Headway - Annual Report 2024 | FinancialReports.eu

HEADWAY ADVANCED MATERIALS INC.

Parent Company Only Financial Statements

and Independent Auditors' Report 2024 and 2023 (English Version)

Address: No. 71, Guangfu Road, Hukou, Hsinchu County TEL: (03)5978899

Note: The English version is the translation of the Chinese version and if there is any discrepancy between this English translation and the Chinese text of this document, the Chinese text shall prevail.

§CONTENS§

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Financial
Statements
Items Page
Note No.
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Items	Page	Financial Statements Note No.
1. Cover Page	1	-
2. Contents	2	-
3. Independent Auditor’s Report	3~6	-
4. Parent Company Only Balance Sheets	7	-
5. Parent Company Only Statement of
Comprehensive Income	8~9	-
6. Parent Company Only Statement of Changes in
Equity	10	-
7. Parent Company Only Cash Flow Statement	11~12	-
8. Notes to Parent Company Only Financial
Statements
(1) Company History	13	1
(2) Date and Procedures of the Authorization
of Financial Statement	13	2
(3) Application of the newly announced and
Amended regulations and interpretations	13~16	3
(4) Summary of Significant Accounting Policies	16~31	4
(5) Significant Accounting judgments,
Estimations, and the Main Sources of
Assumption Uncertainties	31	5
(6) Description of Major Accounting Items	31~65	6~27
(7) Related Party Transactions	65~67	28
(8) Collateral Assets	67	29
(9) Contractual Commitment with Material or
Liabilities without Recognition	67~68	30
(10) Major Casualty Loss	-	-
(11) Major Post-Period Matters	-	-
(12) Other Matters	68~69	31
(13) Notes to Disclosure
1. Major Transaction Related Information	69,71~72	32
2. Investments Related Information	69,73	32
3. Investments in Mainland China	69~70,	32
	74~75
4. Major Shareholders	70,76	-
(14) Segment Information	-	-
9. Statements of Major Accounting Items	77~92	-

INDEPENDENT AUDITOR’S REPORT

To Headway Advanced Materials Inc.:

Opinion

We have audited the accompanying financial statements of Headway Advanced Materials Inc. (the Company), which comprise the parent company only balance sheets as of December 31, 2024, and 2023, and the parent company only statements of comprehensive income, changes in equity, cash flows from January 1 to December 31, 2024, and 2023, and the notes to the parent company only financial statements (including a summary of significant accounting policies).

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and 2023, and the parent company only financial performance and parent company only cash flows from January 1 to December 31, 2024, and 2023 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and Auditing Standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. 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 most significant in our audit of the 2024 parent company only financial statements of Headway Advanced Materials Inc. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on the matters.

Key audit matters for the 2024 parent company only financial statements of Headway Advanced Materials Inc. are stated as follows:

Revenue Recognition

The revenue of Headway Advanced Materials Inc.primarily comes from the sales of PU resins. Considering that revenue recognition inherently carries a higher risk of fraud and that management may face pressure to meet expected financial targets, the auditor has identified the authenticity of sales revenue for certain customers, where sales growth compared to the same period last year is notable, as a key audit matter.

The auditor performed the following key audit procedures to address the authenticity of sales revenue for these customers:

1.Understanding and evaluating the design and operational effectiveness of the internal controls and procedures related to the sales transaction cycle.
2.Obtaining sales details, selecting samples for substantive testing, reviewing documents such as orders, shipping documents, export declarations, and sales invoices, and examining whether there are any abnormalities in the collection of payments from customers to confirm the authenticity of revenue recognition.

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

Management is responsible for the preparation of and fair presentation of the parent company olny financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud and error.

In preparing the parent company only financial statements, management is responsible for assessing the ability of Headway Advanced Materials Inc. to continue as a going concern, disclosing, applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate Headway Advanced Materials Inc. or to cease operations, or has a realistic alternative but to do so.

The governance unit (including the Audit Committee) of Headway Advanced Materials Inc. is responsible for monitoring the financial report process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives aim to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an 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 auditing standards generally accepted 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 parent company only financial statements.

As part of an audit in accordance with the auditing standards generally accepted, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the parent company only 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 Headway Advanced Materials Inc.
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 Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the paretn company only 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 Headway Advanced Materials Inc. to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the parent company only financial statements (including the relevant notes), and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities formed in Headway Advanced Materials Inc. to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of Headway
5 -

Advanced Materials Inc. 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 provide those charged with governance with a statement that we have complied with The Norm of the Professional Ethics for Certified Public Accountant regarding the independence of personnel from our firm, 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 the 2024 parent company only financial statements of Headway Advanced Materials Inc. and are therefore the audit key matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosures 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.

Deloitte & Touche Taipei, Taiwan Republic of China March 25, 2025

Auditor Su Li Fang Auditor Tung Hui Yeh Securities and Futures Securities and Futures Commission Approval Document No. Commission Approval Document No. Jin-Guang-Zheng—Sheng-Zi Jin-Guang-Zheng—Sheng-Zi No. 0940161384 No. 0980032818

Headway Advanced Materials Inc.

Parent Company Only Balance Sheets

December 31, 2024 & 2023

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Unit: In NTD Thousand
December 31, 2024 December 31, 2023
Code Assets Amount ％ Amount ％
Current Assets
1100 Cash and cash equivalents (Note 4 & 6) $ 108,614 7 $ 100,457 7
1136 Current financial assets at amortized cost (Note 4 & 9) - - 40,254 3
1150 Notes receivable – non-related parties (Note 4, 10 & 21) 29,059 2 25,826 2
1160 Notes receivable – related parties (Note 4,10, 21 & 28) 1,492 - 2,975 -
1170 Accounts receivable - non-related parties (Note 4, 10 & 21) 126,842 9 101,097 7
1180 Notes receivable – related parties (Note 4,10, 21 & 28) 18,280 1 24,384 1
1220 Current tax assets (Note 4 & 23) - - 7,279 -
130X Inventories (Note 4 & 11) 141,573 9 131,754 9
1479 Other current Assets (Note 16) 4,703 - 3,337 -
11XX Total Current Assets 430,563 28 437,363 29
Non-current Assets
1510 Financial assets at fair value through profit or loss – non-current (Note 4 &
7) 25,187 2 25,596 2
1517 Financial assets at fair value through other comprehensive income - non-
- -
current (Note 4 & 8) 1,253 1,555
1550 Investments accounted for using equity method (Notes 4 & 12) 823,571 54 774,258 52
1600 Property, plant and equipment (Note 4, 13 & 29) 209,079 14 182,738 12
1755 Right-of-use assets (Note 4 & 14) - - 212 -
1780 Intangible assets (Note 4 & 15) 521 - 844 -
1840 Deferred tax assets (Note 4 & 23) 24,004 1 24,927 2
1990 Other non-current assets (Note 16 & 19) 10,082 1 38,415 3
15XX Total Non-current Assets 1,093,697 72 1,048,545 71
1XXX Total Assets $ 1,524,260 100 $ 1,485,908 100
Code Liabilities & Equity
Current Liabilities
2100 Short-term borrowings (Note 17) $ 145,570 10 $ 154,166 11
2110 Short-term bills payable (Note 17) - - 19,984 1
2120 Financial liabilities at fair value through profit or loss – current (Note 4 &
7) 50 - - -
2150 Notes payable – non-related parties 65,983 4 63,334 4
2160 Notes payable –related parties (Note 28) 1,365 - 1,388 -
2170 Accounts payable – non-related parties 57,217 4 32,970 2
2180 Accounts payable – related parties (Note 28) 802 - 964 -
2220 Other payables (Note 18) 53,054 4 56,358 4
2230 Current tax liabilities 3,631 - - -
2280 Lease liabilities – current (Note 4 & 14) - - 215 -
2399 Other current liabilities 2,079 - 1,987 -
21XX Total Current Liabilities 329,751 22 331,366 22
Non-current Liabilities
2540 Long-term borrowings (Note 17 & 28) 250,000 16 250,000 17
2570 Deferred tax liabilities (Note 4 & 23) 25,655 2 24,475 2
25XX Total Non-current Liabilities 275,655 18 274,475 19
2XXX Total Liabilities 605,406 40 605,841 41
Equity (Note 20)
Capital
3110 Common stock capital 601,070 39 601,070 40
3200 Capital surplus 13,104 1 13,104 1
Retained earnings
3310 Legal reserve 220,378 14 217,716 15
3320 Special reserve 68,170 5 58,130 4
3350 Unappropriated retained earnings 62,733 4 58,218 4
3300 Total Retained Earnings 351,281 23 334,064 23
3400 Other equity ( 46,601 ) ( 3 ) ( 68,171 ) ( 5 )
3XXX Total Equity 918,854 60 880,067 59
Total Liabilities & Equity $ 1,524,260 100 $ 1,485,908 100
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The accompanying notes are an integral part of the parent company only financial statements.

Chairman ： Liou, Han-Yin Manager ： Chao, Wei-Chun

Accountant in Charge ： Liao, Pei-Hung

Headway Advanced Materials Inc. Parent Company Only Statements of Comprehensive Income From January 1 to December 31, 2024 & 2023

Unit: In NTD Thousand, EPS in NTD

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2024 2023
Code Amount % Amount %
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4000	Net sales revenue (Note 4, 21 &
	28)		$	714,878		100		$	592,309		100
5000	Cost of sales (Note 11, 22, & 28)			582,245		81			512,551		87
5900	Gross profit			132,633		19			79,758		13
5920	Realized profit from sales to
	subsidiaries			81		-			20		-
5950	Realized gross profit from
	operations			132,714		19			79,778		13
	Operating expenses (Note 22)
6100	Selling expenses			31,435		4			26,844		4
6200	Administrative expenses			53,517		8			48,359		8
6300	R&D expenses			21,896		3			21,699		4
6450	Expected credit loss (gain)			348		-	(		443)		-
6000	Total			107,196		15			96,459		16
6900	Operating income (loss)			25,518		4	(		16,681)	(	3)
	Non-operating income and
	expenses (Note 4 & 22)
7100	Interest income			3,907		1			3,631		-
7010	Other income			2,047		-			1,410		-
7020	Other gains and losses			6,326		1			5,559		1
7050	Financial costs	(		10,485 )	(	2 )	(		7,851 )	(	1 )
7070	Share of profit (loss) of
	subsidiaries and
	associates accounted for
	using equity method			21,548		3			45,148		8
7000	Total non-operating
	income and
	expenses			23,343		3			47,897		8
7900	Profit before tax		$	48,861		7		$	31,216		5
7950	Total tax expense (Note 4 & 23)			2,190		-			5,198		1
8200	Profit for the year			46,671		7			26,018		4
	Other comprehensive income

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2024 2023
Code Amount % Amount %
8310 Items that will not be
reclassified subsequently
to profit or loss:
8311 Remeasurement of
defined benefit
plans (Note 19) 215 - 608 -
8316 Unrealized gains and
losses on
investments in
equity instruments
at fair value through
other
comprehensive
income ( 302 ) - 88 -
8330 Share of other
comprehensive
income of
subsidiaries and
associates
accounted for using
equity method 384 - ( 4 ) -
8360 Items that may be
reclassified subsequently
to profit or loss:
8361 Exchange differences
on translation of the
financial statement
of foreign
operations (Note
20) 27,340 4 ( 12,660 ) ( 2 )
8399 Income tax related to
components of
other
comprehensive
income that will be
reclassified to profit
or loss (Note 20 &
23) ( 5,468 ) ( 1 ) 2,531 1
8300 Total other
comprehensive
income (After tax) 22,169 3 ( 9,437 ) ( 1 )
8500 Total comprehensive income $ 68,840 10 $ 16,581 3
Earnings per share (Note 24)
9750 Basic $ 0.78 $ 0.39
9850 Diluted $ 0.77 $ 0.39
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The accompanying notes are an integral part of the parent company only financial statements.

Chairman ： Manager ： Accountant in Charge ： Liou, Han-Yin Chao, Wei-Chun Liao, Pei-Hung

Headway Advanced Materials Inc.

Pa ren t C om pa ny On ly St ate me nt of C ha nges in E qu it y F ro m Jan ua ry 1 t o De ce mbe r 31, 202 4 & 20 23

Un it : I n N T D T ho usa nd

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Other Equity
Unrealized gains and
losses on
Exchange investments in
Common stock capital Retained earnings differences on equity instruments at
translation of the Unrealized fair value through
Shares Capital Unappropriated financial statement revaluation other comprehensive Unearned
Code (Thousand shares) Amount surplus Legal reserve Special reserve retained earnings Total of foreign operations increments income compensation Total Total Equity
A1 Balance as of January 1, 2023 70,304 $ 703,033 $ 13,081 $ 215,371 $ 95,488 $ 38,765 $ 349,624 ( $ 61,897 ) $ 6,800 ( $ 3,033 ) ( $ 245 ) ( $ 58,375 ) $ 1,007,363
Appropriation and distribution of retained
earnings:
B1 Legal reserve - - - 2,345 - ( 2,345 ) - - - - - - -
B3 Special reserve - - - - ( 37,358 ) 37,358 - - - - - - -
B5 Cash dividends - - - - - ( 42,182 ) ( 42,182 ) - - - - - ( 42,182 )
D1 Net profit - - - - - 26,018 26,018 - - - - - 26,018
D3 Other comprehensive income - - - - - 604 604 ( 10,129 ) - 88 - ( 10,041 ) ( 9,437 )
D5 Total comprehensive income - - - - - 26,622 26,622 ( 10,129 ) - 88 - ( 10,041 ) 16,581
E3 Cash capital reduction ( 10,194 ) ( 101,940 ) - - - - - - - - - - ( 101,940 )
N1 Compensation cost from restricted stock
units - - - - - - - - - - 245 245 245
N1 Write off restricted stock units ( 3 ) ( 23 ) 23 - - - - - - - - - -
Z1 Balance as of December 31, 2023 60,107 601,070 13,104 217,716 58,130 58,218 334,064 ( 72,026 ) 6,800 ( 2,945 ) - ( 68,171 ) 880,067
Appropriation and distribution of retained
earnings:
B1 Legal reserve - - - 2,662 - ( 2,662 ) - - - - - - -
B3 Special reserve - - - - 10,040 ( 10,040 ) - - - - - - -
B5 Cash dividends - - - - - ( 30,053 ) ( 30,053 ) - - - - - ( 30,053 )
D1 Net profit - - - - - 46,671 46,671 - - - - - 46,671
D3 Other comprehensive income - - - - - 599 599 21,872 - ( 302 ) - 21,570 22,169
D5 Total comprehensive income - - - - - 47,270 47,270 21,872 - ( 302 ) - 21,570 68,840
Z1 Balance as of December 31, 2024 60,107 $ 601,070 $ 13,104 $ 220,378 $ 68,170 $ 62,733 $ 351,281 ( $ 50,154 ) $ 6,800 ( $ 3,247 ) $ - ( $ 46,601 ) $ 918,854
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The accompanying notes are an integral part of the parent company only financial statements.

Chairman ： Liou, Han-Yin Manager ： Chao, Wei-Chun Accountant in Charge ： Liao, Pei-Hung

10 -

Headway Advanced Materials Inc.

