English Translation of Financial Statements and a Report Originally Issued in Chinese

Ticker:8104

RITDISPLAY CORPORATION AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS
WITH INDEPENDENT AUDITORS' REPORT
AS OF DECEMBER 31, 2025 AND 2024
AND FOR THE YEARS ENDED
DECEMBER 31, 2025 AND 2024

Address: No.12, Kuangfu N. Rd., Hsinchu Industrial Park, Hukou Township, Hsinchu Country, 30351, Taiwan(R.O.C.)

Telephone: (03)598-9999

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

Consolidated Financial Statements

Index

Item	Page numbering
1. Cover sheet	1
2. Index	2
3. Management representation letter	3
4. Independent auditors’ report	4-8
5. Consolidated balance sheets	9-10
6. Consolidated statements of comprehensive incomes	11
7. Consolidated statements of changes in equity	12
8. Consolidated statements of cash flows	13
9. Footnotes to the consolidated financial statements
(1) History and organization	14
(2) Date and procedure of authorization for financial statements issuance	14
(3) Newly issued or revised standards and interpretations	14-20
(4) Summary of material accounting policies	21-51
(5) Significant accounting judgments, estimates and assumptions	51-53
(6) Contents of significant accounts	54-113
(7) Related party transactions	114-120
(8) Assets pledged as collateral	121
(9) Significant contingencies and unrecognized contract commitments	121-122
(10) Losses due to major disasters	122
(11) Significant subsequent events	123
(12) Others	123-137
(13) Additional disclosures
1. Additional disclosures required by the R.O.C. Securities and Futures Bureau	138
2. Information on investees	138-139
3. Information on investments in Mainland China	140-142
(14) Segment information	142-145

MANAGEMENT REPRESENTATION LETTER

The entities that are required to be included in the combined financial statements of RiTdisplay Corporation as of December 31, 2025 and for the year then ended under the Criteria Governing the Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises are the same as those included in the consolidated financial statements prepared in conformity with the International Financial Reporting Standard No. 10, "Consolidated Financial Statements." In addition, the information required to be disclosed in the combined financial statements is included in the consolidated financial statements. Consequently, Ritdisplay Corporation and Subsidiaries do not prepare a separate set of combined financial statements.

Very truly yours,

RiTdisplay Corporation

Yeh, Chwei-Jing

Chairman

March 10, 2026

English Translation of Financial Statements and a Report Originally Issued in Chinese

INDEPENDENT AUDITORS' REPORT

To: the Board of Directors and Shareholders of
RiTdisplay Corporation

Opinion

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

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

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of consolidated financial statements for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Revenue recognition

We determine that revenue recognition is one of the key audit matters. The Group’s revenue amounting to NT$3,559,112 thousand for the year ended December 31, 2025 is a significant account to the Group’s financial statements. The major revenues were from manufacturing and sales of OLED and assembly, manufacturing, and sale of battery packs and energy storage systems. The Group has conducted these sale activities in multi-marketplace, including Taiwan, China and America, etc. Furthermore, the timing of fulfilling performance obligation needs to be determined based on varieties of sale terms and conditions enacted in the main sale contracts or sale orders. We therefore conclude that there are significant risks with respect to the topic of revenue recognition.

Our audit procedures therefore include, but not limit to, evaluating the appropriateness of accounting policy for revenue recognition, assessing and testing the effectiveness of relevant internal controls related to revenue recognition, sampling-test of details, including obtaining major sale orders or agreements to inspect the terms and conditions, checking the consistency of the fulfillment timing, performing analytical review procedures on sale revenues, and executing sale cut-off tests for a period time before and after the balance sheet date, reviewing for subsequent sales returns and allowance etc. We have also evaluated the appropriateness of the related disclosure in Note 4 and Note 6 to the consolidated financial statements.

Market valuation on inventory

We determined the market valuation on inventory is also one of the key audit matters. The Group’s net inventory amounting to NT$343,500 thousand as of December 31, 2025, which is significant to the Group’s financial statements. The application markets of the Group’s main products, OLED, battery packs and energy storage systems, need to take into account the rapidly developing technologies and changing demand of market. The management therefore has to closely monitor the status of new products development and market demand for evaluating any significant impairment, including loss from market decline and slow movement, incurred toward inventory. Also, there was significant management involved in determining the sufficiency of inventory loss provision.

Our audit procedures therefore include, but not limit to, evaluating the appropriateness of inventory provision including how to identify the phased-out or slow-moving items, testing the correctness of inventory aging report, analyzing the reasons for slow-moving inventory, performing observation on the Group's inventory physical taking, and looking into the status of inventory utilization. We have also evaluated the appropriateness of the related disclosure in Note 5 and Note 6 to the consolidated financial statements.

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

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

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

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

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

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

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

Others

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

Chen, Kuo-Shuai

Cheng, Ching-Piao

Ernst & Young, Taiwan, R.O.C

March 10, 2026

Notice to Readers

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

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese
RiTdisplay Corporation and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2025 and December 31, 2024
(Amounts Expressed in Thousands of New Taiwan Dollars)

Assets			2025.12.31		2024.12.31
Code	Accounts	Notes	Amount	%	Amount	%
	Current assets
1100	Cash and cash equivalents	4, 6(1)	$1,318,296	16	$1,571,188	22
1110	Financial assets at fair value through profit or loss	4, 6(2)	16,289	-	23,366	-
1120	Financial assets at fair value through other comprehensive income	4, 6(3)	297,208	4	150,578	2
1136	Financial assets measured at amortized cost	4, 6(4), 8	4,178	-	31,576	1
1140	Contract assets	4, 6(20), 6(21)	5,171	-	148	-
1170	Accounts receivable, net	4, 6(5), 6(21), 7	1,040,299	12	594,483	8
1197	Financing lease payments receivable, net	4, 6(6), 6(21), 7	28,143	-	12,469	-
1200	Other receivables	7	27,145	-	75,754	1
1220	Current tax assets	4, 6(26)	4,135	-	8,270	-
130x	Inventories, net	4, 6(7)	343,500	4	472,378	7
1410	Prepayments	7	232,958	3	494,591	7
1470	Other current assets		1,349	-	1,163	-
11xx	Total current assets		3,318,671	39	3,435,964	48
	Non-current assets
1535	Financial assets measured at amortized cost	4, 6(4), 8	200,320	2	76,869	1
1600	Property, plant and equipment, net	4, 6(8), 7, 8	3,622,521	43	2,842,191	40
1755	Right-of-use assets	4, 6(22)	124,255	1	128,075	2
1760	Investment property, net	4, 6(9), 8	743,071	9	251,403	4
1780	Intangible assets, net	4, 6(10), 6(12)	262,027	3	260,693	4
1840	Deferred tax assets	4, 6(26)	27,493	-	23,830	-
1900	Other non-current assets	4, 6(11), 6(17), 7	127,867	2	70,882	1
194D	Long-term financing lease payments receivable, net	4, 6(6), 6(21), 7	46,146	1	21,956	-
15xx	Total non-current assets		5,153,700	61	3,675,899	52
1xxx	Total Assets		$8,472,371	100	$7,111,863	100

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese
RiTdisplay Corporation and Subsidiaries
Consolidated Balance Sheets (Continued)
As of December 31, 2025 and December 31, 2024
(Amounts Expressed in Thousands of New Taiwan Dollars)

Liabilities and Equity			2025.12.31		2024.12.31
Code	Accounts	Notes	Amount	%	Amount	%
	Current liabilities
2100	Short-term loans	6(13), 8	$334,426	4	$535,000	8
2120	Financial liabilities at fair value through profit or loss	4, 6(14)	-	-	39	-
2130	Contract liabilities	4, 6(20), 7	122,011	1	87,863	1
2150	Notes payable		5,428	-	584	-
2170	Accounts payable	7	418,828	5	462,015	7
2200	Other payables	7	551,969	7	986,396	14
2230	Current income tax liabilities	4, 6(26)	48,959	1	31,342	-
2280	Lease liabilities	6(22)	8,471	-	7,316	-
2300	Other current liabilities	7	4,379	-	5,970	-
2321	Current portion or enforce to sell of bonds payable	4, 6(15)	-	-	376,601	5
2322	Current portion of long-term loans	6(16), 8	245,329	3	386,771	6
21xx	Total current liabilities		1,739,800	21	2,879,897	41
	Non-current liabilities
2530	Bonds payable	4, 6(15)	81,710	1	-	-
2540	Long-term loans	6(16), 8	3,401,811	40	1,240,821	17
2570	Deferred tax liabilities	4, 6(26)	2,053	-	870	-
2580	Lease liabilities	6(22)	77,698	1	81,296	1
2670	Other non-current liabilities		39,805	-	36,589	1
25xx	Total non-current liabilities		3,603,077	42	1,359,576	19
2xxx	Total liabilities		5,342,877	63	4,239,473	60
31xx	Equity attributable to shareholders of parent
3100	Capital	6(18)
3110	Common stock		1,040,582	12	916,517	13
3200	Capital surplus	6(18)	1,586,496	19	1,379,326	20
3300	Retained earnings	6(18)
3310	Legal reserve		166,512	2	164,399	2
3320	Special reserve		11,829	-	1,351	-
3350	Unappropriated retained earnings		59,182	1	165,606	2
3400	Other components of equity		(56,004)	(1)	(11,829)	-
3500	Treasury stock	4, 6(18)	-	-	(51,486)	(1)
3600	Non-controlling interests	6(18), 6(28)	320,897	4	308,506	4
3xxx	Total equity		3,129,494	37	2,872,390	40
3x2x	Total liabilities and equity		$8,472,371	100	$7,111,863	100

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

English Translation of Consolidated Financial Statements Originally Issued in Chinese

RiTdisplay Corporation and Subsidiaries

Consolidated Statements Of Comprehensive Income

For the Years Ended December 31, 2025 and 2024

(Amounts Expressed in Thousands of New Taiwan Dollars, Except Earnings Per Share)

Code	Accounts	Notes	2025		2024
			Amount	%	Amount	%
4000	Operating revenues	4, 6(20), 7	$3,559,112	100	$2,298,512	100
5000	Operating costs	6, 7	(3,000,595)	(84)	(1,844,763)	(80)
5900	Gross profit		558,517	16	453,749	20
6000	Operating expenses	6, 7
6100	Selling		(53,980)	(2)	(64,476)	(3)
6200	General and administrative		(223,495)	(6)	(217,329)	(9)
6300	Research and development		(143,775)	(4)	(150,060)	(7)
6450	Expected credit losses (gains)	4, 6(21)	(2,053)	-	1,440	-
	Operating expenses total		(423,303)	(12)	(430,425)	(19)
6900	Operating income		135,214	4	23,324	1
7000	Non-operating income and expenses	6(24), 7
7100	Interest income		10,399	-	11,925	1
7010	Other income		28,777	1	32,378	1
7020	Other gains and losses		(54,759)	(2)	59,833	3
7050	Finance costs		(91,663)	(2)	(45,558)	(2)
	Non-operating income and expenses total		(107,246)	(3)	58,578	3
7900	Income before income tax		27,968	1	81,902	4
7950	Income tax expense	4, 6(26)	(36,997)	(1)	(37,326)	(2)
8200	Net income (loss)		(9,029)	-	44,576	2
8300	Other comprehensive income (loss)	6(25)
8310	Items that will not be reclassified subsequently to profit or loss
8311	Gains (losses) on remeasurements of defined benefit plans		4,883	-	9,082	1
8316	Unrealized gains (losses) from investments in equity instruments measured at fair value through other comprehensive income		(44,994)	(1)	(14,191)	(1)
8360	Items that may be reclassified subsequently to profit or loss
8361	Exchange differences on translation		297	-	3,040	-
	Total other comprehensive income, net of tax		(39,814)	(1)	(2,069)	-
8500	Total comprehensive income (loss)		$(48,843)	(1)	$42,507	2
8600	Net income attributable to:
8610	Stockholders of parent		$(52,238)	(1)	$13,701	1
8620	Non-controlling interests		43,209	1	30,875	1
			$(9,029)	-	$44,576	2
8700	The total comprehensive income (loss) attributable to:
8710	Stockholders of parent		$(91,997)	(2)	$10,653	1
8720	Non-controlling interests		43,154	1	31,854	1
			$(48,843)	(1)	$42,507	2
	Earnings (losses) per share (in NTD)	6(27)
9750	Earnings (losses) per share - basic (in NTD)		$(0.55)		$0.16
9850	Earnings (losses) per share - diluted (in NTD)		$(0.55)		$-

English Translation of Consolidated Financial Statements Originally Issued in Chinese

RITDisplay Corporation and Subsidiaries

Consolidated Statements of Change in Equity

For the Years Ended December 31, 2025 and 2024

(Amounts Expressed in Thousands of New Taiwan Dollars)

Code	Items	Equity attributable to owners of the parent									Non-controlling interest	Total Equity
		Capital	Capital surplus	Retained earnings			Other components of equity		Treasury stock	Total
				Legal reserve	Special reserve	Unappropriated retained earnings	Exchange differences arising on translation of foreign operations	Unrealized gains or losses on financial assets at fair value through other comprehensive income
		3100	3200	3310	3320	3350	3410	3420	3500	31XX	36XX	3XXX
A1	Balance as of January 1, 2024	$746,517	$867,975	$164,399	$5,371	$140,455	$(531)	$(820)	$(51,486)	$1,871,880	$212,178	$2,084,058
	Appropriation and distribution of 2023 earnings:
B17	Reversal of special reserve				(4,020)	4,020				-		-
D1	Net income for 2024					13,701				13,701	30,875	44,576
D3	Other comprehensive income (loss) for 2024					9,082	2,061	(14,191)		(3,048)	979	(2,069)
D5	Total comprehensive income (loss)	-	-	-	-	22,783	2,061	(14,191)	-	10,653	31,854	42,507
E1	Capital increase by cash	170,000	340,000							510,000		510,000
M5	Difference between consideration and carrying amount of subsidiaries acquired or disposed		147,703							147,703	93,097	240,800
M7	Changes in subsidiaries ownership		15,966							15,966	(15,676)	290
N1	Share-based payment		7,735							7,735		7,735
O1	Changes in non-controlling interests					(1,652)		1,652		-	(12,947)	(12,947)
Q1	Disposal of investments in equity instruments measured at fair value through other comprehensive income									-		-
T1	Other - early repurchase of convertible bonds		(53)							(53)		(53)
Z1	Balance as of December 31, 2024	$916,517	$1,379,326	$164,399	$1,351	$165,606	$1,530	$(13,359)	$(51,486)	$2,563,884	$308,506	$2,872,390
A1	Balance as of January 1, 2025	$916,517	$1,379,326	$164,399	$1,351	$165,606	$1,530	$(13,359)	$(51,486)	$2,563,884	$308,506	$2,872,390
	Appropriation and distribution of 2024 earnings:
B1	Legal reserve			2,113		(2,113)				-		-
B3	Special reserve				10,478	(10,478)				-		-
B5	Cash dividends-common shares					(9,065)				(9,065)		(9,065)
B9	Stock dividends-common shares	9,065				(9,065)
D1	Net income (loss) for 2025					(52,238)				(52,238)	43,209	(9,029)
D3	Other comprehensive income (loss) for 2025					4,883	352	(44,994)		(39,759)	(55)	(39,814)
D5	Total comprehensive income (loss)	-	-	-	-	(47,355)	352	(44,994)	-	(91,997)	43,154	(48,843)
E1	Capital increase by cash	125,000	275,000							400,000		400,000
L3	Cancellation of treasury share	(10,000)	(13,605)			(27,881)			51,486	-		-
M5	Difference between consideration and carrying amount of subsidiaries acquired or disposed		(71,529)							(71,529)	(32,663)	(104,192)
M7	Changes in subsidiaries ownership		3,224							3,224	1,900	5,124
N1	Share-based payment		14,062							14,062		14,062
Q1	Disposal of investments in equity instruments measured at fair value through other comprehensive income					(467)		467		-		-
T1	Other - early repurchase of convertible bonds		18							18		18
Z1	Balance as of December 31, 2025	$1,040,582	$1,586,496	$166,512	$11,829	$59,182	$1,882	$(57,886)	$-	$2,808,597	$320,897	$3,129,494

R/Tdisplay Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Amounts Expressed in Thousands of New Taiwan Dollars)

