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AEC — Audit Report / Information 2025
May 22, 2026
51840_rns_2026-05-22_535e6ddf-b884-4d98-a2bc-36d2d98af02e.pdf
Audit Report / Information
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Stock code: 1514
Allis Electric Co., Ltd. and Subsidiaries
Consolidated Financial Statements
for the Years Ended December 31, 2025 and 2024
(With Auditors' Report Thereon)
12F., No. 19-11, Sanchong Rd., Taipei
TEL:(02)26553456
FAX:(02)26553388
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.
Allis Electric Co., Ltd. and Subsidiaries
Table of Contents
| Contents | Page |
|---|---|
| I. Cover page | |
| II. Table of Contents | |
| III. Representation Letter | |
| IV. Independent Auditors’ Report | 1~IV |
| V. Consolidated Balance Sheets | 1 |
| VI. Consolidated Statements of Comprehensive Income | 2 |
| VII. Consolidated Statements of Changes in Equity | 3 |
| VIII. Consolidated Statements of Cash Flows | 4~5 |
| IX. Notes to the Consolidated Financial Statements | |
| 1. General | 6 |
| 2. Approval Date and Procedures of the Financial Statements | 6 |
| 3. Application of New, Amended and Revised Standards and Interpretations | 6~7 |
| 4. Summary of Significant Accounting Policies | 7~17 |
| 5. Critical Accounting Judgments and Key Sources of Estimation Uncertainty | 17 |
| 6. Significant Accounts Disclosures | 18~46 |
| 7. Transactions with Related Parties | 46~48 |
| 8. Pledged Assets | 48 |
| 9. Significant Contingent Liabilities and Unrecognized Commitments | 49 |
| 10. Significant Loss from Disasters | — |
| 11. Significant Subsequent Events | — |
| 12. Others | — |
| 13. Additional Disclosures | |
| (1) Information on Significant Transactions | 49、52~56 |
| (2) Information on Investees | 49、57 |
| (3) Information on Investment in Mainland China | 49、58 |
| 14. Segment Information | 50~51 |
REPRESENTATION LETTER
The entities that are 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, 2025 are all the same as those included in the consolidated financial statements of Allis Electric Co., Ltd. and its subsidiaries prepared in conformity with the International Financial Reporting Standard 10 "Consolidated Financial Statements". Relevant information that should be disclosed in the consolidated financial statements of affiliates is included in the consolidated financial statements of Allis Electric Co., Ltd. and its subsidiaries. Hence, we do not prepare a separate set of consolidated financial statements of affiliates.
Very truly yours,
ALLIS ELECTRIC CO., LTD.
By
Herr-Yeh Sung
Chairman
March 12, 2026
Earnest & Co., CPAs.
4F., No.501, Sec.2, Tiding Blvd., Taipei, Taiwan (R.O.C)
恵眾聯合會計師事務所
台北市琉頂大道二段501號4樓
TEL:(02)87519698 FAX:(02)87515658
INDEPENDENT AUDITORS' REPORT
Allis Electric Co., Ltd.
Opinion
We have audited the accompanying consolidated financial statements of Allis Electric Co., Ltd. and its subsidiaries (collectively referred to as “Allis Electric Group”), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, based on our audits and the reports of other auditors (refer to Other Matter section), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Allis Electric Group as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of Allis Electric Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue Recognition
Please refer to Note 4(16) of the consolidated financial statements for the accounting policies on revenue recognition.
Because revenue is high-risk in nature and parts of goods are customized, revenue recognition was identified as one of the key audit matters.
We obtained an understanding of and tested the design and operating effectiveness of internal
controls over revenue recognition. We also performed tests of the occurrence of sales revenue for newly added customers that are related parties with significant transactions or newly ranked among the top ten customers, and examined whether the sales counterparties were consistent with the recipients of payments and reviewed subsequent collections to assess whether any unusual matters existed.
Estimated Impairment of Accounts Receivable
Please refer to Note 4(6) of the consolidated financial statements for the accounting policies on impairment of accounts receivables and Note 5 of the consolidated financial statements for uncertainty of accounting estimation and assumptions for the estimated impairment of accounts receivable.
Because of measuring expected credit losses on accounts receivable involve significant judgments and uncertainties, the estimated impairment of accounts receivables was identified as one of the key audit matters.
We evaluated the reasonableness of allowance for impairment loss by testing the aging of accounts receivables and by quantifying the potential risk of accounts receivables that were overdue at the balance sheet date. We tested the recoverability of the accounts receivables by vouching cash receipts after the balance sheet date. For the estimated impairment of accounts receivable, we evaluated the adequacy of management's provision for impairment based on customers' past default experience, current financial position, existing market conditions as well as forward looking estimates.
Other Matter
We did not audit the financial statements of certain subsidiaries of Allis Electric Group as of and for the years ended December 31, 2025 and 2024, which were included in the accompanying consolidated financial statements, but such financial statements were audited by other auditors whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included in Allis Electric Group's consolidated financial statements for such subsidiaries, is based solely on the reports of other auditors. As of December 31, 2025 and 2024, the total assets of such subsidiaries were NT$487,400 thousand and NT$487,330 thousand, respectively, which represented 3.67% and 4.32%, respectively, of Allis Electric Group's consolidated total assets. For the years ended December 31, 2025 and 2024, the operating revenue of such subsidiaries were NT$540,256 thousand and NT$617,909 thousand, respectively, which represented 5.11% and 6.96%, respectively, of Allis Electric Group's consolidated total operating revenue. In addition, we did not audit the financial statements of certain associates of Allis Electric Group as of and for the years ended December 31, 2025 and 2024, which reflected in the consolidated financial statements using the equity of accounting, but such financial statements were audited by other auditors whose reports have been furnished to us. Thus, our opinion, insofar as it relates to the amounts included in Allis Electric Group's consolidated financial statements for such associates, is based solely on the reports of other auditors. As of December 31, 2025 and 2024, the aforementioned investments accounted for using equity method were NT$420,025 thousand and NT$389,201 thousand, respectively, which represented 3.16% and 3.45%, respectively, of Allis Electric Group's consolidated total assets. Allis Electric Group's share of comprehensive income or loss of such associates were NT$60,355 thousand and NT$74,402 thousand for the years ended December 31, 2025 and 2024, respectively, which represented 6.62% and 8.23%, respectively, of Allis Electric Group's consolidated total comprehensive income.
We have also audited the parent company only financial statements of Allis Electric Co., Ltd. as of and for the years ended December 31, 2025 and 2024 on which we have issued an unmodified opinion with Other Matter section.
~II~
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 Financial Supervisory Commission 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 Allis Electric 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 Allis Electric Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance, including the audit committee, are responsible for overseeing Allis Electric 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:
-
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.
-
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 Allis Electric Group’s internal control.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
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 Allis Electric 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 Allis Electric Group to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the consolidated financial statements,
~III~
including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within Allis Electric 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.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2025 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 audit resulting in this independent auditors' report are Yu-Ling Hung and Min-Chih Chuo.
Earnest & Co., CPAs.
Taipei, Taiwan
Republic of China
March 12, 2026
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 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.
~IV~
Allis Electric Co., Ltd. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)
| ASSETS | Notes | 2025.12.31 | 2024.12.31 | LIABILITIES AND EQUITY | Notes | 2025.12.31 | 2024.12.31 | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Amount | % | Amount | % | Amount | % | Amount | % | |||||
| CURRENT ASSETS | ||||||||||||
| 1100 | Cash and cash equivalents | Note 4 and 6 | $ 1,694,233 | 12.76 | $ 1,023,242 | 9.06 | 2100 | Short-term loans | Note 6 | $ 1,598,288 | 12.05 | $ 1,970,000 |
| 1110 | Financial assets at fair value through profit or loss | Note 4 and 6 | 3,058 | 0.02 | 69 | 0.00 | 2120 | Financial liabilities at fair value through profit or loss | Note 4 and 6 | 7,800 | 0.06 | 98 |
| 1120 | Financial assets at fair value through other comprehensive income | Note 4 and 6 | 135,968 | 1.02 | 142,350 | 1.26 | 2130 | Contract liabilities | Note 4 and 7 | 590,121 | 4.44 | 383,921 |
| 1140 | Contract assets | Note 4 | 1,435,110 | 10.81 | 832,546 | 7.37 | 2150 | Notes payable | Note 7 | 71,985 | 0.54 | 30,125 |
| 1150 | Notes receivable, net | Note 4, 6 and 7 | 64,663 | 0.49 | 95,397 | 0.85 | 2170 | Accounts payable | 2,361,732 | 17.78 | 1,975,606 | |
| 1170 | Accounts receivable, net | Note 4 and 6 | 4,514,644 | 34.00 | 3,819,728 | 33.83 | 2180 | Accounts payable to related parties | Note 7 | 138,592 | 1.04 | 139,661 |
| 1180 | Accounts receivable from related parties | Note 6 and 7 | 95,651 | 0.72 | 12,930 | 0.12 | 2200 | Other payables | Note 7 | 472,515 | 3.56 | 415,307 |
| 1200 | Other receivables | Note 4, 6, 7, and 8 | 33,659 | 0.25 | 58,231 | 0.51 | 2230 | Current tax liabilities | Note 4 | 138,144 | 1.04 | 84,676 |
| 1220 | Current tax assets | Note 4 | 1,490 | 0.01 | 471 | 0.00 | 2250 | Provisions | Note 4 and 6 | 12,100 | 0.09 | 12,100 |
| 1310 | Inventories | Note 4 and 6 | 2,200,329 | 16.57 | 2,374,348 | 21.03 | 2280 | Lease liabilities | Note 4 | 4,122 | 0.03 | 3,567 |
| 1410 | Prepayments | 148,341 | 1.12 | 93,046 | 0.82 | 2320 | Current portion of long-term loans | Note 6 | 38,907 | 0.29 | 29,762 | |
| 1479 | Other current assets | Note 6 | 191 | 0.00 | 4,250 | 0.04 | 2399 | Other current liabilities | 1,074 | 0.01 | 1,031 | |
| 11xx | Total current assets | 10,327,337 | 77.77 | 8,456,608 | 74.89 | 21xx | Total current liabilities | 5,435,380 | 40.93 | 5,045,854 | ||
| NON-CURRENT LIABILITIES | ||||||||||||
| 2530 | Bonds payable | Note 4 and 6 | 1,094,676 | 8.24 | 9,690 | |||||||
| 2540 | Long-term loans | Note 6 | 147,566 | 1.11 | 185,866 | |||||||
| 2570 | Deferred tax liabilities | Note 4 and 6 | 186,545 | 1.40 | 174,476 | |||||||
| 2580 | Lease liabilities | Note 4 | 4,529 | 0.04 | 5,672 | |||||||
| NON-CURRENT ASSETS | ||||||||||||
| 1510 | Financial assets at fair value through profit or loss | Note 4 and 6 | 13,500 | 0.10 | - | - | 2580 | Guarantee deposits | 3,986 | 0.03 | 3,459 | |
| 1517 | Financial assets at fair value through other comprehensive income | Note 4 and 6 | 122,134 | 0.92 | 131,038 | 1.16 | 2645 | Total non-current liabilities | 1,437,302 | 10.82 | 379,163 | |
| 1550 | Investments accounted for using equity method | Note 4 and 6 | 420,025 | 3.16 | 389,201 | 3.45 | 25xx | Total liabilities | 6,872,682 | 51.75 | 5,425,017 | |
| 1600 | Property, plant and equipment | Note 4, 6 and 8 | 1,730,411 | 13.03 | 1,728,841 | 15.31 | 24xx | Total liabilities | ||||
| 1755 | Right-of-use assets | Note 4 and 6 | 8,384 | 0.06 | 9,114 | 0.08 | ||||||
| 1760 | Investment properties | Note 4, 6 and 8 | 345,465 | 2.60 | 347,523 | 3.08 | EQUITY ATTRIBUTABLE TO OWNERS OF THE PARENT | Note 6 | ||||
| 1780 | Intangible assets | Note 4 and 6 | 36,469 | 0.28 | 26,898 | 0.24 | 3110 | Ordinary shares | 2,731,085 | 20.56 | 2,675,437 | |
| 1840 | Deferred tax assets | Note 4 and 6 | 34,903 | 0.26 | 27,010 | 0.24 | 3130 | Bond conversion entitlement certificates | - | - | 435 | |
| 1915 | Prepayments for equipment | 35,070 | 0.27 | 18,376 | 0.16 | 3100 | Total share capital | 2,731,085 | 20.56 | 2,675,872 | ||
| 1920 | Refundable deposits | 130,721 | 0.99 | 109,812 | 0.97 | 3200 | Capital surplus | 1,113,619 | 8.39 | 985,582 | ||
| 1975 | Net defined benefit asset | Note 4 and 6 | 65,233 | 0.49 | 37,346 | 0.33 | ||||||
| 1980 | Other receivables | Note 6 | 440 | 0.00 | 407 | 0.00 | Retained earnings | |||||
| 1990 | Other non-current assets | Note 6 | 9,748 | 0.07 | 9,748 | 0.09 | 3310 | Legal reserve | 416,508 | 3.14 | 333,094 | |
| 15xx | Total non-current assets | 2,952,503 | 22.23 | 2,835,314 | 25.11 | 3320 | Special reserve | 448,174 | 3.37 | 448,977 | ||
| 3350 | Unappropriated earnings | 1,681,647 | 12.67 | 1,362,388 | ||||||||
| 3300 | Total retained earnings | 2,546,329 | 19.18 | 2,144,459 | ||||||||
| 3400 | Other equity | (26,289) | (0.20) | (11,378) | ||||||||
| 3500 | Treasury Stock | (30,866) | (0.23) | (30,866) | ||||||||
| 31xx | Total equity attributable to owners of the parent | 6,333,878 | 47.70 | 5,763,669 | ||||||||
| 36xx | NON-CONTROLLING INTERESTS | Note 6 | 73,280 | 0.55 | 103,236 | |||||||
| 3xxx | Total equity | 6,407,158 | 48.25 | 5,866,905 | ||||||||
| 1xxx | TOTAL ASSETS | $ 13,279,840 | 100.00 | $ 11,291,922 | 100.00 | TOTAL LIABILITIES AND EQUITY | $ 13,279,840 | 100.00 | $ 11,291,922 |
The accompanying notes are an integral part of the consolidated financial statements.
