LELON ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
WITH REPORT OF INDEPENDENT ACCOUNTANTS
FOR THE YEARS ENDED 31 DECEMBER 2025 AND 2024

Address: No. 147, Sec. 1, Guoguang Rd., Dali Dist., Taichung City 412023, Taiwan, R.O.C.
Telephone: (+886) 04-2418-1856

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

REPRESENTATION LETTER

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

Hereby certified.

LELON ELECTRONICS CORP.

Jimmy Wu
Chairman

13 March 2026

Independent Auditors' Report Translated from Chinese

To Lelon Electronics Corp.

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2025 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Impairment of accounts receivable

As of 31 December 2025, the gross accounts receivable and loss allowance by the Group amounted to NT$3,289,578 thousand and NT$36,846 thousand, respectively. The net accounts receivable accounted for 18% of consolidated total assets, which was considered material to the Group. The collection of accounts receivable is a key factor in the working capital management of the Group, the loss allowance of account receivables is measured by the expected credit loss for the duration of the account receivables, the measurement process includes grouping the receivables and determining the use of the related assumptions in the analysis, including appropriate account aging interval and consideration of the loss rate of each account aging interval. As the measurement of expected credit loss involves making judgment, analysis and estimates, and the result will affect the net account receivable, we therefore determined this a key audit matter.

Our audit procedures included, but not limited to, understanding and testing the effectiveness of the internal control system for the client risk assessment and collection of accounts receivable established by the management level, understanding and testing the use of provision matrix, including assessing the reasonableness of the determination of various account aging intervals and sampling and examining the accuracy of underlying information through original document inspection. The procedures also involve testing statistical information related to loss rates calculated based on rolling ratios over one year, sampling appropriate transactions to recalculate the accuracy of aging based on transaction conditions, evaluating the reasonableness of collection for individual customers with significant overdue amounts or longer overdue periods, performing group assessment for non-individually material customers, recalculating the reasonableness of the allowance for doubtful accounts amount based on the impairment loss policy, selecting samples to perform confirmations of accounts receivable and reviewing the collection status after the balance sheet date to assess their recoverability.

We also assessed the adequacy of disclosures related to accounts receivable in Notes 5 and 6 to the Group’s consolidate financial statements.

Valuation for inventories

As of 31 December 2025, the Group’s net inventories amounted to NT$1,734,229 thousand. Net inventories accounted for 9% of consolidated total assets. As the Group’s inventories are distributed in multiple warehouses and has a wide range of items, the difficulty of managing the status of inventory usage has increased. The products have a wide range of applications and they are phased out at different rates, so the slowing-moving and obsolete inventory allowance for impairment involved significant management judgments. We therefore determined this a key audit matter.

Our audit procedures included, but were not limited to, understanding and testing the effectiveness of the internal controls established by management for inventory, assessing the appropriateness of accounting policies regarding obsolete and slow-moving inventory, understanding management's plan for inventory count, selecting material inventory locations for on-site observations during physical inventory counts, testing the accuracy of inventory aging, analyzing changes in inventory aging, testing management's estimated net realizable value for inventory, including price testing and conducting analytical procedures on gross profit margins for each product, verifying the calculation of inventory unit costs, considering the expected demand and market value of inventory, understanding management's analysis and evaluation of obsolete and slow-moving inventory, including the possibility of inventory realization and estimation of net realizable value.

We also assessed the adequacy of disclosures related to inventory in Notes 5 and 6 to the Group’s consolidated financial statements.

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

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

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

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

As part of an audit in accordance with the Standards on Auditing of the Republic of China, we exercise professional judgment and professional skepticism throughout the audit. We also:

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

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Group.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Group. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure, and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

Other

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

Chin-Yuan Tu

Wen- Chen Lo

Ernst & Young, Taiwan

13 March 2026

Notice to Readers

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

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

31 December 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets	Notes	As of 31 December
		2025	2024
Current assets
Cash and cash equivalents	4,6(1)	$4,342,448	$4,049,216
Financial assets at fair value through profit or loss, current	4,6(2)	671,487	794,195
Financial assets measured at amortised cost – current	4,6(3)	614,131	-
Notes receivable, net	4,6(14)	489,313	580,303
Accounts receivable, net	4,5,6(4) + 6(14),7	3,252,732	2,970,446
Other receivables	4,6(14)	19,294	21,136
Inventories	4,5,6(5)	1,734,229	1,551,072
Prepayments	7	236,733	233,358
Non-current assets held for sale, net	6(6)	-	91,042
Other current assets		8,892	6,973
Total current assets		11,369,259	10,297,741
Non-current assets
Financial assets at fair value through other comprehensive income, non-current	4,5,12	26,987	27,631
Property, plant and equipment	4,6(7),8	6,256,111	6,040,472
Right-of-use assets	4,5,6(15),7	199,689	189,602
Investment property	4,5	25,268	25,563
Intangible assets	4	9,332	8,553
Goodwill	4	17,014	11,625
Deferred tax assets	4,5,6(14),6(19)	43,259	40,539
Other non-current assets	4,7	260,736	92,363
Total non-current assets		6,838,396	6,436,348
Total assets		$18,207,655	$16,734,089

(continued)

English Translation of Consolidated Financial Statements Originally Issued in Chinese
LELON ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
31 December 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity	Notes	As of 31 December
		2025	2024
Current liabilities
Short-term loans	4,6(8)	$1,616,794	$2,164,957
Contract liabilities, current	4,6(13)	130,472	97,420
Notes payable	7	10,700	16,471
Accounts payable	4,7	669,023	650,543
Other payables	4,6(9)	779,398	774,606
Current tax liabilities	4,6(19)	263,560	184,326
Liabilities directly associated with non-current assets held for sale (or disposal groups)	4,6(6)	-	43,158
Lease liabilities, current	4,6(15),7	4,398	4,636
Long-term loans, current portion	4,6(10)	120,000	64,375
Other current liabilities	4	28,958	25,746
Total current liabilities		3,623,303	4,026,238
Non-current liabilities
Long-term loans	4,6(10)	291,000	159,625
Deferred tax liabilities	4,5,6(19)	297,105	75,302
Lease liabilities, non-current	4,6(15),7	46,900	51,048
Net defined benefit obligation, non-current	4,5,6(11)	3,450	8,106
Guarantee deposits received		21,500	574
Other non-current liabilities	4	126,847	130,491
Total non-current liabilities		786,802	425,146
Total liabilities		4,410,105	4,451,384
Equity attributable to the parent company	4,6(12)
Capital
Common stock		1,647,351	1,647,351
Additional Paid-in Capital		2,057,664	2,054,205
Retained earnings
Legal reserve		872,164	756,171
Special reserve		113,961	358,961
Unappropriated earnings		4,402,408	3,344,609
Subtotal		5,388,533	4,459,741
Other components of equity
Exchange differences on translation of foreign operations		27,558	(86,222)
Unrealized gains or losses measured at fair value through other comprehensive income		(28,174)	(27,749)
Subtotal		(616)	(113,971)
Equity attributable to the parent company		9,092,932	8,047,326
Non-controlling interests	6(12),6(21)	4,704,618	4,235,379
Total equity		13,797,550	12,282,705
Total liabilities and equity		$18,207,655	$16,734,089

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese
LELON ELECTRONICS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years ended 31 December 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings per Share)

		For the years ended 31 December
	Notes	2025	2024
Operating revenues	4,6(13),7	$11,292,538	$10,486,953
Operating costs	6(5),6(11),6(15),6(16),7	(7,674,326)	(7,252,189)
Gross profit		3,618,212	3,234,764
Operating expenses	6(11),6(15),6(16)
Sales and marketing expenses		(447,699)	(386,941)
General and administrative expenses		(664,660)	(675,901)
Research and development expenses		(239,998)	(272,904)
Expected credit gains (losses)	6(14)	24,803	(24,954)
Subtotal		(1,327,554)	(1,360,700)
Operating income		2,290,658	1,874,064
Non-operating income and expenses	4,5
Interest revenue		113,632	121,465
Other income	6(17)	177,018	124,723
Other gains and losses	6(17)	263,335	170,447
Finance costs	6(17),7	(43,867)	(52,535)
Subtotal		510,118	364,100
Income before income tax		2,800,776	2,238,164
Income tax expense	4,5,6(19)	(794,113)	(528,594)
Net income		2,006,663	1,709,570
Other comprehensive income	4,6(18),6(19)
Items that may not be reclassified subsequently to profit or loss
Remeasurements of defined benefit plans		3,168	4,350
Unrealized gains(losses) on equity instruments measured at fair value through other comprehensive income		(436)	(489)
Income tax related to items that may not be reclassified subsequently		(634)	(870)
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of foreign operations		158,568	360,651
Total other comprehensive income, net of tax		160,666	363,642
Total comprehensive income		$2,167,329	$2,073,212
Net income attributable to:
Stockholders of the parent		$1,437,717	$1,155,486
Non-controlling interests	6(22)	568,946	554,084
		$2,006,663	$1,709,570
Comprehensive income attributable to:
Stockholders of the parent		$1,552,826	$1,404,919
Non-controlling interests	6(22)	614,503	668,293
		$2,167,329	$2,073,212
Earnings per share (NTD)	4,6(20)
Earnings per share-basic		$8.73	$7.01
Earnings per share-diluted		$8.70	$6.98

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

For the years ended 31 December 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Equity Attributable to the Parent Company

	Capital	Additional Paid-in Capital	Retained earnings			Other components of equity		Total	Non-Controlling Interests	Total Equity
			Legal Reserve	Special Reserve	Unappropriated earnings	Exchange Differences on Translation of Foreign Operations	Unrealized Gains (Losses) on Equity Instruments Measured at Fair Value Through Other Comprehensive Income
Balance as of 1 January 2024	$1,647,351	$2,013,165	$663,989	$232,480	$2,864,601	$(331,627)	$(27,334)	$7,062,625	$3,449,930	$10,512,555
Appropriation and distribution of 2023 retained earnings
Legal Reserve			92,182		(92,182)			-		-
Special Reserve				126,481	(126,481)			-		-
Cash dividends					(461,258)			(461,258)		(461,258)
Net income in 2024					1,155,486			1,155,486	554,084	1,709,570
Other comprehensive income (loss), net of tax in 2024					4,443	245,405	(415)	249,433	114,209	363,642
Total comprehensive income (loss)	-	-	-	-	1,159,929	245,405	(415)	1,404,919	668,293	2,073,212
Changes in ownership interests in subsidiaries		41,040						41,040	269,949	310,989
Cash dividends of the Company received by its subsidiaries								-	(152,793)	(152,793)
Balance as of 31 December 2024	$1,647,351	$2,054,205	$756,171	$358,961	$3,344,609	$(86,222)	$(27,749)	$8,047,326	$4,235,379	$12,282,705
Balance as of 1 January 2025	$1,647,351	$2,054,205	$756,171	$358,961	$3,344,609	$(86,222)	$(27,749)	$8,047,326	$4,235,379	$12,282,705
Appropriation and distribution of 2024 retained earnings
Legal Reserve			115,993		(115,993)			-		-
Cash dividends					(510,679)			(510,679)		(510,679)
Reversal of special reserve				(245,000)	245,000			-		-
Arising from consolidation								-	13,039	13,039
Net income in 2025					1,437,717			1,437,717	568,946	2,006,663
Other comprehensive income (loss), net of tax in 2025					1,754	113,780	(425)	115,109	45,557	160,666
Total comprehensive income (loss)	-	-	-	-	1,439,471	113,780	(425)	1,552,826	614,503	2,167,329
Changes in ownership interests in subsidiaries		3,459						3,459	31,006	34,465
Cash dividends of the Company received by its subsidiaries								-	(189,309)	(189,309)
Balance as of 31 December 2025	$1,647,351	$2,057,664	$872,164	$113,961	$4,402,408	$27,558	$(28,174)	$9,092,932	$4,704,618	$13,797,550

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended 31 December 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended 31 December
	2025	2024
Cash flows from operating activities:
Net income before tax	$2,800,776	$2,238,164
Adjustments :
Income and expense adjustments:
Depreciation	590,023	591,138
Amortization	3,812	4,520
Expected credit (gain) loss	(24,803)	24,954
Income of financial assets/liabilities at fair value through loss or profit	(3,003)	(812)
Interest expense	43,867	52,535
Interest income	(113,632)	(121,465)
Dividend income	(1,839)	(1,620)
(Gain) or Loss on disposal of property, plant and equipment	(474)	200
Property, plant and equipment transferred to expenses	3,659	108
Loss on disposal of Intangible assets	103	-
Gain on disposal of non-current assets held for sale	(411,925)	-
Gain on disposal of investments	(7,227)	-
Loss (Gain) on inventory write-down and reversal of obsolescence slow-moving of inventories	4,219	(9,566)
Changes in operating assets and liabilities:
Decrease in financial assets at fair value through profit or loss	85,673	202,348
Decrease (Increase) in notes receivable	90,990	(304,964)
Increase in accounts receivable	(260,782)	(403,507)
Increase in other receivables	(4,449)	(5,986)
Increase in inventories	(177,605)	(135,363)
Decrease (Increase) in prepayments	101	(24,116)
(Increase) decrease in other current assets	(1,919)	35,255
Decrease in other non-current assets	34,212	31,881
Increase in contract liabilities	33,052	63,552
(Decrease) increase in notes payable	(5,771)	8,610
Increase in accounts payable	18,480	106,419
(Decrease) increase in other payables	(64,291)	202,161
Increase in other current liabilities	3,212	5,057
Decrease in net defined benefit liabilities non-current	(2,544)	(7,763)
Cash generated from operations	2,631,915	2,551,740
Interest received	108,007	119,814
Dividends received	1,839	1,620
Interest paid	(43,936)	(48,097)
Income tax paid	(494,454)	(448,812)
Net cash provided by operating activities	2,203,371	2,176,265

(Continued)

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

For the years ended 31 December 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	For the years ended 31 December
	2025	2024
Cash flows from investing activities:
Acquisition of financial assets measured at amortized cost, current	(614,131)	-
Proceeds from disposal of financial assets at fair value through profit or loss	50,336	-
Increase in prepayments for investments	(5,000)	-
Acquisition of subsidiaries, net of cash acquired	8,160	-
Disposal of non-current assets held for sale	531,271	-
Increase in advance receipts - disposal of assets	-	49,342
Acquisition of property, plant and equipment	(767,239)	(538,791)
Proceeds from disposal of property, plant and equipment	53,004	57,701
Increase in refundable deposits	(20,525)	(4,897)
Acquisition of intangible assets	(3,165)	(551)
Acquisition of right-of-use assets	(19,425)	-
Increase in prepayment for equipment	(204,267)	(43,724)
Net cash used in investing activities	(990,981)	(480,920)
Cash flows from financing activities:
Increase in short-term loans	4,900,442	8,135,827
Decrease in short-term loans	(5,449,925)	(8,113,594)
Increase in short-term notes and bills payable	850,723	350,837
Decrease in short-term notes and bills payable	(850,723)	(350,837)
Cash payments for bonds	-	(189,000)
Increase in long-term loans	282,000	224,000
Decrease in long term loans	(95,000)	-
Increase(decrease) in guarantee deposits received	20,922	(38,895)
Cash payments for the principal portion of the lease liability	(4,520)	(4,703)
(Decrease)increase in other non-current liabilities	(3,644)	26,302
Cash dividends	(510,679)	(461,258)
Decrease in non-controlling interests	(154,844)	(152,793)
Net cash used in financing activities	(1,015,248)	(574,114)
Effect of exchange rate changes on cash and cash equivalents	96,090	88,474
Net increase in cash and cash equivalents	293,232	1,209,705
Cash and cash equivalents at beginning of period	4,049,216	2,839,511
Cash and cash equivalents at end of period	$4,342,448	$4,049,216

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Years Ended 31 December 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

History and organization

LELON ELECTRONICS CORP. (The Company) was incorporated in February 1976. The main activities of the Company include manufacturing, assembling, selling electronic components&parts, and selling production machinery, and act as an agent for the business operation investment and import and export trade of the preceding paragraph, etc. Place of operation and registration of the company is No. 147, Sec. 1, Guoguang Rd., Dali Dist., Taichung City 412023, Taiwan (R.O.C.)

