Transcend — Audit Report / Information 2023

Dec 29, 2023

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT THEREON DECEMBER 31, 2023 AND 2022

---

For the convenience of readers and for information purpose only, the independent auditors’ report and the accompanying financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language independent auditors’ report and financial statements shall prevail.

~1~

INDEPENDENT AUDITORS’ REPORT TRANSLATED FROM CHINESE

PWCR 23000331

To the Board of Directors and Shareholders of Transcend Information, Inc.

Opinion

We have audited the accompanying consolidated balance sheets of Transcend Information, Inc. and subsidiaries (the “Group”) as at December 31, 2023 and 2022, and the related consolidated statements of comprehensive income, of changes in equity and of cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2023 and 2022, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission.

Basis for opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Independent auditors’ responsibilities for the audit of the consolidated financial statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the Group’s 2023 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and, in forming our opinion thereon, we do not provide a separate opinion on these matters.

Key audit matters for the Group’s 2023 consolidated financial statements are stated as follows:

~2~

Valuation of inventories

Description

Refer to Notes 4(14), 5(2) and 6(5) to the consolidated financial statements for the information on the Group’s inventory accounting policy, estimates and assumptions and allowance for inventory valuation losses.

The percentage of the Group’s inventories to total assets is material and the Group applies judgements and estimates in determining the net realizable value of inventories at the balance sheet date. The Group mainly produces DRAM and flash memory. As these products have a short life cycle and belong to a highly competitive industry, the market prices change frequently. Since the Group’s inventories and the allowance for inventory valuation losses are material to the financial statements, the valuation of inventories has been identified as one of the key audit matters.

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Obtained an understanding of the Group’s operations and industry. Assessed the reasonableness of the policy and procedures to recognize allowance for inventory valuation losses.

• B. Obtained an understanding of the Group’s inventory control procedures. Reviewed annual inventory count plan and observed the annual physical count of material inventory storage location in order to assess the effectiveness of internal controls over inventory.

• C. Obtained relevant evaluation reports of inventory and tested the logic and accuracy of information to assess the reasonableness of allowance for inventory valuation losses.

Estimation of allowance for sales discounts

Description

In consideration of business volume, the Group provides a variety of business incentives to specific customers or products, and based on that, the Group can estimate the allowance for sales discounts monthly. Refer to Notes 4(26) and 6(4) to the consolidated financial statements for the information on the estimation of allowance for sales discounts.

Since the contracts are numerous and the result could affect the net revenue in the consolidated financial statements, the estimation of allowance for sales discounts has been identified as one of the key audit matters.

~3~

How our audit addressed the matter

We performed the following audit procedures in respect of the above key audit matter:

• A. Obtained an understanding of the Group’s operations, industry and the procedures to recognize allowance for sales discounts.

• B. Obtained an understanding of the Group’s sales procedures and interviewed management to assess the appropriateness of sales allowance contracts and internal control over estimation of allowance.

• C. Obtained the evaluation list of allowance for sales discounts, and tested material sales allowance contracts and recalculated it to assess the reasonableness of allowance determined by the Group.

Other matter – Parent company only financial reports

We have audited and expressed an unqualified opinion on the parent company only financial statements of Transcend Information, Inc. as at and for the years ended December 31, 2023 and 2022.

Responsibilities of management and those charged with governance for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations that came into effect as endorsed by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the Audit Committee, are responsible for overseeing the Group’s financial reporting process.

Independent auditors’ responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a

~4~

guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgement and professional skepticism throughout the audit. We also:

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

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

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

• D. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.

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

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

~5~

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

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

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

Chen, Ching Chang Lin, Yi-Fan

For and on behalf of PricewaterhouseCoopers, Taiwan February 29, 2024

------------------------------------------------------------------------------------------------------------------------------The accompanying consolidated financial statements are not intended to present the financial position and results of operations and cash flows in accordance with accounting principles generally accepted in countries and jurisdictions other than the Republic of China. The standards, procedures and practices in the Republic of China governing the audit of such financial statements may differ from those generally accepted in countries and jurisdictions other than the Republic of China. Accordingly, the accompanying consolidated financial statements and independent auditors’ report are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China and their applications in practice.

As the consolidated financial statements are the responsibility of the management, PricewaterhouseCoopers cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

~6~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Assets	Notes 6(1) 6(3) 6(4) 6(4) 6(5) 6(2) 6(6) 6(3) 6(7) 6(8) and 8 6(9) and 7 6(11) 6(23) 6(12)	December 31, 2023 AMOUNT % $ 1,858,719 8 8,130,839 37 323 - 1,247,331 6 113,104 1 5,003,689 22 41,262 - 16,395,267 74 461,734 2 626,628 3 301,602 1 105,138 - 1,509,348 7 168,708 1 2,580,696 12 80,796 - 59,364 - 5,894,014 26 $ 22,289,281 100	December 31, 2022	December 31, 2022
		AMOUNT $ 1,858,719 8,130,839 323 1,247,331 113,104 5,003,689 41,262 16,395,267 461,734 626,628 301,602 105,138 1,509,348 168,708 2,580,696 80,796 59,364 5,894,014 $ 22,289,281	AMOUNT $ 3,187,312 8,611,357 867 1,217,936 77,626 3,143,064 16,710 16,254,872 51,463 524,939 - 136,710 1,580,372 196,190 2,593,931 137,774 52,191 5,273,570 $ 21,528,442	%
Current assets 1100 Cash and cash equivalents 1136 Financial assets at amortised cost - current 1150 Notes receivable, net 1170 Accounts receivable, net 1200 Other receivables 130X Inventories 1479 Other current assets 11XX Total current assets Non-current assets 1510 Financial assets at fair value through profit or loss - non-current 1517 Financial assets at fair value through other comprehensive income - non- current 1535 Financial assets at amortised cost - non-current 1550 Investments accounted for using equity method 1600 Property, plant and equipment, net 1755 Right-of-use assets 1760 Investment property, net 1840 Deferred income tax assets 1900 Other non-current assets 15XX Total non-current assets 1XXX Total assets				15 40 - 6 - 14 -
				75
				- 3 - 1 7 1 12 1 -
				25
				100

(Continued)

~7~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Liabilities and equity

December 31, 2023 December 31, 2022 Notes AMOUNT % AMOUNT % $ 1,791,770 8 $ 472,677 2 7 39,913 - 27,442 - 301,355 2 271,948 2 494,669 2 581,546 3 7 52,944 - 47,806 - 22,189 - 25,348 - 2,702,840 12 1,426,767 7 6(23) 173,377 1 376,447 2 7 101,640 1 132,962 - 6(13) 42,714 - 41,730 - 317,731 2 551,139 2 3,020,571 14 1,977,906 9 6(14) 4,290,617 19 4,290,617 20 6(15) 3,044,619 13 3,387,781 16 6(16) 5,303,693 24 5,057,967 24 357,817 2 190,514 1 6,502,327 29 6,981,474 32 6(17) ( 230,363) ( 1) ( 357,817) ( 2 ) 19,268,710 86 19,550,536 91 9 11 $ 22,289,281 100 $ 21,528,442 100

Current liabilities 2170 Accounts payable 2180 Accounts payable - related parties 2200 Other payables 2230 Current income tax liabilities 2280 Lease liabilities - current 2300 Other current liabilities 21XX Total current liabilities Non-current liabilities 2570 Deferred income tax liabilities 2580 Lease liabilities - non-current 2600 Other non-current liabilities 25XX Total non-current liabilities 2XXX Total liabilities Equity attributable to shareholders of parent Share capital 3110 Common stock Capital surplus 3200 Capital surplus Retained earnings 3310 Legal reserve 3320 Special reserve 3350 Unappropriated retained earnings Other equity interest 3400 Other equity interest 3XXX Total equity Significant contingent liabilities and unrecognized contract commitments Significant events after the balance sheet date 3X2X Total liabilities and equity

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

~8~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

Items

For the years ended December 31 2023 2022 Notes AMOUNT % AMOUNT % 6(18) and 7 $ 10,496,172 100 $ 12,122,350 100 6(5)(22) and 7 ( 7,451,567) ( 71) ( 9,399,607) ( 77) 3,044,605 29 2,722,743 23 6(22) ( 742,597) ( 7) ( 750,015) ( 6) ( 279,454) ( 3) ( 329,213) ( 3) ( 132,973) ( 1) ( 137,105) ( 1) 6(4) 65 - 295 - ( 1,154,959) ( 11) ( 1,216,038) ( 10) 1,889,646 18 1,506,705 13 6(3)(19) 394,761 4 114,926 1 6(6)(10)(11)(20) 78,703 1 82,483 1 6(2)(21) 133,172 1 1,643,836 13 6(9) ( 3,320) - ( 1,973) - 6(7) ( 22,128) - 10,300 - 581,188 6 1,849,572 15 2,470,834 24 3,356,277 28 6(23) ( 485,999) ( 5) ( 901,933) ( 8) $ 1,984,835 19 $ 2,454,344 20 6(13) ($ 2,159) - $ 5,185 - 6(6)(17) 173,465 1 ( 170,069) ( 1) 6(7) 1,524 - ( 219) - 6(17) ( 46,041) - 892 - 6(17)(23) 9,208 - ( 178) - $ 135,997 1 ($ 164,389) ( 1) $ 2,120,832 20 $ 2,289,955 19 $ 1,984,835 19 $ 2,454,344 20 $ 2,120,832 20 $ 2,289,955 19 6(24) $ 4.63 $ 5.72 $ 4.62 $ 5.71

4000 Operating revenue 5000 Operating costs 5900 Gross profit Operating expenses 6100 Sales and marketing expenses 6200 Administrative expenses 6300 Research and development expenses 6450 Expected credit impairment gain 6000 Total operating expenses 6900 Operating profit Non-operating income and expenses 7100 Interest income 7010 Other income 7020 Other gains and losses 7050 Finance costs 7060 Share of (loss) profit of associates and joint ventures accounted for using the equity method 7000 Total non-operating income and expenses 7900 Profit before income tax 7950 Income tax expense 8200 Profit for the year Other comprehensive income (loss) Components of other comprehensive income (loss) that will not be reclassified to profit or loss 8311 (Loss) gain on remeasurements of defined benefit plans 8316 Unrealized gain (loss) on financial assets at fair value through other comprehensive income 8320 Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method Components of other comprehensive income (loss) that will be reclassified to profit or loss 8361 Financial statements translation differences of foreign operations 8399 Income tax related to components of other comprehensive income that will be reclassified to profit or loss 8300 Other comprehensive income (loss) for the year 8500 Total comprehensive income Net profit attributable to: 8610 Shareholders of parent Comprehensive income attributable to: 8710 Shareholders of parent Earnings per share (in dollars) 9750 Basic earnings per share 9850 Diluted earnings per share

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

~9~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

For the year ended December 31, 2022 Balance at January 1, 2022 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2021 earnings Legal reserve Cash dividends Special reserve Cash payment from capital surplus Net loss on disposal of financial assets at fair value through other comprehensive income Expired unclaimed dividends recognized as capital surplus Balance at December 31, 2022 For the year ended December 31, 2023 Balance at January 1, 2023 Net income for the year Other comprehensive income (loss) Total comprehensive income (loss) Appropriations and distribution of 2022 earnings Legal reserve Cash dividends Special reserve Cash payment from capital surplus Net gain on disposal of financial assets at fair value through other comprehensive income Expired unclaimed dividends recognized as capital surplus Balance at December 31, 2023	Notes								Equity attribu	ta	ble to shareholder	s o	f the parent							Total equity
			Common stock				Capital Reserves						Retained Earnings			Other EquityInterest
					Additional paid-in capital		Donated assets received		Net assets from merger		Legal reserve		Special reserve		Unappropriated retained earnings	Financial statements translation differences of foreign operations		Unrealised gains (losses) from financial assets measured at fair value through other comprehensive income
	6(6)(17) 6(16) 6(6)(17) 6(6)(17) 6(16) 6(6)(17)		$ 4,290,617 - - - - - - - - - $ 4,290,617 $ 4,290,617 - - - - - - - - - $ 4,290,617	$ 3,691,432 - - - - - - ( 343,249 ) - - $ 3,348,183 $ 3,348,183 - - - - - - ( 343,249 ) - - $ 3,004,934			$ 4,354 - - - - - - - - 116 $ 4,470 $ 4,470 - - - - - - - - 87 $ 4,557		$ 35,128 - - - - - - - - - $ 35,128 $ 35,128 - - - - - - - - - $ 35,128		$ 4,803,503 - - - 254,464 - - - - - $ 5,057,967 $ 5,057,967 - - - 245,726 - - - - - $ 5,303,693		$ 117,244 - - - - - 73,270 - - - $ 190,514 $ 190,514 - - - - - 167,303 - - - $ 357,817	$ 7,083,072 2,454,344 4,966 2,459,310 ( 254,464 ) ( 2,231,121 ) ( 73,270 ) - ( 2,053 ) - $ 6,981,474 $ 6,981,474 1,984,835 ( 635 ) 1,984,200 ( 245,726 ) ( 2,059,496 ) ( 167,303 ) - 9,178 - $ 6,502,327		($ 197,932 ) - 714 714 - - - - - - ($ 197,218 ) ($ 197,218 ) - ( 36,833 ) ( 36,833 ) - - - - - - ($ 234,051 )	$ 7,417 - ( 170,069 ) ( 170,069 ) - - - - 2,053 - ($ 160,599 ) ($ 160,599 ) - 173,465 173,465 - - - - ( 9,178 ) - $ 3,688		$ 19,834,835 2,454,344 ( 164,389 ) 2,289,955 - ( 2,231,121 ) - ( 343,249 ) - 116 $ 19,550,536 $ 19,550,536 1,984,835 135,997 2,120,832 - ( 2,059,496 ) - ( 343,249 ) - 87 $ 19,268,710

