2022	December 31,2022
				$ 468,714 29,831 25,617 524,162 204,802 $ 728,964

1. These capital reserves may be used to make up losses, to distribute cash dividends, or to be transferred into the capital if the Company is not in the red. However, the amount of the transfer into the capital shall be limited to a certain percentage of the paid-in capital in every year.

2. Such capital reserves are either the effects of equity transactions recognized for changes in ownership interest in associates as a result of the Company’s falling to subscribe to or dispose of associates’ shares, or the adjustments of capital reserves of associates accounted for under the equity method.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 44

(III) Retained earnings and dividend policy

According to the dividend policy prescribed in the Company’s Articles of Incorporation, in the event of surplus earnings after closing of annual accounts, due taxes shall be paid in accordance with the law, and losses incurred in previous years shall be compensated for. Upon completion of the preceding actions, 10% of the remainder surplus shall be allocated as legal reserves. However, in the event that the accumulated legal reserves are equivalent to or exceed the Company's total paid-in capital, such allocation may be exempted. The remainder may be set aside as special reserves, or the previous recognized special reserves may be reversed, in accordance with laws and regulations. If there is remainder surplus, the Board of Directors shall draft a surplus distribution proposal regarding the remainder of the surplus as well as accumulated undistributed surplus, shall decide whether to distribute the distributable dividends and bonus in cash or in shares, in whole or in part, by a supermajority resolution at a Board of Directors, and shall report its decision to the Shareholders' Meeting. However, dividend distribution in the form of new shares shall be subject to a resolution of the Shareholders' Meeting.

For the distribution policy governing employee and director remuneration that is prescribed in the Company's Articles of Incorporation, please refer to Note 21(4) Remuneration to employees and directors.

The Company’s dividend policy considers the environment it is in and the growth stage it is at. To cope with future capital requirements and long-term financial planning while maintaining shareholder interests and a balanced dividend policy, shareholder dividends will be distributed in shares or in cash, as appropriate, based on future capital expenditure requirements and the extent of dilution effect on earnings per share. Of the shareholder dividends distributed, no less than 10% shall be in cash. The actual distribution percentage shall be determined by the Board of Directors by considering the Company’s business planning, investment plan, capital planning, and the changes in internal and external environment.

Legal reserves may be used to make up for losses. Where the Company does not sustain loss, the part of the legal reserves that exceeds the total paid-in capital by no greater than 25% may be appropriated as capital or distributed in cash.

The Company provided or reversed special reserves by Jin-Guan-Zheng-Fa-Zi No.1090150022.

The earnings distribution proposals for 2022 and 2021 are as follows:

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 45

Legal reserve Special reserves provided (reversed) Cash dividends Cash dividends per share (NT$)		2022		2021
		$ 57,010 $ 19,074 $ 289,181 $ 3.6		$ 42,027 $ 2,531 $ 200,820 $ 2.5

Proposals on the said cash dividends had been approved for distribution through a resolution at the Board of Directors meetings in March 2023 and 2022. Other earnings distribution items had been approved through a resolution at the Board of Directors meetings in June 2023 and July 2022.

The earnings distribution proposal for 2023 drafted at the Board of Directors meeting dated February 29, 2024 is as follows:

meeting dated February 29, 2024 is as follows:
Legal reserve Special reserves provided (reversed) Cash dividends Cash dividends per share (NT$)		2023
	(	$ 63,788 $ 33,380) $ 321,312 $ 4.00

The said cash dividends had been approved through a resolution at a Board of Directors meeting. Other distribution items are still pending a resolution at the Shareholders’ Meeting to be held in June 2024.

(IV) Treasury stock

Through a resolution at the Board of Directors meeting in September 2018, the Company decided to buy back 811 thousand treasury shares to transfer them to employees. The buyback was completed in October 2018, with an average buyback price of 62.47 dollars.

In August 2023, the Company's Board of Directors approved the cancellation of all treasury shares for capital reduction in accordance with Article 28-2, paragraph 4 of the Securities and Exchange Act, and the record date for the capital reduction was set as October 17, 2023.

According to the Securities and Exchange Act, the treasury shares held by the Company may not be pledged; nor may they be entitled to dividend distribution or voting rights.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 46

20. Revenue

Revenue
2023 Goods sales revenue Sale in the capacity of an agent $ 4,528,090 Manufacturing 2,147,124 6,675,214 Services revenue Commission 83,060 Maintenance 123,349 Others 23,064 229,473 Other operating revenue 7,294 $ 6,911,981 Contract balance December 31, 2023 December 31, 2022 otes receivable and accounts receivable (including those due from related parties) (Notes 9 and 27) $ 787,381 $ 859,698 Contract liabilities $ 11,818,592 $ 7,718,760			2022
			$ 3,392,333 2,013,641 5,405,974 100,006 80,701 13,889 194,596 49,416 $ 5,649,986 January 1, 2022
				$ 1,060,385 $ 3,168,045

Changes in contract liabilities mainly come from the difference between the points in time when the Company fulfills obligations and when customers make payments.

The amount that comes from the contract liabilities at the beginning of the year and the amount that comes from the revenue recognized in the year in which performance obligations were fulfilled are as follows:

21.	Goods sales Net profit		2023 $ 3,081,599		2022
					$ 1,377,075

• (I) Financial cost

(I) Financial cost
Interest on bank borrowings Interest on lease liabilities (II) Depreciation and amortization Property, plant and equipment Right-of-use assets		2023 $ 2,907 1,680 $ 4,587 2023 $ 110,178 11,126		2022
				$ 1,866 1,538 $ 3,404 2022
				$ 100,414 13,189