Code	Items	2025	2024	Code	Items	2025	2024
AAAA	Cash flows from operating activities:			BBBB	Cash flows from investing activities:
A00010	Net income before tax	$27,968	$81,902	B00010	Acquisition of financial assets at fair value through other comprehensive income	(193,316)	(122,785)
A20000	Adjustments:			B00020	Proceeds from disposal of financial assets at fair value through other comprehensive income	1,692	19,697
A20010	Profit or loss not effecting cash flows:			B00050	Acquisition of financial assets measured at amortised cost	(96,053)	(37,119)
A20100	Depreciation expenses and other losses	168,195	166,089	B02200	Net cash flow from acquisition of subsidiaries	-	149,245
A20200	Amortization	3,816	2,306	B02700	Acquisition of property, plant and equipment	(1,490,787)	(664,498)
A20300	Expected credit losses (gains)	2,053	(1,440)	B02800	Proceeds from disposal of property, plant and equipment	20,248	59,622
A20400	Net gain of financial assets (liabilities) at fair value through profit or loss	(5,201)	(37,764)	B03700	Increase in refundable deposits	(417)	-
A20900	Interest expense	91,663	45,558	B03800	Decrease in refundable deposits	-	448
A21200	Interest income	(10,399)	(11,925)	B04500	Acquisition of intangible assets	(5,490)	(5,101)
A21300	Dividend income	(2,871)	(3,018)	B06000	Increase in long-term financing lease payments receivable	(39,864)	(17,197)
A21900	Compensation cost of share - based payment	16,586	8,025	B06700	Increase in other non-current assets	(13,999)	-
A22500	Gain on disposal of property, plan and equipment	(2,085)	(18,046)	BBBB	Net cash provided by (used in) investing activities	(1,817,986)	(617,688)
A23100	Loss (gain) on disposal of investments	454	5,622
A24200	Loss on redemption of bonds payable	13,687	5,923	CCCC	Cash flows from financing activities:
A30000	Changes in operating assets and liabilities:			C00200	(Repayments of) increase in short-term loans	(200,574)	(95,000)
A31115	Decrease (increase) in financial assets at fair value through profit or loss, mandatorily measured at fair value	11,888	72,435	C01300	Repayments of bonds	(309,951)	(122,356)
A31125	Decrease (increase) in contract assets	(5,023)	(148)	C01600	Proceeds from long-term loans	3,673,710	870,000
A31150	Decrease (increase) in accounts receivable	(447,869)	59,459	C01700	Repayments of long-term loans	(1,654,162)	(237,304)
A31180	Decrease (increase) in other receivable	48,858	(15,563)	C04020	Payments of lease liabilities	(10,446)	(7,673)
A31200	Decrease (increase) in inventories	128,878	30,577	C04300	Increase in other non-current liabilities	3,216	1,938
A31230	Decrease (increase) in prepayments	261,447	(415,562)	C04500	Cash dividends paid	(9,065)	(12,947)
A31240	Adjustments for decrease (increase) in other current assets	(186)	4,402	C04600	Capital increase by cash	400,000	510,000
A32125	Increase (decrease) in contract liabilities	34,084	42,147	C04800	Exercise of employee share options	2,600	-
A32130	Increase (decrease) in notes payable	4,844	584	C05500	Disposal of ownership interests in subsidiaries (without losing control)	-	240,800
A32150	Increase (decrease) in accounts payable	(43,187)	21,163	C05800	Changes in non-controlling interests	(104,192)	-
A32180	Increase (decrease) in other payable	(429,543)	90,959	CCCC	Net cash provide by (used in) financing activities	1,791,136	1,147,458
A32230	Increase (decrease) in other current liabilities	(1,527)	(4,044)
A32240	Increase (decrease) in net defined benefit liability	(843)	(720)	DDDD	Effect of exchange rate changes on cash and cash equivalents	62	692
A33000	Cash generated from operations	(134,313)	128,921
A33100	Interest received	10,399	11,925	EEE	Net increase (decrease) in cash and cash equivalents	(252,892)	610,120
A33200	Dividend received	2,871	3,018	E00100	Cash and cash equivalents at beginning of period	1,571,188	961,068
A33300	Interest paid	(87,336)	(37,145)	E00200	Cash and cash equivalents at end of period	$1,318,296	$1,571,188
A33500	Income tax paid	(17,725)	(27,061)
AAAA	Net cash provided by (used in) operating activities	(226,104)	79,658

1. HISTORY AND ORGANIZATION

RiTdisplay Corporation (referred to "the Company") was established on March 13, 2000. Its main business activities include the manufacture of OLED and sales of the related products. The Company's stock has been approved in July 2016 to be listed and traded in the Taipei Exchange (formerly "GreTai Securities Market"), and were publicly listed on the Taiwan Stock Exchange on January 17, 2019. The registered business premise and main operation address is at No.12, North Kuan-Fu Rd., Hsinchu Industrial Park, Hukou Township, Hsinchu Country, Taiwan, 30351.

Ritek Corporation is the Group's parent, while is also the ultimate controller of the Company to which the Company belongs.

2. DATE AND PROCEDURE OF AUTHORIZATION FOR FINANCIAL STATEMENTS ISSUANCE

The consolidated financial statements of the Company and its subsidiaries ("the Group") were authorized for issue in accordance with a resolution of the meeting of the Company's board of directors (hereinafter the "Board of Directors") held on March 10, 2026.

3. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

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

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

RiTdisplay Corporation and Subsidiaries

Notes to Consolidated Financial Statements (Continued)

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

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

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

(a) IFRS 17 "Insurance Contracts"

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

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

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

Notes to Consolidated Financial Statements (Continued)

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

(b) Amendments to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify that a financial liability is derecognised on the settlement date and describe the accounting treatment for settlement of financial liabilities using an electronic payment system before the settlement date.

(2) Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social and governance (ESG)-linked features and other similar contingent features.

(3) Clarify the treatment of non-recourse assets and contractually linked instruments.

(4) Require additional disclosures in IFRS 7 for financial assets and liabilities with contractual terms that reference a contingent event (including those that are ESG-linked), and equity instruments classified at fair value through other comprehensive income.

(1) Amendments to IFRS 1

The amendments mainly improve the consistency in wording between first-time adoption of IFRS and requirements for hedge accounting in IFRS 9.

(2) Amendments to IFRS 7

The amendments update an obsolete cross-reference relating to gain or loss on derecognition.

(3) Amendments to Guidance on implementing IFRS 7

The amendments improve some of the wordings in the implementation guidance, including the introduction, disclosure of deferred difference between fair value and transaction price and credit risk disclosures.

(4) Amendments to IFRS 9

The amendments add a cross-reference to resolve potential confusion for a lessee applying the derecognition requirements and clarify the term "transaction price".

(5) Amendments to IFRS 10

The amendments remove the inconsistency between paragraphs B73 and B74 of IFRS 10.

(6) Amendments to IAS 7

The amendments remove a reference to "cost method" in paragraph 37 of IAS 7.

(d) Contracts Referencing Nature-dependent Electricity – Amendments to IFRS 9 and IFRS 7

The amendments include:

(1) Clarify the application of the 'own-use' requirements.

(2) Permit hedge accounting if these contracts are used as hedging instruments.

(3) Add new disclosure requirements to enable investors to understand the effect of these contracts on a company's financial performance and cash flows.

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

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

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

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

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

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

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

(b) IFRS 18 "Presentation and Disclosure in Financial Statements"

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

(1) Improved comparability in the statement of profit or loss (income statement)

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

(2) Enhanced transparency of management-defined performance measures

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

(3) Useful grouping of information in the financial statements

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

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

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

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

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

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

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

(1) Statement of compliance

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

(2) Basis of preparation

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

(3) Basis of consolidation

Preparation principle of consolidated financial statements

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

(A) Power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)

(B) Exposure, or rights, to variable returns from its involvement with the investee, and

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

(A) The contractual arrangement with the other vote holders of the investee
(B) Rights arising from other contractual arrangements
(C) The Company’s voting rights and potential voting rights

The Company re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control.

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

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

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

If the Company loses control of a subsidiary, it:

(A) Derecognizes the assets (including goodwill) and liabilities of the subsidiary;
(B) Derecognizes the carrying amount of any non-controlling interest;
(C) Recognizes the fair value of the consideration received;
(D) Recognizes the fair value of any investment retained;
(E) Reclassifies the parent’s share of components previously recognized in other comprehensive income to profit or loss, or transfers directly to retained earnings; and
(F) Recognizes differences in profit or loss.

The consolidated entities are listed as follows:

Investor	Subsidiary	Main business	Percentage of Ownership (%), As of December 31,		Note
			2025	2024
The Company	RitAsset Co., Ltd.	Leasing business	100%	100%
The Company	Ritwin Corporation	Electronic components manufacturing industry	64.69%	61.01%	Note 1
Note 2
The Company	HanTai Energy Co., Ltd.	Energy Technology Service	100%	100%
Ritwin Corporation	Cashido Corporation	Manufacturing and sales of micro bubble systems	-%	100%	Note 3
Ritwin Corporation	Welltech Energy Inc.	Manufacturing and sales of battery, electronic components	100%	100%
Welltech Energy Inc.	Saintop Group Co., Ltd.	Investment activities	100%	100%
Welltech Energy Inc.	Formosa Fortune Holding Limited	Investment activities	100%	100%
Welltech Energy Inc.	Changzhou Soaring Technology Co., Ltd.	Designing and assembling of lithium battery, manufacturing and selling of battery module - component	18.19%	18.19%

| Investor | Subsidiary | Main business | Percentage of Ownership (%),
As of December 31, | | Note |
| --- | --- | --- | --- | --- | --- |
| | | | 2025 | 2024 | |
| Saintop Group Co., Ltd. | Hi-Tech Eenergy Limited | Investment activities | 100% | 100% | |
| Hi-Tech Eenergy Limited | Techcharm Electronics (Shanghai) Co., Ltd. | Investment activities | 100% | 100% | |
| Techcharm Electronics (Shanghai) Co., Ltd. | Changzhou Soaring Technology Co., Ltd. | Designing and assembling of lithium battery, manufacturing and selling of battery module - component | 45.43% | 45.43% | |
| Formosa Fortune Holding Limited | Global Resources Channel Co., Ltd. | Investment activities | 100% | 100% | |
| Global Resources Channel Co., Ltd. | Changzhou Soaring Technology Co., Ltd. | Designing and assembling of lithium battery, manufacturing and selling of battery module - component | 36.38% | 36.38% | |

Note 1: On June 25, 2024, the Company resolved in a shareholders' meeting to conduct the share release plan of Ritwin Corporation. After the completion of the share release process of 3,440 thousand shares, the Company's ownership in Ritwin Corporation was reduced from 72.78% to 61.01%.

Note 2: From April to December 2025, the Company acquired 1,104 thousand shares of its subsidiary, Ritwin Corporation., in the amount of NT$104,192 thousand. The Company's ownership in Ritwin Corporation increased from 61.01% to 64.69%.

Note 3: The Corporation’s subsidiary, Cashido Corporation, has initiated the dissolution and liquidation process in response to the Group’s business adjustments. The dissolution was approved by the Ministry of Economic Affairs on October 20, 2025. As of December 31, 2025, the liquidation process is still ongoing.

(4) Foreign currency transactions

The Group’s consolidated financial statements are presented in New Taiwan Dollar, which is the parent company’s functional currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

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

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

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

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

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

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

(5) Current and non-current distinction

An asset is classified as current when:

(A) The Group expects to realize the asset, or intends to sell or consume it, in its normal operating cycle.

(B) The Group holds the asset primarily for the purpose of trading.

(D) The asset is cash or cash equivalent unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is classified as current when:

(A) The Group expects to settle the liability in its normal operating cycle.

(B) The Group holds the liability primarily for the purpose of trading.

(D) The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

(6) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value (including fixed-term deposits with maturities of less than 3 months).

(7) Financial instruments

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

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

A. Financial instruments: Recognition and Measurement

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

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

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

Financial assets measured at amortized cost

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

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

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

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

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

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

Financial asset measured at fair value through other comprehensive income

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

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

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

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

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

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

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

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

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

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

Financial asset measured at fair value through profit or loss

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

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

B. Impairment of financial assets

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

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

(a) an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes;

(b) the time value of money; and

(c) reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.

The loss allowance is measured as follows:

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

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

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

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

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

C. Derecognition of financial assets

A financial asset is derecognized when:

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

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

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

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

D. Financial liabilities and equity

Classification between liabilities or equity

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

Equity instruments

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

Compound instruments

The Group evaluates the terms of the convertible bonds issued to determine whether it contains both a liability and an equity component. Furthermore, the Group assesses if the economic characteristics and risks of the put and call options contained in the convertible bonds are closely related to the economic characteristics and risk of the host contract before separating the equity element.

For the liability component excluding the derivatives, its fair value is determined based on the rate of interest applied at that time by the market to instruments of comparable credit status. The liability component is classified as a financial liability measured at amortized cost before the instrument is converted or settled. For the embedded derivative that is not closely related to the host contract (for example, if the exercise price of the embedded call or put option is not approximately equal on each exercise date to the amortized cost of the host debt instrument), it is classified as a liability component and subsequently measured at fair value through profit or loss unless it qualifies for an equity component. The equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component. Its carrying amount is not remeasured in the subsequent accounting periods. If the convertible bond issued does not have an equity component, it is accounted for as a hybrid instrument in accordance with the requirements under IFRS 9 Financial Instruments.

Transaction costs are apportioned between the liability and equity components of the convertible bond based on the allocation of proceeds to the liability and equity components when the instruments are initially recognized.

On conversion of a convertible bond before maturity, the carrying amount of the liability component being the amortized cost at the date of conversion is transferred to equity.

Financial liabilities

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

Financial liabilities at fair value through profit or loss

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

A financial liability is classified as held for trading if:

(a) it is acquired or incurred principally for the purpose of selling or repurchasing it in the near term;

(b) on initial recognition it is part of a portfolio of identified financial instruments that are managed together and for which there is evidence of a recent actual pattern of short-term profit-taking; or

(c) it is a derivative (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument).

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

(a) it eliminates or significantly reduces a measurement or recognition inconsistency; or

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

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

Financial liabilities at amortized cost

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

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

Derecognition of financial liabilities

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

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

E. Offsetting of financial instruments

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

(8) Fair value measurement

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

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

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

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

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

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

(9)Inventories

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

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

Raw materials - At actual purchase cost, using weighted average method.

Finished goods and work in progress - Including cost of direct materials, labor and a proportion of manufacturing overheads excluding borrowing costs.

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

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

(10) Property, plant and equipment

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

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

Buildings	4~46 years
Machinery and equipment	3~10 years
Other equipment	3~6 years

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

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

(11) Investment property

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

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

Buildings

4~46 years

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

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

(12) Leases

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

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

B. The right to direct the use of the identified asset.

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

Group as a lessee

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

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

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

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

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

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

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

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

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

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

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

Group as a lessor

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

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

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

(13) Intangible assets

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

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

The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each financial year. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

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

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

Patent and Trademark rights

Patent and trademark rights are the authorized right from acquiring or purchasing.

Computer software

The cost of computer software is amortized on a straight-line basis over the estimated useful life (2 to 10 years).

Right to use feeder lines

The right to use feeder lines were generated by adopting the acquisition method when merger and acquisition occurs. Upon being available for use, the intangible assets are amortized on a straight-line basis over their estimated useful life.

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

	Patents	Trademark rights	Computer software	Right to use feeder lines
Useful economic life	5~20 years	7~10 years	2~3 years	15~18 years
Amortization method	Straight-line method	Straight-line method	Straight-line method	Straight-line method
	during the contract term	during the contract term	during the contract term	during the contract term
Internally generated or acquired externally	Acquired externally	Acquired externally	Acquired externally	Acquired externally

(14)Impairment of non-financial assets

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

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

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

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

(15) Treasury stock

Own equity instruments which are reacquired (treasury stock) are recognized at cost and deducted from equity. Any difference between the carrying amount and the consideration is recognized in equity.

(16) Revenue recognition

The Group's revenue arising from contracts with customers mainly includes sale of goods. The accounting policies are explained as follows:

Sale of goods

The Group manufactures and sells of its products. Sales are recognized when control of the goods is transferred to the customer and the goods are delivered to the customers. The main product of the Group is OLED and revenue is recognized based on the consideration stated in the contract. The Group recognized an allowance for sale return and discount shall be presented under the caption of refund liabilities within other current liabilities when partial or all considerations received might be returned or a chargeback is expected to occur.

The credit period of the Group's sale of goods is from T/T to 30~90 days. For most of the contracts, when the Group transfers the goods to customers and has a right to an amount of consideration that is unconditional, these contracts are recognized as trade receivables. The period between the time when the Group transfers the goods to customers and when the customers pay for that goods is usually short and have no significant financing component to the contract. In the case that the Group has the right to transfer the goods to customers but does not has a right to an amount of consideration that is unconditional, these contacts should be presented as contract assets. Besides, in accordance with IFRS 9, the Group measures the loss allowance for a contract asset at an amount equal to the lifetime expected credit losses. However, for some rendering of goods contracts, part of the consideration was received from customers upon signing the contract, and the Group has the obligation to provide the goods subsequently; accordingly, these amounts are recognized as contract liabilities.

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

(17)Borrowing costs

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

(18) Government grants

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

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

(19) Post-employment benefits

All regular employees of the Company and its domestic subsidiaries are entitled to pension plans that are managed by an independently administered pension fund committee. Fund assets are deposited under the committee's name in the specific bank account and hence, not associated with the Company and its domestic subsidiaries. Therefore, fund assets are not included in the Group's consolidated financial statements.

For the defined contribution plan, the Company and its domestic subsidiaries will make a monthly contribution of no less than 6% of the monthly wages of the employees subject to the plan. The Group recognizes expenses for the defined contribution plan in the period in which the contribution becomes due.

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

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

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

(20) Share-based payment transactions

The cost of equity-settled transactions between the Group and its employees is recognized based on the fair value of the equity instruments granted. The fair value of the equity instruments is determined by using an appropriate pricing model.

The cost of equity-settled transactions is recognized, together with a corresponding increase in other capital reserves in equity, over the period in which the performance and/or service conditions are fulfilled. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognized as at the beginning and end of that period.

No expense is recognized for awards that do not ultimately vest, except for equity-settled transactions where vesting is conditional upon a market or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it has been vested on the date of cancellation, and any expense not yet recognized for the award is recognized immediately. This includes any award where non-vesting conditions within the control of either the entity or the employee are not met. However, if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.

The cost of restricted stocks issued is recognized as salary expense based on the fair value of the equity instruments on the grant date, together with a corresponding increase in other capital reserves in equity, over the vesting period. The Group recognized unearned employee salary which is a transitional contra equity account; the balance in the account will be recognized as salary expense over the passage of vesting period.

(21) Income tax

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

Current income tax

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

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

Deferred tax

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

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

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

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

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

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

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

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

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

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

(22) Business combinations and goodwill

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

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

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

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

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

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

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

5. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

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

(1) Judgement

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

A. Investment properties

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

B. Operating lease commitment—Group as the lessor

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

(2) Estimates and assumptions

The key assumptions concerning the future and other key source of estimation uncertainty at the reporting date that would have a significant risk for a material adjustment to the carrying amount of assets and liabilities within the next fiscal year are discussed below.

A. Accounts receivables—estimation of impairment loss

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

B. Inventory

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

C. Pension benefits

The cost of post-employment benefit and the present value of the pension obligation under defined benefit pension plans are determined using actuarial valuations. An actuarial valuation involves making various assumptions. These include the determination of the discount rate and changes of the future salary, etc. Please refer to Note 6 for more details.

D. Income tax

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

Deferred tax assets are recognized for all carryforward of unused tax losses and unused tax credits and deductible temporary differences to the extent that it is probable that taxable profit will be available or there are sufficient taxable temporary differences against which the unused tax losses, unused tax credits or deductible temporary differences can be utilized. The amount of deferred tax assets determined to be recognized is based upon the likely timing and the level of future taxable profits and taxable temporary differences together with future tax planning strategies. Please refer to Note 6 for more details about unrecognized deferred tax assets as of December 31, 2025.

