3003

K.S. TERMINALS INC. and its Subsidiaries

Consolidated Financial Statements and Independent Auditors’ Report

For the years ended December 31, 2025 and 2024

Address: No. 8, Changbin East Third Road, Shianxi Township, Changhua County

Tel.: (04) 758-0001

Consolidated Financial Statements

Item	Page
I. Cover	1
II. Table of Contents	2
III. Declaration	3
IV. CPAs’ Audit Report	4-7
V. Consolidated Balance Sheets	8-9
VI. Consolidated Statements of Comprehensive Income	10
VII. Consolidated Statements of Changes in Equity	11
VIII. Consolidated Statements of Cash Flows	12
IX. Notes to the Consolidated Financial Statements
(I) Company History	13
(II) Date and Procedure for Approval of Financial Statements	13
(III) Application of Newly Issued and Amended Standards and Interpretations	13-18
(IV) Summary of Significant Accounting Policies	18-43
(V) Critical Accounting Judgments, Assumptions, and Key Sources of Estimation Uncertainty	44-45
(VI) Description of Significant Accounting Items	45-68
(VII) Related Party Transactions	68-69
(VIII) Assets Pledged	69
(IX) Material Contingent Liabilities and Unrecognized Contractual Commitments	69
(X) Major Disaster Loss	70
(XI) Material Events After the Balance Sheet Date	70
(XII) Others	70-81
(XIII) Additional Disclosures
1. Information on Material Transactions	82-84
2. Information on Investees	84-85
3. Information on Investment in Mainland China	86
(XIV) Segment Information	87-89

Declaration

The companies to be included by the Company in the consolidated financial statement of affiliated enterprises for 2025 (January 1, 2025 – December 31, 2025), pursuant to the Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports, and Consolidated Financial Statement of Affiliated Enterprises, are the same as those to be included in the consolidated financial statements of the parent company and subsidiaries pursuant to Statement of International Financial Reporting Standards (IFRS) No. 10. Furthermore, the related information to be disclosed in the consolidated financial statements of affiliated enterprises has been disclosed in the consolidated financial statements of the parent company and subsidiaries. Accordingly, the Company does not need to prepare consolidated financial statements for affiliated enterprises separately.

In witness thereof, the Declaration is hereby presented.

K.S. TERMINALS INC.

Person in Charge: Cheng Ke-Pin

March 12, 2026

CPAs' Audit Report

To K.S. TERMINALS INC.,

Audit opinions

We have audited the accompanying consolidated balance sheets of K.S. TERMINALS INC. (the "Company") and its subsidiaries (collectively, the "Group") for the years ended December 31, 2025 and 2024, and the related consolidated statements of comprehensive income, changes in equity, and cash flows for the years then ended, as well as the related notes, including a summary of significant accounting policies (collectively referred to as the "consolidated financial statements").

In our opinion, based on our audit results and the audit reports of other CPAs (please refer to the Other Matters section), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and for the years then ended, as well as its consolidated financial performance and consolidated cash flows for the years then ended, in conformity with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Audit Opinion

We conducted our audit in accordance with the Regulations Governing the Auditing and Attestation of Financial Statements by Certified Public Accountants and the generally accepted auditing standards. Our responsibilities under those standards are further described in the paragraph "CPAs' Responsibilities for the Audit of the Consolidated Financial Statements." We are independent of the Group in accordance with the Norm of Professional Ethics for Certified Public Accountants of the Republic of China and have fulfilled our other responsibilities in accordance with these requirements. Based on our audit results and the audit reports of other accountants, we are convinced that we have obtained sufficient and appropriate audit evidence to serve as the basis for our audit opinion.

Key Audit Matters

Key audit matters refer to the most vital matters in our audit of the Group's consolidated financial statements for the year ended December 31, 2025, based on our professional judgment. These matters are addressed in our audit of the consolidated financial statements as a whole and in forming our audit opinion. We do not express a separate opinion on these matters.

Inventory Valuation

As of December 31, 2025, the Group’s net inventories amounted to NTD 1,676,561 thousand, accounting for 21% of the consolidated total assets, which was material to the financial statements. The main raw materials in the inventory are bronze and copper. Due to fluctuations in international copper prices, the prices of raw material inventories may vary greatly. Additionally, fluctuations in international raw material prices can impact the selling prices of the relevant finished goods, especially when raw material prices are excessively low. As the amount of the allowance for inventory write-downs is material to the financial statements, we adopted it as a key audit matter.

Our audit procedures included, but were not limited to, understanding and testing the effectiveness of the internal control system established by the management team regarding inventory impairment losses; assessing the reasonableness of the allowance for inventory valuation losses provided; performing inventory observation procedures to confirm the condition of year-end inventory; recalculating unit costs for selected samples; and, for net realizable values used by management, selecting samples to verify against relevant purchase and sales documentation to validate the accuracy of inventory net realizable values.

We also considered the appropriateness of the disclosures in Notes 4, 5, and 6 to the financial statements related to inventories.

Other Matters – Reference to Other Accountants

The financial statements of certain investee companies included in the consolidated financial statements of K.S. Terminals Inc. and its subsidiaries were not audited by us but were audited by other accountants. Therefore, our opinion on the aforementioned consolidated financial statements, with respect to the amounts listed in the financial statements of these investee companies, is based on the audit reports of other accountants. As of December 31, 2025, and December 31, 2024, the investments in these investee companies accounted for using the equity method were NTD 191,849 thousand and NTD 226,066 thousand, respectively, representing 2% and 3% of total consolidated assets. For the years ended December 31, 2025 and 2024, the share of profit or loss of associates and joint ventures accounted for using the equity method was NTD (34,729) thousand and NTD (40,770) thousand, representing (13)% and (5)% of net profit before tax, respectively. The share of other comprehensive income of associates and joint ventures accounted for using the equity method was NTD 512 thousand and NTD 4,974 thousand, representing (15)% and 20% of total other comprehensive income, respectively.

Responsibilities of the management and the governing body for the consolidated financial statements

The responsibilities of management are to prepare the consolidated financial statements with a fair presentation in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRSs endorsed and issued into effect by the FSC, and to maintain the necessary internal controls associated with the preparation in order to ensure that the consolidated financial statements are free from material misstatement arising from fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing relevant matters, and adopting the going concern basis of accounting unless management intends to liquidate the Group, cease operations, or has no viable alternatives but to do so.

The Group's governing body (including the Audit Committee) is responsible for supervising the financial reporting process.

CPAs' responsibilities for the audit of the consolidated financial statements

Our objectives are to obtain reasonable assurance on whether the consolidated financial statements as a whole are free from material misstatement arising from fraud or error and to issue an independent auditors' report. Reasonable assurance is a high-level assurance but is not a guarantee that an audit conducted in accordance with the generally accepted auditing standards of the Republic of China will always detect a material misstatement when it exists. Misstatement may arise from fraud or error. If the monetary amounts are misstated, either separately or in aggregate, could reasonably be expected to influence the economic decisions of the users of the consolidated financial statements, they are considered material.

We have exercised our professional judgment and maintained professional skepticism when performing the audit work in accordance with the generally accepted auditing standards. We also performed the following tasks:

We identified and assessed the risks of material misstatement arising from fraud or error within the consolidated financial statements, designed and executed countermeasures in response to said risks, and obtained sufficient and appropriate audit evidence to provide a basis for our opinion. Fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Therefore, the risk of not detecting a material misstatement resulting from fraud is higher than one resulting from error.
We learned about the internal control related to the audit in order to design appropriate audit procedures under the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
We evaluated the appropriateness of the accounting policies adopted and the reasonableness of the accounting estimates and relevant disclosures made by the management.
We drew conclusions on the appropriateness of management's adoption of the going concern basis of accounting based on the audit evidence obtained and on whether a material uncertainty exists regarding events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we are of the opinion that a material uncertainty exists, we shall remind users of the consolidated financial statements to pay attention to relevant disclosures in said statements in our audit report. If such disclosures are inadequate, we need to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

We evaluated the overall presentation, structure, and content of the consolidated financial statements (including relevant notes) and whether the consolidated financial statements adequately presented the relevant transactions and events.
We are convinced that we have acquired sufficient and appropriate audit evidence of the financial information of entities within the Group to serve as the basis of an audit opinion on the consolidated financial statements. We are responsible for guiding, supervising, and performing the audit and forming an audit opinion on the Group.

The matters communicated between us and the governing body included the planned scope and time of the audit and significant audit findings (including any significant defects in internal control identified during the audit).

We also provided the governing body with a declaration that we have complied with the Norm of Professional Ethics for Certified Public Accountants regarding independence and communicated with it all relationships and other matters that might possibly be regarded as detrimental to our independence (including relevant protective measures).

From the matters communicated with the governing body, we determined the key audit matters for the audit of the Group’s consolidated financial statements for the year ended December 31, 2025. We have clearly indicated such matters in the auditors’ report, unless legal regulations prohibit the public disclosure of specific matters or in extremely rare cases in which we decided not to communicate specific items in the auditors’ report for it could be reasonably anticipated that the negative effects of such disclosure would be greater than the public interest it might bring forth.

Others

K.S. TERMINALS has also prepared the parent company-only financial statements for the years ended December 31, 2025 and 2024, for which we have issued an unqualified opinion with an Other Matters paragraph, alongside the audit report.

EY Taiwan
Approved by the Competent Authority to Audit/Review Publicly Listed Companies’ Financial Statements
Case Audit No.: Jin-Guan-Zheng-Shen-Zi
No. 1060027042
Jin-Guan-Zheng-Shen-Zi
No. 1080326041

Certified Public Accountant: Chen Ming-Hung Huang Yu-Ting
March 12, 2026

K.S. TERMINALS INC. and its Subsidiaries

Consolidated Balance Sheets

December 31, 2025 and 2024

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Assets			December 31, 2025		December 31, 2024
Code	Accounting Item	Note	Amount	%	Amount	%
	Current Assets
1100	Cash and Cash Equivalents	4 and 6.1	$2,396,218	29	$2,876,550	34
1110	Financial Assets at Fair Value Through Profit or Loss – current	4 and 6.2	872,773	11	523,421	6
1136	Financial Assets at Amortized Cost	4	156,868	2	32,740	-
1150	Net Notes Receivable	4, 6.3, and 6.14	252,964	3	236,628	3
1170	Net Accounts Receivable	4, 6.3, and 6.14	798,545	10	809,365	9
1200	Other Receivables	4	74,623	1	32,646	-
130x	Inventories	4 and 6.4	1,676,561	21	2,029,169	25
1410	Advance Receipts	4	65,662	1	108,933	1
1470	Other Current Assets		32,162	-	28,289	-
11xx	Total Current Assets		6,326,376	78	6,677,741	78
	Non-current Assets
1517	Financial Assets at Fair Value Through Other Comprehensive Income – non-current	4 and 6.5	75,816	1	76,837	1
1550	Investments Using the Equity Method	4 and 6.6	191,849	2	226,066	3
1600	Property, plant and equipment	4, 6.8, and 7	1,414,432	18	1,488,653	18
1755	Right-of-use Assets	4, 6.15, and 7	21,877	-	12,482	-
1760	Investment Property	4	38,779	1	42,414	-
1780	Intangible Assets	4	8,305	-	9,133	-
1840	Deferred Tax Assets	4 and 6.19	22,971	-	16,765	-
1900	Other Non-current Assets		35,575	-	41,646	-
15xx	Total Non-current Assets		1,809,604	22	1,913,996	22

1XXX	Total assets		$8,135,980	100	$8,591,737	100

(Please see Notes to the Consolidated Financial Statements.)

Chairman: Cheng Ke-Pin

Managerial Officer: Cheng Chieh-Yuan

Chief Accounting Officer: Tseng Yu-Chin

K.S. TERMINALS INC. and its Subsidiaries
Consolidated Balance Sheets (Continued)
December 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Liabilities and Equity			December 31, 2025		December 31, 2024
Code	Accounting Item	Note	Amount	%	Amount	%
	Current liabilities
2100	Short-term Borrowings	4 and 6.8	$401,565	5	$326,502	4
2130	Contract Liabilities – current	4 and 6.13	16,512	-	11,020	-
2150	Notes Payable		1,645	-	2,201	-
2170	Accounts Payable		176,787	2	226,648	3
2200	Other Payables	6.9	311,050	4	358,759	4
2230	Current Tax Liabilities	4 and 6.19	43,677	1	107,006	1
2322	Long-term Liabilities Due Within One Year or One Business Cycle	4 and 6.10	197,448	2	271,946	3
2399	Other Current Liabilities	4, 6.15, and 7	16,959	-	10,356	-
21XX	Subtotal of Current Liabilities		1,165,643	14	1,314,738	15
	Non-current Liabilities
2540	Long-term Borrowings	4 and 6.10	165,777	2	363,225	5
2570	Deferred Tax Liabilities	4 and 6.19	226,286	3	197,450	2
2600	Other Non-current Liabilities	4, 6.15, and 7	9,156	-	3,816	-
25XX	Subtotal of Non-current Liabilities		401,219	5	564,491	7
2XXX	Total Liabilities		1,566,862	19	1,878,929	22
31XX	Equity Attributable to Owners of the Parent Company
3100	Capital Stock	6.12
3110	Common stock		1,556,549	19	1,556,549	18
3200	Capital Surplus	6.12	27,281	-	27,281	-
3300	Retained Earnings	6.12
3310	Legal Reserve		918,175	11	857,713	10
3320	Special Reserve		115,510	2	136,147	2
3350	Undistributed Earnings		3,982,803	49	4,186,370	48
	Subtotal of Retained Earnings		5,016,488	62	5,180,230	60
3400	Other Equity
3410	Exchange differences arising from the translation of the financial statements of foreign operations		(18,945)	-	(10,308)	-
3420	Unrealized Gain (loss) on Financial Assets at Fair Value Through Other Comprehensive Income	12	(97,128)	(1)	(105,202)	(1)
	Subtotal of Other Equity		(116,073)	(1)	(115,510)	(1)
31XX	Total Equity Attributable to Owners of the Parent Company		6,484,245	80	6,648,550	77
36xx	Non-controlling Interests	6.12	84,873	1	64,258	1
3xxx	Total Equity		6,569,118	81	6,712,808	78
	Total Liabilities and Equity		$8,135,980	100	$8,591,737	100

(Please see Notes to the Consolidated Financial Statements.)

Chairman: Cheng Ke-Pin
Managerial Officer: Cheng Chieh-Yuan
Chief Accounting Officer: Tseng Yu-Chin

K.S. TERMINALS INC. and its Subsidiaries
Consolidated Statements of Comprehensive Income
For the years ended December 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Code	Item	Note	2025		2024
			Amount	%	Amount	%
4000	Operating income	4 and 6.13	$4,396,105	100	$4,544,959	100
5000	Operating Costs	4, 6.4, and 6.16	(3,421,665)	(78)	(3,238,495)	(71)
5900	Operating Gross Profit		974,440	22	1,306,464	29
6000	Operating Expenses	6.16 and 7
6100	Selling Expenses		(303,734)	(7)	(304,577)	(7)
6200	Administrative Expenses		(239,633)	(5)	(220,640)	(5)
6300	Research and Development Expenses		(141,125)	(3)	(136,683)	(3)
6450	Gains (losses) on reversal of expected credit impairment	4 and 6.14	156	-	(454)	-
	Total Operating Expenses		(684,336)	(15)	(662,354)	(15)
6900	Operating Profit		290,104	7	644,110	14
7000	Non-operating Revenue and Expenses
7010	Other Income	17 and 6.4	61,197	1	91,288	2
7020	Other Gains and Losses	6.17	(34,001)	(1)	173,558	4
7050	Financial Costs	6.17	(14,058)	-	(16,966)	-
7060	Share of Profit or Loss of Associates and Joint Ventures Recognized Using the Equity Method	4 and 6.6	(34,729)	(1)	(40,770)	(1)
	Total Non-operating Income and Expenses		(21,591)	(1)	207,110	5
7900	Net Profit Before Tax		268,513	6	851,220	19
7950	Income Tax Expenses	4 and 6.19	(98,973)	(2)	(238,236)	(5)
8200	Current Net Profit		169,540	4	612,984	14
8300	Other Comprehensive Income (loss)	6.6, 6.18, and 6.19
8310	Items That Will not be Reclassified Subsequently to Profit or Loss
	Unrealized valuation (loss) gain on equity instrument investments measured at fair value through other comprehensive income		1,578	-	(28,035)	(1)
8316	Income Tax Related to Items not Reclassified		291	-	(44)	-
8349	Items That May be Reclassified Subsequently to Profit or Loss
8360	Exchange differences arising from the translation of the financial statements of foreign operations		(8,134)	-	58,332	1
8361	Share of other comprehensive income of associates and joint ventures accounted for using the equity method - items that may be reclassified to profit or loss		512	-	4,974	-
8370	Income Tax Related to Items That May be Reclassified to Profit or Loss		2,287	-	(10,936)	-
8399	Other Income in the Current Period (net of tax)		(3,466)	-	24,291	-
8500	Total Comprehensive Income in the Current Period		$166,074	4	$637,275	14
8600	Net Income Attributable To:
8610	Owners of Parent		$153,773		$604,622
8620	Non-controlling Interests		15,767		8,362
			$169,540		$612,984
8700	Comprehensive Income Attributable To:
8710	Owners of Parent		$147,005		$625,259
8720	Non-controlling Interests		19,069		12,016
			$166,074		$637,275
	Earnings per Share
9750	Basic Earnings per Share (NTD)	4 and 6.20	$0.99		$3.88
9850	Diluted Earnings per Share (NTD)		$0.99		$3.88

(Please see Notes to the Consolidated Financial Statements.)

