SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. PARENT COMPANY ONLYSTATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 AND INDEPENDENT AUDITORS' REPORT

Item		Page
1. Cover page		1
2. Contents		2
Independent auditors' 3. report		3
4. Balance sheets		4
5. Statements of comprehensive income		5
6. Statements of changes in equity		6
7. Statements of cash flows		7
8. Notes to financial statements
(1) General information		8
(2) The authorization of the parent company only	financial statements	8
(3) Application of new and amended standards	and interpretations	8~12
(4) Summary of significant accounting policies		12~27
(5) Critical accounting judgments, assumption uncertainty	estimates and key sources of	28~30
(6) Contents of significant accounts		31~60
(7) Related party transactions		60~64
(8) Pledged assets		65
(9) Significant contingent liabilities and unrecognized commitments	contract	65
(10) Significant disaster loss		65
(11) Significant subsequent events		65
(12) Others		65~74
(13) Supplementary disclosures		75
A. Significant transactions information		76~82
B. Information on investees		83~84
C. Information on investments in Mainland China		85~86
D. Major Shareholders		87
(14) Segment information		88
9. Statement of major accounting item		89~112

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PARENT COMPANY ONLY 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)	\$2,172,666	20.1	\$400,593	4.3
Notes receivable, net	6(3)	18,332	0.2	23,347	0.2
Accounts receivable, net	6(4)	1,870,229	17.3	2,367,582	25.2
Accounts receivable - related parties, net	6(4), 7	805,278	7.4	1,182,181	12.6
Other receivables		45,124	0.4	36,310	0.4
Other receivables - related parties	7	48,414	0.4	46,674	0.5
Inventories	6(5)	844,478	7.8	925,080	9.9
Prepayments		8,453	0.1	12,687	0.1
Total current assets		5,812,974	53.7	4,994,454	53.2
NONCURRENT ASSETS
Financial assets at fair value through other	6(6)	24,675	0.2	-	-
comprehensive income or loss - noncurrent
Investments accounted for using equity method	6(7)	3,813,745	35.4	3,198,115	34.1
Property, plant and equipment	6(8)	1,009,902	9.3	1,047,782	11.2
Right-of-use assets	6(9)	22,783	0.2	22,087	0.2
Investment properties, net	6(10)	84,738	0.8	85,106	0.9
Intangible assets	6(11)	13,895	0.1	18,038	0.2
Deferred income tax assets	6(28)	30,668	0.3	19,735	0.2
Refundable deposits		4,346	-	3,705	-
Total noncurrent assets		5,004,752	46.3	4,394,568	46.8
TOTAL ASSESTS		\$10,817,726	100.0	\$9,389,022	100.0
Liabilities and Equity
CURRENT LIABILITIES
Short-term loans	6(12)	\$ -	-	\$795,000	8.5
Contract liabilities - current	6(22)	101,629	0.9	131,201	1.4
Notes payables		10	-	-	-
Accounts payable		774,943	7.2	910,989	9.7
Accounts payable - related parties	7	1,666,211	15.4	1,228,537	13.1
Other payables	6(13)	421,320	3.9	364,564	3.9
Other payables - related parties	6(13), 7	16,944	0.2	26,579	0.3
Current tax liabilities	6(28)	83,521	0.8	176,251	1.9
Provisions - current	6(14)	18,784	0.2	17,879	0.2
Lease liabilities - current	6(9)	12,771	0.1	10,170	0.1
Advance receipts		571	-	-	-
Current portion of long-term loans	6(16)	88,889	0.8	88,889	0.9
Total current liabilities		3,185,593	29.5	3,750,059	40.0

		December 31, 2023		December 31, 2022
Liabilities and Equity	Note	Amount	%	Amount	%
NONCURRENT LIABILITIES
Long-term loans	6(16)	\$177,778	1.6	\$266,667	2.8
Deferred income tax liabilities	6(28)	195,556	1.8	121,315	1.3
Lease liabilities - noncurrent	6(9)	10,891	0.1	12,410	0.1
Net defined benefit liabilities - noncurrent	6(17)	28,731	0.3	35,667	0.4
Guarantee deposits		449	-	427	-
Total noncurrent liabilities		413,405	3.8	436,486	4.6
Total Liabilities		3,598,998	33.3	4,186,545	44.6
Share capital	6(18)
Ordinary shares		2,725,243	25.2	2,509,297	26.7
Bond conversion entitlement certificates		9,194	0.1	-	-
Capital surplus	6(19)	1,518,788	14.0	366,903	3.9
Retained earnings	6(20)
Legal reserve		995,720	9.2	885,799	9.4
Special reserve		257,757	2.4	295,358	3.1
Unappropriated earnings		2,012,211	18.6	1,402,877	15.0
Other equity	6(21)	(300,185)	(2.8)	(257,757)	(2.7)
Total Equity		7,218,728	66.7	5,202,477	55.4
TOTAL LIABILITIES AND EQUITY		\$10,817,726	100.0	\$9,389,022	100.0

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. PANENT COMPANY ONLY 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(22)	\$9,638,747	100.0	\$11,762,491	100.0
OPERATING COSTS	6(5)	(8,030,184)	(83.3)	(10,020,961)	(85.2)
GROSS PROFIT		1,608,563	16.7	1,741,530	14.8
UNREALIZED GROSS PROFIT ON SALES TO		(72,864)	(0.8)	(93,389)	(0.8)
SUBSIDIARIS AND ASSOCIATES
REALIZED GROSS PROFIT ON SALES TO		93,389	1.0	41,344	0.4
SUBSIDIARIS AND ASSOCIATES
OPERATING EXPENSES
Sales and marketing		(368,026)	(3.8)	(343,972)	(2.9)
General and administrative		(331,717)	(3.4)	(305,386)	(2.6)
Research and development		(503,429)	(5.3)	(448,231)	(3.8)
Expected credit gain (loss)	6(4)	1,389	-	193	-
Total operating expenses		(1,201,783)	(12.5)	(1,097,396)	(9.3)
INCOME FROM OPERATIONS		427,305	4.4	592,089	5.1
NON-OPERATING INCOME AND EXPENSES
Interest revenue	6(24)	67,965	0.7	6,824	0.1
Other income	6(25)	207,984	2.2	153,464	1.3
Other gains and losses	6(26)	(27,883)	(0.3)	(72,469)	(0.6)
Finance costs	6(27)	(18,580)	(0.2)	(13,560)	(0.1)
Share of profits of subsidiaries, associates and		925,489	9.6	687,903	5.8
joint ventures
Total non-operating income and expenses		1,154,975	12.0	762,162	6.5
INCOME BEFORE INCOME TAX		1,582,280	16.4	1,354,251	11.6
INCOME TAX EXPENSE	6(28)	(248,346)	(2.6)	(265,156)	(2.3)
NET INCOME		1,333,934	13.8	1,089,095	9.3
OTHER COMPREHENSIVE INCOME (LOSS)	6(29)
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	0.1	-	-
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	0.1	10,112	0.1
to profit or loss
Items that may be reclassified subsequently
to profit or loss:
Share of other comprehensive loss of subsidiaries,		(59,363)	(0.6)	47,000	0.4
associates and joint ventures
Income tax benefit related to items that may		11,872	0.1	(9,399)	(0.1)
be reclassified subsequently to profit or loss
Total items that may be reclassified subsequently		(47,491)	(0.5)	37,601	0.3
to profit or loss
Total other comprehensive loss, net of income tax		(42,291)	(0.4)	47,713	0.4
TOTAL COMPREHENSIVE INCOME		1,291,643	13.4	1,136,808	9.7
EARNINGS PER SHARE
Basic	6(30)	\$5.16		\$4.34
Diluted	6(30)	\$5.07		\$4.33

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

								Others Equity
							Exchange	Unrealized
		Capital Stock			Retained Earnings		Differences on	Gain (Loss) on Financial
		Certificate of Bond				Unappropriated	Translating Foreign	Assets at Fair Value Through	Total
	Ordinary Shares	Exchange Rights	Capital Surplus	Legal Reserve	Special Reserve	Earnings	Operations	Other Comprehensive income	Equity
BALANCE AT JANUARY 1, 2022	\$ 2,509,297	\$ -	\$ 366,903	\$ 842,984	\$ 242,095	\$ 700,864	\$ (295,358)	\$ -	\$ 4,366,785
Appropriations and distributions of prior years' earnings:
Legal reserve	-	-	-	42,815	-	(42,815)	-	-	-
Special reserve	-	-	-	-	53,263	(53,263)	-	-	-
Cash dividends - \$1.2 per share	-	-	-	-	-	(301,116)	-	-	(301,116)
Net income in 2022	-	-	-	-	-	1,089,095	-	-	1,089,095
Other comprehensive income (loss) in 2022, net of income tax	-	-	-	-	-	10,112	37,601	-	47,713
Total comprehensive income in 2022	-	-	-	-	-	1,099,207	37,601	-	1,136,808
BALANCE AT DECEMBER 31, 2022	2,509,297	-	366,903	885,799	295,358	1,402,877	(257,757)	-	5,202,477
Appropriations and distributions of prior years' earnings:
Legal reserve	-	-	-	109,921	-	(109,921)	-	-	-
Cash dividends - \$2.6 per share	-	-	-	-	-	(652,417)	-	-	(652,417)
Special reserve	-	-	-	-	(37,601)	37,601	-	-	-
Due to the issuance of convertible corporate bonds	-	-	1,151,885	-	-	-	-	-	1,151,885
, the equity component items are recognized - stock options
Net income in 2023	-	-	-	-	-	1,333,934	-	-	1,333,934
Other comprehensive income (loss) in 2023, net of income tax	-	-	-	-	-	137	(47,491)	5,063	(42,291)
Total comprehensive income in 2023	-		-	-	-	1,334,071	(47,491)	5,063	1,291,643
Convertible corporate bond conversion	-	225,140	-	-	-	-	-	-	225,140
Bond conversion entitlement certificate	215,946	(215,946)	-	-	-	-	-	-	-
BALANCE AT DECEMBER 31, 2023	\$ 2,725,243	\$ 9,194	\$ 1,518,788	\$ 995,720	\$ 257,757	\$ 2,012,211	\$ (305,248)	\$5,063	\$ 7,218,728