Parent Company Only Cash Flow Statement

From January 1 to December 31, 2024 & 2023

Unit: In NTD Thousand

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Code 2024 2023
Cash flows from (used in) operating activities:
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A10000	Profit (loss) before tax		48,861		31,216
	Total adjustments to reconcile profit
	(loss):
A20100	Depreciation expense		23,964		20,266
A20200	Amortization expense		323		126
A20300	Expected credit loss (reversal gain)
	for bad debt expense		348	(	443 )
A20400	Net loss (gain) on financial assets
	and liabilities at fair value through
	profit or loss	(	1,135 )		145
A20900	Financial costs		10,485		7,851
A21200	Interest income	(	3,907 )	(	3,631 )
A21900	Compensation cost from restricted
	stock units		-		245
A22400	Share of profit (loss) of subsidiaries
	and associates accounted for using
	equity method	(	21,548 )	(	45,148 )
A22500	Gain on disposal of property, plant
	and equipment	(	234 )	(	76 )
A23800	Reversal gains for market price
	decline and obsolete and slow-
	moving inventories	(	4,228 )	(	6,735 )
A24000	Realized profit from sales to
	subsidiaries	(	81 )	(	20 )
A24100	Gain on foreign exchange, net	(	6,220 )	(	500 )
A30000	Net changes in operating assets and
	liabilities
A31130	Notes receivable	(	3,245 )	(	3,647 )
A31140	Notes receivable - related parties		1,490	(	747 )
A31150	Accounts receivable	(	23,977 )		10,037
A31160	Accounts receivable - related parties		6,164	(	617 )
A31200	Inventories	(	5,591 )		34,488
A31240	Other current assets	(	1,458 )		1,777
A32130	Notes payable		2,649		12,245
A32140	Notes payable - related parties	(	23 )	(	927 )
A32150	Accounts payable		24,121		884
A32160	Accounts payable - related parties	(	162 )		264
A32180	Other payable		1,758		6,762
A32230	Other current liabilities		92		824
A32240	Net defined benefit assets (liabilities)	(	58)	(	361)
A33000	Cash inflow (outflow) generated from
	operations		48,388		64,278
A33300	Interest paid	(	10,007 )	(	7,895 )
A33500	Income taxes Refund (Payment)		5,355	(	1,970)

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Code 2024 2023
AAAA Net cash flows from (used in)
operating activities 43,736 54,413
Cash flows from (used in) investing activities:
B00050 Disposal of financial assets at amortized
cost $ 40,254 $ -
B00100 Acquisition of financial assets at fair
value through profit or loss ( 5,577 ) ( 15,733 )
B00200 Disposal of financial assets at fair value
through profit or loss 7,171 1,105
B02700 Acquisition of property, plant and
equipment ( 22,707 ) ( 14,355 )
B02800 Proceeds from disposal of property, plant,
and equipment 234 76
B03700 Increase in guaranteed deposits paid ( 7 ) -
B04500 Acquisition of intangible assets - ( 970 )
B07100 Increase in prepayments for business
facilities ( 4,316 ) ( 9,934 )
B07500 Interest received 3,999 3,615
B07600 Cash dividends from subsidiaries received 40 32,881
B09900 Cash capital reduction from Investee - 43,164
BBBB Net cash flows from (used in)
investing activities 19,091 39,849
Cash flows from (used in) financing activities:
C00100 Increase in Short-term borrowings - 40,693
C00200 Decrease in Short-term borrowings ( 9,079 ) -
C00600 Decrease in Short-term bills payable ( 20,000 ) ( 80,000 )
C01600 Proceeds from long-term borrowings 250,000 285,000
C01700 Repayment of long-term borrowings ( 250,000 ) ( 200,000 )
C04020 Repayment of the principal portion of
lease liabilities ( 215 ) ( 640 )
C04500 Cash dividends paid ( 30,053 ) ( 42,182 )
C04700 Cash capital reduction - ( 101,940 )
CCCC Net cash flows from (used in)
financing activities ( 59,347 ) ( 99,069 )
DDDD Effect of exchange rate changes on cash and cash equivalents
4,677 ( 791 )
EEEE Net Increase (decrease) in cash and cash
equivalents 8,157 ( 5,598 )
E00100 Cash and cash equivalents at beginning of
period 100,457 106,055
E00200 Cash and cash equivalents at end of period $ 108,614 $ 100,457
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The accompanying notes are an integral part of the parent company only financial statements.

Chairman ： Manager ： Accountant in Charge ： Liou, Han-Yin Chao, Wei-Chun Liao, Pei-Hung

12 -

Headway Advanced Materials Inc. and Subsidiaries Notes on Parent Company Only Financial Statements From January 1 to December 31, 2024 & 2023

(Amounts expressed in NTD Thousand, unless stated otherwise)

1. Company History

Headway Advanced Materials Inc. (hereinafter referred to as "the Company") was established on April 24, 1976. Its business includes the manufacture, processing, and sale of PU curing agents, processing agents, coatings, resins for coatings, adhesives, flatting agents, and related raw materials.

The Company's stock has been listed on the Taiwan Stock Exchange since May 2016.

This parent company only financial report is expressed in the functional currency of the Company, which is New Taiwan dollars.

2. Date and Procedures of the Authorization of Financial Statements

The parent company only financial statement was authorized by the Board of Directors on March 5, 2025.

3. Application of the Newly Announced and Amended Regulations and

Interpretations

(1) The Company has adopted International Financial Reporting Standards (IFRSs) that were recognized by the Financial Supervisory Commission, International Accounting Standards (IAS), Interpretations, and Notices (IFRS), Interpretation (IFRIC), and Interpretative Announcement (SIC) for the first time.

The Company has started applying the amended International Financial Reporting Standards (IFRSs) that were recognized and announced by the Financial Supervisory Commission (FSC), and it will not have a significant impact on the accounting policies of the Company.

(2) Applicable IFRSs recognized by the Financial Supervisory Commission in 2025
13 -

Newly announced / revised / amended. regulations and interpretations Amendments to IAS 21 “Lack of Exchangeability”

Amendments to IFRS 9 and IFRS 7 regarding the "Classification and Measurement of Financial Instruments" include changes to the guidance on the classification of financial assets.

Effective date for the announcement of the IASB January 1, 2025 （ Remark1 ） January 1, 2026 （ Remark2 ）

Remark1: An entity applies the amendments for annual reporting periods beginning on or after 1 January 2025. An entity recognizes any effect of initially applying the amendments as an adjustment to the opening balance of retained earnings when the entity reports foreign currency transactions. When the Company uses a presentation currency other than its functional currency, it recognizes the cumulative amount of translation differences in equity.
Remark2: The amendments are effective for annual reporting periods beginning on or after 1 January 2026. Earlier application of either all the amendments at the same time or only the amendments to the classification of financial assets is permitted. An entity is required to apply the amendments retrospectively. An entity is not required to restate prior periods to reflect the application of the amendments, but may do so if, and only if, it is possible to do so without the use of hindsight.

As of the date the accompanying parent company only financial statements were authorized for issue, the Company has already evaluated and determined that any revisions to standards or interpretations thereof are not expected to have a significant impact on the financial position and financial performance.

(3) The IFRSs issued by IASB but not yet endorsed and issued into effect by the FSC:

Effective date for the Newly announced / revised / amended regulations and announcement of the interpretations IASB (Remark1) Annual Improvements to IFRS Accounting Standards - Volume 11 January 1, 2026

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Effective date for the
Newly announced / revised / amended regulations and announcement of the
interpretations IASB (Remark1)
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Newly announced / revised / amended regulations and interpretations	Effective date for the announcement of the IASB (Remark1)
Amendments to IFRS 9 and IFRS 7 regarding the
"Classification and Measurement of Financial	January 1, 2026
Instruments" include changes to the guidance on the
classification of financial liabilities.
Amendments to IFRS 9 and IFRS 7 regarding the "	January 1, 2026
Contracts Referencing Nature-dependent Electricity ".
Amendments to IFRS 10 and IAS 28 “Sale or
Contribution of Assets between an Investor and its
Associate or Joint Venture”	To be determined by IASB
IFRS 17“Insurance Contracts”	January 1, 2023
Amendments to IFRS 17	January 1, 2023
Amendments to IFRS 17“Initial Application of IFRS 17
and IFRS 9 — Comparative Information”	January 1, 2023
IFRS 18“Presentation and Disclosure in Financial
Statements”	January 1, 2027
IFRS 19” Subsidiaries without Public Accountability:
Disclosures”	January 1, 2027

Remark1: Unless otherwise stated, the above newly announced/ revised/ amended regulations or interpretations become effective for annual reporting periods beginning on or after the respective dates mentioned.
A) IFRS 18 “Presentation and Disclosure in Financial Statements”
IFRS 18 will replace IAS 1 “Presentation of Financial Statements”, the main
differences between the two standards include:
a) All items of income and expense need to be classified in one of five categories in the statement of profit or loss: operating, investing, financing, income tax, and discontinued operations categories.
b) An entity must present totals and subtotals in the statement of profit or loss for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
c) Guidelines are provided to strengthen the aggregation and disaggregation rules: the Company must identify assets, liabilities, equity, income, expenses, and cash flows from individual transactions or other matters, and classify and aggregate them based on shared characteristics, so that each line item reported in the primary financial statements has at least one similar characteristic. Items with
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characteristics that are not shared should be disaggregated in the primary financial statements and notes. The Company should only label these items as ‘other’ when they cannot find a more informative name.

d) Increasing the disclosure of Management-defined performance measures (MPMs): When the Company conducts public communication outside financial statements and communicates with financial statement users about the management’s view of a certain aspect of the overall financial performance of the company, it should disclose relevant information about the MPMs in a single note to the financial statements. This includes the description of the measure, how it is calculated, its adjustments to the subtotals or totals specified by the IFRS accounting standards, and the impact of related adjustment items on income tax and non-controlling interests, etc. Besides the impacts, up until the date the accompanying parent company
only financial statements were authorized for issue, the Company continues to assess the impact on its financial position and financial performance from the initial adoption of standards or interpretations and related applicable period. The related impact will be disclosed when the Company completes its assessment.

4. Summary of Significant Accounting Policies

(1) Statement of compliance

This parent company only financial report is prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs recognized by and declared effective by the FSC.

(2) Preparation basis for financial statements

Except for the financial instruments measured at fair value and the net defined benefit liabilities recognized at the present value of the defined benefit obligation net of the fair value of the planned assets, this parent company only financial report is prepared at the historical cost.

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The measurement of fair value is divided into Level 1 to Level 3 according to the observability and importance of the relevant input values: Level 1 input values: It refers to the market price (unadjusted) of the same

asset or liability available on the measurement date. Level 2 input values: It refers to the directly (that is, price) or indirectly (that is, derived from price) observable input value of an asset or liability, except for Level 1 quotation. Level 3 input values: It refers to the unobservable input value of an asset or liability.

When preparing the parent company only financial statements, the Company accounted for subsidiaries and associates using the equity method. In order to agree with the amount of net income, other comprehensive income, and equity attributable to shareholders of the parent in the Parent Company Only financial statements, the differences in the accounting treatment between the parent company only basis and the consolidated basis were adjusted under the heading of investments accounted for using equity method, share of profit (loss) of subsidiaries and associates accounted for using equity method, share of other comprehensive income of subsidiaries and associates accounted for using equity method.

(3) Classification criteria for classifying assets and liabilities as current and noncurrent

Current assets include:

A) Assets are held primarily for trading purposes.
B) Assets that are expected to be realized within 12 months after the reporting period; and
C) Cash and cash equivalents (excluding restricted items that will be exchanged or used to liquidate liabilities within 12 months after the balance sheet date).

Current liabilities include:

A) Liabilities held primarily for trading purposes.
B) Liabilities that will be maturing for settlement within 12 months after the balance sheet day (even if a refinancing agreement to reschedule
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payments on a long-term basis is completed after the reporting period and before the financial statements are authorized for issue), and.

C) Liabilities that cannot be unconditionally extended for at least 12 months after the balance sheet date.

Assets and liabilities other than current assets and current liabilities are classified as noncurrent assets and noncurrent liabilities.

(4) Foreign Currency

The Company that has financial reports prepared in a currency (foreign currency) other than its functional currency shall have it converted into the functional currency at the exchange rate on the trading day.

Foreign currency transactions are converted in accordance with the closing exchange rate on the balance sheet date. The exchange difference amount arising from the settlement or exchange transaction should be recognized as profit and loss.

Non-monetary items in foreign currency measured at the fair value are converted at the exchange rate on the day when the fair value is determined, and the resulted exchange difference is recognized as profit and loss. However, if the change in fair value is recognized in other comprehensive income, the resulted exchange difference is recognized in the other comprehensive income.

Non-monetary items in foreign currency measured at the historical cost are converted at the exchange rate on the trading day and will not be converted again.

(5) Inventory

Inventories include raw materials, work-in-process products, and finished products. Inventory is measured at the lower of cost or net realizable value. The comparison of the cost and net realizable value, except for the same type of inventory, is itemized. Net realizable value refers to the estimated selling price under normal circumstances, minus the estimated cost required to complete the project and the estimated cost required to complete the sale. The weighted average method is adopted for the calculation of inventory cost.

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(6) Investments in Subsidiaries

Investments accounted for using the equity method include investments in subsidiaries.

A subsidiary is an entity that is controlled by the Company.

Under the equity method, an investment in a subsidiary is initially recognized at cost and adjusted thereafter to recognize the Company’s share of profit or loss and other comprehensive income of the subsidiary as well as the distribution received. The Company also recognizes its share in the changes in the equity of subsidiaries.

Changes in the Company’s ownership interests in subsidiaries do not result in the Company losing control over the subsidiaries are accounted for as equity transactions. Any difference between the carrying amount of the subsidiary and the fair value of the consideration paid or received is recognized directly in equity.

When the share loss of a subsidiary for the Company is equal to or exceeds its equity in the subsidiary (including the book value of the subsidiary under equity method and the other long-term equities substantially attributable to the Company’s composition on the net investment of the subsidiary), the loss is recognized according to the ongoing shareholding ratio.

The acquisition cost exceeding the shares at a net fair value of identifiable assets and liabilities that constitute the subsidiary business to which the Company is entitled on the date of acquisition shall be recognized as goodwill. Such goodwill includes the book value of the investments and may not be amortized. The shares at the net fair value of identifiable assets and liabilities that constitute the subsidiary business which the Company is entitled on the date of acquisition exceeding the acquisition cost shall be recognized as current revenue.

The Company takes overall consideration of cash-generating units and compares them with the recoverable amount and book value of the financial statements in the evaluation of impairment. In case of an increase in the recoverable amount of assets, the reversal of impairment loss will be recognized as revenue. Nonetheless, the book value of the assets after the

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reversal of impairment loss may not exceed the book value less the due amortization without recognizing the impairment loss. The impairment loss attributable to goodwill may not be reversed later.

When the Company loses control of a subsidiary, any retained investment of the former subsidiary is measured at the fair value at that date. A gain or loss is recognized in profit or loss and calculated as the difference between (a) the aggregate of the fair value of consideration received and the fair value of any retained interest at the date when control is lost; and (b) the previous carrying amount of the investments in such subsidiary. In addition, the Company shall account for all amounts previously recognized in other comprehensive income in relation to the subsidiary on the same basis as would be required if the subsidiary had directly disposed of the related assets and liabilities.

Unrealized gains and losses from downstream transactions between the Company and its subsidiaries are eliminated in the parent company only financial statements. Gains and losses resulting from upstream and lateral transactions between the Company and its subsidiaries are recognized in the parent company only financial statements only to the extent that they are unrelated to the Company's interest in the subsidiaries.

(7) Property, plant, and equipment

Property, plant, and equipment are recognized at the cost first and then measured at the cost net of accumulated depreciation and accumulated impairment loss subsequently.

Property, plant, and equipment are depreciated on a straight-line basis within the service life for each significant part separately. The Company shall review the estimated service life, residual value, and depreciation method at least once at the end of each year and defer the effect of changes on the applicable accounting estimates.

The difference between the net disposal amount of the property, plant, and equipment and the book amount is recognized as profit and loss at the time of having them delisted.