Chairman: Cheng Ke-Pin
Managerial Officer: Cheng Chieh-Yuan
Chief Accounting Officer: Tseng Yu-Chin

K.S. TERMINALS INC. and its Subsidiaries
Consolidated Statements of Changes in Equity
For the years ended December 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

	Item	Equity Attributable to Owners of the Parent Company
		Common stock	Capital Surplus	Retained Earnings			Other Equity Interest Items			Total	Non-controlling Interests	Total Equity
				Legal Reserve	Special Reserve	Undistributed Earnings	Exchange differences arising from the translation of the financial statements of foreign operations	Unrealized Gain (loss) on Financial Assets at Fair Value Through Other Comprehensive Income
Code		3110	3200	3310	3320	3350	3410	3420	31XX	36XX	3XXX
A1	Balance as of January 1, 2024	$1,556,549	$27,281	$803,369	$114,850	$3,890,871	$(59,024)	$(77,123)	$6,256,773	$50,488	$6,307,261
B1	2023 Statement of Earnings Distribution			54,344		(54,344)			-		-
B3	Appropriation for legal reserve				21,297	(21,297)			-		-
B5	Appropriation for Special Reserve					(233,482)			(233,482)		(233,482)
D1	Cash Dividends on Ordinary Shares					604,622			604,622	8,362	612,984
D3	Net income for 2024						48,716	(28,079)	20,637	3,654	24,291
D5	Other Comprehensive Income for 2024
D5	Total Comprehensive Income in the Current Period	-	-	-	-	604,622	48,716	(28,079)	625,259	12,016	637,275
O1	Changes in non-controlling interests									1,754	1,754
Z1	Balance as of December 31, 2024	$1,556,549	$27,281	$857,713	$136,147	$4,186,370	$(10,308)	$(105,202)	$6,648,550	$64,258	$6,712,808
A1	Balance as of January 1, 2025	$1,556,549	$27,281	$857,713	$136,147	$4,186,370	$(10,308)	$(105,202)	$6,648,550	$64,258	$6,712,808
B1	2024 Statement of Earnings Distribution
B5	Appropriation for legal reserve			60,462		(60,462)			-		-
B17	Cash Dividends on Ordinary Shares					(311,310)			(311,310)		(311,310)
D1	Reversal of Special Reserve				(20,637)	20,637			-		-
D3	Net income for 2025					153,773			153,773	15,767	169,540
D5	Other comprehensive income for 2025						(8,637)	1,869	(6,768)	3,302	(3,466)
O1	Total Comprehensive Income in the Current Period	-	-	-	-	153,773	(8,637)	1,869	147,005	19,069	166,074
Q1	Changes in non-controlling interests									1,546	1,546
Q1	Disposal of Equity Instruments at Fair Value Through Other comprehensive Income					(6,205)		6,205	-		-
Z1	Balance as of December 31, 2025	$1,556,549	$27,281	$918,175	$115,510	$3,982,803	$(18,945)	$(97,128)	$6,484,245	$84,873	$6,569,118

(Please see Notes to the Consolidated Financial Statements.)
Managerial Officer: Cheng Chieh-Yuan
Chief Accounting Officer: Tseng Yu-Chin

Chairman: Cheng Ke-Pin

K.S. TERMINALS INC. and its Subsidiaries
Consolidated Statements of Cash Flows
For the years ended December 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Code	Item	2025	2024	Code	Item	2025	2024
AAAA	Cash flow from operating activities:			BBBB	Cash flow from investing activities:
A10000	Net Income Before Tax for This Period	$268,513	$851,220	B00020	Disposal of Financial Assets at Fair Value Through Other Comprehensive Income	2,599	-
A20000	Adjustments:			B00060	Increase in Financial Assets Measured at Amortized Cost	(124,128)	(32,740)
A20010	Income and Expenses:			B02700	Acquisition of property, plant and equipment	(96,809)	(70,312)
A20100	Depreciation Expenses	113,974	111,482	B02800	Disposal of Property, Plant and Equipment	17,119	144,517
A20200	Amortizations	4,005	3,903	B04100	Other Receivables – Decrease in Restricted Assets	-	32,664
A20300	Gains (losses) on reversal of expected credit impairment	(156)	454	B04500	Acquisition of Intangible Assets	(3,206)	(5,329)
A20400	Net gain on financial assets at fair value through profit or loss	(12,438)	(5,802)	B05350	Acquisition of Right-of-use Assets	-	(561)
A20900	Interest Expenses	14,058	16,966	B06700	Increase in Other Non-current Assets	(23,747)	(46,749)
A21200	Interest Income	(36,005)	(59,287)	BBBB	Net cash flows from (used in) investing activities	(228,172)	21,490
A21300	Dividend Income	(2,352)	(1,977)
A22300	Share of Loss of Subsidiaries, Associates, and Joint Ventures Recognized Using the Equity Method	34,729	40,770
A22500	Net losses (gains) on disposal of property, plant and equipment	8,947	(64,380)	CCCC	Cash flow from financing activities:
A23100	Gain on Disposal of Investments	(27,819)	(7,726)	C00100	Increase in Short-term Loans	987,975	1,732,859
A29900	Other Items	51,973	2,309	C00200	Decrease in Short-term Borrowings	(912,975)	(1,807,859)
A30000	Changes in Current Assets/Liabilities Related to Operating Activities:			C01600	Long-term Borrowings	-	167,930
A31115	Decrease (increase) in Financial Assets at Fair Value through Profit or Loss – current	(294,661)	111,023	C01700	Repayments of Long-term Borrowings	(271,946)	(110,157)
A31130	Decrease (increase) in Notes Receivable	(14,732)	29,199	C04020	Lease Principal Repaid	(5,841)	(5,939)
A31150	Decrease (increase) in Accounts Receivable	13,326	(153,871)	C04500	Payout of Cash Dividends	(311,310)	(233,482)
A31180	Decrease (increase) in Other Receivables	9,848	(6,410)	C05600	Interest Paid	(14,091)	(16,973)
A31200	Decrease (increase) in Inventories	308,035	(580,217)	C05800	Changes in Non-controlling Interest	1,546	1,754
A31230	Decrease (increase) in Prepayments	42,136	(48,601)	CCCC	Net Cash Outflow From Financing Activities	(526,642)	(271,867)
A31240	Increase in Other Current Assets	(310)	(743)	DDDD	Effect of Exchange Rate Changes on Cash and Cash Equivalents	(17,023)	15,077
A32125	Increase (decrease) in Contract Liabilities	5,444	(1,834)	EEEE	Decrease in Current Cash and Cash Equivalents	(480,332)	(106,429)
A32130	Decrease in Notes Payable	(556)	(1,428)	E00100	Cash and Cash Equivalents at the Beginning of the Period	2,876,550	2,982,979
A32150	Increase (decrease) in Accounts Payable	(47,169)	78,519	E00200	Cash and Cash Equivalents at the End of the Period	$2,396,218	$2,876,550
A32180	Decrease in Other Payables	(46,158)	(9,944)
A32230	Increase (decrease) in Other Current Liabilities	1,726	(930)
A33000	Cash Inflow From Operations	394,358	302,695
A33100	Interest Received	35,092	59,195
A33200	Dividends Received	2,352	1,977
A33500	Income Tax Paid	(140,297)	(234,996)
AAAA	Net Cash Inflow From Operating Activities	291,505	128,871

(Please see Notes to the Consolidated Financial Statements.)

Chairman: Cheng Ke-Pin
Managerial Officer: Cheng Chieh-Yuan
Chief Accounting Officer: Tseng Yu-Chin

K.S. TERMINALS INC. and its Subsidiaries

Notes to the Consolidated Financial Statements

For the Years Ended December 31, 2025 and 2024

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

I. Company History

K.S. TERMINALS INC. (hereinafter referred to as the “Company”) was incorporated in February 1978. It mainly engages in the production and sales of various terminal parts. It merged with Hongsong Steel Co., Ltd. on September 1, 1998. After the merger, the Company’s manufacturing, processing, and trading of iron materials, stainless steel goods, and molds increased.

The Company was approved by the competent authority to trade its stock on the Taiwan Stock Exchange in October 2011, and the stock was officially listed on the Taiwan Stock Exchange on February 19, 2002. The main operating site is located at No. 8, Zhangbin East Third Road Xianxi Township, Changhua County.

II. Date and Procedure for Approval of Financial Statements

The consolidated financial statements of the Company and its subsidiaries (hereinafter referred to as “the Group”) for the fiscal years 2025 and 2024 were approved and authorized for issue by the Board of Directors on March 12, 2026.

III. Application of Newly Issued and Amended Standards and Interpretations

Changes in accounting policies due to the initial application of the IFRSs

The Group has adopted the IFRSs endorsed by the FSC that are applicable to fiscal years beginning on or after January 1, 2025. The initial application of the newly issued and amended standards and interpretations has caused no material impact on the Group.

As of the date of approval and issuance of the financial statements, the Group has not adopted the following new standards, amendments, or interpretations that have been issued by the International Accounting Standards Board (IASB) and endorsed by the Financial Supervisory Commission (FSC):

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Item	New/Revised/Amended Standards and Interpretations	Effective Date Announced by the IASB
1	IFRS 17 Insurance Contracts	January 1, 2023
2	Amendments to Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)	January 1, 2026
3	Annual Improvements to IFRSs – Volume 11	January 1, 2026
4	Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)	January 1, 2026

(1) IFRS 17 Insurance Contracts

This standard provides a comprehensive model of insurance contracts, including all accounting-related elements (recognition, measurement, presentation, and disclosure principles). The core of the standard is a regular model. Under this model, during the initial recognition, the group of insurance contracts is measured at the aggregate amount of fulfillment cash flows and contractual service margins. The carrying amount at the end of each reporting period is the sum of the liabilities for remaining coverage and the liabilities for incurred claims.

In addition to the regular model, it also provides a specific applicable method for contracts with direct participation features (variable fee approach and a simplified method for short-term contracts) (premium allocation approach).

After this standard was published in May 2017, the amendments were published in 2020 and 2021. In these amendments, the effective date in the transitional provisions will be postponed for two years (that is, from January 1, 2021 postponed to January 1, 2023) with additional exemptions provided, while some regulations are simplified to reduce the cost of adopting this standard, and some regulations are amended to make some scenarios easier to interpret. After this standard becomes effective, it will supersede the transitional provisions (i.e. IFRS 4 "Insurance Contracts").

(2) Amendments to Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)

This amendment includes:

(a) The standard clarifies that financial liabilities are derecognized on the settlement date and specifies accounting treatment for financial liabilities settled electronically prior to the settlement date.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(b) For financial assets with environmental, social, and governance (ESG) related features or other similar contingent features, the standard clarifies how to assess their cash flow characteristics.

(d) For financial assets or liabilities with terms related to contingent features (including ESG-linked) and equity instruments classified as fair value through other comprehensive income, IFRS 7 requires additional disclosures.

(3) Annual Improvements to IFRSs – Volume 11

(a) Amendments to IFRS 1
(b) Amendments to IFRS 7
(c) Amendments to the Implementation Guidance of IFRS 7
(d) Amendments to IFRS 9
(e) Amendments to IFRS 10
(f) Amendments to IAS 7

(4) Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7)

This amendment includes:

(a) Clarification of the application of “own use” requirements.
(b) Allowance for hedge accounting when contracts are used as hedging instruments.
(c) Additional note disclosure requirements to help investors understand the impact of such contracts on an entity’s financial performance and cash flows.

The above newly issued and amended standards will be applicable for accounting periods beginning on or after January 1, 2026, and the Group has assessed that they have no material impact.

Up to the date the financial statements were approved for release, the new or amended IFRSs published by IASB and endorsed by the FSC and not adopted by the Group:

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Item	New/Revised/Amended Standards and Interpretations	Effective Date Announced by the IASB
1	Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” – Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture	To be determined by the IASB
2	IFRS 18 “Presentation and Disclosures in Financial Statements”	January 1, 2027 (Note)
3	Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)	January 1, 2027
4	Translation into a Presentation Currency in a Hyperinflationary Economy (Amendments to IAS 21 and IAS 29)	January 1, 2027

(Note) The Financial Supervisory Commission announced, on September 25, 2025, that Taiwan will adopt IFRS 18 in 2028.

(1) Amendments to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” – Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture

The amendments aim to address the inconsistency regarding the loss of control due to the investment in an affiliate or a joint venture through a subsidiary between IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures.” IAS 28 stipulates that when non-monetary assets are invested in exchange for equity in an affiliate or joint venture, the share of the resulting profit or loss shall be eliminated as the treatment method adopted for downstream transactions. IFRS 10 stipulates that the total gain or loss upon loss of control over a subsidiary shall be recognized. The amendments restrict the above requirements of IAS 28: when assets that constitute a business as defined in IFRS 3 are sold or purchased, the total resulting gain or loss shall be recognized.

In the amendments, IFRS 10 was amended so that when an investor sells or invests in a subsidiary (affiliate or joint venture) that does not constitute a business as defined by IFRS 3, only the profit or loss arising therefrom within the scope not belonging to the investor shall be recognized.

(2) IFRS 18 “Presentation and Disclosures in Financial Statements”

This standard will replace IAS 1 “Presentation of Financial Statements,” with the following major changes:

(a) Enhancing the comparability of the statement of profit or loss

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Income and expenses will be classified into five categories on the income statement: operating, investing, financing, income tax, or discontinued operations. The first three are new classifications designed to improve the structure of the income statement, requiring all entities to provide newly defined subtotals (including operating profit/loss.) By enhancing the structure of the income statement and introducing newly defined subtotals, investors will have a consistent starting point when analyzing financial performance across entities, making it easier to compare companies.

(b) Improving transparency in management performance measures
Entities are required to disclose explanations of company-specific metrics related to the income statement (referred to as management performance measures).

(c) Providing more useful aggregation of financial statement information
Application guidance has been established for determining whether financial information should be presented in the primary financial statements or in the notes. This change is expected to provide more detailed and useful information. Entities are required to provide more transparent information on operating expenses to help investors find and understand the information they use.

(3) Disclosure Initiative – Subsidiaries without Public Accountability: Disclosures (IFRS 19)

This new standard and its amendments simplify disclosure requirements for subsidiaries without public accountability and permit eligible subsidiaries to elect to apply this standard.

(4) Translation into a Presentation Currency in a Hyperinflationary Economy (Amendments to IAS 21 and IAS 29 Financial Reporting in Hyperinflationary Economies)

This amendment includes:

(a) Clarify that when a reporting entity’s functional currency is not that of a hyperinflationary economy, but its financial statements are translated into the presentation currency of a hyperinflationary economy, its operating results and financial position shall be translated using the closing exchange rate at the date of the most recent statement of financial position.

(b) Under the above circumstances, if the presentation currency subsequently ceases to be that of a hyperinflationary economy, the reporting entity shall not restate prior-period financial statement amounts.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(c) When both the functional currency and the presentation currency are those of a hyperinflationary economy, the reporting entity shall apply the relevant accounting treatment in accordance with paragraph 34 of IAS 29.

For the above standards or interpretations that have been issued by the IASB but have not yet been endorsed by the FSC, the actual effective dates will be subject to the regulations set by the FSC. The Group is currently assessing the potential impact of a new standard or amendment (2) and cannot reasonably estimate its impact at this time. The remaining new or amended standards or interpretations are not expected to have a significant impact on the Group.

IV. Summary of Significant Accounting Policies

Statement of Compliance

The Group’s consolidated financial statements for fiscal years 2025 and 2024 have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission.

Basis of Preparation

The consolidated financial statements have been prepared on the historical cost basis except for the financial instruments at fair value. The consolidated financial statements are presented in thousands of NT dollars (NTD), unless otherwise specified.

Overview of the Consolidation

Basis for Preparation of Consolidated Financial Statements

When the Company is exposed to variable returns from participation in the entity or has rights to said variable returns, and has the ability to affect such returns through its power over the entity, the Company controls the entity. In particular, the Company controls an investee only when it has the following three elements at the same time:

(1) Power over an investee (i.e. existing rights that give the current ability to direct the relevant activities);
(2) Exposed or rights to variable returns from its involvement with an investee, and
(3) Ability to use that power to affect its number of variable returns.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

When the Company directly or indirectly holds less than a majority of an investee’s voting rights or similar rights, the Company considers all relevant facts and situations to assess whether it has power over the investee, including:

(1) Contractual agreements with other holders of voting rights in the investee;
(2) Rights arising from other contractual agreements;
(3) Voting rights and potential voting rights.

When the facts and situations indicate that one or more of the three elements are changed, the Company reassesses whether it still have control over the investee.

Each subsidiary is included in the consolidated financial statements from the date of acquisition (i.e. the date when the Company gains control) till the date when the Company lost its control over the subsidiary. The accounting period and accounting policies of each subsidiary’s financial statements are consistent with those of the parent company. All intra-group account balances, transactions, unrealized gains and losses arising from intra-group transactions and dividends were all eliminated.

Changes in the shareholding in a subsidiary are treated as an equity transaction if the control over the subsidiary is not lost.

Subsidiaries’ total comprehensive income is attributed to the owners of the company and non-controlling interests, even if it results in losses for non-controlling interests.

If the Company loses control over a subsidiary, then

(1) The subsidiary’s assets (including goodwill) and liabilities are derecognized;
(2) The carrying amounts of all non-controlling interests are derecognized;
(3) The fair value of the acquisition consideration is recognized;
(4) The fair value of any investment retained is recognized;
(5) Items previously recognized in other comprehensive income by the parent company are reclassified to profit or loss for the current period, or transferred directly to retained earnings in accordance with the requirements of other International Financial Reporting Standards.
(6) The difference is recognized as current profit or loss.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The entities in the consolidated financial statements are as follows:

Name of Investor	Name of Subsidiary	Main Business Activities	2025/12/31	2024/12/31
The Company	K.S.T. INTERNATIONAL HOLDINGS LTD.	Financial Investment	100%	100%
The Company	JUNG PANG ENTERPRISE LTD.	Trade	100%	100%
The Company	K.S. Terminals USA LLC	Trade	100%	100%
The Company	TAIBON HOLDING LIMITED	Financial Investment	100%	100%
The Company	Ifchic Inc.	Internet retailing	100%	100%
The Company	K.S.TERMINALS TECHNOLOGY (THAILAND) CO., LTD. (Note 1)	Production, processing, and sales of terminal parts	100%	100%
The Company	KST TERMINALS (INDIA) PRIVATE LIMITED (Note 2)	Trade	70%	70%
The Company	KST TERMINALS (INDIA) MANUFACTURING PRIVATE LIMITED (Note 3)	Production, processing, and Sale of charging connector components	100%	-
K.S.T. INTERNATIONAL HOLDINGS LTD.	JIAN BANG (HONG KONG) HOLDING LTD.	Financial Investment	100%	100%
K.S.T. INTERNATIONAL HOLDINGS LTD.	K.S.Terminals (Asia) Co., Ltd.	Production, processing, and sales of terminal parts	100%	100%
TAIBON HOLDING LIMITED	K.S.TERMINALS (THAILAND) CO.,LTD.	Trade	49%	49%
JIAN BANG (HONG KONG) HOLDING LTD.	CHIEN HO HSING TECHNOLOGY (SUZHOU) CO., LTD	Production, processing, and sales of terminal parts	100%	100%
JIAN BANG (HONG KONG) HOLDING LTD.	K.S.TERMINALS COMPANY LIMITED VIETNAM	Trade	100%	100%
JIAN BANG (HONG KONG) HOLDING LTD.	PT.KSTERMINALS TECHNOLOGY INDONESIA	Trade	100%	100%

Note 1: K.S. TERMINALS TECHNOLOGY (THAILAND) CO., LTD. was approved for establishment on January 8, 2024.
Note 2: KST TERMINALS (INDIA) PRIVATE LIMITED was approved for establishment on August 2, 2024.
Note 3: KST TERMINALS (INDIA) MANUFACTURING PRIVATE LIMITED was approved for establishment on May 16, 2025.

