Sheng Yu Steel Co., Ltd. and Subsidiaries

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

Deloitte.

勤業眾信

勤業眾信聯合會計師事務所

110421 台北市信義區松仁路100號20樓

Deloitte & Touche

20F, Taipei Nan Shan Plaza

No. 100, Songren Rd.,

Xinyi Dist., Taipei 110421, Taiwan

Tel: +886 (2) 2725-9988

Fax: +886 (2) 4051-6888

www.deloitte.com.tw

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholders
Sheng Yu Steel Co., Ltd.

Opinion

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

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 SIC Interpretations (SIC) endorsed and issued into effect by the Financial Supervisory Commission (FSC) of the Republic of China.

Basis for Opinion

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

Key Audit Matters

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

The key audit matter in the Group's consolidated financial statements for the year ended December 31, 2025 is as follows:

Recognition of Revenue

The main products of the Group are galvanized and prepainted steel coils; contribution of the sale of certain products to gross profit is significant. Management of the Group may manipulate revenue if it is under pressure to achieve its goal. We assessed that the main source of risk may arise from the occurrence of sales revenue.

Therefore, we identified the recognition of revenue from products with unit selling prices that are significantly higher than average, the amounts of sales with significant changes and the recognition of revenue from particular customers in sales as a key audit matter.

Refer to Note 4 to the consolidated financial statements for the related accounting policies and disclosures of revenue recognition. Our key audit procedures performed in respect of the abovementioned recognition of sales revenue included the following:

We understood the design and implementation of the internal controls and tested the operating effectiveness of controls related to the sales cycle.
We confirmed that the control of products had been transferred and the performance obligation was satisfied by selecting sample and checking the related delivery documents; we inspected the collection receipts of goods to verify that the counterparties of collections were consistent with those of the transactions.
We confirmed the accuracy of sales revenue by sending confirmation requests of sales revenue of the year.

Other Matter

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

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

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IFRS, IAS, IFRIC, and SIC endorsed and issued into effect by the FSC 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 Xiu -Wen Chen and Lee-Yuan Kuo.

Deloitte & Touche
Taipei, Taiwan
Republic of China

March 6, 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.

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	December 31, 2025		December 31, 2024
ASSETS	Amount	%	Amount	%
CURRENT ASSETS
Cash and cash equivalents (Notes 4 and 6)	$ 2,986,466	27	$ 2,767,824	24
Contract assets - current (Notes 4 and 22)	28,243	-	47,764	-
Notes receivable (Note 8)	27,667	-	9,013	-
Trade receivables (Note 8)	644,135	6	1,008,663	9
Other receivables (Note 8)	36,432	-	47,395	-
Inventories (Notes 4, 5 and 9)	1,843,816	16	2,137,813	19
Prepayments for purchase	169,347	1	142,026	1
Non-current assets held for sale (Note 10)	233,700	2	-	-
Other financial assets - current (Notes 7 and 30)	2,189,787	20	2,064,284	18
Other current assets	1,700	-	9,158	-
Total current assets	8,161,293	72	8,233,940	71
NON-CURRENT ASSETS
Investments accounted for using the equity method (Notes 4 and 12)	-	-	259,841	2
Property, plant and equipment (Notes 4 and 13)	2,458,715	22	2,361,531	21
Right-of-use assets (Notes 4 and 14)	15,492	-	10,621	-
Investment properties (Notes 4 and 15)	308,425	3	310,402	3
Computer software (Note 4)	16,015	-	15,672	-
Deferred tax assets (Notes 4 and 24)	92,362	1	84,498	1
Prepayments for equipment	108,322	1	119,426	1
Refundable deposits	5,363	-	2,944	-
Net defined benefit assets - non-current (Notes 4 and 20)	133,817	1	94,192	1
Other financial assets - non-current (Notes 7 and 30)	18,000	-	18,000	-
Other non-current assets	1,855	-	1,841	-
Total non-current assets	3,158,366	28	3,278,968	29
TOTAL	$ 11,319,659	100	$ 11,512,908	100
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term borrowings (Note 16)	$ 189,294	2	$ 151,735	1
Contract liabilities - current (Notes 4 and 22)	97,555	1	42,751	-
Notes payable (Note 17)	171	-	495	-
Trade payables (Note 17)	153,623	1	223,498	2
Trade payables to related parties (Notes 17 and 29)	89,166	1	122,707	1
Other payables (Note 18)	449,007	4	464,535	4
Current tax liabilities (Notes 4 and 24)	15,275	-	68,671	1
Lease liabilities - current (Notes 4 and 14)	4,975	-	5,438	-
Refund liabilities (Note 4)	59,082	-	54,217	-
Other current liabilities (Notes 4 and 19)	7,080	-	6,520	-
Total current liabilities	1,065,228	9	1,140,567	9
NON-CURRENT LIABILITIES
Provisions (Notes 4 and 19)	10,947	-	9,452	-
Deferred tax liabilities (Notes 4 and 24)	78,276	1	72,597	1
Lease liabilities - non-current (Notes 4 and 14)	9,927	-	4,597	-
Guarantee deposit	515	-	515	-
Total non-current liabilities	99,665	1	87,161	1
Total liabilities	1,164,893	10	1,227,728	10
EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY (Note 21)
Ordinary shares	3,211,800	28	3,211,800	28
Capital surplus	1,557,969	14	1,557,364	14
Retained earnings
Legal reserve	1,967,195	17	1,902,403	17
Special reserve	-	-	7,023	-
Unappropriated earnings	3,331,285	30	3,527,632	30
Total retained earnings	5,298,480	47	5,437,058	47
Other equity	7,105	-	5,496	-
Total equity attributable to owners of the Company	10,075,354	89	10,211,718	89
NON-CONTROLLING INTERESTS (Note 21)	79,412	1	75,462	1
Total equity	10,154,766	90	10,285,180	90
TOTAL	$ 11,319,659	100	$ 11,512,908	100

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

SHENG YU STEEL CO., LTD. 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)

	For the Year Ended December 31
	2025		2024
	Amount	%	Amount	%
OPERATING REVENUES (Notes 4, 22 and 29)	$ 13,270,890	100	$ 13,690,701	100
OPERATING COSTS (Notes 9, 20, 23 and 29)	11,903,711	90	12,376,090	90
GROSS PROFIT	1,367,179	10	1,314,611	10
OPERATING EXPENSES (Notes 20, 23 and 29)
Selling and marketing expenses	734,281	6	363,603	2
General and administrative expenses	251,646	2	242,116	2
Research and development expenses	87,261	-	83,741	1
Total operating expenses	1,073,188	8	689,460	5
PROFIT FROM OPERATIONS	293,991	2	625,151	5
NON-OPERATING INCOME AND EXPENSES (Note 23)
Interest income	74,717	-	76,663	-
Other income	183	-	180	-
Other gains and losses	(47,296)	-	61,011	-
Interest expense	(5,637)	-	(3,444)	-
Share of profit or loss of associates accounted for using the equity method	1,573	-	(24,757)	-
Total non-operating income	23,540	-	109,653	-
PROFIT BEFORE INCOME TAX	317,531	2	734,804	5
INCOME TAX EXPENSE (Notes 4 and 24)	65,419	-	144,857	1
NET PROFIT FOR THE YEAR	252,112	2	589,947	4
OTHER COMPREHENSIVE INCOME (Notes 20, 21 and 24)
Items that will not be reclassified subsequently to profit or loss
Remeasurement of defined benefit plans	29,725	-	83,407	1
Income tax relating to items that will not be reclassified subsequently to profit or loss	(5,945)	-	(16,681)	-
				(Continued)

SHENG YU STEEL CO., LTD. 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)

	For the Year Ended December 31
	2025		2024
	Amount	%	Amount	%
Items that may be reclassified subsequently to profit or loss
Exchange differences on translating the financial statements of foreign operations	$ 1,699	-	$ 14,480	-
Income tax relating to items that may be reclassified subsequently to profit or loss	-	-	(289)	-
Other comprehensive income for the year, net of income tax	25,479	-	80,917	1
TOTAL COMPREHENSIVE INCOME FOR THE YEAR	$ 277,591	2	$ 670,864	5
NET PROFIT ATTRIBUTABLE TO:
Owners of the Company	$ 239,101	2	$ 581,233	4
Non-controlling interests	13,011	-	8,714	-
	$ 252,112	2	$ 589,947	4
TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:
Owners of the Company	$ 264,506	2	$ 660,440	5
Non-controlling interests	13,085	-	10,424	-
	$ 277,591	2	$ 670,864	5
EARNINGS PER SHARE (Note 25)
Basic	$ 0.74		$ 1.81
Diluted	$ 0.74		$ 1.81

(Concluded)

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

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	Equity Attributable to Owners of the Company
	Ordinary Share	Capital Surplus	Retained Earnings				Exchange Differences on Translating the Financial Statements of Foreign Operations	Other Equity			Non-Controlling Interests	Total Equity
			Legal Reserve	Special Reserve	Unappropriated Earnings	Subtotal		Equity Directly Associated with Non-current Assets Held for Sale	Subtotal	Total
BALANCE, JANUARY 1, 2024	$ 3,211,800	$ 1,557,364	$ 1,846,723	$ 14,536	$ 3,329,355	$ 5,190,614	$ (7,025)	$ -	$ (7,025)	$ 9,952,753	$ 63,870	$ 10,016,623
Appropriation of 2023 earnings (Note 21)
Set aside as legal reserve	-	-	55,680	-	(55,680)	-	-	-	-	-	-	-
Reversal of special reserve	-	-	-	(7,513)	7,513	-	-	-	-	-	-	-
Cash dividends	-	-	-	-	(401,475)	(401,475)	-	-	-	(401,475)	-	(401,475)
	-	-	55,680	(7,513)	(449,642)	(401,475)	-	-	-	(401,475)	-	(401,475)
Net profit for the year ended December 31, 2024	-	-	-	-	581,233	581,233	-	-	-	581,233	8,714	589,947
Other comprehensive income for the year ended December 31, 2024, net of income tax	-	-	-	-	66,686	66,686	12,521	-	12,521	79,207	1,710	80,917
Total comprehensive income for the year ended December 31, 2024	-	-	-	-	647,919	647,919	12,521	-	12,521	660,440	10,424	670,864
Changes of non-controlling interests	-	-	-	-	-	-	-	-	-	-	(832)	(832)
BALANCE, DECEMBER 31, 2024	3,211,800	1,557,364	1,902,403	7,023	3,527,632	5,437,058	5,496	-	5,496	10,211,718	73,462	10,285,180
Appropriation of 2024 earnings (Note 21)
Set aside as legal reserve	-	-	64,792	-	(64,792)	-	-	-	-	-	-	-
Reversal of special reserve	-	-	-	(7,023)	7,023	-	-	-	-	-	-	-
Cash dividends	-	-	-	-	(401,475)	(401,475)	-	-	-	(401,475)	-	(401,475)
	-	-	64,792	(7,023)	(459,244)	(401,475)	-	-	-	(401,475)	-	(401,475)
Net profit for the year ended December 31, 2025	-	-	-	-	239,101	239,101	-	-	-	239,101	13,011	252,112
Other comprehensive income for the year ended December 31, 2025, net of income tax	-	-	-	-	23,796	23,796	521	1,088	1,609	25,405	74	25,479
Total comprehensive income for the year ended December 31, 2025	-	-	-	-	262,897	262,897	521	1,088	1,609	264,506	13,085	277,591
Actual disposal or acquisition of interests in subsidiaries	-	605	-	-	-	-	-	-	-	605	-	605
Changes of non-controlling interests	-	-	-	-	-	-	-	-	-	-	(7,135)	(7,135)
BALANCE, DECEMBER 31, 2025	$ 3,211,800	$ 1,557,969	$ 1,967,195	$ -	$ 3,331,285	$ 5,298,480	$ 6,017	$ 1,088	$ 7,105	$ 10,075,354	$ 79,412	$ 10,154,766

