Stock code: 1410

Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Financial Statements and Independent Auditor's Report

2025 and 2024

Company Address: No. 233, Section 3, Nanshan Road, Shanjiao Li, Luzhu District, Taoyuan City

Tel: (03) 324-2321

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Table of Contents

Item	Page
1.Cover Page	1
2.Table of Contents	2
3.Declaration	3
4.Independent Auditor’s Report	4~7
5.Consolidated Balance Sheet	8
6.Consolidated Statement of Comprehensive Income	9
7.Consolidated Statement of Changes in Equity	10
8.Consolidated Cash Flow Statement	11~12
9.Notes to Consolidated Financial Statements
(1) Company History	13
(2) Financial Statement Approval Date and Procedures	13
(3) Application of New and Amended Standards and Interpretations	14~15
(4) Summary of Significant Accounting Policies	15~32
(5) The primary sources of significant accounting judgments, estimates, and assumptions uncertainty	33~34
(6) Notes on Significant Accounting Items	34~66
(7) Related Party Transactions	66
(8) Pledged Assets	66
(9) Significant contingent liabilities and unrecognized contractual commitments	66~67
(10) Losses From Major Disasters	67
(11) Major Post-balance Sheet Events	67
(12) Others	68
(13) Other Disclosures
1. Information Related to Significant Transactions	68~71
2. Information on investments in associated enterprises	71
3. Information on Mainland China investments	71
(14) Segment Information	71~74

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Declaration

For the fiscal year 2025 (from January 1 to December 31), the companies included in the preparation of the consolidated financial statements of affiliated enterprises, in accordance with the "Regulations Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises," are the same as those included in the preparation of the consolidated financial statements of parent and subsidiary companies under IFRS 10 as recognized by the Financial Supervisory Commission. Furthermore, the relevant information required to be disclosed in the consolidated financial statements of affiliated enterprises has already been disclosed in the aforementioned consolidated financial statements of the parent and subsidiary companies. Therefore, separate consolidated financial statements of affiliated enterprises are not prepared.

This declaration is solemnly made by:

Company Name: Nan Yang Dyeing & Finishing Co., Ltd.

Chairman:

Date: March 12, 2026

Independent Auditor’s Report

To the Board of Directors of Nan Yang Dyeing & Finishing Co., Ltd.:

Audit Opinions

We have audited the Consolidated Balance Sheet of Nan Yang Dyeing & Finishing Co., Ltd. and subsidiaries (collectively referred to as the Nan Yang Group) as of December 31, 2025 and the consolidated statement of comprehensive income, consolidated statement of changes in equity, consolidated cash flow statement, and the accompanying footnotes (including summary of key accounting policies) for the period January 1 to December 31, 2025.

In our opinion, all material disclosures of the Consolidated Financial Statements mentioned above were prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the version of the International Financial Reporting Standards, International Accounting Standards and interpretations thereof approved and published by the Financial Supervisory Commission R.O.C.(Taiwan) (FSC) and presented a fair view of the consolidated financial position of the Nan Yang Group as of December 31, 2025 and the consolidated business performance and cash flow for the period January 1 to December 31, 2025.

Basis of Audit Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and the generally accepted auditing principles. Our responsibilities as an auditor for the Consolidated Financial Statements under the abovementioned standards are explained in the Responsibilities paragraph. All relevant personnel of the accounting firm have followed the CPA code of ethics and maintained independence from the Nan Yang Group when performing their duties. We believe that the evidence obtained provides an adequate and appropriate basis for our opinion.

Key Audit Issues

Key audit issues are matters that we considered to be the most important, based on our professional judgment, when auditing the 2025 Consolidated Financial Statements of the Nan Yang Group. These issues have already been addressed when we audited and formed our opinions on the Consolidated Financial Statements. Therefore, we do not provide opinions separately for individual issues. Below are the key audit issues that we consider relevant for disclosure in this Audit Report:

semiconductor packaging and testing revenue

Regarding the accounting policy for revenue recognition, please refer to Note 4 (Thirteen), and for the explanation of significant accounting items, please refer to Note 6 (Eighteen)

Key Audit Matter Explanation:

Nan Yang Group is primarily engaged in semiconductor packaging and testing, dyeing and finishing processing, related product sales, and real estate leasing activities. Among these, semiconductor packaging and testing revenue is recognized based on the proportion of services provided as of the reporting date compared to the total services to be provided. This proportion is determined based on the ratio of services performed to the total services to be performed. Therefore, the accuracy of revenue recognition for semiconductor packaging and testing based on the completion ratio has a significant impact on the overall financial statements. Consequently, semiconductor packaging and testing revenue is a matter of high audit focus for the auditor in the audit of the financial statements of the Nan Yang Group.

Audit Procedures:

For the key audit issues mentioned above, we adopted audit procedures as deemed necessary to:

Understanding and testing the effectiveness of the internal control system design and implementation related to the aforementioned revenue recognition.
Randomly inspecting individual sales transactions, verifying customer orders, shipping documents, and sales invoices, etc., to confirm the reasonableness of the recognized revenue amounts.
Gathering summary reports of work-in-progress and finished goods inventory for semiconductor packaging and testing, understanding the methods of measuring completion, and recalculating service revenue recognized based on completion.

Other Matters

Nan Yang Dyeing & Finishing Co., Ltd. prepared Standalone Financial Statements for 2025 and 2024, to which we issued an Auditor’s Report with unqualified opinion.

Responsibilities of the Management and Governance Body to the Consolidated Financial Statements

Responsibilities of the management were to prepare and ensure fair presentation of Consolidated Financial Statements in accordance with the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” and the version of the IFRS, IAS, IFRIC and interpretations thereof approved and issued by the Financial Supervisory Commission R.O.C.(Taiwan) (FSC), and to exercise proper internal control practices that are relevant to the preparation of Consolidated Financial Statements so that the Consolidated Financial Statements are free of material misstatements, whether caused by fraud or error.

The management’s responsibilities when preparing Consolidated Financial Statements also involved assessing the ability of the Nan Yang Group to operate, disclose information, and account for transactions as a going concern unless the management intends to liquidate the Nan Yang Group or cease business operations, or is compelled to do so with no alternative solution.

The governance body of the Nan Yang Group (including supervisors) is responsible for supervising the financial reporting process.

Responsibilities of the Auditor When Auditing Consolidated Financial Statements

The purposes of our audit were to obtain reasonable assurance of whether the Consolidated Financial Statements were prone to material misstatements, whether due to fraud or error, and to issue a

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report of our audit opinions. We considered assurance to be reasonable only if it is highly credible. However, audit tasks conducted in accordance with generally accepted auditing principles do not necessarily guarantee detection of all material misstatements within the Consolidated Financial Statements. Misstatements can arise from fraud or error. Misstatements are considered material if the individual amount or aggregate total is reasonably expected to affect economic decisions of the user of the Consolidated Financial Statements.

When conducting audits in accordance with generally accepted auditing principles, we exercised judgments and raised doubts as deemed professionally appropriate. We also performed the following tasks as an auditor:

Identifying and assessing the risks of material misstatements due to fraud or error; designing and executing appropriate response measures for the identified risks; and obtaining adequate and appropriate audit evidence to support audit opinions. Fraud may involve conspiracy, forgery, intentional omission, untruthful declaration, or breach of internal control, and our audit did not find any material misstatements where the risk of fraud is greater than the risk of error.
Developing the required level of understanding on relevant internal controls and designing audit procedures that are appropriate under the prevailing circumstances, but without providing opinion on the effectiveness of the internal control system of the Nan Yang Group.
Assessing the appropriateness of accounting policies adopted by the management, and the rationality of accounting estimates and related disclosures made.
Forming conclusions regarding the appropriateness of the management's decision to account for the business as a going concern, and whether there are doubts or uncertainties about the ability of the Nan Yang Group to operate as a going concern, based on the audit evidence obtained. We are bound to remind users of Consolidated Financial Statements and make related disclosures if uncertainties exist in regards to the above mentioned events or circumstances, and amend audit opinions when the disclosures are no longer appropriate. Our conclusions are based on the audit evidence obtained up to the date of the Audit Report. However, future events or changes of circumstances may still render the Nan Yang Group no longer capable of operating as a going concern.
Assessing the overall presentation, structure, and contents of the Consolidated Financial Statements (including related footnotes), and whether certain transactions and events are presented appropriately in the Consolidated Financial Statements.
Obtaining sufficient and appropriate audit evidence on financial information of equity-accounted investments held by the group, and expressing opinions on the Consolidated Financial Statements. Our responsibilities as auditors are to instruct, supervise, and execute audits and form audit opinions on the group.

We have communicated with the governance body about the scope, timing, and significant findings (including significant defects identified in internal control) of our audit.

We have also provided the governance body with a declaration of independence stating that all relevant personnel of the accounting firm have complied with the auditors' professional ethics, and communicated with the governance body on all matters that may affect the auditor's independence (including protection measures).

We have identified the key audit issues after communicating with the governance body regarding the 2025 Consolidated Financial Statements of the Nan Yang Group. These issues have been addressed

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in our Audit Report except for: 1. Certain topics that are prohibited by law from being disclosed to the public; or 2. Under extreme circumstances, topics that we decide not to communicate in the Audit Report because of higher negative impacts they may cause than the benefits they bring to public interest.

KPMG

CPA:Vincent Yu

Lisa Luo

Approval
Reference of the
Securities
Authority
March 20, 2026

No. Jin-Guan-Zheng-Shen-
: 1010004977 1120333238

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Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Balance Sheet

As of December 31, 2025 and 2024

Unit: NTD thousands

Asset	Dec.31.2025		Dec.31.2024		Liabilities and Equity	Dec.31.2025		Dec.31.2024
		Amount	%	Amount			%	Amount	%	Amount	%
Current Assets:						Current Liabilities:
1100	Cash and Cash Equivalents (Note 6(1))	$ 404,866	32	500,006	38	2170	Notes and Accounts Payable	$ 7,168	1	8,496	1
1136	Financial Assets Carried at Amortized Cost - Current (Note 6 (4))	188,800	14	68,600	5	2230	Current Income Tax Liabilities	15,606	1	3,118	-
1140	Contract Assets - Current (Note 6(18))	2,990	-	2,992	-	2280	Lease Liabilities - Current (Note 6(12))	739	-	922	-
1170	Notes and Accounts Receivable - Net (Note 6(5) and18)	20,150	2	30,776	2	2300	Other Current Liabilities(Note 6(18))	17,430	1	19,787	1
130X	Inventory (Note 6(6))	18,657	1	31,386	2			40,943	3	32,323	2
1470	Other Current Assets (Note 6(14))	6,477	-	6,772	1	Non-current Liabilities:
	Total Current Assets	641,940	49	640,532	48	2570	Deferred Income Tax Liabilities	145,335	11	145,335	11
	Non-current Assets:					2580	Lease Liabilities - Non-current (Note 6(12))	6	-	662	-
1510	Financial Assets at Fair Value Through Profit or Loss - Non-current (Note 6(2))	19,034	1	31,236	3	2600	Other Non-current Liabilities	33,245	3	23,780	2
1517	Financial Assets at Fair Value Through Other Comprehensive Income - Non-current (Note 6(3))	-	-	435	-			178,586	14	169,777	13
1600	Property, Plants, and Equipment (Notes 6(9) and 8)	110,098	8	162,258	12	Total Liabilities		219,529	17	202,100	15
1755	Right-of-use Assets (Note 6(10))	735	-	1,576	-
1760	Investment Property - Net (Notes 6(11) and 8)	532,672	41	494,295	37	3100	Share Capital	620,000	47	630,000	47
1900	Other Non-current Assets	6,916	1	2,421	-	3200	Additional Paid-in Capital	23,095	2	22,358	2
		669,455	51	692,221	52	3300	Retained Earnings	416,047	31	438,334	33
						3400	Other Equity Items	(3,381)	-	(2,946)	-
								1,055,761	80	1,087,746	82
						36XX	Non-controlling Equity (Note 6(8))	36,105	3	42,907	3
						Total Equity		1,091,866	83	1,130,653	85
						Total Liabilities and Equity		$ 1,311,395	100	1,332,753	100

Chairman: Ho chun

Manager: H0 Cheng-Rong

Head of Accounting: Ou Biying

Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Statement of Comprehensive Income

For January 1 to December 31, 2025 and 2024

Unit: NTD thousands

		2025		2024
		Amount	%	Amount	%
4000	Operating Revenues (Note 6(18))	$ 189,008	100	236,718	100
5000	Operating Costs (Notes 6(6) and 14)	133,326	71	156,103	66
5900	Gross Profit	55,682	29	80,615	34
6000	Operating Expenses: (Notes 6(5), (14), (19))
6100	Selling and Marketing Expenses	3,850	2	5,279	2
6200	General and Administrative Expenses	54,669	29	54,397	23
6300	Research and Development Expenses	3,158	2	3,761	2
		61,677	33	63,437	27
6900	Operating Profit	(5,995)	(4)	17,178	7
7000	Non-operating Income and Expenses:
7100	Interest Income (Note 6(20))	12,391	7	15,388	7
7010	Other Income (Note 6(20))	47,117	25	1,074	-
7020	Other Gains and Losses (Note 6(20))	(7,967)	(4)	12,481	5
7050	Financial Cost (Note 6(12))	(377)	-	(340)	-
		51,164	28	28,603	12
7900	Profit Before Tax	45,169	24	45,781	19
7950	Less: Income Tax Expenses (Note 6(15))	15,881	8	9,042	4
8200	Current Net Income	29,288	16	36,739	15
8300	Other Comprehensive Income:
8310	Items Not Reclassified Into Profit or Loss
8311	Re-measurement of Defined Benefit Plan	811	-	597	-
8316	Unrealized Gains/Losses on Valuation of Equity Instruments at Fair Value Through
	Other Comprehensive Income	(435)	-	(1,218)	-
8349	Less: Income Tax on Items Not Reclassified Into Profit or Loss	-	-	-	-
8300	Other Comprehensive Income for the Current Year	376	-	(621)	-
8500	Total Comprehensive Income for the Current Period	$ 29,664	16	36,118	15
	Current Net Income Attributable To:
8610	Parent Company Shareholders	$ 36,377	20	35,841	15
8620	Non-controlling Shareholders	(7,089)	(4)	898	-
		$ 29,288	16	36,739	15
	Comprehensive Income Attributable To:
8710	Parent Company Shareholders	$ 36,616	20	35,120	15
8720	Non-controlling Shareholders	(6,952)	(4)	998	-
		$ 29,664	16	36,118	15
9750	Basic Earnings per Share (unit: NTD) (Note 6(16))	$	0.58		0.57
9850	Diluted Earnings per Share (unit: NTD) (Note 6(16))	$	0.58		0.57

(Please refer to the attached notes to the Consolidated Financial Statements.)

