Interim report
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Chroma ATE Inc. and Subsidiaries Consolidated Financial Statements for the Years Ended December 31, 2024 and 2023 and Independent Auditors’ Report
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- 1 - DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES The entities required to be included in the consolidated financial statements of affiliates in accordance with the “Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises” for the year ended December 31, 2024 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standards 10 “Consolidated Financial Statements”. Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates. Very truly yours, CHROMA ATE INC. LEO HUANG Chairman February 24, 2025
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- 3 - Key audit matter of the consolidated financial statements for the year ended December 31, 2024 is stated as follows: Occurrence of Sales Revenue from Specific Customers The Group mainly sells test instruments and other products. In 2024, the revenue from specific customers had changed significantly as compared with last year. Considering that there may be greater risks of fraud in revenue recognition and that the management could be under pressure to meet expected financial goals, we identified the occurrence of sales revenue from specific customers as a key audit matter. The main audit procedures we performed for the aforementioned matter are as follows: 1. We obtained an understanding of and tested the processes of internal controls related to the sales cycle and evaluated the effectiveness of design and implementation. 2. We obtained sales details, selected samples and performed test of details, and we verified the documents such as sales order, delivery orders and invoices and confirmed the occurrence of sales revenue. 3. We obtained samples of sales details and tested for any significant difference in customers and the amount of the receivables, or whether they are still within the credit period, to confirm the occurrence of sales revenue. Other Matter The financial statements of some investees included in the financial statements were audited by other auditors. Our opinion, insofar as it relates to the amounts included in the accompanying financial statement for investees, is based solely on the reports of other auditors. As of December 31, 2024 and 2023, the carrying amounts of investments accounted for using the equity method were NT$4,385,973 thousand and NT$3,795,310 thousand, respectively, representing 12% and 11%, respectively, of the total assets. For the years ended December 31, 2024 and 2023, the related shares of profit or loss of associates were NT$607,618 thousand and NT$376,649 thousand, respectively, representing 9% and 7%, respectively, of the profit before income tax. We have also audited the parent company only financial statements of Chroma ATE Inc. as of and for the years ended December 31, 2024 and 2023 on which we have issued an unmodified opinion with the other matter section. Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC and SIC endorsed and issued into effect by the FSC of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
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- 4 - Those charged with governance, including the audit committee, are responsible for overseeing the Group’s financial reporting process. Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: 1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. 2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. 3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. 4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern. 5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. 6. Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion. 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.
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- 5 - We also provide those charged with governance with statements that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2024 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 Wen-Chin Lin and Chien-Liang Liu. Deloitte & Touche Taipei, Taiwan Republic of China February 24, 2025 Notice to Readers The accompanying consolidated financial statements are intended only to present the consolidated 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 consolidated financial statements are those generally applied in the Republic of China. For the convenience of readers, the independent auditors’ report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors’ report and consolidated financial statements shall prevail.
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- 6 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars) 2024 2023 ASSETS Amount % Amount % CURRENT ASSETS Cash and cash equivalents (Note 6) $ 4,099,223 11 $ 4,132,261 12 Financial assets at fair value through profit or loss (Note 7) 461,741 1 331,348 1 Financial assets at fair value through other comprehensive income (Note 8) 73,778 - 74,506 - Financial assets at amortized cost (Notes 9 and 31) 405,560 1 256,079 1 Contract assets (Note 22) 272,090 1 543,318 2 Notes receivable (Note 10) 232,855 1 297,335 1 Trade receivables (Notes 5 and 10) 5,827,117 15 5,040,498 15 Trade receivables - related parties (Notes 10 and 30) 10,258 - 7,143 - Inventories (Note 11) 5,458,484 15 4,675,370 14 Prepayments 313,773 1 294,167 1 Other current assets 270,507 1 120,128 - Total current assets 17,425,386 47 15,772,153 47 NON-CURRENT ASSETS Financial assets at fair value through profit or loss (Note 7) 80,530 - 4,205 - Financial assets at fair value through other comprehensive income (Note 8) 1,247,260 3 1,240,888 4 Financial assets at amortized cost (Notes 9 and 31) 235,819 1 141,988 1 Investments accounted for using the equity method (Note 13) 4,876,005 13 4,265,058 13 Property, plant and equipment (Notes 14, 30 and 31) 6,955,641 19 7,169,684 21 Right-of-use assets (Note 15) 329,592 1 308,608 1 Investment properties (Note 16) 2,478,333 7 2,478,333 7 Goodwill (Note 17) 193,144 - 189,400 1 Intangible assets 95,543 - 68,650 - Deferred tax assets (Note 24) 386,421 1 424,568 1 Prepayments for equipment 2,838,181 8 1,273,532 4 Refundable deposits 25,775 - 24,122 - Prepayments for investment - - 33,120 - Other non-current assets (Note 20) 139,952 - 87,239 - Total non-current assets 19,882,196 53 17,709,395 53 TOTAL $ 37,307,582 100 $ 33,481,548 100 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term borrowings (Notes 18 and 31) $ 1,413,607 4 $ 2,131,550 6 Contract liabilities (Note 22) 777,907 2 1,190,461 4 Notes payable 34,367 - 26,701 - Notes payable - related parties (Note 30) 4,024 - 771 - Trade payables 3,059,024 8 2,587,268 8 Trade payables - related parties (Note 30) 8,630 - 3,242 - Other payables (Note 19) 2,036,854 6 1,788,036 5 Current tax liabilities 674,728 2 456,913 1 Lease liabilities (Notes 15 and 30) 154,376 - 145,813 1 Current portion of long-term borrowings (Notes 18 and 31) 3,828 - 4,244 - Other current liabilities 67,440 - 83,806 - Total current liabilities 8,234,785 22 8,418,805 25 NON-CURRENT LIABILITIES Long-term borrowings (Notes 18 and 31) 2,108,078 6 989,835 3 Deferred tax liabilities (Note 24) 1,210,044 3 1,185,641 4 Lease liabilities (Notes 15 and 30) 194,610 1 191,552 1 Net defined benefit liabilities (Note 20) 79,587 - 153,235 - Guarantee deposits received 20,839 - 20,834 - Other non-current liabilities 9,938 - 4,761 - Total non-current liabilities 3,623,096 10 2,545,858 8 Total liabilities 11,857,881 32 10,964,663 33 EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION (Note 21) Ordinary share capital 4,253,220 12 4,253,644 13 Capital surplus 4,597,402 12 4,544,870 13 Retained earnings Legal reserve 4,142,360 11 3,747,675 11 Special reserve 86,888 - 86,888 - Unappropriated earnings 10,934,111 30 9,004,779 27 Total retained earnings 15,163,359 41 12,839,342 38 Other equity 893,566 2 348,888 1 Treasury shares (30,868) - (30,868) - Total equity attributable to owners of the Corporation 24,876,679 67 21,955,876 65 NON-CONTROLLING INTERESTS 573,022 1 561,009 2 Total equity 25,449,701 68 22,516,885 67 TOTAL $ 37,307,582 100 $ 33,481,548 100 The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated February 24, 2025)
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- 7 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2024 2023 Amount % Amount % NET OPERATING REVENUE (Notes 22 and 30) $ 21,603,837 100 $ 18,676,043 100 OPERATING COSTS (Notes 11, 23 and 30) 8,857,861 41 7,918,828 42 GROSS PROFIT 12,745,976 59 10,757,215 58 UNREALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES - - (229) - REALIZED GAIN ON TRANSACTIONS WITH ASSOCIATES AND JOINT VENTURES 259 - - - REALIZED GROSS PROFIT 12,746,235 59 10,756,986 58 OPERATING EXPENSES (Notes 23 and 30) Selling and marketing expenses 3,497,955 16 2,944,801 16 General and administrative expenses 1,520,622 7 1,368,412 7 Research and development expenses 2,198,622 10 1,757,322 10 Expected credit impairment losses 46,870 1 13,614 - Total operating expenses 7,264,069 34 6,084,149 33 PROFIT FROM OPERATIONS 5,482,166 25 4,672,837 25 NON-OPERATING INCOME AND EXPENSES Finance costs (44,672) - (60,664) - Share of profit of associates and joint ventures accounted for using the equity method (Note 13) 668,580 3 437,570 2 Interest income 92,552 1 85,256 - Dividend income 39,295 - 59,108 - Other income (Note 27) 170,592 1 137,205 1 Gain on disposal of property, plant and equipment 8,661 - 1,317 - Gains on disposal of intangible assets 24 - - - Gain on disposal of investments accounted for using the equity method 46,589 - 7,627 - Gain on lease modification 26 - 148 - Foreign exchange gain (loss) 250,220 1 (57,769) - Gain (loss) on financial assets at fair value through profit or loss 9,053 - (36,109) - Other expenses (14,523) - (36,314) - Impairment loss (Note 17) - - (44,129) - Total non-operating income and expenses 1,226,397 6 493,246 3 (Continued)
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- 8 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2024 2023 Amount % Amount % PROFIT BEFORE INCOME TAX $ 6,708,563 31 $ 5,166,083 28 INCOME TAX EXPENSE (Note 24) 1,308,450 6 1,070,409 6 NET PROFIT FOR THE YEAR 5,400,113 25 4,095,674 22 OTHER COMPREHENSIVE INCOME (LOSS) Items that will not be reclassified subsequently to profit or loss: Remeasurement of defined benefit plans (Note 20) 49,129 - (19,803) - Unrealized gain or loss on investments in equity investments designated as at fair value through other comprehensive income (35,653) - (34,128) (1) Share of the other comprehensive income (loss) of associates and joint ventures accounted for using the equity method 11,024 - (42) - Items that may be reclassified subsequently to profit or loss: Exchange differences on translating the financial statements of foreign operations 279,961 2 (41,924) - Share of the other comprehensive income (loss) of associates and joint ventures accounted for using the equity method 276,792 1 (4,344) - Total other comprehensive income 581,253 3 (100,241) (1) TOTAL COMPREHENSIVE INCOME $ 5,981,366 28 $ 3,995,433 21 NET PROFIT ATTRIBUTABLE TO: Owners of the Corporation $ 5,264,251 24 $ 3,979,247 21 Non-controlling interests 135,862 1 116,427 1 $ 5,400,113 25 $ 4,095,674 22 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO: Owners of the Corporation $ 5,821,526 27 $ 3,877,351 21 Non-controlling interests 159,840 1 118,082 - $ 5,981,366 28 $ 3,995,433 21 (Continued)
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- 9 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Except Earnings Per Share) 2024 2023 Amount % Amount % EARNINGS PER SHARE (NT$; Note 25) Basic $ 12.49 $ 9.45 Diluted $ 12.38 $ 9.37 The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated February 24, 2025) (Concluded)
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- 10 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars) Equity Attributable to Owners of the Corporation Other Equity Exchange Unrealized Gain Differences on (Loss) on Financial Translating the Assets at Fair Value Retained Earnings Financial Statements through Other Ordinary Share Unappropriated of Foreign Comprehensive Unearned Employee Non-controlling Capital Capital Surplus Legal Reserve Special Reserve Earnings Total Operations Income Benefit Total Treasury Shares Total Interests Total Equity BALANCE AT JANUARY 1, 2023 $ 4,253,970 $ 4,502,473 $ 3,237,808 $ 86,888 $ 8,970,974 $ 12,295,670 $ (90,349 ) $ 629,871 $ (200,059 ) $ 339,463 $ (30,868 ) $ 21,360,708 $ 511,973 $ 21,872,681 Appropriation of the 2022 earnings Legal reserve - - 509,867 - (509,867 ) - - - - - - - - - Cash dividends - NT$8 per share - - - - (3,403,176 ) (3,403,176 ) - - - - - (3,403,176 ) - (3,403,176 ) Change in capital surplus from investments in associates and joint ventures accounted for using the equity method - 29,389 - - - - - - - - - 29,389 - 29,389 Net profit for the year ended December 31, 2023 - - - - 3,979,247 3,979,247 - - - - - 3,979,247 116,427 4,095,674 Other comprehensive income (loss) for the year ended December 31, 2023 - - - - (20,252 ) (20,252 ) (47,140 ) (34,504 ) - (81,644 ) - (101,896 ) 1,655 (100,241 ) Total comprehensive income (loss) for the year ended December 31, 2023 - - - - 3,958,995 3,958,995 (47,140 ) (34,504 ) - (81,644 ) - 3,877,351 118,082 3,995,433 Adjustment of capital surplus for the Corporation's cash dividends received by subsidiary - 13,238 - - - - - - - - - 13,238 - 13,238 Disposal of investments accounted for using the equity method - (556 ) - - - - - - - - - (556 ) - (556 ) Changes in ownership interests in subsidiaries - - - - (12,137 ) (12,137 ) - - - - - (12,137 ) 12,137 - Share-based payment (326 ) 326 - - - - - - 91,059 91,059 - 91,059 - 91,059 Share-based payment by subsidiary - - - - - - - - - - - - 1 1 Cash dividends distributed by subsidiaries - - - - - - - - - - - - (81,184 ) (81,184 ) Unrealized gain or loss transferred to retained earnings from disposal of equity instruments designated at fair value through other comprehensive income and investments accounted for using the equity method - - - - (10 ) (10 ) - 10 - 10 - - - - BALANCE AT DECEMBER 31, 2023 4,253,644 4,544,870 3,747,675 86,888 9,004,779 12,839,342 (137,489 ) 595,377 (109,000 ) 348,888 (30,868 ) 21,955,876 561,009 22,516,885 Appropriation of the 2023 earnings Legal reserve - - 394,685 - (394,685 ) - - - - - - - - - Cash dividends - NT$6.6 per share - - - - (2,807,405 ) (2,807,405 ) - - - - - (2,807,405 ) - (2,807,405 ) Change in capital surplus from investments in associates and joint ventures accounted for using the equity method - 42,676 - - - - - - - - - 42,676 - 42,676 Unclaimed dividends (48 ) 353 - - - - - - - - - 305 - 305 Net profit for the year ended December 31, 2024 - - - - 5,264,251 5,264,251 - - - - - 5,264,251 135,862 5,400,113 Other comprehensive income (loss) for the year ended December 31, 2024 - - - - 49,854 49,854 532,790 (25,369 ) - 507,421 - 557,275 23,978 581,253 Total comprehensive income (loss) for the year ended December 31, 2024 - - - - 5,314,105 5,314,105 532,790 (25,369 ) - 507,421 - 5,821,526 159,840 5,981,366 Adjustment of capital surplus for the Corporation's cash dividends received by subsidiary - 10,920 - - - - - - - - - 10,920 - 10,920 Disposal of investments accounted for using the equity method - (3,417 ) - - - - - - - - - (3,417 ) - (3,417 ) Difference between consideration and carrying amount of subsidiaries acquired or disposed - - - - (206,011 ) (206,011 ) (1,407 ) - - (1,407 ) - (207,418 ) (56,428 ) (263,846 ) Changes in ownership interests in subsidiaries - 1,624 - - - - - - - - - 1,624 (1,624 ) - Share-based payment (376 ) 376 - - - - - - 61,992 61,992 - 61,992 - 61,992 Share-based payment by subsidiary - - - - - - - - - - - - 5 5 Cash dividends distributed by subsidiaries - - - - - - - - - - - - (89,780 ) (89,780 ) Unrealized gain or loss transferred to retained earnings from disposal of equity instruments designated at fair value through other comprehensive income - - - - 23,297 23,297 - (23,297 ) - (23,297 ) - - - - Unrealized gain or loss transferred to retained earnings from disposal of equity instruments designated at fair value through other comprehensive income and investments accounted for using the equity method - - - - 31 31 - (31 ) - (31 ) - - - - BALANCE AT DECEMBER 31, 2024 $ 4,253,220 $ 4,597,402 $ 4,142,360 $ 86,888 $ 10,934,111 $ 15,163,359 $ 393,894 $ 546,680 $ (47,008 ) $ 893,566 $ (30,868 ) $ 24,876,679 $ 573,022 $ 25,449,701 The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated February 24, 2025)
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- 11 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars) 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Income before income tax $ 6,708,563 $ 5,166,083 Adjustments for: Depreciation expenses 744,792 722,446 Amortization expenses 30,370 24,148 Expected credit loss recognized on trade receivables 46,870 13,614 (Gain) loss on financial assets at fair value through profit or loss (9,053) 36,109 Finance costs 44,672 60,664 Interest income (92,552) (85,256) Dividend income (39,295) (59,108) Compensation costs of share-based payment 61,997 91,060 Share of profit of associates and joint ventures accounted for using the equity method (668,580) (437,570) Gain on disposal of property, plant and equipment (8,661) (1,317) Gain on disposal of intangible assets (24) - Gain on disposal of investments accounted for using the equity method (46,589) (7,627) (Reversal) write-downs of inventories (35,254) 36,296 Impairment loss - 44,129 (Realized) unrealized gain on transactions with associates (259) 229 Net (gain) loss on foreign currency exchange (31,985) 13,487 Gain on lease modification (26) (148) Gain from bargain purchase (721) - Net changes in operating assets and liabilities Contract assets 271,228 547,339 Notes receivable 64,480 18,212 Trade receivables (655,928) (654,175) Inventories (816,026) (48,989) Prepayments (32,945) (12,921) Other current assets (158,191) 94,003 Contract liabilities (412,554) (466,195) Notes payable 10,919 (14,200) Trade payables 447,544 (303,339) Other payables 416,585 14,615 Other current liabilities (16,366) (104,349) Net defined benefit liabilities (24,519) (22,187) Cash generated from operations 5,798,492 4,665,053 Income tax paid (1,014,562) (1,256,643) Net cash generated from operating activities 4,783,930 3,408,410 (Continued)
