Stock Code: 3533

Lotes Co., Ltd. and Subsidiaries

Consolidated Financial Statements
With Independent Auditors’ Report
For the Years Ended December 31, 2025 and 2024

Address: No. 15, Wuxun St., Anle Dist., Keelung City 204
Telephone: (02) 2433 1110

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Table of Contents

Contents		Page
I.	Cover Page	1
II.	Table of Contents	2
III.	Representation Letter	3
IV.	Independent Auditors’ Report	4~7
V.	Consolidated Balance Sheets	8
VI.	Consolidated Statements of Comprehensive Income	9
VII.	Consolidated Statements of Changes in Equity	10
VIII.	Consolidated Statements of Cash Flows	11~12
IX.	Notes to the Consolidated Financial Statements
	(I) Company History	13
	(II) Approval Date and Procedures of the Consolidated Financial Statements	13
	(III) Application of New and Revised Standards and Interpretations	13~15
	(IV) Summary of Major Accounting Policies	15~35
	(V) Primary Sources of Major Accounting Judgment, Estimate and Assumption Uncertainties	36
	(VI) Descriptions for Important Accounting Items	36~77
	(VII) Related Party Transactions	78~79
	(VIII) Pledged Assets	79
	(IX) Significant Contingent Liabilities and Unrecognized Contractual Commitments	80
	(X) Significant Disaster Loss	80
	(XI) Significant Post-Period Events	80
	(XII) Others	80
	(XIII) Disclosing Information
	(1) Information on Significant Transactions	81~86
	(2) Information on Investees	87
	(3) Information on Investment in China	88~89
	(XIV) Segment Information	90~91

Representation Letter

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

Very truly yours,

Lotes Co., Ltd.
By

Chairman
CHU, TE-HSIANG

March 11, 2026

Independent Auditors' Report

The Board of Directors and Shareholders
Lotes Co., Ltd.

Opinion

We have audited the accompanying consolidated financial statements of Lotes Co., Ltd. and its subsidiaries (the "Group"), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements for the year ended December 31, 2025. 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. The key audit matters that, in our judgment, should be communicated in the audit report are as follows:

Revenue Recognition

For the accounting policies on revenue recognition, please refer to Note IV (16) to the consolidated financial statements; for the description of refund liabilities, please refer to Note VI (16); and for the disclosure of revenue, please refer to Note VI (24).

Description of Key Audit Matter:

Operating revenue is the most critical factor in determining the operating performance of the Group of significant concern to users of the financial statements. In addition, certain sales transactions involve sales discounts granted to customers in response to market conditions and business needs. Management estimates refund liabilities based on agreements with customers and records them as a deduction from operating revenue. Accordingly, testing of revenue recognition is one of the key areas of focus in our audit of the Group’s financial statements.

Audit Procedures Performed:

Our principal audit procedures included understanding and testing the design and operating effectiveness of internal controls related to sales transactions; performing cut-off testing by sampling sales transactions occurring near the balance sheet date and examining supporting external documentation to assess the appropriateness of the timing of revenue recognition; obtaining management’s methodology for estimating refund liabilities and evaluating whether such estimates are based on contractual terms with customers; and assessing the reasonableness of refund liability estimates by comparing them with subsequent actual results.

Inventory Valuation

For the accounting policies on inventory valuation, please refer to Note IV (8) to the consolidated financial statements; for the uncertainty in accounting estimates and assumptions related to inventory valuation, please refer to Note V; and for information on inventory write-downs, please refer to Note VI (4).

Description of Key Audit Matter:

Due to rapid changes in market demand and advancements in production technology, existing products may face risks of obsolescence or reduced market demand. Certain inventories may become slow-moving or subject to declines in market prices. Therefore, testing of inventory valuation is one of the key areas of focus in our audit of the Group’s financial statements.

Audit Procedures Performed:

Our principal audit procedures included understanding the basis and methodology used by management in assessing the net realizable value of inventories; reviewing and recalculating the data used by management in its assessment, including testing estimated selling prices against the most recent sales records; examining the accuracy of inventory aging reports; and analyzing changes in inventory aging over different periods to evaluate the appropriateness of inventory write-downs.

Other Matter

We have also audited the parent company only financial statements of Lotes Co., Ltd. as of and for the years ended December 31, 2025 and 2024 on which we have issued an unmodified opinion.

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 Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the 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 Group’s ability to continue as a going concern, 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 members of the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

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 maintain 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 Group’s internal control.
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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the 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 disclosures, 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.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2025 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.

The engagement partners on the audit resulting in this independent auditors' report are Lee, Feng-Hui and Hsiao, Ya-Wen.

KPMG
Taipei, Taiwan (Republic of China)
March 11, 2026

Notice to Readers

The accompanying consolidated financial statements are intended only to present the consolidated financial position, financial performance 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 applied in the Republic of China.

For the convenience of readers, the independent auditors' audit report and the accompanying consolidated financial statements have been translated into English from the original Chinese version prepared and used in the Republic of China. If there is any conflict between the English version and the original Chinese version or any difference in the interpretation of the two versions, the Chinese-language independent auditors' audit report and consolidated financial statements shall prevail.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Lotes Co., Ltd. and Subsidiaries
Consolidated Balance Sheets
December 31, 2025 and 2024
Unit: NT$ thousands

Assets	Dec. 31, 2025		Dec. 31, 2024		Liabilities and equity	Dec. 31, 2025		Dec. 31, 2024
	Amount	%	Amount	%	Current liabilities:	Amount	%	Amount	%
Current assets:					Short-term loans (Note VI (13), (27), (30) VIII and IX)	$ 225,010	-	3,765,000	7
1100	Cash and cash equivalents (Note VI (1) and (27))	$ 12,499,891	25	18,658,882	37	2100
1110	Current financial assets at fair value through profit or loss (Note VI (2), (14) and (27))	1,028,962	2	190,867	-	2130	3,669,225	7	2,834,594
1150	Notes receivable, net (Note VI (3) and (27))	880,787	2	693,156	1	2150	8,742	-	6,761
1170	Accounts receivables, net (Note VI (3) and (27))	13,301,285	26	11,945,095	24	2170	3,669,225	7	2,834,594
1200	Other receivables (Note VI (3) and (27))	668,373	1	658,417	1	2180	-	-	268
1220	Current tax assets (Note VI (20))	21,753	-	1,094	-	2200	2,792,129	6	2,592,146
130X	Inventories (Note VI (4))	4,374,928	9	3,418,496	7	2220	2,645	-	-
1410	Advance payment	364,426	1	190,548	-	2230	1,115,886	2	1,227,751
1476	Other financial assets – current (Note VI (12) and (8))	89,934	-	1,560	-	2240	2,645	-	-
1479	Other current assets	3,830	-	3,622	-	2260	546,736	1	548,478
		33,234,169	66	35,761,737	70	2300	381,851	1	41,186
Non-current assets:						9,004,924	17	11,181,974	21
1510	Non-current financial assets at fair value through profit or loss (Note VI (2), (14) and (27))	247,232	-	230,008	1	2530
1517	Non-current financial assets at fair value through other comprehensive income (Note VI (2) and (27))	281,100	1	186,472	-	2550	2530	2530	2530
1550	Investments accounted for using the equity method (Note VI (5))	181,094	-	153,048	-	2560	2550	2550	2550
1600	Property, plant and equipment (Note VI (8) and VIII)	13,429,301	27	10,990,051	22	2580	2580	2580	2580
1755	Right-of-use assets (Note VI (9))	1,424,273	3	1,228,926	3	2600	2580	2580	2580
1760	Investment property (Note VI (10) and (27))	252,074	-	525,789	1
1780	Intangible assets (Note VI (11))	302,176	1	217,364	1
1840	Deferred tax assets (Note VI (20))	333,422	1	306,440	1
1980	Other financial assets – non-current (Note VI (12))	157,360	-	-	-
1900	Other non-current assets	591,050	1	611,214	1
		17,199,082	34	14,449,312	30
						Total liabilities
						Equity attributable to owners of parent:
						Share capital:
						Ordinary shares (Note VI (21))	1,125,347	2	1,125,347
						Capital surplus (Note VI (21))	9,863,444	19	9,830,950
						Retained earnings (Note VI (21))	28,127,001	56	24,935,301
						Other equity (Note VI (21))	4,202	-	78,419
						Treasury stock (Note VI (21))	(676,152)	(1)	-
						Total equity attributable to owners of parent	38,443,842	76	35,970,017
						Non-controlling interest (Note VI (7))	1,970,993	4	1,989,855
						Total equity	40,414,835	80	37,959,872
						Total liabilities and equity	$ 50,433,251	100	50,211,049

Total assets
$ 50,433,251 100 50,211,049 100

Chairman: CHU, TE-HSIANG

(Please read the Notes to the Consolidated Financial Statements)

Manager: HO, TE-YU

Accounting Manager: WU, CHIA-CHI

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Lotes Co., Ltd. and Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2025 and 2024
Unit: NT$ thousands

		2025		2024
		Amount	%	Amount	%
4000	Operating revenue (Note VI (16), (24) and XIV)	$ 33,783,411	100	30,088,992	100
5000	Operating cost (Note VI (4) and XII)	16,449,732	49	14,319,522	48
	Gross profit	17,333,679	51	15,769,470	52
	Operating expense (Note VI (15), (18), (19), (26), (27), VII and XII):
6100	Selling expenses	1,367,316	4	911,892	3
6200	Administrative expenses	2,118,824	6	1,880,568	6
6300	Research and development expenses	3,503,012	10	2,730,694	9
6450	Impairment loss (gain) determined in accordance with IFRS 9	118	-	1,696	-
	Total operating expense	6,989,270	20	5,524,850	18
	Net operating profit	10,344,409	31	10,244,620	34
	Non-operating income/expense(Note VI (5), (18) and (25)):
7100	Interest income	373,061	1	557,248	2
7010	Other income	415,786	1	347,561	1
7020	Other gains and losses	114,292	-	(78,110)	-
7630	Foreign exchange (losses) gains	(946,099)	(3)	910,021	3
7050	Finance costs	(68,345)	-	(86,360)	-
7055	Reversal of impairment loss determined in accordance with IFRS 9	-	-	2,119	-
7070	Share in the gain or loss of associate and joint ventures accounted for using the equity method	(42,195)	-	(28,274)	-
	Total non-operating income /expense	(153,500)	(1)	1,624,205	6
	Net profit before tax from continuing operations	10,190,909	30	11,868,825	40
7950	Less: Income tax expense(Note VI (20))	2,243,827	7	2,487,788	8
	Net profit for the period	7,947,082	23	9,381,037	32
8300	Other comprehensive income:
8310	Components of other comprehensive income that will not be reclassified to profit or loss
8311	Remeasurements of defined benefit plans	(5,136)	-	4,579	-
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	28,987	-	(3,463)	-
8320	Share of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	-	-	33	-
8349	Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	(1,027)	-	916	-
	Total components of other comprehensive income that will not be reclassified to profit or loss	24,878	-	233	-
8360	Components of other comprehensive income that will be reclassified to profit or loss
8361	Exchange differences on translation	(103,245)	-	899,449	3
8370	Share of other comprehensive income of associates and joint ventures accounted for using the equity method – items that may be reclassified subsequently to profit or loss	27	-	3	-
8399	Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss	183	-	9,858	-
	Total components of other comprehensive income that will be reclassified to profit or loss	(103,401)	-	889,594	3
8300	Other comprehensive income for the period (net)	(78,523)	-	889,827	3
	Total other comprehensive income for the period	$ 7,868,559	23	10,270,864	35
	Net profit for the period attributable to:
8610	Owners of parent	$ 7,865,999	23	9,276,952	32
8620	Non-controlling interests	81,083	-	104,085	-
		$ 7,947,082	23	9,381,037	32
	Total comprehensive income attributable to:
8710	Owners of parent	$ 7,785,561	23	10,146,370	35
8720	Non-controlling interests	82,998	-	124,494	-
		$ 7,868,559	23	10,270,864	35

(Please read the Notes to the Consolidated Financial Statements)
Chairman: CHU, TE-HSIANG
Manager: HO, TE-YU
Accounting Manager: WU, CHIA-CHI

Basic earnings per share (Unit: NT$) (Note VI (23))
Diluted earnings per share (Unit: NT$) (Note VI (23))
$ 70.17 82.77
$ 70.06 82.33

(Please read the Notes to the Consolidated Financial Statements)

Chairman: CHU, TE-HSIANG
Manager: HO, TE-YU
Accounting Manager: WU, CHIA-CHI

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Lotes Co., Ltd. and Subsidiaries

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2025 and 2024

Unit: NT$ thousands

	Equity attributable to owners of parent
	Share capital		Retained earnings				Other equity				Unrealized gains (losses) on financial assets measured at FVTOCI	Non-controlling interests	Total equity
	Ordinary shares	Certificates of bond-to-stock conversion	Capital surplus	Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at FVTOCI	Unearned compensation to employees	Treasury stock
Balance on January 1, 2024	$ 1,113,298	1,423	8,896,393	2,544,335	339,030	15,669,563	(769,007)	(15,814)	(6,162)	-	27,773,059	1,607,943	29,381,002
Profit for the period	-	-	-	-	-	9,276,952	-	-	-	-	9,276,952	104,085	9,381,037
Other comprehensive income for the period	-	-	-	-	-	3,696	868,885	(3,163)	-	-	869,418	20,409	889,827
Total other comprehensive income for the period	-	-	-	-	-	9,280,648	868,885	(3,163)	-	-	10,146,370	124,494	10,270,864
Appropriation and distribution of retained earnings:
Appropriation of legal reserve	-	-	-	559,120	-	(559,120)	-	-	-	-	-	-	-
Appropriation of special reserve	-	-	-	-	451,954	(451,954)	-	-	-	-	-	-	-
Cash dividends on ordinary share	-	-	-	-	-	(2,898,275)	-	-	-	-	(2,898,275)	-	(2,898,275)
Other changes in capital surplus:
Changes in equity of subsidiaries, associates and joint ventures accounted for using equity method	-	-	90,994	-	-	-	-	-	-	-	90,994	-	90,994
Conversion of convertible bonds	12,049	(1,423)	843,563	-	-	-	-	-	-	-	854,189	-	854,189
Changes in ownership interests of subsidiaries	-	-	-	-	-	-	-	-	3,680	-	3,680	3,855	7,535
Changes in non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	366,856	366,856
Cash dividends paid by subsidiaries to non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	(113,293)	(113,293)
Balance on December 31, 2024	1,125,347		9,830,950	3,103,455	790,984	21,040,862	99,878	(18,977)	(2,482)	-	35,970,017	1,989,855	37,959,872
Profit for the period	-	-	-	-	-	7,865,999	-	-	-	-	7,865,999	81,083	7,947,082
Other comprehensive income for the period	-	-	-	-	-	(4,109)	(101,364)	25,035	-	-	(80,438)	1,915	(78,523)
Total other comprehensive income for the period	-	-	-	-	-	7,861,890	(101,364)	25,035	-	-	7,785,561	82,998	7,868,559
Appropriation and distribution of retained earnings:
Appropriation of legal reserve	-	-	-	928,494	-	(928,494)	-	-	-	-	-	-	-
Reversal of special reserve	-	-	-	-	(869,403)	869,403	-	-	-	-	-	-	-
Cash dividends on ordinary share	-	-	-	-	-	(4,670,190)	-	-	-	-	(4,670,190)	-	(4,670,190)
Other changes in capital surplus:
Changes in equity of subsidiaries, associates and joint ventures accounted for using equity method	-	-	(6,585)	-	-	-	-	-	-	-	(6,585)	-	(6,585)
Treasury shares repurchase	-	-	-	-	-	-	-	-	-	(676,152)	(676,152)	-	(676,152)
Changes in ownership interests of subsidiaries	-	-	-	-	-	-	-	-	2,112	-	2,112	2,247	4,359
Share-based payment transactions	-	-	39,079	-	-	-	-	-	-	-	39,079	-	39,079
Changes in non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	29,036	29,036
Cash dividends paid by subsidiaries to non-controlling interests	-	-	-	-	-	-	-	-	-	-	-	(133,143)	(133,143)
Balance on December 31, 2025	$ 1,125,347	-	9,863,444	4,031,949	(78,419)	24,173,471	(1,486)	6,058	(370)	(676,152)	38,443,842	1,970,993	40,414,835

Chairman: CHU, TE-HSIANG

(Please read the Notes to the Consolidated Financial Statements)

Manager: HO, TE-YU

Accounting Manager: WU, CHIA-CHI

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)
Lotes Co., Ltd. and Subsidiaries
Consolidated Statements of Cash Flows
For the Years Ended December 31, 2025 and 2024
Unit: NT$ thousands

	2025	2024
Cash flows from (used in) operating activities:
Net profit before tax	$ 10,190,909	11,868,825
Adjustments:
Adjustments to reconcile profit (loss)
Depreciation expenses	2,541,139	2,214,846
Amortization expenses	68,975	64,142
Expected credit loss (gain)	118	(423)
Net (gain) loss on financial assets or liabilities at FVTPL	(186,847)	32,605
Interest expenses	68,345	86,360
Interest income	(373,061)	(557,248)
Dividend income	(6,921)	(3,520)
Compensation expense for share-based payment	44,442	25,649
Share of the gain or loss of subsidiaries, associate and joint ventures accounted for using the equity method	42,195	28,274
Loss on disposal of property, plant and equipment	32,653	20,899
Gain on disposal of investments	(2,002)	-
Inventory (reversal gain) write-down and scrap loss	36,327	(156,817)
Other adjustments	(58)	(66)
Total adjustments to reconcile profit (loss)	2,265,305	1,754,701
Changes in operating assets and liabilities:
Changes in operating assets:
Increase in notes receivable	(187,631)	(387,592)
Increase in accounts receivable	(1,356,308)	(2,641,382)
Increase in other receivables	(56,539)	(123,205)
Increase in inventory	(992,759)	(604,366)
Increase in advance payment	(173,878)	(87,993)
Decrease (increase) in other current assets	(208)	210
Increase in other financial assets	(245,734)	(1,560)
Total changes in operating assets	(3,013,057)	(3,845,888)
Changes in operating liabilities:
Decrease in contract liabilities	(2,699)	(1,483)
Increase in notes payable	1,981	1,552
Increase in accounts payable	834,363	1,012,043
Increase in other payables	197,403	731,875
Increase in provisions	26,778	30,896
Increase in other current liabilities	15,717	3,127
Increase in refund liabilities	78,258	128,296
Total changes in operating liabilities	1,151,801	1,906,306
Total changes in operating assets and liabilities	(1,861,256)	(1,939,582)
Total adjustments	404,049	(184,881)
Cash inflow generated from operations	10,594,958	11,683,944
Interest received	419,294	530,362
Dividends received	6,921	3,520
Interest paid	(58,932)	(70,740)
Income taxes paid	(2,434,369)	(2,089,491)
Net cash flows from operating activities	8,527,872	10,057,595

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Lotes Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2025 and 2024

Unit: NT$ thousands

	2025	2024
Cash flows from (used in) investing activities:
Proceeds from disposal of financial assets at fair value through other comprehensive income	$ -	2,544
Acquisition of financial assets at fair value through other comprehensive income	(70,000)	(112,500)
Acquisition of financial assets measured at fair value through profit or loss	(692,199)	(370,860)
Proceeds from disposal of financial assets measured at fair value through profit or loss	16,200	8,035
Acquisition of investments accounted for using the equity method	(64,301)	(107,491)
Disposal of investments accounted for using the equity method	2,279	-
Cash outflow from loss of control over subsidiaries	(33)	-
Acquisition of property, plant and equipment	(4,975,982)	(3,749,026)
Proceeds from disposal of property, plant and equipment	56,143	49,705
Increase in other receivables	350	-
Acquisition of intangible assets	(122,778)	(126,469)
Increase in other non-current assets	(6,972)	(281,005)
Net cash flows from (used in) investing activities:	(5,857,293)	(4,687,067)
Cash flows from (used in) financing activities:
Increase (decrease) in short-term loans	(3,551,260)	2,185,000
Payments of lease liabilities	(154,337)	(141,087)
Decrease in other non-current liabilities	(3,111)	(1,199)
Cash dividends paid	(4,670,190)	(2,898,275)
Cash dividends paid to non-controlling interests	(133,143)	(113,293)
Repurchase of restricted stock awards	(306)	(343)
Proceeds from issuing bonds	-	341,862
Employee purchase of treasury shares	324,948	-
Payments to acquire treasury shares	(676,152)	-
Changes in non-controlling interests	19,189	305,459
Net cash flows from (used in) financing activities	(8,844,362)	(321,876)
Effect of exchange rate changes on cash and cash equivalents	14,792	477,739
Net increase (decrease) in cash and cash equivalents	(6,158,991)	5,526,391
Cash and cash equivalents at beginning of period	18,658,882	13,132,491
Cash and cash equivalents at end of period	$ 12,499,891	18,658,882

(Please read the Notes to the Consolidated Financial Statements)
Chairman: CHU, TE-HSIANG
Manager: HO, TE-YU
Accounting Manager: WU, CHIA-CHI

Lotes Co., Ltd. and Subsidiaries
Notes to the Consolidated Financial Statements
For the Years Ended December 31, 2025 and 2024
(Amounts in Thousands of New Taiwan Dollars, Unless Specified Otherwise)

I. Company History

Lotes Co., Ltd. (hereinafter referred to as the “Company”) was incorporated on August 23, 1986 in accordance with the provisions of the Company Act and was approved for registration with its registered office at No.15, Wuxun Street, Anle District, Keelung City. The Company and Subsidiaries (hereinafter referred to as the “Consolidated Company”) are principally engaged in the sale and purchase of various hardware parts and components, the manufacturing and processing of various terminals and their connectors, the import and export business in connection with the preceding item and the agency of the preceding item in connection with the tender quotation and distribution of products of domestic and foreign manufacturers. (See Note XIV)

II. Approval Date and Procedures of the Consolidated Financial Statements

The Consolidated Financial Statement was approved and released by the Board of Directors on March 11, 2026.

III. Application of New and Revised Standards and Interpretations

(1) Influence of the Adoption of New and Revised Standards and Integrations Approved by the Financial Supervisory Commission

The Consolidated Company has applied the following newly revised International Financial Reporting Standards (IFRSs) starting from January 1, 2025, which did not have a significant impact on the consolidated financial statements:

Amendments to IAS 21 “Lack of Exchangeability”

(2) Effect of Newly Revised IFRSs Not Yet Adopted but Approved by the Financial Supervisory Commission

The Consolidated Company has assessed the following newly revised IFRSs, which will be effective starting from January 1, 2026, and concluded that they are not expected to have a significant impact on the consolidated financial statements:

IFRS 17 “Insurance Contracts” and Amendments to IFRS 17
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”
Annual Improvements to IFRSs
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”

Notes to the Consolidated Financial Statements (Continued)

(3) Newly Issued and Revised Standards and Interpretations Not Yet Endorsed by the Financial Supervisory Commission

The following standards and interpretations have been issued or amended by the International Accounting Standards Board but have not yet been endorsed by the Financial Supervisory Commission, and may be relevant to the Consolidated Company:

Newly Issued or Revised Standards	Key Amendments	Effective Date Issued by the IASB
International Financial Reporting Standard 18 – Presentation and Disclosure in Financial Statements	The new standard introduces three categories of income and expenses, two new subtotals in the statement of profit or loss, and a single note related to management performance measures. These changes and enhancements provide more detailed guidance on disaggregation in financial statements, laying the foundation for better and more consistent information for users and will impact all companies.

