SYSCO — Interim / Quarterly Report 2025

May 19, 2026

Stock Code: 2029

Sheng Yu Steel Co., Ltd. and Its Subsidiaries

Consolidated Financial Statements and Accountants' Review Report Q1 2025 and Q1 2024

Address: No. 11, Zhonglin Rd., Xiaogang Dist., Kaohsiung City
TEL: (07)871-9000

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§TABLE OF CONTENTS§

Item		Page	Notes to Consolidated Financial Statements
1.	Cover	1	-
2.	Table of Contents	2	-
3.	CPA Review Report	3~4	-
4.	Consolidated Balance Sheet	5	-
5.	Consolidated Statement of Comprehensive Income	6~7	-
6.	Consolidated Statement of Changes in Equity	8	-
7.	Consolidated Statement of Cash Flows	9~10	-
8.	Notes to the Consolidated Financial Statements
	(1) Company History	11	1
	(2) The Date When the Financial Reports Were Authorized for Issuance and The Process Involved	11	2
	(3) Application of Newly Issued and Revised Standards and Interpretations	11~13	3
	(4) Summary and Explanation of Material Accounting Policies	13~14	4
	(5) Primary Sources of Uncertainty in Major Accounting Judgments, Estimates, and Assumptions	14~15	5
	(6) Description of Significant Accounting Items	15~35	6~25
	(7) Related-Party Transactions	35~36	26
	(8) Pledged Assets	36	27
	(9) Significant Contingent Liabilities and Unrecognized Contractual Commitments	37	28
	(10) Significant Disaster Damage	-	-
	(11) Significant Subsequent Events	-	-
	(12) Information on Foreign Currency Assets and Liabilities with Significant Effect	37~38	29
	(13) Note Disclosure		30
	1. Information on Material Transactions	38~39
	2. Information on Investment Business	39
	3. Information on Investment in Mainland China	39
	(14) Operating Department Information	39~41	31

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CPA Review Report

To Sheng Yu Steel Co., Ltd.

Foreword

We have reviewed the accompanying Consolidated Balance Sheet of Sheng Yu Steel Co., Ltd. and its subsidiaries as of March 31, 2025 and 2024, and the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and Consolidated Statement of Cash Flows for the periods from January 1 to March 31, 2025 and 2024, as well as the accompanying Notes to the Consolidated Financial Statements, which include a summary of significant accounting policies. It is the responsibility of management to prepare fairly presented consolidated financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and International Accounting Standard 34, "Interim Financial Reporting," as endorsed and issued into effect by the Financial Supervisory Commission (FSC), while it is our responsibility to express a conclusion on these consolidated financial statements based on our review.

Scope

Except the part described in the section of the basis of qualified conclusion, we have conducted our review pursuant to TWSRE2410, "Review of Financial Statements." The procedures applied in reviewing the consolidated financial statements include making inquiries (primarily of persons responsible for financial and accounting matters), analytical procedures and other review procedures. A review is significantly less in scope than an audit and consequently we may not be able to discern all significant matters that might be identified by an audit and therefore do not express an audit opinion.

Basis for Qualified Conclusion

As described in Note 10 of the consolidated financial statements, the total assets of immaterial subsidiaries listed in the preamble of the consolidated financial statements as of March 31, 2025 and 2024, were NT$620,853 thousand and NT$447,206 thousand, respectively, accounting for 5% and 4% of the total consolidated assets; their total liabilities were NT$368,534 thousand and NT$227,911 thousand, respectively, accounting for 22% and 17% of the total consolidated liabilities. Their comprehensive income from January 1 to March 31, 2025, and 2024, were gains of NT$10,329 thousand and NT$2,028 thousand, respectively, accounting for 6% and 1% of the total consolidated comprehensive income. These figures were prepared and disclosed based on the financial statements of these subsidiaries for the same periods, which

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have not been reviewed by CPAs. As described in Note 11 of the consolidated financial statements, the investments of Sheng Yu Steel Co., Ltd. and its subsidiaries accounted for using the equity method as of March 31, 2025 and 2024 were NT$263,227 thousand and NT$271,723 thousand, respectively. Their shares of comprehensive loss recognized using the equity method from January 1 to March 31, 2025 and 2024 were NT$2,171 thousand and NT$8,160 thousand, respectively, based on the financial statements of the investee companies for the same periods, which have not been reviewed by CPAs.

Qualified Conclusion

Based on our review, except for the effects of such immaterial subsidiaries mentioned in the section of Basis for Qualified Conclusion and the financial statements about the investments accounted for using the equity method as described in the section of the basis of qualified conclusion on the consolidated financial statements, which might have been adjusted had the accountants reviewed them, we have not identified any material respects in which the consolidated financial statements referred to above have not been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34, "Interim Financial Reporting," as endorsed and issued into effect by the FSC, and accordingly, cannot present fairly the consolidated financial position of Sheng Yu Steel Co., Ltd. and its subsidiaries as of March 31, 2025 and 2024, and the consolidated financial performance and consolidated cash flows for the periods from January 1 to March 31, 2025 and 2024.

Deloitte Taiwan
CPA CHEN, HSIU-WEN
CPA KUO, LI-YUAN

FSC Approval Number
Jin-Guan-Zheng-Shen-Zi No.
1120349008

Securities and Futures Commission Approval Number
Tai-Cai-Zheng-Liu-Zi No. 0920123784

May 8, 2025

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries
Consolidated Balance Sheet
As of March 31, 2025, December 31, 2024 and March 31, 2024
Unit: NT$ thousands

Code	Assets	March 31, 2025		December 31, 2024		March 31, 2024
		Amount	%	Amount	%	Amount	%
Current assets
1100	Cash and cash equivalents (Note 6)	$ 3,347,932	29	$ 2,767,824	24	$ 4,192,124	38
1140	Contract assets - current (Note 21)	30,240	-	47,764	-	36,430	-
1150	Notes receivable (Note 8)	2,484	-	9,013	-	3,216	-
1170	Accounts receivable (Note 8)	930,852	8	1,008,663	9	801,201	7
1200	Other receivables (Note 8)	53,977	1	47,395	-	62,593	1
130X	Inventory (Note 9)	2,371,689	20	2,137,813	19	2,051,961	18
1421	Accounts prepaid	164,828	1	142,026	1	121,810	1
1476	Other financial assets - current (Note 7 and 27)	1,558,857	13	2,064,284	18	865,410	8
1479	Other current assets	20,330	-	9,158	-	18,123	-
11XX	Total current assets	8,481,189	72	8,233,940	71	8,152,868	73
Non-current assets
1550	Investment accounted for using the equity method (Note 11)	263,227	2	259,841	2	271,723	3
1600	Property, plant and equipment (Note 12)	2,326,611	20	2,361,531	21	2,124,615	19
1755	Right-of-use assets (Note 13)	9,749	-	10,621	-	10,354	-
1760	Investment property (Note 14)	309,907	3	310,402	3	310,868	3
1801	Computer software	15,631	-	15,672	-	15,220	-
1840	Deferred tax assets	94,661	1	84,498	1	81,808	1
1915	Prepayments for business facilities	105,263	1	119,426	1	118,740	1
1920	Refundable deposits	2,994	-	2,944	-	2,883	-
1975	Net defined benefit assets- non-current (Note 4)	96,510	1	94,192	1	355	-
1980	Other financial assets - non-current (Note 7 and 27)	18,000	-	18,000	-	18,000	-
1990	Other non-current assets	2,056	-	1,841	-	1,723	-
15XX	Total non-current assets	3,244,609	28	3,278,968	29	2,956,289	27
1XXX	Total assets	$ 11,725,798	100	$ 11,512,908	100	$ 11,109,157	100
Liabilities and Equity
Current liabilities
2100	Short-term loans (Note 15)	$ 170,559	1	$ 151,735	1	$ 54,489	-
2130	Contract liabilities - current (Note 21)	120,435	1	42,751	-	115,282	1
2150	Notes payable (Note 16)	152	-	495	-	100	-
2170	Accounts payable (Note 16)	233,262	2	223,498	2	168,390	2
2180	Accounts payable - Related parties (Note 16 and 26)	137,164	1	122,707	1	122,030	1
2216	Dividends payable	401,475	3	-	-	401,475	4
2219	Other payables (Note 17)	311,924	3	464,535	4	229,765	2
2230	Current income tax liabilities	121,102	1	68,671	1	106,718	1
2280	Lease liabilities - current (Note 13)	5,207	-	5,438	-	4,946	-
2365	Refund liabilities - current	64,191	1	54,217	-	44,760	-
2399	Other current liabilities (Note 18)	10,609	-	6,520	-	7,880	-
21XX	Total current liabilities	1,576,080	13	1,140,567	9	1,255,835	11
Non-current liabilities
2550	Provision for liabilities (Note 18)	9,452	-	9,452	-	7,757	-
2570	Deferred income tax liabilities	72,813	1	72,597	1	54,008	-
2580	Lease liabilities - non-current (Note 13)	3,957	-	4,597	-	4,875	-
2640	Net defined benefit liability (Note 4)	36	-	-	-	4,937	-
2645	Deposits received	515	-	515	-	515	-
25XX	Total non-current liabilities	86,773	1	87,161	1	72,092	-
2XXX	Total liabilities	1,662,853	14	1,227,728	10	1,327,927	11
Equity attributable to the owners of the Company (Note 20)
3110	Ordinary share capital	3,211,800	28	3,211,800	28	3,211,800	29
3200	Capital reserves	1,557,969	13	1,557,364	14	1,557,364	14
Retained earnings
3310	Legal reserve	1,902,403	16	1,902,403	17	1,846,723	17
3320	Special reserve	7,023	-	7,023	-	14,536	-
3350	Unappropriated retained earnings	3,300,923	28	3,527,632	30	3,084,681	28
3300	Total retained earnings	5,210,349	44	5,437,058	47	4,945,940	45
3400	Other equity	11,958	-	5,496	-	398	-
31XX	Total equity attributable to the owners of the Company	9,992,076	85	10,211,718	89	9,715,502	88
36XX	Non-controlling interest	70,869	1	73,462	1	65,728	1
3XXX	Total equity	10,062,945	86	10,285,180	90	9,781,230	89
Total liabilities and equity		$ 11,725,798	100	$ 11,512,908	100	$ 11,109,157	100

