SUNON — Annual Report 2023

Nov 2, 2023

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 AND INDEPENDENT AUDITORS' REPORT

CONTENTS

	Item	Page
1.	Cover page	1
2.	Contents	2
3.	Representation letter	3
4.	Independent auditors' report	4
5.	Consolidated balance sheets	5
6.	Consolidated statements of comprehensive income	6
7.	Consolidated statements of changes in equity	7
8.	Consolidated statements of cash flows	8
9.	Notes to Consolidated financial statements
	(1) General information	9
	(2) The authorization of the consolidated financial statements	9
	(3) Application of new and amended standards and interpretations	9~13
	(4) Summary of significant accounting policies	13~30
	(5) Critical accounting judgments, estimates and key sources of	30~33
	assumption uncertainty
	(6) Contents of significant accounts	33~62
	(7) Related party transactions	62~65
	(8) Pledged assets	65
	(9) Significant contingent liabilities and unrecognized contract	65~66
	commitments
	(10) Significant disaster loss	66
	(11) Significant subsequent events	66
	(12) Others	66~76
	(13) Supplementary disclosures	76
	A. Significant transactions information	77~85
	B. Information on investees	86~87
	C. Information on investments in Mainland China	88~89
	D. Major shareholders	90
	(14) Segment information	91~92

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In Thousands of New Taiwan Dollars)

		December 31, 2023		December 31, 2022
Assets	Note	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents	6(1)	\$4,030,886	31.9	\$2,457,337	20.2
Current financial assets at fair value through profit or	6(2)	-	-	211,827	1.7
loss-current
Notes receivable, net	6(3)	30,090	0.2	30,095	0.2
Accounts receivable, net	6(4)	3,049,309	24.2	3,384,057	27.8
Other receivables		100,770	0.8	140,678	1.2
Current tax assets		13,151	0.1	1,668	-
Inventories	6(5)	2,052,438	16.3	2,651,498	21.7
Prepayments		82,655	0.7	148,430	1.2
Other financial assets - current	6(6)	216,761	1.7	-	-
Total current assets		9,576,060	75.9	9,025,590	74.0
NONCURRENT ASSETS
Financial assets at fair value through other	6(7)	\$27,231	0.2	-	-
comprehensive income or loss - noncurrent
Investments accounted for using equity method	6(8)	20,968	0.2	5,800	-
Property, plant and equipment	6(9)	2,171,464	17.2	2,273,414	18.7
Right-of-use assets	6(10)	590,714	4.7	593,877	4.9
Investment properties, net	6(11)	84,738	0.7	85,106	0.7
Intangible assets	6(12)	23,956	0.2	27,053	0.2
Deferred income tax assets	6(29)	94,334	0.7	112,591	0.9
Refundable deposits		20,961	0.2	19,773	0.2
Other non-current assets - other		4,305	-	48,765	0.4
Total noncurrent assets		3,038,671	24.1	3,166,379	26.0
TOTAL ASSESTS		\$12,614,731	100.0	\$12,191,969	100.0
Liabilities and Equity
CURRENT LIABLITIES
Short-term loans	6(13)	\$457,581	3.6	\$1,287,516	10.6
Contract liabilities - current	6(23)	109,540	0.9	176,164	1.4
Notes payable		31,067	0.2	136,355	1.1
Accounts payable		2,737,012	21.7	3,179,288	26.1
Other payables	6(14)	942,278	7.5	1,078,747	8.9
Current tax liabilities		124,712	1.0	208,679	1.7
Provisions - current	6(15)	52,467	0.4	54,643	0.4
Lease liabilities - current	6(10)	82,727	0.7	80,951	0.7
Advance receipts		571	-	-	-
Current portion of long-term loans	6(17)	182,775	1.4	120,372	1.0
Total current liabilities		4,720,730	37.4	6,322,715	51.9

-5-

		December 31, 2023		December 31, 2022
Liabilities and Equity	Note	Amount	%	Amount	%
NONCURRENT LIABILITIES
Long-term loans	6(17)	\$212,931	1.7	\$286,701	2.3
Deferred income tax liabilities	6(29)	286,730	2.3	190,955	1.6
Lease liabilities - noncurrent	6(10)	146,042	1.2	150,425	1.2
Net defined benefit liabilities - noncurrent	6(18)	28,731	0.2	35,667	0.3
Guarantee deposits		839	-	3,029	-
Total noncurrent liabilities		675,273	5.4	666,777	5.4
Total Liabilities		5,396,003	42.8	6,989,492	57.3
EQUITY
Share capital	6(19)
Ordinary shares		2,725,243	21.6	2,509,297	20.6
Bond conversion entitlement certificates		9,194	0.1	-	-
Capital surplus	6(20)	1,518,788	12.0	366,903	3.0
Retained earnings	6(21)
Legal reserve		995,720	7.9	885,799	7.3
Special reserve		257,757	2.0	295,358	2.4
Unappropriated earnings		2,012,211	16.0	1,402,877	11.5
Other equity	6(22)	(300,185)	(2.4)	(257,757)	(2.1)
Total equity attributable to owners of the parent		7,218,728	57.2	5,202,477	42.7
NON-CONTROLLING INTERESTS		-	-	-	-
Total equity		7,218,728	57.2	5,202,477	42.7
TOTAL LIABILITIES AND EQUITY		\$12,614,731	100.0	\$12,191,969	100.0

The accompanying notes are an integral part of the parent company only financial statements.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

		Year Ended December 31
		2023		2022
	Note	Amount	%	Amount	%
OPERATING REVENUES	6(23)	\$12,914,685	100.0	\$14,063,308	100.0
OPERATING COSTS	6(5)	(9,313,327)	(72.1)	(10,892,350)	(77.5)
GROSS PROFIT		3,601,358	27.9	3,170,958	22.5
OPERATING EXPENSES
Sales and marketing		(607,738)	(4.7)	(655,431)	(4.6)
General and administrative		(664,447)	(5.2)	(614,623)	(4.4)
Research and development		(799,281)	(6.2)	(781,334)	(5.6)
Expected credit gain (loss)	6(4)	483	-	2,314	-
Total operating expenses		(2,070,983)	(16.1)	(2,049,074)	(14.6)
INCOME FROM OPERATIONS		1,530,375	11.8	1,121,884	7.9
NON-OPERATING INCOME AND EXPENSES
Interest revenue	6(25)	95,775	0.8	14,592	0.1
Other income	6(26)	156,281	1.2	155,312	1.1
Other gains and losses	6(27)	14,676	0.1	179,890	1.3
Finance costs	6(28)	(46,995)	(0.4)	(44,400)	(0.3)
Share of profits of subsidiaries, associates and		1,476	-	(1,401)	-
joint ventures
Total non-operating income and expenses		221,213	1.7	303,993	2.2
INCOME BEFORE INCOME TAX		1,751,588	13.5	1,425,877	10.1
INCOME TAX EXPENSE	6(29)	(417,654)	(3.2)	(336,782)	(2.4)
NET INCOME		1,333,934	10.3	1,089,095	7.7
OTHER COMPREHENSIVE INCOME (LOSS)	6(30)
Items that will not be reclassified subsequently
to profit or loss:
Remeasurement of defined benefit obligation		171	-	12,640	0.1
Unrealized gain (loss) on investments in equity		5,063	-	-	-
instruments at fair value through other
comprehensive income
Income tax benefit related to items that will		(34)	-	(2,528)	-
not be reclassified subsequently
Total items that will not be reclassified subsequently		5,200	-	10,112	0.1
to profit or loss
Items that may be reclassified subsequently
to profit or loss:
Exchange differences on translation of foreign		(59,363)	(0.4)	47,000	0.3
operations
Income tax benefit related to items that may		11,872	0.1	(9,399)	-
be reclassified subsequently to profit or loss
Total items that may be reclassified subsequently		(47,491)	(0.3)	37,601	0.3
to profit or loss
Total other comprehensive loss, net of income tax		(42,291)	(0.3)	47,713	0.3
TOTAL COMPREHENSIVE INCOME		1,291,643 \$	10.0	1,136,808	8.1
PROFIT (LOSS), ATTRIBUTABLE TO:
Parent company owner (net profit/loss)		1,333,934 \$	10.3	1,089,095 \$	7.7
Non-controlling interest (net profit/loss)		-	-	-	-
		\$ 1,333,934	10.3	1,089,095 \$	7.7
TOTAL COMPREHENSIVE PROFIT OR LOSS IS
ATTRIBUTABLE TO :
Parent company owner (comprehensive profit and loss)		1,291,643 \$	10.0	1,136,808 \$	8.1
Non-controlling interest (comprehensive profit and loss)		-	-	-	-
		\$ 1,291,643	10.0	1,136,808 \$	8.1
EARNINGS PER SHARE
Basic	6(31)	\$5.16		\$4.34
Diluted	6(31)	\$5.07		\$4.33

The accompanying notes are an integral part of the parent company only financial statements.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(In Thousands of New Taiwan Dollars)

	ity Att ribu tabl Sh areh old of t he P Equ e to t ers aren
								Oth er
	Cap	ital Sto ck	Ret aine d E ing arn s		Exc han ge Dif fere nce s on	Un real ized Gai n (L ) on Fin ial oss anc
		Cer tific of B ond ate			Un riat ed app rop	Tra nsla ting for eign	Ass at F air Val ue T hro h ets ug		No olli ontr n-c ng	Tot al
	Odi Sha nar res y	Exc han Rig hts ge	Cap ital Sur lus p	Leg al R eser ve	Spe cial Re serv e	Ear nin gs	Op ion erat s	Oth er C reh ive inco omp ens me	Tot al	Inte rest s	Eq uity
BA LA NC E A T JA NU AR Y 1 , 20 22	\$2, 509 ,297	- \$	\$36 6,90 3	\$84 2,9 84	\$24 2,0 95	\$70 0,8 64	( \$29 8) 5,35	\$ -	\$4,3 66,7 85	- \$	\$4,3 66,7 85
App riat ion d di strib utio f pr ior rs' ing rop s an ns o yea earn s:
Le l re ga serv e	-	-	-	42, 815	-	( 42, 815 )	-	-	-	-	-
Sp ecia l re serv e	-	-	-	-	53,2 63	(5 3,26 3)	-	-	-	-	-
s - \$ Ca sh d ivid end 1.2 sha per re	-	-	-	-	-	( 301 ,116 )	-	-	( 301 ,116 )	-	( 301 ,116 )
Net inc e in 20 22 om	-	-	-	-	-	1,08 9,09 5	-	-	1,08 9,09 5	-	1,08 9,09 5
Oth reh ive inco ( loss ) in 2 022 t of inc e ta er c omp ens me , ne om x	-	-	-	-	-	10,1 12	37, 601	-	47, 713	-	47, 713
al c reh ive inco in 2 022 Tot omp ens me	-	-	-	-	-	1,09 9,20 7	37, 601	-	1,13 6,80 8	-	1,13 6,80 8
Inc se ( dec se) in n trol ling int ts rea rea on- con eres	-	-	-	-	-	-	-	-	-	-	-
BA LA NC E A EC R 3 1, 2 022 T D EM BE	2,5 09,2 97	-	366 ,903	885 ,799	295 ,35 8	1,4 02, 877	( 257 ) ,757	-	5,20 2,4 77	-	5,20 2,4 77
App riat ion d di strib utio f pr ior rs' ing rop s an ns o yea earn s:
l re Le ga serv e	-	-	-	109 ,92 1	-	( 109 ,92 1)	-	-	-	-	-
s - \$ Ca sh d ivid end 2.6 sha per re	-	-	-	-	-	( 652 ,417 )	-	-	( 652 ,417 )	-	( 652 ,417 )
Sp ecia l re serv e	-	-	-	-	( 37,6 01)	37, 601	-	-	-	-	-
the issu e of tibl bo nds Due to rate anc con ver e co rpo niz	-	-	1,15 1,88 5	-	-	-	-	-	1,15 1,88 5	-	1,15 1,88 5
, th uity item ed - ck o ion ent sto pt e eq com pon s ar e re cog s inc e in Net 20 23						4			4		4
om Oth reh ive inco ( loss ) in 2 023 t of inc e ta er c ens me om x	-	-	-	-	-	1,33 3,93 137	- ( 47,4 91)	- 5,0 63	1,33 3,93 ( 42, 291 )	-	1,33 3,93 ( 42, 291 )
omp , ne al c reh ive inco in 2 Tot 023 ens me	-	-	-	-	-	1,33 4,0 71	( 91) 47,4	5,0 63	1,2 91, 643	-	1,29 1,64 3
omp Con tibl bo nd sion rate ver e co rpo con ver	- -	- 225 ,140	- -	- -	- -	-	-	-	225 ,140	- -	225 ,140
d co rsio title rtifi Bon t ce cate nve n en men	215 ,946	( ) 215 ,946	-	-	-	-	-	-	-	-	-
Inc se ( dec se) in n trol ling int ts rea rea on- con eres	-	-	-	-	-	-	-	-	-	-	-
BA LA NC E A EC R 3 1, 2 023 T D EM BE	\$2, 725 ,243	\$9, 194	\$1, 518 ,78 8	\$99 5,72 0	\$25 7,7 57	\$2, 012 ,21 1	( \$30 5,24 8)	\$5, 063	\$7, 218 ,72 8	- \$	\$7,2 18,7 28

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

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands of New Taiwan Dollars)

	Year Ended December 31
		2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	\$	1,751,588	\$	1,425,877
Adjustments :
Adjustments to reconcile profit (loss)
Depreciation		401,759		365,578
Amortization		132,494		147,087
Expected credit loss (gain)		(483)		(2,314)
Net loss (gain) on financial assets and liabilities at fair value through profit or		(8,229)		(78)
loss
Interest expense		46,995		44,400
Interest income		(95,775)		(14,592)
Share of profits of subsidiaries, associates and joint ventures		(1,476)		1,401
accounted for using equity method
Loss (gain) on disposal and retirement of property, plant and equipment		4,952		2,195
Transfer of property, plant and equipment to expenses		2,474		1,715
Loss (gain) on disposal of other assets		29,735		-
Gain on disposal of investments		(1,806)		(2,566)
Other		14		(223)
Total adjustments to reconcile profit and loss		510,654		542,603
Net changes in operating assets and liabilities
Decerase (increase) in financial assets mandatorily classified		214,172		50,350
as at fair value through profit or loss
Decerase (increase) in notes receivable		5		2,482
Decrease (increase) in accounts receivable		335,283		44,889
Decrease (increase) in other receivables		38,603		(53,249)
Decrease (increase) in inventories		599,615		(144,791)
Decrease (increase) in prepayments		(17,996)		(28,799)
Decrease (increase) in other financial assets		(216,761)		-
Total changes in operating assets		952,921		(129,118)
Net changes in operating liabilities
Increase (decrease) in contract liabilities		(66,624)		65,753
Increase (decrease) in notes payable		(105,288)		136,338
Increase (decrease) in accounts payable		(442,276)		253,315
Increase (decrease) in other payables		(70,264)		78,022
Increase (decrease) in provisions		(1,883)		13,060
Increase (decrease) in advance receipts		571		(2)
Increase (decrease) in net defined benefit liabilities		(6,765)		(6,740)
Total changes in operating liabilities		(692,529)		539,746
Total net changes in operating assets and liabilities		260,392		410,628
Total adjustments		771,046		953,231

	Year Ended December 31
	2023	2022
Cash generated from operations	\$2,522,634	\$2,379,108
Interest received	83,851	14,123
Interest paid	(44,409)	(42,287)
Income tax paid	(387,234)	(192,815)
Net cash generated from operating activities	2,174,842	2,158,129
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive	(22,168)	-
income or loss
Acquisition of investments accounted for using equity method	(13,819)	-
Acquisition of property, plant and equipment	(297,645)	(393,988)
Proceeds from disposal of property, plant and equipment	67	114
Increase in refundable deposits	(1,188)	-
Decrease in refundable deposits	-	11,610
Increase in other receivables	-	(204)
Decrease in other receivables	13,229	-
Acquisition of intangible assets	(16,635)	(15,540)
Increase in other noncurrent assets	(15,909)	(39,887)
Net cash used in investing activities	(354,068)	(437,895)
CASH FLOWS FROM FINANCING ACTIVITIES
Decrease in short-term loans	(829,935)	(662,116)
Issuance of corporate bonds	1,381,273	-
Repayment of long-term loans	(11,367)	(152,493)
Increase in guarantee deposits	-	2,003
Decrase in guarantee deposits	(2,190)	-
Repayments of lease principal	(93,750)	(75,441)
Cash dividends paid	(652,417)	(301,116)
Net cash generated from (used in) financing activities	(208,386)	(1,189,163)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH	(38,839)	14,248
EQUIVALENTS
NET INCREASE (DECREASE) IN CASH AND CASH	1,573,549	545,319
EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING	2,457,337	1,912,018
OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR	\$ 4,030,886	\$ 2,457,337

The accompanying notes are an integral part of the parent company only financial statements.

1. GENERAL INFORMATION

Sunonwealth Electric Machine Industry Co., Ltd. (collectively as the "Company") was incorporated in October 1980. The Company engages mainly in the manufacturing and selling of AC/DC brushless fans, electric fans, motors and related components, and micro cooling fans. The principal operating activities of the Company and its subsidiaries (collectively as the "Group") are described in Note 4(3). In addition, the Company has no ultimate parent company.

The consolidated financial statements are presented in the Company's functional currency, New Taiwan Dollars.

2. THE AUTHORIZATION OF THE CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved and authorized for issue by the Board of Directors on March 7, 2024.

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

(1) Effect of adoption of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (FSC)

New standards, interpretations and amendments endorsed by the FSC and effective from 2023 are as follows:

	Effective Date Announced
New IFRSs	by IASB
Amendments to IAS 1 "Disclosure of Accounting Policies"	January 1, 2023 (Note 1)
Amendments to IAS 8 "Definition of Accounting	January 1, 2023 (Note 2)
Estimates"
Amendment to IAS 12 "Deferred Tax Related to Assets	January 1, 2023 (Note 3)
and Liabilities Arising from a Single Transaction"
Amendments to IAS 12 "International Tax Reform -	(Note 4)
Pillar Two Model Rules"

Note 1: The amendments will be applied prospectively for annual reporting periods beginning on or after January 1, 2023.

