Stock Code: 8215

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements and Independent Auditors' Report

2025 & 2024

Address: No. 29, Jianguo E. Rd., Guishan Dist., Taoyuan City 333403, Taiwan (R.O.C.)
Tel: (03)3748800

The independent auditors' report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. NOT AUDITED OR REVIEWED BY AUDITORS. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' report and consolidated financial statements, the Chinese version shall prevail.

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Table of Contents

Items	Pages
1. Front Page	1
2. Table of Contents	2
3. Statement of Declaration	3
4. Independent Auditor’s Report	4-8
5. Consolidated Balance Sheets	9-10
6. Consolidated Statements of Comprehensive Income	11
7. Consolidated Statements of Changes in Equity	12
8. Consolidated Statements of Cash Flows	13-14
9. Notes to Consolidated Financial Statements
1) Company History	15
2) Date and Procedures of Authorization of Financial Statements	15
3) Application of New, Amended and Revised Accounting Standards and Interpretations	15-17
4) Summary of Material Accounting Policies	17-36
5) The Primary Sources of Uncertainties in Material Accounting Judgments, Estimates, and Assumptions	36-37
6) Descriptions of Material Accounting Items	37-76
7) Related Party Transactions	76-80
8) Pledged Assets	81
9) Material Contingent Liabilities and Unrecognized Contractual Commitments	81
10) Material Loss from Disaster	81
11) Material Subsequent Events	81
12) Others	81
13) Supplementary Disclosures
a. Information on significant transactions	82-84
b. Information on reinvestment	84
c. Information on investments in mainland China	85
14) Segment Information	86-87

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Statement of Declaration

The entities that are required to be included in the combined financial statements of BenQ Materials Corporation and subsidiaries as of and for the year ended December 31, 2025 under the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are the same as those included in the Consolidated Financial Statements prepared in conformity with International Financial Reporting Standards No. 10 endorsed by the Financial Supervisory Commission and has been issued and become effective. In addition, the information required to be disclosed in the combined financial statements is included in the Consolidated Financial Statements. Consequently, BenQ Materials Corporation and its subsidiaries do not prepare a separate set of combined financial statements.

Hereby certify

Company Name: BenQ Materials Corporation

Chairman: Zhien-Chi (Z.C) Chen

Date: February 24, 2026

Independent Auditor's Report

To The Board of Directors of BenQ Materials Corporation,

Opinions on the audit

We have audited the Consolidated Balance Sheets of BenQ Materials Corporation and its subsidiaries (the BenQ Corporation) as of December 31, 2025 and 2024, the Consolidated Statements of Comprehensive Income, Consolidated Statements of Changes in Equity, Consolidated Statements of Cash Flows, and Notes to Consolidated Financial Statements (including Summary of Significant Accounting Policies) for the annual period from January 1 to December 31, 2025 and 2024.

In our opinion, the aforementioned Consolidated Financial Statements present fairly, in all material respects, the consolidated financial position of BenQ Materials Corporation and subsidiaries as of December 31, 2025 and 2024, and its consolidated financial performance and cash flows for the annual periods ended December 31, 2025 and 2024 in conformity with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," as well as International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and effected by the Financial Supervisory Commission.

Basis of opinions on the audit

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants Engaged and Auditing Standards. Our responsibility under those standards will be further described in the section titled "The Accountants' Responsibilities in Auditing the Consolidated Financial Statements." We have stayed independent from BenQ Materials Corporation as required by The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled other responsibilities as stipulated by the Norm. 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 2025 Consolidated Financial Statements of BenQ Materials Corporation and its subsidiaries. These matters were addressed in the context of our audit of the Consolidated Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The accountant's judgment should communicate the key audit matters on the audit report as follows:

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I. Inventory Valuation

For the accounting policies of inventories, please refer to Note 4 (8) of the Consolidated Financial Statements; For the accounting estimates of the inventory evaluation and the description of the uncertainty of the assumptions, please refer to Note 5(1) of the Consolidated Financial Statements; For the description of important accounting items in inventories, please refer to Note 6 (7) of the Consolidated Financial Statements.

Description of Key Audit Matters:

Inventories of BenQ Materials Corporation are mainly film sheet products. Inventory is measured by the lower of cost and NRV. As BenQ Materials Corporation's inventory is easily affected by the market demand of the products used and the yield rate of the production process, resulting in sluggish or falling prices, inventory evaluation is one of the important evaluation items for the accountants to perform the review of the Consolidated Financial Statements.

Our audit procedures performed in respect of the above area included the following:

The accountant's main audit procedures for the above key verification items include reviewing the inventory age report and analyzing the changes in the inventory age in each period; sampling and testing the inventory age report by BenQ Materials Corporation, reviewing the management and sales meeting to evaluate the situation of inventory depletion; evaluating whether the assessment of inventory has been handled in accordance with the accounting policies established by BenQ Materials Corporation; performing inventory retrospective testing to verify the rationality of the provision of bad debt losses.

II. Goodwill Impairment Assessment

For the accounting policy on the impairment of non-financial assets, please refer to Note 4(14) of the Consolidated Financial Statements; for the accounting estimates and assumptions used to estimate the impairment of goodwill, please refer to Note 5(2) of the Consolidated Financial Statements; for the description of the goodwill impairment test, please refer to Note 6(14) of the Consolidated Financial Statements.

Description of Key Audit Matters:

The goodwill arising from the merger of BenQ Materials Group and Cenefom Corp. shall be subject to an impairment test annually or whenever there are indications of impairment. Since the assessment of the recoverable amount of the cash-generating unit to which the goodwill belongs involves numerous assumptions and estimates made by management, the evaluation of goodwill impairment is one of the key audit matters in our audit of the consolidated financial statements of BenQ Materials Group.

Our audit procedures performed in respect of the above area included the following:

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The primary audit procedures performed in response to the aforementioned key audit matter include obtaining the goodwill impairment assessment report prepared by management; evaluating the reasonableness of the estimation basis and key assumptions used by management in measuring the recoverable amount, including the discount rate, projected revenue growth rate, and future cash flow forecasts; conducting a sensitivity analysis on the test results; and reviewing whether BenQ Materials Group has adequately disclosed relevant information regarding the goodwill impairment assessment.

Other Matters

BenQ Materials Corporation has also compiled Individual Financial Statements for 2025 and 2024, and they have also received an unqualified audit opinion from our CPA for your reference.

The Management's Responsibility and Governing Body of the Consolidated Financial Statements

It is the management's responsibility to fairly present the Consolidated Financial Statements in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, as well as International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission, and to maintain internal controls which are necessary for the preparation of the Consolidated Financial Statements so as to avoid material misstatements due to fraud or errors therein.

In preparing for the Consolidated Financial Statement, responsibilities of the management also included assessment of the capacity to continue operation, disclosure of related matters, and the accounting approaches to be adopted when the Company continues to operate unless the management intends to liquidate or suspend the business of BenQ Materials Corporation if there was not any other option except liquidation or suspension of the Company's business.

The governing bodies of BenQ Materials Corporation and its subsidiaries (including the Audit Committee or the supervisors) have the responsibility to oversee the process by which the financial statements are prepared.

The Accountants' Responsibilities in Auditing the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance on whether the Consolidated Financial Statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. "Reasonable assurance" refers to high level of assurance. Nevertheless, our audit, which was carried out in accordance with the generally accepted auditing standards, does not guarantee that a material misstatement(s) will be detected in the Consolidated Financial Statements. Misstatements can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these Consolidated Financial Statements.

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We have utilized our professional judgment and professional skepticism when performing auditing work in accordance with the auditing standards. We also:

Identified and evaluated the risk of a material misstatement(s) due to fraud or errors in the Consolidated Financial Statements; designed and carried out appropriate countermeasures for the assessed risks; and obtained sufficient and appropriate evidence as the basis for the audit report. The risk of not detecting a significant 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.
Acquired necessary understanding of internal controls pertaining to the audit in order to develop audit procedures appropriate under the circumstances. Nevertheless, the purpose of such understanding is not to provide any opinion on the effectiveness of the internal controls of BenQ Materials Corporation.
Assess the appropriateness of the accounting policies adopted by the management, as well as the reasonableness of their accounting estimates and relevant disclosures.
Concluded, based on the audit evidence acquired, on the appropriateness of the management's use of the going-concern basis of accounting, and determined whether a material uncertainty exists where events or conditions that might cast significant doubt on the ability of BenQ Materials Corporation to continue as going concerns. If we believe there are events or conditions indicating the existence of a material uncertainty, we are required to remind the users of the Consolidated Financial Statements in our audit report of the relevant disclosures therein, or to amend our audit opinion when any inappropriate disclosure was found. Our conclusion is based on the audit evidence acquired as of the date of the audit report. However, future events or conditions may cause BenQ Materials Corporation to cease to continue as a going concern.
Evaluated the overall presentation, structure, and content of the Consolidated Financial Statements (including the related notes), and determined whether the Consolidated Financial Statements present related transactions and events fairly.
Acquired sufficient and appropriate audit evidence regarding financial information of entities within the Group in order to express an opinion on the Consolidated Financial Statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion on BenQ Materials Corporation.

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

We also provided governing bodies with a declaration that we had complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that might possibly be deemed to impair our independence (including relevant preventive measures).

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From the matters communicated with those charged with governance, we determined the key audit matters of the Consolidated Financial Statements of BenQ Materials Corporation of 2025. We describe these matters in our auditor's 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 communications.

KPMG Taiwan

CPA:

Approved audit number : Jin-Guan-Zheng-Shen-Zi No. 1040010193
Jin-Guan-Zheng-Liu-Zi No. 0940100754

Date: February 24, 2026

Notice to Readers

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.

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BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2025 and 2024

Unit: NT$ thousand

	Assets	2025.12.31		2024.12.31
		Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents (Note 6 [1])	$ 729,256	3	684,063	3
1110	Financial assets at fair value through profit or loss - current (Note 6 (3))	109,043	1	1,457	-
1120	Financial assets at fair value through other comprehensive income - current (Note 6 (4))	59,472	-	64,764	-
1170	Notes and accounts receivable, net amount (Note 6 (5) and (23))	2,175,071	9	2,471,930	11
1180	Notes and accounts receivable - related parties net amount (Note 6 (5), (23) and 7)	1,146,054	5	1,522,617	7
1200	Other receivables (Note 6 (5), (6), (25) and 7)	91,899	-	204,116	1
1210	Other receivables - related parties (Note 6 (6) and 7)	-	-	188	-
1310	Inventories, net amount (Note 6 (7))	4,084,897	18	3,435,844	15
1479	Other current assets	348,361	2	354,071	2
1476	Other financial assets - current (Note 6 (2) and 8)	87,577	-	57,814	-
	Total current assets	8,831,630	38	8,796,864	39
Non-current assets:
1517	Financial assets at fair value through other comprehensive income - non-current (Note 6 (4))	77,065	-	96,751	-
1550	Investments accounted for using equity method (Note 6 [8])	675,123	3	570,747	3
1600	Property, plant, and equipment (Note 6 (11), 7, and 8)	12,419,867	53	11,852,477	52
1755	Right-of-use asset (Note 6 (12))	579,995	3	665,992	3
1760	Net investment property (Note 6 (13))	128,212	1	140,209	1
1780	Intangible assets (Note 6 (14) and 7)	160,590	1	170,528	1
1840	Deferred tax assets (Note 6 (20))	260,379	1	243,669	1
1920	Guarantee deposits paid	18,451	-	14,960	-
1980	Other financial assets - non-current (Note 6 (2) and 8)	7,760	-	10,452	-
1995	Other non-current assets (Note 6 (19))	60,262	-	69,941	-
	Total non-current assets	14,387,704	62	13,835,726	61
	Total assets	$ 23,219,334	100	22,632,590	100

(See the attached notes to Consolidated Financial Statements)

Chairman: Zhien-Chi (Z.C) Chen

General Manager: Ray,Liu

Accounting Manager: James,Wang

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets (continued)

December 31, 2025 and 2024

Unit: NT$ thousand

Liabilities and equity	2025.12.31		2024.12.31
		Amount	%	Amount	%
Current liabilities:
2100	Short-term borrowings (Note 6 (15))	$ 3,230,000	14	2,200,000	10
2120	Financial liabilities at fair value through profit or loss - current (Note 6 (3))	15,225	-	32,997	-
2170	Accounts payable	2,594,024	12	2,926,647	13
2180	Accounts payable - related parties (Note 7)	81,573	-	64,977	-
2200	Other payables (Note 6 (24))	1,605,234	7	1,708,867	8
2220	Other payables - related parties (Note 7)	32,078	-	27,703	-
2320	Long-term borrowings due within one year (Note 6 (16) and 8)	483,779	2	342,313	2
2281	Lease liabilities - current (Note 6 (17))	10,096	-	11,045	-
2282	Lease liabilities - related parties - current (Note 6 (17) and 7)	96,394	-	94,852	-
2399	Other current liabilities (Note 6 (23))	165,644	1	213,377	1
	Total current liabilities	8,314,047	36	7,622,778	34
Non-current liabilities:
2540	Long-term borrowings (Note 6 (16) and 8)	6,661,821	29	5,917,818	26
2570	Deferred tax liabilities (Note 6 (20))	506,906	2	504,703	2
2581	Lease liabilities - non-current (Note 6 (17))	42,630	-	38,043	-
2582	Lease liabilities - related parties — non-current (Note 6 (17) and 7)	98,133	-	194,527	1
2600	Other non-current liabilities (Note 6 (16) and (19))	39,085	-	38,140	-
	Total non-current liabilities	7,348,575	31	6,693,231	29
	Total liabilities	15,662,622	67	14,316,009	63
Equity (Note 6 (21)):
3110	Common stock	3,206,745	14	3,206,745	14
3200	Capital surplus	193,709	1	193,114	1
	Retained earnings
3310	Legal reserve	601,996	2	582,115	3
3320	Special reserve	-	-	92,684	-
3350	Undistributed earnings	1,138,547	5	1,629,020	7
3400	Other equity interest	(10,395)	-	11,576	-
	Total equity attributable to the owners of parent company	5,130,602	22	5,715,254	25
36XX	Non-controlling interests (Note 6 (9), (10), and (21))	2,426,110	11	2,601,327	12
	Total equity	7,556,712	33	8,316,581	37
	Total liabilities and equity	$ 23,219,334	100	22,632,590	100

(See the attached notes to Consolidated Financial Statements)

Chairman: Zhien-Chi (Z.C) Chen

General Manager: Ray,Liu

Accounting Manager: James,Wang

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

From January 1 to December 31, 2025 and 2024

Unit: NT$ thousand

	2025		2024
		Amount	%	Amount	%
4000	Net sales revenue (Notes 6 (18), (23), 7, and 14)	$ 17,845,985	100	18,588,978	100
5000	Operating costs (Notes 6 (7), (11), (12), (13), (14), (17), (19), (24), 7, and 12)	(15,267,186)	(86)	(15,225,893)	(82)
	Gross operating profit	2,578,799	14	3,363,085	18
	Operating expenses (Note 6 (5), (11), (12), (14), (17), (19), (24), 7, and 12)
6100	Selling expenses	(1,435,081)	(8)	(1,478,615)	(8)
6200	Administrative expenses	(369,544)	(2)	(362,771)	(2)
6300	Research and development expenses	(1,150,406)	(6)	(1,084,405)	(6)
		(2,955,031)	(16)	(2,925,791)	(16)
	Net Operating Income (Loss)	(376,232)	(2)	437,294	2
	Non-operating income and expenses (Note 6 (8), (16), (17), (25), and 7)
7100	Interest revenue	12,273	-	22,619	-
7010	Other revenue	20,241	-	53,512	1
7020	Other gains and losses	65,880	-	(144,370)	(1)
7050	Financial costs	(168,551)	(1)	(133,709)	(1)
7370	Shares of profits of associates accounted for using the equity method	127,654	1	95,689	1
		57,497	-	(106,259)	-
	Profit (loss) before tax	(318,735)	(2)	331,035	2
7950	Less: Income tax expense (Note 6 (20))	(25,293)	-	(82,126)	(1)
	Net profit (loss) for the period	(344,028)	(2)	248,909	1
	Other comprehensive income:
8310	Items that will not be reclassified to profit or loss (Notes 6 (8), (19), (21), and (26))
8311	Remeasurement of defined benefit plans	(4,215)	-	4,396	-
8316	Unrealized profit (loss) on investments in equity instruments at fair value through other comprehensive income	(24,978)	-	1,668	-
8320	Share of other comprehensive income of associates accounted for using the equity method	(4,131)	-	-	-
8349	Income tax related to items that will not be reclassified	-	-	-	-
		(33,324)	-	6,064	-
8360	Items that may be reclassified subsequently to profit or loss (Notes 6 (8) and (21))
8361	Exchange differences arising on translation of financial statements of foreign operations	(40,654)	-	72,934	1
8370	Share of other comprehensive income of associates accounted for using the equity method	27,860	-	30,868	-
8399	Income tax related to items that may be reclassified	-	-	-	-
		(12,794)	-	103,802	1
	Other comprehensive income (loss) for the year	(46,118)	-	109,866	1
8500	Total comprehensive income for the year	$ (390,146)	(2)	358,775	2
	Net profit (loss) for the period attributable to:
8610	Owners of the parent company	$ (364,458)	(2)	199,206	1
8620	Non-controlling interest	20,430	-	49,703	-
		$ (344,028)	(2)	248,909	1
	Total comprehensive income attributable to:
8710	Owners of the parent company	$ (386,429)	(2)	303,466	2
8720	Non-controlling interest	(3,717)	-	55,309	-
		$ (390,146)	(2)	358,775	2
	Earnings (Loss) per share (Unit: NT$) (Note 6 (22))
9750	Basic earnings (loss) per share	$ (1.14)		0.62
9850	Diluted earnings (loss) per share	$ (1.14)		0.62

(See the attached notes to Consolidated Financial Statements)

Chairman:
Zhien-Chi (Z.C) Chen

General Manager:
Ray,Liu

Accounting Manager:
James,Wang

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

From January 1 to December 31, 2025 and 2024

Unit: NT$ thousand

Profit and/or loss attributable to the owners of parent company

	Common stock	Capital surplus	Legal reserve	Special reserve	Undistributed earnings	Total	Other equity item						Total equity attributable to the owners of parent company
							Exchange differences arising on translation of financial statements of foreign operations	Unrealized profits and losses of financial assets at fair value through other comprehensive income	Remeasurement of defined benefit plans	Total
Balance as of January 1, 2024	$ 3,206,745	192,352	540,821	68,835	1,880,161	2,489,817	(44,495)	(20,011)	(28,178)	(92,684)	5,796,230	2,959,823	8,756,053
Appropriation and distribution of retained earnings:
Account for legal reserve	-	-	41,294	-	(41,294)	-	-	-	-	-	-	-	-
Account for special reserve	-	-	-	23,849	(23,849)	-	-	-	-	-	-	-	-
Cash dividend of common stock	-	-	-	-	(384,809)	(384,809)	-	-	-	-	(384,809)	-	(384,809)
Change in capital surplus from investments in associates under equity method	-	762	-	-	-	-	-	-	-	-	762	-	762
Difference between prices of shares acquired from subsidiaries and book value	-	-	-	-	(395)	(395)	-	-	-	-	(395)	395	-
Acquisition of partial equity of subsidiaries	-	-	-	-	-	-	-	-	-	-	-	(2,600)	(2,600)
Cash dividends distributed by subsidiaries to non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	(411,600)	(411,600)
Net profit for the period	-	-	-	-	199,206	199,206	-	-	-	-	199,206	49,703	248,909
Other comprehensive income (loss) for the year	-	-	-	-	-	-	98,196	1,668	4,396	104,260	104,260	5,606	109,866
Total comprehensive income for the year	-	-	-	-	199,206	199,206	98,196	1,668	4,396	104,260	303,466	55,309	358,775
Balance as of December 31, 2024	3,206,745	193,114	582,115	92,684	1,629,020	2,303,819	53,701	(18,343)	(23,782)	11,576	5,715,254	2,601,327	8,316,581
Appropriation and distribution of retained earnings:
Account for legal reserve	-	-	19,881	-	(19,881)	-	-	-	-	-	-	-	-
Reversal of special reserve	-	-	-	(92,684)	92,684	-	-	-	-	-	-	-	-
Cash dividend of common stock	-	-	-	-	(198,818)	(198,818)	-	-	-	-	(198,818)	-	(198,818)
Change in capital surplus from investments in associates under equity method	-	595	-	-	-	-	-	-	-	-	595	-	595
Cash dividends distributed by subsidiaries to non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	(171,500)	(171,500)
Net profit (loss) for the period	-	-	-	-	(364,458)	(364,458)	-	-	-	-	(364,458)	20,430	(344,028)
Other comprehensive income (loss) for the year	-	-	-	-	-	-	11,276	(29,109)	(4,138)	(21,971)	(21,971)	(24,147)	(46,118)
Total comprehensive income for the year	-	-	-	-	(364,458)	(364,458)	11,276	(29,109)	(4,138)	(21,971)	(386,429)	(3,717)	(390,146)
Balance as of December 31, 2025	$ 3,206,745	193,709	601,996	-	1,138,547	1,740,543	64,977	(47,452)	(27,920)	(10,395)	5,130,602	2,426,110	7,556,712

