AI assistant
TongHwa AGM Information 2026
51793_rns_2026-05-18_bd09214a-3a08-4751-9e14-cb3d3b5495c8.pdf
AGM Information
Open in viewerOpens in your device viewer
Stock Code: 1418
TongHwa Corporation
(formerly known as
Tong-Hwa Synthetic Fiber Co., Ltd.)
2026 Annual Shareholders' Meeting
Handbook
08 June 2026
2
Contents
I. Meeting Procedure ... 3
II. Meeting Agenda ... 4
1. Report Items ... 5
2. Matters for Ratification ... 9
3. Extemporary Motions ... 36
4. Adjournment ... 36
III. Appendices
1. Procedures for the Acquisition or Disposal of Assets by Subsidiaries
(Comparison Table of Amended Provisions) ... 37
2. Articles of Incorporation ... 38
3. Shareholder Meeting Conference Rules ... 45
IV. Directors' Shareholding ... 49
TongHwa Corporation 2026Annual Shareholders' Meeting Procedure
I. Commencement of Meeting
II. Chairperson's Speech
III. Meeting Agenda
3
TongHwa Corporation 2026 Annual Shareholders' Meeting Agenda
Date (Time): 08 June 2026 at 9:00 AM
Place: 3 F., No. 1, Sec. 3, Zhongxiao E. Rd., Da'an Dist., Taipei City
(GIS TAIPEI TECH CONVENTION CENTER)
Convening Method: Physical Shareholders' Meeting
I. Report Items:
1. 2025 Business Report
2. Audit Committee’s Review Opinions on the 2025 Annual Final Accounting Books and Statements
3. Report for Loss Aggregates to One Half of the Paid-in Capital
4. Proposal for the amendment of the Procedures for the Acquisition or Disposal of Assets by the subsidiary, TW Sports Company
II. Matters for Ratification:
1. 2025 Business Report and Financial Statements
2. 2025 Loss Off-setting Proposal
III. Extemporary Motions
IV. Adjournment
I. Report Items:
Report Matters
(I) 2025 Business Report
-
The acrylic cotton market in mainland China has stable supply and demand for the year 2025, with an annual demand of approximately 600,000 tons, remaining unchanged compared to last year; there is no new production capacity. Jilin Chemical Fiber and Shanghai Petrochemical are continuously expanding their carbon fiber production. The proportion of acrylonitrile used in acrylic fiber has decreased to approximately 20%.
-
The average price of acrylic fiber in 2025 decreased by approximately NTD 4/kg compared to 2024, a decline of approximately 6%, with market conditions being flat and slightly difficult.
The report on the production, sales, and operational status for the year 2025 is hereby presented as follows for your review and approval.
Production volume 0 metric tons
Sales volume 76 metric tons
- In order to ensure the company's sustainable operation, our company intends to diversify its operations and develop multiple business entities, and has begun implementing an asset revitalization transformation plan.
Please check and verify.
Chairman: Lin Chuang-Ju Manager: Lin Chuang-Yeh Account Officer: Yeh Yen-ling
5
Report Matters
(II) · Audit Committee’s Review Opinions on the 2025 Annual Final Accounting Books and Statements
The Audit Committee’s Review Report
The Board of Directors has submitted the Company's 2025 Annual Business Report, Financial Statements, and Profit and Loss Appropriation Proposal, among others. The Financial Statements (including the Consolidated Financial Statements) have been audited by the accounting firm of Zhengfeng, with auditors Peng Lizhen and Wu Xinliang completing the audit and issuing the audit report. The aforementioned business report, financial statements, and profit and loss allocation proposal have been reviewed by the Audit Committee and are deemed to be in compliance. In accordance with the provisions of Article 14-4 of the Securities and Exchange Act and Article 219 of the Companies Ordinance, the report is submitted as above for your review.
To
2026 Annual Shareholders’ Meeting.
TongHwa Corporation
The Convenor of the Audit Committee Lee Tsung-Ju
March 5, 2026
6
7
Report Matters
(III) Accumulated losses reach half of the paid-in capital report
- Report in accordance with Section 211 of the Companies Ordinance.
- As of 31 December 2025, the accumulated losses of the Company amounted to NTD 816,405,221, which has reached half of the Company's paid-in capital (NTD 568,343,090).
8
Report Matters
(IV) Proposal for the amendment of the Procedures for the Acquisition or Disposal of Assets by the subsidiary, TW Sports Company
- To meet the requirements of the company's business, Article 4-4 of the subsidiary's "Procedures for Acquisition or Disposal of Assets" is amended.
- Please refer to Appendix 1 for the subsidiary's amended "Procedures for the Acquisition or Disposal of Assets".
9
II. Matters for Ratification:
Matters for Ratification
Case 1: (Proposed by the Board of Directors)
Ratification Proposal for 2025 Business Report and Financial Statements
Explanation:
- Business Report (Please refer to Page 5 of this Book)
- Auditor’s Report (Please refer to Page 10~14, 21~25 of this Book)
- Consolidated Balance Sheets (Please refer to Page 15~16 of this Book)
- Consolidated Statements of Comprehensive Income (Please refer to Page 17 of this Book)
- Consolidated Statements of Changes in Equity (Please refer to Page 18 of this Book)
- Consolidated Statements of Cash Flows (Please refer to Page 19~20 of this Book)
- Stand-alone Balance Sheets (Please refer to Page 26~27 of this Book)
- Stand-alone Statements of Comprehensive Income (Please refer to Page 28~29 of this Book)
- Stand-alone Statements of Changes in Equity (Please refer to Page 30~31 of this Book)
- Stand-alone Statements of Cash Flows (Please refer to Page 32~34 of this Book)
Resolution:
Independent Auditor's Report
To: Shareholders of TongHwa Corporation:
(formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Opinion
We have audited the accompanying consolidated balance sheets of Tung Hua Lung Co., Ltd. and its subsidiaries as of December 31, 2025 and 2024, the related consolidated statements of comprehensive income, changes in equity and cash flows for the years from January 1 to December 31, 2025 and 2024, and the notes to the consolidated financial statements (including a summary of significant accounting policies).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Tung Hua Lung Co., Ltd. and its subsidiaries as of December 31, 2025 and 2024, and their consolidated financial performance and consolidated cash flows for the years from January 1 to December 31, 2025 and 2024, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in 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 Tung Hua Lung Co., Ltd. and its subsidiaries in accordance with the Code of Professional Ethics for Certified Public Accountants, and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
10
significance in our audit of the consolidated financial statements of Tung Hua Lung Co., Ltd. and its subsidiaries for the year ended December 31, 2025. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
The key audit matters for the audit of the consolidated financial statements of Tung Hua Lung Co., Ltd. and its subsidiaries for the year ended December 31, 2025 are as follows:
Fair Value Assessment of Investment Property
For the accounting policies for investment property, please refer to Note 4(9) to the consolidated financial statements; for the uncertainty of accounting estimates and assumptions for investment property, please refer to Note 5 to the consolidated financial statements; for the description of the investment property line item, please refer to Note 6(12) to the consolidated financial statements.
The investment properties of Tung Hua Lung Co., Ltd. and its subsidiaries are measured at fair value. To support management in making reasonable estimates, the Company uses valuation reports from independent appraisal firms. As the valuation methods and parameters selected for the valuation involve numerous significant judgments and estimates, this matter has been identified as a key audit matter.
We performed the following main audit procedures:
- Evaluate the professional competence, capabilities, and objectivity of the real estate appraisers appointed by management to be responsible for fair value measurements.
- Reviewed the fair value appraisal reports to understand whether the appraisal methods and assumptions comply with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the Rules on Real Estate Appraisal, and evaluated the relevance and reliability of the data sources and significant parameters used in the appraisal reports, as well as the reasonableness of the appraisal results.
Emphasis of Matter – Long-term Borrowings
As described in Note 6(15) to the consolidated financial statements, the amount of long-term borrowings of Tung Hua Lung Co., Ltd. due within one year as of December 31, 2025 was NTD 3,460,402 thousand. Our opinion is not modified in respect of this matter.
