Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated financial statements and Auditor's Report
2025 and 2024
(Stock Code: 1762)

Address: 1, TUNG-HSING ST., SHU-LIN DIST., NEW TAIPEI CITY
Tel: (02) 8684-3318

For the convenience of readers and for information purpose only, the 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. In the event of any discrepancy between the English version and the original Chinese version or any differences in the interpretation of the two versions, the Chinese-language auditors’ report and financial statements shall prevail.

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Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
The 2025 and 2024 Consolidated Financial Report and Independent Auditors’ Report
Table of Contents

Item	Page
1. Cover	1
2. Table of Contents	2 ~ 3
3. Declaration	4
4. Auditor's Report	5 ~ 9
5. Consolidated Balance Sheet	10 ~ 11
6. Consolidated comprehensive income statements	12 ~ 13
7. Consolidated statement of changes in equity	14
8. Consolidated cash flow statement	15 ~ 16
9. Notes to consolidated financial statement	17 ~ 62
(1) Organization and operations	17
(2) Financial reporting date and procedures	17
(3) Application of new and revised standards and interpretation	17 ~ 18
(4) Summary of significant accounting policies	19 ~ 27
(5) Main source of significant accounting judgment, estimates and assumptions uncertainty	27~28
(6) Summary of significant accounting titles	28 ~ 49
(7) Related party transactions	49 ~ 50
(8) Pledged assets	51

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Item	Page
(9) Significant contingent liabilities and unrecognized contractual commitments	51
(10) Losses due to major disasters	51
(11) Major post-balance sheet events	51
(12) Other	51 ~ 60
(13) Notes of disclosure	60
(14) Segment information	60 ~ 62

Chunghwa Chemical Synthesis & Biotech Co., Ltd.

The Affiliate’s Declaration of Consolidated Financial Statements

In 2025 (from January 1 to December 31, 2025), the companies that should be included in the consolidated financial reports of affiliated companies based on the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" and the companies that should be included in the consolidated financial reports of subsidiaries based on the "Consolidated and separate financial statements" of Section 10 of International Financial Reporting Standards were the same. The related information that should be disclosed in the consolidated financial statements of affiliated companies are also already disclosed in the consolidated financial reports for subsidiaries, so that the consolidated financial statements of affiliated companies would not be published separately.

Declared by:

Company name: Chunghwa Chemical Synthesis & Biotech Co., Ltd.

March 30, 2026

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Auditor's Report
(2026) Cai-Shen-Bao-Zi No. 25004038

To Chunghwa Chemical Synthesis & Biotech Co., Ltd.,

Audit opinion

We have audited the accompanying proprietary consolidated balance sheet of Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries (hereinafter referred to as Chunghwa Group) as of December 31, 2025 and 2024 and the related consolidated statements of income, of changes in shareholders' equity and of cash flows and Notes to consolidated financial statement (including significant accounting policies) for the years then ended.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Chunghwa Group as of December 31, 2025 and 2024, and the results of its operations and its cash flows for the years then ended in conformity with the "Regulations Governing the Preparation of Financial Reports by Securities Issuers," and International Financial Reporting Standards (IFRS) that was approved and announced effective by the Financial Supervisory Commission, International Accounting Standards, Interpretations, and Notices (IFRS), International Accounting Standards (IAS), Interpretation (IFRIC) and Interpretative Announcement (SIC).

Basis of an audit opinion

We conducted our audit of the financial statements in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Auditing Standards. The responsibilities of the independent auditor under these standards will be further explained in the paragraph of "independent auditor's responsibility for consolidated financial statements." The personnel of the CPA Firm subject to the independence requirement have acted independently from the business operations of Chunghwa Group in accordance with the Code of Ethics and with other responsibilities of the Code of Ethics performed. We believe that our audit provides a reasonable basis for our opinion.

Key Audit Matters

The "key audit matters" means that the independent auditor has used their professional judgment to audit the most important matters on the 2025 consolidated financial statements of Chunghwa Group. The key audit matters have been responded to in the process of auditing the consolidated financial statements as a whole and forming an audit opinion; therefore, the independent auditor does not express an opinion on these matters separately.

The key audit items from the 2025 consolidated financial statement of Chunghwa Chemical Synthesis and Biotech Co., Ltd. are presented below:

Accounting assessment of inventory valuation

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Description of the matter

See Note 4 (12) in the consolidated financial report regarding the accounting policy on inventory valuation, Note 5 (2) for the accounting assessment and hypothetical uncertainty on inventory valuation, and Note 6 (4) for the description of the inventory account.

Chunghwa Group is engaged mainly in the production and sale of active pharmaceutical ingredients. Since active pharmaceutical ingredients are in a severely competitive market and sensitive to shelf life, the risk of losses from inventory devaluation or obsolescence is higher. Since the inventories involve large amounts of money and large numbers of items that require laborious work by human beings to identify expired or damaged goods, we regard the assessment of allowance to reduce inventory to market as a key audit item.

The responsive auditing process

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

Assessing the reasonableness of policy on allowance to reduce inventory to market in accordance with our understanding of the Company's operations and the nature of the business.
Performing sampling tests to examine if the market price of net realized value is consistent with the Company's policy, and randomly examining the accuracy of the selling price of individual inventory parts and the way net realized value is calculated.
Obtain out-of-date inventory details that are identified by the management, check the related information and verify the account records.

Checking whether the time point of sales income recognition is appropriate

Description of the matter

For the accounting policy on the recognition of income, please refer to Note 4 (26) of the consolidated financial statement. For information on income accounts, please refer to Note 6 (16) of the consolidated financial statement. As stated in the accounting policies, the sales revenue is recognized when products are delivered to customers who have discretionary power in channels and prices of products sold and Chunghwa Chemical Synthesis and Biotech has no outstanding performance obligations which may affect customers' acceptance of products. As exports are the main source of income for Chunghwa Group, the terms of business agreed upon between the Company and its customers are the basis of income assessment. However, such a process often involves a lot of manpower for verification and may lead to inappropriate income recognition time points. Therefore, we regard the sales income recognition time points as a key audit item.

The responsive auditing process

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

Understand and evaluate the Group’s operating process and internal controls at the

cut-off points of the revenue recognition to assess the effectiveness of management’s control over sales revenue recognition.

The execution of sales and income over a certain period before and after the time periods covered in the financial report were examined with the packing lists, customer orders and declaration forms in order to confirm that income was recognized at appropriate periods.

Other matters - individual financial report

Chunghwa Group has compiled its 2025 and 2024 individual financial statements, for which we issued unqualified opinion.

The responsibility of the management and management units to the consolidated financial statements

The responsibility of the management is to have the consolidated financial statements presented fairly, in all material respects, in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers”, and International Financial Reporting Standards (IFRS) that was approved and announced effective by the Financial Supervisory Commission, International Accounting Standards, Interpretations, and Notices (IFRS), International Accounting Standards (IAS), Interpretation (IFRIC) and Interpretative Announcement (SIC); also, maintain the necessary internal controls related to the consolidated financial statements in order to ensure that the consolidated financial statements are free of any material misstatement arising from fraud or errors.

While preparing the consolidated financial statements, the management’s responsibility also includes assessing the continuing operation of Chunghwa Group, the disclosure of the relevant matters, and the adoption of the accounting base for continuing operation, unless the management intends to liquidate Chunghwa Group or cease the business operation, or there is lack of any alternative except for liquidation or suspension.

The governance units (including the Audit Committee) of Chunghwa Group are responsible for supervising the financial reporting process.

The responsibilities of the independent auditor to the consolidated financial statements

The purpose of the independent auditor’s auditing the consolidated financial statements is to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement arising from fraud or errors and with an audit report issued. Reasonable assurance means a high degree of assurance. However, the audit conducted in accordance with auditing standards of the R.O.C. does not guarantee having any material misstatement in the consolidated financial statements detected. Material misstatement could arise from fraud or errors. If the misstated amount or aggregated amount is reasonably expected to affect the economic decisions made by the users of the consolidated financial statements, it is considered significant.

We used professional judgment and suspicion during the audit in accordance with the auditing standards of the Republic of China. The independent auditor also performs the

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following tasks:

Identify and evaluate the risk of material misstatement arising from fraud or errors of the consolidated financial statements; design and implement proper responsive measures to the risk assessed; also, obtain sufficient and adequate audit evidences for forming an audit opinion. The risk of fraud may involve conspiracy, forgery, deliberate omission, false declaration, or violating internal control; therefore, the risk of material misstatement arising from the undetected fraud is higher than that caused by errors.
Obtain necessary understanding on the internal control related to the audit in order to design appropriate audit procedures under the circumstance, but the purpose is not to express an opinion on the effectiveness of the internal control of Chunghwa Group.
Assess the appropriateness of the accounting policies adopted by the management; also, the reasonableness of the accounting estimates and related disclosures made.
Base on the audit evidence obtained to make conclusions on the suitability of the accounting base for continuing operation base adopted by the management and whether or not the events or circumstances causing significant doubts to the continuing operation ability of Chunghwa Group are with significant uncertainties. If the independent auditor believes that such events or circumstances are with significant uncertainties, it is necessary to remind the users of the consolidated financial statements in the audit report to pay attention to the relevant disclosure or to revise the audit opinion when such disclosures are inappropriate. The conclusion of the independent auditor is based on the audit evidence obtained as of the audit report date. However, future events or circumstances may result in the inability of Chunghwa Group to continue operating.
Assess the overall expression, structure, and content of the consolidated financial statements (including the relevant notes) and whether or not the relevant transactions and events in the consolidated financial statements are presented fairly.
Obtain sufficient and appropriate audit evidence on the financial information of business entities within the Group in order to express an opinion on the consolidated financial statements. The independent auditor is responsible for guiding, supervising, and implementing the audit of the Group; also, is responsible for forming an opinion on the audit of the Group.

The matters communicated by the independent auditor to the governing unit include the scope and timing of the planned audit, and the significant findings (including the major nonconformities of internal controls identified in the auditing process).

The independent auditor has provided the declaration of independence of the CPA Firm personnel subject to the Code of Ethics to the governing unit; also, it has communicated with the governing unit regarding the relationship and other matters (including the relevant protection measures) that may affect the independence of the independent auditor.

The independent auditor has based on the communications with the governing unit to determine the key audit matters to be performed on the 2025 consolidated financial

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statements of Chunghwa Group. The independent auditor shall state the key audit matters in the audit report except for the specific matters prohibited by law from being disclosed, or, in rare cases; the independent auditor decides not to have specific matters communicated in the audit report since the negative effect of such disclosure can be reasonably expected to be greater than the increase of public interest.

PricewaterhouseCoopers, Taiwan

March 30, 2026

Notice to Readers

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

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

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Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated Balance Sheet
December 31, 2025 and 2024
Unit: NTD thousand

Assets	Additional notes	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents	6 (1)	$ 216,437	5	$ 222,275	5
1140	Contract assets - Current	6 (16)	397	-	3,458	-
1170	Net accounts receivable	6(3)	83,513	2	177,217	4
1180	Account receivables-Related Parties-net		8,899	-	13,998	-
1200	Other receivable	7	3,802	-	4,630	-
1220	Current income tax assets		21,210	1	8,367	-
130X	Inventory	6 (4)	717,938	17	968,998	20
1410	Prepayments		6,687	-	42,282	1
11XX	Total of Current Assets		1,058,883	25	1,441,225	30
Non-Current assets
1510	Financial assets that are measured at fair value through profit or loss-non-current	6 (2)	32,835	1	17,433	-
1550	Investments accounted for by the equity method	6 (5)	1,020,613	24	984,386	21
1600	Property, plant, and equipment	6 (6)	2,056,245	47	2,192,953	46
1755	Right-of-use assets	6 (7)	4,316	-	6,514	-
1760	Real property for investment- net	6 (8)	10,700	-	10,700	-
1780	Intangible assets		1,537	-	3,768	-
1840	Deferred income tax assets	6 (22)	52,275	1	35,547	1
1900	Other current non-assets	6 (12) and 8	79,949	2	70,212	2
15XX	Total of Non-Current Assets		3,258,470	75	3,321,513	70
1XXX	Total assets		$ 4,317,353	100	$ 4,762,738	100

(Continued next page)

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated Balance Sheet
December 31, 2025 and 2024
Unit: NTD thousand

	Liabilities and equity	Additional notes	December 31, 2025		December 31, 2024
			Amount	%	Amount	%
Current liabilities
2100	Shot-term borrowings	6 (9)	$ 200,000	5	$ 150,000	3
2130	Contract liabilities - Current	6 (16)	52,921	1	124,305	3
2150	Payable notes		1,283	-	1,283	-
2170	Accounts payable		28,962	1	40,161	1
2200	Other payable	6 (10)	69,506	1	102,616	2
2230	Current Income Tax Liability		121	-	1,824	-
2280	Lease liabilities - Current		1,784	-	2,906	-
2399	Other current liabilities- other		2,129	-	2,193	-
21XX	Total of current liabilities		356,706	8	425,288	9
Non-current liabilities
2527	Contract liabilities - Non-current	6 (16)	3,501	-	12,743	-
2540	Long-term borrowings	6 (11)	600,000	14	700,000	15
2570	Deferred income tax liabilities	6 (22)	267,017	6	263,788	6
2580	Lease liabilities - Non-current		2,789	-	3,979	-
25XX	Total of non-current liabilities		873,307	20	980,510	21
2XXX	Total liabilities		1,230,013	28	1,405,798	30
Attributable to owners of the parent company
	Share capital	6 (13)
3110	Ordinary shares capital		769,180	18	775,600	16
	Capital reserve	6 (14)
3200	Capital reserve		331,763	8	334,526	7
	Retained earnings	6 (15)
3310	Legal earnings reserve		356,741	8	348,897	7
3320	Special earnings reserve		238,771	6	238,771	5
3350	Undistributed earnings		1,446,718	33	1,724,311	36
	Other equity
3400	Other equity		( 55,833)	( 1)	( 65,165)	( 1)
31XX	Equity attributable to owners of the parent Company		3,087,340	72	3,356,940	70
3XXX	Total equity		3,087,340	72	3,356,940	70
	Significant contingent liabilities and unrecognized contractual commitments	9
3X2X	Total liabilities and equity		$ 4,317,353	100	$ 4,762,738	100

Please refer to the notes enclosed in the consolidated financial reports that are an integral part of the consolidated financial statements.

