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CMC — Audit Report / Information 2025
Jun 2, 2026
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Audit Report / Information
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CMC Magnetics Corporation and Its Subsidiaries
Consolidated Financial Statements and Independent Auditors' Report
Fiscal years 2025 and 2024
(Stock Code: 2323)
Address: 15F, No. 53, Minquan West Road, Zhongshan District, Taipei City
Tel.: (02)2598-9890
Notice to Reader
For the convenience of readers, this report has been translated into English from the original Chinese version, prepared and used in the Republic of China. The English version has not been audited or reviewed by independent auditors. If there are any discrepancies between the English version and the original Chinese version, or any difference in the interpretation of the two versions, the Chinese-language report shall prevail.
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CMC Magnetics Corporation and Its Subsidiaries
Consolidated Financial Statements and Independent Auditors' Report for the Years
Ended December 31, 2025 and 2024
Table of Contents
| Items | Page |
|---|---|
| I. Cover Page | 1 |
| II. Table of Contents | 2 |
| III. Declaration | 3 |
| IV. Independent Auditors' Report | 4-8 |
| V. Consolidated Balance Sheets | 9-10 |
| VI. Consolidated Statements of Comprehensive Income | 11 |
| VII. Consolidated Statements of Changes in Equity | 12 |
| VIII. Consolidated Statements of Cash Flows | 13-14 |
| IX. Notes to Consolidated Financial Statements | 15-97 |
| (I) Company History | 15 |
| (II) Date and Procedure for Approval of Financial Statements | 15 |
| (III) Application of New and Amended Standards and Interpretations | 15-17 |
| (IV) Summary of Significant Accounting Policies | 17-37 |
| (V) Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty | 37-38 |
| (VI) Description of Significant Accounting Titles | 38-74 |
| (VII) Related-Party Transactions | 74-75 |
| (VIII) Pledged Assets | 76 |
| (IX) Significant Contingent Liabilities and Unrecognized Contractual Commitments | 76 |
| (X) Major Disaster Loss | 77 |
| (XI) Material Events After the Balance Sheet Date | 77 |
| (XII) Others | 77-94 |
| (XIII) Supplementary Disclosures | 94 |
| (XIV) Segment Information | 95-97 |
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CMC Magnetics Corporation
Declaration of Consolidated Financial Statements of Affiliated Companies
The entities that are required to be included in the consolidated financial statements of the Company as of and for the year ended December 31, 2025 (commencing from January 1, 2025 to December 31, 2025), under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, a separate set of combined financial statements will not be prepared.
Hereby certified
CMC Magnetics Corporation
Chairperson: Wong, Ming-Sen
March 12, 2026
Independent Auditors' Report
(2026) Financial Review Report No. 25003913
To CMC Magnetics Corporation:
Opinion
We have reviewed the accompanying consolidated balance sheets of CMC Magnetics Corporation, (the Company) and its subsidiaries (collectively, the Group) for the years ended December 31, 2025 and 2024 and the relevant consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and relevant notes, including a summary of significant accounting policies (collectively referred to as the consolidated financial statements).
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024 and for the years then ended, and its consolidated financial performance and its consolidated cash flows for the years then ended in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China, based on our audit results and the audit reports of other certified public accountants (CPAs)(refer to the section of "Other Matters").
Basis for Audit Opinion
The auditor has conducted the audit work in accordance with the Rules for Auditing Certified Financial Statements and the Auditing Standards of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of this report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our auditing results and other independent auditors' reports, we believe that we have obtained sufficient and appropriate audit evidence to serve as the basis for our opinion.
Key Audit Matters
The key audit matters refer to the matters that, in the professional judgment of the auditor, are of most significance in the audit of the consolidated financial statements of the Group of CMC Magnetics Corporation for the year of 2025. Such matters have been dealt with in the course of auditing and compiling the consolidated financial statements and in the preparation of our audit opinion. As such, we do not respond to each key matter individually.
Key audit matters of the consolidated financial statements of the Group for the year ended December 31, 2025 are stated as follows:
Accounting estimation of inventory valuation
Description
Refer to Note 4 (14) to the consolidated financial statements for accounting policies regarding inventory valuation; Note 5 (2) for the uncertainty of accounting estimates and assumptions regarding inventory valuation; and Note 6 (6) for details of inventory accounting titles.
The Group mainly manufactures and sells optical discs. Due to frequent market price fluctuations in such inventories, there is a higher risk of inventory valuation losses. Since the monetary amount of Group's inventory is significant and there are many items that require manual judgment of obsolescence of inventories, we have listed the estimate of the Group's allowance for inventory valuation losses as one of the key audit matters for the current year.
Corresponding audit procedures
Our major audit procedures executed in response to this key audit matter are as follows.
- Assess the policy adopted for its allowance for valuation loss on its inventories based on the understanding of the Group's operations and the nature of the industry.
- Test whether the basis for the net realizable value is consistent with the policies set by the Group, and randomly inspect the correctness of the selling prices of individual inventory part numbers and the way the net realized value is calculated.
- Acquire obsolete inventory details that have been identified and approved by the management, inspect the relevant information and verify it based on the records in the account.
Other Matters – Audits by other CPAs
The financial statements of some of the subsidiaries that are included in the consolidated financial statements of the Group were not audited by us but by other CPAs. Therefore, the opinions issued by us regarding the amounts listed in such subsidiary financial reports from the consolidated financial statements mentioned above are based on the audit report from other CPAs. The total assets of the aforementioned companies as of December 31, 2025 and 2024 were NT$769,404 thousand and NT$692,902 thousand, respectively, accounting for 2.67% and 2.65% of the total consolidated assets; the operating income for 2025 and 2024 was NT$670,672 thousand and NT$770,368 thousand, respectively, accounting for 9.34% and 10.36% of the consolidated operating income. In addition, part of the Group's investments using the equity method in 2025 and 2024 and part of the information on investees disclosed in Note 13 are based on their evaluation and disclosures of the financial statements made by other CPAs appointed by the investees. We did not audit said financial statements. The balance of said investment using the equity method disclosed as of December 31, 2025 and 2024
~5~
was NT$242,237 thousand and NT$177,488 thousand, respectively, accounting for 0.84% and 0.68% of the total consolidated assets; the comprehensive income (including the share of profit and loss and other comprehensive income on associates and joint ventures recognized under the equity method) are NT$65,098 thousand and NT$(40,867) thousand, accounting for 3.44% and 28.45% of the total comprehensive income.
Other Matters - Parent Company Only Financial Reports
The Company has also prepared the parent company only financial statements for the years ended December 31, 2025 and 2024, for which we have issued an unqualified opinion, plus the audit report as in the section of other matters.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
The responsibility of the management is to prepare consolidated financial statements that are reasonably expressed in accordance with the Financial Reporting Standards for Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, Interpretations and Interpretations approved and issued by the Financial Supervisory Commission, and to maintain and consolidate financial statements. Necessary internal control related to the preparation of statements is undertaken to ensure that there is no material misrepresentation in the consolidated financial statements due to fraud or error.
In preparing the consolidated financial statements, the management is responsible for assessing the ability of the Group in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Group or cease the operations without other viable alternatives.
The governance bodies of the Group (including the Audit Committee) are responsible for supervising the financial reporting process.
CPAs' Responsibilities for the Audit of Consolidated Financial Statements
Our objectives are to obtain reasonable assurance on whether the consolidated financial statements as a whole are free from material misstatement arising from fraud or error, and to issue an independent auditors' report. Reasonable assurance is a high-level assurance but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements may be caused by fraud or errors. If the amounts of misstatements, either separately or in aggregate, could reasonably be expected to influence the economic decisions of the users of the consolidated financial statements, they are considered material.
~6~
The auditor conducted the audit in accordance with the auditing standards of the Republic of China, using professional judgment and skepticism. We have also performed the following tasks:
-
Identify and evaluate the risk of material misstatements due to fraud or error in the consolidated financial statements; design and carry out appropriate countermeasures for the evaluated risk; and obtain sufficient and appropriate evidence as the basis for their audit opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement resulting from fraud is higher than the one resulting from error.
-
Understand the internal control related to the audit in order to design appropriate audit procedures under the circumstances, while not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
-
Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.
-
Conclude on the appropriateness of the management's adoption of the going concern basis of accounting based on the audit evidence obtained and whether a material uncertainty exists for events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we believe there are events or conditions indicating the existence of a material uncertainty, we are required to remind the users of the consolidated financial statements in our audit report of the relevant disclosures therein, or to amend our audit opinion when any inappropriate disclosure is found. Our conclusions is based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.
-
Evaluate the overall expression, structure and contents of the consolidated financial statements (including related notes) and whether the consolidated financial statements fairly presented relevant transactions and events.
-
Obtain sufficient and appropriate audit evidence concerning the financial information of entities within the Group, to express an opinion on the consolidated financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion on the Group.
The matters communicated between us and the governance bodies include the planned scope and times of the audit and significant audit findings (including any significant deficiencies in internal control identified during the audit).
We also provided governance bodies with a declaration that we have complied with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China regarding independence, and communicated with them all relationships and other matters that may possibly be regarded as detrimental to our independence (including relevant protective measures).
~7~
From the matters communicated with the governance bodies, we determined the key audit matters for the audit of the Group's consolidated financial statements for the year ended December 31, 2025. We describe these matters in our audit report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
PWC Taiwan
Yu, Shu-Fen
CPA
Wang, Song-Tse
Financial Supervisory Commission
Approval Certificate No. 1030027246
Approval Certificate No. 1110349013
March 12, 2026
CMC Magnetics Corporation and Its Subsidiaries
Consolidated Balance Sheets
December 31, 2025 and 2024
Unit: NT$ thousands
| Assets | Notes | December 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | |||
| Current assets | ||||||
| 1100 | Cash and cash equivalents | 6 (1) | $ 2,877,568 | 10 | $ 2,637,373 | 10 |
| 1110 | Financial assets at fair value through profit or loss - current | 6 (2) | 9,769,057 | 34 | 8,639,901 | 33 |
| 1136 | Financial assets at amortized cost - current | 6 (4) and 8 | 371,869 | 1 | 276,391 | 1 |
| 1150 | Notes receivable, net | 6 (5) | 2,507 | - | 3,080 | - |
| 1170 | Accounts receivable, net | 6 (5) and 7 | 1,267,699 | 5 | 1,300,817 | 5 |
| 1200 | Other receivables | 960,032 | 3 | 223,635 | 1 | |
| 130X | Inventories | 6 (6) | 2,694,289 | 9 | 2,821,585 | 11 |
| 1460 | Non-current assets held for sale, net | 6 (13) and 8 | - | - | 354,713 | 1 |
| 1470 | Other current assets | 6 (10) | 150,207 | 1 | 127,783 | 1 |
| 11XX | Total current assets | 18,093,228 | 63 | 16,385,278 | 63 | |
| Non-current assets | ||||||
| 1510 | Financial assets at fair value through profit or loss - non-current | 6 (2) and 8 | 4,966,616 | 17 | 3,918,474 | 15 |
| 1517 | Financial assets at fair value through other comprehensive income - non-current | 6 (3) | 722,176 | 2 | 591,896 | 2 |
| 1535 | Financial assets at amortized cost - non-current | 6 (4) and 8 | 18,951 | - | 14,814 | - |
| 1550 | Investments accounted for using the equity method | 6 (7) | 242,237 | 1 | 177,488 | 1 |
| 1600 | Property, plant and equipment | 6 (8) and 8 | 2,869,000 | 10 | 3,087,546 | 12 |
| 1755 | Right-of-use assets | 6 (9) | 148,455 | 1 | 161,266 | - |
| 1760 | Investment properties, net | 6 (11) and 8 | 856,237 | 3 | 807,387 | 3 |
| 1780 | Intangible assets | 14,518 | - | 24,503 | - | |
| 1840 | Deferred income tax assets | 6 (31) | 136,134 | - | 254,340 | 1 |
| 1900 | Other non-current assets | 6 (10)(14)(20) | 754,648 | 3 | 702,312 | 3 |
| 15XX | Total non-current assets | 10,728,972 | 37 | 9,740,026 | 37 | |
| 1XXX | Total assets | $ 28,822,200 | 100 | $ 26,125,304 | 100 |
(Continued on the next page)
CMC Magnetics Corporation and Its Subsidiaries
Consolidated Balance Sheets
December 31, 2025 and 2024
Unit: NT$ thousands
| Liabilities and equity | Notes | December 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | |||
| Current liabilities | ||||||
| 2100 | Short-term borrowings | 6 (15) and 8 | $ 1,430,000 | 5 | $ 1,091,000 | 4 |
| 2110 | Short-term notes payable | 6 (16) | 249,581 | 1 | 233,632 | 1 |
| 2120 | Financial liabilities at fair value through profit or loss - current | 6 (17) | 1,416 | - | 313 | - |
| 2130 | Contract liabilities - current | 6 (25) | 58,594 | - | 63,489 | - |
| 2150 | Notes payable | 920 | - | 2,179 | - | |
| 2170 | Account payables | 650,694 | 2 | 643,042 | 2 | |
| 2200 | Other payables | 6 (18) | 1,084,956 | 4 | 683,961 | 3 |
| 2230 | Current tax liabilities | 84,477 | 1 | 40,213 | - | |
| 2280 | Lease liabilities - current | 52,519 | - | 67,972 | - | |
| 2320 | Long-term liabilities due within one year or one operating cycle | 6 (19) and 8 | 1,520,000 | 5 | 1,198,000 | 5 |
| 2399 | Other current liabilities - others | 221,058 | 1 | 215,419 | 1 | |
| 21XX | Total current liabilities | 5,354,215 | 19 | 4,239,220 | 16 | |
| Non-current liabilities | ||||||
| 2540 | Long-term borrowings | 6 (19) and 8 | 3,613,000 | 13 | 3,595,000 | 14 |
| 2570 | Deferred income tax liabilities | 6 (31) | 53,900 | - | 61,795 | - |
| 2580 | Lease liabilities - non-current | 135,562 | - | 141,023 | 1 | |
| 2600 | Other non-current liabilities | 6 (20) | 78,206 | - | 72,075 | - |
| 25XX | Total non-current liabilities | 3,880,668 | 13 | 3,869,893 | 15 | |
| 2XXX | Total liabilities | 9,234,883 | 32 | 8,109,113 | 31 | |
| Equity | ||||||
| Equity attributable to owners of parent | ||||||
| Share capital | 6 (21) | |||||
| 3110 | Common stock | 10,893,483 | 38 | 10,893,483 | 42 | |
| Capital surplus | 6 (22) | |||||
| 3200 | Capital surplus | 6,432,218 | 22 | 6,784,731 | 26 | |
| Retained earnings | 6 (23) | |||||
| 3310 | Legal reserve | - | - | 114,221 | - | |
| 3320 | Special reserve | - | - | 102,468 | - | |
| 3350 | Unappropriated earnings (losses to be compensated) | 1,733,284 | 6 | ( 246,493 ) | ( 1 ) | |
| Other equity interest | 6 (24) | |||||
| 3400 | Other equity interest | 191,661 | 1 | 32,927 | 1 | |
| 31XX | Total equity attributable to the owners of parent company | 19,250,646 | 67 | 17,681,337 | 68 | |
| 36XX | Non-controlling interests | 4 (3) | 336,671 | 1 | 334,854 | 1 |
| 3XXX | Total equity | 19,587,317 | 68 | 18,016,191 | 69 | |
| Significant contingent liabilities and unrecognized contractual commitments | 6 (19) and 9 | |||||
| Material events after the balance sheet date | 11 | |||||
| 3X2X | Total liabilities and equity | $ 28,822,200 | 100 | $ 26,125,304 | 100 |
The notes attached are part of the Consolidated Financial Statements and shall be read together.
Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih
CMC Magnetics Corporation and Its Subsidiaries
Consolidated Statements of Comprehensive Income
From January 1st to December 31st of 2025 and 2024
Unit: NT$ thousands
(except for earnings (loss) per share of NT$)
| Items | Notes | 2025 | 2024 | |||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | |||
| 4000 | Operating revenue | 6 (25) and 7 | $ 7,182,992 | 100 | $ 7,435,183 | 100 |
| 5000 | Operating costs | 6 (6)(30) | ( 5,460,040 ) | ( 76 ) | ( 5,797,910 ) | ( 78 ) |
| 5900 | Gross operating profit | 1,722,952 | 24 | 1,637,273 | 22 | |
| Operating expenses | 6 (30) | |||||
| 6100 | Selling and marketing expenses | ( 823,179 ) | ( 12 ) | ( 842,228 ) | ( 11 ) | |
| 6200 | Administrative expenses | 7 | ( 819,313 ) | ( 11 ) | ( 787,313 ) | ( 11 ) |
| 6300 | Research and development expenses | ( 87,404 ) | ( 1 ) | ( 357,499 ) | ( 5 ) | |
| 6450 | Expected credit loss | 12 (2) | ( 86,000 ) | ( 1 ) | ( 38,165 ) | - |
| 6000 | Total operating expenses | ( 1,815,896 ) | ( 25 ) | ( 2,025,205 ) | ( 27 ) | |
| 6900 | Operating losses | ( 92,944 ) | ( 1 ) | ( 387,932 ) | ( 5 ) | |
| Non-operating income and expenses | ||||||
| 7100 | Interest revenue | 6 (26) | 30,402 | - | 39,133 | 1 |
| 7010 | Other income | 6 (27) | 625,023 | 9 | 469,936 | 6 |
| 7020 | Other gains and losses | 6 (2)(12)(17)(28) | 1,560,263 | 22 | ( 202,396 ) | ( 3 ) |
| 7050 | Finance costs | 6 (29) | ( 172,532 ) | ( 3 ) | ( 121,136 ) | ( 2 ) |
| 7060 | Share of profit (loss) on associates and joint ventures accounted for using equity method | 6 (7) | ||||
| 7000 | Total non-operating income and expenses | 65,788 | 1 | ( 41,086 ) | - | |
| 7900 | Net income (loss) before tax | 2,108,944 | 29 | 144,451 | 2 | |
| 7950 | Income tax expense | 6 (31) | ( 2,016,000 | 28 | ( 243,481 ) | ( 3 ) |
| 8200 | Net profit (loss) | 296,174 | ( 4 ) | ( 69,286 ) | ( 1 ) | |
| Other comprehensive income (net) | ||||||
| Items that will not be reclassified to profit or loss | ||||||
| 8311 | Remeasurement of defined benefit plans | 6 (20) | $ 9,999 | - | $ 43,693 | - |
| 8316 | Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income | 6 (3) | ||||
| 8349 | Income tax related to items that will not be reclassified | 6 (31) | 157,940 | 2 | ( 82,936 ) | ( 1 ) |
| 8310 | Sum of items that will not be reclassified to profit or loss | 1,182 | - | ( 8,614 ) | - | |
| Items that may be reclassified subsequently to profit or loss | 166,757 | 2 | ( 47,857 ) | ( 1 ) | ||
| 8361 | Exchange differences on translating the financial statements of foreign operations | 6 (24) | ||||
| 8370 | Share of other comprehensive income (loss) of associates and joint ventures accounted for using the equity method | 5,769 | - | 216,739 | 3 | |
| 8360 | Sum of items that may be reclassified subsequently to profit or loss | 690 | - | 219 | - | |
| 8300 | Other comprehensive income (net) | 5,079 | - | 216,958 | 3 | |
| 8500 | Total comprehensive income for the year | $ 171,836 | 2 | $ 169,101 | 2 | |
| Net income (loss) attributable to: | ||||||
| 8610 | Owners of parent company | $ 1,726,201 | 24 | ($ 290,103 ) | ( 4 ) | |
| 8620 | Non-controlling interests | ( 6,375 ) | - | ( 22,664 ) | - | |
| Total | $ 1,719,826 | 24 | ($ 312,767 ) | ( 4 ) | ||
| Total comprehensive income/(loss) attributable to: | ||||||
| 8710 | Owners of parent company | $ 1,892,018 | 26 | ($ 122,034 ) | ( 2 ) | |
| 8720 | Non-controlling interests | ( 356 ) | - | ( 21,632 ) | - | |
| Total | $ 1,891,662 | 26 | ($ 143,666 ) | ( 2 ) | ||
| Earnings (losses) per share | 6 (32) | |||||
| 9750 | Basic earnings (losses) per share | $ | 1.58 | ($ | 0.27 ) | |
| 9850 | Diluted earnings (losses) per share | $ | 1.58 | ($ | 0.27 ) |
The notes attached are part of the Consolidated Financial Statements and shall be read together.
Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih
CMC Magnetics Corporation and Its Subsidiaries
Consolidated Statements of Changes in Equity
From January 1st to December 31st of 2025 and 2024
Unit: NTS thousands
| Notes | Common stock | Capital surplus | Retained earnings | Other equity interest | Total | Non-controlling interests | Total equity | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Legal reserve | Special reserve | Unappropriated earnings (losses to be compensated) | Exchange differences on translating the financial statements of foreign operations | Unrealized gains or losses on financial assets at fair value through other comprehensive income | |||||||
| January 1 to December 31, 2024 | |||||||||||
| Balance as of January 1, 2024 | $ 10,893,483 | $ 6,720,506 | $ 47,735 | $ 255,790 | $ 664,857 | ($ 82,865) | ($ 19,603) | $ 18,479,903 | $ 339,611 | $ 18,819,514 | |
| Net loss | - | - | - | - | (290,103) | - | - | (290,103) | (22,664) | (312,767) | |
| Other comprehensive income (loss) for the year | 6 (3)(24) | - | - | - | - | 34,176 | 216,921 | (83,028) | 168,069 | 1,032 | 169,101 |
| Total comprehensive income for the year | - | - | - | - | (255,927) | 216,921 | (83,028) | (122,034) | (21,632) | (143,666) | |
| Appropriation of earnings for 2023: | 6 (23) | ||||||||||
| Legal reserve | - | - | 66,486 | - | (66,486) | - | - | - | - | - | |
| Special reserve | - | - | - | (153,322) | 153,322 | - | - | - | - | - | |
| Cash dividends | - | - | - | - | (740,757) | - | - | (740,757) | - | (740,757) | |
| Difference between the equity price of subsidiary actually acquired or disposed of and the book value | 6 (22) | - | 64,225 | - | - | - | - | - | 64,225 | 16,875 | 81,100 |
| Disposal of equity instruments measured at fair value through other comprehensive income | 6 (3)(24) | - | - | - | - | (1,502) | - | 1,502 | - | - | - |
| Balance as of December 31, 2024 | $ 10,893,483 | $ 6,784,731 | $ 114,221 | $ 102,468 | ($ 246,493) | $ 134,056 | ($ 101,129) | $ 17,681,337 | $ 334,854 | $ 18,016,191 | |
| January 1 to December 31, 2025 | |||||||||||
| Balance as of January 1, 2025 | $ 10,893,483 | $ 6,784,731 | $ 114,221 | $ 102,468 | ($ 246,493) | $ 134,056 | ($ 101,129) | $ 17,681,337 | $ 334,854 | $ 18,016,191 | |
| Net profit (loss) | - | - | - | - | 1,726,201 | - | - | 1,726,201 | (6,375) | 1,719,826 | |
| Other comprehensive income (loss) for the year | 6 (3)(24) | - | - | - | - | 8,271 | 5,334 | 152,212 | 165,817 | 6,019 | 171,836 |
| Total comprehensive income for the year | - | - | - | - | 1,734,472 | 5,334 | 152,212 | 1,892,018 | (356) | 1,891,662 | |
| Appropriation of earnings for 2024: | 6 (23) | ||||||||||
| Legal reserve used to compensate for losses | - | - | (114,221) | - | 114,221 | - | - | - | - | - | |
| Special reserve used to compensate for losses | - | - | - | (102,468) | 102,468 | - | - | - | - | - | |
| Common stock used to compensate for losses | 6 (22)(23) | - | (29,804) | - | - | 29,804 | - | - | - | - | - |
| Distribution of Capital Surplus in Cash | 6 (22)(23) | - | (326,805) | - | - | - | - | - | (326,805) | - | (326,805) |
| Difference between the equity price of subsidiary actually acquired or disposed of and the book value | 6 (22) | - | 4,096 | - | - | - | - | - | 4,096 | 2,173 | 6,269 |
| Disposal of equity instruments measured at fair value through other comprehensive income | 6 (3)(24) | - | - | - | - | (1,188) | - | 1,188 | - | - | - |
| Balance as of December 31, 2025 | $ 10,893,483 | $ 6,432,218 | $ - | $ - | $ 1,733,284 | $ 139,390 | $ 52,271 | $ 19,250,646 | $ 336,671 | $ 19,587,317 |
The notes attached are part of the Consolidated Financial Statements and shall be read together.
Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih
CMC Magnetics Corporation and Its Subsidiaries
Consolidated Statements of Cash Flows
From January 1st to December 31st of 2025 and 2024
Unit: NT$ thousands
| Notes | January 1 to December 31, 2025 | January 1 to December 31, 2024 | |
|---|---|---|---|
| Cash flows from operating activities | |||
| Net profit (loss) for this period | $ 2,016,000 | ($ 243,481) | |
| Adjustments | |||
| Adjustments for | |||
| Depreciation expenses (including property, plant and equipment, right-of-use assets, and investment properties) | 6 (8)(9)(30) | ||
| Depreciation expenses of investment property | 6 (11)(29) | 235,698 | 419,975 |
| Amortization expenses | 6 (30) | 28,843 | 30,606 |
| Expected credit loss | 12 (2) | 19,817 | 57,601 |
| Net losses (gains) on financial assets and liabilities at fair value through profit and loss | 6 (28) | 86,000 | 38,165 |
| Interest expenses | 6 (29) | ( 464,277 ) | 84,429 |
| Interest revenue | 6 (26) | 172,532 | 121,136 |
| Dividend income | 6 (27) | ( 30,402 ) | ( 39,133 ) |
| Share of profit of associates accounted for using equity method | 6 (7) | 535,445 ) | ( 394,959 ) |
| Gains on disposal of property, plant and equipment | 6 (28) | ( 65,788 ) | 41,086 |
| Gains on disposal of non-current assets held for sale | 6 (28) | ( 1,770 ) | ( 113 ) |
| Gains on disposal of investments accounted for using the equity method | 6 (28) | ( 1,224,008 ) | - |
| Loss on sublease of right-of-use assets | 6 (10)(28) | - | 1,797 |
| Non-financial asset impairment losses | 6 (12)(28) | 101,591 | 32,165 |
| Gains on lease modification | 6 (9)(28) | - | ( 442 ) |
| Changes in assets/liabilities related to operating activities | |||
| Net changes in operating assets | |||
| Financial assets mandatorily at fair value through profit or loss | ( 1,977,888 ) | ( 1,233,350 ) | |
| Notes receivable | 584 | 3,489 | |
| Accounts receivable (including related and non-related parties) | ( 37,775 ) | 3,638 | |
| Other receivables | 26,916 | 37,937 | |
| Inventories | 135,374 | 31,022 | |
| Other current assets | ( 19,540 ) | 46,097 | |
| Net defined benefit assets | 593 | - | |
| Net changes in operating liabilities | |||
| Financial liabilities at fair value through profit or loss | ( 53,494 ) | ( 17,944 ) | |
| Contract liabilities | ( 4,895 ) | ( 14,674 ) | |
| Notes and accounts receivable | ( 6,797 ) | ( 245,926 ) | |
| Other payables | ( 3,044 ) | 2,432 | |
| Other current liabilities | ( 5,276 ) | 43,748 | |
| Net defined benefit liabilities | ( 198 ) | ( 272 ) | |
| Cash outflow from operating activities | ( 1,607,399 ) | ( 1,194,971 ) | |
| Interest received | 30,404 | 39,174 | |
| Dividends received | 533,308 | 392,347 | |
| Interest paid | ( 168,210 ) | ( 119,808 ) | |
| Income tax refunded (paid) | ( 118,171 ) | 15,216 | |
| Net cash outflow from operating activities | ( 1,330,068 ) | ( 868,042 ) |
(Continued on the next page)
CMC Magnetics Corporation and Its Subsidiaries
Consolidated Statements of Cash Flows
From January 1st to December 31st of 2025 and 2024
Unit: NT$ thousands
| Notes | January 1 to December 31, 2025 | January 1 to December 31, 2024 | |
|---|---|---|---|
| Cash flows from investing activities | |||
| Price of acquisition of financial assets mandatorily at fair value through profit or loss | ($ 63,241) | ($ 74,588) | |
| Price of disposal of financial assets mandatorily measured at fair value through profit or loss | 8,392 | - | |
| Price of acquisition of financial assets at fair value through other comprehensive income | ( 3,000) | ( 149,070) | |
| Proceeds from disposal of financial assets at fair value through other comprehensive income | 20,103 | 22,025 | |
| Refund from capital reduction related to financial assets at fair value through other comprehensive income | 5,470 | 4,587 | |
| Acquisition of financial assets at amortized cost | ( 183,498) | ( 89,518) | |
| Disposal of financial assets at amortized cost | 82,871 | 101,330 | |
| Acquisition of investment property | 6 (11) | ( 9,380) | ( 316) |
| Price of acquisition of property, factories and equipment | 6 (33) | ( 124,983) | ( 121,265) |
| Proceeds from disposal of property, plant and equipment | 5,308 | 2,501 | |
| Proceeds from disposal of non-current assets held for sale | 1,595,901 | - | |
| Price of acquisition of intangible assets | ( 10,375) | ( 23,120) | |
| Decrease (Increase) in other non-current assets | ( 1,234) | 1,780 | |
| Increase in prepayments for investments (listed in other non-current assets) | ( 69,410) | - | |
| Net cash inflow (outflow) from investing activities | 1,252,924 | ( 325,654) | |
| Cash flows from financing activities | |||
| Increase in short-term borrowings | 6 (34) | 339,000 | 641,000 |
| Increase in short-term notes and bills payable | 6 (34) | 16,000 | 134,000 |
| Long-term borrowings taking place for current period | 6 (34) | 5,680,000 | 3,555,000 |
| Repayment of long-term borrowings for current period | 6 (34) | ( 5,340,000) | ( 2,707,000) |
| Increase (decrease) in other non-current liabilities | 7,433 | ( 6,176) | |
| Repayment of principal of lease liabilities | 6 (34) | ( 69,840) | ( 74,774) |
| Cash dividends distributed | 6 (24) | - | ( 740,757) |
| Cash distributed from capital surplus of the parent company | 6 (22)(23) | ( 326,805) | - |
| Consideration collected from transactions with non-controlling interests | 6 (22) | 6,269 | 81,100 |
| Net cash inflow from financing activities | 312,057 | 882,393 | |
| Effects of exchange rate changes on the balance of cash held in foreign currencies | 5,282 | 5,383 | |
| Increase (decrease) in cash and cash equivalents for current period | 240,195 | ( 305,920) | |
| Cash and cash equivalents, beginning of period | 2,637,373 | 2,943,293 | |
| Cash and cash equivalents, end of period | $ 2,877,568 | $ 2,637,373 |
The notes attached are part of the Consolidated Financial Statements and shall be read together.
Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih
CMC Magnetics Corporation and Its Subsidiaries
Notes to Consolidated Financial Statements
Fiscal years 2025 and 2024
Unit: NT$ thousands
(Unless specified otherwise)
- Company History
CMC Magnetics Corporation (hereinafter referred to as the "Company") was incorporated in the Republic of China. The main business items of the Company and its subsidiaries (hereinafter collectively referred to as the "Group") are the manufacturing and sale of consumer electronic products, including optical discs, and the acquisition of film agency rights, and production and distribution of digital discs and Blu-ray discs for sales business. The Company's shares have been listed on the Taiwan Stock Exchange for trading since February 17, 1992.
- Date and Procedure for Approval of Financial Statements
The consolidated financial statements were approved by the Board of Directors on March 12, 2026 for release.
- Application of New and Amended Standards and Interpretations
a. Effect of the adoption of new issuance of or amendments to International Financial Reporting Standards ("IFRS") as endorsed by the Financial Supervisory Commission ("FSC")
The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed and issued into effect by the FSC that are applicable in 2025:
| New, Revised, and Amended Standards and Interpretations | Amendments to IAS 21 "Lack of Exchangeability" |
|---|---|
| Effective Date | Announced by IASB |
| January 1, 2025 |
The standards and interpretations above have no significant impact on the Group's financial position and financial performance based on the Group's reasonable assessment.
b. Effect of the new issuance of or amendments to IFRSs as endorsed by the FSC, but not yet adopted
The following table summarizes the new, revised, and amended standards and interpretations of IFRSs endorsed by the FSC that are applicable in 2026:
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| New, Revised, and Amended Standards and Interpretations | Effective Date Announced by IASB |
|---|---|
| Amendments to IFRS 9 and IAS 7 "Amendments to the Classification and Measurement of Financial Instruments" | January 1, 2026 |
| Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity" | January 1, 2026 |
| IFRS 17 "Insurance Contracts" | January 1, 2023 |
| Amendments to IFRS 17 “Insurance Contracts” | January 1, 2023 |
| Amendments to IFRS 17 "Initial Application of IFRS 17 and IFRS 9 - Comparative Information" | January 1, 2023 |
| Annual Improvements to IFRS Accounting Standards — Volume 11 | January 1, 2026 |
The Group has assessed that the standards and interpretations above have no significant influence on the Group's financial position and financial performance, except as those indicated below:
Amendments to IFRS 9 and IAS 7 "Amendments to the Classification and Measurement of Financial Instruments"
Updates through irrevocable election designate equity instruments measured at fair value through other comprehensive income (FVOCI) to disclose their fair value by each category, without the need to disclose fair value information for each underlying asset. Additionally, during the reporting period, it is essential to disclose the amounts of fair value gains and losses recognized in other comprehensive income. This disclosure should separately present the fair value gains and losses related to investments that were derecognized during the reporting period, as well as those related to investments still held at the end of the reporting period. Furthermore, it should include the accumulated gains and losses transferred to equity from investments derecognized during the reporting period.
c. Effects of IFRSs issued by IASB, but not yet endorsed by the FSC
The following table sets out the criteria and explanations for the new releases, amendments and revisions of the IFRSs that have been published by the IASB, but not yet endorsed by the FSC:
| New, Revised, and Amended Standards and Interpretations | Effective Date Announced by IASB |
|---|---|
| Amendments to IFRS 10 and IAS 28 "Sale or Contribution of Assets between an Investor and its Associate or Joint Venture" | To be determined by the IASB |
| IFRS 18 "Presentation and Disclosure in Financial Statements" | January 1, 2027 (Note) |
| IFRS 19 "Subsidiaries without Public Accountability: Disclosures" | January 1, 2027 |
| Amendments to IAS 21 "Translation to a Hyperinflationary Presentation Currency" | January 1, 2027 |
Note: In a press release dated September 25, 2025, FSC announced that publicly traded companies will adopt International Financial Reporting Standards No. 18 (hereinafter "IFRS 18") beginning in fiscal year 2028. Additionally, companies requiring early adoption of IFRS 18 may elect to adopt IFRS 18 early after the FSC's endorsement.
The Group has assessed that the standards and interpretations above have no significant influence on the Group's financial position and financial performance, except as those indicated below:
IFRS 18 "Presentation and Disclosure in Financial Statements"
IFRS 18 "Presentation and Disclosure in Financial Statements," supersedes IAS 1, updates the structure of the Statement of Comprehensive Income, introduces new disclosures for measuring management performance, and reinforces the principles of aggregation and disaggregation applied to the primary financial statements and accompanying notes.
4. Summary of Significant Accounting Policies
The principal accounting policies applied in the preparation of the consolidated financial statements are set out below. Unless otherwise specified, the policies shall be applicable to all reporting periods presented.
a. Statement of compliance
The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee (hereinafter referred to as IFRSs) as endorsed and issued into effect by the FSC.
b. Basis of preparation
1) Except for the following significant items, the consolidated financial statements have been prepared on the historical cost basis:
a) Financial assets and financial liabilities (including derivative instruments) at fair value through profit or loss.
b) Financial assets at fair value through other comprehensive income.
c) Defined benefit assets and liabilities recognized based on the net amount of pension fund assets less present value of defined benefit obligation.
2) The preparation of financial statements has been in conformity with IFRSs, requiring the use of certain critical accounting estimates. It also requires the management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements are disclosed in Note 5.
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c. Basis of consolidation
1) Principle of preparation of the consolidated financial statements
a) All subsidiaries are included in the Group's consolidated financial statements. Subsidiaries are all entities controlled by the Group. The Group controls an entity when the Group is exposed, or has rights, to variable returns from its involvement in the entity and has the ability to affect those returns through its power over the entity. Consolidation of subsidiaries begins from the date the Group obtains control of the subsidiaries and ceases when the Group loses control over the subsidiaries.
b) Inter-company transactions, balances, and unrealized gains or losses on transactions between companies within the Group are eliminated. Accounting policies of subsidiaries are adjusted, when necessary, to remain consistent with those of the Company.
c) The profit or loss and each component of other comprehensive income is attributed to the owners of the parent company and to the non-controlling interest. Total comprehensive income is also attributed to the owners of the parent company and non-controlling interest even if this results in the non-controlling interests having a deficit balance.
d) If changes in the shareholding of a subsidiary do not result in loss of control (and are not transactions involving non-controlling interests), they are treated as equity transactions, meaning they are considered transactions between the owners. The difference between the adjustment amount of non-controlling interests and the fair value of the consideration paid or received is directly recognized as equity.
e) When the Group loses control over a subsidiary, the Group re-measures any investment retained in the former subsidiary at its fair value. That fair value is regarded as the fair value on initial recognition of a financial asset or the cost on initial recognition of the associate or joint venture. Any difference between fair value and carrying amount is recognized in profit or loss. For all amounts previously recognized in other comprehensive income related to the subsidiary, the accounting treatment is the same as if the Group directly disposes of relevant assets or liabilities, that is, if the benefit or loss previously recognized as other comprehensive income will be reclassified as profit or loss when the relevant assets or liabilities are disposed of, when control over the subsidiary is lost, the gains or loss will be reclassified as profit or loss from equity.
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2) Subsidiaries included in the consolidated financial statements:
| Investor | Subsidiary | Nature of business | Ownership percentage (%) | Description | |
|---|---|---|---|---|---|
| December 31, 2025 | December 31, 2024 | ||||
| CMC | CHC International Investment Corporation (CHC) | General investment business | 100.00 | 100.00 | |
| CMC | CIA Holding Corp. (CIA) | General investment business | 86.35 | 86.35 | |
| CHC | CIA | General investment business | 13.65 | 13.65 | |
| CMC | EMC Investment Holding Ltd.(EMC H) | General investment business | 100.00 | 100.00 | |
| CMC | CMC Entertainment Holding Corporation (CMC Entertainment) | Investment in film production and related businesses | 100.00 | 100.00 | |
| CMC | CMC Entertainment Hub Corporation (CMC Entertainment Hub) | Shopping mall business | 100.00 | 100.00 | |
| CMC | Transtouch Technology Inc. (Transtouch) | Production and sales of touch panels | 48.67 | 48.96 | Note 2 |
| CMC | Deltamac (Taiwan) Co., Ltd. (Deltamac) | Manufacturing, distribution, and sale of audiovisual products | 37.33 | 37.64 | |
| CMC | Verbatim GmbH(VGmbH) | Trading of storage media and electronic products | 100.00 | 100.00 | Note 3 |
| CHC | Deltamac | Manufacturing, distribution, and sale of audiovisual products | 18.13 | 18.19 | |
| CHC | Taiwanet.com Corporation (Taiwanet.com) | Provision of electronic information | 100.00 | 100.00 | |
| CHC | Taiwan.com Corporation (Taiwan.com) | Internet service | 100.00 | 100.00 | |
| CIA | SuperNet Holding Ltd. (SuperNet) | General investment business | 100.00 | 100.00 | |
| CIA | Kinease Investment Ltd. (Kinease) | Development of real estate | 100.00 | 100.00 | |
| EMC H | Media Factory LLC (MFLLC) | General investment business | 100.00 | 100.00 | |
| EMC H | F5 Holdings,Ltd. (F5) | General investment business | 100.00 | 100.00 | |
| EMC H | Fortune (Jiangsu) Electronic Materials Co., Ltd. (Fortune (Jiangsu) Electronic) | Trading of optical discs | 100.00 | 100.00 |
| Investor | Subsidiary | Nature of business | Ownership percentage (%) | Description | |
|---|---|---|---|---|---|
| December 31, 2025 | December 31, 2024 | ||||
| EMC H | Jet-Thai Hi-Tech Co., Ltd.(Jet-Thai) | Production and sales of optical discs | - | - | Note 1 |
| EMC H | Verbatim Japan Ltd.(VJP) | Trading of storage media and electronic products | 100.00 | 100.00 | |
| EMC H | Verbatim Australia Pty. Ltd.(VAU) | Trading of storage media and electronic products | 100.00 | 100.00 | |
| EMC H | Verbatim GmbH(VGmbH) | Trading of storage media and electronic products | - | - | Note 3 |
| EMC H | Verbatim (Hong Kong) Limited(VHK) | Trading of storage media and electronic products | 100.00 | 100.00 | |
| F5 | Verbatim Americas LLC(VUS) | Trading of storage media and electronic products | 100.00 | 100.00 | |
| VUS | Vexus LLC. (Vexus) | Trading of storage media products | 100.00 | 100.00 | |
| MFLLC | Fortune (Jiangsu) Multimedia Co., Ltd. (Fortune (Jiangsu) Multimedia) | Trading of optical discs | 90.00 | 90.00 | |
| Fortune (Jiangsu) Electronic | Fortune (Jiangsu) Multimedia | Trading of optical discs | 7.00 | 7.00 | |
| MFLLC | Nantong Zhongxing Multimedia Co., Ltd. (Zhongxing Multimedia) | Trading of optical discs | 49.00 | 49.00 | Note 2 |
For the subsidiaries mentioned in the above, except for the ones mentioned in Note 1, all of them have been evaluated based on the financial statements audited by CPAs.
Note 1: Liquidation has been completed in 2024; therefore, the Company no longer holds control over it.
Note 2: The Company holds less than $50\%$ of the shares; however, it can control the financial, operational, and personnel policies of that company. Therefore, it is included in the preparation of the consolidated financial statements.
Note 3: The transfer of equity was completed in November 2024, with EMC H transferring $100\%$ of its shares to CMC.
3) Subsidiaries not listed in the consolidated financial statements: N/A.
4) Adjustments and treatment methods of subsidiaries using different accounting periods: N/A.
5) Major restriction: N/A.
6) Subsidiaries with significant non-controlling interests that are material to the Group:
As of December 31, 2025 and 2024, the total amount of non-controlling interests for the Group is NT$336,671 and NT$334,854, respectively. The following is the information of subsidiaries with significant non-controlling interests that are material to the Group:
| Subsidiary | Principal place of business | Non-controlling interests | Non-controlling interests | ||
|---|---|---|---|---|---|
| December 31, 2025 | December 31, 2024 | ||||
| Amount | Ownership percentage | Amount | Ownership percentage | ||
| Transtouch | ROC | $ 207,044 | 51.33% | $ 202,492 | 51.04% |
| Deltamac | " | 121,636 | 44.54% | 124,373 | 44.17% |
Aggregate financial information of subsidiaries:
Balance Sheet
| Transtouch | ||
|---|---|---|
| December 31, 2025 | December 31, 2024 | |
| Current assets | $ 319,043 | $ 277,711 |
| Non-current assets | 141,785 | 172,561 |
| Current liabilities | ( 87,954) | ( 83,579) |
| Non-current liabilities | ( 17,408) | ( 13,572) |
| Total net assets | $ 355,466 | $ 353,121 |
| Deltamac | ||
| --- | --- | --- |
| December 31, 2025 | December 31, 2024 | |
| Current assets | $ 204,162 | $ 213,239 |
| Non-current assets | 153,969 | 147,728 |
| Current liabilities | ( 43,836) | ( 46,175) |
| Non-current liabilities | ( 9,328) | ( 1,063) |
| Total net assets | $ 304,967 | $ 313,729 |
Statement of Comprehensive Income
| Transtouch | ||
|---|---|---|
| 2025 | 2024 | |
| Revenue | $ 295,310 | $ 262,049 |
| Net loss before tax | ($ 5,075) | ($ 27,421) |
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| Transtouch | ||
|---|---|---|
| Income tax benefit | 295 | 294 |
| Net loss | ( 4,780) | ( 27,127) |
| Other comprehensive income (after tax) | 7,125 | 2,929 |
| Total comprehensive income for the year | $ 2,345 | ($ 24,198) |
| Total comprehensive income attributable to non-controlling interests | $ 1,200 | ($ 11,193) |
| Deltamac | ||
| --- | --- | --- |
| 2025 | 2024 | |
| Revenue | $ 172,722 | $ 186,195 |
| Net loss before tax | ($ 13,866) | ($ 21,955) |
| Income tax expense | - | - |
| Net loss | ( 13,866) | ( 21,955) |
| Other comprehensive income (after tax) | 5,104 | ( 942) |
| Total comprehensive income for the year | ($ 8,762) | ($ 22,897) |
| Total comprehensive income attributable to non-controlling interests | ($ 3,890) | ($ 9,855) |
Statements of Cash Flows
| Transtouch | ||
|---|---|---|
| 2025 | 2024 | |
| Net cash outflow from operating activities | ($ 137) | ($ 1,952) |
| Net cash in(out)flow from investing activities | ( 25,145) | 31,831 |
| Net cash outflow from financing activities | ( 15,833) | ( 18,314) |
| (Decrease) increase in cash and cash equivalents for current period | ( 41,115) | 11,565 |
| Cash and cash equivalents, beginning of period | 95,398 | 83,833 |
| Cash and cash equivalents, end of period | $ 54,283 | $ 95,398 |
| Deltamac | ||
|---|---|---|
| 2025 | 2024 | |
| Net cash inflow from operating activities | $ 2,663 | $ 31,249 |
| Net cash outflow from investing activities | ( 10,688) | ( 117,459) |
| Net cash outflow from financing activities | ( 6,998) | ( 6,971) |
| Decrease in cash and cash equivalents for current period | ( 15,023) | ( 93,181) |
| Cash and cash equivalents, beginning of period | 43,349 | 136,530 |
| Cash and cash equivalents, end of period | $ 28,326 | $ 43,349 |
d. Foreign currency translation
All items on the financial statements of each entity of the Group are measured at the currency of the principal economic environment in which the entity operates (i.e. functional currency). The consolidated financial statements were expressed in New Taiwan Dollars, the Company's functional currency.
1) Foreign currency transactions and balances
a) Foreign currency transactions are converted into the functional currency using the spot exchange rate on the transaction date or measurement date. Any exchange differences arising from these transactions are recognized in the current period's income statement.
b) Balances of monetary assets and liabilities denominated in foreign currencies are adjusted at the spot exchange rates prevailing at the balance sheet date. Exchange gains or losses arising from such adjustments are recognized in profit or loss
c) Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value through profit or loss, are translated at the exchange rates prevailing at the balance sheet date, where their translation differences are recognized in profit or loss as part of the fair value gain or loss. Non-monetary assets and liabilities denominated in foreign currencies measured at fair value through other comprehensive income are translated at the exchange rates prevailing at the balance sheet date, where their translation differences are recognized in other comprehensive income. However, non-monetary assets and liabilities denominated in foreign currencies that are not measured at fair value are translated using the historical exchange rates at the initial transaction dates.
d) All other foreign exchange gains or losses based on the nature of the transactions are presented in the statement of comprehensive income in the category of "other gains and losses."
2) Translation of foreign operations
a) The operating results and financial positions of all the Group's entities, associates, and joint arrangements that have a functional currency different from the presentation currency are translated into the presentation currency as follows:
i. Assets and liabilities for each balance sheet presented are translated at the closing exchange rate at the date of that balance sheet;
ii. Income and expenses for each statement of comprehensive income are translated at average exchange rates of the period; and
iii. All resulting exchange differences are recognized in other comprehensive income.
b) When the foreign entity partially disposed of or sold is an associate or a joint arrangement, exchange differences that were recorded in other comprehensive income are proportionately reclassified to profit or loss as part of the gain or loss on sale. However, when the Group retains partial interest in the associate or joint arrangement, after losing significant influence over the former foreign associate or losing joint control over the joint arrangement, such a transaction shall be accounted for as disposal of all interests in the foreign operation.
c) When the foreign operation that is partially disposed of or sold is a subsidiary, cumulative exchange differences that were recorded in other comprehensive income are proportionately transferred to the non-controlling interests of the foreign operation. However, if the Group still retains partial interests in the former foreign subsidiary after losing control of the former foreign subsidiary, such a transaction shall be accounted for as disposal of all interests in the foreign operation.
e. Classification of Current and Non-current Assets and Liabilities
1) Assets that meet one of the following criteria are classified as current assets:
a) Assets that are expected to be realized, or are intended to be sold or consumed within the normal operating cycle.
b) Assets held primarily for the purpose of trading.
c) Expected to be realized within 12 months after the reporting period.
d) Cash or cash equivalents, excluding assets restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.
The Group classifies assets not meeting the aforesaid criteria into non-current assets.
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2) Liabilities that meet one of the following criteria are classified as current liabilities:
a) Liabilities that are expected to be settled within the normal operating cycle.
b) Assets held primarily for the purpose of trading.
c) Expected to be settled within 12 months after the reporting period.
d) Liabilities that do not possess the right to defer settlement of liabilities for at least twelve months after the reporting period.
The Group classifies liabilities not meeting the aforesaid criteria into non-current liabilities.
f. Cash equivalents
Cash equivalents refer to investments that are short-term, highly liquid, subject to a low risk of changes in value, and readily convertible to a known amount of cash. Time deposits satisfying the afore-mentioned definition and for which the objective of holding is to meet the short-term operating cash commitment are classified as the cash equivalent.
g. Financial assets at fair value through profit or loss (FVTPL)
1) Financial assets that are not measured at amortized cost or at fair value through other comprehensive income (FVTOCI).
