GENERAL PLASTIC INDUSTRIAL CO., LTD.
AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH INDEPENDENT AUDITORS' REPORT
FOR THE YEARS ENDED
DECEMBER 31, 2025 AND 2024

Address: No.50, Tzu-Chiang Rd., Wu-Chi District, Taichung City, Taiwan, R.O.C.
Telephone: 886-4-26393103

Notice to readers:
The reader is advised that these consolidated financial statements have been prepared originally in Chinese. In the event of a conflict between these financial statements and the original Chinese version or difference in interpretation between the two versions, the Chinese language financial statements shall prevail.

REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of GENERAL PLASTIC INDUSTRIAL CO., LTD. as of and for the year ended December 31, 2025, under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard 10 “Consolidated Financial Statements”. In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, GENERAL PLASTIC INDUSTRIAL CO., LTD. and subsidiaries do not prepare a separate set of combined financial statements.

Hereby certified.

GENERAL PLASTIC INDUSTRIAL CO., LTD.

Wang, Kuo-Ying
Chairman

March 13, 2026

Independent Auditors' Report Translated from Chinese

To GENERAL PLASTIC INDUSTRIAL CO., LTD.

Opinion

We have audited the accompanying consolidated balance sheets of GENERAL PLASTIC INDUSTRIAL CO., LTD. and its subsidiaries (the "Group") as of December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended December 31, 2025 and 2024, and notes to the consolidated financial statements, including the summary of material accounting policies (together "the consolidated financial statements").

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and its consolidated financial performance and cash flows for the years ended December 31, 2025 and 2024, in conformity with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed and became effective by Financial Supervisory Commission of the Republic of China.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Financial Statement Audit and Attestation Engagements of Certified Public Accountants and the Standards on Auditing of the Republic of China. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the "Norm"), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2025 consolidated financial statements. These matters were addressed in the context 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 these matters.

Inventory Valuation

As of December 31, 2025, the amount of net inventories of the Group was NTD1,226,581 thousand, which represented 19% of the total consolidated assets and was significant to the financial statements. The Group specializes in manufacturing and selling toner cartridges of photocopiers, laser printers and OPC Drum Gears. The determination of the provisions for obsolete inventories involved a high level of management judgment, and were subject to uncertainty due to product diversity. Furthermore, the cost of inventory included direct labor, raw material, and overhead, and the calculation and allocation were complex. Also, the allocation basis could have a material impact on the financial statements. As such, we determined this to be a key audit matter. Our audit procedures included, but were not limited to, understanding and testing the design and operating effectiveness of internal control over inventory cost and allowance for inventory; assessing the appropriateness of the policy of provision for excess and obsolete inventory by testing the accuracy of inventory ageing and analyzing movement of the ageing, analyzing the difference between the policy of the current year and the prior year, and analyzing the difference between the historical provisions and the actual write-off amount; performing inventory price testing to verify the allocation of cost, direct labor, and overhead is reasonable; verifying that inventories were valued at the lower of cost or net realizable value by comparing the book value of inventories at the balance sheet date with recent sales price on selected samples; verifying the existence and completeness of inventories by tracing items on the final inventory listing to the physical inventory compilation; attending inventory counts to understand the status of the inventories and evaluate the appropriateness of the excess and obsolescence provision. We also considered the appropriateness of the disclosure of inventory in Note 6 to the parent company only financial statements.

Goodwill impairment

As of December 31, 2025, the Group recognized goodwill impairment loss amounting to NTD 1,054,384 thousand. The Company performed impairment testing on the cash-generating units according to the International Financial Reporting Standards. Because the carrying amounts of goodwill impairment loss were significant to the Group, the determination of value in use was complex, as it involved significant management judgment when making assumptions about cash flow forecasts. We identified goodwill impairment as a key audit matter. Our audit procedures include, but are not limited to, evaluating whether the components of the cash-generating units have significantly changed, including analyzing the sales model and regions involved; evaluating the management's assessment approaches and assumptions of value in use; evaluating the reasonableness of key assumptions used by management, such as growth rates, discount rates, gross margin, and evaluating the reasonableness of key components of discount rates, such as cost of equity, company-specific risk premium and market risk premium by comparing them to other companies of similar size with the cash-generating units; interviewing management and assessing the reasonableness of assumptions used in their financial forecast, such as cash flows, gross margin, growth rates, the overall market and economic conditions; comparing the actual financials to date with previously forecast financials and analyzing the Group's historical data and performance to assess the reasonableness of the cash flow forecast. We also assessed the adequacy of the disclosures related to the result of impairment test and assumption's sensitivity in Notes 4 and 6 to the consolidated financial statements.

Revenue Recognition

The primary source of income of the Group is derived from sale of OEM-compatible imaging consumables and supplies, such as toner cartridges and drum gears for office equipment. Based on the varying contract terms in different distribution channels and sales models, it is significant to determine the timing when the control of goods is transferred and performance obligation is satisfied for the consolidated financial statements. We identified revenue recognition as a key audit matter. Our audit procedures include, but are not limited to, understanding and testing the effectiveness of internal controls related to revenue recognition in the sales cycle; selecting samples to perform the test of details of the sales transactions; reviewing the performance obligations of the orders or contracts and confirming the timing of performance obligation satisfaction against the related supporting documents to verify the correctness of the timing of revenue recognition; performing the cut-off testing for periods before and after the balance sheet date; and conducting analytical procedures for goods sold based on product types, regions, monthly sales revenue, and gross margin. We also considered the appropriateness of the disclosure of operating revenue in Note 6 to the consolidated financial statements.

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee as endorsed by Financial Supervisory Commission of the Republic of China and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the ability to continue as a going concern, of the Group disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including the audit committee, are responsible for overseeing the financial reporting process of the Group.

Auditors' 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 auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Standards on Auditing of the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, 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 Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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 to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for 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 an opinion on the effectiveness of the internal control of the Group.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Group. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, 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 charged with governance, we determine those matters that were of most significance in the audit of 2025 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Others

We have audited and expressed an unqualified opinion on the parent company only financial statements of the Company as of and for the years ended December 31, 2025 and 2024.

Huang, Yu Ting

Lai, Shu Chen

Ernst & Young, Taiwan

March 13, 2026

Notice to Readers

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

Accordingly, the accompanying consolidated only financial statements and report of independent auditors are not intended for use by those who are not informed about the accounting principles or Standards on Auditing of the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

English Translation of the Consolidated Financial Statements Originally Issued in Chinese

GENERAL PLASTIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	As of December 31,
		2025		2024
Assets	Notes	Amount	%	Amount	%
Current assets
Cash and cash equivalents	4, 6(1)	$688,261	11	$888,081	10
Financial assets at fair value through profit or loss, current	4, 6(2)	546,154	8	469,413	6
Financial assets measured at amortized cost, current	4, 6(3), 8	4,843	-	32,249	-
Financial assets for hedging, current	4, 12	57	-	-	-
Notes receivable, net	6(4)	211	-	696	-
Accounts receivable, net	6(4)	759,847	12	802,824	9
Other receivables		64,657	1	65,216	1
Current tax assets	4	14,669	-	12,629	-
Inventories	4, 6(5)	1,226,581	19	1,360,033	16
Prepayments		56,093	1	56,916	1
Other current assets		205	-	98	-
Total current assets		3,361,578	52	3,688,155	43
Non-current assets
Financial assets at fair value through other comprehensive income, non-current	4, 6(6)	101,341	2	105,717	1
Financial assets measured at amortized cost, non-current	4, 6(3), 8	9,602	-	8,871	-
Property, plant and equipment	4, 6(7), 8	2,006,503	31	2,083,013	24
Right-of-use assets	4, 6(19)	384,555	6	448,913	5
Investment property, net	4, 6(8)	360,062	6	384,883	4
Intangible assets	4, 6(9)	85,047	1	483,762	6
Goodwill	4, 6(10)	-	-	1,110,475	13
Deferred tax assets	4, 6(23)	77,070	1	279,665	3
Other non-current assets		66,236	1	60,989	1
Total non-current assets		3,090,416	48	4,966,288	57
Total assets		$6,451,994	100	$8,654,443	100

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

(continued)

English Translation of the Consolidated Financial Statements Originally Issued in Chinese

GENERAL PLASTIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (Continued)

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	As of December 31,
		2025		2024
Liabilities and Equity	Notes	Amount	%	Amount	%
Current liabilities
Short-term loans	4, 6(11)	$1,685,000	26	$1,820,000	21
Short-term notes and bills payable	4, 6(12)	19,949	1	20,935	-
Financial liabilities at fair value through profit or loss, current	4, 12	113	-	895	-
Financial liabilities for hedging, current	4, 12	-	-	42	-
Contract liabilities, current	6(18)	12,987	-	10,936	-
Notes payable		66	-	799	-
Accounts payable		457,732	7	655,352	8
Other payables	6(13), 11	416,136	7	458,263	5
Current tax liabilities	4	20,347	-	168,663	2
Provisions, current	4, 6(14)	12,197	-	11,098	-
Lease liabilities, current	4, 6(19)	140,874	2	98,163	1
Current portion of long-term loans	4, 6(15)	80,000	1	80,000	1
Other current liabilities		2,551	-	2,743	-
Total current liabilities		2,847,952	44	3,327,889	38
Non-current liabilities
Contract liabilities, non-current	4, 6(18)	636	-	-	-
Long-term loans	4, 6(15)	480,000	8	260,000	3
Provisions, non-current	4, 6(14)	25,826	-	21,603	-
Deferred tax liabilities	4, 6(23)	6,158	-	240,346	3
Lease liabilities, non-current	4, 6(19)	293,581	5	396,649	5
Net defined benefit liabilities, non-current	4, 6(16)	20,868	-	35,581	-
Other non-current liabilities		6,347	-	401	-
Total non-current liabilities		833,416	13	954,580	11
Total liabilities		3,681,368	57	4,282,469	49
Equity attributable to the parent company
Capital
Common stock	6(17)	1,275,887	20	1,275,887	15
Additional paid-in capital	6(17)	1,213,799	19	1,213,799	14
Retained earnings	6(17)
Legal reserve		664,623	10	626,391	7
(Accumulated deficit) Unappropriated earnings		(548,479)	(9)	1,019,163	12
Total retained earnings		116,144	1	1,645,554	19
Other components of equity
Exchange differences on translation of foreign operations		182,657	3	255,366	3
Unrealized gains or losses from financial assets measured at fair value through other comprehensive income		(17,903)	-	(18,601)	-
Gains or losses on hedging instruments		42	-	(31)	-
Total other components of equity		164,796	3	236,734	3
Total equity		2,770,626	43	4,371,974	51
Total liabilities and equity		$6,451,994	100	$8,654,443	100

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

English Translation of the Consolidated Financial Statements Originally Issued in Chinese

GENERAL PLASTIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Years Ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

	Notes	For the Years Ended December 31,
		2025	%	2024	%
Operating revenues	4, 6(18), 7	$5,250,714	100	$5,510,033	100
Operating costs	6(5), 6(20), 11	(3,218,652)	(61)	(3,219,873)	(58)
Gross profit from operations		2,032,062	39	2,290,160	42
Operating expenses	6(20)
Selling and marketing expenses		(721,223)	(14)	(680,089)	(12)
General and administrative expenses		(1,021,961)	(19)	(1,070,170)	(20)
Research and development expenses		(147,798)	(3)	(163,430)	(3)
Expected credit impairment losses	6(4)	(2,082)	-	(2,410)	-
Total operating expenses		(1,893,064)	(36)	(1,916,099)	(35)
Operating Income		138,998	3	374,061	7
Non-operating income and expenses	6(21)
Interest income		38,540	1	47,406	1
Other income		18,927	-	29,488	1
Other gains and losses		(1,352,947)	(26)	(32,558)	(1)
Finance costs		(60,359)	(1)	(60,516)	(1)
Total non-operating income and expenses		(1,355,839)	(26)	(16,180)	-
(Loss) Income from continuing operations before income tax		(1,216,841)	(23)	357,881	7
Income tax (expense) income	4, 6(23)	(3,208)	-	9,267	-
Net (loss) income		(1,220,049)	(23)	367,148	7
Other comprehensive (loss) income
Items that may not be reclassified subsequently to profit or loss	6(22), 6(23)
Remeasurements of defined benefit plans		12,014	-	18,964	-
Unrealized gains (losses) from investments in equity instruments
measured at fair value through other comprehensive income		698	-	(4,609)	-
Income tax related to items that may not be reclassified subsequently		(2,403)	-	(3,793)	-
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		(116,783)	(2)	185,598	3
Gains or losses on hedging instruments		73	-	728	-
Income tax related to items that may be reclassified subsequently		44,074	1	(24,607)	-
Total other comprehensive (loss) income, net of income tax		(62,327)	(1)	172,281	3
Total comprehensive (loss) income		($1,282,376)	(24)	$539,429	10
Net (loss) income attributable to:
Stockholders of the parent		$(1,220,049)		$367,148
Non-controlling interests
		($1,220,049)		$367,148
Comprehensive (loss) income attributable to:
Stockholder of the parent		$(1,282,376)		$539,429
Non-controlling interests
		($1,282,376)		$539,429
(Losses) Earnings per share (NTD)	4, 6(24)
(Losses) Earnings per share-basic		$(9.56)		$2.88
(Losses) Earnings per share-diluted		$(9.56)		$2.85

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

English Translation of the Consolidated Financial Statements Originally Issued in Chinese

GENERAL PLASTIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the Years Ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	Equity attributable to owners of parent								Total Equity
	Common Stock	Additional Paid-in Capital	Retained Earnings			Other Components of Equity
			Legal Reserve	Special Reserve	Unappropriated Earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains or Losses from Financial Assets Measured at Fair Value through Other Comprehensive Income	Gains or Losses on Hedging Instruments
Balance as of January 1, 2024	$1,275,887	$1,213,799	$582,539	$114,265	$885,403	$94,375	$(13,992)	$(759)	$4,151,517
Appropriations and distributions of earnings, 2023:			43,852		(43,852)				-
Legal reserve					(318,972)				(318,972)
Cash dividends				(114,265)	114,265				-
Reversal of special reserve					367,148				367,148
Net income in 2024					15,171	160,991	(4,609)	728	172,281
Other comprehensive income (loss), net of income tax in 2024					382,319	160,991	(4,609)	728	539,429
Total comprehensive income (loss)					$1,019,163	$255,366	$(18,601)	$(31)	$4,371,974
Balance as of December 31, 2024	$1,275,887	$1,213,799	$626,391	$-	$1,019,163	$255,366	$(18,601)	$(31)	$4,371,974
Balance as of January 1, 2025	$1,275,887	$1,213,799	$626,391	$-	$1,019,163	$255,366	$(18,601)	$(31)	$4,371,974
Appropriations and distributions of earnings, 2024:			38,232		(38,232)				-
Legal reserve					(318,972)				(318,972)
Cash dividends					(1,220,049)				(1,220,049)
Net loss in 2025					9,611	(72,709)	698	73	(62,327)
Other comprehensive income (loss), net of income tax in 2025					9,611	(72,709)	698	73	(62,327)
Total comprehensive income (loss)					9,611	(72,709)	698	73	22,770,626
Balance as of December 31, 2025	$1,275,887	$1,213,799	$664,623	$-	$(548,479)	$182,657	$(17,903)	$42	$2,770,626

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

English Translation of the Consolidated Financial Statements Originally Issued in Chinese
GENERAL PLASTIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	For the Years Ended December 31,			For the Years Ended December 31,
	2025	2024		2025	2024
Cash flows from operating activities:			Cash flows from investing activities:
Net (loss) income before tax	$(1,216,841)	$357,881	Acquisition of financial assets measured at amortized cost	$(14,604)	$(20,269)
Adjustments to reconcile net income before tax to net cash provided by (used in) operating activities:			Disposal of financial assets at amortized cost	40,922	47,240
Depreciation	230,060	216,446	Acquisition of financial assets at fair value through profit or loss	(476,905)	(505,913)
Amortization	102,774	136,749	Disposal of financial assets at fair value through profit or loss	377,561	269,798
Expected credit impairment losses	2,082	2,410	Acquisition of financial assets for hedging	(56)	-
Net loss on financial assets at fair value through profit or loss	3,305	6,833	Acquisition of property, plant and equipment	(72,148)	(232,621)
Financial costs	60,359	60,516	Decrease in refundable deposits	41,391	4,844
Interest income	(38,540)	(47,406)	Acquisition of intangible assets	(3,828)	1,413
Gain on disposal of property, plant and equipment	2,348	(1,197)	Disposal of investment property	(18,786)	(23,256)
Property, plant and equipment transferred to expenses	728	569	Increase in prepayments for equipment	(6,675)	12,829
Gain on disposal of investment property	-	(1,670)	Net cash used in investing activities	(133,128)	(456,050)
Loss on disposal of intangible assets	2,679	-	Cash flows from financing activities:
Loss on market price decline, obsolete and slow-moving inventories	28,715	21,135	Increase in short-term loans	6,340,100	7,935,704
Impairment loss on intangible assets	1,345,582	-	Decrease in short-term loans	(6,475,100)	(8,083,000)
Profit from lease modification	(59)	-	Increase in short term notes and bills payable	382,680	757,303
Changes in operating assets and liabilities:			Decrease in short term notes and bills payable	(383,666)	(837,266)
Decrease in accounts receivable and notes receivable	12,294	50,902	Increase in guaranteed deposits received	300,000	431,250
(Increase) decrease in other receivables	(7,654)	23,581	Repayments of long-term debt	(80,000)	(262,500)
Decrease (increase) decrease in inventories	50,654	(356,836)	Increase (decrease) in guaranteed deposits received	6,043	(6,729)
(Increase) decrease in prepayments	(898)	2,578	Payments of lease liabilities	(100,866)	(96,162)
Increase in other current assets	(107)	(24)	Cash dividends paid	(318,972)	(318,972)
(Increase) decrease in other non-current assets	(9,665)	4,898	Net cash used in financing activities	(329,781)	(480,372)
Decrease in derivative financial liability for hedging, current assets	(40)	(1,025)	Effect of exchange rate changes on cash and cash equivalents	56,851	(40,438)
Increase in contract liabilities	2,679	1,691	Net decrease in cash and cash equivalents	(199,820)	(458,472)
(Decrease) increase in notes payable	(733)	56	Cash and cash equivalents at beginning of period	888,081	1,346,553
(Decrease) increase in accounts payable	(158,435)	159,310	Cash and cash equivalents at end of period	$688,261	$888,081
Decrease in other payables	(29,537)	(2,983)
Increase (decrease) in provisions	6,612	(6,214)
(Decrease) increase in other current liabilities	(192)	113
Decrease in other non-current liabilities	(142)	(58)
Decrease in defined benefit liabilities	(2,699)	(1,519)
Cash generated from operations	385,329	626,736
Interest received	39,181	48,238
Interest paid	(59,832)	(60,479)
Income tax paid	(158,440)	(96,107)
Net cash generated from operating activities	206,238	518,388

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

GENERAL PLASTIC INDUSTRIAL CO., LTD. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

History and organization

GENERAL PLASTIC INDUSTRIAL CO., LTD. (“the Company”) was incorporated in July 1978. The Company is mainly engaged in manufacturing and selling of toner cartridges of photocopiers, laser printers, OPC drum gears and other related business.