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated comprehensive income statements
January 1 to December 31, 2025 and 2024
Unit: NTD thousand
(Except EPS (EPL) in NTD)

	Item	Additional notes	2025		2024
			Amount	%	Amount	%
4000	Operating revenues	6(16) and 7	$ 804,878	100	$ 1,347,375	100
5000	Operating cost	6(4)(21)	( 813,742)	( 101)	( 953,057)	( 71)
5900	Operating (gross loss) gross profit		( 8,864)	( 1)	394,318	29
	Operating expenses	6 (21) and 7
6100	Marketing expenses		( 71,886)	( 9)	( 95,758)	( 7)
6200	Administrative expenses		( 70,440)	( 9)	( 86,377)	( 7)
6300	Research and development expenses		( 168,348)	( 21)	( 205,841)	( 15)
6000	Total operating expenses		( 310,674)	( 39)	( 387,976)	( 29)
6900	Operating profit (loss)		( 319,538)	( 40)	6,342	-
	Non-operating revenues and expenses
7100	Interest revenue	6 (17)	3,784	1	4,359	-
7010	Other revenue	6 (18)	8,448	1	14,120	1
7020	Other profits and losses	6 (19)	11,108	1	8,821	1
7050	Financial costs	6 (20)	( 16,731)	( 2)	( 21,285)	( 1)
7060	Shareholding in the affiliated companies and joint ventures under the equity method	6 (5)
			57,252	7	44,865	3
7000	Total non-operating revenues and expenses		63,861	8	50,880	4
7900	Pre-tax profit (loss)		( 255,677)	( 32)	57,222	4
7950	Income tax benefit (expense)	6 (22)	11,830	2	( 4,190)	-
8200	Current period net profit (loss)		($ 243,847)	( 30)	$ 53,032	4

(Continued next page)

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated comprehensive income statements
January 1 to December 31, 2025 and 2024
Unit: NTD thousand
(Except EPS (EPL) in NTD)

	Item	Additional notes	2025		2024
			Amount	%	Amount	%
Other comprehensive income (net)
Items not re-classified under profit or loss
8311	Defined benefit plan revaluation amount and volume	6 (12)	$ 9,703	1	$ 19,934	1
8320	The proportion of other comprehensive incomes from associates, and equity joint-ventures accounted for under the equity method – not reclassified as profit and loss		( 2)	-	( 5,646)	-
8349	Income tax related to accounts not being reclassified	6 (22)	( 1,940)	-	( 3,986)	-
8310	Total amount of items not reclassified to profit or income		7,761	1	10,302	1
Items that may be re-classified subsequently under profit or loss
8361	Exchange differences arising from translating the financial statements of foreign operations		( 514)	-	850	-
8370	The proportion of other comprehensive incomes from associates, and equity joint-ventures accounted for under the equity method – may be reclassified as profit and loss.		261	-	4,569	-
8360	Total amount of items probably reclassified to profit or loss subsequently		( 253)	-	5,419	-
8300	Other comprehensive income (net)		$ 7,508	1	$ 15,721	1
8500	Total comprehensive income for the period		($ 236,339)	( 29)	$ 68,753	5
8610	Net profit (loss) attributable to: Owners of parent		($ 243,847)	( 30)	$ 53,032	4
8710	Total comprehensive income attributable to: Owners of parent		($ 236,339)	( 29)	$ 68,753	5
8710	Earnings (loss) per share	6 (23)
9750	Basic earnings (loss) per share		($ 4.39)		$ 0.95
9850	Diluted earnings (loss) per share		($ 4.39)		$ 0.94

Please refer to the notes enclosed in the consolidated financial reports that are an integral part of the consolidated financial statements.

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated statement of changes in equity
January 1 to December 31, 2025 and 2024
Unit: NTD thousand

	Attributable to owners of the parent company
Capital reserve	Retained earnings
Additional notes	Ordinary shares capital
2024
Balance at January 1, 2024	$ 775,600
Current period net profit	-
Current other comprehensive income	-
Total comprehensive income for the period	-
The 2023 appropriation and distribution of earnings:	6 (15)
Legal earnings reserve	-
Special earnings reserve	-
Cash dividend	-
The reinvested company(ies) disposed of equity instruments measured at the fair value through other comprehensive profits and losses	-
Balance at December 31, 2024	$ 775,600
2025
Balance at January 1, 2025	$ 775,600
Current period net profit	-
Current other comprehensive income	-
Total comprehensive income for the period	-
The 2024 appropriation and distribution of earnings:	6 (15)
Legal earnings reserve	-
Cash dividend	-
The reinvested company(ies) disposed of equity instruments measured at the fair value through other comprehensive profits and losses	-
Repurchase of treasury shares	6 (13)
Cancellation of treasury shares	6 (13)
Balance at December 31, 2025	$ 769,180

Please refer to the notes enclosed in the consolidated financial reports that are an integral part of the consolidated financial statements.

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated cash flow statement
January 1 to December 31, 2025 and 2024
Unit: NTD thousand

	Additional notes	January 1 to December 31, 2025	January 1 to December 31, 2024
Cash flow from operating activities
Pre-tax profit (loss) for the current period		($ 255,677)	$ 57,222
Adjustments
Income, expense, and loss
Depreciation	6 (21)	188,156	195,759
Amortization	6 (21)	3,192	3,397
Net loss (profit) from financial assets and liabilities at fair value through profit and loss	6 (2)(19)	( 16,923 )	15,423
Dividend income	6 (18)	-	4,286 )
Interest revenue	6 (17)	( 3,784 )	4,359 )
Shareholding in the affiliated companies and joint ventures under the equity method	6 (5)	( 57,252 )	44,865 )
Interest expenses	6 (20)	16,731	21,285
Gains on lease modification	6 (19)	( 132 )	-
Gain in disposal and scrap of property, plant and equipment	6 (6) (19)	-	609 )
Changes in assets/liabilities relating to operating activities
Net changes in assets relating to operating activities
Financial assets at fair value through profit and loss	6 (2)	1,521	-
Contract assets		3,061	( 3,183 )
Net accounts receivable		98,803	57,716
Accounts receivable-related parties (net)		-	837 )
Other receivable		828	4,067
Inventory		277,695	242,028
Prepayments		8,960	7,533
Net defined benefit assets		( 607 )	( 8 )
Net changes in liabilities relating to operating activities
Contract liabilities		( 80,626 )	94,145
Accounts payable		( 11,199 )	( 62,920 )
Other payable		( 20,547 )	( 82,639 )
Other current liabilities-others		( 64 )	425 )
Net cash provided by operating activities		152,136	494,444
Interest received		3,784	4,359
Dividends received		21,384	25,313
Interest paid		( 16,624 )	( 21,575 )
Income tax paid		( 18,069 )	( 34,887 )
Net cash inflow from operating activities		142,611	467,654

(Continued next page)

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Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Consolidated cash flow statement
January 1 to December 31, 2025 and 2024
Unit: NTD thousand

	Additional notes	January 1 to December 31, 2025	January 1 to December 31, 2024
Cash flow from investing activities
Acquisition of investment under the equity method		($ 100)	$ -
Costs of property, plant and equipment acquired	6 (24)	( 61,373)	( 103,085)
Proceeds from disposal of property, plant and equipment		-	609
Acquisition of Intangible assets		( 961)	( 1,606)
Decrease in refundable deposits		631	3,983
Net cash outflow from investing activities		( 61,803)	( 100,099)
Cash flow from financing activities
Increase (decrease) in Shot-term borrowings	6 (25)	50,000	( 350,000)
Proceeds from long-term loan	6 (25)	200,000	-
Re-payments of long-term borrowings	6 (25)	( 300,000)	-
Lease principal repayment	6 (25)	( 2,773)	( 3,673)
Cash dividend distribution	6 (15)	( 14,736)	( 62,048)
Repurchase of treasury shares	6 (13)	( 18,525)	-
Net cash outflow from financing activities		( 86,034)	( 415,721)
Effects of exchange rate fluctuation on cash		( 612)	872
Decrease in cash and cash equivalents for the current period		( 5,838)	( 47,294)
Opening balance of cash and cash equivalents		222,275	269,569
Closing balance of cash and cash equivalents		$ 216,437	$ 222,275

Please refer to the notes enclosed in the consolidated financial reports that are an integral part of the consolidated financial statements.

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Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries
Notes to consolidated financial statement
2025 and 2024
Unit: NTD thousand
(Except where otherwise stated)

Organization and operations

Chunghwa Chemical Synthesis & Biotech Co., Ltd. (hereinafter referred to as the Company) was established in Taiwan on May 19, 1964. Originally named as China Chemical Synthesis Industry Co., Ltd., the company was renamed to the current name at the shareholder meeting in 2003. The main areas of business of the Company and the subsidiaries (collectively referred to as the Group) include research, development, manufacturing and sales of active pharmaceutical ingredients. The Company was officially listed in the Taiwan Stock Exchange on December 20, 2010.

Financial reporting date and procedures

The Board of Directors approved the consolidated financial statements for publication on March 5, 2026.

Application of new and revised standards and interpretation

(1) Effect of the adoption of new issuances of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC")

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards approved and announced effective by the Financial Supervisory Commission in 2025.

New releases / amendments / revisions of the Standards and Interpretations	The effective date announced by the International Accounting Standards Board
Amendments to IAS No. 21 "Lack of Exchangeability"	January 1, 2025

The Group has assessed the aforementioned standards, interpretations, and interpretative announcements and has concluded that they have no material impact on the Group's financial position and financial performance.

(2) Effect of new issuances of or amendments to IFRS as endorsed by the FSC but not yet adopted by the Company and subsidiaries

The following table summarizes the applicable newly released, corrected and amended standards and interpretations of the International Financial Reporting Standards recognized by the Financial Supervisory Commission in 2026.

New releases / amendments / revisions of the Standards and Interpretations	The effective date announced by the International Accounting Standards Board
Amendments to IFRS 9 and IFRS 7 - “Amendments to the Classification and Measurement of Financial Instruments” regarding the application of the classification of financial assets”	January 1, 2026

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New releases / amendments / revisions of the Standards and Interpretations	The effective date announced by the International Accounting Standards Board
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”	January 1, 2026
IFRS 17 “Insurance Contracts”	January 1, 2023
Amendments to IFRS 17 “Insurance Contracts”	January 1, 2023
Amendment to International Financial Reporting Standard 17: "Initial Application of IFRS 17 and IFRS 9—Comparative Information"	January 1, 2023
“Annual Improvements to IFRS Accounting Standards—Volume 11”	January 1, 2026

The Group has assessed the aforementioned standards, interpretations, and interpretative announcements and has concluded that they have no material impact on the Group’s financial position and financial performance.

(3) IFRS issued by IASB but not yet endorsed by the FSC

The newly released, revised and amended IFRS standards and interpretations by the IASB but not yet recognized by the FSC are summarized as follows:

New releases / amendments / revisions of the Standards and Interpretations	The effective date announced by the International Accounting Standards Board
Amendment to IFRS 10 and IAS 28 “The Assets Sales or Purchase between Investors and Their Affiliates or Joint Ventures”	To be determined by the International Accounting Standards Board (IASB).
IFRS 18 “Presentation and Disclosure in Financial Statements”	January 1, 2027 (Note)
IIFRS 19 “Subsidiaries without Public Accountability: Disclosures”	January 1, 2027
IAS 21 Amendment “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

Note: In the press release dated September 25, 2025, the FSC announced that publicly listed companies shall adopt International Financial Reporting Standard 18 ("IFRS 18") from 2026 onwards. In addition, enterprises may choose to adopt IFRS 18 early once the FSC has endorsed IFRS 18.

Except for the following statements, the Group has assessed the aforementioned standards, interpretations, and interpretative announcements and has concluded that they have no material impact on the Group’s financial position and financial performance.

IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 “Presentation and Disclosure in Financial Statements” has replaced IAS 1, updated the structure of the statement of comprehensive income, added the disclosure of management performance measurement, and strengthened the summary and division of the use in the main financial statements and notes.

Summary of significant accounting policies

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the period presented, unless otherwise stated.

(1) Compliance Statement

These consolidated financial statements of the Group have been prepared in accordance with the "Regulations Governing the Preparation of Financial Statements 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").

(2) Basis of preparation

Except for the following items, these consolidated statements have been prepared under the historical cost convention:

(1) Financial assets at fair value through other comprehensive Income
(2) The ascertained welfare assets recognized as the net amount of the pension fund assets minus the current value of the ascertained welfare obligations.

The preparation of consolidated financial statements in conformity with IFRS requires the use of certain critical estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumption and estimates are significant to the consolidated financial statements are disclosed in Note 5.

(3) Basis of consolidation

The basis of preparation for consolidated financial statements

(1) The Group incorporates all subsidiaries for the preparation of the consolidated financial statements. Subsidiaries are all entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are incorporated into the consolidated financial statements from the date they are controlled by the Group and cease to be consolidated on the date it is no longer controlled by the Group.
(2) Inter-company transactions, balances and unrealized gains or losses on transactions between companies within the Group are eliminated from the consolidated financial statements. Subsidiaries' financial statements are adjusted to align the accounting policies with those of the Group.
(3) The components of profit and loss and other comprehensive income are attributable to the owner of the parent company and non-controlling interests. The total comprehensive income is also attributable to the owner of the parent company and non-controlling interests, even if it results in a loss of non-controlling interests.
(4) Changes in a parent's ownership interest in a subsidiary that do not result in the parent losing control of the subsidiary (transactions with non-controlling interests) are accounted for as equity transactions, i.e. transactions with owners in their capacity as owners. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity.
(5) When the Group loses control of a subsidiary, the Group re-measures any investment retained

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in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. All amounts previously recognized in other comprehensive income in relation to the subsidiary are reclassified to profit or loss, on the same basis as would be required if the related assets or liabilities were disposed of. That is, when the Group loses control of a subsidiary, all gains or losses previously recognized in other comprehensive income in relation to the subsidiary should be reclassified from equity to profit or loss, if such gains or losses would be reclassified to profit or loss when the related assets or liabilities are disposed of.

Subsidiaries included in the financial statements:

Investor	Subsidiary name	Nature of the operation	Percentage of shareholdings
			December 31, 2025	December 31, 2024
Chunghwa Chemical Synthesis & Biotech Co., Ltd.	PHARMAPORTS, LLC	Trading of API drugs	100.00%	100.00%

Subsidiary company not included in the consolidated financial statements are as follows: None
Adjustments on subsidiary companies with different accounting periods: None.
Significant limitations: None
Subsidiaries of the Group with significant non-controlling interests: None.

(4) Foreign-currency translations

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates (the "functional currency"). The consolidated financial statements are presented in New Taiwan Dollars, which is the Company's functional currency.

Foreign Currency Transactions and Balances

(1) Transactions denominated in foreign currency are translated into a functional currency at the spot exchange rate on the date of the transaction or measurement. Foreign currency differences arising from translating such transactions are recognized in current profit or loss.
(2) The foreign currency asset or liability balances are revaluated based on spot exchange rate of the balance sheet date, and any exchange difference arising from the adjustment is included in the profit and loss for the year.
(3) Non-monetary assets and liabilities denominated in foreign currency held at fair value through profit or loss are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in current profit or loss; Non-monetary assets and liabilities denominated in foreign currency held at fair value through other comprehensive income are re-translated at the exchange rates prevailing at the balance sheet date; their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currency that are not measured at fair value are translated using the historical exchange rates at the date of the initial transaction.

(4) All foreign exchange gains and losses are presented in the statement of comprehensive income within “Other gains and losses”.

Translation of the financial statements of foreign operations

(1) The operating results and financial position of all the subsidiaries that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

A. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet.
B. Income and expenses for each statement of comprehensive income are translated at average exchange rates of that period; and
C. All resulting exchange differences are recognized in other comprehensive income.

(2) When the foreign operation partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interest in this foreign operation. However, if the Group retains partial interest in the former subsidiary after losing control of the former foreign subsidiary, such transactions should be accounted for as disposal of all interests in the foreign operation.

(5) Criteria for distinguishing Current or Non-Current on the Balance Sheet

Assets that meet one of the following criteria are classified as current assets:

(1) Assets arising from operating activities that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle.
(2) Held mainly for the purpose of trading.
(3) Those to be realized within 12 months of the reporting period.
(4) Cash and cash equivalents, excluding restricted cash and cash equivalents and those that are to be exchanged or used to pay off liabilities more than twelve months after the reporting period.

The Group classifies assets that do not meet any of the above criteria as non-current assets.

Liabilities that meet one of the following criteria are classified as current liabilities:

(1) Liabilities that are expected to be paid off within the normal operating cycle.
(2) Held mainly for the purpose of trading.
(3) Those to be repaid within 12 months of the reporting period.
(4) The Company does not have the right to defer the settlement of liabilities for at least 12 months after the reporting period.

The Group classifies liabilities that do not meet any of the above criteria as non-current liabilities.

(6) Cash equivalents

Cash equivalents refer to short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Time deposits that meet the definition above and are held for the purpose of meeting short-term cash commitments in operations are classified as cash equivalents.

(7) Financial assets at fair value through profit and loss

Refer to the financial assets that are not measured at amortized cost or are measured at fair value through other comprehensive income.

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A regular way purchase or sale of financial assets is recognized and derecognized using either trade date or settlement date accounting.
The Group measures financial assets at fair value in initial recognition. The related transaction costs are recognized in profit and loss. These financial assets are subsequently re-measured and stated at fair value, and any changes in the fair value of these financial assets are recognized in profit or loss.
Once the right to receive dividends is confirmed, the Group recognizes the dividend income in profit or loss if the future economic benefits are expected to flow to the entity and the dividend can be measured reliably.

(8) Accounts receivable

Refers to accounts that have been unconditionally charged for the right to exchange the value of the consideration due to the transfer of goods or services.
The short-term accounts without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(9) Impairment of Financial Assets

Financial assets measured at amortized cost, the Group on each balance sheet date, considers all reasonable and supportable information (including forward-looking ones) and measures the loss allowance based on the 12-month expected credit losses for those that do not have their credit risk increased significantly since initial recognition. For those that have increased significantly since initial recognition, the loss allowance is measured based on the full lifetime expected credit losses. A loss allowance for full lifetime expected credit losses is also required for trade receivables that do not constitute a financing transaction.

(10) The de-recognition of financial assets

A financial asset is derecognized when the Group’s rights to receive cash flows from the financial assets have expired.

(11) The lessor’s lease transaction/business lease

Income from under an operating lease (net of any incentives given to the lessee) are recognized in profit or loss on a straight-line basis over the lease term.

(12) Inventory

Inventories are measured at the lower of cost or net realizable value, and the cost is determined by weighted-average method. The costs of finished and work in process goods include raw materials, direct labor, other direct costs and manufacturing-related expenses, excluding borrowing costs. At the end of year, inventories are evaluated at the lower of cost or net realizable value. The item by item approach is used in applying the lower of cost and net realizable value. The net realizable value is the estimated selling price in the ordinary course of business, less the estimated cost of completion and the estimated costs necessary to make the sale.

(13) Investments in equity method-associate companies

Associates are all entities over which the Group has significant influence but not control. In general, it is presumed that the investor has significant influence, if an investor holds, directly or indirectly 20 percent or more of the voting power of the investee. Investments in associates are accounted for under the equity method and are initially recognized at cost.

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The Group’s share of its associates’ post-acquisition profits or losses is recognized in profit or loss in the current period, and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income. When the Group’s share of losses in an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Group does not recognize further losses, unless it has incurred statutory/constructive obligations or made payments on behalf of the associate.
When there is equity change in non-profit and loss and other consolidated profit and loss occurring to the affiliated enterprises that do not affect the shareholding of the affiliated enterprises, the Group will have the equity change recognized as “additional paid-in capital” proportionally to the shareholding ratio.
Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
When the Group disposes of its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are accounted for on the same basis as direct disposal of related assets or liabilities, that is, profit or loss previously recognized in other comprehensive income are reclassified to profit or loss when related assets or liabilities are disposed of. When the Group loses significant influence over the associate, the aforesaid profit or loss is reclassified from retained earnings to profit or loss. If it still retains significant influence over the associate, then the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
The Group carries out impairment tests for its affiliates that show indications of impairment as of the balance sheet date. It deems the overall book value of the investment (including goodwill) as a single asset to compare its recoverable amount (value-in-use or fair value less disposal costs, whichever is higher) and book value, and the impairment loss recognized will be included in the book value of the investment. The reversal of an impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

(14) Property, plant, and equipment

Property, plant and equipment are initially recorded at cost. Borrowing costs incurred during the construction period are capitalized.
Subsequent costs are included in the asset’s carrying amount or recognized as a spate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit or loss during the period in which they are incurred.
Land is not depreciated. Other property, plant and equipment apply cost model and are depreciated using the straight-line method to allocate their cost over their estimated useful lives. Each part of an item of property, plant, and equipment with a cost that is significant in relation to the total cost of the item must be depreciated separately.
The assets’ residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets’ residual values and useful lives differ from previous estimates or the patterns of consumption of the assets’ future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8, “Accounting Policies, Changes in Accounting Estimates and Errors”, from the date of change. The estimated useful lives of property, plant and equipment are

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as follows:

Buildings and structures	2 years ~ 60 years
Machinery equipment	1 years ~ 43 years
Transport equipment	2 years ~ 22 years
Other equipment	2 years ~ 41 years

(15) The lessee’s lease transaction-right-of-use assets/lease liabilities.

Lease assets are recognized on the day of the available for use by the Group as right-of-use assets and lease liabilities. If the lease contract is a short-term lease or a lease of an underlying asset with low-value, lease payment is recognized using the straight-line method as an expense during the period of lease based.
The lease liability on the first day of lease is recognized at the present value after unpaid lease payments are converted into cash according to the Group’s incremental borrowing interest rate. Lease payments include fixed payments deducted by any lease incentives received. According to the follow-up interest method and measurements by the amortized cost method, interest incurring during the period of lease is provisioned. In case of changes in the period of lease or lease payments not attributed to contract modifications, the lease liability will be re-evaluated, and the remeasurement will be used to readjust the right-of-use asset.
The right-of-use asset is recognized by cost on the starting day of lease. The costs include:

(1) The original measured amount of lease liability;
(2) Any original direct costs incurred;

The cost model is adopted for subsequent measurements. Either the end of the durability of right-of-use assets or the end of the period of lease incurring earlier will be provisioned as depreciation fees. When re-evaluating lease liability, the right-of-use asset will readjust any remeasurements of lease liability.

(16) Investment property

Investment properties are initially measured at cost and may be subsequently measured using a cost model.

(17) Intangible assets

Based on the acquisition cost as the accounting basis; computer software, patent rights and specialized technology are amortized based on their economic life or contractual term, whichever is shorter.

(18) Losses in non-financial asset

The Group estimates recoverable amounts on assets with signs of losses on the balance sheet date, and when the recoverable amount is lower than the book value, then loss is recognized. Recoverable amount refers to an asset’s fair value less the cost of disposal or the useful value, whichever is the higher. Except for goodwill, when the impairment of assets recognized in prior period is non-existent or reduced, the impairment loss should be reversed. However, the increased book value of the asset due to the reversed impairment loss may not exceed the book value net of depreciation or amortization before recognizing impairment loss.

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(19) Loans

Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in profit or loss over the period of the borrowings using the effective interest method.

(20) Notes and accounts payable

Refers to debts incurred as a result of the purchase of raw materials, goods or services and the notes payable due to business and non-business purposes.
The short-term accounts and notes payable without bearing interest are subsequently measured at initial invoice amount as the effect of discounting is immaterial.

(21) De-recognition of financial liabilities

The Group derecognizes a liability when the obligation under the liability specified in the contract is discharged or cancelled or expires.

(22) Financial assets and liabilities written-off against each other

Recognized financial liabilities and assets are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(23) Employee benefits

Short-term employee benefits

Short-term employee benefits are measured at the discounted amount of the benefits expected to be paid in respect of service rendered by employees and are recognized as expenses in the period when the employees render service.

Pension

(1) Defined contribution plan

For defined contribution plans, the contributions are recognized as pension expenses when they are due on an accrual basis. Prepaid contributions are recognized to the extent of a cash refund or a reduction in the future payments.

(2) Defined benefit plan

A. Net obligation under a defined benefit plan is defined as the present value of an amount of pension benefits that employees will receive on retirement for their services with the Group in current period or prior periods. The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The rate used to discount is determined by using interest rates of government bonds (at the balance sheet date) instead.
B. Re-measurements arising on defined benefit plans are recognized in other comprehensive income in the period in which they arise and are recoded as retained earnings.
C. The expense associated with prior service cost is recognized immediately as a profit or loss.