Chairman: Zhien-Chi (Z.C) Chen

(See the attached notes to Consolidated Financial Statements)

General Manager: Ray,Liu

Accounting Manager: James,Wang

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

From January 1 to December 31, 2025 and 2024

Unit: NT$ thousand

	2025	2024
Cash flows from operating activities
Profit (Loss) before tax for the period	$ (318,735)	331,035
Adjusted items:
Depreciation expenses	1,106,754	959,476
Amortization expenses	61,800	65,298
Expected credit losses (reverse benefits)	945	(197)
Valuation loss (profit) on financial liabilities measured at fair value through net profit or loss	(25,570)	96,836
Interest expenses	168,551	133,709
Interest revenue	(12,273)	(22,619)
Dividend revenue	(1,680)	(1,680)
Shares of profits of associates accounted for using the equity method	(127,654)	(95,689)
Profits from disposal of real estate, plant, and equipment	(452)	(1,523)
Loss on liquidation of subsidiary	2,623	-
Amortization of deferred expenses transferred to expenses	141,239	149,099
Amortization of syndication fee costs	1,612	1,712
Inventory Disaster Loss	-	110,936
Insurance Claims Income	(100,057)	(124,428)
Total adjustments to reconcile profit (loss)	1,215,838	1,270,930
Changes in operating assets/liabilities:
Net changes in assets related to operating activities:
Notes and accounts receivable	300,413	(304,713)
Account receivables - Related parties	361,952	(561,498)
Other receivables	222,386	3,906
Other receivables - related parties	188	(134)
Inventory	(649,053)	(154,885)
Other current assets	(125,308)	(163,115)
Other non-current assets	5,026	(81)
Total net changes in assets related to operating activities	115,604	(1,180,520)
Net changes in operating liabilities:
Accounts payable	(332,623)	160,435
Accounts payable - related parties	16,596	10,504
Other payables	(58,075)	209,476
Other payables - related parties	4,375	(2,084)
Other current liabilities	(47,733)	29,891
Net defined benefit liabilities	(2,110)	(580)
Total net changes in related operating liabilities	(419,570)	407,642
Total net changes in assets and liabilities related to operating activities	(303,966)	(772,878)
Total adjustment items	911,872	498,052
Cash inflow generated from operations	593,137	829,087
Interests received	12,273	22,619
Interests paid	(167,361)	(133,390)
Income tax paid	(35,365)	(161,325)
Net cash inflow from operating activities	402,684	556,991

(Continued)

(See the attached notes to Consolidated Financial Statements)

Chairman: Zhien-Chi (Z.C) Chen

General Manager: Ray,Liu

Accounting Manager: James,Wang

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)

From January 1 to December 31, 2025 and 2024

Unit: NT$ thousand

	2025	2024
Cash flows from investing activities:
Acquisition of financial assets at fair value through profit or loss	$ (99,788)	-
Acquisition of property, plant, and equipment	(1,626,695)	(2,435,254)
Disposal of property, plant, and equipment	452	1,523
(Increase) decrease in guarantee deposits paid	(3,491)	1,407
Acquisition of intangible assets	(49,233)	(32,730)
(Increase) decrease in other financial assets	(27,071)	707,078
Increase in other non-current assets	(22,411)	(43,740)
Dividends received	49,282	24,081
Net cash outflows from investing activities	(1,778,955)	(1,777,635)
Cash flows from financing activities:
Increase in short-term borrowings	1,030,000	710,000
Proceeds from long-term borrowings	1,955,840	2,728,461
Repayments of long-term borrowings	(1,073,565)	(1,266,943)
Increase (decrease) in guarantee deposits received	2,034	(2,000)
Repayments of lease principal	(133,224)	(106,141)
Purchase of subsidiaries' equity from non-controlling interests	-	(2,600)
Issuance of cash dividends	(198,818)	(384,809)
Cash dividends issued by subsidiaries to non-controlling interests	(171,500)	(411,600)
Net cash inflows from financing activities	1,410,767	1,264,368
Effect of changes in exchange rates	10,697	20,649
Increase in cash and cash equivalents for the year	45,193	64,373
Cash and cash equivalents at beginning of year	684,063	619,690
Cash and cash equivalents at end of year	$ 729,256	684,063

(See the attached notes to Consolidated Financial Statements)

Chairman: Zhien-Chi (Z.C) Chen

General Manager: Ray,Liu

Accounting Manager: James,Wang

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

2025 & 2024

(Unless otherwise stated, the unit for all amounts is in NT$ thousands.)

Company History

BenQ Materials Corporation (hereinafter referred to as "the Company," formerly known as Daxon Technology Inc. and had renamed in June 2010) was established on July 16, 1998, with the approval of the Ministry of Economic Affairs. The registered address is No. 29, Jianguo E. Rd., Guishan Dist., Taoyuan City 333403, Taiwan (R.O.C.). The main business items of the Company and its subsidiaries (hereinafter referred to as "the Consolidated Company") are manufacturing and sales of film sheet products and medical equipment.

Date and Procedures of Authorization of Financial Statements

The Consolidated Financial Statements were published upon approval by the Board of Directors on February 24, 2026.

Application of New, Amended and Revised Accounting Standards and Interpretations

a. The Impact of Adopting Newly Released and Revised Standards and Interpretations Endorsed by the Financial Supervisory Commission (hereinafter referred to as "FSC").

The Consolidated Company has been applied to the application of the newly recognized IFRS Accounting Standards specified above will not have a material impact on the Consolidated Financial Statements since January 1, 2025.

Amendments to IAS 21 "Lack of Exchangeability"

b. Impacts of IFRS Accounting Standards endorsed by FSC that are not adopted yet

The Consolidated Company evaluates that the application of the following newly endorsed IFRS Accounting Standards amended since January 1, 2026, will not have a material impact on the Consolidated Financial Statements.

Amendments to IFRS 17 "Insurance Contract"
Amendments to IFRS 9 and IFRS 7 "Classification and Measurement of Financial Instruments"
Annual Improvements to IFRS Accounting Standards
Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"

~15~

~16~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

c. Newly issued and amended standards and interpretations yet to be endorsed by the FSC

Impact of IFRSs Issued by IASB but not yet endorsed by the FSC on the Combined Company is as follows:

New or amended standards	Major amendments	The effective date of issuance by IASB
IFRS 18 "Presentation and Disclosure in Financial Statements"	The new standard introduces three categories of income and expenses, two subtotals in the statement of profit or loss, and a single note on management's performance measures. These three amendments and enhancements to the guidance on disaggregating information in financial statements lay the foundation for providing users with better and more consistent information and will impact all companies.	January 1, 2027
Note: The Financial Supervisory Commission (FSC) issued a press release on September 25, 2025, announcing that Taiwan will adopt International Financial Reporting Standard (IFRS) 18 starting from 2028. If a company wishes to early adopt the standard, it may do so upon approval by the FSC.
	A more structured statement of profit or loss: Under the current standards, companies use different formats to present their operating results, making it difficult for investors to compare financial performance across different companies. The new standard adopts a more structured statement of profit or loss, introduces a newly defined subtotal for "operating profit", and requires all income and expenses to be classified into three new distinct categories based on the company's main business activities.
	Management Performance Measures (MPMs): The new standard introduces a definition for management performance measures and requires companies to disclose, in a single note to the financial statements, an explanation of why each measure provides useful information, how it is calculated, and how it reconciles to amounts recognized under IFRS Accounting Standards.
	More disaggregated information: The new standard includes guidance on how companies should enhance the grouping of information in financial statements. This guidance covers whether information should be presented in the primary financial statements or further disaggregated in the notes.

~17~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The Combined Company is continuously evaluating the impact of the impacts on the financial status and operating results of the Combined Company, and the relevant impact will be disclosed when the evaluation is completed.

The Combined Company expects that the following other newly issued and revised standards that have not yet been approved by the FSC will not have a significant impact on the Consolidated Financial Statements.

Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"
IFRS 19 "Subsidiaries without Public Accountability: Disclosures" and amendments to IFRS 19
Amendments to IAS 21 "Translation to a Hyperinflationary Presentation Currency"

4. Summary of Material Accounting Policies

The summary of the significant accounting policies used in this consolidated financial statement are described below. The following accounting policies have been consistently applied to all periods of the financial statements.

a. Statement of compliance

The Consolidated Financial Statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed by the FSC (collectively referred herein as the "IFRSs").

b. Basis of preparation

1) Basis of measurement

The Consolidated Financial Statements have been prepared on a historical cost basis except for the following significant accounts:

a) Financial instruments (including derivative financial instruments) measured at fair value through profit and loss;
b) Financial assets at fair value through other comprehensive income; and
c) Net defined benefit liabilities (or assets) are measured by determining the present value of the benefit obligation, the net amount after deducting the fair value of pension assets, and the upper limit of the number of influences mentioned in Note 4 [18].

2) Functional Currency and Presentation Currency

Every individual entity of the Combined Company takes the currency of the economic environment its operation domiciles are in as the functional currency. The Consolidated Financial Statements were expressed in New Taiwan Dollars, the Company's functional currency. The unit for all amounts expressed are in thousands of NTD unless otherwise stated.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

c. Basis of consolidation

1) Principle of preparation of the Consolidated Financial Statements

The preparation of the Consolidated Financial Statements includes the Company and entities controlled by the Company (i.e., subsidiaries). The Company controls an individual entity when it is exposed to, or has rights to, variable remuneration from its participation in that individual and can influence that remuneration through its power over that individual.

From the date of attaining control over the subsidiary, its financial statements shall be included in the Consolidated Financial Statements until the date of losing control. The transactions, balances and, any unrealized income and expenses between the Combined Company have been eliminated in full at the time of preparing the Consolidated Financial Statements. A subsidiary's total comprehensive income is attributed to the owners of the Company and non-controlling interests, even if non-controlling interests become having deficit balances in the process.

The financial statements of the subsidiaries have been adjusted to bring their accounting policies in line with those used by the Combined Company.

When a change in the Combined Company's ownership interests in a subsidiary does not cause a loss of control over the subsidiary, it shall be treated as an equity transaction. The difference between the adjustment amount of non-controlling interests and the fair value of consideration paid or collected shall be directly recognized in equity attributable to the owners of the Company.

2) List of subsidiaries in the Consolidated Financial Statements

Investment company name	Subsidiary name	Business type	Proportion of Ownership (%)		Explanation
			2025.12.31	2024.12.31
The Company	BenQ Materials (L) Co. (BMLB)	Holding company	100.00	100.00	-
The Company	Sigma Medical Supplies Corp.(Sigma-Medical)	Sales of medical equipment	100.00	100.00	-
The Company	Genejet Biotech Co., Ltd. (Genejet)	Medical materials and equipment development, manufacturing and sale	79.35	79.35	-
The Company	Cenefom Corp. (Cenefom)	Medical materials and equipment development, manufacturing and sale	50.98	50.98	-
The Company	Web-Pro Materials Corporation (Web-Pro) (formerly known as Web-Pro Co., Ltd.)	Healthcare materials and equipment development, manufacturing and sale	51.00	51.00	-
BMLB	BenQ Materials Co., Ltd. (BMS)	Processing of film sheet products	100.00	100.00	-
BMLB	Daxon Biomedical (Suzhou) Co., Ltd. (DTB)	Manufactures and sales of related products such as medical devices	100.00	100.00	-
BMLB	BenQ Materials (Wuhu) Corp. (BMW)	Manufacture and sales of film sheet and cosmetic-related products	100.00	100.00	-
BMLB	BenQ Materials Medical (Suzhou) Co., Ltd. (BMM)	Medical materials and equipment manufacturing and sale	100.00	100.00	-

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

Investment company name	Subsidiary name	Business type	Proportion of Ownership (%)		Explanation
			2025.12.31	2024.12.31
BMLB	BenQ Aesthetic Medicine Material (Wuhu) Corp. (BME)	Manufacture and sales of cosmetic-related products	100.00	100.00	(Note 1)
Sigma-Medical	Suzhou Sigma-Medical Co., Ltd. (Suzhou Sigma-Medical)	Sales of medical equipment	-	100.00	(Note 2)
Web-Pro	Beyond Top Pte Ltd (WPSG)	Holding company	51.00	51.00	-
WPSG	Web-Pro (Vietnam) Co., Ltd. (WPVN)	Healthcare materials and equipment manufacturing and sale	51.00	51.00	-

Note 1: BME was established in June of the 2024 and completed its capital injection in August of the same year.
Note 2: Suzhou Sigma-Medical completed its company deregistration on June 30, 2025, and completed the liquidation of the company and remitted the remaining assets on July 25, 2025.

3) List of subsidiaries which excluded in the Consolidated Financial Statements: None.

d. Foreign Currency

1) Foreign currency transactions

Transactions in foreign currency are translated into the functional currency at exchange rates prevailing at the transaction dates. On the end of each subsequent reporting period (hereinafter referred to as the reporting day). Monetary items in foreign currencies are converted into functional currencies at the exchange rate of the day. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate prevailing at the date when the fair value was determined. Non-monetary assets and liabilities in a foreign currency that are measured at historical cost are retranslated using the exchange rates prevailing at the transaction dates.

Foreign currency exchange differences arising from conversion are generally recognized in profit or loss, but equity instruments designated as fair value through other comprehensive income are recognized in other comprehensive income.

2) Foreign operating agency

The assets and liabilities of foreign operation, including the business reputation and fair value adjustment are translated into functional currency according to the exchange rate on the reporting date; the income and expense items are converted into the expression currency of this consolidated financial statement based on the average exchange rate of the current period. And the exchange difference amount will be recognized as other comprehensive incomes.

Upon disposal of a foreign operating organization results in loss of control or significant influence, the accumulated exchange differences related to the foreign operating organization are fully reclassified as profit or loss. When partially disposing of subsidiaries containing foreign operation, the cumulative exchange difference amount

~20~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

will be re-attached to non-controlling equity according to proportion. When partially disposing of affiliated enterprises or joint investments containing foreign operation, the cumulative exchange difference amount will be re-classified into profit or loss according to proportion.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, the related foreign exchange gains and losses are a part of net investment in that foreign operation and thereon are recognized as other comprehensive income.

e. Assets and liabilities classified as current and non-current

The Consolidated Company shall classify an asset as current, and shall classify all other assets as non-current when:

1) It is expected to be realized when the Company is operating, or intended to be sold or consumed in the normal operating cycle;
2) Assets are held primarily for trading purposes;
3) It is expected to be realized within twelve months after the reporting period; or
4) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Consolidated Company shall classify a liability as current, and shall classify all other assets as non-current when:

1) It is expected to be settled in the normal operating cycle;
2) Liabilities held primarily for trading purposes;
3) The liability is expected to be realized within twelve months after the reporting period; or
4) at the end of the reporting period, the entity does not have the right to defer settlement of the liability for at least twelve months after the reporting period.

f. Cash and Cash Equivalents

Cash includes cash on hand, check deposits and demand deposits. Cash equivalents refer to the short-term and highly liquidity investment that can be converted into quota cash at any time with little risk of value change. Time deposits are classified as cash equivalents only when they satisfy the aforementioned definition, and the purpose of holding is to meet the short-term cash commitments rather than investment or other purposes.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

g. Financial Instruments

The accounts receivable and debt securities issued were originally recognized when they were generated. All other financial assets and financial liabilities were originally recognized when the Combined Company became a party to the contractual terms of financial instruments. Financial assets that are not measured at fair value through profit or loss (other than accounts receivable that do not contain a significant financing component) or financial liabilities are originally measured at fair value plus the transaction costs directly attributable to the acquisition or issuance. The accounts receivable that do not contain a significant financing component are measured at transaction prices.

I) Financial assets

At the time of initial recognition, financial assets are classified into: Financial assets measured at amortized cost, financial assets measured at fair value through other comprehensive gains and losses, and financial assets measured at fair value through profit or loss. When purchasing or selling financial assets according to transaction practice, accounting treatment on the transaction date is adopted.

The Combined Company shall reclassify all the affected financial assets from the first day of the next reporting period only when changing the business model for managing financial assets.

a) Financial assets measured at amortized cost

When financial assets meet the following conditions and not designated at fair value through profit or loss, they are measured at amortized cost:

The financial assets are held under the operation mode with the purpose of collecting contract cash flow.
The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

After the initial recognition of these assets, the effective interest rate method is adopted to measure the amortized cost minus the impairment loss. Interest income, foreign exchange profit or loss, and impairment loss are recognized in profit and loss. When derecognition, gain or loss is recognized in profit and loss.

b) Financial assets at fair value through other comprehensive income

A debt investment is measured at FVTOCI if it meets both of the following conditions and is not designated as at FVTPL:

It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets.

~21~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal in circulation.

The Combined Company may, at initial recognition, make an irrevocable choice to report subsequent changes in the fair value of equity instrument investments that are not held for trading in other comprehensive income. This election is made on an instrument-by-instrument basis.

Investors who are debt instruments are subsequently measured at fair value. Interest income, foreign currency exchange gains and losses and impairment losses calculated according to the effective interest method are recognized in profit and loss, and the remaining net gains or losses are recognized as other comprehensive gains and losses. At the time of derecognition, the accumulated other comprehensive income under equity is reclassified to profit or loss.

Equity instrument investors shall be measured at fair value subsequently. Dividend income (unless it clearly represents the recovery of part of the investment cost) is recognized in profit and loss. The remaining net profits or losses are recognized as other comprehensive income. At the time of derecognition, other comprehensive income accumulated under equity are reclassified to retained earnings instead of to profits or losses.

The dividend income of equity investment shall be recognized on the date when the Combined Company is entitled to receive dividends (usually the ex-dividend date).

c) Financial assets at fair value through profit or loss

Financial assets other than the aforementioned financial assets measured at amortized cost or financial assets at fair value through other comprehensive gains and losses are measured at fair value through profit and loss, including derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or measured at fair value through other comprehensive income, as at fair value through profit and loss if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value, and net profits and losses (including dividend and interest incomes) originated from remeasurement are recognized in profit or loss.

~22~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

d) Evaluate whether the contractual cash flow is entirely the interest of the payment of the principal and the amount of principal in circulation

According to the purpose of the evaluation, the principal is the fair value of the financial asset upon initial recognition and the interest is comprised of the following considerations: time value of money, credit risk associated with outstanding principal amounts in the period, other basic lending risks and costs, and profit margins.

