Stock Code:1321

OCEAN PLASTICS CO., LTD.

Parent Company Only Financial Statements

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

Address: 5、6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City 108, Taiwan (R.O.C.)
Telephone: (02)2306-2131

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

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Independent Auditors’ Report	3
4. Balance Sheets	4
5. Statements of Comprehensive Income	5
6. Statements of Changes in Equity	6
7. Statements of Cash Flows	7
8. Notes to the Financial Statements
(1) Company history	8
(2) Approval date and procedures of the financial statements	8
(3) New standards, amendments and interpretations adopted	8~10
(4) Summary of material accounting policies	10~25
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	25~26
(6) Explanation of significant accounts	26~57
(7) Related-party transactions	57~59
(8) Pledged assets	59
(9) Commitments and contingencies	59~60
(10) Losses due to major disasters	60
(11) Subsequent Events	60
(12) Others	60~61
(13) Other disclosures
(a) Information on significant transactions	62~63
(b) Information on investees	63
(c) Information on investment in mainland China	64
(14) Segment information	64
9. List of major account titles	65~75

KPMG

当快速来得合理舒伸学诊所

KPMG

台北市110615信義路5段7號68樓(台北101大樓)

68F., TAIPEI 101 TOWER, No. 7, Sec. 5,

Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

電話 Tel +886 2 8101 6666

傳真 Fax +886 2 8101 6667

網址 Web kpmg.com/tw

Independent Auditors’ Report

To the Board of Directors of Ocean Plastics Co., Ltd.:

Opinion

We have audited the financial statements of Ocean Plastics Co., Ltd. (“the Company”), which comprise the balance sheet as of December 31, 2025 and 2024, the statement of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other Matter paragraph), the accompanying financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and its financial performance and its cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

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

Other Matter

We did not audit the financial statements of certain investments accounted for using the equity method of the Company. Those financial statements have been audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included in those financial statements, is based solely on the reports of other auditors. The financial statements of these investments accounted for using the equity method reflect total assets constituting 6% and 13% of total assets as of December 31, 2025 and 2024, and the related share of profit of associates accounted for using the equity method constituting (28)% and 87% of total profit before tax for the years then ended, respectively.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

KPMG

Key Audit Matters

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

1. Revenue recognition

Please refer to note 4(o) for the accounting policy on “Revenue recognition” and note 6(s) for information about revenue recognition.

Description of key audit matter:

The Company engages in manufacturing and selling plastics materials and downstream plastic products (plastic construction tubing, plastic cloth, plasticized synthetic leather, etc.). Considering the high trade volume and decentral customers of the Company, the control of products transfers at different time points might impact the time of revenue recognition. Therefore, revenue recognition has been identified as a key matter in our audit.

How the matter was addressed in our audit:

Our principal audit procedures in this area included, among others: evaluating the reasonableness of revenue recognition, understanding and testing the internal control of sales and collection cycles to ascertain if the implement was operative, checking individual sales transactions, customer orders, shipping certificates, invoices and other documents, delving into the periods before and after the balance sheet date in order to evaluate if the period of revenue recognition tallied with the trade condition and shipping documents.

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

Management is responsible for the preparation and fair presentation of the financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Financial Statements

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

KPMG

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

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of the investment in other entities accounted for using the equity method to express an opinion on this financial statements. We are responsible for the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.

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

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

KPMG

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

The engagement partners on the audit resulting in this independent auditors’ report are Yu, Sheng-Ho and Luo, Re-Chih.

KPMG

Taipei, Taiwan (Republic of China)
March 10, 2026

Notes to Readers

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

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

OCEAN PLASTICS CO., LTD.

Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets	December 31, 2025		December 31, 2024		Liabilities and Equity	December 31, 2025		December 31, 2024
		Amount	%	Amount			%	Amount	%	Amount	%
Current assets:						Current liabilities:
1100	Cash and cash equivalents (note 6(a))	$ 204,003	3	266,781	3	2100	Short-term borrowings (note 6(k) and 8)	$ 500,000	7	460,000	6
1110	Current financial assets at fair value through profit or loss (note 6(b))	152,828	2	201,710	2	2171	Notes and trade payables	236,591	3	340,754	4
1170	Notes and trade receivables, net (note 6(d)(s) and 7)	381,099	5	573,452	7	2200	Other payables (including related parties)(note 7)	169,156	2	201,960	3
130X	Inventories (note 6(e))	351,693	5	320,406	4	2300	Other current liabilities (note 6(j)(m) and 7)	29,983	-	28,373	-
1470	Other current assets (note 7)	43,398	-	47,921	1	2230	Current tax liabilities	2,554	-	5,315	-
	Total current assets	1,133,021	15	1,410,270	17		Total current liabilities	938,284	12	1,036,402	13
Non-current assets:						Non-Current liabilities:
1517	Non-current financial assets at fair value through other comprehensive income (note 6(e))	390,605	5	405,658	5	2540	Long-term borrowings (note 6(l) and 8)	500,000	7	600,000	7
1550	Investments accounted for using equity method (note 6(f))	2,450,288	32	2,647,601	32	2570	Deferred tax liabilities (note 6(p))	409,726	5	416,809	5
1600	Property, plant and equipment (note 6(g) and 8)	3,067,280	40	3,153,913	38	2640	Net defined benefit liability, non-current (note 6(o))	22,935	-	36,837	-
1755	Right-of-use assets (note 6(h))	48,437	2	65,701	1	2670	Other non-current liabilities (note 6(j)(m))	35,303	1	60,589	1
1760	Investments property, net (note 6(i) and 8)	384,784	5	386,029	5		Total Non-current liabilities	967,964	13	1,114,235	13
1840	Deferred tax assets (note 6(p))	10,561	-	6,124	-		Total liabilities	1,906,248	25	2,150,637	26
1900	Other non-current assets	3,953	-	8,167	-		Equity attributable to owners of parent (note 6(r)):
1942	Long-term accounts receivables due from related parties (note 7)	109,200	1	130,230	2	3100	Capital stock	2,272,283	30	2,272,283	28
	Total Non-current assets	6,465,108	85	6,803,423	83	3200	Capital surplus	24,018	-	21,532	-
						3300	Retained earnings	3,358,872	44	3,712,628	45
						3400	Other equity	72,897	1	92,802	1
						3500	Treasury shares	(36,189)	-	(36,189)	-
							Total equity	5,691,881	75	6,063,056	74
Total assets		$ 7,598,129	100	8,213,693	100		Total liabilities and equity	$ 7,598,129	100	8,213,693	100

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
OCEAN PLASTICS CO., LTD.
Statements of Comprehensive Income
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars, Except for Earnings Per Common Share)

	2025		2024
		Amount	%	Amount	%
4100	Operating revenues, net (note 6(s) and 7)	$ 3,001,344	100	4,010,519	100
5000	Operating costs (note 6(e)(o) and 7)	2,853,426	95	3,769,706	94
5900	Gross profit from operation	147,918	5	240,813	6
6000	Operating expenses (note 6(d)(n)(o)(t)):
6100	Selling expenses	173,534	6	218,104	5
6200	Administrative expenses	91,782	3	99,650	3
6300	Research and development expenses	14,854	-	17,248	-
6450	Impairment loss (gain) determined in accordance with IFRS 9	125	-	(81)	-
	Total operating expenses	280,295	9	334,921	8
6900	Net operating income	(132,377)	(4)	(94,108)	(2)
7000	Non-operating income and expenses:
7100	Interest income (note 6(u))	3,218	-	8,717	-
7010	Other income (note 6(n)(u))	35,750	1	85,359	2
7020	Other gains and losses, net (note 6(u))	(76,204)	(3)	107,942	2
7050	Finance costs (note 6(u))	(18,869)	(1)	(19,596)	-
7070	Share of profit (loss) of associates and joint ventures accounted for using equity method, net (note6(f))	(105,801)	(3)	81,714	2
	Total non-operating income and expenses	(161,906)	(6)	264,136	6
	Profit (Loss) before income tax	(294,283)	(10)	170,028	4
7950	Less: Income tax (benefits) expenses (note 6(p))	(18,734)	(1)	3,094	-
	Profit (Loss)	(275,549)	(9)	166,934	4
8300	Other comprehensive income:
8310	Items that will not be reclassified subsequently to profit or loss
8311	Gains on remeasurements of defined benefit plans	8,139	-	29,958	1
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income	(15,053)	(1)	(259,738)	(6)
8330	Share of other comprehensive income of subsidiaries and associates accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	(7,703)	-	3,220	-
8349	Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	-	-	-	-
		(14,617)	(1)	(226,560)	(5)
8360	Items that will be reclassified subsequently to profit or loss
8361	Exchange differences on translation	2,851	-	16,890	-
8399	Income tax related to components of other comprehensive income that will be reclassified to profit or loss	-	-	-	-
		2,851	-	16,890	-
8300	Other comprehensive income	(11,766)	(1)	(209,670)	(5)
	Total comprehensive income	$ (287,315)	(10)	(42,736)	(1)
	Earnings per share (NT dollars) (note 6(s))
9750	Basic earnings per share (NT dollars)	$	(1.25)		0.76
	Diluted earnings per share (NT dollars)	$	(1.25)		0.76

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
OCEAN PLASTICS CO., LTD.
Statements of Changes in Equity
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	Share capital		Retained earnings				Total other equity interest
	Ordinary shares	Capital surplus	Legal reserve	Special reserve	Unappropriated retained earnings	Total retained earnings	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Total other equity interest	Treasury shares	Total equity
Balance at January 1, 2024	$ 2,272,283	18,915	85,240	2,978,245	543,142	3,606,627	(39,421)	371,851	332,430	(36,189)	6,194,066
Appropriation and distribution of retained earnings:
Legal reserve appropriated	-	-	19,460	-	(19,460)	-	-	-	-	-	-
Cash dividends of ordinary share	-	-	-	-	(90,891)	(90,891)	-	-	-	-	(90,891)
	-	-	19,460	-	(110,351)	(90,891)	-	-	-	-	(90,891)
Profit	-	-	-	-	166,934	166,934	-	-	-	-	166,934
Other comprehensive income	-	-	-	-	29,958	29,958	16,890	(256,518)	(239,628)	-	(209,670)
Total comprehensive income	-	-	-	-	196,892	196,892	16,890	(256,518)	(239,628)	-	(42,736)
Adjustments of capital surplus for company's cash dividends received by subsidiaries	-	2,617	-	-	-	-	-	-	-	-	2,617
Balance at December 31, 2024	2,272,283	21,532	104,700	2,978,245	629,683	3,712,628	(22,531)	115,333	92,802	(36,189)	6,063,056
Appropriation and distribution of retained earnings:
Legal reserve appropriated	-	-	19,690	-	(19,690)	-	-	-	-	-	-
Cash dividends of ordinary share	-	-	-	-	(86,346)	(86,346)	-	-	-	-	(86,346)
	-	-	19,690	-	(106,036)	(86,346)	-	-	-	-	(86,346)
Profit (loss)	-	-	-	-	(275,549)	(275,549)	-	-	-	-	(275,549)
Other comprehensive income	-	-	-	-	8,139	8,139	2,851	(22,756)	(19,905)	-	(11,766)
Total comprehensive income	-	-	-	-	(267,410)	(267,410)	2,851	(22,756)	(19,905)	-	(287,315)
Adjustments of capital surplus for company's cash dividends received by subsidiaries	-	2,486	-	-	-	-	-	-	-	-	2,486
Balance at December 31, 2025	$ 2,272,283	24,018	124,390	2,978,245	256,237	3,358,872	(19,680)	92,577	72,897	(36,189)	5,691,881

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD.

Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash flows from (used in) operating activities:
Profit (loss) before tax	$ (294,283)	170,028
Adjustments:
Adjustments to reconcile loss:
Depreciation expense	223,964	214,468
Expected credit loss (gain)	125	(81)
Net loss (gain) on financial assets or liabilities at fair value through profit or loss	48,882	(66,255)
Interest expense	18,869	19,596
Interest income	(3,218)	(8,717)
Dividend income	(9,648)	(35,453)
Share of loss (profit) of subsidiaries and associates accounted for using equity method	105,801	(81,714)
Loss on disposal of property, plant and equipment	-	43
Profit from lease modification	(45)	-
Total adjustments to reconcile loss	384,730	41,887
Changes in operating assets and liabilities:
Changes in operating assets:
Notes and trade receivables	192,228	(11,327)
Inventories	(31,287)	17,279
Other current assets	16,806	(1,571)
Other operating assets	4,528	(1,280)
Total changes in operating assets	182,275	3,101
Changes in operating liabilities:
Contract liabilities	801	(2,091)
Notes and trade payables	(104,163)	(83,731)
Other payable (including related parties)	(32,840)	3,454
Provisions	1,170	1,113
Other current liabilities	115	(64)
Net defined benefit liability	(14,181)	(20,134)
Total changes in operating liabilities	(149,098)	(101,453)
Total changes in operating assets and liabilities	33,177	(98,352)
Total adjustments	417,907	(56,465)

See accompanying notes to parent company only financial statements.

