Sunspring Metal Corporation and Subsidiaries

Consolidated Financial Statements for the Years Ended December 31, 2025 and 2024 and Independent Auditors' Report

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

The companies required to be included in the consolidated financial statements of affiliates in accordance with the "Criteria Governing Preparation of Affiliation Reports, Consolidated Business Reports and Consolidated Financial Statements of Affiliated Enterprises" for the year ended December 31, 2025 are all the same as the companies required to be included in the consolidated financial statements of parent and subsidiary companies as provided in International Financial Reporting Standard 10 "Consolidated Financial Statements". Relevant information that should be disclosed in the consolidated financial statements of affiliates has all been disclosed in the consolidated financial statements of parent and subsidiary companies. Hence, we did not prepare a separate set of consolidated financial statements of affiliates.

Very truly yours,

SUNSPIRING METAL CORPORATION

By:

Yang, Ching-Chi
President

Feb 25, 2026

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Sunspring Metal Corporation

Opinion

We have audited the accompanying consolidated financial statements of Sunspring Metal Corporation (the "Company") and its subsidiaries (collectively the "Group"), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, and the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies (collectively referred to as the "consolidated financial statement").

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

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing 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 Group in accordance with The Norm of Professional Ethics for Certified Public Accountant of the Republic of China, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

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

The key audit matters of the Group's consolidated financial statements for the year ended December 31, 2025 are described as follows:

Revenue Recognition

The growth rate of sales revenue from some of the specific customers is significantly higher than the average sales revenue; therefore, the specific revenue from these customers was identified as a key audit matter. Refer to Note 4 to the consolidated financial statements for the related accounting policies on sales revenue.

Our audit procedures performed in regard to the key audit matter included the following:

We understood the design and implementation of the main internal controls for the abovementioned customer-specific sales revenue and tested if these controls were performed effectively.
We selected appropriate samples from the abovementioned customer-specific sales receipts and checked the customer orders, delivery orders and payment collections corresponding to sales revenue to confirm the validity of sales revenue transactions.

Other Matter

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

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

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

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

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

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

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

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient and appropriate audit evidence regarding the financial information of entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision, and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audits resulting in this independent auditors’ report are Shao-Chun Wu and Li-Tung Wu.

Deloitte & Touche
Taipei, Taiwan
Republic of China

Feb 25, 2026

Notice to Readers

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

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

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Except Par Value Per Share)

	2025		2024
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Note 6)	$ 1,159,232	10	$ 1,160,519	10
Financial assets at amortized cost - current (Notes 7)	3,911	-	9,448	-
Trade receivables, net (Note 8)	2,188,694	20	2,471,457	22
Net finance lease receivables -current (Note 9)	18,296	-	-	-
Other receivables (Note 8)	44,657	1	44,981	-
Current tax assets (Note 22)	8,677	-	16	-
Inventories (Note 10)	1,583,029	14	1,614,753	14
Other current assets(Note 15)	124,516	1	236,081	2
Total current assets	5,131,012	46	5,537,255	48
NON-CURRENT ASSETS
Financial assets at amortized cost - non-current (Notes 7 and 29)	913,611	8	37,903	-
Property, plant and equipment (Notes 12 and 29)	4,555,287	41	5,073,306	44
Right-of-use assets (Notes 13)	279,788	2	514,131	5
Intangible assets (Note 14)	69,093	1	75,631	1
Deferred tax assets (Note 22)	143,076	1	105,814	1
Prepayments for machinery and equipment	76,826	1	75,090	1
Refundable deposits	7,087	-	7,110	-
Net finance lease receivables - non-current (Note 9)	27,461	-	-	-
Net defined benefit assets - non-current (Note 18)	26,678	-	24,304	-
Other non-current assets	17,377	-	22,768	-
Total non-current assets	6,116,284	54	5,936,057	52
TOTAL	$ 11,247,296	100	$ 11,473,312	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 16 and 29)	$ 1,190,000	11	$ 1,100,000	10
Trade payables	723,712	7	600,516	5
Other payables (Note 17)	326,392	3	357,009	3
Current tax liabilities (Note 22)	25,391	-	16,799	-
Lease liabilities - current (Notes 13 and 28)	40,424	-	53,669	-
Current portion of long-term borrowings (Notes 16 and 29)	31,987	-	56,987	1
Other current liabilities	522	-	736	-
Total current liabilities	2,338,428	21	2,185,716	19
NON-CURRENT LIABILITIES
Long-term borrowings (Notes 16 and 29)	680,219	6	510,716	4
Deferred tax liabilities (Note 22)	271,625	2	232,545	2
Lease liabilities - non-current (Notes 13 and 28)	277,030	2	467,360	4
Deferred revenue (Note 24)	67,344	1	76,959	1
Guarantee deposits received	3,505	-	1,873	-
Total non-current liabilities	1,299,723	11	1,289,453	11
Total liabilities	3,638,151	32	3,475,169	30
EQUITY ATTRIBUTABLE TO OWNERS OF THE CORPORATION
Ordinary shares - par value of NT$10 per share	1,999,942	18	1,999,942	18
Capital surplus	1,911,126	17	1,911,126	17
Retained earnings
Legal reserve	946,488	8	891,513	8
Special reserve	72,908	1	334,900	3
Unappropriated earnings	2,860,406	26	2,931,585	25
Other equity	(183,545)	(2)	(72,908)	(1)
Total equity attributable to owners of the Corporation	7,607,325	68	7,996,158	70
NON-CONTROLLING INTERESTS	1,820	-	1,985	-
Total equity	7,609,145	68	7,998,143	70
TOTAL	$ 11,247,296	100	$ 11,473,312	100

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

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2025		2024
	Amount	%	Amount	%
SALES (Note 20)	$ 6,288,346	100	$ 7,572,412	100
COST OF GOODS SOLD (Notes 10, 21 and 28)	5,677,734	90	6,478,658	85
GROSS PROFIT	610,612	10	1,093,754	15
OPERATING EXPENSES (Notes 21 and 28)
Selling and marketing expenses	166,764	3	175,197	2
General and administrative expenses	333,395	5	367,870	5
Research and development expenses	39,751	1	43,784	1
Expected credit loss reversed (Note 8)	(529)	-	(248)	-
Total operating expenses	539,381	9	586,603	8
PROFIT FROM OPERATIONS	71,231	1	507,151	7
NON-OPERATING INCOME AND EXPENSES
Interest income	49,936	1	70,241	1
Other income (Note 24)	33,253	1	28,831	-
Loss on disposal of property, plant and equipment	(1,663)	-	(888)	-
Foreign exchange gain (loss), net	(5,306)	-	139,351	2
Loss on financial assets at fair value through profit or loss, net	-	-	(518)	-
Interest expense (Notes 24 and 28)	(33,684)	(1)	(53,942)	(1)
Other expenses	(3,047)	-	(1,258)	-
Total non-operating income and expenses	39,489	1	181,817	2
PROFIT BEFORE INCOME TAX	110,720	2	688,968	9
INCOME TAX EXPENSE (Note 22)	31,980	1	144,687	2
NET PROFIT FOR THE YEAR	78,740	1	544,281	7

(Continued)

SUNSPRING METAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars, Except Earnings Per Share)

	2025		2024
	Amount	%	Amount	%
OTHER COMPREHENSIVE INCOME (LOSS)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit plans	$ 3,609	-	$ 6,538	-
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of the financial statements of foreign operations	(110,637)	(1)	261,992	4
Income tax relating to items that may be reclassified subsequently to profit or loss (Note 22)	(721)	-	(1,308)	-
Other comprehensive income (loss) for the year, net of income tax	(107,749)	(1)	267,222	4
	$ (29,009)	-	$ 811,503	11
NET PROFIT (LOSS) ATTRIBUTABLE TO:
Owners of the Corporation	$ 78,905	1	$ 544,524	7
Non-controlling interests	(165)	-	(243)	-
	$ 78,740	1	$ 544,281	7
TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:
Owners of the Corporation	$ (28,844)	-	$ 811,746	11
Non-controlling interests	(165)	-	(243)	-
	$ (29,009)	-	$ 811,503	11
EARNINGS PER SHARE (Note 23)
Basic	$ 0.39		$ 2.72
Diluted	$ 0.39		$ 2.70

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

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars, Except Dividends Per Share)

	Equity Attributable to Owners of the Corporation (Note 19)						Non-controlling Interests
	Ordinary Shares	Capital Surplus	Retained Earnings
			Special Reserve	Legal Reserve	Unappropriated Earnings	Total	(Notes 11)	Total Equity
BALANCE AT JANUARY 1, 2024	$ 1,999,942	$ 1,911,126	$ 859,963	$ 270,462	$ 2,637,814	$ (334,900)	$ 7,344,407	$ 2,228
Appropriation of 2023 earnings
Legal reserve	-	-	31,550	-	(31,550)	-	-	-
Special reserve	-	-	-	64,438	(64,438)	-	-	-
Cash dividends distributed by the Company - NT$0.8 per share	-	-	-	-	(159,995)	-	(159,995)	-
	-	-	31,550	64,438	(255,983)	-	(159,995)	-
Net profit (loss) for the year ended December 31, 2024	-	-	-	-	544,524	-	544,524	(243)
Other comprehensive income for the year ended December 31, 2024, net of income tax	-	-	-	-	5,230	261,992	267,222	-
Total comprehensive income for the year ended December 31, 2024	-	-	-	-	549,754	261,992	811,746	(243)
BALANCE AT DECEMBER 31, 2024	1,999,942	1,911,126	891,513	334,900	2,931,585	(72,908)	7,996,158	1,985
Appropriation of 2024 earnings
Legal reserve	-	-	54,975	-	(54,975)	-	-	-
Cash dividends distributed by the Company - NT$1.8 per share	-	-	-	-	(359,989)	-	(359,989)	-
Reversal of Special reserve	-	-	-	(261,992)	(261,992)	-	-	-
	-	-	54,975	(261,992)	(152,972)	-	(359,989)	-
Net profit (loss) for the year ended December 31, 2025	-	-	-	-	78,905	-	78,905	(165)
Other comprehensive income for the year ended December 31, 2025, net of income tax	-	-	-	-	2,888	(110,637)	(107,749)	-
Total comprehensive income (loss) for the year ended December 31, 2025	-	-	-	-	81,793	(110,637)	(28,844)	(165)
BALANCE AT DECEMBER 31, 2025	$ 1,999,942	$ 1,911,126	$ 946,488	$ 72,908	$ 2,860,406	$ (183,545)	$ 7,607,325	$ 1,820

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

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024
(In Thousands of New Taiwan Dollars)

