Stock Code: 1718

China Man-Made Fiber Corporation and its subsidiaries

Consolidated Financial Statements and Independent Auditors’ Report

2025 and 2024

Business Address: No. 8, Jingjian Rd., Dashe Dist., Kaohsiung City 815

Contact Address: 10F., No. 50, Sec. 1, Xinsheng S. Rd., Zhongzheng Dist., Taipei City

Tel.: (02)2393-7111

§ TABLE OF CONTENTS §

ITEM		PAGE NO.	NOTE NUMBER TO THE FINANCIAL STATEMENTS
I.	Cover	1	-
II.	Table of Contents	2	-
III.	Statement on consolidated financial statement of affiliated enterprises	3	-
IV.	Independent Auditor’s Audit Report	4~10	-
V.	Consolidated Balance Sheet	9	-
VI.	Consolidated Income Statement	12~14	-
VII.	Consolidated Statements of Changes in Shareholders’ Equity	15	-
VIII.	Consolidated Statement of Cash Flows	16~19	-
IX.	Notes to the Consolidated Financial Statements
	(I) Company Profile	20	1.
	(II) Financial reporting date and procedures	21	2.
	(III) Application of new and revised standards and interpretation	21~24	3.
	(IV) Summary of important accounting policies	24~46	4.
	(V) Main source of significant accounting judgment, estimates and assumptions uncertainty	47	5.
	(VI) Description of significant accounting items	47~114	6 - 36
	(VII) Transactions with related parties	115~122	37
	(VIII) Pledged assets	123	38
	(IX) Significant contingent liabilities and unrecognized contractual commitments	123~131	39
	(X) Significant disaster loss	-	-
	(XI) Significant subsequent events	-	-
	(XII) Others	131~185	40 - 46
	(XIII) Segment information	186~188	47
	(XIV) Disclosures
	1. Information about significant transactions	188, 190 - 202, 202	48
	2. Information about reinvestees	188,197	48
	3. Information about investment in Mainland China	189,199~200	48

Statement on consolidated financial statement of affiliated enterprises

The Company has in the year 2025 (from January 1 to December 31, 2025), as stipulated under the “affiliated enterprises’ consolidated operating report, affiliated enterprises’ consolidated financial statements and affiliation report compiling criteria”, companies that shall be streamlined into compiling the affiliated enterprises’ consolidated financial statements and companies that shall be streamlined into compiling and producing the parent/subsidiary companies’ consolidated financial statements, per International Financial Reporting Criteria number 10, are all identical and also the affiliated enterprises’ consolidated financial statements shall disclose of relevant information has all been disclosed in the aforementioned parent/subsidiaries’ consolidated financial statements.

Declared by:

Company Name: China Man-Made Fiber Corporation

Responsible person: Kuei-Hsien Wang

March 9, 2026

Independent Auditor’s Audit Report

To China Man-Made Fiber Corporation:

Audit opinions

The consolidated balance sheets of China Man-Made Fiber Corporation and its subsidiaries as of December 31, 2025 and 2024, and the consolidated statements of comprehensive income, consolidated statements of changes in equity, and consolidated statements of cash flows for the years then ended, as well as the notes to the consolidated financial statements (including a summary of significant accounting policies), have been audited by us.

In our opinion, based on our audit and the audit reports of other auditors (refer to the Other Matter paragraph), the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of China Man-Made Fiber Corporation and its subsidiaries as of December 31, 2025 and 2024, and their consolidated financial performance and consolidated cash flows for the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the Regulations Governing the Preparation of Financial Reports by Public Banks, the Regulations Governing the Preparation of Financial Reports by Securities Firms, as well as the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations as endorsed and issued into effect by the Financial Supervisory Commission.

The basis for opinions

We conducted our audit in accordance with the Regulations Governing Auditing and Attestation of Financial statements by Certified Public Accountants and auditing standards. Our responsibilities under those standards are further described in the responsibilities of auditors for the audit of the consolidated financial statements. We have remained independent of China Man-Made Fiber Corporation and its subsidiaries in accordance with the Code of Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with these requirements. Based on our audit results and the audit reports of other

CPAs, we are of the opinion that sufficient and appropriate audit evidence has been obtained to serve as the basis for our audit opinion.

Key audit matter

Key audit matters are those matters that, in our professional judgment, were of most significant in our audit of the consolidated statements of China Man-Made Fiber Corporation and its subsidiaries in 2025. These matters were addressed in the content of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon and we do not provide a separate opinion on those matters.

Key audit procedures of the consolidated financial statements of China Man-Made Fiber Corporation and subsidiary in 2025 included:

Authenticity of specific sales revenue

Notes to key audit matters

Revenue from sales of China Man-Made Fiber Corporation and its subsidiaries is recognized as revenue after the customer has obtained control of the product and assumed the risk of the product. We conducted an analysis of revenue from sales in 2025, taking into account the sales amount and gross profit to identify particular sales customers and including the authenticity of its revenue from sales as a key audit matter.

Please refer to Note 4 (17) of the consolidated financial statements for the accounting policies on sales revenue recognition.

Audit response

Awareness of the design and implementation of the internal control system related to the recognition of sales revenues for China Man-Made Fiber Corporation and its subsidiaries.
The efforts to obtain details of the sales revenues account for specific customers of China Man-Made Fiber Corporation and its subsidiaries in 2025 and select samples to check the shipping-related forms and documents to test the authenticity of the sales facts.

Assessment of the expected credit loss from discounting and advances.

Notes to key audit matters

As indicated in Notes 14 and 33(6) of the consolidated financial statements, for the net discounts and loans of China Man-Made Fiber Corporation and its subsidiaries at the end of 2025, the expected credit loss (ECL) amortized in 2025 amounted to NT$633,982,283 thousand and NT$397,746 thousand, respectively, accounting for 61% of the total assets and 5% of comprehensive income, respectively, deemed as quite significant toward the overall consolidated financial statement. In addition, China Man-Made Fiber Corporation and its subsidiaries consider major estimates and judgments of the management level including probability of default and loss given default when determining ECL pursuant to decrees and ordinances of the competent

authority, and shall provide for the higher one. For these reasons, expected credit loss of discounts and loans to the customers are determined as key audit matters.

Regarding the accounting policies related to discounts and loans, the ECL, information linked up with accounting estimate and uncertainties in hypotheses, please refer to Notes 4(14), 5, 14 and 33(6) of the consolidated financial statements for details.

Audit response

Understand the internal control system adopted by the Company and its subsidiaries for assessing the ECL from discounts and advances. Test whether the discounts and loans are classified according to relevant laws and regulations and letters/orders of the competent authority.
For the comprehensive evaluation of the ECL adopted by China Man-Made Fiber Corporation, understand and re-calculated key parameters used in the impairment model (probability of default and loss given default) in order to evaluate the reasonableness. In addition, examine whether the amount provided comply with relevant laws and regulations and letters/orders of the competent authority.

Other information

The financial statements of investees included in the consolidated financial statements of the Company and its subsidiaries adopting the equity method have not been audited by us. They are audited by other accountants. Therefore, we refer to the audited reports of other accountants in expressing our opinions in the consolidated statement regarding the investments by equity method and subsidiaries, affiliates, joint ventures and other comprehensive gains and losses. As of December 31, 2025 and 2024, investments accounted for using the equity method based on the audit reports of other auditors amounted to NT$717,387 thousand and NT$827,242 thousand, respectively; for the years 2025 and 2024, the shares of profit or loss and other comprehensive income of subsidiaries, affiliates, and joint ventures recognized using the equity method based on the audit reports of other auditors amounted to (109,855) thousand and (113,008) thousand, respectively. Meanwhile, certain information related to the re-investees' business disclosed under Note 48 of the consolidated financial statement is, as well, disclosed based on the audit reports of other certified public accountants.

China Man-Made Fiber Corporation has duly prepared and compiled parent company only financial statements for the years 2025 and 2024 for which, we, the certified public accountant, have issued audit reports with unqualified opinion plus other matters ready for reference.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

The Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, Regulations Governing the Preparation of Financial Reports by Public Banks, and applicable IFRS, IAS, SIC and IFRIC as recognized and endorsed into effect by the FSC, and for such internal control as the management determines is necessary to enable the preparation of the consolidated financial statements to be free from material misstatement whether or not due to fraud or error.

In preparing the consolidated financial statements, the management is responsible for assessing the ability of China Man-Made Fiber Corporation and its subsidiaries as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate China Man-Made Fiber Corporation and its subsidiaries or to create operations or has no realistic alternative but to do so.

Those in charge of governance (including the Auditing Committee) are responsible for overseeing the reporting process of China Man-Made Fiber Corporation and its subsidiaries.

Auditor’s responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error and to issue an auditor’s report. Reasonable assurance is a high level of assurance, but is not a guarantee that and audit conducted in accordance with the accounting principles in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. If fraud or errors are considered materials, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with the accounting principles in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also perform the following works:

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive risks and obtain evidence that is sufficient and appropriate to provide a basis of our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
8 -

an opinion on the effectiveness of the internal control effective in China Man-Made Fiber Corporation and its subsidiaries.

Evaluate the appropriateness of accounting policies used and the reasonability of accounting estimates and related disclosures made by the management.
Conclude the appropriateness of the use of the going concern basis of accounting by the management, and, based on the audit evidence obtained, whether or not a material uncertainty exists related to events or conditions that may cast significant doubt on China Man-Made Fiber Corporation and its subsidiaries and its ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosure are inappropriate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of the auditor's report. However, future events or conditions may cause China Man-Made Fiber Corporation and its subsidiaries to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated statements, including related notes, whether the consolidated statements represent the underlying transactions and events in a matter that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information or the entities or business activities with China Man-Made Fiber Corporation and its subsidiaries to express an opinion on the consolidated financial statements. The independent auditor is responsible for guiding, supervising, and implementing the audit of the China Man-Made Fiber Corporation; also, is responsible for forming an opinion on the audit of the China Man-Made Fiber Corporation and its subsidiaries.

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

We also provide those in charge of governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence and where applicable, (related safeguards).

From the matters communicated with those in charge of governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of China Man-Made Fiber Corporation and its subsidiaries of 2025 and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes

public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communications.

Deloitte and Touche
CPA: Shu-Lin Liu
CPA: Pan-Fa Wang

Financial Supervisory Commission Approval No.
Jin-Guan-Zheng-Shen-Zi No. 1050024633

Financial Supervisory Commission Approval No.
Jin-Guan-Zheng-Shen-Zi No. 1100356048

March 9, 2026

10 -

China Man-Made Fiber Corporation and subsidiary

Consolidated Balance Sheet

December 31, 2025 and 2024

Unit: NTD thousand

Code	Assets	December 31, 2025		December 31, 2024
		Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents (Note 4, 6 and 37)	$ 15,229,036	2	$ 18,300,962	2
1110	Due from Central Bank and lend to Banks (Note 7 and 38)	52,557,909	5	49,941,583	5
1120	Financial assets through profit and/or loss with measuring for the faire values-current (Note 4 and 8)	43,299,662	4	36,964,400	4
1180	Bonds and securities sold under repurchase agreements (Note 4 and 9)	16,180,210	2	8,241,776	1
1201	Notes receivable (Note 4, 10 and 38)	11,272,941	1	9,902,598	1
1202	Accounts receivable (Note 4, 10 and 37)	10,489,321	1	13,461,835	1
1203	Other receivable (Note 4, 10 and 37)	3,723,951	-	2,629,039	-
1260	Current income tax assets (Notes 4 and 34)	19,217	-	16,164	-
1270	Inventory (Note 4 and 11)	973,034	-	1,422,344	-
1280	Prepaid (Note 12)	1,040,614	-	1,208,430	-
1320	Other current assets (Note 13 and 38)	404,471	-	355,972	-
1330	Notes discounted and loans – net (Note 4, 14 and 37)	633,982,283	61	603,477,297	61
11XX	Total current assets	789,172,649	76	745,922,400	75
Non-Current assets
1415	Financial assets at fair value through other comprehensive income- non-current (Note 4, 15 and 38)	105,047,843	10	103,720,154	11
1435	Financial assets on the basis of cost after amortization- non-current (Note 4, 16 and 38)	103,297,941	10	107,749,552	11
1470	Investment by equity method (Note 4, 18 and 38)	730,454	-	842,270	-
1500	Real estates, plant and equipment – net (Notes 4, 19 and 38)	30,200,482	3	28,829,510	3
1595	Right-of-use assets (Note 4 and 20)	1,114,417	-	1,322,764	-
1600	Real estate investments – net (Note 4, 21 and 38)	3,546,728	1	3,568,796	-
1700	Intangible assets – net (Note 4 and 22)	571,368	-	339,512	-
1800	Deferred income tax assets – net (Note 4 and 34)	1,467,121	-	1,574,799	-
1900	Other assets (Note 23 and 38)	3,139,329	-	2,710,846	-
14XX	Total non-current assets	249,115,683	24	250,658,203	25
1XXX	Total assets	$ 1,038,288,332	100	$ 996,580,603	100
Liabilities and equity
Current liabilities
2110	Short-term loans (Note 24 and 38)	$ 23,018,143	2	$ 23,674,893	3
2120	Short-term bills payable (Note 24)	7,176,162	1	6,403,037	1
2130	Bills and bonds sold under repurchase agreements (Note 4 and 25)	10,168,693	1	12,844,223	1
2140	Financial liabilities through profit and/or loss with measuring for the faire values-current (Note 4 and 8)	2,682,542	-	2,821,648	-
2190	Due to Central Bank and other banks (Note 26)	14,856,943	2	19,651,215	2
2201	Note payable	17,012	-	9,832	-
2202	Accounts payable (Note 37)	724,810	-	919,914	-
2204	Other accounts payable (Notes 27 and 37)	9,833,768	1	8,368,851	1
2310	Current income tax liabilities (Notes 4 and 34)	588,145	-	831,751	-
2330	Long-term liability due in one year or one business cycle (Note 24 and 38)	412,801	-	647,706	-
2335	Lease liabilities - current (Notes 4 and 20)	214,834	-	228,859	-
2350	Other current liabilities (Note 28)	745,281	-	731,009	-
2360	Customer deposits and remittances (Note 29 and 37)	842,473,244	81	806,280,280	81
21XX	Total of current liabilities	912,922,378	88	883,413,218	89
Non-current liabilities
2540	Bonds payable (Note 30 and 37)	14,830,000	1	12,630,000	1
2550	Long-term loans (Note 24 and 38)	8,238,801	1	8,060,580	1
2600	Liability reserve (Note 4 and 31)	1,473,024	-	1,363,847	-
2625	Lease liabilities - non-current (Notes 4 and 20)	809,771	-	996,347	-
2630	Deferred tax liabilities (Note 4 and 34)	1,020,032	-	1,020,032	-
2660	Other liabilities (Note 28)	7,048,543	1	5,039,055	1
25XX	Total non-current liability	33,420,171	3	29,109,861	3
2XXX	Total liabilities	946,342,549	91	912,523,079	92
Equity of the parent company (Note 32)
3110	Common stock capital	16,859,057	2	16,859,057	2
3200	Capital surplus	1,748,211	-	1,712,237	-
Retained earnings
3310	Legal reserve	553,344	-	537,491	-
3320	Special reserve	1,965,549	-	1,937,366	-
3330	Undistributed earnings	213,725	-	158,528	-
Other equity
3410	Exchange differences from the translation of financial statements of foreign operations	( 26,296 )	-	( 18,496 )	-
3425	Unrealized gain on financial assets at fair value through other comprehensive profit or loss	1,844,210	-	1,240,151	-
3500	Treasury stock (Note 4)	( 1,182,515 )	-	( 1,135,056 )	-
31XX	Total equity attributable to owners of the Company	21,975,285	2	21,291,278	2
32XX	Non-controlling interest (Note 32)	69,970,498	7	62,766,246	6
3XXX	Total equity	91,945,783	9	84,057,524	8
Total liabilities and equity		$ 1,038,288,332	100	$ 996,580,603	100

The notes attached shall constitute an integral part of this consolidated financial statement.

(Refer to Auditor's Report presented by Deloitte Taiwan dated March 9, 2026)

Chairman: Kuei-Hsien Wang

Manager: Jeh-Yi Wang

Accounting Supervisor: Yun-Yun Hsu

China Man-Made Fiber Corporation and subsidiary
Consolidated Income Statement
January 1 to December 31, 2025 and 2024

Code		Unit: NT$ thousands, except Earnings Per Share (NT$)2025
		Amount	%	Amount	%
Revenue (Note 4)
4010	Interest revenues (Note 33 and 37)	$ 27,425,757	61	$ 25,220,640	56
4050	Income from handling fees (Note 33)	5,580,103	12	5,115,800	11
4090	Gains on financial assets and liabilities at fair value through profit or loss (Note 33)	5,013	-	3,612,754	8
4105	Realized gain on financial assets at fair value through other comprehensive profit or loss	401,093	1	354,615	1
4160	Net sales revenue (Note 37)	9,719,284	22	10,441,762	23
4250	Reversal gains on impairment loss of financial assets (Notes 15, 16 and 33)	2,120	-	-	-
4255	ECL reversal gains (Note 10 and 33)	10,755	-	52,401	-
4260	Exchange gain	1,517,019	3	-	-
4270	Other revenues (Notes 33 and 37)	611,714	1	582,183	1
4XXX	Total revenue	45,272,858	100	45,380,155	100
Expenses
5010	Interest expenses (Note 33 and 37)	14,554,389	32	13,335,081	29
5060	Service charges (Note 33)	441,197	1	386,474	1
5080	Loss of affiliated companies and joint ventures under the equity method (Note 18)	114,617	-	114,211	-
5090	Bad debt expense, commitment and guaranty reserve (Note 10, 14, 31 and 33)	648,694	2	1,100,726	2
5190	Cost of goods sold (Note 11 and 37)	10,134,996	22	10,683,725	24
5230	Operating expenses (Note 31, 33 and 37)	10,421,236	23	9,649,841	21
5280	Impairment (Note 19 and 33)	241,876	1	330,152	1
5285	Impairment loss of financial assets (Notes 15, 16 and 33)	-	-	8,077	-
5290	Exchange loss	-	-	1,805,503	4
5320	Other expenses (Note 33)	8,174	-	32,695	-
5XXX	Total expenses	36,565,179	81	37,446,485	82
6100	Net profit before taxation	8,707,679	19	7,933,670	18
6200	Income tax expenses (Note 4 and 34)	1,814,369	4	1,632,857	4
6500	Net income	6,893,310	15	6,300,813	14

(Continued)

12 -

(Continued)

Code		2025		2024
		Amount	%	Amount	%
	Other comprehensive profit or loss
	The items that are not re-classified as profit or loss
6611	Determined Benefit Plan Reevaluation (Note 4 and 31)	($ 156,999)	-	$ 45,409	-
6617	Evaluation of the capital gain from equity instrument at fair value through comprehensive income statement as other comprehensive income	756,456	2	1,440,216	3
6625	Share of other comprehensive income of associates and joint ventures accounted for using the equity method	566	-	( 402 )	-
6649	Income tax related to titles without reclassification (Notes 4 and 34)	25,478	-	( 30,685 )	-
6610	Total of items not reclassified to profit or loss	625,501	2	1,454,538	3
	Items that may be re-classified subsequently under profit or loss
6651	Exchange differences from the translation of financial statements of foreign operations	( 56,148 )	-	187,501	1
6659	Capital gain (loss) of debts instrument at fair value through comprehensive income statement as other comprehensive income	552,864	1	( 1,788,841 )	( 4 )
6650	Total of items that may be reclassified subsequently to profit or loss	496,716	1	( 1,601,340 )	( 3 )
6600	Other comprehensive income of the current year (net amount after taxation)	1,122,217	3	( 146,802 )	-
6700	Total amount of comprehensive income of the current year	$ 8,015,527	18	$ 6,154,011	14
	Profit attributable to:
6810	Owners of parent	$ 118,827	-	$ 27,521	-
6820	Non-controlling interest	6,774,483	15	6,273,292	14
6800		$ 6,893,310	15	$ 6,300,813	14
	The total comprehensive income belongs to
6910	Owners of parent	$ 696,309	2	$ 335,318	1
6920	Non-controlling interest	7,319,218	16	5,818,693	13
6900		$ 8,015,527	18	$ 6,154,011	14
	Earnings per share (Note 35)
7000	Basic earnings per share	$ 0.09		$ 0.02
7100	Diluted earnings per share	$ 0.09		$ 0.02

The notes attached shall constitute an integral part of this consolidated financial statement.

(Refer to Auditor's Report presented by Deloitte Taiwan dated March 9, 2026)

Chairman: Kuei-Hsien Wang

Manager: Jeh-Yi Wang

Accounting Supervisor: Yun-Yun Hsu

14 -

China Man-Made Fiber Corporation and subsidiary
Consolidated Statements of Changes in Shareholders' Equity
January 1 to December 31, 2025 and 2024

Unit: NTD thousand

Code	Balance on January 1, 2024	Equity of the company
		Share capital	Capital surplus	Retained earnings			Other equity			Treasury stock	Total	Non-controlling interest
				Legal reserve	Special reserve	Undistributed earnings	Exchange differences from the translation of financial statements of foreign operations	Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss
A1	The 2023 appropriation and distribution of earnings	-	-	(411,573)	-	411,573	-	-	-	-	-	-
B13	Loss compensation with the legal reserve	-	-	-	-	27,521	-	-	-	27,521	6,273,292	6,300,813
D1	Other comprehensive net income in 2024	-	-	-	-	8,944	89,699	209,154	-	307,797	(454,599)	(146,802)
D5	Total comprehensive income in 2024	-	-	-	-	36,465	89,699	209,154	-	335,318	5,818,693	6,154,011
M7	Changes in ownership interests in subsidiaries	-	(539)	-	-	(29)	-	-	-	(568)	568	-
Q1	Equity instrument at fair value through other comprehensive income statement	-	-	-	-	122,092	-	(122,092)	-	-	-	-
O1	Increase/ decrease in Non-controlling interest (Note 32)	-	-	-	-	-	-	-	-	-	(1,582,562)	(1,582,562)
Z1	Balance as of December 31, 2024	16,859,057	1,712,237	537,491	1,937,366	158,528	(18,496)	1,240,151	(1,135,056)	21,291,278	62,766,246	84,057,524
B1	The 2024 appropriation and distribution of earnings	-	-	15,853	-	(15,853)	-	-	-	-	-	-
B3	Special reserve appropriated	-	-	-	28,183	(28,183)	-	-	-	-	-	-
D1	2025 profit	-	-	-	-	118,827	-	-	-	118,827	6,774,483	6,893,310
D3	Other comprehensive net income in 2025	-	-	-	-	(28,379)	(7,800)	613,661	-	577,482	544,735	1,122,217
D5	Total comprehensive income in 2025	-	-	-	-	90,448	(7,800)	613,661	-	696,309	7,319,218	8,015,527
L5	Shares of the parent company acquired by a subsidiary are deemed treasury shares (Note 32)	-	-	-	-	-	-	-	(47,459)	(47,459)	-	(47,459)
M7	Changes in ownership interests in subsidiaries	-	35,974	-	-	155	-	(972)	-	35,157	(36,129)	(972)
Q1	Equity instrument at fair value through other comprehensive income statement	-	-	-	-	8,630	-	(8,630)	-	-	-	-
O1	Increase/ decrease in Non-controlling interest (Note 32)	-	-	-	-	-	-	-	-	-	(78,837)	(78,837)
Z1	Balance as of December 31, 2025	$ 16,859,057	$ 1,748,211	$ 553,344	$ 1,965,549	$ 213,725	($ 26,296)	$ 1,844,210	($ 1,182,515)	$ 21,975,285	$ 69,970,498	$ 91,945,783

The notes attached shall constitute an integral part of this consolidated financial statement.
Refer to Auditor's Report presented by Deloitte Taiwan dated March 9, 2026

Chairman: Kuei-Hsien Wang

Manager: Jeh-Yi Wang

Accounting Supervisor: Yun-Yun Hsu

China Man-Made Fiber Corporation and subsidiary
Consolidated Statement of Cash Flows
January 1 to December 31, 2025 and 2024
Unit: NTD thousand

Code	Cash flow from operating activities	2025	2024
A00010	Income before tax from continuing operations	$ 8,707,679	$ 7,933,670
	Profits and loss
A20100	Depreciation expenses	1,061,063	1,088,203
A20200	Amortization expenses	149,771	94,829
A20300	Expected credit impairment loss	637,939	1,048,325
A20400	Gain (loss) on financial assets and liabilities at fair value through profit and loss	( 5,013 )	( 3,612,754 )
A20900	Interest expenses	14,554,389	13,335,081
A21200	Interest revenue	( 27,425,757 )	( 25,220,640 )
A21300	Dividend income	( 404,768 )	( 343,363 )
A21800	Provision for liabilities	34,906	-
A21830	Impairment (reversal gain) loss on financial assets	( 2,120 )	8,077
A22300	Loss of affiliated companies and joint ventures under the equity method	114,617	114,211
A22500	Gain on disposal and retirement of property, plant and equipment	( 4,538 )	( 3,406 )
A23000	Gain on disposal of investments	( 1,110 )	-
A23100	Capital gain of instrument investments measured at fair value through other comprehensive income	( 401,093 )	( 354,615 )
A23200	Losses on disposal of subsidiaries	-	20,072
A23700	Loss in impairment of non-financial assets	241,876	330,152
A23800	Inventory write-down and obsolescence loss (reversal gain)	591	( 67,717 )
A24100	Unrealized foreign currency exchange losses (gains)	824,618	( 1,118,080 )
A29900	Other items	( 3,446 )	( 9,480 )
	Net change in operating assets and liabilities
A91110	Due from Central Bank and lend to Banks	( 1,550,333 )	( 3,536,200 )
A91120	Financial assets at fair value through profit and loss	( 6,590,218 )	( 385,879 )
A91190	Accounts receivable	560,119	( 2,057,829 )
A91250	Inventory	448,719	94,972
A91260	Prepayments	167,816	( 165,356 )
A91280	Other current assets	36,719	( 40,796 )
A91290	Discounts and loans	( 30,852,712 )	( 62,348,778 )
A91320	Other financial assets	( 34,745 )	301,934

(Continued)

16 -

(Continued)

Code		2025	2024
A92110	Bills and bonds sold under repurchase agreements	($ 2,675,530)	$ 7,087,668
A92120	Financial liabilities at fair value through profit and loss	120,863	( 1,762,889)
A92150	Due to Central Bank and other banks	( 4,794,272)	8,035,747
A92160	Payables	1,182,538	( 3,195,424)
A92280	Other liabilities	39,236	( 21,391)
A92290	Customer deposits and remittances	36,192,964	77,698,676
A92330	Other financial liabilities	2,058,851	291,890
A92310	Employee benefit liabilities reserve	( 190,534)	( 214,275)
A33000	Cash inflow (outflow) from operating activities	( 7,800,915)	13,024,635
A33100	Interest received	27,142,597	24,604,514
A33200	Dividends received	404,768	343,363
A33300	Interest paid	( 14,454,934)	( 13,093,520)
A33500	Income tax paid	( 1,917,872)	( 1,787,849)
AAAA	Net cash inflow from operating activities	3,373,644	23,091,143
	Cash flow from investing activities
B00010	Acquisition of financial assets at fair value through other comprehensive profit or loss	( 25,993,966)	( 56,716,730)
B00020	Disposal of financial assets at fair value through other comprehensive profit or loss	25,979,821	21,234,376
B00030	De-capitalization refunded monies of financial assets at fair value through other comprehensive profit or loss (decrease)	66	-
B00040	Financial assets acquired on the basis of cost after amortization	( 592,980,779)	( 605,080,740)
B00060	Held-to-maturity financial assets based on cost after amortization	596,977,002	610,529,462
B01800	Acquisition of investment under the equity method	( 2,235)	( 10,000)
B02300	Net cash inflow from disposition of subsidiaries	-	128,758
B02700	Acquisition of property, plant and equipment	( 2,423,365)	( 1,641,476)
B02800	Disposal of property, plant and equipment	19,424	25,841
B03700	Increase in refundable deposits	( 527,265)	( 84,838)
B04300	Increase in receivables from related party loans	-	( 300,000)
B04500	Acquisition of Intangible assets	( 377,829)	( 147,363)
B05400	Acquisition of investment property	-	( 12,024)
B06800	Decrease in other assets	129,153	22,188

B09900	Decrease (increase) in restricted assets	( 85,218 )	10,567
BBBB	Net cash inflow (outflow) from investing activities	714,809	( 32,041,979 )
	Net cash flow from financing activities
C00200	Decrease in short-term loans	( 656,750 )	( 12,036 )
C00500	Increase in short-term notes payable	773,125	456,064

(Continued)

Code		2025	2024
C01400	Issuance of financial bonds	$ 5,000,000	$ -
C01500	Repayment of financial bonds	( 2,800,000 )	( 2,360,000 )
C01600	Proceeds from long-term loan	4,903,250	6,149,370
C01700	Re-payments of long-term borrowings	( 4,959,934 )	( 4,393,659 )
C03000	Increase in guarantee deposits received	-	137,664
C03100	Decrease in guarantee deposits	( 74,327 )	-
C04020	Payment of principal element of lease liabilities	( 211,286 )	( 213,778 )
C04900	Repurchase of treasury shares	( 47,459 )	-
C05800	Change in non-controlling interest	( 78,837 )	( 1,582,562 )
CCCC	Net cash inflow (outflow) from financing activities	1,847,782	( 1,818,937 )
DDDD	Impact of changes in exchange rate on cash and cash equivalents	( 3,734 )	82,856
EEEE	Increase (decrease) in current cash and cash equivalents	5,932,501	( 10,686,917 )
E00100	Balance of cash and cash equivalents at the beginning of the period	49,506,703	60,193,620
E00200	Balance of cash and cash equivalents at the end of the period	$ 55,439,204	$ 49,506,703

Reconciliation of cash and cash equivalents at the end of the period

Code		December 31, 2025	December 31, 2024
E00210	Cash and cash equivalents on the balance sheet	$ 15,229,036	$ 18,300,962
E00220	The “Due from the Central Bank and call loans” in compliance with the definition of cash and cash equivalents under IAS 7	24,029,958	22,963,965
E00230	The “bonds and securities sold under repurchase agreements” that meet the definitions of cash and cash equivalents under IAS 7	16,180,210	8,241,776
E00200	Balance of cash and cash equivalents at the end of the period	$ 55,439,204	$ 49,506,703

The notes attached shall constitute an integral part of this consolidated financial statement. (Refer to Auditor's Report presented by Deloitte Taiwan dated March 9, 2026)

Chairman: Kuei-Hsien Wang

Manager: Jeh-Yi Wang

Accounting Supervisor: Yun-Yun Hsu

China Man-Made Fiber Corporation and subsidiary
Notes to the Consolidated Financial Statements
January 1 to December 31, 2025 and 2024
(In Thousands of New Taiwan Dollars, Unless Otherwise Noted)

I. Company Profile

(I) China Man-Made Fiber Corporation (the “Company” or “CMFC”) was founded on May 11, 1955 in accordance with the Company Act and other related regulations. The Company was approved to be traded on the TWSE on December 2, 1963. Over the years after several rounds of increase and decrease in cash capital, the paid-in capital as of December 31, 2025 is NT$16,859,057 thousand.

(II) CMFC's main businesses are:

Manufacture, processing and trading of artificial fiber, glass paper, polyamine fiber, polyester fiber, chemical products and raw materials thereof;
Development, manufacture and trading of the machines referred to in the preceding paragraph;
Manufacture and trading of ethylene glycol, eto ethylene oxide, nonylphenol, ethylene, LGP and petrochemical industry-related products;
Lease and sale of national housing and commercial buildings constructed by commissioned contractors;
Distribution, sorting, handling and storage of various products;
Management of supermarkets, trading of fresh foods, vegetables, fish, dried merchandise and various seasonings;
Production and sale of steam and industrial power generated by cogeneration (no power may be sold to energy users);
Agency and distribution of cogeneration and pollution-prevention equipment, and contract of installation work;
Manufacture and trading of oxygen, liquid oxygen, nitrogen, argon, liquid argon, CO2 and compressed air;
Gas station.

(III) The consolidated financial statements are presented in the Company's functional currency – New Taiwan Dollar.

20 -

21 -

II. Financial reporting date and procedures

The Board approved the consolidated financial statements for publication on March 9, 2026.

III. Application of new and revised standards and interpretation

(I) The Company has applied the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), International Financial Reporting Interpretations Committee (IFRIC) and Standing Interpretations Committee (SIC) Interpretations (collectively, the “IFRS Accounting Standards”) recognized and endorsed into effect by the FSC (the “FSC Accounting Standards”) for the first time.

Amendments to IAS 21 "Lack of Exchangeability"

The application of the amendments to IAS 21 “Lack of Exchangeability” is not expected to have a material impact on the accounting policies of the consolidated company.

(II) Applicable FSC-approved IFRSs as of 2026

The new / amended / revised standards or interpretation	Effective Date per IASB
Amendments to IFRS 9 and IFRS 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
“Annual Improvements to IFRS – Volume 11”	January 1, 2026
IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments)	January 1, 2023

Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments"

The amendments primarily revise the classification requirements for financial assets, including:

If a financial asset includes a contingent feature that may alter the timing or amount of contractual cash flows, and such feature is not directly linked to changes in lending risks or costs (e.g., whether the debtor meets specific carbon emissions reduction targets), the contractual cash flows of such a financial asset may still be considered solely payments of principal and interest on the principal amount outstanding, provided that the following two conditions are met:

In all possible scenarios (both before and after the occurrence of the contingent event), the contractual cash flows are solely payments of principal and interest on the principal amount outstanding; and
The contractual cash flows under all possible scenarios are not significantly different from those of a financial instrument with the same contractual terms but without the contingent feature.
Clarifies that financial assets with non-recourse features refer to financial assets for which the entity's ultimate right to receive cash flows is contractually limited to the cash flows generated from specified assets.
Clarifies that contractually linked instruments use a waterfall payment structure to create multiple tranches of securities that establish the payment priority of holders of financial assets, thereby creating concentrations of credit risk and resulting in disproportionate allocation of cash flow shortfalls from the underlying pool among different tranches of securities.

Further to the above effects, the assessment of consolidated company on other IFRSs as of the day this consolidated financial statement was approved for release did not cause significant influence on the consolidated financial position and consolidated financial performance.

(III) The IFRS Accounting Standards released by the IASB but not yet approved and announcement effective by the Financial Supervisory Commission

The new / amended / revised standards or interpretation	IASB publication effective date (Note 1)
Amendment to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture and Investment in Associates.”	Undefined
IFRS 18 "Presentation and Disclosure in Financial Statements"	January 1, 2027 (Note 2)
IFRS 19 "Subsidiaries without Public Accountability: Disclosures” (including the 2025 amendments)	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

Note 1: Unless otherwise stated, the aforementioned new/revised/amended standards or interpretations become effective in the year after the respective date stated.

22 -

Note 2: On September 25, 2025, the FSC announced that enterprises in Taiwan shall apply IFRS 18 starting from January 1, 2028, and may elect for early adoption after IFRS 18 is endorsed by the FSC.

IFRS 18 "Presentation and Disclosure in Financial Statements" and related consequential amendments

IFRS 18 will replace IAS 1 "Presentation of Financial Statements". Key changes under this new standard include:

The consolidated company shall assess whether it has specific main business activities involving investment in particular types of assets and provision of financing to customers, and accordingly classify income and expense items in the statement of profit or loss into operating, investing, financing, income tax, and discontinued operations categories.
The income statement must present subtotals and totals for operating profit or loss, profit or loss before financing and income taxes, and profit or loss;
Guidance is provided to enhance aggregation and disaggregation requirements: the consolidated company must identify assets, liabilities, equity, income, expenses, and cash flows arising from individual transactions or other events, and classify and aggregate them based on shared characteristics so that each line item in the primary financial statements contains at least one common characteristic; Items with dissimilar characteristics must be disaggregated in the primary financial statements and the notes; The consolidated company should label such items as "other" only when a more informative label cannot be identified.
Increased disclosure of performance measures defined by management: When the consolidated company communicates performance measures that reflect management's view of some aspect of the entity's overall financial performance in public communications outside the financial statements, it shall disclose, in a single note to the financial statements, information regarding these management-defined performance measures, including a description, how they are calculated, a reconciliation to subtotals or totals specified by IFRS standards, and the effects of related reconciling items on income taxes and non-controlling interests.

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

23 -

When the consolidated company prepares cash flows from operating activities using the indirect method, operating profit or loss shall be used as the starting point for reconciliation.
Interest and dividends received by the consolidated company shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. If the consolidated company is assessed as having specific main business activities, the categories in which dividend income, interest income, and interest expenses are presented in the statement of profit or loss shall be considered in determining the classification of dividends received, interest received, and interest paid in the statement of cash flows. However, each of the aforementioned cash flows may only be classified within a single activity category in the statement of cash flows.

Apart from the impacts mentioned above, as of the approval date of these consolidated financial statements, the consolidated company is still evaluating the effects of amendments to other standards and interpretations on its financial position and performance. The related impacts will be disclosed upon completion of the assessment. disclosed when the evaluation is completed.

IV. Summary of important accounting policies

(I) Compliance Statement

The consolidated financial statements are prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the Regulations Governing the Preparation of Financial Reports by Public Banks, the Regulations Governing the Preparation of Financial Reports by Securities Firms, and the IFRS accounting standards recognized and endorsed into effect by the FSC.

(II) Basis of preparation

Except for the financial instruments on the basis of fair value and the recognition of net defined benefit liabilities on the basis of the present value of net defined benefit obligation net of the fair value of planned assets, this consolidated financial statement was compiled on the basis of historical cost.

The evaluation of fair value could be classified into Level 1 to Level 3 by the observable intensity and importance of related input value:

Level 1 input value: refers to the quotation of the same asset or liability in an active market as of the evaluation (before adjustment).
24 -

Level 2 input value: refers to the direct (the price) or indirect (inference of price) observable input value of asset or liability further to the quotation of Level 1.
Level 3 input value: the unobservable input value of asset or liability.

(III) Current and non-current assets and liabilities

Current assets include:

Assets held mainly for trading purpose;
Assets expected to be realized within 12 months after the balance sheet date; and
Cash and cash equivalents (not including those that are limited to exchange or repay liabilities exceeding 12 months after the balance sheet date).

Current liabilities include:

Liabilities held for trading purposes;
The liabilities to be liquidated upon due within 12 months after the balance sheet date (those with long-term refinancing or payment term rearrangement completed from the balance sheet date to the financial reports approved and published date are also classified as current liabilities), and
Liabilities for which the entity does not have a substantive right at the balance sheet date to defer settlement for at least 12 months after the balance sheet date.

However, CMFC is engaged in construction projects through Taichung Commercial Bank and Taichung Bank Leasing, and the business cycle is longer than one year. Therefore, the assets and liabilities related to the business adopt the business cycle as the standard to be classified as current or non-current.

(IV) Basis of consolidation

The preparation principles of the consolidated financial statements are consistent with those for the 2024 consolidated financial statements. Please refer to Note 17 and tables 6 and 7 for the details of subsidiaries, shareholding ratio, and scope of business.