Other Matters
Tung Hua Lung Co., Ltd. has prepared its separate financial statements for the years ended December 31, 2025 and 2024, on which we have issued an unmodified audit report, available for reference.
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
11
Reports by Securities Issuers and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations endorsed and issued into effect by the Financial Supervisory Commission, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the ability of Tung Hua Lung Co., Ltd. and its subsidiaries 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 Tung Hua Lung Co., Ltd. and its subsidiaries or to cease operations, or has no realistic alternative but to do so.
Those charged with governance (including the audit committee) of Tung Hua Lung Co., Ltd. and its subsidiaries are responsible for overseeing the 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 generally accepted auditing standards in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. Misstatements 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 generally accepted auditing standards in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also perform the following procedures:
-
Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error; design and perform audit procedures responsive to those risks; and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
-
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Tung Hua Lung Co., Ltd. and its
12
subsidiaries.
-
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
-
Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Tung Hua Lung Co., Ltd. and its subsidiaries to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's 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 Tung Hua Lung Co., Ltd. and its subsidiaries to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the consolidated financial statements, including the 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 the entities 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 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 of Tung Hua Lung Co., Ltd. and its subsidiaries 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
13
the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Baker Lais Clock & CO
Approval Number:
Financial Supervisory Commission Securities and
Futures Bureau Audit Approval No. 09600000880
Financial Supervisory Commission Securities and
Futures Bureau Review No. 1050043092
March 5, 2026
TongHwa Corporation. (formerly known as Tong-Hwa Synthetic Fiber Co., Ltd.) and Subsidiaries Consolidated Balance Sheet
Consolidated Balance Sheet
December 31, 2025 and 2024
Unit: NT$ Thousands
| Assets | Notes | 31 December 2025 | 31 December 2024 | |||
|---|---|---|---|---|---|---|
| Code | Account | Amount | % | Amount | % | |
| Current assets | ||||||
| 1100 | Cash and cash equivalents | 6(1) | $ 732,238 | 13 | $ 967,572 | 18 |
| 1110 | Financial assets at fair value through profit or loss – current | 6(2) | 55,035 | 1 | 87,889 | 2 |
| 1170 | Accounts receivable | 6(4) | - | - | 668 | - |
| 1200 | Other receivables | 6(5) | 4,835 | - | 1,957 | - |
| 1220 | Current income tax assets | 6(26) | 1,443 | - | 1,103 | - |
| 130x | Inventories | 6(6), 8 | 840,357 | 15 | 392,650 | 8 |
| 1410 | Prepayments | 6(7) | 7,613 | - | 6,714 | - |
| 1470 | Other current assets | 119 | - | 136 | - | |
| 11xx | Total current assets | 1,641,640 | 29 | 1,458,689 | 28 | |
| Non-current assets | ||||||
| 1510 | Financial assets at fair value through profit or loss – non-current | 6(2) | 105,946 | 2 | 104,173 | 2 |
| 1517 | Financial assets at fair value through other comprehensive income - non-current | 6(3) | 4,261 | - | 5,550 | - |
| 1550 | Investments accounted for using equity method | 6(8) | 12,288 | - | 11,246 | - |
| 1600 | Property, plant and equipment | 6(9), 8 | 703,683 | 13 | 688,505 | 13 |
| 1755 | Right-of-use assets | 6(10) | 11,569 | - | 11,035 | - |
| 1760 | Investment property | 6(12), 8 | 3,085,012 | 55 | 2,955,472 | 57 |
| 1975 | Net defined benefit asset - non-current | 6(17) | 25,750 | 1 | 22,848 | - |
| 1990 | Refundable deposits | 5,638 | - | 7,338 | - | |
| 15xx | Total non-current assets | 3,954,147 | 71 | 3,806,167 | 72 | |
| 1xxx | Total assets | $ 5,595,787 | 100 | $ 5,264,856 | 100 |
(Continued on next page)
TongHwa Corporation. (formerly known as Tong-Hwa Synthetic Fiber Co., Ltd.) and Subsidiaries
Consolidated Balance Sheet (Continued)
December 31, 2025 and 2024
Unit: NT$ Thousands
| Liabilities and Equity | Notes | 31 December 2025 | 31 December 2024 | |||
|---|---|---|---|---|---|---|
| Code | Account | Amount | % | Amount | % | |
| Current liabilities | ||||||
| 2100 | Short-term borrowings | 6(13) | $ 200,000 | 4 | $ - | - |
| 2150 | Notes payable | 7 | 8 | - | 31 | - |
| 2200 | Other payables | 6(14) | 18,796 | - | 23,889 | 1 |
| 2280 | Lease liabilities - current | 6(10) | 3,039 | - | 1,916 | - |
| 2320 | Long-term borrowings due within one year | 6(15) | 3,460,402 | 62 | - | - |
| 2300 | Other current liabilities | 6(16) | 1,831 | - | 1,827 | - |
| 21xx | Total current liabilities | 3,684,076 | 66 | 27,663 | 1 | |
| Non-current liabilities | ||||||
| 2540 | Long-term borrowings | 6(15) | 126,500 | 2 | 3,432,600 | 65 |
| 2570 | Deferred tax liabilities | 6(26) | 543,998 | 10 | 493,682 | 9 |
| 2580 | Lease liabilities - non-current | 6(10) | 8,818 | - | 9,428 | - |
| 2670 | Other non-current liabilities | 6(16) | 767 | - | 518 | - |
| 25xx | Total non-current liabilities | 680,083 | 12 | 3,936,228 | 74 | |
| 2xxx | Total liabilities | 4,364,159 | 78 | 3,963,891 | 75 | |
| Equity | 6(18) | |||||
| 3100 | Share capital | 568,343 | 10 | 568,343 | 11 | |
| 3200 | Capital surplus | 8,008 | - | 8,008 | - | |
| Retained earnings | ||||||
| 3320 | Special reserve | 1,560 | - | 1,560 | - | |
| 3350 | Accumulated deficit | (816,405) | (15) | (748,361) | (14) | |
| 3400 | Other equity | 1,550,457 | 28 | 1,551,746 | 30 | |
| 3500 | Treasury stock | (80,333) | (1) | (80,333) | (2) | |
| 31xx | Total equity attributable to owners of the parent | 1,231,630 | 22 | 1,300,963 | 25 | |
| 36xx | Non-controlling interests | (2) | - | 2 | - | |
| 3xxx | Total equity | 1,231,628 | 22 | 1,300,965 | 25 | |
| Total liabilities and equity | $ 5,595,787 | 100 | $ 5,264,856 | 100 |
(Please refer to the attached notes to the consolidated financial statements.)
Chairman: Lin Chuang-Ju
Manager: Lin Chuang-Yeh
Account Officer: Yeh Yan-Ling
16
TongHwa Corporation. (formerly known as Tong-Hwa Synthetic Fiber Co., Ltd.)