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PARENT COMPANY ONLY 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	\$	1,582,280	\$	1,354,251
Adjustments :
Adjustments to reconcile profit (loss)
Depreciation expense		61,512		64,680
Amortization expense		14,422		12,514
Expected credit loss (gain)		(1,389)		(193)
Net loss (gain) on financial assets and liabilities at fair value through profit or loss		(8,406)		-
Interest expense		18,580		13,560
Interest income		(67,965)		(6,824)
Share of profits of subsidiaries, associates and joint ventures		(925,489)		(687,903)
Loss (gain) on disposal and retirement of property, plant and equipment		(496)		(1,105)
Unrealized gross profit on sales to subsidiaries and associates		72,864		93,389
Realized gross profit on sales to subsidiaries and associates		(93,389)		(41,344)
Other		40,425		8,430
Total adjustments to reconcile profit and loss		(889,331)		(544,796)
Net changes in operating assets and liabilities
Decerase (increase) in notes receivable		5,015		9,230
Decrease (increase) in accounts receivable		498,742		(294,662)
Decrease (increase) in accounts receivable - related parties		376,903		(437,680)
Decrease (increase) in other receivables		(3,128)		(12,764)
Decrease (increase) in other receivables - related parties		(1,740)		(19,254)
Decrease (increase) in inventories		80,602		(24,710)
Decrease (increase) in prepayments		3,946		429
Total changes in operating assets		960,340		(779,411)
Net changes in operating liabilities
Increase (decrease) in contract liabilities		(29,572)		64,155
Increase (decrease) in notes payable		10		-
Increase (decrease) in accounts payable		(136,046)		86,659
Increase (decrease) in accounts payable - related parties		437,674		29,958
Increase (decrease) in other payables		60,962		127,240
Increase (decrease) in other payables - related parties		(9,635)		4,902
Increase (decrease) in provisions		905		3,606
Increase (decrease) in advance receipts		571		(2)
Increase (decrease) in net defined benefit liabilities		(6,765)		(6,740)
Total changes in operating liabilities		318,104		309,778
Total net changes in operating assets and liabilities		1,278,444		(469,633)
Total adjustments		389,113		(1,014,429)

	Year Ended December 31
	2023	2022
Cash generated from operations	\$1,971,393	\$339,822
Interest received	62,279	6,357
Dividends received	386,977	229,245
Interest paid	(14,963)	(13,199)
Income tax paid	(265,930)	(162,985)
Net cash generated from operating activities	2,139,756	399,240
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of financial assets at fair value through other comprehensive	(20,000)	-
income or loss
Acquisition of investments accounted for using equity method	(217,215)	(105,266)
Proceeds from capital reduction of investments accounted for using equity method	61,820	-
Acquisition of property, plant and equipment	(13,094)	(68,569)
Proceeds from disposal of property, plant and equipment	280	8,315
Increase in refundable deposits	(641)	(991)
Acquisition of intangible assets	(12,011)	(12,809)
Net cash used in investing activities	(200,861)	(179,320)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term loans	-	175,000
Decrease in short-term loans	(795,000)	-
Issuance of corporate bonds	1,381,273	-
Repayment of long-term loans	(88,889)	(181,444)
Increase in guarantee deposits	22	2
Repayments of lease principal	(11,811)	(11,739)
Cash dividends paid	(652,417)	(301,116)
Net cash generated from (used in) financing activities	(166,822)	(319,297)
NET INCREASE (DECREASE) IN CASH AND CASH	1,772,073	(99,377)
EQUIVALENTS
CASH AND CASH EQUIVALENTS - BEGINNING	400,593	499,970
OF YEAR
CASH AND CASH EQUIVALENTS - END OF YEAR	\$ 2,172,666	\$ 400,593

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 parent company only financial statements are presented in the Company's functional currency, New Taiwan Dollars.

2. THE AUTHORIZATION OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

The parent company only 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 Company has evaluated the aforementioned standards and interpretations, and there is no significant effect on the Company's financial position and performance.

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

	Effective Date Announced
New IFRSs	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 "
"Supplier finance Amendments to IAS 7 and IFRS 7	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 Company has evaluated the aforementioned standards and interpretations, and there is no significant effect to the Company'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

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The principal accounting policies applied in the preparation of these parent company only 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 parent company only financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

(2) Basis of preparation
A.Except for the following items, the accompany parent company only 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 Company's accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.
C.When preparing the parent company only financial statements, the Company accounts for subsidiaries and associates by using the equity method. In order to agree with the amount of net income, other comprehensive income and equity attributable to shareholders of the parent in the consolidated financial statements, the differences of the accounting treatment between the parent company only basis and the consolidated basis are adjusted under the heading of investments accounted for using equity method, share of profits of subsidiaries and associates and share of other comprehensive income of subsidiaries and associates in the parent company only financial statements.

(3) Foreign currency translation

A. Foreign currency transactions and balance
a.Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions are recognized in profit or loss in the period in which they arise.
b.Monetary assets and liabilities denominated in foreign currencies at the period end are retranslated at the exchange rates prevailing at the balance sheet date. Exchange differences arising upon re-translation at the balance sheet date are recognized in profit or loss.
c.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.
B. Translation of foreign operations
a.The operating results and financial position of all the Company's subsidiaries, associates and joint ventures that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
- (a) Assets and liabilities for each balance sheet presented are translated at the

closing exchange rate at the date of that balance sheet;

(b) Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
(c) All resulting exchange differences are recognized in other comprehensive income.
b.When the foreign operation partially disposed of or sold is an associate or a joint venture, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. In addition, even when the Company retains partial interest in the former foreign associate or joint venture after losing significant influence over the former foreign associate or joint venture, such transactions should be accounted for as disposal of all interest in these foreign operations.
c.When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. In addition, even when the Company retains partial interest in the former foreign subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interest in the foreign operation.
(4) 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 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.

(5) 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.)

(6) Financial instruments

Financial assets and financial liabilities are recognized when the Company 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:

i. The financial asset is held within a business model whose objective is to

hold financial assets in order to collect contractual cash flows; and

ii. 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:

i. Purchased or originated credit-impaired financial assets: for those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
ii. 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 Company 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 Company always recognize lifetime Expected Credit Loss (i.e. ECL) for accounts receivables. For other financial assets, the Company 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 Company 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 Company recognizes an impairment 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 Company 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 Company has transferred substantially all risks and rewards of ownership of the financial asset.
(c) The Company 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 assets 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 Company 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 Company 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 Company derecognizes financial liabilities when, and only when, the Company'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 Company 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 Company 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 Company 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.

(7) 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.

(8) Investments accounted for using the equity method / subsidiaries
A.Subsidiaries are all entities (including structured entities) controlled by the Company. The Company controls an entity when the Company 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.
B.Unrealized gains or losses resulting from inter-company transactions with subsidiaries are eliminated. Necessary adjustments are made to the accounting policies of subsidiaries, to be consistent with the accounting policies of the Company.
C.After acquisition of subsidiaries, the Company recognizes proportionately the share of profit and loss and other comprehensive income in the income statement as part of the Company's profit and loss and other comprehensive income, respectively. When the share of loss from a subsidiary exceeds the carrying amount of Company's interest in that subsidiary, the Company continues to recognize its share in the subsidiary's loss proportionately.
D.As long as the change in shareholding in the subsidiaries does not lead to loss of control, it is to be treated as equity transaction that is to be treated as transactions between the owners. The difference between non-controlling equity adjustment amount and the fair value of payment and receipt is to be recognized as equity.
E.When the Company loses control of a subsidiary, it recognizes the investment retained

in the former subsidiary at its fair value at the date when control is lost. The difference between the fair value of the retained investment plus any consideration received and the carrying amount of the previous investment at the date when control is lost is recognized as a gain or loss in profit or loss. Besides, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Company had directly disposed of the related assets or liabilities. It should reclassify the amount previously recognized in other comprehensive income to profit or loss. When the Company loses control of a subsidiary, gain or loss previously recognized in equity should be reclassified to profit or loss.

F. Pursuant to the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," profit (loss) of the current period and other comprehensive income in the parent company only financial statements shall equal to the amount attributable to owners of the parent in the consolidated financial statements. Owners' equity in the parent company only financial statements shall equal to equity attributable to owners of the parent in the consolidated financial statements.
(9) 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 Company 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. Service lives estimated as follows:

Buildings:

Main building, 20 to 57 years; Others, 2 to 39 years; Machinery and equipment, 2 to 10 years; Other equipment, 2 to 24 years; Leasehold improvement, 2 to 22 years;

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.

(10)Leases/The Company as a lessee

The Company 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 Company 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 Company 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 Company 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 parent company only balance sheet.

(11)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.

(12)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.

(13)Impairment of non-financial assets

The Company 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.

(14)Provisions

Provisions are recognized when the Company 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.

(15)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 Company 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 Company 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 Company'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 Company 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.

(16)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 Company 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 Company'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.

(17)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.

(18)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.

(19)Revenue Recognition

The Company recognizes revenues based on the following steps:

A.Identifying the contracts;
B.Identifying obligations in the contracts;
C. Determining prices;
D.Allocating prices into the obligations in the contracts;
E. Recognizing revenues while fulfilling the obligations.

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

The Company does not adjust the promised amount of consideration for the effects of a significant financing component if the period between when the Company 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.

A.Goods sales

The Company 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 Company recognizes revenues and accounts receivable at the point and presents it in net term after deducting sales return, quantity discount and sales allowance.

The Company 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.

B.Service revenue

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

(20)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.

(21)Government subsidy

Government subsidies are recognized at fair value when it is reasonably certain that the Company 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 Company's parent company only 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 Company assesses the business model of financial assets based on the hierarchy that reflects the Company 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 Company 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 Company delays the adjustment of the subsequent classification of financial assets. The Company 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 Company 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 Company is acting as a principal or an agent in that transaction. When the Company acts as an agent, revenue is recognized on a net basis.

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

a. The Company gains control over the goods from the other party before transferring goods to customers.
b. The Company 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 Company 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 Company controls the goods or services before transferring goods or services to customers:

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

C. Lease term

In determining the lease term, the Company considers all the facts and circumstances that create an economic incentive to exercise (or not exercise) on 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 Company's operations, etc. The lease term is reassessed if a significant change in circumstance that are within the control of the Company occurs.