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

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	For the Year Ended December 31
	2025	2024
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before income tax	$ 317,531	$ 734,804
Adjustments for:
Depreciation expense	239,672	272,974
Amortization expense	6,990	5,238
Interest expense	5,637	3,444
Interest income	(74,717)	(76,663)
Share of net (profit) loss of associates accounted for using the equity method	(1,573)	24,757
Loss on disposal of property, plant and equipment	2,664	2,662
Loss on disposal of investments	2,459	-
Impairment loss on non-current assets held for sale	28,801	(4,130)
Write-down (reversal) of inventories	48,666	-
Unrealized net gain on foreign currency exchange	(73)	-
Idle capacity losses	37,557	17,297
Recognition of provisions	1,516	1,226
Others	51	(14)
Changes in operating assets and liabilities
Contract assets	19,521	(6,052)
Notes receivable	(18,583)	(7,303)
Trade receivables	364,530	(227,203)
Other receivables	10,655	(14,028)
Inventories	207,701	(327,169)
Prepayments for purchase	(27,321)	(25,253)
Other current assets	7,458	(5,714)
Contract liabilities	54,804	3,922
Notes payable	(324)	329
Trade payables	(69,875)	40,915
Trade payables to related parties	(33,541)	11,396
Other payables	35,812	57,748
Provisions	(46)	(108)
Other current liabilities	585	104
Net defined benefit liabilities	(9,900)	(17,150)
Refund liabilities	4,865	2,546
Cash generated from operations	1,161,522	468,575
Interest received	75,025	76,971
Interest paid	(5,497)	(3,304)
Income tax paid	(126,945)	(144,426)
Net cash generated from operating activities	1,104,105	397,816

(Continued)

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

(In Thousands of New Taiwan Dollars)

	For the Year Ended December 31
	2025	2024
CASH FLOWS FROM INVESTING ACTIVITIES
Disposal of subsidiary	$ 20,368	$ -
Payment of property, plant and equipment	(371,806)	(362,582)
Proceeds from disposal of property, plant and equipment	50	-
Increase in refundable deposits	(2,419)	(61)
Acquisition of intangible assets	(7,333)	(5,587)
Acquisition of investment property	-	(11,650)
Increase in other financial assets	(125,503)	(1,312,963)
Increase in non-current assets	(14)	(293)
Net cash used in investing activities	(486,657)	(1,693,136)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from short-term borrowings	481,664	334,680
Repayments of short-term borrowings	(442,022)	(246,691)
Repayment of the principal portion of lease liabilities	(6,198)	(5,882)
Cash dividends distributed	(401,475)	(401,475)
Acquisition of additional interests in subsidiaries	(5,849)	-
Changes of non-controlling interests	(7,135)	(832)
Net cash used in financing activities	(381,015)	(320,200)
EFFECTS OF EXCHANGE RATE CHANGES ON THE BALANCE OF CASH AND CASH EQUIVALENTS HELD IN FOREIGN CURRENCIES	(17,791)	1,161
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	218,642	(1,614,359)
CASH AND CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR	2,767,824	4,382,183
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR	$ 2,986,466	$ 2,767,824

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

10 -

SHENG YU STEEL CO., LTD. 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

Sheng Yu Steel Co., Ltd. (the "Company") was incorporated in May 1973 and mainly engaged in the manufacturing, processing and selling of cold rolled, galvanized, and prepainted steel coils.

As of December 31, 2025, the Company's shareholders were YODOKO, Ltd. (formerly Yodogawa Steel Works Ltd.) - 63% (parent company); Fujiden International Corporation (an investee of YODOKO, Ltd.) - 1%; and other shareholders - 36%.

The Company's shares have been listed on the Taiwan Stock Exchange since January 1997.

The consolidated financial statements of the Company and its subsidiaries (collectively referred to as "the Group") are presented in the Company's functional currency, the New Taiwan dollar.

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements were approved by the Company's board of directors and authorized for issue on March 6, 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 SIC Interpretations (SIC) (collectively, the "IFRS Accounting Standards") endorsed and issued into effect by the Financial Supervisory Commission (FSC)

The following, the initial application of the IFRS Accounting Standards endorsed and issued into effect by the FSC did not have material impact on the Group'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”	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

As of the date the consolidated financial statements were authorized for issue, the Group has assessed that the aforementioned amendments to the standards and interpretations will not have a material impact on the Group's financial position and financial performance.

c. The IFRS Accounting Standards 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 1)
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 Disclosure in Financial Statements”	January 1, 2027 (Note 2)
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” (including the 2025 amendments to IFRS 19)	January 1, 2027
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”	January 1, 2027

Note 1: Unless stated otherwise, the above IFRS Accounting Standards are effective for annual reporting periods beginning on or after their respective effective dates.

Note 2: 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 Disclosure in Financial Statements” and consequential amendments

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

To classify items of income and expenses presented in the statement of profit or loss into the operating, investing, financing, income taxes and discontinued operations categories, the Group shall assess whether it has specified main business activities of investing in particular types of assets and providing financing to customers.
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 Group shall identify the assets, liabilities, equity, income, expenses and cash flows that arise from individual transactions or 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 characteristic. The Group shall disaggregate items with dissimilar characteristics in the primary financial statements and in the notes. The Group labels items as “other” only if it cannot find a more informative label.
Disclosures 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 aspect of the financial performance of the Group as a whole, the Group 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 interests effects of related reconciliation items.

In addition, the following consequential amendments have been made to IAS 7 “Statement of Cash Flows”:

The Group shall use operating profit or loss as the starting point when presenting cash flows from operating activities under the indirect method.
12 -

Interest and dividends received by the Group shall be classified as investing activities, while interest and dividends paid shall be classified as financing activities. However, if, after assessment, the Group has a specific main operating activity, it shall determine how to classify dividends received, interest received and interest paid in the statement of cash flows by referring to how it classifies dividend income, interest income and interest expense in the statement of profit or loss. The total of each of these cash flows shall be classified in a single category in the statement of cash flows.

Except for the above impact, as of the date the consolidated financial statements were authorized for issue, the Group is continuously assessing the other impacts of the above amended standards and interpretations will have on the Group's financial position and financial performance and will disclose the relevant impact when the assessment is completed.

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

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 IFRS Accounting Standards 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 that are measured at fair value and net defined benefit assets 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 the 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 the 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; and

3) Liabilities for which the Group does not have the substantial right at the end of the reporting period to defer settlement for at least 12 months after the reporting period.

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

The Subsidiary is engaged in the construction business, which has an operating cycle of over 1 year. The normal operating cycle applies when considering the classification of the Subsidiary's construction-related assets and liabilities.

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 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 and the non-controlling interests of the Group and its subsidiaries 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 3 and 4 for detailed information on subsidiaries (including the percentages of ownership and main businesses).

e. Foreign currencies

In preparing the consolidated financial statements of the Group, transactions in currencies other than the Group's functional currency (i.e. 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 measured at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Exchange differences arising on 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 purposes of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including subsidiaries and associate in other countries that use currencies different from the functional currency of the Group) are translated into the New Taiwan dollar using exchange

14 -

rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period. The resulting currency translation differences are recognized in other comprehensive income.

On the disposal of a foreign operation (i.e., a disposal of the Group’s entire interest in a foreign operation), all of the exchange differences accumulated in equity in respect of that operation attributable to the owners of the Group are reclassified to profit or loss.

f. Inventories

Inventories consist of raw materials, supplies, finished goods, work-in-process, 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. 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.

g. Investment in associates

An associate is an entity over which the Group has significant influence and that is not a subsidiary.

The Group uses the equity method to account for its investment in associate. Under the equity method, investments in an associate are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the profit or loss and other comprehensive income of the associate. The Group also recognizes the Group’s share of the changes in other equity of the associate.

When the Group subscribes for additional new shares of an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Group’s proportionate interest in the associate. The Group records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus - changes in the Group’s share of equity of the associate. If the Group’s ownership interest is reduced due to the additional subscription of the new shares of the associate, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate is reclassified to profit or loss on the same basis as would be required if the investee had directly disposed of the related assets or liabilities. When the adjustment should be debited to capital surplus, but if the capital surplus recognized from investments accounted for using the equity method is insufficient, the shortage is debited to retained earnings.

When the Group’s share of losses of an associate equal or exceed its interest in that associate, the Group discontinues recognizing its share of further losses. Additional losses and liabilities are recognized only to the extent that the Group has incurred legal obligations, or constructive obligations, or made payments on behalf of that associate.

The entire carrying amount of the investment is tested for impairment as a single asset by comparing its recoverable amount with its carrying amount. Any impairment loss recognized is deducted from the carrying amount of the investment. Any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increased.

The Group discontinues the use of the equity method from the date on which its investment ceases to be an associate. Any retained investment is measured at fair value at that date, and the fair value is regarded as the investment’s fair value on initial recognition as a financial asset. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. The Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required had that associate directly disposed of the related assets or liabilities.

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When the Group transacts with its associates, profits and losses resulting from the transactions are recognized in the Group’s consolidated financial statements only to the extent that interests in the associate are not related to the Group.

h. Property, plant, and equipment

Property, plant and equipment (“PPE”) are initially measured at cost, and subsequently measured at cost less recognized accumulated depreciation.

PPE in the course of construction are measured at cost. Before the asset reaches its intended use, it is measured at the lower of cost or net realizable value, and any proceeds from selling the asset and the cost of the asset are recognized in profit or loss. Such assets are depreciated and classified to the appropriate categories of PPE when completed and ready for their intended use.

Except for freehold land, which is not depreciated, the depreciation of PPE 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 PPE, the difference between the net disposal proceeds and the carrying amount of the asset is recognized in profit or loss.

i. Investment properties

Investment properties (“IPs”) are properties held to earn rentals and/or for capital appreciation. IPs also include land held for a currently undetermined future use.