Chairman: Ho chun
Manager: HO Cheng-Rong
Head of Accounting: Ou Biying

Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Statement of Changes in Equity

For January 1 to December 31, 2025 and 2024

Unit: NTD thousands

Balance as of January 1, 2024

Earnings Appropriation and Distribution:

Provision for Statutory Reserve

Reversal of Special Reserve

Common Share Cash Dividends

Current Net Income

Other Comprehensive Income for the Current Year

Total Comprehensive Income for the Current Period

The difference between the actual acquisition or disposal price of subsidiary equity and the book value

Changes in non-controlling interests.

Disposal of equity instruments measured at fair value through other comprehensive income

Balance as of December 31, 2024

Earnings Appropriation and Distribution:

Provision for Statutory Reserve

Common Share Cash Dividends

Current Net Income

Other Comprehensive Income for the Current Year

Total Comprehensive Income for the Current Period

Repurchase of Treasury Shares

Cancellation of Treasury Shares

Changes in Ownership Interests in Subsidiaries

Balance as of December 31, 2025

Share Capital	Additional Paid-in Capital	Retained Earnings	Other Equity Items Unrealized Gain (Loss) on Financial Assets at Fair Value Through Other Comprehensive Income	Treasury Shares	Total Equity Attributable to Parent Company Shareholders	Non-controlling Shareholders	Total Equity
Statutory Reserve	Special Reserve	Unappropriated Earnings	Total Retained Earnings
$ 630,000	22,358	112,739	283,821	24,911	421,471	(2,320)	-
-	-	1,612	-	(1,612)	-	-	-
-	-	-	(1,513)	1,513	-	-	-
-	-	-	-	(18,900)	(18,900)	-	-
-	-	1,612	(1,513)	(18,999)	(18,900)	-	-
-	-	-	-	35,841	35,841	-	-
-	-	-	-	497	497	(1,218)	-
-	-	-	-	36,338	36,338	(1,218)	-
-	-	-	-	17	17	-	-
-	-	-	-	-	-	-	-
-	-	-	-	(592)	(592)	592	-
630,000	22,358	114,351	282,308	41,675	438,334	(2,946)	-
-	-	3,576	-	(3,576)	-	-	-
-	-	-	-	(31,500)	(31,500)	-	-
-	-	3,576	-	(35,076)	(31,500)	-	-
-	-	-	-	36,377	36,377	-	-
-	-	-	-	674	674	(435)	-
-	-	-	-	37,051	37,051	(435)	-
-	-	-	-	-	-	-	(37,838)
(10,000)		-	-	(27,838)	(27,838)	-	37,838
-	737	-	-	-	-	-	-
$ 620,000	23,095	117,927	282,308	15,812	416,047	(3,381)	-

(Please refer to the attached notes to the Consolidated Financial Statements.)

Chairman: H0 chun

Manager: H0 Cheng-Rong

Head of Accounting: Ou Biying

Nan Yang Dyeing & Finishing Co., Ltd.

Cash Flow Statement

For January 1 to December 31, 2025 and 2024

	Unit: NTD thousands
	2025	2024
Cash flow from operating activities:
Profit Before Tax for the Current Period	$ 45,169	45,781
Adjustments:
Income, Expenses, and Losses
Depreciation Expenses	23,221	22,980
Interest Expenses	377	340
Interest Income	(12,391)	(15,388)
Loss (Gain) on Disposal and Scrapping of Property, Plants, and Equipment	30	-
Fair value measurement of financial assets through profit or loss	(804)	(3,879)
Unrealized foreign exchange gain	9,672	(13,219)
Total Income, Expenses, and Losses	20,105	(9,166)
Change in assets/liabilities that are related to operating activities:
Contract assets	2	(1,292)
Notes and Accounts Receivable (including related parties)	10,626	(7,157)
Inventory	12,729	(218)
Other Current Assets	(400)	(374)
Total Net Change in Assets Related to Operating Activities	22,957	(9,041)
Notes and Accounts Payable	(1,328)	(3,149)
Other Payables	(1,948)	690
Other current Liabilities	478	(74)
Net defined benefit liability	(5,939)	597
Other Operating Liabilities	16,215	(8,000)
Total Net Change in Assets and Liabilities Related to Operating Activities	30,435	(18,977)
Total Adjustments	50,540	(28,143)
Cash Generated From Operations	95,709	17,638
Interest Received	13,086	12,825
Interest Paid	(377)	(340)
Income Tax Paid	(3,393)	(1,208)
Net Cash Inflow From Operating Activities	105,025	28,915

Chairman: Ho chun

Manager: H0 Cheng-Rong

Accounting Supervisor: Ou Biying

Nanyang Dyeing & Finishing Co., Ltd. and its subsidiaries.

Consolidated Statement of Cash Flows (continued)

For the Years Ended December 31,2025 and December 31, 2024, and for the Period from January 1 to December 31, 2025

Unit: NTDthousands

	2025	2024
Cash flows from investing activities:
Disposal of financial assets measured at fair value through other comprehensive income	-	3,350
Acquisition of financial assets measured at amortized cost	(120,200)	26,734
Acquisition of financial assets measured at fair value through profit or loss	13,006	(2,212)
Acquisition of property, plant, and equipment	(7,285)	(4,512)
Increase in other non-current assets	(5,735)	(1,246)
Net cash outflow (inflow) from investing activities	(120,214)	22,114
Cash flows from financing activities:
Repayment of lease principal	(941)	(926)
Payment of cash dividends	(31,500)	(18,900)
Cost of Treasury Shares	(37,838)	-
Acquisition of subsidiary equity	-	(337)
Net cash outflow from financing activities	(70,279)	(20,163)
Effect of exchange rate changes on cash and cash equivalents	(9,672)	13,219
The net increase (decrease) in cash and cash equivalents for the period	(95,140)	44,085
Opening balance of cash and cash equivalents	500,006	455,921
Closing balance of cash and cash equivalents	$ 404,866	500,006

(please refer to the detailed consolidated financial statements notes attached afterward)

Chairman: Ho chun

Manager: H0 Cheng-Rong

Accounting Supervisor: Ou Biying

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Nanyang Dyeing & Finishing Co., Ltd. and its subsidiaries.
For the years 2025 and 2024 of
(Unless otherwise stated, all amounts are in New Taiwan Dollars in thousands)

Corporate History:
Nanyang Dyeing & Finishing Co., Ltd. (hereinafter referred to as "the Company") was established on December 22, 1964, with approval from the Ministry of Economic Affairs. The registered address is No. 233, Section 3, Nanshan Road, Luzhu District, Taoyuan City. The Company and its subsidiaries (hereinafter collectively referred to as the "Group") "The primary business activities include real estate rental operations and semiconductor packaging and testing services.
Date and Procedure of Financial Report Approval:
This consolidated financial report was approved and released by the Board of Directors on March 12, 2025.
Application of Newly Issued and Revised Standards and Interpretations
(1) Effects of Newly Adopted Standards and Interpretations Approved by the Financial Supervisory Commission
The Group has applied the following newly revised International Financial Reporting Standards (IFRS) since January 1, 2025, which did not have a significant impact on the consolidated financial statements:
Amendments to IAS 21 "Lack of Exchangeability"
(2) Effects of IFRS Not Yet Adopted and Approved by the Financial Supervisory Commission
The Group has evaluated the following new amendments to IFRS, which will be effective from January 1, 2025, and determined that they will not 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 IFRS Accounting Standards
Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(3) Standards and Interpretations Issued or Amended by the IASB but Not Yet Endorsed by the FSC and Potentially Relevant to the Group Are as Follows:

Newly Issued or Amended Standards	Key Amendments	Effective Date as Announced by the IASB
IFRS 18
“Presentation and Disclosure in Financial Statements	The new standard introduces three categories of income and expenses, two subtotals in the statement of profit or loss, and a single note dedicated to management performance measures. These three key amendments, along with enhanced guidance on the disaggregation of information in financial statements, establish a stronger and more consistent foundation for presenting useful and comparable information to users. The changes will have an impact on all entities

• A More Structured Statement of Profit or Loss:
Under current standards, entities apply varying formats when presenting performance, which hinders comparability across entities. IFRS 18 introduces a more structured approach to the statement of profit or loss by defining a new subtotal, Operating Profit, and requiring all income and expenses to be classified into three newly defined categories based on the entity’s main business activities.

• Management Performance Measures (MPMs):
The standard introduces a definition of Management Performance Measures and requires entities to disclose, in a single note to the financial statements, each MPM used. For each measure, entities must explain why it provides useful information, how it is calculated, and how it reconciles to the amounts recognized in accordance with IFRS.

• More Granular Information:
IFRS 18 provides enhanced guidance on the disaggregation of information in the financial statements. This includes clearer direction on whether information should be presented in the primary statements or in the notes, supporting better classification and communication of financial data. | January 1, 2027
Note: The Financial Supervisory Commission announced in a press release dated September 25, 2025 that Taiwan will adopt IFRS 18 starting from the 2028 fiscal year. Companies may elect for early adoption upon approval by the Financial Supervisory Commission if they have such a need. |

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The Group is currently evaluating the potential impact of the above standards and interpretations on its financial position and results of operations. The related effects will be disclosed once the assessment is complete.

The Group expects that the following newly issued but not yet endorsed standards and amendments 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"

4. Summary of Significant Accounting Policies

This consolidated financial report follows the guidelines of the Financial Statements of Securities Issuers (hereinafter referred to as the "Preparation Standards"), as well as International Financial Reporting Standards (IFRS) approved by the Financial Supervisory Commission, including International Accounting Standards, Interpretations, and Interpretation Bulletins (hereinafter referred to as "IFRS Accounting Standards approved by the Financial Supervisory Commission").

(1) Compliance Statement:

This consolidated financial report is prepared in accordance with the Financial Statements of Securities Issuers (hereinafter referred to as the "Preparation Standards"), as well as International Financial Reporting Standards (IFRS) approved by the Financial Supervisory Commission, including International Accounting Standards, Interpretations, and Interpretation Bulletins (hereinafter referred to as "IFRS Accounting Standards approved by the Financial Supervisory Commission").

(2) Basis of Preparation:

Measurement Basis:

Except for significant items on the balance sheet, this consolidated financial report is prepared on a historical cost basis:

(1) Financial assets measured at fair value through profit or loss
(2) Financial assets measured at fair value through other comprehensive income
(3) Net defined benefit liability (or asset), measured by deducting the fair value of retirement fund assets from the present value of defined benefit obligations.

Functional Currency and Presentation Currency:

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The Group uses the currency of the primary economic environment in which it operates as its functional currency. This consolidated financial report is presented in New Taiwan Dollars, the functional currency of the Company. All financial information expressed in New Taiwan Dollars is in thousands of New Taiwan Dollars.

(3) Consolidation Basis:

Principles of Preparation of Consolidated Financial Statements:

The preparation of the consolidated financial statements includes the Company and entities controlled by the Company (i.e., subsidiaries). Control exists when the Company is exposed to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. From the date control is obtained over a subsidiary, its financial statements are included in the consolidated financial statements until the date when control is lost. Intercompany transactions, balances, and any unrealized gains and losses are eliminated in full when preparing the consolidated financial statements. The total comprehensive income of subsidiaries is attributed separately to the owners of the Company and non-controlling interests, even if non-controlling interests result in a deficit balance. The financial statements of subsidiaries are appropriately adjusted to ensure that their accounting policies are consistent with those used by the Group. Changes in the ownership interests of subsidiaries that do not result in a loss of control are accounted for as transactions with owners. Adjustments to non-controlling interests arising from the difference between the consideration paid or received and the fair value of the net assets acquired or disposed of are recognized directly in equity and attributed to the owners of the Company.

Included Subsidiaries in the Consolidated Financial Statements

The subsidiaries included in this consolidated financial report are as follows:

Investment Company Name	Subsidiary Company Name	Nature of Business	Percentage of Equity Ownership
			Dec.31.2025	Dec.31.2024
Our Company	NanYan Semiconductor Co., Ltd.	Specialized in communication	83.14%	83.14%
		semiconductor packaging and testing outsourcing

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Subsidiaries Excluded from the Consolidated Financial Statements: None

(4) Foreign Currency:

Transactions denominated in foreign currencies are translated into the functional currency at the exchange rates prevailing on the transaction dates. Monetary items denominated in foreign currencies at each reporting date are translated into the functional currency at the exchange rates prevailing at the reporting date. Non-monetary items denominated in foreign currencies and measured at fair value are translated into the functional currency at the exchange rates prevailing on the dates of measurement. Non-monetary items denominated in foreign currencies and measured at historical cost are translated into the functional currency at the exchange rates prevailing on the transaction dates.

Exchange differences arising from the translation of foreign currency transactions are generally recognized in profit or loss. However, the following situations are recognized in other comprehensive income:

(1) Designated equity instruments measured at fair value through other comprehensive income;

(2) Designated financial liabilities for the net investment in a foreign operation within the scope of a net investment hedge; or

(3) Qualifying cash flow hedges within the scope of an effective cash flow hedge.

(5) Criteria for Classification of Assets and Liabilities into Current and Non-current:

Assets are classified as current assets if they meet any of the following conditions:

It is expected to be realized or consumed in the normal operating cycle of the business or intended for sale or consumption;
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 cash equivalents, but there are restrictions on its use or exchange for at least twelve months after the reporting period to settle a liability.