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- 12 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars) 2024 2023 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of financial assets at fair value through other comprehensive income $ (299,163) $ (133,247) Proceeds from disposal of financial assets at fair value through other comprehensive income 291,626 - Proceeds from capital reduction of financial assets at fair value through other comprehensive income 7,198 10,151 Increase in financial assets at amortized cost (452,854) (245,517) Decrease in financial assets at amortized cost 225,169 394,063 Payments to acquire financial assets at fair value through profit or loss (510,912) (569,134) Proceeds from disposal of financial assets at fair value through profit or loss 324,196 596,755 Disposal of investments accounted for using the equity method 74,669 11,115 Increase in prepayments for investments - (33,120) Net cash inflow on acquisition of subsidiaries 684 - Payments for property, plant and equipment (166,944) (545,924) Proceeds from disposal of property, plant and equipment 53,599 11,069 (Increase) decrease in refundable deposits (1,653) 657 Payments to acquire intangible assets (57,185) (15,557) Proceeds from disposal of intangible assets 207 - (Increase) decrease in other non-current assets (47,987) 457 Increase in prepayments for equipment (1,837,836) (1,074,808) Interest received 92,561 84,504 Dividends received 413,740 114,458 Net cash used in investing activities (1,890,885) (1,394,078) CASH FLOWS FROM FINANCING ACTIVITIES Increase in short-term borrowings 12,991,745 8,912,700 Decrease in short-term borrowings (13,709,298) (8,599,360) Proceeds from long-term borrowings 1,150,000 885,000 Repayments of long-term borrowings (39,365) (1,262,231) Increase (decrease) in guarantee deposits 5 (40,089) Repayment of the lease principal (186,181) (171,161) Increase (decrease) in other non-current liabilities 5,177 (2,410) Cash dividends paid (2,807,405) (3,403,176) Acquisition of ownership interests in subsidiary (262,439) - Interest paid (49,917) (70,559) Dividends paid to non-controlling interests (89,780) (81,184) Unclaimed dividends 305 - Net cash used in financing activities (2,997,153) (3,832,470) EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH HELD IN FOREIGN CURRENCIES 71,070 8,887
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- 13 - CHROMA ATE INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars) 2024 2023 NET DECREASE IN CASH AND CASH EQUIVALENTS $ (33,038) $ (1,809,251) CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 4,132,261 5,941,512 CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR $ 4,099,223 $ 4,132,261 The accompanying notes are an integral part of the consolidated financial statements. (With Deloitte & Touche auditors’ report dated February 24, 2025) (Concluded)
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- 14 - CHROMA ATE INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise) 1. GENERAL INFORMATION Chroma ATE Inc. (the “Corporation”) was incorporated in the Republic of China (ROC) in November 1984. The Corporation mainly designs, assembles, calibrates, manufactures, sells, repairs and maintains software/hardware for computers and peripherals, computerized automatic test systems, electronic test instruments, signal generators, power supplies, telecom power supplies, etc. as well as serves as an agent to sell these products. The Corporation’s shares have been listed on the Taiwan Stock Exchange since December 21, 1996. The consolidated financial statements are presented in the Corporation’s functional currency, the New Taiwan dollar (NT$). 2. APPROVAL OF FINANCIAL STATEMENTS The consolidated financial statements were approved by the Corporation’s board of directors on February 24, 2025. 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 Group’s accounting policies. b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2025 New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB Amendments to IAS 21 “Lack of Exchangeability” January 1, 2025 (Note) Note: An entity shall apply those amendments for annual reporting periods beginning on or after January 1, 2025. Upon initial application of the amendments to IAS 21, the Group shall not restate the comparative information and shall recognize any effect of initially applying the amendments as an adjustment to the opening balance of retained earnings or, if applicable, to the cumulative amount of translation differences in equity as well as affected assets or liabilities. As of the date the consolidated financial statements were authorized for issue, the Group has assessed that the application of related standards and interpretations will not have a material impact on the Group’s financial position and financial performance.
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- 15 - c. The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC New, Amended and Revised Standards and Interpretations Effective Date Announced by IASB (Note) Annual Improvements to IFRS Accounting Standards - Volume 11 January 1, 2026 Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” January 1, 2026 Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity” January 1, 2026 Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture” To be determined by IASB IFRS 17 “Insurance Contracts” January 1, 2023 Amendments to IFRS 17 January 1, 2023 Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information” January 1, 2023 IFRS 18 “Presentation and Disclosure in Financial Statements” January 1, 2027 IFRS 19 “Subsidiaries without Public Accountability: Disclosures” January 1, 2027 Note: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates. IFRS 18 “Presentation and Disclosure in Financial Statements” IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise: Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories. The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss. Provides guidance to enhance the requirements of aggregation and disaggregation: The Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as “other” only if it cannot find a more informative label. Disclosures on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management’s view of an aspect of the financial performance of the Group as a whole, the Group shall disclose related information about its MPMs in a single note to the financial statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interests effects of related reconciliation items. Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing other impacts of the above amended standards and interpretations on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.
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- 16 - 4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION a. Statement of compliance The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS Accounting Standards as endorsed and issued into effect by the FSC. b. Basis of preparation The consolidated financial statements have been prepared on the historical cost basis except for financial instruments that are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets. 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; 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. c. Classification of current and noncurrent 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 are 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; and 3) Liabilities for which the Group does not have the substantial right at the end of the reporting period to defer settlement for at least 12 months after the reporting period. Assets and liabilities that are not classified as current are classified as non-current.
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- 17 - d. Basis of consolidation The consolidated financial statements incorporate the financial statements of the Corporation and the entities controlled by the Corporation (its subsidiaries). Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Corporation and to the non-controlling interests. Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Corporation. Refer to Note 12 and Tables 7 and 8 for the detailed information of subsidiaries, including the percentage of ownership and main business. e. Foreign currencies In preparing the financial statements of each individual entity in the Group, transactions in currencies other than the Corporation’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. 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 is 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 case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items 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 consolidated financial statements, the financial statements of the Corporation’s foreign operations (including subsidiaries, associates and joint ventures in other countries) that are prepared using functional currencies which are different from the currency of the Corporation 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; 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 Corporation and non-controlling interests as appropriate). On the disposal of a foreign operation (i.e., a disposal of the Corporation’s entire interest in a foreign operation,), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Corporation are reclassified to profit or loss.
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- 18 - f. Inventories Inventories consist of raw materials, work-in-process, semi-finished goods, finished goods and inventory in transit, which 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 group 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 standard cost and make timely adjustments to ensure that they approximate to weighted-average cost. g. Investments in associates and joint ventures The Group uses the equity method to account for its investments in associates and joint ventures. Under the equity method, investment is initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate and joint venture. The Group also recognizes the changes in the Group’s share of the equity of associates and joint ventures attributable to the Group. An associate is an entity over which the Group has significant influence and which is neither a subsidiary nor an interest in a joint venture. A joint venture is a joint arrangement whereby the Group and other parties that have joint control of the arrangement have rights to the net assets of the arrangement. Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets and liabilities of an associate and a joint venture at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. When the Group subscribes for additional new shares of an associate and a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Group’s proportionate interest in the associate and joint venture. The Group 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 Group’s ownership interest is reduced due to its additional subscription of the new shares of the associate and joint venture, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate and joint venture 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 a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group’s financial statements only to the extent that interests in the associate and the joint venture are not related to the Group. h. Property, plant and equipment Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation. Property, plant and equipment in the course of construction are measured at cost. 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.
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- 19 - Except 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 method are reviewed at the end of each reporting period, with the effect of any changes in the estimates accounted for on a prospective basis. 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 rentals and/or for capital appreciation. Investment properties include properties under construction that meet the definition of investment properties. Investment properties also include land held for a currently undetermined future use. Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation. Depreciation is recognized using the straight-line method. 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. Goodwill Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss. For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units or groups of cash-generating units (referred to as “cash-generating units”) that are expected to benefit from the synergies of the combination. k. Financial instruments Financial assets and financial liabilities are recognized when an entity in the Group 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. For those financial assets which are measured at fair value, its fair value is determined in the manner described in Note 29. 1) Financial assets All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. The Group 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.
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- 20 - a) Financial assets at FVTPL The Group’s financial assets mandatorily classified as at FVTPL are investments in equity instruments which are not designated as at FVTOCI, it was 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. b) Financial assets at amortized cost If the financial assets, which are invested by the Group, are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are subsequently measured at amortized cost. Subsequent to initial recognition, financial assets 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. On derecognition, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is 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 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. c) Investments in debt instruments at FVTOCI Debt instruments that meet the following conditions are subsequently measured at FVTOCI: i. The debt instrument is held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of such financial assets; and ii. The contractual terms of the debt instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of. d) Investments in equity instruments at FVTOCI On initial recognition, the Group 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.
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- 21 - 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 Group’s right to receive the dividends is established, unless the dividends clearly represent a recovery of part of the cost of the investment. 2) Equity instruments Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs. Repurchase of the Group’s own equity instruments is recognized in and deducted directly from equity. No gain or loss is recognized in profit or loss on the purchase, sale, issuance or cancellation of the Group’s own equity instruments. 3) Financial liabilities Financial liabilities are measured at amortized cost using the effective interest method. When 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. l. Assessment of assets impairment 1) Property, plant and equipment, right-of-use asset, investment properties and intangible assets At the end of each reporting period, the Group reviews the carrying amounts of the above assets, 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. 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, cash-generating unit or assets related to contract costs 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, cash-generating unit or assets related to contract costs in prior years. A reversal of an impairment loss is recognized in profit or loss. 2) Investments accounted for using the equity method The entire carrying amount of an investment in associates (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.
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- 22 - 3) Goodwill A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently whenever there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods. 4) Financial assets and contract assets The Group assesses the impairment loss of financial assets at amortized cost (including trade receivables) and contract assets by expected credit losses on each balance sheet date. The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. If the credit risk on a financial instrument has not increased significantly, the Group 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. For internal credit risk management purposes, the Group considers the following situations as indication that a financial asset is in default: a) Internal or external information shows that the debtor is unlikely to pay its creditors. b) Financial asset is more than 120 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion. 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. m. Revenue recognition The Group identifies contracts with customers, allocates the transaction price to the performance obligations and recognizes revenue when performance obligations are satisfied. 1) Revenue from the sale of goods Revenue from sale of goods comes from sales of test instruments and other products. Revenue is recognized when the goods are delivered to the customer’s specific location or the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and bears the risks of obsolescence. Trade receivables are recognized concurrently. The transaction price received is recognized as a contract liability until the goods are delivered to the customer. The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.
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- 23 - 2) Revenue from the rendering of services Revenue from the rendering of services comes from wafer level test and development of cloud platform. The Group acquires enforceable right to payment for services rendered in accordance with customer contracts only upon completion of the services; thus, the Group recognizes revenue from rendering of services upon completion of the contract. 3) Construction contract revenue For construction contracts to build customized production line, the Group recognizes revenue over time. The Group measures the progress on the basis of costs incurred relative to the total expected costs as there is a direct relationship between the costs incurred and the progress of satisfying the performance obligations. Contract assets are recognized during the construction and are reclassified to trade receivables at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the Group recognizes contract liabilities for the difference. Certain payment retained by the customer as specified in the contract is intended to ensure that the Group adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Group satisfies its performance obligations. n. Leases At the inception of a contract, the Group assesses whether the contract is, or contains, a lease. 1) The Group as lessor 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. 2) The Group as lessee The Group 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 applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms. Right-of-use assets and lease liabilities are presented on a separate line in the balance sheets. Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities. Right-of-use assets are subsequently measured at cost less accumulated depreciation and adjusted for any remeasurement of the lease liabilities. 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 Group uses the lessee’s incremental borrowing rate. 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 or others, the Group 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.