2) Regular way purchases and sales of financial assets at FVTPL are accounted for on the trade date.
3) The Group's initial recognition is on a fair value basis, with relevant transaction costs recognized in profit or loss, and subsequently at fair value, and gains or losses thereof are recognized in profit or loss.
4) The Group recognizes the dividend income in profit or loss when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.
h. Financial assets at FVTOCI
1) Refers to the irrevocable election made at initial recognition that allows the Company to present fair value changes of equity investment not held for trading in other comprehensive income.
2) The Group's financial assets measured at FVTOCI in accordance with trading conventions are accounted for on the trade date.
3) At initial recognition, the Group measures the financial assets at fair value plus transaction costs, and subsequently measures the financial assets at fair value:
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Any changes in the fair value of equity instruments are recognized in other comprehensive income, while subsequently accrued benefits or losses previously recognized in other comprehensive income are not then reclassified to profit or loss, but are transferred to retained earnings. The Group recognizes the dividend income in profit or loss when the right to receive payment is established, future economic benefits associated with the dividend will flow to the Group, and the amount of the dividend can be measured reliably.
i. Financial assets at amortized cost
1) Financial assets at amortized cost are those that meet all of the following criteria:
a) The objective of the Company's business model is achieved by collecting contractual cash flows.
b) The contract terms of the financial asset generate cash flow on a specific date, which is entirely the interest on the payment of the principal and the amount of principal outstanding.
2) The Group's financial assets measured at amortized cost in accordance with trading conventions are accounted for on the trade date.
3) At initial recognition, the Group measures the financial assets at fair value plus transaction costs, and subsequently adopts the effective interest method to recognize said assets in interest revenue and in impairment loss during the outstanding period according to the amortization procedure. During derecognition, the gains or losses thereof are recognized in profit or loss.
4) The Group's time deposits which do not meet the condition of cash equivalents are those with a short maturity period and are measured at initial investment amount as the effect of discounting is immaterial.
j. Accounts and notes receivable
1) Accounts and notes receivable are accounts and notes of which the contractual right to consideration for goods sold or services rendered is unconditional.
2) These include interest-free short-term trade and notes receivables, where the effect of discounting is not material, and the Group measures the receivable by the original invoice amount.
k. Impairment of financial assets
The Group, at each balance sheet date, considers all reasonable and corroborative information (including forward-looking one) based on the unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income and financial assets measured at amortized cost. For those with no significant increase in credit risk since initial recognition, the
~26~
loss allowance is measured at 12-month expected credit losses; for those with a significant increase in credit risk since initial recognition, the loss allowance is measured at the lifetime expected credit losses. For accounts receivable or contract assets that does not contain significant financial components, the loss allowance is measured at the lifetime expected credit losses.
l. Derecognition of financial assets
The Group derecognizes a financial asset when one of the following conditions is met:
1) The contractual rights to receive the cash flows from the financial asset expire.
2) The contractual rights to receive cash flows of the financial asset have been transferred, and substantially all risks and rewards of ownership of the financial asset have been transferred.
m. Lease Transactions of the Lessor - Accounts Receivable from Leases/Operating Leases
1) According to the conditions of the lease agreement, when almost all risks and rewards of ownership are assumed by the lessee, it is classified as a finance lease.
a) At the commencement of the lease, the total lease investment amount (including the original direct costs) is recognized as 'accounts receivable from leases', and the difference between the total accounts receivable from leases and the present value is recognized as 'unearned financing income from finance leases'.
b) Subsequently, the financing income will be allocated over the lease term on a systematic and reasonable basis to reflect the lessor's fixed rate of return on net investment in the lease.
c) Lease payments related to the period (excluding service costs) are deducted from the total lease investment to reduce principal and unearned financing income.
2) Rental income from operating leases is recognized as current period profit or loss on a straight-line basis over the lease term.
n. Inventories
Inventories are measured at cost or net realizable value, whichever is lower. The cost is calculated using the weighted average method. The cost of finished goods and work-in-process comprises raw materials, direct labor, other direct costs, and relevant production overheads (allocated based on normal operating capacity) without including borrowing costs. When comparing cost and net realizable value, the item-by-item comparison method is used, where net realizable value refers to the estimated selling price during normal business operations minus the estimated costs still to be incurred to complete the product and the estimated costs required to sell the product.
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o. Non-current assets held for sale
When the carrying amount of a non-current asset is mainly recovered through a sale transaction rather than continuing use, and it is highly likely to be sold, it is classified as an asset held for sale and measured at the lower of its carrying amount or fair value less the cost of sale.
p. Investments accounted for using equity method- associates
1) Associates are all entities over which the Group has significant influence without control. In general, it is an entity, in which at least 20% of its voting shares are directly or indirectly held by the Group. Investments in associates are accounted for using the equity method and are initially recognized at cost.
2) The Group's share of profit or loss on its associates after acquisition is recognized in profit or loss, and its share of other comprehensive income after acquisition is recognized in other comprehensive income. When the Group’s share of losses on an associate equals or exceeds its interest in the associate (including any other unsecured receivables), the Group does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.
3) When changes in an associate's equity do not arise from profit or loss or other comprehensive income of the associate and such changes do not affect the Group's ownership percentage of the associate, the Group recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.
4) Unrealized gains or losses on transactions between the Group and its associates are eliminated in proportion to the Group’s interest in the associates. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. The accounting policies of associates have been adjusted as necessary, and are consistent with the policies adopted by the Group.
5) Where an associate issues new shares and the Group does not subscribe for or acquire new shares proportionately, which results in a change in the Group's ownership percentage of the associate but still maintains significant influence on the associate, the "capital surplus" and "investments accounted for using the equity method" shall be adjusted for the increase or decrease in the net value of the equity. Where its investment proportion decreases, in addition to the adjustments above, the profit or loss previously recognized in other comprehensive income due to decrease in its ownership interest and the profit or loss to be reclassified to profit or loss during the disposal of assets or liabilities shall be reclassified to profit or loss based on the proportion of decrease.
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6) Upon loss of significant influence over an associate, the Group shall remeasure the remaining investment retained in the former associate at its fair value. Any difference between the fair value and the carrying amount is recognized in profit or loss for the period.
7) When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate, are reclassified to profit or loss, on the same basis as would be required if the relevant assets or liabilities were disposed of by the Group directly. That is, if the gains or losses previously recognized as other comprehensive income will be reclassified as profit or loss when the relevant assets or liabilities are disposed of, when the loss has a significant impact on the associate, the gains or losses are reclassified from equity to profit or loss. If it retains significant influence over this associate, the amounts previously recognized in other comprehensive income in relation to the associate are reclassified to profit or loss proportionately in accordance with the aforementioned approach.
8) The Group performs impairment testing on associates with indicators of impairment as of the balance sheet date by treating the overall carrying amount of the investment (including goodwill) as a single asset and comparing its recoverable amount (the higher of value in use or fair value less costs of disposal) with the carrying amount. Any impairment loss recognized is included in the carrying amount of the investment. Reversal of impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.
9) When the Group disposes its investment in an associate and loses significant influence over this associate, the amounts previously recognized as capital surplus in relation to the associate are transferred to profit or loss. If it retains significant influence over this associate, said amounts are transferred to profit or loss in proportion to the percentage of disposal.
q. Property, plant and equipment
1) Property, factories, and equipment are initially recognized in cost. Borrowing costs incurred during the construction period are capitalized.
2) Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the part replaced shall be derecognized. All other amount of repairs and maintenance are recognized as profit or loss during the financial period in which they are incurred.
3) Except for land which is not depreciated, other property, plant, and equipment are subsequently measured using the cost model and are depreciated using the straight-line
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method to allocate their cost over their estimated useful lives. If the components of property, plant and equipment are significant, they shall be separately depreciated.
4) The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each balance sheet date. If expectations for the assets' residual values and useful lives differ from previous estimates or the patterns of consumption of the assets' future economic benefits embodied in the assets have changed significantly, any change is accounted for as a change in estimate under IAS 8 "Accounting Policies, Changes in Accounting Estimates, and Errors," from the date of the change. Useful lives of property, plant and equipment are as follows:
| Buildings and structures | 2–50 years |
|---|---|
| Machinery and equipment | 2–11 years |
| Others | 2–10 years |
r. Lease transactions with lessees—right-of-use assets / lease liabilities
1) Leased assets are recognized as right-of-use assets and lease liabilities on the date when they are available for use by the Group. When the lease contract is a short-term lease or lease of a low-value asset, the lease payments are recognized as an expense on a straight-line basis over the lease term.
2) Lease liabilities are recognized at the present value of the unpaid lease payments at the beginning of the lease at the discounted interest rate of the Group's incremental borrowings. Lease payments are fixed payments after deducting any lease incentives that can be collected. The lease liability is measured at amortized cost using the effective interest method subsequently, and the interest expense is recognized during the lease period. When a non-contractual modification causes a change in the lease term or lease payment, the lease liability will be reassessed and remeasured to adjust the right-of-use asset.
3) The right-of-use asset is recognized at cost at the lease commencement date. The cost comprises:
a) The originally measured amount of lease liabilities;
b) Lease payments made at or before the commencement of the lease; and
c) Any original direct costs incurred.
In the subsequent measurement in which the cost model is adopted, depreciation expenses are recognized at the earlier of the expiration date of the useful life of the right-of-use asset or the lease term. When the lease liability is reassessed, the remeasurement of the lease liability will be adjusted for the right-of-use asset.
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s. Investment property
An investment property is recognized initially at cost and measured subsequently using the cost model. Except for land, investment property is depreciated on a straight-line basis over its estimated useful life of 2–50 years.
t. Intangible assets
1) The cost of purchasing video copyrights for the distribution of digital discs and Blu-ray discs and other products is recognized based on the acquisition cost. The cost is based on the estimated distribution rights and quantity of individual films, and the relevant copyright costs are classified to cost of inventories and leased assets at the time of distribution. The cost of investing in film copyrights is distributed among the film's box office, audio-visual licensing, and sales, based on the proportion of projected total box office revenue and total audio-visual income. When the copyright of a video can be reliably measured against its revenue and future economic benefits are expected to accrue to the enterprise, costs will be allocated under operating expenses based on the proportion of box office revenue from the video to the estimated total box office revenue. For audio-visual licensing and sales, the associated copyright costs will be allocated to inventory costs at the time of release, based on the anticipated distribution rights and quantities for each individual video.
2) Trademark and Patent Rights
The cost of separately acquired trademarks and patents is recognized as an acquisition cost. The trademarks and patents acquired through business mergers are recognized at their fair value on the acquisition date. Trademarks and patents are finite-lived assets and are amortized over the remaining useful life of 4 to 10 years using the straight-line method.
3) Computer software and website development
Computer software and website development is recognized at the cost of acquisition and amortized by the straight line method based on the estimated useful life of one to five years.
4) Royalty fees
Royalty fees are recognized at the cost of acquisition and amortized by the straight line method based on the estimated useful life of three years, commencing from the beginning of the benefit period.
u. Other assets - office ornaments (listed in other non-current assets)
Antiques purchased, such as oil paintings and sculptures displayed in the company, are recognized at the cost of acquisition, and is not depreciated; however, the cost will be written off when the actual disposal is carried out.
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v. Impairment of non-financial assets
1) The Group assesses at each balance sheet date the recoverable amounts of those assets where there is an indication that they are impaired. An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount refers to the fair value of an asset less the cost of disposal or its value in use, whichever is higher. Except for goodwill, when circumstances contributed to the recognition of impairment loss of an asset in the previous period do not exist or are decreased, the recognized impairment loss is reversed to the carrying amount of an asset to the extent that it does not exceed the carrying amount (net of depreciation and amortization) if the impairment loss had not been recognized.
2) Goodwill, intangible assets with an indefinite useful life and intangible assets that have not yet been available for use shall be regularly estimated for their recoverable amounts. An impairment loss is recognized when the amount of an asset’s carrying amount exceeds its recoverable amount. The impairment loss for impairment of goodwill will not be reversed in subsequent years.
3) Goodwill is allocated to cash-generating units for the purpose of impairment testing. This allocation is based on the judgment of the operating units, and the goodwill is allocated among cash-generating units or groups that are expected to benefit from goodwill generated from business combinations.
w. Borrowings
1) Borrowings comprise long-term and short-term borrowings from banks. When the initial recognition of Group's borrowings is based on its fair value less transaction cost, for any subsequent difference between the price and redemption value after deducting transaction costs, interest expenses are recognized by the effective interest method during the outstanding period in profit or loss.
2) Fees paid on the establishment of borrowing facilities are recognized as transaction costs of the borrowing to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. When there is no evidence of the possibility that some or all the facility will be drawn down, the fee is recognized as a prepayment and amortized over the period of the facility to which it relates.
x. Accounts and notes payable
1) Accounts and notes payable refer to the debts incurred by purchase of raw materials, goods, or services on credit, and the notes payables incurred from both operating and non-operating activities.
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2) These include interest-free short-term accounts and notes payable, where the effect of discounting is not material, and the Group measures the receivable by the original invoice amount.
y. Financial liabilities at fair value through profit or loss
1) Financial liabilities that are mainly for sale or repurchase in the short-term, and are held for trading except for derivatives other than those designated as hedging instruments based on hedge accounting.
2) The Group's initial recognition is on a fair value basis, with relevant transaction costs recognized in profit or loss, and subsequently at fair value, and gains or losses thereof are recognized in profit or loss.
z. Derecognition of financial liabilities
The Group derecognizes a financial liability when the obligation under the contract is performed, canceled, or expires.
aa. Offsetting of financial assets and liabilities
The financial assets and liabilities may be offset and the net amount is presented in the balance sheet when there is a legally enforceable right to offset the recognized amounts of the financial assets and liabilities and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
bb. Non-hedging derivatives
Non-hedging derivatives are initially measured at the fair value on the date when a contract is signed and recognized as financial assets or liabilities at FVTPL. Subsequently, they are measured at fair value with gains or losses recognized in profit or loss.
cc. Provisions
1) Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the obligation can be reliably estimated. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation at the balance sheet date, which is discounted using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The amortization of discount is recognized as interest expense. Future operating losses shall not be recognized as provisions.
2) Carbon fees imposed under Taiwan's Climate Change Response Act and its subsidiary regulations do not fall under the scope of IFRIC Interpretation 21 "Levies," but are instead recognized and measured in accordance with International Accounting Standard 37
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"Provisions, Contingent Liabilities and Contingent Assets." If it is estimated that the annual emissions are very likely to exceed the threshold for levy, carbon fee-related liabilities should be estimated in the interim financial reports based on the proportion of emissions that have occurred relative to the estimated annual emissions.
dd. Employee benefits
1) Short-term employee benefits
Short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid and shall be recognized as expense in the period when the employees render service.
2) Pension
a) Defined contribution plans
For defined contribution plans, the contributions are recognized as pension expense when they are due on an accrual basis. Prepaid contributions are recognized as an asset to the extent of a cash refund or a reduction in the future payments.
b) Defined benefit plans
i. The net obligation under a defined benefit plan is calculated by discounting the amount of future benefits earned by employees for the services rendered in the current or the prior periods, and the amount recognized is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets. The net obligation under the defined benefit plan is calculated annually using the projected unit credit method by an actuary, and the discount rate is determined by referencing the market yield of high-quality corporate bonds that have the same currency and term as the balance sheet date and the defined benefit plan; in countries where there is no deep market for high-quality corporate bonds, the market yield of government bonds (as of the balance sheet date) is used.
ii. The remeasurement amount generated by the defined benefit plan is recognized in other comprehensive income in the current period and presented in retained earnings.
iii. Expenses related to past service costs are immediately recognized in profit or loss.
c) Remuneration of employees and directors
Remuneration of employees and directors are recognized as expenses and liabilities, provided that such recognition is required under legal or constructive obligations and those amounts can be reliably estimated. Subsequent adjustments are made based on accounting estimates if there are differences between the actual distribution amounts
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and the estimated amounts. If employee remuneration is paid in shares, the Group calculates the number of shares based on the closing price on the previous day of the resolution made by the board of directors.
ee. Income tax
1) The tax expense for the period comprises current and deferred income taxes. Tax is recognized in profit or loss, except to the extent that it relates to items recognized in other comprehensive income or items recognized directly in equity, in which cases the tax is recognized in other comprehensive income or equity.
2) The Group calculates the current income tax based on the tax rate enacted in laws or substantively enacted in laws at the balance sheet date in the country where the taxable income is generated and the operations occur. The management periodically evaluates positions taken in tax returns with respect to situations in accordance with applicable tax regulations. It establishes provisions where appropriate based on the amounts expected to be paid to the tax authorities. For the income tax levied on the unappropriated retained earnings in accordance with the Income Tax Act, it will be recognized as income tax for unappropriated retained earnings based on the actual distribution of earnings after the earnings distribution proposal is adopted at the shareholders' meeting in the year following the year in which said earnings are generated.
3) Deferred income tax is recognized, using the balance sheet liability method, for temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated balance sheet. Deferred income tax liabilities arising from the initial recognition of goodwill are not recognized. If the deferred income tax arises from transactions (excluding consolidation of enterprises) and does not affect accounting profit or taxable income (tax loss) at the time of the transaction, it is not recognized. With temporary differences caused by the investment in subsidiaries, if the Group can control the timing of the reversal of the temporary differences, and it is probable that temporary differences will not be reversed in the foreseeable future, the liabilities will not be recognized. The deferred income tax is based on legislation or substantial legislation in effect on the balance sheet date, and the applicable tax rate (and tax law) expected to be applied when the related deferred income tax assets are realized or the deferred income tax liabilities are settled.
4) Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are re-assessed.
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5) Current income tax assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. Deferred income tax assets and liabilities are offset on the balance sheet when the entity has the legally enforceable right to offset current tax assets against current tax liabilities and they are levied by the same taxation authority on either the same entity or different entities that intend to settle on a net basis, or realize the asset and settle the liability, simultaneously.
ff. Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or stock options are listed in equity as a deduction, net of tax, from the proceeds.
gg. Dividend allocation
Dividends are recognized in the Company’s financial statements in the period in which they are approved to be distributed as resolved by the Company’s shareholders' meeting. Cash dividends are recognized as liabilities. Stock dividends are recognized as stock dividends to be allocated and reclassified to ordinary shares on the record date of issue of new shares.
hh. Revenue recognition
Sales
1) The Group primarily manufactures and sells consumer electronics products such as optical discs. Revenue from sales is recognized when control of the products is transferred to the customers, and the point of transfer of control is when the product is delivered to the customers. The customers have discretion over the distribution channels and pricing of the products, and the Group has no remaining performance obligations that could affect customer acceptance of the products. When goods are shipped to a designated location, the risk of obsolescence and lost has been transferred to the customer, and the customer is required to accept the goods in accordance with the sales contract, or when there is objective evidence that all acceptance criteria have been met, the goods are delivered.
2) The sales of the goods are recognized at the contract price, and the amount of sales revenue recognized is limited to the part where it is highly likely that there will not be a major reversal in the future. The payment terms for sales are usually 30 to 120 days after the date of shipment. Because the time interval between the transfer of the promised goods or services to the customer and the customer’s payment did not exceed one year, the Group did not adjust the transaction price to reflect the time value of money.
3) Account receivable is recognized when goods are delivered to customers because at which time the Group's right to the consideration for contracts from customers is unconditional, except for the passage of time.
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4) The sales policies of some of the Group's subsidiaries allow customers to return goods. Therefore, the Group recognizes products that are expected to be returned as the refund liabilities and the right to recover goods. The estimation of sales returns is based on historical experience and the expected value method to estimate such returns at the time of sale. The number of returned goods has been stable over the years, so it is highly probable that the accumulated revenue recognized, based on the assessment, will not undergo a major reversal. Subsequently, the validity of the assumptions is re-evaluated at each balance sheet date, and the estimated refund amount is updated.
ii. Government grants
Government grants are recognized at their fair value only when there is reasonable assurance that the Company will comply with any conditions attached to the grants and the grants will be received. Government grants to compensate the Group’s expense are recognized as profit or loss on a systematic basis in the period in which the expense occurs.
jj. Operating segments
The Group’s information on operating segments is reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker is responsible for allocating resources to the operating segments and assessing their performance, which has been identified as the board of directors that makes decisions about the Group’s major operating decisions.
- Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty
During the preparation of the consolidated financial statements, the management has exercised its judgments to adopt the accounting policies to be used, and made accounting estimates and assumptions based on reasonable expectations of future events with reference to the circumstances at the balance sheet date. If there is any difference between any critical accounting estimates and assumption made and actual results, assessment and adjustment will be conducted continuously by taking into account the historical experience and other factors. Such assumptions and estimates have a risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year. Please refer to the description of the uncertainties of critical accounting judgments, assumptions, and estimation uncertainty below:
a. Critical judgments for applying the Group's accounting policies
None.
b. Critical accounting estimates and assumptions
Inventory valuation
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1) As inventories are stated at the lower of cost and net realizable value, the Group must determine the net realizable value of inventories at balance sheet date based on judgments and estimates. With the rapid advancement of technology, the Group evaluates the amounts of normal inventory consumption, obsolescence, or inventories without market selling value at the balance sheet date, and writes down the cost of inventories to the net realizable value. This inventory valuation is primarily influenced by fluctuations in raw material and product market prices, which may result in significant changes.
2) As of December 31, 2025, the carrying amount of the Group's inventory valuation was NT$2,694,289.
6. Description of Significant Accounting Titles
a. Cash and cash equivalents
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Cash on hand and petty cash | $ 1,022 | $ 1,417 |
| Checks and demand deposits | 2,766,465 | 2,454,545 |
| Time deposit | 110,081 | 181,411 |
| $ 2,877,568 | $ 2,637,373 |
1) The Group deals with financial institutions with high credit ratings. The Group also deals with various financial institutions at the same time to diversify credit risks. Therefore, the expected risk of default is rather low.
2) The Group has classified cash and cash equivalents for borrowings and customs deposits into financial assets measured at amortized cost - current and non-current. Please refer to Note 8 for details.
b. Financial assets at fair value through profit or loss (FVTPL)
| Items | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Current items: | ||
| Financial assets mandatorily at fair value through profit or loss | ||
| Listed stocks | $ 9,621,248 | $ 8,696,948 |
| Stocks listed in emerging stock markets | 55,727 | 2,342 |
| Beneficiary certificates | 201,156 | 210,349 |
| Commercial bonds | 61,448 | 64,067 |
| Derivative instruments | - | 279 |
| 9,939,579 | 8,973,985 | |
| Adjustment to valuation | (170,522) | (334,084) |
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| Items | December 31, 2025 | December 31, 2024 |
|---|---|---|
| $ 9,769,057 | $ 8,639,901 | |
| Non-current items: | ||
| Financial assets mandatorily at fair value through profit or loss | ||
| Listed stocks | $ 4,831,414 | $ 3,510,143 |
| Non-listed stocks (OTC), non-emerging stocks | 30,000 | 80,000 |
| Beneficiary certificates | 14,560 | 14,560 |
| Principal-protected film investment agreements | 14,815 | 21,960 |
| Film investment contracts | 10,962 | 8,060 |
| Privately offered funds | 106,601 | 61,157 |
| 5,008,352 | 3,695,880 | |
| Adjustment to valuation | ( 41,736) | 222,594 |
| $ 4,966,616 | $ 3,918,474 |
1) The details of financial assets at FVTPL recognized in profit or loss are as follows:
| 2025 | 2024 | |
|---|---|---|
| Financial assets mandatorily at fair value through profit or loss | ||
| Equity instruments | ||
| Gain (loss) from valuation and disposal | $ 503,803 | ( 73,371) |
| Dividend income | 503,325 | 365,027 |
| Debt instruments | 4,021 | ( 871) |
| Beneficiary certificates | ||
| (Loss) Gain from valuation and disposal | 516 | 2,291 |
| Dividend income | 8,822 | 6,945 |
| Derivative instruments | 8,328 | 5,802 |
| $ 1,028,815 | $ 305,823 |
2) The Group's transactions of derivative financial assets and contract information with hedging accounting applied are described below:
December 31, 2025: None.
| December 31, 2024 | |
|---|---|
| Derivative financial assets | Contract amount (notional principal) Contract period |
| Current items: | |
| Forward exchange agreements |
Buy JPY/sell USD
US$1,000 thousand
2024.12.27~2025.01.24
Forward exchange agreements
The forward foreign exchange transactions conducted by the Group are forward transactions of pre-purchase and pre-sale of foreign currencies, which aim to hedge the exchange rate risk of import and export prices, but no hedging accounting is applied.
3) For the situation in which the Group has pledged financial assets at FVTPL as collateral, please refer to Note 8 for details.
