Stock Code:4555

TAIWAN CHELIC CO., LTD. and Subsidiaries

Consolidated Financial Statements and Independent Auditors' Review Report

2025 and 2024

(For the convenience of readers and for information purpose only, the auditors' report and 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.)

Address: No. 21, Guifeng St., Taishan Dist., New Taipei, Taiwan

TEL:(02)29041235

§TABLE OF CONTENTS§

Item		Page	No. of notes to financial statements
I.	Cover Page	1	-
II.	Table of Contents	2	-
III.	Statement of Consolidated Financial Reports of Affiliated Enterprises	3	-
IV.	Independent Auditors' Review Report	4~8	-
V.	Consolidated Balance Sheets	9	-
VI.	Consolidated Statements of Comprehensive Income	10~11	-
VII.	Consolidated Statements of Changes in Equity	12	-
VIII.	Consolidated Statements of Cash Flows	13~15	-
IX.	Notes to the Consolidated Financial Statements
	(I) Company History	16	1
	(II) Approval Date and Procedures of the Financial Statements	16	2
	(III) Application of New, Revised, and Amended Standards and Interpretations	16~19	3
	(IV) Summary of Significant Accounting Policies	19~32	4
	(V) Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties	32	5
	(VI) Descriptions of Material Accounting Items	32~76	6-29
	(VII) Related Party Transactions	76~79	30
	(VIII) Pledged and Mortgaged Assets	80	31
	(IX) Significant Contingent Liabilities and Unrecognized Contract Commitments	80	32
	(X) Significant Disaster Loss	-	-
	(XI) Significant Subsequent Events	80	33
	(XII) Others	80	34
	(XIII) Supplementary Disclosure
	1. Information on significant transactions	81~82、84~91	35
	2. Information on reinvestment	82、92	35
	3. Information on investment in mainland China	82、93~95	35
	4. The situation where a subsidiary holds shares in a parent company	82	35
	(XIV) Department Information	83	36

Statement of Consolidated Financial Reports of Affiliated Enterprises

In2025(fromJanuary 1, 2025toDecember31,2025), the companies that The Company should include in the preparation of the Consolidated Financial Statements of Related Parties under the "Regulations Governing the Preparation of Consolidated Business Reports, Consolidated Financial Statements, and Consolidated Reports of Affiliated Enterprises," and those to be included in the consolidated financial statements of the parent and Subsidiary under IFRS 10, are the same. Moreover, the relevant information required to be disclosed in the Consolidated Financial Statements of Related Parties has already been disclosed in the aforementioned consolidated financial statements of the parent and Subsidiary; therefore, there is no separate preparation of the Consolidated Financial Statements of Related Parties.

Sincerely,

Name: TAIWAN CHELIC CO., LTD.

Person in Charge: YU, PING-CHENG

March4,2026

Independent Auditors' Review Report

To TAIWAN CHELIC CO., LTD.:

Audit Opinion

We have audited the accompanying consolidated balance sheets of TAIWAN CHELIC CO., LTD. and its subsidiaries (collectively, the "Chelic Group") as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, of changes in equity, and of cash flows for the years from January 1 to December 31, 2025 and 2024, and the related notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, based on our audits, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Chelic Group as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years from January 1 to December 31, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (IFRSs), International Accounting Standards (IASs), Interpretations, and Interpretations of IFRSs as endorsed and issued into effect by the Financial Supervisory Commission.

Basis for Audit Opinion

We conducted our audits in accordance with the CPA Auditing Certification Rules and auditing standards. The responsibilities of the CPA under these standards are further explained in the section on the CPA's responsibilities for the audit of the consolidated financial statements. The personnel of the firm to which the CPA is affiliated, who are subject to independence requirements, have maintained independence from the Chelic Group in accordance with the Code of Ethics for Professional Accountants and have fulfilled other responsibilities under the code. We believe that we have obtained sufficient and appropriate audit evidence to provide a basis for our audit opinion.

Key Audit Matters

Key Audit Matters are those matters that, in the our professional judgment, were of most significance in the audit of the Group's consolidated financial statements for the year 2025. These matters were addressed in the context of the audit of the consolidated financial statements as a whole and in forming the audit opinion, and we do not provide a separate opinion on these matters.

Key Audit Matters are stated as follows for the Group's consolidated financial statements for the year 2025:

Key Audit Matters

The group's many customers primarily consume "pneumatic components" as its main products. Due to market competition and the need to meet the expectations of shareholders and external investors, there is anticipated pressure on management to achieve the projected net revenue targets. We, as the CPAs, believe that for those sales recipients within the group with relatively higher sales amounts and whose individual revenue changes are better than the overall average change, the authenticity of their sales will have a significant impact on the financial statements. Therefore, this has been identified as a Key Audit Matter. For the accounting policy on the recognition of related revenue, refer to Note 4(11) of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS; for notes related to Net revenue, please refer to Note 23 of the NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

The audit procedures of the CPA included:

Understand and test the design and operating effectiveness of the internal control systems related to the occurrence of the sales of the aforementioned customers.
Select appropriate samples from the sales details of the aforementioned customers to examine original orders, external supporting documents, and collection status to verify the authenticity of the sales transactions.

Other Matters

TAIWAN CHELIC CO., LTD. has prepared the individual financial statements for the Years Ended December 31, 2024, and we have issued an unqualified audit report thereon for reference.

Responsibilities of Management and the Governance Unit for the Consolidated Financial Statements

Management's responsibility is for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards, International Accounting Standards, interpretations, and interpretative announcements endorsed and issued into effect by the Financial Supervisory Commission, as well as for maintaining necessary internal control related to the preparation of consolidated financial statements to ensure that they are free from material misstatement, whether due to fraud or error.

When preparing the consolidated financial statements, management's responsibility also includes assessing the ability of the AirTAC Group to continue as a going concern, disclosing, as applicable, matters related to going concern, and using the going concern basis of accounting unless management either intends to liquidate the AirTAC Group or to cease operations, or has no realistic alternative but to do so.

The governance unit of the Group (including the Audit Committee) is responsible for overseeing the financial reporting process.

The responsibilities of the CPA for the audit of the consolidated financial statements.

The purpose of the CPA in auditing the consolidated financial statements is to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report. Reasonable assurance is a high level of assurance, but an audit conducted in accordance with auditing standards does not guarantee that a material misstatement in the consolidated financial statements will be detected. Misstatements may arise from fraud or error. If a misstatement's individual amount or aggregate can reasonably be expected to influence the economic decisions of users of the consolidated financial statements, it is considered material.

In conducting the audit in accordance with auditing standards, we exercised professional judgment and maintained professional skepticism. We also performed the following tasks:

Identify and assess the risks of material misstatement of the consolidated financial statements due to fraud or error; design and implement appropriate responses to the assessed risks; and obtain sufficient and appropriate audit evidence to provide a basis for the audit opinion. Due to fraud potentially involving collusion, forgery, intentional omissions, misrepresentations, or the override of internal control, the risk of not detecting a material misstatement resulting from fraud is higher than that from error.
6 -

Obtain an understanding of internal control relevant to the audit in order to design appropriate audit procedures for the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of the accounting policies used by management and the reasonableness of the accounting estimates and related disclosures.
Based on the audit evidence obtained, draw a conclusion on the appropriateness of management's use of the going concern basis of accounting and whether there is a material uncertainty regarding events or conditions that may cast significant doubt on the AirTAC Group's ability to continue as a going concern. If the CPA believes that such events or conditions create significant uncertainty, they must draw attention to the relevant disclosures in the consolidated financial statements in the audit report, or modify the audit opinion if such disclosures are inadequate. The CPA's conclusion is based on the audit evidence obtained up to the date of the audit report. However, future events or conditions may cause the AirTAC Group to be unable to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the relevant notes, and whether the consolidated financial statements fairly represent the related transactions and events.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities within the Group to express an opinion on the consolidated financial statements. The CPA is responsible for directing, supervising, and executing the audit of the group, and for forming the group audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence under The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and communicate to them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determined those matters that were of most significance in the audit of the Group's consolidated financial statements for the year 2025 and are therefore the key audit matters. We describe these matters in the audit report unless law or regulation precludes public disclosure or, in extremely rare circumstances, we

determines that a specific matter should not be communicated in the report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits.

Deloitte & Touche Taiwan
CPA: Li-Wei Liu
CPA: Cheng-Chuan Yu

Approval Document No. by theFinancial SupervisoryCommission
Jin-Guan-Cheng-Shen-Zi No. 1110348898

Approval Document No. by theSecurities and FuturesCommission
Taiwan-Financial-Securities-Sixth No.0930128050

March26, 2026

TAIWAN CHELIC CO., LTD. and Subsidiaries

Consolidated Balance Sheets

December 31, 2025 and 2024

Unit: In Thousands of New Taiwan Dollars

Code	Assets	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
CURRENT ASSETS
1100	Cash and cash equivalents (Notes 4 and 6)	$ 690,643	15	$ 827,224	19
1110	Financial assets at fair value through profit or loss - current (Notes 4 and 7)	450	-	-	-
1136	Financial assets at amortized cost - current (Notes 4 and 9)	152,864	3	-	-
1150	Notes receivable (Notes 4, 10, and 23)	76,049	2	47,890	1
1160	Notes receivable from related parties (Notes 4, 10, 23, and 30)	-	-	2,239	-
1170	Accounts receivable (Notes 4, 10, and 23)	380,423	8	308,134	7
1180	Accounts receivable from related parties (Notes 4, 10, 23, and 30)	10,618	-	34,594	1
1200	Other receivables (Notes 4 and 10)	2,045	-	1,299	-
1220	Current tax assets (Notes 4 and 25)	8,175	-	9,624	-
130X	Inventories (Notes 4 and 11)	881,693	20	844,405	19
1479	Other current assets (Notes 16 and 30)	69,186	2	66,120	2
11XX	Total current assets	2,272,146	50	2,141,529	49
NON-CURRENT ASSETS
1517	Financial assets at FVTOCI - non-current (Notes 4 and 8)	51,552	1	38,658	1
1600	Property, plant and equipment (Notes 4, 13, and 31)	1,969,775	44	2,008,499	46
1755	Right-of-use assets (Notes 4, 14, and 31)	142,634	3	147,997	3
1821	Intangible assets (Notes Four and 15)	10,691	-	9,434	-
1840	Deferred income tax assets (Notes 4 and 25)	43,442	1	41,866	1
1990	Other non-current assets (Notes 4 and 16)	18,525	1	13,546	-
15XX	Total non-current assets	2,236,619	50	2,260,000	51
1XXX	Total assets	$ 4,508,765	100	$ 4,401,529	100
Code	Liabilities and equity
CURRENT LIABILITIES
2100	Short-term loans (Note 17)	$ 217,440	5	$ 269,560	6
2130	Contract liabilities - current (Notes 4 and 23)	13,909	-	12,129	-
2150	Notes payable (Note 19)	-	-	218	-
2170	Accounts payable (Note 19)	168,572	4	136,010	3
2219	Other payables (Note 20)	121,875	3	112,832	3
2220	Other payables to related parties (Note 30)	443	-	356	-
2230	Income tax payable (Notes 4 and 25)	2,492	-	3,263	-
2280	Lease liabilities - current (Notes 4 and 14)	8,450	-	6,490	-
2321	Bonds payable - current portion (Notes 4, 18, and 31) due within one year	-	-	556,139	13
2322	Long-term borrowings due within one year (Notes 17 and 31)	51,439	1	59,831	1
2399	Other current liabilities (Notes 20 and 30)	8,700	-	1,556	-
21XX	Total current liabilities	593,320	13	1,158,384	26
NON-CURRENT LIABILITIES
2530	Bonds payable (Notes Four, 18, and 31)	474,789	11	-	-
2540	Long-term borrowings (Notes 17 and 31)	476,593	11	309,476	7
2570	Deferred income tax liabilities (Notes 4 and 25)	-	-	746	-
2580	Lease liabilities - non-current (Notes 4 and 14)	11,926	-	15,439	1
2670	Other non-current liabilities (Note 20)	587	-	584	-
25XX	Total non-current liabilities	963,895	22	326,245	8
2XXX	Total liabilities	1,557,215	35	1,484,629	34
EQUITY ATTRIBUTABLE TO THE OWNERS OF THE COMPANY (Note 22)
Share capital
3110	Capital stock	699,876	16	699,840	16
3200	Capital surplus	735,215	16	729,041	16
Retained earnings
3310	Legal reserve	314,038	7	314,038	7
3320	Special reserve	104,621	2	190,924	5
3350	Unappropriated retained earnings	1,075,164	24	975,298	22
3300	Total retained earnings	1,493,823	33	1,480,260	34
3400	Other equity interest	( 65,374 )	( 1 )	( 86,376 )	( 2 )
3500	Treasury stock	( 22,333 )	( 1 )	-	-
31XX	Total equity attributed to the owners of the parent company	2,841,207	63	2,822,765	64
36XX	Non-controlling Interests (Notes 12 and 22)	110,343	2	94,135	2
3XXX	Total equity	2,951,550	65	2,916,900	66
Total liabilities and equity		$ 4,508,765	100	$ 4,401,529	100

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

Chairman:YU, PING-CHENG

Executive officers:YU, PING-CHENG

Accounting Supervisor:SU, CHIH-AN

TAIWAN CHELIC CO., LTD. and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2025 and 2024
Unit: NT$1000, except earnings (losses) per share, which is expressed in NT$1

Code		2025		2024
		Amount	%	Amount	%
4100	NET REVENUE (Notes 4, 23, and 30)
	Sales	$ 1,602,951	100	$ 1,491,488	100
	COST OF REVENUE (Notes 11, 24, and 30)
5110	Cost of sales	( 1,107,590 )	( 69 )	( 1,102,797 )	( 74 )
5900	GROSS PROFIT	495,361	31	388,691	26
6100	OPERATING EXPENSES (Note 24)
	Selling expenses	( 163,460 )	( 10 )	( 162,101 )	( 11 )
6200	Administrative expenses	( 174,024 )	( 11 )	( 152,634 )	( 10 )
6300	Research and development expenses	( 109,276 )	( 7 )	( 109,247 )	( 7 )
6450	Gain on reversal of expected credit losses (Impairment) (Notes 4 and 10)	614	-	( 5,781 )	( 1 )
6000	Total operating expenses	( 446,146 )	( 28 )	( 429,763 )	( 29 )
6900	INCOME FROM OPERATIONS (loss)	49,215	3	( 41,072 )	( 3 )
7100	NON-OPERATING INCOME AND EXPENSES (Notes 4 and 24)
	Interest revenue	6,630	-	6,438	1
7010	Other income	13,496	1	14,383	1
7020	Other gains and losses	( 2,074 )	-	12,565	1
7050	FINANCE COSTS	( 30,472 )	( 2 )	( 29,612 )	( 2 )
7000	Total non-operating income and expenses	( 12,420 )	( 1 )	3,774	1
7900	PROFIT (LOSS) BEFORE INCOME TAX	36,795	2	( 37,298 )	( 2 )
7950	INCOME TAX EXPENSE (Notes 4 and 25)	( 7,977 )	-	( 13,445 )	( 1 )
8200	NET INCOME (LOSS) FOR THE YEAR	28,818	2	( 50,743 )	( 3 )

(Continued)

Code		2025		2024
		Amount	%	Amount	%
	OTHER COMPREHENSIVE INCOME (LOSS) (Notes 4, 22, and 25)
8310	Items not reclassified to income:
8316	Unrealized gain/ (loss) on investments in equity instruments at FVTOCI	11,252	1	15,874	1
	Items that may be reclassified subsequently to income:
8361	Exchange differences from the translation of financial statements of foreign operations	13,140	-	91,103	6
8399	Income tax related to items that may be reclassified to profit or loss	(2,437)	-	(17,607)	(1)
8360		10,703	-	73,496	5
8300	Other comprehensive income, net of income tax for the year	21,955	1	89,370	6
8500	TOTAL COMPREHENSIVE INCOME FOR THE YEAR	$50,773	3	$38,627	3
8600	Net income (loss) attributable to:
8610	The Company	$13,563	1	($59,908)	(4)
8620	Non-controlling interest	15,255	1	9,165	1
		$28,818	2	($50,743)	(3)
	TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
8710	The Company	$34,565	2	$26,395	2
8720	Non-controlling interest	16,208	1	12,232	1
8700		$50,773	3	$38,627	3
	EARNINGS (LOSS) PER SHARE (Note 26)
	From continuing operations
9710	Basic	$0.19		($0.86)
9810	Diluted	$0.19

