CMC Magnetics Corporation
Parent Company Only 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
Parent Company Only Financial Statements and Independent Auditors' Report
for the Years Ended 2025 and 2024
Table of Contents

Items	Page/No./Index
I. Cover Page	1
II. Table of Contents	2-3
III. Independent Auditors' Report	4-7
IV. Parent Company Only Balance Sheet	8-9
V. Parent Company Only Statements of Comprehensive Income	10
VI. Parent Company Only Statements of Changes in Equity	11
VII. Parent Company Only Statements of Cash Flows	12-13
VIII. Notes to Parent Company Only Financial Statements	14-84
(I) Company History	14
(II) Date and Procedure for Approval of Financial Statements	14
(III) Application of New and Amended Standards and Interpretations	14-16
(IV) Summary of Significant Accounting Policies	16-29
(V) Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty	29-30
(VI) Description of Significant Accounting Titles	30-63
(VII) Related-Party Transactions	63-67
(VIII) Pledged Assets	67
(IX) Significant Contingent Liabilities and Unrecognized Contractual Commitments	68
(X) Major Disaster Loss	68
(XI) Material Events After the Balance Sheet Date	68
(XII) Others	68-83
(XIII) Supplementary Disclosures	84
(XIV) Segment Information	84
IX. Statement of Major Accounting Subjects

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Items	Page/No./Index
Cash and cash equivalents	Statement 1
Financial assets at FVTPL - current and non-current	Statement 2
Accounts receivable	Statement 3
Inventories	Statement 4
Changes in investments accounted for using the equity method	Statement 5
Long-term borrowings	Statement 6
Operating revenue	Statement 7
Operating costs	Statement 8
Production overheads	Statement 9
Selling and marketing expenses	Statement 10
Administrative expenses	Statement 11
Research and development expenses	Statement 12
Net other income and expenses	Note 6 (27)
Finance costs	Note 6 (28)
Statement of employee benefits, depreciation, depletion, and amortization expenses of the year by function	Note 6 (29)

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Independent Auditors' Report

(2026) Financial Review Report No. 25003913

To CMC Magnetics Corporation:

Opinion

We have reviewed the accompanying parent company only balance sheets of CMC Magnetics Corporation (the "Company") as of December 31, 2025 and 2024 and the relevant parent company only statements of comprehensive income, changes in equity and cash flows for the period from January 1 to December 31, 2025 and 2024, and relevant notes, including a summary of significant accounting policies (collectively referred to as the parent company only financial statements).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its parent company only financial performance and its parent company only cash flows from January 1 to December 31, 2025 and 2024, are in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers based on our audit results and the audit reports of other certified public accountants (CPAs) (please 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. The auditor's responsibilities under these standards will be further explained in the section on the auditor's responsibility for auditing the individual financial statements. The personnel of the firm to which the auditor belongs, in accordance with the Code of Professional Ethics for Certified Public Accountants of the Republic of China, maintain independence from CMC Magnetics Corporation and fulfill other responsibilities under that code. 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 individual financial statements of CMC Magnetics Corporation for the year of 2025. These matters have been addressed in the overall audit of the individual financial statements and in the process of forming the audit opinion. The auditor does not express a separate opinion on these matters.

Key audit matters of the parent company only financial statements of the Company for the year of 2025 are stated as follows:

Accounting estimation of inventory valuation

Description

Refer to Note 4 (13) to the parent company only financial statements for accounting policies regarding inventory valuation; Note 5 (2) for uncertainty of accounting estimates and assumptions regarding inventory valuation; and Note 6 (5) for details of inventory accounting titles.

CMC Magnetics Corporation mainly manufactures and sells optical discs. Due to frequent market price fluctuations in such inventories, there is a higher risk of inventory valuation losses. CMC Magnetics Corporation's inventory holds a significant monetary value and includes many items that require manual judgment for determining obsolescence. Therefore, we have listed the estimate of CMC Magnetics Corporation's allowance for inventory valuation losses as one of the key audit matters for the current year.

Corresponding audit procedures

This matter covers the Company and some of its subsidiaries (investments accounted for using the equity method). Our major audit procedures executed are as follows:

Assess the policy adopted for its allowance for valuation loss on its inventories based on the understanding of the Company'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 Company, 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 the investee companies accounted for using the equity method in the parent company only financial statements of the Company have not been audited by our auditors, but rather by other auditors. Therefore, in our opinion on the aforementioned parent company only financial statements, the amounts presented in the financial statements of those companies are based on the audit reports issued by the other auditors. The investment amounts in the aforementioned companies accounted for using the equity method as of December 31, 2025 and 2024 were NT$868,576 thousand and NT$872,259 thousand, respectively, representing 3.22% and 3.51% of the total assets. The comprehensive losses recognized for the aforementioned companies from January 1, 2025 to December 31, 2025 and from January 1, 2024 to December 31, 2024 were NT$7,072 thousand and NT$(66,545) thousand, respectively, representing 0.37% and (54.53%) of the total comprehensive income.

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

The responsibilities of the management are to prepare the parent company only financial statements with fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and to maintain necessary internal control associated with the preparation in order to ensure that the financial statements are free from material misstatement arising from fraud or error.

In preparing the parent company only financial statements, the management is responsible for assessing the ability of the Company in continuing as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless the management intends to liquidate the Company or cease the operations without other viable alternatives.

The governance bodies of the Company (including the Audit Committee) are responsible for supervising the financial reporting process.

Auditor's Responsibilities for the Audit of the Parent Company Only Financial Statements

The purpose of the auditor's examination of the parent company only financial statements is to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an audit report. Reasonable assurance is a high-level 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 individual amounts or total amounts of misstatements are reasonably expected to influence the economic decisions of the users of the parent company only financial statements, they are considered to be material.

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 significant risks of material misstatement in the parent company only financial statements arising from fraud or error; design and implement appropriate responses to the assessed risks, and obtain sufficient and appropriate audit evidence to serve as a basis for the 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 Company's internal control.
Evaluate the appropriateness of accounting policies adopted and the reasonableness of accounting estimates and relevant disclosures made by the management.

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Based on the audit evidence obtained, conclusions are drawn regarding the appropriateness of management's use of the going concern accounting basis and the existence of significant uncertainties that may cast doubt on the ability of the Company to continue operating. If the auditor determines that such uncertainties exist, they must alert users of the parent company only financial statements in the audit report to the relevant disclosures or modify the audit opinion if the disclosures are deemed inappropriate. Our conclusions is based on the audit evidence obtained up to the date of our auditor's report. However, future events or circumstances may lead to the Company being unable to continue as a going concern.
Evaluate the overall presentation, structure, and content of the parent company only financial statements (including relevant notes), and whether the parent company only financial statements adequately present the relevant transactions and events.
Obtain sufficient and appropriate audit evidence concerning the financial information of entities within the Company in order to express an opinion on the parent company only financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion in the parent company only financial statements.

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).

From the matters communicated with the governance bodies, we have determined the key audit matters for the audit of the Company's parent company only 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
Parent Company Only Balance Sheet
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)	$ 1,573,977	6	$ 1,415,677	6
1110	Financial assets at fair value through profit or loss - current	6 (2)	7,874,197	29	6,981,986	28
1136	Financial assets at amortized cost - current	8	-	-	4,600	-
1150	Notes receivable, net	6 (4)	-	-	566	-
1170	Accounts receivable, net	6 (4)	177,382	1	230,833	1
1180	Accounts receivable - related parties, net	7	660,740	3	743,475	3
1200	Other receivables		919,160	3	151,905	1
1210	Other receivables - related parties	7	6,505	-	6,167	-
130X	Inventories	6 (5)	1,012,393	4	992,441	4
1460	Non-current assets held for sale, net	6 (12) and 8	-	-	354,713	1
1470	Other current assets	6 (9)	72,696	-	59,448	-
11XX	Total current assets		12,297,050	46	10,941,811	44
Non-current assets
1510	Financial assets at fair value through profit or loss - non-current	6 (2) and 8	3,195,991	12	2,257,180	9
1517	Financial assets at fair value through other comprehensive income - non-current	6 (3)	265,044	1	146,457	1
1535	Financial assets at amortized cost - non-current	8	4,600	-	2,400	-
1550	Investments accounted for using the equity method	6 (6) and 7	7,613,436	28	7,731,523	31
1600	Property, plant and equipment	6 (7)(11) and 8	2,257,728	8	2,381,527	9
1755	Right-of-use assets	6 (8)	-	-	1,298	-
1760	Investment properties, net	6 (10) and 8	764,811	3	783,253	3
1780	Intangible assets	6 (11)	914	-	4,606	-
1840	Deferred income tax assets	6 (29)	90,083	-	144,340	1
1900	Other non-current assets	6 (9)(13)
		(18) and 7	473,980	2	475,414	2
15XX	Total non-current assets		14,666,587	54	13,927,998	56
1XXX	Total assets		$ 26,963,637	100	$ 24,869,809	100

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CMC Magnetics Corporation
Parent Company Only Balance Sheet
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 (14)	$ 990,000	4	$ 910,000	4
2110	Short-term notes payable	6 (15)	-	-	100,000	-
2120	Financial liabilities at fair value through profit or loss - current	6 (16)	1,416	-	313	-
2130	Contract liabilities - current	6 (23)	47,806	-	51,812	-
2150	Notes payable		56	-	1,625	-
2170	Accounts payable		233,195	1	285,174	1
2180	Accounts payable - related parties	7	126	-	-	-
2200	Other payables		809,102	3	434,359	2
2220	Other payables - related parties	7	344,721	1	478,495	2
2230	Current tax liabilities		55,906	-	28,977	-
2280	Lease liabilities - current		8,459	-	9,339	-
2320	Long-term liabilities due within one year or one operating cycle	6 (17) and 8	1,520,000	6	1,198,000	5
2399	Other current liabilities - others		936	-	1,417	-
21XX	Total current liabilities		4,011,723	15	3,499,511	14
Non-current liabilities
2540	Long-term borrowings	6 (17) and 8	3,613,000	14	3,595,000	15
2570	Deferred income tax liabilities	6 (29)	36,883	-	41,078	-
2580	Lease liabilities - non-current		37,700	-	46,159	-
2600	Other non-current liabilities		13,685	-	6,724	-
25XX	Total non-current liabilities		3,701,268	14	3,688,961	15
2XXX	Total liabilities		7,712,991	29	7,188,472	29
Equity
	Share capital	6 (19)
3110	Common stock		10,893,483	40	10,893,483	44
	Capital surplus	6 (20)
3200	Capital surplus		6,432,218	24	6,784,731	27
	Retained earnings	6 (21)
3310	Legal reserve		-	-	114,221	-
3320	Special reserve		-	-	102,468	-
3350	Unappropriated earnings (accumulated deficits)		1,733,284	6	(246,493)	(1)
	Other equity
3400	Other equity	6 (22)	191,661	1	32,927	1
3XXX	Total equity		19,250,646	71	17,681,337	71
	Significant contingent liabilities and unrecognized contractual commitments	6 (17), 7, and 9
	Material events after the balance sheet date	6 (21) and 11
3X2X	Total liabilities and equity		$ 26,963,637	100	$ 24,869,809	100

The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih

CMC Magnetics Corporation
Parent Company Only Statements of Comprehensive Income
From January 1st to December 31st of 2025 and 2024

Unit: NT$ thousands
except for earnings per share (loss)

Items	Notes	2025		2024
		Amount	%	Amount	%
4000	Operating revenue	6 (23) and 7	$ 2,589,898	100	$ 2,739,059	100
5000	Operating costs	6 (5)(28)and 7	( 2,205,440 )	( 85 )	( 2,251,941 )	( 82 )
5900	Gross operating profit		384,458	15	487,118	18
5910	Unrealized sales gains		( 119,610 )	( 4 )	( 139,189 )	( 5 )
5920	Realized sales gains		139,189	5	140,847	5
5950	Gross operating profit, net		404,037	16	488,776	18
	Operating expenses	6 (28)
6100	Selling and marketing expenses	7	( 121,982 )	( 5 )	( 133,998 )	( 5 )
6200	Administrative expenses	7	( 174,199 )	( 7 )	( 143,326 )	( 5 )
6300	Research and development expenses		( 78,878 )	( 3 )	( 345,061 )	( 13 )
6450	Expected credit loss	12 (2)	( 1,580 )	-	( 22,181 )	( 1 )
6000	Total operating expenses		( 376,639 )	( 15 )	( 644,566 )	( 24 )
6900	Operating profit (losses)		27,398	1	( 155,790 )	( 6 )
	Non-operating income and expenses
7100	Interest revenue	6 (24)	7,317	-	8,829	1
7010	Other income	6 (2)(3)(25) and 7	488,636	19	373,977	14
7020	Other gains and losses	6 (2)(16)(26)	1,719,321	66	85,588	3
7050	Finance costs	6 (27)	( 156,252 )	( 6 )	( 109,398 )	( 4 )
7070	Share of profit (loss) on subsidiaries, associates, and joint ventures accounted for using equity method		( 165,552 )	( 6 )	( 458,796 )	( 17 )
7000	Total non-operating income and expenses		1,893,470	73	( 99,800 )	( 3 )
7900	Net income (loss) before tax		1,920,868	74	( 255,590 )	( 9 )
7950	Income tax expense	6 (29)	( 194,667 )	( 7 )	( 34,513 )	( 1 )
8200	Net profit (loss)		$ 1,726,201	67	($ 290,103)	( 10 )
	Other comprehensive income (net)
	Items that will not be reclassified to profit or loss
8311	Remeasurement of defined benefit plans	6 (18)	$ 9,629	-	$ 41,530	1
8316	Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income	6 (3)(22)	118,592	5	( 70,973 )	( 3 )
8330	Share of other comprehensive income on subsidiaries, associates, and joint ventures accounted for using the equity method – not reclassified to profit or loss		34,188	1	( 11,103 )	-
8349	Income tax related to items that will not be reclassified	6 (29)	( 1,926 )	-	( 8,306 )	-
8310	Sum of items that will not be reclassified to profit or loss		160,483	6	( 48,852 )	( 2 )
	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences on translating the financial statements of foreign operations	6 (22)	6,024	-	216,702	8
8380	Share of other comprehensive income on subsidiaries, associates, and joint ventures accounted for using the equity method – may be reclassified to profit or loss	6 (22)	( 690 )	-	219	-
8360	Sum of items that may be reclassified subsequently to profit or loss		5,334	-	216,921	8
8300	Other comprehensive income (net)		$ 165,817	6	$ 168,069	6
8500	Total comprehensive income for the current period		$ 1,892,018	73	($ 122,034)	( 4 )
	Earnings (Losses) per share	6 (30)
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 Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih

CMC Magnetics Corporation
Parent Company Only Statements of Changes in Equity
From January 1st to December 31st of 2025 and 2024
Unit: NT$ thousands

	Notes	Common stock	Capital surplus	Retained earnings			Other equity		Total
				Legal reserve	Special reserve	Unappropriated earnings (accumulated deficits)	Exchange differences on translating the financial statements of foreign operations	Unrealized gains or losses on financial assets at fair value through other comprehensive income
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
Net loss		-	-	-	-	(290,103)	-	-	(290,103)
Other comprehensive income (loss) for the current period	6 (3)(22)	-	-	-	-	34,176	216,921	(83,028)	168,069
Total comprehensive income for the current period		-	-	-	-	(255,927)	216,921	(83,028)	(122,034)
Appropriation of earnings for 2023:	6 (21)
Legal reserve		-	-	66,486	-	(66,486)	-	-	-
Special reserve		-	-	-	(153,322)	153,322	-	-	-
Cash dividends		-	-	-	-	(740,757)	-	-	(740,757)
Disposal of equity instruments measured at fair value through other comprehensive income	6 (22)	-	-	-	-	(1,502)	-	1,502	-
Difference between the equity price of subsidiary actually acquired or disposed of and the book value		-	64,225	-	-	-	-	-	64,225
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
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
Net profit		-	-	-	-	1,726,201	-	-	1,726,201
Other comprehensive income (loss) for the current period	6 (3)(22)	-	-	-	-	8,271	5,334	152,212	165,817
Total comprehensive income for the current period		-	-	-	-	1,734,472	5,334	152,212	1,892,018
Appropriation of earnings for 2024:	6 (21)
Legal reserve used to compensate for losses		-	-	(114,221)	-	114,221	-	-	-
Special reserve used to compensate for losses		-	-	-	(102,468)	102,468	-	-	-
Capital surplus used to compensate for losses	6 (20)(21)	-	(29,804)	-	-	29,804	-	-	-
Distribution of capital surplus in cash	6 (20)(21)	-	(326,805)	-	-	-	-	-	(326,805)
Disposal of equity instruments measured at fair value through other comprehensive income	6 (3)(22)	-	-	-	-	(1,188)	-	1,188	-
Difference between the equity price of subsidiary actually acquired or disposed of and the book value	6 (20)		4,096	-	-	-	-	-	4,096
Balance as of December 31, 2025		$ 10,893,483	$ 6,432,218	$ -	$ -	$ 1,733,284	$ 139,390	$ 52,271	$ 19,250,646

The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih

CMC Magnetics Corporation
Parent Company Only 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 the current period		$ 1,920,868	($ 255,590)
Adjustments
Adjustments for
Depreciation expenses	6 (7)(8)(28)	133,778	299,941
Amortization expenses	6 (28)	7,644	15,675
Depreciation expenses of investment properties (listed in other gains and losses)	6 (10)(26)	27,822	30,241
Expected credit loss	12 (2)	1,580	22,181
Net gains on financial assets and liabilities at fair value through profit and loss	6 (26)	( 633,854 )	( 88,599 )
Interest expenses	6 (27)	156,252	109,398
Interest revenue	6 (24)	( 7,317 )	( 8,829 )
Dividend income	6 (25)	( 418,214 )	( 304,332 )
Share of profit (loss) on subsidiaries, associates, and joint ventures accounted for using equity method		165,552	458,796
Gains on disposal of property, plant and equipment	6 (26)	( 2,450 )	( 532 )
Gains on disposal of non-current assets held for sale	6 (26)	( 1,224,008 )	-
Loss on sublease of right-of-use assets	6 (9)(26)	-	1,797
Non-financial asset impairment losses	6 (7)(11)(26)	106,475	23,100
Realized gains between associates		( 139,189 )	( 140,847 )
Unrealized gains between associates		119,610	139,189
Changes in assets/liabilities related to operating activities
Net changes in operating assets
Financial assets mandatorily at fair value through profit or loss		( 1,573,052 )	( 928,806 )
Notes receivable		572	( 434 )
Accounts receivable (including related and non-related parties)		107,331	( 63,765 )
Other receivables (including related and non-related parties)		29,808	3,412
Inventories		( 19,952 )	37,555
Other current assets		( 13,248 )	2,744
Net defined benefit assets		10,222	5,572
Net changes in operating liabilities
Financial liabilities at fair value through profit or loss		( 19,652 )	( 17,944 )
Contract liabilities		( 4,005 )	( 4,357 )
Notes and accounts payable (including related and non-related parties)		( 53,422 )	( 42,952 )
Other payables (including related and non-related parties)		( 14,585 )	( 27,909 )
Other current liabilities		( 482 )	( 1,460 )
Cash outflow from operating activities		( 1,335,916 )	( 736,755 )
Interest received		7,584	8,561
Dividends received		426,923	390,132
Interest paid		( 152,131 )	( 108,155 )
Income tax paid		( 119,602 )	( 1,082 )
Net cash outflow from operating activities		( 1,173,142 )	( 447,299 )

(Continued on the next page)

CMC Magnetics Corporation
Parent Company Only 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
Decrease in receivable financing lease payments (listed under other current assets)		$ 8,094	$ 7,607
Proceeds from acquisition of financial assets mandatorily at fair value through profit or loss		-	( 30,000 )
Proceeds from acquisition of financial assets at amortized cost		( 2,383 )	( 34,418 )
Proceeds from disposal of financial assets at amortized cost		4,783	37,529
Proceeds from disposal of financial assets at fair value through other comprehensive income		5	-
Proceeds from acquisition of investments accounted for using equity method	6 (31)	-	( 30,752 )
Proceeds from disposal of investments accounted for using the equity method	6 (20)	5,343	65,755
Proceeds from acquisition of property, plant and equipment	6 (31)	( 108,847 )	( 107,627 )
Proceeds from disposal of property, plant and equipment		4,562	551
Proceeds from acquisition of investment property		( 9,380 )	( 316 )
Proceeds from acquisition of intangible assets	6 (31)	( 720 )	( 6,361 )
Decrease in refundable deposits (listed in other non-current assets)		36	21
Increase in other non-current assets		( 17,848 )	( 11,530 )
Proceeds from disposal of non-current assets held for sale		1,595,901	-
Net cash inflow (outflow) from investing activities		1,479,546	( 109,541 )
Cash flows from financing activities
Increase in short-term borrowings	6 (32)	80,000	460,000
(Decrease) Increase in short-term notes payable	6 (32)	( 100,000 )	100,000
(Decrease) Increase in funds payable to related parties	6 (32)	( 138,921 )	146,839
Long-term borrowings taking place for current period	6 (32)	5,680,000	3,555,000
Repayment of long-term borrowings for current period	6 (32)	( 5,340,000 )	( 2,707,000 )
Repayment of principal of lease liabilities	6 (8)(32)	( 9,339 )	( 10,523 )
Increase in deposits received		6,961	202
Cash dividends distributed	6 (21)	-	( 740,757 )
Distribution of capital surplus in cash	6 (20)(21)	( 326,805 )	-
Net cash outflow from financing activities		( 148,104 )	803,761
Increase in cash and cash equivalents for current period		158,300	246,921
Cash and cash equivalents, beginning of period		1,415,677	1,168,756
Cash and cash equivalents, end of period		$ 1,573,977	$ 1,415,677

The notes attached are part of the Parent Company Only Financial Statements, and shall be read together.

Chairman: Wong, Ming-Sen
Manager: Sekiyama Takayuki
Accounting Supervisor: Lee, Yung-Chih

CMC Magnetics Corporation
Notes to Parent Company Only 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 established in the Republic of China and is primarily engaged in the manufacturing and sales of consumer electronic products such as optical discs. The Company's stock has been listed on the Taiwan Stock Exchange since February 17, 1992.

Date and Procedure for Approval of Financial Statements

The parent company only 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	Effective Date Announced by IASB
Amendments to IAS 21 "Lack of Exchangeability"	January 1, 2025

The standards and interpretations above have no significant impact on the Company's parent company only financial position and financial performance based on the Company'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:

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

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New, Revised, and Amended Standards and Interpretations	Effective Date Announced by IASB
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 Company has assessed that the standards and interpretations above have no significant influence on the Company's parent company only 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 January 1, 2027 Currency"

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.

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 main accounting policies adopted in the preparation of this parent company only financial statements are described as follows. Unless otherwise specified, the policies shall be applicable to all reporting periods presented.

a. Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

b. Basis of preparation

1) Except for the following significant items, the parent company only 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 parent company only financial statements has been in conformity with Regulations Governing the Preparation of Financial Reports by Securities Issuers, requiring the use of certain critical accounting estimates. It also requires the management to exercise its judgement in the process of applying the Company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the parent company only financial statements are disclosed in Note 5.

c. Foreign currency translation

The items listed in the Company's parent company only financial statements are measured in the currency of the main economic environment in which the Company operates (i.e. functional

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currency). The parent company only financial statements are presented in the Company's functional currency, the New Taiwan dollars.

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 Company's entities and associates 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, 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, if the Company

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still retains partial equity in the former affiliated enterprise but has lost significant influence over the foreign operating entity, the entire equity of the foreign operating entity will be treated as disposed of.

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 Company 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 interest in the foreign operation.

d. 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 Company classifies assets not meeting the aforesaid criteria into non-current assets.

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 Company classifies liabilities not meeting the aforesaid criteria into non-current liabilities.

e. 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.

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f. 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 Company's initial recognition is on a fair value basis, with relevant transaction costs recognized in profit or loss, and subsequently to fair value, and gains or losses are recognized in profit or loss.

4) When the right to receive dividends is established, the future economic benefits related to dividends may flow to the Company, and when the amount of dividends can be reliably measured, the Company recognizes dividend income in profit or loss.

g. 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 Company's financial assets measured at FVTOCI in accordance with trading conventions, are accounted for on the trade date.

3) At initial recognition, the Company measures the financial assets at fair value plus transaction costs, and subsequently measures the financial assets at fair value:

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. When the right to receive dividends is established, the future economic benefits related to dividends may flow to the Company, and when the amount of dividends can be reliably measured, the Company recognizes dividend income in profit or loss.

h. 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.

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2) The Company accounts for financial assets measured at amortized cost, which are in line with trade practices on the trade day.

3) At initial recognition, the Company measures the financial assets at fair value plus transaction costs, and subsequently adopts the effective interest method to recognize said assets as interest revenue and as impairment loss during the outstanding period according to the amortization procedure. During derecognition, the gains or losses are recognized in the profit or loss.

4) The Company’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.

i. 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 Company measures the receivable by the original invoice amount.

j. Impairment of financial assets

The Company, at each balance sheet date, considers all reasonable and corroborative information (including forward-looking one) based on the financial assets measured at amortized cost. For those with no significant increase in credit risk since initial recognition, the 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 that does not contain significant financial components, the loss allowance is measured at the lifetime expected credit losses.

k. Derecognition of financial assets

The Company 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.

l. 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.

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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.

m. 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.

n. 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.

o. Investments accounted for using the equity method/subsidiaries and associates

1) A subsidiary refers to an entity under the control of the Company. When the Company is exposed to variable returns from the participation in the entity or is entitled to said variable returns, and has the ability to affect such returns through its power over the entity, the Company controls the entity.

2) The unrealized gains and losses arising from transactions between the Company and its subsidiaries have been eliminated. The accounting policies of the subsidiaries have been adjusted as necessary and are consistent with the policies adopted by the Company.

3) The Company recognizes the profit or loss attributable to the subsidiary as current profit or loss, and recognizes the other comprehensive income attributable to the subsidiary as other comprehensive income. If the Company's recognized loss attributable to the subsidiary

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equals or exceeds the equity in the subsidiary, the Company continues to recognize the loss based on its ownership percentage.

4) 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.