• More Structured Statement of Profit or Loss: Under existing standards, companies use various formats to present their operating results, making it difficult for investors to compare financial performance across companies. The new standard adopts a more structured format and introduces a newly defined subtotal, “operating profit,” and classifies all income and expenses arising from a company’s main business activities into three new categories.

• Management Performance Measures (MPMs): The new standard introduces a definition of MPMs and requires companies to disclose, in a single note to the financial statements, an explanation of why each metric provides useful information, how it is calculated, and how it reconciles to amounts recognized under IFRSs.

• More Granular Information: The new standard includes enhanced guidance on how companies disaggregate information in financial statements. This includes guidance on whether information should be included in the primary financial statements or further disaggregated in the notes. | January 1, 2027

Note: On September 25, 2025, the Financial Supervisory Commission (the “FSC”) announced via a press release that Taiwan will adopt International Financial Reporting Standard No. 18 starting from the 2028 fiscal year. If a company elects to apply the standard earlier, it may choose early adoption upon approval by the FSC. |

Notes to the Consolidated Financial Statements (Continued)

The Consolidated Company is currently assessing the impact of the above standard and interpretation on its financial position and operating results. The related impact will be disclosed upon completion of the assessment.

The Consolidated Company anticipates that the following other newly issued or amended standards not yet endorsed will not have a material impact on the consolidated financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and Its Associate or Joint Venture”
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” and amendments to IFRS 19
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”

IV. Summary of Major Accounting Policies

The significant accounting policies adopted in the preparation of these consolidated financial statements are summarized below. Except where otherwise stated, the following accounting policies have been consistently applied to all periods presented in these consolidated financial statements.

(1) Statement of Compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

(2) Basis of Preparation

Measurement Basis

These consolidated financial statements have been prepared on a historical cost basis, except for the following significant items in the balance sheet:

(1) Financial assets at FVTPL, measured at fair value;
(2) Financial assets at FVTOCI, measured at fair value;
(3) Liabilities for cash-settled share-based payment arrangements, measured at fair value; and
(4) Net defined benefit liabilities (or assets), measured as the fair value of plan assets less the present value of the defined benefit obligation, and adjusted for the effect of the asset ceiling as described in Note IV (17).

Functional Currency and Presentation Currency

Each entity within the Group determines its own functional currency based on the primary economic environment in which it operates. These consolidated financial statements are presented in New Taiwan Dollars (NTD), which is the functional currency of the Company. All financial information presented in New Taiwan Dollars is expressed in thousands of New Taiwan Dollars.

Notes to the Consolidated Financial Statements (Continued)

(3) Basis of Consolidation

The consolidated financial statements comprise the Company and entities controlled by the Company (i.e., its subsidiaries).

The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control is obtained until the date on which control ceases. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to non-controlling interests, even if this results in the non-controlling interests having a deficit balance. All intercompany transactions, balances, and any unrealized gains and losses arising from intercompany transactions are eliminated in preparing the consolidated financial statements.

The financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Changes in the Group’s ownership interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions.

Subsidiaries Included in the Consolidated Financial Statements

Subsidiaries included in these consolidated financial statements comprise:

Investing company	Subsidiary	Location	Shareholding %
			Dec. 31, 2025	Dec. 31, 2024
Lotes Co., Ltd.	LOTES INVESTMENTS LIMITED	Samoa	100.00%	100.00%
"	GOOD HOPE INVESTMENTS LIMITED	"	100.00%	100.00%
"	CROWN MIND DEVELOPMENTS LIMITED	"	100.00%	100.00%
"	TASHI INVESTMENTS LIMITED	Anguilla	100.00%	100.00%
"	Jiayou Investment Co., Ltd.	Taiwan	100.00%	100.00%
"	LOTES USA, INC.	USA	100.00%	100.00%
"	LOTES EU GmbH	Germany	100.00%	100.00%
"	Lomites Co., Ltd	Taiwan	99.81%	99.84%
"	COMPERTUM MICROSYSTEMS INC.	"	33.56%	- % (Note 1 & 2)
"	GOOD NEWS MEDICAL CO., LTD.	"	30.65%	- % (Note 1 & 2)
"	Lintes Technology Co., Ltd.	"	48.56%	- % (Note 1 & 2)
"	LOTES VIET NAM COMPANY LIMITED	Vietnam	100.00%	100.00%
LOTES INVESTMENTS LIMITED	LOTESON INTERNATIONAL INVESTMENTS LTD.	Hong Kong	100.00%	100.00%
LOTESON INTERNATIONAL	LOTES GUANGZHOU CO., LTD.	China	100.00%	100.00%

Notes to the Consolidated Financial Statements (Continued)

INVESTMENTS LTD.

LOTES GUANGZHOU CO., LTD.	LOTES HENGNAN CO., LTD.	"	100.00%	100.00%
"	LOTES SHENZHEN CO., LTD.	"	100.00%	100.00%
"	LOTES ZHONGSHAN CO., LTD.	"	50.00%	50.00%
"	Zhongshan Dezhi Metal Surface Treatment Co., Ltd.	"	100.00%	100.00%
"	Lotes (Hengnan) Business Development Co., LTD.	"	100.00%	100.00%
"	Zhongshan Jinmeida Metal Surface Treatment Co., Ltd.	"	100.00%	- % (Note 2 & 4)
"	LOTESPEED TECHNOLOGY GUANGZHOU LTD	"	100.00%	100.00%
"	Sky Comet Zhongshan Electronics Co., Ltd.	China	30.06%	30.06% (Note 2)
"	Guangzhou Dezhi Technology Co., Ltd.	"	100.00%	100.00%
LOTES ZHONGSHAN CO., LTD.	Zhongshan Dezhi Real Estate Development Co., Ltd.	"	100.00%	100.00%
LOTESPEED TECHNOLOGY GUANGZHOU LTD	CHONGGING FOISON ELECTRONIC TECHNOLOGY CO., LTD.	"	51.00%	51.00%
Sky Comet Zhongshan Electronics Co., Ltd.	Huili Electronics Technology (Ningbo) Co., Ltd.	"	51.00%	51.00%
GOOD HOPE INVESTMENTS LIMITED	JOY CITY DEVELOPMENTS LIMITED	Samoa	100.00%	100.00%
"	SWISS GOOD ENTERPRISES LIMITED	Hong Kong	100.00%	100.00%
CROWN MIND DEVELOPMENTS LIMITED	BLESS WINNER LIMITED	"	100.00%	100.00%
BLESS WINNER LIMITED	LOTES SUZHOU CO., LTD	China	100.00%	100.00%
LOTES SUZHOU CO., LTD	LOTES ZHONGSHAN CO., LTD.	"	50.00%	50.00%

Notes to the Consolidated Financial Statements (Continued)

TASHI INVESTMENTS LIMITED	WANGDEN INVESTMENTS LIMITED	Hong Kong	100.00%	100.00%
WANGDEN INVESTMENTS LIMITED	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	China	100.00%	100.00%
Jiayou Investment Co., Ltd.	EMEME ROBOT CO., LTD.	Taiwan	- %	94.37% (Note 3)
"	COMPERTUM MICROSYSTEMS INC.	"	- %	30.48% (Note 1 & 2)
"	GOOD NEWS MEDICAL CO., LTD.	"	- %	27.29% (Note 1 & 2)
"	Lintes Technology Co., Ltd.	"	- %	48.32% (Note 1 & 2)
GOOD NEWS MEDICAL CO., LTD.	FELICITY NEWS LIMITED	British Virgin Islands	100.00%	100.00%
FELICITY NEWS LIMITED	JIASHIMEI (GUANGZHOU) Trading Co., Ltd.	China	100.00%	100.00%
Lintes Technology Co., Ltd.	GENIE Precision Machining CO., LTD.	Taiwan	51.01%	60.00%
"	COMPERTUM MICROSYSTEMS INC.	"	9.94%	10.16% (Note 2)
"	BLOOMING CHANCE LIMITED	Samoa	100.00%	100.00%
"	LINTES TECHNOLOGY (THAILAND) CO., LTD.	Thailand	100.00%	100.00%
BLOOMING CHANCE LIMITED	RADIANT DAY LIMITED	Samoa	100.00%	100.00%
RADIANT DAY LIMITED	LINTES TECHNOLOGY (SUZHOU) CO., LTD.	China	100.00%	100.00%

Note 1: The Company completed a simplified merger with its wholly owned subsidiary Jiayou Investment Co., Ltd. on November 17, 2025, as the merger date. The Company is the surviving entity, while Jiayou Investment Co., Ltd. was dissolved. All relevant statutory procedures have been completed.

Note 2: Although the Group holds less than a majority of the voting shares of the investee, it has control over the investee's significant operating activities. Accordingly, the investee is included as a subsidiary in the consolidated financial statements.

Note 3: EMEME ROBOT CO., LTD. resolved to proceed with dissolution and liquidation at a special shareholders' meeting on July 24, 2024, and the liquidation was completed on July 11, 2025.

Notes to the Consolidated Financial Statements (Continued)

Note 4: Zhongshan Jinmeida Metal Surface Treatment Co., Ltd. completed the required statutory procedures in December 2025.

Subsidiaries Not Included in the Consolidated Financial Statements: None.

(4) Foreign Currency

Foreign Currency Transactions

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. At the end of each subsequent reporting period (the "reporting date"), monetary items denominated in foreign currencies are translated into the functional currency using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated using the exchange rates at the date when the fair value was determined, whereas those measured at historical cost are translated using the exchange rates at the date of the transaction.

Exchange differences arising from translation are generally recognized in profit or loss, except for the following, which are recognized in other comprehensive income:

(1) Equity instruments designated as at FVTOCI;
(2) Financial liabilities designated as hedges of a net investment in a foreign operation, to the extent that the hedge is effective; or
(3) Qualifying cash flow hedges, to the extent that the hedge is effective.

Foreign Operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into New Taiwan Dollars at the exchange rates at the reporting date. Income and expenses are translated at the average exchange rates for the period. Exchange differences arising from such translation are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, joint control, or significant influence is lost, the cumulative exchange differences related to that foreign operation are reclassified in full to profit or loss. When there is a partial disposal of a subsidiary that includes a foreign operation, the relevant cumulative exchange differences are reattributed proportionately to non-controlling interests. When there is a partial disposal of an associate or joint venture that includes a foreign operation, the relevant cumulative exchange differences are reclassified proportionately to profit or loss.

Monetary receivables from or payables to a foreign operation for which settlement is neither planned nor likely to occur in the foreseeable future are considered part of the net investment in that foreign operation, and the related foreign exchange gains or losses are recognized in other comprehensive income.

Notes to the Consolidated Financial Statements (Continued)

(5) Classification of Current and Non-current Assets and Liabilities

An asset is classified as a current asset if it meets any of the following criteria; all other assets are classified as non-current assets:

It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
It is held primarily for trading purposes;
It is expected to be realized within twelve months after the reporting period; or
It is cash or a cash equivalent (as defined in IAS 7), unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

A liability is classified as a current liability if it meets any of the following criteria; all other liabilities are classified as non-current liabilities:

It is expected to be settled in the normal operating cycle;
It is held primarily for trading purposes;
It is due to be settled within twelve months after the reporting period; or
The Group does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

(6) Cash and Cash Equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits that meet the definition of cash equivalents and are held for the purpose of meeting short-term cash commitments rather than for investment or other purposes are classified as cash equivalents.

(7) Financial Instruments

Accounts receivable and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the financial instrument. Financial assets (other than accounts receivable that do not contain a significant financing component) and financial liabilities not measured at FVTPL are initially measured at fair value plus transaction costs that are directly attributable to their acquisition or issuance. Accounts receivable that do not contain a significant financing component are initially measured at the transaction price.

Financial Assets

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the marketplace (regular way trades) are accounted for consistently using either trade date accounting or settlement date accounting for all financial assets classified in the same manner.

On initial recognition, financial assets are classified as: financial assets measured at

Notes to the Consolidated Financial Statements (Continued)

amortized cost, debt investments measured at FVTOCI, equity investments measured at FVTOCI, or financial assets measured at (FVTPL.

The Consolidated Company reclassifies all affected financial assets only when it changes its business model for managing financial assets, and such reclassification is applied prospectively from the beginning of the next reporting period.

(1) Financial Assets Measured at Amortized Cost

A financial asset is measured at amortized cost if both of the following conditions are met and it is not designated as at fair value through profit or loss:

The financial asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
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.

Subsequent to initial recognition, these assets are measured at amortized cost using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

(2) Financial Assets at FVTOCI

Debt investments are measured at fair value through other comprehensive income if both of the following conditions are met and they are not designated as at fair value through profit or loss:

The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
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.

At initial recognition, the Consolidated Company may make an irrevocable election to present subsequent changes in the fair value of an equity investment that is not held for trading in other comprehensive income.

For debt investments, subsequent measurement is at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Other net gains or losses are recognized in other comprehensive income. Upon derecognition, the cumulative amount recognized in other comprehensive income is reclassified to profit or loss.

For equity investments, subsequent measurement is at fair value. Dividend income (unless it clearly represents a recovery of part of the cost of the investment) is recognized in profit or loss. All other net gains or losses are recognized in other comprehensive income and are not reclassified to profit or loss.

Dividend income from equity investments is recognized when the Consolidated

Notes to the Consolidated Financial Statements (Continued)

Company’s right to receive payment is established (usually on the ex-dividend date).

(3) Financial Assets at FVTPL

Financial assets that are not classified as measured at amortized cost or at FVTOCI, such as those held for trading or managed and evaluated on a fair value basis, are measured at fair value through profit or loss, including derivative financial assets. At initial recognition, the Consolidated Company may irrevocably designate a financial asset that otherwise meets the criteria to be measured at amortized cost or at FVTOCI as at FVTPL, if doing so eliminates or significantly reduces an accounting mismatch.

Subsequent to initial recognition, these assets are measured at fair value, and any net gains or losses (including any dividend and interest income) are recognized in profit or loss.

(4) Assessment of Business Model

The Consolidated Company assesses the objective of the business model in which a financial asset is held at a portfolio level, as this best reflects the way the business is managed and information is provided to management. The information considered includes:

The stated policies and objectives for the portfolio and the operation of those policies. This includes whether management’s strategy focuses on earning contractual cash flows, maintaining a particular interest yield profile, matching the duration of financial assets with the duration of related liabilities or expected cash outflows, or realizing cash flows through the sale of financial assets;
How the performance of the business model and the financial assets held within that business model are evaluated and reported to the key management personnel of the entity;
The risks that affect the performance of the business model (and the financial assets held within that business model) and how those risks are managed; and
The frequency, volume, and timing of sales of financial assets in prior periods, the reasons for such sales, and expectations regarding future sales activity.

Transfers of financial assets to third parties in transactions that do not qualify for derecognition are not considered sales for the purposes described above, which is consistent with the Consolidated Company’s continuing recognition of the assets.

(5) Assessment of Whether Contractual Cash Flows Are Solely Payments of Principal and Interest (SPPI)

For the purpose of this assessment, “principal” is defined as the fair value of the financial asset at initial recognition. “Interest” consists of consideration for the time value of money, credit risk associated with the principal amount outstanding during a particular period, and other basic lending risks and costs, as well as a profit margin.

In assessing whether the contractual cash flows are solely payments of principal and interest on the principal amount outstanding, the Consolidated Company considers the

Notes to the Consolidated Financial Statements (Continued)

contractual terms of the instrument, including whether the financial asset contains contractual terms that could change the timing or amount of contractual cash flows such that it would not meet this condition. In making this assessment, the Consolidated Company considers:

Contingent events that would change the timing or amount of contractual cash flows;
Terms that may adjust the contractual coupon rate, including variable interest rate features;
Prepayment and extension features; and
Terms that limit the Consolidated Company’s claim to cash flows from specified assets (e.g., non-recourse features).

(6) Impairment of Financial Assets

The Consolidated Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, notes receivable and accounts receivable, other receivables, refundable deposits, and other financial assets), debt investments measured at FVTOCI, and contract assets.

The following financial assets are measured using a 12-month ECL, while the others are measured using lifetime ECL:

Debt securities that are determined to have low credit risk at the reporting date; and
Other debt securities and bank deposits for which the credit risk (i.e., the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowances for accounts receivable and contract assets are measured at an amount equal to lifetime ECL.

In determining whether the credit risk has increased significantly since initial recognition, the Consolidated Company considers reasonable and supportable information that is available without undue cost or effort, including both qualitative and quantitative information, as well as analyses based on the Consolidated Company’s historical experience, credit assessments, and forward-looking information.

The Consolidated Company considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations in full to the Consolidated Company.

Lifetime ECL represents the expected credit losses that result from all possible default events over the expected life of a financial instrument.

12-month ECL represents the portion of lifetime ECL that results from default events that are possible within 12 months after the reporting date (or a shorter period if the expected life of the financial instrument is less than 12 months).

The maximum period considered when estimating ECL is the maximum contractual period over which the Consolidated Company is exposed to credit risk.

Notes to the Consolidated Financial Statements (Continued)

ECL is a probability-weighted estimate of credit losses over the expected life of a financial instrument. Credit losses are measured as the present value of all cash shortfalls, i.e., the difference between the cash flows due to the Consolidated Company in accordance with the contract and the cash flows that the Consolidated Company expects to receive. ECL is discounted using the effective interest rate of the financial asset.

At each reporting date, the Consolidated Company assesses whether financial assets measured at amortized cost and debt investments measured at FVTOCI are credit-impaired. A financial asset is considered credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes observable data about the following events:

Significant financial difficulty of the borrower or issuer;
A breach of contract, such as default or delinquency beyond a specified period;
The Consolidated Company granting concessions to the borrower, for economic or contractual reasons relating to the borrower’s financial difficulty, that it would not otherwise consider;
It becoming probable that the borrower will enter bankruptcy or other financial reorganization; or
The disappearance of an active market for the financial asset because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. Loss allowances for debt investments measured at FVTOCI are recognized in profit or loss and in other comprehensive income, without reducing the carrying amount of the assets.

When the Consolidated Company has no reasonable expectation of recovering a financial asset in its entirety or a portion thereof, the gross carrying amount of the financial asset is written off directly. For corporate customers, the timing and amount of write-offs are assessed individually based on whether there is a reasonable expectation of recovery. The Consolidated Company expects that the amounts written off will not be significantly recovered. However, financial assets that have been written off may still be subject to enforcement activities in order to comply with the Consolidated Company’s procedures for recovery of amounts due.

(7) Derecognition of Financial Assets

The Consolidated Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset have been transferred to another entity, or when it neither transfers nor retains substantially all the risks and

Notes to the Consolidated Financial Statements (Continued)

rewards of ownership and does not retain control of the financial asset.

When the Consolidated Company enters into transactions to transfer financial assets and retains all or substantially all of the risks and rewards of ownership of the transferred assets, the transferred assets continue to be recognized in the balance sheet.

Financial Liabilities and Equity Instruments

(1) Classification of Liabilities or Equity

Debt and equity instruments issued by the Consolidated Company are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

(2) Equity Transactions

An equity instrument is any contract that evidences a residual interest in the assets of the Consolidated Company after deducting all of its liabilities. Equity instruments issued by the Consolidated Company are recognized at the proceeds received, net of directly attributable issuance costs.

(3) Treasury Shares

When the Consolidated Company reacquires its own equity instruments that have been previously recognized, the consideration paid, including any directly attributable costs, is recognized as a deduction from equity. The reacquired shares are classified as treasury shares. Subsequent reissuance or resale of treasury shares is recognized as an increase in equity, and the difference between the consideration received and the carrying amount is recognized in capital surplus or retained earnings (if capital surplus is insufficient to absorb the difference).

(4) Compound Financial Instruments

Compound financial instruments issued by the Consolidated Company comprise convertible bonds denominated in New Taiwan Dollars, under which the holder has an option to convert the bonds into equity, and the number of shares to be issued does not vary with changes in fair value.

At initial recognition, the liability component of a compound financial instrument is measured at the fair value of a similar liability that does not have an equity conversion option. The equity component is measured as the residual amount, being the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts.

Subsequent to initial recognition, the liability component is measured at amortized cost using the effective interest method, while the equity component is not remeasured.

Interest related to the financial liability is recognized in profit or loss. Upon conversion, the financial liability is reclassified to equity, and no gain or loss is recognized.

Notes to the Consolidated Financial Statements (Continued)

(5) Financial Liabilities

Financial liabilities are classified as either measured at amortized cost or at FVTPL. A financial liability is classified as at FVTPL if it is held for trading, is a derivative, or is designated as such at initial recognition. Financial liabilities at FVTPL are measured at fair value, and any net gains or losses, including any interest expense, are recognized in profit or loss.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

(6) Derecognition of Financial Liabilities

The Consolidated Company derecognizes a financial liability when its contractual obligations are discharged, cancelled, or expire. When the terms of a financial liability are modified and the cash flows of the modified liability are substantially different, the original financial liability is derecognized and a new financial liability is recognized at fair value based on the modified terms.

The difference between the carrying amount of a financial liability derecognized and the consideration paid or payable (including any non-cash assets transferred or liabilities assumed) is recognized in profit or loss.

(7) Offsetting of Financial Assets and Liabilities

Financial assets and financial liabilities are offset and presented on a net basis in the balance sheet only when the Consolidated Company currently has a legally enforceable right to offset the recognized amounts and intends either to settle on a net basis or to realize the assets and settle the liabilities simultaneously.

Derivative Financial Instruments

The Consolidated Company holds derivative financial instruments to hedge its exposure to foreign currency risk. Embedded derivatives are separated from the host contract and accounted for separately when certain criteria are met and the host contract is not a financial asset.

Derivatives are initially measured at fair value; subsequent to initial recognition, they are measured at fair value, and any gains or losses arising from remeasurement are recognized directly in profit or loss.

(8) Inventories

Inventories are measured at the lower of cost and net realizable value. Cost includes all costs of acquisition, conversion, and other costs incurred in bringing the inventories to their present location and condition, and is determined using the weighted-average method. The cost of finished goods and work in progress includes an appropriate proportion of manufacturing overheads allocated based on normal production capacity.

Notes to the Consolidated Financial Statements (Continued)

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

(9) Investments in Associates

Associates are entities over which the Consolidated Company has significant influence, but not control or joint control, over their financial and operating policies.

Investments in associates are accounted for using the equity method. Under the equity method, investments are initially recognized at cost, including transaction costs. The carrying amount of the investment includes goodwill identified at the time of acquisition, net of any accumulated impairment losses.

The consolidated financial statements include the Consolidated Company's share of the profit or loss and other comprehensive income of associates, after adjustments are made to align the accounting policies with those of the Consolidated Company, from the date on which significant influence is obtained until the date on which significant influence ceases. When an associate's changes in equity do not arise from profit or loss or other comprehensive income and do not affect the Consolidated Company's ownership interest, such changes are recognized in capital surplus in proportion to the Consolidated Company's ownership interest.