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

Chairman: YU, PING-CHENG

Executive officers: YU, PING-CHENG

Accounting Supervisor: SU, CHIH-AN

TAIWAN CHELIC CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity

Years Ended December 31, 2025 and 2024

Unit: In Thousands of New Taiwan Dollars

Code		Equity attributable to the owners of the Company
		Share capital	Capital surplus	Legal reserve	Special reserve	Unappropriated retained earnings	Unrealized Gain (Loss) on Financial Assets at FVTOC	Exchange differences from the translation of financial statements of foreign operations	Treasury stock	Non-controlling interest	Total equity
A1	Balance as of January 1, 2024	$ 693,132	$ 733,519	$ 314,038	$ 155,050	$ 1,071,080	($ 293)	($ 172,386)	$ -	$ 87,307	$ 2,881,447
	Appropriation of earnings for the year 2023 (Note 22)
B3	Special reserve	-	-	-	35,874	( 35,874 )	-	-	-	-	-
O1	Cash dividends to subsidiary shareholders	-	-	-	-	-	-	-	-	( 5,452 )	( 5,452 )
O1	Increase in non-controlling interests (Note 22)	-	-	-	-	-	-	-	-	48	48
T1	Capital surplus distributed as cash dividends to shareholders	-	( 34,830 )	-	-	-	-	-	-	-	( 34,830 )
I1	Convertible bonds conversion (Notes 18 and 22)	6,708	30,352	-	-	-	-	-	-	-	37,060
D1	Net income (loss) for the Year Ended December 31, 2024	-	-	-	-	( 59,908 )	-	-	-	9,165	( 50,743 )
D3	Other comprehensive income (loss), net of income tax for the Year Ended December 31, 2024 (Note 22)	-	-	-	-	-	15,874	70,429	-	3,067	89,370
D5	Total comprehensive income for 2024	-	-	-	-	( 59,908 )	15,874	70,429	-	12,232	38,627
Z1	Balance as of December 31, 2024	699,840	729,041	314,038	190,924	975,298	15,581	( 101,957 )	-	94,135	2,916,900
	Appropriation of earnings for the year ended December 31, 2024 (Note 22)
B3	Special reserve	-	-	-	( 86,303 )	86,303	-	-	-	-	-
C15	Capital surplus distributed as cash dividends to shareholders (Note 22)	-	( 34,992 )	-	-	-	-	-	-	-	( 34,992 )
C5	Recognition of equity component from the issuance of convertible bonds (Notes 18 and 22)	-	41,002	-	-	-	-	-	-	-	41,002
I1	Convertible bonds conversion (Note 18)	36	164	-	-	-	-	-	-	-	200
D1	Net profit for 2025	-	-	-	-	13,563	-	-	-	15,255	28,818
D3	Other comprehensive income (loss), net of income tax for the Years Ended December 31, 2025 (Note 22)	-	-	-	-	-	11,252	9,750	-	953	21,955
D5	Total comprehensive income for 2025	-	-	-	-	13,563	11,252	9,750	-	16,208	50,773
L1	Treasury stock acquired (Note 22)	-	-	-	-	-	-	-	( 22,333 )	-	( 22,333 )
Z1	Balance as of December 31, 2025	$ 699,876	$ 735,215	$ 314,038	$ 104,621	$ 1,075,164	$ 26,833	($ 92,207 )	($ 22,333 )	$ 110,343	$ 2,951,550

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

Chairman: YU, PING-CHENG

Executive officers: YU, PING-CHENG

Accounting Supervisor: SU, CHBH-AN

TAIWAN CHELIC CO., LTD. and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2025 and 2024
Unit: In Thousands of New Taiwan Dollars

Code		2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
A10000	Profit (loss) before income tax	$ 36,795	($ 37,298)
A20010	Profit and loss items
A20100	Depreciation expense	165,558	167,826
A20200	Amortization expenses	3,747	3,608
A20300	Expected credit (gains on reversal) losses	( 614)	5,781
A20400	Net loss on financial assets and liabilities at FVTPL	441	-
A20900	Finance costs	30,472	29,612
A21200	Interest revenue	( 6,630)	( 6,438)
A21300	Dividend income	-	( 722)
A22500	Gain on disposal of property, plant and equipment	( 2,879)	( 6,207)
A23700	Write-downs of inventories (gain on reversal)	4,949	2,286
A24100	Unrealized foreign exchange loss (gain)	8,059	( 4,204)
A29900	Gains on lease modifications	( 1)	-
A30000	Net changes in operating assets and liabilities:
A31130	Notes receivable	( 26,946)	3,998
A31140	Notes receivable from related parties	2,167	( 2,227)
A31150	Accounts Receivable	( 68,076)	( 30,926)
A31160	Accounts receivable from related parties	23,072	( 10,980)
A31180	Other receivables	( 150)	1,023
A31200	Inventories	( 37,431)	86,294
A31230	Prepayments	( 4,186)	( 10,228)
A31240	Other current assets	1,378	924
A32125	Contract liabilities	1,662	3,405
A32130	Notes payable	( 218)	218
A32150	Accounts payable	30,342	36,012
A32160	Accounts payable to related parties	-	( 1,827)
A32180	Other payables	8,577	3,351
A32190	Other payables to related parties	82	( 7)
A32230	Other current liabilities	396	243
A33000	Cash inflow from operations	170,566	233,517
A33100	Interest received	6,028	6,415
(Continued)

13 -

(Continued)
Code		2025	2024
A33300	Interest paid	(19,032)	(20,060)
A33500	Income tax paid	(10,714)	(6,419)
AAAA	Net cash generated by operating activities	146,848	213,453
CASH FLOWS FROM INVESTING ACTIVITIES
B00040	Acquisitions of Financial assets at amortized cost	(147,322)	-
B00100	Acquisitions of financial assets at fair value through other comprehensive income	(1,080)	-
B02700	Acquisition of property, plant and equipment	(104,682)	(69,737)
B02800	Proceeds from disposal of property, plant and equipment	6,482	33,062
B02900	Increase in sales revenue received in advance - Disposal of property	6,500	-
B03700	Refundable deposits paid increase	(230)	(331)
B04500	Purchase of intangible assets	(3,432)	(701)
B06800	Decrease in other non-current assets	463	1,246
B07100	Increase in prepayments for equipment	(15,538)	(7,144)
B07600	Dividends received	-	722
BBBB	Net cash used in investing activities	(258,839)	(42,883)
CASH FLOWS FROM FINANCING ACTIVITIES
C00200	Decrease in short-term loans	(51,665)	(20,000)
C01200	Convertible bonds issuance	514,385	-
C01300	Repayment of bonds	(561,900)	-
C01600	Proceeds from long-term bank loans	490,000	-
C01700	Repayments of long-term borrowings	(331,275)	(33,529)
C04020	Repayment of the principal portion of lease liabilities	(8,189)	(7,224)
C04500	Cash dividends paid	(34,992)	(34,830)
C04900	Cost of treasury stock acquired	(22,333)	-
C05800	Increase in non-controlling interests	-	48
C09900	Payments for transaction costs attributable to the issuance of bonds	(6,722)	-
C09900	Payment of Cash dividends of non-controlling interests	-	(5,452)
CCCC	Net cash used in financing activities	(12,691)	(100,987)
DDDD	Effect of exchange rate changes on cash and cash equivalents	(11,899)	17,152

(Continued)

15 -

(Continued)

Code		2025	2024
EEEE	(DECREASE) ADDITIONS IN CASH AND CASH EQUIVALENTS	( 136,581 )	86,735
E00100	CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	827,224	740,489
E00200	CASH AND CASH EQUIVALENTS, END OF PERIOD	$ 690,643	$ 827,224

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

Chairman: YU, PING-CHENG Executive officers: YU, PING-CHENG Accounting Supervisor: SU, CHIH-AN

TAIWAN CHELIC CO., LTD. and Subsidiaries
Notes to the Consolidated Financial Statements
Years Ended December 31, 2025 and 2024
(Otherwise Specified, amounts are in NT$ Thousands.)

I. Company History

(I) TAIWAN CHELIC CO., LTD. (hereinafter referred to as "The Company", and its controlled entities collectively referred to as the "Group") was approved for establishment by the Ministry of Economic Affairs on November 19, 1986, with an initial capital of NTD 2,000 thousand. Over the years, through capital increases, the current total capital amounts to NTD 699,876 thousand. The Company is primarily engaged in the design, manufacture, and sale of various pneumatic and hydraulic machinery equipment and parts, as well as electronic components.

(II) Since October 27, 2015, The Company's shares have been listed and traded on the Taiwan Stock Exchange (TWSE).

(III) The consolidated financial statements are expressed in the functional currency of the Parent Company, which is New Taiwan dollars (TWD).

II. Approval Date and Procedures of the Financial Statements

The consolidated financial statements were authorized by the Board of Directors on March 4, 2026.

III. Application of New, Revised, and Amended Standards and Interpretations

(I) Initial application of the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC) and SIC Interpretations (SIC) (collectively "IFRS" (International Financial Reporting Standards) hereinafter) endorsed and put into effect by the Financial Supervisory Commission ("FSC" hereinafter)

Amendment to IAS 21 "Lack of Exchangeability"

The application of the Amendment to IAS 21 "Lack of Exchangeability" will not have a material impact on the Group's accounting policies.

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(II) The IFRS Accounting Standards endorsed by the FSC applicable in 2026

New, Amended and Revised Standards and Interpretations	Effective Date Issued by IASB
Amendments to IFRS 9 and IFRS 7 "Amendments to Classification and Measurement of Financial Instruments," regarding amendments to the application guidance on the derecognition of financial liabilities.	January 1, 2026
Amendments to IFRS 9 and IFRS 7 "Contracts Involving Reliance on Natural Power"	January 1, 2026
Annual Improvements to IFRS Standards – Volume 11	January 1, 2026
IFRS 17 "Insurance Contracts" (including the 2020 and 2021 amendments)	January 1, 2023

As of the date the consolidated financial statements were approved and authorized for issue, the Group assessed that the amendments to Others will not have a material impact on the financial position and financial performance.

(III) IFRS Accounting Standards Issued by the IASB but Not Yet Endorsed and Issued into Effective by the FSC

New, Amended and Revised Standards and Interpretations	Effective Date Issued by IASB (Note 1)
Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture"	To be determined by IASB
IFRS 18 "Presentation and Disclosures in Financial Statements"	January 1, 2027 (Note 2)
IFRS 19 "Subsidiaries without Public Accountability: Disclosures" (including the 2025 amendments)	January 1, 2027
Amendment to IAS 21 "Translation into a Presentation Currency of a Hyperinflationary Economy"	January 1, 2027

Note 1: Unless otherwise stated, the aforementioned New, Amended and Revised Standards and Interpretations are effective for annual reporting periods beginning after the respective dates.

Note 2: On September 25, 2025, the FSC announced that companies in our country should apply IFRS18 starting January 1, 2028, and they may choose to apply it early once it is endorsed by the FSC.

IFRS 18 "Presentation and Disclosures in Financial Statements" and related supporting amendments

IFRS 18 will replace IAS 1 "Presentation of Financial Statements", and the main changes in the standard include:

The income statement should classify profit and loss items into operating, investing, financing, income tax, and discontinued unit categories.
The income statement should report operating profit or loss, profit or loss before financing and tax, as well as subtotals and totals of profit or loss.
Provide guidelines to enhance aggregation and segmentation rules: The Group must identify assets, liabilities, equity, income, expenses, and financing cash flows arising from individual transactions or other matters, and classify and aggregate them based on common characteristics. This ensures that each line item presented in the primary financial statements has at least one similar characteristic. Items with dissimilar characteristics should be further segmented in the primary financial statements and notes. The Group designates such Items as "Others" only when a more informative label cannot be identified.
Additions to the disclosure of performance measurement as defined by management: When the Group engages in public communication outside of the financial statements and communicates with users of the financial statements regarding management's perspective on a particular aspect of the Group's overall financial performance, it should disclose in a single note to the financial statements the relevant information about performance measurements defined by management. This includes the description of the measurement, how it is calculated, its reconciliation with subtotals or totals as defined by IFRS accounting standards, and the INCOME TAX and Non-controlling Interests impacts of the relevant reconciliation items.

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

When a consolidated company prepares the CASH FLOWS FROM OPERATING ACTIVITIES using the indirect method, the net income should be used as the starting point for adjustments.
Interest received and dividends received by the Group should be classified as investing activities, while interest paid and dividends paid should be classified
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as financing activities. If the Group assesses that it has specific main operating activities, it needs to consider the types of dividend income, interest income, and interest expense reported in the income statement to determine the classification of dividends received, interest received, and interest paid in the statement of cash flows. However, each of the above cash flows can only be classified into a single activity in the statement of cash flows.

Apart from the aforementioned impacts, as of the date the consolidated financial statements were approved and authorized for issue, the Group is still evaluating the impact of the amendments to various standards and interpretations on its financial position and financial performance. The related impact will be disclosed upon completion of the evaluation.

IV. Summary of Significant Accounting Policies

(I) Compliance Statement

The accompanying consolidated financial statements have been prepared in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs endorsed and issued into effect by the FSC.

(II) Basis of Preparation

Except for financial instruments measured at fair value, the consolidated financial statements are prepared on a historical cost basis.

Fair value measurement inputs are classified into Level 1, 2, and 3 inputs based on the degree to which an input is observable and the significance of the input:

Level 1 inputs are quoted prices (unadjusted) for identical assets or liabilities in active markets that can be accessed on the measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 inputs are unobservable inputs for the asset or liability.

(III) Criteria for classification of assets and liabilities as current or non-current

Current assets include:

Assets that are held mainly for trading purposes;
Assets expected to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (excluding those restricted for settlement or exchange of liabilities beyond 12 months after the balance sheet date).
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Current liabilities include:

Liabilities held primarily for trading purposes;
Liabilities due for settlement within 12 months after the balance sheet date (even if a long-term refinancing or rescheduling payment agreement has been completed after the balance sheet date and before the authorization of financial statements are still classified as current liabilities), and
Liabilities for which there is no substantive right to defer settlement for at least 12 months after the balance sheet date.

Assets or liabilities that do not belong to the above current assets or current liabilities are classified as non-current assets or non-current liabilities.

(IV) Basis of consolidation

The consolidated financial statements include the financial reports of the Company and the entities controlled by the Company (Subsidiaries). The consolidated statements of comprehensive income have incorporated the operating results of subsidiaries acquired or disposed of from the acquisition date or until the disposal date during the period. The financial statements of the subsidiaries have been adjusted to ensure their accounting policies are consistent with those of the Group. Intercompany transactions, account balances, income, and expenses have been fully eliminated during the preparation of the consolidated financial statements. The total comprehensive income of the Subsidiary is attributable to the Company and Non-controlling Interests, even if the Non-controlling Interests result in a deficit balance.

When changes in ownership interests in subsidiaries by the Group do not result in losing control, they shall be treated as equity transactions. The carrying amounts of the Group and non-controlling interests have been adjusted to reflect their changes in the subsidiary's relative equity. The difference between the adjusted amount of Non-controlling Interests and the Fair Value of the consideration paid or received is directly recognized as equity and attributed to the owners of the Company.

For details of the subsidiaries, shareholding ratio, and business items, please refer to Note 12, Table 6, and Table 7.

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(V) Foreign Currencies (In Thousands)

When preparing financial statements, transactions in currencies other than the entity's functional currency (foreign currencies) are translated into the functional currency using the exchange rate on the transaction date.

Foreign currency monetary items are translated at the closing exchange rate on each balance sheet date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items in foreign currencies measured at fair value are translated using the exchange rate on the date the fair value is determined, and the resulting exchange differences are recognized in current profit or loss, except for those changes in fair value recognized in other comprehensive income or loss, where the resulting exchange differences are included in other comprehensive income.

Non-monetary items in foreign currencies measured at historical cost are translated using the exchange rate on the transaction date and are not retranslated.

When preparing consolidated financial statements, the ASSETS and liabilities of foreign operations (including subsidiaries with different operating currencies or located in different countries from the Parent company) are translated into TWD at the exchange rate on each balance sheet date. Income and expense items are translated at the average exchange rate for the period, and the resulting exchange differences are recognized in other comprehensive income or loss. And attributed separately to the Company and Non-controlling Interests.

(VI) Inventories

Inventories include raw materials, finished goods, work in process, and merchandise. Inventories are measured at the lower of cost and net realizable value. When comparing cost with net realizable value, it is based on an item by item basis, except for inventories of the same category. Net realizable value is the estimated selling price in the ordinary course of business, minus the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories is calculated using the weighted average method.

(VII) Property, plant and equipment

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

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Property, plant and equipment under construction are recognized at cost less accumulated impairment. Cost includes professional service fees and borrowing costs that qualify for capitalization. These assets are classified into the appropriate categories of property, plant and equipment and begin depreciation when they are completed and reach the expected state of use.

Except for owned land, which is not depreciated, the remaining property, plant and equipment are depreciated on a straight-line basis, and each significant part is depreciated separately. The Group reviews the estimated useful lives, residual values, and depreciation methods at least at the end of each annual reporting period, and applies the changes in accounting estimates prospectively.

When property, plant and equipment are derecognized, the difference between the net proceeds from disposal and the asset carrying amount is recognized in profit or loss.

(VIII) Intangible assets

Acquired separately

Separate acquisitions of intangible assets with finite useful lives are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment. Intangible assets are amortized on a straight-line basis over their useful lives. The Group reviews the estimated useful lives, residual values, and amortization methods at least at the end of each annual reporting period, and applies the changes in accounting estimates prospectively.

Derecognition

When intangible assets are derecognized, the difference between the net proceeds from disposal and the Asset Carrying Amount is recognized in profit or loss for the current period.

(IX) Impairment of property, plant and equipment, right-of-use assets and intangible assets.

The Group assesses at each balance sheet date whether there is any indication that property, plant and equipment, right-of-use assets and intangible assets may be impaired. If any indication of impairment exists, the recoverable amount of the asset is estimated. If the recoverable amount of an individual asset cannot be estimated, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

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The recoverable amount is the higher of the fair value less costs of sale and the value in use. When the recoverable amount of an individual asset or a cash-generating unit is less than its carrying amount, the carrying amount of that asset or cash-generating unit is adjusted down to its recoverable amount, and the impairment loss is recognized in profit or loss.

When an impairment loss is reversed in subsequent periods, the carrying amount of the asset or cash-generating unit is adjusted up to its revised recoverable amount. However, the increased carrying amount should not exceed the carrying amount that would have been determined (net of amortization or depreciation) had no impairment loss been recognized in prior years. The reversal of impairment loss is recognized in profit or loss.

(X) Financial instruments

Financial assets and financial liabilities are recognized in the CONSOLIDATED BALANCE SHEETS when the Group becomes a party to the contractual provisions of the instruments.

Financial assets or financial liabilities other than those measured at fair value through profit or loss are initially recognized at the fair value plus the transaction costs that can be directly attributable to acquisition or issuance of such financial assets or liabilities. Any transaction cost directly attributable to the acquisition or issuance of the financial assets or financial liabilities measured at fair value through profit or loss is immediately recognized in profit or loss.

Financial assets

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

(1) Type of measurement

The types of financial assets held by the consolidated company are financial assets at FVTPL, financial assets at amortized costs, and investments in equity instruments at FVTOCI.

A. Financial assets measured at FVTPL

Financial assets at FVTPL are measured at fair value, and any gains or losses from remeasuring are recognized in other gains and losses. Please refer to Note 29 for the determination of Fair Value.