The non-controlling interests of the subsidiaries are expressed separately from the interests of the owners of the Company.

The comprehensive income was proportioned to the non-controlling interest.

25 -

The total comprehensive incomes of the subsidiaries were non-controlling interest attributed to the Company's owners and the non-controlling interest, to become the balance of loss even as the non-controlling interest.

Changes in ownership interests in subsidiaries

When the changes of interest of the subsidiaries' ownership by the Consolidated Company do not lead to the loss of control, it is disposed of as interest transactions. The book value of the Consolidated Company and non-controlling interest has been adjusted to reflect the changes of the relative interest of subsidiaries. The differential between the adjustment amount of non-controlling interest and the fair value of consideration received is directly recognized as interest and belongs to the owner of the Company.

When the consolidated company loses its control of the subsidiary, the profit or loss from the disposal is the difference between the following two items: (1) The fair value of the consideration received and the total remaining investment at fair value of the former subsidiary at the date of control loss and (2) The assets (including goodwill) and liabilities and the total carrying amount of the non-controlling interest at the date of control loss of the former subsidiary. With respect to all amounts related to the subsidiary recognized by the consolidated company in other comprehensive profit loss, the accounting treatment is the same basis on which the consolidated company directly disposes of assets or liabilities.

The fair value of the remaining investment to a former subsidiary at the date of control loss is the amount of investment in an associate company and joint venture on initial recognition.

Please refer to Note 17 for the details of subsidiaries, shareholding ratio, and scope of business.

(V) Foreign Currency

When preparing the financial statements of each business entity of the consolidated company, the transactions in currencies other than the functional currency (the currency of the primary economic environment in which the entity operates) of the respective business entity (foreign currency) should be translated into the functional currency in accordance with the exchange rate on the transaction day.

Foreign currency monetary items are translated at the closing rate on each balance sheet date. Non-monetary items carried at fair value should be reported at the

26 -

rate that existed when the fair values were determined. The foreign non-currency items measured at historic cost are translated in accordance with the exchange rate on the transaction date without the need for a translation again.

Exchange differences arising when monetary items are settled or when monetary items are translated at different rates are reported in profit or loss in the period, with the following exceptions.

With respect to the monetary items receivable or payable for foreign operations, the settlement is currently not planned for the foreseeable future (thus forming part of the reporting entity's net investment in a foreign operation). The exchange differences originally are recognized as other comprehensive income, and the disposal of net investment is re-classified from equity to income.

The exchange difference arising from the non-monetary assets or liabilities (such as, equity instruments) in foreign currency measured at fair value that are translated in accordance with the spot exchange rate at the balance sheet date is booked as a profit or loss. However, the exchange difference arising from the changes in fair value recognized as other comprehensive income should be booked in the "Other comprehensive income."

When preparing the consolidated financial statements, the assets and liabilities of the consolidated company's foreign operations should be translated into New Taiwan dollars in accordance with the exchange rate on the balance sheet date. Except for the translations at the exchange rate on the transaction date during a period which has sharp fluctuations, the other income and loss are translated at the average exchange rate for the current period. The resulting exchange differences are recognized as other comprehensive income and are attributed to the owner of the Company and non-controlling interest.

(VI) Bonds Purchased under Resell/Notes Issued under Repurchase Agreements

For underwritten bonds and securities that are sold under RP and RS agreements, recognize interest expense and interest income on the accrual basis between the purchase and sale dates and agreed RP and RS date; also, recognize RP (Debt) and bonds and securities sold under resell agreements between the sale and purchase dates.

(VII) Inventory

Inventories include raw materials, supplies, work-in-progress, products contracted to be processed, finished goods and products. Inventory is valued in

27 -

accordance with the lower of cost or net cash value. When comparing cost and net cash value, except for the homogeneous inventories, it is based on the itemized lower of cost or net cash value. Net realizable value refers to the estimated sale price under normal circumstances net of the estimated cost needed to complete the project and the estimated expenses needed to complete the sale. Inventory cost is determined by the weighted-average method.

The construction inventories were stated at the cost invested actually. The cost for available-for-sale housing and land was amortized based on weighted-average building coverage method, and stated at the lower of cost or net realizable value at the end of period.

(VIII) Investments in the affiliated company

The term “associate” as set forth herein denotes an enterprise, which has significant effect upon the Consolidated Company, but is not a subsidiary or a joint venture.

The Consolidated Company’s adopts equity method for investment in associates. Under the equity method, investments in the associates were originally recognized at cost; the book value after the acquisition date fluctuates along with the distribution of profit or loss from the associate and other comprehensive income by the consolidated company. Additionally, the change in the interests the consolidated company holds in the associates was recognized pro rata to the shareholding percentages.

When the investee is an associate, the consolidated company chooses to adopt the treasury stock method to calculate the investment gain or loss from the associate.

When associates issue new shares, if the Consolidated Company fails to subscribe stock share proportionally to their shareholding, resulting in changes in shareholding ratio and thus causing changes in net equity investment, the increase or decrease amount should be adjusted to the additional paid-in capital – recognizing changes in net equity of associates under the equity method and investment under equity method. If the consolidated company did not subscribe to the new shares pro rata to the shareholding percentages and led to a decrease of the shareholding percentages subscribed to or obtained from the associates, nevertheless, the amount of other comprehensive income so recognized was reclassified pro rata to the decrease ratio in the associate. The accounting management was on the grounds same as the grounds the associate must comply with if it directly disposed assets or liabilities. If the aforementioned adjustment must be debited into capital reserve

28 -

where the balance of capital reserve yielded by the investment in equity method, the difference was debited as retained earnings.

In the event that the consolidated company's shares of loss in the associates equal to or exceed its equity in the associates (including the book value of investment in the associates in equity method and other long-term interest of the consolidated company' in the investment composition of the associates), the consolidated company' discontinued recognition of the further losses. The Consolidated Company' recognized extra losses and liabilities only in the event of occurrence of legal obligations, presumed obligations or within the scope that the Consolidated Company' had made payment on behalf of the associate.

When assessing impairment, the consolidated company has the overall book value (including goodwill) of the investment deemed as a single asset when comparing the recoverable amount and the book amount in order to conduct impairment testing. The recognized impairment loss is an integral part of the book amount of the investment. Any reversal of the impairment loss can be recognized within the range of the recoverable amount of the subsequently increased investment.

Besides, all relevant amounts relevant to the associates recognized in other comprehensive income were managed on the accounting grounds same as the grounds which it should comply with if the associates directly disposed of the relevant assets or liabilities.

The profit or loss resulting from the countercurrent, downstream and side-stream transactions between the consolidated company and the associate is recognized in the consolidated financial statement within the range that is irrelevant to the consolidated company's interest in the associate.

(IX) Property, plant and equipment

Real property, plant and equipment are recognized as costs, and they will be measured by the amount after the costs less the amount of accumulated depreciation and accumulated impairment afterwards.

The property, plant and equipment and facilities under construction were recognized at the amount of the costs after deducting the loss in the accumulated impairment. Cost includes professional service fees and loan costs that qualify for capitalization. When such assets are completed and reach expected use status, such assets will be classified to proper items under real property, plant and equipment and the provision of depreciation shall begin.

29 -

Except for self-owned land, the property, plant, and equipment are depreciated by significant parts over their useful lives on a straight-line basis. The consolidated company shall at least inspect the estimated service life, residual value and depreciation method by the day of the end of each year and postpone the effect of applying estimated accounting changes.

In the case of derecognizing property, plants and equipment, the difference between the net disposal price and the book value of the asset is recognized in profit or loss.

(X) Investment property

Investment property is the real property held for purpose of earning of rental income or appreciation or both. Investment property includes lands held at present without determination of future use.

Investment property is measured on the basis of initial cost (including transaction cost) and subsequent measurement shall be based on the subtraction of accumulated depreciations and accumulated impairment from cost.

The Consolidated Company has depreciation appropriated in accordance with the straight-line method

In removing investment property, the difference between the net proceeds of disposition and the book value shall be recognized as income.

(XI) Goodwill

Goodwill from business combination is recorded at acquisition cost and subsequently measured at cost less accumulated impairment.

For impairment test purposes, goodwill is allocated to each cash-generating unit that benefits from the synergy of a business combination.

In testing assets for impairment, the Company compares the carrying amounts of operating segments (CGUs with allocated goodwill) to their recoverable amounts on a yearly basis (or when impairment indicators exist). CGUs with allocated goodwill arisen from company combination in the current year should be tested for impairment before the end of the year. When the recoverable amount of CGUs is below the carrying amount, an impairment loss should be recognized to reduce first the carrying amount of goodwill of the CGU, and then the carrying amounts of other assets of the CGU proportionately. Any impairment loss should be directly recognized as loss in the current period. Subsequent reversal of impairment loss is not allowed.

30 -

On disposal of the relevant CGU, the amount attributable to goodwill is included in the determination of the gain or loss on disposal.

(XII) Intangible assets

Acquired separately

The intangible asset with limited useful life acquired separately was originally measured at cost and subsequently measured at cost, net of accumulated amortization and accumulated impairment losses. Intangible assets shall be subject to amortization under the straight-line method during its life span, and the estimation of life span, residual value and depreciation method shall be subject to review at least once a year and extend the effect of changes in applicable accounting policy. Intangible asset with indefinite useful lives is measured at cost net of accumulated impairment losses.

Derecognition

In removing intangible assets, the difference between the net proceeds of disposition and the book value shall be recognized as income.

(XIII) The impairment of real estate, plants and equipment, right-of-use assets, and intangible assets (except goodwill)

The consolidated company shall evaluate on each asset balance sheet date whether there are any signs showing possible impairment of real estate, plants and equipment, right-of-use assets, and intangible assets (except goodwill). If there is any indication of impairment occurring, the recoverable amount of the asset should be estimated. If the recoverable amount of an individual asset cannot be estimated, the consolidated company is to estimate the recoverable amount of the respective cash-generating unit. The common asset is amortized to each cash-generating unit in accordance with a consistent and reasonable sharing basis.

The intangible asset with indefinite useful lives and not yet available for use should be tested for impairment at least annually or should be tested when there is an indication of impairment.

The recoverable amount is the fair value net of cost or the value in use whichever is higher. When the recoverable amount of an individual asset or cash-generating unit is less than its book amount, the book amount of the asset or cash-generating unit should be reduced to its recoverable amount. The impairment loss is recognized in the profit or loss.

31 -

When the impairment loss was reversed subsequently, the book amount of the asset or cash-generating unit is increased to the adjusted recoverable amount, but the increased book amount may not exceed the book amount of the asset or cash-generating unit without recognizing the impairment loss in prior periods (net of amortization or depreciation). The reversed impairment loss is recognized in the profit or loss.

(XIV) Financial instruments

When the consolidated company has become a party to the instrument contract, the financial assets and financial liabilities are to be recognized in the consolidated balance sheet.

For the initial recognition of the financial assets and financial liabilities, if the financial assets or financial liabilities are not measured at fair value through profit or loss, it is measured at fair value plus transaction cost that is directly attributable to the acquisition or issuance of financial assets or financial liabilities. The transaction cost directly attributable to the acquisition or issuance of financial assets or financial liabilities that are measured at fair value through profit or loss is immediately recognized in the profit or loss.

Financial Assets

The customary transaction of financial assets is recognized and de-recognized in accordance with the trade date accounting. A customary transaction refers to the purchase or sale of financial assets and the delivery period is within the period prescribed by the regulations or customary market practice.

(1) Classification of measurement

The financial assets held by the consolidated company are financial assets at fair value through income statements, financial assets on the basis of cost after amortization, investment of debt instruments at fair value through other comprehensive income statements, and equity instruments at fair value through other comprehensive income.

A. Financial assets at fair value through profit and loss

Financial assets measured at fair value through profits or losses are financial assets that are mandatorily measured at fair value through profits or losses. Financial instruments designated at fair value through income statements included the investment of equity

32 -

instruments not designated at fair value through other comprehensive income and those not conforming to the standard of debt instruments on the basis of cost after amortization or at fair value through other comprehensive income.

Through the measurement of profit and loss according to the fair value, the financial assets are measured according to the fair value. The remeasured dividends and interests generated from profit or loss shall be recognized as other income and interest income. The profit or loss remeasured is recognized as other profit and loss. Please refer to Note 40 for the determination of fair value.

B. Financial assets on the basis of cost after amortization

If the financial assets of the consolidated company met both of the following conditions, classify as financial assets on the basis of cost after amortization:

a. Financial assets held under particular mode of operation and the purpose of holding is for the collection of cash flow from contracts; and
b. Cash flow generated on particular dates deriving from the contacts and the cash flow is wholly for the payment of principal and interest accrued from the outstanding amount of the principal.

The financial assets measured at the post-amortization cost (including cash and cash equivalents, due from the central bank & call loans to banks, investments in RS notes and bonds, discounts and loans, notes receivable at post-amortization cost, accounts receivable, other receivables, restricted assets and deposited guarantee bond margin) are recognized at initial recognition. After that, they would be measured by the total book amount determined by the effective interest method minus the post-amortization cost of any impairment loss, and any foreign currency exchange gains and losses which would be recognized in the profit and loss.

Interest income will be the product of effective interest rate and total book value of financial assets except under the following two conditions:

33 -

a. The interest income of financial assets procured or initiated under credit impairment will be the product of the effective interest rate after credit adjustment and the cost of financial assets after amortization.

b. Financial asset that has subsequently become credit-impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of the financial asset.

The term “credit-impaired financial assets” refers to financial assets whose active market has disappeared due to significant financial difficulty or breach of contract of the issuer or borrower, possible declaration of bankruptcy or other financial reorganization of the borrower, or any other financial difficulty.

Cash equivalents are time deposits within 3 months from the date of acquisition, with high liquidity, can be converted into cash with marginal risk on the change in value, and are used for the fulfillment of short-term commitment in cash settlement.

C. Debt instrument investments measured at fair value through other comprehensive income

if the investment of debt instruments by the consolidated company met both the two conditions below, classify as financial instruments at fair value through comprehensive income:

a. Financial assets held under the particular mode of operation and the purpose of holding being for collection of cash flow from contracts; and

b. Cash flow generated on particular dates deriving from the contacts and the cash flow is wholly for the payment of principal and interest accrued from the outstanding amount of the principal.

Other investment of debt instruments at fair value through comprehensive income should be measured at fair value. Changes in the book value shall be recognized as income under the calculation of interest income under the effective interest rate method and exchange gain and loss and impairment or reversal benefits shall be recognized as income. Other changes shall be recognized as other comprehensive income and reclassified as income at the disposition of investment.

34 -

D. Equity instrument investments measured at fair value through other comprehensive income

The consolidated company may make an irrevocable choice at the time of initial recognition for designating the investment of equity instruments not available-for-sale and not recognized by the acquirer under corporate merger and acquisition or with consideration at fair value through other comprehensive income for measurement.

The investment of equity instruments at fair value through other comprehensive income is measured at fair value. Subsequent changes in fair value will be recognized as other comprehensive income and accumulated into other equity. In the disposition of assets, accumulated gains or loss shall be directly transferred to retained earnings without classification as income.

The dividend of the investment of equity instruments at fair value through other comprehensive income shall be recognized as income when the right of the consolidated company in the collection of dividends is ascertained, unless the dividend is obviously representing the recovery of the cost of investment in part.

(2) Impairment of financial assets

The consolidated company shall, on each balance sheet day, evaluate the financial assets on the basis of cost after amortization on the basis of anticipated credit loss (including accounts receivable), the investment of debt instruments at fair value through other comprehensive income, and loss from receivable rents and impairment of contract assets.

Discounts and loans, accounts receivable and receivable rents shall be recognized for provisions for loss on the basis of anticipated credit loss within the perpetuity of the assets. Other financial assets shall be evaluated for any significant increase of risk from the day of initial recognition. If none is found, recognize for provision for anticipated credit loss along a period of 12 months. If it is, recognize for provision of anticipated credit risk within the perpetuity of the assets.

Anticipated credit loss is the weighted average loss of credit on the basis of the weight of the risk of default. Anticipated credit loss in a period of 12 months means the expected loss of credit from the financial

35 -

instruments within 12 months due to default. Anticipated credit loss with the perpetuity of the financial instruments means the expected loss of credit from the financial instruments within the perpetuity of these financial instruments.

For internal credit risk management purpose, the consolidated company, without considering the collateral, determines the following circumstances indicating that a default has occurred on the financial instrument:

A. There is internal or external information indicating that the debtor is no longer able to pay off a debt.

B. Payments are overdue for more than 90 days, unless there are reasonable and supporting information showing that the delayed default benchmark is more appropriate.

Further to the aforementioned evaluation, refer to the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans" for information on loan assets and consider the financial position of the borrowers and any overdue accounts in principal or interest payments. In addition, evaluate the collaterals pledged for the security of the debts and the possibility of recovery of loan assets. As per the aforementioned requirements, non-performing assets shall be classified as loss, doubtful, substandard, special mentioned and normal by the status of the collaterals and the duration of delinquency. Appropriation of 100%, 50%, 10%, 2% and 1% of the balances of the aforementioned loans as provision for loss shall be necessary. The aforementioned provision for loss shall be recognized in accordance with Letter Jin-Guan-Yin-Fa-Zi. No. 10010006830, which accounted for approximately 1% of the total loans. The appropriation for provision of property for loss shall be made at a ratio not falling below 1.5% as stated in Letter Jin-Guan-Yin-Guo-Zi. No. 10300329440, and appropriated at the higher amount of the aforementioned evaluation result and the ratio.

36 -

All impairment of financial assets is recognized through the reduction of the book value of the provisioned account. However, the provision for loss of investment of debt instruments at fair value through comprehensive income shall be recognized as other comprehensive income without the reduction of its book value.

(3) The de-recognition of financial assets

The consolidated company has financial assets de-recognized only when the contractual rights from the cash flows of a financial asset becomes invalid or when the financial assets are transferred and almost all the risks and rewards of the asset ownership have been transferred to other enterprises.

When financial assets measured at amortized cost are derecognized, the carrying amounts and collected considerations plus the difference between the sums of any cumulative gains or losses already recognized as other comprehensive income will be recognized as profit or loss. When particular debt instruments measured at fair value through comprehensive income is entirely removed, the total sum of any other accumulated gains or loss of the difference between book value and consideration recognized as other comprehensive income shall be recognized as income. When particular equity instruments measured at fair value through comprehensive income are entirely removed, the accumulated gains of loss shall be directly transferred to retained earnings without being classified as income.

Equity instruments

The debt and equity instruments issued by the consolidated company are classified as financial liabilities or equity pursuant to the contractual agreements and the definition of financial liabilities and equity instruments.

Equity instruments issued by the consolidated company are recognized for an amount after deducting the direct issuing cost from the proceeds collected.

The Company's equity retrieved is debited or credited to the equity. The Company's equity purchased, sold, issued, or cancelled is not recognized in the profit or loss.

Financial Liabilities
37 -

(1) Subsequent measurement

All financial assets shall be measured under the effective interest rate method on the cost after amortization except under the following circumstances:

A. Financial liabilities at fair value through profit and loss

Financial liabilities measured at fair value through profit or loss includes held-for-sale.

Financial liabilities measured at fair value through profit or loss (FVTPL) are evaluated at fair value. Generated interest is recognized as financial costs. Other profits or losses generated by remeasurement are recognized as other gains and losses. Please refer to Note 40 for the determination of fair value.

B. Financial guarantee contract

The consolidated company issued financial guarantee contracts not at fair value through income statement with initial recognition to reflect provision for loss for anticipated credit impairment and the amount after amortization, whichever is higher.

(2) De-recognition of financial liabilities

When derecognizing financial liabilities, the difference between the book amount and the consideration paid (including any transferred non-cash assets or assumed liabilities) is recognized as profit or loss.

Derivatives

The derivative instruments signed by the consolidated company include forward foreign exchange contracts, currency option contracts, interest rate structure products, non-delivery forward contracts, and asset swap contracts that are used to manage the interest rate and exchange rate risk of the consolidated company.

Upon signing the contracts, derivatives are recognized at fair value initially and then subsequently measured at fair value on the balance sheet date. The profit or loss resulting from the subsequent measurement is directly booked under the profit or loss. Then, the timing of recognizing the designated and effective hedging derivatives depends on the nature of the hedging relationship. When the fair value of the derivatives is positive, it is classified as

38 -

a financial asset; when the fair value is negative, it is classified as a financial liability.

Derivatives embedded in the master contract of the assets within the scope of IFRS 9 shall be classified on the basis of the overall contracts of the financial assets. If the derivatives are not embedded in the master contract of the assets within the scope of IFRS 9 (such as embedded in financial liabilities master contracts), and the embedded derivatives meet the definition of derivatives and the risks and characteristics of which are not closely associated with the risks and characteristics of the master contract and the omnibus contracts are not measured at fair value through income statement, such derivatives shall be construed as a unitary derivative.

Categories of financial instruments

If changes in the determined basis of contractual cash flow of financial assets or financial liabilities due to the interest rate benchmark reform are necessary for the direct results of the interest rate benchmark reform, and the new basis is equivalent to the basis before the change economically, the consolidated company adopted the practical expedient to deem the changes in the determined basis as the changes in effective interest rate. Apart from changes in the basis for the determined contractual cash flow due to the interest rate benchmark reform, if additional changes is made to financial assets or financial liabilities, the consolidated company adopts the practical expedient to make changes due to the interest rate benchmark reform, and then apply the requirements to the modification of financial instruments to any additional changes for which the practical expedient is not applicable.

(XV) Liability reserve

The recognized liability reserve amount is with the risk and uncertainty of the obligation considered, and it is the optimum estimate of the expenditure required to settle the obligations on the balance sheet date. Provision for liabilities shall be measured based on the discount value of the estimated cash flow for the settlement of obligation.

The provision for carbon fee liabilities recognized in accordance with Taiwan's Regulations Governing the Collection of Carbon Fees and related laws and regulations is measured based on the best estimate of the expenditures required to settle the obligation for the current year.

39 -

(XVI) Treasury stock

Treasury stock was stated at cost and shown as a deduction in shareholders’ equity when the Company repurchased the stock, while it was stated at fair value if it was donation accepted by the Company.

The gains resulting from disposal of the treasury stock, if any, were higher than the book value, the difference thereof was stated under “capital surplus - treasury stock.” If gains were lower than the book value, the difference should first be offset against capital surplus from the same class of treasury stock transactions, and the remainder, if any, should be debited to retained earnings.

When the Company retired treasury stock, the treasury stock was written off, and against the “capital surplus – stock premium” and “capital stock” on a pro rata basis. When the book value of the treasury stock exceeded the total of the “capital stock” and “capital surplus-capital stock premium”, the difference was charged to capital surplus generated from the same class of treasury stock transactions and to retained earnings for any remaining amount. When the book value was lower than the total, the difference was credited to capital surplus arising from the same class of treasury stock transactions.

(XVII) Recognition of revenue

The consolidated company, after identifying the performance obligations, had the transaction price amortized to each performance obligation and recognized as income when the performance obligations were fulfilled.

Contracts of which the time interval between the transfer of goods or services and the consideration is less than one year shall not have its major financial components, such as transaction price, adjusted.

Sales of products

The revenue from product sales is recognized as revenue and accounts receivable by the consolidated company at the time when the customer have set the prices and the right-of-use and are responsible for the resales and bear the risks of obsolete products.

When the material is supplied for processing, the ownership of the processed product is not transferred; therefore, the income is not recognized when the material is supplied.

Interest revenue
40 -

The interest income generated from financial assets is recognized when the economic benefit is likely to flow to the consolidated company and the amount of income can be reliably measured. Dividend revenues are recognized by the outstanding capital by the passage of time and the applicable effective interest rate on an accrual basis.

For a single or a group of similar financial asset that is reduced due to impairment losses, the subsequently recognized interest income is calculated in accordance with the interest rate that is used for the discounting of future cash flow when measuring the impairment loss.

Labor service provided

Labor service income is recognized at the time the service is provided.

Revenues yielded by the labor services rendered in accordance with the contract were recognized based on the progress degrees set forth under the contract.

Service fees and commission income

The consolidated company allocates the transaction price to each contract obligation when customers contracts recognize the obligation and then recognizes the income upon fulfilling each performance obligation (fee income and expense fulfills the performance obligations upon the provision of loans or other services). Contracts of which the time interval between the services and the consideration is less than one year shall not have its major financial components, such as transaction price, adjusted.

Dividend income

Dividend income from investments is recognized when the shareholders' right to receive payment is established; however, it is under the preconditions that the economic benefits associated with the transaction system are likely to flow into the consolidated company and the amount of revenues can be measured reliably.

41 -

(XVIII) Leases

The Consolidated Company assesses whether or not the arrangement is (or includes) a lease arrangement on the agreement date

The consolidated company is the lessor

When the lease term is to have all risks and returns attached to the ownership of assets transferred to the lessee, it is classified as a financing lease. All other leases are classified as operating leases.

Lease payments associated with finance leases include fixed payments, in-substance fixed lease payments, and variable lease payments determined by indices or rates, guaranteed residual value, exercise price of purchase options exercised with reasonable assurance, lease termination penalties reflected in the lease period, deducted payable lease incentives. Net investment in a lease is measured based on the sum of the present values of receivable lease payments and unguaranteed residual value plus initial direct costs and shall be expressed as finance lease receivables. Financial revenue is amortized into each accounting period to reflect the consolidated company's fixed rate of return available for each respective period from the outstanding net lease investment.

Lease payments for operating leases upon deduction of lease incentives are recognized as income on a straight-line basis in relevant lease periods. Initial direct costs generated in the acquisition of operating leases are added to the underlying asset carrying amount and recognized as expenses on a straight-line basis in lease periods.

The consolidated company is the lessee

Except for recognizing low-value asset leases applying to exemption and lease payments for short-term leases being recognized as an expense on a straight-line basis over the lease term, other leases will be recognized as right-of-use assets and lease liabilities at lease commencement date.

The right-of-use asset is measured at cost (including the amount equal to the lease liability at its initial recognition, lease payments made before the commencement of the lease less any received, any incurred by the lessee, and an estimate of costs to be incurred by the restoring the underlying asset to the condition required) less any depreciation and any accumulated impairment losses, and the adjustments was made to the remeasurement of lease liabilities.

42 -

Right-of-use assets are separately presented on the Consolidated Balance Sheet.

The right-of-use assets were depreciated on a straight-line basis over the period from the commencement date of the lease to expiration of its useful life or expiration of the lease term, whichever date is earlier.

Lease liabilities are measured initially based on the present value of lease payments (incl. fixed payments, in-substance fixed lease payments, and variable lease payments determined by indices or rates). If the implied interest rate of the lease is easily determined, the lease payments will be discounted to their present value using that interest rate. If such interest rate is not easily determined, the incremental borrowing rate will be used.

Subsequently, the lease liabilities are measured at amortized cost using effective interest method and the interest expenses are amortized over the lease term. If changes in indices or rates utilized to determine lease payments lead to changes in future lease payments, the merged company should remeasure lease liabilities and adjust right-of-use assets correspondingly. However, if right-of-use asset carrying amounts have already dropped to zero, remaining remeasurement amounts are recognized as profit or loss. For lease modifications that are not treated as a separate lease, the remeasurement of lease liabilities due to the reduced scope of the lease is to reduce the right-of-use assets, and to recognize the gain or loss of the partial or full termination of the lease; the remeasurement of the lease liabilities due to other modifications is to adjust the right-of-use assets. Lease liabilities are separately expressed on the individual balance sheet.

(XIX) Borrowing costs

Borrowing costs directly belonging to acquiring, building or producing assets that meet the requirements are part of the costs of such assets until the completion of all necessary activities that the assets reaching the status of expected use or sale.

The income of a temporary investment with a specific loan that has not yet met the essential requirement of capital expenditure is deducted from the loan cost that meets the essential requirement of capitalization.

In addition to the transaction stated in the preceding paragraph, all other loan costs are recognized as profit and loss upon occurring.

(XX) Government grants

43 -

The government subsidies shall only be recognized, provided that it can be reasonably convicted the consolidated company will comply with the supplementary terms for government subsidies and that the subsidies can be received.

If the government subsidies are used for compensating expenses or losses that have already incurred, or if the purpose is to provide the consolidated company with immediate financial support and if there are no related costs in the future, they shall be recognized as profit or loss during the collection period.

(XXI) Employee welfare

Short-term employee benefits

Liabilities relating to short-term employee benefits are measured by the non-discounted amount of the expected payment in exchange for employee services.

Retirement benefits

The retirement benefit for the retirement plan is determined by the amount of the pension that should be paid during the period in which the employee provides the service, and is recognized as expenses for that period.

The determined cost of benefit for determined benefit retirement plan (including the cost of service, net interest, and reevaluation) is based on the actuary of projected unit method. The net interest arising from the cost of services (including current service costs and net defined benefit liabilities) is recognized as an employee benefits expense when incurred. The value of second measurement (including the profits and loss under actuary and the return on assets of the plan net or interest) shall be recognized as other comprehensive incomes and as retained earnings, if realized. No reclassification as profits and loss in subsequent periods.

Net defined benefit liability (asset) is the appropriation deficit (surplus) of the defined benefit pension plan. Net determined benefit asset shall not exceed the refund of the appropriated fund or decrease the present value of appropriation of fund in the future.

Employees preferential deposit benefit

The companies of the consolidated financial statements provide preferred deposit for the employees, including the offering of fixed amount preferred deposit at special rate for the employees currently in employment and for the payment to the retired employees and current employees at their retirement.

44 -

The difference between the interest rate for the aforementioned preferred deposits and market rate shall fall within the scope of employee welfare.

According to the “Regulations Governing the Preparation of Financial Reports by Public Banks”, the interest from the preferred deposit for employees prearranged after retirement in excess of the interest under regular market rate shall be subject to actuarial calculation at the time of the retirement of the employees pursuant to IAS 19, “Employee Benefits” as recognized by FSC. However, the parameters for the assumptions in the actuarial calculation may be regulated by the competent authority, comply accordingly, if applicable.

Other long-term employee benefits

The accounting of long-term employee benefit and benefit after retirement is the same but related value under reevaluation shall be recognized as income.

(XXII) Income tax

Income tax expense is the sum of the current income tax and deferred income tax.

Income tax expenses in the current period

The consolidated company shall determine the current income (loss) based on the regulations set by the respective tax income declaration jurisdictions. The payable (recoverable) income tax shall be calculated accordingly.

Additional income tax on unappropriated earnings is calculated in accordance with the provisions of the Income Tax Act of the Republic of China, to be recognized in the year of the shareholder resolution meeting.

The adjustment to prior period income tax payable is booked as current income tax.

Deferred tax

Deferred tax is computed in accordance with the temporary differences between the book value of assets and liabilities and the tax bases of taxable income. Deferred income tax liabilities are generally recognized for all taxable temporary differences. Deferred income tax assets are recognized when there is a likelihood to have taxable income available for income tax credit resulting

45 -

from the expenses of deductible temporary differences and tax loss carryforwards.

The taxable temporary differences related to the investment in the equities of the subsidiaries, affiliates, and joint ventures are recognized as deferred income tax liabilities, except for those that the Consolidated Company can control the timing of reversing the temporary difference and the temporary difference is unlikely reversible in the foreseeable future. The deferred income tax asset arising from deductible temporary differences associated with such investment and equity is recognized as deferred income tax assets within the range of earnings that are with sufficient taxable income to realize temporary differences and are expected to be reversed in the foreseeable future.

The book amount of deferred income tax asset must be reviewed at each balance sheet date. The book amount of those that no longer have any sufficient taxable income to recover all or part of the asset, should be adjusted down. Those that are not originally recognized as deferred income tax assets should also be reexamined at each balance sheet date. The book amount of those that are likely to generate taxable income in the future for the recovery of all or part of its assets should be adjusted up.

Deferred income tax assets and liabilities are measured in accordance with the expected liability liquidation or the tax rate in the period when the asset is realized. The tax rate is based on the tax rate and tax laws that are legislated or substantively legislated at the balance sheet date. The measurement of deferred income tax liabilities and assets reflects the tax effect resulting from the book amount of the assets and liabilities expected to be recovered or liquidated at the balance sheet date.

Current & deferred income taxes

Current and deferred income taxes are recognized in the profit or loss, except for the current and deferred income taxes related to the items recognized in other comprehensive income or directly included in the equity are recognized in the other comprehensive income or directly included in the equity. If the current income tax or deferred income tax is resulting from a business consolidation, the income tax effect is included in the accounting process for consolidated company.

46 -

V. Major sources leading to major accounting judgments and uncertainties in estimate

When adopting accounting policy, the management of the consolidated company shall make related judgments, estimations, and assumptions for information that cannot be easily retrieved from other sources based on historical experiences and other relevant factors. Actual results may differ from the estimates.

The management continued to examine the estimates and basic assumptions. If the amendment affects only the current estimates, it is recognized in the current period. If the amendment of accounting estimates affects both current and future periods, it is recognized in the respective current and future periods.

Estimates and assumptions with regard to the main source of uncertainty

(I) Estimated impairment of financial assets

Estimated impairment of loans, discounts, bills purchased, receivables, debt instrument investments, and financial guarantee contracts is based on assumptions by the merged company with regard to default rate and default loss ratio. Taking into account the consolidated company's past experience, current market situation and future prediction, the consolidated company shall prepare a pro forma report and select appropriate inputs for impairment. For adopted key assumptions and entered values please refer to Note 40 and 41. If the actual future cash flows are less than expected, a material impairment loss may have resulted.

(II) Impairment of real property, plant and equipment

The evaluation of property, plant, and equipment impairment is based on the recoverable amount of the said equipment (i.e., the fair value of the said assets deducted by sales costs and higher value of use). The changes in market price, future cash flow, or discount rate will affect the recoverable amount of the said assets, which may result in the consolidated company's need to recognize impairment costs or reverse recognized impairment losses.

VI. Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand	$ 5,716,077	$ 7,552,464
Bank deposits	2,073,161	2,162,207
Notes and checks for clearing	961,600	905,423
Due to Central Bank and other banks	6,478,198	7,680,868
	$ 15,229,036	$ 18,300,962

(I) With regard to the aforementioned cash and cash equivalent balances, it has been determined based on past experience and foresight that no loss allowances are

appropriated for expected credit losses over 12 months as of December 31, 2025 and 2024.

(II) For the reconciliation between the cash and cash equivalent balances in the consolidated statements of cash flows and the related items in the consolidated balance sheets as of December 31, 2025 and 2024, please refer to the consolidated statements of cash flows.

(III) The amounts of certificate of deposit at other banks from the consolidated company used as the operation bond of Taichung Bank Securities Co., Ltd. as of December 31, 2025 and 2024 are both NT$200,000 thousand, and they are transferred to the refundable deposit, as described in Note 23.

VII. Due from Central Bank and lend to Banks

	December 31, 2025	December 31, 2024
Reserve for deposits
Reserve for deposits – account
A	$ 20,513,070	$ 18,617,683
Reserve for deposits – account
B	28,192,316	26,676,753
Financial Information Service
Co., Ltd. – liquidated account	2,998,516	4,083,630
Reserve for deposits in foreign currency	125,716	121,305
Call loans to banks	608,291	352,212
Reserve for trust funds compensation	120,000	90,000
	$ 52,557,909	$ 49,941,583

(I) With regard to the aforementioned Due from the Central Bank & Call Loans to Banks, it has been determined based on past experience and foresight that no loss allowances are appropriated for expected credit losses over 12 months as of December 31, 2025 and 2024.

(II) The deposit reserve is the average balance of various deposits that are required to be deposited as reserve on a monthly basis, and it is deposited to the reserve account at the Central Bank in accordance with the required deposit reserve ratio. The demand account reserve can be used only for the monthly adjustment of the deposit reserve.

(III) The reserve for trust funds compensation by Government bonds on the basis of cost after amortization on December 31, 2025 and 2024 is stated at the par value of NT$120,000 thousand and NT$90,000 thousand, respectively. Please refer to Note 38 for details.

48 -

VIII. Financial instrument at fair value through profit and loss

	December 31, 2025	December 31, 2024
Financial assets at fair value through profit and loss
Commercial papers	$ 29,713,055	$ 21,024,344
Listed stocks – domestic and emerging stock	1,621,413	1,217,680
Non listed (OTC) domestic stock	57,124	26,926
PEM Group Insurance policy assets	417,206	537,893
Beneficiary certificate	628,573	1,220,726
Domestic corporate bonds	22,721	329,763
Assets swap agreement	7,872,697	7,375,317
Foreign exchange contracts	1,635,247	3,825,317
Forward contract	12,764	72,218
FX options contracts	725,401	642,594
Interest rate derivatives	582,852	676,182
Interest rate futures contracts	10,609	15,440
	$ 43,299,662	$ 36,964,400
Financial liabilities at fair value through profit and loss
Foreign exchange contracts	$ 1,348,784	$ 1,484,499
Forward contract	17,910	10,604
FX options contracts	732,996	650,363
Interest rate derivatives	582,852	676,182
	$ 2,682,542	$ 2,821,648

(I) The consolidated company financial derivative contract related to a foreign exchange rate is a non-trading operation performed for the purpose of providing customers with a hedging tool for the foreign exchange position generated from import/export and foreign exchange and hedging the risk from business and meeting the need for foreign exchange funds.

(II) As of December 31, 2025 and 2024, the amounts (notional amounts) in the agreement of derivative financial instruments that have not matured are as follows:

	December 31, 2025		December 31, 2024
	Contract amount	Interest Rate Collars	Contract amount	Interest Rate Collars
Assets swap agreement	$ 7,842,900	2.15%~5.50%	$ 7,329,600	0.90%~5.50%
Foreign exchange contracts	155,975,502	-	172,426,239	-
Forward contract	1,341,968	-	2,998,221	-
FX options contracts	65,229,721	-	59,719,723	-
Interest rate futures contracts	451,973	-	990,869	-
Interest rate derivatives contract	6,190,692	0.00%~10.20%	4,131,841	0.00%~10.20%

IX. Bonds and securities sold under repurchase agreements

As of December 31, 2025 and 2024, the consolidated company's repurchase of coupons and bonds amounted NT$16,180,210 thousand and NT$8,241,776 thousand, with the interest rate range of 1.44% to 1.46% and 1.61% to 1.63%, and the re-sell amounts after the contract were NT$16,189,089 thousand and NT$8,244,707 thousand, respectively.

X. Notes receivable, accounts receivable, and other accounts receivable

	December 31, 2025	December 31, 2024
Notes receivable
Notes receivable - Taichung
Commercial Bank	$ 12,202,298	$ 10,803,653
Notes receivable	91,146	89,273
Less: Unrealized gain on interest	( 836,769 )	( 826,007 )
Less: Loss allowance - Taichung
Commercial Bank	( 183,734 )	( 164,321 )
	$ 11,272,941	$ 9,902,598

Please refer to Note 38 for the status on notes receivable as short-term loan guarantee.