When evaluating whether the contractual cash flows consist entirely of payments of the principal and interest on the principal amount outstanding, the Combined Company considers the contractual terms of financial instruments including evaluations on whether financial assets include a provision in the contract that changes the timing or amount of the contractual cash flows in a way that would cause it not to meet this condition. When evaluating, the Combined Company considers the following:

Any contingency that changes the timing or amount of the contractual cash flows.
Terms that may adjust the coupon rate of the contract including the characteristics of floating interest rates.
Attributes of prepayments and deferrals; and
The Combined Company's claim is limited to the terms of the cash flows from specific asset (e.g., non-recourse terms).

e) Impairment of financial assets

The Combined Company recognizes an allowance loss for expected credit losses of financial assets (including cash and cash equivalents, notes and accounts receivable (including related-parties), other receivables (including related-parties), deposits, and other financial assets, etc.) measured at amortized cost.

The loss allowance of the following financial assets is measured based on the expected credit losses amount in 12 months, and the remaining are measured based on the lifetime expected credit loss amount:

The credit risk of bank deposits (that is, the risk of default during the expected lifetime of financial instruments) has not increased significantly since initial recognition.

The allowance loss for accounts receivable is measured by the amount of expected credit loss during the duration.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition, the Combined Company considers reasonable

~23~

~24~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

and supportable information that is relevant and available without undue cost or effort. The information includes both quantitative and qualitative information and analysis based on the Group's historical experience, credit assessment, as well as forward-looking information.

Lifetime expected credit loss refers to the expected credit loss out of all possible defaults during the expected survival period of financial instruments

Twelve-month expected credit loss refers to the expected credit loss (or a shorter period, if the expected duration of the financial instrument is shorter than twelve months) incurred by a financial instrument that may default within twelve months after the reporting date.

The maximum period considered when estimating ECLs is the maximum contractual period over which the Combined Company is exposed to credit risk.

Expected credit loss refers to the weighted estimate of credit loss probability during the expected survival period of financial instruments. The credit loss is measured by the present value of all cash shortfall, namely the difference between the cash flow that the Combined Company can collect according to the contract and the expected cash flow that the Combined Company will receive. Expected credit loss is discounted at the effective interest rate of financial assets.

The loss allowance of financial assets measured through amortized cost is deducted from the carrying amount of assets.

When the Combined Company fails to carry out a reasonable expectation of recovery of financial assets in part or whole, the total carrying amount of the financial assets directly decreases. The Combined Company analyzes the timing and amount of the write-off individually on the basis of whether it can reasonably be expected to be recovered. The Combined Company expects that the written off amount will not be materially reversed. However, the written-off financial assets can still be enforced to comply with the procedures for the Combined Company to recover the overdue amount. In light of the merged company's experience, any overdue amounts will become unrecoverable after a period of ninety days.

f) Derecognition of financial assets

The Combined Company only terminates the contractual rights from the cash flow of the asset, or the financial asset has been transferred and almost all the risks and rewards of the ownership of the asset have been transferred to other companies, or almost no ownership has been transferred or retained. When all risks and rewards are not kept under the control of the financial assets, the financial assets are derecognized.

~25~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

When the Combined Company signs a transaction to transfer financial assets, if it retains all or almost all risks and rewards of ownership of the transferred assets, it will continue to be recognized on the balance sheet.

2) Financial liabilities and equity instruments

a) Classification of liabilities or equities

Debt and equity instruments issued by the Combined Company are classified separately as financial liabilities and equity in accordance with the substance of contractual arrangements and the definitions of a financial liability and an equity instrument. An equity instrument refers to any contract that recognizes the remaining equity after deducting all liabilities from the assets of the Combined Company. The equity instrument issued by the Combined Company shall be recognized by the payment net of the direct cost of issuance.

b) Financial liabilities

Financial liabilities are classified as amortized costs or the fair value measurement through profit or loss. Financial liabilities, if held for trading, derivatives or designated at the time of initial recognition, are classified as the fair value measurement through profit or loss. Financial liabilities measured at fair value through profit and loss are measured at fair value, and related net profits and losses, including any interest expenses, are recognized in profit and loss.

Financial liabilities measured at amortized cost are subsequently measured at the amortized cost using the effective interest method. Interest income and foreign currency profit or loss are recognized as profit or loss. Any profit or loss at the time of derecognize is also recognized in profit and loss.

c) Derecognition of financial liabilities

The Combined Company derecognizes financial liabilities when the contractual obligations have been fulfilled, canceled or matured. When the terms of financial liabilities are modified and there is a significant difference in the cash flow of the revised liabilities, the original financial liabilities will be derecognized and new financial liabilities will be recognized at fair value based on the revised terms.

When derecognizing financial liabilities, the difference between the carrying amount of a financial liability and the consideration paid (including all transferred non-cash assets or liabilities) is recognized in non-operating income and expenses.

d) Offsetting of financial assets and financial liabilities

The Combined Company presents financial assets and liabilities on a net basis when the Combined Company has the legally enforceable right to offset and

~26~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

3) Derivative financial instruments

The Combined Company holds derivative financial instruments to avoid risks of foreign currency and interest rates. The original recognition of derivatives is measured at fair value, and transaction costs are recognized as profit or loss; subsequent measurement is based on fair value, and the profits or losses arising from remeasurement are directly included in profit or loss. When the fair value of derivative financial instruments is positive, the derivative is recognized as a financial asset; when the fair value of derivative financial instruments is negative, the derivative is recognized as a financial liability.

h. Inventory

Inventory is measured by the lower of cost and NRV on an item-by-item basis. Cost includes cost and other costs for acquisition, manufacturing or processing to reach the usable place and status, and is calculated through weighted averaging. Among them, fixed manufacturing expenses are allocated to finished products and work-in-progress according to the normal production capacity or actual output of the production equipment, whichever is higher, and variable manufacturing expenses are allocated based on the actual output. The NRV is the expected selling price in the ordinary course of business, less the estimated cost of construction completion and the estimated costs necessary to make the sale.

i. Investment in the associates

Affiliated companies refer to those for which the Combined Company has material influence upon their financial and operation policies but without controlling or joint controlling.

The Combined Company adopts the equity method for handling the equity of affiliated companies. Under the equity method, the initial acquisition is recognized according to the cost, and the investment cost includes the transaction cost. The carrying amount of invested associates includes the goodwill recognized at the time of initial investment less any accumulative impairment loss. To assess impairment, the Combined Company has to consider the overall carrying amount (including goodwill) of the investment as a single asset to compare the recoverable and carrying amounts. The cost of impairment identified is to be deemed as part of the carrying amount of the investment. Any reversal of impairment loss shall be recognized within the scope of subsequent increase in the recoverable amount of the investment.

From the date of significant impact to the date of losing significant impact, the Combined Company shall, after making adjustments for consistency with the Combined Company's accounting policies, recognizes the amount of profit and loss and other comprehensive income of each investment related company based on the proportion of equity. When the

~27~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

equity of affiliated companies changes, not including profit and loss and other comprehensive income, and do not affect the shareholding ratio of the Combined Company, the Combined Company shall recognize all the equity changes as capital surplus according to the shareholding ratio.

Unrealized profits resulting from the transaction between the Combined Company and the affiliated companies shall be recognized in the financial statements only within the scope of the interests of non-related party investors in the affiliated companies.

When the loss share of affiliated companies to be recognized by the Combined Company is equal to or over its equity in them, the recognition of the loss is suspended, and only in the case of legal obligations, constructive obligations or within the scope of making payment for the invested company, additional loss or relevant liability will be recognized.

When an affiliated company issues new shares, if the Combined Company does not subscribe according to the shareholding ratio, which causes the shareholding ratio to change, and thus the net equity value of the investment increases or decreases, the increase or decrease is adjusted to the capital reserve and the investment using the equity method; if this adjustment is to reduce the capital reserve, but the balance of the capital reserve generated by the investment using the equity method is insufficient, the difference will be debited to the retained surplus. However, if the Combined Company does not subscribe in proportion to the shareholding ratio, which reduces its ownership and interest in the affiliated company, the amount previously recognized in other comprehensive income related to the related company is reclassified according to the reduction ratio, and the basis of accounting treatment is the same as the basis that the related company must follow if the related company directly disposes of the related assets or liabilities.

j. Investment properties

Investment property is real estate held for rent or assets appreciation or both. Investment property is initially measured by cost and subsequently measured by cost minus accumulated depreciation and accumulated impairment. Its depreciation method, service life, and residual value are treated following the provisions of property, plant, and equipment. Cost includes the expenses that can be directly attributable to the acquisition of investment real estate and any directly attributable costs and borrowing capitalization costs to bring the investment real estate to a usable state.

The profit or loss from the disposal of investment real estate (calculated as the difference between the net disposal price and the book value of the item) is recognized in the profit and loss.

Rental income from investment property is recognized on a straight-line basis during the lease term. The lease incentive is recognized as part of the lease income during the lease term.

~28~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

When the use of investment real estate is changed and reclassified as real property, plant, and equipment, it shall be reclassified according to the book value at the time of the change of use.

k. Property, plant and equipment

1) Recognition and measurement

Real estate, plant, and equipment are measured by cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment.

When the service years of material part of property, plant, and equipment vary, they are deemed as independent items (main components) for treatment.

The gain or loss on disposal of the property, plant, and equipment is recognized in profit and loss.

2) Subsequent costs

Subsequent expense will only be capitalized when its future economic benefits are most likely to flow into the Combined Company.

3) Depreciation

The depreciation is calculated by capital cost less scrap value and is recognized in profit or loss based on the estimated service years of each component using the straight-line method. The land does not need to be depreciated. The rest of the estimated service life is: Machinery and equipment, 2-15 years; other equipment, 2-20 years; and houses and buildings are depreciated based on the estimated service life of their major components: main buildings, 20-40 years; mechanical and electrical engineering and another engineering, 5-30 years.

The depreciation method, useful life, and residual value are reviewed on each reporting day, and adjustments are postponed for the impact of any changes in estimates.

4) Reclassification to investment real estate

When the real estate for self-use is changed to investment real property, the real estate is reclassified as investment real property based on the book value at the time of the change of use.

l. Leases

The Combined Company evaluates whether the contract is a lease or contains a lease upon the conclusion of the contract. If the contract transfers control over the use of the identified assets for a period of time in exchange for consideration, the contract is a lease or contains a lease.

~29~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

1) Lessee

The Combined Company recognizes the right-of-use asset and the lease liability on the inception of the lease. The right-of-use asset is initially measured at cost, which includes the initial measured amount of the lease liability, adjusts any lease benefits paid on or before the inception of the lease, and adds the initial direct cost incurred and the estimated cost of dismantling, removing the underlying asset and restoring its location or underlying asset, and deducting any leasing incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the Combined Company regularly assesses whether the right-of-use asset is impaired and treats any impairment loss that has occurred, as well as cooperating to adjust the right-of-use asset when the lease liability is remeasured.

The lease liability is measured at the present value of the lease payments that are not paid at the commencement date. If the interest rate implicit in the lease is easy to determine, the discount rate shall be the interest rate; if it is not easy to determine, the incremental borrowing rate of interest of the Combined Company shall be used. Generally, the Combined Company uses its incremental borrowing rate as the discount rate.

The lease payments comprise as follows:

a) fixed payments, including in-substance fixed lease payments;
b) Variable lease payments dependent upon certain indicators or rates are measured by the indicators or rates used at the inception of the lease;
c) The amount expected to be payable under residual value guarantees; and
d) The exercise price of a purchase option or the penalties payable upon exercising a lease termination option when the exercise of such options is reasonably certain.

The lease liability subsequently accrues interest with the effective interest method, and its amount is measured when the following occurs:

a) changes in future lease payments resulting from changes in an index or a rate used to determine those payments;
b) Changes in the amount expected to be payable under residual value guarantees;
c) Changes in the assessment of the purchase option for the underlying asset;
d) change in the assessment of the lease term resulting from extension or termination of the exercise of the purchase option; or
e) lease modifications of the underlying asset, scope, and other terms and conditions.

~30~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

When the lease liability is remeasured due to the aforementioned changes in the index or rate used to determine lease payments, changes in the residual value guarantee amount, and changes in the evaluation of purchase, extension or termination options, the carrying amount of the right-of-use asset shall be adjusted accordingly, and when the carrying amount of the right-of-use asset is reduced to zero, the remaining remeasured amount is recognized in profit or loss.

The changes in (iv) and (v) decreases the scope of a lease. When a lease modification decreases the scope of a lease, the carrying value of the right-of-use asset is decreased to reflect partial or full termination of the lease liability, and any gain or loss resulting from the aforementioned derecognition is immediately recognized in profit or loss.

The Combined Company records right-of-use assets and lease liabilities defined as not investment properties in a single line item in the consolidated balance sheets.

For short-term leases of office equipment and leases of low-value underlying assets, the Combined Company chooses not to recognize the right-of-use assets and lease liabilities, but to recognize the related lease benefits as expenses on the straight-line basis during the lease term.

2) Lessor

When the Combined Company acts as a lessor, it determines at lease commencement date whether each lease is a finance lease or an operating lease. To classify each lease, the Combined Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. At the time of evaluation, the Combined Company's considerations include relevant specific indicators, such as whether it covers the main component of the economic life of the underlying asset during the lease term.

For operating leases, the Combined Company uses a straight-line basis to recognize the lease payments received as rental income during the lease period.

m. Intangible assets

1) Goodwill

Goodwill arising from the acquisition of subsidiaries is recognized in intangible assets. Please refer to Note 4 (20) for the measurement of goodwill originally recognized. Goodwill is not amortized and is measured at cost less accumulated impairment.

2) Other intangible assets

The patented technology acquired by the Combined Company as a result of mergers and acquisitions is recorded at its fair value on the acquisition date; other intangible

~31~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

assets are recorded at cost, and then measured at cost minus accumulated amortization and accumulated impairment. The amortization amount is calculated based on the following estimated service life based on the straight-line method, and the amortization amount is recognized in the profit and loss: patent rights, 5 years; patented technology, 5 to 10 years; purchased software, 1 to 5 years; customer relationship, 6 to 11 years; others, 5 years.

The residual value, amortization period, and amortization method for an intangible asset with a finite useful life shall be adjusted when necessary.

n. Impairments of non-financial assets

The Combined Company assesses at each reporting date whether there is any indication that the carrying amount of non-financial assets (except for assets arising out of inventory, deferred income tax assets and employee welfare) may be impaired. If there is an indication that an asset may be impaired, then the Combined Company estimates the recoverable amount of such asset. Goodwill is subject to impairment tests on a regular basis every year or when there are signs of impairment.

The purpose of the impairment test, a group of assets whose cash inflow is mostly independent of other individual assets or asset groups, is regarded as the smallest identifiable asset group. Goodwill acquired in a business combination is allocated to each cash-generating unit or group of cash-generating units that is expected to benefit from the combined effect of the merger.

The recoverable amount is the higher of the fair value of the individual asset or cash-generating unit minus the cost of disposal and its value in use, whichever is higher. When evaluating the value in use, the estimated future cash flow is converted to the present value at a pre-tax discount rate, which should reflect the current market assessment of the time value of money and the specific risks for the asset or cash-generating unit.

When the recoverable amount of an individual asset or a CGU is less than its carrying amount, an impairment loss is recognized. The impairment loss is recognized immediately in profit or loss, firstly by reducing the carrying amount of any goodwill allocated to the CGU, and then proportionately allocated to the other assets of the CGU on the basis of the carrying amount of each asset in the CGU.

The impairment loss of goodwill will not be reversed. Non-financial assets other than goodwill will only be reversed if they do not exceed the carrying amount (less depreciation or amortization) determined when no impairment loss had been recognized for the asset in the previous year.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

o. Liability reserve

The recognition of liability provision means current obligation for past events, so that in the future the Combined Company is most likely to outflow resources with economic benefits to settle it, and the amount of the obligation can be reliably estimated.

The reorganization liability provision is recognized when the Combined Company approves the detailed and formal reorganization plan and starts to proceed or publicly announces the reorganization plan. Provisions are not recognized for future operating losses.

p. Revenue recognition

The Combined Company recognizes the income upon transfer of control over product. The transfer of control over products means that products are delivered to customers with no unfulfilled obligations that may affect customers' acceptance of the products. Delivery occurs when the product is delivered to a specific location, the risk of loss has been transferred to the customer, and the customer has accepted the product in accordance with the sales contract, or the Combined Company has objective evidence that all acceptance conditions have been met.

The Combined Company recognizes revenue on the basis of the contract price minus the estimated quantity discount and discount. The amount of the quantity discount and discount is estimated based on the expected value based on the accumulated experience in the past, and recognizes income within the scope of a major turnaround. As of the reporting date, the amount discounts and discounts expected to be paid to customers for related sales are recognized as refund liabilities (other current liabilities are accounted for).

The Combined Company recognizes accounts receivable upon delivery of goods, because it enjoys the entitlement of collecting consideration unconditionally at this timing.

q. Government subsidies and government assistance

Government subsidies are only recognized when they can be reasonably assured that the Combined Company shall comply with the conditions imposed by government subsidies and that such subsidies can be received. If the government subsidy is used to compensate fees or losses that had occurred, or is given to the Combined Company for the purpose of immediate financial support without related future costs, it can be recognized as income within the collectible period.

For borrowings obtained from financial institutions by means of government credit guarantees, the Combined Company calculates the fair value of the loans based on market interest rates. The difference between it and the amount received is recognized as deferred income. During the borrowing period, the deferred income is recognized as non-operating income - other income on a systematic basis.

~32~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

r. Employee benefits

1) Defined contribution plans

Assignment obligations that should be contributed to defined contribution retirement benefit plans are recognized as employee benefit expenses under profit and loss when employees have rendered service.

2) Defined benefit plans

The net obligation of the Company to determine the benefit plan is calculated by converting the future benefit amount earned by the employee in the current period or the previous period into the present value for each benefit plan and deducting the amount of the fair value of any plan assets. The discount rate is the yield on government bonds that have maturity dates approximating the terms of the Company's obligations and that are denominated in the same currency in which the benefits are expected to be paid. The net obligation of the defined benefit plan is calculated annually by a qualified actuary using the projected unit credit method.

When the benefit in the plan improves, the relevant expense for the part of incremental benefit for previous services by employees is immediately recognized as profit or loss.

The number of remeasurement of net defined benefit liabilities (assets) includes (1) actuarial profit or loss; (2) planned asset rewards, excluding the amount contained in net interest of net defined benefit liability (asset); and (3) any change in upper limit influence number of assets, excluding amount contained in net interest of net defined benefit liability (asset). The remeasured amount of net defined benefit liabilities (assets) is recognized in other comprehensive income and recognized in other equity.

The Combined Company recognizes gains or losses on the curtailment or settlement of a defined benefit plan when the curtailment or settlement occurs. The gains or losses on the curtailment or settlement include any change in fair value of planned assets and current value of defined benefit obligations.

3) Short-term employee benefits

The obligation for short-term employee benefits is measured on undiscounted basis, and recognized as expense at the time of provision of relevant services. For expected payment amount under short-term cash bonus or bonus plan, if the Combined Company undertakes current obligation of legal or constructive payment for the previous provision of services by employees and the obligation can be reliably estimated, the amount is recognized as liability.

~33~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

s. Income tax

Income taxes include current and deferred income taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

The Company has determined that interest or penalties related to income tax (including uncertain tax treatments) do not meet the definition of income tax and are therefore accounted for in accordance with IAS 37.

The Company has determined that the top-up tax payable under the Global Minimum Tax – Pillar Two framework falls within the scope of IAS 12 "Income Taxes" and has applied the temporary mandatory exemption from deferred income tax accounting related to the top-up tax. The actual top-up tax incurred is recognized as current income tax.

The current income tax includes the estimated income tax payable or income tax refund receivable calculated based on the taxable income (loss) of the current year, and any adjustments to the income tax payable or income tax refund receivable in previous year. The amount is the best estimate of the amount expected to be paid or received after reflecting the uncertainty (if any) related to income tax, according to the statutory tax rate on the reporting date or the tax rate of the substantive legislation.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities on the reporting date and their respective tax bases. The temporary difference for the following conditions will not be recognized as deferred income tax:

1) Originally recognized asset or liability not failing to the transaction of corporate consolidation, (i) without influencing account profit and levy duty gain (loss) at the transaction and (ii) does not result in equivalent taxable and deductible temporary differences;

2) Due to temporary differences arising from investment in subsidiaries, affiliates, and joint venture equity, the Combined Company can control the timing of the reversion of the temporary differences and it is very likely that they will not revert in the foreseeable future; and

3) Taxable temporary differences arising from the original recognition of goodwill.