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B. Financial assets measured at cost after amortization

For the consolidated company, investments in financial assets are classified as financial assets at amortized cost if they meet the following two conditions:

a. The financial assets are held within a business model whose objective is collecting contractual cash flows; and
b. The contractual terms give rise to specified date to cash flow that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortized cost (including cash and cash equivalents, notes receivable and accounts receivable (including related parties), other receivables (excluding tax refund receivables), and refundable deposits) are measured at amortized cost, which is the gross carrying amount determined using the effective interest method minus any impairment loss. Any foreign exchange gains or losses are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except under the following two circumstances:

a. For purchased or originated credit-impaired financial assets, interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of the financial assets.
b. For financial assets that were not purchased or originated as credit-impaired but subsequently became credit-impaired, interest income should be calculated by multiplying the effective interest rate by the amortized cost of the financial assets starting from the subsequent reporting period after becoming credit-impaired.

Cash equivalents include highly liquid time deposits, banker's acceptances, and commercial paper that are convertible to known amounts of cash, have original maturities of three months or less from the date of acquisition, and are subject to an

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insignificant risk of changes in value, held for fulfilling short-term cash commitments.

C. Investments in equity instruments at FVTOCI

At the time of initial recognition, the consolidated company may make an irrevocable election to designate investments in equity instruments that are neither held for trading nor contingent consideration recognized by an acquirer in a business combination to be measured at fair value through other comprehensive income.

Investment in equity instruments measured at fair value through other comprehensive income is measured at fair value. Subsequent changes in the fair value are recognized in other comprehensive income and accumulated in other equity. Upon disposal of investments, the cumulative gain or loss is transferred directly to retained earnings and is not reclassified to profit or loss.

Dividends from investments in equity instruments at FVTOCI are recognized in profit or loss when the right to receive payment is established in the consolidated company, unless the dividend clearly represents a recovery of part of the investment cost.

(2) Impairment of financial assets

On each balance sheet date, the merged company evaluates the expected credit loss for impairment of financial assets at amortized cost (including accounts receivable).

Loss allowance for accounts receivable is recognized based on the lifetime expected credit losses (ECL). Other financial assets are first assessed to determine if there has been a significant increase in credit risk since initial recognition. If there is no significant increase, a loss allowance is recognized based on the 12 months expected credit loss. If there is a significant increase, a loss allowance is recognized based on the lifetime expected credit loss.

Expected credit losses are a probability-weighted estimate of credit losses, with the respective risks of default used as the weighting. 12-month expected credit losses represent the expected credit losses

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that result from default events on a financial instrument that are possible within 12 months after the reporting date, whereas lifetime expected credit losses represent the expected credit losses that result from all possible default events over the expected life of the financial instrument.

For the purposes of internal credit risk management, and without considering the collateral held, the consolidated company determines that the following situations represent a financial asset being in default:

A. There is internal or external information indicating that the debtor is unlikely to repay the debt.

B. More than 180 days past due, unless there is reasonable and verifiable information indicating that a delayed default criterion is more appropriate.

The impairment loss of all financial assets is reduced from their carrying amount through an allowance account.

(3) Derecognition of financial assets

The Group derecognizes financial assets only when the contractual rights to the cash flows from the financial asset expire or when the financial asset has been transferred and substantially all the risks and rewards of ownership have been transferred to another entity.

When financial assets at amortized cost are fully derecognized, the difference between their carrying amount and the received considerations is recognized in profit or loss. For derecognition of the entire investments in equity instruments measured at fair value through other comprehensive income, the cumulative gain or loss is directly transferred to retained earnings and not reclassified as profit or loss.

Equity instruments

The debt and equity instruments issued by the merged company are classified as financial liabilities or equity based on the substance of the contractual agreements and the description of financial liabilities and equity instruments.

Equity instruments issued by the consolidated company are recognized at the amount of the proceeds received, net of directly attributable issuance cost.

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The re-acquisition of the Company's own equity instruments is recognized and deducted under equity. Purchases, sales, issuance, or cancellation of the Company's own equity instruments are not recognized in profit or loss.

Financial liabilities

(1) Subsequent measurement

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

(2) Derecognition of financial liabilities

When financial liabilities are derecognized, the difference between their carrying amount and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

Convertible corporate bonds

The compound financial instruments (convertible bonds) issued by the merged company are classified separately into financial liabilities and equity at initial recognition based on the substance of the contractual agreements and the definition of financial liabilities and equity instruments.

At initial recognition, the fair value of the liability component is estimated using the prevailing market interest rate of a similar non-convertible instrument and is subsequently measured at amortized cost using the effective interest method until conversion or the maturity date. The liability component containing an embedded derivative that is not an equity component is measured at fair value.

The conversion option classified as equity is determined as the residual amount, being the difference between the fair value of the compound instrument as a whole and the fair value of the liability component determined separately. It is recognized in equity, net of income tax, and is not subsequently remeasured. When the conversion option is exercised, the related liability component and the amount in equity will be transferred to share capital and capital surplus - premium on stock. If the conversion option of the convertible bonds remain unexercised at the maturity date, the amount recognized in equity will be transferred to capital surplus - premium on stock.

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The related transaction costs of the issuance of convertible bonds are allocated to the liability component (included in the carrying amount of the liability) and the equity component (included in equity) in proportion to the allocated total proceeds.

5. Derivatives

The derivative financial instruments entered into by the merged company are options related to convertible bonds.

Derivative financial instruments are initially recognized at fair value when the derivative contract is entered into, and subsequently remeasured at fair value at each balance sheet date. Any gains or losses from subsequent measurement are directly recognized in profit or loss. However, for derivative financial instruments designated as and qualifying for effective hedging instruments, the timing of recognition in profit or loss depends on the nature of the hedging relationships. When the fair value of derivative financial instruments is positive, they are categorized as financial assets; when the fair value is negative, they are categorized as financial liabilities.

If the derivative is embedded in the host contract of an asset within the scope of IFRS 9 "Financial Instruments", the classification of the financial asset is determined by the contract as a whole. If derivative financial instruments are embedded in host contracts of assets not within the scope of IFRS 9 for financial assets (e.g., as embedded in host contracts of financial liabilities), and the embedded derivative instruments meet the definition of derivative financial instruments, with risks and characteristics that are not closely related to those of the host contract, and the hybrid contract is not measured at measured at fair value through profit or loss, such derivative financial instruments are treated as separate derivative.

(XI) Recognition of revenue

After identifying the performance obligations in customer contracts, the Group allocates the transaction price to each performance obligation and recognizes revenue when each performance obligation is satisfied.

Net revenue from sale of goods

Net revenue from sale of goods mainly comes from the sale of pneumatic equipment. Since the customer has the right to the predetermined price and usage of the goods upon shipment or arrival at the customer's designated location, and

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assumes the risk of product obsolescence, the Group recognizes revenue and accounts receivable at that point in time. Advance receipts are recognized as contract liabilities before the goods are delivered.

For materials sent out for processing, the significant risks and rewards of ownership of the processed goods are not transferred, so the delivery of materials for processing is not accounted for as sales.

(XII) Leases

On the contract inception date, the merged company assesses whether the contract is (or contains) Leases Modifications.

The Group as lessor

Leases are classified as finance leases when the terms of the lease transfer substantially all the risks and rewards incidental to ownership of the underlying asset to the lessee. All other leases are classified as operating leases.

The Group as lessee

Except for lease payments on low-value underlying asset leases and short-term leases, to which recognition exemptions apply and are recognized as expenses on a straight-line basis over the lease term, other leases are recognized as right-of-use assets and lease liabilities on the lease commencement date.

Right-of-use assets are initially measured at cost (including the original measurement amount of lease liabilities) and subsequently measured at cost less accumulated depreciation and accumulated impairment, adjusted for any remeasurement of the lease liabilities.

Right-of-use assets are subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use assets or the end of the lease term.

Lease liabilities are initially measured at the present value of lease payments (including fixed payments). If the lease implied interest rate is easy to determine, the lease payment is discounted according to the said implied interest rate. If the rate is not readily determinable, the lessee's incremental borrowing rate is used.

Subsequently, lease liabilities are measured on an amortized cost basis using the effective interest method, and interest expense is allocated over the

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lease term. If a change in the lease term results in a change in future lease payments, the Group remeasures the lease liabilities and correspondingly adjusts the right-of-use assets. However, if the carrying amount of the right-of-use assets has been reduced to zero, the remaining remeasurement amount is recognized in profit or loss. Lease liabilities are presented separately in the CONSOLIDATED BALANCE SHEETS.

(XIII) Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as part of the cost of such assets until substantially all the activities necessary to prepare the assets for their intended use or sale are complete.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on a qualifying asset is deducted from the borrowing costs eligible for capitalization.

Apart from the aforementioned, all other borrowing costs are recognized in profit or loss in the period in which they are incurred.

(XIV) Government grants

GOVERNMENT GRANTS are recognized only when there is reasonable assurance that the Group will comply with the conditions attached to the GOVERNMENT GRANTS and that the grants will be received.

If GOVERNMENT GRANTS are intended to compensate for expenses or losses already incurred, or to provide immediate financial support to the Group without future related costs, they are recognized in profit or loss in the period in which they become receivable.

(XV) Employee benefits

Short-term employee benefits

The liabilities related to short-term employee benefits are measured at the undiscounted amount expected to be paid in exchange for employee services.

Retirement benefits

The pension under defined contribution plans is recognized as an expense over the period in which the employee provides services, according to the amount that should be contributed.

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(XVI)Income tax

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

Current income tax

The Group determines current income (loss) based on the regulations established by the tax jurisdictions in which it files income tax returns and calculates the payable (recoverable) income tax accordingly.

The additional income tax on unappropriated earnings, calculated according to the Income Tax Act of the Republic of China, is recognized in the year the shareholders' meeting resolves.

Income tax adjustments on prior years are included in the current income tax.

Deferred income tax

Deferred income tax arises from temporary differences generated between the carrying amounts of assets and liabilities and the tax bases used to calculate taxable income.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when it is highly probable that there will be taxable income available to utilize deductible temporary differences.

Taxable temporary differences associated with investments in Subsidiaries are recognized as Deferred income tax liabilities, except where the Group is able to control the timing of the reversal of the temporary differences and it is highly probable that the temporary differences will not reverse in the foreseeable future. Deductible temporary differences related to such investments are recognized as deferred income tax assets only to the extent that it is highly probable that there will be sufficient taxable income to realize the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred income tax assets is reviewed at each balance sheet date, and it is reduced to the extent that it is no longer highly probable there will be sufficient taxable income to recover all or part of the assets. The previously unrecognized deferred income tax assets are also reviewed at each balance sheet date and are increased to the extent that it is

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highly probable that future taxable income will be available to recover all or part of the assets.

Deferred income tax assets and liabilities are measured at the tax rates expected to apply in the period in which the liability is settled or the asset realized, based on tax rates and laws that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax consequences expected by the merged company, based on the manner in which the carrying amounts of its assets and liabilities are expected to be recovered or settled at the balance sheet date.

Current and deferred income tax

Current and deferred income tax is recognized in profit or loss, except for current and deferred income tax related to items recognized in other comprehensive income or loss or directly in equity, which are recognized respectively in other comprehensive income or loss or directly in equity.

V. Main Source of Significant Accounting Judgment, Estimation, and Assumption Uncertainties

When adopting accounting policies, for those not easily obtainable from other sources, management must make judgments, estimates, and assumptions based on historical experience and other relevant factors. Actual results may differ from the estimates.

When developing significant accounting estimates, the Group considers the potential impact of inflation, market interest rate, and exchange rate fluctuations in the estimation of financing cash flow, growth rates, discount rates, profitability, and other relevant significant estimates. Management will continuously review the estimates and underlying assumptions.

VI. Descriptions of Material Accounting Items

Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand and revolving fund	$ 1,154	$ 930
Check deposits and demand deposits	567,289	769,749
Cash equivalents (with original maturities within 3 months)
Banker's acceptance	15,203	6,042
Commercial paper	51,028	50,502
Bank time deposits	55,969	1

$ 690,643

$ 827,224

The interest rate ranges for bank demand deposits, commercial paper, and bank time deposits on the balance sheet date are as follows:

	December 31, 2025	December 31, 2024
Bank demand deposits	0.0001%~1.8500%	0.0001%~1.8500%
Commercial paper	1.24%	1.1700%
Bank time deposits	0.75%~1.72%	1.0500%

VII. Financial instruments at FVTPL

	December 31, 2025	December 31, 2024
Financial assets - current
Derivative financial instruments mandatorily measured at FVTPL (not designated as hedging)
- Options related to convertible bonds (Note 18)	$ 450	$ -

VIII. Financial assets measured at FVOCI

	December 31, 2025	December 31, 2024
Non-current
Investments in domestic equity instruments
Unlisted shares	$ 1,523	$ -
Investments in foreign equity instruments
Unlisted shares	50,029	38,658
	$ 51,552	$ 38,658

The Group has invested in the ordinary shares of the aforementioned company for medium to long-term strategic purposes and expects to profit through long-term investment. The management of the Group believes that including short-term fair value fluctuations of these investments in profit or loss would not consistent with the aforementioned long-term investment plans. Therefore, they have elected to designate these investments to be measured at fair value through other comprehensive income.

In November 2025, the Group participated in a capital increase of an unlisted domestic company with an investment of NT$1,080 thousand. It was designated as financial assets at FVTOCI due to its medium to long-term strategic investment purpose.

IX. Financial assets measured at cost after amortization

	December 31, 2025	December 31, 2024
Current
Time deposits with original maturities of more than 3 months	$ 152,864	$ -

(I) As of December 31, 2025, the interest rates on time deposits with original maturities of more than 3 months were 1.20% to 1.50%.

(II) The debt instruments invested by the consolidated company are financial assets at amortized cost:

	December 31, 2025	December 31, 2024
Total book value	$ 152,864	$ -
Loss allowance	-	-
	$ 152,864	$ -

The credit risk of bank deposits of the Group is measured and monitored by the Group's finance department. Since the Group's counterparties and transactions are with creditworthy banks and financial institutions or corporate entities with investment grade ratings, there are no significant performance concerns and hence no significant credit risk.

The Company considers the historical default status of the debtor, current financial conditions and industry outlook forecasts to measure the 12-month expected credit loss or lifetime expected credit loss on investments in debt instruments. As of December 31, 2025 and 2024, the consolidated company assessed the expected credit loss ratio of the investments in debt instruments held to be 0%.

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X. Notes receivable, accounts receivable, and other receivables

	December 31, 2025	December 31, 2024
Notes receivable
Amortized cost
Total book value	$ 76,049	$ 47,890
Less: loss allowance	-	-
	$ 76,049	$ 47,890
Notes receivable from related parties (Notes Four, 10, 23, and 30)	$ -	$ 2,239
Accounts Receivable
Amortized cost
Total book value	$ 395,475	$ 323,761
Less: loss allowance	( 15,052 )	( 15,627 )
	$ 380,423	$ 308,134
Accounts receivable from related parties	$ 10,618	$ 34,594
Overdue receivables
Overdue receivables	$ 250	$ 250
Less: loss allowance	( 250 )	( 250 )
	$ -	$ -
Other receivables
Tax refund receivables	$ 5	$ -
Interests receivable	659	36
Others	1,381	1,263
	$ 2,045	$ 1,299

(I) Notes receivable/Notes receivable from related parties (Notes Four, 10, 23, and 30)

The aging analysis of notes receivable and the loss allowance measured by the provision matrix of the Group are as follows:

	December 31, 2025	December 31, 2024
	Not past due	Not past due
Expected Credit Loss Ratio	0%	0%
Total book value	$ 76,049	$ 50,129
Less: Allowance for uncollectible accounts (Allowance for expected lifetime credit losses)	-	-
Amortized cost	$ 76,049	$ 50,129

(II) Accounts receivable/Accounts receivable from related parties

The average payment term granted by the consolidated company for sales of goods is 30 to 180 days, and the accounts receivable are non-interest bearing. The Group uses other publicly available financial information and historical transaction records to rate its major customers. The Group continuously monitors credit exposure and counterparties' credit categories and diversifies the total transaction amount among different customers with qualified credit ratings. Each year, the credit limits for counterparties are reviewed and approved to manage credit exposure.

The merged company recognizes a loss allowance for receivables based on the lifetime expected credit loss. Lifetime expected credit losses are calculated using a provision matrix that takes into account the customer's past default records, current financial conditions, industry economic conditions, as well as GDP forecasts and industry outlooks. As the historical experience of credit losses of the merged company shows no significant difference in the loss patterns among different customer groups, the provision matrix does not further distinguish the customer base; instead, the expected credit loss ratio is determined solely based on the number of days past due of the receivables.

If there is evidence indicating that the counterparty is in severe financial difficulty and the Group has no realistic prospect of recovery of the amount, the Group directly writes off the related receivables. However, collection activities will continue, and any amount recovered through collection will be recognized in profit or loss.