The Company completed the retroactive handing of public issuance procedures with the consent of the competent securities authorities in May 2000. The Company's shares were listed on the OTC on December 25, 2001 and were listed on the Taiwan Stock Exchange on June 16, 2003. The principal place of business of the Company is located at No.50, Tzu-Chiang Rd., Wu-Chi District, Taichung City, Taiwan.

The principal operating activities of the Company and its subsidiaries (“the Group”) are set out in detail in Note 4(3).

Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Group for the years ended December 31, 2025 and 2024 were authorized for issue in accordance with a resolution of the Board of Directors’ meeting on March 12, 2026.

Newly issued or revised standards and interpretations

(1) Changes in accounting policies resulting from applying for the first-time certain standards and amendments

The Group applied for the first time International Financial Reporting Standards, International Accounting Standards, and Interpretations issued, revised or amended which are recognized by Financial Supervisory Commission (“FSC”) and become effective for annual periods beginning on or after January 1, 2025. The adoption of these new standards and amendments had no material impact on the Group.

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which have been endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 17 “Insurance Contracts”	1 January 2023
b	Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7	1 January 2026
c	Annual Improvements to IFRS Accounting Standards – Volume 11	1 January 2026
d	Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7	1 January 2026

The abovementioned standards and interpretations were issued by IASB and endorsed by FSC so that they are applicable for annual periods beginning on or after January 1, 2026. The new or amended standards and interpretations have no material impact on the Group.

(3) Standards or interpretations issued, revised or amended, by IASB which are not endorsed by FSC, but not yet adopted by the Group as at the end of the reporting period are listed below.

Items	New, Revised or Amended Standards and Interpretations	Effective Date issued by IASB
a	IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures	To be determined by IASB
b	IFRS 18 “Presentation and Disclosure in Financial Statements”	1 January 2027 (Note)
c	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)	1 January 2027
d	Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)	1 January 2027

Note: On September 25, 2025, the FSC announced in a press release that Taiwan will adopt IFRS 18 in 2028.

The abovementioned standards and interpretations issued by IASB have not yet endorsed by FSC at the date when the Group’s financial statements were authorized for issue, the local effective dates are to be determined by FSC. As the Group is still currently determining the potential impact of the new or amended standards and interpretations listed under (b), it is not practicable to estimate their impact on the Group at this point in time. The remaining new or amended standards and interpretations have no material impact on the Group.

Summary of material accounting policies

(1) Statement of compliance

The consolidated financial statements of the Group for the years ended December 31, 2025 and 2024 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (“the Regulations”) and International Financial Reporting Standards, International Accounting Standards, and Interpretations developed by the International Financial Reporting Interpretations Committee, which are endorsed and became effective by the FSC.

(2) Basis of preparation

The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments that have been measured at fair value. The consolidated financial statements are expressed in thousands of New Taiwan Dollars (“NT$”) unless otherwise stated.

(3) Basis of consolidation

Preparation principle of consolidated financial statement

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:

A. Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee).
B. Exposure, or rights, to variable returns from its involvement with the investee.
C. The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

A. The contractual arrangement with the other vote holders of the investee.
B. Rights arising from other contractual arrangements.
C. The Group’s voting rights and potential voting rights.

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

Subsidiaries are fully consolidated from the acquisition date, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using uniform accounting policies. All intra-group balances, income and expenses, unrealized gains and losses and dividends resulting from intra-group transactions are eliminated in full.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Total comprehensive income of the subsidiaries is attributed to the owners of the parent and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

If the Group loses control of a subsidiary, it:
A. Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
B. Derecognizes the carrying amount of any non-controlling interest;
C. Recognizes the fair value of the consideration received;
D. Recognizes the fair value of any investment retained;
E. Reclassifies the parent's share of components previously recognized in other comprehensive income to profit or loss, or transfer directly to retained earnings if required by other IFRSs; and
F. Recognizes any resulting difference in profit or loss.

The consolidated entities are listed as follows:

Investor	Subsidiary	Main Business	Percentage of ownership (%)
			December 31, 2025	December 31, 2024
The Company	JIOU FU CO., LTD.	Real Estate Trading and Tourist Hotel	100%	100%
The Company	GPI Co. (Samoa) Ltd.	Investment and holding	100%	100%
The Company	GPIKT DE, INC.	Investment and holding	100%	100%
The Company	GPIKT (BVI) CO., LTD.	Investment and holding	100%	100%
The Company	WEKARE CO., LTD.	Selling of medical supplies	100%	100%
The Company	TJ OFFICE SOLUTION CO., LTD.	Photocopiers rental	100%	100%
GPIKT DE, INC.	Katun Holdings, LP.	Investment and holding	100%	100%

Investor	Subsidiary	Main Business	Percentage of ownership (%)
			December 31, 2025	December 31, 2024
Katun Holdings, LP.	Katun Corporation	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Katun Corporation	Katun EuroHoldings, LLC (USA)	Investment and holding	100%	100%
Katun Corporation	Katun EuroHoldings II, LLC (USA)	Investment and holding	100%	100%
Katun Corporation	PNA Holdings Mexico, S.A. de C.V.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	98% (Note 1)	98% (Note 1)
Katun Corporation	KDM Employment Services, S.A. de C.V.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	98% (Note 2)	98% (Note 2)
Katun Corporation	Katun (Bermuda) Ltd.	Investment and holding	100%	100%
Katun Corporation	Katun Corporation Taiwan branch	RD, Procurement and Supply Planning Service	100%	100%
Katun Corporation	Katun Asia Pte Ltd. (Singapore)	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Katun Asia Pte Ltd. (Singapore)	Katun (Shanghai) Trading Co., Ltd.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Katun EuroHoldings, LLC (USA)	Coöperatieve Katun DutchHoldco U.A.	Investment and holding	65% (Note 3)	65% (Note 3)
Coöperatieve Katun DutchHoldco U.A.	Katun (E.D.C.) B.V.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Coöperatieve Katun DutchHoldco U.A.	Katun Benelux B.V.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Coöperatieve Katun DutchHoldco U.A.	Katun Germany GmbH	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Coöperatieve Katun DutchHoldco U.A.	Katun U.K. Ltd.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%

Investor	Subsidiary	Main Business	Percentage of ownership (%)
			December 31, 2025	December 31, 2024
Coöperatieve Katun DutchHoldco U.A.	Katun France S.A.R.L.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	99.8%
(Note 4)	99.8%
(Note 4)
Coöperatieve Katun DutchHoldco U.A.	Katun Spain S.A.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Coöperatieve Katun DutchHoldco U.A.	Katun Portugal S.A.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Coöperatieve Katun DutchHoldco U.A.	Katun Italy S.R.L.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	99.999%
(Note 5)	99.999%
(Note 5)
Coöperatieve Katun DutchHoldco U.A.	Katun Brasil Comercio de Suprimentos, Pecas e Equipamentos Ltda.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	99.9997%
(Note 6)	99.9997%
(Note 6)
Coöperatieve Katun DutchHoldco U.A.	Katun Switzerland AG	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	100%	100%
Katun (Bermuda) Ltd.	Katun Uruguay S.R.L.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	99.5413%
(Note 7)	99.5413%
(Note 7)
Katun (Bermuda) Ltd.	Katun Argentina SRL	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	94.1713%
(Note 8)	94.1713%
(Note 8)
Katun (Bermuda) Ltd.	Katun Delaware LLC (USA)	Investment and holding	100%	100%

Note. 1: Katun (Bermuda) Ltd. holds 2% ownership of PNA Holdings Mexico, S. A. de C.V..
Note. 2: PNA Holdings Mexico, S. A. de C.V. holds 2% ownership of KDM Employment Services, S. A. de C.V..
Note. 3: Katun EuroHoldings II, LLC (USA) holds 35% ownership of Coöperatieve Katun DutchHoldco U.A..
Note. 4: Katun (E.D.C) B.V. holds 0.2% ownership of Katun France S.A.R.L..
Note. 5: Katun Germany GmbH holds 0.001% ownership of Katun Italy S.R.L..
Note. 6: Katun Delaware LLC (USA) holds 0.0003% ownership of Katun Brasil Comercio de Suprimentos, Pecas e Equipamentos Ltda.
Note. 7: Katun Delaware LLC (USA) holds 0.4587% ownership of Katun Uruguay S.R.L..
Note. 8: Katun Delaware LLC (USA) holds 5.8287% ownership of Katun Argentina SRL.

(4) Foreign currency transactions

The Group’s consolidated financial statements are presented in NTD, which is also the Company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded by the Group entities at their respective functional currency rates prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency closing rate of exchange ruling at the reporting date. Non-monetary items measured at fair value in foreign currencies are translated using the exchange rates at the date when the fair value is determined. Non-monetary items that are measured at historical cost in foreign currencies are translated using the exchange rates as of the dates of the initial transactions.

All exchange differences arising on the settlement of monetary items or on translating monetary items are taken to profit or loss in the period in which they arise except for the following:

A. Exchange differences arising from foreign currency borrowings for an acquisition of a qualifying asset to the extent that they are regarded as an adjustment to interest costs are included in the borrowing costs that are eligible for capitalization.

B. Foreign currency items within the scope of IFRS 9 Financial Instruments are accounted for based on the accounting policy for financial instruments.

C. Exchange differences arising on a monetary item that is part of a reporting entity’s net investment in a foreign operation are recognized initially in other comprehensive income and reclassified from equity to profit or loss upon disposal of the net investment.

When a gain or loss on a non-monetary item is recognized in other comprehensive income, any exchange component of that gain or loss is recognized in other comprehensive income. When a gain or loss on a non-monetary item is recognized in profit or loss, any exchange component of that gain or loss is recognized in profit or loss.

(5) Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NTD at the closing rate of exchange prevailing at the reporting date, and their income and expenses are translated at an average exchange rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. When partial disposal involves the loss of control of a subsidiary that includes a foreign operation and when the retained interest after partial disposal of an interest in a joint venture or a partial disposal of an interest in an associate that includes a foreign operation is a financial asset that includes a foreign operation, the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss upon the disposal of a foreign operation.

On partial disposal of a subsidiary that includes a foreign operation that does not result in a loss of control, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to the non-controlling interests in that foreign operation. On partial disposal of an associate or joint venture that includes a foreign operation that does not result in a loss of significant influence or joint control, only the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is reclassified to profit or loss.

Any goodwill and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and expressed in its functional currency.

(6) Current and non-current distinction

An asset is classified as current when:

A. The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
B. The Group holds the asset primarily for the purpose of trading;
C. The Group expects to realize the asset within twelve months after the reporting period;
D. The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

A. The Group expects to settle the liability in its normal operating cycle;
B. The Group holds the liability primarily for the purpose of trading;
C. The liability is due to be settled within twelve months after the reporting period;
D. The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

(7) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid time deposits or investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

(8) Financial instruments

Financial assets and financial liabilities are recognized when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities within the scope of IFRS 9 Financial Instruments are recognized initially at fair value plus or minus, in the case of a financial asset or financial liability not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial assets or financial liabilities.

A. Financial instruments: Recognition and Measurement

The Group accounts for regular way purchase or sales of financial assets on the trade date.

The Group classified financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or fair value through profit or loss considering both factors below:

(a) the Group’s business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.

Financial assets measured at amortized cost

A financial asset is measured at amortized cost if both of the following conditions are met and presented as notes receivable, accounts receivable financial assets measured at amortized cost and other receivables etc., on balance sheet as at the reporting date:

(a) the financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are subsequently measured at amortized cost (the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus or minus the cumulative amortization using the effective interest method of any difference between the initial amount and the maturity amount and adjusted for any loss allowance) and is not part of a hedging relationship. A gain or loss is recognized in profit or loss when the financial asset is derecognized, through the amortization process or in order to recognize the impairment gains or losses.

Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(a) purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(b) financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Financial asset measured at fair value through other comprehensive income

A financial asset is measured at fair value through other comprehensive income if both of the following conditions are met:

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and
(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Recognition of gain or loss on a financial asset measured at fair value through other comprehensive income are described as below:

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.
(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.
(c) Interest revenue is calculated by using the effective interest method. This is calculated by applying the effective interest rate to the gross carrying amount of a financial asset except for:

(i) Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.
(ii) Financial assets that are not purchased or originated credit-impaired financial assets but subsequently have become credit-impaired financial assets. For those financial assets, the Group applies the effective interest rate to the amortized cost of the financial asset in subsequent reporting periods.

Besides, for certain equity investments within the scope of IFRS 9 that is neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group made an irrevocable election to present the changes of the fair value in other comprehensive income at initial recognition. Amounts presented in other comprehensive income shall not be subsequently transferred to profit or loss (when disposal of such equity instrument, its cumulated amount included in other components of equity is transferred directly to the retained earnings) and these investments should be presented as financial assets measured at fair value through other comprehensive income on the balance sheet. Dividends on such investment are recognized in profit or loss unless the dividends clearly represent a recovery of part of the cost of investment.

Financial asset measured at fair value through profit or loss

Financial assets were classified as measured at amortized cost or measured at fair value through other comprehensive income based on aforementioned criteria. All other financial assets were measured at fair value through profit or loss and presented on the balance sheet as financial assets measured at fair value through profit or loss.

Such financial assets are measured at fair value, the gains or losses resulting from remeasurement is recognized in profit or loss which includes any dividend or interest received on such financial assets.

B. Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost.

The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the balance sheet.

The Group measures expected credit losses of a financial instrument in a way that reflects:

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;
(b) the time value of money; and
(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measures as follows:

(a) At an amount equal to 12-month expected credit losses: the credit risk on a financial asset has not increased significantly since initial recognition or the financial asset is determined to have low credit risk at the reporting date. In addition, the Group measures the loss allowance at an amount equal to lifetime expected credit losses in the previous reporting period, but determines at the current reporting date that the credit risk on a financial asset has increased significantly since initial recognition is no longer met.

(b) At an amount equal to the lifetime expected credit losses: the credit risk on a financial asset has increased significantly since initial recognition or financial asset that is purchased or originated credit-impaired financial asset.

(c) For accounts receivable or contract assets arising from transactions within the scope of IFRS 15, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

(d) For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to lifetime expected credit losses.

At each reporting date, the Group needs to assess whether the credit risk on a financial asset has increased significantly since initial recognition by comparing the risk of a default occurring at the reporting date and the risk of default occurring at initial recognition. Please refer to Note 12 for further details on credit risk.

C. Derecognition of financial assets

A financial asset is derecognized when:

(a) The rights to receive cash flows from the asset have expired;

(b) The Group has transferred the asset and substantially all the risks and rewards of the asset have been transferred;

(c) The Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

On derecognition of a financial asset in its entirety, the difference between the carrying amount and the consideration received or receivable including any cumulative gain or loss that had been recognized in other comprehensive income, is recognized in profit or loss.

D. Financial liabilities and equity

Classification between liabilities or equity

The Group classifies the instrument issued as a financial liability or an equity instrument in accordance with the substance of the contractual arrangement and the definitions of a financial liability, and an equity instrument.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. The transaction costs of an equity transaction are accounted for as a deduction from equity (net of any related income tax benefit) to the extent they are incremental costs directly attributable to the equity transaction that otherwise would have been avoided.