For unused tax losses and unused income tax deduction at the later stage of the transfer and deductible temporary differences, they are recognized as deferred income tax assets to the extent that there is likely to be future taxable income available for use. Such unused tax credits and deductible temporary differences shall also be re-evaluated every year on the financial reporting date, and adjusted based on the probability that future taxable profit will be available against which the unused tax credits and deductible temporary differences can be utilized.

~34~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates and laws that have been enacted or substantively enacted by the end of the reporting period, and has reflected the uncertainty related to income tax (if any).

The Combined Company only offsets the deferred income tax assets and deferred income tax liabilities when the following conditions are met simultaneously:

1) The entity has the legal right to settle tax assets and liabilities on a net basis; and
2) The amounts of deferred tax assets and liabilities are:
a) Levied by the same taxing authority; or
b) Levied by different entities that intend to realize the asset and settle the liability at the same time.

t. Business mergers

The Combined Company uses the acquisition method to handle business mergers. Goodwill is the fair value of the consideration transferred on the acquisition date, including the amount attributable to any non-controlling interests of the acquiree, deduct the net amount of identifiable assets acquired and liabilities assumed (Usually fair value). If the balance after the deduction is negative, the Combined Company will reassess whether all acquired assets and all liabilities assumed have been correctly identified before recognizing the benefits of cheap purchases in profit or loss.

Except for those related to the issuance of debt or equity instruments, transaction costs related to business combinations should be immediately recognized as expenses of the amalgamating combined company when incurred.

Among the non-controlling interests of the acquiree, if it is a current ownership interest, and its holder is entitled to a proportional share of the net assets of the enterprise when the liquidation occurs, the Combined Company is measured on a transaction-by-transaction basis based on the fair value at the acquisition date or the proportion of the current ownership instrument to the recognized amount of the acquiree's identifiable net assets. Other non-controlling interests are measured at their fair value on the acquisition date or other basis as required by the IFRS Accounting Standards recognized by the FSC.

In a business combination achieved in stages, the Combined Company remeasures its previously held interest in the acquiree at fair value at the acquisition date, and any resulting gain or loss is recognized in profit or loss. Changes in the value of the acquiree's interest that were recognized in other comprehensive income before the acquisition date should be treated in the same manner as if the Consolidated Company had directly disposed of its previously held interest, and if it is appropriate to reclassify the interest to profit or loss upon disposal, the amount is reclassified to profit or loss.

~35~

~36~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

If the original accounting treatment of the business combination has not been completed before the reporting date of the merger transaction, the Combined Company recognizes the incomplete accounting treatment items at a tentative amount, and makes retrospective adjustments or recognizes additional assets or liabilities during the measurement period to reflect the new information about the facts and circumstances that existed on the acquisition date obtained during the measurement period. The measurement period is no more than one year from the acquisition date.

u. Earnings per Share

The Combined Company presents the basic and diluted earnings per share of shareholders of common stock equity. The calculation of basic earnings per share is based on the profit attributable to the ordinary shareholders of the Company divided by the weighted-average number of ordinary shares outstanding. The diluted earnings per share is calculated by adjusting the influence of all potential diluted common shares with profit or loss of the Company's common stock holders and weighted average number of common shares outstanding. The potential diluted ordinary shares of the Company are employees' compensation that can choose to use stocks.

v. Segment Information

The operation department, as part of the Combined Company, is engaged in operating activities for gaining income or incurring expenses (including income and expenses related to the transaction with other departments in the Company). The operation results of all operation segments are regularly re-checked by major operation decision-makers of the Combined Company, to make decisions on resource allocation and assess the performance. Every operation segment has its independent financial information.

5. The Primary Sources of Uncertainties in Material Accounting Judgments, Estimates, and Assumptions

In preparing the Consolidated Financial Report, management must make judgments and estimates about the future, including climate-related risks and opportunities, which will impact the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

The management has to continuously check the estimate and basic assumptions, and the accounting estimate is recognized during the period of change and during the future influenced period.

The accounting policy involves significant judgments and information that has a material impact on the amount recognized in the Consolidated Financial Statements is as follows:

~37~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

a. Judgment on whether the invested company has substantial control or significant influence

The Consolidated Company holds 14.82% of the voting shares of Visco Vision Inc. and is the single largest shareholder. Although the remaining 85.18% of Visco's shares are not concentrated in specific shareholders, the Consolidated Company was still unable to obtain more than half of the board seats of Visco, and it did not obtain more than half of the voting rights of shareholders attending the shareholders meeting. Instead, it only obtained one Board of Directors and participated in decision-making. Therefore, it was determined that the Consolidated Company had no control over Visco but only held significant influence, and is evaluated using the equity method.

The following assumptions and estimated uncertainties have a significant risk of causing significant adjustments to the carrying amount of assets and liabilities in the next financial year are as follows:

a. Inventory Valuation

As inventory shall be measured based on the lower of cost or realizable value, if on the Combined Company's evaluation report date, the inventory is unqualified, outdated, or has no market value, the inventory cost shall be offset to net realizable value. This inventory evaluation is mainly based on the estimated product demand in a specific period in the future but may cause major changes.

b. Goodwill Impairment Assessment

The assessment of goodwill impairment relies on the subjective judgment of the Consolidated Company, including the identification of cash-generating units, the allocation of goodwill to the relevant cash-generating units, and the determination of the recoverable amount of the respective cash-generating units. Any changes in economic conditions or corporate strategy may result in significant variations in the assessment outcome.

6. Descriptions of Material Accounting Items

a. Cash and Cash Equivalents

	2025.12.31	2024.12.31
Working capital	$ 1,000	368
Demand deposit and check deposit	679,253	663,550
Time deposits with original maturity within three months	49,003	20,145
	$ 729,256	684,063

~38~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

b. Other financial assets

	2025.12.31	2024.12.31
Time deposits with original maturity over three months	$ 71,600	38,470
Restricted bank deposits	12,368	15,060
Customs deposits	11,369	14,736
	$ 95,337	68,266
Current	$ 87,577	57,814
Non-current	7,760	10,452
	$ 95,337	68,266

The Consolidated Company assesses that it holds these assets to collect contractual cash flows until maturity and that the cash flows of these financial assets solely represent payments of principal and interest on the outstanding principal amount. Therefore, they are measured at amortized cost.

For details of the Consolidated Company's pledge of the above financial assets as collateral, please refer to Note 8.

c. Financial assets and liabilities measured at fair value through profit and loss - Current

	2025.12.31	2024.12.31
Mandatory financial assets measured at fair value through profit and loss - Current:
Foreign exchange forward contracts	$ -	1,457
Exchange contracts	1,216	-
Stocks listed in the emerging stock market in Taiwan	107,827	-
	$ 109,043	1,457
	2025.12.31	2024.12.31
Financial liabilities held for transaction - current
Foreign exchange forward contracts	$ -	(1,570)
Exchange contracts	(15,225)	(31,427)
	$ (15,225)	(32,997)

Fair value remeasurement was recognized in profit or loss. Refer to Note 6 (25) for details.

1) Derivative financial instruments

The Combined Company engages in derivative financial instrument transactions to avoid exchange rate risks exposed by business and financing activities. Because hedging accounting is not applied, the details of the derivative instruments of financial assets and liabilities measured at fair value through profit and loss are as follows:

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

a) Foreign exchange forward contracts

2024.12.31

Contract amount (in thousand dollars)	Type of currency	Due Date
USD 6,000	Buy JPY Call/USD Put	2025.01.22
USD $15,000	Buy RMB Call/USD Put	2025.01.22

b) Exchange contracts

2025.12.31

Contract amount (in thousand dollars)	Type of currency	Due Date
USD 128,000	Buy NTD Call/USD Put	2026.01.13~2026.03.10
NTD 163,360	Buy JPY Call/NTD Put	2026.01.16

2024.12.31

Contract amount (in thousand dollars)	Type of currency	Due Date
USD 113,000	Buy NTD Call/USD Put	2025.01.03~2025.01.23

d. Financial assets at fair value through other comprehensive income

	2025.12.31	2024.12.31
Equity instruments measured at fair value through other comprehensive gains and losses:
Stocks listed on the Taipei Exchange	$ 59,472	-
Stocks listed in the emerging stock market in Taiwan	-	64,764
Unlisted stocks	77,065	96,751
	$ 136,537	161,515
Current	$ 59,472	64,764
Non-current	77,065	96,751
	$ 136,537	161,515

Stocks of LAGIS ENTERPRISE CO., LTD., an Emerging Stock Board company held by the Consolidated Company and measured at fair value through other comprehensive income, were listed on the Taipei Exchange on December 14, 2025.

The Consolidated Company has designated the aforementioned investments as financial assets at FVTOCI on initial recognition as these equity instruments are not held for trading.

For the years ended December 31, 2025 and 2024, no disposal of investments was conducted and hence no transfer of cumulative profit or loss was recognized.

~39~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

e. Notes and accounts receivable

	2025.12.31	2024.12.31
Notes receivable	$ 37,460	23,836
Accounts receivable	2,141,008	2,470,332
Deduction: Allowance for loss	(3,397)	(22,238)
	2,175,071	2,471,930
Account Receivables - Related Parties	1,146,054	1,522,617
	$ 3,321,125	3,994,547

1) The Combined Company adopts a simplified approach to estimate expected credit losses for all note and accounts receivable (including related parties), that is, the expected credit losses during the lifetime are measured, and forward-looking information has been incorporated. The expected credit loss analysis of note receivables and account receivables (including related-parties) of the Consolidated Company as of December 31, 2025 and 2024 was as follows:

	2025.12.31
	Book amount of account receivables and bills	Weighted average loss rate	Loss allowance for lifetime expected credit losses
Not pass due	$ 3,282,913	0.0313%	1,028
Pass due 1~30 days	37,019	2.4231%	897
Pass due 31~60 days	3,207	4.3655%	140
Pass due 61~90 days	51	-	-
Past due more than 91 days	1,332	100%	1,332
	$ 3,324,522		3,397
	2024.12.31
---	---	---	---
	Book amount of account receivables and bills	Weighted average loss rate	Loss allowance for lifetime expected credit losses
Not pass due	$ 3,954,179	0.0360%	1,422
Pass due 1~30 days	40,511	1.9624%	795
Pass due 31~60 days	2,126	2.5400%	54
Pass due 61~90 days	3	33.3333%	1
Past due more than 91 days	19,966	100%	19,966
	$ 4,016,785		22,238

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

2) The table of changes in allowance loss for notes receivable and accounts receivable of the Combined Company is as follows:

	2025	2024
Balance at beginning of year	$ 22,238	21,749
Impairment loss (reversal gain)	945	(197)
Amounts written off as uncollectible for the year	(19,778)	-
Foreign currency conversion gains and losses	(8)	686
Balance at end of year	$ 3,397	22,238

3) The Combined Company and the financial institution sign a non-recourse agreement for the sale of account receivables. According to the contract, the Combined Company does not have to bear the risk that the account receivables cannot be recovered, but only bears the losses caused by commercial disputes. Since the Combined Company has transferred almost all the risks and rewards of the ownership of the above account receivables and has not continued to participate in it, it has met the conditions for derecognizing financial assets. After derecognizing the claims on accounts receivable, the claims on financial institutions are listed in other receivables. Relevant information about undue factoring accounts receivable on the reporting date was as follows:

2025.12.31
Sale object	Sale amount	Amount still available in advance	Advance amount	Shown as other receivables (Note 6 (6))	Interest rate range	Other important matters
Taipei Fubon Commercial Bank	$ 290,704	-	261,633	29,071	2.21%	Guaranteed promissory note 207,438
E.Sun Bank	188,706	-	160,400	28,306	2.10%	N/A
KGI Bank	166,223	-	149,601	16,622	2.10%	Guaranteed promissory note 94,290
	$ 645,633	-	571,634	73,999		301,728
2024.12.31
---	---	---	---	---	---	---
Sale object	Sale amount	Amount still available in advance	Advance amount	Shown as other receivables (Note 6 (6))	Interest rate range	Other important matters
Taipei Fubon Commercial Bank	$ 488,200	-	439,380	48,820	2.16%	Guaranteed promissory note 216,381
E.Sun Bank	152,333	-	137,100	15,233	2.05%	N/A
KGI Bank	144,445	-	130,000	14,445	2.29%	Guaranteed promissory note 98,355
	$ 784,978	-	706,480	78,498		314,736

For the relevant information about the account receivables that meet the derecognition conditions - the transfer of creditor's rights of related parties, please refer to Note 7.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

f. Other receivables

	2025.12.31	2024.12.31
Other receivables - accounts receivable sale minus advance price balance (Note 6 (5) and 7)	$ 88,610	78,498
Other receivables - others	3,289	1,190
Other receivables - related parties	-	188
Other receivables - insurance claims (Note 6 (25))	-	124,428
	91,899	204,304
Deduction: Allowance for loss	-	-
	$ 91,899	204,304

The Consolidated Company's other receivables as of December 31, 2025 and 2024 have no overdue amounts and no expected credit losses after assessment.

g. Inventory

	2025.12.31	2024.12.31
Raw Material	$ 1,910,464	1,595,901
Work in progress	1,333,883	1,017,925
Finished goods	840,550	822,018
	$ 4,084,897	3,435,844

The details of inventory-related costs and expenses recognized in the cost of goods sold in the current period are as follows:

	2025	2024
Inventory cost has been sold	$ 15,102,957	15,325,717
Reversal of allowance for inventory market price decline	144,516	(119,483)
	$ 15,247,473	15,206,234

The loss of inventory falling price is the loss of inventory falling price recognized as the net realizable value due to inventory write-down. Inventory falling price recovery benefit is due to the increase in the price of some raw materials for which allowance for falling price loss has been provided at the beginning of the period, or the inventory has been sold or used, resulting in a decrease in the amount of allowance for inventory falling price loss to be recognized.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

h. Investments accounted for using the equity method

Associates	2025.12.31	2024.12.31
	$ 675,123	570,747

I) Affiliated companies:

Name of associates	Nature of Relationship with the Company	Principal business place/ country of incorporation	2025.12.31		2024.12.31
			Voting rights%	Book amount	Voting rights%	Book amount
Visco Vision Inc. (Visco Vision)	Its main business is to manufacturer and sell disposable contact lenses, and it is a strategic partner of the Company.	Taiwan	14.82%	670,713	14.82%	566,281
MLK Bioscience Co., Ltd. (MLK)	Its main business is to research, develop and sell medical devices, and it is a strategic partner of the Company.	Taiwan	20.00%	-	20.00%	-
Coatmed Incorporation (Coatmed)	Its main business is to sell medical devices, and it is a strategic partner of the Company.	Taiwan	5.99%	4,410	7.48%	4,466
				$ 675,123		570,747

Coatmed Incorporation (hereinafter referred to as "Coatmed") made a cash capital increase in October 2025 and November 2024, and the Consolidated Company did not participate in the capital increase, which reduced the Consolidated Company's interest in Coatmed respectively to 5.99% and 7.48%. However, the Consolidated Company still serves as a director of the company and participates in decision-making, so it has not lost significant loss of influence.

Net profit of associates in 2025 and 2024 was NT$127,654 thousand and NT$95,689 thousand respectively.

The fair value of a listed related enterprise of significance to the Combined Company is as follows:

	2025.12.31	2024.12.31
Visco Vision	$ 1,628,743	1,670,745

The aggregate financial information of a related enterprise of material significance to the Combined Company is as follows:

a) Aggregated financial information of Visco Vision

	2025.12.31	2024.12.31
Current assets	$ 2,179,046	1,898,817
Non-current assets	3,819,761	3,404,447
Current liabilities	(1,227,506)	(1,076,187)
Non-current liabilities	(330,127)	(510,697)
Net assets	$ 4,441,174	3,716,380
Net assets attributable to non-controlling interests	$ 18,874	19,333
Net assets attributable to owners of the investee company	$ 4,422,300	3,697,047

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

	2025	2024
Operating revenue	$ 4,223,200	3,671,640
Net profit for the period	886,612	638,327
Other comprehensive income (loss)	159,482	246,836
Total comprehensive income	$ 1,046,094	885,163
Total comprehensive profit or loss attributable to non-controlling interests	$ (459)	1,856
Total comprehensive income attributable to owners of the investee company	$ 1,046,553	883,307
	2025	2024
Share in net assets of related enterprise of the Combined Company at the beginning of the period	$ 566,281	457,486
Net profit attributable to the Combined Company in the current period	128,305	100,327
Other comprehensive income attributable to the Combined Company in the current period	23,729	30,869
Dividends received from associates in the current period	(47,602)	(22,401)
Book value of the Combined Company at the end of the period on equity of related enterprises	$ 670,713	566,281

b) The aggregate financial information of individual insignificant related enterprises under the equity method of the Combined Company is as follows, and such financial information is the amount included in the consolidated financial report:

	2025.12.31	2024.12.31
The carrying amount of equity of individually immaterial associates at end of period	$ 4,410	4,466
	2025	2024
Share attributable to the Combined Company:
Net loss of the period	$ (651)	(4,638)
Other comprehensive income (loss)	-	(1)
Total comprehensive income	$ (651)	(4,639)

i. Changes in ownership interest in subsidiaries

In 2024, the Consolidated Company increased its shareholding in Genejet by NT$2,600 thousand in cash, which increased the equity held by the Consolidated Company from 75.63% to 79.35%.

~44~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The effect of the changes in the ownership interest of the above-mentioned Combined Company on the owners' equity attributable to the parent company is as follows:

	2025	2024
Retained earnings - difference between the acquisition price of the subsidiary's equity and the book value	$ -	(395)

j. Subsidiary with significant non-controlling interests

Significant non-controlling interests of subsidiaries in relation to the Consolidated Company are as follows:

Subsidiary name	Principal business place / country of incorporation	The proportion of ownership interests and voting rights attributable to non-controlling interests
		2025.12.31	2024.12.31
Web-Pro	Taiwan	49.00%	49.00%

The summarized financial information of the aforementioned subsidiaries is presented below. This financial information is prepared in accordance with the International Financial Reporting Standards (IFRS) approved by the Financial Supervisory Commission (FSC). It includes fair value adjustments made by the Consolidated Company on the acquisition date and reflects the amounts of internal transactions within the Consolidated Company that have not been eliminated as of the reporting date:

I) Aggregated financial information of Web-Pro:

	2025.12.31	2024.12.31
Current assets	$ 995,772	1,057,106
Non-current assets	4,386,974	4,519,243
Current liabilities	(489,903)	(383,044)
Non-current liabilities	(224,558)	(216,915)
Net assets	$ 4,668,285	4,976,390
Book value at the end of the period attributable of non-controlling interests	$ 2,266,696	2,426,494

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

	2025	2024
Net operating revenue	$ 2,481,846	2,574,770
Net profit for the period	73,172	126,215
Other comprehensive income (loss)	(49,280)	11,440
Total comprehensive income	$ 23,892	137,655
Net profit for the current period attributable to non-controlling interests	$ 35,854	61,845
Total comprehensive profit or loss attributable to non-controlling interests	$ 11,707	67,451
	2025	2024
Cash flows from operating activities	$ 303,150	309,553
Cash flows from investing activities	(115,701)	576,001
Cash flows from financing activities	(229,785)	(844,563)
Effect of changes in exchange rates	1,212	3,981
Increase (decrease) in cash and cash equivalents	$ (41,124)	44,972
Dividends paid to non-controlling interests	$ (171,500)	(411,600)

k. Property, plant and equipment

	Land	Housing and structures	Machinery equipment	Others	Total
Cost:
Balance as of January 1, 2025	$ 4,178,994	5,359,307	9,103,036	5,858,813	24,500,150
Addition	-	184,834	539,310	865,422	1,589,566
Disposal	-	-	(117,551)	(7,538)	(125,089)
Reclassification and effect of foreign exchange rate changes	-	808,312	697,399	(1,573,992)	(68,281)
Balance as of December 31, 2025	$ 4,178,994	6,352,453	10,222,194	5,142,705	25,896,346
Balance as of January 1, 2024	$ 4,178,994	5,161,688	8,397,966	4,382,541	22,121,189
Addition	-	70,703	408,743	2,048,540	2,527,986
Disposal	-	(20)	(203,551)	(46,180)	(249,751)
Reclassification and effect of foreign exchange rate changes	-	126,936	499,878	(526,088)	100,726
Balance as of December 31, 2024	$ 4,178,994	5,359,307	9,103,036	5,858,813	24,500,150
Accumulated depreciation:
Balance as of January 1, 2025	$ -	2,926,844	7,350,284	2,370,545	12,647,673
Depreciation for the period	-	237,817	497,552	238,532	973,901
Disposal	-	-	(117,551)	(7,538)	(125,089)
Reclassification and effect of foreign exchange rate changes	-	(4,847)	(10,841)	(4,318)	(20,006)
Balance as of December 31, 2025	$ -	3,159,814	7,719,444	2,597,221	13,476,479
Balance as of January 1, 2024	$ -	2,694,408	7,100,893	2,218,784	12,014,085
Depreciation for the period	-	206,007	427,235	192,995	826,237
Disposal	-	(20)	(203,730)	(46,001)	(249,751)
Reclassification and effect of foreign exchange rate changes	-	26,449	25,886	4,767	57,102
Balance as of December 31, 2024	$ -	2,926,844	7,350,284	2,370,545	12,647,673
Carrying Value:
December 31, 2025	$ 4,178,994	3,192,639	2,502,750	2,545,484	12,419,867
December 31, 2024	$ 4,178,994	2,432,463	1,752,752	3,488,268	11,852,477

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

For the details of real estate, plant, and equipment that have been used as guarantees for long-term borrowings and financing lines, please refer to Note 8 for details.