(8) Intangible assets

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A) Individually acquired:

Individually acquired finite-lived intangible assets are initially measured at cost and subsequently measured at cost less accumulated amortization. Intangible assets are amortized on a straight-line basis over their useful lives. The Company review the estimated useful lives, residual values, and amortization methods at least at each annual reporting period end and defers the effect of any accounting estimate changes. Indefinite-lived intangible assets are reported at cost less 。 accumulated impairment losses.

B) Derecognition:

When intangible assets are derecognized, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss for the period.

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

The Company assesses on each balance sheet date whether there is any sign indicating that property, plant and equipment, right-of-use assets, and intangible assets may have been impaired. If there is any sign of impairment, the recoverable amount of the asset should be estimated. If the recoverable amount of an individual asset cannot be estimated, the Company should estimate the recoverable amount of the cash-generating unit to which the asset belongs.

For intangible assets with indefinite-lived and are not yet available for use, impairment tests are conducted at least annually and when there are indications of impairment.

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

When the impairment loss is subsequently reversed, the book value of the asset or the cash-generating unit is adjusted up to the revised recoverable amount; however, the increased book value may not exceed the

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book value (net of amortization or depreciation) without any impairment loss of the assets or cash-generating unit recognized in previous years. The reversal of the impairment loss is recognized in the profit and loss.

(10) Financial instruments

Financial assets and financial liabilities are recognized in the parent company only balance sheet when the contractual terms of the instrument become binding on the Company.

When financial assets or financial liabilities are initially recognized, if they are not measured at fair value through profit or loss, they are measured at fair value plus transaction costs directly attributable to the acquisition or issue of the financial asset or financial liability. The transaction costs directly attributable to the acquisition or issue of financial assets or financial liabilities measured at fair value through profit or loss are recognized immediately in profit or loss.

A) Financial assets

Conventional transactions of financial assets are recognized and derecognized in accordance with the trade date accounting.

a) Type of measurement

The types of financial assets held by the Company are financial assets measured at fair value through profit and loss, financial assets measured at amortized cost, and equity instrument investment measured at fair value through other comprehensive income. (I) Financial assets measured at fair value through profit and loss

Financial assets measured at fair value through profit and loss include financial assets measured at fair value through profit and loss mandatorily. Financial assets measured at fair value through profit and loss mandatorily include equity instrument investments that are not designated by the Company to be measured at fair value through other comprehensive income and debt instrument investments that are not classified as to be measured at amortized cost or measured at fair value through other comprehensive income.

Financial assets measured at fair value through profit or loss are measured at fair value, and any dividends or interest generated

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by them are recognized separately in other income and interest income, respectively. Any gains or losses resulting from the subsequent measurement are recognized in other income or loss. Please refer to Note 27 for the determination of fair value.

(II) Financial assets measured at amortized cost

If an investment in financial assets of the Company meets both of the following conditions, it is classified as a financial asset measured at amortized cost:

(i) It is held within a business model whose objective is to hold financial assets to collect contractual cash flow; and
(ii) 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. Financial assets measured at amortized cost (including cash and
cash equivalents, accounts receivable and other receivable measured at amortized cost, term deposits with original maturities of more than 3 months) after initial recognition are subsequently measured at the amortized cost, the book value determined by the effective interest method less any impairment losses. Any foreign exchange gains or losses are recognized in profit or loss.

Except for the following two circumstances, interest income is calculated by having the effective interest rate multiplied by the total book value of the financial assets:

(i) For financial assets with the purchase or original impairment, interest income is calculated by having the effective interest rate after credit adjustment multiplied by the amortized cost of the financial asset.
(ii) For financial assets not with the purchase or original credit impairment, but subsequently become credit-impaired financial assets, interest income should be calculated by having the effective interest rate multiplied by the amortized cost of the financial asset from the next reporting period after the credit impairment.
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Cash equivalents include time deposits and bonds with a repurchase agreement that are highly liquid and have a maturity of less than 3 months from the acquisition date. They can be easily converted into a fixed amount of cash and have a minimal risk of value fluctuation and are used to meet short-term cash commitments.

(III) Equity instruments investment measured at fair value through other comprehensive income

The Company at the time of initial recognition can make an irrevocable choice to have the equity instrument measured at fair value through other comprehensive income investment that is not held-for-trade and not recognized through a business merger or with considerations paid.

Equity instrument investment is measured at fair value through other comprehensive income; subsequent changes in fair value are reported in other comprehensive income and accumulated in other equities. At the time of disposing of the investment, the accumulated profit and loss is directly transferred to retained earnings and is not reclassified as profit and loss.

Dividends from equity instrument investment measured at fair value through other comprehensive income are recognized in the profit and loss when the Company’s right to receive payments is established unless the dividends clearly represent part of the investment cost recovered.

b) Impairment of financial assets

The Company assesses the impairment loss of financial assets (including accounts receivable) measured at amortized cost according to the expected credit loss on each balance sheet date.

Allowance for loss is recognized as accounts receivable according to the expected credit loss throughout the duration. For other financial assets, assess whether there is a significant increase in credit risk after the initial recognition, if there is no significant increase, the allowance for loss is recognized according to the 12-month expected credit loss; however, if there is a significant increase in credit risk, the allowance

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for loss is recognized according to the expected credit loss throughout the duration.

Expected credit loss is the weighted average credit loss based on the risk of default. The 12-month expected credit loss refers to the expected credit loss caused by the possible default event of the financial instrument within 12 months after the reporting date, and the expected credit loss throughout the duration refers to the expected credit loss caused by all possible default events throughout the duration of the financial instrument.

The impairment loss of all financial assets is with the book amount adjusted down through the allowance account.

c) Derecognition of financial assets

The Company will have the financial assets derecognized only when the contractual right from the cash flow of the financial asset is terminated, or the financial asset has been transferred and almost all the risks and rewards related to the ownership of the asset have been transferred to other companies.

When a financial asset measured at amortized cost is derecognized entirely, the difference between the book value and the consideration received is recognized in the profit or loss. When equity instrument investments measured at fair value through other comprehensive income are derecognized entirely, the accumulated profit and loss is directly transferred to retained earnings without having it reclassified as profit and loss.

B) Financial liabilities

a) Subsequent measurement

Except for financial liabilities at fair value through profit or loss, all financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

When financial liabilities are derecognized, the difference between the book value and the total consideration paid (including any noncash transferred assets or assumed liabilities) is recognized in profit or loss.

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C) Derivatives

The Company has entered foreign exchange swap contracts to manage its foreign exchange risk.

Derivatives are initially recognized at fair value on the date the derivative contracts are entered into and are subsequently remeasured at fair value at each balance sheet date. Any resulting gains or losses from subsequent measurement are recognized directly in profit or loss, unless the derivative is designated and qualifies as an effective hedging instrument, in which case the timing of recognition in profit or loss depends on the nature of the hedging relationship. When the fair value of a derivative is positive, it is recognized as a financial asset; when the fair value is negative, it is recognized as a financial liability.

(11) Income recognition

The Company, after identifying the performance obligations in the contract will have the transaction price amortized for each performance obligation and will recognize income when each performance obligation is fulfilled.

Commodity sales income from the sale of chemical products is recognized at the time of shipment because customers have confirmed prices and rights to use the products, as well as the primary responsibility for resale and the risk of obsolescence of the products. The Company recognizes revenue and accounts receivable at that point in time.

(12) Lease

The Company assesses whether it is (or includes) a lease contract on the contract date.

A) The Company is the lessor

When the lease clause is to transfer almost all the risks and rewards attached to the ownership of the asset to the lessee, it is classified as a financial lease. All other leases are classified as operating leases.

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Under operating leases, lease payments are recognized as revenue on a straight-line basis over the term of the relevant lease, after deduction of any lease incentives.

B) The Company is the lessee

Except for the lease payments of low-value underlying asset leases and short-term leases that are subject to the applicable recognition, the exemption is recognized as expenses on a straight-line basis during the lease period, other leases are recognized as right-of-use assets and lease liabilities on the lease start date.

The right-of-use asset is originally measured at cost (including the original measurement amount of the lease liability, the lease payment paid before the lease start date minus the lease incentives received, and the original direct cost and the estimated cost of the restored underlying asset), and is subsequently measured at the cost net of the accumulated depreciation and accumulated impairment loss; also, adjust the remeasurement amount of the lease liability. The right-of-use assets are separately expressed on the balance sheet.

Right-of-use assets are depreciated on a straight-line basis from the lease start date to the expiration of the service life or the expiration of the lease period, whichever is earlier.

The lease liability was originally measured at the present value of the lease payment (including fixed payments). If the implicit interest rate of the lease is easy to determine, the lease payment is discounted at such an interest rate. If the interest rate is not easy to determine, the lessee’s incremental loan interest rate is applied.

Subsequently, the lease liability is measured at the amortized cost in accordance with the effective interest approach, and the interest expense is amortized during the lease period. If there are changes occurring in the lease period, the Company will re-measure the lease liability and relatively adjust the right-of-use asset. However, if the book value of the right-of-use asset is reduced to zero, the remaining re-measurement amount is recognized in the profit and loss. Lease liabilities are separately expressed in the parent company only balance sheet.

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(13) Borrowing Cost

All borrowing costs are recognized as profit and loss in the current period.

(14) Employee Benefit

A) Short-term employee benefits

Short-term employee benefit-related liabilities are measured by the expected non-discounted amount of cash to be paid in exchange for employee services.

B) Retirement benefits

The pension of the defined contribution plan is recognized as an expense for an amount equivalent to the retirement fund appropriated for the employee’s service period.

The defined benefit cost of a defined benefit retirement plan (including service cost, net interest, and remeasurement) is calculated using the projected unit credit method. Service cost (including current service cost and settlement gains or losses) and net defined benefit liability (assets) net interest are recognized as employee benefits expense when they occur and when settlements occur. Remeasurement (including actuarial gains and losses and the return on plan assets net of interest) is recognized in other comprehensive income when it occurs and is included in the retained earnings and is not subsequently reclassified to profit or loss.

The net defined benefit liabilities (assets) are the appropriation shortage (surplus) of the defined benefit plan. The net defined benefit assets shall not exceed the present value of the refunded appropriation of the plan or the reduced appropriation in the future.

C) Other long-term employee benefits

The accounting treatment for other long-term employee benefits is like that of defined benefit retirement plans, except that any related remeasurements are recognized in the income statement.

(15) Stock-based compensation

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Restricted stock units (RSUs) are recognized as equity instruments at their fair value on the grant date, and the best estimate of the number of units expected to vest. The expenses are recognized on a straight-line basis over the vesting period, and Capital Surplus-Restricted Stock Units and other equity (unearned employee compensation) are adjusted accordingly. If the RSUs are immediately vested on the grant date, the entire expense is recognized on that date.

When the Company issues RSUs, other equity (unearned employee compensation) is recognized on the grant date, and Capital SurplusRestricted Stock Units is adjusted accordingly. If the RSUs are issued for consideration and the employees are required to return the consideration upon separation from the Company, the related payable should be recognized.

The estimated number of RSUs expected to vest is revised at each balance sheet date by the Company. If the original estimate is revised, the impact is recognized in the profit and loss, and the cumulative expense is adjusted to reflect the revised estimate, with a corresponding adjustment to "Capital Surplus-Restricted Stock Units".

(16) Income tax

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

A) Current income tax

The Company determines the current income (loss) in accordance with the law and regulations established by each income tax agency in order to calculate the income tax payable (recoverable) accordingly.

The income tax to be levied on the undistributed earnings that are calculated in accordance with the Income Tax Act of the Republic of China is to be recognized in the year it is resolved in the shareholders meeting.

Adjustments to income tax payable for previous years are included in current income tax.

B) Deferred income tax

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Deferred income tax is calculated according to the temporary difference between the book value of assets and liabilities and the tax basis for calculating taxable income.

Deferred income tax liabilities are generally recognized for all taxable temporary differences, while deferred income tax assets are recognized when there is likely having income tax credit derived from taxable income available for deducting temporary differences and loss credit.

Taxable temporary differences related to investment in subsidiaries and associates are recognized as deferred income tax liabilities unless otherwise provided that the Company can control the timing of the reversion of the temporary differences; and the temporary differences are unlikely to be reversed in the foreseeable future. The deductible temporary differences related to this type of investment will be recognized as deferred income tax assets only if it is likely to have sufficient taxable income to realize the temporary differences, and within the scope expected to be reversed in the foreseeable future.

The book amount of deferred income tax assets is reviewed on each balance sheet date, and the book amount is reduced for those that are no longer likely to have sufficient taxable income to recover all or part of the assets. Those that have not been recognized as deferred income tax assets will also be reviewed on each balance sheet date, and the book amount is increased for those that are likely to generate taxable income in the future for the recovery of all or part of the assets.

Deferred income tax assets and liabilities are measured at the tax rate of the period when the liability is expected to be settled or the asset is expected to be realized. The said tax rate is based on the tax rate and tax law that has been legislated or substantively legislated on the balance sheet date. The measurement of the deferred income tax liabilities and assets reflects the tax consequences arising from the way the Company expects to recover or settle the book amount of the assets and liabilities on the balance sheet date.

C) Current and deferred income tax

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Current and deferred income taxes are recognized in profit and loss; however, current and deferred income taxes related to items recognized in other comprehensive income or directly included in equity are recognized in other comprehensive income or directly included in equity, respectively.

5. Significant Accounting Judgments, Estimations, and the Main Sources of Assumption Uncertainties

When the Company adopts accounting policies, for those that cannot easily obtain relevant information from other sources, the management must make relevant judgments, estimations, and assumptions based on historical experience and other relevant factors. Actual results may differ from estimates.

The Company has taken into consideration the economic environment, inflation, market interest rate volatility, and peer competition in assessing significant accounting estimates related to cash flow projections, growth rates, discount rates, profitability, and other factors., and the management will continue to review the estimates and basic assumptions. If the revision of the estimate only affects the current period, it is recognized in the current period; if the revision of the accounting estimate affects both the current period and the future period, it is recognized in the current period and the future period.

6. Cash and Cash Equivalents

Cash and Cash Equivalents
Cash on hand and petty cash Bank checking deposit and Demand deposit Cash equivalents Bank term deposit Repurchase agreement bonds Total	December 31, 2024		December 31, 2023
		$ 95 65,538 42,981 - $ 108,614		$ 184 83,370 1,514 15,389 $ 100,457

The interest rate range of bank deposits on the balance sheet date is as follows:

follows:
Bank deposit Repurchase agreement bonds	December 31, 2024 0.01%`～`3.40% -	December 31, 2023
		0.05%`～`4.45% 5.50%

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7. Financial Assets Measured at Fair Value through Profit and Loss

Financial assets–current Measured at fair value through profit and loss mandatorily Non-derivative financial assets - Foreign Bonds - Domestic TWSE/TPEx listing stock - Domestic Fund Beneficiary certificate Financial liabilities–current Financial liabilities held for trading Non-hedging derivatives `－`foreign exchange swap contracts	December 31, 2024 $ 22,335 878 1,974 $ 25,187 $ 50	December 31, 2023	December 31, 2023
			$ 18,747 470 6,379 $ 25,596 $ -

At the balance sheet date, the Company has the following outstanding foreign exchange swap contracts that have not yet matured and are not designated for hedge accounting.

December 31, 2024

December 31, 2024
Contract Amount (in Thousand) USD 120	Maturity date 2025/2/20	Pay-side exchange rate range 32.50	Receive-side exchange rate range
			32.23

8. Financial Assets Measured at Fair Value through Other Comprehensive

income

Equity investment

December 31, 2024 December 31, 2023 Non-current Domestic investment Non-TWSE/TPEx listing stock $ 1,253 $ 1,555

The Company has based on the mid-term and long-term strategic purpose to invest in non-TWSE/TPEx listing stocks and expects to make profits

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through long-term investment. The management of the Consolidated Company believes that if the short-term fluctuation in the fair value of the investment is included in the profit and loss, it is inconsistent with the longterm investment plan; therefore, the management chooses to have such investments measured at fair value through other comprehensive income.