5) When the Company loses control over a subsidiary, the remaining investment in the former subsidiary is remeasured at fair value and recognized as the fair value of the original recognized financial asset or the cost of the original recognized investment in an associated enterprise or joint venture. The difference between fair value and carrying amount is recognized in the current period's income. For all amounts previously recognized in other comprehensive income related to the subsidiary, the accounting treatment is the same as when the Company directly disposes of the related assets or liabilities, i.e. if the previously recognized benefit or loss was recognized in other comprehensive income, it will be reclassified to income when disposing of the related assets or liabilities. Therefore, when control over a subsidiary is lost, the benefit or loss will be reclassified from equity to income.

6) Associates refer to entities that have a significant influence on the Company without control, usually through direct or indirect ownership of more than 20% of the voting rights. The Company accounts for investments in associated companies using the equity method, recognizing them at cost upon acquisition.

7) The Company recognizes the profit or loss share of the affiliated enterprises acquired as current profit or loss, and the other comprehensive income share acquired as other comprehensive income. If the Company's loss share in any affiliated enterprise equals or exceeds its equity in that affiliated enterprise (including any other unsecured receivables), the Company does not recognize any further losses, unless the Company has incurred legal obligations, presumed obligations, or has made payments on behalf of the affiliated enterprise.

8) 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 Company's ownership percentage of the associate, the Company recognizes the change in ownership interests in the associate in "capital surplus" in proportion to its ownership.

9) The unrealized gains and losses arising from transactions between the Company and its affiliated enterprises have been eliminated in proportion to their equity interests in the affiliated enterprises. Unrealized losses are also eliminated unless evidence indicates impairment of the assets transferred in the transactions. The accounting policies of the

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affiliated enterprises have been adjusted as necessary and are consistent with those adopted by the Company.

10) When an associated company issues new shares, if the Company does not subscribe or acquire them in proportion, resulting in a significant impact on our investment ratio, the adjustment to the net equity of the shares is made in the "capital surplus" and "investment accounted for using the equity method". 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.

11) Upon loss of significant influence over an associate, the Company 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.

12) When the Company disposes of an associated enterprise and loses significant influence over it, the accounting treatment for all amounts previously recognized in other comprehensive income related to that associated enterprise will be the same as if the Company were directly disposing of the related assets or liabilities. In other words, if profits or losses previously recognized in other comprehensive income are reclassified as gains or losses upon disposal of related assets or liabilities, then when significant influence over the associated enterprise is lost, those profits or losses will be reclassified from equity to income. 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.

13) When the Company 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.

14) In accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the current profit or loss and other comprehensive income in the parent company only financial statements shall be the same as those attributable to the owners of the parent company in the financial statements prepared on a consolidated basis. The owners' equity in the parent company only financial statements shall be the same as the equity attributable to owners of the parent company in the financial statements prepared on a consolidated basis.

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p. 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 Company 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 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	2–5 years

q. 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 Company. 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 on the lease commencement date at the present value of lease payments not yet paid, discounted at the incremental borrowing rate of the Company. Lease payments are fixed payments, excluding any lease incentives receivable. Subsequently, the interest method is used to measure the lease liabilities at amortized cost. Interest expense is recognized over the lease term. When changes in lease term or lease payments are not due to contract modifications, the lease liabilities are reassessed, and the right-of-use assets are adjusted for the re-measurement amount.

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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.

Any depreciation expense shall be recognized when the useful life of the right-of-use asset or the lease term expires, whichever is earlier, based on the subsequent cost model. When the lease liability is reassessed, the remeasurement of the lease liability will be adjusted for the right-of-use asset.

r. 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.

s. Intangible assets

1) 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 5 to 10 years using the straight-line method.

2) Computer software is recognized at the cost of acquisition and amortized by the straight line method based on the estimated useful life of one year.

t. 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.

u. Impairment of non-financial assets

1) On the balance sheet date, the Company estimates the recoverable amount of assets with impairment indicators. When the recoverable amount is lower than the carrying value, an impairment loss is recognized. 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

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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. When the recoverable amount is lower than their carrying value, impairment losses are recognized. 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 identification by operating segments, distributing goodwill to cash-generating units or groups of cash-generating units expected to benefit from the entity generating the goodwill.

v. Borrowings

1) Borrowings comprise long-term and short-term borrowings from banks. When the initial recognition of the Company'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.

w. Accounts and notes payable

1) Account and notes payable refer to the debts incurred by purchase of raw materials, goods, or services on credit, and the notes payable incurred from both operating and non-operating activities.

2) The non-interest-bearing short-term notes and accounts payable are measured at initial invoice amount as the effect of discounting is immaterial.

x. Derecognition of financial liabilities

The Company derecognizes a financial liability when the obligation under the contract is performed, canceled, or expires.

y. 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

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assets and liabilities and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

z. 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.

aa. 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. Under the defined benefit plan, the net obligation is determined by discounting the amount of future welfare amount earned by employees in the current or past service, and subtracting the fair value of plan assets as of the balance sheet date from the present value of the defined benefit obligation. 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.

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3) Remuneration of employees and directors

Remuneration of employees and directors are recognized as expenses and liabilities when they are legally or presumptively required and the amounts can be reasonably estimated. Subsequent adjustments are made based on accounting estimates if there are differences between the actual distribution amounts and the estimated amounts. In the case of stock-based employee compensation, the number of shares is calculated based on the closing price of the day before the Board of Directors' resolution.

bb. Income tax

1) Income tax expense includes both current and deferred income taxes. Except for income taxes related to items included in other comprehensive income or directly included in equity, income taxes are recognized in profit or loss.

2) The Company calculates the current income tax based on the tax rates legislated or substantially legislated by the countries where the Company operates and generates taxable income as of the balance sheet date. The management periodically evaluates the status of income tax filing in accordance with the applicable income tax regulations and, when applicable, estimates the income tax liability by recording the expected tax payments to the tax authorities. The income tax on undistributed earnings, as imposed by the income tax law, is recognized as income tax expense in the year following the year in which the surplus is generated, after the surplus distribution is approved by the shareholders' meeting, reflecting the actual distribution of the surplus.

3) Deferred income taxes are recognized using the balance sheet method, based on the tax basis of assets and liabilities and the temporary differences that arise from their book amounts in the parent company only 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 individual enterprises) and does not affect accounting profit or taxable income (tax loss) at the time of the transaction, it is not recognized. Temporary differences arising from investments in subsidiaries and associated companies can be controlled as to when they are reversed, and temporary differences that are unlikely to be reversed in the foreseeable future are not 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 and loss carryforwards can be utilized. At each balance sheet date, unrecognized and recognized deferred income tax assets are re-assessed.

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cc. Share capital

Common stock are classified as equity. The net amount directly attributable to the issuance of new shares or stock options, after deducting income taxes, is recognized in equity as a deduction from the purchase price.

dd. 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.

ee. Revenue recognition

Sales

1) The Company 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 Company has no remaining performance obligations that could affect customer acceptance of the products. The risks of obsolescence and loss are transferred to the customers when the products are shipped to the designated locations, and the customers accept the products based on the sales contracts or when there is objective evidence that all acceptance criteria have been met. The point of delivery occurs when these conditions are satisfied.

2) The sales of the goods are recognized at the contract price, and the amount of sales 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 Company 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 Company's right to the consideration for contracts from customers is unconditional, except for the passage of time.

Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty

During the preparation of the parent company only financial statements, the Company's 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

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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 Company's accounting policies

None.

b. Critical accounting estimates and assumptions

Inventory valuation

1) Due to the requirement of valuing inventory at the lower of cost or net realizable value, the Company must exercise judgment and estimation to determine the net realizable value of inventory on the balance sheet date. Given the rapid technological changes, the Company assesses the amount of inventory on the balance sheet date that is subject to normal wear and tear, obsolescence, or lack of market sales value, and reduce the inventory cost 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 Company's inventory valuation was NT$1,012,393.

Description of Significant Accounting Titles

a. Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand and petty cash	$ 222	$ 278
Checks and demand deposits	1,543,755	1,299,829
Time deposit	30,000	115,570
	$ 1,573,977	$ 1,415,677

1) The Company deals with financial institutions with high credit ratings. The Company 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 Company has classified cash provided for loans and cash equivalents as financial assets measured at amortized cost - current and non-current, please refer to Note 8 for details.

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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	$ 8,038,620	$ 7,190,146
Derivative instruments	-	279
	8,038,620	7,190,425
Adjustment to valuation	(164,423)	(208,439)
	$ 7,874,197	$ 6,981,986
Non-current items:
Financial assets mandatorily at fair value through profit or loss
Listed stocks	$ 3,380,761	$ 2,412,698
Unlisted stocks and OTC companies	30,000	30,000
	3,410,761	2,442,698
Adjustment to valuation	(214,770)	(185,518)
	$ 3,195,991	$ 2,257,180

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 from valuation and disposal	$ 644,075	$ 102,135
Dividend income	408,058	292,018
Derivative instruments	8,328	4,744
	$ 1,060,461	$ 398,897

2) The Company'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
Purchasing Japanese yen and selling US dollars	US$ 1,000 thousand	2024.12.27~2025.01.24

Forward exchange agreements

The foreign exchange forward transactions made by the Company are forward transactions, in which foreign currencies are pre-purchased and pre-sold, for the purpose of avoiding the exchange rate risk of import and export prices, without hedging accounting applied.

3) For the situation in which the Company has pledged financial assets at FVTPL as collateral, please refer to Note 8 for details.

c. Financial assets at FVTOCI

Items	December 31, 2025	December 31, 2024
Non-current items:
Equity instruments
Non-listed stocks, non-OTC stocks, non-emerging stocks	$ 3,980	$ 5,880
Adjustment to valuation	261,064	140,577
	$ 265,044	$ 146,457

1) The Company 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$265,044 and NT$146,457, respectively.

2) The breakdown of financial assets at FVTOCI recognized in profit or loss and comprehensive income is as follows:

	2025	2024
Equity instruments at FVTOCI
Changes in fair value recognized in other comprehensive income	$ 118,592	($ 70,973)
Accumulated losses reclassified to retained earnings due to derecognition	($ 1,895)	$ -
Dividend income recognized in profit and loss that remains being held at the end of current period	$ 10,156	$ 12,314

3) The Company did not pledge financial assets at FVOCI as collateral.

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d. Notes and accounts receivable

	December 31, 2025	December 31, 2024
Notes receivable	$ -	$ 572
Less: Allowance for loss	-	( 6)
	$ -	$ 566
Accounts receivable	$ 221,250	$ 299,552
Less: Allowance for loss	( 43,868)	( 68,719)
	$ 177,382	$ 230,833

1) The aging analysis of accounts and notes receivable is as follows:

	December 31, 2025		December 31, 2024
	Accounts receivable	Notes receivable	Accounts receivable	Notes receivable
Not past due	$ 144,751	$ -	$ 189,094	$ 572
Overdue for 1–30 days	27,910	-	26,327	-
Overdue for 31–60 days	483	-	10,692	-
Overdue for 61–90 days	6,077	-	696	-
Overdue for 91–180 days	2,337	-	14,907	-
Overdue for more than 181 days	39,692	-	57,836	-
	$ 221,250	$ -	$ 299,552	$ 572

The aging analysis above is based on the number of days overdue.

2) The accounts receivable and notes receivable balances as of December 31, 2025 and 2024 were generated from customer contracts. Additionally, as of January 1, 2024, the notes receivable and accounts receivable balances and the allowance for loss related to customer contracts were NT$248,782 and NT$46,128, 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 Company's notes and accounts receivable is the carrying amount.

4) The Company 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.

e. Inventories

	December 31, 2025	December 31, 2024
Raw materials	$ 283,270	$ 319,939
Work-in-progress	115	253
Finished goods	206,517	183,558
Merchandise inventory	476,535	448,931
Inventory in transit	45,956	39,760
	$ 1,012,393	$ 992,441

The Company's inventory cost recognized as an expense for the current period:

	2025	2024
Cost of inventories sold	$ 2,167,658	$ 2,214,181
Unamortized fixed production overheads	17,182	31,870
Price decline loss	16,760	4,988
Others	3,840	902
	$ 2,205,440	$ 2,251,941

f. Investments accounted for using the equity method

	December 31, 2025	December 31, 2024
CHC International Investment Corporation (CHC)	$ 3,423,884	$ 3,404,547
CMC Entertainment Holding Corporation (CMC Entertainment)	138,357	169,983
Transtouch Technology Inc. (Transtouch)	309,103	311,311
CMC Entertainment Hub Corporation (CMC Entertainment Hub)	22,921	54,094
EMC Investment Holding Ltd.(EMC H)	1,983,527	2,177,983
CIA Holding Corp.(CIA)	438,388	475,977
Deltamac (Taiwan) Co., Ltd. (Deltamac (Taiwan))	140,555	144,804
Verbatim GmbH (Note)	1,156,701	992,824
	$ 7,613,436	$ 7,731,523

Note: In the fourth quarter of 2024, the Company acquired from a subsidiary EMC H 100% of equity of VGmbH, a subsidiary of EMC H. EMC H was in charge of processing capital reduction to offset the related transfer of payables. For further details, please refer to the explanation in Note 6 (31) 3.