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

~10~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Profit before tax Adjustments Adjustments to reconcile profit (loss) Net (gain) loss on financial assets at fair value through profit or loss Share of profit or loss of associates and joint ventures accounted for using the equity method Expected credit impairment gain Gain on disposal of non-current assets held for sale Loss on disposal of property, plant and equipment Depreciation Interest income Interest expense Dividend income Changes in assets and liabilities relating to operating activities Changes in assets relating to operating activities Financial assets at fair value through profit or loss - current Notes receivable Accounts receivable Other receivables Inventories Other current assets Changes in liabilities relating to operating activities Accounts payable Accounts payable - related parties Other payables Other current liabilities Net defined benefit liability Other non-current liabilities Cash inflow generated from operations Dividends received Interest received Income tax paid Net cash flows provided by operating activities CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from disposal of financial assets at fair value through profit or loss - non-current Acquisition of financial assets at fair value through profit or loss - non- current Proceeds from disposal of financial assets at amortised cost Acquisition of financial assets at amortised cost Proceeds from disposal of financial assets at fair value through other comprehensive income Acquisition of financial assets at fair value through other comprehensive income Proceeds from disposal of non-current assets held for sale Proceeds from disposal of property, plant and equipment Acquisition of property, plant and equipment Decrease in guarantee deposits paid Acquisition of right-of-use assets Acquisition of investment property Increase in other non-current assets Dividends received Net cash flows used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Decease in guarantee deposits received Payment of lease liabilities Cash dividends paid (including cash payment from capital surplus) Expired unclaimed dividends recognized as capital surplus Net cash flows used in financing activities Effect of exchange rate changes Net (decrease) increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year

For theyears ended December 31 Notes 2023 2022 $ 2,470,834 $ 3,356,277 6(2)(21) ( 38,186 ) 8,271 6(7) 22,128 ( 10,300 ) 6(4) ( 65 ) ( 295 ) 6(21) - ( 1,324,180 ) 6(21) 2 448 6(22) 158,441 194,624 6(19) ( 394,761 ) ( 114,926 ) 6(9) 3,320 1,973 6(6)(20) ( 21,134 ) ( 35,592 ) - 1,517,305 544 1,632 ( 29,347 ) 404,838 ( 28,291 ) 93,247 ( 1,860,625 ) 2,631,761 ( 24,552 ) ( 3,265 ) 1,319,093 ( 892,158 ) 12,471 ( 24,799 ) 29,407 ( 14,220 ) ( 3,159 ) ( 63,258 ) ( 884 ) ( 827 ) - 546 1,615,236 5,727,102 19,874 35,592 388,531 103,776 ( 709,760 ) ( 756,207 ) 1,313,881 5,110,263 - 41,155 ( 372,085 ) - 4,592,690 3,113,029 ( 4,413,471 ) ( 6,150,167 ) 6(6) 71,776 6,179 - ( 71,611 ) - 1,800,796 - 162 6(25) ( 24,173 ) ( 38,325 ) 1,893 - - ( 692 ) 6(11) ( 489 ) ( 4,082 ) ( 11,978 ) ( 5,262 ) 6(7) 10,968 21,885 ( 144,869 ) ( 1,286,933 ) ( 291 ) - ( 49,430 ) ( 55,289 ) 6(16) ( 2,402,745 ) ( 2,574,370 ) 87 116 ( 2,452,379 ) ( 2,629,543 ) ( 45,226 ) ( 24,581 ) ( 1,328,593 ) 1,169,206 3,187,312 2,018,106 $ 1,858,719 $ 3,187,312

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

~11~

TRANSCEND INFORMATION, INC. AND SUBSIDIARIES NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022

(Expressed in thousands of New Taiwan dollars, except as otherwise indicated)

1. HISTORY AND ORGANIZATION

Transcend Information, Inc. (the “Company”) was incorporated under the provisions of the Company Law of the Republic of China (R.O.C.) in August 1989. The main activities of the Company and its subsidiaries (collectively referred herein as the “Group”) are manufacturing, processing and sales of computer software and hardware, peripheral equipment and other computer components. The Securities and Futures Commission of the Republic of China had approved the Company’s shares to be listed on the Taiwan Stock Exchange and the shares started trading on May 3, 2001.

2. THE DATE OF AUTHORIZATION FOR ISSUANCE OF THE FINANCIAL STATEMENTS AND PROCEDURES FOR AUTHORIZATION

These consolidated financial statements were authorized for issuance by the Board of Directors on February 29, 2024.

3. APPLICATION OF NEW STANDARDS, AMENDMENTS AND INTERPRETATIONS

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards (“IFRS[®] ”) Accounting Standards that came into effect as endorsed by the Financial Supervisory Commission (“FSC”)

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

New Standards,Interpretations andAmendments Amendments to IAS 1, ‘Disclosure of accounting policies’ Amendments to IAS 8, ‘Definition of accounting estimates’ Amendments to IAS 12, ‘Deferred tax related to assets and liabilities arising from a single transaction’ Amendments to IAS 12, ‘International tax reform - pillar two model rules’	Effective date by International Accounting StandardsBoard
	January 1, 2023 January 1, 2023 January 1, 2023 May 23, 2023

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

~12~

(2) Effect of new issuances of or amendments to IFRS Accounting Standards as endorsed by the FSC but

not yet adopted by the Group

New standards, interpretations and amendments endorsed by the FSC and will become effective from 2024 are as follows:

	Effective date
	by International
	Accounting
New Standards, Interpretations and Amendments	Standards Board
Amendments to IFRS 16, ‘Lease liability in a sale and leaseback’	January 1, 2024
Amendments to IAS 1, ‘Classification of liabilities as current or non-current’	January 1, 2024
Amendments to IAS 1, ‘Non-current liabilities with covenants’	January 1, 2024
Amendments to IAS 7 and IFRS 7, ‘Supplier finance arrangements’	January 1, 2024

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

(3) IFRS Accounting Standards issued by IASB but not yet endorsed by the FSC

New standards, interpretations and amendments issued by IASB but not yet included in the IFRS Accounting Standards as endorsed by the FSC are as follows:

New Standards,Interpretations andAmendments Amendments to IFRS 10 and IAS 28, ‘Sale or contribution of assets between an investor and its associate or joint venture’ IFRS 17, ‘Insurance contracts’ Amendments to IFRS 17, ‘Insurance contracts’ Amendment to IFRS 17, ‘Initial application of IFRS 17 and IFRS 9 – comparative information’ Amendments to IAS 21, ‘Lack of exchangeability’	Effective date by International Accounting StandardsBoard
	To be determined by International Accounting Standards Board January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025

The above standards and interpretations have no significant impact to the Group’s financial condition and financial performance based on the Group’s assessment.

~13~

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

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

(1) Compliance statement

The consolidated financial statements of the Group have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC[®] Interpretations, and SIC[®] Interpretations that came into effect as endorsed by the FSC (collectively referred herein as the “IFRSs”).

(2) Basis of preparation

• A. Except for the following items, the consolidated financial statements have been prepared under the historical cost convention:

• (a) Financial assets at fair value through profit or loss.

• (b) Financial assets at fair value through other comprehensive income.

• (c) Defined benefit liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligations.

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

(3) Basis of consolidation

A. Basis for preparation of consolidated financial statements:

• (a) All subsidiaries are included in the Group’s consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control of the subsidiaries.

• (b) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

~14~

• (c) Profit or loss and each component of other comprehensive income are attributed to the shareholders of the parent and to the non-controlling interests. Total comprehensive income is attributed to the shareholders of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

• (d) Changes in a parent’s ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.

• (e) When the Group loses control of a subsidiary, the Group remeasures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

• B. Subsidiaries included in the consolidated financial statements:

Name of Name of Investor Subsidiary Transcend Information, Inc. Saffire Investment Ltd. (Saffire) Transcend Japan Inc. (Transcend Japan) Transcend Information Inc. (Transcend USA) Transcend Korea Inc. (Transcend Korea)	Main Business Activities Investment holdings Import and wholesale of computer memory modules Import and wholesale of computer memory modules Import and wholesale of computer memory modules	December December 31,2023 31,2022 100 100 100 100 100 100 100 100 Ownership (%)	Description
		December 31,2023 100 100 100 100

~15~

==> picture [467 x 41] intentionally omitted <==

----- Start of picture text -----

Ownership (%)
Name of Name of Main Business December December
Investor Subsidiary Activities 31, 2023 31, 2022 Description
----- End of picture text -----

Name of Investor	Name of Subsidiary	Main Business Activities	December 31, 2023 Owners	December 31, 2022 Description hip (%)
Saffire	Memhiro Pte. Ltd.	Investment holdings	100	100
Investment	(Memhiro)
Ltd.
Memhiro	Transcend	Import and wholesale	100	100
Pte. Ltd.	Information Europe	of computer memory
	B.V. (Transcend	modules
	Europe)
	Transcend	Import and wholesale	100	100
	Information Trading	of computer memory
	GmbH (Transcend	modules
	Germany)
	Transcend	Manufacture and sales	100	100
	Information	of blank medium
	(Shanghai), Ltd.	such as memory
	(Transcend	expansion cards and
	Shanghai)	external storage
		devices, and other
		disk drives and lease
		of self-owned
		buildings
	Transtech Trading	Wholesale, agent,	100	100
	(Shanghai) Co., Ltd.	import and export,
	(Transtech	retail and related
	Shanghai)	services of
		expansion memory
		modules, external
		storage devices
		and related
		storage equipment
		and components
	Transcend	Import and wholesale	100	100
	Information (H.K)	of computer memory
	Ltd. (Transcend	modules
	HK)

• C. Subsidiaries not included in the consolidated financial statements: None.

• D. Adjustment for subsidiaries with different balance sheet dates: None.

• E. Significant restrictions: None.

• F. Subsidiaries that have non-controlling interests that are material to the Group: None.

~16~

(4) Foreign currency translation

Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (the “functional currency”). The consolidated financial statements are presented in New Taiwan dollars, which is the Company’s functional and the Group’s presentation currency.

• A. Foreign currency transactions and balances

• (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 assets and liabilities denominated in foreign currencies held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in profit or loss. Non-monetary assets and liabilities denominated in foreign currencies held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, nonmonetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the dates of the initial transactions.

• (d) All foreign exchange gains and losses are presented in the statement of comprehensive income within ‘other gains and losses’.

• B. Translation of foreign operations

The operating results and financial position of all the group entities 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.

~17~

(5) Classification of current and non-current items

• A. Assets that meet one of the following criteria are classified as current assets:

• (a) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle;

• (b) Assets held mainly for trading purposes;

• (c) Assets that are expected to be realized within twelve months from the balance sheet date;

• (d) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to settle liabilities more than twelve months after the balance sheet date.

Otherwise they are classified as non-current assets.

• B. Liabilities that meet one of the following criteria are classified as current liabilities:

• (a) Liabilities that are expected to be settled within the normal operating cycle;

• (b) Liabilities arising mainly from trading activities;

• (c) Liabilities that are to be settled within twelve months from the balance sheet date;

• (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.

Otherwise they are classified as non-current liabilities.

(6) Cash equivalents

Cash equivalents refer to 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. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

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

• A. Financial assets at fair value through profit or loss are financial assets that are not measured at amortised cost or fair value through other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through profit or loss are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value and recognizes the transaction costs in profit or loss. The Group subsequently measures the financial assets at fair value, and recognizes the gain or loss in profit or loss.

~18~

(8) Financial assets at fair value through other comprehensive income

• A. Financial assets at fair value through other comprehensive income comprise equity securities which are not held for trading, and for which the Group has made an irrevocable election at initial recognition to recognize changes in fair value in other comprehensive income.