	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax	$ 110,720	$ 688,968
Adjustments for:
Depreciation expenses	661,272	702,948
Amortization expenses	17,303	23,778
Expected credit loss reversed on trade receivables	(529)	(248)
Net loss on fair value changes of financial assets and liabilities at fair value through profit or loss	-	3,710
Interest expense	33,684	53,942
Interest income	(49,936)	(70,241)
Loss on disposal of property, plant and equipment	1,663	888
Impairment loss recognized (reversed) on non-financial assets	49,731	(42,315)
Foreign currency exchange gain, net	(132,245)	(115,597)
Gain from subleasing Right-of-Use Assets	(14,040)	-
Changes in operating assets and liabilities
Notes receivable	-	2,588
Trade receivables	293,706	447,200
Other receivables	49,708	(160,833)
Inventories	(66,179)	(44,529)
Other current assets	117,399	13,125
Net defined benefit assets	1,235	(327)
Trade payables	125,343	(179,756)
Other payables	14,413	664
Other current liabilities	459	1,709
Deferred revenue	(8,270)	(10,932)
Cash generated from operations	1,205,437	1,314,742
Interest received	45,530	75,800
Interest paid	(31,916)	(51,383)
Income taxes paid	(31,641)	(68,564)
Net cash generated from operating activities	1,187,410	1,270,595
CASH FLOWS FROM INVESTING ACTIVITIES
Decrease (increase) in financial assets at amortized cost	(870,171)	619,927
Payments for property, plant and equipment	(91,199)	(86,129)
Proceeds from disposal of property, plant and equipment	5,360	3,433
Decrease in refundable deposits	9	-
Acquisition of intangible assets	(1,521)	(1,799)
Increase in finance lease receivables	(47,043)	-
Increase in other non-current assets	-	(937)
Increase in prepayments for machinery and equipment	(8,219)	(20,542)
Net cash generated from (used in) investing activities	(1,012,784)	513,953

(Continued)

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars)

	2025	2024
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds (repayments) from short-term borrowings	$ 90,000	$ (470,000)
Decrease in short-term bills payable	-	(399,727)
Proceeds from long-term borrowings	300,000	200,000
Repayments of long-term borrowings	(156,987)	(1,188,348)
Increase (decrease) in guarantee deposits received	1,670	(1,472)
Repayment of the principal portion of lease liabilities	(54,121)	(53,425)
Dividends paid	(359,989)	(159,995)
Net cash used in financing activities	(179,427)	(2,072,967)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES	3,514	166,027
NET DECREASE IN CASH AND CASH EQUIVALENTS	(1,287)	(122,392)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	1,160,519	1,282,911
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$ 1,159,232	$ 1,160,519

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

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SUNSPRING METAL COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 (In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

1. GENERAL INFORMATION

Sunspring Metal Company (the "Company") was incorporated in July 1984. It mainly engaged in the manufacturing, processing and trading of water pipe switch accessories, gate valves, corks, copper pipe fittings and waterway sanitary equipment.

The Company was listed on the Taiwan Stock Exchange in November 2007.

The consolidated financial statements are presented in the Company's functional currency, the New Taiwan dollar.

2. APPROVAL OF FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company's board of directors on February 25, 2026.

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

a. Initial application of the amendments to the International Financial Reporting Standards (IFRS), International Accounting Standards (IAS), IFRIC Interpretations (IFRIC), and Standing Interpretations Committee (collectively, the "IFRSs") endorsed and issued into effect by the Financial Supervisory Commission (FSC)

Amendments to IAS 21 "Lack of Exchangeability"

The initial application of Amendments to IAS 21 "Lack of Exchangeability" did not have a material impact on the company's accounting policies.

b. The IFRS Accounting Standards endorsed by the FSC for application starting from 2026

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments” – the amendments to the application guidance of classification of financial assets	January 1, 2026
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”	January 1, 2026
Annual Improvements to IFRS Accounting Standards – Volume 11	January 1, 2026
IFRS 17 “Insurance Contracts” (including the 2020 and 2021 amendments to IFRS 17)	January 1, 2023

The initial application of the IFRSs endorsed and issued into effect by the FSC did not have any material impact on the accounting policies of the Company and its subsidiaries (collectively referred to as the "Group").

12 -

c. The IFRSs in issue but not yet endorsed and issued into effect by the FSC

New, Amended and Revised Standards and Interpretations	Effective Date Announced by IASB (Note)
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”	To be determined by IASB
IFRS 18 “Presentation and Disclosures in Financial Statements”	January 1, 2027 (Note 2)
IFRS 19 “Subsidiaries without Public Accountability : Disclosures” (including the 2025 amendment to IFRS 19)	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

Note : Unless stated otherwise, the above IFRSs are effective for annual reporting periods beginning on or after their respective effective dates.

Note2: On September 25, 2025, the FSC announced that IFRS 18 will take effect starting from January 1, 2028. Domestic entities could elect to apply IFRS 18 for an earlier period after the endorsement of IFRS 18 by the FSC.

IFRS 18 “Presentation and Disclosures in Financial Statements”

IFRS 18 will supersede IAS 1 “Presentation of Financial Statements”. The main changes comprise:

Items of income and expenses included in the statement of profit or loss shall be classified into the operating, investing, financing, income taxes and discounted operations categories.
The statement of profit or loss shall present totals and subtotals for operating profit or loss, profit or loss before financing and income taxes and profit or loss.
Provides guidance to enhance the requirements of aggregation and disaggregation: The Company and its subsidiaries shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions and other events and shall classify and aggregate them into groups based on shared characteristics, so as to result in the presentation in the primary financial statements of line items that have at least one similar characteristics. The Company and its subsidiaries shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Company and its subsidiaries labels item as 'other' only if it cannot find a more informative label.
Disclosure on Management-defined Performance Measures (MPMs): When in public communications outside financial statements and communicating to users of financial statements management's view of an aspects of the financial performance of the Company and its subsidiaries as a whole, the Company and its subsidiaries shall disclose related information about its MPMs in a single note to the financial Statements, including the description of such measures, calculations, reconciliations to the subtotal or total specified by IFRS Accounting Standards and the income tax and non-controlling interest effects of related reconciliation items.

In addition, the IAS 7 "Statement of Cash Flows" has been amended as follows:

When the Group prepares its cash flow from operating activities using the indirect method, it should use operating profit or loss as the starting point for adjustment.
Interest and dividends received by the Group should be classified as investing activities, while interest and dividends paid should be classified as financing activities. If the Group is assessed to have a specific principal operating activity, the types of dividend income, interest income and interest expense reported in the income statement shall be considered to determine the classification
13 -

of receiving dividends, receiving interest and paying interest in the cash flow statement. However, each of the above cash flows can only be classified in a single activity in the cash flow statement.

As of the date the consolidated financial statements were authorized for issue, the Group continues to evaluating other impacts of the above amended standards and interpretations on the Corporation and its subsidiaries' financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

a. Statement of compliance

The consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRSs as endorsed and issued into effect by the FSC.

b. Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments which are measured at fair value and net defined benefit liabilities which are measured at the present value of the defined benefit obligation less the fair value of plan assets.

The fair value measurements, which are grouped into Levels 1 to 3 based on the degree to which the fair value measurement inputs are observable and based on the significance of the inputs to the fair value measurement in its entirety, are described as follows:

1) Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities;
2) Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for an asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
3) Level 3 inputs are unobservable inputs for an asset or liability.

c. Classification of current and non-current assets and liabilities

Current assets include:

1) Assets held primarily for the purpose of trading;
2) Assets expected to be realized within 12 months after the reporting period; and
3) Cash and cash equivalents unless the asset is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period.

Current liabilities include:

1) Liabilities held primarily for the purpose of trading;
2) Liabilities due to be settled within 12 months after the reporting period, even if an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the consolidated financial statements are authorized for issue; and
3) Liabilities for which the Group does not have an unconditional right to defer settlement for at least 12 months after the reporting period. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its

14 -

classification.

Assets and liabilities that are not classified as current are classified as non-current.

d. Basis of consolidation

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

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statement of profit or loss and other comprehensive income from the effective dates of acquisitions up to the effective dates of disposals, as appropriate.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Company.

All intra-group transactions, balances, income and expenses are eliminated in full upon consolidation. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the interests of the Group and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the owners of the Company.

See Note 11, Tables 5 and 6 for detailed information on subsidiaries (including the percentages of ownership and main businesses).

e. Foreign currencies

In preparing the financial statements of the entities in the Group, transactions in currencies other than the entity's functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of the transactions.

At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Exchange differences on monetary items arising from settlement or translation are recognized in profit or loss in the period in which they arise.

Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated at the rates prevailing at the date when the fair value is determined. Exchange differences arising from the retranslation of non-monetary items are included in profit or loss for the period except for exchange differences arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income; in which cases, the exchange differences are also recognized directly in other comprehensive income.

Non-monetary items that are measured at historical cost in a foreign currency are not retranslated.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including the subsidiaries in other countries that use currencies which are different from the Company) are translated into the New Taiwan dollars using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. Exchange differences arising are recognized in other comprehensive income (and attributed to the owners of the Company and non-controlling interests as appropriate).

15 -

f. Inventories

Inventories consist of raw materials, supplies, work-in-process, merchandise and finished goods and are stated at the lower of cost or net realizable value. Inventory write-downs are made by item, except where it may be appropriate to group similar or related items. The net realizable value is the estimated selling price of inventories less all estimated costs of completion and costs necessary to make the sale. Inventories are recorded at weighted-average cost on the balance sheet date.

g. Property, plant, and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost less accumulated depreciation and accumulated impairment loss.

Property, plant and equipment in the course of construction are measured at cost less any recognized impairment loss. Cost includes professional fees and borrowing costs eligible for capitalization. Such assets are depreciated and classified to the appropriate categories of property, plant and equipment when completed and ready for their intended use.

Except for freehold land which is not depreciated, the depreciation of property, plant and equipment is recognized using the straight-line method. Each significant part is depreciated separately. The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting period, with the effects of any changes in the estimates accounted for on a prospective basis.

On derecognition of an item of property, plant and equipment, the difference between the sales proceeds and the carrying amount of the asset is recognized in profit or loss.

h. Goodwill

Goodwill arising from the acquisition of a business is measured at cost as established at the date of acquisition of the business less accumulated impairment loss.

For the purposes of impairment testing, goodwill is allocated to each of the Group's cash-generating units or groups of cash-generating units (referred to as "cash-generating units") that are expected to benefit from the synergies of the combination.

A cash-generating unit to which goodwill has been allocated is tested for impairment annually or more frequently whenever there is an indication that the unit may be impaired, by comparing its carrying amount, including the attributed goodwill, with its recoverable amount. However, if the goodwill allocated to a cash-generating unit was acquired in a business combination during the current annual period, that unit shall be tested for impairment before the end of the current annual period. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then pro rata to the other assets of the unit based on the carrying amount of each asset in the unit. Any impairment loss is recognized directly in profit or loss. Any impairment loss recognized for goodwill is not reversed in subsequent periods.

i. Intangible assets

Intangible assets with finite useful lives that are acquired separately are initially measured at cost and subsequently measured at cost less accumulated amortization and accumulated impairment loss. Amortization is recognized on a straight-line basis. The estimated useful lives, residual values, and amortization methods are reviewed at the end of each reporting period, with the effect of any changes in the estimate accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are measured at cost less accumulated impairment loss.

On derecognition of an intangible asset, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

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j. Impairment of property, plant and equipment, right-of-use assets and intangible assets other than goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use assets and intangible assets (excluding goodwill) to determine whether there is any indication that those assets have suffered any impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually and whenever there is an indication that the assets may be impaired.

