Stock Code:1310

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Financial Statements

With Independent Auditors’ Report for the Years Ended December 31, 2025 and 2024

Address: 8F.-1, No.6, Sec.1, Roosevelt Rd., Taipei City
Telephone: (02)2396-6007

The independent auditors’ report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and consolidated financial statements, the Chinese version shall prevail.

Contents	Page
1. Cover Page	1
2. Table of Contents	2
3. Representation Letter	3
4. Independent Auditors’ Report	4
5. Consolidated Balance Sheets	5
6. Consolidated Statements of Comprehensive Income	6
7. Consolidated Statements of Changes in Equity	7
8. Consolidated Statements of Cash Flows	8
9. Notes to the Consolidated Financial Statements
(1) Company history	9
(2) Approval date and procedures of the consolidated financial statements	9
(3) New standards, amendments and interpretations adopted	9~11
(4) Summary of material accounting policies	11~27
(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty	27~28
(6) Explanation of significant accounts	28~60
(7) Related-party transactions	60~61
(8) Assets pledged as security	62
(9) Commitments and contingencies	62
(10) Losses due to major disasters	62
(11) Subsequent events	62
(12) Other	62
(13) Other disclosures
(a) Information on significant transactions	63
(b) Information on investees	64
(c) Information on investment in mainland China	64~65
(14) Segment information	65~66

Representation Letter

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

Company name: Taiwan Styrene Monomer Corporation
Chairman: Lin, Wen-Yuan
Date: March 9, 2026.

KPMG

李侃建業聯合會計師事務所

KPMG

台北市110615信義路5段7號68樓(台北101大樓)

68F., TAIPEI 101 TOWER, No. 7, Sec. 5,

Xinyi Road, Taipei City 110615, Taiwan (R.O.C.)

電話 Tel +886 2 8101 6666

傳真 Fax +886 2 8101 6667

網址 Web kpmg.com/tw

Independent Auditors' Report

To the Board of Directors of Taiwan Styrene Monomer Corporation:

Opinion

We have audited the consolidated financial statements of Taiwan Styrene Monomer Corporation and its subsidiaries (“the Group”), which comprise the consolidated balance sheets as of December 31, 2025 and 2024, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes to the consolidated financial statements, including a summary of material accounting policies.

In our opinion, based on our audits and the reports of other auditors (please refer to Other Matter paragraph), the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as at December 31, 2025 and 2024, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the International Financial Reporting Standards (“IFRSs”), International Accounting Standards (“IASs”), Interpretations developed by the International Financial Reporting Interpretations Committee (“IFRIC”) or the former Standing Interpretations Committee (“SIC”) endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China.

Basis for Opinion

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Revenue recognition

Regarding accounting policies on revenue recognition, please refer to note 4(o) “Revenue recognition” to the consolidated financial statements. For explanations on revenue recognition, please refer to note 6(x) “Revenue from contracts with customers” to the consolidated financial statements.

Description of the key audit matter:

The Group's sales revenue is recognized when a performance obligation is satisfied, which depends on the various trade terms agreed with customers. Therefore, the accuracy of revenue recognition is considered to be one of the most significant in the audit.

KPMG, a Taiwan partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee.

KPMG
4-1

How the matter was addressed in our audit

Our principal audit procedures included assessing whether the accounting policies regarding revenue recognition were in conformity with relevant accounting standards; obtaining an understanding and testing the effectiveness of design and implementation of internal controls over revenue recognition; selecting samples and examining vouchers; selecting samples for a period of time before and after the balance sheet date and examining the transactions terms and relevant vouchers to assess whether sales revenue was recognized in an appropriate period; in addition, we also performed analytical procedures on primary customers and products to evaluate if there is any material abnormality.

Impairment of non-financial assets (Property, plant and equipment, intangible assets, and right-of-use assets)

Regarding accounting policies on impairment of non-financial assets, please refer to note 4(n) "Impairment of non-financial assets" to the consolidated financial statements. For the accounting assumption and estimation uncertainty on non-financial assets, please refer to note 5(a) to the consolidated financial statements. For explanations on property, plant and equipment, intangible assets, and right-of-use assets, please refer to notes 6(j), 6(m), and 6(k) to the consolidated financial statements, respectively.

Description of the key audit matter:

The prosperity of the industry where the Group is located is affected by market environment factors and the economy, resulting in unfavorable changes to the Group. Therefore, the assessment of non-financial asset impairment is important. Since the evaluation process of impairment depends on the subjective judgment and estimates of the management, it is with a high degree of uncertainty. Therefore, the impairment assessment of non-financial assets is one of the key matters in the audit.

How the matter was addressed in our audit:

Our principal audit procedures for the aforementioned key audit matters included understanding the processes of management's assessment of impairment; evaluating the professional competence, suitability, and objectivity of management's experts; for the recoverable amount determined by management based on the evaluation report issued by a third party, we assessed the impairment evaluation model, verified the company's budget and financial forecasts, evaluated the appropriateness of key assumptions used in estimating future cash flows, verified the sources of parameters used in calculating the discount rate, and performed retrospective testing to assess whether there were significant differences between the company's past estimates of future cash flows and actual results. Additionally, we also reviewed whether the book value of the company's non-financial assets was consistent with the results of the evaluation report.

Other Matter

We did not audit the financial statements of some equity-accounted investees of the Group (including those statements which were prepared using a different financial reporting framework). Those statements were audited by other auditors, whose reports have been furnished to us. We have performed audit procedures on the conversion adjustments to the financial statements of those investees, which conform to those financial statements in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRS, IAS, IFRIC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China. Our opinion, insofar as it relates to the amounts included for those investees and the amounts prior to the conversion adjustments, is based solely on the reports of other auditors. Investments accounted for using equity method on those investees constituting 24.79% and 21.66% of total assets at December 31, 2025 and 2024, and the related share of profit of subsidiaries, associates and joint ventures accounted for using equity method constituting 6.54% and 9.80% of total loss before tax for the years then ended.

Taiwan Styrene Monomer Corporation has prepared its parent-company-only financial statements as of and for the years ended December 31, 2025 and 2024, on which we have issued an unqualified opinion with other matters paragraph.

KPMG
4-2

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 Regulations Governing the Preparation of Financial Reports by Securities Issuers and with the IFRSs, IASs, IFRC, SIC endorsed and issued into effect by the Financial Supervisory Commission of the Republic of China, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

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

Those charged with governance (including the Audit Committee) are responsible for overseeing the Group’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

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

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

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

KPMG

Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

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

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

The engagement partners on the audit resulting in this independent auditors' report are Yin, Yuan-Sheng and Wu, Lin.

KPMG

Taipei, Taiwan (Republic of China)

March 9, 2026

Notes to Readers

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

The independent auditors' report and the accompanying consolidated financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors' report and consolidated financial statements, the Chinese version shall prevail.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

Assets		December 31, 2025		December 31, 2024
Current assets:		Amount	%	Amount	%
1100	Cash and cash equivalents (note 6(a))	$ 568,522	7	497,755	5
1110	Current financial assets at fair value through profit or loss (note 6(b))	304,422	3	263,756	3
1170	Accounts receivable, net (note 6(c))	536,631	5	1,015,919	11
1200	Other receivables (note 7)	2,146	-	3,875	-
1220	Current tax assets	2,721	-	2,307	-
130X	Inventories (note 6(d))	301,526	3	456,685	5
1410	Prepayments (note 6(e))	226,667	2	202,733	2
1470	Other current assets	240	-	225	-
1476	Other current financial assets (notes 6(f) and 8)	12,200	-	33,860	-
Total current assets		1,955,075	20	2,477,115	26
Non-current assets:
1510	Non-current financial assets at fair value through profit or loss (note 6(b))	3,528	-	6,967	-
1517	Non-current financial assets at fair value through other comprehensive income (note 6(g))	1,843,207	19	1,526,257	15
1550	Investments accounted for using equity method (note 6(h))	2,531,851	25	2,193,854	22
1600	Property, plant and equipment (notes 6(j) and 8)	2,966,303	30	3,212,795	32
1755	Right-of-use assets (note 6(k))	11,304	-	12,483	-
1760	Investment property, net (note 6(l))	55,605	1	55,950	1
1780	Intangible assets (note 6(m))	2,494	-	3,731	-
1840	Deferred tax assets (note 6(u))	490,150	5	448,967	4
1915	Prepayments for equipment	28,466	-	25,690	-
1970	Other long-term investments, net (note 6(n))	22,179	-	24,986	-
1920	Refundable deposits	3,025	-	3,839	-
1990	Other non-current assets (notes 6(o) and (t))	48,573	-	27,472	-
Total non-current assets		8,006,685	80	7,542,991	74

Total assets

Total assets		$ 9,961,760	100	10,020,106	100

Liabilities and Equity

Current liabilities:

2100	Short-term borrowings (notes 6(p) and 8)	$ 1,457,500	15	1,292,500	13
2130	Current contract liabilities (note 6(x))	41,278	-	42,641	1
2170	Accounts payable	521,281	5	770,470	8
2200	Other payables (notes 6(q) and 7)	153,331	2	116,283	1
2230	Current tax liabilities	705	-	21	-
2280	Current lease liabilities (note 6(s))	3,651	-	5,221	-
2320	Long-term liabilities, current portion (notes 6(r) and 8)	8,839	-	8,631	-
2399	Other current liabilities	2,381	-	2,577	-
	Total current liabilities	2,188,966	22	2,238,344	23
Non-Current liabilities:
2540	Long-term borrowings (notes 6(r) and 8)	34,600	1	43,439	1
2570	Deferred tax liabilities (note 6(u))	175,257	2	175,095	2
2581	Non-current lease liabilities (note 6(s))	7,292	-	6,919	-
2640	Net defined benefit liability, non-current (note 6(t))	27,059	-	37,657	-
2600	Other non-current liabilities	650	-	650	-
	Total non-current liabilities	244,858	3	263,760	3
	Total liabilities	2,433,824	25	2,502,104	26
Equity attributable to owners of parent (notes 6(h) and (v)):
3100	Capital stock	5,278,698	53	5,278,698	53
3200	Capital surplus	129,839	1	129,663	1
	Retained earnings:
3310	Legal reserve	639,287	6	639,287	6
3320	Special reserve	8,811	-	8,811	-
3350	Unappropriated retained earnings (accumulated deficit)	(677,078)	(6)	44,872	-
		(28,980)	-	692,970	6
3400	Other equity	2,020,980	20	1,290,470	13
	Total equity attributable to owners of parent	7,400,537	74	7,391,801	73
36XX	Non-controlling interests	127,399	1	126,201	1
	Total equity	7,527,936	75	7,518,002	74
	Total liabilities and equity	$ 9,961,760	100	10,020,106	100

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Except for loss Per Share)

	2025		2024
		Amount	%	Amount	%
4000	Operating revenue (notes 6(h) and (x))	8,673,776	100	11,422,940	100
5000	Operating costs (notes 6(d), (j), (k), (l), (m), (s), (t) and 7)	9,216,061	106	11,771,760	103
	Gross loss from operations	(542,285)	(6)	(348,820)	(3)
	Operating expenses (notes 6(c), (j), (k), (m), (s), (t) and 7):
6100	Selling expenses	57,980	1	71,085	1
6200	Administrative expenses	121,505	1	132,075	1
6300	Research and development expenses	526	-	322	-
6450	Expected credit impairment loss	22	-	17	-
		180,033	2	203,499	2
	Operating loss	(722,318)	(8)	(552,319)	(5)
	Non-operating income and expenses (notes 6(h), (s) and (y)):
7100	Interest income	8,856	-	16,468	-
7010	Other income	21,803	-	23,350	-
7020	Other gains and losses	3,829	-	100,552	1
7050	Finance costs	(26,434)	-	(22,691)	-
7060	Shares of loss of associates and joint ventures accounted for using equity method	(49,724)	(1)	(47,840)	-
		(41,670)	(1)	69,839	1
9900	Loss before tax	(763,988)	(9)	(482,480)	(4)
7950	Income tax benefits (note 6(u))	40,438	-	98,873	1
	Net loss	(723,550)	(9)	(383,607)	(3)
8300	Other comprehensive income:
8310	Components of other comprehensive income (loss) that will not be reclassified to profit or loss
8311	Remeasurements of defined benefit plans	8,077	-	2,126	-
8316	Unrealized gains from investments in equity instruments measured at fair value through other comprehensive income	330,049	4	295,479	3
	Shares of other comprehensive income of associates and joint ventures accounted for using equity method, components of other comprehensive income that will not be reclassified to profit or loss	653,336	8	454,594	4
8320	Less: Income tax related to components of other comprehensive income that will not be reclassified to profit or loss	1,616	-	425	-
8349	Components of other comprehensive income that will not be reclassified to profit or loss	989,846	12	751,774	7
8360	Components of other comprehensive income (loss) that will be reclassified to profit or loss
8361	Exchange differences on translation	(13,332)	-	42,452	-
8370	Shares of other comprehensive income (loss) of associates and joint ventures accounted for using equity method, components of other comprehensive income that will be reclassified to profit or loss	(3,159)	-	5,497	-
8399	Less: Income tax related to components of other comprehensive income that will be reclassified to profit or loss	-	-	-	-
	Components of other comprehensive income (loss) that will be reclassified to profit or loss	(16,491)	-	47,949	-
8300	Other comprehensive income, net	973,355	12	799,723	7
8500	Comprehensive income	249,805	3	416,116	4
	Loss attributable to:
8610	Owners of parent	(724,616)	(9)	(380,846)	(3)
8620	Non-controlling interests	1,066	-	(2,761)	-
		(723,550)	(9)	(383,607)	(3)
	Comprehensive income attributable to:
8710	Owners of parent	248,575	3	410,436	4
8720	Non-controlling interests	1,230	-	5,680	-
		249,805	3	416,116	4
	Loss per share (note 6(w))
	Basic loss per share	$	(1.37)		(0.72)
	Diluted loss per share	$	(1.37)		(0.72)