In response to the diversified needs of future fundraising, and with the consent of the securities authority, the supplementary public offering procedures will be completed in July 1998.

The Company’s shares were approved for over-the-counter trading by the Securities and Futures Commission on March 3, 2000, and were officially listed for trading on the Taipei Exchange on May 16, 2000.

The Company received approval from the Securities and Futures Commission on September 6, 2001 to transfer its shares from OTC trading to a listed company, with trading commencing on the Taiwan Stock Exchange on September 17, 2001.

Date and procedures of authorization of financial statements for issue

The consolidated financial statements of the Company and its subsidiaries (the Group) for the years ended 31 December 2025 and 2024 were authorized for issue by Board of Directors on 13 March 2026.

Newly issued or revised standards and interpretations

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Standards or interpretations issued, revised or amended, by International Accounting Standards Board (“IASB”) which have been endorsed by FSC, and not yet adopted by the Group as at the date when the Group’s financial statements were authorized for issue, are listed below.

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

A. IFRS 17 “Insurance Contracts”

IFRS 17 provides a comprehensive model for insurance contracts, covering all relevant accounting aspects (including recognition, measurement, presentation and disclosure requirements). The core of IFRS 17 is the General (building block) Model, under this model, on initial recognition, an entity shall measure a group of insurance contracts at the total of the fulfilment cash flows and the contractual service margin. The carrying amount of a group of insurance contracts at the end of each reporting period shall be the sum of the liability for remaining coverage and the liability for incurred claims.

Other than the General Model, the standard also provides a specific adaptation for contracts with direct participation features (the Variable Fee Approach) and a simplified approach (Premium Allocation Approach) mainly for short-duration contracts.

IFRS 17 was issued in May 2017 and it was amended in 2020 and 2021. The amendments include deferral of the date of initial application of IFRS 17 by two years to annual beginning on or after 1 January 2023 (from the original effective date of 1 January 2021); provide additional transition reliefs; simplify some requirements to reduce the costs of applying IFRS 17 and revise some requirements to make the results easier to explain. IFRS 17 replaces an interim Standard – IFRS 4 Insurance Contracts – from annual reporting periods beginning on or after 1 January 2023.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify that a financial liability is derecognised on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.
(2) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.
(3) Clarify the treatment of non-recourse assets and contractually linked instruments.
(4) Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income.

C. Annual Improvements to IFRS Accounting Standards – Volume 11

(1) Amendments to IFRS 1
(2) Amendments to IFRS 7
(3) Amendments to Guidance on implementing IFRS 7
(4) Amendments to IFRS 9
(5) Amendments to IFRS 10
(6) Amendments to IAS 7

D. Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify the application of the ‘own-use’ requirements.
(2) Permit hedge accounting if these contracts are used as hedging instruments.
(3) Add new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows.

The abovementioned standards and amendments are applicable for annual periods beginning on or after 1 January 2026 and have no material impact on the Group.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(3) Standards or interpretations issued, revised or amended, by IASB which have not been endorsed by FSC, but not yet adopted by the Group as at the date when the Group’s financial statements were authorized for issue, are listed below.

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

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

A. IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures” — Sale or Contribution of Assets between an Investor and its Associate or Joint Ventures

The amendments address the inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and IAS 28 Investments in Associates and Joint Ventures, in dealing with the loss of control of a subsidiary that is contributed to an associate or a joint venture. IAS 28 restricts gains and losses arising from contributions of non-monetary assets to an associate or a joint venture to the extent of the interest attributable to the other equity holders in the associate or joint ventures, IFRS 10 requires full profit or loss recognition on the loss of control of the subsidiary. IAS 28 was amended so that the gain or loss resulting from the sale or contribution of assets that constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized in full.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

IFRS 10 was also amended so that the gains or loss resulting from the sale or contribution of a subsidiary that does not constitute a business as defined in IFRS 3 between an investor and its associate or joint venture is recognized only to the extent of the unrelated investors’ interests in the associate or joint venture.

B. IFRS 18 “Presentation and Disclosure in Financial Statements”

IFRS 18 replaces IAS 1 Presentation of Financial Statements. The main changes are as below:

(1) Improved comparability in the statement of profit or loss (income statement)
IFRS 18 requires entities to classify all income and expenses within their statement of profit or loss into one of five categories: operating; investing; financing; income taxes; and discontinued operations. The first three categories are new, to improve the structure of the income statement, and requires all entities to provide new defined subtotals, including operating profit or loss. The improved structure and new subtotals will give investors a consistent starting point for analyzing entities’ performance and make it easier to compare entities.

(2) Enhanced transparency of management-defined performance measures
IFRS 18 requires entities to disclose explanations of those entity-specific measures that are related to the income statement, referred to as management-defined performance measures.

(3) Useful grouping of information in the financial statements
IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes. The changes are expected to provide more detailed and useful information. IFRS 18 also requires entities to provide more transparency about operating expenses, helping investors to find and understand the information they need.

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

This new standard and its amendments permit subsidiaries without public accountability to provide reduced disclosures when applying IFRS Accounting Standards in their financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that elect to apply it.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Translation to a Hyperinflationary Presentation Currency (Amendments to IAS 21 and IAS 29)

The amendments include:

(1) Clarify that when the entity’s functional currency is that of a non-hyperinflationary economy but its presentation currency is the currency of a hyperinflationary economy, the entity shall translate its results and financial position using the closing rate at the date of the most recent statement of financial position.

(2) In the above circumstances, when the presentation currency ceases to be hyperinflationary economy, the entity shall not retranslate amounts that arose before the beginning of the reporting period.

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

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

Summary of material accounting policies

(1) Statement of Compliance

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

(2) Basis of Preparation

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(3) Basis of Consolidation

Preparation principle of consolidated financial statement

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

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

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

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

The Group re-assesses whether it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

If the Group loses control of a subsidiary, it:

A. derecognizes the assets (including goodwill) and liabilities of the subsidiary;
B. derecognizes the carrying amount of any non-controlling interest;
C. recognizes the fair value of the consideration received;
D. recognizes the fair value of any investment retained;
E. reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss, or transfer directly to retained earnings if required by other IFRSs; and
F. recognizes any resulting difference in profit or loss.

The consolidated entities are listed as follows:

Investor	Subsidiary	Main businesses	Percentage of ownership (%)
			31 December 2025	31 December 2024
The Company	LIRO ELECTRONICS CO., LTD.	Holding company	89.47%	89.47%
The Company	Liton Technology Corp. (Note1)	Selling and processing etched aluminum foils, selling and manufacturing formed aluminum foils	29.13%	29.30%
The Company	LELON ELECTRONICS (Thailand) CO., LTD.	Manufacturing and selling aluminum electrolytic capacitor	100%	100%
LIRO ELECTRONICS CO., LTD.	Lelon Electronics (HUIZHOU) Corp.	Manufacturing and selling aluminum electrolytic capacitor	100%	100%
LIRO ELECTRONICS CO., LTD.	Lelon Electronics (SUZHOU) Corp.	Manufacturing and selling aluminum electrolytic capacitor	100%	100%
LIRO ELECTRONICS CO., LTD.	Lelon International Industrial Limited	Holding company and selling electronic materials and capacitors	100%	100%
LIRO ELECTRONICS CO., LTD.	Lelon Electronics Technology (SUZHOU) Corp.	Manufacturing and selling aluminum electrolytic capacitor	100%	100%

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Investor	Subsidiary	Main businesses	Percentage of ownership (%)
			31 December 2025	31 December 2024
Lelon International	Dongguan Lehong	Selling electronic	100%	100%
Industrial Limited	Trading Co, Ltd.	components
Lelon Electronics	Suzhou Liding	Manufacturing and	100%	100%
(SUZHOU) Corp.	Automotive Technology Co., Ltd.	selling automotive electronic components
Liton Technology Corp.	LITON (BVI) CO., LTD.	Holding company	100%	100%
Liton Technology Corp.	V-TECH CO., LTD.	Manufacturing and selling Formed Aluminum Foils and holding	100%	100%
Liton Technology Corp.	EVERTECH CAPA CO., LTD.	Manufacturing and selling formed aluminum foils	100%	100%
Liton Technology Corp.	Ruyuan County Lidon Technology Corp.	Manufacturing and selling etched aluminum foils	40%	40%
LITON (BVI) CO., LTD.	Liton Electronics Technology (HUIZHOU) Co., Ltd.	Manufacturing and selling formed aluminum foils and guide pin	100%	100%
V-TECH CO., LTD.	FOREVER CO., LTD.	Holding company	100%	100%
FOREVER CO., LTD.	Liton Electronics Technology (Abazhou) Co., Ltd.	Manufacturing and selling formed aluminum foils	100%	100%
Liton Electronics Technology (HUIZHOU) Co., Ltd.	Ruyuan County Lidon Technology Corp.	Manufacturing and selling etched aluminum foils	20%	20%
Liton Electronics Technology (Hui Zhou) Co., Ltd.	Li-Han Technology (Huizhou) Co., Ltd(Note 2)	Comprehensive Utilization of Waste Resources Industry	60%	-%

Note1: The company's subsidiary, Liton Technology Corp., Ltd. converted its convertible bonds. As a result, the Company's shareholding ratio decreased from 29.30% to 29.13%.
Note 2: To enhance industry diversification, the Company's subsidiary, Lidon Technology Co., Ltd., increased its investment in Li-Han Technology (Huizhou) Co., Ltd. on July 1, 2025 and acquired a 60% equity interest

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

therein. Accordingly, Li-Han Technology (Huizhou) Co., Ltd. has been included as a subsidiary in the consolidated financial statements.

The reason that The Company control substantively Liton Technology Corp. are as follow:

A. The chairman of Liton Technology Corp. is also the chairman and general manager of the Company.

B. The nomination list of directors of Liton Technology Corp. is determined by the chairman of the Company.

C. Since the date of holding Liton Technology Corp., the Company has been the largest shareholder of Liton Technology Corp., and the remaining interests of Liton Technology Corp. are widely held by many other shareholders, and in the absence of contractual rights, the Company can obtain a relatively majority of voting rights power of attorney.

D. The management of the company believes that it has a substantial dominant position in the decision-making of relevant operating activities of Liton Technology Corp., and the management of Liton Technology Corp. also agrees that the company has a dominant position in its important operating or financial activities.

(4) Foreign currency transactions

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

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

(5) Translation of financial statements in foreign currency

The assets and liabilities of foreign operations are translated into NT$ at the closing rate of exchange prevailing at the reporting date and their income and expenses are translated at an average rate for the period. The exchange differences arising on the translation are recognized in other comprehensive income. On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized. In the case of a partial disposal resulting in loss of control over a subsidiary that includes a foreign operation, as well as partial disposals of interests in associates or joint arrangements that include a foreign operation, any retained interest that constitutes a financial asset including a foreign operation is accounted for as a disposal.

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

(6) Current and non-current distinction

An asset is classified as current when:

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

All other assets are classified as non-current.

A liability is classified as current when:

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

All other liabilities are classified as non-current.

(7) Cash and cash equivalents

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

(8) Financial instruments

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

A. Financial instruments: Recognition and Measurement

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

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

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

Financial assets measured at amortized cost

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

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(a) Purchased or originated credit-impaired financial assets. For those financial assets, the Company applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

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

Financial asset measured at fair value through other comprehensive income

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

(a) the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and

(b) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding

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

(a) A gain or loss on a financial asset measured at fair value through other comprehensive income recognized in other comprehensive income, except for impairment gains or losses and foreign exchange gains and losses, until the financial asset is derecognized or reclassified.

(b) When the financial asset is derecognized the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss as a reclassification adjustment.

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

(i) Purchased or originated credit-impaired financial assets. For those financial assets, the Group applies the credit-adjusted effective interest rate to the amortized cost of the financial asset from initial recognition.

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

Financial asset measured at fair value through profit or loss

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

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

B. Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on debt instrument investments measured at fair value through other comprehensive income and financial asset measured at amortized cost. The loss allowance on debt instrument investments measured at fair value through other comprehensive income is recognized in other comprehensive income and not reduce the carrying amount in the balance sheet.

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The loss allowance is measures as follows:

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

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

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

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

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

C. Derecognition of financial assets

A financial asset is derecognized when:

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

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Financial liabilities and equity

Classification between liabilities or equity

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

Equity instruments

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

Financial liabilities

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

Financial liabilities at fair value through profit or loss

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

A financial liability is classified as held for trading if:

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

Financial liabilities at amortized cost

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

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

Derecognition of financial liabilities

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

E. Offsetting of financial instruments

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

(9) Fair value measurement

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

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

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

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

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

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

(10) Inventories

Inventories are valued at lower of cost and net realizable value item by item.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Costs incurred in bringing each inventory to its present location and condition are accounted for as follows:

Merchandise inventory and Raw materials – Purchase cost under weighted average cost method.

Finished goods and work in progress – Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

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

(11) Property, plant and equipment

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

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

Items	Useful Lives
Buildings	5-56 years
Machinery and equipment	2-40 years
Office equipment	2-15 years
Transportation equipment	2-11 years
Leasehold improvement	8 years
Miscellaneous equipment	2-26 years

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

The assets' residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate, and are treated as changes in accounting estimates.

(12) Investment property

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

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

Item	Useful lives
Buildings	2-45 years

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

The Group transfers properties to or from investment properties according to the actual use of the properties.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

(13) Leases

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

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

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

Group as a lessee

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

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

Group as a lessor

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Intangible assets

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

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

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

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

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in profit or loss when the asset is derecognized.

A summary of the policies applied to the Group's intangible assets is as follows:

	Computer software	Patent	Other intangible assets
Useful lives	3-20 years	2-3 years	5-15 years
Amortization method used	Amortized on a straight-line basis over the estimated useful life	Amortized on a straight-line basis over the estimated useful life	Amortized on a straight-line basis over the estimated useful life
Internally generated or acquired	Acquired	Acquired	Acquired

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(15) Impairment of non-financial assets

The Group assesses at the end of each reporting period whether there is any indication that an asset in the scope of IAS 36 Impairment of Assets may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (“CGU”) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(16) Provisions

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

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

(17) Revenue recognition

The Group’s revenue arising from contracts with customers are primarily related to sale of goods and rendering of services. The accounting policies are explained as follows:

Sale of goods

The Group manufactures and sells machinery. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Group is aluminum electrolytic capacitor, forming aluminum foils, electro erosion foils and guide pin, and revenue is recognized based on the consideration stated in the contract.

The credit period of the Group’s sale of goods is from 30 to 150 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as accounts receivable. The Group usually collects the payments shortly after transfer of goods to customers; therefore, there is no significant financing component to the contract. However, for some rendering of services contracts, part of the consideration was received from customers upon signing the contract, and the Group has the obligation to provide the services subsequently; accordingly, these amounts are recognized as contract liabilities.