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(1) Cash and cash equivalents

	As of December 31,
	2025	2024
Cash on hand and Petty Cash	$83	$272
Demand/Checking deposits	687,778	855,916
Time deposits	329,980	5,000
Investments in bonds with resale agreements	300,455	710,000
Total	$1,318,296	$1,571,188

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

	As of December 31,
	2025	2024
Measured at fair value through profit or loss:
Listed companies stocks	$19,356	$28,465
Fund	-	3,000
Valuation adjustment	(3,067)	(8,099)
Total	$16,289	$23,366
Current	$16,289	$23,366

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

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

	As of December 31,
	2025	2024
Equity instrument investments measured at fair value through other comprehensive income-Current:
Listed companies stocks	$259,206	$83,049
Unlisted companies stocks	95,888	80,888
Valuation adjustment	(57,886)	(13,359)
Total	$297,208	$150,578
Current	$297,208	$150,578

Financial assets at fair value through other comprehensive income were not pledged.

In consideration of the Group's investment strategy, the Group disposed and derecognized partial equity instrument investments measured at fair value through other comprehensive income. Details on derecognition of such investments for the years ended December 31, 2025 and 2024 are as follows:

	For the years ended December 31,
	2025	2024
The fair value of the investments at the date of derecognition	$1,692	$19,697
The cumulative gain or loss on disposal reclassified from other equity to retained earnings	$(467)	$(1,652)

(4) Financial assets measured at amortized cost

	As of December 31,
	2025	2024
Restricted deposits	$51,965	$18,457
Bank deposits (reserve account)	111,730	69
Time deposit (unpledged)	-	30,000
Time deposit (pledged)	40,803	59,919
Total	$204,498	$108,445
Current	$4,178	$31,576
Non-current	200,320	76,869
Total	$204,498	$108,445

Please refer to Note 8 for more details on financial assets measured at amortized cost under pledge.

(5) Accounts receivable, net

	As of December 31,
	2025	2024
Accounts receivable	$1,054,392	$604,835
Less: loss allowance	(14,748)	(12,695)
Subtotal	1,039,644	592,140
Accounts receivable-related parties	655	2,343
Less: loss allowance	-	-
Subtotal	655	2,343
Total	$1,040,299	$594,483

Accounts receivables were not pledged.

Accounts receivables are generally on 30-90 day terms. The total carrying amount as of December 31, 2025 and 2024 are NT$1,055,047 thousand and NT$607,178 thousand, respectively. Please refer to Note 6(21) for more details on loss allowance of accounts receivable for the years ended December 31, 2025 and 2024. Please refer to Note 12 for more details on credit risk management.

(6) Financing lease payments receivable, net

On December 31, 2025 and 2024, the Group leased machinery and equipment through financial leasing, the adjustments are listed below:

	As of December 31,
	2025		2024
	Total investment in leases	Present value of receivables on minimum lease payments	Total investment in leases	Present value of receivable on minimum lease payments
Less than one year	$32,244	$28,143	$13,841	$12,469
More than one year but less than five years	53,842	46,146	24,525	21,956
More than five years	-	-	-	-
Total	86,086	$74,289	38,366	$34,425
Less: Unearned finance income	(11,797)		(3,941)
Present value of receivable on minimum lease payments	$74,289		$34,425
Current	$28,143		$12,469
Non-current	46,146		21,956
Total	$74,289		$34,425

Financing lease payments receivables, net were not pledged.

Please refer to Note 6(21) for more details on loss allowance of accounts receivable for the years ended December 31, 2025 and 2024. Please refer to Note 12 for more details on credit risk management.

(7) Inventory

	As of December 31,
	2025	2024
Merchandise inventory	$9,297	$130
Finished goods	26,673	70,799
Semi-finished goods and work in process	112,033	162,379
Raw materials	162,157	195,261
Inventory in transit	33,340	43,809
Total	$343,500	$472,378

For the years ended December 31, 2025 and 2024, the Group recognized NT$2,958,931 thousand and NT$1,817,817 thousand under the caption of costs of sale, respectively. The following items were also included in cost.

	For the years ended December 31,
	2025	2024
Loss (gain) from inventory market decline (recovery)	$(2,037)	$(14,600)
Loss from inventory write-off obsolescence	3,832	3,415
Total	$1,795	$(11,185)

The Group recognized gains on recovery of inventory market decline because some of the inventories previously provided with market loss or obsolescence were disposed for the years ended December 31, 2025 and 2024.

The inventories were not pledged.

(8) Property, plant and equipment

A. Owner occupied property, plant and equipment

	Land	Buildings	Machinery and equipment	Other equipment	Work in progress	Total
Cost:
As of Jan. 1, 2025	$867,901	$2,270,031	$4,993,079	$246,754	$780,000	$9,157,765
Additions	-	1,410	34,057	7,211	1,406,000	1,448,678
Disposals	-	-	(20,845)	(1,801)	-	(22,646)
Transfers	(281,058)	(305,562)	-	-	-	(586,620)
Exchange differences	-	(596)	329	64	-	(203)
As of Dec. 31, 2025	$586,843	$1,965,283	$5,006,620	$252,228	$2,186,000	$9,996,974
As of Jan. 1, 2024	$867,901	$2,366,471	$4,995,299	$238,910	$-	$8,468,581
Additions	-	5,781	125,110	18,001	780,000	928,892
Disposals	-	-	(130,538)	(10,831)	-	(141,369)
Transfers	-	(107,580)	-	-	-	(107,580)
Exchange differences	-	5,359	3,208	674	-	9,241
As of Dec. 31, 2024	$867,901	$2,270,031	$4,993,079	$246,754	$780,000	$9,157,765
Depreciation and impairment:
As of Jan. 1, 2025	$-	$1,556,344	$4,544,500	$214,730	$-	$6,315,574
Depreciation	-	28,254	97,506	12,015	-	137,775
Disposals	-	-	(3,079)	(1,404)	-	(4,483)
Transfers	-	(75,111)	-	-	-	(75,111)
Exchange differences	-	366	276	56	-	698
As of Dec. 31, 2025	$-	$1,509,853	$4,639,203	$225,397	$-	$6,374,453
As of Jan. 1, 2024	$-	$1,596,256	$4,499,551	$213,047	$-	$6,308,854
Depreciation	-	37,746	99,590	9,453	-	146,789
Disposals	-	-	(57,660)	(8,373)	-	(66,033)
Transfers	-	(81,368)	-	-	-	(81,368)
Exchange differences	-	3,710	3,019	603	-	7,332
As of Dec. 31, 2024	$-	$1,556,344	$4,544,500	$214,730	$-	$6,315,574

	Land	Buildings	Machinery and equipment	Other equipment	Work in progress	Total
Net carrying amount:
As of Dec. 31, 2025	$586,843	$455,430	$367,417	$26,831	$2,186,000	$3,622,521
As of Dec. 31, 2024	$867,901	$713,687	$448,579	$32,024	$780,000	$2,842,191

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

C. Significant component of main building, fire engineering equipment, sewage treatment equipment and cleanroom are depreciated over useful lives of 46 years and 4~20 years, respectively.

(9)Investment property

	Land	Buildings	Total
Cost:
As of January 1, 2025	$-	$1,147,688	$1,147,688
Transfers from property, plant and equipment	281,058	305,562	586,620
As of December 31, 2025	$281,058	$1,453,250	$1,734,308
As of January 1, 2024	$-	$1,040,108	$1,040,108
Transfers from property, plant and equipment	-	107,580	107,580
As of December 31, 2024	$-	$1,147,688	$1,147,688
Depreciation and impairment:
As of January 1, 2025	$-	$896,285	$896,285
Depreciation	-	19,841	19,841
Transfers from property, plant and equipment	-	75,111	75,111
As of December 31, 2025	$-	$991,237	$991,237
As of January 1, 2024	$-	$803,722	$803,722
Depreciation	-	11,195	11,195
Transfers from property, plant and equipment	-	81,368	81,368
As of December 31, 2024	$-	$896,285	$896,285

	Land	Buildings	Total
Net carrying amount:
As of December 31, 2025	$281,058	$462,013	$743,071
As of December 31, 2024	$-	$251,403	$251,403
	For the years ended December 31,
	2025	2024
Rental income from investment property	$92,746	$-
Less: Direct operating expenses from investment property generating rental income	(19,841)	(11,195)
Total	$72,905	$(11,195)

Please refer to Note 8 for more details on investment property under pledge.

Investment property held by the Group are not measured at the fair value but for which the fair value is disclosed. The fair value measurements of the investment properties are categorized within Level 3. The fair values of investment properties were NT$1,625,101 thousand and NT$314,971 thousand as of December 31, 2025 and 2024, respectively. The fair value of investment properties had been determined based on the recent transaction price of comparatively similar objects where each investment property was located in.

(10) Intangible assets

	Patents	Trademark rights	Goodwill	Computer	Right-of-use feeder lines	Total
Cost:
As of Jan. 1, 2025	$1,091	$834	$97,590	$18,608	$156,536	$274,659
Addition-acquired alone	-	-	-	5,490	-	5,490
Proceeds from disposal of subsidiaries	(1,091)	(834)	-	-	-	(1,925)
Exchange differences	-	-	-	15	-	15
As of Dec. 31, 2025	$-	$-	$97,590	$24,113	$156,536	$278,239
As of Jan. 1, 2024	$1,091	$834	$97,590	$13,342	$-	$112,857
Addition-acquired alone	-	-	-	5,101	-	5,101
Reclassification	-	-	-	-	156,536	156,536
Exchange differences	-	-	-	165	-	165
As of Dec. 31, 2024	$1,091	$834	$97,590	$18,608	$156,536	$274,659
Amortization and impairment:
As of Jan. 1, 2025	$783	$715	$-	$12,468	$-	$13,966
Amortization	37	49	-	3,730	-	3,816
Proceeds from disposal of subsidiaries	(820)	(764)	-	-	-	(1,584)
Exchange differences	-	-	-	14	-	14
As of Dec. 31, 2025	$-	$-	$-	$16,212	$-	$16,212
As of Jan. 1, 2024	$719	$665	$-	$10,122	$-	$11,506
Amortization	64	50	-	2,192	-	2,306
Exchange differences	-	-	-	154	-	154
As of Dec. 31, 2024	$783	$715	$-	$12,468	$-	$13,966
Net carrying amount:
As of Dec. 31, 2025	$-	$-	$97,590	$7,901	$156,536	$262,027
As of Dec. 31, 2024	$308	$119	$97,590	$6,140	$156,536	$260,693

Amounts of amortization recognized for intangible assets are as follows:

	For the years ended December 31,
	2025	2024
Operating costs	$1,121	$587
Operating expenses	2,695	1,719
Total	$3,816	$2,306

(11) Other non-current assets

	As of December 31,
	2025	2024
Prepayment in equipment	$94,239	$57,396
Refundable deposits	2,989	2,572
Net defined benefit asset	16,640	10,914
Others	13,999	-
Total	$127,867	$70,882

(12) Impairment testing goodwill

Goodwill acquired through business combination has been allocated to cash-generating unit, for impairment testing as follows:

	As of December 31,
	2025	2024
Subsidiary-Welltech Energy Inc.	$97,590	$97,590

On December 31, 2025, the recoverable amount of cash generating units of the Welltech Energy Inc. was NT$458,585 thousand. The recoverable amount has been determined based on a value in use calculation using cash flow projections from financial budgets approved by management covering a five-year period. The projected cash flows have been updated to reflect the change in demand for product. The pre-tax discount rate applied to cash flow projections is 11.51% and cash flows beyond the five-year period are extrapolated using 0% growth rate. As a result of the updated analysis, management did not identify an impairment for goodwill of NT$97,590 thousand which is allocated to this cash-generating unit.

Key assumptions used in value-in-use calculations

The calculation of value-in-use for both electronics and fire prevention equipment units are most sensitive to the following assumption:

(1) Gross margin
(2) Discount rates
(3) Growth rate used to extrapolate revenue beyond the budget period.

Gross margins — Gross margins are estimated based on the value achieved in prior year and referencing the future market trends.

Discount rate — Discount rate reflects the current market assessment of the risks specific to each cash generating unit (including the time value of money and the risks specific to the asset for which the future cash flow estimates have not been adjusted). The discount rate was estimated based on the weighted average cost of capital (WACC) for the Group, taking into account the particular situations of the Group and its operating segments. The WACC includes both the cost of liabilities and cost of equities. The cost of equities is derived from the expected returns of the Group’s investors on capital, where the cost of liabilities is measured by the interest-bearing loans that the Group has obligation to settle.

Growth rate estimates of revenue — Rates is estimated based on past experience, the long-term average growth rate has been adjusted based on the economic environment.

Sensitivity to changes in assumptions

With regard to the assessment of value-in-use of Welltech Energy Inc., management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount.

(13) Short-term loans

	As of December 31,
	2025	2024
Bank loans	$334,426	$535,000
Interest rate range (%)	2.10%~5.48%	1.90%~2.65%

As of December 31, 2025 and 2024, the lines of unused short-term loans credit for the Group amounted to NT$1,285,574 thousand and NT$1,175,000 thousand, respectively.

Part of the loans as of December 31, 2025 and 2024 were guaranteed by the Chairman of the Group.

The secured bank loans are secured by financial assets measured at amortized cost. Please refer to Note 8 for more details of the security.

(14) Financial liabilities at fair value through profit or loss

	As of December 31,
	2025	2024
Financial liabilities at fair value through profit or loss
Embedded derivatives-current	$-	$39

The Group's embedded derivatives (issuer redeemable and holder sellable options) related to bonds payable which amounted to NT$0 and NT$(39) thousand and were both recognized as current financial liabilities at fair value through profit or loss as of December 31, 2025 and 2024, respectively.

(15) Bonds payable

A. Details of bonds payable:

	As of December 31,
	2025	2024
Liability component:
Principal amount	$82,800	$388,200
Discounts on bonds payable	(1,090)	(11,599)
Subtotal	81,710	376,601
Less: current portion	-	(376,601)
Net amount	$81,710	$-
Embedded derivative financial instruments	$-	$(39)
Equity component-conversion rights	$5,509	$25,830

For the details of the gain or loss from valuation through profit or loss on embedded derivative financial instruments and the interest expense on the convertible bonds payable, please refer to Note 6 (24).

B. On November 9, 2021, the Company's board of directors' meetings resolved to issued second unsecured convertible bonds. The application has been governmentally approved by FSC in Order No. Financial-Supervisory-Securities-Corporate-1100376203. The terms of the bonds are as follows:

(a) Issue date: January 11, 2022
(b) Issue amount: NT$600,000 thousand
(c) Issue price: Issued at par value
(d) Coupon rate: 0%

(e) Secured or unsecured: Unsecured bonds

(f) Period: From January 11, 2022 to January 11, 2027

(g) Terms of Conversion:

i. Conversion period:

The bondholders would have the right to convert their bonds at any time during the conversion period commencing April 12, 2022 (the 3 months following the issuing date) to January 11, 2027 (the maturity date). However, the conversion right during any closed period shall be suspended and the conversion period shall not include any such closed period, which means (i) the period during which the Company may be required to close its stock transfer books under ROC laws and regulations applicable from time to time; (ii) the period beginning on the 15th trading day prior to the record date for the distribution of stock or cash dividends, or subscription of new shares due to capital increase to the date ending on (and including) such record date; (iii) the period beginning on the record date of a capital reduction to one day prior to the trading day on which the shares of the Company are reissued after such capital reduction.

ii. Conversion price and adjustment:

The conversion price was originally at NT$80.50 per share. The conversion price would be subject to adjustments upon the occurrence of certain events set out in the indenture.

Due to the distribution of cash dividends on ordinary shares in 2022, the company adjusted the conversion price based on the provisions for issuance and conversion of the second time unsecured convertible bonds. As a result, the conversion price had been adjusted from NT$80.50 to NT$76.41 since July 26, 2022.

Due to the distribution of cash dividends on ordinary shares in 2023, the company adjusted the conversion price based on the provisions for issuance and conversion of the second time unsecured convertible bonds. As a result, the conversion price had been adjusted from NT$76.41 to NT$73.58 since August 14, 2023.

Due to the cash capital increase in 2024, the company adjusted the conversion price based on the provisions for issuance and conversion of the second time unsecured convertible bonds. As a result, the conversion price had been adjusted from NT$73.58 to NT$72.27 since May 17, 2024.

The company adjusted the conversion price in 2025 due to earnings capitalization and the distribution of cash dividends on common shares, in accordance with the provisions of the Measures for Issuance and Conversion of Domestic Second Unsecured Convertible Corporate Bonds of the Company. Therefore, the conversion price was adjusted from NT$72.27 to NT$71.39, on September 22, 2025.

Due to the cash capital increase in 2025, the company adjusted the conversion price based on the provisions for issuance and conversion of the second time unsecured convertible bonds. As a result, the conversion price had been adjusted from NT$71.39 to NT$69.98 since October 9, 2025.

iii. Redemption on the maturity date:

The Company would redeem the bonds in cash if the convertible bonds were not settled by the maturity date.

(h) Redemption option of the issuer

The Company may redeem the convertible bonds at the par value of convertible bonds and pay in cash, from three months after bond issued April 12, 2022 to 40 days before maturity date (December 2, 2026) in the following events:

(i) The Company’s closing price of common shares is over 30% above the convertible price for 30 consecutive trading days.

(ii) The total value of outstanding convertible bonds becomes less than 10% of the total principal.

(i) Put option of the holder

The bondholders can execute put option after three years from issuance date (January 11, 2025). The Company should send through registered mail the “Notification of bondholder’s put option” 40 days before the put option base date (December 2, 2024). OTC (Over the Counter) should be notified by the Company and should announce the bondholder’s put option; a written notification should be sent to the share transfer agent by bondholders 30 days before the put option base date (December 11, 2024). The put value is 101.51% of the par value (the year yield is 0.5%). After accepting the put request, the Company should redeem the bonds by cash within 5 business days after the put option base date.

As of December 31, 2025, no equity has been converted from the Company second domestic unsecured convertible bonds.

As of December 31, 2025, bondholders have repurchased NT$429,590 thousand in advance.

(16) Long-term loans

	As of December 31,
	2025	2024
Syndicated loans	$2,875,710	$1,020,000
Bank loans	786,007	614,650
Subtotal	3,661,717	1,634,650
Less: arrangement fee	(14,577)	(7,058)
Less: current portion	(245,329)	(386,771)
Net	$3,401,811	$1,240,821
Interest rate range (%)	2.218%~3.360%	1.900%~2.784%

A. The Company signed the 5-year guarantee financing commitment contract of NT$2 billion with joint credit syndicate led by Bank of Taiwan in January 2022.