I. Right-of-use Assets

	Land use rights	Housing and structures	Transportation equipment	Total
Right-of-use assets cost:
Balance as of January 1, 2025 $	458,383	542,831	1,977	1,003,191
Addition	42,010	-	-	42,010
Derecognition in the current period	(36,200)	-	(1,977)	(38,177)
Effect of changes in exchange rates	(8,441)	8	-	(8,433)
Balance as of December 31, 2025	$ 455,752	542,839	-	998,591
Balance as of January 1, 2024 $	454,631	543,255	1,977	999,863
Addition	55	10,136	-	10,191
Derecognition in the current period	-	(10,575)	-	(10,575)
Effect of changes in exchange rates	3,697	15	-	3,712
Balance as of December 31, 2024	$ 458,383	542,831	1,977	1,003,191
Accumulated depreciation of right-of-use assets:
Balance as of January 1, 2025 $	122,133	213,308	1,758	337,199
Depreciation for the period	17,382	103,627	219	121,228
Derecognition in the current period	(36,200)	-	(1,977)	(38,177)
Effect of changes in exchange rates	(1,765)	111	-	(1,654)
Balance as of December 31, 2025	$ 101,550	317,046	-	418,596
Balance as of January 1, 2024 $	104,127	120,431	1,098	225,656
Depreciation for the period	17,117	103,453	660	121,230
Derecognition in the current period	-	(10,575)	-	(10,575)
Effect of changes in exchange rates	889	(1)	-	888
Balance as of December 31, 2024	$ 122,133	213,308	1,758	337,199
Carrying Value:
December 31, 2025	$ 354,202	225,793	-	579,995
December 31, 2024	$ 336,250	329,523	219	665,992

~47~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The land use right (including the land use right listed in investment property) is the Consolidated Company signed with the Mainland China Land and Resources Bureau to obtain the land use right of Suzhou Industrial Park and Gejiang District High-tech Industrial Development Zone in Wuhu City for the purpose of building factories. The period of use was from 2005 to 2055 and from 2012 to 2062. Additionally, the Consolidated Company obtained the land use right of the Vietnam Nhon Trach 3 Industrial Park for the purpose of building factories. The period of use was from 2016 to 2058.

m. Investment properties

	Housing and structures	Land use rights	Total
Cost:
Balance as of January 1, 2025	$ 314,390	60,635	375,025
Effect of changes in exchange rates	259	50	309
Balance as of December 31, 2025	$ 314,649	60,685	375,334
Balance as of January 1, 2024	$ 303,534	58,541	362,075
Effect of changes in exchange rates	10,856	2,094	12,950
Balance as of December 31, 2024	$ 314,390	60,635	375,025
Accumulated depreciation:
Balance as of January 1, 2025	$ 211,845	22,971	234,816
Depreciation for the period	10,731	894	11,625
Effect of changes in exchange rates	624	57	681
Balance as of December 31, 2025	$ 223,200	23,922	247,122
Balance as of January 1, 2024	$ 194,045	20,979	215,024
Depreciation for the period	10,777	1,232	12,009
Effect of changes in exchange rates	7,023	760	7,783
Balance as of December 31, 2024	$ 211,845	22,971	234,816
Carrying Value:
December 31, 2025	$ 91,449	36,763	128,212
December 31, 2024	$ 102,545	37,664	140,209
Fair value:
December 31, 2025			$ 329,399
December 31, 2024			$ 355,323

Investment real estate is a factory area used for lease. The fair value of investment real estate is evaluated based on the market evidence of similar real estate transaction prices in the same area by the management, and the input value used in its fair value evaluation technology belongs to the third level.

~48~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

n. Intangible assets

	Goodwill	Patent rights	Patented technology	Customer relationship	Purchased software	Others	Total
Cost:
Balance as of January 1, 2025 $	56,624	23,250	130,668	34,925	397,377	1,884	644,728
Separate acquisition	-	-	-	-	49,233	-	49,233
Decrease in the period	-	-	-	-	(22,571)	-	(22,571)
Reclassification and influence of exchange rate change	-	-	(2,255)	-	2,635	1	381
Balance as of December 31, 2025	$ 56,624	23,250	128,413	34,925	426,674	1,885	671,771
Balance as of January 1, 2024 $	56,624	23,250	127,280	34,925	364,754	1,849	608,682
Separate acquisition	-	-	-	-	32,730	-	32,730
Decrease in the period	-	-	-	-	(2,853)	-	(2,853)
Reclassification and influence of exchange rate change	-	-	3,388	-	2,746	35	6,169
Balance as of December 31, 2024	$ 56,624	23,250	130,668	34,925	397,377	1,884	644,728
Accumulated amortization:
Balance as of January 1, 2025 $	-	9,300	91,440	11,232	360,564	1,664	474,200
Amortization for the period	-	4,650	7,746	3,547	45,840	17	61,800
Decrease in the period	-	-	-	-	(22,571)	-	(22,571)
Reclassification and influence of exchange rate change	-	-	(2,255)	-	6	1	(2,248)
Balance as of December 31, 2025	$ -	13,950	96,931	14,779	383,839	1,682	511,181
Balance as of January 1, 2024 $	-	4,650	80,308	7,685	314,052	1,607	408,302
Amortization for the period	-	4,650	7,746	3,547	49,333	22	65,298
Decrease in the period	-	-	-	-	(2,853)	-	(2,853)
Reclassification and influence of exchange rate change	-	-	3,386	-	32	35	3,453
Balance as of December 31, 2024	$ -	9,300	91,440	11,232	360,564	1,664	474,200
Carrying Value:
December 31, 2025	$ 56,624	9,300	31,482	20,146	42,835	203	160,590
December 31, 2024	$ 56,624	13,950	39,228	23,693	36,813	220	170,528

As of December 31, 2025 and 2024, the goodwill arising from the merger and acquisition was apportioned to the following cash generating units benefiting from the consolidated effect:

~49~

~50~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

	2025.12.31	2024.12.31
Cenefom	$ 32,262	32,262
Web-Pro	24,362	24,362
	$ 56,624	56,624

The above-mentioned cash generating units are the smallest units under the supervision of management under the return on investment of assets containing goodwill. Based on the results of the goodwill impairment test conducted by the Consolidated Company on the aforesaid cash generating units, the recoverable amount of the aforesaid cash generating units as of December 31, 2025 and 2024 is higher than their book value, so there is no need to recognize the impairment loss. The recoverable amount of each of the cash generating units is determined based on the value in use, and the relevant key assumptions are as follows:

The key assumptions used to estimate the value in use are as follows:

	2025.12.31	2024.12.31
Cenefom:
Operating Revenue Growth Rate	12%~82%	20%~56%
Discount rate	21.07%	20.67%
Web-Pro:
Operating Revenue Growth Rate	4.3%~14%	5.4%~24.9%
Discount rate	12.42%	12.20%

1) The estimated future cash flows used are based on the five-year financial budgets projected by management based on future operating plans, with cash flows over five years extrapolated at an annual growth rate of 1%.

2) The discount rate for determining the value in use is based on the weighted average cost of capital.

o. Short-term borrowings

	2025.12.31	2024.12.31
Unsecured bank loans	$ 3,230,000	2,200,000
Unused credit line	$ 9,360,018	9,483,111
Interest rate range	1.80%~2.33%	1.87%~1.99%

~51~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

p. Long-term borrowings

	2025.12.31	2024.12.31
Unsecured bank loans	$ 6,977,600	4,881,571
Secured bank loans	168,000	1,378,560
Less: Borrowings due within one year	(483,779)	(342,313)
Total	$ 6,661,821	5,917,818
Unused credit line	$ 2,274,000	5,080,880
Expiration year	2025-2034	2025-2034
Interest rate range	1.88%~2.70%	1.88%~2.38%

1) Collateral for bank loans

Refer to Note 8 for details on collateral pledged on secured bank borrowings.

2) Government low-interest loans

The Consolidated Company obtained low-interest bank loans in accordance with the "Action Plan for Welcoming Overseas Taiwanese Business to Return to Invest in Taiwan". As of December 31, 2025 and 2024, the actual repayment preferential interest rate is 1.38%-1.73% and 1.38%-1.73%, besides, the actual amount of transfer amounted on NT$4,067,483 thousand and NT$3,243,027 thousand. The fair value of the loans was NT$4,007,791 thousand and NT$3,191,663 thousand based on the market interest rate of 1.80%-2.03% and 1.80%-2.03%, and the difference of NT$59,692 thousand and NT$51,364 thousand is regarded as the government subsidy and recognized as deferred income. The deferred revenue balance mentioned above in the year ended December 31, 2025 and 2024 was $18,263 thousand and $21,457 thousand, respectively. In the year ended December 31, 2025 and 2024, the aforementioned deferred revenue was reclassified to "other income" in the amount of $11,523 thousand and $10,945 thousand, respectively.

3) Financial ratio agreement in loan contract

According to the provisions of the joint loan contract with the bank, the Combined Company shall calculate and maintain the agreed current ratio, debt ratio, and minimum tangible net worth, and other financial ratios during the duration of the loan in accordance with the annual Consolidated Financial Statements verified by the accountant. If the aforementioned financial ratios do not meet the agreed standards, the Combined Company may submit an exemption application and improvement plan to the management bank in accordance with the provisions of the joint loan contract. Most syndicated lending banks do not regard it as a breach of contract until they reach a resolution.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The financial ratios of the Consolidated Company as of December 31, 2025 and 2024 were in compliance with the agreed standards in the joint loan contract.

q. Lease liabilities

The book value of the Combined Company's lease liabilities is as follows:

	2025.12.31	2024.12.31
Current:
Stakeholders	$ 96,394	94,852
Non-related parties	$ 10,096	11,045
Non-current:
Stakeholders	$ 98,133	194,527
Non-related parties	$ 42,630	38,043

Please refer to Note 6 (27) for expiry analysis.

The amounts recognized in profit or loss were as follows:

	2025	2024
Short-term lease expense	$ 19,704	18,034
Interest expense – lease obligations payable	$ 5,385	6,974

The amounts recognized in the statements of cash flows are:

	2025	2024
Total cash flows on lease	$ 158,313	131,149

1) Lease of buildings and constructions

The Consolidated Company leases houses and buildings as factories and dormitories. The lease term of the plant is usually three to ten years. If the lease expires, a new contract and price must be negotiated, the Consolidated Company will reassess the relevant right-of-use assets and lease liabilities.

2) Other leases

The leases of plant and automobile expiring within one year, are short-term leases for which the Consolidated Company chooses to apply the exemption requirements and does not recognize its related right-of-use assets and lease liabilities.

r. Operating leases - lessor

The investment property leased by the Consolidated Company does not transfer all risks and remuneration attached to the ownership of the underlying assets, so the tenancy agreement is classified as an operating lease. Please refer to Note 6 (13) investment property for details.

~52~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The maturity analysis of the lease payment is listed as follows according to the non-discounted future cash flows of lease receivable after the reporting date:

	2025.12.31	2024.12.31
Less than 1 year	$ 36,973	26,609
1~5 years	11,812	24,383
More than 5 years	976	2,528
Non-discounted future cash flows of lease	$ 49,761	53,520

The rental income from investment real estate in 2025 and 2024 was NT$ 42,441 thousand and NT$33,818 thousand, respectively, which were reported under operating income. The direct operating expenses incurred by investment property (listed in "Operating Costs") are as follows:

	2025	2024
Direct operating expenses of investment properties that generated rental income	$ 19,713	19,659

s. Employee benefits

1) Defined benefit plans

The reconciliation between the present value of defined benefit obligations and the fair value of plan assets for defined benefit plans was as follows:

	2025.12.31	2024.12.31
Present value of defined benefit obligations	$ 72,649	63,865
Fair value of plan assets	(62,978)	(56,299)
Net defined benefit liabilities (listed as other non-current liabilities)	$ 9,671	7,566
	2025.12.31	2024.12.31
Present value of defined benefit obligations	$ -	-
Fair value of plan assets	-	(5,026)
Net defined benefit asset (listed as "other non-current assets")	$ -	(5,026)

The Combined Company makes defined benefit plan contributions to the pension fund account at the Bank of Taiwan that provides pensions for employees upon retirement. The retirement payment of each employee subject to the Labor Standards Law is calculated based on the base number of years of service and the average salary of the six months before retirement.

~53~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

a) Composition of plan assets

The retirement fund contributed by the Consolidated Company in accordance with the Labor Standards Act is managed by the Bureau of Labor Funds Utilization, Ministry of Labor (hereinafter referred to as Bureau of Labor Funds), and utilized according to the provisions of "Regulations on Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund"; with regard to the utilization of the funds, lowest earnings in final settlement shall not be less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

As of December 31, 2025 and 2024, the balances of the Taiwan Bank's special account for labor retirement reserves of the Consolidated Company were NT$62,978 thousand and NT$61,325 thousand, respectively. For information on the utilization of the labor pension fund assets including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

b) Movements in present value of the defined benefit obligations

	2025	2024
Service cost and interest of the period	$ 63,865	65,921
Service cost of period	161	157
Current interest	1,355	1,261
Service cost of the prior period	-	1,305
Remeasurement of net defined benefit liabilities
— Actuarial profits and losses due to experience adjustments	5,710	2,368
— Actuarial profits or losses arising out of changes in financial assumptions	2,186	(2,039)
Settlement of income	-	(18)
Benefits that are planned to pay	(628)	(5,090)
Service cost and interest of the end period	$ 72,649	63,865

c) Changes in the fair value of planned assets

	2025	2024
Fair value of plan assets at beginning period	$ 61,325	58,325
Interest revenue	1,214	1,085
Remeasurement of net defined benefit liabilities
— Actuarial loss	3,681	4,725
Funds contributed by the employer	2,412	2,280
Settlement of a defined benefit plan	(5,026)	-
Benefits that are planned to pay	(628)	(5,090)
Fair value of plan assets at end period	$ 62,978	61,325

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The consolidated subsidiary Sigma-Medical completed the settlement of the balance in the labor pension reserve account deposited with the Bank of Taiwan in 2025 and recognized the related gain under other gains and losses in the amount of NT$424 thousand.

d) Change of asset upper limit impacts

The Consolidated Company did not determine the impact of the maximum number of assets of the defined benefit plans in 2025 and 2024.

e) Expenses recognized in profit or loss

	2025	2024
Service cost of period	$ 161	157
Net interest on net defined benefit liability assets	141	176
Service cost of the prior period	-	1,305
Settlement of interests	-	(18)
	$ 302	1,620
Operating costs	$ 248	1,607
Operating expenses	54	13
	$ 302	1,620

f) Remeasurement of the net defined benefit liability recognized as other comprehensive revenue

	2025	2024
Accumulated balance at beginning period	$ (23,709)	(28,105)
Recognition of the period	(4,215)	4,396
Accumulated balance at end of period	$ (27,924)	(23,709)

g) Actuarial assumptions

The significant actuarial assumptions used by the Combined Company to determine the present value of welfare obligations at the financial reporting date are as follows:

	2025.12.31	2024.12.31
Discount rate	1.875%~2%	1.375%~2.375%
Future salary increases rate	3.00%	3.00%

The Combined Company expects to pay NT$2,447 thousand to the defined benefit plan within one year after the reporting date in 2025. The weighted average duration of defined benefit plans is 15.3 to 23.19 years.

~55~

~56~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

h) Sensitivity analysis

The present value of the defined benefit obligation affected by the changes in the main actuarial assumptions adopted is as follows:

	Impact on defined benefit obligations
	Increase by 0.25%	Decrease by 0.25%
December 31, 2025
Discount rate	(2,138)	2,218
Future salary increases rate	2,151	(2,085)
December 31, 2024
Discount rate	(2,041)	2,130
Future salary increases rate	2,073	(1,995)

With other assumptions unchanged, above sensitivity analysis analyzes effects of changes in single assumption. In practice, many changes in assumptions may be linked together. The method used for the sensitivity analysis and calculation of the net defined benefit pension liability is the same. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities of the balance sheet. The method and assumptions used for the preparation of the sensitivity analysis for the current period are the same as those used in the previous period.

2) Defined contribution plans

The definite allocation plan of the Company and its domestic subsidiaries is in accordance with the provisions of the Labor Pension Regulations, and is allocated to the labor pension individual account of the Labor Insurance Bureau at a rate of 6% of the labor's monthly salary; foreign subsidiaries pay pensions in accordance with local laws and regulations. Under such plans, after the Consolidated Company allocates a fixed amount in accordance with regulations, there is no statutory or constructive obligation to pay additional amounts.

The pension expenses under the method of determining the appropriation of pensions are as follows:

	2025	2024
Operating costs	$ 75,278	72,102
Operating expenses	51,175	46,638
	$ 126,453	118,740

~57~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

t. Income tax

1) Income tax expense:

	2025	2024
Income tax expenses of the period	$ 40,374	48,835
Deferred income tax (benefit) expenses
Occurrence and reversal of temporary differences	(11,349)	15,215
Changes in unrecognized temporary differences	365	12,264
Unrecognized loss carryforwards changes	(4,097)	5,812
	(15,081)	33,291
Income tax expense	$ 25,293	82,126

There was no income tax that was directly recognized in equity or other comprehensive income for the Consolidated Company in 2025 and 2024.

The reconciliation of income tax expenses (benefits) and profit (loss) before income tax was as follows:

	2025	2024
Profit (loss) before tax	$ (318,735)	331,035
Income tax calculated by domestic tax rate of the Company's domicile	$ (63,747)	66,207
Impact of tax rate difference in foreign administrative areas	6,993	3,105
Domestic investment gains recognized under equity method	(37,920)	(30,480)
Non-deductible impairment and expenses	61,195	11,091
Gains from tax exemption	(336)	(336)
Changes in unrecognized temporary differences	365	12,264
Unrecognized loss carryforwards changes	(4,097)	5,812
Investment deduction	(1,386)	(678)
Tax on undistributed earnings	3,640	25
Others	60,586	15,116
Income tax expense	$ 25,293	82,126

2) Deferred tax assets and liabilities

a) Unrecognized deferred tax assets

Unrecognized deferred tax assets:

	2025.12.31	2024.12.31
Deductible loss	$ 147,962	172,615
Summary amount of temporary differences related to investment in subsidiaries	42,775	42,410
	$ 190,737	215,025

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

For the temporary difference related to the investment subsidiary, since the Combined Company can control the time when the temporary difference turns back and is convinced that it will not be in the foreseeable future reverted, therefore, the related deferred tax assets were not recognized; in addition, the Company and some of its subsidiaries assessed on each reporting date that it is not likely to have sufficient taxable income in the future for loss deduction, so the relevant deferred income tax assets have not been recognized.