The period between the transfers of contract liabilities to revenue is usually within one year, thus, no significant financing component has arisen.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Rendering of services

The Group’s rendering of services is mainly based on the provision of management services, which is measured according to the estimated percentage of the cost incurred in each individual contract. When the outcome of the contract cannot be reasonably estimated, revenue is recognized only to the extent that the expenses incurred are expected to be recoverable.

Interest income

Financial assets measured at amortized cost (including loan and receivables and held-to-maturity financial assets) and available-for-sale financial assets, the interest income is estimated by using interest rate method, and recognized the interest income in profit and loss.

Dividend income

The Group will recognize the dividend income when the Group has the rights to receive dividends.

(18) Borrowing costs

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

(19) Government grants

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Where the Group receives non-monetary grants, the asset and the grant are recorded gross at nominal amounts and released to the statement of comprehensive income over the expected useful life and pattern of consumption of the benefit of the underlying asset by equal annual installments. Where loans or similar assistance are provided by governments or related institutions with an interest rate below the current applicable market rate, the effect of this favorable interest is regarded as additional government grant.

(20) Post-employment benefits

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

For the defined contribution plan, the Company will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Company recognizes expenses for the defined contribution plan in the period in which the contribution becomes due. Overseas subsidiaries and branches make contribution to the plan based on the requirements of local regulations.

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(21) Share-based payment transactions

The share-based payment transactions settled between the Group and its employees are measured at the fair value of the equity instruments on the grant date. The fair value is determined using an appropriate pricing model.

The cost of equity-settled share-based payment transactions is recognized over the period during which the service and performance conditions are fulfilled, and correspondingly recognized as an increase in equity. The cumulative expense recognized for equity-settled transactions as of the end of each reporting period before vesting reflects the passage of time and the Group's best estimate of the number of equity instruments that will ultimately vest. Changes in the cumulative cost recognized for share-based payment transactions at the beginning and end of each reporting period are recognized in profit or loss for that period.

(22) Income taxes

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

Current income tax

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

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

Deferred tax

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

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

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

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

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date. The measurement of deferred tax assets and deferred tax liabilities reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax relating to items recognized outside profit or loss is recognized outside profit or loss. Deferred tax items are recognized in correlation to the underlying transaction either in other comprehensive income or directly in equity. Deferred tax assets are reassessed at each reporting date and are recognized accordingly.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

According to the temporary exception in the International Tax Reform – Pillar Two Model Rules (Amendments to IAS 12), information about deferred tax assets and liabilities related to Pillar Two income tax will neither be recognized nor be disclosed.

(23) Business Combinations and Goodwill

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

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

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

After initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purpose and is not larger than an operating segment before aggregation.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation. Goodwill disposed of in this circumstance is measured based on the relative recoverable amounts of the operation disposed of and the portion of the cash-generating unit retained.

Significant accounting judgments, estimates and assumptions

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

(1) Judgement

In the process of applying the Group’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the consolidated financial statements:

A. Investment properties

Certain properties of the Group comprise a portion that is held to earn rentals or for capital appreciation and another portion that is owner-occupied. If these portions could be sold separately, the Group accounts for the portions separately as investment properties and property, plant and equipment.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Operating lease commitments - Company as a lessor

The Company has entered into commercial property leases on its investment property portfolio. The Company has determined, based on an evaluation of the terms and conditions of the arrangements, that it retains all the significant risks and rewards of ownership of these properties and accounts for the contracts as operating leases.

C. De facto control without a majority of the voting rights in invested companies.

The Company does not have majority of the voting rights in certain invested companies. However, after taking into consideration factors such as absolute size of the Company's holding, relative size of the other shareholdings, how widely spread are the remaining shareholders, contractual arrangements between shareholders, potential voting rights, etc., the Company reached the conclusion that it has de facto control over these invested companies. Please refer to Note 4 for further details.

(2) Estimates and assumptions

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

A. Fair value of financial instruments

Where the fair value of financial assets and financial liabilities recorded in the balance sheet cannot be derived from active markets, they are determined using valuation techniques including the income approach (for example the discounted cash flows model) or market approach. Changes in assumptions about these factors could affect the reported fair value of the financial instruments. Please refer to Note 12 for more details.

B. Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of the future salary etc.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

C. Income tax

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

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

D. Accounts receivable–estimation of impairment loss

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

E. Inventories

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Contents of significant accounts

(1) Cash and cash equivalents

	As of 31 December
	2025	2024
Cash on hand	$3,116	$2,626
Cash in transit	10,042	9,508
Demand deposits	3,171,294	3,237,414
Time deposits(Note)	1,157,996	799,668
Total	$4,342,448	$4,049,216

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

Cash and cash equivalents were not pledged.

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

	As of 31 December
	2025	2024
Financial assets mandatorily at fair value through profit or loss:
Financing product	$526,788	$723,059
Stocks	144,699	71,136
Total	$671,487	$794,195

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

(3) Financial assets measured at amortized cost - current

	As of 31 December
	2025	2024
Time deposits	$614,131	$-

The Group has not pledged any of its financial assets measured at fair value through profit or loss as collateral. Please refer to Note 12 for more details on credit risk.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(4) Accounts receivable, net

	As of 31 December
	2025	2024
Accounts receivable – non-related parties	$3,226,496	$2,931,904
Less: loss allowance	(36,846)	(59,804)
Subtotal	3,189,650	2,872,100
Accounts receivable –related parties	63,082	98,346
Total	$3,252,732	$2,970,446

Accounts receivable, net were not pledged.

Accounts receivable are generally on 30-150 day terms. The total carrying amount are NT$3,289,578 thousand and NT$3,030,250 thousand as of 31 December 2025 and 2024. Please refer to Note 6(14) for more details on loss allowance of accounts receivable for the years ended 31 December 2025 and 2024. Please refer to Note 12 for more details on credit risk management.

The Group’s subsidiaries in Mainland China endorse and transfer bank acceptance notes obtained from other enterprises to suppliers as settlement of trade payables. In respect of the above transactions, the Group assesses, in accordance with paragraphs 3.2.6 to 3.2.9 of IFRS 9, the extent to which it retains the risks and rewards of ownership of such notes, as well as whether control over the related notes receivable is retained, in order to determine whether the transfer of such notes meets the derecognition criteria.

A. Transferred notes receivable that have been derecognized in their entirety

For bank acceptance notes guaranteed by banks that are endorsed and transferred to suppliers, in addition to assessing the extent of retention of risks and rewards, the Group also considers other risks (including interest rate risk and late payment risk). For bank acceptance notes issued by banks with higher credit ratings, credit risk and late payment risk are relatively low, and interest rate risk is transferred upon endorsement. Accordingly, the Group assesses that substantially all the risks and rewards of ownership of such bank acceptance notes have been transferred and therefore derecognizes them upon settlement of trade payables. As of December 31, 2025 and December 31, 2024, the amounts of notes receivable that had not yet matured and met the above criteria and were derecognized amounted to NT$491,745 thousand and NT$347,210 thousand, respectively.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Transferred notes receivable that have not been derecognized in their entirety

Except for the aforementioned bank acceptance notes issued by banks with higher credit ratings, other bank acceptance notes as well as finance company acceptance notes are not derecognized upon settlement of trade payables, as substantially all the risks and rewards of ownership have not been transferred. As of December 31, 2025 and 2024, the amounts of notes receivable that had been paid to suppliers but not derecognized amounted to NT$32,225 thousand and NT$315,388 thousand, respectively.

(5) Inventories

	As of 31 December
	2025	2024
Raw materials	$655,223	$573,689
Supplies	17,307	21,156
Work in progress	196,167	136,232
Finished goods	848,602	785,751
Merchandise	3,625	7,780
Materials and supplies in transit	13,305	26,464
Total	$1,734,229	$1,551,072

The inventory cost recognized as operating costs for the years ended 31 December 2025 and 2024 were NT$7,674,326 thousand and NT$7,252,189 thousand, respectively. The price reduction of inventories related to cost of goods sold were NT$4,219 thousand and the gain from price recovery of inventories related to cost of goods sold were NT$(9,566) thousand. As the factors that previously caused the net realizable value of inventories to fall below cost no longer existed, the Group recognized a reversal of inventory write-down and provision for obsolete inventories in 2024.

The aforementioned inventories have not been pledged as collateral.

(6) Non-current assets held for sale

Assets of disposal groups classified as held for sale

	As of 31 December
	2025	2024
Buildings	$-	$70,240
Right-of-use asset	-	20,802
Total	$-	$91,042

Liabilities directly associated with non-current assets (or disposal groups) classified as held for sale:

	As of 31 December
	2025	2024
Advance receipts for relocation compensation	$-	$43,158

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

In response to the local government’s urban planning and management requirements, the Group resolved at the Board of Directors’ meeting on 22 July 2024, to dispose of the property, plant and equipment, and land use rights located at Zhongshan North Road, Songling Town, Wujiang Economic and Technological Development Zone, Jiangsu Province, China. A sale and purchase agreement was signed on the same day, with a total transaction price of RMB136,180 thousand. The related adjustments have been reclassified as non-current assets held for sale, net, and are presented separately in the consolidated balance sheet. The Group completed the transaction in November 2025 and recognized a gain on disposal of non-current assets held for sale of NT$411,925 thousand. For related information, please refer to Note 6(17)B.

(7) Property, plant and equipment

	As of 31 December
	2025	2024
Owner occupied property, plant and equipment	$6,256,111	$6,040,472

A. Owner occupied property, plant and equipment:

	Land	Buildings	Machinery and equipment	Office equipment	Transportation equipment	Leasehold improvements	Other equipment	Construction in progress and equipment awaiting examination	Total
Cost:
As of 1 January 2025	$467,565	$2,360,246	$7,162,356	$181,105	$32,864	$1,872	$448,572	$254,099	$10,908,679
Additions	-	6,915	193,543	8,635	602	-	49,707	516,165	775,567
Disposals	-	(12,250)	(191,024)	(17,727)	(3,556)	(545)	(72,791)	-	(297,893)
Other changes	-	113,473	62,309	4,266	-	-	11,726	(171,041)	20,733
Exchange differences	9,306	16,751	36,005	627	64	4	1,635	21,586	85,978
As of 31 December 2025	$476,871	$2,485,135	$7,263,189	$176,906	$29,974	$1,331	$438,849	$620,809	$11,493,064
Depreciation and impairment:
As of 1 January 2025	$-	$577,800	$3,871,730	$108,391	$22,039	$1,555	$286,692	$-	$4,868,207
Depreciation	-	130,471	391,384	17,640	2,656	160	37,491	-	579,802
Disposals	-	(12,231)	(155,090)	(17,063)	(3,087)	(545)	(57,347)	-	(245,363)
Other changes	-	(2,098)	-	-	-	-	-	-	(2,098)
Exchange differences	-	8,912	25,922	502	71	9	989	-	36,405
As of 31 December 2025	$-	$702,854	$4,133,946	$109,470	$21,679	$1,179	$267,825	$-	$5,236,953

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	Land	Buildings	Machinery and equipment	Office equipment	Transportation equipment	Leasehold improvements	Other equipment	Construction in progress and equipment awaiting examination	Total
Cost:
As of 1 January 2024	$239,886	$2,583,172	$6,874,158	179,040	$35,991	$1,828	$433,810	$291,658	$10,639,543
Additions	-	19,211	70,332	11,584	2,397	-	30,264	394,618	528,406
Disposals	-	(345)	(128,951)	(4,908)	(7,405)	-	(21,403)	-	(163,012)
Reclassified as non-current assets held for sale	-	(160,710)	-	-	-	-	(34)	-	(160,744)
Other changes	216,919	(158,503)	118,040	(9,928)	717	-	(7,450)	(445,442)	(285,647)
Exchange differences	10,760	77,421	228,777	5,317	1,164	44	13,385	13,265	350,133
As of 31 December 2024	$467,565	$2,360,246	$7,162,356	$181,105	$32,864	$1,872	$448,572	$254,099	$10,908,679
Depreciation and impairment:
As of 1 January 2024	$-	$719,521	$3,514,173	$103,453	$23,193	$1,361	$282,474	$-	$4,644,175
Depreciation	-	121,410	399,303	18,401	3,271	165	37,119	-	579,669
Disposals	-	(345)	(75,590)	(4,778)	(5,044)	-	(19,354)	-	(105,111)
Reclassified as non-current assets held for sale	-	(90,470)	-		-	-	(34)	-	(90,504)
Other changes	-	(193,223)	(81,190)	(11,527)	(106)	-	(22,006)	-	(308,052)
Exchange differences	-	20,907	115,034	2,842	725	29	8,493	-	148,030
As of 31 December 2024	$-	$577,800	$3,871,730	$108,391	$22,039	$1,555	$286,692	$-	$4,868,207

Net carrying amount as at:

31 December 2025	$476,871	$1,782,281	$3,129,243	$67,436	$8,295	$152	$171,024	$620,809	$6,256,111
31 December 2024	$467,565	$1,782,446	$3,290,626	$72,714	$10,825	$317	$161,880	$254,099	$6,040,472

B. Please refer to Note 8 for more details on property, plant and equipment under pledge.

C. The Group did not capitalize interest expenses incurred on the acquisition of property, plant and equipment during the years ended 31 December 2025 and 2024.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Components of building that have different useful lives are main building structure, factory decoration, hydroelectric engineering and central air-condition wiring engineering, which are depreciated over 51 years, 21 years, 16 years and 9 years, respectively.

E. Liton Technology Corp’s components of building that has different useful lives are main building structure, hydroelectric engineering, well drainage engineering, purification station appurtenant project and acid and alkali-resistance engineering, which are depreciated over 56 years, 45 years, 20 years, 5 years and 3 years, respectively.

(8) Short-term loans

	As of 31 December
	2025	2024
Unsecured bank loans	$1,616,794	$2,030,677
Secured bank loans	-	134,280
Total	$1,616,794	$2,164,957
	For the years ended 31 December
	2025	2024
Interest rates applied (Unsecured bank loans)	0.81%~4.74%	0.61%~2.80%
Interest rates applied (Secured bank loans)	-%	2.70%~3.00%

The Group’s unused short-term lines of credits amounted to NT$3,234,349 thousand and NT$2,842,848 thousand as of 31 December 2025 and 2024, respectively.

Please refer to Note 8 for more details under pledge.

(9) Other payables

	As of 31 December
	2025	2024
Salaries and bonus payable	$344,638	$310,290
Employee's compensation and remuneration to directors and supervisors	99,205	93,668
Consumption payable	48,708	51,144
Commissions payable	34,540	37,465
Water and electricity payable	16,815	36,493
Sales tax payable	25,026	24,104
Payable on equipment	31,638	23,310
Other	178,828	198,132
Total	$779,398	$774,606

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(10) Long-term loans

As of 31 December 2025 and 2024, there were no long-term loans.