Note 2: The amendments are applicable to changes in accounting estimates and changes in accounting policies that occur on or after the beginning of the annual reporting period beginning on or after January 1, 2023.

• Note 3: Except for otherwise specified with for temporary differences associated with leases and decommissioning obligations, the amendments will be applied prospectively to transactions that occur on or after January 1, 2022.
• Note 4: As a temporary exception under IAS 12, the company shall not recognize deferred income tax assets and liabilities related to Pillar Two income tax, nor shall it disclose their related information. However, the company shall disclose in its financial report that it has already applied this exception. The company shall apply this part of the amendment retrospectively in accordance with IAS 8 since its issuance date (i.e. May 23, 2023). The company shall apply the remaining disclosure requirements for the annual reporting periods beginning on or after January 1, 2023 and needs not to disclose such information in its interim reports with a reporting dates ending before or on December 31, 2023.
• A. Amendments to IAS 1 "Disclosure of Accounting Policies"

This amendment clarifies that when the size or nature of a transaction, other event or condition is material, and the related accounting policy information is also material to the financial report, the related material accounting policy information shall be disclosed. Conversely, if the company determines that the size or nature of a transaction, other event or condition is not material, or that the size or nature of a transaction is material but the related accounting policy information is not material, it does not need to disclose those immaterial accounting policy information. However, the company's conclusion that accounting policy information is immaterial does not affect the relevant disclosures required by other IFRS standards.

B. Amendments to IAS 8 "Definition of Accounting Estimates"

This amendment defines accounting estimates as the monetary amount of financial statements subject to measurement uncertainty, and provides further explanations that, except for corrections due to errors in the previous period, the impact of changes in input values or measurement techniques on accounting estimates is a change in accounting estimates.

C. Amendment to IAS 12 "Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction"

The amendments narrow the scope of the recognition exemption in paragraphs 15 and 24 of IAS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. When the Company initially applies the amendments, it will recognize the cumulative effect of applying the amendments initially as an adjustment to the opening balance of the retained earnings (or other components of equity, as appropriate) at the beginning of the earliest presented period for all deductible and taxable temporary differences associated with leases and decommissioning, and will prospectively apply the amendments for other transactions occurred on or after January 1, 2022.

As of the date the accompany consolidated financial statements are authorized for issue, the Company is still evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Company completes the evaluation.

D. Amendments to IAS 12"International Tax Reform - Pillar Two Model Rules" The amendments stipulates that, as a temporary exception to IAS 12, Company shall neither recognize nor disclose information about deferred income tax assets and liabilities for Pillar Two income tax relating to international tax reform; however, Company shall disclose in its financial reports that it has applied this exception. In addition, Company shall separately disclose its current income tax expenses (benefits) relating to Pillar Two income tax. If the Pillar Two bill has been enacted or has been substantively enacted but has not yet taken effect, Company should disclose qualitative and quantitative information on its exposure to Pillar Two income tax that is known or can be reasonably estimated.

The Group has evaluated the aforementioned standards and interpretations, and there's no significant effect on the Group's financial position and performance.

(2) Effect of new issuances or amendments to IFRSs as endorsed by the FSC but not yet adopted:

New IFRSs	Effective Date Announced by IASB
Amendments to IFRS 16 "Lease liabilities in sale and	January 1, 2024 (Note 1)
leaseback"
Amendments to IAS 1 "Classification of Liabilities as	January 1, 2024
Current or Noncurrent"
Amendments to IAS 1 "Non-current Liabilities with	January 1, 2024
Covenants "
Amendments to IAS 7 and IFRS 7 "Supplier finance	January 1, 2024(Note 2)
arrangements "

• Note 1: The seller-lessee shall apply the amendments retroactively in accordance with IAS 8 for the sale and leaseback transactions made after the initial application of IFRS 16.
• Note 2: This amendment provides certain transitional reliefs. When initially appling the amendment, Company are not required to disclose comparative information and interim period information, as well as opening information required by paragraph 44H(b)(ii)-(iii).
• A.Amendments to IFRS 16 "Lease liability in a sale and leaseback"

This amendment clarifies that for a sale and leaseback transaction, if the transfer of the asset is treated as a sale in accordance with IFRS 15, the liabilities incurred by the seller and lessee due to the leaseback should be treated in accordance with IFRS 16 regarding lease liabilities; however, if variable lease payments that do not depend on an index or rate are involved, the seller-lessee should still determine and recognize the lease liability arising from such variable payments in a manner that does not recognize gains and losses related to the retained right of use. The difference between the subsequent actual lease payment amount and the reduced carrying amount of the lease liability is recognized in profit or loss.

B. Amendments to IAS 1 "Classification of Liabilities as Current or Noncurrent"

The amendments clarify that when the Company determines whether a liability is classified as noncurrent, the Company should assess whether the Company has the right to defer the settlement for at least twelve months after the reporting period. If the Company has that right on the end of reporting period, that liability must be classified as non-current regardless whether the Company expects whether to exercise the right or not. If the Company must follow certain conditions to have the right to defer the settlement of a liability, the Company must have followed those conditions on the end of reporting period in order to have that right even if the lender tests the Company's compliance on a later date.

The aforementioned settlement means transferring cash, other economic resources or the Company's equity instruments to the counter-party to extinguish the liability. If the terms of the liability give the counterparty an option to extinguish the liability by the Company's equity instruments, and this option is recognized separately in equity in accordance with IAS 32 "Financial Instruments: Presentation" then the classification of the liability will not be affected.

C. Amendment to IAS 1 "Non-current Liabilities with Covenants"

This amendment further clarifies that only contractual terms that are required to be complied with before the end of the reporting period will affect the classification of the liability at that date. The contractual terms that required to be complied with within 12 months after the reporting period do not affect the classification of liabilities at the reporting date. However, for liabilities classified as non-current and must be repaid within 12 months after the reporting period due to potential non-compliance, the relevant facts and circumstances should be disclosed in the notes. D.Amendments to IAS 7 and IFRS 7 "Supplier finance arrangements "

Supplier financing arrangements involve one or more financing providers making payments to suppliers on behalf of Company, and Company agrees to repay the financing providers on the payment date agreed with the suppliers or a later date. The amendments to IAS 7 require Company to disclose information on its supplier financing arrangements to enable users of financial statements to assess the impact of these arrangements on Company's liabilities, cash flows and exposure to liquidity. The amendments to IFRS 7 include into its application guidance that when disclosing how Company manages the liquidity risk of its financial liabilities, it may also consider

whether it has obtained or can obtain financing facilities through supplier financing arrangements, and whether these arrangements may cause concentration of liquidity risk.

The Group has evaluated the aforementioned standards and interpretations, and there is no significant effect to the Group's financial position and performance.

(3) Effect of the IFRSs issued by IASB but not yet endorsed and issued into effect by FSC:

	Effective Date Announced
New IFRSs	by IASB
Amendments to IFRS 10 and IAS 28 "Sale or Contribution	To be determined by IASB
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
Amendments to IFRS 17 "Initial application IFRS 17 and	January 1, 2023
IFRS 9 – Compare Information"
Amendments to IFRS 21 " Lack of Exchangeability "	January 1, 2025

As of the date the accompany consolidated financial statements are authorized for issue, the Group is still evaluating the impact on its financial position and financial performance as a result of the initial adoption of the aforementioned standards or interpretations. The related impact will be disclosed when the Group completes the evaluation.

4.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the periods presented, unless otherwise stated.

(1) Compliance statement

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the IFRSs, IASs, interpretations as well as related guidance endorsed by the FSC with the effective dates.

(2) Basis of preparation

• A.Except for the following items, these consolidated financial statements have been prepared under the historical cost convention:
• a. Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
• b. Financial assets at fair value through other comprehensive income or loss.
• c. Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.

B.The preparation of financial statements in compliance with IFRSs requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:

• a. All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.
• b. Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
• c. Profit or loss and each component of other comprehensive income are attributed to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
• d. Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
• e.When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss or transferred directly to retained earnings as appropriate, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

		Percentage of Ownership
Investee / Subsidiary	Main Businesses	December 31, 2023	December 31, 2022
1.Sunonwealth Electric Machine Industry Co., Ltd.
Sunon INC.	Manufacturing and selling of fans	100.00%	100.00%
Sunon SAS.	Manufacturing and selling of fans	100.00%	100.00%
Sunon Corporation	Manufacturing and selling of fans	100.00%	100.00%
Sunonwealth Electric Machine Ind.(H.K.)Ltd.	Manufacturing and selling of fans	99.99%	99.99%
Successful Century Co., Ltd.	Investments	100.00%	100.00%
BVI Sunon International Limited	Investments	100.00%	100.00%
Sunon Electronics India Private Limited	Manufacturing and selling of fans	99.99%	99.99%
Sunon Electronics Philippines Corp.	Manufacturing and selling of fans	99.99%	99.99%
Sunon Properties Philippines Corp.	Real estate development	99.99%	99.99%
2.BVI Sunon International Limited
Sunon Electronic (Foshan) Co., Ltd.	General investment and trade	100.00%	100.00%
Sunon Electronic (Bei Hai) Co., Ltd.	Manufacturing and selling of new type electronic parts	100.00%	100.00%
3.Sunon Electronic (Foshan) Co., Ltd.
Beihai Li Zhun Electronics Co., Ltd.	Manufacturing and selling of fans	66.67%	66.67%
4.Successful Century Co., Ltd.
Sunon Electronic (Kunshan) Co., Ltd.	Manufacturing and selling of fans	100.00%	100.00%
5.Sunon Electronic (Kunshan) Co., Ltd.
Beihai Li Zhun Electronics Co., Ltd.	Manufacturing and selling of fans	33.33%	33.33%
6.Sunon SAS
Sunon Deutschland GmbH	Selling of fans	100.00%	100.00%

B. The consolidated entities were as follows:

a. Some subsidiaries' financial statements contained in the above consolidated financial statements were audited by the other auditors. These subsidiaries' total assets amounted to \$1,376,210 thousand and \$1,422,090 thousand, representing 10.91% and 11.66% of the consolidated assets, and their total liabilities amounted

to \$460,549 thousand and \$692,641 thousand, representing 8.54% and 9.91% of the consolidated liabilities as of December 31, 2023 and 2022, respectively; their total operating revenues amounted \$1,231,488 thousand and \$1,435,265 thousand, representing 9.54% and 10.21% and their total comprehensive income amounted to (\$8,642) thousand and \$52,377 thousand, representing (0.67%) and 4.61% of the total comprehensive income for the years ended December 31, 2023 and 2022, respectively.

• b. Changes in subsidiaries: None.
• C. Subsidiaries not included in the consolidated financial reports: None.
• D. Adjustments for subsidiaries with different balance sheet dates: None.
• E. Material restrictions: None.
• F. Contents of the parent company's securities held by subsidiaries: None.
• G. Subsidiaries that have non-controlling interest that are material to the Group: None.
• (4) Foreign currency translation
• A. Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional and the Group's presentation currency.
• B. In preparing the financial statements of each individual consolidated entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Such exchange differences are recognized in profit or loss in the year in which they arise. Non-monetary items measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on the retranslation of non-monetary items are included in profit or loss for the year except for exchange differences arising on the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items that are measured in terms of historical cost in foreign currencies are not retranslated.
• C. For the purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations are translated into New Taiwan Dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange

rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to noncontrolling interests as appropriate).

• (5) Classification of current and non-current items
• A. Assets that meet one of the following criteria are classified as current assets; otherwise they are classified as non-current assets:
  • a. Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;
  • b. Assets held mainly for trading purposes;
  • c. Assets that are expected to be realized within twelve months from the balance sheet date;
  • d. Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the balance sheet date.
• B.Liabilities that meet one of the following criteria are classified as current liabilities; otherwise they are classified as non-current liabilities:
  • a. Liabilities that are expected to be paid off within the normal operating cycle;
  • b. Liabilities held mainly for trading purposes;
  • c. Liabilities that are to be paid off within twelve months from the balance sheet date (Even if a long-term refinancing or re-arrangement of payment agreements is completed after the balance sheet date and before the issuance of the financial report is approved, it is classified as current liabilities).
  • d. Liabilities for which the repayment date cannot be extended unconditionally to more than twelve months after the balance sheet date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.
• (6) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including the original maturity of the time deposits within three months.)

(7) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are recognized initially at fair value plus or minus, in the case of investments not at fair value through profit or loss, directly attributable transaction costs. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

A. Financial assets

a. Category of financial assets

Financial assets are recognized on a trade date basis.

Financial assets are classified into the following categories: financial assets at FVTPL and financial assets at amortized cost.

(a) Financial asset at FVTPL

For certain financial assets are classified as at FVTPL when such a financial asset is mandatorily and designated classified. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.

The Company, at initial recognition, irrevocably designate a financial asset as measured at fair value through profit or loss if doing so eliminates or significantly reduces a measurement or recognition inconsistency (sometimes referred to as an 'accountingmismatch') that would otherwise arise from measuring assets or liabilities or recognising the gains and losses on them on different bases.

Financial assets at fair value through profit or loss are measured at fair value, dividends generated are recognized in other income, and interest income and gains or losses arising from remeasurement are recognized in other gains and losses. For the determination of fair value, please refer to Note 12.

(b) Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

• a. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
• b. The contractual terms of the financial assets give rise on specified date to cash flow that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost, which equals to gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Expect for the following two cases, interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset.

• a. Purchased or originated credit-impaired financial assets: for those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
• b. Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets: for those financial assets, the Group shall apply the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

(c) Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination. Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings. Dividends on these investments in equity instruments at FVTOCI are recognized in profit or loss when the Company's right to receive the dividends is established, unless the Company's right clearly represent a recovery of part

• of the cost of the investment
• b. Impairment of financial assets
• (a) At the end of each reporting period, a loss allowance for expected credit loss is recognized for financial assets at amortized cost (including accounts receivable), investments in debt instruments that are measured at FVTOCI, lease receivable and contract assets.
• (b) The Group always recognize lifetime Expected Credit Loss (i.e. ECL) for accounts receivables. For other financial assets, the Group recognize lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equaling to 12-month ECL.
• (c) Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date. In contrast, lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument.
• (d) The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and does not reduce the carrying amount of the financial asset.

c. Derecognition of financial assets

The Group derecognizes a financial asset when one of the following conditions is meet:

• (a) The contractual rights to receive cash flows from the financial asset expire.
• (b) The contractual rights to receive cash flows from the financial asset have been transferred and the Group has transferred substantially all risks and rewards of ownership of the financial asset.
• (c) The Group neither retains nor transfers substantially all risks and rewards of ownership of the financial asset; however, it has not retained control of the financial asset.

On derecognition of financial asset at amortized cost in its entirety, the difference between the financial asset's carrying amount and the sum of the consideration received is recognized in profit or loss. On derecognition of debt instrument measured at fair value through other comprehensive income, the difference between the financial asset's carrying amount and the sum of the consideration received and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in profit or loss. On derecognition of equity instruments at fair value through other comprehensive income in its entirety, the cumulative profit and loss will be transferred directly to retained earning without reclassified into profit and loss.

B. Equity instruments

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument. An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

C. Financial liabilities

a. Subsequent measurement

Except for the following conditions, all financial liabilities are measured at amortized cost in accordance with the effective interest method:

(a) Financial liabilities are classified as at fair value through profit or loss when the financial liability is either held for trading or is designated as at fair value through profit or loss. Financial liabilities classified as held for trading are mainly for repurchasing in the short term when they occur, and derivatives other than financial guarantee contracts or designated and effective hedging instruments. Financial assets meet one of the following conditions, the Group designates them as measured at fair value through profit and loss at the time of initial recognition:

i. It is a mixed (combined) contracts containing at least an embedded derivaties and the host contract is an asset not within the scope of IFRS 9; or

• ii. It can eliminate or significantly reduce measurement or recognition inconsistencies; or
• iii. It is an instrument that manages and evaluates its performance on a fair value basis based on written risk management or investment strategies.
• b. Derecognition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

D. Modification of Financial Instruments

When the contractual cash flows of a financial instrument are renegotiated or modified and the renegotiation or modification does not result in the derecognition of that financial instrument, the Group recalculates the gross carrying amount of the financial asset or the amortized cost of the financial liabilities using the original effective interest rate and recognizes a modification gain or loss in profit or loss. Any costs or fees incurred adjust the carrying amount of the modified financial instrument and are amortised over the remaining term of the modified financial instrument. If the renegotiation or modification results in that the derecognition of that financial instrument is required, then the financial instrument is derecognized accordingly.

If the basis for determining the contractual cash flows of a financial asset or financial liability changes resulting from interest rate benchmark reform and the change is necessary as a direct consequence of interest rate benchmark reform and the new basis for determining the contractual cash flows is economically equivalent to the previous basis, the Group applies the practical expedient to account for that change as a change in effective interest rate. If changes are made to a financial asset or financial liability in addition to changes to the basis for determining the contractual cash flows required by interest rate benchmark reform, the Group first applies the practical expedient aforementioned to the changes required by interest rate benchmark reform, and then applies the applicable requirements to any additional changes to which that practical expedient does not apply.

(8) Inventories

Inventories are stated at the lower of cost and net realisable value, accounted for on a perpetual basis. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (allocated based on normal operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and costs necessary to make the sale.

• (9) Investments accounted for using equity method / associates
• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for under equity method and are initially recognized at cost.
• B. The Group's share of its associates' post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group's share of losses of its associate equals or exceeds its interest in the associate, including the carrying amount of the investment in the associate determined using the equity method plus the long – term interests that, in substance, from part of the Group's net investment in the associate. The Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
• C. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group's interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.
• D. In the case where an associate issues new shares and the Group does not subscribe or proportionately acquire the new shares, which results in a change in the Group's ownership percentage of the associate while maintains significant influence on the associate, then "Capital surplus" and "Investments accounted for using under the equity method" shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group's ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.
• E. Upon loss of significant influence over an associate, the Group remeasures any investment retained in the former associate at its fair value. Any difference between fair value and carrying amount is recognized in profit or loss.
• F. When the Group disposes of its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized in other

comprehensive income in relation to the associate are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.