IPs are measured initially at cost, including transaction costs. Subsequent to initial recognition, IPs are measured at cost less accumulated depreciation. Depreciation is recognized using the straight-line method.

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

j. Intangible assets

Intangible assets with finite useful lives that are acquired separately are computer software, which is initially measured at cost and subsequently measured at cost less accumulated amortization. Amortization is recognized on a straight-line basis. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effects of any changes in the estimates being accounted for on a prospective basis.

k. Impairment of property, plant and equipment, right-of-use asset, investment properties and intangible assets

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment, right-of-use asset, investment properties and intangible assets, to determine whether there is any indication that those assets have suffered an 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. Corporate assets are allocated to the smallest group of cash-generating units on a reasonable and consistent basis of allocation.

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

16 -

amount of the asset or cash-generating unit is reduced to its recoverable amount, with the resulting impairment loss recognized in profit or loss.

Before the Group recognizes an impairment loss from assets related to contract costs, any impairment loss on inventories, property, plant and equipment and intangible assets shall be recognized in accordance with applicable standards. Then, impairment loss from the assets related to the contract costs is recognized to the extent that the carrying amount of the assets exceeds the remaining amount of consideration that the Group expects to receive in exchange for related goods or services less the costs which relate directly to providing those goods or services and which have not been recognized as expenses. The assets related to the contract costs are then included in the carrying amount of the cash-generating unit to which they belong for the purpose of evaluating impairment of that cash-generating unit.

When an impairment loss is subsequently reversed, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but only to the extent of the carrying amount 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.

Non-current assets held for sale

Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset is available for immediate sale in its present condition. To meet the criteria for the sale being highly probable, the appropriate level of management must be committed to the sale, and the sale should be expected to qualify for recognition as a completed sale within 1 year from the date of classification.

When the Group is committed to a sale plan involving the disposal of an investment in an associate, only the investment that will be disposed of is classified as held for sale when the classification criteria are met, and the Group discontinues the use of the equity method in relation to the portion that is classified as held for sale.

Non-current assets classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell. Such assets classified as held for sale are not depreciated.

m. Financial instruments

Financial assets and financial liabilities are recognized when 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 an acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) 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 fair value through profit or loss 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 category

Financial assets are classified as financial assets at amortized cost.

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Financial assets at amortized cost

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

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

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 receivables at amortized cost, trade receivables, other receivables, other financial assets and refundable deposits, 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 a financial asset, except for:

i Purchased or originated credit-impaired financial assets, for which interest income is calculated by applying the credit-adjusted effective interest rate to the amortized cost of such financial assets; and

ii Financial assets that are not credit-impaired on purchase or origination but have 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.

Credit-impaired financial assets mean that the issuer or counterparty has experienced significant financial difficulties, defaults, and the counterparty is likely to file for bankruptcy or undergo a financial re-organization, or the disappearance of an active market for that financial asset because of financial difficulties.

Cash equivalents include time deposits and repurchase agreements collateralized by bonds investments with original maturities within three months from the date of acquisition, highly liquid, readily convertible to a known amount of cash and 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 and contract assets

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

The Group always recognizes lifetime expected credit losses (ECLs) for trade receivables and contract assets. For all other financial instruments, the Group recognizes lifetime ECLs 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 ECLs.

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

18 -

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

For internal credit risk management purposes, the Group determines that a financial asset is in default when internal or external information shows that the debtor is unlikely to pay its creditors (without taking into account any collateral held by the Group).

The impairment loss of all financial assets is recognized in profit or loss by a reduction in their carrying amounts through a loss allowance account, except for investments in debt instruments that are measured at FVTOCI, for which the loss allowance is recognized in other comprehensive income and the carrying amounts of such financial assets are not reduced.

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) Equity instruments

Equity instruments issued by the Group are classified as equity in accordance with the definition of an equity instrument.

Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

3) Financial liabilities

a) Subsequent measurement

Financial liabilities are measured at amortized cost using the effective interest method.

b) Derecognition of financial liabilities

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

n. Provisions

Provisions are measured at the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation.

Specifically, the warranty obligation which is under the constructive contracts is based on the historical experience of the Group in estimating provisions at the time of revenue recognition for relative projects.

o. Revenue Recognition

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

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1) Revenue from the sale of goods

Revenue from the sale of goods is recognized when the committed goods are delivered to customers and satisfied performance obligations. Transaction price received is recognized as a contract liability until performance obligations are satisfied.

Revenue is measured at the fair value, which is the discounted present value of the price (net of commercial discounts and quantity discounts) agreed on by the Group with its customers. Estimated discount or other allowances of the consideration received are recognized as refund liabilities. For a contract where the period between the date the Group transfers a promised good or service to a customer and the date the customer pays for that good or service is one year or less, the Group does not adjust the promised amount of consideration for any effect of a significant financing component.

Export sales revenue is recognized when products are loaded onto shipping vessels in accordance with the sales terms, while domestic sales revenue are recognized when products are delivered to and accepted by the customers.

The Group does not recognize sales revenue on materials delivered to subcontractors because this delivery does not involve a transfer of risks and rewards of materials ownership.

2) Revenue from the rendering of services

Revenue from processing steel coils and technical support service is recognized at the contractual rates as direct expenses and labor hours are incurred.

3) Construction revenue

While they are contracts for the construction of steel plates for contracted buildings, and thus, the Group recognizes revenue over time. The Group measures the progress on the basis of the completion degree as there is a direct relationship between the acceptance ratio of the completion of construction and the progress of satisfying the performance obligations.

Contract assets are recognized during the construction and reclassified to trade receivables at the point at which the customer is invoiced. If the milestone payments exceed the revenue recognized to date, then the difference is recognized as contract liabilities by the Group. Certain payments, which are retained by the customer as specified in the contract, are intended to ensure that the Group adequately completes all of its contractual obligations. Such retention receivables are recognized as contract assets until the Group satisfies its performance obligations.

If the results of the performance obligations cannot be reliably measured, the construction revenue is recognized only within the expected recoverable costs of satisfying the performance obligations.

p. 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.

Lease payments (less any lease incentives payable) from operating leases are recognized as income on a straight-line basis over the terms of the relevant leases. Initial direct costs incurred in obtaining operating leases are added to the carrying amounts of the underlying assets and recognized as expenses on a straight-line basis over the lease terms.

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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 applying a recognition exemption where lease payments are recognized as expenses on a straight-line basis over the lease terms.

Right-of-use assets, which comprise the initial measurement of lease liabilities, are initially measured at cost. 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. 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 an index or a rate used to determine 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. For a lease modification that is not accounted for as a separate lease, the Group accounts for the remeasurement of the lease liability by (a) decreasing the carrying amount of the right-of-use asset of lease modifications that decreased the scope of the lease, and recognizing in profit or loss any gain or loss on the partial or full termination of the lease; (b) making a corresponding adjustment to the right-of-use asset of all other lease modifications. Lease liabilities are presented on a separate line in the consolidated balance sheets.

q. 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 service.

2) Retirement benefits

Payments to defined contribution retirement benefit plans are recognized as an expense 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 liability are recognized as employee benefits expense in the period 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 plans. 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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3) Termination benefits

A liability for a termination benefit is recognized at the earlier of when the Group can no longer withdraw the offer of the termination benefit and when the Group recognizes any related restructuring costs.

r. Carbon fee provision

In accordance with the Regulations Governing the Collection of Carbon Fees and related regulations of the ROC, the carbon fee provision is recognized and measured on the basis of the best estimate of the expenditure required to settle the obligation for the current year.

s. Taxation

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

1) Current tax

Income tax payable is based on taxable profit 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 in the consolidated financial statements 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, to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized.

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in associate, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

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 asset to be recovered. A previously unrecognized deferred tax asset is also reviewed at each reporting 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 assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset 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.

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3) Current and deferred tax 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.

MATERIAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In the application of the Group’s accounting policies, management is required to make judgments, estimates and assumptions about 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.

The Group considers the possible impact of the recent economic environment implications when making its material accounting estimates. The estimates and underlying assumptions are reviewing on an ongoing basis.

Key sources of estimation uncertainty - Write-down of inventories

The net realizable value of inventories is the estimated selling price in the ordinary course of business less the estimated costs of completion and disposal. The estimation of net realizable value is based on current market conditions and historical experience with product sales of a similar nature. Changes in market conditions may have a material impact on the estimation of the net realizable value.

CASH AND CASH EQUIVALENTS

	December 31
	2025	2024
Cash on hand	$ 1,422	$ 1,345
Checking accounts and demand deposits	163,467	182,605
Cash equivalents (investments with original maturities of 3 months or less)
Time deposits	1,250,000	100,000
Repurchase agreements collateralized by bonds	1,571,577	2,483,874
	$ 2,986,466	$ 2,767,824

As of December 31, 2025 and 2024, the ranges of interest rate for repurchase agreements collateralized by bonds with original maturities of 3 months or less were 1.05%-3.9%, and 1.48%-4.65%, respectively.

OTHER FINANCIAL ASSETS

	December 31
	2025	2024
Current
Time deposits with original maturities of more than three months	$ 2,150,000	$ 2,021,674
Pledged time deposits	39,382	41,754
		(Continued)

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	December 31
	2025	2024
Construction warranty	$ 405	$ 856
	$ 2,189,787	$ 2,064,284
Non-current
Pledged time deposits	$ 18,000	$ 18,000
		(Concluded)

As of December 31, 2025 and 2024, the ranges of interest rates for time deposits with original maturities of more than three months were 1.45%-1.75% and 0.795%-4.62%, respectively.

Information relating to the above assets were restricted and collateralized, please refer to Note 30.

8. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

	December 31
	2025	2024
Notes receivable - operating	$ 27,471	$ 9,013
Notes receivable - non-operating	196	-
	$ 27,667	$ 9,013
Trade receivables - operating
At amortized cost gross carrying amount	$ 644,135	$ 1,008,663
Less: Allowance for impairment loss	-	-
	$ 644,135	$ 1,008,663
Other receivables
Interest income	$ 9,641	$ 7,186
Purchase commitment discounts	87	16,410
Value-added tax refunds	13,964	23,086
Others	12,740	713
	$ 36,432	$ 47,395

Receivables at amortized cost

Receivables are measured at amortized cost. Refer to Note 28 for the accounting policies related to credit limits and credit management.