• B. On a regular way purchase or sale basis, financial assets at fair value through other comprehensive income are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. The Group subsequently measures the financial assets at fair value:

The changes in fair value of equity investments that were recognized in other comprehensive income are reclassified to retained earnings and are not reclassified to profit or loss following the derecognition of the investment. Dividends are recognized as revenue when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group and the amount of the dividend can be measured reliably.

(9) Financial assets at amortised cost

• A. Financial assets at amortised cost are those that meet all of the following criteria:

• (a) The objective of the Group’s business model is achieved by collecting contractual cash flows.

• (b) The assets’ contractual cash flows represent solely payments of principal and interest.

• B. On a regular way purchase or sale basis, financial assets at amortised cost are recognized and derecognized using trade date accounting.

• C. At initial recognition, the Group measures the financial assets at fair value plus transaction costs. Interest income from these financial assets is included in finance income using the effective interest method. A gain or loss is recognized in profit or loss when the asset is derecognized or impaired.

(10) Accounts and notes receivable

• A. Accounts and notes receivable entitle the Group a legal right to receive consideration in exchange for transferred goods or rendered services.

• B. The short-term accounts and notes receivable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

• (11) Impairment of financial assets

For financial assets at amortised cost and accounts receivable that have a significant financing component, at each reporting date, the Group recognizes the impairment provision for 12 months expected credit losses if there has not been a significant increase in credit risk since initial recognition or recognizes the impairment provision for the lifetime expected credit losses (ECLs) if such credit risk has increased since initial recognition after taking into consideration all reasonable and verifiable information that includes forecasts. On the other hand, for accounts receivable or

~19~

contract assets that do not contain a significant financing component, the Group recognizes the impairment provision for lifetime ECLs.

(12) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to receive the cash flows from the financial asset expire.

- (13) Leasing arrangements (lessor) operating leases

Lease income from an operating lease (net of any incentives given to the lessee) is recognized in profit or loss on a straight-line basis over the lease term.

• (14) Inventories

• Inventories are stated at the lower of cost and net realizable value. 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 actual operating capacity). It excludes borrowing costs. The item by item approach is used in applying the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

(15) Investments accounted for using equity method - associates

• A. Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for using the equity method and are initially recognized at cost.

• B. The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

• C. When changes in an associate’s equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group’s ownership percentage of the associate, the Group recognizes change in ownership interests in the associate in ‘capital surplus’ in proportion to its ownership.

• D. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies adopted by the Group.

~20~

• E. In the case that an associate issues new shares and the Group does not subscribe or acquire new shares proportionately, which results in a change in the Group’s ownership percentage of the associate but maintains significant influence on the associate, then ‘capital surplus’ and ‘investments accounted for under the equity method’ shall be adjusted for the increase or decrease of its share of equity interest. If the above condition causes a decrease in the Group’s ownership percentage of the associate, in addition to the above adjustment, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately on the same basis as would be required if the relevant assets or liabilities were disposed of.

• (16) Property, plant and equipment

• A. Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.

• B. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.

• C. Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.

• D. 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 estimate under IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, from the date of the change. The estimated useful lives of property, plant and equipment are as follows:

Buildings and structures 8 ~ 50 years Machinery and equipment 2 ~ 10 years Transportation equipment 3 ~ 5 years Office equipment and others 2 ~ 5 years

~21~

(17) Leasing arrangements (lessee) - right-of-use assets / lease liabilities

• A. Leases are recognized as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is available for use by the Group. For short-term leases or leases of lowvalue assets, lease payments are recognized as an expense on a straight-line basis over the lease term.

• B. Lease liabilities include the net present value of the remaining lease payments at the commencement date, discounted using the incremental borrowing interest rate. Lease payments are comprised of the following:

• (a) Fixed payments, less any lease incentives receivable; and

• (b) Variable lease payments that depend on an index or a rate.

The Group subsequently measures the lease liability at amortised cost using the interest method and recognizes interest expense over the lease term. The lease liability is remeasured and the amount of remeasurement is recognized as an adjustment to the right-of-use asset when there are changes in the lease term or lease payments and such changes do not arise from contract modifications.

• C. At the commencement date, the right-of-use asset is stated at cost comprising the amount of the initial measurement of lease liability.

The right-of-use asset is measured subsequently using the cost model and is depreciated from the commencement date to the earlier of the end of the asset’s useful life or the end of the lease term. When the lease liability is remeasured, the amount of remeasurement is recognized as an adjustment to the right-of-use asset.

(18) Investment property

An investment property is stated initially at its cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 10 ~ 55 years.

(19) Impairment of non-financial assets

The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell or value in use. When the circumstances or reasons for recognizing impairment loss for an asset in prior years no longer exist or diminish, the impairment loss is reversed. The increased carrying amount due to reversal should not be more than what the depreciated or amortised historical cost would have been if the impairment had not been recognized.

~22~

(20) Notes and accounts payable

Notes and accounts payable are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. They are recognized initially at fair value and subsequently measured at amortised cost using the effective interest method. However, short-term accounts payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) Offsetting financial assets and liabilities

Financial assets and liabilities are offset and reported in the net amount 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 realize the asset and settle the liability simultaneously.

(22) 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 expense 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

• i. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. 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. The net defined benefit 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 government bonds (at the balance sheet date) of a currency and term consistent with the currency and term of the employment benefit obligations.

• ii. Remeasurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recorded as retained earnings.

• iii. Past service costs are recognized immediately in profit or loss.

~23~

• C. Employees’ compensation and directors’ remuneration

Employees’ compensation and directors’ remuneration are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. Any difference between the resolved amounts and the subsequently actual distributed amounts is accounted for as changes in estimates.

(23) 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.

• B. The current income tax expense 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 year the stockholders resolve to retain the earnings.

• C. Deferred tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred 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 tax asset is realized or the deferred tax liability is settled.

• D. Deferred 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 utilized. At each balance sheet date, unrecognized and recognized deferred tax assets are reassessed.

(24) Share capital

• A. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are shown in equity as a deduction, net of tax, from the proceeds.

• B. Where the Company repurchases the Company’s shares that have been issued, the consideration paid, excluding any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the Company’s equity holders.

(25) Dividends

Dividends are recorded in the Company’s financial statements in the period in which they are resolved by the Company’s shareholders. Cash dividends are recorded as liabilities; stock dividends are recorded as stock dividends to be distributed and are reclassified to ordinary shares on the effective date of new shares issuance.

~24~

(26) Revenue recognition

• A. Sales of goods

• (a) The Group manufactures and sells computer software and hardware, computer peripheral equipment, and computer component products. When the right of control is transferred to the customer, sales revenue is recognized. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Group has objective evidence that all criteria for acceptance have been satisfied.

• (b) Sales revenue is recognized based on contract price, net of sales returns, volume discounts and estimated sales discounts. The goods are often sold with volume discounts based on aggregate sales over a one-month period. Sales discounts and allowances are estimated and provided for based on customer contracts, and revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur. The estimation is subject to an assessment at each reporting date and recognized as allowance for sales discounts. No element of financing is deemed present as the sales are made with a credit term of 30-60 days after monthly billing, which is consistent with market practice.

• (c) A receivable is recognized when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.

• B. Incremental costs of obtaining a contract

Given that the contractual period lasts less than one year, the Group recognizes the incremental costs of obtaining a contract as an expense when incurred although the Group expects to recover those costs.

• (27) Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision-Maker. The Group’s Chief Operating Decision-Maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Chairmen of the Board of Directors that makes strategic decisions.

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

The preparation of these consolidated financial statements requires management to make critical judgements in applying the Group’s accounting policies and make critical assumptions and estimates concerning future events. Assumptions and estimates may differ from the actual results and are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year; and the related information is addressed below:

~25~

(1) Critical judgements in applying the Group’s accounting policies

Investment property

The Group uses a portion of the property for its own use and another portion to earn rentals or for capital appreciation. When these portions cannot be sold separately and cannot be leased out separately under a finance lease, the property is classified as investment property only if the own use portion accounts for an insignificant portion of the property.

(2) Critical accounting estimates and assumptions

Valuation of inventories

As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories on balance sheet date using judgements and estimates. Due to the rapid technology innovation, the Group evaluates the amounts of normal inventory consumption, obsolete inventories or inventories without market selling value on balance sheet date, and writes down the cost of inventories to the net realizable value. The valuation of inventories is based on recent market price and demand of products in the future specific period, thus there might be significant changes in the valuation.

As of December 31, 2023, the carrying amount of inventories was $5,003,689.

6. DETAILS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

Cash on hand and petty cash Checking accounts and demand deposits Time deposits	December31,2023 441 $ 1,603,099 255,179 1,858,719 $	December31,2022
		173 $ 2,519,575 667,564
		3,187,312 $

• A. The aforementioned time deposits pertain to high liquidity investments with maturity within three months.

• B. The Group transacts with a variety of financial institutions all with high credit quality to disperse credit risk, so it expects that the probability of counterparty default is remote.

• C. The Group has no cash and cash equivalents pledged to others.

~26~

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

Items Non-current items: Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Valuation adjustments	December31,2023 December31,2022 433,566 $ 61,481 $ 28,168 10,018) ( 461,734 $ 51,463 $

• A. Amounts recognized in profit or loss in relation to financial assets at fair value through profit or loss are listed below:

Financial assets mandatorily measured at fair value through profit or loss Beneficiary certificates Financial products	For the years ended December 31,
	2023 2022 38,186 $ 17,262) ($ - 8,991 38,186 $ 8,271) ($

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

(3) Financial assets at amortised cost

Items Current items: Time deposits with original maturity of more than three months Non-current items: Corporate bonds	December31,2023 8,130,839 $ 301,602 $	December31,2022
		8,611,357 $
		- $

• A. Amounts recognized in profit or loss in relation to financial assets at amortised cost are listed below:

Interest income	For theyears ended December31,
	2023 2022 352,396 $ 87,929 $

• B. The Group has no financial assets at amortised cost pledged to others as collateral.

~27~

• C. The Group transacts time deposits with reputable domestic and foreign banks. The issuers of ordinary corporate bonds which the Group invested are well-known domestic and foreign enterprises. The Group’s counterparties have good credit quality, so the Group expects that the probability of counterparty default is remote. The impairment loss is assessed using a 12-month expected credit loss approach.

(4) Notes and accounts receivable

		December	31, 2023		December	31, 2022
Notes receivable		$	323		$	867
Accounts receivable		$	1,247,793		$	1,218,446
Less: Loss allowance	(		462)	(		510)
		$	1,247,331		$	1,217,936

• A. As of December 31, 2023 and 2022, the estimated sales discounts and allowances were $105,415 and $92,122, respectively. Since the sales discounts and allowances met the requirements for offset of financial liabilities and financial assets, the net amounts were shown under accounts receivable.

• B. The ageing analysis of accounts receivable and notes receivable is as follows:

Not past due Up to 30 days 31 to 90 days 91 to 180 days Over 180 days	December31,2023 1,009,865 $ 225,142 1,701 2,687 8,721 1,248,116 $	December 31, 2022
		962,635 $ 238,088 8,809 5,776 4,005
		1,219,313 $

The above ageing analysis was based on past due date.

• C. The Group has credit insurance that covers accounts receivable from major customers. Should bad debts occur, the Group will receive 90% of the losses resulting from non-payment.

• D. As of December 31, 2023 and 2022, notes receivable and accounts receivable were all from contracts with customers. As of January 1, 2022, the balance of notes receivable and accounts receivable from contracts with customers amounted to $1,625,783.

• E. As at December 31, 2023 and 2022, without taking into account any collateral held or other credit enhancements, the maximum exposure to credit risk in respect of the amount that best represents the Group’s notes receivable were $323 and $867, respectively; the maximum exposure to credit risk in respect of the amount that best represents the Group’s accounts receivable were $1,247,331 and $1,217,936, respectively.

~28~

• F. The Group classifies customers’ accounts receivable in accordance with the credit rating of the customer. The Group applies the simplified approach to estimate expected credit loss under the provision matrix basis.

• G. The Group wrote-off the financial assets, which cannot reasonably be expected to be recovered, after initiating recourse procedures. However, the Group will continue executing the recourse procedures to secure their rights. On December 31, 2023 and 2022, the Group has no written-off financial assets that are still under recourse procedures.

• H. The Group used forecastability, historical and timely information to assess the loss rate of accounts receivable. As of December 31, 2023 and 2022, the provision matrix is as follows:

Not past due December 31, 2023 Expected loss rate 0.002%~0.384% Total book value 1,009,542 $ Not past due December 31, 2022 Expected loss rate 0.003%~0.523% Total book value 961,768 $	1-180 days past due 0.011%~38% 229,530 $ 1-180 days past due 0.017%~38% 252,673 $	Over 180 days past due 25%~100% 8,721 $ Over 180 days past due 25%~100% 4,005 $	Total
			1,247,793 $ Total
			1,218,446 $

• I. The balance of allowance for loss and movements are as follows:

			2023				2022
At January 1		$		510		$	800
Reversal of impairment	(			65)	(		295)
Effect of exchange rate changes				17			5
At December 31		$		462		$	510

• J. The Group does not hold any collateral as security.