The notes to the consolidated financial statements are part of the consolidated financial statements.

(Please refer to the Review Report issued by Deloitte Taiwan on May 8, 2025)

Chairperson: Koichi Tarumiya
Manager: HONG, SHI-CHIANG
Accounting Manager: KUO, PEI-YU

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries
Consolidated Statement of Comprehensive Income
From January 1 to March 31, 2025 and 2024
Unit: NT$ thousands. Except the earnings per share are in NT$

Code		From January 1 to March 31, 2025		From January 1 to March 31, 2024
		Amount	%	Amount	%
4100	Operating revenue (Note 21)	$3,798,303	100	$3,302,742	100
5110	Operating cost (Note 9, 22 and 26)	3,360,025	88	2,965,936	90
5900	Gross profit	438,278	12	336,806	10
	Operating expenses (Notes 22 and 26)
6100	Promotion expense	159,758	4	94,535	3
6200	Administration expense	62,980	2	58,925	2
6300	R&D expenses	21,658	1	20,032	1
6000	Total operating expenses	244,396	7	173,492	6
6900	Operating profit	193,882	5	163,314	4
	Non-operating revenue/expense (Note 11 and 22)
7100	Interest income	17,649	1	19,144	1
7010	Other income	183	-	-	-
7020	Other gains and losses	14,072	-	24,732	1
7050	Interest expense	(1,395)	-	(478)	-
7060	Shares of the profit and loss of the affiliates and joint ventures recognized using the equity method	(2,171)	-	(8,160)	-
7000	Total non-operating revenue/expense	28,338	1	35,238	2
7900	Net profit before tax	222,220	6	198,552	6
7950	Income tax expense (Note 4 and 23)	44,274	1	41,345	1
8200	Net income	177,946	5	157,207	5
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(Continued from the previous page)

Code		From January 1 to March 31, 2025		From January 1 to March 31, 2024
		Amount	%	Amount	%
8360	Income tax expense (Note 20)
Components of other comprehensive income that will be reclassified to profit or loss
8361	Exchange difference on translation of the financial statements of foreign operations	$ 7,143	-	$ 8,875	-
8500	Total comprehensive income in the fiscal year	$ 185,089	5	$ 166,082	5
8610	Net profit attributable to:
The owners of the Company	$ 174,766		$ 156,801
8620	Non-controlling interest	3,180		406
8600		$ 177,946		$ 157,207
8710	The total comprehensive income attributable to
The owners of the Company	$ 181,228		$ 164,224
8720	Non-controlling interest	3,861		1,858
8700		$ 185,089		$ 166,082
9710	Earnings per share (Note 24)
Basic earnings	$ 0.54		$ 0.49
9810	Diluted earnings	$ 0.54		$ 0.49

The notes to the consolidated financial statements are part of the consolidated financial statements.

(Please refer to the Review Report issued by Deloitte Taiwan on May 8, 2025)

Chairperson: Koichi Tarumiya

Manager: HONG, SHI-CHIANG

Accounting Manager: KUO, PEI-YU

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries

Consolidated Statement of Changes in Equity

From January 1 to March 31, 2025 and 2024

Unit: NT$ thousands

Code		Equity Attributable to the Owners of the Company
Ordinary share capital	Capital reserves	Legal reserve
A1	Balance as of January 1, 2025	$ 3,211,800
B5	Appropriation and distribution of 2024 earnings (Note 20)	-
Cash dividends paid to shareholders	-	-
D1	Net income from January 1 to March 31, 2025	-
D3	Other comprehensive income after tax from January 1 to March 31, 2025	-
D5	The total comprehensive income from January 1 to March 31, 2025	-
M5	The difference between the price of the subsidiary's equity acquired or disposed of and the book value	-
O1	Changes in non-controlling interests (Note 20)	-
Z1	Balance as of March 31, 2025	$ 3,211,800
A1	Balance as of January 1, 2024	$ 3,211,800
B5	Appropriation and distribution of 2023 earnings (Note 20)	-
Cash dividends paid to shareholders	-	-
D1	Net income from January 1 to March 31, 2024	-
D3	Other comprehensive income after tax from January 1 to March 31, 2024	-
Z1	Balance as of March 31, 2024	$ 3,211,800

The notes to the consolidated financial statements are part of the consolidated financial statements.

(Please refer to the Review Report issued by Deloitte Taiwan on May 8, 2025)

Chairperson: Koichi Tarumiya

Manager: HONG, SHI-CHIANG

Accounting Manager: KUO, PEI-YU

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries
Consolidated Statement of Cash Flows
From January 1 to March 31, 2025 and 2024
Unit: NT$ thousands

Code	Cash flow from operating activities	From January 1 to March 31, 2025	From January 1 to March 31, 2024
A00010	Net profit before tax	$ 222,220	$ 198,552
A20010	Adjustments to reconcile profit (loss)
A20100	Depreciation expense	62,804	70,088
A20200	Amortization expense	1,540	1,155
A20900	Interest expense	1,395	478
A21200	Interest income	( 17,649 )	( 19,144 )
A22300	Share of the loss of affiliates and joint ventures accounted for using equity method	2,171	8,160
A22500	Net loss on the disposal of property, plant and equipment	253	1,873
A23700	Loss on falling prices of inventory	11,313	5,459
A29900	Loss on idle capacity	964	3,878
A29900	Recognition of provisions	1,314	437
A30000	Net changes in operating assets and liabilities
A31125	Contract assets	17,524	5,282
A31130	Notes receivable	6,529	( 1,506 )
A31150	Accounts receivable	82,131	( 22,095 )
A31180	Other receivables	( 7,315 )	( 29,011 )
A31200	Inventory	( 246,153 )	( 237,481 )
A31230	Accounts prepaid	( 22,802 )	( 5,037 )
A31240	Other current assets	( 11,172 )	( 14,679 )
A32125	Contract liabilities	77,684	76,453
A32130	Notes payable	( 343 )	( 66 )
A32150	Accounts payable	9,764	( 14,193 )
A32160	Accounts payable - related parties	14,457	10,719
A32180	Other payables	( 42,742 )	( 64,633 )
A32200	Provision for liabilities	-	( 15 )
A32230	Other current liabilities	2,775	465
A32240	Net defined benefit liability	( 2,282 )	( 1,783 )
A32990	Refund liabilities	9,974	( 6,911 )
A33000	Cash generated from operations (for use)	174,354	( 33,555 )

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(Continued from the previous page)

Code		From January 1 to March 31, 2025	From January 1 to March 31, 2024
A33100	Interest received	$ 18,382	$ 19,237
A33300	Interest paid	( 1,332)	( 537)
A33500	Income tax paid	( 1,790)	( 1,796)
AAAA	Net cash inflow (outflow) from operating activities	189,614	( 16,651)
	Cash flow from investing activities
B02700	Purchase of property, plant and equipment	( 121,888)	( 39,438)
B03700	Increase in refundable deposits	( 50)	-
B04500	Acquisition of intangible assets	( 1,499)	( 1,052)
B05400	Acquisition of investment property	-	( 10,721)
B06500	Increase in other financial assets	-	( 114,089)
B06600	Decrease in other financial assets	505,427	-
B06700	Increase in other non-current assets	( 215)	( 175)
BBBB	Net cash inflow (outflow) from investing activities	381,775	( 165,475)
	Cash flow from financing activities
C05400	Acquisition of shares of subsidiaries	( 5,849)	-
C00100	Increase in short-term loans	115,721	35,805
C00200	Decrease in short-term loans	( 99,210)	( 40,225)
C04020	Repayment of lease principal	( 1,520)	( 1,300)
CCCC	Net cash generated by (used in) financing activities	9,142	( 5,720)
DDDD	Effect of the changes in exchange rate on cash and cash equivalents	( 423)	( 2,213)
EEEE	Net increase (decrease) in cash and cash equivalents	580,108	( 190,059)
E00100	Beginning balance of cash and cash equivalents	2,767,824	4,382,183
E00200	Ending balance of cash and cash equivalents	$3,347,932	$4,192,124

The notes to the consolidated financial statements are part of the consolidated financial statements.