Financial liabilities

Financial liabilities within the scope of IFRS 9 Financial Instruments are classified as financial liabilities at fair value through profit or loss or financial liabilities measured at amortized cost upon initial recognition.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated as at fair value through profit or loss. A financial liability is classified as held for trading if:

(a) It is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;
(b) On initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or
(c) It is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

If a contract contains one or more embedded derivatives, the entire hybrid (combined) contract may be designated as a financial liability at fair value through profit or loss; or a financial liability may be designated as at fair value through profit or loss when doing so results in more relevant information, because either:

(a) It eliminates or significantly reduces a measurement or recognition inconsistency; or
(b) A group of financial liabilities or financial assets and financial liabilities is managed and its performance is evaluated on a fair value basis, in accordance with a documented risk management or investment strategy, and information about the group is provided internally on that basis to the key management personnel.

Gains or losses on the subsequent measurement of liabilities at fair value through profit or loss including interest paid are recognized in profit or loss.

Financial liabilities at amortized cost

Financial liabilities measured at amortized cost include interest bearing loans and borrowings that are subsequently measured using the effective interest rate method after initial recognition. Gains and losses are recognized in profit or loss when the liabilities are derecognized as well as through the effective interest rate method amortization process.

Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or transaction costs.

Derecognition of financial liabilities

A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires.

When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified (whether or not attributable to the financial difficulty of the debtor), such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts and the consideration paid or payable, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the balance sheet if, and only if, there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle the liabilities simultaneously.

(9) Derivative instrument

The Group uses derivative instruments to hedge its foreign currency risks and interest rate risks. A derivative is classified in the balance sheet as financial assets or liabilities at fair value through profit or loss except for derivatives that are designated as and effective hedging instruments which are classified as financial assets or liabilities for hedging.

Derivative instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The changes in fair value of derivatives are taken directly to profit or loss, except for the effective portion of hedges, which is recognized in either profit or loss or equity according to types of hedges used.

The Group’s expecting transaction complies with cash flow hedge. For the effective portion of the hedge, changes in the fair value of the hedging instrument are recognized in other comprehensive income. For the ineffective portion of the hedge, changes in the fair value of the hedging instrument (if any) is recognized directly in profit or loss.

The accumulated gains and losses recorded in equity should be reclassified to profit or loss in the same period or periods when the hedged expected future cash flows affect profit or loss. A hedged forecast transaction for a non-financial asset or a nonfinancial liability for which fair value hedge accounting is applied, the carrying value of that item must be adjusted for the accumulated gains or losses recognized directly in equity.

When a forecast transaction or a firm commitment is expected not to occur, the accumulated gain or loss under equity needs to be reclassified to profit or loss. If the hedging instrument has been sold, terminated, canceled, or implemented and not replaced or extended, or the originally designated risk management objective has been canceled, the amount recognized under equity should be put in equity before the forecast transaction or a firm commitment affect profit or loss.

(10) Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

A. In the principal market for the asset or liability, or
B. In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible to by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants in their economic best interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

(11) Inventories

The inventory value includes costs incurred in bringing the inventory to its present location and condition. Raw materials and goods are stated at weighted average of actual purchase costs; finished goods and work in progress are stated at the cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity. Inventories are valued at lower of cost and net realizable value item by item. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. Allowance is also estimated and recognized appropriately for slow moving and damaged inventories.

Rendering of services is accounted in accordance with IFRS 15 and not within the scope of inventories.

(12) Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of dismantling and removing the item and restoring the site on which it is located and borrowing costs for construction in progress if the recognition criteria are met. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. When significant parts of property, plant and equipment are required to be replaced in intervals, the Group recognizes such parts as individual assets with specific useful lives and depreciation, respectively. The carrying amount of those parts that are replaced is derecognized in accordance with the derecognition provisions of IAS 16 Property, plant and equipment. When a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in profit or loss as incurred.

Depreciation is calculated on a straight-line basis over the estimated useful lives of the following assets:

Item	Estimated useful lives
Buildings	5~50 years
Machinery and equipment	2~20 years
Transportation equipment	4~12 years
Office equipment	2~15 years
Other equipment	2~12 years

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising from derecognition of the asset is recognized in profit or loss.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate. The differences resulted from previous estimation are regarded as changes in accounting estimates.

(13) Investment property

The Group’s owned investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment property at the time that cost is incurred if the recognition criteria are met and excludes the costs of day-to-day servicing of an investment property. Subsequent to initial recognition, other than those that meet the criteria to be classified as held for sale (or are included in a disposal group that is classified as held for sale) in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations, investment properties are measured using the cost model in accordance with the requirements of IAS 16 Property, plant and equipment for that model. If investment properties are held by a lessee as right-of-use assets and is not held for sale in accordance with IFRS 5, investment properties are measured in accordance with the requirements of IFRS 16.

Depreciation is calculated on a straight-line basis over the estimated economic lives of the following assets:

Item	Estimated useful lives
Buildings	5~35 years

Investment properties are derecognized when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss in the period of derecognition.

The Group transfers to or from investment properties when there is a change in use for these assets. Properties are transferred to or from investment properties when the properties meet, or cease to meet, the definition of investment property and there is evidence of the change in use.

(14) Leases

The Group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset for a period of time, the Group assesses whether, throughout the period of use, has both of the following:

A. the right to obtain substantially all of the economic benefits from use of the identified asset; and
B. the right to direct the use of the identified asset.

For a contract that is, or contains, a lease, the Group accounts for each lease component within the contract as a lease separately from non-lease components of the contract. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components. The relative stand-alone price of lease and non-lease components shall be determined on the basis of the price the lessor, or a similar supplier, would charge the Group for that component, or a similar component, separately. If an observable stand-alone price is not readily available, the Group estimates the stand-alone price, maximising the use of observable information.

The Group as a lessee

Except for leases that meet and elect short-term leases or leases of low-value assets, the Group recognizes right-of-use asset and lease liability for all leases which the Group is the lessee of those lease contracts.

At the commencement date, the Group measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses its incremental borrowing rate. At the commencement date, the lease payments included in the measurement of the lease liability comprise the following payments for the right to use the underlying asset during the lease term that are not paid at the commencement date:

A. fixed payments (including in-substance fixed payments), less any lease incentives receivable;
B. variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
C. amounts expected to be payable by the lessee under residual value guarantees;
D. the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
E. payments of penalties for terminating the lease, if the lease term reflects the lessee exercising an option to terminate the lease.

After the commencement date, the Group measures the lease liability on an amortised cost basis, which increases the carrying amount to reflect interest on the lease liability by using an effective interest method; and reduces the carrying amount to reflect the lease payments made.

At the commencement date, the Group measures the right-of-use asset at cost. The cost of the right-of-use asset comprises:

A. the amount of the initial measurement of the lease liability;
B. any lease payments made at or before the commencement date, less any lease incentives received;
C. any initial direct costs incurred by the lessee; and
D. an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

For subsequent measurement of the right-of-use asset, the Group measures the right-of-use asset at cost less any accumulated depreciation and any accumulated impairment losses. That is, the Group measures the right-of-use applying a cost model.

If the lease transfers ownership of the underlying asset to the Group by the end of the lease term or if the cost of the right-of-use asset reflects that the Group will exercise a purchase option, the Group depreciates the right-of-use asset from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use asset from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term.

The Group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.

Except for those leases that the Group accounted for as short-term leases or leases of low-value assets, the Group presents right-of-use assets and lease liabilities in the balance sheet and separately presents lease-related interest expense and depreciation charge in the statements of comprehensive income.

For short-term leases or leases of low-value assets, the Group elects to recognize the lease payments associated with those leases as an expense on either a straight-line basis over the lease term or another systematic basis.

The Group as a lessor

At inception of a contract, the Group classifies each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset. At the commencement date, the Group recognizes assets held under a finance lease in its balance sheet and present them as a receivable at an amount equal to the net investment in the lease.

For a contract that contains lease components and non-lease components, the Group allocates the consideration in the contract applying IFRS 15.

The Group recognizes lease payments from operating leases as rental income on either a straight-line basis or another systematic basis. Variable lease payments for operating leases that do not depend on an index or a rate are recognized as rental income when incurred.

(15) Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is its fair value as of the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets which fail to meet the recognition criteria are not capitalized and expenditure are reflected in profit or loss in the period incurred.

The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite useful lives are amortized over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each fiscal year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate, and is treated as changes in accounting estimates.

Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the cash-generating unit (CGU) level. The assessment of indefinite useful life is reviewed annually to determine whether the indefinite useful life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from derecognition of an intangible asset are recognized in profit or loss.

Accounting policies of the Group’s intangible assets are summarized as follows:

	Computer software	Customer Relationships	Trademarks	Patents	Goodwill
Useful lives	1~10 years	10 years	11 years	6~ 26 years	Indefinite
Method of Amortization	Amortized on a straight-line basis	Amortized on a straight-line basis	Amortized on a straight-line basis	Amortized on a straight-line basis	No amortization
Acquired from	Exterally acquired/ Internally generated	Exterally acquired	Exterally acquired	Exterally acquired	Exterally acquired

(16) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group completes impairment testing for an individual asset or the CGU to which the individual assets belong. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use.

For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognized impairment loss is reversed only if there has been an increase in the estimated service potential of an asset which in turn increases the recoverable amount. However, the reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years.

A cash generating unit, or groups of cash-generating units, to which goodwill has been allocated is tested for impairment annually at the same time, irrespective of whether there is any indication of impairment. If an impairment loss is to be recognized, it is first allocated to reduce the carrying amount of any goodwill allocated to the cash generating unit (group of units), then to the other assets of the unit (group of units) pro rata on the basis of the carrying amount of each asset in the unit (group of units). Impairment losses relating to goodwill cannot be reversed in future periods for any reason.

An impairment loss of continuing operations or a reversal of such impairment loss is recognized in profit or loss.

(17) Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probably that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.

The liability to pay a levy is recognized progressively if the obligating event occurs over a period of time.

Provision for warranties

A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgement and other known factors.

(18) Revenue recognition

The Group’s revenue being recognized when control of the products or rendering of services is transferred to the customers to satisfy the performance obligation. The accounting policies are explained as follows:

Sale of goods

The Group manufactures and sells goods. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers (i.e. when the customer has the ability to direct the use of, and obtain substantially all of the remaining benefits from the goods). The Group estimates the discounts using the expected value method based on historical experiences. Revenue is only recognized to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur and when the uncertainty associated with the variable consideration is subsequently resolved. During the period specified in the contract, refund liability is recognized for the expected volume discounts.

The Group provides its customer with a warranty with the purchase of the products. The warranty provides assurance that the products will operate as expected by the customers. And the warranty is accounted in accordance with IAS 37.

When another party is involved in providing goods or services to customers, if the Group controls the goods or services promised to customers before the transfer, it acts as a principal; if the Group’s performance obligation is to arrange for the goods or services provided by another party, it acts as an agent. When acting as a principal, the Group recognizes as revenue the total amount of consideration to which it expects to be entitled from transferring the goods or services; when acting as an agent, the Group recognizes as revenue the amount of any fee or commission to which it expects to be entitled from providing the goods or services. The fee or commission of the Group may be the net amount of consideration, which represents the amount retained by the Group after paying the other party for the goods or services.

The credit period of the Group’s sale of goods is from 30 to 180 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The Group usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. For some of the contracts, the Group has transferred the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be pre-sented as contract assets. Besides, in accordance with IFRS 9, the Group measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses. For certain contracts, as the Group receives a portion of the consideration from customers in advance upon contract signing and is obligated to provide services subsequently, such amounts are recognized as contract liabilities.

Other operating revenues

The Group provides rooms, catering and other related services and acknowledges the revenues when providing services or sales to customers. Contractual assets are included when the services provided by the Group exceed the amount payable by the client, if payments due by customers in excess of the services provided by the Group are classified as contractual liabilities.

A. Room accommodation is recognized as revenue during the financial reporting period in which the service is provided to the customer. The customer pays the contract price according to the agreed payment schedule.
B. Catering services are recognized when food and beverages are sold to customers. The transaction price of the catering service is charged to the customer immediately upon purchase of the catering service.

C. Others are recognized when all or most of the profit-making process has been completed and realized or can be realized, and the relevant costs are recognized according to the principle of matching revenue.

In the contract signed by the Group with the customer. The period between the transfers of products or services and collects the payments is no longer than one year; therefore, there is no significant financing component to the accounts receivable.

(19) Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

(20) Government grants

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. Where the grant relates to an asset, it is recognized as deferred income and released to income in equal amounts over the expected useful life of the related asset. When the grant relates to an expense item, it is recognized as income over the period necessary to match the grant on a systematic basis to the costs that it is intended to compensate.

(21) Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to a pension plan that is managed by an independently administered pension fund committee. Fund assets are deposited under the committee's name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore, fund assets are not included in the consolidated financial statements. Pension benefits for employees of the overseas subsidiaries and the branches are provided in accordance with the respective local regulations.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution and recognize expenses for the current period of no less than 6% of the monthly wages of the employees subject to the plan. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

Post-employment benefit plan that is classified as a defined benefit plan uses the Projected Unit Credit Method to measure its obligations and costs based on actuarial assumptions. Re-measurements, comprising of the effect of the actuarial gains and losses, the effect of the asset ceiling (excluding net interest) and the return on plan assets, excluding net interest, are recognized as other comprehensive income with a corresponding debit or credit to retained earnings in the period in which they occur. Past service costs are recognized in profit or loss on the earlier of:

A. The date of the plan amendment or curtailment, and
B. The date that the Group recognizes restructuring-related costs

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability (asset) during the period as a result of contribution and benefit payment.

(22) Income taxes

Income tax expense (income) is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.

Current income tax

Current income tax assets and liabilities for the current and prior periods are measured using the tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Current income tax relating to items recognized in other comprehensive income or directly in equity is recognized in other comprehensive income or equity and not in profit or loss.

The income tax for undistributed earnings is recognized as income tax expense in the subsequent year when the distribution proposal is approved by the Shareholders' meeting.

Deferred income tax

Deferred income tax is provided on temporary differences between the tax bases of assets and liabilities and their carrying amounts in financial statement at the reporting date.

Deferred tax liabilities are recognized for all taxable temporary differences, except:

A. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.

B. In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carryforward of unused tax credits and unused tax losses can be utilized, except:

A. Where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination; at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; and at the time of the transaction, does not give rise to equal taxable and deductible temporary differences.

B. In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

(23) Business combinations and goodwill

Business combinations are accounted for using the acquisition method. The consideration transferred, the identifiable assets acquired and liabilities assumed are measured at acquisition date fair value. For each business combination, the acquirer measures any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are accounted for as expenses in the periods in which the costs are incurred and are classified under administrative expenses.

When the Group acquires a business, it assesses the assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any contingent consideration to be transferred by the acquirer will be recognized at the acquisition-date fair value. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance with IFRS 9 Financial Instruments either in profit or loss or as a change to other comprehensive income. However, if the contingent consideration is classified as equity, it should not be remeasured until it is finally settled within equity.

Goodwill is initially measured as the amount of the excess of the aggregate of the consideration transferred and the non-controlling interest over the net fair value of the identifiable assets acquired and the liabilities assumed. If this aggregate is lower than the fair value of the net assets acquired, the difference is recognized in profit or loss.

After initial recognition, goodwill is measured at cost less any accumulated impairment losses.

When disposing a cash-generating unit to which goodwill has been allocated, the carrying amount of the disposed unit shall include the goodwill associated with the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation being disposed of and the portion of the cash-generating unit retained.

Significant accounting judgements, estimates and assumptions

The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and assumptions at the end of the reporting period that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities. However, uncertainty about these assumption and estimate could result in outcomes that require a material adjustment to the carrying amount of the asset or liability affected in future periods.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that would have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fiscal year are discussed below.

A. Impairment of goodwill

An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs to sell and its value in use. The fair value less costs to sell calculation is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date less incremental costs that would be directly attributable to the disposal of the asset or cash generating unit. The value in use calculation is based on a discounted cash flow model. The cash flows projections are derived from the budget for the next five years and do not include restructuring activities that the Group is not yet committed to or significant future investments that will enhance the asset’s performance of the cash generating unit being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. The key assumptions used to determine the recoverable amount for the different cash generating units, including a sensitivity analysis, are further explained in Note 6.

B. Income tax

Uncertainties exist with respect to the interpretation of complex tax regulations and the amount and timing of future taxable income. Given the wide range of international business relationships and the long-term nature and complexity of existing contractual agreements, differences arising between the actual results and the assumptions made, or future changes to such assumptions, could necessitate future adjustments to tax income and expense already recorded. The Group establishes provisions, based on reasonable estimates, for possible consequences of audits by the tax authorities of the respective counties in which it operates. The amount of such provisions is based on various factors, such as experience of previous tax audits and differing interpretations of tax regulations by the taxable entity and the responsible tax authority. Such differences of interpretation may arise on a wide variety of issues depending on the conditions prevailing in the respective Group entities' domicile.

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies.