~29~

(5) Inventories

Raw materials Work in progress Finished goods Raw materials Work in progress Finished goods		December31,2023
	Allowance for Cost valuation loss 4,107,777 $ 119,316) ($ 423,938 511) ( 594,886 3,085) ( 5,126,601 $ 122,912) ($ December31,2022		Bookvalue
			3,988,461 $ 423,427 591,801
			5,003,689 $
	Allowance for Cost valuation loss 2,743,592 $ 446,816) ($ 285,227 6,256) ( 601,619 34,302) ( 3,630,438 $ 487,374) ($		Bookvalue
			2,296,776 $ 278,971 567,317
			3,143,064 $

A. The cost of inventories recognized as expense for the year:

		Forthe years ended	Forthe years ended	December31,
		2023		2022
Cost of goods sold		7,816,029 $	$	8,964,753
(Gain on reversal of) loss on decline in market
value of inventory	(	364,462)		434,854
		7,451,567 $	$	9,399,607

The gain on reversal of decline in market value of inventory for the year ended December 31, 2023 arose from the clearance of inventories which were previously provided with allowance and the recovery in the net realizable value of certain inventories.

B. No inventories were pledged to others.

~30~

(6) Financial assets at fair value through other comprehensive income - non-current

Items Non-current items: Equity instruments Listed stocks Others Valuation adjustments	December31,2023 December 31, 2022 621,815 $ 684,413 $ 1,125 1,125 622,940 685,538 3,688 160,599) ( 626,628 $ 524,939 $

• A. The Group has elected to classify equity investments that are considered to be strategic investments as financial assets at fair value through other comprehensive income. The fair value of such investments amounted to $626,628 and $524,939 as at December 31, 2023 and 2022, respectively.

• B. For the years ended December 31, 2023 and 2022, the Group disposed equity investments whose fair value were $71,776 and $6,179, respectively and the cumulative gains (losses) on disposal was transferred to retained earnings in the amount of $9,178 and ($2,053), respectively.

• C. Amounts recognized in profit or loss and other comprehensive income in relation to the financial assets at fair value through other comprehensive income are listed below:

Equity instruments at fair value through other comprehensive income Fair value change recognized in other comprehensive income (loss) Cumulative gains (loss) reclassified to retained earnings due to derecognition Dividend income recognized in profit or loss Held at end of year Derecognized during the year	2023 2022 173,465 $ 170,069) ($ 9,178 $ 2,053) ($ 18,584 $ 35,592 $ 2,550 - 21,134 $ 35,592 $ Forthe years endedDecember31,

• D. The Group has no financial assets at fair value through other comprehensive income pledged to others as collateral.

~31~

(7) Investments accounted for using equity method

Investee Company December 31, 2023 December 31, 2022 Taiwan IC Packaging Corporation $ 105,138 $ 136,710

• A. The basic information of the associate that is material to the Group is as follows:

Principal Associate place of December December name business 31,2023 31,2022 Taiwan IC Packaging Corporation Taiwan 12.51% 12.50% Shareholdingratio	Nature of Method of relationship measurement Note Equity method

• Note: Taiwan IC Packaging Corporation is engaged in IC packaging and testing and is the upstream supplier in the IT and semiconductor industries. In order to reach synergy of vertical integration, Taiwan IC Packaging Corporation processes the raw materials provided by the Group into relevant semi-finished goods.

• B. The Group held a 12.51% equity interest in Taiwan IC Packaging Corporation, and is the company’s largest single shareholder. However, the Group does not hold the majority of the voting power during the shareholders’ meeting of Taiwan IC Packaging Corporation and the Group does not serve as corporate director of Taiwan IC Packaging Corporation, which indicate that the Group has no control ability to direct the relevant activities of Taiwan IC Packaging Corporation. In addition, the Company’s chairman is the same with Taiwan IC Packaging Corporation; hence, the Group has significant influence over Taiwan IC Packaging Corporation.

• C. The summarized financial information of the associate that is material to the Group is as follows: Balance sheet

			Taiwan ICPackaging Corporation	Taiwan ICPackaging Corporation	Taiwan ICPackaging Corporation
		December31,2023		December31,2022
Current assets		$	996,963	$	1,218,268
Non-current assets			1,129,944		1,151,953
Current liabilities	(		174,106)	(	167,786)
Non-current liabilities	(		73,302)	(	75,327)
Total net assets		$	1,879,499	$	2,127,108
Share in associate’s net assets		$	235,125	$	265,889
Net equity differences	(		129,987)	(	129,179)
		$	105,138	$	136,710

~32~

Statement of comprehensive income

		Taiwan ICPackaging Corporation	Taiwan ICPackaging Corporation	Taiwan ICPackaging Corporation
		For the years ended December 31,
		2023		2022
Revenue	$	861,693	$	1,223,212
(Loss) profit for the year from continuing
operations	($	176,992)	$	84,128
Total comprehensive (loss) income	($	178,367)	$	96,327
Dividends received from associates	$	10,968	$	21,885

• D. Share of profit (loss) of associates accounted for using the equity method is as follows:

	For theyears ended December31,	For theyears ended December31,
InvesteeCompany	2023	2022
Taiwan IC Packaging Corporation	20,604) ($	10,081 $

• E. The Group’s investment in Taiwan IC Packaging Corporation has quoted market price. The fair value of Taiwan IC Packaging Corporation was $317,957 and $242,305 as of December 31, 2023 and 2022, respectively.

~33~

(8) Property, plant and equipment

											2023
				Buildings and			Machinery and			Transportation				Office
			Land		structures			equipment			equipment		equipment				Others			Total
At January 1
Cost		$	711,572	$	1,204,122		$	345,956		$	28,079		$	30,619		$	20,663		$	2,341,011
Accumulated depreciation			-	(	450,034)	(		250,796)	(		21,649)	(		22,396)	(		15,764)	(		760,639)
		$	711,572	$	754,088		$	95,160		$	6,430		$	8,223		$	4,899		$	1,580,372
At January 1		$	711,572	$	754,088		$	95,160		$	6,430		$	8,223		$	4,899		$	1,580,372
Additions (including transfers)			-		5,510			16,005			-			3,503			2,067			27,085
Disposals			-		-			-			-	(		2)			-	(		2)
Depreciation charge			-	(	31,174)	(		47,275)	(		3,855)	(		4,536)	(		3,582)	(		90,422)
Net exchange differences	(		5,608)	(	2,098)			3			-			17			1	(		7,685)
At December 31		$	705,964	$	726,326		$	63,893		$	2,575		$	7,205		$	3,385		$	1,509,348
At December 31
Cost		$	705,964	$	1,187,112		$	194,519		$	22,360		$	32,057		$	7,257		$	2,149,269
Accumulated depreciation			-	(	460,786)	(		130,626)	(		19,785)	(		24,852)	(		3,872)	(		639,921)
		$	705,964	$	726,326		$	63,893		$	2,575		$	7,205		$	3,385		$	1,509,348

~34~

										2022
			Buildings and			Machinery and			Transportation				Office
		Land		structures			equipment			equipment		equipment				Others		Total
At January 1
Cost	$	712,136	$	2,227,274		$	383,459		$	27,859		$	32,077		$	48,096	$	3,430,901
Accumulated depreciation		-	(	1,146,125)	(		268,788)	(		16,915)	(		21,226)	(		35,834)	(	1,488,888)
	$	712,136	$	1,081,149		$	114,671		$	10,944		$	10,851		$	12,262	$	1,942,013
At January 1	$	712,136	$	1,081,149		$	114,671		$	10,944		$	10,851		$	12,262	$	1,942,013
Additions (including transfers)		-		7,259			41,205			-			1,477			800		50,741
Disposals		-		-	(		121)			-	(		6)	(		483)	(	610)
Transfers to non-current assets held
for sale		-	(	285,968)	(		2,182)	(		18)	(		235)	(		2,023)	(	290,426)
Depreciation charge		-	(	54,674)	(		58,517)	(		4,525)	(		4,020)	(		5,697)	(	127,433)
Net exchange differences	(	564)		6,322			104			29			156			40		6,087
At December 31	$	711,572	$	754,088		$	95,160		$	6,430		$	8,223		$	4,899	$	1,580,372
At December 31
Cost	$	711,572	$	1,204,122		$	345,956		$	28,079		$	30,619		$	20,663	$	2,341,011
Accumulated depreciation		-	(	450,034)	(		250,796)	(		21,649)	(		22,396)	(		15,764)	(	760,639)
	$	711,572	$	754,088		$	95,160		$	6,430		$	8,223		$	4,899	$	1,580,372

A. The relevant assets of the Group recognized as property, plant and equipment are all for self-use.

B. Information about the property, plant and equipment that were pledged to others as collateral is provided in Note 8.

~35~

(9) Leasing arrangements - lessee

• A. The Group leases various assets including land, buildings, and business vehicles. Rental contracts are typically made for periods of 1 to 11 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. The lease agreements do not impose covenants, but leased assets may not be used as security for borrowing purposes.

• B. Short-term leases with a lease term of 12 months or less comprise certain store locations and offices. Low-value assets comprise equipment such as printers and water dispensers.

• C. The carrying amounts of right-of-use assets and the depreciation charge are as follows:

Land Buildings Transportation equipment (business vehicles) Land Buildings Transportation equipment (business vehicles)	December31,2023 December 31, 2022 Carrying amount Carrying amount 128,309 $ 165,858 $ 38,288 28,506 2,111 1,826 168,708 $ 196,190 $ For the years ended December 31,	December31,2023 December 31, 2022 Carrying amount Carrying amount 128,309 $ 165,858 $ 38,288 28,506 2,111 1,826 168,708 $ 196,190 $ For the years ended December 31,
	2023 Depreciationcharge 37,549 $ 16,584 785 54,918 $	2022
		Depreciationcharge
		37,689 $ 15,962 670
		54,321 $

• D. For the years ended December 31, 2023 and 2022, the additions to right-of-use assets were $27,665 and $196,118, respectively. Details are provided in Note 7(2)E.

• E. Information on profit or loss in relation to lease contracts is as follows:

$27,665 and $196,118, respectively. Details are Information on profit or loss in relation to lease	provided in Note 7(2)E. contracts is as follows:	provided in Note 7(2)E. contracts is as follows:
Items affecting profit or loss Interest expense on lease liabilities Expense on short-term lease contracts Expense on leases of low-value assets	For theyears ended December31,
	2023 3,320 $ 7,653 1,334	2022
		1,973 $ 8,052 1,472

• F. For the years ended December 31, 2023 and 2022, the Group’s total cash outflow for leases were $58,417 and $64,813, respectively.

~36~

(10) Leasing arrangements - lessor

• A. The Group leases various assets including land and buildings. Rental contracts are typically made for periods of 1 to 5 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions . To protect the lessor’s ownership rights on the leased assets, leased assets may not be used as security for borrowing purposes, or a residual value guarantee was required.

• B. For the years ended December 31, 2023 and 2022, the Group recognized rent income in the amounts of $57,569 and $46,891, respectively, based on the operating lease agreement, which does not include variable lease payments.

• C. The maturity analysis of the lease payments under the operating leases is as follows:

December 31, 2023 2024 37,444 $ 2023 2025 19,815 2024 2026 12,518 2025 2027 776 2026 2028 - 2027 70,553 $	December31,2022
	56,162 $ 36,136 21,247 12,061 776
	126,382 $

(11) Investment property

At January 1 Cost Accumulated depreciation At January 1 Additions Depreciation charge Net exchange differences At December 31 At December 31 Cost Accumulated depreciation		2023
	Buildings and Land structures Total 2,268,726 $ 466,845 $ 2,735,571 $ - 141,640) ( 141,640) ( 2,268,726 $ 325,205 $ 2,593,931 $ 2,268,726 $ 325,205 $ 2,593,931 $ - 489 489 - 13,101) ( 13,101) ( - 623) ( 623) ( 2,268,726 $ 311,970 $ 2,580,696 $ 2,268,726 $ 465,607 $ 2,734,333 $ - 153,637) ( 153,637) ( 2,268,726 $ 311,970 $ 2,580,696 $		Total
			2,580,696 $

~37~

At January 1 Cost Accumulated depreciation At January 1 Additions Depreciation charge Net exchange differences At December 31 At December 31 Cost Accumulated depreciation		2022

• A. Rental income from the investment property and direct operating expenses arising from investment property are shown below:

Rental income from investment property Direct operating expenses arising from investment property that generated rental income Direct operating expenses arising from investment property that did not generate rental income	2023 2022 57,569 $ 46,891 $ 12,400 $ 12,169 $ 701 $ 701 $ Forthe years endedDecember31,	2023 2022 57,569 $ 46,891 $ 12,400 $ 12,169 $ 701 $ 701 $ Forthe years endedDecember31,
		46,891 $
		12,169 $
		701 $

B. The fair value of the investment property held by the Group was $5,053,643 and $5,047,960 as of December 31, 2023 and 2022, respectively. The aforementioned fair values were assessed based on the transaction prices of similar properties in the same area and are categorized within Level 3 in the fair value hierarchy.