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- 24 - For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Group recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor, and adjusts the off-market terms to measure the sale proceeds at fair value. If the transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, it is accounted for as a financing transaction. o. 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 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 represents the actual deficit in the Group’s defined benefit plan. p. Share-based payment arrangements Employee share options and restricted shares for employees granted to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The fair value at the grant date of the employee share options and restricted shares for employees is expensed on a straight-line basis over the vesting period, based on the Group’s best estimate of the number of the shares or options that are expected to ultimately vest, with a corresponding increase in capital surplus - employee share options and other equity - unearned employee benefits. The expense is recognized in full at the grant date if the grants are vested immediately. When restricted shares for employees are issued, other equity - unearned employee benefits is recognized on the grant date, with a corresponding increase in capital surplus - restricted shares for employees. If restricted shares for employees are granted for consideration and the considerations received should be returned if employees resign in the vesting period, payables are continuously measured based on its estimated turnover rate for those granted before October 10, 2024 in accordance with the Q&A issued by the FSC. Dividends paid to employees on restricted shares that do not need to be returned if employees resign in the vesting period are recognized as expenses when the dividends are declared with a corresponding adjustment in retained earnings and capital surplus - restricted shares for employees. At the end of each reporting period, the Group revises its estimate of the number of employee share options and restricted shares for employees expected to vest. The impact of the revision of the original estimates is recognized in profit or loss such that the cumulative expenses reflect the revised estimate, with a corresponding adjustment to capital surplus - employee share options and capital surplus - restricted shares for employees.
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- 25 - q. Taxation Current and deferred taxes are recognized in profit or loss as income tax expense. 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. 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, associates and interests in joint ventures, except where the Group 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 they 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 based on the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. 5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY In the application of the Group’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.
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- 26 - The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised if the revision affects only that period or in the period of the revision and future periods if the revisions affect both current and future periods. Based on the assessment of the Group’s management, the accounting policies, estimates, and assumptions adopted by the Group have not been subject to material accounting judgments, estimates and assumptions uncertainty. 6. CASH AND CASH EQUIVALENTS December 31 2024 2023 Cash on hand $ 3,203 $ 3,620 Checking accounts and demand deposits 3,547,992 2,752,683 Cash equivalents - time deposits 548,028 1,375,958 $ 4,099,223 $ 4,132,261 7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS December 31 2024 2023 Mandatorily at FVTPL - current Domestic listed shares $ 4,993 $ 5,205 Domestic unlisted shares 71,584 75,400 Open-ended beneficiary certificates 385,164 250,743 $ 461,741 $ 331,348 Mandatorily at FVTPL - non-current Open-ended beneficiary certificates $ 2,102 $ 4,205 Convertible bonds 78,428 - $ 80,530 $ 4,205 8. FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME December 31 2024 2023 Investments in debt instruments - current Foreign government bonds $ 73,778 $ 74,506 (Continued)
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- 27 - December 31 2024 2023 Investments in equity instruments - non-current Domestic listed ordinary shares and emerging market shares $ 999,100 $ 963,936 Domestic unlisted ordinary shares 183,867 145,201 Foreign unlisted ordinary shares 64,293 131,751 $ 1,247,260 $ 1,240,888 (Concluded) These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic purposes. Refer to Table 3 for the detailed information. 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 Group’s strategy of holding these investments for long-term purposes. 9. FINANCIAL ASSETS MEASURED AT AMORTIZED COST December 31 2024 2023 Current Time deposits with maturities of more than 3 months $ 246,879 $ 256,077 Pledged deposits (Note 31) 118 2 Repurchase agreements collateralized by bills 158,563 - $ 405,560 $ 256,079 Non-current Time deposits with maturities of more than 3 months $ 213,438 $ 136,330 Pledged deposits (Note 31) 5,988 5,658 Restricted accounts 16,393 - $ 235,819 $ 141,988 10. NOTES RECEIVABLE AND TRADE RECEIVABLES December 31 2024 2023 Gross carrying amount at amortized cost - unrelated parties $ 6,765,210 $ 5,991,662 Less: Allowance for impairment loss (705,238) (653,829) 6,059,972 5,337,833 Gross carrying amount at amortized cost - related parties 10,258 7,143 $ 6,070,230 $ 5,344,976 The average credit period for sales of goods is 60 to 120 days from the date. Before accepting any new customer, the Group uses the bank’s credit investigation or external credit scoring system to assess the potential customer’s credit quality and defines credit limits by customer. Management will review the credit limit and rating of customers as needed.
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- 28 - The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated by reference to the past default experience and the current financial position, in which the debtors operate. As the Group’s historical credit loss experience does not show other factors that matter significantly, the expected credit loss rate is based on the past due status of trade receivables. The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group 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 aging schedule of notes receivable and trade receivables based on the past due days was as follows: December 31 2024 2023 Not past due $ 4,342,402 $ 3,355,927 Past due 1-60 days 737,348 1,142,053 Past due 61-180 days 388,810 706,637 Past due 181-365 days 519,618 116,423 Past due over 365 days 777,032 670,622 $ 6,765,210 $ 5,991,662 The movements of the loss allowance of notes receivable and trade receivables were as follows: For the Year Ended December 31 2024 2023 Balance at January 1 $ 653,829 $ 686,263 Add: Amounts recovered 7 - Net remeasurement of loss allowance 46,870 13,614 Less: Amounts written off - (44,630) Foreign exchange gains and losses 4,532 (1,418) Balance at December 31 $ 705,238 $ 653,829 11. INVENTORIES December 31 2024 2023 Finished goods $ 1,499,118 $ 1,200,771 Semi-finished products 542,312 576,425 Work in process 1,616,167 1,178,859 Raw materials 1,734,511 1,607,928 Inventory in transit 66,376 111,387 $ 5,458,484 $ 4,675,370 The cost of inventories recognized as cost of goods sold for the years ended December 31, 2024 and 2023 was $7,707,348 thousand and $6,531,307 thousand, respectively. The cost of goods sold included the reversal of inventory write-downs of $35,254 thousand and the inventory write-downs of $36,296 thousand, respectively.
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- 29 - 12. SUBSIDIARIES Subsidiaries included in the consolidated financial statements: Percentage of Ownership as of December 31 Investor Investee Business 2024 2023 Remark The Corporation Neworld Electronics Limited Sale and maintenance of electronic test instruments, etc. 100.0 100.0 Mas Automation Corp. Design, manufacturing, installment and testing of automated factory conveyor systems 100.0 100.0 Chroma ATE Inc. Sale and maintenance of electronic test instruments, etc. 100.0 100.0 Chroma Systems Solutions, Inc. Sale and maintenance of electronic test instruments, etc. 30.0 25.0 Note 1 Chroma ATE Europe B.V. Sale and maintenance of electronic test instruments, etc. 100.0 100.0 Chroma Germany GmbH Sale and maintenance of electronic test instruments, etc. 100.0 - Note 2 Chroma Japan Corp. Sale and maintenance of electronic test instruments, etc. 100.0 100.0 CHI Incorporation Ltd. Test of inductance, capacitance and resistance and sale of parts 100.0 100.0 Chen Hwa Technology Inc. Test of inductance, capacitance and resistance and sale of parts 100.0 100.0 San Eagle Development Corp. Investment 100.0 100.0 Sensational Holdings Ltd. Investment 100.0 100.0 Deep Red Holding Co., Ltd. Investment 100.0 100.0 Testar Electronics Corporation Testing of LED 67.2 67.2 Adivic Technology Co., Ltd. Sale and research of RF device 83.7 83.7 Note 3 Chroma Investment Co., Ltd. Investment 100.0 100.0 Quantel Private Ltd. Sale and maintenance of test instruments, etc. 60.0 60.0 EVT Technology Co., Ltd. Manufacturing of motorcycles and its parts 85.6 85.6 Innovative Nanotech Incorporated Monitoring instruments of nanoparticles 67.2 67.2 Touch Cloud Inc. Development of cloud platform and internet of things systems 83.1 83.1 Environmental Stress Systems, Inc. Sale of thermal platform systems - 100.0 Note 4 Neworld Electronics Limited Chroma Electronics (Shenzhen) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 100.0 100.0 Chroma Electronics (Shanghai) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 100.0 100.0 Chroma ATE Inc. Chroma Systems Solutions, Inc. Sale and maintenance of electronic test instruments, etc. 50.0 50.0 Note 1 Chen Hwa Technology Inc. Chroma (Shanghai) Trading Co., Ltd. International and transit trading, commercial simple processing and commercial consulting services, etc. 100.0 100.0 CHI Incorporation Ltd. Chroma ATE (Suzhou) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 100.0 100.0 San Eagle Development Corp. Wei Kuang Mech. Eng. Inc. Investment 100.0 100.0 Wei Kuang Mech. Eng. Inc. Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Sale and maintenance of electronic equipment and factory conveyor systems 100.0 100.0 Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Sale and maintenance of electronic equipment and factory conveyor systems 100.0 100.0 Deep Red Holdings Co., Ltd. Sajet System Technology (Suzhou) Co., Ltd. Research, development and design of computer network security systems and information management 100.0 100.0 Quantel Private Ltd. Quantel Technologies India Private Ltd. Sale and maintenance of test instruments, etc. 100.0 100.0 Quantel Global Vietnam Co., Ltd. Sale and maintenance of test instruments, etc. 100.0 100.0 Quantel Global Sdn. Bhd. Sale and maintenance of test instruments, etc. 100.0 100.0 Quantel Global Philippines Corporation Sale and maintenance of test instruments, etc. 100.0 100.0 Quantel Global Company Limited Sale and maintenance of test instruments, etc. 100.0 99.9 PT Quantel Sale and maintenance of test instruments, etc. 100.0 - Note 5 Chroma ATE Europe B.V. Chroma Germany GmbH Sale and maintenance of electronic test instruments, etc. - 100.0 Note 2 Chroma Investment Co., Ltd. Testar Electronics Corporation Testing of LED 15.0 15.0 Chroma Electronics (Shenzhen) Co., Ltd. Chroma ATE (Dongguan) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 100.0 100.0 Note 6 Chroma Electronics (Shanghai) Co., Ltd. Smartrise Semiconductor (Shanghai) Co., Ltd. Sales of semiconductor equipment 100.0 - Note 6 Chroma ATE (Suzhou) Co., Ltd. Chroma ATE (Xiamen) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 100.0 - Note 6 Note 1: In June 2024, the Corporation acquired a 5% equity interest in Chroma Systems Solutions Inc. for US$8,095 thousand. As a result, the Corporation and its subsidiary, Chroma ATE Inc., jointly increased total equity interest in Chroma Systems Solutions Inc. from 75% to 80%. The above transactions were accounted for as equity transactions since the Group did not change the control over the subsidiary. The difference of $(206,011) thousand from the equity transaction has been adjusted against retained earnings.
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- 30 - Note 2: The Corporation acquired a 100% equity interest in Chroma Germany GmbH from Chroma ATE Europe B.V. in January 2024 for a consideration of €849 thousand. The transaction was a business reorganization under common control. Note 3: For operational needs, the Corporation’s subsidiary, Adivic Technology Co., Ltd., increased its working capital by $100,000 thousand in May 2023. The Corporation’s equity interest in Adivic Technology Co. increased from 74.1% to 83.7% after the cash injection. Note 4: The Corporation’s subsidiary, Environmental Stress Systems, Inc., was liquidated in December 2024. Note 5: In November 2024, the Corporation’s subsidiary, Quantel Private Ltd., subscribed for all additional new shares of PT Quantel through participating in issuance for cash of $18,193 thousand. Refer to Note 27 for the related information. Note 6: Considering future product strategies and the enhancement of product competitiveness, the Corporation’s subsidiary established Chroma ATE (Dongguan) Co., Ltd. in January 2023, Smartrise Semiconductor (Shanghai) Co., Ltd., and Chroma ATE (Xiamen) Co., Ltd. in September 2024, respectively. 13. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD December 31 2024 2023 Investments in associates $ 4,863,439 $ 4,251,293 Investments in joint ventures 12,566 13,765 $ 4,876,005 $ 4,265,058 a. Investments in associates December 31 2024 2023 Amount Percentage of Equity Interest (%) Amount Percentage of Equity Interest (%) Adlink Technology Inc. $ 218,572 6.2 $ 229,346 6.6 Dynascan Technology Corp. 258,894 27.3 226,637 27.3 Camtek Ltd. 4,385,973 17.2 3,795,310 17.4 $ 4,863,439 $ 4,251,293 For the Year Ended December 31 2024 2023 The Group’s share of: Net profit $ 669,779 $ 438,713 Other comprehensive income (loss) 287,816 (4,386) Total comprehensive income (loss) for the year $ 957,595 $ 434,327
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- 31 - Fair values (Level 1) of investments in associates with available published price quotations are summarized as follows: December 31 Name of Associate 2024 2023 Adlink Technology Inc. $ 1,037,047 $ 883,143 Camtek Ltd. $ 20,700,929 $ 16,653,593 The Group is able to exercise significant influence over Adlink Technology Inc. although the percentage of shares held is less than 20%. Therefore, the Group accounted for Adlink Technology Inc. as an associate. Although the Group’s equity interest in Camtek Ltd. is less than 20%, after assessing the Corporation’s number of seats in the board of directors of Camtek Ltd., it still has a significant influence; therefore, Camtek Ltd. is accounted for as an associate. Refer to Table 7, for the nature of activities, principal place of business and country of incorporation of the associates. Investments accounted for using the equity method and the Group's share of profit or loss and other comprehensive income from consolidated subsidiaries are audited by other auditors in the financial statements of Camtek Ltd. Additionally, the financial statements of Adlink Technology Inc. and Dynascan Technology Corp. are recognized based on the financial statements prepared by the company. However, the Group's management believes that the financial statements of the aforementioned investee companies have not yet been audited by auditors, and thus are unlikely to have a significant impact. b. Investments in joint ventures December 31 2024 2023 Amount Percentage of Equity Interest (%) Amount Percentage of Equity Interest (%) Chih Ho Shun Development Co., Ltd. $ 12,566 35.0 $ 13,765 35.0 Aggregate information of joint ventures that are not individually material: For the Year Ended December 31 2024 2023 The Group’s share of: Net loss $ (1,199) $ (1,143) Other comprehensive income (loss) - - Total comprehensive income (loss) for the year $ (1,199) $ (1,143) For the investment and development plan, “The Action Plan for Developing Land Surrounding the MRT Airport Station to Improve Civilians’ Life”, the board of directors resolved to invest jointly with Dynapack International Corporation and Heran Co., Ltd. to set up Chih Ho Shun Development Co., Ltd. (“Chih Ho Shun”) in February 2012. The Group invested for a 35% entity interest in Chih Ho Shun but did not have control over this investee.