7-1

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
OCEAN PLASTICS CO., LTD.

Statements of Cash Flows
For the years ended December 31, 2025 and 2024
(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash inflow generated from operations	123,624	113,563
Interest received	3,218	8,717
Dividends received	98,794	139,671
Interest paid	(18,833)	(18,990)
Income taxes (paid) refund	4,137	(937)
Net cash flows from operating activities	210,940	242,024
Cash flows from (used in) investing activities:
Acquisition of financial assets at amortised cost	-	30,725
Acquisition of property, plant and equipment	(113,031)	(115,119)
Increase in refundable deposits	-	(44)
Increase in other receivables due from related parties	8,749	(5,880)
Net cash flows used in investing activities	(104,282)	(90,318)
Cash flows from (used in) financing activities:
Increase in short-term borrowings	40,000	260,000
Repayments of long-term borrowings	(100,000)	(322,329)
Payment of lease liabilities	(23,090)	(23,228)
Cash dividends paid	(86,346)	(90,891)
Net cash flows used in financing activities	(169,436)	(176,448)
Net Decrease in cash and cash equivalents	(62,778)	(24,742)
Cash and cash equivalents at beginning of period	266,781	291,523
Cash and cash equivalents at end of period	$ 204,003	266,781

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)
OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2025 and 2024

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

(1) Company history

OCEAN PLASTICS CO., LTD. (hereinafter referred to as the "Company") was incorporated in June 1965, as a company limited by shares under the Company Act of the Republic of China (R.O.C.), and merged with Yee Fong Chemical & Industrial Co., Ltd.. The Company was registered in 5F & 6F., No. 310, Juguang Rd., Wanhua Dist., Taipei City. The Company's common shares were listed on the Taiwan Stock Exchange (TWSE) in January 1999. The major business activities of the Company are the manufacture and sale of plastics.

(2) Approval date and procedures of the financial statements:

These financial statements were authorized for issue by the Board of Directors on March 10, 2026.

(3) New standards, amendments and interpretations adopted:

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. which have already been adopted.

The Company has initially adopted the following new amendments, which do not have a significant impact on its financial statements, from January 1, 2025:

Amendments to IAS21 "Lack of Exchangeability"
Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments" regarding the application guidance requirements for Section 4.1 of IFRS 9 and the related disclosure requirements of IFRS 7

(b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective

The Company assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its financial statements:

IFRS 17 "Insurance Contracts" and amendments to IFRS 17 "Insurance Contracts"
Amendments to IFRS 9 and IFRS 7 "Amendments to the Classification and Measurement of Financial Instruments" regarding the application guidance requirements for Sections 3.1 and 3.3 of IFRS 9 and the related disclosure requirements of IFRS 7
Annual Improvements to IFRS Accounting Standards—Volume 11
Amendments to IFRS 9 and IFRS 7 "Contracts Referencing Nature-dependent Electricity"

The following new and amended standards, which may be relevant to the Company, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

Standards or Interpretations	Content of amendment	Effective date per IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

• A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities.

• Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.

• Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes. | January 1, 2027
note: On September 25, 2025, the FSC issued a press release announcing that Taiwan will adopt IFRS 18 beginning in 2028. Entities that need to adopt the new standard earlier may do with the endorsement of the FSC. |

The Company is evaluating the impact on its financial position and financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Company completes its evaluation.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The Company does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its 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 “Subsidiaries without Public Accountability: Disclosures”
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”

(4) Summary of material accounting policies:

The material accounting policies presented in the financial statements are summarized below. Except for those specifically indicated, the following accounting policies were applied consistently throughout the periods presented in the financial statements.

(a) Statement of compliance

This individual financial statement has been prepared accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

(b) Basis of preparation

(i) Basis of measurement

Except for the following significant accounts, the financial statements have been prepared on a historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) The defined benefit liabilities (assets) are measured at fair value of the plan assets less the present value of the defined benefit obligation, limited as explained in note 4(p).

(ii) Functional and presentation currency

The functional currency of each Company entity is determined based on the primary economic environment in which the entity operates. The consolidated financial statements are presented in New Taiwan Dollar (TWD), which is the Company’s functional currency. All financial information presented in TWD has been rounded to the nearest thousand.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Company entities at the exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary item denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary items denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non-monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except for those differences relating to the following, which are recognized in other comprehensive income:

1) an investment in equity securities designated as at fair value through other comprehensive income;
2) financial liability designated as a hedge of the net investment in a foreign operation to the extent that the hedge is effective; or
3) qualifying cash flow hedges to the extent that the hedges are effective.

(ii) Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence, or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Company disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Company disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified to profit or loss.

When the settlement of a monetary receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, Exchange differences arising from such a monetary item that are considered to form part of the net investment in the foreign operation are recognized in other comprehensive income.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(d) Classification of current and non-current assets and liabilities

The Company classifies the asset as current under one of the following criteria, and all other assets are classified as non-current.

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

The Company classifies the liability as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Company does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(e) Cash and cash equivalents

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

(f) Financial Instruments

Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date basis.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Debt investments at FVOCI are subsequently measured at fair value. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in other comprehensive income. On derecognition, gains and losses accumulated in other comprehensive income are reclassified to profit or loss.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

Dividend income is recognized in profit or loss on the date on which the Company’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above (e.g. financial assets held for trading and those that are managed and whose performance is evaluated on a fair value basis) are measured at FVTPL, including derivative financial assets. Trade receivables that the Company intends to sell immediately or in the near term are measured at FVTPL; however, they are included in the ‘trade receivables’ line item. On initial recognition, the Company may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

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

4) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, amortized costs, notes and trade receivables, other receivable, guarantee deposit paid and other financial assets), debt investments measured at FVOCI and contract assets.

The Company measures loss allowances at an amount equal to lifetime ECL, except for the following which are measured as 12-month ECL:

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

Loss allowance for trade receivables and contract assets are always measured at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Company’s historical experience and informed credit assessment as well as forward-looking information.

The Company assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The Company considers a financial asset to be in default when the financial asset is more than 180 days past due or the debtor is unlikely to pay its credit obligations to the Company in full.

The Company considers a debt security to have low credit risk when its credit risk rating is equivalent to the globally understood definition of ‘investment grade which is considered to be BBB- or higher per Standard & Poor’s, Baa3 or higher per Moody’s or twA or higher per Taiwan Ratings’.

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

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

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

ECL are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e the difference between the cash flows due to the Company in accordance with the contract and the cash flows that the Company expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

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

significant financial difficulty of the borrower or issuer;
a breach of contract such as a default or being more than 180 days past due;
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets. For debt securities at FVOCI, the loss allowance is charged to profit or loss and is recognized in other comprehensive income instead of reducing the carrying amount of the asset.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The gross carrying amount of a financial asset is written off when the Company has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. For corporate customers, the Company individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Company expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Company’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Company enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

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

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

4) Financial liabilities

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

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

5) Derecognition of financial liabilities

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

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

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(g) Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of inventories is calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

(h) Investment in associates

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

Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The financial statements include the Company’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Company, from the date on which significant influence commences until the date on which significant influence ceases. The Company recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses resulting from transactions between the Company and an associate are recognized only to the extent of unrelated Company’s interests in the associate.

When the Company’s share of losses of an associate equals or exceeds its interests in an associate, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

(i) Investments in Subsidiaries

On preparing individual financial reports, the Company adopts the equity method to evaluate investees who are under control. In equity method, current incomes and other comprehensive incomes in individual financial report are same with the ones attribute to the parent company in consolidated financial reports. Also, the equity in individual financial report is same with the one attribute to the parent company in consolidated financial reports.

If the Company has change on the ownership equity of the subsidiary that does not result in the loss of control, it can be as the equity transaction between them.

(j) Investment property

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

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

(k) Property, plant and equipment

(i) Recognition and measurement

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

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

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

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

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.

(iii) Depreciation

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

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) buildings 5~50 years
2) machinery equipment 3~20 years
3) other facility 2~50 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(iv) Reclassification to investment property

When the use of a property changes from owner-occupied to investment property, the property is remeasured to fair value and reclassified accordingly.

(l) Leases

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

(i) As a lessee

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

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Company’s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.

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

1) fixed payments, including in substance fixed payments;
2) variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
3) amounts expected to be payable under a residual value guarantee; and
4) payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

1) there is a change in future lease payments arising from the change in an index or rate; or
2) there is a change in the Company’s estimate of the amount expected to be payable under a residual value guarantee; or
3) there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset, or
4) there is a change of its assessment on whether it will exercise a purchase, extension or termination option; or
5) there are any lease modifications

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Company presents right-of-use assets that do not meet the definition of investment and lease liabilities as a separate line item respectively in the statement of financial position.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The Company has elected not to recognize right-of-use assets and lease liabilities for short-term leases of other facilities that have a lease term of 12 months or less and leases of low-value assets. The Company recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

When the Company acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Company makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Company considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Company applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, the Company applies IFRS15 to allocate the consideration in the contract.

(m) Impairment of non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than inventories and deferred tax assets less costs) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs).

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.

Impairment losses are recognized in profit or loss. They are allocated to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

For other non-financial assets, an impairment loss is reversed only to the extent that the asset’s carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the assets in prior years.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(n) Provisions

A provision is recognized if, as a result of a past event, the Company has a present obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost.

(i) Carbon fees

Carbon fees levied in accordance with Taiwan’s Climate Change Response Act and Regulations Governing the Collection of Carbon Fees are recognized when the annual greenhouse gas emissions are probably to exceed the threshold. The provision for the carbon fee is measured based on the volume of greenhouse gas emissions incurred that exceeds the statutory threshold, using the rate expected to be applied, during the reporting period.

(o) Revenue from contracts with customers

Revenue is measured based on the consideration to which the Company expects to be entitled in exchange for transferring goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Company’s main types of revenue are explained below.

(i) Sale of goods

The Company manufactures and sells plastic materials and products. The Company recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, or the Company has objective evidence that all criteria for acceptance have been satisfied. A receivable is recognized when the goods are delivered as this is the point in time that the Company has a right to an amount of consideration that is unconditional.

(ii) Financing components

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(p) Employee benefits

(i) Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plans

The Company’s net obligation in respect of defined benefit plans is calculated separately for each the plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

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

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(iii) Other long-term employee benefits

The Company’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognized in profit or loss in the period in which they arise.

(iv) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(q) Income taxes

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

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities at the reporting date and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transaction (1) affects neither accounting nor taxable profits (losses) and (2) does not give rise to equal taxable and deductible temporary differences;

(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) taxable temporary differences arising on the initial recognition of goodwill.

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

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Company has a legally enforceable right to set off current tax assets against current tax liabilities; and

(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

1) the same taxable entity; or

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

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(r) Earnings per share

The Company discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(s) Operating segments

Segment information was disclosed in consolidated financial statement; therefore, it was not disclosed in the parent company only financial statement.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty:

In preparing these financial statements, management has made judgments and estimates about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Company’s risk management and climate-related commitments where appropriate. Revisions to estimates are recognised prospectively in the period of the change and future periods.

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the financial statements is as follows:

(a) Judgment of whether the Company has substantive control over its investees

Holding 44.62% of the outstanding voting shares in Chun Pin Enterprise Co., Ltd., the Company was not the largest shareholder. The Company obtained neither more than half of Chun Pin Enterprise Co., Ltd.’s Board seats, nor more than half of the voting rights at a shareholders’ meeting. Therefore, it was determined that the Company only had significant influence on Chun Pin Enterprise Co., Ltd..

Holding 40% of preferred stock and 50% of common stock in Foremost-Oceans NueTeq, Ltd., the Company was not the largest shareholder. The Company obtained neither more than half of Foremost-Oceans NueTeq, Ltd.’s Board seats, nor more than half of the voting rights at a shareholders’ meeting. Therefore, it was determined that the Company only had significant influence on Foremost-Oceans NueTeq, Ltd..