4) Please refer to Note 12 (2) for details on the credit risk of relevant debt instruments.
c. Financial assets at FVTOCI
| Items | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Non-current items: | ||
| Equity instruments | ||
| Listed stocks | $ 173,958 | $ 192,606 |
| Non-listed stocks (OTC), non-emerging stocks | 436,918 | 448,004 |
| 610,876 | 640,610 | |
| Adjustment to valuation | 111,300 | ( 48,714) |
| $ 722,176 | $ 591,896 |
1) The Group has elected to classify equity instrument investments that are strategic investments as financial assets at FVTOCI. The fair values of these investments as of December 31, 2025 and 2024 were NT$722,176 and NT$591,896, respectively.
2) The breakdown of financial assets at FVTOCI recognized in comprehensive income is as follows:
| 2025 | 2024 | |
|---|---|---|
| Equity instruments at FVTOCI | ||
| Changes in fair value recognized in other comprehensive income | $ 157,940 | ($ 82,936) |
| Accumulated losses reclassified to retained earnings due to derecognition | ($ 1,188) | ($ 1,502) |
| Dividend income recognized in profit and loss that remains being held at the end of current period | $ 22,548 | $ 22,987 |
| Items derecognized during the current period | 750 | - |
$ 23,298 $ 22,987
3) The Group did not pledge financial assets at FVOCI as collateral.
d. Financial assets at amortized cost
| Items | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Current items: | ||
| Time deposit | $ 346,563 | $ 268,528 |
| Restricted demand deposit | - | 4,600 |
| Restricted time deposit | 25,306 | 3,263 |
| $ 371,869 | $ 276,391 | |
| Non-current items: | ||
| Commercial bonds | $ 9,010 | $ 8,981 |
| Restricted demand deposit | 8,080 | 1,600 |
| Restricted time deposit | 1,861 | 4,233 |
| $ 18,951 | $ 14,814 |
1) Bonds and bank time deposits as well as restricted demand and time deposits with the original maturity date of more than 3 months.
2) The breakdown of financial assets measured at amortized cost recognized in profit or loss is as follows:
| 2025 | 2024 | |
|---|---|---|
| Interest revenue | $ 5,509 | $ 5,203 |
3) As of December 31, 2025 and 2024, regardless of the collateral held and other credit enhancements, the maximum amount of the exposure to the credit risk arising from the Group’s financial assets at amortized cost (including current and non-current) is the carrying amount.
4) For the situation in which the Group has pledged financial assets at amortized cost as collateral, please refer to Note 8 for details.
5) For information on the credit risk of financial assets measured at the cost after amortization, please refer to Note 12 (2).
e. Notes and accounts receivable
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Notes receivable | $ 2,507 | $ 3,091 |
| Less: Allowance for loss | - | (11) |
| $ 2,507 | $ 3,080 | |
| Accounts receivable | $ 1,403,300 | $ 1,402,039 |
| Less: Allowance for loss | (135,601) | (101,222) |
$ 1,267,699 $ 1,300,817
1) The aging analysis of accounts receivable and notes is as follows:
| December 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Accounts receivable | Notes receivable | Accounts receivable | Notes receivable | |
| Not past due | $ 1,190,883 | $ 2,507 | $ 1,165,909 | $ 3,091 |
| Overdue for 1–30 days | 91,621 | - | 76,574 | - |
| Overdue for 31–60 days | 19,191 | - | 40,473 | - |
| Overdue for 61–90 days | 23,171 | - | 4,890 | - |
| Overdue for 91–180 days | 35,925 | - | 54,158 | - |
| Overdue for more than 181 days | 42,509 | - | 60,035 | - |
| $ 1,403,300 | $ 2,507 | $ 1,402,039 | $ 3,091 |
The aging analysis above is based on the number of days overdue.
2) The balance of notes receivable and accounts receivable as of December 31, 2025 and 2024, were all generated by customer contracts, and the balance of notes receivable and accounts receivable and allowance losses as of January 1, 2024, were NT$1,430,419 and NT$75,466, respectively.
3) As of December 31, 2025 and 2024, regardless of the collateral held and other credit enhancements, the maximum amount of the exposure to the credit risk arising from the Group’s notes and accounts receivable (including related parties) is the carrying amount.
4) The Group did not pledge notes and accounts receivable as collateral.
5) Please refer to Note 12 (2) for details of the information on the credit risk of accounts and notes receivable.
f. Inventories
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Raw materials | $ 307,519 | $ 364,569 |
| Work-in-progress | 9,137 | 10,093 |
| Finished goods | 1,757,825 | 1,880,861 |
| Merchandise inventory | 540,498 | 501,305 |
| Inventory in transit | 79,310 | 64,757 |
| $ 2,694,289 | $ 2,821,585 |
The Group’s inventory cost recognized as an expense for the current period:
| 2025 | 2024 | |
|---|---|---|
| Cost of inventories sold | $ 5,390,282 | $ 5,645,208 |
| Unamortized fixed production overheads | 27,394 | 51,325 |
| Inventory impairment loss | 34,725 | 88,406 |
| Warranty cost | 8,592 | 13,462 |
| Others | ( 953) | ( 491) |
| $ 5,460,040 | $ 5,797,910 |
g. Investments accounted for using the equity method
1) The details of investments accounted for using the equity method are as follows:
| 2025 | 2024 | |
|---|---|---|
| January 1 | $ 177,488 | $ 221,576 |
| Share of profit (loss) on investments accounted for using the equity method | 65,788 | ( 41,086) |
| Credit balance of investments accounted for using the equity method reclassified to "less in receivables" decrease | ( 349) | ( 3,221) |
| Changes in other equity (see Note 6 (24)) | ( 690) | 219 |
| December 31 | $ 242,237 | $ 177,488 |
| Name of associates | December 31, 2025 | December 31, 2024 |
| --- | --- | --- |
| Vie Show Cinemas Co., Ltd. (Vie Show Cinemas) | $ 241,060 | $ 175,543 |
| Sun Biotech Limited (Sun Biotech) | ( 4,360) | ( 4,709) |
| Others | 1,177 | 1,945 |
| Add: Credit balance of investments accounted for using the equity method reclassified to "less in receivables" | 4,360 | 4,709 |
| $ 242,237 | $ 177,488 |
2) The aggregate information on the operating results of the associates that are not individually material of Group is as follows:
| 2025 | 2024 | |
|---|---|---|
| Net profit (loss) | $ 213,518 | ($ 141,497) |
| Other comprehensive income (after tax) | ( 1,766) | 1,359 |
| Total comprehensive income for the year | $ 211,752 | ($ 140,138) |
3) The Investments accounted for using the equity method as of December 31, 2025 and 2024 were evaluated based on each investee's financial statements audited by CPAs.
h. Property, plant and equipment
| 2025 | ||||||
|---|---|---|---|---|---|---|
| Land | Buildings and structures | Machinery and equipment | Others | Total | ||
| January 1 | ||||||
| Cost | $ 1,888,182 | $ 2,067,730 | $ 14,885,728 | $ 841,422 | $ 19,683,062 | |
| Accumulated depreciation and impairment | - | ( 1,092,841) | ( 14,739,670) | ( 763,005) | ( 16,595,516) | |
| $ 1,888,182 | $ 974,889 | $ 146,058 | $ 78,417 | $ 3,087,546 | ||
| January 1 | $ 1,888,182 | $ 974,889 | $ 146,058 | $ 78,417 | $ 3,087,546 | |
| Additions | - | 19,984 | 87,876 | 28,180 | 136,040 | |
| Disposal | - | - | ( 2,469) | ( 1,069) | ( 3,538) | |
| Reclassification (Note) | - | ( 68,471) | - | - | ( 68,471) | |
| Depreciation expenses | - | ( 43,548) | ( 99,871) | ( 30,757) | ( 174,176) | |
| Impairment loss | - | ( 30,382) | ( 74,037) | ( 2,056) | ( 106,475) | |
| Net exchange difference | - | ( 2,438) | 36 | 476 | ( 1,926) | |
| December 31 | $ 1,888,182 | $ 850,034 | $ 57,593 | $ 73,191 | $ 2,869,000 | |
| December 31 | ||||||
| Cost | $ 1,888,182 | $ 1,928,983 | $ 8,212,333 | $ 767,275 | $ 12,796,773 | |
| Accumulated depreciation and impairment | - | ( 1,078,949) | ( 8,154,740) | ( 694,084) | ( 9,927,773) | |
| $ 1,888,182 | $ 850,034 | $ 57,593 | $ 73,191 | $ 2,869,000 |
| 2024 | ||||||
|---|---|---|---|---|---|---|
| Land | Buildings and structures | Machinery and equipment | Others | Total | ||
| January 1 | ||||||
| Cost | $2,141,251 | $2,766,928 | $14,727,814 | $826,963 | $20,462,956 | |
| Accumulated depreciation | ||||||
| and impairment | - | (1,419,393) | (14,388,468) | (738,014) | (16,545,875) | |
| $2,141,251 | $1,347,535 | $339,346 | $88,949 | $3,917,081 | ||
| January 1 | $2,141,251 | $1,347,535 | $339,346 | $88,949 | $3,917,081 | |
| Additions | - | 7,981 | 79,202 | 21,209 | 108,392 | |
| Disposal | (1,144) | (263) | (365) | (616) | (2,388) | |
| Reclassification (Note 1) | - | (320,635) | - | - | (320,635) | |
| Reclassified to non-current | ||||||
| assets held for sale | ||||||
| (Note 2) | (251,904) | - | - | - | (251,904) | |
| Depreciation expenses | - | (52,919) | (268,485) | (32,539) | (353,943) | |
| Impairment loss | - | (17,496) | (3,884) | (60) | (21,440) | |
| Net exchange difference | (21) | 10,686 | 244 | 1,474 | 12,383 | |
| December 31 | $1,888,182 | $974,889 | $146,058 | $78,417 | $3,087,546 | |
| December 31 | ||||||
| Cost | $1,888,182 | $2,067,730 | $14,885,728 | $841,422 | $19,683,062 | |
| Accumulated depreciation | ||||||
| and impairment | - | (1,092,841) | (14,739,670) | (763,005) | (16,595,516) | |
| $1,888,182 | $974,889 | $146,058 | $78,417 | $3,087,546 |
1) The Group has no capitalized borrowing costs associated with property, plant and equipment for the years 2025 and 2024.
2) For the impairment of property, plant and equipment, please refer to Note 6 (12) for details.
3) For information about the Group's pledging of property, plant and equipment as collateral, please refer to Note 8 for details.
i. Lease transaction - the lessee
1) The assets leased by the Group include land, buildings, and transportation equipment. The lease contract term is usually from 1 to 9 years. The lease contracts are negotiated separately and contain various terms and conditions.
2) The lease term of part of the land and buildings leased by the Group does not exceed 12 months, and the low-value assets leased are mostly multi-function printers, so they are not included in the right-of-use assets.
3) The carrying amount of right-of-use assets and depreciation expenses recognized are shown as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Carrying amount | Carrying amount | |
| Land | $ 13,001 | $ 14,753 |
| Property | 125,675 | 139,747 |
| Transportation equipment | ||
| (company cars) | 9,779 | 6,766 |
| $ 148,455 | $ 161,266 | |
| 2025 | 2024 | |
| --- | --- | --- |
| Depreciation expenses | Depreciation expenses | |
| Land | $ 1,778 | $ 20,343 |
| Property | 54,217 | 40,742 |
| Transportation equipment | ||
| (company cars) | 5,527 | 4,947 |
| $ 61,522 | $ 66,032 |
4) The additions to the Group's right-of-use assets in 2025 and 2024 were NT$48,489 and NT$32,740, respectively.
~46~
5) The profit and loss items related to lease contracts are shown as follows:
| 2025 | 2024 | |
|---|---|---|
| Items that affect profit or loss | ||
| Interest expenses on lease liabilities | $ 5,540 | $ 6,706 |
| Short-term lease expenses | $ 20,664 | $ 18,758 |
| Expense on leases with low-value assets | $ 1,288 | $ 1,285 |
| Expense on variable lease payments | $ 3,340 | $ 4,296 |
| Loss (Gain) from sublease of right-of-use assets (Note) | ($ 774) | $ 956 |
| Gains on lease modification | $ - | ($ 442) |
Note The figure includes gains and losses from the sublease of right-of-use assets as well as interest income. Please refer to Note 6 (10) for details.
6) The Group's total cash outflows of leases in 2025 and 2024 were NT$100,672 and NT$105,819, respectively.
7) The impact of variable lease payments on lease liabilities
a) In the subsidiary Deltamac's lease contract, the subject matter to which the variable lease payment terms are applied is connected with the sales amount generated by stores. For the objects leased by stores, about 50% is based on variable payment terms and mainly related to the sales amount. Changes in variable lease payments related to the sales amount are recognized as expenses during the period in which these payment terms are satisfied.
b) When the sales of all stores in the subsidiary Deltamac increase by 10%, the lease contract with variable lease payment terms will increase the total lease payments by approximately 1%.
j. Lease transactions - lessor
1) The underlying assets leased out by the Group include buildings and right-of-use assets. The lease term contracted is usually for a period of 7 to 9 years. The lease contracts are negotiated individually and contain various terms and conditions.
2) In 2025 and 2024, the Group leased the right-of-use assets of houses through financing leases; in accordance with the terms of the lease agreement, the major portion of the economic useful life of the leased assets was covered. The profit and loss items related to lease contracts are shown as follows:
| 2025 | 2024 | |
|---|---|---|
| Loss from subleasing right-of-use assets (listed as other income and loss) | $ - | ($ 1,797) |
| Finance income from net investment in a lease (listed as interest revenue) | 774 | 841 |
3) The analysis of the maturity date of the undiscounted lease benefits of the Group leased out under finance lease is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Not exceeding 1 year | $ 9,218 | $ 8,868 |
| More than 1 year, but less than 5 years | 37,152 | 37,082 |
| More than 5 years | 1,548 | 10,836 |
| $ 47,918 | $ 56,786 |
4) The reconciliation information of undiscounted lease benefits and net investment in a lease leased out by the Group under finance leases (listed in other current and noncurrent assets) is as follows:
| December 31, 2025 | December 31, 2024 | |||
|---|---|---|---|---|
| Current | Non-current | Current | Non-current | |
| Unpresented lease payments | $ 9,218 | $ 38,700 | $ 8,868 | $ 47,918 |
| No financing income earned | ( 645) | ( 1,204) | ( 774) | ( 1,849) |
| Net Lease Investment | $ 8,573 | $ 37,496 | $ 8,094 | $ 46,069 |
In 2024, the Group sees an increase of NT$16,389 in the net amount of financing leases, primarily driven by increased demand for the underlying assets from lessees. No such occurrence in 2025.
5) The Group has no overdue rental receivables. Following an assessment, the potential credit risk loss is deemed to be immaterial.
6) In 2025 and 2024, the Group recognized rental income of NT$58,687 and NT$52,940, respectively, based on operating lease contracts, with no corresponding lease payments.
7) The analysis of the maturity date of the lease payments to be paid to the Group under operating lease is as follows:
~49~
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Not exceeding 1 year | $ 84,905 | $ 44,676 |
| More than 1 year, but less than 5 years | 249,427 | 118,961 |
| More than 5 years | 196,628 | 25,325 |
| $ 530,960 | $ 188,962 |
k. Investment property
| 2025 | |||
|---|---|---|---|
| Land | Buildings and structures | Total | |
| January 1 | |||
| Cost | $ 77,057 | $ 1,626,382 | $ 1,703,439 |
| Accumulated depreciation | - | ( 896,052) | ( 896,052) |
| $ 77,057 | $ 730,330 | $ 807,387 | |
| January 1 | $ 77,057 | $ 730,330 | $ 807,387 |
| Reclassification (Note 1) | - | 68,471 | 68,471 |
| Additions | - | 9,380 | 9,380 |
| Depreciation expenses | - | ( 28,843) | ( 28,843) |
| Net exchange difference | - | ( 158) | ( 158) |
| December 31 | $ 77,057 | $ 779,180 | $ 856,237 |
| December 31 | |||
| Cost | $ 77,057 | $ 1,779,809 | $ 1,856,866 |
| Accumulated depreciation | - | ( 1,000,629) | ( 1,000,629) |
| $ 77,057 | $ 779,180 | $ 856,237 | |
| 2024 | |||
| --- | --- | --- | --- |
| Land | Buildings and structures | Total | |
| January 1 | |||
| Cost | $ 77,057 | $ 1,215,323 | $ 1,292,380 |
| Accumulated depreciation | - | ( 678,433) | ( 678,433) |
| $ 77,057 | $ 536,890 | $ 613,947 | |
| January 1 | $ 77,057 | $ 536,890 | $ 613,947 |
| Reclassification (Note 1) | - | 320,635 | 320,635 |
| Reclassified to non-current assets held for sale (Note 2) | - | ( 102,809) | ( 102,809) |
| Additions | - | 316 | 316 |
| Depreciation expenses | - | ( 30,606) | ( 30,606) |
| 2024 | |||
|---|---|---|---|
| Land | Buildings and structures | Total | |
| Net exchange difference | - | 5,904 | 5,904 |
| December 31 | $ 77,057 | $ 730,330 | $ 807,387 |
| December 31 | |||
| Cost | $ 77,057 | $ 1,626,382 | $ 1,703,439 |
| Accumulated depreciation | - | ( 896,052) | ( 896,052) |
| $ 77,057 | $ 730,330 | $ 807,387 |
Note 1: It is mainly for the reclassification from property, plant and equipment.
Note 2: In November 2024, the Board of Directors of the Group resolved to sell the land and buildings located in Zhongli District, Taoyuan City and to reclassify the related assets as non-current assets held for sale.
1) Rental revenue and direct operating expenses of investment property:
| 2025 | 2024 | |
|---|---|---|
| Rental revenue of investment property | $ 56,123 | $ 50,732 |
| Direct operating expenses incurred by investment property generating rental revenue in the current period | $ 19,618 | $ 15,772 |
| Direct operating expenses incurred by investment property not generating rent revenue in current period | $ 18,827 | $ 24,823 |
2) The fair values of the investment properties held by the Group as of December 31, 2025 and 2024 were NT$2,969,732 and NT$2,990,822, respectively, based on the evaluation results using the nearby comparable transaction prices.
3) For information on the Group's pledging of investment property as collateral, please refer to Note 8 for details.
- Impairment of non-financial assets
1) In 2025 and 2024, the storage media department of the Group has decided to terminate the development of various ongoing projects. As a result, the exclusive assets associated with these projects cannot be freely disposed of in the open market. It is anticipated that the fair value, after deducting disposal costs, will be minimal. Consequently, impairment losses of NT$106,475 and NT$23,100 have been recognized, respectively. Furthermore, other departments have assessed that the future economic benefits of externally purchased
intangible assets in 2025 and 2024 did not meet expectations, resulting in the recognition of impairment losses of NT$(4,884)and NT$9,065, respectively. The details are as follows:
| 2025 | 2024 | |||
|---|---|---|---|---|
| Recognized in the current profit or loss | Recognized in other comprehensive income | Recognized in the current profit or loss | Recognized in other comprehensive income | |
| Impairment loss - intangible assets | ($ 4,884) | $ - | $ 9,065 | $ - |
| Impairment loss - buildings and structures | 30,382 | - | 17,496 | - |
| Impairment loss - machinery and equipment | 74,037 | - | 3,884 | - |
| Impairment loss - other equipment | - | - | 60 | - |
| Impairment loss - computer software | - | - | 1,009 | - |
| Impairment loss - other | 2,056 | - | 651 | - |
| $ 101,591 | $ - | $ 32,165 | $ - |
2) The above impairment (reversal gains) losses disclosed by segment are as follows:
| 2025 | 2024 | |||
|---|---|---|---|---|
| Recognized in the current profit or loss | Recognized in other comprehensive income | Recognized in the current profit or loss | Recognized in other comprehensive income | |
| Other segments | ($ 4,884) | $ - | $ 9,065 | $ - |
| Storage media segment | 106,475 | - | 23,100 | - |
| $ 101,591 | $ - | $ 32,165 | $ - |
3) The Group adopted the value in use and the net disposal value of existing assets as the recoverable amount in the impairment test on December 31, 2025 and 2024. The discount rate used to estimate the value in use is as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Storage media segment | 8.49% | 8.42% |
| Other optoelectronics segment | 10.04% | 8.38% |
| Other segments | 7.97% | 6.91% |
m. Non-current assets held for sale
In November 2024, the Board of Directors of the Group resolved to sell the land and buildings located in Zhongli District, Taoyuan City and to reclassify the related assets as held for sale. The transaction was completed with the transfer of title and related procedures in November 2025, and the full selling price was received in accordance with the contract.
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Property, plant and equipment and investment property | $ - | $ 354,713 |
n. Other non-current assets
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Prepayments for equipment | $ 8,236 | $ 15,573 |
| Refundable deposits | 13,165 | 16,338 |
| Prepayments for long-term investments | 62,890 | - |
| Net receivables from financing leases (Refer to Note 6 (10)) | 37,496 | 46,069 |
| Overdue receivables | 158,089 | 131,598 |
| Less: Allowance for loss | ( 158,089) | ( 131,598) |
| Net defined benefit assets | 20,195 | 10,677 |
| Other non-current assets - others | 612,666 | 613,655 |
| $ 754,648 | $ 702,312 |
o. Short-term borrowings
| Nature of borrowings | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Borrowings from financial Institutions | ||
| Secured borrowings | $ 440,000 | $ 181,000 |
| Credit borrowings | 990,000 | 910,000 |
| $ 1,430,000 | $ 1,091,000 | |
| Interest rate range | 2.17%~2.24% | 2.19%~2.33% |
1) The aforementioned short-term loan limits on December 31, 2025 and 2024 have been respectively issued promissory notes in the amounts of NT$2,312,890 and NT$2,799,495 as collateral.
2) Please refer to Note 8 for details of short-term borrowings and the guarantees.
p. Short-term notes payable
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Commercial paper payable | $ 249,581 | $ 233,632 |
| Interest rate range | 2.30%~2.32% | 2.24%~2.29% |
1) The aforementioned short-term notes payable are guaranteed and accepted by financial institutions such as banks and bills finance companies.
2) The aforementioned commercial paper payable on December 31, 2025 and 2024 has been issued respective promissory notes of NT$250,000 and NT$350,000 as collateral.
q. Financial liabilities at fair value through profit or loss
| Items | December 31, 2025 | December 31, 2024 |
|---|---|---|
| Current items: | ||
| Financial liabilities held for trading | ||
| Non-hedging derivative financial instruments - derivatives | $ 1,416 | $ 313 |
1) The net losses recognized for the financial liabilities held for trading by the Group in 2025 and 2024 were NT$52,391 and NT$18,280, respectively.
2) The Group's transactions of derivative financial liabilities and contract information with hedging accounting applied are described below:
| Derivative financial liabilities | December 31, 2025 | |
|---|---|---|
| Contract amount (notional principal) | Contract period | |
| Current items: | ||
| Forward exchange agreements | ||
| Buy USD/sell RMB | CNY 7,046 thousand | 2025.11.26~2026.01.30 |
| Buy JPY/sell USD | USD 1,000 thousand | 2025.11.26~2026.01.30 |
| n | USD 1,000 thousand | 2025.12.29~2026.03.31 |
| n | USD 1,000 thousand | 2025.12.29~2026.03.31 |
| Buy EUR/sell USD | USD 1,178 thousand | 2025.12.29~2026.01.30 |
| n | USD 1,182 thousand | 2025.12.29~2026.03.31 |
| n | USD 1,181 thousand | 2025.12.29~2026.03.31 |
| Buy USD/sell AUD | AUD 904 thousand | 2025.09.24~2026.06.24 |
| Foreign exchange swap agreement | USD 576 thousand | 2025.11.26~2026.01.30 |
| n | USD 1,700 thousand | 2025.11.26~2026.01.30 |
~54~
December 31, 2024
| Derivative financial liabilities | Contract amount (notional principal) | Contract period | |
|---|---|---|---|
| Current items: | |||
| Foreign exchange swap agreement | USD | 1,700 thousand | 2024.12.27~2025.02.27 |
| 〃 | USD | 1,600 thousand | 2024.12.27~2025.02.27 |
Forward exchange agreements
The forward foreign exchange transactions conducted by the Group are forward transactions of pre-purchase and pre-sale of foreign currencies, which aim to hedge the exchange rate risk of import and export prices, but no hedging accounting is applied.
Foreign exchange swap agreement
The foreign exchange transaction contracted by the Group is an exchange transaction between two currencies, which is to effectively manage the time difference between the needs for different currencies and reduce the exchange rate and interest rate risk, but no hedging accounting is applied.
r. Other payables
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Personnel expenses payable | $ 182,103 | $ 148,206 |
| Royalty fees payable | 25,587 | 61,154 |
| Payables for equipment | 23,247 | 19,527 |
| Service expense payable | 20,303 | 18,290 |
| Stock payment payable | 663,725 | 265,493 |
| Other expenses payable | 169,991 | 171,291 |
| $ 1,084,956 | $ 683,961 |
s. Long-term borrowings
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Borrowings from financial Institutions | ||
| Secured borrowings | $ 3,815,000 | $ 3,513,000 |
| Credit borrowings | 788,000 | 750,000 |
| Guaranteed commercial paper payable | 260,000 | 230,000 |
| Credit commercial paper payable | 270,000 | 300,000 |
| 5,133,000 | 4,793,000 | |
| Less: Long-term loans due within one year | ( 1,520,000) | ( 1,198,000) |
| $ 3,613,000 | $ 3,595,000 | |
| Interest rate range | 2.12%~2.41% | 2.08%~2.41% |
1) As of December 31, 2024, the Company had commercial paper borrowings of NT$530,000. In accordance with the Q&A issued by the Accounting Research and Development Foundation regarding "Classification of Liabilities Arising from Funds Obtained through Revolving Issuance of Commercial Paper by Enterprises," such borrowings should be classified as current liabilities. However, pursuant to the transitional provisions of the Q&A, the Company elected to classify them as non-current liabilities as of December 31, 2024, without applying the aforementioned classification requirements.