The financial commitment of the above syndicated loan maintaining financial ratios and agreements is as follows:

(a) Current ratio (current assets/ current liabilities): keep at 100% and above.
(b) Debt ratio (total liabilities/ tangible net worth): keep under 250%.
(c) Interest coverage ratio [(net income before tax + depreciation + amortization + interest expense)/ interest expense]: keep at least 3 times.
(d) Tangible net worth (shareholders’ equity-intangible assets): keep at least NT$ 1,000,000 thousand.

The above ratio and standard shall be checked every six months according to the financial reports of the year (half year) audited (reviewed) by the independent auditors.

The aforementioned syndicated loan was partially prepaid during the period from April to July 2023, and was fully repaid in January 2025.

B. The Company signed the 5-year guarantee financing commitment contract of NT$2.4 billion with joint credit syndicate led by Bank of Taiwan in December 2024.

The financial commitment of the above syndicated loan maintaining financial ratios and agreements is as follows:

The above ratio and standard shall be checked every six months according to the financial reports of the year (half year) audited (reviewed) by the independent auditors.

C. The subsidiary of the Company, RitAsset Co., Ltd. of the Company signed a twenty-year loan agreement with the Taiwan Cooperative Bank in April 2023, for a loan of NT$500 million. The repayment period extends from the 2023 to 2043 in installments.

D. The subsidiary of the Company, HanTai Energy Co., Ltd signed a 2-year guarantee financing commitment contract of NT$120 million with a joint credit syndicate as Bank of Taiwan in December 2024.

(a) Current ratio (current assets/ current liabilities): keep at 100% and above.

(b) Debt ratio (total liabilities/ tangible net worth): keep under 250%.

(c) Interest coverage ratio [(net income before tax + depreciation + amortization + interest expense)/ interest expense]: keep at least 3 times.

(d) Tangible net worth (shareholders' equity-intangible assets): keep at least NT$ 1,500,000 thousand.

The subsidiary of the Company, HanTai Energy Co., Ltd., as the borrower, shall maintain the following financial ratios and agreements from the time it starts receiving auxiliary income paid by Taiwan Power Company:

(a) Interest coverage ratio [(net income before tax + depreciation + amortization + interest expense) / interest expense]: shall be maintained at 1.15 times or above.

The above ratios and standards shall be checked once every three months starting three months after the commencement of receiving auxiliary income from Taiwan Power Company, based on the annual (semi-annual and quarterly) consolidated financial reports audited (reviewed) by the certified public accountants.

E. The loan repayment period of other financial institutions started from 2024 to 2030 in installments.

F. The borrowings as of December 31, 2025 and 2024 were guaranteed by the Chairman and directors of the Group.

G. Please refer to Note 8 for more details on assets pledged for long-term loans.

(17) Post-employment benefits

Defined contribution plan

The Group and its domestic subsidiaries adopt a defined contribution plan in accordance with the Labor Pension Act of the R.O.C. Under the Labor Pension Act, the Group and its domestic subsidiaries will make monthly contributions of no less than 6% of the employees' monthly wages to the employees' individual pension accounts. The Group and its domestic subsidiaries have made monthly contributions of 6% of each individual employee's salaries or wages to employees' pension accounts.

Expenses under the defined contribution plan for the years ended December 31, 2025 and 2024 were NT$21,461 thousand and NT$18,161 thousand, respectively.

Additional pension expenses recognized for the executives engaged by the Group amounted to NT$2,524 thousand and NT$1,910 thousand for the years ended December 31, 2025, and 2024, respectively.

Defined benefits plan

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

The Ministry of Labor is in charge of establishing and implementing the fund utilization plan in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund. The pension fund is invested in-house or under a mandate, based on a passive-aggressive investment strategy for long-term profitability. The Ministry of Labor establishes checks and risk management mechanism based on the assessment of risk factors including market risk, credit risk and liquidity risk, in order to maintain adequate manager flexibility to achieve targeted return without over-exposure of risk. With regard to utilization of the pension fund, the minimum earnings in the annual distributions on the final financial statement shall not be less than the earnings attainable from the amounts accrued from two-year time deposits with the interest rates offered by local banks. Treasury Funds can be used to cover the deficits after the approval of the competent authority. As the Company does not participate in the operation and management of the pension fund, no disclosure on the fair value of the plan assets categorized in different classes could be made in accordance with paragraph 142 of IAS 19. The Company expects to contribute NT$662 to its defined benefit plan during the 12 months beginning after December 31, 2025.

As of December 31, 2025 and 2024, the maturities of the Company's defined benefit plan were expected in 2035 and 2034, respectively.

Pension costs recognized in profit or loss were as follows:

	For the years ended December 31,
	2025	2024
Current period service costs	$624	$552
Net interest expense (income)	(805)	(566)
Total	$(181)	$(14)

Reconciliation in the defined benefit obligation and fair value of plan assets were as follows:

	As of December 31,
	2025	2024
Defined benefit obligation	$36,636	$37,587
Plan assets at fair value	(53,276)	(48,501)
Other non-current liabilities/assets – net defined benefit liability (assets)	$(16,640)	$(10,914)

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

	Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability (asset)
As of January 1, 2024	$43,820	$(44,932)	$(1,112)
Current period service costs	552	-	552
Net interest expense (income)	-	(566)	(566)
Subtotal	552	(566)	(14)
Remeasurement on net defined benefit liability/assets:
Actuarial gains and losses arising from changes in demographic assumptions	-	-	-
Actuarial gains and losses arising from changes in financial assumptions	(1,654)	-	(1,654)
Experience adjustments	(3,497)	-	(3,497)
Re-measurement on defined benefit assets	-	(3,931)	(3,931)
Subtotal	(5,151)	(3,931)	(9,082)

Contributions by employer
Actual benefit payments
As of December 31, 2024
Current period service costs
Net interest expense (income)
Subtotal
Remeasurement on net defined benefit liability/assets:
Actuarial gains and losses arising from changes in demographic assumptions
Actuarial gains and losses arising from changes in financial assumptions
Experience adjustments
Re-measurement on defined benefit assets
Subtotal
Contributions by employer
Actual benefit payments
As of December 31, 2025

Present value of defined benefit obligation	Fair value of plan assets	Net defined benefit liability (asset)
-	(706)	(706)
(1,634)	1,634	-
37,587	(48,501)	(10,914)
624	-	624
-	(805)	(805)
624	(805)	(181)
-	-	-
861	-	861
(2,436)	-	(2,436)
-	(3,308)	(3,308)
(1,575)	(3,308)	(4,883)
-	(662)	(662)
-	-	-
$36,636	$(53,276)	$(16,640)

The following significant assumptions were used to determine the present value of the defined benefit obligation:

	As of December 31,
	2025	2024
Discount rate	1.41%	1.66%
Expected rate of salary increases	3.00%	3.00%

Sensitivity analysis:

	For the years ended December 31,
	2025		2024
	Increase in defined benefit obligation	Decrease in defined benefit obligation	Increase in defined benefit obligation	Decrease in defined benefit obligation
Discount rate increased 0.5%	$-	$(1,688)	$-	$(1,913)
Discount rate decreased 0.5%	1,834	-	2,085	-
Expected salary increased 0.5%	1,796	-	2,047	-
Expected salary decreased 0.5%	-	(1,671)	-	(1,898)

For the purpose of sensitivity analysis above, the Company calculated the impact on defined benefit obligation due to a reasonable and feasible change of one single assumption (i.e. discount rate or expected salary level) with other assumptions remaining equal. Please note that the sensitivity analysis has its limitation due to the co-relation between different actuarial assumptions and the rarity that only one assumption changes at a time.

The method used in the analysis was consistent for both current and prior years.

(18) Equity

A. Common stock

As of December 31, 2025 and 2024, the Company's authorized capital was NT$10,000,000 thousand, and paid-in capital was NT$1,040,582 thousand and NT$916,517 thousand, respectively, each share at par value of NT$10, divided into 104,058 thousand and 91,652 thousand shares. Each share except treasury stock has one voting right and a right to receive dividends.

On June 24, 2025, the Company's shareholders' meeting resolved to capitalize earnings in the amount of NT$9,065 thousand. The capital increase was approved by the Board of Directors on August 19, 2025, with the base date set as September 22, 2025.

On July 22, 2025, the Board of Directors has resolved to increase capital by cash of NT$125,000 thousand. The base date was set on October 9, 2025. Paid-in capital after the capital increase was NT$1,050,582 thousand, divided into 105,058 thousand shares with a par value of NT$10.

On November 11, 2025, the Board of Directors resolved to cancel treasury shares, setting the same day as the base date for the capital reduction. A total of 1,000 thousand shares were cancelled, reducing capital stock by NT$10,000 thousand at par value, offsetting capital surplus by NT$13,605 thousand and undistributed earnings by NT$27,881 thousand. The registration of change was completed on November 28, 2025.

B. Capital surplus

	As of December 31,
	2025	2024
Additional paid-in capital	$1,415,794	$1,154,399
Difference between consideration and carrying amount of subsidiaries acquired or disposed	19,190	15,966
Share of changes in net assets of associates and joint ventures accounted for using equity method	86,773	158,302
Expired employee/ corporate bonds stock options	33,170	12,923
Conversion right	31,569	37,736
Total	$1,586,496	$1,379,326

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

C. Treasury stock

The Company held treasury stock in the amount of NT$0 and NT$51,486 thousand, divided into 0 shares and 1,000 thousand shares, respectively., as of December 31, 2025 and 2024.

The movement schedule of treasury stock for the year ended December 31, 2025 was as below (in thousand shares):

Purpose of repurchase	Beginning balance	Addition	Decrease	Ending balance
For the year ended December 31, 2025
Transfer to employees	1,000	-	1,000	-

The movement schedule of treasury stock for the year ended December 31, 2024 was as below (in thousand shares):

Purpose of repurchase	Beginning balance	Addition	Decrease	Ending balance
For the year ended December 31, 2024
Transfer to employees	1,000	-	-	1,000

According to the Securities and Exchange Law of the R.O.C., total treasury stock shall not exceed 10% of the Company's issued stock, and the total purchase amount shall not exceed the sum of the retained earnings, additional paid-in capital-premiums and realized additional paid-in capital.

In compliance with Securities and Exchange Law of the R.O.C., treasury stock should not be pledged, nor should it be entitled to voting rights or receiving dividends. In addition, the shares bought back should be transferred within five years from the date of buyback. The shares not transferred within the said time limit shall be deemed as not issued by the company, and amendment registration shall be processed.

D. Retained earnings and dividend policies

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

I. Payment of all taxes and dues.
II. Offset prior years’ operation losses.
III. Set aside 10% of the remaining amount as legal reserve.
IV. Set aside or reverse special reserve in accordance with law and regulations; and
V. The distribution of the remaining portion, if any, will be recommended by the Board of Directors and resolved in the shareholders’ meeting.

The company distributed dividends or part or all of the legal reserve and capital surplus by cash, authorized the board to conduct after more than two-thirds of the directors attended the board meeting, and with consent of more than half directors presented, and reported to the shareholders meeting.

The Company’s dividend policy shall be determined pursuant to the factors, such as the investment environment, capital requirement, domestic and overseas competition environment, current and future business development plan, shareholders’ interests and long-term financial planning. The distribution of shareholders’ dividend shall be not lower than 10% of the distributable current-year earnings. However, the shareholders may resolve not to distribute dividends if the accumulated earnings were lower than 10% of the paid-in capital. The dividend can be distributed by cash, stock or both while 0%~90% of total dividends shall be in stock and 10%~100% of total dividends shall be in cash.

The Company operates in the industry with rapid change and the Company’s life cycle is currently at the growing stage. As the result, the company’s dividend payout policy is set in consideration of the capital needs, long-term financial plan and the potential growth of earnings which fulfills the shareholders’ requirement of cash flows. As the result, the Board of Directors determine the distribution plan and report to the Shareholder’s meeting every year.

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

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

The FSC issued Order No. Jin-Guan-Cheng-Fa-1090150022 on March 31, 2021, which sets out the following provisions for compliance:

On a public company's first-time adoption of the IFRS, for any unrealized revaluation gains and cumulative translation adjustments (gains) recorded to shareholders' equity that the company elects to transfer to retained earnings by application of the exemption under IFRS 1, the company shall set aside special reserve. For any subsequent use, disposal or reclassification of related assets, the Company can reverse the special reserve by the proportion and transfer to retained earnings.

The Company did not incur any special reserve upon the first-time adoption of the IFRS.

The appropriations of earnings for the years 2025 and 2024 were approved through the Board of Directors' meetings and shareholders' meetings held on March 10, 2026 and June 24, 2025, respectively. The details of the distributions are as follows:

	Appropriation of earnings		Dividend per share (in NT$)
	2025	2024	2025	2024
Legal reserve	$-	$2,113
Special reserve	44,175	10,478
Stock dividends	-	9,065	$-	$0.1
Cash dividend	-	9,065	$-	$0.1

Please refer to Note 6(23) for details on employees' compensation and remuneration to directors and supervisors.

E. Non-controlling interests

	For the years ended December 31,
	2025	2024
Beginning balance	$308,506	$212,178
Net gain attributable to NCIs	43,209	30,875
Difference between consideration and carrying amount of subsidiaries acquired or disposed	(32,663)	93,097
Failure to subscribe for new shares issued by the subsidiary with capital increase in proportion to shareholding	-	(15,789)
Warrants issued by the subsidiary	1,900	113
Dividend distribution of the subsidiary	-	(12,947)
Other comprehensive income in non-controlling interests:
Exchange differences on translation	(55)	979
Total	$320,897	$308,506

(19) Share-based payment plans

Certain employees of the Group are entitled to share-based payment as part of their remunerations; services are provided by the employees in return for the equity instruments granted. These plans are accounted for as equity-settled share-based payment transactions.

Share-based payment plan for employees of the subsidiaries

On October 14, 2019, the Welltech Energy Inc., a subsidiary of the Company, was authorized to issue employee stock options. Each unit entitles an optionee to subscribe for 1,000 common shares of Welltech Energy Inc. Settlement upon the exercise of the option will be made through the issuance of new shares by Welltech Energy Inc. The optionee may exercise the options in accordance with certain schedules as prescribed by the plan starting one year from the grant date. The validity of these stock option certificates would expire on December 31, 2024.

The information related to the aforementioned stock-based compensation plan was as follows:

The date of the stock option certificate is given	Total issued unit	Executing price of per unit (NT$)
2020.07.07	1,455	NT$10
2021.03.22	876	NT$10

(A) The following table lists the inputs to the model used for the plan are as follows:

	July 2020	March 2021
Expected volatility (%)	42.45%	38.51%
Risk-free interest rate (%)	0.2478%	0.1871%
Expected duration of executing the options 100% (year)	4 years and 6 months	3 years and 8 months
Option pricing model	Black-Scholes	Black-Scholes

The expected life of the share options is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.

(B) The following table contains further details on the aforementioned share-based payment plan:

	2024
	Number of share options outstanding	Weighted average exercise price of share options (NT$)
Outstanding at beginning of period	295	$10
Grand	-	-
Exercised	-	-
Forfeited	(295)	-
Outstanding at end of period	-
Exercisable at end of period	-
Weighted average fair value of the share option given in the period		$-

(D) The expense recognized for employee services received during the years ended December 31, 2024, is shown in the following table:

	2024
Total expense arising from equity-settled share-based payment transactions (Equity-settled share-based payment)	$-

On November 17, 2023, the Ritwin Corporation, a subsidiary of the Company, was authorized to issue employee stock options plan for employees of Ritwin Corporation and its subsidiary, Welltech Energy Inc. Each unit entitles an optionee to subscribe for 1 common shares of Ritwin Corporation. Settlement upon the exercise of the option will be made through the issuance of new shares by Ritwin Corporation. The optionee may exercise the options in accordance with certain schedules as prescribed by the plan starting one year from the grant date. The validity of these stock option certificates would expire on July 31, 2029.

The information related to the aforementioned stock-based compensation plan was as follows:

The date of the stock option certificate is given	Total issued unit	Executing price of per unit (NT$)
2024.08.01	300,000	$50

(A) The following table lists the inputs to the model used for the plan are as follows:

	August 2024
Expected volatility (%)	45.99% ~ 47.88%
Risk-free interest rate (%)	1.4273% ~ 1.4688%
Expected duration of executing the options 100% (year)	3~4 years
Weighted average stock price	$45.56
Option pricing model	Black-Scholes

(B) The following table contains further details on the aforementioned share-based payment plan:

	2025		2024
	Number of share options outstanding	Weighted average exercise price of share options (NT$)	Number of share options outstanding	Weighted average exercise price of share options (NT$)
Outstanding at beginning of period	283,000	$50	-	$-
Grand	-	-	300,000	50
Exercised	(52,000)	50	-	-
Forfeited	(21,000)	50	(17,000)	50
Outstanding at end of period	210,000	$50	283,000	$50
Exercisable at end of period	20,000		-
Weighted average fair value of the share option given in the period		$-		$13.32

(C) The information of the outstanding share options of the aforementioned share-based payment plan as of December 31, 2025 and 2024 was listed in the table below:

| 2025.12.31
Given on August 1, 2024 | Range of exercise price
NT$50 | Weighted average remaining contractual life (Year)
3.58 year |
| --- | --- | --- |
| 2024.12.31
Given on August 1, 2024 | Range of exercise price
NT$50 | Weighted average remaining contractual life (Year)
4.58 year |

(D)The expense recognized for employee services received during the years ended December 31, 2025 and 2024, is shown in the following table:

	2025	2024
Total expense arising from equity-settled share-based payment transactions	$2,524	$290
(Equity-settled share-based payment)

Share-based payment plan for employees of the parent company

On April 9, 2024, the Board of Directors resolved to increase cash capital and reserve 1,700 thousand shares for employees to subscribe at an issue price of NT$ 30 per share.

The fair value of the stock options is measured based on the given date.