and Subsidiaries
Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2025 and 2024 Unit: NT$ Thousands
| Code | Item | Notes | For the year ended December 31, 2025 | For the year ended December 31, 2024 | ||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | |||
| 4000 | Operating revenue | 6(19) | $ 5,329 | 100 | $ 10,248 | 100 |
| 5000 | Operating costs | 6(6, 25), 7 | (1,226) | (23) | (16,652) | (162) |
| 5900 | Gross profit (loss) from operations | 4,103 | 77 | (6,404) | (62) | |
| 6000 | Operating expenses | 6(25), 7 | ||||
| 6100 | Selling expenses | (17,721) | (333) | (19,342) | (189) | |
| 6200 | General and administrative expenses | (61,077) | (1,146) | (56,632) | (553) | |
| Total operating expenses | (78,798) | (1,479) | (75,974) | (742) | ||
| 6500 | Net other income and expenses | 6(20) | (117) | (2) | 30,786 | 300 |
| 6900 | Loss from operations | (74,812) | (1,404) | (51,592) | (504) | |
| 7000 | Non-operating income and expenses | |||||
| 7100 | Interest income | 6(21) | 5,629 | 106 | 11,670 | 114 |
| 7010 | Other income | 6(22) | 15,549 | 292 | 6,318 | 62 |
| 7020 | Other gains and losses | 6(23) | 128,751 | 2,416 | 162,903 | 1,590 |
| 7050 | Finance costs | 6(24) | (96,257) | (1,806) | (87,177) | (851) |
| 7060 | Share of profit or loss of associates accounted for using the equity method | 6(8) | 1,042 | 19 | 1,660 | 16 |
| Total non-operating income and expenses | 54,714 | 1,027 | 95,374 | 931 | ||
| 7900 | Net profit (loss) before income tax | (20,098) | (377) | 43,782 | 427 | |
| 7950 | Income tax expense (benefit) | 6(26) | (49,843) | (935) | (18,005) | (175) |
| 8200 | Net profit (loss) for the year | (69,941) | (1,312) | 25,777 | 252 | |
| 8300 | Other comprehensive income | |||||
| 8310 | Items that will not be reclassified to profit or loss: | |||||
| 8311 | Remeasurement of defined benefit plans | 6(17) | 2,366 | 44 | 4,085 | 39 |
| 8316 | Unrealized gains (losses) on investments in equity instruments at fair value through other comprehensive income | 6(18) | (1,289) | (24) | 369 | 4 |
| 8349 | Income tax related to items that will not be reclassified | 6(26) | (473) | (9) | (817) | (8) |
| Other comprehensive income for the year, net of tax | 604 | 11 | 3,637 | 35 | ||
| 8500 | Total comprehensive income for the year | $ (69,337) | (1,301) | $ 29,414 | 287 | |
| 8600 | Net profit (loss) attributable to: | |||||
| 8610 | Owners of the parent company | $ (69,937) | (1,312) | $ 25,785 | 252 | |
| 8620 | Non-controlling interests | $ (4) | - | $ (8) | - | |
| 8700 | Total comprehensive income attributable to: | |||||
| 8710 | Owners of the parent company | $ (69,333) | (1,301) | $ 29,422 | 287 | |
| 8720 | Non-controlling interests | $ (4) | - | $ (8) | - | |
| Earnings (loss) per share (in NT dollars) | 6(27) | |||||
| 9750 | Basic earnings (loss) per share | $ (1.29) | $ 0.47 |
(Please refer to the attached notes of the consolidated financial statements.)
Chairman: Lin Chuang-Ju Manager: Lin Chuang-Yeh Account Officer: Yeh Yan-Ling
17
18
19
TongHwa Corporation. (formerly known as Tong-Hwa Synthetic Fiber Co., Ltd.) and Subsidiaries
Consolidated Statement of Changes in Equity
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| Item | Equity Attributable to Owners of the Parent Company | Non-controlling interests | Total equity | |||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Share capital | Capital surplus | Retained earnings | Other Equity Items | Treasury stock | Total | |||||
| Special reserve | Accumulated deficit | Unrealized gains or losses on financial assets at fair value through other comprehensive income | Revaluation increment on property | |||||||
| Balance, January 1, 2024 | $ 568,343 | $ 8,008 | $ 1,560 | $ (777,414) | $ (230,614) | $ 1,781,991 | $ (80,333) | $ 1,271,541 | $ 10 | $ 1,271,551 |
| Net profit for the year | - | - | - | 25,785 | - | - | - | 25,785 | (8) | 25,777 |
| Other comprehensive income for the year, net of tax | - | - | - | 3,268 | 369 | - | - | 3,637 | - | 3,637 |
| Total comprehensive income for the year | - | - | - | 29,053 | 369 | - | - | 29,422 | (8) | 29,414 |
| Balance, December 31, 2024 | $ 568,343 | $ 8,008 | $ 1,560 | $ (748,361) | $ (230,245) | $ 1,781,991 | $ (80,333) | $ 1,300,963 | $ 2 | $ 1,300,965 |
| Balance, January 1, 2025 | $ 568,343 | $ 8,008 | $ 1,560 | $ (748,361) | $ (230,245) | $ 1,781,991 | $ (80,333) | $ 1,300,963 | $ 2 | $ 1,300,965 |
| Net loss for the year | - | - | - | (69,937) | - | - | - | (69,937) | (4) | (69,941) |
| Other comprehensive income for the year, net of tax | - | - | - | 1,893 | (1,289) | - | - | 604 | - | 604 |
| Total comprehensive income for the year | - | - | - | (68,044) | (1,289) | - | - | (69,333) | (4) | (69,337) |
| Balance, December 31, 2025 | $ 568,343 | $ 8,008 | $ 1,560 | $ (816,405) | $ (231,534) | $ 1,781,991 | $ (80,333) | $ 1,231,630 | $ (2) | $ 1,231,628 |
(Please refer to the attached notes of the consolidated financial statements.)
Chairman: Lin Chuang-Ju
Manager: Lin Chuang-Yeh
Account Officer: Yeh Yan-Ling
图
国
TongHwa Corporation (formerly known as Tong-Hwa Synthetic Fiber Co., Ltd.) and
Subsidiaries
Consolidated Statement of Cash Flows
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| Item | For the year ended December 31, 2025 | For the year ended December 31, 2024 |
|---|---|---|
| Cash flows from operating activities: | ||
| Net profit (loss) before tax for the year | $ (20,098) | $ 43,782 |
| Adjustments: | ||
| Income and expense items | ||
| Depreciation expense | 6,744 | 4,284 |
| Loss (gain) on financial assets at fair value through profit or loss | 3,636 | (3,975) |
| Interest expense | 96,257 | 87,177 |
| Interest income | (5,629) | (11,670) |
| Dividend income | (5,924) | (6,097) |
| Share of profit of associates accounted for using the equity method | (1,042) | (1,660) |
| Loss (gain) on disposal of property, plant and equipment | 117 | (30,786) |
| Unrealized foreign exchange loss (gain) | 1,797 | (1,777) |
| Gain on fair value adjustment of investment property | (129,540) | (158,487) |
| Net changes in operating assets and liabilities | ||
| Accounts receivable | 668 | (668) |
| Other receivables | 9 | (1,708) |
| Inventories | (442,386) | (389,191) |
| Prepayments | (854) | (1,405) |
| Other current assets | 17 | (47) |
| Net defined benefit asset | (536) | (606) |
| Notes payable | (23) | (30) |
| Other payables | (7,908) | 8,716 |
| Other current liabilities | 4 | 64 |
| Other non-current liabilities | 249 | 89 |
(Continued on next page)
TongHwa Corporation (formerly known as Tong-Hwa Synthetic Fiber Co., Ltd.) and
Subsidiaries
Consolidated Statement of Cash Flows (Continued)
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| Item | For the year ended | For the year ended |
|---|---|---|
| Cash outflow generated from operations | (504,442) | (463,995) |
| Interest received | 5,629 | 11,670 |
| Interest paid | (101,095) | (85,963) |
| Income taxes paid | (340) | (1,134) |
| Net cash outflow from operating activities | (600,248) | (539,422) |
| Cash flows from investing activities | ||
| Acquisition of financial assets at fair value | (254,945) | (368,340) |
| Disposal of financial assets at fair value | 281,377 | 285,224 |
| Acquisition of property, plant and equipment | (20,302) | (5,385) |
| Disposal of property, plant and equipment | 1,295 | 31,414 |
| Dividends received | 6,030 | 5,942 |
| Increase in refundable deposits | (220) | - |
| Decrease in refundable deposits | 1,920 | - |
| Net cash inflow (outflow) from investing | 15,155 | (51,145) |
| Cash flows from financing activities | ||
| Increase (decrease) in short-term borrowings | 200,000 | (100,000) |
| Incurrence of long-term borrowings | 154,302 | 3,432,600 |
| Repayment of long-term borrowings | - | (2,602,000) |
| Repayment of lease principal | (2,746) | (1,873) |
| Net cash inflow from financing activities | 351,556 | 728,727 |
| Effect of exchange rate changes on cash and | (1,797) | 1,777 |
| Net (decrease) increase in cash and cash | (235,334) | 139,937 |
| Cash and cash equivalents, beginning of year | 967,572 | 827,635 |
| Cash and cash equivalents, end of year | $ 732,238 | $ 967,572 |
(Please refer to the attached notes of the consolidated financial statements.)