2) The Company signed a financing commitment contract with O-Bank Co., Ltd. in April 2024. The contract lasted for 24 months, and the total amount of borrowings was NT$300 million. The Company's main commitments are as follows:
The current ratio during the contract period shall be maintained at 100% or above; the debt ratio shall not be higher than 90% (inclusive); the net value of tangible assets shall not be lower than NT$12 billion; the interest coverage ratio (including depreciation and amortization expenses) shall not be less than 250%.
The outstanding balance of the Company's borrowings as of December 31, 2025 and December 31, 2024 were NT$270,000 and NT$300,000, respectively.
3) The Company signed a financing commitment contract with Taipei Fubon Bank in March 2023. The contract lasts for 36 months, and the total amount of borrowings is NT$1.5 billion. Thereafter, the Company renegotiated and signed a new financing commitment contract with Taipei Fubon Commercial Bank Co., Ltd. in April 2025. The contract lasts for 24 months, and the total amount of borrowings is NT$1.8 billion. The Company's main commitments are as follows:
During the contract period, the following financial ratios should be maintained and the consolidated financial statements should be reviewed quarterly: the current ratio should be maintained at 100% or above (inclusive); the debt ratio should not exceed 90% (inclusive); the tangible net worth should not be less than NT$12 billion; the sum of cash, financial assets measured at fair value through profit or loss (current), and financial assets measured at amortized cost (current) minus financial liabilities should not be less than NT$2 billion (restricted financial assets or current assets should be deducted from the aforementioned items).
The outstanding balance of the Company's borrowings as of December 31, 2025 and December 31, 2024 were NT$1,650,000 and NT$1,340,000, respectively.
4) The remaining loans will be repaid in installments until the end of 2028.
5) Please refer to Note 8 for details of the guarantees for long-term borrowings.
~55~
t. Pension
1) a) The Company and domestic subsidiaries have a defined benefit pension plan in accordance with the Labor Standards Act, applicable to all formal employees who were employed prior to the enforcement of the Labor Pension Act on July 1, 2005 and to the formal employees who still chose the pension mechanism under the Labor Standards Act after the Labor Pension Act took effect. Under the defined benefit pension plan, two units are granted for each year of service for the first 15 years and one unit for each additional year thereafter, subject to a maximum of 45 units. Pension benefits are based on the number of units granted and the average monthly salaries and wages of the last 6 months prior to retirement. The Group sets aside 2% of the total salary amount each month as a retirement fund, which is stored in a special account in the name of the Labor Retirement Reserve Supervisory Committee at the Bank of Taiwan. Before the end of each year, the Group shall assess the balance in the designated account. If the total balance of the contribution is less than the amount required for the payment of pensions to all the employees who are eligible to retire in the following year, calculated according to the method above, the Company will make up for the difference in a lump sum before the end of March in the following year.
b) The amounts recognized in the balance sheet are as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Present value of defined benefit obligations | $ 145,081 | $ 154,011 |
| Fair value of plan assets | (165,276) | (164,463) |
| Net defined benefit (assets) liabilities | ($ 20,195) | ($ 10,452) |
| Net defined benefit liabilities (listed in other non-current liabilities) | $ - | $ 225 |
| Net defined benefit assets (listed in other non-current assets) | $ 20,195 | $ 10,677 |
c) The changes in net defined benefit liabilities are as follows:
| 2025 | |||
|---|---|---|---|
| Present value of defined benefit obligations | Fair value of plan assets | Net defined benefit (assets) liabilities | |
| January 1 | $ 154,011 | ($ 164,463) | ($ 10,452) |
| Service cost for the current period | 201 | - | 201 |
| 2025 | |||
|---|---|---|---|
| Present value of defined benefit obligations | Fair value of plan assets | Net defined benefit (assets) liabilities | |
| Interest expense (revenue) | 2,321 | (2,485) | (164) |
| 156,533 | (166,948) | (10,415) | |
| Re-measurements: | |||
| Return on plan assets (not including interest revenue or expenses) | - | (10,414) | (10,414) |
| The effect of changes in financial assumptions | 2,181 | (302) | 1,879 |
| Experience adjustments | (1,464) | - | (1,464) |
| 717 | (10,716) | (9,999) | |
| Pension contributed | - | (4,254) | (4,254) |
| Pension paid | (12,169) | 5,684 | (6,485) |
| Exchange difference | - | - | - |
| Settlement account | - | 10,958 | 10,958 |
| December 31 | $145,081 | ($165,276) | ($20,195) |
| 2024 | |||
| Present value of defined benefit obligations | Fair value of plan assets | Net defined benefit liabilities | |
| January 1 | $190,796 | ($151,648) | $39,148 |
| Service cost for the current period | 242 | - | 242 |
| Interest expense (revenue) | 2,299 | (1,833) | 466 |
| 193,337 | (153,481) | 39,856 | |
| Re-measurements: |
| 2024 | |||
|---|---|---|---|
| Present value of defined benefit obligations | Fair value of plan assets | Net defined benefit liabilities | |
| Return on plan assets (not including interest revenue or expenses) | - | (13,633) | (13,633) |
| The effect of changes in financial assumptions | (3,437) | (418) | (3,855) |
| Experience adjustments | (26,205) | - | (26,205) |
| (29,642) | (14,051) | (43,693) | |
| Pension contributed | - | (6,615) | (6,615) |
| Pension paid | (9,684) | 9,684 | - |
| December 31 | $154,011 | ($164,463) | ($10,452) |
d) The Bank of Taiwan was commissioned to manage the assets of the Company's and domestic subsidiaries' defined benefit plan fund in accordance with the scope of the percentages and amounts in the annual investment and utilization plan of the fund and the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund (Article 6: The scope of utilization for the fund includes deposit in domestic or foreign financial institutions, investment in domestic or foreign listed, over-the-counter, or privately placed equity securities, investment in domestic or foreign real estate securitization products, etc.). The status of the utilization is supervised by the Labor Pension Funds Supervisory Committee. With regard to utilization of the fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. In case any deficiency in the earnings arises, Treasury Funds can be used to cover the deficits after the approval of the competent authority. The Company has no right to participate in managing and operating that fund and hence the Company is unable to disclose the classification of plan assets fair value in accordance with paragraph 142 of IAS 19. The fair value of the total assets of the fund as of December 31, 2025 and December 31, 2024 is detailed in the government's annual reports on the utilization of the labor retirement fund.
e) The actuarial assumptions related to pension are summarized as follows:
| 2025 | 2024 | |
|---|---|---|
| Discount rate | 1.3-1.4% | 1.5-1.6% |
| Rate of future salary increase | 2.0-2.5% | 1.5-2.5% |
The assumption for future mortality rates is based on the estimation from the 6th experience life table of the life insurance industry in Taiwan.
The present value of the defined benefit obligation affected by the changes in the main actuarial assumptions adopted is as follows:
| Discount rate | Rate of future salary increase | |||
|---|---|---|---|---|
| Increase 0.25~1.00% | Decrease 0.25~1.00% | Increase 0.25~1.00% | Decrease 0.25~1.00% | |
| December 31, 2025 | ||||
| The effects on the present value of defined benefit obligations | ($ 1,847) | $ 1,888 | $ 1,512 | ($ 1,486) |
| December 31, 2024 | ||||
| The effects on the present value of defined benefit obligations | ($ 2,174) | $ 2,227 | $ 1,831 | ($ 1,798) |
With other assumptions unchanged, the sensitivity analysis above analyzes the effects of changes in a single assumption. In practice, many changes in assumptions may be linked together. The sensitivity analysis is consistent with the method used to calculate the net pension liabilities of the balance sheet.
The method and assumptions used for the preparation of the sensitivity analysis for the current period are the same as those used in the previous period.
f) The Group plans to allocate a retirement plan payment of NT$4,321 in 2026.
g) As of December 31, 2025, the weighted average duration of the retirement plan is 7 years. The maturity analysis of the pension payments is as follows:
| Not exceeding 1 year | $ | 17,757 |
|---|---|---|
| More than 1 year, but less than 5 years | 80,429 | |
| More than 5 years | 36,647 | |
| $ | 134,833 |
2) a) Since July 1, 2005, the Company and its domestic subsidiaries has established a defined contribution pension plan under the Labor Pension Act, applicable to all formal employees with R.O.C. nationality. For employees who choose the labor pension system stipulated under the Labor Pension Act, the Company and its domestic subsidiaries make monthly contributions to employees' individual pension accounts of the Bureau of Labor Insurance at 6% of their monthly salaries and wages. Based on the employee's individual pension accounts and the amount of accumulated income from the annual investment and utilization plan, the payment of employee pension is made on a monthly basis or in a lump sum. For 2025 and 2024, the pension costs recognized according to the above-mentioned pension method were NT$18,228 and NT$20,694, respectively.
b) VUS has established employee retirement regulations to determine the contribution obligations. The recognized pension expenses recognized for 2025 and 2024 were NT$2,117 and NT$2,499, respectively.
c) According to the Conditions of Employment—Severance Payment and Long Service Payment of the Government of the Hong Kong Special Administrative Region, employees who have been employed continuously for 24 months or more than 5 years can receive severance payment or long service payment based on a certain percentage of their most recent salary multiplied by their retrospective seniority. The pension expenses of VHK recognized in accordance with local laws and regulations for 2025 and 2024 were NT$2,672 and NT$2,746, respectively.
d) The pension expenses of VAU, VJP, and VGmbH recognized in accordance with local laws and regulations for 2025 and 2024 were NT$9,142 and NT$8,403, respectively.
e) Fortune (Jiangsu) Multimedia makes monthly contributions according to a certain percentage of the total salaries of the local employees in accordance with the pension system stipulated by the government of the People's Republic of China. Beyond this contribution percentage, the company has no further obligations. The cost of pensions recognized for 2025 and 2024 were NT$1,286 and NT$1,275, respectively.
u. Share capital
1) As of December 31, 2025, the Company's registered capital was NT$45,000,000, divided into 4,500,000 thousand shares, and the paid-in capital was NT$10,893,483, with a par value of NT$10 per share. Share payments for the Company's issued shares have been collected in full. In both 2025 and 2024, the Company has 1,089,348 thousand shares of common stock outstanding.
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2) On March 12, 2026, the Board of Directors of the Company resolved to carry out a cash capital reduction of NT$1,089,348 by cancelling 108,934,833 ordinary shares, in order to enhance return on equity and optimize the capital structure. For every 1,000 shares held, 900 new shares will be issued in exchange (i.e., 100 shares per 1,000 shares will be cancelled), with NT$1 per share refunded. As of March 12, 2026, the registration of the changes has not yet been completed.
v. Capital surplus
According to the Company Act, capital surplus including the income derived from issuing shares at a premium and from endowments, in addition to being used to compensate deficit, where the Company has no accumulated losses, shall be used to issue new shares or cash in proportion to the shareholders' original shares. In addition, according to relevant provisions of the Securities and Exchange Act, when the capital is replenished from the aforementioned capital surplus, the total amount each year shall not exceed 10% of the paid-in capital. The Company shall not use the capital surplus to compensate the capital losses, unless the surplus reserve is insufficient to compensate such losses.
| 2025 | |||||
|---|---|---|---|---|---|
| Share premium | Treasury share transactions | Difference between the equity price of subsidiary actually acquired or disposed of and the book value | Others | Total | |
| January 1 | $ 1,698,443 | $ 5,014,346 | $ 70,016 | $ 1,926 | $ 6,784,731 |
| Difference between the equity price of subsidiary actually acquired or disposed of and the book value (Note) | - | - | 4,096 | - | 4,096 |
| Common stock used to compensate for losses | - | ( 29,804) | - | - | ( 29,804) |
| Distribution of Capital Surplus in Cash | ( 326,805) | - | - | - | ( 326,805) |
| December 31 | $ 1,371,638 | $ 4,984,542 | $ 74,112 | $ 1,926 | $ 6,432,218 |
| 2024 | |||||
| --- | --- | --- | --- | --- | --- |
| Share premium | Treasury share transactions | Difference between the equity price of subsidiary actually acquired or disposed of and the book value | Others | Total | |
| January 1 | $ 1,698,443 | $ 5,014,346 | $ 5,791 | $ 1,926 | $ 6,720,506 |
| Difference between the equity price of subsidiary actually acquired or disposed of and the book value (Note) | - | - | 64,225 | - | 64,225 |
| December 31 | $ 1,698,443 | $ 5,014,346 | $ 70,016 | $ 1,926 | $ 6,784,731 |
Note: In 2025 and 2024, the Group sold a portion of its subsidiary's equity to non-controlling interests in the public market, with a disposal price of NT$6,269 and NT$81,100, respectively. This transaction represents an equity transaction among the Group's owners. Therefore, this transaction increases non-controlling interests by NT$2,173 and NT$16,875, respectively, and the equity attributable to the parent company's owners (listed as capital surplus - difference between the actual acquisition or disposal price of subsidiary shares and their book value) increases by NT$4,096 and NT$64,225, respectively.
w. Retained earnings
1) According to the Company's Articles of Incorporation, if there are earnings in the annual final accounts, the Company shall pay taxes first and compensate the accumulated losses; appropriate 10% of the balance for legal reserve, but this does not apply when the legal reserve has reached the amount of the Company's total capital. Subsequently, the Company shall make an appropriation for or reverse the special reserve in accordance with the law. Then, if there are still earnings, together with the undistributed earnings accumulated from the beginning of the same period, the Board of Directors shall put forth an earnings distribution proposal for the resolution by the shareholders' meeting before distribution. The Company’s dividend policy is based on the consideration for capital expenditures and the Company’s long-term financial planning. The total dividend shall not less be than 10% of the current year’s distributable earnings. However, if the distributable earnings is less than 1% of the paid-in capital, dividend may not need to be distributed. When the dividend is distributed, cash dividend shall be no less than 10% of the total dividend.
2) The legal reserve shall not be used except for compensation for the Company's losses and issue of new shares or cash in proportion to the shareholders' original shares. However, in the case of issue of new shares or cash, it shall be limited to the portion of the legal reserve in excess of 25% of the paid-in capital.
3) In accordance with the regulations, the Company shall set aside special reserve from the debit balance on other equity items at the balance sheet date before distributing earnings. When debit balance on other equity items is reversed subsequently, the reversed amount may be included in the distributable earnings.
4) (a) On June 10, 2025, the Company's shareholder's meeting approved the proposal for the allocation of losses for the fiscal year 2024. Special reserve amounting to NT$102,468 has been reversed, along with legal reserve of NT$114,221 and NT$29,804 from capital surplus - treasury stock transactions to offset the losses.
b) On June 10, 2025, the Company's shareholder's meeting resolved to distribute cash amounting to NT$326,805 from the capital surplus - issuance premium of the fiscal year 2024 (NT$0.30 per share).
c) The Company passed the proposal for 2023 earnings distribution as resolved by the shareholders' meeting on June 14, 2024 as follows:
| 2023 | ||
|---|---|---|
| Amount | Earnings per share (NT$) | |
| Legal reserve appropriation | $ 66,486 | $ - |
| Reversal of special reserve | (153,322) | - |
| Cash dividends | 740,757 | 0.68 |
| $ 653,921 |
The 2024 deficit compensation, cash distribution from capital surplus, and the 2023 earnings distribution described above are consistent with the proposals made by the Board of Directors of the Company.
5) Please refer to the MOPS website of the Taiwan Stock Exchange for details on the aforementioned 2024 deficit compensation approved by the Board of Directors and resolved by the shareholders' meeting.
6) The Company's Board of Directors passed the proposal for 2025 earnings distribution on March 12, 2026 as follows:
| 2025 | ||
|---|---|---|
| Amount | Earnings per share (NT$) | |
| Legal reserve appropriation | $ 173,328 | $ - |
| Cash dividends | 217,870 | 0.20 |
| $ 391,198 |
As of March 12, 2026, the aforementioned 2025 earnings distribution proposal has not yet been resolved by the shareholders' meeting.
x. Other equity items
| 2025 | |||
|---|---|---|---|
| Foreign currency translation | Unrealized valuation gains and losses | Total | |
| January 1 | $ 134,056 | ($ 101,129) | $ 32,927 |
| Foreign currency translation difference: | |||
| — Group | 6,024 | - | 6,024 |
| — Associates | ( 690) | - | ( 690) |
| Adjustment to valuation | - | 152,212 | 152,212 |
| Reclassified from valuation adjustment to retained earnings | - | 1,188 | 1,188 |
| December 31 | $ 139,390 | $ 52,271 | $ 191,661 |
| 2024 | ||||
|---|---|---|---|---|
| Foreign currency translation | Unrealized valuation gains and losses | Total | ||
| January 1 | ($ 82,865) | ($ 19,603) | ($ 102,468) | |
| Foreign currency translation difference: | ||||
| — Group | 216,702 | - | 216,702 | |
| — Associates | 219 | - | 219 | |
| Adjustment to valuation | - | ( 83,028) | ( 83,028) | |
| Reclassified from valuation adjustment to retained earnings | - | 1,502 | 1,502 | |
| December 31 | $ 134,056 | ($ 101,129) | $ 32,927 |
y. Operating revenue
| 2025 | 2024 | |
|---|---|---|
| Revenue from customer contracts | $ 7,182,992 | $ 7,435,183 |
1) Breakdown of revenue from customer contracts
The Group's revenue comes from the provision of goods and services that are gradually transferred over time and transferred at a certain point in time. The revenue can be broken down into the following main product lines:
| 2025 | ||||
|---|---|---|---|---|
| Storage media | Other optoelectronic products | Others | Total | |
| Timing of revenue recognition | ||||
| At a certain point in time | ||||
| Recognized Revenue | $ 6,636,423 | $ 295,310 | $ 251,259 | $ 7,182,992 |
| 2024 | ||||
| Storage media | Other optoelectronic products | Others | Total | |
| Timing of revenue recognition | ||||
| At a certain point in time | ||||
| Recognized Revenue | $ 6,891,624 | $ 262,049 | $ 281,510 | $ 7,435,183 |
2) Contract liabilities
a) Contract liabilities related to revenue from customer contracts recognized by the Group are as follows:
| December 31, 2025 | December 31, 2024 | January 1, 2024 | |
|---|---|---|---|
| Contract liabilities: | |||
| Advance sales receipts | $ 58,594 | $ 63,489 | $ 63,012 |
| Others | - | - | 15,151 |
| $ 58,594 | $ 63,489 | $ 78,163 |
b) Contract liabilities at beginning of period recognized as revenue for the period
| 2025 | 2024 | |
|---|---|---|
| Opening balance of contract liabilities recognized as income for the period | ||
| Product sales and other contracts | $ 53,837 | $ 68,127 |
z. Interest revenue
| 2025 | 2024 | |
|---|---|---|
| Interests on bank deposits | $ 24,119 | $ 33,089 |
| Interest revenue from financial assets at amortized cost - interest revenue | 5,509 | 5,203 |
| Other (please refer to Note 6 (10)) | 774 | 841 |
| $ 30,402 | $ 39,133 |
aa. Other income
| 2025 | 2024 | |
|---|---|---|
| Rental income (please refer to Note 6 (10)) | $ 58,687 | $ 52,940 |
| Dividend income | 535,445 | 394,959 |
| Government grant income | - | 7 |
| Overdue liabilities transferred to income | - | 3,790 |
| Other income | 30,891 | 18,240 |
| $ 625,023 | $ 469,936 |
bb. Other gains and losses
| 2025 | 2024 | |
|---|---|---|
| Net gains (losses) on financial assets at FVTPL | $ 516,668 | ($ 66,149) |
| Net losses on financial liabilities at fair value through profit or loss (FVTPL) | ( 52,391) | ( 18,280) |
| Net foreign currency exchange gains (losses) | 32,572 | ( 48,895) |
| Gains on disposal of property, plant and equipment | 1,770 | 113 |
| Gains on disposal of non-current assets held for sale | 1,224,008 | - |
| Gains on disposal of investments | 750 | - |
| Depreciation expenses of investment property | ( 28,843) | ( 30,606) |
| Non-financial asset impairment losses (please refer to Note 6 (12)) | ( 101,591) | ( 32,165) |
| Loss on sublease of right-of-use assets (please refer to Note 6 (10)) | - | ( 1,797) |
| Gains on lease modification (please refer to Note 6 (9)) | - | 442 |
| Other expenditures | ( 32,680) | ( 5,059) |
| $ 1,560,263 | ($ 202,396) |
cc. Finance costs
| 2025 | 2024 | |
|---|---|---|
| Interest expenses | ||
| Bank borrowings | $ 161,415 | $ 114,285 |
| Interest expenses on lease liabilities | 5,540 | 6,706 |
| Borrowing facility management expense | 5,577 | 145 |
| $ 172,532 | $ 121,136 |
dd. Employee benefit, depreciation, and amortization expenses
In 2025 and 2024, the employee benefit, depreciation, and amortization expenses incurred by the Group are summarized as follows by function:
| Functional Category
Nature | 2025 | | |
| --- | --- | --- | --- |
| | Operating costs | Operating expenses | Total |
| Employee benefit expenses | | | |
| Salaries and wages | $ 331,292 | $ 540,038 | $ 871,330 |
| Labor and health insurance premiums | 36,208 | 67,914 | 104,122 |
| Pension expenses | 12,018 | 21,464 | 33,482 |
| Other employee benefit expenses | 19,022 | 12,365 | 31,387 |
| Depreciation expenses | 120,615 | 115,083 | 235,698 |
| Amortization expenses | 13,929 | 5,888 | 19,817 |
| Functional Category
Nature | 2024 | | |
| --- | --- | --- | --- |
| | Operating costs | Operating expenses | Total |
| Employee benefit expenses | | | |
| Salaries and wages | $ 334,704 | $ 544,963 | $ 879,667 |
| Labor and health insurance premiums | 37,375 | 71,506 | 108,881 |
| Pension expenses | 13,206 | 23,119 | 36,325 |
| Other employee benefit expenses | 18,644 | 16,600 | 35,244 |
| Depreciation expenses | 207,674 | 212,301 | 419,975 |
| Amortization expenses | 42,182 | 15,419 | 57,601 |
1) In accordance with the Company's Articles of Incorporation, if the Company has earnings, it shall set aside not less than 1% of the balance as remuneration for the employees, and of the aforesaid amount of employees' remuneration, it shall set aside not less than 30% as remuneration for the distribution of general employees and no greater than 1.5% as remuneration for the directors. But if the Company still has an accumulated deficiency, the amount to cover should be retained in advance.
2) The estimated amounts for employee and director remuneration in the fiscal year 2025 of the Company are $20,000 and $3,600, respectively. The aforementioned amounts are recorded under the salary expense account.
The profit situation for the year of 2025 is estimated to be 1.02% and 0.18%, respectively. The Board of Directors resolved that the actual amounts to be distributed shall be NT$20,000 and NT$3,600, respectively, to be distributed in cash.
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3) Due to the Company's accumulated losses in 2024, there is no need to estimate employee and director remuneration.
