TXC — Audit Report / Information 2023

Nov 13, 2023

TXC Corporation

Parent Company Only Financial Statements for the Years Ended December 31, 2023 and 2022 and Independent Auditors’ Report

INDEPENDENT AUDITORS’ REPORT

The Board of Directors and Shareholders TXC Corporation

Opinion

We have audited the accompanying parent company only financial statements of TXC Corporation (the “Company”), which comprise the parent company only balance sheets as of December 31, 2023 and 2022, and the parent company only statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the parent company only financial statements, including material accounting policy information (collectively referred to as the “parent company only financial statements”).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the parent company only financial position of the Company as of December 31, 2023 and 2022, and its parent company only financial performance and its parent company only cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the parent company only Financial Statements section of our report. We are independent of the Company 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 judgment, were of most significance in our audit of the parent company only financial statements for the year ended December 31, 2023. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter identified in the Company’s financial statements for the year ended December 31, 2023 is stated as follows:

For the year ended December 31, 2023, the Company’s revenue was approximately 17% less compared to its revenue for the year ended December 31, 2022. In comparison with 2022, the revenue derived from specific customers increased; therefore, we considered the occurrence of revenue derived from specific customers as a key audit matter. For the accounting policy for revenue recognition, please refer to Note 4.

The key audit procedures that we performed included the following:

1. We obtained an understanding and tested the appropriateness of the design and the implementation of internal control system that is related to revenue recognition.

2. 2 -

3. We selected samples from the revenue details of specific customers, checked the sales orders and delivery notes, and we confirmed the occurrence of the sales revenue.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’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 Company 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 Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. 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 parent company only financial statements.

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

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

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

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

4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’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 parent company only 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 Company to cease to continue as a going concern.

5. 3 -

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the parent company only financial statements for the year ended December 31, 2023 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 report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Ming-Chung Hsieh and Yu-Shiou Su.

Deloitte & Touche Taipei, Taiwan Republic of China March 11, 2024

Notice to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such parent company only financial statements are those generally applied in the Republic of China.

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

• 4 -

TXC CORPORATION

PARENT COMPANY ONLY BALANCE SHEETS DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

ASSETS CURRENT ASSETS Cash and cash equivalents (Notes 4 and 6) Financial assets at fair value through profit or loss - current (Notes 4, 7 and 26) Financial assets at amortized cost - current (Notes 4 and 9) Notes receivable (Notes 4 and 10) Trade receivables (Notes 4 and 10) Trade receivables from related parties (Notes 4, 10 and 27) Other receivables (Notes 4 and 10) Other receivables from related parties (Notes 4 and 27) Current tax assets (Notes 4 and 23) Inventories (Notes 4 and 11) Other current assets Total current assets NON-CURRENT ASSETS Financial assets at fair value through other comprehensive income - non-current (Notes 4, 8 and 26) Investments accounted for using equity method (Notes 4 and 12) Property, plant and equipment (Notes 4 and 13) Right-of-use assets (Notes 4 and 14) Investment properties (Notes 4 and 15) Intangible assets (Note 4) Deferred tax assets (Notes 4 and 23) Prepayment for equipment Refundable deposits Total non-current assets TOTAL LIABILITIES AND EQUITY CURRENT LIABILITIES Financial liabilities at fair value through profit or loss - current (Notes 4, 7 and 26) Trade payables Trade payables to related parties (Note 27) Other payables (Note 18) Other payables to related parties (Note 27) Current tax liabilities (Notes 4 and 23) Lease liabilities - current (Notes 4 and 14) Current portion of long-term liabilities (Note 16) Other current liabilities Total current liabilities NON-CURRENT LIABILITIES Bonds payable (Notes 4 and 17) Long-term borrowings (Note 16) Deferred tax liabilities (Notes 4 and 23) Lease liabilities - non-current (Notes 4 and 14) Net defined benefit liabilities - non-current (Notes 4 and 19) Guarantee deposits received Total non-current liabilities Total liabilities EQUITY (Note 20) Share capital Ordinary shares Bond conversion entitlement Total share capital Capital surplus Retained earnings Legal reserve Special reserve Unappropriated earnings Total retained earnings Other equity Exchange differences on translating the financial statements of foreign operations Unrealized gain on financial assets at fair value through other comprehensive income Total other equity Total equity TOTAL		2023 Amount % $ 1,972,837 11 - - 75,342 1 - - 2,548,323 14 219,990 1 26,341 - 7,828 - 74,030 1 1,466,069 8 14,911 - 6,405,671 36 171,335 1 8,221,696 46 2,582,189 15 3,867 - 17,225 - 13,593 - 47,746 - 259,225 2 2,566 - 11,319,442 64 $ 17,725,113 100 $ 18,323 - 506,797 3 1,074,959 6 625,593 4 1,869 - - - 2,270 - 1,829,907 10 30,333 - 4,090,051 23 - - 1,652,667 9 77,493 1 1,631 - 20,105 - 9,550 - 1,761,446 10 5,851,497 33 3,097,570 17 9 - 3,097,579 17 1,718,693 10 2,243,247 13 143,071 1 5,198,793 29 7,585,111 43 (582,706) (3) 54,939 - (527,767) (3) 11,873,616 67 $ 17,725,113 100		2022
				Amount % $ 2,375,033 13 20,350 - 52,213 1 535 - 2,976,981 16 214,000 1 18,059 - 370 - - - 1,471,204 8 9,797 - 7,138,542 39 475,292 3 7,750,691 42 2,891,305 16 4,637 - 18,589 - 17,795 - 42,852 - 83,784 - 2,566 - 11,287,511 61 $ 18,426,053 100 $ 13,620 - 430,715 2 931,578 5 867,361 5 1,364 - 235,808 1 3,088 - 656,087 4 20,664 - 3,160,285 17 1,183,273 6 1,483,420 8 79,518 1 1,596 - 35,203 - 9,550 - 2,792,560 15 5,952,845 32 3,097,570 17 - - 3,097,570 17 1,709,979 9 1,946,812 11 - - 5,861,917 32 7,808,729 43 (450,523) (3) 307,453 2 (143,070) (1) 12,473,208 68 $ 18,426,053 100

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

• 5 -

TXC CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

SALES (Note 21) COST OF GOODS SOLD (Notes 11 and 22) GROSS PROFIT UNREALIZED GAIN ON ASSOCIATES/AND JOINT VENTURES REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES/AND JOINT VENTURES REALIZED GROSS PROFIT OPERATING EXPENSES (Notes 4 and 22) Selling and marketing expenses General and administrative expenses Research and development expenses Expected credit gain Total operating expenses PROFIT FROM OPERATIONS NON-OPERATING INCOME AND EXPENSES Interest income (Note 22) Other income (Notes 4 and 22) Other gains and losses (Note 22) Finance costs (Notes 4 and 22) Share of profit of associates and joint ventures (Note 12) Total non-operating income and expenses PROFIT BEFORE INCOME TAX INCOME TAX EXPENSE (Note 23) NET PROFIT FOR THE YEAR		2023 Amount % $ 8,802,818 100 6,791,972 77 2,010,846 23 (9,266) - 9,767 - 2,011,347 23 235,954 3 218,275 3 642,718 7 (6) - 1,096,941 13 914,406 10 38,868 1 26,055 - 11,296 - (37,349) - 984,206 11 1,023,076 12 1,937,482 22 223,780 2 1,713,702 20		2022
				Amount % $ 10,596,932 100 7,414,935 70 3,181,997 30 (9,767) - 8,662 - 3,180,892 30 265,891 2 277,400 3 722,991 7 - - 1,266,282 12 1,914,610 18 12,075 - 36,439 - 344,928 3 (23,287) - 1,000,320 10 1,370,475 13 3,285,085 31 479,581 5 2,805,504 26 (Continued)

• 6 -

TXC CORPORATION

PARENT COMPANY ONLY STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Except Earnings Per Share)

OTHER COMPREHENSIVE (LOSS) INCOME Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans Unrealized loss on investments in equity instruments at fair value through other comprehensive income Share of the other comprehensive income (loss) of associates and joint ventures accounted for using the equity method Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations Share of the other comprehensive (loss) income of associates and joint ventures accounted for using the equity method Other comprehensive loss for the year, net of income tax TOTAL COMPREHENSIVE INCOME FOR THE YEAR EARNINGS PER SHARE (Note 24) From continuing and discontinued operations Basic Diluted		2023 Amount % $ 3,030 - (45,086) - 20,521 - (21,535) - (127,850) (2) (4,333) - (132,183) (2) (153,718) (2) $ 1,559,984 18 $ 5.53 $ 5.53		2022
				Amount % $ 11,609 - (853,288) (8) (49,384) - (891,063) (8) 106,056 1 3,000 - 109,056 1 (782,007) (7) $ 2,023,497 19 $ 9.06 $ 8.68
		$		$

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

(Concluded)

• 7 -

TXC CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

BALANCE AT JANUARY 1, 2022 Appropriation of 2021 earnings (Note 21) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the year ended December 31, 2022 Other comprehensive income (loss) for the year ended December 31, 2022, net of income tax Total comprehensive income (loss) for the year ended December 31, 2022 Disposal of investments in equity instruments designated as at fair value through other comprehensive income Donations from shareholders Changes in capital surplus from investment in associates and joint ventures accounted for using the equity method BALANCE AT DECEMBER 31, 2022 Appropriation of 2022 earnings (Note 21) Legal reserve Special reserve Cash dividends distributed by the Company Net profit for the year ended December 31, 2023 Other comprehensive income (loss) for the year ended December 31, 2023, net of income tax Total comprehensive income (loss) for the year ended December 31, 2023 Disposal of investments in equity instruments designated as at fair value through other comprehensive income Convertible bond conversion Donations from shareholders Changes in capital surplus from investment in associates and joint ventures accounted for using the equity method BALANCE AT DECEMBER 31, 2023			Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Equity Attributable to Owners of the Company	Others Exchange Differences on Translating the Financial Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Statements of Comprehensive Foreign Operations Income $ (559,579 ) $ 1,357,362 - - - - - - - - 109,056 (902,935) 109,056 (902,935) - (146,974 ) - - - - (450,523 ) 307,453 - - - - - - - - (132,183) (24,704) (132,183) (24,704) - (227,810 ) - - - - - - $ (582,706) $ 54,939	Total Equity $ 12,759,694 - - (2,323,178 ) 2,805,504 (782,007) 2,023,497 - 280 12,915 12,473,208 - - (2,168,299 ) 1,713,702 (153,718) 1,559,984 - 100 269 8,354 $ 11,873,616
		Shares (In Thousands) 309,757 - - - - - - - - - 309,757 - - - - - - - 1 - - 309,758	Share Capital Bond Conversion Ordinary Share Entitlement Capital Surplus $ 3,097,570 $ - $ 1,696,784 - - - - - - - - - - - - - - - - - - - - - - - 280 - - 12,915 3,097,570 - 1,709,979 - - - - - - - - - - - - - - - - - - - - - - 9 91 - - 269 - - 8,354 $ 3,097,570 $ 9 $ 1,718,693		Retained Earnings Unappropriated Legal Reserve Special Reserve Earnings $ 1,635,942 $ 346,761 $ 5,184,854 310,870 - (310,870 ) - (346,761 ) 346,761 - - (2,323,178 ) - - 2,805,504 - - 11,872 - - 2,817,376 - - 146,974 - - - - - - 1,946,812 - 5,861,917 296,435 - (296,435 ) - 143,071 (143,071 ) - - (2,168,299 ) - - 1,713,702 - - 3,169 - - 1,716,871 - - 227,810 - - - - - - - - - $ 2,243,247 $ 143,071 $ 5,198,793

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

• 8 -

TXC CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax Adjustments for: Depreciation expenses Amortization expenses Expected credit loss reversed on trade receivables Net loss on fair value changes of financial assets and liabilities at fair value through profit or loss Finance costs Interest income Dividend income Share of profit of associates and joint ventures Gain on disposal of property, plant and equipment Loss on disposal of non-current assets held for sale Write-down of inventories Unrealized gain on the transactions with subsidiaries, associates and joint ventures Realized gain on the transactions with subsidiaries, associates and joint ventures Gain on modifications of lease Changes in operating assets and liabilities: Notes receivable Trade receivables Trade receivables from related parties Other receivables Other receivables from related parties Inventories Other current assets Trade payables Trade payables to related parties Other payables Other payables to related parties Other current liabilities Net defined benefit liabilities Cash generated from operations Interest paid Income taxes paid Net cash generated from operating activities	2023 $ 1,937,482 504,459 12,386 (6) 11,779 37,349 (38,868) (12,561) (984,206) (1,091) - 13,573 9,266 (9,767) (7) 541 428,658 (5,990) (7,801) (7,458) (8,438) (5,114) 76,082 143,381 (239,169) 505 9,669 (11,310) 1,853,344 (26,101) (541,295) 1,285,948	2022 $ 3,285,085 496,254 17,980 - 19,124 23,287 (12,075) (11,486) (1,000,320) (6,679) 249 17,468 9,767 (8,662) - 2,292 406,678 (53,345) 25,387 5 (143,760) 18,189 (177,181) (89,205) (75,696) (2,500) 7,732 (12,074) 2,736,514 (12,223) (551,369) 2,172,922 (Continued)

• 9 -

TXC CORPORATION

PARENT COMPANY ONLY STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through profit or loss Proceeds from sale of financial assets at fair value through profit or loss Purchase of financial assets at fair value through other comprehensive income Proceeds from sale of financial assets at fair value through other comprehensive income Purchase of financial assets at amortized cost Proceeds from sale of financial assets at amortized cost Proceeds from disposal of non-current assets held for sale Payments for property, plant and equipment Proceeds from disposal of property, plant and equipment Payments for intangible assets Increase in prepayment for equipment Interest received Dividend received from associates Other dividends received Net cash generated from (used in) investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from long-term borrowings Repayments of long-term borrowings Repayments of principle portion of lease liabilities Dividends paid to owners of the company Other changes in capital surplus Net cash used in financing activities EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	2023 $ - 13,274 (40,435) 299,306 (23,083) - - (197,244) 4,393 (8,184) (175,441) 38,507 390,150 32,686 333,929 1,500,000 (1,350,753) (3,243) (2,168,299) 269 (2,022,026) (47) (402,196) 2,375,033 $ 1,972,837	2022 $ (26,157) - (25,359) 178,498 - 6,033 1,745 (535,481) 6,825 (20,585) - 11,978 353,760 29,090 (19,653) 700,000 (418,754) (3,052) (2,323,178) 280 (2,044,704) (4,525) 104,040 2,270,993 $ 2,375,033

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

(Concluded)

• 10 -

NOTES TO PARENT COMPANY ONLY FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

TXC CORPORATION

1. ORGANIZATION AND OPERATIONS

TXC Corporation (the “Company”) was incorporated in the Republic of China (ROC) on December 28, 1983.