1) For information about the Company's subsidiaries, please refer to Note 4 (3) of the Company's consolidated financial statements for the year of 2025.
2) The significant affiliated enterprises of the Company, Transtouch and Deltamac (Taiwan), are publicly traded. As of December 31, 2025 and 2024, their fair values are NT$335,954 and NT$327,246, as well as NT$271,491 and NT$488,578, respectively.

g. Property, plant and equipment

	2025
	Land	Buildings and structures	Machinery and equipment	Others	Total
January 1
Cost	$ 1,675,881	$ 1,232,189	$ 9,837,918	$ 12,443	$ 12,758,431
Accumulated depreciation and impairment	-	( 674,641)	( 9,698,431)	( 3,832)	( 10,376,904)
	$ 1,675,881	$ 557,548	$ 139,487	$ 8,611	$ 2,381,527
January 1	$ 1,675,881	$ 557,548	$ 139,487	$ 8,611	$ 2,381,527
Additions	-	16,238	87,543	13,803	117,584
Disposal	-	-	( 2,428)	-	( 2,428)
Depreciation expenses	-	( 29,876)	( 96,027)	( 6,577)	( 132,480)
Impairment loss	-	( 30,382)	( 74,037)	( 2,056)	( 106,475)
December 31	$ 1,675,881	$ 513,528	$ 54,538	$ 13,781	$ 2,257,728
December 31
Cost	$ 1,675,881	$ 1,237,863	$ 3,485,201	$ 24,906	$ 6,423,851
Accumulated depreciation and impairment	-	( 724,335)	( 3,430,663)	( 11,125)	( 4,166,123)
	$ 1,675,881	$ 513,528	$ 54,538	$ 13,781	$ 2,257,728

	2024
	Land	Buildings and structures	Machinery and equipment	Others	Total
January 1
Cost	$1,927,785	$1,948,415	$9,840,854	$14,289	$13,731,343
Accumulated
depreciation and impairment	-	(1,022,201)	(9,522,435)	(8,702)	(10,553,338)
	$1,927,785	$926,214	$318,419	$5,587	$3,178,005
January 1	$1,927,785	$926,214	$318,419	$5,587	$3,178,005
Additions	-	7,981	78,900	7,873	94,754
Disposal	-	-	(336)	-	(336)
Reclassification
(Note 1)	-	(320,635)	-	-	(320,635)
Reclassified to non-
current assets held
for sale (Note 2)	(251,904)	-	-	-	(251,904)
Depreciation
expenses	-	(38,516)	(253,612)	(4,789)	(296,917)
Impairment loss	-	(17,496)	(3,884)	(60)	(21,440)
December 31	$1,675,881	$557,548	$139,487	$8,611	$2,381,527
December 31
Cost	$1,675,881	$1,232,189	$9,837,918	$12,443	$12,758,431
Accumulated
depreciation and
impairment	-	(674,641)	(9,698,431)	(3,832)	(10,376,904)
	$1,675,881	$557,548	$139,487	$8,611	$2,381,527

1) The Company 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 (11) for details.
3) For information about the Company's pledging of property, plant and equipment as collateral, please refer to Note 8 for details.

h. Lease transaction - the lessee

1) The assets leased by the Company include land and buildings, with lease contracts typically ranging from 1 to 9 years. The lease contracts are negotiated separately and contain various terms and conditions. Except that the leased asset cannot be used as collateral for loans, no other restrictions are imposed.
2) The lease term of part of the land and buildings leased by the Company 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	$ -	$ 1,298
	2025	2024
---	---	---
	Depreciation expenses	Depreciation expenses
Land	$ 1,298	$ 2,597
Property	-	427
	$ 1,298	$ 3,024

4) In 2025 and 2024, the Company's additions to the right-of-use assets were NT$0 and NT$2,597, respectively.
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	$ 672	$ 799
Short-term lease expenses	$ 3,531	$ 2,132
Loss (Gain) from sublease of right-of-use assets (Note)	($ 774)	$ 956

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 (9) for details.

6) The Company's total cash outflows for lease payments in 2025 and 2024 were NT$13,542 and NT$13,454, respectively.

i. Lease transactions - lessor

1) The underlying assets leased out by the Company include buildings and right-of-use assets. The lease term contracted is usually for a period of 1 to 10 years. The lease contracts are negotiated individually and contain various terms and conditions.

2) In 2025 and 2024, the Company 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 dates of the undiscounted lease payments for the financing leases rented by the Company 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 adjustment information for the undiscounted lease payments and net lease investments (listed under other current and non-current assets) from the financing lease rentals of the Company 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 investment in a lease	$ 8,573	$ 37,496	$ 8,094	$ 46,069

In 2024, the Company saw 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 Company has no overdue rental receivables. Following an assessment, the potential credit risk loss is deemed to be immaterial.

6) In 2025 and 2024, the Company recognized rental income of NT$59,546 and NT$55,390, 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 Company under operating lease is as follows:

	December 31, 2025	December 31, 2024
Not exceeding 1 year	$ 84,562	$ 51,493
More than 1 year, but less than 5 years	228,707	74,584
More than 5 years	183,489	-
	$ 496,758	$ 126,077

j. Investment property

	2025
	Land	Buildings and structures	Total
January 1
Cost	$ 63,362	$ 1,643,495	$ 1,706,857
Accumulated depreciation	-	( 923,604)	( 923,604)
	$ 63,362	$ 719,891	$ 783,253
January 1	$ 63,362	$ 719,891	$ 783,253
Additions	-	9,380	9,380
Depreciation expenses	-	( 27,822)	( 27,822)
December 31	$ 63,362	$ 701,449	$ 764,811
December 31
Cost	$ 63,362	$ 1,651,345	$ 1,714,707
Accumulated depreciation	-	( 949,896)	( 949,896)
	$ 63,362	$ 701,449	$ 764,811

	2024
	Land	Buildings and structures	Total
January 1
Cost	$ 63,362	$ 1,243,823	$ 1,307,185
Accumulated depreciation	- (	711,833)	( 711,833)
	$ 63,362	$ 531,990	$ 595,352
January 1	$ 63,362	$ 531,990	$ 595,352
Additions	-	316	316
Reclassification (Note 1)	-	320,635	320,635
Reclassified to non-current assets held for sale (Note 2)	- (	102,809)	( 102,809)
Depreciation expenses	- (	30,241)	( 30,241)
December 31	$ 63,362	$ 719,891	$ 783,253
December 31
Cost	$ 63,362	$ 1,643,495	$ 1,706,857
Accumulated depreciation	- (	923,604)	( 923,604)
	$ 63,362	$ 719,891	$ 783,253

Note 1: It is mainly for the reclassification from property, plant and equipment.
Note 2: In November 2024, the Board of Directors of the Company 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	$ 56,279	$ 52,472
Direct operating expenses incurred by investment property generating rental revenue in the current period	$ 15,997	$ 19,078
Direct operating expenses incurred by investment property not generating rent revenue in current period	$ 18,827	$ 18,594

2) The fair values of the investment properties held by the Company as of December 31, 2025 and 2024 were NT$3,319,001 and NT$3,321,449, respectively, based on the evaluation results using the nearby comparable transaction prices.

3) For information on the investment property pledged as collateral, please refer to Note 8 for details.

k. Impairment of non-financial assets

1) Based on the Company's past business experience, future operational strategies, and market observations for 2025, operational synergies fell short of expectations, resulting in losses on machinery and equipment, buildings and structures, and other equipment. Accordingly, impairment losses totaling NT$106,475 have been recognized based on the assessment results.

2) In 2024, the Company has resolved to suspend the development of certain projects. Consequently, the exclusive assets associated with these projects cannot be freely disposed of in the open market. It is anticipated that the fair value, less the disposal costs, will be extremely low. Therefore, an impairment loss of NT$23,100 has been recognized, with the details 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 - 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	-
	$ 106,475	$ -	$ 23,100	$ -

3) The Company 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
Machinery and equipment	8.49%	8.42%

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Non-current assets held for sale

In November 2024, the Board of Directors of the Company 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

m. Other non-current assets

	December 31, 2025	December 31, 2024
Prepayments for equipment	$ 8,236	$ 15,573
Refundable deposits	3,340	3,376
Net receivables from financing leases (Refer to Note 6 (9))	37,496	46,069
Overdue receivables	134,221	107,784
Less: Allowance for loss	( 134,221)	( 107,784)
Net defined benefit assets - non-current	19,852	6,271
Other non-current assets - others	405,056	404,125
	$ 473,980	$ 475,414

n. Short-term borrowings

Nature of borrowings	December 31, 2025	December 31, 2024
Borrowings from financial institutions
Credit borrowings	$ 990,000	$ 910,000
Interest rate range	2.17~2.24%	2.20~2.33%

The aforementioned short-term loan limits on December 31, 2025 and 2024 have been respectively issued promissory notes in the amounts of NT$1,862,890 and NT$2,349,495 as collateral.

o. Short-term notes payable

	December 31, 2025	December 31, 2024
Commercial paper payable	$ -	$ 100,000
Interest rate	-	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$200,000 each as collateral.

p. Financial liabilities at fair value through profit or loss

Items	December 31, 2025	December 31, 2024
Current items:
Financial liabilities held for trade
Non-hedging derivative financial instruments
— Derivative instruments	$ 1,416	$ 313

1) The net losses recognized for the financial liabilities held for trading by the Company in 2025 and 2024 were NT$18,549 and NT$18,280, respectively.

2) The Company'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
Purchasing US dollars and selling Renminbi	CNY	7,046 thousand	2025.11.26~2026.01.30
Purchasing Japanese yen and selling US dollars	US$	1,000 thousand	2025.11.26~2026.01.30
“	US$	1,000 thousand	2025.12.29~2026.03.31
“	US$	1,000 thousand	2025.12.29~2026.03.31
Purchasing Euro and selling US dollars	USD	1,178 thousand	2025.12.29~2026.01.30
“	USD	1,182 thousand	2025.12.29~2026.03.31
“	USD	1,181 thousand	2025.12.29~2026.03.31
Foreign exchange swap agreement	USD	576 thousand	2025.11.26~2026.01.30
“	US$	1,700 thousand	2025.11.26~2026.01.30
	December 31, 2024
Derivative financial liabilities	Contract amount (notional principal)		Contract period
Current items:
Foreign exchange swap agreement	US$	1,700 thousand	2024.12.27~2025.02.27
“	US$	1,600 thousand	2024.12.27~2025.02.27

Forward exchange agreements

Foreign exchange swap agreement

The foreign exchange transactions made by the Company are exchange transactions between two currencies, aimed at efficiently managing the time differences in different currency requirements, and reducing exchange rate and interest rate risks, without hedging accounting applied.

q. 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:

During the contract period, the following financial ratios should be maintained and the consolidated financial statements should be reviewed annually: the current ratio should be maintained at 100% or above (inclusive); the debt ratio should not exceed 90%; the interest coverage ratio (including depreciation and amortization expenses) shall not be less than 250%; the tangible net worth should not be less than NT$12 billion.

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.

r. Pension

1) a) The Company has established a retirement scheme with definite benefits in accordance with the provisions of the Labor Standards Act. This scheme applies to the years of service of all regular employees prior to the implementation of the Labor Pension Act on July 1, 2005, as well as the subsequent years of service of employees who choose to continue to be governed by the Labor Standards Act after the implementation of the Labor Pension Act. For employees who meet the retirement conditions, the payment of retirement benefits is calculated based on years of service and the average salary of the six months prior to retirement. For years of service within 15 years (inclusive), two units are given for each full year, and for years of service exceeding 15 years, one unit is given for each full year, with a maximum accumulation of 45 units. The Company 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. In addition, before the end of each fiscal year, the Company estimates the balance of the aforementioned labor retirement reserve account. If the balance is insufficient to pay

~45~

the estimated retirement benefits for employees who are expected to meet the retirement conditions in the next fiscal year based on the aforementioned calculation, the Company will make a one-time allocation of the difference by the end of March of 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	$ 141,245	$ 140,273
Fair value of plan assets	(161,097)	(146,544)
Net defined benefit assets - non-current (listed in other non-current assets)	($ 19,852)	($ 6,271)

c) The changes in net defined benefit liabilities are as follows:

	Present value of defined benefit obligations	Fair value of plan assets	Net defined benefit (assets) liabilities
2025
Balance at January 1	$ 140,273	($ 146,544)	($ 6,271)
Service cost for the current period	201	-	201
Interest expense (revenue)	2,244	( 2,345)	( 101)
	142,718	( 148,889)	( 6,171)
Re-measurements:
Return on plan assets (not including interest revenue or expenses)
	-	( 10,414)	( 10,414)
Changes in financial assumptions	2,119	-	2,119
Experience adjustments	( 1,334)	-	( 1,334)
	785	( 10,414)	( 9,629)
Pension contributed	-	( 4,052)	( 4,052)
Pension paid	( 2,258)	2,258	-
Balance at December 31	$ 141,245	($ 161,097)	($ 19,852)