Remunerations for employees and directors:

Remunerations for employees and directors are recognized as expense and liability, provided that such recognition is required under legal or constructive obligation and those amounts can be reliably estimated. If the accrued amounts for employees' compensation and remuneration to directors and supervisors are different from the actual distributed amounts, the differences should be recognized based on the accounting for changes in estimates. If employee compensation is distributed by shares, the Group calculates the number of shares based on the closing price at the previous day of the board meeting resolution.

(24) Income tax

The tax expense for the period comprises current and deferred tax. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the balance sheet date in the countries where the Group operates and generates taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in accordance with the applicable tax regulations. An additional tax is levied on the unappropriated retained earnings and is recorded as income tax expense in the year the stockholders resolve to retain the earnings.
Deferred income tax is recognized, using the balance sheet liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. A deferred tax liability is not recognized for liabilities arising from initial recognition of goodwill or arising from the initial recognition of an asset/liability other than in a business combination which, at the time of the transaction, does not affect either the accounting or the taxable profit (taxable loss) and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences. Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted as of the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are reassessed.

(25) Dividends

Dividends distributed to shareholders of the Company are recognized in the financial statements when the shareholder meeting resolves to distribute dividends, and the cash dividends are recognized as liabilities.

(26) Recognition of revenue

Product sales

(1) The Group manufactures and sells API-related products. The sales revenue is recognized when products are delivered to customers who have discretionary power in channels and prices of products sold and the Group has no outstanding performance obligations which may affect customers' acceptance of products. The delivery of products is considered occurs

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when the products are shipped to the designated locations and the risks of obsolescence and loss have been transferred to customers who accept the products under sales contracts, or when there is objective evidence showing that all acceptance criteria have been met.

(2) Account receivables are recognized when goods are delivered to customers. Since the Group has unconditional rights to the contract price from that point in time, only the passage of time is required before the payment is due.

2. Labor revenue

(1) The Group provides commissioned bio drug testing and other related services. Labor service income is recognized as income during the period of financial reporting on services provided to customers. Revenues from fixed price contracts are recognized based on the proportion of services provided in all services provided as of the balance sheet date. The percentage of service completion is based on the proportion of actual costs incurred in the total costs. The customer shall pay contract prices according to the payment time agreed. When services provided by the company exceed the customer's accounts payable, they are recognized as contract assets; if the customer's accounts payable exceeds the services provided by the company, they are recognized as contract liability.

(2) The Group's estimates of revenues, costs, and degree of work completion are subject to amendments as circumstances change. Any increase or decrease in estimated income or cost due to changes in estimates shall be reflected in profit or loss during the period in which the circumstances leading to the amendments are known to management.

(27) Operating segments

The operating segment information and the internal management reports submitted to the mainly operational decision makers are consistent in the way of reporting. The chief operating decision-maker is responsible for allocating resources and assessing performance of the operating segments.

5. Main source of significant accounting judgment, estimates and assumptions uncertainty

The preparation of these consolidated financial statements requires management to make critical judgments in applying the Group's accounting policies and make critical assumptions and estimates based on the expectation of future events that are believed to be reasonable under the circumstances at the end of the reporting period. The resulting accounting estimates might be different from the related actual results, the judgments and estimates are continually evaluated and adjusted based on historical experience and other factors. Such assumptions and estimates have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. Critical accounting judgments, estimates and key sources of assumption uncertainty are explained as follows:

(1) Critical judgments concerning the application of accounting policies

none.

(2) Critical accounting estimates and assumptions

Evaluation of inventory

The Group measures the normal sales of inventories by the lower of cost and net realizable value. For inventories that have existed longer than a certain period of time and are obsolete and damaged, net realizable value of each inventory is identified to be recognized as a loss. Therefore, the Group must use its best judgments and estimates to determine the net realizable value of inventory at the balance sheet date. Due to the stricter verification of active pharmaceutical ingredients and the lengthening time required to obtain drug licenses, the disposal of inventory is below expectation, resulting in the loss from inventory depreciation or the higher risk of inventory obsolescence. The

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Group assesses on the balance sheet date the inventory due to normal wear and tear, obsolescence or without market sales value and reduces the inventory cost to net realizable value. The inventory assessment may experience significant changes due to fluctuations in the net realizable value of future products. As of December 31, 2025, the book balance of the Group's inventories is $717,938.

Summary of significant accounting titles

(1) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand and petty cash	$ 916	$ 620
Checking accounts and demand deposits	215,521	221,655
	$ 216,437	$ 222,275

The financial institutions that the Group deals with are with good credit quality; also, the Group deals with a number of financial institutions to diversify credit risk; therefore, the possibility of default is very unlikely.
None of the Group's cash and cash equivalents pledged to others as collateral.

(2) Financial assets at fair value through profit and loss

Item	December 31, 2025	December 31, 2024
Non-current items:
Financial assets mandatorily measured at fair value through profit or loss
China Development Biomedical Venture Capital (limited company)	$ 5,250	$ 6,771
Evaluation adjustment	27,585	10,662
	$ 32,835	$ 17,433

Financial assets at fair value through profit and loss is detailed as follows:

	2025	2024
Financial assets mandatorily measured at fair value through profit or loss
Equity instruments	$ 16,923	($ 15,423)

(3) Accounts receivable

	December 31, 2025	December 31, 2024
Accounts receivable	$ 83,779	$ 177,483
Less: Allowance for losses	(266)	(266)
	$ 83,513	$ 177,217

Aging of accounts receivable is as follows:

Accounts receivable

	December 31, 2025	December 31, 2024
Not overdue	$ 65,386	$ 147,129
Up to 30 days	110	30,092
31 to 60 days	18,283	262
	$ 83,779	$ 177,483

The aforementioned aging analysis is based on the overdue days.

The accounts receivables balance in December 31, 2025 and 2024 were generated from the client contract. The accounts receivables balance and allowance loss in the client contract as of January 1, 2024 amount to $235,199 and $266 respectively.
While not considering the collaterals or other credit enhancements, the accounts receivable held by the Group had the maximum exposure of credit risk at $83,513 and $177,217, respectively, as of December 31, 2025 and 2024.
The Group does not hold any collaterals.
Please see Note 12 (2) for the credit quality of the notes receivable and accounts receivable.

(4) Inventory

	December 31, 2025
	Cost	Price loss allowance	Book value
Raw materials	$ 308,220	($ 34,336)	$ 273,884
Work in process	90,615	( 10,723)	79,892
Finished products	780,329	( 416,167)	364,162
Total	$ 1,179,164	($ 461,226)	$ 717,938
	December 31, 2024
	Cost	Price loss allowance	Book value
Raw materials	$ 404,807	($ 72,963)	$ 331,844
Work in process	83,735	-	83,735
Finished products	668,912	( 115,493)	553,419
Total	$ 1,157,454	($ 188,456)	$ 968,998

The Group’s current inventory cost recognized as expenses:

	2025	2024
Cost of inventory sold	$ 519,891	$ 811,519
Loss of price decline of inventory and obsolescence loss	282,051	123,514
Labor service cost	13,133	19,344
Proceeds from sale of scraps.	( 1,333)	( 1,320)
	$ 813,742	$ 953,057

(5) Investments accounted for by the equity method

	December 31, 2025	December 31, 2024
Affiliate business:
Cenra Inc. (formerly China Chemical & Pharmaceutical Co., Ltd.)	$ 1,020,521	$ 984,386
Joint venture:
BioDuro-Cenra Biotech CO., LTD.	92	-
	$ 1,020,613	$ 984,386

Affiliate business

(1) The basic information of the Group’s main affiliates is shown as follows:

Company name	Main places of business operations	Ratio of Shareholding December 31, 2025	Ratio of Shareholding December 31, 2024	Type of affiliation	Measurement
Cenra Inc. (formerly China Chemical & Pharmaceutical Co., Ltd.)	Taiwan	14.42%	14.11%	Strategic investment	Equity method

To achieve operational growth and enhance overall strategic synergy, the Group’s affiliate, China Chemical & Pharmaceutical Co., Ltd. (CCPC), resolved at its Board of Directors meeting on April 11, 2024 to establish Cenra Inc. (Cenra). Through a share swap, all of CCPC’s issued common shares will be transferred to Cenra on the record date of September 2, 2024, with Cenra issuing new shares to CCPC shareholders as consideration. On the record date, CCPC will be delisted, and Cenra will list its shares in accordance with the relevant regulations of the Taiwan Stock Exchange.

(2) The aggregated information of the Group’s main affiliates is shown as follows: Balance Sheet

	Cenra Inc. (formerly China Chemical & Pharmaceutical Co., Ltd.)
	December 31, 2025	December 31, 2024
Current assets	$ 5,758,197	$ 5,894,140
Non-Current assets	6,688,992	6,860,867
Current liabilities	( 4,099,620)	( 3,416,021)
Non-current liabilities	( 735,937)	( 1,789,636)
Total net assets	$ 7,611,632	$ 7,549,350
Book value of affiliates	$ 1,020,521	$ 984,386

Comprehensive income statement

	Cenra Inc. (formerly China Chemical & Pharmaceutical Co., Ltd.)
	2025	2024
Income	$ 8,570,113	$ 8,918,894
Current net profits from continuing operations	$ 299,994	$ 319,062
Other comprehensive income (net after tax)	12,773	( 84,715)
Total comprehensive income for the period	$ 312,767	$ 234,347
Stock dividends collected from affiliates	$ 21,384	$ 21,028

(3) Profit and loss of associates recognized by using equity method:

	2025	2024
Cenra Inc. (formerly China Chemical & Pharmaceutical Co., Ltd.)	$ 57,260	$ 44,865

(4) The Company’s investment in Cenra Inc. has a public offer of which the fair value were $702,287 and $786,394 as of December 31, 2025 and 2024, respectively.

(5) The Company holds up to 14.42% of the total shares of Cenra Inc. as the largest single shareholder. Given the facts that the Company lacks substantial capability to dominate the relevant events as indicated through the participation by other shareholders in that company and the voting powers in major motions, it is judged that the Group does not possess control power but only has influence toward that company.

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2. Joint venture

(1) The basic information on the significant joint ventures of the Group is as follows:

Company name	Main places of business operations	Ratio of Shareholding		Type of affiliation	Measurement
		December 31, 2025	December 31, 2024
BioDuro-Cenra Biotech CO., LTD.	Taiwan	49.00%	-	Strategic investment	Equity method

In response to the business requirements and long-term development of the Group, the Group jointly invested in the establishment of BioDuro-Cenra Biotech Co., Ltd. with Company S. In the first stage, the Company will make the capital contribution. Subsequently, both parties will carry out capital increases separately after Company S has obtained the letter of approval from the Department of Investment Review, MOEA. After the capital increases, the agreed upon shareholding ratio of the Company and Company S shall be 49% and 51%, respectively.

(2) The book value of the Group's individually insignificant joint ventures and the share in their operating results are summarized as follows:

As of December 31, 2025, the book value of the Group's individually insignificant joint ventures was NT$92.

	BioDuro-Cenra Biotech CO., LTD.
	2025	2024
Total comprehensive income for the period	($ 8)	$ -

(6) Property, plant, and equipment

	2025
	Land	Buildings and structures	Machinery equipment	Transport equipment	Other equipment	Uncompleted construction and equipment pending inspection	Total
January 1
Cost	$ 1,091,583	$ 948,265	$ 1,767,520	$ 6,868	$ 681,139	$ 59,457	$4,554,832
Accumulated depreciation and impairment	-	( 604,450)	( 1,228,144)	( 6,631)	( 522,654)	-	( 2,361,879)
	$ 1,091,583	$ 343,815	$ 539,376	$ 237	$ 158,485	$ 59,457	$2,192,953
2025
January 1	$ 1,091,583	$ 343,815	$ 539,376	$ 237	$ 158,485	$ 59,457	$2,192,953
Additions	-	368	1,215	-	2,834	44,228	48,645
Reclassification	-	5,533	65,257	-	18,099	( 88,889)	-
Depreciation	-	( 46,968)	( 99,274)	( 237)	( 38,871)	-	( 185,350)
Net exchange differences	-	-	-	-	( 3)	-	( 3)
December 31	$ 1,091,583	$ 302,748	$ 506,574	$ -	$ 140,544	$ 14,796	$2,056,245
December 31
Cost	$ 1,091,583	$ 954,166	$ 1,815,261	$ 6,868	$ 689,655	$ 14,796	$4,572,329
Accumulated depreciation and impairment	-	( 651,418)	( 1,308,687)	( 6,868)	( 549,111)	-	( 2,516,084)
	$ 1,091,583	$ 302,748	$ 506,574	$ -	$ 140,544	$ 14,796	$2,056,245