(Please refer to the Review Report issued by Deloitte Taiwan on May 8, 2025)

Chairperson: Koichi Tarumiya

Manager: HONG,

SHI-CHIANG

Accounting Manager: KUO,

PEI-YU

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries
Notes to the Consolidated Financial Statements
From January 1 to March 31, 2025 and 2024
(Unless otherwise specified, the basic unit for any amount shall be NT$ thousands)

1. Company history

Sheng Yu Steel Co., Ltd. (hereinafter referred to as the Company) was established in May 1973 and is principally engaged in the manufacture, processing and sale of cold rolled, galvanized and baked steel coils.

As of March 31, 2025, the Company’s equity interests are held by the following shareholders: Yodogawa Steel Works Ltd. (YSW) - 63% (parent company), Fujiden International Corporation (Joint venture of YSW) - 1%, and other shareholders - 36%.

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

The consolidated financial reports were expressed with the functional currency, New Taiwan Dollar, adopted by the Company.

1. Date and procedure for the adoption of the financial statements

The consolidated financial statements were approved by the Board of Directors on May 8, 2025.

1. Application of newly issued and revised standards and interpretations

(1) 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 application of amended IFRSs endorsed and issued to be effective by the FSC will not cause any material change to the accounting policies of the Company and its subsidiaries.

(2) The IFRS Accounting Standards endorsed by the FSC for application starting from 2026

Newly issued/amended/revised standards and interpretations	Effective date announced by IASB
The amendments to the application guidance on the classification of financial assets in the	January 1, 2026 (Note)

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"Classification and Measurement of Financial Instruments" under IFRS 9 and IFRS 7

Note: It is applicable to the annual reporting periods beginning on or after January 1, 2026. Enterprises may also choose to apply the same earlier on January 1, 2025.

As of the date the consolidated financial statements were approved and released by the Board of Directors, the Company and its subsidiaries were still evaluating the impact of the amendments to the financial position and financial performance.

(3) IFRSs Announced by IASB but Not Yet Endorsed and Issued into Effect by FSC

Newly issued/amended/revised standards and interpretations	Effective date announced by IASB (Note)
“Annual Improvements to IFRS Accounting Standards -- Volume 11”	January 01, 2026
Amendments to IFRS 9 and IFRS 7 – Revisions to the application guidance on derecognition of financial liabilities under the “Classification and Measurement of Financial Instruments”	January 01, 2026
Amendments to IFRS 9 and IFRS 7 – “Contracts for Renewable Electricity Generated from Natural Dependencies”	January 01, 2026
Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets between an Investor and its Associate or Joint Venture”	To be determined.
IFRS 17 “Insurance Contracts”	January 01, 2023
Amendments to IFRS 17	January 01, 2023
Amendments to IFRS 17 “Initial Application of IFRS 17 and IFRS 9 - Comparative Information”	January 01, 2023
IFRS 18 “Presentation and Disclosure in Financial Statements”	January 01, 2027
IFRS 19 “Subsidiaries without Public Accountability: Disclosures”	January 01, 2027

Note: Unless otherwise specified, the above newly issued/amended/revised standards or interpretations are effective for annual reporting periods beginning after the respective dates.

IFRS 18 "Presentation and Disclosure in Financial Statements"

IFRS 18 will replace IAS 1 "Presentation of Financial Statements". The main changes include:

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The items of income and expenses should be classified into operating, investing, financing, income tax, and discontinued operations categories on the income statement.

The income statement shall present operating profit or loss, profit or loss before financing and income tax, as well as subtotals and totals of profit or loss.

Guidance should be provided to enhance aggregation and disaggregation requirements: The Company and its subsidiaries should identify assets, liabilities, equity, income, expenses, and cash flows arising from individual transactions or other events and classify and aggregate them based on shared characteristics so that each line item reported in the primary financial statements has at least one similar characteristic. Items with non-similarity characteristics in the main financial statements and notes should be divided. The Company and its subsidiaries only label such items as "other" when it is impossible to find a more information label.

Increased disclosure of management-defined performance measures: When the Company and its subsidiaries engage in public communications outside of the financial statements and communicate with users of the financial statements about management's views on a particular aspect of the Company's and its subsidiaries' overall financial performance, the Company and its subsidiaries should disclose information about management-defined performance measures in a single note in the financial statements, including a description of the measure, how it is calculated, a reconciliation to subtotals or totals specified by IFRS accounting standards, and the effects of income tax and non-controlling interests on related adjustment items.

In addition to the above effects, the Company and its subsidiaries are continuing to evaluate the impact of the amendments to other standards and interpretations on the financial position and financial performance as of the date of approval by the board of directors of the consolidated financial statements, and the other related effects will be disclosed when the evaluation is completed.

1. Summary and explanation of material accounting policies

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(1) Compliance statement

This consolidated financial statement is prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and IAS 34 "Interim Financial Reporting" endorsed and issued into effect by the Financial Supervisory Commission. This consolidated financial statement does not include all disclosed information of IFRS accounting statements required for the entire annual consolidated financial statement.

(2) Basis of consolidation

See Note 10 and Schedules 3 and 4 for the breakdown, shareholding ratio and operating items of subsidiaries.

(3) Other significant accounting policies

Except as described below, please refer to the summary and explanation of material accounting policies in the consolidated financial statements for fiscal 2024.

1. Provision for carbon liabilities

The carbon fee liability reserve recognized in accordance with the relevant laws and regulations, including the carbon fee collection regulations, is based on the best estimate of the expenditure required to settle the current year's obligations, and is recognized and measured based on the proportion of actual emissions to the annual emissions.

1. Defined post-employment benefits

Pension cost for the interim period is calculated using the actuarially determined pension cost rate as of the prior year-end, based on the beginning of the year to the end of the period, adjusted for significant market fluctuations and significant plan amendments, liquidations or other significant one-time events during the current period.

1. Income tax expense

Income tax expense is the sum of current income taxes and deferred income taxes. Income taxes for the interim periods are assessed on an annual basis, and the pre-tax income for the period is calculated using the tax rate applicable to the expected total annual earnings.

1. Primary sources of uncertainty in major accounting judgments, estimates, and assumptions

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The primary sources of uncertainty in significant accounting judgments, estimates and assumptions used in the consolidated financial statements are the same as those used in the fiscal 2024 consolidated financial statements.

1. Cash and cash equivalents

	March 31, 2025	December 31, 2024	March 31, 2024
Cash on hand and working capital	$ 1,463	$ 1,345	$ 1,349
Checks and demand deposits	296,071	182,605	213,787
Cash equivalents (Investments with original maturity of less than 3 months)
Fixed deposits	1,279,000	100,000	180,000
Repurchase	1,771,398	2,483,874	3,796,988
	$ 3,347,932	$ 2,767,824	$ 4,192,124

The interest rate ranges of the bonds with a maturity date of less than 3 months with a buyback agreement were 1.05% - 4.55%, 1.48% - 4.65% and 1.05% - 5.5% per annum as of March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

1. Other financial assets

	March 31, 2025	December 31, 2024	March 31, 2024
Current
Bank time deposits with original maturity of more than 3 months	$ 1,513,016	$ 2,021,674	$ 845,390
Pledged time deposit	45,436	41,754	18,507
Project security deposit	405	856	1,513
	$ 1,558,857	$ 2,064,284	$ 865,410
	March 31, 2025	December 31, 2024	March 31, 2024
Non-current
Pledged time deposit	$ 18,000	$ 18,000	$ 18,000

The interest rate ranges of the time deposits with original maturity date of more than 3 months were 1.555% - 4.27%, 0.795% - 4.62% and 0.65% - 5.30% per annum on March 31, 2025, December 31, 2024, and March 31, 2024, respectively.

The above assets are subject to restrictions and pledged as described in Note 27.

1. Notes receivable, accounts receivable and other receivables

	March 31, 2025	December 31, 2024	March 31, 2024
Notes receivable
Occurred as a result of business operation	$ 2,484	$ 9,013	$ 3,216

---

Accounts receivable
Occurred as a result of business operation
$ 930,852 $ 1,008,663 $ 810,909
Minus: allowance for loss
- - 9,708
$ 930,852 $ 1,008,663 $ 801,201

Other receivables
Business tax refund
$ 30,343 $ 23,086 $ 35,047
Purchase performance discount
15,349 16,410 16,748
Interest income
6,453 7,186 7,400
Others
1,832 713 3,398
$ 53,977 $ 47,395 $ 62,593

Receivables measured at amortized cost

Notes receivable, accounts receivable and other receivables are measured at amortized cost. The related credit and credit management policies are described in Note 25.