4) The information on employee compensation and the remuneration of directors approved by the Board of Directors of the Company is available on the MOPS.
ee. Income tax
1) Income tax expense
a) Components of income tax expense:
| 2025 | 2024 | |
|---|---|---|
| Current income tax: | ||
| Income tax incurred in current period | $ 183,922 | $ 61,409 |
| Income tax underestimates for prior years | 1,404 | - |
| Total current income tax | 185,326 | 61,409 |
| Deferred income tax: | ||
| Initial recognition and reversal of temporary differences | 110,848 | 7,877 |
| Income tax expense | $ 296,174 | $ 69,286 |
b) The amount of income tax related to other comprehensive income:
| 2025 | 2024 | |
|---|---|---|
| Remeasurement of defined benefit obligations | $ 1,182 | $ 8,614 |
2) Reconciliation between income tax expense and accounting profit
| 2025 | 2024 | |
|---|---|---|
| Income tax calculated at the statutory tax rate on net income (loss) before tax | $ 378,036 | ($ 112,958) |
| Items to be adjusted as required by tax regulations | 34,134 | 16,675 |
| Items exempt from taxation according to the tax law | (483,474) | (277,522) |
| Unrealized gains or losses on financial assets that are not taxable | 20,997 | 215,865 |
| Temporary differences not recognized in deferred income tax assets | 103,151 | 121,105 |
| Taxable loss not recognized in deferred income tax assets | 62,845 | 92,270 |
| Change in realizability evaluation of deferred income tax liabilities | 51,824 | (11,981) |
| 2025 | 2024 | |
|---|---|---|
| Income tax effects of alternative minimum tax | 56,481 | 30,059 |
| Income tax underestimates for prior years | 1,404 | - |
| Land value increment tax on the land sold | 66,197 | - |
| Separation tax amount | 790 | 189 |
| Effect of income tax of the applicable tax rate in the Group | 3,789 | (4,416) |
| Income tax expense | $ 296,174 | $ 69,286 |
3) The amount of deferred income tax assets or liabilities that arise from temporary differences and tax losses are set out below:
| 2025 | |||||
|---|---|---|---|---|---|
| January 1 | Recognized in profit or loss | Recognized in other comprehensive income | Exchange difference | December 31 | |
| Deferred in come tax assets: | |||||
| - Temporary differences | |||||
| Over-limit of allowance for loss | $ 33,112 | ($ 11,205) | $ - | $ - | $ 21,907 |
| Unrealized sales gains | 27,838 | ( 12,289) | - | - | 15,549 |
| CFC investment returns | 10,805 | ( 3,782) | - | - | 7,023 |
| Unrealized exchange loss | 7,661 | 1,231 | - | 307 | 9,199 |
| Inventory valuation loss | 35,788 | ( 9,031) | - | - | 26,757 |
| Compensation for unused annual leave | 4,531 | ( 1,459) | - | - | 3,072 |
| Remeasurement of defined benefits | 199 | - | ( 199) | - | - |
| Unrealized losses on investment | 3,447 | ( 3,447) | - | - | - |
| Non-financial asset impairment losses | 1,000 | ( 1,000) | - | - | - |
| Others | 29,091 | ( 9,585) | - | 1,893 | 21,399 |
| - Tax losses | 100,868 | ( 69,950) | - | 310 | 31,228 |
| Subtotal | $ 254,340 | ($ 120,517) | ($ 199) | $ 2,510 | $ 136,134 |
| Deferred income tax liabilities: | |||||
| - Temporary |
| 2025 | |||||
|---|---|---|---|---|---|
| January 1 | Recognized in profit or loss | Recognized in other comprehensive income | Exchange difference | December 31 | |
| differences | |||||
| Unrealized exchange gains | ($ 56) | ($ 64) | $ - | $ - | ($ 120) |
| Unrealized gains on investment | ( 6,211) | 774 | - | ( 32) | ( 5,469) |
| Provision for land value increment tax | ( 21,379) | 21,379 | - | - | - |
| Others | ( 34,149) | ( 12,420) | ( 983) | ( 759) | ( 48,311) |
| Subtotal | ($ 61,795) | $ 9,669 | ($ 983) | ($ 791) | ($ 53,900) |
| Total | $ 192,545 | ($ 110,848) | ($ 1,182) | $ 1,719 | $ 82,234 |
| 2024 | |||||
| January 1 | Recognized in profit or loss | Recognized in other comprehensive income | Exchange difference | December 31 | |
| Deferred in come tax assets: | |||||
| - Temporary differences | |||||
| Over-limit of allowance for loss | $ 28,836 | $ 4,276 | $ - | $ - | $ 33,112 |
| Unrealized sales gains | 28,170 | ( 332) | - | - | 27,838 |
| CFC investment returns | - | 10,805 | - | - | 10,805 |
| Unrealized exchange loss | 14,799 | ( 7,036) | - | ( 102) | 7,661 |
| Inventory valuation loss | 34,245 | 1,543 | - | - | 35,788 |
| Compensation for unused annual leave | 4,728 | ( 197) | - | - | 4,531 |
| Remeasurement of defined benefits | 8,505 | - | ( 8,306) | - | 199 |
| Unrealized losses on investment | 3,447 | - | - | - | 3,447 |
| Non-financial asset impairment losses | 1,000 | - | - | - | 1,000 |
| Others | 53,937 | ( 25,127) | - | 281 | 29,091 |
| - Tax losses | 111,418 | ( 10,118) | - | ( 432) | 100,868 |
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| 2024 | |||||
|---|---|---|---|---|---|
| January 1 | Recognized in profit or loss | Recognized in other comprehensive income | Exchange difference | December 31 | |
| Subtotal | $ 289,085 | ($ 26,186) | ($ 8,306) | ($ 253) | $ 254,340 |
| Deferred income tax liabilities: | |||||
| — Temporary differences | |||||
| Unrealized exchange gains | $ - | ($ 56) | $ - | $ - | ($ 56) |
| Unrealized gains on investment | ( 16,471) | 10,739 | - | ( 479) | ( 6,211) |
| Provision for land value increment tax | ( 21,379) | - | - | - | ( 21,379) |
| Others | ( 41,286) | 7,626 | ( 308) | ( 181) | ( 34,149) |
| Subtotal | ($ 79,136) | $ 18,309 | ($ 308) | ($ 660) | ($ 61,795) |
| Total | $ 209,949 | ($ 7,877) | ($ 8,614) | ($ 913) | $ 192,545 |
4) The validity period of the Group's unused tax loss carryforwards and the relevant amounts of unrecognized deferred income tax assets are as follows:
| December 31, 2025 | ||||
|---|---|---|---|---|
| Year of occurrence | Declared/ Approved amount | Amount of unused tax loss carryforwards | Amount of unrecognized deferred income tax assets | Final year the carryforwards are due |
| 2013 | Approved amount | $ 85,336 | $ 85,336 | 2033 |
| 2014 | " | 228,453 | 228,453 | 2024–2034 |
| 2015 | " | 633,104 | 633,104 | 2025–2035 |
| 2016 | " | 2,504,548 | 2,484,618 | 2026–2036 |
| 2017 | " | 608,337 | 570,632 | 2027–2037 |
| 2018 | " | 995,744 | 930,534 | 2028 |
| 2019 | " | 163,696 | 34,369 | 2024–2029 |
| 2020 | " | 99,600 | 99,600 | 2025–2030 |
| 2021 | " | 274,922 | 231,930 | 2026–2031 |
| 2022 | " | 791,773 | 715,409 | 2027–2032 |
| 2023 | Declared amount | 1,785,290 | 1,779,705 | 2033 |
| 2024 | " | 82,871 | 82,871 | 2034 |
| Fiscal year 2025 | Estimated amount | 49,339 | 49,339 | 2035 |
| $ 8,303,013 | $ 7,925,900 |
December 31, 2024
| Year of occurrence | Declared/ Approved amount | Amount of unused tax loss carryforwards | Amount of unrecognized deferred income tax assets | Final year the carryforwards are due |
|---|---|---|---|---|
| 2013 | Approved amount | $ 88,972 | $ 88,972 | 2033 |
| 2014 | " | 238,188 | 238,188 | 2024–2034 |
| 2015 | " | 1,970,910 | 1,906,052 | 2025–2035 |
| 2016 | " | 2,507,590 | 2,438,609 | 2026–2036 |
| 2017 | " | 608,354 | 541,450 | 2027–2037 |
| 2018 | " | 1,006,755 | 935,442 | 2028 |
| 2019 | " | 161,353 | 34,369 | 2024–2029 |
| 2020 | " | 205,955 | 205,955 | 2025–2030 |
| 2021 | " | 270,851 | 249,835 | 2026–2031 |
| 2022 | " | 789,839 | 752,579 | 2027–2032 |
| 2023 | Declared amount | 1,785,093 | 1,779,508 | 2033 |
| 2024 | Estimated amount | 82,871 | 82,871 | 2034 |
| $ 9,716,731 | $ 9,253,830 |
5) The tax losses incurred and amount of unrecognized deferred income tax assets of the Group's US subsidiaries since 2018 as of December 31, 2025 and 2024 were NT$630,576 and NT$657,449, respectively, and such losses may be deducted indefinitely from the taxable income for future years.
6) Deductible temporary differences that are not recognized in deferred income tax assets by the Group:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Deductible temporary differences | $ 10,373,785 | $ 9,871,650 |
7) The profit-seeking enterprise income tax returns filed by the Company and its domestic subsidiaries' have been approved by the tax collection authorities as follows:
| Status of approval | |
|---|---|
| The Company, Taiwan.com, Transtouch, CMC Entertainment, Taiwan Net, CMC Entertainment Hub, Deltamac, CHC | Approved up to 2023 |
ff. Earnings (losses) per share
| 2025 | |||
|---|---|---|---|
| Amount after tax | Weighted average number of outstanding shares (thousand shares) | Earnings per share (NT$) | |
| Basic earnings per share | |||
| Current net profit attributable to ordinary shareholders of the parent company | $ 1,726,201 | 1,089,348 | $ 1.58 |
| Diluted earnings per share | |||
| Current net profit attributable to ordinary shareholders of the parent company | 1,726,201 | 1,089,348 | |
| Potential effect of dilutive ordinary shares | |||
| Employee compensation | - | 1,852 | |
| Current net profit attributable to ordinary shareholders of the parent company plus potential effect of ordinary shares | $ 1,726,201 | 1,091,200 | $ 1.58 |
| 2024 | |||
| Amount after tax | Weighted average number of outstanding shares (thousand shares) | Loss per share (NT$) | |
| Basic and diluted loss per share | |||
| Current net loss attributable to ordinary shareholders of the parent company | ($ 290,103) | 1,089,348 | ($ 0.27) |
gg. Additional information on cash flows
Investing activities with only partial cash payments:
| 2025 | 2024 | |||
|---|---|---|---|---|
| Acquisition of property, plant and equipment | $ | 136,040 | $ | 108,392 |
| Less: Prepayments for equipment, beginning of period | ( | 15,573) | ( | 23,954) |
| Add: Prepayments for equipment, end of period | 8,236 | 15,573 | ||
| Add: Payables for equipment, beginning of period | 19,527 | 40,781 | ||
| Less: Payables for equipment, end of period | ( | 23,247) | ( | 19,527) |
| Cash paid for current period | $ | 124,983 | $ | 121,265 |
Note: The prepaid equipment payments are listed under "Other non-current assets", while the payables for equipment payments are listed under "Other payables".
hh. Changes in liabilities from financing activities
| 2025 | |||||
|---|---|---|---|---|---|
| Short-term borrowings | Short-term notes payable | Long-term borrowings (including due within one year or one operating cycle) | Lease liabilities | Total liabilities from financing activities | |
| January 1 | $ 1,091,000 | $ 233,632 | $ 4,793,000 | $ 208,995 | $ 6,326,627 |
| Changes in cash flow from financing activities | 339,000 | 16,000 | 340,000 | ( 69,840) | 625,160 |
| Other non-cash changes | - | ( 51) | - | 48,489 | 48,438 |
| Effect of changes in exchange rates | - | - | - | 437 | 437 |
| December 31 | $ 1,430,000 | $ 249,581 | $ 5,133,000 | $ 188,081 | $ 7,000,662 |
| 2024 | |||||
| Short-term borrowings | Short-term notes payable | Long-term borrowings (including due within one year or one operating cycle) | Lease liabilities | Total liabilities from financing activities | |
| January 1 | $ 450,000 | $ 99,687 | $ 3,945,000 | $ 246,623 | $ 4,741,310 |
| Changes in cash flow from financing activities | 641,000 | 134,000 | 848,000 | ( 74,774) | 1,548,226 |
| Other non-cash changes | - | ( 55) | - | 30,572 | 30,517 |
| Effect of changes in exchange rates | - | - | - | 6,574 | 6,574 |
| December 31 | $ 1,091,000 | $ 233,632 | $ 4,793,000 | $ 208,995 | $ 6,326,627 |
- Related-party transactions
a. Parent company and ultimate controller
All shares of the Company are publicly held, and there is no ultimate parent company or controller.
b. Name and relationship of related parties
| Names of related party | Relationship with the Group |
|---|---|
| Vie Show Cinemas | Associates |
| Taiwan Chi Yuan Culture Foundation | Other related parties |
c. Significant transactions with related parties
1) Operating revenue
| 2025 | 2024 | |
|---|---|---|
| Sales | ||
| Associates | $ 650 | $ 1,027 |
| Other related parties | - | 2 |
| $ 650 | $ 1,029 |
The Group's sales prices and transaction conditions for said related parties are determined separately in accordance with the economic environment and market competition in each region.
2) Accounts receivable from related parties
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Accounts receivable | ||
| Associates | $ - | $ 136 |
The accounts receivable from related parties mainly come from the sales of goods, and there is no significant difference in the payment terms from those in general transactions, which is usually O/A with net 60 days. There is no mortgage and interest borne on receivables. No allowance for losses is provided for accounts receivable from related parties.
3) Others
The total amount of donation by the Group to the Taiwan Chi Yuan Culture Foundation in 2025 and 2024 was NT$7,000 and NT$10,000, respectively.
4) Information on the remunerations of the key management
| 2025 | 2024 | |
|---|---|---|
| Short-term employee benefits | $ 64,754 | $ 88,125 |
| Post-employment benefits | 1,449 | 1,864 |
| Other long-term employee benefits | - | 188 |
| $ 66,203 | $ 90,177 |
~76~
8. Pledged assets
The details of the assets pledged by the Group as collateral are as follows:
| Asset items | Carrying amount | Purpose of collateral | |
|---|---|---|---|
| December 31, 2025 | December 31, 2024 | ||
| Restricted demand and time deposit (listed in financial assets at amortized cost - current and non-current) | Customs guarantee, margin for issue of letters of credit, leased assets tenancy guarantee, and bank loan guarantee | ||
| Listed stocks (listed in financial assets at FVTPL- non-current) | $ 35,247 | $ 13,696 | Bank borrowings |
| 4,335,470 | 3,194,070 | ||
| Property, plant and equipment | 2,075,477 | 2,091,395 | 〃 |
| Investment property | 175,442 | 182,752 | 〃 |
| Non-current assets held for sale | - | 232,265 | 〃 |
| $ 6,621,636 | $ 5,714,178 |
9. Significant contingent liabilities and unrecognized contractual commitments
a. Contingencies: N/A.
b. Commitments:
1) Capital expenditure for contracts signed but not effective is as follows
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Property, plant and equipment | $ 4,735 | $ 10,196 |
2) The Group signed license agreements for relevant optical disc products with HP Inc. and One-Blue LLC, and paid royalties to the companies in installments based on the sales volume of the relevant products or in installments.
3) Unused amount from letters of credit issued
| December 31, 2025 | Unit: NT$ thousands | |
|---|---|---|
| December 31, 2024 | ||
| USD | $ 525 | $ 15 |
| NTD | 46,282 | - |
~77~
- Major Disaster Loss
None.
- Material Events After the Balance Sheet Date
For the 2025 earnings distribution proposal and cash capital reduction proposed by the Board of Directors of the Company on March 12, 2026, please refer to Note 6 (23)6 and Note 6 (21)2 for details.
- Others
a. Capital management
The Group’s capital management objectives are to ensure that the Group can continue as a going concern, maintain the best capital structure to meet the needs for equipment, and provide dividends to shareholders.
b. Financial instruments
1) Type of financial instruments
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Financial assets | ||
| Financial assets at fair value through profit or loss (FVTPL) | ||
| Financial assets mandatorily at fair value through profit or loss | $ 14,735,673 | $ 12,558,375 |
| Financial assets at FVTOCI | ||
| Investment in designated equity instruments selected | $ 722,176 | $ 591,896 |
| Financial assets measured at amortized cost/loans and receivables | ||
| Cash and cash equivalents | $ 2,877,568 | $ 2,637,373 |
| Financial assets at amortized cost | 390,820 | 291,205 |
| Notes receivable | 2,507 | 3,080 |
| Accounts receivable (including related parties) | 1,267,699 | 1,300,817 |
| Finance lease receivables (listed in other current and non-current assets) | 46,069 | 54,163 |
| Other receivables | 960,032 | 223,635 |
| Refundable deposits (listed in other non-current assets) | 13,165 | 16,338 |
| $ 5,557,860 | $ 4,526,611 |
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Financial liabilities | ||
| Financial liabilities at fair value through profit or loss | ||
| Financial liabilities held for trade | $ 1,416 | $ 313 |
| Financial liabilities measured at amortized cost | ||
| Short-term borrowings | $ 1,430,000 | $ 1,091,000 |
| Short-term notes payable | 249,581 | 233,632 |
| Notes payable | 920 | 2,179 |
| Account payables | 650,694 | 643,042 |
| Other payables | 1,084,956 | 683,961 |
| Long-term borrowing (including due within one year or one operating cycle) | 5,133,000 | 4,793,000 |
| Guarantee deposits received (listed in other current and non-current liabilities) | 16,021 | 8,284 |
| Long-term notes and accounts payable (listed in other non-current liabilities) | 63,507 | 63,507 |
| $ 8,628,679 | $ 7,518,605 | |
| Lease liabilities | $ 188,081 | $ 208,995 |
2) Risk management policy
a) The daily operations of the Group are affected by a number of financial risks, including market risks (including exchange rate risk, interest rate risk, and price risk), credit risk, and liquidity risk. In order to reduce the adverse effects of uncertainty on the financial performance of the Group, the Group engages in forward foreign exchange contracts and foreign exchange swap contracts to avoid exchange rate risk. The derivatives traded by the Group are for the purpose of hedging risks and are not used for trading or speculation.
b) Risk management is carried out by the Group's finance department in accordance with the policies approved by the Board of Directors. The Group's finance department is responsible for identifying, evaluating, and avoiding financial risks through close collaboration with the Group's operating units. The Board of Directors has formulated principles for overall risk management, and also provided written policies for specific areas and matters, such as exchange rate risk, interest rate risk, credit risk, the use of derivative and non-derivative financial instruments, and the investment using remaining liquidity.
c) For information on derivatives trading to avoid financial risks, please refer to Notes 6 (2) and (17) in detail.
3) Nature and level of material financial risks
a) Market risk
Exchange rate risk
i. The Group operates its business transnationally, so it is subject to the exchange rate risk arising from transactions in currencies different from the functional currencies (mainly USD and CNY) used by the Company and its subsidiaries. The exchange rate risk arises from future business transactions and assets and liabilities recognized.
ii. The management of the Group has established policies to regulate the exchange rate risk of each company within the Group in relation to its functional currency. The companies shall hedge against the overall exchange rate risk through the Group's finance department. The exchange rate risk is measured by expected transactions with USD and CNY expenditures that are highly likely to occur. Forward foreign exchange contracts are used to reduce the impact of exchange rate fluctuations on the expected cost of inventory purchase.
iii. The Group uses forward foreign exchange contracts to hedge against exchange rate risk while hedging accounting is not applied, which are listed in financial assets at FVTPL. Please refer to Note 6 (2) and 6 (17) for details.
iv. The Group's business involves a number of non-functional currencies (the functional currencies of the Company and some subsidiaries are NT$, while the functional currencies of other subsidiaries are USD and CNY, etc.). Therefore, it is affected by exchange rate fluctuations. Information on foreign currency assets and liabilities influenced by significant exchange rate fluctuations is as follows:
| December 31, 2025 | |||
|---|---|---|---|
| Foreign currencies (thousand) | Exchange rate | Carrying amount (NTD) | |
| (Foreign currency: Functional currency) | |||
| Financial assets | |||
| Monetary items | |||
| USD: NTD | $ 13,680 | 31.4450 | $ 430,168 |
| USD: JPY | 9,909 | 156.5600 | 311,589 |
| HKD: USD | 30,343 | 0.1284 | 122,510 |
| December 31, 2025 | |||
|---|---|---|---|
| Foreign currencies (thousand) | Exchange rate | Carrying amount (NTD) | |
| Financial liabilities | |||
| Monetary items | |||
| USD: EUR | $ 4,693 | 1.1757 | $ 147,571 |
| USD: NTD | 3,809 | 31.4450 | 119,774 |
| December 31, 2024 | |||
| Foreign currencies (thousand) | Exchange rate | Carrying amount (NTD) | |
| (Foreign currency: Functional currency) | |||
| Financial assets | |||
| Monetary items | |||
| USD: NTD | $ 15,663 | 32.7850 | $ 513,511 |
| USD: JPY | 10,872 | 158.1800 | 356,439 |
| CNY: NTD | 22,437 | 4.4840 | 100,630 |
| Financial liabilities | |||
| Monetary items | |||
| USD: NTD | $ 5,511 | 32.7850 | $ 180,678 |
v. The total exchange (losses) gains (realized and unrealized) of the Group's monetary items, which are significantly affected by exchange rate fluctuations, amounted to NT$32,572 and NT($48,895) in 2025 and 2024, respectively.
vi. The Group's foreign currency market risk analysis due to significant influence of exchange rate fluctuations is as follows:
| 2025 | |||
|---|---|---|---|
| Sensitivity analysis | |||
| Exchange rate band | Effect on profit and loss | Effect on other comprehensive income | |
| (Foreign currency: Functional currency) | |||
| Financial assets | |||
| Monetary items | |||
| USD: NTD | 1% | $ 4,493 | $ - |
| USD: JPY | 1% | 3,116 | - |
| HKD: USD | 1% | 1,225 | - |
| Financial liabilities |
| 2025 | |||
|---|---|---|---|
| Sensitivity analysis | |||
| Exchange rate band | Effect on profit and loss | Effect on other comprehensive income | |
| Monetary items | |||
| USD: EUR | 1% | $ 1,504 | $ - |
| USD: JPY | 1% | 1,179 | - |
| USD: NTD | 1% | 1,138 | - |
| 2024 | |||
| Sensitivity analysis | |||
| Exchange rate band | Effect on profit and loss | Effect on other comprehensive income | |
| (Foreign currency: Functional currency) | |||
| Financial assets | |||
| Monetary items | |||
| USD: NTD | 1% | $ 5,135 | $ - |
| USD: JPY | 1% | 3,564 | - |
| CNY: NTD | 1% | 1,006 | - |
| Financial liabilities | |||
| Monetary items | |||
| USD: NTD | 1% | $ 1,807 | $ - |
Price risk
i. The Group's equity instruments exposed to price risk are financial assets held at FVTPL and financial assets at FVTOCI. To manage its price risk arising from investments in equity instruments, the Group diversifies its portfolio. Diversification of the portfolio is conducted in accordance with limits set by the Group.
ii. The Group mainly invests in equity instruments and open-end funds issued by domestic and foreign companies, and the prices of those equity instruments will be affected by the uncertainty of the future values of said instruments. If the price of said equity instruments rose or fell by $1\%$ , with all other factors remaining unchanged, the net loss after tax for 2025 and 2024 would have increased or decreased by NT$146,556 and NT$124,672, respectively, due to the gains or losses on equity instruments at FVTPL, and the other comprehensive income would have increased or decreased by NT$7,222 and NT$5,919, respectively, because of the gains or losses on the equity instrument investment at FVTOCI.
Interest rate risk of cash flow and fair value
i. The Group's interest rate risk mainly comes from long-term borrowings issued at floating interest rates, exposing the Group to the interest rate risk of cash flow. In 2025 and 2024, the Group's loans taken out at floating interest rates were mainly denominated in NTD.
ii. The Group's loans are measured at amortized cost and the annual interest rate will be repriced periodically according to the contracts. Therefore, the Group is exposed to the risk of future market interest rate changes.
iii. When the NTD borrowing interest rate rose or fell by 0.25%, while all other factors remained unchanged, the net income after tax would have decreased or increased by NT$10,266 and NT$9,586 in 2025 and 2024, respectively, as the interest expenses would change with the floating interest rates for the borrowings.
b) Credit risk
i. The credit risk of the Group is the risk of financial loss suffered by the Group arising from the failure of customers or counterparties of financial instruments to fulfill contractual obligations. It mainly comes from counterparties' inability to settle the contractual cash flow of accounts receivable in accordance with the payment terms.
ii. The Group has established credit risk management from the Group's perspective. For banks and financial institutions with whom it is dealing, only those with good credit ratings can be accepted as transaction counterparties. In accordance with the internal credit policy, each operating entity within the Group must conduct management and credit risk analysis of each new customer before deciding payment and delivery terms and conditions. The internal risk control system evaluates the credit quality of customers by considering their financial positions, past experience, and other factors. Individual risk limits are set by the Board of Directors based on internal or external ratings, and the drawdown of credit limits is regularly monitored.
iii. The indicators used by the Group to determine credit impairment of debt instrument investments are as follows:
i) The issuer is in material financial difficulty or is likely to go into bankruptcy or other financial restructuring;
ii) Delay or non-payment of interest or principal by the issuer;
iii) Relevant changes in adverse national or regional economic conditions resulting in the issuer's default.