• C. No investment property was pledged to others.

~38~

(12) Other non-current assets

Guarantee deposits paid Prepayment for business facilities Others	December31,2023 December31,2022 32,995 $ 34,888 $ 10,520 2,912 15,849 14,391 59,364 $ 52,191 $

(13) Pensions

A. Defined benefit plan

• (a) The Company has a defined benefit pension plan in accordance with the Labor Standards Act, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Labor Standards Act. Under the defined benefit plan, two units are accrued for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units accrued and the average monthly salaries and wages of the last 6 months prior to retirement. The Company contributes monthly an amount equal to 2% of the employees’ monthly salaries and wages to the retirement fund deposited with Bank of Taiwan, the trustee, under the name of the independent retirement fund committee. Also, the Company would assess the balance in the aforementioned labor pension reserve account by December 31, every year. If the account balance is insufficient to pay the pension calculated by the aforementioned method to the employees expected to qualify for retirement in the following year, the Company will make contributions for the deficit by next March.

• (b) The amounts recognized in the balance sheet are as follows:

		December	31,2023		December	31,2022
Present value of defined benefit obligations		$	38,359		$	36,584
Fair value of plan assets	(		29,693)	(		29,193)
Net defined benefit liability		$	8,666		$	7,391

~39~

(c) Movements in net defined benefit liabilities are as follows:

		Present value of				Net defined
		defined benefit		Fair value of		benefit
		obligations		plan assets		liability
2023
Balance at January 1	$	36,584	($	29,193)	$	7,391
Current service cost		493		-		493
Interest expense (income)		512	(	419)		93
		37,589	(	29,612)		7,977
Remeasurements:
Return on plan assets		-	(	195)	(	195)
(excluding amounts included
in interest income or expense)
Change in financial assumptions		397		-		397
Experience adjustments		1,957		-		1,957
		2,354	(	195)		2,159
Pension fund contribution		-	(	1,470)	(	1,470)
Paid pension	(	1,584)		1,584		-
Balance at December 31	$	38,359	($	29,693)	$	8,666
		Present value of				Net defined
		defined benefit		Fair value of		benefit
		obligations		plan assets		liability
2022
Balance at January 1	$	38,857	($	25,454)	$	13,403
Current service cost		550		-		550
Interest expense (income)		291	(	196)		95
		39,698	(	25,650)		14,048
Remeasurements:
Return on plan assets		-	(	2,071)	(	2,071)
(excluding amounts included
in interest income or expense)
Change in financial assumptions	(	2,630)		-	(	2,630)
Experience adjustments	(	484)		-	(	484)
	(	3,114)	(	2,071)	(	5,185)
Pension fund contribution		-	(	1,472)	(	1,472)
Balance at December 31	$	36,584	($	29,193)	$	7,391

~40~

• (d) The Bank of Taiwan was commissioned to manage the Fund of the Company’s defined benefit pension plan in accordance with the Fund’s annual investment and utilisation plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilisation of the Labor Retirement Fund” (Article 6: The scope of utilisation for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-thecounter, or private placement equity securities, investment in domestic or foreign real estate securitisation products, etc.). With regard to the utilisation of the Fund, its minimum earnings in the annual distributions on the final financial statements shall be no less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. If the earnings is less than aforementioned rates, government shall make payment for the deficit after being authorised by the Regulator. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with IAS 19 paragraph 142. The composition of fair value of plan assets as of December 31, 2023 and 2022 is given in the Annual Labor Retirement Fund Utilisation Report announced by the government.

• (e) The principal actuarial assumptions used were as follows:

Discount rate Future salary increases rate	For the years ended December 31,	For the years ended December 31,
	2023 1.300% 1.625%	2022
		1.400%
		1.625%

Future mortality rate was estimated based on the 6th Taiwan Standard Ordinary Experience Mortality Table.

Because the main actuarial assumption changed, the present value of defined benefit obligation is affected. The analysis was as follows:

Increase Decrease 0.25% 0.25% December 31, 2023 Effect on present value of defined benefit obligation 1,005) ($ 1,045 $ December 31, 2022 Effect on present value of defined benefit obligation 1,023) ($ 1,065 $ Discountrate	Increase Decrease 0.25% 0.25% 1,015 $ 982) ($ 1,038 $ 1,002) ($ Future salaryincreases

The sensitivity analysis above is based on one assumption which changed while the other conditions remain unchanged. In practice, more than one assumption may change all at once. The method of analysing sensitivity and the method of calculating net pension liability in the balance sheet are the same.

~41~

The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the previous period.

• (f) Expected contributions to the defined benefit pension plan of the Company for the year ending December 31, 2024 amount to $1,467.

• (g) As of December 31, 2023, the weighted average duration of the retirement plan is 10.76 years.

• B. Defined contribution plans

• (a) Effective July 1, 2005, the Company has established a defined contribution pension plan (the “New Plan”) under the Labor Pension Act (the “Act”), covering all regular employees with R.O.C. nationality. Under the New Plan, the Company contributes monthly an amount based on 6% of the employees’ monthly salaries and wages to the employees’ individual pension accounts at the Bureau of Labor Insurance. The benefits accrued are paid monthly or in lump sum upon termination of employment.

• (b) Transtech Shanghai and Transcend Hong Kong have defined contribution plans. Monthly contributions to an independent fund administered by the government in accordance with the pension regulations in the People’s Republic of China (PRC) are based on a certain percentage of employees' monthly salaries and wages, ranging from 12.5% to 20%. Other than the monthly contributions, the Group has no further obligations.

• (c) Transcend Japan, Transcend Korea, Transcend USA, Transcend Europe and Transcend Germany have defined contribution plans. Monthly contributions are based on a certain percentage of employees’ monthly salaries and wages and are recognized as pension costs accordingly. Other than the monthly contributions, the Group has no further obligations.

• (d) The pension costs under the defined contribution pension plans of the Group for the years ended December 31, 2023 and 2022 were $40,590 and $40,500, respectively.

(14) Share capital

As of December 31, 2023, the Company’s authorized capital was $5,000,000, consisting of 500 million shares of ordinary stock (including 25 million shares reserved for employee stock options), and the paid-in capital was $4,290,617 with par value of $10 per share. All proceeds from shares issued have been collected. The Company’s ordinary shares outstanding at the beginning and at the end of the period were 429,062 thousand shares for the years ended December 31, 2023 and 2022.

~42~

(15) Capital surplus

Pursuant to the R.O.C. Company Act, capital surplus arising from paid-in capital in excess of par value on issuance of common stocks and donations can be used to cover accumulated deficit or to issue new stocks or cash to shareholders in proportion to their share ownership, provided that the Company has no accumulated deficit. Further, the R.O.C. Securities and Exchange Act requires that the amount of capital surplus to be capitalized mentioned above should not exceed 10% of the paidin capital each year. Capital surplus shall not be used to cover accumulated deficit unless the legal reserve is insufficient.

(16) Retained earnings

• A. In accordance with the Company’s Articles of Incorporation, the current year’s earnings, if any, shall first be used to pay all taxes and to offset prior years’ operating losses and then 10% of the remaining amount shall be set aside as legal reserve. The Company shall also set aside special reserve in accordance with the regulations. On the premise that there is no effect on the Company’s normal operations and no violation of regulations, the Company shall reserve certain amount for maintaining stability of dividends. The remainder, if any, is the distributable earnings to be appropriated as resolved by stockholders at the stockholders’ meeting. The Board of Directors is authorized by the shareholders to resolve the appropriation of cash dividends and cash payment from capital surplus by a resolution adopted by a majority vote at its meeting attended by two-thirds of the total number of directors, which will then be reported to the shareholders.

• B. The Company distributes dividends taking into consideration the Company’s economic environment, growth phases, future demands for funds, long-term financial planning and the cash flow needs of shareholders. Cash dividends shall account for at least 5% of the total dividends distributed.

• C. Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company’s paid-in capital.

• D. In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

~43~

• E. (a) The appropriations of earnings and cash payment from capital surplus for the years ended December 31, 2022 and 2021 have been resolved by the shareholders during their meeting on June 16, 2023 and June 17, 2022, respectively. Details are summarized below:

Legal reserve Special reserve Cash dividends Cash payment from capital surplus	Amount Dividends per share(in dollars) 245,726 $ 167,303 2,059,496 4.80 $ 2,472,525 $ Cash payment per share Amount (indollars) 343,249 $ 0.80 $ For the year ended December31,2022	Amount Dividends per share(in dollars) 254,464 $ 73,270 2,231,121 5.20 $ 2,558,855 $ Cash payment per share Amount (in dollars) 343,249 $ 0.80 $ For the year ended December31,2021

Actual distribution of retained earnings for 2022 and 2021 were in agreement with the amounts resolved by the Board of Directors and shareholders.

• (b) The appropriations of earnings and cash payment from capital surplus for the year ended December 31, 2023 as proposed by the Board of Directors on February 29, 2024 are as follows:

			Forthe yearended	December31,2023	December31,2023
				Dividends per share
			Amount		(in dollars)
Legal reserve		$	199,337
Reversal of special reserve	(		127,454)
Cash dividends			1,930,778	$	4.50
		$	2,002,661
					Cash payment
			Amount	per	share (indollars)
Cash payment from capital surplus		$	214,531	$	0.50

As of February 29, 2024, the above appropriations of 2023 earnings have not yet been resolved by the shareholders.

~44~

(17) Other equity items

(18)

Operating revenue Unrealised gains (losses) on Exchange valuation of investments in differences equity instruments measured on translation of at fair value through other foreign financial comprehensiveincome statements Total At January 1 160,599) ($ 197,218) ($ 357,817) ($ Revaluation adjustment 173,465 - 173,465 Revaluation transferred to retained earnings 9,178) ( - 9,178) ( Currency translation differences - 46,041) ( 46,041) ( Effect from income tax - 9,208 9,208 At December 31 3,688 $ 234,051) ($ 230,363) ($ Unrealised gains (losses) on Exchange valuation of investments in differences equity instruments measured on translation of at fair value through other foreign financial comprehensive income statements Total At January 1 7,417 $ 197,932) ($ 190,515) ($ Revaluation adjustment 170,069) ( - 170,069) ( Revaluation transferred to retained earnings 2,053 - 2,053 Currency translation differences - 892 892 Effect from income tax - 178) ( 178) ( At December 31 160,599) ($ 197,218) ($ 357,817) ($ 2023 2022 2023 2022 Sales revenue 10,496,172 $ 12,122,350 $ Forthe years endedDecember31,

~45~

A. Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods at a point in time in the following geographical regions:

For the year ended December31,2023 Revenue from external customer contracts For the year ended December31,2022 Revenue from external customer contracts	Taiwan 2,282,102 $ Taiwan 2,803,950 $	Asia America Europe 3,631,219 $ 1,408,222 $ 2,544,180 $ Asia America Europe 3,805,341 $ 2,038,051 $ 2,741,912 $ Electronicproducts Electronicproducts	Others 630,449 $ Others 733,096 $	Total
				10,496,172 $
				Total
				12,122,350 $

B. Contract assets and liabilities

The Group has no revenue-related contract assets and liabilities.

(19) Interest income

Interest income from bank deposits Interest income from financial assets measured at amortised cost Other interest income	Forthe years endedDecember31,	Forthe years endedDecember31,
	2023 37,351 $ 352,396 5,014 394,761 $	2022
		23,550 $ 87,929 3,447
		114,926 $

(20) Other income

Rental income Dividend income	For the years ended December 31,	For the years ended December 31,
	2023 57,569 $ 21,134 78,703 $	2022
		46,891 $ 35,592
		82,483 $

~46~

(21) Other gains and losses

Other gains and losses
			Forthe years ended			December31,
			2023			2022
Net currency exchange gain		$	89,591		$	320,239
Net gain (loss) on financial assets at fair value
through profit or loss			38,186	(		8,271)
Gain on disposal of non-current assets held for
sale			-			1,324,180
Loss on disposals of property, plant and
equipment	(		2)	(		448)
Others			5,397			8,136
		$	133,172		$	1,643,836

(22) Expenses by nature

Wages and salaries Labor and health insurance fees Pension costs Other personnel expenses Depreciation charges (including investment property and right-of-use assets)	Forthe years endedDecember31,	Forthe years endedDecember31,
	2023 1,094,968 $ 120,723 41,176 53,207 158,441	2022
		1,127,443 $ 120,044 41,145 54,914 194,624

• A. In accordance with the Articles of Incorporation of the Company, a ratio of distributable profit of the current year, after covering accumulated losses, shall be distributed as employees’ compensation and directors’ remuneration. The ratio shall not be lower than 1% for employees’ compensation and shall not be higher than 0.2% for directors’ remuneration.