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 47

			2023		2022
		$	121,304	$	113,603
Summary of depreciation
expenses by function
Operating cost		$	34,881	$	30,800
Operating expenses			86,423		82,803
		$	121,304	$	113,603
Summary of amortization by
function
General and
administrative expenses		$	260	$	259
Employee benefit expenses
			2023		2022
Short-term employee benefits		$ 1,000,450		$	935,829
Post-employment benefit
Defined contribution plan			40,950		38,897
Defined benefit plan	(		22)		-
			40,928		38,897
		$ 1,041,378		$	974,726
			2023		2022
Summary by function
Operating cost		$	236,266	$	227,859
Operating expenses			805,112		746,867
		$ 1,041,378		$	974,726

(III) Employee benefit expenses

(IV) Remuneration to employees and directors

According to its Articles of Incorporations, the Company shall take the pre-tax profits inclusive of employee remuneration and director remuneration and allocate 5% – 15% of such profits as employee remuneration and another 2% or less as director remuneration. The Board of Directors meetings in February 2024 and March 2023 resolved on the employee remuneration and director remuneration estimated for 2023 and 2022, respectively - shown as follows:

Amount

Amount
Employee remuneration Directors' remuneration	2023 $ 70,000 9,000	2022
		$ 58,000 8,000

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 48

Any amount that changes after the approval and publication date of the annual consolidated financial statements is accounted for as changes in accounting estimates, and will be adjusted and recognized in the following year.

The actually distributed amount of employee remuneration and director remuneration for 2022 and 2021 tallied with the amount recognized in the consolidated financial statements for 2022 and 2021.

The information about remuneration to employees and directors determined by the Board of Directors may be viewed at TWSE’s Market Observation Post System (MOPS).

22. Income tax

• (I) Income tax recognized in profit or loss

Major components of income tax expenses:

Current income tax Tax incurred in the year Adjustments for the previous year Deferred income tax Tax incurred in the year Adjustments for the previous year Income tax expenses recognized in profit or loss		2023 $ 224,208 29,454) 194,754 15,288 - 15,288 $ 210,042		2022
	(		$ 193,890 ( 21,567) 172,323 ( 7,370 ) 2,350 ( 5,020) $ 167,303

Reconciliation of accounting income and income tax expenses is as follows:

		2023	2022
Net profits before tax		$ 860,344	$ 735,886
Income tax expense derived from
applying the pre-tax profit to
the statutory tax rate		$ 251,721	$ 172,938
Expense and loss not deductible
from tax		1,373	866
Tax exempt income	(	16,247 )	792
Additional levy on undistributed
earnings		10,242	8,745
Unrecognized deductible
temporary difference and loss
carryforwards	(	7,593 )	3,179

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 49

2023 2022 Adjustments for the previous year ( 29,454) ( 19,217) Income tax expenses recognized in profit or loss $ 210,042 $ 167,303 (II) Income tax benefits (expenses) recognized in other comprehensive income 2023 2022 Deferred income tax Tax incurred in the year －Translation from foreign operations $ 3,283 ( $ 6,823 ) －Re-measurements of defined benefit plans 43 ( 379) $ 3,326 ($ 7,202) (III) Current income tax liabilities December 31,2022 December 31,2021 Current income tax liabilities Income tax payable $ 182,388 $ 177,324		2022
	( $ 6,823 ) ( 379) ($ 7,202) December 31,2021
		$ 177,324

• (II) Income tax benefits (expenses) recognized in other comprehensive income

• (IV) Deferred income tax assets and liabilities

Deferred income tax assets Temporary differences Allowance for inventory write-down Undistributed earnings of subsidiaries Unrealized gains on transactions with associates Provisions Unrealized exchange losses Allowance for doubtful accounts Others Loss carryforwards Deferred income tax liabilities Temporary differences Undistributed earnings of subsidiaries				2023
		Balance - beginning of period $ 55,341 20,679 9,230 6,512 8,263 4,159 5,963 $ 110,147 $ 76,185	Recognized in profit or loss $ 40,244 5,582 958 ( 90 ) ( 1,020 ) ( 1,259 ) 153 $ 44,568 $ 59,856	Recognized in other comprehensive income $ - 1,876 - - - - 43 $ 1,919 ($ 1,407)		Exchange differences $ - - - - - - - $ - $ -	Balance - end ofyear
				(				$ 95,585 28,137 10,188 6,422 7,243 2,900 6,159 $ 156,634 $ 134,634

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 50

Deferred income tax assets Temporary differences Allowance for inventory write-down Undistributed earnings of subsidiaries Unrealized gains on transactions with associates Provisions Unrealized exchange losses Allowance for doubtful accounts Impairment loss Others Loss carryforwards Deferred income tax liabilities Temporary differences Undistributed earnings of subsidiaries				2022
	Balance - beginning of period $ 45,697 15,952 8,037 6,329 3,959 2,875 6,364 89,213 3,101 $ 92,314 $ 56,418		Recognized in profit or loss $ 9,644 10,860 1,193 183 4,304 1,284 32) 27,436 3,339) $ 24,097 $ 19,077	Recognized in other comprehensiv e income $ - ( 6,133 ) - - - - ( 379) ( 6,512 ) - ($ 6,512) $ 690		Exchange differences $ - - - - - - 10 10 238 $ 248 $ -	Balance - end ofyear
		( (						$ 55,341 20,679 9,230 6,512 8,263 4,159 5,963 110,147 - $ 110,147 $ 76,185

(V) Amount of deductible temporary difference and loss carryforwards of deferred income tax assets unrecognized in the consolidated balance sheet

Loss carryforwards Expire in 2023 Expire in 2024 Expire in 2025 Expire in 2026 Expire in 2027 Expire in 2028 Expire in 2029 Expire in 2030 Expire in 2031 Expire in 2032 Expire in 2033 Deductible temporary differences	December 31,2023 $ - 74,222 94,847 49,417 42,286 30,687 30,093 24,190 21,760 34,705 535 $ 402,742 $ 204,464	December 31,2022	December 31,2022
			$ 33,046 74,222 94,847 49,417 42,286 30,687 30,093 24,190 21,778 33,450 - $ 434,016 $ 90,082