(A) The following table contains further details on the aforementioned share-based payment plan:

	2024
	Number of share options outstanding	Weighted average exercise price of share options (NT$)
Outstanding at beginning of period	-	$-
Grand	1,700,000	$30
Exercised	(803,114)	$30
Forfeited	(896,886)	$30
Outstanding at end of period	-
Weighted average fair value of the share option given in the period	$4.55
Weighted average share price of the share rights granted in the period	$35.75

(B) The expense recognized for employee services received during the years ended December 31, 2024, is shown in the following table:

	2024
Total expense arising from equity-settled share-based payment transactions (Equity-settled share-based payment)	$7,735

On August 19, 2025, the Board of Directors resolved to increase cash capital and reserve 1,875 thousand shares for employees to subscribe at an issue price of NT$ 32 per share.

The fair value of the stock options is measured based on the given date.

(A) The following table contains further details on the aforementioned share-based payment plan:

	2025
	Number of share options outstanding	Weighted average exercise price of share options (NT$)
Outstanding at beginning of period	-	$-
Grand	1,875,000	$32
Exercised	(1,047,412)	$32
Forfeited	(827,588)	$32
Outstanding at end of period	-
Weighted average fair value of the share option given in the period	$7.50
Weighted average share price of the share rights granted in the period	$33.75

(B) The expense recognized for employee services received during the years ended December 31, 2025, is shown in the following table:

	2025
Total expense arising from equity-settled share-based payment transactions (Equity-settled share-based payment)	$14,062

(20) Operating revenue

	For the years ended December 31,
	2025	2024
Revenue from customer contracts
Sales of goods	$3,443,164	$2,180,456
Rental revenue	112,618	109,018
Interest income	2,380	-
Other operating revenue	950	9,038
Total	$3,559,112	$2,298,512

Analysis of revenue from contracts with customers during the years ended December 31, 2025 and 2024 is as follows:

A. Disaggregation of revenue

	For the years ended December 31,
	2025	2024
	Single department	Single department
Sales of goods	$3,443,164	$2,180,456
Rental revenue	112,618	109,018
Interest income	2,380	-
Others	950	9,038
Total	$3,559,112	$2,298,512
The timing for revenue recognition:
At a point of time	$3,444,114	$2,189,494
Recognized over time	114,998	109,018
Total	$3,559,112	$2,298,512

B. Contract balances

(a) Contract assets – current

	December 31, 2025	December 31, 2024	January 1, 2024
Sales of goods	$5,171	$148	$-

The changes in the Group’s balances of contract assets for the years ended December 31, 2025 and 2024 were as follows:

	For the years ended December 31,
	2025	2024
The opening balance transferred to accounts receivable	$(148)	$-
Changes in the outcome of percentage-of-completion measurement	5,171	148

(b) Contract liabilities – current

	December 31, 2025	December 31, 2024	January 1, 2024
Sales of goods	$122,011	$87,927	$45,472

The changes in the Group’s balances of contract liabilities for the years ended December 31, 2025 and 2024 were as follows:

	For the years ended December 31,
	2025	2024
The opening balance transferred to revenue	$(87,927)	$(45,472)
Increase in receipts in advance during the period (excluding the amount incurred and transferred to revenue during the period)	122,011	87,927

C. Assets recognized from costs to fulfill a contract

None.

(21) Expected credit losses/(gains)

	For the years ended December 31,
	2025	2024
Operating expenses – Expected credit losses / (gains)
Contract assets	$-	$-
Accounts receivable	2,053	(1,440)
Financing lease payments receivable	-	-
Other receivables	-	-
Total	$2,053	$(1,440)

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

The Group measured the loss allowance of its contract assets and trade receivables (including accounts receivable and financing lease payments receivable) at an amount equal to lifetime expected credit losses. The assessment of the Group's loss allowance as of December 31, 2025 and 2024 were as follows:

A. The amount of allowance for losses on contract assets measured at the expected credit loss rate is as follows:

	For the years ended December 31,
	2025	2024
Total carrying amount	$5,171	$148
Expected credit loss rate	-%	-%
Allowance for losses	-	-
Carrying amount	$5,171	$148

B. The Group considered the grouping of trade receivables by counterparties' credit rating, geographical region and industry sector and its loss allowance is measured by using a provision matrix. Details are as follows:

As of December 31, 2025

	Not yet Due (Note)	Overdue						Total
		<=30 days	31-60 days	61-90 days	91-120 days	121-150 days	>=150 days
Gross carrying amount	$430,986	$116,760	$16,079	$18,343	$517,265	$17,483	$12,420	$1,129,336
Loss ratio	-%	-%	-%	-%	-%	13%	100%
Lifetime expected credit losses	-	-	-	-	-	(2,328)	(12,420)	(14,748)
Carrying amount of accounts receivable	$430,986	$116,760	$16,079	$18,343	$517,265	$15,155	$-	$1,114,588

As of December 31, 2024

	Not yet Due (Note)	Overdue						Total
		<=30 days	31-60 days	61-90 days	91-120 days	121-150 days	>=150 days
Gross carrying amount	$387,078	$190,998	$37,563	$14,436	$686	$-	$10,842	$641,603
Loss ratio	-%	-%	-%	8%	100%	-%	100%
Lifetime expected credit losses	-	-	-	(1,167)	(686)	-	(10,842)	(12,695)
Carrying amount of accounts receivable	$387,078	$190,998	$37,563	$13,269	$-	$-	$-	$628,908

Note: The Group's financing lease payments receivable were not overdue.

C. The movement in the provision for impairment of contract assets, account receivable, financial lease payments receivable and other receivables during the years ended December 31, 2025 and 2024 were as follows:

	Contract assets	Accounts receivable	Financing lease payments receivable	Other receivables
Beginning balance as of January 1, 2025	$-	$12,695	$-	$11,673
Addition for the current period	-	2,053	-	-
Write off	-	-	-	-
Ending balance as of December 31, 2025	$-	$14,748	$-	$11,673
Beginning balance as of January 1, 2024	$-	$14,135	$-	$11,673
Addition for the current period	-	(1,440)	-	-
Write off	-	-	-	-
Ending balance as of December 31, 2024	$-	$12,695	$-	$11,673

(22) Leases

A. Group as a lessee

The Group leases various properties, including land-use rights and buildings. These leases have terms of between 2 and 50 years. At the end of the lease term, there were no provisions for renewal or purchase in the lease agreement.

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

(a) Amounts recognized in the balance sheet

i. Right-of-use assets

Book value of right-of-use asset

	As of December 31,
	2025	2024
Land	$82,008	$81,111
Buildings	41,093	46,964
Other equipment	1,154	-
Total	$124,255	$128,075

The right-of-use asset of the Group increased NT$5,624 thousand and NT$94,485 thousand on December 31, 2025 and 2024, respectively.

ii. Lease liabilities

	As of December 31,
	2025	2024
Lease liabilities	$86,169	$88,612
Current	$8,471	$7,316
Non-current	$77,698	$81,296

Please refer to Note 6(24)(D) for the interest on lease liabilities recognized during the years ended December 31, 2025 and 2024, and refer to Note 12(5) Liquidity Risk Management for the maturity analysis for lease liabilities as at December 31, 2025 and 2024.

(b) Amounts recognized in the statement of comprehensive income

Depreciation charge for right-of-use assets

	For the years ended December 31,
	2025	2024
Land	$4,131	$2,604
Buildings	5,871	5,501
Other equipment	577	-
Total	$10,579	$8,105

	For the years ended December 31,
	2025	2024
The expense relating to short-term leases	$3,218	$3,701

(d) Cash outflow relating to leasing activities

	For the years ended December 31,
	2025	2024
Cash outflow for leases	$13,664	$11,374

B. Group as a lessor

Please refer to Note 6(9) for details on the Group's owned investment properties. The Group had entered leases on plants and commercial building. These leases had terms of between 1 and 5 years. These leases were classified as operating leases as they did not transfer substantially all the risks and rewards incidental to ownership of underlying assets.

The Group has entered into leases on certain machinery and equipment with lease terms between 3 and 8 years. These leases are classified as finance leases as they transfer substantially all the risks and rewards incidental to ownership of underlying assets.

	For the years ended December 31,
	2025	2024
Lease income recognized under operating leases
Income relating to fixed lease payments	$113,937	$110,761
Lease income recognized under finance leases
Finance income on the net investment in the lease	2,380	1,223
Total	$116,317	$111,984

For operating leases entered into by the Group, the undiscounted lease payments to be received and a total of the amounts for the remaining years as of December 31, 2025 and 2024 were as follows:

	As of December 31,
	2025	2024
Less than one year	$91,622	$85,817
More than one year but less than five years	39,086	108,562
More than five years	7,322	14,524
Total	$138,030	$208,903

For finance leases entered by the Group, the undiscounted lease payments to be received and a total amount for the remaining years as of December 31, 2025 and 2024, please refer to Note 6(6).

(23) Summary statement of employee benefits, depreciation and amortization by function:

| Function
Nature | For the years ended December 31, | | | | | |
| --- | --- | --- | --- | --- | --- | --- |
| | 2025 | | | 2024 | | |
| | Operating cost | Operating expenses | Total | Operating cost | Operating expenses | Total |
| Employee benefit | | | | | | |
| Salaries & wages | $136,433 | $219,030 | $355,463 | $117,471 | $198,152 | $315,623 |
| Labor and health insurance | 17,015 | 17,272 | 34,287 | 13,759 | 15,006 | 28,765 |
| Pension | 11,660 | 12,325 | 23,985 | 9,497 | 10,574 | 20,071 |
| Other employee benefit | 10,518 | 9,686 | 20,204 | 8,606 | 8,361 | 16,967 |
| Depreciation (Note) | 140,889 | 27,306 | 168,195 | 137,762 | 28,327 | 166,089 |
| Amortization | 1,121 | 2,695 | 3,816 | 587 | 1,719 | 2,306 |

Note: Including miscellaneous expenses recognized under other gains and losses.

The Articles of Association of the Company stipulate that if the Company makes profits in the current year, it shall set aside 3-10% as employees' compensation and no more than 5% as the remuneration for directors. However, if the Company has accumulated losses, it shall reserve the amount to make up for them firstly. The Company may, by a resolution adopted by a majority vote at a meeting of Board of Directors attended by two-thirds of the total number of directors, have the profit distributable as employees' compensation in the form of shares or in cash; and in addition thereto a report of such distribution is submitted to the shareholders' meeting. On June 24, 2025, the Company's shareholders' meeting resolved to amend the Articles of Association to prescribe that no less than 1.5% of the employees' compensation shall be allocated to entry-level employees. Information regarding the employees' compensation and directors' remuneration approved by the Board of Directors is available in the "Market Observation Post System" on the website of the Taiwan Stock Exchange (TWSE).

For the year December 31, 2025, the Company incurred losses, therefore, the amounts for employee remuneration and director remuneration were not estimated.

Based on profit of the year ended December 31, 2024, employees' compensation and remuneration to directors for the year ended December 31, 2024 amounted to NT$862 thousand (3%) and NT$575 thousand (2%), respectively. The aforementioned employees' compensation and remuneration to directors were recognized as employee benefit expense.

The Company's Board has determined the employees' compensation and directors' renumeration, all in cash, to be NT$862 thousand and NT$575 thousand, respectively, in a meeting held on March 10, 2025. No differences exist between the estimated amount and the actual distribution of the employees' compensation and remuneration to directors for the year ended December 31, 2024.

Information on the Board of Directors' resolution regarding the employees' compensation and remuneration to directors is available in the "Market Observation Post System" on the website of the TWSE.

(24) Non-operating incomes and expenses

A. Interest income

	For the years ended December 31,
	2025	2024
Financial assets measured at amortized cost	$10,399	$10,702
Interest on financial lease	-	1,223
Total	$10,399	$11,925

B. Other incomes

	For the years ended December 31,
	2025	2024
Rental income	$1,319	1,743
Other income	15,115	11,991
Government grant income (Note)	9,472	15,626
Dividend income	2,871	3,018
Total	$28,777	$32,378

Note: The Company recognized government grant income upon meeting all the conditions stipulated by the granting authority and upon receipt of the grant, in relation to the subsidies received under the “A+ Industrial Innovation R&D Program” sponsored by the Ministry of Economic Affairs. In addition, the Company’s subsidiary, Ritwin Corporation, recognized government grant income upon fulfillment of the relevant conditions and receipt of the grant under the “Industry Innovation Platform Program” of the Technology Development Program, also sponsored by the Ministry of Economic Affairs.

C. Other gains and losses

	For the years ended December 31,
	2025	2024
Gain on disposal of property, plant and equipment	$2,085	$18,046
Loss on disposal of investments	(454)	(5,622)
Foreign exchange gain (loss), net	(19,856)	30,593
Net gain on financial assets/liabilities at fair value through profit or loss	5,201	37,764
Loss on redemption of bonds payable	(13,687)	(5,923)
Other losses	(28,048)	(15,025)
Total	$(54,759)	$59,833

D. Finance costs

	For the years ended December 31,
	2025	2024
Interest on bank loans	$87,738	$35,614
Interest on bonds payable	1,365	7,981
Interest on lease liabilities	2,379	1,800
Imputed interest on deposit	181	163
Total	$91,663	$45,558

(25) Components of other comprehensive income

For the year ended December 31, 2025

	Arising during the period	Reclassification during the period	Subtotal	Income tax benefit (expense)	OCI, net of tax
Not reclassified to profit or loss:
Gains (losses) on remeasurements of defined benefit plans	$4,883	$-	$4,883	$-	$4,883
Unrealized gain (losses) from investments in equity instruments measured at fair value through other comprehensive income	(44,994)	-	(44,994)	-	(44,994)
Items that may subsequently be reclassified to profit or loss:
Exchange difference on translation	297	-	297	-	297
Total	$(39,814)	$-	$(39,814)	$-	$(39,814)

For the year ended December 31, 2024

	Arising during the period	Reclassification during the period	Subtotal	Income tax benefit (expense)	OCI, net of tax
Not reclassified to profit or loss:
Gains (losses) on remeasurements of defined benefit plans	$9,082	$-	$9,082	$-	$9,082
Unrealized gain (losses) from investments in equity instruments measured at fair value through other comprehensive income	(14,191)	-	(14,191)	-	(14,191)
Items that may subsequently be reclassified to profit or loss:
Exchange difference on translation	3,040	-	3,040	-	3,040
Total	$(2,069)	$-	$(2,069)	$-	$(2,069)

(26) Income tax

A. The major components of income tax expense (income) were as follows:

Income tax expense (benefit) recognized in profit or loss

	For the years ended December 31,
	2025	2024
Current income tax expense (income):
Current income tax expense	$40,466	$38,320
Adjustments in respect of current income tax of prior periods	(989)	(1,848)
Deferred tax expense (income):
Deferred tax expense (income) relating to origination and reversal of temporary differences	(2,295)	6,263
Deferred tax expense (income) relating to origination and reversal of tax loss and tax credit	(23,964)	(6,243)
Tax expense (income) recongnized in the period for previously unrecognized tax loss, tax credit or temporary difference of prior periods	-	(512)
Deferred tax expense arising from write-down or reversal of deferred tax assets	23,779	1,346
Total income tax expense	$36,997	$37,326

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

	For the years ended December 31,
	2025	2024
Accounting profit (loss) before tax from continuing operations	$27,968	$81,902
Tax payable at the enacted tax rates	5,594	16,380
Tax effect of expenses not deductible for tax purposes	549	6,913
Tax effect of deferred tax assets/liabilities	28,927	(554)
Surtax on undistributed earnings	3,414	1,549
Adjustment in respect of current income tax of prior periods	(989)	(1,848)
Other adjustments according to the tax laws	(498)	14,886
Total income tax recognized in profit or loss	$36,997	$37,326

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

For the year ended December 31, 2025

	Beginning balance as of January 1, 2025	Deferred tax income (expense) recognized in profit or loss	Deferred tax income (expense) recognized in other comprehensive income	Ending balance as of December 31, 2025
Temporary differences
Deferred tax assets
Unrealized exchange loss (gain)	$949	$(2,576)	$-	$(1,627)
Unrealized loss on inventory valuation	5,105	(525)	-	4,580
Impairment loss	1,876	-	-	1,876
Unrealized bonus of untaken leave	87	-	-	87
Share of losses of subsidiaries under equity method	13,090	1,216	-	14,306
Other	712	(221)	-	491
Expected credit losses	98	(98)	-	-
Unrealized loss on disposal of investments	7	(7)	-	-
Unrealized loss on executive retirement benefits	885	505	-	1,390
Unused tax losses	151	4,186	-	4,337
Deferred tax(expense)/ income		$2,480	$-
Net deferred tax assets/(liabilities)	$22,960			$25,440
Reflected in balance sheet as follows:
Deferred tax assets	$23,830			$27,493
Deferred tax liabilities	$(870)			$(2,053)

For the year ended December 31, 2024

	Beginning balance as of January 1, 2024	Deferred tax income (expense) recognized in profit or loss	Deferred tax income (expense) recognized in other comprehensive income	Ending balance as of December 31, 2024
Temporary differences
Deferred tax assets
Unrealized exchange loss (gain)	$1,721	$(772)	$-	$949
Unrealized loss on inventory valuation	1,168	3,937	-	5,105
Impairment loss	1,876	-	-	1,876
Unrealized bonus of untaken leave	87	-	-	87
Share of losses of subsidiaries under equity method	18,790	(5,700)	-	13,090
Other	94	618	-	712
Expected credit losses	78	20	-	98
Unrealized loss on disposal of investments	-	7	-	7
Unrealized loss on executive retirement benefits	-	885	-	885
Unused tax losses	-	151	-	151
Deferred tax(expense)/ income		$(854)	$-
Net deferred tax assets/(liabilities)	$23,814			$22,960
Reflected in balance sheet as follows:
Deferred tax assets	$24,354			$23,830
Deferred tax liabilities	$(540)			$(870)

Unused tax loss information of the Group was summarized as below:

Year of occurrence	Accumulated net operating losses	Unused balance		Expiration Year
		As of December 31,
		2025	2024
2023	$67,385	$34,875	$64,496	2033
2024	38,440	38,440	38,440	2034
2025 (Expected)	168,357	168,357	-	2035
Total	$274,182	$241,672	$102,936

Unrecognized deferred income tax assets

As of December 31, 2025 and 2024, deferred tax assets that have not been recognized amounted to NT$83,266 thousand and NT$88,547 thousand, respectively.