G. When the Group disposes its investment in an associate, if it loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it still retains significant influence over this associate, then the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss proportionately.

(10)Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized. For property, plant and equipment under construction, sample produced from testing whether the asset is functioning properly before its intended use are measured at lower of the costs or net realizable value. Proceeds from selling such an item and the cost of the item are recognized in profit or loss.
• B. Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each financial year-end. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in accounting estimate under IAS 8, "Accounting Policies, Changes in Accounting Estimates and Errors", from the date of the change.

The estimated useful lives as follows:

Buildings:

Main building, 20 to 57 years; Others, 2 to 39 years; Machinery and equipment, 2 to 15 years; Other equipment, 1 to 24 years; Leasehold improvement, 1 to 22 years;

^-23-

D.An item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the assets. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in profit or loss.

(11)Leases/The Group as a lessee

The Group assesses whether the contract is (or includes) a lease at the date of the contract. For a contract that includes a lease component and one or more additional lease or non-lease components, the Group will allocate the consideration to the lease component base on the individual price of each lease component and the aggregated individual price of the non-lease component.

Except for payments for low-value asset and short-term leases which will be recognized as expenses on a straight-line basis, the Group will recognize right-of-use assets and lease liabilities for all leases at the inception of lease.

Right-of-use asset

The right-of-use asset is initially measured at cost (including the initial measurement amount of the lease liability, the payments less incentives, initial direct costs and the estimated recover cost), the subsequent measurement is based on the cost less accumulated depreciation and accumulated impairment loss, and adjusting the amount of re-measures of lease liabilities.

The right-of-use asset recognized depreciation is using the straight-line basis from the date of the lease until the expiration of the useful life or the expiration of the lease term, the depreciation is provided that the title of the underlying asset will be acquired at the end of the lease period or, if the cost of the right-of-use asset reflects the execution of the purchase option.

Lease liability

The lease liability is initially measured by the present value of the lease payment (including fixed payment, substantive fixed payment, change in lease payment depending on the index or rate, etc.). If the implied interest rate on the lease is easy to determine, the lease payment is discounted using that interest rate. If the interest rate is not easy to determine, the lessee's increase borrowing rate is used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. If the lease period, the evaluation of the purchase choice, the amount of expected to be paid under the residual value guarantee or the change in the index or rate used to determine the lease payment result in a change in the future lease payment, the Group will measure the lease liability and adjust the right to use assets relatively. If the carrying amount has been reduced to zero, the remaining amount will recognize in the profit and loss. Lease liabilities are presented in a single-line project on the consolidated balance sheet.

(12)Investment properties

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes), also include land held for a currently undetermined future use.

Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation is recognized using the straight-line method.

Investment properties in the course of construction are stated at cost less accumulated impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Depreciation of these assets commences when the assets are ready for their intended use.

On derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(13)Intangible assets

Intangible assets with finite useful lives that are acquired separately are measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis over the following estimated lives: computer software - 2 to 15 years; trademarks are the economic benefit or contract period. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Intangible assets are derecognized when disposed of or expected to have no future economic benefits generated through usage or disposal. On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

(14)Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist, the impairment loss shall be reversed to the extent of the loss previously recognized in profit or loss.

(15)Provisions

Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation on the balance sheet date, which is discounted using

a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When discounting is used, the increase in the provision due to passage of time is recognized as interest expense. Provisions are not recognized for future operating losses.

(16)Employee benefits

A.Short-term employee benefits

Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in respect of service rendered by employees in a period and should be recognized as expenses in that period when the employees render service.

B.Pensions

a. Defined contribution plans

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.

• b. Defined benefit plans
• (a) Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior period. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets, together with adjustments for unrecognized past service costs. The defined benefit net obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability; when there is no deep market in high-quality corporate bonds, the Group uses interest rates of government bonds (at the balance sheet date) instead.
• (b) Actuarial gains and losses arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.
• (c) Past service costs are recognized immediately in profit or loss.
• C. Employees' bonus and directors' remuneration

Employees' bonus and directors' remuneration are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. However, if the accrued amounts for employees' bonus and directors' remuneration are different from the

actual distributed amounts as resolved by the shareholders at their shareholders' meeting subsequently, the differences should be recognized based on the accounting for changes in estimates.

D. Termination benefits

Termination benefits are employee benefits provided in exchange for the termination of employment as a result from either the Group's decision to terminate an employee's employment before the normal retirement date, or an employee's decision to accept an offer of redundancy benefits in exchange for the termination of employment. The Group recognizes expense when it can no longer withdraw an offer of termination benefits or it recognizes related restructuring costs, whichever is earlier. Benefits that are expected to be due more than 12 months after balance sheet date shall be discounted to their present value.

(17)Share capital and treasury shares

A.Share capital

Ordinary share is classified as equity. The classification of the preferred stock depends on the essence of the agreement. If the preferred stock matches the definition of the financial liability, it is classified as a liability. Otherwise, it is classified as equity. Incremental cost that can be attributed to the issuance of stocks or options is deducted from the capital issued.

B.Treasury Shares

When the Group acquires its outstanding shares, the repurchase considerations (including all directly accountable costs) are recognized under treasury shares and shown as a deduction in equity. Gains on disposal of treasury shares should be recognized under "capital surplus - treasury stock transactions"; losses on disposal of treasury shares should be offset against existing capital reserves arising from similar types of treasury shares. If there is insufficient capital surplus to offset the losses, then such losses should be accounted for under retained earnings. The carrying amount of treasury shares should be calculated using the weighted-average method for the purpose of repurchased shares.

When the Group's treasury shares are retired, the treasury share account should be credited, and the capital surplus - premium on stock account and capital stock account should be debited proportionately according to the share ratio. The carrying value of treasury shares in excess of the sum of its par value and premium on stock should first be offset against capital surplus from similar types of treasury share transactions, and the remainder, if any, debited to retained earnings. The sum of the par value and premium on treasury shares in excess of its carrying value should be credited to capital surplus from similar types of treasury share transactions.

• (18)Share-based payment transactions
• A.For the equity-settled share-based payment arrangements, the employee services received are measured at the fair value of the equity instruments granted at the grant date, and are recognized as compensation cost over the vesting period, with a corresponding adjustment to equity. The fair value of the equity instruments granted shall reflect the impact of market vesting conditions and non-market vesting conditions. Compensation cost is subject to adjustment based on the service conditions that are expected to be satisfied and the estimates of the number of equity instruments that are expected to vest under the non-market vesting conditions at each balance sheet date. And ultimately, the amount of compensation cost recognized is based on the number of equity instruments that eventually vest.
• B.Cash-settle share-based payment arrangements are the fair value of liabilities undertaken recognized in remuneration costs and liabilities in the vesting period and measured by the fair value of equity instruments offered at each balance sheet date and the settlement date. Any changes are recognized in profit or loss.

(19)Income tax

• A.The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity, respectively.
• B.The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the subsequent year when the stockholders resolve to distribute retain the earnings.
• C. Deferred income tax is recognized, using the balance sheet method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the parent company only financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of goodwill or of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss, and it does not give rise to equal deductible and taxable temporary differences at the time of transaction. And it does not give rise to equal deductible and taxable temporary differences at the time of transaction. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Company and it

is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

• D.Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.
• E.Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realise the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis or realise the asset and settle the liability simultaneously.
• F.Tax preference given for expenditures incurred on acquisitions of equipment or technology, research and development, employees training and equity investments is recorded using the income tax credits accounting.

(20)Revenue Recognition

The Group recognizes revenues based on the following steps:

• 1. Identifying the contracts;
• 1. Identifying obligations in the contracts;
• 1. Determining prices;
• 1. Allocating prices into the obligations in the contracts;
• 1. Recognizing revenues while fulfilling the obligations.

The Group identify the contract with the customers, allocate the transaction price to the performance obligations, and recognize revenue when performance obligations are satisfied.

The Group does not adjust the promised amount of consideration for the effects of a significant financing component if the period between when the Group transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

1. Goods sales

The Group sells fans and other relevant products. Sales revenues are recognized while the control of goods is transferred to the customers since the customers already have the rights to use, set price, take the major responsibility to resell the good and bear the risk of obsoleteness. The Group recognizes revenues and accounts receivable at the point and presents it in net term after deducting sales return, quantity discount and sales allowance.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of risks and rewards of materials ownership.

2. Service revenue

Revenue from technical services is recognized when services are provided that in accordance with the relevant agreements.

(21)Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All borrowing costs other than those stated above are recognized in profit or loss in the period in which they are incurred.

(22)Government Subsidy

Government subsidies are recognized at fair value when it is reasonably certain that the Group will comply with the conditions attached to the government subsidies and will receive such subsidies.

Government subsidies are recognized in profit and loss on a systematic basis during the period when the relevant costs that they intend to compensate are recognized as expenses by the company. If government subsidy is used to compensate for expenses or losses that have occurred, or for the purpose of providing the Company with immediate financial support and there is no future related cost, it is recognized in the profit and loss during the period when it can be received. Government subsidies related to property, plant and equipment are recognized as non-current liabilities, and recognized as profits and losses on a straight-line basis based on the estimated useful life of the relevant assets.

5. CRITICAL ACCOUNTING JUDGMENTS, ESTIMATES AND KEY SOURCES OF ASSUMPTION UNCERTAINTY

The preparation of the Group's consolidated financial statements is adopting accounting policies based on the following significant judgements, significant accounting estimates and assumptions:

(1) Critical judgements in applying accounting policies

A. Judgment of financial asset classification

The Group assesses the business model of financial assets based on the hierarchy that reflects the Group of financial assets that are jointly managed for specific business purposes. This assessment requires consideration of all relevant evidence, including measures of asset performance, risks affecting performance, and the manner in which the relevant managers are determined, and judgments are required. The Group continues to assess the adequacy of its business model and monitors the financial assets measured by the amortized cost before the maturity date and the debt instrument investments measured at fair value through other comprehensive income. Evaluate whether the disciplinary action has the same goal of business model. If the business model has been changed, the Group delays the adjustment of the subsequent classification of financial assets. The Group reclassifies financial assets in accordance with IFRS 9, and the application will be postponed from the date of reclassification, if the business model has changed.

B. Revenue recognition

The Group follows IFRS 15 to determine if it controls the specified good or service before that good or service is transferred to the customer, and the Group is acting as a principal or an agent in that transaction. When the Group acts as an agent, revenue is recognized on a net basis.

The Group acts as a principal as that it meets one the of following situations:

• a. The Group gains control over the goods from the other party before transferring goods to customers.
• b. The Group controls the right of providing service by the other party in order to control the ability of the party to provide service to customers.
• c. The Group gain control over goods or service from the other party in order to combine with other goods or services to provide specific goods or services to customers.

The indicators (not limited to) which assist making judgment on whether the Group controls the goods or services before transferring goods or services to customers:

• a. The Group has primary responsibilities for the goods or services it provides;
• b. The Group bears inventory risk before transferring the specific goods or services to customer, or after transferring the control to customer.
• c. The Group has the discretion to set prices.
• C. Lease term

In determining the lease term, the Group considers all the facts and circumstances that create an economic incentive to exercise (or not exercise) the option, including any expected change in facts and circumstances from the commencement date until the exercise date of the option. Main Factors considered include the contractual terms and conditions for the period covered by the option, the significant leasehold improvements made (or expected) during the contract period, and the importance of the underlying assets to the Group's operations, etc. The lease term is reassessed if a significant change in circumstance that are within the control of the Group occurs.

• (2) Critical accounting estimates and assumptions
• A. Revenue Recognition

The Group recognizes records a refund for estimated future returns and other allowances in the same period the related revenue is recorded. Refund for estimated sales returns and other allowances is generally made and adjusted at a specific percentage based on historical experience and any known factors that would significantly affect the allowance, and our management periodically reviews the adequacy of the percentage used.

B. Estimated impairment of financial assets

The provision for impairment of trade receivables is based on assumptions about risk of default and expected loss rates. The Group uses judgement in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group's past history, existing market conditions as well as forward looking estimates at the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.

C. Process of fair value measurement and evaluation

When the assets and liabilities at fair value with no active market, the Group determines whether to use outside appraisal and using proper evaluation techniques based on related regulation or its own judgment. If the Level 1 input value is not available while evaluating, the Group refers to the analysis of the investee's financial position and operating outcome, recent trading price, quotes on non-active market of same equity instrument, quotes on active market of similar equity instrument and evaluation multiples of comparable companies. If the future input value is different from expectation, the fair value might change. The Group updates input values quarterly according to the market status in order to monitor if the measurement of fair value is appropriate.

D. Impairment assessment of tangible and intangible assets

The Group assesses impairment based on its subjective judgement and determines the separate cash flows of a specific group of assets, useful lives of assets and the future possible income and expenses arising from the assets depending on how assets are utilised and industrial characteristics. Any changes of economic circumstances or estimates due to the change of Group strategy might cause material impairment on assets in the future.

E. Impairment assessment on investment using equity method

The Group assesses the impairment of investments accounted for using the equity method whenever triggering events or changes in circumstances indicate that an investment may be impaired and carrying value cannot be recoverable. The Group assesses the recoverable amount based on a projected future cash flow and receivable cash dividend of the investees, and disposal-generating future cash flow to ensure the

reasonableness of such assumptions.

• F. Realisability of deferred income tax assets
• Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilised. Assessment of the realisability of deferred income tax assets involves critical accounting judgements and estimates of the management, including the assumptions of expected future sales revenue growth rate and profit rate, tax exempt duration, available tax credits, tax planning, etc. Any variations in global economic environment, industrial environment, laws, and regulations might cause material adjustments to deferred income tax assets.
• G. Evaluation of inventories

As inventories are stated at the lower of cost and net realisable value, the Group must determine the net realisable value of inventories on balance sheet date using judgements and estimates. The Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realisable value.

H. Calculation of accrued pension obligations

When calculating the present value of defined pension obligations, the Group must apply judgments and estimates to determine the actuarial assumptions on balance sheet date, including discount rates and future salary growth rate. Any changes in these assumptions could significantly impact the carrying amount of defined pension obligations.

I. Lessees' incremental borrowing rates

At the time of the decision to increase the borrowing rate of the lessee used in the lease payment, the risk-free interest rate and the same currency is used as the reference rate, and the estimated lessee's credit risk sticker and lease specific adjustments (such as asset-specific and secured factors) are taken into account.

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	December 31
Item	2023	2022
Cash on hand	\$636	\$909
Cash in banks	4,030,250	2,456,428
Total	\$4,030,886	\$2,457,337

A. The financial institutions dealing with the Group are credit worthy, and the Group does transactions with a number of financial institutions to diversify credit risk that are unlikely to be expected to default.

B. The Group had no cash and cash equivalents pledged to others.

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

		December 31
Item	2023		2022
Non-derivative financial assets - current
Beneficiary certificates	\$	-	\$211,827
Non-derivative financial assets - noncurrent
Redemption and put options of convertible bonds	\$	-	\$ -

A. The Group recognized net gain of financial assets at fair value through profit or loss of \$10,035 thousand and \$2,644 thousand for the years ended December 31, 2023 and 2022, respectively.

B. The Group had no financial assets at fair value through profit or loss pledged to others.

(3) Notes receivable, net

	December 31
Item	2023	2022
At amortized cost
Notes receivable	\$30,114	\$30,119
Less: Loss allowance	(24)	(24)
Net	\$30,090	\$30,095

A. The Group had no notes receivable pledged to others.

B. Please refer to Note 6(4) for the relevant disclosure of loss allowance for notes receivable.

(4) Accounts receivable, net

	December 31
Item	2023	2022
At amortized cost
Accounts receivable	\$3,057,756	\$3,393,039
Less: Loss allowance	(8,447)	(8,982)
Net	\$3,049,309	\$3,384,057

A. The accounts receivable that were neither past due nor impaired was following the Group's credit policy determined by reference to the industry characteristics, operation scale and current financial position of the counterparties. The average credit period on sales of goods was 3-4 months.

• B. The Group had no account receivable pledged to others.
• C. To reduce major credit risk, the Group bought credit guarantee insurance.
• D. The Group applies the simplified approach to provisions for expected credit losses, which permits the use of a lifetime expected credit losses provision for trade receivables (including other receivables). The expected credit losses on trade receivables are estimated by reference to past account aging records of the debtor, an analysis of the debtor's current financial position, and industrial trend. The group recognizes loss allowance based on the expected credit loss ratio of customers by different risk levels with consideration of factors of historical loss ratios and customers' financial conditions, competitiveness and business outlook.
• E. The Group measures the loss allowance for notes receivable and accounts receivable (including other receivables) according to the preparation matrix:

	Expected Credit	Gross Carrying	Loss Allowance
December 31, 2023	Loss Rate	Amount	(Lifetime ECL)	Amortized Cost
Not past due	0.05%-5%	\$3,042,607	(\$7,899)	\$3,034,708
Past due within 30 days	0.05%-5%	139,175	(445)	138,730
Past due 31-90 days	0.05%-5%	6,436	(35)	6,401
Past due over 91 days	0.05%-5%	422	(92)	330
Total		\$3,188,640	(\$8,471)	\$3,180,169

	Expected Credit	Gross Carrying	Loss Allowance
December 31, 2022	Loss Rate	Amount	(Lifetime ECL)	Amortized Cost
Not past due	0.05%-5%	\$3,254,881	(\$8,236)	\$3,246,645
Past due within 30 days	0.05%-5%	274,092	(669)	273,423
Past due 31-90 days	0.05%-5%	33,162	(8)	33,154
Past due over 91 days	0.05%-5%	1,701	(93)	1,608
Total		\$3,563,836	(\$9,006)	\$3,554,830

F. Movements of the loss allowance for notes and accounts receivable were as follows:

	Year Ended December 31
	2023	2022
Beginning balance	\$9,006	\$11,234
Add: Provision for impairment	-	-
Less: Reversal of impairment	(483)	(2,314)
Less: Write-offs	-	-
Less: Foreign exchange differences	(52)	86
Ending balance	\$8,471	\$9,006

The above provision has already taken into consideration of collateral or other credit enhancement. The other credit enhancement possessed by above receivables were \$1,202,827 thousand, \$1,200,416 thousand as of December 31, 2023 and 2022, respectively.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery of the receivable. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables which are due. Where recoveries are made, these are recognized in profit or loss. The Group's trade receivables for offsetting the contract amount are both \$0 thousand for the years ended December 31, 2023 and 2022, respectively.