Liabilities are classified as current liabilities if they meet any of the following conditions:

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

~18~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

permit the issuer to settle it by issuing equity instruments at the option of the counterparty, do not affect its classification.

(6) Cash and Cash Equivalents:

Cash includes cash on hand and demand deposits. Cash equivalents are short-term, highly liquid investments that are readily convertible to known amounts of cash and subject to insignificant risk of changes in value. Term deposits meeting the above criteria and held for the purpose of meeting short-term cash commitments rather than for investment or other purposes are reported as cash equivalents.

(7) Financial Instruments

Accounts receivable and issued debt securities are recognized at inception. All other financial assets and financial liabilities are recognized at inception when the merging companies become parties to the financial instrument contracts. Financial assets measured at fair value through other comprehensive income (excluding accounts receivable not including significant financial components) or financial liabilities are initially measured at fair value plus directly attributable transaction costs related to the acquisition or issuance. Accounts receivable not including significant financial components are initially measured at transaction price.

Financial Assets

Financial assets purchased or sold in customary transactions are accounted for on the transaction date consistently for all financial assets classified in the same manner by the merging companies. At initial recognition, financial assets are classified as financial assets measured at amortized cost, equity instruments measured at fair value through other comprehensive income, or financial assets measured at fair value through profit or loss. The merging companies only reclassify all affected financial assets from the first day of the next reporting period when there is a change in the management of financial assets.

(1) Financial Assets Measured at Amortized Cost

Financial assets are measured at amortized cost when they simultaneously meet the following conditions and are not designated at fair value through profit or loss:

They are held under a business model with the objective of collecting contractual cash flows.
The contractual terms of the financial asset give rise to cash flows on specified dates that are solely payments of principal and interest on the outstanding

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

principal amount.

These assets are subsequently measured at the original recognition amount plus or minus the cumulative amortization calculated using the effective interest method, and any impairment losses recognized are adjusted for in the amortized cost measurement. Interest income, foreign exchange gains and losses, and impairment losses are recognized in profit or loss. Upon derecognition, any gains or losses are also recognized in profit or loss

(2) Financial Assets Measured at Fair Value Through Other Comprehensive Income

At initial recognition, the merging companies may make an irrevocable election to recognize subsequent fair value changes of equity instruments not held for trading in other comprehensive income. This election is made on an instrument-by-instrument basis. Debt instruments are subsequently measured 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, while the remaining net gains or losses are recognized in other comprehensive income. Upon derecognition, the cumulative amount of other comprehensive income is reclassified to profit or loss.

equity instruments are subsequently measured at fair value. Dividend income (unless it clearly represents a recovery of part of the investment cost) is recognized in profit or loss. The remaining net gains or losses are recognized in other comprehensive income and are not reclassified to profit or loss upon derecognition.

For equity instrument investors, subsequent measurement is at fair value. Dividend income (unless it clearly represents a recovery of part of the investment cost) is recognized in profit or loss. The remaining 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 on the date the merging companies have the right to receive dividends (usually ex-dividend date).

(3) Financial Assets Measured at Fair Value Through Profit or Loss

Financial assets not classified as measured at amortized cost or measured at fair value through other comprehensive income are measured at fair value through profit or loss. At initial recognition, the merging companies may irrevocably designate financial assets meeting the criteria for measured at amortized cost or measured at fair value through other comprehensive income

~20~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

as financial assets measured at fair value through profit or loss to eliminate or significantly reduce inappropriate accounting mismatches.

These assets are subsequently measured at fair value, and their net gains or losses (including any dividend and interest income) are recognized in profit or loss.

(4) Impairment of Financial Assets

The merging companies recognize allowances for expected credit losses for financial assets measured at amortized cost (including cash and cash equivalents, financial assets measured at amortized cost, receivables and accounts receivable, other receivables, deposits held as collateral, and other financial assets) and contract assets.

Allowances for receivables and contract assets are measured at the expected credit losses over the remaining term.

When determining whether the credit risk has significantly increased since initial recognition, the merging companies consider reasonable and supportable information (obtained without undue cost or effort), including qualitative and quantitative information, and analyses based on the merging companies' historical experience, credit evaluations, and forward-looking information.

Expected credit losses over the remaining term refer to the expected credit losses arising from all possible default events over the expected remaining term of the financial instrument.

The twelve-month expected credit loss refers to the expected credit loss arising from default events that may occur within twelve months after the reporting date of the financial instrument (or a shorter period if the expected remaining term of the financial instrument is shorter than twelve months).

The longest period for measuring expected credit losses is the longest contract period to which the merging companies are exposed to credit risk.

Expected credit losses are the probability-weighted estimate of credit losses over the expected remaining term of the financial instrument. Credit losses are measured at the present value of all cash shortfalls, which is the difference between the cash flows that the merging companies are entitled to receive under the contract and the cash flows that the merging companies expect to receive. Expected credit losses are discounted at the effective interest rate of the financial asset.

On each reporting date, the merging companies assess whether there is credit

~21~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

impairment for financial assets measured at amortized cost. Credit impairment exists when there is evidence that one or more events have occurred that have a detrimental impact on the estimated future cash flows of the financial asset. Evidence of credit impairment for financial assets includes observable data related to the following matters:

Default, such as delays or overdue payments exceeding one hundred and eighty days;
Economic or contractual reasons related to the borrower's financial difficulties, where the merging companies grant concessions that they would not have considered originally;
The borrower is highly likely to file for bankruptcy or undergo other financial restructuring; or
The active market for the financial asset has disappeared due to financial difficulties.

The allowance for impairment losses for financial assets measured at amortized cost is deducted from the carrying amount of the asset.

When the merging companies cannot reasonably expect to recover the financial asset in whole or in part, they directly reduce its total carrying amount. For corporate clients, the merging companies individually analyze the timing and amount of write-offs based on whether recovery can be reasonably expected. The merging companies do not anticipate significant reversals of amounts already written off. However, the written-off financial assets remain enforceable to comply with procedures for recovering overdue amounts.

(5) Derecognition of Financial Assets

The merging companies only derecognize financial assets when the contractual rights to cash flows from the asset expire, or when they have transferred the financial asset and substantially all risks and rewards of ownership of the asset have been transferred to another entity, or when they neither transfer nor retain substantially all risks and rewards of ownership and do not retain control of the financial asset.

In transactions where the merging companies transfer financial assets, if they retain all or substantially all risks and rewards of ownership of the transferred asset, it continues to be recognized on the balance sheet.

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Financial Liabilities and Equity Instruments

(1) Classification of Liabilities or Equity

Debts and equity instruments issued by the merging companies are classified as financial liabilities or equity based on the substance of the contract and the definitions of financial liabilities and equity instruments.

(2) Equity Transactions

Equity instruments refer to any contract that represents the residual interest in the assets of the merging companies after deducting all liabilities. Equity instruments issued by the merging companies are recognized at the amount received, net of directly attributable issuance costs.

(3) Treasury Shares

When the 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 disposal or reissuance of treasury shares is recognized as an increase in equity, and the difference arising from such transactions is recognized in capital surplus or retained earnings (if the capital surplus is insufficient to offset the deficit).

(4) Financial Liabilities

Financial liabilities are classified as measured at amortized cost or at fair value through profit or loss. If financial liabilities are held for trading, derivative instruments, or designated at initial recognition, they are classified as measured at fair value through profit or loss. Financial liabilities measured at fair value through profit or loss are measured at fair value, and related net gains and losses, including any interest expenses, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expenses and foreign exchange gains or losses are recognized in profit or loss. Any gains or losses upon derecognition are also recognized in profit or loss.

(5) Derecognition of Financial Liabilities

Financial liabilities are derecognized when the contractual obligations are fulfilled, canceled, or expired. When the terms of financial liabilities are modified and there is a significant difference in the cash flows of the modified liability, the

~22~

~23~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

original financial liability is derecognized, and the new financial liability is recognized at fair value based on the modified terms.

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

(6) Netting of Financial Assets and Liabilities

Financial assets and financial liabilities are netted and presented on the balance sheet of the merging companies only when there is currently a legally enforceable right to offset and an intention to settle the assets and liabilities on a net basis or simultaneously realize assets and liquidate liabilities.

(8) Inventory

Inventory is measured at the lower of cost and net realizable value. Cost includes the acquisition, production, or processing costs incurred to bring the inventory to its current location and condition, as well as other costs, and is calculated using the weighted average method. For finished goods and work in progress inventory, the cost includes manufacturing overheads allocated based on normal production capacity.

Net realizable value refers to 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) Investment Property

Investment property refers to property held to earn rental income, for 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 impairment losses. The depreciation method, useful lives, and residual values are determined in accordance with the provisions for property, plant, and equipment.

Gains or losses on the disposal of investment property (calculated as the difference between the net disposal proceeds and the carrying amount of the item) are recognized in profit or loss.

Rental income from investment property is recognized on a straight-line basis over the lease term as part of operating income. Lease incentives granted are recognized as a component of lease income over the lease term.

~24~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(10) Property, Plant, and Equipment

Recognition and Measurement

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

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

Gains or losses on the disposal of property, plant, and equipment are recognized in profit or loss.

Subsequent Costs

Subsequent expenditures are capitalized only when it is probable that future economic benefits will flow to the merging companies.

Depreciation

Depreciation is calculated based on the asset's cost less residual value and is recognized in profit or loss over the estimated useful lives of each component using the straight-line method.

Land is not subject to depreciation.

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

(1) Building Construction: 2-52 years
(2) Machinery and Equipment: 1-40 years
(3) Office Equipment: 5-8 years
(4) Other Equipment: 3-15 years

The merging companies review the depreciation method, useful lives, and residual values on each reporting date, and make appropriate adjustments when necessary.

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(11) Leases

The merging companies assess whether a contract is or contains a lease on the contract inception date. If the contract transfers the right to control the use of an identified asset for a period of time in exchange for consideration, then the contract is or contains a lease.

1. Lessee

Upon the lease commencement date, the merging companies recognize the right-of-use asset and lease liability. The right-of-use asset is initially measured at cost, which includes the initial measurement of the lease liability, adjusted for any lease payments made before or on the lease commencement date, plus any initial direct costs incurred, and an estimate of costs to dismantle, remove, and restore the asset or its location, less any lease incentives received. Depreciation on the right-of-use asset is recognized on a straight-line basis over the shorter of the lease term or the asset's useful life from the lease commencement date. Additionally, the merging companies regularly assess whether the right-of-use asset is impaired and recognize any impairment loss, adjusting the right-of-use asset if the lease liability is remeasured.

The lease liability is initially measured at the present value of lease payments unpaid at the lease commencement date. If the lease's implicit rate is readily determinable, the discount rate is that rate; otherwise, the merging companies use their incremental borrowing rate. Generally, the merging companies use their incremental borrowing rate as the discount rate.

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

(1) Fixed payments, including substantive fixed payments;
(2) Variable lease payments based on an index or rate, using the index or rate at the lease commencement date for initial measurement;
(3) Estimated residual value guarantees; and
(4) Exercise price or penalties payable when reasonably certain of exercising a purchase option or termination option at the end of the lease term.

The lease liability is subsequently measured using the effective interest method, and its amount is remeasured when the following events occur:

(1) Changes in the index or rate used to determine lease payments result in future lease payment variations;
(2) Changes in estimated residual value guarantees;

~25~

~26~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(3) Changes in the assessment of purchase options for the leased asset;
(4) Changes in estimates regarding the exercise of extension or termination options, altering the assessment of the lease term;
(5) Modifications to the leased asset, scope, or other terms.

When the lease liability is remeasured due to changes in the index or rate used to determine lease payments, changes in residual value guarantees, and changes in the assessment of purchase, extension, or termination options, the corresponding adjustment is made to the carrying amount of the right-of-use asset. When 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 reducing the scope of the lease, the carrying amount of the right-of-use asset is reduced to reflect partial or full termination of the lease, and the difference between this amount and the remeasured lease liability is recognized in profit or loss.

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

In agreements comprising both lease and non-lease components, the consolidated company allocates the consideration in the contract to individual lease components based on their relative standalone prices. However, when leasing land and buildings, the consolidated company chooses not to separate non-lease components and treats lease and non-lease components as a single lease component.

For short-term leases of machinery and office equipment, and leases of low-value assets, the consolidated company chooses not to recognize right-of-use assets and lease liabilities. Instead, it expenses the related lease payments on a straight-line basis over the lease term.

The consolidated company, for all rent concessions meeting the following conditions, chooses to adopt a practical expedient and does not assess whether they constitute lease modifications:

(1) Rent concessions occurring directly as a result of the COVID-19 pandemic;
(2) Changes in lease payments resulting in a revised consideration that is nearly the same as or less than the consideration before the change;
(3) Any reductions in lease payments affecting only payments originally due before June 30, 2024, and

~27~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(4) No substantial changes in other terms and conditions of the lease.

Under the practical expedient, when rent concessions result in changes to lease payments, the change is recognized in profit or loss when the event or circumstance triggering the rent concession occurs.

Lessor

For transactions where the consolidated company acts as a lessor, the lease contract is classified into finance leases or operating leases based on whether substantially all the risks and rewards incidental to ownership of the leased asset are transferred to the lessee at the inception of the lease. If so, it is classified as a finance lease; otherwise, it is classified as an operating lease. In the evaluation process, the consolidated company considers specific indicators, including whether the lease term covers a major part of the economic life of the leased asset.

If the consolidated company is a sublessor, it separately accounts for the head lease and the sublease transaction, and categorizes the sublease transaction based on the usage rights assets generated by the head lease. If the head lease is a short-term lease and qualifies for recognition exemption, the sublease transaction should be classified as an operating lease.

If the agreement includes both lease and non-lease components, the consolidated company apportions the consideration in the contract in accordance with the requirements of International Financial Reporting Standard 16.

(12) Non-financial asset impairment assessment:

The consolidated company evaluates on each reporting date whether there are indications that the carrying amount of non-financial assets (excluding inventories, contract assets, and deferred tax assets) may be impaired. If any indication exists, then the recoverable amount of that asset is estimated.