The Company and its subsidiaries recognize an allowance for losses on receivables based on the expected credit losses during the period of continuation. The expected credit losses for the duration of the period are calculated using an allowance matrix, which takes into account the customer's past default history and current financial position. Since the Company and its subsidiaries' credit loss history shows that there is no significant difference in loss patterns among different customer groups, the allowance matrix does not further differentiate between customer groups and only uses the number of days past due to determine the expected credit loss rate.

The Company and its subsidiaries measured the allowance for losses on receivables based on the allowance matrix as follows:

March 31, 2025

	Not overdue	1 to 30 days past due	31 to 90 days past due	Over 90 days past due	Subtotal
Total carrying amount	$ 930,520	$ 2,816	$ -	$ -	$ 933,336
Allowance for loss	-	-	-	-	-
Amortized cost	$ 930,520	$ 2,816	$ -	$ -	$ 933,336

December 31, 2024

	Not overdue	1 to 30 days past due	31 to 90 days past due	Over 90 days past due	Subtotal
Total carrying amount	$ 939,226	$ 78,450	$ -	$ -	$1,017,676
Allowance for loss	-	-	-	-	-
Amortized cost	$ 939,226	$ 78,450	$ -	$ -	$1,017,676

March 31, 2024

---

The changes of loss allowance in the accounts receivable are as follows:

	Not overdue	1 to 30 days past due	31 to 90 days past due	Over 90 days past due	Subtotal
Total carrying amount	$ 788,595	$ 15,822	$ -	$ 9,708	$ 814,125
Allowance for loss	-	-	-	( 9,708)	( 9,708)
Amortized cost	$ 788,595	$ 15,822	$ -	$ -	$ 804,417
	From January 1 to March 31, 2025	From January 1 to March 31, 2024
---	---	---
Beginning balance	$ -	$ 9,330
Foreign exchange difference	-	378
Ending balance	$ -	$ 9,708

9. Inventories

	March 31, 2025	December 31, 2024	March 31, 2024
Finished goods	$ 747,396	$ 756,398	$ 686,054
Work in process	251,170	283,517	162,401
Raw material	1,319,489	1,039,526	1,148,212
Material	34,141	37,870	36,737
Others	19,493	20,502	18,557
	$ 2,371,689	$ 2,137,813	$ 2,051,961

Operating costs related to inventories consist of the following items:

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Loss on falling prices of inventory	$ 11,313	$ 5,459
Loss on idle capacity	$ 964	$ 3,878

10. Subsidiaries

The consolidated financial statements were prepared based on the information of the following companies:

Name of Subsidiary	Name of Subsidiary	Business nature	Shareholding percentage			Note 1
			March 31, 2025	December 31, 2024	March 31, 2024
Sheng Yu Steel Co., Ltd.	Yodoko International Ltd.	Steel processing and contracting	82	78	78
	Sheng-Shing Worldwide Corp.	Galvanized steel coil cutting and processing	54	54	54
Yodoko International Ltd.	Yodoko International (HK) Ltd.	General investment business	100	100	100	Note 2
Sheng-Shing Worldwide Corp.	Dongguan Shengyu Trading Co., Ltd. (Dongguan Shengyu)	Wholesale, import and export of hardware and steel products	100	100	100

Note 1: In March 2025, Sheng Yu acquired the shares of Yodoko International Ltd. from the institutional director, Toyota Tsusho Corporation, and the shareholding ratio was increased to 82%. The consideration was NT$5,849

---

thousand, and the difference between the consideration and the net equity value of the Company was NT$605 thousand.

Note 2: The Board of Directors of Yodoko International Ltd. resolved to liquidate its subsidiary, Yodoko International (HK) Ltd. in March 2025. As of the date of publication of the consolidated financial statements, the date of liquidation has not been determined.

11. Investments accounted for using the equity method

Individually insignificant affiliates

	March 31, 2025	December 31, 2024	March 31, 2024
Yodogawa-Shengyu (Hefei) High-Tech Steel Co., Ltd.	$263,227	$259,841	$271,723
	From January 1 to March 31, 2025		From January 1 to March 31, 2024
Shares of the Company and subsidiaries
Net loss for the period	($ 2,171)		($ 8,160)
Other comprehensive income or loss	-		-
Total comprehensive income or loss	($ 2,171)		($ 8,160)

12. Property, plant and equipment

From January 1 to March 31, 2025

C o s t	Building and Machinery Transportation O t h e r Unfinished
	L a n d construction	equipment	equipment	equipment	construction	Sub total
Balance as of January 1, 2025	$ 491,938	$ 1,979,513	$ 9,802,790	$ 55,087	$ 404,987	$ 415,921	$ 13,150,236
Addition	-	61,390	87,670	-	11,339	( 134,280)	26,119
Disposal	-	( 87)	( 92,157)	-	( 5,169)	-	( 97,413)
Net exchange difference	-	-	-	32	2	-	34
Balance as of March 31, 2025	491,938	2,040,816	9,798,303	55,119	411,159	281,641	13,078,976
Accumulated depreciation
Balance as of January 1, 2025	-	1,760,906	8,694,102	41,745	291,952	-	10,788,705
Depreciation expense	-	9,174	45,865	934	4,815	-	60,788
Disposal	-	( 80)	( 92,157)	-	( 4,923)	-	( 97,160)
Net exchange difference	-	-	-	30	2	-	32
Balance as of March 31, 2025	-	1,770,000	8,647,810	42,709	291,846	-	10,752,365
Net balance as of December 31, 2024	$ 491,938	$ 218,607	$ 1,108,688	$ 13,342	$ 113,035	$ 415,921	$ 2,361,531
Net balance as of March 31, 2025	$ 491,938	$ 270,816	$ 1,150,493	$ 12,410	$ 119,313	$ 281,641	$ 2,326,611

From January 1 to March 31, 2024

C o s t	Building and Machinery Transportation O t h e r Unfinished
	L a n d construction	equipment	equipment	equipment	construction	Sub total
Balance as of January 1, 2024	$ 491,938	$ 1,973,468	$ 9,745,728	$ 52,740	$ 403,675	$ 126,367	$ 12,793,916
Addition	-	15,250	58,551	1,776	2,644	( 62,887)	15,334
Disposal	-	( 8,000)	( 45,550)	-	( 2,029)	-	( 55,579)
Net exchange difference	-	-	-	86	7	-	93
Balance as of March 31, 2024	491,938	1,980,718	9,758,729	54,602	404,297	63,480	12,753,764
Accumulated depreciation

---

The property, plant and equipment of the Company and its subsidiaries are depreciated on a straight-line basis over the following useful lives:

Balance as of January 1, 2024	-	1,735,434	8,558,190	37,803	282,935	-	10,614,362
Depreciation expense	-	8,901	54,175	933	4,413	-	68,422
Disposal	-	( 7,788)	( 44,196)	-	( 1,722)	-	( 53,706)
Net exchange difference	-	-	-	65	6	-	71
Balance as of March 31, 2024	-	1,736,547	8,568,169	38,801	285,632	-	10,629,149
Net balance as of March 31, 2024	$ 491,938	$ 244,171	$ 1,190,560	$ 15,801	$ 118,665	$ 63,480	$ 2,124,615

The property, plant and equipment of the Company and its subsidiaries are depreciated on a straight-line basis over the following useful lives:

Building and construction
Office	20~60 years
Plant	5~60 years
Building improvements	5~60 years
Auxiliary equipment	5~60 years
Machinery equipment
Main equipment	10~37 years
Auxiliary equipment	3~40 years
Transportation equipment	5~17 years
Other equipment
Main equipment	2~26 years

13. Lease agreement

(1) Right-of-use assets

	March 31, 2025	December 31, 2024	March 31, 2024
Carrying amount of right-of-use assets
Land	$ 407	$ 423	$ 471
Building and construction	1,040	1,276	-
Transportation equipment	8,302	8,922	9,883
	$ 9,749	$ 10,621	$ 10,354
	From January 1 to March 31, 2025		From January 1 to March 31, 2024
Additions of right-of-use assets	$ 659		$ -
Depreciation expense of right-of-use assets
Land	$ 16		$ 16
Building and construction	235		-
Transportation equipment	1,270		1,274
	$ 1,521		$ 1,290

---

Other than the above mentioned additions and recognized depreciation expenses, the Company and Its Subsidiaries' right-of-use assets did not undergo significant sublease or impairment from January 1 to March 31, 2025 and 2024.