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 51

(VI) Information on unused loss carryforwards

The information on the loss carryforwards of the Group , up to December 31, 2023 is as follows:

is as follows:
Unused balance $ 74,222 94,847 49,417 42,286 30,687 30,093 24,190 21,760 34,705 535 $ 402,742	Expirationyear
	2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

(VII) Authorization of income tax

The Company's and subsidiaries’ profit-seeking business income tax filings have been approved by the tax authority through the year specified as follows:

Companyname The Company ACROMASS NATGEM SCIENTECH MATERIALS	Latest year of approval
	2021 2021 2021 2021

1. Earnings per share

Earnings per share
Basic earnings per share Diluted earnings per share Net profit in the current year Net profit of the Company		2023 $ 8.10 $ 8.05 2023 $ 650,302		Unit: NT$ 2022 $ 7.08 $ 7.00 2022 $ 568,583

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 52

Shares

Shares
Weighted average number of common shares used for calculating basic earnings per share Effect of potential diluted common shares: Employee remuneration Weighted average number of common shares used for calculating diluted earnings per share		Unit: Thousand shares 2023 2022 80,328 80,328 465 895 80,793 81,223

Where the Group may elect to distribute employee remuneration in shares or in cash, when calculating the diluted EPS, the Group assumes that all employee remuneration is distributed in shares and counts the potentially dilutive common shares - when deemed dilutive - in the weighted average number of shares outstanding. The Group continues to consider the dilutive effect of such potentially delusive common shares when calculating the dilutive EPS before the number of share dividends is to be resolved on in the following year.

24. Non-cash transactions

In 2022 , the Group transferred property, plant, and equipment in the amount of 2,868 thousand , to inventory costs, with an accumulated depreciation of 1,769 thousand. In 2023 and 2022, the Group transferred 45,788 thousand and 9,455 thousand, respectively, from inventories to own-use property, plant, and equipment (refer to Note 13).

25. Capital risk management

The Group conducts capital management to ensure the Group can continue as a going concern while maximizing shareholders’ return by optimizing the liability and equity balances.

The Group’s capital structure is composed of its net debt and its equity.

The key management of the Group reviews its capital structure every year in terms of the cost and risks of each capital category. Based on the recommendation of the key management, the Group will balance its capital structure by paying dividends and issuing new debts or paying existing debts.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 53

26. Financial instruments

• －

• (I) Fair value information financial instruments not measured at fair value

Management of the Group thinks that financial assets and financial liabilities not measured at fair value have a book value approximate to their fair value.

－ (II) Fair value information financial instruments measured at fair value on a recurring basis

1. Fair value hierarchy

December 31, 2023

Level 1 Level 2 Level 3 Total Financial assets at fair value through profit or loss Domestic emerging company stocks $ 7,529 $ - $ - $ 7,529 Financial assets at fair value through other comprehensive income Investment in equity instruments Shares of TWSE-listed companies through private placement $ - $ 157,011 $ - $ 157,011 Foreign shares not traded on an exchange or OTC - - 53,125 53,125 $ - $ 157,011 $ 53,125 $ 210,136 December 31, 2022 Level 1 Level 2 Level 3 Total

Financial assets at fair value through other comprehensive income Investment in equity instruments Shares of TWSE-listed companies through private placement $ - $ 89,205 $ - $ 89,205 Foreign shares not traded on an exchange or OTC - - 49,357 49,357 - $ $ 89,205 $ 49,357 $ 138,562

There was no transfer of fair value measurements between Level 1 and Level 2 in 2023 and 2022.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 54

1. Reconciliation of the financial instruments measured at Level 3 fair value 2023

2023
Financial assets Balance - beginning of period Recognized in other comprehensive income Balance - end of year	Financial assets at fair value through other comprehensive income
	Equityinstruments
		$ 49,357 3,768 $ 53,125

2022

2022
Financial assets Balance - beginning of period Purchase Recognized in other comprehensive income Balance - end of year	Financial assets at fair value through other comprehensive income
	Equityinstruments
	(	$ 54,013 18,631 23,287) $ 49,357

1. Level 2 fair value valuation techniques and inputs

If there is no quoted price for the common shares issued by domestic TWSE-listed companies through a private placement, such common shares are evaluated by using valuation techniques. The assumptions and estimates used by the Group for the valuation techniques are the same as the assumptions and estimates accessible to the Company that are used by market participants for quoting a price for financial products.

The valuation technique the Group used for measuring the fair value is the Black-Scholes pricing model.

1. Level 3 fair value valuation techniques and inputs

When valuing the foreign shares not traded on an exchange or OTC, the Group used the income approach by which the present value of benefits expected to be derived from such investment is calculated by discounting the

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 55

cash flows. Significant unobservable inputs are as follows. When liquidity discount decreases, the fair value of such investment will increase.

December 31, 2023 December 31, 2022 Liquidity discount 32.24% 32.24%

If the following inputs are changed to reflect reasonably possible alternative assumptions while other inputs are held constant, the amount of the fair value of equity investment will increase (decrease) by:

Liquidity discount Increase by 1% Decrease by 1% Type of financial instruments Financial assets Current financial assets at fair value through profit or loss Financial assets at amortized cost (Note 1) Financial assets at fair value through other comprehensive income Financial liabilities Financial liabilities at amortized cost (Note 2)	December 31,2023 ($ 784) $ 784 December 31,2023 $ 7,529 5,602,200 210,136 2,644,852	December 31,2022
		($ 728) $ 728 December 31,2022
		$ - 5,126,069 138,562 2,935,923

(III) Type of financial instruments

Note 1: The balance included financial assets measured at amortized cost such as cash

and cash equivalents, notes receivable and accounts receivable (including those due from related parties), other receivables (presented under other current assets), restricted assets (presented under other current assets), and guarantee deposits paid (presented under other non-current assets).