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	Equity attributable to owners of parent
	Retained earnings						Other equity interest			Non-controlling interests
	Ordinary shares	Capital surplus	Legal reserve	Special reserve	Unappropriated retained earnings	Total	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) on financial assets measured at fair value through other comprehensive income	Total	Total equity attributable to owners of parent	Total equity attributable to owners of total
Balance at January 1, 2024	$ 5,278,698	75,728	639,287	223,663	(45,013)	817,937	(8,216)	763,338	755,122	6,927,485	255,588	7,183,073
Appropriation and distribution of retained earnings:Reversal of special reserve	-	-	-	(214,852)	214,852	-	-	-	-	-	-	-
Changes in equity of associates and joint ventures accounted for using equity method	-	1,070	-	-	(55)	(55)	-	-	-	1,015	-	1,015
Changes in ownership interests in subsidiaries	-	52,865	-	-	-	-	-	-	-	52,865	(95,822)	(42,957)
Associates disposal of investments in equity instruments designated at fair value through other comprehensive income	-	-	-	-	254,447	254,447	-	(254,447)	(254,447)	-	-	-
Net loss	-	-	-	-	(380,846)	(380,846)	-	-	-	(380,846)	(2,761)	(383,607)
Other comprehensive income	-	-	-	-	1,487	1,487	39,724	750,071	789,795	791,282	8,441	799,723
Total comprehensive income	-	-	-	-	(379,359)	(379,359)	39,724	750,071	789,795	410,436	5,680	416,116
Distribution cash dividend by subsidiaries to non-controlling interests	-	-	-	-	-	-	-	-	-	-	(33,363)	(33,363)
Changes in non-controlling interest	-	-	-	-	-	-	-	-	-	-	(5,882)	(5,882)
Balance at December 31, 2024	5,278,698	129,663	639,287	8,811	44,872	692,970	31,508	1,258,962	1,290,470	7,391,801	126,201	7,518,002
Appropriation and distribution of retained earnings:Changes in ownership interests in subsidiaries	-	(5,343)	-	-	(104,998)	(104,998)	(1,544)	(133,473)	(135,017)	(245,358)	-	(245,358)
Disposal of investments in equity instruments designated at fair value through other comprehensive income	-	-	-	-	(3,395)	(3,395)	-	3,395	3,395	-	-	-
Associates disposal of investments in equity instruments designated at fair value through other comprehensive income	-	-	-	-	104,760	104,760	-	(104,760)	(104,760)	-	-	-
Recovery of expired unclaimed dividends	-	5,519	-	-	-	-	-	-	-	5,519	-	5,519
Net income (loss)	-	-	-	-	(724,616)	(724,616)	-	-	-	(724,616)	1,066	(723,550)
Other comprehensive income	-	-	-	-	6,299	6,299	(16,488)	983,380	966,892	973,191	164	973,355
Total comprehensive income	-	-	-	-	(718,317)	(718,317)	(16,488)	983,380	966,892	248,575	1,230	249,805
Distribution cash dividend by subsidiaries to non-controlling interests	-	-	-	-	-	-	-	-	-	-	(1)	(1)
Changes in non-controlling interests	-	-	-	-	-	-	-	-	-	-	(31)	(31)
Balance at December 31, 2025	$ 5,278,698	129,839	639,287	8,811	(677,078)	(28,980)	13,476	2,007,504	2,020,980	7,400,537	127,399	7,527,936

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash flows from operating activities:
Loss before tax	$ (763,988)	(482,480)
Adjustments:
Adjustments to reconcile loss
Depreciation expense	268,498	274,235
Amortization expense	1,237	1,665
Expected credit impairment loss	22	17
Interest expense	26,434	22,691
Interest income	(8,856)	(16,468)
Dividend income	(15,046)	(19,003)
Share of loss of associates and joint ventures accounted for using equity method	49,476	45,988
Property, plant and equipment transferred to expense	25	-
Loss on disposal of property, plant and equipment	-	70
(Gain) loss on disposal of investments	(1,647)	2,984
Impairment loss (reversal) on non-financial assets	43	(650)
Gain on lease modification	(27)	(27)
Gain from recovery in value of inventories	(2,150)	(45,456)
Total adjustments to reconcile loss	318,009	266,046
Changes in operating assets and liabilities:
Changes in operating assets:
Financial assets mandatorily measured at fair value through profit or loss	(37,227)	10,718
Accounts receivable	479,175	(196,074)
Other receivables	(318)	744
Inventories	157,309	320,461
Prepayments	(37,488)	18,784
Other current assets	(15)	1,501
Total changes in operating assets	561,436	156,134
Changes in operating liabilities:
Current contract liabilities	(1,363)	1,761
Accounts payable	(249,189)	(241,183)
Other payables	37,191	5,555
Other current liabilities	(196)	112
Net defined benefit liabilities	(2,521)	(4,904)
Total changes in operating liabilities	(216,078)	(238,659)
Total changes in operating assets and liabilities	345,358	(82,525)

See accompanying notes to financial statements.

8-1

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

	2025	2024
Cash flows used in operations	$ (100,621)	(298,959)
Interest received	10,903	14,300
Dividends received	15,137	18,912
Interest paid	(25,599)	(22,953)
Income taxes (paid) refunded	(1,929)	1,035
Net cash flows used in operating activities	(102,109)	(287,665)
Cash flows from investing activities:
Proceeds from disposal of financial assets at fair value through other comprehensive income	26	-
Proceeds from capital reduction of financial assets at fair value through other comprehensive income	1,402	4,080
Acquisition of investments accounted for using equity method	(10,593)	-
Proceeds from disposal of investments accounted for using equity method	1,966	37,355
Increase in prepayments for investments	(11,700)	-
Acquisition of property, plant and equipment	(14,537)	(23,834)
Increase in refundable deposits	(189)	(25)
Decrease in refundable deposits	1,003	39
Decrease in other financial assets	21,660	12,346
Increase in prepayments for equipment	(1,051)	-
Decrease in other long-term investment	2,267	2,340
Dividends received	27,060	37,960
Loss of control over subsidiaries	-	(5,434)
Net cash flows from investing activities	17,314	64,827
Cash flows from financing activities:
Increase in short-term borrowings	7,228,000	7,280,000
Decrease in short-term borrowings	(7,063,000)	(7,095,000)
Repayments of long-term borrowings	(8,631)	(8,435)
Payment of lease liabilities	(5,733)	(7,071)
Recovery of expired unclaimed dividends	5,519	-
Cash dividends paid	(1)	(33,363)
Change in non-controlling interests	(31)	(42,957)
Net cash flows from financing activities	156,123	93,174
Effect of exchange rate changes on cash and cash equivalents	(561)	23,327
Net increase (decrease) in cash and cash equivalents	70,767	(106,337)
Cash and cash equivalents at beginning of period	497,755	604,092
Cash and cash equivalents at end of period	$ 568,522	497,755

See accompanying notes to financial statements.

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars, Unless Otherwise Specified)

(1) Company history

Taiwan Styrene Monomer Corp. (the “Company”) was incorporated on November 16, 1979, under the approval of Ministry of Economic Affairs, Republic of China (ROC). Registered address is 8F.-1, No.6, Sec.1, Roosevelt Rd., Taipei City. The major business activities of the Company and its subsidiaries (together referred to as the "Group" and individually as "Group entities") are the manufacture and sell of styrene monomers. Please refer to note 4(b) for related information of the Group entities' major business activities.

(2) Approval date and procedures of the consolidated financial statements

The consolidated financial statements were authorized for issue by the Board of Directors on March 9, 2026.

(3) New standards, amendments and interpretations adopted

(a) The impact of the IFRS Accounting Standards endorsed by the Financial Supervisory Commission, R.O.C. ("FSC") which have already been adopted.

The Group has initially adopted the following new amendments, which do not have a significant impact on its consolidated financial statements, from January 1, 2025:

Amendments to IAS21 “Lack of Exchangeability”

(b) The impact of IFRS Accounting Standards endorsed by the FSC but not yet effective

The Group assesses that the adoption of the following new amendments, effective for annual period beginning on January 1, 2026, would not have a significant impact on its consolidated financial statements:

IFRS 17 “Insurance Contracts” and amendments to IFRS 17 “Insurance Contracts”
Amendments to IFRS 9 and IFRS 7 “Amendments to the Classification and Measurement of Financial Instruments”
Annual Improvements to IFRS Accounting Standards—Volume 11
Amendments to IFRS 9 and IFRS 7 “Contracts Referencing Nature-dependent Electricity”

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The following new and amended standards, which may be relevant to the Group, have been issued by the International Accounting Standards Board (IASB), but have yet to be endorsed by the FSC:

Standards or Interpretations	Content of amendment	Effective date per IASB
IFRS 18 “Presentation and Disclosure in Financial Statements”	The new standard introduces three categories of income and expenses, two income statement subtotals and one single note on management performance measures. The three amendments, combined with enhanced guidance on how to disaggregate information, set the stage for better and more consistent information for users, and will affect all the entities.

• A more structured income statement: under current standards, companies use different formats to present their results, making it difficult for investors to compare financial performance across companies. The new standard promotes a more structured income statement, introducing a newly defined ‘operating profit’ subtotal and a requirement for all income and expenses to be allocated between three new distinct categories based on a company’s main business activities.

• Management performance measures (MPMs): the new standard introduces a definition for management performance measures, and requires companies to explain in a single note to the financial statements why the measure provides useful information, how it is calculated and reconcile it to an amount determined under IFRS Accounting Standards.

• Greater disaggregation of information: the new standard includes enhanced guidance on how companies group information in the financial statements. This includes guidance on whether information is included in the primary financial statements or is further disaggregated in the notes. | January 1, 2027
note: On September 25, 2025, the FSC issued a press release announcing that Taiwan will adopt IFRS 18 beginning in 2028. Entities that need to adopt the new standard earlier may do with the endorsement of the FSC. |

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group is evaluating the impact on its consolidated financial position and consolidated financial performance upon the initial adoption of the abovementioned standards or interpretations. The results thereof will be disclosed when the Group completes its evaluation.

The Group does not expect the following other new and amended standards, which have yet to be endorsed by the FSC, to have a significant impact on its consolidated financial statements:

Amendments to IFRS 10 and IAS 28 “Sale or Contribution of Assets Between an Investor and Its Associate or Joint Venture”
IFRS 19 “Subsidiaries without Public Accountability: Disclosures” and amendments to IFRS 19 “Subsidiaries without Public Accountability: Disclosures”
Amendments to IAS 21 “Translation to a Hyperinflationary Presentation Currency”

(4) Summary of material accounting policies

The significant accounting policies presented in the consolidated financial statements are summarized as follows. Except for those specifically indicated, the following accounting policies were applied consistently throughout the presented periods in the consolidated financial statements.

(a) Statement of compliance

These consolidated financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”) and the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC interpretations endorsed and issued into effect by the Financial Supervisory Commission, R.O.C..

(b) Basis of Preparation

(i) Basis of Measurement

Except for the following significant accounts, the consolidated financial statements have been prepared on a historical cost basis:

1) Financial instruments at fair value through profit or loss are measured at fair value;
2) Financial assets at fair value through other comprehensive income are measured at fair value;
3) The defined benefit liabilities are measured at the present value of the defined benefit obligation less fair value of the plan assets.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Functional and presentation currency

The functional currency of the Group is determined based on the primary economic environment in which its entities operate. The consolidated financial statements are presented in New Taiwan Dollar, which is the Group’s functional currency. All financial information presented in New Taiwan Dollar has been rounded to the nearest thousand.

(i) Principle of preparation of the consolidated financial statements

The consolidated financial statements comprised of the Company and its subsidiaries. Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

The financial statements of the subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases. Intragroup balances and transactions, and any unrealized income and expenses arising from Intragroup transactions are eliminated in preparing the consolidated financial statements. The Group attributes the profit or loss and each component of other comprehensive income to the owners of the parent and to the non-controlling interests, even if this results in the non-controlling interests having a deficit balance.

The Group prepares consolidated financial statements using uniform accounting policies for like transactions and other events in similar circumstances.

Changes in the Group’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received will be recognized directly in equity, and the Group will attribute it to the owners of the parent.