9. Financial Assets Measured at the Amortized Cost

Current Term deposits with original maturity of more than 3 months	December 31, 2024 $ -	December 31, 2023	December 31, 2023
			$ 40,254

As of December 31, 2023, the interest rate range of time deposits with an original maturity of more than 3 months was 4.45%.

10. Notes Receivable and Accounts Receivable

Notes receivable Measured at the amortized cost Total book amount - related parties Less: Allowance for loss Total book amount - non-related parties Less: Allowance for loss Accounts receivable Measured at the amortized cost Total book amount - related parties Less: Allowance for loss Total book amount - non-related parties Less: Allowance for loss	December 31, 2024 $ 1,500 ( 8) 1,492 29,154 ( 95) 29,059 $ 30,551 $ 18,316 ( 36) 18,280 127,558 ( 716) 126,842 $ 145,122	December 31, 2023	December 31, 2023
	( ( ( (	( ( ( (	$ 2,990 15) 2,975 25,909 83) 25,826 $ 28,801 $ 24,480 96) 24,384 101,410 313) 101,097 $ 125,481

(1) Accounts receivable

The credit period granted by the Company to customers is generally between 30 and 90 days from the end of the month. The allowance for loss

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is estimated based on the analysis of overdue accounts, customer creditworthiness, and financial status to estimate the number of uncollectible accounts. Before accepting new customers, the Company evaluates the credit quality of the potential customer through a credit rating system and sets the customer's credit limit. The customer's credit limit and rating are reviewed regularly every year.

The Company recognizes the allowance for loss of accounts receivable based on the expected credit loss over the remaining lifetime of the accounts. The expected credit loss is calculated using a provision matrix, which considers the customer's past default history and current financial condition, the economic situation of the industry. Because the credit loss historical experience of the Company shows no significant differences in the loss patterns among different customer groups, the provision matrix does not distinguish between customer groups, but only sets the expected credit loss rate based on the number of days overdue of accounts receivable.

The provision for doubtful accounts and notes receivable of the Company is measured based on the provision matrix as follows:

December 31, 2024

December 31,	2024
Total book amount Allowance for loss (expected credit loss in the duration) Amortized cost	Not Overdue $ 166,149 ( 233) $ 165,916	O v e r d u e 1 ~ 90 d a y s $ 9,771 ( 116) $ 9,655	O v e r d u e 91~275 d a y s $ 120 ( 18) $ 102		O v e r d u e 276~459 d a y s $ - - $ -		O v e r d u e Over 460 d a y s $ 488 488) $ -		Total
	(	(	(			(		(	$ 176,528 855) $ 175,673

December 31, 2023

December 31,	2023
Total book amount Allowance for loss (expected credit loss in the duration) Amortized cost	Not Overdue $ 134,857 ( 161) $ 134,696	O v e r d u e 1 ~ 90 d a y s $ 19,231 ( 155) $ 19,076	O v e r d u e 91~275 d a y s $ 605 ( 95) $ 510		O v e r d u e 276~459 d a y s $ - - $ -		O v e r d u e Over 460 d a y s $ 96 96) $ -		Total
	(	(	(			(		(	$ 154,789 507) $ 154,282

The changes in the allowance for loss of the accounts receivable were as follows:

2024 2023 Beginning Balance $ 507 $ 950

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Add: Expected credit impairment loss appropriated (reversed) for the current year Ending Balance		2024 348 $ 855	(	2023 443) $ 507

11. Inventories

entories
Commodities Finished goods Raw materials	December 31, 2024 $ 958 70,642 69,973 $ 141,573	December 31, 2023
			$ 1,055 65,538 65,161 $ 131,754

The nature of the cost of goods sold is as follows:

Cost of inventory sold Inventory impairment loss(reversed) Physical inventory Gain(loss)	2024 $ 586,600 ( 4,228) ( 127) $ 582,245	2023
		$ 519,252 ( 6,735) 34 $ 512,551

The reversal of inventory impairment loss was due to the disposal of obsolete or slow-moving inventory.

12. Investments Accounted for Using Equity Method

Investments in subsidiaries vestments in subsidiaries Urasia International Inc. (URASIA) Headway Polyurethane Corporation Limited (TPU Company)	December 31, 2024 $ 823,571 December 31, 2024 $ 731,542 92,029 $ 823,571	December 31, 2023 $ 774,258 December 31, 2023	December 31, 2023 $ 774,258 December 31, 2023
			$ 683,015 91,243 $ 774,258

(1) Investments in subsidiaries

Name of Subsidiary URASIA TPU Company	Percentages for ownership equity and voting rights	Percentages for ownership equity and voting rights
	December 31, 2024 100% 50%	December 31, 2023
		100% 50%

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The Company invested in URASIA in 1996 for the purpose of establishing overseas production and marketing bases through engaging in various overseas investment businesses. As of December 31, 2023, URASIA has mainly invested in Shanghai Huiyu Construction Co., Ltd. (with a 74% shareholding, referred to as Shanghai Huiyu Company), Headway Advanced Materials (Vietnam) Co., Ltd. (with a 100% shareholding, referred to as Headway Vietnam Company), and Cheng Yu Develop Co., Ltd. (with a 100% shareholding, referred to as Cheng Yu Company). Cheng Yu Company invested Fo-Shan City Shanshui Lianmei Chemical Co., LTD. (with a 100% shareholding, referred to as Shanshui Lianmei Company) in Mainland China, and Shanghai Huiyu Company acquired Anhui Huiyu Materials Technology Co., Ltd. (with a 100% shareholding, referred to as Anhui Huiyu Company) in Mainland China. The investment cases in Mainland China have been approved by the Investment Commission of the Ministry of Economic Affairs.

The Company invested and established TPU Company on February 24, 2006, with a shareholding ratio of 50%. The Company is mainly engaged in the manufacture and sales of TPU.

13. Property, Plant and Equipment

Cost Balance January 1, 2024 Addition Disposal Reclassification Net exchange difference Accumulated depreciation Balance January 1, 2024 Depreciation Disposal Balance December 31, 2024 Net balance December 31, 2024 Cost Balance January 1, 2023 Addition Disposal Balance December 31, 2023 Accumulated depreciation Balance January 1, 2023 Depreciation Disposal Balance December 31, 2023 Net balance December 31, 2023		Land Land improvements	Land Land improvements	House and Building	Machinery equipment Transportation equipment	Machinery equipment Transportation equipment	Miscellaneous equipment	Other equipment $ 115,089 4,225 384 ) ( 883 $ 119,813 $ 74,541 8,861 384) ( $ 83,018 $ 36,795 $ 108,426 7,555 892) ( $ 115,089 $ 66,629 8,804 892 ) ( $ 74,541 $ 40,548	Total $ 539,180 17,164 4,749 ) 32,929 $ 584,524 $ 356,442 23,752 4,749) $ 375,445 $ 209,079 $ 522,078 18,759 1,657) $ 539,180 $ 338,468 19,631 1,657 ) $ 356,442 $ 182,738
		$ 109,145 - - - $ 109,145 $ - - - $ - $ 109,145 $ 109,145 - - $ 109,145 $ - - - $ - $ 109,145	$ 151 - - - $ 151 $ 151 - - $ 151 $ - $ 151 - - $ 151 $ 151 - - $ 151 $ -	$ 130,981 789 - ( 1,446 $ 133,216 $ 125,314 2,402 - ( $ 127,716 $ 5,500 $ 130,205 776 - ( $ 130,981 $ 122,695 2,619 - ( $ 125,314 $ 5,667	$ 152,721 7,269 1,009 ) ( 30,600 $ 189,581 $ 132,420 8,932 1,009) ( $ 140,343 $ 49,238 $ 145,136 7,695 110) ( $ 152,721 $ 127,681 4,849 110 ) ( $ 132,420 $ 20,301	$ 19,236 3,913 2,526 ) ( - $ 20,623 $ 15,073 2,172 2,526) ( $ 14,719 $ 5,904 $ 18,626 974 364) ( $ 19,236 $ 13,345 2,092 364 ) ( $ 15,073 $ 4,163	$ 11,857 968 830 ) ( - $ 11,995 $ 8,943 1,385 830) ( $ 9,498 $ 2,497 $ 10,389 1,759 291) ( $ 11,857 $ 7,967 1,267 291 ) ( $ 8,943 $ 2,914

Depreciation expenses are accrued on a straight-line basis according to the following years of useful life:

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Land improvements	25 Years
House and Building	3~35 Years
Machinery equipment	1~14 Years
Transportation equipment	3~10 Years
Miscellaneous equipment	3~7 Years
Other equipment	1~18 Years

Please refer to Note 29 for the property, plant and equipment that are pledged as collateral for loans.

14. Lease Agreement

(1) Right-of-use assets

Right-of-use assets
Book amount of right-of-use assets Transportation equipment Depreciation expense of right-of- use assets Transportation equipment	December 31, 2024 $ - 2024 $ 212	December 31, 2023
			$ 212 2023
			$ 635

Apart from the recognition of depreciation expenses, there was no significant subleasing or impairment of the right-of-use assets of the Company during the period from January 1 to December 31, 2024, and 2023, respectively.

(2) Lease liability

Book amount of lease liability Current Non-current	December 31, 2024 $ - $ -	December 31, 2023	December 31, 2023
			$ 215 $ -

The discount rate ranges for lease liabilities are as follows:

Transportation equipment	December 31, 2024 -	December 31, 2023
		1.07%

(3) Key leasing activities and terms:
37 -

The Company leases transportation equipment for operational use for a period of 3 years. At the end of the lease term, the Company has no bargain purchase option for the leased transportation equipment.

(4) Other lease information

Short-term lease expense Low-value assets lease expense Total lease cash (outflow)	(	2024 $ 491 $ 32 $ 738)	(	2023 $ 470 $ 39 $ 1,165)

The Company chose to apply the recognition Exemption for assets, such as employee dormitories, company vehicles, and office equipment, qualify for short-term leases and qualify for low-value asset leases, and did not recognize related right-of-use assets and lease liabilities for such leases.

15. Intangible Assets

Cost Balance January 1. 2024 Balance December 1. 2024 Accumulated amortization and impairment Balance January 1. 2024 Amortization expense Balance December 1. 2024 Net balance December 1. 2024 Cost Balance January 1. 2023 Acquired separately Disposal Balance December 1. 2023 Accumulated amortization and impairment Balance January 1. 2023 Amortization expense Disposal Balance December 1. 2023 Net balance December 1. 2023	Computer software	Computer software
	( (	$ 970 $ 970 $ 126 323 $ 449 $ 521 $ 311 970 311) $ 970 $ 112 126 112) $ 126 $ 844

38 -

Amortization expenses are accrued on a straight-line basis according to the following years of useful life:

Computer software

3 Years

16. Other Assets

Current Prepaid expenses Income tax refund receivable Other receivable Temporary payments Other Total Non-current Refundable deposit Net Defined Benefit Asset Advance payments for equipment and construction Non-current rowings Short-term borrowings Pledged loans Bank loans Unsecured loans Credit line loans Other Short-term borrowings - related parties Interest rates rank	December 31, 2024 $ 1,637 1,586 1,240 177 63 $ 4,703 $ 2,004 850 7,228 $ 10,082 December 31, 2024 $ 50,000 30,000 65,570 $ 145,570 1.91%`～`1.96%	December 31, 2023
		$ 1,560 1,307 316 115 39 $ 3,337 $ 1,997 577 35,841 $ 38,415 December 31, 2023
ro
Sh
		$ 92,756 - 61,410 $ 154,166 1.82%`～`1.84%

17. Borrowings

(1) Short-term borrowings

Please refer to Note 29 for the assets as collateral for loans. Please refer to Note 28 for endorsements and guarantees provided by related parties for the bank loan facilities of the Company.

(2) Short-term bills payable
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Commercial paper payable Less: Discount on short-term bills payable	December 31, 2024 $ - - $ -	December 31, 2023	December 31, 2023
		(	$ 20,000 16) $ 19,984

The outstanding short-term bills payable, which have not yet matured, are as follows:

December 31, 2023

Guarantor/Acce ptor institution	Face value	Face value		Discount amount		Book value	Interest rate range	Collateral	Book value of Collateral	Book value of Collateral
Commercial paper payable China bills finance co.		$20,000		$ 16		$19,984	1.83%	None		$ -

(3) Long-term borrowings

ng-term borrowings
Pledged loans Bank loan Bank CHB (1) First Bank (2) Hua Nan Bank (3) Bank CHB (4) Bank CHB (5) Hua Nan Bank (6)	December 31, 2024 $ 165,000 35,000 50,000 - - - $ 250,000	December 31, 2023
			$ 165,000 35,000 50,000 $ 250,000

Remark 1 The bank loan is secured by the Consolidated Company's real estate, plant, and equipment (refer to Note 29), with a maturity date of December 30, 2026. As of December 31, 2024, the effective annual interest rate is 1.945%.
Remark 2 The bank loan is secured by related parties (refer to Note 28), with a maturity date of May 17, 2029. As of December 31, 2024, the effective annual interest rate is 2.22%.
Remark 3 The bank loan is secured by the Company's real estate, plant, and equipment (refer to Note 29), with a maturity date of November 1, 2026. As of December 31, 2024, the effective annual interest rate is 2.02%.
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Remark 4 The bank loan is secured by the Company's real estate, plant, and equipment (refer to Note 29), with a maturity date of November 6, 2025. As of December 31, 2023, the effective annual interest rate is 1.82%. It was fully repaid on December 30, 2024.

Remark 5 The bank loan is secured by the Company's real estate, plant, and equipment (refer to Note 29), with a maturity date of November 3, 2028. As of December 31, 2023, the effective annual interest rate is 2.095%. It was fully repaid on November 4, 2024.
Remark 6 The bank loan is secured by the Company's real estate, plant, and equipment (refer to Note 29), with a maturity date of October 11, 2025. As of December 31, 2023, the effective annual interest rate is 1.85%. It was fully repaid on November 1, 2024.

18. Other payable

er payable
Payroll and bonus payable Employee & director compensation payable Payables on equipment Professional service payable Interest payable Insurance payable Other	December 31, 2024 $ 28,323 4,248 2,501 4,582 1,990 1,387 10,023 $ 53,054	December 31, 2023
			$ 20,731 2,715 8,044 4,040 1,528 1,432 17,868 $ 56,358

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19. Retirement Benefit Plan

(1) Defined contribution plan

The retirement pension system of the Company is a defined contribution plan under the "Labor Pension Act" regulated by the government. The Company contributes 6% of employees' monthly salaries to their personal accounts at the labor insurance bureau as retirement pension.

(2) Defined benefit plan

The retirement pension system of the Company is a government-managed defined benefit retirement plan under the “Labor Standards Act” of Taiwan R.O.C. The payment of employee retirement pension is calculated based on the length of service and the average monthly salary for the six months prior to the approved retirement date. The Company contributes 4% of the total monthly salary of employees to the retirement pension, which is deposited into an account in the name of the “Supervisory Committee of Business Entities’ Labor Retirement Reserve” at Bank of Taiwan. Before the end of the fiscal year, if the account balance is insufficient to pay the workers who are expected to meet the retirement conditions in the next year, the difference will be paid in a lump sum before the end of March of the next year. This account is managed by the “Bureau of Labor Funds, Ministry of Labor,” and the Company has no right to affect the investment management strategy.