TXC specializes in producing high quality crystals and crystal oscillator (CXO) as well as develops a variety of sensors by core technology to satisfy the market demand. Sensors are applied to various applications including mobile communication, information and storage device, internet of things, vehicle electronics, telecommunication equipment, smart home, AI, medical care, and 5G, etc.

TXC’s shares have been listed on the Taiwan Stock Exchange since August 26, 2002.

The financial statements are presented in the Company’s functional currency, the New Taiwan dollar.

To ensure the rights and interests of investors through full disclosure of operational governance, the Company applied for the Corporate Governance Assessment held by the Taiwan Corporate Governance Association (TCGA). For the “Corporate Governance Evaluation” jointly held by the Taiwan Stock Exchange Corporation (TWSE) and Taipei Exchange, under the category of listed companies, the company was awarded as the top 20 percent in 2014, top 5 percent from 2015 to 2017, and top 6 to 20 percent from 2018 to 2022. The Company will continue to strengthen corporate governance with the intention to achieve international standards for protection of public interest. Since 2009, the Company prepared Corporate Social Responsibility Report in accordance with GRI Standards every year, officially established ESG Committee on 2021. Meanwhile, The Company prepared ESG Report to acquire the third party (BSI) certification, initially introduced TCFD and SASB, implemented sustainable development based on scientific methods which met international mainstream, and implementation of human rights equality, gender-friendly workplace and fulfilled the responsibilities as a global citizen. Moreover, the Company actively responds to climate change issues, had established an ISO50001 energy management system, completed the interrogation of ISO14064-1 organizational greenhouse gas, and had begun to implement the interrogation of ISO14067 product carbon footprint. The Company comprehensively applying systematic management methods, collecting and monitoring the energy data, and through self-consumption of electricity and renewable energy procurement, to promote the efficient implementation of energy conservation and emission reduction through multiple channels. All of the above are the efforts that The Company made to replace Corporate Social Responsibility Report to reinforce its operation sustainable development, the implement of energy saving and emission reducing, developing gender-friendly workplace, and fulfilling responsibilities for social benefit.

2. APPROVAL OF FINANCIAL STATEMENTS

The parent company only financial statements were approved by the Company’s board of directors on March 11, 2024.

• 11 -

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS, AND INTERPRETATIONS

• a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) (collectively, the “IFRS Accounting Standards”) endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Company’s accounting policies.

• b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2024.

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

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards will be effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: A seller-lessee shall apply the Amendments to IFRS 16 retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16.

• Note 3: The amendments provide some transition relief regarding disclosure requirements.

• 1) Amendments to IFRS 16 “Leases Liability in a Sale and Leaseback”

The amendments clarify that the liability that arises from a sale and leaseback transaction - that satisfies the requirements in IFRS 15 to be accounted for as a sale - is a lease liability to which IFRS 16 applies. However, if the lease in a leaseback that includes variable lease payments that do not depend on an index or rate, the seller-lessee shall measure lease liabilities arising from a leaseback in such a way that it does not recognize any amount of the gain or loss that relates to the right of use it retains. The seller-lessee subsequently recognizes in profit or loss the difference between the payments made for the lease and the lease payments that reduce the carrying amount of the lease liability.

• 2) Amendments to IAS 1 “Classification of Liabilities as Current or Non-current” (referred to as the “2020 amendments”) and “Non-current Liabilities with Covenants” (referred to as the “2022 amendments”)

The 2020 amendments clarify that for a liability to be classified as non-current, the Company shall assess whether it has the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period. If such rights exist at the end of the reporting period, the liability is classified as non-current regardless of whether the Company will exercise that right.

The 2020 amendments also stipulate that, if the right to defer settlement is subject to compliance with specified conditions, the Company must comply with those conditions at the end of the reporting period even if the lender does not test compliance until a later date. The 2022 amendments further clarify that only covenants with which an entity is required to comply on or before the reporting date should affect the classification of a liability as current or non-current. Although the covenants to be complied with within twelve months after the reporting period do not affect the

• 12 -

classification of a liability, the Company shall disclose information that enables users of financial statements to understand the risk of the Company, which may have difficulty complying with the covenants and repaying its liabilities within twelve months after the reporting period.

The 2020 amendments stipulate that, for the purpose of liability classification, the aforementioned settlement refers to a transfer of cash, other economic resources or the Company’s own equity instruments to the counterparty that results in the extinguishment of the liability. However, if the terms of a liability that, at the option of the counterparty, result in its settlement by a transfer of the Company’s own equity instruments, and if such an option is recognized separately as equity in accordance with IAS 32 “Financial Instruments: Presentation”, the aforementioned terms would not affect the classification of the liability.

• 3) Amendments to IAS 7 and IFRS 7 “Supplier Finance Arrangements”

Supplier finance arrangements are characterized by one or more finance providers offering to pay amounts an entity owes its suppliers and the entity agreeing to pay according to the terms and conditions of the arrangements at the same date as, or a date later than, the suppliers are paid. The amendments stipulate that the Company shall disclose the relevant information about its supplier finance arrangements that enables users of financial statements to assess the effects of those arrangements on the Company’s liabilities and cash flows and on the Company’s exposure to liquidity risk.

Except for the above impact, as of the date the parent company only financial statements were authorized for issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company’s financial position and financial performance.

• c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC.

New IFRS Accounting Standards 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 Amendments to IFRS 17 “Initial Application of IFRS 9 and IFRS 17 - Comparative Information” Amendments to IAS 21 “Lack of Exchangeability”	Effective Date Announced by IASB (Note 1)
	To be determined by IASB January 1, 2023 January 1, 2023 January 1, 2023 January 1, 2025 (Note 2)

• Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

• Note 2: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments, the entity recognizes any effect as an adjustment to the opening balance of retained earnings. When the entity uses a presentation currency other than its functional currency, it shall, at the date of initial application, recognize any effect as an adjustment to the cumulative amount of translation differences in equity.

• 13 -

• 1) Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”

The amendments stipulate that, when the Company sells or contributes assets that constitute a business (as defined in IFRS 3) to an associate or joint venture, the gain or loss resulting from the transaction is recognized in full. Also, when the Company loses control of a subsidiary that contains a business but retains significant influence or joint control, the gain or loss resulting from the transaction is recognized in full.

Conversely, when the Company sells or contributes assets that do not constitute a business to an associate or joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated. Also, when the Company loses control of a subsidiary that does not contain a business but retains significant influence or joint control over an associate or a joint venture, the gain or loss resulting from the transaction is recognized only to the extent of the Company’s interest as an unrelated investor in the associate or joint venture, i.e., the Company’s share of the gain or loss is eliminated.

• 2) Amendments to IAS 21 “Lack of Exchangeability”

The amendments stipulate that a currency is exchangeable into another currency when an entity is able to obtain the other currency within a time frame that allows for a normal administrative delay and through a market or exchange mechanism in which an exchange transaction would create enforceable rights and obligations. An entity shall estimate the spot exchange rate at a measurement date when a currency is not exchangeable into another currency to reflect the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions. In this situation, the Company shall disclose information that enables users of its financial statements to understand how the currency not being exchangeable into the other currency affects, or is expected to affect, its financial performance, financial position and cash flows.

Except for the above impact, as of the date the parent company only financial statements were authorized for issue, the Company is continuously assessing the possible impact of the application of other standards and interpretations on the Company’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

• a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

The parent company only financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair values.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

• 1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;

• 14 -

• 2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and

• 3) Level 3 inputs are unobservable inputs for an asset or liability.

When preparing these parent company only financial statements, the Company used the equity method to account for its investment in subsidiaries, associates and joint ventures. In order for the amounts of the net profit for the year, other comprehensive income for the year and total equity in the parent company only financial statements to be the same with the amounts attributable to the owner of the Company in its consolidated financial statements, adjustments arising from the differences in accounting treatments between the parent company only basis and the consolidated basis were made to investments accounted for using the equity method, the share of profit or loss of subsidiaries, associates and joint ventures, the share of other comprehensive income of subsidiaries, associates and joint ventures and the related equity items, as appropriate, in these parent company only financial statements.

• c. Classification of current and non-current assets and liabilities

Current assets include:

• 1) Assets held primarily for the purpose of trading;

• 2) Assets expected to be realized within 12 months after the reporting period; and

• 3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

• 1) Liabilities held primarily for the purpose of trading;

• 2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and

• 3) Liabilities for which the Company does not have an unconditional right to defer settlement for at least 12 months after the reporting period. 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.

Assets and liabilities that are not classified as current are classified as non-current.

• d. Foreign currencies

In preparing the Company’s financial statements, transactions in currencies other than the Company’s functional currency (i.e., foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

• 15 -

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary item denominated in a foreign currency and measured at historical cost is stated at the reporting currency as originally translated from the foreign currency.

For the purpose of presenting parent company only financial statements, the financial statements of the Company’s foreign operations (including subsidiaries, associates, joint ventures and branches in other countries) that are prepared using functional currencies which are different from the currency of the Company are translated into the presentation currency, the New Taiwan dollar, as follows: Assets and liabilities are translated at the exchange rates prevailing at the end of the reporting period; and income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income (attributed to the owners of the Company and non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e., a disposal of the Company’s entire interest in a foreign operation, or a disposal involving the loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in a joint arrangement or an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Company are reclassified to profit or loss.

In a partial disposal of a subsidiary that does not result in the Company losing control over the subsidiary, the proportionate share of accumulated exchange differences is included in the caculation of equity transactions but is not recognized in profit or loss. For all other partial disposals, the proportionate share of the accumulated exchange differences recognized in other comprehensive income is reclassified to profit or loss.

e. Inventories

Inventories consist of raw materials, supplies, finished goods and work in process and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to Company similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the specific identification of cost on the balance sheet date.

• f. Investments in subsidiaries

The Company uses the equity method to account for its investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the subsidiary. The Company also recognizes the changes in the Company’s share of equity of subsidiaries.

Changes in the Company’s ownership interest in a subsidiary that do not result in the Company losing control of the subsidiary are accounted for as equity transactions. The Company recognizes directly in equity any difference between the carrying amount of the investment and the fair value of the consideration paid or received.

• 16 -

When the Company’s share of loss of a subsidiary exceeds its interest in that subsidiary (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the subsidiary), the Company continues recognizing its share of further loss, if any.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities of a subsidiary that constitutes a business over the cost of acquisition is recognized immediately in profit or loss.

The Company assesses its investment for any impairment by comparing the carrying amount with the estimated recoverable amount as assessed based on the investee’s financial statements as a whole. Impairment loss is recognized when the carrying amount exceeds the recoverable amount. If the recoverable amount of the investment subsequently increases, the Company recognizes a reversal of the impairment loss; the adjusted post-reversal carrying amount should not exceed the carrying amount that would have been recognized (net of amortization or depreciation) had no impairment loss been recognized in prior years. An impairment loss recognized on goodwill cannot be reversed in a subsequent period.

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

Profit or loss resulting from downstream transactions is eliminated in full only in the parent company only financial statements. Profit and loss resulting from upstream transactions and transactions between subsidiaries is recognized only in the parent company only financial statements and only to the extent of interests in the subsidiaries that are not related to the Company.

g. Investments in associates

An associate is an entity over which the Company has a significant influence and is neither a subsidiary nor an interest in a joint venture.

The Company uses the equity method to account for its investments in associates.

Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Company’s share of the profit or loss and other comprehensive income of the associate. The Company also recognizes the changes in the Company’s share of the equity of associates.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets and liabilities of an associate at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Company’s share of the net fair value of the identifiable assets and liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

• 17 -

When the Company subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the associate. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in capital surplus from investments in associates and joint ventures accounted for using the equity method. If the Company’s ownership interest is reduced due to its additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required had the investee directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Company’s share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for using the equity method and long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further loss, if any. Additional losses and liabilities are recognized only to the extent that the Company has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of an investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill, that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

The Company discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities. If an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate, the Company continues to apply the equity method and does not remeasure the retained interest.

When the Company transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Company’s financial statements only to the extent of interests in the associate that are not related to the Company.

h. Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Expect for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

• 18 -

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

• i. Investment properties

Investment properties are properties held to earn rental and/or for capital appreciation.

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss.

Depreciation is recognized using the straight-line method.

For a transfer of classification from investment properties to property, plant and equipment, the deemed cost of the property for subsequent accounting is its carrying amount at the commencement of owner-occupation.

For a transfer of classification from property, plant and equipment to investment properties, the deemed cost of an item of property for subsequent accounting is its carrying amount at the end of owner-occupation.

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

• j. Intangible assets

• 1) Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

• 2) Derecognition of intangible assets

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

• k. Impairment of property, plant and equipment, right-of-use asset, and intangible assets (excluding goodwill)

At the end of each reporting period, the Company reviews the carrying amounts of its property, plant and equipment, right-of-use asset and intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

• 19 -

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

• l. Financial instruments

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

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

• 1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

• a) Measurement categories

Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.