When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related non-controlling interests. Any interest retained in the former subsidiary is measured at fair value when control is lost, with the resulting gain or loss being recognized in profit or loss. The Group recognizes the difference between (i) the fair value of the consideration received as well as any investment retained in the former subsidiary at its fair value at the date when control is lost; and (ii) the assets and liabilities of the subsidiary as well as any related non-controlling interests at their carrying amounts at the date when control is lost, as gain or loss in profit or loss. When the Group loses control of its subsidiary, it accounts for all amounts previously recognized in other comprehensive income in relation to that subsidiary on the same basis as would be required if it had directly disposed of the related assets or liabilities.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) List of subsidiaries in the consolidated financial statements:

Name of investor	Name of subsidiary	Principal activity	Shareholding (%)		Note
			December 31, 2025	December 31, 2024
The Company	YSIC Ltd.	General investment, residential building and industrial plant development rental business	99.99	99.99
The Company	Yuan-Shin Materials Technology Co., Ltd.	Basic chemical materials and plastic raw material manufacturing	100.00	100.00
The Company	Yangmingshan Tien Lai Resort & SPA	Hotel Industry	65.07	65.07	Note 1
YSIC Ltd.	Grand Capital Co., Ltd.	Investment	100.00	100.00
YSIC Ltd.	Tien Lai Co., Ltd.	Piping engineering	-	-	Note 2
YSIC Ltd.	Kun Shan International Ltd.	Investment	100.00	100.00	Note 4
Kun Shan International Ltd.	Kun Shan Yu-Fu Technology Education Consulting Co., Ltd.	Educational consulting, information consulting, software and data storage consultation	100.00	100.00
Kun Shan International Ltd.	Kun Shan Jia-an Technology Education Consulting Co., Ltd.	Educational consulting, information consulting, software and data storage consultation	-	-	Note 3
Yangmingshan Tien Lai Resort & SPA	Tien Lai Co., Ltd.	Piping engineering	-	-	Note 2

Note 1: The Company and YSIC Ltd. (holding 12.10% of common shares) totally hold 77.17% of common shares of Yangmingshan Tien Lai Resort & SPA.

Note 2: Tien Lai Co., Ltd. completed the cash capital increase on August 30, 2023. After the capital increase, YSIC Ltd. and Yangmingshan Tien Lai Resort & SPA collectively held 50% shares of Tien Lai Co., Ltd. The Group does not directly or indirectly hold more than half of the voting shares of Tien Lai Co., Ltd. However, since the chairman of the company was appointed by the Group and was able to obtain support of the relative majority of voting rights, the company was included in the consolidated entity. As of April 1, 2024, the Group was no longer able to obtain the support of the majority of voting rights, and after a comprehensive assessment, it was determined that control over the company was lost.

Note 3: Kun Shan Jia-an Technology Education Consulting Co., Ltd. completed the liquidation in February 2024.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Note 4: On August 16, 2024, YSIC Ltd. acquired the remaining 2,266 thousand shares of KUN SHAN INTERNATIONAL LTD. at a price of USD 0.585 per share, for a total acquisition amount of USD 1,326 thousand (equivalent to NTD 42,957 thousand). The difference between the acquisition cost and the book value of the subsidiary is recorded under capital surplus, with the amount attributable to the company’s capital surplus being $52,865 thousand. Please refer to Note 6(v) of the consolidated financial statements for the year ended December 31, 2024 for details. After the acquisition, YSIC Ltd.’s shareholding in KUN SHAN INTERNATIONAL LTD. increased to 100.00%.

(d) Foreign currencies

(i) Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of the Group entities at exchange rates at the dates of the transactions. At the end of each subsequent reporting period, monetary items denominated in foreign currencies are translated into the functional currencies using the exchange rate at that date. Non-monetary item denominated in foreign currencies that are measured at fair value are translated into the functional currencies using the exchange rate at the date that the fair value was determined. Non monetary items denominated in foreign currencies that are measured based on historical cost are translated using the exchange rate at the date of the transaction.

Exchange differences are generally recognized in profit or loss, except an investment in equity securities designated as at fair value through other comprehensive income, which are recognized in other comprehensive income.

(ii) Foreign operations

The assets and liabilities of foreign operations are translated into the presentation currency at the exchange rates at the reporting date. The income and expenses of foreign operations are translated into the presentation currency at the average exchange rate. Exchange differences are recognized in other comprehensive income.

When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as part of the gain or loss on disposal. When the Group disposes of any part of its interest in a subsidiary that includes a foreign operation, the relevant proportion of the cumulative amount is reattributed to non-controlling interest. When the Group disposes of only part of investment in an associate of joint venture that includes a foreign operation, the relevant proportion of the cumulative amount is reclassified to profit or loss.

(e) Classification of current and non-current assets and liabilities

The Group classifies the asset as current under one of the following criteria, and all other assets are classified as non-current.

(i) It is expected to be realized, or intended to be sold or consumed, in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is expected to be realized within twelve months after the reporting period; or

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

The Group classifies the liability as current under one of the following criteria, and all other liabilities are classified as non-current.

(i) It is expected to be settled in the normal operating cycle;
(ii) It is held primarily for the purpose of trading;
(iii) It is due to be settled within twelve months after the reporting period; or
(iv) The Group does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.

(f) Cash and cash equivalents

Cash comprises cash on hand and demand deposits. Cash equivalents are short term, highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Time deposits which meet the above definition and are held for the purpose of meeting short term cash commitments rather than for investment or other purposes should be recognized as cash equivalents.

(g) Financial instruments

Trade receivables are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus, for an item not at fair value through profit or loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(i) Financial assets

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

On initial recognition, a financial asset is classified as measured at: amortized cost; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

1) Financial assets measured at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:

it is held within a business model whose objective is to hold assets to collect contractual cash flows; and

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

These assets are subsequently measured at amortized cost, which is the amount at which the financial asset is measured at initial recognition, plus/minus, the cumulative amortization using the effective interest method, adjusted for any loss allowance. Interest income, foreign exchange gains and losses, as well as impairment, are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

2) Fair value through other comprehensive income (FVOCI)

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an instrument-by-instrument basis.

Equity investments at FVOCI are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.

Dividend income is recognized in profit or loss on the date on which the Group’s right to receive payment is established.

3) Fair value through profit or loss (FVTPL)

All financial assets not classified as amortized cost or FVOCI described as above (e.g. financial assets held for trading and those that are managed and whose performance is evaluated on a fair value basis) are measured at FVTPL, including derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset, which meets the requirements to be measured at amortized cost or at FVOCI, as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.

4) Impairment of financial assets

The Group recognizes loss allowances for expected credit losses (ECL) on financial assets measured at amortized cost (including cash and cash equivalents, trade receivables, other receivables, refundable deposits and other financial assets).

The Group measures loss allowances at an amount equal to lifetime expected credit loss (ECL), except for the following which are measured as 12-month ECL:

debt securities that are determined to have low credit risk at the reporting date; and
other debt securities and bank balances for which credit risk (i.e. the risk of default occurring over the expected life of the financial instrument) has not increased significantly since initial recognition.

Loss allowance for trade receivables is always measured at an amount equal to lifetime ECL.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECL, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis based on the Group’s historical experience and informed credit assessment as well as forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when the financial asset is more than 90 days past due or the debtor is unlikely to pay its credit obligations to the Group in full.

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

12 month ECL are the portion of ECL that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months).

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the Group in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset.

At each reporting date, the Group assesses whether financial assets carried at amortized cost are credit impaired. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit impaired includes the following observable data:

significant financial difficulty of the borrower or issuer;
a breach of contract such as a default;
the lender of the borrower, for economic or contractual reasons relating to the borrower's financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
it is probable that the borrower will enter bankruptcy or other financial reorganization; or
the disappearance of an active market for a security because of financial difficulties.

Loss allowances for financial assets measured at amortized cost are deducted from the gross carrying amount of the assets.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

5) Derecognition of financial assets

The Group derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognized in its statement of balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognized.

(ii) Financial liabilities and equity instruments

1) Classification of debt or equity

Debt and equity instruments issued by the Group are classified as financial liabilities or equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.

2) Equity instrument

An equity instrument is any contract that evidences residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued are recognized as the amount of consideration received, less the direct cost of issuing.

3) Treasury shares

When shares recognized as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognized as a deduction from equity.

Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus or deficit on the transaction is recognized in capital surplus or retained earnings (if the capital surplus is not sufficient to be written down).

4) Financial liabilities

Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as FVTPL if it is classified as held for trading or it is designated as such on initial recognition.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.

5) Derecognition of financial liabilities

The Group derecognizes a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognizes a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognized at fair value.

On derecognition of a financial liability, the difference between the carrying amount of a financial liability extinguished and the consideration paid (including any noncash assets transferred or liabilities assumed) is recognized in profit or loss.

6) Offsetting of financial assets and liabilities

Financial assets and financial liabilities are offset and the net amount presented in the statement of balance sheet when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.

(h) Inventories

Inventories are measured at the lower of cost and net realizable value. The costs of inventories are calculated using the weighted average method, and includes expenditure incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their present location and condition. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs incurred upon completion and selling expenses.

(i) Investments in associates

Associates are those entities in which the Group has significant influence, but not control or joint control, over their financial and operating policies. Investments in associates are accounted for using the equity method and are recognized initially at cost. The cost of the investment includes transaction costs. The carrying amount of the investment in associates includes goodwill arising from the acquisition less any accumulated impairment losses.

The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of those associates, after adjustments to align their accounting policies with those of the Group, from the date on which significant influence commences until the date on which significant influence ceases. The Group recognizes any changes of its proportionate share in the investee within capital surplus, when an associate’s equity changes due to reasons other than profit and loss or comprehensive income, which did not result in changes in actual proportionate share.

Gains and losses resulting from transactions between the Group and an associate are recognized only to the extent of unrelated Group’s interests in the associate.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

When the Group’s share of losses of an associate equals or exceeds its interest in associates, it discontinues recognizing its share of further losses. After the recognized interest is reduced to zero, additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group discontinues the use of the equity method and measures the retained interest at fair value from the date when its investment ceases to be an associate. The difference between the fair value of retained interest and proceeds from disposing, and the carrying amount of the investment at the date the equity method was discontinued is recognized in profit or loss. The Group accounts for all the amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would have been required if the associates had directly disposed of the related assets or liabilities. If a gain or loss previously recognized in other comprehensive income would be reclassified to profit or loss (or retained earnings) on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (or retained earnings) when the equity method is discontinued. If the Group’s ownership interest in an associate is reduced while it continues to apply the equity method, the Group reclassifies the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest to profit or loss.

When the Group subscribes to additional shares in an associate at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment will differ from the amount of the Group’s proportionate interest in the net assets of the associate. The Group records such a difference as an adjustment to investments, with the corresponding amount charged or credited to capital surplus. The aforesaid adjustment should first be adjusted under capital surplus. If the capital surplus resulting from changes in ownership interest is not sufficient, the remaining difference is debited to retained earnings. If the Group’s ownership interest is reduced due to the additional subscription to the shares of the associate by other investors, the proportionate amount of the gains or losses previously recognized in other comprehensive income in relation to that associate will be reclassified to profit or loss on the same basis as would be required if the associate had directly disposed of the related assets or liabilities.

(j) Investment properties

Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services, or for administrative purposes. Investment property is measured at cost on initial recognition, and subsequently at cost, less accumulated depreciation and accumulated impairment losses. Depreciation expense is calculated based on the depreciation method, useful life, and residual value which are the same as those adopted for property, plant and equipment.

Any gain or loss on disposal of an investment property (calculated as the difference between the net proceeds from disposal and the carrying amount) is recognized in profit or loss.

Rental income from investment property is recognized on a straight-line basis over the term of the lease. Lease incentives granted are recognized as an integral part of the total rental income, over the term of the lease.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(k) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost, which includes capitalized borrowing costs, less accumulated depreciation and any accumulated impairment losses.

If significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Any gain or loss on disposal of an item of property, plant and equipment is recognized in profit or loss.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

(iii) Depreciation

Depreciation is calculated on the cost of an asset less its residual value and is recognized in profit or loss on a straight-line basis over the estimated useful lives of each component of an item of property, plant and equipment.

Land is not depreciated.

The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

1) Land improvements: 4~41 years
2) Buildings and structures: 3~60 years
3) Machineries and equipment: 1~21 years
4) Transportation equipment: 3~6 years
5) Other equipment: 1~20 years

Depreciation methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(l) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(i) As a lessee

The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be reliably determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
payments for purchase or termination options that are reasonably certain to be exercised.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when:

there is a change in future lease payments arising from the change in an index or rate; or
there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee; or
there is a change in the lease term resulting from a change of its assessment on whether it will exercise an option to purchase the underlying asset; or
there is a change in its assessment on whether it will exercise an extension or termination option; or
there is any lease modification

When the lease liability is remeasured, other than lease modifications, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or in profit and loss if the carrying amount of the right-of-use asset has been reduced to zero.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

When the lease liability is remeasured to reflect the partial or full termination of the lease for lease modifications that decrease the scope of the lease, the Group accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognize in profit or loss any gain or loss relating to the partial or full termination of the lease.

The Group presents right-of-use assets that do not meet the definition of investment property and lease liabilities as a separate line item respectively in the statement of financial position.

The Group has elected not to recognize right-of-use assets and lease liabilities for short-term leases of transportation and office equipment that have a lease term of 12 months or less and leases of low-value assets. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

When the Group acts as a lessor, it determines at lease commencement whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then the lease is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

(m) Intangible assets

(i) Recognition and measurement

Expenditure on research activities is recognized in profit or loss as incurred.

Other intangible assets, that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortization and any accumulated impairment losses.

(ii) Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

(iii) Amortization

Amortization is calculated over the cost of the asset, less its residual value, and is recognized in profit or loss on a straight-line basis over the estimated useful lives of intangible assets from the date that they are available for use.

The estimated useful lives for current and comparative periods are as follows:

Technical royalty: 1~15 years
Computer software: 1~5 years

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Amortization methods, useful lives and residual values are reviewed at each annual reporting date and adjusted if appropriate.

(n) Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cash-generating units (CGUs).