Chairman: Lin Chuang-Ju
Manager: Lin Chuang-Yeh
Account Officer: Yeh Yan-Ling
21
Independent Auditor's Report
To: Stakeholders Of TongHwa Corporation
(formerly known as Tong-Hwa Synthetic Fiber Co., Ltd)
Opinion
We have audited the accompanying parent-company-only balance sheets of Tung Hua Lung Co., Ltd. as of December 31, 2025 and 2024, and the related parent-company-only statements of comprehensive income, changes in equity and cash flows for the years from January 1 to December 31, 2025 and 2024, and the notes to the parent-company-only financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying parent-company-only financial statements present fairly, in all material respects, the financial position of Tung Hua Lung Co., Ltd. as of December 31, 2025 and 2024, and its financial performance and cash flows for the years from January 1 to December 31, 2025 and 2024 in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.
Basis for Opinion
We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and generally accepted auditing standards in the Republic of China. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Parent-Company-Only Financial Statements section of our report. We are independent of Tung Hua Lung Co., Ltd. in accordance with the Code of Professional Ethics for Certified Public Accountants, 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 parent-company-only financial statements of Tung Hua Lung Co., Ltd. for the year ended December 31, 2025. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
22
The key audit matters for the parent-company-only financial statements of Tung Hua Lung Co., Ltd. for the year ended December 31, 2025 are as follows:
Fair Value Assessment of Investment Property
For the accounting policies for investment property, please refer to Note 4(9) to the parent-company-only financial statements; for the uncertainty of accounting estimates and assumptions for investment property, please refer to Note 5 to the parent-company-only financial statements; for the description of the investment property line item, please refer to Note 6(12) to the parent-company-only financial statements.
The investment property of Tung Hua Lung Co., Ltd. is measured at fair value. To support management in making reasonable estimates, the Company utilizes valuation reports from independent appraisers. As the valuation methods and parameters selected for the valuation involve significant judgments and estimates, this has been identified as a key audit matter.
The main audit procedures we performed are as follows:
- Evaluate the professional competence, capabilities, and objectivity of the real estate appraisers appointed by management to be responsible for fair value measurements.
- Review the fair value valuation reports to understand whether the valuation methods and assumptions comply with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and the Rules on Real Estate Appraisal, and evaluate the relevance and reliability of the data sources and significant parameters used in the valuation reports, as well as the reasonableness of the valuation results.
Emphasis of Matter – Long-term Borrowings
As described in Note 6(15) to the parent-company-only financial statements, the amount of long-term borrowings due within one year of Tung Hua Lung Co., Ltd. as of December 31, 2025 was as high as NTD 3,460,402 thousand. Our opinion is not modified in respect of this matter.
Responsibilities of Management and Those Charged with Governance for the Parent-Company-Only Financial Statements
Management is responsible for the preparation and fair presentation of the parent-company-only financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers, and for such internal control as management determines is necessary to enable the preparation of parent-company-only financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the parent-company-only financial statements, management is responsible for assessing the ability of Tung Hua Lung Co., Ltd. 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 Tung Hua Lung Co., Ltd. or to cease operations, or has no realistic alternative but to do so.
Those charged with governance (including the Audit Committee) of Tung Hua Lung Co., Ltd. are responsible for overseeing the financial reporting process.
Auditor's Responsibilities for the Audit of the Parent-Company-Only Financial Statements
Our objectives are to obtain reasonable assurance about whether the parent-company-only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with generally accepted auditing standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. Misstatements 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 parent-company-only financial statements.
As part of an audit in accordance with generally accepted auditing standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also perform the following:
- Identify and assess the risks of material misstatement of the parent-company-only 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. As fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control, the risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of Tung Hua Lung Co., Ltd.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability of Tung Hua Lung Co., Ltd. to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the parent-company-only 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 auditor's report.
24
However, future events or conditions may cause Tung Hua Lung Co., Ltd. to cease to continue as a going concern.
-
Evaluate the overall presentation, structure and content of the parent-company-only financial statements, including the disclosures, and whether the parent-company-only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
-
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within Tung Hua Lung Co., Ltd. to express an opinion on the parent-company-only 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 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 parent-company-only financial statements of Tung Hua Lung Co., Ltd. for the year ended December 31, 2025 and are therefore the key audit matters. We describe these matters in our auditor's 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.
25
Baker Tilly Chicken CO
吴秋亮
吴官
统計
完結
Accountant:
WU Hsing-Liang
Accountant:
Lai Chia-Yu
Approval Number:
Financial Supervisory Commission Securities and
Futures Bureau Audit Approval No. 09600000880
Financial Supervisory Commission Securities and
Futures Bureau Review No. 1050043092
March 5, 2026
26
TongHwa Corporation (formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Individual Balance Sheet
December 31, 2025 and 2024
Unit: NT$ Thousands
| Assets | Notes | 31 December 2025 | 31 December 2024 | |||
|---|---|---|---|---|---|---|
| Code | ACCOUNT | Amount | % | Amount | % | |
| Current assets | ||||||
| 1100 | Cash and cash equivalents | 6(1) | $ 541,951 | 10 | $ 503,650 | 10 |
| 1110 | Financial assets at fair value through profit or loss – current | 6(2) | 55,035 | 1 | 84,972 | 2 |
| 1170 | Accounts receivable | 6(4) | - | - | 668 | - |
| 1200 | Other receivables | 6(5), 7 | 4,835 | - | 3,157 | - |
| 1220 | Current income tax assets | 6(26) | 1,264 | - | 1,071 | - |
| 130x | Inventories | 6(6), 8 | 450,224 | 8 | 392,650 | 7 |
| 1410 | Prepayments | 6(7) | 6,963 | - | 6,710 | - |
| 1470 | Other current assets | 119 | - | 136 | - | |
| 11xx | Total current assets | 1,060,391 | 19 | 993,014 | 19 | |
| Non-current assets | ||||||
| 1510 | Financial assets at fair value through profit or loss – non-current | 6(2) | 105,946 | 2 | 104,173 | 2 |
| 1517 | Financial assets at fair value through other comprehensive income – non-current | 6(3) | 4,261 | - | 5,550 | - |
| 1550 | Investments accounted for using equity method | 6(8) | 474,062 | 9 | 476,602 | 9 |
| 1600 | Property, plant and equipment | 6(9), 8 | 696,216 | 13 | 688,505 | 13 |
| 1755 | Right-of-use assets | 6(10) | 9,170 | - | 11,035 | - |
| 1760 | Investment property | 6(12), 8 | 3,085,012 | 56 | 2,955,472 | 56 |
| 1975 | Net defined benefit asset – non-current | 6(17) | 25,750 | 1 | 22,848 | 1 |
| 1990 | Refundable deposits | 5,418 | - | 7,338 | - | |
| 15xx | Total non-current assets | 4,405,835 | 81 | 4,271,523 | 81 | |
| 1xxx | Total assets | $ 5,466,226 | 100 | $ 5,264,537 | 100 |
(Continued on next page)
TongHwa Corporation (formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Individual Balance Sheet (Continued)
December 31, 2025 and 2024
Unit: NT$ Thousands
| Liabilities and Equity | Notes | 31 December 2025 | 31 December 2024 | |||
|---|---|---|---|---|---|---|
| Code | ACCOUNT | Amount | % | Amount | % | |
| Current liabilities | ||||||
| 2100 | Short-term borrowings | 6(13) | $ 200,000 | 4 | $ - | - |
| 2150 | Notes payable | 7 | 8 | - | 31 | - |
| 2200 | Other payables | 6(14) | 18,152 | - | 23,569 | - |
| 2280 | Lease liabilities - current | 6(10) | 1,960 | - | 1,916 | - |
| 2320 | Long-term borrowings due within one year | 6(15) | 3,460,402 | 63 | - | - |
| 2300 | Other current liabilities | 6(16) | 1,817 | - | 1,827 | - |
| 21xx | Total current liabilities | 3,682,339 | 67 | 27,343 | - | |
| Non-current liabilities | ||||||
| 2540 | Long-term borrowings | 6(15) | - | - | 3,432,600 | 65 |
| 2570 | Deferred tax liabilities | 6(26) | 543,998 | 10 | 493,682 | 10 |
| 2580 | Lease liabilities - non-current | 6(10) | 7,469 | - | 9,428 | - |
| 2650 | Credit balance of investments accounted for using equity method | 6(8) | 20 | - | - | - |
| 2670 | Other non-current liabilities | 6(16), 7 | 770 | - | 521 | - |
| 25xx | Total non-current liabilities | 552,257 | 10 | 3,936,231 | 75 | |
| 2xxx | Total liabilities | 4,234,596 | 77 | 3,963,574 | 75 | |
| Equity | 6(18) | |||||
| 3100 | Share capital | 568,343 | 10 | 568,343 | 11 | |
| 3200 | Capital surplus | 8,008 | - | 8,008 | - | |
| Retained earnings | ||||||
| 3320 | Special reserve | 1,560 | - | 1,560 | - | |
| 3350 | Accumulated deficit | (816,405) | (15) | (748,361) | (14) | |
| 3400 | Other equity | 1,550,457 | 29 | 1,551,746 | 30 | |
| 3500 | Treasury stock | (80,333) | (1) | (80,333) | (2) | |
| 3xxx | Total equity | 1,231,630 | 23 | 1,300,963 | 25 | |
| Total liabilities and equity | $ 5,466,226 | 100 | $ 5,264,537 | 100 |
(Please refer to the attached notes to the individual financial statement.)