(With Earnest & Co., CPAs auditors' report dated March 12, 2026)
Allis Electric Co., Ltd. and Subsidiaries
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)
| Notes | 2025 Amount | % | 2024 Amount | % | ||
|---|---|---|---|---|---|---|
| 4000 | OPERATING REVENUE | Note 4, 6 and 7 | $ 10,570,657 | 100.00 | $ 8,877,878 | 100.00 |
| 5000 | OPERATING COST | Note 6 and 7 | 8,589,801 | 81.26 | 7,174,157 | 80.81 |
| 5900 | GROSS PROFIT | 1,980,856 | 18.74 | 1,703,721 | 19.19 | |
| 5910 | LESS: UNREALIZED GROSS PROFIT ON SALES | — | — | 1,347 | 0.01 | |
| 5920 | ADD: REALIZED GROSS PROFIT ON SALES | 469 | 0.01 | — | — | |
| 5950 | NET GROSS PROFIT | 1,981,325 | 18.75 | 1,702,374 | 19.18 | |
| OPERATING EXPENSES | ||||||
| 6100 | Selling and marketing expenses | Note 7 | 505,465 | 4.78 | 466,382 | 5.25 |
| 6200 | General and administrative expenses | 263,558 | 2.50 | 221,855 | 2.50 | |
| 6300 | Research and development expenses | Note 7 | 130,892 | 1.24 | 121,500 | 1.37 |
| 6450 | Expected credit impairment loss (gains) | 12,926 | 0.12 | (5,923) | (0.06) | |
| 6000 | Total operating expenses | 912,841 | 8.64 | 803,814 | 9.06 | |
| 6900 | OPERATING INCOME | 1,068,484 | 10.11 | 898,560 | 10.12 | |
| NON-OPERATING INCOME AND EXPENSES | ||||||
| 7010 | Other income | Note 6 and 7 | 46,361 | 0.44 | 33,577 | 0.38 |
| 7020 | Other gains and losses | Note 6 | 20,198 | 0.19 | 32,576 | 0.37 |
| 7050 | Finance costs | Note 6 | (59,847) | (0.57) | (43,853) | (0.50) |
| 7060 | Share of profit of associates accounted for using equity method | Note 4 and 6 | 60,281 | 0.57 | 71,197 | 0.80 |
| 7000 | Total non-operating income and expenses | 66,993 | 0.63 | 93,497 | 1.05 | |
| 7900 | INCOME BEFORE INCOME TAX | 1,135,477 | 10.74 | 992,057 | 11.17 | |
| 7950 | INCOME TAX EXPENSE | Note 4 and 6 | 228,271 | 2.16 | 181,251 | 2.04 |
| 8200 | NET INCOME | 907,206 | 8.58 | 810,806 | 9.13 | |
| OTHER COMPREHENSIVE INCOME (LOSS) | ||||||
| Items that will not be reclassified subsequently to profit or loss | ||||||
| 8311 | Remeasurement of defined benefit plans | Note 4 and 6 | 21,079 | 0.20 | 29,557 | 0.33 |
| 8316 | Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income | Note 4 | (23,252) | (0.22) | 52,481 | 0.59 |
| 8321 | Share of remeasurement of defined benefit plans of associates accounted for using equity method | Note 4 | (19) | 0.00 | 1,984 | 0.02 |
| 8349 | Income tax relating to items that will not be reclassified to profit or loss | Note 4 and 6 | (4,008) | (0.04) | (81) | (0.00) |
| Items that may be reclassified subsequently to profit or loss | ||||||
| 8361 | Exchange differences on translating foreign operation | 10,876 | 0.11 | 8,551 | 0.10 | |
| 8370 | Share of other comprehensive income (loss) of associates accounted for using equity method | Note 4 | 93 | 0.00 | 1,221 | 0.02 |
| 8300 | Other comprehensive income, net | 4,769 | 0.05 | 93,713 | 1.06 | |
| 8500 | TOTAL COMPREHENSIVE INCOME FOR THE YEAR | $ 911,975 | 8.63 | $ 904,519 | 10.19 | |
| 8600 | NET INCOME ATTRIBUTABLE TO | |||||
| 8610 | Owners of the parent | $ 893,312 | 8.45 | $ 801,224 | 9.02 | |
| 8620 | Non-controlling interests | 13,894 | 0.13 | 9,582 | 0.11 | |
| $ 907,206 | 8.58 | $ 810,806 | 9.13 | |||
| 8700 | TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO | |||||
| 8710 | Owners of the parent | $ 895,540 | 8.47 | $ 893,831 | 10.07 | |
| 8720 | Non-controlling interests | 16,435 | 0.16 | 10,688 | 0.12 | |
| $ 911,975 | 8.63 | $ 904,519 | 10.19 | |||
| 9750 | BASIC EARNINGS PER SHARE | Note 6 | $ 3.30 | $ 2.98 | ||
| 9850 | DILUTED EARNINGS PER SHARE | Note 6 | $ 3.23 | $ 2.94 |
The accompanying notes are an integral part of the consolidated financial statements.
(With Earnest & Co., CPAs auditors' report dated March 12, 2026)
Allis Electric Co., Ltd. and Subsidiaries
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)
Equity Attributable to Owners of Parent
| Share Capital | Retained Earnings | Other Equity | Treasury Stock | Total | Non-controlling Interests | Total Equity | ||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Ordinary Shares | Bond Conversion Entitlement Certificates | Capital Surplus | Legal Reserve | Special Reserve | Unappropriated Earnings | Exchange Differences on Translating Foreign Operation | Unrealized Gains (Losses) on Financial Assets Measured at Fair Value Through Other Comprehensive Income | (41,616) | $ 4,635,227 | $ 100,149 | $ 4,735,376 | |
| BALANCE, JANUARY 1, 2024 | $ 2,469,353 | $ 58,439 | $ 440,925 | $ 258,944 | $ 449,780 | $ 1,068,907 | (8,209) | $(61,296) | $(41,616) | $ 4,635,227 | $ 100,149 | $ 4,735,376 |
| Appropriation of the 2023 earnings | ||||||||||||
| Legal reserve appropriated | - | - | - | 74,150 | - | (74,150) | - | - | - | - | - | - |
| Cash dividends | - | - | - | - | - | (414,672) | - | - | - | (414,672) | - | (414,672) |
| Stock dividends | 51,834 | - | - | - | - | (51,834) | - | - | - | - | - | - |
| Net income in 2024 | - | - | - | - | - | 801,224 | - | - | - | 801,224 | 9,582 | 810,806 |
| Other comprehensive income and loss in 2024, net of income tax | - | - | - | - | - | 31,405 | 8,474 | 52,728 | - | 92,607 | 1,106 | 93,713 |
| Total comprehensive income in 2024 | - | - | - | - | - | 832,629 | 8,474 | 52,728 | - | 893,831 | 10,688 | 904,519 |
| Reversal of special reserve | - | - | - | - | (803) | 803 | - | - | - | - | - | - |
| Return of donation from owners | - | - | (7) | - | - | - | - | - | - | (7) | - | (7) |
| Sale of the Company's shares held by subsidiaries | - | - | 76,398 | - | - | - | - | - | 10,750 | 87,148 | 53 | 87,201 |
| Disposal of investments in equity instruments at fair value through other comprehensive income | - | - | - | - | - | 3,075 | - | (3,075) | - | - | - | - |
| Cash dividends from subsidiaries | - | - | - | - | - | - | - | - | - | - | (9,589) | (9,589) |
| Changes in equity of subsidiary accounted for using the equity method | - | - | - | - | - | (198) | - | - | - | (198) | - | (198) |
| Cash dividends distributed to subsidiaries | - | - | 3,402 | - | - | - | - | - | - | 3,402 | 2 | 3,404 |
| Changes in ownership interests in subsidiary | - | - | 329 | - | - | (2,172) | - | - | - | (1,843) | 1,933 | 90 |
| Conversion of convertible bonds | - | 96,246 | 464,535 | - | - | - | - | - | - | 560,781 | - | 560,781 |
| Bond conversion entitlement certificates converted to ordinary shares | 154,250 | (154,250) | - | - | - | - | - | - | - | - | - | - |
| BALANCE, DECEMBER 31, 2024 | 2,675,437 | 435 | 985,582 | 333,094 | 448,977 | 1,362,388 | 265 | (11,643) | (30,866) | 5,763,669 | 103,236 | 5,866,905 |
| Appropriation of the 2024 earnings | ||||||||||||
| Legal reserve appropriated | - | - | - | 83,414 | - | (83,414) | - | - | - | - | - | - |
| Cash dividends | - | - | - | - | - | (455,046) | - | - | - | (455,046) | - | (455,046) |
| Stock dividends | 53,535 | - | - | - | - | (53,535) | - | - | - | - | - | - |
| Net income in 2025 | - | - | - | - | - | 893,312 | - | - | - | 893,312 | 13,894 | 907,206 |
| Other comprehensive income and loss in 2025, net of income tax | - | - | - | - | - | 17,009 | 8,324 | (23,105) | - | 2,228 | 2,541 | 4,769 |
| Total comprehensive income in 2025 | - | - | - | - | - | 910,321 | 8,324 | (23,105) | - | 895,540 | 16,435 | 911,975 |
| Reversal of special reserve | - | - | - | - | (803) | 803 | - | - | - | - | - | - |
| Equity components of convertible bonds issued by the Company | - | - | 116,242 | - | - | - | - | - | - | 116,242 | - | 116,242 |
| Disposal of investments in equity instruments at fair value through other comprehensive income | - | - | - | - | - | 130 | - | (130) | - | - | - | - |
| Cash dividends from subsidiaries | - | - | - | - | - | - | - | - | - | - | (5,601) | (5,601) |
| Changes in equity of subsidiary accounted for using the equity method | - | - | 108 | - | - | - | - | - | - | 108 | 22 | 130 |
| Cash dividends distributed to subsidiaries | - | - | 3,729 | - | - | - | - | - | - | 3,729 | 3 | 3,732 |
| Changes in ownership interests in subsidiary | - | - | - | - | - | - | - | - | - | - | (40,815) | (40,815) |
| Conversion of convertible bonds | - | 1,678 | 7,958 | - | - | - | - | - | - | 9,636 | - | 9,636 |
| Bond conversion entitlement certificates converted to ordinary shares | 2,113 | (2,113) | - | - | - | - | - | - | - | - | - | - |
| BALANCE, DECEMBER 31, 2025 | $ 2,731,085 | $ - | $ 1,113,619 | $ 416,508 | $ 448,174 | $ 1,681,647 | $ 8,589 | $(34,878) | $(30,866) | $ 6,333,878 | $ 73,280 | $ 6,407,158 |
The accompanying notes are an integral part of the consolidated financial statements.
(With Earnest & Co., CPAs auditors' report dated March 12, 2026)
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Allis Electric Co., Ltd. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)
| 2025 | 2024 | |
|---|---|---|
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||
| Income before income tax | $ 1,135,477 | $ 992,057 |
| Adjustments for | ||
| Adjustments to reconcile profit (loss) | ||
| Depreciation expense | 72,669 | 63,411 |
| Amortization expense | 11,374 | 5,352 |
| Expected credit impairment loss (gain) | 12,926 | (5,923) |
| Net gain on financial instruments at fair value through profit or loss | (8,273) | (5,052) |
| Interest expense | 59,847 | 43,853 |
| Interest income | (15,796) | (7,187) |
| Dividend income | (8,137) | (5,545) |
| Share of profit of associates accounted for using equity method | (60,281) | (71,197) |
| Net loss on disposal of property, plant and equipment | 703 | 386 |
| Net gain on disposal of other assets | (334) | — |
| Unrealized (realized) gross profit on sales | (469) | 1,347 |
| Changes in operating assets and liabilities | ||
| Change in fair value of financial instruments at fair value through profit or loss | (781) | 154 |
| Increase in contract assets | (602,564) | (341,403) |
| Decrease in notes receivable | 31,029 | 115,461 |
| Decrease in notes receivable from related parties | — | 7,837 |
| Decrease (increase) in accounts receivable | (698,133) | 308,632 |
| Decrease (increase) in accounts receivable from related parties | (82,721) | 18,664 |
| Decrease in other receivables | 12,441 | 30,068 |
| Decrease in inventories | 181,309 | 277,737 |
| Increase in prepayments | (55,190) | (9,897) |
| Decrease (increase) in other current assets | 4,198 | (1,933) |
| Increase in net defined benefit asset | (6,808) | (18,926) |
| Increase (decrease) in contract liabilities | 205,650 | (92,532) |
| Increase in notes payable | 41,860 | 2,176 |
| Increase (decrease) in accounts payable | 373,490 | (265,819) |
| Decrease in accounts payable to related parties | (1,069) | (69,826) |
| Increase (decrease) in other payables | 61,772 | (79,364) |
| Increase (decrease) in other current liabilities | 43 | (893) |
| Cash inflow generated from operations | 664,232 | 891,638 |
| Income tax paid | (175,550) | (197,968) |
| Net cash generated from operating activities | 488,682 | 693,670 |
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Allis Electric Co., Ltd. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)
| 2025 | 2024 | |
|---|---|---|
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||
| Acquisition of financial assets at fair value through profit or loss | (13,500) | — |
| Acquisition of financial assets at fair value through other comprehensive income | (9,020) | (27,093) |
| Proceeds from disposal of financial assets at fair value through other comprehensive income | 1,055 | 12,714 |
| Proceeds from disposal of partial interest in a subsidiary | — | 930 |
| Acquisition of property, plant and equipment | (75,596) | (130,334) |
| Proceeds from disposal of property, plant and equipment | 88 | — |
| Acquisition of intangible assets | (20,891) | (24,872) |
| Decrease (increase) in prepayments for equipment | (16,694) | 4,635 |
| Increase in refundable deposits | (20,909) | (5,499) |
| Decrease in other receivables | 13,081 | 6 |
| Interest received | 15,373 | 7,178 |
| Cash dividend received | 38,137 | 56,547 |
| Others | 334 | — |
| Net cash flows used in investing activities | (88,542) | (105,788) |
| CASH FLOWS FROM FINANCING ACTIVITIES : | ||
| Increase in short-term loans | 8,214,665 | 10,198,184 |
| Decrease in short-term loans | (8,586,456) | (10,152,184) |
| Proceeds from issuance of convertible bonds | 1,200,713 | — |
| Increase in long-term loans | — | 35,000 |
| Decrease in long-term loans | (29,444) | (30,130) |
| Repayment of the principal portion of lease liabilities | (3,705) | (4,430) |
| Increase in guarantee deposits | 527 | 3 |
| Interest paid | (36,411) | (41,062) |
| Cash dividends paid | (456,915) | (420,805) |
| Proceeds from disposal of treasury stock | — | 91,977 |
| Acquisition of subsidiary | (40,815) | — |
| Others | — | (7) |
| Net cash flows generated from (used in) financing activities | 262,159 | (323,454) |
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 8,692 | 7,735 |
| NET INCREASE IN CASH AND CASH EQUIVALENTS | 670,991 | 272,163 |
| CASH AND CASH EQUIVALENTS, BEGINNING OF THE YEAR | 1,023,242 | 751,079 |
| CASH AND CASH EQUIVALENTS, END OF THE YEAR | $ 1,694,233 | $ 1,023,242 |
The accompanying notes are an integral part of the consolidated financial statements.
(With Earnest & Co., CPAs auditors' report dated March 12, 2026)
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Allis Electric Co., Ltd. and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
1. GENERAL
Allis Electric Co., Ltd. (the "Company") was incorporated in September 1968. Allis Electric Co., Ltd. and Subsidiaries (collectively referred to as the "Group" is engaged in manufacturing and selling of switchgear, transformer, electrical products, and construction and installation of electrical equipment. Please refer to Note 4(2) and 14.
The consolidated financial statements are presented in the Company's functional currency, the New Taiwan dollar.
2. APPROVAL DATE AND PROCEDURES OF THE FINANCIAL STATEMENTS
The consolidated financial statements were approved by the Company's board of directors on March 12, 2026.
3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS
(1) 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 any material impact on the Company's accounting policies.
(2) The IFRS Accounting Standards endorsed by the FSC for application starting from 2026
| New, Amended and Revised Standards and Interpretations | Effective Date Announced by IASB |
|---|---|
| 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 |
| Annual Improvements to IFRS Accounting Standards-Volume 11 | January 1, 2026 |
| IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments to IFRS 17) | January 1, 2023 |
As of the date the consolidated financial statements were authorized for issue, the Group has assessed that the application of aforementioned standards and interpretations will not have a material impact on the Group's financial position and financial performance.
(3) The IFRS Accounting Standards in issue but not yet endorsed and issued into effect by the FSC
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New, Amended and Revised Standards and Interpretations
Effective Date Announced by IASB
| 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 18 ” Presentation and Disclosure in Financial Statements” | January 1, 2027 |
| IFRS 19 ” Subsidiaries without Public Accountability: Disclosure” | January 1, 2027 |
| Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency” | January 1, 2027 |
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-mentioned impacts, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the possible impact that the application of the aforementioned standards and interpretations will have on the Group’s financial position and financial performance and will disclose the relevant impact when the assessment is completed.
4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(1) Statement of compliance
These 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.
(2) Basis of consolidation
a. The basis of the consolidated financial statements
The consolidated financial statements incorporate the financial statements of the Company and the entities controlled by the Company. 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 date of acquisition or up to the effective date of disposal, 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 Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.
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 Company.