C. Accounts receivable - estimation of impairment loss

The Group estimates the impairment loss of accounts receivable at an amount equal to lifetime expected credit losses. The credit loss is the present value of the difference between the contractual cash flows that are due under the contract (carrying amount) and the cash flows that are expected to receive (by evaluating forward looking information). However, as the impact from the discounting of short-term receivables is not material, the credit loss is measured by the undiscounted cash flows. Please refer to Note 6 for more details.

D. Inventory valuation

Estimates of net realizable value of inventories take into consideration that inventories may be damaged, become wholly or partially obsolete, or their selling prices have declined. The estimates are based on the most reliable evidence available at the time the estimates are made. Please refer to Note 6 for more details.

Contents of significant accounts

(1) Cash and cash equivalents

	As of December 31
	2025	2024
Checking and savings accounts	$687,631	$887,392
Cash on hand	630	689
Total	$688,261	$888,081

The contract will expire within 3 months and it must be readily convertible to a known amount of cash and be subject to an insignificant risk of changes in value.

The aforementioned cash and cash equivalents were not pledged.

(2) Financial assets at fair value through profit or loss-current

	As of December 31
	2025	2024
Mandatorily measured at fair value through profit or loss:
Corporate bonds	$546,154	$371,937
Fund beneficiary certificate	-	97,476
Total	$546,154	$469,413

Financial assets at fair value through profit or loss were not pledged.

(3) Financial assets measured at amortized cost

	As of December 31
	2025	2024
Bank deposits - time deposits (more than three months)	$-	$30,000
Other receivables - pledged	14,445	11,120
Total	$14,445	$41,120
Current	$4,843	$32,249
Non-current	9,602	8,871
Total	$14,445	$41,120

As of December 31, 2025 and 2024, the Group had bank deposits of NT$14,445 thousand and NT$11,120 thousand, respectively, pledged to the banks as collateral. Please refer to Note 8 for more details on pledged assets and Note 12 for more details on credit risk.

(4) Accounts receivable and expected credit impairment losses

A. Accounts receivable

	As of December 31
	2025	2024
Accounts receivable	$807,473	$852,338
Less: loss allowance	(47,626)	(49,514)
Subtotal	759,847	802,824
Accounts receivable -related parties	-	-
Total	$759,847	$802,824

Accounts receivable were not pledged.

The Group’s collection period typically ranges from 30 to 120 days. The total carrying amount as of December 31, 2025 and 2024 were NT$807,473 thousand and NT$852,338 thousand, respectively. Please refer to Note 12 for more details on credit risk.

B. Expected credit impairment losses

	For the years ended December 31
	2025	2024
Operating expense- expected credit impairment losses
Accounts receivable	$2,082	$2,410

The Group measures the loss allowance of its receivables (including notes receivable and accounts receivable) based on the lifetime expected credit losses. The assessment of the loss allowance is as follows:

(a) As of December 31, 2025

i. The gross carrying amount and the fully recognized loss allowance assessed individually for counterparties in certain regions were both NT$17,295 thousand.

ii. Matrix to measure credit losses:

	Not yet due (Note)	Overdue
		<=30 days	31-60 days	61-90 days	91-120days	>=121 days	Total
Gross carrying amount	$653,819	$65,241	$20,084	$14,303	$7,961	$28,981	$790,389
Loss ratio	0.44%~0.46%	0.46%~2.52%	0.46%~24.36%	0.46%~72.73%	0.46%~82.05%	87.61%~100%
Lifetime expected credit losses	(3,016)	(489)	(787)	(377)	(38)	(25,624)	(30,331)
Carrying amount	$650,803	$64,752	$19,297	$13,926	$7,923	$3,357	$760,058

Note: The Group’s notes receivable are not overdue.

(b) As of December 31, 2024

i. The gross carrying amount and the fully recognized loss allowance assessed individually for counterparties in certain regions were both NT$17,098 thousand.

ii. Matrix to measure credit losses:

	Not yet due (Note)	Overdue
		<=30 days	31-60 days	61-90 days	91-120days	>=121 days	Total
Gross carrying amount	$696,466	$68,891	$23,345	$11,395	$7,124	$28,715	$835,936
Loss ratio	0.11%~0.12%	0.12%~1.30%	0.12%~26.78%	0.12%~72.74%	0.12%~100%	100%
Lifetime expected credit losses	(843)	(196)	(1,791)	(862)	(9)	(28,715)	(32,416)
Carrying amount	$695,623	$68,695	$21,554	$10,533	$7,115	$-	$803,520

Note: The Group’s notes receivable are not overdue.

The movement in the provision for impairment of notes receivable and accounts receivable for the years ended of December 31, 2025 and 2024 were as follows:

	Notes receivable	Accounts receivable
January 1, 2025	$-	$49,514
Additions for the current period	-	2,082
Written off as uncollectible	-	(7,149)
Effect of exchange rate changes	-	3,179
December 31, 2025	$-	$47,626
January 1, 2024	$-	$57,864
Additions for the current period	-	2,410
Written off as uncollectible	-	(6,681)
Effect of exchange rate changes	-	(4,079)
December 31, 2024	$-	$49,514

(5) Inventories

	As of December 31
	2025	2024
Merchandises	$1,081,829	$1,182,828
Raw materials	90,680	104,925
Finished goods	36,087	43,104
Work in progress	17,985	29,176
Total	$1,226,581	$1,360,033
	For the years ended December 31
	2025	2024
Recognized as cost of inventories sold
Cost of inventories	$3,161,733	$3,164,847
Loss on scrapped inventories	31,867	15,618
Loss on market price decline, obsolete and slow-moving inventories	28,715	21,135
Gain on inventory surplus	(2,152)	(3,321)

No inventories were pledged.

(6) Financial assets measured at fair value through other comprehensive income

	As of December 31
	2025	2024
Investments in equity instruments measured at fair value through other comprehensive income, non-current:
Unlisted stocks	$101,341	$105,717

Financial assets measured at fair value through other comprehensive income were not pledged.

(7) Property, plant and equipment

	As of December 31
	2025	2024
Owner occupied property, plant and equipment	$2,006,503	$2,083,013

	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Other equipment	Construction in progress and equipment awaiting inspection	Total
Cost:
As of January 1, 2025	$817,476	$1,445,618	$299,518	$36,140	$266,098	$250,743	$217	$3,115,810
Additions	-	10,674	13,892	2,608	15,712	27,450	240	70,576
Disposals	-	(37,144)	(12,934)	(308)	(16,156)	(8,657)	-	(75,199)
Transfers	-	217	1,071	(1)	(1)	9,372	(217)	10,441
Effect of exchange rate changes	-	(1,789)	(198)	583	(838)	603	-	(1,639)
As of December 31, 2025	$817,476	$1,417,576	$301,349	$39,022	$264,815	$279,511	$240	$3,119,989
Depreciation and impairment:
As of January 1, 2025	$-	$437,159	$265,883	$20,296	$164,668	$144,791	$-	$1,032,797
Depreciation	-	38,931	13,215	4,145	26,727	31,541	-	114,559
Disposals	-	(6,754)	(12,302)	(259)	(7,009)	(5,136)	-	(31,460)
Effect of exchange rate changes	-	(119)	(160)	267	(2,271)	(127)	-	(2,410)
As of December 31, 2025	$-	$469,217	$266,636	$24,449	$182,115	$171,069	$-	$1,113,486

	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Other equipment	Construction in progress and equipment awaiting inspection	Total
Cost:
As of January 1, 2024	$817,476	$862,876	$305,538	$29,720	$219,642	$204,417	$451,377	$2,891,046
Additions	-	115,906	7,347	7,885	44,845	31,870	217	208,070
Disposals	-	-	(13,650)	(1,099)	(10,306)	(727)	-	(25,782)
Transfers	-	464,588	38	-	4,835	13,082	(450,715)	31,828
Effect of exchange rate changes	-	2,248	245	(366)	7,082	2,101	(662)	10,648
As of December 31, 2024	$817,476	$1,445,618	$299,518	$36,140	$266,098	$250,743	$217	$3,115,810
Depreciation and impairment:
As of January 1, 2024	$-	$405,514	$265,895	$18,416	$142,488	$115,935	$-	$948,248
Depreciation	-	31,557	13,410	3,119	23,439	29,103	-	100,628
Disposals	-	-	(13,613)	(1,049)	(6,746)	(727)	-	(22,135)
Effect of exchange rate changes	-	88	191	(190)	5,487	480	-	6,056
As of December 31, 2024	$-	$437,159	$265,883	$20,296	$164,668	$144,791	$-	$1,032,797
Net carrying amount:
As of December 31, 2025	$817,476	$948,359	$34,713	$14,573	$82,700	$108,442	$240	$2,006,503
As of December 31, 2024	$817,476	$1,008,459	$33,635	$15,844	$101,430	$105,952	$217	$2,083,013

A. Components of buildings that have different useful lives are the main building structure, utility and structure reinforcement constructions and others, which are depreciated over 50 years, 10 years and 15 years, respectively.

B. Capitalized interest payments and interest rate of property, plant and equipment

	For the years ended December 31
	2025	2024
Capitalized interest payments	$ -	$3,761
Capitalized interest rate	-	1.823%

Please refer to Note 8 for details of property, plant and equipment pledged as collateral.

(8) Investment property

The Group’s investment properties are owned investment properties. The Group has entered into commercial property leases on its owned investment properties. These leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

	Land	Buildings	Total
Cost:
As of January 1, 2025	$354,491	$149,793	$504,284
Effect of exchange rate changes	(14,111)	(6,200)	(20,311)
As of December 31, 2025	$340,380	$143,593	$483,973
Depreciation and impairment:
As of January 1, 2025	$-	$119,401	$119,401
Depreciation	-	9,362	9,362
Effect of exchange rate changes	-	(4,852)	(4,852)
As of December 31, 2025	$-	$123,911	$123,911

	Land	Buildings	Total
Cost:
As of January 1, 2024	$337,345	$149,095	$486,440
Disposals	(4,724)	(9,228)	(13,952)
Effect of exchange rate changes	21,870	9,926	31,796
As of December 31, 2024	$354,491	$149,793	$504,284
Depreciation and impairment:
As of January 1, 2024	$-	$104,718	$104,718
Depreciation	-	10,218	10,218
Disposals	-	(2,793)	(2,793)
Effect of exchange rate changes	-	7,258	7,258
As of December 31, 2024	$-	$119,401	$119,401
Net carrying amount:
As of December 31, 2025	$340,380	$19,682	$360,062
As of December 31, 2024	$354,491	$30,392	$384,883

A. The Group has entered into commercial property leases on its investment properties with terms of 3 years. These leases include a clause to enable upward revision of the rental charge on an annual basis according to prevailing market conditions.

	For the years ended December 31
	2025	2024
Rental income from investment property	$9,231	$13,472
Less:
Direct operating expenses from investment property generating rental income	(3,317)	(88)
Direct operating expenses from investment property not generating rental income	(79)	(24)
Total	$5,835	$13,360

B. As of December 31, 2025 and 2024, GPI Co. (Samoa) Ltd. (“Samoa”), a subsidiary of the Company, owned land amounting to USD 10,413,773 in both years, and buildings amounting to USD 627,199 and USD 928,410, respectively, which were registered in the name of Wang Kuoying, who has Cambodian nationality, as the real estate buyer and registered owner. Thus, both parties have entered into an agreement to register real estate under other’s names to bind their rights and obligations. Mr. Wang Kuoying has also signed a waiver to relinquish ownership of the land, housing and buildings.

C. Investment properties held by the Group are not measured at fair value but for which the fair value are disclosed. The fair value measurements of the investment properties are categorized at Level 3. The fair value has been determined based on valuations performed by an independent appraiser and measured via Comparison Method, Land Development Analysis Approach and Income Approach. As of December 31, 2025 and 2024, the Group’s investment properties amounted to NT$1,417,619 thousand and NT$1,472,853 thousand, respectively.

D. No investment property was pledged.

(9) Intangible assets

	Computer software	Customer relationships	Trademarks and trade names	Patent	Other intangible assets	Total
Cost:
As of January 1, 2025	$278,766	$677,307	$539,040	$10,976	$7,500	$1,513,589
Additions	18,683	-	-	103	-	18,786
Disposals	(12,259)	-	-	(2,309)	-	(14,568)
Transfers	-	-	-	749	-	749
Effect of exchange rate changes	(5,361)	(28,036)	(22,235)	-	-	(55,632)
As of December 31, 2025	$279,829	$649,271	$516,805	$9,519	$7,500	$1,462,924
Amortization and impairment:
As of January 1, 2025	$199,247	$476,193	$342,646	$4,241	$7,500	$1,029,827
Amortization	16,334	50,352	35,468	620	-	102,774
Disposals	(10,691)	-	-	(1,198)	-	(11,889)
Impairment	-	140,603	150,595	-	-	291,198
Effect of exchange rate changes	(3,816)	(17,877)	(12,340)	-	-	(34,033)
As of December 31, 2025	$201,074	$649,271	$516,369	$3,663	$7,500	$1,377,877

	Computer software	Customer relationships	Trademarks and trade names	Patent	Other intangible assets	Total
Cost:
As of January 1, 2024	$235,497	$634,270	$504,908	$10,051	$7,500	$1,392,226
Additions	23,058	-	-	198	-	23,256
Disposals	(405)	-	-	-	-	(405)
Transfers	12,715	-	-	727	-	13,442
Effect of exchange rate changes	7,901	43,037	34,132	-	-	85,070
As of December 31, 2024	$278,766	$677,307	$539,040	$10,976	$7,500	$1,513,589
Amortization and impairment:
As of January 1, 2024	$175,696	$379,720	$274,344	$3,599	$7,500	$840,859
Amortization	18,052	69,282	48,773	642	-	136,749
Disposals	(405)	-	-	-	-	(405)
Effect of exchange rate changes	5,904	27,191	19,529	-	-	52,624
As of December 31, 2024	$199,247	$476,193	$342,646	$4,241	$7,500	$1,029,827
Net carrying amount:
As of December 31, 2025	$78,755	$-	$436	$5,856	$-	$85,047
As of December 31, 2024	$79,519	$201,114	$196,394	$6,735	$-	$483,762

Please refer to Note 6(20) for recognition of amortization expenses of intangible assets.

(10) Goodwill

For impairment testing, the book value of goodwill cash generating units acquired through business combination is as follows:

	For the years ended December 31
	2025	2024
Opening balance	$1,110,475	$1,039,915
Impairment losses	(1,054,384)	-
Effect of exchange rate changes	(56,091)	70,560
Closing balance	$-	$1,110,475

Katun Holdings, LP’s cash generating unit

In accordance with IAS 36, the Group conducts an annual impairment assessment of goodwill acquired in business combinations by determining the recoverable amount of the related cash-generating units. As the development of Katun’s proprietary brand did not perform as expected, the recoverable amount of the Group, determined based on value in use, was lower than its carrying amount as of December 31, 2025. Accordingly, the Group recognized an impairment loss of NT$1,345,582 thousand during the current year, including NT$291,198 thousand for intangible assets and NT$1,054,384 thousand for goodwill. The recoverable amount was determined based on value in use, calculated using estimated future cash flows based on management’s approved five-year financial forecasts, and discounted using a pre-tax discount rate of 16.8%, reflecting the specific risks of the relevant cash-generating units.

Key assumptions used in value-in-use calculations

The calculation of value-in-use for unit is most sensitive to the following assumptions:

A. Gross margin
B. Discount rates
C. Market share during the budget period
D. Growth rate used to extrapolate cash flows beyond the budget period

Gross margins – Gross margins are based on average values achieved in the five years preceding the start of the budget period.

Discount rates – Discount rates reflect the current market assessment of the risks specific to each cash-generating unit (including the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted). The discount rate was estimated based on the weighted average cost of capital (WACC) for the Group, taking into account the particular situations of the Group and its operating segments. The WACC includes both the cost of liabilities and cost of equities. The cost of equities is derived from the expected returns of the Group’s investors on capital, where the cost of liabilities is measured by the interest bearing loans that the Group has obligation to settle. Specific risk relating to the operating segments is accounted for by considering the individual beta factor which is evaluated annually and based on available market information.

Market share assumptions – These assumptions are important to the Management when using industry data to estimate growth rates (as noted below) and assessing how the unit’s market position would change, relative to its competitors over the budget period.

Growth rate estimates – Rates are based on published data of industry research.

Sensitivity to changes in assumptions

With regard to the assessment of value-in-use of the cash-generating unit, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount.

(11) Short-term loans

A. As of December 31, 2025

	As of December 31
Nature of Borrowings	2025	2024
Unsecured bank loans	$985,000	$1,220,000
Secured bank loans	700,000	600,000
Total	$1,685,000	$1,820,000
	As of December 31
Interest Rates (%)	2025	2024
Unsecured bank loans	1.5729%~2.2900%	1.6278%~2.4000%
Secured bank loans	1.8300%~1.8580%	1.8596%

The Group’s unused short-term lines of credits amounted to NT$3,607,704 thousand and NT$3,135,370 thousand as of December 31, 2025 and 2024, respectively. The secured bank loans are secured by the land and buildings. Please refer to Note 8 for details of the assets pledged as collateral for these loans.

(12) Short-term notes and bills payable

	As of December 31
	2025	2024
Secured commercial paper payable	$20,000	$21,000
Less: discount on commercial paper payable	(51)	(65)
Total	$19,949	$20,935
Interest rates	2.568%	2.568%

Please refer to Note 8 for details of the assets pledged as collateral for these loans.