The defined benefit plan included in the parent company only balance sheet is as follows:

Present value of the defined benefit obligation Fair value of the planned assets Net defined benefit liabilities (assets)	December 31, 2024	December 31, 2024	December 31, 2023	December 31, 2023
	( (	$ 9,578 10,428) $ 850)	( (	$ 13,469 14,046) $ 577)

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

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January 1, 2023 Service cost Current service cost Interest expense (income) Recognized in profit and loss Re-measurement amount Return on planned assets (except for the amount included in net interest) Actuarial profit –changes in financial assumption Actuarial gain –adjustment by experience Recognized in other comprehensive income Appropriation of employer December 31, 2023 Service cost Current service cost Settlement P&L Interest expense (income) Recognized in profit and loss Re-measurement amount Return on planned assets (except for the amount included in net interest) Actuarial loss –changes in financial assumption Actuarial gain –adjustment by experience Recognized in other comprehensive income Appropriation of employer Benefit Paid Settlement December 31, 2024	Present value of the defined benefit obligation $ 13,724 57 206 263 - 311 ($ 829) ( 518) - 13,469 58 15 168 241 - ( 262) 1,245 983 - ( 4,487) ( 628) $ 9,578	Fair value of the plan assets ($ 13,332) - ( 204) ( 204) ( 90) - $ - ( 90) ( 420) ( 14,046) - - ( 179) ( 179) ( 1,198) - - ( 1,198) ( 120) 4,487 628 ($ 10,428)	Net defined benefit liabilities (assets) $ 392 57 2 59 ( 90) 311 ($ 829) ( 608) ( 420) ( 577) 58 15 ( 11) 62 ( 1,198) ( 262) 1,245 ( 215) ( 120) - - ($ 850)

The amount recognized in profit and loss for defined benefit plan by function is summarized as follows:

Cost of sales Operating expenses		2024 $ 4 58 $ 62		2023
				$ 1 58 $ 59

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The Company is exposed to the following risks due to the pension system of the “Labor Standards Act”:

A) Investment risk: The “Bureau of Labor Funds, Ministry of Labor” invests in domestic (foreign) equity securities, debt securities, and bank deposits through its own operation and entrusted management services. However, the distributable amount of the Consolidated Company’s planned assets is an amount not less than the income generated from a 2-year time deposit interest rate of the local bank.
B) Interest rate risk: The decline in the interest rate of government bonds will cause the present value of the defined benefit obligations to go up; however, the debt investment returns of the planned assets will also go up, and the impact of the two on the net defined benefit liabilities will partially offset each other.
C) Salary risk: The calculation of the present value of the defined benefit obligation is by referring to the future salary of the members of the plan. Therefore, the increase in the salary of the members of the plan will cause the present value of the defined benefit obligation to go up.

The present value of the defined benefit obligation of the Consolidated Company is actuarially calculated by a qualified actuary. The major assumptions made regarding the measurement date are as follows:

Discount rate Expected salary increase rate	December 31, 2024 1.5% 2.00%	December 31, 2023
		1.25% 2.00%

If the major actuarial assumptions experience reasonably possible changes, with all other assumptions remain unchanged, the amount of increase (decrease) in the defined benefit obligation present value is as follows:

ows:
Discount rate Increased by 0.25% Decreased by 0.25% Expected salary increase rate Increased by 0.25% Decreased by 0.25%	December 31, 2024 ($ 237) $ 245 $ 240 ($ 233)	December 31, 2023
	( (	( (	$ 311) $ 322 $ 314 $ 305)

44 -

Since actuarial assumptions may be correlated, it is unlikely that there is only one single assumption changed, so the aforementioned sensitivity analysis may not be able to reflect the actual changes in the present value of the defined benefit obligations.

Amount expected to be appropriate in 1 year Average due date of the defined benefit obligation	December 31, 2024 $ - 10.07 Years	December 31, 2023 $ 600 9.40 Years

20. Equity

(1) Common stock capital

Authorized stock shares (thousand shares) Authorized capital stock Stock shares issued and paid in full (thousand shares) Outstanding capital stock	December 31, 2024 80,000 $ 800,000 60,107 $ 601,070	December 31, 2023 80,000 $ 800,000 60,107 $ 601,070

The par value of the issued common shares is NT$ 10 per share, with each share entitled to one voting right and the right to receive dividends.

The Company's Shareholders' Meeting resolved to implement capital reduction on May 31, 2023, which was further approved and came into effect by Taiwan Stock Exchange Corporation on July 18, 2023. The amount of capital reduction is NTD 101,940 thousand and shares to be cancelled are 10,194 thousand shares. Capital reduction percentage is 14.5%. Furthermore, the board of directors, in a meeting held on August 10, 2023, decided that August 16, 2023, would be the record date for the capital reduction.

The other changes in the Company's common stock capital are mainly due to the issuance and cancellation of restricted stock units granted to employees.

(2) Capital surplus
45 -

December 31, 2024

December 31, 2023

Applicable for making up for losses, distributing cash, or capitalization (Remark) Additional paid-in capital Difference between consideration and book amount of subsidiary’s stock shares acquired or disposed From merger Cannot be used for any purpose Employee stock option	$ 7,491 1,497 891 3,225 $ 13,104	$ 7,491 1,497 891 3,225
		$ 13,104

Remark: The portion of capital surplus may be used to offset losses. When the Company has no losses, it may also be used to distribute cash dividends or allocate to common stock capital, subject to an annual limit based on a certain percentage of the paid in capital.

(3) Retained earnings and dividend policy

According to the Articles of Incorporation, if there are profits in the annual financial statements, the Company shall first pay taxes, make up for losses from previous years, set aside 10% of the legal reserve, and adjust for special reserves according to laws or regulations. After adding the accumulated unappropriated retained earnings from previous years, the remaining amount shall be distributable earnings. The board of directors shall propose a shareholder dividend or profit distribution plan for approval at the shareholder meeting, with a distribution range of 50% to 100% of distributable earnings.

If the distribution of dividends or profits is made in cash, the board of directors may authorize it with the approval of two-thirds of the directors present and the majority of attending directors and report it to the shareholder meeting.

For the Company's employee and director compensation distribution policy, please refer to (7) of Note 22 on employee and director compensation.

According to the Company's Articles of Incorporation, the dividend policy will consider the overall development needs of the enterprise and

46 -

make appropriate dividend distributions. The cash dividends shall not be less than 10% of the total amount of dividends.

The legal reserve should be set aside until its balance reaches the total amount of the Company's issued and paid-up capital. The legal reserve can be used to offset losses. If the legal reserve exceeds 25% of the total amount of the outstanding capital, the excess can be used for cash distribution in addition to capitalization.

The 2023 and 2022 earnings distribution proposals are as follows:

Legal reserve Special reserve Cash dividends Cash dividend per share (NTD)		2023 $ 2,662 $ 10,040 $ 30,053 $ 0.5	(	2022 $ 2,345 $ 37,358) $ 42,182 $ 0.60

The above cash dividends were resolved for distribution by the Board of Directors on March 5, 2024, and March 14, 2023, respectively, and the other items of earnings distribution were approved at the shareholders’ meetings on May 24, 2024, and May 31, 2023, respectively.

On March 5, 2025, the Board of Directors of the Company proposed shareholder dividend distribution plan for the fiscal year 2024 as follows:

Legal reserve Special reserve Cash dividends Cash dividend per share (NTD)	(	2024 $ 4,727 $ 21,570) $ 48,086 $ 0.8

The above cash dividends have been resolved for distribution by the Board of Directors, while the remaining items are pending approval at the shareholders’ meeting scheduled for May 27, 2025.

(4) Special reserve

cial reserve
Beginning balance appropriation to special reserve Reduction in other equity items		2024 $ 58,130 10,040		2023
			(	$ 95,488 37,358)

47 -

Ending Balance		2024 $ 68,170		2023 $ 58,130

(5) Other equity
A) Exchange differences in translation of the financial statement for foreign operations.

perations.
Beginning balance Occurrence in current year Exchange differences of foreign operations Income tax effect Ending balance	2024 ($ 72,026) 27,340 ( 5,468) ($ 50,154)	2023
		($ 61,897) ( 12,660) 2,531 ($ 72,026)

B) Unrealized profit and loss in valuation of financial assets measured at fair value through other comprehensive income.

Beginning balance Incurred in the current year Unrealized profit and loss Equity instrument Other comprehensive income for the current year Ending balance	( ( ( (	2024 $ 2,945) 302) 302) $ 3,247)	( (	2023 $ 3,033) 88 88 $ 2,945)

21. Sales Revenue

(1) Revenue from contracts with customers

nue from contracts with customers
PU resin Thermoplastic Polyurethan (TPU) Others		2024 $ 648,121 2,986 63,771 $ 714,878		2023
				$ 522,669 5,686 63,954 $ 592,309

(2) Contract balance

Notes receivable (Note 10) Accounts receivable (Note 10) Contract liabilities	December 31, 2024 $ 30,551 $ 145,122 $ 1,513	December 31, 2023 $ 28,801 $ 125,481 $ 1,443		January 1, 2023 $ 24,424 $ 135,943 $ 667

48 -

The changes in contract liabilities mainly arise from the timing difference between satisfying performance obligations and the timing of customer payments.

22. Profit (loss) from Continuing Operations

(1) Interest income

Bank deposits Other income Miscellaneous income Dividend income Other gains and losses Net profit (loss) from foreign currency exchange Gain on disposal of property, plant, and equipment Profit (loss) from financial assets and financial liabilities Gain (loss) on financial assets measured at fair value through profit and loss mandatorily Miscellaneous losses Financial costs Interest in bank borrowing Interest in lease liabilities Depreciation and Amortization Depreciation expense summarized by functions Cost of sales		2024 $ 3,907 2024 $ 2,047 - $ 2,047 2024 $ 4,957 234 1,135 - $ 6,326 2024 $ 10,485 - $ 10,485 2024 $ 19,674		2023 $ 3,631 2023
				$ 1,408 2 $ 1,410 2023
			$ 5,787 76 ( 145) ( 159) $ 5,559 2023
				$ 7,846 5 $ 7,851 2023
				$ 15,312

(2) Other income
(3) Other gains and losses
(4) Financial costs
(5) Depreciation and Amortization
49 -

Operating expenses Amortization expense summarized by functions Cost of sales Operating expenses Employee benefit expense Short-term employee benefits Post-employment benefits (Note 19) Defined contribution plan Defined benefit plan Share-based payment Equity settlement Other employee benefit Total employee benefit expense Summarized by functions Cost of sales Operating expenses		2024 4,290 $ 23,964 $ - 323 $ 323 2024 $ 92,798 3,508 62 3,570 - 13,029 $ 109,397 $ 48,911 60,486 $ 109,397		2023 4,954 $ 20,266 $ - 126 $ 126 2023 $ 83,957 3,725 59 3,784 245 13,277 $ 101,263 $ 46,371 54,892 $ 101,263

(6) Employee benefit expense

(7) Compensation to employees and directors

In accordance with the Article of Incorporation, if the Company is profitable for the year, 5% to 8% of the annual profit should be allocated as employee compensation, and up to 5% of the annual profit should be allocated as director compensation. However, if the company still has accumulated losses, it should first reserve an amount to cover those losses. The employee and director compensations for fiscal years 2024 and 2023 were resolved by the Board of Directors on March 5, 2025, and March 5, 2024, respectively, as follows:

Estimation ratio

Estimation ratio
Employee compensation Director compensation	2024 5% 3%	2023
		5% 3%

50 -

Amount Employee compensation Director compensation	2024 Cash Stock $ 2,655 $ - 1,593 -	2023	2023
	Cash	Cash	Stock $ - -
	$ 2,655 1,593	$ 1,697 1,018

The changes in the amount of the parent company only financial report after the publication date shall be processed according to the change in accounting estimates and adjusted and recorded in the next year.

The actual amounts distributed as employee and director compensation for fiscal years 2023 and 2022 were consistent with the amounts recognized in the consolidated financial statements for the respective years.

Please refer to the Market Observation Post System of Taiwan Stock Exchange for information on the compensation to employees and directors resolved by the Company’s board of directors.

(8) Foreign currency exchange profit and loss

oreign currency exchange profit and loss
2024 Total foreign currency exchange profit $ 7,272 Total foreign currency exchange loss ( 2,315) Net profit (loss) $ 4,957 tinuing Operations Income Tax ncome tax recognized in profit and loss The main composition items of income tax expense are 2024 Current income tax Incurred in the current year $ 5,148 Adjustment of prior periods 407 Deferred income tax Incurred in the current year ( 3,365) Income tax expense recognized in profit and loss $ 2,190		2023
	$ 11,030 ( 5,243) $ 5,787 as follows: 2023
		$ 3,534 1,664 - $ 5,198

23. Continuing Operations Income Tax

(1) Income tax recognized in profit and loss

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

Continuing operations net income before tax		2024 $ 48,861		2023 $ 31,216

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Income tax expense calculated according to statutory tax rate for net income before tax Permanent difference Unrecognized deductible temporary difference Unrecognized temporary difference Current income tax expense of previous periods adjusted in the current year Income tax expense recognized in profit and loss	2024 $ 9,772 ( 115) ( 5,202) ( 2,672) 407 $ 2,190	2023
		$ 6,243 75 ( 1,707) ( 1,077) 1,664 $ 5,198

(2) Income tax recognized in other comprehensive income.

Deferred income tax Incurred in the current year - Conversion through overseas operations Income tax recognized in other comprehensive income		2024 $ 5,468) $ 5,468)		2023
	( (			$ 2,531 $ 2,531

(3) Deferred income tax assets and liabilities

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

2024

==> picture [412 x 240] intentionally omitted <==

----- Start of picture text -----

Recognized in
Recognized other
Deferred income tax Beginning in profit and comprehensive
assets (liabilities) balance loss profit and loss Ending balance
Temporary difference
Undistributed earnings of
subsidiaries ( $ 13,300 ) $ - $ - ( $ 13,300 )
- -
Unrealized inventory loss 3,055 3,055
- -
Deferred gross profit 1,194 1,194
Unrealized gain on
financial assets - 296 - 296
Unrealized foreign
- -
exchange gain ( 1,180 ) ( 1,180 )
Land value increment tax
- -
provision ( 11,175 ) ( 11,175 )
Exchange differences on
translation of foreign
-
operations 21,195 ( 5,468 ) 15,727
Defined benefit pension
- -
plans 3,732 3,732
$ 452 $ 3,365 ( $ 5,468 ) ( $ 1,651 )
----- End of picture text -----

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2023

2023
Deferred income tax assets (liabilities) Temporary difference Undistributed earnings of subsidiaries Provision for the land value incremental tax Exchange differences arising from foreign operations Defined benefit pension plan		Beginning balance	Recognized in profit and loss $ - - - - $ -	Recognized in other comprehensive profit and loss $ - - 2,531 - $ 2,531		Exchange difference
	( ( (	$ 13,300 ) 11,175 ) 18,664 3,732 $ 2,079 )			( (	$ 13,300 ) 11,175 ) 21,195 3,732 $ 452

(4) Income tax audit

The income tax returns for the Company have been approved by the tax authorities up to the year 2022.