~82~
iv. In accordance with the credit risk management procedures adopted by each operating entity of the Group, when a contract payment is overdue by more than 90-360 days in accordance with the agreed payment terms, it shall be deemed as a default.
v. The Group adopts IFRS 9 to set the following assumptions as the basis for judging whether the credit risk of financial instruments has increased significantly since initial recognition:
When a contract payment is overdue for more than 30 days in accordance with the agreed payment terms, it is deemed that the credit risk of a financial asset has increased significantly since the initial recognition.
vi. The Group groups customers' accounts receivable according to the customers' characteristics, and adopts a simplified approach to estimate expected credit losses based on a provision matrix and the loss rate method.
vii. After the recourse procedures, the Group writes off the amount of financial assets that cannot be reasonably expected to be recovered. However, the Group will continue to carry out the legal recourse procedures to preserve the creditor's rights. In 2025 and 2024, the Group had no claims that had been written off nor recourse activities underway.
viii. i) The Group adjusts the loss allowance for accounts receivable and accounts payable of customers with general credit conditions based on historical and current information, taking into account the forward-looking considerations of global economic information. The provision matrix as of December 31, 2025 and 2024 is as follows:
| Expected loss rate | Total carrying amount | Loss allowance | Total | |
|---|---|---|---|---|
| December 31, 2025 | ||||
| Not past due | 0.00%~9.15% | $ 979,438 | ($ 3,288) | $ 976,150 |
| Overdue for 1–30 days | 0.61%~30.00% | 56,938 | ( 400) | 56,538 |
| Overdue for 31–60 days | 32.10%~67.36% | 11,304 | ( 157) | 11,147 |
| Overdue for 61–90 days | 36.20%~100% | 7,449 | ( 2,199) | 5,250 |
| Overdue for 91–180 days | 43.31%~100% | 10,642 | ( 2,673) | 7,969 |
| Overdue for more than 181 days | 69.16%~100% | 41,337 | ( 38,342) | 2,995 |
| $ 1,107,108 | ($ 47,059) | $ 1,060,049 |
| Expected loss rate | Total carrying amount | Loss allowance | Total | |
|---|---|---|---|---|
| December 31, 2024 | ||||
| Not past due | 0.20%~7.7% | $ 963,824 | ($ 2,596) | $ 961,228 |
| Overdue for 1–30 days | 10.37%~24.9% | 53,067 | ( 1,383) | 51,684 |
| Overdue for 31–60 days | 30.2%~79.71% | 39,771 | ( 3,361) | 36,410 |
| Overdue for 61–90 days | 33.2%~100% | 4,890 | ( 261) | 4,629 |
| Overdue for 91–180 days | 40.4%~100% | 54,158 | ( 36,402) | 17,756 |
| Overdue for more than 181 days | 68.8%~100% | 57,624 | ( 54,120) | 3,504 |
| $ 1,173,334 | ($ 98,123) | $ 1,075,211 |
i) For customers in the excellent credit group (not related parties), the Company does not consider expected credit loss to be significant, and thus, calculates expected credit loss using the loss rate method. The expected loss rate is 0.2%. As of December 31, 2025 and 2024, the total value of accounts receivable is NT$210,778 and NT$229,385, respectively, with allowances for losses of NT$621 and NT$699, respectively.
ii) Based on historical experience, the Group conducts individual assessments to calculate expected credit losses for customers with higher credit risks, and 100% of the allowance for losses is provided. The total amount of accounts receivable and loss allowance as of December 31, 2025 and 2024 were NT$87,921 and NT$2,411, respectively, and reclassification to overdue receivables and loss allowance were NT$158,089 and NT$131,598, respectively.
iii) The total carrying value of finance lease receivables (please refer to Note 6 (10)) as of December 31, 2025 and 2024, was NT$46,069 and NT$54,163, respectively. Owing to the good credit risk assessed, the expected 12-month credit impairment was not significant, so the allowance for loss is both NT$0.
iv) The financial assets held by the Company, measured at amortized cost, consist of time deposits with original maturities exceeding three months, restricted bank deposits and time deposits, as well as financial debentures held for principal and interest payments, financial assets at fair value through profit or loss held for trading are principal-protected film investment agreements and financial debentures. There are no significant anomalies in the credit risk of the counterparties.
~84~
ix. The table of the changes in the Group's simplified loss allowance for notes and accounts receivable (including related parties), overdue receivables, and other receivables is as follows:
| 2025 | ||||
|---|---|---|---|---|
| Notes and accounts receivable | Overdue receivables (Note) | Other receivables | Total | |
| January 1 | $ 101,233 | $ 131,598 | $ 7,803 | $ 240,634 |
| Reclassification (Impairment loss recognized (reversed)) | 26,853 | 26,853 | - | - |
| Write-off of unrecoverable accounts | 86,416 | ( 416) | - | 86,000 |
| Effect of exchange rate | ( 24,615) | - | - | ( 24,615) |
| December 31 | $ 135,601 | $ 158,089 | $ 7,803 | $ 301,493 |
| 2024 | ||||
| --- | --- | --- | --- | --- |
| Notes and accounts receivable | Overdue receivables (Note) | Other receivables | Total | |
| January 1 | $ 75,466 | $ 130,433 | $ 7,803 | $ 213,702 |
| Impairment loss recognized (reversed) | 38,581 | ( 416) | - | 38,165 |
| Write-off of unrecoverable accounts | ( 14,177) | - | - | ( 14,177) |
| Effect of exchange rate | 1,363 | 1,581 | - | 2,944 |
| December 31 | $ 101,233 | $ 131,598 | $ 7,803 | $ 240,634 |
Note: Listed as other non-current assets.
In 2025 and 2024, the impairment losses arising from receivables from customer contracts were NT$86,000 and NT$38,165, respectively.
c) Liquidity risk
i. The cash flow forecast is executed by each operating entity in the Group and is compiled by the Group's finance department. The Group's finance department monitors the forecast of the Group's liquidity requirements to ensure that it has sufficient funds to meet operational needs.
ii. The following table shows the Group's non-derivative financial liabilities and derivative financial liabilities that are settled on a net or total basis, grouped according to the relevant maturity dates. Non-derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the contract maturity date. Derivative financial liabilities are analyzed based on the remaining period from the balance sheet date to the expected maturity date. The contractual cash flow amounts disclosed in the table below are undiscounted amounts.
December 31, 2025
| Non-derivative financial liabilities: | Within 1 year | 1-2 years | 2-5 years | Over 5 years |
|---|---|---|---|---|
| Short-term borrowings (including estimated interest) | $ 1,441,092 | $ - | $ - | $ - |
| Short-term notes payable (including estimated interest) | 250,000 | - | - | - |
| Notes payable | 920 | - | - | - |
| Account payables | 650,694 | - | - | - |
| Other payables | 1,084,956 | - | - | - |
| Lease liabilities | 61,508 | 57,608 | 101,465 | 7,395 |
| Long-term borrowings (including due within one year or one operating cycle and estimated interest) | 1,625,250 | 2,662,351 | 1,001,499 | - |
| Long-term notes and accounts payable (listed in other non-current liabilities) | - | - | - | 63,507 |
| Guarantee deposits received (listed in other current and non-current liabilities) | 950 | 486 | 4,925 | 9,660 |
| Derivative financial liabilities: | ||||
| Forward exchange agreements | $ 1,416 | $ - | $ - | $ - |
~87~
December 31, 2024
Non-derivative financial
liabilities:
| | Within 1 year | 1-2 years | 2-5 years | Over 5 years |
| --- | --- | --- | --- | --- |
| Short-term borrowings
(including
estimated interest) | $ 1,093,706 | $ - | $ - | $ - |
| Short-term notes
payable (including
estimated interest) | 234,000 | - | - | - |
| Notes payable | 2,179 | - | - | - |
| Account payables | 643,042 | - | - | - |
| Other payables | 683,961 | - | - | - |
| Lease liabilities | 71,797 | 39,604 | 94,656 | 21,460 |
| Long-term borrowings
(including due
within one year or
one operating cycle
and estimated
interest) | 1,298,166 | 3,442,228 | 196,134 | - |
| Long-term notes and
accounts payable
(listed in other non-
current liabilities) | - | - | - | 63,507 |
| Guarantee deposits
received (listed in
other current and
non-current
liabilities) | 148 | 156 | 4,559 | 3,421 |
| Derivative financial
liabilities: | | | | |
| Forward exchange
agreements | $ 313 | $ - | $ - | $ - |
iii. Details of the unused borrowing limits of the Group are as follows:
| December 31, 2025 | December 31, 2024 | |
|---|---|---|
| Floating interest rate | ||
| Expires within one year | $ 1,577,890 | $ 2,061,495 |
| Expires after more than one year | 1,547,000 | 825,000 |
| $ 3,124,890 | $ 2,886,495 |
c. Fair value information:
1) The fair value levels of the financial instruments and non-financial instruments measured using the valuation technique are defined as follows:
Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities on the measurement date. An active market refers to a market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis. The fair value of the listed stocks, beneficiary certificates and corporate bonds invested by the Group belong to this level.
Level 2: Inputs, other than quoted market prices within level 1 that are observable, either directly or indirectly for assets or liabilities. The fair value of most of the derivatives and investment property invested by the Group belongs to this level.
Level 3: Unobservable inputs for assets or liabilities. The equity instruments without active markets invested by the Group belong to this level.
2) For information regarding the fair value of investment properties measured at cost, please refer to Note 6 (11) for details.
3) Financial instruments not measured at fair value
The carrying amounts of the Group's financial instruments not measured at fair value, including cash and cash equivalents, financial assets at amortized cost, notes receivable, accounts receivable (including related parties), finance lease payment receivables (listed in other current and non-current assets) other receivables, refundable deposits (listed in other non-current assets), overdue receivables (listed in other non-current assets), short-term borrowings, notes payables, accounts payables, other payables, long-term borrowings (including due within one year or one operating cycle), and guarantee deposits received (listed in other non-current liabilities), are reasonable approximations of the fair values.
4) Financial and non-financial instruments measured at fair value are classified by the Group based on the nature, characteristics, risk, and the level of fair value of assets and liabilities. The relevant information is as follows:
a) The Group's classification is based on the nature of assets and liabilities. The relevant information is as follows:
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Assets | ||||
| Fair value on a recurring basis | ||||
| Financial assets at fair value through profit or loss (FVTPL) | ||||
| Beneficiary certificates | $ 219,745 | $ - | $ - | $ 219,745 |
| December 31, 2025 | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|
| Equity securities | 14,141,221 | 125,673 | 46,071 | 14,312,965 |
| Commercial bonds | 59,061 | - | - | 59,061 |
| Principal-protected film investment agreements | - | - | 14,815 | 14,815 |
| Film investment contracts | - | - | 6,241 | 6,241 |
| Privately offered funds | - | - | 122,846 | 122,846 |
| Financial assets at FVTOCI | ||||
| Equity securities | 181,314 | - | 540,862 | 722,176 |
| $ 14,601,341 | $ 125,673 | $ 730,835 | $ 15,457,849 | |
| Liabilities | ||||
| Fair value on a recurring basis | ||||
| Financial liabilities at fair value through profit or loss | ||||
| Derivative instruments | $ - | $ 1,416 | $ - | $ 1,416 |
| December 31, 2024 | Level 1 | Level 2 | Level 3 | Total |
| Assets | ||||
| Fair value on a recurring basis | ||||
| Financial assets at fair value through profit or loss (FVTPL) | ||||
| Beneficiary certificates | $ 229,533 | $ - | $ - | $ 229,533 |
| Equity securities | 12,077,275 | - | 84,069 | 12,161,344 |
| Commercial bonds | 60,842 | - | - | 60,842 |
| Principal-protected film investment agreements | - | - | 21,960 | 21,960 |
| Film investment contracts | - | - | 8,060 | 8,060 |
| Privately offered funds | - | - | 76,357 | 76,357 |
| Derivative instruments | - | 279 | - | 279 |
| Financial assets at FVTOCI | ||||
| Equity securities | 190,271 | - | 401,625 | 591,896 |
~90~
| $ 12,557,921 | $ 279 | $ 592,071 | $ 13,150,271 | |
|---|---|---|---|---|
| Liabilities | ||||
| Fair value on a recurring basis | ||||
| Financial liabilities at fair value through profit or loss | ||||
| Derivative instruments | $ - | $ 313 | $ - | $ 313 |
b) The methods and assumptions used by the Group to measure fair value are as follows:
i. The market quoted prices adopted by the Group as fair value inputs (i.e. Level 1) are listed below by characteristics:
| Listed stocks | Open-end funds | Closed-end funds | Corporate bonds | |
|---|---|---|---|---|
| Market quoted prices | Closing price | Net worth | Net worth | Per the weighted average yield or price-per-hundred |
ii. Except for the above-mentioned financial instruments with active markets, the fair value of other financial instruments is obtained through valuation techniques or with reference to the quoted prices of counterparties.
iii. When evaluating non-standard and less complex financial instruments, the Group adopts the valuation techniques widely used by market participants. The parameters used in the valuation models for such financial instruments are usually market observable information.
iv. The valuation of derivative financial instruments is based on valuation model widely accepted by market participants, such as present discounted value techniques and option pricing models. Forward exchange contracts are usually valued based on current forward exchange rates.
v. The output of the valuation models is an estimated value, and the valuation techniques may not reflect all the relevant factors of the financial instruments and non-financial instruments held by the Group. Therefore, the estimated value of the valuation models will be appropriately adjusted according to additional parameters.
5) There were no transfers between Level 1 and Level 2 fair value in 2025 and 2024.
6) The table below shows the changes in Level 3 fair value in 2025 and 2024:
| 2025 | 2024 | |||
|---|---|---|---|---|
| January 1 | $ | 592,071 | $ | 675,960 |
| Acquisition of financial assets at FVTPL | 63,241 | 59,777 | ||
| Disposal of financial assets at FVTPL | ( | 18,033) | - | |
| Price of acquisition of financial assets at fair value through other comprehensive income | 3,000 | 26,800 | ||
| Refund from capital reduction through equity instruments at FVTOCI | ( | 5,470) | ( | 4,587) |
| Listed in unrealized gain/loss on investments in equity instruments at FVTOCI - parent company | 148,261 | ( | 83,053) | |
| Listed in unrealized gain/loss on investments in equity instruments at fair value through other comprehensive income - non-controlling interests | ( | 12) | ( | 80) |
| Unrealized valuation gain or loss on financial assets at FVTP | 17,759 | 14,168 | ||
| Transfer out of Level 3 (please refer to 7 and 8 below) | ( | 57,852) | ( | 102,000) |
| Effect of exchange rate | ( | 12,130) | 5,086 | |
| December 31 | $ | 730,835 | $ | 592,071 |
| Changes in unrealized gains or losses included in profit or loss at the end of the period (Note) | $ | 17,759 | $ | 14,168 |
| Note: Listed in non-operating income and expenses. |
7) Due to Pell BMT Ltd.'s listing on the TWSE's Taiwan Innovation Board in March 2024, the trading volume in the market has steadily increased, leading to the availability of sufficient observable market information. Consequently, the Group has transfer the fair value from Level 3 to Level 1 at the end of the month in which this event occurs.
8) As Bailey Biofund has been listed on the Taipei Exchange's Emerging Stock Board since December 2025 and its trading volume has been steadily increasing, sufficient observable market information has become available. Accordingly, the Company transferred the fair value measurement from Level 3 to Level 2 at the end of the month in which the event occurred.
~91~
9) In the Group’s valuation process for fair value classified as Level 3, the strategic investment department is responsible for independent fair value verification for financial instruments, uses data from independent sources to make the valuation results close to the market level, and confirms that the source of the data is independent, reliable, consistent with other resources, and representative of the executable price, while regularly calibrating the valuation model, updating the inputs and data required by the valuation model, and making any other necessary fair value adjustments to ensure that the valuation results are reasonable.
10) The quantitative information on the significant unobservable inputs of the valuation model used in the Level 3 fair value measurement and the sensitivity analysis of the significant unobservable input change are explained as follows:
| Fair value on December 31, 2025 | Valuation techniques | Significant unobservable inputs | Interval (weighted average) | Relationship between input and fair value | |
|---|---|---|---|---|---|
| Non-derivative equity instruments: | |||||
| Unlisted stocks | $ 402,944 | Comparable public company approach | Price-to-earnings ratio, price-to-book ratio, enterprise value-to-operating income ratio, enterprise value-to-earnings before interest, taxes, depreciation, and amortization ratio, and lack of market liquidity discount | N/A | The higher the multiple, the higher the fair value; The higher the discount for market liquidity, the lower the fair value. |
| Stocks of venture capital companies | 183,989 | Net asset value method | N/A | N/A | N/A |
| Privately offered funds | 122,846 | Net asset value method | N/A | N/A | N/A |
| Principal-protected film investment agreements | 14,815 | Discounted cash flow | Discount rate | N/A | The higher the discount rate, the lower the fair value. |
| Film investment contracts | 6,241 | Discounted cash flow | Discount rate | N/A | The higher the discount rate, the lower the fair value. |
| Fair value on December 31, 2024 | Valuation techniques | Significant unobservable inputs | Interval (weighted average) | Relationship between input and fair value | |
|---|---|---|---|---|---|
| Non-derivative equity instruments: | |||||
| Unlisted stocks | $ 324,809 | Comparable public company approach | Price-to-earnings ratio, price-to-book ratio, enterprise value-to-operating income ratio, enterprise value-to-earnings before interest, taxes, depreciation, and amortization ratio, and lack of market liquidity discount | N/A | The higher the multiple, the higher the fair value; The higher the discount for market liquidity, the lower the fair value. |
| Stocks of venture capital companies | 160,885 | Net asset value method | N/A | N/A | N/A |
| Privately offered funds | 76,357 | Net asset value method | N/A | N/A | N/A |
| Principal-protected film investment agreements | 21,960 | Discounted cash flow | Discount rate | N/A | The higher the discount rate, the lower the fair value. |
| Film investment contracts | 8,060 | Discounted cash flow | Discount rate | N/A | The higher the discount rate, the lower the fair value. |
11) The Group has selected valuation model and valuation parameters after careful evaluation, but different valuation results may occur due to the use of different valuation models or valuation parameters. Regarding financial assets classified as Level 3, if there are any changes in the valuation parameters, they will affect the profit or loss of the current period and other comprehensive income. Such impact is shown as follows:
| Input value | Changes | December 31, 2025 | ||||
|---|---|---|---|---|---|---|
| Recognized in profit or loss | Recognized in other comprehensive income | |||||
| Favorable changes | Unfavorable changes | Favorable changes | Unfavorable changes | |||
| Financial assets | ||||||
| Equity instruments and privately offered funds | Market price and net asset value | ±1% | $ 1,689 | ($ 1,689) | $ 5,409 | ($ 5,409) |
| Input value | Changes | December 31, 2024 | ||||
|---|---|---|---|---|---|---|
| Recognized in profit or loss | Recognized in other comprehensive income | |||||
| Favorable changes | Unfavorable changes | Favorable changes | Unfavorable changes | |||
| Financial assets | ||||||
| Equity instruments and privately offered funds | Market price and net asset value | ±1% | $ 1,604 | ($ 1,604) | $ 4,016 | ($ 4,016) |
13. Supplementary Disclosures
a. Information on significant transactions
1) Loans to others: Table 1.
2) Endorsements/Guarantees provided to others: Table 2.
3) Significant Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures): Table 3.
4) Total purchases or sales with related parties amounting to at least NT$100 million or 20% of the paid-in capital: Please refer to Table 4.
5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital: Table 5.
6) Business relations and significant transactions of between parent company and subsidiaries: Table 6.
b. Information on investees
Information on Name and Location of Investees (Excluding Investees in Mainland China): Table 7.
c. Information on investments in mainland China
1) Basic information: Table 8.
2) Significant transactions with investees in mainland China, either directly or indirectly, through a business in a third region, the prices, payment terms, and unrealized gains or losses: Note 13 (1) 6.
- Segment Information
a. General information.
The Group operates its business from the perspective of different industries, and divides its business into storage media segment, other optoelectronics segment, and other segments. The types of industries are as follows:
1) Storage media segment: Manufacturing and sales of consumer electronic products, including optical discs.
2) Other optoelectronic segment: Manufacturing and sales of panels.
3) Investment segment: Investment in various businesses.
4) Other segments: Audio-visual sales and business other than sales of optical discs.
b. Measurement of segment information
The profit or loss of the operating segments of the Group is measured based on operating income/loss after tax, which serves as the basis for performance evaluation. In addition, the accounting policies for the business segment of the Group are the same as the summary of significant accounting policies described in Note 4.
~95~
c. Information on profit or loss of segments
The information on segments to be reported to the chief operating decision maker is as follows:
| 2025 | ||||||
|---|---|---|---|---|---|---|
| Storage media segment | Other optoelectronics segment | Investment segment | Other segments | Adjustments and write-offs | Total | |
| External revenue | $ 6,636,423 | $ 295,310 | $ - | $ 251,259 | $ - | $ 7,182,992 |
| Internal segment revenue | 1,626,364 | - | - | 72,646 | ( 1,699,010) | - |
| $ 8,262,787 | $ 295,310 | $ - | $ 323,905 | ($ 1,699,010) | $ 7,182,992 | |
| Profit or loss of segments | ($ 778,916) | ($ 4,780) | $ 1,085,521 | ($ 140,871) | $ 1,040 | ($ 1,719,826) |
| Profit or loss of segments includes: | ||||||
| Depreciation and amortization | $ 251,837 | $ 20,650 | $ 1,121 | $ 28,764 | ($ 18,014) | $ 284,358 |
| 2024 | ||||||
| Storage media segment | Other optoelectronics segment | Investment segment | Other segments | Adjustments and write-offs | Total | |
| External revenue | $ 6,891,624 | $ 262,049 | $ - | $ 281,510 | $ - | $ 7,435,183 |
| Internal segment revenue | 1,780,956 | - | - | 71,408 | ( 1,852,364) | - |
| $ 8,672,580 | $ 262,049 | $ - | $ 352,918 | ($ 1,852,364) | $ 7,435,183 | |
| Profit or loss of segments | ($ 427,099) | ($ 27,126) | $ 177,654 | ($ 37,578) | ($ 1,382) | $ 312,767 |
| Profit or loss of segments includes: | ||||||
| Depreciation and amortization | $ 436,537 | $ 26,391 | $ 749 | $ 64,647 | ($ 20,142) | $ 508,182 |
d. Information on the reconciliation of profit or loss of segments
As the Group's information on pre-tax profit or loss of the segments to be reported is consistent with that of continuing operations, so no reconciliation is required.
e. Information on products and services
Please Note 6 (25) for details.
f. Geographical region information
Geographical region information for 2025 and 2024 is as follows:
| 2025 | 2024 | |||
|---|---|---|---|---|
| Revenue | Non-current assets | Revenue | Non-current assets | |
| Taiwan | $ 488,410 | $ 3,996,817 | $ 472,762 | $ 4,150,031 |
| Americas | 1,276,845 | 66,034 | 1,518,631 | 89,031 |
| Japan | 1,422,698 | 454 | 1,481,481 | 1,788 |
| Asia | 494,830 | 9,199 | 558,207 | 16,751 |
| Mainland China | 329,158 | 398,007 | 327,794 | 414,218 |
| Europe | 2,566,180 | 45,502 | 2,518,789 | 66,777 |
| Others | 604,871 | 103,708 | 557,519 | 17,403 |
| Total | $ 7,182,992 | $ 4,619,721 | $ 7,435,183 | $ 4,755,999 |
g. Major customer information
The Group only had one individual customer from the storage media segment who accounted for at least 10% of its operating income in 2025 and 2024, with the amount of NT$833,360 and NT$957,657, respectively.
CMC Magnetics Corporation and Its Subsidiaries
Loans to Others
January 1 to December 31, 2025
Table 1.
Unit: NT$ thousands
(Unless specified otherwise)
| No. (Note 1) | Lender | Borrower | Current account (Note 2) | Related party status | Maximum balance for the period (Note 3) | Closing balance (Note 10) | Actual amount drawn down | Range of interest rates (%) | Nature of loan (Note 4) | Amount of transactions (Note 5) | Reason for short-term financing (Note 6) | Allowance for doubtful accounts | Collateral | Limit on loan granted to a single party | Total limit | Remarks | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Name | Value | ||||||||||||||||
| 1 | EMC H | Fortune (Jiangsu) Multimedia | Other receivables | Y | $ 205,740 | $ 189,000 | $ 189,000 | - | 2 | $ - | Working capital | $ - | - | $ - | $ 310,236 | $ 827,297 | Note 8, Note 10 |
| 1 | EMC H | VJP | Other receivables | Y | 22,550 | 20,110 | 20,110 | - | 2 | - | Working capital | - | - | - | 310,236 | 827,297 | Note 8, Note 10 |
| 1 | EMC H | CMC | Other receivables | Y | 325,409 | 308,161 | 308,161 | - | 2 | - | Working capital | - | - | - | 1,034,121 | 827,297 | Note 8, Note 10 |
| 1 | EMC H | F5 Holdings | Other receivables | Y | 6,641 | 6,289 | 6,289 | - | 2 | - | Working capital | - | - | - | 310,236 | 827,297 | Note 8, Note 10 |
| 2 | SuperNet | CMC | Other receivables | Y | 154,090 | 28,301 | 28,301 | - | 2 | - | Working capital | - | - | - | 212,653 | 170,122 | Note 9, Note 10 |
| 3 | Fortune (Jiangsu) Electronic | Sun Biotech Limited | Other receivables | Y | 17,374 | 17,100 | 17,100 | 3.00 | 2 | - | Working capital | - | - | - | 53,206 | 53,206 | Note 7, Note 10 |
Note 1: The information on such transactions between the Company and its subsidiaries shall be indicated in the No. column as follows:
(1) The Company is coded "0".