For impairment testing purposes, a group of assets that generates cash flows that are largely independent of the cash flows from other individual assets or asset groups is identified as the smallest identifiable group of assets. Goodwill arising from business combinations is allocated to each cash-generating unit or group of cash-generating units that are expected to benefit from the synergies of the combination.

~28~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The recoverable amount is the higher of the fair value less costs to sell and the value in use for an individual asset or cash-generating unit. When assessing the value in use, future cash flows are estimated and discounted to present value using a pre-tax discount rate that reflects the market's assessment of the time value of money and the specific risks associated with the asset or cash-generating unit.

If the recoverable amount of an individual asset or cash-generating unit is less than its carrying amount, an impairment loss is recognized. The impairment loss is immediately recognized in the income statement. It first reduces the carrying amount of any goodwill allocated to the cash-generating unit, and then reduces the carrying amounts of the other assets within that unit on a pro-rata basis.

(13) Recognition of Revenue

Revenue from Customer Contracts

Revenue is measured at the amount of consideration expected to be received in exchange for transferring goods or services. The Company recognizes revenue when control of the goods or services is transferred to the customer and the performance obligations are satisfied. The Company provides the following explanation based on its primary revenue streams:

(1) Sales of Goods

Revenue from sales of goods is recognized when the product is transferred to the customer, which typically occurs upon delivery. Revenue is recognized when the customer accepts the product under the sales contract, or when there is objective evidence that all acceptance criteria have been met. Revenue from the sale of products is recognized at the contract price. Payment terms for sales transactions are typically 30 to 90 days after shipment. Since the interval between transferring the promised products to the customer and the customer's payment does not exceed one year, the Company does not adjust the transaction price to reflect the time value of money. The Company recognizes accounts receivable upon delivery of goods, as it has an unconditional right to receive consideration at that point.

(2) Lease revenue for the Company consists of the lease income from operating leases, net of any incentives provided to lessees. This revenue is recognized over the lease term on a straight-line basis, amortized and recorded as income in the current period.

The lease revenue of the Company represents the lease income from

~29~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

operating leases, net of any incentives provided to lessees. It is recognized on a straight-line basis over the lease term and recorded as income in the current period.

(3) Revenue from services

The Company provides semiconductor packaging and testing services, and recognizes revenue related to these services during the financial reporting period in which the services are provided. Revenue from fixed-price contracts is recognized based on the proportion of services provided as of the reporting date relative to the total services to be provided, determined by the ratio of services performed to the total services to be performed.

Under fixed-price contracts, customers pay a fixed amount according to the agreed-upon schedule. When services provided exceed payments received, a contract asset is recognized. Conversely, if payments exceed services provided, a contract liability is recognized.

(4) Financial Components

The Company expects that the time between transferring goods or services to customers and customers making payments for those goods or services does not exceed one year for all customer contracts. Therefore, the Company does not adjust the transaction price for the time value of money.

(14) Employee benefits typically encompass various forms of compensation and services provided to employees in addition to their regular salaries or wages. These benefits can include health insurance, retirement plans, paid time off (such as vacation and sick leave), bonuses, profit-sharing, stock options, and other perks like employee discounts, wellness programs, and educational assistance.

Defined Contribution Plan

The "Defined Contribution Plan" translated to English is "Defined Contribution Plan." The contribution obligation under the defined contribution plan is recognized as an expense during the period in which employees provide services. Prepayments of contributions that will result in cash refunds or reduce future payments are recognized as an asset within the scope of reimbursement or reduction of future payments.

Defined Benefit Plan

The net obligation of the defined benefit plan for the combined company is calculated separately for each benefit plan by discounting the future benefit

~30~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

amounts earned by employees for their service in the current or prior periods to present value, and subtracting any fair value of plan assets.

The defined benefit obligation is determined annually by a qualified actuary using the projected unit credit method. When the calculation results in a favorable outcome for the combined company, an asset is recognized, limited to the present value of any economic benefits that can be obtained from refunds of contributions to the plan or reductions in future contributions to the plan. When calculating the present value of economic benefits, any minimum funding requirements are taken into account.

The remeasurement of the net defined benefit liability, including actuarial gains and losses, returns on plan assets (excluding interest), and any changes in the asset ceiling, is immediately recognized in other comprehensive income and accumulated in retained earnings. The net interest expense (income) on the net defined benefit liability (asset) is determined using the net defined benefit liability (asset) and the discount rate at the beginning of the annual reporting period. The net interest expense and other expenses related to the defined benefit plans are recognized in the income statement.

When there are plan amendments or curtailments, any resulting changes in benefits related to past service costs or curtailment gains or losses are immediately recognized in the income statement. Upon settlement, the Company recognizes the settlement gains or losses related to the defined benefit plan.

Short-term employee benefits refer to benefits such as wages, salaries, social security contributions, and short-term compensated absences that an entity expects to pay within twelve months after the end of the period in which the employees render the related service.

Short-term employee benefit obligations are recognized as expenses when the service is provided. If the Company has a present legal or constructive obligation as a result of past service by employees, and the obligation can be reliably estimated, the amount is recognized as a liability.

(15) Income tax is a tax levied on the income of individuals or entities by the government. It is typically calculated as a percentage of taxable income and is paid to the government to fund public services and government operations. Companies are required to report their income and pay taxes on their profits according to the tax laws of the jurisdiction in which they operate. They often engage in tax planning

~31~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

activities to minimize their tax liabilities within the bounds of the law.

Income tax comprises current and deferred income taxes. Except for items related to business combinations, directly recognized in equity, or other comprehensive income, both current and deferred income taxes should be recognized in the income statement.

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

The deferred income tax is recognized for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases. Deferred income tax is not recognized for temporary differences in the following situations:

Assets or liabilities recognized at the inception of transactions that are not business combinations and do not affect accounting profit or taxable income (loss) at the time of the transaction.
Temporary differences arising from investments in subsidiaries, associates, and joint ventures for which the parent company can control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future.
Temporary differences related to the recognition of goodwill at the time of initial recognition.

Unused tax losses and unused tax credits for which deferred tax assets are recognized to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credits can be utilized. These are reassessed at each reporting date, and the carrying amount of the deferred tax asset is reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Conversely, previously reduced amounts are reversed to the extent that it becomes probable that sufficient taxable profit will be available.

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

~32~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The company only offsets deferred tax assets and deferred tax liabilities when both of the following conditions are met simultaneously: :

There is a legally enforceable right to offset current tax assets and current tax liabilities; and
Deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on one of the taxable entities.

(1) The same taxable entity; or
(2) Different taxable entities, but each entity intends to settle the current tax liabilities and assets on a net basis for each future period in which significant amounts of deferred tax assets are expected to be recovered and deferred tax liabilities are expected to be settled, or simultaneously realize assets and settle liabilities.

(16) Earnings per share

The company presents both basic and diluted earnings per share attributable to equity holders of the parent company. Basic earnings per share are calculated by dividing the profit attributable to equity holders of the parent company by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share are calculated by adjusting the profit attributable to equity holders of the parent company and the weighted average number of ordinary shares outstanding for the potential dilution effect of all dilutive potential ordinary shares. Potential dilutive ordinary shares of the company include estimated employee compensation.

(17) Departmental information includes financial and operational data related to various departments or business units within a company, allowing management and investors to understand the performance of different segments. This information may include:

The operational departments are integral parts of The Group engaged in activities that generate revenue and incur expenses (including transactions with other components within The Group). The operational results of all departments are periodically reviewed by the main operational decision-makers of The Group to allocate resources to the department and evaluate its performance. Each operational department has separate financial information.

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

5. The primary sources of significant accounting judgments, estimates, and assumptions uncertainty include:

When preparing these consolidated financial statements, management must make judgments, estimates, and assumptions that affect the reported amounts of assets, liabilities, income, and expenses, as well as the accounting policies adopted. Actual results may differ from these estimates.

Management continuously reviews estimates and underlying assumptions, which are consistent with the Group's risk management practices and climate-related commitments. Changes in estimates are recognized prospectively in the period of the change and in any future periods affected.

The following assumptions and estimates entail significant uncertainty that could lead to material adjustments to the carrying amounts of assets and liabilities in the next financial year. The relevant information is as follows:

(1) Revenue Recognition

Revenue from fixed-price contracts is recognized based on the proportion of services provided to the total services required as of the reporting date. This proportion is determined by the ratio of services performed to the total services to be performed.

The accounting policies and disclosures of the consolidated company include the use of fair value measurements for its financial and non-financial assets and liabilities. The consolidated company has established internal control systems for fair value measurement, including the creation of a valuation committee responsible for reviewing all significant fair value measurements (including Level 3 fair values) and reporting directly to the Chief Financial Officer. The valuation committee regularly reviews significant unobservable inputs and adjustments. If external third-party information (such as brokers or pricing service providers) is used for measuring fair value inputs, the valuation committee evaluates the evidence supporting the inputs provided by third parties to ensure that the valuation and its fair value level classification comply with the requirements of International Financial Reporting Standards.

When measuring its assets and liabilities, the consolidated company strives to use observable inputs to the extent possible. The classification of fair value levels is based on the inputs used by the valuation techniques as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for

~34~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices).

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

In the event of transfers between levels of the fair value hierarchy or circumstances related to fair value levels, the consolidated company recognizes such transfers as of the reporting date.

For information on the assumptions used in measuring fair value, please refer to Note 6(21) Financial Instruments.

6 \ Notes on Significant Accounting Items

(1) Cash and Cash Equivalents

	Dec. 31, 2025	Dec. 31, 2024
Cash on hand and demand deposits	$ 185,276	94,631
Time deposits	219,590	405,375
Cash and cash equivalents as listed in the consolidated statement of cash flows	$ 404,866	500,006

Disclosure of interest rate risk and sensitivity analysis of combined company financial assets and liabilities please refer to Note 6(21) for details.

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

	Dec. 31, 2025	Dec. 31, 2024
Financial assets mandatorily measured at fair value through profit or loss:
Non-current
Foreign corporate bonds	$ 14,568	28,431
Gold Passbook Account	4,466	2,805
	$ 19,034	31,236

The amount recognized in profit or loss for financial assets remeasured at fair value please refer to Note 6(21) for details.

As of December 31, 2025 and December 31, 2024, none of the above financial assets were pledged as collateral.

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(3) Financial assets measured at fair value through other comprehensive income

	Dec. 31. 2025	Dec. 31. 2024
Equity instruments measured at fair value through other comprehensive income:
Unlisted (OTC) company stocks	$	435

The consolidated company holds these equity instruments as long-term strategic investments and not held for trading purposes, thus designated as measured at fair value through other comprehensive income.
During the period from January 1 to December 31, 2025, the Group did not dispose of any strategic investments, and no cumulative gains or losses were reclassified within equity during the period. On May 28, 2024, the Group adjusted its shareholding in strategic investments and disposed of listed (over-the-counter) equity investments designated at fair value through other comprehensive income. The fair value at the date of disposal was NT$3,350 thousand, and the cumulative loss on disposal amounted to NT$592 thousand. Accordingly, the aforementioned cumulative loss on disposal has been reclassified from other equity to retained earnings.
Information on credit risk and market risk please refer to Note 6(20).
As of December 31, 2025 and December 31, 2024, none of the above financial assets were pledged as collateral.

(4) Financial assets measured at amortized cost

	Dec. 31. 2025	Dec. 31. 2024
Current
Time deposits with original maturity exceeding 3 months	$ 188,800	68,000
Interest Rate Range	1.44%~1.64%	1.44%~1.55%
Due Date	2026.1.5-2026.8.24	2025.1.19-2025.8.18

The consolidated company assesses that it holds these assets to collect contractual cash flows until maturity, and the cash flows from these financial assets consist solely of payments of principal and interest on the outstanding principal amount. Therefore, they are reported as financial assets measured at amortized cost.
Information on credit risk please refer to Note 6(21).
As of December 31, 2025 and December 31, 2024, none of the above financial

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

assets were pledged as collateral.

(5)Net accounts and notes receivable

	Dec. 31. 2025	Dec. 31. 2024
Accounts receivable	$ 20,162	30,788
Less: Allowance for doubtful accounts	(12)	(12)
	$ 20,150	30,776

The consolidated company uses a simplified approach to estimate expected credit losses for all accounts and notes receivable, namely, the use of lifetime expected credit losses measurement. For this measurement purpose, these receivables are grouped based on shared credit risk characteristics representing customers' ability to pay all amounts due according to contractual terms, and forward-looking information has been incorporated. The analysis of expected credit losses for accounts and notes receivable is as follows:

	Dec. 31. 2025
	Book value of accounts receivable and notes receivable	Weighted average expected credit loss rate	Provision for expected credit losses over the remaining term
Not overdue	$ 15,749	0%	-
Overdue 0-30 days	4,410	0~100%	9
Over 30 days past due	3	100%	3
Total	$ 20,162		12
	Dec. 31. 2024
	Book value of accounts receivable and notes receivable	Weighted average expected credit loss rate	Provision for expected credit losses over the remaining term
Not overdue	$ 22,043	0%	-
Overdue 0-30 days	8,745	0~100%	12
Total	$ 30,788		12

The schedule of changes in allowance for doubtful accounts and notes receivable for consolidated companies is as follows:

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

	2025	2024
Ending balance (as Beginning Balance)	$ 12	12

As of December 31, 2025 and December 31, 2024, none of the consolidated company's accounts receivable and notes receivable were pledged as collateral.

(6) Inventory

	Dec. 31, 2025	Dec. 31, 2024
Raw materials	$ 18,144	28,432
Work in progress	408	1,607
Finished goods	105	1,347
Total	$ 18,657	31,386

The breakdown of operating costs is as follows:

	2025	2024
Cost of goods sold	$ 9,158	24,622
Inventory impairment loss	125	(211)
Sales discounts	(739)	(996)
Cost of services	124,782	132,617
Lease costs	-	71
	$ 133,326	156,103

As of December 31, 2025 and December 31, 2024, none of the consolidated company's inventory was pledged as collateral.