The loss allowance measured by the provision matrix of the Group's accounts receivable is as follows:

December 31, 2025

	Not past due	1 ~ 30 days past due	31 ~ 60 days past due	61 ~ 90 days past due	91 ~ 120 days past due	121 ~ 150 days past due	151 ~ 180 days past due	More than 180 days past due	Total
Expected Credit Loss Ratio	0.09%~0.41%	0.39%~6.76%	0.74%~11.21%	3.16%~19.71%	6.68%~19.78%	12.9%~24.28%	20.03%~30.69%	100.00%
Total book value	$ 350,323	$ 14,770	$ 12,956	$ 11,453	$ 1,230	$ 1,432	$ 1,557	$ 12,372	$ 406,093
Loss allowance	( 814 )	( 598 )	( 242 )	( 405 )	( 101 )	( 184 )	( 336 )	( 12,372 )	( 15,052 )
Amortized cost	$ 349,509	$ 14,172	$ 12,714	$ 11,048	$ 1,129	$ 1,248	$ 1,221	$ -	$ 391,041

December 31, 2024

	Not past due	1 - 30 days past due	31 - 60 days past due	61 - 90 days past due	91 - 120 days past due	121 - 150 days past due	151 - 180 days past due	More than 180 days past due	Total
Expected Credit Loss Rates	0.08%–0.18%	0.29%–4.68%	0.62%–7.42%	2.49%–14.69%	8.76%–18.86%	11.50%–23.20%	12.50%–22.72%	100%
Total book value	$ 304,511	$ 10,187	$ 14,302	$ 6,383	$ 3,967	$ 2,818	$ 3,633	$ 12,554	$ 358,355
Less: Allowance for misollectible accounts (Allowance for expected lifetime credit losses)	( 275 )	( 143 )	( 360 )	( 196 )	( 665 )	( 631 )	( 803 )	( 12,554 )	( 15,627 )
Amortized cost	$ 304,236	$ 10,044	$ 13,942	$ 6,187	$ 3,302	$ 2,187	$ 2,830	$ -	$ 342,728

The movements of the loss allowance for accounts receivable/notes receivable are as follows:

2025

	Notes receivable	Accounts Receivable	Total
Balance as of January 1, 2025	$ -	$ 15,627	$ 15,627
Add: Reversal of impairment loss for the year	-	( 614 )	( 614 )
Foreign currency exchange difference	-	39	39
Balance as of December 31, 2025	$ -	$ 15,052	$ 15,052

2024

	Notes receivable	Accounts Receivable	Total
Balance as of January 1, 2024	$ -	$ 9,484	$ 9,484
Add: Reversal of impairment loss for the year	-	5,781	5,781
Foreign currency exchange difference	-	362	362
Balance as of December 31, 2024	$ -	$ 15,627	$ 15,627

(III) Overdue receivables

The movements in the loss allowance on overdue receivables are as follows:

	2025	2024
Beginning balance	$ 250	$ 250
Add: Provision for impairment loss for the year	-	-
Ending balance	$ 250	$ 250

(IV) Other receivables

The policy of the Group is to transact only with creditworthy counterparties and to obtain adequate guarantee where necessary to mitigate the risk of financial losses due to defaults. Credit rating information is assessed based on historical transaction records of the counterparties. The Group continuously monitors credit exposure and counterparties' credit categories.

The Company considers the current financial conditions of the debtor to measure the 12-month expected credit loss or lifetime expected credit loss on investments in debt instruments. As of December 31, 2025 and 2024, the loss allowance rate for other receivables was 0%.

XI. Inventories

	December 31, 2025	December 31, 2024
Merchandise	$ 125,279	$ 128,686
Finished goods	108,924	95,377
Work in process	568,300	539,374
Raw materials	79,190	80,968
	$ 881,693	$ 844,405

The type of operating costs related to inventories is as follows:

	2025	2024
Cost of inventories sold	$ 1,101,290	$ 1,068,402
Unallocated manufacturing overhead	1,351	32,109
Write-downs of inventories	4,949	2,286
	$ 1,107,590	$ 1,102,797

XII. Subsidiary

(I) The subsidiaries in the consolidated financial statements

The detail information of the subsidiaries at the end of reporting period was as follows:

Name of investors	Name of subsidiaries	Business Activities	Proportion of Ownership (%)
			December 31, 2025	December 31, 2024
The Company	FULL ASSET GROUP L.L.C.	Holding company	100%	100%
	FULLTEK GROUP L.L.C.	Holding company	100%	100%
	Smart Technology Investment Co., Ltd.	Holding company	100%	100%
	CHELIC (BVI) Corp.	Holding company	100%	100%
	CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Manufacture and sale of pneumatic equipment	99.8%	99.8%
FULL ASSET GROUP L.L.C.	SHANGHAI CHELIC PNEUMATIC CORP.	Manufacture and sale of pneumatic equipment	98%	98%
FULLTEK GROUP L.L.C.	GENTEK AUTOMATION (SHANGHAI) CORP	Manufacture of pneumatic equipment	100%	100%
CHELIC (BVI) Corp.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Manufacture and sale of pneumatic equipment	100%	100%
GENTEK AUTOMATION (SHANGHAI) CORP	SHANGHAI CHELIC PNEUMATIC CORP.	Manufacture and sale of pneumatic equipment	2%	2%
SHANGHAI CHELIC PNEUMATIC CORP.	SHANGHAI SHINNING ELECTRONICS CO., LTD.	Real estate leases	64.44%	64.44%
Smart Technology Investment Co., Ltd.	SHANGHAI SHINNING ELECTRONICS CO., LTD.	Real estate leases	35.56%	35.56%
SHANGHAI CHELIC PNEUMATIC CORP.	SHENZHEN CHELIC PNEUMATIC CORP.	Sale of pneumatic equipment	100%	100%
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Zhejiang Bangye Automation Technology Co., Ltd. (Zhejiang Bangye Company)	Precision metal manufacturing	80%	80%

CHELIC TECHNOLOGY (THAILAND) CO., LTD. completed the relevant registration in September 2024. As of December 31, 2025, NT$24,142 thousand had been injected as capital.

(II) Information on subsidiaries with significant non-controlling interests

Name of subsidiaries	Principal Place of Business/Country of Registration	Proportion of non-controlling interests in ownership interests and voting rights
		December 31, 2025	December 31, 2024
Zhejiang Bangye Company	Mainland China	20%	20%

For information on the Principal Place of Business and Country of Registration, please refer to Table 7.

	Profit allocated to non-controlling interests		Non-controlling interest
Name of subsidiaries	2025	2024	December 31, 2025	December 31, 2024
Zhejiang Bangye Company	$ 15,271	$ 9,167	$ 110,313	$ 94,089

The summary of financial information for Zhejiang Bangye Company is prepared with the amount before the elimination of intercompany transactions:

	December 31, 2025	December 31, 2024
Current assets	$ 461,367	$ 372,887
Non-current assets	250,028	230,560
Current liabilities	( 159,953 )	( 131,013 )
Equity	$ 551,442	$ 472,434
Equity attributable to:
Owners of the parent company	$ 441,154	$ 377,947
Non-controlling interest	110,288	94,487
	$ 551,442	$ 472,434
	2025	2024
Revenue	$ 662,810	$ 588,313
Net income	$ 74,313	$ 45,617
Other comprehensive income (loss)	4,765	15,335
Total comprehensive income	$ 79,078	$ 60,952
Net income (loss) attributable to:
Owners of the parent company	$ 59,450	$ 36,494
Non-controlling interest	14,863	9,123
	$ 74,313	$ 45,617
Total comprehensive income attributable to:
Owners of the parent company	$ 63,262	$ 48,762
Non-controlling interest	15,816	12,190
	$ 79,078	$ 60,952
Financing Cash Flow operating activities	$ 53,226	$ 46,063
Investing activities	( 52,707 )	( 38,216 )
Financing activities	-	( 27,258 )
Net cash inflow (outflow)	$ 519	($ 19,411 )

XIII. Property, plant and equipment

	Self-owned land	Buildings	Machinery and equipment	Transport equipment	Office equipment	Other equipment	Property, plant and equipment under construction	Total
Cost
Balance as of January 1, 2025	$ 274,665	$ 1,758,047	$ 947,739	$ 17,297	$ 49,994	$ 408,387	$ -	$ 3,456,129
Addition	-	8,455	47,524	684	5,979	41,967	-	104,609
Reclassification (Note)	-	629	4,059	-	3,800	342	-	8,830
Disposal	-	( 20,754 )	( 43,467 )	( 1,309 )	( 763 )	( 24,469 )	-	( 90,762 )
Net exchange difference	-	4,433	4,643	101	405	1,452	-	11,034
Balance as of December 31, 2025	$ 274,665	$ 1,750,810	$ 960,498	$ 16,773	$ 59,415	$ 427,679	$ -	$ 3,489,840
Accumulated depreciation
Balance as of January 1, 2025	$ -	$ 500,955	$ 554,940	$ 13,529	$ 41,293	$ 336,913	$ -	$ 1,447,630
Depreciation expense	-	60,021	60,179	719	3,461	28,528	-	152,908
Disposal	-	( 20,754 )	( 40,299 )	( 1,178 )	( 674 )	( 24,254 )	-	( 87,159 )
Net exchange difference	-	2,405	3,461	41	174	605	-	6,686
Balance as of December 31, 2025	$ -	$ 542,627	$ 578,281	$ 13,111	$ 44,254	$ 341,792	$ -	$ 1,520,065
Net amount at December 31, 2025	$ 274,665	$ 1,208,183	$ 382,217	$ 3,662	$ 15,161	$ 85,887	$ -	$ 1,969,775
Cost
Balance as of January 1, 2024	$ 274,665	$ 1,717,514	$ 882,384	$ 16,713	$ 47,274	$ 392,754	$ 14,343	$ 3,345,647
Addition	-	4,690	39,596	1,276	3,224	14,959	-	63,745
Disposal	-	( 19,873 )	( 4,557 )	( 1,250 )	( 1,392 )	( 4,012 )	-	( 31,084 )
Reclassification (Note)	-	14,844	2,902	-	-	1,761	( 14,844 )	4,663
Net exchange difference	-	40,872	27,414	558	888	2,925	501	73,158
Balance as of December 31, 2024	$ 274,665	$ 1,758,047	$ 947,739	$ 17,297	$ 49,994	$ 408,387	$ -	$ 3,456,129
Accumulated depreciation
Balance as of January 1, 2024	$ -	$ 432,877	$ 479,911	$ 13,720	$ 39,671	$ 311,444	$ -	$ 1,277,623
Depreciation expense	-	61,921	64,518	477	2,244	28,096	-	157,256
Disposal	-	( 4,136 )	( 3,854 )	( 1,125 )	( 1,261 )	( 4,008 )	-	( 14,384 )
Net exchange difference	-	10,293	14,365	457	639	1,381	-	27,135
Balance as of December 31, 2024	$ -	$ 500,955	$ 554,940	$ 13,529	$ 41,293	$ 336,913	$ -	$ 1,447,630
Net amount at December 31, 2024	$ 274,665	$ 1,257,092	$ 392,799	$ 3,768	$ 8,701	$ 71,474	$ -	$ 2,008,499

Note: Reclassifications from other non-current assets - prepayments for equipment to the various categories under property, plant and equipment.

There was no impairment of property, plant and equipment for the Group in the years ended December 31, 2025 and December 31, 2024.

Property, plant, and equipment is depreciated on a straight-line basis over their useful lives as follows:

Buildings
- Main buildings: 20-55 Years
- Others: 5-50 Years
- Machinery and equipment: 5-12 Years
- Transport equipment: 5 years
- Office equipment: 2-10 Years
- Other equipment: 2-15 Years

Please refer to Note 31 for the Amount of PROPERTY, PLANT AND EQUIPMENT pledged as collaterals for borrowings by the Group.

XIV. Lease arrangements

(I) Right-of-use assets

	Land	Buildings	Total
Cost
Balance as of January 1, 2025	$ 147,912	$ 31,176	$ 179,088
Addition	-	6,973	6,973
Disposal	-	( 1,260 )	( 1,260 )
Net exchange difference	512	428	940
Balance as of December 31, 2025	$ 148,424	$ 37,317	$ 185,741
Accumulated depreciation
Balance as of January 1, 2025	$ 21,391	$ 9,700	$ 31,091
Depreciation expense	3,453	9,197	12,650
Disposal	-	( 1,219 )	( 1,219 )
Net exchange difference	217	368	585
Balance as of December 31, 2025	$ 25,061	$ 18,046	$ 43,107
Net amount at December 31, 2025	$ 123,363	$ 19,271	$ 142,634

(Continued)

	Land	Buildings	Total
Cost
Balance as of January 1, 2024	$ 143,105	$ 44,769	$ 187,874
Addition	-	2,072	2,072
Disposal	-	( 17,146 )	( 17,146 )
Net exchange difference	4,807	1,481	6,288
Balance as of December 31, 2024	$ 147,912	$ 31,176	$ 179,088
Accumulated depreciation
Balance as of January 1, 2024	$ 17,226	$ 19,206	$ 36,432
Depreciation expense	3,545	7,025	10,570
Disposal	-	( 17,146 )	( 17,146 )
Net exchange difference	620	615	1,235
Balance as of December 31, 2024	$ 21,391	$ 9,700	$ 31,091
Net amount at December 31, 2024	$ 126,521	$ 21,476	$ 147,997

Please refer to Note 31 for the Amount of right-of-use assets pledged as collaterals for borrowings by the Group.

(II) Lease liabilities

	December 31, 2025	December 31, 2024
Carrying amounts
Current	$ 8,450	$ 6,490
Non-current	$ 11,926	$ 15,439

The discount rates for lease liabilities of land and buildings range from 3.24% to 6.88%.

(III) Material lease activities and terms

The Group leases a number of buildings for use as plants and offices with lease terms of 1 to 3 years. At the end of the lease term, the Group has no preferential right to acquire the leased building.

The Group's land use rights are depreciated over 28 to 49 years.

(IV) Other lease information

	2025	2024
Expenses relating to short-term leases	$ 1,824	$ 2,592
Total cash outflow for leases	($ 11,264)	($ 10,546)

The Group elects to apply the recognition exemptions to office leases that qualify as short-term leases and thus did not recognize right-of-use assets and lease liabilities for these leases.

XV. Intangible assets

	Computer software	Technology license	Total
Cost
Balance as of January 1, 2025	$ 44,803	$ 1,114	$ 45,917
Addition	3,432	-	3,432
Reclassification (Note)	1,515	-	1,515
Net exchange difference	123	-	123
Balance as of December 31, 2025	$ 49,873	$ 1,114	$ 50,987
Accumulated amortization and impairment
Balance as of January 1, 2025	$ 35,640	$ 843	$ 36,483
Amortization expenses	3,497	250	3,747
Net exchange difference	66	-	66
Balance as of December 31, 2025	$ 39,203	$ 1,093	$ 40,296
Net amount at December 31, 2025	$ 10,670	$ 21	$ 10,691
Cost
Balance as of January 1, 2024	$ 44,232	$ 614	$ 44,846
Addition	201	500	701
Net exchange difference	370	-	370
Balance as of December 31, 2024	$ 44,803	$ 1,114	$ 45,917
Accumulated amortization and impairment
Balance as of January 1, 2024	$ 32,069	$ 614	$ 32,683
Amortization expenses	3,379	229	3,608
Net exchange difference	192	-	192
Balance as of December 31, 2024	$ 35,640	$ 843	$ 36,483
Net amount at December 31, 2024	$ 9,163	$ 271	$ 9,434

Note: Transferred from other non-current assets - prepayments for equipment.

Amortization expense is recognized on a straight-line basis over the following useful lives:

Computer software
1-10 Years
Technology license
1.5-2 Years

XVI. Other assets

	December 31, 2025	December 31, 2024
Current
Prepayments	$ 34,634	$ 33,230
Tax credit balance	19,766	19,600
Input Tax Amount	14,586	13,090
Advance payments	200	200
	$ 69,186	$ 66,120
Non-current
Prepayments for equipment	$ 13,508	$ 8,315
Refundable deposits	2,852	2,628
Others	2,165	2,603
	$ 18,525	$ 13,546

XVII. Loans

(I) Short-term loans

	December 31, 2025	December 31, 2024
Unsecured loans
- Credit facility loans	$ 217,440	$ 269,560

The interest rates on bank loans as of December 31, 2025 and December 31, 2024 were 1.81% to 3.45% and 1.85% to 3.90%, respectively.

(II) Long-term borrowings

	December 31, 2025	December 31, 2024
Secured loans (Note 31)
Bank loans	$ 428,032	$ 369,307
Unsecured loans
Bank loans	100,000	-
Subtotal	528,032	369,307
Less: Current portion within 1 year	( 51,439 )	( 59,831 )
Long-term borrowings	$ 476,593	$ 309,476

The Group's loans include:

	Material terms	December 31, 2025	December 31, 2024
Chang Hwa Bank
Secured bank loans	Secured loan, with a term from May 2, 2023 to May 2, 2030. The interest rate is 2.025%, with interest paid monthly, and the principal is to be repaid in 60 installments starting from May 2, 2023. However, the Group has fully repaid in advance.	$ -	$ 230,000
Secured bank loans	Mortgage loans, with a term from September 15, 2025 to September 15, 2032. An interest rate of 2.025%; interest paid monthly; principal repaid in 60 installments starting from September 15, 2027.	230,000	-
Bank of Taiwan
Secured bank loans	Secured loans, with a term from May 2, 2023 to May 2, 2028. The interest rate is 2.0455%, with interest paid monthly, and the principal is to be repaid in 60 installments starting from May 2, 2025. However, the Group has fully repaid in advance.	-	83,272
Secured bank loans	Secured loans, with a term from February 2, 2015 to February 2, 2030. An interest rate of 2.0249%; interest paid monthly; the principal is to be repaid in 144 installments starting from February 2, 2018.	45,637	56,035
Secured bank loans	Secured loans, with a term from September 5, 2025 to September 5, 2030. An interest rate of 2.1512%; interest paid monthly; principal to be repaid in 60 installments starting from October 5, 2025.	152,395	-
Entie Bank Unsecured loans:	Credit loans, with a term from August 25, 2025 to August 25, 2027. An interest rate of 2.197%; interest paid monthly; principal to be repaid in 3 installments starting from August 25, 2026.	100,000	-
Balance of bank loans		$ 528,032	$ 369,307

XVIII. Bonds payable

	December 31, 2025	December 31, 2024
Domestic secured convertible bonds	$ 474,789	$ 556,139
Less: due within one year	-	( 556,139 )
	$ 474,789	$ -

(I) The Company issued domestic third secured convertible bonds on September 5, 2022, with a total amount of NT$600,000 thousand, issued at 104.1977% of the face value, with a coupon rate of 0%, and a maturity period of 3 years. The major issuance terms are as follows:

Issuance Period: September 5, 2022 to September 5, 2025.
Material redemption terms:

(1) From the day following three months after the issuance of the convertible bonds to 40 days before the maturity date, if the closing price of the Company's common share exceeds the then-current conversion price by 30% (inclusive) for 30 consecutive trading days, the Company may redeem the outstanding convertible bonds in cash at their face value.