• i. Financial assets at FVTPL

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

Financial assets at FVTPL are subsequently measured at fair value, and any dividends or interest earned on such financial assets are recognized in other income and interest income, respectively; any remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 26.

• ii. Financial assets at amortized cost

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

• i) The financial assets are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

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

• 20 -

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, note and trade receivables at amortized cost, other receivables, and refundable deposits, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such a financial asset.

Cash equivalents include time deposits and repurchase agreement with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

iii. Investments in equity instruments at FVTOCI

On initial recognition, the Company may make an irrevocable election to designate investments in equity instruments as at FVTOCI. Designation as at FVTOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments; instead, it will be transferred to retained earnings.

Dividends on these investments in equity instruments are recognized in profit or loss when the Company’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment.

• b) Impairment of financial assets

The Company recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Company always recognizes lifetime expected credit losses (ECLs) for trade receivables. For all other financial instruments, the Company recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECLs represent the portion of lifetime ECLs that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

• 21 -

• c) Derecognition of financial assets

The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in a debt instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss which had been recognized in other comprehensive income is recognized in profit or loss. However, on derecognition of an investment in an equity instrument at FVTOCI, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss, and the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.

On derecognition of a financial asset other than in its entirety, the Company allocates the previous carrying amount of the financial asset between the part it continues to recognize and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part that is no longer recognized is treated in the same way as when the financial asset is derecognized in entirety. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

2) Financial liabilities

• a) Subsequent measurement

Except the following situations, all financial liabilities are measured at amortized cost using the effective interest method.

 Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when such financial liability is held for trading.

Financial liabilities held for trading are stated at fair value, and any remeasurement gains or losses on such financial liabilities are recognized in other gains or losses. Fair value is determined in the manner described in Note 26.

• b) Derecognition of financial liabilities

The difference between the carrying amount of a financial liability derecognized and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

• 3) Convertible bonds

The component parts of compound instruments (i.e., convertible bonds) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

• 22 -

On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or upon the instrument’s maturity date. Any embedded derivative liability is measured at fair value.

The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised; in which case, the balance recognized in equity will be transferred to capital surplus - share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus - share premiums.

Transaction costs that relate to the issuance of the convertible notes are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.

4) Derivative financial instruments

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risks, including foreign exchange forward contracts, interest rate swaps.

Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately unless the derivative is designated and effective as a hedging instrument; in which event, the timing of the recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.

Derivatives embedded in hybrid contracts that contain financial asset hosts that is within the scope of IFRS 9 are not separated; instead, the classification is determined in accordance with the entire hybrid contract. Derivatives embedded in non-derivative host contracts that are not financial assets within the scope of IFRS 9 (e.g., financial liabilities) are treated as separate derivatives when they meet the definition of a derivative, their risks and characteristics are not closely related to those of the host contracts, and the host contracts are not measured at FVTPL.

m. Revenue recognition

The Company identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied.

Revenue from the sale of goods

Revenue from the sale of goods comes from sales of crystals frequency control devices and sensors. Sales of crystals frequency control devices and sensors are recognized as revenue when the goods are delivered to the customer’s specific location, the goods are shipped and the goods are picked up by customers because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently.

• 23 -

n. Leases

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

1) The Company as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

2) The Company as lessee

The Company recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for by applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate will be used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

o. Borrowing costs

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

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

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

• 24 -

p. Government grants

Government grants are not recognized until there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants will be received.

Government grants are recognized as a reduction of the related costs and other income on a systematic basis over the periods in which the Company recognizes as expenses the related costs that the grants intend to compensate. Specifically, government grants whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognized in profit or loss in the period in which they are received.

• q. Employee benefits

• 1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

• 2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered services entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost and net interest on the net defined benefit liabilities (assets) are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit liabilities (assets) represent the actual deficit (surplus) in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

• r. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

• 1) Current tax

Income tax payable (recoverable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

• 25 -

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are recognized only to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and such temporary differences are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

• 3) Current and deferred tax for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.

Where current tax or deferred tax arises from the initial accounting for a business combination and the acquisition of a subsidiary, the tax effect is included in the accounting for the business combination and investments in a subsidiary.

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION AND UNCERTAINTY

In the application of the Company’s accounting policies, management is required to make judgments, estimations, and assumptions on the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

• 26 -

6. CASH AND CASH EQUIVALENTS

Cash on hand Checking accounts and demand deposits Cash equivalents (investments with original maturities of less than three months) Time deposits Repurchase agreements collateralized by bonds		December 31	December 31
		2023 $ 640 1,272,197 - 700,000 $ 1,972,837	2022 $ 959 1,520,065 274,009 580,000 $ 2,375,033

The market rate intervals of cash in bank at the end of the reporting period were as follows:

7.	December 31 2023 2022 Demand deposits 0.001%-3.5% 0.001%-2.85% Time deposits - 0.98%-3.98% Repurchase agreements collateralized by bonds 1.16%-1.26% 1.02% FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS December 31 2023 2022 Financial assets at FVTPL-current Financial assets mandatorily classified as at FVTPL Non-derivative financial assets Domestic listed shares $ - $ 20,350 Financial liabilities at FVTPL-current Financial liabilities held for trading Derivative financial instruments (not under hedge accounting) Foreign exchange forward contracts and exchange contracts (a) $ 18,323 $ 13,620	December 31	December 31	December 31
			2023 $ - $ 18,323	2022 $ 20,350 $ 13,620

At the end of the reporting period, outstanding foreign exchange forward contracts and exchange contracts not under hedge accounting were as follows:

			Contract Amount
	Currency	Maturity Date	(In Thousands)
December 31, 2023
Knock-out forward	USD/RMB	2024.01.09-2024.02.19	USD6,000/RMB43,440
Exchange contracts	USD/NTD	2024.02.20-2024.05.02	USD31,000/NTD961,812
Exchange contracts	JPY/NTD	2024.01.10-2024.02.20	JPY400,000/NTD86,540
			(Continued)

• 27 -

			Contract Amount
	Currency	Maturity Date	(In Thousands)
December 31, 2022
Sell	USD/JPY	2023.01.04-2023.01.10	USD2,500/JPY334,823
Exchange contracts	USD/NTD	2023.01.09-2023.03.29	USD29,000/NTD900,640
Foreign exchange forward contracts USD/NTD		2023.01.10	USD3,000/NTD99,000
			(Concluded)

The Company entered into foreign exchange forward contracts and exchange contracts during the years ended December 31, 2023 and 2022 to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities. Those contracts did not meet the criteria of hedge effectiveness and therefore were not accounted for by using hedge accounting.

8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME

Non-current Domestic investments Listed shares UPI Semiconductor Corp. Emerging market shares Win Win Precision Technology Co., Ltd. Unlisted shares Foreign investments Unlisted shares		December 31	December 31
		2023 $ - 72,844 68,056 30,435 $ 171,335	2022 $ 262,122 - 213,170 - $ 475,292

These investments in equity instruments are held for medium- to long-term strategic purposes. Accordingly, the management elected to designate these investments in equity instruments as at FVTOCI as they believe that recognizing short-term fluctuations in these investments’ fair value in profit or loss would not be consistent with the Company’s strategy of holding these investments for long-term purposes.

On January 16, 2023, Win Win Precision Technology Co., Ltd.’s shares were listed on the emerging market of OTC. The transfers of fair value measurement level referred to Note 26.

In 2023 and 2022, the Company sold its shares in UPI Semiconductor Corp. in order to manage credit concentration risk in a fair value of $299,306 thousand and $178,498 thousand and its related unrealized gain of $227,810 thousand and $151,993 thousand was transferred from other equity to retained earnings.

In 2022, the subsidiary, TXC Technology Inc., disposed of QST Products LL’s common stock, and the related unrealized loss on financial assets at fair value through other comprehensive income of $5,019 thousand was transferred to retained earnings as a reduction.

• 28 -

9. FINANCIAL ASSETS AT AMORTIZED COST

Current Domestic investments Pledge deposits		December	31
		2023 $ 75,342	2022 $ 52,213

• Refer to Note 28 for information relating to investments in financial assets at amortized cost pledged as security.

10. NOTES, ACCOUNTS RECEIVABLE AND OTHER RECEIVABLES

Notes receivable At amortized cost Gross carrying amount Less: Allowance for impairment loss Trade receivables At amortized cost Gross carrying amount Less: Allowance for impairment loss Other receivables Income tax refund receivable Others		December 31	December 31
		2023 $ - - $ - $ 2,778,366 (10,053) $ 2,768,313 $ 25,166 1,175 $ 26,341	2022 $ 541 (6) $ 535 $ 3,201,034 (10,053) $ 3,190,981 $ 17,526 533 $ 18,059

In order to minimize credit risk, the management of the Company has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Company reviews the recoverable amount of each individual trade debt at the end of the reporting period to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Company’s credit risk was significantly reduced.

• 29 -

The Company measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix prepared by reference to the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the GDP forecasts and industry outlook. As the Company’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Company’s different customer base. The Company recognizes 100% loss allowance for trade receivables of greater than 120 days past due and unsecured.

The Company writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

The following table details the loss allowance of trade receivables based on the Company’s provision matrix.

December 31, 2023

Not Past Due 1 to 60 Days 61 to 120 Days Expected credit loss rate 0.38% 0.02%-0.06% 0.65%-0.98% Gross carrying amount $ 2,665,357 $ 112,926 $ 83 Loss allowance (Lifetime ECL) (10,030) (22) (1) Amortized cost $ 2,655,327 $ 112,904 $ 82 December 31, 2022	121 to 180 Days 100% $ - - $ -	Over 180 Days 100% $ - - $ -	Total $ 2,778,366 (10,053) $ 2,768,313

Not Past Due 1 to 60 Days Expected credit loss rate 0.01% 0.23%-3.53% Gross carrying amount $ 3,012,861 $ 188,714 Loss allowance (Lifetime ECL) (9,309) (750) Amortized cost $ 3,003,552 $ 187,964	61 to 120 Days 21% $ - - $ -	121 to 180 Days 31.5% $ - - $ -	Over 180 Days 100% $ - - $ -	Total $ 3,201,575 (10,059) $ 3,191,516

The movements of the loss allowance of trade receivables were as follows:

Balance at January 1 Less: Impairment losses reversed Balance at December 31		December	31
		2023 $ 10,059 (6) $ 10,053	2022 $ 10,059 - $ 10,059

• 30 -

11. INVENTORIES

Finished goods Work in process Raw materials Supplies and spare parts Merchandise Inventory in transit		December 31	December 31
		2023 $ 240,845 272,310 337,617 118,584 475,460 21,253 $ 1,466,069	2022 $ 348,318 202,994 365,711 105,999 418,403 29,779 $ 1,471,204

The cost of inventories recognized as cost of goods sold for the years ended December 31, 2023 and 2022 was $6,791,972 thousand and $7,414,935 thousand, respectively. The cost of goods sold for the 2023 and 2022 included inventory write-downs of $13,573 thousand and $17,468 thousand, respectively.

12. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

Investments in subsidiaries Investments in associates		December 31	December 31
		2023 $ 7,823,744 397,952 $ 8,221,696	2022 $ 7,348,984 401,707 $ 7,750,691

Investments in Subsidiaries

Unlisted companies Taiwan Crystal Technology International Limited. TXC Technology Inc. TXC Japan Corporation Taiwan Crystal Technology (HK) Limited TXC Europe GmbH		December 31	December 31
		2023 $ 7,563,696 23,290 32,358 193,100 11,300 $ 7,823,744	2022 $ 7,094,310 21,826 31,590 192,258 9,000 $ 7,348,984

The proportion of the Company’s ownership was as follows:

Unlisted stock Taiwan Crystal Technology International Ltd. TXC Technology Inc. TXC Japan Corporation Taiwan Crystal Technology (HK) Limited TXC Europe GmbH	December 31
	2023 2022 100 100 100 100 100 100 100 100 100 100

• 31 -

Investments in Associates

Associate that is not individually material The Company’s share of: Profit from continuing operations Other comprehensive (loss) income Total comprehensive income for the year		December 31	December 31
	2023 $ 397,952 **For the Year Ended **		2022 $ 401,707 **December 31 **
		2023 $ 20,756 (4,266) $ 16,490	2022 $ 24,867 3,230 $ 28,097

Refer to Table 4 “name, locations, and related information of investees on which the Company exercises significant influence” for the nature of activities, principal place of business and country of incorporation of the associates.