(2) Lease liabilities

	March 31, 2025	December 31, 2024	March 31, 2024
Lease liabilities Carrying amount
Current	$5,207	$5,438	$4,946
Non-current	$3,957	$4,597	$4,875

The discount rate range for the Lease liabilities (%) is as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Land	-	-	-
Building and construction	1.812	1.812	-
Transportation equipment	0.864~1.812	0.864~1.812	0.86~0.874

(3) Other leasing information

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Short-term and low-value asset lease payments	$ 451	$ 664
Total amount of cash outflow from lease	$ 2,002	$ 1,987

Subsidiaries as Lessors

The subsidiaries lease machinery and equipment to non-related parties under operating leases. Rental income for the periods from January 1 to March 31, 2025 and 2024 amounted to NT$183 thousand and NT$180 thousand, respectively.

The Company and Its Subsidiaries as Lessees

When the Company and its subsidiaries are the lessee, the Company elects to apply the recognition exemption to leases of buildings that qualify as short-term leases and certain other equipment that qualify as low-value asset leases, and does not recognize the related right-of-use assets and lease liabilities for these leases.

1. Investment property

---

The investment properties are located in Fangliao Township and Jiadong Township, Pingtung County, and are held for sale or lease. Aside from the recognition of depreciation expenses and the addition of NT$10,721 thousand in investment properties for the Pingnan plant from January 1 to March 31, 2024, there was no significant change in investment properties from January 1 to March 31, 2025 and 2024.

The depreciation for the Company and its subsidiaries' investment properties is calculated on a straight-line basis over the following useful lives:

Building and construction
Administration and engineering center 32~47 years
Main plant 8~17 years
Electrical and power equipment 3~14 years

The fair value of the investment properties of the Company and its subsidiaries as of March 31, 2025, December 31, 2024, and March 31, 2024 was NT$1,584,362 thousand. The fair value was based on an appraisal conducted by an independent third-party appraiser (not a related party) in December 2023, using market evidence of comparable property transactions. The Company and its subsidiaries believe that the fair values of these investment properties will not significantly fluctuate within two years after the appraisal, and thus conduct appraisals every two years.

1. Short-term loans
   | | March 31, 2025 | December 31, 2024 | March 31, 2024 |
   | --- | --- | --- | --- |
   | Guaranteed loans (Note 27) | | | |
   | Bank loans | $147,341 | $149,686 | $52,462 |
   | Unsecured borrowings | | | |
   | Bank loans | 4,973 | - | - |
   | Non-related party loans | 18,245 | 2,049 | 2,027 |
   | | $170,559 | $151,735 | $54,489 |
   | Interest rate | | | |
   | Secured loans (%) | 2.85~3.45 | 3.05~3.70 | 3.80~3.85 |
   | Unsecured loans (%) | 1.20~5.40 | 3.00 | 3.00 |

Due to short-term capital needs, Dongguan Shengyu Trading Co., Ltd., a subsidiary, obtained financing loans from non-related parties. The loan balances as of March 31, 2025, December 31, 2024, and March 31, 2024 were NT$18,245 thousand, NT$2,049 thousand, and NT$2,027 thousand, respectively (equivalent to RMB 3,950 thousand, RMB 450 thousand, and RMB 450 thousand).

1. Notes payable and Accounts payable
2. 21 -

---

The credit period for raw materials is within three months, except for steel coils which are on credit and zinc and aluminum ingots which are on prepayment basis. The Company and its subsidiaries have a financial risk management policy to ensure that all payables are repaid within the prearranged credit period and therefore no interest is accrued.

17. Other payables

	March 31, 2025	December 31, 2024	March 31, 2024
Tariffs and dumping duties	$ 71,320	$ 32,782	$ 23,236
Compensated absences	44,813	45,288	42,484
Electricity	30,864	31,015	20,834
Year-end bonuses	30,565	121,339	29,438
Employee and director/supervisor compensation	26,169	20,805	18,067
Salaries	18,314	18,492	17,102
Maintenance	8,129	21,615	10,593
Purchases of equipment	6,001	115,933	3,743
Others	75,749	57,266	64,268
	$311,924	$464,535	$229,765

18. Provision for liabilities

The Company and its subsidiaries provide provision for liabilities based on the warranty expenses expected to be incurred during the warranty period after the completion of the contracted work. The estimate is based on historical warranty experience and is presented as follows based on the liquidity of the warranty expiration date:

	March 31, 2025	December 31, 2024	March 31, 2024
Provision for liabilities
Current (Included in other current liabilities)	$ 3,518	$ 2,204	$ 3,203
Non-current	9,452	9,452	7,757
	$12,970	$11,656	$10,960
	From January 1 to March 31, 2025		From January 1 to March 31, 2024
Beginning balance	$11,656		$10,538
Added this period	1,314		437
Usage for the current period	-		( 15 )
Ending balance	$12,970		$10,960

19. Post-employment benefit plans

---

The pension expenses related to the defined benefit plans recognized for the periods from January 1 to March 31, 2025 and 2024 are based on the actuarially determined pension cost rate as of December 31, 2024 and 2023, respectively.

20. Equity

(1) Common stock capital

Number of shares (thousand shares)	450,000
Authorized share capital (face value: NT$10/share)	$4,500,000
Number of issued and fully paid shares (thousand shares)	321,180
Share capital of issued shares	$3,211,800

(2) Capital reserves

	March 31, 2025	December 31, 2024	March 31, 2024
May be used to make good losses, to make cash payments or to increase capital (Note)
Share issue premium	$ 870,000	$ 870,000	$ 870,000
The difference between the price of the subsidiary's equity acquired or disposed of and the book value	605	-	-
	March 31, 2025	December 31, 2024	March 31, 2024
May only be used to cover losses
Share of capital reserve of affiliated companies recognized under the equity method	$ 687,364	$ 687,364	$ 687,364
	$ 1,557,969	$ 1,557,364	$ 1,557,364

Note: Such capital reserve may be used to offset a deficit, and may be distributed in cash dividends or capitalized as stock dividends when the Company has no deficit. However, the capital reserve may not exceed a certain percentage of the paid-in capital each year.

(3) Retained earnings and dividend policy

Under the dividends policy as set forth in the Articles, where the Company made a profit in a fiscal year, the profit shall be first utilized for paying taxes, offsetting losses of previous years, setting aside as legal reserve

---

10% of the remaining profit, (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 and regulations, and then any remaining profit together with any undistributed retained earnings shall be used by the Company's board of directors as the basis for proposing a distribution plan, which should be resolved in the shareholders' meeting for the distribution of dividends and bonuses to shareholders. The payment of dividends shall be made in the form of cash dividends of not less than 90% of the total dividends paid. The Company authorizes the board of directors to resolve to distribute all or part of the dividends and bonuses, capital surplus and legal reserve in the form of cash and report to the shareholders' meeting, which is not subject to the above shareholders' meeting resolution.

The legal reserve may be used to offset a deficit. If the Company has no deficit, the excess of the legal reserve over 25% of the paid-in capital may be distributed to shareholders in cash, in addition to being appropriated to capital.

The appropriations of the Company's earnings for fiscal 2024 and 2023 are as follows:

	2024	2023
Appropriation of 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 cash dividends were approved by the board of directors in March 2025 and 2024, respectively. The remaining appropriation of earnings in 2023 were approved in the regular shareholders' meeting in 2024. The appropriation of earnings in 2023 is to be decided in the regular shareholders' meeting held in June 2024.

(4) Other equity interest items

Exchange difference on translation of the financial statements of foreign operations

From January 1 to

From January 1 to

---

	March 31, 2025	March 31, 2024
Beginning balance	$ 5,496	($ 7,025)
Exchange difference arising on translation of foreign operations	6,462	7,423
Ending balance	$ 11,958	$ 398
(5) Non-controlling interests
	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Beginning balance	$ 73,462	$ 63,870
Net income	3,180	406
Other comprehensive income in the period
Exchange difference on translation of the financial statements of foreign operations	681	1,452
Non-controlling interests reduced by the acquisition of shares of subsidiaries (Note 10)	( 6,454 )	-
Ending balance	$ 70,869	$ 65,728

1. Income

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Income from customer contracts
Sales income	$3,596,388	$3,178,999
Construction income	110,619	37,415
Labor income	39,302	41,042
Other operating income	51,994	45,286
	$3,798,303	$3,302,742

(1) Contract balance

	March 31, 2025	December 31, 2024	March 31, 2024	January 1, 2024
Notes and accounts receivable	$ 933,336	$1,017,676	$ 804,417	$ 772,769
Contract assets
Construction	$ 30,240	$ 47,764	$ 36,430	$ 41,712
Contract liabilities
Merchandise sales	$ 78,966	$ 33,943	$ 47,248	$ 32,178
Construction	41,469	8,808	68,034	6,651

---

$ 120,435 $ 42,751 $ 115,282 $ 38,829

(2) Income from customer contracts

From January 1 to March 31, 2025

Income Type	Sheng Yu	Others	Subtotal
Sales of steel products	$ 3,476,863	$ 119,525	$ 3,596,388
Construction income	-	110,619	110,619
Labor income	39,220	82	39,302
Others	51,436	558	51,994
	$ 3,567,519	$ 230,784	$ 3,798,303