When the Group loses control of a subsidiary, a gain or loss is recognized in profit or loss and is calculated as the difference between (i) the aggregate of the fair value of the consideration received and any investment retained in the former subsidiary at its fair value at the date when control is lost and (ii) the assets (including any goodwill) and liabilities and any non-controlling interests of the former subsidiary at their carrying amounts at the date when control is lost. The Group accounts for all amounts recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if the Group had directly disposed of the related assets or liabilities.
b. The subsidiaries in the consolidated financial statements
| Name of Subsidiaries | Principle Businesses Activities | Location | Percentage of Ownership | |
|---|---|---|---|---|
| 2025.12.31 | 2024.12.31 | |||
| Air King Industrial Co., Ltd. | Design and installation of electrical equipment | Taipei, Taiwan | 83.12% | 83.12% |
| Ares Technology Co., Ltd. | Manufacturing of UPS | New Taipei City, Taiwan | 100.00% | 100.00% |
| Yishun Investment Co., Ltd. | Investment and holding | Taipei, Taiwan | 99.94% | 99.94% |
| Allis Communications Co., Ltd. | Manufacturing of GPS antennas | New Taipei City, Taiwan | 82.64% | 82.64% |
| Hengyuan Allis Electric Co., Ltd. | Selling of electrical equipment | Qingdao, China | 100.00% | 65.38% |
| AEC International S.r.l. | Selling of electrical equipment | Italy | 70.00% | 70.00% |
| PHD Powerhouse Distributions (PTY) Ltd. | Selling of electrical equipment | South Africa | 93.75% | 93.75% |
| Allis Electric (S) Pte. Ltd. | Selling of electrical equipment | Singapore | 100.00% | 100.00% |
(3) Foreign currencies
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. 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 measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising 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 that are measured at historical cost in a foreign currency are not retranslated.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Company's foreign operations (including subsidiaries and associates in other countries that use currency different from the currency of the Company) are translated into the New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity (attributed to the owners of the Company and non-controlling interests as appropriate).
(4) Classification of current and non-current assets and liabilities
Current assets include:
a. Assets held primarily for the purpose of trading;
b. Assets expected to be realized within twelve months after the reporting period; and
c. Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
Current liabilities include:
a. Liabilities held primarily for the purpose of trading;
b. Liabilities due to be settled within twelve months after the reporting period, even if an agreement to refinance or to reschedule payments on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
c. Liabilities for which the Group does not have the right at the end of the reporting period to defer settlement beyond twelve months.
Assets and liabilities that are not classified as current are classified as non-current.
The Group engages in the construction business, which has an operating cycle of over one year, the normal operating cycle applies when considering the classification of the Group's construction-related assets and liabilities.
(5) Cash and cash equivalents
Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and that are subject to an insignificant risk of changes in value. Cash and cash equivalents are cash on hand, checking accounts and demand deposit, and short-term time deposits with original maturities less than one year.
(6) Financial instruments
Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instruments.
Transaction costs that are directly attributable to the acquisition or issue 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
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the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.
Financial assets
All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
a. Measurement categories
Financial assets are classified into the following categories: Financial assets at FVTPL, financial assets at amortized cost and investments in equity instruments at FVTOCI.
① Financial assets at FVTPL
Financial assets are classified as at FVTPL when the financial asset is mandatorily classified as at FVTPL. Financial assets mandatorily classified as at FVTPL include investments in equity instruments which are not designated as at FVTOCI and debt instruments that do not meet the amortized cost criteria or the FVTOCI criteria.
Financial assets at FVTPL are subsequently measured at fair value, and any remeasurement gains or losses on such financial assets are recognized in profit or loss.
② Financial assets at amortized cost
Financial assets that meet the following conditions are subsequently measured at amortized cost:
i. The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Subsequent to initial recognition, financial assets at amortized cost are measured at amortized cost, which equals to their gross carrying amount determined by the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.
③ 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.
Investments in equity instruments at FVTOCI are subsequently measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in other equity. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, they will be transferred to retained earnings.
Dividends on these investments in equity instruments 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.
b. Impairment of financial assets
At the end of each reporting period, the Group recognizes a loss allowance for
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expected credit losses on financial assets at amortized cost (including accounts receivable).
The Group always recognizes lifetime expected credit losses (ECLs) for accounts receivable. For all other financial assets, if the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance at an amount equal to 12-month ECLs. If the credit risk has increased significantly since initial recognition, the Group recognizes lifetime ECLs.
Expected credit losses reflect the weighted average of credit losses with the respective risks of a default occurring as the weights. 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. In contrast, Lifetime ECLs represent the expected credit losses that will result from all possible default events over the expected life of a financial instrument.
The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.
c. Derecognition of financial assets
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.
On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset's carrying amount and the sum of the consideration received and receivable is recognized in profit or loss. On derecognition of an investment in an equity instrument at FVTOCI, the cumulative gain or loss which had been recognized in other comprehensive income is transferred directly to retained earnings, without recycling through profit or loss.
Equity instruments
Debt and equity instruments issued by the Group entity are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments issued by the Group entity are recognized at the proceeds received, net of direct issue costs.
The repurchase of the Company'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, issue or cancellation of the Company's own equity instruments.
Financial liabilities
a. Subsequent measurement
Financial liabilities are subsequently measured either at amortized cost using effective interest method or at FVTPL.
Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognized in profit or loss.
b. Derecognition of financial liabilities
The Group derecognizes financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire. The difference between the carrying amount of a financial liability derecognized and the consideration paid,
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including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.
Convertible bonds
The component parts of compound instruments (i.e., convertible bonds) issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
On initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recorded as a liability on an amortized cost basis using the effective interest method until extinguished upon conversion or upon the instrument's maturity date. Any embedded derivative liability is measured at fair value.
The conversion option classified as equity is determined by deducting the amount of the liability component from the fair value of the compound instrument as a whole. This is recognized and included in equity, net of income tax effects, and is not subsequently remeasured. In addition, the conversion option classified as equity will remain in equity until the conversion option is exercised; in which case, the balance recognized in equity will be transferred to capital surplus – share premiums. When the conversion option remains unexercised at maturity, the balance recognized in equity will be transferred to capital surplus – share premiums.
Transaction costs that relate to the issuance of the convertible bonds are allocated to the liability and equity components in proportion to the allocation of the gross proceeds. Transaction costs relating to the equity component are recognized directly in equity. Transaction costs relating to the liability component are included in the carrying amount of the liability component.
Derivative financial instruments
The Group enters into the foreign exchange forward contracts to manage its exposure to foreign exchange rate risks.
Derivatives are initially recognized at fair value at the date on which the derivative contracts are entered into and are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or loss is recognized in profit or loss immediately. When the fair value of a derivative financial instrument is positive, the derivative is recognized as a financial asset; when the fair value of a derivative financial instrument is negative, the derivative is recognized as a financial liability.
(7) Inventories
Inventories consist of raw materials, finished goods and work-in-process and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. Net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.
(8) Investments accounted for using equity method
An associate is an entity over which the Group has significant influence and that is not a subsidiary. Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control over those policies.
The Group uses the equity method to account for its investments in associates. Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group's share of the profit or loss and other comprehensive income of the associate as well as the distribution received. The Group
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also recognizes the changes in the Group's share of equity of associates. When the Group's share of losses of an associate equals or exceeds its interest in that associate (which includes any carrying amount of the investment accounted for by the equity method and long-term interests that, in substance, form part of the Group's net investment in the associate), the Group discontinues recognizing its share of further losses, if any. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.
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 at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment and is not amortized. Any excess of the Group's share of the net fair value of the identifiable assets and liabilities over the cost acquisition, after reassessment, this is recognized immediately in profit or loss.
The entire carrying amount of the investment (including goodwill) is tested for impairment as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss recognized 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.
When the Group subscribes to additional shares in an associate 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 net assets of the associate. The Group records such a difference as an adjustment to investments accounted for using equity method with the corresponding amount charged or credited to capital surplus. If the Group's ownership interest is reduced due to the additional subscription of the new shares of associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the associate had 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 by the equity method is insufficient, the shortage is debited to retained earnings.
The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities.
When a group entity transacts with its associate, profits and losses resulting from the transactions with the associate are recognized in the Group's consolidated financial statements only to the extent of interests in the associate that are not related to the Group.
(9) Property, plant and equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and accumulated impairment loss.
Property, plant and equipment in the course of construction are carried at cost, less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such properties are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for
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intended use.
Freehold land is not depreciated.
Depreciation on 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 estimate 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.
(10) Leases
a. 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 low-value asset leases and short-term 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 are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.
Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.
Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate. 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 a change in future lease payments resulting from a change in an index or a rate used to determine those payments, 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. Lease liabilities are presented on a separate line in the consolidated balance sheets.
b. The Group as lessor
Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Lease income from operating leases is recognized on a straight-line basis over the terms of the lease. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.
(11) Investment properties
Investment properties are properties held to earn rentals and/or for capital appreciation. Investment properties also include land held for a currently undetermined
~ 14 ~
future use.
Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost less accumulated depreciation and accumulated impairment loss. Depreciation on buildings 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.
(12) Intangible assets
Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful life, residual value, and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. The residual value of an intangible asset with a finite useful life shall be assumed to be zero unless the Group expects to dispose of the intangible asset before the end of its economic life.
On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.
(13) Impairment of property, plant and equipment, right-of-use assets, investment properties and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use assets, investment properties and other intangible assets, excluding goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Corporate assets are allocated to the individual cash-generating units on a reasonable and consistent basis of allocation.
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 asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount that would have been determined had no impairment loss been recognized for the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.
(14) 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 the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost (including current service cost, past service cost and gains or losses on settlements) and interest on the net defined benefit liability (asset) are recognized as employee benefits expense in the period 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 they occur. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.
~ 15 ~
Net defined benefit liability (asset) represents the actual deficit (surplus) in the Group’s defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.
(15) Provisions
Provisions are measured at the best estimate of the discounted cash flows of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.
(16) Revenue Recognition
The Group identifies the performance obligations in the contract with the customers, allocates transaction price to each performance obligation and recognizes revenue when performance obligations are satisfied.
a. Revenue from sale of goods
Revenue from sale of goods comes from sales of transformer, switchgear, transmission and distribution apparatus and electrical equipment. Sales of goods are recognized as revenue when the goods are delivered to the customer’s specific location or shipped because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Revenue and accounts receivables are recognized concurrently. Advance receipts received before the merchandise has been transferred are recognized as a contract liability.
b. Construction contract revenue
Customers control construction contract while they are construction in progress, and thus, 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 accounts 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 payments, which are retained by the customer as specified in the contract, are 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.
(17) Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
a. Current tax
According to the Income Tax Law of the Republic of China, an additional tax on unappropriated earnings is provided for as income tax 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.
b. Deferred tax
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements 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, unused loss
~ 16 ~
carryforwards and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates, 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 only recognized 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 asset 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 assets and liabilities are measured at the tax rates that are expected to apply in the period in which the asset realized or the liability is settled, 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 assets and liabilities reflects the tax consequences that would follow from 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.
c. Current and deferred tax
Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity; in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity, respectively.
- CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about 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.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.
Estimated impairment of accounts receivable
The provision for impairment of account receivable is based on assumptions about risk of default and expected loss. The Group uses judgment in making these assumptions and in selecting the inputs to the impairment calculation, based on the Group’s historical experience, existing market conditions as well as forward looking estimates as of the end of each reporting period. Where the actual future cash inflows are less than expected, a material impairment loss may arise.
As of December 31, 2025 and 2024, the carrying amounts of accounts receivable were NT$4,610,295 thousand and NT$3,832,658 thousand, respectively.
~ 17 ~
6. SIGNIFICANT ACCOUNTS DISCLOSURES
(1) Cash and cash equivalents
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Petty cash and cash on hand | $ 1,544 | $ 1,484 |
| Checking accounts and demand deposits | 1,391,450 | 999,008 |
| Cash equivalents | ||
| (Time deposits with original maturities less than one year) | 301,239 | 22,750 |
| Total | $ 1,694,233 | $ 1,023,242 |
(2) Financial assets and liabilities at fair value through profit or loss (FVTPL)
| Financial assets | 2025.12.31 | 2024.12.31 |
|---|---|---|
| Financial assets mandatorily classified as at FVTPL | ||
| Redemption and put options of convertible bonds | $ — | $ 69 |
| Foreign exchange forward contracts | 3,058 | — |
| Limited Partnership | 13,500 | — |
| $ 16,558 | $ 69 | |
| Current | $ 3,058 | $ 69 |
| Non-current | $ 13,500 | $ — |
| Financial liabilities | ||
| Financial liabilities mandatorily classified as at FVTPL | ||
| Foreign exchange forward contracts | $ — | $ (98) |
| Redemption and put options of convertible bonds | (7,800) | — |
| $ (7,800) | $ (98) |
a. The Group entered into foreign exchange forward contracts to manage exposures to exchange rate fluctuations of foreign currency denominated assets and liabilities. However, these contracts did not meet the criteria for hedge effectiveness and, therefore, were not accounted for using hedge accounting.
b. Outstanding foreign exchange forward contracts consisted of the following:
| Maturity Date | Contract Amount | |||
|---|---|---|---|---|
| 2025.12.31 | ||||
| Sell NTD/Buy USD | 2026.1.30-2026.09.30 | USD | 3,960 /NTD | 120,530 |
| 2024.12.31 | ||||
| Sell NTD/Buy CNY | 2024.10.22-2025.02.20 | CNY | 3,500 /NTD | 15,791 |
(3) Financial assets at fair value through other comprehensive income (FVTOCI)
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Listed shares | $ 135,968 | $ 142,350 |
| Unlisted shares | 122,134 | 131,038 |
| Total | $ 258,102 | $ 273,388 |
As of December 31, 2025 and 2024, FVTOCI were not pledged as collateral for bank borrowings.
(4) Notes receivable and accounts receivable
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Notes receivable | $ 64,982 | $ 95,882 |
| Less: Allowance for impairment loss | (319) | (485) |
| Notes receivable, net | $ 64,663 | $ 95,397 |
| Accounts receivable | $ 4,624,035 | $ 3,938,674 |
| Less: Unrealized interest income | (7,567) | (35,800) |
| Allowance for impairment loss | (101,824) | (83,146) |
| Accounts receivable, net | $ 4,514,644 | $ 3,819,728 |
| Accounts receivable from related parties | $ 95,651 | $ 12,930 |
The Group applies the simplified approach to allowing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss allowances for all accounts receivables. The expected credit losses on accounts receivables are estimated with reference to past default experiences of the debtor and an analysis of the debtor's current financial position, adjusted for general economic conditions of the industry in which the debtors operate and an assessment of both the current as well as the forecasted direction of economic conditions at the reporting date.
All notes receivable were not past due.