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss. For non-financial assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(o) Revenue recognition

(i) Revenue from contract with customers

Revenue is measured based on the consideration to which the Group expects to be entitled in exchange for transferring goods or services to a customer. The Group recognizes revenue when it satisfies a performance obligation by transferring control of a good or a service to a customer. The accounting policies for the Group’s main types of revenue are explained below.

1) Sale of goods

The Group manufactures and sells styrene monomer. The Group recognizes revenue when control of the products has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to sell the products, and there is no unfulfilled obligation that could affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped to the specific location, the risks of obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in accordance with the sales contract, the acceptance provisions have lapsed, or the Group has objective evidence that all criteria for acceptance have been satisfied. A receivable is recognized when the goods are delivered as this is the point in time that the Group has a right to an amount of consideration that is unconditional.

2) Hospitality service

The Group provides services such as hospitality. Revenue is recognized in the accounting period in which the goods are provided or services are rendered.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

3) Financing components

The Group does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Group does not adjust any of the transaction prices for the time value of money.

(p) Government grants

The Group recognizes an unconditional government grant related to operation in profit or loss as other income when the grant becomes receivable. Other government grants related to assets are initially recognized as deferred income at fair value if there is reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant; they are then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses or losses incurred are recognized in profit or loss on a systematic basis in the periods in which the expenses or losses are recognized.

(q) Employee benefits

(i) Defined contribution plan

Obligations for contributions to defined contribution plans are expensed as the related service is provided.

(ii) Defined benefit plan

The Group’s net obligation in respect of defined benefit plans is calculated separately by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic benefits, consideration is given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized immediately in other comprehensive income, and accumulated in retained earnings within equity. The Group determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset). Net interest expense and other expenses related to defined benefit plans are recognized in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Group recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognized for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(r) Income taxes

Income tax expenses include both current taxes and deferred taxes. Except for expenses related to business combinations or recognized directly in equity or other comprehensive income, all current and deferred taxes shall be recognized in profit or loss.

Current taxes comprise the expected tax payables or receivables on the taxable profits (losses) for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax payables or receivables are the best estimate of the tax amount expected to be paid or received. It is measured using tax rates enacted or substantively enacted at the reporting date.

Deferred taxes arise due to temporary differences between the carrying amounts of assets and liabilities at the reporting date and their respective tax bases. Deferred taxes are recognized except for the following:

(i) temporary differences on the initial recognition of assets and liabilities in a transaction that is not a business combination and at the time of the transactions (i) affects neither accounting nor taxable profits (losses) and (ii) does not give rise to equal taxable and deductible temporary differences;

(ii) temporary differences related to investments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and

(iii) taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax assets are recognized for the carry forward of unused tax losses, unused tax credits, and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realized; such reductions are reversed when the probability of future tax improves.

Deferred taxes are measured at tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if the following criteria are met:

(i) the Group has a legally enforceable right to set off current tax assets against current tax liabilities; and

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority on either:

1) the same taxable entity; or
2) different taxable entities which intend to settle current tax assets and liabilities on a net basis, or to realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

(s) Earnings per share

The Group discloses the Company’s basic and diluted earnings per share attributable to ordinary shareholders of the Company. Basic earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding. Diluted earnings per share is calculated as the profit attributable to ordinary shareholders of the Company divided by the weighted average number of ordinary shares outstanding after adjustment for the effects of all potentially dilutive ordinary shares.

(t) Operating segments

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group). Operating results of the operating segment are regularly reviewed by the Group’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Each operating segment consists of standalone financial information.

(5) Significant accounting assumptions and judgments, and major sources of estimation uncertainty

In preparing these consolidated financial statements, management has made judgments and estimates, about the future, including climate-related risks and opportunities, that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis and are consistent with the Group’s risk management and climate-related commitments where appropriate. Revisions to estimates are recognized prospectively in the period of the change and future periods.

A key area involving significant judgment that has a material impact on the amounts recognized in these consolidated financial statements is the assessment of whether the Group has substantive control over an investee. The Group holds 40.00% of the voting shares of Universal Investments Limited. Although the remaining 60.00% shareholding is not concentrated among specific shareholders, the Group is unable to obtain a majority of board seats nor secure majority voting rights at shareholders’ meetings. Accordingly, the Group concludes that it has significant influence, rather than control, over Universal Investments Limited.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Information about judgments made in applying accounting policies that have the most significant effects on the amounts recognized in the consolidated financial statements is as follows:

(a) Impairment of non-financial assets

In assessing impairment, the Group must rely on subjective judgments and use asset usage patterns to determine the fair value, independent cash flows, the useful life of assets, and possible future income and expenses of a specific asset group. Estimated changes brought by economic environment or corporate strategies may result in impairment or reversal of recognized impairment losses in the future.

(b) Recognition of deferred tax assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires management's subjective judgment and estimate, including the future revenue growth and profitability, tax holidays, the amount of tax credits that can be utilized and feasible tax planning strategies. Changes in the economic environment, industry trends, and relevant laws and regulations may result in adjustments to the deferred tax assets. Refer to note 6(u) for further description of the recognition of deferred tax assets.

If the fair value of financial assets recognized in balance sheets cannot be reached from the active market, the Group will measure the fair value of financial assets based on valuation technique, including market approach and asset-based approach. The measurement of fair value involves in assumptions, estimations and judgements, such as the selection of comparable company, comparable transaction or price of equity transaction, liquidity discount and valuation multiplier. The fluctuation of assumption used in measurements of fair value may influence the fair value of financial instruments recognized. Please refer to note 6(g) and (aa) for relevant explanation.

(6) Explanation of significant accounts

(a) Cash and cash equivalents

	December 31, 2025	December 31, 2024
Cash on hand	$ 319	767
Petty cash	873	910
Deposits in bank	449,475	223,044
Times deposits
Times deposits due within three months	117,855	273,034
	$ 568,522	497,755

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(b) Financial assets and liabilities at fair value through profit or loss

	December 31, 2025	December 31, 2024
Mandatorily measured at fair value through profit or loss:
Current:
Listed stocks	$ 300,336	259,459
Funds	4,086	4,297
Non-current:
Listed stocks	3,528	6,967
Total	$ 307,950	270,723

	December 31, 2025	December 31, 2024
Accounts receivable	$ 536,704	1,015,970
Less: loss allowance	(73)	(51)
	$ 536,631	1,015,919

The loss allowance provision was determined as follows:

	December 31, 2025
	Gross carrying amount	Weighted-average loss rate	Loss allowance provision
Current	$ 532,091	0.005%	27
1 to 90 days past due	4,613	1%	46
	$ 536,704		73
	December 31, 2024
	Gross carrying amount	Weighted-average loss rate	Loss allowance provision
Current	$ 1,015,970	0.005%	51

The movements in the allowance for accounts receivable were as follows:

	2025	2024
Beginning balance	$ 51	1,974
Impairment losses reversed recognized	22	17
Effect of loss of control of subsidiaries	-	(1,940)
Ending balance	$ 73	51

For other credit risk information, please refer to note 6(aa).

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(d) Inventories

	December 31, 2025	December 31, 2024
Merchandise inventory	$ 1,577	1,456
Finished goods	138,149	108,319
By-product	4,668	6,361
Semi-finished products	22,776	68,347
Work in progress	31,401	68,684
Raw materials	53,232	108,574
Supplies	49,723	94,944
	$ 301,526	456,685

Except for the transfer of inventory to operating costs from sales, other items directly included in operating costs are as follows:

	2025	2024
Gain from recovery in value of inventories	$ (2,150)	(45,456)

None of the inventories of the Group was pledged as collateral on December 31, 2025 and 2024.

(e) Prepayments

	December 31, 2025	December 31, 2024
Supplies	$ 111,103	109,506
Overpaid sales tax	95,270	82,966
Others	20,294	10,261
	$ 226,667	202,733

(f) Other current financial assets

	December 31, 2025	December 31, 2024
Time deposits due over three months	$ -	20,000
Restricted deposits in bank	12,200	13,860
	$ 12,200	33,860

The above assets of the Group had been pledged as collateral of performance guarantee; please refer to note 8.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(g) Non-current financial assets at fair value through other comprehensive income

	December 31, 2025	December 31, 2024
Equity investments:
Domestic non-listed stocks	$ 1,450,286	1,150,797
Foreign non-listed equity investments	392,921	375,460
	$ 1,843,207	1,526,257

(i) The Group designated the investments shown above at fair value through other comprehensive income because these equity securities represent those investments that the Group intends to hold for long term strategic purposes not for trading purposes. During the years ended 2025 and 2024, the dividends of $7,385 thousand and $12,109 thousand were recognized.

(ii) In July 2025, the Group determined to dispose its shares of Excellence Electronic Co., Ltd., which was classified as a non-current equity investment designated at FVOCI. The shares disposed had a fair value of $12 thousand and the Group realized a loss of $4 thousand, which was recognized as other comprehensive income, and thereafter, was reclassified to retained earnings.

(iii) In December 2025, the Group derecognized its share held in Vxis Technology Corp., as a result of the completion of the liquidation. The liquidation proceeds amounted to $14 thousand and the Group realized a loss of $3,391 thousand, which was recognized as other comprehensive income, and thereafter, was reclassified to retained earnings.

(iv) For market risk, please refer to note 6(aa).

(v) None of the above-mentioned financial assets had been pledged as collateral as of December 31, 2025 and 2024.

(h) Investments accounted for using equity method

(i) Associates

Associates of the Group consisted of the following:

	December 31, 2025		December 31, 2024
	Amount	Share-holding (%)	Amount	Share-holding (%)
Grand Cathay Venture Capital Co., Ltd.	$ 518,815	25.00	588,585	25.00
Wonderland Enterprise Co., Ltd. (Note 3)	1,950,752	29.63	1,551,212	37.04
Functional Coating System Technologies Co., Ltd.	33,631	36.05	30,244	34.88
Universal Investments Limited	15,598	40.00	17,500	40.00
Tien Lai Co., Ltd. (Note 1)	6,941	50.00	6,313	50.00
Hung Kang Co., Ltd. (Note 2)	6,114	35.00	-	-
	$ 2,531,851		2,193,854

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Note 1: On April 1, 2024, the Group lost control over Tien Lai Co., Ltd. and changed its investment in Tien Lai Co., Ltd. to the investment accounted for using the equity method.

Note 2: On August 12, 2025, the Group acquired 45% of the equity interest in Hung Kang Co., Ltd for $8,850 thousand and thereby obtained significant influence over the company. Subsequently, on December 15, 2025, the Group disposed of a 10% equity interest in Hung Kang Co., Ltd., resulting in a decrease in its shareholding to 35%. For details of the disposal, please refer to note 7.

Note 3: On September 24, 2025, Wonderland Enterprise Co., Ltd carried out a cash capital increase of $200,000 thousand. The Group did not participate in the capital increase in proportion to its original shareholding, resulting in its ownership decreasing to 29.63%. Consequently, the Group reduced capital surplus by $7,815 thousand and retained earnings by $238,471 thousand, respectively, to reflect the decrease in ownership. In addition, previously recognized unrealized gains on financial assets measured at fair value through other comprehensive income and exchange differences related to the foreign operations were reclassified in proportion to the decrease. $133,473 thousand was reclassified to retained earnings and $1,544 thousand was reclassified to profit or loss.

On April 1, 2024, the Group disposed of all its shares in Globaltop Technology Co., Inc.. The disposal price was $37,355 thousand, and the loss from the disposal was $2,984 thousand, which was recorded under other gains and losses in the consolidated comprehensive income statement. Additionally, the exchange difference of $552 thousand related to the company, which has already been recognized under other comprehensive income, was reclassified to exchange losses.

The Group’s financial information on investments accounted for using the equity method that are significant was as follows:

1) Grand Cathay Venture Capital Co., Ltd.

	December 31, 2025	December 31, 2024
Current assets	$ 1,667,077	1,990,506
Non-current assets	436,486	391,301
Current liabilities	(28,306)	(27,467)
Net assets	$ 2,075,257	2,354,340
	2025	2024
Operating revenue	198,397	205,083
Net loss	(27,574)	(128,893)
Other comprehensive income	(143,989)	(649,277)
Total comprehensive income	(171,563)	(778,170)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	2025	2024
Beginning shares of net assets of associates	$ 588,585	821,087
Comprehensive income attributable to the Group	(42,890)	(194,542)
Dividends received from associates	(26,880)	(37,960)
Ending shares of net assets of associates	$ 518,815	588,585

2) Wonderland Enterprise Co., Ltd.

	December 31, 2025	December 31, 2024
Current assets	$ 43,194	51,029
Non-current assets	6,564,247	4,195,016
Current liabilities	(23,429)	(57,710)
Non-current liabilities	(216)	(60)
Net assets	$ 6,583,796	4,188,275
	2025	2024
Operating revenue	-	5,700
Net loss	(144,030)	(52,591)
Other comprehensive income	2,231,207	1,678,366
Total comprehensive income	2,087,177	1,625,775
	2025	2024
Beginning shares of net assets of associates	$ 1,551,212	948,059
Comprehensive income attributable to the Group	643,354	602,138
Changes in ownership of interests in investments accounted for using equity method	(243,814)	1,015
Ending shares of net assets of associates	$ 1,950,752	1,551,212

3) The Group's financial information for investments accounted for using equity method that are individually insignificant was as follows:

	2025	2024
Attributable to the Group:
Net income	$ 476	5,713
Other comprehensive income	(800)	793
Total comprehensive income	$ (324)	6,506

None of the investments using equity method of the Group was pledged as collateral as of December 31, 2025 and 2024.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(i) Loss of control over subsidiaries

The Group, on April 1, 2024, determined that as it was no longer able to obtain the support of the majority voting rights, after a comprehensive evaluation, concluded that it lost control over Tien Lai Co., Ltd. and since that date, this investment was changed to the investment accounted for using the equity method. For related information, please refer to note 6(h).

