Stock Code: 2365

KYE Systems Corp.

2025

Annual Report

April 19, 2025

Website designated by the Financial Supervisory Commission for information disclosure: https://mops.twse.com.tw For our annual report, please visit this website: https://www.geniusnet.com/tw

I. Company Spokesperson and Deputy Spokesperson
Name of spokesperson: Shih-Kun Tso
Title of spokesperson: Chairman
Name of deputy spokesperson: An-Min Kao
Title of deputy spokesperson: Vice President
Telephone: (02)2995-6645
Email: [email protected]

II. Addresses and Telephone Numbers of Headquarters and Plant
Headquarters: 1-8F, No. 492, Sec. 5, Chongxin Rd., Sanchong Dist., New Taipei City, Taiwan (R.O.C.)
Telephone: (02)2995-6645
Chongxin Plant: 4, 5, 6F, No. 492, Sec. 5, Chongxin Rd., Sanchong Dist., New Taipei City, Taiwan (R.O.C.)
Telephone: (02)2995-6645

III. Stock Transfer Agent
Name: Shareholder Services Department, Mega Securities Co., Ltd.
Address: 1F, No. 95, Sec. 2, Zhongxiao E. Rd., Taipei City, Taiwan (R.O.C.)
Website: www.emega.com.tw
Telephone: (02)3393-0898

IV. Certified Public Accountant(s) Certifying the Financial Report of the Most Recent Year
CPA(s): Mei-Hui Wu, Jun-Lin Wu
Accounting firm: Deloitte Taiwan
Address: 20F, No. 100, Songren Rd., Xinyi Dist., Taipei City, Taiwan (R.O.C.)
Website: www.deloitte.com.tw
Telephone: (02)2725-9988

V. Name of Exchange(s) where Foreign Securities are Listed and Traded, and Manner of Access to the Information of such Foreign Securities: None.

VI. Company Website: www.geniusnet.com/tw

Chapter 1. Letter to Shareholders ... 1
I. 2025 operating results ... 1
II. Overview of the 2026 business plan ... 4
III. Future strategy for the development of KYE, and the effects of external competition, legal environment and overall business environment ... 4

Chapter 2. Corporate Governance Report ... 6
I. Information of directors, president, vice president, assistant vice presidents and managers of departments and branches ... 6
II. Remuneration paid to directors, the president and vice president, etc., in the most recent year ... 13
III. Information of corporate governance ... 18
(I) Operations of the Board of Directors ... 18
(II) Operations of the Audit Committee ... 23
(III) Implementation of corporate governance, differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences ... 27
(IV) Composition and operations of the Remuneration Committee ... 41
(V) Information on the Members and Operations of the Nomination Committee ... 44
(VI) Promotion of sustainable development, differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences ... 45
(VII) Climate-related Information of Listed Companies ... 70
(VIII) Status of ethical management, differences with the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies, and the reasons for such differences ... 74
(IX) Other important information useful for understanding the status of corporate governance ... 79
(X) Operations of the internal control system ... 80
(XI) Important resolutions adopted by the shareholders’ meeting and the board of directors during the most recent year and as of the date of publication of the annual report ... 81
(XII) Where directors have expressed different opinions in records or written statements with regard to important resolutions adopted by the board of directors during the most recent year and as of the date of publication of the annual report, the main content of such opinions must be specified ... 84
IV. Information of professional fees for CPAs ... 84
V. Information of change of CPAs ... 84
VI. The chairman, president or financial or accounting manager of KYE who has served at the firm of the CPAs or any of its affiliates during the most recent year ... 84
VII. Changes in transfers and pledges of shares held by directors, managers and shareholders with a shareholding of more than 10% during the most recent year and as of the date of publication of the annual report ... 84

VIII. Information of shareholders with the top 10 shareholdings who are related parties or are spouses or relatives within the second degree of consanguinity 86
IX. Numbers of shares held by KYE, its directors and managers and companies directly or indirectly controlled by KYE in a single investee company, and the comprehensive shareholding percentage calculated on a consolidated basis 87

Chapter 3. Financing 88

I. Capital and shares 88

(I) Sources of share capital 88
(II) List of major shareholders 89
(III) The dividend policy of company, its implementation and the effects of expected material changes in the dividend policy 89
(IV) Effects of the proposed distribution of bonus shares at the current shareholders' meeting on the business performance and earnings per share of company 90
(V) Remuneration for employees and directors 90
(VI) Repurchase by company of its own shares 91

II. Issuance of corporate bonds 91
III. Issuance of preferred shares and global depositary receipts 91
IV. Issuance of employees' stock warrants and restricted stock awards for employees 91
V. Issuance of new shares with shares acquired or assigned from other companies 91
VI. Implementation of the fund usage plan 91

Chapter 4. Overview of Operations 92

I. Information of business activities 92

(I) Scope of business 92
(II) Overview of industry 92
(III) Overview of technology, research and development 95
(IV) Long-term and short-term business development plans 96

II. Overview of market and production/sales 97

(I) Market analysis 97
(II) Important applications and manufacturing processes of main products 99
(III) Supply of primary raw materials 101
(IV) Names of customers accounting for no less than 10% of the total purchase (sales) of company during any of the most recent two years, and respective amount and percentage of purchase (sales), and the reasons for changes of increase/decrease 102

III. The number, average length of service, average age and distribution of educational level of employees in service during the most recent two years and as of the date of publication of the annual report 103
IV. Information of environmental protection expenses 103
V. Labor-management relations 104
VI. Management of information security 107
VII. Important contracts 108
VIII. Code of conduct or ethics for employees 109

IX. Working environment and measures for protection of the safety of employees 112

Chapter 5. Review and Analysis of Financial Conditions and Financial Performance and Risk Events 113

I. Review and Analysis of Financial conditions 113
II. Review and Analysis of Financial performance 114
III. Review and Analysis of Cash flows 115
IV. Effect of material capital expenditure in the most recent year on financial business 116
V. Reinvestment policy for the most recent year, the main reasons for profits or losses, the improvement plan and the investment plan for the next year 116
VI. Analysis and assessment of risks during the most recent year and as of the date of publication of the annual report 116
VII. Composition and Operation of the risk management committee 120
VIII. Risk Management, Task Force on Climate-related Financial Disclosures, and Greenhouse Gas Management' in this report under Section 122
IX. Other important matters 140

Chapter 6. Special Information 141

I. Information of affiliates 141
II. Private placement of securities during the most recent year and as of the date of publication of the annual report 145
III. Other additional information required 145

Chapter 7. Occurrence of Events with a Material Effect on Shareholders' Equity or Securities Price, as Defined under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act, during the Most Recent Year and as of the Date of Publication of the Annual Report 146

Chapter 1. Letter to Shareholders

Dear Shareholders,

In 2025, the world entered the era of “Trump 2.0,” marked by heightened volatility in the global political and economic landscape. The United States’ implementation of strong protectionist measures and high tariff policies has intensified the U.S.–China trade war, reshaped global supply chains, and introduced upward inflationary risks. Although the global economy has maintained modest growth of approximately 3%, economic performance has varied significantly across countries. Amid these circumstances, our company has continued to achieve stable growth under the strategy of increasing cash reserves and reducing inventory levels, while rigorous cost control and proactive inventory optimization have enabled our product gross margins to remain at a solid level.

In 2025, our company continued to expand its product offerings to address a wide range of usage scenarios. These included silent and ergonomic keyboards and mice designed for business and office applications and integrated with Office software, Copilot-enabled products featuring AI shortcut functions, as well as gaming series products—such as steering wheels and controllers—targeting professional gamers. On the sales front, we implemented strategies focused on reactivating former customers, expanding new customer accounts, and supporting the growth of key customers to drive revenue momentum. These efforts were complemented by active participation in exhibitions and precision-targeted advertising to enhance brand exposure. In supply chain and manufacturing operations, we closely tracked key technology trends and established new production momentum. In addition, certain products were outsourced to reduce inventory levels, while backup suppliers were deployed to enable flexible scheduling when necessary, achieving the objective of risk diversification.

Against the backdrop of continued global uncertainty, our consolidated revenue in 2025 declined only slightly by 2% compared to the previous year, while consolidated gross margin remained at a relatively high level, allowing our core operations to remain profitable. Non-operating income continued to benefit from prudent capital allocation and real estate investments, with interest income and rental income from properties providing steady cash inflows. However, in 2025, the New Taiwan Dollar experienced significant appreciation, resulting in sizable foreign exchange losses recognized by the Company and its subsidiaries, which eroded overall profitability. In addition, the recognition of non-operating gains in 2024 from the disposal of investment properties raised the comparison base. As a result, net profit after tax for 2025 decreased by 50% compared to the prior year.

In summary, our company’s operating performance remains sound, supported by a solid financial structure and ample liquidity. We possess sufficient resilience to address challenges and risks in an external environment characterized by multiple uncertainties, and we are well positioned to seize market opportunities as they emerge.

The following is a report on our operating performance in 2025:

2025 operating results

(I) Results of implementation of the business plan

In 2025, our consolidated net operating revenue was approximately NTD960 million, a decrease of 2% from approximately NTD980 million in 2024. Our consolidated operating profit was NTD53 million, a decrease of 29% from 2024. Our after-tax net profit attributable to the owner of the company was NTD71 million, a decrease of 50% from 2024. Our after-tax net profit per share was NTD0.32.

Unit: NTD thousand

Item	2025	2024	Growth rate
Operating revenue	959,364	978,816	(2%)
Gross operating profit	393,102	394,372	(0%)
Operating expense	340,222	320,237	6%
Operating profit	52,880	74,135	(29%)
Pre-tax net profit	91,849	180,506	(49%)
After-tax net profit	70,257	142,804	(51%)
Net profit attributable to owners of the company	70,983	142,647	(50%)

(II) Budget implementation

In accordance with the "Regulations Governing the Publication of Financial Forecasts of Public Companies", this part is not applicable since we have not disclosed the financial budget for 2025.

(III) Analysis of financial revenues and expenses and profitability

Revenue and expense analysis

Unit: NTD thousand

Item	2025	2024	Amount of change
Net cash inflow from operating activities	103,837	213,331	(109,494)
Net cash (outflow) inflow from investing activities	(26,839)	315,388	(342,227)
Net cash outflow from financing activities	(164,829)	(169,545)	4,716

In 2025, our interest income was NTD33,724 thousand, primarily from operating activities, and our interest expense was NTD6,412 thousand, with a net exchange loss of NTD13,249 thousand. In addition, we recorded a net cash inflow from operating activities of NTD103,837 thousand and a consolidated net cash outflow from investing and financing activities of NTD191,668 thousand in 2025. Our cash and cash equivalents (including the effect of changes in exchange rate) in the current year decreased by NTD121,671 thousand, and the balance of our consolidated cash and cash equivalents at the end of the year was NTD1,135,920 thousand. As of December 31, 2025, the company held consolidated cash, cash equivalents, and time deposits with original maturities of more than three months were NTD1,403,390 thousand.

Profitability analysis

Item		Year 2025	Year 2024
Financial structure analysis	Liabilities to assets ratio	12.63%	13.64%
	Long-term funds to property, plant and equipment ratio	511.33%	525.28%
Solvency analysis	Current ratio	927.15%	912.00%
	Quick ratio	847.80%	838.45%
Operating ability analysis	Accounts receivable days	39	33
	Average sales days	78	91
Profitability analysis	Return on assets	2.12%	4.14%
	Return on equity	2.31%	4.69%
	Net profit margin	7.50%	14.60%
	Earnings per share (NTD)	0.32	0.64

(IV) Performance in research and development

In 2025, affected by the appreciation of the New Taiwan Dollar and surging prices of memory products, precious metals, and raw materials, both personal computers and mobile phones faced threats of rising costs. In addition to continuously reducing costs, the Company's product strategy must also be adjusted to introduce high value added and high margin products, or to maintain selling prices through specification downgrades, in order to mitigate the impact of rising costs.

Demand for webcams and headset microphones currently used in computer video and communication equipment has rebounded; in 2026, cost reduction solutions will be introduced, the USB dual head A+C interface will be upgraded, and high definition webcams for livestreaming and communication experiences, as well as wired and wireless microphones and webcams featuring information security facial recognition, will be developed. Bluetooth speaker headphones are also a key focus of market demand, with high acceptance of lightweight and portable designs, and product launches will focus on speaker headphone products that are compact in size and deliver good sound quality.

Growth has been significant for gaming and esports products, including racing game steering wheels, esports wireless mice, and game controllers; in 2026, the Company will continue to launch new force feedback steering wheels, Xbox style controllers, and additionally introduce flight joysticks, as well as lightweight wireless gaming mice that balance tactile feel and rapid movement.

Following the introduction of Copilot into keyboards and mice, the Company plans in 2026 to launch wireless lightweight mice for business use and to develop business fast charging mice that can be used for one week after five minutes of charging. At the same time, in response to increasing demand for compact keyboards, the Company will also upgrade one zone and two zone keyboards and launch dual mode keyboards supporting both wired and wireless connectivity.

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II. Overview of the 2026 business plan

(I) Operational policies

Diversifying Product Lines to Enhance Value: Expanding and diversifying the product portfolio to deliver higher overall value.
Expanding Computer Peripherals, Audio-Visual, and Gaming Products: Driving growth in these key areas.
Expanding Growth Engines: Focusing on products with high gross margins, strong growth potential, and favorable long-term prospects.
Promoting reduction of plastics and carbon and energy conservation in the ESG directions for sustainable development.

(II) Business goal

Our company aims for positive growth by expanding the sales volumes of various proprietary brand products in 2026. We anticipate the sales quantity of computer peripherals to reach 6 million units.

(III) Key production and sales policies

Production and quality policies

(1) Parallel in-house production and outsourcing to shorten lead times and increase turnover rates.
(2) Reduce inventory, minimize losses, and shorten inventory turnover days.
(3) Improve manufacturing quality and quality control inspection capabilities.
(4) Increasing Strategic Product Suppliers.

Marketing policies

(1) Promote livestreaming accessories, Bluetooth headphones and speakers, and gaming products.
(2) Participate in and sponsor local back-to-school and major holiday promotions for customers.
(3) Increase brand exposure, social media presence, and short-video product coverage.
(4) Expand multilingual support on the official website to drive new customer development.
(5) Standardize and downsize packaging to reduce plastic usage and packaging materials.

III. Future strategy for the development of KYE, and the effects of external competition, legal environment and overall business environment

(I) Future strategy for development of KYE

In 2025, global markets were impacted by U.S. tariff policies. Together with the continued expansion of the U.S. trade surplus in AI semiconductors in the second half of the year and simultaneous increases in copper and silver raw material prices, cost pressures and appreciation risks of the New Taiwan Dollar and Renminbi in 2026 cannot be underestimated. In response, the Company has begun adjusting its sales mix and has introduced high-value-added livestreaming products to enhance gross margins, thereby mitigating the impact of rising costs and potential further currency appreciation. In addition, by leveraging a diversified product portfolio and increasing the sales contribution of audio-visual and gaming products, the Company seeks to reduce the risk associated with a high concentration in computer keyboard and mouse products.

(II) Effects of external competition, legal environment and overall business environment

The Russia-Ukraine war continues, while tensions between the United States and Iran remain elevated. Ongoing disruptions to Middle Eastern shipping routes continue to affect the European and Middle Eastern economies. Any potential closure of the Strait

of Hormuz would also impact crude oil exports from the Middle East, oil prices, and the global economy.

Rising raw material prices are leading to increased product costs and extended lead times.
Memory price increases have driven up the prices of computers and mobile phones, causing some consumers to adopt a wait-and-see approach or postpone device upgrades.
Foreign exchange controls in Argentina have been lifted; however, payment terms remain lengthy. As the Argentine government is expected to increase its U.S. dollar reserves toward the end of the year, customers' willingness to import is likely to improve.
U.S. tariff policies, as well as uncertainty surrounding the timing, frequency, and magnitude of interest rate cuts by the Federal Reserve, often lead to sharp exchange rate fluctuations or heightened market expectations.

Last year, the Company was adversely affected by U.S. tariff policies and significant exchange rate volatility, which resulted in substantial foreign exchange losses. Nevertheless, through optimization of the product mix, improvements in the sales structure, and the maintenance of healthy inventory levels, the Company was able to stabilize gross margins and sustain profitability. Looking ahead to 2026, in addition to ongoing geopolitical uncertainties, rising volatility in raw material costs remains a key challenge. In response, the Company has proactively collaborated with its supply chain partners to build safety stock, lock in component costs, and make every effort to maintain stable supply and pricing, thereby ensuring customer confidence.

The Company's recently launched online livestreaming and audio-visual gaming products feature high value-added content, attractive gross margins, and strong growth potential. These products are expected to contribute to more stable profitability and cash flows, while also helping to mitigate the impact of raw material price fluctuations on earnings. With a cautious yet optimistic outlook for 2026, the Company anticipates a return to growth.

Best wishes to you all,

Chairman Shih-Kun Tso

Chapter 2. Corporate Governance Report

I. Information of directors, president, vice president, assistant vice presidents and managers of departments and branches

(I) Information of directors (I)

Information of directors

(April 19, 2026) Unit: shares; %

Title	Nationality or country of registration	Name	Gender Age	Date of election (taking office)	Term	Date of first election	Shareholding at time of election		Current shareholding		Current shareholding of spouse or minor children		Nominate shareholding		Main experience (education)	Concurrent positions at KYE and other companies	Other managers or directors with a spousal relationship or a relationship within the second degree of consanguinity			Remarks
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name	Relationship
Chairman	Republic of China	Shih-Kun Tso	Male 60-69	June 9, 2025	3 years	November 15, 1988	5,877,815	2.65	5,877,815	2.65	2,938,010	1.33	0	0.00	Vocational high school CEO and President, KYE Systems Corp.	Senior Advisor, KYE Systems Corp. Representative of Corporate Director, KYE Systems (Hong Kong) Corporation Limited Representative of Corporate Director, Genius Holding Co., Ltd. Representative of Corporate Director, Globalink Holding Co., Ltd. Representative of Corporate Director, KYE Inc. Representative of Corporate Director, KYE Trade (HK) Co., Ltd. Chairman, Dongguan Xueying Computer Products Co., Ltd. Chairman, Chung-Chiang Investment Co., Ltd. Chairman, Hung-Cheng Investment Co., Ltd. Chairman, Digitife Technologies Co., Ltd. Representative of Chairman, Coretek Opto Corporation Chairman, Sin Tak Green Energy Co., Ltd.	Representative of the director of the legal person	Yi-Chen Tso	Father and daughter	None
Director	Republic of China	Yung-Far Wei	Male 70-79	June 9, 2025	3 years	June 13, 2007	160,061	0.07	160,061	0.07	0	0.00	0	0.00	Department of Commerce, Chiayi Private Tatang Commercial High School Chairman, Gwo Lin Electronics Co., Ltd.	Chairman, Gwo Lin Electronics Co., Ltd. Chairman, Sim She Technology Inc. Chairman, Hao Charng enterprise co., Ltd. Chairman, Kuo Gih electronics co., Ltd. Director, Dongguan Xieying Computers Co., Ltd.	None	None	None	None

Title	Nationality or country of registration	Name	Gender Age	Date of election (taking office)	Term	Date of first election	Shareholding at time of election		Current shareholding		Current shareholding of spouse or minor children		Nominee shareholding		Main experience (education)	Concurrent positions at KYE and other companies	Other managers or directors with a spousal relationship or a relationship within the second degree of consanguinity			Remarks
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name	Relationship
															Director, Dongguan Kenying Computer Products Co., Ltd. Director, Triumph Brilliance Inc.
Director	Republic of China	Han-Liang Hu	Male 50-59	June 9, 2023	3 years	June 21, 2019	0	0.00	0	0.00	0	0.00	0	0.00	MBA in Decision Making for Accounting and Management, National Taiwan University Passed the Senior CPA Examination Independent Director, Hermes Microvision, Inc. Director, United Way of Taiwan Supervisor, World Vision Taiwan	Partner CPA, Cordiality Justice Service CPAS & CO. Director, GoDEX International Co., Ltd. (4987) Director, Scientech Corporation (3583) Director, Chien Jui Venture Capital Ltd. Director, Busecom Telecommunication Co., Ltd. (6726) Director, Accomp Technologies Co., Ltd Supervisor. Power Tank Energy Ltd. Independent Director, Epsol-Precision Inc.(3016) Independent Director, Promate Electronic Co., Ltd. (6577) Independent Director, KKCompany Technologies Inc.	None	None	None	None
Director	Republic of China	Chin An Tai Investment, Ltd.
Representative: Yi-Chen Tao (Note 2)	N/A
Female 30-39	June 9, 2025	3 years	June 9, 2022	6,094,955	2.75	6,094,955	2.75	-	-	-	-	-	-	N/A	N/A	N/A	None
							0	0.00	70,000	0.03	0	0.00	0	0.00	Department of Marketing, Pace University, New York, USA
Senior Consultant, Jie Heng International Co., Ltd.
Group Leader, Better Management Consulting Co., Ltd.	Special Assistant, Chairman Office, KYE Systems Corp.	Chairman	Shih-Kun Tao	Father and daughter	None
Director	Republic of China	Zeng-Bing Liu	Male 60-69	June 9, 2025	3 years	June 9, 2025	0	0.00	0	0.00	0	0.00	0	0.00	Vocational high school Supervisor, Chiang Ying Enterprise Co., Ltd.	None	None	None	None	None
Independent director	Republic of China	Hang-Tzu Hsu	Male 60-69	June 9, 2025	3 years	June 6,2016	0	0.00	0	0.00	0	0.00	0	0.00	Department of Textile Engineering, Nan Yu Institute of Technology
Senior Vice President, Songteng Enterprise Co., Ltd.
Director, Songteng Enterprise Co., Ltd.	President, VAV International Corporation
Director, VAV International Corporation	None	None	None	None
Independent director	Republic of China	Wan-Ting Su	Female 40-49	June 9, 2025	3 years	June 9, 2022	0	0.00	0	0.00	0	0.00	0	0.00	Master's in Accounting, National Chengchi University	Advisor, FN Management Consulting Co., Ltd.	None	None	None	None

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-8-

Title	Nationality or country of registration	Name	Gender Age	Date of election (taking office)	Term	Date of first election	Shareholding at time of election		Current shareholding		Current shareholding of spouse or minor children		Nominee shareholding		Main experience (education)	Concurrent positions at KYE and other companies	Other managers or directors with a spousal relationship or a relationship within the second degree of consanguinity			Remarks
							Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name	Relationship
															Passed the Senior CPA Examination Senior Manager, Department of Accounting, Far EasTone Telecommunications Co., Ltd. Senior Specialist, Department of Accounting, International CSRC Investment Holdings Co., Ltd. Assistant Manager for Finance and Accounting, Ting Li Development Co., Ltd.
Independent director	Republic of China	Peng, Fang	Male 60-69	June 9, 2025	3 years	June 9, 2025	0	0.00	0	0.00	0	0.00	0	0.00	Department of Political Science, private Soochow University Passed the special exam Investigation Specialist and Acting Team Leader of the Taipei City Investigation Division of the Investigation Bureau of the Ministry of Justice	None	None	None	None	None

Note 1: The number of shares held as shown in the above table is based on the shareholdings as of April 19, 2026, the date on which the Company closed its shareholder register.
Note 2: Chin An Tai Investment, Ltd., a corporate director, appointed Ms. Yi-Chen Tso as its representative on June 9, 2025.

2. Major shareholders of corporate shareholders

April 19, 2026

Name of corporate shareholder	Major shareholder of corporate shareholder
	Name of shareholder	Shareholding (%)
Chin An Tai Investment, Ltd.	Hsiu-Chin Hsu	51
	Ching-Hsin Cho	49

(I) Information of directors (II)

Disclosure of information about the professional qualifications of directors and the independence of independent directors

April 19, 2026

Name	Criteria	Professional qualifications and experience	Independence
Shih-Kun Tso	1. For the professional qualifications and experience of directors, see pages 6–8 of this annual report.	The Board of Directors has met the following requirements for independence:
1. In accordance with the requirements of Paragraphs 3 and 4, Article 26-3 of the Securities and Exchange Act, no more than half of the eight directors are spouses or relatives within the second degree of consanguinity.
2. The three independent directors account for 37.5% of the eight directors. The independence of the independent directors has met the requirements of Paragraph 2, Article 14-2 of the Securities and Exchange Act and Subparagraphs 1 to 8, Paragraph 1, Article 3 and Articles 4 to 9 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies,” promulgated by the Financial Supervisory Commission.
3. None of the three independent directors (personally or through a nominee), their spouses or minor children holds any share of KYE.
4. None of the three independent directors has received any amount of remuneration for provision of business, legal, financial and accounting services to KYE or any of its affiliates within the most recent two years.	0
Yung-Far Wei	2. The professional qualifications of the independent directors Hung-Tsu Hsu, Wan-Ting Su and Peng-Fang have met the requirements of Paragraph 1, Article 2 of the “Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies.”		0
Han-Liang Hu			2
Chin An Tai Investment, Ltd. Representative: Yi-Chen Tso			0
Zeng-Bing Liu			0
Hung-Tzu Hsu			0
Wan-Ting Su			0
Peng, Fang			0

Note 1: Any person to whom any of the following applies may not serve as a manager, and any such person serving as a manager shall be discharged:
1. The person has committed a crime under the Organized Crime Prevention Act and has been convicted by a final judgment, and where his/her sentence has not been executed or completed, or a period of 5 years has not elapsed after his/her sentence is completed, the period of suspended sentence has expired or he/she has received a pardon.
2. The person has committed the crime of fraud, breach of trust or embezzlement and has been subject to a final sentence of imprisonment of no less than one year, and where his/her sentence has not been executed or completed, or a period of 2 years has not elapsed after his/her sentence is completed, the period of suspended sentence has expired or he/she has received a pardon.
3. The person has committed a crime under the Anti-Corruption Act and has been convicted by a final judgment, and where his/her sentence has not been executed or completed, or a period of 2 years has not elapsed after his/her sentence is completed, the period of suspended sentence has expired or he/she has received a pardon.
4. The person has been declared bankrupt or has been ordered to start the liquidation process by a court ruling, and where he/she has not restored his/her rights.
5. The person has used notes and been blacklisted, and where the period of his/her blacklisting has not expired.
6. The person is legally incapable or has limited legal capacity.
7. The person has been declared to be under assistance, and where such declaration has not been revoked.

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Diversity and independence of the Board of Directors

To strengthen corporate governance and facilitate well-developed composition and structure of the Board of Directors, in accordance with the KYE’s “Corporate Governance Best-Practice Princip” states that the election of directors shall be held under a candidate nomination system. For the election of directors (including independent directors), KYE not only takes into account the diverse and professional backgrounds and abilities of directors (including independent directors), but also formulates an appropriate diversity policy based on the needs of KYE’s operational development.

To ensure diversity and independence in the composition of the Board of Directors, KYE does not set any gender or age limit for the directors and mainly considers their operational judgment, business management and crisis management. At present, the diversity goal of the board of directors is to have at least one female director among the board seats, and the number of directors concurrently serving as company executives shall not exceed one-third of the board seats. They should have at least three years of experience as an executive director (including independent directors) or in senior management positions, or hold professional qualifications or licenses. The Board of Directors is currently composed of eight directors, including six men and two women, all of whom are unrelated. One of whom serves concurrently as a manager. There are three independent directors, accounting for 37.5% of the current board seats, with one serving for over 9 years, one serving for 3 to 6 years, and one serving for less than 3 years. One director is aged 70 to 79, four directors are aged 60 to 69, one director is aged 50 to 59, one director is aged 40 to 49, and one director is aged 30 to 39. Six directors have more than 10 years of experience as executive directors (including independent directors) or in senior management positions, and two directors hold CPA certificates. The board members each possess professional backgrounds and skills in fields of management, technology, financial accounting, and research and development marketing, all of which meet the qualifications and competencies required for their positions. Through the diversity and independence of the board structure, the company ensures that the decision-making process of the board fully considers various professional knowledge and perspectives, and can provide objective opinions and suggestions independently of the company's management.

After the comprehensive board election in 2022, the goal of achieving the minimum seats of female directors on the board has been met, although the proportion of female directors has not yet reached one-third of the total board seats. This is because, in addition to considering operational judgment, business management, and crisis management abilities, the company also evaluates the candidates' familiarity with the company's various business operations and the industry. During the most recent comprehensive board election, the majority of candidates meeting the company's expectations were male. However, to uphold the universal value of gender equality, the company aims to increase the proportion of female directors to more than one-third in future elections by nominating and electing female directors with appropriate qualifications and abilities, gradually increasing the proportion of female directors.

Implementation of the policy for diversity in members of the Board of Directors

The Board of Directors must provide guidance for KYE’s policies, supervise the management, and report to KYE and its shareholders. All operations and arrangements under the corporate governance system must ensure that the Board of Directors exercises its powers in accordance with the law, the Articles of Incorporation or resolutions of the shareholders’ meeting. The status of implementation by the Board of Directors is as follows:

Name\Item	Diversified abilities
	Innovation ability	Business experience	Finance and accounting	Legal affairs	Industry
Shih-Kun Tso	V	V	V	*	V
Yung-Far Wei	V	V	-	*	V
Han-Liang Hu	V	V	V	V	V
Chin An Tai Investment, Ltd. Representative: Yi-Chen Tso	V	V	-	*	-
Zeng-Bing Liu	V	V	-	*	V
Hung-Tzu Hsu	V	V	-	*	V
Wan-Ting Su	V	V	V	V	-
Peng, Fang	V	-	-	V	-

*This means the director is partially competent in the field.

Name\Item	Professional knowledge and skills
	Business management	Leadership and decision making	Finance and accounting	Industrial knowledge	Crisis management	International vision
Shih-Kun Tso	V	V	V	V	V	V
Yung-Far Wei	V	V	-	V	V	V
Han-Liang Hu	V	V	V	V	V	V
Chin An Tai Investment, Ltd. Representative: Yi-Chen Tso	V	V	-	-	V	V
Zeng-Bing Liu	V	V	-	V	V	V
Hung-Tzu Hsu	V	V	-	V	V	V
Wan-Ting Su	V	V	V	-	V	V
Peng, Fang	V	V	-	-	V	V

(II) Information of president, vice president, assistant vice presidents, and managers of departments and branches

(April 19, 2026) Unit: shares; %

Title	Nationality	Name	Gender	Date of election (taking office)	Shareholding		Shareholdings of spouse or minor children		Nominee shareholding		Main experience (education)	Concurrent position(s) at other company(ies)	Manager(s) with a spousal relationship or a relationship within the second degree of consanguinity			Remarks
					Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)			Title	Name	Relationship
Senior Advisor	Republic of China	Shih-Kun Tso	Male	October 1, 2006	5,877,815	2.65	2,938,010	1.33	0	0.00	Vocational high school CEO and President, KYE Systems Corp.	Representative of Corporate Director, KYE Systems (Hong Kong) Corporation Limited Representative of Corporate Director, Gentus Holding Co., Ltd. Representative of Corporate Director, Globalink Holding Co., Ltd. Representative of Corporate Director, KYE Inc Representative of Corporate Director, KYE Trade (HK) Co., Ltd. Chairman, Dongguan Kunying Computer Products Co., Ltd. Chairman, Chung-Chiang Investment Co., Ltd. Chairman, Hung-Cheng Investment Co., Ltd. Chairman, DigiLife Technologies Co., Ltd. Representative of Chairman, Coretak Opto Corporation Chairman,Sin Tak Green Energy Co., Ltd.	None	None	None	None
President	Republic of China	Pai-Shan Lee	Male	November 1, 2021	275,039	0.12	0	0.00	0	0.00	Master's in computer and information technology, Old Dominion University Vice President of OBM Business Unit, KYE Systems Corp.	None	None	None	None	None
Vice President, Accounting Manager and Chief Corporate Governance Officer	Republic of China	An-Min Kao	Male	January 1, 2008	63,756	0.03	0	0.00	0	0.00	MBA, The City College of New York Manager, PricewaterhouseCoopers Taiwan	Director, Hung-Cheng Investment Co., Ltd. Director, Timing Pharmaceutical Co., Ltd.	None	None	None	None
Vice president	Republic of China	Chin-Tien Hsu	Male	May 2, 2023	0	0.00	0	0.00	0	0.00	Department of Electrical Engineering, Feng Chia University Vice president of the Business Division, Monterey international corp	None	None	None	None	None

Note: The numbers of shares held in the table above are based on the numbers of shares registered as of April 19, 2026, the book closure date.