(13) Other payables

	As of December 31
	2025	2024
Payroll	$153,506	$168,563
Business tax payable	53,564	47,991
Damages payable related to litigation (Note 11)	25,852	-
Payable on machinery and equipment	5,590	7,162
Payables on remuneration to employees	-	29,266
Payables on remuneration to directors	-	13,500
Other payables	177,624	191,781
Total	$416,136	$458,263

(14) Provisions

	Maintenance warranties	Sales returns and discounts	Employee benefit	Total
As of January 1, 2025	$4,522	$6,576	$21,603	$32,701
Additions (utilized)	2,775	(525)	1,670	3,920
Effect of exchange rate changes	(161)	(277)	1,840	1,402
As of December 31, 2025	$7,136	$5,774	$25,113	$38,023
Current - as of December 31, 2025	$6,423	$5,774	$-	$12,197
Non-current - as of December 31, 2025	$713	$-	$25,113	$25,826
As of January 1, 2024	$4,093	$7,927	$24,543	$36,563
Additions (utilized)	149	(1,851)	(3,074)	(4,776)
Effect of exchange rate changes	280	500	134	914
As of December 31, 2024	$4,522	$6,576	$21,603	$32,701
Current - as of December 31, 2024	$4,522	$6,576	$-	$11,098
Non-current - as of December 31, 2024	$-	$-	$21,603	$21,603

Maintenance warranties

A provision is recognized for expected warranty claims on products sold, based on past experience, management’s judgement and other known factors.

Sales returns and discounts

Sales returns and discounts were estimated based on historical experiences and other known reasons and were recognized against revenue at the time of goods sold. The aforementioned estimates of sales returns and discounts are based on the premises that it is highly likely a significant reversal in the amount of cumulative revenue recognized will not occur.

Employee benefit

A provision of employee benefit is an estimate of the related liabilities prepared by the Group for the employee's reserve funds or the employee's additional pension benefits.

(15) Long-term loans

	As of December 31
	2025	2024
Secured bank loans	$560,000	$340,000
Less: current portion	(80,000)	(80,000)
Total	$480,000	$260,000
	As of December 31
Interest rates(%)	2025	2024
Secured bank loans	1.9000%~1.9926%	2.0085%
	As of December 31
Maturity date	2025	2024
Secured loans	2027.01~2029.02	2029.02

As of December 31, 2025 and 2024, the Group’s unused credit of long-term loans are both amounted to NT$0 thousand.

Please refer to Note 8 for details of the assets pledged as collateral for these loans .

(16) Post-employment benefits

Defined contribution plan

The Company and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Company and its domestic subsidiaries has made monthly contributions of no less than 6% of the employees' monthly wages to the employees' individual pension accounts. Pension benefits for employees of overseas subsidiaries and branches are provided in accordance with the local regulations.

Pension expenses under the defined contribution plan for the years ended December 31, 2025 and 2024 were NT$36,570 thousand and NT$32,328 thousand, respectively.

Defined benefits plan

The Company and its domestic subsidiaries adopt a defined benefit plan in accordance with the Labor Standards Act of the R.O.C. The pension benefits are disbursed based on the units of service years and the average salaries in the last month of the service year. Two units per year are awarded for the first 15 years of services while one unit per year is awarded after the completion of the 15th year. The total units shall not exceed 45 units. Under the Labor Standards Act, the Company and its domestic subsidiaries contribute an amount equivalent to 2% of the employees' total salaries and wages on a monthly basis to the pension fund deposited at the Bank of Taiwan in the name of the administered pension fund committee. Before the end of each year, the Company and its domestic subsidiaries assess the balance in the designated labor pension fund. If the amount is inadequate to pay pensions to the workers retiring in the same year, the Company and its domestic subsidiaries are required to make up the difference in one appropriation before the end of March the following year.

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under mandation, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT$2,042 thousand to its defined benefit plan during the 12 months beginning after December 31, 2025.

The weighted average duration of the defined benefits plan obligation as of December 31, 2025 and 2024 were 14 years and 15 years, respectively.

Pension costs recognized in profit or loss are as follows:

	For the years ended December 31
	2025	2024
Current period service costs	$-	$44
Net interest on the net defined benefit liabilities (assets)	598	734
Total	$598	$778

Reconciliations in the defined benefit obligation and fair value of plan assets are as follows:

	As of December 31
	2025	2024
Present value of defined benefit obligation	$94,827	$102,993
Plan assets at fair value	(73,959)	(67,412)
Net defined benefit liabilities, non-current	$20,868	$35,581

Reconciliation of liability (asset) of the defined benefit plan is as follows:

	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability (asset)
As of January 1, 2024	$122,345	$(66,281)	$56,064
Current period service costs	44	-	44
Net interest expense (income)	1,602	(868)	734
Subtotal	123,991	(67,149)	56,842
Remeasurements of the net defined benefit liabilities (assets):
Actuarial gains and losses arising from changes in financial assumptions	(5,746)	-	(5,746)
Experience adjustments	(7,424)	-	(7,424)
Remeasurements of the net defined benefit assets	-	(5,794)	(5,794)
Subtotal	(13,170)	(5,794)	(18,964)
Benefits paid	(7,828)	7,828	-
Contributions by employer	-	(2,297)	(2,297)
As of December 31,2024	$102,993	$(67,412)	$35,581

	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability (asset)
As of January 1, 2025	$102,993	$(67,412)	$35,581
Current period service costs	-	-	-
Net interest expense (income)	1,730	(1,132)	598
Subtotal	104,723	(68,544)	36,179
Remeasurements of the net defined benefit liabilities (assets):
Actuarial gains and losses arising from changes in financial assumptions	$2,953	$-	$2,953
Experience adjustments	(10,101)	-	(10,101)
Remeasurements of the net defined benefit assets	-	(4,866)	(4,866)
Subtotal	(7,148)	(4,866)	(12,014)
Benefits paid	(2,748)	2,748	-
Contributions by employer	-	(3,297)	(3,297)
As of December 31,2025	$94,827	$(73,959)	$20,868

The following significant actuarial assumptions are used in determining the Group's defined benefit plan:

	As of December 31
	2025	2024
Discount rate	1.45%	1.68%
Expected rate of salary increases	3.00%	3.00%

Sensitivity analysis for significant assumptions are shown below:

	For the years ended December 31
	2025		2024
	Increase in defined benefit obligation	Decrease in defined benefit obligation	Increase in defined benefit obligation	Decrease in defined benefit obligation
Discount rate increase by 0.5%	$-	$(6,283)	$-	$(7,217)
Discount rate decrease by 0.5%	6,813	-	7,854	-
Future salary increase by 0.5%	6,673	-	7,710	-
Future salary decrease by 0.5%	-	(6,221)	-	(7,161)

The sensitivity analyses above are based on a change in a significant assumption (for example: change in discount rate or future salary), keeping all other assumptions constant. The sensitivity analyses may not be representative of an actual change in the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another.

There was no change in the methods and assumptions used in preparing the sensitivity analyses compared to the previous period.

(17) Equity

A. Common stock

The Company’s authorized capital were both NT$2,000,000 thousand divided into 200,000 thousand shares with par value of NT$10 as of December 31, 2025, and 2024. The Company’s issued capital were both NT$1,275,887 thousand divided into 127,589 thousand shares with par value of NT$10 each as of December 31, 2025, and 2024. Each share has one voting right and a right to receive dividends.

B. Additional paid-in capital

According to the Company Act, the additional paid-in capital shall not be used except for making up the deficit of the company. When a company incurs no loss, it may distribute the additional paid-in capital related to the income derived from the issuance of new shares at a premium or income from donations received by the Company. The distribution could be made in cash or in the form of dividend shares to its shareholders in proportion to the number of shares being held by each of them.

As of December 31
	2025	2024
Share Premium	$1,213,799	$1,213,799

C. Distribution of retained earnings and dividend policies

(a) According to the Company’s Articles of Incorporation, current year’s earnings, if any, shall be distributed in the following order:

(i) Payment of tax;
(ii) Offsetting accumulated deficits, if any;
(iii) Setting aside 10% for legal reserve;
(iv) Appropriating or reversing special reserve in compliance with the Company Act or Securities and Exchange Act;
(v) The distribution of the remaining portion, if any, will be proposed by the Board of Directors and resolved in the shareholders’ meeting;
(vi) If the distribution mentioned above distribute in the form of cash dividends would be authorized to the resolution held by the Board of Directors and resolved in the shareholders’ meeting.

The Company’s policy of distribution is based on capital expenditure, business expansion and sustainable development. The board of directors shall propose the distribution plan and resolve in the shareholders’ meeting. The shareholders’ dividends shall be more than 10% of distributable earnings. The cash dividends shall not be less than 10% of total shareholders’ dividends. The Company may choose not to distribute earnings if the earnings are insufficient to fund appropriation of a NT$0.5 dividend per share.

(b) Pursuant to the Company Act, the company is required to set aside amount to legal reserve until the accumulated legal reserve equals total paid-in capital. The legal reserve can be used to make up the deficit. When a company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

(c) Details of the 2025 and 2024 earnings distribution and dividends per share as resolved by the Board of Director’s meeting and the shareholders’ meeting held on March 12, 2026 and June 19, 2025, respectively, are as follows:

	Appropriation of earnings		Dividend per share (NTD)
	2025	2024	2025	2024
Legal reserve	$-	$38,232	$-	$2.5
Cash dividends	-	318,972	$-	$2.5

The Company was authorized according to the Articles of Association and passed by resolution on March 10, 2025 the proposal to distribute common share cash dividends of 2024.

On March 12, 2026, the Board of Directors resolved to distribute cash dividends from capital surplus in the amount of NT$63,794 thousand, representing NT$0.5 per share.

Please refer to Note 6(20) for details of employees’ compensation and remuneration to directors.

(18) Operating revenues

	For the years ended December 31
	2025	2024
Revenue from contracts with customers
Sale of goods	$4,999,514	$5,296,038
Other operating revenue	251,200	213,995
Total	$5,250,714	$5,510,033

Information of revenues from contracts with customers during the years ended December 31, 2025 and 2024 are as follows:

A. Disaggregation of revenue

For the year ended December 31, 2025:

	Office equipment supplies department	Other department	Total
Sale of goods	$4,999,514	$-	$4,999,514
Others	-	251,200	251,200
Total	$4,999,514	$251,200	$5,250,714

Timing of revenue recognition:

At a point in time	$4,999,514	$-	$4,999,514
Over time	-	251,200	251,200
Total	$4,999,514	$251,200	$5,250,714

For the year ended December 31, 2024:

	Office equipment supplies department	International Tourist hotel department	Total
Sale of goods	$5,296,038	$-	$5,296,038
Rendering of services	-	213,995	213,995
Total	$5,296,038	$213,995	$5,510,033

Timing of revenue recognition:

At a point in time	$5,296,038	$-	$5,296,038
Over time	-	213,995	213,995
Total	$5,296,038	$213,995	$5,510,033

B. Contract balances

Current and non-current contract liabilities

	As of December 31
	2025	2024
Total	$13,623	$10,936
Current	$12,987	$10,936
Non-current	$636	$-
	As of December 31
	2025	2024
Sales of goods	$7,899	$5,905
Others	5,724	5,031
Total	$13,623	$10,936

(19) Leases

A. The Group as a lessee

The Group leases various properties, including real estate such as land and buildings, transportation equipment, office equipment and other equipment. The lease terms range from 1 to 7 years.

The Group’s leases effect on the financial position, financial performance and cash flows were as follows:

(a) Amounts recognized in the balance sheet

(i) Right-of-use assets

The carrying amount of right-of-use assets

	As of December 31
	2025	2024
Buildings	$330,223	$391,233
Office equipment	14,772	21,599
Transportation equipment	32,378	27,936
Land	7,182	8,145
Total	$384,555	$448,913

For the years ended December 31, 2025 and 2024, the Group's additions to right-of-use assets amounted to NT$37,784 thousand and NT$61,236 thousand, respectively.

(ii) Lease liabilities

	As of December 31
	2025	2024
Current	$140,874	$98,163
Non-current	293,581	396,649
Total	$434,455	$494,812

Please refer to Note 6(21)(D) for the interest on lease liabilities recognized for the years ended December 31, 2025 and 2024 and refer to Note 12(5) Liquidity risk management for the maturity analysis for lease liabilities as of December 31, 2025 and 2024.

(b) Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

	For the years ended December 31
	2025	2024
Buildings	$83,127	$85,555
Transportation equipment	12,880	10,232
Office equipment	8,421	8,110
Land	1,711	1,701
Total	$106,139	$105,598

	For the years ended December 31
	2025	2024
The expenses relating to short-term leases	$14,561	$13,105
The expenses relating to leases of low-value assets (Not including the expenses relating to short-term leases of low-value assets)	6,434	7,371
Total	$20,995	$20,476

(d) Cash outflow relating to leasing activities

The Group's total cash outflows for leases for the years ended December 31, 2025 and 2024 were NT$141,745 thousand and NT$138,861 thousand, respectively.

B. The Group as a lessor

Please refer to Note 6(8) for details on the Group's owned investment properties. Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

	For the years ended December 31
	2025	2024
Lease income for operating leases
Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	$9,777	$14,080

For operating leases entered by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of December 31, 2025 and 2024 are as follows:

	As of December 31
	2025	2024
Not later than one year	$15,038	$9,731
Later than one year and not later than two years	14,919	30,792
Later than two years and not later than three years	14,919	15,396
Later than three years	15,665	16,166
Total	$60,541	$72,085

(20) Summarized statement of employee benefits, depreciation and amortization expenses by function for the years ended December 31, 2025 and 2024:

| Function
Nature | For the years ended December 31 | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2025 | | | 2024 | | |
| | Operating costs | Operating expenses | Total amount | Operating costs | Operating expenses | Total amount |
| Employee benefits expense | | | | | | |
| Salaries | $206,610 | $759,865 | $966,475 | $228,513 | $730,249 | $958,762 |
| Labor and health insurance | 27,643 | 54,810 | 82,453 | 26,616 | 43,915 | 70,531 |
| Pension | 9,625 | 27,543 | 37,168 | 9,801 | 23,305 | 33,106 |
| Other employee benefits expenses | 9,133 | 287,498 | 296,631 | 10,456 | 326,803 | 337,259 |
| Depreciation | 49,415 | 180,645 | 230,060 | 45,954 | 170,492 | 216,446 |
| Amortization | 132 | 102,642 | 102,774 | 156 | 136,593 | 136,749 |

The compensation and remuneration policy of the Company is as follows:

According to the Articles of Incorporation, at least 0.1% of profit of the current year is distributable as employees' compensation (Of which not less than 0.03% of the profit shall be distributed to base-level employees as employee compensation.) and no more than 5% of profit of the current year is distributable as remuneration to directors. However, the Company's accumulated losses shall have been covered. The aforementioned profit refers to the profit before tax in the current year after deducting the distribution of employee remuneration and the remuneration of directors.

The manager's remuneration policy is based on consideration of the manager's performance on the company's strategic development, operating finance, and business development, as well as factors such as work responsibilities, work experience, price inflation, and market standards, to set a competitive policy that reflects work performance remuneration.

The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders' meeting. Information on the Board of Directors' resolution regarding the employees' compensation and remuneration to directors can be obtained from the "Market Observation Post System" on the website of the TWSE.

For the years ended December 31, 2025 and 2024, the Company recognized employees' compensation and remuneration to directors based on profit of current year, respectively. The details of employees' compensation and remuneration to directors were as follows:

	For the years ended December 31
	2025	2024
Employees' compensation	$-	$29,266
Remuneration to directors	-	13,500

As the Company reported a net loss before tax for the year ended 2025, no employees' compensation or directors' remuneration was accrued.

There were no material differences between the estimated amount and the actual distribution of the employees' compensation and remuneration to directors for the year ended December 31, 2024.