Information about assumptions and estimation uncertainties that has a significant risk of resulting in a material adjustment within the next financial year is as follows:

(a) Inventory valuation

Inventories are measured at the lower of cost or net realizable value. The Company assesses value of inventories that are worn, obsolete, and unmarketable at the reporting date, and writes down the cost of inventories to their net realizable value. Inventory valuation is based on expected market demand in a period of foreseeable future which may fluctuate by rapid change in industry. For the estimation of inventory valuation, please refer to note 6(e) for details.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(b) The Company’s accounting policies include measuring financial and non financial assets and liabilities at fair value through profit or loss. The Company’s financial instrument valuation group conducts independent verification on fair value by using data sources that are independent, reliable, and representative of exercise prices. This financial instrument valuation group also periodically adjusts valuation models, conducts back testing, renews input data for valuation models, and makes all other necessary fair value adjustments to assure the rationality of fair value.

The Company strives to use market observable inputs when measuring assets and liabilities. Different levels of the fair value hierarchy to be used in determining the fair value of financial instruments are as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: inputs for the assets or liability that are not based on observable market data.

Please refer to Note 6(v) for assumptions used in measuring fair value.

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Revolving funds and cash on hand	$ 550	500
Demand deposits and check deposits	203,453	266,281
Cash and cash equivalents in the statement of cash flows	$ 204,003	266,781

Please refer to note 6(v) for the exchange rate risk, interest rate risk, and sensitivity analysis of the financial assets and liabilities of the Company.

(b) Financial assets at fair value through profit or loss

	December 31, 2025	December 31, 2024
Current financial assets mandatorily measured at fair value through profit or loss:
Listed domestic stock	$ 152,828	201,710

The financial assets at fair value through profit or loss of the Company were not pledged as collateral as of December 31, 2025 and 2024.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	December 31, 2025	December 31, 2024
Equity investments at fair value through other comprehensive income:
Unlisted domestic stock—Taiwan VCM Corporation	$ 324,713	333,905
Unlisted domestic stock—Others	65,892	71,753
Total	$ 390,605	405,658

(i) Equity investments at fair value through other comprehensive income

The Company holds this equity investment as long-term strategic investment without any trade purpose, so it is assigned to use fair value through other comprehensive income to evaluate.

There were no disposals of strategic investments and transfers of any cumulative gain or loss within equity relating to these investments as of December 31, 2025 and 2024.

(ii) Credit risk and market risk information refers to note 6(v).

(iii) On December 31, 2025 and 2024, the financial assets at fair value through other comprehensive income which held by the Company did not offer any pledge and assurance.

(d) Notes and trade receivable

	December 31, 2025	December 31, 2024
Notes receivable from operating activities	$ 22,469	26,244
Trade receivables	361,878	550,331
Less: Loss allowance	(3,248)	(3,123)
	$ 381,099	573,452

The Company applies the simplified approach to provide for its expected credit losses, i.e. the use of lifetime expected loss provision for all receivables. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due, as well as the incorporated forward-looking information, including macroeconomic and relevant industry information. The loss allowance provisions were determined as follows:

	December 31, 2025
	Gross carrying amount	Weighted-average loss rate	Loss allowance provision
Current	$ 368,648	-	-
1 to 180 days past due	13,481	8%	1,030
More than 180 days past due	2,218	100%	2,218
	$ 384,347		3,248

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	December 31, 2024
	Gross carrying amount	Weighted-average loss rate	Loss allowance provision
Current	$ 560,256	-	-
1 to 180 days past due	14,101	6%	905
More than 180 days past due	2,218	100%	2,218
	$ 576,575		3,123

The movements in the allowance for notes and trade receivables were as follows:

	2025	2024
Balance at January 1	$ 3,123	3,204
Impairment losses recognized (reversed)	125	(81)
Balance at December 31	$ 3,248	3,123

The aforementioned notes and trade receivables of the Company were not pledged as collateral as of December 31, 2025 and 2024.

(e) Inventories

	December 31, 2025	December 31, 2024
Manufacturing:
Raw materials	$ 176,240	148,533
Work in progress	19,841	23,931
Finished goods	155,612	147,942
	$ 351,693	320,406

The Company's relevant inventory details recognized in operating costs in 2025 and 2024 are as follows:

	2025	2024
Cost of goods sold	$ 2,637,350	3,617,842
Write-downs of inventories (Reversal of write-downs)	7,880	(12,953)
Idle capacity	205,762	162,182
Others	2,434	2,635
	$ 2,853,426	3,769,706

As of December 31, 2025 and 2024, the Company had not provided any inventories as collateral for its loans.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(f) Investments accounted for using equity method

A summary of the Company’s financial information for investments accounted for using the equity method at the reporting date is as follows:

	December 31, 2025	December 31, 2024
Subsidiaries	$ 1,977,146	2,166,219
Associates	473,142	481,382
	$ 2,450,288	2,647,601

(i) Subsidiary

Please refer to consolidated financial report of 2025.

(ii) Associates

Associates which are material to the Company consisted of the followings:

Name of Associates	Nature of Relationship with the Company	Main operating location/ Registered country of the Company	Proportion of shareholding and voting rights		Note
			December 31, 2025	December 31, 2024
Chun Pin Enterprise Co., Ltd.	Wholesale of chemical feedstock and products and warehousing	Taiwan	44.62 %	44.62 %
Foremost-Oceans NueTeq, Ltd.	Wholesale of petrochemical materials and manufacturing	Taiwan	40.07% 、 50.00%	40.07% 、 50.00%	Note1

Note 1: The Company held 50% voting ordinary shares and 40% non-voting preference shares in Foremost-Oceans NueTeq, Ltd., and the percentage of ownership interest was 40.07%.

The financial information of the Associate which has materiality on the Company is as follows. It already adjusted the amount in the Associate’s IFRS Accounting Standards individual financial report to reflect the adjustments for fair values and for accounting policy difference:

1) Chun Pin Enterprise Co., Ltd.

	December 31, 2025	December 31, 2024
Current assets	$ 914,994	906,418
Non-current assets	227,107	241,256
Current liabilities	(66,216)	(41,248)
Non-current liabilities	(22,412)	(36,427)
Net assets	$ 1,053,473	1,069,999

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	2025	2024
Operating revenue	$ 473,845	469,130
Profit	211,313	250,078
Other comprehensive income	-	-
Total comprehensive income	$ 211,313	250,078
	2025	2024
Share of net assets of associates as of January 1	$ 477,384	454,029
Comprehensive income attributable to the Company	81,773	111,573
Dividends received from associates	(89,146)	(88,218)
Share of net assets of associates as of December 31	$ 470,011	477,384

2) Foremost-Oceans NueTeq, Ltd.

	December 31, 2025	December 31, 2024
Current assets	$ 1,676	1,791
Non-current assets	6,163	8,217
Current liabilities	(25)	(31)
Net assets	$ 7,814	9,977
	2025	2024
Operating revenue	$ -	-
Loss	(2,163)	(2,176)
Other comprehensive income	-	-
Total comprehensive income	$ (2,163)	(2,176)
	2025	2024
Share of net assets of associates as of January 1	$ 3,998	4,870
Comprehensive income attributable to the Company	(867)	(872)
Share of net assets of associates as of December 31	$ 3,131	3,998

(iii) Guarantee

As of December 31, 2025 and 2024, the Company had not provided any investment accounted for using equity method as collaterals for its loans.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(g) Property, plant and equipment

The cost, depreciation, and impairment of the property, plant and equipment of the Company for the years ended December 31, 2025 and 2024, were as follows:

	Lands	Buildings and constructions	Machinery and equipment	Other facilities	Construction in progress	Total
Cost or deemed cost:
Balance on January 1, 2025	$ 1,531,057	1,255,528	2,046,604	1,617,487	52,460	6,503,136
Additions	-	680	12,006	55,586	44,759	113,031
Transfer from construction in progress	-	1,616	9,769	36,556	(47,941)	-
Disposal	-	-	(8,119)	(7,997)	-	(16,116)
Balance on December 31, 2025	$ 1,531,057	1,257,824	2,060,260	1,701,632	49,278	6,600,051
Balance on January 1, 2024	$ 1,483,366	1,247,638	1,994,585	1,558,874	71,226	6,355,689
Additions	-	-	-	-	116,348	116,348
Transfer from construction in progress	-	7,890	55,816	70,923	(134,629)	-
Reclassification from investment property	47,691	-	-	-	-	47,691
Reclassification to prepayments for equipment	-	-	-	-	(485)	(485)
Disposal	-	-	(3,797)	(12,310)	-	(16,107)
Balance on December 31, 2024	$ 1,531,057	1,255,528	2,046,604	1,617,487	52,460	6,503,136
Depreciation and impairments loss:
Balance on January 1, 2025	$ -	408,796	1,616,271	1,324,156	-	3,349,223
Depreciation and impairment loss for the year	-	25,435	77,277	96,952	-	199,664
Disposal	-	-	(8,119)	(7,997)	-	(16,116)
Balance on December 31, 2025	$ -	434,231	1,685,429	1,413,111	-	3,532,771
Balance on January 1, 2024	$ -	383,731	1,542,054	1,249,475	-	3,175,260
Depreciation and impairment loss for the year	-	25,065	77,971	86,991	-	190,027
Disposal	-	-	(3,754)	(12,310)	-	(16,064)
Balance on December 31, 2024	$ -	408,796	1,616,271	1,324,156	-	3,349,223
Carrying amount:
Balance on December 31, 2025	$ 1,531,057	823,593	374,831	288,521	49,278	3,067,280
Balance on January 1, 2024	$ 1,483,366	863,907	452,531	309,399	71,226	3,180,429
Balance on December 31, 2024	$ 1,531,057	846,732	430,333	293,331	52,460	3,153,913

The Company transferred the land in Zhonghe District of New Taipei City to its subsidiary for the urban land consolidation, and the subsidiary compensated the Company for the demolition and relocation subsidy of the factory on such land under the “Regulations for local autonomy on relocation compensation for public construction land by New Taipei City”. For the year ended December 31, 2025 and 2024, the accumulated amounts were both $1,346,304 thousand, which is deferred as they are inter transactions between parents and subsidiary.

As of December 31, 2025 and 2024, the collateral details of short-term and long-term borrowings and credit lines, please refer to note 8.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(h) Right-of-use-assets

The Company leases many assets including land, buildings and constructions and other facilities. Information about leases for which the Company as a lessee was presented below:

	Lands	Buildings and constructions	Other facilities	Total
Cost:
Balance at January 1, 2025	$ 9,652	26,062	95,476	131,190
Additions	11,583	-	-	11,583
Decrease	(9,653)	-	-	(9,653)
Balance at December 31, 2025	$ 11,582	26,062	95,476	133,120
Balance at January 1, 2024	$ 9,701	26,194	95,917	131,812
Additions	9,652	26,062	-	35,714
Decrease	(9,701)	(26,194)	(441)	(36,336)
Balance at December 31, 2024	$ 9,652	26,062	95,476	131,190
Accumulated depreciation:
Balance at January 1, 2025	$ 1,931	5,212	58,346	65,489
Depreciation for the year	1,930	5,212	15,913	23,055
Decrease	(3,861)	-	-	(3,861)
Balance at December 31, 2025	$ -	10,424	74,259	84,683
Balance at January 1, 2024	$ 9,701	26,194	42,733	78,628
Depreciation for the year	1,931	5,212	16,054	23,197
Decrease	(9,701)	(26,194)	(441)	(36,336)
Balance at December 31, 2024	$ 1,931	5,212	58,346	65,489
Carrying amount:
Balance at December 31, 2025	$ 11,582	15,638	21,217	48,437
Balance at January 1, 2024	$ -	-	53,184	53,184
Balance at December 31, 2024	$ 7,721	20,850	37,130	65,701

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(i) Investment property

	Land	Buildings	Total
Cost or deemed cost :
Balance at December 31, 2025
(Same balance as January 1, 2025)	$ 374,329	18,391	392,720
Balance at January 1, 2024	$ 422,020	18,391	440,411
Reclassification to property, plant and equipment	(47,691)	-	(47,691)
Balance at December 31, 2024	$ 374,329	18,391	392,720
Accumulated depreciation and impairment losses:
Balance at January 1, 2025	$ -	6,691	6,691
Depreciation for the year	-	1,245	1,245
Balance at December 31, 2025	$ -	7,936	7,936
Balance at January 1, 2024	$ -	5,447	5,447
Depreciation for the year	-	1,244	1,244
Balance at December 31, 2024	$ -	6,691	6,691
Carrying amount:
Balance at December 31, 2025	$ 374,329	10,455	384,784
Balance at January 1, 2024	$ 422,020	12,944	434,964
Balance at December 31, 2024	$ 374,329	11,700	386,029
Fair value
Balance at December 31, 2025			$ 2,100,297
Balance at December 31, 2024			$ 2,144,387

Part of the lands were agricultural land, which's legal title were not allowed to be held by the Company were held temporarily by third party and registered as mortgage to the Company. The Company is applying for alternation of land use for above lands and their title will be transferred to the Company once the process of alternation of land use complete. As of December 31, 2025 and 2024, carrying amount of above mentioned lands were both $84,803 thousand.