(2) Critical accounting estimates and assumptions

A. Revenue Recognition

The Company 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 Company uses judgement in making these assumptions and in selecting the inputs to the impairment calculation, based on the Company'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 Company 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 Company 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 Company 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 Company 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 Company strategy might cause material impairment on assets in the future.

E. Impairment assessment on investment using equity method

The Company 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 is not be recoverable. The Company 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 Company must determine the net realisable value of inventories on balance sheet date using judgements and estimates. The Company 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 Company 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 may have a significantly impact on 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	\$510	\$489
Cash in banks	2,172,156	400,104
Total	\$2,172,666	\$400,593

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

B. The Company 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 - noncurrent
Redemption and put	\$	-	\$	-
options of convertible bonds

A. The Company recognized net gain (loss) of financial assets at fair value through profit or loss of \$8,406 thousand, \$0 thousand for the years ended December 31, 2023 and 2022, respectively.
B. The Company has 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	\$18,356	\$23,371
Less: Loss allowance	(24)	(24)
Net	\$18,332	\$23,347

A. The Company 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	\$2,681,010	\$3,556,655
Less: Loss allowance	(5,503)	(6,892)
Net	\$2,675,507	\$3,549,763

A. The accounts receivable that were neither past due nor impaired was following the Company'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 Company had no account receivable pledged to others.
C. To reduce major credit risk, the Company bought credit guarantee insurance.
D. Please refer to Note 7 for accounts receivable with related parties.
E. The Company 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 company 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 customer's financial conditions, competitiveness and business outlook.
F. The Company measures the loss allowance for notes receivable, accounts receivable and other receivables according to the preparation matrix (including related parties):

December 31, 2023	Expected Credit Loss Rate	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
Not past due	0.05%-5%	\$2,516,594	(\$5,108)	\$2,511,486
Past due within 30 days	0.05%-5%	242,633	(384)	242,249
Past due 31-90 days	0.05%-5%	33,677	(35)	33,642
Past due over 91 days	0.05%-5%	-	-	-
Total		\$2,792,904	(\$5,527)	\$2,787,377

December 31, 2022	Expected Credit Loss Rate	Gross Carrying Amount	Loss Allowance (Lifetime ECL)	Amortized Cost
Not past due	0.05%-5%	\$3,321,164	(\$6,249)	\$3,314,915
Past due within 30 days	0.05%-5%	260,593	(658)	259,935
Past due 31-90 days	0.05%-5%	62,724	(8)	62,716
Past due over 91 days	0.05%-5%	18,529	(1)	18,528
Total		\$3,663,010	(\$6,916)	\$3,656,094

G. Movements of the loss allowance for notes receivable and accounts receivable (include related parties) were as follows:

	Year Ended December 31
Item	2023	2022
Beginning balance	\$6,916	\$7,109
Add: Provision for impairment	-	-
Less: Reversal of impairment	(1,389)	(193)
Less: Write-offs	-	-
Ending balance	\$5,527	\$6,916

The above provision has already taken into consideration of collateral or other credit enhancement. The other credit enhancement possessed by above receivables were \$686,247 thousand and \$807,995 thousand as of December 31, 2023 and 2022, respectively.

The Company 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 Company 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 Company's trade receivables for offsetting the contract amount are both \$0 thousand for the years ended December 31, 2023 and 2022, respectively.

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

	December 31
Item	2023	2022
Raw materials	\$238,379	\$284,668
Supplies	1,164	2,456
Work in process	18,711	51,325
Finished goods	586,224	586,631
Net	\$844,478	\$925,080

(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	\$7,925,681	\$9,930,571
Unallocated overheads and labor cost	87,860	79,353
Loss (Gain) on inventory valuation	41	9,532
Others	16,602	1,505
Total	\$8,030,184	\$10,020,961

B. In 2023 and 2022, the company wrote down the inventory to the net realizable value, or due to the price increase of some products and the digestion of some inventory, the inventory price reduction and sluggish loss (recovery benefit) were recognized as 41 thousand and 9,532 thousand respectively.

C. The Company had no inventories pledged to others.

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

	December 31
Item	2023	2022
Equity instruments
Unlisted stocks	\$ 20,000	\$	-
Evaluation adjustment	4,675		-
Total	\$ 24,675	\$	-

A. The Company 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 Company 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 Company 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.

	December 31
Item	2023	2022
Subsidiaries:
Successful Century Co., Ltd.	\$1,777,566	\$1,593,644
BVI Sunon International Limited	1,138,249	906,609
Sunon INC	203,066	167,976
Sunon SAS	78,976	57,156
Sunonwealth Electric Machine Ind. (H.K.) Ltd.	1,861	1,903
Sunon Corporation	1,651	1,834
Sunon Electronics India Private Limited	4,306	3,820
Sunon Electronics Philippines Corp.	210,577	95,236
Sunon Properties Philippines Corp.	397,493	369,937
Total	\$3,813,745	\$3,198,115

(7) Investments accounted for using the equity method

A. For more information regarding the subsidiaries of the Company, please refer to Note 4(3) to the Company's consolidated financial statements of 2023.

B. The investments accounted for by the equity method and the share of profit or loss and other comprehensive income of those investments for the years ended December 31, 2023 and 2022 were based on the subsidiaries' financial statements audited by auditors for the same years, except for Sunonwealth Electric Machine Ind.(H.K.) Ltd., Sunon Corporation and Sunon Electronics India Private Limited. The Company considered no material adjustments had these subsidiaries' financial statements been audited.
C. The Company had no investments accounted for using equity method pledged to others as of December 31, 2023 and 2022.

(8) Property, plant and equipment

	December 31
Item	2023	2022
Land	\$820,335	\$820,335
Buildings	218,607	215,928
Machinery and equipment	192,665	185,365
Miscellaneous equipment	44,807	55,842
Leasehold improvements	40,467	40,467
Equipment to be inspected and construction in progress	7,157	15,365
Total cost	\$1,324,038	\$1,333,302
Less: Accumulated depreciation	(314,136)	(285,520)
Net	\$1,009,902	\$1,047,782

						Equipment to be Inspected and
			Machinery and	Miscellaneous	Leasehold	Construction in
	Land	Buildings	Equipment	Equipment	Improvement	Progress	Total
Cost
Balance at January 1, 2023	\$820,335	\$215,928	\$185,365	\$55,842	\$40,467	\$15,365	\$1,333 ,302
Additions	-	1,242	1,217	3,068	-	5,908	11,435
Disposals	-	-	(6,596)	(14,103)	-	-	(20,699)
Reclassification	-	1,437	12,679	-	-	(14,116)	-
Balance at December 31, 2023	\$820,335	\$218,607	\$192,665	\$44,807	\$40,467	\$7,157	\$1,324,038
Accumulated depreciation and impairment
Balance at January 1, 2023	\$ -	\$101,995	\$103,124	\$42,468	\$37,933	\$ -	\$285,520
Depreciation	-	7,778	31,609	7,916	1,644	-	48,947
Disposals	-	-	(6,227)	(14,104)	-	-	(20,331)
Reclassification	-	-	-	-	-	-	-
Balance at December 31, 2023	\$ -	\$109,773	\$128,506	\$36,280	\$39,577	\$ -	\$314,136

						Equipment to be Inspected and
	Land	Buildings	Machinery and Equipment	Miscellaneous Equipment	Leasehold Improvement	Construction in Progress	Total
Cost
Balance at January 1, 2022	\$802,249	\$196,906	\$165,862	\$64,466	\$40,467	\$22,566	\$1,292,516
Additions	-	1,435	2,365	1,604	-	57,296	62,700
Disposals	-	-	(10,257)	(11,657)	-	-	(21,914)
Reclassification	18,086	17,587	27,395	1,429	-	(64,497)	-
Balance at December 31, 2022	\$820,335	\$215,928	\$185,365	\$55,842	\$40,467	\$15,365	\$1,333,302
Accumulated depreciation and impairment
Balance at January 1, 2022	\$ -	\$94,971	\$78,052	\$41,380	\$36,063	\$ -	\$250,466
Depreciation	-	7,024	31,518	12,149	1,870	-	52,561
Disposals	-	-	(5,628)	(11,656)	-	-	(17,284)
Reclassification	-	-	(595)	595	-	-	-
Disposals		-	(223)	-	-		(223)
Balance at December 31, 2022	\$ -	\$101,995	\$103,124	\$42,468	\$37,933	\$ -	\$285,520

A. The details of interest capitalized: None.

B. The Company does 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	\$11,435	\$62,700
Decrease (increase) in equipment payable	1,659	5,869
Cash paid for acquisition of property, plant and equipment	\$13,094	\$68,569

(9) Lease agreement

A. Right-of-use assets

	December	31
Item	2023	2022
Land and building	\$52,390	\$49,189
Other equipment	11,344	10,263
Total cost	\$63,734	\$59,452
Less: Accumulated depreciation and impairment	(40,951)	(37,365)
Net	\$22,783	\$22,087

Cost	Land and Buildings	Other Equipment	Total
Balance at January 1, 2023	\$49,189	\$10,263	\$59,452
Additions	7,862	5,561	13,423
Disposals	(125)	(405)	(530)
Derecognition	(4,536)	(4,075)	(8,611)
Balance at December 31, 2023	\$52,390	\$11,344	\$63,734
Accumulated Depreciation and Impairment
Balance at January 1, 2023	\$30,394	\$6,971	\$37,365
Depreciation	8,650	3,547	12,197
Derecognition	(4,536)	(4,075)	(8,611)
Balance at December 31, 2023	\$34,508	\$6,443	\$40,951
Cost	Land and Buildings	Other Equipment	Total
Balance at January 1, 2022	\$53,056	\$9,950	\$63,006
Additions	1,212	1,556	2,768
Disposals	(754)	-	(754)
Derecognition	(4,325)	(1,243)	(5,568)
Balance at December 31, 2022	\$49,189	\$10,263	\$59,452

Accumulated Depreciation and Impairment

Balance at January 1, 2022	\$25,887	\$5,310	\$31,197
Depreciation	8,832	2,904	11,736
Derecognition	(4,325)	(1,243)	(5,568)
Balance at December 31, 2022	\$30,394	\$6,971	\$37,365

B. Lease liabilities

	December 31
Item	2023	2022
Carrying amount of lease liabilities
- current	\$12,771	\$10,170
- noncurrent	\$10,891	\$12,410

Ranges of discount rates for lease liabilities were as follows:

	December	31
Item	2023	2022
Land and buildings	0.63%-1.77%	0.63%-0.96%
Other equipment	0.72%-1.77%	0.66%-1.09%

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

C. Material lease-in activities and terms

The Company leased some land and buildings, etc. as factory, with the lease terms of 1 to 8 years. There is no sign of impairment of right-of-use assets as of December 31, 2023. Therefore, the Company didn't assess the impairment.