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- 32 - Refer to Table 7, for the nature of activities, principal place of business and country of incorporation of the joint ventures. The investments in joint ventures accounted for using the equity method and the share of profit or loss and other comprehensive income of the investments for the years ended December 31, 2024 and 2023 were based on the joint ventures’ financial statements which have been audited. 14. PROPERTY, PLANT AND EQUIPMENT Land Buildings Machinery Office Equipment Total Cost Balance, January 1, 2023 $ 1,754,511 $ 5,205,627 $ 851,100 $ 1,814,651 $ 9,625,889 Additions - 439,278 48,113 58,533 545,924 Disposals - (653) (26,706) (60,271) (87,630) Reclassification - 40,161 22,300 115,853 178,314 Exchange differences (856) (12,485) (851) (7,530) (21,722) Balance, December 31, 2023 $ 1,753,655 $ 5,671,928 $ 893,956 $ 1,921,236 $ 10,240,775 Accumulated depreciation Balance, January 1, 2023 $ - $ 864,164 $ 618,327 $ 1,125,210 $ 2,607,701 Depreciation - 247,139 95,897 215,514 558,550 Disposals - (585) (26,145) (49,809) (76,539) Reclassification - 139 178 (11,200) (10,883) Exchange differences - (2,227) (544) (4,967) (7,738) Balance, December 31, 2023 $ - $ 1,108,630 $ 687,713 $ 1,274,748 $ 3,071,091 Carrying value at December 31, 2023 $ 1,753,655 $ 4,563,298 $ 206,243 $ 646,488 $ 7,169,684 Cost Balance, January 1, 2024 $ 1,753,655 $ 5,671,928 $ 893,956 $ 1,921,236 $ 10,240,775 Additions - 25,148 54,376 87,420 166,944 Disposals - (1,302) (58,975) (217,442) (277,719) Reclassification - 8,763 24,593 136,569 169,925 Acquisitions through business combinations - - - 505 505 Exchange differences 3,440 50,468 11,490 20,813 86,211 Balance, December 31, 2024 $ 1,757,095 $ 5,755,005 $ 925,440 $ 1,949,101 $ 10,386,641 Accumulated depreciation Balance, January 1, 2024 $ - $ 1,108,630 $ 687,713 $ 1,274,748 $ 3,071,091 Depreciation - 258,678 90,608 223,377 572,663 Disposals - (468) (56,049) (168,372) (224,889) Reclassification - - (22) (15,270) (15,292) Acquisitions through business combinations - - - 391 391 Exchange differences - 8,222 7,386 11,428 27,036 Balance, December 31, 2024 $ - $ 1,375,062 $ 729,636 $ 1,326,302 $ 3,431,000 Carrying value at December 31, 2024 $ 1,757,095 $ 4,379,943 $ 195,804 $ 622,799 $ 6,955,641
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- 33 - The above items of property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows: Buildings 1-51 years Machinery 1-10 years Office equipment 1-10 years Refer to Note 31 for property, plant and equipment that have been pledged to secure borrowings of the Group. 15. LEASE ARRANGEMENTS The Group’s important lease projects include lease land from other companies and government department for the use of the plants, warehouses and parking spaces, as well as leases of information systems cloud services, etc. The lease term is 2 to 10 years. The Group does not have bargain purchase options to acquire lease items at the end of lease terms. Refer to the consolidated balance sheet for the balance of right-of-use assets and lease liabilities of lease arrangement as of balance sheet date. Other significant lease related information are as follows: For the Year Ended December 31 2024 2023 Additions to right-of-use assets $ 193,571 $ 102,726 Depreciation charge for right-of-use assets $ 172,129 $ 163,896 Total cash outflow for leases $ 329,978 $ 289,253 16. INVESTMENT PROPERTIES December 31 2024 2023 Land $ 2,478,333 $ 2,478,333 The Group acquired the land ownership certificates of the investment and development plan, “The Action Plan of Developing Land Surrounding the Airport MRT Station to Improve Civilian’s Life” in the third quarter of 2018, part of the land was co-constructed with Fu Yu Construction to build a joint building project, and part of it has not yet been decided, both of the above land were classified as investment properties. The determination of fair value was performed by independent qualified professional valuers, and the fair value was measured by using Level 3 inputs. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. The significant unobservable inputs used include discount rates and the fair value as appraised. December 31 2024 2023 Fair value $ 10,742,472 $ 10,558,298
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- 34 - In the third quarter of 2019, the Group entered into a joint building contract with Fu Yu Construction Co., Ltd. (Fu Yu Construction) to jointly build a building located at No. 61-0 and No. 61-1, Lejie section, Guishan District, Taoyuan City. The construction project adopts a jointly constructed manner. The Group provided the land, and Fu Yu Construction provided fund to construct. The area will be distributed to the Group and Fu Yu Construction for 47% and 53%, respectively. According to the joint building contract, Fu Yu Construction should pay $20,000 thousand (recognized as guarantee deposit received) and two guaranteed notes with a denomination of $120,000 thousand to the Group when signing the contract. An additional $20,000 thousand guarantee deposit should be paid within five business days after the building construction registration is approved and within five business days after the approval of underground bottom plate inspection. The joint building project started in the fourth quarter of 2020. According to the progress of the construction project, the Group returned two guaranteed notes with a denomination of $120,000 thousand and a guarantee deposit of $40,000 thousand to Fu Yu Construction in December 2023. 17. GOODWILL For the Year Ended December 31 2024 2023 Cost Balance, beginning of the year $ 189,400 $ 231,589 Impairment loss - (41,250) Net effect of exchange differences 3,744 (939) Balance, end of the year $ 193,144 $ 189,400 For assessing goodwill for impairment at the end of reporting period, the Group took value in use as basis for calculating the recoverable amount of goodwill. The Group used the cash flows of a five-year financial forecast as the basis for calculating value in use to reflect the specific risk of cash-generating units. 18. BORROWINGS a. Short-term borrowings December 31 2024 2023 Secured bank loans (Note 31) $ 76,100 $ 32,550 Unsecured bank loans 1,337,507 2,099,000 $ 1,413,607 $ 2,131,550 Interest rate (%) 0.50%-5.47% 1.57%-2.03%
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- 35 - b. Long-term borrowings December 31 2024 2023 Secured bank loans (Note 31) $ 111,906 $ 109,079 Unsecured bank loans 2,000,000 885,000 2,111,906 994,079 Less: Current portions 3,828 4,244 Long-term borrowings $ 2,108,078 $ 989,835 Secured bank loans Final repayment period April 2025 to June 2031 April 2025 to June 2031 Interest rate (%) 2.43%-3.50% 2.25%-3.50% Unsecured bank loans Final maturity date April 2029 December 2028 Interest rate (%) 1.34%-1.53% 1.22%-2.10% 19. OTHER PAYABLES December 31 2024 2023 Salaries and bonuses $ 774,612 $ 663,235 Compensation of employees 828,252 550,353 Remuneration of directors 17,200 13,685 Others 416,790 560,763 $ 2,036,854 $ 1,788,036 20. RETIREMENT BENEFIT PLANS a. Defined contribution plans The Corporation and its subsidiaries in the ROC adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees’ individual pension accounts at 6% of monthly salaries and wages. Employees of the Group’s subsidiaries in the foreign are under the retirement benefit plans operated by their respective local governments. Subsidiaries have to contribute amounts at certain percentages of salaries to the retirement benefit plans to fund the benefits. The only obligation of the Group with respect to the retirement benefit plan is to make the specified contributions.
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- 36 - b. Defined benefit plans The defined benefit plans adopted by the Corporation and its subsidiaries, Adivic Technology Co., Ltd. in accordance with the Labor Standard Law is operated by the government of the ROC. Pension benefits are calculated on the basis of length of service and average monthly salaries of the 6 months before retirement. The Corporation and its subsidiaries mentioned above contribute amount equal to 4% 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 year, the Corporation and its subsidiaries assess 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 Corporation and its subsidiaries are 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 Group has no right to influence the investment policy and strategy. The amounts included in the consolidated balance sheets in respect of the Group’s defined benefit plans were as follows: December 31 2024 2023 Present value of defined benefit obligation $ 562,312 $ 597,604 Fair value of plan assets (487,864) (448,780) 74,448 148,824 Net defined benefit assets (recognized in other non-current assets) 5,139 4,411 Net defined benefit liabilities $ 79,587 $ 153,235 Movements in net defined benefit liabilities were as follows: Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Liabilities Balance at January 1, 2023 $ 568,088 $ (413,959) $ 154,129 Current service cost 3,093 - 3,093 Net interest expense (income) 7,713 (5,884) 1,829 Recognized in profit or loss 10,806 (5,884) 4,922 Remeasurement Return on plan assets (excluding amounts included in net interest) - (2,967) (2,967) Actuarial loss Changes in financial assumptions 7,128 - 7,128 Experience adjustments 15,642 - 15,642 Recognized in other comprehensive income 22,770 (2,967) 19,803 Contributions from employer - (30,030) (30,030) Benefits paid (4,060) 4,060 - Balance at December 31, 2023 597,604 (448,780) 148,824 Current service cost 3,161 - 3,161 Net interest expense (income) 7,243 (5,651) 1,592 Recognized in profit or loss 10,404 (5,651) 4,753 (Continued)
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- 37 - Present Value of the Defined Benefit Obligation Fair Value of the Plan Assets Net Defined Benefit Liabilities Remeasurement Return on plan assets (excluding amounts included in net interest) $ - $ (38,704) $ (38,704) Actuarial loss (gain) Changes in financial assumptions (13,353) - (13,353) Experience adjustments 2,928 - 2,928 Recognized in other comprehensive income (10,425) (38,704) (49,129) Contributions from employer - (30,000) (30,000) Benefits paid (35,271) 35,271 - Balance at December 31, 2024 $ 562,312 $ (487,864) $ 74,448 (Concluded) Through the defined benefit plans under the Labor Standards Act, the Group 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 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: December 31 2024 2023 Discount rate(s) 1.38%-1.50% 1.00%-1.25% Expected rate(s) of salary increase 2.50%-3.50% 2.50%-3.50% If possible reasonable changes in each of the significant actuarial assumptions occur and all other assumptions remain constant, the present value of the defined benefit obligation would increase (decrease) as follows: December 31 2024 2023 Discount rate(s) 0.25% increase $ (12,724) $ (14,134) 0.25% decrease $ 13,152 $ 14,632 Expected rate(s) of salary increase 0.25% increase $ 12,689 $ 14,086 0.25% decrease $ (12,344) $ (13,684)
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- 38 - The sensitivity analysis presented above may not be representative of the actual changes in the present value of the defined benefit obligation as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated. December 31 2024 2023 Expected contributions to the plan for the next year $ 30,000 $ 30,030 Average duration of the defined benefit obligation 9.6 years 7.5-10.0 years 21. EQUITY a. Ordinary share capital December 31 2024 2023 Number of shares authorized (in thousands) 500,000 500,000 Shares authorized $ 5,000,000 $ 5,000,000 Number of shares issued and fully paid (in thousands) 425,322 425,364 Shares issued $ 4,253,220 $ 4,253,644 The authorized shares include 30,000 thousand shares allocated for the exercise of employee share options. The change in the Corporation’s share capital is mainly due to the cancellation of employee restricted shares. b. Capital surplus December 31 2024 2023 May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note 1) Additional paid-in capital $ 3,535,055 $ 3,536,183 Treasury share transactions 276,371 265,451 Consolidation excess 146,976 146,976 May be used to offset a deficit only Share of changes in capital surplus of associates or joint ventures 440,039 400,780 Changes in percentage of ownership interests in subsidiaries (Note 2) 1,624 - Unclaimed dividends 353 - May not be used for any purpose Employee restricted shares 196,984 195,480 $ 4,597,402 $ 4,544,870 Note 1: Such capital surplus may be used to offset a deficit; in addition, when the Corporation has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Corporation’s capital surplus and once a year).