	2024
	Land	Buildings and structures	Machinery equipment	Transport equipment	Other equipment	Uncompleted construction and equipment pending inspection	Total
January 1
Cost	$1,091,583	$936,092	$1,708,513	$7,731	$673,096	$48,393	$4,465,408
Accumulated depreciation and impairment	-	(555,928)	(1,125,517)	(6,971)	(492,659)	-	(2,181,075)
	$1,091,583	$380,164	$582,996	$760	$180,437	$48,393	$2,284,333
2024
January 1	$1,091,583	$380,164	$582,996	$760	$180,437	$48,393	$2,284,333
Additions	-	178	4,551	-	5,820	89,836	100,385
Reclassification	-	11,994	54,894	-	11,884	(78,772)	-
Depreciation	-	(48,521)	(103,065)	(523)	(39,662)	-	(191,771)
Net exchange differences	-	-	-	-	6	-	6
December 31	$1,091,583	$343,815	$539,376	$237	$158,485	$59,457	$2,192,953
December 31
Cost	$1,091,583	$948,265	$1,767,520	$6,868	$681,139	$59,457	$4,554,832
Accumulated depreciation and impairment	-	(604,450)	(1,228,144)	(6,631)	(522,654)	-	(2,361,879)
	$1,091,583	$343,815	$539,376	$237	$158,485	$59,457	$2,192,953

(7) Lease transactions - lessee

The underlying assets leased by the Group include houses and buildings, as well as company cars, and the lease term generally ranges from 1 to 4 years. Lease contracts are individually negotiated and include different terms and conditions. There are no other restrictions, except that leased assets may not be used as collateral for borrowings.
The lease term of part of the transportation equipment leased by the Group does not exceed 12 months, and the underlying low-value assets leased are office equipment.
The information on the book value of the right-of-use assets and the recognized depreciation expense is as follows:

	December 31, 2025	December 31, 2024
	Book value	Book value
Buildings and structures	$ 1,444	$ 2,108
Transport equipment	2,872	4,406
	$ 4,316	$ 6,514
	2025	2024
	Depreciation	Depreciation
Buildings and structures	$ 573	$ 1,114
Transport equipment	2,233	2,874
	$ 2,806	$ 3,988

The additions to the right-of-use assets of the Group in 2025 and 2024 were NT$3,422 and NT$2,654, respectively.
The information on profit or loss items related to lease contracts is as follows:

	2025	2024
Items affecting current profit and loss
Interest expenses on lease liabilities	$ 107	$ 156
Expenses for short-term lease contracts	54	184
Expenses for leases of low-value assets	363	287
Gains on lease modification	132	-

The total cash outflows from leases of the Group in 2025 and 2024 were NT$3,297 and NT$4,300, respectively.

(8) Investment property

	December 31, 2025	December 31, 2024
Land cost	$ 10,700	$ 10,700

Rental income and direct operating expenses of investment properties:

	2025	2024
Rental income of investment properties	$ 743	$ 743
Direct operating expenses incurred in investment properties that have rental income in the current period	$ 64	$ 64

The fair value of investment properties held by the Group for the years ended December 31, 2025 and 2024 was NT$85,420 and $85,420, respectively, based on the transaction prices of the adjacent lands.

(9) Shot-term borrowings

The short-term borrowings of the Group as of December 31, 2025 and 2024 are as follows:

Loans nature	December 31, 2025	Interest rate collars	Collateral
Bank loan
Credit loan	$ 200,000	1.85%	None
Loans nature	December 31, 2024	Interest rate collars	Collateral
Bank loan
Credit loan	$ 150,000	1.85%~1.99%	None

The Group's interest expenses recognized in profit or loss in 2025 and 2024 were NT$3,590 and NT$6,590, respectively.

(10) Other payable

	December 31, 2025	December 31, 2024
Salary and bonus payables	$ 28,842	$ 34,716
Commission payable	7,874	11,314
R&D expenses payable	6,013	9,493
Equipment payables	5,993	18,661
Repair fees payable	4,694	3,761
Remuneration to employees and directors payable	-	7,963
Others	16,090	16,708
	$ 69,506	$ 102,616

~37~

(11) Long-term borrowings

	December 31, 2025	December 31, 2024
Bank loan
Credit loan	$ 600,000	$ 700,000
Interest rate collars	2.01%~2.09%	2.01%~2.04%

The one-time repayment of credit loan is due in 2027.

(12) Pension

(1) The Group has a defined benefit pension plan in accordance with the “Labor Standards Act”, covering all regular employees’ service years prior to the enforcement of the Labor Pension Act on July 1, 2005 and service years thereafter of employees who chose to continue to be subject to the pension mechanism under the Law. When an employee meets the requirements of retirement, the payment of pension is based on service years and the average salary of the six months prior to retirement, with services within 15 years accumulating 2 basis points per year, and service years beyond 15 years accumulating 1 basis point per year up to a maximum of 45 basis points. The Group provisions 5% of total monthly salary to the pension fund in the name of the Pension Supervisory Committee at the Bank of Taiwan. In addition, the Group has the labor pension reserve account balance referred to in the preceding paragraph estimated at the end of each fiscal year. If the account balance is insufficient to pay pension benefit to the employees who qualify for retirement within next year for the pension benefit calculated in the preceding paragraph, the Group will have the spread amount appropriated in a lump sum before the end of March next year.

(2) The amounts recognized in the balance sheet are as follows:

	December 31, 2025		December 31, 2024
Present value of the defined benefit obligations	($	77,809)	($	82,888)
The fair value of plan assets		147,065		141,834
Net defined benefit assets (Recognized as Other non-current assets)	$	69,256	$	58,946

(3) Changes in net defined benefit assets are as follows:

	Present value of the defined benefit obligations	The fair value of plan assets	Net defined benefit assets
2025
Balance at January 1	($ 82,888)	$ 141,834	$ 58,946
Current service cost	( 336)		( 336)
Interest (expense) income	( 1,286)	2,229	943
	( 84,510)	144,063	59,553
2025
Revaluation amount:
Return on plan assets (excluding amounts included in interest income or expense)	-	10,395	10,395
The effect of changes in financial assumptions	( 1,330)	-	( 1,330)
Experience adjustments	638	-	638
	( 692)	10,395	9,703
Pension payment	7,393	( 7,393)	-
Balance at December 31	($ 77,809)	$ 147,065	$ 69,256
	Present value of the defined benefit obligations	The fair value of plan assets	Net defined benefit assets
2024
Balance at January 1	($ 104,900)	$ 143,904	$ 39,004
Current service cost	( 454)	-	( 454)
Interest (expense) income	( 1,157)	1,619	462
	( 106,511)	145,523	39,012
2024
Revaluation amount:
Return on plan assets (excluding amounts included in interest income or expense)	-	13,186	13,186
The effect of changes in financial assumptions	2,392	-	2,392
Experience adjustments	4,356	-	4,356
	6,748	13,186	19,934
Pension payment	16,875	( 16,875)	-
Balance at December 31	($ 82,888)	$ 141,834	$ 58,946

~38~

(4) The Bank of Taiwan was commissioned to manage the Fund of the Group’s defined benefit pension plan in accordance with the Fund’s annual investment and utilization plan and the “Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund” (Article 6: The scope of utilization for the Fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or private placement equity securities, investment in domestic or foreign real estate securitization products, etc.). For the use of this fund, the minimum earnings distribution every year shall not be for an amount less than the income calculated in accordance with the local bank’s two-year time deposit rate; also, the insufficient fund, if any, should be made up by the National Treasury with the approval of the competent authorities. Since the Group is not entitled to participating in the operation and management of the Fund, the classification of the fair value of plant asset cannot be disclosed in accordance with International Accounting Standards No. 19, paragraph 142. The composition of fair value of plan assets as of December 31, 2025 and 2024 is given in the Annual Labor Retirement Fund Utilization Report announced by the government.

(5) Assumptions for the actuation of pension funds are summarized as follows:

	2025	2024
Discounted rate	1.30%	1.60%
Future salary increases rate	2.00%	2.00%

Assumptions regarding future mortality experience are set based on actuarial advice in accordance with the published statistics and experience in the 6th Taiwan Standard Ordinary Experience Mortality Table.

The present value of the defined benefit obligations affected by the changes in the actuarial assumptions is analyzed as follows:

	Discounted rate		Future salary increases rate
	Increase by 0.25%	Decrease by 0.25%	Increase by 0.25%	Decrease by 0.25%
December 31, 2025
The impact on the present value of the defined benefit obligations	($ 1,112)	$ 1,143	$ 1,132	($ 1,108)
	Discounted rate		Future salary increases rate
	Increase by 0.25%	Decrease by 0.25%	Increase by 0.25%	Decrease by 0.25%
December 31, 2024
The impact on the present value of the defined benefit obligations	($ 1,279)	$ 1,314	$ 1,306	($ 1,277)

The sensitivity analysis above analyzes the impact from changing one of the assumptions while others remain constant. In practice, many changes in assumptions may be mutually interactive. The sensitivity analysis is consistent with the method adopted for calculating the net pension liability on the balance sheet.

(6) The Company applied for a suspension of the allocation of labor pension reserve on November 29, 2024 and December 15, 2023, which was approved to suspend the allocation of labor pension reserve in 2025 and 2024.

(1) The Company has a retirement policy with a defined pension contribution plan regulated in accordance with the "Labor Pension Act" for the employees of Taiwan nationality since July 1, 2005. The Company has established a defined contribution pension plan (the "New Plan") under the "Labor Pension Act" covering all regular employees. Under the New Plan, the Company contributes monthly an amount based on $6\%$ of the employees' monthly salaries and wages to an employee's individual pension account at the Bureau of Labor Insurance. The payment of pension benefits is based on an employee's individual pension fund account and the cumulative profit in such account, and employees can choose to receive such pension benefits monthly or in one lump sum.

(2) Pharmaports, LLC follows the retirement insurance system in the US and has an internal policy determining the allocation of pensions. Every month, a certain percentage of the local employees' salary is allocated to the pension fund.

(3) The pension costs under the defined contribution pension plans of the Group for the 2025 and 2024 were $9,378 and $10,776, respectively.

(13) Share capital

As of December 31, 2025, the Company's authorized capital was $1,600,000, consisting of 160,000 thousand shares of ordinary stock, and the paid-in capital was$ 769,180 with a par value of $10 (in dollars) per share. All issued capital of the Company were paid up.
The number of the Company's outstanding ordinary shares as of 2025 and 2024: (Unit: thousand shares)

	2025		2024
January 1	$	77,560	$	77,560
Repurchase and cancellation of treasury shares	(	642)		-
December 31	$	76,918	$	77,560

To protect the Company's credit and shareholders' rights and interests, the Board of Directors resolved on April 14, 2025 to repurchase treasury shares and cancel them within six months, and the number of repurchased shares and the amount shall be 642 thousand shares and NT$18,525, respectively; June 14, 2025 shall be the expiry date of the repurchase period. On September 16, 2025, the Administration of Commerce, MOEA approved the cancellation of treasury shares and completed the alteration registration of the capital reduction of the Company, and NT$2,763 and NT$9,342 were written off from the capital reserve and retained earnings, respectively.
The affiliation of the Company held 21,575 thousand shares of the Company as of December 31, 2025 and 2024.
On May 29, 2025, the Company's shareholders' meeting adopted a resolution to issue ordinary

shares or domestic convertible corporate bonds (including secured or unsecured convertible corporate bonds) through private placement. The board of directors is authorized to decide on the number of shares to be actually issued or converted within the limit of 20% of the total number of ordinary shares issued (i.e., not exceeding 15,512,000 shares), depending on the capital market conditions.

(14) Capital reserve

According to the Company Act, capital reserves from premium income for issuing shares over face values and gift income, not only can offset losses, it can also issue new shares or cash according to the original shareholding when there is no accumulated losses in the company. Further, the Securities and Exchange Act requires that the amount of capital surplus to be capitalized, as above, should not exceed 10% of paid-in capital each year. When the retained earnings of a company is not enough to offset capital losses, the capital reserves cannot be applied.

(15) Retained earnings

According to the Company's articles of incorporation, the dividend policy considers the Company's future capital needs and long-term financial planning and meets the shareholders' demand for cash inflows. The current year's earning, if any, shall first be used to offset prior years' operating losses and pay all taxes, and then 10% of the remaining amount shall be set aside as legal reserve. Special reserve shall also be allocated. If there is still surplus, it can be put together with the accumulated undistributed surplus of the previous year as the surplus available this year for distribution. Part of it can be retained, depending on the Company's business needs for the year, before being distributed to shareholders. Cash dividends shall not be less than 50% of the shareholder dividend given, but when the cash dividend is calculated to be less than $0.1 per share, it can be given in the form of stock dividend.
Except for covering accumulated deficit or issuing new stocks or cash to shareholders in proportion to their share ownership, the legal reserve shall not be used for any other purpose. The use of the legal reserve for the issuance of stocks or cash to shareholders in proportion to their share ownership is permitted, provided that the distribution of the reserve is limited to the portion in excess of 25% of the Company's paid-in capital.
(1) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount could be included in the distributable earnings.

(2) When adopting IFRSs for the first time on special reserve, the Company will conduct a reversal of the originally allocated special reserve when using, disposing of or reclassifying assets.

(1) The appropriations of 2024 and 2023 earnings had been resolved at the stockholders' meeting on May 29, 2025 and May 30, 2024, respectively. Details are summarized below:

	2024		2023
	Amount	Dividends per share ($)	Amount	Dividends per share ($)
Legal earnings reserve	$ 7,844		$ 26,745
Special earnings reserve	-		9,427
Cash dividend	14,736	$ 0.19	62,048	$ 0.8
	$ 22,580		$ 98,220

(2) The loss compensation for 2025 was proposed by the Board of Directors on March 5, 2026, but it had not yet been resolved at the shareholders' meeting.