D. Sublet: None.

E. Other lease information:
(1) Please refer to Note 6(8) for the agreements to lease investment properties under operating lease.
(2) The current lease relevant expense information was as follows:

	Year Ended December 31
Item	2023	2022
Short-term lease expense	\$100	\$102
Low-value asset lease expense	\$13	\$13
Variable lease payments that excluded in the measurement of lease liabilities	\$ -	\$ -
Total cash outflow for leases (Note)	(\$11,924)	(\$11,854)

(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 impairment	and	(32,433)	(32,065)
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

(10) Investment properties, net

A. Rent income and direct operating expense 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 rental 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 was 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 Company 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 Company had no investment properties pledged to others.

(11) Intangible assets

	December 31
Item	2023	2022
Trademark	\$3,126	\$3,126
Computer software	25,056	28,173
Total cost	\$28,182	\$31,299
Less: Accumulated amortization	(14,287)	(13,261)
Net	\$13,895	\$18,038

	Trademark	Computer Software	Total
Cost
Balance at January 1, 2023	\$3,126	\$28,173	\$31,299
Additions	-	9,991	9,991
Derecognition	-	(13,108)	(13,108)
Balance at December 31, 2023	\$3,126	\$25,056	\$28,182
Accumulated amortization and impairment
Balance at January 1, 2023	\$ -	\$13,261	\$13,261
Amortization	-	14,134	14,134
Derecognition	-	(13,108)	(13,108)
Balance at December 31, 2023	\$ -	\$14,287	\$14,287
	Trademark	Computer Software	Total
Cost
Balance at January 1, 2022	\$3,126	\$22,171	\$25,297
Additions	-	14,673	14,673
Derecognition	-	(8,671)	(8,671)
Balance at December 31, 2022	\$3,126	\$28,173	\$31,299
Accumulated amortization and impairment
Balance at January 1, 2022	\$ -	\$9,911	\$9,911
Amortization	-	12,021	12,021
Derecognition	-	(8,671)	(8,671)

(12) Short-term loans

December 31, 2023:None.

	December 31, 2022
Borrowings Nature	Amount	Interest
Unsecured loan	\$795,000	1.43%-1.76%

		December 31
Item	2023	2022
Accrued payroll	\$242,584	\$200,158
Commission payable	11,407	23,763
Service fee payable	9,500	8,838
R & D payable	28,872	27,850
Bonus to employees and remuneration to directors	49,800	40,000
Equipment payable	3,268	4,927
Others	92,833	85,607
Total	\$438,264	\$391,143

(13) Other payables (including other payables - related parties)

Please refer to Note 7 for other payables with related parties.

(14) Provisions - current

	December 31
Item	2023	2022
Employee benefits	\$18,784
	Year Ended December 31
Item	2023	2022
Beginning balance	\$17,879	\$14,273
Additional provisions recognized	905	3,606
Provisions used	-	-
Ending balance	\$18,784	\$17,879

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

(15) Bonds Payable

	Year Ended 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.

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

	December 31
Item	2023	2022
Unsecured loan	\$266,667	355,556
Less: portion due within one year	(88,889)	(88,889)
Long-term loans	\$177,778	\$266,667
Interest rate range	1.83%	1.69%

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

(17) Pension

A. Defined contribution plans
a. The plan under the Labor Pension Act (the "Act") is deemed a defined contribution plan. Pursuant to the Company has made monthly contributions equal to 6% of each employee's monthly salary to employees' pension accounts.
b. The total expenses recognized in the statements of comprehensive income were \$26,546 thousand and \$24,110 thousand, representing the contributions payable to these plans by the Company at the rates specified in the plans for the years ended December 31, 2023 and 2022, respectively.
B. Defined benefit plans
a. The Company has 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 6% 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 Company is 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 Company does not have any right to intervene in the investments of the Funds.
b. The amounts arising from the defined benefit obligation of the Company in the 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

	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 amounts included in net interest	\$ -	(\$230)	(\$230)
expense) Actuarial loss (gain) - Changes in demographics assumptions	-	-	-
Changes in financial assumptions	-	-	-
Experience adjustments	59	-	59
Recognized in other comprehensive	\$59	(\$230)	(\$171)
income
Contributions from the employer	\$ -	(\$7,200)	(\$7,200)
Benefits paid from plan assets	-	-	-
Balance at December 31	\$74,208	(\$45,477)	\$28,731

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

	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 amounts included in net interest	\$ -	(\$2,278)	(\$2,278)
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	(\$10,362)	(\$2,278)	\$12,640
income
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 Company 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.

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.

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

(18) Share capital

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

		Year Ended December 31, 2023
Item	Shares (in thousands)	Amount
Balance at January 1	250,930	\$2,509,297
Capital increase in cash	-	-
Conversion of bonds payable	21,595	215,946
Balance at December 31	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	-	-
Conversion of bonds payable	-	-
Balance at December 31	250,930	\$2,509,297

B. As of December 31, 2023, the authorized capital is \$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.

(19) 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.

(20)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 remaining profit, setting aside a special reserve in accordance with the laws and 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

	December 31
Item	2023	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 had been resolved at the shareholders'
meeting in June 2023	and	2022, respectively. Details were summarized below:

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

(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 appropriations 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.

(21) Other 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 Unrealized gain (loss) on financial	(47,491)	-	(47,491)
assets at fair value through other comprehensive income	-	4,675	4,675
Use the equity method to recognize shares of subsidiaries, affiliated enterprises and joint ventures		388	388
Balance, December 31, 2023	(\$305,248)	\$5,063	(\$300,185)

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, 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)

(22) Operating revenues

	Year Ended December 31
Item	2023	2022
Revenue from contracts with customer
Total revenues	\$9,741,519	\$11,798,157
Sales returns	(37,925)	(10,750)
Sales discount	(64,847)	(24,916)
Net	\$9,638,747	\$11,762,491

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 Company's timing of revenue recognition is transferred the goods at a certain point of time.
C. Contract balances

The Company recognizes the receivable, contract assets and contract liabilities related to contract revenue as follows:

	December 31
Item	2023	2022
Receivable	\$2,693,839	\$3,573,110
Contract assets	-	-
Total	\$2,693,839	\$3,573,110
Contract liabilities - current	\$101,629	\$131,201

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 changes.

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	\$131,201	\$67,046
From previous period's satisfied performance obligations	\$ -	\$ -

	Year ended December 31, 2023
Item	Operating cost	Operating expenses	Total
Labor cost
Salaries	\$55,913	\$633,738	\$689,651
Insurance	6,012	49,359	55,371
Pension	2,500	24,481	26,981
Remuneration to	-	10,000	10,000
directors
Others	6,363	41,265	47,628
Depreciation	18,039	43,473	61,512
Amortization	628	13,794	14,422
Total	\$89,455	\$816,110	\$905,565

(23) Labor cost, depreciation and amortization

Year ended December 31, 2022

Item	Operating cost	Operating expenses	Total
Labor cost
Salaries	\$46,966	\$562,939	\$609,905
Insurance	4,773	43,512	48,285
Pension	2,157	22,213	24,370
Remuneration to	-	8,000	8,000
directors
Others	7,138	41,388	48,526
Depreciation	19,252	45,428	64,680
Amortization	491	12,023	12,514
Total	\$80,777	\$735,503	\$816,280

Additional information of the number of employees and employee benefits expenses for the years ended December 31, 2023 and 2022 were as follows:

	December 31
Item	2023	2022
The number of employees	635	602
The number of directors who were not adjunct employees	6	6
Average employee benefits expenses	\$1,303	\$1,227
Average employee salary	\$1,096	\$1,023
Changes in adjusting average employee salary	7.14%	28.36%

1. The Company's salary and remuneration policy, including that for directors, managers and employees, is as follows:
(1) Directors' remuneration:
- A. The Company's Articles of Incorporation clearly stipulate that not higher than 5% of the annual profit shall be allocated as the director's remuneration.
- B. The remuneration to the directors shall be determined by the Board of Directors according to their degree of participation in the operation of the Company, the value of their contribution, and the usual standards of the industry.
(2) Managers' remuneration:

The remuneration to the managers is based on their duties, contributions, and the Company's annual operation performance and in consideration of the Company's future risks, and is reviewed by the remuneration committee and submitted to the Board of Directors for resolution.

(3) Employees' compensation:

The employees' compensation includes monthly salary and various bonuses, annual year-end and performance bonuses, as well as remuneration issued by the Company based on annual profitability.

A. The Company's various salary awards are issued in accordance with the Company's various salary and bonus systems.
B. The Company's Articles of Incorporation clearly stipulate that not less than 2% of the annual profit is used as employees' compensation. The distribution method is proposed by the remuneration committee to the Board of Directors and issued after the Board of Directors' approval.
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 financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.
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 parent company only financial statement 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.

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.