Details of long-term loans are as follows:

		As of 31 December
		2025	2024
Long-term loans		$411,000	$224,000
Less: current portion		(120,000)	(64,375)
Total		$291,000	$159,625
Lenders	As of 31 Dec. 2025	Interest Rate	Maturity date and terms of repayment
KGI Bank unsecured bank loans	$182,000	1.88%	The credit facility covers the period from 17 January 2025 to 17 January 2032. Based on the first drawdown date, the first repayment installment becomes due after thirty months. Thereafter, repayments are made in semiannual installments. Each installment is equal to ten percent of the outstanding credit balance as of the last utilization date.
CTBC Bank unsecured bank loans	129,000	1.80%	The loan facility covers the period from July 26, 2024 to January 23, 2027. Based on the first drawdown date, the first principal repayment installment becomes due after twelve months. Thereafter, principal repayments are made on a semiannual basis, with each installment amounting to NT$60 million. The remaining outstanding principal shall be repaid in full in the final installment.
KGI Bank unsecured bank loans	100,000	1.88%	The credit facility covers the period from September 15, 2025 to January 17, 2032. Based on the first drawdown date, the first principal repayment installment becomes due after thirty months. Thereafter, principal repayments are made on a semiannual basis. Each installment is equal to ten percent of the outstanding credit balance as of the last drawdown date.
Subtotal	411,000
Less: current portion	(120,000)
Total	$291,000

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Lenders	As of 31 Dec. 2024	Interest Rate	Maturity date and terms of repayment
CTBC Bank unsecured bank loans	$189,000	1.80%	From 26 July 2024 to 23 January 2027, starting from the date of first use, the principal will be amortized in semiannual installments. The first installment is due twelve months after the initial drawdown date. NT$60 million of the principal is repaid in each installment, and the remaining balance is repaid in full in the final installment.
CTBC Bank unsecured bank loans	35,000	0.50%	From 12 September 2024 to 10 September 2027, starting from the date of first use, the first installment is due twelve months thereafter. The principal will then be amortized in equal monthly installments.
Subtotal	224,000
Less: current portion	(64,375)
Total	$159,625

(11) Post-employment benefits

Defined contribution plan

The Group and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C.

Under the Labor Pension Act, the Group and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees’ monthly wages to the employees’ individual pension accounts. The Group and its domestic subsidiaries have made monthly contributions of 6% of each individual employee’s salaries or wages to employees’ pension accounts.

Pension expenses under the defined contribution plan for the years ended 31 December 2025 and 2024 were NT$7,124 thousand and NT$7,012 thousand, respectively.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Defined benefits plan

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

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under discretionary accounts, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without overexposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Group expects to contribute NT$1,632 thousand to its defined benefit plan during the 12 months beginning after 31 December 2025.

The weighted average durations of the Company's defined benefit plan obligation as of 31 December 2025 and 2024 were 7 years and 6 years, respectively. The weighted average durations of Liton Technology Corp.'s were both 1 years.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Pension costs recognized in profit or loss are as follows:

	For the years ended 31 December
	2025	2024
Current period service costs	$-	$35
Net interest on the net defined benefit liabilities	145	275
Total	$145	$310

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

	31 Dec. 2025	31 Dec. 2024	1 Jan. 2024
Defined benefit obligation	$105,700	$102,968	$111,012
Plan assets at fair value	(102,250)	(94,862)	(89,489)
Other non-current liabilities - accrued pension liabilities recognized on the consolidated balance sheets	$3,450	$8,106	$21,523

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

	Defined benefit obligation	Plan assets at fair value	Net defined benefit liability (assets)
As of 1 January 2024	$111,012	$(89,489)	$21,523
Current period service costs	35	-	35
Interest expense (income)	1,321	(1,046)	275
Subtotal	112,368	(90,535)	21,833
Remeasurements of the defined benefit liabilities /assets:
Actuarial gains and losses arising from changes in financial assumptions	(2,683)	-	(2,683)
Experience adjustments	6,334	-	6,334
Remeasurement on defined benefit assets	-	(8,001)	(8,001)
Subtotal	3,651	(8,001)	(4,350)

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	Defined benefit obligation	Plan assets at fair value	Net defined benefit liability (assets)
Contributions by employer	$-	$(9,377)	$(9,377)
Payments of benefit obligation	(13,051)	13,051	-
As of 31 December 2024	$102,968	$(94,862)	$8,106
Current period service costs
Interest expense (income)	1,567	(1,422)	145
Subtotal	104,535	(96,284)	8,251
Remeasurements of the defined benefit liabilities /assets:
Actuarial gains and losses arising from changes in financial assumptions	1,474	-	1,474
Experience adjustments	2,364	-	2,364
Remeasurement on defined benefit assets	-	(7,006)	(7,006)
Subtotal	3,838	(7,006)	(3,168)
Contributions by employer	-	(1,633)	(1,633)
Payments of benefit obligation	(2,673)	2,673	-
As of 31 December 2025	$105,700	$(102,250)	$3,450

The principal assumptions used in determining the Group's defined benefit plan are shown below:

The Company

	As of 31 December
	2025	2024
Discount rate	1.35%	1.55%
Expected rate of salary increases	2.00%	2.00%

Liton Technology Corp.

	As of 31 December
	2025	2024
Discount rate	1.16%	1.39%
Expected rate of salary increases	1.00%	1.00%

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Sensitivity analysis for significant assumption is shown below:

	For the years ended 31 December
	2025		2024
	Increase defined benefit obligation	Decrease defined benefit obligation	Increase defined benefit obligation	Decrease defined benefit obligation
Discount rate increase by 0.5%	$-	$(2,190)	$-	$(1,142)
Discount rate decrease by 0.5%	3,901	-	4,114	-
Future salary increase by 0.5%	3,855	-	4,076	-
Future salary decrease by 0.5%	-	(2,191)	-	(1,143)

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

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

(12) Equity

A. Common stock

The Company's authorized capital was NT$3,600,000 thousand as of 31 December 2025 and 2024. The issued capital was NT$1,647,351 thousand in a total of 164,735 thousand shares. Each share has one voting right and a right to receive dividends.

B. Capital surplus

	As of 31 December
	2025	2024
Additional paid - in capital	$1,793,730	$1,793,730
Increase through changes in ownership interests in subsidiaries	220,912	217,453
Treasury share transactions	20,704	20,704
Expired Share options	11,778	11,778
Difference between consideration received and carrying amount of interests in subsidiaries acquired	10,540	10,540
Total	$2,057,664	$2,054,205

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

C. Retained earnings and dividend policies

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

(a) Payment of all taxes and dues;
(b) Offset prior years’ operation losses;
(c) Set aside 10% as legal reserve;
(d) Set aside or reverse special reserve in accordance with law and regulations;
(e) The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

The policy of dividend distribution should reflect factors such as the current and future investment environment, fund requirements, domestic and international competition and capital budgets; as well as the interest of the shareholders, share bonus equilibrium and long-term financial planning etc. The Board of Directors shall make the distribution proposal annually and present it at the shareholders’ meeting. For the payment of dividend. The cash dividend ratio is not less than 10% of the total dividend. If the cash dividend per share is less than NT$0.5, the board of directors is authorized to draft a proposal, and the shareholders’ meeting decides to pay cash dividends or stock dividends.

According to the Company Act, the Company needs to set aside amount to legal reserve unless where such legal reserve amounts to the total paid-in capital. The legal reserve can be used to make good the deficit of the Company. When the Company incurs no loss, it may distribute the portion of legal serve which exceeds 25% of the paid-in capital by issuing new shares or by cash in proportion to the number of shares being held by each of the shareholders.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

When the Company distributing distributable earnings, it shall set aside to special reserve, an amount equal to “other net deductions from shareholders” equity for the current fiscal year, provided that if the company has already set aside special reserve according to the requirements for the adoption of IFRS, it shall set aside supplemental special reserve based on the difference between the amount already set aside and other net deductions from shareholders’ equity. For any subsequent reversal of other net deductions from shareholders’ equity, the amount reversed may be distributed from the special reserve.

The FSC on 31 March 2021 issued Order No. Financial-Supervisory- Securities-Corporate-1090150022, which sets out the following provisions for compliance: On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion of the special reserve first appropriated and distribute it.

The Company did not reverse any special reserve as a result of use, disposal or reclassification of related assets during the periods ended 31 December 2025 and 2024.

Details of the 2025 and 2024 earnings distribution and dividends per share as approved and resolved by the Board of Directors' meeting and shareholders' meeting on 13 March 2026 and 25 June 2025, respectively, are as follows:

	Appropriation of earnings		Dividend per share (NT$)
	2025	2024	2025	2024
Legal reserve	$143,947	$115,993
Special reserve (reversal) addition	(18,417)	(245,000)
Common stock – cash dividend	576,573	510,679	$3.50	$3.10

The subsidiary- Liton Technology Corp.'s details of the 2025 and 2024 earnings distribution and dividends per share as approved and resolved by shareholders' meeting on 24 June 2025 and 27 June 2024, respectively, are as follows:

	Appropriation of earnings		Dividend per share (NT$)
	2024	2023	2024	2023
Legal reserve	$46,788	$29,462
Special reserve	(102,245)	60,398
Common stock – cash dividend	262,013	156,112	$1.75	$1.10

Please refer to Note 6(16) for details on employees' compensation and remuneration to directors and supervisors.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Non-controlling interests

	For the years ended 31 December
	2025	2024
Beginning balance	$4,235,379	$3,449,930
Gains attributable to non-controlling interests	568,946	554,084
Other comprehensive income attributable to non-controlling interests, net of tax:
Remeasurements of defined benefit plans	780	(963)
Unrealized gains (losses) measured at fair value through other comprehensive income	11	74
Exchange differences resulting from translating the financial statements of foreign operations	44,766	115,098
Changes in ownership interests in subsidiaries	31,006	269,949
Arising from consolidation	13,039	-
Dividend distribution of the subsidiary	(189,309)	(152,793)
Ending balance	$4,704,618	$4,235,379

(13) Operating revenue

	For the years ended 31 December
	2025	2024
Revenue from customer contracts
Sale of goods	$11,292,538	$10,486,055
Rendering of services	-	898
Total	$11,292,538	$10,486,953

Analysis of revenue from contracts with customers for the years ended 31 December 2025 and 2024 are as follows:

A. Disaggregation of revenue

For the year ended 31 December 2025

| | Lelon
Electronics
Corp. | Liton
Technology
Corp. | Total |
| --- | --- | --- | --- |
| Sale of goods | $7,541,861 | $3,750,677 | $11,292,538 |
| Rendering of services | - | - | - |
| Total | $7,541,861 | $3,750,677 | $11,292,538 |

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

For the year ended 31 December 2024

| | Lelon
Electronics
Corp. | Liton
Technology
Corp. | Total |
| --- | --- | --- | --- |
| Sale of goods | $6,630,107 | $3,855,948 | $10,486,055 |
| Rendering of services | - | 898 | 898 |
| Total | $6,630,107 | $3,856,846 | $10,486,953 |

The Timing of revenue recognition of the Group are all at a point in time.

B. Contract balances

Contract liabilities – current

	As of
	31 Dec. 2025	31 Dec. 2024	1 Jan. 2024
Sales of goods	$130,472	$97,420	$33,868

The significant changes in the balance of contract liabilities of the Group during the years ended 31 December 2025 and 2024 are as follows:

	For the years ended 31 December
	2025	2024
The opening balance transferred to revenue	$(86,880)	$(27,647)
Increase in receipts in advance during the period (excluding the amount incurred and transferred to revenue during the period)	118,064	90,035
Exchange differences	1,868	1,164
Changes during the period	$33,052	$63,552

C. Transaction price allocated to unsatisfied performance obligations

None.

D. Assets recognized from costs to fulfil a contract

None.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(14) Expected credit (gains) losses

	For the years ended 31 December
	2025	2024
Operating expenses – Expected credit losses (gains)
Accounts receivable	$(21,504)	$30,996
Long-term receivables	(3,299)	(6,042)
Total	$(24,803)	$24,954

Please refer to Note 12 for more details on credit risk.

The Group measures the loss allowance of accounts receivable (including note receivables, accounts receivable, other receivables and long-term receivables (which was recognized as other non-current assets)) at an amount equal to lifetime expected credit losses. The assessment of the Group’s loss allowance as of 31 December 2025 and 2024 are as follows:

As of 31 December 2025

Group 1: Some counterparties were assessed individually. The amount of long-term receivables was NT$32,781 thousand recognized as other non-current assets, which was all overdue, and the loss allowance was NT$32,781 thousand. As of the financial reporting date, the contracted amount of long-term receivables that have been write-off and with recourse amounted to NT$32,781 thousand.

Group 2: The loss allowance is measured using expected credit loss rates as follows:

| | Not yet due
(Note) | Overdue | | | | | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | ≤30 days | 31-180 days | 181-270 days | 271-365 days | ≥366 days | |
| Gross carrying amount | $3,663,366 | $103,522 | $3,937 | $- | $- | $29,668 | $3,800,493 |
| Loss ratio | -% | 1-20% | 20-30% | 30-50% | 80-100% | 100% | |
| Lifetime expected credit losses | - | (8,449) | (1,037) | - | - | (29,668) | (39,154) |
| Carrying amount of accounts receivable | $3,663,366 | $95,073 | $2,900 | $- | $- | $- | $3,761,339 |

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of 31 December 2024

Group 1: Some counterparties were assessed individually. The amount of long-term receivables was NT$53,239 thousand recognized as other non-current assets, which was all overdue, and the loss allowance was NT$53,239 thousand. As of the financial reporting date, the contracted amount of long-term receivables that have been write-off and with recourse amounted to NT$53,239 thousand.

Group 2: The loss allowance is measured using expected credit losses as follows:

| | Not yet due
(Note) | Overdue | | | | | Total |
| --- | --- | --- | --- | --- | --- | --- | --- |
| | | ≤30 days | 91-180 days | 181-270 days | 271-365 days | ≥366 days | |
| Gross carrying amount | $3,478,135 | $77,309 | $16,257 | $16,164 | $19,253 | $26,879 | $3,633,997 |
| Loss ratio | -% | 1-10% | 20-30% | 40-70% | 90%-100% | 100% | |
| Lifetime expected credit losses | - | (7,710) | (3,478) | (6,488) | (17,557) | (26,879) | (62,112) |
| Carrying amount of accounts receivable | $3,478,135 | $69,599 | $12,779 | $9,676 | $1,696 | $ - | $3,571,885 |

Note: The Group’s note receivables are not overdue.

The movement in the provision for impairment of note receivables, accounts receivable, other receivables and long-term receivables during the 31 December 2025 and 2024 are as follows:

	Notes receivable	Accounts receivable	Other receivables	Long-term receivables	Total
Bal. as of 1 January 2025	$-	$59,804	$2,308	$53,239	$115,351
Reversal for the current period	-	(21,504)	-	(3,299)	(24,803)
Written off due to uncollectibility	-	(84)	-	(17,159)	(17,243)
Effect of the exchange rate changes	-	(1,370)	-	-	(1,370)
Bal. as of 31 December 2025	$-	$36,846	$2,308	$32,781	$71,935
Bal. as of 1 January 2024	$-	$28,301	$2,308	$59,281	$89,890
Addition (reversal) for the current period	-	30,996	-	(6,042)	24,954
Effect of the exchange rate changes	-	507	-	-	507
Bal. as of 31 December 2024	$-	$59,804	$2,308	$53,239	$115,351

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(15) Leases

A. The Group as a lessee

The Group leases various properties, including real estate such as land, buildings, and transportation equipment. The lease terms range from 2 to 50 years.

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

(a) Amounts recognized in the balance sheet

(i) Right-of-use asset

The carrying amount of right-of-use assets

	As of 31 December
	2025	2024
Land	$155,258	$139,858
Buildings	43,974	48,313
Transportation equipment	398	1,193
Other equipment	59	238
Total	$199,689	$189,602

During the years ended 31 December 2025 and 2024, the Group’s additions to right-of-use assets amounting to NT$19,425 thousand and NT$0 thousand.

(ii) Lease liabilities

	As of 31 December
	2025	2024
Lease liabilities
Current	$4,398	$4,636
Non-Current	46,900	51,048
Total	$51,298	$55,684

Please refer to Note 6 (17)(3) for the interest on lease liabilities recognized during the years ended 31 December 2025. Refer to Note 12(5) liquidity risk management for the maturity analysis for lease liabilities as of 31 December 2025.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) Amounts recognized in the statements of comprehensive income

Depreciation charge for right-of-use assets

	For the years ended 31 December
	2025	2024
Land	$4,542	$5,276
Buildings	4,411	4,872
Transportation equipment	795	795
Other equipment	178	179
Total	$9,926	$11,122

	For the years ended 31 December
	2025	2024
The expenses relating to short-term leases	$5,648	$8,123

(d) Cash outflow related to lessee and lease activity

During the years ended 31 December 2025 and 2024, the Group's total cash outflows for leases amounting to NT$13,678 thousand and NT$16,690 thousand.