Unrealized gains and losses resulting from transactions between the Consolidated Company and its associates are recognized only to the extent of the Consolidated Company's interest in the associates. When the Consolidated Company's share of losses of an associate equals or exceeds its interest in the associate, the Consolidated Company discontinues recognizing its share of further losses, except to the extent that it has incurred legal or constructive obligations or made payments on behalf of the associate, in which case additional losses and corresponding liabilities are recognized.

(10) Investment Property

Investment property is property held to earn rental income, capital appreciation, or both, rather than for use in the production or supply of goods or services or for administrative purposes. Investment property is initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment losses. The depreciation method, useful lives, and residual values are consistent with those applied to property, plant and equipment. Gains or losses arising from the disposal of investment property, determined as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in profit or loss.

Rental income from investment property is recognized in other income on a straight-line basis over the lease term. Lease incentives granted are recognized as an integral part of total rental income over the lease term.

Notes to the Consolidated Financial Statements (Continued)

(11) Property, Plant and Equipment

Recognition and Measurement

Items of property, plant and equipment are measured at cost (including capitalized borrowing costs) less accumulated depreciation and any accumulated impairment losses.

When significant components of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of property, plant and equipment is recognized in profit or loss.

Subsequent Costs

Subsequent expenditures are capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Consolidated Company.

Depreciation

Depreciation is calculated based on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component.

Land is not depreciated.

The estimated useful lives for the current and comparative periods are as follows:

(1) Buildings and structures 20~40 years
(2) Machinery and equipment 2~10 years
(3) Other equipment 2~15 years

The Consolidated Company reviews the depreciation methods, useful lives, and residual values at each reporting date and adjusts them if appropriate.

Reclassification to Investment Property

When property occupied by the Consolidated Company changes its use to investment property, it is reclassified as investment property at its carrying amount at the date of change in use.

(12) Leases

At inception of a contract, the Consolidated Company assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

Lessee

At the commencement date of the lease, the Consolidated Company recognizes a right-of-use asset and a lease liability. The right-of-use asset is initially measured at cost, which comprises the initial measurement of the lease liability, adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred, and an estimate of costs to dismantle and remove the underlying asset and restore the site or the underlying asset, less any lease incentives received.

Notes to the Consolidated Financial Statements (Continued)

Subsequently, the right-of-use asset is depreciated on a straight-line basis 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. In addition, the Consolidated Company periodically assesses whether the right-of-use asset is impaired and recognizes any impairment losses identified. The right-of-use asset is also adjusted for any remeasurement of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined; if not, the Consolidated Company uses its incremental borrowing rate. In general, the Consolidated Company uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise:

(1) Fixed payments, including in-substance fixed payments;
(2) Variable lease payments that depend on an index or a rate, initially measured using the index or rate at the commencement date;
(3) Amounts expected to be payable under residual value guarantees; and
(4) The exercise price of a purchase option if the Company is reasonably certain to exercise that option, and payments of penalties for terminating the lease, if the lease term reflects the Company exercising a termination option.

Subsequently, the lease liability is measured at amortized cost using the effective interest method and is remeasured when:

(1) There is a change in future lease payments arising from a change in an index or rate;
(2) There is a change in the amounts expected to be payable under a residual value guarantee;
(3) There is a change in the assessment of a purchase option;
(4) There is a change in the assessment of whether the Company will exercise an extension or termination option, resulting in a change in the lease term; or
(5) There is a modification to the lease contract.

When the lease liability is remeasured due to changes in an index or rate, residual value guarantees, or reassessment of purchase, extension, or termination options, a corresponding adjustment is made to the carrying amount of the right-of-use asset. If the carrying amount of the right-of-use asset is reduced to zero, any remaining remeasurement amount is recognized in profit or loss.

For lease modifications that decrease the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect the partial or full termination of the lease, and any difference between the remeasurement of the lease liability and the adjustment to the right-of-use asset is recognized in profit or loss.

Notes to the Consolidated Financial Statements (Continued)

The Consolidated Company presents right-of-use assets that do not meet the definition of investment property and lease liabilities as separate line items in the balance sheet.

For short-term leases and leases of low-value assets, the Consolidated Company has elected not to recognize right-of-use assets and lease liabilities. Instead, the related lease payments are recognized as expenses on a straight-line basis over the lease term.

Lessor

When the Consolidated Company acts as a lessor, it classifies each lease at the inception date as either a finance lease or an operating lease, depending on whether substantially all the risks and rewards incidental to ownership of the underlying asset are transferred. In making this assessment, the Consolidated Company considers specific indicators, including whether the lease term covers a major part of the economic life of the underlying asset.

When the Consolidated Company is an intermediate lessor in a sublease arrangement, it accounts for the head lease and the sublease separately and classifies the sublease by reference to the right-of-use asset arising from the head lease. If the head lease is a short-term lease to which the recognition exemption is applied, the sublease is classified as an operating lease.

(13) Intangible Assets

Recognition and Measurement

Goodwill arising from the acquisition of subsidiaries is measured at cost less accumulated impairment losses.

Other intangible assets, such as computer software acquired by the Consolidated Company, are measured at cost less accumulated amortization and accumulated impairment losses.

Subsequent Expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred, including internally generated goodwill and brands.

Amortization

Except for goodwill, amortization is calculated based on the cost of the asset less its estimated residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of 1 to 5 years, commencing from the date the asset is available for use.

The Consolidated Company reviews the amortization method, useful lives, and residual values of intangible assets at each reporting date and adjusts them if appropriate.

(14) Impairment of Non-financial Assets

At each reporting date, the Consolidated Company assesses whether there is any indication that the carrying amount of non-financial assets (other than inventories and deferred tax assets) may be impaired. If any such indication exists, the recoverable amount of the asset is estimated.

Notes to the Consolidated Financial Statements (Continued)

Goodwill is tested for impairment annually.

For the purpose of impairment testing, assets are grouped into the smallest identifiable group of assets that generates cash inflows largely independent of the cash inflows from other assets or groups of assets (cash-generating units).

The recoverable amount of an individual asset or a cash-generating unit is the higher of its fair value less costs of disposal and its value in use. If the recoverable amount is less than the carrying amount, an impairment loss is recognized. Impairment losses are recognized immediately in profit or loss and are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit, and then to the other assets of the unit on a pro rata basis according to their carrying amounts.

Impairment losses recognized for goodwill are not reversed. For other non-financial assets, impairment losses are reversed only to the extent that the carrying amount does not exceed the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized in prior periods.

(15) Provisions

Provisions are recognized when the Consolidated Company has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and the amount of the obligation can be reliably estimated. Provisions are discounted using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as interest expense.

The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using estimated cash flows to settle the present obligation, its carrying amount is the present value of those cash flows.

Site Restoration

Provisions are recognized for the estimated costs of dismantling, removing, and restoring leased assets to their original condition, based on the obligations arising from the Consolidated Company's leased assets. Such costs are recognized as expenses over the lease term.

(16) Revenue Recognition

Revenue from Contracts with Customers

Revenue is measured based on the consideration to which the Consolidated Company expects to be entitled in exchange for transferring goods or services. The Consolidated Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer.

The Consolidated Company manufactures electronic components and sells them to

Notes to the Consolidated Financial Statements (Continued)

manufacturers in the electronics industry. Revenue is recognized when control of the products is transferred to the customer. Transfer of control occurs when the products are delivered to the customer, the customer has full discretion over the distribution channels and pricing of the products, and there are no remaining performance obligations that could affect the customer's acceptance of the products. Delivery occurs when the products are shipped to the specified location, the risks of obsolescence and loss have been transferred to the customer, and the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Consolidated Company has objective evidence that all acceptance criteria have been satisfied.

Revenue is recognized based on the contract price net of estimated discounts. The amount of discounts is estimated based on historical experience and is recognized only to the extent that it is highly probable that a significant reversal will not occur. As of the reporting date, the expected amounts payable to customers arising from such discounts are recognized as refund liabilities. The average credit period for sales ranges from 120 to 150 days, which is consistent with industry practice; therefore, no financing component is considered.

The Consolidated Company recognizes accounts receivable when the goods are delivered, as it has an unconditional right to consideration at that point in time.

The Consolidated Company expects that, for all customer contracts, the period between the transfer of goods or services and the payment by the customer will not exceed one year. Accordingly, the Consolidated Company does not adjust the transaction price for the time value of money.

(17) Employee Benefits

Defined Contribution Plans

Obligations for contributions to defined contribution plans are recognized as expenses during the period in which employees render services.

Defined Benefit Plans

The Consolidated Company's net obligation in respect of defined benefit plans is calculated as the present value of the future benefits earned by employees for services rendered in the current or prior periods, less the fair value of plan assets.

The defined benefit obligation is calculated annually by qualified actuaries using the projected unit credit method. When the calculation results in a potential asset for the Consolidated Company, the recognized asset is limited to the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan. In determining the present value of economic benefits, any minimum funding requirements are taken into account.

Notes to the Consolidated Financial Statements (Continued)

Remeasurements of the net defined benefit liability, including actuarial gains and losses, the return on plan assets (excluding interest), and any change in the effect of the asset ceiling (excluding interest), are recognized immediately in other comprehensive income and accumulated in retained earnings. The Consolidated Company determines the net interest expense (income) on the net defined benefit liability (asset) by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual reporting period. Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When a plan amendment or curtailment occurs, the resulting changes in benefits related to past service cost or gains or losses on curtailment are recognized immediately in profit or loss. The Consolidated Company recognizes gains or losses on the settlement of defined benefit plans when the settlement occurs.

Short-term Employee Benefits

Obligations for short-term employee benefits are recognized as expenses when the related services are rendered. A liability is recognized for the amount expected to be paid if the Consolidated Company has a present legal or constructive obligation to pay this amount as a result of past services provided by employees, and the obligation can be reliably estimated.

(18) Share-based Payment Transactions

Equity-settled share-based payment arrangements are measured at the fair value at the grant date and recognized as expenses, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted based on the number of awards expected to meet the service conditions and non-market vesting conditions, and is ultimately measured based on the number of awards that meet the service conditions and non-market vesting conditions at the vesting date.

Non-vesting conditions of share-based payment arrangements are reflected in the measurement of the fair value at the grant date, and differences between expected and actual outcomes are not subsequently adjusted.

For cash-settled share appreciation rights, the fair value of the amount payable to employees is recognized as an expense, with a corresponding increase in liabilities, over the period during which the employees become unconditionally entitled to the payment. The liability is remeasured at fair value at each reporting date and at settlement date, and any changes in fair value are recognized in profit or loss.

(19) Income Taxes

Income taxes comprise current income taxes and deferred income taxes. Except for those related to business combinations or items recognized directly in equity or other comprehensive income, current income taxes and deferred income taxes are recognized in profit or loss.

The Consolidated Company has determined that the top-up tax payable under the global

Notes to the Consolidated Financial Statements (Continued)

minimum tax rules (Pillar Two) falls within the scope of IAS 12, and has applied the temporary mandatory exception for the accounting of deferred income taxes related to the top-up tax. Any top-up tax incurred is recognized as current income tax.

Current income tax includes the expected tax payable or receivable on the taxable income (or loss) for the current year, and any adjustments to tax payable or receivable in respect of prior years. It is measured as the best estimate of the amount expected to be paid or received, using the tax rates enacted or substantively enacted at the reporting date.

Deferred income tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their respective tax bases at the reporting date. Deferred income tax is not recognized for the following temporary differences:

Temporary differences arising from the initial recognition of assets or liabilities in a transaction that is not a business combination and, at the time of the transaction, (i) affects neither accounting profit nor taxable income (loss) and (ii) does not give rise to equal taxable and deductible temporary differences;
Temporary differences related to investments in subsidiaries, associates, and joint arrangements, to the extent that the Consolidated Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future; and
Taxable temporary differences arising from the initial recognition of goodwill.

Deferred income tax assets are recognized for unused tax losses, unused tax credits carried forward, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred income tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized, or reversed to the extent that it becomes probable that sufficient taxable profits will be available.

Deferred income tax is measured using the tax rates expected to apply when the temporary differences reverse, based on the tax rates enacted or substantively enacted at the reporting date.

The Consolidated Company offsets deferred income tax assets and deferred income tax liabilities only when the following conditions are met:

The Consolidated Company has a legally enforceable right to offset current income tax assets against current income tax liabilities; and
The deferred income tax assets and deferred income tax liabilities relate to income taxes levied by the same taxation authority on either:

(1) the same taxable entity; or

Notes to the Consolidated Financial Statements (Continued)

(2) different taxable entities that intend either to settle current income tax liabilities and assets on a net basis or to realize the assets and settle the liabilities simultaneously in each future period in which significant amounts of deferred income tax assets or liabilities are expected to be recovered or settled.

(20) Business Combinations

The Consolidated Company accounts for each business combination using the acquisition method. Goodwill is measured as the fair value of the consideration transferred at the acquisition date, including the amount of any non-controlling interests in the acquiree, less the net amount of the identifiable assets acquired and liabilities assumed (generally measured at fair value). If the resulting amount is negative, the Consolidated Company reassesses whether all assets acquired and liabilities assumed have been properly identified, and then recognizes the resulting gain on a bargain purchase in profit or loss.

Transaction costs related to a business combination, other than those associated with the issuance of debt or equity instruments, are recognized as expenses in profit or loss as incurred. For non-controlling interests in the acquiree that represent present ownership interests and entitle their holders to a proportionate share of the entity's net assets in the event of liquidation, the Consolidated Company measures such interests, on a transaction-by-transaction basis, either at fair value at the acquisition date or at the proportionate share of the recognized amounts of the acquiree's identifiable net assets. Other components of non-controlling interests are measured at fair value or in accordance with other measurement bases prescribed by IFRSs as endorsed by the FSC.

(21) Earnings per Share

The Consolidated Company presents basic and diluted earnings per share attributable to ordinary equity holders of the Company. Basic earnings per share is calculated by dividing profit or loss attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated by adjusting profit or loss attributable to ordinary equity holders of the Company and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Potential dilutive ordinary shares of the Consolidated Company include convertible bonds and employee stock options.

(22) Segment Information

Operating segments are components of the Consolidated Company that engage in business activities from which they may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Consolidated Company). The operating results of all segments are regularly reviewed by the Consolidated Company's chief operating decision maker to make decisions about resources to be allocated to the segments and to assess their performance. Each segment has discrete financial information available.

Notes to the Consolidated Financial Statements (Continued)

V. Primary Sources of Major Accounting Judgment, Estimate and Assumption Uncertainties

In preparing these consolidated financial statements, management is required to make judgments and estimates about the future (including climate-related risks and opportunities), which affect the application of accounting policies and the reported amounts of assets, liabilities, income, and expenses. Actual results may differ from these estimates.

Management continually reviews its estimates and underlying assumptions, which are consistent with the Consolidated Company's risk management framework and climate-related commitments. Revisions to estimates are recognized prospectively in the period in which the estimates are revised and in any future periods affected.

The following assumptions and estimation uncertainties have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The related information is as follows:

Valuation of Inventories

Inventories are measured at the lower of cost and net realizable value. The Consolidated Company evaluates inventories at the reporting date for losses due to normal shrinkage, obsolescence, or lack of marketability, and writes down inventory costs to net realizable value. Net realizable value of inventories may be significantly affected by rapid changes in the industry and the introduction of new products. For details of inventory valuation and write-downs, please refer to Note VI (4).

VI. Descriptions for Important Accounting Items

(1) Cash and Cash Equivalents

	Dec. 31, 2025	Dec. 31, 2024
Petty cash	$ 20,574	3,656
Demand deposits and checking accounts	6,704,993	7,235,401
Time deposits	5,212,324	11,419,825
Call deposits	562,000	-
Cash and cash equivalents as presented in the statement of cash flows	$ 12,499,891	18,658,882

For disclosures of interest rate risk and sensitivity analysis related to the Consolidated Company's financial assets and liabilities, please refer to Note VI (27).

Notes to the Consolidated Financial Statements (Continued)

(2) Financial Assets

1. Financial Assets at FVTPL

	Dec. 31, 2025	Dec. 31, 2024
Financial assets mandatorily measured at FVTPL:
Current:
Derivative financial assets not designated for hedging
Embedded derivatives – call options	$ -	300
Non-derivative financial assets
Listed (OTC) stock	799,422	17,716
Emerging stock market stock	20,257	28,633
Beneficiary certificates of funds	209,283	144,218
Subtotal	1,028,962	190,867
	Dec. 31, 2025	Dec. 31, 2024
Non-current:
Non-derivative financial assets
Private equity funds	$ 74,873	59,964
Overseas bonds	172,359	170,044
Subtotal	247,232	230,008
Total	$ 1,276,194	420,875

For disclosures of embedded derivatives in convertible bonds issued by the Consolidated Company, please refer to Note VI (14).

For amounts recognized in profit or loss upon remeasurement at fair value, please refer to Note VI (27).

2. Financial Assets at FVTOCI

	Dec. 31, 2025	Dec. 31, 2024
Equity instruments measured at FVTOCI:
Current:
Domestic unlisted (non-OTC) stock—AICP Technology Corporation	$ -	-
Non-current:
Domestic listed stock—Chailease Holding Company Limited	51,712	50,227
Domestic listed stock—HOTAI FINANCE CO., LTD.	29,310	28,560
Domestic unlisted (non-OTC) stock—G-sau Co.,Ltd	-	15
Domestic unlisted (non-OTC) stock—UPBEAT TECHNOLOGY Co., Ltd.	4,689	19,845
Domestic unlisted (non-OTC) stock—Phoenix VI Capital Venture Capital Co., Ltd.	120,167	87,825
Domestic unlisted (non-OTC) stock—RATIONAL PRECISION INDUSTRIAL CO., LTD.	10,000	-
Domestic unlisted (non-OTC) stock—Ying Hsi Innovation Venture Capital Corporation	12,870	-
Domestic unlisted (non-OTC) stock—Phoenix VII Capital Venture Capital Co., Ltd.	52,352	-
Total	$ 281,100	186,472

Notes to the Consolidated Financial Statements (Continued)

The Consolidated Company holds the above equity investments not for trading purposes and has designated them as financial assets at FVTOCI.

Dividend income recognized by the Consolidated Company from the above equity investments amounted to NT$4,234 thousand and NT$3,206 thousand for the years ended December 31, 2025 and 2024, respectively.

On December 18, 2024, the Consolidated Company adjusted its investment portfolio for asset allocation purposes to diversify risk and disposed of its investment in Lvxing Technology Co., Ltd., which had been designated as at FVTOCI. The fair value at disposal was NT$2,544 thousand, and the cumulative gain or loss on disposal was NT$0 thousand. For information on market risk, please refer to Note VI (27).

As of December 31, 2025 and 2024, none of the Consolidated Company’s financial assets were pledged as collateral.

(3) Notes Receivable, Accounts Receivable and Other Receivables

	Dec. 31, 2025	Dec. 31, 2024
Notes receivable	$ 880,787	693,156
Accounts receivable	13,307,506	11,951,232
Other receivables	668,619	658,664
Loss allowance	(6,467)	(6,384)
	$ 14,850,445	13,296,668

For the movement of loss allowances for notes receivable and accounts receivable as of December 31, 2025 and 2024, please refer to Note VI (27) 1.(3) Impairment Loss.

(4) Inventories

	Dec. 31, 2025	Dec. 31, 2024
Merchandise	$ 957,618	814,277
Finished goods	1,004,865	892,871
Work in progress	1,251,650	939,264
Raw materials	968,678	675,410
Goods in transit	192,117	96,674
	$ 4,374,928	3,418,496

As of December 31, 2025 and 2024, inventories of the Consolidated Company included allowance for inventory write-downs of NT$306,746 thousand and NT$287,084 thousand, respectively.

Notes to the Consolidated Financial Statements (Continued)

Details of inventory-related costs and expenses recognized by the Consolidated Company are as follows:

	2025	2024
Cost of goods sold	$ 16,413,405	14,476,339
Loss on inventory write-down and obsolescence (reversal of write-down)	36,327	(156,817)
Total	$ 16,449,732	14,319,522

As of December 31, 2025 and 2024, none of the Consolidated Company’s inventories were pledged as collateral.

(5) Investments Accounted for Using the Equity Method

Investments accounted for using the equity method by the Consolidated Company as of the reporting date are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Associate	$ 181,094	153,048

Associate

LeRain Technology Co., Ltd. issued new shares through a capital increase in December 2025. The Consolidated Company did not participate in this cash capital increase. In connection with LeRain Technology Co., Ltd.’s listing on the Innovation Board, the Consolidated Company disposed of part of its shareholding, resulting in a decrease in its ownership interest from 16.62% to 15.62%.

I-SEE VISION TECHNOLOGY INC. issued new shares on October 23, 2025. The Consolidated Company did not subscribe for its proportionate share of the capital increase amounting to NT$64,301 thousand, resulting in an increase in its ownership interest from 21.01% to 22.41%.

The Consolidated Company acquired a 24.83% equity interest in AionChip Technologies CO., LTD. for NT$88,400 thousand in cash on April 25, 2024, thereby obtaining significant influence over the investee.

The associates accounted for using the equity method by the Consolidated Company are individually immaterial. Their aggregated financial information, as included in the consolidated financial statements of the Consolidated Company, is summarized as follows:

	Dec. 31, 2025	Dec. 31, 2024
Aggregate carrying amount of interests in individually immaterial associates at the end of the period	$ 181,094	153,048

Notes to the Consolidated Financial Statements (Continued)

	2025	2024
Share attributable to the Consolidated Company:
Net loss for the period	$ (42,195)	(28,274)
Other comprehensive income	27	36
Total comprehensive income	$ (42,168)	(28,238)

Collateral

None of the investments accounted for using the equity method by the Consolidated Company were pledged as collateral.

(6) Changes in Ownership Interests in Subsidiaries

Acquisition of Additional Interests in Subsidiaries

The Consolidated Company acquired additional equity interests in Lomites Co., Ltd. for NT$1,500 thousand in cash on November 22, 2024, resulting in an increase of 0.80% in its ownership interest in Lomites Co., Ltd.

The effects of the above changes in ownership interests in subsidiaries on equity attributable to owners of the parent are as follows:

	2024
Carrying amount of non-controlling interests acquired	$ 1,978
Consideration paid to non-controlling interests	(1,500)
Capital surplus – difference between consideration paid and carrying amount of non-controlling interests	$ 478

Partial Disposal of Subsidiary without Loss of Control

The Consolidated Company disposed of a 4.37% equity interest in GENIE Precision Machining CO., LTD. on September 25, 2025, for proceeds of NT$17,985 thousand.

The effects of the above changes in ownership interests in subsidiaries on equity attributable to owners of the parent are as follows:

	2025
Carrying amount of the interest disposed of	$ (12,822)
Consideration received from non-controlling interests	17,985
	$ 5,163
Capital surplus – changes in ownership interests in subsidiaries	$ 2,508

Capital Increases of Subsidiaries without Proportionate Subscription and without Loss of Control

COMPERTUM MICROSYSTEMS INC. issued 5,500 thousand new shares through a capital increase on October 28, 2025, with total proceeds of NT$55,000 thousand. The Consolidated Company subscribed for 2,956 thousand shares for NT$29,560 thousand. Due to not subscribing in proportion to its ownership interest, the Consolidated Company's ownership interest in COMPERTUM MICROSYSTEMS INC. increased by 2.97%.