(24) Interest income

	Year Ended December 31
Item	2023	2022
Interest on bank deposits	\$66,091	\$4,522
Interest on early payment	1,828	2,287
Others	46	15
Total	\$67,965	\$6,824

(25) Other income

	Year Ended December 31
Item	2023	2022
Rental income	\$1,974	\$1,839
Others – Trademark & Patent income	80,249	14,548
Others – sample sales, etc.	40,849	49,668
Others	84,912	87,409
Total	\$207,984	\$153,464

(26) Other gains and losses

	Year Ended December 31
Item	2023	2022
Gain on disposal of property, plant and equipment	\$496	\$1,105
Net currency exchange loss	(34,809)	(72,482)
Gain of financial liability at fair value through profit or loss	8,406	-
Others	(1,976)	(1,092)
Total	(\$27,883)	(\$72,469)

(27) Finance costs

	Year Ended December 31
Item	2023	2022
Interest on loans	\$14,198	\$13,341
Interest on lease liabilities	238	219
Interest of convertible bonds	4,144	-
Finance costs	\$18,580	\$13,560

(28) Income tax expense

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

	Year Ended December 31
Current income tax	2023	2022
Current tax expense	\$208,236	\$202,819
Undistributed surplus for income tax	17,639	-
Adjustments in tax of prior periods	(52,675)	(5,294)
Total	\$173,200	\$197,525
Deferred income tax
The origination and reversal of temporary differences	\$75,146	\$67,631
Total	\$75,146	\$67,631
lncome tax expense	\$248,346	\$265,156

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

Item	Year Ended December 31
	2023	2022
Share of other comprehensive loss of	(\$11,872)	\$9,399
subsidiaries, associates and joint ventures
Remeasurement of defined benefit plans	34	2,528
Total	(\$11,838)	\$11,927

	Year Ended December 31
Item	2023	2022
Income before income tax	\$1,582,280	\$1,354,251
Income tax expense at the statutory rate	\$316,456	\$270,850
Tax effect of adjusting items:
Loss (Gain) on investment under equity method	(185,098)	(137,581)
Other adjustments	76,878	69,550
Undistributed surplus for income tax	17,639	-
Adjustments for prior year's tax adjustments	(52,675)	(5,294)
Deferred income tax expense
Temporary differences	75,146	67,631
Income tax expense recognized in profit or loss	\$248,346	\$265,156

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

The applicable tax rate used by the Company is 20%. In addition, the tax rate applicable to unappropriated earning is 5%.

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 Company 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 Company in 2023, already deducted the unappropriated earnings in 2022 amount that has been reinvested in capital expenditure.

	Year Ended December 31, 2023
	Recognized
	Balance,	Recognized	in Other	Balance,
	Beginning	in Profit	Comprehensive	End of
	of Year	or Loss	Income	Year
Deferred income tax assets:
Temporary differences
Net defined benefit liability	\$7,134	(\$1,353)	(\$34)	\$5,747
Unrealized loss on inventories	2,518	8	-	2,526
Unused compensated absences	3,576	181	-	3,757
Unrealized exchange gain	6,507	12,131	-	18,638
Subtotal	\$19,735	\$10,967	(\$34)	\$30,668
Deferred income tax liabilities:
Temporary differences
Gain on foreign investment	\$121,315	\$86,113	(\$11,872)	\$195,556
under equity method
Subtotal	\$121,315	\$86,113	\$11,872	\$195,556
Total	(\$101,580)	(\$75,146)	(\$11,838)	(\$164,888)

D. Deferred tax assets and liabilities from temporary differences

	Year Ended December 31, 2022
	Recognized
	Balance,	Recognized	in Other	Balance,
	Beginning	in Profit	Comprehensive	End of
	of Year	or Loss	Income	Year
Deferred income tax assets:
Temporary differences
Net defined benefit liability	\$11,010	(\$1,348)	(\$2,528)	\$7,134
Unrealized loss on inventories	612	1,906	-	2,518
Unused compensated absences	2,854	722	-	3,576
Unrealized exchange gain	-	6,507	-	6,507
Subtotal	\$14,476	\$7,787	(\$2,528)	\$19,735
Deferred income tax liabilities:
Temporary differences
Gain on foreign investment	\$34,476	\$77,440	\$9,399	\$121,315
under equity method
Unrealized exchange gain	2,022	(2,022)	-	-
Subtotal	\$36,498	\$75,418	\$9,399	\$121,315
Total	(\$22,022)	(\$67,631)	(\$11,927)	(\$101,580)

E. Items with no deferred tax assets recognized:

	December 31
Item	2023	2022
Loss on investment under the equity method	\$27,843	\$12,945

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

(29) 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 financial assets at fair value through other comprehensive income	4,675	-	4,675
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	388	-	388
Subtotal	\$5,234	(\$34)	\$5,200
Items that may be reclassified
subsequently to profit or loss:
Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures	(\$59,363)	\$11,872	(\$47,491)
Subtotal	(\$59,363)	\$11,872	(\$47,491)
Recognized in other	(\$54,129)	\$11,838	(\$42,291)
comprehensive income (loss)

	Other Comprehensive	Income Tax	Other Comprehensive
Item	Income (Loss), Before Tax	Benefit (Expense)	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	-	-	-
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	-	-	-
Subtotal	\$12,640	(\$2,528)	\$10,112
Items that may be reclassified
subsequently to profit or loss:
Share of other comprehensive income (loss) of subsidiaries, associates and joint ventures	\$47,000	(\$9,399)	\$37,601
Subtotal	\$47,000	(\$9,399)	\$37,601
Recognized in other	\$59,640	(\$11,927)	\$47,713
comprehensive income (loss)
(30) Earnings per share
			Year Ended December 31
Item		2023	2022
Basic earnings per share: A.
Net income		\$1,333,934	\$1,089,095
Weighted average shares outstanding (in thousands)		258,369	250,930
Basic earnings per share (after tax)		\$5.16	\$4.34
Diluted earnings per share: B.
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 earnings per share		\$1,337,249	\$1,089,095

Year Ended December 31, 2022

Weighted average shares outstanding (in thousands)	258,369	250,930
Convertible bonds (in thousands)	4,795	-
Impact on employees' compensation (Note)	370	749
Weighted average number of ordinary shares outstanding after dilution (in thousands)	263,534	251,679
Diluted earnings per share (after tax)	\$5.07	\$4.33

(Note) Since the Company offered to settle compensation paid to employees in cash or shares, the Company 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 Company is the ultimate controlling party.
(2) Related party name and category:

Related Party Name	Related Party Category
Sunon SAS	Subsidiary
Sunon INC	Subsidiary
Sunon Electronic (Kunshan) Co., Ltd.	Subsidiary
Sunon Electronic (Foshan) Co., Ltd.	Subsidiary
Sunon Electronic (Bei Hai) Co., Ltd.	Subsidiary
Beihai Li Zhun Electronics Co., Ltd.	Subsidiary
Sunon Electronics India Private Limited	Subsidiary
Sunon Electronics Philippines Corp.	Subsidiary
Sunon Properties Philippines Corp.	Subsidiary
Guang Sheng Investment Corporation	Other related parties
Shehng-Yuan Children Development and	Other related parties
Adult Support Services Center
Yo Yuan Investment Corporation	Other related parties
(3) Significant transactions with related parties:
A. Sales:
	Year Ended December 31
Related Party Category	2023	2022
Subsidiaries	\$1,405,885	\$2,470,303

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
Subsidiaries:
Sunon Electronic (Kunshan) Co., Ltd.	\$2,147,420	\$2,980,221
Sunon Electronic (Bei Hai) Co., Ltd.	3,833,202	4,456,375
Others	155,115	149,087
Total	\$6,135,737	\$7,585,683

The above transaction is the purchase price of the finished product which undertakes the transfer of the Company that the pricing is based on the Company's order taking prices, the purchase prices with the related parties are equivalent to those with ordinary suppliers. Payment terms were 2 to 4 months for other suppliers and 2 to 3 months for related parties. In addition, 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 and contract assets):

	December 31
Related Party Category	2023	2022
Accounts receivable:
Subsidiaries
Sunon Electronics (Bei Hai) Co., Ltd.	\$563,465	\$665,291
Sunon SAS	158,128	241,828
Sunon INC	48,127	182,233
Others	35,558	92,829
Total	\$805,278	\$1,182,181
Other receivables:
Subsidiaries
Sunon Electronic (Kunshan) Co., Ltd.	\$27,017	\$21,855
Sunon Electronics (Bei Hai) Co., Ltd.	10,155	17,103
Beihai Li Zhun Electronics Co., Ltd.	6,132	4,242
Others	5,110	3,474
Total	\$48,414	\$46,674

	December 31
Related Party Category	2023	2022
Accounts payables:
Subsidiaries
Sunon Electronic (Kunshan) Co., Ltd.	\$502,561	\$740,472
Sunon Electronic (Bei Hai) Co., Ltd.	1,124,451	479,037
Others	39,199	9,028
Total	\$1,666,211	\$1,228,537
Other payables:
Subsidiaries	\$16,944	\$26,579
G. Prepayments: None.
H. Property transactions:
a. Disposal of property, plant and equipment
	Disposal Price
	Year Ended	December 31
Related Party Category	2023	2022
Subsidiaries	\$213	\$8,315
	Disposal Gain
	Year Ended	December 31
Related Party Category	2023	2022
Subsidiaries	\$30	\$1,105
Above mentioned transaction prices were negotiated by both parties, and		there were

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

still 0 thousand and 8,315 thousand not received as of December 31, 2023 and 2022. Among them, the unrealized (loss) gain is 3,685 thousand in 2022, which has been realized 584 thousand is listed as Gain on disposal of property,plant and equipment.

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	\$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: None.