The following table details the loss allowance of accounts receivables:
2025.12.31
| Not Past Due | Past Due 0-3 Months | Past Due 3-6 Months | Past Due 6-9 Months | Past Due 9-12 Months | Past Due 1-2 years | Past Due Over 2 years | Total | |
|---|---|---|---|---|---|---|---|---|
| Gross carrying amount | $ 2,736,723 | $1,114,814 | $ 329,113 | $ 245,575 | $ 170,244 | $ 66,541 | $ 59,551 | $ 4,722,561 |
| Loss allowance | (34,323) | (25,900) | (15,164) | (9,209) | (7,946) | (3,327) | (5,955) | (101,824) |
| Amortized cost | $ 2,702,400 | $1,088,914 | $ 313,949 | $ 236,366 | $ 162,298 | $ 63,214 | $ 53,596 | $ 4,620,737 |
2024.12.31
| Not Past Due | Past Due 0-3 Months | Past Due 3-6 Months | Past Due 6-9 Months | Past Due 9-12 Months | Past Due 1-2 years | Past Due Over 2 years | Total | |
|---|---|---|---|---|---|---|---|---|
| Gross carrying amount | $ 2,476,307 | $ 900,502 | $ 237,206 | $ 170,041 | $ 87,058 | $ 41,795 | $ 38,695 | $ 3,951,604 |
| Loss allowance | (4,955) | (6,987) | (4,482) | (22,551) | (11,523) | (11,294) | (21,354) | (83,146) |
| Amortized cost | $ 2,471,352 | $ 893,515 | $ 232,724 | $ 147,490 | $ 75,535 | $ 30,501 | $ 17,341 | $ 3,868,458 |
The movements of the loss allowance of notes receivable and accounts receivables were as follows:
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Balance, beginning of the year | $ 83,631 | $ 97,297 |
| Loss allowance recognized (reversal) | 12,926 | (5,923) |
| Amounts recovered | 5,868 | — |
| Amounts written off | (400) | (8,004) |
| Effect of foreign currency exchange differences | 118 | 261 |
| Balance, end of the year | $ 102,143 | $ 83,631 |
(5) Other receivables, net
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Pledged time deposits | $ 4,812 | $ 4,734 |
| Loan receivable | 7,385 | 20,466 |
| Restricted deposit | 10,410 | 9,863 |
| Others | 11,492 | 23,575 |
| Other receivables, net | $ 34,099 | $ 58,638 |
| Current | $ 33,659 | $ 58,231 |
| Non-current | 440 | 407 |
| Total | $ 34,099 | $ 58,638 |
(6) Inventories
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Finished goods | $ 529,467 | $ 427,831 |
| Work-in-process | 341,406 | 475,426 |
| Raw materials | 1,301,379 | 1,414,346 |
| Inventory in transit | 28,077 | 56,745 |
| Inventories, net | $ 2,200,329 | $ 2,374,348 |
For the cost of inventories recognized as cost of goods sold for the years ended December 31, 2025 and 2024, please refer to Note 6(20).
For the years ended December 31, 2025 and 2024, write-down of inventories to net realizable value and reversal of write-down of inventories resulting from disposal of slowing-moving inventories were included in the cost of goods sold as follows:
| Inventory losses (reversal of write-down of inventories) | 2025 | 2024 |
|---|---|---|
| $ (92) | $ 287 |
As of the above-mentioned balance sheet date, inventory has not been pledged as collateral for bank loans.
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(7) Investments accounted for using equity method
| Name of Associates | 2025.12.31 | 2024.12.31 | ||
|---|---|---|---|---|
| % of Ownership | Amount | % of Ownership | Amount | |
| Nissin-Allis Electric Co., Ltd. | 30.00% | $ 321,698 | 30.00% | $ 296,874 |
| Nissin Allis Union Ion Equipment Co., Ltd. | 40.00% | 98,327 | 40.00% | 92,327 |
| AYM International Corporation | 40.00% | — | 40.00% | — |
| Intelici Corporation | 29.16% | — | 29.16% | — |
| Total | $ 420,025 | $ 389,201 |
The aforementioned associates were not listed companies and immaterial to the Group.
Aggregate information of associates that are not individually material:
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Equity | $ 1,326,325 | $ 1,230,143 |
| 2025 | 2024 | |
| The Group’s share of : | ||
| Net income for the year | $ 60,281 | $ 71,197 |
| Other comprehensive income | 74 | 3,205 |
| Total comprehensive income for the year | $ 60,355 | $ 74,402 |
(8) Property, plant and equipment
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Land | $ 797,517 | $ 789,714 |
| Buildings | 694,309 | 708,202 |
| Machinery and equipment | 133,793 | 121,915 |
| Transportation equipment | 11,027 | 12,380 |
| Other equipment | 93,765 | 96,630 |
| Construction in progress | — | — |
| Total carrying amounts | $ 1,730,411 | $ 1,728,841 |
| Cost | Land | Buildings |
| --- | --- | --- |
| Balance at January 1, 2025 | $ 789,714 | $ 1,159,802 |
| Additions | 7,803 | 12,303 |
| Disposals | — | — |
| Effect of foreign currency exchange differences | — | — |
| Balance at December 31, 2025 | $ 797,517 | $ 1,172,105 |
| Accumulated depreciation and impairment | Land | Buildings | Machinery and Equipment | Transportation Equipment | Other Equipment | Construction in Progress | Total |
|---|---|---|---|---|---|---|---|
| Balance at January 1, 2025 | $ — | $ 451,600 | $ 424,865 | $ 36,315 | $ 119,285 | $ — | $ 1,032,065 |
| Depreciation expense | — | 26,196 | 24,174 | 2,653 | 13,749 | — | 66,772 |
| Disposals | — | — | (62,594) | (1,649) | (3,933) | — | (68,176) |
| Effect of foreign currency exchange differences | — | — | 1,303 | 13 | 296 | — | 1,612 |
| Balance at December 31, 2025 | $ — | $ 477,796 | $ 387,748 | $ 37,332 | $ 129,397 | $ — | $ 1,032,273 |
| Carrying amounts at December 31, 2025 | $ 797,517 | $ 694,309 | $ 133,793 | $ 11,027 | $ 93,765 | $ — | $ 1,730,411 |
| Cost | Land | Buildings | Machinery and Equipment | Transportation Equipment | Other Equipment | Construction in Progress | Total |
| Balance at January 1, 2024 | $ 757,675 | $ 870,735 | $ 511,047 | $ 47,680 | $ 171,249 | $ 285,537 | $ 2,643,923 |
| Additions | 32,039 | 5,576 | 42,800 | 1,990 | 47,356 | (4,711) | 125,050 |
| Disposals | — | — | (7,135) | (982) | (3,506) | — | (11,623) |
| Internal transfer | — | 280,182 | — | — | 644 | (280,826) | — |
| Transfer from investment properties | — | 3,309 | — | — | — | — | 3,309 |
| Effect of foreign currency exchange differences | — | — | 68 | 7 | 172 | — | 247 |
| Balance at December 31, 2024 | $ 789,714 | $ 1,159,802 | $ 546,780 | $ 48,695 | $ 215,915 | $ — | $ 2,760,906 |
| Accumulated depreciation and impairment | |||||||
| Balance at January 1, 2024 | $ — | $ 427,103 | $ 411,573 | $ 34,758 | $ 110,970 | $ — | $ 984,404 |
| Depreciation expense | — | 23,011 | 20,351 | 2,514 | 11,357 | — | 57,233 |
| Disposals | — | — | (7,109) | (964) | (3,164) | — | (11,237) |
| Transfer from investment properties | — | 1,486 | — | — | — | — | 1,486 |
| Effect of foreign currency exchange differences | — | — | 50 | 7 | 122 | — | 179 |
| Balance at December 31, 2024 | $ — | $ 451,600 | $ 424,865 | $ 36,315 | $ 119,285 | $ — | $ 1,032,065 |
| Carrying amounts at December 31, 2024 | $ 789,714 | $ 708,202 | $ 121,915 | $ 12,380 | $ 96,630 | $ — | $ 1,728,841 |
a. The above items of property, plant and equipment are depreciated on a straight-line basis over the estimated useful lives as follows:
Buildings 3-55 years
Machinery and equipment 3-13 years
Transportation equipment 5-13 years
Other equipment 3-13 years
b. For the carrying amount of property, plant and equipment pledged as collateral for bank borrowings, please refer to Note 8.
c. For the year ended December 31, 2024, capitalized interest was NT$1,324 thousand; the capitalization rate was 1.836%.
d. As of December 31, 2025 and 2024, the titles to farmland with carrying amounts of NT$46,006 thousand were temporarily registered under the names of Herr-Yeh Sung and Mei-Qiu Sung, who had signed agreements and pledged the land to the Company.
(9) Right-of-use assets
| 2025.12.31 | 2024.12.31 | ||||
|---|---|---|---|---|---|
| Buildings | $ | 2,369 | $ | 2,987 | |
| Transportation equipment | 1,009 | 1,041 | |||
| Other equipment | 5,006 | 5,086 | |||
| Total carrying amounts | $ | 8,384 | $ | 9,114 | |
| Cost | Buildings | Transportation Equipment | Other Equipment | Total | |
| Balance at January 1, 2025 | $ 3,399 | $ 2,325 | $ 7,712 | $ 13,436 | |
| Additions | 476 | 2,505 | 2,981 | ||
| Decrease | — | (584) | (2,457) | (3,041) | |
| Effect of foreign currency exchange differences | — | 171 | 115 | 286 | |
| Balance at December 31, 2025 | $ 3,399 | $ 2,388 | $ 7,875 | $ 13,662 | |
| Accumulated depreciation | |||||
| Balance at January 1, 2025 | $ 412 | $ 1,284 | $ 2,626 | $ 4,322 | |
| Depreciation expense | 618 | 571 | 2,650 | 3,839 | |
| Decrease | — | (584) | (2,457) | (3,041) | |
| Effect of foreign currency exchange differences | — | 108 | 50 | 158 | |
| Balance at December 31, 2025 | $ 1,030 | $ 1,379 | $ 2,869 | $ 5,278 | |
| Carrying amounts at December 31, 2025 | $ 2,369 | $ 1,009 | $ 5,006 | $ 8,384 | |
| Cost | Buildings | Transportation Equipment | Other Equipment | Total | |
| Balance at January 1, 2024 | $ — | $ 2,138 | $ 16,249 | $ 18,387 | |
| Additions | 3,399 | 640 | 5,264 | 9,303 | |
| Decrease | — | (531) | (13,858) | (14,389) | |
| Effect of foreign currency exchange differences | — | 78 | 57 | 135 | |
| Balance at December 31, 2024 | $ 3,399 | $ 2,325 | $ 7,712 | $ 13,436 | |
| Accumulated depreciation | |||||
| Balance at January 1, 2024 | $ — | $ 874 | $ 13,490 | $ 14,364 | |
| Depreciation expense | 412 | 729 | 2,980 | 4,121 | |
| Decrease | — | (370) | (13,858) | (14,228) | |
| Effect of foreign currency exchange differences | — | 51 | 14 | 65 | |
| Balance at December 31, 2024 | $ 412 | $ 1,284 | $ 2,626 | $ 4,322 | |
| Carrying amounts at December 31, 2024 | $ 2,987 | $ 1,041 | $ 5,086 | $ 9,114 |
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(10) Investment properties
| 2025.12.31 | 2024.12.31 | |||
|---|---|---|---|---|
| Land | $ | 308,269 | $ | 308,269 |
| Buildings | 37,196 | 39,254 | ||
| Total carrying amounts | $ | 345,465 | $ | 347,523 |
| Cost | Land | Buildings | Total | |
| Balance at January 1, 2025 | $ 308,269 | $ | 70,768 | $ 379,037 |
| Additions | — | — | — | |
| Balance at December 31, 2025 | $ 308,269 | $ | 70,768 | $ 379,037 |
| Accumulated depreciation | ||||
| Balance at January 1, 2025 | $ — | $ | 31,514 | $ 31,514 |
| Depreciation expense | — | 2,058 | 2,058 | |
| Balance at December 31, 2025 | $ — | $ | 33,572 | $ 33,572 |
| Carrying amounts at December 31, 2025 | $ 308,269 | $ | 37,196 | $ 345,465 |
| Cost | Land | Buildings | Total | |
| Balance at January 1, 2024 | $ 308,269 | $ | 74,077 | $ 382,346 |
| Additions | — | — | — | |
| Transfer to property, plant and equipment | — | (3,309) | (3,309) | |
| Balance at December 31, 2024 | $ 308,269 | $ | 70,768 | $ 379,037 |
| Accumulated depreciation | ||||
| Balance at January 1, 2024 | $ — | $ | 30,943 | $ 30,943 |
| Depreciation expense | — | 2,057 | 2,057 | |
| Transfer to property, plant and equipment | (1,486) | (1,486) | ||
| Balance at December 31, 2024 | $ — | $ | 31,514 | $ 31,514 |
| Carrying amounts at December 31, 2024 | $ 308,269 | $ | 39,254 | $ 347,523 |
a. The investment properties held by the Group are depreciated on a straight-line basis over the estimated useful lives of 45 to 60 years.
b. For the carrying amount of investment properties pledged as collateral for bank borrowings, please refer to Note 8.
c. The fair values of the investment properties owned by the Group were NT$687,988 thousand and NT$734,142 thousand as of December 31, 2025 and 2024, respectively. The fair values of the investment properties were measured by management using the comparison approach with unobservable inputs (Level 3).
(11) Intangible assets
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Computer software | $ 8,248 | $ 8,649 |
| Other intangible assets | 28,221 | 18,249 |
| Total carrying amounts | $ 36,469 | $ 26,898 |
| Cost | Computer Software | Other Intangible Assets | Total |
|---|---|---|---|
| Balance at January 1, 2025 | $ 50,212 | $ 77,571 | $ 127,783 |
| Additions | 2,195 | 18,696 | 20,891 |
| Decrease | (1,269) | — | (1,269) |
| Effect of foreign currency exchange differences | 2 | 3,045 | 3,047 |
| Balance at December 31, 2025 | $ 51,140 | $ 99,312 | $ 150,452 |
| Accumulated amortization | |||
| Balance at January 1, 2025 | $ 41,563 | $ 59,322 | $ 100,885 |
| Amortization expense | 2,596 | 8,778 | 11,374 |
| Decrease | (1,269) | — | (1,269) |
| Effect of foreign currency exchange differences | 2 | 2,991 | 2,993 |
| Balance at December 31, 2025 | $ 42,892 | $ 71,091 | $ 113,983 |
| Carrying amounts at December 31, 2025 | $ 8,248 | $ 28,221 | $ 36,469 |
| Cost | Computer Software | Other Intangible Assets | Total |
| Balance at January 1, 2024 | $ 45,102 | $ 73,642 | $ 118,744 |
| Additions | 9,046 | 15,826 | 24,872 |
| Decrease | (4,072) | (11,896) | (15,968) |
| Effect of foreign currency exchange differences | 136 | (1) | 135 |
| Balance at December 31, 2024 | $ 50,212 | $ 77,571 | $ 127,783 |
| Accumulated amortization | |||
| Balance at January 1, 2024 | $ 43,403 | $ 67,986 | $ 111,389 |
| Amortization expense | 2,230 | 3,122 | 5,352 |
| Decrease | (4,072) | (11,896) | (15,968) |
| Effect of foreign currency exchange differences | 2 | 110 | 112 |
| Balance at December 31, 2024 | $ 41,563 | $ 59,322 | $ 100,885 |
| Carrying amounts at December 31, 2024 | $ 8,649 | $ 18,249 | $ 26,898 |
The above items of intangible assets are amortized on a straight-line basis over the estimated useful lives as follows:
Computer software
2-7 years
Other intangible assets
3-10 years
(12) Retirement benefit plans
a. Defined contribution plans
The Company and domestic subsidiaries adopted a pension plan under the R.O.C. Labor Pension Act (the "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. For employee benefit expenses under the defined contribution plan for the years ended
December 31, 2025 and 2024, please refer to Note 6(24).
b. Defined benefit plans
The defined benefit plan adopted by the Company and certain domestic subsidiaries in accordance with the R.O.C. Labor Standards Law is operated by the government. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. Except Air King Industrial Co., Ltd. has terminated the pension contribution from 2011, the Company and Ares Technology Co., Ltd. contribute amounts equal to 2%, of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee's name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the following 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:
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Present value of defined benefit obligation | $ (399,974) | $ (403,481) |
| Fair value of plan assets | 465,207 | 440,827 |
| Net defined benefit assets | $ 65,233 | $ 37,346 |
Movements in the present value of the defined benefit obligation were as follows:
| 2025 | 2024 | |
|---|---|---|
| Balance, beginning of year | $ 403,481 | $ 418,112 |
| Current service cost | 148 | 245 |
| Interest expense | 5,996 | 4,586 |
| Remeasurement | ||
| Actuarial loss (gain) - changes in financial assumptions | 2,944 | (6,616) |
| Actuarial loss - experience adjustments | 7,267 | 14,795 |
| Benefits paid | (19,862) | (27,641) |
| Balance, end of year | $ 399,974 | $ 403,481 |
Movements in the fair value of the plan assets were as follows:
| 2025 | 2024 | |
|---|---|---|
| Balance, beginning of year | $ 440,827 | $ 406,975 |
| Interest income | 6,677 | 4,548 |
| Remeasurement | ||
| Return on plan assets (excluding amounts included in net interest) | 31,290 | 37,736 |
| Contributions from employer | 6,275 | 19,209 |
| Benefits paid | (19,862) | (27,641) |
| Balance, end of year | $ 465,207 | $ 440,827 |
For information on the utilization of the labor pension fund assets, including the yield of the fund and assets allocation, please refer to the website of the Bureau.