Notes to the Consolidated Financial Statements (Continued)

GOOD NEWS MEDICAL CO., LTD. issued 1,500 thousand new shares through a capital increase on October 24, 2025, with total proceeds of NT$15,000 thousand. The Consolidated Company subscribed for 577 thousand shares for NT$5,772 thousand. Due to not subscribing in proportion to its ownership interest, the Consolidated Company’s ownership interest in GOOD NEWS MEDICAL CO., LTD. increased by 3.36%.

Lomites Co., Ltd. issued 3,500 thousand new shares through a capital increase on July 24, 2025, with total proceeds of NT$35,000 thousand. The Consolidated Company subscribed for 3,490 thousand shares for NT$34,900 thousand. Due to not subscribing in proportion to its ownership interest, the Consolidated Company’s ownership interest in Lomites Co., Ltd. decreased by 0.03%.

COMPERTUM MICROSYSTEMS INC. issued 5,690 thousand new shares through a capital increase on July 31, 2024, with total proceeds of NT$56,900 thousand. The Consolidated Company subscribed for 2,264 thousand shares for NT$22,645 thousand. Due to not subscribing in proportion to its ownership interest, the Consolidated Company’s ownership interest in COMPERTUM MICROSYSTEMS INC. decreased by 0.30%.

GOOD NEWS MEDICAL CO., LTD. issued 1,000 thousand new shares through a capital increase on April 30, 2024, with total proceeds of NT$10,000 thousand. The Consolidated Company subscribed for 319 thousand shares for NT$3,192 thousand. Due to not subscribing in proportion to its ownership interest, the Consolidated Company’s ownership interest in GOOD NEWS MEDICAL CO., LTD. increased by 1.85%.

Lintes Technology Co., Ltd. issued 3,000 thousand new shares through a capital increase on March 19, 2024, with total proceeds of NT$390,000 thousand. The Consolidated Company subscribed for 996 thousand shares for NT$129,502 thousand. Due to not subscribing in proportion to its ownership interest, the Consolidated Company’s ownership interest in Lintes Technology Co., Ltd. decreased by 0.75%.

COMPERTUM MICROSYSTEMS INC. issued 460 thousand new shares through a capital increase on January 18, 2024, with total proceeds of NT$4,600 thousand. As the Consolidated Company did not subscribe for the shares, its ownership interest in COMPERTUM MICROSYSTEMS INC. decreased by 1.21%.

The effects of the above changes in ownership interests in subsidiaries on equity attributable to owners of the parent are as follows:

	2025	2024
Increase in equity interest after subsidiaries’ issuance of new shares	$ 63,443	199,956
Amount not subscribed in proportion to ownership	(70,232)	(155,339)
	$ (6,789)	44,617
Capital surplus – changes in ownership interests in subsidiaries	$ (7,023)	-

Notes to the Consolidated Financial Statements (Continued)

Partial Exercise of Conversion Rights of Subsidiaries’ Unsecured Convertible Bonds without Loss of Control

Lintes Technology Co., Ltd. issued 737 thousand new shares in 2024 as a result of bondholders exercising conversion rights, resulting in a decrease of 0.54% in the Consolidated Company’s ownership interest in Lintes Technology Co., Ltd.

The effect of the above change in ownership interest in the subsidiary on equity attributable to owners of the parent in 2024 was an increase of NT$51,218 thousand.

Forfeiture of Employee Stock Options of a Subsidiary

Lintes Technology Co., Ltd. had 6,600 restricted shares forfeited in 2025 due to employee resignations, resulting in no change (0.00%) in the Consolidated Company’s ownership interest in the subsidiary.

The effect of the above change in ownership interest in the subsidiary on equity attributable to owners of the parent in 2025 was an increase of NT$226 thousand.

Repurchase of Treasury Shares by a Subsidiary without Loss of Control

Lintes Technology Co., Ltd. repurchased 324 thousand treasury shares between April and June 2025, resulting in an increase of 0.24% in the Consolidated Company’s ownership interest in the subsidiary.

The effect of the above change in ownership interest in the subsidiary on equity attributable to owners of the parent in 2025 was a decrease of NT$10,136 thousand.

(7) Subsidiaries with Material Non-controlling Interests

The subsidiaries whose non-controlling interests are material to the Consolidated Company are as follows:

Name of Subsidiary	Principal Place of Business / Country of Incorporation	% of Ownership Interests and Voting Rights Held by Non-controlling Interests
		Dec. 31, 2025	Dec. 31, 2024
Lintes Technology Co., Ltd.	Taiwan	51.44%	51.68%

The summarized financial information of the above subsidiary is set out below. Such information is prepared in accordance with IFRSs as endorsed by the FSC and represents amounts before elimination of intercompany transactions:

Notes to the Consolidated Financial Statements (Continued)

Summarized Financial Information of Lintes Technology Co., Ltd.:

	Dec. 31, 2025	Dec. 31, 2024
Current assets	$ 2,667,159	2,763,860
Non-current assets	1,912,789	1,934,588
Current liabilities	(689,784)	(589,152)
Non-current liabilities	(357,091)	(422,807)
Less: Non-controlling interests	87,846	73,644
Equity attributable to owners of Lintes Technology Co., Ltd.	$ 3,445,227	3,612,845
Carrying amount of non-controlling interests of the Consolidated Company at the end of the period	$ 1,772,118	1,867,075
	2025	2024
---	---	---
Operating revenue	$ 1,680,388	2,243,509
Net profit (loss) for the period
Attributable to owners of Lintes Technology Co., Ltd.	$ 119,097	343,161
Attributable to non-controlling interests	$ 1,380	(46,169)
Other comprehensive income
Attributable to owners of Lintes Technology Co., Ltd.	$ (65)	38,848
Total comprehensive income
Attributable to owners of Lintes Technology Co., Ltd.	$ 119,032	382,009
Attributable to non-controlling interests	$ 1,380	(46,169)
Net profit attributable to non-controlling interests of the Consolidated Company	$ 61,375	175,712
Total comprehensive income attributable to non-controlling interests of the Consolidated Company	$ 61,250	196,004
	2025	2024
---	---	---
Net cash flows from operating activities	$ 318,574	667,263
Net cash flows from investing activities	(150,084)	(944,775)
Net cash flows from financing activities	(119,596)	523,779
Effect of exchange rate changes	(19,855)	23,317
Net increase in cash and cash equivalents	$ 29,039	269,584
Dividends paid to non-controlling interests	$ 133,143	113,293

Notes to the Consolidated Financial Statements (Continued)

(8) Property, Plant and Equipment

The changes in the cost, accumulated depreciation, and impairment losses of the Consolidated Company’s property, plant and equipment are as follows:

	Land	Buildings and structures	Machinery and equipment	Others	Construction in progress and equipment pending acceptance	Total
Cost or Deemed Cost:
Balance as of January 1, 2025	$ 669,612	3,942,172	5,599,354	8,845,756	1,846,704	20,903,598
Additions	295,337	181,913	822,379	488,293	3,188,060	4,975,982
Transfer from prepayments for equipment	3,812	-	16,466	7,177	(350)	27,105
Completion and acceptance of construction in progress and equipment pending acceptance	439,953	336,118	76,371	2,185,501	(3,037,943)	-
Disposals	-	-	(152,325)	(331,598)	-	(483,923)
Transfer to investment property	-	(12,122)	-	-	-	(12,122)
Transfer to intangible assets	-	-	-	-	(29,463)	(29,463)
Others	-	88	76,419	(76,507)	-	-
Effect of exchange rate changes	4,039	(35,781)	(55,806)	103,654	(8,796)	7,310
Balance as of December 31, 2025	$ 1,412,753	4,412,388	6,382,858	11,222,276	1,958,212	25,388,487
Balance as of January 1, 2024	$ 836,910	3,515,936	4,748,536	7,044,242	884,390	17,030,014
Additions	-	50,869	231,515	333,106	3,133,536	3,749,026
Transfer from prepayments for equipment	-	-	49,281	3,914	(10,939)	42,256
Completion and acceptance of construction in progress and equipment pending acceptance	-	224,371	520,848	1,446,114	(2,191,333)	-
Disposals	-	(3,811)	(68,484)	(273,014)	(5,662)	(350,971)
Transfer to investment property	(176,144)	-	-	-	-	(176,144)
Transfer to intangible assets	-	-	-	-	(747)	(747)
Others	-	-	(65,799)	65,799	-	-
Effect of exchange rate changes	8,846	154,807	183,457	225,595	37,459	610,164
Balance as of December 31, 2024	$ 669,612	3,942,172	5,599,354	8,845,756	1,846,704	20,903,598
Depreciation and Impairment Losses:
Balance as of January 1, 2025	$ -	776,774	2,637,815	6,498,958	-	9,913,547
Depreciation for the year	-	180,319	494,945	1,687,341	-	2,362,605
Disposals	-	-	(117,320)	(277,807)	-	(395,127)
Reclassification to investment property	-	(471)	-	-	-	(471)
Others	-	15	(989)	974	-	-
Effect of exchange rate changes	-	6,030	955	71,647	-	78,632
Balance as of December 31, 2025	$ -	962,667	3,015,406	7,981,113	-	11,959,186
Balance as of January 1, 2024	$ -	592,886	2,196,502	5,110,712	-	7,900,100
Depreciation for the year	-	163,174	431,545	1,448,339	-	2,043,058
Disposals	-	(70)	(57,706)	(222,591)	-	(280,367)
Others	-	-	(4,610)	4,615	-	5
Effect of exchange rate changes	-	20,784	72,084	157,883	-	250,751
Balance as of December 31, 2024	$ -	776,774	2,637,815	6,498,958	-	9,913,547
Carrying Amounts:
December 31, 2025	$ 1,412,753	3,449,721	3,367,452	3,241,163	1,958,212	13,429,301
December 31, 2024	$ 669,612	3,165,398	2,961,539	2,346,798	1,846,704	10,990,051

For details of property, plant and equipment pledged as collateral for borrowings and credit facilities as of December 31, 2025 and 2024, please refer to Note VIII.

Notes to the Consolidated Financial Statements (Continued)

(9) Right-of-use Assets

The changes in the cost and accumulated depreciation of right-of-use assets recognized by the Consolidated Company for leases of land, buildings and structures, and other equipment are as follows:

	Land	Buildings and structures	Other equipment	Total
Cost of Right-of-use Assets:
Balance as of January 1, 2025	$ 786,367	860,043	14,725	1,661,135
Additions	-	117,858	1,494	119,352
Reductions	-	(120,697)	(2,107)	(122,804)
Transfer from investment property	289,976	-	-	289,976
Effect of exchange rate changes	(21,555)	3,299	8	(18,248)
Balance as of December 31, 2025	$ 1,054,788	860,503	14,120	1,929,411
Balance as of January 1, 2024	$ 739,775	840,110	13,566	1,593,451
Additions	-	51,599	6,225	57,824
Reductions	-	(59,913)	(5,302)	(65,215)
Effect of exchange rate changes	46,592	28,247	236	75,075
Balance as of December 31, 2024	$ 786,367	860,043	14,725	1,661,135
Depreciation of Right-of-use Assets:
Balance as of January 1, 2025	$ 71,990	354,602	5,617	432,209
Depreciation for the period	17,058	152,172	4,562	173,792
Reductions	-	(119,351)	(2,053)	(121,404)
Transfer from investment property	18,517	-	-	18,517
Effect of exchange rate changes	(666)	2,608	82	2,024
Balance as of December 31, 2025	$ 106,899	390,031	8,208	505,138
Balance as of January 1, 2024	$ 50,299	260,194	4,245	314,738
Depreciation for the period	17,917	144,198	4,613	166,728
Reductions	-	(58,795)	(3,362)	(62,157)
Effect of exchange rate changes	3,774	9,005	121	12,900
Balance as of December 31, 2024	$ 71,990	354,602	5,617	432,209
Carrying Amounts:
December 31, 2025	$ 947,889	470,472	5,912	1,424,273
December 31, 2024	$ 714,377	505,441	9,108	1,228,926

Notes to the Consolidated Financial Statements (Continued)

(10) Investment Property

The changes in the investment property of the Consolidated Company are as follows:

	Self-owned assets		Right-of-use assets
	Land	Buildings and structures	Land	Total
Cost or Deemed Cost:
Balance as of January 1, 2025	$ 219,766	26,831	299,632	546,229
Transfer from property, plant and equipment	-	12,122	-	12,122
Transfer to right-of-use assets	-	-	(289,976)	(289,976)
Effect of exchange rate changes	-	-	(9,656)	(9,656)
Balance as of December 31, 2025	$ 219,766	38,953	-	258,719
Balance as of January 1, 2024	$ 43,622	26,831	289,528	359,981
Transfer from property, plant and equipment	176,144	-	-	176,144
Effect of exchange rate changes	-	-	10,104	10,104
Balance as of December 31, 2024	$ 219,766	26,831	299,632	546,229
Depreciation and Impairment Losses:
Balance as of January 1, 2025	$ -	5,155	15,285	20,440
Depreciation for the year	-	1,019	3,723	4,742
Transfer from property, plant and equipment	-	471	-	471
Transfer to right-of-use assets	-	-	(18,517)	(18,517)
Effect of exchange rate changes	-	-	(491)	(491)
Balance as of December 31, 2025	$ -	6,645	-	6,645
Balance as of January 1, 2024	$ -	4,272	10,712	14,984
Depreciation for the year	-	883	4,177	5,060
Effect of exchange rate changes	-	-	396	396
Balance as of December 31, 2024	$ -	5,155	15,285	20,440
Carrying Amounts:
December 31, 2025	$ 219,766	32,308	-	252,074
December 31, 2024	$ 219,766	21,676	284,347	525,789
Fair Value:
December 31, 2025				$ 290,687
December 31, 2024				$ 633,832

As of December 31, 2025 and 2024, none of the Consolidated Company's investment properties were pledged as collateral.

Notes to the Consolidated Financial Statements (Continued)

(11) Intangible Assets

The changes in the cost and accumulated amortization of the Consolidated Company’s intangible assets are as follows:

	Computer software	Others	Total
Cost:
Balance as of January 1, 2025	$ 454,546	8,366	462,912
Acquired separately	122,778	-	122,778
Transfer from equipment pending acceptance	29,463	-	29,463
Transfer from prepayments for equipment	31	-	31
Derecognition	(14,898)	-	(14,898)
Effect of exchange rate changes	2,823	31	2,854
Balance as of December 31, 2025	$ 594,743	8,397	603,140
Balance as of January 1, 2024	$ 329,274	8,222	337,496
Acquired separately	126,469	-	126,469
Transfer from equipment pending acceptance	747	-	747
Derecognition	(9,071)	-	(9,071)
Effect of exchange rate changes	7,127	144	7,271
Balance as of December 31, 2024	$ 454,546	8,366	462,912
Amortization and Impairment Losses:
Balance as of January 1, 2025	$ 237,802	7,746	245,548
Amortization for the period	68,973	2	68,975
Derecognition	(14,898)	-	(14,898)
Effect of exchange rate changes	1,308	31	1,339
Balance as of December 31, 2025	$ 293,185	7,779	300,964
Balance as of January 1, 2024	$ 179,783	7,600	187,383
Amortization for the period	64,139	3	64,142
Derecognition	(9,071)	-	(9,071)
Effect of exchange rate changes	2,951	143	3,094
Balance as of December 31, 2024	$ 237,802	7,746	245,548
Carrying Amounts:
December 31, 2025	$ 301,558	618	302,176
December 31, 2024	$ 216,744	620	217,364

Notes to the Consolidated Financial Statements (Continued)

(12) Other Financial Assets

Details of other financial assets of the Consolidated Company are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Other financial assets – current
Time deposits	$ 89,934	1,560
Other financial assets – non-current
Time deposits	$ 157,360	-

For details of pledged other financial assets as of December 31, 2025 and 2024, please refer to Note VIII.

(13) Short-term Borrowings

Details, terms, and conditions of short-term borrowings of the Consolidated Company are as follows:

	Dec. 31, 2025
	Currency	Interest rate range	Maturity year	Amount
Bank borrowings – unsecured	NTD	1.98%	2026	$ 5,000
Bank borrowings – unsecured	USD	4.90%~5.01%	2026	220,010
Total				$ 225,010
Unused credit facilities				$ 4,306,480
	Dec. 31, 2024
---	---	---	---	---
	Currency	Interest rate range	Maturity year	Amount
Bank borrowings – unsecured	NTD	1.88%~2.22%	2025	$ 3,765,000
Unused credit facilities				$ 3,985,039

For information on the Consolidated Company's exposure to interest rate risk and foreign currency risk, please refer to Note VI (27). For details of assets pledged as collateral for bank borrowings and credit facilities, please refer to Note VIII, and for information on promissory notes issued in connection with borrowings and financing facilities, please refer to Note IX.

Notes to the Consolidated Financial Statements (Continued)

(14) Bonds Payable

Information on unsecured convertible bonds issued by the Consolidated Company is as follows:

	Dec. 31, 2025	Dec. 31, 2024
Total amount of convertible bonds issued	$ 300,000	1,600,000
Cumulative amount converted	-	(1,300,000)
Unamortized discount on bonds payable	(5,722)	(11,335)
Ending balance of bonds payable	$ 294,278	288,665
Embedded derivatives – call options (presented as financial assets at FVTPL)	$ -	300
Equity component – conversion options (presented under changes in equity of subsidiaries accounted for using the equity method and non-controlling interests)	$ 59,063	59,063
	2025	2024
Loss on valuation of embedded derivatives – call options (presented under other gains and losses)	$ (300)	(194)
Interest expense	$ 5,613	12,034

The Company's second domestic unsecured convertible bonds

(1) Issuance Details

On March 9, 2023, the Company issued 10,000 zero percent coupon, three-year unsecured convertible bonds, which will be repaid at maturity in cash based on the face value of the bonds.

The conversion price was initially set at NT$862.1 per share at issuance. If any adjustments to the conversion price occur according to the terms provided in the issuance related to the Company's common shares, the conversion price is adjusted accordingly. These bonds do not have reset clauses.

The right to redeem the bonds for cash at face value applies if one of the following conditions is met:

A. From the day after three months following the issuance until forty days before the end of the issuance period, if the closing price of the Company's common stock on the Taiwan Stock Exchange exceeds the conversion price of the bonds by at least 30% for thirty consecutive trading days.

B. From the day after three months following the issuance until forty days before the end of the issuance period, if the outstanding balance of the bonds is less than 10% of the original total amount issued.

Notes to the Consolidated Financial Statements (Continued)

(2) Conversion Details

In 2024, bondholders exercised conversion rights on 8,819 units of the Company’s Second Unsecured Domestic 3-Year Convertible Bonds, with a total carrying amount of NT$856,386 thousand at the time of conversion. The net change in capital surplus resulting from the bond conversion during the period was NT$843,563 thousand, while the amount converted into capital stock was NT$10,626 thousand. For details of the capital stock conversion, please refer to Note VI (21).

As of July 23, 2024, the entire issuance of the Company’s Second Unsecured Domestic 3-Year Convertible Bonds had been fully converted.

Second Unsecured Domestic Convertible Bonds of Subsidiary Lintes Technology Co., Ltd.

(1) Issuance Details

On January 18, 2024, the subsidiary Lintes Technology Co., Ltd. issued 3,000 units of Second Unsecured Domestic 3-Year Convertible Bonds with a zero coupon rate. The bonds will be redeemed in full at face value in cash upon maturity.

The initial conversion price was set at NT$168 per share. In the event of events requiring adjustment to the conversion price per the bond issuance terms, the conversion price shall be adjusted based on the formula provided in the issuance terms. As of December 31, 2025, the adjusted conversion price was NT$157.1 per share.

The redemption clause allows Lintes Technology Co., Ltd. to redeem all outstanding bonds at face value in cash under any of the following conditions:

A. From the day following three months after the issuance date to 40 days before maturity, if the closing price of Lintes Technology Co., Ltd.’s common stock on the Taiwan Stock Exchange exceeds the then-current conversion price by 30% or more for 30 consecutive trading days.

B. From the day following three months after the issuance date to 40 days before maturity, if the outstanding balance of the bonds falls below 10% of the original total issued amount.

The first domestic unsecured convertible corporate bonds of the subsidiary, Lintes Technology Co., Ltd.

(1) Issuance Details

The subsidiary, Lintes Technology Co., Ltd., issued 3,000 domestic first unsecured convertible corporate bonds with a coupon rate of 0% on January 19, 2022. These bonds are due for a one-time cash repayment at maturity according to the bond par value.

The conversion price was set at NT$123.4 per share at issuance. When there are adjustments to the ordinary shares of the subsidiary, Lintes Technology Co., Ltd., that meet the terms of issuance, the conversion price is adjusted according to the formula specified in the terms. This bond does not have a reset clause.

Notes to the Consolidated Financial Statements (Continued)

If any of the following conditions regarding the redemption rights are met, the subsidiary, Lintes Technology Co., Ltd., will recover the outstanding bonds in cash at face value:

A. From the day after three months after the issuance of the bond until forty days before the end of the issuance period, if the closing price of the common shares of the subsidiary, Lintes Technology Co., Ltd., on the Taiwan Stock Exchange, exceeds the current conversion price of the bond by 30% (inclusive) or more for thirty consecutive business days.

B. From the day after three months after the issuance of the bond until forty days before the end of the issuance period, if the outstanding balance of the bond is less than 10% of the original total issuance amount.

(2) Conversion details

As of December 31, 2024, holders of the First Unsecured Domestic 3-Year Convertible Bonds of Lintes Technology Co., Ltd. had exercised conversion rights, resulting in the issuance of 2,526 thousand shares of common stock of Lintes Technology Co., Ltd.

As of July 12, 2024, all conversion rights under the First Unsecured Domestic Convertible Bonds of Lintes Technology Co., Ltd. had been fully exercised.

(15) Lease liabilities

The book values of the lease liabilities of the Consolidated Company are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Current	$ 156,265	136,656
Non-current	$ 358,762	413,844

For the maturity analysis, please refer to Note VI (27).

The amounts recognized in profit or loss are as follows:

	2025	2024
Interest expense for lease liabilities	$ 29,407	33,870
Changes in lease payments not included in the measurement of lease liabilities	$ 7,157	7,698
Income from the sublease of right-of-use assets	$ 39,710	37,715
Expenses for short-term leases	$ 5,197	5,051
Cost of low-value leased assets (excluding low-value leases under short-term leases)	$ 393	1,065

The amounts recognized in the Statement of Cash Flows are as follows:

	2025	2024
Total cash outflow from leases	$ 196,491	188,771

Notes to the Consolidated Financial Statements (Continued)

Lease of land, premises and buildings

The Consolidated Company leases land, premises and buildings for plant, office space and staff quarters. The lease term of the plant and office space is usually one to ten years, and the lease term of the staff quarters is three to eight years. Part of the lease includes an option to extend the lease at the end of the lease term. In cases where it is not reasonably determined to exercise an optional extension of lease term, the relevant benefits for the period covered by the option are not included in the lease liabilities.