G. Please refer to Note 12 for the relevant credit risk management and assessment method.

	December 31
Item	2023	2022
Raw materials	\$671,116	\$887,795
Supplies	21,993	30,910
Work in process	249,583	373,313
Finished goods	1,109,746	1,359,480
Net	\$2,052,438	\$2,651,498

(5) Inventories and operating costs

A. The related inventory gain (loss) recognized as operating cost for the years ended December 31, 2023 and 2022 were as follows:

	Year Ended December 31
Item	2023	2022
Cost of goods sold	\$9,198,817	\$10,591,822
Unallocated overheads and labor cost	116,197	79,353
Loss (Gain) on inventory valuation	(100,571)	124,174
Others	98,884	97,001
Total	\$9,313,327	\$10,892,350

• B. The Group recognized inventory valuation loss (gain) (\$100,571) thousand and \$124,174 thousand for the years ended December 31, 2023 and 2022, respectively, as a result of inventory's write-down to net realizable value or increasing price of some products and decreasing part of inventory.
• C. The Group had no inventories pledged to others.

(6) Other financial assets – current

	Year Ended December 31
Item	2023	2022
Time deposits with maturities of more than three months	\$216,761	\$ -

(7) Financial assets at fair value through other comprehensive income or loss noncurrent

	Year Ended December 31
Item	2023	2022
Equity instruments
Unlisted stocks	\$22,168	\$	-
Evaluation adjustment	5,063		-
Total	\$27,231	\$	-

• A. The Group invests in domestic unlisted stocks in accordance with its medium/ long-term strategies and expects to make a profit through long-term investment. Management of the Group believes that it is not consistent with the afore-mentioned long-term investment planning if the short-term fair value changes of such investment are presented in profit or loss. Therefore, the Group elects to designate such investment as to be measured at FVTOCI.
• B. Please refer to Note 12 for relevant credit risk management and assessment methods.
• C. The financial assets at FVTOCI were not pledged as collateral.

(8) Investments accounted for using equity method

	December 31
Item	2023	2022
Associates:
Associates without significance	\$20,968	\$5,800

A. Associates:

Shares of individually insignificant associates of the Group are summarized as follows:

	Year Ended December 31
	2023	2022
Share of:
Net loss	\$1,476	(\$1,401)
Other comprehensive income (loss) (net after tax)	-	-
Total comprehensive loss	\$1,476	(\$1,401)

B. All the investments accounted for using equity method and the Group's share of profit or loss and other comprehensive income in the investees are calculated based on the unaudited financial statements.

	December 31
Item	2023	2022
Land	\$820,335	\$820,335
Buildings	472,542	474,211
Machinery and equipment	1,113,619	1,103,363
Miscellaneous equipment	656,536	478,998
Leasehold improvements	328,876	304,607
Equipment to be inspected	54,465	135,597
and construction in progress
Total cost	\$3,446,373	\$3,317,111
Less: Accumulated depreciation and impairment	(1,274,909)	(1,043,697)
Carrying amount	\$2,171,464	\$2,273,414

(9) Property, plant and equipment

	Land	Buildings	Machinery and Equipment	Miscellaneous equipment	Leasehold improvement	Equipment to be Inspected and Construction in Progress	Total
Cost
Balance at January 1, 2023	\$820,335	\$474,211	\$1,103,363	\$478,998	\$304,607	\$135,597	\$3,317,111
Additions	-	1,242	20,925	60,212	4,484	194,611	281,474
Disposals	-	-	(41,368)	(17,052)	-	-	(58,420)
Reclassification	-	1,437	54,981	145,354	25,548	(227,320)	-
Transfer to expenses	-	-	-	-	-	(2,474)	(2,474)
Transferred to prepayments	-	-	-	-	-	(221)	(221)
Return and discount	-	-	-	-	(908)	(45,548)	(46,456)
Effect of foreign currency exchange difference	-	(4,348)	(24,282)	(10,976)	(4,855)	(180)	(44,641)
Balance at December 31, 2023	\$820,335	\$472,542	\$1,113,619	\$656,536	\$328,876	\$54,465	\$3,446,373
Accumulated depreciation and impairment
Balance at January 1, 2023	\$ -	\$256,366	\$369,659	\$255,384	\$162,288	\$ -	\$1,043,697
Depreciation	-	13,937	189,689	66,441	35,142	-	305,209
Disposals	-	-	(36,421)	(16,980)	-	-	(53,401)
Reclassification	-	-	(64,769)	64,769	-	-	-
Effect of foreign currency exchange difference	-	(2,722)	(9,384)	(5,767)	(2,723)	-	(20,596)
Balance at December 31, 2023	\$ -	\$267,581	\$448,774	\$363,847	\$194,707	\$ -	\$1,274,909

	Land	Buildings	Machinery and Equipment	Miscellaneous Equipment	Leasehold Improvement	Equipment to be Inspected and Construction in Progress	Total
Cost
Balance at January 1, 2022	\$802,249	\$455,152	\$925,039	\$417,203	\$204,397	\$77,374	\$2,881,414
Additions	-	1,435	34,012	28,203	82,232	319,150	465,032
Disposals	-	(4,031)	(38,489)	(22,146)	-	-	(64,666)
Reclassification	18,086	17,587	155,250	48,459	16,030	(255,412)	-
Transfer to expenses	-	-	-	-	-	(1,715)	(1,715)
Transferred to other noncurrent assets	-	-	-	-	-	(4,216)	(4,216)
Effect of foreign currency exchange difference	-	4,068	27,551	7,279	1,948	416	41,262
Balance at December 31, 2022	\$820,335	\$474,211	\$1,103,363	\$478,998	\$304,607	\$135,597	\$3,317,111
Accumulated Depreciation and Impairment
Balance at January 1, 2022	\$ -	\$242,547	\$224,741	\$216,904	\$137,944	\$ -	\$822,136
Depreciation	-	15,166	176,929	53,760	22,873	-	268,728
Disposals	-	(3,628)	(37,424)	(21,305)	-	-	(62,357)
Reclassification	-	-	(595)	595	-	-	-
Decrease in this period	-	-	(223)	-	-	-	(223)
Effect of foreign currency exchange difference	-	2,281	6,231	5,430	1,471	-	15,413
Balance at December 31, 2022	\$ -	\$256,366	\$369,659	\$255,384	\$162,288	\$ -	\$1,043,697

A. The details of interest capitalized: None.

• B. The Group did not assess the impairment because there is no sign of impairment for the year ended December 31, 2023.
• C. Property, plant and equipment pledged for the borrowings: Please refer to Note 8.
• D. Reconciliations of current additions and the acquisition of property, plant and equipment in statement of cash flows were as follows:

	Year Ended December 31
Item	2023	2022
Acquisition of property, plant and equipment	\$235,018	\$465,032
Decrease (increase) in equipment payable	62,627	(71,044)
Cash paid for acquisition of property, plant and equipment	\$297,645	\$393,988

(10) Lease agreement

A. Right-of-use assets

	December 31
Item	2022	2022
Land use right	\$397,081	\$393,707
Land and building	449,162	397,582
Other equipment	26,456	29,663
Total cost	\$872,699	\$820,952
Less: Accumulated depreciation and impairment	(281,985)	(227,075)
Net	\$590,714	\$593,877

Cost	Land Use Right	Land and Buildings	Machinery and Equipment	Other Equipment	Total
Balance at January 1, 2023	\$393,707	\$397,582	\$ -	\$29,663	\$820,952
Additions	-	90,550	-	7,071	97,621
Disposals	-	(6,072)	-	(406)	(6,478)
Derecognition	-	(29,308)	-	(9,904)	(39,212)
Effect of foreign currency exchange difference	3,374	(3,590)	-	32	(184)
Balance at December 31, 2023	\$397,081	\$449,162	\$ -	\$26,456	\$872,699
Accumulated Depreciation and Impairment
Balance at January 1, 2023	\$14,093	\$196,060	\$ -	\$16,922	\$227,075
Depreciation	5,723	82,677	-	7,782	96,182
Derecognition	-	(29,308)	-	(9,904)	(39,212)
Effect of foreign currency exchange difference	(1)	(2,053)	-	(6)	(2,060)
Balance at December 31, 2023	\$19,815	\$247,376	\$ -	\$14,794	\$281,985

Land Use Right	Land and Buildings	Machinery and Equipment	Other Equipment	Total
\$392,043	\$474,757	\$53,390	\$24,437	\$944,627
-	37,452	-	6,092	43,544
-	(88,683)	(36,017)	-	(124,700)
-	(36,415)	(18,557)	(1,244)	(56,216)
1,664	10,471	1,184	378	13,697
\$393,707	\$397,582	\$ -	\$29,663	\$820,952

\$8,432	\$146,853	\$15,523	\$11,372	\$182,180
5,619	81,525	2,691	6,632	96,467
-	(36,415)	(18,557)	(1,244)	(56,216)
42	4,097	343	162	4,644
\$14,093	\$196,060	\$ -	\$16,922	\$227,075

B. Lease liabilities

	December 31
Item	2023	2022
Carrying amount of lease liabilities
- current	\$82,727	\$80,951
- noncurrent	\$146,042	\$150,425

Ranges of discount rates for lease liabilities are as follows:

	December 31
Item	2023	2022
Land and buildings	0.63%-7.21%	0.63%-6.87%
Machinery and equipment	-	3.13%-3.65%
Other equipment	0.72%-4.60%	0.66%-4.60%

Please refer to Note 12(2) for lease liabilities with repayment periods.

C. Material lease-in activities and terms

The Group leased some land and buildings, etc. as factory, with the lease terms of 3 to 75 years. There is no sign of impairment of right-of-use assets as of December 31, 2023. Therefore, the Group didn't assess the impairment.

• D. Sublet: None.
• E. Other lease information:
• a. Please refer to Note 6(9) for the agreement to lease investment properties under operating lease.
• b. The current lease relevant expense information is as follows:

	Years Ended December 31
Item	2023	2022
Short-term lease expense	\$12,105	\$17,214
Low-value asset lease expense	\$312	\$266
Variable lease payments that excluded in the measurement of lease liabilities	\$ -	\$ -
Total cash outflow for leases (Note)	(\$106,167)	(\$92,921)

(Note): Including principle paid for current lease liabilities.

		December 31
Item		2023	2022
Land		\$77,109	\$77,109
Buildings		40,062	40,062
Total cost		\$117,171	\$117,171
Less: Accumulated depreciation	and	(32,433)	(32,065)
impairment
Net		\$84,738	\$85,106
Cost	Land	Buildings	Total
Balance at January 1, 2023	\$77,109	\$40,062	\$117,171
Additions	-	-	-
Balance at December 31, 2023	\$77,109	\$40,062	\$117,171
Accumulated Depreciation and Impairment
Balance at January 1, 2023	\$ -	\$32,065	\$32,065
Depreciation	-	368	368
Balance at December 31, 2023	\$ -	\$32,433	\$32,433
Cost	Land	Buildings	Total
Balance at January 1, 2022	\$77,109	\$40,062	\$117,171
Additions	-	-	-
Balance at December 31, 2022	\$77,109	\$40,062	\$117,171
Accumulated Depreciation and Impairment
Balance at January 1, 2022	\$ -	\$31,682	\$31,682
Depreciation	-	383	383
Balance at December 31, 2022	\$ -	\$32,065	\$32,065

(11) Investment properties, net

A. Rental income and direct operating expenses of investment properties:

	Year Ended December 31
Item	2023	2022
Rental income of investment properties	\$1,921	\$1,791
Direct operating expense incurred for the investment properties with current rent income	\$637	\$654

		December 31
	2023	2022
Year 1	\$1,921	\$1,921
Year 2	1,921	1,921
Year 3	1,750	1,921
Year 4	1,750	1,750
Year 5	-	1,750
Over 5 years	-	-
Total	\$7,342	\$9,263

B. The maturity analysis of operating lease payments receivable for investment properties is as follows:

• C. Investment properties are depreciated on a straight-line basis over their estimated useful life of 10 to 57 years.
• D. The fair values of investment properties held by the Group were 168,677 thousand and \$160,060 thousand as of December 31, 2023 and 2022, respectively. The fair value determination was performed by independent qualified professional appraisers. The valuation was based on the comparison method, and the fair value was measured by using Level 3 inputs. Please refer to Note 12(3).
• E. The accumulated impairment of investment properties were \$0 thousand as of December 31, 2023 and 2022, respectively.
• F. The Group had no investment properties pledged to others.

(12) Intangible assets

	December 31
Item	2023	2022
Trademark	\$8,447	\$8,448
Computer software	38,693	37,465
Total cost	\$47,140	\$45,913
Less: Accumulated amortization	(23,184)	(18,860)
Net	\$23,956	\$27,053

Cost	Trademark	Computer Software	Total
Balance at January 1, 2023	\$8,448	\$37,465	\$45,913
Additions	-	14,615	14,615
Transferred from property,plant	-	197	197
and equipment
Derecognition	-	(13,414)	(13,414)
Effect of foreign exchange	(1)	(170)	(171)
Difference
Balance at December 31, 2023	\$8,447	\$38,693	\$47,140
Accumulated amortization
and impairment
Balance at January 1, 2023	\$ -	\$18,860	\$18,860
Amortization	-	17,852	17,852
Derecognition	-	(13,414)	(13,414)
Effect of foreign exchange	-	(114)	(114)
Difference
Balance at December 31, 2023	\$ -	\$23,184	\$23,184
Cost	Trademark	Computer Software	Total
Balance at January 1, 2022	\$7,923	\$30,507	\$38,430
Additions	-	17,404	17,404
Derecognition	-	(10,567)	(10,567)
Effect of foreign exchange	525	121	646
difference
Balance at December 31, 2022	\$8,448	\$37,465	\$45,913
Accumulated amortization
and impairment
Balance at January 1, 2022	\$ -	\$13,944	\$13,944
Amortization	-	15,444	15,444
Derecognition	-	(10,567)	(10,567)
Effect of foreign exchange	-	39	39
difference
Balance at December 31, 2022	\$ -	\$18,860	\$18,860

(13)Short-term loans

	December 31, 2023
Borrowings Nature	Amount	Interest
Unsecured loan	\$457,581	0.50%-3.30%
	December 31, 2022
Borrowings Nature	Amount	Interest
Unsecured loan	\$1,287,516	0.75%-5.03%
(14) Other payables
	December 31
Item	2023	2022
Accrued payroll	\$352,857	\$362,131
Service fee payable	51,659	10,384
R & D payable	50,003	59,479
Bonus to employees and remuneration	49,800	40,087
to directors
Equipment payable	35,150	97,777
Others	402,809	508,889
Total	\$942,278	\$1,078,747

(15) Provisions - current

	December 31
Item	2023	2022
Employee benefits	\$52,467	\$54,643

	Year Ended December 31
Item	2023	2022
Beginning balance	\$54,643	\$40,942
Provisions recognized	2,785	13,060
Reversing balances	(4,668)	-
Effect of foreign exchange difference	(293)	641
Ending balance	\$52,467	\$54,643

Provision for employee benefits represents vested short-term service leave entitlements accrued.

(16) Bonds Payable

	December 31
Item	2023	2022
The third unsecured convertible domestic bonds	\$ -	\$ -
Subtotal	-	-
Less: discounts on bonds payable	-	-
Net	\$ -	\$ -

A. Third unsecured convertible domestic bonds:

• a. The Company issued the third unsecured domestic convertible bonds, which was approved by the regulatory authority on April 21, 2023. The total issuance amount is \$1,200,000 thousand and it is zero coupon bonds with the maturity of 5 years from May 24, 2023 to May 24, 2028.
• b. The conversion price of the bonds is set up based on the pricing model in the terms of the bonds. The conversion price at the time of issuance was \$54.90. As of September 30, 2023, the conversion price adjusted to \$53.30 based on the pricing model. As of December 31, 2023, all the shares have been converted.
• c. Under the terms of the bonds, all bonds redeemed, matured and converted are retired and not to be re-issued; all rights and obligation attached to the bonds are also extinguished.
• d. In accordance with the conversion provisions, the bond holders may request the Company to redeem the convertible bonds two years at the bond redemption base date. The company shall send the "Bond Redemption Notice" to the bondholders 30 days before the sell-back base date. The bond holders have the right to require the Company to redeem all of the bonds in cash with an interest calculated " 101.0025% of the face value of the bond after two years " the real rate of return is 0.5% "".
• e. After the following events occur during the period from the date after three months of the bonds issued to 40 days before the maturity date, the Company may redeem the outstanding convertible bonds in cash: (i) the closing price of the Company's common shares is above the then conversion price by 30% for 30 consecutive trading days, or (ii) the outstanding balance of the bonds is less than 10% of total initial issue amount.
• f. As of December 31, 2023, the Company redeemed the issued convertible bonds from open market by own funds at principal amount to \$0 thousand.

	December 31
Item	2023	2022
Unsecured loans	\$395,706	\$407,073
Less: portion due within one year	(182,775)	(120,372)
Long-term loans	\$212,931	\$286,701
Interest rates	0.75%-7.49%	0.75%-5.70%

(17) Long-term loans and current portion of long-term loans

Refer to Note 8 for assets pledged as collateral for long-term loans.