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II. Remuneration paid to directors, the president and vice president, etc., in the most recent year

(I) Remuneration for directors and independent directors

Unit: NTD thousand

Title	Name	Remuneration for directors	Sum of A, B, C and D as an amount and % of after-tax net profit	Remuneration received for concurrent service as an employee	Sum of A, B, C, D, E, F and G as an amount and % of after-tax net profit	Remuneration received from non-subsidiary investee companies or parent company only
Remuneration (A)	Post-employment pension (B)	Remuneration for director (C) (Note 1)	Business execution expense (D)	Salaries, bonuses, special allowances, etc. (E)	Post-employment pension (F)	Remuneration for employees (G) (Note 2)
KYE	All companies in the financial report	KYE	All companies in the financial report	KYE	All companies in the financial report	KYE
Chairman	Shih-Kun Tso	-	-	-	-	126
Director	Yung-Far Wei	-	-	-	-	84
Director	Han-Liang Hu	-	-	-	-	84
Director	Chin An Tai Investment, Ltd. Representative: Yi-Chen Tso	-	-	-	-	84
Independent director	Zeng-Bing Liu (Note 3)	-	-	-	-	49
Independent director	Hung-Tzu Hsu	-	-	-	-	168
Independent director	Wan-Ting Su	-	-	-	-	168
Independent director	Peng, Fang (Note 3)	-	-	-	-	98
Independent director	Anti Tsai (Note 4)	-	-	-	-	59

The policy, system, standards and structure for payment of remuneration for directors, and a description of the relevance to remuneration paid based on factors including job responsibilities, risks and the time invested Pursuant to Article 25 of the Articles of Incorporation, KYE may allocate no more than 1% of the earnings of the current year as remuneration for directors in that year. Such remuneration may be distributed to a director in a weighted amount corresponding to the level of his/her participation in and his/her contribution to the operations of KYE, taking into account the weighting assigned as well as the scores and ratings of the Board performance evaluation; where the performance evaluation results are favorable, no additional adjustment shall be made. In the case of independent directors, their remuneration is slightly higher than that of non-independent directors since they are responsible for organizing functional committees and serving as the members thereof to improve supervisory functions. Additionally, KYE has purchased liability insurance for directors to mitigate the risk of them being subject to claims from shareholders or other related parties for their due performance of duties.
Remuneration received by directors for providing services (e.g., serving as a non-employee advisor) to all companies in the financial report within the most recent year, other than that disclosed in the table above: None.

Note 1: The listed is the amount of remuneration approved by the Board of Directors for distribution to each director in the most recent year based on the level of his/her participation in and his/her contribution to the operations of KYE.

Note 2: The listed is the amount of remuneration approved by the Board of Directors for distribution to employees in the most recent year, calculated in proportion to the actual amount of the previous distribution.

Note 3: This director was newly appointed at the general shareholders' meeting held on June 9, 2025, during which the board of directors was fully re-elected. The remuneration information is presented for the period of service only.

Note 4: This director was dismissed at the general shareholders' meeting held on June 9, 2025, during which the board of directors was fully re-elected. The remuneration information is presented for the period of service only.

(II) Remuneration for the president and vice presidents

Unit: NTD thousand

Title	Name	Salary (A)		Post-employment pension (B) (Note 1)		Bonus, special disbursement, etc. (C)		Amount of remuneration for employee (D) (Note 2)				Sum of A, B, C and D as a % of after-tax net profit (%)		Remuneration received from non-subsidiary investee companies or parent company only
		KY	All companies in the financial report	KY	All companies in the financial report	KY	All companies in the financial report	KY	Amount of remuneration	KY	Amount of remuneration	KY	All companies in the financial report
Senior Advisor	Shih-Kun Tso	3,600	9,005	-	-	1,336	3,656	-	-	-	-	4,936	12,661	600
President	Pai-Shan Lee	4,200	4,200	108	108	1,536	1,536	-	-	-	-	5,844	5,844	None
Vice President, Accounting Manager and Chief Corporate Governance Officer	An-Min Kao	2,540	2,540	158	158	982	982	-	-	-	-	3,680	3,680	77
Vice President	Chin-Tien Hsu	1,620	1,620	99	99	473	473	-	-	-	-	2,192	2,192	None

Note 1: Listed is the actual amount of post-employment pension paid and the amount of contribution to it in the most recent year.
Note 2: The listed is the amount of remuneration approved by the Board of Directors for distribution to employees in the most recent year, calculated in proportion to the actual amount of the previous distribution.

(III) Remuneration for managers receiving the top 5 amounts of remuneration: N/A.
(IV) Names of managers to whom the remuneration for employees is distributed, and the remuneration distributed

(April 19, 2026) Unit: NTD thousand; %

	Title	Name
Managers	Senior Advisor	Shih-Kun Tso
	President	Pai-Shan Lee
	Vice President, Accounting Manager and Chief Corporate Governance Officer	An-Min Kao
	Vice President	Chin-Tien Hsu

Note: The listed is the amount of remuneration approved by the Board of Directors for distribution to employees in the most recent year, calculated in proportion to the actual amount of the previous distribution.

(V) Analysis of the total remuneration paid by KYE and all companies in the consolidated financial statements to the directors, president and vice president of KYE within the most recent two years as a percentage of the after-tax net profit in the parent company only only financial report, the policy, standards and combinations for payment of remuneration, the procedures for determination of remuneration, and the relevance to the operating performance and future risks

Total remuneration paid to directors, the president and vice president as a percentage of the after-tax net profit within the most recent two years

Unit: %

Item	2025		2024
	KYE	All companies in the financial report	KYE	All companies in the financial report
Total remuneration for directors as a % of after-tax net profit	14.64	27.24	7.57	14.27
Total remuneration for the President and Vice President as a % of after-tax net profit	23.46	34.34	11.68	17.50

The policy, standards and combinations for payment of remuneration, the procedures for determination of remuneration, and the relevance to the operating performance and future risks

(1) Policy, criteria and combinations for payment of remuneration

Pursuant to Article 25 of the Articles of Incorporation, KYE may allocate no more than 1% of its earnings in the current year as remuneration for directors in that year. Such remuneration may be distributed to a director in a weighted amount corresponding to the level of his/her participation in (such as the number of functional committees of which he/she is a member) and his/her contribution to the operations of KYE in accordance with the "Regulations Governing Payment of Remuneration to Directors," as well as based on the performance evaluation scores and ratings of the Board of Directors. Where the performance evaluation results are assessed as satisfactory, no additional adjustment will be made. Additionally, a director will be paid a fixed amount of compensation for performing his/her duties based on his/her participation in the operations of KYE and his/her responsibilities in corporate governance.

Regarding the policy of the remuneration for the President and Vice President, the remuneration and bonuses are paid in accordance with our personnel regulations and based on the salary level for such positions in the market of the relevant industry, the scope of powers and responsibilities of such positions in our company, and their contribution to our operational and profit targets.

(2) Procedures for determination of remuneration

The procedures for determination of remuneration not only takes into account our overall operating performance and future operational risks and trends of development in the industry, but also considers the rate of achievement of personal performance and personal contribution to our

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operating performance and profit targets in order to provide reasonable remuneration, subject to review and approval by the Remuneration Committee and the Board of Directors. The remuneration system is also reviewed from time to time according to the actual status of operations and the applicable laws.

(3) Relevance to the operating performance and future risks

In reviewing the relevant payment criteria and system of our remuneration policy, we mainly take into account the overall condition of our operations, and we determine the payment criteria based on the rate of achievement of performance and the level of contribution in order to improve the effectiveness of the organizations and teams of the Board of Directors and managers. Consideration is also given to the remuneration standards of the industry to ensure the remuneration of our management is competitive in the industry. In order to achieve a balance between our sustainable management and risk control, our important decisions and performance targets for managers are formulated after balancing various risk factors to ensure that possible risks within the scope of responsibilities are effectively managed and prevented.

(4) ESG Performance and Manager Compensation Linkage Policy

To incentivize managers to achieve the company's performance and profit targets, while also focusing on the company's sustainable development and long-term competitiveness when formulating and executing business decisions, this policy is established as the basis for awarding variable compensation to managers.

The sustainability performance indicators for variable compensation of the President, CEO, and equivalent positions are as follows:

Indicators	Weighting	Explanation
Economic Indicators	35~40%	Company financial performance and industry comparison levels, such as operating and profitability performance, growth rate, budget achievement rate, ROE, market value, and other comprehensive data.
Strategic Indicators	35~40%	Targets based on annual strategic initiatives, such as AI digital transformation, strategic products, markets and customers, manufacturing, sustainability performance opportunities and risk management, corporate governance evaluation scores, green design, low-carbon production, and other major themes. Each indicator accounts for 5-10%.
Sustainability and Internal Control Indicators	20~30%	Implementation of the three major sustainability commitments: Key tasks and specific achievements in integrity management, risk control, and

The sustainability performance indicators for variable compensation of other managers and equivalent positions are as follows:

Indicators	Weighting	Explanation
Economic Indicators	25~30%	Company financial performance and industry comparison levels, such as operating and profitability performance, growth rate, budget achievement rate, ROE, and other comprehensive data.
Material Topics Response	40~50%	Promotion of integrity management, legal compliance, corporate governance evaluation scores, green design, and energy-saving products. Each indicator accounts for 10-15%.
Climate Change Response	20~35%	Enhancing internal climate awareness: Achievements in carbon reduction commitments (such as greenhouse gas inventory and certification), company-wide water and electricity conservation, and waste reduction initiatives. Each indicator accounts for 10-15%.
Other Indicators	Bonus Items	Other business promotion and contributions related to job responsibilities.

III. Information of Corporate Governance

(I) Operation of the Board of Directors

In the most recent year, the Board of Directors held six meetings (A), and the attendance of directors in these meetings is as follows:

Title	Name	Actual number of meetings attended (in voting/non-voting capacity) (B)	Number of meetings attended by proxy	Actual rate of attendance (in voting/non-voting capacity) (%) (B/A) (Note 1)	Remarks
Chairman	Shih-Kun Tso	6	0	100	Re-elected for another term on June 9, 2025
Director	Yung-Far Wei	6	0	100	Re-elected for another term on June 9, 2025
Director	Han-Liang Hu	5	1	83	Re-elected for another term on June 9, 2025
Director	Chin An Tai Investment, Ltd. Representative: Yi-Chen Tso	6	0	100	Re-elected for another term on June 9, 2025
Director	Zeng-Bing Liu	4	0	100	Newly elected on June 9, 2025
Independent director	Hung-Tzu Hsu	6	0	100	Re-elected for another term on June 9, 2025
Independent director	Wan-Ting Su	5	0	83	Re-elected for another term on June 9, 2025
Independent director	Peng, Fang	4	0	100	Newly elected on June 9, 2025
Independent director	Anti Tsai	2	0	100	Dismissed upon the full re-election of the board on June 9, 2025.

Note 1: It is calculated based on the number of meetings held during his tenure and the actual number of attendances.

Other information required:

Where any of the following applies to the operations of the board of directors, the date and number of session of the relevant board of directors meeting, the proposal(s) for the meeting, all opinions of independent directors and the actions taken by your company in response to the opinions of independent directors must be specified:

(1)Matters set forth under Article 14-3 of the Securities and Exchange Act

Board of Directors	Proposal	Opinions of independent directors	Actions taken by KYE in response to the opinions of independent directors
March 10, 2025 (12th term, 15th meeting)	1. Distribution of the remuneration for employees and directors in 2024
2. The results of self-assessment and the statement of internal control for 2024
3. The 2024 business report, parent company only only financial report and consolidated financial report
4. Distribution of earnings for 2024
5. Participation in the cash capital increase of the subsidiary, Chung Chiang Investment Co., Ltd.
6. Proposal to amend the Company’s Articles of Incorporation
7. Proposal for the full re-election of the Company’s directors and the removal of non-compete restrictions for newly elected directors
8. Nomination of candidates for the Company’s directors (including independent directors)
9. Proposal for convening the 2025 annual shareholders’ meeting
10. Professional fees for audits of financial reports by the CPAs in 2025
11. Remuneration payment for the 13rd Board of Directors
12. Application for credit facilities with financial institutions	None	None	Approved without amendment
May 12, 2025 (12th term, 16th meeting)	1. The consolidated financial report for Q1 of 2025
2. Proposal for distribution of earnings for Q1 of 2025
3. Application for credit facilities with financial institutions	None	None	Approved without amendment
June 9, 2025 (13rd term, 1st meeting)	1. Election of the 13rd chairman of the company
2. Appointment of members of the Company’s 6th Remuneration Committee
3. Appointment of members of the Company’s 2nd Sustainable Development Promotion Committee
4. Appointment of members of the Company’s second Risk Management Committee	None	None	Approved without amendment
August 11, 2025 (13rd term, 2nd meeting)	1. The consolidated financial report for Q2 of 2025
2. Proposal for distribution of earnings for Q2 of 2025
3. Application for credit facilities with financial institutions
4. The Company’s 2024 Annual Sustainability Report
5. Formulate the Company’s "Organizational Regulations of the Nomination Committee" and establish the "Nomination Committee"
6. Proposal to determine whether overdue accounts receivable from customer GENIUS COMPUTER TECHNOLOGY LTD beyond normal credit terms constitute funds lending	None	None	Approved without amendment

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Board of Directors	Proposal	Opinions of independent directors	Actions taken by KYE in response to the opinions of independent directors
	in nature.
November 11, 2025 (13rd term, 3rd meeting)	1. Proposal for change of company's CPA
2. The consolidated financial report for Q3 of 2025
3. Proposal for distribution of earnings for Q3 of 2025
4. Revision of the Company's “Sustainable Development Best Practice Principles.”	None	None	Approved without amendment
December 22, 2025 (13rd term, 4th meeting)	1. Amendments to the internal control system, implementation rules of internal audit, and administrative regulation
2. The 2026 audit plan
3. Review of the 2026 operational plan and revenue, profit and expense budget.
4. Proposal to amend the scope of rank-and-file employees as referred to in Article 25 of the Company's Articles of Incorporation.
5. Proposal to amend the title and certain provisions of the Company's "Rules for Board of Directors' Self-Evaluation or Peer Evaluation.
6. Proposal to determine whether overdue accounts receivable from customer PC ARTS ARGENTINA S.A. beyond normal credit terms constitute funds lending in nature.	None	None	Approved without amendment

(2) Matters other than the foregoing ones, for which the Board of Directors have adopted resolutions and for which objections or reservations have been expressed by the independent directors in records or written statements: None.

With respect to the recusal of any director with a stake in a proposal, the name of the director, the proposal, the reason for recusal and his/her participation in the voting must be specified: None.
Information including the cycle, period, scope, method and contents of self-evaluation (or peer evaluation) of the Board of Directors:

On March 26, 2020, the Board of Directors adopted the Regulations for Evaluation of the Performance Board of Directors to strengthen the operations and functions of the Board of Directors. Internal evaluation of the performance of the Board of Directors is conducted annually, and external evaluation of the performance of the Board of Directors is conducted by an external professional and independent organization or an external team of experts and academics at least every 3 years. The internal and external evaluations of the performance of the Board of Directors will be completed before the end of Q1 of the next year, and their results will be submitted to the Board of Directors for review and improvement.

Internal performance evaluation:

The internal evaluation of the performance of the Board of Directors and functional committees of our company in 2025 commenced in late November 2025 with the planning and distribution of evaluation questionnaires. All questionnaires were collected in the following month and subsequently compiled and analyzed during the same month. The evaluation results and improvement suggestions were submitted to the Board of Directors on December 22, 2025, and disclosed in accordance with the law on the company's website and the public information disclosure platform and were disclosed on the MOPS after the meeting as required by law. The evaluation results and recommendations for improvement are as follows:

(1) Board of Directors

The evaluation was divided into four aspects consisting of 24 indicators, with an average converted score of 93/100 and an overall operational rating of "Excellent." The current directors of KYE are professionals in the fields of electronics, science and technology, finance and accounting, legal affairs and commerce. They have sufficient understanding of the industry in which KYE is specialized, and can fully grasp the content of the agenda, with a high attendance rate at board meetings and excellent operational communication and interaction. It is able to effectively supervise the company's business performance and the development of implementation strategies, ensuring that the company continues to operate profitability.

Key recommendations for improvement: Formulation of a managerial succession plan.

(2) Directors

The evaluation was divided into six aspects consisting of 23 indicators, with an average converted score of 95/100 and an overall operational rating of "Excellent." All the directors possess sufficient expertise for performing their duties and are able to effectively supervise the operations of KYE's system and risk management. The directors have maintained good communication and interaction with the management, and the operations of the Board of Directors have been smooth.

Key recommendations for improvement: None.

(3) Remuneration Committee

The evaluation was divided into five parts consisting of 21 indicators, with an average converted score of 95/100 and an overall operational rating of "Excellent." The members of the Committee are independent and are professionals in the fields of industry, finance, accounting, legal affairs and commerce, and their attendance at meetings has been good. They are able to effectively review KYE's remuneration policies and conduct performance evaluation.

Key recommendations for improvement: None.

(4) Audit Committee

The evaluation was divided into five parts consisting of 22 indicators, with an average converted score of 96/100 and an overall operational rating of "Excellent." The members of the Committee are independent and are professionals in the fields of industry, finance, accounting, legal affairs and commerce, and their attendance at meetings has been good. They are able to effectively supervise KYE's risk management and business performance.

Key recommendations for improvement: None.

External Performance Evaluation

The Company's external performance evaluation of the Board of Directors for fiscal year 2025 was conducted by an external evaluation institution, the Taiwan Integrity & Accountability Business Association. The evaluation period commenced in December 2025 and was completed with the issuance of the evaluation report in February 2026. The expert evaluation team consisted of three executive committee members of the Association—Jian-Ran Lee, Chao-Sheng Chiang, and Ying-Ju Chen—who issued a declaration of independence in the evaluation report, stating that neither the executive committee members nor their spouses serve as directors of the Company or hold any positions that would have a direct and material impact on the evaluation results, and that no material interest relationships exist between them and the Company, the Company's management, or major shareholders that could affect their independence.

The evaluation methods included the distribution of questionnaires to all directors and the arrangement of video interviews with three directors, namely Chairman Shih-Kun Tso, Director Han-Liang Hu, and Director Wan-Ting Su.

The evaluation report assessed the effectiveness of the Board of Directors based on the following four major dimensions:

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(1) Professional functions of the Board of Directors (board composition and structure, appointment and continuing education of directors), with evaluation indicators including board diversity, directors' continuing education, and utilization of external resources;

(2) Decision-making effectiveness of the Board of Directors (degree of participation in Company operations and enhancement of board decision quality), with indicators including directors' participation in meetings, understanding of Company operations, risk management by directors, and adequacy of information supporting board decisions;

(3) The Board of Directors' emphasis on and supervision of internal control, with indicators including the establishment and implementation of codes of conduct for employees, supervision of internal audit and control mechanisms, effectiveness of whistleblowing channels, and disclosure and avoidance of conflicts of interest; and

(4) The Board of Directors' attitude toward sustainable development, with indicators including ESG information disclosure, talent development and succession planning, and initiatives related to sustainable operations.

The improvement recommendations included:

(1) Paying attention to board diversity and directors' shareholding ratios to strengthen board functions;

(2) Strengthening the recording of directors' statements in board meeting minutes;

(3) Enhancing diversity among members of the Risk Management Committee to strengthen the Company's risk control capabilities;

(4) Improving the whistleblowing system and channels; and

(5) Reviewing the appropriateness of performance evaluation standards and establishing a succession pipeline.

In response to the above recommendations, the Company will implement the following improvement plans:

(1) Beginning in fiscal year 2026, board meeting minutes will comprehensively record the discussion process, directors' statements, and opinions expressed;

(2) Professional managers will be included in the next term of the Risk Management Committee to enhance the Committee's ability to assess industry-specific and operational risks and strengthen risk management functions;

(3) The whistleblowing system and procedures will be reviewed, and reporting channels will be consolidated to enhance confidentiality protection; and

(4) The achievement of the Company's ESG indicators will be incorporated as a reference factor in board performance evaluations to enhance the Board's focus on corporate sustainability.

The results of the external performance evaluation of the Board of Directors and the improvement recommendations were submitted to the Board of Directors on March 6, 2026, and were disclosed in accordance with applicable laws and regulations on the Company's website and the Market Observation Post System (MOPS).

Goals of enhancement of the functions of the Board of Directors in the current and the most recent years (e.g., establishment of the Audit Committee, and improvement of information transparency), and the assessment of their implementation:

The Board of Directors of KYE has clear goals for its functions which have been strictly implemented. In 2022, it approved the establishment of the "Sustainable Development Promotion Committee" and the "Risk Management Committee" to assist KYE in corporate sustainable management and risk management. Furthermore, we have continued to improve information transparency.

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(II) Operations of the Audit Committee

In the most recent year, the Audit Committee held six meetings (A), and the attendance of independent directors in these meetings is as follows:

Title	Name	Actual number of meetings attended (B)	Actual rate of attendance (%) (B/A) (Note 1)	Remarks
Convenor (Note 2)	Wan-Ting Su	5	83	Re-elected for another term on June 9, 2025
Member	Hung-Tsu Hsu	6	100	Re-elected for another term on June 9, 2025
Member	Peng, Fang	4	100	Newly elected on June 9, 2025
Member	Anti Tsai	2	100	Dismissed upon the full re-election of the board on June 9, 2025.

Note 1: Calculated based on the number of meetings held during the term of office and the actual number of meetings attended.
Note 2: Following the re-election on June 9, 2025, Wan-Ting Su was elected as the convener of this Committee.

Other information required:

The work focus of the Audit Committee in 2025 included: Review and approval of the 2024 business report, parent company only only financial report and consolidated financial report, distribution of the remuneration for employees and directors in 2024, the consolidated report and distribution of earnings for each quarter of 2025, evaluation of the effectiveness of the internal control system; establishment or amendment of the internal control system, implementation rules of internal audit and administrative regulations; appointment or discharge of or the remuneration for CPAs; and communication with the chief internal auditor and CPAs.
Where any of the following applies to the operations of Audit Committee, the date and number of session of the relevant board of directors meeting, the proposal(s) for the meeting, opinions of independent directors opposing, retaining, or major suggestions, the relevant resolution of the Audit Committee and the actions taken by your company in response to the opinions of the Audit Committee must be specified:

(1)Matters set forth under Article 14-5 of the Securities and Exchange Act

Audit Committee	Proposal	Opinions of independent directors	Actions taken by KYE in response to the opinions of independent directors	Meeting Resolution
March 10, 2025 (2nd term, 15th meeting)	1. Report on the internal audit work from December 2024 to February 2025 2. Distribution of the remuneration for employees and directors in 2024 3. The results of self-assessment and the statement of internal control for 2024 4. The 2024 business report, parent company only only financial report and consolidated financial report 5. Distribution of earnings for 2024 6. Professional fees for CPAs in 2025	None	None	Approved without amendment
May 12, 2025 (2nd term, 16th meeting)	1. The consolidated financial report for Q1 of 2025	None	None	Approved without
	2. Distribution of earnings for 2025			amendment

Audit Committee	Proposal	Opinions of independent directors	Actions taken by KYE in response to the opinions of independent directors	Meeting Resolution
meeting)	2. Proposal for distribution of earnings for Q1 of 20253. Report on the internal audit work from March to April 2025			amendment
June 9, 2025(3nd term, 1st meeting)	1. Proposal to elect the convener of the third Audit Committee	None	None	Approved without amendment
August 11, 2025(3nd term, 2nd meeting)	1. The consolidated financial report for Q2 of 20252. Proposal for distribution of earnings for Q2 of 20253. Report on the internal audit work from May to July 20254. Proposal to establish the Company's "Organizational Charter of the Nomination Committee."5. Proposal to determine whether overdue accounts receivable from customer GENIUS COMPUTER TECHNOLOGY LTD beyond normal credit terms constitute funds lending in nature.	None	None	Approved without amendment
November 11, 2025(3nd term, 3rd meeting)	1. Proposal for change of company's CPA2. The consolidated financial report for Q3 of 2025.3. Proposal for distribution of earnings for Q3 of 2025.4. Report on the internal audit work from August to October 20255. Revision of the Company's " Sustainable Development Best Practice Principles "	None	None	Approved without amendment
December 22, 2025(3nd term, 4th meeting)	1. Proposal for change of company's CPA.2. Report on the internal audit work for November 20253. Amendments to the internal control system, implementation rules of internal audit, and administrative regulations4. The 2026 audit plan5. Review of the 2026 operational plan and revenue, profit and expense budget6. Proposal to amend the title and certain provisions of the Company's "Rules for Board of Directors' Self-Evaluation or Peer Evaluation."7. Proposal to determine whether overdue accounts receivable from customer PC ARTS ARGENTINA S.A. beyond normal credit terms constitute funds lending in nature.	None	None	Approved without amendment

(2)Matters other than the foregoing ones, which have not been approved by the Audit Committee but have been approved in resolutions by at least two-thirds of all directors: None.

With respect to the recusal of any independent director with a stake in a proposal, the name of the independent director, the proposal, the reason for recusal and his/her participation in the voting must be specified: None.

Communication between independent directors and the chief internal auditor and CPAs (such information must include the material matters, methods and results of communication regarding the financial and business conditions of KYE):

(1) At least two regular meetings among the independent directors and CPAs are called every year. The CPAs report the financial conditions of KYE, the financial conditions and overall operations of domestic and foreign subsidiaries and the status of internal audit to the independent directors, and adequately communicate whether there are any significant adjusting journal entries or impact on the account records due to the amendment of related laws. In the event of any material irregularity, they may hold a meeting at any time.

(2) The chief internal auditor and independent directors meet regularly to give reports on the implementation of audits and the operation of internal control, and to communicate and respond to the inquiries of independent directors in person, at least on a quarterly basis. All independent directors are promptly informed of the status of implementation of internal audits. In the event of any material irregularity, they may hold a meeting at any time or contact the chief auditor directly by phone for discussion.

Communication between independent directors and the chief internal auditor includes:

A. The chief internal auditor submits an audit report to each independent director on a monthly basis according to the annual audit plan.

B. The internal control deficiencies and improvement for any nonconformities in each audit report must be followed up, and a corresponding follow-up report must be prepared each quarter and submitted to each independent director.

C. When material misconduct or the likelihood of material damage to KYE has been discovered, a report must be immediately prepared, and the independent directors shall be notified in written form.

D. If there are any questions or instructions from the independent directors after reviewing the audit report, they may ask the audit officer or communicate the instructions to him/her for implementation via telephone.

(3) In conclusion, the independent directors are able to understand KYE's operations (including the financial and business status) and the performance of audit work through Board of Directors meetings and the audit reports regularly submitted by the auditing department, and have communicated on the implementation and effectiveness of the audit operation. In addition, the independent directors are also able to have good communication with the CPAs by means of meetings or other channels (e.g., telephone, fax or e-mail).

(4) Summary of communication between independent directors and CPAs in 2025

Date	Attendees	Subject of communication
March 10, 2025	Independent Director
Hung-Tsu Hsu
Independent Director Anti Tsai
CPA Mei Hui Wu
Assistant Vice President of Deloitte Taiwan Kai-Tang Chan
Chief Internal Auditor Yi-Chen Chen	1. The CPAs gave a report on the consolidated and parent company only only financial statements for 2024 audit scope and procedures, key audit matters, and audit conclusions	1. The independent directors unanimously approved the audit results of the consolidated and parent company only only financial statements for the year 2024 without any objections.

(5)Summary of communication between independent directors and the chief internal auditor in 2025

Date	Attendees	Subject of communication	Result of communication
March 10, 2025	Independent Director Hung-Tsu Hsu Independent Director Anti Tsai	1. Report on the internal audit work from December 2024 to February 20252. The results of self-assessment and the statement of internal control for 2024	1. Approved without objection or amendment2. Approved without objection or amendment
May 12, 2025	Independent Director Hung-Tsu Hsu Independent Director Wan-Ting Su Independent Director Peng, Fang	1. Report on the internal audit work from March to April 2025	1. Approved without objection or amendment
August 11, 2025	Independent Director Hung-Tsu Hsu Independent Director Wan-Ting Su Independent Director Anti Tsai	1. Report on the internal audit work from May to July 2025	1. Approved without objection or amendment
November 11, 2025	Independent Director Hung-Tsu Hsu Independent Director Wan-Ting Su Independent Director Peng, Fang	1. Report on the internal audit work from August to October 2025	1. Approved without objection or amendment
December 22, 2025	Independent Director Hung-Tsu Hsu Independent Director Wan-Ting Su Independent Director Peng, Fang	1. Report on the internal audit work for November 20252. Amendments to the internal control system, implementation rules of internal audit, and administrative regulations3. The 2026 audit plan	1. Approved without objection or amendment2. Approved without objection or amendment3. Approved without objection or amendment

(III) Implementation of corporate governance, differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences

Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
1. Does your company establish and disclose its corporate governance best-practice principles in accordance with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies?	✓		KYE has established the “Corporate Governance Best-Practice Principles” to establish a good corporate governance system and an effective corporate governance framework.	None.
2. The shareholding structure and shareholders’ equity of your company
(1) Does your company establish internal procedures for handling shareholders’ suggestions, questions, disputes, and lawsuits? Does your company follow such procedures?	✓		(1) KYE’s spokesperson and deputy spokesperson are responsible for handling shareholders’ suggestions, disputes and queries, and approaching the related divisions based on practical needs to actively deal with the matters related to the shareholders.	(1) None.
(2) Does your company keep a list of major shareholders actually controlling your company and the ultimate controllers of the major shareholders?	✓		(2) KYE has appointed personnel responsible for contacting the major corporate shareholders with a shareholding of more than 5% and their major shareholders.	(2) None.
(3) Has your company established and implemented a system for risk control and firewalls with its affiliates?	✓		(3) We have established the Regulations Governing Transactions with Related Parties, Specific Companies and Group Entities. In addition, the Board of Directors approved the “Rules Governing Financial and Business Matters Between this Corporation and its	(3) None.
			companies and their respective employees.

Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
(4) Has your company established internal regulations that prevent insiders from trading securities using non-public market information?	☑		Related Parties” on March 14, 2023 to regulate our transactions with related parties to prevent irregular transactions and improper transfer of benefits between related parties.
(4) We have established the “Ethical Corporate Management Best-Practice Principles,” “Code of Ethical Conduct for Directors and Managers” and “Procedures Governing the Prevention of Insider Trading” to prohibit insiders from acquiring information with their functions to obtain improper gains.	(4) None.
3. Composition and responsibilities of the board of directors
(1) Has the Board of Directors established a diversity policy and specific goals of management? Have such policy and goals been implemented?	☑		(1) According to the policy on the diversity of members of the Board of Directors adopted by the Board of Directors, when electing directors (including independent directors), we not only consider the professional backgrounds of the directors (including independent directors) themselves, but also formulates an appropriate diversity policy according to the needs of our operations and development. Including but not limited to the following two major aspects: (1) Basic requirements and values : gender, age, nationality, culture, etc. (2) Professional	(1) None.

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
			knowledge and skills : professional background (legal, accounting, industry, finance, marketing, or technology), professional skills and industry experience .At present, the diversity target of the board of directors is to have at least one female director among the director seats, and the number of directors concurrently serving as company executives shall not exceed one-third of the director seats, and they should have at least three years of experience as an executive director (including independent directors) or in senior management positions, or hold professional qualifications. The current Board of Directors is composed of eight directors ,including six men and two women. Among them, one serves concurrently as a company executive. There are three independent directors, accounting for 37.5% of the total number of directors. Among them, one independent director has served for more than nine years, one has served between three and six years, and one has served for less than three years. Regarding age distribution, one director is between 70 and 79 years old, four directors are between 60 and 69, one director

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
(2) Has your company, apart from establishing a remuneration committee and an audit committee, voluntarily set up any other functional committee?	☑		is between 50 and 59, one director is between 40 and 49, and one director is between 30 and 39. Six directors boast over 10 years of experience as executive directors (including independent directors) or in senior management roles, and two directors hold CPA certificates. They possess professional backgrounds and skills spanning management, technology, finance and accounting, R&D, and marketing. All members have met the criteria and possess the competencies necessary for their roles. When the board of directors underwent a complete re-election in the year 2022, the company achieved its specific management goals for board diversity at the current stage.

(2) In November 2022, the Board of Directors approved the establishment of the “Sustainable Development Promotion Committee” and the “Risk Management Committee” to assist KYE in corporate sustainable management and risk management. Additionally, to enhance supervisory functions and strengthen management capabilities, the company plans to establish a nomination committee in August | (2) None. |

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
(3) Has your company established regulations and methods for evaluation of the performance of the board of directors? Does your company conduct such performance evaluation on a regular basis each year? Are the results of such performance evaluation submitted to the board of directors and used as reference for the remuneration for individual directors and for their nomination or re-election?	☑		2025 in accordance with the relevant provisions of the KYE Corporate Governance Practice Code, which is composed of three independent directors, one of whom was elected as the convener and chair of committee meetings. This committee will recommend a list of director candidates to the board of directors.

(3) The Board of Directors has performed clear functions and goals with scrutiny. KYE has established the “Regulations for Performance Evaluation of the Board of Directors” pursuant to the law in March 2020, and has conducted regular performance evaluations every year and reported the results to the Board of Directors as the reference for the remuneration for individual directors and the nomination of individual directors for re-election. | (3) None. |
| (4) Does your company assess the independence of CPAs on a regular basis? | ☑ | | (4) Each year, KYE Audit Committee assesses the independence and competence of the CPAs. Besides requiring the CPAs to provide a Declaration of Independence and Audit Quality Indicators (AQIs), the evaluation is conducted according to standard footnote 1 and 13 AQI indicators. | (4) None. |

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
			After confirmation, the CPAs and the company have no other financial interests or business relationships apart from fees for visa and tax matters. The CPAs’ family members also do not violate independence requirements. Additionally, referencing AQI indicators, it is confirmed that both CPA and CPA firm have audit experience and training hours superior to or equivalent to industry averages. Furthermore, over the past three years, they have continuously adopted digital audit tools to enhance audit quality. The assessment results for the most recent fiscal year have been discussed and approved by the Audit Committee on March 6, 2026, and subsequently reported to the Board of Directors for approval of the assessment of the CPAs’ independence and competence of the accountants on the same day.
4. Does your company appoint an appropriate number of competent corporate governance officers and designate a chief corporate governance officer to be in charge of corporate governance affairs (including but not limited to providing the information required for directors or supervisors to perform their duties,	✓		Pursuant to the resolution adopted by the Board of Directors on March 25, 2021, KYE has appointed Vice President An-Min Kao of the Finance & Accounting Division as the chief corporate governance officer in charge of matters related to corporate governance. His main responsibilities include providing the Board of Directors and functional committees with information	None.

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Item assessed	Implementation
	Yes	No	Summary
assisting directors or supervisors in compliance, managing affairs for board of directors meetings and shareholders’ meetings as required by law, and preparing minutes for board of directors meetings and shareholders’ meetings)?			required for their business, assisting directors and committee members in compliance and convening meetings in accordance with the law. In 2025, he performed the following duties:
(1) Informing, from time to time, the Board of Directors and members of functional committees of the latest revisions and development of the laws and regulations related to KYE’s scope of business and corporate governance.
(2) Examining the confidentiality level of the relevant information, providing directors and committee members with the company information they need, and maintaining smooth communication and interaction between directors, committee members and business managers.
(3) Checking whether the shareholders’ meeting and meetings of the Board of Directors and functional committees were convened in accordance with the applicable laws and the rules and regulations on corporate governance.
(4) Assisting directors and committee members in compliance with and reminding them of the laws and regulations they are required to abide by when conducting business or adopting resolutions at meetings.
(5) Reviewing and checking the material information

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Item assessed	Implementation
	Yes	No	Summary
			in important resolutions before its publication to ensure the contents of such information are legal and accurate and maintain symmetry of information between investors.
(6)Maintaining good interaction with investors to ensure that shareholders are able to obtain sufficient information to assess the reasonable value of a business in the capital market.
(7)Setting and giving a 7-day prior notice to directors and committee members of the agenda of the meetings of the Board of Directors and functional committees, convening meetings and providing meeting information, giving prior notice of issues requiring avoidance of conflicts of interest, and completing the meeting minutes within 20 days after the end of meetings.
(8)Registering the date of any shareholders’ meeting in advance as required by law, preparing a meeting notice, a meeting handbook and meeting minutes within the legally required period, and applying for registration of change in the event of amendment to the Articles of Incorporation or by-election of directors.
(9)Conducting evaluations of the performance of the Board of Directors and functional committees and the internal/external evaluation of the performance

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Item assessed	Implementation
	Yes	No	Summary
			of the Board of Directors in 2025.
(10)Managing matters concerning directors’ training and communicating information of relevant external training courses on a regular basis to help directors implement the mechanism for diversified training. In 2025, all directors continued to attend training courses in accordance with the “Directions for the Implementation of Continuing Education for Directors and Supervisors of TWSE Listed and TPEx Listed Companies,” with an achievement rate of 100%.
In 2025, the chief corporate governance officer completed the legally required training hours of 12 hours and made disclosure thereof on KYE’s website and in its annual report.
5. Does your company establish channels of communication with stakeholders (including but not limited to shareholders, employees, customers and suppliers)? Does your company create a section for stakeholders on its website and give proper responses regarding important issues of corporate social responsibility that concern stakeholders?	✓		KYE has set up the sections of “Stakeholder,” “Contact Us” and “Service Center” on the official website as the communication channels for shareholders, employees, customers, and suppliers. In the section of “Stakeholder,” the contact numbers and websites of KYE’s spokesperson and the manager of the Finance and Accounting Division are provided for KYE to promptly receive and properly respond to the stakeholders’ concerns on important issues.
Starting from 2025, employee satisfaction surveys are	None.

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Item assessed	Implementation
	Yes	No	Summary
			conducted on an annual basis. The second round of the survey was conducted in the first quarter of 2026 to collect feedback on employees’ satisfaction in the preceding year. The survey covered key dimensions including work environment, compensation and benefits, job content, management and leadership, and corporate culture and sense of belonging. The survey scope was broad and the data was representative, aiming to gain in-depth understanding of employees’ actual perceptions of the Company’s systems and workplace environment, serving as an important reference for future management improvement and enhancement of employee well-being.
The survey targeted all employees at the Taipei operation site. A total of 50 questionnaires were distributed, with a coverage rate of 88% and a response rate of 82%, demonstrating a high level of employee attention and participation. According to the survey results, the overall satisfaction level was 74%, which falls within a moderate and acceptable range.
This reflects employees’ generally positive views toward the Company’s operations and workplace atmosphere, while also indicating room for improvement in certain systems and communication aspects.
In response to the feedback received, the Company

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
			will conduct in-depth analysis and implement the following improvement measures: (1) distributing all employee remuneration to rank-and-file employees in a manner exceeding statutory and charter requirements; (2) increasing employee association activities, such as promoting various sports and related courses, to enhance employees’ physical and mental well-being; and (3) organizing employee forums where senior management engages in face-to-face communication with employees and listens to their opinions.
6. Does your company engage any professional shareholder services agent to manage affairs for shareholders’ meetings?	☑		KYE has engaged a professional shareholder services agent, the Shareholder Services Department of Mega Securities Co., Ltd., to manage affairs for shareholders’ meetings.	None.
7. Information disclosure
(1) Does your company set up a website to disclose financial, business and corporate governance information?
(2) Does your company use other means to disclose information (e.g. setting up an English website, assigning specialized personnel to collect and disclose corporate information, implementing a spokesperson system, uploading the proceedings of investor conferences to	☑
☑		(1)KYE has set up a website to disclose information regarding financial business and regulations related to corporate governance.
(2)In addition to setting up Chinese and English websites, KYE has also assigned a spokesman and acting spokesman to collect and disclose KYE’s information to implement the spokesman system, and posted the information of four investor conferences held in 2025 on the website of KYE.	(1) None.
(2) None.

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
your company’s website)?
(3) Does your company publish and submit an annual financial report within two months after the end of each fiscal year?
Does your company publish and submit financial reports of the first, second and third quarters and the monthly status of operations before the required deadline?		☑	(3)KYE publishes and submits an annual financial report (within 3 months), the financial reports of the first, second, and third quarters (within 45 days) and the monthly status of operations (by the 10th day of each month) within the deadline specified in Article 36 of the Securities and Exchange Act.	(3) Under planning.
8. Does your company have other important information useful for understanding the status of corporate governance of your company (including but not limited to employees’ rights, employee care, investor relations, supplier relationship, stakeholders’ rights, continuing training of directors and supervisors, implementation of risk management policies and risk measurement standards, implementation of customer policies, and purchase of liability insurance for directors and supervisors by your company)?	☑		(1)For measures regarding the interests and care of employees, please see pages 104-112 of this annual report.
(2)KYE has appointed a spokesperson and acting spokesperson to deal with the suggestions made via phone or KYE’s website by shareholders and stakeholders for communication and opinion exchange. The purchasing department of KYE maintains good relationships with suppliers, which is beneficial to making a timely response to supply and demand changes in the market.
(3)KYE has formulated a continuing training system for the directors to be subject to and evaluated. KYE also provides related courses and information on an irregular basis for the purpose of encouraging the directors to participate in such activities, so as to minimize and spread the risk of causing major damage to KYE and shareholders	None.

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Item assessed	Implementation
	Yes	No	Summary
			due to directors’ mistakes or misconduct. In 2025, all directors completed the required training hours.
(4)KYE adheres to its internal control systems and related regulations to implement risk management. In 2025, the internal audit team completed all audit works, and the results thereof showed that the design and implementation of the internal control system were effective.
(5)KYE understands customers’ expectations of KYE and products through the establishment of customer service centers, phone interviews, official websites, and media in the hope of having the products and services meet the customers’ needs.
(6)KYE has purchased liability insurance for directors to minimize the risk of them being charged for their due performance of duties by shareholders or other related parties.

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Item assessed	Implementation			Differences with the Corporate Governance Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
9. Please specify the result of corporate governance evaluation released by the Corporate Governance Center of the Taiwan Stock Exchange in the most recent year has described the matters improved and specified the priorities and measures for improvement with respect to matters not yet improved. The result of the 2024 corporate governance evaluation for KYE showed that among the indicators of the four aspects, further improvement is needed to advance sustainable development at KYE, while fulfilling most of the other indicators concerning the protection of shareholders' interests, equal treatment of shareholders, strengthening of the structure and operations of the Board of Directors, and improvement of information transparency. The overall score was 100.30, an improvement from 90.62 in 2023. The ranking range also increased from 21%-35% in 2023 to 6%-20% in 2024. The indicators that have not yet been met will be gradually reviewed and improved under the plans of the Sustainable Development Promotion Committee and working groups.

NOTE 1:

	Yes	No
1. CPAs have no direct or significant indirect financial interests with the company.	V
2. CPAs have no inappropriate financial interests with the company.	V
3. Within the first two years of practice, financial statements of service organizations cannot be audited and certified.	V
4. There shall be no financial borrowing or lending affairs with the company.	V
5. There shall be no shared investment or shared interests with the company.	V
6. No concurrent regular employment with the company is permitted, nor receiving fixed salary.	V
7. No commissions related to business activities are allowed.	V
8. Whether the tenure of the signing accountant exceeds seven consecutive years.	V
9. CPAs have no close business relationship with the company.	V
10. CPAs have no potential employment relationship with the company.	V

(IV) Composition and operations of the Remuneration Committee

The Remuneration Committee consists of three members appointed by a resolution of the Board of Directors, with one of the members as the convener. The Committee members' professional qualifications and independence are in accordance with Article 5 and Article 6 of the Regulations Governing the Powers of the Remuneration Committee.
The Committee shall faithfully exercise the following duties with the due care of a good administrator and submit the suggestions to the Board of Directors for discussion:

(1) Periodically review the organization rules and propose amendments.

(2) Set up and periodically review the yearly and long-term performance goal of the directors and managers of KYE, and the policy, system, standards, and structure of the remuneration.

(3) Periodically evaluate the performance of KYE’s directors and managers and the goals achieved thereby, and determine the contents and amounts of the individual remuneration thereof.

When performing the above duties, the Committee shall comply with the following principles:

(1) The Committee shall ensure the arrangement of the remuneration meets the requirement of relevant laws and regulations and is good enough to attract the best talents.

(2) The performance evaluation and remuneration for directors and managers shall be in reference to industry peer levels and take certain factors into account, such as the time devoted by the individual, the responsibility assumed, the goal achieved by the individual, the performance of the individual when assuming other positions, and the remuneration paid by KYE for equivalent positions in recent years. Also to be evaluated is the reasonableness of the correlation between the individual’s performance and KYE’s operational performance and future risks, with respect to the achievement of short-term and long-term goals and the financial conditions of KYE.

(3) Directors and managers shall not be allowed to engage in any behavior beyond the scope of risks of KYE for the purpose of pursuing remuneration.

(4) With respect to the proportion in which the bonus is distributed to directors and senior managers for their short-term performance and the time at which the variable part of remuneration is paid, KYE shall consider the characteristic of the industry and the business nature to decide such matters.

(5) The Committee members shall not join the discussion and voting on any resolution of their remuneration.

The remuneration mentioned above includes the cash remuneration, stock options, dividends, retirement benefits, severance pay, various allowances, and other tangible incentives. The scope must be aligned with the remuneration for directors and managers as stipulated in the Regulations Governing Information to be Published in Annual Reports of Public Companies.
Where the decision-making and implementation of any matter related to the remuneration of the directors and managers of a subsidiary of KYE shall be reviewed and approved by the Board of Directors, the Committee is required to make recommendations before the matter is submitted to the Board of Directors for discussion.

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April 19, 2026

Information of members of the Remuneration Committee

Position	Criteria Name	Professional qualifications and experience	Independence
Independent director	Hung-Tsu Hsu	1. The Remuneration Committee is composed of all three independent directors. For the professional qualifications and experience of the members, see pages 7–8 of this annual report. 2. The requirements under Article 5 of the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange” have been met. 3. None of the circumstances under Article 30 of the Company Act applies.	The members of the Remuneration Committee have met the following requirements: 1. The requirements under Article 14-6 of the Securities and Exchange Act and Subparagraphs 1 to 9, Paragraph 1, Article 6 and Articles 7 to 13-1 of the “Regulations Governing the Appointment and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Taiwan Stock Exchange or the Taipei Exchange,” promulgated by the Financial Supervisory Commission, have been met. 2. None of the three members of the Remuneration Committee (personally or through a nominee), their spouses or minor children holds any share of KYE. 3. None of the three members of the Remuneration Committee has received any amount of remuneration for provision of business, legal, financial and accounting services to KYE or any of its affiliates within the most recent two years.
Independent director	Wan-Ting Su
Independent director	Peng, Fang

Information of operations of the Remuneration Committee

(1) The Remuneration Committee of KYE consists of three members.
(2) Term of the current members: June 9, 2025 to June 8, 2028. In the most recent year, the Remuneration Committee held four meetings (A), and the qualifications of the members and their attendance at these meetings are as follows:

Title	Name	Actual number of meetings attended (B)	Actual rate of attendance (%) (B/A) (Note 1)	Remarks
Convener (Note 2)	Wan-Ting Su	3	75	Re-elected for another term on June 9, 2025
Committee member	Hung-Tsu Hsu	4	100	Re-elected for another term on June 9, 2025
Committee member	Peng, Fang	3	100	Newly elected on June 9, 2025
Committee member	Anti Tsai	1	100	Dismissed upon the full re-election of the board on June 9, 2025.

Note 1: Calculated based on the number of meetings held during the term of office and the actual number of meetings attended.

Note 2: Following the re-election on June 9, 2025, Wan-Ting Su was elected as the convener of this Committee.

Other information required:

Meetings in the most recent year:

Remuneration Committee	Proposal	Resolution	Actions taken by KYE in response to the opinions of the Remuneration Committee
March 10, 2025 (5th term, 11th meeting)	1. The remuneration for employees and directors in 2024.
2. Remuneration payment for the 13rd Board of Directors.	The resolution was passed by all attending members	Submitted to the Board of Directors and approved by all attending directors
June 9, 2025 (6th term, 1st meeting)	1. Proposal to elect the convener of the 6th Remuneration Committee.	The resolution was passed by all attending members	Submitted to the Board of Directors and approved by all attending directors
August 11, 2025 (6th term, 2nd meeting)	1. Proposal for adjustment to the remuneration for managers in 2025.	The resolution was passed by all attending members	Submitted to the Board of Directors and approved by all attending directors
December 22, 2025 (6th term, 3rd meeting)	1. Proposal for the Company's "The remuneration for managers for fiscal year 2025"
2. The remuneration for managers in 2025
3. The year-end bonus for 2025
4. The remuneration for employees and directors in 2025	The resolution was passed by all attending members	Submitted to the Board of Directors and approved by all attending directors

Where the board of directors has declined to adopt or amend the suggestions of the Remuneration Committee, the date and number of session of the relevant board of directors meeting, the proposal(s) for the meeting, the relevant resolution of the board of directors and the actions taken by your company in response to the opinions of the Remuneration Committee must be specified (if the remuneration approved by the board of directors is higher than that suggested by the Remuneration Committee, the difference and its reason must be specified): None.
Where members of the Remuneration Committee have expressed objections or reservations in records or written statements to any matter subject to a resolution of the Remuneration Committee, the date and number of session of the relevant Remuneration Committee meeting, the proposal(s) for the meeting, the opinions of all members and the actions taken in response to the opinions of the members must be specified: None.

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(V) Information on the Members and Operations of the Nomination Committee

In order to strengthen the functions of the Board of Directors and enhance the Company's management mechanisms, the Company resolved at a meeting of the Board of Directors held on August 11, 2025 to establish a Nomination Committee. The Committee is composed of three independent directors. Authorized by the Board of Directors, the Committee shall perform the following duties with the due care of a good administrator and faithfully fulfill its functions, and shall submit its recommendations to the Board of Directors for discussion:

(1) Nominate candidates for directors of the Company and review the qualifications of such candidates;
(2) Regularly review whether independent directors continue to meet the qualification requirements and independence criteria during their terms of office; and
(3) Handle other matters assigned by the Board of Directors.

Term of office of the members of the current Committee: from August 11, 2025 to June 8, 2028. The Nomination Committee convened two meetings (A) in the most recent year. Information regarding the qualifications and attendance of the Committee members is set forth below.

Title	Name	Actual number of meetings attended (B)	Actual rate of attendance (%) (B/A)	Remarks
Convener (Note 1)	Peng, Fang	2	100	Newly elected on August 11, 2025
Committee member	Hung-Tsu Hsu	2	100	Newly elected on August 11, 2025
Committee member	Wan-Ting Su	2	100	Newly elected on August 11, 2025

Other information required:

Meetings in the most recent year:

Nomination Committee	Proposal	Resolution	Actions taken by KYE in response to the opinions of the Remuneration Committee
August 11, 2025 (1st term, 1st meeting)	1. Proposal to elect the convener of the 1st Remuneration Committee.	The resolution was passed by all attending members	-
December 22, 2025 (1st term, 2nd meeting)	1. Proposal to review the ongoing qualifications and independence of the Company’s independent directors.	The resolution was passed by all attending members	-

(VI) Promotion of sustainable development, differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences

Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
1. Does your company establish a governance framework to promote sustainable development? Does your company establish a specialized (or designate an existing) department to promote sustainable development, which the senior management is authorized by the board of directors to manage under the supervision of the board of directors?	✓		In 2022, the Board of Directors approved, by a resolution, the establishment of the “Sustainable Development Promotion Committee” as the highest governance body for the promotion of sustainable development. The committee consists of three independent directors, one of which serves as its chairperson and convener. The committee consists of a CEO (the President), an executive secretary (the chief corporate governance officer) and three working groups on corporate governance, environmental sustainability and social co-prosperity, headed by the managers of the relevant departments, who are responsible for directing members of the groups to handle and conduct activities related to the identification of stakeholders, identification of issues of concern, engagement, selection of material issues and setting of performance indicators for all aspects of sustainable development. The committee identifies sustainability issues relevant to the company's operations and stakeholders' concerns through each meeting and specialized task forces established according to specific topics. It formulates corresponding strategies and operational guidelines, plans and executes annual initiatives, and tracks the implementation outcomes to ensure the integration of sustainability strategies into the company's daily operations. The Sustainability	None.
			of the TWSE/TPEx system is the main purpose of the committee's work. The committee is responsible for the implementation of the “Sustainable Development Promotion Committee” as the highest governance body for the promotion of sustainable development. The committee conducts the TWSE/TPEx and the TWSE/TPEx members of the TWSE/TPEx system. The committee conducts the TWSE/TPEx and the TWSE/TPEx members of the Board of Directors for the implementation of the “Sustainable Development Promotion Committee” as the highest governance body for the promotion of sustainable development. The committee conducts the TWSE/TPEx and the Board of Directors for the implementation of the “Sustainable Development Promotion Committee” as the highest governance bodies for the promotion of sustainable development. The committee conducts the TWSE/TPEx and the Board of Directors for the implementation of the “Sustainable Development Promotion Committee” as the highest governance bodies for the promotion of sustainable development. The committee conducts the TWSE/TPEx and the Board of Directors for the implementation of the “Sustainable Development Promotion Committee” as the 2022 TWSE/TPEx

Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
			Promotion Committee reports to the Board of Directors semi-annually on the implementation outcomes of sustainability initiatives and future work plans. The Board of Directors reviews the feasibility of proposed company strategies and plans put forth by the committee and management, and regularly monitors the progress of these strategies, providing adjustment recommendations as needed. In 2025, a total of three meetings were convened on May 12th, June 9th, August 11th, and December 22nd, with agenda items including: (1) drove the execution of sustainable development initiatives; identified significant sustainability issues and formulated corresponding action plans; (2) reviewed the 2024 sustainability report; (3) oversaw the implementation of sustainable business projects and assessed their execution status; planned the key focuses of sustainability development work for 2026;(4)Proposal to elect the convener and chair of the 2nd Development Promotion Committee. Proposals from each meeting were submitted to the board of directors for reporting or discussion on the same day after the meeting.
2. Does your company conduct any risk assessment regarding environmental, social and corporate governance issues related to your company’s operations according to the materiality principle? Does your company establish any relevant risk	☑		(1) The disclosed information covers the company's sustainable development performance at major locations from January 2025 to December 2025. The risk assessment boundary is primarily focused on the company itself. However, based on the relevance to core business operations and the impact on significant topics, the subsidiary Dongguan Kunying is also included within the	None.

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Item promoted	Implementation
	Yes	No	Summary
management policy or strategy?			scope.
(2) The Sustainable Development Promotion Committee conducts analysis based on the materiality principles of the sustainability report, communicates with internal and external stakeholders, and integrates assessment data from various departments and subsidiaries to evaluate significant ESG issues. It then establishes effective risk management policies for identifying, measuring, evaluating, monitoring, and controlling risks, and adopts concrete action plans to mitigate the impact of relevant risks.
(3) Based on the risk assessment, the following relevant risk management policies or strategies are formulated:

Risk Category
Risk Description
Management Strategy

Sustainable Environment
The deployment of sustainability-related issues
The short-term strategy is to develop sustainable concept products.
The long-term strategy is to continuously monitor the threats and opportunities posed to the company by net zero carbon emission risks, and then implement relevant response measures.

The increase in greenhouse gas
Gradually replace equipment with lower energy | | |

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Item promoted	Implementation
	Yes	No	Summary
			emissions	efficiency; adopt energy-saving devices and activate power-saving mode.
• Unnecessary paper documents are stored electronically to reduce paper usage.
• Encourage employees to bring their own eco-friendly tableware and refrain from using disposable plastic utensils or bamboo chopsticks.
			Improper waste disposal/low recycling rate	• Products are produced using recyclable materials whenever possible.
• Select recyclable materials for product packaging to reduce the use of non-recyclable plastics.
• Raise employees' environmental awareness and ensure proper implementation of waste sorting and resource recycling.
			Power shortage	• To ensure uninterrupted

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Item promoted	Implementation
	Yes	No	Summary
					company operations, the company has emergency generators.
			Employees	Human resources and management successors	● As a medium- to long-term risk, the company will continue to focus on operational growth to enhance retention competitiveness, and management will formulate talent recruitment, development, selection, retention, and succession plans.
				Occupational accident occurs	● Provide occupational health and safety education to train new employees.
● Encourage employees diagnosed with COVID-19 or at high risk to work from home or take leave during special epidemic periods.
			Operational performance	Integrity-related operational risks	● Request all directors and managers to sign the Code of Conduct statement, and new employees to sign the employment commitment letter.

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Item promoted	Implementation
	Yes	No	Summary
					• Request suppliers and customers to jointly adhere to integrity regulations, if necessary, to be stipulated in contracts.
				The transparency of information disclosure is insufficient	• According to competent authority requirements, information is disclosed on the Market Observation Post System, and updates are provided on the company's website and annual report for investors' reference.
• Announce financial and operational information within the prescribed deadline.
• Propose gradually advancing the announcement of interim financial information to facilitate investors in obtaining more timely information.
				Difficulty in transformation and decline in market competitiveness	• Maintain good cooperative relationships with suppliers to reduce procurement costs.
• Properly address and handle customer issues to increase

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Item promoted	Implementation
	Yes	No	Summary
					customer repurchase rate.
● Grasp market trends to develop new features, energy-saving, and green products.
				Supply chain and inventory management	● Maintain good cooperative relationships with suppliers, enhance their cooperation, and flexibly adjust inventory in response to product market conditions and supply chain demand.
● Seek new suppliers as necessary and strengthen cooperation to reduce development time and lower supply chain costs.
● Effectively manage inventory through the division of in-house and outsourced production, as well as collaboration in both independent research and cooperative research.
				Economic recession, interest rate, and exchange rate	● Allocate resources to develop new applications and target market users for the product.

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Item promoted	Implementation
	Yes	No	Summary
				fluctuations	• Develop product sales, research and development, and marketing strategies, strengthen cooperation with suppliers, and utilize external resources to respond accordingly.
• The USD is the invoicing currency for both purchases and sales of our company. The finance department is responsible for monitoring exchange rate fluctuations and adjusting funds as needed.
• The company's debt-to-total-assets ratio is relatively low, and the cost of funds is not significant. However, the finance department also closely monitors changes in interest rates and adjusts financial asset allocation as necessary to maximize returns on capital.
				Inflation	• Inflation has prompted the Federal Reserve System to

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Item promoted	Implementation
	Yes	No	Summary
				implement interest rate hikes, leading KYE Group to plan appropriate positions in USD-denominated assets. In the environment of interest rate increases and USD appreciation, the group generate significant exchange gains and interest income, thereby mitigating the direct impact of inflation on the company.
● While the direct impact of inflation on KYE within the domestic market was limited, our clients in Central and South America experienced severe inflation due to USD appreciation and depreciation of local currency. This led to economic downturns and decreased purchasing power in these countries, and possibly result in decrease in revenue from Central and South American clients for our company indirectly. As

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Implementation
Yes	No	Summary
				inflation is a macroeconomic factor beyond the control of individual businesses, we will strive to explore opportunities with clients in other regions to achieve risk diversification.
			Geopolitical conflict	The sales performance of our company's products in certain regions continues to be impacted by geopolitical conflicts such as the Russia-Ukraine war, leading to a significant decline. As a result, we need to devise strategies to explore markets in other regions to diversify the risks arising from geopolitical conflicts.
			Policy and regulatory changes	Our legal and financial personnel possess ample professional knowledge, staying abreast of regulatory changes at all times. They closely collaborate with law firms, accounting firms, and other professional consulting advisors, enabling the company to promptly adjust its policies

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Item promoted	Implementation
	Yes	No	Summary
					and responses to regulatory changes.
				Compliance and contract risks	• Regularly review regulatory amendments and conduct compliance assessments to ensure that the company's operations comply with relevant laws and regulations.
• We have established a comprehensive contract review process and ensure that all contracts are reviewed by authorized personnel.
• Strengthening the cultivation of compliance talent.
• The members of the Board of Directors and senior executives attach great importance to compliance principles and convey them to frontline employees.
				Information security	• Gradually update or replace software and hardware within the company's capabilities to enhance information security.

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Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
3. Environmental issues

(1) Does your company create an appropriate environmental management system based on the industrial characteristics of your company? | ☑ | | The following are the main points of KYE’s implementation plans and performance regarding environmental protection:

(1) KYE and the Dongguan factory have established various environmental management objectives, such as air pollution, water pollution, and waste pollution, along with management procedures for environmental safety and health operations, energy resource management, waste management, and hazardous substance-free management, in accordance with local regulations and the ISO 14001 Environmental Management System. In 2025, a total of four environmental management projects were completed. For pollution prevention, exhaust gas treatment facilities were installed on production lines, with exhaust gases undergoing dual activated carbon filtration to prevent environmental pollution. Each year, an environmental testing company is commissioned to conduct exhaust gas testing to ensure emissions comply with local regulatory requirements. In terms of energy and resource conservation, we strengthened energy-saving management, and promotion by formulating and implementing energy-saving plans and technical measures, installing energy-saving devices, and selecting energy-efficient lighting equipment that meets energy efficiency standards to save and reduce | (1) None. |

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Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
(2) Is your company committed to achieving more efficient use of energy and using renewable	✓		energy consumption. For waste management, we conducted waste reduction activities, reduced paper usage, recycled single-sided paper, and reused garbage bags from suppliers to reduce the amount of non-recyclable waste and increase waste utilization rates. Regarding water pollution management, we prioritized the use of water-saving equipment and regularly monitored water quality and usage to improve water resource utilization efficiency, including using reclaimed water from drinking fountains for watering plants and floor cleaning. KYE obtained ISO 14001 Environmental Management System certification in November 1996. Following the environmental management policy of "Preventing Global Warming," "Protecting Natural Resources," and "Reducing Hazardous Substance Risks," we pursue sustainable environmental management and set short- and medium-term performance indicators for environmental management, including "Managing CO2 Emissions," "Reducing Waste Volume," and "Green Procurement." The latest certificate is valid from October 18, 2025 to October 17, 2028.