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- 39 - Note 2: Such capital surplus arises from the effect of changes in ownership interests in subsidiaries resulting from changes in capital surplus of subsidiaries accounted for using the equity method. c. Retained earnings and dividends policy Under the dividends policy as set forth in the Corporation’s Articles of Incorporation (the “Articles”), where the Corporation 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, the Corporation is not required to set aside legal reserve where the legal reserve amounts to the total authorized capital and setting aside or reversing 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 Corporation’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 abovementioned distribution of earnings, the board of directors was authorized to adopt a special resolution to distribute dividends and bonuses in cash and a report of such distribution should be submitted in the shareholders’ meeting. For the policies on distribution of employees’ compensation of employees and remuneration to directors, refer to d. employees’ compensation of employees and remuneration of directors in Note 23 (c). Taking into account future capital expenditure requirements and its cash position, the total of cash dividends paid in any given year may not be less than 20% of total dividends distributed in that year. The final amount, type and percentage of the cash dividends and share dividends are subject to actual earnings and capital requirements of the Corporation in a particular year. The legal reserve may be used to offset deficit. If the Corporation has no deficit and the legal reserve has exceeded 25% of the Corporation’s paid-in capital, the excess may be transferred to capital or distributed in cash. When a special reserve is appropriated for cumulative net debit balance reserves from prior period, the special reserve is only appropriated from the prior unappropriated earnings. The appropriations of earnings for 2023 and 2022 were as follows: Appropriation of Earnings Dividend Per Share (NT$) For Fiscal Year 2023 For Fiscal Year 2022 For Fiscal Year 2023 For Fiscal Year 2022 Legal reserve $ 394,685 $ 509,867 Cash dividends 2,807,405 3,403,176 $ 6.6 $ 8.0 The above appropriations for cash dividends were resolved by the Corporation’s board of directors on February 26, 2024 and February 23, 2023, respectively; the other proposed appropriations were resolved by the shareholders in their meeting on June 6, 2024 and June 9, 2023. The appropriations of earnings for 2024 had been proposed by the Corporation’s board of directors on February 24, 2025. The appropriations and dividends per share were as follows: Appropriation of Earnings Dividends Per Share (NT$) Legal reserve $ 513,142 Cash dividends 3,827,898 $ 9.0
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- 40 - The above appropriation for cash dividends has been resolved by the Corporation’s board of directors, and the rest is subject to the resolution of the shareholders in their meeting to be held on June 10, 2025. d. Special reserve If a special reserve appropriated on the first-time adoption of IFRS Accounting Standards relates to exchange differences on translation of the financial statements of foreign operations (including the subsidiaries of the Corporation), the special reserve of $86,888 thousand will be reversed on a proportionate basis according to the Corporation’s disposal of foreign operations; on the Corporation’s loss of significant influence, however, the entire special reserve will be reversed. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRS Accounting Standards. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and is thereafter distributed. e. Treasury shares The Corporation’s shares held by its subsidiary, Chroma Investment Co., Ltd., at the end of the reporting periods were as follows: December 31 2024 2023 Number of shares held (in thousands shares) 1,655 1,655 Carrying amount $ 30,868 $ 30,868 Market price $ 676,723 $ 352,425 Under the Securities and Exchange Act, the Corporation shall neither pledge treasury shares nor exercise shareholders’ rights on these shares, such as the rights to dividends and to vote. The subsidiaries holding treasury shares, however, retain shareholders’ rights, except the rights to participate in any share issuance for cash and to vote. 22. REVENUE For the Year Ended December 31 2024 2023 Revenue from contracts with customers Revenue from sale of goods $ 20,418,424 $ 17,787,091 Construction contract revenue 872,293 658,131 Other revenue 313,120 230,821 $ 21,603,837 $ 18,676,043 a. Contract balances December 31 2024 2023 Contract assets - construction contract $ 272,090 $ 543,318 Contract liabilities - sale of goods $ 698,054 $ 1,135,883 Contract liabilities - construction contract 79,853 54,578 $ 777,907 $ 1,190,461
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- 41 - The changes in the balance of contract liabilities primarily result from the timing difference between the Group’s satisfaction of performance obligations and the respective customer’s payment. b. Disaggregation of revenue Refer to Note 35 for the information on disaggregation of revenue. 23. ADDITIONAL INFORMATION ON EXPENSES a. Depreciation and amortization For the Year Ended December 31 2024 2023 An analysis of depreciation by function Operating costs $ 248,546 $ 256,680 Operating expenses 496,246 465,766 $ 744,792 $ 722,446 An analysis of amortization by function Operating costs $ 3,274 $ 3,261 Operating expenses 27,096 20,887 $ 30,370 $ 24,148 b. Employee benefits expense For the Year Ended December 31 2024 2023 Short-term benefits $ 5,556,110 $ 4,639,783 Share-based payments (Note 26) 61,997 91,060 Post-employment benefits Defined contribution plans 120,786 112,079 Defined benefit plans (Note 20) 4,753 4,922 Other employee benefits 114,806 94,576 $ 5,858,452 $ 4,942,420 An analysis of employee benefits expense by function Operating costs $ 810,502 $ 749,092 Operating expenses 5,047,950 4,193,328 $ 5,848,452 $ 4,942,420
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- 42 - c. Compensation of employees and remuneration of directors According to the Corporation’s Articles, the Corporation accrues compensation of employees and remuneration of directors at the rates of 5%-20% and no higher than 1.5%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors. The compensation of employees and remuneration of directors for the years ended December 31, 2024 and 2023, which were approved by the Corporation’s board of directors on February 24, 2025 and February 26, 2024, respectively, are as follows: For the Year Ended December 31 2024 2023 Amount Rate % Amount Rate % Compensation of employees $ 790,000 11.14 $ 336,427 6.65 Remuneration of directors 15,000 0.21 13,685 0.27 If there is a change in the amounts after the annual consolidated financial statements were authorized for issue, the differences are recorded as a change in accounting estimate. There is no difference between the actual amounts of the compensation of employee and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2023 and 2022. Information on the compensation of employee and remuneration of directors resolved by the Corporation’s board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange. 24. INCOME TAXES a. Major components of income tax expense recognized in profit or loss For the Year Ended December 31 2024 2023 Current tax In respect of the current year $ 1,246,918 $ 1,053,841 Income tax on unappropriated earnings - 19,022 Adjustments for prior years (2,948) (93,259) 1,243,970 979,604 Deferred tax In respect of the current year 64,480 90,805 Income tax expense recognized in profit or loss $ 1,308,450 $ 1,070,409
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- 43 - A reconciliation of accounting profit and income tax expense is as follows: For the Year Ended December 31 2024 2023 Profit before tax $ 6,708,563 $ 5,166,083 Income tax expense calculated at the statutory rate $ 1,560,179 $ 1,303,367 Adjustment items in determining taxable income Tax-exempt income (62,852) (6,079) Others (12,826) (39,617) Income tax on unappropriated earnings - 19,022 Unrecognized deductible differences Loss carryforward 24,375 28,767 Deductible temporary differences (218) 81 Investment credits (197,260) (142,302) Adjustments for prior years’ tax (2,948) (93,259) Others - 429 Income tax expense recognized in profit or loss $ 1,308,450 $ 1,070,409 b. Deferred tax assets and liabilities For the year ended December 31, 2024 Deferred Tax Assets Opening Balance Recognized in Profit or Loss Exchange Differences and Other Closing Balance Unrealized intercompany gain $ 232,451 $ (1,156) $ - $ 231,295 Loss carry forwards 37,363 (25,047) 1,478 13,794 Inventory reserve 63,765 (5,339) 57 58,483 Allowance for impaired receivables 31,688 9,466 305 41,459 Tax credit 36,319 (9,386) 2,264 29,197 Unrealized exchange loss 16,397 (16,474) 77 - Others 6,585 5,255 353 12,193 $ 424,568 $ (42,681) $ 4,534 $ 386,421 Deferred Tax Liabilities Opening Balance Recognized in Profit or Loss Exchange Differences and Other Closing Balance Unappropriated earnings of foreign subsidiaries $ 1,098,347 $ 350 $ - $ 1,098,697 Goodwill 53,507 - 976 54,483 Unrealized exchange gain - 10,608 - 10,608 Others 33,787 10,841 1,628 46,256 $ 1,185,641 $ 21,799 $ 2,604 $ 1,210,044
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- 44 - For the year ended December 31, 2023 Deferred Tax Assets Opening Balance Recognized in Profit or Loss Exchange Differences and Other Closing Balance Unrealized intercompany gain $ 193,110 $ 39,341 $ - $ 232,451 Loss carry forwards 27,017 10,502 (156) 37,363 Inventory reserve 59,905 3,901 (41) 63,765 Allowance for impaired receivables 31,337 351 - 31,688 Tax credit 37,045 (730) 4 36,319 Unrealized exchange loss 1,839 14,603 (45) 16,397 Others 5,045 1,568 (28) 6,585 $ 355,298 $ 69,536 $ (266) $ 424,568 Deferred Tax Liabilities Opening Balance Recognized in Profit or Loss Exchange Differences and Other Closing Balance Unappropriated earnings of foreign subsidiaries $ 943,272 $ 155,075 $ - $ 1,098,347 Goodwill 52,857 651 (1) 53,507 Others 29,158 4,615 14 33,787 $ 1,025,287 $ 160,341 $ 13 $ 1,185,641 c. Information on unused loss carryforwards of subsidiaries As of December 31, 2024, investment tax credits comprised: December 31 2024 2023 Unrecognized as deferred tax assets Due in 2039 $ 780,708 $ 751,453 Recognized as deferred tax assets Due in 2043 65,685 166,100 $ 846,393 $ 917,553 d. Income tax assessments The Corporation’s income tax returns through 2021 have been assessed by the tax authorities. The income tax returns of the Corporation’s domestic subsidiaries through 2022 have been assessed by the tax authorities.
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- 45 - 25. EARNINGS PER SHARE The earnings and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows: Net Profit for the Year For the Year Ended December 31 2024 2023 Earnings used in the computation of basic and diluted earnings per share $ 5,264,251 $ 3,979,247 Shares (In Thousands of Shares) For the Year Ended December 31 2024 2023 Weighted average number of ordinary shares used in the computation of basic earnings per share 421,385 420,975 Effect of potentially dilutive ordinary shares Compensation of employees 2,139 2,127 Employee restricted shares 1,623 1,675 Weighted average number of ordinary shares used in the computation of diluted earnings per share 425,147 424,777 If the Group offered to settle compensation paid to employees in cash or shares, the Group assumed the entire amount of the compensation would be settled in shares, and the resulting potential shares were included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year. 26. SHARE-BASED PAYMENT ARRANGEMENTS a. Employee share option plan of subsidiaries The qualified employees of Touch Cloud Inc. were granted 470 thousand units of share options in April 2020, each option entitled the holders to subscribe for one common share of Touch Cloud Inc. upon exercised. The options granted are valid for 5 years and exercisable at certain percentages from the second anniversary of the grant date. The exercise price is $10 per share according to the terms of the employee share option plan. For the Year Ended December 31 2024 2023 Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) Number of Options (In Thousands) Weighted- Average Exercise Price (NT$) Balance at January 1 285 $ 10.0 320 $ 10.0 Options forfeited - - (35) 10.0 Balance at December 31 285 10.0 285 10.0 Options exercisable, end of the year 285 200
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- 46 - Compensation costs recognized were $5 thousand and $1 thousand for the years ended December 31, 2024 and 2023, respectively. b. Restricted shares for employees In the shareholders’ meeting on June 9, 2022, the shareholders approved a Restricted Share Unit Plan (“RSU” Plan) for employees with a total amount of $30,000 thousand, consisting of 3,000 thousand shares with issuance price of $40 dollars per share. It can be issued at one time or several times depending on the circumstance. The RSU Plan was approved under Rule No. 1110346852 issued by the FSC on June 20, 2022. The Group issued 2,960 thousand shares on July 1, 2022, the subscription date. The details of RSU Plan are as follows: 1) Employees who are granted RSUs, upon meeting the Corporation’s financial performance and personal performance indicators, are eligible to be vested 10, 20, 30 and 40 percent of the RSUs granted after 1, 2, 3 and 4 years of tenure after the subscription date, respectively. 2) The restrictions on the rights of the employees who are granted RSUs but have not met the vesting conditions are as follows: a) The employees are not eligible to sell, pledge, transfer, donate or to dispose any RSUs in any form. b) The employees holding RSUs are entitled to receive dividends and similar purchasing rights to ordinary shares during capital increase. Dividends from RSUs are not restricted during the vesting period and are appropriated to the employees’ personal account from trust account after the dividend distribution date. c) Before the restricted shares are vested to the employees, the right of attendance, proposal, speech, voting and other rights of shareholders are acted by the custodian. d) The RSUs should be delivered to trust custodians upon grant date. The employees cannot request for return in any manner before vesting conditions are met. e) Restrictions on employee rights during delivery of new shares to the Trust, the Corporation shall act as the exclusive agent of the employees and authorize the chairman of the board (including but not limited) in negotiating, signing, amending, extending, cancelling and terminating the Trust Deed and the delivery, use and disposal instructions of the Trust Property with the Stock Trust. 3) If an employee fails to meet the vesting conditions, the Corporation will recall or buy back and cancel the restricted shares at issued price. If an employee voluntarily resigns, retires, disabled or decease due to occupational hazards, dismissed, be transferred to another post, violates labor contracts or working protocols substantially or abandons restricted shares, related guidelines of RSU Plan will be followed accordingly. Information on outstanding employee restricted shares were as follows: For the Year Ended December 31 2024 2023 Balance at January 1 2,592 2,910 Shares vested (538) (285) Shares canceled (38) (33) Balance at December 31 2,016 2,592
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- 47 - Compensations costs recognized were $61,992 thousand and $91,059 thousand for the years ended December 31, 2024 and 2023, respectively. 27. BUSINESS COMBINATIONS a. Subsidiaries acquired The Group subscribed for all additional new shares of PT Quantel through participating in issuance for cash of $18,193 thousand, and acquired control over it. Therefore, it has been included in the consolidated entity starting from the date of acquiring control. b. Assets acquired and liabilities assumed at the date of acquisition PT Quantel Current assets Cash $ 18,877 Trade receivables 69 Other current assets 13 Non-current assets Property, plant and equipment, net (Note 14) 114 Current liabilities Account payable (60) Other payables (99) $ 18,914 c. Gain from bargain purchases on acquisition PT Quantel Consideration transferred $ 18,193 Less: Fair value of identifiable net assets acquired (18,914) Gain from bargain purchases on acquisition (classified as other income) $ (721) d. Net cash inflow on the acquisition of subsidiaries PT Quantel Consideration paid in cash $ (18,193) Less: Cash and cash equivalent balances acquired 18,877 Net cash inflow $ 684 28. CAPITAL MANAGEMENT The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to shareholders through the optimization of the debt and equity balance. The Group’s capital management aims to maintain the sufficiency of financial resources and the soundness of operating strategies to meet the needs for operating capital, capital expenditure, R&D expenses, debt handling, dividend disbursement, etc.
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- 48 - 29. FINANCIAL INSTRUMENTS a. Fair value of financial instruments not measured at fair value Management believes the carrying amounts of financial assets and financial liabilities not measured at fair value recognized in the consolidated financial statements approximate their fair values. b. Fair value of financial instruments measured at fair value on a recurring basis 1) Fair value hierarchy Level 1 Level 2 Level 3 Total December 31, 2024 Financial assets at FVTPL Domestic listed equity securities $ 4,993 $ - $ - $ 4,993 Domestic unlisted equity securities - - 71,584 71,584 Convertible bond - - 78,428 78,428 Open-ended beneficiary certificates 385,164 - 2,102 387,266 $ 390,157 $ - $ 152,114 $ 542,271 Financial assets at FVTOCI Investments in equity instruments Domestic listed ordinary shares and emerging markets shares $ 670,344 $ - $ 328,756 $ 999,100 Domestic unlisted equity securities - - 183,867 183,867 Foreign unlisted equity securities - - 64,293 64,293 $ 670,344 $ - $ 576,916 $ 1,247,260 Investments in debt instruments Foreign government bonds $ 73,778 $ - $ - $ 73,778 December 31, 2023 Financial assets at FVTPL Domestic listed equity securities $ 5,205 $ - $ - $ 5,205 Domestic unlisted equity securities - - 75,400 75,400 Open-ended beneficiary certificates 250,743 - 4,205 254,948 $ 255,948 $ - $ 79,605 $ 335,553 (Continued)
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- 49 - Level 1 Level 2 Level 3 Total Financial assets at FVTOCI Investments in equity instruments Domestic listed ordinary shares and emerging markets shares $ 378,403 $ - $ 585,533 $ 963,936 Domestic unlisted equity securities - - 145,201 145,201 Foreign unlisted equity securities - - 131,751 131,751 $ 378,403 $ - $ 862,485 $ 1,240,888 Investments in debt instruments Foreign government bonds $ 74,506 $ - $ - $ 74,506 (Concluded) There were no transfers between Levels 1 and 2 for the years ended December 31, 2024 and 2023. 2) Reconciliation of Level 3 fair value measurements of financial instruments For the year ended December 31, 2024 Financial Assets Financial Assets at FVTPL Financial Assets at FVTOCI Total Balance at January 1, 2024 $ 79,605 $ 862,485 $ 942,090 Purchases 95,830 47,580 143,410 Sales (31,610) (9,529) (41,139) Reclassification - 33,120 33,120 Transfers out of Level 3 - (98,806) (98,806) Reduction of capital cash return - (7,198) (7,198) Recognized in profit or loss 8,289 - 8,289 Recognized in other comprehensive income - (250,736) (250,736) Balance at December 31, 2024 $ 152,114 $ 576,916 $ 729,030 For the year ended December 31, 2023 Financial Assets Financial Assets at FVTPL Financial Assets at FVTOCI Total Balance at January 1, 2023 $ 122,465 $ 808,983 $ 931,448 Purchases - 81,990 81,990 Reduction of capital cash return - (10,151) (10,151) Recognized in profit or loss (42,860) - (42,860) Recognized in other comprehensive income - (18,337) (18,337) Balance at December 31, 2023 $ 79,605 $ 862,485 $ 942,090
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- 50 - 3) Valuation techniques and inputs applied for Level 3 fair value measurement a) The fair values of convertible bonds are determined using option pricing models where the significant unobservable input is share price volatility. An increase in the share price volatility used in isolation would result in an increase in the fair value. b) The fair values of domestic emerging market and unlisted equity securities, both domestically and internationally, as well as open-end beneficiary certificates, are determined using the asset approach and the market approach. Asset approach evaluates the total market value of individual asset and liability of the evaluated target, taking into account the risk factors (lack of marketability, etc.) to estimate the fair value. Market approach refers to the transaction prices in active market of the listed companies engaging in similar business, related price multiplier, transaction and information implied by the transaction price, to arrive at the fair value. c. Categories of financial instruments December 31 2024 2023 Financial assets Financial assets at FVTPL $ 542,271 $ 335,553 Financial assets at amortized cost (1) 11,044,868 9,989,061 Financial assets at FVTOCI Equity instruments 1,247,260 1,240,888 Debt instruments 73,778 74,506 Financial liabilities Financial liabilities at amortized cost (2) 8,689,251 7,552,481 1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, financial assets measured at amortized cost, notes receivable, trade receivables (including related parties), other receivables (classified as other current assets) and refundable deposits. 2) The balances include financial liabilities measured at amortized cost, which comprise short-term loans, notes payable (including related parties), trade payables (including related parties), other payables, long-term loans (including current portion) and guarantee deposits received. d. Financial risk management objectives and policies The Group’s major financial instruments consist of equity and debt investments, cash and cash equivalents, receivables, long-term and short-term borrowings and trade payables. The Group’s financial risk management pertains to financial risks relating to the operations of the Group, including currency risk, interest rate risk, credit risk and liquidity risk. The Group seeks to identify, evaluate and hedge against market uncertainties to lower the effect of market changes on the Group’s financial performance. The Group manages foreign exchange risk through setting up of foreign currency deposit bank accounts and through the use of foreign currency directly received from sale to pay for purchases in foreign currency to reduce the impact of foreign exchange fluctuation and to achieve a natural hedge effect. The Group actively observes the exchange rate information to fully control the foreign currency hedge.