(2) From the day following three months after the issuance of the convertible bonds to 40 days before the maturity date, if the outstanding balance of the convertible bonds is less than 10% of the original total amount issued, the Company may redeem the outstanding convertible bonds in cash at their face value.

Conversion method:

(1) Except during the suspension period for conversion, the bonds can be converted into the Company's common share from the day following three months after the issuance of the convertible bonds until the maturity date (i.e., from December 6, 2022, to September 5, 2025).

(2) Conversion Price and Adjustments: The conversion price for common share at the time of issuance was TWD 60.0 per share. The subsequent conversion price is adjusted according to the formula stipulated in the issuance terms. As of December 31, 2025, the conversion price was TWD 55.3 per share.

For collateral related to the corporate bonds of the Company, please refer to Note 31.
This convertible bond includes liability and equity components, with the equity component expressed under equity as capital surplus - convertible bonds subscription rights. The effective interest rate at initial recognition of the liability component was approximately 1.5994%.

As of September 5, 2025, convertible bonds with an aggregate principal amount of NT$38,100 thousand had been converted and the related registration procedures completed, of which NT$6,744 thousand was reclassified to share capital.

47 -

In addition, upon the exercise of the conversion rights, capital surplus - conversion options of convertible bonds originally recognized decreased by NT$3,106 thousand, and the discount on bonds payable decreased by NT$840 thousand.

The excess of the net carrying amount over the par value of the common shares issued upon conversion was recognized in capital surplus -share premium from conversion of convertible bonds, amounting to NT$33,622 thousand.

In September 2025, the Company repaid in cash the face value of NT$561,900 thousand for the matured outstanding convertible bonds and reclassified the equity component to "capital surplus - expired stock options" of NT$45,925 thousand.

Issuance price (less transaction cost of 5,307 thousands)	$ 619,879
Equity component	( 49,031 )
Deferred tax assets	1,061
Liability component on the issuance date	571,909
Liability component at January 1, 2024	584,228
Interest calculated at an effective interest rate of 1.5994%	8,971
Conversion of corporate bonds into common shares	( 37,060 )
Liability component at January 1, 2025	556,139
Interest calculated at an effective interest rate of 1.5994%	5,961
Conversion of corporate bonds into common shares	( 200 )
Redeemed at maturity on September 5, 2025	( 561,900 )
Liability component at December 31, 2025	$ -

(II) The Company issued domestic fourth secured convertible bonds on June 9, 2025, with a total amount of NT$500,000 thousand, issued at 102.877% of the face value, with a coupon rate of 0%, and a maturity period of 3 years. The major issuance terms are as follows:

Issuance period: June 9, 2025 to June 9, 2028.
Material redemption terms:

(1) From the day following three months after the issuance of the convertible bonds to 40 days before the maturity date, if the closing

48 -

price of the Company's common share exceeds the then-current conversion price by 30% (inclusive) for 30 consecutive trading days, the Company may redeem the outstanding convertible bonds in cash at their face value.

Conversion method:

(2) Conversion Price and Adjustments: The conversion price for common share at the time of issuance was TWD 44.0 per share. The subsequent conversion price is adjusted according to the formula stipulated in the issuance terms. As of September 5, 2025, the conversion price was TWD 43.4 per share.

For collateral related to the corporate bonds of the Company, please refer to Note 31.
This convertible bond includes liability and equity components, with the equity component expressed under equity as capital surplus - convertible bonds subscription rights. The effective interest rate at initial recognition of the liability component was approximately 2.1428%.

Issuance price (less transaction cost of 6,722 thousands)	$ 507,663
Equity component	( 41,002 )
Financial assets measured at FVTPL	891
Deferred tax assets	1,344
Liability component on the issuance date	468,896
Interest calculated at an effective interest rate of 2.1428%	5,893
Liability component at December 31, 2025	$ 474,789

50 -

XIX. Notes payable and accounts payable

	December 31, 2025	December 31, 2024
Notes payable
Arising from operations	$ -	$ 218
Accounts payable
Arising from operations	$ 168,572	$ 136,010
XX. Other liabilities
	December 31, 2025	December 31, 2024
Current
Other payables
Salary and bonus payable	$ 56,407	$ 54,426
Processing fees payable	20,830	7,606
Social insurance fees payable	4,211	3,977
Payables to contractors and equipment suppliers	3,962	4,035
Insurance fees payable	2,146	1,944
Service fees payable	1,758	1,978
Pension payable	1,485	1,421
Accrued profit sharing bonus to employees and compensation to directors	986	-
Accounts payable business tax	814	2,779
Others	29,276	34,666
	$ 121,875	$ 112,832
Other current liabilities
Sales revenue received in advance - Disposal of property	$ 6,744	$ -
Collections on behalf of others	1,106	1,042
Others	850	514
	$ 8,700	$ 1,556
Non-current
Other liabilities
Deposits received	$ 587	$ 584

51 -

XXI. Retirement benefits plan

Defined contribution pension plan

The pension system of the Company within the Group, applicable under the "Labor Pension Act," is a defined contribution plan under government administration, to which 6% of employees' monthly salary is contributed to their personal accounts at the Bureau of Labor Insurance.

The employees of the Group's subsidiaries in Mainland China and Thailand are members of the retirement benefit plans operated by the respective local governments. Each subsidiary is required to contribute a specific proportion of salary costs to the retirement benefit plans. The Company's obligation to this government-operated retirement benefit plan is only to contribute a specific amount.

FULL ASSET GROUP L.L.C., FULLTEK GROUP L.L.C., Smart Technology Investment Co., Ltd., and CHELIC (BVI) Corp. have not established any employee retirement plans.

XXII. Equity

(I) Share capital

Common stock

	December 31, 2025	December 31, 2024
Authorized shares (in thousands)	100,000	100,000
Authorized capital	$1,000,000	$1,000,000
Issued and paid shares (in thousands)	69,987	69,984
Issued capital	$699,876	$699,840

A holder of issued common shares with par value of NT$10 is entitled to vote and to receive dividends.

52 -

(II) Capital surplus

	December 31, 2025	December 31, 2024
May be used to offset a deficit, distributed in cash, or transferred to share capital (note)
Additional paid-in capital	$ 465,230	$ 500,222
From convertible bonds	135,507	135,327
Additional paid-in capital (Transferred employee stock options)	570	570
May only be used to offset a deficit
Expired convertible bond subscription rights (Note 18)	92,906	46,982
May not be used for any purpose
Convertible bond subscription rights (Note 18)	41,002	45,940
	$ 735,215	$ 729,041

Note: Such capital surplus may be used to offset a deficit and, if the Company has no deficit, may also be distributed as cash dividends or transferred to share capital. However, when transferring to share capital, it is limited to a certain percentage of the Company's paid-in capital each year.

(III) Retained earnings and dividend policy

The Company amended its Articles of Incorporation as approved by the shareholders' meeting on May 30, 2024, to stipulate its policy on the distribution of earnings. If there is a profit in a fiscal year, the Company shall first pay all applicable taxes, offset accumulated losses, and then appropriate 10% of the remaining balance as legal reserve. The remaining amount shall be appropriated or reversed as special reserve in accordance with applicable laws and regulations.

Any remaining balance, together with accumulated undistributed earnings, shall be proposed by the Board of Directors as a distribution plan and submitted to the shareholders' meeting for approval. Where dividends and bonuses to be distributed, or all or part of the legal reserve and capital surplus as provided under Paragraph 1, Article 241 of the Company Act, are to be distributed in cash, the board of directors

is authorized to resolve such distribution by a special resolution and report the same to the shareholders' meeting. Please refer to Note 24 (7) Employee compensations and directors' remuneration for the policy on allocation of employee compensations and directors' remuneration as stipulated in the Company's Articles of Incorporation.

According to the Company's Articles of Incorporation, the distribution ratio of cash dividends to shareholders is in principle not less than 10%. However, this ratio may be adjusted based on the current operating status of the Company, as proposed by the board of directors, and subject to approval by the shareholders' meeting.

Legal reserve shall be provided until reaching the Company's paid-in capital. The legal capital reserve may be used to offset a deficit. When the Company has no deficit, the portion of the legal capital reserve exceeding 25% of the total paid-in capital may be distributed in cash in addition to being transferred to share capital.

The appropriations and deficits compensation plans for the years ended December 31, 2024 and 2023 are as follows:

	2024	2023
Reversal of special reserve appropriated	($ 86,303)	$ 35,874

The appropriation of earnings and losses for 2023 was approved at the annual shareholders' meeting on May 30, 2024. In addition, the shareholders resolved on May 30, 2024 to distribute cash of NT$34,830 thousand from capital surplus arising from share premium, equivalent to NT$0.5 per share. The appropriations of earnings and losses for 2024 were approved at the annual shareholders' meeting on May 29, 2025. In addition, the board of directors resolved on March 4, 2025 to distribute cash of NT$34,992 thousand from capital surplus arising from share premium, equivalent to NT$0.5 per share.

The Parent Company's appropriations of earnings for the year ended December 31, 2025 are as follows:

	2025
Legal reserve	$ 1,501
Reversal of special reserve	($ 21,002)
Cash dividends to shareholders	$ 13,898
Cash dividends per share (NT$)	$ 0.2

Additionally, on March 4, 2026, the Parent company's Board of Directors resolved to distribute cash dividends of TWD 20,846 thousand from the capital surplus, giving TWD 0.3 per share.

The aforementioned cash dividend has been resolved by the Board of Directors, with the remainder subject to approval at the annual shareholders' meeting to be held on May 29, 2026.

(IV) Special reserve

The parent company appropriated and reversed special reserves in accordance with the FSC Letter No. 1090150022 and the "Q&A on the application after adopting International Financial Reporting Standards (IFRSs) regarding Special Reserve Appropriated." Details of the special reserve composition of the parent company for the Years Ended December 31, 2025 and 2024 are as follows:

	2025	2024
Adjustments arising from first-time adoption of IFRSs	$ 18,245	$ 18,245
Amounts recognized as deductions from other equity components	86,376	172,679
	$ 104,621	$ 190,924

(V) Other equity items

Exchange differences from the translation of financial statements of foreign operations

	2025	2024
Beginning balance	($ 101,957)	($ 172,386)
Generated in the current year
Foreign currency exchange difference of foreign operations	12,187	88,036
Related income tax	( 2,437)	( 17,607)
Ending balance	($ 92,207)	($ 101,957)

55 -
Unrealized Gain (Loss) on Financial Assets at FVTOCI

	2025	2024
Beginning balance	$ 15,581	($ 293)
Generated in the current year
Unrealized gain or loss
Equity instruments	11,252	15,874
Ending balance	$ 26,833	$ 15,581

(VI) Non-controlling interest

	2025	2024
Beginning balance	$ 94,135	$ 87,307
Acquisitions of subsidiaries with additions in non-controlling interests	-	48
Share attributable to non-controlling interests
Net income (loss) for the year	15,255	9,165
Foreign currency exchange difference of foreign operations	953	3,067
Cash dividends of non-controlling interests	-	( 5,452 )
Ending balance	$110,343	$ 94,135

(VII) Treasury stock

Relevant information on treasury stock held by the Company is as follows:

| Reason for inflow | Unit: (In Thousands)
Transfer shares to
employees |
| --- | --- |
| Number of shares at January 1, 2025 | - |
| Additions in the period | 500 |
| Decrease in the period | - |
| Number of shares at December 31, 2025 | 500 |

The Company's board of directors approved the first repurchase of treasury stock for employee transfer on September 26, 2025. A total of 500 thousand shares were repurchased from October to November 2025, with a repurchase amount of TWD 22,333 thousand.

The treasury stock held by the Company, in accordance with the Securities Exchange Act, cannot be pledged and does not enjoy rights such as dividend distribution and voting rights. The subsidiaries holding treasury shares are bestowed shareholders' rights, except the rights to participate in any share issuance for cash and to vote.

XXIII. Revenue

	2025	2024
Revenue from contracts with customers
Pneumatic components	$ 1,104,178	$ 1,103,989
Precision metal manufacturing	483,090	372,047
Others	15,683	15,452
	$ 1,602,951	$ 1,491,488

(I) Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivable and accounts receivable (Note 10)	$ 456,472	$ 356,024	$ 324,449
Notes receivable from related parties and accounts receivable from related parties (Note 30)	$ 10,618	$ 36,833	$ 22,887
Contract liabilities
Sales of goods	$ 13,909	$ 12,129	$ 8,466

The changes in the contract liability balances primarily result from the timing difference between the satisfaction of performance obligation and the customer's payment.

Revenue recognized in the current year that was included in contract liabilities at the beginning of the year and from performance obligations satisfied in prior periods is as follows:

	2025	2024
Sales of goods	$ 12,129	$ 8,466

(II) Disaggregation of revenue from contracts with customers

The Group is engaged in a single industry segment. Please refer to Note 36.

XXIV. Net profit of continuing operations

(I) Interest revenue

	2025	2024
Bank deposits	$ 6,630	$ 6,438

(II) Other income

	2025	2024
Government grants	$ 5,110	$ 5,756
Others	8,386	8,627
	$ 13,496	$ 14,383

(III) Other gains and losses

	2025	2024
Foreign currency exchange (losses) gains	($ 4,217)	$ 6,664
Gain on disposal of property, plant and equipment	2,879	6,207
Loss on financial assets at FVTPL	( 441 )	-
Gains on lease modifications	1	-
Others	( 296 )	( 306 )
	($ 2,074)	$ 12,565

(IV) Finance costs

	2025	2024
Interest on bank loans	$ 17,367	$ 19,911
Interest on convertible bonds	11,854	8,971
Interest expense of lease liabilities	1,251	730
	$ 30,472	$ 29,612

58 -

(V) Depreciation and amortization

	2025	2024
Property, plant and equipment	$ 152,908	$ 157,256
Right-of-use assets	12,650	10,570
Intangible assets	3,747	3,608
	$ 169,305	$ 171,434
Depreciation expenses summarized by function
Cost of revenue	$ 109,709	$ 121,886
Operating expenses	55,849	45,940
	$ 165,558	$ 167,826
Amortization expense summarized by function
Operating expenses
Marketing	$ 16	$ 46
Administrative expenses	2,834	1,810
Research and development expenses	897	1,752
	$ 3,747	$ 3,608

(VI) Employee benefits expenses

	2025	2024
Short-term employee benefits	$ 416,379	$ 385,747
Retirement benefits
Defined contribution pension plan	24,738	31,116
Total employee benefits expenses	$ 441,117	$ 416,863
Summarized by function
Cost of revenue	$ 239,173	$ 226,371
Operating expenses	201,944	190,492
	$ 441,117	$ 416,863

(VII) Employee compensations and directors’ remuneration

In accordance with the Company’s Articles of Incorporation, the Company appropriates directors’ remuneration at a rate not exceeding 5% and employees’ remuneration at a rate ranging from 0.5% to 5% of profit before tax for the current year, before deducting such remuneration. In accordance with the amendment to the Securities Exchange Act in August 2024, the Company has passed a resolution to amend the Articles of Incorporation at the shareholders’ meeting in 2025, stipulating that compensation to directors not exceed 5% and profit sharing bonus to employees range from 0.5% to 5% of the annual profit before tax and before the distribution of employee compensations and directors’ remuneration. Of the employees’ compensation to be appropriated, no less than 30% shall be allocated to non-executive (entry-level) employees. The Company had a net loss before tax for 2024, therefore, employee compensations and directors’ remuneration were not accrued. The compensation to employees and directors for 2025 was approved by the Board of Directors on March 4, 2026 as follows:

Estimated Ratio

	2025
Compensation to employees	3.00%
Renumeration to directors	4.66%

Amount

	2025
Compensation to employees	$ 386
Renumeration to directors	$ 600

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

The information about compensation to employees and directors determined by the Board of Directors may be viewed at TWSE’s Market Observation Post System (MOPS).

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(VIII)Exchange gain or loss

	2025	2024
Total foreign exchange gain	$ 20,200	$ 11,612
Total foreign exchange loss	( 24,417 )	( 4,948 )
Gain(loss)	($ 4,217 )	$ 6,664

XXV. Income tax attributable to continuing operations

(I) Income tax recognized in the profit or loss

Income tax expense consisted of the following:

	2025	2024
Current income tax
Generated in the current year	$ 13,763	$ 40,977
Additional tax on undistributed earnings	1,319	-
Adjustments for the previous years	( 2,617 )	( 10,980 )
Current credit for repatriated overseas earnings toward tax payments	( 1,073 )	( 15,137 )
Investment tax credits utilized in the current period	-	( 6,134 )
	11,392	8,726
Deferred income tax
Generated in the current year	( 3,415 )	4,719
Income tax expense recognized in profit or loss	$ 7,977	$ 13,445

The reconciliation of accounting income and income tax expense is as follows:

	2025	2024
Profit (loss) before income tax	$ 36,795	($ 37,298)
Income tax expense calculated at the statutory tax rate on income (loss) before income tax	$ 7,359	($ 7,460)
Expenses not deductible for tax purposes (not included in taxable income)	2,145	446
Tax on repatriated earnings from subsidiary	1,073	15,137
Additional tax on undistributed earnings	1,319	-
Unrecognized deductible temporary differences and loss carryforwards	3,920	40,903
Effect of different tax rates for subsidiaries operated in other jurisdictions	( 4,149)	( 3,330)
Current income tax expense from prior years adjusted in the current year	( 2,617)	( 10,980)
Current credit for repatriated overseas earnings toward tax payments	( 1,073)	( 15,137)
Investment tax credits utilized in the current period	-	( 6,134)
Income tax expense recognized in profit or loss	$ 7,977	$ 13,445

The applicable tax rate in Taiwan is 20%.

The applicable tax rate for subsidiaries in China is 25%. However, SHANGHAI CHELIC PNEUMATIC CORP. and ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD. have passed the high-tech enterprise

review with an applicable tax rate of 15%. Tax amounts generated in other jurisdictions are calculated based on the applicable rates in those jurisdictions.