• B. For the years ended December 31, 2023 and 2022, employees’ compensation was accrued at $25,696 and $31,729, respectively, and recognized in salary expenses; while no directors’ remuneration was accrued.

• C. The employees’ compensation and directors’ remuneration were estimated and accrued based on 1% and 0% of distributable profit for the year ended December 31, 2023. The employees’ compensation and directors’ remuneration as resolved by the Board of Directors were $24,962 and $2,300, respectively, and the employees’ compensation will be distributed in the form of cash.

• D. The differences between employees’ compensation and directors’ remuneration as resolved by the Board of Directors and the amounts recognized in the 2022 financial statements by $742 and ($2,300), respectively, have been adjusted in profit or loss for 2023. The employees' compensation and directors' remuneration had been fully paid.

~47~

• E. Information about employees’ compensation and directors’ remuneration of the Company as resolved at the meeting of Board of Directors will be posted in the “Market Observation Post System” at the website of the Taiwan Stock Exchange.

(23) Income tax

• A. Income tax expense

• (a) Components of income tax expense:

			Forthe years ended	Forthe years ended	Forthe years ended	December31,
			2023			2022
Current income tax:
Current income tax on profits for the year		$	626,894		$	758,410
Prior year income tax overestimation	(		4,011)	(		13,543)
Total current income tax			622,883			744,867
Deferred income tax:
Origination and reversal of temporary
differences	(		136,884)			157,066
Total deferred income tax	(		136,884)			157,066
Income tax expense		$	485,999		$	901,933

• (b) The income tax relating to components of other comprehensive income is as follows:

		For the years ended	For the years ended	December 31,
		2023		2022
Financial statements translation
differences of foreign operations	($	9,208)	$	178

• B. Reconciliation between income tax expense and accounting profit

			Forthe years ended	Forthe years ended	December31,
			2023		2022
Income tax calculated by applying statutory		$	510,936	$	981,142
rate to the profit before tax
Effects from tax exemption and items
disallowed by tax regulation	(		14,021)	(	6,458)
Temporary differences not recognized as
deferred tax assets	(		6,262)		-
Changes in assessment of realizability of
deferred income tax assets			-	(	64,893)
Prior year income tax overestimation	(		4,011)	(	13,543)
Effect from investment tax credits	(		1,830)	(	1,990)
Withholding tax in other countries			1,187		7,675
Income tax expense		$	485,999	$	901,933

~48~

• C. Amounts of deferred income tax assets or liabilities as a result of temporary differences are as follows:

==> picture [459 x 365] intentionally omitted <==

----- Start of picture text -----

2023
Recognized in
other
Recognized in comprehensive
At January 1 profit or loss income At December 31
Deferred income tax assets
Amount of allowance for bad debts $ 282 ($ 282) $ - $ -
that exceed the limit for tax purpose
Pension provision amount in excess
-
of appropriation amount 4,809 ( 177) 4,632
-
Unused compensated absences 1,746 ( 322) 1,424
Unrealized sales discounts and
allowances 16,043 2,975 - 19,018
Unrealized gross profit from sales 987 2,245 - 3,232
Unrealized loss on market value
decline and obsolete and
-
slow-moving inventories 97,475 ( 72,892) 24,583
Financial statements translation
-
differences of foreign operations 10,887 9,208 20,095
Others 5,545 2,267 - 7,812
Total $ 137,774 ($ 66,186) $ 9,208 $ 80,796
Deferred income tax liabilities
Unrealized exchange gain ($ 23,027) $ 19,101 $ - ($ 3,926)
Net gain on investment accounted for
-
using equity method ( 353,332) 183,967 ( 169,365)
Others ( 88) 2 - ( 86)
Total ($ 376,447) $ 203,070 $ - ($ 173,377)
----- End of picture text -----

~49~

						2022	2022	2022
								Recognized in
									other
					Recognized in			comprehensive
			AtJanuary1			profit or loss			income	At		December31
Deferred income tax assets
Amount of allowance for bad debts		$	350	($		68)		$	-		$	282
that exceed the limit for tax purpose
Pension provision amount in excess
of appropriation amount			4,974	(		165)			-			4,809
Royalty fees			2,171	(		2,171)			-			-
Unused compensated absences			1,165			581			-			1,746
Unrealized sales discounts and
allowances			9,536			6,507			-			16,043
Unrealized gross profit from sales			2,152	(		1,165)			-			987
Unrealized loss on market value
decline and obsolete and
slow-moving inventories			10,562			86,913			-			97,475
Financial statements translation
differences of foreign operations			11,065			-	(		178)			10,887
Others			5,380			165			-			5,545
Total		$	47,355		$	90,597	($		178)		$	137,774
Deferred income tax liabilities
Unrealized exchange gain	($		929)	($		22,098)		$	-	($		23,027)
Net gain on investment accounted for
using equity method	(		127,762)	(		225,570)			-	(		353,332)
Others	(		93)			5			-	(		88)
Total	($		128,784)	($		247,663)		$	-	($		376,447)

B. The Company’s income tax returns through 2021 have been assessed and approved by the Tax Authority.

~50~

(24) Earnings per share

For the year ended December 31, 2023

	Forthe yearendedDecember31,2023	Forthe yearendedDecember31,2023	1,2023
Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares Basic earnings per share Profit attributable to ordinary shareholders of the parent Diluted earnings per share Profit attributable to ordinary shareholders of the parent Assumed conversion of all dilutive potential ordinary shares Employees’ compensation Profit attributable to ordinary shareholders of the parent plus assumed conversion of all dilutive potential ordinary shares	Weighted-average common shares Earnings outstanding per share Profit aftertax (inthousands) (indollars) 1,984,835 $ 429,062 4.63 $ 1,984,835 $ 429,062 - 391 1,984,835 $ 429,453 4.62 $ Forthe yearendedDecember31,2022		Earnings per share (indollars)
			4.63 $
			4.62 $
	Profit aftertax 2,454,344 $ 2,454,344 $ - 2,454,344 $	Weighted-average common shares outstanding (inthousands) 429,062 429,062 554 429,616	Earnings per share (indollars)
			5.72 $
			5.71 $

~51~

(25) Supplemental cash flow information

Investing activities with partial cash payments

Purchase of property, plant and equipment Less: Transfers from prepayment for business facilities Cash paid during the year

		For theyears ended	For theyears ended	For theyears ended	December31,
		2023			2022
	$	27,085		$	50,741
(		2,912)	(		12,416)
	$	24,173		$	38,325

7. RELATED PARTY TRANSACTIONS

(1) Names of related parties and relationship

Names of related parties

Relationship with the Group

Taiwan IC Packaging Corporation (Taiwan IC Packaging) Won Chin Investment Inc. (Won Chin) Other related party Cheng Chuan Technology Development Inc. Other related party (Cheng Chuan) Transcend H.K. Ltd. Other related party

Associate accounted for using equity method

(2) Significant transactions and balances with related parties

A. Operating revenue

Operating revenue
Sales of goods －Taiwan IC Packaging	Forthe years endedDecember31,
	2023 1,100 $	2022
		1,309 $

The sales prices charged to related parties are approximate to those charged to third parties. The credit term to Taiwan IC Packaging is 30 days after delivery. The credit term to third parties is 30 to 60 days after monthly billings.

B. Purchases

Purchases of goods －Taiwan IC Packaging	Forthe years endedDecember31,	Forthe years endedDecember31,
	2023 195,954 $	2022
		221,258 $

~52~

The purchase prices charged by related parties are approximate to those charged by third parties. The payment term from Taiwan IC Packaging is 30 days after monthly billings. The payment term from third parties is 30 to 45 days after monthly billings.

• C. Payables to related parties

December31,2023 Accounts payable: －Taiwan IC Packaging 39,913 $	December31,2022
	27,442 $

The payables to related parties arise mainly from purchase transactions, and information on the payment term is provided in Note 7(2) B. The payables bear no interest.

• D. Other payables

Other payables: －Taiwan IC Packaging	December31,2023 December 31, 2022 - $ 4 $

Other payables to related parties arise mainly from miscellaneous purchases. The payables bear no interest.

• E. Leasing arrangements – lessee

• (a) The Company renewed a land lease contract with its related party, Won Chin and Cheng Chuan, with a lease term of 5 years from June 12, 2022 to June 11, 2027. The annual rental payment is $38,484 (excluding tax), which was determined based on the appraisal results of Yungcheng Real Estate Appraisers Firm and CCIS Real Estate Joint Appraisers Firm and renewed at $1,350 (including tax) in dollar per square feet/month (tax included) after having a three-party negotiation. Rent is paid on the contract date and becomes payable on the same date each following year until the end of the lease. As of December 31, 2023 and 2022, the balance of related right-of-use assets amounted to $128,309 and $165,858 while lease liabilities amounted to $113,163 and $149,825, respectively.

• (b) The Group entered into an office lease contract with its related party, Transcend H.K. Ltd., with a lease term of 1 year from June 1, 2022 to May 31, 2023 and renewed the contract for 1 year on June 1, 2023. The monthly rental payment is HKD $50 in thousand, which was determined by reference to the surrounding market quoted price. The Group recognized rental expenses of $2,387 and $2,284 for the years ended December 31, 2023 and 2022, respectively.

~53~

(3) Key management compensation

	For theyears ended December31,	For theyears ended December31,
	2023	2022
Salaries and other employee benefits	20,709 $	68,967 $

8. PLEDGED ASSETS

The Group’s assets pledged as collateral are as follows:

Pledged assets Property, plant and equipment		December 31, December 31, 2023 2022 Pledge purpose 112,175 $ 121,700 $ Collateral for general credit limit granted by financial institutions Book value

9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED CONTRACT COMMITMENTS

As of December 31, 2023, except for the provision of endorsements and guarantees mentioned in Note 13(1) B, there are no other significant commitments.

10. SIGNIFICANT DISASTER LOSS

None.

11. SIGNIFICANT EVENTS AFTER THE BALANCE SHEET DATE

Information on distribution of 2023 earnings and cash dividends from capital surplus is provided in Note 6(16) E(b).

12. OTHERS

(1) Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group’s own funds are currently sufficient, daily operations can create stable cash inflows, and there are no significant capital expenditure plans in the short term. Except for obtaining loans to reduce the exchange rate exposure, the Group has sufficient funds to cover its own needs. Debt financing is not necessary.

~54~

(2) Financial instruments

A. Financial instruments by category

Financial assets Financial assets mandatorily measured at fair value through profit or loss Financial assets at fair value through other comprehensive income Financial assets at amortised cost Cash and cash equivalents Financial assets at amortised cost Notes receivable Accounts receivable Other receivables Guarantee deposits paid Financial liabilities Financial liabilities at amortised cost Accounts payable (including related parties) Other payables (including related parties) Guarantee deposits received Lease liabilities	December31,2023 461,734 $ 626,628 1,858,719 8,432,441 323 1,247,331 113,104 32,995 12,773,275 $ 1,831,683 $ 301,355 34,048 2,167,086 $ 154,584 $	December31,2022
		51,463 $ 524,939 3,187,312 8,611,357 867 1,217,936 77,626 34,888
		13,706,388 $
		500,119 $ 271,948 34,339
		806,406 $
		180,768 $

B. Financial risk management policies

Risk management is carried out by a central treasury department (Group treasury) under policies approved by the Board of Directors. Group treasury identifies, evaluates and hedges financial risks in close cooperation with the Group’s operating units. The Board provides written principles for overall risk management, as well as written policies covering specific areas and matters, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

~55~

• C. Significant financial risks and degrees of financial risks

• (a) Market risk

Foreign exchange risk

• i. The Group operates internationally and is exposed to exchange rate risk arising from the transactions of the Company and its subsidiaries used in various functional currency, primarily with respect to the USD. Exchange rate risk arises from future commercial transactions and recognized assets and liabilities.