Although the Company holds less than 50% of the ordinary shares in K.S. TERMINALS (THAILAND) CO., LTD., it has de facto control over the personnel, financial, and operating decisions of K.S. TERMINALS (THAILAND) CO., LTD.; therefore, it is included in the consolidated statements.

4. Foreign Currencies

The Group’s consolidated financial statements are presented in NTD, the company’s functional currency. Each entity within the Group determines its own functional currency and measures its financial statements in the functional currency accordingly.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Foreign-currency transactions of entities within the Group are translated into their respective functional currencies using the exchange rates prevailing at the transaction dates. At the end of each reporting period, foreign-currency monetary items are translated using the closing rate on that date; foreign-currency non-monetary items measured at fair value are translated using the exchange rates at the date when the fair value was measured; and foreign-currency non-monetary items measured at historical cost are translated using the exchange rates at the date of the original transaction.

Except as stated below, exchange differences arising from settlement or translation of monetary items are recognized in profit or loss for the period in which they occur:

(1) Regarding foreign-currency borrowings incurred to acquire an eligible asset, if the resulting exchange difference is regarded as an adjustment to interest costs, it is part of the borrowing cost and is capitalized as the cost of the asset.

(2) Foreign-currency items to which IFRS 9 "Financial Instruments" applies are handled in accordance with the accounting policies for financial instruments.

(3) Regarding monetary items that form part of a reportable entity's net investment in foreign operations, exchange differences arising therefrom are initially recognized in other comprehensive income and reclassified from equity to profit or loss when the net investment is disposed of.

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

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Translation of Foreign-currency Financial Statements

When the consolidated financial statements were prepared, the assets and liabilities of the foreign operations were translated into NTD at the closing exchange rate on the balance sheet date. Income and expense items were translated at the average exchange rates for the period. Any exchange differences arising from translation were recognized in other comprehensive income. When the foreign operations were disposed of, the cumulative exchange differences previously recognized in other comprehensive income as an independent component of equity were reclassified from equity to profit or loss upon recognition of the gains or losses on disposal. Regarding the partial disposal of a subsidiary with foreign operations (over which the control is lost) and the partial disposal of an interest in an affiliate or a joint arrangement with foreign operations, where the retained interest is a financial asset with foreign operations included, it is also treated as disposal.

In cases of partial disposal of a subsidiary that includes a foreign operation without losing control, the cumulative exchange differences recognized in other comprehensive income are proportionally reallocated to the non-controlling interests in that foreign operation, rather than being recognized in profit or loss. In cases of partial disposal of an associate or joint arrangement that includes a foreign operation without losing significant influence or joint control, the cumulative exchange differences are proportionally reclassified to profit or loss.

Goodwill arising from the acquisition of foreign operations and fair value adjustments to the carrying amounts of their assets and liabilities are treated by the Group as assets and liabilities of the foreign operations and are presented in their functional currency.

Criteria for Classification of Current and Non-current Assets and Liabilities

Assets that meet one of the following criteria are classified as current assets, otherwise they are non-current assets:

(1) Assets expected to be realized in the normal operating cycle or intended to be sold or consumed.

(2) Assets held primarily for the purpose of trading;

(3) Assets expected to be realized within 12 months after the balance sheet date;

(4) Cash or cash equivalents, excluding assets restricted from being exchanged or used to settle liabilities for at least 12 months after the balance sheet date.

Liabilities that meet one of the following criteria are classified as current liabilities, otherwise they are non-current liabilities:

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Liabilities expected to be settled in the normal operating cycle;
(2) Liabilities held primarily for the purpose of trading;
(3) Liabilities expected to be settled within 12 months after the balance sheet date;
(4) Does not have the right to defer settlement of the liability for at least twelve months after the end of the reporting period.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, demand deposits, and short-term time deposits and investments that are highly liquid and readily convertible into a fixed amount of cash at any time with little risk of value changes.

Financial Instruments

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

Financial assets and financial liabilities within the scope of IFRS 9 "Financial Instruments" are measured at fair value upon initial recognition; the transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (except financial assets and financial liabilities classified as at fair value through profit or loss) are added to or deducted from the fair values of the financial assets and financial liabilities.

(1) Recognition and Measurement of Financial Assets

Regular trading of financial assets is recognized and derecognized in accordance with trade date accounting.

The Group classifies financial assets as those subsequently measured at amortized cost, at fair value through other comprehensive income, or at fair value through profit or loss based on the two bases below:

A. The business model for financial asset management
B. Contractual cash flow characteristics of financial assets

Financial Assets at Amortized Cost

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Financial assets that meet both of the following conditions are measured at amortized cost and presented as notes receivable, accounts receivable, financial assets measured at amortized cost, and other receivables on the balance sheet:

A. Business model for financial asset management: Holding financial assets to collect contractual cash flows.

B. Contractual cash flow characteristics of financial assets: The cash flow is entirely the payment for principal and the interest on the outstanding principal.

Such financial assets (excluding those for hedging) are subsequently measured at the amortized cost (the amount measured upon initial recognition, less the principal repaid, plus or less the cumulative amortization of the differences between the initial amount and the due amount (the effective interest approach adopted), with the allowance for losses adjusted). The gain or loss is recognized in profit or loss upon derecognition, through the amortization process, or when an impairment gain or loss is recognized.

Interest accrued using an effective interest method (effective interest rate multiplied by the total book value of a financial asset) or based on the situations below is recognized in profit or loss:

A. In the case of a credit-impaired financial asset purchased or created, the credit-adjusted effective interest rate is multiplied by the amortized cost of the financial asset;

B. If it is not the case but subsequently becomes credit-impaired, the effective interest rate is multiplied by the amortized cost of the financial asset.

Financial Assets at Fair Value Through Other Comprehensive Income

Financial assets that meet both of the following criteria are measured at fair value through other comprehensive income and recognized in the balance sheet as financial assets at fair value through other comprehensive income:

A. The business model for financial asset management: Collection of contractual cash flows and sales of financial assets.

B. Contractual cash flow characteristics of financial assets: The cash flow is entirely the payment for principal and the interest on the outstanding principal.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)
(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The recognition of relevant gains and losses on such financial assets is specified below:

A. Before derecognition or reclassification, except for impairment gains or losses and foreign-currency exchange gains or losses that are recognized in profit or loss, such gains or losses are recognized in other comprehensive income.

B. Upon derecognition, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

C. Interest accrued using an effective interest method (effective interest rate multiplied by the total book value of a financial asset) or based on the situations below is recognized in profit or loss:

(a) In the case of a credit-impaired financial asset purchased or created, the credit-adjusted effective interest rate is multiplied by the amortized cost of the financial asset;

(b) If it is not the case but subsequently becomes credit-impaired, the effective interest rate is multiplied by the amortized cost of the financial asset.

In addition, regarding equity instruments within the scope of IFRS 9 that are neither held for trading nor contingent consideration recognized by an acquirer in a business combination to which IFRS 3 applies, the Group, upon initial recognition, elects (irrevocably) to recognize the subsequent changes in the fair values thereof in other comprehensive income. The amount recognized in other comprehensive income must not be subsequently reclassified to profit or loss (when such equity instruments are disposed of, it will be included in the cumulative amount of other equity items and directly transferred to retained earnings) and is recognized in the balance sheet as a financial asset at fair value through other comprehensive income. Investment dividends are recognized in profit or loss unless they clearly represent a recovery of part of the cost of the investment.

Financial Assets at Fair Value Through Profit or Loss

Except for the above financial assets in alignment with specific criteria that are measured at amortized cost or fair value through other comprehensive income, financial assets are measured at fair value through profit or loss and recognized in the balance sheet as financial assets at fair value through profit or loss.

Such financial assets are measured at fair value, and any gain or loss arising from remeasurement is recognized in profit or loss. The gain or loss recognized in profit or loss includes any dividends or interest received due to the financial asset.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(2) Impairment of Financial Assets

The Group’s investments in debt instruments at fair value through other comprehensive income and financial assets at amortized cost are recognized as expected credit losses with an allowance for losses provided. An allowance for losses on an investment in a debt instrument measured at fair value through other comprehensive income is recognized in other comprehensive income without reducing the carrying amount of the investment.

The Group measures expected credit losses in a way that reflects the following:

A. An unbiased, probability-weighted amount determined by evaluating each potential outcome
B. Time Value of Money
C. Reasonable and Corroborative Information Related to Past Events, Present Conditions, and Future Economy Forecasts (which can be accessed without an excessive cost or investment on the balance sheet date)

The methods of measuring an allowance for losses are specified below:

A. Measured at 12-month expected credit losses: Including financial assets with the credit risk not increasing significantly since the initial recognition or those with an estimated low credit risk on the balance sheet date. Also, it includes an allowance for the lifetime expected credit losses during the prior reporting period, without meeting the indicator that the credit risk has significantly increased since the initial recognition on the balance sheet date of this period.
B. Measured at lifetime expected credit losses: Including financial assets with the credit risk increasing significantly since the initial recognition or credit-impaired financial assets purchased or created.
C. For accounts receivable or contract assets arising from transactions within the scope of IFRS 15, the Group measures an allowance for lifetime expected credit losses.
D. For lease receivables arising from transactions within the scope of IFRS 16, the Group measures the loss allowance at an amount equal to the lifetime expected credit losses.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

On each balance sheet date, the Group evaluates whether the credit risk of a financial instrument has increased significantly after the initial recognition by comparing the default risk of the financial instrument on the balance sheet date and the initial recognition date. Please refer to Note 12 for relevant credit risk information.

(3) Derecognition of Financial Assets

The Group derecognizes a financial asset held in the case of any of the following circumstances:

A. The contractual rights to receive the cash flows from the financial asset have expired.
B. A financial asset is transferred with all the risks and rewards attached to the ownership of the asset substantially transferred to the counterparty.
C. All the risks and rewards attached to the ownership of the asset are neither substantially transferred nor retained, but the control over the asset is transferred.

When a financial asset as a whole is derecognized, the difference between its carrying amount and the sum of the consideration received or receivable plus any cumulative gain or loss recognized in other comprehensive income is recognized in profit or loss.

(4) Financial Liabilities and Equity Instruments

Classification of Liabilities and Equity

Liabilities and equity instruments issued by the Group are classified as financial liabilities or equity as per the substance of the agreement and the definitions of financial liabilities and equity instruments.

Equity Instruments

An equity instrument refers to any contract that demonstrates the Group's remaining interest in assets less all of its liabilities. Equity instruments issued by the Group are recognized at the acquisition prices, less the direct issuance cost.

Hybrid Instruments

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group recognizes the components of financial liabilities and equity for the convertible corporate bonds issued in accordance with the contractual terms. Also, for the issued convertible corporate bonds, before the equity elements are distinguished, whether the economic characteristics and risks of the embedded call and put options are closely related to the main debt products are assessed.

For the liability without derivatives involved, after the market interest rate assessment of the non-convertible bonds with similar fair values, the amount of the liability is classified as financial liabilities at amortized cost before conversion or redemption. Regarding the embedded derivatives with their economic characteristics and risks not closely related to the master contract (such as the embedded repurchase right and the redemption right with the exercise price confirmed to be unable to be almost equal to the amortized cost of the debt products on each exercise date), except for the equity component, they are classified as a liability component and measured at fair value through profit or loss after the balance sheet date. The amount of the equity component is determined at the fair value of the convertible corporate bonds less the liability component, and its book value is not remeasured in the period following the balance sheet date. If the issued convertible corporate bond does not include an equity element, it is handled as a hybrid instrument in accordance with IFRS 9.

Transaction costs are allocated to the liability and the equity components in proportion to the percentage of the initially recognized convertible corporate bonds allocated to the liability and the equity components.

When a holder of the convertible corporate bonds requests the exercise of their conversion right before the convertible corporate bonds matures, the carrying amount of the liability component shall be adjusted to the carrying amount that should have been upon conversion as the basis for accounting for ordinary shares issued.

Financial Liability

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

Financial Liabilities at Fair Value Through Profit or Loss

Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated at fair value through profit or loss.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

When satisfying one of the criteria below, it is classified as a liability held for trading:

A. The acquisition is mainly for short-term sale;
B. It is part of a portfolio of identifiable financial instruments that are managed on a consolidated basis upon initial recognition, with evidence showing that the portfolio has recently been used to make a short-term profit; or
C. Derivatives (excluding financial guarantee contracts or effective designated hedging instruments).

For contracts containing one or more embedded derivatives, an overall hybrid (combined) contract can be designated as a financial liability at fair value through profit or loss; when it is aligned with one of the factors below with more relevant information that can be provided, it is designated as a financial liability at fair value through profit or loss upon initial recognition:

A. The designation eliminates or considerably reduces the measurement or recognition inconsistency; or
B. The performance of a group of financial liabilities or a group of financial assets and financial liabilities is managed and measured at fair value in accordance with the written risk management or investment strategies, and the portfolio information provided to the management team within the Group is also measured at fair value.

Any gain or loss arising from remeasurement of such financial liabilities is recognized in profit or loss. The gain or loss recognized in profit or loss includes any interest paid for the financial liability.

Financial Liabilities at Amortized Cost

Financial liabilities measured at amortized cost, including payables and borrowings, are subsequently measured using the effective interest rate method after the initial recognition. When financial liabilities are derecognized and amortized with the effective interest rate method, the relevant gains or losses and amortizations are recognized in profit or loss.

The amortized cost is calculated with the discount or premium and the transaction cost upon acquisition taken into account.

Derecognition of Financial Liabilities

When the obligations of financial liabilities are lifted, canceled, or expire, the financial liabilities are derecognized.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

When the Group exchanges debt instruments with materially different terms with a creditor or significantly changes all or part of the terms of the existing financial liabilities (financial difficulties or not), the initial liabilities are derecognized and new liabilities are recognized. When a financial liability is derecognized, the difference between its carrying amount and the total consideration paid or payable (including non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(5) Offset of Financial Assets and Liabilities

Financial assets and financial liabilities can only be offset and presented in the balance sheet as a net amount when the recognized amount is legally entitled to be offset with an intention to be settled in a net amount or realize the asset and settle the liability at the same time.

Derivatives

The derivatives held or issued by the Group are used to hedge exchange rate risk and interest rate risk. Among them, those designated to effectively hedge risks are recognized as financial assets or liabilities for hedging purposes in the balance sheet; the remaining ones not designated to effectively hedge risks are presented in the balance sheet as financial assets or financial liabilities at fair value through profit or loss.

A derivative is initially recognized at fair value on the date the derivative contract is signed and subsequently measured at fair value. When the fair value of the derivative is a positive figure, it is a financial asset; a negative figure, it is a financial liability. Any change in the fair value of the derivative is recognized directly in profit or loss, but if hedging is involved and effective, the derivative is recognized in profit or loss or equity depending on the type of hedging.

Where a master contract is about a non-financial asset or financial liability, if the economic characteristics and risks of the derivative embedded in the master contract are not closely related to the master contract, and the master contract is not measured at fair value through profit or loss, the embedded derivative should be regarded as an independent derivative.

Fair Value Measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. It is assumed that the sale of the asset or transfer of the liability takes place in one of the markets below when the fair value is measured:

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) The principal market for the asset or liability, or
(2) If there is no principal market, the most favorable market for the asset or liability.

The principal or most favorable market should be accessible for the Group to trade in.

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

The fair value of a non-financial asset is measured based on market participants' ability to make the most of or put the asset to the best use or by selling the asset to another market participant who will make the most of or put the asset to the best use to generate economic benefits.

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

Inventories

Inventories are valued at the lower of cost or net realizable value with an item-by-item comparison method.

Costs refer to the costs incurred in bringing inventories to a condition and location ready for sale or production:

Raw materials are valued at the actual purchase cost with a weighted average method.

Finished goods and works-in-process include direct raw materials, labor, and fixed manufacturing overhead apportioned based on normal production capacity, excluding the borrowing costs.

The net realizable value is calculated based on the estimated selling price, less the costs and selling expenses required till completion in the ordinary course of business.

The provision of services is handled in accordance with IFRS 15 outside the scope of inventories.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

12. Investments Using the Equity Method

The Group’s investments in affiliates are accounted for using the equity method, except for assets that are classified as assets held for sale. Affiliates refer to those on which the Group has significant influence. A joint venture refers to a type of arrangement whereby the Group has rights to the net assets of the joint arrangement (those with joint control).

Under the equity method, investments in associates or joint ventures are recognized on the balance sheet at cost plus the Group’s proportionate share of post-acquisition changes in the net assets of the associate or joint venture based on the Group’s ownership percentage. When the carrying amount of an investment in an associate or joint venture and other related long-term interests have been reduced to zero under the equity method, additional losses and liabilities are recognized to the extent that legal or constructive obligations have been incurred or payments have been made on behalf of the associate. Unrealized profits and losses resulting from transactions between the Group and its associates or joint ventures are eliminated to the extent of the Group’s interest in the associate or joint venture.

When changes in the equity of an associate or joint venture do not result from profit or loss and other comprehensive income items and do not affect the Group’s percentage of ownership, the Group is share of such changes in equity in proportion to its ownership interest. The capital surplus thus recognized is reclassified to profit or loss on a pro-rata basis when the associate or joint venture is subsequently disposed of.

When an associate or joint venture issues new shares and the Group does not subscribe to these shares in proportion to its ownership percentage, resulting in changes in the investment ratio and consequently in the Group’s share of net assets in the associate or joint venture, these changes are adjusted through “Capital Surplus” and “Investments Accounted for Using Equity Method.” When the proportion of investment decreases, the relevant items previously recognized in other comprehensive income will be reclassified to profit or loss or other appropriate accounts depending on the percentage of the decrease. The capital surplus recognized as described above is reclassified to profit or loss on a pro-rata basis when the associate or joint venture is subsequently disposed of.

The financial statements of the associates or joint ventures are prepared for the same reporting period as the Group and adjusted to align their accounting policies with those of the Group.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

At the end of each reporting period, the Group assesses whether there is objective evidence indicating any impairment of its investments in affiliates in accordance with "IAS 28 – Investments in Associates and Joint Ventures" (prior to January 1, 2025, IAS 39). If such evidence exists, the Group calculates the impairment based on the difference between the recoverable amount and the carrying amount of the affiliate in accordance with IAS 36 "Impairment of Assets," and recognizes the amount in profit or loss. If the value in use of the investment is adopted for the above recoverable amount, the Group determines the relevant values in use based on the estimates below:

(1) The Group’s share of the present value of the estimated future cash flows expected to be generated by an associate or joint venture includes cash flows from the operations of the associate or joint venture and the proceeds from the ultimate disposal of the investment; or

(2) The present value of the estimated future cash flows from dividends from the investment that the Group expects to receive and the proceeds from the disposal of the investment.