Note 2: The balance included the financial liabilities measured at amortized cost such

as short-term borrowings, notes payable and accounts payable, and other payables.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 56

(III) Financial risk management purpose and policy

The Group’s financial instruments mainly comprise equity investment, receivables, payables, borrowings, and lease liabilities. The financial management department of the Group provides services for each type of business and supervises and manages the financial risks incidental to the Group’s operations by referencing the internal risk report in which risk exposure is analyzed based on the extent and extensiveness of risks. Such risks include market risk, credit risk, and liquidity risk.

The financial management department provides a report to the key management quarterly to reduce risk exposure.

The Group did not adopt hedge accounting.

1. Market risk

2. (1) Exchange rate risk

Some subsidiaries of Group are engaged in sales and purchase denominated in foreign currency, thus exposing the Group to the exchange rate fluctuation risk.

For the book value of the Group’s monetary assets and monetary liabilities denominated in a currency other than the functional currency on the balance sheet date, refer to Note 31.

Sensitivity analysis

The Group is affected primarily by fluctuation in the exchange rate of USD.

The sensitivity analysis includes only the foreign currency monetary items outstanding, which are translated at the end of year by using an exchange rate that could be adjusted by a maximum of 1%. When the functional currency appreciates/depreciates by 1% against the USD, the effects on the pre-tax net profit stated in the consolidated financial statements for 2023 and 2022 will be NT$25,799 thousand and NT$16,329 thousand, respectively.

The exchange rate fluctuation mainly affects the Group’s bank deposits, as well as the payables and receivables denominated in USD that were still outstanding and were not hedged with a cash flow hedge on the balance sheet date.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 57

(2) Interest rate risk

The interest rate risk facing the Group mainly comes from the Group’s floating-rate bank deposits.

The book value of the financial assets and liabilities of the Group that were exposed to the interest rate risk on the balance sheet date is as follows:

December 31, 2023 December 31, 2022

	December 31,2023	December 31,2
With cash flow interest
rate risk
- Financial assets	$ 2,969,110	$ 3,638,016
- Financial liabilities	100,000	200,000
With fair value interest
rate risk
- Financial assets	1,836,991	615,291
- Financial liabilities	196,529	230,661
- Lease liabilities	84,078	70,917

Sensitivity analysis

The following sensitivity analysis is based on the interest risk exposure of non-derivatives on the balance sheet date. Floating-rate liabilities are analyzed based on the assumption that the liability amount outstanding on the balance sheet date remains outstanding throughout the reporting period.

If interest rate increases/decreases by 1%, held other variables constant, the Group’s pre-tax profit in the consolidated financial statements for 2023 and 2022 will change by NT$ 28,691 thousand and NT$ 34,380 thousand, respectively.

2. Credit risk

The credit risk means the risk of causing financial loss to the Group because the trading counterparty defaults on contractual obligations. As of the balance sheet date, the Group’s maximum credit exposure to the financial loss caused by a trading counterparty’s defaulting on his/her performance obligations mainly lies in the book value of the financial assets recognized on the consolidated balance sheet.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 58

According to its policy, the Group only trades with reputational counterparties and requires provision of collateral where necessary to reduce the risk of financial loss due to default.

The Group exposes to the credit risk, which mainly comes from the customers who individually account for 10% or more of the Group’s total accounts receivables (including those due from related parties). Refer to Note 9 for details.

1. Liquidity risk

The Group manages and maintains sufficient cash to support business operations and reduce the effect of the fluctuating cash flow. The management of the Group monitors the use of bank financing facilities and ensures compliance with the terms of the loan contract.

Bank loans are one of the Group’s important sources of liquidity. For the bank financing facility that the Group has not used, refer to relevant descriptions in (2) below.

• (1) Liquidity and interest rate risks of non-derivative financial liabilities

The maturity analysis of other non-derivative financial liabilities is compiled based on the agreed repayment date.

December 31, 2023 Non-derivative financial liabilities Non-interest bearing debt Instruments with a floating rate Lease liabilities		1–3 months $ 2,533,013 100,332 3,575 $ 2,636,920		4 months – 1 year $ 11,839 - 10,293 $ 22,132		More than 1 year
						$ - - 81,647 $ 81,647

More information on the maturity analysis of lease liabilities:

Lease liabilities	Less than 1 year	Less than 1 year		2–5years		6–10years	11–15years	11–15years	16–20years	16–20years
		$ 13,868		$ 31,867		$ 22,800		$ 22,800		$ 4,180

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 59

December 31, 2022

December 31, 2022
Non-derivative financial liabilities Non-interest bearing debt Instruments with a floating rate Lease liabilities		1–3 months $ 2,716,006 200,396 2,790 $ 2,919,192		4 months – 1 year $ 19,917 - 5,856 $ 25,773		More than 1 year
						$ - - 73,936 $ 73,936

More information on the maturity analysis of lease liabilities:

Less than 1 year 2–5years 6–10years Lease liabilities $ 8,646 $ 19,596 $ 22,800 Credit limit of financing facilities December 31,2023 Unsecured bank loan limit (extendable upon mutual agreement) - Employed capital $ 336,805 - Unemployed capital 1,083,195 $ 1,420,000	Less than 1 year		2–5years	2–5years	2–5years		6–10years	11–15years	11–15years	11–15years	11–15years	16–20years
									$
					$ 336,805 1,083,195 $ 1,420,000						$ 426,461 853,539 $ 1,280,000

• (2) Credit limit of financing facilities

27. Related Party Transactions

All the transactions between the Company and subsidiaries, account balances, profits, and expenses/losses are eliminated during consolidation and thus not disclosed in this note. In addition to those disclosed in other notes, transactions between the Group and other related parties are described as follows.

(I) Name and relationship of related party

Name of related party Relationship with the Company HUNG-LIANG HSIEH Chairperson XTEK SEMICONDUCTOR Associate (HUANGSHI) CO., LTD. (XTEK SEMICONDUCTOR) FORWARD SCIENCE PTE.LTD. Associate HONG LUN CULTURAL Same key management CREATIVITY FOUNDATION

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 60

(II) Operating revenue

Operating revenue
General ledger account Goods sales revenue Service revenue Other operating revenue	Name and type of related party Associate Associate Associate		2023 $ 111,658 $ 16 $ 79		2022
					$ 68,826 $ - $ 22,824

The price and payment terms for a sale transaction between the Group and related parties are determined based on the terms mutually agreed upon.