(18)Pension

• A. Defined contribution plans
• a.The plan under the Labor Pension Act (the "Act") is deemed a defined contribution plan. Pursuant to the Group has made monthly contributions equal to 6% of each employee's monthly salary to employees' pension accounts.
• b.The employees of the Group's subsidiaries are members of a state-managed retirement benefit plan operated by local government. The subsidiary is required to contribute amounts calculated at a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions to the fund.
• c.The total expenses recognized in the consolidated statement of comprehensive income were \$171,605 thousand and \$189,674 thousand, representing the contributions payable to these plans by the Group at the rates specified in the plans for the years ended December 31, 2023 and 2022, respectively.
• B. Defined benefit plans
• a.The Company have defined benefit plans under the Labor Standards Law that provide benefits based on an employee's length of service and average monthly salary for the six-month period prior to retirement. The aforementioned companies contribute an amount equal to 2% of salaries paid each month to their respective pension funds (the Funds), which are administered by the Labor Pension Fund Supervisory Committee (the Committee) and deposited in the Committee's name in the Bank of Taiwan. Before the end of each year, the Company assesses the balance in the Funds. If the amount of the balance in the Funds is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the companies are required to fund the difference in one appropriation that should be made before the end of March of the next year. The Funds are operated and managed by the government's designated authorities; as such, the Group does not have any right to intervene in the investments of the Funds.

b.The amounts arising from the defined benefit obligation of the Group in the consolidated balance sheets were as follows:

	December 31
Item	2023	2022
Present value of defined benefit obligation	\$74,208	\$73,143
Fair value of plan assets	(45,477)	(37,476)
Net defined benefit liabilities	\$28,731	\$35,667

A. Movements of the net defined benefit liabilities were as follows:

	Year Ended December 31, 2023
Item	Present Value of Defined Benefit Obligation	Fair Value of Plan Assets	Net Defined Benefit Liabilities
Balance at January 1	\$73,143	(\$37,476)	\$35,667
Service cost
Current service cost	-	-	-
Interest expense (income)	1,006	(571)	435
Past service cost	-	-	-
Settlement loss (income)	-	-	-
Recognized in profit or loss	\$1,006	(\$571)	\$435
Remeasurement
Return on plan assets (excluding	\$ -	(\$230)	(\$230)
amounts included in net interest expense)
Actuarial loss (gain) -
Changes in demographics	-	-	-
assumptions
Changes in financial assumptions	-	-	-
Experience adjustments	59	-	59
Recognized in other comprehensive income	\$59	(\$230)	(\$171)
Contributions from the employer	\$ -	(\$7,200)	(\$7,200)
Benefits paid from plan assets	-	-	-
Balance at December 31	\$74,208	\$45,477	\$28,731

		Year Ended December 31, 2022
Item	Present Value of Defined Benefit Obligation	Fair Value of Plan Assets	Net Defined Benefit Liabilities
Balance at January 1	\$83,090	(\$28,043)	\$55,047
Service cost
Current service cost	-	-	-
Interest expense (income)	415	(155)	260
Past service cost	-	-	-
Settlement loss (income)	-	-	-
Recognized in profit or loss	\$415	(\$155)	\$260
Remeasurement
Return on plan assets (excluding	\$ -	(\$2,278)	(\$2,278)
amounts included in net interest expense)
Actuarial loss (gain) -
Changes in demographics	-	-	-
assumptions
Changes in financial assumptions	(8,081)	-	(8,081)
Experience adjustments	(2,281)	-	(2,281)
Recognized in other comprehensive income	(\$10,362)	(\$2,278)	(\$12,640)
Contributions from the employer	\$ -	(\$7,000)	(\$7,000)
Benefits paid from plan assets	-	-	-
Balance at December 31	\$73,143	\$37,476	\$35,667

• D. Through the defined benefit plans under the Labor Standards Law, the Group is exposed to the following risks:
• a. Investment risk

The pension funds are invested in equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the government's designated authorities or under the mandated management. However, under the Labor Standards Law, the rate of return on assets shall not be less than the average interest rate on a two-year time deposit published by the local banks and the government is responsible for any shortfall in the event that the rate of return is less than the required rate of return.

b.Interest risk

A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the debt investments of the plan assets.

c.Salary risk

The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

E. The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The principal assumptions of the actuarial valuation were as follows:

	Measurement Date
	December 31, 2023	December 31, 2022
Discount rate	1.375%	1.375%
Future salary increase rate	2%	2%
The weighted average duration of the	11.3 years	11.7 years
defined benefit obligation

• (a) Assumptions regarding future mortality experience are set based on actuarial valuation in accordance with the 6th version of Taiwan Standard Ordinary Experience Mortality Tables.
• (b) If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

	December 31
Item	2023	2022
Discount Rate
0.25% higher	(\$2,055)	(\$2,110)
0.25% lower	\$2,134	\$2,195
Expected rates of salary increase
0.25% higher	\$2,081	\$2,140
0.25% lower	(\$2,015)	(\$2,068)

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

F. The Group expects to make contributions of \$7,200 thousand to the defined benefit plans for the year ended December 31, 2024.

(19) Share capital

A. Movements in the number of the Group's ordinary shares outstanding were as follows:

Year Ended December 31, 2023
Shares (in thousands)	Amount
250,930	\$2,509,297
-	-
21,595	215,946
272,525	\$2,725,243

	Year Ended December 31, 2022
Item	Shares (in thousands)	Amount
Balance at January 1	250,930	\$2,509,297
Capital increase in cash	-	-
Capitalization of retained earnings	-	-
Balance at December 31	250,930	\$2,509,297

• B. As of December 31, 2022, the authorized capital are \$5,000,000 thousand, consisting of 500,000 thousand shares.
• C. The Company's corporate bonds have been converted to ordinary stock shares totaling \$1,200,000 thousand between August and December 2023, and the numbers of conversion were 22,514 thousand shares. As of December 31, 2023, while 21,595 thousand shares have completed the registration and have been converted to stock capital totaling 215,946 thousand, 919 thousand shares were not yet completed the registration, and \$9,194 thousand was recorded as bond conversion entitlement certificates.
• D. While 9,194 thousand was recorded as bond conversion entitlement certificates have completed the registration in February 2024.

(20) Capital surplus

	December 31
Item	2023	2022
From merger	\$18,227	\$18,227
From convertible bonds	1,477,900	326,015
Treasury share transactions	21,464	21,464
Reorganization	1,050	1,050
Differences between considerations and carrying	147	147
amounts of subsidiaries acquired or disposed
Total	\$1,518,788	\$366,903

Under the Company Act, the capital surplus generated from the excess of the issuance price over the par value of capital stock and donations can be used to offset deficit or may be distributed as stock dividends or in cash. Under the regulations of the Security Exchange Law, the maximum amount transferred from the foregoing capital surplus to the Company's capital per year shall not be over 10% of the Company's paid-in capital. Capital surplus can't be used to offset deficit unless legal reserve is insufficient. The capital surplus from long-term investments may not be used for any purpose.

(21)Retained earnings and dividend policy

(1) In accordance with the dividend policy as set forth in the Company's Articles of Incorporation, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the regulations, and the remainder plus prior year's unappropriated earnings will be recommended by the board of directors and approved through the shareholders' meeting.

In consideration of its operation and capital expenditure demands, the Company stipulates appropriate dividend distribution ratio, and proposes for approval in the shareholders' meeting. However, at least 20% of total dividends should be distributed in cash.

• (2) Legal reserve may be used to offset a deficit, and be transferred to capital or distributed in cash. However, legal reserve can be transferred to capital or distributed in cash only when the legal reserve has exceeded 25% of the Company's paid-in capital.
• (3) Special reserve

Item	December 31, 2023	December 31, 2022
Reserve for the debit balance of other equities	\$178,602	\$216,203
Reserve for first-time adoption of IFRS	79,155	79,155
Total	\$257,757	\$295,358

• A. While earning distribution, the earnings can be distributed after appropriation of the equivalent amount of the debit balance of the other equities of the balance sheet.
• B. Under Rule No.1010012865 issued by the FSC for first-time adoption of IFRS, the special reserve can be reversed while usage, disposal and reclassification of related assets.
• (4) The appropriation of 2022 and 2021 earnings have been approved by at the shareholders' meeting held in June 2023 and 2022, respectively. Details were summarized below:

	Amount		Dividends Per Share
Item	2022	2021	2022	2021
Legal reserve	\$109,921	\$42,815
Special reserve	(37,601)	53,263
Cash dividends	652,417	301,116	2.6	1.2
Total	\$724,737	\$397,194

(5) The appropriation of 2023 earnings had been proposed by the board of directors on March 7, 2024. Details were summarized below:

Item	Amount	Dividends Per Share
Legal reserve	\$133,407
Special reserve	42,428
Cash dividends	957,053	3.5

• A. The appropriation of earnings for 2023 are to be presented for approval in the shareholders' meeting to be held in June 2024.
• B. In the event of repurchase of the Company's shares, transfer, conversion or annulment of treasury stocks, and exercise of employees' stock options, leading to a change in the number of outstanding shares and a consequent change in dividend yield, it is proposed that the chairman is authorized by the Board of Directors to duly adjust stocks and cash payout rates.
• (6) Information on the earnings appropriation proposed by the Company's Board of Directors and approved by the Company's shareholders is available on the Market Observation Post System website of the Taiwan Stock Exchange.

(22)Others equity

Item	Exchange differences on translation of foreign financial statements	Unrealized gain (loss) on financial asset at fair value through other comprehensive income	Total
Balance, January 1, 2023	(\$257,757)	\$ -	(\$257,757)
Share of subsidiaries, associates and joint ventures accounted for using equity method	(47,491)	-	(47,491)
Unrealized gain (loss) on financial assets at fair value through other comprehensive income	-	5,063	5,063
Balance, December 31, 2023	(\$305,248)	\$5,063	(\$300,185)

Item	differences on translation of foreign financial statements	on financial asset at fair value through other comprehensive income		Total
Balance, January 1, 2022	(\$295,358)	\$	-	(\$295,358)
Share of subsidiaries, associates and joint ventures accounted for using equity method Unrealized gain (loss) on financial assets at fair value through other comprehensive income	37,601 -		- -	37,601 -
Balance, December 31, 2022	(\$257,757)	\$	-	(\$257,757)

(23)Operating revenues

	Year Ended December 31
Item	2023	2022
Revenue from contracts with customers
Total revenues	\$13,078,143	\$14,148,315
Sales returns	(70,526)	(45,501)
Sales discount	(92,932)	(39,506)
Net	\$12,914,685	\$14,063,308

A. Explain of contract revenue

Sales of fans and other related goods are mainly to system manufacturers and distributors. Please refer to Note 14 for the main sale areas.

B. The Group's timing of revenue recognition is goods transferred at a certain point of time.

C. Contract balances

The Group recognizes the receivables, contract assets and contract liabilities related to contract revenue as follows:

	Year Ended December 31
Item	2023	2022 \$3,414,152
Receivables	\$3,079,399
Contract assets	-	-
Total	\$3,079,399	\$3,414,152
Contract liabilities - current	\$109,540	\$176,164

a. Significant changes in contract assets and contract liabilities

The changes in the contract assets and contract liabilities primarily result from the timing difference between the satisfaction of performance obligation and the customer's payment, and there is no other significant change.

b. Amount from previous period's satisfied performance obligations and beginning contract liabilities recognized in the current period as income were as follows:

	Year Ended December 31
Revenue in the current period	2023	2022
From beginning contract liabilities	\$176,164	\$110,411
From previous period's satisfied performance obligations	\$ -	\$ -

(24)Labor cost, depreciation and amortization

	Year Ended December 31, 2023
Item	Operating cost	Operating expenses	Total
Labor cost
Salaries	\$1,109,660	\$878,068	\$1,987,728
Insurance	106,638	79,690	186,328
Pension	127,846	44,194	172,040
Others	498,943	66,775	565,718
Depreciation	309,478	92,281	401,759
Amortization	81,889	50,605	132,494
Total	\$2,234,454	\$1,211,613	\$3,446,067

		Year Ended December 31, 2022
Item	Operating cost	Operating expenses	Total
Labor cost
Salaries	\$1,439,609	\$822,618	\$2,262,227
Insurance	119,947	72,793	192,740
Pension	147,703	42,231	189,934
Others	841,383	73,771	915,154
Depreciation	269,566	96,012	365,578
Amortization	103,102	43,985	147,087
Total	\$2,921,310	\$1,151,410	\$4,072,720

• 1. The Company accrued employees' compensation and remuneration to directors at the rates not less than 2% and not higher than 5% of net income before income tax, employees' compensation and remuneration to directors during the period. If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.
• 1. The employees' compensation and remuneration to directors for the years ended December 31, 2023 and 2022 had been approved by the Company's Board of Directors meeting held on March 7, 2024 and March 9, 2023, respectively, and the relevant amounts recognized in the consolidated financial statements were as follows:

	Year ended December 31
		2023		2022
	Employees' compensation	Remuneration to directors	Employees' compensation	Remuneration to directors
Resolution amount of allotment	\$39,800	\$10,000	\$32,000	\$8,000
Recognized in the annual financial statements	39,800	10,000	32,000	8,000
Difference	\$ -	\$ -	\$ -	\$ -

The above mentioned employees' compensation will be paid by cash.

1. Information about the appropriation of employees' compensation and directors' remuneration by the Company as proposed by the Board of Directors and resolved by the shareholders will be posted in the "Market Observation Post System" at the website of the Taiwan Stock Exchange.

(25)Interest income

		Year ended December 31
Item	2023	2022
Interest on bank deposits	\$91,929	\$8,723
Interest on early payment	3,773	5,386
Others	73	483
Total	\$95,775	\$14,592

(26)Other income

	Year ended December 31
Item	2023	2022
Rental income	\$1,974	\$1,839
Others - sample sales, etc.	38,302	42,798
Others - subsidy	36,834	34,063
Others	79,171	76,612
Total	\$156,281	\$155,312

(27)Other gains and losses

	Year ended December 31
Item	2023	2022
Net loss on financial instruments at FVTPL	\$8,229	\$78
Loss on disposal of property, plant and equipment	(4,952)	(2,195)
Net currency exchange gains	54,046	175,794
Gain on disposal of investments	1,806	2,566
Others	(44,453)	3,647
Total	\$14,676	\$179,890

(28)Finance costs

	Year ended December 31
Item	2023	2022
Interest on loans	\$34,550	\$36,389
Interest on lease liabilities	8,301	8,011
Interest of convertible bonds	4,144	-
Less: capitalized amount for qualified assets	-	-
Carrying amount	\$46,995	\$44,400

(29)Income tax

A. The major components of tax expense were as follows:

	Year ended December 31
Current income tax	2023	2022
Current tax expense	\$317,298	\$291,119
Additional tax on unappropriated earnings	17,639	-
Adjustments in tax of prior periods	(44,669)	(45,370)
Total	\$290,268	\$245,749
Deferred income tax
The origination and reversal of temporary differences	\$127,386	\$91,033
Total	\$127,386	\$91,033
Income tax expense	\$417,654	\$336,782

B. Income tax expense recognized in other comprehensive income was as follows:

	Year ended December 31
Item	2023	2022
Exchange differences on translation of foreign operations	(\$11,872)	\$9,399
Remeasurement of defined benefit plans	34	2,528
Total	(\$11,838)	\$11,927

C. Reconciliation of income before income tax and income tax expense recognized in profit or loss was as follows:

	Year Ended December 31
Item	2023	2022
Income before income tax	\$1,751,588	\$1,425,877
Income tax expense at the statutory rate	\$554,252	\$463,329
Tax effect of adjusting items:
Other adjustments	(236,954)	(172,210)
Additional tax on unappropriated earnings	17,639	-
Adjustments for prior year's tax adjustments	(44,669)	(45,370)
Deferred income tax expense
Temporary differences	127,386	91,033
Income tax expense recognized in profit or loss	\$417,654	\$336,782

The applicable tax rate used by the Group is 20%. In addition, the tax rate applicable to unappropriated earning is 5%. Tax rates used by other group entities operating in other jurisdictions are based on the tax laws in those jurisdictions.

According to the amendments to the Statute for Industrial Innovation announced in

July 2019, the amounts of unappropriated earnings in 2018 and thereafter that are reinvested in the construction or purchase of certain assets or technologies are allowed as deduction when computing the income tax on unappropriated earnings. When calculating the tax on unappropriated earnings, the Group has already deducted the amount of the unappropriated earnings that has been reinvested as capital expenditures. When calculating the tax on unappropriated earnings by the Group in 2023, already deducted the unappropriated earnings in 2022 amount that has been reinvested in capital expenditure.