As of March 31, 2024, the carrying amounts of assets and liabilities of Tien Lai Co., Ltd. were as follows:

Cash and cash equivalents $ 5,434
Accounts receivable, net 1,393
Other current assets 9
Property, plant and equipment 4,985
Other non-current assets 1,124
Accounts payable and other payables (920)
Other current liabilities (251)
Other non-current liabilities (10)
Carrying amount of net assets $ 11,764

(j) Property, plant and equipment

The movements of the property, plant and equipment of the Group were as follows:

	Land	Land improvements	Buildings and structures	Machinery and equipment	Transportation equipment	Other equipment	Construction in progress	Total
Cost:
Balance as of January 1, 2025	$ 1,576,740	8,462	621,630	7,493,505	2,983	928,521	4,941	10,636,782
Additions	-	-	-	6,519	850	3,583	2,607	13,559
Disposals	-	-	-	(27,091)	-	(2,517)	-	(29,608)
Reclassification	-	-	-	6,311	-	991	(4,942)	2,360
Balance as of December 31, 2025	$ 1,576,740	8,462	621,630	7,479,244	3,833	930,578	2,686	10,623,093
Balance as of January 1, 2024	$ 1,581,040	8,462	622,330	7,528,153	2,983	926,781	64,019	10,733,768
Additions	-	-	-	7,381	-	9,897	2,730	20,008
Disposals	-	-	-	(88,140)	-	(1,210)	-	(89,350)
Reclassification	-	-	-	46,111	-	-	(61,808)	(15,697)
Effect of loss of control over subsidiaries	(4,300)	-	(700)	-	-	(6,947)	-	(11,947)
Balance as of December 31, 2024	$ 1,576,740	8,462	621,630	7,493,505	2,983	928,521	4,941	10,636,782
Accumulated depreciation:
Balance as of January 1, 2025	$ -	8,462	287,579	6,458,444	2,251	667,251	-	7,423,987
Depreciation	-	-	14,439	198,291	192	49,489	-	262,411
Disposals	-	-	-	(27,091)	-	(2,517)	-	(29,608)
Balance as of December 31, 2025	$ -	8,462	302,018	6,629,644	2,443	714,223	-	7,656,790

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	Land	Land improvements	Buildings and structures	Machinery and equipment	Transportation equipment	Other equipment	Construction in progress	Total
Balance as of January 1, 2024	$ -	8,446	273,146	6,345,778	2,135	624,187	-	7,253,692
Depreciation	-	16	14,448	200,806	116	51,151	-	266,537
Disposals	-	-	-	(88,140)	-	(1,140)	-	(89,280)
Effect of loss of control over subsidiaries	-	-	(15)	-	-	(6,947)	-	(6,962)
Balance as of December 31, 2024	$ -	8,462	287,579	6,458,444	2,251	667,251	-	7,423,987
Carrying amount:
Balance as of December 31, 2025	$ 1,576,740	-	319,612	849,600	1,390	216,355	2,606	2,966,303
Balance as of January 1, 2024	$ 1,581,840	16	349,184	1,182,375	848	302,594	64,019	3,480,076
Balance as of December 31, 2024	$ 1,576,740	-	334,051	1,035,061	732	261,270	4,941	3,212,795

As of December 31, 2025 and 2024, the property, plant and equipment of the Group had been pledged as collateral for loans; please refer to note 8.

(k) Right-of-use assets

The cost and accumulated depreciation of leased land, buildings and structures, transportation equipment, and office equipment of the Group were as follows:

	Land	Buildings and structures	Transportation equipment	Office equipment	Total
Cost:
Balance as of January 1, 2025	$ 4,412	828	12,356	9,341	26,937
Additions	-	820	2,714	-	3,534
Lease modification	1,029	-	-	-	1,029
Write-off	-	(828)	(11,571)	-	(12,399)
Balance as of December 31, 2025	$ 5,441	820	3,499	9,341	19,101
Balance as of January 1, 2024	$ 4,290	828	12,356	14,155	31,629
Lease modification	122	-	-	-	122
Write-off	-	-	-	(4,814)	(4,814)
Balance as of December 31, 2024	$ 4,412	828	12,356	9,341	26,937
Accumulated depreciation:
Balance as of January 1, 2025	$ 752	448	9,580	3,674	14,454
Depreciation	293	414	3,167	1,868	5,742
Write-off	-	(828)	(11,571)	-	(12,399)
Balance as of December 31, 2025	1,045	34	1,176	5,542	7,797
Balance as of January 1, 2024	$ 523	34	5,461	5,898	11,916
Depreciation	229	414	4,119	2,590	7,352
Write-off	-	-	-	(4,814)	(4,814)
Balance as of December 31, 2024	$ 752	448	9,580	3,674	14,454
Carrying amount:
Balance as of December 31, 2025	$ 4,396	786	2,323	3,799	11,304
Balance as of January 1, 2024	$ 3,767	794	6,895	8,257	19,713
Balance as of December 31, 2024	$ 3,660	380	2,776	5,667	12,483

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(1) Investment property

	Land	Buildings and structures	Total
Cost:
Balance as of December 31, 2025
(Balance as of January 1, 2025)	$ 46,101	17,625	63,726
Balance as of December 31, 2024
(Balance as of January 1, 2024)	$ 46,101	17,625	63,726
Accumulated depreciation:
Balance as of January 1, 2025	$ -	7,776	7,776
Depreciation	-	345	345
Balance as of December 31, 2025	$ -	8,121	8,121
Balance as of January 1, 2024	$ -	7,430	7,430
Depreciation	-	346	346
Balance as of December 31, 2024	$ -	7,776	7,776
Carrying amount:
Balance as of December 31, 2025	$ 46,101	9,504	55,605
Balance as of January 1, 2024	$ 46,101	10,195	56,296
Balance as of December 31, 2024	$ 46,101	9,849	55,950
Fair value:
Balance as of December 31, 2025			$ 110,560
Balance as of January 1, 2024			$ 82,666
Balance as of December 31, 2024			$ 100,431

The fair value of the Group’s investment property was determined by reference to actual transaction prices of comparable properties in nearby areas.

None of the Group’s investment property was pledged as collateral as of December 31, 2025 and 2024.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(m) Intangible assets

The movements of intangible assets of the Group were as follows:

	Technical royalty	Computer software	Total
Cost:
Balance as of January 1, 2025	$ 22,242	2,751	24,993
Write-off	-	(915)	(915)
Balance as of December 31, 2025	$ 22,242	1,836	24,078
Balance as of December 31, 2024
(Balance as of January 1, 2024)	$ 22,242	2,751	24,993
Accumulated amortization:
Balance as of January 1, 2025	$ 18,993	2,269	21,262
Amortization	975	262	1,237
Write-off	-	(915)	(915)
Balance as of December 31, 2025	$ 19,968	1,616	21,584
Balance as of January 1, 2024	$ 18,018	1,579	19,597
Amortization	975	690	1,665
Balance as of December 31, 2024	$ 18,993	2,269	21,262
Carrying value:
Balance as of December 31, 2025	$ 2,274	220	2,494
Balance as of January 1, 2024	$ 4,224	1,172	5,396
Balance as of December 31, 2024	$ 3,249	482	3,731

(n) Other long-term investment, net

	December 31, 2025	December 31, 2024
Construction and operation of student dormitory	$ 22,179	24,986

The period of rights of investment in construction and operation of student dormitory is 30 years. The subsidy and management income will be recovered annually according to the agreement to July 31, 2035.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(o) Other non-current assets

	December 31, 2025	December 31, 2024
Long-term prepaid rents	$ 39,832	19,736
Net defined benefit assets	8,741	7,736
	$ 48,573	27,472

(p) Short-term borrowings

Short-term borrowings of the Group were as follows:

	December 31, 2025	December 31, 2024
Unsecured bank loans	$ 550,000	400,000
Secured bank loans	907,500	892,500
Total	$ 1,457,500	1,292,500
Unused credit lines	$ 740,500	744,507
Range of interest rate	1.87%~2.125%	1.85%~2.125%

For the collateral for short-term borrowings, please refer to note 8.

(q) Other payables

Other payables of the Group were as follows:

	December 31, 2025	December 31, 2024
Securities settlement payable	$ 34,549	-
Accrued payroll	30,645	29,588
Utilities payable	19,694	22,946
Compensated absences	14,431	14,588
Payables on equipment	4,202	5,180
Accrued employee bonus	516	800
Dividends payable	452	452
Accrued directors’ remuneration	213	179
Other payables — other	48,629	42,550
Total	$ 153,331	116,283

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(r) Long-term borrowings

Long-term borrowings of the Group were as follows:

	December 31, 2025
	Currency	Range of interest rate	Due year	Amount
Secured bank loans	NTD	2.385%	2030	$ 43,439
Less: current portion				8,839
Total				$ 34,600
Unused credit lines				$ 44,261
	December 31, 2024
	Currency	Range of interest rate	Due year	Amount
Secured bank loans	NTD	2.385%	2030	$ 52,070
Less: current portion				8,631
Total				$ 43,439
Unused credit lines				$ 35,630

For the collateral for long-term borrowings, please refer to note 8.

(s) Lease liabilities

Lease liabilities of the Group were as follows:

	December 31, 2025	December 31, 2024
Current	$ 3,651	5,221
Non-current	$ 7,292	6,919

For the maturity analysis, please refer to note 6(aa).

The amounts recognized in profit or loss were as follows:

	2025	2024
Interest on lease liabilities	298	333
Expenses relating to short-term leases	772	377
Expenses relating to leases of low-value assets, excluding short-term leases of low-value assets	616	442

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amounts recognized in the statements of cash flows were as follows:

Total cash outflow for leases
$ 7,419 8,223

(t) Employee benefits

(i) Defined benefit plans

The reconciliations of defined benefit obligations and plan assets as of December 31, 2025 and 2024, were as follows:

	December 31, 2025	December 31, 2024
Present value of defined benefit obligation	$ 134,683	157,090
Fair value of plan assets	(116,365)	(127,169)
Net position	$ 18,318	29,921
Net defined benefit assets (non-current assets)	$ 8,741	7,736
Net defined benefit liabilities	$ 27,059	37,657

The Group makes defined benefit plan contributions to the pension fund account at Bank of Taiwan that provides pensions for employees upon retirement. The plans (covered by the Labor Standards Law) entitle a retired employee to receive an annual payment based on years of service and average salary for the six months prior to retirement.

1) Composition of plan assets

The Group allocates pension funds in accordance with the Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, and such funds are managed by the Bureau of Labor Funds, Ministry of Labor. With regard to the utilization of the funds, minimum earnings shall be no less than the earnings attainable from two-year time deposits with interest rates offered by local banks.

The Group's Bank of Taiwan labor pension reserve account balance amounted to $116,365 thousand as of December 31, 2025. For information on the utilization of the labor pension fund assets, including the asset allocation and yield of the fund, please refer to the website of the Bureau of Labor Funds, Ministry of Labor.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Movements in the present value of defined benefit obligation

The movements in the present value of defined benefit obligation of the Group were as follows:

	2025	2024
Defined benefit obligation at January 1	$ 157,090	197,603
Current service cost and interest cost	3,057	2,874
Net remeasurements of defined benefit liabilities
—Actuarial gains and losses arising from financial assumptions	676	(2,000)
—Actuarial gains and losses arising from experience adjustments	1,201	14,977
Benefits paid	(27,341)	(56,364)
Defined benefit obligation at December 31	$ 134,683	157,090

3) Movements in fair value of plan assets

The movements in the fair value of the defined benefit plan assets of the Group were as follows:

	2025	2024
Fair value of plan assets, January 1	$ 127,169	159,405
Interests income	2,014	1,715
Remeasurements of defined benefit assets
—Return on plan assets (excluding interest income)	9,954	15,103
Contributions	4,569	1,394
Benefits paid	(27,341)	(50,448)
Fair value of plan assets at December 31	$ 116,365	127,169

4) Expenses recognized in profit or loss

The expenses recognized in profit or loss of the Group were as follows:

	2025	2024
Current service costs	$ 700	885
Net interest on defined benefit liabilities (assets)	343	274
	$ 1,043	1,159

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Due to the absence of significant market fluctuations, major reductions, settlements, or other significant one-time events after the reporting date of the previous year, the Group adopts the pension cost measurement and disclosure for the interim period based on the actuarial determination of pension costs for December 31, 2025 and 2024.

The expenses recognized in profit or loss for the Group were as follows:

	2025	2024
Operating cost	801	867
Operating expenses	242	292
Total	1,043	1,159

5) Actuarial assumptions

Principal actuarial assumptions at the reporting date were as follows:

	2025.12.31	2024.12.31
Discount rate	1.3~1.35%	1.50%
Expected rate of increase in future salaries	1.50%~2.00%	1.50%~2.00%

The expected allocation payment to be made by the Group to the defined benefit plans, for the one-year period after the reporting date is $14,346 thousand.

The weighted-average lifetime of the defined benefit plan is 2.8~7.3 years.