	December 31, 2025	December 31, 2024
Accounts receivable
Accounts receivable	$ 1,116,823	$ 1,256,507
Accounts receivable - Taichung
Commercial Bank	764,224	810,366
Rent receivables	4,814,028	6,839,413
Receivable factoring	164,976	215,200
Receivable transfers	1,166,168	1,612,408
Interests receivable - Taichung
Commercial Bank	3,092,141	2,938,382
Beneficial rights of trusts receivable	87,404	799,738
Less: Unrealized gain on interest	( 515,076 )	( 779,319 )
Less: Loss allowance	( 25,078 )	( 37,488 )
Less: Loss allowance - Taichung
Commercial Bank	( 176,289 )	( 193,372 )
	$ 10,489,321	$ 13,461,835
Other receivables
Receivable spot exchange settlement payment	$ 14,124	$ 15,434
Receivables from related party loans	300,000	300,000
Acceptances receivable	509,546	721,108
Receivable proceeds for delivery of securities	2,415,880	1,275,058
Others	639,344	476,123
	3,878,894	2,787,723
Less: Allowance for losses	( 27,382 )	( 25,682 )
Less: Loss allowance - Taichung
Commercial Bank	( 127,561 )	( 133,002 )
	$ 3,723,951	$ 2,629,039

(I) Notes and accounts receivable

The consolidated company's average credit period for product sales was 30 to 90 days. Interests for accounts receivables were not calculated. If the credit term of 30 days is exceeded, the interest rate of 3% per annum will be calculated for the remaining balance of some customers whose payment has not been rendered. The consolidated company only conducts transactions with the parties which have passed the internal credit check, and if necessary, shipment may be stopped and guarantee notes may be needed to mitigate the potential risk of financial losses caused by default. The consolidated company will use other publicly available financial information and historical transaction records to rate major customers. The consolidated company continuously monitors the credit risk exposure and the credit rating of the counterparty, and the total transaction amount is distributed to various customers with qualifying credit ratings. Every year, the management reviews and approves, based on their level of authorization, the credit limit of counterparties to manage the credit risk exposure.

In order to mitigate credit risk, the management of the consolidated company assigns dedicated personnel responsible for the decision on credit line, credit approval and other monitoring procedures to ensure that the overdue receivables are recovered and appropriate actions are taken. In addition, the consolidated company will review the recoverable amount of receivables on each balance sheet date to ensure that appropriate impairment loss has been appropriated for the uncollectible receivables. Under the circumstance, the Company's management believes that the consolidated company's credit risk is significantly reduced.

Except for Taichung Commercial Bank Co., Ltd. and its subsidiary, the consolidated company adopts the simplified approach of the IFRS 9 to recognize the loss allowance of receivables based on the expected credit loss of the duration. The full-lifetime expected credit losses are calculated using Provision Matrix, which considers the historical default records and current financial status, industry economic conditions, as well as GDP forecast and industry outlook. Due to the historical experience of credit losses of the consolidated companies, there is no significant difference in the loss patterns of different customer groups. Therefore, the provision matrix does not further distinguish the customer base, and only sets the expected credit loss rate based on the overdue days of receivables.

51 -

If there is evidence that the counterparty is facing serious financial difficulties and the consolidated company cannot reasonably expect the recoverable amount back, the consolidated company will directly write off the relevant accounts receivable, but will continue its recourses, and the amount recovered will be recognized in profit or loss.

The consolidated company (excluding Taichung Commercial Bank and its subsidiary) measures the notes receivable and the loss allowance of accounts in accordance with the provision matrix:

December 31, 2025

	Not overdue	Overdue 1 to 30 days	Overdue 31 to 60 days	Overdue 61 to 120 days	Overdue over 120 days	Total
Expected credit loss rate	0%~2%	0%~3%	0%~4%	0%	100%
Total Book Value	$ 1,048,250	$ 110,693	$ 38,036	$ -	$ 10,990	$ 1,207,969
Allowance for loss (expected credit loss of the given duration)	( 9,663 )	( 3,039 )	( 1,386 )	-	( 10,990 )	( 25,078 )
Cost after amortization	$ 1,038,587	$ 107,654	$ 36,650	$ -	$ -	$ 1,182,891

December 31, 2024

	Not overdue	Overdue 1 to 30 days	Overdue 31 to 60 days	Overdue 61 to 120 days	Overdue over 120 days	Total
Expected credit loss rate	0%~3%	0%~5%	0%~6%	0%	100%
Total Book Value	$ 1,190,123	$ 94,612	$ 50,099	$ -	$ 10,946	$ 1,345,780
Allowance for loss (expected credit loss of the given duration)	( 19,769 )	( 4,008 )	( 2,765 )	-	( 10,946 )	( 37,488 )
Cost after amortization	$ 1,170,354	$ 90,604	$ 47,334	$ -	$ -	$ 1,308,292

The table of changes on receivables allowance loss (including bad debt expense withdrawal and deposit allowance loss) is as follows:

	2025	2024
Balance - beginning	$ 558,981	$ 652,160
Add: Recover the bad debts that have been written off	20,075	15,370
Added: provisioned bad debt expense withdrawal and deposit impairment loss.	146,836	346,827
Less: actual write-off	( 135,534 )	( 409,015 )
Reduced: Inversed expected credit impairment loss	( 10,755 )	( 52,401 )
Foreign currency translation differences	( 69 )	6,040
Balance - ending	$ 579,534	$ 558,981

The loss allowance of the above-mentioned receivables include notes receivable, accounts receivable, other receivables and the loss allowance from non-loans transferred to collection.

(II) Changes in carrying amount of accounts receivable of Taichung Commercial Bank and its subsidiary:

2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Total
Balance - beginning	$ 92,102,367	$ 600,757	$ 511,459	$ 93,214,583
Converted as anticipated credit loss within the perpetuity of the financial assets	( 1,706,776 )	1,708,396	( 1,620 )	-
Converted as financial assets with credit impairment	( 110,860 )	( 61,641 )	172,501	-
Converted as anticipated credit loss in 12 months	12,169	( 11,481 )	( 688 )	-
Initiated or procured receivables	23,144,542	12,623	49,916	23,207,081
Write-off bad debts	-	( 13,460 )	( 122,074 )	( 135,534 )
Derecognition	( 13,310,255 )	( 160,363 )	( 38,900 )	( 13,509,518 )
Foreign exchange settlement and other changes	( 31,779 )	17,004	23,626	8,851
Balance - ending	$ 100,099,408	$ 2,091,835	$ 594,220	$ 102,785,463

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Total
Balance - beginning	$ 97,009,735	$ 454,328	$ 756,937	$ 98,221,000
Converted as anticipated credit loss within the perpetuity of the financial assets	( 398,809 )	398,995	( 186 )	-
Converted as financial assets with credit impairment	( 130,375 )	( 69,896 )	200,271	-
Converted as anticipated credit loss in 12 months	9,274	( 8,942 )	( 332 )	-
Initiated or procured receivables	21,981,583	8,447	5,816	21,995,846
Write-off bad debts	-	( 2,555 )	( 406,460 )	( 409,015 )
Derecognition	( 26,618,103 )	( 188,119 )	( 92,735 )	( 26,898,957 )
Foreign exchange settlement and other changes	249,062	8,499	48,148	305,709
Balance - ending	$ 92,102,367	$ 600,757	$ 511,459	$ 93,214,583

The receivables of the Taichung Commercial Bank Co., Ltd. and its subsidiaries include: due from banks, due from CBC and lend to banks, bills and bonds purchased under resell agreements, bills receivable, credit card payments receivable, accounts receivable, bank acceptance bills, interest receivable, lease payments receivable, accounts receivable factoring, trust beneficiary rights receivable, securities settlement receivable, other receivables, other financial assets-total (including non-loan listing collection), refundable deposits, etc.

(III) Statement of changes in loss allowance for amounts receivable of Taichung Commercial Bank and its subsidiaries:

2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 209,038	$ 11,239	$ 176,153	$ 396,430	$ 96,047	$ 492,477
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 27,737 )	27,965	( 228 )	-	-	-
Converted as financial assets with credit impairment	( 656 )	( 2,207 )	2,863	-	-	-
Converted as anticipated credit loss in 12 months	1,779	( 1,567 )	( 212 )	-	-	-
Financial assets removed in current period	( 102,267 )	( 2,367 )	( 9,899 )	( 114,533 )	-	( 114,533 )
Procured or initiated new financial assets	114,983	830	14,161	129,974	-	129,974
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	67,230	67,230
Write-off bad debts	-	( 13,460 )	( 27,452 )	( 40,912 )	( 94,622 )	( 135,534 )
Recovered amount after write-off bad debts	-	-	-	-	20,075	20,075
Foreign exchange settlement and other changes	( 4,783 )	18,528	50,306	64,051	-	64,051
Balance - ending	$ 190,357	$ 38,961	$ 205,692	$ 435,010	$ 88,730	$ 523,740

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 156,321	$ 9,050	$ 210,939	$ 376,310	$ 157,314	$ 533,624
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 3,606 )	3,642	( 36 )	-	-	-
Converted as financial assets with credit impairment	( 1,031 )	( 1,402 )	2,433	-	-	-
Converted as anticipated credit loss in 12 months	1,496	( 1,274 )	( 222 )	-	-	-
Financial assets removed in current period	( 96,414 )	( 3,840 )	( 24,330 )	( 124,584 )	-	( 124,584 )
Procured or initiated new financial assets	152,815	934	3,457	157,206	-	157,206
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	254,178	254,178
Write-off bad debts	-	( 2,555 )	( 75,645 )	( 78,200 )	( 330,815 )	( 409,015 )
Recovered amount after write-off bad debts	-	-	-	-	15,370	15,370
Foreign exchange settlement and other changes	( 543 )	6,684	59,557	65,698	-	65,698
Balance - ending	$ 209,038	$ 11,239	$ 176,153	$ 396,430	$ 96,047	$ 492,477

The allowance loss for the abovementioned receivables includes allowance for bad debts for delinquent loans other than loans transferred from loans. Please refer to Note 23 for details.

(IV) For the status of notes receivable pledged by Taichung Commercial Bank and its subsidiaries as collateral for interbank financing, please refer to Note 38.

XI. Inventory

	December 31, 2025	December 31, 2024
Merchandise	$ 6,256	$ 1,461
Finished goods	576,097	913,604
Work in process	66,010	80,597
Raw materials	208,860	277,428
Supplies	115,811	149,254
	$ 973,034	$ 1,422,344

55 -

(I) The inventories of finished goods included the finished goods, by-products, supplies in transit by the consolidated company, primarily the finished goods produced by Kaohsiung petrifaction plant, ethylene glycol, and the finished goods of the polyester plant, polyester silk, et al.

(II) The total amount of land and buildings held for sale by the consolidated company as of December 31, 2025 and 2024 was NT$65,775 thousand. The amount relates to the He Ti co-development project located in Sanchong District, New Taipei City, which was jointly invested in by the consolidated company, Hung Chou Fiber Industrial Co., Ltd., and San Feng Construction Co., Ltd. in 1997 and completed in 2000. The unsold portion was assessed as having a net realizable value of zero, and a full allowance has therefore been recognized.

(III) The consolidated company's cost of goods sold related to inventories for 2025 and 2024 amounted to NT$10,134,996 thousand and NT$10,683,725 thousand, respectively. The cost of goods sold included inventory valuation losses (reversal gains) of NT$591 thousand and (NT$67,717 thousand), respectively, inventory write-off losses of NT$5,936 thousand and NT$6,563 thousand, respectively, and losses from production suspension of NT$993,184 thousand and NT$1,073,940 thousand, respectively.

(IV) The reversal of inventory to net realizable value in 2024 was due to an increase in market selling prices of the products.

(V) As of December 31, 2025 and 2024, the allowance for inventory losses was NT$234,785 thousand and NT$242,250 thousand, respectively.

XII. Prepayments

	December 31, 2025	December 31, 2024
Pre-paid expenses	$ 660,003	$ 819,586
Pre-paid materials purchases	80,416	98,167
Tax credit	300,195	290,677
	$ 1,040,614	$ 1,208,430

XIII. Other current assets

	December 31, 2025	December 31, 2024
Restricted assets – bank deposits	$ 396,526	$ 311,308
Others	7,945	44,664
	$ 404,471	$ 355,972

The restricted assets are mainly pledged by the consolidated company as collateral for customs clearance operations with the Customs Administration and for bank borrowings. Please refer to Note 38.

XIV. Notes discounted and loans – net

	December 31, 2025	December 31, 2024
Negotiation of export bills	$ 56,001	$ 138,036
Secured overdraft	6,169	5,427
Accounts receivable financing	31,230	30,780
Securities receivable financing	2,213,611	1,800,099
Loans receivable	130,410	-
Short-term loans	43,569,240	49,242,188
Short-term secured loans	111,639,203	110,586,385
Mid-term loans	118,425,127	105,755,811
Mid-term secured loans	156,838,000	146,310,330

(Continued)

	December 31, 2025	December 31, 2024
Long-term loans	$ 19,052,407	$ 16,713,870
Long-term secured loans	188,926,786	180,148,209
Delinquent Accounts	1,092,218	116,663
	641,980,402	610,847,798
Add: Adjustment of premium/discount	( 1,551 )	4,339
Less: Allowance for losses	( 7,996,568 )	( 7,374,840 )
	$ 633,982,283	$ 603,477,297

(I) As of December 31, 2025 and 2024, the balance of loans and other credits with frozen interest rates at Taichung Commercial Bank was NT$1,092,218 thousand and NT$116,663 thousand, respectively. The interest receivables not recorded were NT$31,378 thousand and NT$3,175 thousand, respectively.
(II) In 2025 and 2024, Taichung Commercial Bank did not have the cases of translation of creditor's rights without prosecution.
(III) The changes in the total book value of discounting and advances of Taichung Commercial Bank and its subsidiary are shown as follows: 2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Total
Balance - beginning	$588,380,635	$16,195,394	$6,276,108	$610,852,137
Converted as anticipated credit loss within the perpetuity of the financial assets	(8,379,934)	9,090,110	(710,176)	-
Converted as financial assets with credit impairment	(1,104,144)	(1,053,806)	2,157,950	-
Converted as anticipated credit loss in 12 months	5,113,975	(4,726,466)	(387,509)	-
Initiated or procured discount and loans	276,085,440	3,157,243	180,828	279,423,511
Write-off bad debts	-	-	(1,066,002)	(1,066,002)
Derecognition	(215,345,016)	(3,875,094)	(208,528)	(219,428,638)
Foreign exchange settlement and other changes	(26,521,396)	(939,577)	(341,184)	(27,802,157)
Balance - ending	$618,229,560	$17,847,804	$5,901,487	$641,978,851

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Total
Balance - beginning	$ 526,504,293	$ 15,147,713	$ 7,473,198	$ 549,125,204
Converted as anticipated credit loss within the perpetuity of the financial assets	( 6,030,970)	6,045,874	( 14,904)	-
Converted as financial assets with credit impairment	( 428,272)	( 492,753)	921,025	-
Converted as anticipated credit loss in 12 months	2,125,034	( 2,090,823)	( 34,211)	-
Initiated or procured discount and loans	299,739,607	2,749,609	184,012	302,673,228
Write-off bad debts	-	-	( 1,613,510)	( 1,613,510)
Derecognition	( 211,163,604)	( 4,162,847)	( 792,770)	( 216,119,221)
Foreign exchange settlement and other changes	( 22,365,453)	( 1,001,379)	153,268	( 23,213,564)
Balance - ending	$ 588,380,635	$ 16,195,394	$ 6,276,108	$ 610,852,137

(IV) Changes in allowance loss of discounting and advances of Taichung Commercial Bank and its subsidiary:

2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
Balance - beginning	$ 2,430,783	$ 1,042,766	$ 1,272,189	$ 4,745,738	$ 2,629,102	$ 7,374,840
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 18,238 )	113,544	( 95,306 )	-	-	-
Converted as financial assets with credit impairment	( 3,803 )	( 126,203 )	130,006	-	-	-
Converted as anticipated credit loss in 12 months	450,082	( 384,387 )	( 65,695 )	-	-	-
Financial assets removed in current period	( 1,061,634 )	( 161,864 )	( 45,630 )	( 1,269,128 )	-	( 1,269,128 )
Procured or initiated new financial assets	1,291,071	138,075	109,133	1,538,279	-	1,538,279
Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	-	-	-	-	372,950	372,950
Write-off bad debts	-	-	( 172,302 )	( 172,302 )	( 893,700 )	( 1,066,002 )
Recovered amount after write-off bad debts	-	-	-	-	1,340,004	1,340,004
Foreign exchange settlement and other changes	( 580,448 )	242,928	43,145	( 294,375 )	-	( 294,375 )
Balance - ending	$ 2,507,813	$ 864,859	$ 1,175,540	$ 4,548,212	$ 3,448,356	$ 7,996,568

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 2,144,996	$ 963,707	$ 1,464,248	$ 4,572,951	$ 2,708,150	$ 7,281,101
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 16,083 )	17,369	( 1,286 )	-	-	-
Converted as financial assets with credit impairment	( 1,943 )	( 82,389 )	84,332	-	-	-
Converted as anticipated credit loss in 12 months	113,715	( 109,065 )	( 4,650 )	-	-	-
Financial assets removed in current period	( 1,030,459 )	( 194,522 )	( 127,649 )	( 1,352,630 )	-	( 1,352,630 )
Procured or initiated new financial assets	1,434,693	141,397	25,287	1,601,377	-	1,601,377
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	302,479	302,479
Write-off bad debts	-	-	( 240,318 )	( 240,318 )	( 1,373,192 )	( 1,613,510 )
Recovered amount after write-off bad debts	-	-	-	-	991,665	991,665
Foreign exchange settlement and other changes	( 214,136 )	306,269	72,225	164,358	-	164,358
Balance - ending	$ 2,430,783	$ 1,042,766	$ 1,272,189	$ 4,745,738	$ 2,629,102	$ 7,374,840

XV. Financial assets at fair value through other comprehensive profit or loss

	December 31, 2025	December 31, 2024
Equity instrument investments measured at fair value through other comprehensive income
Equity investment	$ 10,966,546	$ 9,663,141
Debt instrument	94,081,297	94,057,013
	$105,047,843	$103,720,154

(I) Equity instrument investments measured at fair value through other comprehensive income

	December 31, 2025	December 31, 2024
Domestic publicly listed, OTC and Emerging Stock Board companies	$ 7,894,434	$ 6,954,660
Non listed (OTC) domestic stock	2,499,584	2,170,156
Overseas listed, OTC and non-listed companies	572,528	538,325
	$ 10,966,546	$ 9,663,141

The consolidated company invested in the aforementioned stocks of companies in line with its long-term investment strategic objective with the anticipation of return from long-term investment. The management of the consolidated company holds that the short-term fluctuation in the fair value of these investments shall be recognized as income or loss and is not congruent with the aforementioned long-term investment plan, therefore they chose to designate these investments as financial assets at fair value through other comprehensive income.

In 2025 and 2024, the consolidated company sold partial of its equity instruments with a fair value of NT$624,077 thousand and NT$1,423,474 thousand, respectively, and the cumulative unrealized valuation gain of NT$165,917 thousand and NT$504,139 thousand upon the disposal was transferred from other equity to retained earnings.

In 2025 and 2024, the consolidated company's investments in equity instruments designated as measured at fair value through other comprehensive income above that are recognized as dividend income were NT$404,768 thousand and NT$343,363 thousand, respectively.

For circumstances of equity instruments posting for mortgaging guarantee under other general loss or gain measured by fair value, please refer to Note 38.

(II) Debt instrument investments measured at fair value through other comprehensive income

	December 31, 2025	December 31, 2024
Corporate bonds	$40,250,809	$37,784,331
Government bonds	11,812,950	12,381,475
Overseas bond	40,003,794	42,401,938
Financial bonds	2,013,744	1,489,269
	$94,081,297	$94,057,013

Foreign bonds are valued in foreign currencies as follows:

	December 31, 2025	December 31, 2024
USD	$ 491,000	$ 592,300
AUD	561,000	587,000
EUR	90,000	60,000
GBP	170,000	165,000
NZD	445,000	495,000

As of December 31, 2025 and 2024, the consolidated company held foreign bonds measured at fair value through other comprehensive income for repurchase agreement transactions in the face amounts of NT$10,074,382 thousand (US$140,000 thousand and AUD$270,000 thousand) and NT$10,338,994 thousand (US$228,300 thousand and AUD$140,000 thousand), respectively. For information regarding their carrying amounts, please refer to Note 42.
For the years 2025 and 2024, after assessing the expected credit losses of debt instruments measured at fair value through other comprehensive income, the consolidated company recognized reversal gains (losses) impairment of assets of NT$1,409 thousand and NT$(11,138) thousand, respectively.
With respect to the credit risk management of debt instruments measured at fair value through comprehensive income and the assessment of impairment, please refer to Note 41.

XVI. Investment of debt instruments on the basis of cost after amortization

	December 31, 2025	December 31, 2024
Overseas bond	$ 21,025,748	$ 25,689,277
Government bonds	8,924,759	10,055,255
Negotiable certificate of deposits issued by Central Bank	50,790,000	47,830,000
Corporate bonds	22,254,708	24,028,177
Financial bonds	-	100,000
Treasury bills	378,344	725,321
Securitized merchandises	622,868	-
	103,996,427	108,428,030
Less: Allowance for losses	(27,986)	(37,978)
Less: Deduction of provision for trust compensation reserve and refundable security deposits	(670,500)	(640,500)
	$103,297,941	$107,749,552

(I) Foreign bonds are valued in foreign currencies as follows:

	December 31, 2025	December 31, 2024
USD	$ 510,438	$ 604,335
RMB	110,000	440,000
AUD	154,000	137,500
ZAR	680,000	680,000

(II) The face value of government bonds/foreign bonds measured at amortized cost provided by the merged company as repurchase agreement terms amounted to NT$500,000 thousand and NT$880,012 thousand (US$28,000 thousand), and NT$810,000 thousand and NT$3,049,005 thousand (US$93,000 thousand), in December 31, 2025 and 2024, respectively. For more information on carrying amounts, please refer to Note 42.
(III) For the years 2025 and 2024, after assessing the expected credit losses of debt instruments measured at amortized cost, the consolidated company recognized impairment reversal gains of NT$711 thousand and NT$3,061 thousand, respectively.
(IV) For information relating to credit risk management and impairment assessment of financial assets measured at amortized cost, please refer to Note 41.

XVII.Subsidiaries

(I) Subsidiaries included in the consolidated financial statements

The business entities of the consolidated financial statements are as follows:

Investor	Name of Subsidiary	Nature of the operations	Percentage of shareholdings (Note)
			2025 December 31	2024 December 31
China Man-Made Fiber Corporation	De Xing Investment Company	General investment business	100%	100%
	Chou Chin Industrial Co., Ltd.	Manufacturing and trading	50%	50%
	Pan Asia Chemical Corporation	Petrochemical business	44%	44%
	Taichung Bank Securities Investment Trust Co., Ltd.	Securities investment trust business	50%	50%
	Taichung Commercial Bank Co., Ltd.	Banking	28%	28%
De Xing Investment Company	IOLITE COMPANY LIMITED	General investment business	-	-
	Precious Wealth International Limited	General investment business	-	100%
Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	Food manufacturing, and distribution and warehousing of beverages	96%	96%
	Chou Chang Co., Ltd.	Distribution and warehousing of beverages	64%	64%
	Bomy International (British Virgin Islands) Co., Ltd.	General investment business	62%	62%
	Noble House Global Limited	General investment business	97%	97%
Noble House Glory Co., Ltd(Japan)	Noble House (the Royalty of the World) Co., Ltd.	Short-term accommodation service	100%	100%
Bomy International (British Virgin Islands) Co., Ltd.	Shanghai Bomy Food Stuff Co., Ltd.	Manufacturing and trading	99%	99%
Shanghai Bomy Food Stuff Co., Ltd.	Shanghai Bomy Consultancy Management Co., Ltd.	Consultation service	-	100%
	Shanghai Bangyi International Trade Co., Ltd.	International trade	100%	100%
	Hebei Hammock Company Limited	Manufacturing and trading	100%	100%

Investor	Name of Subsidiary	Nature of the operations	Percentage of shareholdings (Note)
			2025 December 31	2024 December 31
Taichung Commercial Bank Co., Ltd.	Taichung Insurance Brokers Co., Ltd.	Insurance broker	100%	100%
	Taichung Bank Leasing Corporation Limited	Leasing	100%	100%
	Taichung Bank Securities Co., Ltd.	Securities Brokerage	100%	100%
	Taichung Bank Securities Investment Trust Co., Ltd.	Securities investment trust business	38%	38%
Taichung Bank Leasing Corporation Limited	TCCBL Co., Ltd.	General investment business	100%	100%
TCCBL Co., Ltd.	Taichung Bank Financial Leasing (Suchou) Co., Ltd.	Financing leasing and investments	100%	100%
Taichung Bank Securities Co., Ltd.	Taichung Bank Venture Capital Co., Ltd.	Venture Investment	100%	100%

Note: The consolidated shareholding ratio.

The consolidated company has substantial control over Taichung Commercial Bank, so the Bank and its subsidiaries are included in the consolidated financial statements.
On August 14, 2023, the consolidated company resolved at the Board of Directors meeting to sell 100% of the equity interest in IOLITE COMPANY LIMITED. The full payment was received and the equity transfer was completed in October 2024. For details regarding the disposal, please refer to Note 36.
In December 2024, Precious Wealth International Limited resolved to reduce capital and return capital contributions in the amount of NT$8,229 thousand (JPY 39,347 thousand), and further resolved to proceed with liquidation and dissolution. The capital reduction base date was December 17, 2024, and the cancellation of registration was completed in January 2025.
In February 2025, Chou Chin Industrial Co., Ltd. resolved to increase its investment in Noble House Global Limited by NT$13,112 thousand (US$400 thousand). In addition, in March 2025, Yujyu Global Co., Ltd. resolved to increase its investment in NOBLE HOUSE GLORY Co., Ltd. by NT$13,231 thousand (JPY 60,000 thousand).
Shanghai Bomy Consultancy Management Co., Ltd. completed its deregistration in June 2025.
During 2025, the consolidated company participated in the cash capital increase of Taichung Commercial Bank and acquired an additional 20,471 thousand shares at a cost of NT$386,898 thousand. As the subscription was not made in proportion to its existing shareholding, the shareholding ratio changed,

resulting in an increase in capital reserve of NT$35,974 thousand. In addition, the portion of previously recognized other comprehensive income corresponding to the decrease in the shareholding ratio was transferred to retained earnings and current profit or loss, resulting in an increase in retained earnings of NT$64 thousand. A gain on disposal of investments of NT$908 thousand was recognized.

(II) Information of the significant but non-controlling equity in subsidiaries

Name of Subsidiary	Main places of business operations	Non-controlling equity shareholding and voting right ratio
		December 31, 2025	December 31, 2024
Taichung Commercial Bank	Taichung City	72%	72%
Name of Subsidiary	Profit and loss distributed to the non-controlling equity		Non-controlling interest
---	---	---	---
	2025	2024	December 31, 2025
Taichung Commercial Bank	$ 6,861,956	$ 6,272,794	$66,334,853
Others	( 87,473 )	498	3,635,645
Total	$ 6,774,483	$ 6,273,292	$69,970,498

The following summary of financial information of subsidiaries with significant non-controlling interests is prepared based on the amount before the inter-company cancelled transaction:

Taichung Commercial Bank and its subsidiaries

	December 31, 2025	December 31, 2024
Assets	$ 1,014,512,326	$ 972,079,102
Liabilities	( 922,762,875 )	( 889,987,718 )
Equity	$ 91,749,451	$ 82,091,384
Equity attributable to:
Owners of the Company	$ 25,414,598	$ 22,829,614
Non-controlling interests of Taichung
Commercial Bank	66,334,853	59,261,770
	$ 91,749,451	$ 82,091,384
	2025	2024
Net revenue	$ 20,641,615	$ 19,299,219
Net income	$ 9,057,493	$ 8,291,863
Other comprehensive income (loss)	813,239	( 625,025 )
Total comprehensive income	$ 9,870,732	$ 7,666,838
Profit attributable to:
Owners of the Company	$ 2,195,537	$ 2,019,069
Non-controlling interests of Taichung
Commercial Bank	6,861,956	6,272,794
	$ 9,057,493	$ 8,291,863
The total comprehensive income belongs to:
Owners of the Company	$ 2,392,665	$ 1,874,542
Non-controlling interests of Taichung
Commercial Bank	7,478,067	5,792,296
	$ 9,870,732	$ 7,666,838
Cash flow
Operating activities	$ 4,357,936	$ 23,957,285
Investing activities	1,329,318	( 31,238,711 )
finance activities	365,648	( 3,647,015 )
Impact of changes in exchange rate on cash and cash equivalents	( 30,153 )	83,737
Net cash inflow (outflow)	$ 6,022,749	($ 10,844,704)

XVIII. Investment under the equity method

	December 31, 2025	December 31, 2024
Investments in the affiliated company	$ 730,454	$ 842,270

(I) The balance of the consolidated company's investments in associate companies:

	December 31, 2025	December 31, 2024
Individual non-dominant associates
Nan Chung Petrochemical Corporation	$ 717,387	$ 827,242
Wk Taipei Co., Ltd	1,380	984
Storm Model Management Co., Ltd.	6,542	4,204
Lay Coffee Co., Ltd.	5,145	9,840
	$ 730,454	$ 842,270

In October 2024, the consolidated company, through Chou Chin Industrial Co., Ltd., made a new investment to acquire a 33% equity interest in Lay Coffee Co., Ltd., with an investment cost of NT$10,000 thousand.
In April 2025, the consolidated company participated in the cash capital increase of Storm Model Management Co., Ltd. through De Xing Investment Company, acquiring an additional 224 thousand shares at an investment cost of NT$2,235 thousand.

(II) Summarized information of individually immaterial associates.

	2025	2024
Share of the Consolidated Company
Net loss of current period	($ 114,617)	($ 114,211)
Current period other comprehensive income	566	( 402 )
Total comprehensive loss	($ 114,051)	($ 114,613)

With respect to investments adopting the equity method and the consolidated company's share of profit or loss and the other comprehensive income, Wk Taipei Co., Ltd, Storm Model Management Co., Ltd. and Lay Coffee Co., Ltd. did not have audited financial reports, while the rest did offer audited financial reports. The management of the consolidated company believed that the un-audited companies should not have significant impact to the overall financial report.

(III) For the mortgage guarantee situation of investments through the equity method, see Note 38.

XIX. Property, plant and equipment

	December 31, 2025	December 31, 2024
Book value of each category
Proprietary land	$ 11,911,968	$ 11,899,501
House and Building	2,095,458	2,189,172
Machine and Equipment	3,923,867	4,119,651
Transportation Equipment	41,693	43,345
Machinery and equipment	213,476	172,355
Other equipment	199,534	220,116
Construction in process and prepayment for machinery purchase	11,814,486	10,185,370
	$ 30,200,482	$ 28,829,510
	2025
---	---	---
	Land	House and Building
Cost
Balance - beginning	$ 11,984,214	$ 5,590,027
Increase in current period	-	48,330
Decrease in current period	-	( 942)
Reclassification	-	16,350
Foreign exchange impact amount	12,467	( 164)
Balance - ending	11,996,681	5,653,601
Accumulated depreciation
Balance - beginning	-	3,000,915
Increase in current period	-	156,159
Decrease in current period	-	( 942)
Foreign exchange impact amount	-	2,031
Balance - ending	-	3,158,163
Accumulated impairment
Balance - beginning	84,713	399,940
Increase in current period	-	-
Decrease in current period	-	-
Foreign exchange impact amount	-	40
Balance - ending	84,713	399,980
Net - ending	$ 11,911,968	$ 2,095,458
	2024
---	---	---
	Land	House and Building
Cost
Balance - beginning	$ 11,383,495	$ 5,248,023
Increase in current period	-	77,960
Decrease in current period	-	-
From investment property	600,871	43,952
Reclassification	-	215,823
Foreign exchange impact amount	( 152)	4,269
Balance - ending	11,984,214	5,590,027
Accumulated depreciation
Balance - beginning	-	2,848,656
Increase in current period	-	143,392
Decrease in current period	-	-
From investment property	-	3,895
Reclassification	-	-
Foreign exchange impact amount	-	4,972
Balance - ending	-	3,000,915
Accumulated impairment
Balance - beginning	84,713	399,600
Increase in current period	-	-
Decrease in current period	-	-
Foreign exchange impact amount	-	340
Balance - ending	84,713	399,940
Net - ending	$ 11,899,501	$ 2,189,172

In 2024, the reclassification of property and equipment included a decrease of NT$1,991 thousand due to the transfer of construction in progress and prepaid equipment to expenses.

(I) In 2025 and 2024, due to a decline in the expected future economic benefits of the equipment in the chemical industry segment, the consolidated company recognized impairment losses of NT$241,876 thousand and NT$330,152 thousand, respectively, as the recoverable amounts were lower than the carrying amounts.

The consolidated company determines the recoverable amount of the equipment in the chemical industry sector after deducting the fair value from cost of disposal. Relevant fair values are determined through comprehensive evaluation using the cost method and market approach. The main assumptions include replacement cost under cost method, market approach functionality, economic loss, and other necessary adjustments, which fall under Level 3 fair value measurement.

(II) Property and equipment of the consolidated company are appreciated in accordance with the straight line method over the useful years as follows:

House and Building
House	9 to 60 years
Renovation engineering	5 to 30 years
Machine and Equipment	2 to 47 years
Transportation Equipment	2 to 15 years
Machinery and equipment	5 years
Other equipment	1 to 30 years

(III) Uncompleted projects and pre-payments for business facilities by the merged company as of December 31, 2025 and 2024 are mainly related to the office building of the merged company which is currently under construction.

(IV) Buildings leased out by the merged company as operating leases for a period of 1–5 years The lessee has no preferential purchase option with regard to the asset when the lease period ends. Total receivable lease payments for operating leases are as follows:

	December 31, 2025	December 31, 2024
First year	$ 1,275	$ 903
Second year	789	748
Third year	69	666
Fourth year	47	51
Fifth year	18	23
	$ 2,198	$ 2,391

(V) Please see Note 38 for the status on property, plant and equipment provided as pledge collaterals.

XX. Lease agreements

(I) Right-of-use assets

	December 31, 2025	December 31, 2024
Carrying amount of the right-of-use asset
Land and house	$ 1,074,346	$ 1,266,746
Transportation Equipment	31,341	40,304
Machine and Equipment	8,730	15,714
	$ 1,114,417	$ 1,322,764
	2025	2024
Addition of right-of-use assets	$ 82,826	$ 371,318
Depreciation expense of the right-of-use asset
Land and house	$ 211,033	$ 200,218
Transportation Equipment	19,301	27,980
Machine and Equipment	6,984	6,984
	$ 237,318	$ 235,182

In 2025 and 2024, the consolidated company terminated partial lease contracts for land and buildings and transportation equipment in advance, derecognized NT$69,344 thousand and NT$107,569 thousand of the right-of-use assets above, and recognized lease termination gains of NT$3,446 thousand and NT$9,480 thousand, respectively.

Except for the early terminations, additions, and depreciation expenses mentioned above, there were no significant subleases or impairment of right-of-use assets during 2025 and 2024.

(II) Lease liabilities

	December 31, 2025	December 31, 2024
Carrying amount of the lease liabilities
current	$ 214,834	$ 228,859
Non-current	$ 809,771	$ 996,347

The range of discount rates for lease liabilities is as follows:

	December 31, 2025	December 31, 2024
Land and house	1.01%~5.95%	1.01%~5.95%
Transportation Equipment	1.01%~4.50%	1.01%~2.99%
Machine and Equipment	1.82%	1.82%

(III) Important rental activities and terms

The merged company has leased several machines and transportation equipment for production and operations for a period of 1–8 years. The lease agreement does not stipulate renewal of the lease or purchase options at the time of expiry of the lease.

The consolidated company also leases certain branch offices, ATM sites, and transportation equipment, with lease terms ranging from 1 to 15 years. Lease payments are adjusted based on prevailing market rental rates. The merged company has no preferential purchase option with regard to the leased land and buildings at the time of expiry of the lease.

(IV) Other lease information

For more details on operating lease agreements for self-owned buildings and investment property of the merged company, please refer to Note 19 and 21, respectively.

	2025	2024
Short-term lease expense	$ 7,340	$ 10,689
Low-value asset lease expense	$ 12,639	$ 12,110
Total cash of leases outflow	($ 251,332)	($ 260,387)

The merged company chooses to apply recognition exemption as applicable to office and transportation equipment leased for short periods and computer and office equipment that meets low-value asset criteria. Right-of-use assets and lease liabilities for said equipment is not recognized.

XXI. Investment property

	2025
	Land	Buildings	Total
Cost
Balance - beginning	$ 2,586,116	$ 1,058,698	$ 3,644,814
Increase in current period	-	-	-
Balance - ending	2,586,116	1,058,698	3,644,814
Accumulated depreciation
Balance - beginning	-	56,924	56,924
Increase in current period	-	22,068	22,068
Balance - ending	-	78,992	78,992
Accumulated impairment
Balance - beginning	18,094	1,000	19,094
Increase in current period	-	-	-
Balance - ending	18,094	1,000	19,094
Net - ending	$ 2,568,022	$ 978,706	$ 3,546,728

	2024
	Land	Buildings	Total
Cost
Balance - beginning	$3,186,987	$1,090,853	$4,277,840
Increase in current period	-	12,024	12,024
Reclassified as property, plant, and equipment	(600,871)	(44,179)	(645,050)
Balance - ending	2,586,116	1,058,698	3,644,814
(Continued)

(Continued)

	2024
	Land	Buildings	Total
Accumulated depreciation
Balance - beginning	$ -	$ 35,172	$ 35,172
Increase in current period	-	25,647	25,647
Reclassified as property, plant, and equipment	-	( 3,895 )	( 3,895 )
Balance - ending	-	56,924	56,924
Accumulated impairment
Balance - beginning	18,094	1,000	19,094
Increase in current period	-	-	-
Balance - ending	18,094	1,000	19,094
Net - ending	$ 2,568,022	$ 1,000,774	$ 3,568,796

Investment property is leased out for a period of 1-10 years. Upon closure of the leasehold duration, the lessee was not entitled to preferential leasehold power over the real estate.

As of December 31, 2025 and 2024, total receivable lease payments for operating leases of investment property are as follows:

	December 31, 2025	December 31, 2024
First year	$ 33,499	$ 30,058
Second year	23,604	30,028
Third year	9,433	19,514
Fourth year	5,538	5,342
Fifth year	4,213	1,227
More than 5 year	22,414	-
	$ 98,701	$ 86,169

The merged company has adopted general risk management policies to reduce residual asset risks of leased out investment property at the time of lease expiry.

Investment property of the appreciated in accordance with the straight line method over the useful years as follows:

House and Building

House

20 to 60 years

Renovation engineering

2 to 29 years

(I) The fair values of the consolidated company's investment properties as of December 31, 2025 and 2024 were NT$4,792,226 thousand and NT$4,712,992 thousand, respectively. Of these amounts, NT$714,867 thousand and NT$715,973 thousand, respectively, were not appraised by independent valuers but instead were measured by the consolidated company's management using valuation models commonly adopted by market participants with Level 3 inputs.