(2) In consideration of the environmental impact from each stage of the life cycle, the products of KYE are designed with the purpose of material reduction and | (2) None. |

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Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
materials with low impact on environmental burdens?			energy efficiency improvement. KYE also adheres to the principle of reliable product quality and utilize renewable materials to mitigate the impact on the environment.
(3) Does your company assess the present and future potential risks and opportunities arising from climate change for your company? Does your company take any measures in response?	☑		(3) The Sustainable Development Promotion Committee is our highest organization for climate change management. It reviews our strategic goals for climate change, manages actions related to climate change risks and opportunities, reviews the status of implementation and discusses future plans, and reports to the Board of Directors on an annual basis. With reference to International Financial Reporting Standard S2 (IFRS S2), we assess the risks and opportunities of climate change to KYE, and review and update the relevant information on an annual basis. We plan to disclose a detailed description of the analysis of our climate change risks and opportunities in the Company’s sustainability report.	(3) None.
(4) Does your company make statistics of the greenhouse gas emissions, water usage and total weight of waste over the previous two years? Does your company establish policies for greenhouse gas reduction, reduction of water	☑		(4) KYE manages and monitors greenhouse gas, electricity consumption, water consumption and waste through the Sustainable Development Promotion Committee. KYE also regularly reviews the operation of the system and the achievements of objectives to ensure continued improvement of environmental management.	(4) None.

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Item promoted	Implementation	Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
Yes	No	Summary
usage or management other waste?

Direct emission (Scope 1)	Indirect emission (Scope 2)	Total emission equivalent
2023	33.0854	636.4997
2024	40.5004	374.1681
2025	33.6330	347.1332
In 2025, KYE's total greenhouse gas emissions were 380.7662 metric tons of CO2e per year, a reduction of 8.18% compared to 2024, achieving

Item promoted	Implementation
	Yes	No	Summary
			the target of reducing annual emissions by more than 1% set for 2025. The primary reasons for this reduction were the promotion and implementation of energy-saving policies and the optimization of production processes.
Categorized by emission scope, greenhouse gas emissions of Scope 1 (direct energy use) were 33.6330 metric tons of CO_{2e} per year, accounting for 8.83% of the overall emissions. Greenhouse gas emissions of Scope 2 (indirect energy use) were 347.1332 metric tons of CO_{2e} per year, accounting for 91.17% of the overall emissions.
The primary source of the company’s greenhouse gas emissions is the indirect use of energy (purchased electricity) under Scope 2. To effectively improve energy use efficiency and reduce greenhouse gas emissions, the company formulates energy-saving and greenhouse gas reduction action plans annually.
B. KYE has long been concerned with the issues of water resources, particularly the increasing scarcity of water resources. The Company has established a water management policy and reduction targets, aiming for an average annual reduction of 1%, and to achieve an 8% reduction in water consumption

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Item promoted	Implementation
	Yes	No	Summary
			by 2030 compared with the baseline year of 2022. It does not use water resources in the production process, while its water consumption mainly comes from the general use of water by employees. To effectively manage water consumption, KYE has implemented the following plans:
(A) Evaluating water use efficiency and installing water-saving equipment
(B) Appointing dedicated personnel to check the water facilities on a daily basis, and conduct maintenance in a timely manner if any failure is found
(C) Warnings, slogans and labels for the promotion of water conservation
(D) Continuing to promote the circular economy, the Dongguan factory has implemented various improvements to reduce or recycle water usage, striving to reuse precious water resources multiple times. In 2024, we established an automatic domestic wastewater recycling system. This system recycles relatively unpolluted domestic wastewater (such as drinking water and handwashing water) for use in irrigating plants and trees within the factory premises.
The following is the statistical data of the water

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Item promoted	Implementation	Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
Yes	No	Summary

Water resources used (m3)	Taipei Headquarters + Dongguan Factory
Water consumption	Year-over-year (%)
2023	23,552	-20.58
2024	7,437	-68.42
2025	5,965	-19.79

Item promoted	Implementation	Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
Yes	No	Summary

Waste produced (metric ton)	Taipei Headquarters + Dongguan Factory
General	Hazardous
2023	29.647	0.298
2024	24.290	0.286
2025	23.432	0.300
In 2025, our general waste amounted to 23.432 tonnes, a decrease of 3.53% from 2024, of which

Item promoted	Implementation
	Yes	No	Summary
			general recyclable waste amounted to 8.2 tonnes 35%. Hazardous waste amounted to 0.3 metric tons, representing an increase of 4.9% compared with 2024, primarily due to increased usage of activated carbon (VOC) in filtration equipment.
4. Social issues
(1) Does your company establish relevant management policies and procedures in accordance with applicable laws and regulations and international human rights conventions?

(2) Does your company establish and | ☑ | | (1) KYE has established work rules and personnel regulations in accordance with local labor laws and regulations governing remuneration, working hours, insurance benefits, health and safety, and prevention of sexual harassment. In order to build a workplace that ensures human rights and equality, KYE has formulated human rights policies and management guidelines based on internationally accepted human rights standards, including the “International Bill of Human Rights,” with the Human Resources Department designated as the responsible unit, to provide a safe and healthy work environment, eliminate unlawful discrimination, prohibit child workers and forced labor, maintain the physical and mental health and work–life balance of employees, and organize internal training courses on human rights policies and ethical management for departmental managers and employees (a total of 46 people attended such courses for 138 man-hours in 2025).

(2) KYE upholds the values of respecting employee | (1) None.

(2) None. |

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Item promoted	Implementation
	Yes	No	Summary
implement reasonable employee welfare measures (including remuneration, leave and other benefits)? Is the operating performance or result appropriately reflected in the remuneration for employees?			dignity and improving its overall competitiveness to establish multiple communication channels between employers and employees, and receive and respond to the opinions of employees. In addition, for the purpose of creating harmonious labor–management relations, KYE also promotes and participates in various activities to achieve good labor–management relations. Various communication channels, such as regular Welfare Committee meetings and the Human Resource Department email [email protected], are provided for employees to express their opinions.
A. A complaint and proposal system has been established to analyze the expressed opinions and questions and make a summary as a reference for KYE’s future improvement.
B. All operations have been conducted in accordance with the requirements of the Labor Standards Act.
C. At the employee meetings held by the Dongguan Factory, KYE communicates with the representative of labor unions about KYE’s important policies, understands the employees’ concerns on issues, responds to their questions regarding livelihood, reviews and follows the progress of the to-do matters proposed by the employees in order to maintain harmonious labor–management relations, and achieves a

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Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
(3) Does your company provide employees with a safe and healthy work environment and give safety and health training to employees regularly?	✓		win-win situation. To ensure smooth communication channels for employees, the Labor Union Committee consisting of the chairperson and members elected through a democratic election holds labor union meetings on a regular basis to receive employees’ opinions and suggestions. If such opinion or suggestion demonstrates a significant and continuous improvement in the performance of KYE, the employee may be given a material reward. To enhance the welfare of grassroots employees and comply with legal regulations, the company plans to amend certain provisions of its Articles of Incorporation at the 2025 shareholders' meeting. The amendments will stipulate that if the company has annual profits, 1% to 15% should be allocated as employee compensation, with more than half of this amount distributed to grassroots employees.	(3) None.
	✓		(3) KYE organizes fire safety training on a regular basis to provide its employees with complete fire safety knowledge and disaster prevention training in order to improve their crisis management and contingency response skills. No unexpected disasters occurred in the year 2025.
(4) Does your company establish an effective plan for development	✓		(4) For KYE, the key to ensure sustainable management is the continuous development of the employees. KYE	(4) None.

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Item promoted	Implementation
	Yes	No	Summary
and training of the career abilities of employees?			strives to establish a complete educational training system and structure. Therefore, KYE has invested adequate resources to train the employees since their employment began. KYE has adopted different training programs using various learning approaches based on different stages to facilitate individual potential and further achieve the three values of the training policies, i.e., “provision of customer value,” “shaping of employee value,” and “creation of organizational value.” KYE designs the structural competency training for each function type in line with respective career development to enrich our human resources. A variety of learning channels:
A. Internal training: Participating in annual training courses organized by the HR Department, including the management, cognitive, and professional skill training.
B. External training: Attending training courses and seminars held by external organizations related to the work.
C. On-the-job training: Learning professional skills while performing business. For the professional skills required for an employee’s work, the employee is trained on site by his/her chief officer or personnel designated thereby through “learning by doing.”

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Item promoted	Implementation			Differences with the Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies, and the reasons for such differences
	Yes	No	Summary
(5) Regarding customer health and safety, customer privacy, marketing and labeling in relation to products and services, does your company comply with applicable laws and international standards? Does your company establish policies and complaint procedures for the protection of consumer or customer rights?	☑		(5) A. KYE has set up a customer service department to deal with product after-sales service for customers and consumers. In more than 80 countries where KYE’s brand products are sold, product technical manuals and components are provided to allow local customers to offer after-sales services for products to protect the rights of customers.
B. In addition to the contact information of customer after-sales service on its website for customer inquiries, KYE also provides a real-time product research service and a user feedback mailbox to protect the interests of its global customers using KYE’s products.
C. KYE has established an Intellectual Property & Legal Department and a department for product safety certification dedicated to providing information required by national or international laws and regulations and performing health and safety certification processes for products/services. KYE’s products are labeled with the product or service information required by the national or international laws and regulations of the regions in which the products are sold, including CE, FCC, REACH, RoHS, WEEE, EAC and BSMI.	(5) None.
(6) Does your company establish any	☑		(6) For new appointments of suppliers to perform audit	(6) None.

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Item promoted	Implementation
	Yes	No	Summary
supplier management policy that requires suppliers to comply with relevant regulations with regard to issues of environmental protection, occupational safety and health or labor rights. What is the status of its implementation?			procedures, KYE has incorporated ISO 9001 and ISO 14001 into the evaluation criteria. If a supplier violates the related criteria, KYE is entitled to terminate the contract.
5. Does your company prepare a sustainable development report and other reports that disclose non-financial information of your company based on internationally accepted standards or guidelines for preparation of reports? Do the foregoing reports receive the assurance or guarantee opinions of any third-party certifying agency?		☑	In Q1 of 2025, the executive subcommittee of the Sustainable Development Promotion Committee initiated the plan for preparation of the 2024 sustainability report. Using the common standards of the “Global Reporting Initiative” (GRI) and the guidelines of SASB and TCFD as the framework and basis, it is expected to complete the preparation of the “Corporate Sustainability Report” and related disclosures by the end of August 2025. KYE's 2024 sustainability report was not verified or assured by an external independent organization.
6. Where your company has established its own principles of sustainable development in accordance with the “Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies,” the differences between the operations of your company and such principles must be described:
In Q2 of 2022, the Board of Directors adopted the “Corporate Sustainable Development Best-Practice Principles” to achieve corporate sustainable development, and the relevant operations are consistent with the “Sustainable Development Best-Practice Principles for TWSE/TPEx Listed Companies.”
7. Other important information useful for understanding the status of promotion of sustainable development: None.

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(VI) Climate-related Information of Listed Companies
1. Status of climate-related information

Item	Implementation
1. Describing the supervision and governance by the board of directors and management on climate-related risks and opportunities.	Please refer to Section 「V、Financial Position and Financial Performance Analysis and Risk Issues」，and「VIII、Risk Management, Climate-related Financial Disclosures，and Greenhouse Gas Management」(pages 122-140).
2. Describing how identified climate risks and opportunities affect the business, strategy, and finances of the enterprise.
3. Describing the financial impact of extreme weather events and transition actions.
4. Describing how the identification, assessment, and management processes of climate risks are integrated into the overall risk management system.
5. If using scenario analysis to assess resilience to climate change risks, the context, parameters, assumptions, analysis factors, and primary financial impacts should be described.
6. If there is a transition plan for managing climate-related risks, describe the plan's content, as well as indicators and goals used for identifying and managing physical and transition risks.
7. If internal carbon pricing is used as a planning tool, the basis for price determination should be explained.	None.
8. If climate-related targets are set, the covered activities, greenhouse gas emission scopes, planning timelines, progress achieved annually, etc., should be described. If carbon offsetting or Renewable Energy Certificates (RECs) are used to meet these targets, the source and quantity of carbon offsetting credits or the number of RECs should be explained.	Please refer to Section 「V、Financial Position and Financial Performance Analysis and Risk Issues」，and「VIII、Risk Management, Climate-related Financial Disclosures，and Greenhouse Gas Management」(pages 122-140).
9. Inventory and verification of greenhouse gas emissions and reduction targets, strategies, and specific action plans.	As described in the following section, “2. Greenhouse Gas Inventory and Assurance Status of the Company for the Most Recent Two Fiscal Years.”

Greenhouse Gas Inventory and Assurance Status of the Company for the Most Recent Two Fiscal Years
(1) Greenhouse Gas Inventory Information

Describe the Company’s greenhouse gas emissions for the most recent two fiscal years, including emissions volume (metric tons of CO₂e), emissions intensity (metric tons of CO₂e per NT$ million of revenue), and the scope of data coverage.

In accordance with the Sustainable Development Roadmap for Listed and OTC Companies, the scope of greenhouse gas inventory data disclosure for KYE is as follows.

The parent company only on a standalone basis shall commence greenhouse gas inventory from fiscal year 2026
Subsidiaries included in the consolidated financial statements shall commence greenhouse gas inventory from fiscal year 2027. The Company has established a greenhouse gas inventory mechanism in accordance with the Greenhouse Gas Protocol issued by the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI), as well as ISO 14064-1 issued by the International Organization for Standardization (ISO). Since 2020, the Company has conducted annual greenhouse gas inventories for the parent company only on a standalone basis to comprehensively monitor greenhouse gas usage and emissions and to verify the effectiveness of emission reduction actions. In addition, greenhouse gas inventory data for the most recent two fiscal years were aggregated using the operational control approach, covering the combined greenhouse gas emissions of the Taipei Headquarters (parent company only on a standalone basis) and the Dongguan Factory, as described below.

		2024		2025
KYE		Emissions (t/ CO₂e)	Intensity (t/ CO₂e/ NT$ million revenue)	Emissions (t/ CO₂e)	Intensity (t/ CO₂e/ NT$ million revenue)
	Scope 1 – Direct GHG emissions	40.5004		33.6330
	Scope 2 – Indirect GHG emissions	374.1681		347.1332
Total GHG emissions		414.6685		380.7662

In 2025, KYE’s total greenhouse gas emissions amounted to 380.7662 metric tons of CO₂e per year, representing a reduction of 8.18% compared to 2024, thereby achieving the emission reduction target set for 2025. Of the total emissions, the Taipei Headquarters accounted for 255.6157 metric tons of CO₂e per year, representing approximately 67.13% of total emissions, while the Dongguan Factory accounted for 125.1505 metric tons of CO₂e per year, or approximately 32.87%.

When classified by emission scope, Scope 1 (direct energy use) emissions amounted to 33.6330 metric tons of CO₂e per year, accounting for 8.83% of total emissions, while Scope 2 (indirect energy use) emissions amounted to 347.1332 metric tons of CO₂e per year, accounting for 91.17% of total emissions.

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(2) Greenhouse Gas Assurance Information

| Describe the assurance status for the most recent two fiscal years as of the publication date of the annual report, including the assurance scope, assurance institution, assurance standards, and assurance opinion. |
| --- |
| In accordance with the Sustainable Development Roadmap for Listed and OTC Companies:
1. The parent company only on a standalone basis shall commence greenhouse gas assurance from fiscal year 2028.
2. Subsidiaries included in the consolidated financial statements shall commence greenhouse gas assurance from fiscal year 2029. |

(3) Greenhouse Gas Reduction Targets, Strategies, and Action Plans

| Describe the baseline year and data for greenhouse gas emissions, reduction targets, strategies, specific action plans, and the status of achieving such targets. |
| --- |
| Baseline Year and Reduction Targets
To formulate greenhouse gas emission reduction strategies, the Company conducted a greenhouse gas inventory in 2022 using the Taipei Headquarters (parent company only on a standalone basis) and the Dongguan Factory as the boundary, designating 2022 as the baseline year. Emissions for the baseline year were 36.6283 tons of CO₂e for Scope 1 and 722.5006 tons of CO₂e for Scope 2. The Company aims to achieve a 3% reduction in 2025 compared to the baseline year, and to realize an average annual reduction of at least 1% from the baseline year, ultimately achieving an 8% reduction by 2030. |
| Reduction Strategies and Specific Action Plans
The primary source of the Company’s greenhouse gas emissions is Scope 2 indirect energy use (purchased electricity). To effectively enhance energy efficiency and reduce greenhouse gas emissions, the Company has formulated the following energy-saving and greenhouse gas reduction action plans:
• Replacement of outdated, high-energy-consumption equipment
• Adjustment of power restriction days and working days
• Replacement of T8 fluorescent lamps with LED lighting
• Setting summer air-conditioning temperatures between 26–28°C to optimize energy efficiency
• Elevator use restrictions on lower floors to encourage stair use
• Promotion of energy conservation awareness
• Evaluation of solar power generation equipment
• Implementation of lean production initiatives to reduce unnecessary energy waste
• Installation of energy monitoring systems within facilities to track energy usage
• Consolidation of production workshops to reduce idle capacity and electricity waste
• Strengthening energy conservation awareness programs and establishing energy management accountability
• Encouraging employees to use public transportation to reduce direct energy consumption |

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Achievement of Reduction Targets

In 2025, KYE’s total greenhouse gas emissions amounted to 380.7662 metric tons of $\mathrm{CO}_{2}\mathrm{e}$ per year, representing a reduction of $8.18\%$ compared to 2024, thereby achieving the 2025 emission reduction target of a $1\%$ decrease.

(VIII) Status of ethical management, differences with the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies, and the reasons for such differences

Item assessed	Implementation			Differences with the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies, and the reasons for such differences
	Yes	No	Summary
1. Establishment of ethical management policies and plans				KYE is devoted to fulfilling the related requirements of the Ethical Corporate Management Best-Practice Principles in accordance with all rules and regulations.
(1) Does your company establish any ethical management policy adopted by the board of directors? Do the regulations and external documents of your company specify the policy and practices of ethical management and the commitments by the board of directors and the senior management to actively implementing the ethical management policy?	☑		(1) KYE has established the “Code of Ethical Conduct for Directors and Managers” and “Ethical Corporate Management Best-Practice Principles” approved by the Board of Directors and announced the same on its website to demonstrate its ethical management policies and implementation thereof.	(1) None.
(2) Does your company established any mechanism for assessment of the risks of unethical behavior to perform regular analysis and assessment of operating activities with higher risks of unethical behavior within the scope of business of	☑		(2) KYE has established the “Ethical Corporate Management Best-Practice Principles” and “Procedures for Ethical Management and Guidelines for Conduct” as regulations for internal management, intermittently provided employees with	(2) None.
the management of the risk of unethical behavior.			rights of the business of the company to perform the risk of unethical behavior within the scope of business of business of the company.
2. The right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the
the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the right to the right of the

Item assessed	Implementation
	Yes	No	Summary
your company? Does your company establish, on the basis of the foregoing, any plan for prevention of unethical behavior, including at least measures for prevention of the behavior under Paragraph 2, Article 7 of the “Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies”?
(3) Does your company specify and implement the operating procedures, guidelines of behavior, penalties for violations and complaint system in the plan for prevention of unethical behavior? Is the foregoing plan reviewed and amended on a regular basis?	☑		related educational training, and formulated the procedures for risk management and regular reporting.

(3) KYE has established the “Procedures for Ethical Management and Guidelines for Conduct,” which was approved by the Board of Directors. It stipulates the operating procedures that employees must follow when engaging in activities and business within the scope of operations, the basis for ethical behavior, the rewards and penalties, and the complaint system, which are included by the Human Resource Department into the scope of evaluation and management of personnel regulations, and reviewed and revised on a regular basis. | (3) None. |
| 2. Implementation of ethical management
(1) Does your company assess the history of integrity of its business counterparts? Does the contract between your | ☑ | | (1) KYE completes the evaluation of ethical conduct before entering into a business relationship with others, and requires the | (1) None. |

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Item assessed	Implementation			Differences with the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies, and the reasons for such differences
	Yes	No	Summary
company and a business counterparty include any provision governing ethical behavior?			party to sign the Letter of Commitment to Integrity before engaging in business activities to ensure such party’s compliance with all integrity rules formulated by KYE.
(2) Does your company set up any department under the board of directors that is responsible for the promotion of corporate ethical management and that gives a report to the board of directors regarding its ethical management policy and unethical behavior prevention plan and their supervision and implementation on a regular basis (at least annually)?	☑		(2) KYE has designated the Human Resource Department as the department for promoting ethical management. The department assists the Board of Directors and the management in supervising and conducting activities related to ethical management according to the relevant regulations. The following is the status of its operations in 2025:
A. Organized internal training and seminars on ethical management policies and behavior for departmental managers and new employees before the end of the year.
B. Completed the signing of the Declaration on Ethical Management by directors, managers and new employees before the end of the year.	(2) None.
(3) Does your company establish any policy for prevention of conflict of interest, provide any appropriate channel for representation, and implement such	☑		(3) KYE has offered appropriate channels for its employees to provide information at any time. The responsible unit shall archive such information and solutions	(3) None.

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Item assessed	Implementation
	Yes	No	Summary
policy?
(4) Does your company establish effective accounting and internal control systems to ensure the implementation of ethical management? Does the internal audit department establish any relevant audit plan based on the result of assessment of the risks of unethical behavior? Does your company, in accordance with the foregoing plan, conduct an audit of the compliance with the unethical behavior prevention plan, or engage a CPA to conduct such audit?
(5) Does your company organize internal and external training sessions on ethical management on a regular basis?	☑		thereof for review.
(4) Relevant departments are requested to immediately correct the deficiencies of internal operations discovered by KYE’s internal auditors through an audit. KYE also implements an internal control self-evaluation operation including the control environment, risk assessment, control operations, information and communication, and supervision on an annual basis, and then the self-evaluation reports of all departments and subsidiaries are reviewed by the audit department to ensure the implementation effectiveness of the internal control system.
(5) KYE has actively promoted related regulations and ideal goals of ethical management and provided external training to encourage the continuing education of its employees. We have organized internal training and seminars on ethical management for departmental managers and employees. The relevant topics include ethical management policies and principles, the operating procedures, the code of ethical conduct and other internal management	(4) None.
(5) None.

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Item assessed	Implementation
	Yes	No	Summary
			regulations, as well as courses on ethical behavior, integrity, human rights protection and workplace equality for directors, managers and ordinary employees. This year (2025), a total of 46 people attended the relevant internal training courses for 138 man-hours.
3. Operations of the whistleblowing system of your company
(1) Does your company establish specific systems for whistleblowing and rewards? Does your company establish any convenient whistleblowing channel and appoint any appropriate person to handle the case of a person reported?
(2) Does your company establish standard operating procedures for investigation of cases reported by whistleblowers, including subsequent measures required after the completion of investigation and the relevant confidentiality measures?
(3) Does your company take measures to protect whistleblowers from improper retaliation as a result of whistleblowing?	☑		(1) KYE has provided whistleblowing channels and established disciplinary and reporting systems for violations of ethical business practices, and carried out review and modification from time to time to adhere to the principles and rules of ethical management.
(2) KYE’s designated unit responsible for accepting whistleblowing reports has established investigation procedures for different misconduct reported, and the relevant personnel authorized to handle such matters have comprehended the importance of the confidentiality mechanism and adhere to it accordingly.
(3) Since the designated unit is responsible for accepting whistleblowing reports, and all responsible personnel review and	(1) None.
(2) None.
(3) None.

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Item assessed	Implementation			Differences with the Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies, and the reasons for such differences
	Yes	No	Summary
			handle such reports in a confidential manner and with impartiality and objectivity, the whistle blowers will never encounter any mistreatment.
4. Enhancement of information disclosure Does your company disclose the contents of its ethical management principles and the results of their promotion on its website and the Market Observation Post System?	✓		We have disclosed the information related to ethical management on our website (https://www.geniusnet.com/tw) and the MOPS.	None.
5. Where your company has established its own principles of ethical management in accordance with the “Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies,” the differences between the operations of your company and such principles must be described: KYE has established its ethical management principles in accordance with the “Ethical Corporate Management Best-Practice Principles for TWSE/GTSM Listed Companies” and has made its best efforts to ensure compliance with the requirements of such principles.
6. Other important information useful for understanding the status of ethical management at your company: KYE has disclosed its ethical management policies on its website and prepared the Supplier Commitment to Integrity, which a supplier is required to sign before engaging in business activities. KYE also reviews related international standards or issues and update relevant policies on an intermittent basis.

(IX) Other important information useful for understanding the status of corporate governance: None.

(X) Operations of the internal control system

Statement of internal control

KYE Systems Corp.

Statement of Internal Control System

Date: March 6, 2026

Based on the results of self-evaluation of our internal control system in 2025, we hereby issue the following statement:

A. We acknowledge that our Board of Directors and managers are responsible for establishment, implementation and maintenance of the internal control system, and that we have established such system, whose purpose is to provide reasonable assurance for achievement of the goals of operational effectiveness and efficiency (including profits, performance and protection of asset security), reliable, timely and transparent reporting in compliance with applicable regulations, and compliance with applicable laws and regulations.

B. The internal control system has its inherent limits. Regardless of how perfect its design is, an effective internal control system can only provide reasonable assurance for the achievement of the above-mentioned three goals. Moreover, due to changes in the environment and circumstances, the effectiveness of the internal control system may also change. Nonetheless, our internal control system has a self-monitoring mechanism. Once a deficiency is identified, we will take action to correct it.

C. We determine whether the design and implementation of our internal control system are effective based on the criteria specified in the “Regulations Governing Establishment of Internal Control Systems by Public Companies” (hereinafter the “Regulations”) for determination of the effectiveness of an internal control system. The criteria adopted by the “Regulations” for determination of an internal control system divide such system into five elements based on the process of management and control: 1. control environment; 2. risk assessment; 3. control operations; 4. information and communication; and 5. supervision. Each of the elements further includes several criteria. For the foregoing criteria, please see the requirements of the “Regulations.”

D. We have adopted the above-mentioned criteria for determination of an internal control system to assess the effectiveness of the design and implementation of our internal control system.

E. Based on the results of the foregoing assessment, we consider that our internal control system (including the supervision and management of subsidiaries) as of December 31, 2025, including the design and implementation of the internal control system in relation to the understanding of the level of accomplishment of the goals of operational effectiveness and efficiency, reliable, timely and transparent reporting in compliance with applicable regulations and compliance with applicable laws and regulations, is effective and able to reasonably ensure the achievement of the above-mentioned goals.

F. This statement will form part of the main information of our annual report and prospectus and will be published. In the event that any of the above published information involves falsification, concealment or other illegality, we will be subject to the legal liabilities under Articles 20, 32, 171 and 174 of the Securities and Exchange Act.

G. We declare that this statement was approved by a Board of Directors meeting on March 6, 2026. None of the eight directors attending the meeting expressed any objection, and all of them approved the information in this statement.

KYE Systems Corp.

Chairman: Shih-Kun Tso

President: Pai-Shan Lee

Engagement of CPAs to review the internal control report: None.

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(XI) Important resolutions adopted by the shareholders' meeting and the board of directors during the most recent year and as of the date of publication of the annual report

Resolutions of the annual shareholders' meeting on June 9, 2025 and their implementation

Item	Proposal	Resolution and its implementation
Reports	1. The 2024 business report.	Approved by all attending shareholders without objection.
	2. Report on review of 2024 statements of final accounts by the Audit Committee.	Approved by all attending shareholders without objection.
	3. Report on distribution of the remuneration for employees and directors in 2024.	Approved by all attending shareholders without objection.
	4. Report on the director remuneration report in 2024.	Approved by all attending shareholders without objection.
	5. Report on distribution of earnings for the first three quarters of 2024.	Approved by all attending shareholders without objection.
Proposed Ratifications	1. The 2024 business report and financial statements.	1. Approved by voting. 2. Authorized by the annual general shareholders' meeting, the Chairman set July 14, 2025 as the ex-dividend date for the distribution of NTD132,917,098 as cash dividends to shareholders. Based on the actual number of the outstanding shares of KYE on the ex-dividend date, the dividend payout ratio was adjusted to distribute NTD 0.60 per share. In accordance with the law, registration of share transfers was suspended during the period from July 10 to July 14, 2025, and the ex-dividend trading date was set to July 8, 2025. A public announcement of material information was made. 3. The cash dividends were distributed as scheduled on July 28, 2025.
	2. Proposal for earnings appropriation in 2024.
Discussions	1. Proposal to amend the Company's Articles of Incorporation.	This proposal was approved by a vote and shall take effect upon promulgation after this Shareholders' Meeting.
Election Matters	1. Comprehensive Re-election of the Company's Directors.	1. The election of directors of the Company was conducted under the candidate nomination system, in accordance with the Company's Articles of Incorporation and the Procedures

Item	Proposal	Resolution and its implementation
		for Election of Directors. A total of eight 8 directors, including three 3 independent directors, were elected. The term of office shall commence on June 9, 2025, and expire on June 8, 2028, for a term of three 3 years.2. The list of directors elected for the current term is as follows:
		Position	Name
		Director	Shih-Kun Tso
		Director	Yung-Fa Wei
		Director	Han-Liang Hu
		Director	Chin An Tai Investment Co., Ltd.
		Director	Zeng-Bing Liu
		Independent Director	Hung-Tzu Hsu
		Independent Director	Wan-Ting Su
		Independent Director	Peng, Fang
Other motions	Proposal to Release the Company's Directors from the Restrictions on Non-competition.	This proposal was approved by a vote.
Extempore motions	None	None

Resolutions of the Board of Directors meetings

Date of meeting	Resolutions
March 10, 2025	1. Distribution of the remuneration for employees and directors in 2024.
2. The results of self-evaluation and the statement of internal control for 2024.
3. The 2024 business report, parent company only only financial report and consolidated financial report.
4. Distribution of earnings for 2024.
5. The Company participated in the cash capital increase of its subsidiary, Chung-Chiang Investment Co., Ltd.
6. Amendment to the Company's "Articles of Incorporation".
7. Comprehensive re-election of the Company's directors and release of the non-competition restrictions applicable to the newly elected directors.
8. Nomination of candidates for directors of the Company (including independent directors).
9. Proposal for convening the 2025 annual shareholders' meeting
10. Professional fees by the CPAs in 2025.
11. Remuneration payment for the 13rd Board of Directors.
12. Application for financing amounts from financial institutions.
May 12, 2025	1. The consolidated financial report for Q1 of 2025.
2. Proposal for distribution of earnings for Q1 of 2025.
3. Application for financing amounts from financial institutions.
June 9, 2025	1. Election of the 13rd chairman of the company
2. Appointment of members of the Company's 6th Remuneration Committee
3. Appointment of members of the Company's 2nd Sustainable Development Promotion Committee
4. Appointment of members of the Company's 2nd Risk Management Committee
August 11, 2025	1. The consolidated financial report for Q2 of 2025
2. Proposal for distribution of earnings for Q2 of 2025
3. Application for credit facilities with financial institutions
4. The Company's 2024 Annual Sustainability Report
5. Formulate the Company's "Organizational Regulations of the Nomination Committee" and establish the "Nomination Committee"
6. Proposal to determine whether overdue accounts receivable from customer GENIUS COMPUTER TECHNOLOGY LTD beyond normal credit terms constitute funds lending in nature.
November 11, 2025	1. Proposal for change of company's CPA
2. The consolidated financial report for Q3 of 2025
3. Proposal for distribution of earnings for Q3 of 2025
4. Revision of the Company's "Sustainable Development Best Practice Principles"
December 22, 2025	1. Amendments to the internal control system, implementation rules of internal audit, and administrative regulations.
2. The 2025 audit plan.
3. Review of the 2025 operational plan and revenue, profit and expense budget.
4. Amending the company's "ESG Performance and Manager Compensation Linkage Policy", the scope of basic-level

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Date of meeting	Resolutions
	employees as reffered in article 25.
5. Proposal to amend the title and certain provisions of the company’s “Rules for Board of Directors’ Self-Evaluation or Peer Evaluation.”
6. Proposal to determine whether overdue accounts receivable from customer PC ARTS ARGENTINA S.A. beyond normal credit terms constitute funds lending in nature.