(21) Non-operating income and expenses

A. Interest income

	For the years ended December 31
	2025	2024
Interest income from banks	$19,977	$38,855
Financial assets measured at fair value through profit or loss	16,898	8,222
Financial assets measured at amortized cost	1,439	329
Other interest income	226	-
Total	$38,540	$47,406

B. Other income

	For the years ended December 31
	2025	2024
Rental income	$9,777	$14,048
Others	9,150	15,440
Total	$18,927	$29,488

C. Other gains and losses

	For the years ended December 31
	2025	2024
(Losses) gains on disposal of property, plant and equipment, net	$(2,348)	$1,197
Gains on disposal of investment property	-	1,670
Losses on disposal of intangible assets	(2,679)	-
Profit from lease modification	59	-
Losses on financial assets at fair value through profit or loss	(3,305)	(6,833)
Foreign exchange (losses) gains, net	32,237	(20,825)
Impairment losses	(1,345,582)	-
Damages losses related to litigation	(25,852)	-
Miscellaneous expenditure	(5,477)	(7,767)
Total	$(1,352,947)	$(32,558)

D. Finance costs

	For the years ended December 31
	2025	2024
Interest on loans from bank	$40,473	$42,052
Less: Capitalized interest payments	-	(3,761)
Subtotal	40,473	38,291
Interest on lease liabilities	19,885	22,223
Inputed interest on deposit	1	2
Total	$60,359	$60,516

(22) Components of other comprehensive income (loss)

A. For the year ended December 31, 2025

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax expense	Other comprehensive income, net of tax
Items that may not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans	$12,014	$-	$12,014	$(2,403)	$9,611
Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	698	-	698	-	698
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations	(116,783)	-	(116,783)	44,074	(72,709)
Gains (losses) on hedging instruments	73	-	73	-	73
Total other comprehensive income (loss)	$(103,988)	$-	$(103,988)	$41,671	$(62,327)

For the year ended December 31, 2024

	Arising during the period	Reclassification adjustments during the period	Other comprehensive income, before tax	Income tax expense	Other comprehensive income, net of tax
Items that may not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit plans	$18,964	$-	$18,964	$(3,793)	$15,171
Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	(4,609)	-	(4,609)	-	(4,609)
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations	185,598	-	185,598	(24,607)	160,991
Gains (losses) on hedging instruments	728	-	728	-	728
Total other comprehensive income (loss)	$200,681	$-	$200,681	$(28,400)	$172,281

(23) Income tax

A. The major components of income tax expense for the years ended 31 December 2025 and 2024 were as follows:

(a) Income tax expense recognized in profit or loss

	For the years ended December 31
	2025	2024
Current income tax expense (income):
Current income tax charge	$88,778	$109,433
Undistributed surplus for income tax	824	715
Adjustments in respect of current income tax of prior periods	(92,403)	120,533
Deferred income tax expense (income):
Deferred income tax expense (income) relating to origination and reversal of temporary differences	6,009	(239,948)
Total income tax expense (income)	$3,208	$(9,267)

(b) Income tax relating to components of other comprehensive income

	For the years ended December 31
	2025	2024
Deferred income tax expense :
Remeasurements of defined benefit plans	$2,403	$3,793
Exchange differences on translation of foreign operations	(44,074)	24,607
Income tax relating to components of other comprehensive income	$(41,671)	$28,400

	For the years ended December 31
	2025	2024
Accounting (losses) profits before tax from continuing operations	$(1,216,841)	$357,881
Tax at the domestic rates applicable to profits in the country concerned	(204,548)	133,225
Tax effect of revenues exempt from taxation	(21,654)	(1,210)
Tax effect of expenses not deductible for tax purposes	115	112
Unrecognized deductible temporary differences	611,032	87,348
Tax effect of deferred tax assets/liabilities	(291,635)	(351,952)
Undistributed surplus for income tax	824	715
Adjustments in respect of current income tax of prior periods	(92,403)	120,533
Other income tax effects adjusted according to tax laws	1,477	1,962
Total income tax expense recognized in profit or loss	$3,208	$(9,267)

(d) Amounts and components of deferred tax assets (liabilities) were as follows:

(i) For the year ended December 31, 2025

	Beginning balance as of January 1, 2025	Recognized in profit or loss	Recognized in other comprehensive income	Effect of exchange rate changes	Ending balance as of December 31, 2025
Temporary differences
Exchange differences on translation of foreign operations	$(44,228)	$-	$44,074	$-	$(154)
Investments accounted for using the equity method	(118,040)	115,693	-	3,883	1,536
Unrealized gains (losses) on cash flow hedging instruments	11	(24)	-	(1)	(14)
Unrealized intragroup profits and losses	27,270	(8,564)	-	-	18,706
Unrealized foreign exchange gains or losses	(1,284)	473	-	-	(811)
Allowance for doubtful accounts	10,945	981	-	(410)	11,516
Allowance to reduce inventory to market value	4,762	409	-	(121)	5,050
Defined benefit liability, non-current	7,116	(540)	(2,403)	-	4,173
Unused taxable losses	207,785	(178,992)	-	(10,320)	18,473
Unrealized sales revenue	44	(14)	-	-	30
Depreciation	19	767	-	7	793
Accrued expenses	11,776	(835)	-	(495)	10,446
Other deferred tax assets	7,686	(6,141)	-	(377)	1,168
Deferred tax liabilities acquired from a business combination	(74,543)	70,778	-	3,765	-
Deferred tax income (expense)		$(6,009)	$41,671	$(4,069)
Net deferred tax assets (liabilities)	$39,319				$70,912
Reflected in balance sheet as follows:
Deferred tax assets	$279,665				$77,070
Deferred tax liabilities	$(240,346)				$(6,158)

(ii) For the year ended December 31, 2024

	Beginning balance as of January 1, 2024	Recognized in profit or loss	Recognized in other comprehensive income	Effect of exchange rate changes	Ending balance as of December 31, 2024
Temporary differences
Exchange differences on translation of foreign operations	$(19,621)	$-	$(24,607)	$-	$(44,228)
Investments accounted for using the equity method	(128,865)	16,814	-	(5,989)	(118,040)
Unrealized gains (losses) on cash flow hedging instruments	260	-	-	(249)	11
Unrealized intragroup profits and losses	13,292	13,978	-	-	27,270
Unrealized foreign exchange gains or losses	2,186	(3,470)	-	-	(1,284)
Allowance for doubtful accounts	12,646	(2,463)	-	762	10,945
Allowance to reduce inventory to market value	5,086	(549)	-	225	4,762
Defined benefit liability, non-current	11,213	(304)	(3,793)	-	7,116
Unused taxable losses	9,920	193,401	-	4,464	207,785
Unrealized sales revenue	6	38	-	-	44
Depreciation	272	(267)	-	14	19
Prepaid expenses	363	(363)	-	-	-
Accrued expenses	15,369	(4,542)	-	949	11,776
Other deferred tax assets	9,280	(2,457)	-	863	7,686
Deferred tax liabilities acquired from a business combination	(98,604)	30,132	-	(6,071)	(74,543)
Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	3,498	-	-	(3,498)
Deferred tax income (expense)		$239,948	$(28,400)	$(8,530)
Net deferred tax assets (liabilities)	$(163,699)				$39,319
Reflected in balance sheet as follows:
Deferred tax assets	$84,651				$279,665
Deferred tax liabilities	$(248,350)				$(240,346)

B. The unused accumulated taxable losses of the Group were as follows:

Year	Taxable losses for the period	Unused taxable losses		Expiration year (Note)
		As of December 31
		2025	2024
2009	$25,669	$2,228	$8,871	(Note1)
2010	6,119	6,119	5,958	(Note1)
2011	16,968	6,904	6,711	(Note1)
2014	210,610	38,786	35,419	2033
2016	150,737	132,235	137,945	2035
2018	247,400	247,400	258,083	(Note2)
2020	234,942	201,271	205,216	(Note2)
2022	6,088	690	-	(Note3)
2023	5,774	5,774	-	(Note3)
2024	14,780	14,780	1,244	2034
2025	153,950	153,950	-	(Note2, 3)
		$810,137	$659,447

Note1: The loss deduction of Katun U.K. has no expiration year as long as the trade continues.
Note2: The loss deduction of Katun Corporation for the years 2018, 2020 and 2025 has no expiration year as long as the trade continues.
Note3: The loss deduction of Katun Brazil for the years 2022 to 2025 has no expiration year as long as the trade continues.

C. Unrecognized deferred tax assets

As of December 31, 2025 and 2024, temporary differences not recognized as deferred tax assets amounted to NT$613,947 thousand and NT$89,145 thousand, respectively.

D. The assessment of income tax return

As of December 31, 2025, the assessment of the income tax returns of the Company and its domestic subsidiaries is as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2023
Subsidiary-JIOU FU CO., LTD.	Assessed and approved up to 2023
Subsidiary-WEKARE CO., LTD.	Assessed and approved up to 2023
Sub-subsidiary- Katun Corporation Taiwan Branch	Assessed and approved up to 2023

As of December 31, 2025, the income tax returns of the Company's foreign subsidiaries have been filed up to 2024.

(24) (Losses) earnings per share

Basic (losses) earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year.

Diluted (losses) earnings per share amounts are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting for interest on the convertible bonds) by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

	For the years ended December 31
	2025	2024
A. Basic (losses) earnings per share
Net (loss) income attributable to ordinary equity holders of the parent (in thousand of NTD)	$(1,220,049)	$367,148
Weighted average number of ordinary shares outstanding for basic (losses) earnings per share (in thousands)	127,589	127,589
Basic (losses) earnings per share (NTD)	$(9.56)	$2.88
B. Diluted earnings per share
Net (loss) income attributable to ordinary equity holders of the parent (in thousand of NTD)	$(1,220,049)	$367,148
Net (loss) income attributable to ordinary equity holders of the parent after dilution (in thousand of NTD)	$(1,220,049)	$367,148
Weighted average number of ordinary shares outstanding for basic (losses) earnings per share (in thousands)	127,589	127,589
Effect of dilution:
Employees compensation - stock (in thousands)	(Note)-	1,019
Weighted average number of ordinary shares outstanding after dilution (in thousands)	127,589	128,608
Diluted (losses) earnings per share (NTD)	$(9.56)	$2.85

Note: As the Company reported a net loss for the year ended 2025, potential dilutive shares are anti-dilutive and are therefore excluded from the calculation.

There have been no other transactions involving ordinary shares or potential ordinary shares between the reporting date and the issuance date of financial statements.

Related party transactions

The related parties who had transactions with the Group during the financial reporting Period were as follows:

Related parties and relationship

Related Party	Relationship
Wang, Jui-Hung and 11 others	Board of Directors or vice presidents and above
CK ROYAL CONSTRUCTION CO., LTD.	The Chairman of the related party is the Director of the Company
Taiwan Foundation of Art	The Director of the related party is the Director of the Company

Significant transactions with related parties

(1) Sales

	For the years ended December 31
	2025	2024
CK ROYAL CONSTRUCTION CO., LTD.	$62	$460

(2) The cost, assets and liabilities related to the construction of the building

As of the year 2024, our company has commissioned CK ROYAL CONSTRUCTION Co., Ltd. to purchase equipment totaling NT$1,464 thousand, which is recorded as Property, plant and equipment.

(3) Operating expenses- Donations

	For the years ended December 31
	2025	2024
Taiwan Foundation of Art	$190	$-

(4) Key management compensation

	For the years ended December 31
	2025	2024
Short-term employee benefits	$63,039	$86,076
Defined benefit obligation	1,304	1,267
Total	$64,343	$87,343

Assets pledged as collateral

The following table lists assets of the Group pledged as collateral for leasing contracts of distribution center in North America and office, customs clearance of imported goods, bank loan and notes and bills payable:

	Carrying amount
	As of December 31
Item	2025	2024
Financial assets measured at amortized cost	$14,445	$11,120
Property, plant and equipment - land and buildings	1,586,898	1,619,330
Total	$1,601,343	$1,630,450

Significant Contingent Liabilities and Unrecognized Commitments

The Group has available amounts of NT$25,000 thousand under unused letters of credit as of December 31, 2025.

Significant losses from disasters

None.

Significant subsequent events

The Company, Katun (E.D.C.) B.V. and Katun Corporation (collectively referred to as the "Group") were involved in a patent infringement litigation with Canon Kabushiki Kaisha ("Canon"). The court rendered a final judgment on February 12, 2026, requiring the Group to pay total damages of EUR 700 thousand to Canon. The amount comprises EUR 100 thousand in damages, EUR 570 thousand in legal fees, and EUR 30 thousand in litigation costs. In addition, the Group is required to dispose of the infringing inventory items. As the related obligation existed as of the balance sheet date, the Group recognized the liability in accordance with the court decision, with the corresponding amounts recorded under other payables and operating costs.

Other

(1) Categories of financial instruments

Financial assets	As of December 31
	2025	2024
Financial assets at fair value through other comprehensive income:
Financial assets at fair value through other comprehensive income, non-current	$101,341	$105,717
Financial assets at fair value through profit or loss:
Mandatorily measured at fair value through profit or loss	546,154	469,413
Financial assets measured at amortized cost:
Cash and cash equivalents (excluding cash on hand)	687,631	887,392
Financial assets measured at amortized cost	14,445	41,120
Notes receivable and accounts receivable	760,058	803,520
Other receivables	64,657	65,216
Guarantee deposits paid	13,640	11,504
Subtotal	2,187,926	2,383,882
Financial assets for hedging	57	-
Total	$2,187,983	$2,383,882
Financial liabilities	As of December 31
	2025	2024
Financial liabilities at amortized cost:
Short-term loans	$1,685,000	$1,820,000
Short-term notes and bills payable	19,949	20,935
Accounts payable	457,798	656,151
Lease liabilities	434,455	494,812
Other payables	416,136	458,263
Long-term loans (including current portion)	560,000	340,000
Guarantee deposits received	6,347	251
Subtotal	3,579,685	3,790,412
Financial assets measured at fair value through profit or loss	113	895
Derivative financial liability for hedging	-	42
Total	$3,579,798	$3,791,349

(2) Financial risk management objectives and policies

The Group’s principal financial risk management objective is to manage the market risk, credit risk and liquidity risk related to its operating activities. The Group identifies measures and manages the aforementioned risks based on the Group’s policy and risk appetite.

The Group has established appropriate policies, procedures and internal controls for financial risk management. Before entering into significant transactions, due approval process by the Board of Directors and the Audit Committee must be carried out based on related protocols and internal control procedures. The Group complies with its financial risk management policies at all times.

(3) Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market risks comprise foreign currency risk, interest rate risk and other price risk (such as equity instrument).

In practice, it is rarely the case that a single risk variable will change independently from other risk variables; there are usually interdependencies between risk variables. However the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating activities (when revenue or expense are denominated in a currency different from the Group’s functional currency) and the Group’s net investments in foreign subsidiaries.

The Group has certain foreign currency receivables to be denominated in the same foreign currency with certain foreign currency payables, therefore natural hedge is received. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria. Furthermore, as net investments in foreign subsidiaries are for strategic purposes, they are not hedged by the Group.

The Group's main revenues and expenses are foreign currency transactions and are exposed to the risk of foreign currency exchange rate fluctuations. To hedge exchange rate risks resulting in reduced value and future cash flow fluctuations, the Group uses financial instruments such as forward exchange contracts to hedge the foreign currency risk that may arise from some expected and highly probable risks. The above hedging operation only reduces part of the financial impact caused by exchange rate changes.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit is performed on significant monetary items denominated in foreign currencies as of the end of the reporting period.

The Group's foreign currency risk is mainly related to the volatility in the exchange rates for USD, EUR, MXN and BRL. Sensitivity analysis as follows:

When NTD strengthens/weakens against foreign currency USD by 1%, the profit for the years ended December 31, 2025 and 2024 decreases/increases by NT$710 thousand and NT$2,408 thousand, respectively.

When NTD strengthens/weakens against foreign currency EUR by 1%, the profit for the years ended December 31, 2025 and 2024 decreases/increases by NT$858 thousand and NT$63 thousand, respectively.

When NTD strengthens/weakens against foreign currency MXN by 1%, the profit for the years ended December 31, 2025 and 2024 decreases/increases by NT$436 thousand and NT$542 thousand, respectively.

When NTD strengthens/weakens against foreign currency BRL by 1%, the profit for the years ended December 31, 2025 and 2024 decreases/increases by NT$748 thousand and NT$742 thousand, respectively.

Interest rate risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's bank borrowings with fixed interest rates and variable interest rates.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as of the end of the reporting period, including investments and borrowings with variable interest rates and interest rate swaps. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for the years ended December 31, 2025 and 2024 to decrease /increase by NT$2,245 thousand and NT$2,160 thousand, respectively.

Equity price risk

The fair value of the Group’s unlisted equity securities is susceptible to market price risk arising from uncertainties about future values of the investment securities. The Group’s unlisted equity securities are classified under investments measured at fair value through other comprehensive income. The Group manages the equity price risk through diversification and placing limits on individual and total equity instruments. Reports on the equity portfolio are submitted to the Group’s senior management on a regular basis. The Group’s Board of Directors reviews and approves all equity investment decisions.

Please refer to Note 12(9) for sensitivity analysis information of other equity instruments or derivatives that are linked to such equity instruments whose fair value measurement is categorized under Level 3.

(4) Credit risk management

Credit risk is the risk that a counterparty will not meet its obligations under a contract, leading to a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts receivable and notes receivable) and from its financing activities, including bank deposits and other financial instruments.

Credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to credit risk management. Credit limits are established for all counter parties based on their financial position, rating from credit rating agencies, historical experience, prevailing economic condition and the Group’s internal rating criteria etc. Certain counter parties’ credit risk will also be managed by taking credit enhancing procedures, such as requesting for prepayment or insurance.

As of December 31, 2025 and 2024, the accounts receivable of top ten customers accounted for 14% and 17% of the total accounts receivable of the Group. The credit concentration risk of other accounts receivable is insignificant.

Credit risk of bank deposits, fixed income securities and other financial instruments is managed by the Group’s treasury department in accordance with the Group’s policy. The Group only transacts with counterparties approved by the internal control procedures, which are banks and financial institutions, companies and government entities with good credit rating. Consequently, there is no significant credit risk for these counter parties.

(5) Liquidity risk management

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of cash and cash equivalents, highly liquid equity investments, bank borrowings and leases. The table below summarizes the maturity profile of the Group’s financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted payment relating to borrowings with variable interest rates is extrapolated based on the estimated interest rate yield curve as of the end of the reporting period.