(II) Certain investment properties were reclassified to property, plant, and equipment in 2024 as they were converted to owner-occupied use. Please refer to Note 19.

(III) All investment in real estate owned by the Consolidated Company' was in its own interests. Please see Note 38 for the status on investment property provided as pledge collaterals.

XXII. Intangible assets

	December 31, 2025	December 31, 2024
Computer software	$ 542,565	$ 311,162
Rights to management	28,000	28,000
Royalties for waterway facilities	175	182
Patent and trademark rights	628	168
Goodwill	-	-
	$ 571,368	$ 339,512

(I) With respect to the consolidated company acquiring the shareholding of its subsidiaries, goodwill is considered when the acquisition cost is higher than the net asset value. As of December 31, 2025, the impairment loss was fully provided.

(II) The intangible assets of the consolidated company is the assigned right of operation from Feng Sing Securities. The right of operation is intangible assets that the life span cannot be determined and no amortization is made. As of December 31, 2025, no impairment of such right of operation has been declared in the evaluation.

(III) Changes in intangible assets are as follows:

	2025
	Royalties	Computer software	Rights to management	Patent and trademark rights	Total
Cost
Balance - beginning	$ 159,234	$ 311,162	$ 28,000	$ 168	$ 498,564
Increase in current period	-	377,304	-	525	377,829
Amortization in the current period	-	( 149,706 )	-	( 65 )	( 149,771 )
Reclassification	-	3,826	-	-	3,826
Net exchange differences	( 7 )	( 21 )	-	-	( 28 )
Balance - ending	159,227	542,565	28,000	628	730,420
Accumulated impairment
Balance - beginning	159,052	-	-	-	159,052
Provided in the current period	-	-	-	-	-
Balance - ending	159,052	-	-	-	159,052
Net - ending	$ 175	$ 542,565	$ 28,000	$ 628	$ 571,368

75 -

	2024
	Royalties	Computer software	Rights to management	Patent and trademark rights	Total
Cost
Balance - beginning	$ 159,255	$ 252,029	$ 28,000	$ -	$ 439,284
Increase in current period	-	147,191	-	172	147,363
Amortization in the current period	-	( 94,825 )	-	( 4 )	( 94,829 )
Reclassification	-	6,579	-	-	6,579
Net exchange differences	( 21 )	188	-	-	167
Balance - ending	159,234	311,162	28,000	168	498,564
Accumulated impairment
Balance - beginning	159,052	-	-	-	159,052
Provided in the current period	-	-	-	-	-
Balance - ending	159,052	-	-	-	159,052
Net - ending	$ 182	$ 311,162	$ 28,000	$ 168	$ 339,512

Amortization expenses is appropriated in accordance with the straight line method and the years of useful life illustrated below:

Computer software
1 to 18 years
Patent and trademark rights
10 years

XXIII. Other assets

	December 31, 2025	December 31, 2024
Refundable deposit	$ 3,090,604	$ 2,533,339
Collected payment of shares underwritten and pending payments to be delivered	16,641	60,592
Non-delinquent loans restated from loans - net	3,888	3,517
Credit transactions	978	243
Others	27,218	113,155
	$ 3,139,329	$ 2,710,846

Other assets - Others are mainly catalysts.

(I) As of December 31, 2025 and 2024, the consolidated company provided time deposits and government bonds measured at amortized cost to the court as collateral for provisional attachments, as security for overdraft facilities of USD settlement accounts, and as business guarantee deposits, all with a face value of NT$750,500 thousand. These amounts are recorded under refundable deposits. Please refer to Note 38.

(II) Non-loans transferred to collection - Breakdown of net:

	December 31, 2025	December 31, 2024
Non-delinquent loans restated from loans	$ 40,044	$ 5,299
Less: Allowance for losses - Taichung Commercial Bank (Note 10)	( 36,156 )	( 1,782 )
	$ 3,888	$ 3,517

(III) Details of delinquent accounts, net are summarized as follows:

	December 31, 2025	December 31, 2024
Delinquent Accounts	$ 3,334	$ 3,334
Less: Loss allowance	-	-
Collection (Note 10)	( 3,334 )	( 3,334 )
	$ -	$ -

XXIV. Borrowings

(I) Shot-term borrowings

	December 31, 2025	December 31, 2024
Secured loans
-Secured loan	$ 17,266,098	$ 17,859,774
Unsecured loans
- Credit loan	5,240,000	4,760,000
- Material procurement loan	512,045	1,055,119
	5,752,045	5,815,119
	$ 23,018,143	$ 23,674,893
Interest Rate	1.98%~3.95%	1.98%~4.93%

For the aforementioned loan collateral information, please refer to Note 38

(II) Short-term notes payable

	December 31, 2025	December 31, 2024
Short-term notes payable	$ 7,190,000	$ 6,415,000
Less: Discount of short-term notes and bills payable	( 13,838 )	( 11,963 )
	$ 7,176,162	$ 6,403,037
Interest Rate	1.52%~2.62%	1.50%~2.73%

(III) Long-term borrowings

	December 31, 2025			December 31, 2024
	Collateral (Note 38)	Interest Rate	Amount	Amount
Secured loans
China Man-Made Fiber Corporation
Taiwan Business Bank	Land and buildings	1.99%	$ 215,600	$ 232,800
Land Bank of Taiwan	Land and buildings	2.19%	175,000	175,000
Union Bank of Taiwan	Stock of Taichung Commercial Bank	2.34%	500,000	312,500
Bank of Panshin	Land, buildings and Stock of Taichung Commercial Bank	2.06%~2.32%	1,860,000	1,800,000
Sunny Bank	Stock of Taichung Commercial Bank	2.29%~2.32%	1,300,000	600,000
The Shanghai Commercial & Savings Bank	Land and buildings	2.18%	232,500	297,500
Bank of Kaohsiung	-	-	-	500,000
Shin Kong Commercial Bank	Land and buildings	2.25%~2.30%	1,425,000	1,475,000
Taiwan Cooperative Bank	Land and buildings	2.08%~2.23%	862,000	900,000

(Continued)

	December 31, 2025			December 31, 2024
	Collateral (Note 38)	Interest Rate	Amount	Amount
Pan Asia Chemical Corporation
Taiwan Cooperative Bank	Land and buildings	2.23%	$ 338,000	$ 446,000
Union Bank of Taiwan	Stocks of CMFC	2.33%	48,000	60,000
Taichung Bank Leasing Corporation Limited
Land Bank of Taiwan	Land and buildings	2.06%	510,000	510,000
Chou Chin Industrial Co., Ltd.
Union Bank of Taiwan	Stocks of Hua Nan Financial Holdings	2.44%	145,000	150,000
First Commercial Bank	Machinery, equipment, and plant	2.43%~2.51%	252,282	403,141
Taiwan Business Bank	Machine and Equipment	2.43%~2.50%	538,220	234,970
Chou Chang Co., Ltd.
Far Eastern International Bank	-	-	-	111,375
Unsecured loans
China Man-Made Fiber Corporation
Bank of Kaohsiung	-	-	-	100,000
Mizuho Bank	-	2.30%~2.31%	170,000	300,000
Pan Asia Chemical Corporation
Bank of Panshin	-	2.37%	80,000	100,000
			8,651,602	8,708,286
Less: Amount due in one year			( 412,801 )	( 647,706 )
			$ 8,238,801	$ 8,060,580

XXV. Bills and bonds sold under repurchase agreements

	December 31, 2025	December 31, 2024
Government bonds	$ 500,254	$ 810,000
Overseas bond	9,668,439	12,034,223
	$ 10,168,693	$ 12,844,223

Foreign bonds are valued in foreign currencies as follows:

	December 31, 2025	December 31, 2024
USD	$ 158,567	$ 295,537
AUD	222,917	115,027

Post-period re-purchase amount and interest rate are as follows:

	December 31, 2025	December 31, 2024
Government bonds	$ 501,388	$ 811,062
Overseas bond	9,740,557	12,160,479
	$ 10,241,945	$ 12,971,541
Government bonds	1.34%~1.35%	1.46%~1.48%
Overseas bond	3.71%~4.17%	4.58%~5.46%

XXVI. Due to Central Bank and other banks

	December 31, 2025	December 31, 2024
Interbank lending	$ 7,342,930	$ 19,637,260
Due to Chunghwa Post Co., Ltd.	7,512,701	12,700
Deposits with other banks	1,312	1,255
	$ 14,856,943	$ 19,651,215
XXVII. Other payables
	December 31, 2025	December 31, 2024
Payable expenses	$ 3,215,356	$ 3,093,132
Receivable accounts for settlement	2,686,834	1,153,406
Payable interest	1,364,393	1,269,938
Notes and checks in clearing	961,600	905,423
Acceptances payable	509,781	721,255
Payable spot exchange settlement payment	22,873	17,233
Account payable for underwriting	12,031	19,398
Others	1,060,900	1,189,066
	$ 9,833,768	$ 8,368,851
XXVIII. Other liabilities
	December 31, 2025	December 31, 2024
current
Unearned receipt	$ 423,433	$ 379,546
Collections received on behalf of others	124,350	172,252
Others	197,498	179,211
	$ 745,281	$ 731,009
Non-current
Other financial liabilities - Taichung Commercial Bank Co., Ltd.	$ 6,190,692	$ 4,131,841
Guarantee deposits received	760,922	835,249
Others	96,929	71,965
	$ 7,048,543	$ 5,039,055
XXIX. Customer deposits and remittances
	December 31, 2025	December 31, 2024
Check deposits	$ 10,881,441	$ 10,451,284
Demand deposits	217,415,216	210,493,022
Current saving deposits	168,886,302	168,444,319
Time deposits	232,602,727	194,788,679
Time saving deposits	212,615,215	222,072,094
Remittance	72,343	30,882
	$ 842,473,244	$ 806,280,280

78 -

XXX. Bonds payable

	December 31, 2025	December 31, 2024
Subordinate financial bonds	$ 15,150,000	$ 13,500,000
Less:Part owned by the consolidated company	( 320,000 )	( 870,000 )
	$ 14,830,000	$ 12,630,000

(I) The company has been approved by Financial Supervisory Commission under Letter Jin-Guan-Yin-Piao-Zi No. 10400200460 dated August 26, 2015 for the issuance of no maturity non-cumulative subordinated financial debentures 1st term for 2015 on December 28 2015. The terms and conditions for issuance are shown below:

Amount approved for issuance: NT$1,500,000 thousand.
Issuance amount: NT$1,500,000 thousand; the principal was fully redeemed through a mandatory redemption on July 2, 2024.
Face value: NT$10,000 thousand, issued based on the face value.
Maturity: no maturity date.
Bond interest rate is the displayed floating rates for one-year term deposits of Chunghua Post Co., Ltd. plus 3.08%.
Repayment Methods: executed in accordance with the regulations of issuance.
Interest payment: once annually from the issuing date.

(II) The Taichung Bank has been approved by Financial Supervisory Commission under Letter Jin-Kuan-Yin-Piao-Zi No. 10500210950 dated September 2, 2016 for the issuance of no maturity non-cumulative subordinated financial debentures 1st term and 2nd term and 3rd term for 2017 and 1st term for 2016 on March 28, May 18, August 28, 2017 and December 28, 2016. The terms and conditions for issuance are shown below:

Amount approved for issuance: NT$3,500,000 thousand.
Issuance amount:

(1) 1st term 2016: NT$1,500,000 thousand; the principal was fully redeemed through a mandatory redemption on July 2, 2024.
(2) 1st term 2017: 1,000,000 thousand. The principal was fully redeemed through a mandatory redemption on December 3, 2025.
(3) 2nd term 2017: 500,000 thousand. The principal was fully redeemed through a mandatory redemption on December 3, 2025.

(4) 3rd term 2017: 500,000 thousand. The principal was fully redeemed through a mandatory redemption on December 3, 2025.

Denomination:
(1) 1st tranche in 2016: NT$10,000 thousand, issued based on the face value.
(2) 1st tranche in 2017: NT$10,000 thousand, issued based on the face value.
(3) 2nd tranche in 2017: NT$10,000 thousand, issued based on the face value.
(4) 3rd tranche in 2017: NT$10,000 thousand, issued based on the face value.
Maturity: no maturity date.
Bond interest rate is the displayed floating rates for one-year term deposits of Chunghua Post Co., Ltd. plus 3.08%.
Repayment Methods: executed in accordance with the regulations of issuance.
Interest payment: once annually from the issuing date.

(III) The company has been approved by Financial Supervisory Commission under Letter Jin-Guan-Yin-Piao-Zi No. 10600229120 dated September 22, 2017 for the issuance of no maturity non-cumulative subordinated financial debentures 1st term for 2018 and 4th, 5th term for 2017 on April 25, 2018 and December 5, December 27, 2017. The terms and conditions for issuance are shown below:

Approved: NTD5,000,000 thousand.
Issuance amount:
(1) 4th term 2017: NT$1,350,000 thousand; the principal was fully redeemed through a mandatory redemption on September 24, 2025.
(2) 5th term 2017: 2,650,000 thousand.
(3) 1st term 2018: 1,000,000 thousand.
Denomination:
(1) 4th tranche in 2017: NT$10,000 thousand, issued based on the face value.
(2) 5th tranche in 2017: NT$10,000 thousand, issued based on the face value.
(3) 1st tranche in 2018: NT$10,000 thousand, issued based on the face value.
Maturity: no maturity date.
Bond interest rate is the displayed floating rates for one-year term deposits of Chunghua Post Co., Ltd. plus 3.08%.
80 -

Repayment Methods: executed in accordance with the regulations of issuance.
Interest payment: once annually from the issuing date.

(IV) As approved by Financial Supervisory Commission under Letter Jin-Guan-Yin-Piao-Zi No. 10702156550 dated August 23, 2018 for the issuance of no maturity non-cumulative subordinated financial debentures 2nd term for 2018 on December 18, 2018. The terms and conditions for issuance are shown below:

Amount approved for issuance: NT$1,500,000 thousand.
Amount issued: NT$1,500,000 thousand.
Face value: NT$10,000 thousand, issued based on the face value.
Maturity: no maturity date.
Bond interest rate is the displayed floating rates for one-year term deposits of Chunghua Post Co., Ltd. plus 3.08%.
Repayment Methods: executed in accordance with the regulations of issuance.
Interest payment: once annually from the issuing date.

(V) As approved by FSC's Letter under Jin-Guan-Yin-Piao-Zi No. 1100226929 dated October 12, 2021, Taichung Commercial Bank issued the 1st tranche of subordinate financial bonds December 27, 2021 upon the following terms and conditions:

Approved: NTD5,000,000 thousand.
Amount issued: NT$5,000,000 thousand.
Face value: NT$10,000 thousand, issued based on the face value.
Duration: 7 years, matured on December 27, 2028.
Coupon rate: Fixed annual interest rate 1.2%.
Repayment Methods: repayment in lump sum upon maturity.
Interest payment: once annually from the issuing date.

(VI) The company has been approved by FSC under Letter Jin-Guan-Yin-Guo-Zi No. 1140219594 dated July 7, 2025 for the issuance of no maturity non-cumulative subordinated financial debentures 1st and second term for 2025 on August 26 and October 29, 2025. The terms and conditions for issuance are shown below:

Approved: NTD5,000,000 thousand.
Issuance amount:
(1) 1st term 2025: 2,500,000 thousand.
(2) 2nd term 2025: 2,500,000 thousand.
Denomination:
(1) 1st tranche in 2025: NT$10,000 thousand, issued based on the face value.
81 -

(2) 2nd tranche in 2025: NT$10,000 thousand, issued based on the face value.

Maturity: no maturity date.
Bond interest rate is the displayed floating rates for one-year term deposits of Chunghua Post Co., Ltd. plus 2.815%.
Repayment Methods: executed in accordance with the regulations of issuance.
Interest payment: Interest shall be paid semi-annually on July 1 and December 16 of each year commencing from the issuance date.

XXXI. Liability reserve

	December 31, 2025	December 31, 2024
Employee benefit liabilities reserve	$ 702,458	$ 735,993
Reserve for guarantee liability	459,863	385,263
Provision for commitment of financing	171,721	141,430
Pending litigation reserves	93,006	88,006
Provision for carbon fee liabilities	34,906	-
Other reserves	11,070	13,155
	$ 1,473,024	$ 1,363,847

(I) Employee benefit liabilities reserve is detailed as follows:

	December 31, 2025	December 31, 2024
Defined benefit liabilities	$ 502,987	$ 522,650
Employees preferential deposit plan	179,462	170,235
Other long-term employee benefit liabilities	20,009	43,108
	$ 702,458	$ 735,993

Defined contribution pension plan

The pension system of the "Labor Pension Act" that is applicable to the consolidated company is a defined contribution pension plan subject to government management with an amount equivalent to 6% of the monthly salary appropriated and contributed to the personal account with the Bureau of Labor Insurance.

The amounts contributed by the consolidated company in accordance with the prescribed contribution ratios under the defined contribution plans were recognized in the following items in the statements of comprehensive income for the respective periods:

83 -

	2025	2024
Operating expenses	$ 138,617	$ 135,009
Operating cost	27,607	26,818
	$ 166,224	$ 161,827

2. Defined benefit plan

The consolidated company's pension system under the "Labor Standards Act" of the R.O.C. is a defined benefit pension plan. Pension payment is calculated in accordance with the years of service and the average salary six months prior to the authorized retirement date. The consolidated company contributes 10% of the total monthly salaries of general employees with service years accrued under the old pension system (excluding commissioned managers) as pension funds, which are deposited into a dedicated account at the Bank of Taiwan in the name of the Labor Pension Reserve Committee. Before the end of each fiscal year, if the estimated balance in the dedicated account is insufficient to cover the pension payments for employees expected to meet retirement eligibility criteria in the following year, the shortfall will be contributed in a lump sum before the end of March of the following year. The special account has been commissioned to the Bureau of Labor Fund of the Ministry of Labor Affairs for management. The company contained in the consolidated financial statements exercises no influence on the right of the bureau in its investment management strategy.

The amount of determined benefit plan recognized in the consolidated balance sheet is shown below:

	December 31, 2025	December 31, 2024
Present value of the defined benefit obligations	$ 1,986,257	$ 1,882,780
The fair value of plan assets	( 1,483,270)	( 1,360,130)
Appropriation shortage	502,987	522,650
Net determined benefit liability	$ 502,987	$ 522,650

Change in net determined benefit liability is shown below

	Present value of the defined benefit obligations	The fair value of plan assets	Net determined benefit liability

January 1, 2024	$ 1,939,724	($ 1,147,894)	$ 791,830
Reclassification	16,000	-	16,000
Service cost
Current service cost	18,155	-	18,155
Interest expenses (revenues)	24,382	( 14,487)	9,895
Recognized in profit or loss	42,537	( 14,487)	28,050

(Continued)

	Present value of the defined benefit obligations	The fair value of plan assets	Net determined benefit liability
Reevaluation
Planned ROE (except the amount of net interest)	$ -	($ 105,119)	($ 105,119)
Actuarial gain – change in financial assumptions	( 33,346)	-	( 33,346)
Actuarial loss – adjustment through experience	61,186	-	61,186
Recognized in the other comprehensive income	27,840	( 105,119)	( 77,279)
Employer appropriation	-	( 189,163)	( 189,163)
Planned asset payment	( 96,533)	96,533	-
Company account payment	( 46,788)	-	( 46,788)
December 31, 2024	1,882,780	( 1,360,130)	522,650
Service cost
Current service cost	4,050	-	4,050
Interest expenses (revenues)	28,211	( 20,771)	7,440
Recognized in profit or loss	32,261	( 20,771)	11,490
Reevaluation
Planned ROE (except the amount of net interest)	-	( 95,488)	( 95,488)
Actuarial loss – change in financial assumptions	62,005	-	62,005
Actuarial loss – adjustment through experience	152,623	-	152,623
Recognized in the other comprehensive income	214,628	( 95,488)	119,140
Employer appropriation	-	( 93,125)	( 93,125)
Planned asset payment	( 86,244)	86,244	-
Company account payment	( 57,168)	-	( 57,168)
December 31, 2025	$ 1,986,257	($ 1,483,270)	$ 502,987

The recognized loss of determined benefit plans by function is summarized below:

	2025	2024
Operating expenses	$ 9,593	$ 24,917
Operating cost	1,897	3,133
	$ 11,490	$ 28,050

The pension fund system of the company contained in the consolidated financial statements is exposed to the following risks due to the "Labor Standards Act":

(1) Investment risk: The Bureau of Labor Fund of the Ministry of Labor Affairs uses the labor pension fund for investment in domestic and foreign equity securities and debt securities, and as bank deposits through proprietary trade or commissioned third parties. However, the amount attributable to the planned asset of the consolidated company shall not fall below the interest rate offered by the banks in the regions or countries of investment for 2-year time deposit as return.

(2) Interest risk: the decline of the interest rate for government/corporate bonds will cause an increase in the present value of determined benefit obligation. However, the ROI of the debt of the planned assets will also increase accordingly. The effect of the two on net determined benefit liability is mutually offsetting.

(3) Salary risk: the calculation of the present value of determined benefit obligation is based on the salaries of the members in the plan of the future. As such, an increase of the salaries of the members of the plan is bound to increase the present value of determined benefit obligation.

The determined benefit obligation of the company contained in the consolidated financial statements is based on the actuarial calculation of the actuary and the major assumption as of the evaluation day is shown below:

	2025	2024
Discount rate	1.25%~1.40%	1.45%~1.63%
The expected rate of increase in salaries	1.75%~3.00%	1.50%~3.00%

In case of reasonable and possible change in the major actuarial assumptions, and other assumptions remained unchanged, the amount of increase (decrease) in the present value of determined benefit obligation will be:

87 -

	December 31, 2025	December 31, 2024
Discount rate
Increase by 0.25%	($ 34,092)	($ 35,764)
Decrease by 0.25%	$ 34,977	$ 36,748
The expected rate of increase in salaries
Increase by 0.25%	$ 34,123	$ 36,818
Decrease by 0.25%	($ 33,427)	($ 36,010)

Actuarial assumptions may be inter-related. The possibility of change in specific assumption is not high. The aforementioned sensitivity analysis may not be able to reflect the actual change in the present value of determined benefit obligation.

	December 31, 2025	December 31, 2024
Prepaid amount for 1 year	$ 61,168	$ 63,367
Average maturity of determined benefit obligation	7 to 10 years	7 to 12 years

3. Employees preferential deposit plan

With effect on December 21, 2014, Taichung Bank in the financial statements adjusted the interest rate for the deposit of the banking staff. According to Order Jin-Guan-Yin-Fa-Zi No. 10110000850 and the Regulations Governing the Preparation of Financial Reports by Public Banks, the employee preferred deposit plan liabilities shall be subject to the actuarial calculation of a qualified actuary professional.

Contingent liabilities included in the consolidated balance sheet due to employees' preferential deposit plan at Taichung Commercial Bank are shown as follows:

	December 31, 2025	December 31, 2024
Present value of preferred deposit plan	$ 179,462	$ 170,235
The fair value of plan assets	-	-
Appropriation shortage	179,462	170,235
Employee preferred deposit plan liability	$ 179,462	$ 170,235

Change in employee preferred deposit plan liability is shown below:

	Present value of the defined benefit obligations	The fair value of plan assets	Net determined benefit liability
January 1, 2024	$ 162,038	$ -	$ 162,038
Service cost
Service costs from previous period	11,489	-	11,489
Interest expenses	5,724	-	5,724
Recognized in profit or loss	17,213	-	17,213
Reevaluation
Actuarial loss – adjustment through experience	31,870	-	31,870
Recognized in the other comprehensive income	31,870	-	31,870
Company account payment	( 40,886 )	-	( 40,886 )
December 31, 2024	170,235	-	170,235
Service cost
Service costs from previous period	8,091	-	8,091
Interest expenses	5,992	-	5,992
Recognized in profit or loss	14,083	-	14,083
Reevaluation
Actuarial loss – adjustment through experience	33,185	-	33,185
Actuarial loss – change in the assumption of the census	4,674	-	4,674
Recognized in the other comprehensive income	37,859	-	37,859
Company account payment	( 42,715 )	-	( 42,715 )
December 31, 2025	$ 179,462	$ -	$ 179,462

88 -

The amount of employee preferred deposit plan recognized as profit and loss by function is summarized below:

	2025	2024
Operating expenses	$ 14,083	$ 17,213

The employee preferred deposit obligation of the Taichung Commercial Bank is based on the actuarial calculation of professional actuary and the major assumption as of the evaluation day is shown below:

	December 31, 2025	December 31, 2024
Discount rate	4.00%	4.00%
Return on deposited fund	2.00%	2.00%
Excessive interest rate	2.00%	2.00%
The withdrawal rate of preferred deposits	3.00%	3.25%

	December 31, 2025	December 31, 2024
Discount rate
Increase by 0.25%	($ 4,355)	($ 4,115)
Decrease by 0.25%	$ 4,541	$ 4,291
The withdrawal rate of preferred deposits
Increase by 0.25%	$ 4,674	$ 4,427
Decrease by 0.25%	($ 4,863)	($ 4,608)

	December 31, 2025	December 31, 2024
Amount projected for appropriation in 1 year	$ -	$ -
The average maturity of employee preferred deposit obligation	10.3 years	10.3 years

Other long-term employee benefits

The other long-term employee benefits of the Taichung Commercial Bank in the consolidated company meant for the long-term disability benefits. The Company will issue pensions to the employees who die of sickness or accidents at work for reasons other than occupational hazards.

In 2025 and 2024, the consolidated company recognized total long-term employee benefit-related (reversal gains) expenses of NT$(22,715) thousand and NT$2,786 thousand, respectively, in the consolidated statements of comprehensive income. The other long-term employee benefit liabilities reserve amounted to NT$20,009 thousand and NT$43,108 thousand as of December 31, 2025 and 2024, respectively.

(II) The table of changes in reserves for guarantees is as follows:

2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 311,902	$ 4,238	$ 28,807	$ 344,947	$ 40,316	$ 385,263
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 1,427 )	1,427	-	-	-	-
Converted as financial assets with credit impairment	( 18 )	-	18	-	-	-
Converted as anticipated credit loss in 12 months	1,767	( 1,767 )	-	-	-	-
Financial assets removed in current period	( 133,416 )	( 2,275 )	( 507 )	( 136,198 )	-	( 136,198 )
Procured or initiated new financial assets	169,192	4,708	-	173,900	-	173,900
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	22,740	22,740
Foreign exchange settlement and other changes	( 10,938 )	22,991	2,105	14,158	-	14,158
Balance - ending	$ 337,062	$ 29,322	$ 30,423	$ 396,807	$ 63,056	$ 459,863

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 217,243	$ 5,638	$ 37,095	$ 259,976	$ 47,287	$ 307,263
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 142 )	142	-	-	-	-
Converted as financial assets with credit impairment	-	-	-	-	-	-
Converted as anticipated credit loss in 12 months	1,438	( 1,438 )	-	-	-	-
Financial assets removed in current period	( 122,761 )	( 3,037 )	( 8,114 )	( 133,912 )	-	( 133,912 )
Procured or initiated new financial assets	230,166	1,576	-	231,742	-	231,742
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	( 6,971 )	( 6,971 )
Foreign exchange settlement and other changes	( 14,042 )	1,357	( 174 )	( 12,859 )	-	( 12,859 )
Balance - ending	$ 311,902	$ 4,238	$ 28,807	$ 344,947	$ 40,316	$ 385,263

Bad debt expense, commitment and guarantee liability provisions were recognized in 2025 and 2024.

(III) The table of changes in other reserves is as follows:

2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total

					ng/Non-accrualLoans"
Balance - beginningChanges in financialinstruments recognized atthe beginning of the period:Converted as anticipatedcredit loss within theperpetuity of thefinancial assetsConverted as financialassets with creditimpairmentConverted as anticipatedcredit loss in 12monthsFinancial assets removedin current periodProcured or initiated newfinancial assetsImpairment differencerecognized in accordancewith the “RegulationsGoverning the Proceduresfor Banking Institutions toEvaluate Assets and Dealwith Non-performing/Non-accrual Loans"Foreign exchange settlementand other changesBalance - ending	$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$	$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -	$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -	$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$	$ 3,610$ 3,610$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$ 9,545$	$ 13,155$

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginningChanges in financialinstruments recognized at the beginning of the period:Converted as anticipated credit loss within the perpetuity of the financial assetsConverted as financial assets with credit impairmentConverted as anticipated credit loss in 12 monthsFinancial assets removed in current periodProcured or initiated new financial assetsImpairment difference recognized in accordance with the “Regulations Governing the Procedures	$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$	$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -	$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -	$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$	$ 3,208$ 3,208$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$ 9,815$	$ 13,023$

93 -

for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”
Foreign exchange settlement and other changes
Balance - ending	$ 9,545	$ -	$ -	$ 9,545	$ 3,610	$ 13,155

Bad debt expense, commitment and guarantee liability provisions were recognized in 2025 and 2024.

(IV) The table of changes in provisions for commitment is as follows:

2025

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 133,774	$ 2,053	$ -	$ 135,827	$ 5,603	$ 141,430
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 7 )	7	-	-	-	-
Converted as financial assets with credit impairment	( 3 )	( 11 )	14	-	-	-
Converted as anticipated credit loss in 12 months	1,926	( 1,926 )	-	-	-	-
Financial assets removed in current period	( 113,346 )	( 59 )	-	( 113,405 )	-	( 113,405 )
Procured or initiated new financial assets	142,059	1,160	-	143,219	-	143,219
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	2,489	2,489
Foreign exchange settlement and other changes	( 2,243 )	245	( 14 )	( 2,012 )	-	( 2,012 )
Balance - ending	$ 162,160	$ 1,469	$ -	$ 163,629	$ 8,092	$ 171,721

2024

	Anticipated credit loss in 12 months	Anticipated credit loss within the perpetuity of the financial assets	Financial assets with credit impairment	Impairment losses provided according to IFRS 9	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Balance - beginning	$ 114,706	$ 1,902	$ 10,239	$ 126,847	$ 9,195	$ 136,042
Changes in financial instruments recognized at the beginning of the period:
Converted as anticipated credit loss within the perpetuity of the financial assets	( 9 )	9	-	-	-	-
Converted as financial assets with credit impairment	( 3 )	( 10 )	13	-	-	-
Converted as anticipated credit loss in 12 months	1,835	( 1,835 )	-	-	-	-
Financial assets removed in current period	( 26,737 )	( 75 )	( 10,239 )	( 37,051 )	-	( 37,051 )
Procured or initiated new financial assets	46,513	1,586	-	48,099	-	48,099
Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-	( 3,592 )	( 3,592 )
Foreign exchange settlement and other changes	( 2,531 )	476	( 13 )	( 2,068 )	-	( 2,068 )
Balance - ending	$ 133,774	$ 2,053	$ -	$ 135,827	$ 5,603	$ 141,430

Bad debt expense, commitment and guarantee liability provisions were recognized in 2025 and 2024.

94 -

(V) The table of changes in the reserve for pending litigations is as follows:

	2025	2024
Balance - beginning	$ 88,006	$ 83,006
Deposit in the current period	5,000	5,000
Balance - ending	$ 93,006	$ 88,006

An amount of NT$5,000 thousand was accrued in both 2025 and 2024 and recorded under interest expense. For details on the related contingent liabilities, please refer to Note 39.

(VI) Starting from 2025, the consolidated company recognized provisions for carbon fee liabilities in accordance with Taiwan's Regulations Governing the Collection of Carbon Fees and other relevant laws and regulations. The consolidated company has submitted an application for an autonomous reduction plan to the competent authority. However, as of December 31, 2025, the application was still under review. Therefore, the provision for carbon fee liabilities for the current period was calculated based on the latest preferential fee rate reviewed by the competent authority. In 2025, the consolidated company estimated a provision for carbon fee liabilities of NT$34,906 thousand.

XXXII. Equity

(I) Share capital

	December 31, 2025	December 31, 2024
Authorized number of shares (thousand shares)	2,100,000	2,100,000
Authorized capital	$21,010,000	$21,010,000
Number of shares issued with fully paid-in capital (thousand shares)	1,685,906	1,685,906
Outstanding capital	$16,859,057	$16,859,057

As of December 31, 2025 and 2024, CMFC had paid-in capital of NT$16,859,057 thousand, consisting of 1,685,906 thousand common shares with a par value of NT$10 per share. Each share carries one voting right and the right to receive dividends.

(II) Capital surplus

	December 31, 2025	December 31, 2024
For covering loss carried forward, payment in cash or capitalization as equity shares (Note)

96 -

Shares issued in excess of par value	$ 589,895	$ 589,895
Assets received	2,129	2,129
Treasury stock transactions	773,594	773,594
Invalid ESO	2,600	2,600

(Continued)

	December 31, 2025	December 31, 2024
For covering loss carried forward only.
Changes in the ownership equity on a subsidiary	$ 210,791	$ 174,817
Transaction of treasury stock (cash dividends paid to subsidiaries)	169,202	169,202
	$ 1,748,211	$ 1,712,237

Note: Such additional paid-in capital can be used to make up for losses; also, when the company is without any loss, it can be applied for cash distribution or capitalization. However, it is limited to a certain percentage of the annual paid-in capital for the purpose of capitalization.

(III) Retained earnings and Dividend Policy

According to the Articles of Incorporation of China Man-Made Fiber Corporation, the policy for the distribution of earnings stated that if there is a surplus after account settlement of the fiscal year, the company shall pay applicable taxes and cover loss carried forward, followed by the allocation of 10% of the remainder as legal reserve, and appropriate for special reserve or reverse special reserve. If there is still a balance, it will be pooled up with the undistributed earnings carried forward from previous years for distribution as shareholder dividends under a proposal prepared by the Board subject to the final approval of the General Meeting of Shareholders. Regarding the distribution policy of remuneration of employees and Directors specified in the Articles of Incorporation of CMFC, please refer to Note 33(11) Employees' remuneration and Directors' remuneration.

The Company's dividends policy shall be drafted subject to the Company's future investment environment and long-term financial planning and also takes the shareholders' equity into consideration. The dividends shall be allocated in the form of cash dividend as the first priority per year, and may be allocated in the form of stock dividend, provided that the ratio of allocation of stock dividends shall be no more than 95% of the total dividends.

China Man-Made Fiber Corporation has a special reserve appropriated and reversed in accordance with FSC.Certificate.Issue.Tzi No. 1010012865 Letter, FSC.Certificate.Issue.Tzi No. 1010047490 Letter and "Special reserve appropriation

97 -

Q&A after the adoption of International Financial Reporting Standards (IFRSs)." If the amount debited to the other shareholders' equity is reversed subsequently, the reversed amount can be distributed.

The legal reserve should be contributed until its balance reaches the Company's total paid-in capital. The legal reserve may be applied to make up loss. If there is no loss, the amount of legal reserve in excess of the paid-in capital by 25% could be allocated as capital stock and paid out as cash dividend.

CMFC convened its annual general shareholders' meetings on June 11, 2025 and June 12, 2024, respectively, and resolved the 2024 earnings distribution proposal and the 2023 deficit compensation proposal as follows:

	Earnings Distribution Proposal	Deficit Compensation Proposal
	2024	2023
Legal reserve appropriated	$ 15,853	$ -
Special reserve appropriated	28,183	-
Loss compensation with the legal reserve	-	411,573

The Company had resolved in the board meeting the earnings distribution of 2025 on March 9, 2026 as follows:

	2025
Legal reserve appropriated	$ 9,923
Special reserve appropriated	$ 76,269

The proposal for the distribution of earnings in 2025 is pending on the resolution of the General Meeting of shareholders scheduled to be held in June 11, 2026.

For more information on the proposal approved by the board of directors of China Man-Made Fiber Corporation and the surplus distribution proposal adopted by resolution of the General Shareholders' Meeting, please refer to the TWSE Market Observation Post System.

(IV) Other equity

Exchange differences from the translation of financial statements of foreign operations

	2025	2024
Balance - beginning	($ 18,496)	($ 108,195)
Translation adjustments	( 7,800)	89,699

of foreign operations
Balance - ending
( $ 26,296 )
( $ 18,496 )

Unrealized valuation gains or losses on financial assets at fair value through other comprehensive profit or loss

	2025	2024
Balance - beginning	$ 1,240,151	$ 1,153,089
Accrued in current year
Unrealized gain or loss
Debt instruments	133,986	( 431,582 )
Equity instruments	479,675	640,736

(Continued)

99 -

(Continued)

	2025	2024
Subsidiaries’ share liquidated adopting the equity method	($ 972)	$ -
The accumulated gain/loss from the disposition of equity instruments will be transferred to retained earnings.	(8,630)	(122,092)
Balance - ending	$1,844,210	$1,240,151

(V) Treasury stock

The details and changes of the treasury stocks of CMFC in 2025 and 2024 are shown as follows:

Cause	Transferring stocks to employees (thousand shares)	Shares of parent company held by subsidiaries (in thousand shares)	Total (thousand shares)
Number of shares as of January 1, 2025	-	344,226	344,226
Increase in current period	-	7,449	7,449
Decrease in current period	-	-	-
Number of shares as of December 31, 2025	-	351,675	351,675
Number of shares as of January 1, 2024	-	344,226	344,226
Increase in current period	-	-	-
Decrease in current period	-	-	-
Number of shares as of December 31, 2024	-	344,226	344,226

In 2025, Pan Asia Chemical Corporation purchased a total of 4,574 thousand shares of CMFC’s stock for NT$29,076 thousand.
In 2025, De Xing Investment Company purchased a total of 2,875 thousand shares of CMFC’s stock for NT$18,383 thousand.

As of December 31, 2025 and 2024, CMFC’s shares held by subsidiaries are as follows:

Name of Subsidiary	Shareholding ratio %	Number of shares held (thousand shares)	Book Value	Market Value
December 31, 2025
Pan Asia Chemical Corporation	44%	266,075	$ 908,149	$ 810,421
De Xing Investment Company	100%	14,494	44,170	99,432
Chou Chin Industrial Co., Ltd.	50%	61,488	195,060	209,748
Chou Chang Co., Ltd.	39%	9,618	35,136	25,692
		351,675	$ 1,182,515	$ 1,145,293
December 31, 2024
Pan Asia Chemical Corporation	44%	261,501	$ 879,073	$ 855,704
De Xing Investment Company	100%	11,619	25,787	85,636
Chou Chin Industrial Co., Ltd.	50%	61,488	195,060	225,341
Chou Chang Co., Ltd.	39%	9,618	35,136	27,602
		344,226	$ 1,135,056	$ 1,194,283

According to the Securities and Exchange Act, the treasury stocks held by CMFC shall not be pledged, nor shall they be entitled to dividends distribution and voting rights. Shares of CMFC held by its subsidiaries shall be considered as treasury stocks, and except for the provisions of Article 167 and 179 of the Company Act, the rest share the same rights as the general shareholders.