B. The Group as a lessor

Leases of owned investment properties are classified as operating leases as they do not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

	For the years ended 31 December
	2025	2024
Lease income for operating leases
Income relating to fixed lease payments and variable lease payments that depend on an index or a rate	$2,761	$2,750

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

| Function
Nature | For the years ended 31 December | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2025 | | | 2024 | | |
| | Operating costs | Operating expenses | Total | Operating costs | Operating expenses | Total |
| Employee benefits | | | | | | |
| Salaries | $981,099 | $511,067 | $1,492,166 | $912,058 | $489,773 | $1,401,831 |
| Labor and health insurance | 158,739 | 65,936 | 224,675 | 102,977 | 60,107 | 163,084 |
| Pension | 786 | 6,483 | 7,269 | 1,056 | 6,266 | 7,322 |
| Other employee benefits | 21,540 | 85,055 | 106,595 | 22,768 | 76,368 | 99,136 |
| Depreciation | 517,667 | 72,356 | 590,023 | 525,541 | 65,597 | 591,138 |
| Amortization | 209 | 3,603 | 3,812 | 531 | 3,989 | 4,520 |

According to the Company's Articles of Incorporation, if the Company records a profit for the year, it shall allocate not less than 2% of such profit as employee compensation (of which not less than 50% shall be distributed to general employees) and not more than 4% as directors' remuneration. However, if the Company has accumulated losses, an amount shall first be reserved to cover such losses. The aforementioned employee compensation may be distributed in the form of shares or cash, and shall be resolved by the Board of Directors with the approval of at least two-thirds of the directors in attendance and a majority vote of the attending directors, and reported to the shareholders' meeting. Information regarding employee compensation and directors' remuneration approved by the Board of Directors can be obtained from the Market Observation Post System (MOPS) of the Taiwan Stock Exchange.

For the year ended 2025, based on the Company's profitability, employee compensation and directors' remuneration were accrued at rates of 3.00% and 1.40%, respectively. The employee compensation and directors' remuneration recognized for the year ended 2025 amounted to NT$53,648 thousand and NT$25,036 thousand, respectively, which were recorded under salary expenses. For the year ended 2024, employee compensation and directors' remuneration were accrued at rates of 3.66% and 1.80%, respectively. The employee compensation and directors' remuneration recognized for the year ended 2024 amounted to NT$47,505 thousand and NT$23,363 thousand, respectively, which were recorded under salary expenses.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

On March 13, 2026, the Board of Directors resolved to distribute employee compensation and directors' remuneration in cash in the amounts of NT$53,603 thousand and NT$24,300 thousand, respectively. The differences between the accrued amounts and the amounts resolved by the Board to be distributed were NT$(45) thousand and NT$(736) thousand, respectively, which mainly resulted from estimation differences and were recognized in profit or loss for the year ending 2026.

On March 13, 2025, the Board of Directors resolved to distribute employee compensation and directors' remuneration in cash in the amounts of NT$49,293 thousand and NT$23,349 thousand, respectively. There was no difference between the actual amounts paid and the amounts resolved by the Board to be distributed.

(17) Non-operating income and expenses

A. Other income

	For the years ended 31 December
	2025	2024
Government grants income	$50,587	$37,787
Rental income	2,761	2,755
Dividends income	1,839	1,620
Other income - others	121,831	82,561
Total	$177,018	$124,723

B. Other gains and losses

	For the years ended 31 December
	2025	2024
Gain on disposal of non-current assets held for sale	$411,925	$-
Gain on disposal of investments	7,227	-
Gains on financial assets at fair value through profit or loss	3,003	812
Gain (Losses) on disposal of property, plant and equipment	474	(200)
(Losses) Gain on disposal of investments	(146,383)	180,535
Others	(12,911)	(10,700)
Total	$263,335	$170,447

C. Finance costs

	For the years ended 31 December
	2025	2024
Interest on borrowings from bank	$(40,357)	$(44,809)
Interests on bonds payable	-	(3,862)
Interest on lease liabilities	(3,510)	(3,864)
Total	$(43,867)	$(52,535)

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(18) Components of other comprehensive income

A. For the year ended 31 December 2025:

	Arising during the period	Reclassification during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Not to be reclassified to profit or loss in subsequent periods:
Remeasurements of defined benefit plans	$3,168	$-	$3,168	$(634)	$2,534
Unrealized gains(losses) on equity instruments measured at fair value through other comprehensive income	(436)	-	(436)	-	(436)
To be reclassified to profit or loss in subsequent periods:
Exchange differences resulting from translating the financial statements of a foreign operation	158,568		158,568	-	158,568
Total of other comprehensive income	$161,300	$-	$161,300	$(634)	$160,666

B. For the year ended 31 December 2024:

	Arising during the period	Reclassification during the period	Other comprehensive income, before tax	Income tax relating to components of other comprehensive income	Other comprehensive income, net of tax
Not to be reclassified to profit or loss in subsequent periods:
Remeasurements of defined benefit plans	$4,350	$-	$4,350	$(870)	$3,480
Unrealized gains(losses) on equity instruments measured at fair value through other comprehensive income	(489)	-	(489)	-	(489)
To be reclassified to profit or loss in subsequent periods:
Exchange differences resulting from translating the financial statements of a foreign operation	360,651	-	360,651	-	360,651
Total of other comprehensive income	$364,512	$-	$364,512	$(870)	$363,642

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(19) Income tax expense

The major components of income tax expenses for the years ended 31 December 2025 and 2024 are as follows:

A. Income tax expense recognized in profit or loss

	For the years ended 31 December
	2025	2024
Current income tax expense:
Current income tax charge	$582,462	$450,632
Adjustments in respect of current income tax of prior periods	(6,798)	10,278
Deferred tax expense:
Deferred tax expense relating to origination and reversal of temporary differences	218,449	67,684
Total income tax expense	$794,113	$528,594

B. Income tax relating to components of other comprehensive income

	For the years ended 31 December
	2025	2024
Deferred tax expense:
Remeasurements of defined benefit plans	$(634)	$(870)

C. A reconciliation between tax expense and the product of accounting profit multiplied by applicable tax rates is as follows:

	For the years ended 31 December
	2025	2024
Accounting income before tax from continuing operations	$2,800,776	$2,238,164
Tax expense calculated at the applicable domestic tax rates of the respective countries.	$1,009,144	$773,482
Additional tax levied on undistributed earnings	51,980	14,306
Income tax effects of tax-exempt income	(1,572)	(4,396)
Income tax effects of non-deductible expenses for tax purposes	1,362	1,337
Income tax effects of deferred tax assets and liabilities	229,343	18,474
Current income tax adjustments in respect of prior years	(6,798)	10,278
Income tax effects of other tax law adjustments	(489,346)	(284,887)
Total income tax expense recognized in profit or loss	$794,113	$528,594

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

D. Deferred tax assets (liabilities) relate to the following:

(a) For the year ended 31 December 2025

	Balance as of 1 January	Recognized in profit or loss	Recognized in other comprehensive income	Balance as of 31 December
Temporary differences
The Company
Unrealized foreign exchange gains or losses	$(4,072)	$3,267	$-	$(805)
Loss from price reduction of inventories	319	336	-	655
Loss allowance	13,549	(824)	-	12,725
Investments accounted for using the equity method	(27,147)	(172,988)	-	(200,135)
Difference between consideration received and carrying amount of interests in subsidiaries disposed of	(2,230)	-	-	(2,230)
Defined benefit liability	(347)	(117)	-	(464)
Remeasurements of defined benefit plans	4,745	-	(359)	4,386
Reserve for land appreciation tax	(11,470)	-	-	(11,470)
Exchange differences resulting from translating the financial statements of a foreign operation	(8,720)	-	-	(8,720)
Liton Technology Corp.
Unrealized intragroup profits and losses	$8,739	$106	$-	$8,845
Unrealized foreign exchange gains or losses	(1,940)	5,627	-	3,687
Loss from price reduction of inventories	219	21	-	240
Unrealized gains on foreign investments	(16,899)	(53,449)	-	(70,348)
Defined benefit liability	(1,718)	(181)	-	(1,899)
Remeasurements of defined benefit plans	(759)	-	(275)	(1,034)
Deferred income-government grants	12,968	(247)	-	12,721
Deferred tax (expense) income		$(218,449)	$(634)
Net deferred tax assets (liabilities)	$(34,763)			$(253,846)
Reflected in balance sheet as follows:
Deferred tax assets	$40,539			$43,259
Deferred tax liabilities	$(75,302)			$(297,105)

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(b) For the year ended 31 December 2024

	Balance as of 1 January	Recognized in profit or loss	Recognized in other comprehensive income	Exchange differences	Balance as of 31 December
Temporary differences
The Company
Unrealized foreign exchange gains or losses	$7,760	$(11,832)	$-	$-	$(4,072)
Loss from price reduction of inventories	370	(51)	-	-	319
Loss allowance	14,872	(1,323)	-	-	13,549
Investments accounted for using the equity method- LIRO	(27,147)	-	-	-	(27,147)
Difference between consideration received and carrying amount of interests in subsidiaries disposed of	(2,230)	-	-	-	(2,230)
Defined benefit liability	129	(476)	-	-	(347)
Remeasurements of defined benefit plans	5,956	-	(1,211)	-	4,745
Reserve for land appreciation tax	(11,470)	-	-	-	(11,470)
Exchange differences resulting from translating the financial statements of a foreign operation	(8,720)	-	-	-	(8,720)
Unused Accumulated losses	31,777	(32,278)		501	-
Liton Technology Corp.
Unrealized intragroup profits and losses	$10,019	$(1,280)	$-	$-	$8,739
Unrealized foreign exchange gains or losses	2,794	(4,734)	-	-	(1,940)
Loss from price reduction of inventories	342	(123)	-	-	219
Unrealized gains on foreign investments	-	(16,899)			(16,899)
Defined benefit liability	(380)	(1,338)	-	-	(1,718)
Remeasurements of defined benefit plans	(1,100)	-	341	-	(759)
Deferred income-government grants	10,317	2,651	-	-	12,968
Deferred tax (expense) income		$(67,683)	$(870)	$501
Net deferred tax assets (liabilities)	$33,289				$34,763
Reflected in balance sheet as follows:
Deferred tax assets	$84,336				$40,539
Deferred tax liabilities	$(51,047)				$(75,302)

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

E. Unrecognized deferred tax assets

As of 31 December 2025 and 2024, the Group is not probable to has taxable income in the future so did not recognized deferred tax assets amounted to NT$3,394 thousand and NT$20,865, respectively.

F. Unrecognized deferred tax liabilities relating to the investment in subsidiaries

The Group did not recognize the relevant deferred income tax liabilities for the income tax payable that may arise when the undistributed surplus of a foreign subsidiary is remitted back. The Group has decided not to distribute the undistributed earnings of its subsidiaries in the foreseeable future. As of 31 December 2025 and 2024, the amount not recognized as deferred income tax liabilities were NT$1,181,468 thousand and NT$1,052,847 thousand, respectively.

G. The assessment of income tax returns

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

The Company	The assessment of income tax returns
Liton Technology Co. Ltd.	Assessed and approved up to 2022
	Assessed and approved up to 2023

As of 31 December 2025, the Company's foreign subsidiaries have completed filing in accordance with the tax jurisdiction regulations of their respective foreign jurisdictions up to 2024.

(20) Earnings per share

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	For the years ended 31 December
	2025	2024
A.Basic earnings per share
Profit attributable to ordinary equity holders of the Company	$1,437,717	$1,155,486
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousand shares)	164,735	164,735
Basic earnings per share (NT$)	$8.73	$7.01
B.Diluted earnings per share
Profit attributable to ordinary equity holders of the Company	$1,437,717	$1,155,486
Weighted average number of ordinary shares outstanding for basic earnings per share (in thousand shares)	164,735	164,735
Effect of dilution:
Employee bonus – stock (in thousand shares)	605	899
Weighted average number of ordinary shares outstanding after dilution (in thousand shares)	165,340	165,634
Diluted earnings per share (NT$)	$8.70	$6.98

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

(21) Business Combinations

Acquisition of Lihan Technology (Huizhou) Co., Ltd.

The Group acquired 60% of the voting shares of Lihan Technology (Huizhou) Co., Ltd. on July 1, 2025. The company was incorporated in the People's Republic of China and is a non-public company principally engaged in the manufacture of chemical raw materials and the trading of chemical products.

The Group has elected to measure the non-controlling interests in Lihan Technology (Huizhou) Co., Ltd. at fair value.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The fair values of the identifiable assets and liabilities of Lihan Technology (Huizhou) Co., Ltd. at the acquisition date are as follows:

	Fair value at acquisition date
Assets
Cash and cash equivalents	$32,598
Identifiable net assets	$32,598
Lihan Technology (Huizhou) Co., Ltd. is calculated as follows:
Consideration transferred	$24,438
Add: Non-controlling interests(proportionate share of the recognized identifiable net assets)	13,039
Less: Fair value of identifiable net assets	(32,598)
Goodwill	$4,879
Cash flow analysis of the acquisition:
Cash consideration paid	$(24,438)
Net cash acquired from the subsidiary	32,598
Net cash inflow from the acquisition	$8,160

(22) Subsidiaries that have material non-controlling interests

Subsidiaries that have material non-controlling interests in the Group are as follows:

Name	Country of Incorporation and operation	Percentage of ownership interests and voting rights of non-controlling interests
		31 Dec. 2025	31 Dec. 2024
Liton Technology Co. Ltd.	Taiwan	70.87%	70.70%

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The summarized financial information of Liton Technology Corp. is provided below:

	As of 31 December
	2025	2024
Current assets	$925,556	$1,304,637
Non-current assets	3,973,342	3,510,360
Current liabilities	(773,778)	(799,881)
Non-current liabilities	(82,285)	(181,412)
Equity	$4,042,835	$3,833,704
Ending balance of non-controlling interest	$2,865,157	$2,710,429
	For the years ended 31 December
---	---	---
	2025	2024
Operating revenue	$1,166,439	$1,118,127
Profit or loss for the period from continuing operations	$400,535	$469,249
Other comprehensive income	36,144	100,883
Total comprehensive income	$436,679	$570,132
Net income attributable to non-controlling interest	$283,535	$328,249
Total comprehensive income attributable to non-controlling interest	$309,121	$398,819

(23) Bonds Payable

A subsidiary of the Company, Lidun Technology Co., Ltd., issued the fourth domestic unsecured convertible bonds on July 15, 2021. The bonds matured on July 15, 2024. For information related to the transaction, please refer to Note 6(9) to the consolidated financial statements for the year ended 2024.