From January 1 to March 31, 2024

Income Type	Sheng Yu	Others	Subtotal
Sales of steel products	$ 3,094,540	$ 84,459	$ 3,178,999
Construction income	-	37,415	37,415
Labor income	40,838	204	41,042
Others	44,830	456	45,286
	$ 3,180,208	$ 122,534	$ 3,302,742

(3) Partially completed customer contracts

The apportioned transaction prices and expected points of recognition as revenue for outstanding performance obligations are as follows, which do not include restricted variable consideration estimates:

	March 31, 2025	December 31, 2024	March 31, 2024
Construction contract
Performed in 2024	$ -	$ -	$ 62,575
Performed in 2025	$203,651	$237,347	$647,370

1. Income before income tax

Net income before income tax includes the following items:

(1) Other gains and losses

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Net foreign exchange gain	$ 11,637	$ 25,155
Net loss on the disposal of property, plant and equipment	( 253)	( 1,873)
Others	2,688	1,450
	$ 14,072	$ 24,732

---

Net profit or loss from foreign currencies exchange in the statement above include:

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Total foreign currency exchange gain	$ 17,625	$ 28,664
Total foreign currency exchange loss	( 5,988 )	( 3,509 )
	$ 11,637	$ 25,155

(2) Depreciation and amortization

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Property, plant and equipment	$60,788	$68,422
Investment property	495	376
Right-of-use assets	1,521	1,290
Intangible assets	1,540	1,155
	$64,344	$71,243
Depreciation by function
Operating costs	$55,318	$63,342
Operating expenses	7,486	6,746
	$62,804	$70,088
Amortization by function
Operating expenses	$424	$144
Operating expenses	1,116	1,011
	$1,540	$1,155

(3) Interest expense

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Interest on bank loans	$1,364	$455
Interest on lease liabilities	31	23
	$1,395	$478

(4) Employee benefit expenses

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Short-term employee benefits
Salaries	$147,280	$140,540
Insurance premiums	14,675	14,538
Others	11,418	11,729
	173,373	166,807

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• 28 -

Post-employment benefits
Defined contribution plans	5,153	5,072
Defined benefit plans (Note 19)	57	477
	5,210	5,549
	$178,583	$172,356
Aggregated by function
Operating costs	$103,529	$ 99,222
Operating expenses	75,054	73,134
	$178,583	$172,356

(5) Employee compensation and director compensation

The Company’s Articles of Incorporation provide for employee and director compensation at a rate of not less than 0.1% and not more than 3% of the net income before the distribution of employee and director compensation, respectively, for the current year.

According to the amendment to the Securities and Exchange Act in August 2024, the Company plans to amend its Articles of Incorporation at the 2025 shareholders' meeting. The amendment will specify that, before recognizing employees' compensation and directors' remuneration as expenses, no less than 2% of the current year’s pre-tax profit shall be allocated as employees’ compensation, and no more than 3% shall be allocated as directors’ remuneration. Among the allocated amount for employees’ compensation, no less than 40% must be distributed to entry-level employees. The estimated compensation to employees and directors for the periods from January 1 to March 31, 2025 and 2024 are as follows:

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Employee compensation	$ 4,291	$ 3,125
Director compensation	1,073	1,042

If there is still a change in the amount after the annual consolidated financial report is released, it will be treated as a change in accounting estimates and will be adjusted and accounted for in the next year.

---

The remuneration (paid in cash) of employees and directors in 2024 and 2023 was resolved by the board of directors in March 2025 and 2024, respectively, 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.

Please refer to the "Market Observation Post System" of the Taiwan Stock Exchange for information on the compensation to employees and directors resolved by the board of directors.

23. Income Tax

(1) Major components of income tax expense recognized in profit or loss

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Current income tax Generated in the period	$ 54,221	$ 42,551
Deferred income tax Generated in the period	( 9,947 )	( 1,206 )
	$ 44,274	$ 41,345

(2) Income tax assessment

The income tax returns of the Company and its subsidiary, Yodoko International Ltd., for the year ended 2022 have been approved by the tax authorities.

24. Earnings per share

The net income and weighted-average number of shares of common stock used to calculate earnings per share were as follows:

Net income

---

• 30 -

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Net profit attributable to the owners of the Company	$174,766	$156,801

Number of shares

	From January 1 to March 31, 2025	Unit: thousands of shares
Weighted average number of shares of common stock used to calculate Basic earnings per share	321,180	321,180
Influence of dilutive potential common shares - Compensation of employees	634	376
Weighted average number of shares of common stock used to calculate Diluted earnings per share	321,814	321,556

If the Company has the option of paying employees in stock or cash, it is assumed that employee compensation will be paid in stock and is included in the weighted-average number of shares outstanding for the purpose of calculating diluted earnings per share when the potential ordinary share has a dilutive effect. The dilutive effect of these potential ordinary shares shall also continue to be considered in the calculation of diluted earnings per share before the following year's resolution on the number of employee compensation shares to be distributed.

25. Financial instruments

(1) Fair value information - Financial instruments not measured at fair value

The management of the Company and its subsidiaries consider that the carrying amounts of financial assets and financial liabilities that are not measured at fair value approximate their fair values.

(2) Categories of financial instruments

	March 31, 2025	December 31, 2024	March 31, 2024
Financial assets
Measured by amortized cost (Note 1)	$ 5,915,096	$ 5,918,123	$ 5,945,427
Financial liability
Measured by amortized cost	853,576	1,017,702	620,049

---

(Note 2)

Note 1: The balance includes financial assets measured at amortized cost, such as cash and cash equivalents, notes receivable, accounts receivable, other receivables, other financial assets (current and non-current) and refundable deposits.

Note 2: The balance includes financial liabilities measured at amortized cost, such as short-term loans, notes payable, accounts payable (including related parties), other payables and guarantee deposits.

(3) Financial risk management objectives and strategies

The Company’s and subsidiaries’ major financial instruments include bonds with repurchase rights, equity investments, accounts receivable, accounts payable, loans and lease liabilities. The financial management department of the Company and subsidiaries provides services to each business unit, coordinates the management of the Company’s capital and manages the Company’s foreign exchange and financial risks appropriately. These risks include market risk (including exchange rate risk and interest rate risk), credit risk and liquidity risk.

1. Market Risk

The principal financial risks to which the Company and subsidiaries are exposed as a result of their operating activities are foreign currency exchange rate risk (see (1) below) and interest rate risk (see (2) below).

There has been no change in the Company’s and subsidiaries’ exposure to market risk of financial instruments and the way they manage and measure such risk.

(1) Exchange rate risk

The Company and subsidiaries engage in foreign currency-denominated sales and purchase transactions, which give rise to exposure to exchange rate fluctuations.

The carrying amounts of monetary assets and monetary liabilities denominated in non-functional currencies as of the balance sheet date are shown in Note 29.

Sensitivity analysis

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The Company and subsidiaries are primarily exposed to fluctuations in U.S. dollar currency exchange rates.

The sensitivity ratio used in reporting exchange rate risk to key management is 1%, which also represents management's assessment of the reasonably possible range of changes in foreign currency exchange rates. The sensitivity analysis includes only foreign currency monetary items outstanding at the balance sheet date and adjusts their period-end translation by a 1% change in exchange rates. A positive number in the table below represents the amount by which a 1% weakening of the functional currency against the U.S. dollar would increase pre-tax income; a 1% strengthening of the functional currency against the U.S. dollar would have a negative impact on pre-tax income by the same amount.

Amount of impact
	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Effect of US dollars
Profit or loss	$ 3,452	$ 4,593

(2) Interest rate risk

The carrying amounts of financial assets and financial liabilities exposed to interest rate risk as of the balance sheet date were as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Fair value interest rate risk
Financial assets	$ 1,771,398	$ 2,483,874	$ 3,796,988
Financial liability	27,409	12,084	11,848
Cash flow rate risk
Financial assets	3,081,159	2,339,569	1,262,680
Financial liability	152,314	149,686	52,462

Sensitivity analysis

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The sensitivity analysis below is based on the interest rate risk of the above-mentioned financial instruments at the balance sheet date. The analysis assumes that the amount of assets and liabilities outstanding at the balance sheet date is outstanding at the reporting date. The rate of change used in reporting interest rates to key management is a 1% increase or decrease in interest rates, which also represents management's assessment of the reasonably possible range of interest rate changes.

If interest rates increase or decrease by 1%, while all other variables remain constant, the pre-tax net profit of the Company and its subsidiaries for the periods from January 1 to March 31, 2025 and 2024, would increase or decrease by NT$7,322 thousand and NT$3,026 thousand, respectively.

1. Credit Risk

Credit risk refers to the risk of the Group's financial loss resulting from the default of contractual obligations by the counterparties. As of the balance sheet date, the Company and the subsidiaries' maximum exposure to credit risk due to non-performance of counterparties' obligations is mainly derived from the Carrying amount of financial assets recognized in the Consolidated Balance Sheet.