6) Sensitivity analysis

If the actuarial assumptions had changed, the impact on the present value of the defined benefit obligations shall be as follows:

	Influence of defined benefit obligations
	Increase	Decrease
December 31, 2025
Discount rate (changed by 0.25%)	$ (861)	876
Future salary increase rate (changed by 1%)	3,551	(3,356)
December 31, 2024
Discount rate (changed by 0.25%)	(1,012)	1,033
Future salary increase rate (changed by 1%)	4,193	(3,951)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Reasonably possible changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown above. The method used in the sensitivity analysis is consistent with the calculation of pension liabilities in the balance sheets.

There is no change in the method and assumptions used in the preparation of sensitivity analysis for 2025 and 2024.

(ii) Defined contribution plans

The Group allocates 6% of each employee's monthly wages to the labor pension personal account at the Bureau of Labor Insurance in accordance with the provisions of the Labor Pension Act. Under these defined contribution plans, the Group allocates a fixed amount to the Bureau of Labor Insurance without additional legal or constructive obligation.

The pension costs incurred from the contributions to the Bureau of the Labor Insurance amounted to $10,730 thousand and $10,896 thousand for the years ended December 31, 2025 and 2024, respectively.

(u) Income tax

(i) Income tax benefits

The components of income tax in the years 2025 and 2024 were as follows:

	2025	2024
Current income tax expense (benefits)
Current period	$ 2,288	1,179
Adjustment for prior periods	(89)	79
	2,199	1,258
Deferred tax expense (benefits)
Origination and reversal of temporary differences	(42,657)	(100,131)
Adjustment for prior periods	20	-
	(42,637)	(100,131)
Income tax benefits	$ (40,438)	(98,873)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The amount of income tax recognized in other comprehensive income for 2025 and 2024 was as follows:

	2025	2024
Items that will not be reclassified subsequently to profit or loss:
Remeasurement from defined benefit plans	$ 1,616	425

Reconciliation of income tax and profit before tax for 2025 and 2024 is as follows:

	2025	2024
Loss before income tax	$ (763,988)	(482,480)
Income tax using the Group’s domestic tax rate	$ (152,798)	(96,496)
Effect of tax rates in foreign jurisdiction	7,073	4,966
Gain on investments for using equity method	(1,420)	(577)
Gain from securities transactions	(8,290)	(15,940)
Non-deductible expenses	2,950	705
Tax-exempt income	(3,002)	(10,084)
Recognition of previously unrecognized tax losses	(392)	(484)
Non-deductible losses	10,744	-
Current-year losses for which no deferred tax asset was recognized	99,989	12,395
Income tax adjustment for prior periods	(89)	79
Deferred income tax adjustment for prior periods	20	-
Investment loss	4,777	6,563
Total	$ (40,438)	(98,873)

(ii) Deferred income tax assets and liabilities

1) Unrecognized deferred income tax assets

The Group’s unrecognized deferred tax assets were composed of the following items:

	December 31, 2025	December 31, 2024
Loss carry forward	$ 165,441	77,858

The R.O.C. Income Tax Act allows net losses, as assessed by the tax authorities, to offset taxable income over a period of ten years for local tax reporting purposes. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Group can utilize the benefits therefrom.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

As of December 31, 2025 the information of the Group’s unused tax losses for which no deferred tax assets were recognized are as follows:

a) Unused tax loss information

Year of loss	Year of expiry	Unused amount
2016	2026	$ 12,346
2017	2027	4,600
2018	2028	6,535
2019	2029	137,475
2020	2030	136,313
2021	2031	29,365
2022	2032	625
2025	2035	499,945
		$ 827,204

2) Recognized deferred income tax assets and liabilities

Movements of recognized deferred income tax assets and liabilities for the years ended December 31, 2025 and 2024 were as follows:

Deferred tax assets:

	Allowance for inventory write-down	Defined benefit pension plans	Accumulating compensated absences	Tax loss carryforward	Others	Total
Balance at January 1, 2025	$ 3,826	7,531	2,918	434,692	-	448,967
Recognized in profit or loss	(430)	(682)	(31)	43,752	12	42,621
Recognized in other comprehensive income	-	(1,438)	-	-	-	(1,438)
Balance at December 31, 2025	$ 3,396	5,411	2,887	478,444	12	490,150
Balance at January 1, 2024	$ 12,917	8,937	3,188	324,930	123	350,095
Recognized in profit or loss	(9,091)	(1,214)	(235)	110,850	(123)	100,187
Recognized in other comprehensive income	-	(192)	-	-	-	(192)
Effect of business combination	-	-	(35)	(1,088)	-	(1,123)
Balance at December 31, 2024	$ 3,826	7,531	2,918	434,692	-	448,967

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Deferred tax liabilities:

	Land Value Increment Tax	Others	Total
Balance at January 1, 2025	$ 173,509	1,586	175,095
Recognized in profit or loss	-	(16)	(16)
Recognized in other comprehensive income	-	178	178
Balance at December 31, 2025	$ 173,509	1,748	175,257
Balance at January 1, 2024	$ 173,509	1,297	174,806
Recognized in profit or loss	-	56	56
Recognized in other comprehensive income	-	233	233
Balance at December 31, 2024	$ 173,509	1,586	175,095

The Company’s income tax return for the year 2023 had been examined by the tax authorities.

(v) Capital and other equity

(i) Ordinary shares

As of 2025 and 2024, the number of authorized ordinary shares were 9,000,000 thousand shares with par value of $10 per share. As of 2025 and 2024, of $527,870 thousand shares were issued. All issued shares were paid up upon issuance.

(ii) Capital surplus

The balances of capital surplus of the Company were as follows:

	December 31, 2025	December 31, 2024
Difference arising from subsidiary’s share price and its carrying value	$ 8,953	8,953
Changes in ownership interests in subsidiaries	79,165	79,165
Changes in equity of investments in associates using equity method	2,472	7,815
Treasury share transactions	4,430	4,430
Donation from shareholders	13	13
Recovery of expired unclaimed dividends	34,806	29,287
Total	$ 129,839	129,663

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

According to the R.O.C. Company Act, capital surplus can only be used to offset a deficit, and only the realized capital surplus can be used to increase the common stock or be distributed as cash dividends. The aforementioned realized capital surplus includes capital surplus resulting from premium on issuance of capital stock and earnings from donated assets received. According to the Regulations Governing the Offering and Issuance of Securities by Securities Issuers, capital increases by transferring capital surplus in excess of par value should not exceed 10% of the total common stock outstanding.

On August 16, 2024, YSIC Ltd. acquired the remaining 2,266 thousand shares of KUN SHAN INTERNATIONAL LTD. at a price of USD 0.585 per share, for a total acquisition amount of USD 1,326 thousand (equivalent to NTD 42,957 thousand). The difference between the acquisition cost and the book value of the subsidiary is recorded under capital surplus, with the amount attributable to the Company’s capital surplus being $52,865 thousand.

(iii) Retained earnings

The Company’s Article of Incorporation stipulates that Company’s net earnings should first be used to offset the prior years' deficits, if any, before paying any income taxes. Of the remaining balance, 10% is to be appropriated as legal reserve, and then any remaining profit together with any undistributed retained earnings shall be distributed according to the distribution plan proposed by the Board of Directors and submitted to the stockholders’ meeting for approval. In general, cash dividends shall not be less than 30% of total dividends. However, based on the need to respond to changes in the industry, major investment plans and improve the financial structure, or in the case of sudden major capital needs, the cash dividend payout rate could be adjusted to 10% to 30%. If the cash dividend is less than $0.1 per share, it will not be issued, and the stock dividend will be paid instead.

1) Special reserve

In accordance with ruling issued by the FSC, the Company is required to appropriate a special reserve in the amount equal to the sum of debit elements under other equity arising in current period. Special reserve shall be appropriated from current period net income plus items other than net income adjusted to the current year’s undistributed earnings and undistributed prior period earnings; for debit elements under other equity arising in prior periods, special reserve is appropriated from undistributed prior period earnings and is prohibited from distribution. If any of the debit elements are reversed, then the special reserve in the amount equal to the reversal may be released for earnings distribution.

2) Earnings distribution

On May 28, 2025, the shareholder's meeting resolved not to distribute the 2024 earnings. On May 31, 2024, the shareholder's meeting resolved not to distribute the 2023 earnings.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) Other equity

	Exchange differences on translation of foreign financial statements	Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	Total
Balance as of January 1, 2025	$ 31,508	1,258,962	1,290,470
Exchange differences on foreign operations	(13,329)	-	(13,329)
Exchange differences on associates and joint ventures accounted for using equity method	(3,159)	-	(3,159)
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	-	330,044	330,044
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income on associates and joint ventures accounted for using equity method	-	653,336	653,336
Cumulative losses (gains) reclassified to retained earnings on disposal of investments in equity instruments designated at fair value through other comprehensive income	-	3,395	3,395
Cumulative losses (gains) reclassified to retained earnings on associates disposal of investments in equity instruments designated at fair value through other comprehensive income	-	(104,760)	(104,760)
Changes in ownership interests in investments accounted for using equity method	(1,544)	(133,473)	(135,017)
Balance as of December 31, 2025	$ 13,476	2,007,504	2,020,980
Balance as of January 1, 2024	$ (8,216)	763,338	755,122
Exchange differences on foreign operations	34,227	-	34,227
Exchange differences on associates and joint ventures accounted for using equity method	5,497	-	5,497
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income	-	295,477	295,477
Unrealized gains (losses) from financial assets measured at fair value through other comprehensive income on associates and joint ventures accounted for using equity method	-	454,594	454,594
Cumulative losses (gains) reclassified to retained earnings on associates disposal of investments in equity instruments designated at fair value through other comprehensive income	-	(254,447)	(254,447)
Balance as of December 31, 2024	$ 31,508	1,258,962	1,290,470

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(w) Loss per share

The Group’s basic loss per share and diluted loss per share were calculated as follows:

	For the years ended December 31
	2025	2024
Loss attributable to the Company	(724,616)	(380,846)
Weighted-average number of ordinary shares outstanding	527,870	527,870
Basic and diluted losses per share (NTD)	(1.37)	(0.72)

There were no dilutive potential ordinary shares for the Group.

(x) Revenue from contracts with customers

(i) Disaggregation of revenue

	For the years ended December 31
	2025	2024
Primary geographical markets:
Asia	$ 8,602,162	11,379,517
America	18,192	10,515
Europe	23,631	12,909
Total	$ 8,643,985	11,402,941
Major products/services lines:
Commodity sales revenue	$ 8,477,879	11,243,294
Travel service revenue	158,602	151,232
Other operating revenue	7,504	8,415
Total	$ 8,643,985	11,402,941

(ii) Contract balances

	December 31, 2025	December 31, 2024	January 1, 2024
Contract liabilities-travel service contract	$ 40,677	42,641	38,923
Contract liabilities-unearned sales revenue	601	-	1,957
Total	$ 41,278	42,641	40,880

For details on accounts receivable and allowance for impairment, please refer to note 6(c).

The amount of revenue recognized for the three months and years ended 2025 and 2024, that were included in the contract liability balance at the beginning of the period were $10,061 and $11,947 thousand, respectively.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The major change in the balance of contract liabilities is the difference between the time frame in the performance obligation to be satisfied and the payment to be received.

(y) Non-operating income and expenses

(i) Other income

Details of other income of the Group were as follows:

	For the years ended December 31
	2025	2024
Rental income	880	999
Dividend income	11,636	15,922
Claim income	5,398	-
Others	3,889	6,429
Total	21,803	23,350

(ii) Other gains and losses

	For the years ended December 31
	2025	2024
Foreign exchange losses	(14,747)	(3,915)
Gains (losses) on disposals of investments	1,647	(2,984)
Gains on financial assets at fair value through profit or loss	16,949	106,907
Gains on lease modification	27	27
Losses on disposals of property, plant and equipment	-	(70)
Impairment (loss) reversal on non-financial assets	(43)	650
Others	(4)	(63)
Total	$ 3,829	100,552

(iii) Finance costs

	For the years ended December 31
	2025	2024
Interest expense	$ 26,434	22,691

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(z) Remunerations to employees and directors

On May 28, 2025, the Company resolved at the shareholders’ meeting to amend its Articles of Incorporation. According to the amended Articles, if the Company has profit in a given fiscal year, the profit shall first be used to offset any accumulated losses incurred by the Company. The remainder, if any, shall be allocated as follows: 1% to 5% as employee remuneration (including a minimum of 20% to those base-level employees), and a maximum of 2.5% as remuneration for directors and supervisors. Prior to the amendment, the Articles of Incorporation stipulated that, if the Company had profit in a given fiscal year, the profit shall first be used to offset any accumulated losses incurred by the Company. The remainder, if any, 1% to 5% should be allocated as employee remuneration and no more than 2.5% as remuneration for directors and supervisors.

For the years ended 2025 and 2024, there was no appropriation of remunerations to employees and directors because of net loss before tax. These amounts were calculated using the Company's net income before tax without the remunerations to employees and directors for each period, multiplied by the proposed percentage which is stated under the Company's proposed Article of Incorporation. These remunerations were expensed under operating costs or expenses for each period. If there are any subsequent adjustments to the actual remuneration amounts after the annual shareholders' meeting, the adjustment will be regarded as changes in accounting estimates and will be reflected in profit or loss in the following year. Shares distributed to employees as employees' remuneration are calculated based on the closing price of the Company's shares on the day before the approval by the Board of Directors. For the years ended 2024 and 2023, there was no appropriation of remunerations to employees and directors because of net loss before tax. The information is available on the Market Observation Post System Website.