The Group measures the loss allowance for trade receivables at an amount equal to lifetime ECLs. The expected credit losses on trade receivables are estimated using a provision matrix by reference to the past default records of the debtor and an analysis of the debtor's current financial position. 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 following table details the loss allowance of notes and trade receivables based on the provision matrix:

December 31, 2025

	Not Past Due	1 to 30 Days Overdue	31 to 90 Days Overdue	Over 90 Days Overdue	Total
Gross carrying amount	$ 670,313	$ 1,489	$ -	$ -	$ 671,802
Loss allowance	-	-	-	-	-
Amortized cost	$ 670,313	$ 1,489	$ -	$ -	$ 671,802
December 31, 2024
	Not Past Due	1 to 30 Days Overdue	31 to 90 Days Overdue	Over 90 Days Overdue	Total
Gross carrying amount	$ 939,226	$ 78,450	$ -	$ -	$ 1,017,676
Loss allowance	-	-	-	-	-
Amortized cost	$ 939,226	$ 78,450	$ -	$ -	$ 1,017,676

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

	For the Year Ended December 31
	2025	2024
Balance on January 1	$ -	$ 9,330
Amounts written off	-	(9,723)
Foreign exchange gains and losses	-	393
Balance on December 31	$ -	$ -

9. INVENTORIES

	December 31
	2025	2024
Finished goods	$ 505,972	$ 756,398
Work in progress	195,735	283,517
Raw materials	1,103,176	1,039,526
Supplies	24,042	37,870
Others	14,891	20,502
	$ 1,843,816	$ 2,137,813

The cost of inventories recognized as operating costs were as follows:

	For the Year Ended December 31
	2025	2024
Write-downs (reversal) of inventories	$ 48,666	$ (4,130)
Idle capacity loss	37,557	17,297

Reversal of inventories was mainly due to destocking.

NON-CURRENT ASSETS HELD FOR SALE

December 31, 2025

Non-current assets held for sale

$ 233,700

In January 2026, the board of directors resolved to dispose of the entire equity interest in Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd. The Company will enter into an equity transfer agreement with a non-related party and expects to complete the sale within 12 months. The investment accounted for under the equity method has been reclassified as non-current assets held for sale.

As the anticipated disposal proceeds are lower than the carrying amount of the investment, an impairment loss of NT$ 28,801 thousand has been recognized (recorded under other losses), and the remaining balance has been reclassified as non-current assets held for sale.

SUBSIDIARIES

Subsidiaries included in the consolidated financial statements

The consolidated entities were as follows:

Investor Company	Investee Company	Main Businesses	Percentage of Ownership		Note
			December 31, 2025	December 31, 2024
Sheng Yu Steel Co., Ltd.	Yodoko International Ltd.	Manufactures and sells rolled steel for construction of buildings	82	78	Note 1
	Sheng-Shing Worldwide Corp.	Manufactures and sells galvanized steel coils	54	54	-
Yodoko International Ltd.	Yodoko International (HK) Ltd.	General investment	-	100	Note 2
Sheng-Shing Worldwide Corp.	Sheng-Yu Trading (Dongguan) Corp.	Selling hardware, steels and import and export trading	100	100	-

Note 1: In March 2025, the Sheng Yu Steel Co., Ltd. acquired shares of Yodoko International Ltd. held by the corporate director Toyota Tsusho Corporation, increasing its shareholding to 82%. The acquisition price was NT$5,849 thousand, resulting in a capital surplus of NT$605 thousand due to the difference between the acquisition price and the net equity value of the shares.

Note 2: In March 2025, the board of directors of Yodoko International Ltd. resolved to dissolve and liquidate its subsidiary Yodoko International (HK) Ltd., refer to Note 26.

INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD

On December 31, 2025, the Company reclassified its equity-method investment in Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd. as non-current assets held for sale, refer to Note 10.

26 -

Associate that are not individually material

	December 31
	2025	2024
Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd.	$ -	$ 259,841
	For the Year Ended December 31
	2025	2024
The Group’s share of Net profit (loss) for the year	$ -	$ (24,757)
Other comprehensive loss	-	-
Total comprehensive loss for the year	$ -	$ (24,757)

13. PROPERTY, PLANT AND EQUIPMENT

For the year ended December 31, 2025

	Land	Buildings	Machinery and Equipment	Transportation Equipment	Other Equipment	Construction in Progress	Total
Cost
Balance on January 1, 2025	$ 491,938	$ 1,979,513	$ 9,802,790	$ 55,087	$ 404,987	$ 415,921	$ 13,150,236
Additions	-	70,291	184,348	1,999	23,451	51,341	331,430
Disposals	-	(8,587)	(156,676)	(520)	(14,386)	-	(180,169)
Effects of foreign currency exchange differences	-	-	-	(17)	(3)	-	(20)
Balance on December 31, 2025	491,938	2,041,217	9,830,462	56,549	414,049	467,262	13,301,477
Accumulated depreciation
Balance on January 1, 2025	-	1,760,906	8,694,102	41,745	291,952	-	10,788,705
Depreciation expense	-	37,495	171,088	3,515	19,454	-	231,552
Disposals	-	(8,416)	(155,549)	(433)	(13,057)	-	(177,455)
Effects of foreign currency exchange differences	-	-	-	(37)	(3)	-	(40)
Balance on December 31, 2025	-	1,789,985	8,709,641	44,790	298,346	-	10,842,762
Carrying amounts on December 31, 2025	$ 491,938	$ 251,232	$ 1,120,821	$ 11,759	$ 115,703	$ 467,262	$ 2,458,715

For the year ended December 31, 2024

	Land	Buildings	Machinery and Equipment	Transportation Equipment	Other Equipment	Construction in Progress	Total
Cost
Balance on January 1, 2024	$ 491,938	$ 1,973,468	$ 9,745,728	$ 52,740	$ 403,675	$ 126,367	$ 12,793,916
Additions	-	16,955	130,637	2,236	10,600	289,554	449,982
Disposals	-	(10,910)	(73,575)	-	(9,296)	-	(93,781)
Effects of foreign currency exchange differences	-	-	-	111	8	-	119
Balance on December 31, 2024	491,938	1,979,513	9,802,790	55,087	404,987	415,921	13,150,236
Accumulated depreciation
Balance on January 1, 2024	-	1,735,434	8,558,190	37,803	282,935	-	10,614,362
Depreciation expense	-	36,072	207,779	3,857	17,662	-	265,370
Disposals	-	(10,600)	(71,867)	-	(8,652)	-	(91,119)
Effects of foreign currency exchange differences	-	-	-	85	7	-	92
Balance on December 31, 2024	-	1,760,906	8,694,102	41,745	291,952	-	10,788,705
Carrying amounts on December 31, 2024	$ 491,938	$ 218,607	$ 1,108,688	$ 13,342	$ 113,035	$ 415,921	$ 2,361,531

The property, plant and equipment held by the Group are depreciated on a straight-line basis over their estimated useful lives as follows:

Buildings

Office

Plant

Building improvements

Ancillary equipment

20-60 years

5-60 years

(Continued)

Machinery and equipment
Main equipment 10-37 years
Ancillary equipment 3-40 years
Transportation equipment 5-10 years
Other equipment
Main equipment 3-23 years
(Concluded)

14. LEASE ARRANGEMENTS

a. Right-of-use assets

	December 31
	2025	2024
Carrying amounts
Land	$ 360	$ 423
Buildings	334	1,276
Transportation equipment	14,798	8,922
	$ 15,492	$ 10,621
	For the Year Ended December 31
	2025	2024
Additions to right-of-use assets	$ 11,969	$ 4,810
Depreciation charge for right-of-use assets
Land	$ 63	$ 64
Buildings	942	608
Transportation equipment	5,138	5,161
	$ 6,143	$ 5,833

b. Lease liabilities

	December 31
	2025	2024
Carrying amounts
Current	$ 4,975	$ 5,438
Non-current	$ 9,927	$ 4,597

Range of discount rate (%) for lease liabilities were as follows:

	December 31
	2025	2024
Land	-	-
Buildings	1.812	1.812
Transportation equipment	0.864-1.812	0.864-1.812

c. Other lease information

	For the Year Ended December 31
	2025	2024
Expenses relating to short-term and low-value asset leases	$ 2,685	$ 2,207
Total cash outflow for leases	$ 9,077	$ 8,200

The subsidiary as lessor

The subsidiary's leasing of machinery and equipment to non-related parties through operating leases resulted in rental income of NT$183 thousand and NT$180 thousand in 2025 and 2024, respectively.

The Group as lessee

The Group's leases of certain buildings qualify as short-term leases and leases of certain equipment qualify as 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.

INVESTMENT PROPERTIES

The IPs located at the Fangliao and Jiadong Township in Pingtung County are either available-for-sale or for rent. Except for depreciation expense and additional renovation expenditures totaling NT$11,650 thousand in 2024, there was no significant change in 2025 and 2024.

The IPs held by the Group are depreciated on the straight-line basis over estimated useful lives as follows:

Buildings

Administration and engineering centers 32-47 years

Main plant 10-17 years

Electrical and power equipment 3-14 years

The fair value of the Group's IPs as of December 31, 2025 and 2024 were NT$1,820,761 thousand and NT$1,584,362 thousand. The fair value had been arrived at based on a valuation carried out in December 2025 and 2023 by an independent qualified professional valuer not related to the Group. The valuation was arrived at by reference to market evidence of transaction prices for similar properties. The Group believes any change in the fair value of IPs within two years since the valuation date will not be material; thus, the appraisal of IPs is conducted biennially.

SHORT-TERM BORROWINGS

	December 31
	2025	2024
Secured borrowings (Note 30)
Bank loans	$ 136,390	$ 149,686
Unsecured borrowings
Bank loans	50,895	-
Loans from third party	2,009	2,049
	$ 189,294	$ 151,735
		(Continued)

30 -

December 31

	2025	2024
interest rate Secured borrowings (%)	2.70-3.35	3.05-3.70
interest rate Unsecured borrowings (%)	2.35-2.90	3.00
		(Concluded)

The subsidiary, Sheng-Yu Trading (Dongguan) Corp., borrowed from a third party amounting to NT$2,009 thousand and NT$2,049 thousand (both were RMB 450 thousand) as of December 31, 2025 and 2024, respectively, for the purpose of demand for short-term operating capital.

17. NOTES PAYABLE AND TRADE PAYABLES

Except for hot rolled steel and zinc and aluminum ingots which were paid by letter of credit and paid in advance, respectively, the average credit term of other raw materials and supplies was within three months. The Group has financial risk management policies in place to ensure the all payables are paid within the pre-agreed credit terms. Thus, no interest was charged on the trade payables.