The Company and the subsidiaries' policy is to deal only with creditworthy counterparties and obtain adequate guarantees, if necessary, to mitigate the risk of financial loss arising from default. The Company and its subsidiaries use other publicly available financial information and transaction records to rate major customers. The Company and its subsidiaries continuously monitor credit risk and the credit ratings of counterparties. 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.

The counterparties and obligors of transactions involving cash and cash equivalents are all financially sound institutions with good credit, thus posing no significant credit risk.

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The credit risk of the Company and its subsidiaries is mainly concentrated on the top five customers. As of March 31, 2025, December 31, 2024 and March 31, 2024, the total accounts receivable from these customers accounted for 37%, 37%, and 48% of total accounts receivable, respectively.

3. Liquidity risk

The Company and its subsidiaries manage and maintain adequate levels of cash and cash equivalents to support group operations and mitigate the impact of cash flow fluctuations.

The maturity analysis of the remaining non-derivative financial liability contracts is based on the undiscounted cash flows of the financial liability based on the earliest possible date the Company and subsidiaries may be required to repay the loan.

	Within 3 months	3 months to 1 year	1~5 years	Subtotal
March 31, 2025
Non-derivative financial liability
No interest-bearing liabilities	$1,083,977	$ -	$ 515	$1,084,492
Lease liabilities	1,497	3,824	4,526	9,847
Interest-bearing liabilities	73,186	98,910	-	172,096
	$1,158,660	$ 102,734	$ 5,041	$1,266,435
December 31, 2024
Non-derivative financial liability
No interest-bearing liabilities	$ 865,452	$ -	$ 515	$ 865,967
Lease liabilities	1,551	4,013	5,181	10,745
Interest-bearing liabilities	49,589	103,715	-	153,304
	$ 916,592	$ 107,728	$ 5,696	$1,030,016
March 31, 2024
Non-derivative financial liability
No interest-bearing liabilities	$ 966,462	$ -	$ 515	$ 966,977
Lease liabilities	1,323	3,709	5,354	10,386
Interest-bearing liabilities	16,118	39,138	-	55,256
	$ 983,903	$ 42,847	$ 5,869	$1,032,619

The amount of floating-rate instruments for the above non-derivative financial liabilities will vary depending on the difference

---

between the floating rate and the interest rate estimated at the balance sheet date.

26. Related-party transactions

(1) Name of Related Party and Its Relationship

Name of Related Party	Relationship with the Company and Subsidiaries
Yodogawa Steel Works Ltd.	The Company’s parent Company
Toyota Tsusho Corporation	Corporate Director of the Company (discharged in March 2025)
Yung Chi Paint & Varnish Mfg. Co., Ltd. (Yung Chi)	Corporate Director of the Company
Fujiden International Corporation (Fujiden)	Corporate Director of the Company
Yodogawa Shengyu (Hefei) High Tech Steel Co., Ltd. (Yodogawa Shengyu (Hefei))	Affiliates

(2) Business transactions

Item	Type of related party	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Sales of goods	Affiliates	$ 1,784	$ 793
Item	Type of related party	From January 1 to March 31, 2025	From January 1 to March 31, 2024
---	---	---	---
Purchase	Parent company	$ 823	$ 560
	Corporate director	131,030	213,444
	Affiliates	1,751	20,558
		$133,604	$234,562

The purchase and sale prices between the Company and the above related parties are based on normal trading terms, except for the purchase from Yung Chi, a corporate director, for which there are no comparable transactions with non-related parties. The terms of collection and payment from related parties are similar to those from non-related parties, ranging from 10 days to 3 months.

The balances of accounts receivable - related parties as of the balance sheet date were as follows:

Type of related party/Name	March 31, 2025	December 31, 2024	March 31, 2024

---

Corporate director - Yung Chi
Paint & Varnish Mfg. Co., Ltd.
$137,164
$122,707
$122,030

The outstanding accounts payable to related parties are unsecured and will be settled in cash.

(3) Other related party transactions

The Company has a technical support contract with its parent company, under which the Company is required to calculate and pay technical service fees to the parent company on a semi-annual basis. Yodoko International Ltd. has also entered into a technical service contract with the parent company, under which Yodoko International Ltd. is required to calculate and pay technical fees to the parent company on a semi-annual basis based on a fixed rate of operating revenues.

The above related expenses are as follows:

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Included in manufacturing costs	$ 1,283	$ 1,211
Included in operating expenses	$ 1,530	$ 594

(4) Compensation to key management

	From January 1 to March 31, 2025	From January 1 to March 31, 2024
Short-term employee benefits	$ 3,157	$ 2,502
Post-employment benefits	28	30
	$ 3,185	$ 2,532

1. Pledged assets

The Company and its subsidiaries provide demand deposits and certificates of deposit as collateral for the purchase of industrial natural gas, bank financing facilities, and construction warranty. The amounts are as follows:

	March 31, 2025	December 31, 2024	March 31, 2024
Other financial assets - current	$45,841	$42,610	$20,020
Other financial assets - non-current	$18,000	$18,000	$18,000

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1. Significant contingent liabilities and unrecognized contractual commitments

The Company and its subsidiaries had the following material commitments and contingencies as of March 31, 2025:

(1) The Company and its subsidiaries had outstanding unused letters of credit for the purchase of raw materials amounting to approximately NT$381,300 thousand.

(2) The outstanding contract amount under construction agreements signed by the Company and its subsidiaries but not yet fulfilled was approximately NT$203,651 thousand.

1. Information of foreign currency assets and liabilities with significant affects

The following information is presented in the aggregate in foreign currencies other than the functional currencies of each of the Company and its subsidiaries, and the exchange rates disclosed represent the rates at which such foreign currencies were translated into the functional currencies. Information on assets and liabilities denominated in foreign currencies with significant effect is as follows:

Unit: Thousands of each foreign currency / NTD for exchange rate

	Foreign currency	Exchange rate		Carrying amount
March 31, 2025
Foreign currency assets
Monetary items
USD	$ 12,697	33.155	(USD:NTD)	$ 420,956
	Foreign currency	Exchange rate		Carrying amount
Non-monetary items
Affiliates
under
equity
method
RMB	$ 57,878	4.548	(RMB:NTD)	$ 263,227
RMB	15,968	0.137174	(RMB:USD)	72,623
USD	2,145	33.155	(USD:NTD)	71,127
Foreign liabilities
Monetary items
USD	2,214	33.155	(USD:NTD)	73,406
USD	71	7.1782	(USD:RMB)	2,367
December 31, 2024
Foreign currency assets
Monetary items

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The net foreign exchange gains of the Company and its subsidiaries for the periods from January 1 to March 31, 2025 and 2024 were NT$11,637 thousand and NT$25,155 thousand, respectively. Due to the wide variety of functional currencies involved in foreign currency transactions, it is not feasible to disclose the exchange gains and losses by each significantly affected currency.

30. Disclosures

(1) Information on material transactions:

1. Lending to others: Schedule 1.
2. Endorsement and guarantee for others: None.
3. Major securities held at the end of the period (excluding investments in subsidiaries and associates): None.

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1. The amount of purchase or sale of goods with related parties reaches NT$100 million or 20% of the paid-in capital: Schedule 2.

2. Related party receivables amounting to at least NT$100 million or 20% of the paid-in capital: None.

3. Other: Inter-parent-subsidiary and inter-subsidiary business relationships and important Conditions of Transactions and Amounts: Schedule 5.

(2) Information on investees: Schedule 3.

(3) Information on investments in Mainland China

1. Name of the Investee Company, Main businesses, paid-in capital, investment method, capital remittance, shareholding ratio, investment gain or loss, ending investment Carrying amount, remitted investment gain or loss, and investment limit in Mainland China: Schedule 4.

2. Significant direct or indirect transactions with the investee company in Mainland China through third parties, and their prices, payment terms, and unrealized gains or losses:

(1) The amount and percentage of incoming amounts and the related ending balance and percentage of payables: None.

(2) The amount and percentage of sales and the related receivables of the ending balance and percentage: Not material.

(3) The amount of property transactions and the resulting gain or loss: None.

(4) Ending balance of a note endorsement guarantee or provision of collateral and its purpose: None.

(5) The maximum balance, ending balance, interest rate range and total current interest amount of the financial instrument: None.

(6) Other transactions that have a significant effect on the profit or loss or financial position of the Company, such as the provision or receipt of labor services: None.

1. Operating department information

The information provided to the chief operating decision maker of the Company and its subsidiaries for the purpose of allocating resources and evaluating departmental performance. The reportable operating departments of the Company and its subsidiaries are as follows:

. Sheng Yu Steel Co., Ltd. (Sheng Yu) - Manufacturing and sales of cold-rolled,

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galvanized, galvalume and painted steel coils.

• Others - Subsidiaries referred to in Note 10 which do not reach the quantitative threshold are considered as operating segments.

