Alltek Technology Corp.

Financial Statements for the
Years Ended December 31, 2025 and 2024 and
Independent Auditors’ Report

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所

110421 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 110421, Taiwan

Tel: +886 (2) 2725-9988

Fax: +886 (2) 4051-6888

www.deloitte.com.tw

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Alltek Technology Corp.

Opinion

We have audited the accompanying financial statements of Alltek Technology Corp. (the “Company”), which comprise the balance sheets as of December 31, 2025 and 2024, and the statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the financial statements, including material accounting policy information (collectively referred to as the “financial statements”).

In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matter of the Company’s financial statements for the year ended December 31, 2025 is stated as follows:

Recognition of Sales Revenue

The Company’s major source of revenue comes from the trading of semiconductor components. Due to the large volume of sales transactions from semiconductor components, the amount of revenue is material to the Company’s overall revenue and profit. There is a risk that revenue generated from specific sales clients may not occur; therefore, we identified the recognition of sales revenue as a key audit matter. Refer to Note 19 to the financial statements.

Our audit procedures performed in respect of the assessment of sales revenue included the following:

We obtained an understanding of the design and implementation and tested the operating effectiveness of internal controls over sales revenue.
We selected samples and performed tests of details for documents related to revenue derived from specific customers, including sales orders, shipping documents and customs export declarations, and we checked for any significant differences in collection status. We verified that revenue was recognized upon completion of the performance obligation and confirmed that recorded transactions have actually occurred.
We inspected the subsidiary ledger to confirm significant sales returns and discounts, and we verified and confirmed the actual occurrence of the annual sales transactions.

Inventory Valuation and Allowance Risk

The balance of The company’s inventory is considered to be material to the total assets of the Company, and the specific semiconductor components are exposed to unsalable stock or obsolescence due to new developments in technological product demand, thus, such inventory may not be sold and the net realizable value of inventory may be lower than the carrying amount.

The management’s assessment of the net realised value of inventories in accordance with the requirements of IAS on inventories involves significant judgments, and the amount of inventories is material to the overall financial statements, the valuation of inventories as one of key audit matters.

Refer to Note 10 to financial statements.

Our audit procedures performed in respect of the assessment of inventory included the following:

We obtained an understanding of the provision policy for the evaluation of inventory allowances, and assessed the appropriateness of adopt of the Company’s inventory provisioning policy in the financial statements.
We obtained the statement for net realizable value of the inventory at the end of the period, and selected sample items of the data sources such as the selling price of the goods used in the net realizable value and the supporting evaluation documents for recalculation, thus, to confirm that the inventory was valued at lower of cost or net realizable value.
We compared the provision rate of inventory allowance between the current period and the latest year, and review the inventory turnover days in each period to evaluated the adequacy of the inventory provision for obsoleted and damage loss.

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

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

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

Those charged with governance, including supervisors, are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the 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 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 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 the Company’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 the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the 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 the entities or business activities within the Company to express an opinion on the financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the 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 audits resulting in this independent auditors’ report are Liu Ming-Hsien and Chiu Meng-Chieh.

Ming-Hsien Liu Meng-Chieh, Chiu
Deloitte & Touche
Taipei, Taiwan
Republic of China

March 12, 2026

Notice to Readers

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

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

ALLTEK TECHNOLOGY CORP.

BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	2025		2024
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)	$ 125,426	1	$ 333,260	3
Financial assets at amortized cost - current (Notes 4, 8 and 26)	17,000	-	9,100	-
Notes receivable, net (Notes 4 and 9)	49	-	2,524	-
Trade receivables, net (Notes 4, 9 and 25)	6,697,139	43	4,490,431	32
Other receivables (Notes 9 and 25)	329,024	2	17,577	-
Inventories (Notes 4, 5 and 10)	2,242,032	14	3,419,686	24
Other current assets	22,562	-	14,019	-
Total current assets	9,433,232	60	8,286,597	59
NON-CURRENT ASSETS
Financial assets at fair value through profit or loss - non-current (Notes 4 and 7)	88,053	-	91,849	-
Investments accounted for using the equity method (Notes 4, 11 and 28)	5,514,728	35	5,047,775	36
Property, plant and equipment (Notes 4, 12 and 26)	591,022	4	558,407	4
Right-of-use assets (Notes 4 and 13)	24,140	-	14,987	-
Deferred tax assets (Notes 4 and 21)	100,697	1	93,033	1
Other non-current assets	9,828	-	49,601	-
Total non-current assets	6,328,468	40	5,855,652	41
TOTAL	$ 15,761,700	100	$ 14,142,249	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Notes 14 and 26)	$ 2,520,000	16	$ 1,710,000	12
Short-term bills payable (Note 14)	2,150,000	14	1,680,000	12
Contract liabilities (Note 19)	214,232	1	11,784	-
Trade payables, net (Note 25)	2,430,688	15	1,678,052	12
Other payables (Note 16)	260,681	2	217,793	1
Other payables to related parties (Notes 16 and 25)	1,772,559	11	558,171	4
Current tax liabilities (Notes 4 and 21)	13,297	-	45,908	-
Lease liabilities - current (Notes 4 and 13)	14,679	-	8,546	-
Current portion of long-term borrowings and bonds payable (Notes 4, 14, 15 and 26)	11,641	-	232,369	2
Other current liabilities (Notes 16 and 25)	115,573	1	104,917	1
Total current liabilities	9,503,350	60	6,247,540	44
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 14 and 26)	326,359	2	2,151,494	15
Deferred tax liabilities (Notes 4 and 21)	609,997	4	498,515	4
Lease liabilities - non-current (Notes 4 and 13)	9,591	-	6,501	-
Net defined benefit liabilities - non-current (Notes 4 and 17)	17,932	-	17,793	-
Other non-current liabilities (Note 11)	4,830	-	1,053	-
Total non-current liabilities	968,709	6	2,675,356	19
Total liabilities	10,472,059	66	8,922,896	63
EQUITY (Note 18)
Share capital
Ordinary shares	2,353,912	15	2,330,449	16
Capital surplus	864,915	6	857,990	6
Retained earnings
Legal reserve	710,552	4	639,978	5
Unappropriated earnings	1,240,068	8	1,141,751	8
Total retained earnings	1,950,620	12	1,781,729	13
Other equity
Exchange differences on translating the financial statements of foreign operations	130,198	1	259,189	2
Unrealized gains or losses on investments at fair value through other comprehensive income	(10,004)	-	(10,004)	-
Total other equity	120,194	1	249,185	2
Total equity	5,289,641	34	5,219,353	37
TOTAL	$ 15,761,700	100	$ 14,142,249	100

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

ALLTEK TECHNOLOGY CORP.

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2025		2024
	Amount	%	Amount	%
OPERATING REVENUE (Notes 19 and 25)	$ 25,943,628	100	$ 23,087,572	100
OPERATING COSTS (Notes 10 and 25)	(24,984,040)	(96)	(22,121,900)	(96)
GROSS PROFIT	959,588	4	965,672	4
UNREALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES	(884)	-	(460)	-
REALIZED GAIN ON TRANSACTIONS WITH SUBSIDIARIES	460	-	8,000	-
REALIZED GROSS PROFIT	959,164	4	973,212	4
OPERATING EXPENSES (Notes 20 and 25)
Selling and marketing expenses	(261,234)	(1)	(246,898)	(1)
General and administrative expenses	(216,068)	(1)	(165,157)	(1)
Research and development expenses	(88,235)	-	(77,076)	-
Total operating expenses	(565,537)	(2)	(489,131)	(2)
PROFIT FROM OPERATIONS	393,627	2	484,081	2
NON-OPERATING INCOME AND EXPENSES (Notes 20 and 25)
Interest income	35,547	-	8,497	-
Other income	9,915	-	12,478	-
Other gains and losses	(142,440)	(1)	22,662	-
Finance costs	(103,815)	-	(229,906)	(1)
Share of profit or loss of subsidiaries (Note 11)	680,553	3	565,261	3
Total non-operating income and expenses	479,760	2	378,992	2
PROFIT BEFORE INCOME TAX	873,387	4	863,073	4
INCOME TAX EXPENSE (Notes 4 and 21)	(165,140)	(1)	(160,545)	(1)
NET PROFIT FOR THE YEAR	708,247	3	702,528	3

(Continued)

ALLTEK TECHNOLOGY CORP.

STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2025		2024
	Amount	%	Amount	%
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans	$ (1,648)	-	$ 3,972	-
Share of profit or loss of subsidiaries	-	-	(5,004)	-
Share of other comprehensive (loss) income of subsidiaries for using the equity method	14	-	38	-
Income tax relating to items that will not be reclassified subsequently to profit or loss	329	-	(794)	-
	(1,305)	-	(1,788)	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translating the financial statements of foreign operations	(159,088)	(1)	229,439	1
Share of other comprehensive income of subsidiaries and associates accounted for using the equity method	(2,151)	-	2,110	-
Income tax relating to items that may be reclassified subsequently to profit or loss	32,248	-	(46,310)	-
	(128,991)	(1)	185,239	1
Other comprehensive income for the year, net of income tax	(130,296)	(1)	183,451	1
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	$ 577,951	2	$ 885,979	4
EARNINGS PER SHARE (Note 22)
Basic	$ 3.02		$ 3.02
Diluted	$ 2.99		$ 2.96

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

(Concluded)

ALLTEK TECHNOLOGY CORP.

STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	Share Capital	Capital Surplus (Note 18)	Retained Earnings		Other Equity		Total Equity
			Legal Reserve	Unappropriated Earnings	Exchange Differences on Translating of the Financial Statements Foreign Operations	Unrealized Valuation Gain or Loss on Financial Assets at Fair Value Through Other Comprehensive Income
BALANCE ON JANUARY 1, 2024	$ 2,322,643	$ 856,732	$ 580,405	$ 960,208	$ 73,950	$ (5,000)	$ 4,788,938
Appropriation of 2023 earnings
Legal reserve	-	-	59,573	(59,573)	-	-	-
Cash dividends distributed by the Company	-	-	-	(464,628)	-	-	(464,628)
Changes in equity of associates accounted for using equity method	-	8,663	-	-	-	-	8,663
Cash dividends from capital surplus	-	(23,231)	-	-	-	-	(23,231)
Convertible bonds converted to ordinary shares	7,806	14,279	-	-	-	-	22,085
Net profit for the year ended December 31, 2024	-	-	-	702,528	-	-	702,528
Other comprehensive income for the year ended December 31, 2024, net of income tax	-	-	-	3,216	185,239	(5,004)	183,451
Total comprehensive income for the year ended December 31, 2024	-	-	-	705,744	185,239	(5,004)	885,979
Changes in percentage of ownership interests in subsidiaries	-	1,547	-	-	-	-	1,547
BALANCE ON DECEMBER 31, 2024	2,330,449	857,990	639,978	1,141,751	259,189	(10,004)	5,219,353
Appropriation of 2024 earnings
Legal reserve	-	-	70,574	(70,574)	-	-	-
Cash dividends distributed by the Company	-	-	-	(538,051)	-	-	(538,051)
Cash dividends from capital surplus	-	(46,787)	-	-	-	-	(46,787)
Convertible bonds converted to ordinary shares	23,463	49,090	-	-	-	-	72,553
Net profit for the year ended December 31, 2025	-	-	-	708,247	-	-	708,247
Other comprehensive income (loss) for the year ended December 31, 2025, net of income tax	-	-	-	(1,305)	(128,991)	-	(130,296)
Total comprehensive income (loss) for the year ended December 31, 2025	-	-	-	706,942	(128,991)	-	577,951
Changes in percentage of ownership interests in subsidiaries	-	4,622	-	-	-	-	4,622
BALANCE ON DECEMBER 31, 2025	$ 2,353,912	$ 864,915	$ 710,552	$ 1,240,068	$ 130,198	$ (10,004)	$ 5,289,641

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

ALLTEK TECHNOLOGY CORP.

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	$ 873,387	$ 863,073
Adjustments for:
Depreciation expense	28,135	21,253
Finance costs	103,815	229,906
Interest income	(35,547)	(8,497)
Net loss on financial assets at FVTPL	3,796	722
Share-based compensation	3,648	304
Share of profit of subsidiaries and associates	(680,553)	(565,261)
Gain on disposal of property, plant and equipment	(72)	-
Inventory depreciation and sluggish loss	38,125	102,256
Unrealized loss (gain) on the transactions with subsidiaries	424	(7,540)
Net gain on foreign currency exchange	(84,412)	(191,898)
Gain on disposal of investment	-	(1,026)
Other losses	(24)	4,258
Changes in operating assets and liabilities
Notes receivable	2,475	(2,306)
Trade receivables	(2,143,395)	(2,256,234)
Other receivables	(311,432)	2,418,079
Inventories	1,139,529	2,982,355
Financial assets at amortized cost - current	(7,900)	(250)
Other current assets	(8,548)	35,097
Contract liabilities	202,448	(10,463)
Trade payables	765,524	(804,330)
Other payables	43,994	35,662
Other payables to related parties	(960)	(22,373)
Other current liabilities	15,150	(95,536)
Net defined benefit liabilities - non-current	(1,509)	(737)
Cash (used in) generated from operations	(53,902)	2,726,514
Interest received	35,531	8,497
Interest paid	(103,815)	(251,201)
Income tax paid	(61,356)	(174,841)
Net cash (used in) generated from operating activities	(183,542)	2,308,969
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of financial assets at fair value through profit or loss	-	(2,198)
Purchase of investments accounted for using the equity methods	-	(7,359)
Dividends received from investment accounted for using the equity method	56,702	36,641
Payments for property, plant and equipment	(10,163)	(4,153)
Proceeds from disposal of property, plant and equipment	72	-
Increase in refundable deposits	-	(4,368)
		(Continued)

ALLTEK TECHNOLOGY CORP.

STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	2025	2024
Decrease in refundable deposits	$ 6,556	$ -
Increase in prepaid equipment	-	(33,217)
Net cash generated from (used in) investing activities	53,167	(14,654)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in short-term borrowings	16,200,000	22,657,050
Decrease in short-term borrowings	(15,390,000)	(23,881,255)
Increase in short-term bills payable	470,000	125,000
Proceeds from long-term borrowings	-	10,949,627
Repayments of long-term borrowings	(1,973,494)	(10,180,000)
Other payables - related parties	1,218,505	(1,213,090)
Repayments of the principal portion of lease liabilities	(17,632)	(15,731)
Dividends paid to owners of the Company	(584,838)	(487,859)
Net cash used in financing activities	(77,459)	(2,046,258)
NET (DECREASE) INCREASE IN CASH	(207,834)	248,057
CASH AT THE BEGINNING OF THE YEAR	333,260	85,203
CASH AT THE END OF THE YEAR	$ 125,426	$ 333,260

The accompanying notes are an integral part of the financial statements. (Concluded)

10 -

ALLTEK TECHNOLOGY CORP.

NOTES TO FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Alltek Technology Corp. (the "Company") was incorporated in April 1991 as a company limited by shares under the Company Law of the Republic of China (ROC). The Company mainly sells communications business operations:

a. Telecommunications equipment, computer peripherals, and trading in electronic components and test equipment (other than licensing business).
b. Technology transfer of related products above.
c. Trading and import and export of radio equipment.
d. Import and export trade of related products.
e. Acting as the agent for the relevant products and tendering business of domestic and foreign manufacturers.

The Company's shares have been traded on Taipei Exchange formerly known as the GreTai Securities Market since March 2004. In November 2008, the Company's shares have been listed on the Taiwan Stock Exchange (TWSE).

The functional currency of the Company is the New Taiwan dollar. The financial statements are presented in the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The accompanying 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

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

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

b. The IFRS Accounting Standards endorsed by the FSC for application starting from 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” - the amendments to the application guidance of classification of financial assets	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”	January 1, 2023

As of the date the financial statements were authorized for issue, the Company has assessed that the application of other standards and interpretations will not have a material impact on the Company's financial position and financial performance.

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

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB (Note 1)
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 (Note 2)
IFRS 19 “Subsidiaries without Public Accountability: Disclosures”	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

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

Note 2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

IFRS 18 “Presentation and Disclosure in Financial Statements” and consequential amendments

IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise:

To classify items of income and expenses presented in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discontinued operations categories, the Company shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers.
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 Company 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 Company shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company 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 Company as a whole, the Company 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.

In addition, the following consequential amendments have been made to IAS 7 "Statement of Cash Flows":

The Company shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.
Interest and dividends received by the Company shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Company has a specific main operating activity, it shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how it classifies dividend income, interest income and interest expense in the statement of profit or loss. The total of each of these cash flows shall be classified in a single category in the statement of cash flows.

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

a. Statement of compliance

The financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and IFRS Accounting Standards as endorsed and issued into effect by the FSC.

b. Basis of preparation

The financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

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

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.

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

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

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue; and
3) Liabilities for which the Company does not have the substantial right at the end of the reporting period to defer settlement for at least 12 months after the reporting period.

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

d. Foreign currencies

In preparing the Company's financial statements, transactions in currencies other than the Company'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.

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

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e. Inventories

Inventories consist of merchandise 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. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at the weighted-average cost on the balance sheet date.

f. Investments in subsidiaries

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

Subsidiary is an entity that is controlled by the Company.

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

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

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

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

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

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

g. Investments in associates

An associate is an entity over which the Company has significant influence and that is not a subsidiary.

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

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

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

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

h. Property, plant and equipment

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

Depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

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

i. Impairment of property, plant and equipment and right-of-use assets

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

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

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

j. Financial instruments

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

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

1) Financial assets

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

a) Measurement categories

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

i. Financial assets at FVTPL

Financial assets are classified as at FVTPL when such financial assets are mandatorily classified or designated 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 remeasurement gains or losses on such financial assets are recognized in other gains or losses. Fair value is determined in the manner described in Note 24: Financial Instruments.

ii. Financial assets at amortized cost

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

i) The financial assets are held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and
ii) The contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

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

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
iv) The disappearance of an active market for that financial asset because of financial difficulties.
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iii. Investments in debt instruments at FVTOCI

Debt instruments that meet the following conditions are subsequently measured at FVTOCI:

i) The debt instrument is held within a business model whose objective is achieved by both the collecting of contractual cash flows and the selling of such financial assets; and
ii) The contractual terms of the debt instrument give rise to specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Investments in debt instruments at FVTOCI are subsequently measured at fair value. Changes in the carrying amounts of these debt instruments relating to changes in foreign currency exchange rates, interest income calculated using the effective interest method and impairment losses or reversals are recognized in profit or loss. Other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and will be reclassified to profit or loss when the investment is disposed of.

iv. Investments in equity instruments at FVTOCI

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

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

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

b) Impairment of financial assets

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

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

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

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

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c) Derecognition of financial assets

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

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

2) Equity instruments

Debt and equity instruments issued by an 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 Company are recognized at the proceeds received, net of direct issue costs.

3) Financial liabilities

a) Subsequent measurement

All financial liabilities are carried at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

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

4) 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.

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

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

5) Derivative financial instruments

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

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

k. 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.

l. Revenue recognition

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

Revenue from the sale of goods

Revenue from the sale of goods. Sales of the product are recognized as revenue when the goods are delivered to the customer's specific location or the goods are shipped because it is the time when the customer has full discretion over the manner of distribution and price to sell the goods, has the primary responsibility for sales to future customers and bears the risks of obsolescence. Trade receivables are recognized concurrently.

m. Leases

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

For the lease of asset in which the Company is a lessee provided by a lessor, the Company elects to account for the lease and non-lease components as a single lease component.