Related party transactions

Information of the related parties that had transactions with the Group during the financial reporting period is as follows:

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(1) Name and nature of relationship of the related parties

Name of the related parties	Nature of relationship of the related parties
Lifu Machinery Industrial Co., Ltd.	The chairman of the company is the same individual as the chairman of the Group
Dongyang, Ruyuan Yao Autonomous County Actinic Foil Co., Ltd.	Substantive related party
Ruyuan East Sunshine Youai Xijie Fine Foil Co., Ltd.	Substantive related party
Inner Mongolia Wulanchabu Dongyangguang Formation Foil Co., Ltd.	Substantive related party
Youai Xi Jiedong Sunshine (Shaoguan) Aluminium Sales Co., Ltd.	Substantive related party
Shaoguan Dongyangguang Capacitor Co., Ltd.	Substantive related party
Zhejiang Province Dong Yangguang Capacitor Co., Ltd.	Substantive related party
Guangdong HEC Technology Holding Co., Ltd.	Substantive related party
Shaoguan Shancheng Shuidu Construction Engineering Co., Ltd.	Substantive related party
Jimmy Wu and 18 other people	Directors and Deputy General Manager of the Company

(2) Significant transactions with the related parties

A. Sales

	For the years ended 31 December
	2025	2024
Dongyang, Ruyuan Yao Autonomous County Actinic Foil Co., Ltd.	$565,558	$671,140
Substantive related party	14,623	14,147
Total	$580,181	$685,287

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

The sales price to the above related parties was determined through mutual agreement based on the market rates. The collection period to related parties was next month-end 90-135 days. The outstanding balance at 31 December 2025 and 2024 was unsecured, non-interest bearing and must be settled in cash. The receivables from the related parties were not guaranteed.

B. Purchases

	For the years ended 31 December
	2025	2024
Youai Xi Jiedong Sunshine (Shaoguan)
Aluminium Sales Co., Ltd.	$966,338	$1,141,722
Inner Mongolia Wulanchabu Dongyangguang
Formation Foil Co., Ltd.	278,653	265,086
Dongyang, Ruyuan Yao Autonomous County
Actinic Foil Co., Ltd.	146,740	134,144
Other substantive related parties	60,954	23,971
Total	$1,452,685	$1,564,923

The purchase price to the above related parties was determined through mutual agreement based on the market rates. The payment terms from the related party suppliers are comparable with third party suppliers and are between 30 to 120 days.

C. Prepayments

	As of 31 December
	2025	2024
Lifu Machinery Industrial Co., Ltd.	$9,072	$12,096

D. Accounts receivable

	As of 31 December
	2025	2024
Inner Mongolia Wulanchabu	$56,299	$-
Dongyang, Ruyuan Yao Autonomous County
Actinic Foil Co., Ltd.	6,783	94,551
Substantive related party	-	3,795
Total	$63,082	$98,346

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

E. Accounts payable

	As of 31 December
	2025	2024
Youai Xi Jiedong Sunshine (Shaoguan)
Aluminium Sales Co., Ltd.	$65,483	$65,981
Inner Mongolia Wulanchabu Dongyangguang
Formation Foil Co., Ltd.	46,572	53,385
Dongyang, Ruyuan Yao Autonomous County
Actinic Foil Co., Ltd.	32,306	5,528
Lifu Machinery Industrial Co., Ltd.	5,638	560
Substantive related party	29,072	4,682
Total	$179,071	$130,136

F. Prepayments for equipment

	As of 31 December
	2025	2024
Shaoguan Shancheng Shuidu Construction Engineering Co., Ltd.	$36,419	$-

G. Right-of-use assets

	As of 31 December
	2025	2024
Dongyang, Ruyuan Yao Autonomous County
Actinic Foil Co., Ltd.	$54,682	$48,313

H. Lease liabilities

	As of 31 December
	2025	2024
Dongyang, Ruyuan Yao Autonomous County
Actinic Foil Co., Ltd.	$50,830	$54,235

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

I. Interest expense

	For the years ended 31 December
	2025	2024
Dongyang, Ruyuan Yao Autonomous County Actinic Foil Co., Ltd.	$3,493	$3,831

The determination and collection of rental expense is determined with reference to the general market conditions.

J. Electricity purchase

	For the years ended 31 December
	2025	2024
Dongyang, Ruyuan Yao Autonomous County Actinic Foil Co., Ltd.	$263,713	$311,763

K. Property transactions

(a) Purchase of land use rights from related parties:

	For the years ended 31 December
	2025	2024
Dongyang, Ruyuan Yao Autonomous County Actinic Foil Co., Ltd.	$10,804	$-

(b) Purchase of machinery and equipment from related parties:

	For the years ended 31 December
	2025	2024
Ruyuan Dongyangguang Machinery Co., Ltd.	$-	$113,557

L. Sale of machinery and equipment to related parties

For the year 2025: None
For the year 2024:

	Carrying amount	Proceeds from disposal	Gain (loss) on disposal
Ruyuan Dongyangguang Machinery Co., Ltd.	$41,806	$37,625	$(4,181)

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

M. Key management personnel compensation

The Company:

	For the years ended 31 December
	2025	2024
Short-term employee benefit	$51,169	$47,076
Post-employment benefit	91	87
Total	$51,260	$46,163

The subsidiary- Liton Technology Corp.:

	For the years ended 31 December
	2025	2024
Short-term employee benefit	$18,620	$20,880
Share-based payments	2,660	-
Post-employment benefits	189	5,990
Total	$21,469	$26,870

The key management personnel of the group are including directors and deputy general managers.

For more details on the total compensation paid above, please refer to the content of the annual report of the shareholders meeting.

Assets pledged as security

The following table lists assets of the Group pledged as security:

Items	Carrying amount		Secured liabilities
	114.12.31	113.12.31
Property, Plant and Equipment-
Machinery and equipment	$470,521	$1,054,098	Short -term loans

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Significant contingencies and unrecognized contractual commitments

(1) Amounts available under unused letters of credit as of 31 December 2025 are US$510 thousand and JPY$448,056 thousand.

(2) As of 31 December 2025, the Group has entered into the following significant contracts that have not yet been completed or accepted.

Contracting parties	Subject matter	Total contract amount	Contract amount not paid as of 31 December 2025
Company A	Building	$463,549	$67,761
Company B	Machinery and equipment	187,117	150,698
Company C	Building	162,643	113,850
Company D	Building	88,128	41,236
Company E	Other equipment	42,731	25,639
Company F	Other equipment	30,963	21,674

Losses due to major disasters

None.

Significant subsequent events

None.

Other

(1) Categories of financial instruments

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

Financial assets

	As of 31 December
	2025	2024
Financial assets at fair value through profit or loss:
Mandatorily measured at fair value through profit or loss	$671,487	$794,195
Financial assets at fair value through other comprehensive income	26,987	27,631
Financial assets measured at amortized cost:
Cash and cash equivalents (excluded cash on hand)	4,339,332	4,046,590
Notes and accounts receivable	3,742,045	3,550,749
Other receivables (excluded sales tax refund receivables)	15,951	7,572

Financial liabilities

	As of 31 December
	2025	2024
Financial assets measured at amortized cost:
Short-term loans	$1,616,794	$2,164,957
Notes and accounts receivable	679,723	667,014
Long-term loans	411,000	224,000
Lease liabilities	51,298	55,684

(2) Financial risk management objectives and policies

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(3) Market risk

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

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

Foreign currency risk

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

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

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group’s profit is performed on significant monetary items denominated in foreign currencies as at the end of the reporting period. The Group’s foreign currency risk is mainly related to the volatility in the exchange rates for USD, RMB, JPY and EUR. The information of the sensitivity analysis information is as follows:

When NTD strengthens/weakens against USD by 1%, the profit for the years ended 31 December 2025 and 2024 is decreased/increased by $34,088 thousand and $32,628 thousand, respectively; and no impact on the equity.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

When NTD strengthens/weakens against RMB by 1%, the profit for the years ended 31 December 2025 and 2024 is decreased/increased by $656 thousand and $867 thousand, respectively; and no impact on the equity.

When NTD strengthens/weakens against JPY by 1%, the profit for the years ended 31 December 2025 and 2024 is decreased/increased by $(570) thousand and $(1,957) thousand, respectively; and no impact on the equity.

When NTD strengthens/weakens against EUR by 1%, the profit for the years ended 31 December 2025 and 2024 is decreased/increased by $736 thousand and $668 thousand, respectively; and no impact on the equity.

Interest rate risk

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

The interest rate sensitivity analysis is performed on borrowings with variable interest rates. At the reporting date, a change of 10 basis points of interest rate in a reporting period could cause the profit for years ended 31 December 2025 and 2024 to decrease/increase by NT$2,028 thousand and NT$2,389 thousand, respectively.

Equity price risk

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

At the reporting date, a change of 10% in the price of the listed equity securities measured at fair value through profit or loss could increase/decrease the Group’s profit for the years ended 31 December 2025 and 2024 by NT$14,470 thousand and NT$7,114 thousand, respectively.

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

(4) Credit risk management

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

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

As of 31 December 2025 and 2024, contract assets and accounts receivable from top ten customers represent 17.00% and 15.23% of the total contract assets and accounts receivable of the Group, respectively. The credit concentration risk of other contract assets and accounts receivable is insignificant.

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(5) Liquidity risk management

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

Non-derivative financial instruments

	Less than 1 year	2 to 3 years	4 to 5 years	> 5 years	Total
As of 31 Dec. 2025
Short-term loans	$1,622,147	$-	$-	$-	$1,622,147
Notes and accounts payable	679,723	-	-	-	679,723
Long-term loans	120,881	102,766	117,746	85,528	426,921
Lease liabilities	7,768	14,592	14,592	33,714	70,666
As of 31 Dec. 2024
Short-term loans	$2,166,811	$-	$-	$-	$2,166,811
Notes and accounts payable	667,014	-	-	-	667,014
Convertible bonds	67,645	161,211	-	-	228,856
Lease liabilities	8,268	14,992	14,520	40,810	78,590

Derivative financial liabilities

None.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the year ended 31 December 2025:

	Long-term loans (including current portion with maturity)
	Short-term loans	less than 1 year)	Lease liabilities	Refundable deposits	Total liabilities from financing activities
As of 1 Jan. 2025	$2,164,957	$224,000	$55,684	$574	$2,445,215
Cash flows	(549,483)	187,000	(4,520)	20,922	(346,081)
Foreign exchange movement	1,320	-	134	4	1,458
As of 31 Dec. 2025	$1,616,794	$411,000	$51,298	$21,500	$2,100,592

Reconciliation of liabilities for the year ended 31 December 2024:

	Short-term loans	Long-term loans (including current portion with maturity less than 1 year)	Bonds payable (including current portion with maturity less than 1 year)	Lease liabilities	Refundable deposits	Total liabilities from financing activities
As of 1 Jan. 2025	$2,133,253	$-	$496,127	$58,497	$39,469	$2,727,346
Cash flows	22,233	224,000	(189,000)	(4,703)	(38,895)	13,635
Non-cash changes	-	-	(307,127)	-	-	(307,127)
Foreign exchange movement	9,471	-	-	1,890	-	11,361
As of 31 Dec. 2025	$2,164,957	$224,000	$-	$55,684	$574	$2,445,215

(7) Fair values of financial instruments

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

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

(e) The fair value of derivatives which are not options and without market quotations, is determined based on the counterparty prices or discounted cash flow analysis using interest rate yield curve for the contract period. Fair value of option-based derivative financial instruments is obtained using on the counterparty prices or appropriate option pricing model (for example, Black-Scholes model) or other valuation method (for example, Monte Carlo Simulation).

B. Fair value of financial instruments measured at amortized cost

The carrying amount of the Group’s financial assets and liabilities measured at amortized cost approximate their fair value.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(8) for fair value measurement hierarchy for financial instruments of the Group.

(8) Fair value measurement hierarchy

A. Fair value measurement hierarchy

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

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

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

Level 3 – Unobservable inputs for the asset or liability

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

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of 31 December 2025

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through profit or loss
Financial product	$-	$526,788	$-	$526,788
Stocks	144,699	-	-	144,699
Financial assets at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	-	-	26,987	26,987

As of 31 December 2024

	Level 1	Level 2	Level 3	Total
Financial assets:
Financial assets at fair value through profit or loss
Financial product	$-	$723,059	$-	$723,059
Stocks	71,136	-	-	71,136
Financial assets at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	-	-	27,631	27,631

Transfers between Level 1 and Level 2 during the period

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

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	Assets
	Financial assets at fair value through other comprehensive income
	Stocks
Beginning balances as of 1 January 2025	$27,631
Total gains and losses recognized for the year ended 31 December 2025:
Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income)	(436)
Foreign exchange movement	(208)
Ending balances as of 31 December 2025	$26,987
	Assets
	Financial assets at fair value through other comprehensive income
	Stocks
Beginning balances as of 1 January 2024	$27,192
Total gains and losses recognized for the year ended 31 December 2024:
Amount recognized in OCI (presented in “Unrealized gains (losses) from equity instruments investments measured at fair value through other comprehensive income)	(489)
Foreign exchange movement	928
Ending balances as of 31 December 2024	$27,631

Information on significant unobservable inputs to valuation

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

As of December 31, 2025

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets:
Financial asset measured at fair value through other comprehensive income	Asset approach	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by NT$2,699 thousand

As of 31 December 2024:

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets:
Financial asset measured at fair value through other comprehensive income	Asset approach	Discount for lack of marketability	30%	The higher the discount for lack of marketability, the lower the fair value of the stocks	10% increase (decrease) in the discount for lack of marketability would result in increase (decrease) in the Group’s equity by NT$2,763 thousand

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

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

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

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

As of 31 December 2025

	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value but for which the fair value is disclosed:
Investment property	$-	$-	$150,119	$150,119

31 December 2024

	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value but for which the fair value is disclosed:
Investment property	$-	$-	$148,775	$148,775

(9)Significant assets and liabilities denominated in foreign currencies

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

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

	As of 31 December
	2025			2024
	Foreign currencies	Foreign exchange rate	NTD	Foreign currencies	Foreign exchange rate	NTD
Financial assets
Monetary items:
USD	$122,348	31.4250	$3,844,786	$99,506	32.7900	$3,262,802
RMB	14,577	4.4980	65,567	19,381	4.4760	86,749
JPY	387,095	0.2008	77,729	199,425	0.2099	41,859
EUR	1,995	36.8900	73,596	1,956	34.1300	66,758
Financial liabilities
Monetary items:
RMB	13,873	31.4250	$435,959	$-	-	$-
JPY	671,027	0.2008	134,742	1,131,948	0.2099	237,596

The Group has a number of different functional currencies; therefore, we are unable to disclose the exchange loss and gain of monetary financial assets and financial liabilities under each foreign currency that has significant impact. The Group recognized NT$(146,383) thousand and NT$180,535 thousand foreign exchange (losses) gains for the years ended 31 December 2025 and 2024, respectively.

(10) Capital management

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

Other disclosure

(1) Information on significant transactions

A. Financing provided to others for the year ended 31 December 2025: Please refer to Attachment 1.

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

B. Endorsement/Guarantee provided to others for the year ended 31 December 2025: None.

C. Material securities held as of 31 December 2025: Please refer to Attachment 2.

D. Related party transactions for purchases and sales amounts exceeding the lower of NT$100 million or 20 percent of the capital stock for the year ended 31 December 2025: Please refer to Attachment 3.

E. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024: Please refer to Attachment 4.

F. Receivables from related parties with amounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2025: Please refer to Attachment 5.

(2) Information on investees: Please refer to Attachment 6.

(3) Information on investment in Mainland China

A. Investment in Mainland China: Please refer to Attachment 7.

Directly or indirectly significant transactions through third regions with the investees in Mainland China, including price, payment terms, and other related information: The Company had no significant asset transactions or other transactions that had a material impact on the current period’s profit or financial position. Please refer to Note 13(1).

Segment information

For management purposes, the Group organized into business units based on operating strategies and has two reportable segments as follows:

(1) Lelon segment manufactures and sales of aluminum electrolytic capacitor.

(2) Liton segment manufactures and sales of aluminum formed foils.