(16) Operating revenues

	2025	2024
Revenue from Contracts with Customers	$ 804,878	$ 1,347,375

Segmentation of revenue from contracts with customers

The Group's revenues are generated from goods and labor services gradually transferred with time and transferred at a specific time. Revenues can be subdivided into the following geographic areas:

2025	Taiwan	United States	Total
Revenue from contracts with external customers	$ 486,818	$ 318,060	$ 804,878
Time point of sales income recognition
Revenues recognized at a specific time	$ 486,818	$ 318,060	$ 804,878
Revenues gradually recognized with time	-	-	-
	$ 486,818	$ 318,060	$ 804,878
2024	Taiwan	United States	Total
Revenue from contracts with external customers	$ 860,863	$ 486,512	$ 1,347,375
Time point of sales income recognition
Revenues recognized at a specific time	$ 857,333	$ 486,512	$ 1,343,845
Revenues gradually recognized with time	3,530	-	3,530
	$ 860,863	$ 486,512	$ 1,347,375

Contract assets and contract liabilities

(1) The contract assets and contract liabilities of customer contract revenue recognized by the Group are shown as follows:

(2) The initial contract liabilities arising from sales and labor contracts recognized as revenues in 2025 and 2024 total NT$89,448 and $18,796 respectively.

(17) Interest revenue

	2025	2024
Interest from bank deposits	$ 3,760	$ 4,333
Other interest incomes	24	26
	$ 3,784	$ 4,359

(18) Other revenue

	2025	2024
Rent revenue	$ 743	$ 743
Dividend income	-	4,286
Insurance claim income	-	768
Other Revenue- other	7,705	8,323
	$ 8,448	$ 14,120

(19) Other profits and losses

	2025	2024
Profit (loss) from financial assets at fair value through profit and loss	$ 16,923	($ 15,423)
Net foreign exchange profit (loss)	( 5,371)	23,635
Gains on lease modification	132	-
Gain in disposal and scrap of property, plant and equipment	-	609
Other profits and losses	( 576)	-
	$ 11,108	$ 8,821

(20) Financial costs

	2025	2024
Bank loan	$ 16,625	$ 21,129
Other financial expenses	106	156
	$ 16,731	$ 21,285

(21) Employee benefit expense, depreciation and amortization

Employee benefit expense, depreciation and amortization:

Characteristics	2025
	Allocated as operating cost	Employee expenses	Total
Employee benefits expenses
Salaries and wages	$ 78,843	$ 122,358	$ 201,201
Labor insurance and national health insurance	9,738	12,557	22,295
Pension expenses	3,227	5,544	8,771
Other employee expenses	8,629	9,618	18,247
Depreciation	151,259	36,897	188,156
Amortization	1,756	1,436	3,192
Characteristics	2024
---	---	---	---
	Allocated as operating cost	Employee expenses	Total
Employee benefits expenses
Salaries and wages	$ 100,136	$ 140,469	$ 240,605
Labor insurance and national health insurance	12,687	14,390	27,077
Pension expenses	4,170	6,598	10,768
Other employee expenses	9,233	9,592	18,825
Depreciation	156,071	39,688	195,759
Amortization	1,756	1,641	3,397

Remunerations for employees and directors:

(1) According to the articles of incorporation of the Company, amended by the shareholders' meeting in 2025, a portion of the distributable profit of the current year, after covering accumulated losses, shall be distributed as employee compensation and director remuneration. The percentage shall be 1% to 15% for employee compensation and shall not be higher than 3% for director remuneration. For the amount of employee compensation, no less than 10% shall be appropriated as the compensation of non-executive employees.

(2) A. The Company recorded losses for 2025; therefore, no employee compensation or director remuneration was appropriated. For 2024, the estimated amount of employee compensation was $7,063, while the estimated amount of director remuneration was $900. The aforementioned amounts were recognized in the salary expenses.

B. The employee compensation and director remuneration resolved by the Board of Directors for 2024 were $7,063 and $900, respectively, consistent with the amount recognized in the 2024 financial report. Employee compensation and director remuneration are distributed in cash; please visit the MOPS for inquiries about the relevant information.

C. Information about employees' compensation and directors' remuneration of the Company as resolved by the Board of Directors and shareholders will be posted in the "Market Observation Post System".

(22) Income tax

Income tax (benefit) expense

(1) Components of income tax (benefit) expense:

	2025		2024
Current income tax:
Current income tax	($	920)	$	15,714
Additional levy on undistributed earnings		-		7,556
Underestimate (overestimated) income tax of prior years		4,529	(	5,234)
Total Current income tax		3,609		18,036
Deferred income tax:
Origin and reversal of temporary differences	(	15,439)	(	13,846)
Income tax (benefit) expense	($	11,830)	$	4,190

(2) Income tax amounts relating to other comprehensive profit and loss:

	2025	2024
Defined benefit obligation revaluation amount and volume	($ 1,940)	($ 3,986)

Reconciliation between income tax (benefit) expense and accounting profit:

	2025		2024
Income tax derived by applying the statutory tax rate to pre-tax net profit	($)	49,345)	$	10,540
Tax-free income by Income Tax Law	(	15,149)	(	4,045)
Impact on income tax from items excluded according to the tax law		557		564
Realizable changes from deferred income tax assets		145	(	27)
Unrecognized deferred income tax assets on temporary differences		46,123		-
Unrecognized income tax assets on taxable losses		4,479		-
Additional levy on undistributed earnings		-		7,556
Underestimate (overestimated) income tax of prior years		4,529	(	5,234)
Income tax effect of investment tax credit	(	3,640)	(	5,652)
Foreign dividend withholding tax rate difference		471		488
Income tax (benefit) expense	($)	11,830)	$	4,190

Deferred income tax assets or liabilities arising from temporary differences and taxable losses:

	2025
	January 1	Recognized in the profit or loss	Recognized in other comprehensive net loss	December 31
Temporary differences:
Deferred income tax assets:
Falling price of inventory	$ 32,548	$ 13,575	$ -	$ 46,123
Unrealized exchange loss	1,326	( 1,326)	-	-
Impairment loss of fixed assets	8	( 3)	-	5
Bonus payable for paid leave not taken	1,665	3	-	1,668
Taxable losses	-	4,479	-	4,479
Subtotal	35,547	16,728	-	52,275
-Deferred income tax liabilities
Profit and loss recognized by using equity method	( 11,834)	( 1,078)	-	( 12,912)
Unrealized exchange gain	-	( 90)	-	( 90)
Determined benefit obligation	( 11,790)	( 121)	( 1,940)	( 13,851)
Reserve for land revaluation increment tax (“LRIT”)	( 240,164)	-	-	( 240,164)
Subtotal	( 263,788)	( 1,289)	( 1,940)	( 267,017)
Total	($ 228,241)	$ 15,439	($ 1,940)	($ 214,742)

~47~

	2024
	January 1	Recognized in the profit or loss	Recognized in other comprehensive net loss	December 31
Temporary differences:
Deferred income tax assets:
Falling price of inventory	$ 16,448	$ 16,100	$ -	$ 32,548
Unrealized exchange loss	2,084	( 758)	-	1,326
Impairment loss of fixed assets	26	( 18)	-	8
Bonus payable for paid leave not taken	1,710	( 45)	-	1,665
Unrealized profit from sales of inventories in transit	172	( 172)	-	-
Subtotal	20,440	15,107	-	35,547
-Deferred income tax liabilities
Profit and loss recognized by using equity method	( 10,575)	( 1,259)	-	( 11,834)
Determined benefit obligation	( 7,802)	( 2)	( 3,986)	( 11,790)
Reserve for land revaluation increment tax (“LRIT”)	( 240,164)	-	-	( 240,164)
Subtotal	( 258,541)	( 1,261)	( 3,986)	( 263,788)
Total	($ 238,101)	$ 13,846	($ 3,986)	($ 228,241)

The valid period for the unused taxable losses and the amount related to unrecognized deferred income tax assets of the Group is as follows:

December 31, 2025
Year of occurrence	Amount declared/amount approved	Undeducted amount	Amount of unrecognized deferred income tax assets	Last deduction year
2025	$ 44,794	$ 44,794	$ 22,397	2035

Deductible temporary differences that the Group did not recognize as deferred income tax assets are as follows:

	December 31, 2025	December 31, 2024
Deductible temporary differences	$ 230,615	$ -

The Company's filings of profit-seeking enterprise business income tax returns had been certified by the tax authority up till 2023.

(23) Earnings (loss) per share

	2025
	After-tax amount	Weighted average outstanding shares (thousand shares).	Loss per share (NT$)
Basic loss per share
Net loss attributable to the parent company	($ 243,847)	55,571	($ 4.39)
	2024
	After-tax amount	Weighted average outstanding shares (thousand shares).	Earnings per share ($)
Base earnings per share
Net income attributable to the parent company	$ 53,032	55,985	$ 0.95
Diluted earnings per share
Net income attributable to the parent company	$ 53,032	55,985
Effect of dilutive potential ordinary shares:
Employees’ compensation	-	303
Net income attributable to the parent company
Potential effect on ordinary shares	$ 53,032	56,288	$ 0.94

(24) Supplemental cash flow information

Investing activities partially funded with cash:

	2025		2024
Purchase of property, plant, and equipment	$	48,645	$	100,385
Add: Opening balance of payable on equipment		18,661		27,683
Prepayments for equipment at the end of the period		942		882
Less: Ending balance of payable on equipment	(	5,993)	(	18,661)
Prepayments for equipment at the beginning of the period	(	882)	(	7,204)
Cash Paid for the Period	$	61,373	$	103,085

(25) Changes in liabilities arising from financing activities

	2025
	Shot-term borrowings	Long-term borrowings	Lease liabilities	Total liabilities arising from financing activities
January 1	$ 150,000	$ 700,000	$ 6,885	$ 856,885
Addition	1,000,000	200,000	-	1,200,000
Repayment	( 950,000)	( 300,000)	( 2,773)	( 1,252,773)
Other non-cash changes	-	-	461	461
December 31	$ 200,000	$ 600,000	$ 4,573	$ 804,573
	2024
	Shot-term borrowings	Long-term borrowings	Lease liabilities	Total liabilities arising from financing activities
January 1	$ 500,000	$ 700,000	$ 7,830	$ 1,207,830
Addition	650,000	-	-	650,000
Repayment	( 1,000,000)	-	( 3,673)	( 1,003,673)
Other non-cash changes	-	-	2,727	2,727
December 31	$ 150,000	$ 700,000	$ 6,884	$ 856,884

Related party transactions

(1) Name and relationship of related parties

Name	Relationship with the Group
Cenra Inc. (Cenra)	The Group’s main affiliates
China Chemical & Pharmaceutical Co., Ltd. (CCPC)	The Group’s main affiliates
Chunghwa Yuming Healthcare Co., Ltd. (CYH)	The Group’s main affiliates
Chunghwa Senior Care Co., Ltd.	The Group’s main affiliates
Tairung Development Co., Ltd.	The Group’s main affiliates
The Mr. Wang Min-ning Memorial Foundation	Other related parties of the Group

(2) Major transactions with related parties

Operating revenues

	2025	2024
Product sales:
Affiliate business	$ 36,787	$ 33,832

(1) The transaction price of the Group for related parties is based on the price agreed upon by both parties, which is similar to the sales price for general customers.
(2) The Group's payment period is 30-120 days (monthly) for non-stakeholders and 90-120 days (monthly) for stakeholders after shipment.
(3) The Group signed a raw material production and sales contract with China Chemical & Pharmaceutical Co., Ltd. in 2024 and renewed the contract in 2016. The Group sold raw materials to the said party at the net cost for processing into goods; the Group is entitled to a differential profit ratio of $50\%$ profit from actual sales (China Chemical & Pharmaceutical Co., Ltd. gross profit and the Group's sales gross profit).

Account receivable from related parties

	December 31, 2025	December 31, 2024
Accounts receivable:
Affiliate business-CCPC	$ 8,945	$ 14,044
Less: Allowance for losses	(46)	(46)
Subtotal	8,899	13,998
Other receivable:
Affiliate business	66	12
Total	$ 8,965	$ 14,010

The Group's business supplies purchased in 2025 and 2024 totaled NT$3,750 and $2,724, respectively, and are listed as operating cost and miscellaneous fees.
The Group donated $1,500 to Mr. Min-Ning Wang Foundation, other related party, in 2024 in order to reward professionals for engagement in academic research and development.
The dividends received from the Group's affiliates for the years 2025 and 2024 were $21,384 and $21,028, respectively.

(3) Remuneration to key management

	2025	2024
Salaries and other short-term employee benefits	$ 17,584	$ 21,960
Retirement benefits	2,426	407
	$ 20,010	$ 22,367

~51~

Pledged assets

The assets of the Group are offered as collateral as follows:

Asset Item	Book Value		Purpose of guarantee
	December 31, 2025	December 31, 2024
Deposits paid
(Recognized as Other non-current assets)	$ 9,753	$ 10,384	Customs guarantees, lease deposits, etc.