Since goodwill included in the carrying amount of an investment in an associate or joint venture is not separately recognized, it is not subject to the impairment testing requirements for goodwill under IAS 36 "Impairment of Assets."

When significant influence over an associate or joint control over a joint venture is lost, the Group measures and recognizes any retained investment at its fair value. Upon loss of significant influence or joint control, the difference between the carrying amount of the investment in the associate or joint venture and the fair value of the retained investment plus proceeds from disposal is recognized in profit or loss. Also, when an investment in an affiliate becomes an investment in a joint venture, or an investment in a joint venture becomes an investment in an affiliate, the Group continues to adopt the equity method without re-measuring the retained equity.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

13. Property, plant and equipment

Property, plant and equipment are accounted for on the basis of acquisition cost and recognized after accumulated depreciation and impairment are deducted. The above costs include the cost of dismantling or removing of property, plant and equipment and restoring the location, and necessary interest expenses arising from unfinished projects. Each component of property, plant and equipment is depreciated separately if it is significant. When a major component of property, plant, and equipment needs to be replaced regularly, the Group treats it as an individual asset and recognizes it separately with a specific useful life and depreciation method. The carrying amount of the replaced part should be derecognized in accordance with the requirement for derecognition under IAS 16 "Property, Plant and Equipment." If a major examination or repair cost meets the criteria for recognition, it is regarded as a replacement cost and recognized as part of the carrying amount of plant and equipment, while other repair and maintenance expenses are recognized in profit or loss.

Assets below are depreciated on a straight-line basis over the estimated useful lives:

Assets	Useful Life
Property and Buildings	5–50 years
Machine equipment	3–15 years
Transportation Equipment	4–10 years
Office Equipment	3–10 years
Leasehold Improvements	3–10 years
Miscellaneous Equipment	3–20 years

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

The residual value, years of useful life, and depreciation method of property, plant and equipment are assessed at the end of each fiscal year. If the expected value is different from the previous estimate, the change is considered a change in accounting estimates.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

14. Investment Property

The Group’s self-owned investment property is initially measured at cost, including transaction cost of the property. The carrying amount of investment property includes the cost of repairing or adding to the existing investment property under the condition that the cost can be recognized; however, the repair or maintenance costs that usually occur on a daily basis are not included as part of the cost. After initial recognition, except for those meeting the criteria for being classified as those held for sale (or included in the disposal group classified as held for sale) in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”; as per IAS 16 “Property, Plant and Equipment” regarding such a situation, if such an asset is held by the lessee as a right-of-use asset and is not held for sale as per IFRS 5, it is handled in accordance with IFRS 16.

Assets below are depreciated on a straight-line basis over the estimated useful lives:

Assets	Useful Life
Buildings	10–20 years

Investment property is derecognized upon disposal or when it is permanently withdrawn from use and no future economic benefits are expected from its disposal, and any resulting gain or loss is recognized in profit or loss.

The Group determines transfers to or from investment property based on the actual use of the asset.

When a property meets or no longer meets the definition of investment property with evidence showing that the purpose has changed, the Group will reclassify the property as investment property or transfer it out of investment property.

15. Leasing

The Group assesses whether or not an arrangement is (or includes) a lease arrangement on the inception of the agreement. If an agreement transfers control over the use of an identified asset for a period of time in exchange for consideration, the agreement is (or includes) a lease arrangement. In order to assess whether the agreement transfers control over the use of the identified asset for a period of time, the Group assesses whether it meets both of the following conditions during the entire period of use:

(1) Obtaining the right to almost all economic benefits from the use of the identified asset; and

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(2) The right to direct the use of the identified asset.

For the agreement that belongs to (or includes) a lease arrangement, the Group treats each lease component in the agreement as a separate lease and treats it separately from the non-lease component in the agreement. For the agreement that includes one lease component and one or more additional lease or non-lease components, the Group adopts the relative standalone price of each lease component and the aggregate standalone prices of the non-lease components as the basis to distribute the consideration in the agreement to the lease component. The relative standalone prices of lease and non-lease components are determined on the basis of the prices charged by the lessor (or similar suppliers) for the components (or similar components). If an observable standalone price is not readily available, the Group maximizes the use of observable information to estimate the standalone price.

The Group as Lessee

In addition to meeting and selecting short-term leases or leases of low-value underlying assets, when the Group is the lessee of a lease contract, all leases are recognized in right-of-use assets and lease liabilities.

The Group measures the lease liabilities on the inception date based on the present value of the lease payments not yet paid on that date. If the implied interest rate of the lease is easily determined, the lease payments will be discounted to their present value using that interest rate. If such interest rate is not easily determined, the incremental borrowing rate will be used. On the inception date, the lease payments included in the lease liabilities include the following payments related to the right to use the underlying assets during the lease period and not yet paid on that date:

(1) Fixed payment (including substantive fixed payment) less any lease incentives that can be collected;
(2) Lease payment that depends on changes in an index or rate (using the index or rate on the inception date for initial measurement);
(3) The amount expected to be paid by the lessee under the residual value guarantee;
(4) If the Group can reasonably determine the exercise price of call option, it will exercise the option; and
(5) The penalty payable for the termination of a lease, if there is a sign that the lessee, in the lease period, will exercise the option of terminating the lease.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

After the inception date, the Group measures the lease liabilities at amortized cost and increases the carrying amount of the lease liabilities using the effective interest method to reflect the interest on the lease liabilities; the lease payments reduce the carrying amount of the lease liabilities.

On the inception date, the Group measures the right-of-use assets at cost. The cost of the right-of-use assets includes:

(1) The monetary amount of the lease liability initially measured;
(2) Any lease payments made on or before the inception date less any lease incentives received;
(3) Any initial direct costs incurred by the lessee; and
(4) An estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the condition required by the terms and conditions of the lease.

Subsequent measurement of the right-of-use assets is presented after the cost less the accumulated depreciation and accumulated impairment loss, i.e. the cost model is applied to measure the right-of-use assets.

If the ownership of the underlying asset is transferred to the Group when the lease period expires, or if the cost of the right-of-use assets reflects that the Group will exercise the call option, the right-of-use assets will be depreciated from the commencement date to the end of the useful life of the underlying asset. Otherwise, the Group depreciates the right-of-use assets from the inception date to the end of the useful life of the right-of-use assets or to the expiration of the lease period, whichever is earlier.

The Group applies IAS 36 “Impairment of Assets” to determine whether a right-of-use asset is impaired and to deal with any identified impairment losses.

In addition to meeting and selecting short-term leases or leases of low-value underlying assets, the Group presents right-of-use assets and lease liabilities in the balance sheet, and presents lease-related depreciation expenses and interest expenses separately in the statement of comprehensive income.

For short-term leases and leases of low-value underlying assets, the Group chooses to adopt the straight-line basis or another systematic basis to recognize the lease payments related to said leases in expenses over the lease term.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Group as a Lessor

The Group classifies each of its leases as operating leases or financial leases on the contract inception date. If a lease transfers almost all the risks and rewards attached to the ownership of the underlying asset, it is classified as a financial lease; if it does not transfer said matters, it is classified as an operating lease. On the inception date, the Group recognizes the assets held under the finance leases in the balance sheet and presents them as financial lease receivables based on the net lease investment.

For agreements that include lease components and non-lease components, the Group applies IFRS 15 to distribute the consideration in the agreements.

The Group recognizes lease payments from operating leases as rental income on a straight-line basis or another systematic basis. For operating leases, lease payments that are not dependent on change in some index or rate are recognized as rental income when they occur.

16. Intangible Assets

Intangible assets that are acquired separately are initially measured at cost. The cost of intangible assets acquired through a business combination is the fair value at the acquisition date. After initial recognition of intangible assets, the carrying amount is the amount of the cost less accumulated amortization and accumulated impairment losses. Internally generated intangible assets that do not meet the recognition criteria shall not be capitalized, but shall be recognized in profit or loss when they occur.

The useful life of intangible assets is divided into limited and indefinite useful life.

Intangible assets with a limited useful life are amortized over their useful life, and an impairment test is performed when there are signs of impairment. The amortization period and method of intangible assets with limited useful life are reviewed at least at the end of each fiscal year. If the estimated useful life of an asset is different from the previous estimate, or the expected pattern of future economic benefit consumption has changed, the amortization method or period will be adjusted and considered a change in accounting estimates.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Intangible assets with indefinite useful lives are not amortized, but impairment tests are conducted to each asset or based on the level of cash-generating units each year. Intangible assets with indefinite useful lives are assessed in each period whether there are events and circumstances that continue to support that the asset's useful life is still indefinite. If the useful life is changed from indefinite to limited, the application will be applied prospectively.

The profit or loss arising from the derecognition of an intangible asset is recognized as profit or loss.

The Group's accounting policy for intangible assets is summarized as follows:

	Patents	Computer Software	Other Intangible Assets
Useful Life	13–20 years	1–5 years	2–10 years
Amortization Method	Straight-line Method	Straight-line Method	Straight-line Method
Internal Generation or External Acquisition	External Acquisition	External Acquisition	External Acquisition

Impairment of Non-financial Assets

At the end of each reporting period the Group assesses whether all assets subject to IAS 36 "Impairment of Assets" show signs of impairment. If there is any indication of impairment or an impairment test is required for an asset on a regular basis each year, the Group tests the individual asset or the cash-generating unit to which the asset belongs. If the carrying amount of an asset or the cash-generating unit to which the asset belongs is greater than its recoverable amount in an impairment test, the impairment loss is recognized. The recoverable amount is the higher of fair value, less disposal cost, or value in use.

At the end of each reporting period, the Group assesses assets other than goodwill to see whether there are indications that the previously recognized impairment losses may no longer exist or may be decreased. In the event of such an indication, the Group estimates the recoverable amount of the asset or cash-generating unit. If the recoverable amount is increased due to the change in the estimated service potential of the asset, the impairment amount is reversed. However, the reversed carrying amount shall not exceed that before recognizing impairment loss and after deducting depreciation or amortization.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The cash-generating unit or group to which the goodwill belongs, regardless of whether there are signs of impairment, is subject to impairment tests on an annual basis. If the result of an impairment test needs to be recognized as an impairment loss, the goodwill will be deducted first, and the amount after deduction will be allocated to other assets other than goodwill based on the relative proportion of the carrying amount. Once the impairment of goodwill is recognized, it shall not be reversed for any reason thereafter.

The impairment loss and reversal amount of the continuing operations are recognized in profit or loss.

18. Provisions

Provisions are recognized when there is a present legal or constructive obligation as a result of past events, it is probable that an outflow of economic resources will be required to settle the obligation, and the amount of the obligation can be reliably estimated. When the Group expects that some or all of the provisions can be reimbursed, it will be recognized as a separate asset only when the reimbursement is almost completely certain. If the time value of money has a material impact, the provisions discounted at the current pre-tax interest rate can appropriately reflect the specific risks of the liability. When liability is discounted, the increase in the amount of liability due to the passage of time is recognized as a borrowing cost.

If the obligation event occurs over a period of time, the liability for levies is recognized progressively.

19. Recognition of Revenue

The Group’s revenue from customer contracts mainly includes the sales of goods and provision of services. The accounting treatments are specified below:

Product Sales

The Group manufactures and sells products and recognizes revenue when the promised products are delivered to a customer and the customer obtains control over them (i.e. the customer’s ability to direct the use of the products and obtain nearly all the remaining benefits from the products). Its main products are connectors and wires or cables, and sales revenue is recognized at the prices stated in the contracts.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The credit period of the Group’s products sold is 90 days. All contracts are recognized as accounts receivable when the control over the products is transferred with an unconditional right to receive consideration. Such accounts receivable are usually short-term without major financial components.

Provision of Services

The Group mainly provides processing services for connectors. Such services are individually priced or negotiated and recognized as revenue when the promised processed products are delivered to the customer, and the customer obtains control over them (i.e. the customer’s ability to direct the use of the products and obtain almost all the remaining benefits).

20. Borrowing Costs

Borrowing costs that can be directly attributable to the acquisition, construction, or production of qualified assets are capitalized as part of the costs of the assets. All other borrowing costs are recognized as expenses in the period in which they are incurred. Borrowing costs include interest and other costs incurred in relation to borrowings.

21. Post-employment Benefit Plan

The pension plan for the Group’s employees applies to all full-time employees. The employee pension fund is fully contributed to the Labor Pension Reserves Committee and deposited into the pension fund account. The aforementioned pension is deposited in the name of the Labor Pension Reserves Committee, which is completely separate from the Group; therefore, it is not included in the consolidated financial statements mentioned in the preceding paragraph. The pension plan for employees at overseas subsidiaries is handled in accordance with local laws and regulations.

For defined contribution post-employment benefit plans, the Company’s monthly contribution rate for employee pensions shall not be less than six percent of the employee’s monthly salary. The contribution amount is recognized as an expense for the current period. Foreign subsidiaries make contributions at specific rates in accordance with local requirements and recognize these as expenses for the current period.

22. Income Tax

Income tax expenses (benefits) refer to the sum related to current income tax and deferred tax included in the current profit or loss.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Current Income Tax

The current income tax liabilities (assets) related to the current and prior periods are measured at the legislated or substantially legislated tax rates and tax laws at the end of the reporting period. The current income tax related to the items recognized in other comprehensive income or directly recognized in the equity is recognized in other comprehensive income or equity instead of being recognized in the profit or loss

The additional corporate income tax on undistributed earnings is recognized as income tax expense on the date the shareholders’ meeting resolves the appropriation of earnings.

(2) Deferred Tax

The deferred tax is calculated according to the temporary difference between the taxable amount of assets and liabilities and the carrying amount on the balance sheet at the end of the reporting period.

Except for the following two items, all taxable temporary differences are recognized as deferred income tax liabilities:

A. The initial recognition of goodwill, or the initial recognition of an asset or liability that does not arise from a business combination and does not affect accounting profits and taxable income (loss) at the time of the transaction conducted;

B. The taxable temporary difference arising from the investment in subsidiaries, associates, and joint equity. Also, the timing of reversal is controllable, and it is not likely to be reversed in the foreseeable future;

Except for the following two items, deductible temporary difference and deferred tax assets arising from the taxable losses and income tax credit are recognized within the range of probable future taxable income:

A. It is related to the deductible temporary difference from the initial recognition of an asset or liability that does not arise from a business combination and does not affect accounting profits and taxable income (loss) at the time of the transaction conducted.;

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

B. Deductible temporary differences associated with investments in subsidiaries, associates, and interests in joint arrangements are recognized only to the extent that it is probable that they will reverse in the foreseeable future and that there will be sufficient taxable income available against which the temporary differences can be utilized when they reverse.

Deferred tax assets and liabilities are measured at the tax rate of the expected asset realization or in the period in which the liability is settled. The tax rate is based on the legislated or substantially legislated tax rates and tax laws at the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences arising from the manner in which the asset is expected to be recovered or the book value of the liability is settled at the end of the reporting period. If the deferred tax is related to items that are not included in profit or loss, it will not be recognized in profit or loss but will be recognized in other comprehensive income according to the relevant transactions or directly recognized in equity. Deferred tax assets are reexamined and recognized at the end of each reporting period.

Deferred income tax assets and liabilities are offset only when there is a legally enforceable right to offset current income tax assets against current income tax liabilities, and when the deferred income taxes relate to the same taxable entity and to income taxes levied by the same taxation authority.

In accordance with the temporary exemption provisions of "International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12)," deferred tax assets and liabilities related to Pillar Two income taxes shall not be recognized, and related information shall not be disclosed.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

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

When the consolidated financial statements are prepared by the Group, the management must make judgments, estimates, and assumptions at the end of the reporting period, which will affect the disclosures of income, expenses, assets, and liabilities, and contingent liabilities. However, the uncertainty of these significant assumptions and estimates may result in a significant adjustment to the book value of an asset or liability in the future period.

Estimation and Assumption

The main source of information on the estimation and assumption with uncertainty at the end of the reporting period has significant risks that result in significant adjustments to the carrying amounts of assets and liabilities in the next fiscal year. The explanations are given as follows:

Inventory Valuation

The net realizable value of inventories is estimated based on the most reliable evidence of the expected realizable number of inventories available upon estimation by taking into account the fact that the inventory may be damaged or wholly or partially obsolete, or the selling price has dropped. Please refer to Note 6 for details.

Fair Values of Financial Instruments

When the fair values of financial assets and financial liabilities recognized in the balance sheet cannot be obtained from the active market, the fair value will be determined using evaluation techniques, including the income approach (such as cash flow discount model) or market approach. The changes in the assumptions of said approaches will affect the fair value of the financial instruments reported. Please refer to Note 12 for details.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Income Tax

The uncertainty of income tax exists in the interpretation of complex tax regulations and the amount and timing of future taxable income. Due to a wide range of international business relationships and the long-term and complexity of contracts, the differences between actual results and assumptions made, or changes in such assumptions in the future, may cause the booked income tax benefits and expenses to be adjusted in the future. The recognition of income tax is a reasonable estimation made according to the possible audit results of the local tax authorities of the countries in which the Group operates. The amount recognized is based on different factors, such as previous tax audit experience and the difference in tax law interpretation between the tax entity and the tax authority. The difference in interpretation may result in a variety of issues due to the local situation of the country where an individual enterprise of the Group operates.

The carryforwards of the taxable loss and income tax credit and deductible temporary differences are recognized as deferred tax assets within the range of probable future taxable income or taxable temporary differences. The amount of the deferred income tax assets to be recognized is estimated according to the possible timing and level of the future taxable income and taxable temporary difference, and also the future tax planning strategy.

VI. Description of Significant Accounting Items

Cash and Cash Equivalents

	2025/12/31	2024/12/31
Cash on Hand	$3,046	$3,866
Demand Deposits	1,149,574	1,672,808
Time Deposits (Note)	809,547	835,480
Cash Equivalents	434,051	364,396
Total	$2,396,218	$2,876,550

Note Refers to items with maturities of three months or less from the contract date, and that are readily convertible into known amounts of cash with insignificant risk of changes in value.

The Group has not pledged any cash and cash equivalents as collateral.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Financial Assets at Fair Value Through Profit or Loss – current

	2025/12/31	2024/12/31
Mandatorily as at Fair Value Through Profit or Loss:
Funds	$709,702	$521,528
Stock	163,071	1,893
Total	$872,773	$523,421

The Group did not provide financial assets at fair value through profit or loss as collateral.