(aa) Financial instruments

Except for the contention mentioned below, there was no significant change in the fair value of the Group’s financial instruments and degree of exposure to credit risk, liquidity risk and market risk arising from financial instruments. For the related information, please refer to note 6(aa) of the consolidated financial statements for the year ended December 31, 2024.

(i) Credit risk

1) Credit risk exposure

The carrying amount of financial assets and contract assets represents the maximum amount exposed to credit risk.

2) Concentration of credit risk

As of December 31, 2025 and 2024, the Group reviewed the concentrations of credit risk arising from the major top ten customers, and it was 93% and 91%, respectively, of the total accounts receivable. The concentrations of credit risk of the remaining accounts receivable are relatively small.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

3) Credit risk of receivables

For credit risk exposure of trade receivables, please refer to note 6(c). Other financial assets at amortized cost include time deposits and other receivables, etc. The allowance for receivables in the financial assets is measured by the amount of lifetime expected credit losses. The remaining financial assets are measured by the amount of 12-month expected credit losses.

(ii) Liquidity risk

The following table shows the contractual maturities of financial liabilities, including estimated interest payments.

	Carrying amount	Contractual cash flows	Within 1 year	1-2 years	2-5 years	Over 5 years
December 31, 2025
Non-derivative financial liabilities
Short-term borrowings	$ 1,457,500	1,462,888	1,462,888	-	-	-
Payables	669,258	669,258	669,258	-	-	-
Long-term borrowings	43,439	45,964	9,779	9,779	26,406	-
Guarantee deposits	650	650	-	-	300	350
Lease liabilities	10,943	12,087	3,895	3,119	1,449	3,624
	$ 2,181,790	2,190,847	2,145,820	12,898	28,155	3,974
December 31, 2024
Non-derivative financial liabilities
Short-term borrowings	$ 1,292,500	1,295,131	1,295,131	-	-	-
Payables	880,168	880,168	880,168	-	-	-
Long-term borrowings	52,070	55,742	9,779	9,779	29,336	6,848
Guarantee deposits	650	650	-	-	300	350
Lease liabilities	12,140	12,794	5,413	2,312	2,241	2,828
	$ 2,237,528	2,244,485	2,190,491	12,091	31,877	10,026

The Group does not expect the cash flows included in the maturity analysis to occur significantly earlier or at significantly different amounts.

(iii) Market risk

1) Currency risk

The Group’s significant exposure to foreign currency risk was as follows:

	December 31, 2025			December 31, 2024
	Foreign currency	Exchange rate	NTD	Foreign currency	Exchange rate	NTD
Financial assets
Monetary items
USD	$ 8,891	31.430	279,444	15,427	32.785	505,774
CNY	9	4.472	40	2,292	4.561	10,454
Financial liabilities
Monetary items
USD	4,675	31.430	146,935	6,353	32.785	208,283

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group’s exposure to foreign currency risk arises from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, accounts receivable, other receivables, other financial assets, accounts payable and other payables that are denominated in foreign currency. A weakening (strengthening) of 1% of the NTD against the USD and CNY as of 2025 and 2024, would have increased/decreased net loss before tax by $1,325 thousand and $3,079 thousand for the years ended December 31, 2025 and 2024, respectively. The analysis is performed on the same basis.

Since the Group has many kinds of functional currency, the information on foreign exchange gain (loss) on monetary items is disclosed by total amount. For the years ended 2025 and 2024, foreign exchange loss (including realized and unrealized portions) amounted to $14,747 thousand and $3,915 thousand, respectively.

2) Interest rate risk

Please refer to the notes on liquidity risk management and interest rate exposure of the Group’s financial assets and liabilities.

The following sensitivity analysis is based on the exposure to the interest rate risk of derivative and non-derivative financial instruments on the reporting date. Regarding assets with variable interest rates, the analysis is based on the assumption that the amount of assets outstanding at the reporting date was outstanding through the year. The rate of change is expressed as the interest rate increases or decreases by 1% when reporting to management internally, which also represents the management’s assessment of the reasonably possible interest rate change.

If the interest rate had increased/decreased by 1%, the Group’s loss before tax would have decreased/increased by $15,009 thousand and $13,446 thousand for the years ended 2025 and 2024, respectively, with all other variable factors remaining constant. This is mainly due to the Group’s loan at variable rates.

3) Other market price risk

If the securities price at the reporting date changes (the analysis is performed on the same basis and all other variable factors remaining constant), the effect for the profit and loss is illustrated below:

	2025		2024
Prices of securities at the reporting date	Other comprehensive income after tax	Net income	Other comprehensive income after tax	Net income
Increasing 1%	$18,432	3,080	15,263	2,707
Decreasing 1%	$(18,432)	(3,080)	(15,263)	(2,707)

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(iv) Fair value information

1) Types and fair value of financial instruments

Financial assets measured at fair value through profit or loss and financial assets at fair value through other comprehensive income are measured at fair value on the basis of repeatability. The carrying amount and fair value of the financial assets and liabilities, including the information on fair value hierarchy were as follows; however, except as described in the following paragraphs, for financial instruments not measured at fair value whose carrying amount is reasonably close to the fair value, for example, financial assets and liabilities measured at amortized cost such as cash and cash equivalents, accounts receivables, other receivables, other financial assets, refundable deposits, short-term borrowings, accounts payable, other payables, long-term borrowings, guarantee deposits and lease liabilities, disclosure of fair value information is not required:

	December 31, 2025
	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Financial assets mandatorily at fair value through profit or loss:
Listed stocks	$ 303,864	303,864	-	-	303,864
Funds	4,086	4,086	-	-	4,086
Financial assets at fair value through other comprehensive income:
Domestic and foreign non-listed stocks	1,843,207	-	-	1,843,207	1,843,207
Total	$ 2,151,157	307,950	-	1,843,207	2,151,157
	December 31, 2024
	Book value	Fair value
		Level 1	Level 2	Level 3	Total
Financial assets at fair value through profit or loss:
Financial assets mandatorily at fair value through profit or loss:
Listed stocks	$ 266,426	266,426	-	-	266,426
Funds	4,297	4,297	-	-	4,297
Financial assets at fair value through other comprehensive income:
Domestic and foreign non-listed stocks	1,526,257	-	-	1,526,257	1,526,257
Total	$ 1,796,980	270,723	-	1,526,257	1,796,980

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

2) Valuation techniques for financial instruments measured at fair value

A financial instrument is regarded as being quoted in an active market if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and those prices represent actual and regularly occurring market transactions on an arm’s-length basis. Whether transactions are taking place ‘regularly’ is a matter of judgment and depends on the facts and circumstances of the market for the instrument.

Quoted market prices may not be indicative of the fair value of an instrument if the activity in the market is infrequent, the market is not well-established, only small volumes are traded, or bid-ask spreads are very wide. Determining whether a market is active involves judgment.

Measurements of fair value of financial instruments without an active market are based on valuation technique or quoted price from a competitor. Fair value, measured by using valuation technique that can be extrapolated from either similar financial instruments or discounted cash flow method or other valuation techniques, including models, is calculated based on available market data at the reporting date. For example, yield curve of Taipei Exchange and average interest rate of commercial paper quoted by Reuters.

Measurements of fair value of equity investments without an active market nor quoted market price are based on comparable listed company method. This method is based on the estimated earnings before interest, taxes, depreciation and amortization and the multipliers that are extrapolated from comparable listed company quoted prices. The estimated fair values are adjusted to the discounting effect of lack of market liquidity.

3) Transfers between Level 1 and Level 2

There were no transfers for the years ended 2025 and 2024.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

4) Reconciliation of Level 3 fair values

	Fair value through other comprehensive income
	Unquoted equity instruments
Opening balance, January 1, 2025	$ 1,526,257
Total gains and losses recognized
Other comprehensive income	330,049
Disposal	(26)
Capital reduction by cash	(1,402)
Effect of exchange rate changes	(11,671)
Ending Balance, December 31, 2025	$ 1,843,207
Opening balance, January 1, 2024	$ 1,217,382
Total gains and losses recognized
Other comprehensive income	295,479
Capital reduction by cash	(4,080)
Effect of exchange rate changes	17,476
Ending Balance, December 31, 2024	$ 1,526,257

Above-mentioned total gains and losses were included in unrealized gains and losses from financial assets at fair value through other comprehensive income. Among those related to the assets still held on 2025 and 2024 were as follows:

	For the years ended December 31
	2025	2024
Total gains and losses recognized:
In other comprehensive income, and presented in “unrealized gains and losses from financial assets at fair value through other comprehensive income”	330,049	295,479

5) Quantified information on significant unobservable inputs (Level 3) used in fair value measurement

The Group’s financial instruments that use Level 3 inputs to measure fair value include financial assets measured at fair value through other comprehensive income-equity investments.

The Group’s equity investments without an active market which are classified as Level 3 have numerous unobservable inputs. The significant unobservable inputs of equity instrument investments are not correlated to each other.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Quantified information of significant unobservable inputs was as follows:

Item	Valuation technique	Significant unobservable inputs	Inter-relationship between significant unobservable inputs and fair value measurement
Financial assets at fair value through other comprehensive income - equity investments without an active market	Market method (Comparable company method)	Price to book ratio (0.86~1.58 and 1.12~1.90 as of December 31, 2025 and 2024, respectively)	The fair value would increase if price to book ratio increase
		Lack of market liquidity discount (10%~35% and 20%~30% as of December 31, 2025 and 2024, respectively)	The fair value would decrease if lack of market liquidity discount increase
	Net asset value method	Net Asset Value	The estimated fair value would increase if the net asset value increase

6) Fair value measurements in Level 3 – sensitivity analysis of reasonably possible alternative assumptions

The fair value measurement of financial instruments by the Group is reasonable, but the use of different evaluation models or evaluation parameters may result in different evaluation results. For financial instruments classified as Level 3, changing the price to book ratio or liquidity discount would have the following effects on other comprehensive income:

	Inputs	Increase/Decrease	Other comprehensive income
			Favorable	Unfavorable
December 31, 2025
Financial assets at fair value through other comprehensive income	Price to book ratio	10%	$ 3,400	(3,400)
	Liquidity discount	10%	62,134	(62,314)
December 31, 2024
Financial assets at fair value through other comprehensive income	Price to book ratio	10%	4,047	(4,047)
	Liquidity discount	10%	37,943	(37,943)

The favorable and unfavorable changes of the Group refer to the fluctuation of fair value, and the fair value is calculated by valuation techniques based on the unobservable input parameters of different degrees.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ab) Financial risk management

There were no significant changes in the Group’s financial risk management and policies as disclosed in note 6(ab) of the consolidated financial statements for the year ended December 31, 2024.

(i) Overview

The Group have exposures to the following risks from its financial instruments:

1) credit risk
2) liquidity risk
3) market risk

The following likewise discusses the Group’s objectives, policies and processes for measuring and managing the above mentioned risks. For more disclosures about the quantitative effects of these risks exposures, please refer to the respective notes in the accompanying consolidated financial statements.

(ii) Structure of risk management

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The financial department of the Group provides services and coordinates the operation of the financial market. And the important activities are subject to the Board of Directors' approval. The Group must be abided by the financial risk management and operation. Internal Audit undertakes reviews of risk management controls and procedures, the results of which are reported to the Board of Directors regularly.

(iii) Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and investments in debt securities.

1) Accounts receivable and other receivable

The financial department has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, when available, and bank references. Purchase limits are established for each customer and represent the maximum open amount without requiring approval from the financial department; these limits are reviewed regularly. Customers that fail to meet the Group’s benchmark creditworthiness may transact with the Group only on a prepayment basis.

The customers of the Group covered many types and regions. In order to reduce credit risk, the Group review financial status and recoverable of account receivable each customer regularly and accounted loss allowance.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

The Group has allowance for impairment losses account to reflect the estimated loss of account receivable and other receivables. The main components of the allowance account include specific loss components related to individual significant risks, and combined loss components established for similar asset groups that have occurred but have not yet been identified. Portfolio loss allowance accounts are determined based on historical payment statistics for similar financial assets.

2) Investments

The exposure to credit risk for the bank deposits, fixed income investments, and other financial instruments is measured and monitored by the Group’s finance department. The Group only deals with financial institutions with good credit rating. The Group does not concentrate on specific counterparty hence there is no significant credit risk arising therefrom.

(iv) Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it always has sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages sufficient cash and cash equivalents so as to cope with its operations and mitigate the effects of fluctuations in cash flows. The Group’s management supervises the banking facilities and ensures compliance with the terms of loan agreements.

(v) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

1) Currency risk

The Group is exposed to currency risk on sales and purchases are denominated in a currency other than the respective functional currencies of the Group’s entities. The currency used in these transactions is USD. The Group adopts a natural hedging strategy. When the net assets and liabilities imbalances occur in the short term, the Group buys or sells foreign currencies to maintain exposures at an acceptable level.

2) Interest rate risk

Interest rate risk is the risk of changes in the fair value of financial instruments caused by changes in market interest rates or the risk of changes in cash flows of financial instruments caused by changes in market interest rates. The interest rate risk of the financial assets and liabilities is described in the note of liquidity risk management.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

3) Other market price risk

The Group is exposed to equity price risk due to the investments in equity securities. The Group actively monitors the performance of this investment portfolios using fair value basis. This is a strategic investment and is not held for trading. The Group does not actively trade in these investments.