(II) Income tax recognized in the other comprehensive income

	2025	2024
Deferred income tax
Generated in the current year
Financial statement
translation differences of foreign operations	($ 2,437)	($ 17,607)

(III) Current tax assets and liabilities

	December 31, 2025	December 31, 2024
Current tax liability assets
Tax refund receivables	$ 8,175	$ 9,624
Current income tax liabilities
Income taxes payable	$ 2,492	$ 3,263

(IV) Deferred income tax assets and liabilities

The changes in deferred income tax assets and liabilities are as follows:

2025

Deferred tax assets	Beginning balance	Recognized in the profit or loss	Recognized in the other comprehensive income (loss)	Other Changes (Note)	Ending balance
Temporary differences
Write-downs of inventories	$ 11,842	($ 374)	$ -	$ -	$ 11,468
Unrealized exchange loss	-	905	-	-	905
Unrealized gross profit on sales with subsidiary	4,301	( 1,078 )	-	-	3,223
Foreign currency exchange difference of foreign operations	25,488	-	( 2,437 )	-	23,051
Convertible bonds issuance costs	235	( 497 )	-	1,344	1,082
	41,866	( 1,044 )	( 2,437 )	1,344	39,729
Loss carryforwards	-	3,713	-	-	3,713
	$ 41,866	$ 2,669	($ 2,437 )	$ 1,344	$ 43,442
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains	$ 746	($ 746 )	$ -	$ -	$ -

2024

Deferred tax assets	Beginning balance	Recognized in the profit or loss	Recognized in the other comprehensive income (loss)	Ending balance
Temporary differences
Write-downs of inventories	$ 14,655	($ 2,813 )	$ -	$ 11,842
Unrealized exchange loss	251	( 251 )	-	-
Unrealized gross profit on sales with subsidiary	4,856	( 555 )	-	4,301
Foreign currency exchange difference of foreign operations	43,095	-	( 17,607 )	25,488
Convertible bonds issuance costs	589	( 354 )	-	235
	$ 63,446	($ 3,973 )	($ 17,607 )	$ 41,866
Deferred income tax liabilities
Temporary differences
Unrealized exchange gains	$ -	$ 746	$ -	$ 746

Note: Of which, deferred income tax assets amounting to 1,344 thousand yuan is recognized as a deduction from bonds payable.

(V) The amount of unused loss carryforwards for which deferred income tax assets have not been recognized in the consolidated balance sheets.

	December 31, 2025	December 31, 2024
Loss carryforwards
Year of maturity 2026	$ 15,994	15,930
Year of maturity 2027	1,060	1,055
Year of maturity 2028	48,741	48,546
Year of maturity 2029	83,795	72,793
Year of maturity 2030	9,907	-
	$ 159,497	$ 138,324

(VI) The aggregated amount of temporary differences associated with investments for which deferred income tax liabilities have not been recognized.

As of December 31, 2025 and 2024, the taxable temporary differences associated with investments in subsidiaries for which deferred income tax liabilities

63 -

have not been recognized amounted to NT$1,141,468 thousand and NT$1,100,215 thousand, respectively.

(VII) Income tax examination

The Parent company's income tax returns through Year Ended December 31, 2023, have been examined and approved by the tax authorities.

There are no significant pending tax litigation cases for other overseas subsidiaries.

XXVI. Earnings (Losses) per share

	2025	2024
Basic earnings (loss) per share	$ 0.19	($ 0.86)
Diluted earnings per share	$ 0.19

The profit (loss) for the year and weighted average number of common shares used in the computation of earnings (loss) per share are as follows:

Net profit (loss) for the year

	2025	2024
Net profit (loss) for the year	$ 13,563	($ 59,908)
Interest on convertible bonds after tax	—
Net income used in the computation of diluted EPS	$ 13,563

Number of Shares

	2025	2024
Net income used in the computation of Basic EPS
Weighted average number of common shares (Loss) per share	69,889	69,747
Effect of potentially dilutive ordinary shares:
Profit sharing bonus to employees	10
Convertible bonds (Note)	—
Weighted average number of common shares used in the computation of diluted EPS (in thousands)	69,889

Note: The merged company's convertible bonds for the years ended December 31, 2025, were not included in the computation of diluted EPS due to their anti-dilutive effect. The consolidated company had a net loss after tax for the Year Ended December 31, 2024, and due to its anti-dilutive effect, diluted EPS was not calculated.

If the merged company can choose to distribute the profit sharing bonus to employees in stock or cash dividends, it is assumed that the profit sharing bonus to employees will be distributed in stock when calculating the Diluted EPS. The potential capital stock, when dilutive, is included in the weighted average shares outstanding to calculate Diluted EPS. When calculating the diluted EPS prior to the Board of Directors' resolution on the number of shares to be distributed as employees' compensation in the following year, the dilutive effect of these potential ordinary shares is also considered.

XXVII. Cash flow information

(I) Non-cash transactions

The Group conducted the following non-cash transactions in investing activities for the years ended December 31, 2025 and December 31, 2024:

	2025	2024
Partially paid cash to acquire property, plant and equipment.
Acquisition of property, plant and equipment	$ 104,609	$ 63,745
Net changes in payables for equipment	73	5,992
Cash payments	$ 104,682	$ 69,737
Partially received cash from the disposal of property, plant and equipment.
Proceeds from disposal of property, plant and equipment	$ 6,482	$ 22,907
Net change in other receivables from related parties	-	10,155
Cash dividends	$ 6,482	$ 33,062

(II) Reconciliation of liabilities arising from financing activities

2025

	Non-cash Changes
	January 1, 2023	Financing Cash Flow	Equity component	Assets component	Additions losses Modifications	Interest expense amortization amount	Foreign exchange impact amount	Others	Ending balance
Short-term loans	$ 269,560	($ 51,665)	$ -	$ -	$ -	$ -	($ 455)	$ -	$ 217,440
Bonds payable (including those due within one year)	556,139	( 54,237)	( 41,202)	2,235	-	11,854	-	-	474,789
Long-term borrowings (including those due within one year)	369,307	158,725	-	-	-	-	-	-	528,032
Deposits received	584	-	-	-	-	-	3	-	587
Lease liabilities	21,929	( 8,189)	-	-	6,973	1,251	( 337)	( 1,251)	20,376
	$1,217,519	$ 44,634	($ 41,202)	$ 2,235	$ 6,973	$ 13,105	($ 789)	($ 1,251)	$1,241,224

2024

	Non-cash Changes
	January 1, 2024	Financing Cash Flow	Equity component	Additions losses Modifications	Interest expense amortization amount	Foreign exchange impact amount	Others	Ending balance
Short-term loans	$ 286,540	($ 20,000)	$ -	$ -	$ -	$ 3,020	$ -	$ 269,560
Bonds payable (including those due within one year)	584,228	-	( 37,060 )	-	8,971	-	-	556,139
Long-term borrowings (including those due within one year)	402,836	( 33,529 )	-	-	-	-	-	369,307
Deposits received	565	-	-	-	-	19	-	584
Lease liabilities	25,776	( 7,224 )	-	2,072	730	1,305	( 730 )	21,929
	$1,299,945	($ 60,753 )	($ 37,060 )	$ 2,072	$ 9,701	$ 4,344	($ 730 )	$1,217,519

XXVIII. Capital risk management

The merged company conducts capital management to ensure that, under the premise of continued operations, shareholder returns are maximized by optimizing the balance of debt and EQUITY. The overall strategy of the Group has not changed in recent years.

The capital structure of the consolidated company consists of the consolidated company's net debt (i.e., loans minus cash) and equity (i.e., capital stock, capital surplus, retained earnings, and others).

The Group is not subject to any other external capital requirements.

The Group's key management regularly reviews the capital structure of the Group, taking into consideration the Cost and associated risks of each type of capital. Based on the recommendations of key management, the Group will balance its overall capital structure by paying dividends, issuing new shares, and obtaining loans from financial institutions.

XXIX. Financial instruments

(I) Fair value of financial instruments that are not measured at fair value

Except as described below, the management of the consolidated company believes that the carrying amounts of financial assets and financial liabilities not measured at fair value approximate their fair values.

December 31, 2025

	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial liabilities
Financial liabilities at amortized costs:
- Convertible corporate bonds	$ 474,789	$ -	$ -	$ 481,150	$ 481,150

December 31, 2024

	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial liabilities
Financial liabilities at amortized costs:
- Convertible corporate bonds	$ 556,139	$ -	$ -	$ 556,538	$ 556,538

The fair value measurement of the Level 3 convertible bond component mentioned above uses the binomial tree convertible bond valuation model. This model reflects the fair value of convertible bonds by incorporating market risks and significant unobservable inputs, such as stock price volatility, risk-free interest rate, risk discount rate, and liquidity risk.

(II) Fair value of financial instruments that are measured at fair value on a recurring basis

Fair value hierarchy

December 31, 2025

	Level 1	Level 2	Level 3	Total
Financial assets measured at FVTPL
Options related to convertible bonds	$ -	$ -	$ 450	$ 450
Financial assets measured at FVOCI
Investments in equity instruments
- Domestic unlisted ordinary share	$ -	$ -	$ 1,523	$ 1,523
- Unlisted shares in foreign markets	-	-	50,029	50,029
	$ -	$ -	$ 51,552	$ 51,552

December 31, 2024

	Level 1	Level 2	Level 3	Total
Financial assets measured at FVOCI
Investments in equity instruments
- Domestic unlisted ordinary share	$ -	$ -	$ -	$ -
- Unlisted shares in foreign markets	-	-	38,658	38,658
	$ -	$ -	$ 38,658	$ 38,658

There were no transfers between Level 1 and Level 2 fair value measurements in the years ended December 31, 2025 and December 31, 2024.

Reconciliation of financial instruments measured at fair value using Level 3 inputs

2025

Financial assets measured at FVTPL	Derivative financial instruments - Options related to convertible bonds
Beginning balance	$ -
Additions - Issuance of convertible bonds	891
Recognized in profit or loss (Other gains and losses)	( 441 )
Ending balance	$ 450
Financial assets	Equity instruments measured at fair value through other comprehensive income financial assets
Beginning balance	$ 38,658
Additions	1,080
Recognized in other comprehensive income (unrealized gains or losses on financial assets at fair value through other comprehensive income)	11,252
Foreign exchange impact amount	562
Ending balance	$ 51,552

2024

Financial assets	Equity instruments measured at fair value through other comprehensive income financial assets
Beginning balance	$ 21,933
Recognized in other comprehensive income (unrealized gains or losses on financial assets at fair value through other comprehensive income)	15,874
Foreign exchange impact amount	851
Ending balance	$ 38,658

Valuation Techniques and Inputs for Level 3 Fair Value Measurements

Categories of financial instruments	Valuation Technique and Inputs
Options related to convertible bonds	Binomial tree model for convertible bond valuation: The model considers factors including the term of the bonds, the price and volatility of the underlying shares, the conversion price, the risk-free interest rate, the discount rate reflecting credit risk, and the liquidity risk of the convertible bonds.
Unlisted shares in the domestic and foreign markets	The fair value is estimated based on the net asset value from the recent financial statements of the investee company and the market approach while considering a discount for liquidity. This assessment takes into account the valuations of similar companies and the operating performance of the investee.

69 -

(III) Categories of financial instruments

	December 31, 2025	December 31, 2024
Financial assets
Measured at amortized cost
(Note 1)	$ 1,315,489	$ 1,224,008
FVTPL
Mandatorily measured at fair value through profit or loss	450	-
Investments in equity instruments at FVTOCI	51,552	38,658
Financial liabilities
Measured at amortized cost
(Note 2)	1,445,689	1,380,459

Note 1: Including cash and cash equivalents, financial assets at amortized cost, notes receivable (including related parties), accounts receivable (including related parties), other receivables (excluding tax refund receivables), and refundable deposits, all measured at amortized cost as financial assets.

Note 2: Including short-term loans, notes payable, accounts payable, bonds payable (including portions due within one year), other payables (including related parties; excluding salary and bonus payable, employee bonuses and director remuneration payable, pension payable, labor and health insurance payable, business tax payable, social insurance fees payable, and insurance fees payable), long-term loans (including portions due within one year), and guarantee deposits, all measured at amortized cost as financial liabilities.

(IV) Financial risk management objectives and policies

The Group's primary financial instruments include cash and cash equivalents, notes receivable, accounts receivable, short-term loans, accounts payable, bonds payable, lease liabilities, and long-term borrowings. The financial risks associated with operations in the above financial instruments include market risk (including currency risk, interest rate risk, and other price risk), credit risk, and liquidity risk.

70 -

71 -
Market Risk

The main financial risks borne by the Group's operating activities are the risk of foreign exchange movement (refer to below (1)), interest rate risk (refer to below (2)), and other price risk (refer to below (3)).

(1) Exchange rate risk

The Group engages in sales and purchase transactions denominated in foreign currencies, which exposes the Group to risks of foreign exchange movement. The management of the Group's exposure to exchange rate risk primarily relies on natural hedging of net foreign exchange positions within the permitted scope of policies.

On the balance sheet date, for the merged company, the carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies (including monetary items denominated in non-functional currencies that have been written-off in the consolidated financial statements) are detailed in Note 34.

Sensitivity Analysis

The Group is mainly affected by fluctuations in the USD, RMB, and EUR exchange rates.

The table below provides a detailed sensitivity analysis of the consolidated company when the exchange rate of the New Taiwan dollar (functional currency) increases and decreases by 1% against each relevant foreign currency. The 1% is the sensitivity ratio used internally in reporting currency risk to the key management personnel of the Group, and it also represents the management's assessment of the reasonable possible range of changes in foreign exchange rates. The sensitivity analysis includes only the outstanding foreign currency monetary items, and their conversion at the end of the period is adjusted for a 1% change in the exchange rate. The scope of the sensitivity analysis includes cash and cash equivalents, accounts receivable, accounts payable, short-term loans, and intercompany receivables and payables with foreign operations. The positive numbers in the table indicate the amount by which profit before tax or equity would increase when the New Taiwan dollar depreciates by 1% against each relevant foreign currency; conversely, when the New Taiwan dollar appreciates

by 1% against each relevant foreign currency, the impact on profit before tax or equity would be the same amount but negative.

Profit or loss	Impact of USD		Impact of RMB		Impact of EUR
	2025	2024	2025	2024	2025	2024
	$ 326(i)	$ 324(i)	$ 80(ii)	$ 2,081(ii)	$ 337(iii)	$ 51(iii)

(i) Mainly due to the Group's outstanding U.S. dollar-denominated cash and cash equivalents, accounts receivable, accounts payable, and loans as of the balance sheet date that have not been hedged for cash flow.

(ii) Mainly due to the Group's outstanding RMB-denominated cash and cash equivalents, accounts receivable, and accounts payable as of the balance sheet date that have not been hedged for cash flow.

(iii) Mainly due to the Group's outstanding EUR-denominated cash and cash equivalents, and accounts receivable as of the balance sheet date that have not been hedged for cash flow.

The Group's sensitivity to USD exchange rate change has not significantly differed this year; the sensitivity to RMB exchange rate has decreased mainly due to a decrease in net assets denominated in RMB, while the sensitivity to EUR exchange rate has increased primarily due to an increase in assets denominated in EUR.

(2) Interest rate risk

The carrying amounts of the Group's financial assets and financial liabilities exposed to interest rate risk on the balance sheet date are as follows:

	December 31, 2025	December 31, 2024
Fair value interest rate risk
- Financial assets	$ 271,576	$ 56,545
- Financial liabilities	712,605	767,628
Cash flow interest rate risk
- Financial assets	560,971	763,197
- Financial liabilities	528,032	449,307

73 -

Sensitivity Analysis

The following sensitivity analysis is determined by the interest rate risk exposure of non-derivative instruments on the reporting date. For liabilities with floating interest rates, the analysis assumes that the amount of liabilities outstanding on the balance sheet date has been outstanding throughout the reporting period. The rate of change used internally in reporting interest rates to the management from the Group is 1% increase or decrease in interest rates, representing the management's evaluation of the reasonable range of possible changes in interest rates.

If the interest rate increases/decreases by 1%, with all other variables remaining constant, the Income (loss) before income tax for the Group in the years ended December 31, 2025 and December 31, 2024 would increase/decrease by NT$329 thousand and NT$3,139 thousand, respectively. This is mainly due to the interest rate risk positions arising from the Group's bank deposits and bank loans at floating interest rates.

The decrease in interest rate sensitivity this year is due to a decrease in net assets with floating interest rates.

(3) Other price risk

The consolidated company is exposed to equity price risk arising from equity securities investments. The equity investment is not held for trading but is a strategic investment, and the Group is not actively trading these investments.

Sensitivity Analysis

The following sensitivity analysis is conducted based on the equity price risk as of the balance sheet date.

If equity prices were to increase/decrease by 5%, the Year Ended December 31, 2025 and Year Ended December 31, 2024 pre-tax OTHER COMPREHENSIVE INCOME (LOSS) would increase/decrease by NT$2,578 thousand and NT$1,933 thousand, respectively, due to the Changes in fair value of financial assets at FVTOCI.

The sensitivity of the consolidated company to equity securities investments has increased, mainly due to an increase in the Fair Value of equity securities held.

Credit Risk

Credit risk refers to the risk that a counterparty may default on its contractual obligations resulting in financial losses to the Group. As of the balance sheet date, the Group's maximum credit risk exposure, which may cause financial losses due to counterparties failing to fulfill their obligations, primarily arises from the carrying amount of financial assets recognized in the CONSOLIDATED BALANCE SHEETS.

The policy of the Group is to transact only with creditworthy counterparties and to obtain adequate guarantee where necessary to mitigate the risk of financial losses due to defaults. The Group rates its major customers based on credit reports provided by independent rating agencies or uses other publicly available financial information and mutual transaction records. The Group continuously monitors credit exposure and counterparties' credit categories, and controls credit exposure through counterparties' credit limits that are reviewed and approved by authorized managers.