L. Financing activities - borrowing from related parties: None.

M. Guarantee for related parties:

	December 31
Related Party Category	2023	2022
Subsidiaries	USD 23,000	USD 23,000
Subsidiaries	RMB 50,000	RMB -

N. Others:

a. Guarantee deposits:

	December 31
Related Party Category	2023	2022
Shehng-Yuan Children Development and	\$45	\$45
Audit Support Services Center
Other related parties	10	10
Total	\$55	\$55

b. Miscellaneous income:

	Year Ended December 31
Related Party Category	2023	2022
Subsidiaries
Sunon Electronic (Kunshan) Co., Ltd.	\$96,946	\$28,399
Others	65,776	29,353
Other related parties	194	194
Total	\$162,916	\$57,946

Miscellaneous income is mainly samples, rent and patent income. Rent prices are according to the contract agreement and received monthly.

c. Miscellaneous expenses:

	Year Ended December 31
Related Party Category	2023	2022
Subsidiaries
Sunon SAS	\$73,342	\$89,489
Sunon INC	9,830	26,302
Others	15,331	12,965
Total	\$98,503	\$128,756

Miscellaneous expenses are mainly commission fees.

d. Subscription of related parties' capital increase

Year ended December 31, 2023:

	Investment Increase		Shareholding Ratio
	Number of shares		Before capital	After capital
Related Party	(thousand shares)	Amount	increase	increase
Subsidiaries
Sunon Electronics Philippines Corp.	3,279	\$185,770	99.99%	99.99%
Sunon Properties Philippines Corp.	562	31,445	99.99%	99.99%

Year ended December 31, 2022:

	Investment Increase		Shareholding Ratio
	Number of shares		Before capital	After capital
Related Party	(thousand shares)	Amount	increase	increase
Subsidiaries
Sunon Electronics Philippines Corp.	1,888	\$105,266	99.99%	99.99%

(4) Key management compensation

	Year Ended December 31
Related Party Category	2023	2022
Salaries and other short-term employee benefits	\$67,343	\$63,698
Post-employment benefits	-	-
Other long-term employee benefits	-	-
Termination benefits	-	-
Share-based payments	-	-
Total	\$67,343	\$63,698

8. PLEDGED ASSETS

	December 31
Related Party Category	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 Company issued guarantee notes for bank loans amounting to \$3,404,317 thousand and \$3,247,560 thousand, respectively.
(2) The unused letters 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, 2023 and 2022, 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 Company endorsed guarantees for others. Please refer to Note 13 for the information.
(5) Statement of lawsuit

SIAE Microelectronica S.P.A. filed a lawsuit against the Company for the infringement on April 8, 2020. The Company 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.

10. SIGNIFICANT DISASTER LOSS: NONE.

11. SIGNIFICANT SUBSEQUENT EVENTS: NONE.

12. OTHERS

(1) Capital risk management

The Company should maintain an adequate capital structure to enable the expansion and enhancement of equipment. Therefore, the Company 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 Company'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 Company's overall risk management program focuses on the unpredictability of financial markets and seeks to minimize potential adverse effects on the Company'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 Company 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 Company's functional currency is New Taiwan dollars. Many of the Company's operating activities are denominated in foreign currencies. Consequently, the Company 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 Company 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 Company held with maturities less than 3 months are not qualified for hedge accounting. The net investment in foreign operation is strategic investment. Therefore, the Company does no hedge for it.

(b) Foreign currency risk and sensitivity analysis

			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	147,441	30.7050	4,527,187	increase 1%	45,272		-
EUR:NTD	6,295	33.9800	213,894	increase 1%	2,139		-

Investments accounted
for using equity method
USD:NTD	64,505	30.7050	1,980,632	increase 1%	-	19,806
EUR:NTD	2,324	33.9800	78,976	increase 1%	-	790
RMB:NTD	262,560	4.3352	1,138,249	increase 1%	-	11,382
PHP:NTD	1,100,380	0.5526	608,070	increase 1%	-	6,081
Financial liabilities
Monetary item
USD:NTD	79,851	30.7050	2,451,815	increase 1%	(24,518)	-

			December 31, 2022
					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	-
JPY:NTD	39,427	0.2324		9,163 increase 1%	92	-
RMB:NTD	1,839	4.4094		8,110 increase 1%	81	-
Investments accounted
for using equity method
USD:NTD	57,363	30.7100	1,761,620	increase 1%	-	17,616
EUR:NTD	1,747	32.7200		57,156 increase 1%	-	572
RMB:NTD	205,608	4.4094		906,609 increase 1%	-	9,066
PHP:NTD	850,097	0.5472		465,173 increase 1%	-	4,652
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)	-
JPY:NTD	435	0.2324		101 increase 1%	(1)	-

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.

	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	(47,840)
EUR: NTD	-	33.7200	(1,112)	-	31.3500	14,196
JPY: NTD	-	0.2219	(37)	-	0.2272	286
RMB: NTD	-	4.4243	(410)	-	4.4378	123
Financial Liabilities
Monetary Item
USD: NTD	-	31.1770	56,573	-	29.8490	862
EUR: NTD	-	33.7200	50	-	31.3500	(208)

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

b. Price risk

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

The Company is exposed to beneficiary certificates. If the price of the Company's equity investments rises (or falls) 1%, the other comprehensive income from equity instruments at fair value through other comprehensive income or loss will increase (or decrease) 247 thousand and 0 thousand for the nine months ended December 31, 2023 and 2022, respectively.

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	\$ -	\$ -
Financial liabilities	(23,662)	(22,580)
Net	(\$23,662)	(\$22,580)
Cash flow interest rate risk:
Financial assets	\$2,171,970	\$399,999
Financial liabilities	(266,667)	(1,150,556)
Net	\$1,905,303	(\$750,557)

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

The Company 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 Company 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 tools

The Company's financial instruments with variable interest rate are those with floating-rate. If interest rate increases 1%, the net income will decrease \$19,053 thousand and (\$7,506) 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 Company. The Company 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 Company 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 Company's exposure to financial credit risk which pertained to bank deposits and other financial instruments were evaluated and monitored by Company Treasury function. The Company only deals with creditworthy counterparties, banks, and government so that no significant credit risk was identified. In addition, the Company 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 Company's ten largest customers accounted for 50.69% and 60.54% of accounts receivable, respectively. The Company believes the concentration of credit risk is insignificant for the remaining accounts receivable.

The Company continuously evaluated customers' financial situation. To reduce major credit risk, the Company 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 Company 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.

Related information of the maximum exposure to credit risk regarding financial assets recognized in the parent company only balance sheets, pledged collateral, master netting arrangements and other credit enhancement held by the Company as of December 31, 2023 and 2022:

			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 other comprehensive income or loss	24,675	-	-	-	-
Total	\$24,675	\$ -	\$ -	\$ -	\$ -

December 31,2022:None.

C. Liquidity risk

a. Liquidity risk management:

The objective of liquidity risk management is to ensure the Company 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 Company's remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods.

				December 31, 2023
Non-derivative Financial Liabilities	Within 1 year	1-2 years	2-5 years	Over 5 years	Contract Cash Flow	Carrying Value
Notes payable	\$10	\$ -	\$ -	\$ -	\$10	\$10
Accounts payable	774,943	-	-	-	774,943	774,943
Accounts payable -	1,666,211	-	-	-	1,666,211	1,666,211
related parties
Other payables	421,320	-	-	-	421,320	421,320
Other payables -	16,944	-	-	-	16,944	16,944
related parties
Long-term loans	88,889	88,889	88,889	-	266,667	266,667
(Inclusive of current portion)
Lease liabilities	12,975	7,684	3,308	-	23,967	23,662
Guarantee deposits	449	-	-	-	449	449
Total	\$2,981,741	\$96,573	\$92,197	\$ -	\$3,170,511	\$3,170,206

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	\$12,975	\$10,992	\$ -	\$ -	\$ -	\$ -	\$23,967

				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	\$795,000	\$ -	\$ -	\$ -	\$795,000	\$795,000
Accounts payable	910,989	-	-	-	910,989	910,989
Accounts payable – related parties	1,228,537	-	-	-	1,228,537	1,228,537
Other payables	364,564	-	-	-	364,564	364,564
Other payables - related parties	26,579	-	-	-	26,579	26,579
Long-term loans	88,889	88,889	177,778	-	355,556	355,556
(Inclusive of current portion)
Lease liabilities	10,303	8,173	4,312	-	22,788	22,580
Guarantee deposits	427	-	-	-	427	427
Total	\$3,425,288	\$97,062	\$182,090	\$ -	\$3,704,440	\$3,704,232

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	\$10,303	\$12,485	\$ -	\$ -	\$ -	\$ -	\$22,788

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

2. Categories of financial instruments

The carrying values of financial assets and liabilities of the Company as of December 31, 2023 and 2022 were as follow:

2023	2022

\$2,172,666	\$400,593
2,693,839	3,573,110

93,538	82,984
4,346	3,705
24,675	-


-	795,000
2,441,164	2,139,526

438,264	391,143
23,662	22,580
266,667	355,556
449	427
	December 31

(3) Fair value information

A. Details of the fair value of the Company'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 Company's investment property measured at cost are provided in Note 6(10).
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 Company'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 Company'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 Company'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 Company considers that the carrying amounts of financial instruments except those listed in the table below, including cash and cash equivalents, receivables, other financial assets, refundable deposits, short-term loans, payables, 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 level

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 other comprehensive
income or loss
Domestic unlisted stocks	\$	-	\$	-	\$24,675	\$24,675
Total	\$	-	\$	-	\$24,675	\$24,675

December 31, 2022:None.

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 Company 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 Company 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 value through other comprehensive income or loss	Market Approach	Lack of liquidity discount rate	18.71%	The higher the degree of lack of liquidity, the lower the fair value estimate

December 31, 2022: None

F. Transfer between Level 1 and Level 2: None.

G. Changes in level 3 instruments as for the years ended December 31, 2023 and 2022:

	Investment in unquoted
	financial	instruments
	Year Ended December	31
Item	2023	2022
Beginning balance	\$ -	\$ -
Addition	20,000	-
Recognized in other comprehensive income	4,675	-
Ending balance	\$24,675	\$ -

H. Valuation process for Level 3 fair value measurement:

Valuation process regarding fair value Level 3 is conducted by the Company 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.
(2) Information on investees: Table 7
(3) Information on investments in Mainland China: Table 8
(4) Information on major shareholders (including name of the shareholders with shareholding above 5%, shares held and shareholding ratio): Table 9

Table 1

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

LOANS PROVIDED TO OTHER PARTIES

DECEMBER 31, 2023

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

															Financing	Financing
			Financial		Maximum	Ending	Amount		Nature for			Allowance	Collateral		Limits for Each	Company's
No.	Financing	Counter-party	Statement	Related	Balance for	Balance	Actually	Interest	Financing	Transaction	Reason for	for Bad			Borrowing	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.