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

Management monitors the operating results of its business units separately for the purpose of

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss and is measured based on material accounting policies consistent with those in the consolidated financial statements. However, income taxes are managed on a group basis and are not allocated to operating segments.

Transfer prices between operating segment are on an arm’s length basis in a manner similar to transactions with third parties.

(1) Information on reportable segments profit or loss, assets and liabilities

For the year ended 31 December 2025:

	Lelon	Liton	subtotal	Reconciliation and Elimination	Total
Revenue
External customer	$7,541,861	$3,750,677	$11,292,538	$-	$11,292,538
Inter-segment	-	416,524	416,524	(416,524)	-
Total revenue	$7,541,861	$4,167,201	$11,709,062	$(416,524)	$11,292,538
Interest expense	$24,421	$19,446	$43,867	$-	$43,867
Depreciation and amortization	353,340	240,495	593,835	-	593,835
Income tax expense	646,572	147,541	794,113	-	794,113
Segment profit (loss)	$2,216,259	$683,938	$2,900,197	$(99,421)	$2,800,776
Assets
Capital expenditure on non-current assets	$746,473	$268,148	$1,014,621	$-	$1,014,621
Operating segment assets	$13,094,671	$6,394,602	$19,489,273	$(1,281,618)	$18,207,655
Operating segment liabilities	$3,221,413	$1,392,232	$4,613,645	$(203,540)	$4,410,105

For the year ended 31 December 2024:

	Lelon	Liton	subtotal	Reconciliation and Elimination	Total
Revenue
External customer	$6,630,107	$3,856,846	$10,486,953	$-	$10,486,953
Inter-segment	-	368,586	368,586	(368,586)	-
Total revenue	$6,630,107	$4,225,432	$10,855,539	$(368,586)	$10,486,953
Interest expense	$24,280	$28,255	$52,535	$-	$52,535
Depreciation and amortization	358,508	237,150	595,658	-	595,658
Income tax expense	394,630	133,964	528,594	-	528,594
Segment profit (loss)	$1,593,908	$733,784	$2,327,692	$(89,528)	$2,238,164
Assets
Capital expenditure on non-current assets	$381,379	$206,584	$-	$-	$587,963
Operating segment assets	$11,688,118	$6,368,074	$18,056,192	$(1,322,103)	$16,734,089
Operating segment liabilities	$2,901,611	$1,734,147	$4,635,758	$(184,374)	$4,451,384

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Expressed in Thousands of New Taiwan Dollars unless Otherwise Specified)

(2) Reportable segment revenue, profit and loss, assets, liabilities and other significant items:

For the years ended 31 December 2025 and 2024, the Group had no reconciling items relating to segment revenues, profit or loss, assets, liabilities, or other material items.

(3) Geographical information

Revenue from external customers:

	For the years ended 31 December
	2025	2024
China	$7,758,334	$7,215,229
Hongkong	792,130	820,255
Indonesia	341,577	366,236
USA	460,918	356,712
Japan	271,877	245,112
Taiwan	228,200	173,239
Other countries	1,439,502	1,310,170
Total	$11,292,538	$10,486,953

Incomes are classified based on the customer's country.

Non-current assets

	As of 31 December
	2025	2024
China	$5,504,374	$5,522,244
Taiwan	546,581	536,702
Thailand	717,195	309,232
Total	$6,768,150	$6,368,178

(4) Important customer information

The Company had no customers accounting for 10% or more of its sales revenue in the income statement for the years ended 31 December 2025 and 2024.

100

Table1: Financing provided to others for the year ended 31 December 2025

No.	Financing Company (Note1)	Counterparty	Financial Statement Account	Related Party	Maximum Balance for the Period	Ending Balance (the amount approved by the board of directors)	Amount Actually Drawn	Interest Rate	Nature for Financing (Note4)	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral		Financing Limits for Each Borrowing Company	Financing Company's Total Financing Amount
													Item	Value
0	Lelon Electronics Corp.	Lelon Electronics (THAILAND) Corp.	Other receivables	Yes	$471,375	$471,375	$251,400	2.0%	2	$ -	Operating and fund capital	$ -	None	$ -	$3,637,172 (Note3)	$3,637,172 (Note3)
1	Lelon Electronics (HUIZHOU) Corp.	LELON ELECTRONICS Corp.	Other receivables	Yes	$449,800	$449,800	$449,800	2.5%	2	$ -	Operating and fund capital	$ -	None	$ -	4,124,451 (Note5)	4,124,451 (Note5)
2	Lelon Electronics (HUIZHOU) Corp.	LELON ELECTRONICS Corp.	Other receivables	Yes	$449,800	$449,800	$449,800	2.0%	2	$ -	Operating and fund capital	$ -	None	$ -	4,124,451 (Note5)	4,124,451 (Note5)
3	Lelon Electronics (SUZHOU) Corp.	Lelon Electronics Technology (SUZHOU) Corp.	Other receivables	Yes	$449,800	$449,800	$179,920	1.1%	2	$ -	Operating and fund capital	$ -	None	$ -	2,150,358 (Note5)	2,150,358 (Note5)

Note1: The transaction that reversed between consolidated entities has been adjusted to be reversed.
Note2: The limit on short-term financing provided to any individual counterparty shall not exceed $40\%$ of Lelon Electronics Corp.'s net worth.
Note3: The total amount available for lending purposes shall not exceed $40\%$ of Lelon Electronics Corp.'s net worth as stated in its latest financial statement.
Note4: "1" is for business dealing, "2" is for the need of short-term financing
Note5: In the event that the financing is between foreign subsidiaries whose voting shares are $100\%$ owned, directly or indirectly, by Lelon Electronics Corp., the aggregate amount available for lending to such borrowers and total amount lendable to a company both shall not exceed the net worth of the lending company as stated in its latest financial statement.

Table2: Securities held as of 31 December 2025. (Excluding subsidiaries, associates and joint ventures)

Held Company Name	Marketable Securities Type and Name	Relationship with the Company (Note1)	Financial Statement Account	31-Dec-25
				Shares/Units	Carrying Value	Percentage of Ownership	Fair Value
LELON ELECTRONICS Corp.	Taiwan Semiconductor Manufacturing Co., Ltd.	-	Financial asset measured at fair value through profit or loss-current	10,000	$15,500	-	$15,500
LELON ELECTRONICS Corp.	Yageo Ltd.	-	Financial asset measured at fair value through profit or loss-current	80,000	18,480	-	18,480
LELON ELECTRONICS Corp.	Delta Electronics Co., Ltd.	-	Financial asset measured at fair value through profit or loss-current	12,000	11,556	-	11,556
LELON ELECTRONICS Corp.	Nvidia Corporation	-	Financial asset measured at fair value through profit or loss-current	8,500	49,817	-	49,817
LELON ELECTRONICS Corp.	InterScience (Suzhou) Technology Holding Co., Ltd.	-	Financial asset measured at fair value through profit or loss-current	60,000	18,985	-	18,985
LELON ELECTRONICS Corp.	BenQ Medical Group Co., Ltd.	-	Financial asset measured at fair value through profit or loss-current	750,000	12,441		12,441
Lelon Electronics (Suzhou) Co., Ltd.	Industrial Bank Corporate RMB Structured Deposit Products	-	Financial asset measured at fair value through profit or loss-current	-	179,920	-	179,920
Lelon Electronics (Suzhou) Co., Ltd.	CTBC RMB Yield Enhancement Products	-	Financial asset measured at fair value through profit or loss-current	-	89,960	-	89,960
Lelon Electronics (Suzhou) Co., Ltd.	CTBC RMB Yield Enhancement Products	-	Financial asset measured at fair value through profit or loss-current	-	67,470	-	67,470
Lelon Electronics (Huizhou) Co., Ltd.	China Guangfa Bank wa hua tian bao "W" 2025 No. 229 RMB Structured Deposit WHTBCB02551	-	Financial asset measured at fair value through profit or loss-current	-	76,691	-	76,691
Lelon Electronics (Huizhou) Co., Ltd.	China Guangfa Bank wa hua tian bao "W" 2025 No. 220 RMB Structured Deposit WHTBCB02551	-	Financial asset measured at fair value through profit or loss-current	-	67,470	-	67,470
Lelon Electronics (Huizhou) Co., Ltd.	China Guangfa Bank wa hua tian bao "W" 2025 No. 216 RMB Structured Deposit WHTBCB02551	-	Financial asset measured at fair value through profit or loss-current	-	44,980	-	44,980
Lelon Electronics (Huizhou) Co., Ltd.	Lijing Real Estate Development (Huizhou) Co., Ltd.	-	Financial assets measured at fair value through other comprehensive income- noncurrent	4,719,710	21,477	16.27%	21,477

Note1: If the issuer of the securities is not a related party, this column will omitted.

Table3: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024.

Company Name	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Notes/Accounts Payable or Receivable
			Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Lelon Electronics Corp.	Lelon International Industrial Limited	Sub-subsidiary of the ownership	Purchases	$2,484,434	87.71%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	$(329,104)	(93.77)%
Lelon International Industrial Limited	Lelon Electronics (HUIZHOU) Corp.	Sub-subsidiary of the ownership	Purchases	1,753,604	70.35%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(321,715)	(65.46)%
Lelon International Industrial Limited	Lelon Electronics (SUZHOU) Corp.	Sub-subsidiary of the ownership	Purchases	360,960	14.48%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	-	-%
Lelon International Industrial Limited	Lelon Electronics Technology (SUZHOU) Corp.	Sub-subsidiary of the ownership	Purchases	381,920	15.32%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(166,798)	(33.94)%
Lelon Electronics Technology (SUZHOU) Corp.	Lelon Electronics (SUZHOU) Corp.	Sub-subsidiary of the ownership	Sales	(446,859)	(14.48)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	95,621	8.47%
Lelon Electronics (HUIZHOU) Corp.	Lelon Electronics Technology (SUZHOU) Corp.	Sub-subsidiary of the ownership	Sales	(110,552)	(2.77)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	25,397	2.17%
Lelon Electronics (HUIZHOU) Corp.	Lelon Electronics Technology (SUZHOU) Corp.	Sub-subsidiary of the ownership	Purchases	138,317	7.73%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(49,728)	(10.79)%
Lelon Electronics (HUIZHOU) Corp.	Inner Mongolia Ulanqub Dongyangguang Chemical Foil Co., Ltd.	Substance related party of Lidong Electronic Technology Co., Ltd.	Purchases	189,291	10.57%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(7,118)	(6.95)%
Liton Technology Corp.	V-TECH CO., LTD.	Subsidiary of the Liton Technology Corp.	Purchases	881,321	65.03%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Offset Between Debit And Credit	-	-%
Liton Technology Corp.	V-TECH CO., LTD.	Subsidiary of the Liton Technology Corp.	Sales	(154,483)	(13.24)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Offset Between Debit And Credit	20,039	7.06%
Liton Technology Corp.	Liton Electronics Technology (Abazhou) Co., Ltd.	Sub-subsidiary of Liton Technology Corp.	Sales	(182,737)	(15.67)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Offset Between Debit And Credit	28,407	10.01%
V-TECH CO., LTD.	Liton Electronics Technology (Hui Zhou) Co., Ltd.	Associate of V-TECH CO., LTD.	Purchases	384,590	37.13%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Offset Between Debit And Credit	-	-%
V-TECH CO., LTD.	Liton Electronics Technology (Hui Zhou) Co., Ltd.	Associate of V-TECH CO., LTD.	Sales	(131,530)	(12.70)%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Offset Between Debit And Credit	65,595	100.00%
V-TECH CO., LTD.	Liton Electronics Technology (Abazhou) Co., Ltd.	Sub-subsidiary of V-TECH CO., LTD.	Purchases	405,525	39.15%	Mutual offset of creditor's rights and debts	Trading condition is the same as other supplier	Offset Between Debit And Credit	(46,226)	(30.58)%
Liton Electronics Technology (Abazhou) Co., Ltd.	Rayuan Lidong Electronic Technology Co., Ltd.	Associate of Liton Electronics Technology (Abazhou) Co., Ltd.	Purchases	610,125	58.94%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(61,605)	(54.56)%
Liton Electronics Technology (Abazhou) Co., Ltd.	Lelon Electronics (HUIZHOU) Corp.	Associate of Liton Electronics Technology (Abazhou) Co., Ltd.	Sales	(114,941)	(7.21)%	Net 135 days from the end of the month following the invoice date	Trading condition is the same as other supplier	Trading condition is the same as other supplier	62,926	11.19%

Table3: Related party transactions for purchases and sales exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024.

Company Name	Related Party	Nature of Relationships	Transaction Details				Abnormal Transaction		Notes/Accounts Payable or Receivable
			Purchases/ Sales	Amount	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
Liton Electronics Technology (Ahazhou) Co., Ltd.	Lelon Electronics Technology (SUZHOU) Corp.	Associate of Liton Electronics Technology (Ahazhou) Co., Ltd.	Sales	(165,576)	(10.39)%	Net 135 days from the end of the month following the invoice date	Trading condition is the same as other supplier	Trading condition is the same as other supplier	68,749	12.23%
Liton Electronics Technology (Hui Zhou) Co., Ltd.	Ruyuan Liding Electronic Technology Co., Ltd.	Associate of Liton Electronics Technology (Huizhou) Co., Ltd.	Purchases	309,749	66.65%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(47,198)	(39.61)%
Lidon Electronics Technology Co., Ltd. Ruyuan County	Youai Xi Jiedong Sunshine (Shaoguan) Aluminum Sales Co., Ltd	Substance related party of Liding Electronic Technology Co., Ltd.	Purchases	966,338	72.09%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	(65,483)	(63.20)%
Lidon Electronics Technology Co., Ltd. Ruyuan County	Ruyuan Yao Autonomous County Dongyangguang Chemical Foil Co., Ltd.	Substance related party of Liding Electronic Technology Co., Ltd.	Sales	(565,558)	(22.55)%	Net 30 days from the end of the month of when invoice is issued	Trading condition is the same as other supplier	Trading condition is the same as other supplier	56,299	11.78%

Note1: The Company complies with the provisions of Letter No. 00747 of the Securities and Futures Commission dated March 18, 87 (1998) Taiwan Financial Securities (6). When outsourced processing, If the parties have agreed to be shipped back for processing or sold on behalf of the party, title and risk of processed products have not passed, when the material is removed, it will be treated according to the accounting of outsourcing processing, it will not be disposed of for sale. Note2: The transaction that reversed between consolidated entities has been adjusted to be reversed.

Table4: Receivables from related parties with accounts exceeding the lower of NT$100 million or 20 percent of the capital stock as of 31 December 2024.

Company Name	Related Party	Nature of Relationships	Ending Balance	Turnover Ratio	Overdue		Amounts Received in Subsequent Period	Allowance For Bad Debts
					Amount	Action Taken
Lelon International Industrial Limited	Lelon Electronics Corp.	Sub-subsidiary of the ownership	Accounts Receivable $329,104	-	$ -	-	Write-off of debts	$ -
Lelon Electronics (HUIZHOU) Corp.	Lelon International Industrial Limited	Sub-subsidiary of the ownership	Accounts Receivable 321,715	-	-	-	Write-off of debts	-
Lelon Electronics (SUZHOU) Technology Corp.	Lelon International Industrial Limited	Sub-subsidiary of the ownership	Accounts Receivable 166,798	-	-	-	Write-off of debts	-

Note: The transaction that reversed between consolidated entities has been adjusted to be reversed.