The recoverable amount is the higher of fair value less costs to sell and value in use. If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

When an impairment loss is subsequently reversed, the carrying amount of the corresponding asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount (less amortization and depreciation) that would have been determined had no impairment loss been recognized on the asset or cash-generating unit in prior years. A reversal of an impairment loss is recognized in profit or loss.

k. Financial instruments

Financial assets and financial liabilities are recognized when an entity in the Group becomes a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issuance of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognized immediately in profit or loss.

1) Financial assets

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

a) Measurement categories

Financial assets are classified into the following categories: financial assets at FVTPL, financial assets at amortized cost.

i. Financial assets at amortized cost

Financial assets that meet the following conditions are subsequently measured at amortized cost:

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

17 -

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

Subsequent to initial recognition, financial assets at amortized cost, including cash and cash equivalents, notes receivable, trade receivables other receivables, refundable deposits and other financial assets at amortized cost, are measured at amortized cost, which equals the gross carrying amount determined using the effective interest method less any impairment loss. Exchange differences are recognized in profit or loss.

Interest income is calculated by applying the effective interest rate to the gross carrying amount of such financial asset, except for:

i) Purchased or originated credit-impaired financial asset, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial asset; and
ii) Financial asset that is not credit impaired on purchase or origination but has subsequently become credit impaired, for which interest income is calculated by applying the effective interest rate to the amortized cost of such financial assets in subsequent reporting periods.

A financial asset is credit impaired when one or more of the following events have occurred:

i) Significant financial difficulty of the issuer or the borrower;
ii) Breach of contract, such as a default;
iii) It is becoming probable that the borrower will enter bankruptcy or undergo a financial reorganization; or
iv) The disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits with original maturities within 3 months from the date of acquisition, which are highly liquid, readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These cash equivalents are held for the purpose of meeting short-term cash commitments.

b) Impairment of financial assets

The Group recognizes a loss allowance for expected credit losses on financial assets at amortized cost (including trade receivables).

The Group always recognizes lifetime expected credit loss (ECL) for trade receivables. For all other financial instruments, the Group recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. If, on the other hand, the credit risk on a financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.

Expected credit losses reflect the weighted average of credit losses with the respective risks of default occurring as the weights. Lifetime ECL represents the expected credit loss that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

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For internal credit risk management purposes, the Group considers the following situations indication that a financial asset is in default (without taking into account any collateral held by the Group):

i. Internal or external information shows that the debtor is unlikely to pay its creditors.

ii. When a financial asset is more than 90 days past due unless the Group has reasonable and corroborative information to support a more lagged default criterion.

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amount through a loss allowance account.

c) Derecognition of financial assets

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.

On derecognition of a financial asset at amortized cost in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.

2) Financial liabilities

a) Subsequent measurement

Except the following situations, all the financial liabilities are measured at amortized cost using the effective interest method:

Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when such financial liabilities are held for trading.

Financial liabilities held for trading are stated at fair value, and any gains or losses on such financial liabilities are recognized in other gains or losses; any remeasurement gains or losses on such financial liabilities are recognized in other gains or losses.

b) Derecognition of financial liabilities

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

Revenue recognition

The Group identifies contracts with customers, allocates the transaction price to the performance obligations, and recognizes revenue when performance obligations are satisfied.

Sales of goods are recognized as revenue when the goods are delivered to the customer’s specific location/the goods are shipped/the goods are picked up because it is the time when the customer has full discretion over the manner of distribution and bears the risks of obsolescence. Revenue and trade receivables are recognized concurrently.

The Group does not recognize revenue on materials delivered to subcontractors because this delivery does not involve a transfer of control.

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m. Leases

At the inception of a contract, the Group assesses whether the contract is, or contains, a lease.

1) The Group as lessor

Leases are classified as finance leases whenever the terms of a lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

When the Group subleases a right-of-use asset, it classifies the sublease as a right-of-use asset (not the underlying asset). However, if the main lease is a short-term lease for which the merged company is eligible for recognition exemption, the sublease is classified as an operating lease.

Under finance leases, lease payments include fixed payments. The net investment in a lease is measured and expressed as finance lease receivables, which is the sum of the present value of the lease payments receivable and the unguaranteed residual value, plus the original direct costs. Finance income is amortized over accounting periods to reflect the fixed rate of return that the Group can obtain from its net investment in leases not yet due in each period. For lease modifications not treated as separate leases, if the modification takes effect on the lease incorporation date, the lease is classified as an operating lease, and the modification is treated as a new lease, with the carrying amount measured at the balance of finance lease receivables as of the effective date of the modification. Other lease negotiations are adjusted for finance lease receivables in accordance with IFRS 9.

Under an operating lease, lease payments, excluding the incentives for the lease, are recognized as income on a straight-line basis over the relevant lease term. The original direct costs incurred in acquiring the operating lease are added to the carrying amount of the underlying asset and recognized as expenses on a straight-line basis over the lease term.

2) The Group as lessee

The Group recognizes right-of-use assets and lease liabilities for all leases at the commencement date of a lease, except for short-term leases and low-value asset leases accounted for by applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets are initially measured at cost, which comprises the initial measurement of lease liabilities adjusted for lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs needed to restore the underlying assets, and less any lease incentives received. Right-of-use assets are subsequently measured at cost less accumulated depreciation and impairment losses and adjusted for any remeasurement of the lease liabilities. Right-of-use assets are presented on a separate line in the consolidated balance sheets.

Right-of-use assets are depreciated using the straight-line method from the commencement dates to the earlier of the end of the useful lives of the right-of-use assets or the end of the lease terms.

Lease liabilities are initially measured at the present value of the lease payments, which comprise fixed payments, in-substance fixed payments, variable lease payments which depend on an index or a rate. The lease payments are discounted using the interest rate implicit in a lease, if that rate can be readily determined. If that rate cannot be readily determined, the Group uses the lessee's incremental borrowing rate.

Subsequently, lease liabilities are measured at amortized cost using the effective interest method, with interest expense recognized over the lease terms. When there is a change in a lease term or a change in future lease payments resulting from a change in an index or a rate used to determine

20 -

those payments, the Group remeasures the lease liabilities with a corresponding adjustment to the right-of-use-assets. However, if the carrying amount of the right-of-use assets is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss. Lease liabilities are presented on a separate line in the consolidated balance sheets.

For sale and leaseback transactions, if the transfer of an asset satisfies the requirements of IFRS 15 to be accounted for as a sale, the Group recognizes only the amount of any gain or loss which relates to the rights transferred to the buyer-lessor, and adjusts the off-market terms to measure the sale proceeds at fair value. If the transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, it is accounted for as a financing transaction.

n. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.

Government grants related to income are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognized in profit or loss in the period in which they become receivable.

The benefit of a government loan received at a below-market rate of interest is treated as a government grant measured as the difference between the proceeds received and the fair value of the loan based on prevailing market interest rates.

o. Employee benefits

1) Short-term employee benefits

Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as expenses when employees have rendered service entitling them to the contributions.

Defined benefit costs (including service cost, net interest and remeasurement) under the defined benefit retirement benefit plans are determined using the projected unit credit method. Service cost and net interest on the net defined benefit assets are recognized as employee benefits expense in the period in which they occur. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding interest), is recognized in other comprehensive income in the period in which it occurs. Remeasurement recognized in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss.

Net defined benefit assets represent the actual surplus in the Group's defined benefit plan. Any surplus resulting from this calculation is limited to the present value of any refunds from the plans or reductions in future contributions to the plans.

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p. Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

1) Current tax

Income tax payable (refundable) is based on taxable profit (loss) for the year determined according to the applicable tax laws of each tax jurisdiction.

According to the Income Tax Act in the ROC, an additional tax on unappropriated earnings is provided for in the year the shareholders approve to retain earnings.

Adjustments of prior years’ tax liabilities are added to or deducted from the current year’s tax provision.

2) Deferred tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities and the corresponding tax bases used in the computation of taxable profit.

Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences and unused loss carryforwards to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. A previously unrecognized deferred tax asset is also reviewed at the end of each reporting period and recognized to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liabilities are settled or the assets are realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets 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.

3) Current and deferred taxes for the year

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred taxes are also recognized in other comprehensive income or directly in equity respectively.

CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimations and assumptions on the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered relevant. Actual results may differ from these estimates.

After evaluation by the management of the Group, there were no significant uncertainties in the accounting policies, estimates and underlying assumptions adopted by the Group.

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23 -

6. CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand	$ 382	$ 409
Checking accounts and demand deposits	552,085	464,608
Time deposits with original maturities less than 3 months	606,765	695,502
	$ 1,159,232	$ 1,160,519

7. FINANCIAL ASSETS AT AMORTIZED COST

	December 31
	2025	2024
Current
Time deposits with original maturities less than 3 months	$ 3,911	$ 9,448
Non-current
Pledged time deposits	$ 331,823	$ 37,903
Time deposits with original maturities more than 1 year	581,788	-
	$ 913,611	$ 37,903

For information on financial asset pledges measured at amortized cost, please refer to the note 29.

8. TRADE RECEIVABLES AND OTHER RECEIVABLE

	December 31
	2025	2024
Trade receivables
Trade receivables	$ 2,189,138	$ 2,472,431
Less: Allowance for impairment loss	(444)	(974)
	$ 2,188,694	$ 2,471,457
Other receivable
Other receivable	$ 44,657	$ 44,981
Less: Allowance for impairment loss	-	-
	$ 44,657	$ 44,981

The average credit period of the sale of goods is 60-140 days. No interest is charged on trade receivables. The Group adopted a policy of using other publicly available financial information or its own trading records to rate its customers.

In order to minimize credit risk, the management of the Group has delegated a team responsible for determining credit limits, credit approvals and other monitoring procedures to ensure that follow-up action is taken to recover overdue debts. In addition, the Group reviews the recoverable amount of each individual

trade debt at the end of the year to ensure that adequate allowance is made for possible irrecoverable amounts. In this regard, the management believes the Group’s credit risk was significantly reduced.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECL. The expected credit losses on trade receivables are estimated by reference to the past default experience of the customer, the customer’s current financial position, economic condition of the industry in which the customer operates, as well as the GDP forecasts and industry outlook. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished according to the Group’s different customer base.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery. For trade receivables that have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivables due. Where recoveries are made, these are recognized in profit or loss.

Other receivable mainly consist of business tax refunds receivable and interest receivable. The Group adopted a policy of conducting with counterparties of good credit standing, and obtain adequate collateral when necessary to mitigate the risk of financial loss due to default. The Group continuously monitors credit exposure and the credit ratings of counterparty, credit rating information is assigned to counterparties based on their historical transaction records. The Group assesses the expected credit loss rate of other receivable to be 0% for the years ended December 31, 2025 and 2024.