As of December 31, 2025 and 2024, the fair value stated above was according to the latest transaction data announced on the website of Department of Land Administration Ministry of the Interior.

Investment property comprises a number of lands that are leased to third parties. Each of the leases contains a 3 to 15 years non-cancellable period. Subsequent renewals are negotiated with the lessee and no contingent rents are charged. For further information, please refer to note 6(n).

As of December 31, 2025 and 2024, investment property of the Company had been pledged as collateral for short-term and long-term borrowings and credit lines, please refer to note 8.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(j) Other current liabilities and other non-current liabilities

The other current liabilities of the Company were as follows:

	December 31, 2025	December 31, 2024
Lease liabilities – current	$ 23,784	23,090
Contract liabilities – current	4,268	3,467
Others	1,931	1,816
	$ 29,983	28,373

The other non-current liabilities of the Company were as follows:

	December 31, 2025	December 31, 2024
Lease liabilities – non-current	$ 25,327	43,365
Employee benefits provisions – non-current	6,673	13,921
Guarantee deposits received	3,303	3,303
	$ 35,303	60,589

(k) Short-term borrowings

The short-term borrowings of the Company were summarized as follows:

	December 31, 2025	December 31, 2024
Unsecured bank loans	$ 100,000	100,000
Secured bank loans	400,000	360,000
Total	$ 500,000	460,000
Unused short-term credit lines	$ 1,050,000	990,000
Range of interest rates	1.85%~1.88%	1.85%~2.05%

For the collateral for short-term borrowings, please refer to note 8.

(l) Long-term borrowings

The long-term borrowing details were as follows:

	December 31, 2025
	Currency	Rate	Maturity year	Amount
Secured bank loans	TWD	1.83%	2028	$ 500,000
Less: current portion				-
Total				$ 500,000
Unused long-term credit lines				$ 1,300,000

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	December 31, 2024
	Currency	Rate	Maturity year	Amount
Secured bank loans	TWD	1.81%	2026	$ 600,000
Less: current portion				-
Total				$ 600,000
Unused long-term credit lines				$ 1,200,000

For the collateral for long-term borrowings, please refer to note 8.

(m) Leases Liabilities

The lease liabilities of the Company’s were as follows:

	December 31, 2025	December 31, 2024
Current	$ 23,784	23,090
Non-current	$ 25,327	43,365

For maturity analysis, please refer to note 6 (v).

The amounts recognized in profit or loss was as follows:

	2025	2024
Interest on lease liabilities	$ 765	772
Expenses relating to short-term leases	$ -	96
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	$ 282	9

The amounts recognized in the statement of cash flows by the Company were as follows:

	2025	2024
Total cash outflow for leases	$ 24,137	24,105

The Company leases land and buildings, and raw material storage tanks. The leases run for three to five years. Some leases include an option to renew the lease for an additional period of the same duration after the end of the contract term.

Some leases provide for additional rent payments that are based on changes in local price indices. Some also require the Company to make payments that relate to the property taxes levied on the lessor and insurance payments made by the lessor; these amounts are generally determined annually.

In addition, the Company leases other equipment for a period of one to three years, and such leases are short-term and low-value subject leases, and the Company chooses to apply the exemption regulations instead of recognizing its related right-of-use assets and lease liabilities.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(n) Operating lease

The Company leases out its investment property and other facilities. The Company has classified these leases as operating leases.

A maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date are as follows:

	December 31, 2025	December 31, 2024
Less than one year	$ 9,846	9,727
One and two years	10,076	9,846
Two and three years	10,240	10,076
Three and four years	10,479	10,240
Four and five years	10,650	10,479
More than five years	38,108	48,758
Total undiscounted lease payment	$ 89,399	99,126

Rental income from investment properties was $12,247 thousand and $12,061 thousand in 2025 and 2024, respectively.

(o) Employee benefits

(i) Defined benefit plans

Reconciliation of defined benefit obligation at present value and plan asset at fair value are as follows:

	December 31, 2025	December 31, 2024
Present value of the defined benefit obligations	$ 285,280	297,532
Fair value of plan assets	(262,345)	(260,695)
Net defined benefit liabilities	$ 22,935	36,837

The Company's employee benefit liabilities were as follows:

	December 31, 2025	December 31, 2024
Long-term vacation liability	$ 13,332	13,620
Cash-settled share-based payment liability	-	-
Total employee benefit liabilities	$ 13,332	13,620

The Company makes defined benefit plan contributions to the pension fund account with Bank of Taiwan that provides pensions for employees upon retirement. Plans (covered by the Labor Standards Law) entitle a retired employee to receive retirement benefits based on years of service and average monthly salary for the six months prior to retirement.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

1) Composition of plan assets

The Company allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Company’s Bank of Taiwan labor pension reserve account balance amounted to $262,345 thousand as of December 31, 2025. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

2) Movements in present value of the defined benefit obligations

The movements in present value of defined benefit obligations for the Company were as follows:

	2025	2024
Defined benefit obligation at January 1	$ 297,532	347,562
Current service costs and interest cost	5,084	5,676
Remeasurements loss (gain):
—Actuarial loss (gain) arising from :
—Experience adjustment	17,469	(3,784)
—Financial assumptions	2,087	(2,268)
Contributions paid by the employer	(10,023)	(16,778)
Benefits paid	(26,869)	(32,876)
Defined benefit obligations at December 31	$ 285,280	297,532

3) Movements of defined benefit plan assets

The movements in the present value of the defined benefit plan assets for the Company were as follows:

	2025	2024
Fair value of plan assets at January 1	$ (260,695)	(260,907)
Interest income	(3,513)	(3,135)
Remeasurements of defined benefit liabilities (assets):
—Return on plan assets excluding interest income	(19,278)	(23,632)
Contribution paid by employer	(5,728)	(5,897)
Benefits paid	26,869	32,876
Fair value of plan assets at December 31	$ (262,345)	(260,695)

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss for the Company were as follows:

	2025	2024
Current service costs	$ 1,163	1,495
Net interest of net liabilities for defined benefit obligations	408	1,046
	$ 1,571	2,541
	2025	2024
Operating cost	$ 1,184	1,792
Selling expenses	17	37
Administration expenses	365	701
Research and development expenses	5	11
	$ 1,571	2,541

5) Remeasurements of net defined benefit liability (asset) recognized in other comprehensive income

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

	2025	2024
Accumulated amount at January 1	$ 80,975	110,933
Recognized during the period	(8,140)	(29,958)
Accumulated amount at December 31	$ 72,835	80,975

6) Actuarial assumptions

The principal actuarial assumptions at the reporting date were as follows:

	2025	2024
Discount rate	1.25 %	1.38 %
Future salary increase rate	2.25 %	2.25 %

The expected allocation payment to be made by the Company to the defined benefit plans for the one-year period after the reporting date for 2025 is $5,720 thousand.

The weighted-average lifetime of the defined benefits plans for the year ended December 31, 2025 is 5.9 years.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

7) Sensitivity analysis

When calculating and determining the present value of defined benefit obligations, the Company must use judgments and estimates to determine relevant actuarial assumptions on the balance sheet date, including discount rates, employee turnover rates, and future salary adjustments. Any change in actuarial assumptions may materially affect the amounts of the Company’s defined benefit obligations.

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligation at December 31, 2025 and 2024 shall be as follows:

	Impact on defined benefit obligation
	Increased 0.25%	Decreased 0.25%
December 31, 2025
Discount rate	(4,148)	4,256
Future salary increasing rate	4,141	(4,057)
December 31, 2024
Discount rate	(4,450)	4,566
Future salary increasing rate	4,446	(4,355)

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2025 and 2024.

(ii) Defined contribution plans

The Company allocates 6% of each employee’s monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Company allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $12,981 thousand and $13,101 thousand for the years ended December 31, 2025 and 2024, respectively.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(p) Income tax

(i) Income tax expense

The components of income tax (benefits) expenses in the years 2025 and 2024 were as follows:

	2025	2024
Current period	$ (7,215)	2,111
Deferred tax expense	(11,519)	983
Tax (benefits) expense	$ (18,734)	3,094

Reconciliation of income tax (benefits) expense and profit (loss) before tax for 2025 and 2024 is as follows:

	2025	2024
Profit (loss) excluding income tax	$ (294,283)	170,028
Income tax using the Company’s domestic tax rate	(58,856)	34,006
Tax-exempt income	30,902	(30,464)
Non-deductible expenses	933	788
Current-year losses for which no deferred tax asset was recognized	18,053	3,856
Change in unrecognized temporary differences	(2,551)	(7,204)
Change in provision in prior periods	(9,769)	-
Additional tax on undistributed earnings	2,554	2,112
Total	$ (18,734)	3,094

(ii) Deferred tax assets and liabilities

1) Unrecognized deferred tax assets

Deferred tax assets have not been recognized in respect of the following items:

	December 31, 2025	December 31, 2024
Tax effect of deductible Temporary Differences	$ 380,142	382,693
The carryforward of unused tax losses	35,894	35,894
Total	$ 416,036	418,587

The deductible temporary differences are mainly the share of overseas investment losses and deferred benefits recognized by the equity method.

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is less than more likely that future taxable profit will be available against which the Company can utilize the benefits therefrom.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

As of December 31, 2025, the information of the Company's unused tax losses for which no deferred tax assets were recognized are as follows:

Year of loss	Unused tax loss	Expiry date
2018 (Assessed amount)	$ 52,882	2028
2019 (Assessed amount)	99,314	2029
2022 (Declared amount)	27,272	2032
Total	$ 179,468

2) Recognized deferred tax assets and liabilities

Deferred tax assets:

	Unrealized loss on inventory write-downs	Others	Total
Balance at January 1, 2025	$ 10,298	(4,174)	6,124
Recognized in profit or loss	1,576	2,861	4,437
Balance at December 31, 2025	$ 11,874	(1,313)	10,561
Balance at January 1, 2024	$ 12,888	2,488	15,376
Recognized in profit or loss	(2,590)	(6,662)	(9,252)
Balance at December 31, 2024	$ 10,298	(4,174)	6,124

Deferred tax liabilities:

	Reserve for land value increment tax	Difference in the useful life of property, plant, and equipment	Total
Balance at January 1, 2025	$ 319,017	97,792	416,809
Recognized in profit or loss	-	(7,083)	(7,083)
Balance at December 31, 2025	$ 319,017	90,709	409,726
Balance at January 1, 2024	$ 319,017	106,061	425,078
Recognized in profit or loss	-	(8,269)	(8,269)
Balance at December 31, 2024	$ 319,017	97,792	416,809

(iii) Assessment of tax:

The Company's tax returns for the years through 2023 were assessed by the Taipei National Tax Administration.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(q) Capital and other equity

As of December 31, 2025 and 2024, the number of authorized ordinary shares were 4,000,000 thousand shares with par value of $10 per share, and 227,228 thousand ordinary shares were issued. All issued shares were paid up upon issuance.

(i) Capital surplus

The balances of capital surplus were as follows:

	December 31, 2025	December 31, 2024
Share premium	$ 680	680
Treasury share transactions	7,112	7,112
Adjustments of capital surplus for company's cash dividends received by subsidiaries	16,226	13,740
Total	$ 24,018	21,532

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

(ii) Retained earnings

The Company's Articles of Incorporation stipulate that Company's net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, unless the amount of the legal reserve is already equal to or greater than the total paid-in capital. Additionally, the Company shall allocate special reserve taking into consideration the operating needs and statutory requirements. Any remaining profit, together with any prior-period undistributed retained earnings, shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders' meeting for approval.