Chairman: Lin Chuang-Ju
Manager: Lin Chuang-Yeh
Account Officer: Yeh Yan-Ling
图
TongHwa Corporation (formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Individual Statements of Comprehensive Income
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| Code | ITEM | Notes | 2025 | 2024 | ||
|---|---|---|---|---|---|---|
| Amount | % | Amount | % | |||
| 4000 | Operating revenue | 6(19) | $ 5,329 | 100 | $ 10,248 | 100 |
| 5000 | Operating costs | 6(6, 25), 7 | (1,088) | (20) | (16,652) | (162) |
| 5900 | Gross profit (loss) from operations | 4,241 | 80 | (6,404) | (62) | |
| 6000 | Operating expenses | 6(25) | ||||
| 6100 | Selling expenses | (17,721) | (333) | (19,342) | (189) | |
| 6200 | Administrative expenses | (58,629) | (1,100) | (56,228) | (548) | |
| Total operating expenses | (76,350) | (1,433) | (75,570) | (737) | ||
| 6500 | Other income and expenses, net | 6(20) | (117) | (2) | 30,786 | 300 |
| 6900 | Loss from operations | (72,226) | (1,355) | (51,188) | (499) | |
| 7000 | Non-operating income and expenses | |||||
| 7100 | Interest income | 6(21) | 4,116 | 77 | 8,895 | 87 |
| 7010 | Other income | 6(22), 7 | 15,568 | 292 | 7,464 | 73 |
| 7020 | Other gains and losses | 6(23) | 128,599 | 2,413 | 163,671 | 1,597 |
| 7050 | Finance costs | 6(24) | (94,486) | (1,773) | (87,177) | (851) |
| 7070 | Share of profit (loss) of subsidiaries and associates accounted for using equity method | (1,665) | (31) | 1,876 | 18 | |
| Total non-operating income and expenses | 52,132 | 978 | 94,729 | 924 | ||
| 7900 | Profit (loss) before income tax | (20,094) | (377) | 43,541 | 425 | |
| 7950 | Income tax expense (benefit) | 6(26) | (49,843) | (935) | (17,756) | (173) |
| 8200 | Net profit (loss) for the year | (69,937) | (1,312) | 25,785 | 252 | |
| 8300 | Other comprehensive income | |||||
| 8310 | Items that will not be reclassified to profit or loss: | |||||
| 8311 | Remeasurements of defined benefit plans | 6(17) | 2,366 | 44 | 4,085 | 40 |
| 8316 | Unrealized gains or losses on valuation of investments in equity instruments measured at fair value through other comprehensive income | 6(18) | (1,289) | (24) | 369 | 3 |
| 8349 | Income tax related to items that will not be reclassified | 6(26) | (473) | (9) | (817) | (8) |
| Other comprehensive income (loss) for the year, net of tax | 604 | 11 | 3,637 | 35 | ||
| 8500 | Total comprehensive income (loss) for the year | $ (69,333) | (1,301) | $ 29,422 | 287 | |
| Earnings (loss) per share (in NT dollars) | 6(27) | |||||
| 9750 | Basic earnings (loss) per share | $ (1.29) | $ 0.47 |
(Please refer to the attached notes to the individual financial statement.)
Chairman: Lin Chuang-Ju Manager: Lin Chuang-Yeh Account Officer: Yeh Yan-Ling
30
国
TongHwa Corporation (formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Individual Statement of Changes in Equity
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| Item | Share capital | Capital surplus | Retained earnings | OTHER EQUITY | Treasury stock | Total equity | ||
|---|---|---|---|---|---|---|---|---|
| Special reserve | Accumulated deficit | Unrealized gains (losses) on financial assets at fair value through other comprehensive income | Revaluation increment on property | |||||
| Balance as of 1 January 2024 | $ 568,343 | $ 8,008 | $ 1,560 | $ (777,414) | $ (230,614) | $ 1,781,991 | $ (80,333) | $ 1,271,541 |
| Net profit for the year | - | - | - | 25,785 | - | - | - | 25,785 |
| Other comprehensive income (loss) for the year, net of tax | - | - | - | 3,268 | 369 | - | - | 3,637 |
| Total comprehensive income (loss) for the year | - | - | - | 29,053 | 369 | - | - | 29,422 |
| Balance as of 31 December 2024 | $ 568,343 | $ 8,008 | $ 1,560 | $ (748,361) | $ (230,245) | $ 1,781,991 | $ (80,333) | $ 1,300,963 |
| Balance as of 1 January 2025 | $ 568,343 | $ 8,008 | $ 1,560 | $ (748,361) | $ (230,245) | $ 1,781,991 | $ (80,333) | $ 1,300,963 |
| Net loss for the year | - | - | - | (69,937) | - | - | - | (69,937) |
| Other comprehensive income (loss) for the year, net of tax | - | - | - | 1,893 | (1,289) | - | - | 604 |
| Total comprehensive income (loss) for the year | - | - | - | (68,044) | (1,289) | - | - | (69,333) |
| Balance as of 31 December 2025 | $ 568,343 | $ 8,008 | $ 1,560 | $ (816,405) | $ (231,534) | $ 1,781,991 | $ (80,333) | $ 1,231,630 |
(Please refer to the attached notes to the independent financial statement.)