• ii. The Group’s businesses involve some non-functional currency operations (the Company’s functional currency: NTD; the subsidiaries’ functional currencies: JPY, KRW, USD, EUR and RMB, etc.). The information on assets and liabilities denominated in foreign currencies whose values would be materially affected by the exchange rate fluctuations is as follows:

Financial assets Financial liabilities Financial assets Financial liabilities		December31,2023	December31,2023
	Foreign currency USD：NTD RMB：NTD EUR：NTD JPY：NTD KRW：NTD USD：EUR GBP：EUR USD：NTD RMB：NTD	Foreign currency amount (In thousands) Exchangerate Bookvalue 192,283 $ 30.71 5,905,011 $ 82,598 4.327 357,402 4,182 33.98 142,104 791,457 0.2172 171,904 1,669,630 0.0239 39,904 5,849 0.9038 179,623 4,295 1.1521 168,149 51,792 $ 30.71 1,590,532 $ 62,252 4.327 269,364 December31,2022
	Foreign currency USD：NTD RMB：NTD EUR：NTD JPY：NTD KRW：NTD USD：EUR GBP：EUR USD：NTD RMB：NTD	Foreign currency amount (In thousands) 254,448 $ 23,994 5,372 474,455 1,728,885 5,905 1,950 13,052 $ 97,981	Exchangerate Bookvalue 30.71 7,814,098 $ 4.408 105,766 32.72 175,772 0.2324 110,263 0.0246 42,531 0.9385 181,343 1.13 72,326 30.71 400,827 $ 4.408 431,900

~56~

• iii. The information on total exchange (loss) gain, including realized and unrealized, arising from significant foreign exchange variation on the monetary items held by the Group for the years ended December 31, 2023 and 2022 is provided in Note 6(21).

• iv. Sensitivity analysis relating to foreign exchange rate risks is primarily for financial reporting period-end date of foreign currency monetary item. If the New Taiwan dollar exchange rate to the U.S. dollar increases or decreases by 1%, the Group’s net income will decrease or increase by $43,145 and $74,133 for the years ended December 31, 2023 and 2022, respectively.

Price risk

• i. The Group is exposed to equity securities price risk because of investments held by the Group and classified on the balance sheet as financial assets at fair value through profit or loss and other comprehensive income. The Group is not exposed to commodity price risk. To manage its price risk arising from investments in equity securities, the Group diversifies its portfolio.

• ii. The Group’s investments in listed and unlisted equity securities by the domestic companies. The prices of equity securities would change due to the change of the future value of investee companies. If the prices of these equity securities had increased/decreased by 1% with all other variables held constant, other components of equity for the years ended December 31, 2023 and 2022 would have increased/decreased by $6,266 and $5,249, respectively, as a result of other comprehensive income classified as equity investment at fair value through other comprehensive income.

Cash flow and fair value interest rate risk

• i. The Group’s principal interest-bearing assets are cash and cash equivalents and financial assets at amortised cost. Cash and cash equivalents are due within twelve months. Financial assets at amortised cost are maintained at fixed rates. Therefore, it is assessed that there is no significant cash flow interest rate risk.

• ii. The Group has not used any financial instruments to hedge its interest rate risk.

• (b) Credit risk

• i. Credit risk refers to the risk of financial loss to the Group arising from default by the clients or counterparties of financial instruments on the contract obligations. The main factor is that counterparties could not repay in full the receivables based on the agreed terms.

• ii. The Group manages its credit risk taking into consideration the entire group’s concern. According to the Group’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. To control internal risk, the

~57~

Group assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board of Directors. The utilisation of credit limits is regularly monitored.

• iii. The Group determines that the default occurs when the contract payments are past due over 180 days.

• iv. If the contract payments were past due over 30 days based on the terms, there has been a significant increase in credit risk on that instrument since initial recognition.

• v. For details of credit risk in relation to accounts receivable and notes receivable, refer to Note 6(4).

(c) Liquidity risk

• i. Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group treasury. Group treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs.

• ii. Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group treasury invests surplus cash in interest bearing current accounts, time deposits and monetary funds, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the abovementioned forecasts. As at December 31, 2023 and 2022, the Group held money market position of $10,451,292 and $11,850,132, respectively, that are expected to readily generate cash inflows for managing liquidity risk.

• iii. The Group’s non-derivative financial liabilities are analysed based on the remaining period at the balance sheet date to the contractual maturity date and all the Group’s financial liabilities expire within one year.

(3) Fair value information

• A. 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 (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in listed stocks and beneficiary certificates is included in Level 1.

~58~

• Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. The fair value of the Group’s investment in non-hedging derivatives is included in Level 2.

• Level 3: Unobservable inputs for the asset or liability. The fair value of the Group’s investment in equity investment without active market, financial products and investment property is included in Level 3.

• B. Fair value information of investment property at cost is provided in Note 6(11).

• C. Financial instruments not measured at fair value

The carrying amounts of cash and cash equivalents, financial assets at amortised cost, notes receivable, accounts receivable, other receivables, guarantee deposits paid, accounts payable (including related parties), other payables (including related parties), guarantee deposits received, and lease liabilities are approximate to their fair values.

• D. The related information on financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities are as follows:

December 31, 2023 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities December 31, 2022 Assets Recurring fair value measurements Financial assets at fair value through profit or loss Beneficiary certificates Financial assets at fair value through other comprehensive income Equity securities	Level 1 461,734 $ 625,503 1,087,237 $ Level 1 51,463 $ 523,814 575,277 $	Level 2 - $ - - $ Level 2 - $ - - $	Level3 - $ 1,125 1,125 $ Level3 - $ 1,125 1,125 $	Total
				461,734 $ 626,628
				1,088,362 $
				Total
				51,463 $ 524,939
				576,402 $

~59~

• E. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for financial assets held by the Group is the closing price. These instruments are included in Level 1. Instruments included in Level 1 comprise primarily listed stocks classified as financial assets at fair value through other comprehensive income and beneficiary certificates classified as financial assets at fair value through profit or loss.

• F. For the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and Level 2.

• G. If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.

• H. The financial products purchased for the year ended December 31, 2022 were categorised as Level 3.

• I. Financial segment is in charge of valuation procedures for fair value measurements being categorised within Level 3, which is to verify independent fair value of financial instruments. Such assessment is to ensure the valuation results are reasonable by applying independent information to make results close to current market conditions and frequently review the fair value.

• J. The qualitative information of significant unobservable inputs to valuation model used in Level 3 fair value measurement is as follows: financial products are income investments, and the judgements of their valuation technique and significant unobservable inputs are based on the cash flow of individual contract.

13. SUPPLEMENTARY DISCLOSURES

(1) Significant transactions information

• A. Loans to others: None.

• B. Provision of endorsements and guarantees to others: Refer to table 1.

• C. Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures): Refer to table 2.

• D. Acquisition or sale of the same security with the accumulated cost exceeding NT$300 million or 20% of the Company’s paid-in capital: None.

• E. Acquisition of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

• F. Disposal of real estate reaching NT$300 million or 20% of paid-in capital or more: None.

~60~

• G. Purchases or sales of goods from or to relate parties reaching NT$100 million or 20% of the Company’s paid-in capital or more: Refer to table 3.

• H. Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more: Refer to table 4.

• I. Trading in derivative instruments undertaken during the reporting periods: None.

• J. Significant inter-company transactions during the reporting periods: Refer to table 5.

(2) Information on investees

Names, locations and other information of investee companies (not including investees in Mainland China) : Refer to table 6.

(3) Information on investments in Mainland China

• A. Basic information: Refer to table 7.

• B. Significant transactions, either directly or indirectly through a third area, with investee companies in the Mainland Area: Refer to table 5.

(4) Major shareholders information

Major shareholders information: Refer to table 8.

14. SEGMENT INFORMATION

(1) General information

The Group operates business only in a single industry. The Chairman of the Board of Directors who allocates resources and assesses performance of the Group as a whole, has identified that the Group has only one reportable operating segment.

(2) Segment information

The segment information provided to the Chief Operating Decision-Maker for the reportable segments is as follows:

Segment revenue Segment income	Forthe years endedDecember31,	Forthe years endedDecember31,
	2023 10,496,172 $ 1,984,835 $	2022
		12,122,350 $
		2,454,344 $

(3) Reconciliation for segment income (loss)

Sales between segments are carried out at arm’s length. The revenue from external customers reported to the Chief Operating Decision-Maker is measured in a manner consistent with that in the statement of comprehensive income.

~61~

(4) Information on products and services

All external customer revenue comes from sale of electronic products. Refer to Note 6(18)A for details.

(5) Geographical information

For details of geographical information of the Group’s revenue, refer to Note 6(18)A. The information on the Group’s non-current assets is as follows:

Taiwan Asia America Europe Total	December 31, 2023 December 31, 2022 Non-current assets Non-current assets 4,030,403 $ 4,127,633 $ 195,171 190,780 49,261 59,828 43,281 44,443 4,318,116 $ 4,422,684 $

(6) Major customer information

There was no revenue from a single customer which accounted for more than 10% of the Group’s total revenue for the years ended December 31, 2023 and 2022.

~62~

Transcend Information, Inc.

Table 1

Provision of endorsements and guarantees to others

For the year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Number (Note 1) Endorser/ guarantor	Party being endorsed/guaranteed	Limit on endorsements/ guarantees provided for a single party (Note 3)	Maximum outstanding endorsement/ guarantee amount as of December 31, 2023 (Note 4)	Outstanding endorsement/ guarantee amount at December 31, 2023(Note 5)	Actual amount drawn down (Note 6)	Amount of endorsements/ guarantees secured with collateral	Ratio of accumulated endorsement/ guarantee amount to net asset value of the endorser/ guarantor company	Ceiling on total amount of endorsements/ guarantees provided (Note 7)	Provision of endorsements/ guarantees by parent company to subsidiary (Note 8)	Provision of endorsements/ guarantees by subsidiary to parent company	Provision of endorsements/ guarantees to the party in Mainland China	Footnote
	Companyname Relationship with the endorser/ guarantor (Note 2)
0 Transcend Information, Inc.	2 Transcend Japan Inc.	3,853,742 $	$ 461,800 (JPY2,000,000) (In thousands)	$ 434,400 (JPY2,000,000) (In thousands)	- $	-	2	7,707,484 $	Y	-	-	-

• Note 1: The numbers filled in for the endorsements/guarantees provided by the Company or subsidiaries are as follows:

• (a) The Company is ‘0’.

(b) The subsidiaries are numbered in order starting from ‘1’.

Note 2: Relationship between the endorser/guarantor and the party being endorsed/guaranteed is classified into the following seven categories; fill in the number of category each case belongs to:

• (a) Having business relationship

(b) The endorser/guarantor parent company owns directly and indirectly more than 50% voting shares of the endorsed/guaranteed subsidiary.

(c) The endorsed/guaranteed company owns directly and indirectly more than 50% voting shares of the endorser/guarantor parent company.

(d) The endorser/guarantor parent company owns directly and indirectly more than 90% voting shares of the endorsed/guaranteed company.

(e) Mutual guarantee of the trade made by the endorsed/guaranteed company or joint contractor as required under the construction contract.

(f) Due to joint venture, all shareholders provide endorsements/guarantees to the endorsed/guaranteed company in proportion to its ownership.

(g) Joint guarantee of the performance guarantee for pre-sold home sales contract as required under the Consumer Protection Act.

Note 3: Not exceeding 20% of the Company’s net asset value. ($19,268,710*20%=$3,853,742)

Note 4: The maximum outstanding endorsement/guarantee amount during and as of December 31, 2023 is JPY$2,000,000 (In thousands).

Note 5: The amount was approved by the Board of Directors.

Note 6: The actual amount of endorsement drawn down is $0.

Note 7: Not exceeding 40% of the Company’s net asset value. ($19,268,710*40%=$7,707,484)

• Note 8: Fill in ‘Y’ for those cases of provision of endorsements/guarantees by listed parent company to subsidiary.

Table 1, Page 1

Transcend Information, Inc.