(XII) Where directors have expressed different opinions in records or written statements with regard to important resolutions adopted by the board of directors during the most recent year and as of the date of publication of the annual report, the main contents of such opinions must be specified: None

IV. Information of Professional Fees for CPAs

Unit: NTD thousand

Name of CPA firm	Name of CPA	CPA audit period	Audit fees	Non-audit fees (Note 1)	Total	Remarks
Deloitte Taiwan	Mei-Hui Wu	2025Q1、2025Q2	2,944	730	3,674	None
	Han-Ni Fang
Deloitte Taiwan	Mei-Hui Wu	2025Q3、2025Q4
	Jun-Lin Wu

Note 1: Tax certification and translation services.

V. Information of Change of CPAs

Due to internal rotation policy, KYE change its CPAs from Mei-Hui Wu and Han-Ni Fang to Mei-Hui Wu and Jun-Lin Wu starting from the Q3 of 2025.

VI. The chairman, president or financial or accounting manager of KYE who has served at the firm of the CPAs or any of its affiliates during the most recent year: None.

VII. Changes in transfers and pledges of shares held by directors, managers and shareholders with a shareholding of more than 10% during the most recent year and as of the date of publication of the annual report

(I) Change in shares held by directors, managers and major shareholders

Unit: shares

| Title | Name | 2025 | | Current year, as of April 19
(Note 1) | |
| --- | --- | --- | --- | --- | --- |
| | | Increase (Decrease) in the number of shares held | Increase (Decrease) in the number of shares pledged | Increase (Decrease) in the number of shares held | Increase (Decrease) in the number of shares pledged |
| Chairman | Shih-Kun Tso | 0 | 0 | 0 | 0 |
| Director | Yung-Far Wei | 0 | 0 | 0 | 0 |
| Director | Han-Liang Hu | 0 | 0 | 0 | 0 |
| Director | Chin An Tai Investment, Ltd.
Representative: Yi-Chen Tso | (1,500,000) | 0 | 0 | 0 |
| | | 0 | 0 | 70,000 | 0 |
| Director | Zeng-Bing Liu | 0 | 0 | 0 | 0 |
| Independent director | Hung-Tsu Hsu | 0 | 0 | 0 | 0 |
| Independent director | Wan-Ting Su | 0 | 0 | 0 | 0 |

| Title | Name | 2025 | | Current year, as of April 19
(Note 1) | |
| --- | --- | --- | --- | --- | --- |
| | | Increase (Decrease) in the number of shares held | Increase (Decrease) in the number of shares pledged | Increase (Decrease) in the number of shares held | Increase (Decrease) in the number of shares pledged |
| Independent director | Peng, Fang | 0 | 0 | 0 | 0 |
| President | Pai-Shan Lee | 0 | 0 | 0 | 0 |
| Vice President, Accounting Manager and Chief Corporate Governance Officer | An-Min Kao | 0 | 0 | 0 | 0 |
| Vice President | Chin-Tien Hsu | 0 | 0 | 0 | 0 |

Note 1: The data represents the number of increase/decrease in shares held and pledged as of the last day for share transfer registration for this shareholders' meeting.

(II) Information of related parties who are the counterparties in transfers of shares held by directors, managers and major shareholders: None.

(III) Information of related parties who are the counterparties in pledges of shares held by directors, managers and major shareholders: None.

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VIII. Information of shareholders with the top 10 shareholdings who are related parties or are spouses or relatives within the second degree of consanguinity
(April 19, 2026) Unit: shares; %

Name	Personal shareholding		Shareholdings of spouse or minor children		Total nominee shareholding		Names and relationship of shareholders with the top 10 shareholdings who are related parties or are spouses or relatives within the second degree of consanguinity		Remarks
	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Number of shares	Shareholding (%)	Name	Relationship
Ching-Hsin Cho	11,959,488	5.40	0	0.00	0	0.00	Shih-Kun Tso Hsiu-Chin Hsu	Father and son Relatives by marriage	None
Chin An Tai Investment, Ltd.	6,094,955	2.75	0	0.00	0	0.00	None	None	None
Chin An Tai Investment, Ltd. Representative: Hsiu-Chin Hsu	2,938,010	1.33	5,877,815	2.65	0	0.00	Shih-Kun Tso Ching-Hsin Cho Cho Kuo Kuei	Spouses Relatives by marriage Relatives by marriage	None
Shih-Kun Tso	5,877,815	2.65	2,938,010	1.33	0	0.00	Ching-Hsin Cho Cho Kuo Kuei Hsiu-Chin Hsu	Father and son Mother and son Spouses	None
Chung-Yin Investment Co., Ltd.	2,951,140	1.33	0	0.00	0	0.00	None	None	None
Chung-Yin Investment Co., Ltd. Representative: Ching-Hsin Cho	11,959,488	5.40	0	0.00	0	0.00	Shih-Kun Tso Hsiu-Chin Hsu	Father and son Relatives by marriage	None
Hsiu-Chin Hsu	2,938,010	1.33	5,877,815	2.65	0	0.00	Shih-Kun Tso Ching-Hsin Cho Cho Kuo Kuei	Spouses Relatives by marriage Relatives by marriage	None
Jui-Tsung Liao	1,952,752	0.88	0	0.00	0	0.00	None	None	None
Cho Kuo Kuei	1,377,761	0.62	0	0.00	0	0.00	Shih-Kun Tso Hsiu-Chin Hsu	Mother and son Relatives by marriage	None
K. F. S. CO., LTD.	1,295,000	0.58	0	0.00	0	0.00	None	None	None
K. F. S. CO., LTD. Representative: Hong-Ming Shu	0	0.00	0	0.00	0	0.00	None	None	None
Jin-Hai Xu	1,180,000	0.53	0	0.00	0	0.00	None	None	None
Hui-Ping Huang	900,000	0.41	0	0.00	0	0.00	None	None	None

IX. Numbers of shares held by KYE, its directors and managers and companies directly or indirectly controlled by KYE in a single investee company, and the comprehensive shareholding percentage calculated on a consolidated basis

Comprehensive shareholding
(December 31, 2025) Unit: shares; NTD; %

| Investee company
(Note 1) | Investment of KYE | | Investments of directors, managers and directly or indirectly controlled companies | | Comprehensive investment | |
| --- | --- | --- | --- | --- | --- | --- |
| | Number of shares | Shareholding (%) | Number of shares | Shareholding (%) | Number of shares | Shareholding (%) |
| Chung-Chiang Investment Co., Ltd. | 40,700,000 | 100.00 | 0 | 0 | 40,700,000 | 100.00 |
| Hung-Cheng Investment Co., Ltd. | 9,578,103 | 100.00 | 0 | 0 | 9,578,103 | 100.00 |
| KYE Systems (Hong Kong) Corporation Limited | 500,000 | 100.00 | 0 | 0 | 500,000 | 100.00 |
| Genius Holding Co., Ltd. | 18,467,377 | 100.00 | 0 | 0 | 18,467,377 | 100.00 |
| Digilife Technologies Co., Ltd. | 51,562,598 | 94.61 | 7,600 | 0.02 | 51,570,198 | 94.63 |
| Star Reach Limited (Note 2) | USD 416,667 | 25.00 | 0 | 0 | USD 416,667 | 25.00 |
| Timing Pharmaceutical Co., Ltd. | 19,445,600 | 22.64 | 0 | 0 | 19,445,600 | 22.64 |
| Coretek Opto Corporation | 10,604,765 | 30.40 | 2,731,497 | 7.82 | 13,336,262 | 38.22 |
| Sin Tek Green Energy Co.,Ltd. | 1,200,000 | 40.00 | 0 | 0 | 1,200,000 | 40.00 |

Note 1: Long-term equity investments of KYE valuated using the equity method.
Note 2: It is not a company limited by shares. The information listed is the amount and percentage of its capital contribution.

Chapter 3. Financing

I. Capital and Shares

(I) Sources of share capital

(April 19, 2026) Unit: shares; NTD

Date	Issue price	Authorized share capital		Paid-in share capital		Remarks
		Number of shares	Amount	Number of shares	Amount	Sources of share capital	Effective date	Document no.	Non-cash property used as share payment	Others
2017.03	NTD 10	390,000,000	3,900,000,000	277,038,496	2,770,384,960	Repurchased shares transferred to employees 60,000
Repurchased shares canceled 5,000,000	March 7, 2014
January 11, 2017	Letters
Chin-Kuan-Cheng-Chiao-Tzu
No. 1030006730 and 1060000938	None	None
2017.08	NTD 10	390,000,000	3,900,000,000	258,538,496	2,585,384,960	Repurchased shares transferred to employees 5,000,000
Repurchased shares transferred to employees 3,000,000
Repurchased shares canceled 5,000,000
Repurchased shares canceled 5,500,000	May 28, 2014
July 16, 2014
May 11, 2017
July 18, 2017	Letters
Chin-Kuan-Cheng-Chiao-Tzu
No. 1030021361, 1030028201, 1060017324 and 1060026557	None	None
2018.03	NTD 10	390,000,000	3,900,000,000	243,538,496	2,435,384,960	Repurchased shares transferred to employees 5,000,000
Repurchased shares canceled 10,000,000	December 27, 2014
November 7, 2017	Letters
Chin-Kuan-Cheng-Chiao-Tzu
No. 1030053185 and 1060042154	None	None
2018.08	NTD 10	390,000,000	3,900,000,000	237,538,496	2,375,384,960	Repurchased shares transferred to employees 6,000,000	May 9, 2018	Letter
Chin-Kuan-Cheng-Chiao-Tzu
No. 1070315642	None	None
2018.11	NTD 10	390,000,000	3,900,000,000	234,538,496	2,345,384,960	Repurchased shares canceled 3,000,000	August 21, 2015	Letter
Chin-Kuan-Cheng-Chiao-Tzu
No. 1040034823	None	None
2020.07	NTD 10	390,000,000	3,900,000,000	224,528,496	2,245,284,960	Repurchased shares canceled 5,010,000
Repurchased shares canceled 5,000,000	May 20, 2020
July 13, 2020	Letters
Chin-Kuan-Cheng-Chiao-Tzu
No. 1090344936 and 1090349961	None	None
2021.11	NTD 10	390,000,000	3,900,000,000	221,528,496	2,215,284,960	Repurchased shares canceled 3,000,000	July 28, 2021	Letter
Chin-Kuan-Cheng-Chiao-Tzu
No. 1100349821	None	None

April 19, 2026

Type of shares	Authorized share capital				Remarks
	Outstanding shares (Note)	Treasury stocks	Unissued shares	Total
Common shares	221,528,496	0	168,471,504	390,000,000	None

Note: Such shares are publicly listed.

(II) List of major shareholders

April 19, 2026

Name of major shareholder	Number of shares held	Shareholding (%)
Ching-Hsin Cho	11,959,488	5.40
Chin An Tai Investment, Ltd.	6,094,955	2.75
Shih-Kun Tso	5,877,815	2.65
Chung-Yin Investment Co., Ltd.	2,951,140	1.33
Hsiu-Chin Hsu	2,938,010	1.33
Jui-Tsung Liao	1,952,752	0.88
Cho Kuo Kuei	1,377,761	0.62
K. F. S. CO., LTD.	1,295,000	0.58
Jin-Hai Xu	1,180,000	0.53
Hui-Ping Huang	900,000	0.41

Note: The listed are the shareholders with the top 10 shareholdings.

(III) The dividend policy of company, its implementation and the effects of expected material changes in the dividend policy

The dividend policy of KYE

Distribution of KYE's earnings and offsetting of its losses may be made after the end of each quarter. A proposal for distribution of earnings or offsetting of losses in the first three quarters shall, along with a business report and the financial statements audited or reviewed by a CPA, be submitted to the Audit Committee for audit and then submitted to the Board of Directors for a resolution.

When distributing earnings in accordance with the preceding paragraph, KYE shall first estimate and retain an amount for taxes payable, offset losses as legally required and set aside legal reserves, unless the amount of such legal reserves equals or exceeds the paid-in capital.

Distribution of earnings in accordance with the preceding paragraph by issuing new shares shall be subject to Article 240 of the Company Act or, if by distributing cash, to a resolution of the Board of Directors.

Where KYE has earnings in the final accounts of a fiscal year, it shall set aside 10% of such earnings as legal reserves after paying all applicable taxes and offsetting accumulated losses as legally required, unless the amount of such legal reserves equals or exceeds KYE's paid-in capital. When setting aside special reserves in accordance with applicable laws and regulations, if the amount of special reserves required for the net decrease in other equity items accumulated from prior periods is insufficient, the same amount shall first be set aside from the undistributed earnings of prior periods prior to earnings distribution; if there is still any shortfall, the remaining amount shall be set aside from the current period's net profit after tax together with other items included in the undistributed earnings of the current period. Where the net decrease in other equity items is subsequently reversed, the special reserves may be reversed to the extent of such reversal. If there is still any balance of such earnings, the Board of Directors shall prepare a proposal for distribution of earnings in respect of such balance plus the accumulated undistributed earnings and submit the proposal to a shareholders' meeting for a resolution on distribution of dividends and bonuses to shareholders, which shall account for no less than 50% of the distributable earnings.

Where the distribution of bonuses to shareholders in accordance with the

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preceding paragraph is made by distributing cash, the Board of Directors shall be authorized to adopt a resolution for such distribution upon the approval of a majority of the attending directors with the attendance of at least two-thirds of all directors and submit a report on such distribution to a shareholders' meeting. The dividend policies of KYE are based on the current and future development plans, investment environment, funding needs and domestic and international competition, and have taken into account shareholders' interests and other factors. Bonuses to the shareholders of KYE shall be distributed in stock or cash dividends. Cash dividends shall be no less than 10% of the total bonuses to shareholders, with the remaining distributed in stock dividends. No distribution of cash dividends is required if their amount per share is less than NTD 0.1 (included), and all of the bonuses shall be distributed in stock dividends. Based on the situation of the industry and the business development cycle of KYE, the bonuses to shareholder during the most recent three years were all in cash dividends, and cash dividends are expected to account for no less than 50% of the bonuses in the future.

Implementation

Distribution of dividends proposed at the current annual shareholders' meeting

Item	Dividends distributed per share (NTD)	Source
Cash dividends	0.30	Earnings

Effect of expected material changes in the dividend policy

No such effect since there has been no expected material changes in the dividend policy of KYE.

(IV) Effects of the proposed distribution of bonus shares at the current shareholders' meeting on the business performance and earnings per share of company: N/A

(V) Remuneration for employees and directors

The percentage or range of the remuneration for employees and directors as specified in the Articles of Incorporation

Where KYE has a profit in a year, it shall allocate 1% to 15% (more than half of the amount of employee compensation under this item shall be allocated for compensation to rank-and-file employees) thereof as the remuneration for employees, which shall be distributed in shares or cash subject to a resolution of the Board of Directors. The recipients of such remuneration may include the employees of any affiliate who have met certain requirements. The Board of Directors may adopt a resolution to appropriate no more than 1% of the amount of the foregoing profit as the remuneration for directors. The proposals for distribution of remuneration for employees and directors shall be submitted in a report to a shareholders' meeting.

If KYE still has accumulated losses, an amount of the foregoing profit shall be retained to such losses prior to any appropriation of the remuneration for employees and directors according to the percentage under the preceding paragraph.

The basis of estimate of the remuneration for employees and directors, the basis of calculation of the number of shares distributed as the remuneration for employees, and the accounting treatment in case of any difference between the actual amount of distribution and the estimate.

Any change in the amount on the date of a resolution of the shareholders'

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meeting will be treated as a change in accounting estimates and will be adjusted to be accounted for in the year of the resolution of the shareholders' meeting.

Distribution of remuneration approved by the board of directors

(1) Amounts of the remuneration for employees and directors

The amount of the remuneration for employees was NTD 1,841 thousand in cash and NTD 0 in shares, and the amount of the remuneration for directors was NTD 920 thousand. There was no difference between the amounts and the estimated amounts in the year of the recognized expenses.

(2) The amount of the remuneration for employees distributed in shares and its share of the sum of parent company only only after-tax net profit and total remuneration for employees in the current period

Remuneration paid in shares to employees was NTD 0, accounting for 0%.

Actual distribution of the remuneration for employees and directors in the previous year

Unit: NTD Thousand; Thousand shares

Item	Number of	Amount	Share price
Remuneration for cash	-	3,594	-
Remuneration for stocks	-	0	-
Remuneration for directors	-	1,796	-
Total	-	5,390	-

Difference between the actual amount of distribution above and the recognized remuneration for employees and directors: None.

(VI) Repurchase by company of its own shares

Repurchase completed: None.
Repurchase in progress: None.

II. Issuance of Corporate Bonds: None.
III. Issuance of Preferred Shares and Global Depositary Receipts: None.
IV. Issuance of Employees' Stock Warrants and Restricted Stock Awards for Employees: None.
V. Issuance of New Shares with Shares Acquired or Assigned from Other Companies: None.
VI. Implementation of the Fund Usage Plan: None.

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Chapter 4. Overview of Operations

I. Information of Business Activities

(I) Scope of business

Main information of the operated business

KYE primarily engages in the manufacturing and sales of computer peripherals, video imaging products, and consumer electronics, marketing its products globally under its own brand "Genius."

Share of the operated business

Main product	Share of the operating revenue (%)
	2025	2024
Computer peripherals	54.74	59.29
Video image products	40.81	38.29
Consumer electronics	2.44	1.54
Other	2.01	0.88
Total	100.00	100.00

New products developed

(1) Computer peripherals: Lightweight Wireless Mouse, Fast-Charging Wireless Mouse, Compact Keyboard, Slim Scissor-Switch Keyboard.
(2) Audio-Video consumer electronics: Speakers, Headphones, Webcam, Dash Cam, Fast Charging Dock, Car Charger, and Cables.
(3) Gaming peripherals: Gaming Steering Wheel, Game Controller, Speakers, Headphones, Gaming Mouse, Gaming Keyboards.

New products planned for development

(1) Computer peripherals: Bluetooth Copilot AI Mouse, Office Copilot AI Lightweight Wireless Mouse, Fast-Charging Wireless Mouse, Compact Keyboard, Slim Scissor-Switch Keyboard.
(2) Audio-Video consumer electronics: Live Streaming Webcam and Microphone, Bluetooth Pinewood Mini Speaker, Copilot AI Wireless Foldable Headphones, Vehicle Dash Cam, Fast Charging Dock, Car Charger.
(3) Gaming peripherals: Gaming Steering Wheel, Gamepad Controller, Gaming Illuminated Headphones, Wireless Gaming Mouse, Lightweight Gaming Mouse, Backlit Gaming Keyboard, Flight Joystick.

(II) Overview of industry

Current status and development of industry

In 2025, fluctuations driven by rising prices of memory, precious metals, and raw materials resulted in higher costs or memory shortages for both personal computers and mobile phones, causing some consumers to postpone or scale back their replacement plans and leading to a general decline in overall market upgrade demand.

AI servers and large language model AI apps such as ChatGPT, Gemini, Copilot, Claude, Grok, and DeepSeek continue to attract strong investment and development. AI chatbots are continuously improving their reasoning and learning capabilities with faster computing speed and higher accuracy, and consumers are increasingly using AI to assist with work. In mainland China, AI applications are also gradually being integrated into hardware robots to assist with fixed and repetitive tasks.

Relationship among the upstream, midstream and downstream in the industry

(1) Mouse

Upstream	Midstream	Downstream
IC, (BT/RF) module, sensor components, LED, PCB, button switch and cable	Mouse design, plastic injection molding, wireless frequency pairing, assembly	Desktops, laptops, agents, distributors, and consumers

(2) Keyboard

Upstream	Midstream	Downstream
MCU processor, (BT/RF) module, circuit board, film	Plastic injection molding, laser engraving, wireless frequency pairing, desktop membrane keyboards, mechanical keyboards	Desktops, laptops, agents, distributors and consumers

(3) Web cameras

Upstream	Midstream	Downstream
CMOS sensor components
Backend master controller
LENS optical camera
Microphone	Design integration, plastic injection molding, assembly	Desktops, laptops, distributors and consumers

(4) Vehicle recorders

Upstream	Midstream	Downstream
CCD/CMOS sensor, components, Digital signal processor (DSP), LENS optical camera, LCD display screen, Wi-Fi, 3G/4G module, Memory card, Microphone	Appearance design, and assembly of vehicle recorders	Smart devices, distributors, car dealers and consumers

(5) Microphone

Upstream	Midstream	Downstream
Diaphragm, Voice Coil, Magnet, Preamplifier IC, DSP (Digital Signal Processor), USB-C Power Module, Memory IC (Built-in Recording Function), LED Module	Microphone module design, acoustic tuning, PCB integration, assembly, testing and calibration, housing fabrication	Channel partners, consumers, live streaming platforms, podcasts, music recording, online education

(6) Headsets

Upstream	Midstream	Downstream
Wireless RF/BT IC, Baseband processor IC, Speech codec, Power supply/management, components, battery, headset driver, microphone driver	Bluetooth wireless RF module design, audio frequency design, echo cancellation design, assembly, testing, headset sound quality adjustment	Smartphones, tablets, laptops, distributors and consumers

(7) Speakers

Upstream	Midstream	Downstream
Code/DSP audio decoder, power amplifier chip, speaker drivery, battery, wood cabinet	Audio frequency design, echo cancellation design, assembly, testing, speaker sound quality adjustment	Smartphones, tablets, laptops, distributors and consumers

Development trends and competition of products

Products are trending toward being lightweight, wireless, compact, and portable. Personal computer operating systems are gradually incorporating AI assistant apps, and hardware is upgrading towards affordable AI PCs. Currently, new laptops feature Microsoft Copilot AI keys, operating systems with Copilot apps or ChatGPT, and increased Type-C charging ports. To address insufficient USB ports, demand for multi-port USB hubs and wireless Bluetooth usage has increased rapidly.

The popularity of online music has driven demand for headphones, allowing consumers to enjoy music anytime and anywhere. Demand for high-quality wired USB-C or wireless Bluetooth headphones continues to increase. Online gaming has also driven demand for game controllers, gaming keyboards and mice, and racing steering wheels.

Market competition

The products of Genius, KYE's own brand, include computer peripherals such as ms, keyboards, speakers, headsets, gaming products, web cameras for imaging products. and vehicle recorders. Different product lines also have different competitors.

Logitech, and numerous white brands are the main competitors in the mouse and keyboard market. Logitech offers a comprehensive range of mid to high-end products, with the highest prices in the market. Recently, due to rising raw material prices and the appreciation of the RMB, discounted inventory clearance by local manufactures in mainland China seen since the year before last has become less evident.

The main competitors for speakers are regional or mainland China brands such as Edifier. For headphones, the competitors are brands from China. As for network cameras, Logitech is the main competitor, known for its brand recognition and comprehensive product range. After the epidemic, channel inventory has been cleared and orders have resumed.

The main for gaming products are brands like Logitech, Razer, and Steel Series. In the past, sales performance was affected by overly high product positioning. In recent years, product strategies have been adjusted and new products have been relaunched, with racing steering wheels, controllers, keyboards, and mice gradually showing growth. The main sales region for dash cams is Southeast Asia, with Mio and Papago being the primary competitors. Rising memory prices have caused supply chain shortages and frequent price fluctuations, leading to short-term price adjustments supported by promotional discounts.

The marketing focuses and competitive advantages of KYE's own brand Genius

A. Marketing Focus: Marketing activities include new product launches, strategic product promotions, online media, exhibitions, advertisements, roadshows, promotions, and providing marketing subsidies to sponsor customer events and promotions. This year, we will continue to improve the

layout and browsing speed of the official website. In addition, Arabic, Hungarian, and Polish language versions have been added, and short videos on social media platforms have been increased to strengthen brand internationalization and digital marketing effectiveness. Additionally, we will expand participation in customer roadshows and channel promotions.

Each year, about 30-40 new products are launched, all of which require press releases to inform customers in advance and prepare for pre-launch promotions to ensure sufficient inventory for smooth stocking. After the launch, we track local sales responses and feedback from customers to provide references for product business improvement.

B. Advantages: KYE invented the mouse scroll wheel and has been in the market for nearly 40 years. Our product line has expanded from mouse scanners to audio and gaming, with a reputation for excellent image and quality. We have accumulated numerous loyal customers despite experiencing, epidemics, and geopolitical tensions, coexisting with major brands. We offer high value for money, providing practical features at a reasonable price, offering excellent value for money. Our brand is recognizable, accessible, and reputable, offering reliable quality and peace of mind for consumers.

(III) Overview of technology, research and development

Currently, USB-A and $3.5\mathrm{mm}$ headphone jacks are still widely used. New computers, smartphones, tablets, and other main platforms have started to increase the use of USB-C connectors or charging, and peripheral products should follow suit.

This year (2026), USB-C, Bluetooth dual-mode, and multi-mode speakers and headphones integrating $3.5\mathrm{mm}$ , USB, and Bluetooth audio will continue to be developed. Integrated single chips will also extend to low-cost models to enhance competitiveness. Products will also be combined with AI applications. Last year (2025), all keyboards were the first to update chips and firmware, introducing the Copilot key. Other products include illuminated gaming mice, illuminated mechanical keyboards combined with AI Copilot, force feedback racing wheels, controllers, and illuminated Bluetooth headphones, which will continue to be launched in the second wave this year following last year's release.

R&D expenses invested in the most recent year and as of Q1 of 2026

Item	2025	Q1 of 2026 (Note 1)
Amount of expense (NTD Thousand)	7,618	-
Percentage of operating revenue (%)	0.79	-

Note 1: As of the date of publication of the annual report, the financial information of the Company for the first quarter of 2026 has not yet been reviewed by the certified public accountants and therefore is not disclosed.

R&D outcome.

Year	R&D outcome
The most recent year and as of the date of publication of the annual report	(A) Eleven mouse models, all wireless models. (B) Ten Copilot keyboard models, including four wireless models. (C) Seven speaker models, including the five Bluetooth models.

Year	R&D outcome
	(D) Four headphone models, mainly music Bluetooth USB-C, and gaming.
(E) One illuminated gaming mouse, four gaming keyboards, and three gaming steering wheels. One wireless gaming mouse, two gaming keyboard and mouse sets, and one gaming steering wheel.
(F) High-resolution car/motorcycle dash cams.
(G) Five webcam models.
(H) One live-streaming microphone.

(IV) Long-term and short-term business development plans

Short-term business development plan

Last year, Currently, new computers, smartphones, tablets, and other platforms have widely adopted USB-C connectors and charging standards as upgrade standards. Microsoft has recently strongly recommended the Copilot AI Assistant software, and with the end of support for Win 10, Copilot AI and USB-C related products are essential for computer upgrades and promotion.

The Russia-Ukraine geopolitical conflict has lasted for three years, and international tariff trade wars, surging raw material prices, and uncertainly about the future may lead consumers to be cautious. Low-priced products are easier to sell, and high-function products need to be high-quality but affordable. Therefore, different pricing strategies and differentiation are necessary to meet various consumer demands and avoid being out of touch.

Long-term business development plan

With the increase in processors and AI software applications, affordable AI PCs will be the driving force for computer growth in the future. Additionally, online gaming and streaming music are widespread, and products with audio-visual effects such as speakers, headphones, gaming peripherals, high-resolution video transmission and personal cybersecurity protection have greater opportunities on these platforms. Product launches and business promotions will also move in this direction.

Regarding the geopolitical conflicts and wars in Russia-Ukraine and U.S.-Iran, if ceasefire negotiations progress, European confidence will stabilize and recover economic conditions in Europe and the Middle East may continue to be affected, benefiting Asia as well. If negotiations fail and the conflict continues, the economy may remain in its current predicament. However, to reduce dependence on the United States, the EU will increase budget spending, potentially providing some demand for European domestic needs. Business development will continue to focus on market diversification and encouraging customers to increase sales of higher-margin live streaming video products, as well as growing audio-visual and gaming channels. Business development will continue to focus on market diversification and encouraging customers to increase sales of higher-margin live streaming video products, as well as growing audio-visual and gaming channels.

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II. Overview of market and production/sales

(I) Market analysis

1. Sales territories for main products

Unit: NTD thousand; %

| Year
Territory | 2024 | | 2025 | |
| --- | --- | --- | --- | --- |
| | Sales | % | Sales | % |
| Asia | 126,636 | 12.94 | 118,737 | 12.38 |
| America | 340,422 | 34.78 | 331,812 | 34.59 |
| Europe | 209,933 | 21.45 | 205,548 | 21.43 |
| Taiwan | 288,212 | 29.44 | 285,706 | 29.78 |
| Others | 13,613 | 1.39 | 17,561 | 1.82 |
| Total | 978,816 | 100.00 | 959,364 | 100.00 |

2. Market share and future supply, demand and growth in the market

(1) Computer peripherals

A. Keyboards

In 2025, keyboard sales revenue slightly declined compared to the previous year (2024), with the average unit price slightly increasing. This was mainly due to the increased unit prices of wireless keyboards and gaming keyboards. Additionally, sales unit prices of new wireless keyboards and gaming keyboards also increased.

In 2025, the Copilot business dual-mode keyboard series were launched, redefining more practical shortcut keys to enhance consumer experience. Together with customers, we are preparing for the wave of Copilot AI PC replacements in the second half of the year. Keyboard sales are expected to recover growth, further driving mouse growth.