The Group continuously evaluates the financial status of accounts receivable customers. Additionally, on the balance sheet date, the Group reviews the recoverable amount of accounts receivable individually to ensure that appropriate impairment losses are recognized for uncollectible accounts.

The Group's customer base is large and unrelated to each other, so the concentration of credit risk is not high.

Liquidity Risk

The merged company supports group operations and mitigates the impact of fluctuations in financing cash flow by managing and maintaining adequate positions of cash and cash equivalents. The management of the Group oversees the utilization of bank financing facilities and ensures compliance with the terms of loan agreements.

Bank loans are an important source of liquidity for the Group. As of December 31, 2025 and 2024, for unused financing amounts of the consolidated company, please refer to Note (2) on financing amounts.

74 -

(1) Liquidity and interest rate risk for non-derivative financial liabilities

The remaining contractual maturity analysis of non-derivative financial liabilities is prepared based on the earliest date the Group may be required to repay, using undiscounted cash flows of financial liabilities (including principal and estimated interest). Therefore, bank loans of the merged company that may be required to be repaid immediately are listed within the earliest period in the table below, without considering the probability of the bank's immediate execution of this right. The maturity analysis of other non-derivative financial liabilities is prepared based on the agreed repayment dates.

December 31, 2025

	Payable on demand or less than 1 month	1-3 months	3 months-1 year	1-5 Years	Over 5 year
Non-derivative financial liabilities
Non-interest-bearing liabilities	$ 119,682	$ 88,751	$ 16,408	$ 587	$ -
Short-term loans	170,457	-	49,456	-	-
Long-term borrowings (including those due within one year)	4,335	8,670	51,754	414,733	84,712
Bonds payable (including those due within one year)	-	-	-	500,000	-
Lease liabilities	802	1,584	6,923	12,377	-
	$ 295,276	$ 99,005	$ 124,541	$ 927,697	$ 84,712

December 31, 2024

	Payable on demand or less than 1 month	1-3 months	3 months-1 year	1-5 Years	Over 5 year
Non-derivative financial liabilities
Non-interest-bearing liabilities	$ 84,691	$ 85,946	$ 14,232	$ 584	$ -
Short-term loans	228,090	22,390	22,390	-	-
Long-term borrowings (including those due within one year)	3,420	6,840	67,879	288,898	22,072
Bonds payable (including those due within one year)	-	-	562,100	-	-
Lease liabilities	616	1,197	5,495	16,396	-
	$ 316,817	$ 116,373	$ 672,096	$ 305,878	$ 22,072

The amount of floating-rate instruments classified as non-derivative financial liabilities will change due to the difference between the floating rate and the interest rate estimated on the balance sheet date.

(2) Credit line of financing facilities

	December 31, 2025	December 31, 2024
Secured bank loans
credit line
- Amount utilized	$ 428,032	$ 369,307
- Amount
unutilized	-	-
	$ 428,032	$ 369,307
Unsecured bank loans
line
- Amount utilized	$ 317,440	$ 269,560
- Amount
unutilized	747,440	744,780
	$ 1,064,880	$ 1,014,340

The Group issued domestic third and fourth convertible bonds on September 5, 2022, and June 9, 2025, respectively, with total amounts of NT$600,000 thousand and NT$500,000 thousand. The issuance was guaranteed by banks.

XXX. Related Party Transactions

Intercompany transactions, account balances, income, and expenses between the Company and its subsidiaries, which are related parties of the Company, have been fully eliminated upon consolidation; therefore, those items are not disclosed in this note. The transactions between the Group and other related parties are as follows:

(I) Related party name and categories

Name	Related Party Categories
Jihsiang Automation Co., Ltd. (Jihsiang Company)	Substantial related party
Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	Substantial related party
Li Jin-Yue (Spouse of the Subsidiary's key management personnel)	Substantial related party

77 -

(II) Revenue

Item	Related Party Categories	2025	2024
Sales	Substantial related party
	Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	$ 18,537	$ 122,943
	Jihsiang Company	26,955	19,193
		$ 45,492	$ 142,136

Sales to related parties for standard specifications are priced on a cost-plus basis, while the price for special specifications are determined through negotiation, with payment terms of T/T 120 to 180 days. Pricing for non-related parties is determined through negotiation, with payment terms of net 30 to 180 days from the end of the month of the invoice date.

(III) Purchase

Related Party Categories	2025	2024
Substantial related party
Shanghai Bangye
Pneumatic & Hydraulic Components Co., Ltd.
(Shanghai Bangye)	$ 16,046	$ 13,983
Jihsiang Company	24	79
	$ 16,070	$ 14,062

Purchases are priced at cost-plus, with payment terms of net 90 days from the end of the month of when the invoice is issued. Pricing for non-related parties is determined through negotiation, with payment terms of net 45 to 90 days from the end of the month of the invoice date.

(IV) Receivables from related parties (excluding loans to related parties)

Item	Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Notes receivable from related parties (Notes Four, 10, 23, and 30)	Substantial related party
	Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	$ -	$ 2,239
Accounts receivable from related parties	Substantial related party
	Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	$ -	$ 27,942
	Jihsiang Company	10,618	6,652
		$ 10,618	$ 34,594

The outstanding receivables from related parties are all not past due and are not covered by guarantees. No allowance for losses was provided for receivables from related parties for the year ended December 31, 2025 and the year ended December 31, 2024.

(V) Payables to related parties

Item	Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Other payables to related parties (Note 30)	Substantial related party
	Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	$ 443	$ 356

The outstanding payables to related parties balance is not secured against collateral.

(VI) Prepayments (classified under other current assets)

Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Substantial related party / Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	$ 3,118	$ 3,901

(VII) Advance receipts (classified under other current liabilities)

Relationship with the Company/ Related Party	December 31, 2025	December 31, 2024
Substantial related party / Li Jinyue	$ 6,744	$ -

(VIII) Others

	2025	2024
Processing fees - Substantial related party / Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd. (Shanghai Bangye)	$ 5,635	$ 4,100

(IX) Compensation of key management personnel

	2025	2024
Short-term employee benefits	$ 20,940	$ 18,247
Retirement benefits	618	489
	$ 21,558	$ 18,736

The remuneration to directors and other key management was decided by the Remuneration Committee according to personal performance and market trends.

79 -

80 -

XXXI. Pledged and Mortgaged Assets

The following assets have been provided as collateral for financing borrowings and bonds payable:

	December 31, 2025	December 31, 2024
Property, plant and equipment
Self-owned land	$ 262,264	$ 262,264
Buildings	595,719	612,697
	857,983	874,961
Right-of-use assets - Land use rights	83,748	85,360
	$ 941,731	$ 960,321

XXXII. Significant Contingent Liabilities and Unrecognized Contract Commitments

Except as described in other notes, the Group had the following significant commitments as of the balance sheet date:

The unrecognized contractual commitments of the Group are as follows:

	December 31, 2025	December 31, 2024
Acquisition of property, plant and equipment	$ 3,429	$ -

XXXIII. Significant Subsequent Events: None.

XXXIV. The significant financial assets and liabilities denominated in foreign currencies were as follows:

The following information was summarized according to the foreign currencies other than the functional currencies of the consolidated entities. The exchange rates disclosed were used to translate the foreign currencies into the functional currency. The significant financial assets and liabilities denominated in foreign currencies were as follows:

December 31, 2025

| | Foreign Currencies
(In Thousands) | Exchange rate | Book value |
| --- | --- | --- | --- |
| Financial assets | | | |
| Monetary items | | | |
| USD | $ 635 | 31.4300 (USD: NTD) | $ 19,944 |
| USD | 210 | 6.9907 (USD: RMB) | 6,606 |
| USD | 192 | 31.3704 (USD: THB) | 6,031 |
| RMB | 1,768 | 4.4960 (USD: NTD) | 7,949 |
| RMB | 27 | 0.1430 (RMB: USD) | 123 |
| EUR | 101 | 36.9000 (EUR: NTD) | 3,717 |
| EUR | 812 | 8.2073 (EUR: RMB) | 29,964 |
| Financial liabilities | | | |
| Monetary items | | | |
| RMB | 9 | 4.4960 (USD: NTD) | 39 |

December 31, 2024

| | Foreign Currencies
(In Thousands) | Exchange rate | Book value |
| --- | --- | --- | --- |
| Financial assets | | | |
| Monetary items | | | |
| USD | $ 987 | 32.7850 (USD: NTD) | $ 32,379 |
| USD | 475 | 7.3213 (USD: RMB) | 15,551 |
| RMB | 37,347 | 4.4780 (USD: NTD) | 167,239 |
| JPY | 367 | 0.2099 (JPY: NTD) | 77 |

The exchange gain or loss (realized and unrealized) for the Years Ended December 31, 2025 and 2024 were NT$(4,217) thousand and NT$6,664 thousand, respectively. Since there were varieties of foreign currency transactions and functional currencies within the subsidiaries of the Company, the Company was unable to disclose foreign exchange gain (loss) towards each foreign currency with significant impact.

XXXV. Supplementary Disclosure

(I) Information on Significant Transactions:

Financings provided to others (Table 1)
Endorsement/ guarantee provided: None
Significant marketable securities held at the end of the period (excluding investments in subsidiaries, associates, and joint ventures). (Table 2)
TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT

LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL. (Table 3)

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL. (Table 4)
Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 8 attached; (Table 5)

(II) Information on Investees Companies (Table 6)

(III) Information on investment in mainland China:

The name of the investee in mainland China, the main businesses activities and products, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 7)
The following significant transactions occurred with the investee company in mainland China, directly or indirectly through a third region, including their prices, terms of payment, and unrealized gain or loss: (Table 7)

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

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

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

(4) The balance, end of period, of notes endorsed/guaranteed or collaterals provided and their purpose.

(5) The maximum balance of financial accommodation, end of year balance, interest rate range, and total interest for the period.

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

(IV) The situation where a subsidiary holds shares in a parent company should separately list the Name of Investee, Total Shares Owned, Amount, and reasons: None.

82 -

XXXVI. Department Information

The chief operating decision maker regards the sales units of pneumatic components in various regions as individual operating segments. However, for the purpose of preparing financial reports, the Group considers the following factors and aggregates these operating segments as a single operating segment, thus OPERATING SEGMENTS INFORMATION is not applicable.

The nature of the products is similar;
The product pricing strategy and sales model are similar.

(I) Revenue from main products and services

The analysis of revenue from main products and services of the Group's continuing operations is as follows:

	2025	2024
Pneumatic components	$ 1,104,178	$ 1,103,989
Precision metal manufacturing	483,090	372,047
Other products	15,683	15,452
	$ 1,602,951	$ 1,491,488

(II) Geography Information

The Group primarily operates in 2 regions - Taiwan and China.

The revenue from external customers of the Group's continuing operations is categorized by location of operation, and the information of non-current assets is listed by asset location as follows:

	Revenue from External Customers	NON-CURRENT ASSETS
			114 years	113 years
	2025	2024	December 31	December 31
Taiwan	$ 203,848	$ 139,459	$ 667,418	$ 660,918
China	1,382,146	1,352,029	1,448,947	1,515,972
Thailand	16,957	-	25,260	2,586
	$1,602,951	$1,491,488	$2,141,625	$2,179,476

Non-current assets do not include financial assets at FVTOCI and deferred income tax assets.

(III) Information on major customers.

No revenue from any single customer accounted for more than 10% of the consolidated statements of comprehensive income net revenue for the years ended December 31, 2025 and 2024.

TAIWAN CHELIC CO., LTD. and Subsidiaries

Loans to External Parties

January 1 to December 31, 2025

Table 1
Unit: In Thousands of New Taiwan Dollars and Foreign Currencies

No. (Note 1)	Lender of funds	Borrower of funds	Transaction title	Are they related parties	Maximum balance for the Period (Note 2)	Ending Balance (Note 2)	The actual disbursed Amount	Range of Interest Rates (%)	Nature for Financing (Note 3)	Business transaction amount	Reasons for necessity of short- term financing	Allowance for Bad Debts	Collateral		Loan limit amount for each individual	Total limit on financing amount
													Name	Value
0	TAIWAN CHELIC CO., LTD.	CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Other receivables due from related parties	Yes	$ 20,000	$ 20,000	$ 10,000	4.00%	2	$ -	Operating capital	$ -	None	-	$ 284,121 (Note 4)	$ 1,136,483 (Note 4)
1	SHANGHAI CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Other receivables due from related parties	Yes	134,880 RMB 30,000	134,880 RMB 30,000	134,880 RMB 30,000	2.50%	2	-	Operating capital	-	None	-	567,014 (Note 4)	567,014 (Note 4)
1	SHANGHAI CHELIC PNEUMATIC CORP.	ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	Other receivables due from related parties	Yes	89,920 RMB 20,000	44,960 RMB 10,000	5,395 RMB 1,200	3.60%	2	-	Operating capital	-	None	-	141,753 (Note 5)	567,014 (Note 5)

Note 1: For the column of the issuer, please fill in "0."
Investee is numbered starting from number 1.

Note 2: The maximum balance for the period and the ending balance has been approved by the board of directors.

Note 3: 1. A company that has business dealings with the lender.
2. A company with short-term financing needs.

Note 4: For foreign companies in which the Company directly and indirectly holds 100% of the voting shares, engaging in inter-company lending requires the need for short-term financing and is limited to one year. The amount of financing and the total amount of loans to any individual companies shall not exceed 40% of the net worth of the lending company as stated in its most recent financial statements audited or reviewed by a CPA. The total amount of loans to related enterprises in need of short-term financing shall not exceed 40% of the net worth of the lending company as stated in the most recent financial statements audited or reviewed by a CPA. For related parties of the Company requiring short-term financing, the amount of loans to an individual company shall not exceed 10% of the worth value of the lending company as stated in its most recent financial statements audited or reviewed by a CPA. The total amount of loans shall not exceed 40% of the worth value of the lending company as stated in its most recent financial statements of audited or reviewed by a CPA.

Note 5: For foreign companies in which the Company does not directly and indirectly hold 100% of the voting shares, engaging in inter-company lending requires the need for short-term financing. The lending amount to an individual company shall not exceed 10% of the net worth of the lending company as stated in its most recent financial statements audited or reviewed by a CPA. The total amount of lending shall not exceed 40% of the net worth of the lending company as stated in its most recent financial statements audited or reviewed by a CPA.

Note 6: The write-offs have been consolidated in the preparation of these financial statements.

TAIWAN CHELIC CO., LTD. and Subsidiaries
Significant marketable securities held at the end of the period
December 31, 2025

Table 2
(Shares in Thousands, In Thousands of New Taiwan Dollars)

Holding company	Type and name of marketable security	Relationship with the securities issuer	Accounts in books	End of period				Note
				Number of Shares	Book value	Shareholding ratio	Fair value
TAIWAN CHELIC CO., LTD.	Air Automatic Corporation	The directors of the Company is also the directors of that company.	Financial assets at FVTOCI - non-current	324	$ 1,523	18%	$ 1,523	Note 1
SHANGHAI CHELIC PNEUMATIC CORP.	Shanghai Bangye Pneumatic & Hydraulic Components Co., Ltd.	Substantial related party	〃	-	50,029	18%	50,029	Note 1

Note 1: If there is no market price available for unlisted shares, the estimated market price is determined based on the fair value valuation method.
Note 2: This table lists securities that the company must disclose based on the principle of materiality.
Note 3: For information on the investment in subsidiaries, please refer to Table 6 and Table 7.

85 -

TAIWAN CHELIC CO., LTD. and Subsidiaries

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

January 1 to December 31, 2025

Table 3
Unit: In Thousands of New Taiwan Dollars

Company Name	Related Party	Relationship	Transaction Details				Abnormal Transaction		Notes/ Accounts Payable or Receivable		Note
			Purchases/ Sales	Amount	% to Total Purchases or Sales	Payment term	Unit Price	Payment term	Ending Balance	% to Total Notes/Accounts Receivable or Payable
TAIWAN CHELIC CO., LTD.	SHANGHAI CHELIC PNEUMATIC CORP.	Sub-subsidiary	Sales	($ 142,381)	( 32%)	T/T 120 days	Note 1	Note 2	$ 27,982	26%	Note 3
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	SHENZHEN CHELIC PNEUMATIC CORP.	Affiliate company	Sales	( 148,671)	( 89%)	T/T 120 days	Note 1	Note 2	37,814	89%	Note 3
SHANGHAI CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Affiliate company	Sales	( 144,641)	( 21%)	T/T 120 days	Note 1	Note 2	36,785	16%	Note 3
SHANGHAI CHELIC PNEUMATIC CORP.	TAIWAN CHELIC CO., LTD.	The ultimate parent of the Company	Purchase	142,381	37%	T/T 120 days	Note 1	Note 2	( 27,982)	( 26%)	Note 3
SHENZHEN CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Affiliate company	Purchase	148,671	58%	T/T 120 days	Note 1	Note 2	( 37,814)	( 65%)	Note 3
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	SHANGHAI CHELIC PNEUMATIC CORP.	Affiliate company	Purchase	144,641	95%	T/T 120 days	Note 1	Note 2	( 36,785)	( 92%)	Note 3

Note 1: General specification transactions between related parties are priced on a cost-plus basis, while special specifications are determined through negotiation. For non-related parties, pricing is also determined through negotiation.
Note 2: Sales to non-related parties are settled with payment terms of net 30 to 180 days from the end of the month of when the invoice is issued for sales, while purchases from non-related parties are settled with payment terms of net 45 to 90 days from the end of the month of when the invoice is issued.
Note 3: The write-offs have been consolidated in the preparation of these financial statements.

TAIWAN CHELIC CO., LTD. and Subsidiaries
RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL.
December 31, 2025

Table 4
Unit: In Thousands of New Taiwan Dollars

Company Name	Related Party	Relationship	Ending Balance from Related Parties	Turnover Rate	Overdue Receivables from Related Parties		Amounts Received in Subsequent Period	Allowance for Bad Debts
					Amount	Methods of treatment
SHANGHAI CHELIC PNEUMATIC CORP.	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Subsidiary to subsidiary.	$ 135,742 (Including interest receivable)	Note 1	$ -	-	$ 862	$ -

Note 1: The ending balance is primarily consisted of other receivables, which is not applicable for the calculation of turnover days.
Note 2: The write-offs have been consolidated in the preparation of these financial statements.