32
Chairman: Lin Chuang-Ju
Manager: Lin Chuang-Yeh
Account Officer: Yeh Yan-Ling
TongHwa Corporation (formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Individual Statement of Cash Flows
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| ITEM | 2025 | 2024 |
|---|---|---|
| Cash flows from operating activities: | ||
| Profit (loss) before tax for the year | $ (20,094) | $ 43,541 |
| Adjustments: | ||
| Income and expense items | ||
| Depreciation expense | 5,445 | 4,284 |
| Loss (gain) on financial assets at fair value through profit or loss | 3,778 | (4,743) |
| Interest expense | 94,486 | 87,177 |
| Interest income | (4,116) | (8,895) |
| Dividend income | (5,924) | (6,024) |
| Share of loss (profit) of subsidiaries and associates accounted for using the equity method | 1,665 | (1,876) |
| Loss (gain) on disposal of property, plant and equipment | 117 | (30,786) |
| Unrealized foreign exchange loss (gain) | 1,787 | (1,777) |
| Gain on fair value adjustment of investment property | (129,540) | (158,487) |
| Net change in operating assets and liabilities | ||
| Accounts receivable | 668 | (668) |
| Other receivables | 1,209 | (2,408) |
| Inventories | (52,253) | (389,191) |
| Prepayments | (208) | (1,403) |
| Other current assets | 17 | (47) |
| Net defined benefit asset | (536) | (606) |
| Notes payable | (23) | (30) |
| Other payables | (7,911) | 8,520 |
| Other current liabilities | (10) | 64 |
| Other non-current liabilities | 249 | 89 |
| Cash outflow generated from operations | (111,194) | (463,266) |
(Continued on next page)
TongHwa Corporation (formerly known as: Tong-Hwa Synthetic Fiber Co., Ltd.)
Individual Statements of Cash Flows (Continued)
For the Years Ended December 31, 2025 and 2024
Unit: NT$ Thousands
| ITEM | 2025 | 2024 |
|---|---|---|
| Interest received | 4,116 | 8,895 |
| Interest paid | (99,645) | (85,963) |
| Income taxes paid | (193) | (855) |
| Net cash outflow from operating activities | (206,916) | (541,189) |
| Cash flows from investing activities: | ||
| Acquisition of financial assets at fair value through profit or loss | (254,945) | (344,682) |
| Disposal of financial assets at fair value through profit or loss | 278,318 | 265,251 |
| Acquisition of property, plant and equipment | (12,396) | (5,385) |
| Disposal of property, plant and equipment | 1,295 | 31,414 |
| Decrease in refundable deposits | 1,920 | - |
| Dividends received | 6,925 | 6,519 |
| Net cash inflow (outflow) from investing activities | 21,117 | (46,883) |
| Cash flows from financing activities: | ||
| Increase (decrease) in short-term borrowings | 200,000 | (100,000) |
| Incurrence of long-term borrowings | 27,802 | 3,432,600 |
| Repayment of long-term borrowings | - | (2,602,000) |
| Repayment of lease liabilities | (1,915) | (1,873) |
| Net cash inflow from financing activities | 225,887 | 728,727 |
| Effect of exchange rate changes on cash and cash equivalents | (1,787) | 1,777 |
| Net increase in cash and cash equivalents for the year | 38,301 | 142,432 |
| Cash and cash equivalents at beginning of the year | 503,650 | 361,218 |
| Cash and cash equivalents at end of the year | $ 541,951 | $ 503,650 |
(Please refer to the attached notes to the independent financial statement.)
Chairman: Lin Chuang-Ju Manager: Lin Chuang-Yeh Account Officer: Yeh Yan-Ling
35
Acknowledged Items
Proposal Two: (Proposed by the Board of Directors)
2025 Loss Off-setting Proposal
Explanation: The 2025 final accounts have been audited by the Audit Committee and CPAs, and the 2025 loss off-setting is set out below:
TongHwa Corporation
2025 Loss Off-setting Proposal
Unit: New Taiwan Dollar
| Item | Total |
|---|---|
| Opening accumulated losses | ($748,360,989) |
| The remeasurement of defined benefit plans after tax is listed in Retained earnings | 1,892,906 |
| Accumulated losses after adjustment | ($746,468,083) |
| Net Profit | ($69,937,138) |
| Accumulated losses, end of period | ($816,408,221) |
Chairman: Lin Chuang-Ju
Manager: Lin Chuang-Yeh
Account Officer: Yeh Yan-Ling
Resolution:
36
III. Extemporary Motions:
IV. Adjournment:
37
Appendix I
TW Sports Company.
Comparison Table of Amendments to the Procedures for the Acquisition or Disposal of Assets
Established on February 29, 2024
Amended on February 2, 2026
| Provisions Before Amendments | Amended Provisions | Basis and Reason for Amendment |
|---|---|---|
| Article 4-4 | ||
| The limit for the acquisition of membership certificates or intangible assets is NTD 300 million. | Article 4-4 | |
| The limit for the acquisition or disposal of membership certificates or intangible assets is NTD 100 million. | Amended to meet the practical needs of the company. |
38
39
Appendix II
Articles of Incorporation of TongHwa Corporation
Chapter I General Provisions
Article 1 The Company is organized in accordance with the provisions of the Company Act and is named "TongHwa Corporation".
The English name is TongHwa Corporation.
Article 2 The scope of business of the Company is as follows:
(1) C801120 Man-made Fiber Manufacturing Industry.
(2) F401010 International Trade.
(3) F102030 Tobacco and Alcohol Wholesale.
(4) F203020 Tobacco and Alcohol Retail.
(5) F203040 Cigar Retail.
(6) F207200 Chemical Raw Materials Retail.
(7) G202010 Parking Lot Operation.
(8) G801010 Warehousing.
(9) H201010 General Investment.
(10) H701010 Residential and Commercial Building Development, Leasing, and Sales.
(11) H701020 Industrial Plant Development, Leasing, and Sales.
(12) H701040 Specific Professional Zone Development.
(18) H701050 Investment in the Construction of Public Infrastructure.
(14) H701080 Urban Renewal and Reconstruction.
(15) H701090 Urban Renewal, Renovation, and Maintenance.
(16) H703090 Real Estate Sales.
(17) H703100 Real Estate Leasing.
(18) ZZ99999 In addition to business requiring a special permit, the Company may engage in any business not prohibited or restricted by laws or regulations.
Article 2-1 The Company's total amount of reinvestments may exceed forty percent (40%) of its paid-in capital. The Company may, for business needs, handle endorsement and guarantee matters in accordance with the "Procedures for Endorsements and Guarantees."
Article 3 The Company shall establish its head office in Taipei City and may, when necessary,
establish branch offices, business offices, and other business units in other appropriate locations.
Article 4 (Deleted)
Chapter II Shares
Article 5 The total capital of the Company is NTD 2,638,552,610, divided into 263,855,261 shares with a par value of NTD TEN per share, and shall be issued in installments.
Article 6 All shares of the Company shall be registered ordinary shares, which shall be issued after being duly registered, signed or sealed by the directors representing the Company, and authenticated by a bank legally authorized to serve as the certifier for the issuance of shares. The Company may issue new shares without printing physical share certificates, provided that such shares shall be registered with a centralized securities depository institution.
Article 7 The Company's shareholder services shall be handled in accordance with the "Regulations Governing the Administration of Shareholder Services of Public Companies" promulgated by the competent authority.
Article 8 The registration of share transfers shall be suspended for a period of sixty days prior to the date of each annual general meeting of shareholders, thirty days prior to the date of each extraordinary general meeting of shareholders, or five days prior to the record date fixed by the Company for the distribution of dividends, bonuses, or other benefits.
Article 9 (Deleted)
Chapter III Shareholders' Meetings
Article 10 Shareholders' meetings of the Company are of two types: annual general meetings and extraordinary general meetings. When a shareholders' meeting is held, it may be conducted by means of a video conference or other methods announced by the competent authority. The annual general meeting shall be held once every year and shall be convened by the Board of Directors within six months after the end of each fiscal year. Extraordinary meetings shall be convened in accordance with the law whenever necessary.
Article 11 Notice of the convening of an annual general meeting of shareholders shall be given to each shareholder 30 days in advance, and notice of the convening of an extraordinary general meeting of shareholders shall be given to each shareholder 15
40
days in advance, and public announcement thereof shall be made in accordance with regulations.
Article 12 (Deleted)
Article 13 The Chairman of the Board of Directors shall chair the shareholders' meetings.
When the Chairman is unable to perform his/her duties for any reason, the Vice Chairman shall act on his/her behalf. If the Vice Chairman is also unable to perform his/her duties for any reason or if no Vice Chairman is appointed, the Chairman shall designate a Director to act as his/her proxy. In the absence of such designation by the Chairman, the Directors shall elect one person from among themselves to act as the proxy.