B. Speakers/ Headsets

In 2025, speaker sales revenue slightly increased compared to the previous year (2024). The newly launched Bluetooth wooden box speakers and compact portable Bluetooth speakers in 2025 were still in high demand. The recently launched pinewood series has received high praise, and it is gratifying to see the faithful presentation of good sound after years of dedication to audio products. Speaker sales are expected to continue growing.

In 2025, headphone sales grew significantly, mainly driven by increased demand for USB, new gaming, and Copilot headphones. Demand of USB, new gaming, and Copilot headphones increased, while inventory of headphone jack headphones continued to be cleared. The promotion direction still emphasizes both USB and Bluetooth, In 2026, product development will focus on lightweight designs, with emphasis on both USB and Bluetooth. USB-A+C, Bluetooth headphones are gradually gaining demand. Looking ahead to 2026, live-streaming microphones will become a key product focus, with plans to develop a complete product line and accessories.

(2) Video image products

A. Web cameras

In 2025, webcam sales increased significantly, mainly driven by the

launch of multiple mid-range high-resolution products. With the rapid growth of the live-streaming market and increased demand for personal safety protection, products featuring fill light, facial recognition, and high resolution can drive upgrades and provide better sales margins.

B. Vehicle recorders

Sales of automotive and motorcycle dash cams remain solid, but rising prices of memory and other raw materials have increased short-term cost pressure, which may affect sales. The Company will enhance product cost-performance and make slight price adjustments when necessary to maintain channel momentum. With rising awareness of driving safety and regulatory promotion, market demand is expected to continue growing, supporting future business expansion.

Advantages and disadvantages for competitive niches and prospects of development, and measures in response

(1) Advantages

A. KYE has established the Genius brand for 40 years and pioneered the invention of the mouse scroll wheel supported by strong R&D capability and manufacturing experience. KYE has served as an OEM manufacturer for numerous Internationally computer companies, establishing a strong reputation for brand image and quality within the industry, garnering a vast following of enthusiasts. From our early days producing mice and scanners, KYE has expanded our product range to include keyboards, speakers/ headsets, gaming peripherals, digital imaging, and more. Recently, we have actively re-entered the gaming peripheral market, revitalizing our brand for the modern era.

B. The brand is visible to consumers, accessible for purchase, reliable in quality, and provides a reassuring buying experience.

C. High cost-performance ratio, fair pricing for the same functionality, and excellent value for the same price.

D. Innovating continuously each year, we introduce new products that reflect the current trends in the industry.

(2) Disadvantages and measures in response

A. Rising raw material prices

Due to the appreciation of the NTD and surging prices of memory, precious metals, and other raw materials in 2025, production costs have increased.

Counter measures: Organize promotional activities, avoid price wars, and introduce AI, USB-C, wireless Bluetooth, and gaming peripherals.

B. US tariff war

The reciprocal tariff trade war between the United States and other countries, along with the rise of protectionism, is expected to exacerbate inflation concerns, increase import prices, and impact global trade exports.

Counter measures: In addition to continuous cost reduction, the company will adjust product strategies by introducing high value-added and high-margin products or reducing specifications while maintaining pricing, adopting dual approaches to mitigate cost impacts. Collaborate with channels for back-to-school or major

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holiday promotions.

C. Geopolitics and wars

The conflicts involving Russia, Ukraine and the United States and Iran have led to inflation in Europe and extended shipping schedules, affecting exports from Asia. If ceasefire negotiations fail, unresolved transportation issues may cause chaotic and skyrocketing freight rates.

Countermeasures: Provide freight subsidies for European, increase cash discounts and promotional activities, and offer incentives for orders and shipments in other lower-risk regions to ensure sales stability.

(II) Important applications and manufacturing processes of main products

Important applications of main products

(1) Computer peripherals

Computer peripherals mainly include mice, keyboards, and graphic tablets, which are accessories for computers and mobile devices. A mouse can control, select, and move the computer cursor, allowing for computer operation. Ergonomic designs help reduce fatigue from prolonged use and improve work efficiency. A keyboard is used for typing and data entry. Both the mouse and keyboard can be used with AI Copilot shortcut keys to utilize Microsoft Copilot AI assistant for work assistance. Additionally, mice and keyboards can be used for playing online games.

(2) Audio products

The primary function of speakers is to faithfully reproduce sound and music. To hear sound, traditional audio systems use an amplifier's power amplification chip to drive passive speakers. Computer speakers, on the other hand, have lower power and include built-in amplifier chips in the speaker enclosure. The sound quality depends on the speaker's sound separation, including high, mid, and low frequencies, stereo left and right channels, 2.1 channels with separate bass, and 5.1 channel surround sound. In recent years, wireless Bluetooth speakers have gradually become mainstream due to their cordless design and portability.

Headphones, on the other hand, play sound at a very close distance to the ears and can be divided into music headphones and headsets with microphones for conversations. Computer headphones can be used to listen to music and online audio. Later, microphone functions similar to wired ones were added to create headsets, which can be used for online software calls such as instant messaging. Wired or wireless in-ear Bluetooth headphones can also be used with smartphones and tablets to listen to music, play games, and answer calls, making them very convenient. The headphone product line continues to expand, covering both music playback and voice communication functions. Computer headsets now support online conferences and instant messaging, while mobile device headphones offer both wired and wireless Bluetooth options for music, gaming, and calls, improving overall convenience. The primary function of microphones is to clearly capture and transmit human voice in real time. Computer microphones often integrate DSP chips to reduce noise and improve sound quality. Depending on design, microphones may be directional or omnidirectional. With the widespread adoption of live streaming and online teaching, USB interfaces have become mainstream,

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and wireless Bluetooth transmission is also increasingly used.

(3) Video image products

Video image products include network cameras. Network cameras enable face-to-face conversations and video conferences over the internet. Network cameras capture and transmit images in real time. Network cameras often incorporate DSP chips to enhance image quality and reduce noise, and support resolutions such as 720P, 1080P, 2K, and 4K to ensure clear and smooth images. With the increasing adoption of video conferencing, live streaming, and online education, advanced features including auto focus, fill light, facial recognition, and security protection are further integrated to meet diverse user needs.

Production and manufacturing process

(1) Computer peripherals: Mouse/Tablet

(2) Video image product: Web cam

(III) Supply of primary raw materials

Product category	Primary component	Source and status of supply
Computer peripherals (Mouse/Keyboard)	IC, Sensor, PCB, FPC, ASIC, Coil, Resister, Capacitor, Switch, Optical Sensor, plastic injection, metal parts	Both strategies of internal manufacture and purchase were adopted to ensure stable supply during peak and off-peak seasons, stabilize the sources of purchase, and ensure compliance with the shipping plan.
RF/MCU ICs and sensors were sources of long lead time. Strategic partnership was established with the main suppliers to lower the cost and meet the requirements of shipment to ensure shipment schedules.
Audio products (Speaker/Headset)	Driver unit, PCB, Bluetooth IC, microphone, and plastic injection-molded components	Multiple suppliers are engaged in parallel to ensure stable supply of Bluetooth- and USB-specification products and to reduce single-source supply risks.
Video image product (Web CAM)	Lens、ASIC、PCB、IC、C-MOS Sensor IC、Backend IC	Both strategies of internal manufacture and purchase were adopted with multiple external suppliers developed to lower risks and ensure compliance with the shipping plan.
Live-streaming products (Streaming Camera /Microphone)	Capsule、Preamp Circuit、PCB、Audio IC、USB / XLR Interface、Shock Mount、Pop Filter、Housing & Grille	In response to demand from the live-streaming market, a new supply chain has been established and products are co-developed with strategic partners to ensure product quality and delivery schedules.

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(IV) Names of customers accounting for no less than 10% of the total purchase (sales) of company during any of the most recent two years, and respective amount and percentage of purchase (sales), and the reasons for changes of increase/decrease

Information of suppliers accounting for no less than 10% of the total purchase of your company during any of the most recent two years:

Unit: NTD Thousand

Item	2024				2025				As of Q1 of 2026(Note 1)
	Name	Amount	Share of annual net purchase (%)	Relationship with the issuer	Name	Amount	Share of annual net purchase (%)	Relationship with the issuer	Name	Amount	Share of net purchase in the current year, as of the previous quarter (%)	Relationship with the issuer
1	ROVERSTAR	96,037	18.90	None	APICAL	110,938	21.88	None	—	—	—	—
2	APICAL ELECTRONICS (HK) COMPANY LIMITED	64,235	12.64	None	ROVERSTAR	107,927	21.29	None	—	—	—	—
3	APICAL	47,362	9.32	None	APICAL ELECTRONICS (HK) COMPANY LIMITED	0	0	None	—	—	—	—
	Others	300,430	59.14	—	Others	288,075	56.83	—	—	—	—	—
	Net Purchase	508,064	100.00	—	Net Purchase	506,940	100.00	—	—	—	—	—

Note 1: As of the date of publication of the annual report, the Company's financial information for the first quarter of 2026 has not yet been reviewed by the certified public accountants and therefore has not been disclosed

Reasons for changes of increase/decrease in the number of main suppliers:

The increase/decrease in the amount of purchase from each supplier is mainly due to measures taken in response to the business development of KYE and market demands.

Information of sales customers accounting for no less than 10% of the total sales of your company during any of the most recent two years:

Unit: NTD Thousand

2024				2025				As of Q1 of 2026(Note 1)
Name	Amount	Share of annual net sales (%)	Relationship with the issuer	Name	Amount	Share of annual net sales (%)	Relationship with the issuer	Name	Amount	Share of net sales in the current year, as of the previous quarter (%)	Relationship with the issuer
Others	978,816	100.00	—	Others	959,364	100.00	—	—	—	—	—
Net sales	978,816	100.00	—	Net sales	959,364	100.00	—	—	—	—	—

Reasons for changes of increase/decrease in the number of main sales customers: None.

Year		2024	2025	As of April 19, 2026
Number of employees	Administrative personnel	124	126	129
	R&D personnel	5	6	6
	Direct personnel	29	28	29
	Total	158	160	164
Average age		44	44	44
Average length of service (years)		11.11	11.49	11.46
Distribution of educational level (%)	Doctor	0.00	0.00	0.00
	Master	6.96	7.50	7.32
	College	63.29	60.00	60.37
	Senior high school	12.66	16.25	15.85
	Below senior high school	17.09	16.25	16.46

IV. Information of Environmental Protection Expenses

(I) Losses and amount of penalties incurred due to environmental pollution during the most recent year and as of the date of publication of the annual report: None.

(II) Future measures in response:

Planned measures for improvement: KYE has introduced a green electronic information and communication platform to enhance its capability and efficiency in the management of hazardous substances from suppliers. It helps R&D personnel and suppliers recognize and review green components to achieve the goal of source management.
Effects after improvement

(1) Effect on gross operating profit

Though green manufacturing processes lead to higher manufacturing costs, KYE has applied such processes completely in line with the world trend. Despite a short-term effect on the gross operating profit, KYE has been able to maintain its original profitability through continuous improvement with TQM.

(2) Effect on competitiveness

The raw materials and consumables used by KYE are in compliance with the international legal requirements of EU RoHS and REACH, its products have been recognized by leading companies worldwide. They trust and place orders to KYE for production under DTO or OEM. Ongoing R&D and innovation of processes are improve its competitive status again.

(III) Information of measures in response to RoHS

KYE has products that are directly or indirectly sold to Europe or involve the relevant regulations of RoHS.
KYE has completed 100% product transformation in accordance with RoHS.
KYE has actively promoted the ideas of green design and management in

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accordance with RoHS and WEEE. Design is reviewed at the development phase of new products to ensure their designs are in conformity with environmental regulations, and the products are marked with the relevant signs for environmental protection and materials.

KYE has continued to acquire SVHC related information required by REACH via green supply chain management, and has assessed the compliance of our products with REACH.

V. Labor-Management Relations

(I) Employee welfare measures, continuous education, training and retirement systems and their implementation, agreements between employees and the employer, and measures for protection of the rights of employees

Welfare measures

A. General welfare measures are implemented by the Welfare Committee. For domestic travels, gifts for the three traditional holidays, birthday celebrations, etc., the Welfare Committee members elected among the employees are responsible for planning and implementation based on the revenue and budget of the current year. The subsidies for the cash for the three traditional holidays, marriage, funerals, festivities, hospitalization and group recreational activities and other welfare subsidies in 2025 amounted to approximately NTD 7.281 million. In addition, the Company distributed health and wellness supplements to employees at the year-end banquet, with related expenses of approximately NT$274,000. This initiative directly enhanced employees' perceived welfare benefits, promoted physical health (including strengthening immunity and improving overall well-being), and helped reduce sick leave rates. It also reinforced the Company's image of caring for employees, increased employee engagement and satisfaction, and ultimately contributed to improved work efficiency.

B. To actively assist employees in avoiding obesity and the three highs (high blood pressure, high blood sugar, high blood lipids), the company provides low-calorie, fat-reducing lunch boxes and collaborates with nearby hospitals to conduct regular health check-ups for employees. These check-ups include carotid ultrasound and key indicators for the three highs. In Year 2025, the Company subsidized employees' health check-up expenses totaling approximately NT$106,000. As well as various discounted self-paid examination items for employees to choose from, enabling timely disease prevention and protecting employee health. The company encourages regular exercise to achieve work-life balance, provides body weight and fat scales for employees to monitor their physical metrics and maintain a good physique, and also has coffee machines to boost employees' spirits at work. Additionally, the company has planned a recreational venue in northern Taiwan for employees to use for leisure activities or family events, allowing them to relax in a comfortable and beautiful environment.

C. In 2025, the Welfare Committee held a Christmas banquet with abundant food and fun games to thank employees for their hard work throughout the year and to maintain camaraderie among colleagues.

D. The company is happy to share the results of joint efforts with employees, especially as operational performance has improved in recent years. The average salary of full-time employees who are not in managerial positions increased from 829 thousands NTD in 2021 to 981 thousands NTD in 2025,

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while the median salary rose from 718 thousands NTD in 2021 to 879 thousands NTD in 2025, showing a positive correlation with company profit growth. The amount of holiday and year-end bonuses is the same for each employee, regardless of their position.

E. In response to amendments to the Securities and Exchange Act, the company has revised its articles of association at 2025 annual shareholders' meeting to stipulate that a certain percentage of annual profits will be allocated for salary adjustments or bonuses for grassroots employees. However, the company enhance the welfare of grassroots employees. In practice, all employee bonuses in the past three years have been distributed to general employees, with no managers or senior executives included.

2. Continuing education and training systems

The training strategy of KYE combines the corporate strategic plans, organizational reforms, and core competitiveness to improve customer values, build employee values, and create organizational values. The requirements for growth of the organization and individuals are taken into account when educational training is planned and executed. Educational training is based on the aspects of "organizational development strategies", "core competencies" and "corporate culture" and is in line with the annual goals of KYE, the R&D of products, and the trend of market development.

To provide a professional training system, KYE has standardized the training process (ISO 9001 certified) and appointed specialized personnel to create a training system and manage and implement training. In response to a rapidly changing external environment, KYE has been active in building its competitive strength internally and promoting its corporate culture to move toward the goal of sustainable business management. KYE has also been active in building a learning organization and improving the learning ability of the organization to make learning an inherent DNA of KYE, accumulate human capital, and enhance the competitiveness of the organization.

The following is the statistical data of the performance of training by KYE in 2025:

Number of internal training session	Internal training man-hours	External training man-hours	Total training expense (NTD)
19	606.5	290	13,700

3. Post-employment benefits

(1) Defined contribution plan

The pension system under the "Labor Pension Act," as applied by KYE and domestic subsidiaries, is a defined contribution plan managed by the government. A pension equal to 6% of an employee's monthly salary is appropriated and deposited into a special personal account at the Bureau of Labor Insurance. The subsidiaries in Mainland China are subject to the relevant local pension insurance system, where a certain percentage of salary is appropriated as a pension contribution and deposited to the designated agency.

(2) Defined benefit plan

The pension system under the "Labor Standards Act," as applied by KYE, is a defined benefit pension plan. The pension paid to an employee is calculated based on the length of his/her service and the average salary over the 6 months prior to the approved date of his/her retirement. KYE

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appropriates 2% of the total monthly salary of an employee as a pension and deposit it into a special account at the Bank of Taiwan in the name of the Labor Pension Fund Supervisory Committee. If, by the end of each year, the estimated balance in the special account is insufficient for payments to employees who are expected to meet the criteria for retirement in the next year, KYE will appropriate the difference in a lump sum by the end of March next year. The special account is managed by the Bureau of Labor Funds, Ministry of Labor, and KYE does not have any right to influence the investment management strategies.

(3) The amount of post-retirement benefit expenses included in the consolidated statement of comprehensive income is listed as follows (in thousands of NTD)

Items	2023	2024	2025
Defined Contribution Plan	4,056	4,353	4,513
Defined Benefit Plan	76	25	(16)
Total	4,132	4,378	4,497

(4) The amount of defined benefit plan included in the consolidated balance sheet is listed as follows (in thousands of NTD):

Items	2023	2024	2025
Present Value of Defined Benefit Obligation	19,763	19,458	20,395
Fair Value of Plan Assets	(17,694)	(20,300)	(22,520)
Net Defined Benefit Liability (Asset)	2,069	(842)	(2,125)

(5) The amount of pension insurance funds allocated to the special account of the Social Security Bureau by the mainland subsidiary in accordance with local government regulations is listed as follows (in thousands of NTD):

Items	2023	2024	2025
Pension Insurance Funds	2,017	2,408	3,191

Implementation of Gender Equality

Our company values workplace gender equality. As of the end of December 2025, the company has a total of 57 employees, including 21 men and 36 women, with women accounting for 63% of the workforce. Additionally, women hold 35% of all supervisory positions. In terms of policy, the company has established internal regulations such as the "Employee Handbook" and "Work Rules," which clearly protect employee rights regarding working hours, leave, and gender, ensuring proper care for all employees, including special attention to pregnant employees. We are committed to creating a gender-equal and friendly workplace environment, fostering a diverse and inclusive workplace where women can fully utilize their talents and set a positive leadership example in the industry.

(II) Losses incurred due to labor-management disputes during the most recent year and as of the date of publication of the annual report, and the estimated amount and responses for such disputes that may occur currently or in the future: None.

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VI. Management of Information Security

(I) The information security risk management framework, the information security policy, specific management plans and the resources invested in information security management

Strategy and framework for business information security management

(1) To ensure normal operation of the information equipment and systems related to our operations, we have established a strategy and a framework for information security management, including defining relevant regulations and human–machine operating procedures, as well as enhancing management of the preservation and protection of operating assets.

(2) We also promote employees’ information security awareness and strengthen their awareness of related responsibilities.

(3) We ensure that our key core systems maintain a certain level of system availability.

Information security policy

(1) To ensure the security of our information resources, we have established an information security team and policy.

(2) The Information Department of our group is responsible for establishing information security regulations and systems, planning and executing information security operations, and promoting and implementing related policies to ensure the security of our information resources.

Strengthening information security awareness

To continuously enhance and improve the information security awareness of corporate group employees, the information security unit initiates information security campaigns. These campaigns promote basic information security concepts, the latest information security trends, and the newest hacking techniques. The information security unit also sends out periodic security announcements, reminding employees of adjustments to corporate group security rules and potentially risky behaviors, aiming to reduce the likelihood of information security incidents.

Specific management plans

(1) Access control, regularly reviewing personnel access records, and taking protective measures for physical information equipment.

(2) User authorization review procedures to protect the security of access to our data.

(3) Establishing an information security organization responsible for implementing information security policies, and promoting and supervising our activities concerning information security prevention, crisis reporting and emergency response.

(4) Prohibiting the use of non-copyrighted software to prevent malicious software such as viruses and Trojans.

(5) Strengthening data security and backup mechanisms.

(6) Closely monitor security vulnerability advisories, promptly remediate high-risk vulnerabilities, and regularly assess and patch security vulnerabilities of equipment, system components, database systems, and software.

(7) Upgrade the level and mechanisms of information security equipment to enhance overall defensive capabilities.

(8) Holding regular meetings to evaluate and review amendments to the information security policy.

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Resources invested in information security management

In order to improve our overall information security capabilities, we have completed enhancement measures for the following management plans:

(1) Strengthening internal and external defense mechanisms as well as the capabilities for detection and analysis of abnormal traffic.
(2) Enhancing data protection mechanisms and backup operations, and improving the framework for data backup and recovery.
(3) Appointing a chief information security officer and a dedicated information security team.
(4) Information security education, training, and awareness campaigns.
(5) Joining organizations that share intelligence of information security.
(6) Continuous investment in strengthening information security protection.

In 2025, the Company invested a total of approximately NT$2.06 million in the acquisition and replacement of information security-related hardware and software.

(II) In the most recent year and as of the date of the annual report's printing, losses incurred, potential impacts, and response measures due to significant cybersecurity incidents

In the most recent fiscal year and up to the date of the annual report's publication, there have been no significant incidents related to information security that have resulted in financial compensation or losses.

It has proven that our cybersecurity management measures are effective. Nevertheless, we still need to remain vigilant at all times and further strengthen our capabilities in information security protection and risk management. In the event of an information security incident, the information security team must identify the type of the incident and find the source of its problem as soon as possible, deal with the incident promptly, and report it to the competent authority to minimize losses.

VII. Important contracts

Nature of contract	Contracting party	Start and expiry dates of contract	Main subject	Restrictions
Patent License Agreement	MS	June 2005 to the date of termination of the contract by both parties.	Acquisition of a patent license for tilt wheel function.	Compliance with a confidentiality agreement
Patent License Agreement	MS	January 2006 to the date of termination of the contract by both parties.	Acquisition of a patent license from U2 Tech Detective Function.	Compliance with a confidentiality agreement
Patent Portfolio License for DVB-T, MPEG-L, MPEG-4 Visual	MPEG LA, LLC	January 29, 2008 – December 31, 2010. The contract is automatically renewed for another 5-year term upon its expiration.	Acquisition of patent licenses from the company MPEG LA for DVB-T, MPEG-2 and MPEG-4.	None
Contract manufacturing agreement	JC Development Co., Ltd.	December 1, 2009 – December 1, 2012. The contract is automatically renewed for another one-year term upon its expiration each year.	OEM manufacturing of project products.	Compliance with a confidentiality agreement
General Purchasing Agreement	Philips Consumer Lifestyle	December 17, 2009 – December 17, 2010. The contract is automatically renewed for another	OEM manufacturing of project products.	Compliance with a confidentiality

Nature of contract	Contracting party	Start and expiry dates of contract	Main subject	Restrictions
	International B.V.	one-year term upon its expiration each year.		agreement
JIT purchasing agreement	Inventec Corporation	June 26, 2009 – June 25, 2010. The contract is automatically renewed for another one-year term upon its expiration each year.	OEM manufacturing of project products.	Compliance with a confidentiality agreement
Hardware Product Purchase Agreement	HP	January 10, 2012 – January 9, 2015. The contract is automatically renewed for another one-year term upon its expiration each year.	OEM manufacturing of project products.	Compliance with a confidentiality agreement

VIII. Code of Conduct or Ethics for Employees

(I) Integrity is the primary focus of the business philosophy and corporate culture of KYE.

(II) The new employees of KYE are required to sign a “Declaration of Employment Commitments” and observe the relevant ethical requirements in the “Code of Service for Employees” under Chapter 2 of KYE’s personnel regulations, as follows:

All employees of KYE shall faithfully perform their duties, comply with the bylaws and regulations of KYE, obey instructions from their supervisors of all levels, and adhere to the following principles:

The employees of KYE shall work conscientiously, take good care of public property, reduce consumption, improve quality, increase production, and keep any information regarding business or work confidential externally.
For work and business matters, the employees of KYE shall report them in accordance with the related procedures without bypassing their supervisors except for emergency or specific situations.
The employees shall not see their relatives or friends or be absent without leave during work hours without permission. If the employee needs to receive visitors for reasonable matters, he/she shall see them in a specific reception room.
The employees shall not bring any dangerous items specified in the Controlling Guns, Ammunition and Knives Act or any recording devices, or inflammable or explosive materials not related to production or business into the work premises.
The employees shall not carry any public property out of the premises or read any document, letter, design, drawing or information not handled thereby without permission.
Except for leave of absence, the employees shall be on duty at the specified time and punch in/out in person without doing so by asking others or on behalf of them, and shall not be absent without leave.
The employees shall not refuse to obey their assignment to any works for its business’s needs without legitimate reasons as long as the employment contract is not violated, employee remuneration and other employment conditions are not changed in an unfavorable way for the employees, and they have adequate competence to perform such work.
The employees shall wear ID badges during work hours and regulation safety gear in other working premises. If an employee loses his/her ID badge, he/she shall apply for reissue and pay a fee according to the regulations.

The employees shall put documents or materials in order before getting off duty, and shall return their ID badges, business cards, seals, tools, materials, appliances, and individually-borrowed items before leaving their present employment.
The employees shall not enter into any contracts (e.g. distribution contracts, agency contracts, license contracts) in the name of KYE unless authorized in writing by KYE.
The employees shall not establish any loan relationship in private with any suppliers or customers of KYE in any form and receive any improper gains, as well as engaging in any behavior of offering or accepting a bribe.
The employees shall comply with the management rules established by KYE and be responsible, under criminal and civil laws, for compensation for all damages directly or indirectly incurred by KYE due to the employees' behavior regarding the embezzlement of property, gross negligence, or violation of rights and interests of KYE or individuals during the employment period.
During the employment (engagement) period, all the information, inventions and creations (including the reformed version thereof) developed or designed solely by an employee or jointly with other employees are the property of KYE. Relevant personnel shall be obligated to assist KYE in obtaining related intellectual property rights and providing R&D-related materials. The employees of KYE shall not apply for a patent or copyright for the aforementioned inventions or creations without the written consent of KYE. If an employee applies to any country for a patent or copyright for products related to the business of KYE within six months after ending their present employment, and the subject of the application is deemed a product created by the employee during his/her employment with KYE, the employee shall assign the patent of the subject to KYE.
During employment, the employees of KYE shall not, without the written consent of KYE, actively or passively disclose any trade secrets obtained or known directly or indirectly due to functions, regional connections, or relations with others to any third party, including any companies, groups or individuals in any way with or without compensation, and shall also not pry about or steal any business secrets for their own interests. The following are the trade secrets of KYE:

(1) All materials, regulations, rules, records, contracts and data, and technological or patent information, which is not limited to unpublished patents.

(2) All business information, such as product sales plans, advertisement plans, customer information, the sales performance of KYE, product costs and other business secrets.

(3) All financial and personnel information, such as the financing, asset investment plans, financial statements, personnel change plans and salaries of KYE.

(4) Other documents marked with the word "Confidential" or "Secret" by KYE, or items and regulations designated as confidential by KYE.

(5) The trade secrets of other companies or parties with which KYE has entered into confidentiality agreements.

The employees shall not quote any information of KYE in their own articles or publish such articles by others unless with written approval from KYE, and shall undertake to never disclose or steal the above-mentioned trade secrets in

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any case after ending their present employment, including providing services for other companies, starting a company, or entering into partnership with others.

The employees affirm that their employment with KYE does not violate any contractual obligations with their former employing companies.
The employees guarantee that they will never use the intellectual property rights or trade secrets of other companies in their current work or disclose them to any third party.
If the employees engage in any action in violation of their commitments with knowledge of the foregoing clauses and the trade secrets of KYE, they will bear all civil and criminal liabilities for damages.

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IX. Working Environment and Measures for Protection of the Safety of Employees

Category	Item	Description
Employee safety	Building safety management	1. KYE has implemented the biannual building high-voltage power maintenance and inspection, elevator maintenance twice one month, two monthly generation test for generator sets, regular maintenance and servicing of the central air conditioning unit annually, quarterly maintenance and overhaul for fire safety equipment, cleaning and water quality inspection of water towers is conducted annually, and other regular equipment maintenance plans to protect the safety of the employees.
2. KYE has engaged professional companies to perform sterilization every six months.
3. KYE has engaged qualified security companies to perform access control and maintain security.
	Disaster prevention and measures in response	1. KYE has divided its staff members into groups to conduct fire escape training and rehearsals of disaster prevention and responses every six months in cooperation with local fire protection bureaus.
2. KYE has implemented the requirements of the “Plan for Crisis Management in the Event of Interruption of Operations” to prevent and mitigate situations that interrupt operations and endanger personal safety as a result of emergencies or disasters.
Employee insurance	Social insurance	1. All employees are covered by labor and health insurance in accordance with the law and insurance ranges.
2. All personnel dispatched overseas are covered by social insurance pursuant to local laws.
	Group insurance	All employees are covered by life insurance, accident insurance, medical insurance for accidents, general medical insurance, cancer insurance and occupational accident insurance.
	Travel insurance	Employees taking business trips are additionally covered by travel insurance (including flight insurance) to ensure their personal safety during the trips.
Physical and mental health	Health examination	KYE has engaged qualified medical institutions to conduct regular health examinations as required by law and requested the Department of Health/health centers to supervise the examinations in order to maintain the quality of the examinations.
	Medical care	KYE has combined the resources from district hospitals and medical center hospitals
	Prevention of sexual harassment	KYE has incorporated the Sexual Harassment Prevention Act into the employee work rules and has established a Sexual Harassment Prevention Committee consisting of specialized members to deal with related matters.
	Educational training	KYE offers courses on issues including emotional management, stress reduction training, interpersonal communication, prevention of workplace harassment and prevention of occupational injuries.
	Others	1. KYE conducts biannual general first aid training for employees.
2. KYE provides employee welfare measures, such as activities for the three traditional holidays, domestic and overseas travel, employee birthday celebrations, scholarships, cash gifts to the elderly for the Double Ninth Festival, employee cafeteria, subsidies for marriage, funerals and hospitalization, healthcare, and other programs.
3. KYE encourages its employees to take part in club activities.

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Chapter 5. Review and Analysis of Financial Conditions and Financial Performance and Risk Events

I. Review and Analysis of Financial Conditions

Table of comparison and analysis of financial conditions
Unit: NTD thousand; %

Year Item	2025	2024	Difference
			Amount	%
Current assets	1,762,559	1,874,936	(112,377)	(5.99)
Property, plant and equipment	636,108	630,586	5,522	0.88
Other assets	1,141,292	1,120,226	21,066	1.88
Total assets	3,539,959	3,625,748	(85,789)	(2.37)
Current liabilities	190,105	205,584	(15,479)	(7.53)
Non-current liabilities	256,886	288,861	(31,975)	(11.07)
Total liabilities	446,991	494,445	(47,454)	(9.60)
Equity attributable to owners of the parent company only	3,049,919	3,097,272	(47,353)	(1.53)
Share capital	2,215,285	2,215,285	0	0.00
Capital reserves	227,517	227,448	69	0.03
Retained earnings	1,198,507	1,244,323	(45,816)	(3.68)
Other equity	(591,390)	(589,784)	(1,606)	(0.27)
Non-controlling interests	43,049	34,031	9,018	26.50
Total equity	3,092,968	3,131,303	(38,335)	(1.22)
Main reasons for material changes in assets, liabilities and shareholders' equity (changes exceeding 20% between these periods to the amount more than NTD 10 million) in the most recent two years, the effects of such changes, and future plan in response: None.