The following table details the loss allowance of trade receivables:

	Not Past Due	Past Due 1 to 60 Days	Past Due 61 to 90 Days	Past Due Over 90 Days	Total
December 31, 2025
Expected credit loss rate	0-0.1%	0.1%-5.29%	12.1%-50%	70.9%-100%
Gross carrying amount	$ 2,137,997	$ 51,124	$ 17	$ -	$ 2,189,138
Loss allowance (Lifetime ECL)	(248)	(192)	(4)	-	(444)
Amortized cost	$ 2,137,749	$ 50,932	$ 13	$ -	$ 2,188,694
December 31, 2024
Expected credit loss rate	0-0.1%	0.1%-2.92%	4.99%	63.15%-100%
Gross carrying amount	$ 2,251,825	$ 219,379	$ 1,227	$ -	$ 2,472,431
Loss allowance (Lifetime ECL)	(343)	(571)	(60)	-	(974)
Amortized cost	$ 2,251,482	$ 218,808	$ 1,167	$ -	$ 2,471,457

The movements of the loss allowance of trade receivables and other receivables were as follows:

	For the Year Ended December 31
	2025		2024
	Trade Receivables	Other Receivables	Trade Receivables	Other Receivables
Balance, beginning of year	$ 974	$ -	$ 1,174	$ 36
Expected credit loss reversed	(529)	-	(212)	(36)
Foreign exchange gains and losses	(1)	-	12	-
Balance, end of year	$ 444	$ -	$ 974	$ -

9. FINANCE LEASE RECEIVABLE

	December 31, 2025
Undiscounted lease payment
The first Year	$ 19,136
The second Year	19,136
The third Year	8,771
	47,043
Less: Unearned financing income	( 1,286 )
Net investment in leases (expressed as finance lease receivable)	$ 45,757

In August and November of 2025, the Company subleased the leased right-of-use asset located in Huiguo Section, Xitun District, Taichung City. Since the remaining lease term of the main lease was fully subleased, it was classified as a finance lease.

The implied interest rate under the lease agreement remains unchanged after the contract date. As of December 31, 2025, the implied interest rate for the finance lease was 2.345% per annum.

The lease agreement between the Company and the lessee includes general risk management policies to mitigate the residual asset risk of the leased building at the end of the lease term.

The Company measures the allowance for loss on finance lease receivables based on expected credit losses over the lease term. As of December 31, 2025, there were no overdue lease receivables, and considering the counterparty's past default record, the future development of the related industries of the leased assets, and the value of the collateral, the Company believes that the aforementioned finance lease receivables have not been impaired.

10. INVENTORIES

	December 31
	2025	2024
Merchandise and finished goods	$ 635,873	$ 773,986
Work in process	454,680	424,625
Raw materials and supplies	492,476	416,142
	$ 1,583,029	$ 1,614,753

The nature of the cost of goods sold is as follows:

	For the Year Ended December 31
	2025	2024
Cost of goods sold	$ 5,419,189	$ 6,352,015
Unallocated fixed production overhead	190,734	142,782
Inventory write-downs (reversed)	49,731	(42,315)
Other	18,080	26,176
	$ 5,677,734	$ 6,478,658

11. SUBSIDIARIES

Subsidiaries included in the consolidated financial statements were as follows:

Investor	Investee	Nature of Activities	Proportion of Ownership
			December 31
			2025	2024
The Company	Sunspring Holding Corporation (SSH)	International investment	100	100
	Sunspring Automation Corporation (SAC)	Installation and sale of automatic control equipment	96.5	96.5
	Sunspring America Inc. (SSA)	Manufacturing and sales of sanitation, construction equipment, metal molds and hard parts	100	100
SSH	Sunspring International Corporation (SIC)	International investment	100	100
	Golden Faith International Corporation (GFI)	International investment	100	100
SIC	Sunspring Metal (Zhuhai) Corporation (SSZ)	Manufacturing and sales of sanitation, construction equipment, metal molds and hard parts	100	100
GFI	Sunspring Industrial Ltd. (SSI)	Manufacturing and sales of sanitation, construction equipment, metal molds and hard parts	100	100

The subsidiary SAC passed a board resolution in February 2025 to carry out a capital reduction of $42,000 thousand to offset losses and to use capital reserves of $634 thousand to cover losses. The resolution was approved by the shareholders' meeting in April 2025, with June 17, 2025 as the base date for capital reduction, and the change registration was completed on June 26, 2025.

12. PROPERTY, PLANT AND EQUIPMENT

	For the Year Ended December 31, 2025
	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Miscellaneous equipment	Construction in progress and equipment pending acceptance	Total
Cost
Beginning Balance	$ 4,291	$ 2,827,517	$ 7,243,752	$ 116,435	$216,895	$ 1,897,003	$ 38,558	$12,344,451
Additions	-	2,308	2,677	2,005	221	29,592	51,993	88,796
Disposals	-	( 15,397)	( 30,444)	( 5,160)	( 2,259)	( 5,418)	-	( 58,678)
Reclassified Amount	-	-	25,971	1,584	1,993	50,582	( 39,410)	40,720
Translation Adjustments	( 177 )	( 21,117)	( 67,125)	( 1,657)	( 1,269)	( 14,846)	301	( 105,890)
Ending Balance	$ 4,114	$ 2,793,311	$ 7,174,831	$ 113,207	$ 215,581	$ 1,956,913	$ 51,442	$12,309,399

For the year Ended December 31, 2025

	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Miscellaneous equipment	Construction in progress and equipment pending acceptance	Total
Accumulated depreciation
Beginning Balance	$ -	$ 1,147,562	$ 4,532,001	$ 104,463	$205,106	$ 1,282,013	$ -	7,271,145
Additions	-	63,064	405,470	3,296	4,020	136,699	-	612,549
Disposals	-	( 13,858)	( 26,009)	( 4,804)	( 2,248)	( 4,736)	-	( 51,655)
Translation Adjustments	-	( 14,360)	( 48,597)	( 1,616)	( 1,077)	( 12,277)	-	( 77,927)
Ending Balance	$ -	$ 1,182,408	$ 4,862,865	$ 101,339	$205,801	$ 1,401,699	$ -	$ 7,754,112
Ending Balance, Net	$ 4,114	$ 1,610,903	$ 2,311,966	$ 11,868	$ 9,780	$ 555,214	$ 51,442	$ 4,555,287
Beginning Balance, Net	$ 4,291	$ 1,679,955	$ 2,711,751	$ 11,972	$ 11,789	$ 614,990	$ 38,558	$ 5,073,306

For the Year Ended December 31, 2024

	Land	Buildings	Machinery and equipment	Transportation equipment	Office equipment	Miscellaneous equipment	Construction in progress and equipment pending acceptance	Total
Cost
Beginning Balance	$ 4,019	$ 2,778,773	$ 7,006,020	$ 115,617	$217,905	$ 1,785,531	$ 76,876	$11,984,741
Additions	-	4,922	36,737	-	-	18,896	11,881	72,436
Disposals	-	( 2,259)	( 9,677)	( 4,618)	( 5,600)	( 35,964)	-	( 58,118)
Reclassified Amount	-	-	56,431	1,338	1,681	87,443	( 51,455)	95,438
Translation Adjustments	272	46,081	154,241	4,098	2,909	41,097	1,256	249,954
Ending Balance	$ 4,291	$ 2,827,517	$ 7,243,752	$ 116,435	$216,895	$ 1,897,003	$ 38,558	$ 12,344,451
Accumulated depreciation
Beginning Balance	$ -	$ 1,042,870	$ 4,001,638	$ 101,760	$201,943	$ 1,135,598	$ -	6,483,809
Additions	-	74,234	420,921	3,589	4,437	146,163	-	649,344
Disposals	-	( 2,259)	( 8,145)	( 4,537)	( 3,721)	( 35,135)	-	( 53,797)
Reclassified Amount	-	-	( 741)	-	-	741	-	-
Translation Adjustments	-	32,717	118,328	3,651	2,447	34,646	-	191,789
Ending Balance	$ -	$ 1,147,562	$ 4,532,001	$ 104,463	$205,106	$ 1,282,013	$ -	$ 7,271,145
Ending Balance, Net	$ 4,291	$ 1,679,955	$ 2,711,751	$ 11,972	$ 11,789	$ 614,990	$ 38,558	$ 5,073,306

Property, plant and equipment are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings
Main buildings 20-51 years
Others 9-20 years
Machinery and equipment 2-15 years
Transportation equipment 5-6 years
Office equipment 4-10 years
Miscellaneous equipment 3-16 years

Property, plant and equipment pledged as collateral for bank borrowings are set out in Note 29.

28 -

13. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31
	2025	2024
Carrying amounts
Land	$ 258,512	$ 426,245
Buildings	19,595	87,479
Transportation equipment	1,681	407
	$ 279,788	$ 514,131
	For the Year Ended December 31
	2025	2024
Additions to right-of-use assets	$ 9,112	$ 70,589
Depreciation charge for right-of-use assets
Buildings	$ 38,438	$ 42,351
Land	9,487	10,458
Transportation equipment	798	795
	$ 48,723	$ 53,604

Except for additions and the recognized depreciation expenses listed above, the Group's right-of-use assets did not have significant subleases or impairment in 2025 and 2024.

b. Lease liabilities

	December 31
	2025	2024
Carrying amounts
Current	$ 40,424	$ 53,669
Non-current	$ 277,030	$ 467,360

Range of discount rate for lease liabilities was as follows:

	December 31
	2025	2024
Land	1.74%	1.20%
Buildings	1.873%-3.18%	1.873%-3.18%
Transportation equipment	3.18%	3.18%

c. Material lease-in activities and terms

The Group leases certain machinery and transportation equipment for the use of product manufacturing and transportation with lease terms of 3 to 5 years. These arrangements do not contain renewal or purchase options.

In May 2015, the Group signed a land lease contract in the Taichung Park of the Central Science Park

with the Central Taiwan Science Park Bureau, National Science and Technology Council (As Ministry of Science and Technology before). The lease period was from May 2015 to December 2034.

The Group leased the plant from non-related parties, and the lease period was from January 2021 to June 2026. Refer to Note 28 for the leased plant of the Group and related parties.

SSI obtained the right to use part of the land in Dawang Comprehensive Economic Development Zone, Zhaoqing City, Guangdong Province, China for 50 years; SSZ obtained the right to use part of the land in Sanzao Science and Technology Industrial Park, Zhuhai National High-tech Industrial Development Zone, Guangdong Province, China for 50 years. Within the land use period, they enjoy the land use right, income right, transfer and lease, etc., and be responsible for various taxes and fees that should be paid due to the use of land. The land use is for the construction of production plants, office buildings and staff dormitories.

In June 2022, to activate assets and improve its financial structure, the Company sold the real estate located in Huiguo Section, Xitun District, Taichung City in June 2022 for $607,162 thousand to Taiwan Life Insurance Co., Ltd., and leased it back for use. The lease period is from June 2022 to June 2028, a total of 6 years, and recognized a gain of $93,176 thousand. The right-of-use assets and lease liabilities are recognized in accordance with IFRS 16. For the part whose fair value is higher than the book value, the unrealized sale and leaseback benefits of the right-of-use assets are recognized according to the leaseback of $19,288 thousand and amortized during the lease period. The lessee shall notify the lessor in writing and obtain consent 12 months before the expiry date, so that the new contract will continue to lease the object of the lease without the right to purchase. The lease contract stipulates that the annual lease payments for the first three years and the next three years of the lease are $17,302 thousand and $17,917 thousand, respectively. In August and November of 2025, the Company subleased its assets through a finance lease, please refer to the Note 9.

d. Other lease information

The Company subleased its assets through a finance lease, please refer to the Note 9.