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 Electric Machine Industry Co.,	Sunon Electronic (Kunshan) Co., Ltd.	2	2,165,618	NTD 270,934 (USD 6,000;	NTD 270,934 (USD 6,000;	-	-	3.75%	3,609,364	Y	N	Y
	Ltd.				RMB 20,000)	RMB 20,000)
0	Sunonwealth Electric Machine	Sunon Electronic (Bei Hai)	2	2,165,618	NTD 652,041 (USD 17,000;	NTD 652,041 (USD 17,000;	NTD 63,077	-	9.03%	3,609,364	Y	N	Y
	Industry Co., Ltd.	Co., Ltd.			RMB 30,000)	RMB 30,000)	(RMB 14,550)
0	Sunonwealth Electric Machine Industry Co., Ltd.	Bei hai Li Zhun Electronic Co., Ltd.	2	2,165,618	NTD 86,704 (RMB 20,000)	NTD 86,704 (RMB 20,000)	-	-	1.20%	3,609,364	Y	N	Y
1	Sunon Electronic (Bei Hai) Co., Ltd.	Bei hai Li Zhun Electronic Co., Ltd.	1	178,504	NTD 43,352 (RMB 10,000)	NTD 43,352 (RMB 10,000)	-	-	4.86%	446,259	N	N	Y
2	Sunon Electronic (Kunshan) Co., Ltd.	Sunon Electronic (Bei Hai) Co., Ltd.	1	371,291	NTD 216,760 (RMB 50,000)	NTD 216,760 (RMB 50,000)	NTD 43,352 (RMB 10,000)	-	11.68%	928,227	N	N	Y
2	Sunon Electronic (Kunshan) Co., Ltd.	Bei hai Li Zhun Electronic Co., Ltd.	1	371,291	NTD 130,056 (RMB 30,000)	NTD 130,056 (RMB 30,000)	NTD 78,034 (RMB 18,000)	-	7.01%	928,227	N	N	Y

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 :

Trading partner.
Majority owned subsidiary
The Company direct and indirect owns over 50% ownership of the investee company.
A subsidiary jointly owned over 90% by the Company.
Guaranteed by the Company according to the construction contract.
An investee company. The guarantees were provided based on the Company's proportionate share in the investee company.
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.

MARKETABLE SECURITIES HELD

DECEMBER 31, 2023

(Amounts in Thousands of New Taiwan Dollars)

					Ending balance
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.

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	Financial		Relationship		Beginning Balance		Addition (Note)			Disposal			Ending Balance
Company Name	Securities Type and Name	Statement Account	Counter-party	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. 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 Industry Co.,	Sunon SAS	Subsidiary	Sales	342,258		3.55% 2 to 3 months	-	-	158,128	5.90%
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%

Table 5

Table 6

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

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 (Note)	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	Parent	NTD 1,124,448				NTD 746,237
(Bei Hai) Co., Ltd.	Industry Co., Ltd.		(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: Amounts collected as of March 7, 2024.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

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)

				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
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, 2022		Net Income	Share of
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	(Loss) of the Investee	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 (Kunshan) Co., Ltd.	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	-
	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 International Limited	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	-
	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	-
SunonElectronic (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	-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

INFORMATION ON INVESTMENT IN MAINLAND CHINA

DECEMBER 31, 2023

(1) Mainland Investment Information:

	Main Businesses	Total Amount of	Method 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
Investee Company	and Products	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)	-

Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment
USD 34,000
USD 8,000	(Note 4)
USD 10,000

Table 8

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 7);
(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.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

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.

14. SEGMENT INFORMATION

The Company has provided the operating segments disclosure in the consolidated financial statements.

STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item	Statement Index
Statements of major accounting items in assets, liabilities and equity
Statement of cash and cash equivalents	P.91
Statement of notes receivable	P.92
Statement of accounts receivable	P.93
Statement of accounts receivable - related parties	P.94
Statement of other receivables	P.95
Statement of inventories	P.96
Statement of prepayments	P.97
Statement of financial assets at fair value through other comprehensive income or loss - noncurrent	P.98
Statement of changes in investments accounted for using equity method	P.99
Statement of changes in property, plant and equipment	Note 6(8)
Statement of changes in accumulated depreciation of property, plant and equipment	Note 6(8)
Statement of changes in accumulated impairment of property, plant and equipment	Note 6(8)
Statement of changes in right-of-use assets	Note 6(9)
Statement of changes in accumulated depreciation of right-of-use assets	Note 6(9)
Statement of changes in accumulated impairment of right-of-use assets	Note 6(9)
Statement of changes in investment properties	Note 6(10)
Statement of changes in accumulated depreciation of investment properties	Note 6(10)
Statement of changes in accumulated impairment of investment properties	Note 6(10)
Statement of changes in intangible assets	Note 6(11)
Statement of deferred income tax assets	Note 6(28)
Statement of refundable deposits	P.100
Statement of contract liabilities - current	P.101
Statement of accounts payables	P.102
Statement of accounts payables - related parties	P.103
Statement of other payables	Note 6(13)
Statement of provisions	Note 6(14)
Statement of lease liabilities	Note 6(9)
Statement of long-term loans and current portion of long-term loans	P.104
Statement of deferred income tax liabilities	Note 6(28)
Statement of guarantee deposits	P.105

Statements of major accounting items in profit or loss
Statement of net revenue	P.106
Statement of cost of revenue	P.107
Statement of factory overhead	P.109
Statement of sales and marketing expenses	P.110
Statement of general and administrative expenses	P.111
Statement of research and development expenses	P.112
Statement of other gains and losses	Note 6(26)
Statement of finance costs	Note 6(27)
Statement of labor, depreciation and amortization by function	Note 6(23)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF CASH AND CASH EQUIVALENTS DECEMBER 31, 2023

			(In Thousand of New Taiwan Dollars and Foreign Currencies)
Item	Description	Amount	Remark
Cash	Petty cash	\$510	NTD 80
			RMB 24
			USD 3
			EUR 3
			PHP257
Subtotal		\$510
Cash in banks	Checking accounts	\$186
	Demand deposits	103,810
	Foreign deposits	2,068,160	USD 66,084
			JPY 15,911
			HKD 79
			EUR 967
			RMB 559
Subtotal		\$2,172,156
Total		\$2,172,666
USD:NTD	1:30.705
JPY:NTD	1:0.2172
HKD:NTD	1:3.929
EUR:NTD	1:33.98
CNY:NTD	1:4.3352
PHP:NTD	1:0.5526

-91-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF NOTES RECEIVABLE DECEMBER 31, 2023

		(In Thousands of New Taiwan Dollars)
Client Name	Description	Amount	Remark
Company A	Note of trade receivable	\$17,123
Company B	Note of trade receivable	977
Others	Under 5%	256
Total		\$18,356
Less: Allowance for		(24)
doubtful accounts
Net		\$18,332

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLE DECEMBER 31, 2023

		(In Thousands of New Taiwan Dollars)
Client Name	Description	Amount	Remark
Company A	Trade receivable	\$209,459
Company B	Trade receivable	130,650
Company C	Trade receivable	125,203
Company D	Trade receivable	112,218
Others	Under 5%	1,298,202
Total		\$1,875,732
Less: Allowance for		(5,503)
doubtful accounts
Net		\$1,870,229

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF ACCOUNTS RECEIVABLE - RELATED PARTIES DECEMBER 31, 2023

		(In Thousands of New Taiwan Dollars)
Client Name	Description	Amount	Remark
Sunon Electronic (Bei Hai) Trade receivable		\$563,465
Co., Ltd.
Sunon SAS	Trade receivable	158,128
Sunon INC	Trade receivable	48,127
Subsidiary	Under 5%	35,558
Total		\$805,278
Less: Allowance for		-
doubtful accounts
Net		\$805,278

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF OTHER RECEIVABLES DECEMBER 31, 2023

		(In Thousands of New Taiwan Dollars)
Item	Description	Amount	Remark
Receivables	Sample and consumable sale, etc.	\$35,511
Tax refund receivable	Business tax receivable	3,460
Interest receivable	Interest receivable	6,153
Subtotal		\$45,124
Other receivables - related parties	Patent revenue and sample fee and mold fee, etc.	\$48,414
Total		\$93,538

STATEMENT OF INVENTORIES DECEMBER 31, 2023 SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

		Amount
Item	Description	Cost	Fair Value	Remark
Raw materials	Copper tube/slug,	\$238,379	\$239,183
	ICR, etc.
Supplies	Solder wire, Bar tin,	1,164	1,174
	Lubricant, etc.
Work in process	Plastic frame, PCB,	18,711	18,712
	Bobbins, etc.
Finished goods	Fans, etc.	586,224	715,676
Total		\$844,478	\$974,745

(In Thousands of New Taiwan Dollars)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF PREPAYMENTS DECEMBER 31, 2023

Item	Description	Amount
Prepayment for purchases	Prepayment for purchases,	\$740
	etc.
Prepaid expenses	Prepaid insurance, etc.	4,971
Payment on behalf of	Payment on behalf of	2,011
others	others, etc.
Other prepaid expenses	Overpaid sales tax, etc.	731
Total		\$8,453

(In Thousands of New Taiwan Dollars)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME OR LOSS - NONCURRENT FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

	Balance, January 1, 2023			Increase in Investment		Decrease in Investment		Balance, December 31, 2023
Names	Shares		Amount	Shares	Amount	Shares		Amount	Shares	%	Amount	Collateral	Remark
Technology on Prototyping	-	\$	-	870	24,675	-	\$	-	870	15.7	24,675	Nil
Ultimate Co., Ltd
Total		\$	-		\$24,675		\$	-			\$24,675

Note: 1.Current increase of \$24,675 thousand includes \$20,000 thousand of purchase, and \$4,675 thousand of unrealized gain on financial assets at FVTOCI.

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF CHANGES IN INVESTMENTS ACCOUNTED FOR USING EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

											Market Value or
		Balance, January 1, 2022	Increase in Investment			Decrease in Investment		Balance, December 31, 2022			Net Assets Value
Names	Shares	Amount	Shares	Amount	Shares	Amount	Shares	%	Amount	Unit Price	Total Amount	Collateral	Remark
Successful Century Co.,	33,880	\$1,593,644	-	438,042	-	\$254,120	33,880	100.00	1,777,566	54.81	1,856,876	Nil
Ltd.
BVI Sunon	-	906,609	-	505,875	-	274,235	-	100.00	1,138,249	-	1,261,078	Nil
International Limited
Sunon INC	150	167,976	-	57,451	-	22,361	150	100.00	203,066	1,428.94	214,341	Nil
Sunon SAS	50	57,156	-	21,820	-	-	50	100.00	78,976	1,863.38	93,169	Nil
Sunonwealth Electric	800	1,903	-	-	-	42	800	99.99	1,861	2.33	1,861	Nil
Machine Ind. (H.K.) Ltd.
Sunon Corporation	4	1,834	-	-	-	183	4	100.00	1,651	412.75	1,651	Nil
Sunon Electronics India	1,100	3,820	-	516	-	30	1,100	99.99	4,306	3.91	4,306	Nil
Private Limited
Sunon Electronics	2,494	95,236	3,279	185,770	-	70,429	5,773	99.99	210,577	36.49	210,657	Nil
Philippines Corp.
Sunon Properties	7,068	369,937	562	34,828	-	7,272	7,630	99.99	397,493	52.10	397,493	Nil
Philippines Corp.
Total		\$3,198,115		\$1,244,302		\$628,672			\$3,813,745		\$4,041,432

Note: 1.It is calculated based on the audited financial statements for the same period, except the financial statements of Sunonwealth Electric Machine Ind. (H.K.)Ltd., Sunon Corporation and Sunon Electronics India Private Limited.