II. Review and Analysis of Financial performance

Table of comparison and analysis of financial performance
Unit: NTD thousand; %

Item	2025	2024	Amount of increase (decrease)	Percentage of change (%)
Operating revenue	959,364	978,816	(19,452)	(1.99)
Operating costs	566,262	584,444	(18,182)	(3.11)
Gross operating profit	393,102	394,372	(1,270)	(0.32)
Operating expense	340,222	320,237	19,985	6.24
Net operating profit (loss)	52,880	74,135	(21,255)	(28.67)
Non-operating revenues and expenses	38,969	106,371	(67,402)	(63.37)
Pre-tax net profit (loss) of continuing operations	91,849	180,506	(88,657)	(49.12)
Income tax expense	21,592	37,702	(16,110)	(42.73)
Net profit (loss) of continuing operations for the current year	70,257	142,804	(72,547)	(50.80)
Loss of discontinued operations	0	0	0	0
Net profit (loss) for the current year	70,257	142,804	(72,547)	(50.80)
Other comprehensive income	15,727	35,920	(20,193)	(56.22)
Total comprehensive income in the current year	85,984	178,724	(92,740)	(51.89)
Net profit (loss) attributable to owners of the parent company only	70,983	142,647	(71,664)	(50.24)
Total comprehensive income attributable to owners of the parent company only	86,593	178,693	(92,100)	(51.54)
1. Analysis and description of changes in the percentage of increase/decrease in the most recent two years:
Operating profit decreased compared to the previous year, primarily due to the recognition of a relatively large amount of overdue credit impairment losses in 2025, as well as increases in certain operating expenses. Non-operating net income also decreased compared to the previous year, mainly because the prior year recognized a one-time gain from the disposal of investment properties, and the strong appreciation of the New Taiwan Dollar in 2025 resulted in foreign exchange losses.
As a result of the above factors, profit before tax decreased by nearly 50% compared to the previous year. Income tax expenses declined accordingly, and overall net profit and net profit attributable to owners of the Company decreased by approximately 50% compared to the previous year. In addition, the appreciation of the New Taiwan Dollar also led to a significant decrease in other comprehensive income.
2. As in prior years, there has been no change in the scope of business of KYE, which mainly includes computer peripherals, video and optoelectronic products, and consumer electronics.
3. Expected sales volume of KYE in the next year and its basis, and the main factors affecting the continued growth or decline of the expected sales volume of KYE.

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Main product	Expected sales volume (thousand sets) in 2026	Growth rate
Computer peripherals	5,531	53.47%
Video image products	302	-16.48%
Consumer electronics	163	2.79%
For the next year, computer peripherals and video image products will remain the primary force driving the operating revenue of KYE. In 2026, shipments are expected to continue to reflect the new social and economic patterns and trends of 2025, expanding market size with new models of products with a high price-performance ratio to increase the operating revenue and gross profit contribution.

III. Review and Analysis of Cash flows

Analysis of cash flows
Unit: NTD thousand

Starting cash balance①	Annual net cash flow from operating activities②	Annual net cash flow besides operating activities③	Cash balance① + ② + ③	Remedy for cash shortage
				Investment plan	Financial management plan
1,257,591	103,837	(225,508)	1,135,920	None	None
1. Analysis of changes in cash flows of the current year (1) Operating activities: In 2025, the net cash inflow from operating activities was NTD 103,837 thousand, due to our main focus of the operational strategy is on inventory destocking and increasing cash reserve. The reduction in inventory and interest income thereby result in contributed to the continuous inflow of net cash from operating activities. (2) Investing activities: In 2025, the net cash outflow from investing activities was NTD 26,839 thousand, mainly due to the purchase of properties and pre-sold properties. (3) Financing activities: In 2025, the net cash outflow from financing activities was NTD 164,829 thousand, the main reasons are the distribution of cash dividends and repayment of long-term bank borrowings and lease liabilities.
2. Analysis of the remedy for cash shortage and liquidity The cash at the end of 2025 was approximately NTD 1.136 billion. There was no cash shortage.
3. Analysis of cash liquidity for the next year The expected amount of cash in the next year is NTD 1.036 billion with good liquidity, and there will be no cash shortage.
Starting cash balance①	Annual net cash flow from operating activities②	Annual net cash flow besides operating activities③	Cash balance① + ② + ③	Remedy for cash shortage
				Investment plan	Financial management plan
1,135,920	100,000	(200,000)	1,035,920	None	None

IV. Effect of material capital expenditure in the most recent year on financial business

(I) Purposes of material capital expenditure and the sources of funding

The board of directors of the Company’s subsidiary, Taiwan Micro Technology Co., Ltd., resolved in January of Year 2025 to acquire a pre-sale property located in Beitou District, Taipei City, for future operational use, with a total purchase price of approximately NT$262 million. As of the end of Year 2025, payments made amounted to NT$31 million. The funding sources for the acquisition of the pre-sale property include internal funds and bank borrowings.

(II) Expected benefits: None.

V. Reinvestment policy for the most recent year, the main reasons for profits or losses, the improvement plan and the investment plan for the next year

Reinvestments by KYE are focused on long-term strategic objectives. In 2025, the Company and its subsidiaries recognized a loss on reinvestment accounted for using the equity method of NTD 5,228 thousand. Compared to the profit recognized in the previous year, the result decreased by approximately NTD 12,000 thousand, mainly due to operating losses of certain associates accounted for using the equity method. KYE will continue to prudently assess its reinvestment plans for long-term strategic investments.

VI. Analysis and assessment of risks during the most recent year and as of the date of publication of the annual report

(I) Effects of interest rate, exchange rate change and inflation on the profit/loss of your company, and future measures in response

Since the Federal Reserve ended the current interest rate hiking cycle in 2023, it has implemented cumulative rate cuts of 175 basis points over the past two years, bringing the federal funds rate to a range of 3.5% to 3.75%. In 2026, amid an environment of rising inflationary pressures driven by the U.S.-Iran conflict and the lagged effects of tariff policies, the Federal Reserve is expected to pause further rate cuts, with the possibility of future rate hikes not ruled out. The Company has maintained sound operations with ample net cash and low leverage, and therefore the impact of interest rate fluctuations remains limited.

In terms of exchange rates, during 2025 the USD experienced heightened volatility under uncertainties surrounding U.S. tariff policies, while the New Taiwan Dollar also exhibited increased fluctuations. The NTD depreciated to an eight-year low of 33.2 at the end of the first quarter, then reversed sharply amid weakening USD conditions before appreciating overall by approximately 3.9% for the year. As the Company is primarily export-oriented, exchange rate movements are closely linked to gross margins and foreign exchange gains or losses. Although most products are priced in USD, the Company’s broad sales footprint, particularly in emerging markets, exposes it to risks from sharp exchange rate fluctuations affecting local purchasing power and pricing. The Company adopts a natural hedging strategy, maintaining balanced positions of foreign-currency assets and liabilities, and the related impact remains within a controllable range.

In terms of inflation, while energy, industrial metals, and raw material prices remained relatively stable in 2025, heightened inflationary and cost pressures are expected in the current year due to the U.S.-Iran conflict and surging oil and commodity prices. Nevertheless, supported by its high gross margin structure, the Company does not expect material adverse impacts on operating performance or product competitiveness. The Company will continue to introduce cost-effective

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new products and actively enhance production and logistics efficiency while reducing costs to mitigate inflationary risks. Nevertheless, we will continue to introduce new products with a higher price-performance ratio, and we will adopt strategies including actively increasing efficiency in production and logistics and lowering costs.

(II) Policies on high-risk and high-leverage investments, loaning of funds to others, endorsements/guarantees and transactions of derivatives, the main reasons for profits or losses, and future measures in response

KYE has not engaged in any high-risk and high-leverage investment. All of its investments have been made after prudent assessments in accordance with applicable laws and regulations, its internal control system, and its administrative bylaws. Loaning of funds to others and provision of endorsements/guarantees are in accordance with applicable laws and regulations and internal operating procedures. Neither KYE nor any of its subsidiaries has loaned funds to others or provided endorsements or guarantees. KYE has engaged in transactions of derivatives primarily for hedging. All relevant activities have been prudently carried out in accordance with applicable laws and regulations and internal operating procedures after taking into account possible risks. KYE had not engaged in any transaction of derivatives in prior years.

(III) Future R&D plan and the expected R&D expense to be invested

Although Copilot-related projects were launched as scheduled in 2025, the application and market adoption of Microsoft Copilot did not progress as expected and require additional time to materialize. By contrast, audiovisual and gaming products have shown a gradual recovery in growth. Accordingly, in 2026, the Company will adjust its product development priorities, placing audiovisual and gaming products first, with business applications as a secondary focus, and will additionally introduce live-streaming products.

(1) At least three models of lightweight and fast-charging mice.
(2) At least three models of compact keyboards..
(3) Four models of Bluetooth and USB speakers.
(4) Four models of Bluetooth and USB headphones.
(5) Two models of lightweight gaming mice, one gaming keyboard, one flight joystick, and one game controller.
(6) High-definition automotive and motorcycle dash cameras.
(7) High-definition live-streaming webcams and wired/wireless live-streaming microphones.

KYE will continue to integrate our R&D teams, and expect to maintain our R&D expense to be invested in 2025 accounts for 0.3% to 1.0% of the revenue.
Main factors affecting the success of R&D in the future:

(1) Whether the product specifications, pricing, and positioning are accepted by the market.
(2) Whether the company is differentiated from competitors or has competitive advantages
(3) Whether products are launched on schedule.
(4) Whether sales of new products meet projected targets.

(IV) Effects of important changes in domestic or foreign policies and laws on the financial business of your company, and measures in response: None.

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(V) Effects of changes in technology and the industry on the financial business of your company, and measures in response

Effects on the financial business of your company

(1) With the rise of AI, personal computers, smartphones, and mobile peripherals are being upgraded to incorporate AI applications. Peripheral devices are also being upgraded to meet the demand for AI computer peripherals and AI mobile peripherals. Products without AI-related applications may be regarded as traditional peripherals.

(2) In addition, the European Union mandates that mobile phones and other portable electronic products must adopt USB-C charging interfaces. Products that do not comply with USB-C standards will not be allowed to be sold in the European Union. The habit of listening to digital and online music with mobiles or tablets other than computers has changed. The need for listening to music anytime, anywhere has increased the demand for portable wireless Bluetooth headsets.

(3) The popularity of online streaming and improvements in network bandwidth have increased the demand for listening to music, watching video content, live streaming, and playing games online, thereby driving demand for headphones, microphones, speakers, network cameras, and gaming devices.

Measures in response

(1) KYE has continued to deploy AI peripherals by introducing Copilot-related peripherals, including mice, keyboards, and headsets, to enhance the convenience of AI applications and strengthen competitiveness.

(2) KYE has introduced USB-C charging interfaces to ensure that Bluetooth peripherals, including mice, keyboards, speakers, and headsets, comply with European Union regulations and avoid sales restrictions.

(3) KYE has introduced gaming-related peripherals, including lightweight gaming mice, gaming keyboards, game controllers, and gaming headsets, and will also launch high-definition network cameras and live-streaming microphones to align with the growth trend of the streaming market.

(VI) Effects of changes in corporate image on the crisis management of your company, and measures in response

Effects on the crisis management of your company

In the past three years, our company's operating performance has gradually improved. KYE has kept reporting to and communicating with shareholders at annual shareholders' meetings regarding the status of operations. KYE has also published information related to operations on its website on a timely basis and held periodic investor conferences. Committed to openness and transparency in information disclosure, KYE has maintained good communication with different stakeholders and remained effective in compliance with applicable laws and regulations.

Measures in response

In 2022, KYE established the Sustainable Development Promotion Committee and the Risk Management Committee. KYE also planned to incorporate the principles of the UN Global Compact and adopt the sustainability indicators of the Sustainability Accounting Standards Board (SASB). By the end of September 2023, we completed the preparation and disclosure of the previous

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year's (111) sustainability report, in accordance with the requirements of the new version of GRI Standards (2021). Adhering to the highest principle of ethical management, KYE has continued to improve its operating performance and performance of corporate governance evaluation. It is also committed to sustainable development in social, environmental and economic aspects, and maintaining good communication with stakeholders to create higher added values and enhance its corporate image.

(VII) Expected benefits and possible risks of merger, and measures in response: None.

(VIII) Expected benefits and possible risks of expansion of premises, and measures in response: None.

(IX) Risks faced during the concentration of purchases or sales, and measures in response: None.

(X) Effects and risks of substantial transfers or changes of shares held by directors or shareholders with a shareholding of more than 10% to your company, and measures in response: None.

(XI) Effects and risks of changes in management to your company, and measures in response: None.

(XII) Litigious or non-litigious events

Material litigious, non-litigious or administrative dispute events involving your company that are finalized or pending: None
Material litigious, non-litigious or administrative dispute events involving the directors, president, de facto owner, major shareholders with a shareholding of more than 10% and subordinate entities of your company that are finalized or pending: None.

(XIII) Other significant risks, and measures in response:

Intellectual Property Risk Management:

Intellectual Property Management System and Plan

(1) Personnel Control

Employees' conduct is regulated and controlled in accordance with the Employment Undertaking, Personnel Regulations, and Work Rules.

(2) Document and Procedure Control

Intellectual property rights are protected in accordance with the Operating Guidelines for Patent, Trademark, and Copyright Application Management.
The Company's trade secrets are safeguarded in accordance with the Document Control Procedures.
Comprehensive regulations and implementation guidelines are provided for various types of intellectual property derived from business operations in accordance with the Procedures for the Acquisition, Maintenance, and Utilization of Intellectual Property Rights.

(3) Internal Control and Internal Audit Operations

Continuous and thorough reviews are conducted to ensure that procedural controls and personnel controls comply with relevant control requirements and regulations.

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(4) Through real-time monitoring of computers, networks, and information flows by the information security department, risks of information leakage caused by procedural lapses or improper personnel behavior are reduced.

Implementation Status and Results of Intellectual Property Management

(1) As of the end of 2025, the Company has obtained approximately 1,790 patents, mainly distributed across Europe, the United States, Mainland China, Taiwan, and other countries.

(2) As of the end of 2025, the Company has obtained approximately 490 trademarks, covering more than 90 countries worldwide.

(3) As of the end of 2025, the Company has obtained a total of 90 domain names, spanning more than 50 countries worldwide.

(4) The Company regularly reports the implementation status and results of its intellectual property management to the Board of Directors in the first quarter of each year. The most recent report was submitted on December 22, 2025.

VII. Composition and Operation of the risk management committee

Based on the source, nature, and type of risk, the sources of corporate risks can be categorized as external and internal. External risks include politics, policies, laws and regulations, the overall international economic and financial environment, geopolitical conflicts, technological innovation, natural disasters and diseases. Internal risks include strategic, operational, and financial risks. Thus, we have categorized the risks faced by our operations into operational aspects, financial aspects and operating procedures, and includes the environmental risks, emerging risks and issue risks generated by changes in the external environment into the scope of risk management. Due to different sources, levels of concern and duration of effect of risks, they cannot be supervised and controlled by a single department or mechanism. Therefore, we established: (1) the departments concerned with daily operational activities; (2) a department for the promotion and implementation of risk management; (3) the Audit Office; and (4) the Board of Directors and the Risk Management Committee, as the four lines of defense for our risk management. Based on the characteristics of the industry and taking into account the operating environment and the characteristics of daily operations, the departments concerned with operational activities will engage in risk identification, risk analysis and risk assessment, and recommend measures in response to risks. The department for the promotion and implementation of risk management will coordinate with the departments concerned with operational activities in implementing and monitoring the aforementioned management procedures and the compliance and reporting mechanism. It also regularly submits reports on the overall implementation of risk management to the Board of Directors and Risk Management Committee to supervise the effective operation of the risk management mechanism. The audit department is responsible for evaluating the effectiveness of the design and implementation of the control mechanism.

In terms of the period of effect, the risks are divided into two levels: short-term operational risks and medium-to-long-term strategic risks:

Short-term operational risks: Under the short-term trend that can be easily resolved within a year, KYE manages the short-term risk events that affect its business or operations, such as issues of operational safety, management, and financial risks, to reduce risks, enhance the ability to respond to crises, and protect the interests of stakeholders.

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Mid-to-long-term strategic risks: Trending risk events that affect KYE's strategy or structure for more than a year are difficult to mitigate in a short period of time. KYE regularly reviews and analyzes its current positioning every three to five years. Additionally, KYE conducts SWOT analysis on the advantages and disadvantages of the internal and external environments by collecting internal and external industry information regarding forecasts of market trends and competitor dynamics to formulate the vision, mission and medium-to-long-term strategies of KYE.

(I) Structure of the risk management organization

(II) The relevant responsibilities of the risk management organization are as follows:

Board of Directors: As the highest governance and decision-making body for risk management, the Board of Directors is responsible for approving risk management policies and frameworks.
Risk Management Committee: The Risk Management Committee has been established under the Board of Directors for supervision and effective operation of risk management mechanisms. The Board of Directors has adopted a resolution to appoint three independent directors as members of the committee, of which one independent director is elected to serve as the chairperson and convener.

The Risk Management Committee may designate a specialized (or existing) department or manager of KYE as the department for the promotion and implementation of risk management, which is responsible for convening meetings of risk subcommittees, coordinating with the designated operational departments in environment building and risk identification, analysis, assessment, control and supervision, and submitting regular reports on the implementation thereof to the Risk Management Committee.

The Risk Management Committee is responsible for supervising and ensuring that the implementation of risk management is in accordance with the policies adopted by the Board of Directors, and submitting at least one report on the overall status of risk management to the Board of Directors each year.

The designated operational departments or persons in charge of risk response plans are responsible for assessing the likelihood and degree of impact of each risk factor based on their responsibilities, formulating and implementing necessary measures, and properly managing each risk.
Audit Office: It is responsible for formulating annual audit plans according to

the risk management policies and results of risk assessment, conducting system audits according to the plans, assisting the Board of Directors in supervising and controlling potential risks in the implementation of decisions, ensuring that all operational risks are effectively managed and controlled, and providing recommendations for improvement in a timely manner.

(III) The Risk Management Committee convened a meeting on November 11, 2025, to review and approve the company's risk management execution status for the year 2025 and the analysis and assessment report of internal and external environmental and operational risks for the year 2026. The committee also examined the risks associated with the external macro political, economic, and financial environments, as well as internal operational issues related to business, finance, compliance, sustainability, and other topics. A report was submitted to the board of directors.

VIII. Risk Management, Task Force on Climate-related Financial Disclosures, and Greenhouse Gas Management' in this report under Section

(I) Risk Management 1. Risk management framework

Risk items	Responsible department	Risk events
Strategic risks	Board of Directors	● Developing future business strategies for the company. ● Establishing risk management policies and frameworks.
Supervising risk management operations	Risk Management Committee	● Reviewing the implementation of risk management and regularly reporting to the board of directors ● Implementing risk management decisions made by the board of directors.
Operational and market risks	General Manager and various business departments	● Planning for the production and sales of products. ● Improving product quality and reducing production costs to increase company profits.
Financial and liquidity risks	Finance Accounting Division	● Managing funds allocation. ● Monitoring interest rates and exchange rates. ● Managing bank facilities and maintaining relationships.

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Risk items	Responsible department	Risk events
Customer credit risks	Finance Accounting Division	● Establishing customer credit limits and evaluating customer creditworthiness.
● Managing accounts receivable and collections.
Legal risks	Intellectual Property Legal Department	● Ensuring compliance with laws, reviewing contracts to mitigate legal risks, and safeguarding company assets and interests.
Occupational health and safety risks	Human Resource Department	● Implementing safety and health management.
● Protecting employee rights.

Risk management strategy

Risk Category	Risk Description	Management Strategy
Sustainable Environment	The deployment of sustainability-related issues	● The short-term strategy is to develop sustainable concept products.
● The long-term strategy is to continuously monitor the threats and opportunities posed to the company by net zero carbon emission risks, and then implement relevant response measures.
	The increase in greenhouse gas emissions	● Gradually replace equipment with lower energy efficiency; adopt energy-saving devices and activate power-saving mode.
● Unnecessary paper documents are stored electronically to reduce paper usage.
● Encourage employees to bring their own eco-friendly tableware and refrain from using disposable plastic utensils or bamboo chopsticks.

Risk Category	Risk Description	Management Strategy
	Improper waste disposal/low recycling rate	● Products are produced using recyclable materials whenever possible.
● Select recyclable materials for product packaging to reduce the use of non-recyclable plastics.
● Raise employees' environmental awareness and ensure proper implementation of waste sorting and resource recycling.
	Power shortage	● To ensure uninterrupted company operations, the company has emergency generators.
Employees	Human resources and management successors	● As a medium- to long-term risk, the company will continue to focus on operational growth to enhance retention competitiveness, and management will formulate talent recruitment, development, selection, retention, and succession plans.
	Occupational accident occurs	● Provide occupational health and safety education to train new employees.
● Encourage employees diagnosed with COVID-19 or at high risk to work from home or take leave during special epidemic periods.
Operational performance	Integrity-related operational risks	● Request all directors and managers to sign the Code of Conduct statement, and new employees to sign the employment commitment letter.
● Request suppliers and customers to jointly

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Risk Category	Risk Description	Management Strategy
		adhere to integrity regulations, if necessary, to be stipulated in contracts.
	The transparency of information disclosure is insufficient	• According to competent authority requirements, information is disclosed on the market. Observation Post System, and updates are provided on the company's website and annual report for investors' reference.
• Announce financial and operational information within the prescribed deadline.
• Propose gradually advancing the announcement of interim financial information to facilitate investors in obtaining more timely information.
	Difficulty in transformation and decline in market competitiveness	• Maintain good cooperative relationships with suppliers to reduce procurement costs.
• Properly address and handle customer issues to increase customer repurchase rate.
• Grasp market trends to develop new features, energy-saving, and green products.
	Supply chain and inventory management	• Maintain good cooperative relationships with suppliers, enhance their cooperation, and flexibly adjust inventory in response to product market conditions and supply chain demand.
• Seek new suppliers as necessary and strengthen cooperation to reduce

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Risk Category	Risk Description	Management Strategy
		development time and lower supply chain costs.
• Effectively manage inventory through the division of in-house and outsourced production, as well as collaboration in both independent research and cooperative research.
	Economic recession, interest rate, and exchange rate fluctuations	• Allocate resources to develop new applications and target market users for the product.
• Develop product sales, research and development, and marketing strategies, strengthen cooperation with suppliers, and utilize external resources to respond accordingly.
• The USD is the invoicing currency for both purchases and sales of our company. The finance department is responsible for monitoring exchange rate fluctuations and adjusting funds as needed.
• The company's debt-to-total-assets ratio is relatively low, and the cost of funds is not significant. However, the finance department also closely monitors changes in interest rates and adjusts financial asset allocation as necessary to maximize returns on capital.
	Inflation	• Inflation has prompted the Federal Reserve System to implement interest rate hikes, leading KYE Group to plan appropriate positions in USD-denominated assets.

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Risk Category	Risk Description	Management Strategy
		In the environment of interest rate increases and USD appreciation, the group generate significant exchange gains and interest income, thereby mitigating the direct impact of inflation on the company.
● While the direct impact of inflation on the Company within the domestic market was limited, countries in Central and South America are more vulnerable to the effects of USD appreciation, which may cause sharp depreciation of local currencies, severe inflation, and economic downturns, weakening purchasing power. This may indirectly result in reduced revenue from Central and South American customers for the Company. As inflation is a macroeconomic factor beyond the control of individual businesses, the Company will strive to explore opportunities with customers in other regions to achieve risk diversification.
	Geopolitical conflict	● The sales performance of our company's products in certain regions continues to be affected by geopolitical conflicts such as the Russia-Ukraine war, resulting in sluggish sales. Therefore, we need to devise strategies to expand into other regions to diversify the risks arising from geopolitical

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Risk Category	Risk Description	Management Strategy
		issues.
	Policy and regulatory changes	• Our legal and financial personnel possess ample professional knowledge, staying abreast of regulatory changes at all times. They closely collaborate with law firms, accounting firms, and other professional consulting advisors, enabling the company to promptly adjust its policies and responses to regulatory changes.
	Compliance and contract risks	• Regularly review regulatory amendments and conduct compliance assessments to ensure that the company's operations comply with relevant laws and regulations.
• We have established a comprehensive contract review process and ensure that all contracts are reviewed by authorized personnel.
• Strengthening the cultivation of compliance talent.
• The members of the Board of Directors and senior executives attach great importance to compliance principles and convey them to frontline employees.
	Information security	• Gradually update or replace software and hardware within the company's capabilities to enhance information security.

(II) Task Force on Climate-Related Financial Disclosures

KYE Corporation makes reference to the framework of International Financial Reporting Standard S2 (IFRS S2) to disclose information related to its response to

climate change across the four core elements of governance, strategy, risk management, and metrics and targets. Through such disclosures, the Company aims to enable stakeholders to understand the financial impacts of climate-related risks and opportunities, as well as the corresponding response measures adopted by the Company.

Core content	IFRS S2 climate-related disclosures	Response measures of the Company
Governance	A. The role of governance units in climate-related risk and opportunity governance	In accordance with the Code of Practice on Sustainable Development, the Company established the Sustainable Development Committee on November 8, 2022, consisting of three independent directors authorized by the Board of Directors, to be responsible for the Company's sustainable development business strategy and vision, policies and goals, work planning, implementation and review, and review of sustainable development-related systems and regulations, as well as sustainability reports. The Board of Directors and the Sustainable Development Committee are the highest governance units and supervise the implementation of the working group. The Sustainable Development Committee meets every six months to discuss the implementation results of sustainability issues such as climate change-related risks and opportunities, and submit them to the board of directors.
	B. The role of management in climate-related risk and opportunity governance	The Sustainable Development Committee consists of a CEO (served by the General Manager), an Executive Secretary (served by the Head of Corporate Governance), and three working groups, headed by relevant departments and personnel, responsible for the promotion and implementation of the Company's sustainability-related matters, as well as the assessment and management of climate-related risks and opportunities.
Strategy	A. Climate-related risks and opportunities that can reasonably be expected to affect the individual's outlook	Risk/ opportunity type	Risk/ opportunity description	The time period that may be affected
				Short-term (1-2 years)	Medium term (3-4 years)	long-term (5 years or more)
		Regulatory and policy transformation risks	carbon fees, carbon tariff collection and related regulations, and net-zero emissions by 2050		◎	◎
		Market transformation risk	Customers and consumers demand low-carbon products	◎	◎	◎

IFRS S2 climate-related disclosures	Response measures of the Company
	Physical risk	Extreme weather events		◎	◎	◎
	Market Opportunities	Carbon footprint management and product certification			◎	◎
	Market Opportunities	Low-carbon transformation				◎
B.Information on the current and expected impact of climate-related risks and opportunities on the sole proprietorship model and value chain	Risk/opportunity type	Impact on business models			Impact on the value chain
		At present	Expected		At present	Expected
	Carbon fees, carbon tariff collection and related regulations, and net-zero emissions by 2050	There is no impact yet	Rising material and production costs have led to a decrease in operating profits		There is no impact yet	Rising costs for dealers and channels have led to a decrease in profits or passed on to terminal selling prices, affecting procurement and demand
	Customers and consumers demand low-carbon products	Improve energy efficiency Green design	Formulate low-carbon transformation, improve energy efficiency, and circular economy strategies		Launched green design products that are environmentally friendly, energy-saving, and carbon-reducing, enhancing product competitiveness	Low-carbon transformation enhances product value and goodwill
	Extreme weather events	Rising costs	As a result, the transportation of materials and products and the production operation of the factory are affected		Unstable delivery times and rising transportation costs	Unstable delivery times and rising transportation costs
	Carbon footprint management and product	There is no impact yet	Choose a large number of product models and prioritize		There is no impact yet	Product competitiveness

IFRS S2 climate-related disclosures	Response measures of the Company
	certification		the introduction of carbon footprint management strategies
	Low-carbon transformation	There is no impact yet	Invest in renewable energy or energy storage to create carbon sinks in the direction of carbon neutrality	There is no impact yet	Enhance product value and competitiveness
C. Information on the impact of climate-related risks and opportunities on individual strategies and decisions	Risk/opportunity type	Description	Changes in business models and resource allocation
			At present	Expected
	Regulatory and policy transformation risks	Carbon fees, carbon tariff collection and related regulations, and net-zero emissions by 2050	Perform greenhouse gas inventories to understand the organization's carbon emissions. Increase investment in energy-saving equipment and greenhouse gas emission reduction	Evaluate the benefits of renewable energy use. Evaluate the purchase of green electricity or carbon credits. Strengthen the evaluation and management of sustainable supply chains
	Market transformation risk	Customers and consumers demand low-carbon products	Improve energy efficiency Green design	Increase the proportion of recycled raw materials and resources such as alternative raw materials, product packaging material recycling, and low-carbon research and development.
	Physical risk	Extreme weather events	Review high-risk property insurance policies, regularly inspect disaster prevention facilities, and establish emergency response mechanisms and disaster prevention equipment to avoid factory losses.	Reduce supplier concentration, develop more sources, increase procurement flexibility and resilience, and inventory of key products and components.
	Market opportunities	Carbon footprint management and product certification	Reduce product carbon footprint and product supply chain carbon emission management	Product carbon footprint certification and carbon emission labeling, improve resource utilization efficiency, and reduce

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IFRS S2 climate-related disclosures	Response measures of the Company
				greenhouse gas emissions per unit or energy intensity
		Low-carbon transformation	Low-carbon emission process and equipment optimization, lightweight design of packaging and packaging materials, power saving, repeated charging, or energy-saving new products	Invest resources to develop new low-carbon product technologies, increase the proportion of recycled raw materials, and use green energy to meet customer demand for low-carbon products.
D. The impact of climate-related risks and opportunities on the current and anticipated financial condition, financial performance and cash flows of the individual	The company continues to launch cost-effective new environmentally friendly and energy-saving products every year to attract customers to place orders, and continues to reduce plastic and packaging materials in the body and packaging design to help customers reduce transportation costs and storage space, so the impact of climate-related risks on the current financial position, financial performance and cash flow is limited. In addition, the company's consolidated financial report in 2025 added NT$600 for the purchase of new equipment (including the replacement of energy-saving equipment and facilities), and it is expected that the benefits of future revenue increase and efficiency improvement will be greater than the amount of capital expenditure, so the impact on the expected financial position, financial performance and cash flow is also positive.
E. Climate-related scenario analysis and assessment of climate resilience	Risk description	Main assumptions	Select the scenario	Assess impact and resilience
	Carbon fee collection	The company does not use green electricity in the short to medium term, and the proportion of green electricity used in the long term is less than 10%	Achieve carbon neutrality by 2050	1. Assess the impact: In the scenario of achieving carbon neutrality by 2050, the risk of imposing carbon fees is likely to occur in the short, medium, and long term, but under strategies such as green design, low-carbon transformation, and improving energy efficiency, the risk is low and controllable. 2. Resilience: In the future, the company plans to strengthen greenhouse gas
	Customers and consumers demand low-carbon products

Core content	Response measures of the Company
			management, introduce carbon footprint management strategies, invest resources in product carbon footprint certification, and replace energy-saving equipment and pollution emission equipment and management measures.
	Extreme weather events such as rainfall	According to the Sixth Assessment Report (AR6) released by the United Nations IPCC in 2021, in the climate change scenario SSP2-4.5 (moderate emissions) and SSP5-8.5 (heavy emissions)	1. Impact assessment: Based on SSP2-4.5 (moderate emissions) and SSP5-8.5 (severe emissions), the Company has a physical risk of extreme weather in the medium and long term, respectively.
2. Resilience: The Company's Risk Management Committee reviews the impact of physical risks on operations and finances annually and formulates countermeasures.