In accordance with the Company's dividend policy, if there is profitability for the year, dividends can be distributed in three forms—cash dividend, common stock dividend, or capital surplus transferred to common stock. Distribution shall not be less than 20 percent of the income after deducting legal reserve and special reserve, and only when the Company has significant investment plan or intends to improve financial structure can common stock dividends or capital surplus transferred to common stock substitute for cash dividend. However, cash dividends shall account for at least 10 percent of dividend distribution.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

1) Legal reserve

When a company incurs no loss, it may, pursuant to a resolution by a shareholders’ meeting, distribute its legal reserve by issuing new shares or by distributing cash, and only the portion of legal reserve which exceeds 25% of capital may be distributed.

2) Special reserve

The Company chose to apply the exemption under IFRS 1 at its initial adoption of IFRS Accounting Standards. Any unrealized revaluation surplus, accumulated translation adjustment, and increasing amount incurred from adopting the fair value as cost for the assets classified as investment property at the transition date, are classified to retained earnings at the amount of $2,992,372 thousand. The Company shall allocate the same amount in special reserve in accordance with the requirements issued by the Financial Supervisory Commission. When there is any subsequent use, disposal, or reclassification of the relevant assets, the Company may reverse and proportionately appropriate the earnings distribution originally allocated to special reserve. The amounts of special reserve as of December 31, 2025 and 2024, were $2,978,245 thousand, respectively.

In accordance with the requirements issued by the FSC, a portion of earnings shall be allocated as special reserve during earnings distribution. If the Company has already reclassified a portion of earnings to special reserve under the preceding subparagraph, it shall make supplemental allocation of special reserve for any difference between the amount it has already allocated and the amount of the current-period total net reduction of other shareholders’ equity. An equivalent amount of special reserve shall be allocated from the after-tax net profit in the period, plus items other than after-tax net profit in the period, that are included in the undistributed current-period earnings and the undistributed prior-period earnings. A portion of undistributed prior-period earnings shall be reclassified to special earnings reserve (and does not qualify for earnings distribution) to account for cumulative changes to the net reduction of other shareholders’ equity pertaining to prior periods. Amounts of subsequent reversals pertaining to the net reduction of other shareholders’ equity shall qualify for additional distributions.

3) Earnings distribution

The amounts of cash dividends on the 2024 and 2023 earnings distribution had been approved during the board meeting on March 7, 2025 and March 8, 2024, as well as the shareholders’ meeting on June 4, 2025 and May 31, 2024, respectively. The relevant dividend distributions to shareholders were as follows:

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	2024		2023
	Amount per share	Amount	Amount per share	Amount
Dividends distributed to ordinary shareholders:
Cash	$ 0.38	86,347	$ 0.40	90,891

(iii) Treasury shares

As of December 31, 2025, and 2024, the company's treasury stock balance were $36,189 thousand. Before the amendment to the R.O.C. Company Act on November 2001, the Company's subsidiaries, Chang Xin Co., Ltd. and Hong Da Investment Co., Ltd., acquired 2,939 thousand and 3,604 thousand of the Company's shares, respectively.

In accordance with the requirements of the Securities and Exchange Act, treasury shares held by the Company shall not be pledged, and no shareholder rights are granted before their transfer.

(r) Earnings per share

(i) Basic earnings per share

The details on the calculation of basic earnings per share and diluted earnings per share of the Company as follows:

	2025	2024
Basic earnings per share
Profit (loss) of the Company for the year	$ (275,549)	166,934
Weighted average number of ordinary shares (thousand share)	220,686	220,686
Basic earnings per share (NT dollars)	$ (1.25)	0.76
Diluted earnings per share
Profit (loss) of the Company for the year	$ (275,549)	166,934
Weighted average number of ordinary shares (thousand share)	220,686	220,686
Effect of dilutive potential ordinary shares
Effect of employee share bonus	-	111
Weighted average number of ordinary shares (diluted) (thousand share)	220,686	220,797
Diluted earnings per share (NT dollars)	$ (1.25)	0.76

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(s) Revenue from contracts with customers

(i) Details of revenue

	2025	2024
Primary geographical markets
Taiwan	$ 1,491,962	1,642,843
India	702,350	1,057,229
USA	284,168	313,096
China	85,038	101,276
Japan	156,089	347,838
Vietnam	24,919	251,471
Other country	256,818	296,766
	$ 3,001,344	4,010,519
Main product/service line
Plastic material	$ 1,282,958	2,234,934
Plastic product	1,718,386	1,775,585
	$ 3,001,344	4,010,519

(ii) Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Notes and trade receivables	$ 384,347	576,575	565,248
Less: allowance for impairment	(3,248)	(3,123)	(3,204)
Total	$ 381,099	573,452	562,044
Contract liabilities (presented as other current liabilities)	$ 4,268	3,467	5,558

For details on trade receivables and allowance for impairment, please refer to note 6(d).

Contract liabilities mainly arose from advance receipt of loans from customers and payments for real estate. The Company will record revenue when the product is delivered to the customer or when the property is completed and the ownership is transferred.

The amount of revenue recognized for the years ended December 31, 2025 and 2024, that was included in the contract liability balance at the beginning of the period were $2,493 thousand and $4,617 thousand, respectively.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(t) Employee compensation and directors' remuneration

On June 4, 2025, the Company resolved at the shareholders’ meeting to amend its Articles of Incorporation. According to the amended Articles, if the Company has profit in a given fiscal year, the profit shall be used to offset against any accumulated losses incurred by the Company. The remainder, if any, 1% shall be allocated as employee remuneration (including a minimum of 40% to those base-level employees) and a maximum of 2% as remunerations for directors and supervisors. The recipients of the aforementioned employee remuneration, whether in the form of shares or cash, may include employees of the subsidiaries who meet certain specific requirements. Prior to the amendment, the Articles of Incorporation stipulated that, if the Company has profit in a given fiscal year, the profit shall be used to offset against any accumulated losses incurred by the Company. The remainder, if any, 1% should be allocated as employee remuneration and no more than 2% as remunerations for directors and supervisors. The recipients of the aforementioned employee remuneration, whether in the form of shares or cash, could include employees of the subsidiaries who met certain specific requirements.

For the years ended December 31, 2024, the Company estimated its employee remuneration amounting to $2,980 thousand, and directors' remuneration amounting to $2,279 thousand. The estimated amounts mentioned above are calculated based on the net profit before tax, excluding the remuneration to employees and directors of each period, multiplied by the percentage of remuneration to employees and directors as specified in the Company's articles. These remunerations were expensed under operating costs or operating expenses during 2025 and 2024. Because the company had accumulated deficits in 2025, there was no need to estimate the remuneration of employees and directors. Relevant information can be found on the website of the Market Observation Post System for inquiry. The amounts, as stated in the consolidated financial statements, are identical to those of the actual distributions for 2025 and 2024.

(u) Non-operating income and expenses

(i) Interest income

The details of interest income were as follows:

	2025	2024
Interest income from bank deposits	$ 3,218	8,717

(ii) Other income

The details of other income were as follows:

	2025	2024
Rent income	$ 12,247	12,061
Dividend income	9,648	35,453
Other income, Others	13,855	37,845
	$ 35,750	85,359

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(iii) Other gains and losses

The details of other gains and losses were as follows:

	2025	2024
Loss on disposal of property, plant and equipment	$ -	(43)
Profit from lease modification	45	-
Foreign exchange (losses) gains	(27,074)	41,854
Gains (Losses) on financial assets at fair value through profit or loss	(48,882)	66,255
Miscellaneous disbursements	(293)	(124)
	$ (76,204)	107,942

(iv) Financial costs

The details of financial costs were as follows:

	2025	2024
Interest expense	$ 18,869	19,596

(v) Financial instruments

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets except for cash and cash equivalents, represents the maximum amount exposed to credit risk. As of December 31, 2025 and 2024, the maximum amount exposed to credit risk were $533,927 thousand and $775,162 thousand, respectively.

2) Concentration of credit risk

The sales of the Company are not significantly concentrated within a few customers. As of December 31, 2025 and 2024, the balance of accounts receivable due from the 10 largest customers were 31% and 44%.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting agreements.

	Carrying amount	Contractual cash flows	Within 6 months	6-12 months	1-2 years	2-5 years	Over 5 years
December 31, 2025
Non-derivative financial liabilities
Short-term bank loans	$ 500,000	501,339	501,339	-	-	-	-
Long-term bank loans	500,000	523,890	4,537	4,613	9,150	505,590	-
Notes and trade payables	236,591	236,591	236,591	-	-	-	-
Other payables (including related parties)	169,156	169,156	169,156	-	-	-	-
Lease liabilities	49,111	50,141	12,128	12,128	13,285	12,600	-
	$ 1,454,858	1,481,117	923,751	16,741	22,435	518,190	-
December 31, 2024
Non-derivative financial liabilities
Short-term bank loans	$ 460,000	460,925	460,925	-	-	-	-
Long-term bank loans	600,000	618,983	5,385	5,475	608,123	-	-
Notes and trade payables	340,754	340,754	340,754	-	-	-	-
Other payables (including related parties)	201,960	201,960	201,960	-	-	-	-
Lease liabilities	66,455	67,997	11,928	11,928	29,341	14,800	-
	$ 1,669,169	1,690,619	1,020,952	17,403	637,464	14,800	-

The Company does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Currency risk

1) Exposure to foreign currency risk

The Company’s significant exposure to foreign currency risk were as follows:

	December 31, 2025			December 31, 2024
	Local currency	Exchange rate	TWD	Local currency	Exchange rate	TWD
Financial assets:
Monetary items
USD	$ 12,864	31.43	404,316	21,368	32.79	700,657
JPY	8,819	0.20	1,771	-	-	-
Financial liabilities
Monetary items
USD	93	31.43	2,923	376	32.79	12,329

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

2) Sensitivity analysis

The Company’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables, and trade and other payables that are denominated in foreign currency.

A strengthening (weakening) of 1% of the TWD against the USD as of December 31, 2025 and 2024, would have increased (decreased) the net profit after tax by $3,211 thousand and $5,507 thousand, respectively. This analysis is based on foreign currency exchange rate variances that the Company considered to be reasonably possible at the reporting date. The analysis assumes that all other variables remain constant and ignores any impact of forecasted sales and purchases. The analysis is performed on the same basis for 2025 and 2024.

3) Foreign exchange gain and loss on monetary items

Since the Company has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For years 2025 and 2024, foreign exchange gain (loss) (including realized and unrealized portions) amounted to $(27,074) thousand and $41,854 thousand, respectively.

(iv) Interest rate analysis

Please refer to the notes on liquidity risk management and interest rate exposure of the Company’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding throughout the year. The rate of change is expressed as the interest rate increases or decreases by 0.25% when reporting to management internally, which also represents the Company management's assessment of the reasonably possible interest rate change.

If the interest rate had increased / decreased by 0.25%, the Company’s net income would have increased / decreased by $1,000 thousand and $1,200 thousand for the year ended December 31, 2025 and 2024 with all other variable factors remaining constant, respectively.

(v) Other market price risk

For the years ended December 31, 2025 and 2024, the sensitivity analyses for the changes in the securities price at the reporting date were performed using the same basis for the profit and loss as illustrated below:

	2025		2024
Price of securities at the reporting date	Other comprehensive income before tax	Net income	Other comprehensive income before tax	Net income
Increasing 1%	$ 3,906	1,528	4,057	2,017
Decreasing 1%	$ (3,906)	(1,528)	(4,057)	(2,017)

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(vi) Fair value of financial instruments

1) Fair value hierarchy

The carrying amount and fair value of the Company’s financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, and lease liabilities, disclosure of fair value information is not required:

	December 31, 2025
	Book Value	Fair Value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Mandatorily measured at fair value through profit or loss–current	$ 152,828	152,828	-	-	152,828
Financial assets at fair value through other comprehensive income
Fair value through other comprehensive income equity instrument	390,605	-	-	390,605	390,605
Total	$ 543,433	152,828	-	390,605	543,433
	December 31, 2024
	Book Value	Fair Value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss
Mandatorily measured at fair value through profit or loss–current	$ 201,710	201,710	-	-	201,710
Financial assets at fair value through other comprehensive income
Fair value through other comprehensive income equity instrument	405,658	-	-	405,658	405,658
Total	$ 607,368	201,710	-	405,658	607,368

2) Valuation techniques for financial instruments measured at fair value

If quoted prices of financial instruments are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and the prices represent actual and regularly occurring market transactions on an arm’s length basis, then the financial instrument is regarded as quoted in an active market.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

If the condition above is not met, the market is inactive. If the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide.