2.Current increase of \$1,244,302 thousand includes \$217,215 thousand of acquisition, \$1,000,411 thousand of share of profits of subsidiaries, associates and joint ventures, \$6,512 thousand of exchange difference arising on translation of foreign operations, \$19,776 thousand of changes in unrealized inter-company gross profit, and \$388 thousand of equity changes in associates and joint ventures using the equity method.

3.Current decrease of \$628,672 thousand includes \$74,922 thousand of share of loss of subsidiaries, associates and joint ventures, \$386,977 thousand of cash dividends received,\$61,820 thousand of capital reduction, \$65,875 thousand of exchange difference arising on translation of foreign operations, and \$39,078 thousand of changes in unrealized inter-company gross profit.

4.The cost and valuation for using equity method are listed below:

		Share of Profit	Exchange
		or Loss of	Differences
		Subsidiaries,	Arising
	Acquisition	associates and	Translation of
Investee Company	Cost		joint ventures Foreign Operations	Others	Total
Successful Century Co., Ltd.	\$1,136,933	\$715,926	(\$129,702)	\$54,409	\$1,777,566
BVI Sunon International Limited	592,197	676,721	(162,107)	31,438	1,138,249
Sunon INC	49,140	179,047	(572)	(24,549)	203,066
Sunon SAS	16,127	98,675	(12,745)	(23,081)	78,976
Sunonwealth Electric Machine Ind. (H.K.) Ltd.	3,428	(174)	(562)	(831)	1,861
Sunon Corporation	4,470	(5,211)	(1,020)	3,412	1,651
Sunon Electronics India Private Limited	4,880	83	(657)	-	4,306
Sunon Electronics Philippines Corp.	325,108	(109,113)	(5,338)	(80)	210,577
Sunon Properties Philippines Corp.	461,445	(24,715)	(39,237)	-	397,493
Total	\$2,593,728	\$1,531,239	(\$351,940)	\$40,718	\$3,813,745

-99-

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF REFUNDABLE DEPOSITS DECEMBER 31, 2023

		(In Thousands of New Taiwan Dollars)
Item	Description	Amount	Remark
Refundable deposits	Building and company car rental deposits, etc.	\$4,346
Total		\$4,346

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF CONTRACT LIABILITIES - CURRENT DECEMBER 31, 2023

Description	Amount	Remark
Unearned sales revenue	\$18,092
Unearned sales revenue	14,229
Unearned sales revenue	10,419
Unearned sales revenue	5,877
Unearned sales revenue	5,540
Under 5%	47,472
	\$101,629

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF ACCOUNTS PAYABLES DECEMBER 31, 2023

		(In Thousands of New Taiwan Dollars)
Vendor Name	Description	Amount	Remark
Company A	Trade payable	\$133,504
Company B	Trade payable	63,636
Company C	Trade payable	55,614
Others	Under 5%	522,189
Total		\$774,943

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF ACCOUNTS PAYABLES - RELATED PARTIES DECEMBER 31, 2023

Vendor Name	Description	Amount
Sunon Electronic (Kushan) Co., Ltd.	Trade payable	\$502,561
Sunon Electronic (Bei Hai) Co., Ltd.	Trade payable	1,124,451
Others	Under 5%	39,199
Total		\$1,666,211

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF LONG-TERM LOANS AND CURRENT PORTION OF LONG-TERM LOANS DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

				Range of
Creditor	Description	Amount	Contract Period	interest rate	Collateral
The Export - Import Bank of the	Unsecured Loans	\$266,667	2020.09.23-2026.09.23	1.83%	Nil
Current portion of long-term loans		(88,889)
Balance, End of Year		\$177,778

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF GUARANTEE DEPOSITS DECEMBER 31, 2023

Description	Amount	Remark
Building lease deposits, etc.	\$449
	\$449
		(In Thousands of New Taiwan Dollars)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF NET REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023

Item	Quantity (in thousands)	Amount

DC fan	69,332	\$7,680,126
AC fan	1,907	336,556
Sales of raw materials, etc.		1,724,837
Total revenue		\$9,741,519
Less:Sales return	149	(37,925)
Sales discount		(64,847)
Net revenue		\$9,638,747

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF COST OF REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023

	(In Thousands of New Taiwan Dollars)
Item	Amount
Raw materials at January 1, 2023	\$296,209
Add: Raw materials purchased	1,442,748
Gain on physical count	114
Less: Raw materials at December 31, 2023	(248,184)
Raw materials sold	(295,025)
Transfer to operating expenses	(3,040)
Scrapped raw materials	(16,443)
Raw materials used	\$1,176,379
Supplies at January 1, 2023	\$2,467
Add: Supplies purchased	6,692
Less: Supplies at December 31, 2023	(1,477)
Supplies sold	(281)
Transfer to operating expenses	(2,184)
Scrapped supplies	(648)
Supplies used	\$4,569
Direct labor	21,664
Factory overhead	14,973
Manufacturing cost	\$1,217,585
Add: Work in process at January 1 2023	51,515
Work in process purchased	117,820
Gain on physical count	171
Outsource processing	274,368
Less: Work in process at December 31, 2023	(18,716)
Work in process sold	(1,489,324)
Transfer to operating expenses	(2,583)
Scrapped work in process	(645)
Cost of finished goods	\$150,191
Add: Finished goods at January 1 2023	587,481
Finished goods purchased	6,958,553
Less: Finished goods at December 31, 2023	(588,734)
Transfer to operating expenses	(2,588)
Scrapped finished goods	(384)
Cost of finished goods sold	\$7,104,519
Revenue from selling scraps	(1,233)

Item	Amount
Adjustment items of cost
Impairment loss on inventories	41
Gain on physical count	(285)
Others	(945,348)
Unallocated factory overhead and direct labor	87,860
Cost of product	\$6,245,554
Work in process sold	1,489,324
Raw material sold	295,025
Supplies sold	281
Total cost of revenue	\$8,030,184

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF FACTORY OVERHEAD FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Item	Amount
Indirect labor	\$42,133
Depreciation	18,039
Comsumables	10,697
Others (Note)	32,876
Unallocated manufacturing expenses	(88,772)
Total	\$14,973

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF SALES AND MARKETING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

Item	Amount
Salary and wages	\$130,332
Commission	82,851
Others (Note)	154,843
Total	\$368,026

(In Thousands of New Taiwan Dollars)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF GERNERAL AND ADMINISTRATIVE EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

Item	Amount
Salary and wages	\$221,246
Professional service fees	25,148
Others (Note)	85,323
Total	\$331,717

(In Thousands of New Taiwan Dollars)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. STATEMENT OF RESEARCH AND DEVELOPMENT EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023

Item	Amount
Salary and wages	\$292,160
Research and development	47,235
Depreciation	26,713
Insurance	25,647
Others (Note)	111,674
Total	\$503,429

(In Thousands of New Taiwan Dollars)

AI assistant

SUNON — Annual Report 2023

52070_rns_2023-11-02_92e70744-eb91-4541-8b50-1a1f3af1dea0.pdf

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. PARENT COMPANY ONLYSTATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 AND INDEPENDENT AUDITORS' REPORT

CONTENTS

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PARENT COMPANY ONLY BALANCE SHEETS

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. PANENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD. PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY (In Thousands of New Taiwan Dollars)

SUNONWEALTH ELECTRIC MACHINE INDUSTRY CO., LTD.

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS

1. GENERAL INFORMATION

2. THE AUTHORIZATION OF THE PARENT COMPANY ONLY FINANCIAL STATEMENTS

3. APPLICATION OF NEW AND AMENDED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(3) Foreign currency translation

(6) Financial instruments

A. Financial assets

(10)Leases/The Company as a lessee

Right-of-use asset

Lease liability

(11)Investment properties

(12)Intangible assets

(13)Impairment of non-financial assets

(14)Provisions

(15)Employee benefits

A.Short-term employee benefits

B.Pensions

(18)Income tax

(19)Revenue Recognition

B.Service revenue

(21)Government subsidy

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

C. Lease term

(2) Critical accounting estimates and assumptions

E. Impairment assessment on investment using equity method

F. Realisability of deferred income tax assets

G. Evaluation of inventories

H. Calculation of accrued pension obligations

I. Lessees' incremental borrowing rates

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

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

(3) Notes receivable, net

(4) Accounts receivable, net

(5) Inventories and operating costs

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

(7) Investments accounted for using the equity method

(8) Property, plant and equipment

(9) Lease agreement

C. Material lease-in activities and terms

D. Sublet: None.

(10) Investment properties, net

(11) Intangible assets

(12) Short-term loans

(13) Other payables (including other payables - related parties)

(14) Provisions - current

(15) Bonds Payable

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

(17) Pension

(18) Share capital

(19) Capital surplus

(20)Retained earnings and dividend policy

(21) Other equity

(22) Operating revenues

A. Explain of contract revenue

(23) Labor cost, depreciation and amortization

Year ended December 31, 2022

(24) Interest income

(25) Other income

(26) Other gains and losses

(27) Finance costs

(28) Income tax expense

D. Deferred tax assets and liabilities from temporary differences

(29) Other comprehensive income (loss)

7. RELATED PARTY TRANSACTIONS

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

I. Lessee arrangements:

Year ended December 31, 2022:

(4) Key management compensation

SUNON Annual Report 2023