The pension costs of the defined benefit plans were recognized as follows:
| 2025 | 2024 | |
|---|---|---|
| Current service cost | $ 148 | $ 245 |
| Net interest expense (income) | (681) | 38 |
| Total | $ (533) | $ 283 |
Through the defined benefit plans under the Labor Standards Law, 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:
| Measurement Date | ||
|---|---|---|
| 2025.12.31 | 2024.12.31 | |
| Discount rate | 1.3% | 1.5%~1.6% |
| Expected rate of salary increase | 0.5%~3.0% | 0.5%~3.0% |
If possible reasonable change in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Discount rates | ||
| 0.1 % increase | $ (1,535) | $ (1,692) |
| 0.1 % decrease | 1,552 | 1,710 |
| Expected rate of salary increase | ||
| 0.1 % increase | $ 1,261 | $ 1,385 |
| 0.1 % decrease | (1,251) | (1,373) |
~ 28 ~
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| The expected contributions to the plan for the next year | $3,360 | $15,300 |
| The average duration of the defined benefit obligation | 3.7~6.2 years | 4.1~7.2 years |
(13) Other assets
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Golf club card | $ 12,847 | $ 12,847 |
| Others | 191 | 4,250 |
| Less: Accumulated impairment | (3,099) | (3,099) |
| Total | $ 9,939 | $ 13,998 |
| Current | $ 191 | $ 4,250 |
| --- | --- | --- |
| Non-current | 9,748 | 9,748 |
| Total | $ 9,939 | $ 13,998 |
(14) Short-term loans
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Purchase loans | $ 18,288 | $ — |
| Unsecured loans | 1,380,000 | 1,040,000 |
| Secured loans | 200,000 | 930,000 |
| Total | $ 1,598,288 | $ 1,970,000 |
| Annual interest rate | 1.82%~4.65% | 1.875%~2.32% |
(15) Provisions
| Warranty provision | 2025 | 2024 |
|---|---|---|
| Balance, beginning of the year | $ 12,100 | $ 12,100 |
| Provisions recognized | 6,833 | 5,922 |
| Utilized | (6,833) | (5,922) |
| Balance, end of the year | $ 12,100 | $ 12,100 |
Provisions were estimated based on historical experience, management judgment, and any known factors that would significantly affect the warranty.
(16) Bonds payable
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| 2nd domestic unsecured convertible bonds | $ 1,094,676 | $ — |
| 1st domestic unsecured convertible bonds | — | 9,690 |
| Bonds payable | $ 1,094,676 | $ 9,690 |
~ 29 ~
2nd domestic unsecured convertible bonds
On January 13, 2025, the Company issued its second domestic 5-year unsecured zero-coupon convertible bonds, comprising 12,000 units with a face value of NT$100 thousand each and a total principal amount of NT$1,200,000 thousand. The bonds were issued at 100.5% of their face value.
Bondholders are entitled to convert bonds into the Company's ordinary shares at price per share from April 14, 2025 (three months after the issuance date) to January 13, 2030 (the maturity date), except for the period of suspension of transfer stipulated by legal order or conversion measures. The conversion price was set at NT$ 113.2 per share, and the subsequent conversion price will be adjusted in accordance with the provisions of the issuance measures in case of ex-rights or ex-dividends in the issuance measures.
If the closing price of the Company's ordinary shares exceeds the conversion price by 30% or more for 30 consecutive trading days or the aggregate outstanding balance of bonds payable is less than 10% of the original issuance amount, the Company has the right to redeem the outstanding bonds payable at face value in cash during the period from April 14, 2025 (three months after the issuance date) to December 4, 2029 (40 days prior to the maturity date).
The bondholders have the right to require the Company to redeem any bonds in cash at 100.7519% of the face value on January 13, 2028 (the third anniversary of the issuance date).
The amount of the face value of the convertible bonds has to be fully paid off in cash at maturity by the Company.
The effective interest rate of the liability component was 2.305% per annum on initial recognition.
| Amount | |
|---|---|
| Proceeds from issuance (less transaction costs) | $ 1,200,713 |
| Equity component (less transaction costs allocated to the equity component) | (116,242 ) |
| Redemption and put options | (13,680 ) |
| Liability component at the date of issue (less transaction costs allocated to the liability component) | 1,070,791 |
| Interest charged at an effective interest | 23,885 |
| Liability component on December 31, 2025 | $ 1,094,676 |
1st domestic unsecured convertible bonds.
On August 17, 2023, the Company issued its first domestic 5-year unsecured zero-coupon convertible bonds, comprising 10,000 units with a face value of NT$100 thousand each and a total principal amount of NT$1,000,000 thousand. The bonds were issued at 100.5% of their face value.
Bondholders are entitled to convert bonds into the Company's ordinary shares at price per share from November 18, 2023 (three months after the issuance date) to August 17, 2028 (the maturity date), except for the period of suspension of transfer stipulated by legal order or conversion measures. The conversion price was set at NT$ 67 per share, and the subsequent conversion price will be adjusted in accordance with the provisions of the issuance measures in case of ex-rights or ex-dividends in the issuance measures.
If the closing price of the Company’s ordinary shares exceeds the conversion price by 30% or more for 30 consecutive trading days or the aggregate outstanding balance of bonds payable is less than 10% of the original issuance amount, the Company has the right to redeem the outstanding bonds payable at face value in cash during the period from November 18, 2023 (three months after the issuance date) to July 8, 2028 (40 days prior to the maturity date).
The bondholders have the right to require the Company to redeem any bonds in cash at 100.7519% of the face value on August 17, 2026 (the third anniversary of the issuance date).
The amount of the face value of the convertible bonds has to be fully paid off in cash at maturity by the Company.
As of December 31, 2025 and 2024, the convertible bonds with face values of NT$1,000,000 thousand and NT$989,600 thousand, respectively, were converted to 15,636 thousand and 15,469 thousand ordinary shares.
The effective interest rate of the liability component was 1.972% per annum on initial recognition.
| Amount | |
|---|---|
| Proceeds from issuance (less transaction costs) | $ 999,615 |
| Equity component (less transaction costs allocated to the equity component) | (83,247) |
| Redemption and put options | (9,400) |
| Liability component at the date of issue (less transaction costs allocated to the liability component) | 906,968 |
| Interest charged at an effective interest | 6,382 |
| Conversion of bonds payable to ordinary shares | (341,286) |
| Liability component on December 31, 2023 | 572,064 |
| Interest charged at an effective interest rate | 2,287 |
| Conversion of bonds payable to ordinary shares | (564,661) |
| Liability component on December 31, 2024 | 9,690 |
| Interest charged at an effective interest rate | 33 |
| Conversion of bonds payable to ordinary shares | (9,723) |
| Liability component on December 31, 2025 | $ — |
(17) Long-term loans
| Item | 2025.12.31 | 2024.12.31 |
|---|---|---|
| Unsecured loans | $ 2,657 | $ 5,338 |
| Secured loans | 183,816 | 210,290 |
| Subtotal | 186,473 | 215,628 |
| Less: Current portion of long-term loans | (38,907) | (29,762) |
| Total | $ 147,566 | $ 185,866 |
| Annual Interest Rate | 2.07%~8.85% | 1.25%~8.85% |
(18) Equity
a. Ordinary shares
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Authorized share capital | $ 3,500,000 | $ 3,500,000 |
| Issued share capital | $ 2,731,085 | $ 2,675,437 |
The par value is NT$10 dollars.
As of December 31, 2025 and 2024, the convertible bonds with face values of NT$1,000,000 thousand and NT$989,600 thousand, respectively, were converted into 15,636 thousand and 15,425 thousand shares, which have been registered and recorded as ordinary shares.
The capitalization of retained earnings of NT$53,535 thousand and issuance of 5,353 thousand shares have been approved in the stockholders' meeting on June 11, 2025. The ex-right date was September 15, 2025 and the stock issuance date was October 14, 2025.
The capitalization of retained earnings of NT$51,834 thousand and issuance of 5,183 thousand shares have been approved in the stockholders' meeting on June 26, 2024. The ex-right date was September 15, 2024 and the stock issuance date was October 14, 2024.
b. Bond conversion entitlement certificates
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Bond conversion entitlement certificates | $ - | $ 435 |
As of December 31, 2024, the convertible bonds with a face value of NT$2,700 thousand was converted to 44 thousand ordinary shares. As the registration of the changes was not completed, bond conversion entitlement certificates were recognized.
c. Capital surplus
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| From the issuance of ordinary shares | $ 895,962 | $ 887,138 |
| From treasury stock transactions | 98,774 | 95,045 |
| From difference between consideration and carrying amount arising from actual acquisition or disposal of subsidiaries | 329 | 329 |
| Changes in equity of subsidiaries and associates accounted for using equity method | 718 | 610 |
| Equity component of convertible bonds payable | 116,242 | 866 |
| From donations | 1,594 | 1,594 |
| $ 1,113,619 | $ 985,582 |
Under Company Act, the capital surplus arising from shares issued in excess of par (including share premium from the issuance of ordinary shares and treasury stock transactions) and donations may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or
transferred to share capital once a year within a certain percentage of the Company's paid-in capital.
d. Retained Earnings and Dividend Policy
① Under the dividend policy as set forth in the Company's Articles of Incorporation, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations or in the necessary situation, and then any remaining profit together with any undistributed retained earnings shall be used for distribution of dividends and bonuses to shareholders.
The Company considers its long-term financial planning, future funding requirements, interest of shareholders as well as the amount of capital surplus, retained earnings and profit forecast when determining the stock dividends or cash dividends to be paid. However, distribution of earnings shall be made preferably by way of cash dividends. Distribution of earnings may also be made by way of stock dividend, provided that the ratio for stock dividends shall not exceed 50% of the total distribution.
② Appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company's paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company's paid-in capital, the excess may be transferred to capital or distributed in cash.
③ Items referred to under Rule No. 1010012865 issued by the FSC (Rule No. 1090150022 issued by the FSC was adopted in appropriations of earnings since 2021) and in the directive titled "Questions and Answers for Special Reserves Appropriated Following Adoption of IFRSs" should be appropriated to or reversed from a special reserve by the Company. For any subsequent reversal of the deduction in other shareholders' equity, the appropriate amount of earnings distribution should be reversed from the net debit balance.
④ The appropriations of earnings for 2024 and 2023 approved in the shareholders' general meetings on June 11, 2025 and June 26, 2024, respectively.
The appropriations of 2024 and 2023 earnings were as follows:
| 2024 | 2023 | |
|---|---|---|
| Legal reserve | $ 83,414 | $ 74,150 |
| Cash dividends | 455,046 | 414,672 |
| Stock dividends | 53,535 | 51,834 |
| $ 591,995 | $ 540,656 |
The appropriations of earnings for 2025 were proposed by the Company's board of directors on March 12, 2026 as follows:
| 2025 | |
|---|---|
| Legal reserve | $ 91,125 |
| Cash dividends | 546,217 |
| Stock dividends | 54,622 |
| $ 691,964 |
The appropriations of 2025 earnings are subject to the resolution of the shareholders' meeting to be held on June 11, 2026.
e. Special reserves
| 2025 | 2024 | |
|---|---|---|
| Balance, beginning of year | $ 448,977 | $ 449,780 |
| Reversal: | ||
| Depreciation expense on investment properties | (803) | (803) |
| Balance, end of year | $ 448,174 | $ 448,977 |
| f. Non-controlling interests | ||
| 2025 | 2024 | |
| Balance, beginning of year | $ 103,236 | $ 100,149 |
| Attributable to non-controlling interests | ||
| Net income | 13,894 | 9,582 |
| Exchange differences on translating foreign operation | 2,645 | 1,298 |
| Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income | (147) | (247) |
| Remeasurement of defined benefit plans | 43 | 55 |
| Sale of the Company’s shares held by subsidiaries | — | 53 |
| Cash dividends distributed by subsidiaries | (5,601) | (9,589) |
| Cash dividends distributed to subsidiaries | 3 | 2 |
| Changes in ownership interests in subsidiaries | (40,815) | 1,933 |
| Change in equity of subsidiaries accounted for using equity method | 22 | — |
| Balance, end of year | $ 73,280 | $ 103,236 |
g. Treasury stock
| (In thousands of shares) | ||
|---|---|---|
| 2025.12.31 | 2024.12.31 | |
| Shares held by the subsidiaries | 2,239 | 2,195 |
The Company's shares held by the subsidiary, Yishun Investment Co., Ltd., are accounted for as treasury stock. As of December 31, 2025 and 2024, the book value of treasury stock was NT$30,866 thousand; the market value of treasury stock was NT$222,736 thousand and NT$220,565 thousand, respectively.
The Company's shares held by subsidiaries are regarded as treasury stock with all shareholders' rights, except the rights to participate in the Company's capital increase in cash and right to vote.
~ 33 ~
(19) Operating revenue
| 2025 | 2024 | |
|---|---|---|
| Revenue from sale of goods | $ 7,863,897 | $ 7,501,387 |
| Construction contract revenue | 2,623,617 | 1,355,033 |
| Other operating revenue | 83,143 | 21,458 |
| $ 10,570,657 | $ 8,877,878 |
(20) Operating cost
| 2025 | 2024 | |
|---|---|---|
| Cost of goods sold | $ 6,360,452 | $ 6,060,918 |
| Construction contract cost | 2,213,154 | 1,106,090 |
| Other operating cost | 16,195 | 7,149 |
| $ 8,589,801 | $ 7,174,157 |
(21) Other income
| 2025 | 2024 | |
|---|---|---|
| Interest income | $ 15,796 | $ 7,187 |
| Rental income | 13,678 | 13,273 |
| Dividend income | 8,137 | 5,545 |
| Others | 8,750 | 7,572 |
| $ 46,361 | $ 33,577 |
(22) Other gains and losses
| 2025 | 2024 | |
|---|---|---|
| Net foreign exchange gain | $ 18,591 | $ 33,114 |
| Net gain on financial instruments at fair value through profit or loss | 8,273 | 5,052 |
| Net loss on disposal of property, plant and equipment | (703) | (386) |
| Depreciation on investment properties | (2,058) | (2,057) |
| Other losses | (3,905) | (3,147) |
| $ 20,198 | $ 32,576 |
(23) Finance costs
| 2025 | 2024 | |
|---|---|---|
| Interest on bank loans | $ 35,639 | $ 41,100 |
| Interest on lease liabilities | 247 | 421 |
| Interest on convertible bonds | 23,918 | 2,287 |
| Others | 43 | 45 |
| $ 59,847 | $ 43,853 |
(24) Additional information of expenses by nature
Net income included the following items:
| 2025 | 2024 | |
|---|---|---|
| Depreciation and amortization expense | ||
| Depreciation on property, plant and equipment | $ 66,772 | $ 57,233 |
| Depreciation on right-of-use assets | 3,839 | 4,121 |
| Depreciation on investment properties | 2,058 | 2,057 |
| Amortization on intangible assets | 11,374 | 5,352 |
| Total | $ 84,043 | $ 68,763 |
Operating expenses directly related to investment properties:
| 2025 | 2024 | |
|---|---|---|
| Direct operating expenses of investment properties that generated rental income | $ 1,191 | $ 1,196 |
| Direct operating expenses of investment properties that did not generate rental income | 5 | 5 |
| Total | $ 1,196 | $ 1,201 |
| Research and development costs expensed as incurred | $ 130,892 | $ 121,500 |
| Employee benefits expense | 2025 | 2024 |
| Post-employment benefits (Note 6(12)) | ||
| Defined contribution plans | $ 29,672 | $ 26,749 |
| Defined benefit plans | (533) | 283 |
| Subtotal | 29,139 | 27,032 |
| Salaries and bonus expense | 894,622 | 806,692 |
| Insurance expense | 74,833 | 68,097 |
| Others | 40,581 | 37,228 |
| Total | $ 1,039,175 | $ 939,049 |
According to Articles of Incorporation, the Company accrued employees' compensation and remuneration of directors at the rates of 4% and no higher than 2%, respectively, of net profit before income tax, employees' compensation, and remuneration of directors. The employees' compensation and remuneration of directors for the years ended December 31, 2025 and 2024 were as follows:
| 2025 | 2024 | |
|---|---|---|
| Employees’ compensation | $ 46,721 | $ 41,050 |
| Remuneration of directors | 23,361 | 20,525 |
| $ 70,082 | $ 61,575 |
If there is a change in the amounts after the annual financial statements were authorized for issue, the differences are recorded as a change in the accounting estimate.