The Group's leases of certain equipment qualify as short-term leases and low-value asset leases. The Group has elected to apply the recognition exemption and thus, did not recognize right-of-use assets and lease liabilities for these leases.

INTANGIBLE ASSETS

	Good will	Computer Software	Total
2025
Balance at January 1	$ 63,638	$ 11,993	$ 75,631
Additions for the year	-	1,521	1,521
Amortization of the year	-	(6,091)	(6,091)
Effect of foreign currency exchange difference	(1,797)	(171)	(1,968)
Balance at December 31	$ 61,841	$ 7,252	$ 69,093
2024
Balance at January 1	$ 60,879	$ 16,670	$ 77,549
Additions for the year	-	1,799	1,799
Amortization of the year	-	(6,835)	(6,835)
Effect of foreign currency exchange difference	2,759	359	3,118
Balance at December 31	$ 63,638	$ 11,993	$ 75,631

Computer software is depreciated using the straight-line method over the estimated useful lives of 3 to 10 years.

15. OTHER ASSETS

	December 31
	2025	2024
Current
Tax credit carryforward	$ 56,937	$ 160,788
Input tax	18,358	18,271
provisional payment	16,358	18,998
Others	33,403	38,024
	$ 124,516	$ 236,081

16. BORROWINGS

a. Short-term borrowings

	December 31
	2025	2024
Secured borrowings
Line of credit borrowings(Note 29)	$ 240,000	$ -
Unsecured borrowings
Line of credit borrowings	950,000	1,100,000
	$ 1,190,000	$ 1,100,000
Rate of interest per annum (%)
Secured borrowings	1.8	-
Unsecured borrowings	0.88-1.85	1.92-1.96

b. Long-term borrowings

	December 31
	2025	2024
Line of credit borrowings - due from January 2026 to July 2029, pay in installments from 2026 to 2029	$ 714,620	$ 571,607
Less: Current portion	(31,987)	(56,987)
Government loan discount (Note 24)	(2,414)	(3,904)
	$ 680,219	$ 510,716
Rate of interest per annum (%)	0.73-1.85	0.73-2.02

The Company has signed long-term credit contracts with the bank. According to the provisions of some credit contracts, the consolidated financial statements should maintain the specific financial ratio, which should be checked once every six months. As of the date the consolidated financial statements were authorized for issue, the Company has not violated the situation.

31 -

17. OTHER PAYABLES

	December 31
	2025	2024
Payables for salaries and bonuses	$ 193,966	$ 202,089
Payables for utility bills	22,227	17,952
Payables for purchases of equipment	13,233	15,938
Payables for exporting expense	14,054	18,786
Others	82,912	102,244
	$ 326,392	$ 357,009

18. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company and SAC adopted a pension plan under the Labor Pension Act (LPA), which is a state-managed defined contribution plan. Under the LPA, an entity makes monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages.

SSI and SSZ participated in the social insurance plan managed and coordinated by local government agencies in China. The defined contribution plan provide the government with endowment insurance expenses to manage the social insurance plan, which is listed as current expenses when contribution is made.

SSH and SIC are established and registered in the Samoa Islands, while GFI is established and registered in the British Cayman Islands, where there is no need to formulate retirement methods and systems. According to local laws and regulations, SSA does not need to be allocated pension by the company.

b. Defined benefit plans

The defined benefit plans adopted by the Company in accordance with the Labor Standards Act is operated by the government of the ROC. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the 6 months before retirement. The Company contribute amounts equal to 2% of total monthly salaries and wages to a pension fund administered by the pension fund monitoring committee. Pension contributions are deposited in the Bank of Taiwan in the committee's name. Before the end of each year, the Group assesses the balance in the pension fund. If the amount of the balance in the pension fund is inadequate to pay retirement benefits for employees who conform to retirement requirements in the next year, the Group is required to fund the difference in one appropriation that should be made before the end of March of the next year. The pension fund is managed by the Bureau of Labor Funds, Ministry of Labor (the "Bureau"); the Group has no right to influence the investment policy and strategy.

The amounts included in the consolidated balance sheets in respect of the Group's defined benefit plans were as follows:

	December 31
	2025	2024
Present value of defined benefit obligation	$ 33,147	$ 35,494
Fair value of plan assets	(59,825)	(59,798)
Net defined benefit assets	$ (26,678)	$ (24,304)

Movements in net defined benefit liabilities (assets) were as follows:

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Liabilities (Assets)
Balance at January 1, 2024	$ 36,444	$ (53,883)	$ (17,439)
Service cost
Current service cost	246	-	246
Net interest expense (income)	455	(677)	(222)
Recognized in profit or loss	701	(677)	24
Remeasurement
Return on plan assets	-	(4,887)	(4,887)
Actuarial loss – changes in demographic assumptions	(753)	-	(753)
Actuarial loss – experience adjustments	(898)	-	(898)
Recognized in other comprehensive income	(1,651)	(4,887)	(6,538)
Contributions from the employer	-	(351)	(351)
Benefits paid	-	-	-
Balance at December 31, 2024	35,494	(59,798)	(24,304)
Service cost
Current service cost	246	-	243
Prior service cost	1,357	-	1,357
Net interest expense (income)	532	(897)	(365)
Recognized in profit or loss	2,132	(897)	1,235
Remeasurement
Return on plan assets	-	(4,164)	(4,164)
Actuarial loss – changes in financial assumptions	307	-	307
Actuarial loss – experience adjustments	248	-	248
Recognized in other comprehensive income	555	(4,164)	(3,609)
Contributions from the employer	-	-	-
Benefits paid	(5,034)	5,034	-
Balance at December 31, 2025	$ 33,147	$ (59,825)	$ (26,678)

Through the defined benefit plans under the Labor Standards Act, the Group is exposed to the following risks:

1) Investment risk: The plan assets are invested in domestic and foreign equity and debt securities, bank deposits, etc. The investment is conducted at the discretion of the Bureau or under the mandated management. However, in accordance with relevant regulations, the return generated by plan assets should not be below the interest rate for a 2-year time deposit with local banks.

2) Interest risk: A decrease in the government bond interest rate will increase the present value of the defined benefit obligation; however, this will be partially offset by an increase in the return on the plans' debt investments.

3) Salary risk: The present value of the defined benefit obligation is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the present value of the defined benefit obligation.

The actuarial valuations of the present value of the defined benefit obligation were carried out by qualified actuaries. The significant assumptions used for the purposes of the actuarial valuations were as follows:

	December 31
	2025	2024
Discount rates	1.375%	1.5%
Expected rates of salary increase	2.5%	2.5%

If possible reasonable changes in each of the significant actuarial assumptions will occur and all other assumptions will remain constant, the present value of the defined benefit obligation would increase (decrease) as follows:

	December 31
	2025	2024
The Company
Discount rate
0.25% increase	$ (607)	$ (728)
0.25% decrease	$ 634	$ 753
Expected rate of salary
0.25% increase	$ 617	$ 733
0.25% decrease	$ (594)	$ (712)

The above sensitivity analysis may not be representative of the actual change in the present value of the defined benefit obligation as it is unlikely that changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

	December 31
	2025	2024
Expected contributions to the plan for the next year	$ -	$ -
Average duration of the defined benefit obligation	12 years	8 years

19. EQUITY

a. Ordinary shares

	December 31
	2025	2024
Number of shares authorized (in thousands)	500,000	500,000
Shares authorized	$ 5,000,000	$ 5,000,000
Number of shares issued and fully paid (in thousands)	199,994	199,994
Shares issued	$ 1,999,942	$ 1,999,942

Fully paid ordinary shares, which have a par value of $10, carry one vote per share and carry a right to dividends.

b. Capital surplus

December 31
2025	2024

May be used to offset a deficit, distributed as cash dividends, or transferred to share capital

Issuance of ordinary shares

$ 1,911,126 $ 1,911,126

Note: Including the amount of issued share capital exceeding the par value during seasoned equity offering, and the amount transferred from capital reserves to employee shares when employee shares are executed and expired. Such capital surplus may be used to offset a deficit; in addition, when the Company has no deficit, such capital surplus may be distributed as cash dividends or transferred to share capital (limited to a certain percentage of the Company's capital surplus and to once a year).

c. Retained earnings and dividends policy

Under the dividends policy as set forth in the Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve 10% of the remaining profit, except when the accumulated amount a such legal reserve equals to the Company's total issued capital, and setting aside or reversing a special reserve in accordance with the laws and regulations. Any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders' meeting for distribution of dividends and bonuses to shareholders.

The Company may distribute more than 20% of the profit after tax of the year as shareholder dividends based on financial, business, and operational considerations; based on capital expenditures, business expansion needs, and sound financial planning for sustainable development, when distributing shareholder dividends, it can be paid in the form of cash or stock, but the cash dividend is limited to not less than 20% of the total dividends distributed to shareholders in the current year.

If there is no profit or the distributable profit is far lower than the previous year's amounts distributed, or in consideration of financial, business and operating factors, the appropriation for capital reserve shall be in accordance with relevant laws or regulations or as requested by the authorities in charge.

A distribution plan is also to be made by the board of directors and should be resolved in the shareholder's meeting. The dividends could be distributed in whole or in part by cash after the resolution has been passed by more than half of the directors present at the meeting of the board of directors, in which at least two-thirds of the total number of directors should be present. In addition, a report of such distribution shall be submitted to the shareholders' meeting.

For the policies on the distribution of compensation of employees and remuneration of directors after the amendment, refer to Note 21.

An appropriation of earnings to a legal reserve should be made until the legal reserve equals the Company's paid-in capital. The legal reserve may be used to offset deficits. If the Company has no deficit and the legal reserve has exceeded 25% of the Company's paid-in capital, the excess may be transferred to capital or distributed in cash.

The appropriations of cash dividends per share for 2024 and 2023 approved in the shareholders' meeting in May 2025 and 2024, respectively, were as follows:

The appropriations of earnings for 2025 had been proposed by the Company's board of directors on February 25, 2026. The appropriations and dividends per share were as follows:

	Appropriation of Earnings		Dividends Per Share (NT$)
	For the Year Ended December 31		For the Year Ended December 31
	2024	2023	2024	2023
Legal reserve	$ 54,975	$ 31,550
Special reserve (reversed)	(261,992)	64,438
Cash dividends	359,989	159,995	$ 1.8	$ 0.8
	Appropriation of Earnings	Dividends Per Share (NT$)
---	---	---
Legal reserve	$ 8,179
Special reserve	110,636
Cash dividends		$ 1

d. Special reserve

	For the Year Ended December 31
	2025	2024
Balance, beginning of year	$ 334,900	$ 270,462
Appropriations(Reversed)	(261,992)	64,438
Balance, end of year	$ 72,908	$ 334,900

If a special reserve appropriated on the first-time adoption of IFRSs relates to exchange differences on translation of the financial statements of foreign operations (including the subsidiaries of the Group), the special reserve will be reversed on a proportionate basis according to the Group's disposal of foreign operations; on the Group's loss of significant influence, however, the entire special reserve will be reversed. Additional special reserve should be appropriated for the amount equal to the difference between net debit balance reserves and the special reserve appropriated on the first-time adoption of IFRSs. Any special reserve appropriated may be reversed to the extent that the net debit balance reverses and, thereafter, distributed.