D. The assessment of income tax returns

As of December 31, 2025, the assessment status of income tax returns of the Group was as follows:

	The assessment of income tax returns
The Company	Assessed and approved up to 2023
Subsidiary-RitAsset Co., Ltd.	Assessed and approved up to 2023
Subsidiary-Ritwin Corporation	Assessed and approved up to 2023
Subsidiary-Welltech Energy Inc.	Assessed and approved up to 2023
Subsidiary-HanTai Energy Co., Ltd.	Assessed and approved up to 2023

(27) Earnings per share

Basic earnings per share is calculated by dividing net profit for the year attributable to the common shareholders of the parent entity by the weighted average number of common stocks outstanding during the year.

Diluted earnings per share are calculated by dividing the net profit attributable to ordinary equity holders of the parent entity (after adjusting any influences) by the weighted average number of common stocks outstanding during the year plus the weighted average number of common stocks that would be issued on conversion of all the dilutive potential common stocks into common stocks.

A. Basic earnings per share

	For the years ended December 31,
	2025	2024
Net income (loss) attributable to common shareholders of the Parent	$(52,238)	$13,701
Weighted average number of common stocks outstanding (in thousand shares)	94,435	87,517
Basic earnings (loss) per share (in NT$)	$(0.55)	$0.16

B. Diluted earnings per share

	For the years ended December 31,
	2025	2024
Net income (loss) attributable to common shareholders of the Parent	$(52,238)	$13,701
Interest expense on convertible bonds	(Note)	7,981
Valuation adjustment of financial liabilities at fair value through profit or loss	(Note)	(21,870)
Net income (loss) attributable to common shareholders of the Parent after dilution	$(52,238)	$(188)

	For the years ended December 31,
	2025	2024
Weighted average number of common stocks outstanding for basic earnings per share (in thousand shares)	94,435	87,517
Effect of dilution:
Employees’ compensation - stock (in thousand shares)	(Note)	32
Convertible bonds (in thousand shares)	(Note)	10,337
Weighted average number of common stocks outstanding after dilution (in thousand shares)	94,435	97,886
Diluted earnings per share (NT$)	$(0.55)	$-

Note: Due to the antidilutive effect from being included in the calculation of diluted earnings per share, it was excluded.

There had been no other transactions involving common shares or potential common shares between the reporting date and the date the financial statements were authorized for issue.

(28) Subsidiary that has material non-controlling interests

The financial information of the subsidiary in which the Group has material non-controlling interests is provided as follows:

Proportion of equity interest held by non-controlling interests:

Name	Country of incorporation and operation	As of December 31,
		2025	2024
Ritwin Corporation	Taiwan	35.31%	38.99%

Accumulated balances of material non-controlling interest:

	As of December 31,
	2025	2024
Ritwin Corporation	$320,897	$308,506

Profit (loss) allocated to material non-controlling interest:

	For the years ended December 31,
	2025	2024
Ritwin Corporation	$43,209	$30,875

The summarized financial information of the subsidiaries was provided below. This information was based on amounts before inter-company eliminations.

Summarized Ritwin Corporation information of profit or loss was as follows:

	For the years ended December 31,
	2025	2024
Operating revenue	$1,881,555	$494,133
Profit from continuing operation	112,032	68,278
Total comprehensive income for the period	112,329	65,734

Summarized Ritwin Corporation information of financial position was as follows:

	As of December 31,
	2025	2024
Current assets	$1,082,182	$748,925
Non-current assets	576,989	763,283
Current liabilities	576,111	674,333
Non-current liabilities	174,277	46,546

Summarized Ritwin Corporation cash flows information was as follows:

	For the years ended December 31,
	2025	2024
Operating activities	$336,493	$(681,389)
Investing activities	101,855	(9,346)
Financing activities	(164,636)	480,722
Net increase in cash and cash equivalents	273,712	(210,013)

(29) Business combination

Subsidiary—acquisition of HanTai Energy Co., Ltd.

(1) Got consideration of the subsidiary

On July 1, 2024, the Group obtained 60,000 thousand shares from the former shareholders of HanTai Energy Co., Ltd. with NT$750,000 thousand, of which NT$300,000 thousand was recorded under other payables. The Group had acquired 100% of the equity interest. Consequently, the group gained the control over the company and began to consolidate it as a subsidiary from the date of acquiring control.

The main reason the Group acquiring the HanTai Energy Co., Ltd. was to invest in an energy storage case.

(2) The fair value of identifiable assets and liabilities of the HanTai Energy Co., Ltd. at the acquisition date were as follows:

	Fair value at the acquisition date
Assets
Cash and cash equivalents	$599,245
Current income tax assets	37
Prepayments	22,219
Right-of-use assets	42,021
Other non-current assets	456
Total	663,978
Liabilities
Other payables	28,493
Lease liabilities	42,021
Total	70,514
Total amount on fair value of net identifiable assets	$593,464
Goodwill of the HanTai Energy Co., Ltd. was as follows:
Purchase consideration	$450,000
Add : recognized on other payables related accounts	300,000
Less : fair value of identifiable asset	(593,464)
Intangible assets - Right to use feeder lines	$156,536
Cash consideration
Cash flows on acquisition:
Net cash acquired with the subsidiary	$599,245
Cash paid (Note)	(750,000)
Net cash outflow	$(150,755)

Note: As of December 31, 2025 and 2024, the Group had paid NT$450,000 thousand in cash, with the remaining investment amount of NT$300,000 thousand recorded under other payables.

(3) Information on the planned results of business operations

From the date of acquisition (July 1, 2024) to December 31, 2024, the HanTai Energy Co., Ltd. had generated operating revenue and net loss after tax for the Group amount to NT$0 and NT$(4,273) thousand, respectively. If consolidated at the beginning of the year, the operating revenue generated would be NT$0 and the net loss after-tax would be NT$(5,451) thousand.

(30) Change in ownership equity of subsidiaries

Acquiring current shares issued by the subsidiary

From April to December 2025, the subsidiary Ritwin Corporation additionally acquired 3.66% of the voting shares of Welltech Energy Inc. The cash consideration paid to non-controlling interest shareholders amounted to NT$104,192 thousand. The net asset book value of Ritwin Corporation (initial acquisition cost less goodwill) amounted to NT$908,783 thousand. The additional acquisition of equity in Ritwin Corporation included the decrease in non-controlling interests and the cumulative adjustments of other comprehensive income adjustments as follows:

The Group paid cash consideration to non-controlling shareholders	$104,192
The increase (decrease) in non-controlling interests.	(32,663)
Difference recognized in capital surplus or retained earning within equity	$71,529

Selling the subsidiary shares

During November and December 2024, the Group sold 11.77% of the voting shares of Ritwin Corporation. A cash consideration of NT$240,800 thousand was acquired from the non-controlling interest shareholders. The carrying amount of sold Ritwin Corporation’s stock equity book amount (excluding goodwill on the original acquisition) was NT$93,097 thousand. Following is a schedule of increase(decrease) amount of reduced relevant equity of Ritwin Corporation including changes in non-controlling interests:

Cash consideration acquired from non-controlling shareholders	$240,800
The increase (decrease) in non-controlling interests	93,097
Difference recognized in capital surplus or retained earning within equity	$147,703

Conducting shares conversion and issuing new shares according to Enterprise Mergers and Acquisitions Law

On July 1, 2024, Ritwin Corporation conducted shares conversion and issued new shares to acquire all the shares of Welltech Energy Inc., resulting a reduction of the Group’s ownership to 72.78%. The net assets of Ritwin Corporation (original acquisition cost, excluding goodwill) were NT$449,283 thousand. and the related equity decrease of Ritwin Corporation included a decrease in non-controlling interests was as follows:

Cash capital increase the Group received by shares conversion	$-
Increase (decrease) in non-controlling equity	(15,789)
Difference recognized in capital surplus or retained earning within equity	$15,789

Subsidiary derecognized

Cashido Corporation underwent dissolution and liquidation for the year ended December 31, 2025; therefore, the Company considered the subsidiary was disposed of in full equity interests.

(1) The book values of assets and liabilities of Cashido Corporation are as follows:

	Amount
Current assets and non-current assets
Cash and cash equivalents	$852
Other receivables	663
Prepayments	186
Intangible assets	341
Current liabilities
Other payables	(201)
Net assets derecognized	$1,841

(2) Losses of disposing of the subsidiary

	Amount
Fair value of the remaining investment	$1,764
Less: Carrying amount of investment on the day control was lost	(1,841)
Loss on disposal of subsidiary investment	$(77)

7. RELATED PARTY TRANSACTIONS

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

Name and nature of relationship of the related parties

Related parties	Relationship
Ritek Corporation	Ultimate parent company
U-tech Media Corporation	Other related party
Kunshan Hutek Co., Ltd.	Other related party
Aimcore Technology Co., Ltd.	Other related party
Ritfast Corporation	Other related party
Kunshan Proteck Corporation	Other related party
Ricare Corporation	Other related party
Formosa Sun Energy Corp.	Other related party
Finesil Technology Inc.	Other related party
Prorit Corporation	Other related party
Han-win Technology Co., Ltd.	Other related party
Ikari Coffee Co., Ltd.	Other related party
Dollars Cultural & Creative Company Limited	Other related party
Jinguoyuye Catering Co., Ltd.	Other related party
Ink Design Space Co., Ltd.	Other related party
RITEK Solar CORP.	Other related party
Mu Jin Investment Co., Ltd.	Other related party
Sun Moon Stars International Co., Ltd.	Other related party
RITEK VIETNAM CO., LTD.	Other related party
RiTGRID LLC	Other related party

Significant transactions with related parties

A. Sales

	For the years ended December 31,
	2025	2024
Parent company	$1,055	$169
Han-win Technology Co., Ltd.	2,078	4,911
Other related parties	23	7
Total	$3,156	$5,087

The sales price to related parties was determined based on normal market terms. The collection terms for related parties were 90 days after monthly closing while 30~90 days after monthly closing for third parties.

B. Purchases

	For the years ended December 31,
	2025	2024
Parent company	$6	$8
Kunshan Hutek Co., Ltd.	34,782	42,953
Other related parties	6,652	2,869
Total	$41,440	$45,830

As the specifications of merchandise purchased from the related parties were different from those from other third-party companies, the purchasing prices were not comparable. Payment terms for related parties were 90 days after monthly closing while 30~90 days after monthly closing for third parties.

C. Accounts receivable-related parties

	As of December 31,
	2025	2024
Parent company	$589	$410
Other related parties	66	1,933
Total	655	2,343
Less: loss allowance	-	-
Total	$655	$2,343

D. Financing lease payments receivable-related parties (Current and Non-current)

	As of December 31,
	2025	2024
Parent company	$3,996	$6,660
Less: unearned finance income	(50)	(136)
Total	$3,946	$6,524
Current	$2,620	$2,578
Non-current	$1,326	$3,946

The Group leased machinery which carrying amount was NT$19,990 thousand to parent company by financial lease in July 2019. The leasing term was eight years and paid NT$222 (without VAT) thousand monthly. Please refer to Note 6(6).

E. Other receivables-related parties

	As of December 31,
	2025	2024
Parent company	$-	$791
Formosa Sun Energy Corp.	-	33,760
Other related parties	33	114
Total	$33	$34,665

F. Prepayment

	As of December 31,
	2025	2024
Parent company	$113	$-
Kunshan HuteK Co., Ltd.	-	$31,795
Total	$113	$31,795

G. Account payables-related parties

	As of December 31,
	2025	2024
Kunshan HuteK Co., Ltd.	$91,587	$167,224
Other related parties	850	1,528
Total	$92,437	$168,752

H. Other payables-related parties (Excluding payables on equipment)

	As of December 31,
	2025	2024
Parent company	$4,537	$4,450
Other related parties	2,515	2,369
Total	$7,052	$6,819

I. Temporary receipts (recorded under other current liabilities)

	As of December 31,
	2025	2024
Other related parties	$-	$954

J. Contract liabilities

	As of December 31,
	2025	2024
Other related parties	$–	$2

K. Lease-related parties

Rental income

	For the years ended December 31,
	2025	2024
Parent company	$162	$-
AimCore Technology Co., Ltd.	2,386	3,040
Other related parties	1,638	114
Total	$4,186	$3,154

Interest income

	For the years ended December 31,
	2025	2024
Parent company	$86	$127

L. Operating expense

Related parties	Nature	For the years ended December 31,
		2025	2024
Parent company	Information system maintenance and other expense etc.	$6,664	$5,475
Other related parties	Manpower support and other expense etc.	5,971	3,925
Total		$12,635	$9,400

M. Other income

	For the years ended December 31,
	2025	2024
Parent company	$564	$329
Other related parties	564	329
Total	$1,128	$658

N. Transaction of assets

(a) Details of property transaction with related parties were as follows:

Related parties	Item	Purchase price	Reference basis for price decision
2025
Formosa Sun Energy Corp.	Sale of Machinery	$18,288	Bidding

The Group recognized a gain of NT$1,947 thousand from the sale of machinery and equipment to related parties in 2025.

Related parties	Item	Purchase price	Reference basis for price decision
2024
Other related parties	Purchase of Machinery	$700	Bidding
Formosa Sun Energy Corp.	Sale of Machinery	$90,524	Bidding
Other related parties	Sale of shares in Ritwin Corporation	$14,000	Bidding and reference net asset value per share

The Group recognized a gain of NT$24,615 thousand from the sale of machinery and equipment to related parties in 2024.

(b) The balance of property transaction was as follows:

Prepayment in equipment (recorded under other non-current assets)

	As of December 31,
	2025	2024
Parent company	$79	$79

	As of December 31,
	2025	2024
Other related parties	$30,808	$32,154

O. Salaries and rewards to key management of the Group

	For the years ended December 31,
	2025	2024
Short-term employee benefits	$37,577	$35,470
Post-employee benefits	739	640
Share-based payment	85	11
Total	$38,401	$36,121

8.ASSETS PLEDGED AS COLLATERAL

The following assets of the Group were pledged as collaterals:

Items	Carrying amount as of December 31,		Secured liabilities
	2025	2024
Property, plant and equipment-land	$586,843	$867,901	Long-term secured loans
Property, plant and equipment-depreciated assets	445,092	694,275	Long-term secured loans
Investment property	743,071	251,403	Long-term secured loans
Stocks — HanTai Energy Co., Ltd.	1,718,873	-	Long-term secured loans (Note)
Financial assets measured at amortized cost-current	2,606	7	Long-term secured loans
Financial assets measured at amortized cost-current	1,500	1,500	Short-term loan
Financial assets measured at amortized cost-non-current	39,303	58,419	Security deposit to custom authority and contract bond
Financial assets measured at amortized cost-non-current	49,359	18,450	Long-term secured loans
Total	$3,586,647	$1,891,955

Note: Referring to the shares of HanTai Energy Co., Ltd. held by the Company, and the amount represented the carrying amount of the shares of HanTai Energy Co., Ltd held by the Company.

9.SIGNIFICANT CONTINGENCIES AND UNRECOGNIZED CONTRACT COMMITMENTS

The Group signed a construction contract with Company A on May 15, 2024, for the development of the 60MW energy storage system project in Longjing, Taichung. The total contract price for the project is NT$3,000,000 thousand (excluding tax). As of December 31, 2025, the Group has paid NT$2,186,000 thousand (excluding tax) for the project, which is recorded under property, plant, and equipment – construction in progress.
On July 2, 2024, the Company’s subsidiary, HanTai Energy Co., Ltd., entered into an operations and maintenance service agreement with another subsidiary, Ritwin Corporation. Under this agreement, Ritwin Corporation is commissioned to perform operations and maintenance services for the DC-side hardware and power conversion system (PCS) of the 60MW energy storage system project located in Longjing, Taichung. The contract period is 15 years, commencing from the date on which the energy storage system becomes officially operational and eligible to participate in the electricity bidding process. The contract service fee is divided into annual service fees and monthly service fees. The annual service fee is NT$20,500 thousand (excluding tax) per year for years 1 through 10, and NT$18,000 thousand (excluding tax) per year for years 11 through 15. The monthly service fee is calculated as 1% (excluding tax) of the auxiliary service revenue generated by the energy storage system through Taipower’s electricity trading platform, after deducting energy loss expenses. The monthly service fee is settled and collected on a quarterly basis.
On May 15, 2024, the Group entered into a long-term service and qualified trader service agreement with Company A, under which Company A is commissioned to provide long-term operations and maintenance services and qualified trader services for the hardware components excluding the DC-side and PCS components of the 60MW energy system storage project located in Longjing, Taichung. The service fee under the agreement consists of annual service fees and monthly service fees. The annual service fee is NT$16,275 thousand (excluding tax) per year for years 1 through 10, and NT$18,900 thousand (excluding tax) per year for years 11 through 15. The annual service fee is settled on a quarterly basis. The monthly service fee is calculated as 1.3% (excluding tax) of the auxiliary service revenue earned by the energy storage system through participation in the electricity trading platform, after deducting energy loss expenses. The monthly service fee is settled and collected on a monthly basis.
On September 11, 2025, the Group entered into a product sales agreement with Company A, under which Company B agreed to purchase energy storage battery systems. The total contract value of the product sales agreement is NT$35,973 thousand (excluding tax). As of December 31, 2025, the Group has delivered part of the products.
LOSSES DUE TO MAJOR DISASTERS

None.

11. SIGNIFICANT SUBSEQUENT EVENT

In order to meet the funding needs, on January 29, 2026, the directors of the subsidiary HanTai Energy Co., Ltd. resolved to issue 57,000 thousand new shares of NT$10 each in cash and an issue price of NT$10 per share. In accordance with Article 267 of the Company Act, 10% of the total number of new shares issued, amounting to 5,700 thousand shares, are reserved for subscription by the Company’s employees on a preferential basis. The base date for the capital increase is February 4, 2026.
On February 10, 2026, the Board of Directors of the subsidiary RitAsset Co., Ltd. resolved to handle a capital decrease and refund of share capital to shareholders in the amount of NT$60,000 thousand. The base date for the capital decrease was February 26, 2026.