(VI) Non-controlling interest

	2025	2024
Balance - beginning	$ 62,766,246	$ 58,529,547
The number of shares attributed to non-controlling interests
Net income	6,774,483	6,273,292
Reevaluation of determined benefit plan	( 94,916 )	29,618
Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss	687,999	( 582,019 )
Exchange differences from the translation of financial statements of foreign operations	( 48,348 )	97,802

102 -

Changes in the ownership equity on a subsidiary	( 36,129)	568
Cash dividends paid by subsidiaries	( 1,631,589)	( 1,582,562)
Change in non-controlling interest	1,552,752	-
Balance - ending	$ 69,970,498	$ 62,766,246

XXXIII. Business units in continuing operation income

Net profit of continuing operations includes the following items:

(I) Interest income and expense

	2025	2024
Interest revenue
Discount and loan interest income	$ 20,615,540	$ 18,800,821
Due from bank and interbank offered interest income	631,149	632,133
Security investment interest income	4,805,926	4,399,941
Others	1,373,142	1,387,745
	$ 27,425,757	$ 25,220,640
Interest expenses
Deposits Interest expenses	$ 12,208,285	$ 10,911,005
Central Bank and interbank interest expense	774,690	843,291
Central Bank and interbank interest expenses	82,433	215
Interest expense on bonds and bills sold under repurchase agreements	249,132	386,570
Bond issuance interest expense	468,584	479,715
Interest expense on borrowings	476,534	444,223
Interest expenses of structured products	230,914	211,928
Lease liability interest expenses	20,067	23,810
Other Interest expenses	43,750	34,324
	$ 14,554,389	$ 13,335,081

(II) Fee income and expense

	2025	2024
Income from handling fees
Insurance brokerage fee revenue	$ 1,500,056	$ 1,227,381
Securities brokerage fee revenue	365,542	397,432
Trust business income	1,516,283	1,561,103
Loan service fee income	1,350,142	1,139,999
Commission income for bank guarantee	426,963	355,940
Other service fee revenue	421,117	433,945
	5,580,103	5,115,800
Service charges
Insurance brokerage commission expense	211,874	160,678
Inter-bank service fee	39,362	37,799
Other service fee expenses	189,961	187,997
	441,197	386,474
	$ 5,138,906	$ 4,729,326

103 -

The consolidated company provides custody, trust, investment management and advisory services to third parties; therefore, the consolidated company engages in the planning, management and trading decision of financial instruments. For a trust fund or investment portfolio that is commissioned for management and utilization, a separate bookkeeping is arranged and financial statements are prepared for internal management purposes, excluding the financial statements of the consolidated company.

(III) Gain (loss) on financial assets and liabilities at fair value through profit and loss

	2025	2024
The realized gain (loss) of financial assets and liabilities measured at fair value through profit or loss
Commercial papers	$ 409,179	$ 341,128
Stocks	102,952	619,049
Beneficiary certificate	( 3,220)	4,235
Derivatives	1,506,349	( 699,723)
Corporate bonds	19,111	44,075
Others	1,848	2,454
	2,036,219	311,218
Valuation gains (losses) of financial assets and liabilities measured at fair value through profit or loss
Commercial papers	6,154	7,477
Stocks	79,366	( 119,103)
Beneficiary certificate	90,351	74,660
PEM GROUP Insurance policy assets	( 96,601)	( 20,092)
Derivatives	( 2,109,020)	3,331,711
Corporate bonds	( 1,456)	26,883
	( 2,031,206)	3,301,536
	$ 5,013	$ 3,612,754

(IV) Loss in impairment of non-financial assets

	2025	2024
Impairment loss of property, plant and equipment	$ 241,876	$ 330,152

(V) Impairment reversal gain (loss) on financial assets

	2025	2024
Capital gain (loss) on reversal of debts instrument at fair value through comprehensive income statement as other comprehensive income	$ 1,409	($ 11,138)
Debt of instruments measured on the basis of cost after amortization impairment loss reversal gain	711	3,061
	$ 2,120	($ 8,077)

(VI) Bad debt expense, commitment and guaranty reserve

	2025	2024
Lodgment of the expenses of doubtful account receivables	$ 146,836	$ 346,827
Lodging of the expenses of doubtful accounts for discount and loans	397,746	672,238
Reserve for guarantee liability	74,600	78,000
Provision for commitment of financing	31,512	3,661
Other reversals	( 2,000)	-
	$ 648,694	$ 1,100,726

(VII) Other income

	2025	2024
Dividend income	$ 404,768	$ 343,363
Rental revenue	34,111	73,305
Management fee income	52,881	51,128
Compensation income	47	5,371
Gain in disposal of real estate, plant buildings, equipment & facilities	4,538	3,406
Others	115,369	105,610
	$ 611,714	$ 582,183

(VIII) Other expenses

	2025	2024
Loss from liquidation of subsidiaries (Note 36)	$ 1,382	$ 20,072
Others	6,792	12,623
	$ 8,174	$ 32,695

(IX) Depreciation and amortization

	2025	2024
Property, plant and equipment	$ 801,677	$ 827,374
Investment property	22,068	25,647
Right-of-use assets	237,318	235,182
Intangible assets	149,771	94,829
Total	$ 1,210,834	$ 1,183,032
Consolidation of depreciation expenses based on functions
Operating cost	$ 552,444	$ 589,950
Operating expenses	508,619	498,253
	$ 1,061,063	$ 1,088,203
Consolidation of amortization expenses based on functions
Operating cost	$ 27	$ 4
Operating expenses	149,744	94,825
	$ 149,771	$ 94,829

(X) Employee benefits expenses

2025

	Operating cost	Operating expenses	Total
Salary & wage	$ 587,047	$ 5,309,097	$ 5,896,144
Expenses for labor insurance and the National Health Insurance	66,907	350,641	417,548
	653,954	5,659,738	6,313,692
Pension expenses (Note 31)
Defined contribution pension plan	27,607	138,617	166,224
Defined benefit plan	1,897	9,593	11,490
	29,504	148,210	177,714
Other employee benefits expenses	35,831	265,823	301,654
Total employee benefits expenses	$ 719,289	$ 6,073,771	$ 6,793,060

2024

	Operating cost	Operating expenses	Total
Salary & wage	$ 611,179	$ 4,739,025	$ 5,350,204
Expenses for labor insurance and the National Health Insurance	63,667	316,842	380,509
	674,846	5,055,867	5,730,713

Pension expenses (Note 31)

Defined contribution pension plan	26,818	135,009	161,827
Defined benefit plan	3,133	24,917	28,050
	29,951	159,926	189,877
Other employee benefits expenses	36,489	319,924	356,413
Total employee benefits expenses	$ 741,286	$ 5,535,717	$ 6,277,003

(XI) Remuneration of employees and Directors

The Company appropriated 1% to 5% and no more than 0.3% of the earnings before tax before the deduction of remuneration to the employees and Directors of the same year. Pursuant to the amendment to the Securities and Exchange Act in August 2024, the Company amended its Articles of Incorporation at the 2025 shareholders' meeting to stipulate that no less than 35% of the employee remuneration appropriated for the current year shall be distributed to entry-level employees. Employee remuneration (including entry-level employee remuneration) and directors' remuneration for 2025 and 2024 were resolved by the Board of Directors on March 9, 2026 and March 3, 2025, respectively, as follows:

	2025		2024
	Amount	Ratio	Amount	Ratio
Remuneration to employees	$ 6,437	5.0%	$ 1,453	5.0%
Remuneration to Directors	386	0.3%	87	0.3%

If there are still changes in the amount specified in the financial statement after announcement, proceed to the accounting of change and adjusted for booking in the next fiscal year.

CMFC incurred pre-tax losses in 2023; therefore, no employee or director remuneration was allocated. The actual amount for remuneration to employees and Directors in 2024 did not vary from the amount recognized in the parent company only financial statements of 2024.

For further information on the appropriation of remuneration to the employees and Directors by the Board of China Man-Made Fiber Corporation, visit the "MOPS" website of Taiwan Stock Exchange Corporation.

XXXIV. Continuing department income tax

(I) Income tax recognized in profit or loss

The main components of income tax expenses are as follows:

	2025	2024
Income tax expenses in the current period
Accrued in current year	$ 1,681,040	$ 1,773,628
Additional levy on undistributed earnings	3,092	2,027
Prior year adjustment	( 2,919 )	( 3,897 )
Deferred tax
Accrued in current year	133,156	( 138,901 )
Income tax expenses recognized in profit or loss	$ 1,814,369	$ 1,632,857

108 -

The reconciliation between the accounting income in 2025 and 2024 and income tax expenses for the year is as follows:

	2025	2024
Income before tax from continuing operations	$ 8,707,679	$ 7,933,670
Income tax expenses calculated based on net profit before tax calculated at the statutory tax rate	$ 1,741,536	$ 1,586,734
Non-deductible expenses and losses for tax purposes	10,825	12,119
Non-taxable income	( 897,174)	( 583,603)
Additional levy on undistributed earnings	3,092	2,027
Adjustments to current income tax expenses of prior years during the year	( 2,919)	( 3,897)
Unrecognized loss carryforwards and temporary differences	957,206	588,586
Basic income tax	-	27,124
Effect of variation in taxation rates on the consolidation of the group and individual entities.	1,803	3,767
Income tax expenses recognized in profit or loss	$ 1,814,369	$ 1,632,857

(II) Income tax recognized in the other comprehensive profit or loss

	2025	2024
Deferred tax
Accrued in current year
- Reevaluation of determined benefit plan	($ 33,138)	$ 6,445
- Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss	7,660	24,240
Income tax (benefits) expenses recognized in the other comprehensive income	($ 25,478)	$ 30,685

(III) Current income tax asset and liability

Current income tax asset	December 31, 2025	December 31, 2024

110 -
| Tax refund receivable | $ 19,217 | $ 16,164 |
| --- | --- | --- |
| Current Tax Liability | | |
| Income tax payable | $ 598,145 | $ 831,751 |

(IV) Deferred income tax assets and liabilities

Changes in deferred income tax assets and liabilities are as follows:

2025

	Balance - beginning	Recognized in profit or loss	Recognized in the other comprehensive income	Balance - ending
Deferred income tax assets
Temporary difference
Defined benefit pension plans	$ 224,142	($ 35,441)	$ 33,138	$ 221,839
Loss allowance	373,971	73,798	-	447,769
Unrealized loss from structured note indemnity	254,362	19,320	-	273,682
Others	227,263	( 199,194)	( 7,660)	20,409
	1,079,738	( 141,517)	25,478	963,699
Loss credit	495,061	8,361	-	503,422
	$ 1,574,799	($ 133,156)	$ 25,478	$ 1,467,121
Deferred tax liabilities
Temporary difference
Allowance for land increment value tax	$ 1,020,032	$ -	$ -	$ 1,020,032

2024

	Balance - beginning	Recognized in profit or loss	Recognized in the other comprehensive income	Balance - ending
Deferred income tax assets
Temporary difference
Defined benefit pension plans	$ 276,350	($ 45,763)	($ 6,445)	$ 224,142
Loss allowance	473,810	( 99,839)	-	373,971
Unrealized loss from structured note indemnity	250,344	4,018	-	254,362
Others	( 2,540)	254,043	( 24,240)	227,263
	997,964	112,459	( 30,685)	1,079,738
Loss credit	468,619	26,442	-	495,061
	$ 1,466,583	$ 138,901	($ 30,685)	$ 1,574,799
Deferred tax liabilities
Temporary difference
Allowance for land increment value tax	$ 1,020,032	$ -	$ -	$ 1,020,032

(V) Deductible temporary differences and unused deduction of loss for deferred income tax assets are not recognized in the balance sheet

Deductible	temporary	December 31, 2025	December 31, 2024

differences

Allowance to reduce inventory to market $ 114,314 $ 114,314
Defined benefit pension plans 7,550 7,550
Loss credit 6,583,773 5,613,619
$ 6,705,637 $ 5,735,483

(VI) Unused losses credit related information

As of December 31, 2025, information on loss carryforwards is as follows:

Uncredited balance	Last year of credit
$ 505,260	2026
1,743,326	2029
1,474,481	2030
638,325	2031
1,728,060	2032
1,663,616	2033
616,404	2034
731,411	2035
$ 9,100,883

(VII) Income tax audit

Approved up to 2023 for the Company.
Approved up to 2023 for Taichung Commercial Bank.
Approved up to 2023 for Taichung Insurance Brokers Co., Ltd.
Approved up to 2023 for Taichung Bank Leasing Corporation Limited.
Approved up to 2023 for Taichung Bank Securities Co., Ltd.
Approved up to 2023 for PACC.
Approved up to 2023 for De Xing Investment Company
Approved up to 2023 for Taichung Bank Securities Investment Trust Co., Ltd.
Approved up to 2023 for Chou Chin Industrial Co., Ltd.
Approved up to 2023 for Greenworld Food Co., Ltd.
Approved up to 2023 for Chou Chang Co., Ltd.

XXXV. Earnings per share

	2025	2024
Basic earnings per share	$ 0.09	$ 0.02
Diluted earnings per share	$ 0.09	$ 0.02

The net income and weighted average common stock shares used for calculating earnings per share are as follows:

Net income

	2025	2024
Net profit attributable to the company	$ 118,827	$ 27,521
Number of shares Unit: thousand shares
	2025	2024
Weighted average common stock shares used to calculate basic earnings per share	1,340,008	1,341,680
Effect of dilutive potential common stock:
Remuneration to employees	972	197
Weighted average common stock shares used to calculate diluted earnings per share	1,340,980	1,341,877

If the consolidated company may choose to have the employee compensation distributed via a stock or cash dividend, calculate the diluted earnings per share, assuming that the bonus to employees is with a stock dividend distributed, with the weighted average number of shares outstanding included when the potential common stock has a diluted effect. When diluted EPS is calculated in the next year resolves the number of share distribution for employee compensation, the dilution effect is also considered for such potential common shares.

XXXVI. Disposal of subsidiaries

On August 14, 2023, the Board of the consolidated company resolved to dispose of 100% of the equity of IOLITE COMPANY LIMITED. The above transaction was completed in October 2024 upon receipt of the full payment, resulting in the loss of control over the subsidiary's subsidiary.

In December 2024, Precious Wealth International Limited resolved to reduce capital and return capital contributions in the amount of NT$8,229 thousand (JPY 39,347 thousand), and further resolved to proceed with liquidation and dissolution. The capital reduction base date was December 17, 2024, and the cancellation of registration was completed in January 2025.

113 -

(I) Consideration collected

	IOLITE COMPANY LIMITED	Precious Wealth International Limited
Consideration collected	$ 128,839	$ -

(II) Analysis of assets and liabilities which are not in control

	IOLITE COMPANY LIMITED	Precious Wealth International Limited
Current assets
Cash and cash equivalents	$ 81	$ -
Current assets
Prepayments	81,924	-
Current liabilities
Payables	-	( 14 )
Net assets disposed of	$ 82,005	($ 14 )

(III) Losses from disposal of subsidiaries

	IOLITE COMPANY LIMITED	Precious Wealth International Limited
Consideration collected	$ 128,839	$ -
Net assets disposed of	( 82,005 )	14
Exchange differences from the translation of financial statements of foreign operations	( 66,906 )	( 1,396 )
Disposal losses	($ 20,072 )	($ 1,382 )

(IV) Net cash inflow from disposition of subsidiaries

	IOLITE COMPANY LIMITED	Precious Wealth International Limited
Consideration received in cash and cash equivalents	$ 128,839	$ -
Less: Balance of cash and cash equivalents disposed of	( 81 )	-
	$ 128,758	$ -

XXXVII. Transactions with related parties

(I) Name and affiliation of related parties

Name	Affiliation
Chuang Chien Investment Co., Ltd.	Investors with control
Pan Asia Investment Corporation	Investors with control
Nan Chung Petrochemical Corporation	Affiliated enterprises
Wk Taipei Co., Ltd.	Affiliated enterprises
Storm Model Management Co., Ltd.	Affiliated enterprises
Lay Coffee Co., Ltd.	Affiliated enterprises
TRIFORD INTERNATIONAL LIMITED	Affiliated enterprises
Hua Nan Financial Holding	Substantial related party
Hua Nan Bank	Substantial related party
South China Insurance Company, Ltd.	Substantial related party
TAIWAN FILAMENT WEAVING DEVELOPMENT CO., LTD.	Substantial related party
Syuten Investment Co., Ltd.	Substantial related party
Yu Hui Co.,Ltd	Substantial related party
Formosa Imperial Wineseller Corp.	Substantial related party
Formosawine Vintners Corporation	Substantial related party
Dah Fa Investment Co.,Ltd	Substantial related party
Sheen Ren Knitting Factory Co., Ltd.	Substantial related party
Reliance Consolidated Securities Co., Ltd.	Substantial related party
Wang Wan Chin Education Foundation	Substantial related party
Sheng Yuan Zhe Investment	Substantial related party
Chao Qing Investment Co., Ltd.	Substantial related party
Pan Xu Investment Co., Ltd.	Substantial related party
General Pride Enterprise Co., Ltd.	Substantial related party
Feng Chi Investment Co., Ltd.	Substantial related party
Han Hua Co., Ltd. (formerly Key Wisdom Technology Co., Ltd.)	Substantial related party
Shen Ching Investment Co., Ltd.	Substantial related party
Yao Shang Investment Co., Ltd.	Substantial related party
Chi Ta Investment Co., Ltd.	Substantial related party
Hsu Yi Investment Co., Ltd.	Substantial related party
Chuang Chien Recreation Investment Co., Ltd.	Substantial related party
Weierfu Investment Co., Ltd.	Substantial related party
Baoxinghong Development Co., Ltd.	Substantial related party
Hongxuan Investment Co., Ltd.	Substantial related party
Shuo Rong Investment Limited Company	Substantial related party
Bang Yu Co., Ltd.	Substantial related party
Ri Yao United Trading Co., Ltd.	Substantial related party
TAICHUNG COMMERCIAL BANK Cultural and Educational Foundation, TAICHUNG COMMERCIAL BANK Workers' Welfare Commission, Taichung Commercial Bank Charity Foundation	Substantial related party
Others	Key management personnel of the merged company and their spouses and relatives within the second degree of kinship

115 -

(II) Important transactions between the Company and related parties:

Sales revenue

Name	2025	2024
Substantial related party	$ 779	$ 1,297

There are no significant differences between sales prices and collection terms for related parties of the merged company and regular customers.

Purchases

Name	2025	2024
Affiliated enterprises	$ 39,160	$ -

The terms and conditions of the Consolidated Company's purchase from said related parties are as same as that to the general suppliers. The general suppliers apply the A/R settlement 1 month~2 months.

Bank deposits and interest revenue

Name	2025		2024
	Balance - ending	Interest revenue	Balance - ending	Interest revenue
Substantial related party
Hua Nan Bank	$ 125,007	$ 472	$ 120,666	$ 298

Receivables from related parties

Name	December 31, 2025	December 31, 2024
Substantial related party	$ -	$ 246

Accounts payable to related parties

Name	December 31, 2025	December 31, 2024
Accounts payable
Affiliated enterprises	$ 9,167	$ -
Other payables
Substantial related party	$ 853	$ -

Disposal of property, plant and equipment

Name	Disposal price		Disposal profit
		2025	2024	2025	2024
Substantial party	related Others	$ -	$ 400	$ -	$ 2

Disposal of financial assets

Name	Account titles in book	Number of traded shares	Transaction object	Disposal price	Disposal profit
Substantial related party	The financial assets measured for the fair values through other comprehensive income- non-current	6,636	Preferred stock	$ 66	$ 55

Loans to related parties

Name	December 31, 2025	December 31, 2024
Affiliated enterprises
Nan Chung
Petrochemical Corporation	$ 300,000	$ 300,000

The consolidated company provided an unsecured loan to Nan Chung Petrochemical Corporation, with an interest rate comparable to market rates.

Receivable interest

Name	December 31, 2025	December 31, 2024
Affiliated enterprises
Nan Chung
Petrochemical Corporation	$ 739	$ 739
Interest revenue
Name	2025	2024
Affiliated enterprises
Nan Chung
Petrochemical Corporation	$ 8,676	$ 3,194

Income from handling fees

Name	2025	2024
Substantial related party	$ 66	$ -

The aforementioned amounts relate to sales promotion and channel revenues, and the transaction prices between the consolidated company and related parties are comparable to those with non-related parties.

117 -

118 -
Other income

Name	2025	2024
Substantial related party
Hua Nan Financial Holding	$ 13,980	$ 12,333
Others	334	2,899
	$ 14,314	$ 15,232

Rental revenue

Name	2025	2024
Substantial related party	$ 3,541	$ 2,944
Affiliated enterprises	2,129	1,610
Investors with control	24	24
	$ 5,694	$ 4,578

Dividend income

Name	2025	2024
Substantial related party
Hua Nan Financial Holding	$ 91,452	$ 86,925
Hua Nan Bank	35,778	34,006
	$ 127,230	$ 120,931

Other Expenses

Name	2025	2024
Affiliated enterprises	$ 53,009	$ -
Substantial related party	11,587	37,219
	$ 64,596	$ 37,219

14. Loans

2025
Unit: NTD thousand

Category	Number of accounts or name of stakeholder	Maximum Balance in Current Period	Balance - ending	Performance		Interest revenue	Collateral Contents	Difference in trading conditions and terms with non-stakeholders
				Normal loans	No-performing loans
Customer loans to employees	7 accounts	$ 4,726	$ 2,779	$ 2,779	$ -	$ 59	Credit facility	N/A
Residential mortgage loans	44 accounts	304,284	252,351	252,351	-	4,988	Real estate	o
Other loans	Lo OO	2,724	2,422	2,422	-	62	o	o
	Huang OO	880	736	736	-	17	o	o
	Huang OO	865	680	680	-	15	o	o
	Wang OO	4,600	2,300	2,300	-	56	o	o
	Shen OO	11,822	11,278	11,278	-	278	o	o
	Lee OO	1,855	1,713	1,713	-	40	o	o
	Chen OO	40,000	40,000	40,000	-	880	o	o
	Yang OO	3,768	3,410	3,410	-	84	o	o
	Tung OO	30,000	20,000	20,000	-	525	o	o
	Tung OO	20,000	20,000	20,000	-	160	o	o
	Lin OO	46	-	-	-	-	o	o
	Wang OO	8,000	8,000	8,000	-	162	o	o
	Wang OO	5,000	5,000	5,000	-	89	o	o
	Fan OO	42,500	42,500	42,500	-	918	o	o
	Tung OO	10,000	10,000	10,000	-	196	o	o
	Lin OO	21,750	19,950	19,950	-	511	o	o
	Chang OO	1,585	1,513	1,513	-	39	o	o
	Huang OO	2,000	2,000	2,000	-	4	o	o
	Liao OO	5,500	5,465	5,465	-	151	o	o
	Lin OO	1,281	-	-	-	16	o	o
	Chang OO	2,500	2,500	2,500	-	66	o	o
	Lin OO	6,100	5,000	5,000	-	117	o	o
	Lee OO	4,000	1,000	1,000	-	20	o	o

2024
Unit: NTD thousand

Category	Number of accounts or name of stakeholder	Maximum Balance in Current Period	Balance - ending	Performance		Interest revenue	Collateral Contents	Difference in trading conditions and terms with non-stakeholders
				Normal loans	No-performing loans
Customer loans to employees	9 accounts	$ 4,419	$ 3,214	$ 3,214	$ -	$ 91	Credit facility	N/A
Residential mortgage loans	49 accounts	268,907	227,066	227,066	-	4,306	Real estate	o
Other loans	Lo OO	2,823	2,724	2,724	-	31	o	o
	Huang OO	1,020	880	880	-	20	o	o
	Huang OO	1,463	865	865	-	22	o	o
	Lai OO	2,000	2,000	2,000	-	-	o	o
	Wang OO	2,300	2,300	2,300	-	21	o	o
	Lee OO	1,995	1,855	1,855	-	42	o	o
	Chen OO	40,000	40,000	40,000	-	858	o	o
	Yang OO	4,119	3,768	3,768	-	91	o	o
	Tung OO	30,000	30,000	30,000	-	672	o	o
	Lin OO	138	46	46	-	-	o	o
	Wang OO	3,000	3,000	3,000	-	72	o	o
	Fan OO	23,800	23,800	23,800	-	299	o	o
	Tung OO	8,000	8,000	8,000	-	203	o	o
	Lin OO	23,000	21,750	21,750	-	340	o	o
	Chang OO	1,656	1,585	1,585	-	40	o	o
	Tung OO	40,000	-	-	-	931	o	o
	Liang OO	403	278	278	-	7	o	o
	Chang OO	2,500	2,500	2,500	-	58	o	o
	Chiu OO	2,009	1,346	1,346	-	32	o	o
	Lin OO	6,100	6,100	6,100	-	22	o	o

119 -

According to Articles 32 and 33 of the Banking Act of the Republic of China, no non-secured credit loans shall be granted to any party interested with the Bank's staff, unless they are consumer loans and loans extended to the Government Apparatus; secured credit loans shall be granted under sufficient collateral and the terms of such credit extension shall not be more favorable than those offered to other customers in the same category.

15. Deposits

	2025			2024
	Balance - ending	Interest Rate Collars %	Interest Expenses	Balance - ending	Interest Rate Collars %	Interest Expenses
TAICHUNG COMMERCIAL BANK Workers' Welfare Commission	$ 159,545	0.01~5.76	$ 9,114	$ 151,645	0.01~5.76	$ 8,485
TAICHUNG COMMERCIAL BANK Cultural and Educational Foundation	8,334	0.01~1.72	139	8,285	0.01~1.72	137
Reliance Consolidated Securities Co., Ltd.	10,544	0.71~1.47	150	10,394	0.71~1.47	140
Formosa Imperial Wineseller Corp.	2	0.71	-	2	0.71	-
Yu Hui Co.,Ltd	4	0.01	-	4	0.01	-
Syuten Investment Co., Ltd.	148,898	0.00~0.80	88	132,167	0.00~1.30	45
Pan Asia Investment Corporation	7	0.01	-	7	0.01	-
Shuo Rong Investment Limited Company	7,122	0.01	1	30,457	0.01	1
Feng Chi Investment Co., Ltd.	4	0.71	-	4	0.71	-
Lay Coffee Co., Ltd.	506	0.71	7	2,187	0.71	27
Chuang Chien Recreation Investment Co., Ltd.	1	0.71	-	1	0.71	-
Yao Shang Investment Co., Ltd.	1,956	0.71	46	8,488	0.71	42
Hsu Yi Investment Co., Ltd.	1,956	0.71	46	8,488	0.71	42
Chi Ta Investment Co., Ltd.	1,956	0.71	46	8,488	0.71	42
Pan Xu Investment Co., Ltd.	36,453	0.01	-	2,001	0.01	-
Wk Taipei Co., Ltd.	13	0.71	-	6	0.58~0.71	1
Han Hua Co., Ltd.	390	0.01	-	-	-	-
Others	495,343	0.00~5.76	8,746	472,418	0.001~6.20	8,592
	$ 873,034		$ 18,383	$ 835,042		$ 17,554

Compared to general customers, there is no major difference in deposits, except for the interest rates for bank clerks both accounting for 5.76% in 2025 and 2024.

16. Financial bonds payable

The first, second, third, fourth, and fifth tranches in 2017 and the first and second tranches in 2018, and first and second tranches in 2025 by the Taichung Commercial Bank Co., Ltd. are non-cumulative secondary financial bonds with no expiry dates. The Concord Securities, Yuanta Securities and the KGI Securities

120 -

have been designated by proxy as the financial advisor for bond issuance and fundraising.

As of December 31, 2025, the financial bonds of Taichung Commercial Bank subscribed by the related parties through the underwriters are as follows:

Trading Counterpart	Subscription amount	Session
Syuten Investment Co., Ltd.	$ 4,590,000	First and fifth tranche in 2017, 1st and second tranche in 2018, first and second tranches in 2025 of perpetual non-accumulative subordinated debentures
Other related parties	2,810,000	The first, third, fourth, and fifth tranches in 2017, first and second tranches in 2018, and second tranche in 2025 of perpetual non-cumulative subordinated debentures

As of December 31, 2025 and 2024, Taichung Commercial Bank should pay bond interest from bank debentures to the aforementioned related parties amounting to NT$26,774 thousand, and NT$46,313 thousand, respectively. The interest expenses as of December 31, 2025 and 2024 amounted to NT$255,754 thousand and NT$259,672 thousand, respectively.

17. Tenancy agreement

Type and Name of related party	2025	2024
Interest expenses
Substantive related party - Yu Hui Co., Ltd.	$ -	$ 29
Substantive related party - General Pride Enterprise Co., Ltd.	$ -	$ 1

The lease term and rental payment method are stipulated in the contract. The general lease term ranges from 2 to 5 years, and rental payments are primarily made on a monthly basis.

(III) Rewards to management

The 2025 and 2024 total remuneration to directors and the other management are as follows:

	2025	2024
Short-term employee benefits	$ 522,906	$ 482,356

Retirement benefits	26,164	22,050
Other long-term employee benefits	14	6
	$ 549,084	$ 504,412

The salaries and remunerations to directors and other key management were determined by the Salary Committee in accordance with the personal performances and trends in the markets:

122 -

XXXVIII. Pledged assets

The consolidated company provides assets as operation bonds, collaterals for bank borrowings, guarantee for repurchase agreement, guarantee for overdraft limit, margin for financial derivatives, guarantee for import duty and guarantee for hiring foreign workers (list them based on the book value):

	December 31, 2025	December 31, 2024
Notes receivable	$ 7,040,676	$ 7,893,687
Due from bank- time deposits	200,000	200,000
Other current assets
Restricted assets – bank deposits	396,526	311,308
Financial assets at fair value through other comprehensive profit or loss	1,074,748	793,165
Investment of debt instrument on the basis of cost after amortization – government bonds	670,500	640,500
Investment under the equity method	71,737	82,724
Investment property	2,224,668	1,294,328
Property, plant and equipment
Land	3,470,237	3,411,627
House and Building	1,264,560	1,037,778
Machine and Equipment	77,827	87,035
	$ 16,491,479	$ 15,752,152

XXXIX. Significant undertakings or contingencies

In addition to the undertaking for financial products specified in Notes 8, 9 and 25, the consolidated company have had the following undertakings or contingent liabilities until December 31, 2025 and 2024:

(I) As of December 31, 2025 and 2024, the consolidated company has issued but not used of letters of credit are at $2,006,717 thousand and $1,379,293 thousand, respectively.

(II) CMFC and Air Liquide Far Eastern signed a gas purchase agreement, which specified the minimum purchase volume of oxygen and nitrogen. The monthly purchase is about NT$13,800 thousand, with adjustments made every April in accordance with the customer price index. The purchase volume of oxygen and nitrogen is based on the contract price. The purchase agreement has a term of 240 months. The agreement will be automatically renewed for 36 months upon expiration if neither party has objection. A 24-month notice is required for the termination of the

123 -

agreement. Both parties agreed on July 1, 2014 as the effective date of the agreement.

(III) Taichung Commercial Bank has other commitments:

	December 31, 2025	December 31, 2024
Undisbursed credit committee (exclusive of credit cards)	$ 203,526,523	$ 206,096,006
Credit card loan commitments	13,965,747	13,657,478
Receivable guarantees	45,241,863	38,123,697
Trust liabilities	127,632,067	121,796,319
The payment of opened but unused letter of credit	3,537,598	3,839,521
Not yet initiated finance lease contractual commitments during lease periods	2,870,368	8,171,795

(IV) The balance sheet and trust property catalogue of the trust account is disclosed pursuant to Article 17 of the "Enforcement Rules of Trust Enterprise Act" as follows:

Balance Sheet of Trust Accounts
December 31, 2025

Trust assets	Amount	Trust liabilities	Amount
Bank deposits	$ 8,252,846	Payable securities in custody	$ 4,046,007
Bonds	21,613,681	Trust capital	123,586,060
Stocks	4,953,725	Net income	2,413,221
Funds	52,982,880	Deferred carry-over	( 2,413,221 )
Structured product investment	4,881,459
Real estate
Land	30,762,077
House and Building	139,392
Securities in custody	4,046,007
Total trust assets	$127,632,067	Total trust liabilities	$127,632,067

Note As of December 31, 2025, the "non-discretionary money trust investment in domestic and foreign securities" of international financial business branches accounted for totaled NT$4,892,587 thousand.

Property Catalogue of Trust Accounts
December 31, 2025

Investment projects	Amount
Bank deposits	$ 8,252,846
Bonds	21,613,681
Stocks	4,953,725
Funds	52,982,880
Structured product investment	4,881,459
Real estate
Land	30,762,077
House and Building	139,392
Securities in custody	4,046,007
	$127,632,067

Income Statement of Trust Accounts 2025

	Amount
Trust income
Interest revenue	$ 3,850,262
Cash dividend income	79,689
Trust expenses
Administration expenses	( 1,514,756 )
Taxes	( 1,974 )
Net profit before tax	2,413,221
Income tax expenses	-
Net profit after tax	$ 2,413,221

125 -

Balance Sheet of Trust Accounts
December 31, 2024

Trust assets	Amount	Trust liabilities	Amount
Bank deposits	$ 11,678,203	Payable securities in custody	$ 5,230,749
Bonds	21,550,532	Trust capital	116,565,570
Stocks	5,156,616	Net income	1,818,582
Funds	49,036,139	Deferred carry-over	( 1,818,582 )
Structured product investment	3,850,269
Real estate
Land	25,183,227
House and Building	110,584
Securities in custody	5,230,749
Total trust assets	$ 121,796,319	Total trust liabilities	$ 121,796,319

Note As of December 31, 2024, the "non-discretionary money trust investment in domestic and foreign securities" of international financial business branches accounted for totaled NT$3,833,541 thousand.

Property Catalogue of Trust Accounts
December 31, 2024

Investment projects	Amount
Bank deposits	$ 11,678,203
Bonds	21,550,532
Stocks	5,156,616
Funds	49,036,139
Structured product investment	3,850,269
Real estate
Land	25,183,227
House and Building	110,584
Securities in custody	5,230,749
	$121,796,319

Income Statement of Trust Accounts
2024

	Amount
Trust income
Interest revenue	$ 3,294,303
Cash dividend income	84,601
Trust expenses
Administration expenses	( 1,559,336)
Taxes	( 986)
Net profit before tax	1,818,582
Income tax expenses	-
Net profit after tax	$ 1,818,582

(V) Leasing contracts and capital expenditure commitments maturity analysis

The consolidated company's leasing contract commitments include operating leases and financing leases.

The operating lease commitment meant for the minimum lease payment of the consolidated company as a lessor under the irrevocable operating lease. For operating lease contractual commitments please refer to Note 19(4) and 21.

The term "finance lease commitments" refers to the present value of total lease investments and minimum receivable lease payments with the merged company as lessor in accordance with the finance lease terms.

Capital expenditure commitment refers to the contract signed for the capital expenditures paid to receive architecture and equipment.

In consideration of increasing business and employees of the Taichung Commercial Bank Co., Ltd., the Bank held and open tender online for the main building construction of the Bank on February 11, 2019. On March 29, 2019, DA CIN Construction Co., Ltd. and EARTH POWER Co., Ltd. won the bid by joint venture, and a contract was entered into, for a total contract price at NT$11,160,000 thousand. On April 27, 2019, the contractors filed for starting of work. For the purpose of raising the construction safety and quality benefits, both parties agreed to change the "Top-down well foundation alternative construction techniques" and "Structural optimization of the raft foundation alternative plan." On January 8, 2021, processed the additional amendment to the agreement for the first time. The total contract price after changes is NT$11,155,943 thousand. On May 9, 2022, processed the additional amendment to the agreement for the second time. The total contract

127 -

price after changes is NT$11,154,971 thousand. There were no changes in the contract amount for the third and fourth supplementary agreements. On February 2, 2024, the fifth supplementary agreement was executed, under which the total contract amount was revised to NT$11,239,324 thousand. On June 4, 2025 the sixth supplementary agreement was executed, under which the total contract price was revised to NT$11,242,822 thousand. On November 25, 2025, the seventh supplementary agreement was executed, under which the total contract price was revised to NT$11,182,542 thousand. In addition, the contract amount for the planning, design, and construction supervision technical service agreement entered into with YSL Architects and Associates on January 5, 2016 was NT$480,492 thousand. On September 29, 2022, Rich Honour International Designs Co., Ltd. entered into an interior decoration design and construction supervision technical service agreement with an estimated total service fee of NT$195,000 thousand. Following a supplementary agreement executed on November 18, 2025, the total contract price was revised to NT$203,500 thousand. On November 11, 2024, Earth Power Construction Co., Ltd. undertook the interior decoration project for the bank premises, with a total contract price of NT$1,399,000 thousand.

Maturity analysis for finance lease contractual commitments and capital expenditure commitments with the merged company as lessor is provided below:

Total finance lease revenue

	December 31, 2025	December 31, 2024
First year	$ 3,768,226	$ 4,543,764
Second year	753,322	1,806,921
Third year	87,810	253,746
Fourth year	15,765	25,025
Fifth year	18,129	15,955
More than 5 years	174,448	194,670
	$ 4,817,700	$ 6,840,081

Present value of finance lease revenue

	December 31, 2025	December 31, 2024
First year	$ 3,432,625	$ 4,076,772
Second year	717,087	1,706,873
Third year	73,161	235,026
Fourth year	5,772	13,749
Fifth year	8,652	5,698
More than 5 years	124,945	133,956
	$ 4,362,242	$ 6,172,074

Capital expenditure commitment

	December 31, 2025	December 31, 2024
First year	$ 2,930,441	$ 4,559,762
Second year	28,485	50,618
	$ 2,958,926	$ 4,610,380

(VI) O-Bank and Yuanta Bank filed a litigation in February and November, 2020 by reason of several employees receiving the aforementioned bank's assignment of claim notice and serving as the contact window in cooperation with the New Site Industries Inc., resulting in bank clerks' error and mistakenly believing the company, Yijinyang Industries Co., Ltd., and New Brite Industries Inc. incurred transactions and continuing to lend and allocate funds, and claiming the company and employees shall be jointly and severally liable for compensation. CMFC has commissioned a defense attorney to represent the Company in this lawsuit. Based on the lawyer's opinion, this case objectively possesses no external form of duties performed by employed persons. After the trial, the court deemed the bank's entitlement to seeking compensation from China Man-Made Fiber Corporation. The reduction or exemption of the compensation liability of China Man-Made Fiber Corporation will affect the compensation amount. On August 23, 2024, the Company received a notice from the Taipei District Court informing that Yuanta Bank had withdrawn its lawsuit. The case was concluded as Yuanta Bank withdrew its claim against the Company. In addition, China Man-Made Fiber Corporation has recognized a provision of NT$53,916 thousand for the unresolved litigation with O-Bank. Please refer to Note 31(5).