REVENUE

	For the Year Ended December 31
	2025	2024
Faucet parts	$ 3,522,119	$ 4,213,613
Faucet assemblies	2,106,403	2,704,169
Others	659,824	654,630
	$ 6,288,346	$ 7,572,412

EMPLOYEE BENEFITS EXPENSE, DEPRECIATION AND AMORTIZATION EXPENSES

	Operating Costs	Operating Expenses	Total
For the Year Ended December 31, 2025
Short-term employee benefits	$ 1,160,908	$ 310,047	$ 1,470,955
Post-employment benefits
Defined contribution plans	76,478	16,768	93,246
Defined benefit plans	232	1,003	1,235
Other employee benefits	51,529	21,576	73,105
Depreciation expenses	608,761	52,511	661,272
Amortization expenses	11,373	5,930	17,303
For the Year Ended December 31, 2024
Short-term employee benefits	1,230,568	338,794	1,569,362
Post-employment benefits
Defined contribution plans	69,314	16,395	85,709
Defined benefit plans	-	24	24
Other employee benefits	61,272	23,442	84,714
Depreciation expenses	642,814	60,134	702,948
Amortization expenses	17,020	6,758	23,778

According to the Articles of Incorporation of the Company, the Company accrues compensation of employees and remuneration of directors at rates of no less than 2% and no higher than 1%, respectively, of individual net profit before income tax, compensation of employees, and the remuneration of directors.

In accordance with the amendment to the Securities and Exchange Act in August 2024, the Company follows to adopt an amendment to the Articles of Incorporation at the 2025 Shareholders' Meeting, stipulating that the Company shall allocate not less than 5% and not more than 5% of the Company's individual pre-tax profits before deducting the distribution of employee and director remuneration in the current year for employee remuneration and director remuneration, respectively, of which not less than 3% of the profit shall be allocated as grassroots employee remuneration.

The compensation of employees and remuneration of directors for the years ended December 31, 2025 and 2024 which have been approved by the Company's board of directors on January 21, 2026 and January 22, 2025, respectively, were as follows:

	For the Year Ended December 31
	2025		2024
	Accrual rate	Amount	Accrual rate	Amount
Compensation of employees	25.29%	$ 33,991	6.69%	$ 45,563
Remuneration of directors	-	-	-	-

If there will be a change in the amounts after the annual consolidated financial statements are authorized for issue, the differences are recorded as a change in the accounting estimate.

There was no difference between the actual amounts of compensation of employees and remuneration of directors and supervisors paid and the amounts recognized in the consolidated financial statements for the years ended December 31, 2024 and 2023.

Information on the compensation of employees and remuneration of directors and supervisors resolved by the Company's board of directors is available at the Market Observation Post System website of the Taiwan Stock Exchange.

22. INCOME TAXES

a. The income tax expense recognized in profit or loss

Major components of income tax expense are as follows:

	For the Year Ended December 31
	2025	2024
Current tax
In respect of the current year	$ 11,501	$ 51,502
Income tax of unappropriated earnings	19,839	2,976
Adjustments for prior years	231	4,286
	31,571	58,764
Deferred tax
In respect of the current year	409	85,923
Income tax expense recognized in profit or loss	$ 31,980	$ 144,687

A reconciliation of accounting profit and income tax expense is as follows:

	For the Year Ended December 31
	2025	2024
Profit before tax from continuing operations	$ 110,720	$ 688,968
Income tax expense calculated at the statutory rate	$ 29,970	$ 177,899
Net profit or loss not included in taxation	(15,762)	(41,244)
Income tax on unappropriated earnings	19,839	2,976
Unrecognized deductible temporary differences and loss carryforwards	(2,298)	770
Adjustments for prior years’ tax	231	4,286
Income tax expense recognized in profit or loss	$ 31,980	$ 144,687

SSH, SIC and GFI do not levy local income tax for profit-making enterprises, so there is no income tax. SSA calculates income tax for profit-seeking enterprises in accordance with the local tax laws of the United States.

SSZ and SSI are subject to a 25% income tax rate in accordance with the Enterprise Income Tax Law of the People's Republic of China.

b. Deferred tax assets and liabilities

For the Year Ended December 31, 2025

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Exchange Difference	Closing Balance
Deferred tax assets
Temporary differences
Allowance for inventory devaluation	$ 80,258	$ 9,430	$ -	$ (334)	$ 89,354
Others	25,556	(5,613)	(721)	(354)	18,868
	105,814	3,817	(721)	(688)	108,222
Loss carryforwards	-	34,854	-	-	34,854
	$ 105,814	$ 38,671	$ (721)	$ (688)	$ 143,076
Deferred tax liabilities
Temporary differences
Property, plant and equipment	$ 232,545	$ 30,692	$ -	$ -	$ 263,237
Others	-	8,388	-	-	8,388
	$ 232,545	$ 39,080	$ -	$ -	$ 271,625

For the Year Ended December 31, 2024

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Exchange Difference	Closing Balance
Deferred tax assets
Temporary differences
Allowance for inventory devaluation	$ 86,410	$ (7,301)	$ -	$ 1,149	$ 80,258
Others	28,687	(2,690)	(1,308)	867	25,556
	115,097	(9,991)	(1,308)	2,016	105,814
Loss carryforwards	46,224	(46,224)	-	-	-
	$ 161,321	$ (56,215)	$ (1,308)	$ 2,016	$ 105,814
Deferred tax liabilities
Temporary differences
Property, plant and equipment	$ 202,837	$ 29,708	$ -	$ -	$ 232,545

c. Unused loss carryforwards for which no deferred tax assets have been recognized in the consolidated balance sheets:

	December 31
	2025	2024
Loss carryforwards
Due to 2026	$ 3,553	$ 3,553
Due to 2027	749	749
Due to 2028	90,009	100,667
Due to 2029	38,903	40,384
Due to 2031	4,787	4,787
Due to 2032	4,632	4,832
Due to 2033	97,152	100,828
Due to 2034	51,435	53,417
Due to 2035	5,290	-
Due to 2041	3,232	3,371
	$ 299,742	$ 312,588

d. Information about unused loss carryforwards

Loss carryforwards as of December 31, 2025 comprised:

Unused Amount	Expiry Year
$ 3,553	2026
749	2027
90,009	2028
38,903	2029
388	2030
4,787	2031
4,632	2032
118,868	2033
51,435	2034
157,452	2035
3,232	2041
$ 474,008

e. The information of unrecognized deferred income tax liabilities associated with investments

As of December 31, 2025 and 2024, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred income tax liabilities amounted to NT$3,308,806 thousand and NT$3,352,003 thousand, respectively.

f. Income tax assessments

The tax returns of the Company and SAC through 2023 have been assessed by the tax authorities.

EARNINGS PER SHARE

	Net Profit Attributable to Owners of the Company	Number of Shares (In Thousands)	Earnings Per Share (NT$)
For the Year Ended December 31, 2025
Basic earnings per share
Profit for the year attributable to owners of the Company	$ 78,905	199,994	$ 0.39
Effect of potentially dilutive ordinary shares
Compensation of employees	-	1,768
Diluted earnings per share
Profit for the year attributable to owners of the Company plus effect of potentially dilutive ordinary shares	$ 78,905	201,762	$ 0.39
For the Year Ended December 31, 2024
Basic earnings per share
Profit for the year attributable to owners of the Company	$ 544,524	199,994	$ 2.72
Effect of potentially dilutive ordinary shares
Compensation of employees	-	1,516
Diluted earnings per share
Profit for the year attributable to owners of the Company plus effect of potentially dilutive ordinary shares	$ 544,524	201,510	$ 2.70

The Group may settle the compensation of employees in cash or shares; therefore, the Group assumes that the entire amount of the compensation will be settled in shares, and the resulting potential shares are included in the weighted average number of shares outstanding used in the computation of diluted earnings per share, as the effect is dilutive. Such dilutive effect of the potential shares is included in the computation of diluted earnings per share until the number of shares to be distributed to employees is resolved in the following year.

GOVERNMENT GRANTS

As of December 31, 2025, the Group received a government grant of $93,448 thousand for its "Reward and subsidy funds after the technological transformation of enterprises" and "GEF grants". The amount was recognized as deferred revenue and subsequently transferred to profit or loss over the useful life of the related asset. This policy resulted in a credit to income of $9,318 thousand and $10,840 thousand during the years ended December 31, 2025 and 2024, respectively.

In addition, as of December 31, 2025, the Company received an interest-free loan of $949,463 thousand from the government's "Welcome Taiwan Businessmen to Return to Taiwan Investment Action Plan" for capital expenditure and operating turnover. The loan will be paid in installments from 2022 to 2029 using prevailing market interest rates for an equivalent loan of 1.1%-1.6%, the fair value of the loan was estimated at $925,884 thousand on initial recognition. The difference of $23,578 thousand between the proceeds and the fair value of the loan is the benefit derived from the interest-free loan and has been recognized as deferred revenue. The revenue was transferred to other income when training expenses were incurred. For the years ended December 31, 2025 and 2024, the amount transferred to other income was

40 -

$1,055 thousand and $2,079 thousand, respectively, and interest expense recognized on this loan was $2,446 thousand and $4,159 thousand, respectively, and interest paid was $957 thousand and $2,200 thousand, respectively.

If the Company fails to comply with the key requirements of the project loan during the lending period, causing the National Development Fund to stop the appropriation of the commission fee for the loan, the Company will pay the original agreed interest rate plus the annual interest rate instead.

25. NON-CASH TRANSACTIONS

The investment and financing activities of the non-cash transactions of the Group in 2025 and 2024 were $2,403 thousand and $13,693 thousand, respectively, under the accounts payable for equipment for the acquisition of property, plant and equipment.

26. CAPITAL MANAGEMENT

The Group manages its capital to ensure that entities in the Group will be able to continue as going concerns while maximizing the return to stakeholders through the optimization of the debt and equity balance. The Group's overall strategy remains unchanged.

The capital structure of the Group consists of net debt (borrowings offset by cash and cash equivalents) and equity of the Group (comprising issued capital, reserves, retained earnings, other equity and non-controlling interests).

The Group is not subject to any externally imposed capital requirements.

Key management personnel of the Group review the capital structure quarterly. As part of this review, the key management personnel consider the cost of capital and the risks associated with each class of capital. Based on recommendations of the key management personnel, in order to balance the overall capital structure, the Group may adjust the amount of dividends paid to shareholders, the number of new shares issued or repurchased, and the amount of new debt issued or existing debt redeemed.

27. FINANCIAL INSTRUMENTS

a. Fair value of financial instruments not measured at fair value

The Group's management believes that the carrying amounts of financial assets and financial liabilities that are not measured at fair value approximate their fair values or that their fair value cannot be measured reliably.

b. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Financial assets at amortized cost (1)	$ 4,307,353	$ 3,727,037
Financial liabilities
Financial liabilities at amortized cost (2)	$ 2,761,849	$ 2,425,012

1) The balances included financial assets measured at amortized cost, which comprise cash and cash equivalents, notes receivable, trade receivables, other receivables, refundable deposits and other financial assets.