18. OTHER PAYABLES

	December 31
	2025	2024
Year-end bonus	$ 115,805	$ 121,339
Purchases of equipment	64,453	115,933
Annual leave	47,110	45,288
Tariffs and dumping duties	74,931	32,782
Electric power	22,434	31,015
Maintenance fee	20,738	21,615
Compensation of employees and remuneration of directors	9,364	20,805
Salaries	18,117	18,492
Others	76,055	57,266
	$ 449,007	$ 464,535

19. Provisions

The provision for construction warranty claims represents the estimate future outflow that will be required under the Group's obligations for warranties under contracts. The estimate had been made on the basis of historical warranty trends. The liquidity of the maturities of provisions are as follows:

	December 31
	2025	2024
Provisions
Current (recognized as other current liabilities)	$ 2,179	$ 2,204
Non-current	10,947	9,452
	$ 13,126	$ 11,656
		(Continued)

31 -

	December 31
	2025	2024
Balance on January 1	$ 11,656	$ 10,538
Additional provisions recognized	1,516	1,226
Written of	(46)	(108)
Balance on December 31	$ 13,126	$ 11,656
		(Concluded)

20. RETIREMENT BENEFIT PLANS

a. Defined contribution plans

The Company and the subsidiary Yodoko International Ltd. adopted a pension plan under the Labor Pension Act ("LPA"), which is a state-managed defined contribution plan. Under the LPA, the Company and the subsidiary Yodoko International Ltd. make monthly contributions to employees' individual pension accounts at 6% of monthly salaries and wages.

The subsidiary Sheng-Yu Trading (Dongguan) Corp. adopted a local retirement plan, which is also a defined contribution plan. Entities make monthly employee insurance contributions to the relevant government organization in order to pay employees when they retire.

b. Defined benefit plans

The defined benefit plan adopted by the Company and the subsidiary Yodoko International Ltd. in accordance with the Labor Standards Act ("LSA") is operated by the government of the Republic of China. Pension benefits are calculated on the basis of the length of service and average monthly salaries of the six months before retirement. The Company and the subsidiary Yodoko International Ltd. contribute amounts equal to certain percentage 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.

In addition, in order to improve the human resource structure and operating performance, the Company implemented an early retirement preferential plan in 2025. The preferential pension calculated based on this plan was NT$22,487 thousand, which was recognized as operating costs and operating expenses.

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 the defined benefit obligation	$ 629,801	$ 673,685
Fair value of plan assets	(763,618)	(767,877)
Net defined benefit assets	$ (133,817)	$ (94,192)

Movements in net defined benefit assets were as follows:

	Present Value of the Defined Benefit Obligation	Fair Value of the Plan Assets	Net Defined Benefit Assets
Balance on January 1, 2024	$ 699,104	$ (692,739)	$ 6,365
Service cost
Current service cost	1,540	-	1,540
Net interest expense (income)	7,686	(7,669)	17
Recognized in profit or loss	9,226	(7,669)	1,557
Remeasurement
Return on plan assets (excluding amounts included in net interest)	-	(68,262)	(68,262)
Actuarial gain - change in financial assumptions	(11,133)	-	(11,133)
Actuarial gain - experience adjustments	(4,012)	-	(4,012)
Recognized in other comprehensive income	(15,145)	(68,262)	(83,407)
Contributions from the employer	-	(9,266)	(9,266)
Benefits paid	(19,500)	10,059	(9,441)
Balance on December 31, 2024	673,685	(767,877)	(94,192)
Service cost
Current service cost	1,295	-	1,295
Net interest expense (income)	10,038	(11,521)	(1,483)
Recognized in profit or loss	11,333	(11,521)	(188)
Remeasurement
Return on plan assets (excluding amounts included in net interest)	-	(53,898)	(53,898)
Actuarial loss - change in financial assumptions	4,777	-	4,777
Actuarial loss - experience adjustments	19,396	-	19,396
Recognized in other comprehensive income	24,173	(53,898)	(29,725)
Contributions from the employer	-	(9,712)	(9,712)
Benefits paid	(79,390)	79,390	-
Balance on December 31, 2025	$ 629,801	$ (763,618)	$ (133,817)

Through the defined benefit plans under the LSA, the Company and the domestic subsidiary are 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/corporate 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 plan’s 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 rate (%)	1.3	1.5-1.6
Expected rate of salary increase (%)	2.0	2.0
Turnover rate (%)	0.0-1.0	0.0-1.0
Expected rate of return on plan assets (%)	1.3	1.5-1.6
Mortality rate	Based on the Taiwan Standard Ordinary Experience Mortality Table	Based on the Taiwan Standard Ordinary Experience Mortality Table

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
Discount rate
Increase by 0.1%	$ (2,330)	$ (2,730)
Decrease by 0.1%	$ 2,346	$ 2,752
Expected rate of salary increase/decrease
Increase by 0.1%	$ 1,708	$ 2,073
Decrease by 0.1%	$ (1,700)	$ (2,061)

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

33 -

34 -

	December 31
	2025	2024
Expected contributions to the plan for the next year	$ 9,707	$ 9,268
Average duration of the defined benefit obligation	3.6 and 5.9 years	4 and 6.5 years

21. EQUITY

a. Capital stock

	December 31
	2025	2024
Shares authorized (in thousands of shares)	450,000	450,000
Shares authorized (in thousands of dollars)	$ 4,500,000	$ 4,500,000
Shares issued and fully paid (in thousands of shares)	321,180	321,180
Shares issued and fully paid (in thousands of dollars)	$ 3,211,800	$ 3,211,800

b. Capital surplus

	December 31
	2025	2024
May be used to offset a deficit, distributed as cash dividends, or transferred to share capital (Note)
Arising from issuance of capital stock	$ 870,000	$ 870,000
Actual disposal or acquisition of interests in subsidiaries	605	-
May be used to offset a deficit only
Capital surplus of investments in associate accounted for using the equity method	687,364	687,364
	$ 1,557,969	$ 1,557,364

Note: 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 stock but subject to a specific limit once a year.

c. Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles, where the Company made a net profit after tax in a fiscal year, the profit shall first be used to offset accumulated losses, setting aside as legal reserve 10% of the remaining profit, (an appropriation of earnings to the legal reserve shall be made until the legal reserve equals the Company's paid-in capital), setting aside or reversing special reserve in accordance with the laws or the requirements of the competent authority, and then any remaining profit together with any undistributed earnings at the beginning of the period (including the adjusted amount of undistributed 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 the distribution of dividends and bonuses to shareholders. For the distribution of dividends, bonuses, the whole or a part of

capital reserve and legal reserve shall be paid in cash and subject to approval by a board meeting attended by more than two-thirds of the directors and a majority of the attending directors, and shall be submitted to the shareholders' meeting, it does not apply the above resolution adopted at the shareholders' meeting.

The Company’s dividend policy is as follows:

1) The Company currently operates in an environment with growth potential and will take advantage of economic conditions achieve sustainable operations. The Company’s dividend policy is determined with reference to both its prospective outlook and actual operating performance, with a focus on the stability and growth of dividend distributions.

2) Shareholders’ dividends shall be appropriated from accumulated distributable earnings, of which no less than 50% of the distributable earnings of the current year.

3) Shareholders’ dividends may be distributed in the form of cash or stock, moreover, cash dividends shall constitute no less than 90% of the total dividend distribution.

The legal reserve may be used to offset deficit. 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 earnings for 2024 and 2023, respectively, were as follows:

	For the Year Ended December 31
	2024	2023
Set aside as legal reserve	$ 64,792	$ 55,680
Reversal of special reserve	(7,023)	(7,513)
Cash dividends	401,475	401,475
Cash dividends per share (NT$)	1.25	1.25

The above appropriation for cash dividends had been resolved by the Company’s board of directors held in March 2025 and 2024, respectively; the other proposed appropriations had been resolved by the shareholders in their meeting held in 2025 and 2024, respectively.

The appropriations of earnings for 2025 had been proposed by the Company’s board of directors in March 2026. The appropriations of earnings was as follows:

	For the Year Ended December 31, 2025
Set aside as legal reserve	$ 26,290
Cash dividends	192,708
	$ 218,998
Cash dividends per share (NT$)	$ 0.6

The above appropriation for cash dividends had been resolved by the Company’s board of directors; the other proposed appropriations will be resolved by the shareholders in their meeting to be held in June 2026.

35 -

d. Other equity items

1) Exchange differences on translating the financial statements of foreign operations

	For the Year Ended December 31
	2025	2024
Balance on January 1	$ 5,496	$ (7,025)
Recognized for the year
Exchange differences arising on translating the financial statements of foreign operations	1,609	12,746
Effects of income tax	-	(225)
Reclassification adjustments
Equity directly associated with non-current assets classified as held for sale	(1,088)	-
Balance on December 31	$ 6,017	$ 5,496

2) Equity directly associated with non-current assets classified as held for sale

	For the Year Ended December 31
	2025	2024
Balance on January 1	$ -	$ -
Reclassification of exchange differences on the translation of financial statements of foreign operations	1,088	-
Balance on December 31	$ 1,088	$ -

e. Non-controlling interests

	For the Year Ended December 31
	2025	2024
Balance on January 1	$ 73,462	$ 63,870
Share in profit for the year	13,011	8,714
Other comprehensive (loss) gain during the year
Cash dividends	(681)	(832)
Exchange differences arising on translation of foreign operations	90	1,734
Remeasurement of defined benefit plans	(20)	50
Effects of income tax	4	(74)
Non-controlling interests decrease arising from acquisition of subsidiaries (Note 10)	(6,454)	-
Balance on December 31	$ 79,412	$ 73,462

OPERATING REVENUE

	For the Year Ended December 31
	2025	2024
Revenue from contracts
Revenue from the sale of goods	$ 12,660,135	$ 13,026,459
Construction revenue	328,657	336,891
Revenue from rendering of services	119,019	127,968
Other revenues	163,079	199,383
	$ 13,270,890	$ 13,690,701

b. Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Notes receivable and trade receivables	$ 671,802	$ 1,017,676	$ 772,769
Contract assets
Construction contracts	$ 28,243	$ 47,764	$ 41,712
Contract liabilities
Sale of goods	$ 21,824	$ 33,943	$ 32,178
Construction contracts	75,731	8,808	6,651
	$ 97,555	$ 42,751	$ 38,829

The changes in the contract assets and liability balances primarily originated from the timing difference between the fulfilment of the Group's performance obligation and the customer's payment.

The satisfaction of performance obligation from the contract liability balance at the beginning of the year and from the previous periods was fully recognized as revenue in the current year in 2025 and 2024.

b. Disaggregation of revenue

For the year ended December 31, 2025

	Sheng Yu Steel Co., Ltd.	Others	Total
Type of revenue
Sale of goods	$ 12,005,477	$ 654,658	$ 12,660,135
Construction contract	-	328,657	328,657
Rendering of services	118,331	688	119,019
Others	160,334	2,745	163,079
	$ 12,284,142	$ 986,748	$ 13,270,890

For the year ended December 31, 2024

	Sheng Yu Steel Co., Ltd.	Others	Total
Type of revenue
Sale of goods	$ 12,548,211	$ 478,248	$ 13,026,459
Construction contract	-	336,891	336,891
Rendering of services	126,269	1,699	127,968
Others	196,834	2,549	199,383
	$ 12,871,314	$ 819,387	$ 13,690,701

c. Partially completed contracts

The transaction price, excluding any estimated amounts of variable consideration that are constrained, allocated to the performance obligations that are not fully satisfied and the expected timing for recognition of revenue are as below.