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The Company as lessee

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

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the 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. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee’s incremental borrowing rate will be used.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term, a change in the amounts expected to be payable under a residual value guarantee, a change in the assessment of an option to purchase an underlying asset, or a change in future lease payments resulting from a change in an index or a rate used to determine those payments, the Company remeasures the lease liabilities with a corresponding adjustment to the right-of-use assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the balance sheets.

n. Employee benefits

1) Short-term employee benefits

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

2) Retirement benefits

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

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

Net defined benefit liabilities represent the actual deficit in the Company’s defined benefit plans.

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o. Taxation

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

1) Current tax

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

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

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

2) Deferred tax

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

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized 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 Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are 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 assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

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

3) Current and deferred taxes for the year

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

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5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

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

When the Company developing material accounting estimates, 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 revisions affect both current and future periods. The estimates and underlying assumptions are reviewed by the management on an ongoing basis.

Key Sources of Estimation Uncertainty

Write-down of inventories

The net realizable value of inventory is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The estimation of net realizable value is based on current market conditions and the historical experience of selling products of a similar nature. Changes in market conditions may have a material impact on the estimation of net realizable value.

6. CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand	$ 193	$ 168
Checking accounts and demand deposits	125,233	333,092
	$ 125,426	$ 333,260

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

	December 31
	2025	2024
Bank balance	0.71%-3.97%	0.71%-4.50%

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

	December 31
	2025	2024
Financial assets mandatorily classified as at FVTPL
Non-derivative financial assets
Foreign unlisted shares	$ 88,053	$ 91,849

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8. FINANCIAL ASSETS AT AMORTIZED COST - CURRENT

	December 31
	2025	2024
Pledged bank deposit	$ 17,000	$ 9,100

Refer to Note 26 for information relating to other financial assets pledged as security.

9. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

	December 31
	2025	2024
Notes receivable
At amortized cost
Gross carrying amount	$ 49	$ 2,524
Less: Allowance for impairment loss	-	-
	$ 49	$ 2,524
Notes receivable - operating	$ 49	$ 2,524
Notes receivable - non-operating	-	-
	$ 49	$ 2,524
Trade receivables from unrelated parties
At amortized cost
Gross carrying amount	$ 2,324,046	$ 2,524,075
Less: Allowance for impairment loss	(10,045)	(10,045)
	2,314,001	2,514,030
At FVTOCI	4,382,133	1,976,346
	$ 6,696,134	$ 4,490,376
Trade receivable from related parties
Subsidiaries	$ 1,005	$ 55
Less: Allowance for impairment loss	-	-
	$ 1,005	$ 55
Other receivables
Factored trade receivable reclassified to other receivables (Note 24)	$ 312,453	$ 6,306
Business tax refund receivables	15,301	9,820
Others	120	40
	$ 327,874	$ 16,166
Other receivables from related parties
Subsidiaries	$ 1,150	$ 1,411

Trade Receivables

a. At amortized cost

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

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

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

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

December 31, 2025

	Not Past Due	1 to 120 Days	Over 121 Days	Total
Expected credit loss rate	0.31%	1.29%-25,04%	100%
Gross carrying amount	$ 2,076,945	$ 248,094	$ 61	$ 2,325,100
Loss allowance (Lifetime ECL)	(6,482)	(3,502)	(61)	(10,045)
Amortized cost	$ 2,070,463	$ 244,592	$ -	$ 2,315,055

December 31, 2024

	Not Past Due	1 to 120 Days	Over 121 Days	Total
Expected credit loss rate	0.40%	0.06%-10.78%	100%
Gross carrying amount	$ 2,265,668	$ 260,664	$ 322	$ 2,526,654
Loss allowance (Lifetime ECL)	(9,006)	(717)	(322)	(10,045)
Amortized cost	$ 2,256,662	$ 259,947	$ -	$ 2,516,609

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

	2025	2024
Balance on January 1	$ 10,045	$ 10,045
Add: Net remeasurement of loss allowance	—	—
Balance on December 31	$ 10,045	$ 10,045

b. At FVTOCI

The Company will decide whether to sell these trade receivables to banks without recourse based on its level of working capital. These trade receivables are classified as at FVTOCI because they are held within a business model whose objective is achieved by both collecting of contractual cash flows and selling of financial assets.

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

December 31, 2025

	Not Past Due	1 to 120 Days	Over 121 Days	Total
Expected credit loss rate	0%	0%	0%
Gross carrying amount	$ 4,382,133	$ —	$ —	$ 4,382,133
Loss allowance (Lifetime ECL)	—	—	—	—
Cost at FVTOCI	$ 4,382,133	$ —	$ —	$ 4,382,133
December 31, 2024
	Not Past Due	1 to 120 Days	Over 121 Days	Total
Expected credit loss rate	0%	0%	0%
Gross carrying amount	$ 1,976,346	$ —	$ —	$ 1,976,346
Loss allowance (Lifetime ECL)	—	—	—	—
Cost at FVTOCI	$ 1,976,346	$ —	$ —	$ 1,976,346

INVENTORIES

	December 31
	2025	2024
Merchandise	$ 2,242,032	$ 3,419,686

The nature of the cost of goods sold is as follows:

	For the Year Ended December 31
	2025	2024
Cost of inventories sold	$ 24,945,915	$ 22,019,644
Inventory write-downs	38,125	102,256
	$ 24,984,040	$ 22,121,900

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

	December 31
	2025	2024
Investments in subsidiaries	$ 5,144,301	$ 4,685,890
Investments in associates	370,427	361,885
	$ 5,514,728	$ 5,047,775

a. Investments in subsidiaries

	December 31
	2025	2024
Pantek Technology Corp.	$ 636,319	$ 641,853
Alltek Marine Electronics Corp.	181,524	204,535
Alltek Group Corp.	1,919,599	1,993,771
Alltek Technology (H.K.) Limited	2,361,504	1,790,016
Alltek Technology (Singapore) Pte. Ltd.	(4,830)	(1,053)
Alder Optomechanical Corp.	45,355	55,715
	5,139,471	4,684,837
Add: Credit balance of investments accounted for using the equity method	4,830	1,053
	$ 5,144,301	$ 4,685,890
	Proportion of Ownership and Voting Rights
---	---	---
	December 31
	2025	2024
Pantek Technology Corp.	100%	100%
Alltek Marine Electronics Corp.	53%	53%
Alltek Group Corp.	100%	100%
Alltek Technology (H.K.) Limited	100%	100%
Alltek Technology (Singapore) Pte. Ltd.	100%	100%
Alder Optomechanical Corp.	51%	51%

Refer to Note 28 to the financial statements for the year ended December 31, 2025 for the disclosures of the investments in subsidiaries.

In September 2024, the Company acquired a 60% ownership stock in Alltek Technology (Singapore) Pte. Ltd. for SGD300,000, increasing its shareholding from 40% to 100%. Alltek Technology (Singapore) Pte. Ltd. have transitioned from an associate to a subsidiary. Please refer to Note 24 of the Company's consolidated financial statements.

b. Investments in associates

	December 31
	2025	2024
Associates that are not individually material
Yuban Technology Co., Ltd.	$ 226,108	$ 225,528
General Life Biotechnology Co., Ltd.	144,319	136,357
	$ 370,427	$ 361,885

Aggregate information of associates that are not individually material

	For the Year Ended December 31
	2025	2024
The Company’s share of:
Net gain for the year	$ 34,544	$ 38,940
Other comprehensive income	(1,721)	1,688
Total comprehensive income for the year	$ 32,823	$ 40,628

In September 2021, the Company acquired and held 15% of the outstanding shares of Yuban Technology Co., Ltd. The Company and its subsidiary, Pentek Technology Corp., hold more than 20% of the total voting shares of the investee; therefore, the equity method is used for the evaluation of investment transactions. Under the agreement between the Company and Yuban Technology Co., Ltd., the Company shall not transfer, pledge, create any security rights or dispose of the aforementioned ordinary shares within 3 years from the acquisition date.

Associates are accounted for using the equity method.

PROPERTY, PLANT AND EQUIPMENT

	Freehold Land	Buildings	Office Equipment	Other Equipment	Total
Cost
Balance on January 1, 2024	$ 464,283	$ 112,047	$ 2,322	$ 11,499	$ 590,151
Additions	-	-	3,021	1,132	4,153
Disposals	-	-	(82)	-	(82)
Balance on December 31, 2024	$ 464,283	$ 112,047	$ 5,261	$ 12,631	$ 594,222
Accumulated depreciation
Balance on January 1, 2024	$ -	$ 25,980	$ 959	$ 3,316	$ 30,255
Depreciation expense	-	2,249	921	2,472	5,642
Disposals	-	-	(82)	-	(82)
Balance on December 31, 2024	$ -	$ 28,229	$ 1,798	$ 5,788	$ 35,815
Carrying amount on December 31, 2024	$ 464,283	$ 83,818	$ 3,463	$ 6,843	$ 558,407
					(Continued)

29 -

Cost	Freehold Land	Buildings	Office Equipment	Other Equipment	Total
Balance on January 1, 2025	$ 464,283	$ 112,047	$ 5,261	$ 12,631	$ 594,222
Additions	-	37,662	5,718	-	43,380
Disposals	-	-	(540)	(1,687)	(2,227)
Balance on December 31, 2025	$ 464,283	$ 149,709	$ 10,439	$ 10,944	$ 635,375
Accumulated depreciation
Balance on January 1, 2025	$ -	$ 28,229	$ 1,798	$ 5,788	$ 35,815
Depreciation expense	-	6,023	2,324	2,418	10,765
Disposals	-	-	(540)	(1,687)	(2,227)
Balance on December 31, 2025	$ -	$ 34,252	$ 3,582	$ 6,519	$ 44,353
Carrying amount on December 31, 2025	$ 464,283	$ 115,457	$ 6,857	$ 4,425	$ 591,022
					(Concluded)

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

Building
Main buildings	50 years
Renovation project	5-10 years
Experimental equipment	3-5 years
Other equipment	3-5 years

Property, plant and equipment pledged as collateral for bank borrowings were set out in Note 26.

13. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31
	2025	2024
Carrying amount
Buildings	$ 9,832	$ 6,880
Transportation equipment	14,308	8,107
	$ 24,140	$ 14,987
	For the Year Ended December 31
	2025	2024
Additions to right-of-use assets	$ 27,532	$ 20,481
Depreciation charge for right-of-use assets
Buildings	$ 11,992	$ 11,397
Transportation equipment	5,378	4,214
	$ 17,370	$ 15,611

b. Lease liabilities

	December 31
	2025	2024
Carrying amount
Current	$ 14,679	$ 8,546
Non-current	$ 9,591	$ 6,501
Range of discount rates for lease liabilities was as follows:
	December 31
	2025	2024
Buildings	1.2%	1.2%
Transportation equipment	1.2%	1.2%

BORROWINGS

a. Short-term borrowings

	December 31
	2025	2024
Unsecured borrowings
Line of credit borrowings	$ 2,520,000	$ 1,710,000
Interest rate interval	0.96%-2.00%	1.90%-2.30%

Portion of the short-term borrowings of the Company for the years ended December 31, 2025 and 2024 have been jointly guaranteed by chairman of the board of the Company.

b. Short-term bills payable

	December 31
	2025	2024
Commercial paper	$ 2,150,000	$ 1,680,000
Less: Unamortized discount on bills payable	-	-
	$ 2,150,000	$ 1,680,000
Interest rate interval	1.47%-1.75%	1.50%-2.08%

The commercial papers payable were not discounted because the effect was not material.

c. Long-term borrowings

	December 31
	2025	2024
Secured borrowings (Note 26)
Bank loans	$ 338,000	$ 1,831,494
Unsecured borrowings
Bank loans	-	480,000
	338,000	2,311,494
Less: Current portion	(11,641)	(160,000)
	$ 326,359	$ 2,151,494
Interest rate interval	2.00%	2.00%-2.47%

The Company signed a long-term syndicated loan contract with the bank secured by the Company's freehold land and building to fund its operating capital. The terms of the syndicated credit agreement are as follows:

1) Credit period: Calculated from the date of first utilization (December 25, 2023) to the expiration date of 5 years.

2) Total credit line: US$155,000 thousand dollars.

3) Loan item:

a) Syndicated loan A: Alltek Technology Corp. and Subsidiaries is borrower, the credit line is US$155,000 thousand dollars or facility amount, and revolving credit.

b) Syndicated loan B: Alltek Technology (H.K.) Limited is borrower, the credit line is US$62,000 thousand dollars, and revolving credit.

c) The credit balance of syndicated loan A and B, the total amount cannot exceed the syndicated loan agreement's total credit line.

4) Commitments: During the period of the credit facility agreements, the consolidated financial statements compliance with the following financial ratios and covenants is required.

a) Current ratio: Not lower than 100%.

b) Liability ratio: Not higher than 300%.

c) Interest coverage ratio: Not lower than 2 times.

d) Net tangible assets: Not lower than $1,500,000 thousand.

31 -

BONDS PAYABLE

Unsecured domestic bonds
Less: Current portion

December 31
2025	2024
$ -	$ 72,369
-	(72,369)
$ -	$ -

In July 21, 2022, to repay the loan, the Group issued the 4th domestic unsecured convertible bonds with an aggregate principal amount of $600,000 thousand and a face value of $100 thousand per bond certificate. The issuance price is not lower than face value multiplied by 101%. Actual issuance amount was $606,289 thousand. At the end of third year from the bond issuance date, bondholders have the right to redeem the convertible bonds at face value plus interest compensation (the interest compensation is face value multiplied by 102.2669%, rate of return is 0.75%, at expiration date) in cash. The convertible bonds are managed by Fubon Securities Co., Ltd. as the trustee of the bondholders. The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus - option. The terms and conditions of the bonds are as follows:

a. Issuance date: July 21, 2022
b. Coupon rate: 0%
c. Issuance period: 3 years, and a circulation period from July 21, 2022 to July 21, 2025.
d. Redemption of the convertible bonds

At the end of second years from the bond issuance date (July 21, 2024), bondholders have the right to request the Group to redeem the convertible bonds at face value plus interest compensation (the interest compensation is face value multiplied by 101.5056%, rate of return is 0.75% at expiration date) in cash.

e. Redemption method

1) Conversion subject: Subject is ordinary shares of the Company. The rights and obligations of the new shares converted from the bonds are the same as the issued and outstanding ordinary shares.
2) Conversion period

From October 22, 2022 (3 months after the date of issuance) to July 21, 2025 (expiration date), each bond entitles the holder to convert it into ordinary shares through broker-dealer informing Taiwan Depository & Clearing Corporation to request the Company's agent for stock affairs in accordance with the conditions of the issuance of the bonds except for (1) Period of suspension of transfer of ordinary shares according to the law; (2) Fifteen business days before the stop transfer date of issuance of bonus shares, the stop transfer date of the cash dividend or the stop transfer date of issuance of ordinary shares for cash subscription, and the rights distribution base date; (3) The capital reduction base date to the capital reduction of stocks one day before the trading day.

32 -

3) Conversion prices and the adjustments

The conversion price of the bonds is set based on the arithmetic mean of the business day’s closing share price multiplied by 102.03% premium rate before the effective date on July 1, 2022. As the Company distributed share dividends in the year ended 2024 and 2023, the conversion price was adjusted from NT$38.2 per share to NT$30 per share. As the Company’s stock was ex-dividend on August 9, 2024, the conversion price was adjusted from NT$30 per share to NT$28.3 per share.

The 4th domestic unsecured convertible bonds matured on July 21, 2025. All of which were fully converted before maturity in July 2025.

4) Partial split of convertible bond components

The convertible bonds contain both liability and equity components. The equity component was presented in equity under the heading of capital surplus - option. The effective interest rate of the liability component was 0.8947% per annum on initial recognition.

Liability component at January 1, 2024	$ 93,970
Interest charged at an effective interest rate	484
Convertible bonds converted into ordinary shares	(22,085)
Liability component at December 31, 2024	$ 72,369
---	---
Liability component at January 1, 2025	$ 72,369
---	---
Interest charged at an effective interest rate	184
Convertible bonds converted into ordinary shares	(72,553)
Liability component at December 31, 2025	$ -
---	---

OTHER LIABILITIES

	December 31
	2025	2024
Other payables
Salaries and bonus	$ 162,874	$ 111,802
Payable for interest	2,230	2,770
Shipping fees	11,284	9,763
Payable for annual leave	15,932	16,093
Others	68,361	77,365
	$ 260,681	$ 217,793
Other payables - related parties (Note 25)	$ 1,772,559	$ 558,171
Other liabilities - current
Refund liabilities	$ 73,406	$ 75,003
Receipts under custody	42,167	29,914
	$ 115,573	$ 104,917

17. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

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

b. Defined benefit plans

The defined benefit plan adopted by the Company in accordance with the 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 six months before retirement. The Company contributes 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 Company assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Company is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the "Bureau"); the Company has no right to influence the investment policy and strategy.

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

	December 31
	2025	2024
Present value of defined benefit obligation	$ 43,078	$ 39,126
Fair value of plan assets	(25,146)	(21,333)
Net defined benefit liability	$ 17,932	$ 17,793

Movements in net defined benefit liability were as follows:

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liability
Balance on January 1, 2024	$ 40,738	$ (18,236)	$ 22,502
Service cost
Current service cost	251	-	251
Net interest expense (income)	509	(232)	277
Recognized in profit or loss	760	(232)	528
Remeasurement
Return on plan assets	-	(1,600)	(1,600)
Actuarial loss - changes in financial assumptions	(738)	-	(738)
Actuarial gain - experience adjustments	1,634	-	1,634
Recognized in other comprehensive income	(2,372)	(1,600)	(3,972)
Contributions from the employer	-	(1,265)	(1,265)
Balance on December 31, 2024	$ 39,126	$ (21,333)	$ 17,793
			(Continued)

35 -

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liability
Balance on January 1, 2025	$ 39,126	$ (21,333)	$ 17,793
Service cost
Current service cost	248		248
Net interest expense (income)	587	(335)	252
Recognized in profit or loss	835	(335)	500
Remeasurement
Return on plan assets	-	(1,469)	(1,469)
Actuarial loss - changes in financial assumptions	678	-	678
Actuarial gain - experience adjustments	2,439	-	2,439
Recognized in other comprehensive income	3,117	(1,469)	1,648
Contributions from the employer	-	(2,009)	(2,009)
Balance on December 31, 2025	$ 43,078	$ (25,146)	$ 17,932
			(Concluded)

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

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

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

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

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

	December 31
	2025	2024
Discount rate(s)	1.25%	1.50%
Expected rate(s) of salary increase	2.75%	2.75%

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

	December 31
	2025	2024
Discount rate(s)
0.25% increase	$ (678)	$ (715)
0.25% decrease	$ 700	$ 738
Expected rate(s) of salary increase
0.25% increase	$ 678	$ 717
0.25% decrease	$ (660)	$ (698)

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

	December 31
	2025	2024
The expected contributions to the plan for the next year	$ 1,800	$ 2,000
The average duration of the defined benefit obligation	6.4 years	7.4 years

18. EQUITY

a. Ordinary shares

	December 31
	2025	2024
Number of shares authorized (in thousands)	350,000	350,000
Shares authorized	$ 3,500,000	$ 3,500,000
Number of shares issued and fully paid (in thousands)	235,391	233,045
Shares issued	$ 2,353,912	$ 2,330,449