Article 14 Resolutions of a shareholders' meeting shall, unless otherwise provided by relevant laws and regulations, be adopted by a majority vote of the shareholders present in person or by proxy, who represent more than one-half of the total number of issued shares.
Article 15 Except as otherwise provided by the Company Act, each shareholder of the Company shall have one vote for each share held.
Article 16 When a shareholder appoints a proxy to attend a shareholders' meeting, the shareholder shall, five days prior to the meeting, submit the proxy form issued by the Company. Except for trust enterprises or shareholder services agencies approved by the competent securities authority, when one person is concurrently entrusted by two or more shareholders, the voting rights represented by such person shall not exceed three percent of the total voting rights of the issued shares; any voting rights in excess of such limit shall not be counted.
A shareholder shall issue only one proxy form and shall be limited to appointing one proxy.
Article 17 Resolutions adopted at a shareholders' meeting shall be recorded in the minutes of the meeting, which shall be signed or sealed by the chair of the meeting and stored at the Company. The minutes shall be distributed to each shareholder within 20 days after the conclusion of the meeting. The distribution of the minutes of the meeting referred to in the preceding paragraph may be effected by way of a public announcement.
Chapter IV Directors and Board of Directors
Article 18 The Company shall have seven to nine directors. The aggregate shareholding percentage of all directors shall be in accordance with the regulations of the securities
41
regulatory authority.
Of the number of directors in the preceding paragraph, the number of independent directors shall not be less than two and shall not be less than one-fifth of the director seats.
The Company's directors (including independent directors) shall be elected under a candidate nomination system, whereby the shareholders' meeting shall elect directors from the list of candidates for directors (including independent directors).
Article 19 The term of office for directors shall be three years, and they may be eligible for re-election.
The term of office of a director elected to fill a vacancy or due to an increase in the number of seats shall be the same as the remaining term of his/her predecessor or other directors currently in office.
Article 19-1 The Board of Directors is authorized to determine the remuneration of directors based on the prevailing industry standards.
Article 20 Unless otherwise provided by the Company Act, the Board of Directors shall deliberate on the following matters:
(1) Amendments to the Articles of Incorporation
(2) Business Plan
(3) Budgets and Final Accounts
(4) Distribution of profits or making up of losses
(5) External investments and the disposal thereof
(6) Appointment and dismissal of key personnel
(7) Acquisition and transfer of material assets
(8) Establishment and dissolution of branch offices
(9) Increase or decrease in capital
(10) Other matters prescribed by the Company Act or these Articles of Incorporation
Article 21 Notice of a meeting of the Board of Directors shall be delivered to each director seven days prior to the meeting; provided, however, that in the event of an emergency, a meeting may be convened at any time. Such notice may be sent by email or facsimile.
Article 22 Unless otherwise provided by the Company Act, meetings of the Board of Directors shall be convened and chaired by the Chairman of the Board of Directors. When the Chairman is unable to perform his/her duties for any reason, the Vice Chairman shall
42
act on his/her behalf. If the Vice Chairman is also unable to perform his/her duties for any reason or if no Vice Chairman has been appointed, the Chairman shall designate a director to act on his/her behalf. In the absence of such designation by the Chairman, the directors shall elect one person from among themselves to act on his/her behalf.
Article 23 Resolutions of the Board of Directors shall be adopted by a majority vote of the directors present at a meeting attended by more than one-half of all directors, except as otherwise provided in the Company Act.
A director may appoint another director to attend a meeting of the Board of Directors as his or her proxy, provided that a director may act as a proxy for only one other director.
Article 24 The Company shall have one Chairman of the Board of Directors, who shall be elected from among the directors by a majority vote of the directors present at a meeting of the Board of Directors attended by two-thirds or more of the directors.
The Chairman shall preside over all business of the Company and represent the Company.
The Company may have one person elected from among the directors as the Vice Chairman in the manner set forth in the preceding paragraph.
The Vice Chairman shall assist the Chairman. When the Chairman is unable to perform his or her duties for any reason, the Vice Chairman shall act on his or her behalf.
Chapter V Audit Committee
Article 25 (Deleted)
Article 26 (Deleted)
Article 26-1 (Deleted)
Article 27 (Deleted)
Article 27-1 The Company shall establish an Audit Committee in accordance with Article 14-4 of the Securities and Exchange Act. The Audit Committee shall be composed of all independent directors. The exercise of powers by the Audit Committee and its members, and related matters, shall be handled in accordance with the relevant laws and regulations under the Securities and Exchange Act.
Chapter VI Managerial Officers
Article 28 The Company may appoint one or more General Managers and Deputy General Managers. Their appointment, dismissal, and remuneration shall be handled in accordance with Article 29 of the Company Act. Their functions and powers shall be
43
determined by a resolution of the Board of Directors, and the Board of Directors may authorize the Chairman to make such determination.
Article 29 The General Manager shall, under the direction of the Chairman of the Board of Directors, manage all business of the Company and shall be assisted by the Deputy General Manager(s).
Chapter VII Accounting
Article 30 The fiscal year of the Company shall commence on January 1 and end on December 31 of each year, and the final accounts shall be prepared at the end of each fiscal year.
Article 31 When distributing earnings, the shareholders recorded in the register of shareholders as of the record date determined by the Company shall prevail.
Article 32 If the Company has profits in a given year, it shall first set aside an amount to cover its accumulated losses, and then from the remainder, set aside remuneration for employees (excluding non-managerial employees) and directors; provided that the remuneration for directors shall not be higher than five percent (5%) of the distributable amount, and the remuneration for employees (excluding non-managerial employees) shall be set aside at a rate of one percent (1%) to three percent (3%) of the distributable amount.
Remuneration for non-managerial employees shall be set aside at a rate of one percent (1%) to three percent (3%) of the distributable amount.
Based on the overall environment and the characteristics of its industry, and in order to pursue sustainable operations, continuous growth, and coordination with long-term financial planning, the Company adopts a fixed and residual dividend policy.
If there is a surplus in the annual final accounts of the Company, the Company shall first pay taxes and cover accumulated losses, and then set aside ten percent (10%) as a legal reserve; provided, however, that when the legal reserve has reached the amount of the paid-in capital, no further allocation shall be required. After a special reserve is set aside as deemed appropriate, the Board of Directors shall draft a distribution proposal for the remainder and submit it to the shareholders' meeting for resolution. When distributing shareholder dividends, the cash dividend shall be maintained between thirty percent (30%) and seventy percent (70%), provided that it may be adjusted based on changes in the internal and external operating environment.
Chapter VIII Supplementary Provisions
44
Article 33 The organizational regulations and detailed operating rules of the Company shall be separately determined by the Board of Directors.
Article 34 Matters not provided for in these Articles of Incorporation shall be handled in accordance with the provisions of the Company Act.
Article 35 These Articles of Incorporation were adopted on December 26, 1969. The 1st amendment was made on May 10, 1972; the 2nd amendment on March 23, 1973; the 3rd amendment on April 8, 1974; the 4th amendment on September 3, 1974; the 5th amendment on April 25, 1975; the 6th amendment on December 15, 1975; the 7th amendment on February 17, 1976; the 8th amendment on March 30, 1977; the 9th amendment on May 18, 1978; the 10th amendment on June 15, 1979; the 11th amendment on July 30, 1980; the 12th amendment on May 15, 1981; the 13th amendment on May 25, 1982; the 14th amendment on May 31, 1983; the 15th amendment on June 18, 1984; the 16th amendment on June 20, 1985; the 17th amendment on May 30, 1986; the 18th amendment on May 25, 1987; the 19th amendment on May 26, 1988; and the 20th amendment on May 26, 1989. The 21st amendment was made on June 6, 1990. The 22nd amendment was made on May 30, 1991. The 23rd amendment was made on 26 May 1992. The 24th amendment was made on 28 May 1993. The 25th amendment was made on 25 May 1994. The 26th amendment was made on 31 May 1995. The 27th amendment was made on 31 May 1996. The 28th amendment was made on 26 May 2000. The 29th amendment was made on 31 May 2001. The 30th amendment was made on 19 June 2002. The 31st amendment was made on 11 June 2004. The 32nd amendment was made on 14 June 2005. The 33rd amendment was made on 14 June 2006. The 34th amendment was made on 13 June 2008. The 35th amendment was made on 19 June 2009. The 36th amendment was made on 3 May 2010. The 37th amendment was made on 22 June 2012. The 38th amendment was made on 11 June 2013. The 39th amendment was made on 30 June 2015. The 40th amendment was made on 24 June 2016. The 41st amendment was made on June 20, 2018. The 42nd amendment was made on June 17, 2020. The 43rd amendment was made on June 27, 2022. The 44th amendment was made on June 25, 2024. The 45th amendment was made on June 10, 2025.