87 -

TAIWAN CHELIC CO., LTD. and Subsidiaries

Others: The business relationship between the parent and the subsidiaries and significant transactions between them: See Table 8 attached;

January 1 to December 31, 2025

Table 5
Unit: In Thousands of New Taiwan Dollars

Serial No.	Trader's name	Counterparty	Relationship with the transaction counterparty	Transactions
				Account	Amount (Note 1)	Terms and conditions	Percentage of Consolidated Net Revenue or Total Assets (%) (Note 2)
0	TAIWAN CHELIC CO., LTD.	SHANGHAI CHELIC PNEUMATIC CORP.	Parent company to subsidiary.	Sales	$ 142,381	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	9%
				Accounts Receivable	27,982		1%
		SHENZHEN CHELIC PNEUMATIC CORP.	Parent company to subsidiary.	Sales	85,028	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	5%
				Accounts Receivable	17,584		-
		CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Parent company to subsidiary.	Sales	8,454	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	1%
				Accounts Receivable	5,559		-
				Other receivables	10,000		The ending balance is primarily consisted of other receivables, with repayment conditions agreed upon by both parties.
1	SHANGHAI CHELIC PNEUMATIC CORP.	TAIWAN CHELIC CO., LTD.	Subsidiary to parent company.	Sales	78,564	Payment is received within 90 days after the end of the month following sales, and the rest is not significantly different from general sales.	5%
				Accounts Receivable	20,149		-
		SHENZHEN CHELIC PNEUMATIC CORP.	Subsidiary to subsidiary.	Sales	1,734	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	-
		CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Subsidiary to subsidiary.	Sales	144,641	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	9%
				Accounts Receivable	36,785		1%

(Continued)

Serial No.	Trader's name	Counterparty	Relationship with the transaction counterpart	Transactions
				Account	Amount (Note 1)	Terms and conditions	Percentage of Consolidated Net Revenue or Total Assets (%) (Note 2)
2	SHANGHAI SHINNING ELECTRONICS CO., LTD.	ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	Subsidiary to subsidiary.	Other receivables	134,880	The ending balance is primarily consisted of other receivables, with repayment conditions agreed upon by both parties.	3%
				Sales	1,122	Payment is received within 90 days after the end of the month following sales, and the rest is not significantly different from general sales.	-
				Other receivables	5,395	The ending balance is primarily consisted of other receivables, with repayment conditions agreed upon by both parties.	-
		CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Subsidiary to subsidiary.	Sales	21,621	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	1%
				Accounts Receivable	12,766		-
		SHANGHAI CHELIC PNEUMATIC CORP.	Subsidiary to subsidiary.	Rent revenue	12,989	Receive 3 months of rental income at one time	1%
				Rent revenue	99	Receive 3 months of rental income at one time	-
		GENTEK AUTOMATION (SHANGHAI) CORP	Subsidiary to subsidiary.	Rent revenue	99	Payment is received within 90 days after the end of the month following sales, and the rest is not significantly different from general sales.	2%
3	ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	SHANGHAI CHELIC PNEUMATIC CORP.	Subsidiary to subsidiary.	Sales	29,070	Payment is received within 60 days after the end of the month following sales, and the rest is not significantly different from general sales.	-
				Accounts Receivable	8,681		-
		CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Subsidiary to subsidiary.	Sales	5,584	Payment is received within 60 days after the end of the month following sales, and the rest is not significantly different from general sales.	-
				Accounts Receivable	2,054		-

(Continued)

Serial No.	Trader's name	Counterparty	Relationship with the transaction counterparty	Transactions
				Account	Amount (Note 1)	Terms and conditions	Percentage of Consolidated Net Revenue or Total Assets (%) (Note 2)
4	CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	SHENZHEN CHELIC PNEUMATIC CORP.	Subsidiary to subsidiary.	Sales	148,671	Payment is received within 120 days after sales, and the rest is not significantly different from general sales.	9%
				Accounts Receivable	37,814		1%
		ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	Subsidiary to subsidiary.	Rent revenue	35,792	Receive 1 months of rental income at one time	2%
				Sales	5,093	Payment is received within 30 days after the end of the month following sales, and the rest is not significantly different from general sales.	-
				Accounts Receivable	772		-
				Other receivables	3,003	The transaction prices and credit terms are determined in accordance with mutual agreements.	-
		SHANGHAI CHELIC PNEUMATIC CORP.	Subsidiary to subsidiary.	Sales	10,623	Payment is received within 90 days after the end of the month following sales, and the rest is not significantly different from general sales.	1%
				Accounts Receivable	2,677		-
				Other receivables	105	The transaction prices and credit terms are determined in accordance with mutual agreements.	-
				Other income - Others	753	As agreed upon by both parties in the contract.	-

Intercompany Relationships and Significant Intercompany Transactions:

TAIWAN CHELIC CO., LTD., SHANGHAI CHELIC PNEUMATIC CORP., CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD, and CHELIC TECHNOLOGY (THAILAND) CO., LTD. are primarily engaged in the manufacture and sale of pneumatic components. GENTEK AUTOMATION (SHANGHAI) CORP primarily engages in the manufacture of pneumatic components. SHENZHEN CHELIC PNEUMATIC CORP. primarily engages in the sale of pneumatic components. SHANGHAI SHINNING ELECTRONICS CO., LTD. mainly deals with real estate leases. ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD. is primarily engaged in precision metal manufacturing. Additionally, FULL ASSET GROUP L.L.C., FULLTEK GROUP L.L.C., Smart Technology Investment Co., Ltd., and CHELIC (BVI) Corp. function as investment holding companies.

Note 1: This schedule only discloses one-way transaction information, and the write-offs for the above transactions have been consolidated in the preparation of the financial statements.

Note 2: The calculation of the transaction amount's percentage of consolidated net revenue or total assets is as follows: for asset and liability items, it is calculated by the balance as of the end of the period over total consolidated assets; for profit or loss items, it is calculated by the accumulated amount over total consolidated net revenue.

91 -

TAIWAN CHELIC CO., LTD. and Subsidiaries

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES

January 1 to December 31, 2025

Table 6
(Shares in Thousands, Amounts are Presented in Thousands)

Name of investors	Investee Company	Location	Primary Business Activities	Original Investment Amount		Balance as of September 30, 2023			Investee Company Profit or loss	Investment Income (Loss) Investment Income (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	Percentage of Ownership	Book value
TAIWAN CHELIC CO., LTD.	FULL ASSET GROUP L.L.C.	United States	Holding company	USD 11,635	USD 11,635	-	100	$ 1,380,132	$ 8,840	$ 7,452	Note 1, Note 2 and Note 3
	FULLTEK GROUP L.L.C.	United States	Holding company	USD 5,000	USD 5,000	-	100	26,349	( 901 )	( 901 )	Note 2 and Note 3
	Smart Technology Investment Co., Ltd.	British Virgin Islands	Holding company	USD 4,218	USD 4,218	50	100	141,628	822	822	Note 2 and Note 3
	CHELIC (BVI) Corp.	British Virgin Islands	Holding company	RMB 179,500	RMB 179,500	27	100	1,004,508	52,591	52,591	Note 2 and Note 3
	CHELIC TECHNOLOGY (THAILAND) CO., LTD.	Thailand	Manufacture and sale of pneumatic equipment	24,142	24,142	2,495	99.8	15,271	( 7,998 )	( 7,981 )	Note 2 and Note 3

Note 1: Investment income of NT$8,840 thousand plus realized gross profit on upstream transactions of NT$698 thousand at the beginning of the period, less unrealized gross profit on upstream transactions of NT$2,086 thousand at the end of the period.
Note 2: The related investment profit (loss) was calculated based on financial statements audited by CPAs.
Note 3: The write-offs have been consolidated in the preparation of these financial statements.
Note 4: For information on Investee Company, please refer to Table 7.

TAIWAN CHELIC CO., LTD. and Subsidiaries

INFORMATION ON INVESTMENT IN MAINLAND CHINA

January 1 to December 31, 2025

Table 7

Unit: In Thousands of New Taiwan Dollars and Foreign Currencies

The name of the investee in mainland China, the main businesses activities and products, paid-in capital, method of investment, inward and outward remittance of funds, percentage of ownership, investment income or loss, carrying amount of investment, and repatriations of investment income:

Investee Company	Primary Business Activities	Paid-in Capital	Method of Investment	Accumulated amount of investments from Taiwan at the beginning of the year	Investment Flows		Accumulated amount of investments from Taiwan at the end of the year	Net Profit or Loss of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) in the current period	Carrying Amount at the end of the period	Accumulated Inward Remittance of Earnings as of September 30, 2023
					Outflow (US$ in Thousands)	Inflow
SHANGHAI CHELIC PNEUMATIC CORP.	Manufacture and sale of pneumatic equipment	$ 375,600	Note 2(II)(1)	$ 360,437	$ -	$ -	$ 360,437	$ 8,936 (RMB 2,062)	100	$ 8,936 (RMB 2,062) Note 1(II)(2)	$ 1,417,535 (RMB 315,288)	$ 216,869 (RMB 48,565)
GENTEK AUTOMATION (SHANGHAI) CORP.	Manufacture of pneumatic equipment	151,375	Note 2(II)(2)	151,375		-	151,375	(RMB -208)	100	(RMB -208) Note 1(II)(2)	26,231 (RMB 5,834)
SHANGHAI SHINNING ELECTRONICS CO., LTD.	Real estate leases	164,999	Note 2(II)(3)	127,700	-	-	127,700	5,551 RMB 1,281	100	5,551 RMB 1,281 Note 1(II)(2)	213,513 (RMB 47,490)	9,656 (RMB 2,247)
SHENZHEN CHELIC PNEUMATIC CORP.	Sale of pneumatic equipment	99,900 (Note 3)	Note 2(III)(1)	-	-	-	-	(RMB -287)	100	(RMB -287) Note 1(II)(2)	103,128 (RMB 22,938)
CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD	Manufacture and sale of pneumatic equipment	807,715	Note 2(II)(4)	807,715	-	-	807,715	52,591 (RMB 12,137)	100	52,591 (RMB 12,137) Note 1(II)(2)	1,003,908 (RMB 223,289)
ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD.	Precision metal manufacturing	271,504 (Note 3)	Note 2(III)(2)	-	-	-	-	74,313 (RMB 17,151)	80	61,085 (RMB 14,098) Note 1(II)(2) and Note 4	441,252 (RMB 98,143)

Note 1: For the column of investment income (loss) recognized in the current period:
(I) If it is still in the preparation stage and no investment income (loss) yet has been recognized, it should be noted.
(II) The basis for recognizing investment income (loss) is classified into the following three categories and should be noted.
(1) The financial statements were audited by an international accounting firm in partnership with the CPA firms of the Republic of China.
(2) The financial statements audited by the independent auditors of the parent company in Taiwan.
(III) Others.

Note 2: Investment methods are classified into the following three categories, specified by numbers:

(I) Directly invest in a company in mainland China.

(II) Investment in mainland companies through a holding company registered in a third region (please specify the investment company in that third region).

(1) Investment in mainland companies through a holding company registered in a third region (FULL ASSET Group L.L.C. and FULLTEK Group L.L.C. reinvest in GENTEK AUTOMATION (SHANGHAI) CORP).

(2) Investment in mainland companies through a holding company registered in a third region (FULLTEK Group L.L.C. Reinvests to reinvest in China).

(3) Investment in mainland companies through a holding company registered in a third region (Smart Technology Investment Co., Ltd., FULL ASSET Group L.L.C., and FULLTEK Group L.L.C. reinvest in GENTEK AUTOMATION (SHANGHAI) CORP, which reinvests in SHANGHAI CHELIC PNEUMATIC CORP.).

(4) Investment in mainland companies through a holding company registered in a third region (CHELIC (BVI) Corp. to reinvest in China).

(III) Other methods.

(1) Reinvestment is done through SHANGHAI CHELIC PNEUMATIC CORP.

(2) Reinvestment is done through CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD.

Note 3: The source of funds for SHENZHEN CHELIC PNEUMATIC CORP. is reinvestment by SHANGHAI CHELIC PNEUMATIC CORP.; the source of funds for ZHEJIANG BANGYE AUTOMATION TECHNOLOGY CO.,LTD. is reinvestment by CHELIC TECHNOLOGY (ZHEJIANG) CO. LTD, with an 80% shareholding.

Note 4: The write-offs have been consolidated in the preparation of these financial statements.

Note 5: Recognized 80% investment income of NT$59,451 thousand plus realized gross profit on side-stream transactions of NT$1,634 thousand.

94 -

Upper Limit on the Amount of Investment in Mainland China

Unit: In Thousands of New Taiwan Dollars

Accumulated Outward Remittance for Investments from Taiwan to Mainland China at the end of the period	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment in Mainland China as stipulated by the Investment Commission, MOEA
$ 1,447,227 (USD 48,488) (Note)	$ 1,311,057 (USD 44,275)	$ 1,770,930

Note: Does not deduct the accumulated inward remittance of investment gains of NT$226,525 thousand.

Significant transactions occurring directly or indirectly with the investment company in mainland China through businesses in a third region:

Purchases amount and percentage, and the ending balance and percentage of the related payables.
Sales amount and percentage, and the ending balance and percentage of the related payables.

Unit: In Thousands of New Taiwan Dollars

Name	Nature of Relationships between the Company and Related Parties	Transaction type	Amount	% to Total Purchases or Sales	Terms and conditions			Notes/ Accounts Payable or Receivable		Unrealized gain
					Price	Payment terms	Comparison with general transactions	Ending Balance	Percentage (%)
SHANGHAI CHELIC PNEUMATIC CORP.	Sub-subsidiary	Sales	$ 142,381	( 32% )	Special specifications are negotiated individually.	T/T 120 days	Proceeds collected on a net 30~180 end of month (EOM) basis for general non-related parties	$ 27,982	26%	$ 12,537
n	n	Purchase	78,564	44%	Cost-plus pricing	T/T 90 days	Proceeds paid on a net 45~90 end of month (EOM) basis for general non-related parties.	( 20,149 )	( 32% )	-
SHENZHEN CHELIC PNEUMATIC CORP.	Sub-subsidiary	Sales	85,029	( 19% )	Cost-plus pricing	T/T 120 days	Proceeds collected on a net 30~180 end of month (EOM) basis for general non-related parties	17,584	17%	3,556

The amount of property transactions and the resulting profit or loss amounts: None.
The balance, end of period, of notes endorsed/guaranteed or collaterals provided and their purpose: None.
The maximum balance of financial accommodation, Balance, end of period, Interest Rate, and total interest for the period: None.
Other transactions significantly affecting current profit or loss or financial position, such as the provision or receipt of services: None.

AI assistant

CHELIC Audit Report / Information 2026

52405_rns_2026-05-12_d6c37c36-f23a-4eb8-b19a-79779651f9d8.pdf

Key Audit Matters

Key Audit Matters

Other Matters

Responsibilities of Management and the Governance Unit for the Consolidated Financial Statements

The responsibilities of the CPA for the audit of the consolidated financial statements.

TAIWAN CHELIC CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity

IV. Summary of Significant Accounting Policies

(I) Compliance Statement

(II) Basis of Preparation

(III) Criteria for classification of assets and liabilities as current or non-current

5. Derivatives

(XI) Recognition of revenue

Net revenue from sale of goods

VII. Financial instruments at FVTPL

VIII. Financial assets measured at FVOCI

(IV) Special reserve

(V) Other equity items

XXIII. Revenue

(I) Contract balances

(VII) Income tax examination

XXVI. Earnings (Losses) per share

XXVII. Cash flow information

(I) Non-cash transactions

Sensitivity Analysis

Sensitivity Analysis

XXXI. Pledged and Mortgaged Assets

XXXII. Significant Contingent Liabilities and Unrecognized Contract Commitments

XXXIII. Significant Subsequent Events: None.

XXXIV. The significant financial assets and liabilities denominated in foreign currencies were as follows:

TAIWAN CHELIC CO., LTD. and Subsidiaries

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

TAIWAN CHELIC CO., LTD. and Subsidiaries

TAIWAN CHELIC CO., LTD. and Subsidiaries

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES

AI assistant

CHELIC — Audit Report / Information 2026

52405_rns_2026-05-12_d6c37c36-f23a-4eb8-b19a-79779651f9d8.pdf

Key Audit Matters

Key Audit Matters

Other Matters

Responsibilities of Management and the Governance Unit for the Consolidated Financial Statements

The responsibilities of the CPA for the audit of the consolidated financial statements.

TAIWAN CHELIC CO., LTD. and Subsidiaries

Consolidated Statements of Changes in Equity

IV. Summary of Significant Accounting Policies

(I) Compliance Statement

(II) Basis of Preparation

(III) Criteria for classification of assets and liabilities as current or non-current

5. Derivatives

(XI) Recognition of revenue

Net revenue from sale of goods

VII. Financial instruments at FVTPL

VIII. Financial assets measured at FVOCI

(IV) Special reserve

(V) Other equity items

XXIII. Revenue

(I) Contract balances

(VII) Income tax examination

XXVI. Earnings (Losses) per share

XXVII. Cash flow information

(I) Non-cash transactions

Sensitivity Analysis

Sensitivity Analysis

XXXI. Pledged and Mortgaged Assets

XXXII. Significant Contingent Liabilities and Unrecognized Contract Commitments

XXXIII. Significant Subsequent Events: None.

XXXIV. The significant financial assets and liabilities denominated in foreign currencies were as follows:

TAIWAN CHELIC CO., LTD. and Subsidiaries

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

TAIWAN CHELIC CO., LTD. and Subsidiaries

TAIWAN CHELIC CO., LTD. and Subsidiaries

NAMES, LOCATIONS, AND RELATED INFORMATION OF INVESTEES

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CHELIC Audit Report / Information 2026