	December 31
	2025	2024
Properties construction contracts
2025	$ -	$ 237,347
2026	$ 232,833	$ -

23. PROFIT BEFORE INCOME TAX

b. Other gains and losses

	For the Year Ended December 31
	2025	2024
Net foreign exchange (loss) gain	$ (33,034)	$ 46,105
Loss on disposal of investment properties	(2,459)	-
Loss on disposal of property, plant and equipment	(2,664)	(2,662)
Impairment losses (Note 10)	(28,801)	-
Others	19,662	17,568
	$ (47,296)	$ 61,011

The above net foreign exchange gain were as follows:

	For the Year Ended December 31
	2025	2024
Foreign exchange gains	$ 76,170	$ 77,961
Foreign exchange losses	(109,204)	(31,856)
Net exchange (losses) gains	$ (33,034)	$ 46,105

b. Depreciation and amortization

	For the Year Ended December 31
	2025	2024
Property, plant and equipment	$ 231,552	$ 265,370
Investment properties	1,977	1,771
Right-of-use assets	6,143	5,833
Intangible assets	6,990	5,238
	$ 246,662	$ 278,212
An analysis of depreciation by function
Operating costs	$ 207,820	$ 244,882
Operating expenses	31,852	28,092
	$ 239,672	$ 272,974
An analysis of amortization by function
Operating costs	$ 1,694	$ 1,136
Operating expenses	5,296	4,102
	$ 6,990	$ 5,238

c. Interest expense

	For the Year Ended December 31
	2025	2024
Interest on bank loans	$ 5,443	$ 3,333
Interest on lease liabilities	194	111
	$ 5,637	$ 3,444

d. Employee benefits expense

	For the Year Ended December 31
	2025	2024
Short-term employee benefits
Salaries	$ 583,650	$ 584,021
Insurance	51,914	50,643
Others	43,511	47,266
	679,075	681,930
Post-employment benefits
Defined contribution plans	21,180	20,455
Defined benefit plans (Note 20)	(188)	1,557
Termination benefits (Note 20)	22,487	-
	43,479	22,012
	$ 722,554	$ 703,942
		(Continued)

For the Year Ended December 31
2025 2024

An analysis of employee benefits expense by function
Operating costs
$ 416,321 $ 403,289
Operating expenses
306,233 300,653
$ 722,554 $ 703,942
(Concluded)

e. Compensation of employees and remuneration of directors

According to the Company's Articles of Incorporation, the Company should distribute the compensation of employees and remuneration of directors at the rates of no less than 0.1% and no higher than 3%, respectively, of net profit before income tax, compensation of employees, and remuneration of directors.

In accordance with the amendments to the Securities and Exchange Act in August 2024, the shareholders of the Company resolved the amendments to the Company's Articles at their 2025 regular meeting. The amendments explicitly stipulate that no less than 2% of the pre-tax profit before accrual of employee and director compensation shall be allocated as employee compensation and no more than 3% as director compensation. Among the allocated employee compensation amount, no less than 40% shall be distributed to non-executive (basic-level) employees.

The compensation estimated of employees (including non-executive employees) and the remuneration of directors for the years ended December 31, 2025 and 2024 were as follows:

For the Year Ended December 31
2025 2024

Compensation of employees
$ 6,850 $ 17,420
Remuneration of directors
1,840 3,200

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

The compensation of employees and remuneration of directors paid (all in cash) statements for the years ended December 31, 2024 and 2023 which had been approved by the Company's board of directors in March 2025 and 2024, respectively were as follows:

	2024		2023
	Employee Compensation	Director Compensation	Employee Compensation	Director Compensation
Amount resolved by the Board of Directors	$ 17,420	$ 3,200	$ 10,000	$ 3,250
Amount recognized in annual financial statement	17,420	3,200	10,400	3,400

The difference between the actual amounts of the compensation of employees and remuneration of directors paid for 2023 and the amounts recognized in the 2023 consolidated financial statements is adjusted to the profit and loss of 2024.

There was no difference between the actual distribution amounts for employee and director compensation for 2024 and the amounts recognized in the consolidated financial statements for 2024.

40 -

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

24. INCOME TAX

b. The major components of income tax recognized in profit or loss:

	For the Year Ended December 31
	2025	2024
Current tax
In respect of the current year	$ 78,667	$ 153,583
Income tax on unappropriated earnings	461	420
Adjustment for prior years	(5,579)	(6,869)
Deferred tax
In respect of the current year	(8,274)	(2,277)
Adjustments for prior year	144	-
	$ 65,419	$ 144,857

A reconciliation of accounting profit and current income tax expenses were as follows:

	For the Year Ended December 31
	2025	2024
Profit before income tax	$ 317,531	$ 734,804
Income tax expense calculated at the statutory rate	$ 69,949	$ 152,565
Non-deductible expenses in determining taxable income	444	(1,259)
Income tax on unappropriated earnings	461	420
Adjustments for prior years	(5,435)	(6,869)
	$ 65,419	$ 144,857

b. Income tax expense recognized in other comprehensive income

	For the Year Ended December 31
	2025	2024
Deferred tax
Remeasurement of defined benefit plan	$ (5,945)	$ (16,681)
Exchange differences on translating of foreign operations	-	(289)
	$ (5,945)	$ (16,970)

c. Current tax liabilities

	December 31
	2025	2024
Current tax liabilities
Income tax payables	$ 15,275	$ 68,671

d. Deferred tax assets and liabilities

The movements of deferred tax assets and deferred tax liabilities were as follows:

For the year ended December 31, 2025

	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred Tax Assets
Temporary differences
Allowance for write-down of inventories	$ 1,841	$ 5,219	$ -	$ 7,060
Depreciation expense	58,310	1,457	-	59,767
Others	24,347	1,188	-	25,535
	$ 84,498	$ 7,864	$ -	$ 92,362
Deferred Tax Liabilities
Temporary differences
Land value increment tax	$ (48,432)	$ -	$ -	$ (48,432)
Net defined benefit assets	(18,589)	(1,980)	(5,945)	(26,514)
Others	(5,576)	2,246	-	(3,330)
	$ (72,597)	$ 266	$ (5,945)	$ (78,276)
For the year ended December 31, 2024
	Opening Balance	Recognized in Profit or Loss	Recognized in Other Comprehensive Income	Closing Balance
Deferred Tax Assets
Temporary differences
Allowance for write-down of inventories	$ 3,012	$ (1,171)	$ -	$ 1,841
Net defined benefit liabilities	1,594	(1,594)	-	-
Depreciation expense	54,971	3,339	-	58,310
Others	20,659	3,840	(152)	24,347
	$ 80,236	$ 4,414	$ (152)	$ 84,498
Deferred Tax Liabilities
Temporary differences
Land value increment tax	$ (48,432)	$ -	$ -	$ (48,432)
Net defined benefit assets	(71)	(1,837)	(16,681)	(18,589)
Others	(5,139)	(300)	(137)	(5,576)
	$ (53,642)	$ (2,137)	$ (16,818)	$ (72,597)

e. Deductible temporary differences for which no deferred tax assets have been recognized in the consolidated balance sheets

	December 31
	2025	2024
Deductible temporary differences
Loss on investments in associate accounted for using the equity method	$ 1,806,452	$ 1,858,387
Impairment losses	28,801	-
	$ 1,835,253	$ 1,858,387

f. Income tax assessments

The income tax returns through 2023 of the Company and the subsidiary Yodoko International Ltd. have been assessed by the tax authorities.

25. EARNINGS PER SHARE

The net profit and weighted average number of ordinary shares outstanding used in the computation of earnings per share were as follows:

Net Profit for the Year

	For the Year Ended December 31
	2025	2024
Profit for the year attributable to owners of the Company	$ 239,101	$ 581,233

In Thousands of Shares

	For the Year Ended December 31
	2025	2024
Weighted average number of ordinary shares used in computation of basic earnings per share	321,180	321,180
Effect of potentially dilutive ordinary shares:
Employees’ compensation	437	795
Weighted average number of ordinary shares used in the computation of diluted earnings per share	321,617	321,975

Since the Company offered to settle compensation paid to employees in cash or shares, the Company assumed that the entire amount of compensation or bonus would be settled in shares and the resulting potential shares were 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.

44 -

26. DISPOSAL OF SUBSIDIARIES

In March 2025, the Board of Directors of YODOKO, Ltd. resolved to dissolve and liquidate its subsidiary, Yodoko International (HK) Ltd. The liquidation was completed in October 2025, with the remaining equity funds of NT$20,368 thousand (USD 665 thousand) repatriated. A loss on the disposal of the investment amounting to NT$2,459 thousand was recognized for 2025.

27. 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 shareholders through the optimization of the debt and equity balance. The Group’s overall strategies remains unchanged in the recent 2 years.

The capital structure of the Group consists of equity attributable to owners of the Company (comprising capital stock, capital surplus, retained earnings and other equity items).

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

28. FINANCIAL INSTRUMENTS

b. Fair value of financial instruments that are not measured at fair value

The Group’s management considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values.

b. Categories of financial instruments

	December 31
	2025	2024
Financial assets
Measured by amortized cost (Note 1)	$ 5,907,850	$ 5,918,123
Financial liabilities
Measured by amortized cost (Note 2)	881,776	963,485

Note 1: The balances included financial assets at amortized cost, which comprise cash and cash equivalents, notes receivable and trade receivables, other receivables, other financial assets (including current and non-current), and refundable deposits.

Note 2: The balances included financial liabilities at amortized cost, which comprise short-term borrowings, notes payable, trade payables (including related parties), other payables, and guarantee deposits.

c. Financial risk management objectives and policies

The Group’s major financial instruments include repurchase agreements collateralized by bonds, equity investments, trade receivables, trade payables, borrowings and lease liabilities. The Group’s corporate treasury function provides business services, manages the Group entities’ capital and foreign exchange risk and financial risk. These risks include market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk.

45 -

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).

There was no change to the Group’s exposure to market risks or the manner in which these risks are managed and measured.

a) Foreign currency risk

The Group had foreign currency sales and purchases, which exposed the Group to foreign currency risk.

The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities are set out in Note 32.

Sensitivity analysis

The Group was mainly exposed to the foreign currency fluctuation of the USD.

The sensitivity rate of 1% is used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis included only outstanding foreign currency denominated monetary items and adjusts their translation at the end of the reporting period for a 1% change in foreign currency rates. A positive number below indicates an increase in pre-tax profit and other comprehensive income if the New Taiwan dollar weakened by 1% against USD. If the New Taiwan dollar strengthened by 1% of against USD, there would be an equal and opposite impact on pre-tax profit and other comprehensive income, and the balances below would be negative.