(ac) Capital management

The Group plans its capital which need in the future (including research and development costs and repayment) based on the characteristics of its current operating industry and future development plans, while taking into consideration changes in the external environment, in order to ensure the Group’s sustainable operations, provide returns to shareholders while safeguarding the interests of other stakeholders, and maintain an optimal capital structure so as to enhance shareholder value. Overall, the Group adopts a prudent risk management strategy.

(ad) Investing and financing activities not affecting current cash flows

The Group's investing and financing activities which did not affect the current cash flow in the years ended 2025 and 2024 are as follows:

(i) The Group had unpaid $4,202 thousand and $5,180 thousand for the acquisition of property, plant, and equipment for the years ended 2025 and 2024, respectively. Please refer to Note 6(q) for details.

(ii) Reconciliation of liabilities arising from non-cash financing activities for the years ended 2025 and 2024 were as follows:

	January 1, 2025	Cash flows	Non-cash changes		December 31, 2025
			Lease modification	Additions
Lease liabilities	$ 12,140	(5,733)	1,002	3,534	10,943
	January 1, 2024	Cash flows	Non-cash changes		December 31, 2024
			Lease modification	Additions
Lease liabilities	$ 19,116	(7,071)	95	-	12,140

(7) Related-party transactions

(a) Names and relationship with related parties

Name of related party	Relationship with the Company
Eastern Broadcasting Co., Ltd.	A substantive related party
Tien Lai Co., Ltd.	The entity which is significantly influenced by the Group (Note)
Universal Investment Limited	Associate

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

Note: Since April 1, 2024, the Group has lost control over Tianlai Industries Co., Ltd., and the related party transactions between the Group and Tien Lai Co., Ltd. during January 1, 2024 to March 31, 2024 have been eliminated.

(b) Significant transactions with related parties

(i) Receivables from related parties

Receivables from the related parties were as follows:

Accounts	Types of related parties	December 31, 2025	December 31, 2024
Other receivables	Eastern Broadcasting Co., Ltd.	$ 83	83

(ii) Payables to related parties

Accounts	Types of related parties	December 31, 2025	December 31, 2024
Other payables	Tien Lai Co., Ltd.	$ 593	601

(iii) Service costs

The Group has entrusted related parties to provide services, the details are as follows:

For the years ended December 31
	2025	2024
Tien Lai Co., Ltd.	3,692	2,650

(iv) Financial assets transactions

1) Disposal of financial assets

The group's disposals of financial assets to related parties is presented as follows:

Types of related parties	Accounts	2025
		Number of shares transacted	Underlying assets	Proceeds from disposal	Gain on disposal
Universal Investments Limited	Investments accounted for using the equity method	200,000	Hung Kang Co., Ltd	1,966	103

For the years ended December 31
	2025	2024
Short-term employee benefits	$ 37,529	37,445
Post-employment benefits	1,313	1,313
	$ 38,842	38,758

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(8) Assets pledged as security

The carrying amounts of pledged assets were as follows:

Pledged assets	Object	December 31, 2025	December 31, 2024
Cash in banks (other financial assets)	Performance guarantee	$ 12,200	13,860
Land, buildings and structures	Borrowings	1,349,173	1,359,446
		$ 1,361,373	1,373,306

(9) Commitments and contingencies

(a) Letter of credit issued but not expired

	December 31, 2025	December 31, 2024
Letter of credit outstanding for the import of raw materials	$ 752,000	1,472,993

(10) Losses due to major disasters: None.
(11) Subsequent events: None.
(12) Other

(a) A summary of employee benefits, depreciation, and amortization, by function, is as follows:

	For the years ended December 31
By Function	2025
By item	Operating cost
Employee benefits
Salary	$ 170,183
Labor and health insurance	17,127
Pension	8,798
Others	11,142
Depreciation	257,759
Amortization	1,237

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(13) Other disclosures:

(a) Information on significant transactions

The following is the information on significant transactions required by the “Regulations Governing the Preparation of Financial Reports by Securities Issuers” for the Group for the years ended December 31, 2025:

(i) Lending to other parties: None.
(ii) Guarantees and endorsements for other parties: None.
(iii) Information regarding securities held at the reporting day (excluding investment in subsidiaries, associates and joint ventures):

(in Thousands of New Taiwan Dollars)

Name of holder	Category and name of security	Relationship with the security issuer	Account	Ending balance				Highest Percentage of ownership (%)
				Shares	Carrying value	Percentage of ownership (%)	Fair value
The Company	Test Research, Inc.	-	Current financial assets at fair value through profit or loss	155,000	29,682	0.07 %	29,682	0.09 %
The Company	Hon Hai Precision Industry Co., Ltd.	-	Current financial assets at fair value through profit or loss	160,000	36,880	- %	36,880	- %
The Company	Global Investment Holding Co., Ltd	-	Non-current investment in equity instrument at FVOCI	10,233,608	99,270	6.03 %	99,270	6.03 %
The Company	Yuan-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	21,000,000	576,139	19.09 %	576,139	19.09 %
The Company	Yu-Jie Investment Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	21,320,000	679,985	19.38 %	679,985	19.38 %
YSIC Ltd.	Global Unichip Corp.	-	Current financial assets at fair value through profit or loss	20,000	42,500	0.01 %	42,500	0.01 %
YSIC Ltd.	Asia Vital Components Co., Ltd.	-	Current financial assets at fair value through profit or loss	20,000	30,200	0.01 %	30,200	0.01 %
YSIC Ltd.	CJW INTERNATIONAL CO., LTD.	-	Non-current financial assets at fair value through profit or loss	312,212	3,528	0.47 %	3,528	0.47 %
Grand Capital Co., Ltd.	Deng Yun Co., Ltd.	-	Non-current investment in equity instrument at FVOCI	3,082,453	306,309	16.10 %	306,309	16.10 %

(iv) Information regarding related-parties purchases and/or sales exceeding NTD100 million or 20% of the Company’s paid-in capital: None

(v) Information regarding receivables from related-parties exceeding NTD100 million or 20% of the Company’s paid-in capital: None

(vi) Significant transactions and business relationship between the parent company and its subsidiaries for the year ended December 31, 2025: None

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(b) Information on investees:

The following is the information on investees for the years ended December 31, 2025 (excluding information on investees in Mainland China):

(In Thousands of New Taiwan Dollars)

Name of invester	Name of investee	Location	Main businesses and products	Original investment amount		Balance as of December 31, 2025			Highest Percentage of ownership	Net income (losses) of investee	Share of profit/losses of investee	Note
				December 31, 2025	December 31, 2024	Shares	Percentage of ownership	Carrying value
The Company	Grand Cathay Venture Capital Co., Ltd.	Taiwan	Investment business	400,000	400,000	40,000,000	25.00 %	518,815	25.00 %	(27,574)	(6,893)
The Company	Wonderland Enterprise Co., Ltd.	Taiwan	General investment business	325,230	325,230	29,629,597	29.63 %	1,950,752	37.04 %	(144,030)	(43,059)
The Company	Functional Coating System Technologies Co., Ltd.	Taiwan	OEM of semiconductor and components conformal coating	30,244	28,500	1,802,325	36.05 %	33,631	36.05 %	5,191	1,824
The Company	Universal Investments Limited	British Cayman Islands	Real estate investment business	17,273	17,273	80	40.00 %	15,598	40.00 %	(2,196)	(1,102)
The Company	Hong Kong Co., Ltd	Taiwan	Maritime Transport Industry	6,883	-	700,000	35.00 %	6,114	45.00 %	(4,670)	(873)
The Company	YSIC Ltd.	Taiwan	General investment, residential building and industrial plant development rental business	1,418,200	1,638,169	50,449,923	99.99 %	859,315	99.99 %	22,158	22,155	Subsidiary
The Company	Yuan-Shin Materials Technology Co. Ltd	Taiwan	Basic precision chemical materials and plastic raw material manufacturing	145,900	145,900	5,000,000	100.00 %	55,079	100.00 %	3,350	3,350	Subsidiary
The Company	Yangmingshan Tian Lai Resort & SPA	Taiwan	General hotel industry	630,555	630,555	25,865,618	65.07 %	692,834	65.07 %	4,653	714	Subsidiary
YSIC Ltd.	Kun Shan International Ltd.	Seychelles	General investment business	-	-	100,000	100.00 %	44,182	100.00 %	6,299	6,299	Subsidiary
YSIC Ltd.	Grand Capital Co., Ltd.	Seychelles	General investment business	90,182	90,182	2,698,002	100.00 %	307,972	100.00 %	(30)	(30)	Subsidiary
YSIC Ltd.	Yangmingshan Tian Lai Resort & SPA	Taiwan	General hotel industry	110,836	110,836	4,807,774	12.10 %	118,728	12.10 %	4,653	203	Subsidiary
YSIC Ltd.	Tien Lai Co., Ltd.	Taiwan	Pipe Lines Construction	5,000	5,000	267,000	19.78 %	1,934	19.78 %	1,254	248
Yangmingshan Tian Lai Resort & SPA	Tien Lai Co., Ltd.	Taiwan	Pipe Lines Construction	4,080	4,080	408,000	30.22 %	5,007	30.22 %	1,254	379

(i) The names of investees in Mainland China, the main businesses and products, and other information:

(In Thousands of New Taiwan Dollars)

Name of investee	Main businesses and products	Total amount of paid-in capital	Method of investment (Note 1)	Accumulated outflow of investment from Taiwan as of January 1, 2025	Investment flows		Accumulated outflow of investment from Taiwan as of December 31, 2025	Net income (losses) of the investee (Note 2)	Percentage of ownership	Highest Percentage of ownership	Investment income (losses)	Book value	Accumulated remittance of earnings in current period
					Outflow	Inflow
Kun Shan Yu-Fu Technology Education Consulting Co., Ltd.	Educational consulting, information operation consulting, software and data storage consultation	1,143 (USD 100)	1,3:1	1,143 (USD 100)	-	-	5,143 (USD 100)	8,982 (USD 111)	100.00 %	100.00 %	6,982	24,083	80,747

Note1: The investment methods are divided into the following three types: (1) Direct investment in Mainland China. (2) Indirect investment in Mainland China through a holding company established in other countries. (3) Others.

Note2: The foreign currency transactions have been translated into New Taiwan Dollar at the exchange rate at the end of the financial reporting date and the average exchange rate (USD1=NTD31.43, USD1=NTD31.23333).

Note3: Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. had been spun-off as Kun Shan Yu-Fu Technology Education Consulting Co., Ltd. and Kun Shan Jia-An Technology Education Consulting Co., Ltd. Kun Shan Jia-An Technology Education Consulting Co., Ltd. completed liquidation in February 2024.

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(ii) Upper limit on investment in Mainland China:

Accumulated Investment in Mainland China as of December 31, 2025	Investment Amounts Authorized by Investment Commission, MOEA	Upper Limit on Investment (Note)
3,143
(USD 100)	3,143
(USD 100)	515,661

Note: The investment limit was calculated based on the official document 10804600980 announced by the MOEAIC on March 12, 2019.

(iii) Significant inter-company transactions with the subsidiary in Mainland China: None.

(14) Segment information:

(a) General information

(i) Plasticization segment: manufacturing and domestic/international sales of styrene monomer, manufacturing and sales of chemical materials and plastic materials.

(ii) Investment segment: investment business.

(iii) Other segment: the revenues of the segments that have not reached the quantitative threshold are hotel and general service business.

(b) The Group’s operating segment information and reconciliation are as follows:

(Continued)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

	For the years ended December 31, 2025
	Plasticization segment	Investment segment	Other segments	Reconciliation and elimination	Total
Revenue
Revenue from external customers	$ 8,477,879	37,430	158,467	-	8,673,776
Inter-segment revenues	-	374	63	(437)	-
Total revenue	$ 8,477,879	37,804	158,530	(437)	8,673,776
Reportable segment profit or loss	$ (764,232)	23,726	5,614	(29,096)	(763,988)
	2024
	Plasticization segment	Investment segment	Other segments	Reconciliation and elimination	Total
Revenue
Revenue from external customers	$ 11,243,294	27,752	151,894	-	11,422,940
Inter-segment revenues	-	(255)	1,204	(949)	-
Total revenue	$ 11,243,294	27,497	153,098	(949)	11,422,940
Reportable segment profit or loss	$ (474,293)	10,150	(774)	(17,563)	(482,480)

(i) Information about products and services

The Group operating business by production perspective and information about products and services revenue from external customers is the same as in note 14(b).

(ii) Information about major customers

	2025	2024
Customer A from Plasticization segment	$ 3,290,251	5,171,627
Customer B from Plasticization segment	1,951,601	2,194,690
	$ 5,241,852	7,366,317

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T.S.M.C. — Audit Report / Information 2025

51769_rns_2026-05-18_91ddc5fc-437f-451d-9ebe-97b26225f857.pdf

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Table of contents

Representation Letter

Independent Auditors' Report

Opinion

Basis for Opinion

Key Audit Matters

1. Revenue recognition

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

Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements

Notes to Readers

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(English Translation of Consolidated Financial Statements Originally Issued in Chinese)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows (Continued)

For the years ended December 31, 2025 and 2024

(Expressed in Thousands of New Taiwan Dollars)

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(4) Summary of material accounting policies

(a) Statement of compliance

(b) Basis of Preparation

(i) Basis of Measurement

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

(6) Explanation of significant accounts

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

TAIWAN STYRENE MONOMER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

T.S.M.C. Audit Report / Information 2025