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Core content	IFRS S2 climate-related disclosures	Response measures of the Company
Risk management	Processes for identifying, assessing, ranking, and monitoring climate-related risks and opportunities	Step1	·The Sustainable Development Committee working group has completed the collection of background information on climate and environmental issues. ·Identification of climate risks and opportunities.
		Step2	·Climate change scenario setting. ·Development of a list of climate risks and opportunities.
		Step3	·Analysis and assessment of climate risks and opportunities using a matrix chart of financial impact severity and likelihood of occurrence. ·Determine major risk and opportunity items.
		Step4	·Assess the financial impact of significant risks and opportunities. ·Develop response strategies, establish performance indicators and objectives.
		Step5	·Continuously review the effectiveness of response strategies. ·Review the effectiveness of performance objective implementation.
		Climate-related risks	The probability of occurrence is low	High probability of occurrence
		The degree of impact is high	·Requirements of customers and consumers for low-carbon products ·Climate change affects production capacity and quality	·Carbon fees, carbon tariff collection and related regulations, 2050 net-zero emissions ·Stricter laws and regulatory requirements ·Rising raw material costs ·Low-carbon processes lead to increased costs and capital investment
	The impact is low	The cost of low-carbon technology transformation ·Lack of electricity and water resources at the operating base	·Other operating costs such as personnel and insurance increased

Core content	IFRS S2 climate-related disclosures	Response measures of the Company
		Climate-related opportunities
The degree of impact is high	● Invest in carbon credit offsets and carbon trading markets	● Low-carbon transformation ● Carbon footprint management and product certification
The impact is low	● Invest in renewable energy business
Climate change-related indicators and targets	A. Information relevant to cross-industry indicator categories (climate-related indicators)	Since 2020, in accordance with ISO 14064-1, we have completed self-inventory of Scope 1 and Scope 2 greenhouse gas emission data. The total Scope 1 and Scope 2 greenhouse gas emissions generated by the Company's Taipei head office (parent company only) and Dongguan factory during the reporting period of the past three years (2023-2025) are as follows
Greenhouse gas emission (Tonne-CO2e)	Taipei Headquarters + Dongguan Factory
Direct emission (Scope 1)	Indirect emission (Scope 2)	Total emission equivalent
2023	33.0854	636.4997
2024	40.5004	374.1681
2025	33.6330	347.1332
B. Information on basic industry indicators	According to its business model, the Company considers the applicability of the disclosure topics in Volume 55 of the IFRS S2 Industry Fundamentals Enforcement Guidelines and related industry basic indicators, and the industry base indicators in the "hardware" industry are as follows:
Strategic Targets	Aspects	Indicators
Indicators	General	Unit of measurement
Green products	Product lifecycle management	percentage of product revenue containing IEC 62474 declarable substances
		Green products
No relevant data was collected because no application was made

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IFRS S2 climate-related disclosures	Response measures of the Company
	Net zero emissions by 2050	Product lifecycle management	The percentage of revenue from eligible products that have obtained energy efficiency certification	quantification	Percentage (%)	TC-H W-41 0a.3	No relevant data was collected because no application was made
	Business continuity goals	Product lifecycle management	the weight of end-of-life products and e-waste recycled; percentage of recirculation	quantification	Metric Tons (t), Percentage (%)	TC-H W-41 0a.4	0%
C. Disclosure of climate-related risk or opportunity targets (climate-related indicators)
	Indicators		Objectives
	Greenhouse gas inventory		Since 2020, in accordance with ISO 14064-1, we have completed self-inventory of Scope 1 and Scope 2 greenhouse gas emission data
	Greenhouse gas emissions		Taking 2022 as the base year, the average annual reduction will be more than 1%, and by 2030, it will be reduced by more than 8%
	Electricity consumption		Reduce by more than 1% per year
	Waste disposal volume		By 2030, it will reduce by an average of more than 1% per year
	Water consumption		By 2030, it will reduce by an average of more than 1% per year

(III) Greenhouse Gas Management

Greenhouse gas policy statement

In recent years, the depletion of the ozone layer and global warming have recaused abnormal and extreme weather conditions. KYE is committed to aligning with global issues and responding to government policies by formulating climate adaptation strategies, reducing and managing greenhouse gas emissions, and fulfilling environmental justice, thereby fulfilling our shared responsibility to protect the Earth's environment. Greenhouse gas management involves implementing measures to limit the total allowable emissions from greenhouse gas emission sources, reducing the impact of greenhouse gas emissions on ecology and climate. Our company's carbon reduction target is to reduce the intensity of Scope 1 and Scope 2 greenhouse gas emissions by 8% by the near-term target year of 2030, using 2022 as the base year. Additionally, for Scope 3 carbon emissions reduction actions, we will require suppliers to gradually provide their electricity-related carbon emission data as a reference for future Scope 3 emissions management.

Targets and achievement on deduction of greenhouse gas emissions

The purpose of conducting a greenhouse gas inventory is to understand the company's greenhouse gas emissions and to plan greenhouse gas management measures and reduction plans to achieve energy conservation and carbon reduction goals. KYE mainly produces keyboards, mice, and computer

peripherals, and the energy used in the production process is all purchased electricity. The company conducts greenhouse gas inventories for both its Taipei headquarters and Dongguan factory, establishing a list of emissions sources categorized into direct emissions and energy indirect emissions. Direct emissions (Scope 1) include refrigerants, gasoline, diesel, fire extinguishers, and septic tanks used in the factories, while energy indirect emissions (Scope 2) come from purchased electricity. From 2022 to 2025, the electricity usage at the Dongguan factory has decreased annually, while the Taipei headquarters only consumes electricity for administrative operations.

KYE has set an annual greenhouse gas emission reduction target of 1% compared to the previous year, and a 1% reduction in electricity consumption at the Dongguan plant compared to the previous year. To achieve these reduction targets, KYE tracks progress through the Sustainable Development Committee and invests in smart manufacturing improvements to enhance energy-saving and carbon reduction performance in our processes. Additionally, we implement carbon reduction measures across various aspects such as material design selection, local procurement strategies for suppliers, energy-saving production, and green transportation, based on the product life cycle concept, to achieve KYE's carbon reduction goals at each stage. Through these carbon reduction efforts, the Scope 1 and Scope 2 greenhouse gas emissions in 2025 have significantly decreased by 8.18% compared to the same period in 2024, meeting the annual target.

In aspect of energy management, KYE actively promotes various energy reduction measures, selecting equipment with high energy efficiency and energy-saving designs to reduce energy consumption for both the company and its products, and expanding the use of renewable energy to optimize energy use efficiency. In 2025, total electricity consumption amounted to 732,348.6 kWh, representing a reduction of 25,076.6 kWh (3.31%) compared to 2024, thereby achieving the 3% electricity reduction target. In response to the global green economy, implementing green operation policies through effective energy efficiency improvements.

Taipei Headquarters: Continues to implement various energy-saving measures, reducing electricity consumption by 8,060 kWh in 2025 compared to 2024, a decrease of 1.61%. The main reason for energy savings was changing the central air conditioning main unit's operating times (delaying the start time by 1 hour and advancing the shutdown time by 1 hour). The small central air conditioning unit (40 ton) is only operated when the temperature is below 26°C, and the central air conditioning unit is not operated when the temperature is below 18°C.

Dongguan factory: Reduced electricity consumption by 17,016.6 kWh in 2025 compared to 2024, a decrease of 6.61%. The main reasons for energy savings were: 1. Optimize production processes.2. Reducing the use of large air compressors and using small air compressors as much as possible.

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Statistics on Scope 2 purchased electricity from 2023 to 2025:

Energy Consumption (Megajoules)	The electricity consumption of Taipei headquarters	The electricity consumption of the Dongguan factory	Total
2023	2,253,744.00	2,375,344.80	4,629,088.80
2024	1,800,432.00	926,298.72	2,726,730.72
2025	1,771,416.00	865,038.96	2,636,454.96

Statistics on Scope 2 Electricity Reduction from 2023 to 2025:

Direct reduction in energy consumption (kWh)	Taipei headquarters		Dongguan factory		Total
	Electricity usage (kWh)	Year-over-year(%)	Electricity usage (kWh)	Year-over-year(%)	Electricity usage (kWh)	Year-over-year(%)
2023	626,040.00	-0.97	659,818.00	-16.19	1,285,858.00	-9.41
2024	500,120.00	-20.11	257,305.20	-61.00	757,425.20	-41.10
2025	492,060.00	-1.61	240,288.60	-6.61	732,348.60	-3.31

3. Greenhouse gas reduction plan

Our company's main source of greenhouse gas emissions is Scope 2 energy indirect usage (purchased electricity). In order to effectively improve energy efficiency and reduce greenhouse gas emissions, our company has formulated the following energy-saving and greenhouse gas reduction action plan.

Replacement of energy-intensive equipment
Swap blackout days with working days
Replacement of power-saving lighting equipment, and replacement of T8 lamps with LED lamps
Setting the temperature between $26 - 28^{\circ}\mathrm{C}$ in summer before turning on the air conditioner
Implement elevator control on lower floors and encourage employees to take the stairs more often
Promote energy conservation
Assessment of solar power equipment
Promoting lean production plans to reduce unnecessary waste of energy
Install energy monitoring devices in various areas of the plant to monitor energy usage
Reorganize production workshops to reduce idle capacity and waste of electricity
Strengthening the promotion of energy conservation, and establishing a responsibility system for energy management
Encourage employees to use public transportation to reduce direct energy consumption

Commitment

Continuously reduce carbon emissions annually.

Short-term goals

Reduce greenhouse gas emissions by more than $1\%$ .

Medium to long-term goals

Prioritize the purchase of energy-efficient equipment.
Optimize production processes to save energy consumption.
Evaluate the adoption of renewable and clean energy use.

Specific Strategies

Continuously plan and implement energy-saving measures to reduce electricity consumption, with 1–2 energy conservation and carbon reduction initiatives proposed each year.
When procuring air compressors, priority is given to variable-frequency air compressors.
Gradually replace old lighting fixtures with energy-saving LED lights.
Evaluating and planning sensor-based lighting fixtures according to different functional areas.
Install timers on water dispensers so that power is automatically shut off during non-overtime periods or weekends, thereby reducing unnecessary electricity consumption.

Evaluation Mechanism

Energy declaration energy-saving performance.

In 2025, KYE's total greenhouse gas emissions were 380.7662 metric tons of $\mathrm{CO}{2}\mathrm{e}$ per year, a decrease of $8.18\%$ compared to 2024, achieving the target set for 2025. The greenhouse gas emissions from the Taipei headquarters were 255.6157 metric tons of $\mathrm{CO}{2}\mathrm{e}$ per year, accounting for approximately $67.13\%$ of the total greenhouse gas emissions, while those from the Dongguan factory were 125.1505 metric tons of $\mathrm{CO}_{2}\mathrm{e}$ per year, accounting for approximately $32.87\%$ of the total greenhouse gas emissions.

Separated by emission scope, direct greenhouse gas emissions, belonging to Scope 1 (direct energy use), amounted to 33.6330 metric tons of $\mathrm{CO}{2}\mathrm{e}$ per year, accounting for $8.83\%$ of the total emissions. Indirect greenhouse gas emissions, belonging to Scope 2 (indirect energy use), amounted to 347.1332 metric tons of $\mathrm{CO}{2}\mathrm{e}$ per year, accounting for $91.17\%$ of the total emissions.

Greenhouse gas emissions statistics from 2023 to 2025:

Greenhouse gas emission (Tonne-CO2e)	Taipei Headquarters		Dongguan factory		Total
	Direct emissions (Scope 1)	Indirect emissions (Scope 2)	Direct emissions (Scope 1)	Indirect emissions (Scope 2)	Direct emissions (Scope 1)	Indirect emissions (Scope 2)	Total emission equivalent	Year-over-year(%)
2023	23.0345	309.8898	10.0509	326.6099	33.0854	636.4997	669.5851	-11.80
2024	24.5442	247.0593	15.9562	127.1088	40.5004	374.1681	414.6685	-38.07
2025	22.3793	233.2364	11.2537	113.8968	33.6330	347.1332	380.7662	-8.18

Under the implementation of energy-saving and carbon-reduction measures in 2022-2025, KYE has achieved a total carbon reduction of 378.3627 metric tons of $\mathrm{CO}_{2}\mathrm{e}$ between its

Taipei headquarters and Dongguan factory. This is equivalent to the carbon sequestration of 729 Taiwan incense cedar trees. In the future, we will continue to plan relevant energy-saving and carbon-reduction measures to meet customer demands and respond to global carbon reduction initiatives.

Note:
1. Cumulative carbon reduction from 2022 to 2025.
2. Example of Taiwan incense cedar: The carbon sequestration capacity of Taiwan incense cedar is 262 kg/m3; if a wood volume is 1.2 m3, then the total carbon sequestration of Taiwan incense cedar is 262 × 1.2 × 1.65 = 518.76 kg. (Reference: Ministry of Agriculture website)

Greenhouse gas emission intensity statistics from 2023 to 2025:

Greenhouse gas emission intensity	Taipei Headquarters			Dongguan factory			Total
	Total emissions (metric tons CO2e)	Factory total area (square meters)	Emission intensity (tons per square meter)	Total emissions (metric tons CO2e)	Factory total area (square meters)	Emission intensity (tons per square meter)	Emission intensity (tons per square meter)
2023	332.9243	8,250	0.0404	336.6608	17,754	0.0190	0.0257
2024	271.6035	8,250	0.0329	143.0650	12,475	0.0115	0.0200
2025	255.6157	8,250	0.0310	125.1505	12,475	0.0100	0.0184

Emissions of substances that deplete the ozone layer

KYE does not use ozone-depleting substances in its processes, so there are no emissions of ozone-depleting substances.

IX. Other important matters: None.

Chapter 6. Special Information

I. Information of affiliates

(I) Organization of affiliates

December 31, 2025

(II) Basic information of affiliates

(December 31, 2025) Unit: NTD thousand

Company name	Date of incorporation (acquisition)	Address	Paid-in capital	Scope of primary business or production
KYE Systems Corp.	November 1983	1-8F., No. 492, Sec. 5, Chongxin Rd., Sanchong Dist., New Taipei City	2,215,285	Sales of computer peripherals, consumer electronics and video/image products
KYE Systems (Hong Kong) Corporation Limited	April 1993	Unit 1806,18/F., Gala Place, 56 Dundas Street, Mongkok, Kowloon, Hong Kong	2,019	Sales of computer peripherals, consumer electronics and video/image products
Dongguan Kunying Computer Products Co., Ltd.	February 1995	Building 5, No. 2 Dongye Road, Houjie Town, Dongguan City, Guangdong Province, China	514,725	R&D, manufacturing and sales of computer peripherals, consumer electronics and video/image products
KYE Inc.	October 1996	Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands	504,926	Investment holdings
Genius Holding Co., Ltd.	December 1997	P. O. Box 31119 Grand Pavilion, Hibiscus Way, 802 West Bay Road, Grand Cayman, KYI-1205 Cayman Islands	580,430	Investment holdings
Globalink Holding Co., Ltd.	December 1997	Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands	165,008	Investment holdings
Chung-Chiang Investment Co., Ltd.	January 1998	No. 112, Yongfu St., Sanchong Dist., New Taipei City	407,000	Investment business
Hung-Cheng Investment Co., Ltd.	April 1998	10F., No. 22, Sec. 1, Chongqing N. Rd., Datong Dist., Taipei City	95,781	Investment business
KYE Trade (HK) Co., Ltd.	June 2008	FLAT/RM 1501 15/F CAPITAL CENTRE 151 GLOUCESTER ROAD WAN CHAI HK	10,528	Sales of computer peripherals, consumer electronics and video/image products
Digilife Technologies Co., Ltd.	September 2011	13F, No. 7, Dexing W. Rd., Shilin Dist., Taipei City	544,975	Design, processing, and sales of digital video/audio products
Life Technologies Co., Ltd.	September 2011	Offshore Chambers, P.O. Box 217, Apia, Samoa	14,311	Investment holdings
Life Technologies (Hong Kong) Co., Limited	September 2011	Unit C, 13rd Floor, Nathan Commercial Building, 430-436 Nathan Road, Yaumatei, Kowloon, Hong Kong	14,246	Investment holdings
Ziser Technologies (Shen Zhen) Co., Ltd.	September 2015	1102, Information Building, Baoyunda Logistics Center, Fuhua Community, Xixiang Avenue, Baoan Dist., Shenzhen City	5,731	Sales of digital video/audio products
Digilife Pty Ltd.	May 2018	24 JULATTEN DRIVE ROBINA QLD 4226	136,565	Tourism and real estate development
MUFU TECHNOLOGIES CO., LTD.	October 2024	17th Floor, No. 200 Jian 8th Road, Zhonghe District, New Taipei City	10,000	Sales of digital video/audio products
MUFU TECHNOLOGIES CO., LTD.(Japan)	September 2025	Room 202, Authentic Higashisenba,1-2-1 Kitakyuhojimachi, Chuo-ku, Osaka-shi, Osaka 541-0057, Japan	20,080	Sales of digital video/audio products
SinTek Green Energy Co., Ltd.	October 2025	2F., No. 41, Gongjiao Rd., Shengfu Vil., Zhunan Township, Miaoli County 350, Taiwan	30,000	Green energy development

Note: Where the original currency of any amount listed in this table is a foreign currency, it has been translated into NTD based on the exchange rate at the end of the year.

(III) Common shareholders in companies presumed to be controlled by or subordinate to your company: None.
(IV) Industries within the scope of the business of all affiliates

The scope of the business of KYE and its affiliates is the electronics industry, except for Chung-Chiang Investment Co., Ltd., Hung-Cheng Investment Co., Ltd., Genius Holding Co., Ltd., KYE Inc., Globalink Holding Co., Ltd., and Life Technologies Co., Ltd., which are focused investments, Digilife Pty Ltd., which mainly engages in tourism and real estate development, and SinTek Green Energy Co., Ltd., which mainly engages in Green energy development. KYE is responsible for R&D and marketing, with Dongguan Kunying Computer Products Co., Ltd. focusing on production. Other foreign subsidiaries are responsible for marketing in their respective territories, with KYE as the main source of supplies. The domestic subsidiary Digilife Technologies Co., Ltd. engages in R&D and sales on its own.

(V) Information of directors, supervisors and presidents of affiliates
(December 31, 2025) Unit: NTD; shares; %

Company name	Title	Name or representative	Shareholding
			Number of shares	Shareholding (%)
KYE Systems Corp.	Chairman	Shih-Kun Tso	5,877,815	2.65
	Director	Yung-Far Wei	160,061	0.07
	Director	Han-Liang Hu	0	0.00
	Director	Chin An Tai Investment, Ltd.	6,094,955	2.75
	Director	Representative: Yi-Chen Tso	0	0.00
	Director	Zeng-Bing Liu	0	0.00
	Independent director	Hung-Tzu Hsu	0	0.00
	Independent director	Wan-Ting Su	0	0.00
	Independent director	Peng, Fang	0	0.00
	President	Pai-Shan Lee	275,039	0.12
KYE Systems (Hong Kong) Corporation Limited	Director	Shih-Kun Tso	500,000	100.00
Dongguan Kunying Computer Products Co., Ltd. (Note)	Chairman	KYE Inc.	464,414,995	100.00
		Representative: Shih-Kun Tso	0	0.00
	Director	KYE Inc.	464,414,995	100.00
		Representative: Hsiu-Chin Hsu	0	0.00
	Director	KYE Inc.	464,414,995	100.00
		Representative: Yung-Far Wei	0	0.00
		Representative: Shih-Kun Tso	0	0.00
KYE Inc.	Director	Genius Holding Co., Ltd.	3,213	100.00
		Representative: Shih-Kun Tso	0	0.00
Genius Holding Co., Ltd.	Director	KYE Systems Corp.	18,467,377	100.00
		Representative: Shih-Kun Tso	0	0.00
Globalink Holding Co., Ltd.	Director	Genius Holding Co., Ltd.	5,250,000	100.00
		Representative: Shih-Kun Tso	0	0.00
Chung-Chiang Investment Co., Ltd.	Chairman	KYE Systems Corp.	40,700,000	100.00
		Representative: Shih-Kun Tso	0	0.00
	Director	KYE Systems Corp.	40,700,000	100.00
		Representative: Chen-Ping Yang	0	0.00
	Supervisor	KYE Systems Corp.	40,700,000	100.00
		Representative: Hsiu-Chin Hsu	0	0.00
Hung-Cheng Investment Co., Ltd.	Chairman	KYE Systems Corp.	9,578,103	100.00
		Representative: Shih-Kun Tso	0	0.00
	Director	KYE Systems Corp.	9,578,103	100.00
		Representative: An-Min Kao	0	0.00
	Supervisor	KYE Systems Corp.	9,578,103	100.00
		Representative: Hsiu-Chin Hsu	0	0.00
KYE Trade (HK) Co., Ltd.	Director	Shih-Kun Tso	2,722,500	100.00
Digilife Technologies Co., Ltd.	Chairman	KYE Systems Corp.	51,562,598	94.61
		Representative: Shih-Kun Tso	7,600	0.02
	Director	Hsiu-Chin Hsu	201,296	0.37
	Director and President	Chen-Ping Yang	76,000	0.14
	Supervisor	Jia-Shuo Kao	0	0.00
Life Technologies Co., Ltd.	Director	Digilife Technologies Co., Ltd.	455,324	100.00
		Representative: Chen-Ping Yang	0	0.00
Life Technologies (Hong Kong) Co., Limited (Note)	Director	Life Technologies Co., Ltd.	14,895,618	100.00
		Representative: Chen-Ping Yang	0	0.00
Ziser Technologies (Shen Zhen) Co., Ltd. (Note)	Director	Life Technologies (Hong Kong) Co., Limited	5,707,659	100.00
		Representative: Ming-Hui Tsai	0	0.00
Digilife Pty Ltd.	Director	Digilife Technologies Co., Ltd.	6,500,000	100.00
		Representative: Chen-Ping Yang	0	0.00
	Director	Digilife Technologies Co., Ltd.	6,500,000	100.00
		Representative: CHIA-CHUN YANG	0	0.00
MUFU TECHNOLOGIES CO., LTD.	Director Supervisor	Chen-Ping Yang	95,000	9.50
		Mei-Fang, Lai	5,000	0.50
MUFU TECHNOLOGIES CO., LTD.(Japan)	Representative Director	Life Technologies Co., Ltd.	100,000	100,000
		Representative: Chen-Ping Yang	0	0
SinTek Green Energy Co., Ltd.	Chairman	KYE Systems Corp.	1,200,000	40.00
		Representative: Shih-Kun Tso	0	0.00
	Vice Chairman	SinTek Green Energy Co., Ltd.	1,800,000	60.00
		Representative: Hsien-Ming Chiu	0	0.00
	Supervisor	Chao-Kuo Chou	0	0.00

Note: It is not a company limited by shares. The information listed is the amount and percentage of its capital contribution.

(VI) Overview of operations of affiliates

Unit: NTD Thousand; Earnings per share (EPS): NTD

Company name	Capital	Total assets	Total liabilities	Net value	Operating revenue	Operating profit	Profit/loss for the current period (after tax)	Earnings per share (NTD) (after-tax)
KYE Systems Corp.	$2,215,285	$3,136,542	$86,623	$3,049,919	$563,074	$42,145	$70,983	$0.32
KYE Systems (Hong Kong) Corporation Limited	2,019	4,420	34	4,386	0	0	0	0.00
Dongguan Kunying Computer Products Co., Ltd. (Note 3)	464,415	209,898	470,062	(260,164)	407,056	23,451	19,121	0.04
KYE International Corporation(Note 4)	0	0	0	0	0	(981)	(795)	(3.38)
KYE Inc.	504,926	(258,649)	0	(258,649)	0	(127)	19,042	5,926.60
Genius Holding Co., Ltd. (Note 5)	580,430	407,460	157	407,303	0	(437)	41,714	2.26
Globalink Holding Co., Ltd.	165,008	114,197	31	114,166	0	(148)	294	0.06
Chung-Chiang Investment Co., Ltd. (Note 6)	407,000	409,226	671	408,555	14	(3,888)	2,161	0.05
Hung-Cheng Investment Co., Ltd.	95,781	85,596	464	85,132	13,287	12,730	12,313	1.29
KYE Trade (HK) Co., Ltd.	10,528	2,617	900	1,717	390,915	(105)	4	0.00
Digilife Technologies Co., Ltd.	544,975	858,595	289,496	569,099	363,590	(9,706)	(9,930)	(0.18)
Life Technologies Co., Ltd.	14,311	2,459	0	2,459	0	0	1,051	2.31
Life Technologies (Hong Kong) Co., Limited	14,246	2,459	0	2,459	0	(41)	1,051	0.08
Ziser Technologies (Shen Zhen) Co., Ltd.	5,731	1,219	0	1,219	1,267	1,064	1,064	0.19
Digilife Pty Ltd. (Note 7)	136,565	126,930	808	126,122	0	(8,580)	1,480	0.23
MUFU TECHNOLOGIES CO.,LTD. (Thailand) (Note 8)	0	0	0	0	0	(3,416)	(2,573)	(25.73)
MUFU TECHNOLOGIES CO., LTD.	10,000	11,241	825	10,416	8,669	446	410	0.41
MUFU TECHNOLOGIES CO., LTD. (Japan) (Note 9)	20,080	19,678	216	19,462	0	(583)	(642)	(64.17)
SinTek Green Energy Co., Ltd.(Note 10)	30,000	29,721	60	29,661	0	(144)	(339)	(0.11)

Note 1: Where the original currency of any amount listed in this table is a foreign currency, it has been translated into NTD based on the exchange rate at the end of the year or the annual average exchange rate.
Note 2: The operating revenue of each company listed in this table is the amount before consolidated write-off.
Note 3: Dongguan Kunying Computer Products Co., Ltd. reduced its registered capital by HKD 13,000 thousand in August 2025 to offset accumulated losses.
Note 4: KYE International Corporation ceased operations and completed liquidation in June 2025, and the deregistration procedures were completed.
Note 5: Genius Holding Co., Ltd. handled cash capital reduction of US$3,000 thousand in July 2025.
Note 6: Chung-Chiang Investment Co., Ltd. conducted a cash capital increase in March 2025, and the Company subscribed for 20,000 thousand shares.
Note 7: Digilife Pty Ltd. handled cash capital reduction of AUD3,000 thousand in March 2025.
Note 8: MUFU Technologies Co., Ltd. carried out capital reductions in cash amounting to THB37,497 thousand and THB2,500 thousand in August and October 2025, respectively. In December 2025, Digilife Technologies Co., Ltd. sold all of its equity interests in MUFU Technologies Co., Ltd. to an unrelated party.
Note 9: Digilife Technologies Co., Ltd. established its subsidiary, Mufu Technologies (JP) Co., Ltd., in September 2025 and invested JPY100,000 thousand.
Note 10: In October 2025, the Company invested $12,000 thousand together with its associates to establish SinTek Green Energy Co., Ltd. in which the Company holds a 40% equity interest. As the Company directly and indirectly holds more than 50% of the voting rights of the investee, it is classified as a subsidiary.

(VII) Consolidated financial statements of affiliates

Declaration on Consolidated Financial Report of Affiliates

For the year of 2025 (from January 1 to December 31, 2025), the companies which shall be included in the consolidated financial report of affiliates prepared in accordance with the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" are the same as those which shall be included in the consolidated financial report of the parent company only and subsidiaries pursuant to IFRS 10, and the relevant information which shall be disclosed in the consolidated financial report of affiliates has been disclosed in the foregoing consolidated financial report of the parent company only and subsidiaries. Therefore, no separate consolidated financial report of affiliates has been prepared.

Declarant:

Company name: KYE Systems Corp.

Owner: Shih-Kun Tso

March 6, 2026

II. Private placement of securities during the most recent year and as of the date of publication of the annual report: None.
III. Other additional information required: None.

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Chapter 7. Occurrence of Events with a Material Effect on Shareholders’ Equity or Securities Price, as Defined under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act, during the Most Recent Year and as of the Date of Publication of the Annual Report: None.

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KYE Systems Corp.

Chairman: Shih-Kun Tso

AI assistant

KYE — Annual Report 2025

52033_rns_2026-05-22_3f9c3bd6-64c2-4409-af98-9311f96281d1.pdf

Table of Contents

Chapter 3. Financing 88

Chapter 4. Overview of Operations 92

Chapter 5. Review and Analysis of Financial Conditions and Financial Performance and Risk Events 113

Chapter 6. Special Information 141

Chapter 7. Occurrence of Events with a Material Effect on Shareholders' Equity or Securities Price, as Defined under Subparagraph 2, Paragraph 3, Article 36 of the Securities and Exchange Act, during the Most Recent Year and as of the Date of Publication of the Annual Report 146

Chapter 1. Letter to Shareholders

II. Overview of the 2026 business plan

(I) Operational policies

(II) Business goal

(III) Key production and sales policies

III. Future strategy for the development of KYE, and the effects of external competition, legal environment and overall business environment

(I) Future strategy for development of KYE

(II) Effects of external competition, legal environment and overall business environment

Chapter 2. Corporate Governance Report

I. Information of directors, president, vice president, assistant vice presidents and managers of departments and branches

(I) Information of directors (I)

2. Major shareholders of corporate shareholders

II. Remuneration paid to directors, the president and vice president, etc., in the most recent year

(II) Remuneration for the president and vice presidents

(II) Operations of the Audit Committee

Other information required:

Information of operations of the Remuneration Committee

Achievement of Reduction Targets

IV. Information of Professional Fees for CPAs

V. Information of Change of CPAs

VI. The chairman, president or financial or accounting manager of KYE who has served at the firm of the CPAs or any of its affiliates during the most recent year: None.

VII. Changes in transfers and pledges of shares held by directors, managers and shareholders with a shareholding of more than 10% during the most recent year and as of the date of publication of the annual report

Chapter 3. Financing

I. Capital and Shares

Chapter 4. Overview of Operations

I. Information of Business Activities

(I) Scope of business

(II) Overview of industry

(III) Overview of technology, research and development

II. Overview of market and production/sales

(I) Market analysis

1. Sales territories for main products

2. Market share and future supply, demand and growth in the market

(1) Computer peripherals

A. Keyboards

B. Speakers/ Headsets

(2) Video image products

A. Web cameras

2. Continuing education and training systems

3. Post-employment benefits

(1) Defined contribution plan

(2) Defined benefit plan

Chapter 5. Review and Analysis of Financial Conditions and Financial Performance and Risk Events

I. Review and Analysis of Financial Conditions

II. Review and Analysis of Financial performance

III. Review and Analysis of Cash flows

VIII. Risk Management, Task Force on Climate-related Financial Disclosures, and Greenhouse Gas Management' in this report under Section

3. Greenhouse gas reduction plan

Commitment

Short-term goals

Medium to long-term goals

Specific Strategies

Evaluation Mechanism

Chapter 6. Special Information

I. Information of affiliates

(II) Basic information of affiliates

More from KYE

KYE Annual Report 2025