(7) Changes in ownership equity of subsidiaries

In 2025, Nan Yan Semiconductor Co., Ltd., a subsidiary of the Group, reclassified unclaimed dividends that had exceeded the five-year statute of limitations for shareholders' claims to capital surplus.

The impact of the changes in ownership equity of the aforementioned subsidiary on the equity attributable to the owners of the parent company is as follows:

	2025
Capital surplus – changes in ownership interests in subsidiaries	$ 737

In July 2025, the Group acquired additional equity interests in Nanran Semiconductor for NT$337 thousand in cash, respectively, increasing its ownership from 83% to 83.14%.

The impact of the changes in ownership equity of the aforementioned subsidiary

~37~

~38~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

on the equity attributable to the owners of the parent company is as follows:

	2025
Book value of non-controlling interests acquired	$ 354
Consideration paid	337
Difference between actual acquisition price of subsidiary equity and book value (reported under retained earnings)
	$ 17

(8) Subsidiaries with significant non-controlling interests

The subsidiaries with significant non-controlling interests for the consolidated company are as follows:

The names of subsidiaries with significant non-controlling interests are as follows:	Principal place of business/	Percentage of ownership interest and voting rights attributable to non-controlling interests
	Country of incorporation	Dec. 31. 2025	Dec. 31. 2024
South Rock Semiconductor	Taiwan	16.86%	16.86%

The summarized financial information of the above subsidiary is as follows. The financial information is prepared in accordance with the International Financial Reporting Standards recognized by the Financial Supervisory Commission and reflects fair value adjustments made on the acquisition date and adjustments for accounting policy differences. The financial information represents the amounts before the elimination of transactions between the consolidated company :

The summarized financial information of South Rock Semiconductor is as follows:

	Dec. 31. 2025	Dec. 31. 2024
Current assets	$ 163,993	189,581
Non-current assets	89,412	103,824
Current liabilities	(34,453)	(34,109)
Non-current liabilities	(4,806)	(4,800)
Net assets	$ 214,146	254,496
Non-controlling interests end-of-period book value	$ 36,105	42,907

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

	2025	2024
Operating revenue	$ 128,485	187,176
Net loss for the period	$ (42,048)	5,318
Other comprehensive income	811	597
Total comprehensive income	$ (41,237)	5,915
Net loss attributable to non-controlling interests for the period	$ (7,089)	898
Total comprehensive income attributable to non-controlling interests	$ (6,952)	998
	2025	2024
Operating cash flow	$ 13,436	27,654
Investing cash flow	(14)	(7,218)
Financing cash flow	(15,158)	(14,977)
Net increase (decrease) in cash and cash equivalents	$ (1,736)	5,459
Dividends paid to non-controlling interests	$ -	-

(9) Property, plant, and equipment

The details of changes in cost, depreciation, and impairment losses of property, plant, and equipment for the consolidated company in 2025 and 2024 are as follows:

	Land	Houses and buildings	Machinery and equipment	Other	Total
Cost:
Balance as of January 1, 2025	$ 41,030	110,106	120,425	18,447	290,008
Additions	-	-	7,285	-	7,285
Transfer from prepayment for equipment	-	-	1,240	-	1,240
Disposals	-	-	(2,923)	(4,471)	(7,394)
Transfer to investment property	(38,377)	-	-	-	(38,377)
Balance as of December 31, 2025	$ 2,653	110,106	126,027	13,976	252,762
Balance as of January 1, 2024	$ 41,030	252,943	134,799	19,611	448,383
Additions	-	747	2,879	886	4,512
Reclassification	-	320	1,730	(2,050)	-
Disposals	-	(143,904)	(18,983)	-	(162,887)
Balance as of December 31, 2024	$ 41,030	110,106	120,425	18,447	290,008
Depreciation and impairment losses:
Balance as of January 1, 2025	$ -	48,415	69,898	9,437	127,750
Depreciation	-	2,574	18,709	995	22,278
Disposals	-	-	(2,914)	(4,450)	(7,364)
Balance as of December 31, 2025	$ -	50,989	85,693	5,982	142,664
Balance as of January 1, 2025	$ -	179,745	70,623	8,281	258,649

~40~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Depreciation	-	2,574	18,258	1,156	21,988
Disposals	-	(133,904)	(18,983)	-	(152,887)
Balance as of December 31, 2024	$ -	48,415	69,898	9,437	127,750
Book value:	Land	Houses and buildings	Machinery and equipment	Other	Total
---	---	---	---	---	---
As of December 31, 2025	$ 2,653	59,117	40,334	7,994	110,098
As of January 1, 2024	$ 41,030	73,198	64,176	11,330	189,734
As of December 31, 2024	$ 41,030	61,691	50,527	9,010	162,258

Property revaluation

The Consolidated Company revalued its land (including investment property) based on appraisal dates in September 1979, July 1984, and February 2005, and its depreciable fixed assets (including investment property) based on appraisal dates as of December 31, 1974 and December 31, 1980, in accordance with relevant regulations. As of December 31, 2025 and 2024, the total revaluation surplus of the Consolidated Company amounted to NT$453,907 thousand, respectively. The amount of land value increment tax reserve (recognized under "Deferred Income Tax Liabilities") was NT$145,335 thousand.

Revaluation of real estate

In 1996, the consolidated company purchased land located at No. 457-1, Shanjiao Section, Luzhu District, Taoyuan City, which was later re-surveyed and renumbered as No. 1,097, Shanjiao Section, Luzhu District. The land has an area of 930.39 square meters and was acquired at a total cost of approximately NT$21,080 thousand. The full purchase price has been paid. On September 29th, 1981, the land was designated as "General Agricultural Zone Agricultural and Pastoral Land". Since it is categorized as agricultural land, transfer ownership to the company's name cannot be processed. Therefore, the ownership of the land was transferred to the name of the Chairman of the company and a mortgage was established to secure the company's interests.

Pledges

As of December 31, 2025 and 2024, the consolidated company provided details of property, plant, and equipment pledged as collateral. Please refer to Note 8 for further details.

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(10) Right-of-use assets

"The cost, depreciation, and impairment losses of leased buildings, structures, and machinery and equipment of The Group are detailed as follows:":

	Buildings and structures	Machinery and equipment	Total
Cost of right-of-use assets:
Balance at January 1, 2025	$ 1,738	497	2,235
Additions	-	102	102
Balance at December 31, 2025	$ 1,738	599	2,337
Balance at January 1, 2024	$ 1,680	497	2,177
Additions	1,738	-	1,738
Reductions	(1,680)	-	(1,680)
Balance at December 31, 2024	$ 1,738	497	2,235
	Buildings and structures	Machinery and equipment	Total
Depreciation and impairment losses of right-of-use assets:
Balance at January 1, 2025	$ 217	442	659
Depreciation expense recognized	869	74	943
Balance at December 31, 2025	$ 1,086	516	1,602
Balance at January 1, 2024	$ 1,050	368	1,418
Depreciation expense recognized	847	74	921
Other reductions	(1,680)	-	(1,680)
Balance at December 31, 2024	$ 217	442	659
Carrying amount: :
December 31, 2025	$ 652	83	735
January 1, 2024	$ 630	129	759
December 31, 2024"	$ 1,521	55	1,576

~41~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(11) Investment properties

	Owned assets		Total
	Land	Buildings and structures
Cost:
Balance at January 1, 2025 (Beginning balance)	$ 494,295	30,157	524,452
Transferred from property, plant and equipment	38,377	-	38,377
Balance at December 31, 2025	$ 532,672	30,157	562,829
Balance at December 31, 2024 (Beginning balance)	$ 494,295	30,157	524,452
Depreciation and impairment losses:
Balance at December 31, 2025 (Beginning balance)	$ -	30,157	30,157
Balance at January 1, 2024	$ -	30,086	30,086
Depreciation for the current year	-	71	71
Balance at December 31, 2024	$ -	30,157	30,157
Carrying amount:
December 31, 2025	$ 532,672	-	532,672
January 1, 2024	$ 494,295	71	494,366
December 31, 2024	$ 494,295	-	494,295
Fair value:
December 31, 2025			$ 5,061,726
December 31, 2024"			$ 3,907,205

The fair value of investment properties is assessed based on the most recent market transaction prices recorded in the real estate registration system of the relevant area.
Investment properties include several parcels of land leased to third parties. Each lease contract has an initial non-cancellable term ranging from 2 to 35 years, with subsequent lease terms negotiated with the lessee, and no contingent rents are receivable. For further details, please refer to Note 6 (13).
As of December 31, 2025 and 2024, the details of the above assets pledged as collateral for credit facilities are described in Note 8.

(12) Lease liabilities

The carrying amount of lease liabilities for The Group is as follows:

	Dec. 31. 2025	Dec. 31. 2024
Current	$ 739	922
Non-current	$ 6	662

Please refer to Note 6 (21) Financial Instruments for the maturity analysis.

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The amounts recognized in the income statement are as follows:

	2025	2024
Interest expense on lease liabilities	$ 28	17
Expense for leases of low-value assets (excluding short-term leases of low-value assets)	$ 48	51

The amounts recognized in the cash flow statement are as follows:

	2025:	2024
The total cash outflow for leases	$ 1,017	994

Lease of buildings and structures:

The Group leases buildings and structures for office space, with a lease term of two years. The lease includes an option to extend for the same period as the original contract upon expiration.

Other leases:

The Group leases machinery and equipment for a period of two years, with the lease contract stipulating the company's option to purchase the leased assets at the end of the lease term. The contract also requires The Group to guarantee the residual value of the leased assets at the end of the lease term.

Additionally, The Group leases machinery and office equipment for periods ranging from three years. These leases qualify as short-term and low-value leases, and The Group has chosen to apply the exemption from recognition requirements, thus not recognizing the related right-of-use assets and lease liabilities.

(13) Operating leases:

The Group leases out its investment properties. Since it has not transferred substantially all of the risks and rewards incidental to ownership of the leased assets, these lease contracts are classified as operating leases. Please refer to Note 6 (11) Investment Properties for details.

	Dec. 31, 2025	Dec. 31, 2024
Less than one year	$ 76,439	49,223
One to five years	488,085	197,057
More than five years	2,752,713	111,207
Total undiscounted lease payments	$ 3,317,237	357,487

The rental income generated from investment properties for 2025 and 2024 was

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

NT$60,523 thousand and NT$49,542 thousand, respectively.

(14) Employee benefits

1. Defined benefit plans

The adjustments to the present value of defined benefit obligation and the fair value of plan assets for The Group are as follows

	Dec. 31. 2025	Dec. 31. 2024
Present value of defined benefit obligation	$ (6,320)	(6,894)
Fair value of plan assets	9,034	8,591
Net defined benefit asset (liability)	$ 2,714	1,697

The Group's defined benefit plan contributions are allocated to the Labor Retirement Reserve Fund at the Bank of Taiwan. The retirement payments for each employee under the Labor Standards Act are calculated based on their years of service and the average salary for the six months prior to retirement.

(1) Composition of plan assets:

The retirement fund allocated by The Group in accordance with the Labor Standards Act is managed by the Labor Pension Fund Supervisory Committee (referred to as the Labor Fund Supervisory Committee). According to the "Regulations Governing the Receipt, Safekeeping, and Utilization of Funds of Labor Retirement Funds," the minimum return on investment for each accounting period shall not be less than the return calculated based on the interest rate of a two-year fixed deposit at a local bank.

As of the reporting date, the balance in The Group's Labor Retirement Reserve Fund account at the Bank of Taiwan amounted to NT$9,034 thousand. Information on the utilization of labor retirement fund assets includes fund returns and asset allocation, which can be found on the website of the Labor Pension Fund Supervisory Committee.

(2) Changes in the present value of defined benefit obligation:

The changes in the present value of defined benefit obligation for The Group in 2025 and 2024 are as follows:

~44~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Present value of defined benefit obligation $	(6,894)	(7,103)
at January 1
Current service cost and interest expense	(201)	(92)
Net defined benefit liability (asset)
remeasurement:	311	(277)
—Experience gains/losses
—Actuarial gains/losses due to changes	(108)	176
in financial assumptions
Benefits paid under the plan	572	402
Present value of defined benefit obligation $	(6,320)	(6,894)
at December 31

(3) Changes in the fair value of plan assets

The changes in the fair value of plan assets for The Group in 2025 and 2024 are as follows: :

	2025	2024
Fair value of plan assets at January 1	$ 8,591	7,999
Interest income	140	104
Net remeasurement of net defined benefit liability (asset):	608	698
—Plan asset return (excluding current interest)
Amounts contributed to the plan	267	192
Defined Benefit Plans	(572)	(402)
Fair value of plan assets at December 31	$ 9,034	8,591

(4) Expenses recognized in the income statement

The expenses recognized in the income statement for The Group in 2025 and 2024 are as follows:

	2025	2024
Administrative expenses	$ 62	(12)

(5) Actuarial assumptions

~46~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The primary actuarial assumptions used by The Group at the end of the financial reporting period are as follows:

	2025	2024
Discount rate	1.40%	1.60%
Future salary escalation rate	2.25%	2.25%

The expected long-term asset return rate is based on the overall investment portfolio rather than the sum of individual asset classes' returns. This rate is purely historical and not adjusted.

The Group expects to contribute NT$234 thousand to defined benefit plans within one year after the reporting date in 2025.

The weighted average duration of the defined benefit plans is 10 years.

(6) Sensitivity analysis

The impact on the present value of defined benefit obligation due to changes in the primary actuarial assumptions adopted as of December 31 in 2025 and 2024 is as follows:

	The impact on the present value of defined benefit obligation:
	Increasing by 0.25%	Decreasing by 0.25%
December 31, 2025:
Discount rate	$ 137	(142)
Future salary escalation	$ (137)	133
December 31, 2024:
Discount rate	$ 149	(155)
Future salary escalation	$ (150)	146

The sensitivity analysis provided is based on analyzing the impact of a single assumption change while keeping 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 retirement benefit liability on the balance sheet.

The methods and assumptions used for the sensitivity analysis in the current

~47~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

period are consistent with those used in the previous period.