13. PROPERTY, PLANT AND EQUIPMENT

Cost Balance at January 1, 2022 Additions Disposals Transfer from prepayment for equipment Balance at December 31, 2022 Accumulated depreciation and impairment Balance at January 1, 2022 Disposals Depreciation expenses Balance at December 31, 2022 Carrying value at December 31, 2022 Cost Balance at January 1, 2023 Additions Disposals Reclassified Balance at December 31, 2023 Accumulated depreciation and impairment Balance at January 1, 2023 Disposals Depreciation expenses Balance at December 31, 2023 Carrying value at December 31, 2023	Freehold Land Land Improvements $ 621,855 $ 2,279 - 745 - - - - $ 621,855 $ 3,024 $ - $ 1,210 - - - 372 $ - $ 1,582 $ 621,855 $ 1,442 $ 621,855 $ 3,024 - - - - - - $ 621,855 $ 3,024 $ - $ 1,582 - - - 317 $ - $ 1,899 $ 621,855 $ 1,125	Buildings $ 1,564,251 45,750 (17,836 ) - $ 1,592,165 $ 684,982 (17,836 ) 75,777 $ 742,923 $ 849,242 $ 1,592,165 42,677 (2,033 ) - $ 1,632,809 $ 742,923 (2,033 ) 65,420 $ 806,310 $ 826,499	Machinery and Equipment $ 3,974,328 469,174 (25,614 ) 226,294 $ 4,644,182 $ 2,879,698 (25,468 ) 403,865 $ 3,258,095 $ 1,386,087 $ 4,644,182 152,398 (78,687 ) (3,200) $ 4,714,693 $ 3,258,095 (75,385 ) 421,916 $ 3,604,626 $ 1,110,067	Transpo- rtation Equipment $ 1,534 - - - $ 1,534 $ 1,310 - 149 $ 1,459 $ 75 $ 1,534 866 (790 ) - $ 1,610 $ 1,459 (790 ) 89 $ 758 $ 852	Office Equipment $ 113,969 19,812 (10,780 ) - $ 123,001 $ 89,530 (10,780 ) 11,647 $ 90,397 $ 32,604 $ 123,001 1,303 (1,930 ) - $ 122,374 $ 90,397 (1,930 ) 12,116 $ 100,583 $ 21,791	Total $ 6,278,216 535,481 (54,230 ) 226,294 $ 6,985,761 $ 3,656,730 (54,084 ) 491,810 $ 4,094,456 $ 2,891,305 $ 6,985,761 197,244 (83,440 ) (3,200) $ 7,096,365 $ 4,094,456 (80,138 ) 499,858 $ 4,514,176 $ 2,582,189

• 32 -

There was no impairment assessment was performed for the years ended December 31, 2023 and 2022 as there was no indication of impairment.

The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Land improvements 5-7 years Buildings Industrial building 3-51 years Electrical power systems 3-51 years Engineering systems 3-51 years Equipment Major production equipments 2-15 years Temperature control systems 4-7 years Transportation equipments 4-7 years Transportation equipments 5 years Office equipment 2-6 years

14. LEASE ARRANGEMENTS

• a. Right-of-use assets

Carrying amounts Buildings Transportation equipment Additions to right-of-use assets Depreciation charge for right-of-use assets Buildings Transportation equipment		**December **	**31 **
	2023 2022 $ 1,309 $ 3,926 2,558 711 $ 3,867 $ 4,637 **For the Year Ended December 31 **
		2023 $ 2,878 $ 2,618 619 $ 3,237	2022 $ - $ 2,618 449 $ 3,067

• b. Lease liabilities

Carrying amounts Current Non-current		December	31
		2023 $ 2,270 1,631 $ 3,901	2022 $ 3,088 1,596 $ 4,684

• 33 -

Range of discount rates for lease liabilities was as follows:

Buildings Transportation equipment	December 31
	2023 2022 1.27% 0.86%-1.27% 3% 0.86%

• c. Material lease-in activities and terms

The Company leases certain warehouses in economic zone with lease term of 3 years, and leases car for business use with lease term of 3 years for the nine months ended September 30, 2023. The Company does not have a bargain purchase option to acquire the leased warehouse at the expire of the lease period.

• d. Other lease information

Expenses relating to short-term leases Total cash outflow for leases	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 249 $ (3,492)	2022 $ 207 $ (3,259)

The Company leases certain building which qualify as short-term leases. The Company has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

15. INVESTMENT PROPERTIES

	Completed
	Investment
	Properties
Cost
Balance at January 1, 2022	$ 28,877
Additions	-
Disposals	(300)
Balance at December 31, 2022	$ 28,577
Accumulated depreciation and impairment
Balance at January 1, 2022	$ (8,911)
Disposals	300
Depreciation expenses	(1,377)
Balance at December 31, 2022	$ (9,988)
Carrying amounts at December 31, 2022	$ 18,589
	(Continued)

• 34 -

	Completed
	Investment
	Properties
Cost
Balance at January 1, 2023	$ 28,577
Additions	-
Disposals	-
Balance at December 31, 2023	$ 28,577
Accumulated depreciation and impairment
Balance at January 1, 2023	$ (9,988)
Disposals	-
Depreciation expenses	(1,364)
Balance at December 31, 2023	$ (11,352)
Carrying amounts at December 31, 2023	$ 17,225
	(Concluded)

The investment properties are depreciated using the straight-line method over their estimated useful lives of 3-51 years.

The fair value of the Company’s investment properties as of December 31, 2023 and 2022 was $57,577 thousand and $52,963 thousand, respectively. The determination of fair value valuation had not been performed by independent qualified professional valuers; however, the management of the Company had used the valuation model that market participants would use in determining the fair value. The valuation was arrived at by reference to market evidence of transaction prices for similar properties.

All of the Company’s investment properties were freehold properties.

16. BORROWINGS

Long-term Borrowings

Unsecured borrowings Line of credit borrowings Less: Current portions Long-term borrowings		**December 31 **	**December 31 **
		2023 $ 2,288,754 (636,087) $ 1,652,667	2022 $ 2,139,507 (656,087) $ 1,483,420

• 35 -

The borrowings of the Company were as follows:

Detail of Borrowing Floating rate borrowings Unsecured bank borrowing denominated in NT$ Maturity date: 2025.01.03 Principle is paid monthly since March 15, 2021 Unsecured bank borrowing denominated in NT$ Maturity date: 2025.01.03 Principle is paid monthly since January 15, 2021 Unsecured bank borrowing denominated in NT$ Maturity date: 2025.01.03 Principle is paid monthly since January 15, 2021 Unsecured bank borrowing denominated in NT$ Maturity date: 2025.01.03 Principle is paid monthly since January 15, 2021 Unsecured bank borrowing denominated in NT$ Maturity date: 2026.08.17 Principle is paid monthly since September 15, 2022 Unsecured bank borrowing denominated in NT$ Maturity date: 2024.08.03 Principle is repaid at maturity Unsecured bank borrowing denominated in NT$ Maturity date: 2024.09.15 Principle is paid monthly since September 15, 2022 Unsecured bank borrowing denominated in NT$ Maturity date: 2024.09.15 Principle is paid monthly since September 15, 2022 Unsecured bank borrowing denominated in NT$ Maturity date: 2024.09.15 Principle is paid monthly since September 15, 2022 Unsecured bank borrowing denominated in NT$ Maturity date: 2024.08.03 Principle is repaid at maturity Unsecured bank borrowing denominated in NT$ Maturity date: 2025.04.01 Principle is paid monthly since March 15, 2023 Unsecured bank borrowing denominated in NT$ Maturity date: 2024.08.03 Principle is repaid at maturity Unsecured bank borrowing denominated in NT$ Maturity date: 2025.04.15 Principle is paid monthly since May 15, 2023 Unsecured bank borrowing denominated in NT$ Maturity date: 2025.07.04 Principle is repaid at maturity Unsecured bank borrowing denominated in NT$ Maturity date: 2025.07.04 Principle is repaid at maturity Unsecured bank borrowing denominated in NT$ Maturity date: 2025.08.03 Principle is repaid at maturity Unsecured bank borrowing denominated in NT$ Maturity date: 2025.08.03 Principle is repaid at maturity

December 31

2023 2022 $ 26,087 $ 52,174 37,500 75,000 25,000 50,000 37,500 75,000 133,333 183,333 - 100,000 108,000 252,000 36,000 84,000 72,000 168,000 - 300,000 180,000 300,000 - 300,000 133,334 200,000 100,000 - 200,000 - 300,000 - 300,000 - (Continued)

• 36 -

December 31 Detail of Borrowing 2023 2022 Unsecured bank borrowing denominated in NT$ Maturity date: 2025.07.04 Principle is repaid at maturity $ 300,000 $ - Unsecured bank borrowing denominated in NT$ Maturity date: 2025.07.10 Principle is repaid at maturity 300,000 - Less: Current portions (636,087) (656,087) $ 1,652,667 $ 1,483,420 (Concluded) The interest rate on the line of credit was 0.85%-1.55% and 0.725%-1.35% annum as of December 31, 2023 and 2022, respectively. BONDS PAYABLE December 31 2023 2022 Unsecured domestic convertible bonds $ 1,199,900 $ 1,200,000 Less: Discount on bonds payable (6,080) (16,727) 1,193,820 1,183,273 Less: Corporate bonds due within one year or one operating cycle (1,193,820) - Unsecured domestic convertible bonds $ - $ 1,183,273		**December 31 **	**December 31 **
		2023 $ 1,199,900 (6,080) 1,193,820 (1,193,820) $ -	2022 $ 1,200,000 (16,727) 1,183,273 - $ 1,183,273

17. BONDS PAYABLE

On July 26, 2021, the Company issued the 5th domestic unsecured convertible bonds with an aggregate principal amount of $1,200,000 thousand at 0% interest rate, and the issuance period is for three years from July 26, 2021 to July 26, 2024. The repayment will be made at face value in full by cash upon maturity. Bondholders are entitled to convert bonds into the Company’s ordinary shares from October 27, 2021 to July 26, 2024. The conversion price was set initially at $138 per share. According to the regulations on issuance and conversion of bonds, the conversion price should be adjusted to $113.6 per share ex-dividend date starting from July 10, 2023.

The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus. The effective interest rate of the liability component was 0.8961% per annum on initial recognition.

Proceeds from issuance (less transaction costs of $5,427 thousand) Equity component (less transaction costs allocated to the equity component of $129 thousand) Assets component Liability component at the date of issue (less transaction costs allocated to the liability component of $5,298 thousand)	$ 1,194,573 (28,431) 2,040 $ 1,168,182 (Continued)

• 37 -

Liability component at December 31, 2021 Interest charged at an effective interest rate Liability component at December 31, 2022 Interest charged at an effective interest rate Conversion of bonds payable to ordinary shares Liability component at December 31, 2023 Less: Corporate bonds due within one year or one operating cycle Unsecured domestic convertible bonds	$ 1,172,721 10,552 1,183,273 10,647 (100) 1,193,820 (1,193,820) $ - (Concluded)

18. OTHER LIABILITIES

Current Other payables Payables for bonuses to employees and directors Payables for commissions Payables for salaries Payables for bonuses Payables for annual leave Payables for purchases of equipment Others		December 31	December 31
		2023 $ 276,024 17,840 43,755 154,912 31,076 32,159 69,827 $ 625,593	2022 $ 393,658 25,232 48,580 229,855 30,946 53,251 85,839 $ 867,361

19. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, the Company makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages.

The Company has set up appointed manager’s pension fund and contributes monthly an amount of not less than 8% of the appointed manager’s monthly salaries and wages to the Bank of Taiwan.

b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the Labor Standards Act is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contributes amounts equal to 9% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee’s name. Before the end of each year, the Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the “Bureau”); the Company has no right to influence the investment policy and strategy.

• 38 -

The amounts included in the balance sheets in respect of the Company’s defined benefit plans were as follows:

Present value of defined benefit obligation Fair value of plan assets Net defined benefit liability		**December 31 **	**December 31 **
		2023 $ 176,155 (156,050) $ 20,105	2022 $ 182,628 (147,425) $ 35,203

Movements in net defined benefit liability (asset) were as follows:

	Present Value
	of the Defined		Net Defined
	Benefit	Fair Value of		Benefit
	Obligation	the Plan Assets	Liability (Asset)
Balance at January 1, 2022	$ 192,025	$ (130,236)	$	61,789
Service cost
Current service cost	1,340	-		1,340
Past service cost loss (gain) on settlement	(458)	460		2
Net interest expense (income)	1,200	(857)		343
Recognized in profit or loss	2,082	(397)		1,685
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(9,662)		(9,662)
Actuarial (gain) loss - changes in
demographic assumptions	1,120	-		1,120
Actuarial (gain) loss - changes in financial
assumptions	(7,329)	-		(7,329)
Actuarial (gain) loss - experience
adjustments	1,358	-		1,358
Recognized in other comprehensive income	(4,851)	(9,662)		(14,513)
Contributions from the employer	-	(13,758)		(13,758)
Benefits paid	(6,628)	6,628		-
Balance at December 31, 2022	182,628	(147,425)		35,203
Service cost
Current service cost	945	-		945
Prior service cost	465	-		465
Past service cost loss (gain) on settlement	(340)	326		(14)
Net interest expense (income)	2,739	(2,313)		426
Recognized in profit or loss	3,809	(1,987)		1,822
Remeasurement
Return on plan assets (excluding amounts
included in net interest)	-	(795)		(795)
Actuarial (gain) loss - changes in financial
assumptions	4,099	-		4,099
Actuarial (gain) loss - experience
adjustments	(7,091)	-		(7,091)
Recognized in other comprehensive income	(2,992)	(795)		(3,787)
Contributions from the employer	-	(13,133)		(13,133)
Benefits paid	(7,290)	7,290		-
Balance at December 31, 2023	$ 176,155	$ (156,050)	$	20,105

• 39 -

An analysis by function of the amounts recognized in profit or loss in respect of the defined benefit plans is as follows:

Cost of goods sold Selling and marketing expenses General and administrative expenses Research and development expenses	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2023 $ 960 135 272 455 $ 1,822	2022 $ 880 122 243 440 $ 1,685

Through the defined benefit plans under the Labor Standards Act, the Company is exposed to the following risks:

• 1) Investment risk: The plan assets are invested in domestic/and foreign/equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

• 2) Interest risk: A decrease in the government and corporate bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plan’s debt investments.

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

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

Discount rate(s) Expected rate(s) of salary increase	December 31
	2023 2022 1.25% 1.50% 2.50% 2.50%

If possible reasonable change in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation will decrease/increase as follows:

Discount rate(s) 0.25% increase 0.25% decrease Expected rate(s) of salary increase 0.25% increase 0.25% decrease		**December **	**31 **
		2023 $ (4,090) $ 4,237 $ 4,110 $ (3,989)	2022 $ (4,510) $ 4,679 $ 4,551 $ (4,409)

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

• 40 -

The expected contributions to the plan for the next year The average duration of the defined benefit obligation		**December **	**31 **
		2023 $ 13,440 9.8 years	2022 $ 13,560 10.2 years

20. EQUITY

• a. Share capital

Ordinary shares

Number of shares authorized (in thousands) Shares authorized Number of shares issued and fully paid (in thousands) Shares issued		**December 31 **	**December 31 **
		2023 500,000 $ 5,000,000 309,758 $ 3,097,570	2022 500,000 $ 5,000,000 309,757 $ 3,097,570

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

30,000 thousand authorized shares of the Company were reserved for the issuance of convertible bonds and employee share options.