Significant contingent liabilities and unrecognized contractual commitments

(1) Contingencies

none.

(2) Commitments

Capital expenditures that have been signed but not yet incurred

	December 31, 2025	December 31, 2024
Property, plant, and equipment	$ 9,290	$ 35,112

Losses due to major disasters

none.

Major post-balance sheet events

none.

Others

(1) Capital management

The Group’s capital risk management objectives are to ensure that the Group is capable of continuing operations, to maintain the most appropriate capital structure in order to reduce cost of capital and to maximize returns for shareholders. The Group may make adjustments to dividends paid to shareholders, refund capital to shareholders, issue new shares or sell assets to reduce the level of debts in order to maintain or adjust the Group’s capital structure. The Group uses the debt-to-equity ratio to monitor its capital. The ratio is calculated by dividing net debts by total capital. Net debts are calculated as total debts (including “current and non-current borrowings” presented in the consolidated balance sheet) less cash and cash equivalents. Total capital is calculated as “equity” presented in the consolidated balance sheet plus net debts.

The strategy of the Group in 2025 remained the same as in 2024 to be committed to maintaining a debt to capital ratio below 40%.

(2) Financial instruments

Types of financial instrument

	December 31, 2025	December 31, 2024
Financial assets
Financial assets at fair value through profit and loss
Financial assets mandatorily measured at fair value through profit or loss	$ 32,835	$ 17,433
Financial assets based on cost after amortization
Cash and cash equivalents	216,437	222,275
Accounts receivable (including related parties)	92,412	191,215
Other receivable	3,802	4,630
Deposits paid (Recognized as Other non-current assets)	9,753	10,384
	$ 355,239	$ 428,504
Financial liabilities
Financial liability measured at the amortized cost
Shot-term borrowings	200,000	150,000
Payable notes	1,283	1,283
Accounts payable	28,962	40,161
Other payable	69,506	102,616
Long-term borrowings	600,000	700,000
Deposits received (Recognized as other current liabilities-others)	266	266
	$ 900,017	$ 994,326
Lease liabilities (including current and non-current)	$ 4,573	$ 6,885

Risk management policies

(1) The Group’s activities expose it to a variety of financial risks, including market risk (exchange rate, interest rate and price), credit risk and liquidity risk. The Group’s overall risk management policy focuses on unpredictable events in the financial market, and the Group seeks to mitigate potential adverse effect on the financial position and performance.

(2) The Group’s Finance Department identifies and assesses financial risks in close collaboration with the Group’s other operating units.

The nature and extent of significant financial risks

(1) Market risk

Exchange rate risk

A. The Group is a multinational operation and therefore is subject to exchange rate risk arising from transactions between the different currencies of the Company and its subsidiaries, mainly in US dollars. The related exchange risk from future operating activities have been recognized in assets and liabilities.

B. The Finance Department of the Group conducts hedging for the overall exchange rate risk. In order to manage the exchange rate risk from future commercial transactions and recognized assets and liabilities, companies within the Group take on the natural hedging approach for general imports and exports to reduce the foreign exchange risk.

C. The Group’s operations involve certain non-functional currencies (the Company’s functional currency is the New Taiwan dollar (NTD), and subsidiary's functional currency is the USD), so it is subject to the impact of exchange rate fluctuation. The details of assets and liabilities denominated in foreign currencies whose values would be materially affected by exchange rate fluctuations are as follows:

	December 31, 2025
	Foreign currency (thousand dollars)	Exchange rate	Book value (NTD)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD: NTD	$ 5,459	31.43	$ 171,576
Financial liabilities
Monetary items
USD: NTD	$ 381	31.43	$ 11,975
	December 31, 2024
	Foreign currency (thousand dollars)	Exchange rate	Book value (NTD)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD: NTD	$ 8,165	32.79	$ 267,730
Financial liabilities
Monetary items
USD: NTD	$ 433	32.79	$ 14,198

D. Total exchange gain, including realized and unrealized gains from significant foreign exchange variations on monetary items held by the Group amounted to a loss of ($5,371)

~53~

and a gain of $23,635 for the 2025 and 2024, respectively.

E. The analysis of foreign currency risk due to significant exchange rate fluctuation is as follows:

	2025
	Sensitivity analysis
	Magnitude changes	Profit and loss affected	Other comprehensive profit and loss affected
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD: NTD	1%	$ 1,716	$ -
Financial liabilities
Monetary items
USD: NTD	1%	$ 120	$ -
	2024
	Sensitivity analysis
	Magnitude changes	Profit and loss affected	Other comprehensive profit and loss affected
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD: NTD	1%	$ 2,677	$ -
Financial liabilities
Monetary items
USD: NTD	1%	$ 142	$ -

Price risk

A. The equity instruments of the Group that are exposed to price risks are those financial assets held at fair value through profit and loss. To manage the price risk of equity instruments, the Group diversifies its investment portfolio in a manner that is based on the limits set by the Group.

B. The Group invests primarily in equity instruments issued by domestic companies. The price of such equity instrument is subject to the uncertainty of the future value of investment target. In case the price of the said equity instrument rises or drops by 10% while the other factors remain unchanged, the after-tax net profit for 2025 and 2024 due

to the profit or loss of the equity instrument measured from fair value through profit and loss will increase or decrease by $3,284 and $1,743 respectively.

Cash flow and fair value interest rate risk

A. The Group’s interest rate risk mainly comes from short-term borrowings issued at floating rates and long-term borrowing, which exposes the Group to cash flow interest rate risk. For 2025 and 2024, the Group’s borrowings issued at floating rates were mainly denominated in New Taiwan dollars.

B. If the interest rates of borrowing NTD increases or decreases by 1%, while all other factors remain constant, the net profit after tax for 2025 and 2024 is an increase of $6,400 and $6,800, respectively, mainly due to the interest expense changes caused by the floating interest rate.

(2) Credit risk

A. Credit risk refers to the risk of financial loss of the Group arising from default by the clients or counterparties of financial instruments under contract obligations, and the defaults are accounts receivable.

B. The management of credit risk is established with a Group perspective. According to the Company’s credit policy, each local entity in the Group is responsible for managing and analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Internal risk control assesses the credit quality of the customers, taking into account their financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Office of the General Manager. The utilization of credit limits is regularly monitored.

C. The Group uses IFRS 9 to provide an assumption that if a contract payment is overdue for more than 90 days in accordance with the agreed payment terms, it is considered a breach of contract.

D. The Group uses IFRS 9 to provide the following assumption as a basis for determining whether there is a significant increase in the credit risk of financial instruments after the original recognition:

If the contract payment is overdue for more than 30 days in accordance with the agreed payment terms, the credit risk of the financial asset is significantly increased since the original recognition.

E. The Group categorizes the accounts receivable from customers based on their nature. The provision matrix and the loss ratio method are adopted as the basis for estimating the expected credit loss.

F. The Group may write off the amount of financial assets that cannot be reasonably expected to be recovered after recourse. However, the Group will still continue the recourse to protect the rights of the claims. For the year ended December 31, 2025 and 2024, the Group has no creditor’s rights that have been written off but are involved in recourse.

G. The Group has included the global economic indicators and signals and estimated the loss allowance for accounts receivable (including the interested parties) based on the loss rates built according to historic and current data. The provision matrix and loss rate as of December 31, 2025 and 2024 are show as follows:

~55~

December 31, 2025	Expected rate of loss	Total book value	Allowance for losses
Not overdue	0.01%~0.11%	$ 36,391	$ 294
Overdue within 30 days	0.13%~1.33%	110	-
Overdue 31 to 60 days	0.14%~1.36%	6,977	-
Overdue 61 to 90 days	0.96%~9.63%	-	-
Overdue 91	10.00%~100.00%	-	-
		$ 43,478	$ 294
December 31, 2024	Expected rate of loss	Total book value	Allowance for losses
Not overdue	0.01%~0.12%	$ 124,556	$ 294
Overdue within 30 days	0.15%~1.46%	4,814	-
Overdue 31 to 60 days	0.15%~1.49%	-	-
Overdue 61 to 90 days	0.89%~8.93%	-	-
Overdue 91	10.00%~100.00%	-	-
		$ 129,370	$ 294

The customers of Pharmaports, LLC, one of the Company's subsidiaries, prove very sound in credit standing. The previous experiences show no default record at all. The anticipated loss rate is, therefore, at $0.2\%$ . As of December 31, 2025 and 2024, the total receivable book value and the allowance for loss amounted to NT$49,246 and NT$18 and NT$62,157 and NT$18.

H. The Group adopts a simplified method in which the loss allowance for the accounts receivable is shown below:

	2025
	Accounts receivable (including related parties)
January 1 (December 31)	$ 312
	2024
	Accounts receivable (including related parties)
January 1 (December 31)	$ 312

The amount recognized above is based on other credit enhancements held, so the unrecognized loss allowance as of December 31, 2025 and 2024 are $211 and $295.

(3) Liquidity risk

A. Cash flow forecasting is performed by the operating entities of the Group and aggregated by the Group's finance department. It monitors rolling forecasts of liquidity requirements to ensure the Group has sufficient cash to meet operational needs and maintain sufficient unencumbered loan commitments at all times. Such forecasting takes into consideration the Group's debt financing plans, covenant compliance, and compliance with internal balance sheet ratio targets.

B. The Group's unutilized borrowings are shown as follows:

	December 31, 2025	December 31, 2024
Maturing in one year or less	$ 770,000	$ 820,000
Mature beyond one year	550,000	550,000
	$ 1,320,000	$ 1,370,000

C. The table below analyses the Group's non-derivative financial liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date for non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows.

December 31, 2025	Within 1 year	1 to 2 years	2 to 5 years
Non-derivative financial liabilities:
Shot-term borrowings	$ 200,000	$ -	$ -
Payable notes	1,283	-	-
Accounts payable	28,962	-	-
Other payable	69,506	-	-
Lease liabilities	1,855	1,869	959
Long-term borrowings	12,205	607,961	-
Deposits received	266	-	-
(Recognized as other current liabilities-others)
December 31, 2024	Within 1 year	1 to 2 years	2 to 5 years
Non-derivative financial liabilities:
Shot-term borrowings	$ 150,000	$ -	$ -
Payable notes	1,282	-	-
Accounts payable	40,161	-	-
Other payable	102,616	-	-
Lease liabilities	3,296	2,648	1,091
Long-term borrowings	14,115	709,736	-
Deposits received	266	-	-
(Recognized as other current liabilities-others)

D. The Company does not expect the timing of cash flows analyzed for maturity analysis

to occur significantly earlier than expected, nor does it expect the actual amount to differ significantly.

(3) Fair value information

The different levels that the inputs to valuation techniques are used to measure fair value of financial and non-financial instruments have been defined as follows:

Level 1: The quotation (unadjusted) of the same assets or liabilities that can be acquired by the company in an active market on the measurement date. A market is regarded as active where a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the Group’s investment in publicly traded or OTC stocks is included.

Level 2: It refers to the directly or indirectly observable input value of asset or liability, except for those quotations included in Level 1.

Level 3: The unobservable inputs of assets or liabilities.

Please refer to Note 6 (8) for the fair value of investment property carried at cost.
Financial instrument not measured at fair value:

Include the book value of cash and cash equivalents, accounts receivable (including the interested parties), other receivable, deposits paid, short-term borrowings, long-term borrowings, notes payable, accounts payable, other accounts payable, long-term borrowings, deposits received and lease liabilities as reasonable approximation of fair value.

The related information for financial and non-financial instruments measured at fair value by level on the basis of the nature, characteristics and risks of the assets and liabilities is as follows:

(1) The Group classifies them based on the nature of assets and liabilities, and the information is as follows:

December 31, 2025	Level 1	Level 2	Level 3	Total
Assets
Repeatable fair value
Financial assets at fair value through profit and loss
Equity securities	$ -	$ -	$ 32,835	$ 32,835
December 31, 2024	Level 1	Level 2	Level 3	Total
Assets
Repeatable fair value
Financial assets at fair value through profit and loss
Equity securities	$ -	$ -	$ 17,433	$ 17,433

(2) The methods and assumptions adopted by the Group to measure fair value are as follows: A. The fair value of other financial instruments is obtained by valuation or reference to

~58~

quotation from counterparties.

B. When assessing non-standardized and less complex financial instruments, the Group adopts valuation techniques widely used by other market participants. The parameters used in the valuation models for this type of financial instruments are usually observable market information.

C. The output of valuation models are estimates, and the valuation techniques may not reflect all factors affecting the financial instruments and non-financial instruments held by the Group. Therefore, the estimates of valuation models will be adjusted according to additional parameters, such as model risk or liquidity risk. Based on the management policies of the Group's valuation model at fair value and the related control procedures, the management believes that to fairly present the fair value of financial and non-financial instruments in the consolidated balance sheet, adjusting valuation may be appropriate and necessary. Price information and parameters used in valuation are carefully assessed and they are appropriately adjusted according to the current market conditions.

There were no transfers between Level 1 and 2 in 2025 and 2024.
The following table shows the changes in Level 3 in 2025 and 2024:

	2025		2024
	Equity instruments		Equity instruments
January 1	$	17,433	$	32,856
Income (loss) recognized in profit or loss (Note)		16,923	(	15,423)
Payment on shares refunded by capital decrease	(	1,521)		-
December 31	$	32,835	$	17,433

Note: Other gains and losses listed.