As of December 31, 2025, the loss deduction and tax amount of the Consolidated Company's unrecognized deferred tax assets, the deduction period is as follows:

Amount of deductible losses	The number of losses that have not been deducted from the deduction of tax	Final year that tax may be deducted
$ 38,770	7,754	2026
36,221	7,244	2027
154,883	34,608	2028
209,668	48,995	2029
45,481	9,096	2030
16,387	3,278	2031
11,239	2,248	2032
58,623	13,777	2033
43,861	8,624	2034
63,705	12,338	2035
$ 678,838	147,962

b) Recognized deferred tax assets and liabilities

Changes in deferred tax assets and liabilities are as follows:

Deferred income tax assets:

	Allowance for loss of inventory depreciation	Deductible loss	Fixed asset tax differential	Others	Total
January 1, 2025	$ 58,507	61,027	49,921	74,214	243,669
(Debit) credit revenue statement	31,185	6,598	(1,114)	(19,385)	17,284
Exchange differences arising on translation of financial statements of foreign operations	-	(527)	(47)	-	(574)
December 31, 2025	$ 89,692	67,098	48,760	54,829	260,379

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

	Allowance for loss of inventory depreciation	Deductible loss	Fixed asset tax differential	Others	Total
January 1, 2024	$ 83,660	35,436	46,574	102,405	268,075
(Debit) credit revenue statement	(25,153)	25,483	2,698	(28,191)	(25,163)
Exchange differences arising on translation of financial statements of foreign operations	-	108	649	-	757
December 31, 2024	$ 58,507	61,027	49,921	74,214	243,669

Deferred tax liabilities:

	Share of profit from subsidiaries accounted under equity method	Reserve for land value increment tax	Acquisitions of businesses	Others	Total
January 1, 2025	$ 259,528	54,767	170,775	19,633	504,703
Debit (credit) income statement	25,012	-	(9,687)	(13,122)	2,203
December 31, 2025	$ 284,540	54,767	161,088	6,511	506,906
January 1, 2024	$ 247,319	54,767	180,461	14,028	496,575
Debit (credit) income statement	12,209	-	(9,686)	5,605	8,128
December 31, 2024	$ 259,528	54,767	170,775	19,633	504,703

As of December 31, 2025, the loss deduction and tax amount of the Consolidated Company's recognized deferred tax assets, the deduction period is as follows:

Amount of deductible losses	The number of losses that have not been deducted from the deduction of tax	Final year that tax may be deducted
$ 28,628	5,726	2027
11,171	2,234	2028
56,179	11,236	2029
36,127	7,225	2030
203,385	40,677	2035
$ 335,490	67,098

3) Income tax approved

The ROC income tax authorities have examined the Company's income tax returns up to 2023.

~60~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

u. Capital and other equity

1) Common stock

As of December 31, 2025 and 2024, the total value of nominal capital stock amounted to NT$4,800,000 thousand for both years, with a par value of NT$10 per share, consisting of 480,000 thousand shares each year. There were 320,675 thousand of ordinary shares being issued.

2) Capital surplus

The details of capital reserve were as follows:

Changes in net equity of associates accounted under equity method	2025.12.31	2024.12.31
	$ 193,709	193,114

In accordance with the Company Act, the capital surplus generated from the premium of stock issuance and donation may only be used to offset accumulated deficits. The aforementioned realized capital reserve includes capital reserve resulting from premium on issuance of capital stock and earnings from donated assets received. In accordance with the provisions of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the capital surplus may be capitalized, and the combined amount of any portions capitalized may not exceed 10% of the paid-in capital each year.

3) Retained earnings

According to the Company's Articles of Incorporation, if there is a surplus in the annual final accounts, tax should be paid first to make up for previous losses, 10% of the statutory surplus reserve should be raised, and the special surplus reserve should be set aside or converted according to laws and regulations. If there is still surplus and accumulate undistributed surplus, the Board of Directors shall draft a surplus distribution plan and submit it to the shareholders meeting for resolution and distribution.

When the legal reserve and capital surplus are to be distributed in cash, the distribution may be approved by the Board of Directors and reported to the shareholders' meeting.

According to the Company's Articles of Incorporation, the Company is a technology- and capital-intensive industry that is in the midst of a growth period. In order to cooperate with long-term capital planning and meet shareholders' demand for cash flow, the Company's dividend policy adopts a residual dividend policy to improve the Company's growth and sustainable operation. If the Company has a surplus after the

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

annual final accounts, it shall pay taxes in accordance with the regulations to make up for the previous losses. The 10% of the second increase is the statutory surplus reserve, and after the special surplus reserve is drawn or converted in accordance with the law. If there is still a surplus, the dividend distribution shall not be less than 10% of the aforementioned calculated surplus. When dividends are distributed, in order to consider the needs of future expansion of the scale of operations and cash flow, the proportion of annual cash dividends shall not be less than 10% of the combined cash and stock dividends of the current year.

a) Legal reserve

When there is no loss in the Company, the statutory surplus reserve will be used to issue new shares or cash upon resolution by the Shareholders' Meeting, to the limit of the part of the reserve that has exceeded 25% of the paid-in amount.

b) Special reserve

According to regulations of Financial Supervisory Commission, when the Company distributes the distributable surplus, the net deduction of other shareholders' equity in the current year is reported, the net profit for the current period and items other than net profit for the current period are added to the undistributed surplus for the current period, and the special reserve is drawn from it and the undistributed surplus in the previous period. For the deduction of other shareholders' equity accumulated in the previous period, the same amount of special reserve shall not be distributed from the undistributed surplus in the previous period. If other stockholders' equity deductions are reversed afterward, the reversal may be applicable for the appropriation of earnings.

c) Earnings distribution

The 2024 and 2023 distributions of earnings were resolved at the directors' meetings held on February 24, 2025 and February 22, 2024, respectively, the cash dividends distributions are as follows:

	2024		2023
	Earnings Per Share (NT$)	Amount	Earnings Per Share (NT$)	Amount
Dividends to ordinary shareholders:
Cash	$ 0.62	198,818	1.20	384,809

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The 2025 distributions of earnings were resolved at the directors' meetings held on February 24, 2026, the cash dividends distributions are as follows:

	2025
	Earnings Per Share (NT$)	Amount
Dividends to ordinary shareholders:
Cash	$ 0.30	96,202

Relevant information can be inquired through channels such as Market Observation Post System.

d) Other equity (after tax)

	Exchange differences arising on translation of financial statements of foreign operations	Unrealized profit (loss) on investments in equity instruments at fair value through other comprehensive income	Remeasurement of defined benefit plans	Total
Balance as of January 1, 2025	$ 53,701	(18,343)	(23,782)	11,576
The exchange differences yielded by net assets of overseas operating institutions:
The Consolidated Company	(16,584)	-	-	(16,584)
Associates	27,860	-	-	27,860
Remeasurement of defined benefit plans	-	-	(4,138)	(4,138)
Unrealized profit (loss) on investments in equity instruments at fair value through other comprehensive income:
The Consolidated Company	-	(24,978)	-	(24,978)
Associates	-	(4,131)	-	(4,131)
Balance as of December 31, 2025	$ 64,977	(47,452)	(27,920)	(10,395)
Balance as of January 1, 2024	$ (44,495)	(20,011)	(28,178)	(92,684)
The exchange differences yielded by net assets of overseas operating institutions:
The Consolidated Company	67,328	-	-	67,328
Associates	30,868	-	-	30,868
Remeasurement of defined benefit plans	-	-	4,396	4,396
Unrealized profit (loss) on investments in equity instruments at fair value through other comprehensive income	-	1,668	-	1,668
Balance as of December 31, 2024	$ 53,701	(18,343)	(23,782)	11,576

~63~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

e) Non-controlling equity (after tax)

	2025	2024
Balance at beginning of year	$ 2,601,327	2,959,823
Acquisition of partial equity of subsidiaries	-	(2,600)
Difference between prices of shares acquired from subsidiaries and book value	-	395
Cash dividends distributed by subsidiaries to non-controlling interests	(171,500)	(411,600)
Share attributable to non-controlling interests:
Net profit for the period	20,430	49,703
Exchange differences arising on translation of financial statements of foreign operations	(24,070)	5,606
Remeasurement of defined benefit plans	(77)	-
	$ 2,426,110	2,601,327

v. Earnings (Loss) per share

1) Basic earnings (loss) per share

	2025	2024
Net profit (loss) attributable to holders of common equity of the Company	$ (364,458)	199,206
The weighted average number of shares outstanding (thousand shares)	320,675	320,675
Basic earnings (loss) per share (NT$)	$ (1.14)	0.62

2) Diluted earnings (loss) per share

	2025	2024
Net profit (loss) attributable to holders of common equity of the Company	$ (364,458)	199,206
The weighted average number of shares outstanding (thousand shares)	320,675	320,675
Effect of potentially dilutive shares of common stocks (thousand shares):
Impact of employee compensation	-	1,053
The weighted average number of shares outstanding (thousand shares) (After adjusting the number of dilutive potential common shares impact)	320,675	321,728
Diluted earnings (loss) per share (NT$)	$ (1.14)	0.62

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

As the Company incurred an operating loss in 2025, the potential ordinary shares with dilutive effects were not included in the calculation of loss per share.

w. Revenue from contracts with customers

1) Disaggregation of revenue

	2025
	Film sheet segment	Medical segment	Total
Primary geographical markets:
China	$ 7,920,059	1,307,452	9,227,511
Taiwan	3,999,279	1,323,256	5,322,535
Japan	120,544	716,933	837,477
United States	532	854,979	855,511
Others	354,702	1,248,249	1,602,951
	$ 12,395,116	5,450,869	17,845,985
Main products/services:
Functional sheet	$ 12,395,116	-	12,395,116
Medical Products	-	5,450,869	5,450,869
	$ 12,395,116	5,450,869	17,845,985
	2024
---	---	---	---
	Film sheet segment	Medical segment	Total
Primary geographical markets:
China	$ 8,423,134	1,251,739	9,674,873
Taiwan	4,388,546	1,206,679	5,595,225
Japan	116,933	783,820	900,753
United States	274	1,001,273	1,001,547
Others	152,252	1,264,328	1,416,580
	$ 13,081,139	5,507,839	18,588,978
Main products/services:
Functional sheet	$ 13,081,139	-	13,081,139
Medical Products	-	5,507,839	5,507,839
	$ 13,081,139	5,507,839	18,588,978

~65~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

2) Contract balances

	2025.12.31	2024.12.31	2024.01.01
Notes receivables and accounts receivables (including related parties)	$ 3,324,522	4,016,785	3,153,275
Deduction: Allowance for loss	(3,397)	(22,238)	(21,749)
Total	$ 3,321,125	3,994,547	3,131,526
	2025.12.31	2024.12.31	2024.01.01
Contract liabilities (accounted under other current liabilities)	$ 38,142	52,538	63,386

Refer to Note 6 (5) for details on accounts receivable and related loss allowance.

Amount of contract liabilities for the period starting from January 1, 2025 and 2024, recognized as income in 2025 and 2024, were NT$50,049 thousand and NT$52,476 thousand, respectively.

x. Employee and directors' compensation

On May 28, 2025, the shareholders' meeting resolved to amend the Company's Articles of Incorporation. According to the amended Articles, if there are profits in a given year, the Company shall allocate 5% to 20% of such profits as employee compensation (of which the compensation for grassroots employees shall not be less than 10%) and no more than 1% as directors' remuneration. When there are accumulated losses, the Company shall offset the appropriate amounts before remuneration. The employee compensation in the preceding paragraph may include employees of affiliated companies who meet certain conditions for the payment of stocks or cash. According to the pre-amended articles of association, if the Company has earnings, it shall set aside 5-20% of the balance as remuneration to the employees and no greater than 1% of the balance as remuneration to directors. When there are accumulated losses, the Company shall offset the appropriate amounts before remuneration. The employee compensation in the preceding paragraph may include employees of affiliated companies who meet certain conditions for the payment of stocks or cash.

In 2024, the Company's employee bonus was set aside for NT$25,491 thousand, and the director's bonus was set aside for NT$1,912 thousand, which are estimated on the basis of the Company's pre-tax net profit before deducting the bonus of employees and directors in the period multiplied by the distribution percentage of the bonus of employees and directors stipulated in the Articles of Incorporation of the Company, and reported as the operating cost or expenses of 2024. As the Company incurred an operating loss in 2025, no employee compensation or directors' remuneration was estimated. Upon any variance between the distribution of next year and the estimated amount, a change of accounting estimate shall follow and recognize in the profit or loss of next year. The compensation for

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

employees and directors of the Company decided by the Board of Directors is not different from the estimated amount in the Company's Individual Financial Statements for the year of 2024, and it is issued in cash. For the relevant information, please refer to the Market Observation Post System Inquire.

y. Non-operating profit and loss

1) Interest revenue

	2025	2024
Interests on bank deposits	$ 12,273	22,619

2) Other revenue

	2025	2024
Government subsidy revenue	$ 18,561	51,832
Dividend revenue	1,680	1,680
	$ 20,241	53,512

3) Other gains and losses

	2025	2024
Profits from disposal of real estate, plant, and equipment	$ 452	1,523
Loss on liquidation of subsidiary	2,623	-
Gain (loss) on foreign currency exchange	(84,485)	251,720
Net profits (losses) from financial assets (liabilities) at fair value through profit or loss	26,852	(429,506)
Earthquake Disaster Loss	(2,991)	(124,428)
Insurance Claims Income	100,057	124,428
Others	23,372	31,893
	$ 65,880	(144,370)

Due to the earthquake that occurred in the Taiwan region on April 3, 2024, the Company has experienced damage to certain plants, equipment, and inventory. The total amount of losses before insurance compensation as of December 31, 2025 was 127,419 thousand (including inventory losses of 110,936 thousand and equipment repair losses of 16,483 thousand). Of this amount, 124,428 thousand had been recognized in 2024, and an additional equipment repair loss of 2,991 thousand was recognized in 2025. The losses incurred in the current period were recorded under other gains and losses. However, the Company has purchased property insurance and

~66~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

business interruption insurance. According to the terms of the property insurance contract, the Company is entitled to receive compensation for the aforementioned earthquake losses. Therefore, the Company recognized insurance compensation income up to the amount of losses already recognized for the insured assets. As of December 31, 2024, the insurance claim receivable was recorded under other receivables. As of December 31, 2025, the Company had received insurance claim proceeds totaling 224,485 thousand from the insurance company. The insurance claims relating to the earthquake disaster have been fully settled.

4) Financial costs

	2025	2024
Interest expenses of bank loans	$ (163,166)	(126,735)
Lease liabilities	(5,385)	(6,974)
	$ (168,551)	(133,709)

z. Types of financial instruments and fair value

1) Types of financial instruments

a) Financial assets

	2025.12.31	2024.12.31
Financial assets at fair value through profit or loss:
Foreign exchange forward contracts	$ -	1,457
Exchange contracts	1,216	-
Stocks listed in the emerging stock market in Taiwan	107,827	-
Subtotal	109,043	1,457
Financial assets at fair value through other comprehensive income	136,537	161,515
Financial assets at amortized cost:
Cash and Cash Equivalents	729,256	684,063
Notes receivable, accounts receivables, and other receivables (including related parties)	3,413,024	4,198,851
Other financial assets - current and non-current	95,337	68,266
Guarantee deposits paid	18,451	14,960
Subtotal	4,256,068	4,966,140
Total	$ 4,501,648	5,129,112

~68~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

b) Financial liabilities

	2025.12.31	2024.12.31
Financial liabilities at fair value through profit and loss:
Foreign exchange forward contracts	$ -	1,570
Exchange contracts	15,225	31,427
Subtotal	15,225	32,997
Financial liabilities measured at amortized cost:
Short-term borrowings	3,230,000	2,200,000
Account payables and other receivables (including related parties)	4,304,660	4,710,326
Long-term borrowings (including loans due within one year)	7,145,600	6,260,131
Lease liabilities - current and non-current (including related parties)	247,253	338,467
Guarantee deposits received (were recorded under other non-current liabilities)	11,151	9,117
Subtotal	14,938,664	13,518,041
Total	$ 14,953,889	13,551,038

2) Information of fair value

a) Financial instruments that is not measured at fair value

The management of the Combined Company believes that the financial assets and financial liabilities of the Combined Company classified as amortized cost is close to their fair value in the Consolidated Financial Statements.

b) Financial instruments measured at fair value

The following financial instruments are measured at fair value on the basis of repeatability. The table below provides an analysis of financial instruments measured subsequent to initial recognition at fair value, which are grouped into Levels 1 to 3 based on the degree to which the fair value is observable. Each level of the fair value hierarchy is defined as follows:

i. Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities

ii. Level 2: Level 2 inputs are inputs other than quoted market prices included within Level 1 that are observable for the asset or liability, either directly (i.e., price) or indirectly (i.e., derived from prices).

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

iii. Level 3: Level 3 inputs are inputs for the asset or liability that are not based on observable market data (unobservable parameters).

	2025.12.31
	Book amount	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Stocks listed in the emerging stock market in Taiwan	$ 107,827	-	107,827	-	107,827
Exchange contracts	1,216	-	1,216	-	1,216
	$ 109,043	-	109,043	-	109,043
Financial assets at fair value through other comprehensive income:
Stocks listed on the Taipei Exchange	$ 59,472	59,472	-	-	59,472
Non-listed Stocks	77,065	-	-	77,065	77,065
	$ 136,537	59,472	-	77,065	136,537
Financial liabilities at fair value through profit and loss:
Exchange contracts	$ (15,225)	-	(15,225)	-	(15,225)
	2024.12.31
---	---	---	---	---	---
	Book amount	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Foreign exchange forward contracts	$ 1,457	-	1,457	-	1,457
Financial assets at fair value through other comprehensive income:
Stocks listed in the emerging stock market in Taiwan	$ 64,764	-	64,764	-	64,764
Non-listed Stocks	96,751	-	-	96,751	96,751
	$ 161,515	-	64,764	96,751	161,515
Financial liabilities at fair value through profit and loss:
Foreign exchange forward contracts	$ (1,570)	-	(1,570)	-	(1,570)
Exchange contracts	(31,427)	-	(31,427)	-	(31,427)
	$ (32,997)	-	(32,997)	-	(32,997)

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

3) The assessment methods and assumptions followed for assessing fair value

a) Non-derivative financial instruments

If there is open quotation to financial instruments at active market, then the open quotation will be taken as fair value.

If the public quotation of a financial instrument can be obtained from an exchange, broker, underwriter, industry association, pricing service agency or competent authority in a timely and frequent manner, and the price represents the actual and regular fair market transactions, then the financial instrument has an active market quotation. If the aforesaid conditions fail, the market is not deemed as active.

Stocks of OTC companies are traded in an active market with standard terms and conditions, and their fair values are determined based on market quotations.

The fair value of the domestic stocks held by the Combined Company is estimated based on the average transaction price of the stock market on the day.

The fair value of the Combined Company's holding of unlisted stocks for which no active market exists is estimated by using the market approach, which refers to the valuation of similar entities, the net worth of an entity and the operating performance. In addition, the significant unobservable inputs mainly comprise liquidity discount, in which the possible changes would not result in a potentially material financial effect. Therefore, the Company does not disclose the quantitative information.

b) Derivative financial instruments

It is evaluated with evaluation model widely accepted by market users. Forward exchange contracts and exchange contracts are usually valued based on current forward exchange rates.

4) Fair value level and transfer

The shares of LAGIS ENTERPRISE CO., originally classified under Level 2 financial assets measured at fair value through other comprehensive income, were transferred from Level 2 to Level I in 2025 because Chang Guang was listed on the Taipei Exchange on December 10, 2025.