Equity component convertible bonds

Number of shares converted but the registration change has not been completed (in thousands) Shares converted but the registration change has not been completed (in thousands)		December	31
		2023 1 $ 9	2022 - $ -

b. Capital surplus

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital* Issuance of ordinary shares Conversion of bonds Overdue options The difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition	December 31
	2023 2022 $ 611,869 $ 611,776 977,028 977,028 73,377 73,377 331 331 (Continued)

• 41 -

May only be used to offset a deficit Share of changes in capital surplus of associates or joint venture Other May not be used for any purpose Employee share options		**December 31 **	**December 31 **
		2023 $ 23,981 3,678 28,429 $ 1,718,693	2022 $ 15,627 3,409 28,431 $ 1,709,979 (Concluded)

• Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company’s capital surplus and once a year).

• c. Retained earnings and dividend policy

Under the dividend policy as set forth in the amended Articles, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonus to shareholders. For the policies on distribution of employees’ compensation and remuneration of directors and supervisors before and after amendment, refer to employee benefits expense in Note 22(g).

Dividends are recommended by the board of directors in accordance with the Corporation’s dividend policy. Under this policy, industry trend and growth should be evaluated, investment opportunities should be fully understood, and proper capital adequacy ratios should be considered in determining the dividend to be distributed. In addition, cash dividends should not be less than 20% of the total dividends to be appropriated.

Appropriation of earnings to legal reserve shall be made until the legal reserve equals the Company’s paid-in capital. Legal reserve may be used to offset deficit. If the Company has no deficit and the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may be transferred to capital or distributed in cash.

When distributing the surplus, the Company is required to set aside additional special reserve equivalent to the net debit balance of the other equity interests in accordance with legal provisions (e.g., exchange differences on the translation of financial statements of foreign operating institutions, accumulated balances of unrealized gains and losses on financial assets at fair value through other comprehensive income). If there is a subsequent decrease in the amount of deductions from other equity items, the decrease can be transferred back to unappropriated earnings from the special surplus reserve.

• 42 -

The appropriations of earnings for 2022 and 2021 were approved by the shareholders in their meetings on May 30, 2023 and May 31, 2022, respectively. The appropriations and dividends per share were as follows:

Legal reserve Recognition (reversal) of special reserve Cash dividends	Appropriation of Earnings For Fiscal For Fiscal Year 2022 Year 2021 $ 296,435 $ 310,870 143,071 (346,761) 2,168,299 2,323,178	Dividends Per Share (NT$)
		For Fiscal For Fiscal Year 2022 Year 2021 $ - $ - - - 7 7.5

The appropriations of earnings for 2023, which were proposed by the board of directors on March 11, 2024, were as follows:

			Dividends	Dividends
	Appropriation		Per	Share
	of	Earnings	(NT$)
Legal reserve	$	194,468	$	-
Special reserve		384,696		-
Cash dividends		1,393,911		4.5

The appropriation of earnings for 2023 is subject to resolution by the shareholders in their meeting to be held on May 28, 2024.

d. Others equity items

• 1) Exchange differences on translating the financial statements of foreign operations

Balance at January 1 Exchange differences on translating the financial statements of foreign operations Share of exchange differences from associates accounted for using the equity method Balance at December 31	For the Year Ended	For the Year Ended	December 31
		2023 $ (450,523) (127,850) (4,333) $ (582,706)	2022 $ (559,579) 106,056 3,000 $ (450,523)

• 43 -

2) Unrealized gain (loss) on financial assets at FVTOCI

Balance at January 1 Recognized during the period Unrealized loss - equity instruments Share from associates accounted for using the equity method Other comprehensive loss recognized in the period Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Balance at December 31	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 307,453 (45,086) 20,382 (24,704) (227,810) $ 54,939	2022 $ 1,357,362 (853,288) (49,647) (902,935) (146,974) $ 307,453

21. REVENUE

Revenue from contracts with customers Revenue from sale of goods Contract Balances Trade receivables (Note 10)	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 2022 $ 8,802,818 $ 10,596,932 **December 31 **
		2023 $ 2,768,313	2022 $ 3,190,981

22. NET PROFIT FROM CONTINUING OPERATIONS

Net profit from continuing operations had been arrived at after charging:

• a. Interest income

Bank deposits Financial assets at amortized cost Others	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2023 $ 28,369 2,440 8,059 $ 38,868	2022 $ 7,473 1,822 2,780 $ 12,075

• 44 -

b. Other income

Rental income Dividends Income from government grants Others	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 6,145 12,561 3,256 4,093 $ 26,055	2022 $ 6,236 11,486 8,846 9,871 $ 36,439

c. Other gains and losses

Gain on disposal of property, plant and equipment Fair value changes of financial assets and financial liabilities Financial assets mandatorily at FVTPL Net foreign exchange gains Loss on disposal of non-current assets held for sale Depreciation of investment properties Gain on modifications of lease Others Finance costs Interest on bank loans Interest on convertible bonds Interest on lease liabilities	For the Year Ended	For the Year Ended	December 31
	2023 $ 1,091 (11,779) 28,760 - (1,364) 7 (5,419) $ 11,296 **For the Year Ended **		2022 $ 6,679 (19,124) 362,359 (249) (1,377) - (3,360) $ 344,928 **December 31 **
		2023 $ 26,640 10,647 62 $ 37,349	2022 $ 12,662 10,552 73 $ 23,287

d. Finance costs

e. Depreciation and amortization

Property, plant and equipment Investment properties Right-of-use assets Intangible assets	For the Year Ended	For the Year Ended	December 31
		2023 $ 499,858 1,364 3,237 12,386 $ 516,845	2022 $ 491,810 1,377 3,067 17,980 $ 514,234 (Continued)

• 45 -

An analysis of deprecation by function Operating costs Operating expenses Non-operating expenses An analysis of amortization by function Operating costs Operating expenses Employee benefits expense Post-employment benefits Defined contribution plans Defined benefit plans (Note 19) Other employee benefits Payroll expense Labor and health insurance Others Total employee benefits expense An analysis of employee benefits expense by function Operating costs Operating expenses	**For the Year Ended **	**For the Year Ended **	**For the Year Ended **	**December 31 **
	2023 $ 296,474 206,621 1,364 $ 504,459 $ 47 12,339 $ 12,386 **For the Year Ended **			2022 $ 309,276 185,601 1,377 $ 496,254 $ 32 17,948 $ 17,980 (Concluded) **December 31 **
		2023 $ 31,464 1,822 33,286 971,280 83,335 31,234 1,085,849 $ 1,119,135 $ 621,691 497,444 $ 1,119,135	2022 $ 31,795 1,685 33,480 1,264,761 85,826 1,960 1,352,547 $ 1,386,027 $ 744,192 641,835 $ 1,386,027

f. Employee benefits expense

g. Employees’ compensation and remuneration of directors for 2023 and 2022

The Company accrued employees’ compensation and remuneration of directors at the rates no less than 3% and no higher than 2%, respectively, of net profit before income tax, employees’ compensation, and remuneration of directors. The employees’ compensation and remuneration of directors for the years ended December 31, 2023 and 2022 which were approved by the Company’s board of directors on March 11, 2024 and March 6, 2023, respectively, were as follows:

Accrual rate

Employees’ compensation Remuneration of directors	For the Year Ended December 31
	2023 2022 9.0% 9.0% 1.5% 1.5%

• 46 -

Amount

Employees’ compensation Remuneration of directors	For the Year Ended December 31	For the Year Ended December 31
	2023 Cash Bonus Share Bonus $ 194,831 $ - 32,472 -	2022
		Cash Bonus Share Bonus $ 330,344 $ - 55,057 -

If there is a change in the amounts after the actual financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the actual amounts of employees’ compensation and remuneration of directors paid and the amounts recognized in the financial statements for the years ended December 31, 2022 and 2021.

Information on the employees’ compensation and remuneration of directors resolved by the Company’s board of directors in 2023 and 2022 is available at the Market Observation Post System website of the Taiwan Stock Exchange.

23. INCOME TAXES RELATING TO CONTINUING OPERATIONS

• a. Income tax recognized in profit or loss

Major components of tax expense recognized in profit or loss

Current tax In respect of the current year Income tax on unappropriated earnings Adjustments for prior year Deferred tax In respect of the current year Income tax expense recognized in profit or loss	**For the Year Ended **	**For the Year Ended **	**December 31 **
		2023 $ 229,394 6,418 (4,356) 231,456 (7,676) $ 223,780	2022 $ 483,644 19,766 (17,465) 485,945 (6,364) $ 479,581

A reconciliation of accounting profit and income tax expense is as follows:

Profit before tax from continuing operations Income tax expense calculated at the statutory rate Non-deductible loss from tax Income tax on unappropriated earnings Tax-exempt income Deferred income tax effect on earnings of subsidiaries	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2023 $ 1,937,482 $ 387,496 1,100 6,418 (201,763) 76,005	2022 $ 3,285,085 $ 657,017 5,286 19,766 (207,721) 79,672 (Continued)

• 47 -

Investment tax credits Adjustment for prior years’ tax Income tax expense recognized in profit or loss Income tax expense recognized in other comprehensive income Deferred tax In respect of the current year Remeasurement of defined benefit plans Current income tax assets and liabilities Current tax assets Tax refund receivable Current tax liabilities Income tax payable	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
	2023 2022 $ (41,120) $ (56,974) (4,356) (17,465) $ 223,780 $ 479,581 (Concluded) For the Year Ended December 31
			2023 $ (757) **December **	2022 $ (2,904) **31 **
		2023 $ 74,030 $ -		2022 $ - $ 235,808

b. Income tax expense recognized in other comprehensive income

• c. Current income tax assets and liabilities

• d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2023

					Recognize in	Recognize in
						Other
					Compre-
	Opening		Recognize in		hensive		Closing
	Balance		Profit or Loss		Income		Balance
Deferred tax assets
Unrealized loss on inventories	$	7,446	$	373	$	-	$	7,819
Unrealized exchange loss		11,336		4,899		-		16,235
Payable for annual leave		6,189		25		-		6,214
Determine benefit obligation		9,403		(2,262)		(757)		6,384
							(Continued)

• 48 -

Financial liabilities at fair value through profit or loss Others Deferred tax liabilities Associates For the year ended December 31, 2022	Opening Balance Recognize in Profit or Loss Recognize in Other Compre- hensive Income $ 4,009 $ 941 $ - 4,469 1,675 - $ 42,852 $ 5,651 $ (757) $ 79,518 $ (2,025) $ -	Closing Balance $ 4,950 6,144 $ 47,746 $ 77,493 (Concluded)

Deferred tax assets Unrealized loss on inventories Unrealized exchange loss Payable for annual leave Determine benefit obligation Financial liabilities at fair value through profit or loss Others Deferred tax liabilities Associates	Opening Balance Recognize in Profit or Loss Recognize in Other Compre- hensive Income $ 7,000 $ 446 $ - 7 11,329 - 5,785 404 - 14,722 (2,415) (2,904) 469 3,540 - 2,489 1,980 - $ 30,472 $ 15,284 $ (2,904) $ 70,598 $ 8,920 $ -	Closing Balance $ 7,446 11,336 6,189 9,403 4,009 4,469 $ 42,852 $ 79,518

• f. Income tax assessments

The income tax returns through 2021 had been assessed by the tax authorities.

• 49 -

24. EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share from continuing operations were as follows:

Net Profit for the Year

Weighted average number of ordinary shares outstanding (in thousand shares):

Earnings used in the computation of basic earnings per share Interest on convertible bonds after tax Earnings used in the computation of diluted earnings per share Weighted average number of ordinary shares used in the computation of basic earnings per share Effect of potentially dilutive ordinary shares: Convertible bonds Employees’ compensation Weighted average number of ordinary shares used in the computation of diluted earnings per share	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 1,713,702 8,517 $ 1,722,219 309,757 10,563 2,634 322,954	2022 $ 2,805,504 8,442 $ 2,813,946 309,757 9,764 4,645 324,166

The Company may settle compensation or bonuses paid to employees in cash or shares; therefore, the Company assumes that the entire amount of the compensation or bonus will be settled in shares and the resulting potential shares will be included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

25. CAPITAL MANAGEMENT

The Company manages its capital to ensure that entities in the Company will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance.

The capital structure of the Company consists of net debt (borrowings offset by cash and cash equivalents) and equity attributable to owners of the Company (comprising issued capital, reserves, retained earnings and other equity).

The Company is not subject to any externally imposed capital requirements.

• 50 -

26. FINANCIAL INSTRUMENTS

• a. Fair value of financial instruments that are not measured at fair value

The management believes the carrying amounts of financial assets and financial liabilities recognized in the financial statements approximate their fair values.

• b. Fair value of financial instruments that are measured at fair value on a recurring basis

• 1) Fair value hierarchy

December 31, 2023 Financial liabilities at FVTPL Foreign exchange forward contracts and exchange contracts Financial assets at FVTOCI Investments in equity instruments Domestic emerging shares Domestic unlisted shares Foreign unlisted shares December 31, 2022 Financial assets at FVTPL Domestic listed shares Financial liabilities at FVTPL Foreign exchange forward contracts and exchange contracts Financial assets at FVTOCI Domestic listed shares Domestic unlisted shares	Level 1 $ - $ 72,844 - - $ 72,844 Level 1 $ 20,350 $ - $ 262,122 - $ 262,122	Level 2 $ 18,323 $ - - - $ - Level 2 $ - $ 13,620 $ - - $ -	Level 3 $ - $ - 68,056 30,435 $ 98,491 Level 3 $ - $ - $ - 213,170 $ 213,170	Total $ 18,323 $ 72,844 68,056 30,435 $ 171,335 Total $ 20,350 $ 13,620 $ 262,122 213,170 $ 475,292

There were no transfers between Levels 1 and 2 in the current and prior periods.