There is no difference between the actual amounts of employees' compensation and remuneration of directors paid and the amounts recognized in the consolidated financial statements for the year ended December 31, 2024.
~ 35 ~
Information on the employees' compensation and remuneration of directors resolved by the Company's board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.
(25) Income taxes
a. Income tax expense recognized in profit or loss
① Major components of income tax expense :
| 2025 | 2024 | |
|---|---|---|
| Current tax | ||
| In respect of the current year | $ 224,999 | $ 163,899 |
| Adjustments for prior years | 3,051 | 1,088 |
| Subtotal | 228,050 | 164,987 |
| Deferred tax | ||
| Origination and reversal of temporary differences | 221 | 16,264 |
| Income tax expense | $ 228,271 | $ 181,251 |
② A reconciliation of accounting profit and income tax expense was as follows:
| 2025 | 2024 | |
|---|---|---|
| Income before tax | $ 1,135,477 | $ 992,057 |
| Income tax expense calculated at the statutory rate | $ 239,981 | $ 208,488 |
| Tax effect of adjusting items: | ||
| Tax-exempt income | (2,657) | (2,181) |
| Investment gain | — | 3,618 |
| Nondeductible items in determining taxable income | 3,959 | 1,384 |
| Origination and reversal of temporary differences | (17,818) | (44,671) |
| Income tax on unappropriated earnings | 8,647 | 3,956 |
| Loss carryforwards | (2,425) | (249) |
| Investment tax credit | (4,688) | (6,446) |
| Adjustments for prior years | 3,051 | 1,088 |
| Current tax | 228,050 | 164,987 |
| Deferred tax | ||
| Origination and reversal of temporary differences | 221 | 16,264 |
| Income tax expense | $ 228,271 | $ 181,251 |
③ Income tax recognized in other comprehensive income
| 2025 | 2024 | |
|---|---|---|
| Deferred income tax expense | ||
| Related to remeasurement of defined benefit plans | $ (4,008) | $ (81) |
④ Income tax recognized directly in equity
Current income tax
Disposal of equity instruments measured at fair value through other comprehensive income
| 2025 | 2024 |
|---|---|
| $ – | $ (4,975) |
The Group applied a tax rate of 20% for entities subject to the R.O.C. Income Tax Law; for other jurisdictions, the Group measures taxes by using the applicable tax rate for each individual jurisdiction.
b. Deferred tax assets
The movements of deferred tax assets (liabilities) were as follows:
2025
| Deferred tax assets | Opening Balance | Recognized in Profit or Loss | Recognized in Other Comprehensive Income (Loss) | Effect of Foreign Currency Exchange Differences | Closing Balance |
|---|---|---|---|---|---|
| Temporary differences | |||||
| Loss allowance | $ – | $ 9,417 | $ – | $ – | $ 9,417 |
| Allowance for inventory loss | 12,245 | – | – | – | 12,245 |
| Payable for annual leave | 5,216 | (101) | – | – | 5,115 |
| Unrealized exchange losses (gains) | (2,503) | 1,159 | – | – | (1,344) |
| Impairment loss | 4,417 | (1,000) | – | – | 3,417 |
| Others | 7,635 | (1,635) | – | 53 | 6,053 |
| Total | $ 27,010 | $ 7,840 | $ – | $ 53 | $ 34,903 |
| Deferred tax liabilities | Opening Balance | Recognized in Profit or Loss | Recognized in Other Comprehensive Income (Loss) | Effect of Foreign Currency Exchange Differences | Closing Balance |
| Land value increment tax | $ (174,220) | $ – | $ – | $ – | $ (174,220) |
| Net defined benefit asset | (674) | (7,653) | (4,008) | – | (12,335) |
| Others | 418 | (408) | – | – | 10 |
| Total | $ (174,476) | $ (8,061) | $ (4,008) | $ – | $ (186,545) |
| 2024 | |||||
| Deferred tax assets | Opening Balance | Recognized in Profit or Loss | Recognized in Other Comprehensive Income (Loss) | Effect of Foreign Currency Exchange Differences | Closing Balance |
| Temporary differences | |||||
| Allowance for inventory loss | $ 18,875 | $ (6,630) | $ – | $ – | $ 12,245 |
| Payable for annual leave | 4,932 | 284 | – | – | 5,216 |
| Unrealized exchange losses (gains) | 6,669 | (9,172) | – | – | (2,503) |
| Impairment loss | 5,000 | (583) | – | – | 4,417 |
| Others | 8,241 | (644) | – | 38 | 7,635 |
| Total | $ 43,717 | $ (16,745) | $ – | $ 38 | $ 27,010 |
~ 38 ~
| Deferred tax liabilities | Opening Balance | Recognized in Profit or Loss | Recognized in Other Comprehensive Income (Loss) | Effect of Foreign Currency Exchange Differences | Closing Balance |
|---|---|---|---|---|---|
| Land value increment tax | $ (174,220) | $ — | $ — | $ — | $ (174,220) |
| Others | (656) | 481 | (81) | — | (256) |
| Total | $ (174,876) | $ 481 | $ (81) | $ — | $ (174,476) |
c. Information about loss carryforwards
As of December 31, 2025, unused loss carryforwards and expiry year were as follows:
| Unused Amount | Expiry Year |
|---|---|
| $ 12,513 | 2026 |
| 12,546 | 2028 |
| 15,649 | 2029 |
| 6,061 | 2030 |
| 4,165 | 2031 |
| 2,383 | 2034 |
| 5,252 | 2035 |
| $ 58,569 |
d. Deductible temporary differences and unused loss carryforwards for which no deferred tax assets have been recognized
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Loss carryforwards | $ 54,818 | $ 50,551 |
| Deductible temporary differences | 8,379 | 45,638 |
| Total | $ 63,197 | $ 96,189 |
e. Income tax assessments
The income tax returns of the Company, Air King Industrial Co., Ltd., Ares Technology Co., Ltd., Allis Communications Co., Ltd. and Yishun Investment Co., Ltd. through 2023 have been assessed by the tax authority.
(26) Earnings per share
| 2025 | 2024 | |
|---|---|---|
| Basic earnings per share (NT$) | $ 3.30 | $ 2.98 |
| Diluted earnings per share (NT$) | $ 3.23 | $ 2.94 |
The earnings and weighted average number of ordinary shares outstanding in the computation of earnings per share were as follows:
| 2025 | 2024 | |
|---|---|---|
| Net income for the year attributable to owners of the Company | $ 893,312 | $ 801,224 |
| Net income in the computation of basic earnings per share | $ 893,312 | $ 801,224 |
| Effects of potentially dilutive ordinary shares | ||
| After-tax interest on convertible bonds | 23,754 | 2,264 |
| Valuation gain on redemption and put options of convertible bonds | (5,898) | (4,996) |
| Net income in the computation of diluted earnings per share | $ 911,168 | $ 798,492 |
| Shares | ||
| Weighted average number of ordinary shares in computation of basic earnings per share (in thousands of shares) | 270,842 | 268,626 |
| Effects of potentially dilutive ordinary shares | ||
| Convertible bonds | 10,656 | 2,044 |
| Employees’ compensation | 544 | 491 |
| Weighted average number of ordinary shares in the computation of diluted earnings per share (in thousands of shares) | 282,042 | 271,161 |
Retroactive adjustments were applied to the Company’s earnings per share for the years ended December 31, 2025 and 2024.
(27) Non-cash transaction
| 2025 | 2024 | |
|---|---|---|
| Partial cash investing activities: | ||
| Acquisition of property, plant and equipment | $ 68,908 | $ 125,050 |
| Decrease in other payables | 6,688 | 5,284 |
| Cash paid | $ 75,596 | $ 130,334 |
(28) Significant lease agreements
a. The Group as lessee
| 2025 | 2024 | |
|---|---|---|
| Expenses relating to short-term leases | $ 40,271 | $ 26,809 |
| Total cash outflow for leases | $ 44,223 | $ 31,660 |
b. The Group as lessor
As of December 31, 2025 and 2024, the future lease payments receivable under operating leases of investment properties were as follows:
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Not later than 1 year | $ 12,776 | $ 13,986 |
| 1-2 years | 9,572 | 12,390 |
| 2-3 years | 6,891 | 9,483 |
| 3-4 years | 1,856 | 6,891 |
| 4-5 years | — | 1,856 |
| Total | $ 31,095 | $ 44,606 |
(29) Capital management
In consideration of the industry dynamics and future developments, as well as external environment factors, the Company maintains an optimal capital structure to enhance long-term shareholder value by managing its capital in a manner to ensure that it has sufficient and necessary financial resources to fund its working capital needs, research and development activities, dividend payments, and other business requirements for continuing operations to reward shareholders and take into consideration the interests of other stakeholders. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders, issue new shares, return capital to shareholders, or repurchase shares.
(30) Financial instruments
a. Fair value of financial instruments
① The fair value measurements are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable, as described below:
- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
- Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
- Level 3 inputs are unobservable inputs for the asset or liability.
② Except as detailed below, the management of the Group considers that the carrying amounts of those financial instruments that are not measured at fair value approximate their fair values.
| 2025.12.31 | Fair Value | ||||
|---|---|---|---|---|---|
| Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |
| Financial liabilities at amortized cost -Convertible bonds | $ 1,094,676 | $ — | $ — | $ 1,094,640 | $ 1,094,640 |
2024.12.31
Fair Value
| Carrying Amount | Level 1 | Level 2 | Level 3 | Total | |
|---|---|---|---|---|---|
| Financial liabilities at amortized cost -Convertible bonds | $ 9,690 | $ — | $ — | $ 9,590 | $ 9,590 |
③ Financial instruments that are measured at fair value
The following table presents the Group's financial instruments measured at fair value on a recurring basis:
| 2025.12.31 | ||||
|---|---|---|---|---|
| Level 1 | Level 2 | Level 3 | Total | |
| Financial assets at FVTPL | ||||
| Foreign exchange forward contracts | $ — | $ 3,058 | $ — | $ 3,058 |
| Limited Partnership | — | — | 13,500 | 13,500 |
| Total | $ — | $ 3,058 | $ 13,500 | $ 16,558 |
| Financial assets at FVTOCI | ||||
| Listed shares | $ 135,968 | $ — | $ — | $ 135,968 |
| Unlisted shares | — | — | 122,134 | 122,134 |
| Total | $ 135,968 | $ — | $ 122,134 | $ 258,102 |
| Financial liabilities at FVTPL | ||||
| Redemption and put options of convertible bonds | $ — | $ — | $ 7,800 | $ 7,800 |
| 2024.12.31 | ||||
| Level 1 | Level 2 | Level 3 | Total | |
| Financial assets at FVTPL | ||||
| Redemption and put options of convertible bonds | $ — | $ — | $ 69 | $ 69 |
| Financial assets at FVTOCI | ||||
| Listed shares | $ 142,350 | $ — | $ — | $ 142,350 |
| Unlisted shares | — | — | 131,038 | 131,038 |
| Total | $ 142,350 | $ — | $ 131,038 | $ 273,388 |
| Financial liabilities at FVTPL | ||||
| Foreign exchange forward contracts | $ — | $ 98 | $ — | $ 98 |
There were no transfers between Level 1 and Level 2 for the year ended December 31, 2025. For the year ended December 31, 2024, due to the listing of emerging stocks, quoted prices in active markets became available. Accordingly, the fair value of NT$88,633 thousand was transferred from Level 2 to Level 1.
~ 41 ~
Reconciliation of Level 3 fair value measurements of financial instruments was as follows:
| Financial assets (liabilities) at FVTPL | ||
|---|---|---|
| 2025 | 2024 | |
| Balance, beginning of the year | $ 69 | $ (1,064) |
| Redemption and put options of convertible bonds | (13,680) | — |
| Convertible bonds converted into ordinary shares | (87) | (3,863) |
| Acquisition | 13,500 | — |
| Recognized in profit or loss | 5,898 | 4,996 |
| Balance, end of the year | $ 5,700 | $ 69 |
| Financial assets at FVTOCI | ||
| 2025 | 2024 | |
| Balance, beginning of the year | $ 131,038 | $ 86,283 |
| Acquisition | — | 13,001 |
| Recognized in other comprehensive income | (8,904) | 31,754 |
| Balance, end of the year | $ 122,134 | $ 131,038 |
④ Valuation techniques and inputs applied for the purpose of Level 2 fair value measurement
The fair values of derivatives - foreign exchange forward contracts were determined using discounted cash flow approach. Future cash flows are estimated based on observable forward exchange rates at the end of the reporting period and contract forward rates, discounted at a rate that reflects the credit risk of various counterparties.
⑤ Valuation techniques and inputs applied for the purpose of Level 3 fair value measurement
The fair values of unlisted equity securities were determined using the market approach. The market approach refers to the comparable market transaction price and related information to estimate the fair value of the investment target. The significant unobservable inputs are discounted prices for the lack of marketability.
The fair value of derivatives - redemption and put options of convertible bonds were evaluated using a binary tree convertible bond valuation model based on the share price and its volatility, conversion price, risk-free interest rate, risk discount rate and duration.
b. Categories of financial instruments
| Financial assets | 2025.12.31 | 2024.12.31 |
|---|---|---|
| FVTPL | $ 16,558 | $ 69 |
| FVTOCI | 258,102 | 273,388 |
| Amortized cost (Note1) | 6,535,501 | 5,120,218 |
| Total | $ 6,810,161 | $ 5,393,675 |
| Financial liabilities | 2025.12.31 | 2024.12.31 |
| FVTPL | $ 7,800 | $ 98 |
| Amortized cost (Note2) | 6,075,042 | 4,853,391 |
| Total | $ 6,082,842 | $ 4,853,489 |
Note1: The balances include cash and cash equivalents, notes and accounts receivable, other receivables, current tax assets and refundable deposits.
Note2: The balances include short-term loans, notes and accounts payable, other payables, current tax liabilities, bonds payable, long-term loans (including current portion of long-term loans), lease liabilities and guarantee deposits.
c. Financial risk management objectives and policies
The Group’s major financial risk management goal is to manage risks that relate to operating activities. These risks include currency risk, interest rate risk, credit risk and liquidity risk. In order to lower relevant financial risks, the Group identifies and assesses the risks and takes actions to manage uncertainty of the market with the objective to reduce the potentially adverse effects the market fluctuations may have on its financial performance.
The Group’s important financial activities are reviewed by the board of directors in accordance with related regulations and internal controls. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis.
d. Market risk
The Group’s activities exposed it primarily to the market risks of changes in foreign currency exchange rates and interest rates. The Group entered into foreign exchange forward contracts to hedge portion of foreign exchange risk.
① Foreign currency risk
The Group undertook transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arose. The Group used foreign exchange forward contracts to partially offset the risk of foreign currency exposure. These foreign exchange forward contracts are intended to reduce the influence of the exchange rate fluctuations on the Group’s income.