D. Amounts of deferred tax assets or liabilities as a result of temporary difference, loss carryforward and investment tax credit were as follows:

	Year Ended December 31, 2023
	Balance, Beginning of Year	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Effect of Exchange Rate Changes	Balance, End of Year
Deferred income tax assets:
Temporary differences
Net defined benefit liability	\$7,134	(\$1,353)	(\$34)	\$ -	\$5,747
Unrealized loss on inventories	39,627	(24,560)	-	(130)	14,937
Unused compensated absences	3,576	181	-	-	3,757
Unrealized exchange loss	6,507	12,131	-	-	18,638
Unrealized profit on	47,821	(1,893)	-	-	45,928
Intercompany sales
Others	7,926	(2,606)	-	7	5,327
Subtotal	\$112,591	\$(18,100)	(\$34)	(\$123)	\$94,334
Deferred income tax liabilities:
Temporary differences
Gain on foreign investment	\$121,315	\$86,113	(\$11,872)	\$ -	\$195,556
under the equity method
Depreciation life difference	69,640	23,173	-	(1,639)	91,174
Subtotal	\$190,955	\$109,286	(\$11,872	(\$1,639)	\$286,730
Total	(\$78,364)	(\$127,386)	\$11,838	\$1,516	(\$192,396)

	Year Ended December 31, 2022
	Balance, Beginning of Year	Effect of Tax Rate Change	Recognized in Other Comprehensive Income	Effect of Exchange Rate Changes	Balance, End of Year
Deferred income tax assets:
Temporary differences
Net defined benefit liability	\$11,010	(\$1,348)	(\$2,528)	\$ -	\$7,134
Unrealized loss on inventories	12,121	27,489	-	17	39,627
Unused compensated absences	2,854	722	-	-	3,576
Unrealized exchange loss	-	6,507	-	-	6,507
Unrealized profit on	26,775	21,046	-	-	47,821
Intercompany sales
Others	3,017	4,518	-	391	7,926
Investment tax credit	4,364	(4,461)	-	97	-
Subtotal	\$60,141	\$54,473	(\$2,528)	\$505	\$112,591
Deferred income tax liabilities:
Temporary differences
Gain on foreign investment	\$34,476	\$77,440	\$9,399	\$ -	\$121,315
under the equity method
Unrealized exchange gain	2,022	(2,022)	-	-	-
Depreciation life difference	-	70,088	-	(448)	69,640
Subtotal	\$36,498	\$145,506	\$9,399	(\$448)	\$190,955
Total	\$23,643	(\$91,033)	(\$11,927)	\$953	(\$78,364)

E. Items with no deferred tax assets recognized:

	December 31
Item	2023	2022
Deductible temporary differences	\$98,420	\$85,223

F. The tax authorities have ratified Company's income tax returns through Year 2021.

(30)Other comprehensive income (loss)

	Year Ended December 31, 2023
Item	Other Comprehensive Income (Loss), Before Tax	Income Tax Benefit (Expense)	Other Comprehensive Income (Loss), Net of Tax
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined	\$171	(\$34)	\$137
benefit obligation
Unrealized gain (loss) on	5,063	-	5,063
financial assets at fair value
through other comprehensive
income
Subtotal	\$5,234	(\$34)	\$5,200

Items that may be reclassified
subsequently to profit or loss:
Exchange differences arising	(\$59,363)	\$11,872	(\$47,491)
on translation of foreign
operations
Subtotal	(\$59,363)	\$11,872	(\$47,491)
Recognized in other	(\$54,129)	\$11,838	(\$42,291)
comprehensive income (loss)

	Year Ended December 31, 2022
Item	Other Comprehensive Income (Loss), Before Tax	Income Tax Benefit (Expense)	Other Comprehensive Income (Loss), Net of Tax
Items that will not be reclassified
subsequently to profit or loss:
Remeasurement of defined	\$12,640	(\$2,528)	\$10,112
benefit obligation
Unrealized gain (loss) on	-	-	-
financial assets at fair value
through other comprehensive
income
Subtotal	\$12,640	(\$2,528)	\$10,112
Items that may be reclassified
subsequently to profit or loss:
Exchange differences arising	\$47,000	(\$9,399)	\$37,601
on translation of foreign
operations
Subtotal	\$47,000	(\$9,399)	\$37,601
Recognized in other	\$59,640	(\$11,927)	\$47,713
comprehensive income (loss)

(28)Earnings per share

	Year Ended December 31
Item	2022	2022
(1) Basic earnings per share:
Net income attributable to owners of the parent	\$1,333,934	\$1,089,095
Weighted average shares outstanding	258,369	250,930
(in thousands)
Basic earnings per share (after tax)	\$5.16	\$4.34

(2) Diluted earnings per share:
Net income attributable to owners of the parent	\$1,333,934	\$1,089,095
Interest of convertible bonds	3,315	-
Net income used in computation of diluted	\$1,337,249	\$1,089,095
earnings per share
Weighted average shares outstanding	\$258,369	\$250,930
(in thousands)
Convertible bonds (in thousands)	4,795
Impact on employees' compensation (Note)	370	749
Weighted average number of ordinary shares	\$263,534	\$251,679
outstanding after dilution (in thousands)
Diluted earnings per share (after tax)	\$5.07	\$4.33

(Note) Since the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

7. RELATED PARTY TRANSACTIONS

(1) Parent and ultimate controlling party:

The Group has no parent and ultimate controlling party.

(2) Related party name and category:

Related Party Name	Related Party Category
Guang Sheng Investment Corporation	Other related party
Shehng-Yuan Children Development and	Other related party
Adult Support Services Center
Yo Yuan Investment Corporation	Other related party
Suzhou Shengyixing Heat Transfer Technology Co., Ltd.	Associates
(3) Significant transactions with related parties: A. Sales:

	Year Ended December 31
Related Party Category	2023	2022
Associates	\$113	\$1,686

Selling prices with the related parties are set by the Company and are equivalent to those with ordinary customers. Collection period was 2 to 4 months. Collection can be delayed when agreed on by both parties.

B. Purchase:

	Year Ended December 31
Related Party Category	2023	2022
Associates	\$96,774	\$95,764

Above mentioned Purchase prices of the related parties are equivalent to those of those of other manufacturer. Payment term was 3 to 4 months. However, both parties can agree to advance the payment.

• C. Contract assets: None.
• D. Contract liabilities: None.

E. Balance of receivables (excluding lending to related parties):

		December 31
Item	Related Party Category	2023	2022
Account receivable	Associates	\$ -	\$1,893
Other receivable	Associates	\$ -	\$49

F. Balance of payables (excluding borrowing from related parties):

		December 31
Item	Related Party Category	2023	2022
Account payable	Associates	\$18,733	\$13,420
Other payables	Associates	\$103	\$246

G. Advance receipts: None.

H. Property transactions: None.

I. Lessee arrangements:

		December 31
Item	Related Party Category	2023	2022
Refundable deposits	Other related parties	\$26	\$26
Lease liabilities - current	Other related parties	\$129	\$154
Lease liabilities - noncurrent	Other related parties	\$ -	\$91

		Year Ended December 31
Item	Related Party Category	2023	2022
Interest expense	Other related parties	\$2

Above lease terms are based on the contract, and rent is paid monthly.

J. Rent arrangements: None.

K. Financing activities - lending to related parties:

		Year Ended December 31
Item	Related Party Category	2023	2022
Other receivable	Associates	\$ -	\$13,229
a. Interest income
		Year Ended December 31
	Related Party Category	2023	2022
Associates		\$27	\$468
Interest rates		4.35%	4.35%
L. N. Others:	Financing activities - borrowing from related parties : None. M.Guarantee for related parties: None. a. Guarantee deposits:
		December 31
	Related Party Category	2023	2022
Other related parties		\$55	\$55
	b. Miscellaneous income:
		Year Ended December 31
	Related Party Category	2023	2022
Other related parties		\$194	\$194
	Miscellaneous income is mainly rent income. Rent prices are according to the contract agreement and received monthly. c. Miscellaneous expenses:
		Year Ended December 31
	Related Party Category	2023	2022
Associates		\$873	\$1,142

Miscellaneous expenses are R&D.

(4) Key management compensation

	Year Ended December 31
Related Party Category	2023	2022
Salaries and other short-term employee benefits	\$79,441	\$75,775
Post-employment benefits	-	-
Other long-term employee benefits	-	-
Termination benefits	-	-
Share-based payments	-	-
Total	\$79,441	\$75,775

8. PLEDGED ASSETS

	Year Ended December 31
Item	2023	2022
Property, plant and equipment (net)	\$496,858	\$496,858

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

(1) As of December 31, 2023 and 2022, the Group issued guarantee notes for bank loans amounting to \$3,404,317 thousand and \$3,247,560 thousand, respectively.

(2) The unused letter of credit as of December 31, 2023 and 2022 consisted of the following:

(In thousands)

	December 31
Item	2023	2022
L/C Amount	USD 815	USD 3,906

(3) As of December 31, 2022 and 2021, the note endorsement for material purchase were as follows:

		(In thousands)
	December 31
Item	2023	2022
Bank acceptance	USD 1,239	USD 2,114

• (4) As of December 31, 2023 and 2022, the Group endorsed guarantees for others. Please refer to Note 13 for the information.
• (5) Statement of lawsuit

SIAE Microelettronica S.P.A. filed a lawsuit against the Group for the infringement on April 8, 2020. The Group has appointed the attorney to proceed with the litigation, and the result of the first-instance judgment declared by Kaohsiung District Court in Taiwan on June 30, 2022 is that "The plaintiff's claim and the application of provisional execution are both dismissed. The litigation expenses shall be borne by the plaintiff". Moreover, the plaintiff did not file an appeal within the statutory period, and the judgment of first instance of this case was determined on August 3, 2022.

• (6) Significant contract
• A. The Group entered into the land usage right transfer contract with Hermosa Ecozone Development Corporation in Year 2020. The main contents are as below:
  • (A) Transfer object: land usage right of 137,096 square meters at Lot 1 Block 12 in Hermosa Ecozone Industrial Park for the construction of the plant.
  • (B) Land usage right period: 75 years.
  • (C) Transfer price of land usage right: \$410,992 thousand (PHP 685,480 thousand).
• B. The Group entered into the land usage right transfer contract with Farms Agribusiness Corporation in Kunshan Economic and Technological Development Zone in Year 2000. The contents of the contract were as below:
  • (A) Transfer object: land usage right of 48,688 square meters at Kunshan Economic and Technological Development Zone for the construction of the plant and dormitory.
  • (B) Land usage right period: 50 years.
  • (C) Transfer price of land usage right: US\$828 thousand (RMB 6,842 thousand).

10. SIGNIFICANT DISASTER LOSS: NONE.

11. SIGNIFICANT SUBSEQUENT EVENTS: NONE.

12. OTHERS

(1) Capital risk management

The Group should maintain an adequate capital structure to enable the expansion and enhancement of equipment. Therefore, the Group manages its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, capital asset purchases and debt service requirements associated with its existing operations over the next 12 months.

(2) Financial instruments

A. Financial risk of financial instruments

Financial risk management policies

The Group's activities expose to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk and liquidity risk. To lower down the related financial risk, the Group's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Group's financial position and financial performance.

The plans for material treasury activities are reviewed by board of directors in accordance with procedures required by relevant regulations or internal controls. During the implementation of such plans, the Group Treasury function must comply with certain treasury procedures that provide guiding principles for overall financial risk management and segregation of duties.

Significant financial risks and degrees of financial risks

• a. Market risk
• (a) Foreign exchange rate risk

The Group's functional currency is New Taiwan dollars. Many of the Group's operating activities are denominated in foreign currencies. Consequently, the Group is exposed to foreign currency risk. To protect against reductions in value and the volatility of future cash flows caused by changes in foreign exchange rates, the Group raises loans denominated in foreign currency and derivative financial instruments to hedge the currency exposure. These instruments help to reduce, but do not eliminate, the impact of foreign currency exchange rate movements. The derivative financial instruments the Group held with maturities less than 3 months are not qualified for hedge accounting. The net investment in foreign operation is strategic investment. Therefore, the Group does no hedge for it.

(b) Foreign currency risk and sensitivity analysis (including consolidated elimination items and incompletely write-off of exchange rate risk)

					Sensitivity Analysis
	Foreign Currency	Exchange Rate	Carrying Value (NTD)	Variation	Profit and Loss Impact	Equity Impact
Financial assets
Monetary item
USD:NTD	147,441	30.7050	4,527,187	Increase 1%	45,272	-
EUR:NTD	6,295	33.9800	213,894	Increase 1%	2,139	-
USD:RMB	88,522	7.0827	2,718,070	Increase 1%	27,181	-
USD:EUR	3,391	0.9036	104,123	Increase 1%	1,041	-
USD:PHP	3,974	55.5646	122,018	Increase 1%	1,220	-
Financial liabilities
Monetary item
USD:NTD	79,851	30.7050	2,451,815	Increase 1%	(24,518)	-
USD:RMB	48,235	7.0827	1,481,042	Increase 1%	(14,810)	-
USD:EUR	4,518	0.9036	138,725	Increase 1%	(1,387)	-

December 31, 2023

					Sensitivity Analysis
	Foreign	Exchange	Carrying		Profit and	Equity
	Currency	Rate	Value (NTD)	Variation	Loss Impact	Impact
Financial assets
Monetary item
USD:NTD	107,717	30.7100	3,307,974	Increase 1%	33,080	-
EUR:NTD	13,666	32.7200	447,161	Increase 1%	4,472	-
USD:RMB	94,832	6.9646	2,912,276	Increase 1%	29,123	-
USD:EUR	1,953	0.9386	59,969	Increase 1%	600	-
USD:PHP	1,456	56.1221	44,712	Increase 1%	447	-
Financial liabilities
Monetary item
USD:NTD	69,369	30.7100	2,130,318	Increase 1%	(21,303)	-
EUR:NTD	636	32.7200	20,804	Increase 1%	(208)	-
USD:RMB	72,180	6.9646	2,216,650	Increase 1%	(22,167)	-
USD:EUR	5,497	0.9386	168,810	Increase 1%	(1,688)	-
USD:PHP	590	56.1221	18,131	Increase 1%	(181)	-

December 31, 2022

When New Taiwan dollar appreciates and other variation factors stay unchanged, there will be the same but opposite amount of influence as of December 31, 2023 and 2022.

The details of unrealized exchange gain (loss) for monetary items due to material exchange rate fluctuation were as follow:

		Year Ended December 31, 2023		Year Ended December 31, 2022
		Foreign Exchange Gain (Loss)			Foreign Exchange Gain (Loss)
	Foreign Currency (In thousands)	Exchange Rate	Carrying Value	Foreign Currency (In thousands)	Exchange Rate	Carrying Value
Financial Assets
Monetary Item
USD: NTD	-	31.1770	(148,282)	-	29.8490	(47,841)
EUR: NTD	-	33.7200	(1,112)	-	31.3500	14,196
USD: RMB	(5,39)	7.0467	(23,877)	(17,505)	6.7261	(77,683)
USD: EUR	(88)	0.9246	(2,964)	(94)	0.9521	(2,939)
USD: PHP	1,343	55.7210	751	(1,552)	54.4820	(850)
Financial Liabilities
Monetary Item
USD: NTD	-	31.1770	56,573	-	29.8490	862
EUR: NTD	-	33.7200	50	-	31.3500	(208)
USD: RMB	3,097	7.0467	13,701	3,090	6.7261	13,713
USD: EUR	97	0.9246	3,260	316	0.9521	9,898
USD: PHP	(628)	55.7210	(351)	488	54.4820	267

b. Price risk

The Group is exposed to equity instrument price risk because the investments held by the Group are classified on the consolidated balance sheet as at fair value through profit or loss.

The Group is exposed to beneficiary certificates. If the price of the Group's equity investments rises (or falls) 1%, the net income resulting from equity instruments at fair value through profit and loss will increase (or decrease) \$0 thousand and \$2,118 thousand for the years ended December 31, 2023 and 2022, respectively. The other comprehensive income from equity instruments at fair value through other comprehensive income or loss will increase (or decrease) 272 thousand for the nine months ended December 31, 2023.

c. Interest rate risk

The carrying amount of the financial assets and liabilities that exposed to interest rate risk as reporting date was as follow:

	Carrying Value
Item	December 31, 2023	December 31, 2022
Fair value interest rate risk:
Financial assets	\$216,761	\$ -
Financial liabilities	(228,769)	(231,376)
Net	(\$12,008)	(\$231,376)
Cash flow interest rate risk:
Financial assets	\$4,023,416	\$2,386,482
Financial liabilities	(853,287)	(1,694,589)
Net	\$3,170,129	\$691,893

(a) Sensitivity analysis of fair value interest rate risk instrument

The Group does not classify any fixed-rate instruments as financial assets at fair value through profit or loss and financial assets at fair value through other comprehensive income. In addition, the Group does not designate derivatives (interest rate swap) as hedge instruments under hedge accounting. Therefore, the change of interest rate at reporting date does not have influence on net income and other comprehensive income.

(b) Sensitivity analysis of cash flow interest rate risk instrument

The Group's financial assets (liabilities) with variable interest rate are those with floating-rate. If interest rate increases 1%, the net income will increase (decrease) \$31,701 thousand and \$6,919 thousand for the years ended December 31, 2023 and 2022, respectively.

B. Credit risk

Credit risk is the risk that counterparty will not meet its obligations under a contract leading to a financial loss to the Group. The Group is exposed to credit risk from operating activities, primarily accounts receivables, and from investing activities, primarily deposit and other financial instruments. Credit risk is managed separately for business related and financial related exposures.

a. Business related credit risk

In order to maintain the credit quality of accounts receivables, the Group has established procedures to monitor and limit exposure to credit risk on trade receivables. Credit evaluation is performed in the consideration of the relevant factors which may affects the customer's paying ability such as financial condition, external and internal credit scoring, historical experience, and economic conditions.

b. Financial credit risk

The Group's exposure to financial credit risk which pertained to bank deposits and other financial instruments were evaluated and monitored by Group Treasury function. The Group only deals with creditworthy counterparties, banks, and government so that no significant credit risk was identified. In addition, the Group has no financial assets at amortized and investments in debt instruments at fair value through other comprehensive income.

(a) Credit concentration risk

As of December 31, 2023 and 2022, the Group's ten largest customers accounted for 30.44% and 36.55% of accounts receivable, respectively. The Group believes the concentration of credit risk is insignificant for the remaining accounts receivable.

The Group continuously evaluated customers' financial situation. To reduce major credit risk, the Group bought credit guarantee insurance, and asked customers to make payment in advance.

• (b) Expected credit loss measurement
• i. Account receivables adopts a simplified approach, please prefer to Note 6(4).
• ii. Identification basis for whether credit risk is significantly increased: None (the Group didn't hold debt instruments at amortized cost or at FVTOCI).
• c.Collaterals and other credit enhancement held to avoid credit risks from financial assets.