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- 51 - 1) Market risk The Group’s activities expose it primarily to the financial risks of changes in exchange rates (see item (a) below), interest rates (see item (b) below) and price (see item (c) below). There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured. a) Foreign currency risk The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) at the end of the reporting period are set out in Note 33. Sensitivity analysis The Group was mainly exposed to the USD and RMB. Had the NTD strengthened by 5% against the relevant currency, the pre-tax profit would have decreased by $284,424 thousand and $200,811 thousand for the years ended December 31, 2024 and 2023, respectively. The 5% sensitivity rate is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency - denominated monetary items and their translation at period-end is adjusted for a 5% change in foreign-currency rates. b) Interest rate risk The Group is exposed to interest rate risk because entities in the Group borrow funds both at fixed and floating interest rates. The Group evaluates hedging activities regularly to align with interest rate views and defined risk appetite and ensures that the most cost-effective hedging strategies are applied. The carrying amounts of the financial assets and liabilities with exposure to interest rates at the end of the reporting period were as follows: December 31 2024 2023 Fair value interest rate risk Financial assets $ 1,189,407 $ 1,774,025 Financial liabilities 463,892 2,280,444 Cash flow interest rate risk Financial assets 3,217,258 2,382,441 Financial liabilities 3,410,607 1,182,550 Sensitivity analysis The sensitivity analysis below has been determined on the basis of the exposure to interest rates for non-derivative instruments at balance sheet dates. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the balance sheet dates was outstanding for the whole year. A 50-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.
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- 52 - If interest rates had been 50 basis points higher and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2024 and 2023 would decrease by $967 thousand and increase by $5,999 thousand, respectively, which was mainly attributable to the Group’s exposure to interest rates on its variable rate deposits and bank loans. c) Price risk The Group is exposed to equity price risks mainly arising from the following: i. Investments in financial assets at FVTOCI (mainly investments in domestic and foreign shares), which are held for strategic rather than trading purposes. The Group does not actively trade these investments. ii. Investments in financial assets at FVTPL (mainly investments in domestic and foreign open-ended beneficiary certificates and listed shares in Taiwan). The Group manages risk through holding various investment portfolios and having each equity investment to get prior approval from the Group’s management. Sensitivity analysis The sensitivity analysis below was determined based on the exposure to equity price risks at the end of the reporting period. If prices had been 5% higher, the pre-tax profit for the years ended December 31, 2024 and 2023 would have increased by $27,114 thousand and $16,778 thousand, respectively, as a result of the changes in fair values of financial assets at FVTPL, and the pre-tax other comprehensive income for the years ended December 31, 2024 and 2023 would have increased by $66,052 thousand and $65,770 thousand, respectively, as a result of the changes in fair values of financial assets at FVTOCI. 2) Credit risk Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. Trade receivables involve a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of trade receivables, including the evaluation of internal credits, historical transaction records, present economic circumstances, etc. which affect the customers’ payment ability. The credit risk of the Group’s trade receivables is mainly concentrated on specific customers in China. The Group had properly assessed the expected credit loss of relevant trade receivables. As of December 31, 2024 and 2023, the above trade receivables accounted for 9% and 10%, respectively, of the total trade receivables. The credit risk of bank deposits, fixed-income financial instruments and other financial instruments are evaluated, managed and controlled by the Group’s financial department. The Group’s exposure to credit risk was limited because the Group adopted a policy of only dealing with creditworthy counterparties.
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- 53 - 3) Liquidity risk The Group manages liquidity risk by managing and maintaining sufficient cash and cash equivalents to supply the Group’s demand and mitigate the effects of fluctuations in cash flow. The Group continuously monitors the use of credit lines and conformity to loan terms. The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2024 and 2023, the Group’s available unutilized bank loan facilities were $8,034,015 thousand and $6,772,820 thousand, respectively. Liquidity and interest risk tables for non-derivative financial liabilities The following tables detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities from the earliest date on which the Group can be required to pay. 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. December 31, 2024 Within 1 Year 1-5 Years More Than 5 Years Non-derivative financial liabilities Non-interest bearing $ 5,142,899 $ - $ - Fixed interest rate instruments 10,737 29,715 97,426 Floating interest rate instruments 1,442,281 2,062,560 - Lease liabilities 160,438 185,176 17,879 $ 6,756,355 $ 2,277,451 $ 115,305 December 31, 2023 Within 1 Year 1-5 Years More Than 5 Years Non-derivative financial liabilities Non-interest bearing $ 4,406,018 $ - $ - Fixed interest rate instruments 1,843,696 31,052 98,203 Floating interest rate instruments 346,147 884,788 - Lease liabilities 151,834 191,691 4,222 $ 6,747,695 $ 1,107,531 $ 102,425 After considering the financial position of the Group, management does not expect the banks will execute their rights of requiring the Group to repay the bank loans immediately. In addition, management believes the operating funds of the Corporation and subsidiaries are sufficient to meet cash flow demand; thus, liquidity risk is not considered significant. The Group’s operating funds are sufficient to meet its cash flow demand, as a result, the Group does not use its overdraft limit.
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- 54 - 30. TRANSACTIONS WITH RELATED PARTIES a. Related parties and relationships In addition to the related parties and its subsidiaries disclosed in Note 13, the other related parties are as follows: Related Party Relationship with the Group Mou Kuan Industry Co., Ltd. Other related party Taiwan Advanced Nanotech Inc. Other related party CycleBond Healthcare Consulting Inc. Other related party’s subsidiary Tian Zheng International Precision Machinery Co., Ltd. Other related party Tian Zheng International Precision Machinery Co., Ltd. (Dongguan) Other related party’s subsidiary Omnitek Technology Co., Ltd. Other related party’s subsidiary Master Machinery Technology Co., Ltd. Other related party’s subsidiary Tian Wei Laser Precision Machinery Co., Ltd. Other related party’s subsidiary Tian Zheng Holding Co., Ltd. Other related party’s subsidiary Prance Systems Technology Corporation Other related party TFBS Bioscience, Inc. Other related party Chroma Foundation Other related party Quantel Co., Ltd. Other related party Quantel Sdn. Bhd. Other related party Quantel Philippines Inc. Other related party PT Quantel Other related party (subsidiary since November 2024) Fred Joseph Sabatine Other related party Balances and transactions between the Corporation and its subsidiaries, which are related parties of the Corporation, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and its related parties are disclosed below. The related-party transactions were conducted under normal terms unless specified otherwise. b. Sales For the Year Ended December 31 Related Party Category/Name 2024 2023 Associates $ 34,860 $ 28,999 Other related parties 5,344 15,126 $ 40,204 $ 44,125 c. Purchases For the Year Ended December 31 Related Party Category/Name 2024 2023 Associates $ 18,281 $ 12,947 Other related parties 16,024 12,660 $ 34,305 $ 25,607
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- 55 - d. Receivables from related parties (excluding loans to related parties) December 31 Line Item Related Party Category/Name 2024 2023 Trade receivables - related Associates $ 9,499 $ 6,823 parties Other related parties 759 320 $ 10,258 $ 7,143 Outstanding trade receivables from related parties are unsecured. e. Payables to related parties (excluding loans from related parties) December 31 Line Item Related Party Category/Name 2024 2023 Notes payable - related parties Other related parties $ 4,024 $ 771 Trade payables - related Associates $ 7,717 $ 2,093 parties Other related parties 913 1,149 $ 8,630 $ 3,242 f. Acquisition of property, plant and equipment Purchase Price For the Year Ended December 31 Related Party Category/Name 2024 2023 Associates $ - $ 532 Other related parties 2,615 - $ 2,615 $ 532 g. Lease arrangements December 31 Line Item Related Party Category/Name 2024 2023 Lease liabilities Associates Adlink Technology Inc. $ 55,422 $ 99,341 Other related parties - 12,191 $ 55,422 $ 111,532 For the Year Ended December 31 Line Item Related Party Category/Name 2024 2023 Depreciation expense Associates $ 35,265 $ 35,265 Other related parties 11,481 11,481 $ 46,746 $ 46,746
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- 56 - h. Acquisitions of other assets Purchase Price Related Party For the Year Ended December 31 Category/Name Line Item 2024 2023 Fred Joseph Sabatine Investments accounted for using the equity method $ 262,439 $ - Refer to Note 12 for details on the Corporation’s acquisition of equity interests in a subsidiary. i. Compensation of key management personnel For the Year Ended December 31 2024 2023 Short-term employee benefits $ 260,165 $ 160,810 Post-employment benefits 2,983 3,093 Share-based payments 27,645 40,607 $ 290,793 $ 204,510 The remuneration of directors and key executives is determined by the remuneration committee based on the performance of individuals and market trends. 31. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY The assets pledged as collaterals for bank loans and product warranties were as follows: December 31 2024 2023 Property, plant and equipment, net $ 115,803 $ 116,292 Pledged deposits (classified as financial assets measured at amortized cost) 6,106 5,660 $ 121,909 $ 121,952 32. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS Chroma’s subsidiary, MAS Automation Corporation (“MAS”), entered into an Equipment Purchase Agreement (the “Agreement”) with LINCO Technology Co., Ltd. (“LINCO”) in 2017, in which MAS entrusted LINCO to manufacture automation equipment. However, during the delivery process, LINCO failed to provide several critical parts and refused to cooperate during the installation process. As a result, MAS claimed a delay penalty of approximately US$83,455 thousand against LINCO. In response, LINCO alleged that MAS had breached its payment obligation under the Agreement and filed a counterclaim against MAS in the Taiwan Taoyuan District Court on October 30, 2019, claiming for the payment of approximately US$8,240 thousand along with interest. The aforementioned case was pronounced by the Taoyuan District Court on May 30, 2023, with MAS losing the lawsuit. However, LINCO also lost the counterclaim; so there was no significant impact on MAS. Both parties have appealed for a second trial to the High Court. As of December 31, 2024, the lawsuit has not yet been settled and the outcome of the judgment cannot be reliably estimated.
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- 57 - 33. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES The Group’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: December 31, 2024 Foreign Currency Exchange Rate Carrying Amount Financial assets Monetary items USD $ 122,900 32.785 (USD:NTD) $ 4,029,285 USD 20,502 7.765 (USD:HKD) 672,159 USD 14,728 1.359 (USD:SGD) 482,852 RMB 233,815 4.478 (RMB:NTD) 1,047,024 RMB 188,996 1.061 (RMB:HKD) 846,326 $ 7,077,646 Non-monetary items Investments accounted for using the equity method USD 93,302 32.785 (USD:NTD) $ 3,058,900 Financial liabilities Monetary items USD 13,333 32.785 (USD:NTD) $ 437,115 USD 5,325 7.765 (USD:HKD) 174,571 RMB 173,623 1.061 (RMB:HKD) 777,485 $ 1,389,171 December 31, 2023 Foreign Currency Exchange Rate Carrying Amount Financial assets Monetary items USD $ 95,568 30.705 (USD:NTD) $ 2,934,429 USD 22,456 7.815 (USD:HKD) 689,526 USD 8,728 1.138 (USD:SGD) 267,991 USD 4,020 7.096 (USD:RMB) 123,430 RMB 209,390 4.327 (RMB:NTD) 906,029 RMB 111,663 1.101 (RMB:HKD) 483,167 $ 5,404,572 (Continued)
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- 58 - Foreign Currency Exchange Rate Carrying Amount Non-monetary items Investments accounted for using the equity method USD $ 81,863 30.705 (USD:NTD) $ 2,513,605 Financial liabilities Monetary items USD 16,215 30.705 (USD:NTD) $ 497,892 USD 10,292 7.815 (USD:HKD) 316,007 USD 3,974 1.318 (USD:SGD) 122,029 USD 3,550 34.041 (USD:THB) 108,999 RMB 79,367 1.101 (RMB:HKD) 343,420 $ 1,388,347 (Concluded) For the years ended December 31, 2024 and 2023, (realized and unrealized) net foreign exchange gains (losses) were $250,220 thousand and $(57,769) 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 of the entities in the Group. 34. SEPARATELY DISCLOSED ITEMS a. Information about significant transactions and b. information on investees: 1) Financing provided to others: Table 1. 2) Endorsements/guarantees provided: Table 2. 3) Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Table 3. 4) Marketable securities acquired or disposed of at costs or prices of at least NT$300 million or 20% of the paid-in capital: None. 5) Acquisitions of individual real estate at costs of at least NT$300 million or 20% of the paid-in capital: None. 6) Disposal of individual real estate at prices of at least NT$300 million or 20% of the paid-in capital: None. 7) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 4. 8) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5.
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- 59 - 9) Trading in derivative instruments: None. 10) Others: Intercompany relationships and significant intercompany transactions: Table 6. 11) Information on investees: Table 7. c. 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 8. 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: a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period: Table 4. b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period: Table 4. c) The amount of property transactions and the amount of the resultant gains or losses: None. d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes: Table 2. e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds: Table 1. f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services: Table 4. d. 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. 35. SEGMENT INFORMATION Information reported to the Group’s chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on types of products delivered or services provided. The Group’s reportable segments are as follows: a. Test instrument department. b. Automatic equipment department.