• 51 -

• 2) Reconciliation of Level 3 fair value measurements of financial instruments

For the year ended December 31, 2023

Balance at January 1, 2023 Purchases Transfer to Level 1 Recognized in other comprehensive income (included in unrealized valuation gain (loss) on financial assets at FVTOCI) Balance at December 31, 2023	Financial Assets at FVTPL Equity Instruments $ - - - - $ -	Financial Assets at FVTOCI
		Equity Instruments $ 213,170 40,435 (190,879) 35,765 $ 98,491

The fair value of these shares issued by Win Win Precision Technology Co., Ltd. was transferred from Level 3 to Level 1 since the shares were listed on the Taipei Exchange on January 16, 2023.

For the year ended December 31, 2022

Balance at January 1, 2022 Purchases Reclassified from non-current assets held for sale Recognized in other comprehensive income (included in unrealized valuation gain (loss) on financial assets at FVTOCI) Balance at December 31, 2022	Financial Assets at FVTPL Equity Instruments $ - - - - $ -	Financial Assets at FVTOCI
		Equity Instruments $ 77,466 25,359 4,985 105,360 $ 213,170

3) Valuation techniques and inputs applied for the purpose of measuring Level 2 fair value measurement

Financial Instruments Valuation Techniques and Inputs Derivatives - foreign exchange Discounted cash flow. forward contracts and exchange contracts Future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties. Redemption options on Binomial tree valuation model. convertible bonds Binomial tree valuation model was used to evaluate the observable closing price of the stocks, volatility, risk-free interest rate, risk discount rate, and liquidity risk at the balance sheet date.

• 52 -

• 4) Valuation techniques and inputs applied for the purpose of measuring Level 3 fair value measurement

The fair values of some of the unlisted equity securities - ROC were determined using the market approach. In this approach, the fair values were measured based on the analysis of financial position and financial performance of the investees, with reference to the value in the active market and the index and trade information of the companies, which have similar businesses. Then, the Company considers the financial performance of such equity securities based on the evaluation criteria and uses proper index to determine the fair value.

• c. Categories of financial instruments

Financial assets FVTPL Mandatorily at FVTPL (1) Financial assets at amortized cost (2) Financial assets at FVTOCI Equity instruments Financial liabilities FVTPL Mandatorily as FVTPL (3) Amortized cost (4)	**December 31 **
	2023 2022 $ - $ 20,350 4,853,227 5,639,757 171,335 475,292 18,323 13,620 5,701,342 5,563,348

• 1) The balances include the investment in equity instruments and redemption options on convertible bonds.

• 2) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, trade receivables, other receivables and refundable deposits.

• 3) The balances included the carrying amount of foreign exchange forward contracts and exchange contracts.

• 4) The balances included financial liabilities measured at amortized cost, which comprise short-term and long-term loans, trade payables, other payables, bonds payable, and guarantee deposits received.

• 53 -

d. Financial risk management objectives and policies

The Company’s major financial instruments included equity and debt investments, notes receivable, trade receivables, other receivables, notes payable, trade payables, other payables, borrowings, and bonds payable. The Company’s Corporate Treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Company sought to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives was governed by the Company’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits was reviewed by the internal auditors on a continuous basis. The Company did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

There has been no change to the Company’s exposure to market risks or the manner in which these risks are managed and measured.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Company entered into a variety of derivative financial instruments to manage its exposure to foreign currency risk and interest rate risk, including forward foreign exchange contracts to hedge the exchange rate risk arising on the Company’s foreign currency monetary.

There has been no change to the Company’s exposure to market risks or the manner in which these risks are managed and measured

a) Foreign currency risk

Several subsidiaries of the Company have foreign currency sales and purchases, which exposes the Company to foreign currency risk. Exchange rate exposures are managed within approved policy parameters utilizing foreign exchange forward contracts.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period (see Note 32).

Sensitivity analysis

The Company was mainly exposed to the USD, JPY and RMB.

The following table details the Company’s sensitivity to a 1% increase and decrease in the New Taiwan dollar (the functional currency) against the relevant foreign currencies. The sensitivity rate used when reporting foreign currency risk internally to key management personnel and representing management’s assessment of the reasonably possible change in foreign exchange rates is 1%. The sensitivity analysis included only outstanding foreign currency denominated monetary items and foreign exchange forward contracts designated as cash flow hedges and their adjusted translation at the end of the reporting period for a 1% change in foreign currency rates. The sensitivity analysis included external loans/borrowings as well as loans/borrowings to foreign operations within the Company where the denomination of the loan is in a currency other than the functional currency of the lender or the borrower. A positive number below

• 54 -

indicates an increase in post-tax profit and other equity associated with the New Taiwan dollar strengthening 1% against the relevant currency. For a 1% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on post-tax profit and other equity and the balances below would be negative.

USD impact (i) JPY impact (ii) RMB impact (iii)	Profit or Loss
	2023 2022 $ 23,029 $ 34,813 (2,573) (1,871) (5,178) (1,435)

• i. This was mainly attributable to the exposure on outstanding monetary items in USD which were not hedged at the end of the reporting period.

• ii. This was mainly attributable to the exposure on outstanding monetary items in JPY which were not hedged, at the end of the reporting period.

• iii. This was mainly attributable to the exposure on outstanding monetary items in RMB which were not hedged at the end of the reporting period.

• b) Interest rate risk

The Company was exposed to interest rate risk because the Company deposits and borrow funds at floating interest rates.

The carrying amount of the Company’s financial assets and financial liabilities with exposure to interest rates at the end of the reporting period were as follows:

Fair value interest rate risk Financial assets Financial liabilities Cash flow interest rate risk Financial assets Financial liabilities Sensitivity analysis	December 31
	2023 2022 $ 729,240 $ 869,363 1,589,820 2,687,273 1,318,299 1,556,924 1,892,754 635,507

The sensitivity analysis below was determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of each liability outstanding at the end of the reporting period was outstanding for the whole year. A 25 basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 25 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2023 and 2022 would increase/(decrease) by $(1,436) thousand and $2,304 thousand, respectively, which was mainly attributable to the Company’s exposure to interest rates on its floating rate bank deposits and bank borrowings.

• 55 -

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of discharge an obligation by the counterparties and financial guarantees provided by the Company arises from:

• a) The carrying amount of the respective recognized financial assets as stated in the balance sheets;

• b) The amount of contingent liabilities in relation to financial guarantee issued by the Company.

• 3) Liquidity risk

The Company manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Company’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Company relies on bank borrowings as a significant source of liability. As of December 31, 2023 and 2022, the Company had available unutilized overdraft and short-term bank loan facilities of approximately $4,411,246 thousand and $3,275,449 thousand, respectively.

• a) Liquidity and interest risk rate tables

The following table details the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables had been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Company can be required to pay. The tables included both interest and principal cash flows. Specifically, bank loans with a repayment on demand clause were included in the earliest time band regardless of the probability of the banks choosing to exercise their rights. The maturity dates for other non-derivative financial liabilities were based on the agreed repayment dates.

To extend that interest flows are floating rate, the undiscounted amount was derived from the interest rate curve at the end of the reporting period.

December 31, 2023

	Weighted
	Interest
	Average
	Effective
	Interest Rate	Less than
	(%)	1 Year		2-3 Years		4-5 Years			5+ Years		Total
Non-derivative financial
liabilities
Trade payables	-	$ 1,581,756	$	-	$		-	$		-	$ 1,581,756
Other payables	-	627,462		-			-			-	627,462
Lease liabilities	1.27-3.00	2,270		1,631			-			-	3,901
Variable interest rate
liabilities	0.85-1.55	276,087		1,616,667			-			-	1,892,754
Fixed interest rate liabilities	1.1	1,553,820		36,000			-			-	1,589,820

• 56 -

December 31, 2022

	Weighted
	Interest
	Average
	Effective
	Interest Rate	Less than
	(%)	1 Year		2-3 Years		4-5 Years		5+ Years		Total
Non-derivative financial
liabilities
Trade payables	-	$ 1,362,293	$	-	$	-	$		-	$ 1,362,293
Other payables	-	868,725		-		-			-	868,725
Lease liabilities	0.86-1.27	3,088		1,596		-			-	4,684
Variable interest rate
liabilities	0.725-0.975	248,087		354,087		33,333			-	635,507
Fixed interest rate liabilities	0.90-1.35	408,000		2,279,273		-			-	2,687,273

The amounts included above for variable interest rate instruments for both non-derivative financial assets and liabilities was subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the reporting period.

b) Liquidity and interest risk rate tables for derivative financial liabilities

The following table detailed the Company’s liquidity analysis for its derivative financial instruments. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement.

December 31, 2023

On Demand or Less than 1 Month 1-3 Months 3 Net settled Foreign exchange forward contracts and exchange contracts$ 249 $(13,381) December 31, 2022 On Demand or Less than 1 Month 1-3 Months 3 Net settled Foreign exchange forward contracts and exchange contracts$ (2,857) $(10,763)	Months to 1 Year 1-5 Years $ (5,191) $ - Months to 1 Year 1-5 Years $ - $ -	5+ Years $ - 5+ Years $ -

• 57 -

27. TRANSACTIONS WITH RELATED PARTY

Details of transactions between the Company and related parties are disclosed below.

a. Related party name and relationship

Related Party Name Related Party Category Tai-Shing Electronics Components Corporation Associate Liang Shing Eclife Corp. (“Eclife”) Other associate Longying (Ningbo) Semiconductor Co., Ltd Other associate TXC (Ningbo) Corporation Subsidiary TXC (Chongqing) Corporation Subsidiary Ningbo Jingyu Company Limited Subsidiary TETC CORP. NINGBO Subsidiary Shanghai JCH Co., Ltd. Subsidiary TXC Technology, Inc. Subsidiary Taiwan Crystal Technology (HK) Limited Subsidiary TXC Japan Corporation Subsidiary TXC Europe GmbH Subsidiary

• b. Sales of goods

Line Item Related Party Category Sales Subsidiaries Other associates Associates	**For the Year Ended December 31 **	**For the Year Ended December 31 **	**For the Year Ended December 31 **
		2023 $ 747,728 5,839 30,284 $ 783,851	2022 $ 686,745 12,339 73,936 $ 773,020

In 2023 and 2022, the selling price and purchasing price were not significantly different from those with third parties, except those for NGB, CKG, TETC, Ningbo Jingyu, TXC Technology, TCTH and TXC JP whose trading price depends on its function within the Company.

c. Purchase of goods

Related Party Category Subsidiaries TXC (Ningbo) Corporation TXC (Chongqing) Corporation Others Other associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 1,885,105 1,680,693 410,384 3,976,182 299 $ 3,976,481	2022 $ 2,470,783 1,208,967 349,287 4,029,037 259 $ 4,029,296

In 2023 and 2022, the selling price and purchasing price were not significantly different from those with third parties, except those for NGB, CKG, TETC, Ningbo Jingyu, TXC Technology, TCTH and TXC JP whose trading price depends on its function within the Company.

• 58 -

d. Operating expenses

Related Party Category Subsidiaries TXC Technology, Inc. TXC Japan Corporation TXC Europe GmbH Other associates	For the Year Ended December 31	For the Year Ended December 31	For the Year Ended December 31
		2023 $ 56,009 29,684 12,828 98,521 628 $ 99,149	2022 $ 48,231 29,944 11,761 89,936 2,033 $ 91,969

The consulting fee above is due to the Company’s part of business activities committed to the related parties.

• e. Rental revenue

Related Party Location Rent Collection Tai-Shing Electronics Components Corporation 6F., No. 4, Gongye 6th Rd., Pingzhen Dist., Taoyuan City 324, Taiwan Based on contract, and paid on a monthly basis		For the Year Ended	For the Year Ended	December 31
		2023 Amount % to Total Account Balance $ 3,568 -		2022
				Amount % to Total Account Balance $ 3,518 -

• f. Receivables from related parties (excluding loans to related parties)

Related Party Category Subsidiaries Associates Other associates Less: Allowance for impairment loss		December 31	December 31
		2023 $ 211,638 7,405 1,015 (68) $ 219,990	2022 $ 204,150 8,171 1,747 (68) $ 214,000

The outstanding accounts receivable from related parties are unsecured.

• g. Payables to related parties (excluding loans from related parties)

Related Party Category Subsidiaries TXC (Ningbo) Corporation TXC (Chongqing) Corporation Others Other associates		December 31	December 31
		2023 $ 427,317 540,231 107,373 1,074,921 38 $ 1,074,959	2022 $ 571,918 275,148 84,464 931,530 48 $ 931,578

The outstanding trade payables to related parties are unsecured.

• 59 -

h. Other receivables from related parties

Related Party Category Subsidiaries TXC (Ningbo) Corporation Ningbo Jingyu Company Limited Associates Other associates		December 31	December 31
		2023 $ 3,074 4,328 7,402 425 1 $ 7,828	2022 $ - - - 362 8 $ 370

Other receivables resulted from purchasing machinery and equipment on behalf of subsidiaries.

• i. Other payables to related parties

Related Party Category Subsidiaries Other associates		December 31	December 31
		2023 $ 44 1,825 $ 1,869	2022 $ 114 1,250 $ 1,364

The credit period of the transaction above is similar to those for the third parties.