The information on assets and liabilities denominated in non-functional currency whose values would be materially affected by the exchange rate fluctuations at the end of the reporting period and sensitivity analysis were as follows (in thousands of respective foreign currencies or New Taiwan dollars):
| Financial assets | 2025.12.31 | |||||
|---|---|---|---|---|---|---|
| Foreign Currencies | Exchange Rate | Carrying Amounts (NTD) | Sensitivity Analysis | |||
| Variations | Impact on Profit (loss) | Impact on Equity | ||||
| Monetary items | ||||||
| USD | $ 22,842 | 31.445 | 718,267 | ±10% | ±71,827 | ±71,827 |
| EUR | 3,990 | 36.94 | 147,391 | ±10% | ±14,739 | ±14,739 |
| JPY | 4,193 | 0.2011 | 843 | ±10% | ±84 | ±84 |
| RMB | 343 | 4.50 | 1,544 | ±10% | ±154 | ±154 |
| SGD | 3,946 | 24.49 | 96,638 | ±10% | ±9,664 | ±9,664 |
| ZAR | 16,932 | 1.894 | 32,069 | ±10% | ±3,207 | ±3,207 |
| AUD | 4 | 21.06 | 84 | ±10% | ±8 | ±8 |
| Financial liabilities | ||||||
| Monetary items | ||||||
| USD | 14,204 | 31.445 | 446,645 | ±10% | ¥44,665 | ¥44,665 |
| EUR | 1,165 | 36.94 | 43,035 | ±10% | ¥4,304 | ¥4,304 |
| RMB | 7,764 | 4.50 | 34,938 | ±10% | ¥3,494 | ¥3,494 |
| SGD | 2,953 | 24.49 | 72,319 | ±10% | ¥7,232 | ¥7,232 |
| ZAR | 13,409 | 1.894 | 25,397 | ±10% | ¥2,540 | ¥2,540 |
2024.12.31
| Financial assets | Foreign Currencies | Exchange Rate | Carrying Amounts (NTD) | Sensitivity Analysis | ||
|---|---|---|---|---|---|---|
| Variations | Impact on Profit (loss) | Impact on Equity | ||||
| Monetary items | ||||||
| USD | $ 9,796 | 32.785 | 321,162 | ±10% | ±32,116 | ±32,116 |
| EUR | 4,436 | 34.14 | 151,445 | ±10% | ±15,145 | ±15,145 |
| JPY | 169,084 | 0.2096 | 35,440 | ±10% | ±3,544 | ±3,544 |
| SGD | 1,321 | 24.14 | 31,889 | ±10% | ±3,189 | ±3,189 |
| ZAR | 21,343 | 1.744 | 37,222 | ±10% | ±3,722 | ±3,722 |
| AUD | 4 | 20.42 | 82 | ±10% | ±8 | ±8 |
| Financial liabilities | ||||||
| Monetary items | ||||||
| USD | 1,200 | 32.785 | 39,342 | ±10% | ¥3,934 | ¥3,934 |
| EUR | 994 | 34.14 | 33,935 | ±10% | ¥3,394 | ¥3,394 |
| JPY | 168,700 | 0.2096 | 35,360 | ±10% | ¥3,536 | ¥3,536 |
| RMB | 9,926 | 4.484 | 44,508 | ±10% | ¥4,451 | ¥4,451 |
| SGD | 2,660 | 24.14 | 64,212 | ±10% | ¥6,421 | ¥6,421 |
| ZAR | 10,862 | 1.744 | 18,943 | ±10% | ¥1,894 | ¥1,894 |
The sensitivity analysis included only outstanding foreign currency denominated items at the end of the reporting period under the assumption of a 10% change in foreign currency rates.
② Interest rate risk
The Group is exposed to interest rate risks related to floating rate short-term and long-term loans. The risk is managed by the Group by maintaining an appropriate mix of fixed and floating rate borrowings.
For sensitivity analysis of interest rate risk, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. If interest rates had been a quarter of a percent higher/lower and all other variables were held constant, the Group's pre-tax profit for the years ended December 31, 2025 and 2024 would decrease/increase by NT$4,462 thousand and NT$5,464 thousand, respectively.
③ Other price risk
The Group is exposed to price risk through its investments in equity securities. The management of the Group manages risk by holding different risk portfolios.
If equity prices had been 5% higher/lower, pre-tax profit for the year ended December 31, 2025 would have increased/decreased by NT$675 thousand as a result of the changes in fair value of financial assets at FVTPL, and the other comprehensive income for the years ended December 31, 2025 and 2024 would have increased/decreased by NT$12,905 thousand and NT$13,669 thousand, respectively, as a result of the changes in fair value of financial assets at FVTOCI.
e. Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Group. The Group is exposed to credit risks from operating activities, primarily accounts receivables, and from investing
activities, primarily bank deposits, fixed-income investments and other financial instruments with banks. Credit risk is managed separately for business related and financial related exposures. As of the end of the reporting period, the Group's maximum credit risk exposure is equal to the carrying amount of the recognized financial assets as stated in the consolidated balance sheets.
① Business related credit risk
In order to maintain the credit quality of accounts receivable, the Group has established procedures to monitor and limit exposure to credit risk on accounts receivables. Credit evaluation is performed in the consideration of the relevant factors, such as customer's financial condition, transaction history and economic conditions. The Group grants credit to customers on the basis of the credit evaluation and collects payments in installments to reduce credit risk.
As of December 31, 2025 and 2024, the Group's ten largest customers accounted for 86.58% and 80.63% of its total accounts receivables, respectively.
② Financial credit risk
The Group's exposure to financial credit risk which pertained to bank deposits, fixed-income investments and other financial instruments were evaluated and monitored by Group's financial department. Since the counterparties are creditworthy banks and financial institutions with good credit rating, thus, there's no significant credit risk.
f. Liquidity risk management
The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group's operations and mitigate the effects of fluctuations in cash flows. In addition, the management monitors the utilization of bank borrowings and ensures compliance with loan covenants.
The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2025 and 2024, the amount of unused financing facilities were NT$5,024,639 thousand and NT$4,230,120 thousand, respectively.
① Liquidity risk table for non-derivative financial liabilities
The table below summarized the maturity profile of the Group's financial liabilities based on contractual undiscounted payments.
| 2025.12.31 | 2024.12.31 | |||||
|---|---|---|---|---|---|---|
| Less than 1 Year | More than 1 Year | Total | Less than 1 Year | More than 1 Year | Total | |
| Non-derivative financial liabilities | ||||||
| Short-term loans | $ 1,598,288 | $ — | $ 1,598,288 | $ 1,970,000 | $ — | $ 1,970,000 |
| Notes and accounts payable | 2,395,213 | 177,096 | 2,572,309 | 2,026,143 | 119,249 | 2,145,392 |
| Current tax liabilities | 138,144 | — | 138,144 | 84,676 | — | 84,676 |
| Other payables | 444,444 | 28,071 | 472,515 | 388,899 | 26,408 | 415,307 |
| Bonds payable | — | 1,200,000 | 1,200,000 | — | 10,400 | 10,400 |
| Long-term loans | 38,907 | 147,566 | 186,473 | 29,762 | 185,866 | 215,628 |
| Lease liabilities | 4,122 | 4,529 | 8,651 | 3,567 | 5,672 | 9,239 |
| Guarantee deposits | 529 | 3,457 | 3,986 | 2 | 3,457 | 3,459 |
| $ 4,619,647 | $ 1,560,719 | $ 6,180,366 | $ 4,503,049 | $ 351,052 | $ 4,854,101 |
② Liquidity risk table for derivative financial liabilities
The following table detailed the Group’s liquidity analysis for its derivative financial instruments. The table was based on the undiscounted contractual net cash inflows and outflows on derivative instruments that settle on a net basis, and the undiscounted gross inflows and outflows on those derivatives that require gross settlement. When the amount payable or receivable was not fixed, the amount disclosed was determined by reference to the projected interest rates as illustrated by the yield curves at the end of the year.
| Less than 1 Year | ||
|---|---|---|
| Derivative financial instruments | 2025.12.31 | 2024.12.31 |
| Gross settled foreign exchange forward contract | ||
| Inflows | $ 123,588 | $ 15,693 |
| Outflows | (120,530) | (15,791) |
| $ 3,058 | $ (98) |
- TRANSACTIONS WITH RELATED PARTIES
Transactions, balances, revenue and expenses between the Company and its subsidiaries have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties were disclosed below.
(1) Names and relationships of related parties
| Related Party | Relationship with the Group |
|---|---|
| Nissin-Allis Electric Co., Ltd. | Associate |
| Nissin Allis Union Ion Equipment Co., Ltd. | Associate |
| Le-Min Industrial Co., Ltd. | Related party in substance |
| Taiwan Marine Electric Co., Ltd. | Related party in substance |
| Impact Power Inc. | Related party in substance |
| Huede Industrial Co., Ltd. | The director of the Company |
| Yong Ming Investment Consultant Co., Ltd. | Related party in substance |
| Qing Wen Investment Co., Ltd. | Related party in substance |
| Dudu Investments Co., Ltd. | The director of the Company |
| CANTAL INTEGRANTION Pte Ltd. | Related party in substance |
| (Ceased to be a related party since January 1, 2025.) | |
| Cantel Electric Pte Ltd. | Related party in substance |
| (Ceased to be a related party since January 1, 2025.) | |
| Cantel SwitchGear Pte Ltd. | Related party in substance |
| (Ceased to be a related party since January 1, 2025.) | |
| Cantel United Pte Ltd. | Related party in substance |
| (Ceased to be a related party since January 1, 2025.) | |
| ACDC Dynamic Express | Related party in substance |
| PHD Power CC | Related party in substance |
| PHD Properties (Pty) Ltd. | Related party in substance |
| M.D.F.F. Pires | Related party in substance |
| Herr-Yeh Sung | Key management personnel |
(2) Operating revenue
| Line Items | Related Parties Categories | 2025 | 2024 |
|---|---|---|---|
| Operating revenue | Associates | $ 46,648 | $ 70,464 |
| Others | 78,115 | 23,506 | |
| $ 124,763 | $ 93,970 |
(3) Purchase and factory overhead
| Line Items | Related Parties Categories | 2025 | 2024 |
|---|---|---|---|
| Purchase and factory overhead | Associates | $ 251,707 | $ 240,638 |
| Others | 121,204 | 102,587 | |
| $ 372,911 | $ 343,225 |
(4) Receivables from related parties
| Line Items | Related Parties Categories | 2025.12.31 | 2024.12.31 |
|---|---|---|---|
| Notes receivable | Others | $ 1,916 | $ — |
| Accounts receivable from related parties | Associates | $ 32,050 | $ 9,447 |
| Others | 63,601 | 3,483 | |
| $ 95,651 | $ 12,930 | ||
| Other receivables | Associates | $ 125 | $ 202 |
| Others | 5,114 | — | |
| $ 5,239 | $ 202 |
The outstanding receivables from related parties are unsecured.
(5) Payable to related parties
| Line Items | Related Parties Categories | 2025.12.31 | 2024.12.31 |
|---|---|---|---|
| Notes payable | Associates | $ — | $ 4 |
| Others | — | 3,045 | |
| $ — | $ 3,049 | ||
| Accounts payable to related parties | Associates | $ 98,531 | $ 102,988 |
| Others | 40,061 | 36,673 | |
| $ 138,592 | $ 139,661 | ||
| Other payables | Associates | $ — | $ 48 |
| Others | 897 | 400 | |
| $ 897 | $ 448 |
(6) Others
| Line Items | Related Parties Categories | 2025 | 2024 |
|---|---|---|---|
| Selling and marketing expenses | Others | $ 1,534 | $ 2,080 |
| Research and development expenses | Others | $ 15 | $ 40 |
| Other income | Associates | $ 119 | $ 2,509 |
| Others | 46 | 46 | |
| $ 165 | $ 2,555 | ||
| 2025.12.31 | 2024.12.31 | ||
| Contract liability | Others | $ 12 | $ 12 |
The sales and purchase prices and payment terms to related parties were not significantly different from those to third parties. The rental collected monthly was based on those prevailing in the market.
(7) Acquisition of investments accounted for using equity method
| Related Parties Categories | 2025 | 2024 |
|---|---|---|
| Others | $ 40,815 | $ – |
(8) Compensation of key management personnel
| 2025 | 2024 | |
|---|---|---|
| Short-term benefits | $ 145,530 | $ 118,809 |
| Post-employment benefits | 3,106 | 2,960 |
| $ 148,636 | $ 121,769 |
The compensation of key management personnel was determined by the remuneration committee based on the performance of individuals and market trends.
(9) Other
As of December 31, 2025 and 2024, farmland with carrying amounts of NT$308 thousand was temporarily registered under the name of Herr-Yeh Sung, who had signed an agreement and pledged the land to the Company. Please refer to Note 6(8).
8. PLEDGED ASSETS
The following assets had been pledged or mortgaged as collateral for short-term and long-term loans, tender bonds provided on construction bidding or performance bonds:
| 2025.12.31 | 2024.12.31 | |
|---|---|---|
| Pledged time deposits (accounted for as other receivables) | $ 4,812 | $ 4,734 |
| Property, plant and equipment, net | 1,041,299 | 1,053,360 |
| Investment properties, net | 340,888 | 342,835 |
| Total | $ 1,386,999 | $ 1,400,929 |
~ 49 ~
9. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS
As of December 31, 2025, significant contingent liabilities and unrecognized commitments of the Group were as follows:
(1) The guaranteed notes issued were NT$6,561,748 thousand, including:
a. The guaranteed notes issued for bank loans were NT$5,825,723 thousand.
b. The guaranteed notes issued as performance guarantees for sales contracts were NT$736,025 thousand.
(2) Information related endorsements/guarantees provided, please refer to Table 2 attached.
(3) Unused letters of credit were US$3,990 thousand.
-
SIGNIFICANT LOSS FROM DISASTERS: None.
-
SIGNIFICANT SUBSEQUENT EVENTS: None.
-
OTHERS: None.
-
ADDITIONAL DISCLOSURES
(1) Information on significant transactions:
a. Financing provided to others: Please refer to Table 1 attached.
b. Endorsements/guarantees provided: Please refer to Table 2 attached.
c. Significant marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities): Please refer to Table 3 attached.
d. Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please refer to Table 4 attached.
e. Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: None.
f. Others: Intercompany relationships and significant intercompany transactions : Please refer to Table 5 attached.
(2) Information on investees (excluding investee company in mainland China): Please refer to Table 6 attached.
(3) Information on investment in mainland China:
a. 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: Please refer to Table 7 attached.
b. Significant direct or indirect transactions with the investee, its prices and terms of payment, unrealized gain or loss, and other related information which is helpful to understand the impact of investment in mainland China on financial reports: Please refer Table 5 attached.
14. SEGMENT INFORMATION
The Group uses the operating income as the measurement for the basis of performance assessment. The basis for such measurement is the same as that for the preparation of financial statements.
The reporting segments were as follows:
- Switchgear segment - manufacture and sale of high and low voltage switchgear.
- Transformer segment - manufacture and sale of high and low voltage transformer.
- Transmission and distribution apparatus segment - manufacture and sale of transmission & distribution line apparatus.
- Power and electrical equipment segment - manufacture and sale of industrial power and electrical equipment.
- Engineering segment - construction and installation of electrical equipment.
- Other segment - sale of GPS antennas and relay equipment.