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- 60 - c. Other 1) Segment revenues and results Test Instrument Department Automatic Equipment Department Other Elimination Total For the year ended December 31, 2024 Revenue from external customers $ 20,418,424 $ 872,293 $ 313,120 $ - $ 21,603,837 Inter-segment revenue 13,001,125 576,825 856 (13,578,806 ) - Consolidated revenue $ 33,419,549 $ 1,449,118 $ 313,976 $ (13,578,806 ) $ 21,603,837 Segment income $ 5,250,899 $ 83,120 $ 12,088 $ 136,059 $ 5,482,166 Non-operating income and expenses 1,226,397 Profit before tax $ 6,708,563 For the year ended December 31, 2023 Revenue from external customers $ 17,787,091 $ 658,131 $ 230,821 $ - $ 18,676,043 Inter-segment revenue 10,946,980 902,749 - (11,849,729 ) - Consolidated revenue $ 28,734,071 $ 1,560,880 $ 230,821 $ (11,849,729 ) $ 18,676,043 Segment income $ 4,479,541 $ 171,828 $ (50,351 ) $ 71,819 $ 4,672,837 Non-operating income and expenses 493,246 Profit before tax $ 5,166,083 The sales between segments are based on fair value. The above revenues were generated through transactions with external customers and among segments. The inter-segment revenues for the years ended December 31, 2024 and 2023 had been adjusted and eliminated from the consolidated financial statements. Segment profit represents the profit before tax earned by each segment without allocation of central administration costs, and remuneration of directors, non-operating revenue and expenses. This was the measure reported to the Group’s chief operating decision maker to allocate resources to each segment and evaluate its performance. 2) Segment assets and liabilities The assets and liabilities of the Group have not been provided to the operating decision maker; hence, the valuation amounts of assets and liabilities are not disclosed. 3) Geographical information The Group’s primary operating areas are Taiwan, Republic of China, America, and others.
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- 61 - The Group’s revenue from external customers by location of operations and information about its non-current assets by geographical location are detailed below. Revenue from External Customers For the Year Ended Non-current Assets December 31 December 31 2024 2023 2024 2023 Taiwan $ 5,992,209 $ 4,826,964 $ 10,972,351 $ 9,815,713 China 6,788,805 7,575,138 603,169 431,230 America 6,429,099 3,732,299 1,006,157 900,754 Others (Note) 2,393,724 2,541,642 474,484 451,871 $ 21,603,837 $ 18,676,043 $ 13,056,161 $ 11,599,568 Note: Including all area amount of non-significant subsidiaries. Non-current assets exclude non-current assets classified as financial instruments, investments accounted for using the equity method, and deferred tax assets. 4) Information about major customers Included in revenue of $21,603,837 thousand and $18,676,043 thousand in 2024 and 2023, respectively, is revenue of approximately $3,585,354 thousand and $891,591 thousand which arose from sales to the Group’s largest customer.
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- 62 - TABLE 1 CHROMA ATE INC. AND SUBSIDIARIES FINANCING PROVIDED TO OTHERS FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) No. Lender Borrower Financial Statement Account Related Parties Highest Balance for the Period Ending Balance Actual Borrowing Amount Interest Rate Nature of Financing (Note 4) Business Transaction Amounts Reasons for Short-term Financing Allowance for Impairment Loss Collateral Financing Limit for Each Borrower Aggregate Financing LimitItem Value 0 The Corporation Chroma Japan Corp. Other receivables Y $ 236,346 $ 236,346 $ 103,665 1.45% a $ 231,272 - $ - - $ - $ 2,487,668 (Note 1) $ 4,975,336 (Note 2) Chroma Systems Solutions, Inc. Other receivables Y 33,188 - - 6.40% a 778,619 - - - - 2,487,668 (Note 1) 4,975,336 (Note 2) Note 1: Based on 10% of the net value of the Corporation. Note 2: Based on 20% of the net value of the Corporation. Note 3: The amounts listed in the table were translated into the New Taiwan dollars at the exchange rate of US$1=NT$32.785, JPY1=NT$0.210 as of December 31, 2024. Note 4: Financing provided: a. For transactions. b. For short-term financing.
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- 63 - TABLE 2 CHROMA ATE INC. AND SUBSIDIARIES ENDORSEMENTS/GUARANTEES PROVIDED FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) No. Endorser/ Guarantor Endorsee/Guarantee Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Note 1) Maximum Amount Endorsed/ Guaranteed During the Period Outstanding Endorsement/ Guarantee at the End of the Period Actual Borrowing Amount Amount Endorsed/ Guaranteed by Collateral Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements Aggregate Endorsement Guarantee Limit (Note 2) Endorsement/ Guarantee Given by Parent on Behalf of Subsidiaries Endorsement/ Guarantee Given by Subsidiaries on Behalf of Parent Endorsement/ Guarantee Given on Behalf of Companies in Mainland China Name Relationship 0 The Corporation Chroma ATE Inc. Subsidiary $ 3,731,502 $ 131,140 $ 131,140 $ - $ - 0.53% $ 7,463,004 Y - - Chroma Japan Corp. Subsidiary 3,731,502 42,000 42,000 31,500 - 0.17% 7,463,004 Y - - Chroma ATE (Suzhou) Co., Ltd. Subsidiary 3,731,502 1,119,500 671,700 425,273 - 2.70% 7,463,004 Y - Y Chroma ATE Europe B.V. Subsidiary 3,731,502 51,210 51,210 504 - 0.21% 7,463,004 Y - - Chroma Electronics (Shanghai) Co., Ltd. Subsidiary 3,731,502 223,900 223,900 - - 0.90% 7,463,004 Y - Y Sajet System Technology (Suzhou) Co., Ltd. Subsidiary 3,731,502 22,390 22,390 - - 0.09% 7,463,004 Y - Y Mas Automation Corp. Subsidiary 3,731,502 100,000 100,000 - - 0.40% 7,463,004 Y - - Note 1: According to Regulation of the “Procedures for Endorsement/Guarantee and lending of Funds”, the Corporation limits the endorsement/guarantee amount on each entity to within 15% of the net value of the Corporation. Note 2: According to Regulation of the “Procedures for Endorsement/Guarantee and Lending of Funds”, the Corporation limits the endorsement/guarantee amount within the 30% of the net value of the Corporation. Note 3: The amounts listed in columns were translated into New Taiwan dollars at the exchange rate of US$1=NT$32.785, JPY1=NT$0.210, RMB1=NT$4.478, EUR1=NT$34.140, as of December 31, 2024.
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- 64 - TABLE 3 CHROMA ATE INC. AND SUBSIDIARIES MARKETABLE SECURITIES HELD (EXCLUDING INVESTMENT IN SUBSIDIARIES, ASSOCIATES AND JOINTLY CONTROLLED ENTITIES) DECEMBER 31, 2024 (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, 2024 NoteShares/Units (In Thousands) Carrying Amount Percentage of Ownership Fair Value The Corporation Fund WI Harper INC Fund VII LP - Financial assets at fair value through profit or loss - non-current - $ 2,102 - $ 2,102 - Debt Enteligent Inc. - ″ - 78,428 - 78,428 - Shares DynaColor, Inc. - Financial assets at fair value through other comprehensive income - non-current 6,050 236,567 6.1 236,567 - Chunghwa Telecom Co., Ltd. - ″ 412 50,929 - 50,929 - China Communications Media Group Co., Ltd. - ″ 10 - - - - Tian Zheng International Precision Machinery Co., Ltd. - ″ 2,681 115,804 7.3 115,804 - Twoway Catv Service Inc. - ″ 3,561 267,044 3.8 267,044 - Taiwan Advanced Nanotech Inc. - ″ 3,475 167,063 11.3 167,063 - TFBS Bioscience, Inc. - ″ 2,675 123,724 7.7 123,724 - WK Technology Fund IX Ltd. - ″ 2,879 46,478 4.6 46,478 - WK Technology Fund IX II Ltd. - ″ 6,000 60,000 5.3 60,000 - Gaius Automotive Inc. - ″ 1,800 24,397 2.2 24,397 - NanoSeeX Inc. - ″ 33,120 52,992 19.9 52,992 Enteligent Inc. - ″ 1,662 64,293 7.2 64,293 - Chroma Systems Solutions, Inc. Fund Franklin California Tax Free Income FD Inc. - Financial assets at fair value through profit or loss - current 470 105,334 - 105,334 - Fidelity Government Money Market - ″ - 95,140 - 95,140 - Debt United States Department of The Treasury - Financial assets at fair value through other comprehensive income - current - 73,778 - 73,778 - Chroma Investment Co., Ltd. Fund Hua Nan Kirin Money Market Fund - Financial assets at fair value through profit or loss - current 499 6,216 - 6,216 - Taishin 1699 Money Market Fund - ″ 1,793 25,369 - 25,369 - (Continued)
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- 65 - Holding Company Name Type and Name of Marketable Securities Relationship with the Holding Company Financial Statement Account December 31, 2024 NoteShares/Units (In Thousands) Carrying Amount Percentage of Ownership Fair Value Shares Greatek Electronics Inc. - Financial assets at fair value through profit or loss - current 85 $ 4,993 - $ 4,993 - Hephas Energy Co., Ltd. - ″ 1,889 71,584 5.7 71,584 - Chroma ATE Inc. The Corporation Financial assets at fair value through other comprehensive income - non-current 1,655 676,723 0.4 676,723 - Taiwan Advanced Nanotech Inc. - ″ 790 37,969 2.6 37,969 - Cosmactive Broadband Networks Co., Ltd. - ″ 4 - 0.6 - - Prance Systems Technology Corporation - ″ 111 - 5.1 - - Testar Electronics Corporation Fund Mega Diamond Money Market Fund - Financial assets at fair value through profit or loss - current 11,705 153,105 - 153,105 - Note: The fair value of open-ended beneficiary certificates and listed market securities were calculated based on the net asset value and closing price as of balance sheet date. (Concluded)
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- 66 - TABLE 4 CHROMA ATE INC. AND SUBSIDIARIES TOTAL PURCHASE FROM OR SALE TO RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20% OF THE PAID-IN CAPITAL FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) Company Name Related Party Relationship Transaction Details Abnormal Transaction Notes/Accounts Receivable (Payable) NotePurchases (Sales) Amount % to Total Payment Terms Unit Price Payment Terms Ending Balance % to Total The Corporation Neworld Electronics Limited Subsidiary (Sales) $ (3,128,017) (20) Note $ - - $ 899,374 14 - Chroma Electronics (Shenzhen) Co., Ltd. Subsidiary (Sales) (172,965) (1) Note - - 8,388 - - Chroma Electronics (Shanghai) Co., Ltd. Subsidiary (Sales) (608,996) (4) Note - - 719 - - Chroma ATE Inc. Subsidiary (Sales) (3,783,734) (24) Note - - 2,722,725 42 - Chroma Systems Solutions, Inc. Subsidiary (Sales) (778,619) (5) Net 120 days after delivery - - 282,204 4 - Chroma ATE Europe B.V. Subsidiary (Sales) (223,642) (1) Note - - 132,773 2 - Chroma Germany GmbH Subsidiary (Sales) (234,276) (1) Note - - 299,264 5 - Chroma Japan Corp. Subsidiary (Sales) (231,272) (1) Note - - 335,250 5 - Chroma ATE (Suzhou) Co., Ltd. Subsidiary (Sales) (366,184) (2) Note - - 166,042 3 - Quantel Private Ltd. Subsidiary (Sales) (449,896) (3) Net 90 days after delivery - - 57,517 1 - Mas Automation Corp. Subsidiary Purchases 139,303 3 Net 90 days after delivery - - 43,155 2 - Neworld Electronics Limited Chroma Electronics (Shenzhen) Co., Ltd. Subsidiary (Sales) (1,309,606) (38) Net 90 days after delivery - - 700,574 52 - Chroma Electronics (Shanghai) Co., Ltd. Subsidiary (Sales) (134,520) (4) Net 90 days after delivery - - 18,594 1 - Chroma ATE (Suzhou) Co., Ltd. Same parent company (Sales) (282,002) (8) Net 90 days after declaration - - 121,850 9 - Chroma Electronics (Shenzhen) Co., Ltd. Chroma ATE (Dongguan) Co., Ltd. Subsidiary (Sales) (136,970) (7) Net 120 days after delivery - 89,602 11 Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Same parent company (Sales) (235,611) (81) Net 90 days after delivery - - 228,667 98 - Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Mas Automation Corp. Same parent company (Sales) (109,698) (24) Net 90 days after delivery - - - - - Note: The actual credit period is longer than other customers, the recovery of receivables depends on the related parties’ financial position.
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- 67 - TABLE 5 CHROMA ATE INC. AND SUBSIDIARIES RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST $100 MILLION OR 20 OF THE PAID-IN CAPITAL DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) Company Name Related Party Relationship Ending Balance Turnover Rate Overdue Amount Received in Subsequent Period (Note) Allowance for Impairment LossAmount Action Taken The Corporation Neworld Electronics Limited Subsidiary Trade receivables $ 899,374 4.03 $ - - $ 343,378 $ - Chroma ATE Inc. Subsidiary Trade receivables 2,722,725 2.23 - - 596,447 - Chroma Systems Solutions, Inc. Subsidiary Trade receivables 282,204 3.08 - - 80,990 - Chroma ATE Europe B.V. Subsidiary Trade receivables 132,773 1.62 - - - - Chroma Germany GmbH Subsidiary Trade receivables 299,264 1.05 - - - - Chroma Japan Corp. Subsidiary Trade receivables 335,250 0.63 - - - - Chroma Japan Corp. Subsidiary Other receivables - financing provided 103,665 - - - - - Chroma ATE (Suzhou) Co., Ltd. Subsidiary Trade receivables 166,042 1.37 - - 20,719 - Neworld Electronics Limited Chroma Electronics (Shenzhen) Co., Ltd. Subsidiary Trade receivables 700,574 2.69 - - 187,877 - Chroma ATE (Suzhou) Co., Ltd. Same parent company Trade receivables 121,850 2.31 - - 23,736 - Chroma ATE Inc. Chroma Systems Solutions, Inc. Same parent company Dividend receivable 131,140 - - - 131,140 - Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. Same parent company Trade receivables 228,667 0.65 203,527 Enhance collection 8,983 - Note: As of January 31, 2025.