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

The 4th domestic unsecured convertible bonds had been converted into 2,346 thousand and 781 thousand ordinary shares in 2025 and 2024, respectively. The Company has completed the registration of changes on September 19, 2025

b. Capital surplus

	December 31
	2025	2024
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (1)
Issuance of ordinary shares	$ 843,553	$ 840,090
The difference between consideration received or paid and the carrying amount of the subsidiaries’ net assets during actual disposal or acquisition	3,884	3,884
May be used to offset a deficit only (2)
Changes in percentage of ownership interests in subsidiaries	6,962	2,340
Changes in equity of associates and joint ventures accounted for using the equity method	8,663	8,663
Others	1,853	1,853
May not be used for any purpose
Components of equity of convertible corporate bonds issued by the Company	-	1,160
	$ 864,915	$ 857,990

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

2) Such capital surplus arises from the effect of changes in ownership interest in a subsidiary resulted from equity transactions other than actual disposal or acquisition, or from changes in capital surplus of subsidiaries accounted for using the equity method.

c. Retained earnings and dividends policy

The shareholders of the Company held their regular meeting on June 17, 2025 and in that meeting, resolved the amendments to the Company’s Articles of Incorporation (the “Articles”). Under the dividend policy to the Company after the amendments, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved by the shareholders in their meeting for distribution of dividends and bonuses to shareholders. The aforementioned special reserve refers to the amount appropriated when there is a net deduction under other equity items during the current period. An equivalent amount shall be appropriated from the current period’s net profit plus any items recognized in retained earnings that are not part of the net profit. If this is insufficient, the shortfall shall be appropriated from prior period retained earnings. If the deduction pertains to accumulated other equity items from prior periods, an equivalent amount shall be appropriated from prior period retained earnings. If still insufficient, the shortfall shall be appropriated from the current period’s net profit plus any items recognized in retained earnings that are not part of the net profit. If all or part of the dividends, bonuses, legal reserve and capital surplus are to be paid in cash, the board of directors shall be authorized to make a special resolution and report to the shareholders in their meeting. For the policies on the distribution of compensation of employees and remuneration of directors after the amendment, refer to compensation of employees and remuneration of directors in Note 20(g).

The Company’s dividend policy takes into account factors such as operational needs and the interests of shareholders. Each year, the remaining balance of the current year’s net profit after offsetting accumulated losses, appropriating the legal reserve, and making or reversing special earnings reserves in accordance with legal requirements is used accordingly. When there is no cumulative loss, the Company shall set aside share dividends at no less than 50% of the net profit of the current year. The way to distribute dividends could be either through cash or shares, and cash dividends shall not be less than 30% of the total dividends.

The shareholders of the Company held their regular meeting on June 18, 2024 and in that meeting, resolved the amendments to the Company’s Articles of Incorporation (the “Articles”). Under the dividend policy to the Company after the amendments, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and the remainder shall constitute the distributable earnings for the current year. And then distributable earnings together with undistributed retained earnings at the beginning of the period, shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved by the shareholders in their meeting for distribution of dividends and bonuses to shareholders. If all or part of the dividends, bonuses, legal reserve and capital surplus are to be paid in cash, the board of directors shall be authorized to make a special resolution and report to the shareholders in their meeting. For the policies on the distribution of compensation of employees and remuneration of directors after the amendment, refer to compensation of employees and remuneration of directors in Note 20(g).

The Company’s dividend policy is designed to meet present and future development projects and takes into consideration the investment environment, funding requirements, international or domestic competitive conditions while simultaneously meeting shareholders’ interests. Each year, the Company shall set aside share dividends at no less than 50% of the distributable earnings for the current year. The way to distribute dividends could be either through cash or shares, and cash dividends shall not be less than 30% of the total dividends.

Under the dividend policy to the Company before the amendments, as resolved by the shareholders of the Company held their regular meeting on June 18, 2024, where the Company made profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, setting aside or reversing a special reserve in accordance with the laws and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company’s board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders’ meeting for distribution of dividends and bonuses shareholders. If all or part of the dividends, bonuses, legal reserve and capital surplus are to be paid in cash, the board of directors shall be authorized to make a special resolution and report to the shareholders in their meeting.

An 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.

38 -

The appropriations of earnings for 2024 and 2023 approved in the shareholders' meetings on June 17, 2025 and June 18, 2024, respectively, were as follows:

	Appropriation of Earnings
	For the Year Ended December 31
	2024	2023
Legal reserve	$ 70,574	$ 59,573
Cash dividends	$ 538,051	$ 464,628
Cash dividends per share (NT$)	$ 2.3	$ 2.00

The shareholders' meeting resolved to distribute cash with capital surplus of $46,787 and $23,231 thousand on June 17, 2025 and June 18, 2024.

The appropriations of earnings for 2025 were proposed by the Company's board of directors on March 12, 2026. The appropriations and dividends per share were as follows:

	Appropriation of Earnings
	For the Year Ended December 31, 2025
Legal reserve	$ 70,694
Cash dividends	$ 470,782
Stock dividends	$ 117,696
Cash dividends per share (NT$)	$ 2
Stock dividends per share (NT$)	$ 0.5

The appropriations of earnings for 2025 will be resolved by the shareholder in their meeting to be held on June 12, 2026.

19. REVENUE RECOGNITION

	For the Year Ended December 31
	2025	2024
Revenue from contracts with customers
Revenue from sale of goods	$ 25,943,628	$ 23,087,572
	December 31
	2025	2024
Contract liabilities - current	$ 214,232	$ 11,784

Disaggregation of Revenue

Refer to Statement 11 for information about disaggregation of revenue.

40 -

20. NET PROFIT

Net profit was attributable to:

a. Interest income

	For the Year Ended December 31
	2025	2024
Bank deposits/fund loan and related parties	$ 35,547	$ 8,497

b. Other income

	For the Year Ended December 31
	2025	2024
Rental income	$ 4,220	$ 3,600
Others (Note 25)	5,695	8,878
	$ 9,915	$ 12,478

c. Other gains and losses

	For the Year Ended December 31
	2025	2024
Net foreign exchange gains and (losses)	$ (119,548)	$ 53,067
Bank charges	(16,939)	(24,175)
Gain on disposal of investments	-	1,026
Financial assets gains and losses
Financial assets at FVTPL in mandatory	(3,796)	(722)
Gain on disposal of property, plant and equipment	72	-
Others	(2,229)	(6,534)
	$ (142,440)	$ 22,662

d. Finance cost

	For the Year Ended December 31
	2025	2024
Interest on bank loans/loans from related parties/convertible bonds	$ 103,459	$ 229,718
Interest on lease liabilities	356	188
	$ 103,815	$ 229,906

e. Depreciation

	For the Year Ended December 31
	2025	2024
An analysis of depreciation by function
Operating expenses	$ 28,135	$ 21,253

f. Employee benefits expense

	For the Year Ended December 31
	2025	2024
Post-employment benefits
Defined contribution plans	$ 12,962	$ 12,328
Defined benefit plans (Note 17)	500	528
	13,462	12,856
Share-based compensation	3,648	304
Other employee benefits	410,456	352,520
Total employee benefits expense	$ 427,566	$ 365,680
An analysis of employee benefits expense by function
Operating expenses	$ 427,566	$ 365,680

g. Compensation of employees and remuneration of directors and supervisors

The Company accrues employees' compensation and remuneration to directors and supervisors at the rates no less than 1% and no higher than 5%, respectively, of net profit before income tax, employees' compensation, and remuneration to directors and supervisors. The employees' compensation and remuneration to directors and supervisors for the years ended December 31, 2025 and 2024 which have been approved by the Company's board of directors on March 12, 2026 and March 12, 2025, respectively, were as follows:

Accrual rate

	For the Year Ended December 31
	2025	2024
Compensation of employees	5.36%	5.11%
Remuneration to directors and supervisors	1.01%	1.12%
Amount
	For the Year Ended December 31
	2025	2024
	Cash	Cash
Compensation of employees	$ 50,000	$ 47,000
Remuneration to directors and supervisors	9,440	10,279

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

There was no difference between the actual amounts of employees' compensation and remuneration to directors and supervisors paid and the amounts recognized in the financial statements for the year ended December 31, 2024 and 2023.

Information on the employees' compensation and remuneration to directors and supervisors resolved by the Company's board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

h. Gain or loss on foreign currency exchange

	For the Year Ended December 31
	2025	2024
Foreign exchange gains	$ 1,921,689	$ 1,684,190
Foreign exchange losses	(2,041,237)	(1,631,123)
Net (losses) income	$ (119,548)	$ 53,067

21. INCOME TAXES

a. Major components of tax expense recognized in profit or loss:

	For the Year Ended December 31
	2025	2024
Current tax
In respect of the current year	$ 30,751	$ 37,535
Income tax on unappropriated earnings	4,856	3,577
Adjustments for prior years	(6,862)	276
	28,745	41,388
Deferred tax
In respect of the current year	136,395	119,157
Income tax expense recognized in profit or loss	$ 165,140	$ 160,545

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

	For the Year Ended December 31
	2025	2024
Profit before tax	$ 873,387	$ 863,073
Income tax expense calculated at the statutory rate	$ 174,677	$ 172,615
Nondeductible expenses in determining taxable income	24	2,323
Tax-exempt income	(7,555)	(18,246)
Income tax on unappropriated earnings	4,856	3,577
Adjustments for prior years’ tax	(6,862)	276
Income tax expense recognized in profit or loss	$ 165,140	$ 160,545

b. Major components of other comprehensive income tax expense profit or loss:

	For the Year Ended December 31
	2025	2024
Deferred tax
In respect of the current period
Remeasurement of defined benefit plans	$ (329)	$ 794
Exchange differences on translating the financial statements of foreign operations	(32,248)	46,310
	$ (32,577)	$ 47,104

c. Deferred tax assets and liabilities

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

For the year ended December 31, 2025

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax assets
Temporary differences
Unrealized inventory loss	$ 70,289	$ 7,625	$ -	$ 77,914
Defined benefit obligation	3,559	(302)	329	3,586
Others	19,185	12	-	19,197
	$ 93,033	$ 7,335	$ 329	$ 100,697
Deferred tax liabilities
Temporary differences
Unappropriated earnings of subsidiaries	$ 406,315	$ 128,702	$ -	$ 535,017
Unrealized foreign exchange gain	11,579	15,851	-	27,430
Exchange differences on translating the financial statements of foreign operations	64,797	-	(32,248)	32,549
Others	15,824	(823)	-	15,001
	$ 498,515	$ 143,730	$ (32,248)	$ 609,997

For the year ended December 31, 2024

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax assets
Temporary differences
Unrealized inventory loss	$ 49,838	$ 20,451	$ -	$ 70,289
Defined benefit obligation	4,500	(147)	(794)	3,559
Unrealized foreign exchange loss	28,304	(28,304)	-	-
Others	34,973	(15,788)	-	19,185
	$ 117,615	$ (23,788)	$ (794)	$ 93,033
				(Continued)

44 -

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred tax liabilities
Temporary differences
Unappropriated earnings of subsidiaries	$ 321,603	$ 84,712	$ -	$ 406,315
Unrealized foreign exchange gain	-	11,579	-	11,579
Exchange differences on translating the financial statements of foreign operations	18,487	-	46,310	64,797
Others	16,746	(922)	-	15,824
	$ 356,836	$ 95,369	$ 46,310	$ 498,515
				(Concluded)

d. Income tax assessments

The income tax returns through 2023 have been assessed by the tax authorities; the Company provided its income tax to be assessed by the tax authorities.

22. EARNINGS PER SHARE

	Unit: NT$ Per Share
	For the Year Ended December 31
	2025	2024
Basic earnings per share
Basic earnings per share	$ 3.02	$ 3.02
Diluted earnings per share
Diluted earnings per share	$ 2.99	$ 2.96

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

	For the Year Ended December 31
	2025	2024
Earnings used in the computation of basic earnings per share	$ 708,247	$ 702,528
Effect of potentially dilutive ordinary shares:
Convertible corporate bond after-tax interest	-	387
Net used in the computation of diluted earnings per share	$ 708,247	$ 702,915

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

	For the Year Ended December 31
	2025	2024
Weighted average number of ordinary shares in computation of basic earnings per share	234,738	232,579
Effect of potentially dilutive ordinary shares:
Interest on convertible bonds	-	2,920
Bonus to employees	1,821	1,598
Weighted average number of ordinary shares used in the computation of diluted earnings per share	236,559	237,097

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

23. CAPITAL MANAGEMENT

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

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

The Company is subject to the requirements and restrictions on the current ratio, financial liability ratio and interest protection ratio of the loan agreements with the banks.

24. FINANCIAL INSTRUMENTS

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

	December 31
	2025		2024
	Carrying Amount	Fair Value	Carrying Amount	Fair Value
Financial liabilities
Convertible bonds	$ -	$ -	$ 72,369	$ 99,600

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

1) Fair value hierarchy

December 31, 2025

	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Non-derivative instruments
Foreign unlisted shares	$ -	$ -	$ 88,053	$ 88,053
Financial assets at FVTOCI
Investments in debt instruments
Trade receivables	$ -	$ -	$ 4,382,133	$ 4,382,133
December 31, 2024	Level 1	Level 2	Level 3	Total
Financial assets at FVTPL
Non-derivative instruments
Foreign unlisted shares	$ -	$ -	$ 91,849	$ 91,849
Financial assets at FVTOCI
Investments in debt instruments
Trade receivables	$ -	$ -	$ 1,976,346	$ 1,976,346

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

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

For the year ended December 31, 2025

Financial Assets	Financial Assets at FVTPL	Financial Assets at FVTOCI
	Non-derivative Instruments	Equity Instruments	Total
Balance at the beginning of the year	$ 91,849	$ 1,976,346	$ 2,068,195
Recognized in profit or loss	(3,796)	-	(3,796)
Net changes in trade receivables	-	2,405,787	2,405,787
Balance at the end of the year	$ 88,053	$ 4,382,133	$ 4,470,186

For the year ended December 31, 2024

Financial Assets	Financial Assets at FVTPL	Financial Assets at FVTOCI
	Non-derivative Instruments	Equity Instruments	Total
Balance at the beginning of the year	$ 90,373	$ 6,652	$ 97,025
Purchases	2,198	-	2,198
Recognized in profit or loss	(722)	-	(722)
Recognized in other comprehensive income	-	(5,004)	(5,004)
Net changes in trade receivables	-	1,974,698	1,974,698
Balance at the end of the year	$ 91,849	$ 1,976,346	$ 2,068,195

3) Valuation techniques and inputs applied for Level 3 fair value measurement

Foreign unlisted shares were determined using the market approach. The comparable company method of market approach is based on the profitability at the end of the year to select the market multiplier of comparable companies. The redemption right of convertible corporate bonds was evaluated according to the binary tree model. The valuation method is chosen by the Company after careful evaluation. Therefore, the fair value measurement is reasonable. However, the use of different evaluation models or fair value may lead to different evaluation results.

c. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Financial assets at amortized cost (Note 1)	$ 2,771,204	$ 2,866,726
Financial assets at FVTPL
Mandatorily classified as at FVTPL - non-current	88,053	91,849
Financial assets at FVTOCI
Investments in debt instruments	4,382,133	1,976,346
Financial liabilities
Amortized cost (Note 2)	9,293,122	8,099,984

1) The balances include financial assets measured at amortized cost, which comprise cash and cash equivalents, financial asset at amortized cost, trade receivables and other receivables.
2) The balances include financial liabilities measured at amortized cost, which comprise short-term loans, short-term bills payable, trade payables, other payables, bonds payable, current portion of long-term borrowings and long-term borrowings.

d. Financial risk management objectives and policies

The Company’s major financial instruments include equity investment, trade receivables, trade payables, bonds, borrowings and short-term bills payable. The Company’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. These risks are market risk (including currency risk and interest rate risk), credit risk and liquidity risk.

1) Market risk

The Company’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (refer to (a) below) and interest rates (refer to (b) below).

a) Foreign currency risk

The Company had foreign currency sales and purchases, which exposed the Company to foreign currency risk.

The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities and of the derivatives exposing to foreign currency risk at the end of the reporting period are set out in Note 27.

Sensitivity analysis

The Company was mainly exposed to the U.S. dollar.

The following table details the Company’s sensitivity to a 3% increase and decrease in the New Taiwan dollar (the functional currency) against the U.S. dollars currencies. Sensitivity rate of 3% is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items designated as cash flow hedges and their adjusted translation at the end of the reporting period for a 3% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit and other equity associated with the New Taiwan dollar strengthen 3% against the relevant currency. For a 3% weakening of the New Taiwan dollar against the relevant currency, there would be an equal and opposite impact on pre-tax profit and other equity and the balances below would be negative.

U.S. Dollars Impact
For the Year Ended December 31
	2025	2024
Profit or loss	$ 88,823	$ 69,094

b) Interest rate risk

The Company was exposed to interest rate risk because the Company borrowed funds at both fixed and floating interest rates. The risk is managed by the Company by maintaining an appropriate mix of fixed and floating rate borrowings, and using interest rate swap contracts and forward interest rate contracts. Hedging activities are evaluated regularly to align with interest rate views and defined risk appetite, ensuring the most cost-effective hedging strategies are applied.

48 -

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

	December 31
	2025	2024
Fair value interest rate risk
Financial assets	$ 17,000	$ -
Financial liabilities	4,682,270	5,438,910
Cash flow interest rate risk
Financial assets	125,233	342,192
Financial liabilities	350,000	350,000

Sensitivity analysis

The sensitivity analyses below were determined based on the Company’s exposure to interest rates for both derivatives and non-derivative instruments at the end of the reporting period. For floating rate liabilities, the analysis was prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. A 20 basis point increase or decrease was used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 20 basis points higher/lower and all other variables were held constant, the Company’s pre-tax profit for the years ended December 31, 2025 and 2024 would have decreased by $450 thousand and $16 thousand, respectively.

c) Other price risk

The Company was exposed to equity price risk through its investments in equity securities. Equity investments are held for strategic rather than for trading purposes, the Company does not actively trade these investments.

Sensitivity analysis

If equity prices had been 3% higher/lower, pre-tax profit for the years ended December 31, 2025 and 2024 would have increased by $2,642 thousand and $2,755 thousand, respectively,

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Company. As at the end of the reporting period, the Company’s maximum exposure to credit risk which will cause a financial loss to the Company due to failure of counterparties to discharge an obligation and financial guarantees provided by the Company could arise from carrying amount of the respective recognized financial assets as stated in the balance sheets.

In addition, the credit risk was limited because the counterparty of working capital and derivative financial instruments were banks with good credit.

The customers of trade receivables were scattered in different geographical areas. The Group continuously evaluated the financial condition of the customers of trade receivables. The concentration of credit risk by geographical location was mainly in Taiwan and China.