2) The balances included financial liabilities measured at amortized cost, which comprise short-term borrowings, trade payables, other payables, long-term borrowings (including those due within one year) and guarantee deposits received.

c. Financial risk management objectives and policies

The Group’s major financial instruments include trade receivables, trade payables, lease liabilities and borrowings. The Group’s corporate treasury function provides services to the business, coordinates access to domestic and international financial markets, and monitors and manages the financial risks relating to the operations of the Group through internal risk reports that analyze exposures by degree and magnitude of risks. These risks include market risk (including foreign currency risk, interest rate risk and other price risk), credit risk and liquidity risk.

The Group seeks to minimize the effects of these risks by using derivative financial instruments to hedge risk exposures. The use of financial derivatives is governed by the Group’s policies approved by the board of directors, which provided written principles on foreign currency risk, interest rate risk, credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors on a continuous basis. The Group did not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

1) Market risk

The Group’s activities exposed it primarily to the financial risks of changes in foreign currency exchange rates (see (a) below) and interest rates (see (b) below). The Group entered into a variety of derivative financial instruments to manage its exposure to the risks arising from some foreign currency net assets or net liabilities due to exchange rate or interest rate fluctuations.

There has been no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured. The primarily financial risks were as follows:

a) Foreign currency risk

The Group engages in sales and purchase transactions denominated in foreign currencies, which expose the Group to foreign currency risk. Exchange rate exposures are managed within approved policy parameters utilizing foreign exchange forward contracts.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities (including those eliminated on consolidation) and of the derivatives exposed to foreign currency risk at the end of the year are set out in Note 31.

Sensitivity analysis

The Group was mainly exposed to the USD and RMB. When the NTD had changed by 1% against the USD, the pre-tax profit for the years ended December 31, 2025 and 2024 would have changed by $21,558 thousand and $26,131 thousand. When the NTD had changed by 1% against the RMB, the pre-tax profit for the years ended December 31, 2025 and 2024 would have changed by $1,802 thousand and $2,210 thousand, respectively.

In the management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign currency risk because the exposure at the end of the year did not reflect the exposure during the year.

42 -

b) Interest rate risk

The Group is exposed to interest rate risk because of deposits and loans at both fixed and floating interest rates. The carrying amounts of the Group’s financial assets and financial liabilities with exposure to interest rates at the end of the year were as follows:

	December 31
	2025	2024
Fair value interest rate risk
Financial assets	$ 1,570,044	$ 742,853
Financial liabilities	2,219,660	2,188,732
Cash flow interest rate risk
Financial assets	508,495	409,283

Sensitivity analysis

For financial assets and liabilities with floating interest rates, if interest rates had been 4 basis points (1%) higher or lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2025 and 2024 would have decreased or increased by $5,085 thousand and $4,093 thousand, respectively.

2) Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a financial loss to the Group. At the end of the year, the Group’s maximum exposure to credit risk, which would cause a financial loss to the Group due to the failure of the counterparty to discharge its obligation, could be equal to the total of the carrying amount of the respective recognized financial assets as stated in the balance sheets.

The Group’s concentration of credit risk of 80% and 82% of total trade receivables as of December 31, 2025 and 2024, respectively, was attributable to the Group’s three largest customers.

3) Liquidity risk

The Group manages liquidity risk by monitoring and maintaining a level of cash and cash equivalents deemed adequate to finance the Group’s operations and mitigate the effects of fluctuations in cash flows. In addition, management monitors the utilization of bank borrowings and ensures compliance with loan covenants.

The Group relies on bank borrowings as a significant source of liquidity. As of December 31, 2025 and 2024, the Group had available unutilized bank loan facilities of $8,861,380 thousand and $10,328,393 thousand, respectively.

The liquidity and interest rate risk table below illustrates the maturity analysis of the financial liabilities of the Group within the repayment period. Non-derivative financial liabilities are prepared in terms of undiscounted cash flow on the earliest date when the Group may be required to satisfy the liabilities. The table had been drawn up based on the undiscounted gross inflows and outflows on those derivatives that require gross settlement.

43 -

44 -

	Less Than 3 Months	3 Months - 1 Year	1-5 Years	5+ Years
December 31, 2025
Non-interest bearing	$ 856,138	$ -	$ -	$ -
Lease liabilities	14,235	31,526	63,263	309,636
Fixed interest rate liabilities	1,190,000	31,987	680,219	-
	$ 2,060,373	$ 63,513	$ 743,482	$ 309,636
December 31, 2024
Non-interest bearing	$ 755,436	$ -	$ -	$ -
Lease liabilities	15,095	45,230	108,480	468,133
Fixed interest rate liabilities	1,100,000	56,987	510,716	-
	$ 1,870,531	$ 102,217	$ 619,196	$ 468,133

Further information on the maturity analysis of the lease financial liabilities was as follows:

	Less than 5 Year	5-10 Years	11-15 Years	16-20 Years	20+ Years
December 31, 2025
Lease liabilities	$ 109,024	$ 43,306	$ 43,306	$ 43,306	$ 179,718
December 31, 2024
Lease liabilities	$ 168,805	$ 63,692	$ 63,692	$ 63,692	$ 277,057

28. TRANSACTIONS WITH RELATED PARTIES

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of significant transactions between the Group and other related parties are disclosed below.

a. Related party name and category

Related Party	Relationship with the Group
Yang, Ching-Chi	President
Yang, Ceng-Fa	Second-degree relationship of the key management
Yang, Li-Yu	Second-degree relationship of the key management
Yang, Kuei-Feng	Second-degree relationship of the key management
Yang, Shu-Chuan	Second-degree relationship of the key management
Yang, Shu-Hui	Second-degree relationship of the key management
Huang, Bi-Hua	Second-degree relationship of the key management

b. Lease arrangements

The Group leased the plant from the second-degree relationship of the key management. The lease period was from January, 2025 to December, 2026. Lease periods and collections of rentals are in compliance with the lease contracts. Rentals are collected on a monthly basis. The lease payments are both $6,117 thousand for the year ended December, 2025 and 2024.

Line Item	Related Party Name	December 31
		2025	2024
Lease liability	President and second-degree relationship of the key management	$ 6,065	$ 6,065
		For the Year Ended December 31
	Related Party Name	2025	2024
Interest expense
President and second-degree relationship of the key management		$ 52	$ 52

c. Remuneration of key management personnel

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 57,584	$ 60,071
Post-employment benefits	2,338	2,362
	$ 59,922	$ 62,433

The remuneration of directors and other key executives is based on relevant internal management methods, and the performance of the management is also considered. After deliberation by the remuneration committee, it is submitted to the board of directors.

ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The following assets had been offered as collateral for deposits and bank loan facilities for use of electronics, leases and investments:

	December 31
	2025	2024
Pledged deposits (classified as Financial assets at amortized cost -non-current)	$ 331,823	$ 37,903
Property, plant and equipment	1,411,749	1,451,681
	$ 1,743,572	$ 1,489,584

46 -

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

The unrecognized commitments of the Group are as follows:

	December 31
	2025	2024
Acquisition of property, plant and equipment	$ 5,183	$ 5,386

31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

The Group's significant financial assets and liabilities denominated in foreign currencies aggregated by the foreign currencies other than functional currencies of the entities in the Group and the related exchange rates between the foreign currencies and the respective functional currencies are as follows:

	December 31, 2025			December 31, 2024
	Foreign Currency	Exchange Rate	Carrying Amount	Foreign Currency	Exchange Rate	Carrying Amount
Financial assets
Monetary items
USD (USD:NTD)	$ 79,913	31.43	$ 2,511,658	$ 85,766	32.785	$ 2,811,831
USD (USD:RMB)	81,004	7.023	2,545,956	93,221	7.1879	3,056,265
RMB (RMB:NTD)	42,790	4.496	192,383	49,348	4.478	220,981
Financial liabilities
Monetary items
USD (USD:NTD)	$ 91,654	31.43	$ 2,880,683	$ 99,151	32.785	$ 3,250,659
USD (USD:RMB)	673	7.023	21,145	132	7.1879	4,326
RMB (RMB:NTD)	2,706	4.496	12,166	1	4.478	3

The Group is mainly exposed to the USD. The following information was aggregated by the functional currencies of the entities in the Group, and the exchange rates between the respective functional currencies and the presentation currency were disclosed. The significant (realized and unrealized) foreign exchange gains (losses) are as follows:

	For the Year Ended December 31
	2025		2024
Foreign Currency	Exchange Rate	Net Foreign Exchange Gain (Loss)	Exchange Rate	Net Foreign Exchange Gain
NTD	1 (NTD:NTD)	$ 56,076	1 (NTD:NTD)	$ 95,755
RMB	4.363 (RMB:NTD)	(61,382)	4.498 (RMB:NTD)	43,596
		$ (5,306)		$ 139,351

32. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and b. investees:

1) Financing provided to others. (Table 1)
2) Endorsements/guarantees provided. (None)
3) Marketable securities held (excluding investments in subsidiaries. (None))

4) Total purchases from or sales to related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 2)

5) Receivables from related parties amounting to at least NT$100 million or 20% of the paid-in capital. (Table 3)

6) Other: intercompany relationships and significant intercompany transactions. (Table 4)

7) Information on investees. (Table 5)

c. Information on investments in mainland China

1) Information on any investee company in mainland China, showing the name, principal business activities, paid-in capital, method of investment, inward and outward remittance of funds, ownership percentage, investment income or loss, carrying amount of the investment at the end of the period, repatriations of investment income, and limit on the amount of investment in the mainland China area. (Table 6)

2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third party, and their prices, payment terms, and unrealized gains or losses:

a) The amount and percentage of purchases and the balance and percentage of the related payables at the end of the period. (Table 2)

b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the period. (Tables 2)

c) The amount of property transactions and the amount of the resultant gains or losses. (None)

d) The balance of negotiable instrument endorsements or guarantees or pledges of collateral at the end of the year and the purposes. (None)

e) The highest balance, the end of year balance, the interest rate range, and total current period interest with respect to financing of funds. (Table 1)

f) Other transactions that have a material effect on the profit or loss for the period or on the financial position, such as the rendering or receipt of services. (None)

SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance focuses on the region of operation. The Company is mainly engaged in the production and sales of bathroom spare parts. The production process and marketing strategy are the same. Due to the differences in language and culture and the retention of the management team of the Group, it must be managed differently according to the location. The reportable segments of the Company are as follows:

Asia Operations Area - Production and Sales in Asia.

North America Operation Area - Production and Sales in North America.