(VII) Regarding the return of consumer consignment litigation filed by Taichung Commercial Bank Co., Ltd. and the Pihsiang Energy Technology Co., Ltd., in the first trial, the Taichung District Court by order of 2018 Chung-Su-Zi No. 598 on February 4, 2020 (same below) decided against Taichung Commercial Bank Co., Ltd. NT$100 million should be returned to the plaintiff (i.e. Pihsiang Energy Technology Co., Ltd.) From April 10, 2018 to the day of clearance, the interest rate of 5% per annum will be calculated. The litigation fees will be shouldered by the Taichung Commercial Bank Co., Ltd. The appointed lawyer evaluated the content of the original verdict and deemed the verdict reasons contradictory and in violation of verdict without reason. Therefore, the Taichung Commercial Bank Co., Ltd. Filed an appeal on February 27, 2020. On March 29, 2022, the Taiwan High Court Taichung Branch Court ruled in the favor of Taichung Commercial Bank by order 2020

Chung-Su-Zi No. 78; however, the plaintiff had dissenting opinion on the verdict of the second instance and filed an appeal. On January 11, 2024, the Supreme Court remanded the case to Taiwan High Court Taichung Branch Court. Taichung Commercial Bank had previously recognized a provision for the unresolved compensation related to the aforementioned litigation (including statutory interest and litigation costs) based on the civil judgment Chong-Su-Tzu No. 598 of 2018 rendered on February 4, 2020. As of December 31, 2025, the remaining balance of the provision for unresolved compensation was NT$39,090 thousand. For details on changes in the provision, please refer to Note 31(5).

(VIII) Taichung Commercial Bank was suspected of violating the Banking Act and was indicted by the New Taipei District Prosecutors Office following an investigation concluded on June 21, 2024, with a proposed fine of NT$500 million. After consulting external legal experts, Taichung Commercial Bank assessed the likelihood of being ultimately fined by the court as extremely low; therefore, no related provision has been recognized.

(IX) The consolidated company Hebei Hammock Company Limited, and Hebei Province Langfang Emerging Industry Demonstration Zones Branch have signed and entered into an agreement on the assignment of state-owned construction land use right. The agreement condition is that the land use right is for use of industrial construction and total fixed assets investment shall not be less than CNY 360,000 thousands. Investment intensity shall not be less than CNY 4.5 thousands per square meter. If the total investment for fixed assets and the investment intensity do not meet the standard in the agreement, the Hebei Province Langfang Emerging Industry Demonstration Zones Branch can take the ratio of the actual difference to the agreed investment total and investment intensity and request Hebei Hammock Company Limited to pay liquidated damages that is of equivalent proportion to the fees for the assignment of the right to use state-owned land and continue the contract obligations. In addition, if there are any of the following circumstances, the land would be identified by city and county land resources authority departments as "idle land plot:" A plot that has been in the process of development, but the area already developed is less than one third of the total area that should have been developed or the investment already made is less than 25% of the total investment, and the cease of development has lasted for more than one year (including one year). The authority may depend on the level of severity and collect idle land fees or take back the user's

130 -

right to use the land without compensation. As of December 31, 2025, there has been no breach of contract.

XL. Financial instruments

(I) Fair value information- Financial instruments that are not measured at fair value

For the consolidated company's financial instruments not measured at fair value, except for the items listed in the table below, the carrying amounts of other financial instruments approximate their fair values and, therefore, their fair values have not been disclosed.

1. Fair value bracket

December 31, 2025

	Fair value
	Book Value	Level 1	Level 2	Level 3	Total
Financial Assets
Investment of debt instruments on the basis of cost after amortization	$ 103,968,441	$ 82,423,531	$ 21,386,821	$ -	$ 103,810,352
Financial Liabilities
Financial liabilities based on cost after amortization:
-Financial bonds payable	15,150,000	-	15,098,907	-	15,098,907

December 31, 2024

	Book Value	Fair value
		Level 1	Level 2	Level 3	Total
Financial Assets
Investment of debt instruments on the basis of cost after amortization	$ 108,390,052	$ 82,467,638	$ 24,936,861	$ -	$ 107,404,499
Financial Liabilities
Financial liabilities based on cost after amortization:
-Financial bonds payable	13,500,000	-	13,424,079	-	13,424,079

Evaluation techniques and an input value of Level 2 fair value measurement

Categories of financial instruments	Evaluation techniques and input values
Non-derivatives	The bid price in active markets is not taken as fair value.

(II) Information on fair value – financial instruments at fair value on repetition.

Fair value bracket

	December 31, 2025
	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit and loss
Derivatives	$ 10,609	$ 10,828,961	$ -	$ 10,839,570
Commercial papers	29,713,055	-	-	29,713,055
Listed stocks – domestic and emerging stock	1,391,493	229,920	-	1,621,413
Domestic non-listed (OTC) stocks	-	-	57,124	57,124
Beneficiary certificates of funds	628,573	-	-	628,573
Domestic corporate bonds	22,721	-	-	22,721
Others	-	417,206	-	417,206
Total	$ 31,766,451	$ 11,476,087	$ 57,124	$ 43,299,662
Financial assets at fair value through other comprehensive profit or loss
Equity investment
- Domestic stocks listed on TPWE (TPEx) and Emerging Stock Market	$ 7,894,434	$ -	$ -	$ 7,894,434
- Foreign TSEC/GTSM listed shares	564,760	-	-	564,760
- Domestic unlisted stocks	-	-	2,499,584	2,499,584
- Foreign unlisted stocks	-	-	7,768	7,768
Debt instrument
- Domestic corporate bonds	36,751,299	3,499,510	-	40,250,809
- Domestic government bonds	11,812,950	-	-	11,812,950
- Overseas bond	-	40,003,794	-	40,003,794
- Financial bonds	2,013,744	-	-	2,013,744
Total	$ 59,037,187	$ 43,503,304	$ 2,507,352	$ 105,047,843

133 -
Financial liabilities at fair
value through profit and
loss

Derivatives	$	-	$ 2,682,542	$	-	$ 2,682,542

Reconciliation of financial instruments at Level 3 fair value:

Financial Assets	Financial assets at fair value through profit and loss			Financial assets at fair value through other comprehensive profit or loss
	Derivatives	Equity instruments	Debt instruments	Equity instruments	Debt instruments	Total
Balance - beginning	$ -	$ 26,926	$ -	$ 2,178,411	$ -	$ 2,205,337
Recognized in profit or loss (Unrealized gains or losses on financial assets at fair value through profit or loss)	-	2,108	-	-	-	2,108
Recognized in the other comprehensive income (Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss)	-	-	-	328,556	-	328,556
Purchase	-	70,502	-	841	-	71,343
Disposal	-	-	-	( 456 )	-	( 456 )
Transferred from Level 3	-	( 42,412 )	-	-	-	( 42,412 )
Balance - ending	$ -	$ 57,124	$ -	$ 2,507,352	$ -	$ 2,564,476
	December 31, 2024
---	---	---	---	---
	Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit and loss
Derivatives	$ 15,440	$ 12,591,628	$ -	$ 12,607,068
Commercial papers	21,024,344	-	-	21,024,344
Domestic stocks listed on TWSE(TPEx) and Emerging Stock Market	1,055,725	161,955	-	1,217,680
Domestic non-listed (OTC) stocks	-	-	26,926	26,926
Beneficiary certificates of funds	1,220,726	-	-	1,220,726
Domestic corporate bonds	329,763	-	-	329,763
Others	-	537,893	-	537,893
Total	$ 23,645,998	$ 13,291,476	$ 26,926	$ 36,964,400
Financial assets at fair value through other comprehensive profit or loss
Equity investment
- Domestic stocks listed on TPWE (TPEx) and Emerging Stock Market	$ 6,954,660	$ -	$ -	$ 6,954,660
- Foreign TSEC/GTSM listed shares	530,070	-	-	530,070
- Domestic unlisted stocks	-	-	2,170,156	2,170,156
- Foreign unlisted stocks	-	-	8,255	8,255
Debt instrument
- Domestic corporate bonds	33,484,951	4,299,380	-	37,784,331
- Domestic government bonds	12,381,475	-	-	12,381,475
- Overseas bond	-	42,401,938	-	42,401,938
- Financial bonds	1,489,269	-	-	1,489,269
Total	$ 54,840,425	$ 46,701,318	$ 2,178,411	$ 103,720,154
Financial liabilities at fair value through profit and loss
Derivatives	$ -	$ 2,821,648	$ -	$ 2,821,648

Reconciliation of financial instruments at Level 3 fair value:

Financial Assets	Financial assets at fair value through profit and loss			Financial assets at fair value through other comprehensive profit or loss
	Derivatives	Equity instruments	Debt instruments	Equity instruments	Debt instruments	Total
Balance - beginning	$ -	$ 63,573	$ -	$1,445,045	$ -	$1,508,618
Recognized in profit or loss (Unrealized gains or losses on financial assets at fair value through profit or loss)	-	( 10,944 )	-	-	-	( 10,944 )
Recognized in the other comprehensive income (Unrealized gain or loss on financial assets at fair value through other comprehensive profit or loss)	-	-	-	560,065	-	560,065
Purchase	-	148,780	-	173,301	-	322,081
Transferred from Level 3	-	( 174,483 )	-	-	-	( 174,483 )
Balance - ending	$ -	$ 26,926	$ -	$2,178,411	$ -	$2,205,337

In 2025 and 2024, there was no transfer of fair values measures in Level 1 and Level 2.

Evaluation techniques and an input value of Level 2 fair value measurement

Categories of financial instruments	Evaluation techniques and input values
Non-derivatives	The bid price in active markets is not taken as fair value.
Derivatives
Options Contracts	Model Evaluation Method: The prices of execution of all contracts, market fluctuation and maturity, interest rate, and exchange rate were taken as parameters for evaluation, and were subject to evaluation using the close-box model.
FX swap contracts, and forwards contracts	Cash flow discount method: Estimate the future cash flow on the basis of observable forwards rate and the forwards contracts entered into, and subject to discount on the basis that could reflect the risk discount rate for respective counterparties.
Assets swap agreement	The calculation of the closing price of convertible bonds on the day of net bond value: net bond value shall be discounted through the adjustment of risk discount on the basis of the TAIBIR on short-term Taiwan bills compiled at TDCC on the basis of the future cash flow of convertible bonds.
Structured products
Interest rate derivatives	Quotation of counterparties.

Evaluation techniques and an input value of Level 3 fair value measurement

Categories of financial instruments	Evaluation techniques and input values
Unlisted/OTC	Market multiple method: The fair value of the subject matter may be evaluated by comparison with the bid price of the stocks in the industry in the active market with liquidity discount ratio taken into account and the corresponding net value of multiples.

The measurement of Level 3 fair value is the sensitivity analysis of the reasonable substituted assumption of fair value

The significant unobservable input value under the market multiple method adopted by the consolidated company is the liquidity discount ratio. When the ratio increases, the fair value of the investment decreases. Sensitivity analysis is compiled as follows:

	December 31, 2025	December 31, 2024
Liquidity Discount Rate
Increase by 10%	($ 75,033)	($ 57,280)
Decrease by 10%	$ 75,033	$ 57,280

(III) Categories of financial instruments

	December 31, 2025	December 31, 2024
Financial Assets
Measured at fair values through profit and/or loss
Measured at fair value through income under compulsion	$ 43,299,662	$ 36,964,400
Financial assets on the basis of cost after amortization (Note 1)	850,220,722	816,549,289
Financial assets at fair value through other comprehensive profit or loss
Equity investment	10,966,546	9,663,141
Debt instrument	94,081,297	94,057,013
Financial Liabilities
Measured at fair values through profit and/or loss
Measured at fair value through income under compulsion	2,682,542	2,821,648
Financial assets on the basis of cost after amortization (Note 2)	932,511,282	900,325,763

Note 1: The balance include cash and cash equivalent, the Central Bank deposits and interbank lending, bills and bonds purchased under resale agreements, notes receivables and accounts, other receivables, net discounts and lending, financial assets at amortized cost - Non-current, restricted assets, refundable deposits and other financial assets at amortized cost.

Note 2: The balance include short-term loans, short-term notes payable, repurchase coupons and bonds liabilities, the Central Bank and interbank financing, bills payable and accounts, other payables (excluding dividend payable), deposits and remittances, bills payable (including those with one-year to maturity), long-term borrowings (including those with one-year to maturity), refundable deposits and other financial liabilities measured at amortized cost.

XLI. Purpose and policy of financial risk management

The China Man-Made Fiber Corporation’s financial management department shall provide services to each business unit, to plan and coordinate operations in the domestic and international financial markets, and to monitor and manage the consolidated company’s operation-related financial risks with the internal risk report, with the risk exposure analyzed in accordance with the degree and breadth of risks. The risks include market risk, credit risk and liquidity risk. The financial risks associated with the consolidated company mainly come from the key subsidiary, Taichung Commercial Bank.

The consolidated company’s financial risk management objective is to achieve business objectives, the overall risk tolerance and legal restrictions in order to reach the balance of risks and returns. THE MAIN OPERATING RISKS FACED BY THE CONSOLIDATED COMPANY INCLUDE THE CREDIT RISK ON AND OFF THE FINANCIAL STATEMENTS, MARKET RISKS (INCLUDING INTEREST RATES, FOREIGN EXCHANGE RATES, EQUITY SECURITIES AND INSTRUMENT PRICE RISKS) AND LIQUIDITY RISKS.

The consolidated company have the related risk management policies defined and approved by the Board of Directors in order to effectively identify, measure, monitor, and control credit risk, market risk and liquidity risk.

The Board is the highest decision-making unit of the consolidated company and assumes the ultimate responsibility for risk management. The consolidated company has established a Risk Management Commission and Risk Management Department responsible for granting risk authority and the relevant authorities to the relevant

137 -

departments to ensure the successful operation of risk management. The Committee’s functions are specified as follows:

(I) Review of risk management projects.

(II) The review and discussion on risk limit.

(III) Review of motions for institutionalization of risk management.

(IV) Periodical report to the Board of Directors

The commissioners of the Risk Management Committee shall set the various risk management indicators by nature of business and functions of departments and Risk Management Dept. report them to the Risk Management Committee for high-ranking supervisors’ reference in decision making.

138 -

Market risk

(1) Source and definition of market risk

Market risk refers to the unfavorable changes in market price causing possible losses on and off the consolidated balance sheet. The so-called market price refers to interest rates, exchange rates, equity security prices and instrument prices.

(2) Market risk management policy

The consolidated company's market risk management objective is to develop a sound and effective market risk management mechanism that is compatible with the consolidated company's business scale, nature and complexity in order to ensure that the consolidated company's risks can be properly managed and effectively identify, measure, monitor, control market risks; also, establish a balance between the tolerable risk level and the expected rate of return.

(3) Market risk management process

A. Identification and measurement

Before the promotion and operation of new products, business activities, processes and systems, the relevant market risk should be assessed through appropriate procedures and determine whether the risk exposure is within the range of risk tolerance included for consideration. The consolidated company's responsible business units shall use business analysis or product analysis to verify the source of market risk and define market risk factors for each financial instrument as appropriate specifications.

Market risk measurement can be processed with a variety of effective measurement methods in order to properly measure risk, including but not limited to the following methods: statistical basis measurement method, sensitivity analysis, and scenario analysis. The risk management department should measure the risk position daily and regularly; also, conduct stress tests regularly to measure the possible extraordinary loss amount of current positions under the simulated extreme situations or historically extreme situations.

B. Monitoring and reporting

139 -

The risk management department should regularly report and make suggestions to the risk management committee and the board of directors on the bank’s overall market risk management, including the bank’s market risk positions, risk level, profit and loss, using excess of limit and market risk management related compliance. The business department has defined the relevant rules governing excess of limit, stop-loss mechanism and operating procedure for excess of limit in order to effectively control the market risk. The excess of limit or exception occurring shall be reported immediately in order to exercise responsive measures.

(4) Exchange rate risk

A. Definition of exchange rate risk

Exchange rate risk refers to the gains and losses resulting from the conversion of two different currencies at different times. The consolidated company’s exchange rate risk mainly arises from the spot and forward foreign exchange business. Since the consolidated company’s engages in foreign exchange trading mostly to meet the need for customer’s position daily; therefore, the exchange rate risk is relatively low.

B. Measurement methods and management procedures

The consolidated company manages its exchange risk by limit control whereby the limits of respective currencies during daytime trade and nighttime trade were set with the upper limit of the maximum exposure in foreign exchange authorized to personnel of different ranks for control. The upper limit for particular counterparty has also been set. The result of the monitoring and control was reported to the risk management committee and the board for discussion.

C. Sensitivity analysis

Assuming that all other variables remain constant, if the exchange rates of the foreign currencies held by the consolidated company appreciate/depreciate by 3%, the consolidated company’s profit or loss before tax as of december 31, 2025 and 2024 would increase/decrease by nt$92,853 thousand and nt$122,084 thousand,

140 -

respectively, while equity would increase/decrease by nt$1,308,168 thousand and nt$1,371,687 thousand, respectively.

(5) Interest rate risk

A. Definition of interest rate risk

Interest rate risk refers to the changes in interest rates that cause changes in the fair value of the consolidated company's interest rate or losses. The main sources of risk include deposit and loan and interest-rate related marketable securities.

B. Measurement methods and management procedures

Entities in CMFC borrow funds at floating interest rates, thus the exposure to interest rate risk. Taichung commercial bank adopts a gap management approach to the interest rate risk, setting indicators for monitoring and regularly reports the results to the asset and liability management committee, risk management commission and the board, and makes necessary adjustments according to the overall operating conditions of the company. In addition, Taichung commercial bank measures interest rate risk based on dv01, which assumes that when the interest rate curve moves parallel by 100bps, the extent of the impact on earnings and equity is used to control the interest rate risk.

C. Sensitivity analysis

Assuming that the other variables remain constant, if the yield curve goes up/down by 100 points, the consolidated company's net income before tax as of December 31, 2025 and 2024 increased/decreased by NTD 438,586 thousand and NTD 272,240 thousand; the equity decreased/increased by NTD 4,774,286 thousand and NTD 4,697,638 thousand, respectively.

(6) Equity securities price risk

A. Definition of equity securities price risk

The market risk of the consolidated company's equity securities includes individual risks arising from changes in equity securities market prices and general market risks arising from changes in the overall market prices. The main sources of risk includes listed/OTC stocks and beneficiary certificates.

141 -

B. Measurement methods and management procedures

CMFC is exposed to equity price risk due to the investments in publicly traded and OTC securities. The equity investments (except for financial assets at fair value through profit or loss) are not held for trading and are considered strategic. CMFC has not actively traded such investments. The equity price risk of CMFC is mainly on the petrochemical industry equity instruments in Taiwan's exchange. Taichung commercial bank adopts a limit management approach to the equity price risk, ensuring that personnel at all levels conduct their transactions within an authorized amount. Stop-loss measures are also implemented, and the monitoring results are regularly presented to the risk management committee and the board for discussion.

C. Sensitivity analysis

Assuming that all other variables remain constant, if equity security prices increase/decrease by 15%, the company and its subsidiaries' profit or loss before tax as of December 31, 2025 and 2024 would increase/decrease by nt$335,878 thousand and nt$361,158 thousand, respectively, while equity would increase/decrease by nt$1,666,826 thousand and nt$1,510,855 thousand, respectively.

(7) Sensitivity analysis is compiled as follows:

December 31, 2025
The main risk	Magnitude changes	Affected amount
		Other equity	Profit and loss
Exchange rate risk	A 3% appreciation in the foreign currencies held	$ 1,308,168	$ 92,853
	A 3% depreciation in the foreign currencies held	( 1,308,168 )	( 92,853 )
Interest rate risk	Interest rate curve rises by 100BPS	( 4,774,286 )	438,586
	Interest rate curve fell by 100BPS	4,774,286	( 438,586 )
Equity securities price risk	Equity securities price increases by 15%	1,666,826	335,878
	Equity securities price drops by 15%	( 1,666,826 )	( 335,878 )

December 31, 2024
The main risk	Magnitude changes	Affected amount
		Other equity	Profit and loss
Exchange rate risk	A 3% appreciation in the foreign currencies held	$ 1,371,687	$ 122,084
	A 3% depreciation in the foreign currencies held	( 1,371,687 )	( 122,084 )
Interest rate risk	Interest rate curve rises by 100BPS	( 4,697,638 )	272,240
	Interest rate curve fell by 100BPS	4,697,638	( 272,240 )
Equity securities price risk	Equity securities price increases by 15%	1,510,855	361,158
	Equity securities price drops by 15%	( 1,510,855 )	( 361,158 )

Credit risk

(1) Source and definition of credit risk

Credit risk refers to the financial loss inflicted on the consolidated company due to the non-performance of contractual obligations by the customers or the counterparties. The sources of credit risk covered on and off balance sheet items. On the sheet risk, exposure to the consolidated company mainly comes from discount, loans, credit cards, due from and call loans to banks, acceptance, debt instruments and derivatives. Off the sheet items are financial guarantee, L/C and undertaking of loans that also exposed the consolidated company to credit risk.

(2) Credit risk management policies:

In order to mitigate credit risk, the management of the consolidated company assigns dedicated personnel responsible for the decision on credit line, credit approval and other monitoring procedures to ensure that the overdue receivables are recovered and appropriate actions are taken. In addition, the consolidated company will review the recoverable amount of receivables on each balance sheet date to ensure that appropriate impairment loss has been appropriated for the uncollectible receivables. Accordingly, the consolidated company's management believes that the consolidated company's credit risk is significantly reduced.

The consolidated company continues to assess the financial condition of the customers of accounts receivable.

Except for the major customer company a of the consolidated company, the consolidated company does not have a significant credit

exposure to any single counterparty or any group counterparty with similar characteristics. When the counterparty is an affiliated company, the consolidated company has it defined as a counterparty with similar characteristics. In 2025 and 2024, the credit risk concentration with Company A accounted for 0.1% of total monetary assets.

In addition, financial products held or issued by the merged company may lead to losses due to failure of transaction counterparties or third parties to perform contract obligations. The consolidated company will evaluate credit carefully to grant loans and guarantees. The loans secured by collateral accounted for about 72% of the total loans on December 31, 2025. the proportion of financing guarantee and collateral held by commercial L/C was approximately 24%, because the collateral required by loans, loaning commitments or guarantees usually referred to cash, inventory, marketable securities or other property. In the event of the trading counterpart's or the other party's default, the consolidated company was entitled to perform compulsory execution against the collateral or other guarantees to effectively reduce the credit risk, provided that the fair value of collateral would not be taken into consideration when the maximum credit exposure was disclosed.

(3) Credit risk management procedures

Notes to the credit risk management procedures and methods of assessment of the consolidated company by BUSINESSES:

A. Loans (including commitments of financing and guarantees)

a. Judgment of significant increase of credit risk after initial recognition

The consolidated company evaluated the change in the default risk inherent to its loan assets within the perpetuity of these assets on each reporting day to determine if the credit risk increased significantly after initial recognition. For evaluation, the consolidated company considers the information (including prospective information) for justifying the significant increase of credit risk after the initial recognition. The major indicators for consideration are:

144 -

145 -

Quantified indicators

(a) Changes in external TCRI credit rating

TCRI ratings of companies listed at TWSE or TPEx corresponding to external ratings for downgrading the level to non-investment grade, which determined that the credit risk increased significantly after initial recognition.

(b) Information on delinquency

If the contracts turned delinquent for more than 1 month, it could be determined that the credit risk inherent to the financial assets has increased significantly.

Quality indicators

(a) Unfavorable change at present or as forecast to the operation, financial position or economic condition that significantly affected the debtors in performing their obligations in retirement of loans.

(b) The actual or forecasted significant change in operational results of the debtors.

b. Definition of default and financial assets with credit impairment

The consolidated company defined the agreement on financial assets as identical with the determination of credit impairment of financial assets. If any of the following are applicable, it could be determined that the financial asset has turned default with credit impairment:

Quantified indicators

(a) Changes in external TCRI credit rating

The TCRI ratings of companies listed at TWSE or TPEx rated as DEFAULT implied that credit impairment occurred after initial recognition.

(b) Information on delinquency

If the proceeds from contracts turned delinquent for more than 3 months, it could be determined that credit impairment occurred to the financial assets after initial recognition.

146 -

Quality indicators

If there is evidence implying that the borrower is unable to pay the contract amount, or indicating severe financial hardship of the borrower, such as:

(a) The debtor has gone bankrupt or had declared bankruptcy or financial restructuring.

(b) Other financial instrument contracts of the debtors have turned default.

(c) Due to the economic or contractual reasons related to the financial hardship of the debtors, the creditors gave the debtor a leeway which would otherwise not be considered for the borrowers and declared as non-performing loans.

The aforementioned default and credit impairment will be defined as applying to all financial assets held by the combined companies, and such definition is congruent with the financial assets relevant to the internal purpose of credit risk management and applied to the model for the evaluation of related impairments.

c. Measurement of anticipated credit loss

The consolidated company classified loan assets into the following combinations by the purpose of the loan, the nature of the industry, type of collaterals, and the mode of financing for the purpose of assessing anticipated credit loss:

Product portfolio
Corporate banking business	Corporate Finance-secured
	Corporate Finance-non-secured
Consumer banking business	Mortgage loans
	Personal, other, secured
	Personal, other, unsecured
	Credit facility
	Debit cards
	Credit cards

The consolidated company measured the provision for loss of financial assets that have no significant increase in credit risk after initial recognition on the basis of anticipated credit loss over a period of 12 months. The provision for loss of financial assets that

have significant increases in credit risk after initial recognition shall be measured on the basis of anticipated credit loss within the perpetuity of the financial assets.

For the measurement of ECL, the consolidated company considers the probability of default (PD) of the debtors in 12 months ahead and the lifetime of the loans, and includes into the loss given default (LGD), then multiplies by exposure at default (EAD). The effect of the time value of currency is also considered to calculate 12-month and lifetime ECLs, respectively.

The probability of default is the ratio of loss in case the particular debtor acted in default. The PD and LGD adopted by consolidated company in the assessment of loans is based on the internal historical information of the product portfolios (such as the experience in credit loss), and also the observable information at present and the prospective macroeconomic performance in grouping the products for separate evaluation.

The consolidated company assessed the EAD by a direct evaluation method for different groups of products. In assessing the commitment of financing in 12 months and the anticipated credit loss within the perpetuity of the assets, Taichung Bank adopted the direct assessment method for different groups and considered the portion of drawdown within 12 months after the reporting day of the commitment of financing and the anticipated renewal period to determine the EAD of anticipated credit loss.

CONSIDERATION OF PROSPECTIVE INFORMATION

In assessing anticipated credit loss, the consolidated company adopted the economic factors affecting credit risks and that were relevant to anticipated credit loss and takes prospective information into account. Prospective information is the "Economic Signal" released by the National Development Council of the ROC that served as the standard for the overall economic performance of Taiwan and relevant signals as the indicators. The signal system is classified as the expansion phase, contraction phase and level phase. The consolidated company will based on the judgment of economic

147 -

performance to adjust the probability of default and incorporate this information into the assessment of overall anticipated credit risk.

B. Debt instrument

The consolidated company will consider the historical record on the rate of default at different levels from external rating institutions and the financial position of the debtors at present, to assess the anticipated credit loss of the investment of debt instruments for 12 months in the future or the anticipated credit loss within the perpetuity of the instruments.

For the securities held by the consolidated company ECLs shall be recognized based on 12-month or lifetime ECL. The consolidated company shall determine the quality of securities as follows:

a. Judgment of significant increase of credit risk after initial recognition

The consolidated company shall assess the changes in the default risk of the investment of debt instruments within the perpetuity of the instruments on each reporting day to determine if there is any significant increase of credit risk after initial recognition. For evaluation purpose, the information for justifying the significant increase of credit risk after initial recognition in consideration shall include the following indicators:

Quantified indicators

(a) At the time of initial recognition, the credit rating of the issuers is at investment grade and higher. However, on the financial reporting day, the credit rating of the issuers fell to non-investment grade.

(b) The credit rating of the issuers of the debt instruments for investment was non-investment grade on the initial day of recognition and such status remained unchanged.

(c) If the credit rating of the issuers is at non-investment grade and further decline on the reporting day to certain extent.

148 -

Quality indicators

(a) The credit rating of the issuers indicated that credit risk has increased significantly.

(b) The fair value of the investment of debt instrument underwent unfavorable significant change on the reporting day.

b. Definition of default and financial assets with credit impairment

If any of more of the following are applicable to the investment of debt instrument, it could be determined that the financial assets were default with credit impairment.

Quantified indicators

(a) The debt instruments were bonds with credit impairment at the time of investment.

(b) The credit rating of the issuers or the debt instruments for investment fell to the default level on the reporting day.

Quality indicators

(a) The issuers revised the conditions for the issuance of the debt instruments or failed to pay principal or interest as the conditions of issuance due to financial hardship.

(b) Discontinuation of operation, petition for restructuring, bankruptcy, dissolution, the disposition of major assets of the company that significant affected continued operation of the issuers or the guarantors.

Measurement of anticipated credit loss

(a) In order to measure the expected credit losses, the consolidated company's Probability of default ("PD") in the next 12 months and duration of the debt instrument incorporates the Loss given default ("LGD") and multiplies it by the exposure at default ("EAD") to calculate the 12-month and lifetime expected credit losses, respectively, taking into account the impact of the time value of money.

149 -

(b) Compare the default risk of debt instruments on the reporting day and the default risk of debt instruments at the time of initial recognition, and consider the information for justifying the significant increase of default risk after initial recognition to determine if the credit risk of the financial instruments has significantly increased after initial recognition.

i. For “normal credit risk” category, estimate the anticipated amount of loss on the basis of PD in one year.

ii. For “significant increase of credit risk” category, consider the perpetuity of the assets and calculated the PD in respective perpetuity of the assets to evaluate the cash flow from contracts in relevant periods (which is the EAD). Adopt the cash flow method to evaluation the ECL. If it is impossible to assess the cash flow in relevant periods, use the EAD of the current period for the calculation.

iii. For “abnormal credit risk,” the PD is 100% thereby the PD for the perpetuity of respective assets will not be necessary, but just consider the amount that could be recovered and assess the amount of the overall ECL.

iv. The PD of debt instrument has adopted the numerical value released by credit rating institutions at regular intervals, which insinuates the possibility of market fluctuation in the future.

(4) Credit risk hedge or mitigation policy

A. Collateral

Among the policies and procedures taken by the consolidated company addressing to loan operation for the reduction of credit risk, the request for collaterals from the borrowers is most common mean. The consolidated company has established the procedures for the scope of collaterals, the appraisal of the collaterals, the management and disposition of the collaterals for the protection of right of debts.

150 -

Main loan collateral categories of the consolidated company include the following:

a. Real estate
b. Movable property and pledge of rights
c. Assurance by external certification bodies

With a view to enhancing transaction risk protection, contracts for derivative transactions between the company and customers stipulate that customers provide the following guarantees in accordance with the nature of the transaction:

a. Bonds for investment quotas: bonds of different ratios are requested based on the customer credit rating
b. Bonds for high-risk transactions: requested if customer undertakes transactions of products with implicit put options.
c. Performance bonds (trading position losses): bonds requested for trading position losses exceeding mark-to-market upper limits determined by the consolidated company.

The consolidated company paid close attention to the value of the collaterals for the financial instruments, and considered the financial assets necessary for recognition of credit impairment. Information on financial assets with credit impairment and collaterals with slight potential loss is shown below:

	December 31, 2025
	Total Book Value	Provision for impairment	Total exposure (cost after amortization)	Fair value of collaterals
Impaired financial assets:
Discounts and loans	$ 5,901,487	( $ 1,175,540 )	$ 4,725,947	$ 4,763,820
Accounts receivable	594,220	( 205,692 )	388,528	273,679
Guarantee and L/C	44,611	( 30,423 )	14,188	1,041
Total financial assets with impairment	$ 6,540,318	( $ 1,411,655 )	$ 5,128,663	$ 5,038,540
	December 31, 2024
---	---	---	---	---
	Total Book Value	Provision for impairment	Total exposure (cost after amortization)	Fair value of collaterals
Impaired financial assets:
Discounts and loans	$ 6,276,108	( $ 1,272,189 )	$ 5,003,919	$ 5,003,919
Accounts	511,459	( 176,153 )	335,306	235,885

152 -

receivable

Guarantee and L/C	44,677	( 28,807 )	15,870	3,337
Debt instruments	8,947	( 8,947 )	-	-
Total financial assets with impairment	$ 6,841,191	( $ 1,486,096 )	$ 5,355,095	$ 5,243,141

B. Control of credit risk limit and credit risk concentration.

For avoiding the over-concentration of risk, the consolidated company has set the credit limit of transactions with particular counterparty and particular group in its policy and procedure for lending. In the policies and procedures for investment and equity investment risk control, limit has also been set for particular party (enterprise) or particular affiliate (group) enterprises in investment. For the control of the concentration of risk of all assets, the consolidated company has set the credit limit by industry, group enterprise, country, pledge of stocks as collaterals to monitor the concentration of risk of the assets. In addition, monitoring and control of particular counterparty, group enterprise, affiliate, industry, nationality, and the country of final risk through system integration for the control of concentration of relevant risks.

C. The reinforcement of other credit

The set-off clause has been explicitly stated in the loan agreements whereby all deposits of the borrowers at the consolidated company shall be set off for covering the liabilities in the event of credit problem to reduce credit risk.

(5) Maximum exposure of credit risk for the consolidated company

The maximum credit risk exposure of the assets stated in the consolidated balance sheet without the consideration of collaterals or other reinforced credit instruments approximate their book value. The amount of maximum credit risk exposure related to the items off the consolidated balance sheet (without the consideration of collaterals or other reinforced credit instruments and the maximum risk amount is irrevocable) is shown below:

	December 31, 2025	December 31, 2024
Credit commitments	$ 77,079,972	$ 72,140,916
Receivable guarantees	45,241,863	38,123,697
The payment of opened but unused letter of credit	3,537,598	3,839,521

The management of the consolidated company holds that the credit risk exposure of off balance sheet items could be controlled and

minimized in continuation under evaluation because the consolidated company has adopted a strict evaluation process with routine evaluation after approval.

(6) Credit risk concentration of the consolidated company

Where financial instrument transactions are apparently concentrated on one person, or most of the multiple trading counterparts of financial instruments are engaged in similar business activities and possess similar economic characteristics and thereby the effects of economic or other conditions to their ability to perform the contracts are similar, the concentration of credit risk arises accordingly. The characteristics of credit risk concentration include the nature of business activities conducted by debtors. The consolidated company did not concentrate any transactions on one single customer or trading counterpart, other than similar counterparts, industrial type, and regions. The amount of contract based on concentrated credit risk:

Counterpart	December 31, 2025	December 31, 2024
Private enterprises	$ 354,811,945	$ 342,395,187
Natural person	328,745,861	312,642,315
Government Agencies	-	131,140
Others	22,142,652	14,086,488
	$ 705,700,458	$ 669,255,130
Industrial type	December 31, 2025	December 31, 2024
---	---	---
Natural person	$ 328,745,861	$ 312,642,315
Manufacturing	77,223,792	85,167,718
Commercial	53,972,659	53,139,771
Real estate	116,362,577	102,317,433
Construction	36,408,874	32,830,364
Commercial and industrial service	17,681,535	16,997,892
Financial and insurance business	27,457,832	29,708,340
Transportation, warehousing and IT communication	13,359,894	12,139,905
Others	34,487,434	24,311,392
	$ 705,700,458	$ 669,255,130
Region	December 31, 2025	December 31, 2024
---	---	---
Taiwan	$ 654,499,770	$ 618,817,093
Asia region	34,471,430	32,125,644
American region	5,842,024	9,359,579

155 -

Others	10,887,234	8,952,814
	$705,700,458	$669,255,130
Collateral	December 31, 2025	December 31, 2024
No collateral	$132,165,024	$124,170,157
With collateral
Secured by property	500,904,543	477,225,050
Secured by Letter of Guarantee	18,664,374	18,198,328
Secured by Chattel	10,020,549	11,533,709
Secured by bonds	25,403,237	20,962,662
Notes receivable	2,583,350	2,750,454
Secured by stocks	11,313,033	10,021,779
Others	4,646,348	4,392,991
	$705,700,458	$669,255,130

(7) Write-off policy

Any non-performing loans or non-accrual loans shall be written off as bad debt after subtracting the estimated recoverable portion if one of the following conditions exists:

A. The loan cannot be recovered in full or in part because the debtors have dissolved, gone into hiding, reached a settlement, declared bankruptcy, or for other reasons.

B. The collateral and property of the primary/subordinate debtors have been appraised at a very low value or become insufficient to repay the loan after the subtraction of senior mortgages; or the execution cost approaches or possibly exceeds the amount that the Taichung commercial bank might collect from the debtor(s) where there is no financial benefit in execution.

C. The primary/subordinate debtor's collateral has failed to sell at successive auctions where the price of such collateral has been successively lowered, and there is no financial benefit to be derived from the Taichung commercial bank's taking possession of such collateral.

D. More than two (2) years have elapsed since the maturity date of the non-performing loans or non-accrual loans, and the efforts of collection have failed.

E. If the monthly minimum payment for credit cards is delayed by more than six (6) months from the specified payment deadline, all advances made thereto shall be written off within three (3) months thereafter.