If the financial instruments held by the Company are in active market, its fair value hierarchy and nature are as follows:

The stock of listed companies and domestic open end funds are financial instruments in active market, and the fair value thereof is decided by the market.

Measurements of fair value of financial instruments without an active market are based on a valuation technique or quoted price from a competitor. Fair value measured by a valuation technique can be extrapolated from similar financial instruments, the discounted cash flow method, or other valuation technique including a model using observable market data at the reporting date.

If the financial instruments held by the Company are in no active market, its fair value category and nature are as follows:

Unquoted equity instruments: except acquiring the latest transaction price as fair value, others adopt market approach of comparable business. This method mainly assumes price-book of investees, enterprise value, income after tax, and the stock price of comparable listed company to calculate price-book ratio, enterprise value ratio, and earnings per share as a measure basis. This estimated fair value is already adjusted for the lack of liquidity.

3) Transfer between level 1 and level 3

There was no transfer between the fair value hierarchy levels for the years ended December 31, 2025 and 2024.

4) Reconciliation of Level 3 fair values

	Fair value through other comprehensive income
	Unquoted equity instruments
Opening balance, January 1, 2025	$ 405,658
Total gains and losses recognized:
In other comprehensive income	(15,053)
Ending Balance, December 31, 2025	$ 390,605
Opening balance, January 1, 2024	$ 665,396
Total gains and losses recognized
In other comprehensive income	(259,738)
Ending Balance, December 31, 2024	$ 405,658
	(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

For the years ended December 31, 2025 and 2024, total gains and losses that were included in “other gains and losses” and “unrealized gains and losses from financial assets at fair value through other comprehensive income” were as follows:

	2025	2024
Total gains and losses recognized
In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	(15,053)	(259,738)

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

Most of the fair value of the Company classified as level 3 is an equity instrument in no active market which has multiple significant unobservable inputs. Because the inputs are mutual independent, there is no relevance.

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through other comprehensive income equity investments without an active market	Comparable company analysis	P/E ratio (21.08 and 24.97 on December 31, 2025 and 2024, respectively)	The estimated fair value would increase (decrease) if:
		· The P/E ratio and control premium were higher (lower);
		· Lack-of-Marketability Discount (20.56%–24.65% and 16.55%–23.36% on December 31, 2025 and 2024 respectively)	· Lack-of-Marketability Discount were lower (higher);
		· P/B ratio (0.83–2.29 and 0.75–2.30 on December 31, 2025 and 2024, respectively)	· The P/B ratio and control premium were higher (lower).

6) Fair value measurements in Level 3-sensitivity analysis of reasonably possible alternative assumptions.

The method to derive at the fair value of financial instruments is reasonable but could yield different outcomes when using different multipliers. For fair value measurements in Level 3, changing one or more of the assumptions to reflect reasonably possibilities of alternative assumptions would have the following effects:

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	Inputs	Variation	Other comprehensive income
			Favourable	Unfavourable
December 31, 2025
Financial assets at fair value through other comprehensive income
Equity investments without an active market	P/E ratio	1%	287	(287)
	Discount rate	1%	597	(597)
	P/B ratio	1%	3,831	(3,831)
December 31, 2024
Financial assets at fair value through other comprehensive income
Equity investments without an active market	P/E ratio	1%	238	(238)
	Discount rate	1%	576	(576)
	P/B ratio	1%	3,997	(3,997)

The favorable and unfavorable effects represent the changes in fair value, and fair value is based on a variety of unobservable inputs calculated using a valuation technique. The analysis above only reflects the effects of changes in a single input, and it does not include the interrelationships with another input.

(w) Financial risk management

(i) Overview

The Company have exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

This note expresses the risk exposure information of the above-mentioned risk of the Company, and the Company's objectives, policies and processes for measuring and managing the risks. For more disclosures about the quantitative effects, please refer to the respective notes in the consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework.

The Company's risk management policies are established to identify and analyze the risks faced by the Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company's activities. The Company, through its training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(iii) Credit risk

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

1) Trade and other receivables

The Company's credit risk exposure is mainly affected by individual customer’s conditions. However, management also takes into consideration the statistical data of the Company’s customer, including the default risk of the customer’s industry and country, as these factors may affect credit risk.

The accounting Department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company’s standard payment and delivery terms and conditions are offered. The Company’s review includes external ratings, when available, and, in some cases, bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the Risk Management Committee; these limits are reviewed quarterly. Customers that fail to meet the Company’s benchmark creditworthiness may transact with the Company on a prepayment basis or by providing collateral.

The Company has set up allowances for bad debt accounts to reflect estimates of losses incurred in accounts receivable, other receivables and investments. The main components of the allowance account include specific loss components related to individual major risk insurance and combined loss components established for similar asset groups that have occurred but have not been identified. The combined loss allowance account is determined based on historical payment statistics of similar financial assets.

2) Investments

The exposure to credit risk for the bank deposits and other financial instruments is measured and monitored by the Company’s finance department. The Company only deals with banks, other external parties, corporate organizations, government agencies and financial institutions with good credit rating. The Company does not expect any counterparty above fails to meet its obligations hence there is no significant credit risk arising from these counterparties.

3) Endorsements and guarantees

The Company’s policy states that providing financial guarantees is only between parent company and subsidiaries. As of December 31, 2025 and 2024, the Company did not provide any guarantees or endorsements.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(iv) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation.

Generally, the Company ensures that it has sufficient cash to support expected operating expenditure in a short term, including financial liabilities, but excludes potential impact which can not be predicted reasonably such as nature disasters. Moreover, as of December 31, 2025 and 2024, the Company’s unused credit line respectively were $2,350,000 thousand and $2,190,000 thousand.

(v) Market risk

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

1) Currency risk

The Company is exposed to currency risk on sales, purchases, and borrowings that are denominated in a currency other than the respective functional currencies of the Company’s entities. The functional currency of group is mainly TWD, and the currencies used in these transactions are the TWD, USD and JPY.

2) Interest rate risk

The Company’s interest risk arose from short-term and long-term borrowings. Since the short-term borrowings are at floating rate, the fluctuation in interest rates will lead to movements in future cash flows.

3) Other market price risk

The Company is exposed to equity price risk due to the investments in stocks listed on domestic markets, and fund investment on domestic and foreign markets. The equity investment is a strategic investment and is not held for trading. The Company does not actively trade in these investments as the management of the Company manages the risk by holding different investment portfolios. The Company assigned a specific team to supervise the equity price risk, so as to avoid or minimize the risk from the hedging position.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(x) Capital management

The Board of Directors aims to keep a stable capital base to maintain the confidence of investors, creditors and the market, so as to support the development of future operations. Capital includes the share capital, capital reserve, retained earnings and non controlling interests of the Company. The Board of Directors controls the return on capital and at the same time controls the level of ordinary stock dividends.

The Company and other entities in the same industry use the debt-to-equity ratio to manage capital. This ratio is the total net debt divided by the total capital. The net debt from the balance sheet is derived from the total liabilities less cash and cash equivalents. The total capital and equity include share capital, capital surplus, retained earnings, and other equity plus net debt.

As of December 31, 2025 and 2024, the Company’s debt-to-equity ratio at the end of the reporting period, were as follows:

	December 31, 2025	December 31, 2024
Total liabilities	$ 1,906,248	2,150,637
Less: cash and cash equivalents	(204,003)	(266,781)
Net debt	$ 1,702,245	1,883,856
Total equity	$ 5,691,881	6,063,056
Debt-to-equity ratio at December 31	29.91 %	31.07 %

Management believes that there were no changes in the Company’s approach to capital management for the years ended December 31, 2025 and 2024.

(y) Investing and financing activities not affecting current cash flow

The Company’s investing and financing activities which did not affect the current cash flow in the years ended December 31, 2025 and 2024, were as follows:

(i) For right-of-use asset under lease, please refer to notes 6(h).

(ii) Reconciliation of liabilities arising from financing activities were as follows:

	Non-cash changes
	January 1, 2025	Cash flows	Acquisition	Foreign exchange movement	Changes in lease payments	December 31, 2025
Long-term borrowings	$ 600,000	(100,000)	-	-	-	500,000
Short-term borrowings	460,000	40,000	-	-	-	500,000
Lease liabilities	66,455	(23,090)	11,583	-	(5,837)	49,111
Total liabilities from financing activities	$ 1,126,455	(83,090)	11,583	-	(5,837)	1,049,111

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

	January 1, 2024	Cash flows	Acquisition	Non-cash changes		December 31, 2024
				Foreign exchange movement	Changes in lease payments
Long-term borrowings	$ 922,329	(322,329)	-	-	-	600,000
Short-term borrowings	200,000	260,000	-	-	-	460,000
Lease liabilities	53,969	(23,228)	35,714	-	-	66,455
Total liabilities from financing activities	$ 1,176,298	(85,557)	35,714	-	-	1,126,455

(7) Related-party transactions:

(a) Names and relationship with related parties

Name of related party

Fine Environment Technologies Co., Ltd
Chang Xin Co., Ltd
Hong Da Investment Co., Ltd.
Fermat Enterprises Ltd.
Ocean Group Ltd.
Sage Holdings Ltd.
OPC Holdings Ltd.
Rise Future International Ltd.
Shen Yang Development Co., Ltd.
Ocean Plastics (Hui Zhou) Co., Ltd.
Ocean Plastics (Dong Guan) Co., Ltd
Chun Pin Enterprise Co., Ltd.
Foremost-Oceans NueTeq, Ltd.
Chin Yi Ho Hang, Ltd.
Yee Fong Chemical & Industrial Co., Ltd.

Relationship with the Company

The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
The Company's subsidiary
An associate
An associate
Same chairman as the Company
The director of this company is the president of the Company

(b) Significant transactions with related parties

(i) Operating revenues

The amounts of significant sales by the Company from related parties were as follows:

Subsidiaries	2025	2024
	$ 70,901	51,400

The terms and prices charged for sales to subsidiaries approximated the market price. The credit terms ranged from 30 to 60 days. Amounts receivable from related parties was uncollateralized, and no expected credit loss were required after the assessment by the management.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(ii) Purchase

The amounts of significant purchases by the Company from related parties were as follows:

	2025	2024
Subsidiaries	$ 733	-

The terms and pricing of purchase transactions with related parties were not significantly different from those offered by other vendors. The payment terms is 30 days, which was no different from the payment terms given by other vendors.

(iii) Receivables from related parties

The amounts of trade receivables from related parties were as follows:

Account	Relationship	December 31, 2025	December 31, 2024
Trade receivables	Subsidiaries	$ 41,064	31,331

The trade receivables from related parties over the credit terms should be recorded under other receivables to related parties and long-term accounts receivables due from related parties.

(iv) Other transactions with related parties

Account	Relationship	2025	2024
Cost of goods sold	Associates	$ -	18,551

The Company commissioned its associate to operate oil storage tanks. The outstanding balances of management expenses on December 31, 2025 and 2024, were both $1,440 thousand, which are presented as "other payables to related parties".

(v) Loans to related parties

	December 31, 2025	December 31, 2024
Ocean Plastics (Dong Guan) Co., Ltd.	$ 137,573	146,322

The Company loans to Ocean Plastics (Dong Guan) Co., Ltd., because the trade receivable s from related parties are overdue, that it should be regarded as loans, and the amount was recorded under other receivable to related parties.

(vi) Leases

In January 2019, the Company leased an high-pressure spherical tank from its associate. A six year lease contract was entered into, and the rent was determined based on the rental rates in the vicinity. The total value of the contract was $52,800 thousand, the Company entered into a lease agreement with the associate to continue leasing spherical tanks that amounted to $148,102 thousand. For 2025 and 2024, the interest expenses were $339 thousand and $517 thousand. As of December 31, 2025 and 2024, the lease liabilities had amounted to $21,769 thousand and $37,887 thousand.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

In January 2024, the Company leased from other related parties an office building as its headquarter on Juguang Road, Taipei City, and the land in Zhongli Dist., Taoyuan City. A five year lease contract was signed, and the rent was determined based on land rental rates in the vicinity. The total value of the contract was $37,000 thousand. For 2025 and 2024, interest expenses were $427 thousand and $254 thousand. As of December 31, 2025 and 2024, lease liabilities had amounted $21,595 thousand and $28,568 thousand.