(III) Contract liabilities

Contract liabilities
Name and type of relatedparty Associate XTEK SEMICONDUCTOR	December 31,2023 $ 1,843	December 31,2022
			$ 54,246

(IV) Receivables

Receivables
General ledger account Accounts receivable - related parties Other receivables(pr esented under other current assets)	Name and type of related party Associate XTEK SEMICONDUCTOR Same key management	December 31, 2023 $ 11,439 $ 8	December 31, 2022
				$ 5,152 $ -

No guarantee was requested for the outstanding receivables due from related parties. The balance of the allowance for receivables due from related parties as of December 31, 2023 and 2022 were NT$828 thousand and NT$377 thousand, respectively. The allowance for receivables due from related parties that was provided (reversed) in 2023 and 2022 amounted to NT$451 thousand and NT$(1,108) thousand, respectively.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 61

(V) Payables

Payables
General ledger account Other payables	Name and type of related party Associate	December 31, 2023 $ 99	December 31, 2022
				$ 230

The outstanding balance of the payables due to related parties was not secured against collateral.

• (VI) Lease agreements

Lease agreements	Lease agreements
General ledger account Name and type of related party December 31, 2023 Lease liabilities Chairperson $ 62,221 Name and type of relatedparty 2023 Interest expenses (presented under financial cost) Chairperson $ 1,273		December 31, 2022
				$ 65,509 2022
			$ 1,338

The rent charged for lease contracts signed between the Group and related parties was negotiated upon by referencing the market price; the payment term was the same as a general payment term.

(VII) Others

Others
General ledger account Rental income (presented under other income) Operating expenses	Name and type of related party Same key management Associate	December 31, 2023 $ 24 $ 1,133	December 31, 2022
				$ 24 $ -

• (IX) Remuneration to key management

Remuneration to key management
Short-term employee benefits Post-employment benefit		2023 $ 76,088 897 $ 76,985		2022
				$ 75,486 933 $ 76,419

The remuneration to directors and other key management was decided by the Remuneration Committee according to personal performance and market trends.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 62

28. Pledged and Mortgaged Assets

The following assets were provided to the Custom Office as collateral against the bonded goods and the payments and performance obligation of manufacturers.

Pledged certificates of deposits (presented under other current assets)	December 31,2023 $ 145,496	December 31,2022	December 31,2022
			$ 171,926

29. Significant Commitments

The Group’s letter of credits issued but not used that were intended for purchase of goods and machinery and equipment, and for performance guarantee were NT$142,772 thousand and NT$169,725 thousand as of December 31, 2023 and 2022, respectively.

30. Significant Subsequent Events

In response to the future operation and development of the Company, the Board of Directors resolved on February 29, 2024 to issue and issue the first domestic unsecured convertible corporate bond and the second domestic unsecured convertible corporate bond, with a total face value of NT$1.2 billion.

31. Information on foreign currency assets and liabilities with significant effects

The following information is summarized and stated based on the foreign currencies other than the functional currency of the Group's parent company only entities. The disclosed exchange rate represents the exchange rate of such foreign currency against the functional currency. Foreign currency assets and liabilities with significant effects are as follows:

December 31, 2023

Foreign currency assets Monetary items USD USD USD CNY EUR EUR	Foreign currency $ 74,629 32,574 23,323 40,006 4,685 2,916	Exchange rate 30.705(USD:TWD) 7.096(USD:CNY) 7.815(USD: HKD) 4.327(CNY:TWD) 33.98(EUR:TWD) 7.853(EUR:CNY)	Book value
			$ 2,291,493 1,000,177 716,126 173,107 159,184 99,095

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 63

JPY Non-monetary items Associates accounted for using equity method CNY Foreign currency liabilities Monetary items USD USD USD JPY EUR EUR	Foreign currency 455,386 $ 107,566 30,471 10,658 5,549 356,942 1,342 779	Exchange rate 0.217(JPY:TWD) 4.327(CNY:TWD) 30.705(USD:TWD) 7.096(USD:CNY) 7.815(USD:HKD) 0.217(JPY:TWD) 33.98(EUR:TWD) 7.853(EUR:CNY)	Book value
			98,819 $ 465,440 935,624 327,266 170,389 77,456 45,607 26,482

December 31, 2022 Foreign currency Foreign currency assets Monetary items USD $ 58,744 USD 35,286 USD 22,182 EUR 11,278 EUR 1,869 JPY 103,517 Non-monetary items Associates accounted for using equity method CNY 113,893 Foreign currency liabilities Monetary items USD 52,090 USD 9,233	Exchange rate 30.71(USD:TWD) 6.967(USD:CNY) 7.798(USD: HKD) 32.72(EUR:TWD) 7.423(EUR:CNY) 0.232(JPY:TWD) 4.408(CNY:TWD) 30.71(USD:TWD) 6.967(USD:CNY)	Book value
Foreign currency assets Monetary items USD USD USD EUR EUR JPY Non-monetary items Associates accounted for using equity method CNY Foreign currency liabilities Monetary items USD USD
		$ 1,804,032 1,083,642 681,200 369,011 61,167 24,057 502,039 1,599,684 283,543

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 64

JPY USD EUR EUR	Foreign currency 258,135 1,722 723 698	Exchange rate 0.232(JPY:TWD) 7.798(USD:HKD) 8.309(EUR:HKD) 32.72(EUR:TWD)	Book value
			59,991 52,885 23,658 22,845

The realized and unrealized foreign currency exchange gains (losses) of the Group in 2023 and 2022 were NT$(54,695) thousand and NT$77,879 thousand, respectively.

However, it was not feasible to disclose the exchange loss and gain of each significant

foreign currency because the number of foreign currencies involved in foreign currency transactions as well as the number of functional currencies of entities within the Group varied.