2. Defined contribution plan

The retirement benefit expenses under the defined contribution plan for The Group were NT$2,422 thousand in 2025 and NT$2,522 thousand in 2024, and these amounts have been contributed to the Labor Insurance Bureau.

(15) Income tax

1. Income tax expense

The details of income tax expense for The Group in 2025 and 2024 are as follows:

	2025	2024
Current income tax expense
Current period	$ 18,777	7,826
Adjustment of current income tax from previous periods	(2,896)	1,216
Current income tax expense	$ 15,881	9,042

The Group did not recognize any income tax in equity or other comprehensive income for the years 2025 and 2024.

The adjustments for income tax expense and profit before tax for The Group in 2025 and 2024 are as follows:

	2025	2024
Profit before tax	$ 45,169	45,781
Income tax calculated at domestic tax rate	9,034	9,156
Permanent Differences	(317)	1,119
Taxable loss not recognized as deferred tax asset in the current period	8,003	173
Change in unrecognized temporary differences	1,918	(2,727)
Under (over) provision in prior periods	(2,896)	1,216
Additional tax on undistributed earnings	34	-
Other	105	105
	$ 15,881	9,042

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Deferred tax assets and liabilities

(1) Unrecognized deferred tax assets

Items for which The Group has not recognized deferred tax assets are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Allowable temporary differences	$ 1,270	1,353
Tax Loss	2,358	2,185
	$ 3,628	3,538

(2) Unrecognized deferred tax liabilities

Items for which The Group has not recognized deferred tax liabilities are as follows:

	Dec. 31, 2025	Dec. 31, 2024
Amount Not Recognized as Deferred Income Tax Liabilities	$ 710	2,644

(3) Recognized deferred tax assets and liabilities

Changes in deferred tax assets and liabilities are as follows:

Deferred tax liabilities :

	Land value increment tax provision
Balance at January 1, 2025	$ 145,335
Debit/(Credit) Income Statement	-
Debit/(Credit) Other Comprehensive Income	-
Balance at December 31, 2025	$ 145,335
Balance at January 1, 2024	$ 145,335
Debit/(Credit) Income Statement	-
Debit/(Credit) Other Comprehensive Income	-
Balance at December 31, 2024	$ 145,335

The Group had no recognized deferred tax assets as of December 31, 2025 and 2024.

(4) The profit-seeking enterprise income tax settlement and declaration of the

~48~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

company have been audited and approved by the tax authorities until 2023.

(16) Capital and other equity

Ordinary share capital

As of December 31, 2025, and December 31, 2024, the authorized share capital of the company was both 1,000,000 thousand, with a par value of 10 NT dollars per share, consisting of 100,000 thousand shares. The issued shares was 62,000 thousand and 63,000 thousand. All issued shares were fully paid.

The reconciliation of the number of outstanding shares for the years 2025 and 2024 is as follows:

	Common Stock (In Thousands of Shares)
	2025	2024
Beginning balance	63,000	63,000
Repurchase of treasury shares	(1,000)	-
Ending balance	62,000	63,000

Capital surplus

The breakdown of the capital surplus balance for the company is as follows:

	Dec. 31, 2025	Dec. 31, 2024
Recognized changes in equity of subsidiaries	$ 738	1
Gain on disposal of assets	2,258	2,258
Received assets	20,099	20,099
	$ 23,095	22,358

According to the Company Act, capital surplus must first be used to offset losses before new shares can be issued or cash can be distributed to shareholders in proportion to their original shareholding. The realized capital surplus mentioned above includes the excess proceeds from the issuance of shares above par value and income received from donations. According to the Guidelines for the Handling of Issuance and Offering of Securities by Issuers, the total amount of capital surplus that can be allocated each year shall not exceed ten percent of the paid-in capital.

Retained earnings:

According to the company's articles of association, if there are profits in the annual financial statements, taxes should be paid first, followed by the offsetting of past losses. Ten percent of the statutory surplus reserve should be set aside next,

~49~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

but this is not applicable if the statutory surplus reserve has already reached the company's paid-in capital. Other reserves shall be set aside or reversed in accordance with laws or regulations or directives of regulatory authorities. If there are still remaining profits, they shall be combined with accumulated undistributed profits from previous years. The Board of Directors shall propose a distribution plan to the shareholders' meeting for resolution.

(1) Statutory surplus reserve:
When the company has no losses, it may, upon resolution of the shareholders' meeting, issue new shares or distribute cash from the statutory surplus reserve, provided that the portion of this reserve exceeds 25% of the paid-in capital

(2) Special surplus reserve:
When distributing profits, the company must set aside a special surplus reserve according to legal regulations, which should be derived from the debit balance of other equity items on the balance sheet date. When the debit balance of other equity items is reversed, the reversal amount may be included in distributable profits. When the company first adopts the International Financial Reporting Standards (IFRS) approved by the Financial Supervisory Commission, the special surplus reserve set aside according to the Financial Supervisory Commission's regulations may be reversed for profit distribution in proportion to the use, disposal, or reclassification of related assets. If the related assets are investment properties, the portion related to land may be reversed upon disposal or reclassification, while the portion not related to land may be reversed over the period of use.

(3) Profit distribution:
The company resolved to distribute dividends to shareholders on June 13, 2025, and June 19, 2024, respectively. The amounts distributed to shareholders for dividends in 2024 and 2022 are as follows:

	2024:		2022
	Rights offering ratio (NT dollars per share)	Amount	Rights offering ratio (NT dollars per share)	Amount
Dividends distributed to ordinary shareholders:
Cash	$ 0.5	31,500	0.3	18,900

~50~

~51~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

On March 12, 2026, the Company's Board of Directors proposed the 2025 earnings distribution plan. The details of dividends distributed to owners are as follows:

	2025:
	Rights offering ratio (NT dollars per share)	Amount
Dividends distributed to ordinary shareholders:
Cash	$ 0.2	12,400

(4) Treasury Shares

From May to June 2025, the Company repurchased a total of 1,000 thousand treasury shares in accordance with Article 28-2 of the Securities and Exchange Act, as necessary to maintain the Company's credit and protect shareholders' interests. The total cost of the repurchase amounted to NT$37,838 thousand.

On September 11, 2025, the Board of Directors resolved to cancel 1,000 thousand treasury shares, with September 12, 2025 set as the capital reduction record date. The relevant statutory registration procedures have been duly completed.

(5) Other Equity (net of tax)

	Unrealized Gains (Losses) on Financial Assets at Fair Value through Other Comprehensive Income
Balance as of January 1, 2025	$ (2,946)
Unrealized losses on financial assets at fair value through other comprehensive income	(435)
Balance as of December 31, 2025	$ (3,381)
Balance as of January 1, 2024	$ (2,320)
Unrealized losses on financial assets at fair value through other comprehensive income	(1,218)
Disposal of equity instruments at fair value through other comprehensive income	592
Balance as of December 31, 2024	$ (2,946)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(17) Earnings per share

The calculation of basic earnings per share and diluted earnings per share for the company is as follows:

	2025:	2024
Basic earnings per share:
Net profit attributable to ordinary equity holders of the company	$ 36,377	35,841
Weighted average number of outstanding ordinary shares (thousands)	62,426	63,000
Basic earnings per share (NT$)	$ 0.58	0.57

Diluted earnings per share:

Net profit attributable to ordinary equity holders of the company	$ 36,377	35,841
Weighted average number of outstanding ordinary shares (thousands)	62,426	63,000
Effect of potential ordinary shares with dilution effect
Effect of Employee Share-based Compensation	10	10
Adjusted weighted average number of outstanding ordinary shares (after adjustment for dilutive potential ordinary shares)	62,436	63,010
Diluted earnings per share (NT$)	$ 0.58	0.57

(18) Revenue from customer contracts:

Breakdown of revenue

	2025
	Semiconductor sector	Textile processing department	Total
Main geographical markets:
Taiwan	$ 67,011	60,523	127,534
United States	15,969	-	15,969
China	15,901	-	15,901
Other countries	29,604	-	29,604
	$ 128,485	60,523	189,008

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Main products/services:
Semiconductor packaging and testing	$ 111,743	-	111,743
Product sales	16,742	-	16,742
Real estate leasing	-	60,523	60,523
	$ 128,485	60,523	189,008
	2024
	Semiconductor sector	Textile processing department	Textile processing department
Main geographical markets
Taiwan	$ 75,747	49,542	125,289
United States	39,772	-	39,772
China	41,596	-	41,596
Other countries	30,061	-	30,061
	$ 187,176	49,542	236,718
Main products/services:
Semiconductor packaging and testing	$ 142,421	-	142,421
Product sales	44,755	-	44,755
Real estate leasing	-	49,542	49,542
	$ 187,176	49,542	236,718
2. Contract balances
	Dec.31.2025	Dec.31.2024	Jan.1.2024
Accounts receivable	$ 20,162	30,788	23,631
Less: Allowance for doubtful accounts	(12)	(12)	(12)
Total	$ 20,150	30,776	23,619
Contract Assets	$ 2,990	2,992	1,700
Contract liabilities	$ 724	305	504

Disclosure of accounts receivable and its impairment should be detailed in Note 6(5).

Income from contracts was recognized as revenue at the beginning of the period with initial balances of contract liabilities as follows: in 2025, it was

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

NT$305,000, and in 2024, it was NT$504,000.

(19) Employee and Director Remuneration

The Company amended its Articles of Incorporation pursuant to a resolution of the shareholders' meeting on June 13, 2025. According to the amended Articles, if the Company has profits for the year, it shall appropriate 0.5% to 2% as employees' remuneration (of which 10% to 50% shall be allocated to grassroots employees) and no more than 3% as directors' remuneration. However, if the Company has accumulated losses, an amount shall first be reserved to offset such losses.

Under the Articles prior to the amendment, if the Company has profits for the year, it shall appropriate 0.5% to 2% as employees' remuneration and no more than 3% as directors' remuneration. However, if the Company has accumulated losses, an amount shall first be reserved to offset such losses.

The estimated amounts of employees' remuneration for 2025 and 2024 were NT$270 thousand (including NT$166 thousand for grassroots employees) and NT$300 thousand, respectively. The estimated amounts of directors' remuneration for both 2025 and 2024 were NT$700 thousand. These amounts were estimated based on the profit before tax before deduction of employees' and directors' remuneration, multiplied by the distribution ratios stipulated in the Company's Articles of Incorporation, and were recognized as operating costs or operating expenses for 2025 and 2024. Relevant information can be accessed on the Market Observation Post System.

There was no difference between the amounts of employees' and directors' (and supervisors') remuneration resolved by the Board of Directors and the amounts estimated in the Company's consolidated financial statements for 2024 and 2023.

(20) Non-operating Income and Expenses

1. Interest Income

Here is the detailed breakdown of interest income for the consolidated company:

	2025	2024
Interest income from bank deposits	$ 8,358	9,183
Interest income from financial assets measured at amortized cost.	4,033	6,205
Total interest income	$ 12,391	15,388

~54~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Other Income

The detailed breakdown of other income for the consolidated company is as follows:

	2025	2024
Revenue from Customer Contract Termination Penalties	$ 47,058	-
Other	59	1,074
Total other income	$ 47,117	1,074

For details of revenue from customer contract termination penalties, please refer to Note 11.

Other gains and losses

The details of other gains and losses for the consolidated company in the years 2025 and 2024 are as follows:

	2025	2024
Profit on disposal of property, plant, and equipment	$ (30)	-
Net gain on foreign currency exchange	(8,730)	12,791
Gain (loss) on financial assets at fair value through profit or loss	804	3,879
Others	(11)	(4,189)
	$ (7,967)	12,481

(21) Financial Instruments

Credit Risk

(1) Credit Risk Exposure

The carrying amount of financial assets and contract assets represents the maximum credit risk exposure for the consolidated company.

(2) The concentration of credit risk refers to the extent to which a company's credit exposure is concentrated within a particular group of counterparties or geographic region

The credit risk of the combined company is primarily influenced by the credit characteristics of individual creditors, and the industry in which customers operate also affects credit risk. As of December 31 in 2025 and 2024 years, the total amount of accounts receivable of the combined company came from the top five sales customers, accounting for 83% and 67% respectively.

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Liquidity risk

The following table shows the maturity dates of financial liabilities contracts, including the impact of estimated interest: *

	Book value	Contractual Cash flow Within	Within 1 year	Beyond More than 1 year
As of December 31, 2025,
Non-derivative financial liabilities
Accounts payable and notes payable	$ 7,168	7,168	7,168	-
Other payables	16,015	16,015	16,015	-
Lease liabilities	745	753	747	6
Deposits for guarantees	28,445	28,445	28,445	-
	$ 52,373	52,381	52,375	6
As of December 31, 2024,
Non-derivative financial liabilities
Accounts payable and notes payable	$ 8,496	8,496	8,496	-
Other payables	18,850	18,850	18,850	-
Lease liabilities	1,584	1,618	950	668
Deposits for guarantees	12,230	12,230	12,230	-
	$ 41,160	41,194	40,526	668

The consolidated company does not expect significant early occurrence or significant deviations in the actual amounts from the maturity date analysis of cash flows.

Exchange rate risk

(1) Exchange rate risk volatility

The consolidated company's exposure to significant foreign exchange rate risk in financial assets and liabilities is as follows:

~56~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

	Dec.31.2025			Dec.31.2024
	Foreign Currency	Exchange Rate	Taiwan Dollar	Foreign Currency	Exchange Rate	Taiwan Dollar
Financial assets
US Dollar	$ 5,417	31.43	170,261	6,360	32.79	208,514
Japanese Yen	1,708	0.20	345	2,797	0.21	587
Financial liabilities
US Dollar	51	31.43	1,618	79	32.79	2,580

(2) sensitivity analysis

The currency risk of the combined company mainly arises from cash and cash equivalents, accounts receivable, financial assets measured at amortized cost, and accounts payable denominated in foreign currencies, resulting in foreign exchange gains or losses upon translation. As of December 31 in the years 2025 and 2024, if the New Taiwan Dollar were to appreciate or depreciate by 1% against the US Dollar, and Japanese Yen, while all other factors remain unchanged, the pre-tax profit for the years 2025 and 2024 would respectively increase or decrease by NT$1,690 thousand and NT$2,065 thousand. The analysis for both periods is based on the same assumptions.