Key management personnel compensation comprised:

	2025	2024
Short-term employee benefits	$ 9,430	10,009

(8) Pledged assets:

The carrying values of pledged assets were as follows:

Pledged assets	Object	December 31, 2025	December 31, 2024
Property, plant and equipment	Long-term and short-term loans	$ 2,260,506	2,284,611
Investment property	Long-term and short-term loans	357,205	357,205
Other financial assets	Performance Bond	314	-
Total		$ 2,618,025	2,641,816

(9) Significant Commitments and Contingencies:

(a) Significant unrecognized contractual commitments were as follows:

(i) The Company's unrecognized contractual commitments are as follows:

	December 31, 2025	December 31, 2024
Acquisition of property, plant and equipment	$ 23,782	52,627

(ii) The Company's outstanding standby letter of credit:

	December 31, 2025	December 31, 2024
Outstanding standby letter of credit	$ 314	-

(iii) The joint construction contract signed by the Company for the sale of the built real estate is as follows:

Joint - construction method	The name of the project
Co-built sub-housing	Wenshan District Xinglong Section

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

On May 10, 2024, the Company’s Board of Directors resolved to intend to sign a joint construction contract with an unrelated party for the urban renewal project of Land serial no.300, Section 3, Xinglong Section, Wenshan District, Taipei City. The land area is approximately 1,313 square meters, and the shareholding is 50%. Relevant information can be found on the Market Observation Post System.

(iv) The Company provides endorsement guarantees to subsidiaries for borrowings and operational requirements as follows: None.

(b) Major contingent liabilities: None.

(10) Losses due to major disasters: None.

(11) Subsequent Events: None.

(12) Others:

(a) A summary of current-period employee benefits, depreciation, and amortization, by function, is as follows:

| By function
By item | 2025 | | | 2024 | | |
| --- | --- | --- | --- | --- | --- | --- |
| | Cost of Sale | Operating Expense | Total | Cost of Sale | Operating Expense | Total |
| Employee benefits | | | | | | |
| Salary | 249,672 | 74,150 | 323,822 | 256,638 | 77,886 | 334,524 |
| Labor and health insurance | 28,024 | 7,555 | 35,579 | 27,991 | 7,607 | 35,598 |
| Pension | 10,844 | 3,708 | 14,552 | 11,513 | 4,129 | 15,642 |
| Director’s remuneration | - | 6,889 | 6,889 | - | 9,041 | 9,041 |
| Others | 14,793 | 4,322 | 19,115 | 15,049 | 3,830 | 18,879 |
| Depreciation | 215,995 | 7,969 | 223,964 | 206,165 | 8,303 | 214,468 |
| Amortization | - | - | - | - | - | - |

For the years ended December 31, 2025 and 2024, additional information of number of employee and employee benefits were as follows:

	2025	2024
Number of employees	447	455
Number of directors who were not employees	8	8
The average employee benefit	$ 895	905
The average salaries and wages	$ 738	748
Rate of change of the average salaries and wages	(1.44)%	(1.03)%
Salaries of supervisor	$ -	-

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

The Company’s compensation policy (including directors, managers, and employees) is as follows:

Directors’ compensation include compensation, salaries and fees. The compensation policy in Articles of Incorporation was determined based on operating condition. It was reported to the Compensation Committee, being approved in Board of Directors and being notified to shareholders. The fares for directors were determined in Board of Directors and should be paid regardless of its profit. The ones for the directors who double as employees would be determined in Board of Directors based on the peer industry standards.

In the compensation policy for the Company’s managers and employees, besides their education and experience, it should also consider the operating profit and prospects. The distribution standards depend on production achievement rate, yield rate and net operating profit of the month. Year- end bonus is based on the year profit and varies on each department which means the compensation system is related to the performance of the Company.

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(13) Other disclosures:

(a) Information on significant transactions:

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Company:

(i) Loans to other parties:

(In Thousands of New Taiwan Dollars)

Number	Name of lender	Name of borrower	Account name	Related party	Highest balance of financing to other parties during the period (Note 6)	Ending balance (Note 7)	Actual usage amount during the period	Range of interest rates during the period	Purposes of fund financing for the borrower (Note 2)	Transaction amount for business between two parties	Reasons for short-term financing	Allowance for bad debt	Collateral		Individual funding loan limits (Note 3)	Maximum limit of fund financing (Note 2)
													Item	Value
0	The Company	Doom Plastics (Dong Guan) Co., Ltd.	Other receivables and long-term receivables	Yes	151,698	137,573	137,573	-	1	67,664	Operation Capital	-		-	1,138,376	2,276,752

Note 1: The numbering is as follows:
1. “0” represents the parent company.
2. Subsidiaries are sequentially numbered from 1 by company.

Note 2: Financing purposes:
- 1 represents a trading counterparty.
- 2 indicates the necessity of short-term financing.

Note 3: The total of funds and loans to others shall not exceed 40% of the net value of the Company, and the loans to an individual party shall not exceed 20% of the net value of the Company. The net value is based on the amount disclosed the latest financial statements.

Note 4: The cumulative maximum balance of loans to others from the current year to the reporting month includes the amount transferred from overdue receivables.

Note 5: The highest amounts were approved by the Board of Directors.

(ii) Guarantees and endorsements for other parties: None

(iii) Material securities held as of December 31, 2025 (excluding investment in subsidiaries, associates and joint ventures):

(In Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance			Fair value
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)
The Company	Taiwan VCM Corporation	-	Equity instruments at fair value through other comprehensive income	37,062	324,713	12.46 %	324,713
〃	Udale Technology Co., Ltd.	-	〃	630	28,068	3.38 %	28,068
〃	Pan Ocean Inc.	-	〃	152	6,890	15.07 %	6,890
〃	Ultra-Pak Industries Co., Ltd.	-	〃	2,567	30,934	7.00 %	30,934
〃	Microsoft Composite Company	-	〃	237	-	4.32 %	-
〃	Fazettec Technology Co., Ltd.	-	Financial assets mandatorily measured at fair value through profit or loss- current	2,945	152,828	7.87 %	152,828
Chang Xin Co., Ltd.	Ultra-Pak Industries Co., Ltd.	-	Equity instruments at fair value through other comprehensive income	1,487	17,921	4.06 %	17,921
〃	Cosmactive Broadband Networks Co., Ltd.	-	〃	1	-	0.12 %	-
Hong Du Investment Co., Ltd.	Acer Incorporated	-	Financial assets mandatorily measured at fair value through profit or loss- noncurrent	119	3,135	- %	3,135
〃	United Microelectronics Corporation	-	〃	29	1,425	- %	1,425
〃	Capital SZSE SME Price Index Exchange Traded Fund -TWD	-	〃	200	3,420	- %	3,420
〃	Vianna Taiwan Value High Dividend ETF	-	〃	200	1,852	- %	1,852
〃	Mega 20 plus Year US Business ETF	-	〃	320	4,406	- %	4,406
〃	Ultra-Pak Industries Co., Ltd.	-	Equity instruments at fair value through other comprehensive income	1,265	15,239	3.45 %	15,239
〃	Udale Technology Co., Ltd.	-	〃	580	25,846	3.11 %	25,846
〃	Fazettec Technology Co., Ltd.	-	Financial assets mandatorily measured at fair value through profit or loss- current	2,926	151,855	7.82 %	151,855

(Continued)

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

Name of holder	Category and name of security	Relationship with company	Account title	Ending balance
				Shares/Units (thousands)	Carrying value	Percentage of ownership (%)	Fair value
Fine Environment Technologies Co., Ltd.	MinimaTechnology Co., Ltd.		Equity instruments at fair value through other comprehensive income	413	3,184	1.04 %	3,184
〃	Microsoft Composite Company	-	〃	237	-	4.32 %	-
Fermat Enterprises Ltd.	FCP I-Global High Yield Portfolio Class AT USD	-	Financial assets mandatorily measured at fair value through profit or loss-current	143	14,073	- %	14,073
〃	AB FCP I-Global High Yield Portfolio Class AA USD	-	〃	29	6,994	- %	6,994
〃	ABITL Global High Yield Fund TA USD	-	〃	6	1,543	- %	1,543
〃	Normax All Weather Global Bond Fund	-	〃	6	1,917	- %	1,917
OPC Holding Ltd.	AB FCP I-Global High Yield Portfolio Class AA USD	-	〃	39	9,481	- %	9,481
〃	AB FCP I-Global High Yield Portfolio Class AT USD	-	〃	71	6,975	- %	6,975
〃	Normax Fallen Angel Non-Investment Grade Bond Fund	-	〃	13	3,034	- %	3,034
〃	Normax Global Financial Bond Fund Div. TWD	-	〃	12	3,033	- %	3,033
〃	Normax All Weather Global Bond Fund	-	〃	10	3,195	- %	3,195
Ocean Plastics (Hai Zhou) Co., Ltd.	BOC Wealth "Stable Growth" Institutional-only High-Rating Openended Fund	-	〃	36,772	173,479	- %	173,479
〃	ICBC - "Tantianxin Wenyield" Openended Freedincome Wealth Management Product	-	〃	15,452	70,067	- %	70,067

(iv) Related-party transactions for purchases and sales with amounts exceeding the lower of NT$100 million or 20% of the capital stock: None.

(v) Receivables from related parties with amounts exceeding the lower of NT$100 million or 20% of the capital stock:

Name of company	Name of counter-party	Nature of relationship	Ending balance	Turnover rate	Overdue		Amounts received in subsequent period	Allowance for bad debts
					Amount	Action taken
The Company	OCEAN PLASTICS(DONG GUANGCO.,LTD.	The Company invests in subsidiaries through RFIL	178,328	28.54	137,573	According to funding needs	10,826

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2025 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of investor	Name of investor	Location	Main businesses and products	Original investment amount		Balance at of December 31, 2025			Net income (losses) of investor	Share of profit/losses of investor (Note 1)	Note
				December 31, 2025	December 31, 2024	Shares (thousands)	Percentage of ownership	Carrying value
The Company	Chan Pin Enterprise Co., Ltd.	Taiwan	Warehousing industry	290,000	290,000	29,000	44.62 %	470,011	211,313	81,773	Associate
The Company	Fine Environment Technologies Co., Ltd.	Taiwan	Wholesale of plastics product	44,792	44,792	1,003	60.76 %	4,854	77	47	Subsidiary
The Company	Chang Xin Co., Ltd.	Taiwan	Real estate development	2,900,860	2,900,860	290,006	100.00 %	1,115,958	(153,904)	(153,904)	Subsidiary
The Company	Hong Du Investment Co., Ltd.	Taiwan	General investing	190,000	190,000	19,000	100.00 %	232,094	(41,033)	(41,033)	Subsidiary
The Company	Fermat Enterprises Ltd.	British Virgin Islands	Investment holding	13,887	13,887	450	100.00 %	27,384	1,192	1,192	Subsidiary
The Company	Ocean Group Ltd.	Samoa	Investment holding	1,069,438	1,069,438	22,900	100.00 %	396,856	9,477	9,477	Subsidiary
The Company	Foremost-Ocean SunTruq Ltd.	Taiwan	Wholesale of plastics product	6,050	6,050	605	40.07 %	3,131	(2,163)	(367)	Associate
Hong Du Investment Co., Ltd.	Fine Environment Technologies Co., Ltd.	Taiwan	Wholesale of plastics product	6,294	6,294	647	39.24 %	3,135	77	30	Subsidiary
Chang Xin Co., Ltd.	Shen Yang Development Co., Ltd.	Taiwan	Real estate development	535	535	1,000	100.00 %	542	4	4	Subsidiary
Ocean Group Ltd.	OPC Holdings Ltd.	British Virgin Islands	Investment holding	27,850	27,850	450	100.00 %	58,647	280	280	Subsidiary
Ocean Group Ltd.	Sage Holdings Ltd.	Samoa	Investment holding	800,217	800,217	25,000	100.00 %	663,746	33,764	33,764	Subsidiary
Ocean Group Ltd.	Rise Futures International Ltd.	Seychelles	Investment holding	241,371	241,371	7,450	100.00 %	(127,079)	(25,986)	(25,986)	Subsidiary

(Continued)

OCEAN PLASTICS CO., LTD. Notes to the Financial Statements

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars/In Thousands of USD Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital (Note 3)	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2024 (Note 1)	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2025 (Note 3)	Net income (losses) of the investee	Percentage of ownership	Investment income (losses) (Note 2)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Ocean Plastics (Hot Zloss) Co., Ltd.	Operating general soft tape, foamed latex leather and rubber leather production and sales business	412,643 (USD25,000)	(2)	412,643 (USD25,000)	-	-	412,643 (USD25,000)	33,764	100.00%	33,764	663,745	-
Ocean Plastics (Dong Guan) Co., Ltd.	Production and sales of PU synthetic leather, foamed latex leather and rubber leather	242,168 (USD7,450)	(2)	242,168 (USD7,450)	-	-	242,168 (USD7,450)	(24,565)	100.00%	(24,565)	(125,602)	-

(ii) Limitation on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2025 (Note 3)	Investment Amounts Authorized by Investment Commission, MOEA (Note 3)	Upper Limit on Investment (Note 4)
1,069,438	1,069,438	3,415,128
(USD32,900)	(USD32,900)

Note 1: Re-investment company in Mainland China established through investments of a third district.
Note 2: The investment income (loss) was based on the financial statements audited by the auditor of the Company.
Note 3: The amount of accumulated outflow of investment from Taiwan to Mainland China at the reporting date.
Note 4: The upper limit on investment, calculated based on the amendments to the Regulations Governing the Approval of Investment or Technical Cooperation in Mainland China, is $60\%$ of the net equity or consolidated net equity.