12. OTHERS

(1) Categories of financial instruments

Financial assets

	As of December 31,
	2025	2024
Financial assets at fair value through profit or loss:
Measured at fair value through profit or loss	$16,289	$23,366
Financial assets at fair value through OCI	297,208	150,578
Financial assets measured at amortized cost:
Cash and cash equivalents (Cash on hand not included)	1,318,213	1,570,916
Financial assets measured at amortized cost	204,498	108,445
Accounts receivable, net (related parties included)	1,040,299	594,483
Other receivables (related parties included)	27,145	75,754
Financing lease payments receivable-related parties	74,289	34,425
Subtotal	2,664,444	2,384,023
Total	$2,977,941	$2,557,967

Financial liabilities

	As of December 31,
	2025	2024
Financial liabilities at fair value through profit or loss:
Financial liability held for trading	$-	$39
Financial liabilities at amortized cost:
Short-term loans	334,426	535,000
Notes payable	5,428	584
Trade and other payables (related parties included)	970,797	1,448,411
Bonds payable (including current portion with maturity less than 1 year)	81,710	376,601
Long-term loans (including current portion with maturity less than 1 year)	3,647,140	1,627,592
Lease liabilities	86,169	88,612
Subtotal	5,125,670	4,076,800
Total	$5,125,670	$4,076,839

(2) Financial risk management objectives and policies

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

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

(3) Market risk

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

In practice, it is rarely the case that a single risk variable will change independently from other risk variables. There is usually interdependencies between risk variables. However, the sensitivity analysis disclosed below does not take into account the interdependencies between risk variables.

Foreign currency risk

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

The Group has certain foreign currency receivables to be denominated in the same foreign currency as certain foreign currency payables, therefore natural hedge is achieved. The Group also uses forward contracts to hedge the foreign currency risk on certain items denominated in foreign currencies. Hedge accounting is not applied as they did not qualify for hedge accounting criteria.

The foreign currency sensitivity analysis of the possible change in foreign exchange rates on the Group's profit/loss and equity is performed on significant monetary items denominated in foreign currencies as of the reporting period-end. The Group's foreign currency risk is mainly related to volatility in the exchange rates of US dollars. The information of the sensitivity analyses is as follows:

When NTD appreciates/depreciates against USD by 1%, the net income (loss) for the years ended December 31, 2025 and 2024 would increase/decrease by NT$451 thousand and decrease/increase NT$393 thousand, respectively.

125

Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group's exposure to interest rate risk relates primarily to the Group's investments with variable interest rates and bank borrowings with fixed interest rates and variable interest rates, which are all categorized as bank borrowings and receivables.

The interest rate sensitivity analysis is performed on items exposed to interest rate risk as of the end of the reporting period and presumed to be held for one accounting year, including investments and bank borrowing with variable interest rates. If interest rate increases/decreases by 1%, the net income (loss) for the years ended December 31, 2025 and 2024 would decrease /increase by NT$2,459 thousand and NT$483 thousand, respectively.

Equity price risk

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

At the reporting date, a change of 1% in the price of the listed equity securities measured at fair value through profit or loss could increase/decrease the Group's profit for the years ended December 31, 2025 and 2024 by NT$163 thousand and NT$204 thousand, respectively.

At the reporting date, a change of 1% in the price of the listed equity securities and unlisted equity securities measured at fair value through other comprehensive income could have an impact on NT$3,168 thousand and NT$1,506 thousand of the equity attributable to the Group for the years ended December 31, 2025 and 2024, respectively.

126

(4) Credit risk management

Credit risk is the risk that counterparty will not meet its obligations under a contract and result in a financial loss. The Group is exposed to credit risk from operating activities (primarily for accounts and notes receivable) and financing activities (primarily for bank deposits and other financial instruments).

Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit risk of all customers are assessed based on a comprehensive review of the customers’ financial status, credit ratings from credit institutions, past transactions, current economic conditions and the Group’s internal credit ratings. The Group also employs some credit enhancement instruments (e.g. prepayment or insurance) to reduce certain customers’ credit risk.

As of December 31, 2025 and 2024, receivables from the top ten customers were accounted for 91% and 86% of the Group’s total accounts receivable, respectively. The concentration of credit risk is relatively not significant for the remaining receivables.

Credit risk from balances with banks, fixed-income securities and other financial instruments is managed by the Group’s finance division in accordance with the Group’s policy. The counterparties that the Group transacts with are determined by internal control procedures. They are banks with fine credit ratings and financial institutions, corporate and government agencies with investment-grade credit ratings. Thus, there is no significant default risk. Consequently, there is no significant credit risk for these counter parties.

The Group adopted IFRS 9 to assess the expected credit losses. Except for the loss allowance of trade receivables is measured at lifetime expected credit losses, the remaining debt instrument investments which are not measured at fair value through profit or loss, low credit risk for these investments is a prerequisite upon acquisition and by using their credit risk as a basis for the distinction of categories.

127

(5) Liquidity management

The Group maintains financial flexibility through the use of cash and cash equivalents, highly-liquid marketable securities, bank loans and bonds payable, etc. The table below summarizes the maturity profile of the Group's financial liabilities based on the contractual undiscounted payments and contractual maturity. The payment amount includes the contractual interest. The undiscounted interest payment relating to borrowings with variable interest rates is extrapolated based on the estimated yield curve as of the end of the reporting period.

Non-derivative financial instruments

	Less than					More than
	1 year	1 to 2 years	2 to 3 years	3 to 4 years	4 to 5 years	5 years	Total
As of December 31, 2025
Loans	$2,001,953	$1,244,471	$249,763	$244,355	$96,810	$385,081	$4,222,433
Payables	970,797	-	-	-	-	-	970,797
Bonds Payable	-	82,800	-	-	-	-	82,800
Lease liability	10,741	10,150	9,854	9,854	9,854	49,347	99,800
As of December 31, 2024
Loans	$968,509	$341,743	$232,919	$183,748	$179,843	$449,790	$2,356,552
Payables	1,448,411	-	-	-	-	-	1,448,411
Bonds Payable	394,062	-	-	-	-	-	394,062
Lease liability	9,571	9,571	9,571	9,571	9,571	58,773	106,628

(6) Reconciliation of liabilities arising from financing activities

Reconciliation of liabilities for the year ended December 31, 2025:

	Short-term loans	Long-term loans	Bonds payable	Lease liability	Other non-current liability	Total liabilities from financing activities
As of January 1, 2025	$535,000	$1,627,592	$376,601	$88,612	$36,589	$2,664,394
Cash flows	(200,574)	2,019,548	(309,951)	(10,446)	3,216	1,501,793
Non-cash changes	-	-	15,060	8,003	-	23,063
As of December 31, 2025	$334,426	$3,647,140	$81,710	$86,169	$39,805	$4,189,250

Reconciliation of liabilities for the year ended December 31, 2024:

	Short-term loans	Long-term loans	Bonds payable	Lease liability	Other non-current liability	Total liabilities from financing activities
As of January 1, 2024	$630,000	$994,896	$483,665	$-	$34,651	$2,143,212
Cash flows	(95,000)	632,696	(122,356)	(7,673)	1,938	409,605
Non-cash changes	-	-	15,292	96,285	-	111,577
As of December 31, 2024	$535,000	$1,627,592	$376,601	$88,612	$36,589	$2,664,394

(7) Fair values of financial instruments

A. The evaluation methods and assumptions applied in determining the fair value

Fair value is the price that would be received to sell a financial asset or paid to transfer a financial liability in an orderly transaction between willing market participants (not under coercion or liquidation). The following methods and assumptions are used by the Group in estimating the fair values of financial assets and liabilities:

a. The carrying amount of cash and cash equivalents, receivables, payables and other current liabilities approximate their fair value due to their short maturities.

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

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

B. Fair value of financial instruments measured at amortized cost

Other than the item is listed in the table below, the carrying amount of the Group's financial assets and liabilities measured at amortized cost approximate their fair value:

	Carrying amount as of Dec. 31,
	2025	2024
Financial liabilities
Bonds payable	$81,710	$376,601
	Fair value as of Dec. 31,
	2025	2024
Financial liabilities
Bonds payable	$81,152	$371,158

C. Fair value measurement hierarchy for financial instruments

Please refer to Note 12(9) for fair value measurement hierarchy for financial instruments of the Group.

(8) Derivative financial instruments

As of December 31, 2025 and 2024, the relevant information of the Group's holdings of derivatives that did not meet the requirements of hedging accounting and have not yet expired are as follows:

Embedded derivatives

The embedded derivatives arising from issuing convertible bonds have been separated from the host contract and carried at fair value through profit or loss. Please refer to Note 6(14) and Note 6(15) for further information on this transaction.

(9) Fair value measurement hierarchy

A. Fair value measurement hierarchy

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

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

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

Level 3 – Unobservable inputs for the asset or liability.

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

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

The Group did not have assets that were measured at fair value on a non-recurring basis. Fair value measurement hierarchy of the Group's assets and liabilities measured at fair value on a recurring basis was as follows:

As of December 31, 2025

	Level 1	Level 2	Level 3	Total
Asset measured at fair value:
Measured at fair value through profit or loss
Stock	$16,289	$-	$-	$16,289
Measured at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	220,939	-	76,269	297,208
Total	$237,228	$-	$76,269	$313,497

As of December 31, 2024

	Level 1	Level 2	Level 3	Total
Asset measured at fair value:
Measured at fair value through profit or loss
Stock	$20,402	$-	$-	$20,402
Fund	2,964	-	-	2,964
Measured at fair value through other comprehensive income
Equity instrument measured at fair value through other comprehensive income	69,690		80,888	150,578
Total	$93,056	$-	$80,888	$173,944

Liability measured at fair value:

Measured at fair value through profit or loss – Current

Embedded derivatives

$ - $ - $ 39 $ 39

Transfers between Level 1 and Level 2 during the period

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

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

The Group's recurring fair value measurements of assets classified as Level 3 in the fair value hierarchy for the years ended December 31, 2025 and 2024 showed no changes from the beginning to the end of the period. Additionally, the reconciliation of the recurring fair value measurements of liabilities classified as Level 3 for the years ended December 31, 2025 and 2024 is presented as follows:

	Liabilities
	Derivatives at fair value through profit or loss
As of January 1, 2025	$39
Total gains and losses recognized for the year ended December 31, 2025:
Amount recognized in profit or loss (presented in "other gains and losses")	(8)
Disposal from January 1 to December 31, 2025	(31)
As of December 31, 2025	$-
	Liabilities
	Derivatives at fair value through profit or loss
As of January 1, 2024	$23,252
Total gains and losses recognized for the year ended December 31, 2024:
Amount recognized in profit or loss (presented in "other gains and losses")	(23,213)
As of December 31, 2024	$39

Information on significant unobservable inputs to valuation

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

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets:
At fair value through
other
comprehensive
income
Shares	Market approach	Discount for lack of liquidity	20%	The higher the degree of illiquidity, the lower the estimated fair value	When illiquidity increase/decrease 10%, equity of the Company would decrease/increase NT$7,627 thousand
Financial liability:
At fair value through
profit or loss
Embedded derivatives	A binomial-tree model for convertible bond pricing	Volatility	44.93%	The higher the volatility, the higher the fair value of the embedded derivatives	1% increase (decrease) in the volatility would result in the Company's profit or loss by increase/decrease NT$0

	Valuation techniques	Significant unobservable inputs	Quantitative information	Relationship between inputs and fair value	Sensitivity of the input to fair value
Financial assets:
At fair value through other comprehensive income
Shares	Market approach	Discount for lack of liquidity	20%	The higher the degree of illiquidity, the lower the estimated fair value	When illiquidity increase/decrease 10%, equity of the Group would decrease/increase NT$8,089 thousand
Financial liability:
At fair value through profit or loss
Embedded derivatives	A binomial-tree model for convertible bond pricing	Volatility	52.53%	The higher the volatility, the higher the fair value of the embedded derivatives	1% increase (decrease) in the volatility would result in the Group’s profit or loss by increase NT$78 thousand and decrease NT$39 thousand

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

	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value but for which the fair value is disclosed:
Investment properties (please refer to Note 6(9))	$-	$-	$1,625,101	$1,625,101
Financial liabilities not measured at fair value but for which the fair value is disclosed:
Bonds payable (please refer to Note 12(7))	$-	$-	$81,152	$81,152
As of December 31, 2024
	Level 1	Level 2	Level 3	Total
Financial assets not measured at fair value but for which the fair value is disclosed:
Investment properties (please refer to Note 6(9))	$-	$-	$314,971	$314,971
Financial liabilities not measured at fair value but for which the fair value is disclosed:
Bonds payable (please refer to Note 12(7))	$-	$-	$371,158	$371,158

(10) Significant assets and liabilities denominated in foreign currencies (in thousand dollars)

As of Dec. 31,

	2025			2024
	Foreign Currencies	Exchange Rate	NTD	Foreign Currencies	Exchange Rate	NTD
Financial assets
Monetary items:
USD	$14,223	31.37	$446,185	$15,024	32.72	$491,556
Financial liabilities
Monetary items:
USD	$15,713	31.27	$491,324	$13,818	32.73	$452,238

Foreign exchange gain/loss on monetary financial assets and liabilities is shown below.

Foreign currency resulting in exchange gain or loss	For the year ended December 31,
	2025	2024
USD	$(58,015)	$(1,870)
Other	38,159	32,463
Total	$(19,856)	$30,593

The above information is disclosed based on the carrying amount of foreign currency (after being converted to functional currency).

(11) Capital management

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

13. ADDITIONAL DISCLOSURES

(1) Information on significant transactions

A. Financing provided to others: Please refer to Attachment 1.

B. Endorsement/Guarantee provided to others: Please refer to Attachment 2.

C. Significant marketable securities held as of December 31, 2025 (excluding investments in subsidiaries, associates and joint ventures): Please refer to Attachment 3.

D. Related party transactions with purchase or sales amount of at least NT$100 million or 20 percent of the paid-in capital for the year ended December 31, 2025: None.

E. Receivables from related parties of at least NT$100 million or 20 percent of the paid-in capital as of December 31, 2025: None.

F. Intercompany relationships and significant intercompany transactions for the year ended December 31, 2025: Please refer to Attachment 7.

(2) Information on investees

A. Investees over whom the Company exercise significant influence or control (excluding investees in mainland china) as of December 31, 2025: Please refer to Attachment 4.

B. Investees over whom the Company exercises significant influence or control (excluding investees in Mainland China): Please refer to Attachment 13(1).

(a) Financing provided to others: None.

(b) Endorsement/Guarantee provided to others: Please refer to Attachment 2.

(c) Significant marketable securities held as of December 31, 2025 (excluding investments in subsidiaries, associates and joint ventures): Please refer to Attachment 3.

138

(d) Related party transactions with purchase or sales amount of at least NT$100 million or 20 percent of the paid-in capital for the year ended December 31, 2025: Please refer to Attachment 5.

(e) Receivables from related parties of at least NT$100 million or 20 percent of the paid-in capital as of December 31, 2025: Please refer to Attachment 6.

139

(3) Subsidiary-Information on investments in Mainland China: Welltech Energy Inc.

A. 1. Name of investee in China, main business, paid-in capital, method of investment, investment flows, percentage of ownership, investment gain or loss, carrying amount at the end of reporting period, inward remittance of earning or loss and the upper limit on investment in China:

(In Thousands of New Taiwan Dollars/ Foreign currencies)

Name of Investee in China	Main Business	Paid-in Capital (NT$'000)	Method of Investment (Note 1)	Accumulated Outflow of Investment from Taiwan as of Jan. 1, 2025 (NT$'000)	Investment Flows		Accumulated Outflow of Investment from Taiwan as of Dec. 31, 2025 (NT$'000)	Profit/ Loss of Investee (NT$'000)	Percentage of Ownership (Direct or Indirect Investment)	Share of Profit/Loss (NT$'000) (Note 2)	Carrying Amount as of Dec. 31, 2025 (NT$'000)	Accumulated Inward Remittance of Earnings as of Dec. 31, 2025 (NT$'000)
					Outflow (NT$'000)	Inflow (NT$'000)
Techcharm Electronics (Shanghai) Co., Ltd.	Investment holding	$153,540 (Note 4)	Note 1(2)	$46,062	$-	$-	$46,062	$(1,977) (Note 4)	100%	$(1,977) (Note 2(2)B, Note 4 and Note 5)	$29,486 (Note 2(2)B, Note 4 and Note 5)	$-
Changzhou Soaring Technology Co., Ltd.	Electronics industry, manufacturing, battery manufacturing	$422,081 (Note 4)	Note 1(2)	$153,638	$-	$-	$153,638	$(4,351) (Note 4)	100%	$(4,351) (Note 2(2)B, Note 4 and Note 5)	$58,459 (Note 2(2)B, Note 4 and Note 5)	$-

Accumulated Outflow of Investment from Taiwan to Mainland China as of Dec. 31, 2025 (NT$’000)	Investment Amounts Authorized by Investment Commission, MOEA (NT$’000)	Upper Limit on Investment in China by Investment Commission, MOEA (NT$’000)
$199,700	$199,700	$184,792

Note 1: The investment methods are divided into the following three types, just indicate the types:

(1) Go directly to the mainland for investment.

(2) Reinvest in mainland China through a third-region company.

(3) Other methods.

Note 2: Recognized in the column of share of profit or loss for the year ended December 31, 2025:

(1) If it is under preparation and there is no share of profit or loss, should be noted.

(2) The basis for recognition of share of profit or loss is divided into the following three types, should be noted:

A. Financial statements audited and certified by an international accounting firm that has a cooperative relationship with an accounting firm in the Republic of China.

B. Financial statements audited by certified public accountants of the parent company in Taiwan.

C. Other.

Note 3: Amounts shown in New Taiwan dollars.

Note 4: Amounts in foreign currencies are translated into New Taiwan dollars using the exchange rates on the balance sheet date.

Note 5: It has been written off when the consolidated financial statements are prepared.

141

End-of-period balances of related accounts payable and the purchase amounts and percentages: Please refer to Attachment 5.
End-of-period balances of related accounts receivable and the sales amounts and percentages: Please refer to Attachment 5.
Property transaction amounts and other gains/losses: None.
End-of-period balances and purposes of endorsed bills and guarantees or provided collateral: None.
Maximum balance, end-of-period balance, interest rate range, and total interest for fund financing: None.
Other transaction items that have a significant impact on the current profit or financial condition, such as service provision or receipt: Please refer to Attachment 7.
The above transaction items have been offset in the preparation of the consolidated financial statements. Please refer to Attachment 7.