24. Earnings per Share

Basic earnings per share From continuing operations Diluted earnings per share From continuing operations		2024 $ 0.78 $ 0.77		2023
				$ 0.39 $ 0.39

The net income and weighted average number of outstanding common shares used to compute earnings per share are as follows:

Current Income Net income for the calculation of basic and diluted earnings per share Shares Weighted average number of common stock shares for the calculation of basic earnings per share		2024 2023 $ 46,671 $ 26,018 Unit`：`Thousand shares 2024 2023 60,107 66,352	2024 2023 $ 46,671 $ 26,018 Unit`：`Thousand shares 2024 2023 60,107 66,352

			66,352

53 -

The impact of potentially diluted common stock shares: Employee compensation Restricted stock units Weighted average number of common stock shares for the calculation of diluted earnings per share		2024 157 - 60,264		2023
				124 96 66,572

If the Company may choose to pay remuneration to employees in the form of stocks or cash, when calculating the diluted earnings per share, it is assumed that the remuneration to employees is paid in the form of stocks, and the weighted average number of outstanding shares is included in the potential diluted common stock for the calculation of the diluted earnings per share. When calculating the diluted earnings per share before the distribution of remuneration in the form of stock resolved in the shareholders meeting of the following year, the dilution effect of this potential common stock will be considered continuously.

25. Share-based Payment

Restricted stock units

The Company resolved to issue restricted stock units at the shareholder meeting held on May 28, 2018, with an issuance price of NTD 0 per share (i.e., free of charge). The aforementioned restricted stock units issuance was approved by the Securities and Futures Bureau under the Financial Supervisory Commission R.O.C. Taiwan. and became effective on May 20, 2019. The details of the issuance resolved by the Board of Directors are as follows:

Unit: Thousand shares

Grant date 108.09.25 109.04.15	Grant amount 426 374	Fair value per share 15.10 17.65	Issuance and capital raising record date 108.09.25 109.04.15	Actual shares issued
				426 374

After the restricted stock units are granted to employees under this policy, they must meet certain conditions and fulfill their service obligations without

54 -

any violation of the Company's employment agreement, code of conduct, work rules, contractual obligations, or regulations. In addition, they must achieve a certain level of annual performance evaluation. The restricted stock units granted shall vest on the employees according to the following schedule, subject to their continued employment on the vesting date:

A) After one year of employment, employees can receive 30% of the granted restricted stock units if they achieve a performance evaluation level of B or above.
B) After two years of employment, employees can receive an additional 30% of the granted restricted stock units if they achieve a performance evaluation level of B or above.
C) After three years of employment, the remaining 40% of the granted restricted stock units can be vested if they achieve a performance evaluation level of B or above.

If the above-mentioned dates fall on a holiday, the transaction will be processed on the next business day.

The handling methods for employees who fail to meet the vested conditions are as follows:

A) If an employee violates these regulations, trust agreements, labor contracts, work rules, or contractual agreements between the employee and the Company (related contractual agreements are authorized by the Board of Directors to be negotiated and signed by the Chairman on behalf of the Company), the Company has the right to retrieve the restricted stock units granted but not yet vested to the employee and cancel them free of charge.
B) If an employee fails to meet the vested conditions, the Company has the right to retrieve the restricted stock units granted but not yet vested to the employee and cancel them free of charge.
C) For general resignation (voluntary/retirement/layoff/dismissal), the Company will retrieve the restricted stock units granted but not yet vested to the employee in accordance with the law and cancel them free of charge.
D) For leave without pay: Employees who are granted restricted stock units and have applied for leave without pay with the Company's approval will
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be deemed as not having met the vested conditions during the period of leave. After returning to their original position, the employee's restoration of their rights will be subject to approval by the Chairman. The vested conditions, percentage, and deadline for meeting them will be reevaluated within the scope of the granted shares.

E) For general death, the Company will retrieve the restricted stock units granted but not yet vested to the employee in accordance with the law and cancel them free of charge.
F) or occupational accidents:
a) If an employee suffers a disability due to an occupational accident and cannot continue working, the restricted stock units granted but not yet vested will be vested ahead of schedule from the date of effective resignation.
b) If an employee dies due to an occupational accident, the restricted stock units granted but not yet vested will be vested ahead of schedule from the date of death, and the inheritance will receive them.
G) For job transfer: If an employee transfers to a related enterprise or another Company (excluding subsidiaries), the restricted stock units granted but not yet vested will be handled in the same manner as specified in the "general resignation" clause. However, for operational needs, if an employee is assigned by the Company to work at a related enterprise or another company, their restricted stock units granted but not yet vested will not be affected by the transfer.
H) Employees who have been granted restricted stock units but have not met the vested conditions are not required to return the stock dividend and cash dividend they have received.

The restricted rights and obligations of employees who have been allocated or subscribed to new shares but have not yet met the vesting conditions are as follows:

A) Prior to meeting the vesting conditions, employees shall not sell, pledge, transfer, gift, or otherwise dispose of the restricted stock units allocated under this policy.
56 -
B) Employees who have been allocated new shares but have not yet met the vesting conditions shall have the same rights and obligations (including the right to participate in rights issues, dividends, attend shareholder meetings, propose resolutions, speak, vote, elect, subscribe to cash increases, and other matters related to shareholder rights and interests) as the common shares already issued by the Company, except for the aforementioned restricted rights.
C) The restricted stock units issued this time may be held in trust by a trustee. Before meeting the vesting conditions, the employee shall not request the trustee to return the restricted stock units for any reason or by any means.

Summary of restricted stock units information of the Company:

Summary of restricted stock units information of the	Company:
Beginning balance Vested in current year Cancellation in current year Ending balance	Shares (Thousand shares)
	2023
	743 ( 740) ( 3) -

The recognized compensation cost for the Company in 2023 was NTD 245 thousand.

26. Capital Risk Management

The Company conducts capital management to ensure that each enterprise within the group can maximize shareholder returns by optimizing debt and equity balances under the assumption of going concern. The overall strategy of the Consolidated Company has not undergone significant changes.

The Company's senior management regularly reviews its capital structure, considering the cost and associated risks of various types of capital. Based on the recommendations of senior management, The Consolidated Company balances its overall capital structure through methods such as paying dividends, issuing new stocks, and so on.

The Company is not required to comply with any other external capital regulations.

57 -

27. Financial Instruments

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

The management of the Company believes that the carrying amounts of financial assets and financial liabilities that are not measured at fair value approximate their fair value.

(2) Fair value information - financial instruments measured at fair value on a repeatability basis
A) Fair value level

December 31, 2024

Financial assets valued at fair value through profit and loss Foreign Bonds Domestic Fund beneficiary certificate Domestic TWSE/TPEx listing stock Total Financial assets measured at fair value through other comprehensive income Equity instrument -Domestic non TWSE/TPEx listing stock Financial liabilities measured at fair value through profit or loss Non-hedging derivatives -foreign exchange swap contracts December 31, 2023 Financial assets valued at fair value through profit and loss Foreign Bonds Domestic TWSE/TPEx listing stock Domestic Fund beneficiary certificate Total Financial assets measured at fair value through other comprehensive income		Level 1 $ 22,335 1,974 878 $ 25,187 $ - $ - Level 1 $ 18,747 470 6,379 $ 25,596		Level 2 $ - - - $ - $ - $ 50 Level 2 $ - - - $ -		Level 3 $ - - - $ - $ 1,253 $ - Level 3 $ - - - $ -		Total
								$ 22,335 1,974 878 $ 25,187 $ 1,253 $ 50 Total
								$ 18,747 470 6,379 $ 25,596

December 31, 2023

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Equity instrument -Domestic non TWSE/TPEx listing stock		Level 1 $ -		Level 2 $ -		Level 3 $ 1,555		Total
								$ 1,555

There was no transfer between Level 1 and Level 2 fair value measurements in 2024and 2023.

B) Evaluation technology and the input value of Level 2 fair value measurement

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Evaluation Technology and
Financial Instrument the Input Value
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Financial Instrument	Evaluation Technology and the Input Value
Foreign bonds	The fair value of foreign bonds is measured based
	on publicly available market quotes provided by
	third-party institutions.
Derivatives-foreign exchange	The estimated future cash flows are based on
swap contracts	observable forward exchange rates at the end of
	the reporting period and the contracted forward
	rates and are discounted using discount rates that
	reflect the credit risk of the counterparties.

C) Evaluation technology and the input value of Level 3 fair value measurement

The domestic unlisted equity investments are valued using the net asset value method, where the company measures the fair value of the investments based on its net assets on the balance sheet date.

(3) Types of financial instruments

Types of financial instruments
Financial assets Financial assets measured at fair value through other comprehensive income Financial assets measured at the amortized cost (Remark1) Measured at fair value through profit and loss Financial assets measured at fair value through profit and loss mandatorily	December 31, 2024 $ 1,253 286,291 25,187	December 31, 2023
		$ 1,555 296,990 25,596

Financial liabilities

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December 31, 2024 December 31, 2023 Measured at the amortized cost (Remark2) 573,991 579,164 Measured at fair value through profit and loss Held for trading 50 -

Remark 1: The balance includes financial assets measured at amortized cost such as cash and cash equivalents, financial assets measured at amortized cost, notes receivable, accounts receivable (including related parties) and Guarantee deposits.
Remark 2: The balance includes financial liabilities measured at amortized cost such as short-term borrowings, short-term bills payable, notes payable, accounts payable, Other payable (including related parties) and long-term borrowings.
(4) Financial risk management objectives

The main financial instruments of the Company include notes and accounts receivable, accounts payable, lease liabilities, long-term and short-term borrowings. The financial management department of the Company provides services to all business units, plans and coordinates entering the domestic and international financial markets, analyzes internal risk exposure according to the degree and breadth of risk, and reports, supervises, and manages the financial risks related to the operations of the Company. These risks include market risk (including exchange rate risk and interest rate risk), credit risk, and liquidity risk.

A) Market risk

The main financial risks from the operating activities of the Company are the risk of changes in foreign currency exchange rates (see a) below) and the risk of changes in interest rates (see b) below). a) Exchange rate risk

The Company engages in sales and purchase transactions denominated in foreign currencies, which exposes the Company to foreign exchange risk.

Please refer to Note 31 for the book value of monetary assets and monetary liabilities denominated in non-functional currencies and the

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book value of derivative instruments with foreign exchange risk exposure of the Company as of the balance sheet date. Sensitivity Analysis

The Company is mainly exposed to fluctuations in the exchange rates of the U.S. dollar and Chinese yuan.

The sensitivity analysis below illustrates the impact on the Company's earnings before tax when the functional currency of the relevant foreign currencies increases or decreases by 5% against the New Taiwan Dollar (the functional currency). The 5% sensitivity ratio is used by the Company's management to report foreign exchange risks to senior management and represents the reasonable possible range of exchange rate fluctuations assessed by management. The sensitivity analysis includes only the foreign currencydenominated monetary items outstanding and adjusts their year-end translation by 5% for exchange rate movements. A positive number in the table below indicates that a 5% depreciation of the New Taiwan Dollar against the relevant foreign currency will increase earnings before tax by the stated amount, while a 5% appreciation will reduce earnings before tax by the same amount.

P&L	Effect of USD 2024 2023 $ 3,075 $ 4,661	Effect of Chinese yuan	Effect of Chinese yuan
	2024 $ 3,075	2024 $ 792	2023
			$ 1,368

(I) The primary source of the impact is from the US dollar cash and US dollar-denominated accounts receivable and accounts payable by the Company that were outstanding and not hedged against cash flow risks on the balance sheet date.
(ii) The primary source of the impact is from the Chinese yuan cash and Chinese yuan-denominated accounts receivable and accounts payable of the Company that were outstanding and not hedged against cash flow risks on the balance sheet date.

The management believes that sensitivity analysis cannot fully represent the inherent risk of exchange rate fluctuations, as the exchange rate exposure to the balance sheet date may not reflect the exposure throughout the year.

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b) Interest rate risk

The Company is exposed to interest rate risk since individual entities within the Company borrow funds at both fixed and floating rates. To manage this risk, the Company maintains an appropriate mix of fixed and floating rate instruments and uses interest rate swap and forward rate contracts. The Company regularly evaluates its hedging activities to ensure that they align with its interest rate outlook and established risk preferences, in order to adopt the most cost-effective hedging strategies.

The book amount of the financial assets and financial liabilities of the Company with interest rate risk exposure on the balance sheet date are as follows:

ate are as follows:
With fair value interest rate risk `－`Financial assets `－`Financial liabilities With cash flow interest rate risk `－`Financial assets `－`Financial liabilities	December 31, 2024 $ 42,981 95,570 65,538 300,000	December 31, 2023
		$ 57,157 174,365 83,370 250,000

Sensitivity Analysis

The sensitivity analysis below is based on the interest rate risk exposure of the non-derivative instruments on the balance sheet date. For floating rate liabilities, the analysis assumes that the amount of liabilities that were in circulation on the balance sheet date was in circulation throughout the reporting period.

If the interest rate increases / decreases by 1% with all other variables held constant, the Company's net income after tax for 2024 and 2023 fiscal years will decrease /increase by NTD 2,345 thousand and NTD 1,666 thousand, respectively, mainly due to the interest rate risk associated with the Company's variable-rate borrowings.

B) Credit risk

Credit risk refers to the risk that the counterpart of the transaction defaults on contractual obligations and causes financial losses to the Company. As for the balance sheet date, the maximum

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credit risk exposure of the Company that may cause financial losses due to the counterparty’s failure to perform its obligations and financial guarantees provided by the Company is mainly derived from: a) the book value of financial assets recognized in the parent company only balance sheet.

b) The maximum amount that may need to be paid by the Company for providing financial guarantees, regardless of the likelihood of occurrence.

The Company adopts a policy of conducting credit ratings on counterparties and obtaining adequate collateral in necessary situations to mitigate the risk of financial losses caused by default. The Company continues to monitor credit risk and counterparties' credit ratings and diversifies the total transaction amount among qualified clients with different credit ratings. The credit risk is controlled by annual credit limit reviews by the credit control unit.

To mitigate credit risk, the Company's management assigns dedicated units to decide on credit limits, credit approval, and other monitoring procedures to ensure that appropriate actions are taken to recover overdue receivables. In addition, the Company conducts a review of the recoverable number of receivables on the balance sheet date to ensure that appropriate impairment losses are recognized for irrecoverable receivables. Therefore, the management of the Company believes that the credit risk of the Company has been significantly reduced.

C) Liquidity risk

The Company manages and maintains sufficient positions of cash and cash equivalents to support the operations and reduce the impact of cash flow volatility. The management of the Company supervises the usage of bank financing facilities and ensures compliance with the terms of borrowing agreements.

Bank borrowing is an important source of liquidity for the Company. The unused financing facilities of the Company are explained in the following b) financing facilities.

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a) Non-derivative financial liabilities liquidity and interest rate risk list

The remaining contract maturity analysis of non-derivative financial liabilities is prepared based on the earliest date when the Company may be required to repay the liabilities, using the undiscounted cash flows of the financial liabilities. Therefore, the bank borrowings that the Company may be required to repay immediately are listed in the earliest period in the table, without considering the probability of the bank immediately exercising such rights; other non-derivative financial liabilities are prepared based on the contractual repayment dates.

December 31, 2024

December 31, 2024
	within
	1	year		1~5	years	Over 5 years
Non-derivative financial liabilities
Non-interest-bearing liabilities	$	178,421		$	-	$		-
Floating interest rate instrument		55,114			256,669			-
Fixed interest rate instrument		97,321			-			-
	$	330,856		$	256,669	$		-
December 31, 2023
	within
	1	year		1~5	years	Over 5 years
Non-derivative financial liabilities
Non-interest-bearing liabilities	$	155,014		$	-		$		-
Lease liabilities			215		-				-
Floating interest rate instrument		53,887			205,379				-
Fixed interest rate instrument		127,113			50,722				-
	$	336,229		$	256,101		$		-
b) Financing facilities
	December 31, 2024				December		31, 2023
Unsecured bank overdraft
facility (reviewed
annually)
`－`Used amount		$	2,164		$			-
`－`Unused amount			207,836			260,000
		$	210,000		$	260,000
Secured bank borrowing
facility (extendable by
mutual agreement)
`－`Used amount		$	330,000		$	362,756
`－`Unused amount			408,355			364,359

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December 31, 2024 December 31, 2023 $ 738,355 $ 727,115

28. Related Party Transactions

In addition to the disclosure in other notes, the transactions between the Company and related parties are as follows:

(1) Name and relationship of related parties

Name of related praties Relation with the Company TPU Company Subsidiary Headway Vietnam Company Subsidiary URASIA Subsidiary Shanshui Lianmei Company Subsidiary Isotech Products Incorporated Substantial related party Chaei Hsin Enterprise Co., Ltd. Substantial related party Liou, Han -Yin Key management personnel

(2) Sale revenue

Sale revenue
Account	Classification of Related party		2024		2023
Sales revenue	Subsidiary Substantial related party		$ 57,474 10,321 $ 67,795		$ 64,571 8,747 $ 73,318

Transactions with related parties are carried out at the agreed prices between both parties, with a payment term of 90 days from the end of the month, in principle. However, as of December 31, 2024, payment is collected based on the financial status of each related party.