(3) Foreign exchange gains or losses on monetary items

The amounts of exchange gains and losses (including realized and unrealized) on the Group's monetary items translated into their respective functional currencies, and the related exchange rate information for translation into the parent company's functional currency, New Taiwan Dollar (i.e., the presentation currency of the Group), are as follows:

	2025		2024
	Foreign exchange (gain) loss	Average exchange rate	Foreign exchange (gain) loss	Average exchange rate
US Dollar	$ (8,911)	31.13	12,829	32.12
Japanese Yen	181	0.208	(38)	0.212

Interest rate risk

The interest rate summary related to interest-bearing financial instruments for the reporting period is as follows:

Book value

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

	Dec.31.2025	Dec.31.2024
Fixed-rate instruments:
Financial assets	$ 318,324	252,811
Variable-rate instruments:
Financial assets	$ 235,468	346,630

The sensitivity analysis for interest rate risk on non-derivative instruments conducted by The Group reveals that if the interest rate increases/decreases by one basis point, with all other variables remaining constant, the pre-tax profit for the fiscal years 2025 and 2024 will increase/decrease by NT$589,000 and NT$867,000 respectively. This mainly arises from the interest rate risk exposure on variable interest rate bank deposits.

Furthermore, fixed-rate instruments of financial assets held by The Group are measured at amortized cost, and thus market rate fluctuations on the reporting date have no impact on the income statement. Therefore, no sensitivity analysis on fair value changes is disclosed.

5. Other Price Risks

The impact of changes in equity securities prices as of the reporting date (the analysis for both periods is based on the same assumptions with other factors held constant) on items of comprehensive income is as follows:

	2025		2024
Reporting date securities prices	Pre-tax amount of other comprehensive income	Pre-tax profit/loss	Pre-tax amount of other comprehensive income	Pre-tax profit/loss
Increased by 10%	$ -	1,903	44	3,124
Decreased by 10%	$ -	(1,903)	(44)	(3,124)

6. Fair Value Information

(1) The types of financial instruments and their fair values.

The financial assets measured at fair value through profit or loss and the financial assets measured at fair value through other comprehensive income are measured based on their recurring fair value. The carrying amounts and fair values of various types of financial assets and financial liabilities (including fair value

~58~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

hierarchy information, but for financial instruments not measured at fair value, where the carrying amount approximates fair value, disclosure of fair value information is not required by regulation) are presented as follows:

	Dec.31.2025
	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets measured at fair value through profit or loss:
Foreign corporate bonds	$ 14,568	14,568	-	-	14,568
Gold Passbook Account	4,466	4,466	-	-	4,466
	$ 19,034	19,034	-	-	19,034
Financial assets measured at fair value through other comprehensive income:
Equity instruments	$ -	-	-	-	-
	Dec.31.2024
	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets measured at fair value through profit or loss:
Foreign corporate bonds	$ 28,431	28,431	-	-	28,431
Gold Passbook Account	2,805	2,805	-	-	2,805
	$ 31,236	31,236	-	-	31,236
Financial assets measured at fair value through other comprehensive income:
Equity instruments	$ 435	-	-	435	435

(2) Fair value measurement techniques for financial instruments measured at fair value

When financial instruments have active market quotations, their fair value is determined based on these quotations. The market prices announced by major exchanges and by the central government bond over-the-counter trading center, judged as popular securities, serve as the basis for fair value measurement of

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

listed (OTC) equity instruments and debt instruments with active market quotations.

If timely and frequent public quotations for financial instruments can be obtained from exchanges, brokers, underwriters, industry associations, pricing service agencies, or regulatory authorities, and if these prices represent actual and regularly occurring transactions by market participants, then the financial instrument is considered to have an active market with public quotations. If the above conditions are not met, then the market is considered inactive. Generally, significant bid-ask spreads, a significant increase in bid-ask spreads, or low trading volumes are indicators of an inactive market. The financial instruments held by the consolidated company are categorized as follows:

Financial instruments with active markets: Financial assets and financial liabilities such as listed (OTC) company stocks and corporate bonds, which have standard terms and conditions and are traded in active markets, have their fair value determined separately based on market quotations.
Financial instruments without active markets: The fair value is determined using valuation techniques or referencing quotes from counterparties. The fair value obtained through valuation techniques may refer to the current fair value of other financial instruments with substantially similar terms and characteristics, discounted cash flow analysis, or other valuation techniques, including models utilizing market information available at the date of the consolidated balance sheet.

(3) The transfer between Level 1 and Level 2

There were no transfers between Level 1 and Level 2 for the years 2025 and 2024.

(4) The detailed statement of changes in Level 3.

For those financial instruments measured at fair value by the consolidated company falling under Level 3, the changes are as follows:

	2025	2024
Beginning balance	$ 435	2,366
Recognized in other comprehensive income	(435)	(1,931)
Ending balance	$ -	435

(5) Quantitative information on significant unobservable inputs (Level 3) for fair value measurement.

~60~

~61~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The fair value measurement classified as Level 3 by the consolidated company mainly consists of equity instruments measured at fair value through other comprehensive income.

The majority of the fair value measurements classified as Level 3 by the consolidated company involve only a single significant unobservable input. Only equity instrument investments without active markets have multiple significant unobservable inputs. These significant unobservable inputs for equity instrument investments without active markets are independent of each other and therefore do not have interrelationships.

Here's a list of the quantitative information on significant unobservable inputs:

Item	Valuation technique	Significant unobservable input
Financial Assets - Equity Instruments without Active Markets, measured at fair value through other comprehensive income.	Analogous to the regulations for listed and OTC companies.	• Lack of market liquidity discount (30% as of December 31, 2025 and December 31, 2024).
• The price-to-book ratio (as of December 31, 2025 and December 31, 2024) ranges from 0.99 to 4.90 and from 0.95 to 3.52, respectively.	• The higher the lack of market liquidity discount, the lower the fair value.
• The higher the price-to-book ratio, the higher the fair value.

(6) Sensitivity analysis of fair value measurements for Level 3, with respect to reasonable possible alternative assumptions.

The fair value measurements of financial instruments by the consolidated company are deemed reasonable. However, the use of different valuation models or parameters may result in different valuation outcomes. For financial instruments classified as Level 3, changes in valuation parameters would have the following impacts on current period profit or other comprehensive income:

	Input values	Increase or decrease	Fair value changes reflected in other comprehensive income
			Beneficial changes	Adverse changes
As of December 31, 2025
Through other comprehensive income at fair value through profit or loss financial assets
No active market for equity instruments investments	Price-to-book ratio, Discount for lack of market	±1%	$	-

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

liquidity
As of December 31, 2024
Through other comprehensive income at fair value through other comprehensive income financial assets
No active market for equity instruments investments	Price-to-book ratio, Discount for lack of market liquidity	±1%	4 (4)

The favorable and unfavorable movements of the consolidated company refer to the volatility of fair value, which is calculated based on varying degrees of unobservable input parameters using valuation techniques. If the fair value of a financial instrument is influenced by more than one input value, the table above reflects only the impact of a change in a single input value and does not take into consideration the correlation and variability among input values.

(22) Financial risk management

Summary

The consolidated company is exposed to the following risks due to the use of financial instruments:

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

The accompanying notes provide information on the exposure of the consolidated company to the above-mentioned risks, as well as the objectives, policies, and procedures for measuring and managing these risks. For further quantitative disclosures, please refer to the respective notes in the consolidated financial statements.

Risk management framework

The establishment of the risk management policy by the consolidated company aims to identify and analyze the risks faced by the company, and to set appropriate risk limits and controls to monitor compliance with risk and risk limits. The consolidated company regularly reviews its risk management policies and systems to reflect changes in market conditions and operations in a timely manner. Additionally, through training, management guidelines, and operating procedures, the company is committed to developing a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Audit Committee of the consolidated company oversees how management monitors compliance with the company's risk management policies and procedures,

~62~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

and reviews the adequacy of the company's risk management framework in addressing the risks faced. Internal audit personnel assist the Audit Committee in its oversight role. These personnel conduct regular and ad-hoc reviews of risk management controls and procedures, and report the results of their reviews to the Audit Committee.

3. Credit risk

Credit risk refers to the risk of financial loss that the consolidated company may incur due to customers or counterparties of financial instruments failing to fulfill their contractual obligations. It primarily arises from the consolidated company's accounts receivable from customers and securities investments.

(1) Accounts receivable and other receivables

The credit risk exposure of the consolidated company is primarily influenced by the individual circumstances of each customer. However, management also considers statistical data related to the customer base of the consolidated company, including industry and country-specific default risks, as these factors may affect credit risk.

The finance department has established a credit policy whereby, before granting standard payment and shipping terms and conditions to each new customer, the consolidated company conducts individual credit rating analyses. The review process includes, where available, external ratings and, in some cases, inquiries with banks. Purchasing limits are established for individual customers, representing the maximum amount receivable without requiring approval from the finance department. These limits are regularly reviewed. Customers who do not meet credit ratings may transact with the consolidated company on a prepayment basis or by providing collateral.

The consolidated company maintains an allowance for doubtful accounts to reflect estimates of losses related to accounts receivable, other receivables, and investments. The allowance primarily consists of specific loss components related to individual significant risks and a collective loss component established for losses that have occurred but have not yet been identified for similar asset groups. The collective loss allowance is determined based on historical payment statistics for similar financial assets.

(2) Investments

~63~

~64~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

The credit risk associated with bank deposits and other financial instruments is measured and monitored by the finance department of the consolidated company. As the counterparties and obligors of the consolidated company consist of reputable banks and financial institutions with investment-grade ratings or above, as well as corporate entities and government agencies with good creditworthiness, there are no significant concerns regarding counterparty default. Therefore, there are no significant credit risks.

(3) Guarantees

The company's policy dictates that financial guarantees can only be provided between parent and subsidiary companies. As of December 31, 2025, and December 31, 2024, the consolidated company provided endorsement guarantees amounting to NT$47,145 thousand and NT$49,178 thousand, respectively.

Liquidity risk

Liquidity risk refers to the risk that the consolidated company may not be able to meet its financial obligations by delivering cash or other financial assets. The consolidated company manages liquidity by ensuring it has sufficient liquid funds to meet maturing liabilities under normal and stressed conditions, thus avoiding unacceptable losses or risks to the company's reputation.

As a general practice, the consolidated company ensures it has sufficient cash to meet anticipated short-term operating expenses, including fulfilling financial obligations, but excluding potential impacts that cannot be reasonably anticipated under extreme circumstances, such as natural disasters.

Market risk

Market risk refers to the risk of adverse effects on the consolidated company's earnings or the value of financial instruments held due to fluctuations in market prices, such as exchange rates, interest rates, and equity instrument prices. The objective of market risk management is to control the level of market risk exposure within acceptable limits and optimize investment returns.

(1) Exchange rate risk

The consolidated company is exposed to exchange rate risk arising from sales, purchases, and borrowings transactions not denominated in the functional currencies of the respective group entities. The functional currency of the group entities is primarily New Taiwan Dollar (NTD), while the major currencies used for

~65~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

these transactions include New Taiwan Dollar, US Dollar, and Japanese Yen.

(2) Interest rate risk

The consolidated company's interest rate risk arises from fluctuations in market interest rates, affecting future cash flows from variable interest rate bank deposits.

(3) Other market risks

The consolidated company is exposed to equity price volatility due to investments in stocks of listed companies and domestic and foreign beneficiary certificates of securities. These equity investments are strategic investments rather than held for trading. The consolidated company does not actively trade these investments, and management manages the risk by holding diverse portfolios of investments with varying risk profiles.

(23) Capital management

The Board's policy is to maintain a sound capital base to uphold investor, creditor, and market confidence and support future business development. Capital includes the consolidated company's share capital, capital surplus, retained earnings, and non-controlling interests. The Board oversees the capital return rate and controls the level of ordinary dividends.

The debt-to-equity ratios of the consolidated company as of the reporting dates for the years 2025 and 2024 are as follows:

	Dec.31.2025	Dec.31.2024
Debt Total:	$ 219,529	202,100
Subtract: Cash and Cash Equivalents	(404,866)	(500,006)
Net Debt	$ (185,337)	(297,906)
Total Equity	$ 1,091,866	1,130,653
Debt-to-Equity Ratio	______	______

The capital management approach of the consolidated company remained unchanged as of December 31, 2025, and December 31, 2024.

(24) Non-cash investing and financing activities

The non-cash investing and financing activities of the consolidated company for the years 2025 and 2024 are as follows:

Adjustments to liabilities from financing activities are shown in the table below.

~66~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

	Jan.1.2025	Cash flow	Acquisitions	Other	Dec.31.2025
Deposit for guarantee	$ 12,230	16,215	-	-	28,445
Lease liabilities	1,584	(941)	102	-	745
Total liabilities from financing activities	$ 13,814	15,274	102	-	29,190
	Jan.1.2024	Cash flow	Acquisitions	Other	Dec.31.2024
---	---	---	---	---	---
Deposit for guarantee	$ 20,230	(8,000)	-	-	12,230
Lease liabilities	772	(926)	1,738	-	1,584
Total liabilities from financing activities	$ 21,002	(8,926)	1,738	-	13,814

7、Related party transactions

(1) Key management personnel transactions

The compensation of key management personnel includes:

	2025	2024
Short-term employee benefits	$ 7,308	6,568

8、Pledged assets

The detailed breakdown of the book value of assets pledged as collateral by the consolidated company is as follows:

Asset Name	Pledged collateral	Dec.31.2025	Dec.31.2024
Land	Bank loan quotas as collateral	$ 898	11,322
Investment	Bank loan quotas as collateral	11,884	-
Property – Land
		$ 12,782	11,322

9、Significant contingent liabilities and unrecognized contractual commitments

(1) Significant unrecognized contractual commitments

The contractual commitments for the acquisition of real estate, plants, and equipment not recognized by the consolidated company are as follows:

	Dec.31.2025	Dec.31.2024
Acquisition of real estate, plants, and equipment	$ 2,631	3,595

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(2) The consolidated company applied for financing customs duty deposits from Shanghai Commercial Bank, with a limit of NT$1,500 thousand.