	Present value of defined benefit obligations	Fair value of plan assets	Net defined benefit liabilities
2024
Balance at January 1	$ 176,467	($ 135,636)	$ 40,831
Service cost for the current period	242	-	242
Interest expense (revenue)	2,118	( 1,628)	490
	178,827	( 137,264)	41,563
Re-measurements:
Return on plan assets (not including interest revenue or expenses)
	- (	12,573)	( 12,573)
Changes in financial assumptions	( 3,111)	- (	3,111)
Experience adjustments	( 25,846)	- (	25,846)
	( 28,957)	( 12,573)	( 41,530)
Pension contributed	- (	6,304)	( 6,304)
Pension paid	( 9,597)	9,597	-
Balance at December 31	$ 140,273	($ 146,544)	($ 6,271)

d) The Company's defined welfare retirement plan fund assets are entrusted for operation by the Bank of Taiwan in accordance with the investment and utilization plan of the fund for the year, within the prescribed ratios and amounts. The entrusted operation is carried out in accordance with Article 6 of the Regulations for the Receipt, Custody, and Utilization of Labor Retirement Funds (i.e. depositing funds in domestic and foreign financial institutions, investing in listed, over-the-counter, or private equity securities, and investing in securitized products of domestic and foreign real estate), and the related utilization is supervised by the Labor Retirement Fund Supervisory Commission. The minimum annual distribution of the fund's utilization shall not be lower than the yield calculated based on the local bank's two-year fixed deposit interest rate. If there is any shortfall, it shall be supplemented by the national treasury after approval by 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%	1.6%
Rate of future salary increase	2.0%	2.0%

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 by 0.25%	Decrease by 0.25%	Increase by 0.25%	Decrease by 0.25%
December 31, 2025
The effects on the present value of defined benefit obligations	($ 1,769)	$ 1,808	$ 1,442	($ 1,418)
December 31, 2024
The effects on the present value of defined benefit obligations	($ 1,886)	$ 1,930	$ 1,570	($ 1,543)

The sensitivity analysis above is based on analyzing the impact of a single assumption change while keeping other assumptions constant. In practice, many assumptions may be interrelated and change 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 Company plans to allocate a retirement plan payment of NT$4,021 in 2026.

g) As of December 31, 2025, the weighted average duration of the retirement plan is 5 years. The maturity analysis of the pension payments is as follows:

Not exceeding 1 year	$	17,565
More than 1 year, but less than 5 years		78,766
More than 5 years		35,872
	$	132,203

2) a) Since July 1, 2005, the Company 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 makes 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.

b) In 2025 and 2024, the Company recognized retirement benefit costs in accordance with the above-mentioned retirement benefit regulations, amounting to NT$12,029 and NT$13,898, respectively.

s. 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.

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.

t. 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.

~49~

	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
Capital surplus 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 Company sold a portion of its subsidiary's equity to non-controlling interests in the public market, with a disposal price of NT$5,343 and NT$65,755, respectively. This transaction represents an equity transaction among the Group's owners. Therefore, this transaction increases non-controlling interests by NT$1,985 and NT$15,466, 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$3,358 and NT$50,289, respectively. In addition, in 2025 and 2024, some subsidiaries sold the equity of other subsidiaries to non-controlling interests, causing the capital surplus to increase by NT$738 and NT$13,936, respectively.

u. 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 many 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.

d) 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.

e) 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.

v. Other equity items

	2025
	Foreign currency translation	Unrealized valuation gains and losses	Total
January 1	$ 134,056	($ 101,129)	$ 32,927
Adjustment to valuation:
— Parent company	-	118,592	118,592
— Subsidiaries and associates	-	33,620	33,620
Reclassified from valuation adjustment to retained earnings
— Parent company	-	1,895	1,895
— Subsidiaries	-	( 707)	( 707)
Foreign currency translation difference:
— Parent company	6,024	-	6,024
— Subsidiaries and associates	( 690)	-	( 690)
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)
Adjustment to valuation:
— Parent company	-	( 70,973)	( 70,973)
— Subsidiaries and associates	-	( 12,055)	( 12,055)
Reclassified from valuation adjustment to retained earnings
— Subsidiaries	-	1,502	1,502

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	2024
	Foreign currency translation	Unrealized valuation gains and losses	Total
Foreign currency translation difference:
— Parent company	216,702	-	216,702
— Subsidiaries and associates	219	-	219
December 31	$ 134,056	($ 101,129)	$ 32,927

w. Operating revenue

	2025	2024
Revenue from customer contracts	$ 2,589,898	$ 2,739,059

1) Breakdown of revenue from customer contracts

The Company's revenue comes from the provision of goods that transferred at a certain point in time. The revenue can be broken down into the following main product lines:

	2025
	Storage media	Others	Total
Timing of revenue recognition
Revenue recognized at a specific timing	$ 2,497,528	$ 92,370	$ 2,589,898
	2024
	Storage media	Others	Total
Timing of revenue recognition
Revenue recognized at a specific timing	$ 2,663,022	$ 76,037	$ 2,739,059

2) Contract liabilities

a) Contract liabilities related to revenue from customer contracts recognized by the Company are as follows:

	December 31, 2025	December 31, 2024	January 1, 2024
Contract liabilities:
Advance sales receipts	$ 47,806	$ 51,812	$ 56,169

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 contracts	$ 45,221	$ 49,261

x. Interest revenue

	2025	2024
Interests on bank deposits	$ 6,467	$ 7,786
Interest revenue from financial assets at amortized cost - interest revenue	76	202
Other (please refer to Note 6 (9))	774	841
	$ 7,317	$ 8,829

y. Other income

	2025	2024
Rental income (please refer to Note 6 (9))	$ 59,546	$ 55,390
Dividend income	418,214	304,332
Other income	10,876	14,255
	$ 488,636	$ 373,977

z. Other gains and losses

	2025	2024
Net gains on financial assets at fair value through profit or loss (FVTPL)	$ 652,403	$ 106,879
Net losses on financial liabilities at fair value through profit or loss (FVTPL)	(18,549)	(18,280)
Net foreign currency exchange gains	67	55,687
Gains on disposal of property, plant and equipment	2,450	532
Gains on disposal of non-current assets held for sale	1,224,008	-
Non-financial asset impairment losses (please refer to Note 6 (11))	(106,475)	(23,100)
Depreciation expenses of investment property	(27,822)	(30,241)
Loss on sublease of right-of-use assets (please refer to Note 6 (9))	-	(1,797)
Other expenses	(6,761)	(4,092)
	$ 1,719,321	$ 85,588

aa. Finance costs

	2025	2024
Interest expenses:
Bank borrowings	$ 149,850	$ 108,342
Others	825	911
Borrowing facility management expense	5,577	145
	$ 156,252	$ 109,398

bb. Employee benefit, depreciation, and amortization expenses

In 2025 and 2024, the employee benefit, depreciation, and amortization expenses incurred by the Company are summarized as follows by function:

Functional Category Nature	2025
	Operating costs	Operating expenses	Total
Employee benefit expenses
Salaries and wages	$ 266,024	$ 95,801	$ 361,825
Labor and health insurance premiums	28,489	7,179	35,668
Pension expenses	8,975	3,154	12,129
Remuneration of directors	-	8,280	8,280
Other personnel expenses	15,184	1,433	16,617
Depreciation expenses	93,384	40,394	133,778
Amortization expenses	3,254	4,390	7,644
Functional Category Nature	2024
---	---	---	---
	Operating costs	Operating expenses	Total
Employee benefit expenses
Salaries and wages	$ 263,095	$ 97,828	$ 360,923
Labor and health insurance premiums	29,111	10,513	39,624
Pension expenses	9,968	4,662	14,630
Remuneration of directors	-	2,040	2,040
Other personnel expenses	14,841	3,995	18,836
Depreciation expenses	167,095	132,846	299,941
Amortization expenses	2,123	13,552	15,675

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 NT$20,000 and NT$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.

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.

5) As of 2025 and 2024, the number of employees was 493 and 553, respectively. Among them, the number of non-executive directors who were not concurrently employed in 2025 and 2024 was 7 each.

6) The Company's stock has been listed on the Taiwan Stock Exchange, so the following information is additionally disclosed:

a) The average employee welfare expenses for 2025 and 2024 were NT$877 and NT$795, respectively.

b) The average employee remuneration expenses for 2025 and 2024 were NT$744 and NT$661, respectively.

c) The average employee salary adjustment is 12.6%.

d) The Company has set up an Audit Committee in 2025 and 2024, so there was no remuneration for supervisors.

e) The Company's salary and remuneration policy:

Directors and Managers:

i. A remuneration committee is set up to effectively measure the overall salary and remuneration of the Company's directors and managers.

ii. Managerial compensation includes fixed salary and employee rewards, with salary being based on industry standards as well as job title, position level, education, professional skills, and responsibilities.

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Employee:

i. The overall salary and remuneration level of employees is based on external competitiveness and internal fairness with the aim of effectively attracting and retaining talents.
ii. Employee salary and remuneration is linked with the performance management system to motivate employees to develop, and drive the Company's positive development.
iii. The Company's long-term and short-term goals, individual dedication time, positions held, and overall work performance are connected to motivate employees.

cc. Income tax

1) Income tax expense

a) Components of income tax expense:

	2025	2024
Current income tax:
Income tax incurred in current period	$ 145,127	$ 30,059
Income tax underestimates for prior years	1,404	-
Total current income tax	$ 146,531	$ 30,059
Deferred income tax:
Initial recognition and reversal of temporary differences	48,136	4,454
Income tax expense	$ 194,667	$ 34,513

b) The amount of income tax related to other comprehensive income:

	2025	2024
Remeasurement of defined benefit obligations	$ 1,926	$ 8,306

2) Reconciliation between income tax expense and accounting profit

	2025	2024
Income tax calculated based on income before tax and statutory tax rate	$ 384,174	($ 51,118)
Items to be adjusted as required by tax regulations	32,879	1,440
Items exempt from taxation according to the tax law	(456,502)	(248,804)
Unrealized gains or losses on financial assets that are not taxable	(2,677)	170,835

	2025	2024
Temporary differences not recognized in deferred income tax assets	99,441	104,010
Taxable loss not recognized in deferred income tax assets	13,333	34,588
Income tax underestimates for prior years	1,404	-
Change in realizability evaluation of deferred income tax liabilities	(63)	(6,497)
Income tax effects of alternative minimum tax	56,481	30,059
Land value increment tax on the land sold	66,197	-
Income tax expense	$194,667	$34,513

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	Organizational restructuring	December 31
Deferred income tax assets:
- Temporary differences:
Over-limit of allowance for loss	$ 33,112	($ 11,205)	$ -	$ -	$ 21,907
Inventory valuation loss	32,653	( 9,250)	-	-	23,403
Compensation for unused annual leave	3,897	( 1,478)	-	-	2,419
Unrealized exchange loss	3,955	( 2,721)	-	-	1,234
Remeasurement of defined benefit obligations	199	-	( 199)	-	-
Unrealized sales gains	27,838	( 12,289)	-	-	15,549
CFC investment returns	10,805	( 3,782)	-	-	7,023
- Tax losses	31,881	( 13,333)	-	-	18,548
Subtotal	$ 144,340	($ 54,058)	($ 199)	$ -	$ 90,083
Deferred income tax liabilities:
- Temporary differences:
Provision for land	($ 21,379)	$ 21,379	$ -	$ -	$ -

	2025
	January 1	Recognized in profit or loss	Recognized in other comprehensive income	Organizational restructuring	December 31
value increment tax
Remeasurement of defined benefit obligations	-	-	(1,727)	-	($1,727)
Others	(19,699)	(15,457)	-	-	(35,156)
Subtotal	($41,078)	$5,922	($1,727)	$-	($36,883)
Total	$103,262	($48,136)	($1,926)	$-	$53,200
	2024
	January 1	Recognized in profit or loss	Recognized in other comprehensive income	Organizational restructuring	December 31
Deferred income tax assets:
- Temporary differences:
Over-limit of allowance for loss	$28,836	$4,276	$-	$-	$33,112
Inventory valuation loss	31,655	998	-	-	32,653
Compensation for unused annual leave	4,038	(141)	-	-	3,897
Unrealized exchange loss	10,464	(6,509)	-	-	3,955
Remeasurement of defined benefit obligations	8,505	-	(8,306)	-	199
Unrealized sales gains	28,170	(332)	-	-	27,838
CFC investment returns	-	10,805	-	-	10,805
- Tax losses	36,331	(4,450)	-	-	31,881
Subtotal	$147,999	$4,647	($8,306)	$-	$144,340
Deferred income tax liabilities:
- Temporary differences:
Provision for land value increment tax	($21,379)	$-	$-	$-	($21,379)
Others	(4,287)	(9,101)	-	(6,311)	(19,699)
Subtotal	($25,666)	($9,101)	$-	($6,311)	($41,078)
Total	$122,333	($4,454)	($8,306)	($6,311)	$103,262

4) The validity period of the Company'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
Fiscal year 2016	Approved amount	$ 2,413,223	$ 2,413,223	Fiscal year 2026
Fiscal year 2017	"	570,239	570,239	Fiscal year 2027
Fiscal year 2018	"	542,996	525,620	Fiscal year 2028
Fiscal year 2021	"	99,563	63,304	Fiscal year 2031
Fiscal year 2022	"	571,783	532,679	Fiscal year 2032
Fiscal year 2023	"	1,728,134	1,728,134	Fiscal year 2033
		$ 5,925,938	$ 5,833,199

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
Fiscal year 2015	Approved amount	$ 1,242,438	$ 1,199,044	Fiscal year 2025
Fiscal year 2016	"	2,413,223	2,364,172	Fiscal year 2026
Fiscal year 2017	"	570,239	541,040	Fiscal year 2027
Fiscal year 2018	"	542,996	519,517	Fiscal year 2028
Fiscal year 2021	"	95,706	81,423	Fiscal year 2031
Fiscal year 2022	"	570,212	570,212	Fiscal year 2032
Fiscal year 2023	Declared amount	1,727,894	1,727,894	Fiscal year 2033
		$ 7,162,708	$ 7,003,302

5) Deductible temporary differences that are not recognized in deferred income tax assets:

	December 31, 2025	December 31, 2024
Deductible temporary differences	$ 9,437,534	$ 8,940,470

6) The profit-seeking enterprise income tax returns filed by the Company up to 2023 have been approved by the tax collection authorities.

dd. Earnings (Losses) per share

	2025
	Amount after tax	Weighted average number of outstanding shares (thousand shares)	Earnings per share (NT$)
Basic earnings per share
Net profit	$ 1,726,201	1,089,438	$ 1.58
Diluted earnings per share
Net profit	1,726,201	1,089,438
Potential effect of dilutive ordinary shares
Employee compensation	-	1,852
Current net profit plus potential effect of ordinary shares	$ 1,726,201	1,091,290	$ 1.58
	2024
	Amount after tax	Weighted average number of outstanding shares (thousand shares)	Loss per share (NT$)
Basic and diluted loss per share
Net loss	($ 290,103)	1,089,348	($ 0.27)

ee. Additional information on cash flows

Investing activities with only partial cash payments:

1) Property, plant and equipment:

	2025		2024
Acquisition of property, plant and equipment	$	117,584	$	94,754
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	(	20,927)	(	19,527)
Cash paid for current period	$	108,847	$	107,627

Note: The prepaid equipment payments are listed under "Other non-current assets," while the payables for equipment payments are listed under "Other payables."