(3) Purchase

Purchase
Classification of Related party Subsidiary Substantial related party		2024 $ 7,951 1,222 $ 9,173		2023
				$ 8,383 479 $ 8,862

The price and transaction terms for purchases made by the Company from related parties are determined by mutual agreement, with a payment period of 90 days from the end of each month.

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(4) Receivables from related parties (excluding the loaning of funds to the related parties)

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----- Start of picture text -----

Classification of December 31, December 31,
Account Related party/ Name 2024 2023
Notes receivable Substantial related party
Isotech Products $ 1,224 $ 2,714
Incorporated
Subsidiary 276 276
1,500 2,990
Less: Allowance for ( 8 ) ( 15 )
doubtful debts
$ 1,492 $ 2,975
Accounts receivable Subsidiary
Shanshui Lianmei $ 7,064 $ 16,377
Company
Others 10,021 7,340
Substantial related party 1,231 763
18,316 24,480
Less: Allowance for
doubtful debts ( 36 ) ( 96 )
$ 18,280 $ 24,384
----- End of picture text -----

There is no guarantee for the outstanding receivables from related parties.

(5) Payables to related parties (excluding the loaning of funds from the related parties)

parties)
Account Notes payable Accounts payable	Classification of Related party/ Name Subsidiary Substantial related party Subsidiary Substantial related party	December 31, 2024 $ 1,042 323 $ 1,365 $ 597 205 $ 802	December 31, 2023
				$ 1,282 106 $ 1,388 $ 964 - $ 964

The balance of payables to related parties outstanding is unsecured.

(6) Endorsements/guarantees

Guaranteed by

Classification of Related party The amount guaranteed by key management personnel	December 31, 2024 $ 303,355	December 31, 2023 $ 292,115

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Classification of Related party Actual amount drawn (Secured bank loan)	December 31, 2024 $ 85,000	December 31, 2023 $ 112,756

(7) Borrowings

Account Short-term borrowings Interest payable	Classification of Related party/ Name Subsidiary/ URASIA Subsidiary/ URASIA	December 31, 2024 $ 65,570 $ 1,808	December 31, 2023 $ 61,410 $ 1,177

(8) Other transactions

Account Other income Interest expense	Classification of Related party/ Name Subsidiary/ TPU Company Subsidiary/ URASIA		2024 $ 1,050 $ 3,826		2023 $ 1,050 $ 1,177

(9) Remunerations to the management

The total remuneration of directors and other key management personnel is as follows:

Short-term employee benefits		2024 $ 9,998		2023 $ 9,174

The remuneration of directors and other key management personnel is determined by the Remuneration Committee of the Company based on individual performance and market trends. In addition, the Company provides official cars for business use by key management personnel, with a total acquisition cost of NTD 2,290 thousand.

29. Collateral Assets

The following assets have been pledged as collateral for short-term and long-term borrowings:

Property, plant, and equipment	December 31, 2024 $114,645	December 31, 2023 $114,812

30. Contractual Commitment with Material or Liabilities without

Recognition

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As of December 31, 2024, and 2023, the balance of letters of credit issued but unused was USD 66 thousand and USD 90 thousand, respectively.

31. Information on Significantly Influential Assets and Liabilities in Foreign

Currency

The following information is summarized and expressed in foreign currencies other than the functional currencies of the Company. The disclosed exchange rates refer to the exchange rates for the conversion of the foreign currencies into functional currencies. The influential assets and liabilities in foreign currency are as follows:

December 31, 2024

December 31, 2024
Assets in Foreign Currency Monetary item USD CNY Liabilities in Foreign Currency Monetary item USD CNY	Foreign currency $ 4,321 3,549 $ 2,446 12	Exchange rate 32.785 4.478 32.785 4.478	Carrying amount
				$ 141,697 15,892 $ 157,589 $ 80,192 54 $ 80,246

December 31, 2023

Assets in Foreign Currency Monetary item USD CNY Liabilities in Foreign Currency Monetary item USD	Foreign currency $ 5,520 6,324 2,484	Exchange rate 30.705 4.327 30.705	Carrying amount	Carrying amount
				$ 169,492 27,364 $ 196,856 $ 76,271

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The foreign exchange gains (realized and unrealized) of the Company for the fiscal years 2024 and 2023 were NTD 4,957 thousand and NTD 5,787 thousand, respectively.

32. Notes to Disclosure

(1) Information on major transactions and (2) Investment-related information: A) Financing provided to others: Table 1.
B) Endorsements/guarantees provided: None.
C) The Marketable securities held (excluding investment in the equity of the subsidiaries and associates): Table 2.
D) Marketable securities acquired or disposed at costs or prices at least NTD 300 million or 20% of the paid-in capital: None.
E) Acquisition of individual real estate at costs of at least NTD 300 million or 20% of the paid-in capital: None.
F) Disposal of individual real estate at prices of at least NTD 300 million or 20% of the paid-in capital: None.
G) Total purchases from or sales to related parties amounting to at least NTD 100 million or 20% of the paid-in capital: None.
H) Receivables from related parties amounting to at least NTD 100 million or 20% of the paid-in capital: None.
I) Trading in derivative instruments: Note 7.
J) Information on investees: Table 3.
(3) Information on investment in Mainland China:
A) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, net income of investees, investment gain or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area: Table 4.
B) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, unrealized gains or losses and other
69 -

information relevant to understanding the impact of Mainland China investment on the financial statements: Table 5.

a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period.
b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period.
c) The amount of property transactions and the amount of the resultant gains or losses.
d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the period and the purposes.
e) The highest balance, the end of period balance, the interest rate range, and total current period interest with respect to financing of funds.
f) The other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receiving of services.
(4) Information on major shareholders: list of the shareholders with ownership of 5% or greater, showing the names, the number of shares and percentage of ownership held by each shareholder: Table 6.
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Headway Advanced Materials Inc.

Financing Provided to Others

From January 1 to December 31, 2024

Table 1

Unit: In NTD Thousand, Unless Stated Otherwise

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Collateral Financing limits
Lander’s total
Related Maximum balance Actual amount Interest Nature of Transaction Reason for Allowance for bad for each
No. Lender Borrower Account Ending balance financing limit Note
party for the period drawn rate range financing amount financing debt Item Value borrower
(Remark 1)
(Remark 1)
1 URASIA Shanghai Huiyu Company Other receivable Y $ 40,302 $ 17,912 $ 17,912 2.5% Remark 2 $ - Working capital $ - － $ - $ 295,129 $ 295,129
The Company Other receivable Y 131,140 65,570 65,570 5.0% Remark 2 - Working capital - － - 295,129 295,129
----- End of picture text -----

Remark 1: The short-term financing provided by URASIA INTERNATIONAL INC. to entities in need of working capital are subject to individual and aggregate limits, which should not exceed 40% of the net worth of the Company both.

Remark 2: In need of short-term financing.

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Headway Advanced Materials Inc.

The Marketable Securities List

December 31, 2024

Table 2

Unit: In NTD Thousand, Unless Stated Otherwise

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----- Start of picture text -----

December 31, 2024
Relationship with the holding
Holding company name Type and name of marketable securities Financial statement account Shares Percentage of Note
company Carrying Amount Fair value
(Thousand shares) ownership (%)
The Company Anchor digital technology Corporation/ － Financial assets at fair value through other 185 $ 1,253 6.06 $ 1,253 －
Stock shares comprehensive income - non-current
Bank of America/ Corporate bond － Financial assets at fair value through profit - 6,379 - 6,379 －
or loss - non-current
American Express/ Corporate bond － Financial assets at fair value through profit - 3,202 - 3,202 －
or loss - non-current
General Motors Company/ Corporate bond － Financial assets at fair value through profit - 3,013 - 3,013 －
or loss - non-current
European Investment Bank/ Corporate － Financial assets at fair value through profit - 5,803 - 5,803 －
bond or loss - non-current
Apple Inc./ Corporate bond － Financial assets at fair value through profit - 2,039 - 2,039 －
or loss - non-current
Verizon Communications Inc/ Corporate － Financial assets at fair value through profit - 1,899 - 1,899 －
bond or loss - non-current
Taiwan Biomedical Company Limited. / － Financial assets at fair value through profit 15 513 0.04 513 －
Stock shares or loss - non-current
Nomura All Weather Fund of Funds － Financial assets at fair value through profit 200 1,974 - 1,974
or loss - non-current
Chin Hsin Environ Engineering Co., Ltd. / － Financial assets at fair value through profit 5 365 - 365 －
Stock shares or loss - non-current
Financial assets at fair value through profit
or loss - non-current
URASIA European Investment Bank/ Corporate － Financial assets at fair value through profit - 3,189 - 3,189
bond or loss - non-current
Berkshire Hathaway Inc./ Corporate bond － Financial assets at fair value through profit - 2,742 - 2,742
or loss - non-current
----- End of picture text -----

Remark 1: The marketable securities were not provided as collateral, pledged, or otherwise restricted as of December 31, 2024. Remark 2: Please refer to Table 3 and Table 4 for the information on investment in subsidiaries.

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Headway Advanced Materials Inc.

Information on investees

From January 1 to December 31, 2024

Table 3 Unit: In Thousands of NTD, Unless Stated Otherwise

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Original Investment Amount Balance as of December 31, 2024 Net Income
Investment Gain
Investor company Investee company Location Main businesses and products December 31, Shares Ratio (Loss) of the Note
December 31, 2023 Carrying Amount (Loss)
2024 (Thousand shares) (%) Investee
The Company URASIA Panama General investment business $ 180,087 $ 180,087 83 100 $ 731,542 $ 21,394 $ 21,106 －
TPU Company Taiwan Manufacturing and sales of TPU 68,084 68,084 6,808 50 92,029 1,097 443 －
URASIA Headway Vietnam Company Vietnam PU resin products USD 5,000 thousand USD 5,000 thousand - 100 USD 7,308 thousand USD 256 thousand USD 256 thousand －
Cheng Yu Company Hong Kong General investment business USD 7,384 thousand USD 7,384 thousand - 100 USD 6,522 thousand USD 815 thousand USD 815 thousand －
----- End of picture text -----

Remark: Please refer to Table 5 for the information on investment in Mainland China.

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Unit: In Thousands of NTD, Unless Stated Otherwise

Headway Advanced Materials Inc.

Information on Investment in Mainland China

From January 1 to December 31, 2024

Table 4

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Accumulated outward Investment flows Accumulated outward Percentage of Accumulated
remittance for remittance for ownership of repatriation of
Total amount of paid-in Method of Carrying amount as of
Investee company Main businesses and products investments from investments from direct or Investment gain (Loss) investment income as of
capital investment Outward Inward December 31, 2024
Taiwan as of Taiwan as of indirect December 31, 2024
January 1, 2024 December 31, 2024 investment (Remark 5)
Shanghai Huiyu Construction of housing projects, CNY 10,600 thousand Remark 1 USD 324 thousand $ - $ - USD 324 thousand 74% (USD 595 thousand) USD 1,020 thousand USD 5,958 thousand
Company construction of municipal public
works projects, construction of
mechanical and electrical
installation projects, construction
of building decoration projects,
construction of anti-corrosion and
waterproofing projects,
construction of sports tracks,
stadiums, artificial turf projects,
and wholesale of sports field
materials.
Shanshui Lianmei PU resin products HKD 45,178 thousand Remark 2 - - - - 100% HKD 6,355 thousand HKD 50,649 thousand -
Company
Anhui Huiyu Research, manufacturing, import and CNY 8,058 thousand Remark 3 - - - - 100% (RMB 3,431 thousand) RMB 347 thousand -
Company export of plastic materials for
sports fields, and sports facility
construction.
Accumulated outward remittance for Limits on the investment in Mainland
Investment amount authorized by the
investments in Mainland China as of China according to the Investment
Investment Commission, MOEA
December 31, 2024 Commission, MOEA
USD23,020 thousand &
USD 324 thousand Remark 4
HKD 26,200 thousand
----- End of picture text -----

Remark 1: Invested through subsidiary URASIA.

Remark 2: Invested through subsidiary Cheng Yu Company.

Remark 3: Invested through Shanghai Huiyu Company.

Remark 4: According to the revised "Principles for Reviewing Investment or Technical Cooperation in the Mainland" on August 29, 2008, enterprises that have been issued a certificate of operation headquarters scope by the Industrial Development Bureau of the Ministry of Economic Affairs are not subject to this limit.

Remark 5: As of December 31, 2024, the accumulated investment income repatriated was USD 5,958 thousand for Shanghai Huiyu Company, which exceeded the cumulative investment amount remitted out, and the Investment Commission, MOEA has approved USD 5,958 thousand.

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Headway Advanced Materials Inc.

Significant Transactions with Investee Companies in Mainland China, either Directly or Indirectly through a Third Party, and their Prices, Payment Terms, Unrealized Gains or Losses and Other Related Information

From January 1 to December 31, 2024

Table 5

Unit: In Thousands of NTD, Unless Stated Otherwise

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Notes receivable (payable),
Purchase, sales Transaction terms accounts receivable
unrealized
Investee company Transaction type Price (payable) Note
gains/losses
Comparison with
Amount Percentage Payment term Amount Percentage
ordinary transactions
Shanshui Lianmei Company Sales $ 38,550 3% Remark Remark Remark $ 7,064 2% $ - －
----- End of picture text -----

Remark: The selling prices of products to subsidiaries by the Company are generally equivalent to those charged to third-party customers, with a payment term of 90 days after the month-end. However, for certain products that assist subsidiaries in expanding local business, their selling prices are based on agreed prices between the Company and the subsidiaries. As of December 31, 2024, the payment terms for subsidiaries are subject to their respective financial conditions.