(8) Information on credit risk quality

A. Discounts and loans and receivables credit quality analysis

December 31, 2025

	Discounts and loans
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
Products by category
Corporate banking	$ 306,658,030	$ 3,427,400	$ 3,911,206	$ -	$ 313,996,636
Consumer banking	311,573,089	14,420,103	1,990,574	-	327,983,766
Others	( 1,559)	301	( 293)	-	( 1,551)
Total Book Value	618,229,560	17,847,804	5,901,487	-	641,978,851
Provision for impairment	( 2,507,813)	( 864,859)	( 1,175,540)	-	( 4,548,212)
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 615,721,747	$ 16,982,945	$ 4,725,947	$ 3,448,356	$ 633,987,783
	Accounts receivable
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
Products by category
Corporate banking	$ 17,103,588	$ 2,049,102	$ 503,613	$ -	$ 19,656,303
Consumer banking	3,220,516	42,733	63,179	-	3,326,428
Others	79,775,304	-	27,428	-	79,802,732
Total Book Value	100,099,408	2,091,835	594,220	-	102,785,463
Provision for impairment	( 190,357)	( 38,961)	( 205,692)	-	( 435,010)
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 99,909,051	$ 2,052,874	$ 388,528	$ ( 88,730)	$ 102,261,723
			Credit commitments
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/	Total

157 -

				Non-accrual Loans"
Products by category
Corporate banking	$ 31,349,339	$ -	$ -	$ -	$ 31,349,339
Consumer banking	45,619,556	111,077	-	-	45,730,633
Total Book Value	76,968,895	111,077	-	-	77,079,972
Provision for impairment	( 162,160 )	( 1,469 )	-	-	( 163,629 )
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 76,806,735	$ 109,608	$ -	( 8,092 )	( 8,092 )
	Receivable guarantees
---	---	---	---	---	---
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
Products by category
Corporate banking	$ 44,894,592	$ 302,660	$ 44,611	$ -	$ 45,241,863
Total Book Value	44,894,592	302,660	44,611	-	45,241,863
Provision for impairment	( 337,062 )	( 29,322 )	( 30,423 )	-	( 396,807 )
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 44,557,530	$ 273,338	$ 14,188	( 63,056 )	( 63,056 )
	The payment of opened but unused letter of credit
---	---	---	---	---	---
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
Products by category
Corporate banking	$ 3,537,598	$ -	$ -	$ -	$ 3,537,598
Total Book Value	3,537,598	-	-	-	3,537,598
Provision for impairment	( 8,678 )	-	-	-	( 8,678 )
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 3,528,920	$ -	$ -	( 2,392 )	( 2,392 )

DECEMBER 31, 2024

	Discounts and loans
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
	Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Products by category
Corporate banking	$ 291,044,477	$ 4,116,230	$ 3,859,998	$ -	$ 299,020,705
Consumer banking	297,332,152	12,078,855	2,416,086	-	311,827,093
Others	4,006	309	24	-	4,339
Total Book Value	588,380,635	16,195,394	6,276,108	-	610,852,137
Provision for impairment	(2,430,783)	(1,042,766)	(1,272,189)	-	(4,745,738)
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 585,949,852	$ 15,152,628	$ 5,003,919	$ 2,629,102	$ 603,477,297
	Accounts receivable
---	---	---	---	---	---
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
	Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Products by category
Corporate banking	$ 20,394,914	$ 562,068	$ 430,352	$ -	$ 21,387,334
Consumer banking	1,871,804	38,674	52,891	-	1,963,369
Others	69,835,649	15	28,216	-	69,863,880
Total Book Value	92,102,367	600,757	511,459	-	93,214,583
Provision for impairment	(209,038)	(11,239)	(176,153)	-	(396,430)
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"
Total	$ 91,893,329	$ 589,518	$ 335,306	$ (96,047)	$ 92,722,106
	Credit commitments
---	---	---	---	---	---
	Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans"	Total
	Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Products by category
Corporate banking	$ 23,597,188	$ -	$ -	$ -	$ 23,597,188
Consumer banking	48,307,082	236,646	-	-	48,543,728
Total Book Value	71,904,270	236,646	-	-	72,140,916
Provision for impairment	(133,774)	(2,053)	-	-	(135,827)
Required impairment recognized in accordance with the				(5,603)	(5,603)

158 -

159 -

"Regulations
Governing the
Procedures for
Banking Institutions
to Evaluate Assets
and Deal with
Non-performing/
Non-accrual Loans"

Total	$ 71,770,496	$ 234,593	$ -	( $ 5,603 )	$ 71,999,486

Receivable guarantees

Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Products by category Corporate banking	$ 38,004,233	$ 74,787	$ 44,677	$ -
Total Book Value	38,004,233	74,787	44,677	-
Provision for impairment	( 311,902 )	( 4,238 )	( 28,807 )	-
Required impairment recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	( 40,316 )
Total	$ 37,692,331	$ 70,549	$ 15,870	( $ 40,316 )

The payment of opened but unused letter of credit

Stage 1	Stage 2	Stage 3	Impairment difference recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	Total
Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Products by category Corporate banking	$ 3,839,521	$ -	$ -	$ 3,839,521
Total Book Value	3,839,521	-	-	3,839,521
Provision for impairment	( 9,545 )	-	-	( 9,545 )
Required impairment recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	( 3,610 )
Total	$ 3,829,976	$ -	$ -	( $ 3,610 )

B. CREDIT QUALITY ANALYSIS ON INVESTMENT OF DEBT INSTRUMENTS

DECEMBER 31, 2025

Financial assets at fair value through other comprehensive profit or loss

	Stage1	Stage2	Stage3	Total
	Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Product category (Note)
Investment grade bonds	$ 94,124,875	$ -	$ -	$ 94,124,875
Non-investment grade bonds	-	-	-	-
Total Book Value	94,124,875	-	-	94,124,875
Provision for impairment	( 43,578 )	-	-	( 43,578 )
Required impairment recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/	-	-	-	-

Non-accrual Loans"
Total
$ 94,081,297
$ - -
$ - -
$ 94,081,297

Financial assets on the basis of cost after amortization

	Stage1	Stage2	Stage3	Total
	Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Product category (Note)
Investment grade bonds	$ 52,828,083	$ -	$ -	$ 52,828,083
Non-investment grade bonds	-	-	-	-
Other (Central Bank NCD)	51,168,344	-	-	51,168,344
Total Book Value	103,996,427	-	-	103,996,427
Provision for impairment	( 27,986 )	-	-	( 27,986 )
Required impairment recognized in accordance with the "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans"	-	-	-	-
Total	$103,968,441	$ -	$ -	$103,968,441

NOTE BOND RATING IS BASED ON MOODY'S, FITCH, S&P AND TAIWAN RATINGS, IN ORDER TO OBTAIN THE CURRENT CREDIT RATINGS.

The consolidated company's debt instruments are financial assets at fair value through other comprehensive income and financial assets measured at amortized cost:

	Measured at fair values through other comprehensive income	Measured on the basis of cost after amortization
Total Book Value	$ 95,600,788	$ 103,996,427
Loss allowance	( 43,578)	( 27,986)
Cost after amortization	95,557,210	103,968,441
Fair value adjustment	( 1,475,913)	-
	$ 94,081,297	$ 103,968,441

The current credit risk evaluation approach of the Consolidated Company and the total carrying amount of debt instrument investments with various credit ratings are shown as below:

Credit rating	Definition	Basis for recognizing expected credit losses	Expected credit loss rate	Total book value of December 31, 2025
				Measured at fair values through other comprehensive income	Measured on the basis of cost after amortization
Normal (Stage 1)	The debtors' credit risk is low and also has sufficient capability to pay off contractual cash flows.	Anticipated credit loss in 12 months	0.00%~0.34%	$ 95,600,788	$ 103,996,427
Abnormality (Stage 2)	Significant increase of credit risk after initial recognition	Lifetime expected credit loss (no credit impairment)	-	-	-
Default (Stage 3)	Evidence of credit impairment	Lifetime expected credit loss (with credit impairment)	-	-	-
Write-off	There is evidence that the debtor is facing serious financial difficulties and the consolidated company cannot reasonably expect recovery.	Direct write-off	-	-	-

161 -

With respect to the consolidated company's debt instrument investments at fair value through other comprehensive income and measured at amortized cost, the information regarding the changes in loss allowance based on credit risk ratings are summarized as follows:

	Credit rating
	Normal (12-month expected credit loss)	Abnormality (Lifetime expected credit loss no credit impairment)	Default (Lifetime expected credit loss credit impairment)
Financial assets at fair value through other comprehensive profit or loss
Balance on January 1, 2025	$ 45,187	$ -	$ -
Changes to credit ratings of debt instruments recognized at the beginning of the year
- Normal turns into Abnormal	-	-	-
- Abnormal turns into Default	-	-	-
- Default turns into Write-off	-	-	-

(Continued)

	Credit rating
	Normal (12-month expected credit loss)	Abnormality (Lifetime expected credit loss no credit impairment)	Default (Lifetime expected credit loss credit impairment)
Purchase new debt instruments	$ 7,821	$ -	$ -
Derecognition	( 8,206 )	-	-
Changes in model/risk parameters	-	-	-
Foreign exchange settlement and other changes	( 1,224 )	-	-
Loss allowance as of December 31, 2025	$ 43,578	$ -	$ -
Financial assets on the basis of cost after amortization
Balance on January 1, 2025	$ 29,031	$ -	$ 8,947
Changes to credit ratings of debt instruments recognized at the beginning of the year
- Normal turns into Abnormal	-	-	-
- Abnormal turns into Default	-	-	-
- Default turns into Write-off	-	-	-
Purchase new debt instruments	2,868	-	-
Derecognition	( 3,904 )	-	( 7,960 )
Changes in model/risk parameters	-	-	-
Foreign exchange settlement and other changes	( 9 )	-	( 987 )
Loss allowance as of December 31, 2025	$ 27,986	$ -	$ -

DECEMBER 31, 2024

	Financial assets at fair value through other comprehensive profit or loss
	Stage 1 Anticipated credit loss in 12 months	Stage 2 Credit loss within the perpetuity of financial assets	Stage 3 Credit loss within the perpetuity of financial assets	Total
Product category (Note)
Investment grade bonds	$ 94,102,200	$ -	$ -	$ 94,102,200
Non-investment grade bonds	-	-	-	-
Total Book Value	94,102,200	-	-	94,102,200
Provision for impairment	( 45,187 )	-	-	( 45,187 )
Required impairment recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-

164 -

Total
$ 94,057,013
$ _ - $ _ - $ 94,057,013

Financial assets on the basis of cost after amortization

	Stage 1	Stage 2	Stage 3	Total
	Anticipated credit loss in 12 months	Credit loss within the perpetuity of financial assets	Credit loss within the perpetuity of financial assets
Product category (Note)
Investment grade bonds	$ 59,863,762	$ -	$ -	$ 59,863,762
Non-investment grade bonds	-	-	8,947	8,947
Other (Central Bank NCD)	48,555,321	-	-	48,555,321
Total Book Value	108,419,083	-	8,947	108,428,030
Provision for impairment	( 29,031 )	-	( 8,947 )	( 37,978 )
Required impairment recognized in accordance with the “Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/ Non-accrual Loans”	-	-	-	-
Total	$108,390,052	$ -	$ -	$108,390,052

Note bond rating is based on Moody's, fitch, S&P and Taiwan ratings, in order to obtain the current credit ratings.

The consolidated company's debt instruments are financial assets at fair value through other comprehensive income and financial assets measured at amortized cost:

	Measured at fair values through other comprehensive income	Measured on the basis of cost after amortization
Total Book Value	$ 96,137,841	$ 108,428,030
Loss allowance	( 45,187 )	( 37,978 )
Cost after amortization	96,092,654	108,390,052
Fair value adjustment	( 2,035,641 )	-
	$ 94,057,013	$ 108,390,052

The current credit risk evaluation approach of the Consolidated Company and the total carrying amount of debt instrument investments with various credit ratings are shown as below:

Credit rating	Definition	Basis for recognizing expected credit losses	Expected credit loss rate	Total book value of December 31, 2024
				Measured at fair values through other comprehensive income	Measured on the basis of cost after amortization
Normal (Stage 1)	The debtors' credit risk is low and also has sufficient capability to pay off contractual cash flows.	Anticipated credit loss in 12 months	0.00%~0.51%	$ 96,137,841	$ 108,419,083
Abnormality (Stage 2)	Significant increase of credit risk after initial recognition	Lifetime expected credit loss (no credit impairment)	-	-	-
Default (Stage 3)	Evidence of credit impairment	Lifetime expected credit loss (with credit impairment)	100%	-	8,947
Write-off	There is evidence that the debtor is facing serious financial difficulties and the consolidated company cannot reasonably expect recovery.	Direct write-off	-	-	-

	Credit rating
	Normal (12-month expected credit loss)	Abnormality (Lifetime expected credit loss no credit impairment)	Default (Lifetime expected credit loss credit impairment)
Financial assets at fair value through other comprehensive profit or loss
Balance on January 1, 2024	$ 33,941	$ -	$ -
Changes to credit ratings of debt instruments recognized at the beginning of the year
- Normal turns into Abnormal	-	-	-
- Abnormal turns into Default	-	-	-
- Default turns into Write-off	-	-	-

(Continued)

	Credit rating
	Normal (12-month expected credit loss)	Abnormality (Lifetime expected credit loss no credit impairment)	Default (Lifetime expected credit loss credit impairment)
Purchase new debt instruments	$ 15,751	$ -	$ -
Derecognition	( 4,142 )	-	-
Changes in model/risk parameters	-	-	-
Foreign exchange settlement and other changes	( 363 )	-	-
Loss allowance as of December 31, 2024	$ 45,187	$ -	$ -
Financial assets on the basis of cost after amortization
Balance on January 1, 2024	$ 31,548	$ -	$ 8,378
Changes to credit ratings of debt instruments recognized at the beginning of the year
-Normal turns into Abnormal	-	-	-
-Abnormal turns into Default	-	-	-
-Default turns into Write-off	-	-	-
Purchase new debt instruments	1,419	-	-
Derecognition	( 2,887 )	-	-
Changes in model/risk parameters	-	-	-
Foreign exchange settlement and other changes	( 1,049 )	-	569
Loss allowance as of December 31, 2024	$ 29,031	$ -	$ 8,947

3. Liquidity risk

(1) Sources and definitions of liquidity risk

The consolidated company's current liability exceeds its current assets of NT$123,749,729 thousand. The consolidated company currently has unused borrowing limit sufficient to meet all contractual obligations, so there is no liquidity risk with being unable to raise funds to perform contractual obligations.

Liquidity risks of the merged company mainly stem from Taichung Bank. The term “liquidity risks” refers to potential losses generated by the inability of Taichung Bank to acquire capital to fund increases in assets or repay liabilities as they come due (e.g., withdrawals by depositors, credit drawdowns, other interest or expenses, or cash outflows associated with off-balance sheet transactions); measures to replenish capital and increase liquidity include sufficient cash-on-hand, immediately realizable securities, spread deployment, absorbed deposits, or financing loan channels.

(2) Taichung Bank liquidity risk management policies may be described as follows:

Taichung Bank develops capital movement strategies by adopting a conservative approach. It effectively spreads funding sources and deadlines, participates in the capital call market, maintains close contact with fund providers, and keeps fund-raising channels open to ensure a stable and reliable source of capital.

Taichung Bank has formulated relevant norms and regulations governing operating procedures for risk identification, measurement, monitoring, and reporting. The bank has established a limit monitoring mechanism and has set management indicators for liquidity ratios and cash flow gaps. It maintains a firm grasp of potential warning signals and conducts regular stress tests. Analysis of crisis scenarios with assumed impacts on capital flows serves as a reference for the assessment of liquidity buffer levels. Response measures are adopted in a timely manner.

The Asset and Liability Management Committee (hereinafter referred to as “This Committee”) is the dedicated management unit of Taichung Bank for liquidity risks. The Committee must adopt monitoring procedures as required based on liquidity risk management policies to ensure adequate liquidity and sufficient capital under normal conditions and specific stress scenarios and thereby guarantee fulfillment of the bank’s payment obligations. The Committee must report regularly to the board of directors to ensure effective management of liquidity risks.

167 -

168 -

Non-derivative financial liabilities maturity analysis

The analysis on the cash outflow of the consolidated company's non-derivative liabilities is based on the remaining period from the balance sheet date to the contract maturity date as follows. The amount in the statements is based on the contractual cash flow; therefore, the amount of some items disclosed is not consistent with the respective items on the consolidated balance sheet.

December 31, 2025	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
Due to Central Bank and other banks	$ 8,887,053	$ 3,457,190	$ 730	$ 2,511,970	$ -	$ 14,856,943
Bills and bonds sold under repurchase agreements	2,595,408	7,646,537	-	-	-	10,241,945
Shot-term borrowings	5,132,552	7,929,927	4,829,662	2,699,289	2,426,713	23,018,143
Short-term notes payable	5,280,000	1,790,000	120,000	-	-	7,190,000
Long-term borrowings	28,180	42,680	123,420	218,521	8,238,801	8,651,602
Payables	19,018,227	2,640,745	416,379	527,690	476,301	23,079,342
Customer deposits and remittances	99,865,561	123,233,659	94,843,324	171,573,992	352,956,708	842,473,244
Financial bonds payable	-	-	-	39,177	15,150,000	15,189,177
Lease liabilities	19,133	37,419	55,200	104,268	873,048	1,089,068
Other matured capital outflow items	387,801	7,380	43,907	103,401	6,730,973	7,273,462

169 -

December 31, 2024	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
Due to Central Bank and other banks	$ 18,163,190	$ 1,475,325	$ 730	$ 11,970	$ -	$ 19,651,215
Bills and bonds sold under repurchase agreements	4,447,220	8,524,321	-	-	-	12,971,541
Shot-term borrowings	4,035,415	7,571,625	4,840,322	2,543,902	4,683,629	23,674,893
Short-term notes payable	3,780,000	2,310,000	325,000	-	-	6,415,000
Long-term borrowings	14,870	46,072	213,386	373,378	8,060,580	8,708,286
Payables	18,904,468	1,367,526	418,256	422,347	374,173	21,486,770
Customer deposits and remittances	71,400,430	122,752,668	84,801,914	179,346,471	347,978,797	806,280,280
Financial bonds payable	-	-	-	78,328	13,500,000	13,578,328
Lease liabilities	19,366	38,628	58,029	114,262	1,080,488	1,310,773
Other matured capital outflow items	249,129	223,263	59,277	96,312	4,690,572	5,318,553

Derivative financial liabilities maturity analysis

(1) Derivative instruments cleared and settled at net value

The consolidated company's derivatives that are settled and cleared at net value include:

FX derivatives: FX forwards and options

It is concluded that the contractual maturity is the essential element to understand all derivative financial instruments listed on the consolidated balance sheet. The amount in the statements is based on the contractual cash flow; therefore, the amount of some items disclosed is not consistent with the respective items on the consolidated balance sheet. Financial liabilities cleared and settled at net amount maturity analysis:

December 31, 2025	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
Derivative financial liabilities at fair value through profit and loss Foreign exchange derivatives	$ 66,902	$ 164,325	$ 184,951	$ 142,505	$ -	$ 558,683
December 31, 2024	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
---	---	---	---	---	---	---
Derivative financial liabilities at fair value through profit and loss Foreign exchange derivatives	$ 76,158	$ 178,460	$ 119,898	$ 64,455	$ -	$ 438,971

(2) Derivatives cleared and settled at total value

The consolidated company's derivative financial instruments settled on a gross basis include:

Foreign exchange derivatives: forward foreign exchange and foreign exchange swaps.

Illustrate the consolidated company's derivatives that are settled at total value in accordance with the remaining period from the consolidated balance sheet date to the contract maturity date. It is concluded that the contractual maturity is the essential element to

understand all derivative financial instruments listed on the consolidated balance sheet. The amount in the statements is based on the contractual cash flow; therefore, the amount of some items disclosed is not consistent with the respective items on the consolidated balance sheet. Financial liabilities cleared and settled at total value maturity analysis:

170 -

December 31, 2025	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
Derivative financial liabilities at fair value through profit and loss Foreign exchange derivatives - Cash outflow - Cash inflow	$ 108,405,344 107,493,112	$ 17,384,949 17,236,443	$ 6,029,314 5,925,232	$ 15,027,915 14,838,188	$ -	$ 146,847,522 145,492,975
Subtotal of cash outflows	108,405,344	17,384,949	6,029,314	15,027,915	-	146,847,522
Subtotal of cash inflows	107,493,112	17,236,443	5,925,232	14,838,188	-	145,492,975
Net cash flow	( $ 912,232 )	( $ 148,506 )	( $ 104,082 )	( $ 189,727 )	$ -	( $ 1,154,547 )
December 31, 2024	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
---	---	---	---	---	---	---
Derivative financial liabilities at fair value through profit and loss Foreign exchange derivatives - Cash outflow - Cash inflow	$ 75,968,576 75,386,246	$ 15,560,576 15,393,443	$ 11,737,237 11,644,901	$ 20,701,989 20,048,600	$ -	$ 123,968,378 122,473,190
Subtotal of cash outflows	75,968,576	15,560,576	11,737,237	20,701,989	-	123,968,378
Subtotal of cash inflows	75,386,246	15,393,443	11,644,901	20,048,600	-	122,473,190
Net cash flow	( $ 582,330 )	( $ 167,133 )	( $ 92,336 )	( $ 653,389 )	$ -	( $ 1,495,188 )

4. The maturity analysis of items not on the statement

The analysis on the maturity date of the items not on the consolidated company's balance sheet in accordance with the remaining period from the consolidated balance sheet date to the contract maturity date. For financial guarantee contracts issued, the earliest time period that maximum amounts of the guarantee may be requested for guarantee performance. The amount in the statements is based on the contractual cash flows; therefore, the amount of some items disclosed is not consistent with the respective items on the consolidated balance sheet.

December 31, 2025	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
Undisbursed credit committee	$ 17,334,269	$ 23,736,221	$ 35,930,372	$ 70,982,076	$ 69,509,332	$ 217,492,270
The payment of opened but unused letter of credit	609,999	2,641,337	285,430	832	-	3,537,598
Receivable guarantees	4,276,272	5,650,508	2,821,798	5,259,527	27,233,758	45,241,863
Lease contract commitments	2,870,368	-	-	-	-	2,870,368
Total	$ 25,090,908	$ 32,028,066	$ 39,037,600	$ 76,242,435	$ 96,743,090	$ 269,142,099
December 31, 2024	0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year	Total
---	---	---	---	---	---	---
Undisbursed credit committee	$ 8,639,171	$ 17,662,810	$ 38,438,298	$ 74,714,766	$ 80,298,439	$ 219,753,484
The payment of opened but unused letter of credit	1,203,496	2,564,734	71,291	-	-	3,839,521
Receivable guarantees	5,192,049	4,287,617	2,496,166	4,181,881	21,965,984	38,123,697
Lease contract commitments	6,822,180	313,460	500,425	535,730	-	8,171,795
Total	$ 21,856,896	$ 24,828,621	$ 41,506,180	$ 79,432,377	$ 102,264,423	$ 269,888,497

5. Cash flow risk estimated under interest rate changes

The future cash flow of assets and liabilities estimated based on mobile interest rate held and borne by the Consolidated Company might fluctuate and even generate risk due to the market interest rate changes. However, upon evaluation, the Consolidated Company, in practice, tends to control the net

liquidity gap to reduce the cash flow risk resulting from the interest rate changes.

Sustainability and climate risks

(1) The Board of Directors is the highest sustainability and climate risk governance and decision-making body of Taichung Commercial Bank and has established a Sustainable Development Committee and a Risk Management Committee to oversee matters relating to sustainable development, climate risk management, and financial disclosures, and to regularly supervise the promotion and implementation thereof.

(2) In response to the low-carbon economy, Taichung Commercial Bank introduced the climate-related financial disclosure framework in 2022. In accordance with the “Guidelines for Climate Risk Financial Disclosures by Domestic Banks” and the Financial Stability Board’s recommendations on “Task Force on Climate-related Financial Disclosures (TCFD),” and with reference to the “Practical Handbook on Climate-related Risk Management for Domestic Banks” issued by the Bankers Association of the Republic of China, the Bank prepared a climate-related financial disclosure report (TCFD) based on the four core elements of governance, strategy, risk management, and metrics and targets, and disclosed it on the Bank’s external website. Through a sound governance framework and continuous enhancement of information disclosure, the Bank will continue to strengthen climate risk management resilience, enhance sustainable operational capabilities, and jointly move toward a low-carbon and sustainable future.

XLII. Information on transfer of financial assets

Transferred financial assets not being removed in all

In the routine transaction of the consolidated company, financial assets did not qualified under all the conditions have been transferred. Most are debt securities with R/P agreement or equity securities lent under the securities lending agreement. The cash flows from the contract of the aforementioned transactions received by the consolidated company have been transferred to a third party and reflected related liabilities of the consolidated company in the responsibility of repurchasing the financial assets already transferred at fixed price in the future. For this type of transactions, the consolidated company cannot use, sell or pledge the financial assets already transferred within the effective period of the trade,

172 -

but the consolidated company shall still assume interest risk and credit risk and is not being removed in whole. The table below shows the financial assets not qualified under all conditions and related financial liabilities:

December 31, 2025
Category of financial assets	Book value of transferred financial assets	Book value of related financial liabilities	Fair value of transferred financial assets	Fair value of related financial liabilities	Net fair value position
Financial assets at fair value through other comprehensive profit or loss
R/P agreement	$ 9,258,293	$ 8,832,999	$ 8,808,842	$ 8,832,999	($ 24,157)
Financial assets on the basis of cost after amortization
R/P agreement	1,385,797	1,335,694	1,372,312	1,335,694	36,618
December 31, 2024
---	---	---	---	---	---
Category of financial assets	Book value of transferred financial assets	Book value of related financial liabilities	Fair value of transferred financial assets	Fair value of related financial liabilities	Net fair value position
Financial assets at fair value through other comprehensive profit or loss
R/P agreement	$ 9,945,752	$ 9,288,770	$ 9,465,809	$ 9,288,770	$ 177,039
Financial assets on the basis of cost after amortization
R/P agreement	3,824,050	3,555,453	3,719,339	3,555,453	163,886

XLIII. Offsetting of financial assets and liabilities

The consolidated company does not have transactions of offsetting financial instruments specified by IAS 32.42 as recognized by the FSC. The financial assets and liabilities related to such type of transactions are expressed in net on the balance sheet. The consolidated company has transactions that are or are similar to net settled master netting arrangements but do not meet the offsetting criteria. The above transactions are settled on a net basis after offsetting financial assets with financial liabilities if both parties of the transaction choose to use net settlement; the above transactions are settled on a gross basis if both parties do not choose to use net settlement. However, if one party breaches the contract, the counterparty can choose to use net settlement.

December 31, 2025

Financial Assets	Gross amounts of recognized financial assets	Gross amounts of recognized financial liabilities offset in the balance sheet	Net amounts of financial assets presented in the balance sheet	Related amounts not offset in the balance sheet		Net
				Financial instruments	Cash collateral pledged
Reverse repurchase and securities borrowing agreement	$ 16,180,210	$ -	$16,180,210	$16,180,210	$ -	$ -

174 -

December 31, 2024

Financial Liabilities	Gross amounts of recognized financial liabilities	Gross amounts of recognized financial assets offset in the balance sheet	Net amounts of financial liabilities presented in the balance sheet	Related amounts not offset in the balance sheet		Net
				Financial instruments	Cash collateral pledged
Repurchase and securities lending agreement	$ 10,168,693	$ -	$10,168,693	$10,168,693	$ -	$ -
Financial Assets	Gross amounts of recognized financial assets	Gross amounts of recognized financial liabilities offset in the balance sheet	Net amounts of financial assets presented in the balance sheet	Related amounts not offset in the balance sheet		Net
				Financial instruments	Cash collateral pledged
Reverse repurchase and securities borrowing agreement	$ 8,241,776	$ -	$ 8,241,776	$ 8,241,776	$ -	$ -
Financial Liabilities	Gross amounts of recognized financial liabilities	Gross amounts of recognized financial assets offset in the balance sheet	Net amounts of financial liabilities presented in the balance sheet	Related amounts not offset in the balance sheet		Net
				Financial instruments	Cash collateral pledged
Repurchase and securities lending agreement	$ 12,844,223	$ -	$12,844,223	$12,844,223	$ -	$ -

XLIV. Information to be disclosed pursuant to Article 16 of the “Regulations Governing the Preparation of Financial Reports by Public Banks”

(I) Asset quality

| Item
Type of business | December 31, 2025 | | | | | December 31, 2024 | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | | Non-performing loans (Note 1) | Total loans | Non-performing loan ratio (Note 2) | Allowance for bad debt | Allowance for bad debt coverage ratio (Note 3) | Non-performing loans (Note 1) | Total loans | Non-performing loan ratio (Note 2) | Allowance for bad debt | Allowance for bad debt coverage ratio (Note 3) |
| Enterprises Finance | Collateral | 512,623 | 177,808,404 | 0.29% | 2,172,099 | 423.72% | 102,659 | 170,661,662 | 0.06% | 2,095,393 | 2,041.12% |
| | No collateral | 579,200 | 136,137,273 | 0.43% | 1,942,991 | 335.46% | 58,834 | 128,325,692 | 0.05% | 1,566,165 | 2,662.01% |
| Consume Finance | Residential mortgage loans (Note 4) | 202,004 | 95,072,632 | 0.21% | 1,430,565 | 708.19% | 65,698 | 90,679,729 | 0.07% | 1,361,387 | 2,072.19% |
| | Debit cards | - | - | - | - | - | - | - | - | - | - |
| | Small credit loans (Note 5) | 2,575 | 622,352 | 0.41% | 12,896 | 500.82% | 317 | 589,523 | 0.05% | 7,189 | 2,267.82% |
| | Others (Note 6) | Collateral | 187,993 | 188,577,763 | 0.10% | 1,996,551 | 1,062,035 | 100,225 | 180,225,195 | 0.06% | 1,903,672 |
| | | No collateral | 64,042 | 41,417,957 | 0.15% | 440,879 | 688.42% | 31,627 | 38,565,898 | 0.08% | 440,447 |
| Total loans | | 1,548,437 | 639,636,381 | 0.24% | 7,995,981 | 516.39% | 359,360 | 609,047,699 | 0.06% | 7,374,253 | 2,052.05% |
| Item
Type of business | December 31, 2025 | | | | | December 31, 2024 | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| | Non-performing loans | Balance of receivable accounts | Non-performing loan ratio | Allowance for bad debt | Allowance for bad debt coverage ratio | Non-performing loans | Balance of receivable accounts | Non-performing loan ratio | Allowance for bad debt | Allowance for bad debt coverage ratio |
| Credit card business | 1,846 | 764,438 | 0.24% | 20,334 | 1,101.52% | 1,952 | 810,634 | 0.24% | 20,648 | 1,057.79% |
| Non-recourse factoring (Note 7) | 31,429 | 196,405 | 16.00% | 34,012 | 108.22% | - | 215,200 | - | 8,085 | - |

Exemption from reporting Non-performing loan or overdue accounts receivable

	December 31, 2025		December 31, 2024
	Total non-performing loan exempted from report	Total balance of overdue accounts receivable exempted from report	Total non-performing loan exempted from report	Total balance of overdue accounts receivable exempted from report
Amount exempted from report upon debt negotiation and performance (Note 8)	119	135	293	198
Performance of debt clearance program and rehabilitation program (Note 9)	7,667	12,354	6,494	11,881
Total	7,786	12,489	6,787	12,079

Note 1: The non-performing loan amount is recognized according to "Regulations Governing the Procedures for Banking Institutions to Evaluate Assets and Deal with Non-performing/Non-accrual Loans." The credit card non-performing loan is recognized based on that provided under the Letter Jin-Guan-Yin (4) Zi No. 0944000378 dated July 6, 2005.

Note 2: Non-performing loan ratio = Non-performing loan/total loan amount. Non-performing credit card ratio = Non-performing amount/accounts receivable balance

Note 3: Non-performing loan coverage ratio = Allowance for bad debt appropriated for loans/non-performing loan. Overdue credit card accounts receivables coverage ratio = Allowance for bad debt appropriated for credit card accounts receivable/non-performing loan.

Note 4: Borrowers apply for residential mortgage loans for the purpose of purchasing or building residences or decorating houses. The loans shall be secured by the residence purchased (owned) by the borrower himself/herself, or his/her spouse or minor children in full, and the mortgage shall be pledged to the financial institution.

Note 5: Small credit loans mean those provided in the Letter under Jin-Guan-Yin (4) Zi No. 09440010950 dated December 19, 2005 and those other than small loans by credit cards/cash cards.

Note 6: The "Other" consumer finance refers to the secured or unsecured consumer finance loans other than the "residential mortgage loans", "cash cards", and "small credit loans", excluding credit cards.

Note 7: According to the Letter under Jin-Guan-Yin (5) Zi No. 0945000494 dated July 19, 2005, factoring without recourse shall be recognized as non-performing loans within three months after the factoring Consignee or insurance company confirms that no compensation should be granted.

Note 8: Total NPL exempted from report upon debt negotiation and performance and the balance of total non-performing receivable accounts exempted from report upon debt negotiation and performance were disclosed pursuant to the Letter under Jin-Guan-Yin (1) Zi No. 09510001270 dated April 25, 2006.

Note 9: The balance of total non-performing loans exempted from report upon performance of debt clearance program and rehabilitation program and balance of total non-performing receivable accounts exempted from report upon performance of debt clearance program and rehabilitation program were disclosed pursuant to the Letter under Jin-Guan-Yin (1)

176 -

Zi No. 09700318940 dated September 15, 2008 and the Letter Jin-Guan-Yin-Fa0Zi No. 10500134790 dated September 20, 2016.

177 -

(II) Status of credit risk concentration

December 31, 2025

Unit: NTD thousand

Rank (Note 1)	Business type of company or group (Note 2)	Total amount of outstanding loans (Note 3)
1	Group A
016700 Real estate development	$ 5,081,170	5.54%
2	Group B
016700 Real estate development	4,867,306	5.30%
3	Group C
016700 Real estate development	3,225,547	3.52%
4	Group D
016700 Real estate development	2,606,866	2.84%
5	Group E
016499 Other financial services unclassified	2,444,575	2.66%
6	Group F
016811 Real estate lease and sale	2,337,104	2.55%
7	Group G
016499 Other financial services	2,266,200	2.47%
8	Group F
016499 Other financial services	2,014,282	2.20%
9	Group I
014290 Other civil engineering	1,993,421	2.17%
10	Group J
016510 Personal Insurance	1,967,097	2.14%

December 31, 2024

Unit: NTD thousand

Rank (Note 1)	Business type of company or group (Note 2)	Total amount of outstanding loans (Note 3)
1	Group C
016700 Real estate development	$ 4,686,360	5.71%
2	Group B
016700 Real estate development	4,613,129	5.62%
3	Group A
016700 Real estate development	4,479,747	5.46%
4	Group K
014100 Construction and engineering	2,555,875	3.11%

(Continued)

Rank (Note 1)	Business type of company or group (Note 2)	Total amount of outstanding loans (Note 3)	Percentage of net value as of December 31, 2024
5	Group J 016510 Personal Insurance	2,486,088	3.03%
6	Group L 012411 Iron and steel smelting	2,451,990	2.99%
7	Group D 016700 Real estate development	2,255,434	2.75%
8	Group M 015010 Vessel Carriers	2,044,693	2.49%
9	Group N 010892 Noodle products manufacturing	1,673,687	2.04%
10	Group O 016700 Real estate development	1,620,771	1.97%

Note 1: The top ten enterprises other than public or state enterprises were identified according to rank of the total balance of loans to these enterprises. If the account refers to a group, the loan to the group should be identified and summed up, and disclosed in the form of "code" and "business type." In the case of group, the business type of the group with the maximum exposure should be disclosed. The business type shall be specified in "detailed item" according to the business classification defined by Directorate General of Budget, Accounting and Statistics (e.g. Company (Group) A, real estate development).

Note 2: The group enterprise mean those defined in Article 6 of "Supplementary Rules of TSEC's Criteria for Reviewing Listing of Marketable Securities".

Note 3: The balance of total credit extension means the total balance of the various loans (including import negotiation, export negotiation, discount, overdraft, short-term loans, short-term secured loans, receivable securities financing, mid-term loans, mid-term secured loans, long-term loans, long-term secured loans, Delinquent loans), inward remittances, factoring without recourse, Acceptances receivable and guarantee payments.

(III) Interest rate sensitivity information

Interest rate sensitivity assets and liabilities analysis data (NTD)

December 31, 2025

Unit: NTD thousand, %

Item	1 to 90 days (inclusive)	91 to 180 days (inclusive)	181 days to 1 year (inclusive)	More than 1 year	Total
Interest rate sensitive assets	634,983,739	12,236,211	20,206,688	137,518,358	804,944,996
Interest rate sensitive liabilities	220,121,891	419,674,559	105,763,804	11,050,852	756,611,106
Interest rate sensitivity gap	414,861,848	(407,438,348)	(85,557,116)	126,467,506	48,333,890
Net worth					91,749,451
Ratio of interest rate sensitive assets to liabilities					106.39%
Ratio of interest rate sensitivity gap to net worth					52.68%

December 31, 2024

Unit: NTD thousand, %

Item	1 to 90 days (inclusive)	91 to 180 days (inclusive)	181 days to 1 year (inclusive)	More than 1 year	Total
Interest rate sensitive assets	592,858,391	10,564,482	10,970,967	143,208,053	757,601,893
Interest rate sensitive liabilities	198,140,479	399,248,938	110,160,593	10,372,757	717,922,767
Interest rate sensitivity gap	394,717,912	(388,684,456)	(99,189,626)	132,835,296	39,679,126
Net worth					82,091,384
Ratio of interest rate sensitive assets to liabilities					105.53%
Ratio of interest rate sensitivity gap to net worth					48.34%

Note

I. The table specifies the amount in NTD (exclusive of foreign currencies) of Taichung Bank Head Office and local branches, and does not include contingent assets or contingent liabilities.

II. Interest rate sensitivity assets and liabilities mean the assets and liabilities with interest of which the income or cost varies depending on the interest rate.

III. Interest rate sensitivity gap=Interest rate sensitivity assets - Interest rate sensitivity liabilities.

IV. Ratio of interest-rate-sensitive assets to liabilities = Interest-rate-sensitive assets ÷ Interest-rate-sensitive liabilities (denominated in NT$).

Interest rate sensitivity assets and liabilities analysis data (USD)

December 31, 2025

Unit: US$ thousand; %

Item	1 to 90 days (inclusive)	91 to 180 days (inclusive)	181 days to 1 year (inclusive)	More than 1 year	Total
Interest rate sensitive assets	1,625,917	213,318	23,385	841,238	2,703,858
Interest rate sensitive liabilities	2,248,969	951,986	241,324	-	3,442,279
Interest rate sensitivity gap	( 623,052)	( 738,668)	( 217,939)	841,238	( 738,421)
Net worth					2,919,261
Ratio of interest rate sensitive assets to liabilities					78.55%
Ratio of interest rate sensitivity gap to net worth					( 25.29%)

December 31, 2024

Unit: US$ thousand; %

Item	1 to 90 days (inclusive)	91 to 180 days (inclusive)	181 days to 1 year (inclusive)	More than 1 year	Total
Interest rate sensitive assets	1,528,746	274,685	63,141	885,592	2,752,164
Interest rate sensitive liabilities	2,512,073	836,777	230,340	-	3,579,190
Interest rate sensitivity gap	( 983,327)	( 562,092)	( 167,199)	885,592	( 827,026)
Net worth					2,503,931
Ratio of interest rate sensitive assets to liabilities					76.89%
Ratio of interest rate sensitivity gap to net worth					( 33.03%)

Note

I. This table reports the total amount, in US$, held by the headquarters and domestic branches of Taichung Commercial Bank, its international financial business branches and overseas branches, excluding contingent assets and contingent liabilities.

II. Interest rate sensitivity assets and liabilities mean the assets and liabilities with interest of which the income or cost varies depending on the interest rate.

III. Interest rate sensitivity gap=Interest rate sensitivity assets - Interest rate sensitivity liabilities.

IV. Ratio of interest-rate-sensitive assets to liabilities = Interest-rate-sensitive assets ÷ Interest-rate-sensitive liabilities (denominated in US$)

181 -

(IV) Profitability

Unit: %

Item		December 31, 2025	December 31, 2024
Return on assets	Before Income Tax	1.09	1.07
	After Income Tax	0.93	0.91
ROE	Before Income Tax	12.24	12.21
	After Income Tax	10.42	10.46
Net profit rate		46.65	46.31

Note

I. ROA = Income before (after) taxation/Average total assets
II. ROE=Income before (after) taxation / Average net worth
III. Profit (loss) rate = Income after taxation/income-net
IV. Income before (after) taxation means the income accumulated from January of the current year until the current quarter

(V) Analysis on maturity of assets and liabilities

Analysis of maturity structure of NTD

December 31, 2025

Unit: NTD thousand

	Total	Remaining balance to maturity
		0 to 10 days	11 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year
Main capital inflow upon maturity	880,264,972	101,715,263	58,176,540	48,087,744	72,895,001	148,049,621	451,340,803
Main capital outflow upon maturity	1,056,550,892	40,518,713	60,982,134	120,195,076	136,642,831	242,282,181	455,929,957
Gap	(176,285,920)	61,196,550	(2,805,594)	(72,107,332)	(63,747,830)	(94,232,560)	(4,589,154)

December 31, 2024

Unit: NTD thousand

	Total	Remaining balance to maturity
		0 to 10 days	11 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year
Main capital inflow upon maturity	836,814,113	95,846,949	46,583,417	48,336,744	68,517,369	139,615,898	437,913,736
Main capital outflow upon maturity	1,014,506,861	45,502,889	38,677,959	116,585,316	127,660,965	245,904,146	440,175,586
Gap	(177,692,748)	50,344,060	7,905,458	(68,248,572)	(59,143,596)	(106,288,248)	(2,261,850)

Note: The table only specifies the amount in NTD (exclusive of foreign currencies) of Taichung Bank Head Office and local branches.