2) Intangible assets:

	2025	2024
Acquisition of intangible assets	$ 730	$ 6,413
Add: Payable, beginning of period	720	668
Less: Payable, end of period	( 730)	( 720)
Cash paid for current period	$ 720	$ 6,361

3) Investments accounted for using the equity method:

	2025	2024
Acquisition of investments accounted for using the equity method - CMC Entertainment Hub	$ -	$ 30,000
Acquisition of investments accounted for using the equity method- VGmbH	-	1,072,293
Less: Capital reduction of subsidiary EMC H to offset share payments	-	( 1,067,549)
Exchange rate difference	-	( 3,992)
Cash paid for current period	$ -	$ 30,752

ff. 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	Funds payable to related parties	Total liabilities from financing activities
January 1	$910,000	$100,000	$4,793,000	$55,498	$475,383	$6,333,881
Changes in cash flow from financing activities	80,000	(100,000)	340,000	(9,339)	(138,921)	171,740
December 31	$990,000	$ -	$5,133,000	$46,159	$336,462	$6,505,621

~63~

	2024
	Short-term borrowings	Short-term notes payable	Long-term borrowings (including due within one year or one operating cycle)	Lease liabilities	Funds payable to related parties	Total liabilities from financing activities
January 1	$450,000	$ -	$3,945,000	$63,424	$328,544	$4,786,968
Changes in cash flow from financing activities	460,000	100,000	848,000	(10,523)	146,839	1,544,316
Other non-cash changes	-	-	-	2,597	-	2,597
December 31	$910,000	$100,000	$4,793,000	$55,498	$475,383	$6,333,881

7. 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 Company
Transtouch Technology Inc. (Transtouch)	Subsidiaries
Deltamac (Taiwan) Co., Ltd. (Deltamac (Taiwan))	〃
CHC International Investment Corporation (CHC)	〃
CMC Entertainment Holding Corporation (CMC Entertainment)	〃
CMC Entertainment Hub Corporation (CMC Entertainment Hub)	〃
Fortune (Jiangsu) Multimedia Co., Ltd. (Fortune (Jiangsu) Multimedia)	Sub-subsidiary
TAIWANET.COM Corporation (TAIWANET.COM)	〃
Jet-Thai Hi-Tech Co., Ltd. (Jet-Thai) (Note)	〃
EMC Investment Holding Ltd. (EMC H)	Subsidiaries
Verbatim GmbH (VGmbH)	〃
Verbatim Americas LLC. (VUS)	Subsidiary of sub-subsidiary
Verbatim Australia Pty. Ltd. (VAU)	Sub-subsidiary
Verbatim (Hong Kong) Limited (VHK)	〃
Verbatim Japan Ltd. (VJP)	〃
Super Net Holding Ltd.(Super Net)	〃
Vie Show Cinemas Co., Ltd. (Vie Show Cinemas)	Associates

Note: The liquidation was completed in October 2024.

c. Significant transactions with related parties

1) Operating revenue

	2025	2024
Sale of goods:
Subsidiary - VJP	$ 640,300	$ 703,705
— VUS	338,672	428,290
— VGmbH	296,215	239,516
— Others	248,196	308,487
	$ 1,523,383	$ 1,679,998

The transaction prices between the Company and related parties are comparable to those with non-related parties. For some foreign subsidiaries, the payment terms are set at 75 to 120 days after the delivery of goods; however, for other foreign subsidiaries, the payment terms extend to 150 to 180 days after delivery, which is slightly longer than the terms for general customers. The payment term for general overseas customers is 30 to 120 days after the delivery of goods, and for general domestic customers, it is O/A with net 30–120 days.

2) Purchases

	2025	2024
Purchases of goods:
Subsidiaries	$ 499	$ 728

The goods are purchased from subsidiaries in accordance with general business terms and conditions.

3) Accounts receivable

	December 31, 2025	December 31, 2024
Subsidiary - VJP	$ 337,856	$ 383,076
— VUS	142,930	188,548
— Fortune (Jiangsu)
Multimedia	96,331	97,063
— VGmbH	70,924	61,255
— Others	12,699	13,533
	$ 660,740	$ 743,475

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 O/A with net 60–120 days. There is no mortgage and interest borne on receivables.

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4) Accounts payable

	December 31, 2025	December 31, 2024
Subsidiaries	$ 126	$ -

Accounts payable to related parties mainly come from purchase transactions and are due 90 days after the date of delivery of goods. There is no interest borne on accounts payable.

5) Asset transactions:

a) Acquisition of financial assets

The Company did not acquire any financial assets in 2025.

	Financial statement account	Number of shares traded (shares)	Traded objects	2024
				Proceeds from acquisition
Subsidiary - EMC H	Investments accounted for using the equity method	25,565	VGmbH	$ 1,072,293
Subsidiary - CMC Entertainment Hub	“	3,000,000 Entertainment Hub		30,000
				$ 1,102,293

b) Disposal of financial assets

The Company did not dispose of financial assets to related parties in 2025.

	Financial statement account	Number of shares traded (shares)	Traded objects	2024
				Proceeds from disposal
Subsidiary - EMC H	Investments accounted for using the equity method	6,140	EMC H	$ 1,067,549

Note: In November 2024, the Company acquired 100% equity of the sub-subsidiary VGmbH from the subsidiary EMC H for a purchase price of NT$1,072,293. Subsequently, EMC H conducted a cash reduction, refunding NT$1,067,549. Therefore, the Company paid NT$752 to the subsidiary EMC H after considering the exchange difference of NT$3,992; please refer to Note 6 (31) for details.

c) Acquisition of other assets

	2025		2024
	Financial statement account	Proceeds from acquisition	Proceeds from acquisition
Subsidiary - VJP	Machinery and equipment	$ 8,503	$	-
— TAIWANET.COM	Other non-current assets	170		509
— Others	”	-		47
		$ 8,673	$	556

6) Operating expenses

	2025	2024
Subsidiaries	$ 53,704	$ 63,539

The main operating expense of the subsidiary is advertising expenses.

7) Other income

a) Rental income

	2025	2024
Subsidiary - Transtouch	$ 17,505	$ 20,479
— Others	3,236	3,215
	$ 20,741	$ 23,694

b) Other income

	2025	2024
Subsidiaries	$ 8,537	$ 7,817

8) Lending of funds to related parties

Borrowing from related parties

Year-end balance (listed under other payables - related parties)

	December 31, 2025	December 31, 2024
Subsidiary - SuperNet	$ 28,301	$ 154,090
— EMC H	308,161	321,293
	$ 336,462	$ 475,383

The loan from the subsidiary has not accrued interest.

9) Other receivables

	December 31, 2025	December 31, 2024
Subsidiaries	$ 6,505	$ 6,167

For other receivables from subsidiaries, they are mainly for the income from rent receivable, receipts under custody and payment on behalf of others.

10) Other payables

	December 31, 2025	December 31, 2024
Subsidiaries	$ 8,259	$ 3,112

The other payables to the subsidiary mainly consist of advertising expenses and entertainment expenses payable.

11) Others

In 2025, the Company received cash dividends of NT$9,635 from its subsidiary VGmbH. In 2024, the Company received cash dividends of NT$88,380 from its subsidiary CHC.

d. Information on the remunerations of the key management

	2025	2024
Salaries and other short-term employee benefits	$ 21,989	$ 19,148
Post-employment benefits	350	350
	$ 22,339	$ 19,498

Pledged assets

Details on the Company's assets pledged 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)	$ 4,600	$ 7,000	Bank borrowings
Listed stocks (listed in financial assets at FVTPL- non-current)	3,149,920	2,227,180	//
Property, plant and equipment	2,075,477	2,091,395	//
Investment property	175,442	182,752	//
Non-current assets held for sale	-	232,265	//
	$ 5,405,439	$ 4,740,592

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Significant contingent liabilities and unrecognized contractual commitments

a. Contingencies: N/A.

b. Commitments:

1) Capital expenditure for contracts signed but not yet effective

	December 31, 2025	December 31, 2024
Property, plant and equipment	$ 2,922	$ 10,196

2) The Company has signed a licensing agreement for optical disc products with HP Inc. and One-Blue LLC, and will pay royalties to the company based on the sales volume of the relevant products or in installments based on the total amount.

3) Unused amount from letters of credit issued

	December 31, 2025	Unit: NT$ thousands
USD	$ 525	$ 15
NTD	46,282	-

Major Disaster Loss

None.

Material Events After the Balance Sheet Date

Please refer to Note 6 (21) 6 and Note 6 (19) 2 for the earnings distribution proposal and cash capital reduction for 2025 proposed by the Board of Directors on March 12, 2026.

Others

a. Capital management

The Company's capital management objectives are to ensure that the Company can continue as a going concern, maintain the best capital structure to reduce capital cost, 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)

	December 31, 2025	December 31, 2024
Financial assets mandatorily at fair value through profit or loss	$ 11,070,188	$ 9,239,166
Financial assets at FVTOCI
Investment in designated equity instruments selected	$ 265,044	$ 146,457
Financial assets measured at amortized cost/loans and receivables
Cash and cash equivalents	$ 1,573,977	$ 1,415,677
Financial assets at amortized cost - current and non-current	4,600	7,000
Notes receivable	-	566
Accounts receivable (including related parties)	838,122	974,308
Finance lease receivables (listed in other current and non-current assets)	46,069	54,163
Other receivables (including related parties)	925,665	158,072
Refundable deposits (listed in other non-current assets)	3,340	3,376
	$ 3,391,773	$ 2,613,162

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	$ 990,000	$ 910,000
Short-term notes payable	-	100,000
Notes payable	56	1,625
Accounts payable (including related parties)	233,321	285,174
Other payables (including related parties)	1,153,823	912,854
Long-term borrowing (including due within one year or one operating cycle)	5,133,000	4,793,000
Deposits received (listed in other non-current liabilities)	13,685	6,724
	$ 7,523,885	$ 7,009,377
Lease liabilities	$ 46,159	$ 55,498

2) Risk management policy

a) The Company's daily operations 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 Company, the Company engages in forward foreign exchange contracts and foreign exchange swap contracts to avoid exchange rate risk. The derivatives traded by the Company are for the purpose of hedging risks and are not used for trading or speculation.

b) Risk management is carried out by the Company finance department in accordance with the policies approved by the Board of Directors. The Company's Finance Department is responsible for identifying, evaluating, and avoiding financial risks through close collaboration with the Company'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 Note 6 (2) and 6 (16) in detail.

3) Nature and level of material financial risks

a) Market risk

Exchange rate risk

i. The Company operates its business transnationally, so it is subject to the exchange rate risk arising from transactions in currencies different from the functional currencies (primarily USD, EUR and CNY) used by the Company. The exchange rate risk arises from future business transactions and assets and liabilities recognized.

ii. The management of the Company has established policies to regulate the Company's exchange rate risk in relation to its functional currency. The Finance Department shall hedge against the overall exchange rate risk. 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.