49 -

3) Liquidity risk

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

The Company relies on bank borrowings as a significant source of liquidity. As of December 31, 2025 and 2024, the Company had available unutilized short-term bank loan facilities set out in (b) below.

a) Liquidity and interest risk rate tables for non-derivative financial liabilities

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

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

December 31, 2025

	On Demand or Less than 1 Month	1-3 Months	3 Months to 1 Year	1 Year to 5 Years
Non-derivative financial liabilities
Non-interest bearing	$ 3,389,561	$ 1,073,650	$ 716	$ -
Lease liabilities	1,412	2,773	10,700	9,749
Debt instruments	2,932,712	656,646	1,114,881	389,998
Financial guarantee contracts	309,738	-	-	-
	$ 6,633,423	$ 1,733,069	$ 1,126,297	$ 399,747

Additional information on the maturity analysis for lease liabilities:

	Less than 1 Year	1-5 Years
Lease liabilities	$ 14,885	$ 9,749

December 31, 2024

	On Demand or Less than 1 Month	1-3 Months	3 Months to 1 Year	1 Year to 5 Years
Non-derivative financial liabilities
Non-interest bearing	$ 1,266,981	$ 478,501	$ 707,208	$ 1,325
Lease liabilities	814	1,579	6,285	6,545
Debt instruments	2,395,431	854,998	393,723	2,234,549
Financial guarantee contracts	660,075	-	-	-
	$ 4,323,301	$ 1,335,078	$ 1,107,216	$ 2,242,419

Additional information on the maturity analysis for lease liabilities:

	Less than 1 Year	1-5 Years
Lease liabilities	$ 8,678	$ 6,545

b) Financing facilities

	December 31
	2025	2024
Secured borrowing
Amount used	$ 2,288,000	$ 2,838,000
Amount unused	2,921,650	2,581,675
	$ 5,209,650	$ 5,419,675
Unsecured borrowing
Amount used	$ 2,730,000	$ 2,880,000
Amount unused	2,904,355	3,363,810
	$ 5,634,355	$ 6,243,810

e. Transfers of financial assets

Factored trade receivables hat are not yet overdue at the end of the year were as follows:

Counterparties	Receivables Sold	Amounts Reclassified from Accounts Receivable to Other Receivables (Note 10)	Amounts Not Yet Advanced	Advances Received at Year-end
2025
Financial institutions	US$ 16,083	US$ 9,941	US$ 8,344	US$ 6,142
2024
Financial institutions	US$ 457	US$ 192	US$ 153	US$ 265

The above credit lines may be used on a revolving basis.

Pursuant to the Company’s factoring agreements, losses from commercial disputes were borne by the Company, while losses from credit risk were borne by the banks.

As of December 31, 2025 and 2024, the interest rates on advances received were 1.97%-2.00% and 2.04%-2.20%, respectively.

As of December 31, 2025 and 2024, the credit line was US$202,295 thousand and US$277,278 thousand, respectively.

TRANSACTIONS WITH RELATED PARTIES

Besides as disclosed elsewhere in the other notes, details of major transactions between the Company and other related parties are disclosed below.

a. Related party name and relationship

Related Party Name	Relationship
All Plus Co., Ltd.	Subsidiary
Alltek Technology (H.K.) Limited.	Subsidiary
Alltek Technology (Shenzhen) Ltd.	Subsidiary
YMY Co., Ltd.	Subsidiary
Pantek Technology Corp.	Subsidiary
Pantek Global Corp.	Subsidiary
Alltek Marine Electronics Corp.	Subsidiary
Alder Optomechanical Corp.	Subsidiary
Genral Life Biotechnology Co., Ltd.	Associate
Yuban Technology Co., Ltd.	Associate
Bestsun International Co., Ltd.	Related party in substance

b. Sales

Line Item	Related Party Type	For the Year Ended December 31
		2025	2024
Sales	Subsidiary
	Alltek Technology (H.K.) Limited	$ 326,369	$ 111,017
	All Plus Co., Ltd.	59,697	36,803
	Others	1,518	1,941
		$ 387,584	$ 149,761

The selling price was made at cost plus a fixed profit for related parties. The collection terms were net 150 days from the end of the month for related parties and net 30 to 60 days from the end of the month for third parties.

c. Purchases

Line Item	Related Party Type	For the Year Ended December 31
		2025	2024
Purchases	Subsidiary
	All Plus Co., Ltd.	$ 55,168	$ 66,989
	Alltek Technology (H.K.) Limited	2,592	1,905
		$ 57,760	$ 68,894

The purchasing price was made at cost plus a fixed profit for related parties.

The purchase terms were not significantly different from those of ordinary suppliers.

d. Receivables from related parties (except loans to related parties)

Line Item	Related Party Type	For the Year Ended December 31
		2025	2024
Receivables	Subsidiary	$ 1,005	$ 55
Other receivables	Subsidiary	$ 1,150	$ 1,411

The outstanding trade receivables from related parties are unsecured. For the year ended December 31, 2025 and 2024, no bad debt expense were recognized for trade receivables from related parties.

e. Payables to related parties (excluding loans from related parties)

Line Item	Related Party Type	For the Year Ended December 31
		2025	2024
Accounts payable	Subsidiary	$ -	$ 54,751
Other payables	Associates	$ 9	$ 4,126

The outstanding trade payable from related parties are unsecured.

f. Financing provided to others (recognized as other receivables)

Interest revenue

Related Party Category/Name	For the Year Ended December 31
	2025	2024
Alltek Technology (H.K.) Limited	$ 1,448	$ -

The Company provided to its subsidiaries Alltek Technology (H.K.) Limited with unsecured short-term loans at rates comparable to market interest rates.

g. Loans from related parties (recognized as other payables)

Related Party Category/Name	For the Year Ended December 31
	2025	2024
Alltek Technology (H.K.) Limited	$ -	$ 8,687
All Plus Co., Ltd.	1,772,550	545,358
	$ 1,772,550	$ 554,045

The Company obtained loans from its subsidiary, All Plus Co., Ltd., without interest. The loans from the subsidiary are unsecured.

h. Endorsements and guarantees: Refer to Table 2.

i. Other transactions with related parties

Related Parties Types	Transaction Type	December 31
		2025	2024
Subsidiaries	Refund liabilities	$ 15	$ -
Associates	Prepayments for equipment	$ -	$ 5,307
		For the Year Ended December 31
Related Parties Types	Transaction Type	2025	2024
Subsidiaries	Rental revenue	$ 4,220	$ 3,600
Subsidiaries	Miscellaneous income	$ 1,537	$ 920
Subsidiaries	Interest expenses	$ 12,434	$ 41,557
Associates	Miscellaneous income	$ 1,061	$ 450
Subsidiaries	Other expenses	$ 219	$ -
Associates	Other expenses	$ 9	$ -
Related parties	Other expenses	$ 1,533	$ -

Pantek Technology Co., Ltd. had leased the warehouse in Xizhi, New Taipei City. In 2025 and 2024, the monthly rent is $300 thousand.

j. Compensation of key management personnel

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 60,662	$ 61,835
Post-employment benefits	1,346	1,316
Share-based compensation	657	54
	$ 62,665	$ 63,205

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

26. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets were provided as collateral for bank borrowings:

	December 31
	2025	2024
Pledged bank deposits (recognized as financial assets at amortized cost - current)	$ 17,000	$ 9,100
Property and plant, net	579,740	548,101
	$ 596,740	$ 557,201

27. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The following information was aggregated by the foreign currencies other than functional currencies of the Company entities and the exchange rates between foreign currencies and respective functional currencies were disclosed. The significant assets and liabilities denominated in foreign currencies were as follows:

December 31, 2025

	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	$ 231,392	31.43 (USD:NTD)	$ 7,272,640
Non-monetary items
Investments accounted for using the equity method
USD	136,236	31.43 (USD:NTD)	$ 4,281,901
Financial liabilities
Monetary items
USD	137,190	31.43 (USD:NTD)	$ 4,311,875

December 31, 2024

	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD	$ 141,640	32.785 (USD:NTD)	$ 4,643,655
Non-monetary items
Investments accounted for using the equity method
USD	115,422	32.785 (USD:NTD)	$ 3,784,111
Financial liabilities
Monetary items
USD	71,390	32.785 (USD:NTD)	$ 2,340,522

The significant realized and unrealized foreign exchange gains (losses) were as follows:

	For the Year Ended December 31
	2025		2024
Foreign Currency	Exchange Rate	Net Foreign Exchange Gain (Loss)	Exchange Rate	Net Foreign Exchange Gain (Loss)
NTD	1 (NTD:NTD)	$ (119,548)	1 (NTD:NTD)	$ 53,067

29. SEPARATELY DISCLOSED ITEMS

a. Information on significant transactions and investees:

1) Financing provided to others. (Table 1)
2) Endorsements/guarantees provided. (Table 2)
3) Significant marketable securities held (excluding investment in subsidiaries, associates and joint controlled entities). (Table 3)
4) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 4)
5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (None)

b. Information on investees. (Table 5)

c. Information on investments in mainland China

1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 6)

2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses: (None)

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

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

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

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

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

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

57 -

TABLE 1

ALLTEK TECHNOLOGY CORP.

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No. (Note 1)	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	Aggregate Financing Limits (Note 3)
													Item	Value
0	Alltek Technology Corp.	Pantek Technology Corp.	Trade receivable from related parties	Yes	$ 150,000	$ 150,000	$ -	According to mutual agreement	Short-term accommodations	$ -	Operating turnover	$ -	-	-	$ 528,964 (Note 2)	$ 2,644,821
		Alder Optomechanical Corp.	Trade receivable from related parties	Yes	30,000	30,000	-	According to mutual agreement	Short-term accommodations	-	Operating turnover	-	-	-	528,964 (Note 2)	2,644,821
		Alltek Technology (H.K.) Limited	Trade receivable from related parties	Yes	500,000	400,000	-	According to mutual agreement	Short-term accommodations	-	Operating turnover	-	-	-	528,964	2,644,821
		All Plus Co., Ltd.	Trade receivable from related parties	Yes	500,000	400,000	-	According to mutual agreement	Short-term accommodations	-	Operating turnover	-	-	-	528,964	2,644,821

Note 1: a. 0: Investors.
b. The investee companies are numbered in order by company, starting with the Arabic number 1.