14. SEGMENT INFORMATION

For management purposes, the Group had divided its operations into two reporting operating segments by considering the difference in products and services. The information was as follows:

(a) OLED product department: The segment was responsible for producing and manufacturing OLED, which were sold to electronic product manufacturers.

(b) Energy product department: The segment was responsible for electronic component assembling as well as battery manufacturing and selling to electronic product manufacturers.

Management oversaw the operating results of each business unit to make decisions on resource allocation and performance evaluation. The segment's performance was evaluated based on pre-tax income and measured consistently with the expressing in the consolidated financial statements. While income tax in the consolidated financial statements was managed on a group basis and not allocated to operating segments.

142

Information on the segment's profit or loss, assets, and liabilities should be reported as follows.

	OLED Product segment	Energy Product segment	Subtotal of reporting segment	Other segment	Adjustment and elimination	Total
Revenue
Revenue from external client	$555,779	$2,879,147	$3,434,926	$124,186	$-	$3,559,112
Interest revenue	4,211	5,171	9,382	1,017	-	10,399
Total	$559,990	$2,884,318	$3,444,308	$125,203	$-	$3,569,511
Operation income	$(173,401)	$152,668	$(20,733)	$48,701	$-	$27,968

	OLED Product segment	Energy Product segment	Subtotal of reporting segment	Other segment	Adjustment and elimination	Total
Revenue
Revenue from external client	$621,013	$1,555,575	$2,176,588	$121,924	$-	$2,298,512
Interest revenue	4,200	4,380	8,580	3,345	-	11,925
Total	$625,213	$1,559,955	$2,185,168	$125,269	$-	$2,310,437
Operation income	$(7,198)	$86,908	$79,710	$2,192	$-	$81,902

The information related to the operating segments' assets and liabilities of the Group as of December 31, 2025 and 2024 was as follows:

Assets of operating segment

	OLED Product segment	Energy Product segment	Total segment should report	Other segment	Adjustment and elimination	Total
Assets of December 31, 2025	$2,612,839	$4,773,993	$7,386,832	$1,085,539	$-	$8,472,371
Assets of December 31, 2024	$2,979,920	$3,119,888	$6,099,808	$1,012,055	$-	$7,111,863

Liabilities of operating segment

	OLED Product segment	Energy Product segment	Total segment should report	Other segment	Adjustment and elimination	Total
Liabilities of December 31, 2025	$2,736,272	$2,135,686	$4,871,958	$470,919	$-	$5,342,877
Liabilities of December 31, 2024	$2,176,597	$1,575,422	$3,752,019	$487,454	$-	$4,239,473

(1) Geographical information:

A. Revenues from external customers

	For the years ended December 31,
	2025	2024
America	$307,012	$319,458
Taiwan	2,196,017	715,712
China	903,724	1,176,014
Other countries	152,359	87,328
Total	$3,559,112	$2,298,512

Note: The revenue information above is based on the location of the customers.

B. Non-current assets

	As of December 31,
	2025	2024
Taiwan	$4,797,118	$3,459,100
China	65,983	83,230
Total	$4,863,101	$3,542,330

C. Information about major customers

	For the years ended December 31,
	2025	2024
A Customer	$1,422,260	Note 1
B Customer	427,061	720,093
C Customer	Note 1	244,821
Total	$1,849,321	$964,914

Note 1: The customer's sales accounted for less than 10% of consolidated net sales would not be disclosed.

Notes to Consolidated Financial Statements of RiTdisplay Corporation (Continued)

(Amount Expressed in Thousands of New Taiwan Dollars unless otherwise specified)

Attachment 1: Financing provided to others
(In Thousands of New Taiwan Dollars)

No. (Note 1)	Lender	Counter-party	Financial accounting account	Maximum balance for the period	Ending balance	Actual amount provided	Interest rate	Nature of financing	Amount of sales to (purchases from) counter-party	Reason for financing	Loss allowance	Collateral		Limit of financing amount for individual counter-party
												Item	value
0	RiTdisplay Corporation	Ritwin Corporation	Other receivables -related parties	$100,000	$100,000	$-	-%	Need for short term financing	$-	Business turnover	$-	-	$-	$280,860
(Note 2)	$1,123,439
(Note 2)
0	RiTdisplay Corporation	Welltech Energy Inc.	Other receivables -related parties	$100,000	$100,000	$-	-%	Need for short term financing	$-	Business turnover	$-	-	$-	$280,860
(Note 2)	$1,123,439
(Note 2)

Note 1: RiTdisplay Corporation is coded "0".
A subsidiary under the company's control is coded "1".

Note 2: For the Company lending to other companies, the lending amount shall not exceed 40% of its net equity.

The amount for lending to a single enterprise shall not exceed 10% of lender's net equity.

Notes to Consolidated Financial Statements of RiTdisplay Corporation (Continued)

(Amount Expressed in Thousands of New Taiwan Dollars unless otherwise specified)

Attachment 2: Endorsement/Guarantee provided to others
(In Thousands of New Taiwan Dollars)

NO. (Note1)	Endorsement/ Guarantee Provider	Guaranteed Party		Limits on Endorsement/ Guarantee Amount Provided to Each Guaranteed Party (Note3 and Note4)	Maximum Balance for the Period	Ending Balance	Amount Actually Drawn	Amount of Endorsement/ Guarantee secured by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Worth per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowed (Note3 and Note4)	Endorsement provided by parent company to subsidiaries	Endorsement provided by subsidiaries to parent company	Endorsement provided to entities in China
		Name	Nature of Relationship(Note2)
0	RiTdisplay Corporation	HanTai Energy Co., Ltd.	2	$2,808,597	$2,100,000	$1,200,000	$913,710	$1,300,000	42.73%	$2,808,597	Y	N	N
1	RitAsset Co., Ltd.	HanTai Energy Co., Ltd.	4	$404,925	$380,000	$380,000	$380,000	$574,500	46.92%	$809,849	N	N	N

Note 1: RiTdisplay Corporation and subsidiaries are coded as follows:
1. RiTdisplay Corporation is coded "0".
2. The subsidiaries are coded consecutively beginning from "1" in the order presented in the table above.

Note 2: The relationship between the guarantor of the endorsement and the object to be guaranteed is as follows:
1. The company with business contacts.
2. The company directly and indirectly holds more than 50% of the shares with voting rights.
3. Companies that directly and indirectly holds more than 50% of the shares of the company with voting rights.
4. The company directly and indirectly holds more than 90% of the shares with voting rights.
5. Where a public company fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry.
6. A company whose co-investment relationship is endorsed by all shareholders in proportion to their shareholding ratio.
7. The performance guarantee of the preconstruction real estate contract between the same industry in accordance with the Consumer Protection Law is jointly guaranteed.

Note 3: According to the Company's "Endorsement Procedures", the limitation of endorsement or guarantee for other subsidiaries shall not exceed 100% of the current net value of the Company.

The limitation of endorsement or guarantee for one of the subsidiaries shall not exceed 30% of the current net value of Company.

The limitation of endorsement or guarantee for companies that directly holds 100% of the shares with voting rights of subsidiary not exceed 100% of the current net value of Company.

Note 4: The limitation of endorsement or guarantee for other subsidiaries shall not exceed 100% of the current net value of the subsidiary of the Company, RitAsset Co., Ltd.

The limitation of endorsement or guarantee for one of the subsidiaries shall not exceed 50% of the current net value of the subsidiary of the Company, RitAsset Co., Ltd.

Notes to Consolidated Financial Statements of RITdisplay Corporation (Continued)

Attachment 3: Significant marketable securities held as of December 31, 2025 (excluding investments in subsidiaries, associates and joint ventures)
(In Thousands of New Taiwan Dollars)

Name of Held Company	Type and Name of Marketable Securities (Note1)	Relationship with the Issuer	Financial Statement Account	As of December 31, 2025
				Shares / Units	Carrying Amount	Shareholding %	Fair Value
RiTdisplay Corporation	Kaimei Electronic Corporation	None	Financial assets at fair value through profit or loss - current	179,000	$16,289	0.16%	$16,289
	Total				$16,289		$16,289
RiTdisplay Corporation	Sg Biomedical Co., Ltd.	None	Financial assets at fair value through other comprehensive income - current	1,934,000	$63,888	10.40%	$44,269
	Han-Win Technology Co., Ltd.	The ultimate parent company of the Group's associate is the corporate director of this company.	»	600,000	-	2.82%	-
	U-tech Media Corporation	Ultimate parent company's associate	»	3,935,000	53,319	2.54%	53,319
	Aimcore Technology Co., Ltd.	Ultimate parent company's associate	»	6,800,000	167,620	9.93%	167,620
			Add: Fair value measurement adjustment for equity instruments designated at fair value through other comprehensive income.		(19,619)		-
	Total				$265,208		$265,208
Welltech Energy Inc.	CynLing Renewables INC.	None	Financial assets at fair value through other comprehensive income - current	80,000	$2,000	2.49%	$2,000
RitAsset Co., Ltd.	Jijing International Co., Ltd	None	Financial assets at fair value through other comprehensive income - current	3,000,000	$30,000	15.00%	$30,000

Note 1 : The marketable securities mentioned in attachment refer to stock, bonds, beneficiary certificates and securities derived from abovementioned item within in the scope of IFRS 9 Financial Instruments.

Attachment 4: Investees over whom the Company exercise significant influence or control (excluding investees in mainland china) as of December 31, 2025
(In Thousands of New Taiwan Dollars)

Investor	Investee	Business Location	Main Business and Product	Original Investment Amount		Balance as of December 31, 2025			Net Income (Loss) of the Investee	Share of Income (Loss) of the Investor	Note
				As of December 31, 2025	As of December 31, 2024	Shares	%	Carrying Value
RiTdisplay Corporation	RitAsset Co., Ltd.	Taiwan	Leasing business	$810,594	$810,594	81,000,000	100.00%	$810,243	$4,215	$4,609	(Note1)
RiTdisplay Corporation	Ritwin Corporation	Taiwan	Electronic components manufacturing, batteries manufacturing	406,363	302,169	18,936,000	64.69%	564,536	112,032	71,571	(Note1)
RiTdisplay Corporation	HanTai Energy Co., Ltd.	Taiwan	Energy Technology Service	1,750,000	750,000	160,000,000	100.00%	1,718,874	(26,853)	(26,853)	(Note1)
Welltech Energy Inc.	Saintop Group Co., Ltd.	British Virgin Islands	Investment holding	73,067	73,067	2,000,000	100.00%	29,700	(1,976)
Welltech Energy Inc.	Formosa Fortune Holding Limited	British Virgin Islands	Investment holding	151,455	151,455	5,023,205	100.00%	51,429	(1,582)
Saintop Group Co., Ltd.	Hi-Tech Energy Limited	Hong Kong	Investment holding	53,192	53,192	5,050,000	100.00%	29,617	(1,976)
Formosa Fortune Holding Limited	Global Resources Channel Co., Ltd	British Virgin Islands	Investment holding	164,612	164,612	5,011,945	100.00%	21,372	(1,582)
Ritwin Corporation	Cashido Corporation	Taiwan	Electronics industry	-	17,100	-	-%	-	336
Ritwin Corporation	Welltech Energy Inc.	Taiwan	Electronics industry	719,328	860,328	25,005,795	100.00%	405,577	(23,293)

Note 1: It has been written off when the consolidated financial statements are prepared.

Notes to Consolidated Financial Statements of RITdisplay Corporation (Continued)

Attachment 5: Related party transactions with purchase or sale amount of at least NT$100 million or 20% of the paid-in capital for the year ended December 31, 2025
(In Thousands of New Taiwan Dollars)

Company Name	Related Party	Nature of Relationship	Transaction details				Details of non-arm's length transaction		Notes/ Accounts Payable or Receivable		Note
			Purchase/ Sale	Amount	% to Total	Payment/ Collection Term	Unit Price	Payment/ Collection Term	Ending Balance	% to Total
Welltech Energy Inc.	Changzhou Soaring Technology Co., Ltd.	Subsidiary	Purchase	$757,446	58.56%	90 days after monthly closing	Specs of goods purchased are different from others. Cannot be reasonablely compared.	90 days after monthly closing	$106,875	(53.87)%	(Note1)
Changzhou Soaring Technology Co., Ltd.	Welltech Energy Inc.	Parent company	Sale	$757,446	(83.50)%	90 days after monthly closing	Would mark the average cost up within 1~5%	90 days after monthly closing	$106,875	99.88%	(Note1)
Ritwin Corporation	\ Technology Co., Ltd.	Subsidiary	Purchase	$146,082	9.78%	90 days after monthly closing	Belongs to a single vendor, no other vendors available for comparison	90 days after monthly closing	$-	-%	(Note1)
Changzhou Soaring Technology Co., Ltd.	Ritwin Corporation	Parent company	Sale	$146,082	(16.10)%	90 days after monthly closing	Would mark the average cost up within 1~5%	90 days after monthly closing	$12	-%	(Note1)

Note 1: It has been written off when the consolidated financial statements are prepared.

Attachment 6: Receivables from related parties with amounts exceeding the lower of 100 million dollars or 20 percent of capital stock as of December 31, 2025

(In Thousands of New Taiwan Dollars)

Company	Related party	Relationship	Ending Balance	Turnover rate (times)	Overdue receivables		Amounts received in subsequent period	Allowance for doubtful accounts
					Amount	Collection status
Welltech Energy Inc.	Changzhou Soaring	Subsidiary	Other receivables	-	$53,954	-	$122,225	$-
	Technology Co., Ltd.		$130,723
			(Note)
Changzhou Soaring	Welltech Energy Inc.	Parent company	Accounts receivable	10.65	$1,442	-	$106,875	$-
Technology Co., Ltd.			$106,875
			(Note)

Note : It has been written off when the consolidated financial statements are prepared.

151

Attachment 7: Intercompany relationships and significant intercompany transactions for the year ended December 31, 2025
(In Thousands of New Taiwan Dollars)

No. (Note 1)	Company Name	Counter-Party	Nature of Relationship (Note 2)	Intercompany Transaction
				Financial Statement Account	Amount	Terms	Percentage to Consolidated Net Revenue or Total Assets (Note 3)
0	RiTdisplay Corporation	RitAsset Co., Ltd.	1	Rental revenue	$70,000	90 days after monthly closing	1.97%
0	RiTdisplay Corporation	RitAsset Co., Ltd.	1	Advance receipts	$210,000	90 days after monthly closing	2.48%
1	Ritwin Corporation	RitAsset Co., Ltd.	3	Operating revenue	$53,461	90 days after monthly closing	1.50%
2	Welltech Energy Inc.	Changzhou Soaring Technology Co., Ltd.	3	Other receivable	$130,723	90 days after monthly closing	1.54%
3	Changzhou Soaring Technology Co., Ltd.	Welltech Energy Inc.	3	Operating revenue	$757,446	90 days after monthly closing	21.28%
3	Changzhou Soaring Technology Co., Ltd.	Welltech Energy Inc.	3	Accounts receivable	$106,875	90 days after monthly closing	1.26%
3	Changzhou Soaring Technology Co., Ltd.	Ritwin Corporation	3	Operating revenue	$146,082	90 days after monthly closing	4.10%

Note 1: Transaction information between Parent company and its subsidiaries should be disclosed by codes below:
(1) Parent company is coded "0".
(2) The subsidiaries are coded from "1" in the order presented in the table above.

Note 2: Relationship are divided into the following three types and the types are required to be indicated:
(1) From the parent company to a subsidiary.
(2) From a subsidiary to the 1 parent company.
(3) Between subsidiaries.

Note 3: Regarding the percentage of transaction amount to consolidated operating revenues or total assets, it is computed based on the ending balance to consolidated total assets for balance sheet items; and based on interim accumulated amount to consolidated net revenue for income statement items.

Note 4: The threshold of aforementioned amount is disclosed when transaction amount is over $1\%$ of total assets or total operating revenue.

All the transactions with related parties have been eliminated when preparing the consolidated financial statements.

AI assistant

RiTdisplay — Audit Report / Information 2025

52718_rns_2026-06-05_3e4b9a52-e62c-4791-8625-0165238af7dd.pdf

RITDISPLAY CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

Index

MANAGEMENT REPRESENTATION LETTER

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue recognition

Market valuation on inventory

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Others

Notice to Readers

1. HISTORY AND ORGANIZATION

2. DATE AND PROCEDURE OF AUTHORIZATION FOR FINANCIAL STATEMENTS ISSUANCE

3. NEWLY ISSUED OR REVISED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF MATERIAL ACCOUNTING POLICIES

(1) Statement of compliance

(2) Basis of preparation

(3) Basis of consolidation

Preparation principle of consolidated financial statements

(7) Financial instruments

A. Financial instruments: Recognition and Measurement

Financial assets measured at amortized cost

Financial asset measured at fair value through profit or loss

B. Impairment of financial assets

Classification between liabilities or equity

Equity instruments

Compound instruments

Financial liabilities

Financial liabilities at fair value through profit or loss

Financial liabilities at amortized cost

Derecognition of financial liabilities

E. Offsetting of financial instruments

(8) Fair value measurement

(11) Investment property

(12) Leases

Group as a lessee

Group as a lessor

(13) Intangible assets

Patent and Trademark rights

Computer software

Right to use feeder lines

(14)Impairment of non-financial assets

Sale of goods

(17)Borrowing costs

(18) Government grants

(19) Post-employment benefits

Deferred tax

(22) Business combinations and goodwill

5. SIGNIFICANT ACCOUNTING JUDGMENTS, ESTIMATES AND ASSUMPTIONS

B. Inventory

C. Pension benefits

D. Income tax

6. CONTENTS OF SIGNIFICANT ACCOUNTS

(6) Financing lease payments receivable, net

(7) Inventory

(8) Property, plant and equipment

Key assumptions used in value-in-use calculations

Sensitivity to changes in assumptions

(13) Short-term loans

(14) Financial liabilities at fair value through profit or loss

(15) Bonds payable

Defined contribution plan

Defined benefits plan

(18) Equity

A. Common stock

B. Capital surplus

C. Treasury stock

(20) Operating revenue

A. Disaggregation of revenue

B. Contract balances

(22) Leases

B. Group as a lessor

(24) Non-operating incomes and expenses

C. Other gains and losses

RiTdisplay Audit Report / Information 2025