• j. Prepayments

Related Party Category Other associates Acquisitions for property, plant and equipment Related Party Category Other associates Compensation of key management personnel Related Party Category Short-term employee benefits Post-employment benefits		December 31	December 31
	2023 2022 $ 4,502 $ 4,357 For the Year Ended December 31
	2023 2022 $ 968 $ 16,106 For the Year Ended December 31
		2023 $ 66,161 989 $ 67,150	2022 $ 63,640 3,671 $ 67,311

• k. Acquisitions for property, plant and equipment

• l. Compensation of key management personnel

The remuneration of directors and key executives was determined by the remuneration committee based on the performance of individuals and market trends.

• 60 -

28. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings and foreign exchange forward contracts:

Pledged deposits		**December **	**31 **
		2023 $ 75,342	2022 $ 52,213

29. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

In addition to those disclosed in other notes, significant commitments and contingencies of the Company as of December 31, 2023 and 2022 were as follows:

• a. As of December 31, 2023, unused letters of credit amounted to approximately JPY6,400 thousand.

• b. As of December 31, 2023, the Company unrecognized commitments are as follows:

In Thousands of Foreign Currencies/New Taiwan Dollars

Acquisition of machinery and equipment Acquisition of machinery and equipment	Contract Amount Paid Amount Unpaid Amount $ 490,554 $ 212,156 $ 278,398 JPY 130,500 JPY 91,950 JPY 38,550

30. SIGNIFICANT EVENTS AFTER REPORTING PERIOD: NONE

31. OTHER ITEMS

On December 18, 2023, the Company’s board of directors approved that TXC (Ningbo) Corporation establish a subsidiary named PT TXC TECHNOLOGY INDONESIA (tentative name), with an ownership percentage of 80%. The authorized capital is US$20,000 thousand, and it is expected that US$10,000 thousand will be injected into capital by the second quarter of 2024.

• 61 -

32. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Company’s significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies and the related exchange rates between foreign currencies and respective functional currencies were as follows:

Unit: In Thousands of Foreign Currencies and New Taiwan Dollars

December 31, 2023

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Financial assets
Monetary items
USD	$	97,184	30.7350 (USD:NTD)	$ 2,986,950
JPY		449,288	0.2173 (JPY:NTD)	97,630
RMB		5,214	4.3394 (RMB:NTD)	22,626
Non-monetary items
Investments accounted for using equity
method
USD		7,041	30.7350 (USD:NTD)	216,390
JPY		148,908	0.2173 (JPY:NTD)	32,358
RMB		1,743,028	4.3394 (RMB:NTD)	7,563,696
EUR		332	34.0114 (EUR:NTD)	11,300
Financial liabilities
Monetary items
USD		22,257	30.7350 (USD:NTD)	684,069
JPY		1,633,573	0.2173 (JPY:NTD)	354,975
RMB		124,531	4.3394 (RMB:NTD)	540,390
December 31, 2022
		Foreign		Carrying
		Currency	Exchange Rate	Amount
Financial assets
Monetary items
USD	$	139,256	30.708 (USD:NTD)	$ 4,276,273
JPY		533,718	0.2324 (JPY:NTD)	124,036
RMB		29,898	4.4092 (RMB:NTD)	131,826
Non-monetary items
Investments accounted for using equity
method
USD		6,972	30.708 (USD:NTD)	214,084
JPY		135,930	0.2324 (JPY:NTD)	31,590
RMB		1,608,979	4.4092 (RMB:NTD)	7,094,310
EUR		275	32.7086 (EUR:NTD)	9,000
				(Continued)

• 62 -

		Foreign		Carrying
		Currency	Exchange Rate	Amount
Financial liabilities
Monetary items
USD	$	25,887	30.708 (USD:NTD) $	794,938
JPY		1,338,747	0.2324 (JPY:NTD)	311,125
RMB		62,448	4.4092 (RMB:NTD)	275,346
				(Concluded)

For the years ended December 31, 2023 and 2022, realized and unrealized net foreign exchange gains or loss were $28,760 thousand and $362,359 thousand, respectively. It is impractical to disclose net foreign exchange gains (losses) by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of the Company entities.

33. SEPARATELY DISCLOSED ITEMS

• a. Information about significant transactions and information on investees:

• 1) Lending funds to others. (None)

• 2) Providing endorsements or guarantees for others. (None)

• 3) Holding of securities at the end of the period. (Table 1)

• 4) Aggregate purchases or sales of the same securities reaching NT$300 million or 20% of paid-in capital or more. (None)

• 5)Acquisition of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital. (None)

• 6) Disposal of real estate at prices of at least NT$300 million or 20% of the paid-in capital. (None)

• 7) Purchases or sales of goods or to related parties reaching least NT$100 million or 20% of the paid-in capital. (Table 2)

• 8) Trade receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3)

• 9) Trading in derivative instruments. (Note 7)

• 10) Information on investees. (Table 4)

• b. Information on investments in mainland China

• 1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 5)

• 63 -

• 2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (Table 6)

  • a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.

  • b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.

  • c) The amount of property transactions and the amount of the resultant gains or losses.

  • d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.

  • e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.

  • f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.

• c. Information of major shareholders: List all shareholders with ownership of 5% or greater showing the name of the shareholder, the number of shares owned, and percentage of ownership of each shareholder (None)

• 64 -

TABLE 1

TXC CORPORATION

MARKETABLE SECURITIES HELD DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			December	31, 2023			Note
				Shares		Carrying Amount	Percentage of Ownership		Fair Value
TXC Corporation TXC (Ningbo) Corporation TXC (Chongqing) Limited Ningbo Beilun Jingyu Trading Corporation Ningbo Meishan Free Trade Port Area Ding Kai Investment Management Company Limited	Stock-unlisted company Godsmith Sensor Inc RFIC Technology Corporation Gallopwave Inc. Stock-emerging shares Win Win Precision Technology Co., Ltd. Shares overseas-unlisted company Stathera IP Holdings Inc. Shares overseas-unlisted company Ningbo SJ Electronics Co., Ltd. Structured deposits China Construction Bank China Merchants Bank China CITIC Bank China Minsheng Bank China Everbright Bank Beneficiary certificate Southern Cash Fund Shares overseas-unlisted company Zhejiang Bright Semiconductor Technology Co., Ltd.	None TXC Corporation is a director of the Company ″ None ″ None None ″ ″ ″ ″ None None	Financial assets at fair value through other comprehensive income - non-current ″ ″ ″ ″ Financial assets at fair value through other comprehensive income - non-current Financial assets at fair value through profit or loss - current ″ ″ ″ ″ Financial assets at fair value through profit or loss - current Financial assets at fair value through other comprehensive income - non-current	800 3,334 6,250 1,788 65 567 RMB 84,059 RMB 15,056 RMB 12,759 RMB 3,092 RMB 10,039 RMB 66 7,004		$ 3,672 29,981 34,403 72,844 30,435 $ 171,335 $ 41,995 $ 364,766 65,334 55,364 13,417 43,562 $ 542,443 $ 288 $ 162,427	4 12 8 3 1 5 - - - - - - 3		$ 3,672 29,981 34,403 72,844 30,435 $ 171,335 $ 41,995 $ 364,766 65,334 55,364 13,417 43,562 $ 542,443 $ 288 $ 162,427

(Continued)

• 65 -

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account			**December **	31, 2023			Note
				Shares		Carrying Amount	Percentage of Ownership		Fair Value
Chongqing Zhongyang Properties Co., Ltd. ChongQing Dingsen Commercial Management Co., Ltd.	Structured deposits Chongqing Rural Commercial Bank China Construction Bank Corporation Structured deposits China Construction Bank Corporation	None None None	Financial assets at fair value through profit or loss - current ″ Financial assets at fair value through profit or loss - current	RMB 9,617 RMB 6,971 RMB 656		$ 41,730 30,251 $ 71,981 $ 2,848	- - -		$ 41,730 30,251 $ 71,981 $ 2,848

(Concluded)

• 66 -

TABLE 2

TXC CORPORATION

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Buyer	Related Party	Relationship		Transaction Details	Transaction Details	Transaction Details	Abnormal Transaction	Abnormal Transaction	Notes/Accounts Payable or Receivable	Notes/Accounts Payable or Receivable	Note
			Purchase/ Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
TXC Corporation TXC (Ningbo) Corporation	TXC (Ningbo) Corporation ″ TXC (Chongqing) Corporation TETC CORP. NINGBO TXC (Chongqing) Corporation ″	Subsidiary ″ ″ ″ ″ ″	Purchase Sale Purchase Purchase Purchase Sale	$ 1,885,105 652,731 1,680,693 394,530 221,875 446,800	31 7 28 7 12 11	No significant differences with the third parties. ″ ″ ″ ″ ″	Its trading price depends on its function within the Company ″ ″ ″ ″ ″	No significant differences with the third parties. ″ ″ ″ ″ ″	$ (427,317) 175,833 (540,231) (101,648) (73,895) 217,271	(27) 6 (34) (6) (11) 22

• 67 -

TABLE 3

TXC CORPORATION

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Relationship	Ending Balance	Turnover Rate	Overdue	Overdue	Amount Received in Subsequent Period	Allowance for Impairment Loss
					Amount	**Actions Taken **
TXC Corporation TXC (Ningbo) Corporation TXC (Chongqing) Corporation TETC CORP. NINGBO TXC (Ningbo) Corporation	TXC (Ningbo) Corporation TXC Corporation TXC Corporation TXC Corporation TXC (Chongqing) Corporation	Subsidiary Parent entity Parent entity Parent entity Subsidiary	$ 175,833 427,317 540,231 101,648 217,271	3.70 3.77 4.12 4.43 3.78	$ - - - - -	- - - - -	$ 91,877 262,292 317,516 57,775 45,668	$ - - - - -

• 68 -

TABLE 4

TXC CORPORATION

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES ON WHICH THE COMPANY EXERCISES SIGNIFICANT INFLUENCE DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars or U.S. Dollars)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount	Original Investment Amount	As of December 31,	As of December 31,	2023	Net Income (Losses) of the Investee	Share of Profits (Loss)	Note
				December 31, 2023	December 31, 2022	Shares (In Thousands)	Percentage of Ownership	Carrying Value
TXC Corporation	Taiwan Crystal Technology International Ltd. Taiwan Crystal Technology International (HK) Limited TXC Japan Corporation TXC Technology Inc. Tai-Shing Electronics Components Corporation TXC Europe GmbH	Western Samoa Hong Kong Japan U.S.A. Taiwan Germany	Investment management International trading Marketing activities Marketing activities Manufacture and sales of electronics products Marketing activities	$ 1,390,461 2,371 6,172 9,879 373,432 1,746	$ 1,390,461 2,371 6,172 9,879 373,432 1,746	42,835 80 2 300 8,802 50	100.00 100.00 100.00 100.00 33.34 100.00	$ 7,563,696 193,100 32,358 23,290 397,952 11,300	$ 968,668 682 2,843 1,446 62,255 1,856	$ 956,623 682 2,843 1,446 20,756 1,856

• 69 -

TABLE 5

TXC CORPORATION

INFORMATION ON INVESTMENT IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars or U.S. Dollars)

1. Name of the investees in mainland China, main businesses and products, paid-in capital, method of investment, information on inflow or outflow of capital, percentage of ownership, investment income or loss, ending balance of investment, dividends remitted by the investee, and the limit of investment in mainland China:

Investee Company	Main Businesses and Products	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investments from Taiwan as of January 1, 2023 (In Thousand)	Investment Flows	Investment Flows	Accumulated Outflow of Investments from Taiwan as of December 31, 2023 (In Thousand)	Investee Company Current Net Income	Percentage of Ownership	Investment Income (Loss) Recognized	Carrying Amount as of December 31, 2023	Accumulated Inward Remittance of Earnings as of December 31, 2023
					Outflow	Inflow
TXC (Ningbo) Corporation TXC (Chongqing) Corporation TETC CORP. NINGBO Chongqing Zhongyang Properties Co., Ltd. Ningbo Beilun Jingyu Trading Corporation Ningbo Longying Semiconductor Co., Ltd. Ningbo Meishan Free Trade Port Area Ding Kai Investment Management Company Limited ChongQing Dingsen Commercial Management Co., Ltd. Shanghai JCH Co., Ltd.	Research and development, manufacture, and sale of quartz elements and related electronic products Research and development, manufacture, and sale of quartz elements and related electronic products Research and development, manufacture, and sale of quartz elements and related electronic products Properties development International trading Research and development in integrated circuit Investment management Property management Marketing activities and Technical Services	$ 2,350,052 1,162,074 433,440 684,908 7,090 246,257 160,043 4,390 2,238	Indirect investment of the Corporation in mainland China through the Corporation’s subsidiary in a third region Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China Other investment of the Corporation in mainland China	$ 1,427,630 - - - - - - - -	$ - - - - - - - - -	$ - - - - - - - - -	$ 1,427,630 - - - - - - - -	$ 968,692 200,040 325,299 (25,883) (26) (54,408) 1 (8) 8,746	100.00 100.00 100.00 100.00 100.00 29.37 100.00 100.00 100.00	$ 968,692 200,040 325,299 (25,883) (26) (16,184) 1 (8) 8,746	$ 7,630,212 1,819,130 1,244,942 775,004 6,086 48,174 162,494 (1,209) 10,798	$ 1,390,136 306,500 - - - - - - -

1. The limited amounts of the investment in Mainland China

Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2023	Investment Amounts Authorized by the Investments Commission, MOEA	Upper Limit on the Amount of Investments Stipulated by Investment Commission, MOEA
$1,427,630	$2,350,052	$ -

Note: The investment in mainland China has no maximum limit since the Company has acquired the approval from the Industrial Development Bureau for the establishment of the Company’s operating headquarters in Taiwan.