The revenue and operating results of the consolidated company's operating units are analyzed according to the reporting department as follows:

47 -

a. Segment revenue and results

	For the Year Ended December 31
	Segment Revenue		Segment Profit
	2025	2024	2025	2024
Asia operations area	$ 5,578,216	$ 6,850,723	$ 288,658	$ 758,420
North America operations area	710,130	721,689	31,337	(2)
Total from operations	$ 6,288,346	$ 7,572,412	319,995	758,418
Intercompany offset			(29,886)	(30,733)
Interest income			49,936	70,241
Net foreign exchange gain (loss)			(5,307)	139,351
Allocation of central administration costs and directors’ salaries			(188,671)	(192,961)
Interest expenses			(33,684)	(53,942)
Loss on financial assets at FVTPL			-	(518)
Loss on disposal of property, plant and equipment			(1,663)	(888)
Profit before income tax			$ 110,720	$ 688,968

Segment revenue reported above represents revenue generated from external customers. The intersegment sales are $28,120 thousand and $33,564 thousand for the years ended December 31, 2025 and 2024, respectively.

Segment profit represented the profit before tax earned by each segment without allocation of central administration costs and directors' salaries, interest income, gain (loss) on disposal of property, plant and equipment, net foreign exchange gain (loss), valuation gain (loss) on financial assets (liabilities) at FVTPL, interest expense and income tax expense. This was the measure reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance.

b. Segment total assets and liabilities

	December 31
	2025	2024
Segment assets
Asia operation area	$10,580,964	$10,789,695
North America operation area	666,332	683,617
Total segment assets	$11,247,296	$11,473,312
Segment liabilities
Asia operation area	$3,553,189	$3,378,433
North America operation area	84,962	96,736
Total segment liabilities	$3,638,151	$3,475,169

c. Revenue from major products: Note 20
d. Information about major customers

	For the Year Ended December 31
	2025		2024
	Amount	%	Amount	%
Customer A	$ 3,961,902	63	$ 4,908,727	65

TABLE 1

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

No.	Lender	Borrower	Financial Statement Account	Related Party	Highest Balance for the Period	Ending Balance	Actual Amount Borrowed (Note 3)	Interest Rate	Nature of Financing (Note 1)	Business Transaction Amount	Reasons for Short-term Financing	Allowance for Impairment Loss	Collateral		Financing Limit for Each Borrower	Aggregate Financing Limit
													Item	Value
1	SSI	The Corporation	Other receivables from related parties	Yes	$ 1,128,904	$ 422,357	$ 422,357	-	2	$ -	Operation turnover	$ -	-	$ -	$ 2,215,115 (Note 2)	$ 2,215,115 (Note 2)
2	SSZ	The Corporation	Other receivables from related parties	Yes	937,196	483,792	483,792	-	2	-	Operation turnover	-	-	-	2,153,596 (Note 2)	2,153,596 (Note 2)

Note 1: The nature of financing is numbered as follows:
1. A company that has business dealings with the lender.
2. A company with short-term financing needs.

Note 2: For those who need capital loans due to business transactions, the loan amount shall not exceed the amount of business transactions between the two parties. Fund loans required for short-term financing shall not exceed 40% of the net value of the lending company, provided that the target of the fund loan is the parent company or parent company in the Republic of China that directly and indirectly holds 100% of the voting shares of the company. For companies outside the Republic of China that directly and indirectly hold 100% of the voting shares, the limit shall not exceed 100% of the net value of the company that lent funds.

Note 3: Significant intercompany accounts and transactions have been eliminated.

TABLE 2

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES AMOUNTING TO 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, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Transaction Details				Abnormal Transaction		Notes/Accounts Receivable (Payable)
			Purchase/Sale	Amount (Note 1)	% to Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% to Total
The Corporation	SSI	See Note 11 from consolidated financial statements.	Purchase	$ 1,175,639	29	(Note 2)	$ -	-	$ (838,420)	28
	SSZ	See Note 11 from consolidated financial statements.	Purchase	1,208,676	30	(Note 2)	-	-	(793,293)	26
SSI	The Corporation	See Note 11 from consolidated financial statements.	Sale	RMB 267,306	88	(Note 2)	-	-	RMB 187,344	95
SSZ	The Corporation	See Note 11 from consolidated financial statements.	Sale	RMB 273,278	88	(Note 2)	-	-	RMB 177,260	88

Note 1: Significant intercompany accounts and transactions have been eliminated.
Note 2: See Note 8 from consolidated financial statements.

50 -

TABLE 3

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

RECEIVABLES FROM RELATED PARTIES AMOUNTING TO AT LEAST NT$100 MILLION OR 20% OF THE PAID-IN CAPITAL

DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Company Name	Related Party	Relationship	Ending Balance (Note)	Turnover Rate (Times)	Overdue		Amounts Received in Subsequent Period	Allowance for Impairment Loss
						Amount			Actions Taken
SSI	The Corporation	See Note 11 from consolidated financial statements.	Other receivables	USD	13,438		USD	-	-	USD	6,576
SSI	The Corporation	See Note 11 from consolidated financial statements.	Trade receivables	USD	26,676	1.28	USD	8,794	See the operation of SSI	USD	-
SSZ	The Corporation	See Note 11 from consolidated financial statements.	Other receivables	USD	15,393		USD	-	-	USD	4,376
SSZ	The Corporation	See Note 11 from consolidated financial statements.	Trade receivables	USD	24,796	1.41	USD	11,275	See the operation of SSZ	USD	-

Note : Significant intercompany accounts and transactions have been eliminated.

TABLE 4

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars)

No.	Investee Company	Counterparty	Relationship (Note 1)	Transaction Details
				Financial Statement Account	Amount (Note 2)	Payment Terms	% to Total Sales or Assets
0	The Corporation	SSI	1	Trade payables	$ 838,420	Net 60 days	8
			1	Purchases	1,175,639	Net 60 days	19
		SSZ	1	Trade payables	793,293	Net 60 days	7
			1	Purchases	1,208,676	Net 60 days	20

Note 1: Relationship of investee company to counterparty: (1) parent company to subsidiary; (2) subsidiary to parent company; (3) subsidiary to subsidiary.
Note 2: For the standard amount disclosed above, if it belongs to assets and liabilities, it is based on the disclosure standard of more than 1% of the consolidated total assets; if it is a profit and loss account, it is based on the disclosure standard of more than 1% of the consolidated total revenue. The above-mentioned related party transactions have been eliminated.
Note 3: The company purchased goods from SSZ and SSI respectively. As of December 31, 2025, the unrealized benefit of the countercurrent transaction was $27,666 (eliminated).

52 -

TABLE 5

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTEES

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investor Company	Investee Company	Location	Main Businesses and Products	Original Investment Amount		As of December 31, 2025			Net Income (Loss) of the Investee	Share of Profit (Loss)	Note
				December 31, 2025	December 31, 2024	Number of Shares	%	Carrying Amount
	Stock
The Corporation	SSH	Samoa	International investment	$ 1,404,738	$ 1,404,738	38,232,000	100	$ 4,631,821	USD 1,182	$ 37,359	Subsidiary
	SAC	Taichung City	Installment and selling of automatic control equipment	96,500	96,500	5,597,000	96.5	32,333	$ (5,635)	(3,513)	Subsidiary
	SSA	State of Delaware, USA	Production and sales of sanitation, construction equipment, metal molds, hardware parts and copper pipe fitting, etc.	500,748	500,748	1,715	100	582,471	USD 718	20,793	Subsidiary
SSH	GFI	Cayman Islands	International investment	USD 10,624	USD 10,624	8,900,000	100	USD 75,730	USD (1,006)	(Note 1)	Sub-Subsidiary
	SIC	Samoa	International investment	USD 23,632	USD 23,632	23,631,516	100	USD 71,536	USD 176	(Note 1)	Sub-Subsidiary

Note 1: Exempted from disclosure in accordance with regulations.
Note 2: Significant intercompany accounts and transactions have been eliminated.

TABLE 6

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

(In Thousands of New Taiwan Dollars, Unless Stated Otherwise)

Investee Company	Main Businesses and Products	Paid-in Capital	Method of Investment	Accumulated Outward Remittance for Investments from Taiwan as of January 1, 2025	Remittance of Funds		Accumulated Outward Remittance for Investments from Taiwan as of December 31, 2025	Net Income (Loss) of the Investee	% Ownership of Direct or Indirect Investment	Investment Gain (Loss) (Note 1)	Carrying Amount as of December 31, 2025	Accumulated Repatriation of Investment Income as of December 31, 2025
					Outward	Inward
SSI	Production and sales of sanitation, construction equipment, metal molds, hardware parts, etc.	$ 931,900	(Note 3)	$ 792,610	$ -	$ -	$ 792,610	$ 31,278	100	$ 31,278	$ 2,364,301	$ -
		RMB 225,870		USD 23,964			USD 23,964	RMB 7,009		USD 1,003	USD 72,224
		USD 29,650
SSZ	Production and sales of sanitation, construction equipment, metal molds, hardware parts, etc.	856,468	(Note 4)	689,805	-	-	689,805	5,617	100	5,617	2,220,391	-
		RMB 214,124		USD 21,512			USD 21,512	RMB 1,415		USD 180	USD 70,646
		USD 27,250
Accumulated Outward Remittance for Investments in Mainland China as of December 31, 2025	Investment Amounts Authorized by the Investment Commission, MOEA	Upper Limit on the Amount of Investments Stipulated by the Investment Commission, MOEA
---	---	---
$ 1,482,415	$ 2,012,767	(Note 2)
USD 45,476	USD 62,140

Note 1: Investment profit or loss are recognized based on the financial statements audited by the accountants of the parent company in Taiwan.
Note 2: In accordance with the "Principles for the Review of Investment or Technical Cooperation in the Mainland Area" issued by the Investment Review Commission on August 29, 2008, the consolidated company obtained the certificate of the scope of operations of the operating headquarters approved by the Industrial Bureau of the Ministry of Economic Affairs, and there is no upper limit on the amount of investment in the mainland area.
Note 3: Reinvest in mainland companies through third-region investment establishment companies (GFI).
Note 4: Reinvest in mainland companies through third-region investment establishment companies (SIC).

AI assistant

SSM — Audit Report / Information 2025

51964_rns_2026-03-30_4418af59-ee14-43bd-80af-10f2114da15c.pdf

Sunspring Metal Corporation and Subsidiaries

DECLARATION OF CONSOLIDATION OF FINANCIAL STATEMENTS OF AFFILIATES

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Revenue Recognition

Other Matter

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

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Notice to Readers

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

1. GENERAL INFORMATION

2. APPROVAL OF FINANCIAL STATEMENTS

3. APPLICATION OF NEW, AMENDED AND REVISED STANDARDS AND INTERPRETATIONS

4. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6. CASH AND CASH EQUIVALENTS

7. FINANCIAL ASSETS AT AMORTIZED COST

8. TRADE RECEIVABLES AND OTHER RECEIVABLE

9. FINANCE LEASE RECEIVABLE

10. INVENTORIES

11. SUBSIDIARIES

12. PROPERTY, PLANT AND EQUIPMENT

13. LEASE ARRANGEMENTS

15. OTHER ASSETS

16. BORROWINGS

17. OTHER PAYABLES

18. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

b. Defined benefit plans

19. EQUITY

22. INCOME TAXES

25. NON-CASH TRANSACTIONS

26. CAPITAL MANAGEMENT

27. FINANCIAL INSTRUMENTS

28. TRANSACTIONS WITH RELATED PARTIES

30. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

31. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

32. SEPARATELY DISCLOSED ITEMS

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

SUNSPRING METAL CORPORATION AND SUBSIDIARIES

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