The Consolidated Company is a sublease of right-of-use assets by business lease.

Other leases

The leasing period of machines and other equipment leased by the Consolidated Company shall be two to six years. In addition, the lease term of some lease contracts of the Consolidated Company is one year, and these leases are short-term leases. The Consolidated Company chooses to apply the exemption of relevant right-of-use assets and lease liabilities.

(16) Refund liabilities - current

Refund liabilities - current	Dec. 31, 2025	Dec. 31, 2024
	$ 626,736	548,478

The refund liabilities are mainly the prepayments to customers for the sales discount and defects of electronic components.

(17) Provision for liabilities

Provision for liabilities - non-current	Dec. 31, 2025	Dec. 31, 2024
Employee benefits	$ 43,187	38,516
Decommissioning and restoration	64,019	34,581
Total	$ 107,206	73,097

Employee benefits are estimated under the Consolidated Company’s defined benefit plan. Please refer to Note VI (19).

(18) Operating lease

The Consolidated Company leases its investment property, which is classified as an operating lease because almost all risks and rewards belonging to the ownership of the underlying asset have not been transferred. Please refer to Note VI (10) for details of the investment property. The maturity analysis of lease payments is presented in the following table for the total undiscounted lease payments to be received after the reporting date:

	Dec. 31, 2025	Dec. 31, 2024
Not more than 1 year	$ 1,565	1,369
1-2 years	402	900
2-3 years	-	75
Total undiscounted lease payment	$ 1,967	2,344

Notes to the Consolidated Financial Statements (Continued)

Rental income generated from investment property amounted to NT$1,638 thousand and NT$1,127 thousand for the years ended December 31, 2025 and 2024, respectively. Direct operating expenses (including repairs and maintenance) incurred for the investment property that generated rental income during the current period amounted to NT$1,354 thousand and NT$753 thousand for the years ended December 31, 2025 and 2024, respectively.

(19) Employee Benefits

Defined Benefit Plans

The reconciliation of the present value of the defined benefit obligation and the fair value of plan assets of the Company is as follows:

	Dec. 31, 2025	Dec. 31, 2024
Present value of defined benefit obligation	$ 89,118	79,665
Fair value of plan assets	(45,931)	(41,149)
Net defined benefit liability	$ 43,187	38,516

The Company contributes to a defined benefit plan that is deposited in a labor pension reserve account with the Bank of Taiwan. Pension benefits for each employee under the Labor Standards Act are calculated based on the number of service years and the average salary of the last six months prior to retirement.

(1) Composition of Plan Assets

The pension fund contributed by the Company in accordance with the Labor Standards Act is managed by the Bureau of Labor Funds of the Ministry of Labor. In accordance with the "Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund," the minimum annual return distributed from the fund shall not be less than the return calculated based on the two-year time deposit interest rate of local banks. As of the reporting date, the balance of the Company's labor pension reserve account with the Bank of Taiwan amounted to NT$45,931 thousand. Information on the utilization of the labor pension fund assets, including the rate of return and asset allocation, is available on the website of the Bureau of Labor Funds, Ministry of Labor.

(2) Changes in the Present Value of the Defined Benefit Obligation

The changes in the present value of the defined benefit obligation for the years ended December 31, 2025 and 2024 are as follows:

	2025	2024
Defined benefit obligation as of January 1	$ 79,665	79,676
Current service cost and interest	1,515	1,241
Remeasurements of the net defined benefit liability (asset)	7,938	(1,252)
Defined benefit obligation as of December 31	$ 89,118	79,665

Notes to the Consolidated Financial Statements (Continued)

(3) Changes in the Fair Value of Plan Assets

The changes in the fair value of plan assets under the defined benefit plan for the years ended December 31, 2025 and 2024 are as follows:

	2025	2024
Fair value of plan assets as of January 1	$ 41,149	36,142
Interest income	670	431
Remeasurements of the net defined benefit liability (asset)	2,802	3,327
Contributions paid into the plan	1,310	1,249
Fair value of plan assets as of December 31	$ 45,931	41,149

(4) Expenses Recognized in Profit or Loss

The expenses recognized in profit or loss by the Company for the years ended December 31, 2025 and 2024 are as follows:

	2025	2024
Current service cost	$ 220	295
Net interest on the net defined benefit liability	625	515
	$ 845	810
Operating cost	$ 72	73
Selling expenses	374	350
Administrative expenses	264	261
Research and development expenses	135	126
	$ 845	810

(5) Remeasurements of the Net Defined Benefit Liability (Asset) Recognized in Other Comprehensive Income

The accumulated remeasurements of the net defined benefit liability (asset) recognized in other comprehensive income for the years ended December 31, 2025 and 2024 are as follows:

	2025	2024
Accumulated balance as of January 1	$ 3,225	(1,354)
Recognized during the period	(5,136)	4,579
Accumulated balance as of December 31	$ (1,911)	3,225

(6) Actuarial Assumptions

The principal actuarial assumptions used to determine the present value of the defined benefit obligation at the end of the reporting period are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Discount rate	1.35%	1.65%
Future salary increases	2.00%	2.00%

Notes to the Consolidated Financial Statements (Continued)

The Company expects to contribute NT$1,402 thousand and NT$1,258 thousand to the defined benefit plan within one year after the reporting dates of 2025 and 2024, respectively.

The weighted average duration of the defined benefit plan is 8 years as of 2025.

(7) Sensitivity Analysis

The impact of changes in key actuarial assumptions on the present value of the defined benefit obligation as of December 31, 2025 and 2024 is as follows:

	Impact on defined benefit obligation
	Increase by 0.25%	Decrease by 0.25%
December 31, 2025
Discount rate	$ (1,862)	1,923
Future salary increases	1,906	(1,855)
December 31, 2024
Discount rate	(1,692)	1,748
Future salary increases	1,738	(1,691)

The above sensitivity analysis is based on a change in one assumption while holding other assumptions constant. In practice, changes in many assumptions may be interrelated. The sensitivity analysis is consistent with the method used to calculate the net pension liability in the balance sheet.

The methods and assumptions used in preparing the sensitivity analysis are consistent with those used in the prior period.

Defined Contribution Plans

The Consolidated Company’s defined contribution plan is implemented in accordance with the Labor Pension Act, under which contributions are made at a rate of 6% of each employee’s monthly salary to the individual labor pension accounts with the Bureau of Labor Insurance. Under this plan, once the Consolidated Company makes fixed contributions to the Bureau of Labor Insurance, it has no further legal or constructive obligation to make additional payments.

For the years ended December 31, 2025 and 2024, pension expenses under the defined contribution plan amounted to NT$17,297 thousand and NT$17,233 thousand, respectively, which have been contributed to the Bureau of Labor Insurance.

For subsidiaries in Mainland China, contributions to pension insurance are made in accordance with the pension insurance system stipulated by the government of the People’s Republic of China. The contributions are made monthly at a specified percentage of employees’ total salaries, with rates varying depending on employees’ household registration status, and are deposited into individual employee accounts. Employees’

Notes to the Consolidated Financial Statements (Continued)

pensions are managed and administered by the government. Apart from monthly contributions, the relevant subsidiaries have no further obligations. For the years ended December 31, 2025 and 2024, pension expenses under this scheme amounted to NT$529,746 thousand and NT$423,487 thousand, respectively.

Details of Employee Benefit Liabilities of the Consolidated Company

	Dec. 31, 2025	Dec. 31, 2024
Accrued compensated absences	$ 39,505	34,018
(20) Income Taxes
1. Details of Income Tax Expense
	2025	2024
Current income tax expense:
Current tax	$ 2,083,134	2,268,626
Global minimum tax	28,767	15,886
Surtax on undistributed earnings	230,979	90,620
Adjustments to current income tax of prior periods	(30,512)	(27,743)
	2,312,368	2,347,389
Deferred income tax expense:
Origination and reversal of temporary differences	(68,362)	-
Other deferred income tax expense	-	121,677
Changes in income tax rates	-	19,241
Adjustments for prior years	(179)	(519)
	(68,541)	140,399
Income tax expense	$ 2,243,827	2,487,788

The details of income tax expense (benefit) recognized in other comprehensive income are as follows:

	2025	2024
Items that will not be reclassified to profit or loss:
Remeasurements of defined benefit plans	$ (1,027)	916
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translation of foreign operations	$ 183	9,858

Notes to the Consolidated Financial Statements (Continued)

The reconciliation between income tax expense (benefit) and profit before tax of the Consolidated Company for the years ended December 31, 2025 and 2024 is as follows:

	2025	2024
Profit before tax	$ 10,190,909	11,868,825
Income tax calculated based on statutory tax rates	3,069,259	3,660,733
Current income tax related to global minimum tax	28,767	15,886
Adjustments in accordance with tax regulations of various jurisdictions	(1,051,519)	(1,246,519)
Changes in income tax rates	-	19,241
Changes in unrecognized temporary differences	7,451	(19,173)
Adjustments to income tax expense of prior periods	(30,691)	(28,262)
Surtax on undistributed earnings	230,979	90,620
Others	(10,419)	(4,738)
Income tax expense (benefit)	$ 2,243,827	2,487,788

2. Deferred Tax Assets and Liabilities

(1) Unrecognized Deferred Tax Assets

The Consolidated Company has not recognized deferred tax assets for the following items:

Inventory write-downs and obsolescence losses
Tax losses
Right-of-use assets

Tax losses may be carried forward and deducted from taxable income within ten years as approved by the tax authorities in accordance with the Income Tax Act. These items have not been recognized as deferred tax assets because it is not probable that sufficient taxable profits will be available in the future against which the temporary differences can be utilized.

For domestic subsidiaries, tax losses approved by the tax authorities may be carried forward for ten years to offset future taxable income. As of December 31, 2025, the unused tax losses for which no deferred tax assets have been recognized are as follows:

Loss Year	Unused Losses (NT$ thousand)	Expiry Year
2019	$ 519	2029
2020	30,583	2030
2021	48,878	2031
2022	64,487	2032
2023	95,588	2033
2024	192,508	2034
2025	106,101	2035
	$ 538,664

Notes to the Consolidated Financial Statements (Continued)

(2) Recognized Deferred Tax Assets

	Dec. 31, 2025	Dec. 31, 2024
Inventory write-downs and obsolescence losses	$ 42,255	42,059
Unfunded pension expenses	22	115
Impairment losses on property, plant and equipment and idle assets	44	44
Refund liabilities	125,348	109,697
Unrealized foreign exchange losses	70	55
Accrued expenses	71,205	54,882
Remeasurements of defined benefit plans	8,997	7,970
Unrealized valuation losses on financial assets	-	4,426
Lease liabilities	85,374	87,143
Expected credit losses	107	49
Deferred tax assets	$ 333,422	306,440

(3) Recognized Deferred Tax Liabilities

	Dec. 31, 2025	Dec. 31, 2024
Unrealized foreign exchange gains	$ 64,381	72,182
Investment income recognized under the equity method	41,065	109,215
Unrealized valuation gains on financial assets	34,452	-
Right-of-use assets	78,792	81,005
Exchange differences on translation of foreign operations	7,305	7,122
Deferred tax liabilities	$ 225,995	269,524

Income Tax Assessment

The profit-seeking enterprise income tax returns of the Company and domestic subsidiaries COMPERTUM MICROSYSTEMS INC., GOOD NEWS MEDICAL CO., LTD., Lomites Co., Ltd., Lintes Technology Co., Ltd., and GENIE Precision Machining CO., LTD. have been assessed and approved by the tax authorities up to the year 2023.

Global Minimum Tax

The Consolidated Company recognizes the supplemental tax as current income tax when it is actually incurred, while the deferred tax accounting treatment related to the supplemental tax is subject to a temporary mandatory exemption.

The Consolidated Company's operations in Germany, Vietnam, Hong Kong, and Thailand are subject to the Global Minimum Tax regulations. A subsidiary operating in Vietnam received additional tax incentives, resulting in an effective tax rate below 15%, and a

Notes to the Consolidated Financial Statements (Continued)

subsidiary operating in Hong Kong had tax-exempt income, resulting in an effective tax rate of 0%. Consequently, additional current income tax is expected to be paid. As of December 31, 2025, the amount of current income tax recognized in relation to the supplemental tax was NT$28,767 thousand.

(21) Capital and Other Equity

As of December 31, 2025 and 2024, the Company’s authorized capital was NT$1,550,000 thousand, with a par value of NT$10 per share, and the issued capital were NT$1,125,347 thousand.

During the period from January 1 to December 31, 2024, the Company issued 1,063 thousand new shares due to the exercise of conversion rights by holders of convertible bonds. On August 9, 2024, the Board of Directors approved that the base date for issuing new common shares was set as August 9, 2024, and the statutory registration process was completed on August 30, 2024.

In 2023, the Company issued 142 thousand new shares due to the exercise of conversion rights by holders of convertible bonds. As the statutory registration procedures had not yet been completed, the shares were temporarily recorded under “Bond Conversion Entitlement Certificates” in the amount of NT$1,423 thousand. The registration was completed in April 2024.

1. Capital surplus

The components of the Company’s capital surplus are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Premium of issued shares	$ 6,951,216	6,951,216
Convertible bond conversion premium	2,225,010	2,225,010
Treasury stock transactions	423	423
Change in the net value of the stock of subsidiaries and associates accounted for using the equity method	606,581	613,166
Employee stock options	79,409	40,330
Expired subscription rights	805	805
	$ 9,863,444	9,830,950

In accordance with the Companies Act, capital surplus are required to cover losses first before new shares or cash can be issued in proportion to the shareholders’ original shares. Realized capital surplus referred to in the preceding paragraph include premiums from the issuance of shares in excess of par value and proceeds from gifts received. In accordance with the Regulations Governing the Issuer’s Offerings and Issuance of Marketable Securities, the aggregate amount of capital surplus that may be capitalized each year shall not exceed 10% of the paid-in capital.

Notes to the Consolidated Financial Statements (Continued)

2. Retained earnings

In accordance with the Company's Articles of Incorporation, after the final settlement of each year’s earnings, the Company shall first complete tax contributions, make up for prior years’ deficits, and set aside 10% as a legal reserve, except when the legal reserve has reached the total capital level. Subsequently, according to the laws, the special reserve may be set aside or reversed; if there are any profits remaining, along with accumulated undistributed profits, the board of directors will prepare a profit distribution proposal for resolution at the shareholder's meeting. The distribution of shareholder dividends must not be less than 20% of the net amount of the year's after-tax profits after legally mandated profit reserves have been deducted.

The Company will take into account the environment and growth of the Company and the distribution of earnings should take into account the Company’s future capital expenditure budget and capital requirements, and pay cash dividends of not less than 10% of the dividends distributed in the current year.

(1) Legal reserve

If the Company has no deficit, it may, by resolution of the shareholders in general meeting, issue new shares or cash out of the legal reserve to the extent that such reserve exceeds 25% of the paid-in capital.

(2) Special reserve

When the Company distributes the distributable profit, the net decrease in other equity items occurring in the year is added to the undistributed profit of the current period along with other items beyond the net profit after tax. A special reserve is set aside from the undistributed profit of the previous period. For accumulated decrease in other equity items of previous periods, an equal amount of special reserve shall be set aside from the undistributed profit of previous periods and cannot be distributed. When there is a reversal of other decreases in equity, profits can be distributed for the reversed part.

(3) Earnings distribution

On June 13, 2025 and June 13, 2024, the Company’s shareholders resolved at their annual general meetings to approve the appropriation of earnings for the fiscal years 2024 and 2023. The dividends allocated to owners were as follows:

	2024		2023
	Payout ratio (NT$)	Amount	Payout ratio (NT$)	Amount
Distributed to the holders of ordinary shares:
Cash	$ 41.50	4,670,190	26.00	2,898,275

Notes to the Consolidated Financial Statements (Continued)

The Company’s appropriation of earnings for 2025 was proposed by the Board of Directors on March 11, 2026. The amounts of dividends to be distributed to owners are as follows:

2025
Payout ratio
(NT$)	Amount
Distributed to the holders of ordinary shares:
Cash	$ 35.00	3,923,669

Information regarding the resolutions passed by the Board of Directors and the shareholders’ meeting on earnings distribution can be found on the "Market Observation Post System (MOPS)."

Treasury stock

For the year ended December 31, 2025, the Company repurchased treasury stock in the aggregate amount of NT$676,152 thousand, as necessary for transfer to employees in accordance with Article 28-2 of the Securities and Exchange Act. As of December 31, 2025, the total shares of treasury stock not yet cancelled amounted to 601 thousand shares.

In accordance with the Securities and Exchange Act, shares of treasury stock held by the Company may not be pledged and are not entitled to shareholders’ rights prior to transfer.

Other equity

	Exchange differences on translation of foreign operations	Unrealized gain (loss) on financial assets measured at FVTOCI	Unearned compensation	Total
Balance on January 1, 2025	$ 99,878	(18,977)	(2,482)	78,419
Exchange differences arising from the translation of the net assets of foreign operations	(101,364)	-	-	(101,364)
Unrealized gains from financial assets measured at FVTOCI	-	25,035	-	25,035
Changes in ownership interests in subsidiaries	-	-	2,112	2,112
Balance on December 31, 2025	$ (1,486)	6,058	(370)	4,202
Balance on January 1, 2024	$ (769,007)	(15,814)	(6,162)	(790,983)
Exchange differences arising from the translation of the net assets of foreign operations	868,885	-	-	868,885
Unrealized losses on financial assets measured at fair value through other comprehensive income	-	(3,163)	-	(3,163)
Changes in ownership interests in subsidiaries	-	-	3,680	3,680
Balance on December 31, 2024	$ 99,878	(18,977)	(2,482)	78,419

Notes to the Consolidated Financial Statements (Continued)

(22) Share-based Payment

The Consolidated Company has the following share-based payment transactions:

	Transfer of treasury shares to employees	Cash capital increase reserved for employee stock options	Restricted stock for employees
	Lotes Co., Ltd.	Lintes Technology Co., Ltd.	Lintes Technology Co., Ltd.
Date of grant	Dec. 5, 2025	Mar. 19, 2024	Aug. 25, 2023
Number of grants	289 thousand shares	263 thousand shares	358 thousand shares
Granted to	Current employees of the Consolidated Company	Current employees of the subsidiary	Eligible employees of the subsidiary
Vesting conditions	Immediate vesting	Immediate vesting	From the grant date to 6, 18, and 30 months of continuous employment, and upon achieving individual performance metrics or corporate operational goals set by the company.
Fair value at the date of grant	$144.95	$181.34	$69.61

Transfer of treasury shares to employees

For the year ended December 31, 2025, the Company recognized compensation cost arising from the transfer of treasury shares to employees amounting to NT$40,054 thousand.

Cash capital increase reserved for employee subscription

For the year ended December 31, 2025, Lintes Technology Co., Ltd. recognized NT$13,508 thousand in employee compensation costs for share-based payments arising from cash capital increases reserved for employee subscriptions.

Restricted stock for employees

On June 15, 2023, the shareholder meeting of Lintes Technology Co., Ltd. (Lintes Technology) resolved to issue restricted stock for employees, with August 25, 2023, as the base date for the capital increase (grant date). A total of 358 thousand shares were issued. The rights to the shares allocated to employees before fulfilling the vesting conditions are restricted, including prohibitions against selling, pledging, transferring, gifting to others, creating any encumbrance, or disposing of in any other manner. Other rights include, but are not limited to, entitlement to dividends, bonuses, statutory reserves, and capital reserves rights, as well as rights to subscribe to new shares in a cash capital increase, identical to those of the company's already issued ordinary shares.

If employees fail to meet vesting conditions, the restricted shares of Lintes Technology Co., Ltd. granted to such employees will be fully reclaimed or repurchased and subsequently canceled.

Notes to the Consolidated Financial Statements (Continued)

For the years ended December 31, 2025 and 2024, the compensation cost recognized due to the forfeiture and cancellation of restricted employee shares was NT$4,359 thousand and NT$11,923 thousand, respectively.

(23) Earnings per share

The calculation of basic earnings per share and diluted earnings per share of the Consolidated Company is as follows:

	2025	2024
Basic earnings per share:
Net profit attributable to the Company in the year	$ 7,865,999	9,276,952
Weighted average shares outstanding (1,000 shares)	112,104	112,082
Basic earnings per share	$ 70.17	82.77
Diluted earnings per share:
Net profit attributable to the Company in the year	$ 7,865,999	9,276,952
Dilutive potential ordinary shares:
Convertible bond	-	4,917
Net income attributable to equity holders of the Company’s common stock (adjusted for the effect of dilutive potential common stock)	$ 7,865,999	9,281,869
Weighted average shares outstanding (1,000 shares)	112,104	112,082
Dilutive potential ordinary shares:
Employee compensation	174	146
Convertible bond	-	516
Weighted average common shares outstanding (adjusted for the effect of dilutive potential common stock)	112,278	112,744
Diluted earnings per share	$ 70.06	82.33

(24) Revenue from Contracts with Customers

For disclosures of revenue from major products and major geographical markets, please refer to Note XIV (3) and (4).
Contract balances

	Dec. 31, 2025	Dec. 31, 2024	113.1.1
Contract liabilities	$ 26,435	29,134	30,617

The opening balances of contract liabilities as of January 1, 2025 and 2024, recognized as revenue for the years ended December 31, 2025 and 2024, amounted to NT$18,569 thousand and NT$21,948 thousand, respectively.

Notes to the Consolidated Financial Statements (Continued)

(25) Non-operating Income and Expenses

Interest Income

Details of interest income of the Consolidated Company are as follows:

	2025	2024
Bank deposits	$ 356,690	555,287
Bonds	9,263	-
Others	7,108	1,961
	$ 373,061	557,248

Other income

The details of other income of the Consolidated Company are as follows:

	2025	2024
Income from molding	$ 152,310	128,890
Income from compensation	13,702	6,132
Income from rentals	42,978	41,625
Income from subsidies	20,349	16,665
Dividend income	6,921	3,520
Others	179,526	150,729
	$ 415,786	347,561

Other gains and losses

The details of other gains and losses of the Consolidated Company are as follows:

	2025	2024
Foreign exchange gain (loss)	$ (946,099)	910,021
Net profit (loss) from financial assets measured at FVTPL:
Derivatives:
Embedded derivative	(300)	(194)
Non-derivatives
Stock	176,878	(6,213)
Private equity funds	4,910	253
Beneficiary certificates	(4,926)	(3,641)
Foreign bonds	10,285	(22,810)
Gain (loss) on disposal of property, plant and equipment	(32,653)	(20,899)
Lease modification interest	58	71
Gain on disposal of investments	2,002	-
Other	(41,962)	(24,677)
Total	$ (831,807)	831,911

Notes to the Consolidated Financial Statements (Continued)

4. Financial costs

The details of the financial costs of the Consolidated Company are as follows:

	2025	2024
Bank loans	$ 31,125	38,056
Lease liabilities	29,407	33,870
Conversion of corporate bonds	5,613	12,034
Other	2,200	2,400
	$ 68,345	86,360

(26) Compensation to Employees and Directors

On June 13, 2025, the Company’s shareholders resolved to amend the Articles of Incorporation. According to the amended provisions, if the Company has profits in a given fiscal year, no less than 2% shall be appropriated as employees’ compensation (of which no less than 20% shall be allocated to rank-and-file employees) and no more than 2% as directors’ compensation. However, if the Company has accumulated losses, the amount required to cover such losses shall be reserved first. The recipients of employees’ compensation, in the form of shares or cash, include qualifying subordinate employees. According to the previous Articles of Incorporation, if the Company had profits in a given fiscal year, no less than 2% was to be appropriated as employees’ compensation and no more than 3% as directors’ compensation. However, if the Company had accumulated losses, the amount required to cover such losses had to be reserved first, and then employees’ and directors’ compensation would be appropriated according to the aforementioned ratios. The recipients of employees’ compensation, in the form of shares or cash, could include employees of qualifying controlling or subordinate companies.