Notes and accounts receivable, net

	2025/12/31	2024/12/31
Notes Receivable	$252,964	$236,628
Less: Allowance for Losses	-	-
Subtotal	252,964	236,628
Accounts Receivable	802,780	815,998
Less: Allowance for Losses	(4,235)	(6,633)
Subtotal	798,545	809,365
Total	$1,051,509	$1,045,993

The Group’s notes receivable and accounts receivable have not been pledged as collateral.

The Group’s credit period to clients is usually 90 days. Please refer to Note 6.14 for information on allowances for losses provided for 2025 and 2024. Please refer to Note 12.4 for relevant credit risk information.

Inventories

The details are as follows:

	2025/12/31	2024/12/31
Raw Materials	$385,577	$561,493
Works-in-Progress	132,859	133,717
Finished Goods	974,388	1,149,119
Merchandise	150,737	159,576
Goods in Transit	33,000	25,264
Total	$1,676,561	$2,029,169

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For 2025 and 2024, the Group recognized inventory costs charged to cost of goods sold amounting to NTD 3,421,665 thousand and NTD 3,238,495 thousand, respectively, including inventory write-downs and obsolescence losses of NTD 45,816 thousand and NTD 2,361 thousand, respectively.

The above inventories were not provided as collateral.

Financial Assets at Fair Value Through Other Comprehensive Income

	2025/12/31	2024/12/31
Investments in Equity Instruments at Fair Value Through Other Comprehensive Income – non-current:
Cayman Engley Industrial Co., Ltd.	$39,832	$39,398
Chi Rui (Cayman) Holding Limited	35,984	37,439
Total	$75,816	$76,837

The Group did not provide financial assets at fair value through other comprehensive income as collateral.

The Group’s dividend income related to equity instruments at fair value through other comprehensive income for the years ended December 31, 2025 and 2024 were as follows:

	2025	2024
Related to investments held at the end of the reporting period	$2,352	$1,918
Related to investments disposed during the reporting period	-	-
Dividend Income recognized during the reporting period	$2,352	$1,918

The Company disposed of and derecognized certain equity instrument investments measured at fair value through other comprehensive income in consideration of its investment strategy. The related information for 2025 and 2024 is as follows:

	2025	2024
Fair value at the date of derecognition	$2,599	$-
Cumulative (loss) gain on disposal reclassified from other equity to retained earnings	(6,205)	-

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Investments Using the Equity Method

(1) The details of investments accounted for using the equity method by the Company are as follows:

Name of Investee	2025/12/31		2024/12/31
	Amount	Shareholding Ratio (%)	Amount	Shareholding Ratio (%)
Investment in associates:
HONLEY AUTO. PARTS CO., LTD.	$191,849	20.83%	$226,066	21.10%
Yangde Technology Co., Ltd (Note)	-	35.00%	-	35.00%
Total	$191,849		$226,066

Note: The Group's share of losses of Yangde Technology Co., Ltd. (hereinafter referred to as "Yangde"), and the Group's lack of intention to provide further support to Yangde, resulted in the recognition of investment losses, reducing the carrying amount of the investment in Yangde to zero. For 2025 and 2024 unrecognized investment losses amounted to NTD 781 thousand and NTD 110 thousand, respectively. As of 2025 and 2024, cumulative unrecognized investment losses amounted to NTD 891 thousand and NTD 110 thousand respectively.

(2) Investment in associates

Investments in associates are presented as "Investments Accounted for Using Equity Method" in the consolidated financial statements, with necessary valuation adjustments.

The Group's investments in HONLEY AUTO.PARTS CO., LTD. and Yangde Technology Co., Ltd. are not material to the Group. The summarized financial information of the Group's investments in associates, presented on an aggregated basis based on the Group's share, is as follows:

	2025	2024
Net loss from continuing operations for the period	$(34,729)	$(40,770)
Other Income in the Current Period (net of tax)	512	4,974
Total Comprehensive Income in the Current Period	$(34,217)	$(35,796)

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Property, plant and equipment

Property, Plant and Equipment For Self-use

2025/12/31	2024/12/31
$1,414,432	$1,488,653

(1) Property, Plant and Equipment For Self-use

	Land	Property and Buildings	Machine equipment	Transportation on Equipment	Office Equipment	Leasehold Improvements	Other Equipment	Unfinished Construction Work and Equipment to be Tested	Total
Costs:
2025/01/01	$473,133	$1,128,039	$1,585,595	$48,479	$27,727	$10,773	$236,302	$4,349	$3,514,397
Addition	19,963	19,138	30,193	1,581	1,845	118	9,431	12,048	94,317
Disposal	(59,911)	-	(73,951)	(4,197)	(834)	(454)	(4,713)	-	(144,060)
Transfer	-	6,186	6,476	426	-	-	13,213	(4,349)	21,952
Effect of Exchange Rates	2,027	733	582	(58)	51	(20)	272	613	4,200
2025/12/31	$435,212	$1,154,096	$1,548,895	$46,231	$28,789	$10,417	$254,505	$12,661	$3,490,806
Depreciation and Impairment:
2025/01/01	$-	$485,426	$1,309,831	$40,768	$23,627	$10,773	$155,319	$-	$2,025,744
Depreciation	-	38,133	50,773	1,750	1,267	1	11,736	-	103,660
Disposal	-	-	(44,185)	(4,197)	(834)	(454)	(4,663)	-	(54,333)
Effect of Exchange Rates	-	640	477	(39)	40	(26)	211	-	1,303
2025/12/31	$-	$524,199	$1,316,896	$38,282	$24,100	$10,294	$162,603	$-	$2,076,374
Costs:
January 1, 2024	$536,867	$881,968	$1,554,192	$48,363	$27,067	$10,706	$199,188	$215,922	$3,474,273
Addition	8,981	17,242	19,135	1,024	615	-	16,118	14,135	77,250
Disposal	(76,094)	(7,420)	(17,149)	(2,952)	(478)	-	(2,927)	(1,235)	(108,255)
Transfer	-	228,578	20,413	1,379	61	-	21,297	(224,579)	47,149
Effect of Exchange Rates	3,379	7,671	9,004	665	462	67	2,626	106	23,980
2024/12/31	$473,133	$1,128,039	$1,585,595	$48,479	$27,727	$10,773	$236,302	$4,349	$3,514,397
Depreciation and Impairment:
January 1, 2024	$-	$453,777	$1,266,078	$40,413	$22,400	$9,500	$145,618	$-	$1,937,786
Depreciation	-	33,633	52,815	1,970	1,299	1,214	10,320	-	101,251
Disposal	-	(7,420)	(15,184)	(2,126)	(478)	-	(2,910)	-	(28,118)
Effect of Exchange Rates	-	5,436	6,122	511	406	59	2,291	-	14,825
2024/12/31	$-	$485,426	$1,309,831	$40,768	$23,627	$10,773	$155,319	$-	$2,025,744
Net Carrying Amount:
2025/12/31	$435,212	$629,897	$231,999	$7,949	$4,689	$123	$91,902	$12,661	$1,414,432
2024/12/31	$473,133	$642,613	$275,764	$7,711	$4,100	$-	$80,983	$4,349	$1,488,653

(2) The major components of the Group's buildings primarily consist of main structures, civil engineering works, electrical and fire safety equipment, and renovation projects, which are depreciated according to their useful lives ranging from 5 to 50 years.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(3) Please refer to Note 8 for details of property, plant and equipment provided as collateral.

(4) The Group did not capitalize the interest accrued on the acquisition of property, plant and equipment during 2025 and 2024.

Short-term Borrowings

	Interest Rate Range (%)	2025/12/31	Interest Rate Range (%)	2024/12/31
Unsecured Bank Borrowings	1.725%-3.585%	$401,565	1.725%-4.448%	$326,502

As of December 31, 2025, and December 31, 2024, the Group had approximately NTD 2,802,529 thousand and NTD 3,162,222 thousand, respectively, in unused short-term borrowing facilities.

Other Payables

	2025/12/31	2024/12/31
Salary and Year-end Bonuses Payable	$139,419	$166,100
Processing Costs Payable	27,263	26,775
Consumables Payable	13,434	21,490
Packaging Costs Payable	11,933	12,701
Remuneration Payable to Employees	8,000	24,000
Other Expenses Payable – others	111,001	107,693
Total	$311,050	$358,759

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Long-term Borrowings

Details of long-term borrowings as of December 31, 2025, and December 31, 2024 are as follows:

Creditor	2025/12/31	Interest Rate (%)	Repayment Period and Method
Secured Loan from Land Bank of Taiwan	$140,000	1.4321%	From July 17, 2023, to July 15, 2033, repayable in 84 monthly installments beginning August 15, 2026, with interest payable monthly.
Unsecured Loan from E.SUN Bank	66,458	1.5750%	From March 4, 2024, to November 15, 2026, repayable in 24 monthly installments beginning December 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	38,042	1.3750%	From November 29, 2021, to November 15, 2026, repayable in 24 monthly installments beginning December 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	33,000	1.3750%	From January 19, 2022, to November 15, 2026, repayable in 24 monthly installments beginning December 15, 2024, with interest payable monthly.
Secured Loan from E.SUN Bank	28,750	2.0200%	From October 30, 2020, to October 30, 2030, repayable in 32 quarterly installments beginning January 30, 2023, with interest payable monthly.
Unsecured Loan from E.SUN Bank	16,667	1.3750%	From September 28, 2021, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Secured Loan from Land Bank of Taiwan	15,277	2.2300%	From August 12, 2014, to August 12, 2029, repayable in 144 monthly installments beginning September 30, 2017, with interest payable monthly.
Unsecured Loan from E.SUN Bank	7,412	1.5750%	From June 12, 2023, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	7,083	1.3750%	From March 31, 2022, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	6,744	1.5750%	From December 17, 2024, to May 15, 2026, repayable in 17 monthly installments beginning January 15, 2025, with interest payable monthly.
Unsecured Loan from E.SUN Bank	3,792	1.3750%	From May 28, 2021, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Subtotal	363,225
Less: Current Portion	(197,448)
Total	$165,777

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Creditor	2024/12/31	Interest Rate (%)	Repayment Period and Method
Secured Loan from Land Bank of Taiwan	$140,000	1.4321%	From July 17, 2023, to July 15, 2033, repayable in 84 monthly installments beginning August 15, 2026, with interest payable monthly.
Unsecured Loan from E.SUN Bank	138,958	1.5750%	From March 4, 2024, to November 15, 2026, repayable in 24 monthly installments beginning December 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	79,542	1.3750%	From November 29, 2021, to November 15, 2026, repayable in 24 monthly installments beginning December 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	69,000	1.3750%	From January 19, 2022, to November 15, 2026, repayable in 24 monthly installments beginning December 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	56,667	1.3750%	From September 28, 2021, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Secured Loan from E.SUN Bank	34,500	2.0200%	From October 30, 2020, to October 30, 2030, repayable in 32 quarterly installments beginning January 30, 2023, with interest payable monthly.
Unsecured Loan from E.SUN Bank	25,203	1.5750%	From June 12, 2023, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	24,083	1.3750%	From March 31, 2022, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Unsecured Loan from E.SUN Bank	22,930	1.5750%	From December 17, 2024, to May 15, 2026, repayable in 17 monthly installments beginning January 15, 2025, with interest payable monthly.
Secured Loan from Land Bank of Taiwan	19,443	2.2300%	From August 12, 2014, to August 12, 2029, repayable in 144 monthly installments beginning September 30, 2017, with interest payable monthly.
Unsecured Loan from E.SUN Bank	12,892	1.3750%	From May 28, 2021, to May 15, 2026, repayable in 24 monthly installments beginning June 15, 2024, with interest payable monthly.
Secured Loan from Land Bank of Taiwan	6,153	2.2300%	From December 22, 2010, to December 22, 2025: Repayment in 156 monthly installments beginning January 31, 2013, with interest payable monthly.
Secured Loan from Chang Hwa Bank	4,000	2.4300%	From October 7, 2010, to October 7, 2025: Repayment in 52 quarterly installments beginning January 31, 2013, with interest payable monthly.
Unsecured Loan from E.SUN Bank	1,800	2.0200%	From October 30, 2020, to October 30, 2025: Repayment in 20 quarterly installments beginning January 30, 2021, with interest payable monthly.
Subtotal	635,171
Less: Current Portion	(271,946)
Total	$363,225

The above bank borrowings are secured, for which land and buildings were prioritized as collateral. Please refer to Note 8 for details of the collateral.

Post-employment Benefit Plan

Defined Contribution Plans

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The Company has an employee retirement plan stipulated in accordance with the "Labor Pension Act," which is a defined contribution plan. According to the Act, the Company's monthly labor pension contribution rate shall not be less than 6% of employees' monthly salary. The Company makes a monthly contribution equivalent to 6% of the employees' monthly salary to the personal pension account with the Bureau of Labor Insurance.

Subsidiaries in mainland China, in accordance with local government laws and regulations, make a monthly contribution to the pension insurance fund at a certain percentage of the total employee salary to each employee's account managed by the relevant government departments.

The Group's other overseas subsidiaries make a monthly contribution to relevant pension management entities in accordance with local laws and regulations.

The Company recognized expenses for defined contribution plans amounting to NTD 21,970 thousand and NTD 20,800 thousand for the fiscal years 2025 and 2024, respectively.

The Company settled the defined benefit plan in 2018, so the Company has no employees who are eligible for the pension scheme under the defined benefit plan, so no sensitivity analysis of actuarial assumptions and major actuarial assumptions was performed.

12. Equity

(1) Ordinary Shares

As of December 31, 2025 and 2024, the Group's authorized share capital was NTD 2,000,000 thousand, with a par value of NTD 10 per share. The number of shares issued was 155,654,890, and the paid-in capital was NTD 1,556,549 thousand. Each share carries one voting right and the right to receive dividends.

(2) Capital Surplus

	2025/12/31	2024/12/31
Premium for Conversion of Convertible Corporate Bonds	$17,074	$17,074
Employee Stock Option	9,836	9,836
Combined Premium	352	352
Others	19	19
Total	$27,281	$27,281

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As per the law, paid-in capital shall not be used for any purpose except to cover the Company’s losses. When the Company has no losses, a certain percentage of the paid-in capital from the stock premium and gifts may be applied annually to replenish the capital. The aforementioned paid-in capital can be allocated in cash to shareholders in proportion to their shareholdings.

(3) Earnings Distribution and Dividend Policy

As per the Articles of Incorporation, where the Company makes a profit for a fiscal year, it shall distribute the earnings in the order specified below:

A. Paying taxes;
B. Offsetting a cumulative deficit;
C. Setting aside 10% of the remaining balance as a legal reserve;
D. Setting aside an amount for or reversing a special reserve in accordance with laws and regulations or the competent authority’s instructions;
E. Any remaining profit, together with any undistributed retained earnings, adopted by the Board of Directors as the basis for making a distribution proposal, which shall then be reported to the shareholders’ meeting.

The Group operates in the electronic components industry and strives to be in line with the overall environment and the characteristics of the industry. The Company achieves its sustainability, pursues long-term interests of shareholders, stabilizes business performance targets, while taking into account the budget for future capital expenditures and the status of capital needs. The Company’s dividend policy is to appropriate at least 10% of its earnings, less legal reserve and special reserve, as shareholder bonus, with cash dividends accounting for at least 10% of the total dividends paid to shareholders. However, if the year’s net income after tax does not reach 15% of the paid-in capital, the earnings may not be distributed. If the Company has no earnings available for the year, the cumulative undistributed earnings from the prior year may be distributed. When the shareholder bonus, legal reserve, or capital surplus mentioned above is paid in cash, the Board of Directors is authorized to act upon approval by two-thirds of the directors at a meeting attended by more than half of the directors, and the decision shall be reported to the shareholders’ meeting.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As per the Company Act, the Company shall set aside a legal reserve unless its total amount has reached the amount of the total paid-in capital. The legal reserve may be used to offset a deficit. When the Company has no loss, the portion of the legal reserve that exceeds 25% of the paid-in capital may be used to distribute shares or cash to shareholders in proportion to their shareholdings.

When distributing the distributable earnings, the Company retroactively sets aside a special reserve for the difference between the balance of the special reserve and the net deduction of other equity items as per law when the IFRS is adopted for the first time. If there is a subsequent reversal of the net deduction of other equity, the special reserve may be reversed for the portion of the net deduction of other equity reversed to distribute earnings.

In accordance with the Letter Jin-Guan-Zheng- Fa No. 1090150022 issued by the FSC dated March 31, 2021, a special reserve shall be set aside for the unrealized revaluation gains and cumulative translation adjustment (gains), which were reclassified to retained earnings on the conversion date due to the adoption of exemptions under IFRS 1 “First-time Adoption of International Financial Reporting Standards” when IFRS was first adopted. When the Group uses, disposes of, or reclassifies the relevant assets later, it may reverse the portion of the special reserve in the same percentage to distribute earnings.

During the years ended December 31, 2025 and 2024, there was no need to reverse the special reserve due to the use, disposal of, or reclassification of relevant assets.

The Company’s Board of Directors and general shareholders’ meetings on March 12, 2026 and June 10, 2025, respectively, proposed and approved the appropriation and distribution of earnings and dividends per share for 2025 and 2024, as set forth below:

	Earnings Appropriation and Distribution Proposal		Dividends per Share (NTD)
	2025	2024	2025	2024
Legal Reserve Appropriation (reversal) of special reserve	$14,757	$60,462
Cash Dividends on Ordinary Shares (Note)	563	(20,637)	NTD 1.00	NTD 2.00
	155,655	311,310	per share	per share

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Note: The Company’s Board of Directors, authorized by the Articles of Incorporation, passed a special resolution on March 12, 2026, approving the cash dividend distribution for common shares for fiscal year 2025.

Please refer to Note 6.16 for the relevant information on the estimation basis and recognized amounts of employee remuneration and directors’ remuneration.

(4) Non-controlling Interests

	2025	2024
Opening Balance	$64,258	$50,488
Cash capital increase in subsidiaries	1,546	1,754
Net Income Attributable to Non-controlling Interests for This Period	15,767	8,362
Other Comprehensive Income Attributable to Non-controlling Interests:
Exchange differences arising from the translation of the financial statements of foreign operations	3,302	3,654
Ending Balance	$84,873	$64,258

Operating income

	2025	2024
Revenue From Customer Contracts
Revenue From Product Sales	$4,393,972	$4,542,010
Revenue From Provision of Services	2,133	2,949
Total	$4,396,105	$4,544,959

The Group’s revenue information from contracts with customers for the periods from January 1 to December 31, 2025, and 2024, is as follows:

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Breakdown of Revenue

For the year ended December 31, 2025

	Segments in Taiwan	Segments in Suzhou	Other Segments	Total
Product Sales	$2,169,317	$1,953,837	$270,818	$4,393,972
Provision of Services	1,174	959		2,133
Total	$2,170,491	$1,954,796	$270,818	$4,396,105

For the year ended December 31, 2024

	Segments in Taiwan	Segments in Suzhou	Other Segments	Total
Product Sales	$2,536,124	$1,796,387	$209,499	$4,542,010
Provision of Services	2,672	277		2,949
Total	$2,538,796	$1,796,664	$209,499	$4,544,959

The revenue from the Group's customer contracts is recognized at a certain point in time.