Non-derivative financial liabilities

	Less than 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of December 31, 2025
Short-term loans	$1,689,786	$-	$-	$-	$1,689,786
Short-term notes and bills payable	19,949	-	-	-	19,949
Accounts payable	457,798	-	-	-	457,798
Other payables	416,136	-	-	-	416,136
Lease liabilities	96,964	164,928	104,216	70,110	436,218
Long-term loans	90,150	464,602	20,066	-	574,818
As of December 31, 2024
Short-term loans	$1,827,787	$-	$-	$-	$1,827,787
Short-term notes and bills payable	20,935	-	-	-	20,935
Accounts payable	656,151	-	-	-	656,151
Other payables	458,263	-	-	-	458,263
Lease liabilities	113,993	190,507	106,869	112,308	523,677
Long-term loans	86,092	167,365	101,339	-	354,796

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for year ended December 31, 2025:

	Short-term loans	Short-term notes and bills payable	Long-term loans (including current portion)	Leases liabilities	Total liabilities from financing activities
As of January 1, 2025	$1,820,000	$20,935	$340,000	$494,812	$2,675,747
Cash flows	(135,000)	(986)	220,000	(100,866)	(16,852)
Non-cash changes	-	-	-	37,784	37,784
Effect of exchange rate changes	-	-	-	2,725	2,725
As of December 31, 2025	$1,685,000	$19,949	$560,000	$434,455	$2,699,404

Reconciliation of liabilities for year ended December 31, 2024:

	Short-term loans	Short-term notes and bills payable	Long-term loans (including current portion)	Leases liabilities	Total liabilities from financing activities
As of January 1, 2024	$1,965,000	$100,898	$171,250	$518,420	$2,755,568
Cash flows	(147,296)	(79,963)	168,750	(96,162)	(154,671)
Non-cash changes	-	-	-	94,732	94,732
Effect of exchange rate changes	2,296	-	-	(22,178)	(19,882)
As of December 31, 2024	$1,820,000	$20,935	$340,000	$494,812	$2,675,747

(7) Fair values of financial instruments

A. The methods and assumptions applied in determining the fair value of financial instruments:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used by the Group to measure or disclose the fair values of financial assets and financial liabilities:

(a) The carrying amount of cash and cash equivalents, accounts receivable, accounts payable and other current liabilities approximate their fair value due to their short maturities.

(b) For financial assets and liabilities traded in an active market with standard terms and conditions, their fair value is determined based on market quotation price (including listed equity securities, beneficiary certificates, bonds and futures etc.) at the reporting date.

(c) Fair value of equity instruments without market quotations (including private placement of listed equity securities, unquoted public company and private company equity securities) are estimated using the market method valuation techniques based on parameters such as prices based on market transactions of equity instruments of identical or comparable entities and other relevant information (for example, inputs such as discount for lack of marketability, P/E ratio of similar entities and Price-Book ratio of similar entities).

(d) Fair value of debt instruments without market quotations, bank loans, and other non-current liabilities are determined based on the counterparty prices or valuation method. The valuation method uses DCF method as a basis, and the assumptions such as the interest rate and discount rate are primarily based on relevant information of similar instrument (such as yield curves published by Taipei Exchange, average prices for Fixed Rate Commercial Paper published by Reuters and credit risk, etc.)

B. Fair value of financial instruments measured at amortized cost

The carrying amounts of the Group's financial assets and financial liabilities are measured at amortized cost approximate their fair value.

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(9) for fair value measurement hierarchy for financial instruments of the Group.

(8) Derivative financial instruments

The related information of the Group’s derivative financial instruments not yet settled as of December 31, 2025 and 2024 is as follows:

Forward currency contracts

The Group entered into forward currency contracts to manage its exposure to financial risk, but these contracts are not designated as hedging instruments. The table below lists the information related to forward currency contracts:

As of December 31, 2025

Items	Notional amount (in thousands)	Contract period
Forward currency contract
Sell USD / Buy NTD	USD500 / NTD15,582	November 2025 to February 2026
As of December 31, 2024
Items	Notional amount (in thousands)	Contract period
Forward currency contract
Sell USD / Buy NTD	USD1,800 / NTD57,944	November 2024 to March 2025

Hedging forward currency contracts

The Group entered into forward currency contracts to manage its exposure to financial risk due to purchases of inventory and sales in GBP, EUR and USD. These contracts are designated as hedging instruments. The table below lists the information related to forward currency contracts:

As of December 31, 2025

Items	Notional amount (in thousands)	Contract period
Forward currency contract
Buy EUR / Sell GBP	EUR600 / USD707	August 2025 to February 2025

As of December 31, 2024

Items	Notional amount (in thousands)	Contract period
Forward currency contract
Buy EUR / Sell GBP	EUR107 / GBP90	November 2024 to February 2025

(9) Fair value measurement hierarchy

A. Fair value measurement hierarchy

All asset and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, based on the lowest level input that is significant to the fair value measurement as a whole. Level 1, 2 and 3 inputs are described as follows:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities that the entity can access at the measurement date

Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly

Level 3 – Unobservable inputs for the asset or liability

For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorization at the end of each reporting period.

B. Fair value measurement hierarchy of the Group’s assets and liabilities

The Group does not have assets that are measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group’s assets and liabilities measured at fair value on a recurring basis were as follows:

As of December 31, 2025

	Level 1	Level 2	Level 3	Total
Assets measured at fair value:
Financial assets measured at fair value through profit or loss
Corporate bonds	$546,154	$-	$-	$546,154
Forward currency contract	57	-	-	57
Financial assets measured at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	-	-	101,341	101,341
Liabilities measured at fair value:
Forward currency contract	$113	$-	$-	$113

As of December 31, 2024

	Level 1	Level 2	Level 3	Total
Assets measured at fair value:
Financial assets measured at fair value through profit or loss
Fund beneficiary certificate	$97,476	$-	$-	$97,476
Corporate bonds	371,937	-	-	371,937
Financial assets measured at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	-	-	105,717	105,717
Liabilities measured at fair value:
Forward currency contract	$937	$-	$-	$937

Transfers between Level 1 and Level 2 during the period

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

The detail movement of recurring fair value measurements in Level 3

Reconciliation for recurring fair value measurements in Level 3 of the fair value hierarchy for movements during the period is as follows:

	Assets
	Measured at fair value through other comprehensive income
	Stocks
	2025	2024
Beginning balance	$105,717	$99,000
Effect of exchange rate changes	(4,376)	6,717
Ending balance	$101,341	$105,717

Information on significant unobservable inputs to valuation of fair value measurements categorized within Level 3 of the fair value hierarchy

Description of significant unobservable inputs to valuation of recurring fair value measurements categorized within Level 3 of the fair value hierarchy is as follows:

As of December 31, 2025

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity analysis of the input to fair value
Financial assets:
Financial assets measured at fair value through other comprehensive income
Stocks	Market approach	discount for lack of marketability	10%~30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by NT$10,134 thousand

As of December 31, 2024

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity analysis of the input to fair value
Financial assets:
Financial assets measured at fair value through other comprehensive income
Stocks	Market approach	discount for lack of marketability	10%~30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by NT$10,572 thousand

Valuation process used for fair value measurements categorized within Level 3 of the fair value hierarchy

The Group’s Finance Department is responsible for validating the fair value measurements and ensuring that the results of the valuation are in line with market conditions, based on independent and reliable inputs which are consistent with other information, and represent exercisable prices. The Department analyses the movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies at each reporting date.

C. Fair value measurement hierarchy of the Group’s assets and liabilities not measured at fair value but for which the fair value is disclosed

As of December 31, 2025	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value but for which the fair value is disclosed:
Investment properties (please refer to Note 6(8))	$-	$-	$1,417,619	$1,417,619
As of December 31, 2024	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value but for which the fair value is disclosed:
Investment properties (please refer to Note 6(8))	$-	$-	$1,472,853	$1,472,853

(10) Significant assets and liabilities denominated in foreign currencies

Information regarding the significant assets and liabilities denominated in foreign currencies were listed below:

	As of December 31, 2025			As of December 31, 2024
	Foreign currencies (thousands)	Exchange rate	NTD (thousands)	Foreign currencies (thousands)	Exchange rate	NTD (thousands)
Financial assets
Monetary items:
USD	$13,887	31.3800	$435,774	$24,054	32.7350	$787,408
EUR	13,738	36.7000	504,185	15,167	33.9400	514,768
MXN	55,290	1.7494	96,724	63,518	1.6096	102,239
BRL	16,276	5.7030	92,822	18,097	5.2864	95,668
Financial liabilities
Monetary items:
USD	$11,626	31.3800	364,824	$16,698	32.7350	$546,609
EUR	11,400	36.7000	418,380	15,354	33.9400	521,115

Due to the wide variety of individual functional currencies of the Group, the Group is not able to disclose the information of exchange gains and losses of monetary financial assets and liabilities by each significant assets and liabilities denominated in foreign currencies. The Group recognized NT$32,237 thousand and NT$(20,825) thousand for foreign exchange (loss) gain for the years ended December 31, 2025 and 2024, respectively.

(11) Capital management

The primary objective of the Group's capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximize shareholder value. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust dividend payment to shareholders, return capital to shareholders or issue new shares.

Other disclosure

A. Information of significant transactions

A. Loans to others: The following transactions were written off when the consolidated financial statements were prepared.

No	Lender	Borrower	Financial statement account	Related parties	Maximum balance for the period	Ending balance (By resolution of the Board of Directors)	Amount actually drawn	Interest rate (%)	Nature of financing	Transaction amount	Reasons for short-term financing	Allowance for doubtful account	Collateral		Financing limits for a single borrowing company (Note1)	Limits on total loans granted (Note1)
													Item	value
1	GPIKT DE, INC.	GPI Co.(Samoa) Ltd.	Other receivables due from related parties	Yes	$627,600 (USD 20,000,000)	$313,800 (USD 10,000,000)	$62,760 (USD 2,000,000)	4.50%	The need for short-term financing	$-	Operating Purposes and group financial allocation	$-	No	$-	$2,770,626	$5,541,252
1	GPIKT DE, INC.	Katun Corporation	Other receivables due from related parties		$251,040 (USD 8,000,000)	$251,040 (USD 8,000,000)	$156,900 (USD 5,000,000)	7.00%	The need for short-term financing	$-	Working capital turnover	$-	No	$-	$2,770,626	$5,541,252

Note: The Company's total lending amounts shall be limited to 80% of the Company's net value.
2. If the Company provides financing to a corporation or entity it already had a business transaction with, the total lending amount shall be limited to 40% of the Company's net value; and the individual lending amount shall not exceed the total transaction amount between the two parties in the latest year. The transaction amount referred to above shall mean the higher of purchase or sales amount between the two parties.
3. The total lending amounts shall not exceed 40% of the Company's net value when providing financing to companies that require short-term loans; and the individual lending amount shall not exceed 40% of the Company's net value.
4. Foreign companies in which the Company directly and indirectly holds 100% of the voting shares may engage in lending activities with each other, or foreign companies in which the Company directly and indirectly holds 100% of the voting shares may engage in lending activities with the Company. The total amount of such lending shall not exceed 200% of the Company's net worth, and the individual financing amount shall not exceed 100% of the Company's net worth.

The formula for calculating the lending limit to individual entities is as follows:

GPIKT DE, INC.: NT$2,770,626 thousand*100%= NT$2,770,626 thousand

The formula for calculating the total lending limit is as follows:

GPIKT DE, INC.: NT$2,770,626 thousand*200%= NT$5,541,252 thousand

B. Endorsement/Guarantee provided to others for the year ended December 31, 2025:

No	Endorser/guarantor	Party being endorsed/guaranteed		Limit on endorsements/guarantees amount to a single party	Maximum balance for the period	Ending balance	Actual amount provided	Amount of endorsement/guarantee collateralized by properties	Ratio of accumulated amount of guarantee provided to net equity of the latest financial statements	Limit on total endorsements/guarantees amount provided (Note 1)	Guarantee Provided by Parent Company	Guarantee Provided by Subsidiary	Guarantee Provided to Subsidiaries in Mainland China
		Company name	Relationship
1	Katun Holdings, LP	Katun Corporation	2	$1,316,926	$361,219 (USD 11,511,135)	$280,023 (USD 8,923,617)	$2,094 (USD 66,730)	$-	10.11%	$1,316,926	N	N	N
1	Katun Holdings, LP	Katun U.K.Ltd.	2	$1,316,926	$21,176 (GBP500,000)	$21,176 (GBP500,000)	$-	$-	0.76%	$1,316,926	N	N	N
2	Katun Corporation	PNA Holdings de Mexico S.A. de C.V.	2	$604,459	$35,815 (USD1,141,321)	$17,290 (USD550,982)	$814 (USD25,939)	$-	0.62%	$604,459	N	N	N
2	Katun Corporation	Katun Brasil Comércio de Suprimentos, Pecas e Equipamentos Ltda	2	$604,459	$109,830 (USD3,500,000)	$109,830 (USD3,500,000)	$27,368 (USD872,140)	$-	3.96%	$604,459	N	N	N
3	Coöperatieve Katun DutchHoldco U.A.	Coöperatieve Katun DutchHoldco U.A.'s Subsidiaries	2	$447,066	$9,414 (USD300,000)	$9,414 (USD300,000)	$9,414 (USD300,000)	$-	0.34%	$447,066	N	N	N
4	GPI Co. (Samoa) Ltd.	GENERAL PLASTIC INDUSTRIAL CO., LTD.	3	$940,534	$846,220	$846,220	$-	$-	30.54%	$940,534	N	Y	N

Note: 1. a. The Company's total endorsement/guarantee amounts shall not exceed 100% of the Company's net value. The guarantee limit for endorsement of a single enterprise shall not exceed 100% of the Company's net worth. In addition to the above limit regulations, the amount of endorsement guarantee shall not exceed the total amount of transactions with the Company in the most recent year.
b. The calculation of individual and total limits is as follows:
Katun Holdings, LP.: USD41,967,057.60100%31.38=NT$1,316,926 thousand
Katun Corporation: USD19,262,562.49100%31.38=NT$604,459 thousand
Coöperative Katun DutchHoldco U.A.: USD14,246,846.21100%31.38=NT$447,066 thousand
GPI Co. (Samoa) Ltd.: USD29,972,404.88100%31.38=NT$940,534 thousand

The total endorsement/guarantee amounts shall not exceed 100% of lending company's net value. The Group endorsement/guarantee to a single enterprise shall not exceed 100% of the Company's net value. The Group policy requires that if the total amount of the endorsement/guarantee reaches more than 50% of the Company's net value, it shall be reported to the shareholders' meeting to explain its necessity and rationality.
The net value of the Company referred to above are based on the latest audited or reviewed financial statements.
According to the "Guidelines Governing the Preparation of Financial Reports by Securities Issuers" issued by the R.O.C. Securities and Futures Bureau, receiving parties should be disclosed as one of the following:
A company with which it does business.
A company in which the public company directly and indirectly holds more than 50% of the voting shares.
A company that directly and indirectly holds more than 50% of the voting shares in the public company.
A company in which the public company holds, directly or indirectly, 90% or more of the voting shares.
A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.
A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.
Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

C. Securities held at the end of the period (excluding subsidiaries, affiliates and joint ventures):

Held company	Securities type and name	Relationship with the securities issuer	Financial statement account	End of period
				Shares/Units	Book value	Ownership (%)	Market price/Fair value
GPI Co. (Samoa) Ltd.	Bond AMAZON.COM INC	None	Financial assets measured at fair value through profit or loss, current	790,000	$14,080	-	$14,080
GPI Co. (Samoa) Ltd.	APPLE INC	None	Financial assets measured at fair value through profit or loss, current	1,420,000	33,696	-	33,696
GPI Co. (Samoa) Ltd.	INTERNATIONAL BUSINESS MACHINES	None		1,400,000	39,717	-	39,717
GPI Co. (Samoa) Ltd.	MICROSOFT CORP	None	Financial assets measured at fair value through profit or loss, current	710,000	13,674	-	13,674

Held company	Securities type and name	Relationship with the securities issuer	Financial statement account	End of period
				Shares/Units	Book value	Ownership (%)	Market price/Fair value
GPI Co. (Samoa) Ltd.	NVIDIA	None	Financial assets measured at fair value through profit or loss, current	1,000,000	23,327	-	23,327
GPI Co. (Samoa) Ltd.	PFIZER INVESTMENT ENTERPRISES PTE LTD	None	Financial assets measured at fair value through profit or loss, current	1,400,000	41,945	-	41,945
GPI Co. (Samoa) Ltd.	HSBC HOLDINGS PLC	None	Financial assets measured at fair value through profit or loss, current	990,000	32,115	-	32,115
GPI Co. (Samoa) Ltd.	CATHAYLIFE SINGAPORE	None	Financial assets measured at fair value through profit or loss, current	480,000	16,028	-	16,028
GPI Co. (Samoa) Ltd.	PROCTER & GAMBLE CO	None	Financial assets measured at fair value through profit or loss, current	460,000	15,717	-	15,717
GPI Co. (Samoa) Ltd.	FWD GROUP HOLDINGS LTD	None	Financial assets measured at fair value through profit or loss, current	700,000	22,080	-	22,080
GPI Co. (Samoa) Ltd.	GREENSAIF PIPELINES BIDCO SARL	None	Financial assets measured at fair value through profit or loss, current	700,000	23,388	-	23,388
GPI Co. (Samoa) Ltd.	INTEL CORP	None	Financial assets measured at fair value through profit or loss, current	700,000	21,127	-	21,127
GPI Co. (Samoa) Ltd.	MCDONALD'S CORP	None	Financial assets measured at fair value through profit or loss, current	700,000	20,405	-	20,405
GPI Co. (Samoa) Ltd.	META PLATFORMS INC	None	Financial assets measured at fair value through profit or loss, current	700,000	21,100	-	21,100