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iii. The Company uses forward foreign exchange contracts and foreign exchange swap contracts to hedge against exchange rate risk while hedging accounting is not applied.

iv. The Company's business involves a number of non-functional currencies (the functional currency of the Company is NTD). 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	$ 29,018	31.445	$ 912,471
CNY: NTD	28,334	4.500	127,503
Non-monetary items
USD: NTD	$ 77,021	31.445	$ 2,421,915
EUR: NTD	31,313	36.940	1,156,701
Financial liabilities
Monetary items
USD: NTD	$ 14,512	31.445	$ 456,330
	December 31, 2024
	Foreign currencies (thousand)	Exchange rate	Carrying amount (NTD)
(Foreign currency: Functional currency)
Financial assets
Monetary items
USD: NTD	$ 32,806	32.785	$ 1,075,545
CNY: NTD	40,667	4.484	182,351
Non-monetary items
USD: NTD	$ 85,660	32.785	$ 2,808,363
EUR: NTD	30,317	34.140	$ 1,035,022
Financial liabilities
Monetary items
USD: NTD	$ 19,793	32.785	$ 648,914

v. The total exchange gains (realized and unrealized) of the Company's monetary items, which are significantly affected by exchange rate fluctuations, amounted to NT$67 and NT$55,687 in 2025 and 2024, respectively.

vi. The Company'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%	$ 9,125	$ -
CNY: NTD	1%	1,275	$ -
Financial liabilities
Monetary items
USD: NTD	1%	4,563	$ -
	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%	$ 10,755	$ -
CNY: NTD	1%	1,824	$ -
Financial liabilities
Monetary items
USD: NTD	1%	6,489	$ -

Price risk

i. The Company'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 Company diversifies its portfolio. Diversification of the portfolio is conducted in accordance with limits set by the Company.

ii. The Company primarily invests in equity instruments and open-end funds issued by domestic companies, and the price of such equity instruments is affected by the uncertainty of the future value of the investment target. If the price of said equity instruments rose or fell by 1%, with all other factors remaining unchanged, the net income (loss) after tax for 2025 and 2024 would have increased or decreased by NT$110,702 and NT$92,389, respectively, due to the gains or losses on equity instruments at FVTPL, and the other comprehensive income would have increased or decreased by NT$2,650 and NT$1,465, 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 Company's interest rate risk mainly comes from long-term borrowings issued at floating interest rates, exposing the Company to the interest rate risk of cash flow. In 2025 and 2024, the Company's loans taken out at floating interest rates were mainly denominated in NTD.

ii. The Company's loans are measured at amortized cost and the annual interest rate will be repriced periodically according to the contracts. Therefore, the Company 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 (loss) 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 Company is the risk of financial loss suffered by the Company 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 Company has established credit risk management from the Company'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, the Company 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

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Directors based on internal or external ratings, and the drawdown of credit limits is regularly monitored.

iii. In accordance with our credit risk management procedures, when contract payments exceed 300 days beyond the agreed payment terms, it is considered a default.

iv. The Company 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:

v. 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 Company 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 Company writes off the amount of financial assets that cannot be reasonably expected to be recovered. However, the Company will continue to carry out the legal recourse procedures to preserve the creditor's rights. In 2025 and 2024, the Company had no claims that had been written off nor recourse activities underway.

viii. i) The Company 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	9.2%	$ 13,996	($ 1,280)	$ 12,716
Overdue for 1–30 days	30.0%	1,331	( 399)	932
Overdue for 31–60 days	32.1%	483	( 155)	328
Overdue for 61–90 days	36.2%	6,077	( 2,199)	3,878
Overdue for 91–180 days	43.31%~59.38%	2,337	( 1,178)	1,159
Overdue for more than 181 days	69.16%~100%	39,692	( 38,343)	1,349
		$ 63,916	($ 43,554)	$ 20,362
	Expected loss rate	Total carrying amount	Loss allowance	Total

December 31, 2024

Not past due	7.7%	$ 19,433	($ 2,520)	$ 16,913
Overdue for 1–30 days	24.9%	2,820	( 1,376)	1,444
Overdue for 31–60 days	30.2%	9,990	( 3,361)	6,629
Overdue for 61–90 days	33.2%	696	( 231)	465
Overdue for 91–180 days	40.4%~56.8%	14,907	( 6,722)	8,185
Overdue for more than 181 days	68.8%~100%	57,836	( 54,121)	3,715
		$ 105,682	($ 68,331)	$ 37,351

ii) 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$157,334 and NT$194,442, respectively, with allowances for losses of NT$314 and NT$394 respectively.

iii) For customers in the excellent credit group (related parties), as of December 31, 2025 and 2024, the total value of accounts receivable is NT$660,740 and NT$743,475, respectively. Thanks to the fact that 12-month expected credit impairment is not material, the loss allowance is both NT$0.

iv) Based on historical experience, the Company conducts individual assessments for customers with higher credit risk and calculates the expected credit loss at 100%. As of December 31, 2025, and 2024, the total amounts classified as receivables under collection and loss allowance were NT$134,221 and NT$107,784, respectively.

v) The total carrying value of finance lease receivables (please refer to Note 6 (9)) 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.

vi) The financial assets held by the Company, measured at amortized cost, consist of time deposits with original maturities exceeding three months, as well as restricted bank deposits and time deposits. There are no significant anomalies in the credit risk of the counterparties.

ix. The table of the changes in the Company's simplified loss allowance for notes and accounts receivable, other receivables (including related parties), and overdue receivables is as follows:

	2025
	Notes and accounts receivable	Other receivables (including related parties)	Overdue receivables	Total
January 1	$ 68,725	$ 8,420	$ 107,784	$ 184,929
Impairment loss provision	1,996	-	-	1,996
Reversal of impairment loss	-	- (	416)	( 416)
Reclassification	( 26,853)	-	26,853	-
December 31	$ 43,868	$ 8,420	$ 134,221	$ 186,509
	2024
	Notes and accounts receivable	Other receivables (including related parties)	Overdue receivables	Total
January 1	$ 46,128	$ 8,420	$ 108,200	$ 162,748
Impairment loss provision	22,597	-	-	22,597
Reversal of impairment loss	-	- (	416)	( 416)
December 31	$ 68,725	$ 8,420	$ 107,784	$ 184,929

In the losses recognized in 2025 and 2024, the impairment (losses) gains arising from receivables from customer contracts were NT$1,580 and NT$22,181, respectively.

c) Liquidity risk

i. The cash flow forecast is executed by each operating entity in the Company and is compiled by the Company's Finance Department. The Company's Finance Department monitors the forecast of the Company's liquidity requirements to ensure that it has sufficient funds to meet operational needs.

ii. The following table shows the Company'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)	$ 991,168	$ -	$ -	$ -
Notes payable	56	-	-	-
Accounts payable (including related parties)	233,321	-	-	-
Other payables (including related parties)	1,153,823	-	-	-
Lease liabilities	9,009	9,120	29,640	-
Long-term borrowings (including due within one year or one operating cycle and estimated interest)	1,624,543	2,892,351	777,524	-
Deposits received (listed in other non-current liabilities)	-	-	4,925	8,760
Derivative financial liabilities
Forward exchange agreements	$ 1,004	$ -	$ -	$ -
Foreign exchange swap agreement	412	-	-	-

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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) $ 912,538 $ - $ - $ - $ -
Short-term notes payable 100,000 - - -
Notes payable 1,625
Accounts payable 285,174 - - -
Other payables (including related parties) 912,854 - - -
Lease liabilities 10,011 10,326 36,480 2,280
Long-term borrowings (including due within one year or one operating cycle and estimated interest) 1,298,166 3,442,228 196,134 -
Deposits received (listed in other non-current liabilities) - - 4,402 2,322
Derivative financial liabilities
Foreign exchange swap agreement $ 313 $ - $ - $ -

iii. The details of the unused loan limits of the Company are as follows:

	December 31, 2025	December 31, 2024
Floating interest rate
Expires within one year	$ 380,000	$ 1,681,495
Expires after more than one year	1,547,000	825,000
	$ 1,927,000	$ 2,506,495

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 and beneficiary certificates invested by the Company 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 Company belongs to this level.

Level 3: Unobservable asset or liability inputs. The equity instruments without active markets invested by the Company belong to this level.

2) For information regarding the fair value of investment properties measured at cost, please refer to Note 6 (10) for details.

3) Financial instruments not measured at fair value

The carrying amounts of the Company'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 receivables (listed in other current and non-current assets), other receivables (including related parties), refundable deposits (listed in other non-current assets), overdue receivables (listed in other non-current assets), short-term borrowings, notes payable, short-term commercial paper payable, accounts payable (including related parties), other payables (including related parties), long-term borrowings (including due within one year or one operating cycle), guarantee deposits received (listed in other non-current liabilities), and lease liabilities, are reasonable approximations of the fair values.

4) Financial and non-financial instruments measured at fair value are classified by the Company based on the nature, characteristics, risk, and the level of fair value of assets and liabilities. The relevant information is as follows:

a) The Company's classification is based on the nature of assets and liabilities. The relevant information is as follows:

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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)
Equity securities	$ 11,024,117	$ -	$ 46,071	$ 11,070,188
Financial assets at FVTOCI
Equity securities	-	-	265,044	265,044
	$ 11,024,117	$ -	$ 311,115	$ 11,335,232
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)
Equity securities	$ 9,208,887	$ -	$ 30,000	$ 9,238,887
Derivative instruments	-	279	-	279
Financial assets at FVTOCI
Equity securities	-	-	146,457	146,457
	$ 9,208,887	$ 279	$ 176,457	$ 9,385,623
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 Company to measure fair value are explained as follows:

i. The market quoted prices adopted by the Company as fair value inputs (i.e. Level 1) are listed below by characteristics:

	Listed stocks
Market quoted prices	Closing price

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 Company 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 Company. 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
	Equity instruments		Equity instruments
January 1	$	176,457	$	268,430
Acquisition of equity instruments measured at fair value through profit or loss		-		30,000
Proceeds from the disposal of equity instruments measured at fair value through other comprehensive income	(	5)		-
Listed in unrealized gain/loss on investments in equity instruments at fair value through profit or loss		16,071		-
Listed in unrealized gain/loss on investments in equity instruments at FVTOCI		118,592	(	70,973)

Transfer out of Level 3 (please refer to 7 below)

December 31

( 51,000)

$ 311,115 $ 176,457

7) There were no transfers into or out of Level 3 fair value in 2025.

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 Company has transfer the fair value from Level 3 to Level 1 at the end of the month in which this event occurs.

8) In the Company'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.

9) 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	$ 265,044	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	46,071	Net asset value method	N/A	N/A	N/A

	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	$ 146,457	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	$ 30,000	Net asset value method	N/A	N/A	N/A

10) The Company 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	Market price	±1%	$ 461	($ 461)	$ 2,650	($ 2,650)
	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	Market price	±1%	$ 300	($ 300)	$ 1,465	($ 1,465)

~84~

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 (disclosing those amounting to at least NT$100 million while 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 (disclosing those with original investment amounting to at least NT$200 million at the end of the period while 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 7: Related-party transactions and Note 13 (1) 6.

14. Segment Information

N/A.

CMC Magnetics Corporation

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) S	Sun Biotech Limited Electronic	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

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

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)	General ledger account	End of period
			Number of Shares	Carrying amount (Note 2)	Shareholding percentage (%)	Fair value	Remarks
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

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)	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.

Table 3 Page 2

CMC Magnetics Corporation

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

Unit: NT$ thousands

(Unless specified otherwise)

Table 4.

Companies engaged in the purchase (sale) of goods	Counterparty	Relationship	Transaction				Situation and reason that transaction conditions are different from general ones (Note 1)		Notes and accounts receivable (payable)
			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.

CMC Magnetics Corporation

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		Recovered amount from related party after balance sheet date	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.

Table 5 Page 1

CMC Magnetics Corporation

Business relations and significant transactions of between parent company and subsidiaries

January 1 to December 31, 2025

Unit: NT$ thousands

(Unless specified otherwise)

Table 6.

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.

CMC Magnetics Corporation

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

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

Information on Investments in Mainland China - Basic Information

January 1 to December 31, 2025

Unit: NT$ thousands

(Unless specified otherwise)

Table 8.

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 EMC H
(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.

Statement 1 Page 11

| CMC Magnetics Corporation
Cash and cash equivalents
December 31, 2025 |
| --- |
| Statement 1 | | | Unit: NT$ thousands |
| Items | Summary | Amount |
| Cash on hand | | | $ 102 |
| Petty cash | | | 120 |
| Bank deposits | | | |
| — Checking account deposits | | | 290 |
| — NTD demand deposits | | | 1,342,396 |
| — Foreign currency demand deposits | USD 31.445 | 4,451,094.37 at an exchange rate of | 139,965 |
| GBP 42.35 | 402,162.40 at an exchange rate of | 17,031 |
| EUR 36.94 | 447,272.17 at an exchange rate of | 16,522 |
| JPY 0.201 | 24,961,268 at an exchange rate of | 5,020 |
| HKD 4.039 | 405.7 at an exchange rate of | 2 |
| CNY 4.50 | 5,006,435.84 at an exchange rate of | 22,529 |
| — Time deposit | | | 30,000 |
| | | | $ 1,573,977 |

The above fixed-term deposits will all mature within three months. The interest rate range for NTD fixed deposits is 1.255%.