(2) Contract Balance

Contract Liabilities – current

	2025/12/31	2024/12/31	2024/01/01
Product Sales	$16,512	$11,020	$12,541

The major changes in the balances of the Group's contract liabilities for 2025 and 2024 are specified below:

	2025	2024
Opening Balance Transferred to Revenue in This Period	$(11,020)	$(12,541)
Increase in Advance Receipts for This Period (those for this period were deducted and transferred to revenue)	16,464	10,707
Effect of Exchange Rate Movements	48	313
Movements During This Period	$5,492	$(1,521)

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(3) Transaction Prices Apportioned to the Outstanding Performance Obligations

None.

(4) Assets Recognized From the Cost of Obtaining or Fulfilling a Customer Contract

None.

Expected Credit Impairment Loss

	2025	2024
Operating Expenses – Gain (Loss) On Reversal of Expected Credit Impairment
Accounts Receivable	$156	$(454)

For information related to credit risk, please refer to Note 12.4.

The Group’s receivables (including notes receivable and accounts receivable) are measured for loss allowance based on lifetime expected credit losses. The relevant information for the assessment of loss allowances as of December 31, 2025 and 2024 is as follows:

Receivables are classified into Group 1 and Group 2 based on factors such as counterparty credit rating, geographic region, and industry. Group 1 applies a provision matrix to measure loss allowances, while Group 2 recognizes credit impairment losses based on an individual customer assessment approach. Relevant information is as follows:

As of December 31, 2025

Group 1	Not Past Due (Note 1)	Number of Days Past Due				Total
		1–90 days	91–180 days	181–365 days	365 days or more
Total Carrying Amount	$400,883	$21,173	$83	$264	$1,708	$424,111
Loss Ratio	-	-	-	40-50%	100%
Lifetime Expected Credit Loss	-	-	-	(108)	(1,708)	(1,816)
Carrying Amount	$400,883	$21,173	$83	$156	$-	$422,295

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Group 2	Not Past Due (Note 1)	Number of Days Past Due				Total
		1–90 days	91–180 days	181–365 days	365 days or more
Total Carrying Amount	$610,939	$12,329	$4,530	$3,267	$568	$631,633
Loss Ratio	-	-	-	50-60%	100%
Lifetime Expected Credit Loss	-	-	-	(1,851)	(568)	(2,419)
Carrying Amount	$610,939	$12,329	$4,530	$1,416	$-	$629,214
As of December 31, 2024
Group 1	Not Past Due (Note 1)	Number of Days Past Due				Total
		1–90 days	91–180 days	181–365 days	365 days or more
Total Carrying Amount	$400,025	$32,326	$14	$170	$3,926	$436,461
Loss Ratio	-	0-1%	100%	100%	100%
Lifetime Expected Credit Loss	-	(116)	(14)	(170)	(3,926)	(4,226)
Carrying Amount	$400,025	$32,210	$-	$-	$-	$432,235
Group 2	Not Past Due (Note 1)	Number of Days Past Due				Total
		1–90 days	91–180 days	181–365 days	365 days or more
Total Carrying Amount	$593,109	$18,721	$2,175	$534	$1,626	$616,165
Loss Ratio	-	-	10-20%	100%	100%
Lifetime Expected Credit Loss	-	-	(247)	(534)	(1,626)	(2,407)
Carrying Amount	$593,109	$18,721	$1,928	$-	$-	$613,758

Note 1: None of the Group’s notes receivable were overdue.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The movements in the loss allowance for the Group’s notes receivable and accounts receivable for 2025 and 2024 are as follows:

	Notes Receivable	Accounts Receivable
2025/1/1	$-	$6,633
Decrease During the Period	-	(156)
Write-off Due to the Inability to Recover	-	(2,254)
Effect of Exchange Rates	-	12
2025/12/31	$-	$4,235
January 1, 2024	$-	$6,520
Increase in the Current Period	-	454
Write-off Due to the Inability to Recover	-	(421)
Effect of Exchange Rates	-	80
2024/12/31	$-	$6,633

15. Leasing

The Group as Lessee

The Group has leased a number of different assets, including property (land and buildings) and transportation equipment. The lease terms for each contract ranges from two to 50 years.

The impact of leasing on the Group’s financial position, financial performance, and cash flows is specified below:

A. Amounts Recognized in the Balance Sheet

(a) Right-of-use Assets

Carrying Amount of Right-of-use Assets

	2025/12/31	2024/12/31
Property and Buildings	$10,528	$4,567
Land	7,606	7,830
Transportation Equipment	3,743	85
Total	$21,877	$12,482

For 2025 and 2024, the Group recognized additions to right-of-use assets of NTD 16,214 thousand and NTD 4,519 thousand, respectively.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(b) Lease Liabilities

	2025/12/31	2024/12/31
Lease Liabilities
Current	$6,255	$1,525
Non-current	8,026	2,700
Total	$14,281	$4,225

For information on interest expenses related to lease liabilities for the Group's fiscal years 2025 and 2024, please refer to Note 6.17(3) Financial Costs; for the maturity analysis of lease liabilities, please refer to Note 12.5 Liquidity Risk Management.

B. Amounts recognized in the statement of comprehensive income.

Depreciation of Right-of-use Assets

	2025	2024
Property and Buildings	$4,628	$4,752
Transportation Equipment	1,607	1,413
Land	253	260
Total	$6,488	$6,425

C. Lessee's Income and Expenses Related to Leasing Activities

	2025	2024
Expenses of Short-term Leases	$8,886	$7,017

D. Lessee's Cash Outflows From Leasing Activities

For 2025 and 2024, the Group's total cash outflows for leases amounted to NTD 15,011 thousand and NTD 13,023 thousand, respectively.

E. Other Information Related to Leasing Activities

(a) Variable Lease Payments
None.

(b) Option for Lease Extension and Option for Lease Termination
None.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Statement of Employee Benefits, Depreciation, Depletion, and Amortization Expenses by Function is as follows:

| By Function
By Nature | 2025 | | | 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Operating Costs | Operating Expenses | Total | Operating Costs | Operating Expenses | Total |
| Employee Benefit Expenses | | | | | | |
| Salary and Wages | $344,761 | $312,788 | $657,549 | $381,527 | $269,411 | $650,938 |
| Labor and Health Insurance Costs | 46,699 | 30,395 | 77,094 | 42,415 | 26,230 | 68,645 |
| Pension Costs | 12,718 | 9,252 | 21,970 | 12,429 | 8,371 | 20,800 |
| Other Employee Benefit Expenses | 31,328 | 17,314 | 48,642 | 32,032 | 16,020 | 48,052 |
| Depreciation Expenses | 84,125 | 29,849 | 113,974 | 84,133 | 27,349 | 111,482 |
| Amortization Expenses | 2,295 | 1,710 | 4,005 | 1,962 | 1,941 | 3,903 |

According to the Company's Articles of Incorporation, if the Company reports a profit for the year, it shall allocate no less than three percent as employee compensation and no more than three percent as directors' compensation. Of the employee compensation, no less than fifty percent of the total amount shall be allocated to entry-level employees. However, if the Company has accumulated losses, an amount shall first be reserved to offset such losses. The above employees' remuneration may be distributed in stock or cash, which shall be approved by half of all directors present at a Board Meeting attended by more than two-thirds of all directors and then reported to the shareholders' meeting. Please visit the Market Observation Post System (MOPS) for information on employee remuneration and directors' remuneration approved by the Board of Directors.

Based on profitability conditions for fiscal year 2025, the Company estimated employee compensation and directors' remuneration at $3.99\%$ and $2.74\%$ , respectively. The amounts of employee compensation and directors' remuneration for fiscal year 2024 were NTD 8,000 thousand and NTD 5,500 thousand, respectively, recorded under salary expenses and other expenses. On March 12, 2025, the Company's Board of Directors resolved to distribute employee compensation and directors' remuneration in cash, amounting to NTD 8,000 thousand and NTD 5,500 thousand, respectively.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

For fiscal year 2024, the Company’s actual distribution of employee compensation and directors’ remuneration amounted to NTD 24,000 thousand and NTD 9,500 thousand, respectively, which did not differ from the amounts recorded as expenses in the 2024 financial statements.

17. Non-operating Revenue and Expenses

(1) Other Income

	2025	2024
Interest Income
Financial Assets at Amortized Cost	$36,005	$59,287
Rent Income	6,071	6,027
Dividend Income	2,352	1,977
Other Income – Others	16,769	23,997
Total	$61,197	$91,288

(2) Other Gains and Losses

	2025	2024
Gain on Disposal of Investments	$27,819	$7,726
Gain on financial assets at fair value through profit or loss	12,438	5,802
Losses (gains) on Disposal of Property, Plant and Equipment	(8,947)	64,380
Net Foreign Exchange (Loss) Gain	(16,389)	105,699
Others	(48,922)	(10,049)
Total	$(34,001)	$173,558

(3) Financial Costs

	2025	2024
Interest on Bank Borrowings	$13,774	$16,899
Interest on Lease Liabilities	284	67
Total	$14,058	$16,966

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Components of Other Comprehensive Income

(1) The components of 2025 other comprehensive income are as follows:

	Generated During This Period	Other Comprehensive Income (loss)	Income tax benefit	After-tax Amount
Items that will not be reclassified subsequently to profit or loss:
Unrealized Gain (loss) From Investments in Equity Instruments Measured at Fair Value Through Other Comprehensive Income	$1,578	$1,578	$291	$1,869
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the financial statements of foreign operations	(8,134)	(8,134)	2,287	(5,847)
Share of other comprehensive income of associates and joint ventures accounted for using equity method	512	512	-	512
Total	$(6,044)	$(6,044)	$2,578	$(3,466)

(2) The components of 2024 other comprehensive income are as follows:

	Generated During This Period	Other Comprehensive Income (loss)	Income Tax Expenses	After-tax Amount
Items that will not be reclassified subsequently to profit or loss:
Unrealized Gain (loss) From Investments in Equity Instruments Measured at Fair Value Through Other Comprehensive Income	$(28,035)	$(28,035)	$(44)	$(28,079)
Items that may be reclassified subsequently to profit or loss:
Exchange differences arising from the translation of the financial statements of foreign operations	58,332	58,332	(10,936)	47,396
Share of other comprehensive income of associates and joint ventures accounted for using equity method	4,974	4,974	-	4,974
Total	$35,271	$35,271	$(10,980)	$24,291

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

19. Income Tax

The main components of income tax expense for fiscal years 2025 and 2024 are as follows:

(1) Income Tax Recognized in Profit or Loss

	2025	2024
Current Income Tax Expenses:
Income Tax Payable For the Current Period	$92,801	$297,455
Income Taxes For prior Years Adjusted Into This Year	(19,036)	(5,549)
Deferred Tax Expenses:
Deferred Income Tax Expense (Benefit) Related to the Origination and Reversal of Temporary Differences	25,208	(53,670)
Income Tax Expenses	$98,973	$238,236

(2) Income Tax Recognized in Other Comprehensive Income

	2025	2024
Deferred income tax benefit (expense):
Unrealized Gain (loss) From Investments in Equity Instruments Measured at Fair Value Through Other Comprehensive Income	$291	$(44)
Exchange Gains or Losses Arising from the Translation of the Financial Statements of Foreign Operations	2,287	(10,936)
Income Tax Related to Components of Other Comprehensive Income	$2,578	$(10,980)

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(3) The amount of income tax expense and accounting profit multiplied by the applicable income tax rate is adjusted as follows:

	2025	2024
Net Income Before Tax of the Continuing Operations	$268,513	$851,220
Amounts of Taxes Calculated at Relevant Countries' Domestic Tax Rates Applicable to Income	$106,840	$272,722
Surtax on Undistributed Earnings	12,674	11,716
Income tax effect of tax-exempt (income) expenses	(1,505)	6,530
Income Taxes for Prior Years Adjusted Into This Period	(19,036)	(5,549)
Other Adjustments to Income Tax in accordance with Income Tax Act	-	(47,183)
Total Income Tax Expense Recognized in Profit or Loss	$98,973	$238,236

(4) Balances of deferred tax assets (liabilities) related to the following items:

A. 2025

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Ending Balance
Temporary Difference
Unrealized foreign exchange gains and losses	$(4,368)	$2,480	$-	$(1,888)
Valuation of Financial Assets at Fair Value Through Profit or Loss	1,062	(354)	-	708
Allowance for Inventory Write-downs	6,821	7,479	-	14,300
Investments Using the Equity Method	(185,865)	(33,603)	-	(219,468)
Exchange Differences Arising from the Translation of the Financial Statements of Foreign Subsidiaries	(7,217)	-	2,287	(4,930)
Valuation of Financial Assets at Fair Value Through Other Comprehensive Income	1,392	-	291	1,683
Long-term Investment Income or Loss Impairment	226	-	-	226
Recognized Using the Equity Method
Unrealized Sales Gross Profit	115	40	-	155
Unrealized Transactions Between Entities Within the Group	7,149	(1,250)	-	5,899
Deferred Tax Benefit (expense)		$(25,208)	$2,578
Net Deferred Tax Assets (liabilities)	$(180,685)			$(203,315)
The information presented in the balance sheet is as follows:
Deferred Tax Assets	$16,765			$22,971
Deferred Tax Liabilities	$(197,450)			$(226,286)

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

B. 2024

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Ending Balance
Temporary Difference
Unrealized foreign exchange gains and losses	$1,026	$(5,394)	$-	$(4,368)
Valuation of Financial Assets at Fair Value	1,200	(138)	-	1,062
Through Profit or Loss
Allowance for Inventory Write-downs	6,782	39	-	6,821
Investments Using the Equity Method	(243,903)	58,038	-	(185,865)
Exchange Differences Arising from the Translation of the Financial Statements of Foreign Subsidiaries	3,719	-	(10,936)	(7,217)
Valuation of Financial Assets at Fair Value Through Other Comprehensive Income	1,436	-	(44)	1,392
Long-term Investment Income or Loss Impairment	226	-	-	226
Recognized Using the Equity Method
Unrealized Sales Gross Profit	59	56	-	115
Unrealized Transactions Between Entities Within the Group	6,080	1,069	-	7,149
Deferred tax benefit		$53,670	$(10,980)
Net Deferred Tax Assets (liabilities)	$(223,375)			$(180,685)
The information presented in the balance sheet is as follows:
Deferred Tax Assets	$16,809			$16,765
Deferred Tax Liabilities	$(240,184)			$(197,450)

(5) Unrecognized Deferred Tax Assets N/A.

(6) Unrecognized Deferred Tax Liabilities Related to Investments in Subsidiaries N/A.

(7) Income Tax Return Filings and Approval

As of December 31, 2025, the income tax filing and assessment status of the Group and its subsidiaries are as follows:

	Income Tax Return Filings and Approval
K.S. TERMINALS INC.	Tax returns assessed up to 2023
CHIEN HO HSING TECHNOLOGY (SUZHOU) CO., LTD	Tax returns filed up to 2024

As of December 31, 2025, all of the Company's foreign subsidiaries, which are subject to overseas tax jurisdictions, have filed income tax returns up to 2024.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Earnings per Share

The basic earnings per share is calculated with the net income attributable to the holders of the ordinary shares of the parent company divided by the weighted average number of ordinary share outstanding in the current period.

The diluted earnings per share is calculated by dividing the net income attributable to the holders of the ordinary shares of the parent company by the weighted average number of ordinary shares outstanding in the current period plus the weighted average number of ordinary shares to be issued if all dilutive potential ordinary shares were converted into ordinary shares.

	2025	2024
(1) Basic Earnings per Share
Net Income Attributable to the Holders of Common Stock of the Parent Company (NTD thousand)	$153,773	$604,622
Weighted Average Number of Ordinary Shares (in thousand shares) for the Earnings per Share	155,655	155,655
Basic Earnings per Share (NTD)	$0.99	$3.88
(2) Diluted Earnings per Share
Net Income Attributable to the Holders of Common Stock of the Parent Company (NTD thousand)	$153,773	$604,622
Weighted Average Number of Ordinary Shares (in thousand shares) for the Earnings per Share	155,655	155,655
Dilution Effect:
Employee Remuneration – Stock (in thousand shares)	234	376
Weighted Average Number of Ordinary Shares (in thousand shares) With the Dilution Effect	155,889	156,031
Adjusted
Diluted Earnings per Share (NTD)	$0.99	$3.88

There were no other transactions performed that caused significant changes to the outstanding ordinary shares or potential ordinary shares after the reporting period and before the release of the financial statements.

VII. Related Party Transactions

The related parties with transactions with the Group during the financial reporting period are as follows:

Name of Related Party and Relationship With the Group

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name	Relationship With the Group
Eleven people including Cheng Yu-Liang	The management personnel at the director or the Vice President level or above in the Group

Material Transactions With Related Parties

Lease – Related Party

Right-of-use Assets
	2025/12/31	2024/12/31
The Group’s Key Management Personnel	$6,684	$-
Lease Liabilities
	2025/12/31	2024/12/31
The Group’s Key Management Personnel	$6,748	$-

Remuneration of the Group’s Key Management Personnel

	2025	2024
Short-term Employee Benefits	$28,296	$37,366
Post-employment Benefits	2,052	1,677
Total	$30,348	$39,043

VIII. Assets Pledged

The Group has the following assets pledged as collateral:

Item	Carrying Amount		Details of Collateral for Debts
	2025/12/31	2024/12/31
Property, Plant and Equipment – Land and Buildings	$382,394	$394,192	Long-term Borrowings
Property, plant and equipment – machinery and equipment	1,890	2,160	Long-term Borrowings
Total	$384,284	$396,352

IX. Material Contingent Liabilities and Unrecognized Contractual Commitments

None.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

X. Major Disaster Loss

None.

XI. Material Events After the Balance Sheet Date

None.