Analysis of maturity structure of USD

December 31, 2025

Unit: US$ thousand

	Total	Remaining balance to maturity
		0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year
Main capital inflow upon maturity	6,243,408	2,463,184	577,101	337,126	521,873	2,344,124
Main capital outflow upon maturity	6,998,041	2,934,121	1,613,933	575,982	1,205,862	668,143
Gap	( 754,633)	( 470,937)	( 1,036,832)	( 238,856)	( 683,989)	1,675,981

December 31, 2024

Unit: US$ thousand

	Total	Remaining balance to maturity
		0 to 30 days	31 to 90 days	91 to 180 days	181 days to 1 year	More than 1 year
Main capital inflow upon maturity	6,510,000	2,462,551	706,831	633,907	496,355	2,210,356
Main capital outflow upon maturity	7,297,827	2,912,748	2,011,104	677,313	1,192,357	504,305
Gap	( 787,827)	( 450,197)	( 1,304,273)	( 43,406)	( 696,002)	1,706,051

Note

I. The table specifies the total amount in USD of Taichung Bank Head Office, local branches and International Banking Branch. Unless otherwise provided, it shall be stated at the Book Value, and it is not necessary to include any accounts that are not stated in the table (e.g. negotiable certificates of deposit, bonds or stocks scheduled to be issued).

II. Where offshore assets account for more than 10% of the Bank's total assets, it is necessary to provide supplementary disclosure.

XLV. Capital risk management

The consolidated company manages capital to ensure the Group's enterprises to maximize shareholder's returns by optimizing the balance of debt and equity under the precondition of continuing operation.

The capital structure of the consolidated company consists of the net debt (borrowings less cash and cash equivalents) and the interests (equity, capital reserve, retained earnings and other equity items) of the Company's owners.

Among the merged companies, in addition to Taichung Commercial Bank Co., Ltd. Corporation and Taichung Bank Securities Co., Ltd. that has minimum capital requirements by law, the other companies are not required to comply with other external capital regulations. The qualified self-owned capital sufficiently of Taichung Commercial

183 -

Bank Co. Ltd. and Taichung Bank Securities Co., Ltd. meets regulatory capital requirements and reach the minimum statutory capital adequacy ratio, which is the basic objective of the consolidated company in terms of capital management. Relevant appropriation and calculation methods of qualified self-owned capital and statutory capital shall be handled according to provisions of competent authorities.

184 -

The management of the consolidated company re-examines the Group's capital structure on a quarterly basis, including considering various capital costs and the related risks. The consolidated company based on the suggestions of management has the overall capital structure balanced by paying dividends, issuing new shares, buying back shares and issuing new debts or paying back old debts.

XLVI. Information about foreign exchange of foreign currency financial assets and liabilities:

The information about foreign currency financial assets and liabilities rendering material effect on the Consolidated Company:

	December 31, 2025
	USD	RMB	JPY	AUD	EUR	Other foreign currencies	Total
Foreign currency financial assets
Cash and cash equivalents	$ 4,042,178	$ 522,789	$ 652,019	$ 233,998	$ 296,867	$ 379,956	$ 6,127,807
Due from Central Bank and lend to Banks	125,716	314,720	-	-	-	293,571	734,007
Financial assets at fair value through profit and loss	1,648,572	-	-	4,616	-	151,836	1,805,024
Financial assets at fair value through other comprehensive profit or loss	15,750,603	-	-	9,597,795	3,229,520	11,990,636	40,568,554
Discounts and loans	47,503,650	1,080,153	225,227	2,159,394	459,713	1,291,183	52,719,320
Accounts receivable	1,395,222	4,088,779	268,878	134,402	48,064	370,850	6,306,195
Assets measured on the basis of cost after amortization	16,624,793	494,437	-	3,235,367	-	1,287,423	21,642,020
Other assets	1,733,654	-	-	25,519	42,312	22,451	1,823,936
Foreign currency financial liabilities
Due to Central Bank and banks	5,342,930	-	-	-	-	-	5,342,930
Funds borrowed from Central Bank and other banks	-	3,256,125	-	-	-	-	3,256,125
Customer deposits and remittances	92,529,057	3,237,772	2,972,718	1,742,437	665,642	1,801,883	102,949,509
Financial liabilities at fair value through profit and loss	1,100,644	-	-	1,268	-	152,049	1,253,961
Other financial liabilities	5,394,474	-	-	-	-	796,218	6,190,692
Payables	597,981	39,390	268,741	27,731	21,107	178,807	1,133,757
Lease liabilities	-	28,580	-	-	-	9,398	37,978
Bills and bonds sold under repurchase agreements	4,983,614	-	-	4,684,825	-	-	9,668,439
Liability reserve	25,863	-	-	-	-	-	25,863
Other liabilities	99,253	56,685	2,790	-	6,785	-	165,513
NTD exchange rate	31.43	4.50	0.20	21.02	36.89
	December 31, 2024
---	---	---	---	---	---	---	---
	USD	RMB	JPY	AUD	EUR	Other foreign currencies	Total
Foreign currency financial assets
Cash and cash equivalents	$ 4,622,543	$ 630,037	$ 594,058	$ 148,734	$ 231,552	$ 397,841	$ 6,624,765
Due from Central Bank and lend to Banks	121,305	89,560	-	-	-	262,652	473,517
Financial assets at fair value through profit and loss	1,938,639	-	-	2,692	2,667	80,451	2,024,449
Financial assets at fair value through other comprehensive profit or loss	19,407,723	-	-	9,730,362	2,027,076	11,766,847	42,932,008
Discounts and loans	46,174,046	1,906,564	422,064	1,804,250	554,517	1,579	50,863,020
Accounts receivable	1,525,955	6,901,430	289,967	119,909	18,182	317,243	9,172,686
Assets measured on the basis of cost after amortization	19,710,569	1,969,691	-	2,802,081	-	1,189,891	25,672,232
Other assets	1,155,930	-	-	13,581	73,813	66,005	1,309,329
Foreign currency financial liabilities
Due to Central Bank and banks	7,737,260	-	-	-	-	-	7,737,260
Funds borrowed from Central Bank and other banks	-	5,294,785	-	-	-	-	5,294,785
Customer deposits and remittances	96,604,719	2,895,437	2,962,670	1,721,810	669,366	1,719,504	106,573,506

The consolidated company's gain (loss) on foreign currency exchange (realized and unrealized) in 2025 and 2024 were NT$1,517,019 thousand and NT$(1,805,503) thousand, respectively. Due to the wide variety of foreign currency transactions, it is difficult to disclose all exchange gains or losses based impact significance.

XLVII. Segment information

(I) Revenues and operating results of segments:

Revenues and operating results of the consolidated company's continuing units are analyzed in accordance with segments to be reported, which are summarized as follows:

	Department income		Gain (loss) from operation
	2025	2024	2025	2024
Chemical Industry Dept.	$ 3,618,644	$ 4,480,237	($ 858,388)	($ 646,816)
Chemical Fiber
Department	2,386,353	2,363,622	( 435,860)	( 538,009)
Bank departments	34,757,630	32,246,503	10,864,262	9,902,708
Other Depts.	4,510,231	6,289,793	( 862,335)	( 784,213)
Total	$ 45,272,858	$ 45,380,155	$ 8,707,679	$ 7,933,670

Revenues reported above are generated from transactions with external customers. There were no inter-departmental sales generated in 2025 and 2024.

Interests of department refer to profits earned by each department, excluding the amounts from associate companies or joint venture recognized by using the equity method, rental income, interest income, disposal of real property, plant and equipment, income from disposal of investments, exchange income, valuation income of financial products, interest expense and income tax expenses. The measured figures are provided for main decision makers to allocate resources to segments and evaluate the performance of each segment.

(II) Departmental total assets

	December 31, 2025	December 31, 2024
Segment assets
Chemical Industry Dept.	$ 2,539,881	$ 2,809,960
Chemical Fiber Department	992,926	1,039,869
Construction Dept.	2,891,980	2,908,387
Bank departments	1,014,512,326	972,079,102

Others
Total segment assets
17,351,219
$ 1,038,288,332
17,743,285
$ 996,580,603

187 -

(III) Information by region

The consolidated company's revenue by location is set out as follows:

	2025	2024
Taiwan	$ 42,897,043	$ 42,451,604
Asia	2,244,043	2,802,688
Others	131,772	125,863
	$ 45,272,858	$ 45,380,155

(IV) Information on major customers

The operating revenue of the consolidated company from a single customer in 2025 and 2024 has not reach 10% of its total operating revenue; therefore, there is no major customers' information.

XLVIII. Disclosures

(I) Material transactions and transfer investment information:

Item No.	Item	Remark
1	Loans to others.	Refer to Schedule 1
2	Endorsements/guarantees to others.	Refer to Schedule 2
3	Significant marketable securities - ending.	Refer to Schedule 3
4	Amount on purchase from and sale to related parties reaching NT$100 million or more than 20% of the Paid-in shares capital.	Refer to Schedule 4
5	Accounts receivable-related party reaching NT$100 million or more than 20% of the paid-in shares capital.	Refer to Schedule 5
6	Other information: Amount of the business relationship and significant transactions between parent company and subsidiaries and among subsidiaries.	Refer to Schedule 8
7	Investee information.	Refer to Schedule 6

(II) Information about investment in Mainland China:

Item No.	Item	Remark
1	Name of the investee in the Mainland Area, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, shareholding ratio, investment gain or loss, carrying amount of the investment at the end of the period, repatriated investment gains and limit on the amount of investment in the Mainland Area.	Refer to Schedule 7
2	With Mainland China, major transactions, and other prices, payment conditions, unrealized gains and losses that happened directly or indirectly through the third region by the investment company:
(1) Purchase amounts, percentages, balance and percentages of relevant payable at end of the period.
(2) Sales amounts, percentages, balance and percentages of relevant receivables at end of the period.
(3) Amount of property transaction and amount of the profit and/or loss so incurred.
(4) Balance and purposes of endorsements/guarantees or collateral provided at end of the term.
(5) The highest balance of fund financing balance at end of the term, range of interest rates and total amount of interest in the current term.
(6) Other transactions having significant effect upon profit and/or loss or financial standing of the current term, e.g., provision or acceptance of services.	Refer to Schedule 7

189 -

Schedule 1. Loans to others:

Unit: NTD thousand, unless otherwise noted

Item No. (Note 1)	Lender	Borrower	Transaction title (Note 2)	Are they related parties	Maximum Balance in Current Period (Note 3)	Balance - ending (Note 8)	The actual amounts disbursed	Interest Rate Collars	Nature of Loan (Note 4)	Amount of Business Transaction (Note 5)	Reasons necessary for offering short-term loan (Note 6)	Amount of allowance for bad debt	Collateral		Limit of loan to particular borrower (Note 7)	Limit of total loan (Note 7)	Remark
													Name	Value
0	China Man-Made Fiber Corporation	Nan Chung Petrochemical Corporation	Other receivables	Yes	$ 300,000	$ 300,000	$ 300,000	2.90%	Necessary for offering short-term loan	$ 39,160	Working capital	$ -	N/A	$ -	$ 2,197,529	$ 8,790,114	Note 9
1	Taichung Bank Leasing Corporation Limited	Zeng Hui Construction Co., Ltd.	×	No	162,000	-	-	4%~10%	“	-	×	-	Real estate	70,040	351,990	1,407,961	Note 10
1	Taichung Bank Leasing Corporation Limited	Hong Shu Construction Co., Ltd.	×	×	45,264	44,712	44,712	4%~10%	“	-	×	447	Real estate	15,248	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	SIN GANG ENTERPRISES CO., LTD.	×	×	54,580	-	-	4%~10%	“	-	×	-	Real estate	11,680	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	Chuan Do Fu Investment Co., Ltd.	×	×	116,950	-	-	4%~10%	“	-	×	-	Real estate	58,359	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	Ching Dian Industrial Co., Ltd.	×	×	27,661	-	-	4%~10%	“	-	×	-	Real estate	-	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	AERSPLAY LCD CO., LTD.	×	×	105,801	51,813	51,813	4%~10%	“	-	×	518	Real estate	148,234	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	Kung Er Fu Construction Co., Ltd.	×	×	30,000	-	-	4%~10%	“	-	×	-	Real estate	30,000	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	Chun Yang Industrial Co., Ltd.	×	×	100,000	77,304	77,304	4%~10%	“	-	×	773	Real estate	211,389	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	Da Liang Investment Co., Ltd.	×	×	45,000	24,177	24,177	4%~10%	“	-	×	242	Stocks	47,180	351,990	1,407,961	“
1	Taichung Bank Leasing Corporation Limited	Chun Fa Investment Ltd.	×	×	30,000	27,560	7,560	4%~10%	“	-	×	76	Stocks	30,348	351,990	1,407,961	“

Note 1: The column for numbering is elaborated below:
1. Fill in 0 for the issues.
2. The investees are sequentially numbered from 1 and so forth.
Note 2: The receivables-affiliates, receivables-related parties, shareholders accounts, prepayments, temporary payments and others as stated in book shall be filled in here if they are classified as financing.
Note 3: Maximum balance of financing a third party in current period.
Note 4: Specify if the nature of financing is for business transactions or short-term financing is necessary.
Note 5: If the nature of financing is for business transactions, specify the amount of business transactions. The amount of business transactions shall be the amount of business conducted between the lender and the beneficiary of financing.
Note 6: If it is necessary for short-term financing, specify the reasons and the beneficiary of financing and the use of the fund, such as: retirement of loans, procurement of equipment, and working capital.
Note 7: Specify the Procedure for Financing Third Parties and the upper limit of financing in favor of particular beneficiary and the total limit of financing, and also the method for the calculation of the upper limit of financing in favor of particular beneficiary and the total limit of financing in the space provided in this field.
Note 8: For public companies proposed the lending of funds before the Board for resolution case by case pursuant to Article 14-1 of the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies," the amount approved by the Board but not yet being drawn shall still be included in the amount for announcement for the disclosure of risk being assumed. If the loans are being retired in the future, disclose the outstanding balance to reflect the adjustment of risk. For public companies proposed the lending of funds before the Board for resolution case by case pursuant to Article 14-2 of the "Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies" whereby the Board resolved to authorize the Chairman to effect the drawdown or in revolving credit in transfers within specific limit and in the year, the amount and the limit approved by the Board shall still be announced as the outstanding balance. In subsequent retirement of loans, repeated drawdown shall still be considered and the amount and the limit approved by the Board shall still be announced as the outstanding balance.
Note 9: The total amount of funds lent by China Man-Made Fiber Corporation to a single enterprise must not exceed 10% of the net worth of China Man-Made Fiber Corporation. Total loan amounts must not exceed 40% of the net worth of China Man-Made Fiber Corporation.
Note 10: The loaning of Taichung Bank Leasing Corporation Limited to a particular enterprise shall be up to 10% of the net worth of the Company. The total amount of loaning of funds shall not exceed 40% of the net worth of Taichung Bank Leasing Corporation Limited.

Schedule 2. Endorsement/guarantee to others:

Unit: NTD thousand

Item No.	Name of Endorser/Guarantor	Endorsed/Guaranteed		Limit of endorsement/guarantee to a single enterprise (Note 1)	Maximum balance in current period (Note 3)	Balance-ending	The actual amounts disbursed	Endorsement/guarantee with collateral	Accumulated amount of endorsement/guarantee in proportion to the net worth stated in the financial statements of the most recent period	Upper limit of endorsement/guarantee (Note 2)	Guaranteed endorsement of parent company to subsidiary (Note 4)	Guaranteed endorsement of subsidiary to parent company (Note 4)	Guaranteed endorsement in Mainland China (Note 4)
		Company name	Affiliation
1	Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	Subsidiary of Chou Chin Industrial Co., Ltd.	$ 1,124,057	$ 15,000	$ 15,000	$ -	$ -	0.67	$ 2,248,114	—	—	—
2	Taichung Bank Leasing Corporation Limited	Taichung Commercial Bank Leasing (Suzhou) Ltd.	100% and indirectly owned subsidiary of Taichung Commercial Bank	21,119,418	6,667,866	4,346,240	2,590,443	-	123.48	35,199,030	—	—	Y

Note 1: Chou Chin Industrial stipulated in its Operating Procedures for Endorsement Guarantee that its endorsement guarantee for an enterprise shall not exceed 50% of the net value of the latest financial statements. If the guarantee is for business transaction relationships, the amount shall not exceed the total transaction in the most recent year. Taichung Bank Leasing stipulated in its Operating Procedures for Endorsement Guarantee that its endorsement guarantee for an enterprise shall not exceed six times the net value of the latest financial statements.

Note 2: Chou Chin Industrial stipulated in its Operating Procedures for Endorsement Guarantee that its total endorsement guarantee shall not exceed the net value of the latest financial statements. Taichung Bank Leasing stipulated in its Operating Procedures for Endorsement Guarantee that its total endorsement guarantee shall not exceed ten times the net value of the latest financial statements.

Note 3: The highest balance of endorsements and/or guarantees in the current year.

Note 4: For guarantee and endorsement from parent company to subsidiaries, from subsidiaries to parent company, and to Mainland China, as in the case of TWSE/GTSW-listed companies, fill in Y.

Unit: NTD thousand / thousand shares

Schedule 3: Significant marketable securities - ending:

Account Title	Type and Name of Securities	Holder of Securities	Affiliation with securities Issuer	Ending				Remark
				Quantity	Book Value	Shareholding %	Fair value
Equity instrument investments measured at fair value through other comprehensive income- non-current	Shares traded on the Taiwan Stock Exchange or OTC exchange							1,148 thousand shares pledged
	Hua Nan Financial Holding	China Man-Made Fiber Corporation	Substantial related party	73,893	$ 2,290,687	1	$ 2,290,687
	Non listed (OTC) domestic stock
	TAIWAN FILAMENT WEAVING DEVELOPMENT CO., LTD. common shares	”	China Man-Made Fiber Corporation is its corporate director.	10,878	21,539	18	21,539
	TAIWAN FILAMENT WEAVING DEVELOPMENT CO., LTD. preferred shares	”	”	192	381	6	381
	TWSE	”	N/A	3,075	210,135	-	210,135
	Non-listed (OTC) overseas stock
	TRIFORD INTERNATIONAL LIMITED	”	Affiliated enterprises	3,250	7,768	18	7,768
	Shares traded on the Taiwan Stock Exchange or OTC exchange							43,954 thousand shares pledged
	China Man-Made Fiber Corporation	Pan Asia Chemical Corporation	Parent company of Pan Asia Chemical Corporation	266,075	1,825,273	16	1,825,273
	Non listed (OTC) domestic stock
	Chuang Chien Investment Co., Ltd.	”	Affiliated enterprises	12,000	25,315	18	25,315
Shares traded on the Taiwan Stock Exchange or OTC exchange
China Man-Made Fiber Corporation	De Xing Investment Company	Parent company of De Xing Investment Company	14,494	99,432	1	99,432
Pan Asia Chemical Corporation	”	A subsidiary of China Man-Made Fiber Corporation	-	2	-	2
Non listed (OTC) domestic stock
Chuang Chien Recreation Investment Co., Ltd.	”	Affiliated enterprises	90	900	18	900

(Continued)

Account Title	Type and Name of Securities	Holder of Securities	Affiliation with securities Issuer	Ending				Remark
				Quantity	Book Value	Shareholding %	Fair value
Equity instrument investments measured at fair value through other comprehensive income- non-current	Non listed (OTC) domestic stock
	Taiwan Futures Exchange	Taichung Bank Securities Investment Trust Co., Ltd.	N/A	2,526	$ 233,836	-	$ 233,836
	Shares traded on the Taiwan Stock Exchange or OTC exchange
	Taichung Commercial Bank	Chou Chin Industrial Co., Ltd.	A subsidiary of China Man-Made Fiber Corporation	10,354	215,374	-	215,374	5,500 thousand shares pledged
	China Man-Made Fiber Corporation	〃	Ultimate parent of Chou Chin Industrial Co., Ltd.	61,488	421,806	4	421,806	44,000 thousand shares pledged
	Hua Nan Financial Holding	〃	Substantial related party	28,908	896,157	-	896,157	27,000 thousand shares pledged
	Taiwan Tea Corporation	〃	N/A	21,215	282,160	3	282,160	15,200 thousand shares pledged
	Non listed (OTC) domestic stock
	COTA Bank	〃	N/A	20,297	215,151	-	215,151
	Shares traded on the Taiwan Stock Exchange or OTC exchange
	Taichung Commercial Bank	Chou Chang Co., Ltd.	A subsidiary of China Man-Made Fiber Corporation	19,754	410,874	-	410,874	10,000 thousand shares pledged
	China Man-Made Fiber Corporation	〃	Ultimate parent of Chou Chin Industrial Co., Ltd.	9,618	65,976	1	65,976
	Non listed (OTC) domestic stock
Chou Chin Industrial Co., Ltd.	〃	The investor evaluating Chou Chang Co., Ltd. under equity method	565	2,603	1	2,603
Debt instrument investments measured at fair value through other comprehensive income- non-current	Domestic corporate bonds

193 -

	Taichung Commercial Bank financial bonds	China Man-Made Fiber Corporation	A subsidiary of China Man-Made Fiber Corporation	7	70,000	-	70,000
	π	Chou Chin Industrial Co., Ltd.	π	10	100,000	-	100,000	NT$ 100,000 thousand pledge
	π	Chou Chang Co., Ltd.	π	15	156,797	-	156,797	NT$ 150,000 thousand pledge

Note 1: Taichung Commercial Bank and its subsidiaries are exempt from disclosure due to that they are in the financial, insurance and securities businesses.
Note 2: Materiality standards refer to amounts with carrying values below NT$100,000 thousand that may be exempt from disclosure; however, all securities held in related parties shall be fully disclosed.

Schedule 4. Amount on purchase from and sale to related parties reaching NT$100 million or more than 20% of the Paid-in shares capital:

Unit: NTD thousand, unless otherwise noted

Purchaser/Seller	Trading Counterpart	Affiliation	Status				Distinctive terms and conditions of trade and the reasons		Receivable (payable) accounts/notes
			Purchase (sale)	Amount	Percentage in total purchase (sale) amount %	Duration	Unit Price	Duration	Balance	Percentage in total receivable (payable) accounts/notes %
China Man-Made Fiber Corporation	Pan Asia Chemical Corporation	A subsidiary of China Man-Made Fiber Corporation	Sales	($ 635,000)	( 13%)	30 - 60 days	Not distinctive	30~90 days for the general transactions	$ 82,949	16%
Pan Asia Chemical Corporation	China Man-Made Fiber Corporation	Parent company of Pan Asia Chemical Corporation	Purchases	635,000	59%	30 - 60 days	〃	〃	( 82,949)	( 63%)
Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	Subsidiary of Chou Chin Industrial Co., Ltd.	Sales	( 1,532,043)	( 55%)	A/C 90 days	〃	〃	145,257	49%
Greenworld Food Co., Ltd.	Chou Chin Industrial Co., Ltd.	Parent company of Greenworld Food Co., Ltd.	Purchases	1,532,043	76%	A/C 90 days	〃	〃	( 145,257)	( 78%)

Note 1: The above transactions have been written off in the consolidated statement.
Note 2: China Man-Made Fiber Corporation's sales to Pan Asia Chemical Corporation include electricity, purified water, steam, and natural gas.

Schedule 5. Accounts receivable-related party reaching NT$100 million or more than 20% of the paid-in shares capital:

Unit: NTD thousand

Company of receivables on book	Trading Counterpart	Affiliation	Outstanding balance of amounts receivable from related parties	Turnover Rate	Overdue receivables with related party		Receivables with related party after period collection	Amount of allowance for bad debt
					Amount	Mode of Processing
China Man-Made Fiber Corporation	Nan Chung Petrochemical Corporation	China Man-Made Fiber Corporation	$ 300,739	(Note)	$ -	—	$ -	$ -
Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	A subsidiary of Chou Chin Industrial Co., Ltd.	145,257	10.90	-	—	145,257	-

Note 3: The above transactions have been written off in the consolidated statement.
Note 4: Mainly other receivables, for which the calculation of turnover days is not applicable.

Schedule 6. Information on investees' name, location, etc.

Unit: NTD thousand, unless otherwise noted

Investor	Investor	Location	Major Business Lines	Initial Investment Amount		Equity Ownership by the Company			Current period net gain (loss) of the investee	Investment gain (loss) recognized in current period	Remark
				Current period-ending	Previous period-ending	Quantity	Percentage %	Book Value
China Man-Made Fiber Corporation	Investee in which the Company has substantial control
	Taichung Commercial Bank Co., Ltd.	Taichung City	Banking business	$ 7,854,519	$ 7,552,476	1,277,768	21	$ 19,469,234	$ 9,057,493	$ 1,928,647	540,400 thousand shares pledged
	Pan Asia Chemical Corporation	Taipei City	Petrochemical business	968,472	968,472	179,259	44	1,984,333	360,421	160,029
	De Xing Investment Company	Taipei City	General investment business	790,000	790,000	79,000	100	1,023,058	33,969	33,969
	Taichung Bank Securities Investment Trust Co., Ltd.	Taipei City	Securities investment trust business	6,295	6,295	922	3	14,746	(4,767)	(141)
Chou Chin Industrial Co., Ltd.	Changhua County	Manufacturing and trading	176,430	176,430	38,759	47	816,102	(25,697)	(12,099)
Pan Asia Chemical Corporation	Taichung Commercial Bank Co., Ltd.	Taichung City	Banking business	1,934,142	1,853,459	341,322	6	5,200,614	9,057,493	514,831
	Taichung Bank Securities Investment Trust Co., Ltd.	Taipei City	Securities investment trust business	15,738	15,738	979	3	15,697	(4,767)	(150)
Taichung Commercial Bank Co., Ltd.	Taichung Commercial Bank Lease Enterprise	Taipei City	Leasing industry	2,400,000	2,400,000	317,977	100	3,519,903	288,110	288,110
	Taichung Insurance Brokers Co., Ltd.	Taichung City	Insurance agency	6,000	6,000	50,000	100	1,417,246	526,245	526,245
	Taichung Bank Securities Co., Ltd.	Taichung City	Securities business	1,500,000	1,500,000	191,965	100	2,244,968	43,749	43,749
	Taichung Bank Securities Investment Trust Co., Ltd.	Taipei City	Securities investment trust business	120,000	120,000	12,000	38	192,271	(4,767)	(1,834)
Taichung Commercial Bank Lease Enterprise	TCCBL Co., Ltd. (B.V.I)	British Virgin Islands	Financing, leasing and investments.	893,373	893,373	30,000	100	1,087,241	28,851	28,851
Taichung Bank Securities Co., Ltd.	Taichung Bank Venture Capital Co., Ltd.	Taipei City	Venture Investment	300,000	300,000	31,582	100	306,146	(11,927)	(11,927)
De Xing Investment Company	Taichung Commercial Bank Co., Ltd.	Taichung City	Banking business	107,649	86,575	35,081	-	270,564	9,057,493	26,360	4,500 thousand shares pledged
	Taichung Bank Securities Investment Trust Co., Ltd.	Taipei City	Securities investment trust business	20,162	20,162	1,716	6	27,495	(4,767)	(262)
	Chou Chang Co., Ltd.	Taichung City	Distribution and warehousing of beverages	44,000	44,000	4,060	15	80,250	12,669	1,873
	Chou Chin Industrial Co., Ltd.	Changhua County	Manufacturing and trading	10,243	10,243	2,071	3	56,428	(25,697)	(644)
	Precious Wealth International Limited	Samou	General investment business	-	2,740	-	-	-	14	14
Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	Taichung City	Food manufacturing, and distribution and warehousing of beverages	233,722	233,722	17,575	90	219,783	31,799	32,163
	Chou Chang Co., Ltd.	Taichung City	Distribution and warehousing of beverages	308,798	308,798	13,343	49	263,773	12,669	6,155
	Bomy International Co., Ltd.	British Virgin Islands	General investment business	205,092	205,092	10,000	49	156,157	(14,014)	(6,819)
	Noble House Global Limited	Samou	General investment business	92,873	79,761	3,060	97	51,001	(1,226)	(1,191)
Noble House Global Limited	Noble House Glory Co., Ltd (Japan)	Japan	Short-term accommodation service	65,526	52,295	8,000	100	51,612	(1,191)	(1,191)
Greenworld Food Co., Ltd.	Chou Chang Co., Ltd.	Taichung City	Distribution and warehousing of beverages	1,470	1,470	52	-	328	12,669	24
	Bomy International Co., Ltd.	British Virgin Islands	General investment business	52,306	52,306	2,650	13	41,397	(14,014)	(1,808)
Chou Chang Co., Ltd.	Greenworld Food Co., Ltd.	Taichung City	Food manufacturing, and distribution and warehousing of beverages	11,226	11,226	1,133	6	15,977	31,799	1,849
	Investee in which the Company has							$ 38,526,324		$ 3,554,803

China Man-Made Fiber Corporation	significant influence	Yunlin County	Petrochemical business	1,000,002	1,000,002	100,000	50	$ 717,387	( 220,843 )	( $ 110,421 )
De Xing Investment Company	Wk Taipei Co., Ltd	Taipei City	Retail	5,000	5,000	300	30	1,380	1,322	396
Chou Chin Industrial Co., Ltd.	Storm Model Management Co., Ltd.	Taipei City	General Advertising Services	7,035	4,800	376	22	6,542	464	103
	Lay Coffee Co., Ltd.	Taipei City	Wholesale of Foods and Groceries	10,000	10,000	1,000	33	5,145	( 14,086 )	( 4,695 )
								$ 730,454		( $ 114,617 )

Note: Investment gain (loss) recognized in current period

198 -

Unir: In thousands of New Taiwan dollars and foreign currencies, unless otherwise stated.

Schedule 7. Information about mainland China investment:

Investee	Major Business Lines	Paid-in capital	Mode of investment	Amount remitted from Taiwan in accumulation at beginning of the present term	Investment Remittance or Regain during the current period		Amount remitted from Taiwan in accumulation at ending of the present term	Current period net gain (loss) of the investee	The Company's Direct or Indirect Investment Holding Ratio %	Investment (loss) gain recognized during the period (Note 6)	Book Value of Investment at the End of the Period	Investment return already remitted back as of the present term
					Remittance	Regain
Shanghai Bomy Food Stuff Co., Ltd.	OEM, production and marketing of canned vegetable and fruit juice and beverages	$ 645,000 (US$ 20,000)	Invested through the third area	$ 638,972 (US$ 19,850)	$ -	$ -	$ 638,972 (US$ 19,850)	($ 14,120) (US$ 453)	28% (Note 1)	($ 3,978) (US$ 128) (2) C	$ 90,867 (US$ 2,891)	$ -
Shanghai Bomy Consultancy Management Co., Ltd.	Consultation service	-	-	-	-	-	-	-	- (Note 2)	-	-	-
Shanghai Bangyi International Trading Co., Ltd.	International trade	4,305 (CNY 1,000)	Self-owned capital investment of Shanghai Bomy Foodstuff Co., Ltd.	-	-	-	-	( 1,251) (CNY 289)	28% (Note 3)	( 355) (CNY 82) (2) C	( 571) (CNY 127)	-
Chou Chin Shanghai	Manufacturing, processing and sale of modern, PC, computer shell and related metal stamping, interface, main frame and fiber optical system appliances	30,355 (US$ 1,001)	Invested through the third area	14,486 (US$ 450)	-	-	14,486 (US$ 450)	-	49% (Note 4)	-	-	-
Hebei Hammock Company Limited	Manufacturing and trading	470,685 (US$ 15,000)	o	470,685 (US$ 15,000)	-	-	470,685 (US$ 15,000)	( 9,429) (CNY 2,176)	28%	( 2,640) (CNY 609) (2) C	88,258 (CNY 19,630)	-
Taichung Bank Financial Leasing (Suzhou) Co., Ltd.	Financing leasing and investments	893,373 (CNY 186,329)	o	893,373 (CNY 186,329)	-	-	893,373 (CNY 186,329)	26,107 (CNY 6,035)	29% (Note 5)	7,571 (CNY 1,750) (2)B	297,713 (CNY 66,217)	-
Amount accumulated, remitted from Taiwan for investment in Mainland China at the end of the current term	Investment Amount Approved by Investment Commission of MOEA	Mainland China Investment Ceiling As Regulated by Investment Commission of MOEA (Note 7)
---	---	---
$ 2,017,516 (US$ 35,300 and RMB$ 186,329)	$ 2,204,953 (US$ 41,400 and RMB$ 186,329)	$ 4,076,730

Note 1: The consolidated shareholding calculated based on the reinvestment by Chou Chin Industrial Co., Ltd. and Greenworld Food Co., Ltd. through Bomy Enterprise.
Note 2: The deregistration was completed in the second quarter of 2025.
Note 3: The comprehensive shareholding ratio of Bomy International Co., Ltd. and Shanghai Bomy Foodstuff Co., Ltd. Calculated based on the reinvestment method.
Note 4: The consolidated shareholding calculated based on the reinvestment by Chou Chin Industrial Co., Ltd. and Chou Chang Co., Ltd. through a third area.
Note 5: Percentage of comprehensive cross holding of Taichung Bank Leasing through investment in companies in the third region.
Note 6: Recognized as gains or losses on investment in current period:

(1) Please note if the investee is still under preparation and there was no investment gain or loss.

(2) The basis of recognition of investment income is classified into following three types, which should be marked out:

A. Financial statements audited and audited and attested by an international accounting firm that has a cooperative relationship with a certified public accounting firm registered in the Republic of China.

B. Financial statements audited and attested by the independent accounts of the parent company.

C. Others: Conduct analytical procedures based on the provisions of the Standards on Auditing No. 600 regarding the determination of key composition.

(3) Not audited by a CPA

Note 7: The ceiling calculated by the applicant, Chou Chin Industrial Co., Ltd., Taichung Commercial Bank Lease Enterprise and De Xing Investment Company according to the "Regulations Governing the Review of Investment or Technical Cooperation in Mainland China" of Investment Commission, MOEA.

Note 8: The foreign currency, if any, has been translated into NTD (USD1=NT$31.43, USD1=NT$31.18, CNY1=NT$4.50, CNY1=$4.33) at the foreign exchange rate-ending and average foreign exchange rate prevailing on the date of the financial statement.

Note 9: Any financing with investees in Mainland China, either directly or indirectly through a third area: For details, please refer to Table 1.

Note 10: Any endorsement, guarantee or collateral with investees in Mainland China, either directly or indirectly through a third area: For details, please refer to Table 2.

200 -

Unit: NTD thousand

Schedule 8. Business relationship and main dealings between the parent and its subsidiaries:

Item No. (Note 1)	Trader's name	Counterparty	Relationship with trader (Note 2)	Transactions
				Title	Amount (Note 3)	Terms and conditions	Percentage in consolidated total revenue or total assets Percentage in consolidated total revenue or total assets (Note 4)
0	2025 China Man-Made Fiber Corporation	Pan Asia Chemical Corporation	1	Sales revenue	$ 635,000	No significant difference from the general customer	1%
1	Taichung Commercial Bank	Taichung Insurance Brokers Co., Ltd.	3	Customer deposits and remittances	1,869,472	〃	-
1	Taichung Commercial Bank	Taichung Insurance Brokers Co., Ltd.	3	Income from handling fees	418,634	〃	1%
1	Taichung Commercial Bank	Taichung Bank Leasing Corporation Limited	3	Customer deposits and remittances	363,493	〃	-
1	Taichung Commercial Bank	Taichung Bank Venture Capital Co., Ltd.	3	Customer deposits and remittances	149,246	〃	-
1	Taichung Commercial Bank	De Xing Investment Company	3	Customer deposits and remittances	186,241	〃	-
2	Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	3	Sales revenue	1,532,043	〃	3%
2	Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	3	Accounts receivable	145,257	〃	-
2	Chou Chin Industrial Co., Ltd.	Greenworld Food Co., Ltd.	3	Royalty revenue	185,676	〃	-

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

Note 2: The relationship with the trade party is classified into three categories as follows:
1. Parent company to subsidiaries.

Subsidiaries to parent company.
Subsidiaries to subsidiaries.
Written-off upon consolidation.
For computing the ratio of trade amount to total sales revenue or total assets, if it is for asset and liability account, the computation is based on the ratio of ending balance to total consolidated assets; however, if it is for income and expense account, the computation is based on the ratio of interim cumulative amount to total consolidated revenue.
Major transactions refer to those reaching NT$100,000 thousand and shall be disclosed.

AI assistant

CMFC — Audit Report / Information 2025

51899_rns_2026-05-25_962e72db-d347-4b02-97c2-d4bb1c0a5611.pdf

Consolidated Financial Statements and Independent Auditors’ Report

Audit opinions

The basis for opinions

Key audit matter

Authenticity of specific sales revenue

Notes to key audit matters

Audit response

Assessment of the expected credit loss from discounting and advances.

Notes to key audit matters

Audit response

Other information

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Auditor’s responsibilities for the audit of the consolidated financial statements

IV. Summary of important accounting policies

(I) Compliance Statement

(II) Basis of preparation

Changes in ownership interests in subsidiaries

(V) Foreign Currency

XVII.Subsidiaries

2. Defined benefit plan

3. Employees preferential deposit plan

XXXII. Equity

(I) Share capital

(II) Capital surplus

(III) Retained earnings and Dividend Policy

XXXVI. Disposal of subsidiaries

14. Loans

15. Deposits

16. Financial bonds payable

17. Tenancy agreement

(III) Rewards to management

XL. Financial instruments

1. Fair value bracket

XLI. Purpose and policy of financial risk management

Quantified indicators

Quality indicators

Quantified indicators

Quality indicators

CONSIDERATION OF PROSPECTIVE INFORMATION

B. Debt instrument

Quantified indicators

B. CREDIT QUALITY ANALYSIS ON INVESTMENT OF DEBT INSTRUMENTS

3. Liquidity risk

(1) Sources and definitions of liquidity risk

Non-derivative financial liabilities maturity analysis

Derivative financial liabilities maturity analysis

(1) Derivative instruments cleared and settled at net value

(2) Derivatives cleared and settled at total value

4. The maturity analysis of items not on the statement

5. Cash flow risk estimated under interest rate changes

XLIII. Offsetting of financial assets and liabilities

XLVII. Segment information

(I) Revenues and operating results of segments:

(II) Departmental total assets

More from CMFC

CMFC Audit Report / Information 2025