Statement 2
CMC Magnetics Corporation
Financial assets at FVTPL - current and non-current
December 31, 2025
Unit: NT$ thousands

Name of securities	Summary	Number of shares/units	Face value (NT$)	Total amount	Interest rate	Cost of acquisition	Market price		Guarantee or pledge
							Unit price (NT$)	Total amount
Listed and OTC company stocks - current
	Listed stocks (Taiwan Stock Exchange)	13,365,000	$ 10	$ 133,650	-	$ 410,333	$ 24.80	$ 331,452	None
- Tainan Enterprises Co., Ltd.	"	1,045,000	10	10,450	-	234,952	230.50	240,873	"
- Hon Hai	"	487,000	10	4,870	-	681,063	1,550.00	754,850	"
- Taiwan Semiconductor Manufacturing Company	"	127,305,000	10	1,273,050	-	3,818,554	28.00	3,564,540	"
- Taiwan High Speed Rail	"	4,014,000	10	40,140	-	123,464	18.35	73,657	"
- Farglory Hotel Co., Ltd.	"	15,813,020	10	158,130	-	456,560	26.15	413,510	"
- Chateau International Development Co., Ltd.	OTC stocks	2,375,000	10	23,750	-	724,259	337.00	800,375	"
- Dynapack	"	450,000	10	4,500	-	180,503	457.50	205,875	"
- FOCI	"	940,000	10	9,400	-	166,293	180.00	169,200	"
- STL	Listed stocks (Taiwan Stock Exchange)	335,000	10	3,350	-	400,311	1,360.00	455,600	"
- EZConn	"	412,761	10	4,128	-	108,096	342.50	141,371	"
- Pell Bio-Med	"	386,000	10	3,860	-	207,550	451.50	174,279	"
- Heron	OTC stocks	82,000	10	820	-	109,748	1,450.00	118,900	"
- Phison						416,934		429,715	"
- Others						8,038,620		$ 7,874,197
Adjustment to valuation						( 164,423)
						$ 7,874,197
Listed and OTC company stocks - non-current
	Listed stocks (Taiwan Stock Exchange)	94,600,000	$ 10	$ 946,000	-	$ 2,837,557	$ 28.00	$ 2,648,800	Note
- Taiwan High Speed Rail	"	5,000,000	10	50,000	-	153,792	18.35	91,750	"
- Farglory Hotel Co., Ltd.	"	3,800,000	10	38,000	-	109,715	26.15	99,370	"
- Chateau International Development Co., Ltd.	"	200,000	10	2,000	-	279,697	1,550.00	310,000	"
- Taiwan Semiconductor Manufacturing Company						3,380,761		3,149,920
Non-listed and OTC company stocks - non-current
- Dunpin No. 1		1,500,000	10	15,000	-	15,000		23,691	None
- Dunpin No. 2		1,500,000	10	15,000	-	15,000		22,380	"
						3,410,761		$ 3,195,991
Adjustment to valuation						( 214,770)
						$ 3,195,991

Note: 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.

Statement 2 Page 1

Statement 3 Page 1

CMC Magnetics Corporation

Accounts receivable

December 31, 2025

Customer name	Amount	Remarks
Non-related parties
Customer A	$ 59,864
Customer B	25,746
Customer C	22,216
Customer D	15,800
Customer E	12,586
Customer F	12,549
Others	72,489	The balance of each customer in this category did not exceed 5% of the balance of this account
	221,250
Related Parties
Customer G	337,856
Customer H	142,930
Customer I	96,331
Customer J	70,924
Others	12,699	The balance of each customer in this category did not exceed 5% of the balance of this account
	660,740
Subtotal	881,990
Less: Allowance for loss	( 43,868)
	$ 838,122

Statement 4
CMC Magnetics Corporation
Inventories
December 31, 2025
Unit: NT$ thousands

Items	Amount		Remarks
	Cost	Net realizable value
Raw materials	$ 345,047	$ 262,394	The allowance for inventory valuation losses is based on cost or net realizable value, whichever is lower.
Work-in-progress	115	115
Finished goods	324,766	316,081
Merchandise inventory	476,535	1,138,746
Inventory in transit	45,956	45,956
Less: Allowance for inventory valuation losses	( 180,026)	$ 1,763,292
	$ 1,012,393

Statement 4 Page 1

CMC Magnetics Corporation

Changes in investments accounted for using the equity method

January 1 to December 31, 2025

Statement 5

Unit: NT$ thousands

Name of Investee	Opening Balance			Increase in the current period (Note 1)		Decrease in the current period (Note 2)		Closing balance			Market value or net equity		Security or pledge
	Number of Shares	Shareholding percentage (%)	Amount	Number of Shares	Amount	Number of Shares	Amount	Number of Shares	Shareholding percentage (%)	Amount	Unit price (NT$)	Total price
CHC International Investment Corporation	261,595,273	100.00	$3,404,547	-	$23,276	-	($3,939)	261,595,273	100.00	$3,423,884	$14.08	$3,683,933	None
CMC Entertainment Holding Corp.	18,956,000	100.00	169,983	-	254	-	(31,880)	18,956,000	100.00	138,357	7.30	138,357	"
Transtouch Technology Inc.	14,290,223	48.96	311,311	-	4,440	(85,000)	(6,648)	14,205,223	48.67	309,103	23.65	335,954	"
CMC Entertainment Hub Corp.	16,300,000	100.00	54,094	-	-	-	(31,173)	16,300,000	100.00	22,921	1.41	22,921	"
EMCInvestment	55,387	100.00	2,177,983	-	24,380	-	(218,836)	55,387	100.00	1,983,527	37,341.66	2,068,242	"
HoldingLtd.
CIAHoldingCorp.	29,688,245	86.35	475,977	-	7,668	-	(45,257)	29,688,245	86.35	438,388	16.70	495,811	"
VerbatimGmbH	25,565	100.00	992,824	-	174,582	-	(10,705)	25,565	100.00	1,156,701	46,610.42	1,191,595	"
Deltamac (Taiwan) Co., Ltd.	14,407,015	37.64	144,804	-	4,303	(118,000)	(8,552)	14,289,015	37.33	140,555	19.00	271,491	"
			$7,731,523		$238,903		($356,990)			$7,613,436

Note 1: The increase for the period includes the share of profits or losses from subsidiaries, associates, and joint ventures recognized using the equity method, the other comprehensive income share from subsidiaries, associates, and joint ventures recognized using the equity method, and exchange differences from the translation of financial statements of foreign operations.
Note 2: The decrease for the period includes the share of profits or losses from subsidiaries, associates, and joint ventures recognized using the equity method, the other comprehensive income share from subsidiaries, associates, and joint ventures recognized using the equity method, exchange differences from the translation of financial statements of foreign operations, and the decrease from disposed subsidiaries for the period.

Statement 5 Page 1

Statement 6
CMC Magnetics Corporation
Long-term borrowings
December 31, 2025
Unit: NT$ thousands

Lender	Summary	Due within one year	Due beyond one year	Total	Loan period	Interest rate	Security or collateral
Entie Commercial Bank, Ltd.	Mid-term loan	$ -	$ 788,000	$ 788,000	2025.10~2027.10	Note	Credit
Entie Commercial Bank, Ltd.	Mid-term loan (secured)	-	500,000	500,000	2025.06~2028.06	"	Property, plant and equipment
Taipei Fubon Commercial Bank	Mid-term loan (secured)	-	1,650,000	1,650,000	2025.04~2027.04	"	"
Shanghai Commercial & Savings Bank, Ltd.	Mid-term loan (secured)	400,000	-	400,000	2023.11~2026.11	"	"
Sunny Commercial Bank	Mid-term loan (secured)	-	120,000	120,000	2025.04~2027.04	"	Securities
Taishin International Bank	Mid-term loan (secured)	-	270,000	270,000	2025.12~2028.03	"	"
Bank SinoPac.	Mid-term loan (secured)		185,000	185,000	2025.08~2027.08	"	"
Bank SinoPac. Securities	Mid-term loan (secured)	590,000	-	590,000	2023.11~2026.11	"	"
Hua Nan Bank	Mid-term loan (secured)	-	100,000	100,000	2024.03~2027.03	"	"
O-Bank Co., Ltd.	Commercial paper	270,000	-	270,000	2024.04~2026.04	"	Credit
O-Bank Co., Ltd.	Commercial paper	260,000	-	260,000	2024.04~2026.04	"	Securities
		$ 1,520,000	$ 3,613,000	$ 5,133,000

Note: The interest rate range is between 2.12% and 2.41%.

Statement 6 Page 1

Statement 7 Page 1

CMC Magnetics Corporation

Operating revenue

January 1 to December 31, 2025

Item	Summary	Amount
Sales revenue	Storage media products	$ 2,590,634
Less: Sales return and discount		( 736)
		$ 2,589,898

Statement 8
Unit: NT$ thousands

CMC Magnetics Corporation

Operating costs

January 1 to December 31, 2025

Items	Summary	Amount	Remarks
Raw materials, end of period (inventory in transit)		$ 388,375
Add: Purchase of raw materials		1,168,989
Less: Sale of raw materials		( 33,281)
Raw materials, end of period (including inventory in transit)		( 391,003)
Others		( 3,404)
Direct raw materials consumed		1,129,676
Direct labor		200,755
Production overheads		527,957
Less: Unamortized fixed production overheads		( 17,182)
Production overheads in current period		1,841,206
Work in progress, beginning of period		253
Less: Work-in-process, end of period		( 115)
Less: Others		( 44)
Cost of finished goods		1,841,300
Finished goods, beginning of period		318,148
Less: Finished goods, end of period		( 324,766)
Others		( 8,284)
Cost of self-made products sold		1,826,398
Merchandise inventory, beginning of period		448,931
Add: Purchases in current period		335,583
Less: Merchandise inventory, end of period		( 476,535)
Cost of merchandise inventory and goods sold		307,979
Cost of raw materials sold		33,281
Cost of inventories sold		2,167,658
Other operating costs		4,118
Inventory impairment loss		16,760
Revenue from sale of tailings and scraps		( 278)
Unamortized fixed production overheads		17,182
Cost of goods sold		$ 2,205,440

Statement 8 Page 1

Statement 9
CMC Magnetics Corporation
Production overheads
January 1 to December 31, 2025
Unit: NT$ thousands

Items	Amount	Remarks
Water, electricity, and gas fee	$ 238,951
Depreciation	93,384
Indirect labor	65,269
Insurance premium	31,429
Other production overheads	98,924	The balance of each item did not exceed 5% of the amount of this account
	$ 527,957

Statement 9 Page 1

Statement 10 Page 1

CMC Magnetics Corporation

Selling and marketing expenses

January 1 to December 31, 2025

Items	Amount	Remarks
Advertising expenses	$ 64,949
Freight charge	24,991
Salaries and wages	18,575
Utility fees	6,868
Other expenses	6,599	The balance of each item did not exceed 5% of the amount of this account
	$ 121,982

| Statement 11 | CMC Magnetics Corporation
Administrative expenses
January 1 to December 31, 2025 | | Unit: NT$ thousands |
| --- | --- | --- | --- |
| Items | Summary | Amount | Remarks |
| Salaries and wages | | $ 72,994 | |
| Entertainment fee | | 27,161 | |
| Tax expense | | 18,234 | |
| Service fees | | 19,881 | The balance of each item did not exceed 5% of the amount of this account |
| Other expenses | | 35,929 | |
| | | $ 174,199 | |

Statement 11 Page 1

Statement 12 Page 1

CMC Magnetics Corporation

Research and development expenses

January 1 to December 31, 2025

Statement 12
Unit: NT$ thousands

Items	Amount	Remarks
Depreciation	$ 35,559
Salaries and wages	12,512
Utility fees	14,472
Other expenses	16,335	The balance of each item did not exceed 5% of the amount of this account
	$ 78,878

AI assistant

CMC — Audit Report / Information 2025

52006_rns_2026-06-02_a4cf4795-c825-45b4-942d-4a69fd8aa107.pdf

Opinion

Basis for Audit Opinion

Key Audit Matters

Accounting estimation of inventory valuation

Description

Corresponding audit procedures

Other Matters – Audits by other CPAs

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

Auditor's Responsibilities for the Audit of the Parent Company Only Financial Statements

4. Summary of Significant Accounting Policies

a. Statement of compliance

b. Basis of preparation

c. Foreign currency translation

w. Operating revenue

7. Related-Party Transactions

Financial liabilities

Interest rate risk of cash flow and fair value

b) Credit risk

13. Supplementary Disclosures

14. Segment Information

CMC Magnetics Corporation

CMC Magnetics Corporation

CMC Magnetics Corporation

CMC Magnetics Corporation

CMC Magnetics Corporation

Information on Name and Location of Investees (Excluding Investees in Mainland China)

CMC Magnetics Corporation

Information on Name and Location of Investees (Excluding Investees in Mainland China)

CMC Magnetics Corporation

Information on Investments in Mainland China - Basic Information

CMC Magnetics Corporation

Accounts receivable

December 31, 2025

CMC Magnetics Corporation

Changes in investments accounted for using the equity method

CMC Magnetics Corporation

Operating revenue

January 1 to December 31, 2025

CMC Magnetics Corporation

Operating costs

January 1 to December 31, 2025

CMC Magnetics Corporation

Selling and marketing expenses

January 1 to December 31, 2025

CMC Magnetics Corporation

Research and development expenses

January 1 to December 31, 2025

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CMC Audit Report / Information 2025