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- 68 - TABLE 6 CHROMA ATE INC. AND SUBSIDIARIES INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT TRANSACTIONS FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) No. Company Name Counterparty Flow of Transactions (Note 1) Transaction Details Percentage to Consolidated Total Operating Revenues or Total Assets Account Amount Transaction Terms 0 The Corporation Neworld Electronics Limited a Operating revenue $ 3,128,017 Note 2 14 Neworld Electronics Limited a Trade receivables 899,374 Based on regular terms 2 Chroma Electronics (Shenzhen) Co, Ltd. a Operating revenue 172,965 Note 2 1 Chroma Electronics (Shanghai) Co., Ltd. a Operating revenue 608,996 Note 2 3 Mas Automation Corp. a Purchases 139,303 Based on regular terms 1 Chroma ATE Inc. a Operating revenue 3,783,734 Note 2 18 Chroma ATE Inc. a Trade receivables 2,722,725 Based on regular terms 7 Chroma Systems Solutions, Inc. a Operating revenue 778,619 Note 2 4 Chroma Systems Solutions, Inc. a Trade receivables 282,204 Based on regular terms 1 Chroma ATE Europe B.V. a Operating revenue 223,642 Note 2 1 Chroma ATE Europe B.V. a Trade receivables 132,773 Based on regular terms - Chroma Germany GmbH a Operating revenue 234,276 Note 2 1 Chroma Germany GmbH a Trade receivables 299,264 Based on regular terms 1 Chroma Japan Corp. a Operating revenue 231,272 Note 2 1 Chroma Japan Corp. a Trade receivables 335,250 Based on regular terms 1 Chroma Japan Corp. a Other receivables - financing provided 103,665 Based on regular terms - Chroma ATE (Suzhou) Co., Ltd. a Operating revenue 366,184 Note 2 2 Chroma ATE (Suzhou) Co., Ltd. a Trade receivables 166,042 Based on regular terms - Quantel Private Ltd. a Operating revenue 449,896 Note 2 2 1 Neworld Electronics Limited Chroma Electronics (Shenzhen) Co, Ltd. a Operating revenue 1,309,606 Based on regular terms 6 Chroma Electronics (Shenzhen) Co, Ltd. a Trade receivables 700,574 Based on regular terms 2 Chroma Electronics (Shanghai) Co., Ltd. a Operating revenue 134,520 Based on regular terms 1 Chroma ATE (Suzhou) Co., Ltd. b Operating revenue 282,002 Based on regular terms 1 Chroma ATE (Suzhou) Co., Ltd. b Trade receivables 121,850 Based on regular terms - 2 Chroma Electronics (Shenzhen) Co, Ltd. Chroma ATE (Dongguan) Co., Ltd. a Operating revenue 136,970 Based on regular terms 1 3 Chroma ATE Inc. Chroma Systems Solutions, Inc. b Dividend receivable 131,140 Based on regular terms - 4 Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Chroma ATE (Suzhou) Co., Ltd. b Operating revenue 235,611 Based on regular terms 1 Chroma ATE (Suzhou) Co., Ltd. b Trade receivables 228,667 Based on regular terms 1 5 Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Mas Automation Corp. b Operating revenue 109,698 Based on regular terms 1 Note 1: a. From parent to subsidiary. b. Between subsidiaries. Note 2: The prices were determined after taking the selling and post-sale service expenses into consideration.
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- 69 - TABLE 7 CHROMA ATE INC. AND SUBSIDIARIES INFORMATION ON INVESTEES FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) Investor Investee Location Main Businesses and Products Investment Amount Balance as of December 31, 2024 Net Income (Loss) of the Investee Investment Gain (Loss) NoteDecember 31, 2024 December 31, 2023 Shares Percentage of Ownership Carrying Amount The Corporation Neworld Electronics Limited Hong Kong Sale and maintenance of electronic test instruments, etc. $ 271,873 $ 271,873 64,012,815 100.0 $ 1,845,854 $ 196,710 $ 196,710 Subsidiary Mas Automation Corp. Hsinchu, Taiwan Design, manufacturing, installment and testing of automated factory conveyor systems 533,000 533,000 10,000,000 100.0 177,238 54,354 (28,696) Subsidiary Chroma ATE Inc. USA Sale and maintenance of electronic test instruments, etc. 29,895 29,895 1,000,000 100.0 680,743 58,696 58,570 Subsidiary Chroma Systems Solutions, Inc. USA Sale and maintenance of electronic test instruments, etc. 292,067 29,628 144,000 30.0 10,705 318,219 90,134 Subsidiary Chroma ATE Europe B.V. The Netherlands Sale and maintenance of electronic test instruments, etc. 54,026 54,026 1,000 100.0 40,221 (7,190) (7,188) Subsidiary Chroma Japan Corp. Japan Sale and maintenance of electronic test instruments, etc. 201,750 201,750 9,975 100.0 (188,498) (29,353) (29,353) Subsidiary CHI Incorporation Ltd. British Virgin Islands Test of inductance, capacitance and resistance, and sale of parts 122,884 122,884 3,830,000 100.0 552,894 66,911 66,911 Subsidiary Chen Hwa Technology Inc. British Virgin Islands Test of inductance, capacitance and resistance, and sale of parts 88,914 98,217 2,800,000 100.0 88,317 (2,717) (2,717) Subsidiary San Eagle Development Corp. British Virgin Islands Investment 186,514 186,514 2,050,000 100.0 825,812 62,142 145,374 Subsidiary Sensational Holdings Ltd. British Virgin Islands Investment 38,301 38,301 1,200,000 100.0 65,320 3,333 3,333 Subsidiary Deep Red Holding Co., Ltd. Mauritius Investment 12,217 12,217 215,000 100.0 93,920 (6,462) (6,462) Subsidiary Testar Electronics Corporation Taoyuan, Taiwan Testing of LED 247,096 247,096 20,159,600 67.2 169,141 43,646 29,330 Subsidiary Adivic Technology Co., Ltd. Taoyuan, Taiwan Sale and research of RF device 373,800 373,800 22,590,000 83.7 47,212 (49,982) (33,483) Subsidiary Chroma Investment Co., Ltd. Taoyuan, Taiwan Investment 80,000 80,000 14,000,000 100.0 190,597 4,544 4,544 Subsidiary Quantel Private Ltd. Singapore Sale and maintenance of test instruments, etc. 112,328 112,328 1,914,000 60.0 318,750 130,662 78,400 Subsidiary EVT Technology Co., Ltd. Taoyuan, Taiwan Manufacturing of motorcycles and its parts 117,311 117,311 9,412,412 85.6 (3,390) (22,658) (19,395) Subsidiary Innovative Nanotech Incorporated Hsinchu, Taiwan Monitoring instruments of nanoparticles 142,140 142,140 14,214,000 67.2 161,671 62,766 42,179 Subsidiary Touch Cloud Inc. Taipei, Taiwan Development of cloud platform and Internet of Things systems 110,457 110,457 11,045,667 83.1 12,961 (13,749) (11,425) Subsidiary Environmental Stress Systems, Inc. USA Sale of thermal platform systems - 54,985 - - - (1,038) (1,038) Subsidiary Chroma Germany GmbH Germany Sale and maintenance of electronic test instruments, etc. 97,974 - 2,030,000 100.0 68,453 9,134 9,120 Subsidiary Adlink Technology Inc. Taoyuan, Taiwan Manufacturing, processing and retailing of software/hardware of computers and peripherals 88,896 94,782 13,381,253 6.2 218,572 72,591 4,766 Associate DynaScan Technology Corp. Taoyuan, Taiwan Research and manufacture of LED generators 238,746 238,746 9,841,112 27.3 258,894 210,240 57,395 Associate Camtek Ltd. Israel Automatic optical inspection equipment 2,342,340 2,342,340 7,817,440 17.2 4,385,973 3,654,699 607,618 Associate Chih Ho Shun Development Co., Ltd. Taoyuan, Taiwan Construction and development of residence, buildings and specialized field; construction and investment of public works 17,500 17,500 1,750,000 35.0 12,566 (3,387) (1,199) Joint venture Chroma ATE Inc. Chroma Systems Solutions, Inc. USA Sale and maintenance of electronic test instruments, etc. 64 64 240,000 50.0 546,148 318,219 NA Subsidiary Chroma ATE Europe B.V. Chroma Germany GmbH Germany Sale and maintenance of electronic test instruments, etc. - 1,073 - - - 9,134 NA Subsidiary San Eagle Development Corp. Wei Kuang Mech. Eng. Inc. Mauritius Investment 185,686 185,686 4,475,000 100.0 818,387 62,196 NA Subsidiary Quantel Private Ltd. Quantel Technologies India Private Ltd. India Sale and maintenance of test instruments, etc. 3,056 3,056 64,999 100.0 7,353 723 NA Subsidiary Quantel Global Vietnam Co., Ltd. Vietnam Sale and maintenance of test instruments, etc. 16,071 6,219 - 100.0 17,444 (5,939) NA Subsidiary Quantel Global Sdn. Bhd. Malaysia Sale and maintenance of test instruments, etc. 4,199 4,199 600,000 100.0 29,158 1,374 NA Subsidiary Quantel Global Philippines Corporation Philippines Sale and maintenance of test instruments, etc. 610 610 99,095 100.0 26,301 1,592 NA Subsidiary Quantel Global Company Limited Thailand Sale and maintenance of test instruments, etc. 22,884 13,138 273,461 100.0 44,247 8,715 NA Subsidiary PT Quantel Indonesia Sale and maintenance of test instruments, etc. 18,514 - 1,110,888 100.0 19,453 582 NA Subsidiary Chroma Investment Co., Ltd. Testar Electronics Corporation Taoyuan, Taiwan Testing of LED 11,250 11,250 4,500,000 15.0 43,192 43,646 NA Subsidiary Note: For amounts that were translated from foreign currencies, the amount of the original investment was translated into New Taiwan dollars at the historical exchange rate, while the amount of net income (loss) of the investee and investment gain (loss) were translated into New Taiwan dollars at the average exchange rate for the year ended December 31, 2024. Other amounts were translated into New Taiwan dollars at the spot exchange rate on December 31, 2024.
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- 70 - TABLE 8 CHROMA ATE INC. AND SUBSIDIARIES INFORMATION ON INVESTMENTS IN MAINLAND CHINA FOR THE YEAR ENDED DECEMBER 31, 2024 (In Thousands of New Taiwan Dollars) Investee Company Main Businesses and Products Paid-in Capital (Note 2) Method of Investment (Note 1) Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2024 (Note 3) Remittance of Funds Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2024 (Note 3) Net Income (Loss) of the Investee Percentage of Ownership in Investment Investment Gain (Loss) (Notes 4 and 5) Carrying Amount as of December 31, 2024 (Note 2) Accumulated Inward Remittance of Earnings as of December 31, 2024 Outward Inward Chroma Electronics (Shenzhen) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments $ 126,660 (HK$ 30,000) b. Subsidiary of Neworld Electronics Limited $ 132,178 (HK$ 1,200 US$ 3,853) $ - $ - $ 132,178 (HK$ 1,200 US$ 3,853) $ 60,034 100 $ 60,034 $ 1,052,989 $ 459,256 (RMB 102,903) Chroma Electronics (Shanghai) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 98,355 (US$ 3,000) b. Subsidiary of Neworld Electronics Limited 101,993 (US$ 3,000) - - 101,993 (US$ 3,000) 114,383 100 114,383 400,609 47,801 (RMB 10,852) Chroma (Shanghai) Trading Co., Ltd. International and transit trading, commercial simple processing and commercial consulting service and etc. 88,520 (US$ 2,700) b. Subsidiary of Chen Hwa Technology Inc. 84,988 (US$ 2,700) - - 84,988 (US$ 2,700) 106 100 106 77,538 - Hangzhou New Material Chroma Co., Ltd. Production and sale of semiconductor connecting materials (Note 8) b. Subsidiary of Chen Hwa Technology Inc. 9,091 (US$ 285) - 9,091 (US$ 285) - (Note 8) - - - 78,007 (US$ 1,809) (RMB 4,600) Chroma ATE (Suzhou) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 124,583 (US$ 3,800) b. Subsidiary of CHI Incorporation Ltd. 121,115 (US$ 3,800) - - 121,115 (US$ 3,800) 66,854 100 66,854 671,782 88,964 (US$ 2,808) Wei Kuang Automatic Equipment (Nanjing) Co., Ltd. Sale and maintenance of electronic equipment and factory conveyor systems 53,158 (RMB 11,871) b. Subsidiary of Wei Kuang Mech. Eng. Inc. 43,751 (US$ 1,338) - - 43,751 (US$ 1,338) 28,297 100 28,297 439,487 333,884 (US$ 10,269) Wei Kuang Automatic Equipment (Xiamen) Co., Ltd. Sale and maintenance of electronic equipment and factory conveyor systems 51,125 (RMB 11,417) b. Subsidiary of Wei Kuang Mech. Eng. Inc. 49,935 (US$ 1,500) - - 49,935 (US$ 1,500) 33,926 100 33,926 371,591 290,824 (US$ 8,950) Sajet System Technology (Suzhou) Co., Ltd. Research, development and design of computer network security systems and information management 37,499 (RMB 8,374) b. Subsidiary of Deep Red Holding Co., Ltd. (Note 7) - - (Note 7) (8,789) 100 (8,789) 92,574 60,742 (US$ 1,887) Chroma ATE (Dongguan) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 183,598 (RMB 41,000) c. Subsidiary of Chroma Electronics (Shenzhen) Co., Ltd. - - - - (8,363) 100 (8,363) 193,692 - Smartrise Semiconductor (Shanghai) Co., Ltd. Sales of semiconductor equipment 95,381 (RMB 21,300) c. Subsidiary of Chroma Electronics (Shanghai) Co., Ltd. - - - - (14,720) 100 (14,720) 95,414 - Chroma ATE (Xiamen) Co., Ltd. Sale of computerized automatic test systems, peripherals and electronic test instruments 35,824 (RMB 8,000) c. Subsidiary of Chroma ATE (Suzhou) Co., Ltd. - - - - (130) 100 (130) 35,801 - (Continued)
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- 71 - Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2024 Investment Amounts Authorized by the Investment Commission, MOEA Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA $533,960 (HK$1,200, US$16,191) $623,006 (HK$1,400, US$18,926) $14,926,007 (Note 6) Note 1: Methods of investment have following type: a. Direct investment in mainland China. b. Indirect investment in mainland China through an existing company in a third region. c. Others. Note 2: The amounts of paid-in capital and carrying value as of balance sheet date were translated into New Taiwan dollars at the rates of HK$1=NT$4.222, US$1=NT$32.785, RMB1=NT$4.478 prevailing on December 31, 2024. Note 3: The amounts of accumulated outflow of investment from Taiwan as of January 1, 2024 and December 31, 2024 were translated into the New Taiwan dollars on the original outflow day. Note 4: Based on audited financial statements. Note 5: Investment income (loss) was translated into New Taiwan dollars at the average rate of HK$1=NT$4.115, US$1=NT$32.112, RMB1=NT$4.454 for the year ended December 31, 2024. Note 6: The upper limit on investment was calculated in accordance with the regulations of the Investment Commission of the Ministry of Economic Affairs for 60% of the net equity or consolidated net equity. Note 7: The investment in Sajet Technology Inc. (liquidated on September 15, 2008) was authorized by the Investment Commission in 2004. Note 8: Disposed in March 2024, the disposal amount of RMB6,656 thousand was remitted in April 2024. (Concluded)