(2) The subsidiaries are coded sequentially beginning from "1" by each individual company.
Note 2: For any transaction recognized in amount receivable from associates, amount receivable from related parties, shareholders' transactions, advance payments, temporary debits, etc., in the case of a fund lent to others, this field shall be entered.
Note 3: The highest balance of funds loaned to others in the current year.
Note 4: The nature of lending of funds shall be listed as business transactions or necessary for short-term financing.
(1) In the case of business transactions, please enter 1.
(2) If there is a need for short-term financing, please enter 2.
Note 5: If the nature of lending of funds belongs to business transactions, the amount of business transactions shall be entered. The amount of business transactions refers to the amounts of business transactions between the lender and the borrower in the most recent year.
Note 6: If the nature of lending of funds belongs to a need for short-term financing, the reasons for the necessity of the lending and the purpose of borrowing, such as repayment of loans, purchase of equipment, or working capital shall be specified.
Note 7: The upper limit on the funds lent is 40% of the current net worth of the lender.
The limit on the funds lent to each entity is 40% of the net worth of the lender.
Note 8: The upper limit on the funds lent is 40% of the current net worth of the lender.
For subsidiaries in which the Company holds 50% of the shares directly and indirectly without business conducted between both parties, the limit on the funds lent to each of said subsidiaries is capped at 15% of the Company's net worth.
For the parent company of the Company and foreign companies in which the parent company holds 100% of the shares directly and indirectly, the limit on the funds lent shall not exceed 50% of the Company's current net worth.
Note 9: The upper limit on the funds lent is 40% of the current net worth of the lender. For the parent company of the Company and foreign companies in which the parent company holds 100% of the shares directly and indirectly, the limit shall not exceed 50% of the Company's net worth.
Note 10: The translation is based on the original currency multiplied by the exchange rate at the end of the period.
Table 1 Page1
CMC Magnetics Corporation and Its Subsidiaries
Endorsements/Guarantees Provided to Others
January 1 to December 31, 2025
Table 2.
Unit: NT$ thousands
(Unless specified otherwise)
| No. (Note 1) | Company name (Endorsement /Guarantee provider) | Party endorsed/guaranteed | Limit of endorsement/guarantee for a single entity | Maximum endorsement/guarantee balance for the current period (Note 4) | Balance of endorsement/guarantee, end of period (Note 5) | Actual amount drawn down (Note 6) | Endorsements/guarantees secured by property for the amount of the guarantee | Cumulative endorsements/guarantees to the net equity in the latest financial statements (%) | Upper limit of endorsements/guarantees | Parent to subsidiary (Note 7) | Subsidiary to Parent (Note 7) | To entity in mainland China (Note 7) | Remarks | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Company name | Relationship (Note 2) | |||||||||||||
| 1 | CMC Entertainment | CMC Entertainment Hub | 4 | $ 41,507 | $ 1,174 | $ 580 | $ - | $ - | 0.42 | $ 41,507 | N | N | N | Note 3 |
Note 1: The description of no. column is as follows:
(1) The issuer is coded "0".
(2) The investees are coded sequentially beginning from "1" by each individual company.
Note 2: There are seven types of relationships between the endorsement/guarantee provider and the endorsed/guaranteed party. Just enter the code:
(1) A company with which it conducts business.
(2) A subsidiary in which the Company holds at least 50% of the voting shares directly and indirectly.
(3) A company that holds at least 50% of the Company's voting shares directly and indirectly.
(4) Between companies in which the Company holds at least 90% of the voting shares directly and indirectly.
(5) Between companies in the same industry or joint applicants to undertake projects who are required to provide mutual endorsements/guarantees to the other company in accordance with the contractual terms.
(6) Companies that are endorsed and guaranteed by all shareholders based on their shareholding ratios because of a joint investment relationship.
(7) The joint guarantee for the performance of a pre-sale property sales contract between entities in the same industry in accordance with the Consumer Protection Act.
Note 3: The upper limit of CMC Entertainment endorsements/guarantees to external entities shall not exceed 30% of its net worth of the current period, and the limit of endorsement/guarantee to a single enterprise shall not exceed 30% of its net worth of the current period.
Note 4: The maximum balance of endorsements/guarantees provided to others in the current year.
Note 5: As of the balance sheet date, when the amount of an endorsement/guarantee contract or bill signed by the Company with a bank is approved, the Company shall assume the endorsement/guarantee responsibility; other relevant endorsements/guarantees shall be included in the endorsement/guarantee balance.
Note 6: The actual amount drawn down by the endorsed/guaranteed company within the endorsement/guarantee balance shall be entered.
Note 7: "Y" shall be entered only for the endorsement/guarantee provided by the publicly listed parent company to subsidiary, by subsidiary to the publicly listed parent company, and to entities in mainland China.
Note 8: As of December 31, 2025, CMC's balance of customs guarantee provided to the Customs Office for post-release duty payments was NT$3,000.
As of December 31, 2025, Transtouch's balance of customs guarantee provided to the Customs Office for post-release duty payments was NT$1,861.
Table 2 Page 1
CMC Magnetics Corporation and Its Subsidiaries
Significant Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures)
December 31, 2025
Unit: NT$ thousands
(Unless specified otherwise)
Table 3.
| Securities held by | Type and name of securities (Note 1) | Relationship with securities issuer | General ledger account | End of period | Remarks | |||
|---|---|---|---|---|---|---|---|---|
| Number of Shares | Carrying amount (Note 2) | Shareholding percentage (%) | Fair value | |||||
| CMC | Stock of Taiwan High Speed Rail Corporation | Financial assets at fair value through profit or loss - current | 127,305,000 | $ 3,564,540 | 2.26 | $ 3,564,540 | ||
| Stock of Chateau International Development Company Limited | " | 15,813,020 | 413,510 | 11.04 | 413,510 | |||
| Stock of Tainan Enterprises Co., Ltd. | " | 13,365,000 | 331,452 | 9.14 | 331,452 | |||
| Stock of Taiwan Semiconductor Manufacturing Co., Ltd. | " | 487,000 | 754,850 | - | 754,850 | |||
| Stock of Dynapack International Technology Corp. | " | 2,375,000 | 800,375 | 1.54 | 800,375 | |||
| Stock of Phison Electronics Corp. | " | 82,000 | 118,900 | 0.04 | 118,900 | |||
| Stock of Hon Hai Precision Industry Co., Ltd. | " | 1,045,000 | 240,873 | 0.01 | 240,873 | |||
| Stock of STL Technology Co., Ltd. | " | 940,000 | 169,200 | 1.43 | 169,200 | |||
| Stock of FOCI Fiber Optic Communications, Inc. | " | 450,000 | 205,875 | 0.43 | 205,875 | |||
| Stock of EZconn Corporation | " | 335,000 | 455,600 | 0.43 | 455,600 | |||
| Stock of Heron Neutron Medical Corp. | " | 386,000 | 174,279 | 0.25 | 174,279 | |||
| Perry Biotech Pharmaceuticals Co., Ltd. stocks | " | 412,761 | 141,371 | 0.64 | 141,371 | |||
| Stock of Taiwan High Speed Rail Corporation | Financial assets at FVTPL - non-current | 94,600,000 | 2,648,800 | 1.68 | 2,648,800 | Note 3 | ||
| Stock of Taiwan Semiconductor Manufacturing Co., Ltd. | " | 200,000 | 310,000 | - | 310,000 | Note 3 | ||
| Stock of Strand Europe | Financial assets at FVTOCI - non-current | 100,000 | 265,044 | 11.14 | 265,044 |
Note 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the items above that fall within the scope of IFRS 9 "Financial Instruments".
Note 2: For those measured at fair value, please fill in the carrying amount after fair value valuation adjustment.
Note 3: As of December 31, 2025, the Company has provided 103,600 thousand shares of marketable securities (with a book value of NT$3,149,920) as collateral for pledge.
Note 4: This table presents securities that the Company has determined should be disclosed based on the materiality principle.
CMC Magnetics Corporation and Its Subsidiaries
Significant Marketable Securities Held at the End of the Period (Excluding Investment in Subsidiaries, Associates, and Joint Ventures)
December 31, 2025
Unit: NT$ thousands
(Unless specified otherwise)
Table 3.
| Securities held by | Type and name of securities (Note 1) | Relationship with securities issuer | General ledger account | End of period | Remarks | |||
|---|---|---|---|---|---|---|---|---|
| Number of Shares | Carrying amount (Note 2) | Shareholding percentage (%) | Fair value | |||||
| CHC | Stock of Taiwan High Speed Rail Corporation | Financial assets at fair value through profit or loss - current | 28,562,000 | $ 799,736 | 0.51 | $ 799,736 | ||
| Millerful No.1 REIT | " | 16,340,332 | 163,893 | 0.01 | 163,893 | |||
| Silicon Integrated Systems Corp. | " | 3,228,500 | 150,448 | 0.63 | 150,448 | |||
| Hon Hai Precision Industry Co., Ltd. | " | 860,000 | 198,230 | 0.01 | 198,230 | |||
| Beiley Biofund Co., Ltd. | " | 5,131,822 | 125,673 | 2.50 | 125,673 | |||
| Stock of Tainan Enterprises Co., Ltd. | Financial assets at FVTPL - non-current | 9,522,000 | 236,146 | 6.52 | 236,146 | Note 3 | ||
| Stock of Chung Hsin Electric & Machinery Manufacturing Corporation | " | 2,256,730 | 337,381 | 0.45 | 337,381 | Note 3 | ||
| Stock of Taiwan High Speed Rail Corporation | " | 26,600,000 | 744,800 | 0.47 | 744,800 | Note 3 | ||
| Stock of Chateau International Development Company Limited | " | 7,221,500 | 188,842 | 5.04 | 188,842 | Note 3 | ||
| Stock of Farglory Hotel Co., Ltd. | " | 5,800,000 | 106,430 | 5.52 | 106,430 | Note 3 | ||
| Supernet | Stock of Sands China Limited | Financial assets at fair value through profit or loss - current | 807,600 | 114,715 | 0.01 | 114,715 |
Note 1: The securities mentioned in this table refer to stocks, bonds, beneficiary certificates, and securities derived from the items above that fall within the scope of IFRS 9 "Financial Instruments".
Note 2: For those measured at fair value, please fill in the carrying amount after fair value valuation adjustment.
Note 3: As of December 31, 2025, CHC provided 40,700 thousand shares of marketable securities (Carrying amount: NT$1,185,550) as pledge guarantee.
Note 4: This table presents securities that the Company has determined should be disclosed based on the materiality principle.
CMC Magnetics Corporation and Its Subsidiaries
Total Purchases from or Sales to Related Parties Amounting to at least NT$100 Million or 20% of the Paid-in Capital
January 1 to December 31, 2025
Table 4.
Unit: NT$ thousands
(Unless specified otherwise)
| Transaction | Situation and reason that transaction conditions are different from general ones (Note 1) | Notes and accounts receivable (payable) | Remarks (Note 2) | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Companies engaged in the purchase (sale) of goods | Counterparty | Relationship | Purchase (Sale) | Amount | Proportion to total purchases (sales) | Credit period | Unit price | Credit period | Balance | Proportion to total notes/accounts receivable (payable) | |
| CMC | Fortune (Jiangsu) Multimedia | Subsidiary of sub-subsidiary | Sale | $ 216,709 | 8% | As it is between parent and sub-subsidiary, the credit period is slightly longer than that of general customers | Equivalent to non-related party | As it is between parent and sub-subsidiary, the credit period is slightly longer than that of general customers | $ 96,331 | 11% | |
| " | VUS | " | Sale | 338,672 | 13% | " | " | " | 142,930 | 17% | |
| " | VJP | Sub-subsidiary | Sale | 640,300 | 25% | No significant difference from general transactions | " | No significant difference from general transactions | 337,856 | 40% | |
| " | VGmbH | Subsidiaries | Sale | 296,215 | 11% | " | " | " | 70,924 | 8% |
Note 1: If related-party transaction terms are different from general transaction terms, situations and reasons for the differences shall be specified in the unit price and the credit period columns.
Note 2: In case of advance receipts (prepayments), reasons, the terms of the agreement, the amount and differences from the general transactions shall be specified in the Remarks column.
Table 4 Page 1
CMC Magnetics Corporation and Its Subsidiaries
Receivables from Related Parties Amounting to at Least NT$100 Million or 20% of the Paid-in Capital
December 31, 2025
Table 5.
Unit: NT$ thousands
(Unless specified otherwise)
| Company under accounts receivable | Counterparty | Relationship | Balance of accounts receivable from related parties (Note 1) | Turnover rate (times) | Overdue receivables from related parties | Accounts receivable from related parties Amounts recovered in the subsequent period | Loss allowance provided | |
|---|---|---|---|---|---|---|---|---|
| Amount | Response method | |||||||
| CMC | VJP | Sub-subsidiary | $ 337,856 | 1.78 | $ 102,248 | Strengthening Collection | $ 74,544 | $ - |
| " | VUS | Subsidiary of sub-subsidiary | 142,930 | 2.04 | 29,503 | Strengthening Collection | 11,097 | - |
| EMC H | Fortune (Jiangsu) Multimedia | Sub-subsidiary | 189,000 | Note 2 | - | - | - | - |
| " | CMC | Ultimate parent company | 308,161 | Note 2 | - | - | - | - |
Note 1: Please enter respectively according to accounts receivable from related parties, notes receivables, other receivables, etc.
Note 2: It is other receivables arising from funds lent, so it is not applicable.
CMC Magnetics Corporation and Its Subsidiaries
Business relations and significant transactions of between parent company and subsidiaries
January 1 to December 31, 2025
Table 6.
Unit: NT$ thousands
(Unless specified otherwise)
| No. (Note 1) | Company | Counterparty | Nature of Relationship (Note 2) | Transaction details | |||
|---|---|---|---|---|---|---|---|
| Account | Amount (Note 6) | Transaction conditions | Proportion to total consolidated revenue or assets (Note 3) | ||||
| 0 | CMC | Fortune (Jiangsu) Multimedia | 1 | Sale | $ 216,709 | Note 4 | 3.02% |
| " | " | VJP | 1 | Sale | 640,300 | Note 4 | 8.91% |
| " | " | " | 1 | Accounts receivable | 337,856 | Note 4 | 1.17% |
| " | " | VUS | 1 | Sale | 338,672 | Note 4 | 4.71% |
| " | " | " | 1 | Accounts receivable | 142,930 | Note 4 | 0.50% |
| " | " | VGmbH | 1 | Sale | 296,215 | Note 4 | 4.12% |
| 1 | EMC H | Fortune (Jiangsu) Multimedia | 1 | Other receivables | 189,000 | Note 5 | 0.66% |
| " | " | CMC | 2 | Other receivables | 308,161 | Note 5 | 1.07% |
Note 1: The information on transactions between the parent company and its subsidiaries shall be indicated in the no. column as follows:
(1) The parent company is coded "0"
(2) The subsidiaries are coded sequentially beginning from "1" by each individual company.
Note 2: There are three types of relationships with the company. Just enter the code:
(1) Parent to subsidiary
(2) Subsidiary to parent
(3) Between subsidiaries
Note 3: Regarding the proportion of transaction amount to the total consolidated revenue or assets, if it is recognized in the balance sheet account, it is shown with the ending balance as a percentage of the total consolidated assets; if it is in the profit or loss account, it is shown with the cumulative amount throughout the period as a percentage of the total consolidated revenue.
Note 4: The Company's transaction price for related parties is equivalent to that for non-related parties; the payment term for overseas subsidiaries and sub-subsidiaries is 75 to 180 days after the arrival of goods. The payment term for general overseas customers is 30 to 120 days after the arrival of goods, and for general domestic customers, it is open account (O/A) with net 30 to 120 days.
Note 5: It refers to receivable for funds lent and dividend receivable.
Note 6: Individual amounts less than NT$100,000 will not be disclosed, and the transactions between both parties will no longer be disclosed.
Table 6 Page 1
CMC Magnetics Corporation and Its Subsidiaries
Information on Name and Location of Investees (Excluding Investees in Mainland China)
January 1 to December 31, 2025
Unit: NT$ thousands
(Unless specified otherwise)
Table 7.
| Investor | Name of Investee (Notes 1 and 2) | Location | Principal business | Original investment cost | Shares held at the end of period | Current profit or loss on investee (Note 2 (2)) | Investment Gains (Losses) Recognized for Current Period (Note 2 (3)) | Remarks | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| End of current period | End of last year | Number of Shares | Percentage (%) | Carrying amount | |||||||
| CMC | EMC H | Cayman Islands | Professional investment company | $ 9,386,306 | $ 9,386,306 | 55,387 | 100.00 | $ 1,983,527 | ($ 161,390) | ($ 161,390) | Subsidiary of the Company |
| " | CIA | Cayman Islands | Professional investment company | 872,018 | 872,018 | 29,688,245 | 86.35 | 438,388 | ( 27,078) | ( 23,382) | " |
| " | CHC | Taiwan | Investment in various production businesses | 180,421 | 180,421 | 261,595,273 | 100.00 | 3,423,884 | 13,442 | 13,442 | " |
| " | CMC Entertainment | Taiwan | Film production and distribution industry | 714,888 | 714,888 | 18,956,000 | 100.00 | 138,357 | ( 31,879) | ( 31,879) | " |
| " | Transtouch | Taiwan | Production and sales of touch panels and other products | 477,203 | 480,058 | 14,205,223 | 48.67 | 309,103 | ( 4,780) | ( 4,659) | " |
| " | Deltamac | Taiwan | Sales of audio-visual CD products | 362,177 | 365,168 | 14,289,015 | 37.33 | 140,555 | ( 13,866) | ( 5,198) | " |
| " | CMC Entertainment Hub | Taiwan | Shopping mall business | 290,000 | 290,000 | 16,300,000 | 100.00 | 22,921 | ( 31,173) | ( 31,173) | " |
| " | VGmbH | Germany | Trading of storage media and electronic products | 1,031,012 | 1,031,012 | - | 100.00 | 1,156,701 | 78,687 | 78,687 | " |
| EMC H | F5 | U.S. | Professional investment company | 3,591,096 | 3,591,096 | 23,064 | 100.00 | 518,679 | ( 204,576) | - | Sub-subsidiary of the Company (Note 3) |
| " | MFLLC | U.S. | Professional investment company | 1,283,980 | 1,283,980 | - | 100.00 | 274,443 | ( 2,487) | - | " |
| " | VJP | Japan | Trading of storage media and electronic products | 16,368 | 16,368 | 5,900 | 100.00 | 70,346 | 49,668 | - | " |
| " | VAU | Australia | Trading of storage media and electronic products | 411,105 | 411,105 | 100,000 | 100.00 | 346,495 | ( 56) | - | " |
| " | VHK | Hong Kong | Trading of storage media and electronic products | 154,050 | 154,050 | 4,045,500 | 100.00 | 120,044 | ( 10,697) | - | " |
| " | Others | Others | - | - | - | - | ( 4,359) | - | - | Note 3 |
Table 7 Page 1
CMC Magnetics Corporation and Its Subsidiaries
Information on Name and Location of Investees (Excluding Investees in Mainland China)
January 1 to December 31, 2025
Unit: NT$ thousands
(Unless specified otherwise)
Table 7.
| Investor | Name of Investee (Notes 1 and 2) | Location | Principal business | Original investment cost | Shares held at the end of period | Current profit or loss on investee (Note 2 (2)) | Investment Gains (Losses) Recognized for Current Period (Note 2 (3)) | Remarks | |||
|---|---|---|---|---|---|---|---|---|---|---|---|
| End of current period | End of last year | Number of Shares | Percentage (%) | Carrying amount | |||||||
| F5 | VUS | U.S. | Trading of storage media and electronic products | $ 1,418,407 | $ 1,418,407 | - | 100.00 | $ 522,648 | ($ 204,551) | $ - | Subsidiary of F5, sub-subsidiary of the Company (Note 3) |
| VUS | Vexus | U.S. | Trading of storage media | 3 | 3 | - | 100.00 | 3 | - | -Sub-subsidiary of F5, sub-subsidiary of the Company (Note 3) | |
| CIA | SuperNet | British Virgin Islands | Professional investment company | 577,337 | 577,337 | 5,720,085 | 100.00 | 462,354 | 317 | -Sub-subsidiary of the Company (Note 3) | |
| " | Others | Others | - | - | - | - | 49,166 | - | - | Note 3 | |
| CHC | CIA | Cayman Islands | Professional investment company | 111,185 | 111,185 | 4,692,049 | 13.65 | 100,602 | ( 27,078) | - | Subsidiary of the Company (Note 3) |
| " | Vie Show Cinemas | Taiwan | Operation and management of cinemas, restaurants, and shopping malls | 74,015 | 74,015 | 29,962,500 | 29.96 | 240,759 | 157,162 | - | Investee measured using the equity method by CHC, subsidiary of the Company (Note 3) |
| " | Others | Others | - | - | - | - | 135,455 | - | - | Note 3 |
Note 1: If a public company has a foreign holding company and the consolidated financial report is the main financial report according to local laws and regulations, the disclosure of information about the foreign investee may only include the relevant information of the holding company.
Note 2: In cases other than those described in Note 1, the following information shall be provided:
(1) "Name of Investee", "Location", "Principal Business", "Original Investment Cost", and "Holdings, End of Period" shall be entered in order according to the investment situation of the (public) Company and the status of investment by each investee directly or indirectly controlled, and the relationship between each investee and the (public) Company shall be indicated in the Remarks column (e.g., a subsidiary or a sub-subsidiary).
(2) In the column "Profit or Loss on Investee", the current profit and loss on each investee shall be entered.
(3) In the column "Investment Gains or Losses Recognized for Current Period", only the profit and loss on each investee directly invested by the (public) Company and each investee measured under the equity method recognized by the Company shall be entered, and the rest of the investees are exempted from disclosed in this regard. Where the "gains and losses on subsidiaries that are invested directly are recognized for the current period," it shall be confirmed that the gains and losses on the subsidiaries have included their investment gains and losses that shall be recognized in accordance with the regulations.
Note 3: The Company did not directly recognize investment gains and losses.
Table 7 Page 2
CMC Magnetics Corporation and Its Subsidiaries
Information on Investments in Mainland China - Basic Information
January 1 to December 31, 2025
Table 8.
Unit: NTS thousands
(Unless specified otherwise)
| Name of investee in mainland China (Note 4) | Principal business | Paid-in capital | Investment method (Note 1) | Accumulated investment remitted from Taiwan, beginning of period | Amount of investment remitted or recovered in current period | Accumulated investment remitted from Taiwan, end of period | Current profit or loss on investee | The Company's direct or indirect ownership (%) | Investment Gains (Losses) Recognized for Current Period (Note 2) | Carrying amount of investment, end of period | Accumulated repatriation of investment income as of end of period | Remarks | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Remitted to mainland China | Remitted back to Taiwan | ||||||||||||
| Fortune (Jiangsu) Multimedia Co., Ltd. | Production and sales of optical discs | $ 1,345,476 | 2 | $ 1,345,476 | $ - | $ - | $1,345,476($ | 2,715) | 97.00($ | 2,634) | $ 285,860 | $ - | Note 2 (2) B |
| Fortune (Jiangsu) Electronic Materials Co., Ltd. | Production and sales of plastic boxes, boxes, baskets, and similar products | 531,053 | 2 | 531,053 | - | - | 531,053( | 2,487) | 100.00( | 2,487) | 133,014 | - | " |
| Nantong Zhongxing Multimedia Co., Ltd. | Production and sales of optical discs | 35,678 | 2 | 35,678 | - | - | 35,678( | 84) | 49.00( | 41) | 8,082 | - | " |
| Sun Biotech Limited (Nantong) | R&D and wholesale of biological probiotics | 14,786 | 2 | 14,786 | - | - | 14,786 | 2,213 | 50.00 | 1,107 | - | - | " |
| Company name | Accumulated outward remittance for investment in mainland China, end of period | Investment amount authorized by Investment Commission, MOEA | Limit on investment amount stipulated by Department of Investment Review, MOEA | ||||||||||
| CMC Magnetics Corporation | $ 2,722,590 | $ 4,149,997 | $ 11,752,390 |
Note 1: There are three types of methods for investment in mainland China. Just enter the code:
(1) Direct investment in mainland China
(2) Indirect investment in mainland China through third-region companies: Investment in companies in mainland China through EMCH.
(3) Other methods
Note 2: Investment gains (losses) recognized for the current period:
(1) If there are no investment gains (losses) recognized due to the investment still being in the development stage, it shall be indicated.
(2) The investment gains (losses) are recognized based on the three following methods, which shall be indicated:
A. The financial statements certified by international accounting firms that has partnership with CPAs of Republic of Chin
B. The financial statements that have been audited by the parent company's CPAs in Taiwan.
C. Others.
Note 3: The numbers related to this table shall be presented in NTD.
Note 4: Individual companies that have been liquidated will not be disclosed.