32 Supplementary Disclosures

Except those disclosed in Appendix Table 1 through 7, there were no required disclosures.

33. Segment Information

Information provided for the operating decision makers to allocate resources and evaluate segment performance focuses on the type of products or services delivered or provided. The reportable segments of the Group are as follows:

• (I) Segment revenue and operating outcome

The revenue and operation outcome of the Group are analyzed by reportable segment as follows:

segment as follows:
Sale in the capacity of an agent Manufacturing Reportable segments - total Headquarters Administrative costs and non-operating income and expenses Subtotal Inter-segment sales revenue Net sales revenue Net profits before tax		Segment	r	evenue 2022 $ 3,786,913 2,078,843 5,865,756 - 5,865,756 215,770) $ 5,649,986		Segmentprofit or loss
		2023 $ 4,777,648 2,185,811 6,963,459 6,963,459 51,478) $ 6,911,981				2023 $ 493,251 360,611 853,862 6,482 $ 860,344		2022
	(		(				(	$ 443,388 429,994 873,382 137,496) $ 735,886

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 65

Segment profits mean the profits earned by each segment, excluding the following items that should be allocated among them: administrative cost of the headquarters, director remuneration, non-operating income and expenses, and income tax expenses. Such measurements serve as a basis for main operational decision makers to allocate resources to segments and evaluate their performance. (II) Segment assets and liabilities

The Group disclosed the measurements of total assets and liabilities of reportable segments as a whole instead of individually because the measurements of assets and liabilities had yet to be provided to the operational decision makers.

• (III) Geographic information

The Group mainly operates in the two regions: Taiwan and China.

• (IV) Information on major customers

Of the operating revenue in 2023 and 2022, NT$928,807 thousand and NT$967,799 thousand, respectively, came from customers who individually account for 10% or more of the Group’s consolidated revenue; except for such customers, there were no other customers who individually account for 10% or more of the Group’s consolidated revenue.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 66

SCIENTECH CORPORATION and Subsidiaries

Loans to others

2023

Appendix Table 1

No.	Lending company	Borrowing company	Financial account	Whether a related party or not	Highest amount in the year (Note 3)	Balance - end of year (Note 3)	Drawdown (Note 3)	Interest rate range (%)	Nature of loaning of funds	Business transaction amount	Reasons for the need of short-term financing	Appropriated allowance for bad debt	Collateral	Collateral	Limit of loans to a single borrower (Notes 1 and 3)	Limit of total loaning of funds (Notes 2 and 3)
													Name	Value
0 1 2	The Company SCIENTECH ENGINEERING (HONG KONG) LIMITED SCIENTECH ENGINEERING CORP.(SHANGH AI)	NATGEM INC. ACROMASS TECHNOLOGIES,I NC. SCIENTECH ENGINEERING CORP.(SHANGHAI) SCIENTECH ENGINEERING USA CORP. SCIENTECH GMBH The Company	Other receivables －Related party Other receivables －Related party Other receivables －Related party Other receivables －Related party Other receivables －Related party Other receivables －Related party	Yes Yes Yes Yes Yes Yes	2,000 8,000 24,564 ( US$800 thousand ) 30,705 ( US$1,000 thousand ) 30,705 ( US$1,000 thousand ) 194,715 ( CNY$45,000 thousand )	2,000 24,564 ( US$800 thousand ) 30,705 ( US$1,000 thousand ) 30,705 ( US$1,000 thousand ) 194,715 ( CNY$45,000 thousand )	- - - ) - 194,715 ( CNY$45,000 thousand )	1.2 1.2 1.2 1.2 1.5	Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing Short-term financing	- - - - - -	Working capital Working capital Working capital Working capital Working capital Working capital	- - - - - -	－ － － － － －	- - - - - -	$ 398,925 398,925 24,564 ( US$800 thousand ) 30,705 ( US$1,000 thousand ) 30,705 ( US$1,000 thousand ) 194,715 ( CNY$45,000 thousand )	$ 1,595,701 1,595,701 358,727 ( HKD91,302 thousand ) 358,727 ( HKD91,302 thousand ) 358,727 ( HKD91,302 thousand ) 319,093 ( CNY73,745 thousand )

Note 1: The limit of loans to a single borrower is as follows:

1. The limit of loaning of funds to a single party with business relationship with Company should not exceed the total transactions amount between it and the Company. The said “Transaction amount” means the higher of purchase or sales therebetween.

2. Limit of loaning of funds to a company in need of short-term financing should not exceed 10% of the Company’s net worth.

3. Limit of loaning of funds to a foreign operation whose voting shares are fully held by the Company, either directly or indirectly, should exceed neither the amount approved by the Board of Directors nor the amount equal to 80% of the lending company’s net worth.

4. Note 2: The limit of total funds loaned to others is as follows:

5. Should not exceed 40% of the Company’s net worth.

6. The limit of total funds loaned by a foreign operation of which all the voting shares are directly or indirectly held by Scientech Engineering (Hong Kong) Limited via the Company should not exceed 80% of the foreign operation’s net worth.

7. Foreign companies in which Scientech Engineering (Shanghai) Limited directly or indirectly holds the voting shares or directly or indirectly holds 100% of the voting shares of Scientech Engineering (Shanghai) Limited via the Company should not exceed 40% of the foreign operation’s net worth.

Note 3: Converted at the exchange rate of US$1 against NT$30.705 , HKD$1 against NT$3.929 and RMB$1 against NT$4.327 on December 31, 2023.