(iii) Significant transactions:

The significant inter-company transactions with the subsidiary in Mainland China, which were eliminated in the preparation of financial statements, are disclosed in "Information on significant transactions".

(14) Segment information:

Please refer to the consolidated financial statements for the year ended December 31, 2025.

OCEAN PLASTICS CO., LTD.
Statement of cash and cash equivalents
December 31, 2025
(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Petty cash		$ 550
Cash in bank	Check deposits	23,312
	Demand deposits	156,511
	Foreign demand deposits (USD 695 thousand and JPY 8,819 thousand)	23,630
	Subtotal	203,453
		$ 204,003

Note: The foreign currency exchange rates are 1 USD to 31.43 TWD and 1 JPY to 0.2008 TWD.

OCEAN PLASTICS CO., LTD.
Statement of notes and trade receivables
December 31, 2025

Client name	Description	Amount
Notes receivable
Non-related-parties
Company C	Sales	$ 5,679
Company K	〃	3,112
Company J	〃	3,102
Company L	〃	2,755
Company V	〃	1,608
Company U	〃	1,318
Others (individual amounts with less than 5% of the total amount)	〃	4,895
Less: Allowance for doubtful accounts		-
Subtotal		22,469
Trade receivables
Non-related-parties
Company P	〃	32,847
Company AB	〃	21,860
Company B	〃	21,272
Company R	〃	21,208
Company T	〃	20,951
Company S	〃	17,034
Others (individual amounts with less than 5% of the total amount)	〃	185,642
Less: Allowance for doubtful accounts		(3,248)
Subtotal		317,566
Related-parties
Ocean Plastics (Dong Guan) Co., Ltd.	〃	40,755
Fine Environment Technologies Co., Ltd.	〃	309
Less: Allowance for doubtful accounts		-
Subtotal		41,064
Total		$ 381,099

OCEAN PLASTICS CO., LTD.

Statement of inventories

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

	Amount
Item	Cost	Net Realizable Value
Raw materials	$ 199,015	176,240
Work in progress	33,922	19,841
Finished goods and merchandise	178,125	155,612
Subtotal	411,062	351,693
Less: Allowance for inventory valuation and obsolescence losses	(59,369)
Total	$ 351,693

Statement of other current assets

Item	Description	Amount
Business tax refund receivable	Business tax refund	$ 3,546
Other receivables-related parties	Loans to related parties	28,373
Prepaid expense	Prepayment of miscellaneous equipment, natural gas and postage expenses	3,204
Others (individual amounts with less than 5% of the total amount)		8,275
		$ 43,398

OCEAN PLASTICS CO., LTD.

Statement of changes in investments accounted for using the equity method

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Name of investee	Beginning Balance		Increase		Decrease		Investment income/(loss) recognized under equity method,net	Exchange difference on translation	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive.	Ending Balance			Market Value or Net Assets Value
	Number of shares	Amount	Number of shares	Amount	Number of shares	Amount				Number of shares	Percentage	Amount	Unit Price	Total amount (Note 1)
Chun Pin Enterprises Co., Ltd.	29,000	$ 477,384	-	-	-	89,146	81,773	-	-	29,000	44.62 %	470,011	16.21	1,053,473
						(Note2)
Fine Environment Technologies Co., Ltd	1,003	5,416	-	-	-	-	47	-	(609)	1,003	60.76 %	4,854	4.84	7,988
Chang Xin Co., Ltd	290,086	1,274,858	-	-	-	-	(153,904)	-	(4,996)	290,086	100 %	1,115,958	8.85	2,567,466
Hong Da Investment Co., Ltd.	19,000	275,225	-	-	-	-	(41,033)	-	(2,098)	19,000	100 %	232,094	18.78	356,867
Fermat Enterprises Ltd	450	26,192	-	-	-	-	1,192	-	-	450	100 %	27,384	60.85	27,384
Ocean Group Ltd	32,900	584,528	-	-	-	-	9,477	2,851	-	32,900	100 %	596,856	18.14	596,856
Foremost-Oceans NueTeq, Ltd.	605	3,998	-	-	-	-	(867)	-	-	605	40.07 %	3,131	5.17	7,814
Total		$ 2,647,601		-		89,146	(103,315)	2,851	(7,703)			2,450,288		4,617,848

Note1: There is no open market price for these investees, so expressed in net value per share.
Note2: Distribute cash dividends.

OCEAN PLASTICS CO., LTD.

Statement of financial assets measured at fair value through other comprehensive income - non-current

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars/thousands of shares)

Client name	Beginning Balance		Increase		Decrease		Gain or loss on valuation	Ending Balance			Collateral	Accumulated impairment
	Shares or units	Fair Value	Shares or units	Amount	Shares or units	Amount		Shares or units	Percentage	Fair Value
Taiwan VCM Corporation	37,062	$ 333,905	-	-	-	-	(9,192)	37,062	12.46 %	324,713	None	N/A
E'dale Technology Co., Ltd.	630	25,306	-	-	-	-	2,762	630	3.38 %	28,068	None	N/A
PAN OCEAN, INC	152	6,890	-	-	-	-	-	152	15.07 %	6,890	None	N/A
Ultra Pak Industries Co., Ltd.	2,567	39,557	-	-	-	-	(8,623)	2,567	7.00 %	30,934	None	N/A
Microcell Composite Company	237	-	-	-	-	-	-	237	4.32 %	-	None	N/A
	$	-		-		-	(15,053)			390,605

OCEAN PLASTICS CO., LTD.

Statement of other non-current assets

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Refundable deposits	The refundable deposits of stadium membership	$ 313
Other financial assets	Performance Bond	314
Prepayments for equipment	Prepayments of machinery and equipment and other equipment	3,326
		$ 3,953

Statement of short-term borrowings

Type of loan	Description	Ending balance	Contract Period	Percentage	Loan	Collateral
Unsecured bank loans	Financial institution loans	$ 100,000	2025.1~2026.1	1.88%	350,000	None
Secured bank loan		400,000	2025.11~2026.3	1.85%		Land
		$ 500,000			700,000
					1,050,000

OCEAN PLASTICS CO., LTD.
Statement of notes payables and trade payables
December 31, 2025
(Expressed in thousands of New Taiwan Dollars)

Client name	Description	Amount
Notes payable
Non-related-parties- operating activities
Company E	Purchases	$ 3,544
Company X	"	1,388
Company Y	"	903
Company Z	"	525
Company AA	"	516
Others (individual amounts with less than 5% of the total amount)	"	1,379
Subtotal		8,255
Accounts payable
Non-related-parties- operating activities
Company D	Purchases	101,947
Company M	"	30,583
Company N	"	13,093
Others (individual amounts with less than 5% of the total amount)	"	82,713
Subtotal		228,336
Total		$ 236,591

OCEAN PLASTICS CO., LTD.

Statement of other payables

December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Description	Amount
Salaries payable and directors' remuneration	The employee benefits, year-end bonus, pension, employee compensation and directors' remuneration	$ 53,928
Accrued import and export selling expenses	Cost of shipping for sales of goods	68,368
Accrued repair and maintenance expense	Equipment maintenance expense	22,776
Others (individual amounts with less than 5% of the total amount)	Packing expense, insurance expense, environmental protection fees, health insurance expense, labor insurance expense and professional service fees	24,084
Total		$ 169,156

Statement of long-term borrowings

Creditor	Description	Borrowings amount	Contract Period	Interest rate	Collateral	Note
Yuanta Commercial Bank Co., Ltd.	collateral borrowing	$ 500,000	2025.08~2028.08, Monthly installments of interest and repayment of principal at maturity.	1.83 %	Land

OCEAN PLASTICS CO., LTD.
Statement of operating revenue
For the year ended December 31, 2025
(Expressed in thousands of New Taiwan Dollars)

Item	Quantity	Amount
Plastic raw materials	55,456 tons	$ 1,290,276
Plastic products	24,953 tons/1,073 thousand yards	1,722,795
Sales revenue		3,013,071
Less: Sales return and sales allowance		(11,727)
Net sales revenue		$ 3,001,344

OCEAN PLASTICS CO., LTD.

Statement of operating costs

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Amount
	Subtotal	Total
Raw materials at the beginning of the year	$ 170,259
Add: Net purchases	1,897,419
Less: Raw materials at the end of the year	(199,015)
Cost of material sold and others	(1,301)
Raw materials used		1,867,362
Direct labor		90,674
Manufacturing expenses		671,329
Total Manufacturing costs		2,629,365
Add: Work-in-process at the beginning of the year		37,348
Less: Work-in-process at the end of the year		(33,922)
Transferred to expenses and others		(3,282)
Cost of finished goods		2,629,509
Add: Finished goods at the beginning of the year		163,821
Less: Finished goods at the end of the year		(177,571)
Transferred to expenses and others		(8,179)
Cost of finished goods sold		2,607,580
Merchandise at the beginning of the year	467
Net purchases	29,859
Less: Merchandise at the end of the year	(554)
Transferred to manufacturing expenses	(2)
Cost of merchandise sold		29,770
Adjustment (idle capacity)	205,762
Others	2,434
Gain from price recovery of inventory	7,880
Added of cost of goods sold		216,076
Cost of goods sold		$ 2,853,426

OCEAN PLASTICS CO., LTD.

Statement of administrative expenses

For the year ended December 31, 2025

(Expressed in thousands of New Taiwan Dollars)

Item	Selling expenses	Administrative expenses	Research and development expenses	Total
Export charges	$ 93,611	-	-	93,611
Salaries expense	22,262	52,057	6,720	81,039
Freight expense	22,699	42	-	22,741
Commission expense	19,605	-	-	19,605
Miscellaneous expenses	2,460	6,198	513	9,171
Insurance expense for employee	2,247	4,591	717	7,555
Professional service fees	39	4,599	2	4,640
Depreciation	912	6,816	241	7,969
Taxes	-	6,202	-	6,202
Research and development expense	-	-	4,745	4,745
Others (individual amounts with less than 5% of the total amount)	9,699	11,277	1,916	22,892
Total	$ 173,534	91,782	14,854	280,170

Statement of Changes in Property, Plant, and Equipment: Note (6(g))

Statement of Changes in Right-of-use-assets: Note (6(h))

Statement of Changes in Investment property: Note (6(i))

Statement of Changes in Others current liabilites and other non-current liabilites: Note (6(j))

AI assistant

OPC — Audit Report / Information 2026

51776_rns_2026-05-14_3042fea4-8bb2-4e46-a981-74e7c6a7f691.pdf

OCEAN PLASTICS CO., LTD.

Table of contents

Independent Auditors’ Report

Opinion

Basis for Opinion

Other Matter

Key Audit Matters

1. Revenue recognition

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

Auditors’ Responsibilities for the Audit of the Financial Statements

Notes to Readers

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese)

OCEAN PLASTICS CO., LTD.

Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) OCEAN PLASTICS CO., LTD.

Statements of Cash Flows

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

(4) Summary of material accounting policies:

(a) Statement of compliance

(b) Basis of preparation

(i) Basis of measurement

(ii) Functional and presentation currency

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

(6) Explanation of significant accounts:

(a) Cash and cash equivalents

(b) Financial assets at fair value through profit or loss

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

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Notes to the Financial Statements

(h) Right-of-use-assets

OCEAN PLASTICS CO., LTD.

Notes to the Financial Statements

OPC Audit Report / Information 2026