The following table shows the maximum exposure to credit risk regarding financial assets recognized in the consolidated balance sheets, pledged collateral, master netting arrangements and other credit enhancement held by the Group:

Decrease Amount of Credit Risk Maximum Exposure

December 31, 2023	Carrying Value	Collateral		Net Settlement Agreement		Other Credit Strengthening		Total
Financial instruments subject to IFRS 9 impairment requirements and derogated from credit Financial instruments not subject to IFRS 9 impairment	\$ -	\$	-	\$	-	\$	-	\$	-
requirements: Financial assets at fair value through profit or loss Financial assets at fair value through other comprehensive	- 27,231		- -		- -		- -		- -
income or loss Total	\$27,231	\$	-	\$	-	\$	-	\$	-

				Decrease Amount of Credit Risk Maximum Exposure
December 31, 2022	Carrying Value	Collateral	Net Settlement Agreement	Other Credit Strengthening	Total
Financial instruments subject to IFRS 9 impairment requirements and derogated from credit	\$ -	\$ -	\$ -	\$ -	\$ -
Financial instruments not subject to IFRS 9 impairment requirements:
Financial assets at fair value through profit or loss Financial assets at fair value	211,827	-	-	-	-
through other comprehensive income or loss	-	-	-	-	-
Total	\$211,827	\$ -	\$ -	\$ -	\$ -

C. Liquidity risk

a. Liquidity risk management:

The objective of liquidity risk management is to ensure the Group has sufficient liquidity to fund its business requirements of cash and cash equivalents and the unused of financing facilities associated with existing operations.

b. Financial liabilities with repayment periods:

The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods.

Non-derivative Financial liabilities	Within 1 year	1-2 years	2-5 years	Over 5 years	Contract Cash Flow	Carrying Value
Short-term loans	\$457,581	\$ -	\$ -	\$ -	\$457,581	\$457,581
Notes payable	31,067	-	-	-	31,067	31,067
Accounts payable	2,737,012	-	-	-	2,737,012	2,737,012
Other payables	941,732	221	325	-	942,278	942,278
Long-term loans	182,775	124,042	88,889	-	395,706	395,706
(Inclusive of current portion)
Lease liabilities	106,577	78,942	61,481	17,519	264,519	228,769
Guarantee deposits	839	-	-	-	839	839
Total	\$4,457,583	\$203,205	\$150,695	\$17,519	\$4,829,002	\$4,793,252

December 31, 2023

Further information for lease liabilities with repayment periods was as follows:

Item	Within 1 year	1-5 years	5-10 years	10-15 years	15-20 years	Over 20 years	Undiscounted payments
Lease liabilities	\$106,577	\$140,423	\$17,519	\$ -	\$ -	\$ -	\$264,519

				December 31, 2022
Non-derivative Financial liabilities	Within 1 year	1-2 years	2-5 years	Over 5 years	Contract Cash Flow	Carrying Value
Short-term loans	\$1,287,516	\$ -	\$ -	\$ -	\$1,287,516	\$1,287,516
Notes payable	136,355	-	-	-	136,355	136,355
Accounts payable	3,179,265	23	-	-	3,179,288	3,179,288
Other payables	1,077,293	989	465	-	1,078,747	1,078,747
Long-term loans	120,372	102,720	183,981	-	407,073	407,073
(Inclusive of current portion)
Lease liabilities	86,658	67,974	87,823	-	242,455	231,376
Guarantee deposits	3,029	-	-	-	3,029	3,029
Total	\$5,890,488	\$171,706	\$272,269	\$ -	\$6,334,463	\$6,323,384

Further information for lease liabilities with repayment periods was as follows:

Item	Within 1 year	1-5 years	5-10 years	10-15 years	15-20 years	Over 20 years	Undiscounted payments
Lease liabilities	\$86,658	\$155,797	\$ -	\$ -	\$ -	\$ -	\$242,455

The Group does not expect a maturity analysis of which the cash flows timing would be significantly earlier, or the actual amount would be significantly different.

1. Categories of financial instruments

The carrying value of financial assets and liabilities of the Group as of December 31, 2023 and 2022 was as follow:

	December 31
Financial assets	2023	2022
Financial assets measured at amortized cost
Cash and cash equivalents	\$4,030,886	\$2,457,337
Notes and accounts receivable	3,079,399	3,414,152
Other receivables	100,770	140,678
Other financial assets - current	216,761	-
Refundable deposits	20,961	19,773
Financial asset at fair value through profit or loss	-	211,827
Financial asset at fair value through other comprehensive income or loss noncurrent	27,231	-
Financial liabilities measured at amortized cost
Short-term loans	457,581	1,287,516
Notes and accounts payable (including related parties)	2,768,079	3,315,643
Other payables (including related parties)	942,278	1,078,747
Lease liabilities (including current and noncurrent)	228,769	231,376
Long-term loans	395,706	407,073
Guarantee deposits	839	3,029

• (3) Fair value information
• A. Details of the fair value of the Group's financial assets and financial liabilities not measured at fair value are provided in Note 12(3)C. Details of the fair value of the Group's investment property measured at cost are provided in Note 6(11).
• B. The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:
  • Level 1: Quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group's investment in listed stocks, beneficiary certificates, on-the-run Taiwan central government bonds and derivative instruments with quoted market prices is included in Level 1.
  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group's investments in government bonds, corporate bonds, financial debentures, convertible bonds, and most derivative instruments is included in Level 2.
  • Level 3: Unobservable inputs for the asset or liability. The fair value of the Group's investments in some derivative instruments and equity instruments without

active market is included in Level 3.

C. Financial instruments that are not measured at fair value

The Group considers that the carrying amounts of financial instruments including cash and cash equivalents, receivables, other financial assets, refundable deposits, short-term loans, payables, lease liabilities, long-term loans and guarantee deposits that are not measured at fair value approximate their fair values.

D. The related information of fair value by leve1

The related information of financial instruments measured at fair value on a recurring basis by level is as follows:

			December 31, 2023
Item	Level 1	Level 2	Level 3	Total
Assets:
Recurring fair value measurements
Financial assets at fair value through profit or loss:
- beneficiary certificates	\$ -	\$ -	\$ -	\$ -
Financial assets at fair value
through other comprehensive
income or loss
Domestic unlisted stocks	-	-	27,231	27,231
Total	\$ -	\$ -	\$27,231	\$27,231
			December 31, 2022
Item	Level 1	Level 2	Level 3	Total
Assets:
Recurring fair value measurements
Financial assets at fair value through profit or loss:
- beneficiary certificates	\$211,827	\$ -	\$ -	\$211,827
Financial assets at fair value
through other comprehensive
income or loss
Domestic unlisted stocks	-	-	-	-
Total	\$211827	\$ -	\$ -	\$211,827

E. Valuation techniques of financial instruments valued at fair value

(a) The fair value of financial assets and liabilities traded in an active market is based on the quoted market prices. The quotation, which is published by the main exchange center or that which was deemed to be a public bond by the Treasury Bureau of Center Bank, is included in the fair value of the listed securities instruments and the debt instruments in active markets with open bid.

A financial instrument is regarded as the quoted price in an active market if the quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service or regulatory agency; and if those prices represent the actual and regularly occurring market transactions on an arm's length basis. Otherwise, the market is deemed to be inactive. Normally, a market is considered to be inactive when the bid-ask spread is increasing; or the bid-ask spread varies significantly; or there has been a significant decline in trading volume.

(b) Except for the above-mentioned financial instruments traded in an active market, the fair value is based on the valuation techniques or the quotation from the counterparty. The fair value refers to the current fair value of the other financial instruments with similar conditions and characteristics, using a discounted cash flow analysis or other valuation techniques, such as calculations of using models, based on the information acquired from the market at the balance sheet date.

When the financial instrument of the Group is not traded in an active market, the fair value is determined based on the ratio of the quoted market price of the comparative company, its book value per share and its operating situation. Also, the fair value is discounted for its lack of liquidity in the market.

The assets measured by the fair value of the third level of the fair value hierarchy of the Group are used to measure the significant unobservable inputs of fair value.

December 31, 2023:

Item	Evaluation technology	Check the input value	interval	Input value and fair value relationship
Financial assets at fair	Market	Lack of	18.71%-	The higher the degree of
value through other	Approach	liquidity	21.29	lack of liquidity, the
comprehensive income		discount rate		lower the fair value
or loss				estimate

December 31, 2022: None.

F. There was no transfer between Level 1 and Level 2 for the years ended December 31, 2023 and 2022.

G. Changes in Level 3 instruments as for the nine months ended September 30, 2023 and 2022:

	Investment financial instruments	in unquoted
	Nine Months		Ended September 30
Item	2023		2022
Beginning balance	\$	-	\$	-
Addition	22,168			-
Recognized in other comprehensive income	5,063			-
Ending balance	\$27,231		\$	-

H. Valuation process for Level 3 fair value measurement:

Valuation process regarding fair value Level 3 is conducted by the Group's finance department, by which the independence of fair value of financial instruments is verified though use of independent data source in order to make the valuation results close to market conditions. Such valuation results are regularly reviewed so as to ensure their reasonableness.

• (4) Transfer of financial assets: None.
• (5) Offset of financial assets and liabilities: None.

13. SUPPLEMENTARY DISCLOSURES

• (1) Significant transactions information
• A. Financings provided: Table 1.
• B. Endorsement/guarantee provided: Table 2.
• C. Marketable securities held: Table 3.
• D. Marketable securities acquired and disposed of at costs or prices of at least NT\$300 million or 20% of the paid-in capital: Table 4.
• E. Acquisition of individual real estate properties at costs of at least NT\$300 million or 20% of the paid-in capital: None.
• F. Disposal of individual real estate properties at prices of at least NT\$300 million or 20% of the paid-in capital: None.
• G. Total purchases from or sales to related parties of at least NT\$100 million or 20% of the paid-in capital: Table 5.
• H. Receivables from related parties amounting to at least NT\$100 million or 20% of the paid-in capital: Table 6.
• I. Information about the derivative financial instruments transaction: None.
• J. The business relationship between the parent and the subsidiaries and significant transactions between them: Table 7.
• (2) Information on investees (before consolidated elimination): Table 8.
• (3) Information on investments in Mainland China (before consolidated elimination): Table 9.
• (4) Information on major shareholders (including name of the shareholders with shareholding above 5%, shares held and shareholding ratio): Table 10.

Table 1

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

LOANS PROVIDED TO OTHER PARTIES

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars and Foreign Currencies)

No.	Financing	Counter-party	Financial Statement	Related	Maximum Balance for	Ending Balance	Amount Actually	Interest	Nature for Financing	Transaction	Reason for	Allowance for Bad		Collateral	Financing Limits for Each Borrowing	Financing Company's Total Financing
	Company		Account	Party	the Period	(Note 4)	Drawn	Rate	(Note 3)	Amounts	Financing	Debt	Item	Value	Company	Amount Limits
															(Note 1)	(Note 2)
1	Sunon	Suzhou Shengyixing	Other	Yes	13,006	-	-	-	2	-	Operating	-	-	-	185,645	371,290
	Electronic	Heat Transfer	receivables -		(RMB3,000)						capital
	(Kunshan)	Technology Co., Ltd.	related parties
	Co., Ltd.

Note 1: Financing limits for each borrowing company:

(1) For trading partner:

Shall not be higher than the purchase or sales amount of the most recent year.

(2) For short-term financing:

Shall not exceed 10% of the Company's net worth.

• Note 2: The maximum balance of financing activitives:
• (1) For trading partner:

Shall not exceed 20% of the Company's net worth

(2) For short-term financing:

Shall not exceed 20% of the Company's net worth

(3) The policy for loans granted mutually between overseas subsidiaries of which the Company directly or indirectly holds 100% of their voting shares is as follows:

The maximum amount for total loan for individual enterprise shall not exceed 50% of its net worth.。

• Note 3: The code represents the nature of financing activities as follows:
• (1) Related to trading partner is "1".
• (2) Short-term financing is "2".

Note 4: The maximum amount was approved by the Board of Directors' meeting.

Table 2

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

ENDORSEMENTS/GUARANTEES PROVIDED

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars and Foreign Currencies)

No. (Note 1)	Endorser	Company Name	Endorsee Relationship (Note 2)	Endorsement Limit for a Single Entity (Note 3)	Highest Balance During the Period	Ending Balance	Actual Amount Drawn	Balance Secured by Collaterals	Ratio of Accumulated Amount to Net Worth of the Company	Maximum Amount of Endorsement (Note 4)	Provision of Endorsements by Parent Company to Subsidiary	Provision of Endorsements by Subsidiary to Parent Company	Provision of Endorsements to the Party in Mainland China
0	Sunonwealth	Sunon	2	2,165,618	NTD 270,934	NTD 270,934	-	-	3.75%	3,609,364	Y	N	Y
	Electric Machine	Electronic (Kunshan)			(USD 6,000;	(USD 6,000;
	Industry Co.,	Co., Ltd.
	Ltd.				RMB 20,000)	RMB 20,000)
0	Sunonwealth	Sunon	2	2,165,618	NTD 652,041	NTD 652,041	NTD 63,077	-	9.03%	3,609,364	Y	N	Y
	Electric Machine	Electronic (Bei Hai)			(USD 17,000;	(USD 17,000;
	Industry Co.,	Co., Ltd.
	Ltd.				RMB 30,000)	RMB 30,000)	(RMB 14,550)
0	Sunonwealth	Bei hai Li	2	2,165,618	NTD 86,704	NTD 86,704	-	-	1.20%	3,609,364	Y	N	Y
	Electric Machine	Zhun Electronic			(RMB 20,000)	(RMB 20,000)
	Industry Co.,	Co., Ltd.
	Ltd.
1	Sunon	Bei hai Li	1	178,504	NTD 43,352	NTD 43,352	-	-	4.86%	446,259	N	N	Y
	Electronic (Bei Hai)	Zhun Electronic			(RMB 10,000)	(RMB 10,000)
	Co., Ltd.	Co., Ltd.
2	Sunon	Sunon	1	371,291	NTD 216,760	NTD 216,760	NTD 43,352	-	11.68%	928,227	N	N	Y
	Electronic	Electronic
	(Kunshan)	(Bei Hai)			(RMB 50,000)	(RMB 50,000)	(RMB 10,000)
	Co., Ltd. Sunon	Co., Ltd. Bei hai Li
2	Electronic	Zhun	1	371,291	NTD 130,056	NTD 130,056	NTD 78,034	-	7.01%	928,227	N	N	Y
	(Kunshan)	Electronic			(RMB 30,000)	(RMB 30,000)	(RMB 18,000)
	Co., Ltd.	Co., Ltd.

Note 1: The description of the number column is as follows:

(1) The issuer is represented in 0.

(2) The investee company is numbered sequentially from Arabic numeral 1.

Note 2: The following code represents the relationship with the Company :

1. Trading partner.

2. Majority owned subsidiary

3. The Company direct and indirect owns over 50% ownership of the investee company.

4. A subsidiary jointly owned over 90% by the Company.

5. Guaranteed by the Company according to the construction contract.

6. An investee company. The guarantees were provided based on the Company's proportionate share in the investee company.

7. Joint and several guaranteed by the Company according to the pre-construction contract under Consumer protection Act.

Note 3: Endorsements/guarantees provided by the Company to a single enterprise and a single foreign affiliate shall not exceed 20% and 30% of

the Company's net worth, respectively.

Note 4: The maximum amount of the endorsements/guarantees provided by the Company shall not exceed 50% of the Company's net worth. Note 5: Sunonwealth Electric Machine Industry Co., Ltd. endorsed Sunon Electronic (Kunshan) Co., Ltd. and Bei hai Li Zhun Electronic Co., Ltd. to guarantee a shared quota of NTD86,704 thousand (RMB20,000 thousand).

Table 3

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES HELD

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars)

					Ending balance			Remarks
Investor	Type and Name of Securities	Relationship with the Issuer	General Ledger Account	Number of Shares (in thousands)	Carrying Value	Percentage of Ownership	Fair Value
Sunon wealth Electric Machine Industry Co., Ltd.	Stock – TECHNOLOGY ON PROTOTYPING ULTIMATE CO., LTD.	None	Financial assets at fair value through other comprehensive income or loss	870	24,675	15.7%	24,675
Sunon Electronic (Kunshan) Co., Ltd.	Stock – ACP HEAT TRANSFER TECH WUXI CO LTD	None	Financial assets at fair value through other comprehensive income or loss	-	2,556	10.0%	2,556

Table 4

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

MARKETABLE SECURITIES ACQUIRED AND DISPOSED OF AT COSTS OR PRICES OF AT LEAST

NT\$300 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars and Foreign Currencies)

	Marketable					Beginning Balance		Addition (Note)			Disposal			Ending Balance
Company Name	Securities Type and Name	Financial Statement Account	Counter-party	Relationship with the Investor	Shares	Amount	Shares	Amount	Shares	Selling Price	Carrying Value	Gain (loss) on Disposal	Shares	Amount
Sunon Electronic (Bei Hai) Co., Ltd.	AMHQLXTT	Financial assets at fair value through profit or loss	Bank of China	None	-	176,426 (RMB 40,011)	-	115,578 (RMB 25,989)	-	293,114 (RMB 66,251)	292,004 (RMB 66,000)	1,110 (RMB 251)	-	-
Bei Hai Li Zhan Electronics Co., Ltd.	AMHQLXTT	Financial assets at fair value through profit or loss	Bank of China	None	-	35,401 (RMB 8,029)	-	539,758 (RMB121,971)	-	575,854 (RMB130,157)	575,159 (RMB130,000)	695 (RMB 157)	-	-

(Note): Including current purchase of \$654,797 thousand, net profit of financial assets at fair value through profit or loss of (\$177) thousand and the exchange rate

impact of \$716 thousand.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars)

	Company Name	Nature of			Transaction Details		Abnormal Transaction		(Notes/Accounts Payable) Or Receivable
	Related Party	Relationships	Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total	Remarks
Sunonwealth Electric	Sunon Electronic (Bei Hai) Co., Ltd.	Subsidiary	Sales	698,603		7.25% 3 to 4 months	-	-	563,465	21.02%
Machine	Sunon SAS	Subsidiary	Sales	342,258		3.55% 2 to 3 months	-	-	158,128	5.90%
Industry Co., Ltd.	Sunon INC	Subsidiary	Sales	272,608		2.83% 2 to 3 months	-	-	48,127	1.80%
Sunon Electronic (Kunshan) Co., Ltd.	Sunonwealth Electric Machine Industry Co., Ltd.	Parent	Sales	2,147,292		43.04% 2 to 3 months	-	-	504,101	36.15%
Sunon Electronics (Bei Hai) Co., Ltd.	Sunonwealth Electric Machine Industry Co., Ltd.	Parent	Sales	4,792,890		98.75% 2 to 3 months	-	-	1,124,448	98.49%
Beihai Li Zhun Electronics Co., Ltd.	Sunon Electronic (Kunshan) Co., Ltd.	The ultimate parent company	Sales	691,047		43.55% 2 to 3 months	-	-	268,192	55.34%
SUNON ELECTRONICS PHILIPPINES CORP.	Sunonwealth Electric Machine Industry Co., Ltd.	Parent	Sales	110,762	100.00%	2 to 3 months	-	-	29,774	100.00%

Note : The above-mentioned parent-subsidiary transactions have been eliminated.