Note 4: The said transactions had been eliminated during the preparation of the consolidated financial statements.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 67

SCIENTECH CORPORATION and Subsidiaries

Making endorsements/guarantees for others

2023

Appendix Table 2

Unit: NT$ thousand unless otherwise specified

No.	Endorser/ guarantor	Partybeingendorsed/guaranteed	Partybeingendorsed/guaranteed	Limit on endorsement/ guarantees provided for a single party (Notes 1 and 2)	Maximum balance for the period (Note 2)	Ending balance (Note 2)	Drawdown (Note 2)	Amount of endorsement/ guarantees collateralized by properties (Note 2)	Ratio of accumulated endorsement/ guarantee to net equity per latest financial statement(%)	Limit of endorsement/ guarantees collateralized by properties (Notes 2 and 3)	Guarantee provided by parent company to subsidiary	Guarantee provided by subsidiary to a parent company	Guarantee provided to entities in Mainland China
		Company name	Relationship
0 1	The Company SCIENTECH ENGINEER ING (HONG KONG) LIMITED	SCIENTECH ENGINEERING (HONG KONG) LIMITED SCIENTECH ENGINEERING CORP.(SHANGH AI)	Subsidiary Parent company	$ 1,994,626 224,205 ( HKD57,064 thousand )	$ 46,058 ( US$1,500 thousand ) 3,071 ( US$100 thousand)	$ 46,058 ( US$1,500 thousand ) 3,071 ( US$100 thousand)	$ -	$ -	1.2% 0.7%	$ 3,989,253 448,409 ( HKD114,128 thousand )	Y N	N Y	N Y

Note 1: The limit of endorsement and guarantee made by the Company or subsidiaries to a single entity should not exceed 50% of the entity’s net worth. Note 2: Converted at the exchange rate of US$1 against NT$30.705 and HKD$1 against NT$3.929 on December 31, 2023.

Note 3: Should not exceed 100% of the Company’s or a subsidiary’s net worth stated on the financial statements.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 68

Unit: NT$ thousand

SCIENTECH CORPORATION and Subsidiaries

Marketable Securities Held at the End of Period

December 31, 2023

Appendix Table 3

Investor	Type and name of marketable securities	Relationship with the securities issuer	General ledger account		End of year	End of year
				Shares	Book value	Shareholding Percentage (%)	Fair value	Remarks
SCIENTECH CORPORATION SCIENTECH INVESTMENT CORP.	Shares HITEKCORPS CO., LTD. AUENTER TECHNOLOGY CORP. AMCHAEL-GRAPHICS CORP. PROMOS TECHNOLOGIES INC. FORWARD SCIENCE CORPORATION INFINITESIMA LIMITED SPIROX CORP. Shares SIGLAZ	－ － － － － － －	Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss	225,000 600,000 700,000 4,662 151,000 6,111,111 4,000,000 1,100,000	$ - - - - 7,529 53,125 157,011 -	3.19 13 33 - 0.48 9.30 3.50 15.80	$ - - - - 7,529 53,125 157,011 -	－ － － － － － －

Note: For information on investment in subsidiaries and associates, refer to Appendix Tables 5 and 6.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 69

SCIENTECH CORPORATION and Subsidiaries

Purchase or sale of goods from or to related parties reaching NT$100 million or 20% of paid-in capital or more

2023

Appendix Table 4

Unit: NT$ thousand

Purchase from (sale to)	Transaction counterparty	Relationship		Transaction details	Transaction details		Occurrence of transaction terms other than those for an arms-length transaction and reasons therefor	Occurrence of transaction terms other than those for an arms-length transaction and reasons therefor	Notes/Accounts receivable (payable)	Notes/Accounts receivable (payable)	Remarks
			Purchase (sales)	Amount	Ratio to total purchase (sales) (%) (Note)	Credit period	Unit price	Credit period	Balance	Ratio to total notes and accounts receivable (payable) (%)
SCIENTECH CORPORATION	XTEK SEMICONDUCTO R (HUANGSHI) CO., LTD.	Associate	Sales	$ 110,538	2.8	Net30	$ -	－	$ 11,009	2.0

Note 1: Refers to the ratio to total purchase (sales), or to total receivables or payables, of an individual company.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 70

SCIENTECH CORPORATION and Subsidiaries

Name and Territory of Investees and Other Relevant Information

2023

Appendix Table 5

Unit: NT$ thousand unless otherwise specified

Name of investor	Investee	Region	Main business line	Original investment amount	Original investment amount	Shares held at theperiod-end	Shares held at theperiod-end	Shares held at theperiod-end	Profit or loss of investee in the period	Investment gains of losses recognized in theperiod	Remarks
				December 31, 2023	January 1, 2023	Shares	Percentag e	Book value
SCIENTECH CORPORATION SCIENTECH INVESTMENT CORP. SCIENTECH ENGINEERING CORP.(SHANGHAI)	SCIENTECH INVESTMENT CORP. ACROMASS TECHNOLOGIES,INC. SCIENTECH MATERIALS CORPORATION NATGEM INC. SCIENTECH GMBH TRANSCEND CAPITAL CORP. FORWARD SCIENCE CORPORATION RENORIGIN INNOVATION INSTITUTE CO., LTD. FORWARD SCIENCE PTE. LTD. SIMPLE INVESTMENT CORP. SCIENTECH ENGINEERING USA CORP. SCIENTECH ENGINEERING (HONG KONG) LIMITED	Mauritius Taipei City Taipei City Taipei City Austria British Virgin Islands Miaoli County Taipei City Singapore Mauritius California , US Hong Kong	Investment General instrument and precision instrument manufacturing Manufacturing and sale of energy-efficient products Sale of food and supplies International trade Investment Maintenance service Sale of biotech products Trading and maintenance of semiconductor equipment and peripherals Investment Trading of semiconductor equipment and peripherals International trade	$ 171,775 270,000 205,000 33,000 10,672 417,289 - 14,030 11,944 150,623 ( US$4,906 thousand ) 9,212 ( US$300 thousand ) 5,859 ( CNY$1,354 thousand )	$ 171,775 270,000 205,000 33,000 1,163 416,829 19,600 14,030 11,944 150,623 ( US$4,906 thousand ) 9,212 ( US$300 thousand ) 5,859 ( CNY$1,354 thousand )	5,540,000 27,000,000 1,400,000 800,000 - 14,290,000 - 1,121,000 500,000 4,905,500 300,000 -	100 100 100 100 100 100 - 20 21 100 100 100	$ 827,309 3,317 3,168 79 20,971 416,932 - 6,514 - 797,167 ( US$25,962 thousand ) 27,564 ( US$898 thousand ) 448,409 ( CNY$103,630 thousand )	$ 299,157 40 1 ( 504 ) 122 ( 27,912 ) 9,202 ( 8,587 ) - 300,514 ( US$9,646 thousand ) ( 1,378 ) ( US$(44) thousand ) 148,587 ( CNY$33,800 thousand )	$ 299,157 40 1 ( 504 ) 122 ( 27,912 ) ( 1,141 ) ( 1,695 ) - 300,514 ( US$9,646 thousand ) ( 1,378 ) ( US$(44) thousand ) 148,587 ( CNY$33,800 thousand )	(Note 5) (Note 5) (Notes 1, 2, and 5) (Note 5) (Note 5) (Note 5) (Note 2 and 3) (Note 2) (Note 2) (Note 4 and 5) (Note 4 and 5) (Note 4 and 5)