There were no transfers in and/or out of Level 3 in 2025 and 2024.
With respect to the valuation of fair value classified as Level 3, the Finance Department is responsible for the independent verification of fair value of financial instruments. Based on independent information, the valuation results can be closer to the market conditions. The independence and reliability of information and the consistency with other sources, as well as other necessary adjustments to the fair value, can ensure that the results are reasonable.

In addition, the Finance Department develops valuation policies and procedures for fair value of financial instruments and ensure that they comply with the requirements of the International Financial Reporting Standards.

The quantitative and sensitivity analysis of significant and unobservable input of valuation models used for measuring Level 3 fair value is shown as follows:

Fair value as of December 31, 2025

Valuation technique

Significant unobservable input value

Relationship between input value and fair

~60~

Shares of venture capital	$ 32,835	Net asset value method	Not applicable	value
	Fair value as of December 31, 2024	Valuation technique	Significant unobservable input value	Not applicable
Shares of venture capital	$ 17,433	Net asset value method	Not applicable	Relationship between input value and fair value

The Group conducts careful assessment before determining the valuation model and parameters to be used, and the use of different valuation models or parameters may lead to different valuation results.

13. Notes of disclosure

(1) Information about important transactions

In accordance with the provisions of the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the major transactions related to the Group in 2025 are as follows:

Loans to others: None
Provision of endorsements and guarantees to others: None
Major securities held at the end of the period (not including subsidiaries, associates and joint ventures equity): Please refer to Attached table 1.
Purchases or sales of goods from or to related parties reaching $100 million or 20% of paid-in capital or more: Please refer to Attached table 2.
Receivables from related parties reaching $100 million or 20% of paid-in capital or more: None.
Business relationship and significant transactions between Parent Company and Subsidiaries: Please refer to Attached table 3.

(2) Information regarding investees

Names, locations and other information of investee companies (not including investees in China): Please refer to Attached table 4.

(3) Information regarding investment in the territory of mainland china

Basic information: None.
Significant transactions, either directly or indirectly through a third area, with investee companies in China: None.

14. Segment information

(1) General information

Management has determined the reportable operating segments based on reports reviewed by the general manager and used to make strategic decisions. The general manager operates the business from a geographical perspective, with the production and sales of active pharmaceutical

ingredients being the main sources of income. Taiwan is mainly responsible for sales and research and development, and the US mainly is involved in sales. The Group provides the operating results of entities in the consolidated statements to the chief operating decision-maker for review and uses the information to evaluate performance of the departments.

(2) Evaluation of department information

The Group presents the chief operating decision-maker with the pre-tax net profit or loss of each region which uses consistent measurement for revenue and expense in the income statements, and the performance of each operating department is evaluated based on the pre-tax net profit or loss. The Group did not provide the chief operating decision-maker with total assets and liabilities for operational decisions.

(3) Segment profit/loss

Information on the reporting segments provided to the chief operating decision maker is shown as follows:

2025	Taiwan	United States	Adjustment and write-off	Total
Revenue from external clients	$ 486,818	$ 318,060	$ -	$ 804,878
Revenue from internal transactions	296,030	-	( 296,030)	-
Department income	$ 782,848	$ 318,060	($ 296,030)	$ 804,878
Segment profit/loss	($ 263,359)	$ 7,682	$ -	($ 255,677)
Segment profit and loss include:
Depreciation and amortization	$ 190,752	$ 596	$ -	$ 191,348
2024	Taiwan	United States	Adjustment and write-off	Total
Revenue from external clients	$ 860,863	$ 486,512	$ -	$ 1,347,375
Revenue from internal transactions	466,743	-	( 466,743)	-
Department income	$ 1,327,606	$ 486,512	($ 466,743)	$ 1,347,375
Segment profit/loss	$ 48,756	$ 8,466	$ -	$ 57,222
Segment profit and loss include:
Depreciation and amortization	$ 198,004	$ 1,152	$ -	$ 199,156

(4) Reconciliation of segment profit and loss

The reports provided to the chief operating decision-maker for the segments' operating decision are not different from the segments' profit and loss statement, so no adjustment is required.

(5) Information on types of product and labor service

The income from external customers is mainly in the forms of manufacturing and sales of APIs, and the breakdown of income balance is shown as follows:

	2025	2024
Sales revenue of biotechnology products	$ 573,024	$ 825,348
Sales revenue of non-biotech products	207,352	493,999
Labor revenue	24,502	28,028
	$ 804,878	$ 1,347,375

(6) Information by areas

Information by region for the Group in 2025 and 2024:

	2025		2024
	Income (Note)	Non-Current assets	Income (Note)	Non-Current assets
Taiwan	$ 66,686	$ 2,071,330	$ 140,541	$ 2,211,777
U.S.	323,572	1,468	505,308	2,158
Japan	106,063	-	104,932	-
Greece	105,781	-	134,986	-
Croatia	80,579	-	125,456	-
India	49,230	-	198,258	-
Others	72,967	-	137,894	-
Total	$ 804,878	$ 2,072,798	$ 1,347,375	$ 2,213,935

Note: Revenue is categorized by country customers were located in.

(7) Information about important customers

Major clients who accounted for more than 10% of the sales in 2025 and 2024:

	2025		2024
	Income	Department	Income	Department
Customer C	$ 212,167	United States	$ 125,456	United States
Client B	105,781	Taiwan	134,986	Taiwan
Client A	105,737	United States	447,264	United States
Client D	97,879	Taiwan	69,827	Taiwan

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries

Major securities held at the end of the period (not including subsidiaries, associates and joint ventures)

January 1 to December 31, 2025

Attached table 1

Unit: NTD thousand

(Except where otherwise stated)

Holding company	Type and name of marketable securities (Note 1)	Relationship with the securities issuer	Account titles in book	At ending
				Quantity	Book value (Note 2)	Shareholding percentage	Fair value
Chunghwa Chemical Synthesis & Biotech Co., Ltd.	Common shares
China Development Biomedical Venture Capital (limited company)	None	Financial assets that are measured at fair value through profit or loss - non-current	2,434,286	$ 32,835	1.71%	$ 32,835	None

Note 1: Securities as stated in this table are the stocks, bonds, beneficiary certificates and the securities deriving from the above items within the scope of IFRS 9, "Financial Instruments".
Note 2: For those measured at fair value, the book amount is the adjusted amount after fair value appraisal. For those not measured at fair value, the book value is determined based on the acquisition cost or amortized cost less accumulated impairment.
Note 3: The table sets out marketable securities determined by the Company based on the principle of materiality.

Page 1 of Attached table 1

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries

Purchase from or sale to related parties for an amount exceeding NTD 100 million or
20\%
of paid-in capital

January 1 to December 31, 2025

Attached table 2

Unit: NTD thousand

(Except where otherwise stated)

Purchase (sale) company	Name of counterparty	Relation	Transactions				Trading terms different from general trade and reasons		Notes and accounts receivable (payable)		Remarks
			Purchase (sale)	Amount	Percentage of total purchase (sale)	The credit period	Unit price	The credit period	Balance	Percentage of total notes, accounts receivable (payable)
Chunghwa Chemical Synthesis & Biotech Co., Ltd.	PHARMAPORTS, LLC	Subsidiaries	Sale	$ 296,030	38%	Collection period is 60 to 120 days after delivery.	The agreed amount of the two parties	-	$ 58,270	57%	None

Note: The disclosure is made by the income and corresponding transactions will not be disclosed additionally.

Page 1 of Attached table 2

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries

Business relationship and significant transactions between Parent Company and Subsidiaries

January 1 to December 31, 2025

Attached table 3

Unit: NTD thousand

(Except where otherwise stated)

Code (Note 1)	Trader's name	Counterparty	Relationship (Note 2)	Transactions
				Item	Amount	Terms and conditions	Percentage of consolidated total operating revenues or total assets (Note 3)
0	Chunghwa Chemical Synthesis & Biotech Co., Ltd.	PHARMAPORTS, LLC	1	Sales revenue	$ 296,030	Note 4	37%
0	Chunghwa Chemical Synthesis & Biotech Co., Ltd.	PHARMAPORTS, LLC	1	Accounts receivable	58,270	Note 4	1%

Note 1: The information about transactions between parent company and subsidiaries shall be numbered and noted in the following manner in the box of numbers:
(1) Fill in "0" for parent company.
(2) Subsidiaries are numbered from number 1.

Note 2: The relationship with the traders is classified into three categories, which should be specified (the transaction conducted between the parent company and its subsidiaries or between two subsidiaries need not be disclosed in duplication). Such as: if the parent company has the transaction with the subsidiaries disclosed, the subsidiaries need not to have it disclosed in duplication. If one of the two subsidiaries has the transaction disclosed, the other subsidiary needs not to have it disclosed in duplication).
(1) Parent company vs. subsidiaries.
(2) Subsidiaries vs. parent company.
(3) Subsidiaries vs. subsidiaries.

Note 3: For computing the ratio of trade amount to total sales revenue or total assets, if it is for asset and liability account, the computation is based on the ratio of ending balance to total consolidated assets; however, if it is for income and expense account, the computation is based on the ratio of interim cumulative amount to total consolidated revenue.

Note 4: Payment collection terms for sales and service provided to related parties are 60 to 120 days after shipment and provision of service, respectively.

Note 5: The presentation of material transactions in the table can be determined by the Company based on the principle of materiality.

Page 1 of Attached table 3

Chunghwa Chemical Synthesis & Biotech Co., Ltd. and its subsidiaries

Names, locations and other information of investee companies (not including investees in China)

January 1 to December 31, 2025

Attached table 4

Unit: NTD thousand

(Except where otherwise stated)

Investor	Name of investee	Location	Principal business	Sum of initial investment		Ending shareholding			Current period profit / loss of the investee	Recognized investment Income	Remarks
				Current period-end	The end of last year	Quantity	Ratio	Book value
Chunghwa Chemical Synthesis & Biotech Co. Ltd.	PHARMAPORTS, LLC	U.S.	Trading of API drugs	$ 4,925	$ 4,925	-	100.00%	$ 13,526	$ 5,390	$ 5,390	Subsidiaries
Chunghwa Chemical Synthesis & Biotech Co. Ltd.	Cenra Inc. (formerly China Chemical & Pharmaceutical Co., Ltd.)	Taiwan	Manufacturing and sales of pharmaceuticals and health care products and import of the related medical equipment.	863,602	863,602	21,026,568	14.42%	1,020,521	299,994	57,260	Affiliate business
Chunghwa Chemical Synthesis & Biotech Co. Ltd.	BioDuro-Cenra Biotech CO., LTD.	Taiwan	API business market development	100	-	10,000	49.00%	92	(17)	(8)	Affiliate business

Page 1 of Attached table 4

AI assistant

CCSB Audit Report / Information 2025

51917_rns_2026-05-11_6655c2c1-89d1-4f5a-b37b-341507149ad1.pdf

Audit opinion

Basis of an audit opinion

Key Audit Matters

Description of the matter

The responsive auditing process

Checking whether the time point of sales income recognition is appropriate

Description of the matter

The responsive auditing process

Other matters - individual financial report

The responsibility of the management and management units to the consolidated financial statements

The responsibilities of the independent auditor to the consolidated financial statements

Notice to Readers

2. Labor revenue

(27) Operating segments

5. Main source of significant accounting judgment, estimates and assumptions uncertainty

Evaluation of inventory

2. Joint venture

(13) Share capital

(14) Capital reserve

(15) Retained earnings

(16) Operating revenues

(17) Interest revenue

(18) Other revenue

(19) Other profits and losses

Price risk

Cash flow and fair value interest rate risk

(2) Credit risk

(3) Fair value information

13. Notes of disclosure

(1) Information about important transactions

(2) Information regarding investees

(3) Information regarding investment in the territory of mainland china

14. Segment information

(1) General information

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CCSB — Audit Report / Information 2025

51917_rns_2026-05-11_6655c2c1-89d1-4f5a-b37b-341507149ad1.pdf

Audit opinion

Basis of an audit opinion

Key Audit Matters

Description of the matter

The responsive auditing process

Checking whether the time point of sales income recognition is appropriate

Description of the matter

The responsive auditing process

Other matters - individual financial report

The responsibility of the management and management units to the consolidated financial statements

The responsibilities of the independent auditor to the consolidated financial statements

Notice to Readers

2. Labor revenue

(27) Operating segments

5. Main source of significant accounting judgment, estimates and assumptions uncertainty

Evaluation of inventory

2. Joint venture

(13) Share capital

(14) Capital reserve

(15) Retained earnings

(16) Operating revenues

(17) Interest revenue

(18) Other revenue

(19) Other profits and losses

Price risk

Cash flow and fair value interest rate risk

(2) Credit risk

(3) Fair value information

13. Notes of disclosure

(1) Information about important transactions

(2) Information regarding investees

(3) Information regarding investment in the territory of mainland china

14. Segment information

(1) General information

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CCSB Audit Report / Information 2025