• 70 -

TABLE 6

FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

TXC CORPORATION

SIGNIFICANT TRANSACTIONS WITH INVESTEE COMPANIES IN MAINLAND CHINA, EITHER DIRECTLY OR INDIRECTLY THROUGH A THIRD AREA, AND THEIR PRICES, PAYMENT TERMS, AND UNREALIZED GAINS OR LOSSES

1. Significant direct or indirect transactions with the investees, prices and terms of payment, unrealized gain or loss:

Company Name	Investee Company	Transaction Type	Purchase/Sale	Purchase/Sale	Price	Transaction Details	Transaction Details	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Unrealized (Gain) Loss	Note
			Amount	%		Payment Term			%
TXC Corporation	TXC (Ningbo) Corporation TXC (Ningbo) Corporation TXC (Chongqing) Corporation TETC CORP. NINGBO	Purchase Sales Purchase Purchase	$ 1,885,105 652,731 1,680,693 394,530	31 7 28 7	Its trading price depends on its function within the Company ″ ″ ″	Similar with third parties ″ ″ ″	Its trading price depends on its function within the Group ″ ″ ″	$ (427,317) 175,833 (540,231) (101,648)	(27) 6 (34) (6)	$ 30,702 7,186 23,131 7,486

1. The transactions of properties and the profit or loss: None.

2. Endorsements guarantees or collateral directly or indirectly provided to the investees: None.

3. Financings directly or indirectly provided to the investees: None.

4. Other transactions that significantly impacted the current year’s profit or loss or financial position: None.

5. 71 -

TXC CORPORATION

THE CONTENTS OF STATEMENTS OF MAJOR ACCOUNTING ITEMS

Item Major Accounting Items in Assets, Liabilities and Equity Statement of cash and cash equivalents Statement of financial assets at fair value through profit or loss - non-current Statement of notes receivable Statement of trade receivables Statement of other receivables Statement of inventories Statement of changes in financial assets at fair value through other comprehensive income - non-current Statement of changes in investments accounted for using equity method Statement of changes in property, plant and equipment Statement of changes in accumulated depreciation of property, plant and equipment Statement of changes in accumulated impairment of property, plant and equipment Statement of changes in investment properties Statement of changes in accumulated depreciation of investment properties Statement of deferred income tax assets Statement of financial liabilities at fair value through profit or loss - current Statement of trade payables Statement of other payables Statement of long-term loans Statement of deferred income tax liabilities Major Accounting Items in Profit or Loss Statement of net revenue Statement of cost of goods sold Statement of manufacturing expenses Statement of operating expenses Statement of other gain and losses Statement of finance costs Statement of labor, depreciation and amortization by function

**Statement Index **

Statement 1 Table 1 Note 10 Statement 2 Note 10 Statement 3 Statement 4 Statement 5 Note 13 Note 13 Note 13 Note 15 Note 15 Note 23 Note 7 Statement 6 Note 18 Note 16 Note 23 Statement 7 Statement 8 Statement 9 Statement 10 Note 22 Note 22 Statement 11

• 72 -

STATEMENT 1

TXC CORPORATION

CASH AND CASH EQUIVALENTS DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars, and Foreign Currency)

Item Cash Cash on hand Including US$7 thousand @30.735; JPY682 thousand @0.2173; HK$2 thousand @3.9339; and RMB13 thousand @4.3394; SGD3 thousand @23.3097; EUR3 thousand @34.0114 Cash in banks Checking accounts and demand deposits Foreign-currency deposits Including US$5,945 thousand @30.7350; JPY219,912 thousand @0.2173; EUR130 thousand @34.0114; RMB3,576 thousand @4.3394; and HK$2 thousand @3.9339 Time deposits Cash equivalents

Amount $ 640 1,021,752 250,445 - 700,000 $ 1,972,837

• 73 -

STATEMENT 2

TXC CORPORATION

TRADE RECEIVABLES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Explanation Related parties TXC (Ningbo) Corporation For goods TXC (Chongqing) Corporation ″ Tai-Shing Electronics Components Corporation ″ TETC CORP. NINGBO ″ TXC Japan Corporation ″ TXC Europe GmbH ″ TXC Technology, Inc. ″ Liang Shing Eclife Corp. ″ Longying (Ningbo) Semiconductor Co., Ltd ″ Less: Allowance for impairment loss Third parties A Company For goods B Company ″ Others (Note) ″ Less: Allowance for doubtful accounts

Amount $ 175,833 642 7,405 31,303 701 3,109 50 998 17 220,058 (68) $ 219,990 $ 330,813 248,340 1,979,155 2,558,308 (9,985) $ 2,548,323

Note: Each of the accounts was less than 5% of the total account balance.

• 74 -

STATEMENT 3

TXC CORPORATION

INVENTORIES DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Raw materials Supplies and spare parts Work in process Finished goods Merchandise Goods in transit Less: Allowance for loss	Cost Market Value (Note) $ 351,939 $ 337,617 119,643 118,584 273,779 272,310 256,948 240,845 476,540 475,460 21,253 21,253 1,500,102 $ 1,466,069 (34,033) $ 1,466,069

Note: The market value is based on net realizable value.

• 75 -

STATEMENT 4

TXC CORPORATION

CHANGES IN FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME - NON-CURRENT FOR THE YEAR ENDED DECEMBER 31, 2023

(In Thousands of New Taiwan Dollars and Shares)

Listed shares UPI Semiconductor Corp. Emerging shares Win Win Precision Technology Co., Ltd. Unlisted shares Godsmith Sensor Inc. Gallopwave Inc. RFIC Technology Corporation Stathera IP Holdings Inc.	Beginning Balance Shares Amount Remeasure 1,106 $ 262,122 $ 37,184 1,625 190,879 (118,035) 800 4,833 (1,161) 5,000 5,449 18,954 3,334 12,009 17,972 - - - 22,291 35,765 $ 475,292 $ (45,086)	Increase Shares Amount - $ - 163 - - - 1,250 10,000 - - 65 30,435 40,435 $ 40,435	Decrease Shares Amount 1,106 $ 299,306 - - - - - - - - - - - $ 299,306	Ending Balance	Pledge or Amount Security $ - None 72,844 〃 3,672 〃 34,403 〃 29,981 〃 30,435 〃 98,491 $ 171,335
				% of Shares Ownership - - 1,788 3 800 4 6,250 8 3,334 12 65 1
	Shares 1,106 1,625 800 5,000 3,334 -	Shares - 163 - 1,250 - 65	Shares 1,106 - - - - -

• 76 -

STATEMENT 5

TXC CORPORATION

CHANGES IN INVESTMENTS ACCOUNTED FOR BY THE EQUITY METHOD FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars and Shares)

Unlisted company Taiwan Crystal Technology International Ltd. TXC Technology Inc. TXC Japan Corporation Taiwan Crystal Technology International (HK) Limited Tai-Shing Electronics Components Corporation TXC Europe GmbH	Beginning Balance Shares Amount 42,835 $ 7,094,310 300 21,826 2 31,590 80 192,258 8,802 401,707 50 9,000 $ 7,750,691	Increase Shares Amount - $ - - - - - - - - - - - $ -	Decrease Shares Amount - $ 390,150 - - - - - - - 20,245 - - $ 410,395	Equity in Investees Gain (Loss) $ 859,536 1,464 768 842 16,490 2,300 $ 881,400	Ending Balance	Amount $ 7,563,696 23,290 32,358 193,100 397,952 11,300 $ 8,221,696	Market Price or Net Asset Value Valuation Unit Price Amount Method Pledge or Security - $ 7,563,696 Equity method None - - 23,290 Equity method None - - 32,358 Equity method None - - 193,100 Equity method None - 39.90 397,952 None - - 11,300 Equity method None - $ 8,221,696
					% of Shares Ownership 42,835 100.00 300 100.00 2 100.00 80 100.00 8,802 33.34 50 100.00
	Shares 42,835 300 2 80 8,802 50	Shares - - - - - -	Shares - - - - - -				Unit Price - - - - 39.90 -

Note: All the above are unlisted company which do not have market price to evaluated.

• 77 -

STATEMENT 6

TXC CORPORATION

ACCOUNTS PAYABLE DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Explanation Related parties TXC (Ningbo) Corporation Payment for goods TXC (Chongqing) Corporation ″ Taiwan Crystal Technology (HK) Limited ″ TXC Japan Corporation ″ Liang Shing Eclife ″ Ningbo Beilun Jingyu Trading Corporation ″ Longying (Ningbo) Semiconductor Co., Ltd ″ TETC CORP. NINGBO ″ Third parties A Corporation Payment for goods B Corporation ″ C Corporation ″ D Corporation ″ E Corporation ″ F Corporation ″ Others (Note) ″

Amount $ 427,317 540,231 5,363 328 8 34 30 101,648 1,074,959 133,420 105,335 49,164 40,599 35,527 26,872 115,880 506,797 $ 1,581,756

Note: Each of the accounts was less than 5% of the total account balance.

• 78 -

STATEMENT 7

TXC CORPORATION

OPERATING REVENUE FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Amount Quartz crystal products $ 8,855,331 Less: Sales returns (31,714) Less: Sales allowances (20,799) $ 8,802,818

• 79 -

STATEMENT 8

TXC CORPORATION

COST OF GOODS SOLD FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Direct materials Beginning materials Add: Material purchase Add: Unfavorable cost variance Less: Expense Less: Others Ending materials Direct labor Overhead Manufacturing cost Beginning work in process Add: Purchases Add: Others Less: Expense Less: Favorable cost variance Ending work in process Finished goods cost Beginning finished goods Less: Favorable cost variance Less: Expense Less: Others Ending finished goods Production cost Beginning merchandise inventory Add: Purchase Less: Favorable cost variance Less: Expense Less: Others Ending merchandise inventory Purchase cost Loss on physical inventory

Amount $ 471,710 984,282 100,160 (149,354) (11,871) (456,201) 938,726 322,388 902,891 2,164,005 202,994 143,657 527 (32,972) (40,228) (272,310) 2,165,673 348,318 (6,330) (11,789) (171) (240,845) 2,254,856 418,403 4,586,806 (4,014) (1,232) (1,987) (475,460) 4,522,516 14,600 $ 6,791,972

• 80 -

STATEMENT 9

TXC CORPORATION

OVERHEAD EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

Item Explanation Indirect labor Including salary and wages, pension, food stipend, employee benefits and insurance etc. Indirect materials Depreciation Utilities Others	Amount $ 298,850 97,443 296,474 111,696 98,428 $ 902,891

Note: Each of the accounts was less than 5% of the total account balance.

• 81 -

STATEMENT 10

TXC CORPORATION

OPERATING EXPENSES FOR THE YEAR ENDED DECEMBER 31, 2023 (In Thousands of New Taiwan Dollars)

		Selling and	Selling and	General and	Research and
Item	Explanation	Marketing		Administration	Development
Salary		$	55,093	$ 129,223	$ 266,492
Insurance			4,438	19,780	17,759
Depreciation			578	5,223	200,820
Research expense			-	-	91,559
Import and export expense			32,529	-	-
Others			143,316	64,049	66,088
		$	235,954	$ 218,275	$ 642,718

Note: Each of the accounts was less than 5% of the total account balance.

• 82 -

STATEMENT 11

TXC CORPORATION

EMPLOYEE WELFARE, DEPRECIATION AND AMORTIZATION EXPENSES FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022 (In Thousands of New Taiwan Dollars)

Item Salaries Insurance Pension Remuneration of directors Other employee benefit Depreciation expense			2023	Total $ 938,808 83,335 33,286 32,472 31,234 $ 1,119,135 $ 503,095			2022
		Operating Cost $ 535,310 46,984 18,448 - 20,949 $ 621,691 $ 296,474	Operating Expense $ 403,498 36,351 14,838 32,472 10,285 $ 497,444 $ 206,621			Operating Cost $ 676,513 48,048 19,048 - 583 $ 744,192 $ 309,276	Operating Expense $ 533,191 37,778 14,432 55,057 1,377 $ 641,835 $ 185,601	Total $ 1,209,704 85,826 33,480 55,057 1,960 $ 1,386,027 $ 494,877

Note 1: As of December 31, 2023 and 2022, the number of employees was 1,072 and 1,166 people both with 8 directors not included in the employees.

• Note 2: Information should be disclosed:

• a. The average of employee benefit is $1,021,300 in the current year. The average of employee benefit is $1,149,370 in the previous year.

• b. The average of salaries is $882,338 in the current year. The average of salaries is $1,044,650 in the previous year.

• c. Change in the average of salaries adjustment rates is (15.54%).

• Note 3: The Company did not have the supervisors for the year ended December 31, 2023 and 2022. Therefore, the Company did not have the corresponding remuneration of supervisors.

• Note 4: The Company and its subsidiaries set the salary scales according to the relative contribution of the employees’ positions, in line with the Company’s operation and development strategy, and based on their personal performance, future development potential and the Company’s operation status as the basis for salary adjustment and bonus payment, so as to encourage the employees to make positive efforts and excellent performance and to achieve the “internal fairness” and “individual fairness” pursuant to the salary; and to encourage employees to deliver great performance at work, the Company allocates a certain proportion of profit-making earnings as the basis of employee dividends and shares the earnings results with colleagues, considers the benchmark enterprises of the industry, regularly checks the rationality of various salary and welfare systems by the “remuneration committee”, maintains the Company’s high level employee welfare, attracts outstanding talents to join and stay for a long time.

• Note 5: The remuneration of directors is determined based on the Company’s Articles of Incorporation. Fair remuneration is provided by considering the operation results and contributions towards company performance. President and vice presidents remuneration payment policy is based on the Company’s Salary Management Rules and salary levels for that job position in the industry market, the scope of authority of that job position inside the Company and the degree of contribution toward operation targets. The procedure for setting remuneration follows evaluation and review procedures under the Company’s Director and Manager Performance Evaluation Rules. In addition, the Company’s overall operational performance, future industry risks and development trends, individual performance achievement rates and contribution towards company performance are also considered in order to provide a fair compensation. The fairness of related performance evaluations and remuneration are reviewed by the salary and compensation committee and board of directors. The remuneration system is discussed at appropriate time based on the actual operating conditions and with respect to related laws to achieve a balance between sustainable company operation and risk control.

• 83 -