For the years ended December 31, 2025 and 2024, the Company accrued employee compensation of NT$191,000 thousand (including NT$38,200 thousand for non-executive employees) and NT$220,000 thousand, respectively, and director compensation of NT$8,000 thousand and NT$4,480 thousand, respectively. Such amounts were estimated based on the Company’s profit before tax for the respective periods, before deduction of employee and director compensation, multiplied by the distribution percentages stipulated in the Company’s Articles of Incorporation, and were recognized as cost of sales or operating expenses for the respective periods. If the actual distribution resolved in the following year differs from the estimated amounts, such differences are accounted for as changes in accounting estimates and recognized in the following year’s profit or loss.

If the actual amounts resolved in the following year differ from the estimated amounts, such differences are accounted for as changes in accounting estimates and recognized in profit or loss in the following year. There was no difference between the amount of employee compensation resolved by the Board of Directors and the amount estimated in the 2024

Notes to the Consolidated Financial Statements (Continued)

consolidated financial statements. For 2024, the amount of director compensation resolved by the Board of Directors differed from the estimated amount by NT$1,020 thousand. The Company accounted for the difference as a change in estimate and recognized it in the profit or loss of 2025.

(27) Information on Financial Instruments and Fair Value

Credit risk

(1) Credit risk exposure

The carrying amount of financial assets represents the maximum exposure to credit risk. The maximum exposure amounts as of December 31, 2025 and 2024 were NT$27,749,415 thousand, NT$32,121,938 thousand, and NT$30,817,719 thousand, respectively.

(2) Credit risk concentration risk

In order to reduce the credit risk of accounts receivable, the Consolidated Company continually evaluates the financial position of its customers and adjusts the terms of transactions between them if necessary. As of December 31, 2025 and 2024, the Consolidated Company had five and seven customers, respectively, whose individual account receivable balances exceeded 5% of total accounts receivable. The Consolidated Company regularly assesses the recoverability of these receivables and recognizes allowance for credit losses as needed. Total losses remain within management's expectations.

(3) The Consolidated Company applies the simplified approach to estimate expected credit losses on all notes receivable and accounts receivable, which is to measure expected credit losses over the life of the notes and accounts receivable, and for this purpose, the notes and accounts receivable are grouped by common credit risk characteristics that represent the ability of customers to pay all amounts due under contractual terms and are included in forward-looking information. The expected credit losses on the Consolidated Company's notes and accounts receivable are analyzed as follows:

	Dec. 31, 2025
	Book value of notes and accounts receivable	Weighted average expected credit loss rate	Expected credit loss in the duration of provision
Not past due	$ 13,811,958	0.00%	162
1-60 days past due	345,749	0.11%	384
61-120 days past due	22,130	11.95%	2,645
121-180 days past due	5,805	27.18%	1,578
181-270 days past due	1,757	36.03%	633
More than 271 days past due	894	91.61%	819
	$ 14,188,293		6,221

Notes to the Consolidated Financial Statements (Continued)

	Dec. 31, 2024
	Book value of notes and accounts receivable	Weighted average expected credit loss rate	Expected credit loss in the duration of provision
Not past due	$ 12,368,199	0.00%	151
1-60 days past due	249,652	0.41%	1,015
61-120 days past due	23,669	13.89%	3,288
121-180 days past due	240	26.25%	63
181-270 days past due	1,988	49.35%	981
More than 271 days past due	640	99.84%	639
	$ 12,644,388		6,137

The changes in the provisions for notes and accounts receivable of the Consolidated Company are as follows:

	2025	2024
Opening balance	$ 6,137	7,479
Recognized on impairment losses	118	1,696
Write-off	(13)	(3,152)
Foreign exchange (losses) gains	(21)	114
Closing balance	$ 6,221	6,137

2. Liquidity risk

The contracts of financial liabilities are sorted by their maturity dates as follows. The estimated interests are included, but the effect of net value agreement is excluded.

	Book value	Cash flow from the contract	Within 6 months	6 12 months	1-2 years	2-5 years	More than 5 years
December 31, 2025
Non-derivative financial liabilities:
Short-term loans	$ 225,010	226,737	226,737	-	-	-	-
Bonds payable	294,278	300,000	-	-	300,000	-	-
Notes payable	8,742	8,742	8,438	304	-	-	-
Accounts payable	3,669,225	3,669,225	3,669,225	-	-	-	-
Other payables	2,794,774	2,794,774	2,794,774	-	-	-	-
Lease liabilities	515,027	611,524	93,273	87,859	121,539	163,115	145,738
	$ 7,507,056	7,611,002	6,792,447	88,163	421,539	163,115	145,738
December 31, 2024
Non-derivative financial liabilities:
Short-term loans	$ 3,765,000	3,805,462	993,185	2,812,277	-	-	-
Bonds payable	288,665	300,000	-	-	300,000	-	-
Notes payable	6,761	6,761	6,761	-	-	-	-
Accounts payable	2,834,862	2,834,862	2,834,862	-	-	-	-
Other payables	2,592,146	2,592,146	2,592,146	-	-	-	-
Lease liabilities	550,500	668,056	84,338	80,130	130,177	181,327	192,084
	$ 10,037,934	10,207,287	6,511,292	2,892,407	430,177	181,327	192,084

The Consolidated Company does not anticipate that the cash flows analyzed at maturity date will alter significantly or that the actual amounts will vary significantly.

Notes to the Consolidated Financial Statements (Continued)

3. Market risk—exchange rate risk

(1) Exposure to exchange rate risk

The Consolidated Company’s financial assets and liabilities exposed to significant foreign currency exchange rate risk are as follows:

	Dec. 31, 2025
	Foreign currency (Note)	Exchange rate	NTD
Financial assets
Monetary item
USD	$ 632,659	31.4300	19,884,460
RMB	554,596	4.4960	2,493,463
JPY	3,490,058	0.2008	700,804
EUR	5,918	36.9000	218,356
Financial liabilities
Monetary item
USD	$ 269,579	31.4300	8,472,876
RMB	208,494	4.4960	937,388
EUR	1,566	36.9000	57,798
	Dec. 31, 2024
	Foreign currency (Note)	Exchange rate	NTD
Financial assets
Monetary item
USD	$ 1,097,452	32.7850	35,979,961
RMB	472,014	4.4780	2,113,677
HKD	33	4.2220	141
JPY	135,660	0.2099	28,475
EUR	7,003	34.1400	239,066
INR	4	0.4791	2
VND	1,300	0.0013	2
Financial liabilities
Monetary item
USD	$ 491,644	32.7850	16,118,560
RMB	159,698	4.4780	715,127
JPY	113,720	0.2099	23,870
EUR	858	34.1400	29,300
VND	27,598	0.0013	36
THB	123	0.9623	118

Note: The foreign currencies denominated in the non-functional currencies of the consolidated entities include items that have been eliminated in the consolidated financial statements for inter-group transactions.

Due to the diversity of functional currencies within the Consolidated Company, exchange gains and losses on monetary items are disclosed on an aggregated basis. For the years ended December 31, 2025 and 2024, foreign exchange gains and losses (including realized and unrealized amounts) amounted to a loss of NT$946,099 thousand and a gain of NT$910,021 thousand, respectively.

Notes to the Consolidated Financial Statements (Continued)

(2) Sensitivity analysis

The Consolidated Company's exchange rate risk arises mainly from cash and cash equivalents denominated in foreign currencies, financial assets at FVTPL, accounts receivable and other receivables, short-term loans, accounts payable and other payables, which generate foreign currency exchange gains or losses upon translation. As of December 31, 2025 and 2024, if the New Taiwan Dollar had strengthened or weakened by 1% against the foreign currencies held by the Consolidated Company, with all other variables held constant, profit after tax for the years ended December 31, 2025 and 2024 would have increased or decreased by NT$110,590 thousand and NT$171,795 thousand, respectively. The analysis for both periods is based on the same assumptions.

Market risk—changes in interest rates

The interest rate risk of the Consolidated Company mainly comes from the bank deposit and loan of floating rate, so the interest rate change will cause the effective interest rate of bank deposit and loan to change accordingly, and the future cash flow will fluctuate.

The following sensitivity analysis is based on the risk of interest rate shocks reported by financial instruments on the date of coverage. For floating rate liabilities, the analysis is based on the assumption that the reported amount of daily outstanding liabilities is current throughout the year. The rate of change used by the Consolidated Company in reporting interest rates to the key management is 1% up or down, which represents the management's assessment of the reasonable range of possible interest rate changes.

As of December 31, 2025 and 2024, the Consolidated Company held financial assets with variable interest rates amounting to NT$6,719,852 thousand and NT$7,238,819 thousand, respectively, and financial liabilities with variable interest rates amounting to NT$5,000 thousand and NT$35,000 thousand, respectively. If interest rates had increased or decreased by 1%, with all other variables held constant, profit after tax for the years ended December 31, 2025 and 2024 would have increased or decreased by NT$53,719 thousand and NT$57,631 thousand, respectively.

Market risk—fair value

(1) Fair value and carrying amount

The management of the Consolidated Company believes that non-derivative short-term financial instruments should be estimated at their fair value based on their book value on the balance sheet, and that their book value should be a reasonable basis for the estimated fair value because of the near expiry date of such commodities. This method is applied to cash and equivalent cash, notes receivable and payable, accounts receivable and payable, other receivables and payables, deposit margin and borrowings.

Notes to the Consolidated Financial Statements (Continued)

In addition to the above financial instruments, the fair value and book value information of the remaining financial instruments, investment properties and corporate bonds payable of the Consolidated Company on the financial reporting date are as follows:

	Dec. 31, 2025		Dec. 31, 2024
	Book value	Fair value	Book value	Fair value
Measured at fair value:
Financial assets:
Financial assets measured at FVTPL	$ 1,276,194	1,276,194	420,875	420,875
Financial assets measured at FVTOCI	281,100	281,100	186,472	186,472
Not measured at fair value
Non-financial assets:
Investment property	$ 252,074	290,687	525,789	633,832
Financial liabilities
Bonds payable	294,278	294,600	288,665	288,090

(2) The evaluation techniques used to determine fair value are as follows

A. When financial assets are quoted publicly in an active market, this market price is the fair value. When market prices are not available, estimates are made by reference to quoted counterparties or using valuation techniques. The estimates and assumptions used are consistent with the information used by market participants as estimates and assumptions in pricing financial instruments.

B. The fair value of investment properties is based on the evaluations of independent evaluators with recognized professional qualifications and recent experience in the area and type of investment properties evaluated.

(3) Fair value hierarchy

The following table analyzes the fair value hierarchy of financial instruments, investment properties and corporate bonds payable by valuation. Each fair value hierarchy is defined as follows:

A. Level 1: Publicly quoted prices (unadjusted) in an active market for identical assets or liabilities.

B. Level 2: Input parameters for an asset or liability are observable either directly (i.e., prices) or indirectly (i.e., derived from prices), except for publicly quoted prices included in Level 1.

C. Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable parameters).

Notes to the Consolidated Financial Statements (Continued)

	Level 1	Level 2	Level 3	Total
December 31, 2025
Measured at fair value:
Financial assets measured at FVTPL	$ 1,028,962	-	247,232	1,276,194
Financial assets measured at FVTOCI	81,022	-	200,078	281,100
	$ 1,109,984	-	447,310	1,557,294
Not measured at fair value:
Investment property	$ -	-	290,687	290,687
Bonds payable	$ -	-	294,600	294,600
	Level 1	Level 2	Level 3	Total
December 31, 2024
Measured at fair value:
Financial assets measured at FVTPL	$ 190,567	-	230,308	420,875
Financial assets measured at FVTOCI	78,787	-	107,685	186,472
	$ 269,354	-	337,993	607,347
Not measured at fair value:
Investment property	$ -	-	633,832	633,832
Bonds payable	$ -	-	288,090	288,090

(4) Transfer between the Level 1 and the Level 2
There were no transfers between Level 1 and Level 2 during year 2025 and 2024.
(5) Statement of changes in financial assets classified as Level 3 at fair value

Unit: NT$ thousands

Name	Opening balance	Total profit or loss		Increase		Decrease
		Recognized in profit or loss	Recognized in other comprehensive income	Issuance or purchase	Transferred to level 3	Sales, disposal or settlement	Closing balance
Financial assets measured at FVTPL	$ 230,308	6,924	-	10,000	-	-	247,232
Financial assets measured at FVTOCI	107,685	-	22,393	70,000	-	-	200,078
	$ 337,993	6,924	22,393	80,000	-	-	447,310
		2024
		Total profit or loss		Increase		Decrease
Name	Opening balance	Recognized in profit or loss	Recognized in other comprehensive income	Issuance or purchase	Transferred to level 3	Sales, disposal or settlement	Closing balance
Financial assets measured at FVTPL	$ 27,103	(17,898)	-	223,361	-	(2,258)	230,308
Financial assets measured at FVTOCI	1,144	-	(3,415)	112,500	-	(2,544)	107,685
	$ 28,247	(17,898)	(3,415)	335,861	-	(4,802)	337,993

The above included gains and losses are reported in "other gains and losses" and "unrealized valuation gains (losses) on financial assets at FVTOCI". The portions related to assets still held as of December 31, 2025 and 2024 are as follows:

	2025	2024
Total gain or loss
Recognized in loss (reported in “other gains and losses”)	$ 6,924	(17,890)
Recognized in other comprehensive income (reported in “unrealized valuation losses on financial assets at FVTOCI”)	22,393	(4,830)

Notes to the Consolidated Financial Statements (Continued)

(6) Quantitative information on fair value measurements of significant unobservable inputs (Level 3)

The Consolidated Company’s fair value measurements classified as Level 3 primarily include financial assets at fair value through profit or loss – derivative financial instruments, private equity fund investments, foreign bonds, and financial assets measured at fair value through other comprehensive income – equity investments. For Level 3 financial assets measured at fair value through profit or loss – foreign bonds, due to the lack of active market quotations, fair value is determined based on counterparty quotations. As it is impracticable to sufficiently understand the correlation between significant unobservable inputs and fair value, quantitative information is not disclosed. Quantitative information for other significant unobservable inputs used in Level 3 fair value measurements is presented below:

Item	Valuation techniques	Significant unobservable inputs	Relationship between significant unobservable inputs and fair value
Financial assets measured at FVTPL - Embedded derivatives - right of redemption	Binary tree method for pricing convertible bond	·Volatility: December 31, 2025 –39.37%; December 31, 2024 – 43.22%	·The higher the volatility, the higher the fair value
Financial assets measured at FVTPL - investment in private equity fund	Net asset value approach	·Net asset value	·Higher net asset value leads to higher fair value
Financial assets measured at FVTOCI - investment in equity instruments with no active market	Comparable company analysis	·Price-to-book ratio multiplier: December 31, 2025 –1.87; December 31, 2024 – 2.30
·Discount for lack of marketability: December 31, 2025 – 15.60%; December 31, 2024 – 15.60%	·The higher the multiplier, the higher the fair value
·The higher the discount for lack of marketability, the lower the fair value
Financial assets measured at FVTOCI - investment in equity instruments with no active market	Net asset value approach	·Net asset value	·The fair value is positively correlated

Notes to the Consolidated Financial Statements (Continued)

(7) Valuation process for fair value classified in Level 3

The Company uses unobservable inputs for its fair value measurements and classifies its fair value in Level 3. The source of the input value for this level is the price provided by reference to counterparty quotations or market comparable companies' net market value multipliers, etc., and the relevant quotations and valuation information are appropriately maintained. The results are subsequently reviewed to ensure consistency with the valuation sources and the reasonableness of the valuation results.

(8) Sensitivity analysis of fair value to reasonably possible alternative assumptions for Level 3 fair value measurements

The Company's fair value measurements of financial instruments are reasonable, but the use of different valuation models or valuation parameters may result in different valuation results. For financial instruments classified in Level 3, if the valuation parameters are changed, the impact on the profit or loss or other comprehensive income for the period is as follows:

	Input value	Upward or downward changes	Fair value changes reflected in profit or loss for the period		Fair value changes reflected in other comprehensive income
			Favorable changes	Unfavorable changes	Favorable changes	Unfavorable changes
December 31, 2025
Financial assets measured at FVTPL
Embedded derivatives - right of redemption	Volatility	5%	$ -	-	-	-
	Stock price	10%	-	-	-	-
Financial assets measured at FVTOCI
Investments in equity instruments with no active market	Net market value multiplier	1%	-	-	48	(31)
	Lack of marketability discount	1%	-	-	48	(31)
December 31, 2024
Financial assets measured at FVTPL
Embedded derivatives - right of redemption	Volatility	5%	120	(150)	-	-
	Stock price	10%	300	(60)	-	-
Financial assets measured at FVTOCI
Investments in equity instruments with no active market	Net market value multiplier	1%	-	-	54	(48)
	Lack of marketability discount	1%	-	-	62	(56)

Favorable and unfavorable changes in fair value represent fluctuations in fair value, which are calculated using valuation techniques based on various degrees of unobservable input parameters. If the fair value of a financial instrument is affected by more than one input, the above table reflects only the effect of changes in a single input and does not take into account the correlation and variability among the inputs.

Notes to the Consolidated Financial Statements (Continued)

(28) Financial Risk Management

The Consolidated Company is exposed to the following risks arising from financial instruments:

(1) Credit risk
(2) Liquidity risk
(3) Market risk

This note presents information about the Consolidated Company’s exposure to each of the above risks, the objectives, policies, and processes for measuring and managing risk. Further quantitative disclosures are provided in the respective notes to the consolidated financial statements.

Risk Management Framework

The Board of Directors has authorized the Chairman to be fully responsible for establishing and overseeing the Consolidated Company’s risk management framework, and to report its operation to the Board on a regular basis.

The Consolidated Company’s risk management policies are established to identify and analyze the risks faced, to set appropriate risk limits and controls, and to monitor risks and adherence to risk limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Consolidated Company’s operations. Through training programs, management guidelines, and operating procedures, the Consolidated Company aims to develop a disciplined and constructive control environment in which all employees understand their roles and responsibilities.

The Audit Committee oversees how management monitors compliance with the Consolidated Company’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced. Internal auditors assist the Audit Committee in performing its oversight role. They conduct regular and ad hoc reviews of risk management controls and procedures and report the results to the Audit Committee.

Credit Risk

Credit risk is the risk of financial loss to the Consolidated Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Consolidated Company’s accounts receivable from customers and investments in securities.

(1) Accounts Receivable and Other Receivables

The Consolidated Company’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers statistical data relating to the Consolidated Company’s customer base, including the default risk of the industries and countries in which customers operate, as these factors

Notes to the Consolidated Financial Statements (Continued)

may affect credit risk. Approximately 69% and 78% of the Consolidated Company’s revenue for the years ended December 31, 2025 and 2024, respectively, were derived from sales to customers located in Mainland China, resulting in a significant concentration of geographic credit risk.

The Consolidated Company has established a credit policy under which each new customer is analyzed individually for creditworthiness before standard payment and delivery terms are offered. Credit limits are established for each customer and are reviewed periodically. Customers that do not meet the Consolidated Company’s benchmark credit rating may only transact on a prepayment basis.

In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are individuals or legal entities, aging profiles, due dates, and prior financial difficulties. The Consolidated Company establishes loss allowance accounts to reflect estimated losses for accounts receivable and other receivables.

(2) Investment of Funds

The Consolidated Company invests in equity securities through centralized trading markets; therefore, there is no significant credit risk associated with such transactions.

The credit risk associated with bank deposits, fixed-income investments, and other financial instruments is measured by the Consolidated Company’s finance department and reported to the Chairman. As the Consolidated Company’s counterparties and obligors are reputable banks and financial institutions with investment-grade credit ratings or above, there are no significant concerns regarding default risk, and therefore no significant credit risk exposure.

Liquidity Risk

Liquidity risk is the risk that the Consolidated Company will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Consolidated Company’s approach to managing liquidity risk is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Consolidated Company’s reputation. To address unexpected funding requirements, as of December 31, 2025 and 2024, the Consolidated Company had unused credit facilities totaling NT$4,306,480 thousand and NT$3,985,039 thousand, respectively.

Market Risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Consolidated Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimizing returns.

Notes to the Consolidated Financial Statements (Continued)

The Consolidated Company engages in derivative transactions to manage market risk. All such transactions are carried out in accordance with the guidelines approved by the Board of Directors.

(1) Foreign Exchange Risk

The Consolidated Company is exposed to foreign exchange risk arising from sales and purchases denominated in currencies other than the respective functional currencies of group entities. Accordingly, the Consolidated Company uses derivative financial instruments to hedge foreign exchange risk. Gains or losses arising from changes in exchange rates on foreign currency-denominated assets and liabilities are generally offset through natural hedging. While derivative transactions help reduce the impact of exchange rate fluctuations, they cannot completely eliminate such effects.

The Consolidated Company regularly reviews its exposure to individual foreign currency assets and liabilities and implements hedging strategies for such exposures.

(2) Interest Rate Risk

The Consolidated Company's interest rate risk arises mainly from variable-rate bank deposits and short-term borrowings. Changes in interest rates will affect the effective interest rates of these instruments and cause fluctuations in future cash flows.

(3) Equity Price Risk

If equity security prices had changed at the reporting date (with all other variables held constant and based on the same assumptions for both periods), the impact on comprehensive income would have been as follows:

	2025		2024
Change in security prices at the reporting date	Other comprehensiv e income (net of tax)	Profit or loss (net of tax)	Other comprehensiv e income (net of tax)	Profit or loss (net of tax)
Increase by 1%	$ 2,811	8,946	1,865	1,063
Decrease by 1%	$ (2,811)	(8,946)	(1,865)	(1,063)

(29) Capital Management

The Board of Directors' policy is to maintain a strong capital base to sustain investor, creditor, and market confidence and to support the future development of the Consolidated Company's operations. Capital consists of share capital, capital surplus, and retained earnings of the Consolidated Company. The Board monitors the return on capital and also monitors the level of dividends on ordinary shares.

To maintain or adjust the capital structure, the Consolidated Company may adjust dividends paid to shareholders, return capital to shareholders through capital reduction, issue new shares, or sell assets to reduce liabilities.