(3) The consolidated company provided endorsement guarantees to subsidiaries to obtain bank loan quotas, with details as follows:

Company Name	Endorsement and guarantee recipient	Dec.31.2025	Dec.31.2024
Parent Company	NanYan Semiconductor	$ 47,145	49,178
		(USD 1,500,000)	(USD 1,500,000)

10. Significant disaster losses: None

11. Significant subsequent events:

On February 26, 2025, the Company entered into a real estate lease agreement with Jin Cheng International Development Co., Ltd. ("Jin Cheng International") for the lease of land located in Luzhu District, Taoyuan City. Subsequently, on April 9, 2025, the Company and Jin Cheng International (collectively as Party A) and a construction contractor (hereinafter referred to as Party B) jointly entered into a construction contract for the expansion of warehouse facilities.

On July 2, 2025, due to considerations of Jin Cheng International, it requested termination of the real estate lease agreement. Both parties agreed to terminate the agreement and executed a termination agreement on the same date. Pursuant to the terms of the agreement, the Company was entitled to forfeit the lease deposit and the pledged time deposit certificate previously received from Jin Cheng International, amounting to NT$47,058 thousand (exclusive of tax), which was recognized under "Other income."

As the termination of the aforementioned lease agreement rendered the related rights and obligations under the construction contract unable to be performed, the Company, based on good faith negotiations, entered into a termination agreement of the construction contract with Party B on February 2, 2026, and paid NT$3,000 thousand to Party B. Party B agreed that, upon termination of the contract, all related rights and obligations arising therefrom shall no longer be associated with the Company and undertook to waive any and all claims against the Company. However, any claims or rights of Party B against Jin Cheng International shall not be affected by the execution of this agreement.

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

12、Other

(1) Summary of Functional Categories of Employee Benefits, Depreciation, Amortization, and Impairment Expenses:

| Functional Category
Nature Category | 2025 | | | 2024: | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Belongs to Operating Costs | Belongs to Operating Expenses | Total | Belongs to Operating Costs | Belongs to Operating Expenses | Total |
| Employee Benefits Expenses: | | | | | | |
| Salary Expenses | 32,508 | 20,256 | 52,764 | 37,143 | 22,769 | 59,912 |
| Labor and Health Insurance Expenses | 4,222 | 2,115 | 6,337 | 4,357 | 2,147 | 6,504 |
| Retirement Benefits Expenses | 1,514 | 970 | 2,484 | 1,554 | 956 | 2,510 |
| Director Remuneration | - | 700 | 700 | - | 700 | 700 |
| Other Employee Benefits Expenses | - | 2,152 | 2,152 | 5 | 1,822 | 1,827 |
| Depreciation Expenses | 18,220 | 5,001 | 23,221 | 18,017 | 4,963 | 22,980 |
| Amortization Expenses | - | - | - | - | - | - |

13、Disclosure of Significant Transaction Information

(1) Information Related to Significant Transactions

For the fiscal year 2025 of the consolidated company, in accordance with the applicable accounting standards, the relevant information regarding significant transactions that should be further disclosed is as follows:

No loans to others
Endorsements and guarantees for others :

Serial Number	The company names of the endorsers and guarantors.	The entities receiving the endorsements and guarantees.		Limit for endorsing and guaranteeing a single enterprise	Maximum endorsement and guarantee balance for the current period	Endorsement and guarantee balance at the end of the period (Note 3)	Actual disbursement amount	Endorsement and guarantee amount secured by assets	Ratio of cumulative endorsement and guarantee amount to the latest period's financial statement net worth	Maximum limit for endorsements and guarantees	Endorsements and guarantees from subsidiary companies	Endorsements and guarantees from subsidiary companies to the parent company	Endorsements and guarantees for entities in mainland China
		The company names.	Relation ships (as per Note 2)
0	Our Company	Nanyan Semiconductor	(2)	517,340	49,178	47,145	-	-	4.47%	1,055,795	Y	N	N

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Note 1: The company should specify the operating procedures for endorsing and guaranteeing individuals, set limits on endorsing and guaranteeing each individual, and specify the maximum total endorsement and guarantee limit. In the remarks column, the calculation method for endorsing and guaranteeing individual and total limits should be explained. The total amount of endorsements and guarantees set by the company shall not exceed the company's net worth for the current period; the amount of endorsement and guarantee for a single enterprise shall not exceed 49% of the company's net worth for the current period.

Note 2: There are seven types of relationships between endorsers and endorsers, marked as follows:

(1) Companies with business transactions.
(2) Companies directly or indirectly holding more than fifty percent of the voting shares.
(3) Companies directly and indirectly holding more than fifty percent of the voting shares.
(4) Companies directly or indirectly holding over ninety percent of the voting shares.
(5) Companies engaged in mutual guarantees between peers or co-promoters for engineering projects based on contract provisions.
(6) Companies guaranteed by all shareholders in proportion to their shareholding ratios due to joint investment relationships.
(7) Mutual guarantees for performance guarantees under presale house sales contracts among peers in accordance with the Consumer Protection Act.

Note 3: Calculated based on the year-end exchange rate.

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Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

End-of-period holdings of marketable securities (excluding investments in subsidiaries, associated companies, and equity interests in joint ventures):

Held Company	Type and Name of Securities	Relationship with the Issuer of Securities	Accounting Item	End of Period				Highest Ownership or Investment Situation During the Period
				Number of Shares	Book Value	Percentage of Ownership	Fair Value
Nanyan Semiconductor	Standard Chartered PLC	None	Financial Assets Measured at Fair Value Through Profit or Loss - Non-current	-	14,568	-	14,568	-
o	Gold Passbook Account.	None	Financial Assets Measured at Fair Value Through Profit or Loss - Non-current	1,021	4,466	-	4,466	-

Amount of transactions in sales or purchases with related parties reaching NT$100 million or more, or exceeding 20% of paid-in capital: None.
Amount of receivables from related parties reaching NT$100 million or more, or exceeding 20% of paid-in capital: None.
Business relationships and significant transactions between parent and subsidiary companies are as follows:

Serial Number	Trader's Name	Counterparty	Relationship with the Trader	Nature of Nature of Transactions Transactions			Ratio to Total Revenue or Total Assets of the Merged Entity
				Account	amount of mone	Transaction Conditions
0	Our Company	Nanyan Semiconductor	1	Rental Income	15,260	According to Contract Terms	8.07%
0	Our Company	Nanyan Semiconductor	1	Deposit Received	1,200	According to Contract Terms	0.09%

Note 1: The numbering is as follows: :
1.0 represents the parent company.
Subsidiaries are numbered sequentially starting with the Arabic numeral 1 according to company type.

Note 2: Relationship types between transactors are marked as follows:
1. Parent company to subsidiary.

~71~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Subsidiary to parent company.
Subsidiary to subsidiary.

Note 3: The above transactions have been fully written off in the preparation of the consolidated financial statements

(2) Information on investments in associated enterprises:

The information on the investment projects of the merged companies for the 2025th year is as follows:

Investment Company Name	Invested Company Name	Location	Main Business Industry Item	Original Original Investment Investment Amount Amount		End-of-End-End-of-period Ownership Period Ownership Ship			Highest Holding During the Period or Investment Situation	Investee Company Current Period (Loss)	Recognized in Current Period	Notes
				End of Current Period	End of Prior Period	Number of Shares (Thousand Shares)	Ratio	Book Value
Our Company	Nanyan Semiconductor	Taiwan	Semiconductor Packaging and Testing	167,051	167,051	16,462	83.14%	178,074	83.14%	(42,048)	(34,959)	note 1

Note 1: The above transactions have been fully written off in the preparation of the consolidated financial statements.

(3) Information on Mainland China investments: None

14 · Departmental information

(1) General information

The Group operates in the real estate leasing segment and the semiconductor segment, with the semiconductor segment engaged in packaging and testing services.

These reporting segments of The Group are strategic business units, providing different products and services. As each strategic business unit requires distinct technologies and marketing strategies, they are managed separately. Most of these business units were acquired separately and retained their management teams at the time of acquisition.

(2) Reporting departmental profit and loss, assets, liabilities, and information on their measurement bases and adjustments.

The consolidated company uses the departmental pre-tax profit (excluding non-recurring gains and losses and exchange gains and losses) reviewed by the primary operating decision-maker as the basis for resource allocation and performance evaluation at the management level. Since income taxes, non-recurring gains and

~72~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

losses, and exchange gains and losses are managed on a group basis, the consolidated company does not allocate income tax expense (benefit), non-recurring gains and losses, and exchange gains and losses to the reporting departments. Additionally, not all reported departmental profits and losses include significant non-cash items apart from depreciation and amortization. The reported amounts are consistent with the reports used by operating decision-makers. Except for retirement benefit costs for each operating segment, which are recognized and measured on a cash basis for retirement plans, the accounting policies for operating segments are the same as those described in the 'Summary of Significant Accounting Policies' in Note 4.

The consolidated company treats sales and transfers between segments as transactions with third parties, measured at current market prices. The information and adjustments for operating segments of the consolidated company are as follows:

	2025
	Dyeing and Finishing Department	Semiconductor Department	Adjustment and Write-off	Total
Revenue:
Revenue from external customers	$ 60,523	128,485	-	189,008
Interdepartmental revenue	15,260	-	(15,260)	-
Interest income	9,477	2,914	-	12,391
Total revenue	$ 85,260	131,399	(15,260)	201,399
Interest expense	$ 376	160	(159)	377
Depreciation and amortization	3,646	34,134	(14,559)	23,221
Reported departmental profit and loss	$ 52,258	(42,048)	34,959	45,169
Non-current asset capital expenditure	$ 7,285	-	-	7,285
Reported departmental assets	$ 1,252,329	253,405	(194,339)	1,311,395
Reported departmental liabilities	$ 196,568	39,259	(16,298)	219,529

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

	2024
	Dyeing and Finishing Department	Semiconductor Department	Adjustment and Write-off	Total
Revenue:
Revenue from external customers	$ 49,542	187,176	-	236,718
Interdepartmental revenue	15,258	-	(15,258)	-
Interest income	10,748	4,640	-	15,388
Total revenue	$ 75,548	191,816	(15,258)	252,106
Interest expense	$ 338	341	(339)	340
Depreciation and amortization	2,414	34,943	(14,377)	22,980
Reported departmental profit and loss	$ 44,883	5,318	(4,420)	45,781
Non-current asset capital expenditure	$ 747	3,765	-	4,512
Reported departmental assets	$ 1,263,483	293,406	(224,136)	1,332,753
Reported departmental liabilities	$ 175,737	38,909	(12,546)	202,100

(3) Information by product and service category

The consolidated company's revenue from external customers is as follows:

Product and service names	2025	2024
Semiconductor packaging and testing revenue	$ 111,743	142,421
Product sales revenue	16,742	44,755
Real estate leasing revenue	60,523	49,542
Total	$ 189,008	236,718

(4) Regional breakdown information

The regional breakdown information of the consolidated company is as follows, where revenue is classified based on the geographic location of customers, while non-current assets are classified based on the geographic location of assets

~74~

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Regional breakdown	2025	2024
Revenue from external customers:
Taiwan	$ 127,534	125,289
United States	15,969	39,772
China	15,901	41,596
Other countries	29,604	30,061
Total	$ 189,008	236,718
Regional breakdown	Dec.31.2025	Dec.31.2024
Non-current assets :
Taiwan	$ 643,506	658,129

Non-current assets include real estate, plant and equipment, investment properties, and other assets, but do not include financial instruments, deferred tax assets, assets related to post-employment benefits.

(5) Information on key customers

The details of customers whose individual sales revenue accounted for over 10% of the consolidated comprehensive income statement's net operating revenue in the fiscal years 2025 and 2024 are as follows:

	2025	2024
Customers E	$ 49,437	49,404
Customers B	23,012	25,996
Customers A	21,437	25,881
Customers D	15,931	39,639
	$ 109,817	140,920

AI assistant

NYDF — Audit Report / Information 2025

51788_rns_2026-05-25_cc706167-ee18-43f7-b44c-078e7b81f4a1.pdf

Declaration

Audit Opinions

Basis of Audit Opinion

Key Audit Issues

semiconductor packaging and testing revenue

Audit Procedures:

Other Matters

Responsibilities of the Management and Governance Body to the Consolidated Financial Statements

Responsibilities of the Auditor When Auditing Consolidated Financial Statements

Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Balance Sheet

Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Statement of Comprehensive Income

For January 1 to December 31, 2025 and 2024

Nan Yang Dyeing & Finishing Co., Ltd. and Subsidiaries

Consolidated Statement of Changes in Equity

Nan Yang Dyeing & Finishing Co., Ltd.

Cash Flow Statement

Nanyang Dyeing & Finishing Co., Ltd. and its subsidiaries.

Consolidated Statement of Cash Flows (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

4. Summary of Significant Accounting Policies

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(3) Consolidation Basis:

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(5) Derecognition of Financial Assets

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(11) Leases

1. Lessee

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

5. The primary sources of significant accounting judgments, estimates, and assumptions uncertainty include:

(1) Revenue Recognition

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

6 \ Notes on Significant Accounting Items

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(8) Subsidiaries with significant non-controlling interests

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(10) Right-of-use assets

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(11) Investment properties

(12) Lease liabilities

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(14) Employee benefits

1. Defined benefit plans

(1) Composition of plan assets:

(2) Changes in the present value of defined benefit obligation:

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(6) Sensitivity analysis

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

2. Defined contribution plan

(15) Income tax

1. Income tax expense

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(4) Treasury Shares

(5) Other Equity (net of tax)

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(17) Earnings per share

(18) Revenue from customer contracts:

Notes to the Consolidated Financial Statements of Nanyang Dyeing & Finishing Co., Ltd. and its Subsidiaries (continued)

(19) Employee and Director Remuneration

NYDF Audit Report / Information 2025