The Company did not have any financial assets and liabilities transferred in the fair value hierarchy in 2024.

~70~

~71~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

5) Statement of changes in Level 3 fair value hierarchy:

Financial assets at fair value through other comprehensive income:

	2025	2024
Balance at beginning of year	$ 96,751	96,007
Changes in other comprehensive income recognized in the current period	(19,686)	744
Balance at end of year	$ 77,065	96,751

aa. Financial risk management

The Combined Company is exposed to credit risk, liquidity risk, and market risk (including exchange rate risk, interest rate risk, and equity instrument price risk) due to its business activities. This note demonstrates the risk information of the aforementioned various risks of the Combined Company, and the Combined Company's policies and procedures for measuring and managing these risks, and quantitative disclosure.

The Board of Directors of the Combined Company is responsible for developing and controlling the risk management policy of the Combined Company. The establishment of the risk management policy is to identify and analyze the risks faced by the Combined Company, set appropriate risk limits and controls, and supervise the compliance of risks and risk limits. Risk management policies and systems are reviewed regularly to reflect changes market conditions and the Combined Company's activities.

The management of the Combined Company supervises and reviews financial activities in accordance with relevant regulations and internal control systems. Internal auditors play a supervisory role and regularly report the review results to the Board of Directors.

I) Credit risk

Credit risk refers to the risk of the financial loss of the Combined Company due to the failure of the counterparty to perform the contractual obligations. As of the financial report date, the main potential credit risk of the Combined Company comes from financial assets such as bank deposits and accounts receivable from customers. The book value of the Combined Company's financial assets represents the maximum credit risk amount.

The deposits and derivative financial products of the Combined Company are traded in banks with good credit, and no significant credit risk will arise.

Due to the characteristics of the industry, the film sheet products of the Combined Company are concentrated in a small number of customers, which makes the Combined Company have a significant concentration of credit risk. As of December 31, 2025 and 2024, the ratio of the top five customers in the balance of accounts

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

receivable (including related parties) was 41% and 46%, respectively. The Combined Company has established a credit policy, according to which each customer's credit status is analyzed individually to determine its credit limit, and the customer's financial status is continuously evaluated on a regular basis and insurance is used to reduce risks.

2) Liquidity Risks

Current risk refers to the risk that the Combined Company fails to deliver cash or other financial assets to pay off financial liabilities and fails to fulfill relevant obligations. The Combined Company regularly monitors current and expected medium and long-term funding needs, and manages liquidity risks by maintaining sufficient cash and cash equivalents and bank financing lines, and ensuring compliance with the terms of the loan contract.

The unused loan amounts of the Consolidated Company as of 31 December, 2025 and 2024 totaled NT$11,634,018 thousand and NT$14,563,991 thousand, respectively.

The following table illustrates the analysis of the remaining contractual maturity of financial liabilities during the agreed repayment period of the Combined Company, including interest payable, which is based on the earliest date on which the Combined Company may be required to repay and is compiled with undiscounted cash flows.

	Contract cash flow	Within 6 months	6-12 months	1-5 years	More than 5 years
December 31, 2025
Non-derivative financial liabilities
Short-term borrowings	$ 3,241,448	2,739,027	502,421	-	-
Accounts payable (including related parties)	2,675,597	2,675,597	-	-	-
Other payables (including related parties)	1,629,063	1,629,063	-	-	-
Long-term borrowings (including loans due within one year)(Floating rate)	7,537,441	222,698	402,463	5,742,929	1,169,351
Lease liabilities (including related parties)	253,790	55,999	54,027	132,872	10,892
Guarantee deposits received	11,151	2,289	2,634	3,245	2,983
	$15,348,490	7,324,673	961,545	5,879,046	1,183,226
Exchange contracts - Net delivery	$ 15,225	15,225	-	-	-
December 31, 2024
Non-derivative financial liabilities
Short-term borrowings	$ 2,210,766	1,706,868	503,898	-	-
Accounts payable (including related parties)	2,991,624	2,991,624	-	-	-
Other payables (including related parties)	1,718,702	1,718,702	-	-	-
Long-term borrowings (including loans due within one year)(Floating rate)	6,675,578	230,852	240,118	5,184,619	1,019,989
Lease liabilities (including related parties)	349,056	56,857	54,211	228,231	9,757
Guarantee deposits received	9,117	3,114	47	3,448	2,508
	$13,954,843	6,708,017	798,274	5,416,298	1,032,254
Forward foreign exchange contracts - Total delivery:
Inflows	$ (491,637)	(491,637)	-	-	-
Outflows	493,207	493,207	-	-	-
Exchange contracts - Net delivery:	31,427	31,427	-	-	-
	$ 32,997	32,997	-	-	-

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The Combined Company does not expect that the occurrence timing of cash flow analyzed on due date would arrive significantly earlier, or the actual amount would significantly vary.

3) Market risk

Market risk refers to the risk that changes in market prices, such as exchange rate, interest rate, and equity instrument price will affect the earnings of the Combined Company or the value of the financial instruments it holds. Financial risk management aims to manage the level of exposure to market risk within an acceptable range and maximize return on investment.

In order to manage market risks, the Combined Company engages in derivative transactions, and its use is regulated by the policies adopted by the Board of Directors. Generally, the Combined Company adopts hedging operations to manage profit and loss fluctuations.

a) Exchange Rate Risk

The Combined Company is exposed to exchange rate risk arising out of sales, procurement, and loan transactions through the functional currency valuation of the Group's enterprises. These non-functional currency transactions are mainly denominated in USD and JPY. The functional currency of the Group enterprises is mainly NTD, followed by RMB and USD.

The hedging strategy of the Combined Company is to sign forward foreign exchange contracts and exchange contracts to manage the exchange rate risk of the net foreign currency positions generated by the sales and purchase transactions that have occurred.

i. Risk and sensitivity analysis of exchange rate risk

The exchange rate risk of the Combined Company mainly comes from foreign currency denominated cash and cash equivalents, accounts receivable (payment) (including related parties), other receivables (payments) (including related parties), bank loans, etc. Foreign currency exchange gains and losses occur at the time of conversion. The book values of major monetary assets and liabilities of the Combined Company that are not denominated in functional currencies at the reporting date are as follows (including monetary items denominated in non-functional currencies that have been offset in the Consolidated Financial Statements):

Currency Unit: Thousands

	2025.12.31
	Foreign Currency	Exchange rate	New Taiwan Dollar	Exchange rate changes	Profit and loss impact
Financial assets
USD	$ 132,235	31.430	4,156,146	1%	41,561
JPY	69,223	0.2007	13,893	1%	139
Financial liabilities
USD	56,718	31.430	1,782,647	1%	17,826
JPY	7,182,536	0.2007	1,441,535	1%	14,415

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

	2024.12.31
	Foreign Currency	Exchange rate	New Taiwan Dollar	Exchange rate changes	Profit and loss impact
Financial assets
USD	$ 141,434	32.785	4,636,914	1%	46,369
JPY	55,527	0.2099	11,655	1%	117
Financial liabilities
USD	56,882	32.785	1,864,876	1%	18,649
JPY	8,067,737	0.2099	1,693,418	1%	16,934

As the Consolidated Company deals in diverse foreign currencies, gains or losses on foreign exchange were summarized as a single amount. For the years ended December 31, 2025 and 2024, for details of the foreign exchange gains (losses), (including both realized and unrealized amount), please refer to Note 6 (25).

b) Interest rate risk

The Combined Company's bank borrowings are all based on floating interest rates. In response to the risk of interest rate changes, the Combined Company mainly adopts regular assessments of bank and currency borrowing rates, and maintains good relationships with financial institutions to obtain lower financing costs. Simultaneously, it cooperates with methods such as strengthening working capital management to reduce the degree of dependence on bank loans and diversify the risk of interest rate changes.

The sensitivity analysis below is determined based on the interest rate risk of non-derivative instruments on the reporting date. For floating-rate liabilities, the analysis method is based on the assumption that the amount of liabilities out of circulation at the reporting date will be out of circulation throughout the year. If the interest rate increases or decreases by 1%, and all other variables remain unchanged, the Consolidated Company's net profit before tax for the year of 2025 and 2024 will decrease or increase by NT$103,756 thousand and NT$84,601 thousand, respectively, which was due to the floating interest rate borrowings of the Consolidated Company.

c) Price of equity instruments

The stocks of domestic listed companies, emerging stock companies, and non-listed companies held by the Combined Company are subject to the risk of price changes in the equity securities market. The Consolidated Company manages and monitors investment performance based on fair value.

~74~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

The sensitivity analysis of the stock price risk of holding the aforementioned domestic listed companies, emerging stock companies, and non-listed companies is based on the fair value changes on the reporting date. If the price of equity instruments had increased/decreased by 5%, other comprehensive income for 2025 and 2024 would have increased/decreased by NT$6,827 thousand and NT$8,076 thousand, respectively. Net gains on financial assets at fair value through profit or loss for 2025 and 2024 would have increased/decreased by NT$5,391 thousand and NT$0 thousand, respectively.

bb. Capital management

The Combined Company plans the capital management of the Combined Company based on the characteristics of the current operating industry and the future development of the Company, as well as factors such as changes in the external environment, to ensure that the Company has the necessary financial resources and operating plans to meet the future needs of working capital, capital expenditures, research and development expenses, debt repayment and dividend expenditures.

cc. Non-cash investing and financing activities

1) For details of the acquisition of the right-of-use assets by the Consolidated Company through leasing in 2025 and 2024, please refer to Note 6 (12).

2) Only part of the received cash of investments activities:

a) Acquisition of property, plant, and equipment

	2025	2024
New additions of property, plant and equipment	$ 1,589,566	2,527,986
Deduction: Payables for equipment at the end of the year	(266,346)	(303,475)
Additions: Payables for equipment at the beginning of the year	303,475	210,743
Net cash outflow on acquisition of property, plant, and equipment of the period	$ 1,626,695	2,435,254

3) The adjustment of liabilities from financing activities is as follows:

	Non-cash changes
	2025.1.1	Cash flow	Addition on lease liabilities	Evaluation adjustment	2025.12.31
Short-term borrowings	$ 2,200,000	1,030,000	-	-	3,230,000
Long-term borrowings (including loans due within one year)	6,260,131	882,275	-	3,194	7,145,600
Guarantee deposits received	9,117	2,034	-	-	11,151
Lease liabilities (including related parties)	338,467	(133,224)	42,010	-	247,253
Total liabilities from financing activities and capitalization	$ 8,807,715	1,781,085	42,010	3,194	10,634,004

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

	2024.1.1	Cash flow	Non-cash changes		2024.12.31
			Addition on lease liabilities	Evaluation adjustment
Short-term borrowings	$ 1,490,000	710,000	-	-	2,200,000
Long-term borrowings (including loans due within one year)	4,798,841	1,461,518	-	(228)	6,260,131
Guarantee deposits received	11,117	(2,000)	-	-	9,117
Lease liabilities (including related parties)	434,417	(106,141)	10,191	-	338,467
Total liabilities from financing activities and capitalization	$ 6,734,375	2,063,377	10,191	(228)	8,807,715

7. Related Party Transactions

a. The names and relationships of related parties

Name of related parties	Relationship with the Combined Company
Qisda Corporation (Qisda)	Parent company of the Combined Company
Visco Vision Inc. (Visco Vision)	Affiliated company of the Combined Company
ViscoTechnologySdn.Bhd.(VVM)	A subsidiary of Visco Vision
Other related parties:
BenQ Foundation	The actual related parties of Qisda
BenQ Foundation for Culture and Education	The actual related parties of Qisda
Darfon Electronics Corp. (Darfon)	Associates of Qisda
AU Optronics Corporation (AUO)	Corporate director of Qisda
AU Optronics (Suzhou) Corporation (AUS)	Subsidiary of AUO
AU Optronics (Kunshan) Corporation	Subsidiary of AUO
AU Optronics (Xiamen) Corporation (AUX)	Subsidiary of AUO
Darwin Precisions Corp.	Subsidiary of AUO
Fortech Electronics (Suzhou) Co., Ltd.	Subsidiary of AUO
Jector Digital Corporation	Subsidiary of AUO
AUO Display Plus Corp.	Subsidiary of AUO
DFI Inc.	Subsidiary of Qisda
Suzhou BenQ Hospital Co., Ltd. (SMH)	Subsidiary of Qisda
BenQ Smart Healthcare (Shanghai) Co., Ltd.	Subsidiary of Qisda
Lily-Medical Corporation	Subsidiary of Qisda
Darly Venture Inc.	Subsidiary of Qisda
Darly Consulting Corporation	Subsidiary of Qisda
BenQ Asia Pacific Corporation	Subsidiary of Qisda
BenQ Singapore Pte Ltd.	Subsidiary of Qisda
ACE Energy Co., Ltd	Subsidiary of Qisda

~77~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

Name of related parties	Relationship with the Combined Company
Metaguru Corporation	Subsidiary of Qisda
BenQ Corp. (New BenQ)	Subsidiary of Qisda
BenQ Technology (Shanghai) Co., Ltd.	Subsidiary of Qisda
BenQ Dialysis Technology Corporation	Subsidiary of Qisda
Partner Tech Corp.	Subsidiary of Qisda
BenQ Medical Technology Corporation	Subsidiary of Qisda
BenQ AB DentCare Corporation	Subsidiary of Qisda
BenQ Healthcare Corporation	Subsidiary of Qisda
BenQ Intelligent Technology (Shanghai) Co., Ltd	Subsidiary of Qisda
MetaAge Corporation	Subsidiary of Qisda
Ace Pillar Co., Ltd.	Subsidiary of Qisda
Qisda Electronics(Suzhou) Co. Ltd.	Subsidiary of Qisda
Data Image Corporation	Subsidiary of Qisda
Aewin Technologies Co., Ltd.	Subsidiary of Qisda
AdvancedTEK International Corp.	Subsidiary of Qisda
Global Intelligence Network Co., Ltd.	Subsidiary of Qisda
Simula Technology Inc.	Subsidiary of Qisda
BenQ Medical (Shanghai) Co., Ltd	Subsidiary of Qisda
Alpha Networks Inc.	Subsidiary of Qisda
Epic Cloud Co., Ltd.	Subsidiary of Qisda
DSIGroup Co., Ltd.	Subsidiary of Qisda
Action Star Technology Co., Ltd.	Subsidiary of Qisda
Standard Technology Corp.	Subsidiary of Qisda
Concord Medical Co., Ltd	Subsidiary of Qisda
Eastech Co., Ltd	Subsidiary of Qisda
Diva Laboratories, Ltd	Subsidiary of Qisda
Transnet Corporation	Subsidiary of Qisda
Golden Spirit Co., Ltd.	Subsidiary of Qisda
Bigmin Bio-Tech Company Ltd.	Subsidiary of Qisda
E-strong Medical Technology Co., Ltd.	Subsidiary of Qisda
Norbel Baby Co., Ltd.	Subsidiary of Qisda
Concord HealthCare Co., Ltd.	Subsidiary of Qisda
Transpak Equipment Corporation	Subsidiary of Qisda
Chan Guare Industry Co., Ltd.	Subsidiary of Qisda
Naisen Kelin Industry Co., Ltd.	Subsidiary of Qisda

~78~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

b. Significant transactions with related parties

1) Sales revenue

	2025	2024
Other related parties:
AUO	$ 3,433,243	3,927,823
AUS	926,098	868,678
AUX	406,132	545,489
Others	116,293	79,379
Associate - VVM	207,510	205,090
Associate - Visco Vision	321	428
Parent Company	1,328	1,323
	$ 5,090,925	5,628,210

The transaction price sold to related parties is not significantly different from the general sales price, except that there is no general transaction price to compare due to the different specifications of some commodities. The collection period is 60~120 days, which is not significantly different from ordinary transactions.

2) Purchases

	2025	2024
Associate - Visco Vision	$ 433,996	440,584

The price at which the Combined Company purchases goods from related parties cannot be compared with the general transaction price due to different product specifications. It is performed in accordance with the agreed purchase price and conditions.

3) Property transaction

The acquisition prices of various assets acquired by the Combined Company from related parties are summarized as follows:

Related parties category	Account item	2025	2024
Parent Company	Intangible assets	$ 150	150
Other related parties	Intangible assets	12,321	11,734
Other related parties	Property, plant and equipment	24,988	2,190
		$ 37,459	14,074

~79~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

4) Leases

The Combined Company leases factories and offices from AUO, and the rent is paid on a monthly basis with reference to the rent prices in the neighboring areas. The recognized interest expenses related to lease liabilities were in 2025 and 2024 were NT$4,402 thousand and NT$6,086 thousand respectively. The balance of lease liabilities as of December 31, 2025 and 2024 was NT$ 194,527 thousand and NT$289,379 thousand, respectively.

The Combined Company leases workshops and offices to other related parties, with rental income (recorded under operating income) summarized as follows:

	2025	2024
Other related parties	$ 673	949

5) Donation

The Consolidated Company has contributed donations to BenQ Foundation for Culture and Education in 2025 and 2024, with the amounts of NT$1,128 thousand and NT$1,094 thousand, respectively.

The Combined Company has contributed donation to BenQ Foundation for Culture and Education in 2025, with the amount of NT$2,500 thousand.