XII. Others

Types of Financial Instruments

Financial Assets	2025/12/31	2024/12/31
Financial Assets at Fair Value Through Profit or Loss:
Mandatorily as at Fair Value Through Profit or Loss	$872,773	$523,421
Financial Assets at Fair Value Through Other Comprehensive Income	75,816	76,837
Financial Assets at Amortized Cost:
Cash and Cash Equivalents (excluding cash on hand)	2,393,172	2,872,684
Financial Assets at Amortized Cost	156,868	32,740
Notes Receivable and Accounts Receivable	1,051,509	1,045,993
Other Receivables	74,623	32,646
Refundable deposits (recorded under other non-current assets)	6,554	12,181
Total	$4,631,315	$4,596,502
Financial Liability	2025/12/31	2024/12/31
Financial Liabilities at Amortized Cost:
Short-term Borrowings	$401,565	$326,502
Notes Payable and Accounts Payable	178,432	228,849
Other Payables	311,050	358,759
Long-term Borrowings (including due within one year)	363,225	635,171
Lease Liabilities	14,281	4,225
Guarantee deposits received (recorded under other non-current liabilities)	1,130	1,116
Total	$1,269,683	$1,554,622

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Financial Risk Management Objectives and Policies

The Group’s financial risk management objectives are mainly to manage market, credit, and liquidity risks related to operating activities. The Group identifies, measures, and manages the above risks as per the Group’s policies and risk preferences.

The Group has established appropriate policies, procedures, and internal control system in accordance with applicable regulations on the above financial risk management; important financial activities should be reviewed by the Board of Directors in accordance with applicable regulations and the internal control system. During the implementation of the financial management activities, the Group should comply with the applicable regulations on financial risk management.

Market Risk

The Group’s market risk is the risk that the fair value or future cash flows of financial instruments will fluctuate due to changes in market prices. Market risk primarily includes foreign exchange risk, interest rate risk, and other price risks (such as equity instruments).

In practice, one movement by a single change in risk variables is rare, and changes in risk variables are always interrelated; however, the sensitivity analysis of the following risks did not consider the interaction between relevant risks and variables.

Exchange Rate Risk

The Group’s exchange rate risk is mainly related to operating activities (when a currency used for income or expenses is different from the Group’s functional currency) and net investment in foreign operations.

The Group’s foreign-currency receivables and payables are partially denominated in the same currency. Thus, there is a natural hedging effect for part of the foreign-currency position. The exchange rate risk of certain foreign-currency payments is managed through forward exchange agreements. The natural hedging effect described above and the management of exchange rate risk through forward exchange agreements do not meet the requirements for hedging accounting; therefore, hedging accounting has not been adopted. Additionally, the net investment in foreign operations is considered a strategic investment, so the Group has not applied a hedging approach to it.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

The sensitivity analysis of the Group's exchange rate risk is mainly focused on the main foreign-currency monetary items on the end date of the financial reporting period. The Group's exchange rate risk is mainly affected by fluctuations in the exchange rates of CNY and USD. The sensitivity analysis information is as follows:

(1) When the NTD appreciates by 1% against the USD, the impact on the Group's equity and profit or loss is as follows:

	Increase (decrease) in Equity	Gain (loss)
2025	$-	$(3,723)
2024	$-	$(7,613)

(2) When the NTD appreciates by 1% against the CNY, the impact on the Group's equity and profit or loss is as follows:

	Increase (decrease) in Equity	Gain (loss)
2025	$-	$(9,172)
2024	$-	$(6,756)

Interest Rate Risk

Interest rate risk refers to the risk of fluctuations in the fair value of financial instruments or future cash flows due to the movements in market interest rates. The Group's interest rate fluctuation risk is mainly from borrowings at floating and fixed rates.

The Group's sensitivity analysis for interest rate risk primarily focuses on floating interest rates on borrowings at the end of the reporting period, assuming such positions are held for one fiscal year. A 0.1% increase/decrease in market interest rates would result in a decrease/increase in the Group's profit or loss of NTD 765 thousand and NTD 962 thousand for 2025 and 2024, respectively.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Equity Price Risk

The Group holds equity securities of listed and unlisted companies, the fair values of which are subject to uncertainty regarding the future value of the underlying investments. The Group holds equity securities of listed and unlisted companies, which are classified as financial assets at fair value through other comprehensive income. The Group manages the price risk of equity securities by diversifying investments and setting limits for investments in single and overall equity securities. The information on the investment portfolio of equity securities should be regularly provided to the Group’s senior management, and the Board of Directors should review and approve all decisions about investments in equity securities.

For listed equity securities classified as at fair value through profit or loss, a 1% increase/decrease in the prices of such securities would result in an increase/decrease in the Group’s profit or loss of NTD 1,631 thousand and NTD 19 thousand for the periods from January 1 to December 31, 2025 and 2024, respectively.

For listed equity securities included in equity instrument investments classified as at fair value through other comprehensive income, a 1% increase/decrease in the prices of such securities would result in an increase/decrease in the Group’s equity of NTD 398 thousand and NTD 394 thousand for the periods from January 1 to December 31, 2025 and 2024, respectively.

The fair values of other equity instruments or derivatives linked to equity instruments belong to Level 3. Please refer to Note 12.9 for the sensitivity analysis information.

4. Credit Risk Management

Credit risk refers to the risk of financial loss arising from default by counterparties on contract obligations. The Group’s credit risk is derived from its operating activities (mainly from accounts and notes receivables) and financial activities (mainly from bank deposits and various financial instruments).

The Group’s units manage credit risk by following the credit risk policies, procedures, and controls. Credit risk assessment for all counterparties comprehensively considers factors such as the counterparty’s financial condition, ratings from credit agencies, historical transaction experience, the current economic environment, and the Group’s internal rating standards. The Group also uses certain credit enhancement tools (such as advance payments and insurance) at appropriate times to reduce the credit risk of specific counterparties.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2025 and 2024, receivables from the Group’s top ten customers accounted for 27.82% and 29.46% of the Group’s total receivables, respectively. There was no concentration of credit risk.

The Group’s finance department manages the credit risk of bank deposits, fixed-income securities, and other financial instruments in accordance with the Group’s policies. The Group’s counterparties are determined by internal control procedures, such as banks with good credit, financial institutions with investment-grade ratings, corporate organizations, and government agencies, and there is no major concern about their contract performance, hence there is no significant credit risk.

Liquidity Risk Management

The Group maintains financial flexibility through cash and cash equivalents, highly liquid securities, bank borrowings, convertible corporate bonds, and financing or leasing contracts. The table below summarizes the maturity of the payments contained in the contracts of the Group’s financial liabilities. It is compiled based on the earliest possible repayment date and the undiscounted cash flows. The amounts listed also include the agreed interest. For the interest cash flow paid at floating interest rates, the undiscounted amount of interest is derived from the yield curve at the end of the reporting period.

Non-derivative Financial Instruments

	Less than 1 year	2–3 years	4–5 years	5 years or more	Total
2025/12/31
Short-term Borrowings	$402,049	$-	$-	$-	$402,049
Payables	178,432	-	-	-	178,432
Long-term Bank Borrowings	201,411	131,046	56,600	52,652	441,709
Lease Liabilities	6,488	6,692	1,440	-	14,620

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

	Less than 1 year	2–3 years	4–5 years	5 years or more	Total
2024/12/31
Short-term Borrowings	$327,020	$-	$-	$-	$327,020
Payables	228,849	-	-	-	228,849
Long-term Bank Borrowings	279,714	240,873	61,688	79,350	661,625
Lease Liabilities	1,572	2,746	-	-	4,318

Reconciliation of Liabilities From Financing Activities

Information on reconciliation of liabilities for the year ended December 31, 2025:

	Short-term Borrowings	Long-term Borrowings (including due within one year)	Lease Liabilities	Other Non-current Liabilities	Total Liabilities From Financing Activities
2025/01/01	$326,502	$635,171	$4,225	$1,116	$967,014
Cash Flow	75,000	(271,946)	(5,841)	-	(202,787)
Non-cash Changes	-	-	16,214	-	16,214
Exchange Rate Movements	63	-	(317)	14	(240)
2025/12/31	$401,565	$363,225	$14,281	$1,130	$780,201

Information on reconciliation of liabilities for the year ended December 31, 2024:

	Short-term Borrowings	Long-term Borrowings (including due within one year)	Lease Liabilities	Other Non-current Liabilities	Total Liabilities From Financing Activities
January 1, 2024	$401,408	$577,398	$6,731	$1,097	$986,634
Cash Flow	(75,000)	57,773	(5,939)	-	(23,166)
Non-cash Changes	-	-	3,433	-	3,433
Exchange Rate Movements	94	-	-	19	113
2024/12/31	$326,502	$635,171	$4,225	$1,116	$967,014

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Fair Values of Financial Instruments

(1) Valuation Techniques and Assumptions Used for Fair Value

Fair value is the price that can be received from a sale of an asset or paid to transfer a liability in an orderly transaction between market participants. The methods and assumptions adopted by the Group to measure or disclose the fair values of its financial assets and financial liabilities are as follows:

A. The carrying amounts and fair values of cash and cash equivalents, receivables, payables, and other current liabilities are reasonable approximations of their fair values, mainly due to the short durations of such instruments.

B. The fair values of financial assets and financial liabilities that are traded in an active market with standard terms and conditions are determined with reference to the quoted market prices (such as publicly listed stocks and bonds).

C. The fair values of equity instruments not traded in an active market (such as privately offered stocks by TWSE/TPEx listed companies, stocks of publicly listed companies without an active market, and privately offered company stocks) are estimated using a market approach. The fair values are estimated based on the prices of transactions involving the same or comparable companies' equity instruments in the market, as well as other relevant information (such as discount factors due to lack of liquidity, price-earnings ratios of similar companies' stocks, and price-to-book ratios of similar companies' stocks).

D. Regarding debt instrument investments without quoted prices in an active market, bank borrowings, and other non-current liabilities, the fair values are determined based on the counterparties' quotes or valuation techniques. The valuation techniques are based on discounted cash flow analysis; the assumptions about interest rates and discount rates are made with reference to on similar instruments (such as the Taipei Exchange's yield curves for reference, the average quotes of Reuters commercial paper interest rates, and credit risks).

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

E. As for derivative financial instruments without quoted prices in an active market, if they are non-option derivatives, their fair values are determined based on the counterparties' quotes or the yield curves that apply during the duration of the discounted cash flow analysis; if they are option derivatives, the fair values are determined based on counterparties' quotes, appropriate option pricing models (such as Black-Scholes) or other valuation approaches (such as Monte Carlo Simulation).

(2) Fair Values of Financial Instruments at Amortized Cost

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

(3) Information on the Financial Instrument Fair Value Hierarchy

Please refer to Note 12.9 for information on the Group's financial instrument fair value hierarchy.

Derivatives

As of December 31, 2025 and 2024, the Group did not hold any derivatives that did not qualify for hedge accounting and had not yet matured.

Fair Value Hierarchy

(1) Fair Value Hierarchy Definitions

All assets and liabilities measured or disclosed at fair value are the lowest level inputs, which are important to the overall fair value measurement, classified to the fair value levels to which they belong. The input at each level is as follows:

Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities on the measurement date.

Level 2: Inputs, other than quoted market prices within Level 1 that are observable, either directly or indirectly, for assets or liabilities.

Level 3: The unobservable input value of an asset or liability.

For assets and liabilities that are recognized in the financial statements on a repetitive basis, the classification is re-evaluated at the end of each reporting period to determine whether there is a transfer between the fair value levels.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(2) Information on Hierarchy of Fair Value Measurement

The Group does not have assets measured at fair value on a non-recurring basis. The information on the fair value levels of assets and liabilities on a recurring basis is shown below:

As of December 31, 2025:

	Level 1	Level 2	Level 3	Total
Assets at Fair Value:
Financial Assets at Fair Value Through Profit or Loss
Funds	$709,702	$-	$-	$709,702
Listed company shares	163,071	-	-	163,071
At Fair Value Through Other Comprehensive Income
Listed company shares	39,832	-	-	39,832
Unlisted company shares	-	-	35,984	35,984
As of December 31, 2024:
	Level 1	Level 2	Level 3	Total
Assets at Fair Value:
Financial Assets at Fair Value Through Profit or Loss
Funds	$521,528	$-	$-	$521,528
Listed company shares	1,893	-	-	1,893
At Fair Value Through Other Comprehensive Income
Listed company shares	39,398	-	-	39,398
Unlisted company shares	-	-	37,439	37,439

Transfer Between Level 1 and Level 2 Fair Values

The Group's assets and liabilities measured at fair value on a recurring basis during 2025 and 2024 were not transferred between Level 1 and Level 2.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Details of Movements in Level 3 Fair Values

If the Group’s assets and liabilities measured at fair value on a recurring basis that belong to Level 3 fair value, the reconciliation of the balances from the beginning of the period through the end of the period is listed as follows:

	Assets
	Financial Assets at Fair Value Through Other Comprehensive Income
	Stock
2025/01/01
Total Losses Recognized for 2025:	$37,439
Recognized in Other Comprehensive Income (recognized in unrealized gains/losses from investments in equity instruments at fair value through other comprehensive income)
	(1,455)
2025/12/31	$35,984
January 1, 2024	$37,220
Total Gains Recognized for 2024:
Recognized in Other Comprehensive Income (recognized in unrealized gains/losses from investments in equity instruments at fair value through other comprehensive income)
	219
2024/12/31	$37,439

Significant Unobservable Level 3 Fair Value Inputs

Regarding the Group’s assets at Level 3 fair value on a recurring basis, the significant unobservable inputs at fair value are as follows:

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

As of December 31, 2025:

	Valuation Techniques	Significant Unobservable Inputs	Quantitative Information	Relationship Between Input and Fair Value	Sensitivity Analysis of the Value Relationship Between Inputs and Fair Values
Financial Assets: At Fair Value Through Other Comprehensive Income
Stock (Chi Rui)	Asset Valuation Approach	Illiquidity valuation adjustment	30%	The higher the illiquidity, the lower the fair value estimate	When the percentage of illiquidity increases (decreases) by 1%, the Company’s equity would have decreased/increased by NTD 360 thousand.

As of December 31, 2024:

	Valuation Techniques	Significant Unobservable Inputs	Quantitative Information	Relationship Between Input and Fair Value	Sensitivity Analysis of the Value Relationship Between Inputs and Fair Values
Financial Assets: At Fair Value Through Other Comprehensive Income
Stock (Chi Rui)	Asset Valuation Approach	Illiquidity valuation adjustment	30%	The higher the illiquidity, the lower the fair value estimate	When the percentage of illiquidity increases (decreases) by 1%, the Group’s equity would have decreased/increased by NTD 374 thousand.

Evaluation Process for Level 3 Fair Value

The Group’s Finance Department is responsible for verifying fair value by using data from independent sources to align the valuation results more closely with the market. This includes confirming that the data sources are independent, reliable, consistent with other resources, and represent executable prices, while analyzing changes in the value of assets and liabilities that must be remeasured or revaluated in accordance with the Group’s accounting policies at each balance date to ensure that the valuation results are reasonable.

(3) There are no instances of items not measured at fair value but requiring fair value hierarchy disclosure.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Information on the foreign-currency financial assets and liabilities with significant impact is as follows:

The Group’s foreign-currency financial assets and liabilities with significant impact are as follows:

	2025/12/31			Unit: NTD thousand 2024/12/31
	Foreign Currency	Exchange Rate	(NTD)	Foreign Currency	Exchange Rate	(NTD)
Financial Assets
Monetary Items
USD	$12,195	31.375	$382,618	$23,993	32.740	$785,531
CNY	234,406	4.475	1,048,967	186,111	4.453	828,752
Financial Liability
Monetary Items
USD	$327	31.475	$10,292	$737	32.840	$24,203
CNY	29,141	4.521	131,746	34,040	4.499	153,146

Due to the wide variety of the Group’s functional currencies, it is not possible to disclose the information on the exchange gains or losses on monetary financial assets and financial liabilities in each significant foreign currency. The Group’s foreign exchange gains for 2025 and 2024 were NTD (16,389) thousand and NTD 105,699 thousand, respectively.

The above information is disclosed in the foreign-currency carrying amount (already converted to the functional currency).

Capital Management

The Group’s capital management aims to confirm and maintain appropriate credit ratings and suitable capital ratios to facilitate business operations and maximize shareholders’ equity. The Group manages and adjusts the capital structure based on the economic conditions and may maintain and adjust the capital structure by adjusting dividend payments, returning capital, or issuing new shares.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued) (Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

XIII. Additional Disclosures

The details of the Company’s and its subsidiaries’ major transactions, investees, and investees in China during 2025 are as follows:

Information on Material Transactions

(1) Funds lent to others: N/A.

(2) Endorsements/Guarantees Provided to Others:

No. (Note 1)	Name of Endorser/ Guarantor Company	Name of Endorsed/Guaranteed Party		Limit on Endorsements/ Guarantees to a Single Enterprise (Note 3)	Highest Balance of Endorsements/ Guarantees During the Period	Ending Balance of Endorsements/ Guarantees	Actual Amount Drawn	Amount of Collateral Provided by the Company for Endorsements/ Guarantees	Ratio of Accumulated Endorsements/ Guarantees to Net Worth per Latest Financial Statements	Maximum Limit on Endorsements/ Guarantees (Note 3)	Endorsements/ Guarantees Provided by Parent Company to Subsidiaries	Endorsements/ Guarantees Provided by Subsidiaries to Parent Company	Endorsements/ Guarantees Provided to Mainland China Entities
		Company Name	Relationship (Note 2)
0	K.S. TERMINALS INC.	CHIEN HO HSING TECHNOLOGY (SUZHOU) CO., LTD	2	$1,296,849	$201,375 RMB 45,000 thousand	$201,375 RMB 45,000 thousand	$-	$-	3%	$3,242,123	Yes	No	Yes

Note 1: Explanation of the numbering column is as follows:
1. The Company is coded as "0."
2. Investees are numbered sequentially starting from "1" in Arabic numerals.

Note 2: The relationship between the endorser/guarantor and the endorsed/guaranteed party falls into one of the following seven categories (indicate the applicable category only):
1. A company with which there are business transactions.
2. A company in which the Company directly or indirectly holds more than 50% of the voting shares.
3. A company that directly or indirectly holds more than 50% of the voting shares of the Company.
4. A company in which the Company directly or indirectly holds 90% or more of the voting shares.
5. A company in the same industry or a joint constructor that provides mutual guarantees in accordance with contractual requirements for undertaking projects.
6. A company jointly invested in by all shareholders, for which endorsements/guarantees are provided by each shareholder in proportion to their shareholding.
7. A company in the same industry that provides joint performance guarantees for pre-sale housing contracts in accordance with consumer protection regulations.