Note 1: SCIENTECH MATERIALS was dissolved through a resolution reached at the Board of Directors meeting dated August 31, 2021. As of December 31, 2023, the liquidation process was not yet completed. Note 2: It was calculated based on financial statements in the same period that were not audited by CPAs.

Note 3: The Consolidated Company resigned as the representative of directors of FORWARD SCIENCE CORP. in July 2023 and lost significant influence. Therefore, the investment originally under the equity method was reclassified as financial assets at FVTPL.

＝ ＝ Note 4:The amount was converted using the exchange rate of US$1 $30.705 and RMB$1 $4.327 on December 31, 2023. Investment gains or losses were converted using the average exchange rate of US$1=31.155 and RMB$1=4.396 during January 1, 2023 and December 31, 2023.

Note 5: It is a subsidiary. The said transactions between it and the Company had been eliminated during the preparation of the consolidated financial statements.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 71

SCIENTECH CORPORATION and Subsidiaries

Information on Investments in Mainland China

2023

Appendix Table 6

Unit: NT$ thousand unless otherwise specified

Investee in Mainland China	Main business line	Paid-in Capital (Note 1)	Paid-in Capital (Note 1)	Method of investment	Accumulated amount of investments from Taiwan at the beginning of current year (Note1)	Accumulated amount of investments from Taiwan at the beginning of current year (Note1)	Amount of investments remitted or recoveredincurrent year	Amount of investments remitted or recoveredincurrent year	Accumulated amount of investments from Taiwan at the end of current year (Note 1)	Profit or loss of investee in the period (Note 2)	The Company’s shareholding of direct or indirect investment (%)	Investment gains of losses recognized in the year	Investment book value at the end of the year (Note 2)	Profit received from investments as of the end of current year
							Remitted	Recovered
SCIENTECH ENGINEERING CORP. (SHANGHAI) XTEK SEMICONDUCT OR (HUANGSHI) CO., LTD.	Trading and maintenance of semiconductor equipment and peripherals Trading of semiconductor equipment and peripherals	$ 149,533 ( US$4,870 thousand ) 2,545,016 ( US$82,886 thousand )		Invested in a China investee through another investee in a third region (Note 3) Invested in a China investee through another investee in a third region (Note 4)	$ 149,533 ( US$4,870 thousand ) 438,111 ( US$14,268 thousand )		$ - -	$ - -	$ 149,533 ( US$4,870 thousand ) 438,111 ( US$14,268 thousand )	$ 300,513 (Notes2 and 6) ( 161,568 ) (Notes2)	100 17.21	$ 300,513 (Notes2 and 6) ( 27,813 ) (Notes2)	$ 797,733 (Notes2 and 6) 416,578 (Notes2)	$ - -
						Limit on the amount of investments in Mainland China specified by the Investment Commission, MOEA $2,393,552
Accumulated amount of investments from Taiwan to Mainland China at the end of current period(Note 1)			Investment amount approved by the Investment Commission, MOEA (Note 1)			Limit on the amount of investments in Mainland China specified by the Investment Commission, MOEA
$587,644 (US$19,138 thousand)			$587,644 (US$19,138 thousand)			$2,393,552

Note 1: Converted at the exchange rate of US$1 against NT$30.705 on December 31, 2023.

Note 2: It was calculated based on financial statements in the same period that were audited by CPAs.

Note 3: Investment in SCIENTECH ENGINEERING CORP. (SHANGHAI) via SIMPLE INVESTMENT CORP.

Note 4: Investment in XTEK SEMICONDUCTOR (HUANGSHI) CO., LTD. via TRANSCEND CAPITAL CORP.

Note 5: The balance of unrealized gains as of December 31, 2023 in the amount of NT$50,943 thousand was arising from sale of machinery and equipment and provision of services to XTEK S EMICONDUCTOR (HUANGSHI) CO., LTD. Realized gross profit during January 1, 2023 and December 31, 2023 was NT$5,043 thousand. Note 6: The said transactions had been eliminated during the preparation of the consolidated financial statements.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 72

SCIENTECH CORPORATION

Information on Major Shareholders

December 31, 2023

Appendix Table 7

Name of major shareholder	Shares	Shares
	Number of shares held(shares)	Ownership
HUNG-LIANG HSIEH FEN-CHING HSIEH-CHIU PARADIGM INVESTMENT CORP.	7,943,455 6,095,072 4,197,721	9.88% 7.58% 5.22%

Note: The information on major shareholders are acquired from the data of the Taiwan Depository & Clearing Corporation with respect to the shareholders holding aggregately 5% or more of the common and preferred stocks of the Company that have been registered and delivered (including treasury stock) in dematerialized form on the last business day at the end of the current quarter. The share capital stated in the consolidated financial statements of the Company may be different from the number of shares that have been actually registered and delivered in dematerialized form due to different bases of compilation and calculation.

SCIENTECH CORPORATION- Annual Report- IFRS Consolidated Financial Statements- 73