6) Operating costs and expenses

The detailed breakdown of operating costs and expenses incurred by the Company for services such as technical consulting, marketing promotion, and advances made by related parties is as follows:

Account item	Related parties category	2025	2024
Operating costs	Parent Company	$ -	377
	Other related parties	5,809	4,086
Operating expenses	Parent Company	6,283	6,916
	Other related parties	9,956	10,322
	Associates	-	4
		$ 22,048	21,705

7) Amounts receivable from related parties

In summary, the details of the accounts receivable from related parties of the Combined Company are as follows:

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

Account item	Related parties category	2025.12.31	2024.12.31
Accounts receivable - related parties, net	Other related parties - AUO	$ 841,821	1,010,257
	Other related parties - AUS	112,010	283,434
	Other related parties - AUX	122,500	153,949
	Other related parties - others	36,754	37,887
	Associate - VVM	32,725	36,411
	Other associates	-	224
	Parent Company	244	455
	Subtotal	1,146,054	1,522,617
Other receivables - related parties	Other related parties	-	188
		$ 1,146,054	1,522,805

The Combined Company sells the account receivables from related parties to the financial institution in a non-recourse manner in accordance with the agreement of the account receivables sale contract signed with the financial institution. The relevant information related to the transfer of creditor's rights in account receivables that meets the derecognition conditions is as follows:

2025.12.31
Underwriter	Sale amount	Amount still available in advance	Advance amount	Shown as other receivables (Note 6 (6))	Interest rate range	Other important matters
CTBC Bank Co., Ltd.	$ 146,11	-	131,500	14,611	2.24%	N/A

8) Payables to related parties

In summary, the details of the amounts due to related parties by the Combined Company are as follows:

Account item	Related parties category	2025.12.31	2024.12.31
Accounts payable - related parties	Associates	$ 81,573	64,977
Other payables - related parties	Other related parties	30,603	26,453
	Parent Company	1,475	1,250
	Subtotal	32,078	27,703
		$ 113,651	92,680

c. Compensation of major managerial personnel

	2025	2024
Short-term employee benefits and compensation	$ 44,898	51,597
Retirement benefits	225	324
	$ 45,123	51,921

~81~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

8. Pledged Assets

The details of the carrying value of pledged assets by the Combined Company were as follows:

Asset name	Purpose of Pledge	2025.12.31	2024.12.31
Land, buildings and structures	Pledges of short and long-term borrowings	$ 826,986	840,957
Other financial assets - current	Customs deposits	11,369	14,736
Other financial assets - current - deposit certificates	project guarantee deposit	4,608	4,608
Other financial assets - non-current - deposit certificates	Performance guarantee deposits	7,760	10,452
		$ 850,723	870,753

9. Material Contingent Liabilities and Unrecognized Contractual Commitments

Significant unrecognized contract commitment:

	2025.12.31	2024.12.31
Unused letters of credit issued	$ 629,692	741,016
Signed and unpaid major engineering and equipment payments	735,176	1,377,832

10. Significant Loss from Disaster: None.

11. Significant Subsequent Events: None.

12. Others

a. The functions of employee benefits, depreciation, and amortization expenses are summarized as follows:

| Function
Nature | 2025 | | | 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Operating costs | Operating expenses | Total | Operating costs | Operating expenses | Total |
| Employee benefits expenses | | | | | | |
| Salary expenses | 1,741,037 | 1,003,747 | 2,744,784 | 1,652,511 | 968,534 | 2,621,045 |
| Labor insurance and national health insurance | 155,634 | 78,553 | 234,187 | 146,218 | 74,018 | 220,236 |
| Pension expenses | 75,526 | 51,229 | 126,755 | 73,709 | 46,651 | 120,360 |
| Other employee benefits expenses | 118,083 | 41,057 | 159,140 | 111,551 | 38,955 | 150,506 |
| Depreciation expenses | 930,850 | 175,904 | 1,106,754 | 794,226 | 165,250 | 959,476 |
| Amortization expenses | 27,558 | 34,242 | 61,800 | 26,306 | 38,992 | 65,298 |

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

13. Supplementary Disclosures

a. Information on significant transactions

In accordance with the requirements of the regulations in 2025, the Consolidated Company shall re-disclose the relevant information of significant transactions as follows:

1) Loaning funds to others:

Unit: NTD Thousands

No.	Lending company	Lending subject	Contact accounts	Whether he/she is related party	Highest endorsement or guarantee amount for current period	Balance at end of year	Actual amount expenditure	Interest rate range	Nature of financing (Note 4)	Transaction amount	Reason for financing	Allowance for allowance for loss amount	Collateral		Limit on loans granted to a single party	Fund loan and total limit	Note
													Name	Value
1	BMS	BenQ Materials (Wuhu) Corporation	Other -receivables - related parties	Yes	1,213,356 (RMB 265,000)	1,191,228 (RMB 265,000)	675,629 (RMB 150,300)	1.30%	2	-	Operating turnover	-		-	2,008,447	2,008,447	(Note 1)
2	BMS	BenQ Medical Technology (Suzhou) Co., Ltd.	Other -receivables - related parties	Yes	457,870 (RMB 100,000)	449,520 (RMB 100,000)	187,450 (RMB 41,700)	1.30%	2	-	Operating turnover	-		-	2,008,447	2,008,447	(Note 1)
3	BMS	BenQ Medical Aesthetic Materials Technology (Wuhu) Co., Ltd.	Other -receivables - related parties	Yes	22,476 (RMB 5,000)	22,476 (RMB 5,000)	8,990 (RMB 2,000)	1.30%	2	-	Operating turnover	-		-	2,008,447	2,008,447	(Note 1)
4	Web-Pro	Web-Pro(Vietnam) Co., Ltd.	Other -receivables - related parties	Yes	388,310 (USD 13,000)	188,580 (USD 6,000)	157,150 (USD 5,000)	1.85%	2	-	Operating turnover	-		-	436,281	872,562	(Note 2)
5	DTB	BenQ Medical Technology (Suzhou) Co., Ltd.	Other -receivables - related parties	Yes	40,457 (RMB 9,000)	40,457 (RMB 9,000)	40,457 (RMB 9,000)	1.30%	2	-	Operating turnover	-		-	46,132	46,132	(Note 3)

Note 1: The total amount of the BMS fund loan and the 100%-owned subsidiary of the ultimate parent company and the fund loan and limit for individual objects are the net value of the latest financial statement of BMS with the certificate of accountant.
Note 2: The maximum limit for the total amount of the Web-Pro fund loan is set at 40% of the most recent audited net asset value of the financial statements, certified by the accountant. Individual loan amounts shall not exceed 20% of the most recent audited net asset value of the financial statements, certified by the accountant.
Note 3: The total amount of the DTB fund loan and the 100%-owned subsidiary of the ultimate parent company and the fund loan and limit for individual objects are the net value of the latest financial statement of DTB with the certificate of accountant.
Note 4: Those who have business dealings with the nature of capital loans are 1, and 2 for those who require short-term financing.
Note 5: It has already been written off during compilation of the Consolidated Financial Statements.

2) Endorsements/guarantees provided for others: None.

3) Material marketable securities held at the end of the period (excluding investment in subsidiaries, associates, and joint equity):

Name of Company Held	Type and Name of Marketable Securities	Relationship with the securities issuer	Listed accounts	Ending Balance				Highest Ownership Level or Capital Invested during the Period		Note
				Shares	Book amount	%	Fair value	Shares	%
The Company	Shares of Biodenta Corporation	-	Financial assets at fair value through profit or loss	23	(Note)	2.50%	-	23	2.50%	-
The Company	Shares of Suregiant Technology Co., Ltd.	-	Financial assets at fair value through profit or loss	249	107,827	1.13%	107,827	249	1.13%	-
The Company	Shares of Lagis Corporation	-	Financial assets at fair value through other comprehensive income	1,680	59,472	4.63%	59,472	1,680	5.24%	-
The Company	Shares of Summed Corporation	-	Financial assets at fair value through other comprehensive income	300	1,760	2.73%	1,760	300	2.73%	-
The Company	Shares of Cuumed Catheter Medical Co., Ltd.	-	Financial assets at fair value through other comprehensive income	3,429	75,305	8.76%	75,305	3,429	8.76%	-

(Note): It was all recognized as impairment losses.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

4) Those who purchase or sell with a related party in the amount of NT$100 million or more than 20% of the paid-in capital:

Vendor/ Customer	Counter-party	Relationship	Transaction details				Unusual Transaction Terms and Reasons		Notes and accounts receivable (payable)		Note
			Purchase (sale) goods	Amount	Ratio to total purchase (sell)	Credit period	Price	Credit period	Balance	Ratio to total notes or accounts receivable (payable)
The Company	AUO	Other related parties	Sale	3,433,243	24%	OA90	(Note 1)	(Note 3)	841,821	30%
The Company	AUS	Other related parties	Sale	926,098	6%	OA90	(Note 1)	(Note 3)	112,010	4%
The Company	BMM	Parent company and subsidiaries	Sale	627,692	4%	OA180	(Note 1)	(Note 3)	115,435	4%	(Note 4)
The Company	AUX	Other related parties	Sale	406,132	3%	OA90	(Note 1)	(Note 3)	122,500	4%
The Company	Sigma-Medical	Parent company and subsidiaries	Sale	231,557	2%	OA180	(Note 1)	(Note 3)	27,873	1%	(Note 4)
The Company	VVM	Associates	Sale	207,510	1%	OA90	(Note 1)	(Note 3)	32,725	1%
The Company	BMS	Parent company and subsidiaries	Purchases	(959,232)	9%	OA180	(Note 2)	(Note 3)	(786,263)	24%	(Note 4)
The Company	Visco Vision	Associates	Purchases	(433,996)	4%	OA60	(Note 2)	(Note 3)	(81,573)	2%
The Company	BMW	Parent company and subsidiaries	Purchases	(153,140)	1%	OA180	(Note 2)	(Note 3)	(76,092)	2%	(Note 4)

Note 1: The price of the Company's sales to related parties is not significantly different from the general sales except that there is no general transaction price to compare due to the different specifications of some products.
Note 2: The Company's purchase price from related parties is incomparable with the general transaction price due to different product specifications. It is processed in accordance with the agreed purchase price and conditions.
Note 3: There is no significant difference between the transaction price and general transaction.
Note 4: It has already been written off during compilation of the Consolidated Financial Statements.
Note 5: For purchases and sales with subsidiaries, only the amount of the parent company will be disclosed, and the amount of its subsidiary will not be restated.

5) Receivables from related parties amounting to NT$100 million or 20% of the paid-in capital or more:

The companies that record such transactions as receivables	Counter-party	Relationship	Balance Dues from Related Parties	Turnover rate (Note 1)	Overdue accounts receivables from related parties		Subsequently Recovered Amount from Related Party	Allowance for allowance for loss amount
					Amount	Way of disposal
The Company	AUO	Other related parties	841,821	3.71	-	-	243,653	-
The Company	AUX	Other related parties	122,500	2.94	-	-	29,631	-
The Company	AUS	Other related parties	112,010	3.42	-	-	-	-
The Company (Note 2)	BMM	Parent company and subsidiaries	115,435	4.19	-	-	-	-
BMS (Note 2)	The Company	Parent company and subsidiaries	786,263	1.31	212,695	-	40,656	-

Note 1: The turnover rate is calculated by adding back the amount of account receivables sold to financial institutions.
Note 2: It has already been written off during compilation of the Consolidated Financial Statements.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

6) Business relationships and significant intercompany transactions among parent and subsidiaries:

No. (Note 1)	Counter-party	Transaction object	The type of relations with transaction party (Note 2)	Transaction details (Note 3)			Ratio to consolidated total operating income or total assets (Note 4)
				Accounts	Amount	transactions with controlling companies
0	The Company	BMM	1	Sale	627,692	OA180	3.52%
0	The Company	Sigma-Medical	1	Sale	231,557	OA180	1.30%
1	BMS	The Company	2	Processing income	959,232	OA180	5.38%
1	BMS	The Company	2	Accounts receivable	786,263	OA180	3.39%

Note 1: Instruction for numbering.
1. 0 represents the Company.
2. Subsidiaries are sorted in a numerical order starting from 1.

Note 2: The type of relations with transaction party is marked as follows:
1. Parent company to subsidiaries.
2. Subsidiaries to parent company.
3. Subsidiaries to subsidiaries

Note 3: For business relations and important transactions between parent-subsidiary companies, only sales and accounts receivable amounting to 1% of consolidated revenue or assets are disclosed, and the corresponding imports and accounts payable are omitted.

Note 4: Divide the transaction amount by the consolidated operating income or consolidated total assets.

Note 5: It has already been written off during compilation of the Consolidated Financial Statements.

b. The information on the reinvestment business (excluding the mainland invested company):

The information on the reinvestment business of the Consolidated Company in 2025 is as follows (excluding the mainland invested company):

Investment company name	Investee companies	Location	Major business items	Original investment amount		Hold at the end of the period			Highest Ownership Level or Capital Invested during the Period		Profit or Loss of Invested Company in the Current Period	Investment Profit/Loss Recognized in the Current Period	Note
				End of this period	End of last year	Shares	Ratio (%)	Book amount	Shares	%
The Company	BMLB	Malaysia	Holding company	499,790	499,790	14,082	100.00%	1,930,227	14,082	100.00%	125,058	125,058	(Note 1)
The Company	Sigma-Medical	Taiwan	Sales of medical equipment	231,727	231,727	2,000	100.00%	60,187	2,000	100.00%	42,645	42,645	(Note 1)
The Company	Visco Vision	Taiwan	Manufacturing and sales of contact lenses	168,771	168,771	9,334	14.82%	670,713	9,334	14.82%	868,795	128,305
The Company	Cenefom	Taiwan	Development, manufacturing, and sales of medical equipment	272,968	272,968	11,646	50.98%	186,412	11,646	50.98%	(24,470)	(15,308)	(Note 1)
The Company	Genejet	Taiwan	Development, manufacturing, and sales of medical equipment	50,460	50,460	4,270	79.35%	42,979	4,270	79.35%	(1,238)	(2,708)	(Note 1)
The Company	Web-Pro	Taiwan	Development, manufacturing, and sales of healthcare materials and equipment	3,161,999	3,161,999	35,700	51.00%	2,383,582	35,700	51.00%	101,431	37,318	(Note 1)
The Company	Buticon International Corporation	Taiwan	Sales and development of medical equipment	6,000	6,000	217	20.00%	-	217	20.00%	(528)	-
The Company	Coatmed	Taiwan	Sales of medical equipment	5,980	5,980	598	5.99%	4,410	598	7.48%	(5,792)	(651)
Web-Pro	WPSG	Singapore	Holding company	895,139	895,139	30,000	100.00%	650,399	30,000	100.00%	(16,371)	-	(Note 1)
WPSG	WPVN	Vietnam	Manufacturing and sales of healthcare materials and equipment	926,053	926,053	-	100.00%	644,976	-	100.00%	(15,454)	-	(Note 1)

Note I: It has already been written off during the compilation of the Consolidated Financial Statements.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

c. Information on investments in mainland China:

1) Information on reinvestments in mainland China:

Investee companies in mainland	Major business items	Paid-in Capital	Way of investments (Note 1)	Cumulative Investment Amount Remitted from Taiwan - Beginning of the Period	Investment amount remitted or received for the period		Cumulative investment amount remitted from Taiwan - End of the period	Profit or Loss of Invested Company in the Current Period	Percentage of ownership through the Company's direct or indirect investment	Highest Ownership Level or Capital Invested during the Period		Investment profits (losses) recognized for the period	Carrying Amount as of December 31, 2019	Investment profits repatriated by the end of the current period
					Remit	Receive				Shares	%
BenQ Materials Co., Ltd. (BMS)	Processing of film sheet products	251,440 (USD 8,000)	(3)	251,440 (USD 8,000)	-	-	251,440 (USD 8,000)	30,372	100.00%	-	100.00%	30,372 (Note 2)	2,008,447 (Note 4)	-
Dason Biomedical (Suzhou) Co., Ltd. (DTB)	Manufactures and sales of related products such as medical devices	49,447 (RMB 11,000)	(2)	-	-	-	-	2,159	100.00%	-	100.00%	2,159 (Note 2)	46,132 (Note 4)	-
BenQ Materials (Wuhu) Corp. (BMW)	Manufacture and sales of film sheet and cosmetic-related products	359,616 (RMB 80,000)	(3)	179,808 (RMB 40,000)	-	-	179,808 (RMB 40,000) (Note 3)	98,158	100.00%	-	100.00%	98,109 (Note 2)	(141,232) (Note 4)	-
BenQ Materials Medical (Suzhou) Co., Ltd. (BMM)	Sales and manufacturing of medical equipment	67,428 (RMB 15,000)	(2)	-	-	-	-	631	100.00%	-	100.00%	631 (Note 2)	56,104 (Note 4)	-
BenQ Aesthetic Medicine Material (Wuhu) Corp. (BME)	Manufacture and sales of cosmetic-related products	22,476 (RMB 5,000)	(2)	-	-	-	-	(2,614)	100.00%	-	100.00%	(2,614) (Note 2)	18,901 (Note 4)	-
Suzhou Sigma-Medical Co., Ltd. (Suzhou Sigma-Medical)	Sales of medical equipment	-	(1)	22,692 (USD 722)	-	1,000 (USD 34)	-	-	(Note 5)	-	100.00%	(5) (Note 2)	- (Note 4)	-

Note 1: Ways of investment are as follows:
(1) Direct investment in mainland companies.
(2) Reinvestment the surplus of BMLB to China.
(3) Investing in mainland companies through the establishment of companies in the third region.

Note 2: The investment profits and losses are recognized based on the financial statements checked by the Taiwanese parent company certified accountant.

Note 3: Excluding the reinvestment of RMB$10,950 thousand reinvested by BMLB.

Note 4: It has already been written off during compilation of the Consolidated Financial Statements.

Note 5: Suzhou Sigma-Medical completed its company deregistration on June 30, 2025, and completed the liquidation of the company and remitted the remaining assets on July 25, 2025.

2) Limits on reinvestments in mainland China:

Unit: NTD Thousands

Company name	Cumulative investment amount remitted from Taiwan to the mainland at the end of the period	Amount of Investment Approved by the Ministry of Economic Affairs Investment Committee	Upper Limit on Investment Authorized by MOEAIC
The Company	431,248 (RMB 40,000 and USD 8,000)	570,374 (RMB 70,950 and USD 8,000)	(Note)

It is converted according to the exchange rate of USD to NTD of 31.430 and RMB to NTD of 4.4952 at the end of the period.

(Note) The Company has already acquired the certificate of corporate operation headquarters, so there is no limit on investment in mainland China.

3) Material transactions:

Please refer to the "Information on significant transactions" section for direct or indirect transactions between the Combined Company and investees in mainland China for 2025, which have been written off during the preparation of the Consolidated Financial Statements.

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

14. Segment Information

The reportable business segments of the Consolidated Company are the film sheet segment and the medical segment. The film sheet segment is mainly engaged in the sales, manufacturing and research, and development of various electronic chemical membrane products. The medical segment is primarily involved in the sales, manufacturing, and research and development of various medical-related products.

The accounting policies of the transportation segment, except for operating expenses and non-operating income (expenses) that cannot be directly attributable to each operating department, it is calculated based on the proportion of the revenue (or headcount) of each operating segment to the total revenue (or headcount). The income tax expense is not apportioned but directly included outside the film sheet segment, and the rest is the same as the summary of the important accounting policies described in Note 4. The profit and loss of the operating segment of the Consolidated Company is measured by the after-tax profit and loss and used as the basis for evaluating performance. The Combined Company deems the inter-unit sales and transfer as transaction with third parties.

The information and adjustments to operating units of the Combined Company are as follows:

	2025
	Film sheet segment	Medical segment	Adjustments and elimination	Total
Revenue from external customers	$ 12,395,116	5,450,869	-	17,845,985
Intersegment revenue	-	-	-	-
Total revenue	$ 12,395,116	5,450,869	-	17,845,985
After-tax net (loss)profit	$ (670,232)	326,204	-	(344,028)
	2024
	Film sheet segment	Medical segment	Adjustments and elimination	Total
Revenue from external customers	$ 13,081,139	5,507,839	-	18,588,978
Intersegment revenue	-	-	-	-
Total revenue	$ 13,081,139	5,507,839	-	18,588,978
After-tax net (loss)profit	$ (163,087)	411,996	-	248,909

~87~

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

a. Product and service information

The Combined Company's revenue information from external customers is as follows:

Product and service name	2025	2024
Functional sheet	$ 12,395,116	13,081,139
Medical Products	5,450,869	5,507,839
	$ 17,845,985	18,588,978

b. Regional information

The Combined Company distinguishes the following information with the revenue based on geographic location of customers and non-current assets based on geographical location of assets.

Region	2025	2024
Revenue from external customers:
China	$ 9,227,511	9,674,873
Taiwan	5,322,535	5,595,225
Japan	837,477	900,753
United States	855,511	1,001,547
Others	1,602,951	1,416,580
	$ 17,845,985	18,588,978
Region	2025.12.31	2024.12.31
Non-current assets:
Taiwan	$ 11,794,838	11,115,555
China	960,415	1,060,392
Vietnam	593,673	718,174
	$ 13,348,926	12,894,121

Non-current assets include real estate, plant and equipment, right-of-use assets, investment real estate, intangible assets and other assets, but non-current assets that do not include financial instruments, deferred income tax assets and assets for retirement benefits.

c. Major customer information

	2025
Customer A	$ 3,433,243
	2024
Customer A	$ 3,927,824

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BMC — Audit Report / Information 2025

52730_rns_2026-04-27_4903bf58-751d-4ec1-80f0-a652b59fcca1.pdf

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements and Independent Auditors' Report

Statement of Declaration

Opinions on the audit

Basis of opinions on the audit

Key Audit Matters

Other Matters

The Management's Responsibility and Governing Body of the Consolidated Financial Statements

The Accountants' Responsibilities in Auditing the Consolidated Financial Statements

Notice to Readers

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets (continued)

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

BENQ MATERIALS CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (continued)

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

4. Summary of Material Accounting Policies

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

g. Financial Instruments

I) Financial assets

a) Financial assets measured at amortized cost

b) Financial assets at fair value through other comprehensive income

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

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1) Lessee

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t. Business mergers

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

5. The Primary Sources of Uncertainties in Material Accounting Judgments, Estimates, and Assumptions

Notes to the consolidated financial report of BenQ Materials Corporation and its subsidiaries (continued)

6. Descriptions of Material Accounting Items

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I) Affiliated companies:

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I. Right-of-use Assets

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s. Employee benefits

1) Defined benefit plans

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BMC Audit Report / Information 2025