Note 3: In accordance with the Company's "Regulations Governing Making of Endorsements/Guarantees," the total amount of external endorsements/guarantees shall not exceed 50% of the Company's net worth; the amount provided to any single enterprise shall not exceed 20% of the Company's net worth.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(3) Information on Significant Marketable Securities Held at the End of the Period:

Type of Marketable Securities	Name of Marketable Securities	Relationship Between the Securities Issuer and the Company	General Ledger Account	End of Period
				Unit	Carrying Amount	Percentage (%)	Fair Value
Beneficiary Certificates	Franklin Templeton Sinoam Money Market Fund	None	Financial Assets at Fair Value Through Profit or Loss – current	16,701,501.84	$180,985	-	$182,865
Beneficiary Certificates	FSITC Taiwan Money Market Fund	None	〃	6,324,601.80	101,046	-	102,514
Beneficiary Certificates	Hua Nan Kirin Money Market Fund	None	〃	8,100,047.50	101,268	-	102,350
Beneficiary Certificates	SinoPac TWD Money Market Fund	None	〃	6,911,007.50	100,861	-	101,769
Beneficiary Certificates	Cathay Taiwan Money Market Fund	None	〃	3,913,097.90	50,626	-	51,372
Beneficiary Certificates	Fubon Chi-Hsiang Money Market Fund	None	〃	3,059,526.10	50,000	-	50,725
Beneficiary Certificates	Fuh Hwa You Li Money Market Fund	None	〃	3,525,745.00	50,000	-	50,003
Beneficiary Certificates	Fuh Hwa Global Bond Fund	None	〃	2,681,675.60	41,563	-	40,069
Beneficiary Certificates	TSMC by Cathay United Bank	None	〃	10,043.07	30,173	-	28,035
Stock	Ruentex Development Co., Ltd.	None	〃	3,421,000.00	100,267	-	101,946
Stock	Taiwan Semiconductor Manufacturing Co., Ltd.	None	〃	37,000.00	54,083	-	57,350
Stock	Johnson Health Tech. Co., Ltd.	None	〃	25,000.00	3,769	-	3,775
				Subtotal	864,641		$872,773
				Add: Financial Asset Value Adjustment Plus: Allowance for Exchange Gains	6,732
				Total	1,400
					$872,773
Stock	Cayman Engley Industrial Co., Ltd.	None	Financial Assets at Fair Value Through Other Comprehensive Income	1,065,000	$130,225	0.88%	$39,832
Stock	Chi Rui (Cayman) Holding Limited	None	〃	2,336,345	44,402	5.29%	35,984
				Subtotal	174,627		$75,816
				Less: Financial Asset Value Adjustment	(98,811)
				Total	$75,816

(4) Total purchases from or sales to related parties amounting to at least NTD 100 million or 20% of paid-in capital: Please refer to Note 13.1.(6).

(5) Receivables from related parties reaching NTD 100 million or 20% of paid-in capital or more: Please refer to Note 13.1.(6).

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(6) The business relations between the parent company and its subsidiaries and among subsidiaries, and important intercompany transactions and amounts: The transactions below are intercompany transactions that should be eliminated and have been eliminated.

No. (Note 1)	Name of Trader	Counterparty	Relationship with transacting party (Note 2)	Transaction				Notes and Accounts Receivable (payable)
				Purchase (sales)	Amount	As a percentage of consolidated revenue or total assets (Note 3)	Transaction Terms	Balance	As a percentage of consolidated revenue or total assets (Note 3)
0	K.S. TERMINALS INC.	CHIEN HO HSING TECHNOLOGY (SUZHOU) CO., LTD	1	Sales	$342,835	7.80%	Same as Regular Transactions	Accounts Receivable $57,767	0.71%
0	K.S. TERMINALS INC.	CHIEN HO HSING TECHNOLOGY (SUZHOU) CO., LTD	1	Purchases	$13,480	0.31%	Same as Regular Transactions	Accounts Payable $3,077	0.04%

Note 1: "0" represents the parent company, and the remaining numbers represent subsidiaries.
Note 2: "1" represents parent-to-subsidiary transactions.
Note 3: For the calculation of the ratio of transaction amounts to consolidated total revenue or total assets, if the item is a balance sheet account, it is calculated based on the ending balance as a percentage of consolidated total assets; if the item is an income statement account, it is calculated based on the cumulative amount for the period as a percentage of consolidated total revenue.

Information on Investees

Investees' names, location, main business activities, initial investment amounts, shareholdings at the end of the period, current profit or loss, and investment income or loss recognized (excluding investees in mainland China):

Name of Investor	Name of Investor	Address	Main Business Activities	Initial Investment Amount (Note 1)		Held at End of Period			Net Profit (loss) of the Investee for the Period	Investment Income or Loss Recognized by the Company	Notes
				End of Current Period	End of previous period	Number of Shares (equity)	Percentage (%)	Carrying Amount
K.S. TERMINALS	K.S.T. INTERNATIONAL HOLDINGS LTD.	P.O.3340, Road Town, Tortola, British Virgin Islands	Financial Investment	$484,635	$484,635	14,540,500	100%	$1,685,434	$168,590	$167,634	Note 2
K.S. TERMINALS	JUNG PANG ENTERPRISE LTD.	P.O. BOX 3152, Road Town, Tortola, British Virgin Islands	Trade	347	347	10,000	100%	11,277	(157)	(157)
K.S. TERMINALS	K.S. Terminals USA LLC	2200 Jerrold Avenue, Unit P, San Francisco, California.	Trade	USD 3,300 thousand	USD 3,300 thousand	3,300,000	100%	27,082	(10,673)	(10,673)
K.S. TERMINALS	TAIBON HOLDING LIMITED	No.24,Lesperance, Providence Industrial Estate, MAHE Seychelles	Financial Investment	USD 160 thousand	USD 160 thousand	160,000	100%	90,927	16,341	16,341
K.S. TERMINALS	Ifchic Inc.	2200 Jerrold Avenue, Unit P, San Francisco, California.	Internet Retailing	USD 2,500 thousand	USD 2,500 thousand	2,500,000	100%	63,950	(3,066)	(3,066)
K.S. TERMINALS	K.S.TERMINALS TECHNOLOGY (THAILAND) CO.,LTD.	163 VILLAGE NO. 9, PRENG SUBDISTRICT, BANG BO DISTRICT, SAMUTPRAKAN PROVINCE 10560	Production, processing, and sales of terminal parts	THB 30,000 thousand	THB 10,000 thousand	3,000,000	100%	26,539	854	854

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Name of Investor	Name of Investee	Address	Main Business Activities	Initial Investment Amount (Note 1)		Held at End of Period			Net Profit (loss) of the Investee for the Period	Investment Income or Loss Recognized by the Company
				End of Current Period	End of previous period	Number of Shares (equity)	Percentage (%)	Carrying Amount
K.S. TERMINALS	KST TERMINALS (INDIA) PRIVATE LIMITED	Samrah Plaza, St Mark Rd, Shanthala Nagar Ashok Nag, Mahatma Gandhi Road, Bangalore, Bangalore North, Karnataka, India, 560001	Trade	INR 21,000 thousand	INR 10,500 thousand	2,100,000	70%	3,315	(4,116)	(2,881)
K.S. TERMINALS	KST TERMINALS (INDIA) MANUFACTURING PRIVATE LIMITED	Samrah Plaza, St Mark Rd, Shanthala Nagar Ashok Nag, Mahatma Gandhi Road, Bangalore, Bangalore North, Karnataka, India, 560001	Production, processing, and Sale of charging connector components	INR 251,776 thousand	-	25,177,590	100%	79,071	(1,280)	(1,280)
K.S. TERMINALS	Yangde Technology Co., Ltd.	No. 59, Ln.200,Zhuhe Rd., Changhua City, Changhua County 500041,Taiwan(R.O.C.)	Industrial Plastic Products Manufacturing	NTD 9,800 thousand	NTD 9,800 thousand	980,000	35%	-	(2,231)	-
K.S. TERMINALS	HONLEY AUTO PARTS CO., LTD.	No. 32, Jingjian Rd., Pingtung City, Pingtung County 900525, Taiwan (R.O.C.)	Automotive parts manufacturing industry	NTD 285,539 thousand	NTD 285,539 thousand	25,433,438	20.83%	191,849	(175,318)	(34,729)
K.S.T. INTERNATIONAL HOLDINGS LTD.	JIAN BANG (HONG KONG) HOLDING LTD.	SURSON COMM BLDG 140-142 AUSTIN RD TSIMSHATSUI	Financial Investment	HKD 103,776 thousand	HKD 93,610 thousand	103,766,000	100%	1,446,311	168,843	168,843
K.S.T. INTERNATIONAL HOLDINGS LTD.	K.S.Terminals (Asia) Co., Ltd.	Land No. 58, Survey Page 1384, Tasith Sub-district, Pluak Daeng District, Rayong Province, Thailand	Production, processing, and sales of terminal parts	THB 30 thousand	THB 30 thousand	2,950	100%	(140)	(161)	(161)
TAIBON HOLDING LIMITED	K.S.TERMINALS (THAILAND) CO.,LTD.	499/5 Moo 13, Soi Kingkeaw 25/1, Kingkeaw Rd., Tambol Rajadeva, Amphur Bangplee Samuthprakarn 10540 Thailand	Trade	THB 4,900 thousand	THB 4,900 thousand	490,000	49%	80,179	33,337	16,335
JIAN BANG (HONG KONG) HOLDING LTD	K.S.TERMINALS COMPANY LIMITED VIETNAM	511 Nguyen Oanh Street, Ward 17, Go Vap District, HCM City Vietnam	Trade	USD 2,000 thousand	USD 1,000 thousand	2,000,000	100%	48,009	2,126	2,126
JIAN BANG (HONG KONG) HOLDING LTD.	PT.KSTERMINALS TECHNOLOGY INDONESIA	Jl. Dr. Latumenten Raya No.19F RT.007 RW.008 Kel.Angke Kec.Tambora Kota Administrasi Jakarta Barat	Trade	USD 1,300 thousand	USD 1,000 thousand	1,300,000	100%	15,109	(2,815)	(2,815)

Note 1: The initial investment amount, equity held at the end of the period, and investment income or loss recognized are those recognized by the Company in proportion to its shareholdings.
Note 2: It includes the unrealized gains and losses from downstream transactions with related parties that were eliminated.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

Information on Investment in Mainland China

(1) (1) The Group’s investments in mainland China through K.S.T. INTERNATIONAL HOLDINGS LTD. And JIAN BANG (HONG KONG) HOLDING LTD. are as follows:

Name of Investee in mainland China	Main Business Activities	Paid-in Capital	Investment Method	Opening Balance of Cumulative Investment Remitted From Taiwan for this Period	The Investment Amount Remitted From Taiwan or Recovered During this Period		Ending Balance of Cumulative Investment Remitted From Taiwan for this Period (Note 5)	The Group’s Shareholdings in Direct or Indirect Investments	Investment Income or Loss on Investees	Investment Income or Loss Recognized for this Period (Note 2 and 3)	Carrying Amount or Investment at the End of this Period	Cumulative Investment Income Repatriated as of the End of this Period
					Outward	Inward
CHIEN HO HSING TECHNOLOGY (SUZHOU) CO., LTD	Production, processing, and sales of components of new instruments, such as instrument connectors, and precision electronic ceramics	$235,313 (USD 7.5 million)	Established a Company in a Third Region to Invest in a Company in China	$235,313 (USD 7.5 million)	$-	$-	$235,313 (USD 7.5 million)	100%	$171,899	$171,899	$1,366,830	$1,703,663 (USD 54.3 million)
Ending balance of cumulative outward remittances for investment in mainland China (Note 1)	Investment Amount Approved by the Investment Commission, MOEA (Note 1)	Limit on Investment Amount Stipulated by the Investment Commission, MOEA
---	---	---
$352,216 (USD 11.226 million)	$352,216 (USD 11.226 million)	$3,890,547 (Note 4)

Note 1: If the above amounts were in foreign currencies, they were converted into NTD at the exchange rates prevailing on the balance sheet date.
Note 2: The investment income and losses recognized for this period are based on the financial statements that have been audited by the parent company’s CPA in Taiwan.
Note 3: It includes the unrealized gains and losses from downstream transactions with related parties that were eliminated.
Note 4: As per the regulations of the Investment Commission, MOEA, the upper limit of the Company’s investment in mainland China is 60% of its net worth.
Note 5: The differences between the cumulative investment amount and the investment amount approved by the Investment Commission, MOEA, are as follows: The investee company RI DUAN CHIEN HO HSING ELECTRONICS TECHNOLOGY (SUZHOU) CO., LTD., was liquidated in 2019, and the original investment amount of USD 2.636 million has been remitted back to the holding company, K.S.T. INTERNATIONAL HOLDINGS LTD. The Company invested in 5.29% of the equity of Chi Rui (Cayman) Holding Limited (the initial investment amounted to US$1.09 million), which was recognized as a financial asset at fair value through other comprehensive income.

(2) Please refer to Notes 13.1.(6) for information on major transactions with investees in China as well as the prices and payment terms thereof.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

XIV. Segment Information

For the purpose of management, the Group divided the operating segments by product and service into the three reportable operating segments below:

The operation segment of K.S. TERMINALS in Taiwan: This segment is responsible for sales in Taiwan, Europe, and the US.

The operation segment of CHIEN HO HSING (SUZHOU): This segment is responsible for sales in China.

Others: This segment is responsible for transfers between segments.

The management team supervises each of the segments' operating performance to make decisions on resource allocation and performance evaluation. Segment performance is evaluated based on profit before tax, and the accounting policies of the reportable segments are the same as the Group's significant accounting policies summary. However, income tax in the consolidated financial statements is managed on a group basis and is not allocated to operating segments.

Transfer pricing between operating segments is similar to that of regular transactions with external third parties.

Reportable Segment Profit or Loss, Assets, and Liabilities

(1) 2025:

	K.S. TERMINALS in Taiwan	CHIEN HO HSING (SUZHOU)	Others	Subtotal	Adjustment and Elimination	Total
Revenue
Revenue From External Customers	$2,170,491	$1,954,796	$270,818	$4,396,105	$-	$4,396,105
Inter-segment Revenue	448,972	29,615	16,536	495,123	(495,123)	-
Total Revenue	$2,619,463	$1,984,411	$287,354	$4,891,228	$(495,123)	$4,396,105
Interest Expenses	13,930	-	128	14,058	-	14,058
Depreciation and Impairment	86,870	26,195	5,802	118,867	(888)	117,979
Investment Income (loss)	132,043	-	-	132,043	(166,772)	(34,729)
Segment Profit or Loss	$187,117	$227,495	$20,379	$434,991	$(166,478)	$268,513
Long-term Investments	$2,179,444	$-	$-	$2,179,444	$(1,987,595)	$191,849
Accounted for Using the Equity Method
Capital Expenditure on Non-current Assets	44,122	18,779	33,908	96,809	-	96,809
Segment Assets	$7,789,829	$1,645,339	$803,529	$10,238,697	$(2,102,717)	$8,135,980
Segment Liabilities	$1,305,584	$278,509	$79,536	$1,663,629	$(96,767)	$1,566,862

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(2) 2024:

	K.S. TERMINALS in Taiwan	CHIEN HO HSING (SUZHOU)	Others	Subtotal	Adjustment and Elimination	Total
Revenue
Revenue From External Customers	$2,538,796	$1,796,664	$209,499	$4,544,959	$-	$4,544,959
Inter-segment Revenue	450,543	42,065	-	492,608	(492,608)	-
Total Revenue	$2,989,339	$1,838,729	$209,499	$5,037,567	$(492,608)	$4,544,959
Interest Expenses	16,701	-	6,865	23,566	(6,600)	16,966
Depreciation and Impairment	83,260	27,536	5,528	116,324	(939)	115,385
Investment Income (loss)	208,770	-	-	208,770	(249,540)	(40,770)
Segment Profit or Loss	$711,727	$278,536	$110,328	$1,100,591	$(249,371)	$851,220
Long-term Investments Accounted for Using the Equity Method	$1,930,655	$-	$-	$1,930,655	$(1,704,589)	$226,066
Capital Expenditure on Non-current Assets	43,294	6,579	20,439	70,312	-	70,312
Segment Assets	$8,270,072	$1,489,668	$688,865	$10,448,605	$(1,856,868)	$8,591,737
Segment Liabilities	$1,621,522	$307,283	$80,005	$2,008,810	$(129,881)	$1,878,929

Reconciliation of Reportable Segment Revenue, Profit or Loss, Assets, Liabilities, and Other Major Items

The Group did not need reconciliation related to segment revenue, profit or loss, assets, liabilities, and other major items during 2025 and 2024.

Information by Region

(1) Net Revenue From External Customers:

Region	2025	2024
Asia	$2,496,413	$2,437,163
Taiwan	1,070,119	1,198,753
The US	425,729	447,596
Europe	401,135	458,337
Others	2,709	3,110
Total	$4,396,105	$4,544,959

Revenue is classified by the country where each customer operates.

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

(Amounts in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(2) Non-current Assets:

Region	2025/12/31	2024/12/31
Taiwan	$1,484,138	$1,624,786
Asia	211,418	178,279
The US	15,261	17,330
Total	$1,710,817	$1,820,395

Information on Important Clients

For 2025 and 2024, the Group had no revenue from a single customer accounting for 10% or more of the consolidated total revenue.

AI assistant

KST — Audit Report / Information 2025

52240_rns_2026-05-27_98b5f393-2ea2-4d75-b82e-b952f63c598d.pdf

Consolidated Financial Statements

Table of Contents

Audit opinions

Basis for Audit Opinion

Key Audit Matters

Inventory Valuation

Other Matters – Reference to Other Accountants

Responsibilities of the management and the governing body for the consolidated financial statements

CPAs' responsibilities for the audit of the consolidated financial statements

Others

4. Foreign Currencies

Financial Assets at Fair Value Through Profit or Loss

(2) Impairment of Financial Assets

Financial Liability

Financial Liabilities at Fair Value Through Profit or Loss

Financial Liabilities at Amortized Cost

Derecognition of Financial Liabilities

12. Investments Using the Equity Method

13. Property, plant and equipment

14. Investment Property

15. Leasing

The Group as Lessee

The Group as a Lessor

16. Intangible Assets

18. Provisions

19. Recognition of Revenue

Product Sales

Provision of Services

20. Borrowing Costs

21. Post-employment Benefit Plan

22. Income Tax

12. Equity

(1) Ordinary Shares

(2) Capital Surplus

15. Leasing

The Group as Lessee

A. Amounts Recognized in the Balance Sheet

(a) Right-of-use Assets

17. Non-operating Revenue and Expenses

(1) Other Income

(2) Other Gains and Losses

(3) Financial Costs

19. Income Tax

(1) Income Tax Recognized in Profit or Loss

(2) Income Tax Recognized in Other Comprehensive Income

Interest Rate Risk

Equity Price Risk

4. Credit Risk Management

Details of Movements in Level 3 Fair Values

Significant Unobservable Level 3 Fair Value Inputs

Notes to the Consolidated Financial Statements of K.S. TERMINALS INC. and Its Subsidiaries (Continued)

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KST Audit Report / Information 2025