Table5: The business relationship, significant transactions and amounts between parent company and subsidiaries

No. (Note1)	Company Name	Counterpart	Nature of Relationship (Note2)	Intercompany Transactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note3)
0	Lelon Electronics Corp.	Lelon International Industrial Limited	1	Purchases	$2,484,434	Mutual offset of creditor's rights and debts	22.00%
0	Lelon Electronics Corp.	Lelon International Industrial Limited	1	Accounts Payable	329,104	Mutual offset of creditor's rights and debts	1.81%
1	Lelon Electronics (HUIZHOU) Corp.	Lelon International Industrial Limited	3	Sales	1,753,604	Mutual offset of creditor's rights and debts	15.53%
1	Lelon Electronics (HUIZHOU) Corp.	Lelon International Industrial Limited	3	Accounts Receivable	321,715	Mutual offset of creditor's rights and debts	1.77%
1	Lelon Electronics (HUIZHOU) Corp.	Lelon Electronics Technology (SUZHOU) Corp.	3	Sales	110,552	Mutual offset of creditor's rights and debts	0.98%
1	Lelon Electronics (HUIZHOU) Corp.	Lelon Electronics Technology (SUZHOU) Corp.	3	Purchases	138,317	Mutual offset of creditor's rights and debts	1.22%
2	Lelon Electronics (SUZHOU) Corp.	Lelon International Industrial Limited	3	Sales	360,960	Mutual offset of creditor's rights and debts	3.20%
3	Lelon Electronics Technology (SUZHOU) Corp.	Lelon International Industrial Limited	3	Sales	381,920	Mutual offset of creditor's rights and debts	3.38%
3	Lelon Electronics Technology (SUZHOU) Corp.	Lelon International Industrial Limited	3	Accounts Receivable	166,798	Mutual offset of creditor's rights and debts	0.92%
3	Lelon Electronics Technology (SUZHOU) Corp.	Lelon Electronics (SUZHOU) Corp.	3	Sales	446,859	Mutual offset of creditor's rights and debts	3.96%
4	Liton Technology Corp.(Note4)	V-TECH CO., LTD.	3	Purchases	881,321	Mutual offset of creditor's rights and debts	7.80%
4	Liton Technology Corp.(Note4)	V-TECH CO., LTD.	3	Sales	154,483	Mutual offset of creditor's rights and debts	1.37%
4	Liton Technology Corp.(Note4)	Liton Electronics Technology (Abazhou) Co., Ltd.	3	Sales	182,737	Mutual offset of creditor's rights and debts	1.62%

Table5: The business relationship, significant transactions and amounts between parent company and subsidiaries

No. (Note1)	Company Name	Counterpart	Nature of Relationship (Note2)	Intercompany Transactions
				Financial Statements Item	Amount	Terms	Percentage of Consolidated Net Revenue or Total Assets (Note3)
5	V-TECH CO., LTD.	Liton Electronics Technology (Hui Zhou) Co., Ltd.	3	Purchases	384,590	Mutual offset of creditor's rights and debts	3.41%
5	V-TECH CO., LTD.	Liton Electronics Technology (Hui Zhou) Co., Ltd.	3	Sales	131,530	Mutual offset of creditor's rights and debts	1.16%
5	V-TECH CO., LTD.	Liton Electronics Technology (Abazhou) Co., Ltd.	3	Purchases	405,525	Mutual offset of creditor's rights and debts	3.59%
6	Liton Electronics Technology (Abazhou) Co., Ltd.	Lidon Electronics Technology Co., Ltd. Ruyuan County	3	Purchases	610,125	Net 135 days from the end of the month following the invoice date	5.40%
6	Liton Electronics Technology (Abazhou) Co., Ltd.	Lelon Electronics (HUIZHOU) Co., Ltd.	3	Sales	114,941	Net 135 days from the end of the month following the invoice date	1.02%
6	Liton Electronics Technology (Abazhou) Co., Ltd.	Lelon Electronics Technology (SUZHOU) Co., Ltd.	3	Sales	165,576	Net 30 days from the end of the month of when invoice is issued	1.47%
7	Liton Electronics Technology (Hui Zhou) Co., Ltd.	Lidon Electronics Technology Co., Ltd. Ruyuan County	3	Purchases	309,749	Net 30 days from the end of the month of when invoice is issued	2.74%

Note1: "0" for Lelon Electronics Corp, Others for subsidiaries
Note2: Transactions are categorized as follows:
1. From a parent company to its subsidiary.
2. Subsidiary to parent company.
3. Between subsidiaries.
Note3: Percentage of consolidated total assets is calculated by dividing the amount of a particular asset or liability account by the consolidated total of assets as of 31 December 2024.
Percentage of consolidated total revenues is calculated by dividing the amount of a particular revenue or cost or expense account by the consolidated total operating revenues for the years ended 31 December 2024.
Note4: provisions of Letter No. 00747 of the Securities and Futures Commission dated March 18, 87 (87) Taiwan Financial Securities (6) No. 00747, when Liton Technology Corp. outsourcing, If the two parties have agreed to ship it back after processing or sell it, the ownership and risk of the processed product will not be transferred. then when removing materials, the accounting treatment of subcontracting shall be followed, and sales shall not be handled.
Note5: All internal transactions above have been eliminated from the consolidated financial statements.

Tableb: Names, locations, main businesses and products, original investment amount, investment as of 31 December 2024 net income (loss) of investee company and investment income (loss) recognized for the year ended 31 December 2023: (Excluding investment in Mainland China)

Investor Company	Investor Company (Note1)	Location	Main Activities	Original Investment Amount		31-Dec-24			Net Income (Loss) of Investor (Note1)	Investor's Share of Profit (Loss) of Investor(Note1)	Note (Note1)
				31-Dec-25	31-Dec-24	Shares	Percentage of Ownership	Carrying Amount
LELON ELECTRONICS Corp.	Lion Technology Corp.	No. 9, Zhonglong 2nd Rd., Tonglao Township, Miaoli County 36643, Taiwan	Etched aluminum foils processing and trading, manufacture and trading of formed aluminum foils	$468,471	$468,471	43,731,598	29.13%	$1,192,366 (Note3)	$400,535	$117,000	Subsidiary
LELON ELECTRONICS Corp.	LIBO ELECTRONICS CO., LTD.	P.O. BOX 3340, Dawson Bluff, ROAD TOWN, TORTOLA, BRITISH VIRGIN ISLANDS	Equity investment	818,824	818,824	26,005,137	89.47%	7,852,811 (Note3)	1,550,047	1,340,030	Subsidiary
LELON ELECTRONICS Corp.	SURGE-LELON LLC	1016 Grand Boulevard Deer Park, NY 11729	Trade business	2,121 (USD 67,500)	2,121 (USD 67,500)	-	45.00%	- (Note2)	-	-	Valuate investee using the equity method
LELON ELECTRONICS Corp.	Lelon Electronics (Thailand) Co., Ltd.	52 Mav, 5, Nong Kahlua Subdistrict, Phan Thong District, Chenburi Province 20160	Manufacture and sales of capacitors	500,016 (THB502,125 Thousand)	390,313 (THB391,959 Thousand)	-	100.00%	497,615	(330)	(330)	Subsidiary
LIBO ELECTRONICS CO., LTD.	Lelon International Industrial Limited	140-142 Siren Road, Tsim Shu Tsui, Kowloon, Hong Kong	Equity investment and trade	12,163 (USD 387,059)	12,163 (USD 387,059)	-	100.00%	29,644 (Note3)	627	Merge with subsidiary	Sub-subsidiary
Lion Technology Corp.	LITON(RVI) CO., LTD.	P.O. BOX 3340, Road Town, Tortola, British Virgin Islands	Equity investment	132,268 (USD4,209 Thousand)	132,268 (USD4,209 Thousand)	4,208,862	100.00%	1,022,408 (Note3)	132,250	Merge with subsidiary
Lion Technology Corp.	V-TECH CO., LTD.	Vista Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apta, Sarnen	Sales and equity investment of aluminum foil materials. Aluminum electrolytic capacitor and related materials for the above products	1,371,607 (USD43,647 Thousand)	1,371,607 (USD43,647 Thousand)	43,647,362	100.00%	1,784,697 (Note3)	161,501	Merge with subsidiary
Lion Technology Corp.	EVERTECH CAPA CO., LTD.	Jipfu Building, 3rd Floor, Road Town, Tortola, British Virgin Islands.	Goods sale	314 (USD 10 Thousand)	314 (USD 10 Thousand)	10,000	100.00%	(Note3)	-	Merge with subsidiary
V-TECH CO., LTD.	FOREVER CO., LTD.	Vista Corporate Services Centre, Ground Floor NPF Building, Beach Road, Apta, Sarnen	Equity investment	1,205,243 (USD38,353 Thousand)	1,205,243 (USD38,353 Thousand)	38,353,012	100.00%	1,872,779 (Note3)	166,181	Merge with V-TECH CO., LTD.

Note1: (1) The column "Investor Company", "Location", "Main Activities", "Original Investment Amount", and "shares", should follow order the situation that ownership transfer investment and each direct or indirect investee reinvest, and indicate in Note that the relationship between each investees.
(2) The column "Investor Company" should fill each investee company's income in this period.
(3) The column "Investor's Share of Profit (Loss) of Investor", only need to fill the company recognizes the subsidiaries of the direct transfer investment and the income of each investees using the equity method.
When filling the "The current profit and loss amount of each subsidiary recognized as direct transfer investment", should check the income of this period of each subsidiary have including it that should be recognized according to regulations for reinvestment.
Note2: The recognition of the investment loss of the investee company based on the shareholding ratio has exceeded the actual investment amount, and the recognition of investment losses is limited to reducing the book balance of the company's investment and advances to zero in accordance with regulations.
Note3: All inter-company transactions among LELON ELECTRONICS Corp. and its subsidiaries have been eliminated in the consolidated financial statements

Table7: Investment in Mainland China

Investor Company	Main Activities	Total Amount of Paid-in Capita	Method of Investment	Accumulated Outflow of Accumulated Outflow of Investment from Taiwan as of 1 January 2025	Investment Flows		Accumulated Outflow of Investment from Taiwan as of 31 December 2025	Net Income (Losses) of the Investor Company	Percentage of Ownership	Share of Profits/Losses (Note1)	Carrying Amount as of Balance as of 31 December 2024 (Note1)	Accumulated Inward Remittance of Earnings as of 31 December 2024
					Outflow	Inflow
Lebra Electronics (HUIZHOU) Corp.	Manufacture and sales of capacitors	$380,657 (RMB 84,627,532)	Indirect investments in Mainland China through companies registered in a third region.	$241,564 (USD 7,687 Thousand)	$ -	$ -	$241,564 (USD 7,687 Thousand)	$755,208	89.47%	$675,685	$3,690,147	$ -
Lebra Electronics (SUZHOU) Corp.	Manufacture and sales of capacitors	355,472 (RMB 79,028,807)	Indirect investments in Mainland China through companies registered in a third region.	186,382 (USD 5,931 Thousand)	-	-	186,382 (USD 5,931 Thousand)	435,668	89.47%	389,792	1,923,925	32,197 (RMB7,158 Thousand)
Lebra Electronics technology (SUZHOU) Corp.	Manufacture and sales of capacitors	2,007,196 (RMB446,241,785)	Indirect investments in Mainland China and others through companies registered in a third region.	314,250 (USD 10,000 Thousand)	-	-	314,250 (USD 10,000 Thousand)	308,542	89.47%	276,053	2,279,642	-
DONGGUAN LEHONG TRAINING CO., LIMITED	Trading of Electronic Components	11,888 (RMB 2,643,003)	Indirect investments in Mainland China through companies registered in a third region.	12,161 (USD 387 Thousand)	-	-	12,161 (USD 387 Thousand)	622	89.47%	557	26,404	-
Inzhou Liding Automotive Technology Co., Ltd.	Research and develop, design, production and sales of automotive electronic components	44,986 (RMB 10,000,000)	Others	-	-	-	-	3,631	89.47%	3,249	30,959	-
Liton Electronics Technology (Hai Zhou) Co., Ltd.	Manufacture of aluminum foil materials, aluminum electrolytic capacitors and related materials for the above products	392,813 (USD12,500,000)	Indirect investments in Mainland China through companies registered in a third region.	274,340 (USD 8,730 Thousand)	-	-	274,340 (USD 8,730 Thousand)	129,561	100.00%	129,561	1,018,744	85,697 (USD1,230 Thousand) (RMB10,459 Thousand)
Liton Electronics Technology (Ahufou) Co., Ltd.	Manufacture of aluminum foil materials, aluminum Electrolytic capacitors and related materials for the above products	1,338,705 (USD42,600,000)	Indirect investments in Mainland China through companies registered in a third region.	1,181,580 (USD 37,600 Thousand)	-	-	1,181,580 (USD 37,600 Thousand)	166,181	100.00%	166,181	1,872,779	-
Lidon Electronics Technology Co., Ltd. Bayuan County	Manufacture and trade of etched aluminum foils and formed aluminum foils	719,680 (RMB160,000,000)	Direct investment in Mainland China and others	287,872 (USD 64,000 Thousand)	-	-	287,872 (RMB 64,000 Thousand)	339,772	60.00%	203,034	1,405,966	43,181 (RMB9,600 Thousand)
Lihan Technology (Hai Zhou) Co., Ltd.	Comprehensive Utilization of Waste Resources Industry	22490 (RMB5,000,000)	Others	-	-	-	-	(116)	60.00%	(70)	26,916	-
	Accumulated Investment in Mainland China as of 31 December 2024	Investment Amounts Authorized by Investment Commission, MOKA	Upper Limit on Investment (Net worth=60%)
---	---	---	---
LELON ELECTRONICS Corp.	$914,625 (USD29,105 Thousand)	$1,106,484 (USD34,825 Thousand) (HKD3,000 Thousand)	$5,455,759
LITON TECHNOLOGY Corp.	$1,743,792 (USD46,330 Thousand) (RMB64,000 Thousand)	$2,038,042 (USD56,330 Thousand) (RMB64,000 Thousand)	Net applicable (Note5)

Note1: The investment income of this period has checked by certified public accountant of Taiwan parent company
Note2: According to Letter No.11451028780 issued by Ministry of Economic Affairs, R.O.C., because of LITON TECHNOLOGY Corp. has already get the operation headquarters certification documents issued by Industrial Development Bureau. Therefore the amount to invest in Mainland China will not be limited 60 percent of net or consolidated net worth by Investment Commission.
Note3: The investment income of the investee company recognized in this period has included the investment gains and losses of these companies due to downstream and upstream transactions.
Note4: The investment information of Mainland China is excluding investment information of disposed Mainland subsidiaries.

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LELON — Audit Report / Information 2025

52108_rns_2026-06-05_ab0f0c2d-793e-409a-bbde-967a74cdf386.pdf

REPRESENTATION LETTER

Impairment of accounts receivable

Valuation for inventories

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

English Translation of Consolidated Financial Statements Originally Issued in Chinese

LELON ELECTRONICS CORP. AND SUBSIDIARIES

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A. Financial instruments: Recognition and Measurement

Financial assets measured at amortized cost

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial asset measured at fair value through other comprehensive income

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial asset measured at fair value through profit or loss

B. Impairment of financial assets

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Financial liabilities at amortized cost

Derecognition of financial liabilities

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(11) Property, plant and equipment

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Rendering of services

Interest income

Dividend income

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(17) Non-operating income and expenses

A. Other income

B. Other gains and losses

C. Finance costs

B. Purchases

C. Prepayments

D. Accounts receivable

Financial assets

Financial liabilities

(2) Financial risk management objectives and policies

LELON ELECTRONICS CORP. AND SUBSIDIARIES (Continued)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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LELON Audit Report / Information 2025