Table 5

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT\$100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollar and Foreign Currencies)

						Overdue	Amounts Received	Allowance
Company Name	Related Party	Nature of	Ending Balance	Turnover			in Subsequent	for Bad
		Relationships			Amount	Action Taken	Period (Note1)	Debts
Sunonwealth Electric	SUNON SAS	Subsidiary	158,128	1.71	-	-	NTD 89,680	-
Machine Industry Co., Ltd.	Sunson Electronic (Bei Hai) Co., Ltd.	Subsidiary	563,465	2.63	-	-	NTD 243,918	-
Sunon Electronic	Sunonwealth Electric Machine		NTD 504,101				NTD 344,812
(Kunshan) Co., Ltd.	Industry Co., Ltd.	Parent	(RMB 116,281)	3.45	-	-	(RMB 79,538)	-
Sunon Electronic	Sunonwealth Electric Machine		NTD 1,124,448				NTD 746,237
(Bei Hai) Co., Ltd.	Industry Co., Ltd.	Parent	(RMB 259,376)	5.98	-	-	(RMB 172,134)	-
Beihai Li Zhun	Sunon Electronic (Kunshan)	The ultimate	NTD 268,192				NTD 130,071
Electronics Co., Ltd.	Co., Ltd.	parent company	(RMB 61,864)	2.96	-	-	(RMB 30,003)	-

Note 1: Amounts collected as of March 7, 2024.

Note 2: The above-mentioned parent-subsidiary transactions have been eliminated.

Table 7

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars)

			Nature of		Intercompany Transactions
No. (Note 1)	Company Name	Counterparty	Relationship (Note 2)	Account	Amount	Terms (Note 4)	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
		Sunon SAS		Sales revenues	342,258	(Note 4)	2.65%
			1	Accounts receivable	158,128		1.25%
	Sunonwealth Electric	Sunon INC	1	Sales revenues	272,608	(Note 4)	2.11%
0	Machine Industry Co.,	Sunon Electronic (Bei Hai) Co., Ltd.		Sales revenues	698,608	(Note 4)	5.41%
	Ltd.		1	Accounts receivable	563,465		4.47%
		Sunon Electronic (Kunshan) Co., Ltd.	1	Sales revenues	50,229	(Note 4)	0.39%
		Sunon Electronic (Kunshan) Co., Ltd	1	Other income	59,561	(Note 4)	0.46%
	Sunon Electronic	Sunonwealth Electric Machine		Sales revenues	2,147,292	(Note 4)	16.63%
1	(Kunshan) Co., Ltd.	Industry Co., Ltd.	2	Accounts receivable	504,101		4.00%
	Sunon Electronic	Sunonwealth Electric Machine		Sales revenues	4,792,890	(Note 4)	37.11%
2	(Bei Hai) Co., Ltd.	Industry Co., Ltd.	2	Accounts receivable	1,124,448		8.91%
	Bei hai Li Zhun 3 Electronic Co., Ltd.	Sunon Electronic (Kunshan) Co., Ltd.	3	Sales revenues	691,047	(Note 4)	5.35%
				Accounts receivable	268,192		2.13%
		SUNON ELECTRONICS PHILIPPINES CORP.	3	Sales revenues	65,269	(Note 4)	0.51%

			Nature of	Intercompany Transactions
No. (Note 1)	Company Name	Counterparty	Relationship (Note 2)	Account	Amount	Terms (Note 4)	Percentage of Consolidated Net Revenue or Total Assets (Note 3)
4	SUNON ELECTRONICS PHILIPPINES CORP	Sunonwealth Electric Machine Industry Co., Ltd.	2	Sales revenues	110,762	(Note 4)	0.86%
5	SUNON SAS	Sunonwealth Electric Machine Industry Co., Ltd.	2	Other income	73,431	(Note 4)	0.57%

Note 1: The description of the number column is as follows:

(1) The issuer is represented in 0.

(2) The investee company is numbered sequentially from Arabic numeral 1.。

Note 2: There are three types of relationships with traders. The type of mark is as follows:

(1) No. 1 represents the transactions from parent company to subsidiary.

(2) No. 2 represents the transactions from subsidiary to parent company.

(3) No. 3 represents the transactions between subsidiaries.

Note 3: The ratio of transaction amount to consolidated revenues or total assets is calculated as follows:

(1) asset/liability items: ending balance to total assets;

(2) profit and loss items: accumulated amount to consolidated revenues.

Note 4: The prices and terms to related parties were not significantly different from transactions with third parties, except for particular transactions with no similar transactions to compare with. For these transactions, the prices and terms were determined in accordance with mutual agreements.

Note 5: The above-mentioned parent-subsidiary transactions have been eliminated.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

NAMES, LOCATIONS AND OTHER INFORMATION OF INVESTEE COMPANIES (EXCLUDING INVESTEE IN MAINLAND)

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars and Foreign Currencies)

		Location	Main Businesses and Products	Original Investment Amount		Balance as of December 31, 2023
Investor Company	Investee Company			As of December 31, 2023	As of December 31, 2022	Shares (In Thousands)	Percentage of Ownership	Carrying Value	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Remark
Sunonwealth Electric Machine Industry Co.,	Successful Century Co., Ltd.	British Virgin Islands	Investments	1,136,933	1,136,933	33,880	100.00%	1,777,566	439,855	437,653	-
	BVI Sunon International Limited	British Virgin Islands	Investments	592,197	654,017	-	100.00%	1,138,249	518,557	505,875	-
	Sunon INC	USA	Manufacturing and sales of fans	49,140	49,140	150	100.00%	203,066	47,468	43,272	-
	Sunon SAS	France	Manufacturing and sales of fans	16,127	16,127	50	100.00%	78,976	15,000	13,094	-
	Sunonwealth Electric Machine Ind.(H.K.) Ltd.	Hong Kong	Manufacturing and sales of fans	3,428	3,428	800	99.99%	1,861	(38)	(38)	-
Ltd.	Sunon Corporation	Japan	Manufacturing and sales of fans	4,470	4,470	4	100.00%	1,651	(65)	(65)	-
	Sunon Electronics India Private Limited	India	Manufacturing and sales of fans	4,880	4,880	1,100	99.99%	4,306	516	516	-
	Sunon Electronics Philippines Corp.	Philippines	Manufacturing and sales of fans	325,108	139,338	5,773	99.99%	210,577	(67,546)	(67,546)	-
	Sunon Properties Philippines Corp.	Philippines	Real estate development and investment	461,445	430,000	7,630	99.99%	397,493	(7,272)	(7,272)	-
			Total					3,813,745	946,475	925,489

				Original Investment Amount			Balance as of December 31, 2023
Investor Company	Investee Company	Location	Main Businesses and Products	As of December 31, 2023	As of December 31, 2022	Shares (In Thousands)	Percentage of Ownership	Carrying Value	Net Income (Loss) of the Investee	Share of Profit/Loss of Investee	Remark
Successful Century Co., Ltd.	Sunon Electronic (Kunshan) Co., Ltd.	China	Manufacturing and selling of fans	USD 34,431	USD 34,431	-	100.00%	USD 60,461	USD 14,109	USD 14,109	-
Sunon Electronic	Suzhou Shengyixing Heat Transfer Technology Co., Ltd.	China	Manufacturing and selling of cooling equipment	RMB 6,188	RMB 3,000	-	49.00%	RMB 4,837	RMB 1,805	RMB 334	-
(Kunshan) Co., Ltd.	Beihai Li Zhun Electronics Co., Ltd.	China	Manufacturing and selling of fans	RMB 20,000	RMB 20,000	-	33.33%	RMB 40,628	RMB 54,062	RMB 18,021	-
BVI Sunon	Sunon Electronic (Foshan) Co., Ltd.	China	General investment and trade	RMB 20,298	RMB 35,911	-	100.00%	RMB 84,891	RMB 35,649	RMB 35,649	-
International Limited	Sunon Electronic (Bei Hai) Co., Ltd.	China	Manufacturing and selling of new type electronic parts	RMB 63,732	RMB 63,732	-	100.00%	RMB 205,877	RMB 81,598	RMB 81,598	-
Sunon Electronic (Foshan) Co., Ltd.	Beihai Li Zhun Electronics Co., Ltd.	China	Manufacturing and selling of fans	RMB 40,000	RMB 40,000	-	66.67%	RMB 81,256	RMB 54,062	RMB 36,041	-
Sunon SAS	Sunon Deutschland GmbH	Germany	Sales of fans	EUR 25	EUR 25	-	100.00%	EUR 95	EUR 79	EUR 79	-

Note:The above-mentioned parent-subsidiary transactions have been eliminated.

Table 9

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENT IN MAINLAND CHINA

DECEMBER 31, 2023

(1) Mainland Investment Information:

	(Amounts in Thousands of New Taiwan Dollars and Foreign Currencies)
Investee Company	Main Businesses and Products	Total Amount of		Accumulated Outflow of	Investment Flows		Accumulated Outflow of Investment from	Net Income (Loss) of the	Percentage of	Share of	Carrying Amount	Accumulated Inward Remittance of
		Paid-in Capital	Investment (Note 1)	Investment from Taiwan as of January 1, 2023	Outflow	Inflow	Taiwan as of December 31, 2023	Investee Company	Ownership	Profit/Loss (Note 2)	as of December 31, 2023	Earnings as of December 31, 2023
Sunon Electronic (Kunshan) Co., Ltd.	Manufacturing and selling of fans	NTD 1,148,456 (USD 34,431) (Note 6)	(2)	NTD 1,136,673 (USD 33,880)	-	-	NTD 1,136,673 (USD 33,880)	NTD 439,890 (USD 14,109)	100%	NTD 439,890 (USD 14,109) (2).B	NTD 1,856,455 (USD 60,461)	NTD 758,091 (USD 25,740)
Sunon Electronic (Foshan) Co., Ltd.	General investment and trade	NTD 84,089 (USD 2,600) (Note 7)	(2)	NTD 298,898 (USD 9,180)	-	NTD 61,820 (USD 2,000)	NTD 237,078 (USD 7,180)	NTD 157,723 (RMB 35,649)	100%	NTD 157,723 (RMB 35,649) (2).B	NTD 368,018 (RMB 84,891)	NTD 751,056 (USD 25,095)
Sunon Electronic (Bei Hai) Co., Ltd.	Manufacturing and selling of new type electronic parts	NTD 293,115 (USD 10,000)	(2)	NTD 293,115 (USD 10,000)	-	-	NTD 293,115 (USD 10,000)	NTD 361,012 (RMB 81,598)	100%	NTD 361,012 (RMB 81,598) (2).B	NTD 892,518 (RMB 205,877)	NTD 1,052,650 (USD 34,825)
Suzhou Shengyixing Heat Transfer Technology Co., Ltd.	Manufacturing and selling of cooling equipment	NTD 51,983 (RMB 12,000)	(3)	- (Note 5)	-	-	- (Note 5)	NTD 7,986 (RMB 1,805)	49%	NTD 1,476 (RMB 334) (2).A	NTD 20,968 (RMB 4,837)	-
Beihai Li Zhun Electronics Co., Ltd.	Manufacturing and selling of fans	NTD 265,311 (RMB 60,000)	(3)	- (Note 8)	-	-	- (Note 8)	NTD 239,188 (RMB 54,062)	100%	NTD 239,188 (RMB 54,062) (2).B	NTD 528,389 (RMB 121,884)	-

Accumulated Investment in Mainland China as of December 31, 2022	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
NTD 1,136,673 (USD 33,880)	USD 34,000
NTD 237,078 (USD 7,180)	USD 8,000	(Note 4)
NTD 293,115 (USD 10,000)	USD 10,000

Note: Gain and loss on investment are translated using average exchange rates for the year ended December 31, 2023 (USD:NTD 1:31.177; CYN:NTD

1:4.4243). Additions and ending balance are translated using the exchange rates as at December 31, 2023 (USD:NTD 1:30.705; CYN:NTD 1:4.3352)

Note 1: The investment methods are divided into the following three types:

• (1) Investing directly to the Mainland China;
• (2) Reinvesting in the Mainland China through third-region companies (please refer to Table 8);
• (3) Others.

Note 2: In the current period, the investment profit and loss column is recognized:

• (1) If during incorporation with no investment income or loss, it should be indicated;
• (2) The basis for recognition of investment gains and losses divided into the following three types, which should be indicated:
• A. Audited financial statements by international accounting firms with cooperation relationship with accounting firms in the Republic of China.

B. Audited financial statements by parent company's auditors.

C. Others.

Note 3: The relevant figures in this form should be listed in New Taiwan Dollars.

(2)The Company's major transactions during year 2023 directly or indirectly through the third place and the mainland invested company are listed as follows:

• 1. Loans provided with mainland investment company: refer to Table 1 attached in Note 13.
• 1. Endorsements / guarantees with mainland investment company: refer to Table 2 attached in Note 13.
• 1. Significant transactions with mainland investment company: refer to Table 5 and Table 6 attached in Note 13.

Note 4: Enterprises approved by the Ministry of Economic Affairs as the operational headquarters are not subject to the amount or proportion.

Note 5: It is invested by Sunon Electronic (Kunshan) Co., Ltd.

• Note 6: The Board of Directors of Sunon Electronic (Kunshan) Co., Ltd., resolved on March 15, 2021 to increase capital out of retained earnings for USD 431 thousand, and completed registration on March 25, 2021.
• Note 7: The Board's of directors of Sunon Electronic (Foshan) Co., Ltd. approved in January 2021 to reduce capital by cash return for USD 13,660 thousand. Issued capital after capital reduction was USD 10,000 thousand. Company registration was completed. The Board of directors of Sunon Electronic (Foshan) Co., Ltd. approved in March 9, 2022 to reduce capital to offset accumulated deficits for USD 5,400 thousand. Issued capital after capital reduction was USD 4,600 thousand. Company registration was completed. The Board's of directors of Sunon Electronic (Foshan) Co.,LTD. Approved in June 2023 to reduce capital by cash return for USD 2,000 thousand. Issued capital after redaction was USD 2,600 thousand.Company registration was completed.
• Note 8: It is invested by Sunon Electronic (Foshan) Co., Ltd. and Sunon Electronic (Kunshan) Co., Ltd.

Note 9: The above-mentioned parent-subsidiary transactions have been eliminated.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. AND SUBSIDIARIES

INFORMATION ON MAJOR SHAREHOLDERS

DECEMBER 31, 2023

(Unit: share) Shares Name of Major Shareholder Number of Shares Percentage of Ownership (%) Yo Yuan Investment Corporation 14,825,000 5.42% Fu-Ing Hong Chen 14,725,000 5.38%

Note: The information of major shareholders is based on the number of ordinary shares and preferred shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (included treasury shares) by the Company as of December 31, 2023. The share capital in consolidated financial report may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.

Table 10

14.SEGMENT INFORMATION

(1) General information

For management purpose, the Group's reportable segments are listed as follows:

• A. Great China: Mainly engaging business in Taiwan and China.
• B. Europe and North America: Mainly engaging business in America and Europe.
• C. Other: Other areas.
• (2) Measurement basis

The Group uses profit before income tax as the measurement for segment profit and the basis of performance assessment. There was no material inconsistency between the accounting policies of the operating segment and the accounting policies described in Note 4.

(3) Segment financial information

					(In thousands)
Year 2023	Great China	Europe and North America	Other Areas	Elimination	Total
Sales from external customers	\$11,794,024	\$1,120,661	\$ -	\$ -	\$12,914,685
Sales among inter-segment	9,276,800	64	110,762	(9,387,626)	-
Total sales	\$21,070,824	\$1,120,725	\$110,762	(\$9,387,626)	\$12,914,685
Operating profit (loss)	\$2,710,905	\$82,183	(\$74,259)	(\$967,241)	\$1,751,588
Segment assets	\$ -	\$ -	\$ -	\$ -	\$12,614,731
Segment liabilities	\$ -	\$ -	\$ -	\$ -	\$5,396,003

a. Total reporting segment sales should eliminate inter-segment sales of \$9,387,626 thousand.

b. Income tax expense of \$417,654 thousand is not included in segment profit (loss).

(In thousands)

	Europe and North
Great China	America	Other Areas	Elimination	Total
\$12,630,295	\$1,433,013	\$ -	\$ -	\$14,063,308
12,277,228	273	1,979	(12,279,480)	-
\$24,907,523	\$1,433,286	\$1,979	(\$12,279,480)	\$14,063,308
\$2,104,304	\$103,512	(\$39,985)	(\$741,954)	\$1,425,877
\$ -	\$ -	\$ -	\$ -	\$12,191,969
\$ -	\$ -	\$ -	\$ -	\$6,989,492

• a. Total reporting segment sales should eliminate inter-segment sales of \$12,279,480 thousand.

• b. Income tax expense of \$336,782 thousand is excluded in segment profit (loss).

• (4) Production and service information: No disclosure required for only single industry in the Group.

• (5) Geographic information:

	Year ended December 31
Item	2023	2022
Asia	\$9,156,869	\$9,821,786
Europe	2,561,826	2,893,112
America	1,049,019	1,191,922
Others	146,971	156,488
Total	\$12,914,685	\$14,063,308

(6) Major customers: No revenue from any individual customer exceeds 10% of the Group's total revenues. Therefore, the disclosure is not required.