Amount
For the Year Ended December 31
	2025	2024
Impact of USD
Profit or loss	$ 1,290	$ 3,650

b) Interest rate risk

The following table shows the carrying amounts of the Group’s financial assets exposed to interest rate risk at the end of the reporting period:

December 31
	2025	2024
Fair value interest rate risk
Financial assets	$ 1,571,577	$ 2,483,874
Financial liabilities	16,911	12,084
Cash flow interest rate risk
Financial assets	3,589,894	2,339,569
Financial liabilities	187,285	149,686

46 -

Sensitivity analysis

The sensitivity analysis below was determined based on the Group’s exposure to interest rates for financial assets at the end of the year. The analysis was prepared assuming the amount of each asset and liability outstanding at the end of the year was outstanding for the whole year. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

If interest rates had been 1% higher/lower and all other variables were held constant, the Group’s pre-tax profit for the years ended December 31, 2025 and 2024 would increase/decrease by NT$34,026 thousand and NT$21,899 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 counterparties to discharge their obligation, could arise from the carrying amount of the respective recognized financial assets as stated in the consolidated balance sheets.

The Group adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group uses publicly available financial information and its own trading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee periodically.

Both the counterparties of cash and cash equivalent are creditworthy financial institutions; as a result, the significant credit risk is unexpected.

The Group’s concentration of credit risk of 36% of and 37% of total trade receivables as of December 31, 2025 and 2024, respectively was attributable to the Group’s the five largest customers in sales.

3) Liquidity risk

The Group manages liquidity risk by maintaining a sufficient level of cash and cash equivalents to meet the Group’s operational demand and mitigate the effects of fluctuations in cash flows.

Liquidity risk tables

The following tables detail the Group’s remaining contractual maturity of its non-derivative liabilities with agreed upon repayment periods. The tables had been drawn up based on the undiscounted cash flow of financial liabilities from the earliest date on which the Group can be required to pay.

47 -

	Less Than 3 Months	3 Months to 1 Year	1 Year to 5 Years	Total
December 31, 2025
Non-derivative financial liabilities
Non-interest bearing	$ 691,967	$ -	$ 515	$ 692,482
Lease liabilities	1,579	3,621	10,680	15,880
Interest bearing	49,609	141,855	-	191,464
	$ 743,155	$ 145,476	$ 11,195	$ 899,826
December 31, 2024
Non-derivative financial liabilities
Non-interest bearing	$ 811,235	$ -	$ 515	$ 811,750
Lease liabilities	1,551	4,013	5,181	10,745
Interest bearing	49,589	103,715	-	153,304
	$ 862,375	$ 107,728	$ 5,696	$ 975,799

The amounts included above for variable interest rate instruments of non-derivative financial liabilities are subject to change if changes in variable interest rates differ from those estimates of interest rates determined at the end of the year.

29. TRANSACTIONS WITH RELATED PARTIES

a. Name and category of related parties

Name of Related Party	Relationship with the Group
YODOKO, Ltd. (Formerly Yodogawa Steel Works Ltd.)	The Company’s parent
Toyota Tsusho Corporation	The Company’s institutional director (Termination effective in March 2025)
Yung Chi Paint & Varnish Mfg. Co., Ltd. (YCP)	The Company’s institutional director
Fujiden International Corporation (Fujiden)	The Company’s institutional director
Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd. (YSS)	Associate

b. Trading transactions

Line Item	Related Party Category	For the Year Ended December 31
		2025	2024
Sales Revenue	Associates	$ 4,821	$ 2,130
Purchases of goods	Parent company	$ 1,283	$ 1,701
	Institutional directors	453,884	621,475
	Associates	18,621	115,647
		$ 473,788	$ 738,823

Sales and purchases of goods to related parties were made at arm's length, except for some purchases of goods from the Group's institutional director-YCP, which were not comparable to those of third parties. There was no difference in the collection and payment terms between related and unrelated parties, which were about 10 days to 3 months.

Trade payables to related parties at the balance sheet date were as follows:

	December 31
	2025	2024
Related Party Category/Name
Institutional director - YCP	$ 89,166	$ 122,707

The outstanding trade payables to related parties are unsecured and will be paid by cash.

c. Other transactions with related parties

Under the terms of the technical service agreement entered into by the Company and YSW for providing technical assistance, the Company should calculate and pay semi-annually technical service fees to YSW. Also, the subsidiary YI has entered into a technical service agreement with YSW; under the terms of the agreement, the subsidiary YI should calculate and pay technical service fees semi-annually at a constant rate of operating revenue.

Information about service fees were as follows:

	For the Year Ended December 31
	2025	2024
Manufacturing expenses	$ 4,756	$ 4,759
Operating expenses	$ 4,278	$ 4,557

d. Remuneration of key management personnel

	For the Year Ended December 31
	2025	2024
Short-term employee benefits	$ 16,071	$ 13,847
Post-employment benefits	109	120
	$ 16,180	$ 13,967

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

The amounts of demand deposits and time deposits were provided as collateral for purchase contract of natural gas, bank financing and provisions warranties credits were as follows:

	December 31
	2025	2024
Other financial assets - current	$ 39,787	$ 42,610
Other financial assets - non-current	$ 18,000	$ 18,000

49 -

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

On December 31, 2025, the significant commitments and contingencies of the Group were as follows:

a. Unused letters of credit for purchases of raw materials amounted to approximately NT$304,198 thousand.

b. The outstanding contractual obligations for construction contracts signed by the Group amount to approximately NT$232,833 thousand.

c. The unpaid contract price for the acquisition of property, plant and equipment undertaken by the Group amounted to NT$118,826 thousand.

32. 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 foreign currencies and respective functional currencies were as follows:

	Foreign Currency (In Thousands)	Exchange Rate		Carrying Amount (In Thousands)
December 31, 2025
Assets
Monetary items
USD	$ 6,411	31.38	(USD:NTD)	$ 201,174
USD	119	7.144	(USD:RMB)	3,746
Non-monetary items
Investments accounted for using the equity method
RMB	17,940	0.142	(RMB:USD)	80,092
USD	1,825	31.38	(USD:NTD)	57,263
Non-current assets held for sale
RMB	58,712	4.471	(RMB:NTD)	262,501
Liabilities
Monetary items
USD	2,418	31.38	(USD:NTD)	75,879
December 31, 2024
Assets
Monetary items
USD	12,247	32.735	(USD:NTD)	400,907
				(Continued)

	Foreign Currency (In Thousands)	Exchange Rate		Carrying Amount (In Thousands)
Non-monetary items
Investments accounted for using the equity method
RMB	$ 58,352	4.453	(RMB:NTD)	$ 259,841
RMB	15,369	0.136	(RMB:USD)	68,439
USD	2,056	32.735	(USD:NTD)	67,318
Liabilities
Monetary items
USD	1,022	32.735	(USD:NTD)	33,452
USD	76	7.1884	(USD:RMB)	2,481
				(Concluded)

The total net foreign exchange gains and losses were loss of NT$33,034 thousand and gain of NT$46,105 thousand for the years ended December 31, 2025 and 2024, respectively. It is impractical to disclose net foreign exchange gains and losses by each significant foreign currency due to the variety of the foreign currency transactions and functional currencies of each entity.

33. SEPARATELY DISCLOSED ITEMS

a. Information about significant transactions and investees:

1) Financing provided to others. (Table 1)
2) Endorsements/guarantees provided. (None)
3) Significant marketable securities held. (excluding investments in subsidiaries and associates) (None)
4) Total purchases from or sales to related parties of at least NT$100 million or 20% of the paid-in capital. (Table 2)
5) Trade receivables from related parties of at least NT$100 million or 20% of the paid-in capital. (None)
6) Intercompany relationships and significant intercompany transactions. (Table 5)

b. Information on investees. (Table 3)

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 gain or loss, carrying amount of the investment at the end of the period, repatriated investment gain or loss, and limit on the amount of investment in the mainland China area. (Table 4)
2) Any of the following significant transactions with investee companies in mainland China, either directly or indirectly through a third area, 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 year. (None)
b) The amount and percentage of sales and the balance and percentage of the related receivables at the end of the year. (Not material)
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 ending balance, the interest rate range, and total current period interest with respect to financing of funds. (None)
f) Other transactions that have a material effect on the profit or loss for the year or on the financial position, such as the rendering or receiving of services. (None)

34. SEGMENT INFORMATION

Information reported to the chief operating decision maker for the purpose of resource allocation and assessment of segment performance. Specifically, the Group’s reportable segments were as follows:

Sheng Yu Steel Co., Ltd. (Sheng Yu) - manufactures and sells cold rolled, galvanized and prepainted steel coils.

Others - subsidiaries referred to in Note 11 which do not reach the quantitative threshold are considered as operating segments.

a. Segment revenues and results

The following was an analysis of the Group’s revenue and results from operations by reportable segments.

	Sheng Yu	Others	Total
For the year ended December 31, 2025
Revenues from external customers	$ 12,284,142	$ 986,748	$ 13,270,890
Inter-segment revenues	188,679	12,316	200,995
Segment revenues	$ 12,472,821	$ 999,064	13,471,885
Eliminations			(200,995)
Consolidated revenues			$ 13,270,890
Segment income	$ 239,411	$ 54,580	$ 293,991
Interest income			74,717
Interest expense			(5,637)
Share of the profit or loss of associates accounted for using the equity method			1,573
Other non-operating income and expenses			(47,113)
Profit before tax			$ 317,531
			(Continued)

52 -

	Sheng Yu	Others	Total
For the year ended December 31, 2024
Revenues from external customers	$ 12,871,314	$ 819,387	$ 13,690,701
Inter-segment revenues	173,952	35,319	209,271
Segment revenues	$ 13,045,266	$ 854,706	13,899,972
Eliminations			(209,271)
Consolidated revenues			$ 13,690,701
Segment income	$ 586,966	$ 38,185	$ 625,151
Interest income			76,663
Interest expense			(3,444)
Share of the profit or loss of associates accounted for using the equity method			(24,757)
Other non-operating income and expenses			61,191
Profit before tax			$ 734,804
			(Concluded)

Segment profit represents the profit before tax earned by each segment without allocation of central administration costs and directors' salaries, share of profit or loss of associates, interest income, gain or loss on disposal of property, plant and equipment, exchange gains or losses, 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
Sheng Yu	$ 10,911,887	$ 11,203,045
Others	663,394	566,755
Eliminations	(255,622)	(256,892)
Consolidated total assets	$ 11,319,659	$ 11,512,908
Segment liabilities
Sheng Yu	$ 836,533	$ 991,327
Others	387,882	325,006
Eliminations	(59,522)	(88,605)
Consolidated total liabilities	$ 1,164,893	$ 1,227,728

c. Other segment information

Other information reviewed by the chief operating decision maker or regularly provided to the chief operating decision maker were as follows:

	Depreciation and amortization		Amounts of additions (reduction) to non-current assets
	For the Year Ended December 31		For the Year Ended December 31
	2025	2024	2025	2024
Sheng Yu	$ 244,083	$ 275,427	$ 377,611	$ 383,540
Others	2,579	2,785	1,542	(3,428)
	$ 246,662	$ 278,212	$ 379,153	$ 380,112

Note: Non-current assets exclude financial instruments, investments accounted for using the equity method, deferred tax assets and net defined benefit assets.

d. Revenue from major products and services

	For the Year Ended December 31
	2025	2024
Galvanized steel coils	$ 5,966,604	$ 6,816,688
Prepainted steel coils	6,221,853	5,870,929
Other steel products	471,678	338,842
Net services revenue	119,019	127,968
Construction revenue	328,657	336,891
Other revenue	163,079	199,383
	$ 13,270,890	$ 13,690,701

e. Geographical information

The Group operates in two principal geographical areas - Taiwan and Asia.