45
Appendix III
Rules of Procedure for the Shareholders' Meeting of Tung Wah Holdings Limited
August 30, 1966 Approved by the shareholders' extraordinary meeting
May 27, 1998 First Amendment to the Shareholders' Meeting
19 June 2002 Second Amendment of the Shareholders' Meeting
-
The company's shareholders' meeting shall be conducted in accordance with these rules.
-
Shareholders (or their proxies) are requested to bring their attendance cards and submit the sign-in card as a substitute for signing in.
-
Unless otherwise provided by the Companies Ordinance, the chairman shall declare the meeting open if shareholders representing more than half of the total number of issued shares are present. If the meeting time has passed and the number of statutory shares is still insufficient, the chairman may announce a postponement of the meeting, limited to two times, with the total postponement time not exceeding one hour. If the attendance of shareholders representing more than one-third of the total issued shares is still insufficient after two postponements, it may be handled in accordance with Article 175 of the Companies Ordinance, with the consent of more than half of the voting rights of the attending shareholders constituting a deemed resolution. Before the conclusion of the meeting, if the number of shares represented by the attending shareholders meets the legal requirement, the chairman may declare the meeting officially opened at any time and submit the resolutions that have been made for ratification by the assembly.
-
The location of the company's shareholders' meeting shall be at the company's place of business or at a location convenient for shareholders to attend and suitable for holding the shareholders' meeting. The meeting shall not commence earlier than 9:00 AM or later than 3:00 PM.
-
If the shareholders' meeting is convened by the board of directors, the chairman shall be served by the chairman of the board. If the chairman is on leave or unable to exercise his powers for any reason, the vice chairman shall act on his behalf. If there is no vice chairman or if the vice chairman is also on leave or unable to exercise his powers for any reason, a
46
managing director designated by the chairman shall act on his behalf; if no managing director is appointed, a director designated by the chairman shall act on his behalf. If the chairman has not appointed a representative, a managing director or director shall mutually recommend one person to act on his behalf.
If the shareholders' meeting is convened by someone other than the board of directors who has the right to convene, the chairperson shall be held by that convening party. If there are two or more convening parties, they shall mutually elect one person to serve as chairperson.
- The Company may appoint its designated lawyers, accountants, or relevant personnel to attend the shareholders' meeting.
The personnel handling the shareholders' meeting should wear identification badges or armbands.
-
The company shall record the entire process of the shareholders' meeting by audio or video, and retain it for at least one year.
-
The agenda of the shareholders' meeting of the company, if convened by the board of directors, shall be determined by the board of directors, and the meeting shall proceed according to the scheduled agenda, which shall not be changed without a resolution of the shareholders' meeting.
If the shareholders' meeting is convened by someone other than the board of directors who has the right to convene, the provisions of the preceding paragraph shall apply.
Before the conclusion of the agenda for the first two items (including any motions), the chairperson shall not unilaterally declare the meeting adjourned without a resolution.
However, the chairman violated the rules of procedure by announcing that those who adjourned the meeting could attend the shareholders' vote to select one person to serve as chairman and continue the meeting.
Except for the circumstances mentioned above, after the meeting adjourns, shareholders shall not re-elect a chairman at the original location or seek another venue to continue the meeting.
- When attending the shareholders' speech, it is necessary to fill in the main points of the speech, shareholder account number (or attendance certificate number), and account name on
47
a speech card, and submit it to the service desk to be passed on to the chairman in order of priority. Shareholders who only submitted speaking slips but did not speak will be regarded as having not spoken. In case of discrepancies between the content of the speech and the recorded notes, the content of the speech shall prevail.
- During the attendance of shareholders' speeches, each time shall not exceed five minutes, but those permitted by the chairman may extend for an additional five minutes. If the speech exceeds the time limit or goes beyond the scope of the proposal, the chairperson may stop the speech.
During the shareholders' speech, other shareholders may not speak or interfere without the consent of the chairman and the speaking shareholder; violators should be stopped by the chairman.
-
Each shareholder (or proxy) may speak no more than twice on the same proposal.
-
During the discussion of the proposal, the chairman may declare the discussion concluded at an appropriate time and may suspend the discussion if necessary. Upon declaring the conclusion or suspension of the discussion on the agenda item, the chairman shall submit it for voting.
-
The resolution shall be passed with the consent of more than half of the voting rights of the attending shareholders, unless otherwise provided by the Companies Ordinance and the Articles of Association. During the voting process, if there are no objections raised by the Chairman after consultation, it shall be deemed passed, and its effect shall be the same as that of a voting decision.
-
After the shareholders' speech, the chairman shall personally or designate relevant personnel to respond.
-
The personnel for monitoring and counting the votes on the proposal shall be designated by the chairman, but the monitoring personnel must have shareholder status. The results of the vote should be reported on the spot and recorded.
-
When the same proposal has amendments or alternatives, the chairman shall determine the
48
order of voting together with the original proposal. If one of the proposals has been approved, the other proposals shall be deemed rejected and shall not require further voting.
-
Each shareholder has one vote per share. Shareholders may appoint agents to attend the shareholders' meeting. When one person is appointed by more than two shareholders simultaneously, the voting rights they represent shall not exceed three percent of the total voting rights of the issued shares. Any voting rights exceeding this limit shall not be counted.
-
Shareholders with a personal interest in the matters of the meeting that may harm the interests of the company shall not participate in the voting and shall not authorize other shareholders to exercise voting rights on their behalf.
-
When a legal entity is entrusted to attend the shareholders' meeting, it may only appoint one person to represent it.
When a corporate shareholder appoints more than one representative to attend the shareholders' meeting, only one person may speak on the same proposal. -
The chairman shall direct the inspectors (or security personnel) to assist in maintaining order at the venue. When the inspectors (or security personnel) are present to assist in maintaining order, they should wear an armband with the words "Inspector".
-
During the meeting, the chairman may declare a break at his discretion.
-
Matters not specified in these rules shall be handled in accordance with the provisions of the Companies Ordinance and the Articles of Association of the Company.
These rules shall come into effect after being approved by the shareholders' meeting, and the same applies to any amendments.
49
IV. Shareholdings of Directors
Book closure date: April 09, 2026
I. Current Shareholding Details of Directors
| Title | Name | Stop Transfer Date Number of Shares |
|---|---|---|
| Chairman | Lin Chuang-Ju | 405,301 |
| Director | Lin Chuang-Yeh | 417,224 |
| Director | Chung Liang CO.,LTD. | |
| Representative: Lin Ho-Whei | 20,917,364 | |
| Director | Jiang Zhi-Heng | 65,227 |
| Director | Ninghan Development Co., Ltd. | |
| Representative: Huang-Yu-Ching | 3,890,445 | |
| Director | Chiu-Cheng-Yi | 0 |
| Independent Director | Lee Tsung-Ju | 0 |
| Independent Director | Chen-Wei-Tai | 0 |
| Independent Director | Yang-Yu-Chien | 0 |
II. The Minimum Shareholdings of Total Directors by Law and Actual Shareholding:
| Title | Shareholdings by Law | Actual Shareholding |
|---|---|---|
| Directors | 4,546,744 | 25,695,561 |