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Headway Advanced Materials Inc. Information on major shareholders December 31, 2024

Table 6

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Shares
Name of the major shareholder Percentage of
Number of shares owned
ownership
Jinteng Investment Co., Ltd. 5,359,941 8.91%
Youlong Investment Co., Ltd. 3,291,443 5.47%
----- End of picture text -----

Remark 1: The information of major shareholders presented in this table is provided by the Taiwan Depository & Clearing Corporation based on the number of ordinary shares and preference shares held by shareholders with ownership of 5% or greater, that have been issued without physical registration (including treasury shares) by the Company as of the last business day for the current quarter. The share capital in the parent company only financial statements may differ from the actual number of shares that have been issued without physical registration because of different preparation basis.
Remark 2: If a shareholder delivers the shareholdings to the trust, the above information will be disclosed by the individual trustee who opened the trust account. For shareholders who declare insider shareholdings with ownership greater than 10% in accordance with the Security and Exchange Act, the shareholdings include shares held by shareholders and those delivered to the trust over which shareholders have rights to determine the use of trust property. For information relating to insider shareholding declaration, refer to Market Observation Post System.
76 -

THE CONTENTS OF STATEMENTS

OF

MAJOR ACCOUNTING ITEMS

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Items STATEMENT INDEX
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Major Accounting Items in Assets, Liabilities and Equity
Statement of Cash and Cash Equivalent	1
Statement of Notes receivable	2
Statement of Accounts receivable	3
Statement of Inventories	4
Statement of Financial Assets measured at fair value
through profit and loss – non-current	5
Statement of Financial Assets measured at fair value
through Other comprehensive income – non-current	6
Statement of Investments Accounted for Using Equity
Method	7
Statement of Property, plant, and equipment	Note 13
Statement of Right-of-Use Assets	Note 14
Statement of Intangible Assets	Note 15
Statement of Short-term Borrowings	8
Statement of Notes Payable	9
Statement of Accounts Payable	10
Statement of Other payable	Note 18
Statement of Long-term Borrowings	11
Major Accounting Items in Profit and Loss
Statement of Sales Revenue	12
Statement of Cost of Sales	13
Statement of Operating Expenses	14
Statement of Labor, Depreciation and Amortization by
Function	15

77 -

Headway Advanced Materials Inc.

Statement of Cash and Cash Equivalent

December 31, 2024

Statement 1

Unit: In NTD Thousand

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Item Description Amount
Cash
Cash on hand $ 5
Petty cash 90
95
Bank Deposit
Demand deposit NTD 45,453
Foreign currency USD 478 thousand @ 32.785 ；
demand CNY 942 thousand @ 4.478 ；
deposit 20,085
ZAR 119 thousand @ 1.75
65,538
Cash Equivalent
Foreign currency USD 1,311thousand @ 32.785
term deposit 42,981
42,981
$ 108,614
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78 -

Headway Advanced Materials Inc.

Statement of

Notes Receivable

December 31, 2024

Statement 2

Unit: In NTD Thousand

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Client Name Amount
Related Parties
Isotech Products Incorporated $ 1,224
TPU Company 276
1,500
Less: Allowance for loss 8
1,492
Non-related Parties
Client A 5,340
Client B 2,735
Client C 2,094
Client D 1,967
Client E 1,529
Others (Remark) 15,489
29,154
Less: Allowance for loss 95
29,059
$ 30,551
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Remark: The amount of individual clients included in others does not exceed 5% of the account balance.

79 -

Headway Advanced Materials Inc.

Statement of

Accounts Receivable

December 31, 2024

Statement 3

Unit: In NTD Thousand

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Client Name Amount
Related Parties
Shanshui Lianmei Company $ 7,064
Headway Vietnam Company 9,929
Isotech Products Incorporated 1,231
TPU Company 92
18,316
Less: Allowance for loss 36
18,280
Non-related Parties
Client A 37,681
Client B 25,707
Others (Remark) 64,170
127,558
Less: Allowance for loss 716
126,842
$ 145,122
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Remark: The amount of individual clients included in others does not exceed 5% of the account balance.

80 -

Headway Advanced Materials Inc.

Statement of Inventories

December 31, 2024

Statement 4

Unit: In NTD Thousand

Item Commodities Finished Goods Raw Materials		Amount	Amount	Amount
		Cost $ 958 70,642 69,973 $ 141,573	Net Realizable Value
				$ 1,240 92,864 74,280 $ 168,384

81 -

Headway Advanced Materials Inc.

Statement of Financial Assets Measured at Fair Value through Profit and Loss – Non-current

December 31, 2024

Unit: In NTD Thousand, Unless Stated Otherwise

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Statement 5 Unit: In NTD Thousand, Unless Stated Otherwise
Beginning Balance Increase During this Year Decrease During this Year Ending Balance
Current year
Name Shares/ Units Amount Shares/ Units Amount Shares/ Units Amount valuation Shares/ Units Amount
Yuanta 2–10-year investment grade
corporate bond fund 20 $ 6,379 - $ - 20 $ 6,411 $ 32 - $ -
Bank of America/ Corporate bond - 5,892 - - - - 487 - 6,379
American Express/ Corporate bond - 3,053 - - - - 149 - 3,202
General Motors Company/ Corporate
bond - 2,890 - - - - 123 - 3,013
European Investment Bank/ Corporate
bond - 2,751 - 3,251 - - ( 199) - 5,803
- - - - - -
Apple Inc./ Corporate bond 2,131 ( 92) 2,039
Verizon Communications Inc/
- - - - - -
Corporate bond 2,030 ( 131) 1,899
Nomura All Weather Fund of Funds - - 200 2,018 - - ( 44) 200 1,974
Taiwan Biomedical Company Limited.
/ Stock shares 15 470 - - - - 43 15 513
Chin Hsin Environ Engineering Co.,
Ltd. / Stock shares - - 5 308 - - 57 5 365
$ 25,596 $ 5,577 20 $ 6,411 $ 425 $ 25,187
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82 -

Headway Advanced Materials Inc.

Statement of Financial Assets Measured at Fair Value through Other Comprehensive Income – Non-current

December 31, 2024

Statement 6

Name

Anchor Digital Technology Corporation

Unit: In NTD Thousand, Unless Stated Otherwise

Beginning Balance Increase During this Year Decrease During this Year Ending Balance Shares Shares Shares Current year Shares (thousand) Fair Value (thousand) Amount (thousand) Amount valuation (thousand) Fair Value Pledge 185 $ 1,555 - $ - - $ - ( $ 302 ) 185 $ 1,253 None

83 -

Headway Advanced Materials Inc.

Statement of Investments Accounted for Using Equity Method

December 31, 2024

Statement 7

Unit: In NTD Thousand, Unless Stated Otherwise

Beginning Balance Increase During this Year Decrease During this Year Investees Shares (thousand) Amount Shares (thousand) Amount Shares (thousand) Amount Adjustment Using the Equity Method (Remark) URASIA 83 $ 683,015 - $ - - $ - $ 48,527 TPU Company 6,808 91,243 - - - - 786 $ 774,258 $ - $ - $ 49,313 Remark: Including 1.Share of profit or loss of associates and joint ventures accounted for using the equity method $ 21,548 2. Share of other comprehensive income of associates and joint ventures accounted for using the equity method 384 3.Subsidiary’s distribution of cash dividends ( 40) 4.Exchange differences in translation of the financial statement of foreign operations 27,340 5.Realized gross profit on downstream transactions 81 $ 49,313	Ending Balance	Ending Balance		Amount $ 731,542 92,029 $ 823,571	Shareholders' Equity
	Shares (thousand) 83 6,808	Percentage of Ownership % 100 50
					$ 737,823 92,185

84 -

Headway Advanced Materials Inc.

Statement of Short-term Borrowings

December 31, 2023

Statement 8

Unit: In NTD Thousand, Unless Stated

Otherwise

Creditor E. Sun Bank CTBC Bank Urasia	Type Secured loan Non-secured loan Related party loans		Ending Balance $ 50,000 30,000 65,570 $ 145,570	Contract Term 2024.11.15- 2025.02.15 2024.11.29- 2025.02.27 2024.08.07- 2025.08.06	Interest Rate Range (%) 1.91 1.96 5.00	Credit Line 50,000 50,000 -	Guarantee or Pledge
							Note 28 None None

85 -

Headway Advanced Materials Inc.

Statement of Notes Payable

December 31, 2024

Statement 9

Unit: In NTD Thousand

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Supplier Amount
Related Parties
TPU Company $ 1,042
Isotech Products Incorporated 323
1,365
Non-related Parties
Supplier A 6,813
Supplier B 5,337
Supplier C 4,180
Supplier D 3,552
Supplier E 3,379
Others (Remark) 42,722
65,983
$ 67,348
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Remark: The amount of individual Supplier included in others does not exceed 5% of the account balance.

86 -

Headway Advanced Materials Inc.

Statement of Accounts Payable

December 31, 2024

Statement 10

Unit: In NTD Thousand

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Supplier Amount
Related Parties
TPU Company $ 521
Headway Vietnam Company 76
Isotech Products Incorporated 205
802
Non-related Parties
Supplier A 9,273
Supplier B 5,533
Supplier C 4,328
Others (Remark) 38,083
57,217
$ 58,019
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Remark: The amount of individual Supplier included in others does not exceed 5% of the account balance.

87 -

Headway Advanced Materials Inc.

Statement of Long-term Borrowings December 31, 2024

Statement 11

Unit: In NTD Thousand, Unless Stated Otherwise

Creditor Chang Hwa Bank Hua Nan Bank First Bank Total	Type Pledged loan Pledged loan Secured loan		Amount $ 165,000 50,000 35,000 $ 250,000	Contract Term 2024.12.30-2026.12.30 2024.11.01-2026.10.01 2024.05.17-2029.05.17	Interest Rate (%) 1.945 2.02 2.22	Guarantee or Pledge
						Note 29 Note 29 Note 28

88 -

Headway Advanced Materials Inc.

Statement of

Sales Revenue

From January 1 to December 31, 2024

Statement 12

Unit: In NTD Thousand, Unless Stated Otherwise

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Quantity
Item （ Metric Ton ） Amount
PU Resin 6,925 $ 649,404
Thermoplastic Polyurethane
（ TPU ） 23 2,986
Others Remark 64,122
716,512
Less ： Sale Return & Salse
Allowance ( 1,634 )
$ 714,878
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Remark : Due to the diverse unit specifications, it is not feasible to list them one by one

89 -

Headway Advanced Materials Inc.

Statement of Cost of Sales

From January 1 to December 31, 2024

Statement 13

Unit: In NTD Thousand

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Item Amount
Beginning Raw Materials $ 65,161
Inbound this Year 444,716
Ending Raw Materials ( 69,973 )
Reclassification as expenses and other losses 1,217
Sales of Raw Materials ( 426 )
Direct Raw Materials 440,695
Direct Labor 26,709
Manufacturing expense 103,415
Manufacturing Cost 570,819
Beginning Finished Goods 65,539
Ending Finished Goods ( 70,642 )
Reclassification as expenses and other losses ( 1,481 )
Production and marketing cost 564,235
Beginning Commodities 1,055
Purchasing Commodities 17,614
Ending Commodities ( 958 )
Others ( 127 )
Purchasing and marketing cost 17,584
Sales of Raw Materials 426
$ 582,245
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90 -

Headway Advanced Materials Inc.

Statement of Operating Expenses

From January 1 to December 31, 2024

Statement 14 Unit: In NTD Thousand

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Administrative
Item Selling Expenses expenses R&D expenses
Payroll Expense $ 7,142 $ 33,883 $ 13,287
Shipping Expense 9,155 1 -
Commission
- -
Expense 4,668
- -
Export Expense 3,349
Depreciation
Expense 710 1,935 1,645
Water, Electricity
and Gas Expense 379 631 1,689
Insurance Expense 1,111 2,394 1,548
Professional Service 650 6,717 30
Expense
Others (Remark) 4,271 7,956 3,697
$ 31,435 $ 53,517 $ 21,896
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Remark: The amounts for each item do not exceed 5% of the respective account balances.

91 -

Headway Advanced Materials Inc. Statement of Labor, Depreciation and Amortization by Function From January 1 to December 31, 2024, and 2023

Statement 15

Unit: In NTD Thousand

Employee benefit expense Payroll Expense Director compensation Labor and national health insurance expenses Pension expense Other employee benefit expenses Depreciation Expense Amortization Expense				2024		Total $ 91,205 1,593 8,755 3,570 4,274 $ 109,397 $ 23,964 $ 323				2023
		Under Operating Costs $ 40,391 - 4,455 1,665 2,400 $ 48,911 $ 19,674 $ -		Under Operating Expenses $ 50,814 1,593 4,300 1,905 1,874 $ 60,486 $ 4,290 $ 323				Under Operating Costs $ 37,794 - 4,643 1,767 2,167 $ 46,371 $ 15,312 $ -		Under Operating Expenses $ 45,390 1,018 4,451 2,017 2,016 $ 54,892 $ 4,954 $ 126		Total
												$ 83,184 1,018 9,094 3,784 4,183 $ 101,263 $ 20,266 $ 126

Remark 1: As of December 31, 2024, and 2023, the Company had 121 and 128 employees, respectively. There were both 7 non-employee directors. The calculation basis for employee benefits is consistent with that of the employee benefits expense.
Remark 2: The average employee benefit expense for the current year was NTD 946 thousand, the average employee benefit expense for the previous year was NTD 828 thousand.
Remark 3: The average payroll expense for the current year was NTD 800 thousand, the average payroll expense for the previous year was NTD 687 thousand.
Remark 4: Ther percentage of the changes of the average payroll expense is 16.45 %.
Remark 5: In 2024 and 2023, the Company did not have a supervisor, and therefore, there was no supervisor-related compensation.
Remark 6: The Company pays directors compensation in accordance with the "Director and Manager Compensation Policy and System" and the "Articles of Incorporation" approved by the Remuneration Committee and the Board of Directors and pays transportation expenses based on directors' attendance at board meetings. The Company pays executive compensation based on the position held, responsibilities assumed, and business performance and risk in relation to future developments and refers to industry standards for similar positions. In addition to monthly salaries, the Company provides performance-based bonuses and employee compensation as stipulated in the Company's Articles of Incorporation. The Company conducts regular performance assessments of employees as the basis for promotion and reward distribution.
92 -

AI assistant

Headway — Annual Report 2024

51919_rns_2024-11-13_6c26951a-d457-431c-91fb-df914d15b0e6.pdf

§CONTENS§

INDEPENDENT AUDITOR’S REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition

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

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Headway Advanced Materials Inc.

Parent Company Only Balance Sheets

December 31, 2024 & 2023

Headway Advanced Materials Inc. Parent Company Only Statements of Comprehensive Income From January 1 to December 31, 2024 & 2023

Unit: In NTD Thousand, EPS in NTD

Headway Advanced Materials Inc.

Headway Advanced Materials Inc.

Parent Company Only Cash Flow Statement

1. Company History

2. Date and Procedures of the Authorization of Financial Statements

3. Application of the Newly Announced and Amended Regulations and

Interpretations

4. Summary of Significant Accounting Policies

(1) Statement of compliance

(2) Preparation basis for financial statements

(4) Foreign Currency

(5) Inventory

(6) Investments in Subsidiaries

(7) Property, plant, and equipment

A) Individually acquired:

B) Derecognition:

(10) Financial instruments

C) Derivatives

(11) Income recognition

(12) Lease

A) The Company is the lessor

(13) Borrowing Cost

(14) Employee Benefit

B) Retirement benefits

(16) Income tax

A) Current income tax

5. Significant Accounting Judgments, Estimations, and the Main Sources of Assumption Uncertainties

6. Cash and Cash Equivalents

7. Financial Assets Measured at Fair Value through Profit and Loss

December 31, 2024

8. Financial Assets Measured at Fair Value through Other Comprehensive

income

9. Financial Assets Measured at the Amortized Cost

10. Notes Receivable and Accounts Receivable

(1) Accounts receivable

December 31, 2024

11. Inventories

12. Investments Accounted for Using Equity Method

13. Property, Plant and Equipment

14. Lease Agreement

15. Intangible Assets

16. Other Assets

17. Borrowings

18. Other payable

19. Retirement Benefit Plan

(1) Defined contribution plan

(2) Defined benefit plan

20. Equity

(3) Retained earnings and dividend policy

(4) Special reserve

21. Sales Revenue

22. Profit (loss) from Continuing Operations

(6) Employee benefit expense

(7) Compensation to employees and directors

Estimation ratio

23. Continuing Operations Income Tax

2024

(4) Income tax audit

24. Earnings per Share

25. Share-based Payment

Restricted stock units

26. Capital Risk Management

27. Financial Instruments

December 31, 2024

Headway Annual Report 2024