The Group's revenue from external customers by customers' location and information about its non-current assets by location of assets are detailed below.

	Revenue from External Customers		Non-current Assets
	For the Year Ended December 31		December 31
	2025	2024	2025	2024
Taiwan	$ 9,573,563	$ 10,333,748	$ 2,900,719	$ 2,819,328
Asia	1,038,177	1,281,960	8,105	165
Europe and America	2,528,361	1,888,262	-	-
Others	130,789	186,731	-	-
	$ 13,270,890	$ 13,690,701	$ 2,908,824	$ 2,819,493

Non-current assets exclude financial instruments, investments accounted for using the equity method, deferred tax assets and net defined benefit assets.

f. Information about major customers

Individual customers accounting for at least 10% of the consolidated operating revenues for the year were as follows:

54 -
| For the Year Ended December 31 | | |
| --- | --- | --- |
| | 2025 | 2024 |
| Customer A | $ 1,734,042 | $ 1,776,458 |

TABLE 1

SHENG YU STEEL CO., LTD. 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 Parties	Highest Balance for the Year (Note 1)	Ending Balance (Note 1)	Actual Borrowed Amount (Notes 5)	Interest Rate (%)	Nature of Financing (Notes 2)	Business Transaction Amounts	Reason for Short-term Financing	Allowance for Impairment Loss	Collateral		Financing Limits for Each Borrower (Note 3)	Aggregate Financing Limits (Note 4)
													Item	Value
0	The Company	Yodoko International Ltd.	Other receivables	Y	$ 150,000	$ 30,000	$ -	1.7-1.854	2	$ -	Operating capital	$ -	Promissory notes	$ 30,000	$ 1,007,535	$ 2,015,071
0	The Company	Sheng-Shing Worldwide Corp.	Other receivables	Y	219,660	109,830	50,208	4.07-4.775	2	-	Operating capital	-	Promissory notes	109,830	1,007,535	2,015,071

Note 1: Sheng-Shing Worldwide Corp. the highest balance for the year was US$7,000 thousand; the ending balance amount and the actual borrowing amount were all US$3,500 thousand; and collateral value was US$1,600 thousand; calculated the exchange rate of USD1: NT31.38 at the balance sheet date in December 2025.
Note 2: The number "1" represents for those who have business transactions; the number "2" represents for those in need of short-term financing.
Note 3: 10% of the net equity of the company.
Note 4: 20% of the net equity of the company.
Note 5: The amounts were eliminated in full upon consolidation.

TABLE 2

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

TOTAL PURCHASES FROM OR SALES TO RELATED PARTIES OF AT LEAST NTS100 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 Payable or Receivable
			Purchase/Sale	Amount	% of Total	Payment Terms	Unit Price	Payment Terms	Ending Balance	% of Total
Sheng Yu Steel Co., Ltd.	Yung Chi Paint & Varnish Mfg Co., Ltd.	Corporate Director	Purchase	$ 453,504	5	3 months	Note 29	-	$ (89,166)	(39)
Sheng Yu Steel Co., Ltd.	Yodoko International Ltd.	Company Subsidiaries	Sale	(167,170) (Note)	1	1 months	Note 29	-	7,996 (Note)	2

Note : The amounts were eliminated in full upon consolidation.

TABLE 3

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

INFORMATION OF 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		Balance 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
The Company	Yodoko International Ltd.	Taiwan	Processing steel, engineering, procurement and construction	$ 25,456	$ 19,607	2,045,750	82	$ 133,516	$ 14,674	$ 11,907	Note 1
The Company	Sheng-Shing Worldwide Corp.	Republic of Seychelles	Processing and selling galvanized steel coils	81,549	81,549	2,705,000	54	57,263	22,316	12,073	Note 1
Yodoko International Ltd.	Yodoko International (HK) Ltd.	Hong Kong	General investment	-	9,702	-	-	-	1	1	Note 2

Note 1: The amounts were eliminated in full upon consolidation.
Note 2: The liquidation of Yodoko International (HK) Ltd. was completed in October 2025, and the liquidation proceeds were subsequently remitted to the Company.

TABLE 4

SHENG YU STEEL CO., LTD. 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	Total Amount of Paid-in Capital	Method of Investment	Accumulated Outflow of Investment from Taiwan as of January 1, 2025	Remittance of Funds		Accumulated Outflow of Investment from Taiwan as of December 31, 2025	Net Income (Loss) of the Investee	Percentage of Ownership (%)	Shares of Profit/Losses	Carrying Amount as of December 31, 2025	Accumulated Inward Repatriation of Investment Income as of December 31, 2025	Note
					Outflow	Inflow
Yodoko Building Material (Hangzhou) Co., Ltd.	Manufacturing and selling metal architectural materials	$ 41,998	Investments were made through Yodoko International (HK) Ltd., a holding company registered in a third region.	$ 9,514	$ -	$ 9,514	$ -	$ -	-	$ -	$ -	$ -
Sheng-Shing (Dongguan) Corp.	Processing and selling galvanized steel coils	98,658	Investments were made through Sheng-Shing Worldwide Corp., a holding company registered in a third region.	58,752	-	-	58,752	-	-	-	-	-
Sheng-Yu Trading (Dongguan) Corp.	Selling hardware, steels and import and export trading	94,140	Investments were made through Sheng-Shing Worldwide Corp., a holding company registered in a third region.	46,611	-	-	46,611	23,493	54	12,709	80,092	-	Note 3
Yodogewo Shengyu (Hefei) High-Tech Steel Co., Ltd.	Manufacturing, processing and selling galvanized steel coils and prepainted steel coils	6,304,803	The Company directly invested in companies located in mainland China.	1,388,640	-	-	1,388,640	7,520	21	1,572	262,501	-	Note 1
Investee Company	Accumulated Investment in Mainland China as of December 31, 2025	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note 4)
---	---	---	---
The Company	$ 1,486,003	$ 1,517,825	$ 6,045,212

Note 1: The amount was recognized based on the financial statements audited by an international accounting firm that has a cooperation relationship with the accounting firm in the Republic of China. As of year-end, the balance was reclassified to Non-current assets held for sale. (Notes 10 and 12)
Note 2: The cumulative amount of investment remitted from Taiwan to Sheng-Yu Trading (Dongguan) Corp. at the end of the period was NT$46,611 thousand. This includes US$1,532 thousand of bank financing by Sheng-Shing Worldwide Corp. (US$1,000 thousand = 45% and US$2,000 thousand = 54.1%) reinvested in Sheng-Yu Trading (Dongguan) Corp.
Note 3: The amounts were eliminated in full upon consolidation.
Note 4: The maximum amount that can be invested shall not exceed sixty percent (60%) of the net equity of the Company, in accordance with the "Principles Governing the Review of Investments or Technical Cooperation in Mainland China" issued by the investment commission.

TABLE 5

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

INTERCOMPANY RELATIONSHIPS AND SIGNIFICANT INTERCOMPANY TRANSACTIONS

FOR THE YEAR ENDED DECEMBER 31, 2025

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

No.	Investee Company	Counterparty	Nature of Relationship (Note)	Transaction Details
				Financial Statement Item	Amount	Terms	% of Consolidated Net Revenue or Total Assets
0	The Company	Yodoko International Ltd.	Represents the transactions from parent to subsidiary.	Sales revenue	$ 167,170	Based on the commitment	1
0	The Company	Sheng-Shing Worldwide Corp.	Represents the transactions from parent to subsidiary.	Other receivables	50,208	Based on the commitment	-
0	The Company	Sheng-Shing Worldwide Corp.	Represents the transactions from parent to subsidiary.	Sales revenue	19,271	Based on the commitment	-
1	Sheng-Shing Worldwide Corp.	Sheng-Yu Trading (Dongguan) Corp.	Represents the transactions from parent to subsidiary.	Sales revenue	20,732	Based on the commitment	-
2	Yodoko International Ltd.	The Company	Represents the transactions from subsidiary to parent.	Construction service	12,314	Based on the commitment	-

Note: “0” for the Company.

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SYSCO — Audit Report / Information 2026

51955_rns_2026-05-19_0c186afd-3705-474e-ac4d-a2cfe85d43a9.pdf

INDEPENDENT AUDITORS' REPORT

Opinion

Basis for Opinion

Key Audit Matters

Recognition of Revenue

Notice to Readers

CONSOLIDATED BALANCE SHEETS

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024

CONSOLIDATED STATEMENTS OF CASH FLOWS

1. GENERAL INFORMATION

2. APPROVAL OF CONSOLIDATED FINANCIAL STATEMENTS

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

4. SUMMARY OF MATERIAL ACCOUNTING POLICY INFORMATION

8. NOTES RECEIVABLE, TRADE RECEIVABLES AND OTHER RECEIVABLES

Receivables at amortized cost

9. INVENTORIES

13. PROPERTY, PLANT AND EQUIPMENT

14. LEASE ARRANGEMENTS

17. NOTES PAYABLE AND TRADE PAYABLES

18. OTHER PAYABLES

19. Provisions

20. RETIREMENT BENEFIT PLANS

21. EQUITY

23. PROFIT BEFORE INCOME TAX

24. INCOME TAX

25. EARNINGS PER SHARE

26. DISPOSAL OF SUBSIDIARIES

27. CAPITAL MANAGEMENT

28. FINANCIAL INSTRUMENTS

Sensitivity analysis

2) Credit risk

3) Liquidity risk

Liquidity risk tables

29. TRANSACTIONS WITH RELATED PARTIES

30. ASSETS PLEDGED AS COLLATERAL OR FOR SECURITY

31. SIGNIFICANT CONTINGENT LIABILITIES AND UNRECOGNIZED COMMITMENTS

32. SIGNIFICANT ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCIES

33. SEPARATELY DISCLOSED ITEMS

34. SEGMENT INFORMATION

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

FINANCING PROVIDED TO OTHERS

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

INFORMATION ON INVESTMENTS IN MAINLAND CHINA

FOR THE YEAR ENDED DECEMBER 31, 2025

SHENG YU STEEL CO., LTD. AND SUBSIDIARIES

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SYSCO Audit Report / Information 2026