Holding of marketable securities at the end of the period (not including subsidiaries, associates and joint ventures)

December 31, 2023

Table 2

Expressed in thousands of NTD (Except as otherwise indicated)

Securities held by Marketable securities (Note 1) Relationship with the securities issuer(Note 2) General ledger account		As of December 31,2023	As of December 31,2023	Footnote (Note 4)
	Number of shares	Book value (Note 3)	Ownership (%) Fair value
Transcend Information, Inc. Stocks TrendForce Corporation - Financial assets at fair value through other comprehensive income - non-current Fubon Financial Holding Co., Ltd. Preferred Shares B - " Taiwan Semiconductor Manufacturing Co., Ltd. - " MediaTek Inc. - " Fubon Financial Holding Co., Ltd. - " Cathay Financial Holding Co. Ltd. - " Yuanta Financial Holding Co., Ltd. - " CTBC Financial Holding Co., Ltd - " Formosa Plastics Corporation - " ASUSTek Computer Inc. - " Beneficiary certificates Yuanta/P-shares Taiwan Top 50 ETF - Financial assets at fair value through profit or loss - non-current Yuanta/P-shares Taiwan Dividend Plus ETF " Fubon FTSE TWSE Taiwan 50 ETF " Cathay MSCI Taiwan ESG Sustainability High Dividend Yield ETF " Corporate bonds TSMC Arizona Corporation U.S. dollar-denominated corporate bonds - Financial assets at amortised cost - non-current International Business Machines Corporation U.S. dollar- denominated corporate bonds - " Meta Platforms, Inc. U.S. dollar-denominated corporate bonds - " PAYPAL HOLDINGS, INC. U.S. dollar-denominated corporate bonds - " Intel Corporation U.S. dollar-denominated corporate bonds - " Mercedes-Benz Finance North America LLC U.S. dollar- denominated corporate bonds - " Toyota Motor Credit Corporation U.S. dollar-denominated corporate bonds - "	60,816 1,758,000 420,000 40,000 1,176,384 216,323 121,272 100,000 262,000 240,000 2,057,000 1,197,000 1,440,000 1,250,000 1,850,000 2,250,000 1,650,000 1,100,000 2,000,000 250,000 900,000	1,125 $ 105,304 249,060 40,600 76,230 9,897 3,347 2,835 20,750 117,480	1 1,125 $ - 105,304 - 249,060 - 40,600 - 76,230 - 9,897 - 3,347 - 2,835 - 20,750 - 117,480 - 278,620 $ - 44,768 - 111,096 - 27,250 - 56,287 $ - 68,485 - 47,825 - 33,185 - 60,352 - 7,754 - 27,714	- - - - - - - - - - - - - - - - - - - - -
		626,628 $
		278,620 $ 44,768 111,096 27,250
		461,734 $
		56,287 $ 68,485 47,825 33,185 60,352 7,754 27,714
		301,602 $

Note 1: Marketable securities in the table refer to stocks, bonds, beneficiary certificates and other related derivative securities within the scope of IFRS 9 ‘Financial instruments’.

Note 2: Leave the column blank if the issuer of marketable securities is non-related party.

Note 3: Fill in the amount after adjusted at fair value and deducted by accumulated impairment for the marketable securities measured at fair value; fill in the acquisition cost or amortised cost deducted by accumulated impairment for the marketable securities not measured at fair value.

Note 4: The number of shares of securities and their amounts pledged as security or pledged for loans and their restrictions on use under some agreements should be stated in the footnote if the securities presented herein have such conditions.

Table 2, Page 1

Transcend Information, Inc.

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

For the year ended December 31, 2023

Table 3

Expressed in thousands of NTD

(Except as otherwise indicated)

Differences in transaction terms compared to third

							Differences in transaction terms compared to third	Differences in transaction terms compared to third
Purchaser/seller	Counterparty	Relationship with the counterparty		Transaction			partytransactions(Note)		Notes/accounts receivable(payable)		Footnote
			Sales (purchases)	Amount	Percentage of total sales (purchases)	Credit term	Unitprice	Credit term	Balance	Percentage of total notes/accounts receivable(payable)
Transcend Information, Inc. " " " " " Transcend Information Europe B.V. Transcend Information, Inc.	Transtech Trading (Shanghai) Co., Ltd. Transcend Japan Inc. Transcend Information Europe B.V. Transcend Information Inc. Transcend Korea Inc. Transcend Information Trading GmbH Transcend Information Trading GmbH Taiwan IC Packaging Corporation	Subsidiary of Memhiro The Company’s subsidiary Subsidiary of Memhiro The Company’s subsidiary The Company’s subsidiary Subsidiary of Memhiro Controlled by the same ultimate parent company Associate accounted for using equiy method	Sales " " " " " " (purchases)	$ 920,055 477,224 488,648 676,850 328,522 307,547 126,511 ( 195,954)	9 5 5 7 3 3 21 (2)	120 days after monthly billings " " " " " 30 days after delivery 30 days after monthly billings	No significant difference " " " " " " "	30 to 60 days after monthly billings to third parties " " " " " 7 to 60 days after delivery to clients 30 to 45 days after monthly billings to third parties	$ 355,439 156,821 83,998 30,476 39,904 - 5,548 ( 39,913)	26 11 6 2 3 - 10 (2)	- - - - - - - -

Note: The Company’s sales to subsidiaries were equivalent to subsidiaries’ purchases from the Company; accordingly, the Company did not disclose the information on subsidiaries’ purchases from the Company.

Table 3, Page 1

Transcend Information, Inc.

Receivables from related parties reaching NT$100 million or 20% of paid-in capital or more

December 31, 2023

Table 4 Creditor	Counterparty	Relationship with the counterparty	Balance as at December 31, 2023	Turnover rate	Overdue receivables	Overdue receivables	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)	Amount collected subsequent to the balance sheet date Allowance for doubtful accounts Expressed in thousands of NTD (Except as otherwise indicated)
					Amount	Action taken
Transcend Information, Inc. " Transcend Information (Shanghai), Ltd.	Transcend Japan Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information, Inc.	The Company’s subsidiary Subsidiary of Memhiro Ultimate parent company	156,821 $ 355,439 252,679	3.64 4.01 -	- $ - 252,679	- - -	76,862 $ 294,195 -	- $ - -

Table 4, Page 1

Transcend Information, Inc.

Expressed in thousands of NTD

Significant inter-company transactions during the period

For the year ended December 31, 2023

Table 5

(Except as otherwise indicated)

Transaction

Number (Note 1)	Companyname	Counterparty	Relationship (Note 2)	General ledger account	Amount	Transaction terms	Percentage of consolidated total operating revenues or total assets(Note 3)
0 " " " " " " " 1	Transcend Information, Inc. " " " " " " " Transcend Information Europe B.V.	Transtech Trading (Shanghai) Co., Ltd. Transcend Japan Inc. Transcend Information Europe B.V. Transcend Information Inc. Transcend Information Trading GmbH Transcend Korea Inc. Transtech Trading (Shanghai) Co., Ltd. Transcend Information (Shanghai), Ltd. Transcend Information Trading GmbH	1 " " " " " " " 3	Sales " " " " " Accounts receivable Accounts payable Sales	$ 920,055 477,224 488,648 676,850 307,547 328,522 355,439 252,679) ( 126,511	There is no significant difference in unit price from those to third parties. " " " " " 120 days after monthly billings 120 days after monthly billings There is no significant difference in unit price from those to third parties.	9 5 5 6 3 3 2 1) ( 1

(Individual transactions not exceeding 1% of the consolidated total revenue and total assets are not disclosed.)

Note 1: The numbers filled in for the transaction company in respect of inter-company transactions are as follows:

(a) Parent company is "0".

(b) Subsidiaries were numbered from 1.

Note 2: Relationship between transaction company and counterparty is classified into the following three categories; fill in the number of category each case belongs to (If transactions between parent company and subsidiaries or between subsidiaries refer to the same transaction, it is not required to disclose twice. For example, if the parent company has already disclosed its transaction with a subsidiary, then the subsidiary is not required to disclose the transaction; for transactions between two subsidiaries, if one of the subsidiaries has disclosed the transaction, then the other is not required to disclose the transaction.): (a) Parent company to subsidiary.

(b) Subsidiary to parent company.

(c) Subsidiary to subsidiaries.

Note 3: Regarding percentage of transaction amount to consolidated total operating revenues or total assets, it is computed based on period-end balance of transaction to consolidated total assets for balance sheet accounts and based on accumulated transaction amount for the period to consolidated total operating revenues for income statement accounts.

Table 5, Page 1

Transcend Information, Inc.

Information on investees (excluding information on investments in Mainland China)

For the year ended December 31, 2023

Table 6

Expressed in thousands of NTD (Except as otherwise indicated)

Investor	Investee	Location	Main business activities	Initial investment amount	Initial investment amount	Shares held as at December 31,2023	Shares held as at December 31,2023	Shares held as at December 31,2023	Net profit (loss) of the investee for the year ended December 31,2023	Investment (loss) income recognized by the Company for the year ended December 31, 2023 (Note 1)	Footnote
				Balance as at December 31, 2023	Balance as at December 31, 2022	Number of shares	Ownership (%)	Book value
Transcend Information, Inc. Saffire Investment Ltd. Memhiro Pte Ltd.	Saffire Investment Ltd. Transcend Japan Inc. Transcend Information Inc. Transcend Korea Inc. Taiwan IC Packaging Corporation Memhiro Pte Ltd. Transcend Information Europe B.V. Transcend Information Trading GmbH Transcend Information (H.K.) Ltd.	B.V.I. Japan United States of America Korea Taiwan Singapore Netherlands Germany Hong Kong	Investment holdings Import and wholesale of computer memory modules and peripheral products Import and wholesale of computer memory modules and peripheral products Import and wholesale of computer memory modules and peripheral products Packaging of Semi-conductors Investment holdings Import and wholesale of computer memory modules and peripheral products Import and wholesale of computer memory modules and peripheral products Import and wholesale of computer memory modules and peripheral products	$ 216,829 89,103 38,592 6,132 354,666 173,702 1,693 2,288 7,636	$ 216,829 89,103 38,592 6,132 354,666 173,702 1,693 2,288 7,636	6,600,000 6,400 625,000 40,000 21,928,036 8,277,609 100 - 2,000,000	100 100 100 100 12.51 100 100 100 100	851,409 $ 93,799 178,826 12,894 105,138 812,830 250,857 131,736 11,161	29,135 $ 4,778 30,817 4,704 176,992) ( 26,962 6,827 4,230 1,399	29,135 $ 4,778 30,817 4,704 22,128) ( 26,962 6,827 4,230 1,399	Note 2 Note 2 Note 2 Note 2 Note 5 Note 3 Note 4 Note 4 Note 4

Note 1: The Company does not directly recognize the investment (loss) income, except for the subsidiaries and associates directly held.

Note 2: Subsidiary of the Company. Note 3: Subsidiary of Saffire. Note 4: Subsidiary of Memhiro. Note 5: Associate of the Company.

Table 6, Page 1

Table 7

Transcend Information, Inc.

Information on investments in Mainland China For the year ended December 31, 2023

Expressed in thousands of NTD (Except as otherwise indicated)

Investee in Mainland China	Main business activities	Paid-in capital	Investment method （Note1）	Accumulated amount of remittance from Taiwan to Mainland China as of January 1, 2023	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December31,2023	Amount remitted from Taiwan to Mainland China/Amount remitted back to Taiwan for the year ended December31,2023	Accumulated amount of remittance from Taiwan to Mainland China as of December31,2023	Net profit of investee for the year ended December31,2023	Ownership held by the Company (direct or indirect)	Investment loss recognized by the Company for the year ended December 31, 2023 (Note2)	Book value of investments in Mainland China as of December 31,2023	Accumulated amount of investment income remitted back to Taiwan as of December31,2023	Footnote
					Remitted to Mainland China	Remitted back to Taiwan
Transcend Information (Shanghai), Ltd. Transtech Trading (Shanghai) Co., Ltd. Companyname	Manufacture and sales of computer memory modules, storage products and disks, and lease of self-owned buildings Wholesale, agent, import and export and retail of computer memory modules, storage products and computer components Accumulated amount of remittance from Taiwan to Mainland China as of December 31,2023	$ 150,787 16,310 Investment amount approved by the Investment Commission of the Ministry of Economic Affairs (MOEA)	2 2 Ceiling on investments in Mainland China imposed by the Investment Commission of MOEA	$ 150,787 16,310	- -	$ - -	$ 150,787 16,310	$ 4,291 9,162	100 100	$ 4,291 9,162	$ 322,804 66,556	$ 2,281,608 -	Note 4 -
Transcend Information, Inc.	167,097 $	167,097 $	11,561,226 $

Note 1: Investment methods are classified into the following three categories; fill in the number of category each case belongs to:

(1) Directly invest in a company in Mainland China.

(2) Through investing in an existing company in the third area (Memhiro Pte Ltd.), which then invested in Mainland China.

(3) Others.

Note 2: The gain and loss on investment recognized for the year was based on the financial statements that were audited by R.O.C. parent company’s CPA.

Note 3: The numbers in this table are expressed in New Taiwan Dollars.

Note 4: For the year ended December 31, 2023, Transcend Information (Shanghai), Ltd. remitted back gain on investments of $817,580 (RMB 187,800 thousand) which was based on the exchange rate of RMB 1=4.35.

Table 7, Page 1

Transcend Information, Inc. Major shareholders information

Table 8

December 31, 2023

Name of major shareholders	Shares	Shares
	Number of shares held	Shareholdingratio
Won Chin Investment Inc. Wan An Technology Inc. Cheng Chuan Technology Development Inc. Wan Min Investment Inc. Wan Chuan Investment Inc.	74,783,600 34,149,854 32,971,701 29,726,397 29,505,896	17.42 7.95 7.68 6.92 6.87

Table 8, Page 1