Held company	Securities type and name	Relationship with the securities issuer	Financial statement account	End of period
				Shares/Units	Book value	Ownership (%)	Market price/Fair value
GPI Co. (Samoa) Ltd.	VERIZON COMMUNICATI ONS INC	None	Financial assets measured at fair value through profit or loss, current	700,000	22,213	-	22,213
GPI Co. (Samoa) Ltd.	SWISS RE SUBORDINATED FINANCEVREN	None	Financial assets measured at fair value through profit or loss, current	800,000	26,133	-	26,133
GPI Co. (Samoa) Ltd.	BPLN	None	Financial assets measured at fair value through profit or loss, current	990,000	33,010	-	33,010
GPI Co. (Samoa) Ltd.	SAUDI ARABIAN OIL COMPANGY	None		650,000	19,872	-	19,872
GPI Co. (Samoa) Ltd.	ELECTRICITE DE FRANCE S.A.	None		650,000	20,056	-	20,056
GPI Co. (Samoa) Ltd.	NIPPON LIFE INSURANCE COMPANY	None		570,000	19,211	-	19,211
GPI Co. (Samoa) Ltd.	SUMITOMO LIFE INSURANCE CO	None		650,000	20,648	-	20,648
GPI Co. (Samoa) Ltd.	MORGAN STANLEY	None		800,000	32,537	-	32,537
GPI Co. (Samoa) Ltd.	AVIVA PLC	None		310,000	14,075	-	14,075
Total					$546,154		$546,154
	Stock
GPI Co. (Samoa) Ltd.	KHMER CAPITAL MICROFINANCE INSTITUTION PLC.	Related party	Financial assets measured at fair value through other comprehensive income, non-current	3,800,000	$101,341	19%	$101,341

D. Related party transactions for purchases and sales amounts reaching NT$100 million or 20% of the paid-in capital for the year ended December 31, 2025:

Company name	Counter-party	Relationship (Note1)	Transactions				Details of non-arm's length transaction		Notes and accounts receivable (payable)
			Purchases (Sales)	Amount	Percentage of total purchases (sales)	Term	Unit price	Term	Balance	Percentage of total receivables (payable)
GENERAL PLASTIC INDUSTRIAL CO., LTD.	Katun (E.D.C.) B.V.	1	Sales	$299,672	5.71%	Regular	Regular	Regular	$89,739	11.81%
GENERAL PLASTIC INDUSTRIAL CO., LTD.	Katun Corporation	1	Sales	$360,932	6.87%	Regular	Regular	Regular	$89,559	11.78%
Katun Corporation	PNA Holding Mexico S.A. de C.V.	2	Sales	$281,613	5.36%	Regular	Regular	Regular	$88,126	11.59%
Katun Corporation	Katun Brasil Comercio De Suprimentos Peças E Equipamentos LTDA	2	Sales	$110,838	2.11%	Regular	Regular	Regular	$27,368	3.60%
Katun Corporation	Katun (E.D.C.) B.V.	2	Sales	$407,464	7.76%	Regular	Regular	Regular	$177,665	23.38%
Katun (E.D.C.) B.V.	Katun Benelux B.V.	2	Sales	$365,360	6.96%	Regular	Regular	Regular	$26,977	3.55%
Katun (E.D.C.) B.V.	Katun Germany GmbH	2	Sales	$239,340	4.56%	Regular	Regular	Regular	$(28,143)	(6.15%)
Katun (E.D.C.) B.V.	Katun U.K. Ltd.	2	Sales	$309,459	5.89%	Regular	Regular	Regular	$15,409	2.03%
Katun (E.D.C.) B.V.	Katun France S.A.R.L.	2	Sales	$347,742	6.62%	Regular	Regular	Regular	$6,965	0.92%
Katun (E.D.C.) B.V.	Katun Spain S.A.	2	Sales	$207,059	3.94%	Regular	Regular	Regular	$(6,543)	(1.43%)
Katun (E.D.C.) B.V.	Katun Italy S.R.L.	2	Sales	$405,174	7.72%	Regular	Regular	Regular	$61,936	8.15%

Note 1: The transaction relationships with the counterparties are as follows:
(1) Parent company to subsidiary.
(2) Subsidiary to another subsidiary.

E. Receivables from related parties reaching NT$100 million or 20% of paid-in capital for the year ended December 31, 2025:

Company name	Related Party	Relationship (Note1)	Ending Balance	Turnover rate (times) (Note2)	Overdue receivables		Amount received in subsequent period	Allowance for bad debts	Note
					Amount	Measure
Katun Corporation	Katun (E.D.C.) B.V.	2	$177,665	3.11	$-	-	$-	$-	Including other receivables
GPIKT DE, INC.	Katun Corporation	2	$156,900	-	$-	-	$-	$-	Other receivable

Note: 1. The transaction relationships with the counterparties are as follows:
(1) Parent company to subsidiary.
(2) Subsidiary to another subsidiary.
2. The calculation of turnover rate does not include other receivables - related parties.

F. Significant intercompany transactions between parent company and subsidiaries:

No (Note1)	Company name	Counter party	Nature of relationship (Note2)	Intercompany Transactions
				Financial statements item	Amount	Terms	Percentage of consolidated total gross sales or total assets (%) (Note3)
0	GENERAL PLASTIC INDUSTRIAL CO., LTD.	Katun (E.D.C.) B.V.	1	Sales	$299,672	T/T120 days	5.71%
0	GENERAL PLASTIC INDUSTRIAL CO., LTD.	Katun Corporation	1	Sales	$360,932	T/T120 days	6.87%
1	GPIKT DE, INC.	Katun Corporation	3	Other Receivables	$156,900	Financing at an interest rate of 7%	2.43%
2	Katun Corporation	Katun Brasil Comercio De Suprimentos Peças E Equipamentos LTDA	3	Sales	$110,838	T/T150 days	2.11%

| No
(Note1) | Company name | Counter party | Nature of
relationship
(Note2) | Intercompany Transactions | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | | | Financial
statements
item | Amount | Terms | Percentage of consolidated
total gross sales or total assets
(%) (Note3) |
| 2 | Katun Corporation | PNA Holding
Mexico SA DE CV | 3 | Sales | $281,613 | T/T60 days | 5.36% |
| 2 | Katun Corporation | Katun (E.D.C.) B.V. | 3 | Sales | $407,464 | T/T60 days | 7.76% |
| 2 | Katun Corporation | Katun (E.D.C.) B.V. | 3 | Other
Receivables | $104,549 | T/T60 days | 1.62% |
| 2 | Katun Corporation | Katun (E.D.C.) B.V. | 3 | Other
Income | $203,850 | T/T60 days | 3.88% |
| 3 | Katun (E.D.C.) B.V. | Katun Benelux B.V. | 3 | Sales | $365,360 | T/T60 days | 6.96% |
| 3 | Katun (E.D.C.) B.V. | Katun Germany
GmbH | 3 | Sales | $239,340 | T/T60 days | 4.56% |
| 3 | Katun (E.D.C.) B.V. | Katun U.K. Ltd. | 3 | Sales | $309,459 | T/T60 days | 5.89% |
| 3 | Katun (E.D.C.) B.V. | Katun France
S.A.R.L. | 3 | Sales | $347,742 | T/T60 days | 6.62% |
| 3 | Katun (E.D.C.) B.V. | Katun Spain S.A. | 3 | Sales | $207,059 | T/T60 days | 3.94% |
| 3 | Katun (E.D.C.) B.V. | Katun Italy S.R.L. | 3 | Sales | $405,174 | T/T60 days | 7.72% |

Note 1: The information of transactions between the Company and the consolidated subsidiaries should be noted in "Number" column.
(1) Number 0 represents parent company.
(2) The consolidated subsidiaries are numbered in order from number 1.

Note 2: The transaction relationships with the counterparties are as follows:
(1) Parent company to subsidiary.
(2) Subsidiary to parent company.
(3) Subsidiary to subsidiary.

Note 3: Ratio of transaction amount to the consolidated income or assets is calculated as follows: for balance sheet accounts, the ratio is accounted as the ending balance to consolidated total assets; for income statement accounts, the ratio is based on interim accumulated amount to consolidated total revenue.

100

B. Information of investees

Names, locations, main businesses and products, original investment amount, ownership, net income (loss) of investee company and investment income (loss) recognized as of December 31, 2025 (excluding investees in Mainland China):

Investor	Investee	Location	Main businesses and products	Original investment amount		Shares held at the end of period			Investment income (loss)	Investment income (loss) recognized by the Company	Note
				Ending balance	Prior ending balance	Number of shares	Ownership (%)	Book value
GENERAL PLASTIC INDUSTRIAL CO., LTD	JIOU FU CO., LTD.	Taiwan	Real Estate Trading and Tourist Hotel	$500,000	$565,000	50,000,000 shares	100%	$573,470	$68,744	$68,744
GENERAL PLASTIC INDUSTRIAL CO., LTD	GPI Co. (Samoa) Ltd.	Samoa	Investment and holding	$595,932 (USD20,000,000)	$595,932 (USD20,000,000)	20,000,000 shares	100%	$940,534	$7,372	$7,372
GENERAL PLASTIC INDUSTRIAL CO., LTD	GPIKT (BVI) CO., LTD	British Virgin Island	Investment and holding	$30 (USD1,000)	$30 (USD1,000)	1,000 shares	100%	$31	$-	$-
GENERAL PLASTIC INDUSTRIAL CO., LTD	GPIKT DE, INC.	USA	Investment and holding	$2,858,666 (USD97,100,000)	$2,858,666 (USD97,100,000)	971 shares	100%	$1,610,944	$(1,537,032)	$(1,545,548)	Note 1
Note 2
GENERAL PLASTIC INDUSTRIAL CO., LTD	TJ OFFICE SOLUTION CO.,LTD.	Cambodia	Photocopiers rental	$6,939 (USD261,075)	$9,648 (USD347,529)	1,000 shares	100%	$34	$(668)	$(668)
GENERAL PLASTIC INDUSTRIAL CO., LTD	WEKARE CO., LTD.	Taiwan	Selling of medical supplies	$20,000	$20,000	2,000,000 shares	100%	$888	$(108)	$(108)
GPIKT DE, INC.	KATUN HOLDINGS, LP.	USA	Investment and holding	$2,831,108 (USD96,132,708)	$2,831,108 (USD96,132,708)	211,621 shares	100%	$1,316,926	$(264,492)	Consolidated with subsidiary

Note: 1. The investment income (loss) recognized by the Company for the period includes the investment income (loss) of the Company's indirect subsidiary.
2. If a public company holds a foreign holding company and regards the consolidated financial statements as the main financial statements pursuant to local laws and regulations, it could only disclose the related information of the foreign holding company.

101

C. Information on investments in Mainland China:

(1) The Company invested in Mainland China through Katun Asia Pte Ltd.(Singapore), and the related information is as follows:

Investee company	Main businesses and products	Total amount of paid-in capital	Method of investment (Note1)	Beginning accumulated outflow of investment from Taiwan	Investment flows for the period		Ending accumulated outflow of investment from Taiwan	Net income (loss) of investee company	Percentage of ownership	Investment income (loss) recognized	Carrying value as at end of the period	Accumulated inward remittance of earnings as at end of the period
					Outflow	Inflow
Katun (Shanghai) Co., Ltd.	Distributors of cartridges and consumables for printers, photocopiers, fax machines and multi-function machine	$9,910 (USD315,800)	(2)	$-	$-	$-	$-	$(1,437) (-USD46,228)	100%	$(1,437) (-USD46,228)	$(2,710) (-USD86,371)	None
Accumulated investment in Mainland China as of December 31, 2025	Investment amounts authorized by investment commission, MOEA (Note 2)	Upper limit on investment
---	---	---
		The lender’s net accounts value×60%
$-	$9,910 (USD315,800)	$1,662,376

Note1: Three types of investment methods:
(1) Direct investments.
(2) Indirect investments through a third-region company (please specify the investment company in the third region).
(3) Others.

Note2: The figures in this table are presented in New Taiwan Dollar. Current profit and investment income are converted by average exchange rate and others are converted by tear end exchange rate.

(2) The information on significant transactions and prices, payments, etc. between the Company and the investee in Mainland China as of December, 31, 2025: None.

102

Segment information

For management purposes, the Group segregates the business units based on their products and services and has two reportable operating segments as follows:

(1) Office Imaging Equipment Supplies segment: Responsible for the R&D, manufacturing and sales of imaging consumables, cartridges for photocopiers and printers, and photoreceptor drum gears, etc.

(2) Other Operations segment: Responsible for operations except Office Imaging Equipment Supplies segment.

No operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resources allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured based on accounting policies consistent with those in the consolidated financial statements. However income taxes are managed on a group basis and are not allocated to operating segments.

Transfer pricing between operating segment is on an arm's length basis in a manner similar to transactions with third parties.

A. Information on profit or loss, assets and liabilities of the reportable segment:

For the year ended December 31, 2025

	Office Imaging Equipment Supplies segment	Other segment	Adjustment and elimination	Total
Net sales
External customers	$4,999,514	$251,200	$-	$5,250,714
Inter-segment	751,911	1,628	(753,539)	-
Total net sales	$5,751,425	$252,828	$(753,539)	$5,250,714
Interest expenses	63,573	5,538	(8,752)	$60,359
Depreciation and amortization	343,988	22,739	(33,893)	332,834
Tax expenses	(22,275)	16,919	8,564	3,208
Other significant non-cash items:
Impairment loss on intangible assets	1,345,582	-	-	1,345,582
Segment profit or loss	$(2,779,356)	$92,260	$1,470,255	$(1,216,841)
Assets
Capital expenditure of non-current assets	$87,971	$2,963	$-	$90,934
Segment assets	$8,329,321	$1,658,629	$(3,535,956)	$6,451,994
Segment liabilities	$3,879,603	$143,672	$(341,907)	$3,681,368

103

For the year ended December 31, 2024

	Office Imaging Equipment Supplies segment	Other segment	Adjustment and elimination	Total
Net sales
External customers	$5,296,038	$213,995	$-	$5,510,033
Inter-segment	955,579	1,717	(957,296)	-
Total net sales	$6,251,617	$215,712	(957,296)	$5,510,033
Interest expenses	65,722	760	(5,966)	60,516
Depreciation and amortization	363,558	23,530	(33,893)	353,195
Tax expenses	(6,984)	11,694	(13,977)	(9,267)
Segment profit or loss	$397,402	$67,650	$(107,171)	$357,881
Assets
Capital expenditure of non-current assets	$253,565	$2,323	$(11)	$255,877
Segment assets	$12,298,506	$1,751,556	$(5,395,619)	$8,654,443
Segment liabilities	$4,634,774	$181,274	$(533,579)	$4,282,469

B. No reconciliations of revenue, profit or loss, assets, liabilities and other material items of reportable segments are needed.

C. Geographical information

Net Sales from external customers

	For the years ended December 31,
	2025	2024
United States	$1,121,580	$1,184,495
Netherlands	674,886	773,907
Italy	565,560	588,829
Mexico	484,307	500,844
United Kingdom	464,975	492,833
France	443,897	464,405
Germany	390,053	414,288
Spain	274,118	276,941
Taiwan	267,351	230,106
Brazil	196,774	212,879
Other countries	367,213	370,506
Total	$5,250,714	$5,510,033

104

105

Net sales are classified by customers’ countries.

Non-current assets:

	As of December 31,
	2025	2024
Asia (including Taiwan and Cambodia)	$2,332,419	$2,361,807
North America	231,556	1,622,938
Europe	74,206	511,464
Central and South America	264,222	75,826
Total	$2,902,403	$4,572,035

Non-current assets exclude financial instruments and deferred tax assets.

(3) Information about major customers

No single customer of the Group accounts for more than 10% of net sales for the years ended December 31, 2025 and 2024.

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Key assumptions used in value-in-use calculations

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GPI — Audit Report / Information 2025

52506_rns_2026-06-02_3e1f7859-57f3-41e0-8ccf-c33a716400a2.pdf

REPRESENTATION LETTER

Inventory Valuation

Goodwill impairment

Revenue Recognition

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Others

Notice to Readers

Equity instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

Offsetting of financial instruments

(9) Derivative instrument

The Group as a lessee

The Group as a lessor

Other operating revenues

Katun Holdings, LP’s cash generating unit

Key assumptions used in value-in-use calculations

Sensitivity to changes in assumptions

(11) Short-term loans

Maintenance warranties

Sales returns and discounts

Employee benefit

(15) Long-term loans

Defined contribution plan

Defined benefits plan

Equity price risk

(4) Credit risk management

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