The Consolidated Company monitors capital using the debt-to-capital ratio. This ratio is

Notes to the Consolidated Financial Statements (Continued)

calculated as net debt divided by total capital. Net debt is defined as total liabilities as shown in the balance sheet less cash and cash equivalents. Total capital is defined as total equity (i.e., share capital, capital surplus, retained earnings, and other equity) plus net debt. The debt-to-capital ratio as of the reporting date is as follows:

	Dec. 31, 2025	Dec. 31, 2024
Total liabilities	$ 10,018,416	12,251,177
Less: cash and cash equivalents	(12,499,891)	(18,658,882)
Net debt	$ (2,481,475)	(6,407,705)
Total equity	$ 40,414,835	37,959,872
Debt-to-capital ratio	(6.54)%	(20.31)%

(30) Investment and fund-raising activities for non-cash transactions

The non-cash investing and financing activities of the Consolidated Company for the years ended December 31, 2025 and 2024 were as follows:

For details on the conversion of convertible corporate bonds into common shares, please refer to Note VI (14).
For details on obtaining right-of-use assets through leasing, please refer to Note VI (9) and (15).

A reconciliation of liabilities arising from financing activities of the Consolidated Company for the years ended December 31, 2025 and 2024 is shown below:

	Non-cash changes
	Jan. 1, 2025	Cash flow	Other	Changes in exchange rate	Changes in fair value	Dec. 31, 2025
Short-term loans	$ 3,765,000	(3,551,260)	-	11,270	-	225,010
Bonds payable	288,665	-	5,613	-	-	294,278
Lease liabilities	550,500	(183,744)	147,301	970	-	515,027
Total liabilities from financing activities	$ 4,604,165	(3,735,004)	152,914	12,240	-	1,034,315
	Non-cash changes
---	---	---	---	---	---	---
	Jan. 1, 2024	Cash flow	Other	Changes in exchange rate	Changes in fair value	Dec. 31, 2024
Short-term loans	$ 1,580,000	2,185,000	-	-	-	3,765,000
Bonds payable	934,155	283,159	(928,649)	-	-	288,665
Lease liabilities	616,537	(174,957)	88,565	20,355	-	550,500
Total liabilities from financing activities	$ 3,130,692	2,293,202	(840,084)	20,355	-	4,604,165

Notes to the Consolidated Financial Statements (Continued)

VII. Related Party Transactions

(1) Parent company and ultimate controller: The Company is the ultimate controller of the Consolidated Company and the Consolidated Company’s subsidiaries.

(2) Names and relationships of related parties

The related parties that had transactions with the Company during the period covered by these consolidated financial statements are as follows:

Name of related parties	Relationship with the Company
LeRain Technology Co., Ltd.	An associate of the Consolidated Company
I-SEE VISION TECHNOLOGY INC.	An associate of the Consolidated Company
AionChip Technologies CO., LTD.	An associate of the Consolidated Company
Key management	Including the directors, managers and their families and spouses

(3) Material transactions with related parties

Amounts payable to related parties

The details of the Consolidated Company’s payables to related parties are as follows:

Accounting Item	Related Party Category	Dec. 31, 2025	Dec. 31, 2024
Accounts payable	Associate	$ -	268
Other payables	Associate	2,603	-
Other payables	Key management	42	-
		$ 2,645	268

Purchases

The amount of purchases from related parties by the Consolidated Company is as follows:

	2025	2024
Associate	$ 4,393	2,099

The purchase prices from related parties are not significantly different from those from general suppliers. The payment terms are three months, which are not significantly different from those of general suppliers.

Non-operating income

	2025	2024
Associate	$ 1,458	147

Primarily consists of rental income from leasing parking spaces and office premises.

Notes to the Consolidated Financial Statements (Continued)

Operating expenses

	2025	2024
Associate	$ 12	111

Operating expenses mainly consist of sample expenses and material costs.

Lease liabilities and right-of-use assets

The Consolidated Company leases warehouses and residential properties in the United States from key management personnel for employee accommodation. Lease contracts with terms ranging from one to two years are entered into based on prevailing rental rates in nearby areas, with total contract values of NT$60 thousand and NT$2,992 thousand, respectively. Interest expenses recognized for the years ended December 31, 2025 and 2024 amounted to NT$75 thousand and NT$1 thousand, respectively. As of December 31, 2025 and 2024, the balances of lease liabilities were NT$2,115 thousand and NT$0 thousand, respectively.

(4) Major management personnel transactions

Related compensation includes:

	2025	2024
Short-term employee benefits	$ 116,852	107,797
Post-employment benefits	1,344	1,393
Share-based payment	4,497	1,648
	$ 122,693	110,838

For details on share-based payments, please refer to note 6 (22).

VIII. Pledged Assets

The carrying value of the assets pledged as collateral by the Consolidated Company was as follows:

Name of Asset	Pledged as
	Collateral for	Dec. 31, 2025	Dec. 31, 2024
Time deposits (recorded under other financial assets – current)	Customs duties guarantee	$ 205	-
Property, plant and equipment (Note)	Bank borrowings	194,522	199,391
		$ 194,727	199,391

Note: Certain loan agreements have expired and were not renewed, and clearance certificates have been obtained from the banks; however, the deregistration procedures for the pledged assets have not yet been completed.

Notes to the Consolidated Financial Statements (Continued)

IX. Significant Contingent Liabilities and Unrecognized Contractual Commitments

(1) Significant unrecognized contract commitments:

The significant unrecognized contractual commitments of the Consolidated Company are as follows:

Significant construction and property purchase contracts

Dec. 31, 2025

$ 1,438,010

(2) The issuance of guarantee notes for bank loans, financing lines and derivative financial commodity transactions:

Guaranteed notes

Dec. 31, 2025 Dec. 31, 2024

$ 2,800,050 3,657,696

X. Significant Disaster Loss: None.
XI. Significant Post-Period Events: None.
XII. Others

(1) Employee benefits, depreciation, depletion, and amortization functions are summarized below:

Function Nature	2025			2024
	Operating cost	Operating expense	Total	Operating cost	Operating expense	Total
Employee benefit expense
Salary	5,393,927	2,705,333	8,099,260	4,610,786	2,391,533	7,002,319
Labor insurance and health insurance	783,219	258,808	1,042,027	639,213	211,463	850,676
Pension	2,774	16,107	18,881	3,022	15,902	18,924
Compensation of directors	-	12,979	12,979	-	8,353	8,353
Other employee benefit	227,862	158,725	386,587	206,731	163,105	369,836
Depreciation	1,688,493	852,646	2,541,139	1,526,724	688,122	2,214,846
Amortization	4,641	64,334	68,975	3,184	60,958	64,142

(2) Seasonality of operations:

The Company's operations are subject to seasonal fluctuations due to the downstream computer industry.

Notes to the Consolidated Financial Statements (Continued)

XIII. Disclosing Information

(1) Information on Major Transactions

In accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers,” the major transaction information of the Consolidated Company for the year ended December 31, 2025, is disclosed as follows:

Financings provided:

Unit: NT$ thousands

No.	Lender	Borrower	Item	Related party	Max amount for the period	Closing balance	Actual amount	Interest rate	Nature of the lending (Note 1)	Transaction amount	Purpose for lending	Allowance for bad debt	Colateral		Lending limit for single party (Note 2)	Overall lending limit (Note 2)
													Name	Value
0	Lotes Co., Ltd.	LOTES GUANGZHOU CO., LTD.	Other receivables-related parties	Yes	2,248	2,248	2,248	2.30%	2	-	Operating turnover	-	None	-	7,688,768	15,377,537
1	Lotes Technology Co., Ltd.	GENIE Precision Machining CO., LTD.	Other receivables-related parties	Yes	120,000	60,000	45,000	1.89%	2	-	Operating turnover, loan repayment	-	None	-	344,523	1,378,091
1	Lotes Technology Co., Ltd.	LINTES TECHNOLOGY THAILANDI CO., LTD.	Other receivables-related parties	Yes	66,410	62,860	47,145	2.00%–2.55%	2	-	Operating turnover	-	None	-	344,523	1,378,091

Note 1: The following are the descriptions of the funds lending.

(1) Those who have business dealings.
(2) When there is a need for short-term financing.

Notes to the Consolidated Financial Statements (Continued)

Note 2: (1) The amount of the Company’s financing to a single party shall not exceed 20% of the Company’s net worth.

The total amount of funds lent by the Company to others shall not exceed 40% of the Company’s net worth.

(2) Lintes Technology Co., Ltd. must not lend more than 10% of its net value to a single entity.

Lintes Technology Co., Ltd.'s total amount of funds lent to others must not exceed 50% of its net value.

a. For those with business transactions, the total amount of funds lent must not exceed 10% of the company's net value.
b. For those needing short-term funding, the total amount of funds lent must not exceed 40% of the company's net value.

2. Endorsement/guarantee provided

Unit: in thousands of NT$/foreign currency

No	Endorsement provider	Endorsement		Calling on amount of endorsement for an enterprise (Note 2)	Balance of the rolling endorsement for in the period	Ending balance of the endorsement fee	Amount actually used	Amount of endorsements and guarantees secured by property	Percentage of the accumulated amount of endorsement in the net value of current financial statement (%)	Calling on amount of endorsement (Note 2)	Endorsement made by parent company to subsidiary	Endorsement made by subsidiary to parent company	Endorsement made to any party in Mainland China
		Company Name	Endorsement (Note 1)
0	Lotes Co., Ltd.	LOTES GUANGZHOU CO., LTD.	2	7,688,768	166,625 (USD5,000)	-	-	-	-	19,221,921	Yes	No	Yes
0	"	LOTES VIET NAM COMPANY LIMITED	2	7,688,768	166,625 (USD5,000)	157,150 (USD5,000)	-	-	0.41%	19,221,921	"	"	No
0	"	LOTES SHENZHEN CO., LTD.	2	7,688,768	269,760 (CNY60,000)	269,760 (CNY60,000)	-	-	0.70%	19,221,921	"	"	Yes
1	Lintes Technology Co., Ltd.	SENIR Precision Marketing CO., LTD.	2	1,722,614	130,000	130,000	5,000	-	3.77%	3,445,227	"	"	No

Note 1: There are seven types of relationship between the Endorser and Endorsee, which can be marked:

(1) Companies with business dealings.
(2) Companies in which the company directly and indirectly holds more than 50% of the voting rights.
(3) Companies that hold more than 50% of the voting rights in the company, both directly and indirectly.
(4) The Company owns, directly and indirectly, more than 90 percent of the voting shares.
(5) Company that is mutually insured under a contract between its peers or co-manufacturers based on the need to perform the work.
(6) Company in which all of the contributory shareholders have given their endorsement in proportion to their shareholding in the joint venture.
(7) Intercompany performance guarantees and guarantees for pre-sale contracts in accordance with the Consumer Protection Act.

Note 2: (1) The amount of the Company’s guarantee for a single corporate endorsement shall not exceed 20% of the net worth of the Company.

The aggregate amount of the Company’s guarantees under external endorsement shall not exceed 50% of the net worth of the Company.

(2) The amount of Lotes Guanghou Co., Ltd’s guarantee for a single corporate endorsement is limited to not more than 20% of the net worth of the company.

The aggregate amount of Lotes Guanghou Co., Ltd’s external endorsement guarantees is limited to an amount not exceeding 50% of the Company’s net worth.

(3) The amount of Lintes Technology Co., Ltd.’s guarantee for a single corporate endorsement is limited to not more than 50% of the net worth of the company.

The aggregate amount of Lintes Technology Co., Ltd.’s external endorsement guarantees is limited to an amount not exceeding 100% of the Company’s net worth.

Notes to the Consolidated Financial Statements (Continued)

Major marketable securities held (excluding the equity of controlled by subsidiaries, affiliated companies, or joint company):

Unit: NT$ thousands

Holding company	Category and name of security	Relationship with the issuer of the security	Accounting item	End of the period				Highest amount of shareholding or capital contribution during the period
				Shares	Book value	Shareholding ratio	Fair value
Lotes Co., Ltd.	Taiwan Semiconductor Manufacturing Company Limited	None	Financial assets measured at FVTPL - current	400,000	620,000	0.00%	620,000	-
"	Hon. Precision, Inc.	None	"	45,000	154,125	0.03%	154,125	0.03
"	Phoenix VI Capital Venture Capital Co., Ltd.	None	Financial assets measured at FVTOCI - non-current	9,000,000	120,167	4.57%	120,167	4.57

Note: This table discloses marketable securities with a carrying amount of NT$100 million or more.

The amount of sales to or from related parties is at least $100 million or 20% of the paid-in capital:

Unit: NT$ thousands

The company which purchases (sells) products	Name of transaction counterparty	Relationship	Transaction status				Situation and reason for the conditions of transaction to be different from the ordinary ones		Notes and accounts receivable (payable)
			Purchases (sales)	Amount	Percentage in total goods purchased (sold)	Credit period	Unit price	Credit period	Balance	Percentage in the notes and accounts receivable (payable)
Lotes Co., Ltd.	LOTESPEED TECHNOLOGY GUANGZHOU LTD	Subsidiary	Net sales	2,992,900	12.46 %	IOM 90 days	-	No significant difference	1,426,309	14.88%
"	SWISS GOOD ENTERPRISES LIMITED	"	Net sales	503,473	2.10 %	"	-	"	296,707	3.10%
LOTES GUANGZHOU CO., LTD.	Lotes Co., Ltd.	The ultimate parent company	Net sales	837,263	9.63 %	"	-	"	381,724	10.52%
"	LOTESPEED TECHNOLOGY GUANGZHOU LTD	Subsidiary	Net sales	152,335	1.75 %	"	-	"	80,657	2.22%
"	SWISS GOOD ENTERPRISES LIMITED	The ultimate parent company is the same company	Net sales	6,437,168	74.07 %	"	-	"	2,214,320	61.03%
LOTES SUZHOU CO., LTD	LOTES SHENZHEN CO., LTD.	"	Net sales	121,559	5.53 %	"	-	"	48,350	8.71%
"	Sky Comet Zhongshan Electronics Co., Ltd.	"	Net sales	128,681	5.86 %	"	-	"	89,242	16.08%
"	JOY CITY DEVELOPMENTS LIMITED	"	Net sales	1,618,145	73.64 %	"	-	"	288,873	52.06%
LOTES HENGNAN CO., LTD.	Lotes Co., Ltd.	The ultimate parent company	Net sales	140,620	4.67 %	"	-	"	41,084	3.62%
"	LOTES GUANGZHOU CO., LTD.	Parent company	Net sales	412,755	13.71 %	"	-	"	142,869	12.59%
"	LOTES ZHONGSHAN CO., LTD.	The ultimate parent company is the same company	Net sales	352,579	11.71 %	"	-	"	160,815	14.17%
"	LOTES SHENZHEN CO., LTD.	"	Net sales	344,377	11.44 %	"	-	"	153,503	13.53%
"	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	"	Net sales	401,586	13.34 %	"	-	"	162,120	14.29%
"	SWISS GOOD ENTERPRISES LIMITED	"	Net sales	1,282,219	42.58 %	"	-	"	444,755	39.20%
LOTES ZHONGSHAN CO., LTD.	Lotes Co., Ltd.	The ultimate parent company	Net sales	1,403,322	13.12 %	"	-	"	542,633	12.07%
"	LOTES GUANGZHOU CO., LTD.	Parent company	Net sales	865,611	8.09 %	"	-	"	378,440	8.42%

Notes to the Consolidated Financial Statements (Continued)

The company which purchases (sells) products	Name of transaction counterparty	Relationship	Transaction status				Situation and reason for the conditions of transaction to be different from the ordinary ones		Notes and accounts receivable (payable)
			Purchases (sales)	Amount	Percentage in total goods purchased (sold)	Credit period	Unit price	Credit period	Balance	Percentage in the notes and accounts receivable (payable)
LOTES ZHONGSHAN CO., LTD.	LOTES SHENZHEN CO., LTD.	The ultimate parent company is the same company	Net sales	142,506	1.33 %	EOM 90 days	-	No significant difference	92,097	2.05%
"	LOTESPEED TECHNOLOGY GUANGZHOU LTD	"	Net sales	927,312	8.67 %	"	-	"	526,545	11.72%
"	Sky Comet Zhongshan Electronics Co., Ltd.	"	Net sales	327,937	3.07 %	EOM 180 days	-	"	254,325	5.66%
"	SWISS GOOD ENTERPRISES LIMITED	"	Net sales	6,845,654	64.00 %	EOM 90 days	-	"	2,303,512	51.25%
LINTES TECHNOLOGY (SUZHOU) CO., LTD.	Lintes Technology Co., Ltd.	"	Net sales	816,238	82.67 %	"	-	"	268,358	72.82%
Zhongshan Dezhi Metal Surface Treatment Co., Ltd.	LOTES GUANGZHOU CO., LTD.	Parent company	Net sales	571,642	76.43 %	"	-	"	98,869	72.82%
"	LOTES ZHONGSHAN CO., LTD.	The ultimate parent company is the same company	Net sales	164,014	21.93 %	"	-	"	24,817	19.89%
LOTES VIET NAM COMPANY LIMITED	Lotes Co., Ltd.	Parent company	Net sales	1,308,935	95.65 %	"	-	"	609,399	100.00%
LOTESPEED TECHNOLOGY GUANGZHOU LTD	LOTES SHENZHEN CO., LTD.	The ultimate parent company is the same company	Net sales	1,622,248	37.43 %	"	-	"	871,066	40.66%
"	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	"	Net sales	1,499,534	34.60 %	"	-	"	657,835	30.71%
"	SWISS GOOD ENTERPRISES LIMITED	"	Net sales	302,558	6.98 %	"	-	"	121,588	5.68%
SWISS GOOD ENTERPRISES LIMITED	Lotes Co., Ltd.	The ultimate parent company	Net sales	11,185,250	71.82 %	"	-		4,856,603	72.65%
"	LOTES VIET NAM COMPANY LIMITED	The ultimate parent company is the same company	Net sales	103,468	0.66 %	"	-		62,751	0.94%
"	Sky Comet Zhongshan Electronics Co., Ltd.	"	Net sales	443,685	2.85 %	EOM 180 days	-		348,478	5.21%
JOY CITY DEVELOPMENTS LIMITED	Lotes Co., Ltd.	The ultimate parent company	Net sales	1,498,996	91.96 %	EOM 90 days	-		237,789	82.87%
"	SWISS GOOD ENTERPRISES LIMITED	The ultimate parent company is the same company	Net sales	125,045	7.67 %	"	-		49,221	17.15%

Notes to the Consolidated Financial Statements (Continued)

Amounts due from related parties amounting to at least NT$100 million or 20% of paid-in capital:

Unit: NT$ thousands

Related party with accounts receivable by the Company	Name of transaction counterparty	Relationship	Balance of receivables from the related party	Turnover ratio	Past due receivables from the related party		Amounts due from related parties recovered after the period	Allowance for losses
					Amount	Handling
Lotes Co., Ltd.	LOTESPED TECHNOLOGY GUANGZHOU LTD	Subsidiary	1,426,309	2.69	-	-	-	-
"	SWISS GOOD ENTERPRISES LIMITED	"	296,707	3.31	-	-	-	-
LOTES GUANGZHOU CO., LTD.	Lotes Co., Ltd.	The ultimate parent company	381,724	2.81	-	-	71,752	-
"	LOTES ZHONGSHAN CO., LTD.	Subsidiary	687,489	-	-	-	284,161	-
"	SWISS GOOD ENTERPRISES LIMITED	The ultimate parent company is the same company	2,214,320	2.48	-	-	624,233	-
LOTES SUZHOU CO., LTD.	JOY CITY DEVELOPMENTS LIMITED	"	288,873	5.55	-	-	247,890	-
LOTES HENGNAN CO., LTD.	LOTES GUANGZHOU CO., LTD.	Parent company	142,869	2.81	-	-	39,411	-
"	LOTES ZHONGSHAN CO., LTD.	The ultimate parent company is the same company	160,815	2.69	-	-	36,738	-
"	LOTES SHENZHEN CO., LTD.	"	153,503	2.62	-	-	28,837	-
"	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	"	162,120	2.80	-	-	41,589	-
"	SWISS GOOD ENTERPRISES LIMITED	"	444,755	4.10	-	-	125,954	-
LOTES ZHONGSHAN CO., LTD.	Lotes Co., Ltd.	The ultimate parent company	542,633	2.89	-	-	112,144	-
"	LOTES GUANGZHOU CO., LTD.	Parent company	378,440	2.40	-	-	109,859	-
"	LOTESPED TECHNOLOGY GUANGZHOU LTD	The ultimate parent company is the same company	526,545	2.14	-	-	86,752	-
"	Sky Comet Zhongshan Electronics Co., Ltd.	"	254,325	1.51	-	-	30,632	-
"	SWISS GOOD ENTERPRISES LIMITED	"	2,303,512	3.08	-	-	509,241	-
LINTES TECHNOLOGY (SUZHOU) CO., LTD.	Lintes Technology Co., Ltd.	"	268,358	1.59	12,629	Continuous collection	126,567	-
LOTES VIET NAM COMPANY LIMITED	Lotes Co., Ltd.	Parent company	609,399	2.92	-	-	108,837	-
LOTESPED TECHNOLOGY GUANGZHOU LTD	LOTES SHENZHEN CO., LTD.	The ultimate parent company is the same company	871,066	2.32	-	-	197,923	-
"	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	"	657,835	2.84	-	-	99,959	-
"	SWISS GOOD ENTERPRISES LIMITED	"	121,588	3.11	-	-	5,604	-
SWISS GOOD ENTERPRISES LIMITED	Lotes Co., Ltd.	The ultimate parent company	4,856,603	2.28	-	-	1,214,118	-
"	LOTES GUANGZHOU CO., LTD.	The ultimate parent company is the same company	338,151	-	-	-	156,086	-
"	LOTES ZHONGSHAN CO., LTD.	"	674,008	-	-	-	543	-
"	LOTES VIET NAM COMPANY LIMITED	"	158,684	-	-	-	-	-
"	Sky Comet Zhongshan Electronics Co., Ltd.	"	348,478	1.60	-	-	51,996	-
JOY CITY DEVELOPMENTS LIMITED	Lotes Co., Ltd.	The ultimate parent company	237,789	6.04	-	-	-	-
GOOD HOPE INVESTMENTS LIMITED	SWISS GOOD ENTERPRISES LIMITED	Subsidiary	971,848	-	-	-	-	-

Notes to the Consolidated Financial Statements (Continued)

Business relationships and material transactions between parent and subsidiaries:

Business relationships and material transactions between the parent company and its subsidiaries for the year ended December 31, 2025, are summarized as follows:

Unit: NT$ thousands

No.	Name	Transaction with	Relationship	Transactions in 2025
				Subject	Amount	Term	Operating revenue Accounting for total assets
0	Lotos Co., Ltd.	LOTESPEED TECHNOLOGY GUANGZHOU LTD	1	Accounts receivable	1,426,309	Same as general transactions	2.83%
0	"	"	1	Sales revenue	2,992,900	"	8.86%
0	"	SWISS GOOD ENTERPRISES LIMITED	1	Accounts receivable	296,707	"	0.59%
0	"	"	1	Sales revenue	503,473	"	1.49%
1	LOTES GUANGZHOU CO., LTD.	Lotos Co., Ltd.	2	Accounts receivable	381,724	Same as general transactions	0.76%
1	"	"	2	Sales revenue	837,263	"	2.48%
1	"	LOTES ZHONGSHAN CO., LTD.	3	Other receivables	687,489	"	1.36%
1	"	"	3	Sales of fixed assets	116,135	"	0.23%
1	"	LOTESPEED TECHNOLOGY GUANGZHOU LTD	3	Sales revenue	152,333	"	0.45%
1	"	SWISS GOOD ENTERPRISES LIMITED	3	Accounts receivable	2,214,320	"	4.39%
1	"	"	3	Sales revenue	6,437,168	"	19.05%
2	LOTES SUZHOU CO., LTD.	LOTES SHENZHEN CO., LTD.	3	Sales revenue	121,559	"	0.36%
2	"	Sky Comet Zhengshan Electronics Co., Ltd.	3	Sales revenue	128,681	"	0.38%
2	"	JOY CITY DEVELOPMENTS LIMITED	3	Accounts receivable	288,873	"	0.57%
2	"	"	3	Sales revenue	1,618,145	"	4.79%
3	LOTES HENGNAN CO., LTD.	Lotos Co., Ltd.	2	Sales revenue	140,620	"	0.41%
3	"	LOTES GUANGZHOU CO., LTD.	3	Accounts receivable	142,869	"	0.28%
3	"	"	3	Sales revenue	412,755	"	1.22%
3	"	LOTES ZHONGSHAN CO., LTD.	3	Accounts receivable	160,815	"	0.32%
3	"	"	3	Sales revenue	352,579	"	1.04%
3	"	LOTES SHENZHEN CO., LTD.	3	Accounts receivable	153,503	"	0.30%
3	"	"	3	Sales revenue	354,377	"	1.02%
3	"	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	3	Accounts receivable	162,120	"	0.32%
3	"	"	3	Sales revenue	401,586	"	1.19%
3	"	SWISS GOOD ENTERPRISES LIMITED	3	Accounts receivable	444,755	"	0.88%
3	"	"	3	Sales revenue	1,282,219	"	3.80%
4	LOTES ZHONGSHAN CO., LTD.	Lotos Co., Ltd.	2	Accounts receivable	542,633	"	1.08%
4	"	"	2	Sales revenue	1,403,322	"	4.15%
4	"	LOTES GUANGZHOU CO., LTD.	3	Accounts receivable	378,440	"	0.75%
4	"	"	3	Sales revenue	865,611	"	2.36%
4	"	LOTES SHENZHEN CO., LTD.	3	Sales revenue	142,506	"	0.42%
4	"	LOTESPEED TECHNOLOGY GUANGZHOU LTD	3	Accounts receivable	526,545	"	1.04%
4	"	"	3	Sales revenue	927,312	"	2.74%
4	"	Sky Comet Zhengshan Electronics Co., Ltd.	3	Accounts receivable	254,325	"	0.50%
4	"	"	3	Sales revenue	327,937	"	0.97%
4	"	SWISS GOOD ENTERPRISES LIMITED	3	Accounts receivable	2,303,512	"	4.57%
4	"	"	3	Sales revenue	6,845,654	"	20.26%
5	LINTES TECHNOLOGY (SUZHOU) CO., LTD.	Lintos Technology Co., Ltd.	3	Accounts receivable	268,358	"	0.54%
5	"	"	3	Sales revenue	816,238	"	2.38%
6	Zhengshan Delhi Metal Surface Treatment Co., Ltd.	LOTES GUANGZHOU CO., LTD.	3	Sales revenue	571,642	"	1.69%
6	"	LOTES ZHONGSHAN CO., LTD.	3	Sales revenue	164,014	"	0.49%
7	LOTES VIET NAM COMPANY LIMITED	Lotos Co., Ltd.	2	Accounts receivable	609,399	"	1.21%
7	"	"	2	Sales revenue	1,308,935	"	3.92%
8	LOTESPEED TECHNOLOGY (SUANGZHOU LTD)	LOTES SHENZHEN CO., LTD.	3	Accounts receivable	871,066	"	1.73%
8	"	"	3	Sales revenue	1,622,248	"	4.80%
8	"	TSONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	3	Accounts receivable	657,835	"	1.30%
8	"	"	3	Sales revenue	1,499,534	"	4.44%
8	"	SWISS GOOD ENTERPRISES LIMITED	3	Accounts receivable	121,588	"	0.24%
8	"	"	3	Sales revenue	302,558	"	0.90%
9	SWISS GOOD ENTERPRISES LIMITED	Lotos Co., Ltd.	2	Accounts receivable	4,856,603	Same as general transactions	9.63%
9	"	"	2	Sales revenue	11,185,250	"	33.13%
9	"	LOTES GUANGZHOU CO., LTD.	3	Other receivables	338,151	"	0.67%
9	"	LOTES ZHONGSHAN CO., LTD.	3	Other receivables	674,008	"	1.34%
9	"	LOTES VIET NAM COMPANY LIMITED	3	Other receivables	158,684	"	0.31%
9	"	"	3	Sales revenue	103,468	"	0.31%
9	"	Sky Comet Zhengshan Electronics Co., Ltd.	3	Accounts receivable	348,478	"	0.69%
9	"	"	3	Sales revenue	443,685	"	1.31%
10	JOY CITY DEVELOPMENTS LIMITED	Lotos Co., Ltd.	2	Accounts receivable	237,789	"	0.47%
10	"	"	2	Sales revenue	1,498,996	"	4.45%
10	"	SWISS GOOD ENTERPRISES LIMITED	3	Sales revenue	125,045	"	0.37%
11	GOOD HOPE INVESTMENTS LIMITED	"	3	Other receivables	971,848	"	1.93%

Note 1: The number should be filled in as follows:
1. 0 refer to parent company
2. Subsidiaries are numbered by company, starting with the Arabic numeral 1.

Note 2: The type of relationship with the counterparty is indicated below:
1. Parent company to subsidiaries
2. Subsidiaries to parent company
3. Subsidiaries to subsidiaries

Notes to the Consolidated Financial Statements (Continued)

(2) Information on reinvestment business:

The Consolidated Company's reinvestment information (excluding investees in China) for the year ended December 31, 2025, is as follows:

Unit: NT$ thousands

Name of the company investing	Name of investor company	Location	Main business	Initial investment amount (Note 1)		Shares held at the end of the fiscal period			Highest amount of shareholding or capital contribution during the period	Gain/loss of investor company in the fiscal period	Gain/loss in the investment recognized in the fiscal period	Remarks
				End of this period	End of the previous year	Shares	Percentage	Book value
Lotes Co., Ltd.	LOTES INVESTMENTS LIMITED	Saman	Holding and investment	818,752	818,752	26,050,000	100.00%	14,954,909	100.00%	1,964,505	1,926,502	Note 2
"	GOOD HOPE INVESTMENTS LIMITED	"	"	12,612	12,612	401,281	100.00%	2,406,704	100.00%	163,126	163,126
"	CROWN MIND DEVELOPMENTS LIMITED	"	"	629,116	629,116	20,016,426	100.00%	6,745,877	100.00%	1,024,830	1,039,366	Note 2
"	TAMH INVESTMENTS LIMITED	Anguilla	"	15,715	15,715	500,000	100.00%	323,064	100.00%	63,103	63,103
"	Juyou Investment Co., Ltd.	Taiwan	"	-	865,000	-	%	-	100.00%	26,137	26,166	Note 2 & 3
"	COMPER TUM MICROSYSTEMS INC.	"	Manufacturing of electronic components	102,385	-	8,483,248	33.56%	14,808	33.56%	(49,216)	(789)
"	GOOD NEWS MEDICAL CO., LTD.	"	Manufacturing and sales of machinery and equipment, electronic components, and optical instruments	15,324	-	1,532,419	30.65%	5,916	30.65%	(7,127)	(451)
"	Lintes Technology Co., Ltd.	"	Manufacturing of electronic components and other electrical and electronic machinery and equipment	746,361	-	32,071,309	40.56%	1,670,904	40.56%	119,097	12,674	Note 2
"	LOTES USA, Inc., LOTES EU GmbH	USA Germany	Market development	78,575	78,575	2,500,000	100.00%	99,952	100.00%	3,940	3,940
"	LOTES EU GmbH	Germany	"	3,690	3,690	100,000	100.00%	5,844	100.00%	(181)	(181)
"	LeRain Technology Co., Ltd.	Taiwan	Design, test and sale of chips	47,221	47,321	4,722,059	14.83%	42,742	15.74%	10,693	1,665
"	Lontries Co., Ltd	"	Manufacturing and trading of mechanical equipment and electronic parts	159,700	124,800	15,970,000	99.81%	75,438	99.84%	(19,544)	(19,517)
"	I-SEE VISION TECHNOLOGY INC.	"	Design, research and development, and manufacturing services for contact lenses	158,301	94,000	8,780,125	22.41%	64,133	22.41%	(106,629)	(25,950)
Lotes Co., Ltd.	AsusChip Technologies CO., LTD.	Taiwan	Design, test and sale of chips	95,727	95,727	5,264,980	26.32%	62,109	26.32%	(61,247)	(16,123)
"	LOTES VIET NAM COMPANY LIMITED	Vietnam	Manufacturing of connectors for the information industry, communications industry, and consumer electronics industry	3,825,942	2,883,042	121,729,000	100.00%	3,703,473	100.00%	170,164	173,251	Note 2
LOTES INVESTMENTS LIMITED	LOTESON INTERNATIONAL INVESTMENTS LTD.	Hong Kong	Holding and investment	818,752	818,752	26,050,000	100.00%	15,442,647	100.00%	1,964,505	1,964,505
GOOD HOPE INVESTMENTS LIMITED	JOY CITY DEVELOPMENTS LIMITED	Saman	Sales of connectors for the information industry, communications industry, and consumer electronics industry	3,143	3,143	100,000	100.00%	1,555	100.00%	111	111
"	SWISS GOOD ENTERPRISES LIMITED	Hong Kong	"	3,183	3,183	101,281	100.00%	1,433,356	100.00%	163,015	163,015
CROWN MIND DEVELOPMENTS LIMITED	BLOSS WINNER LIMITED	"	Holding and investment	629,127	629,127	20,016,756	100.00%	6,778,671	100.00%	1,024,830	1,024,830
TAMH INVESTMENTS LIMITED	WANGDIEN INVESTMENTS LIMITED	"	Holding and investment	15,715	15,715	500,000	100.00%	323,064	100.00%	63,103	63,103
Juyou Investment Co., Ltd.	COMPER TUM MICROSYSTEMS INC.	Taiwan	Manufacturing of electronic components	-	77,852	-	%	-	-	(14,324)	Note 3
"	GOOD NEWS MEDICAL CO., LTD.	"	Manufacturing and sales of machinery and equipment, electronic components, and optical instruments	-	9,552	-	%	-	-	(1,564)	Note 3
"	Lintes Technology Co., Ltd.	"	Manufacturing of electronic components and other electrical and electronic machinery and equipment	-	746,361	-	%	-	-	-	42,929	Note 3
GOOD NEWS MEDICAL CO., LTD.	FELICITY NEWS LIMITED	British	Holding and investment	1,037	1,037	33,000	100.00%	985	100.00%	(27)	(27)
Lintes Technology Co., Ltd.	SENSE Precision Machining CO., LTD.	Taiwan	Manufacturing and sales of optical motifs	103,872	164,833	9,245,132	51.01%	91,596	60.00%	(4,229)	(6,380)
"	COMPER TUM MICROSYSTEMS INC.	"	Manufacturing of electronic component	30,965	25,938	2,511,820	9.94%	4,384	10.16%	(49,216)	(4,991)
"	LeRain Technology Co., Ltd.	"	Design, test and sale of chips	3,201	5,471	520,059	1.63%	4,707	1.82%	10,693	194
"	AsusChip Technologies CO., LTD.	"	"	11,764	11,764	647,020	3.24%	7,403	3.24%	(61,247)	(1,981)
"	BLOOMING CHANCE LIMITED	Saman	Holding and investment	155,579	155,579	4,950,000	100.00%	458,255	100.00%	20,969	14,089	Note 2
"	LINTEST TECHNOLOGY (THAILAND) CO., LTD.	Thailand	Manufacturing of electronic components and other electrical and electronic machinery and equipment	559,360	529,311	57,100,000	100.00%	443,306	100.00%	(57,216)	(57,216)
BLOOMING CHANCE LIMITED	RAIHANT DAY LIMITED	Saman	Holding and investment	155,579	155,579	4,950,000	100.00%	458,250	100.00%	20,964	14,084	Note 2

Note 1: Original investment amounts are translated into New Taiwan Dollars based on the exchange rates as of the balance sheet date.
Note 2: The investment profit or loss recognized in the current period includes adjustments for unrealized gains or losses from intercompany transactions within the Consolidated Company.
Note 3: Jiayou Investment Co., Ltd. was merged under a simplified merger on November 17, 2025, with the Company as the surviving entity.

Notes to the Consolidated Financial Statements (Continued)

(3) Information on Investment in China:

Names of investee companies in Mainland China, major business activities, and other related information:

Unit: NT$ thousands

Investee Company	Main Businesses and Products	Paid-in capital (Note 3)	Method of Investment (Note 1)	Accumulated investment amount remitted from Taiwan at the beginning of the fiscal period (Note 3)	Investment Flows		Accumulated investment amount remitted from Taiwan at the end of the fiscal period (Note 3)	Gain/loss of investee company in the fiscal period	Percentage of Ownership	Highest amount of shareholding or capital contribution during the period	Share of Profits/Losses (Note 3)	Carrying Amount at the beginning of the fiscal period	Accumulated $ I toward Remittance of Earnings as of the end of the fiscal period
					Outflow	Inflow
LOTES GUANGZHOU CO., LTD.	Manufacturing of connectors for the information industry, communications industry, and consumer electronics industry	839,181	(2)	801,403	-	-	801,403	1,964,583	100.00%	100.00%	1,926,319	14,954,868	-
LOTES SUZHOU CO., LTD	Manufacturing of connectors for the information industry, communications industry, and consumer electronics industry	628,261	(2)	628,261	-	-	628,261	1,024,829	100.00%	100.00%	1,030,366	6,745,816	-
THONGKHA TECHNOLOGY (SHENZHEN) CO., LTD.	R&D of electronics, import and export of raw materials of plastic products and plastic products	15,715	(2)	15,715	-	-	15,715	63,103	100.00%	100.00%	63,103	323,064	-
LOTES HENGNAN CO., LTD.	Manufacturing of connectors for the information industry, communications industry, and consumer electronics industry	1,310,584	(3)	-	-	-	-	365,906	100.00%	100.00%	385,133	2,574,402	-
LINTES TECHNOLOGY (SUZHOU) CO., LTD.	Development and production of the measurement instruments for optical communication, optical transceivers of 10GBs or above and relevant technical support	155,579	(2)	155,579	-	-	155,579	24,917	48.56%	48.56%	8,759	243,775	297,621
LOTES SHENZHEN CO., LTD.	Manufacturing of robotic arms, automation equipment and relevant components	112,400	(3)	-	-	-	-	76,661	100.00%	100.00%	76,661	288,933	-
LOTES ZHONGSHAN CO., LTD.	Manufacturing connectors for telecommunication industry and for consumer electronics industry, and manufacturing of robotic arms, automation equipment and relevant components	3,147,200	(2)	-	-	-	-	1,198,121	100.00%	100.00%	1,198,121	8,144,802	-
Zhongshan Dechi Metal Surface Treatment Co., Ltd.	Surface treatment of metal products and plastic products	274,256	(3)	-	-	-	-	8,148	100.00%	100.00%	8,148	357,621	-
Leixi (Hengnan) Business Development Co., LTD.	Development of real estate, lease of premises, landscape design and interior decorating	134,880	(3)	-	-	-	-	355	100.00%	100.00%	(165)	133,754	-
Zhongshan Jinmaido Metal Surface Treatment Co., Ltd.	Surface treatment of metal products and plastic products	289,003	(3)	-	-	-	-	(941)	100.00%	100.00%	(3,698)	338,121	-
Guangzhou Dechi Technology Co., Ltd.	Research and development, manufacturing, and sales of various types of equipment	2,248	(3)	-	-	-	-	(30)	100.00%	100.00%	(30)	2,123	-
Zhongshan Dechi Real Estate Development Co., Ltd.	Development of real estate, lease of premises, landscape design and interior decorating	359,680	(3)	-	-	-	-	65	100.00%	100.00%	(3,478)	343,845	-
LOTESPEED TECHNOLOGY (GUANGZHOU LTD)	Research, testing and development	21,131	(3)	-	-	-	-	133,234	100.00%	100.00%	133,234	460,738	-
CHONGGING FOISON ELECTRONIC TECHNOLOGY CO., LTD.	R&D and sales of electronic components, automobile components and accessories, computers and accessories, development of molds and the import and export of goods and technologies	7,194	(3)	-	-	-	-	6,311	51.00%	51.00%	3,219	15,877	-
Sky Comet Zhongshan Electronics Co., Ltd.	Manufacturing of connectors for the information industry, communications industry, and consumer electronics industry	34,619	(3)	-	-	-	-	65,869	30.06%	30.06%	19,803	23,039	-
Haili Electronics Technology (Ningbo) Co., Ltd.	Manufacturing of connectors for the information industry, communications industry, and consumer electronics industry	4,496	(3)	-	-	-	-	6,967	51.00%	51.00%	3,553	3,869	-
JIAISHMEI (GUANGZHOU) Trading Co., Ltd.	Engaging in the manufacture and sale of audio equipment, Class II medical devices, mechanical equipment, electronic components, and optical instruments	1,037	(2)	1,037	-	-	1,037	(27)	100.00%	100.00%	(27)	985	-

Note 1: There are six types of investments:
(1) Investment in Chinese Corporation via Third Region Remittance.
(2) Establishment of a company to reinvest in a continental company through a third regional investment.
(3) Reinvest in Chinese companies by re-investing in existing companies in third regions.
(4) Direct Investment
(5) Others.
(6) N/A.

Notes to the Consolidated Financial Statements (Continued)

Note 2: (1) The investment gain or loss recognized in the current period has been reconciled with the unrealized gain or loss from intercompany transactions.

(2) Basis of recognition of investment income and loss is divided into the following four categories, which should be noted:

A. Financial statements audited by an international accounting firm with a cooperative relationship with the CPA firms in Taiwan
B. Financial statements audited by the parent company's certified accountant in Taiwan
C. Financial statements audited by the subsidiary's certified accountant in Taiwan
D. Other

Note 3: The balance sheet date exchange rates are used to translate the paid-in capital and remittance of cumulative investment amounts into New Taiwan dollars.

Limit on Investment in Mainland China:

Company Name	Accumulated Investment in Mainland China as of December 31, 2025 (Note 1)	Investment Amounts Authorized by Investment Commission, MOEA (Note 1)	Upper Limit on Investment
Lotes Co., Ltd.	$1,445,441 thousand	$1,597,914 thousand	$23,066,305 thousand
Lintes Technology Co., Ltd.	$155,579 thousand	$155,579 thousand	$2,067,136 thousand
GOOD NEWS MEDICAL CO., LTD.	$1,037 thousand	$1,037 thousand	$11,580 thousand

Note 1: The conversions to NTD were made at the exchange rates prevailing on the balance sheet date.

Significant transactions with the investee companies in China:

For the year ended December 31, 2025, significant direct or indirect transactions with investee companies located in China (which have already been eliminated in the preparation of the consolidated financial statements) are disclosed in the sections "Information on Major Transactions" and "Business Relationships and Material Transactions Between Parent and Subsidiaries."

Notes to the Consolidated Financial Statements (Continued)

XIV. Segment Information

(1) General Information

The Company’s principal business activities include the trading of various hardware components and tool parts; the manufacturing, processing, and trading of terminals and related connector products; import and export of the aforementioned items; and acting as an agent for bidding, quotation, and distribution of products of domestic and foreign manufacturers related to the aforementioned businesses.

(2) Information on Reportable Segment Profit or Loss, Assets, Liabilities, and Measurement Basis and Reconciliation

The Consolidated Company’s key management decisions are based on financial information categorized by production regions for performance evaluation and resource allocation. After analysis, these regions meet the criteria for aggregation into a single operating segment. Accordingly, the Consolidated Company operates as a single reportable segment, and segment profit or loss, segment assets, and segment liabilities are consistent with those reported in the consolidated financial statements. Please refer to the consolidated balance sheets and consolidated statements of comprehensive income.

(3) Information by Product and Service

Revenue from external customers of the Consolidated Company is as follows:

Products and Services	2025	2024
Server	$ 13,256,422	10,295,267
DT	9,038,339	8,303,271
NB	3,708,991	3,663,470
Strategic Projects	2,991,817	2,991,195
LINTES(High Speed Cable)	1,492,289	2,229,617
Automotive	2,565,778	1,924,771
Others	729,775	681,401
Total	$ 33,783,411	30,088,992

Notes to the Consolidated Financial Statements (Continued)

(4) Geographical Information

The geographical information of the Consolidated Company is based on the location of customers and is presented as follows:

Region	2025	2024
Revenue from external customers:
Taiwan	$ 3,563,248	3,439,238
Mainland China	23,280,405	23,371,580
Other countries	6,939,758	3,278,174
Total	$ 33,783,411	30,088,992
Non-current assets:
Taiwan	$ 2,291,626	1,853,811
Mainland China	9,950,076	8,716,700
Other countries	3,757,172	3,002,832
Total	$ 15,998,874	13,573,343

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LOTES — Audit Report / Information 2025

52339_rns_2026-05-21_797d035a-e972-4615-97fa-e19ab1eafe73.pdf

Lotes Co., Ltd. and Subsidiaries

Representation Letter

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Lotes Co., Ltd. and Subsidiaries

Consolidated Statements of Changes in Equity

For the Years Ended December 31, 2025 and 2024

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

Lotes Co., Ltd. and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2025 and 2024

Unit: NT$ thousands

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

(2) Financial Assets

1. Financial Assets at FVTPL

2. Financial Assets at FVTOCI

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

(8) Property, Plant and Equipment

(10) Investment Property

Notes to the Consolidated Financial Statements (Continued)

2. Deferred Tax Assets and Liabilities

(1) Unrecognized Deferred Tax Assets

(21) Capital and Other Equity

1. Capital surplus

2. Retained earnings

(1) Legal reserve

(2) Special reserve

(3) Earnings distribution

Notes to the Consolidated Financial Statements (Continued)

(23) Earnings per share

(24) Revenue from Contracts with Customers

4. Financial costs

(26) Compensation to Employees and Directors

Notes to the Consolidated Financial Statements (Continued)

2. Liquidity risk

3. Market risk—exchange rate risk

(1) Exposure to exchange rate risk

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

VII. Related Party Transactions

XIII. Disclosing Information

(1) Information on Major Transactions

Notes to the Consolidated Financial Statements (Continued)

2. Endorsement/guarantee provided

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

Notes to the Consolidated Financial Statements (Continued)

XIV. Segment Information

(1) General Information

(2) Information on Reportable Segment Profit or Loss, Assets, Liabilities, and Measurement Basis and Reconciliation

(3) Information by Product and Service

(4) Geographical Information

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LOTES Audit Report / Information 2025