The financial information on department revenues and operating results of the reportable departments of the Company and its subsidiaries are disclosed as follows:

	Sheng Yu	Others	Consolidated
From January 1 to March 31, 2025
Income from external customers	$ 3,567,519	$ 230,784	$ 3,798,303
Interdepartmental income	13,938	13,519	27,457
Departmental income	$ 3,581,457	$ 244,303	3,825,760
Internal write-offs			( 27,457)
Operating income			$ 3,798,303
Departmental interest	$ 181,992	$ 11,890	$ 193,882
Interest income			17,649
Interest expense			( 1,395)
Shares of the profit and loss of the affiliates and joint ventures recognized using the equity method			( 2,171)
Other non-operating income and expenses			14,255
Net profit before tax			$ 222,220
From January 1 to March 31, 2024
Income from external customers	$ 3,180,208	$ 122,534	$ 3,302,742
Interdepartmental income	16,004	13,695	29,699
Departmental income	$ 3,196,212	$ 136,229	3,332,441
Internal write-offs			( 29,699)
Operating income			$ 3,302,742

(Continued from the previous page)

	Sheng Yu	Others	Consolidated
Departmental interest	$ 161,206	$ 2,108	$ 163,314
Interest income			19,144
Interest expense			( 478)
Shares of the profit and loss of the affiliates and joint ventures recognized using the equity method			( 8,160)
Other non-operating income and expenses			24,732
Net profit before tax			$ 198,552

Departmental profit is defined as the profit earned by each department, excluding share of head office management costs and directors' compensation, share of profit or

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loss of affiliates under the equity method, interest income, gain or loss on disposal of property, plant and equipment, foreign currency exchange gain or loss, interest expense and income tax expense. This measure is provided to the chief operating decision maker for the purpose of allocating resources to the department and evaluating its performance.

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries

Lending of Funds to Others

From January 1 to March 31, 2025

Unit: NT$ thousands

(Unless otherwise specified)

No.	Loan Funded Companies	Lenders	Past Projects	Are they Related parties	Maximum balance for the period (Note 1)	Ending balance (Note 1)	Actual spending Amount (Note5)	Interest Rate Range (%)	Funding and nature of loans (Note 2)	Business transactions Amount	There are reasons why short-term financing funds are necessary	Allowance for losses	Collateral		The limit for individual target funds lending (Note 3)	Funding Total Limit (Note 4)	Note
													Name	Value
0	The Company	Yodoko International Ltd.	Other receivables	Y	$ 120,000	$ 120,000	$ 25,000	1.7~1.746	2	$ -	Business turnover	$ -	Promissory note	$ 120,000	$ 999,208	$ 1,998,415
0	The Company	Sheng-Shing Worldwide Corp.	Other receivables	Y	116,043	116,043	53,048	4.59~4.775	2	-	Business turnover	-	Promissory note	116,043	999,208	1,998,415

Note 1: The maximum balance, ending balance, and the value of collateral for Sheng-Shing Worldwide Corp. during the period were all US$3,500 thousand. The actual drawdown amount was US$1,600 thousand. These U.S. dollar amounts were translated into New Taiwan Dollars at the exchange rate of 33.155 as of the end of March 2025.
Note 2: For business transactions, enter 1; for short-term financing, enter 2.
Note 3: 10% of the Company's net worth.
Note 4: 20% of the Company's net worth.
Note 5: The amount has been written off in the preparation of the consolidated financial statements.

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries

Purchase or Sale of Goods with Related Parties Amounting to at Least NT$100 Million or 20% of The Paid-In Capital

From January 1 to March 31, 2025

Schedule 2

Unit: NT$ thousands

(Unless otherwise specified)

Purchasing (selling) company	Transaction counterparty	Relationship	Transaction status				The circumstances and reasons why the transaction conditions are different from those of ordinary transactions	Accounts and notes receivable (payable)
			Purchase (Sales)	Amount	Percentage of total purchase (sales) (%)	Credit period			Balance	Percentage of total accounts and notes receivable (payable) (%)	Note
							Unit price	Credit period
The Company	Yung Chi Paint & Varnish Mfg. Co., Ltd.	Corporate Director of the Company	Purchase	$130,869	4	3 months	See Note 26	-	($137,164)	(40)

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries
Investee Company Information
From January 1 to March 31, 2025

Schedule 3

Unit: NT$ thousands

(Unless otherwise specified)

Name of Subsidiary	Name of investee company	Location	Main business items	Original investment amount		Shares held at the end of the period			Profit or loss of the investee company for the period	Share of profit or loss of subsidiaries recognized during the period	Note
				End of current period	End of last year	Number of shares	Ratio (%)	Carrying amount
The Company	Yodoko International Ltd.	Taiwan	Steel processing and contracting	$ 25,456	$ 19,607	2,045,750	82	$ 126,323	$ 3,771	$ 2,985
The Company	Sheng-Shing Worldwide Corp.	Republic of Seychelles	Galvanized steel coil cutting and processing	81,549	81,549	2,705,000	54	48,818	5,216	2,822
Yodoko International Ltd.	Yodoko International (HK) Ltd.	Hong Kong	General investment business	9,702	9,702	2,200,000	100	22,309	-	-

Note: The amount has been written off in the preparation of the consolidated financial statements.

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries

Information of Investments in Mainland China

From January 1 to March 31, 2025

Unit: NT$ thousands

(Unless otherwise specified)

Schedule 4

Mainland China Investee Company Name	Main business items	Paid-in capital	Investment Method	The beginning of the current period is from Accumulated remittances from Taiwan Investment Amount	Remittance or Investment recoveries Amount		The cumulative investment from Cumulative investment remitted from Taiwan Amounts	Profit or loss of the investee company for the period	Shareholding percentage of the Company's direct or indirect investments%	Share of profit or loss of subsidiaries and affiliates recognized in the current period	Investments at end of period Carrying Value	As of the end of this period Repatriated to Taiwan Investment income	Note
					Export	Take back
Yodoko Building Material (Hangzhou) Co., Ltd.	Manufacture and sale of metal building material products	$ 41,998	Reinvestment in Mainland China through a third area investment company (Yodoko International (HK) Ltd.)	$ 9,514	$	$	$ 9,514	$ -	-	$ -	$ -	$ -
Dongguan Shengxin Hardware Products Co., Ltd.	Galvanized steel coil cutting and processing	98,658	Reinvestment in Mainland China through a third area investment company (Sheng-Shing Worldwide Corp.)	50,752			50,752	-	-	-	-	-
Dongguan Shengyu Trading Co., Ltd.	Wholesale, import and export of hardware and steel products	99,465	Reinvestment in Mainland China through a third area investment company (Sheng-Shing Worldwide Corp.)	46,611 (Note 2)			46,611 (Note 2)	5,876	54	3,179	72,623	-	Note 3
Yodogawa Shengyu (Hefei) High Tech Steel Co., Ltd.	Manufacture and sale of galvanized and lacquered steel coils	6,413,385	Direct investment in Mainland China by the Company	1,388,640			1,388,640	( 10,382 )	21	( 2,171 )	263,227	-	Note 1
Name of Subsidiary	Cumulative amount of investment from Taiwan to China at the end of the period	Amount of investment approved by the Investment Commission, Ministry of Economic Affairs	The Company’s investment limit in Mainland China (Note 4)
---	---	---	---
The Company	$ 1,495,517	$ 1,527,339	$ 5,995,246

Note 1: The investment income or loss recognized by Yodogawa Shengyu (Hefei) High Tech Steel Co., Ltd. for the period was based on the unreviewed financial statements for the same period.
Note 2: The cumulative amount of investment remitted from Taiwan to Dongguan Shengyu Trading Co., Ltd. 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 Dongguan Shengyu Trading Co., Ltd.
Note 3: The amount has been written off in the preparation of the consolidated financial statements.
Note 4: In accordance with the “REGULATIONS GOVERNING THE APPROVAL OF INVESTMENT OR TECHNICAL COOPERATION IN MAINLAND CHINA” issued by the Investment Commission on August 29, 2008, the Company’s limit is 60% of its net worth.

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Sheng Yu Steel Co., Ltd. and Its Subsidiaries
Business Relationships and Significant Transactions between Parent Company and Subsidiary
From January 1 to March 31, 2025
Schedule 5
Unit: NT$ thousands
(Unless otherwise specified)

No.	Name of the Trader	Name of the transaction counterparty	Relationship with the Trader	Conditions of Transactions
				Subject	Amount	Terms of Transaction	As a percentage of consolidated total revenue or Total Assets (%)
0	Sheng Yu Steel Co., Ltd.	Yodoko International Ltd.	Parent company to subsidiary	Other receivables	$ 25,106	According to the contract	-
0	Sheng Yu Steel Co., Ltd.	Yodoko International Ltd.	Parent company to subsidiary	Sales income	10,167	According to the contract	-
0	Sheng Yu Steel Co., Ltd.	Sheng-Shing Worldwide Corp.	Parent company to subsidiary	Other receivables	53,258	According to the contract	-

Note: Enter 0 for the parent company.