(1) Segment revenues and results:
| Switchgear segment | Transformer segment | Transmission and distribution apparatus segment | Power and electrical equipment segment | Engineering segment | Other segment | Elimination of intersegment transactions | Total | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | 2025 | 2024 | |
| Revenue from external customers | $ 1,986,781 | $2,380,128 | $ 1,404,061 | $ 1,069,418 | $ 1,058,087 | $ 1,001,808 | $ 2,464,178 | $ 2,133,587 | $2,587,950 | $1,337,665 | $ 1,069,600 | $ 955,272 | $ - | $ - | $10,570,657 | $ 8,877,878 |
| Inter-segment revenue | - | - | - | - | - | - | 228,786 | 299,437 | 511,516 | 381,987 | 77,225 | 5,680 | (817,527) | (687,104) | - | - |
| Total revenue | $ 1,986,781 | $2,380,128 | $ 1,404,061 | $ 1,069,418 | $ 1,058,087 | $ 1,001,808 | $ 2,692,964 | $ 2,433,024 | $3,099,466 | $1,719,652 | $ 1,146,825 | $ 960,952 | $ (817,527) | $ (687,104) | $10,570,657 | $ 8,877,878 |
| Interest expense | $ 11,324 | $ 8,169 | $ 6,176 | $ 4,456 | $ 7,721 | $ 5,570 | $ 19,042 | $ 13,653 | $ 13,293 | $ 10,321 | $ 2,291 | $ 1,684 | $ - | $ - | $ 59,847 | $ 43,853 |
| Depreciation and amortization expense | $ 22,815 | $ 18,192 | $ 12,384 | $ 9,943 | $ 17,861 | $ 14,352 | $ 19,630 | $ 18,913 | $ 3,613 | $ 2,962 | $ 6,169 | $ 2,790 | $ (487) | $ (446) | $ 81,985 | $ 66,706 |
| Segment profit or loss | $ 92,366 | $ 220,542 | $ 231,241 | $ 104,360 | $ 80,883 | $ 127,125 | $ 243,883 | $ 133,771 | $ 269,361 | $ 137,865 | $ 152,570 | $ 167,583 | $ (1,820) | $ 7,314 | $ 1,068,484 | $ 898,560 |
~ 50 ~
(2) Geographical information :
| 2025 | 2024 | |
|---|---|---|
| Revenue from external customers | ||
| Geographical areas | ||
| Taiwan | $ 9,469,419 | $ 7,736,560 |
| Others | 1,101,238 | 1,141,318 |
| Total | $ 10,570,657 | $ 8,877,878 |
| 2025.12.31 | 2024.12.31 | |
| Non-current assets | ||
| Geographical areas | ||
| Taiwan | $ 2,120,364 | $ 2,110,822 |
| Others | 10,113 | 11,302 |
| Total | $ 2,130,477 | $ 2,122,124 |
Non-current assets include property, plant and equipment, right-of-use assets, investment properties, intangible assets and other non-current assets.
(3) Information about major customers:
| 2025 | 2024 | |
|---|---|---|
| Customer A | $ 1,353,349 | $ 1,134,225 |
| Customer B | 3,370,840 | 1,992,596 |
| $ 4,724,189 | $ 3,126,821 |
~ 52 ~
Allis Electric Co., Ltd. and Subsidiaries
FINANCING PROVIDED TO OTHERS
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)
Table 1
| No. | Lender | Borrower | Financial Statement Account | Related Parties | Highest Balance for the Period | Ending Balance | Actual Borrowing Amount | Interest Rate | Nature of Financing | Business Transaction Amounts | Reasons for Short-term Financing | Allowance for Impairment Loss | Collateral | Financing Limit for Each Borrower (Note 1) | Aggregate Financing Limits (Note 2) | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Item | Value | |||||||||||||||
| 0 | Allis Electric Co., Ltd. | Zhong Mou Construction Co., Ltd. | Other receivables | No | $ 11,185 | $ 7,385 | $ 7,385 | 2.50% | Short-term Financing | $ - | Operating capital | $ - | None | None | $ 633,388 | $ 1,266,776 |
Note 1: The total amount for lending to a company should not exceed 10% of the Company's net equity.
Note 2: The aggregate amount available for lending to others should not exceed 20% of the Company's net equity.
Allis Electric Co., Ltd. and Subsidiaries
ENDORSEMENTS/GUARANTEES PROVIDED
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)
Table 2
| No. | Endorser/Guarantor | Endorsee/Guarantee | Limits on Endorsement/Guarantee Given on Behalf of Each Party | Maximum Amount Endorsed/Guaranteed During the Year | Outstanding Endorsement/Guarantee at the End of the Year | Amount Actually Drawn | Amount Endorsed/Guaranteed by Collaterals | Ratio of Accumulated Endorsement/Guarantee to Net Equity in the Latest Financial Statements | Aggregate Endorsement/Guarantee Limit | 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 (Note 1) | ||||||||||||
| 0 | Allis Electric Co., Ltd. | Nissin-Allis Electric Co., Ltd. | f | $ 2,111,293 (Note 2) | $ 184,500 | $ 184,500 | $ 29,083 | — | 2.91% | $ 3,166,939 (Note 2) | — | — | — |
| Ares Technology Co., Ltd. | b | $ 125,000 | $ 60,000 | $ — | — | 0.95% | Y | — | — | ||||
| Air King Industrial Co., Ltd. | b | $ 380,400 | $ 380,400 | $ 277,885 | — | 6.01% | Y | — | — | ||||
| 1 | Air King Industrial Co., Ltd. | Allis Electric Co., Ltd. | c | $ 450,000 (Note 3) | $ 44,371 | $ 23,101 | $ 23,101 | — | 10.80% | $ 500,000 (Note 3) | — | Y | — |
Note 1: Relationships between the endorser/guarantor and the party being endorsed/guaranteed are as follows:
a. A company that the Company has business relationship with.
b. The Company owns directly or indirectly over 50% ownership of the investee company.
c. The Company that owns directly or indirectly hold over 50% ownership of the Company.
d. In between companies that were held over 90% of voting shares directly or indirectly by the Company.
e. The Company is required to provide guarantees or endorsements for the construction project based on the construction contract.
f. Shareholder of the investee provides endorsements/guarantees to the company in proportion to their shareholding percentages.
g. According to Consumer Protection Act, companies in the same industry enter into collateral performance guarantees for pre-construction home sales agreements.
Note2: The total amount of the guarantee provided by the Company to any individual entity should not exceed 1/3 of the Company's net equity. The total amount of guarantee should not exceed 1/2 of the Company's net equity.
Note 3: The total amount of the guarantee provided by Air King Industrial Co., Ltd. to the parent company and to other individual entities should not exceed NT$450,000 thousand and NT$50,000 thousand, respectively. The total amount of guarantee should not exceed NT$500,000 thousand.
~ 54 ~
Allis Electric Co., Ltd. and Subsidiaries
SIGNIFICANT MARKETABLE SECURITIES HELD
(Excluding Investment in Subsidiaries, Associates and Joint Controlled Entities)
DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)
Table 3
| Holding Company Name | Type and Name of Marketable Securities | Relationship with the Company | Financial Statement Account | December 31, 2025 | Note | |||
|---|---|---|---|---|---|---|---|---|
| Shares/Units | Carrying Amount | Percentage of Ownership | Fair Value | |||||
| Allis Electric Co., Ltd. | Stocks of Arch Meter Corporation | — | Financial assets at fair value through other comprehensive income-current | 1,248,000 | 75,879 | — | 75,879 | |
| Blue Magpie Ventures Fund I, L.P. | — | Financial assets at fair value through profit or loss- noncurrent | — | 13,500 | 2.01% | 13,500 | ||
| Stocks of Zhihe Low Carbon Co., Ltd. | — | Financial assets at fair value through other comprehensive income-noncurrent | 1,300,000 | 19,916 | 10.00% | 19,916 | ||
| Stocks of Le-Min Industrial Co., Ltd. | Related party in substance | Financial assets at fair value through other comprehensive income-noncurrent | 1,948,072 | 67,793 | 19.68% | 67,793 | ||
| Yishun Investment Co., Ltd. | Stocks of Allis Electric Co., Ltd. | Parent Company | Financial assets at fair value through other comprehensive income-current | 2,239,895 | 222,870 | 0.82% | 222,870 | Note |
| Stocks of Taiwan Semiconductor Manufacturing Company Limited | — | Financial assets at fair value through other comprehensive income-current | 12,000 | 18,600 | — | 18,600 | ||
| Stocks of Watron Technology Corp. | — | Financial assets at fair value through other comprehensive income-noncurrent | 822,400 | 20,724 | 15.23% | 20,724 | ||
| Allis Communications Company, Ltd. | Stocks of Watron Technology Corp. | — | Financial assets at fair value through other comprehensive income-noncurrent | 206,400 | 5,201 | 3.82% | 5,201 |
Note: In preparing the consolidated financial statements, the balance has been eliminated.
~ 55 ~
Allis Electric Co., Ltd. and Subsidiaries
TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)
Table 4
| Seller/Buyer | Related Party | Relationship | Transaction Details | Abnormal Transaction | Notes/Accounts Receivable (Payable) | Note | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Purchase/Sale | Amount | % of Total | Payment Terms | Unit Price | Payment Terms | Ending Balance | % of Total | ||||
| Allis Electric Co., Ltd. | AEC International S.r.l. | Subsidiary | Sale | $ (164,151) | (1.55%) | 210 天 | — | — | $ 93,504 | 2.00% | Note |
| Air King Industrial Co., Ltd. | Subsidiary | Purchase | $ 489,533 | 6.29% | 115 天 | — | — | $ (447,105) | (17.38%) | Note | |
| Nissin-Allis Electric Co., Ltd. | Associate | Purchase | $ 248,520 | 3.19% | 115 天 | — | — | $ (98,531) | (3.83%) | — | |
| Le-Min Industrial Co., Ltd. | Others | Purchase | $ 107,422 | 1.38% | 115 天 | — | — | $ (36,686) | (1.43%) | — |
Note : In preparing the consolidated financial statements, the transaction and balance have been eliminated.
~ 56 ~
Allis Electric Co., Ltd. and Subsidiaries
INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)
Table 5
| No. | Company Name | Counterparty | Relationship (Note 1) | Transaction Details | |||
|---|---|---|---|---|---|---|---|
| Financial Statement Accounts | Amount (Note 3) | Payment Terms | % to Consolidated Total Revenues or Assets | ||||
| 0 | Allis Electric Co., Ltd. | Air King Industrial Co., Ltd. | a | Revenue from sale of goods | 21,982 | (Note 2) | 0.21% |
| Construction contract cost | 489,031 | 4.63% | |||||
| Accounts payable | 447,105 | 3.37% | |||||
| Ares Technology Co., Ltd. | a | Purchase | 48,832 | (Note 2) | 0.46% | ||
| Accounts payable | 24,918 | 0.19% | |||||
| Hengyuan Allis Electric Co., Ltd. | a | Purchase | 41,588 | (Note 2) | 0.39% | ||
| PHD Powerhouse Distributions (PTY) Ltd. | a | Revenue from sale of goods | 15,200 | (Note 2) | 0.14% | ||
| Accounts receivable | 17,901 | 0.13% | |||||
| AEC International S.r.l. | a | Revenue from sale of goods | 164,151 | (Note 2) | 1.55% | ||
| Accounts receivable | 93,504 | 0.70% | |||||
| Allis Electric (S) Pte. Ltd. | a | Revenue from sale of goods | 14,125 | (Note 2) | 0.13% | ||
| Purchase | 15,838 | 0.15% |
Note 1: The relationships with the related parties are:
a. Parent company to its subsidiaries.
b. Subsidiaries to subsidiaries.
Note 2: The prices and payment terms were not significantly different from those to third parties.
Note 3: In preparing the consolidated financial statements, the transaction and balance have been eliminated.
Allis Electric Co., Ltd. and Subsidiaries
INFORMATION ON INVESTEES (EXCLUDING INVESTEE COMPANY IN MAINLAND CHINA)
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars)
Table 6
| Investor Company | Investee Company | Location | Principle Businesses Activities | Original Investment Amount | As of December 31, 2025 | Net Income (Loss) of the Investee | Share of Profit (Loss) | Note | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| December 31, 2025 | December 31, 2024 | Shares | % | Carrying Amount | |||||||
| Allis Electric Co., Ltd. | Air King Industrial Co., Ltd. | Taipei, Taiwan | Design and installation of electrical equipment | $ 28,458 | $ 28,458 | 10,245,033 | 83.12% | $ 169,069 | $ 62,324 | $ 52,207 | Note 2 |
| Nissin-Allis Electric Co., Ltd. | Taoyuan, Taiwan | Manufacturing of SF6 capacitor and GIS | 90,000 | 90,000 | 9,000,000 | 30.00% | 321,698 | 141,249 | 42,375 | - | |
| Ares Technology Co., Ltd. | New Taipei City, Taiwan | Manufacturing of UPS | 75,560 | 75,560 | 6,800,000 | 100.00% | 65,845 | (3,874) | (3,874) | Note 2 | |
| Allis Communications Co., Ltd. | New Taipei City, Taiwan | Manufacturing of GPS antennas | 86,909 | 86,909 | 5,702,147 | 82.64% | 62,508 | (2,143) | (1,772) | Note 2 | |
| Yishun Investment CO., LTD. | Taipei, Taiwan | Investment and holding | 179,900 | 179,900 | 17,990,000 | 99.94% | 190,615 | 5,757 | 2,025 | Note 1 and 2 | |
| Nissin Allis Union Ion Equipment Co., Ltd. | Hsinchu, Taiwan | Manufacturing of mechanical equipment and electronic parts | 30,000 | 30,000 | 4,000,000 | 40.00% | 98,327 | 44,763 | 17,906 | - | |
| AYM International Corporation | Guam, U.S. | Construction and sale of power and electrical equipment | 5,942 | 5,942 | 2,000 | 40.00% | - | - | - | - | |
| PHD Powerhouse Distributions (PTY) Ltd. | South Africa | Selling of electrical equipment | 72,542 | 72,542 | 225 | 93.75% | 34,507 | 1,520 | 1,425 | Note 2 | |
| AEC International S.r.l. | Italy | Selling of electrical equipment | 66,444 | 66,444 | 420,000 | 70.00% | 47,654 | 12,122 | 8,485 | Note 2 | |
| Intelicis Corporation | Santa Clara, U.S. | Developing of radio frequency products | 49,301 | 49,301 | 1,875,500 | 29.16% | - | - | - | - | |
| Allis Electric (S) Pte. Ltd. | Singapore | Selling of electrical equipment | 65,353 | 65,353 | 3,000,000 | 100.00% | 103,233 | (8,660) | (8,660) | Note 2 |
Note 1: The shares of the Company held by the subsidiary are recorded as treasury stock, and the dividends received from the Company are excluded from share of profit (loss).
Note 2: In preparing the consolidated financial statements, the amount and balance have been eliminated.
~ 58 ~
Allis Electric Co., Ltd.
INFORMATION ON INVESTMENTS IN MAINLAND CHINA
FOR THE YEAR ENDED DECEMBER 31, 2025
(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)
Table 7
| Investee Company | Principle Businesses Activities | Paid-in Capital | Method of Investment | Accumulated Outward Remittance for Investment from Taiwan as of January 1, 2025 | Remittance of Funds | | Accumulated Outward Remittance for Investment from Taiwan as of December 31, 2025 | Net Income (Loss) of the Investee | Ownership of Direct or Indirect Investment | Share of Profit (Loss) (Note) | Carrying Amount as of December 31, 2025 (Note) | Accumulated Repatriation of Investment Income as of December 31, 2025 |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | | Outward | Inward | | | | | | |
| Hengyuan Allis Electric Co., Ltd. | Selling of electrical equipment | USD 3,400 | Direct investment | $ 50,547 (USD1,582) | $ - | $ - | $ 50,547 (USD1,582) | $ 4,289 | 100.00% | $ 4,357 | $ 120,892 | $ 26,368 (USD825) |
| Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2025 | Investment Amounts Authorized by the Investment Commission, MOEA | Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA |
| --- | --- | --- |
| | | Net equity * 60% |
| $ 106,207 (USD3,266) | $ 206,102(USD 6,411) | 3,800,327 |
Note: The amount and balance were recognized based on the financial statements certified by the CPA of the parent company in Taiwan and have been eliminated in preparing the consolidated financial statements.