Note 2: The maximum amount for individual enterprise is $5,289,641 (net worth as per latest financial report) = 10% = $528,964.

Note 3: The aggregate financing limits is $5,289,641 (net worth as per latest financial report) = 50% = $2,644,821.

TABLE 2

ALLTEK TECHNOLOGY CORP.

ENDORSEMENTS/GUARANTEES PROVIDED

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

No. (Note 1)	Endorser/Guarantor	Guarantee		Limits on Endorsement/ Guarantee Given on Behalf of Each Party (Note 3)	Maximum Amount Endorsed/ Guaranteed During the Period	Outstanding Endorsement/ Guarantee at the End of the Period	Actual Borrowing Amount	Amount Endorsed/ Guaranteed by Collaterals	Ratio of Accumulated Endorsement/ Guarantee to Net Equity in Latest Financial Statements (%)	Aggregate Endorsement/ Guarantee Limit (Note 3)	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 2)
0	Alltek Technology Corp.	Alltek Technology (H.K) Limited	b	$ 13,224,103	$ 3,014,137	$ 2,982,707	$ -	$ -	56.39	$ 15,868,923	Y	-	-
		All Plus Co., Ltd.	c	13,224,103	207,438	-	-	-	-	15,868,923	Y	-	-
		Pantek Technology Corp.	b	13,224,103	1,272,465	709,585	49,377	-	13.41	15,868,923	Y	-	-
		Alder Optomechanical Corp.	b	13,224,103	368,000	266,361	260,361	-	5.04	15,868,923	Y	-	-

Note 1: a. 0: Investors.
b. The investee companies are numbered in order by company, starting with the Arabic number 1.

Note 2: a. Trading partner.
b. Subsidiaries directly held over 50% equity.
c. Company that directly or indirectly holds more 50% of the shares in investees.
d. Company where investees directly or indirectly holds of or exceeding 50% of its voting shares.
e. Guaranteed by the Company according to the construction contract.
f. An investee company. The guarantees were provided based on the Company's proportionate share in the investee company.
g. Joint and several guaranteed by the Company according to the pre-construction contract.

Note 3: a. Endorsement/guarantee given on direct/indirect voting rights over fifty percent (50%). The maximum amount for endorsement guarantee is $5,289,641 (net worth as per latest financial report) × 250% = $13,224,103.
b. The maximum amount for endorsement guarantee is $5,289,641 (net worth as per latest financial report) × 300% = $15,868,923.

TABLE 3

ALLTEK TECHNOLOGY CORP.

SINGIFICANT MARKETABLE SECURITIES HELD

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

Holding Company Name	Type and Name of Marketable Securities	Relationship with the Holding Company	Financial Statement Account	December 31, 2025
				Shares	Carrying Amount	Percentage of Ownership	Fair Value
Alltek Technology Corp.	Foreign unlisted shares - preference shares
Kenron Holding Corporation	N	Financial assets at FVTPL - non-current	496,587	$ 88,053	-	$ 88,053	-

Note 1: Marketable securities in the table refer to shares, bonds, beneficiary certificates and other related securities within the scope of IFRS 9 "Financial Instruments".
Note 2: If the marketable securities issuer is not a related party, this column is not required.
Note 3: For those measured by fair value, the amount is the book balance after adjustment by fair value evaluation in the column of amount; for those not measured by fair value, the amount is the original acquisition cost or the cost after amortization deduction of accumulated impairments in the column of carrying amount.
Note 4: Where marketable securities held are pledged as security or pledged for borrowings or with restrictions on their uses under some agreements, the numbers of shares and amount pledged as well as restrictions shall be stated in the Note column.
Note 5: This table discloses the marketable securities that the company has determined should be presented based on the principle of materiality.
Note 6: With respect to the information of subsidiaries, associates and joint ventures, please see Tables 5 and 6.

TABLE 4

ALLTEK TECHNOLOGY CORP.

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Transaction Details				Abnormal Transaction		Notes/Accounts Receivable (Payable)		Note
			Purchase/Sale	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Alltek Technology Corp.	Alltek Technology (H.K.) Limited.	Subsidiary	Sales	$ 326,369	1	180 days	Cost plus a fixed profit	No significant differences	Trade receivable $ -	-	-

TABLE 5

ALLTEK TECHNOLOGY CORP.

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investor Company	Location	Main Businesses and Products	Original Investment Amount		Balance as of December 31, 2025			Net Income (Loss) of the Investor	Share of Profits (Loss)	Note
				December 31, 2025	December 31, 2024	Shares	%	Carrying Amount
Alltek Technology Corp.	Pantek Technology Corp.	Taiwan	Selling and marketing of communication components	$ 588,132	$ 588,132	53,200	100	$ 636,319	$ 4,105	$ 4,105	Subsidiary
	Alltek Marine Electronics Corp.	Taiwan	Designing and manufacturing of high quality AIS products	171,622	171,622	10,950	53	181,524	16,119	8,769	Subsidiary
	General Life Biotechnology Co., Ltd.	Taiwan	BeneCheck develops and manufactures in-vitro diagnostic biosensors	70,072	70,072	6,923	23	144,319	56,772	13,101	Associate
	Alltek Technology (Singapore) Pte. Ltd.	Singapore	Selling and marketing of communication components	10,929	10,929	500	100	-	(3,705)	(3,705)	Subsidiary
	Alder Optomechanical Corp.	Taiwan	Selling and manufacturing lighting devices	101,200	101,200	8,872	51	45,355	(20,299)	(10,374)	Subsidiary
	Alltek Group Corp.	Seychelles	Investments	71,477	71,477	1,000	100	1,919,599	7,385	7,385	Subsidiary
	Yuban Technology Co., Ltd.	Taiwan	Electrical appliance, telecommunication equipment and information software, etc.	191,862	191,862	9,157	15	226,108	142,955	21,443	Associate
	Alltek Technology (H.K.) Limited	Hong Kong	Selling and marketing of communication components	US$ 28,759	US$ 28,759	222,450	100	2,361,504	639,829	639,829	Subsidiary
Pantek Technology Corp.	Pantek Global Corp.	Seychelles	Selling and marketing of communication components	US$ 4,750	US$ 4,750	4,750	100	159,725	(8,066)	N/A	Subsidiary
	Yuban Technology Co., Ltd.	Taiwan	Electrical appliance, telecommunication equipment and information software, etc.	127,908	127,908	6,105	10	150,738	142,955	14,296	Associate
Alltek Group Corp.	All Plus Co., Ltd.	British Virgin Islands	Selling and marketing of communication components	US$ 251	US$ 251	50	100	US$ 39,869	US$ 199	N/A	Subsidiary
	All Pan Co., Ltd.	Seychelles	Investments	US$ 750	US$ 750	750	100	US$ 711	US$ 59	N/A	Subsidiary

Note: With respect to the information of investee company in mainland China, please refer to Table 6.

TABLE 6

ALLTEK TECHNOLOGY CORP.

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Investee Company	Main Businesses and Products	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	Investment Gain (Loss) (Note 2)	Carrying Amount as of December 31, 2025	Accumulated Repatriation of Investment Income as of December 31, 2025
						Outward	Inward
Alltek Technology Corp.	Alltek Technology (Shenzhen) Ltd. YMY Co., Ltd.	Selling and marketing of communication components Selling and marketing of communication components	RMB 13,270	Note 1	US$ 250 ($ 8,196)	$ -	$ -	US$ 250 ($ 7,858)	$ 2,627	100	$ 2,627	$(12,343)	$ -
			US$ 750	Note 2	US$ 500 ($ 16,393)	-	-	US$ 500 ($ 15,715)	1,732	100	1,732	22,313	-
Investor Company	Accumulated Outward Remittance for Investment in Mainland China as of December 31, 2025	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on the Amount of Investment Stipulated by Investment Commission, MOEA (Note 3)
---	---	---	---
Alltek Technology Corp.	US$ 750
($ 23,573)	US$ 2,506
($ 78,764)	$ 3,173,785

Note 1: Investment types are classified as follows:
a. Reinvested by Alltek Technology (H.K.) Limited.
b. Reinvested by All Pan Co., Ltd.

Note 2: The investment income is recognized based on the financial statements of the visa certified by the visa accountant of the parent company in Taiwan.

Note 3: The total amount invested in mainland China shall not exceed 60% of the net worth of Alltek Technology Corp. partners.

$5,289,641 \times 60\% = \$3,173,785.$

AI assistant

ALLTEK — Audit Report / Information 2025

52305_rns_2026-05-18_243f24c6-ccad-42ad-aa09-ae24a9d36d59.pdf

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of Sales Revenue

Inventory Valuation and Allowance Risk

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notice to Readers

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

1) Financial assets

a) Measurement categories

i. Financial assets at FVTPL

ii. Financial assets at amortized cost

5. MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Key Sources of Estimation Uncertainty

Write-down of inventories

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL INSTRUMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS

8. FINANCIAL ASSETS AT AMORTIZED COST - CURRENT

9. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Trade Receivables

11. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

13. LEASE ARRANGEMENTS

17. RETIREMENT BENEFIT PLANS

18. EQUITY

19. REVENUE RECOGNITION

Disaggregation of Revenue

20. NET PROFIT

21. INCOME TAXES

22. EARNINGS PER SHARE

23. CAPITAL MANAGEMENT

24. FINANCIAL INSTRUMENTS

Sensitivity analysis

c) Other price risk

Sensitivity analysis

2) Credit risk

26. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

27. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

29. SEPARATELY DISCLOSED ITEMS

ALLTEK TECHNOLOGY CORP.

ALLTEK TECHNOLOGY CORP.

ALLTEK TECHNOLOGY CORP.

ALLTEK TECHNOLOGY CORP.

ALLTEK TECHNOLOGY CORP.

ALLTEK TECHNOLOGY CORP.

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